CHAPTER 16 Marketing Globally 1. International marketing is different from domestic marketing in that _____. a. principles are different b. consumers prefer domestically made merchandise c. environmental differences often cause managers to apply principles differently d. low prices are a more important competitive factor abroad Answer: c. environmental differences often cause managers to apply principles differently 2. In comparing international and domestic marketing, we can say that _____. a. similar principles are at work b. the narrowing of product lines sold abroad makes international marketing less complex than domestic marketing c. principles differ for product and price, but not for advertising d. the gap between them can be studied through gap analysis Answer: a. similar principles are at work 3. In comparing international and domestic marketing, we can say that _____. a. companies use production orientations domestically, but must use customer orientations abroad b. environmental differences among countries may necessitate a different application of principles from one country to another c. environmental differences among countries necessitate different marketing principles among them d. the profits from international sales are generally higher than for domestic sales Answer: b. environmental differences among countries may necessitate a different application of principles from one country to another 4. If a company finds that it can use marketing principles in a foreign country that are similar to those it uses domestically, it _____. a. can standardize the products it sells in the two markets b. will earn more on the foreign sales because it has already covered developmental expenses domestically c. will likely encounter a target market that comprises the same portion of the population in both countries d. will likely have to apply the principles differently in the foreign country because of environmental differences Answer: d. will likely have to apply the principles differently in the foreign country because of environmental differences 5. In which of the following marketing orientations does a company focus primarily on efficiency and product quality when selling abroad? a. production orientation b. customer orientation c. sales orientation d. strategic marketing orientation Answer: a. production orientation 6. When selling a commodity for which there is little possibility of product differentiation, a company would likely use which of the following orientations? a. customer orientation b. production orientation c. sales orientation d. strategic marketing orientation Answer: b. production orientation 7. Companies that use a production orientation for selling internationally _____. a. are most apt to be those that have little excess production capacity b. depend more on branding than price for selling their products c. depend on final consumer markets rather than on company-to-company sales d. have often found that marketing efforts have yielded positive results Answer: d. have often found that marketing efforts have yielded positive results 8. Companies may successfully use a production orientation in all the following except _____. a. when there is little opportunity for product differentiation b. when it fills unsolicited orders c. when selling to countries with larger markets and substantial environmental differences than those at home d. when there are niches abroad that are similar to those in the home market Answer: c. when selling to countries with larger markets and substantial environmental differences than those at home 9. Companies using a sales orientation find their greatest ability to sell the same product in more than one country when _____. a. promotional programs are identical in each country b. consumer characteristics are similar and there is much spillover in product information c. the product is a household item d. the product has a low price relative to incomes Answer: b. consumer characteristics are similar and there is much spillover in product information 10. A company that sells abroad completely dissimilar products to those it sells domestically in order to successfully tap a particular country market is following a _____. a. strategic marketing orientation b. sales orientation strategy c. production orientation strategy d. customer orientation strategy Answer: d. customer orientation strategy 11. A company that adapts its marketing to foreign differences without deviating very far from its experience is following a _____. a. customer orientation b. sales orientation c. strategic marketing orientation d. production orientation Answer: c. strategic marketing orientation 12. Which of the following best describes a company that follows a societal marketing orientation? a. It considers the environmental, political, and safety dimensions of its products. b. It is a not-for-profit entity. c. It is a government-owned entity. d. It produces goods and services aimed at improving people's self-image and popularity. Answer: a. It considers the environmental, political, and safety dimensions of its products. 13. What is the most common way of identifying market segments within a country? a. psychographics b. the Internet c. gap analysis d. demographics Answer: d. demographics 14. When looking at a country as an international market segment, _____. a. a company will most likely achieve target sales by following a sales orientation strategy within that market b. a company should first target the high-income people within that market c. a company may overlook the heterogeneity of consumers within that country d. a company should introduce multiple products to see which one sells best Answer: c. a company may overlook the heterogeneity of consumers within that country 15. If a company wishes to appeal to a mass market in each country where it operates, to be successful it will likely _____. a. need to change elements of its marketing program for different countries b. need to enter each market with a price penetration strategy to build maximum sales c. have to forego operating in certain countries where incomes are low d. find its best results from a production orientation strategy Answer: a. need to change elements of its marketing program for different countries 16. When a company identifies some market segment on a global basis, such as a segment based on income, it will likely _____. a. encounter a similar percentage of the population in each country within that segment b. find that a niche market in one country may be a mass market in another c. find that the market in each country is so dispersed that distribution is difficult d. be aiming at a mass market in each country Answer: b. find that a niche market in one country may be a mass market in another 17. For which of the following is cost savings through global standardization potentially greatest? a. branding b. products c. distribution d. promotion Answer: b. products 18. Agreements on international product standards are hampered by all the following factors except _____. a. higher costs for consumers in the long -term b. consumer reluctance to make changes, such as learning what new sizes mean c. the cost of redesigning and retooling to a new standard d. governments' desires to protect investments already made Answer: a. higher costs for consumers in the long -term 19. When a company's domestic legal requirements for products exceed those of the foreign market, _____. a. it cannot, in the case of a U.S. company, sell a less safe product abroad than at home b. it is compelled to alter the product to the lower standards of the foreign market c. it needs to consider adapting to the lower product standards of the foreign market if profits can be enhanced by doing so d. it must petition its home government to negotiate with the host government for a common standard Answer: c. it needs to consider adapting to the lower product standards of the foreign market if profits can be enhanced by doing so 20. Companies finding market opportunities in foreign countries for products that are obsolete in their domestic markets are exploiting _____. a. cheap labor b. less stringent environmental protection laws c. usage gaps d. product life cycle differences Answer: d. product life cycle differences 21. On the one hand, some people contend that products banned in First World countries because of being dangerous (such as DDT) should not be exported to Third World countries. On the other hand, other people support the ability to export these products because _____. a. Third World countries have different needs that justify the use of these products b. First World unemployment would increase if these products could not be sold c. these products are bought primarily by highly educated Third World consumers who know how to use them safely d. the products would be too costly for Third World consumers if they were manufactured there Answer: a. Third World countries have different needs that justify the use of these products 22. Some critics complain that MNEs introduce and promote superfluous products in Third World countries, causing consumers there to buy these products rather than things they need for their health. People answering this criticism have contended that _____. a. consumers don't buy things because of promotion b. the amount spent on so-called superfluous products is insignificant c. it is impossible to draw a line between people who can afford and people who can't afford these products d. these products serve to motivate people in Third World countries to work harder Answer: c. it is impossible to draw a line between people who can afford and people who can't afford these products 23. Critics complain that pharmaceutical research budgets emphasize nondebilitating First World conditions rather than life-threatening Third World diseases. People answering this criticism have contended that _____. a. correction of First World conditions, such as balding, are necessary to stimulate First World innovations that push global economic growth b. very little of research budgets actually target these nondebilitating conditions c. by being located almost entirely in First World countries, pharmaceutical companies lack access to locations where they can study diseases such as malaria and sleeping sickness d. pharmaceutical companies cannot re-coup expenses for research on some of the Third World problems, thus governmental research centers and nonprofit foundations should handle this research Answer: d. pharmaceutical companies cannot re-coup expenses for research on some of the Third World problems, thus governmental research centers and nonprofit foundations should handle this research 24. Why are First World companies sometimes criticized for exporting to Third World countries the same products they sell in First World countries? a. The prices of the products are too high in Third World countries. b. Many of the products are said to be superfluous to Third World needs. c. The sales enhance Third World companies' failures. d. Third World countries need local production rather than imports. Answer: b. Many of the products are said to be superfluous to Third World needs. 25. Why might companies sometimes narrow the product line that they sell in a foreign country as compared to the product line they sell at home? a. Government restrictions often limit how many products a company can sell locally. b. Selling cost per unit usually increases substantially when a company offers a broad product line. c. Not all products have sufficient demand in every market. d. They wish to sell only those products for which there are product line gaps. Answer: c. Not all products have sufficient demand in every market. 26. When companies have related products, they may sometimes have to sell some less lucrative products in order to sell the more popular ones. In such a situation, a strategy companies might follow is to _____. a. find distributors to handle only the less lucrative products b. switch all promotion to the less lucrative products so that they become lucrative c. build brand consciousness for the whole family of products d. produce locally the popular products if demand allows for sufficient economies of scale and import those that are less popular Answer: d. produce locally the popular products if demand allows for sufficient economies of scale and import those that are less popular 27. Why might a company sometimes handle a broader product line in a foreign country than in its home country? a. to concentrate its promotional efforts b. to gain economies in distribution c. because most of its new product development is abroad d. because it cannot find local distributors Answer: b. to gain economies in distribution 28. If a company's foreign sales per customer is small compared to those in its domestic market, it might _____. a. broaden the product line handled b. narrow the product line handled c. be due to different product life cycle shapes d. be advantageous to add more salespeople Answer: a. broaden the product line handled 29. Diversity of international markets, currency instability, and companies' strength with suppliers have the greatest effect on _____. a. promotion b. distribution c. branding d. pricing Answer: d. pricing 30. A company may wish to export at a price lower than the price it charges in its domestic market in order to _____. a. use a skimming strategy abroad b. test-market before building a foreign production facility c. use a cost-plus strategy globally d. hinder gray market sales Answer: b. test-market before building a foreign production facility 31. Why might a company face difficulty in setting export prices below those it charges in its home country? a. WTO antidumping regulations b. complaints by consumers in importing countries c. complaints by competitors in exporting countries d. complaints by workers in the exporting countries Answer: a. WTO antidumping regulations 32. Suppose an exporter sells a product for $100, the importer uses a cost-plus pricing strategy of 50 percent, and the importer pays a 20 percent import tariff. For how much will the importer sell it? a. $150 b. $170 c. $180 d. $200 Answer: c. $180 33. How might high inflation affect pricing? a. A company may need to increase prices because of income tax being paid on "paper profits." b. A company may be charged with dumping more easily. c. Transfer pricing on a company's imports is open to more scrutiny. d. A company may have to sell more on credit. Answer: a. A company may need to increase prices because of income tax being paid on "paper profits." 34. All of the following are possible effects of exchange rate changes except _____. a. companies cannot as easily sell in vending machines b. the least cost production location may change c. prices may need to be adjusted to prevent customers from buying in foreign markets d. the distributor system may be upset Answer: a. companies cannot as easily sell in vending machines 35. What is the gray market? a. sales targeted to senior citizens b. selling and handling goods through unofficial distributors c. a legal black market d. selling of counterfeit merchandise Answer: b. selling and handling goods through unofficial distributors 36. Companies are concerned about the gray market because _____. a. increased aging has increased the size of this market b. of the uncertainty on how their ethical behavior will be perceived c. it can upset distributorship arrangements and the ability to charge different market prices in different countries d. of the difficulty of converting funds from foreign earnings Answer: c. it can upset distributorship arrangements and the ability to charge different market prices in different countries 37. Which of the following best depicts a push strategy for a U.S. company selling in Mexico? a. Tupperware selling through parties in homes b. Gillette selling razor blades through supermarkets c. KFC selling chicken dinners at its franchises d. Amazon.com selling books over the Internet Answer: a. Tupperware selling through parties in homes 38. A push strategy for international sales is probably preferable to a pull strategy when _____. a. there are few prohibitions on advertising b. the price of the product is high relative to incomes c. people depend a great deal on friends' opinions before buying a product d. literacy rates are high Answer: b. the price of the product is high relative to incomes 39. A pull rather than a push strategy is probably preferable when _____. a. self-service is not predominant b. the price of a product is high relative to incomes c. there are few governmental restrictions on advertising d. there are a large number of languages and a low literacy rate Answer: c. there are few governmental restrictions on advertising 40. The relative mix of push and pull promotional strategy is affected by all of the following except _____. a. the type of distribution system in place b. consumer attitudes toward sources of information c. the price of the product relative to incomes d. the stage of the product in its life cycle Answer: d. the stage of the product in its life cycle 41. All of the following are problems in standardizing advertising programs globally except _____. a. translated themes may be meaningless in another country b. consumers in each country are more easily sold if the product is given a national rather than a foreign image c. what is legal one place may be illegal elsewhere d. themes may be perceived differently in different countries Answer: b. consumers in each country are more easily sold if the product is given a national rather than a foreign image 42. Which of the following best describes globally standardized advertising? a. a campaign that is identical in all markets b. a campaign that meets the legal and ethical standards of all countries c. a campaign that is similar from market to market d. a campaign that depends primarily on push rather than pull promotion Answer: c. a campaign that is similar from market to market 43. All of the following are possible advantages of globally standardized advertising programs except _____. a. cost savings b. improvement of local-level quality c. avoidance of legal impediments d. faster entry into different markets Answer: c. avoidance of legal impediments 44. In advertisements aimed at different countries, companies sometimes use actors who do not speak, along with a voice and/or print overlay. What is the main reason for doing this? a. avoid dubbing that does not correspond to lip movements b. alter themes and messages among countries c. meet legal requirements for having ads in local official languages d. reach a hearing-or sight-impaired audience Answer: a. avoid dubbing that does not correspond to lip movements 45. All of the following are problems of using a worldwide brand except _____. a. brand names may carry a different association in another language b. pronunciation may be difficult in another language c. acquired brand names cannot be legally changed d. pictogram alphabets need visual appeal in addition to phonetic appeal Answer: c. acquired brand names cannot be legally changed 46. Which of the following best describes the relationship between product image and product origin? a. Consumers believe that imported products are better. b. Consumers believe that domestically made products are better. c. Consumers realize that there are some good and bad producers of almost any product anywhere. d. Consumers have different quality images by country of origin depending on the product. Answer: d. Consumers have different quality images by country of origin depending on the product. 47. The emergence of generic names to replace trademarks _____. a. may take place in some countries even though the trademark remains protected in others b. takes place at about the same time among all countries that are signatories to international trademark agreements c. helps the sale of products that were previously protected by trademarks d. applies to protection based on location rather than on original brand names Answer: a. may take place in some countries even though the trademark remains protected in others 48. What is a generic name? a. a global brand b. a once trademarked brand name that has become legally synonymous with the type of product c. a brand name given to a product aimed at elderly consumers d. a non–brand name used by suppliers who manufacture on behalf of companies using brands Answer: b. a once trademarked brand name that has become legally synonymous with the type of product 49. Which of the following is true concerning countries' distribution systems? a. They reflect the economic levels of countries, so countries at similar economic levels have similar distribution systems. b. They are difficult to change because they have evolved over time, reflecting countries' cultural, economic, and legal environments. c. They are more similar among countries than pricing and promotional systems are. d. When standardized, they offer more cost savings for international companies than when products are standardized. Answer: b. They are difficult to change because they have evolved over time, reflecting countries' cultural, economic, and legal environments. 50. All of the following are true about distribution concerns when marketing internationally except ____. a. geographic barriers may divide countries into very distinct markets b. consumer preferences toward a form of distribution (such as door-to-door versus mail order) may dictate the use of different methods from one country to another c. because wholesales and retailers have limited capacity, they must be given incentives to handle one's merchandise d. because most foreign consumers are easily presold by advertising messages, it is difficult to convince retailers to offer good service Answer: d. because most foreign consumers are easily presold by advertising messages, it is difficult to convince retailers to offer good service 51. All of the following are "hidden costs" of distribution that may cause consumer prices to rise except _____. a. minimum price controls b. many levels in the distribution system c. retail inefficiencies d. inventory stock-outs Answer: a. minimum price controls 52. Which of the following is a common criterion for selecting a foreign distributor? a. weak financial strength (needs the business) b. few trained personnel (new personnel are more open-minded) c. good connections (has friends to sell to) d. ability to handle noncomplementary products (no attempt to tie sales to those of other companies) Answer: c. good connections (has friends to sell to) 53. Which of the following is most likely to lead to the self-handling of foreign distribution? a. high-volume sales and little after-sales servicing b. local customers and low-tech products c. no competitive advantage in distribution method and little business-to-business sales d. customers are global and technology is high Answer: d. customers are global and technology is high 54. What must a company usually do to gain contracts with foreign distributors? a. convince the distributors that the product and company are viable b. "build a better mousetrap" and distributors will compete to get the account c. determine the distribution gap before signing a contract d. establish some inhouse distribution to demonstrate what is desired Answer: a. convince the distributors that the product and company are viable 55. Before signing a contract with foreign distributors, companies must usually convince them that they and their products are viable because distributors _____. a. fear they will be displaced after they build a market for foreign companies b. worry about legal liability because of selling faulty products c. have limited capacity and want to use it most effectively d. have to give up exclusive arrangements with local manufacturers in order to take on foreign clients Answer: c. have limited capacity and want to use it most effectively 56. All of the following are true about the Internet and electronic commerce except _____. a. suppliers can deal more quickly with their customers b. it enhances companies' ability to differentiate their marketing methods by country c. customers worldwide can more quickly compare prices from different distributors d. companies must be able to deliver what they sell more expeditiously over the Internet Answer: b. it enhances companies' ability to differentiate their marketing methods by country 57. Gap analysis is _____. a. a method for estimating a company's potential sales by identifying segments it is not serving adequately b. an investment advisor's report on the future of one of the leading clothing retailers c. the leap-frogging of demand in many emerging economies whereby consumers skip certain generations of products, buying the latest model instead d. an estimation of the disparity in incomes between the very rich and the very poor Answer: a. a method for estimating a company's potential sales by identifying segments it is not serving adequately 58. One may use gap analysis to _____. a. estimate market potential over a business cycle b. compare sales over time c. compare consumption potential with one's own sales d. determine the best market niches to target Answer: c. compare consumption potential with one's own sales 59. Assume the per capita consumption of shoes is three pairs in Country A and two pairs in Country B. The difference probably means that there is a _____ gap in Country B. a. product line b. usage c. distribution d. competitive Answer: b. usage 60. Assume you are a producer of liquid stomach remedies and you have a competitor who sells stomach remedies in both liquid and tablet form. The amount of the market which your competitor sells of tablet remedies is a _____. a. usage gap b. competitive gap c. distribution gap d. product line gap Answer: d. product line gap 61. International marketing is different from domestic marketing in that principles are different. Answer: False 62. Environmental differences between countries may necessitate a different application of marketing principles from one country to another. Answer: True 63. In a production orientation, a company focuses on efficiency and product quality when selling abroad. Answer: True 64. Companies may successfully use a production orientation when marketing internationally if there is little opportunity for product differentiation. Answer: True 65. A company that adapts its marketing to foreign differences without deviating very much from its experience is following a customer orientation. Answer: False 66. A company that sells abroad completely dissimilar products to those it sells domestically in order to successfully tap a particular country market is following a sales orientation strategy. Answer: False 67. When looking at a country as a whole as an international market segment, a company may overlook the heterogeneity of consumers within that country. Answer: True 68. If a company wishes to appeal to a mass market in each country where it operates, to be successful it will likely need to vary elements of its marketing program for different countries. Answer: True 69. There are more cost savings for international branding standardization than for international product standardization. Answer: False 70. Companies finding market opportunities in foreign countries for products that are obsolete in their domestic markets are exploiting product life cycle differences. Answer: True 71. Critics of international companies complain that these companies spend too much on research for the needs of Third World countries. Answer: False 72. Critics of international companies complain that these companies restrict the sales of luxury products in Third World countries. Answer: False 73. A company sometimes handles a broader line of products in a foreign country than in its home country because most of the new product development is abroad. Answer: False 74. Not all of a company's products have sufficient demand to justify marketing them in every country. Answer: True 75. A company may wish to export at a price lower than that in its domestic market in order to use a skimming policy abroad. Answer: False 76. A company might face difficulties is setting export prices below those prices in its home country because of antidumping regulations. Answer: True 77. High inflation might cause a company to gain advantages by selling more on credit. Answer: False 78. The gray market is the selling and handling of goods through unofficial distributors. Answer: True 79. A push strategy is probably preferable to a pull strategy when the price of the product is high relative to incomes. Answer: True 80. A pull strategy is probably preferable to a push strategy when there are a large number of languages and a low literacy rate. Answer: False 81. Consumers in each country are more easily persuaded to buy products with a national rather than a foreign image. Answer: False 82. An ad campaign that is similar from market to market describes what is generally called a globally standardized advertising campaign. Answer: True 83. Consumers believe that domestically made products are better. Answer: False 84. A generic name is a brand name given to products aimed at elderly consumers. Answer: False 85. Geographic barriers may divide countries into very distinct markets. Answer: True 86. Costs generally rise when there are many levels in the distribution system. Answer: True 87. When a company sells technologically advanced products to global customers, it is more likely to handle distribution itself. Answer: True 88. The Internet enhances companies' ability to differentiate their marketing efforts by country. Answer: False 89. Gap analysis refers to an estimation of sales potential caused by the disparity in incomes between rich and poor countries. Answer: False 90. One may use gap analysis to compare consumption potential with one's own sales. Answer: True 91. In a short essay, discuss the international application of five common product policies. Answer: a. Production orientation—With production orientation, companies focus primarily on production—either efficiency or high quality—with little emphasis on marketing. There is little analysis of consumer needs; rather, companies assume customers want lower prices or higher quality. b. Sales orientation—Internationally, sales orientation means a company tries to sell abroad what it can sell domestically on the assumption that consumers are sufficiently similar globally. A company may make this assumption because the distance between it and its foreign markets makes information about the foreign markets difficult to obtain. This orientation differs from the production orientation because of its active rather than passive approach to promoting sales. c. Customer orientation—In a company that operates according to sales orientation, management usually is guided by answers to questions such as: Should the company send some exports abroad? Where can the company sell more of Product X? In contrast, a customer orientation asks: What can the company sell in Country A? d. Strategic marketing orientation—Most companies committed to continual, rather than sporadic, foreign sales adopt a strategy that combines production, sales, and consumer orientations. Instead of merely trying to sell a domestic product abroad, the company designs a product to fit some global market segment. e. Societal marketing orientation—Companies with societal marketing orientations realize that successful international marketing requires serious consideration of potential environmental, health, social, and work-related problems that may arise when selling or making their products abroad. 92. In a short essay, describe the various reasons for product alternation. Answer: a. Legal reasons—Explicit legal requirements are the most obvious reasons for altering products for foreign markets. The exact requirements vary widely by country, but are usually meant to protect consumers. One of the more cumbersome product alterations for companies is adjusting to different laws on packaging that protect the environment. Marketing managers must also watch for the indirect legal requirements that may affect product content or demand. b. Cultural reasons—Marketing managers find it difficult to determine in advance whether consumers in foreign markets will accept new or different products because of differences in consumer cultures. c. Economic reasons—If foreign consumers lack sufficient income, they may not be able to buy the product the MNE sells domestically. The company therefore may have to design a cheaper model. Even if a market segment has sufficient income to purchase the same product the company sells at home, differences in infrastructure may require product alterations. 93. In a short essay, discuss the reasons that make pricing internationally more complex than pricing domestically. Answer: All of the following are reasons that make pricing internationally more complex than pricing domestically. a. different degrees of governmental intervention b. greater diversity of markets c. price escalation of exports d. changing values of currencies e. differences in fixed versus variable pricing practices f. retailers' strength with suppliers 94. Define price escalation in exporting and explain why it occurs. Answer: Price escalation occurs if standard markups occur within distribution channels and lengthening the channels or adding expenses somewhere within the system further increases the price to the consumer. Price escalation in export sales occurs for two reasons: (1) channels of distribution usually span greater distances and so exporters need to contract with organizations that know how to sell in foreign markets and (2) tariffs are an additional cost that may be passed on to consumers. 95. What is the gray market? Why are companies concerned about it? Answer: The selling of goods through unofficial distributors, the gray market, can undermine the longer-term viability of the distributorship system, cause a company's plants in different countries to compete with each other, and make it harder for companies to spot counterfeit goods. 96. In a short essay, discuss the push-pull mix. Answer: Promotion may be categorized as push, which uses direct-selling techniques, or pull, which relies on mass media. Most companies use combinations of both marketing strategies. For each product in each country, a company must determine its total promotional budget as well as the mix of the budget between push and pull. Generally, the more tightly controlled the distribution system, the more likely a company is to emphasize a push strategy because it requires a greater effort to get distributors to handle a product. Also affecting the push-pull mix is the amount of contact between salespeople and consumers. 97. In a short essay, discuss the standardization of advertising programs. Answer: In addition to reducing costs, advertising standardization may improve the quality of advertising at the local level, prevent internationally mobile consumers from being confused by different images, and speed the entry of products into different countries. Standardized advertising usually means a program that is similar from market to market rather than one that is identical in each. Some of the problems that hinder complete standardization of advertising relate to translation, legality, and message needs. Standardization usually implies using the same advertising agency globally. However, companies may differentiate campaigns among countries even if they use the same agency everywhere. 98. In a short essay, discuss branding. Answer: A brand is an identifying mark for products or services. When a company registers a brand legally, it is a trademark. A brand gives a product or service instant recognition and may save promotional costs. MNEs must make four major branding decisions: a. brand versus no brand b. manufacturer's brand versus private brand c. one brand versus. multiple brands d. worldwide brand versus local brands 99. In a short essay, discuss the difficulty of standardization in distribution. Answer: Within the marketing mix, MNEs find distribution one of the most difficult functions to standardize internationally, for several reasons. Each country has its own distribution system, which an MNE finds difficult to modify because it is entwined with the country's cultural, economic, and legal environments. 100. What challenges does selling internationally through the Internet create? Answer: Many households, especially in emerging economies, lack access to Internet connections. Therefore, if a company wants to reach mass global markets, it will need to supplement its Internet sales with sales using other means of promoting and distribution. A company also needs to set up and promote its Internet sales, which can be very expensive. A company cannot easily differentiate its marketing program for each country where it operates. If a company makes international sales over the Internet, it must deliver what it sells expeditiously. This may necessitate placing warehouses and service facilities abroad, which the company may or may not own and manage itself. Finally, the company's Internet ads and prices must comply with the laws of each country where the company makes sales. This is a challenge because a company's web page reaches Internet users everywhere. 101. In a short essay, discuss gap analysis. Answer: Gap analysis is a method for estimating a company's potential sales by identifying market segments it is not serving adequately. When sales are lower than the estimated market potential for a given type of product, the company has potential for increased sales. The distribution gap represents sales lost to competitors who distribute where the company does not. The product line gap represents sales lost to competitors who have product variations the company does not have. And the competitive gap is the remaining unexplained sales lost to competitors who may have a better image or lower prices. Test Bank for International Business: Environments and Operations John D. Daniels, Lee H. Radebaugh, Daniel P. Sullivan 9780131869424, 9780201846188, 9780130308016, 9780201566260, 9780201107135, 9780132668668
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