Archive for November 2019

What is the difference between adaptation and standardization with examples?

What is the difference between adaptation and standardization with examples?



Standardization (Globalization) is executed in the same way. Developing standardized products marketed worldwide with a standardized marketing mix.

- Essence of mass marketing.

EX- Coca Cola

Adaptation (Global Localization) is executed in different ways. Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction.

- Essence of segmentation
- Think globally, act locally

EX- NIKE recently adopted the slogan "Here I Am" for its pan European clothing ads targeting women. Dropped the "Just Do it" due to Euro women not being as competitive about sports as men are.

Ex- Oreo, McDonalds

What are the dimensions of GM strategy and why are they important?

What are the dimensions of GM strategy and why are they important?



Global market participation is the extent to which a company had operations in major world markets.
Standardization versus adaptation is the extent which each marketing mix is standardized or adapted in various country markets.

Concentration of marketing activities is the extent to which these activities related to the marketing mix are performed on ore or a few country locations.

Coordination of marketing activities refers to the extent to which marking activities related to the marketing mix are planned and executed interdependently around the globe.

Integration of competitive moves is the extent to which a firm's competitive marketing tactics in different parts of the world are interdependent

What is the perceived value and why is it important in Global Marketing?

What is the perceived value and why is it important in Global Marketing?



Answer: Perceived value is the value created for customers by improving benefits or reducing price. Value proposition is when there is a perceived value to the customer and the firm's promise to customer.

(Value= Benefits/price [money,time,effort, etc.] )It is important in GM b/c one wants to stand out from its competitors such as improving the product, find new distribution channels, create better communications, cut monetary costs and prices.

What makes a firm successful in Global Marketing?

What makes a firm successful in Global Marketing?



Local excellence

They understands specific concepts and has a broad and deep understanding of the world's varied business environments.

Explain the four management orientations marketing managers may take to international marketing.

Explain the four management orientations marketing managers may take to international marketing.




  • Ethnocentric orientation (when a company believes that their country is superior to the rest of the worlds, so they don't change their product when selling it abroad to adhere to the new location.
  • Polycentric Orientation (the idea that every country in which a company does business is unique. Each subsidiary must develop its own unique business and marketing strategies).
  • Regiocentric Orientation (when a company is only focused on developing and selling its products in a specific region (North America, Europe)).
  • Geocentric Orientation (when a company views the entire world as a potential market and strives to develop integrated global strategies.

Organizations that facilitate the exchange and flow of information among departments that have previously been autonomous are referred to by which of the following terms?

Organizations that facilitate the exchange and flow of information among departments that have previously been autonomous are referred to by which of the following terms?



A. a flattened organization
B. a centralized organization
C. a traditional organization
D. a structured organization
E. a hierarchical organizaiton


Answer: A. a flattened organization

Which of the following is the type of company that delegates responsibility for research to operating subsidiaries but retains overall responsibility and control of research as a headquarters' function?

Which of the following is the type of company that delegates responsibility for research to operating subsidiaries but retains overall responsibility and control of research as a headquarters' function?



A. a domestic company
B. a global company
C. multinational company
D. a polycentric company
E. a single-country company


Answer: B. a global company

In a traditional market research process, a _____ may be created to identify brands that are in direct competition with each other within the global market.

In a traditional market research process, a _____ may be created to identify brands that are in direct competition with each other within the global market.



A. cluster analysis
B. factor analysis
C. multi-dimensional scaling (MDS)
D. dependence technique
E. perceptual map


Answer: E. perceptual map

Survey research is used to elicit which of the following?

Survey research is used to elicit which of the following?



A. only qualitative responses
B. secondary proprietary data
C. only quantitative data
D. both quantitative and qualitative responses
E. secondary data


Answer: D. both quantitative and qualitative responses

One of the environmental factors that requires personnel to understand a whole new set of culture-based assumptions when conducting business is _______.

One of the environmental factors that requires personnel to understand a whole new set of culture-based assumptions when conducting business is _______.



A. competitive pressures that would not be present in the domestic market.
B. cultural mega shock
C. differences in requirements for doing business in that culture
D. interacting factors in more than one market
E. differences in the ways in which rules are applied


Answer: B. cultural mega shock

Which of the following is the major challenge specific to global market research?

Which of the following is the major challenge specific to global market research?



A. research design
B. the ability to recognize and respond to national differences
C. experience of the researcher
D. the resistance of governments to allow research to take place
E. Validity of responses


Answer: B. the ability to recognize and respond to national differences

A local manager at the (Best Price) store in Mumbai noticed two men carrying their recent purchase of a ladder along the street. From this, the manager concluded the store needed a delivery service for larger items. This is an example of what source of market information?

A local manager at the (Best Price) store in Mumbai noticed two men carrying their recent purchase of a ladder along the street. From this, the manager concluded the store needed a delivery service for larger items. This is an example of what source of market information?



A. Internal referencing
B. Direct sensory perception
C. secondary market research
D. Quantitative research
E. Second-hand information gathering


Answer: B. Direct sensory perception

In regard to market research, a major source of competitive strength is the role that the global executives play in _____.

In regard to market research, a major source of competitive strength is the role that the global executives play in _____.



A. building relationships with customers
B. learning how to localize the product
C. creating a positive brand image
D. acquiring information about the world environment
E. creating a home office abroad


Answer: D. Acquiring information about the world environment

In today's environment, customer retention is more important than customer acquisition. The objective of collecting customer information is ________?

In today's environment, customer retention is more important than customer acquisition. The objective of collecting customer information is ________?



A. For Customer Relationship Management
B. to support direct sensory perception findings
C. to justify the purchase of a Point of Sale (POS) system
D. to create efficient consumer response (ECR)
E. to implement sales force automation


Answer: A. for customer relationship management

To overcome the challenges of creating a" 360-degree view" of the customer in the global marketplace, what do industry experts recommend?

To overcome the challenges of creating a" 360-degree view" of the customer in the global marketplace, what do industry experts recommend?



A. Create a unique CRM program for each country
B. Use the same CRM program being used in the home country
C. Introduce CRM in phases
D. Regionalize the CRM program
E. Don't try. It's impossible to create a 360-degree view of a different culture.


Answer: C. Introduce CRM in phases

Which of the following tools allow companies to determine which customers are most valuable so they can react in a timely manner with products that closely match customer needs?

Which of the following tools allow companies to determine which customers are most valuable so they can react in a timely manner with products that closely match customer needs?



A. Electronic data interchange (EDI)
B. Customer relationship management (CRM)
C. Efficient consumer response (ECR)
D. Information technology (IT)
E. Electronic point of sale (EPOS)


Answer: B. customer relationship management

Which of the following describes the integration of activities necessary to ensure the efficient flow of raw​ materials, in-process​ inventory, and finished goods from producer to​ customers?

Which of the following describes the integration of activities necessary to ensure the efficient flow of raw​ materials, in-process​ inventory, and finished goods from producer to​ customers?



A.Supply chain
B.Physical distribution
C.Value chain
D.Logistics management
E.Transportation


Answer: D.Logistics management

India lacks a developed highway system. This infrastructure weakness has the largest effect on which of​ Walmart's distribution activities in​ India?

India lacks a developed highway system. This infrastructure weakness has the largest effect on which of​ Walmart's distribution activities in​ India?



A.Warehousing
B.Inventory management
C.Communication
D.Physical distribution and logistics
E.Order processing


Answer: D.Physical distribution and logistics

Based on the global retailing market entry strategy​ framework, which of the following is most appropriate for entering a market where the barriers to entry are low yet the market is culturally​ distant?

Based on the global retailing market entry strategy​ framework, which of the following is most appropriate for entering a market where the barriers to entry are low yet the market is culturally​ distant?



A.Organic growth
B.Acquisition
C.Joint venture
D.Licensing
E.Franchising


Answer: E.Franchising

In​ 2011, Walmart purchased a majority stake in​ Massmart, a South African regional management group.​ Walmart's retail market entry strategy in South Africa was through​ ______________.

In​ 2011, Walmart purchased a majority stake in​ Massmart, a South African regional management group.​ Walmart's retail market entry strategy in South Africa was through​ ______________.



A.greenfield investment
B.joint venture agreement
C.franchise agreement
D.acquisition
E.a strategic alliance


Answer: D.acquisition

What strategy do large supermarket​ operators, like​ Carefree, use to compete against​ hard-discount retailers, like Aldi and​ Lidl?

What strategy do large supermarket​ operators, like​ Carefree, use to compete against​ hard-discount retailers, like Aldi and​ Lidl?



A.Offering only European brands
B.Forming joint ventures with local companies
C.Offering more​ own-brand products at lower prices
D.Slashing prices on global brands
E.Building larger stores


Answer: C.Offering more​ own-brand products at lower prices

In which quadrant of the matrix for classifying global retailers would you find Home​ Depot?

In which quadrant of the matrix for classifying global retailers would you find Home​ Depot?



A.Quadrant​ B: private label focuslong dash—expanded product categories
B.A combination of quadrant A and quadrant C.
C.Quadrant​ D: mega-retailers offering products available in other smaller competitors
D.Quadrant​ C: well-known brands in rather narrow merchandise mix
E.Quadrant​ A: niche focus


Answer: D.Quadrant​ C: well-known brands in rather narrow merchandise mix

In​ India, My Dollar Store targets​ affluent, middle-class shoppers who are attracted by the lure of low prices on brands associated with the United States. This model of selling a select assortment of products at a single low price is what type of​ retailing?

In​ India, My Dollar Store targets​ affluent, middle-class shoppers who are attracted by the lure of low prices on brands associated with the United States. This model of selling a select assortment of products at a single low price is what type of​ retailing?



A.Convenience stores
B.Discount retailers
C.Outlet stores
D.Hard discounters
E.Specialty retailers


Answer: B.Discount retailers

Which of the following types of retail formats was created to give manufacturers of​ well-known brands a retail distribution point for excess​ inventory, out-of-date​ merchandise, or factory​ seconds?

Which of the following types of retail formats was created to give manufacturers of​ well-known brands a retail distribution point for excess​ inventory, out-of-date​ merchandise, or factory​ seconds?



A.Outlet stores
B.Superstores
C.Shopping malls
D.Hypermarkets
E.Specialty retailers


Answer: A.Outlet stores

In some​ cases, a manufacturer might find it necessary to incur the costs of direct involvement to obtain market share because​ ________.

In some​ cases, a manufacturer might find it necessary to incur the costs of direct involvement to obtain market share because​ ________.



A.direct involvement is a better​ long-term approach
B.middlemen may seek to maximize their own profit
This is the correct answer.
C.direct involvement requires less management
D.there​ aren't many intermediaries available
E.direct involvement is less expensive


Answer: B.middlemen may seek to maximize their own profit

A toy retailer in China only wants to carry​ Ty™ Beanie​ Boos; not the entire line of​ Ty's™ toy collection. This retailer is practicing​ _________________.

A toy retailer in China only wants to carry​ Ty™ Beanie​ Boos; not the entire line of​ Ty's™ toy collection. This retailer is practicing​ _________________.



A.product discrimination
B.partnership optimization
C.cost reductions
D.proactive price selection
E.cherry picking


Answer: E.cherry picking

Which of the following is a​ "core" recommendation that comes from the guidelines for working with intermediaries in global​ markets?

Which of the following is a​ "core" recommendation that comes from the guidelines for working with intermediaries in global​ markets?



A.The manufacturer needs to take the lead.
B.Get everything in writing.
C.The goal of all intermediaries is to maximize profits for the manufacturer.
D.Channel decisions​ aren't very important.
E.Direct involvement saves money.


Answer: A.The manufacturer needs to take the lead.

Which of the following is the channel alternative used by companies offering​ expensive, complicated products that require both explanation and applications analysis focused on each​ customer's needs?

Which of the following is the channel alternative used by companies offering​ expensive, complicated products that require both explanation and applications analysis focused on each​ customer's needs?



A.Manufacturer's sales force
B.Manufacturer's agents
C.Wholesalers
D.Distributors
E.Direct


Answer: A.Manufacturer's sales force

In emerging​ markets, many consumers shop for items several times a day at​ tiny, independent​ "mom-and-pop" stores,​ kiosks, and market stalls. These operations are known as​ ________.

In emerging​ markets, many consumers shop for items several times a day at​ tiny, independent​ "mom-and-pop" stores,​ kiosks, and market stalls. These operations are known as​ ________.



A.convenience stores
B.big box stores
C.independent stores
D.high-frequency stores
E.subsidiaries


Answer: D.high-frequency stores

Which of the following best explains why the direct sales channel is the most effective channel in most Asian​ countries?

Which of the following best explains why the direct sales channel is the most effective channel in most Asian​ countries?



A.Direct sales provide greater channel control.
B.Direct sales are more​ cost-effective.
C.Fixed costs are reduced with direct sales.
D.Direct sales have a greater margin.
E.Direct sales are based on relationships.


Answer: E.Direct sales are based on relationships.

Distributors are

Distributors are



A. support staff for the outside sales force
B. a separate Sales channel
C. Original Equipment Manufacturers


Answer: B

Each market segment responds to different types of media (e.g. print, direct mail, etc.) to a varying degree. It follows then that each product must be identified with its target segment. Product target segments are identified by

Each market segment responds to different types of media (e.g. print, direct mail, etc.) to a varying degree. It follows then that each product must be identified with its target segment. Product target segments are identified by



A. their placement on the Perceptual Map
B. entering their status on the Pricing and Forecasting spreadsheet
C. entering the target segment on the Marketing Budget Detail


Answer: C

There are two teams, Andrews and Baldwin. As a result of an earlier labor negotiation, Andrews workers earn $20.00. Baldwin workers earn $22.00. What will Labor demand?

There are two teams, Andrews and Baldwin. As a result of an earlier labor negotiation, Andrews workers earn $20.00. Baldwin workers earn $22.00. What will Labor demand?



A. Andrews $22.00. Baldwin $24.20.
B. Andrews $24.20. Baldwin $24.20.
C. Andrews $24.20. Baldwin $22.00.
D. Andrews $24.00. Baldwin $24.00
E. None of the above.


Answer: B

Suppose workers earn $20.00 in the current contract. There are only two teams, Andrews and Baldwin. Labor demands $22.00. Andrews gives its negotiators a range of $23.00 to $25.00. Baldwin gives its negotiators a range of $20.20 to $22.20. Will Labor strike:

Suppose workers earn $20.00 in the current contract. There are only two teams, Andrews and Baldwin. Labor demands $22.00. Andrews gives its negotiators a range of $23.00 to $25.00. Baldwin gives its negotiators a range of $20.20 to $22.20. Will Labor strike:



A. Andrews
B. Baldwin
C. Both
D. Neither


Answer: B

Generally, Separation Costs will be incurred when

Generally, Separation Costs will be incurred when



A. Production levels increase
B. Automation Levels increase
C. Production Levels decrease
D. Production levels decrease and / or Automation levels increase


Answer: D

Recruiting Costs are incurred when

Recruiting Costs are incurred when



A. Automation levels increase
B. Production runs increase and teams match hiring to Needed Complement
C. workers are assigned to a Second Shift


Answer: B

Increasing Training Hours tends to

Increasing Training Hours tends to



A. increase the Needed Complement
B. decrease the Needed Complement
C. neither increase nor decrease the Needed Complement
D. both increase and decrease the Needed Complement


Answer: D

Increasing Capacity tends to

Increasing Capacity tends to



A. reduce the Needed Complement
B. reduce the number of workers on Second Shift
C. reduce Overtime


Answer: B

Management should strive to

Management should strive to



A. increase Turnover
B. decrease Turnover


Answer: B

Production runs can be scheduled in

Production runs can be scheduled in



A. only one shift
B. always two shifts
C. one or two shifts
D. up to three shifts


Answer: C

This type of business is a company owned by one person. This means all profits are the property of the owner and the owner is personally responsible for the company's losses and debts.

This type of business is a company owned by one person. This means all profits are the property of the owner and the owner is personally responsible for the company's losses and debts.


A. Limited partnership
B. Partnership
C. Corporation
D. Sole proprietorship
E. Association


Answer: D. Sole proprietorship

Double taxation is a big disadvantage of _____.

Double taxation is a big disadvantage of _____.


A. partnerships
B. corporations
C. sole proprietorships
D. limited liability partnerships
E. associations


Answer: B. corporations

Which of the following management fads involved gatherings of approximately 8 to 15 people openly discussing their emotions, feelings, beliefs, and biases about workplace issues?

Which of the following management fads involved gatherings of approximately 8 to 15 people openly discussing their emotions, feelings, beliefs, and biases about workplace issues?


A. Onboarding
B. Quality circles
C. Viral marketing
D. T-groups
E. Groupthink


Answer: D. T-groups

An advertising firm aims to foster creativity amongst its employees. Which of the following types of organizational control systems is the firm most likely to use?

An advertising firm aims to foster creativity amongst its employees. Which of the following types of organizational control systems is the firm most likely to use?


A. Behavioral control
B. Hierarchical control
C. Clan control
D. Output control
E. Quantitative control


Answer: C. Clan control

Which of the following is true about clan control?

Which of the following is true about clan control?


A. It relies on implementation of various organizational rules and procedures.
B. It is often used in settings where creativity is vital.
C. It focuses on measurable results within an organization.
D. It is a formal type of control.
E. It focuses on controlling the actions that ultimately lead to results.


Answer: B. It is often used in settings where creativity is vital.

Examples of _____ control include the number of hits a website receives per day, the number of microwave ovens an assembly line produces per week, and the number of vehicles a car salesman sells per month.

Examples of _____ control include the number of hits a website receives per day, the number of microwave ovens an assembly line produces per week, and the number of vehicles a car salesman sells per month.


A. qualitative
B. clan
C. output
D. informal
E. behavioral


Answer: C. output

Which of the following best describes output control?

Which of the following best describes output control?


A. It focuses on controlling the actions that ultimately lead to results.
B. It relies on implementation of various organizational rules and procedures.
C. It is an informal type of control.
D. It relies on shared expectations and values of employees.
E. It focuses on measurable results within an organization.


Answer: E. It focuses on measurable results within an organization.

A matrix structure differs from a multi divisional structure in that a matrix structure:

A matrix structure differs from a multi divisional structure in that a matrix structure:


A. relies on formal systems of division of labor.
B. divides employees into departments based on product areas.
C. makes it easy for a firm to act quickly.
D. relies heavily on horizontal relationships.
E. reduces the organization's flexibility.


Answer: D. relies heavily on horizontal relationships.

Which of the following statements about multi divisional structures is accurate?

Which of the following statements about multi divisional structures is accurate?


A. They allow a firm to implement strategic moves quickly.
B. They do not rely on formal systems of division of labor.
C. They create cross-functional teams that each work on a different project.
D. They rely heavily on horizontal relationships.
E. They work best for organizations that offer narrow and stable product lines.


Answer: A. They allow a firm to implement strategic moves quickly.

Within a _____ structure, employees are divided into departments that each handles activities, such as marketing, production, human resources, information technology, and customer service.

Within a _____ structure, employees are divided into departments that each handles activities, such as marketing, production, human resources, information technology, and customer service.


A. connected
B. matrix
C. mosaic
D. functional
E. simple


Answer: D. functional

Which of the following statements about simple structures is accurate?

Which of the following statements about simple structures is accurate?


A. They do not rely on formal systems of division of labor.
B. They violate the unity of command principle.
C. They tend reduce conflicts within departments.
D. They help in developing new managers.
E. They tend to create highly-skilled specialists.


Answer: A. They do not rely on formal systems of division of labor.

Which of the following is true about informal linkages?

Which of the following is true about informal linkages?


A. They tie supervisors and subordinates together.
B. They are relationships between equals in an organization.
C. They do not appear in organizational charts, but can have a significant influence on how firms operate.
D. They show the lines of responsibility through which a supervisor delegates authority to subordinates.
E. They are often called committees, task forces, or teams.


Answer: C. They do not appear in organizational charts, but can have a significant influence on how firms operate.

Which of the following best describes horizontal linkages?

Which of the following best describes horizontal linkages?


A. They refer to unofficial relationships such as personal friendships, rivalries, and politics.
B. They are relationships between equals in an organization.
C. They do not appear in organizational charts, but can have a significant influence on how firms operate.
D. They show the lines of responsibility through which a supervisor delegates authority to subordinates.
E. They tie supervisors and subordinates together.


Answer: B. They are relationships between equals in an organization.

Which of the following is true about vertical linkages?

Which of the following is true about vertical linkages?


A. They do not appear in organizational charts, but can have a significant influence on how firms operate.
B. They are often called committees, task forces, or teams.
C. They are of great importance when close coordination is needed across different segments of an organization.
D. They refer to unofficial relationships such as personal friendships, rivalries, and politics.
E. They show the lines of responsibility through which a supervisor delegates authority to subordinates.


Answer: E. They show the lines of responsibility through which a supervisor delegates authority to subordinates.

______ is most frequently used in manufacturing industries and involves granting a foreign company the right to create a company's product within a foreign country in exchange for a fee.

______ is most frequently used in manufacturing industries and involves granting a foreign company the right to create a company's product within a foreign country in exchange for a fee.


A. Joint venture
B. Licensing
C. Exporting
D. Franchising
E. Strategic alliance


Answer: B. Licensing

Two major telecommunication corporations in the United States, Stintson Pvt. Ltd. and Gavin Incorporation worked together to create a new entity with the name of Stintson-Gavin Incorporation. Both the firms believed that this would enable them to increase their business performance. Stintson-Gavin Incorporation started to operate by offering telecommunication and broadband services. Stintson-Gavin Incorporation is an example of a _____.

Two major telecommunication corporations in the United States, Stintson Pvt. Ltd. and Gavin Incorporation worked together to create a new entity with the name of Stintson-Gavin Incorporation. Both the firms believed that this would enable them to increase their business performance. Stintson-Gavin Incorporation started to operate by offering telecommunication and broadband services. Stintson-Gavin Incorporation is an example of a _____.


A. strategic alliance
B. sole proprietorship
C. wholly owned subsidiary
D. partly owned subsidiary
E. joint venture


Answer: E. joint venture

Which of the following is true of franchising?

Which of the following is true of franchising?


A. Franchising requires heavy financial investment by the franchisor.
B. Local franchisees must pay the vast majority of the expenses associated with getting their businesses up and running.
C. The decision to franchise means that a firm will get to enjoy a large portion of the profits made under its brand name.
D. Franchises are only successful if franchisees are provided with a complex business model.
E. Franchising is most frequently used in manufacturing industries.


Answer: B. Local franchisees must pay the vast majority of the expenses associated with getting their businesses up and running.

Sandré and Moreau Pvt. Ltd. is a firm based in France that manufactures and sells dark chocolate bars and other chocolates under the brand name, ChocoNoir. The firm sold the right to Duvall & Reese Ltd., based in the United States, to use its brand name, products, and processes to manufacture and sell dark chocolate bars in return for a payment and a percentage of the revenues that would be gained by Duvall & Reese Ltd. Which of the following was being implemented by Sandré and Moreau Pvt. Ltd.?

Sandré and Moreau Pvt. Ltd. is a firm based in France that manufactures and sells dark chocolate bars and other chocolates under the brand name, ChocoNoir. The firm sold the right to Duvall & Reese Ltd., based in the United States, to use its brand name, products, and processes to manufacture and sell dark chocolate bars in return for a payment and a percentage of the revenues that would be gained by Duvall & Reese Ltd. Which of the following was being implemented by Sandré and Moreau Pvt. Ltd.?


A. Licensing
B. Exporting
C. Franchising
D. Joint venture
E. Strategic alliance


Answer: C. Franchising

In a ________, two or more companies work together cooperatively, but no new organization is formed. The partnering companies share decision-making authority, control of the operation, and any profits that the relationship creates.

In a ________, two or more companies work together cooperatively, but no new organization is formed. The partnering companies share decision-making authority, control of the operation, and any profits that the relationship creates.


A. Exporting agreement
B. Joint venture
C. Franchising arrangement
D. Licensing agreement
E. Strategic alliance


Answer: E. Strategic alliance

According to Kim and Mauborgne's text, Blue Ocean Strategy, most companies enter established, often highly competitive markets, and fight to outperform rivals through traditional strategies of differentiation or cost leadership, which is known as a ______ approach.

According to Kim and Mauborgne's text, Blue Ocean Strategy, most companies enter established, often highly competitive markets, and fight to outperform rivals through traditional strategies of differentiation or cost leadership, which is known as a ______ approach.


A. "black sea"
B. "red sea"
C. "no ocean"
D. "red ocean"
E. "black ocean"


Answer: D. "red ocean"

Which one of these is NOT an international strategy?

Which one of these is NOT an international strategy?


A. multi-domestic
B. global
C. transnational
D. All of the above are international strategies
E. intercontinental


Answer: E. intercontinental

A firm using a transnational strategy:

A firm using a transnational strategy:


A. tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.
B. prioritizes the need to gain economies of scale.
C. offers the same products across all markets.
D. places heavy emphasis on being responsive to local requirements within each of its markets.
E. reduces diversification of business risk by locating all its business operations in the home country.


Answer: A. tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.

Ark Inc. is an international watch manufacturer that sells a variety of watches. The management of Ark Inc. prioritizes efficiency over responsiveness to local requirements. They management aims to gain economies of scale, by offering the same product in all their markets. This indicates that Arc Inc. is using a _____ strategy.

Ark Inc. is an international watch manufacturer that sells a variety of watches. The management of Ark Inc. prioritizes efficiency over responsiveness to local requirements. They management aims to gain economies of scale, by offering the same product in all their markets. This indicates that Arc Inc. is using a _____ strategy.


A. multidomestic
B. transnational
C. decentralization
D. disintermediation
E. global


Answer: E. global

Which of the following is true of a firm using a global strategy to build efficiency across different nations?

Which of the following is true of a firm using a global strategy to build efficiency across different nations?


A. It tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.
B. It involves reducing diversification of business risk by locating all the business operations in the home country.
C. It stresses the need to gain economies of scale by offering the same products in each market.
D. It sacrifices efficiency.
E. It places heavy emphasis on being responsive to local requirements within each of its markets.


Answer: C. It stresses the need to gain economies of scale by offering the same products in each market.

Which of the following is true of a firm using a global strategy to build efficiency across different nations?

Which of the following is true of a firm using a global strategy to build efficiency across different nations?


A. It places heavy emphasis on being responsive to local requirements within each of its markets.
B. It sacrifices efficiency.
C. It stresses the need to gain economies of scale by offering the same products in each market.
D. It tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.
E. It involves reducing diversification of business risk by locating all the business operations in the home country.


Answer: C. It stresses the need to gain economies of scale by offering the same products in each market.

Which of the following is true about a multi domestic strategy?

Which of the following is true about a multi domestic strategy?


A. It places heavy emphasis on being responsive to local requirements within each of its markets.
B. It involves reducing diversification of business risk by locating all the business operations in the home country.
C. It places heavy emphasis on being efficient.
D. It stresses the need to gain economies of scale by offering essentially the same products or services in each market.
E. It tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.


Answer: A. It places heavy emphasis on being responsive to local requirements within each of its markets.

Which one of these is NOT a factor within the Diamond Model?

Which one of these is NOT a factor within the Diamond Model?


A. awareness, motivation, and creativity
their home country's demand conditions
B. related and supporting industries within their home country
C. strategy, structure, and rivalry among their domestic competitors
D. availability to create strategic joint venture alliances


Answer: D. availability to create strategic joint venture alliances

SK Manufacturing Group is a firm based in California that produces rail locomotives. The firm does not need to depend on imported bearings, axle cars, and streamliners as there are many firms in the U.S. that manufacture these equipments. The easy availability of components has fuelled the firm's growth. According to the diamond model, SK Manufacturing Group benefits from:

SK Manufacturing Group is a firm based in California that produces rail locomotives. The firm does not need to depend on imported bearings, axle cars, and streamliners as there are many firms in the U.S. that manufacture these equipments. The easy availability of components has fuelled the firm's growth. According to the diamond model, SK Manufacturing Group benefits from:


A. firm rivalries.
B. demand conditions.
C. related and supporting industries.
D. firm strategies.
E. firm structures.


Answer: C. related and supporting industries.

In The World Is Flat: A Brief History of the 21st Century, Friedman argued that technological advances and increased interconnections are leveling the competitive playing field between developed and emerging countries. This means that companies exist in a "___ world" because economies across the globe are converging on a single integrated global system.

In The World Is Flat: A Brief History of the 21st Century, Friedman argued that technological advances and increased interconnections are leveling the competitive playing field between developed and emerging countries. This means that companies exist in a "___ world" because economies across the globe are converging on a single integrated global system.


A. dynamic
B. flat
C. inclusive
D. social media
E. aggressive


Answer: B. Flat

Meadow Range Pvt. Ltd. is a firm based in France that has one of the finest wine breweries in the country. Due to the availability of many grape varieties, and suitable climatic conditions for growing grapes in France, Meadow Range has an advantage when competing in the international market. According to the diamond model, Meadow Range benefits from:

Meadow Range Pvt. Ltd. is a firm based in France that has one of the finest wine breweries in the country. Due to the availability of many grape varieties, and suitable climatic conditions for growing grapes in France, Meadow Range has an advantage when competing in the international market. According to the diamond model, Meadow Range benefits from:


A. demand conditions.
B. financial conditions.
C. factor conditions.
D. firm strategies.
E. firm structures.


Answer: C. factor conditions.

Factor conditions differ from demand conditions in that factor conditions refers to:

Factor conditions differ from demand conditions in that factor conditions refers to:


A. the nature of domestic customers.
B. the nature of international customers.
C. the level of competition a firm faces in its home country.
D. the extent to which firms' complementary industries are helpful.
E. the nature of raw materials.


Answer: E. the nature of raw materials.

Sashes Inc. is a firm that provides apparels, footwear, and bags in the U.S, and exports some of its products to England and Canada. The firm conducts extensive research in the U.S. to understand the preferences of customers, such as colors and designs. As a result of American customers' high standards of quality, Sashes Inc. ensures that its products are durable, as well as stylish. This helps it to compete in the international market. According to the diamond model, Sashes Inc. benefits from:

Sashes Inc. is a firm that provides apparels, footwear, and bags in the U.S, and exports some of its products to England and Canada. The firm conducts extensive research in the U.S. to understand the preferences of customers, such as colors and designs. As a result of American customers' high standards of quality, Sashes Inc. ensures that its products are durable, as well as stylish. This helps it to compete in the international market. According to the diamond model, Sashes Inc. benefits from:


A. demand conditions.
B. related and supporting industries.
C. factor conditions.
D. firm strategies.
E. firm structures.


Answer: A. demand conditions.

According to the diamond model of Porter, which of the following refer to demand conditions?

According to the diamond model of Porter, which of the following refer to demand conditions?


A. The nature of raw material and other inputs that firms need in order to create goods and services
B. The extent to which firms' domestic suppliers and other complementary industries are helpful
C. The concept of firm strategy, structure, and rivalry refers to how challenging it is to survive domestic competition
D. The nature of domestic customers
E. The degree of challenge required to survive domestic competition


Answer: D. The nature of domestic customers

Creative Publications Pvt. Ltd., a publishing firm based in Germany had entered into several business deals with a few book stores and book lounges in the United States. However, the substantial difference in the currency exchange rate systems of the two nations resulted in the firm facing severe losses. Which of the following risks was encountered by Creative Publications Pvt. Ltd.?

Creative Publications Pvt. Ltd., a publishing firm based in Germany had entered into several business deals with a few book stores and book lounges in the United States. However, the substantial difference in the currency exchange rate systems of the two nations resulted in the firm facing severe losses. Which of the following risks was encountered by Creative Publications Pvt. Ltd.?


A. Political risk
B. Cultural risk
C. Default risk
D. Economic risk
E. Lifetime risk


Answer: D. Economic risk

Knightly Pvt. Ltd., an eyewear firm based in Texas, has business operations across various countries. When a financial meltdown occurred in Texas and in its surrounding areas, a number of people lost their jobs and were unemployed. However, this major crisis did not affect the operations of Knightly Pvt. Ltd., as it functioned across many nations. This implies that the organization had diversified its _____ by not being completely dependent on its operations in the United States.

Knightly Pvt. Ltd., an eyewear firm based in Texas, has business operations across various countries. When a financial meltdown occurred in Texas and in its surrounding areas, a number of people lost their jobs and were unemployed. However, this major crisis did not affect the operations of Knightly Pvt. Ltd., as it functioned across many nations. This implies that the organization had diversified its _____ by not being completely dependent on its operations in the United States.


A. political risk
B. cultural risk
C. legal risk
D. business risk
E. lifetime risk


Answer: D. Business risk

Axis Technologies, an American firm that manufactures and sells desktop computers, decides to use offshoring to improve its business. To implement this strategy, which of the following is the firm most likely to do?

Axis Technologies, an American firm that manufactures and sells desktop computers, decides to use offshoring to improve its business. To implement this strategy, which of the following is the firm most likely to do?


A. Axis Technologies manufactures and assembles computers in America, and then ships them to other countries.
B. Axis Technologies relocates its business units in China back to America to avail tax benefits.
C. Axis Technologies introduces a new line of products to gain a greater share of its existing market.
D. Axis Technologies employs skilled professionals from foreign nations to encourage diversity in the company.
E. Axis Technologies sets up a call center in India to provide customer service to all its customers.


Answer: E. Axis Technologies sets up a call center in India to provide customer service to all its customers.

Hauer and Ward is an international law firm based in Washington. The firm moves its back-end legal research business unit to India, to take advantage of the lower labor and land costs in India. After a few years, the firm notices that the quality of the legal research work conducted in India is inadequate, and decides to relocate 200 jobs back to Washington. In this example, Hauer and Ward use which of the following processes?

Hauer and Ward is an international law firm based in Washington. The firm moves its back-end legal research business unit to India, to take advantage of the lower labor and land costs in India. After a few years, the firm notices that the quality of the legal research work conducted in India is inadequate, and decides to relocate 200 jobs back to Washington. In this example, Hauer and Ward use which of the following processes?


A. Nearshoring
B. Reshoring
C. Franchising
D. Licensing
E. Importing


Answer: B. Reshoring

Which of the following refers to offshoring?

Which of the following refers to offshoring?


A. Seizure of a firm's assets in a country by the national government
B. The potential for a company's operations in a country to struggle due to differences in language and customer preferences
C. Relocating a business activity to another country
D. A phenomenon when jobs that are sent overseas return home
E. Creating goods within a firm's home country and then shipping them to another country


Answer: C. Relocating a business activity to another country

Which of the following statements holds true for overseas expansion in business?

Which of the following statements holds true for overseas expansion in business?


A. It leads to economies of scale that may increase the production costs of a firm.
B. It gives a firm a stronger leverage when negotiating prices with its suppliers.
C. It restricts a firm from diversifying its business risks.
D. It restricts a firm from accessing new customers.
E. It leads businesses to purchase supplies in lesser numbers.


Answer: B. It gives a firm a stronger leverage when negotiating prices with its suppliers.

Consumers usually perceive higher-priced products as ________.

Consumers usually perceive higher-priced products as ________.



A) out of reach for most people
B) having high quality
C) having target-cost prices
D) having cost-based prices
E) being in the introductory stage of the product life cycle


Answer: B

If Canon Camera Company follows a high-price, high-margin strategy, what will competitors such as Nikon, Minolta, and Pentax most likely do?

If Canon Camera Company follows a high-price, high-margin strategy, what will competitors such as Nikon, Minolta, and Pentax most likely do?


A) They will go out of business.
B) They will want to compete against Canon.
C) They will advertise less.
D) They will bundle their products.
E) none of the above



Answer: B

In Vin del Mar, Chile, there are a dozen stores specializing in selling the same quality of seafood products on one street. An individual store dare not charge more than the going price without the risk of losing business to the other stores that are selling the fish at a common price. This is an example of what type of market?

In Vin del Mar, Chile, there are a dozen stores specializing in selling the same quality of seafood products on one street. An individual store dare not charge more than the going price without the risk of losing business to the other stores that are selling the fish at a common price. This is an example of what type of market?



A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) pure monopoly
E) socialist


Answer: A

By pledging to be a leader in providing clean, renewable energy sources and developing products and services that help consumers protect the environment, Green Mountain Power competes successfully against "cheaper" brands that focus on more price-sensitive consumers. Green Mountain Power has the firm belief that even kilowatt-hours can be ________.

By pledging to be a leader in providing clean, renewable energy sources and developing products and services that help consumers protect the environment, Green Mountain Power competes successfully against "cheaper" brands that focus on more price-sensitive consumers. Green Mountain Power has the firm belief that even kilowatt-hours can be ________.



A) cost-plus priced
B) represented by a demand curve
C) differentiated
D) value-based priced
E) none of the above


Answer: C

PoolPak produces climate-control systems for large swimming pools. The company's customers are more concerned about service support for maintaining a system than its initial price. PoolPak may use this knowledge to become more competitive through ________.

PoolPak produces climate-control systems for large swimming pools. The company's customers are more concerned about service support for maintaining a system than its initial price. PoolPak may use this knowledge to become more competitive through ________.



A) target costing
B) value pricing
C) cost-plus pricing
D) a nonprice position
E) skimming pricing


Answer: D

P&G surveyed the market and identified an unserved segment of the electric toothbrush market. Using these results, P&G created Spinbrush. The unorthodox order of this marketing mix decision is an example of ________.

P&G surveyed the market and identified an unserved segment of the electric toothbrush market. Using these results, P&G created Spinbrush. The unorthodox order of this marketing mix decision is an example of ________.



A) competition-based pricing
B) cost-plus pricing
C) target costing
D) value-based pricing
E) penetration pricing


Answer: C

A manufacturer is trying to determine its break-even volume. With fixed costs of $100,000, a variable cost of $10, and expected sales of 50,000 units, what should the manufacturer's unit cost be to break even?

A manufacturer is trying to determine its break-even volume. With fixed costs of $100,000, a variable cost of $10, and expected sales of 50,000 units, what should the manufacturer's unit cost be to break even?



A) $10
B) $12
C) $16
D) $20
E) none of the above



Answer: B

Ecstasy Pharmaceuticals faces fixed costs with its new drug of $1,000,000. The company sells the drug in bottles of 50 pills for $10.00. It estimates that it must sell 200,000 bottles to break even. What is the total cost to produce a bottle of 50 pills?

Ecstasy Pharmaceuticals faces fixed costs with its new drug of $1,000,000. The company sells the drug in bottles of 50 pills for $10.00. It estimates that it must sell 200,000 bottles to break even. What is the total cost to produce a bottle of 50 pills?



A) $2.50
B) $5.00
C) $6.00
D) $7.50
E) not enough information to calculate


Answer: B

A company faces fixed costs of $100,000 and variable costs of $8.00/unit. It plans to directly sell its product to the market for $12.00. How many units must it produce and sell to break even?

A company faces fixed costs of $100,000 and variable costs of $8.00/unit. It plans to directly sell its product to the market for $12.00. How many units must it produce and sell to break even?



A) 20,000
B) 25,000
C) 40,000
D) 50,000
E) not enough information to calculate


Answer: B

The long-run average cost curve (LRAC) helps the producer understand which of the following?

The long-run average cost curve (LRAC) helps the producer understand which of the following?



A) how large a business should be in order to be most efficient
B) how to deal with competitors' prices
C) how to deal with external factors
D) how to price under conditions of inelastic demand
E) how to price under conditions of elastic demand


Answer: A

Xbox 360 decides to add a free subscription to XBOX magazine with every game bought in an effort to differentiate its offering from PS3 games. This is an example of ________.

Xbox 360 decides to add a free subscription to XBOX magazine with every game bought in an effort to differentiate its offering from PS3 games. This is an example of ________.



A) good-value pricing
B) add-on pricing
C) product-support pricing
D) value-added pricing
E) cost-based pricing


Answer: D

Trader Joe's offers an assortment of exclusive gourmet products at impossibly low prices. These prices are not limited-time offers or special discounts. Instead, they reflect Trader Joe's ________ strategy.

Trader Joe's offers an assortment of exclusive gourmet products at impossibly low prices. These prices are not limited-time offers or special discounts. Instead, they reflect Trader Joe's ________ strategy.



A) everyday low pricing
B) cost-plus pricing
C) dynamic pricing
D) value-based pricing
E) cost-based pricing


Answer: A

Amos Zook, an Amish farmer, sells organically grown produce. Often he will trade some of his produce for dairy products produced by other Amish farmers. The sum of the values exchanged for the produce is the ________.

Amos Zook, an Amish farmer, sells organically grown produce. Often he will trade some of his produce for dairy products produced by other Amish farmers. The sum of the values exchanged for the produce is the ________.



A) price
B) cost-plus price
C) dynamic price
D) common value price
E) penetration price


Answer: A

Dips in the economy and the instant price comparisons made possible by the Internet have both contributed to ________.

Dips in the economy and the instant price comparisons made possible by the Internet have both contributed to ________.



A) decreased consumer price sensitivity
B) increased consumer price sensitivity
C) a less direct relationship between supply and demand
D) a more direct relationship between supply and demand
E) decreased brand loyalty


Answer: B

Buyers are less price sensitive in all of the following situations EXCEPT ________.

Buyers are less price sensitive in all of the following situations EXCEPT ________.



A) when the product they are buying is unique
B) when the product they are buying is high in quality
C) when substitute products are hard to find
D) when the total expenditure for a product is high relative to their income
E) when the product is exclusive


Answer: D

Price elasticity of demand is ________ divided by ________.

Price elasticity of demand is ________ divided by ________.



A) percent change in quantity demanded; percent change in price
B) demand; price
C) percent change in price; percent change in quantity demanded
D) the going price; the asking price
E) retail value; list price


Answer: A

Which of the following is true about the demand curve?

Which of the following is true about the demand curve?



A) It is used to illustrate the effect of price on the quantity supplied.
B) It is always graphically depicted by a straight line.
C) It shows the quantity of product customers will buy in a market during a period of time even if other factors change.
D) It usually slopes upward and to the right.
E) It shows the relationship between product demand and product price.

Answer: E

Under ________, the market consists of one seller.

Under ________, the market consists of one seller.



A) a pure monopoly
B) monopolistic competition
C) oligopolistic competition
D) pure competition
E) capitalism


Answer: A

Firms are less affected by competitors' pricing strategies under ________ than under ________.

Firms are less affected by competitors' pricing strategies under ________ than under ________.



A) monopolistic competition; oligopolistic competition
B) pure competition; monopolistic competition
C) oligopolistic competition; pure competition
D) oligopolistic competition; monopolistic competition
E) pure competition; a pure monopoly


Answer: A

With target costing, marketers will first ________ and then ________.

With target costing, marketers will first ________ and then ________.



A) build the marketing mix; identify the target market
B) identify the marketing mix; determine product cost
C) design the product; determine its cost
D) use skimming pricing; penetrating pricing
E) determine a selling price; target costs to ensure that the price is met


Answer: E

Which of the following statements about break-even analysis is true?

Which of the following statements about break-even analysis is true?



A) It is used to determine how much production experience a company must have to achieve desired efficiencies.
B) It is a technique used to calculate fixed costs.
C) It determines the amount of retained earnings a company will have during an accounting period.
D) It is a technique marketers use to examine the relationship between supply and demand.
E) It is calculated using variable costs, the unit price, and fixed costs


Answer: E

The break-even volume is the point at which ________.

The break-even volume is the point at which ________.




A) the total revenue and total costs lines intersect
B) demand equals supply
C) the production of one more unit will not increase profit
D) the company can pay all of its long-term debt
E) a firm's profit goal is reached


Answer: A

Many people feel that ________ pricing is fairer to both buyers and sellers. Sellers earn a fair return on their investment but do not take advantage of buyers when buyers' demand becomes great.

Many people feel that ________ pricing is fairer to both buyers and sellers. Sellers earn a fair return on their investment but do not take advantage of buyers when buyers' demand becomes great.



A) skimming
B) markup
C) elasticity
D) inelasticity
E) penetration


Answer: B

Which of the following is a reason why markup pricing is NOT practical?

Which of the following is a reason why markup pricing is NOT practical?



A) Sellers earn a fair return on their investment.
B) By tying the price to cost, sellers simplify pricing.
C) When all firms in the industry use this pricing method, prices tend to be similar.
D) This method ignores demand.
E) With a standard markup, consumers know when they are being overcharged


Answer: D

The simplest pricing method is ________.

The simplest pricing method is ________.



A) value-based pricing
B) sealed-bid pricing
C) markup pricing
D) value-added pricing
E) target profit pricing


Answer: C

The company designs what it considers to be a good product, totals the expenses of making the product, and sets a price that adds a standard markup to the cost of the product. This approach to pricing is called ________.

The company designs what it considers to be a good product, totals the expenses of making the product, and sets a price that adds a standard markup to the cost of the product. This approach to pricing is called ________.


A) value-based pricing
B) fixed cost pricing
C) cost-plus pricing
D) variable pricing
E) skimming pricing


Answer: C

Which of the following is a risk a company takes when building a strategy around the experience curve?

Which of the following is a risk a company takes when building a strategy around the experience curve?



A) Competitors will likely not be able to meet the company's price cuts.
B) Existing technologies are likely to become more expensive as the company expands.
C) The method does not take competitors' prices into account.
D) The method may cause consumers to become frustrated with changing prices.
E) Aggressive pricing may give the product a cheap image, causing customers to lose interest.


Answer: E

The experience curve reveals that ________.

The experience curve reveals that ________.



A) repetition in production lowers costs
B) repetition in production enhances efficiency
C) the average cost drops with accumulated production experience
D) A, B, and C
E) none of the above


Answer: D

With a higher volume of product, most companies can expect to ________.

With a higher volume of product, most companies can expect to ________.



A) gain economies of scale
B) become less efficient
C) see fixed costs increase
D) have a straight, horizontal learning curve
E) find competitors using the experience curve strategically


Answer: A

The LRAC is most closely related to which of the following?

The LRAC is most closely related to which of the following?



A) long-term marketing plans
B) long-term business plans
C) the cost of producing a greater quantity of units
D) the cost of promoting a greater quantity of units
E) the legal responsibility of a company


Answer: C

Ryanair offers free flights to a quarter of its customers and rock-bottom prices to many of its other customers. Ryanair then charges for all extra services, such as baggage handling and in-flight refreshments. Which of the following best describes Ryanair's pricing method?

Ryanair offers free flights to a quarter of its customers and rock-bottom prices to many of its other customers. Ryanair then charges for all extra services, such as baggage handling and in-flight refreshments. Which of the following best describes Ryanair's pricing method?



A) value-added pricing
B) good-value pricing
C) cost-plus pricing
D) high-low pricing
E) image pricing


Answer: B
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