Business Marketing Management B2B, 11th Edition Michael D. Hutt – Test Bank

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Business Marketing Management B2B, 11th Edition Michael D. Hutt – Test Bank

Chapter 6—Business Marketing Strategies for Global Markets

 

MULTIPLE CHOICE

 

  1. An industrial firm’s first encounter with an overseas market usually involves _____ because it involves the least commitment and risk.
a. contracting
b. licensing
c. exporting
d. franchising
e. a turnkey operation

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Exporting is a viable international entry strategy when the firm:
a. wishes to maintain direct control of the marketing program.
b. lacks the resources to make a significant commitment to the market.
c. wants to form long-term relationships with international customers.
d. all of the above
e. none of the above

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Included among the contractual modes of international market participation are:
a. licensing.
b. management contracts.
c. exporting.
d. all of the above
e. both (a) and (b)

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. As a mode of international market entry, licensing agreements pose the following limitation(s):
a. a firm has less control over a license than over its own exporting or manufacturing abroad.
b. licensing agreements include a time limit and additional extensions (beyond the first) that may not be readily permitted by a number of foreign governments.
c. the licensee may become an important competitor in the future.
d. all of the above
e. (b) and (c) only

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. _____ involves sourcing a product from a producer located in a foreign country for sale there or in other countries.
a. Contract manufacturing
b. Exporting
c. Franchising
d. A joint venture
e. A turnkey operation

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. This mode of international market participation permits a client to require a complete operational system, together with skills sufficient to allow the unassisted maintenance and operation of the system. Once the package agreement is on line, the system is owned, controlled, and operated by the client. This provides an apt description of:
a. licensing.
b. a turnkey operation.
c. a joint venture.
d. contract manufacturing.
e. importing.

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. In pursuing international entry options, joint ventures often constitute a feasible option because:
a. they provide the only path of entry into many foreign markets.
b. they may provide for better relationships with local organizations (for example, local authorities) and with customers.
c. they may open up market opportunities that neither party to the venture could pursue alone.
d. all of the above
e. (a) and (b) only

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Consider this position: If you run a pharmaceutical company with a good product to distribute in Japan but have no sales force to do it, find someone in Japan who also has a good product but no sales force in your country. Why not join forces to maximize contribution to each other’s fixed costs? This describes the logic of:
a. a joint venture.
b. exporting.
c. franchising.
d. importing.
e. global marketing.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Multinational firms have traditionally managed operations outside their home country with an approach that permits individual subsidiaries to compete independently in different country-markets. Here each subsidiary resembles a strategic business unit that is expected to contribute earnings and growth to the organization. This describes:
a. a multidomestic strategy.
b. a differentiated strategy.
c. a global strategy.
d. an export-based strategy.
e. a coordinated strategy.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. When a firm seeks competitive advantage with strategic choices that are highly integrated across countries (for example, a standardized core product that requires minimal local adaptation across country-markets), this describes:
a. a multidomestic strategy.
b. a differentiated strategy.
c. a global strategy.
d. an export-based strategy.
e. a coordinated strategy.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. _____ is one in which a firm’s competitive position in one country is significantly influenced by its position in other countries.
a. A multidomestic industry
b. A differentiated industry
c. A global industry
d. An export-based industry
e. A coordinated industry

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. In _____, firms pursue separate strategies in each of their foreign markets-competition in each country is essentially independent of competition in other countries.
a. a multidomestic industry
b. a differentiated industry
c. a global industry
d. an export-based industry
e. a coordinated industry

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The type of international strategy that concentrates as many activities as possible in one country, serves the world market from the home base, and closely coordinates those activities that must be performed near the buyer (for example, service) is referred to as:
a. a country-centered strategy.
b. an export-based strategy.
c. a purest global strategy.
d. a segmented international strategy.
e. a coordinated international strategy.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Concerning international strategy, a firm that concentrates manufacturing and support activities in one country but gives local marketing subsidiaries significant latitude in each region of the world is following which type of international strategy?
a. a country-centered strategy
b. an export-based strategy
c. a purest global strategy
d. a segmented international strategy
e. a coordinated international strategy

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The choice of a particular international market entry mode depends on a range of factors including the size of the market and its growth potential. Markets of limited size surrounded by trade barriers may be supplied most cost effectively via:
a. licensing or contract manufacturing.
b. a local production and marketing subsidiary.
c. exporting.
d. selective distribution.
e. none of the above

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. In entering high-risk country-markets, firms can reduce their risk exposure by adopting low-commitment modes of entry such as:
a. licensing.
b. wholly-owned subsidiaries.
c. contract manufacturing.
d. all of the above
e. (a) and (c) only

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Which of the following modes of international market entry provides for greater potential returns and a greater degree of control over operations?
a. licensing
b. wholly-owned subsidiaries
c. contract manufacturing
d. exporting
e. franchising

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. As an entry strategy, licensing requires:
a. capital investment.
b. marketing strength in foreign markets.
c. a company to have less control over a licensee than over its own exporting or manufacturing abroad.
d. all of the above.
e. (b) and (c) only.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Potential partners for a global alliance are evaluated based on:
a. resources.
b. relationships.
c. culture.
d. all of the above.
e. (a) and (b) only.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. An advantages of joint ventures is:
a. they include the only path of entry into many foreign markets.
b. they open up market opportunities that neither partner to the venture could purse alone.
c. they transfer knowledge to the partner.
d. all of the above.
e. (a) and (b) only.

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The home base for a business is the location where:
a. strategy is set.
b. core product and process technology is created and maintained.
c. a critical mass of sophisticated production and service activities reside.
d. all of the above.
e. (a) and (c) only.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Successful global companies achieve unified action by:
a. establishing a strategies that are independent across countries.
b. developing accounting systems that are country specific.
c. encouraging personal relationships and the transfer of learning among subsidiary managers across locations.
d. all of the above.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Research suggest that over _____ % of joint ventures are disbanded or fall short of expectations.
a. 10
b. 20
c. 30
d. 40
e. 50

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. In high-risk markets, firms can reduce their equity exposure by adopting low commitment modes such as:
a. licensing.
b. contract manufacturing.
c. joint ventures with a majority share.
d. all of the above.
e. (a) and (b) only.

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Rather than modifying the firm’s product offerings from country to country, ____ strategy requires a patient, long-term campaign to enter every significant foreign market while maintaining and leveraging the company’s unique strategic position.
a. a global
b. an exporting
c. a joint venture
d. a licensing

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Firms that quickly and intelligently seize global opportunities can secure which of the following forms of competitive advantage?
a. Cost advantage.
b. Market access advantage.
c. Capabilities advantage.
d. All of the above.
e. (a) and (b) only.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. A firm that includes rapidly developing economies (RDEs) in their global cost structures can realize savings of _____ in the landed costs of their products.
a. 0 to 20 percent
b. 20 to 40 percent
c. 40 to 60 percent
d. 60 to 80 percent

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The hidden costs in operating in rapidly developing economies include which of the following?
a. One-time setup costs.
b. Risk management costs.
c. Exit costs.
d. All of the above.
e. (a) and (b) only.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Companies can use capabilities advantages to:
a. improve research and development.
b. address unmet customer needs.
c. further standardize products in the home country.
d. All of the above.
e. (a) and (b) only.

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The decision to outsource business operations to rapidly developing economies is affected by which of the following sets of factors?
a. Economic.
b. Competitive.
c. Environmental.
d. All of the above.
e. (a) and (b) only.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Factors that favor relocation of products or services to rapidly developing economies include:
a. High labor content.
b. Low growth potential
c. Standardized manufacturing or service-delivery processes.
d. All of the above.
e. (a) and (c) only.

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Factors that favor keeping products or services at home instead of relocating to rapidly developing economies include:
a. Protection of intellectual property is critical.
b. High sensitivity to production location.
c. Very high technology content.
d. All of the above.
e. (a) and (c) only.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Which of the following issues pose challenges to business marketers considering strategic alliance as a market entry mode?
a. Problems with maintaining alliances over time.
b. Difficult to implement alliances on a global scale.
c. Problems establishing coordination and trust.
d. All of the above.
e. (a) and (c) only.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Which of the following issues pose problems to firms trying to manage joint venture relationships?
a. Disagreements over profit-sharing.
b. Opening up of new market opportunities.
c. Problems responding to changing market needs.
d. All of the above.
e. (b) and (c) only.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The choice of a foreign market entry mode depends upon:
a. the size of the market.
b. the market’s growth potential.
c. Both (a) and (b).
d. Neither (a) or (b).

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. _____ refers to how similar activities performed in various countries are couple with each other.
a. Coordination
b. Configuration
c. The home base
d. The value network

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The BCG Global Advantage Diamond portrays the key elements that must be developed and integrated to secure a strong position in global markets. This framework includes
  2. A market access element
  3. A market relevancy element
  4. A resource accuracy element
  5. All of the above
  6. None of the above

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. When moving to a RDE, suppliers must adjust their operating models to:
  2. Maintain quality levels
  3. Counter local suppliers offerings
  4. To fully capture the cost advantages.
  5. Consider the increased transportation costs involved
  6. Consider market research data on procurement preferences

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

 

TRUE/FALSE

 

  1. Some research suggests that, compared to consumer goods, industrial and high-technology products may be more appropriate for global brand strategies.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. An industrial firm’s first encounter with an overseas market usually involves the formation of a wholly-owned subsidiary in another country.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Exporting involves giving up direct control of the marketing program, which often makes it difficult to coordinate activities.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. As an entry strategy, licensing requires a major capital investment in a foreign market.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Problems often plague joint ventures and, as a result, many of them fall short of expectations or are disbanded.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. A multidomestic strategy seeks competitive advantage with strategic choices that are highly integrated across countries.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Upstream activities in the value chain involve those primary activities that are closely tied to where the buyer is located.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. In multidomestic industries, a firm’s competitive position in one country is significantly influenced by its position in other countries.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The purest global strategy concentrates as many activities as possible in one country, serves the world market from this home base, and closely coordinates those activities that must be performed near the buyer.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. In high-risk foreign markets, firms can reduce their equity exposure by adopting low-commitment modes of entry such as licensing or contract manufacturing.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Markets of limited size surrounded by trade barriers may be supplied most cost effectively by using the exporting mode of entry.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The home base for a business is the location where strategy is set and a critical mass of sophisticated production and service activities reside.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. A single-country may not be large enough for a firm to realize economies of scale.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The choice of a particular entry mode will also depend on the size of the market and its growth potential.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Coordination centers on where each activity is performed, including the number of locations.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The need for a global strategy is determined by the nature of international competition in a particular industry.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. For truly global industries, a firm’s position in one country significantly affects its position elsewhere, so a multi-domestic strategy is required.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The two primary sources of cost advantages driving firm to implement operations in rapidly developing economies are lower operating costs and lower capital investment requirements.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. A factory in a rapidly developing economy can be built with 70% of the investment level needed in a highly developed economy.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. A firm whose products are technically complex and are protected by U.S. patents is a good candidate for relocating to a rapidly developing economy.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Arguments over profit-sharing and management styles are common problems experienced in exporting.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Configuration centers on where each activity is performed, including the number of locations.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Multidomestic industries do not need a global strategy because the focus should be on developing a series of distinct domestic strategies.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

COMPLETION

 

  1. The primary reason that companies are moving to sourcing from Rapidly Developing Economies is due to very large and sustainable ____________________ from lower operating costs and lower capital investment requirements.

 

ANS:  cost advantages

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. The realized net savings after logistics costs, other management costs, and import duties involved in moving the product from the RDE to the market destination is referred to as ____________________costs.

 

ANS:  landed

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. In China’s steel industry, their main source of competitive advantage is due not to cheap labor, but rather massive government energy ____________________.

 

ANS:  subsidies

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. An industrial firm’s first foray into an overseas market usually involves____________________because it requires the least commitment and risk.

 

ANS:  exporting

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. ____________________involves sourcing a product from a producer located in a foreign country for sale there or in other countries.

 

ANS:  Contract manufacturing

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. ____________________offer a number of benefits, such as access to markets or technology, economies of scale in manufacturing and marketing, and the sharing of risk among partners.

 

ANS:  Strategic alliances

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Multinational firms have traditionally managed operations outside their home country with ____________________ that permit individual subsidiaries to compete independently in their home country markets.

 

ANS:  Multidomestic strategies

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. A global industry is one in which a firm’s ____________________ in one country is significantly influenced by its position in other countries.

 

ANS:  competitive position

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

  1. Additional insights into international strategy can be gained by examining two dimensions of competition in the global market:____________________and____________________.

 

ANS:

configuration, coordination

coordination, configuration

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Managing strategy & innovation

 

ESSAY

 

  1. Some experts emphasize that since customer needs are becoming increasingly homogeneous worldwide, the opportunity exists to sell the same type of product across countries and to use essentially the same marketing strategy around the globe.  If customers respond favorably to a strategy in St. Louis, will the same strategy work in London or Tokyo?  While a standardized approach might work for Coke or Levi’s, will it work for business marketers like Dow Chemical or Hewlett-Packard?  Explain.

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Strategic & systems skills

 

  1. To diagnose the sources of competitive advantage, domestic or international, Michael Porter divides the chain of activities performed by a firm into distinct groups.  Describe Porter’s value chain concept and explore its relevance to international strategy.

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Strategic & systems skills

 

  1. Joint ventures assume a very prominent role in the global strategy of many business marketing firms like Dow Chemical and Xerox.  While offering significant benefits, joint ventures often fall short of expectations or dissolve.  Why?

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Strategic & systems skills

 

  1. Rather than modifying the firm’s product and service offerings from country to country, a global strategy requires a patient, long-term campaign to enter every significant foreign market while maintaining and leveraging the company’s unique strategic positioning. Agree or disagree? Support your position.

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Strategic & systems skills

 

  1. While the location of the corporate headquarters is less important and may reflect historical factors, a firm must develop a clear home base for competing in each of its strategically distinct businesses. What role does a home base assume in forming a global strategy and what factors should be considered in choosing a location? Under what conditions might a firm create a home base for a different product line in another country?

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Strategic & systems skills

 

  1. Rapidly developing economies (RDEs) are having a significant impact on the global economy, both as attractive new markets but also as new competitors for firms in highly developed economies.  Explain the three forms of competitive advantage that firms can achieve by moving operations to and marketing in RDEs.  What products or services make the most sense to relocate to RDEs?

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Strategic & systems skills

 

  1. Options for entry into foreign markets range from exporting to global strategies.  Explain how commitment, complexity, risk, and control changes as firms move across the spectrum of involvement in international marketing.  What factors should firms consider when choosing entry modes?

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model International perspective | R&D Strategic & systems skills

Chapter 7—Managing Products for Business Markets

 

MULTIPLE CHOICE

 

  1. Industrial product lines that are created to meet the needs of one or a small group of customers are defined as:
a. custom-built items.
b. catalog items.
c. proprietary items.
d. custom-designed items.
e. component items.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Industrial product lines that are offered only in certain configurations and are produced in anticipation of orders are called:
a. custom-designed items.
b. services.
c. catalog items.
d. custom-built items.
e. component items.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. When the buyer is purchasing a company’s capability in a particular area, such as maintenance or machine repair, the customer is buying:
a. a catalog item.
b. an industrial service.
c. a custom-designed item.
d. a generic product class.
e. a specialty item.

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. A lathe manufacturer that offers a line of products in different sizes, with a range of options (such as different motor sizes) and accessories for different applications is a producer of:
a. custom-designed items.
b. services.
c. catalog items.
d. custom-built items.
e. proprietary items.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. _____ represents the place that a product occupies in a particular market; it is found by measuring organizational buyers’ perceptions and preferences for a product in relation to its competitors.
a. Product positioning
b. Product anchor
c. Product determinacy
d. Product segment
e. Product attribute

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Which of the following dimensions of a product market definition is(are) relevant?
a. the alternative technologies available to satisfy a particular need (technology dimension)
b. the sequence of stages along which competitors serving the market can operate (value-added system dimension)
c. the customer groups that have needs that must be served (customer segment dimension)
d. all of the above
e. (a) and (c) only

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. All of the following are dimensions relevant to the definition of a product-market except:
a. customer function.
b. technological.
c. customer segment.
d. physical distribution system.
e. value-added system.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Because organizational buyers perceive products as bundles of attributes, the product strategist should examine the attributes that assume a central role in buying decisions. Attributes that are both important and differentiating are called:
a. primary attributes.
b. star attributes.
c. determinant attributes.
d. quality attributes.
e. dominant attributes.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. St. Louis Capital Equipment Company found that organizational buyers view reliability as being important in the purchase of a machine tool. In turn, research indicates that a new model recently introduced by the firm is viewed by organizational buyers as being superior to competing brands on the reliability dimension. Thus, reliability would be classified as a _____ attribute.
a. primary
b. star
c. dominant
d. determinant
e. focal

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. If organizational buyers view a particular attribute as being neither important nor differentiating, an appropriate generic strategy for a product manager to follow would be to:
a. increase the importance of the attribute to customers.
b. increase the difference between the competition and the firm’s brand.
c. convert this determinant attribute into a non-determinant one.
d. all of the above
e. (a) and (b)

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Consider this dilemma: A product manager finds that organizational buyers view a particular product attribute as being both important and differentiating; unfortunately, the firm’s brand is viewed as being inferior to competing brands on this attribute. In this situation, an appropriate generic strategy for the product manager to follow would be to:
a. increase the importance of the attribute to customers.
b. increase the difference between the competition and the firm’s brand.
c. convert this determinant attribute into a non-determinant one.
d. all of the above
e. (a) and (b)

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Some industrial products are created to meet the needs of one or a small group of customers. Boeing, for example, serves a very defined group of customers with its 747 aircraft model. This is an example of:
a. a proprietary product.
b. a specialty product.
c. a custom-built product.
d. a custom-designed product.
e. a catalog product.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. NCR offers a set of basic equipment items to retailers that includes numerous accessories and options. The retailer can begin with a simple cash register or checkstand system and later add inventory control systems for the store and ultimately a computer that ties multiple stores in a chain together. This provides an example of:
a. proprietary products.
b. specialty products.
c. custom-built products.
d. custom-designed products.
e. catalog products.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Among technology adopters, these customers serve as a gatekeeper to the rest of the technology life cycle and their endorsement is needed for an innovation to get a fair hearing in the organization. However, they do not have access to the resources needed to move an organization toward a large-scale commitment to the new technology. This describes:
a. technology enthusiasts.
b. visionaries.
c. skeptics.
d. pragmatists.
e. product champions.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Among technology adopters, these customers have access to organizational resources and can assume an influential role in giving an innovation a boost during the early stages of market development. However, these customers frequently demand modifications to the product that are difficult for the innovator to provide. This describes:
a. technology enthusiasts.
b. visionaries.
c. skeptics.
d. pragmatists.
e. product champions.

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Among technology adopters, these customers make the bulk of technology purchases in organizations and seek products from a market leader with a proven track record of providing useful productivity improvements. This describes:
a. technology enthusiasts.
b. visionaries.
c. skeptics.
d. pragmatists.
e. product champions.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The stage in the adoption life cycle where a product gains acceptance from segments within the mainstream market but has yet to achieve widespread adoption is referred to as:
a. the segmentation phase.
b. the early market phase.
c. the bowling alley phase.
d. the mainstreet phase.
e. the tornado phase.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. During the bowling alley phase of the adoption life cycle, the business marketing strategist should:
a. focus on market segmentation.
b. extend distribution channels.
c. drive to the next lower price point.
d. all of the above.
e. (b) and (c) only.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. During the tornado phase of the adoption life cycle, the business marketing strategist should:
a. focus on market segmentation.
b. extend distribution channels.
c. drive to the next lower price point.
d. all of the above.
e. (b) and (c) only.

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The quality standards set out by the Geneva-based International Standards Organization are referred to as:
a. ISO 9000
b. Six Sigma
c. the Big Q
d. none of the above.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The standard of quality that means a product would have to have a defect level of no more than 3.4 parts per million is called:
a. Six Sigma
b. ISO 9000
c. the Big Q
d. none of the above.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The first stage of the quality movement:
a. centers on conformance to standards or success in meeting specifications.
b. emphasized that quality was more than a technical specialty.
c. examines a firm’s quality performance relative to competitors.
d. focuses on market-perceived quality and value versus that of competitors.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. In stage three of the quality movement attention shifts:
a. from zero defects in products to zero defections in customers.
b. to customer loyalty.
c. to the conformance to standards or success in meeting specifications.
d. (a) and (b) only.
e. (a) and (c) only.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The percentage of organizational buyers who have a positive image of a company minus the buyer with a negative opinion is called:
a. brand attitude.
b. brand equity.
c. a strong brand
d. none of the above.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Which of the following statements is false in regard to brand attitude for high-technology firms?
a. The appointment of a well-recognized executive officer who introduced a new strategy increases
b. Brand attitude is independent of competitive actions.
c. Changes in brand attitude have been shown to be associated with stock market performance.
d. Investments in building brand attitude for high-technology firms increases the firm’s value.

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. A ____ establishes the distinct arena in which the business marketer competes.
a. target market
b. product market
c. market segment
d. competitive analysis

 

 

ANS:  B                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Among technology adopters, these customers are pessimistic about their ability to derive any value from technology investments and are extremely price sensitive.
a. technology enthusiasts.
b. visionaries.
c. pragmatists.
d. conservatives.
e. skeptics.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Among technology adopters, these customers are ever-present critics of the hype surrounding high-technology products.
a. technology enthusiasts.
b. visionaries.
c. pragmatists.
d. conservatives.
e. skeptics.

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. _____ represents a business customer’s overall assessment of a relationship with a supplier based on perceptions of benefits received and sacrifices made.
a. Market analysis
b. A value network
c. Customer value
d. Relationship management
e. Relationship quality

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Customer benefits from a relationship with a supplier include which of the following?
a. Core benefits.
b. Add-on benefits.
c. Gross margin benefits.
d. All of the above.
e. Only a and b.

 

 

ANS:  E                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Benefits and sacrifices are both considered when assessing customer value.  Sacrifices include:
a. the purchase price.
b. acquisition costs.
c. operations costs.
d. All of the above.
e. Only a and b.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Which dimension of the product market definition involves the benefits that are provided to satisfy the needs of the organizational buyers?
a. Customer function.
b. Technological.
c. Customer segment.
d. Value-added system.

 

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Which dimension of the product market definition considers the distinct customer needs that must be served?
a. Customer function.
b. Technological.
c. Customer segment.
d. Value-added system.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Which of the following is NOT a step in the product-positioning process?
a. Identify the relative set of competitive products.
b. Determine the product’s current position versus competing offerings.
c. Develop an evoked or consideration set of possible positions.
d. Examine the fit between preferences of segments and the current product position.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. In the technology adoption life cycle, the gap between visionaries and pragmatists where sales often drop significantly is called:
a. the bowling alley.
b. main street.
c. the chasm.
d. the end of life.
e. the early market.

 

 

ANS:  C                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. In the technology adoption life cycle, the stage that represents a period of aftermarket development where supply exceeds demand is called:
a. the chasm.
b. the tornado.
c. the bowling alley.
d. the main street.
e. the end of life.

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. In the technology adoption life cycle, the main goal of the ____ stage is to develop value-based strategies targeted to particular end user segments.
a. chasm
b. tornado
c. bowling alley
d. main street
e. end of life

 

 

ANS:  D                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The basic premise of his CBBE model is that the power of a brand lies in
  2. What consumers have learned, felt, seen, and heard about the brand over time
  3. The market share it commands
  4. How the decision maker perceives the ultimate value of the item
  5. None of the above
  6. All of the above

 

ANS:  A                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The main factor stimulating the megatrend of sustainability is
  2. Intensified global competition for natural resources
  3. Escalating public concern
  4. Escalating government concern
  5. Natural resource depletion
  6. All of the above

 

ANS:    E          PTS:     1

NAT:   AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. A brand mantra is
  2. a very short summary of the essence of the brand
  3.   is used to communicate the core values of the brand
  4. helps employees understand the key meaning of the company’s product
  5. is crucial in the overall process of building a strong brand
  6. all of the above.

 

ANS:    E          PTS:     1

NAT:   AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

 

 

TRUE/FALSE

 

  1. Proprietary items are industrial products that are offered only in certain configurations and produced in anticipation of orders.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Custom-built items are created to meet the needs of one or a small group of customers.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Strong brands have a personality that defines how it might be described if it had human qualities (for example, friendly, confident).

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Determinant attributes are both important and differentiating in the eyes of business market customers.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Visionaries make the bulk of technology purchases in organizations.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. A finely-tuned market segmentation strategy is critical to success during the tornado phase of the adoption life cycle.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. A mass market strategy is the appropriate course to follow during the bowling alley phase of the technology adoption life cycle process.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Brand attitude is defined as the percentage of organizational buyers who have a negative image of a company minus the buyers with a positive one.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The two forms of customer benefits are core and add-on.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Recent research has demonstrated that add-on benefits more strongly influence customer value than core benefits.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Custom-designed products are creates to meet the needs of one or a small group of customers.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The four dimensions of a product market definition are customer function, environmental, technological, and value-added system.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. For high-technology firms, well-recognized executives and competitive actions can both be drivers of brand attitude change.

 

ANS:  T                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. The central success factors for the tornado phase of the technology adoption life cycle are remarkably similar to the bowling alley phase.

 

ANS:  F                    PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

COMPLETION

 

  1. ____________________ is a set of brand assets and liabilities linked to a brand, its name, and symbol that add to or subtract from the value provided by a product or service and/or to that firm’s customers.

 

ANS:  Brand equity

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. ____________________ brand equity is defined as the differential effect that customers’ brand knowledge has on their response to marketing activities and programs for that brand.

 

ANS:  Customer-based

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Brand ____________________is described as the ways in which the brand attempts to meet customers’ more abstract psychological or social needs.

 

ANS:  Imagery

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Brand ____________________refers to the customer’s ability to recall or recognize a brand under different conditions.

 

ANS:  awareness

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. Brand ____________________represents the strength of the psychological bond that a customer has with a brand and the degree to which this connection translates into loyalty, attachment, and active engagement with the brand.

 

ANS:  resonance

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

  1. New products or services that require the end-user and the marketplace to dramatically change their past behavior, with the promise of gaining equally dramatic new benefits are known as ____________________ innovations.

 

ANS:  discontinuous

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Managing strategy & innovation

 

ESSAY

 

  1. Along with consumer-goods names like Nike or Coca Cola, the world’s most valuable brands include high-tech representatives such as Intel, Hewlett-Packard, IBM, and Microsoft. Describe the attributes of a strong high-tech brand. Do the investments in building a high-tech brand pay off? Explain.

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Strategic & systems skills

 

  1. Strategy experts suggest that a company’s product or service is competitively superior if, at a price equal to the price of competing products, customers always choose it.  With this in mind, consider the spectacular growth of Dell Computer—a firm that sells direct to organizations and individuals who can place orders by phone or through the Internet.  Using the value-in-use concept, describe the costs and benefits a customer faces in buying a computer directly from Dell.  On what dimensions would local computer dealers and retailers enjoy an edge over Dell?  Overall, what are the critical factors that shape the product strategy followed by Dell?

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Strategic & systems skills

 

  1. Selecting a hypothetical product and market setting, describe how a business marketing manager might use product positioning analysis to examine the competitive position of a product.  Drawing on your illustration, suggest the product strategy implications.

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Strategic & systems skills

 

  1. The bowling alley represents a stage in the adoption life cycle where a product gains acceptance from selected groups of customers within the mainstream market but has yet to achieve widespread adoption. Describe the strategy that the business marketing firm should follow at this stage in the technology adoption life cycle. Next, explore the factors that trigger a tornado in high-tech markets and discuss how the focus of strategy changes during this chaotic phase.

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Strategic & systems skills

 

  1. Main Street represents a stage in the technology adoption life cycle where the frantic waves of adoption have subsided and supply now exceeds demand.  Using any product and industry you choose, please describe the strategies that business marketers should follow during this phase.

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Strategic & systems skills

 

  1. Customer value represents a business customer’s overall assessment of a supplier based on perceptions of benefits received and sacrifices made.  Discuss the benefits and sacrifices typically considered by customers when assessing value.  What has recent research discovered matters most in customer value and how do these findings impact business marketing strategies?

 

ANS:

n/a

 

PTS:   1

NAT:  AACSB Reflective Thinking | CB&E Model Product | R&D Strategic & systems skills