Products and Services For Consumers: True / False Questions

Chapter 13
Products and Services for Consumers

True / False Questions

1. Global competition has put more power in the hands of the seller.

True False

2. The cost and quality of the product are among the most important criteria by which purchases are made.

True False

3. Consumer perceptions of a quality product often have more to do with market-perceived quality than
performance quality.

True False

4. Though quality is always important in the consumer’s mind, in general, do not expect it to be a given.

True False

5. The decision to standardize or adapt a product is crucial in delivering quality.

True False

6. In many countries the term product homologation is used to describe the changes mandated by local
product and service standards.

True False

7. Green marketing is the term frequently used to identify a marketer's efforts to reduce its dependency on
U.S. dollars as the standard for international exchange.

True False

8. The European Commission (EC) mandate requires a product to be evaluated on all significant
environmental effects throughout its life cycle, from manufacturing to disposal.

True False

13-1
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in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
9. An important first step in adapting a product to a foreign market is to determine the degree of newness as
perceived by the intended market.

True False

10. Adaptation of a product to a new culture requires changes in most of the physical attributes of the product.

True False

11. From a sociological point of view, any idea perceived as new by a group of people is an innovation.

True False

12. According to Everett Rogers, the element of time differentiates diffusion from other types of
communication research.

True False

13. One of the three variables, which affect the rate of diffusion of a product, is the product’s degree of
perceived newness.

True False

14. The perceived attributes of an innovation is a variable that affects the rate of diffusion of a product.

True False

15. In general, the rate of diffusion of a product is negatively related to its relative advantage.

True False

16. The newness of a product or brand introduced can be an important competitive advantage.

True False

17. The packaging component of the product component model consists of the physical product and all its
design and functional features.

True False

18. One of the core components in the product component model is the product platform.

True False

19. According to the product component model, the instructions for using the product and the warranty of the
product are included under the packaging component.

True False

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20. One of the consistencies that marketers can look forward to when marketing products abroad is that almost
all labeling laws worldwide are essentially the same.

True False

21. In countries with low-literacy rates, the pictures and symbols on products are literally taken as instructions
and information.

True False

22. The support services component of the product component model contains such items as repair and
maintenance and availability of spare parts.

True False

23. Services such as insurance and dry cleaning are classified as tangible.

True False

24. Financial and legal services can not be regarded as a business service as they only provide services to the
consumers.

True False

25. A majority of services enter foreign markets by licensing, franchising, or direct investment.

True False

26. Cultural barriers play a bigger role in services than in merchandise trade.

True False

27. A single global approach is the best way to market a brand worldwide.

True False

28. Brand image is at the very core of business identity and strategy.

True False

29. Products from developing countries have the highest quality image.

True False

30. Effective advertising and proper positioning of products can help brands to ameliorate a less-than-positive
country stereotype.

True False

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Multiple Choice Questions

31. Which of the following is true regarding the impact of global competition on the business activities in the
marketplace?

A. It has shifted the focus in the marketplace from a consumer’s market to a seller’s market.
B. It has improved the financial position of domestic industries.
C. It has put more power in the hands of the customer.
D. It has shifted the focus away from the performance quality of a product.
E. It has limited the choices of the consumers.

32. Which of the following is the most important criterion for consumers while purchasing products?

A. Appearance
B. Size
C. Technology
D. Quality
E. Service

33. What are the two dimensions that help in defining the quality of a product of quality?

A. Product quality and process quality.

B. Market-perceived quality and performance quality.
C. Product quality and service quality.
D. Actual quality and assumed quality.
E. Absolute quality and relative quality.

34. _____ is the term used to describe the changes mandated by local product and service standards.

A. Product localization
B. Product blending
C. Product standardization
D. Product dilution
E. Product homologation

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35. Vital Health Products found out that they had to reduce the length of the tread in their treadmills sold in
China owing to the shorter legs of the average Chinese person. By doing this, Vital has achieved product
_____.

A. homologation
B. standardization
C. dilution
D. flexibilit
y
E. repositioning

36. A European chocolate manufacturer received several complaints from customers about the quality of its
product when it began selling them in a tropical country. The firm had to re-package its chocolate bars in
an extra plastic wrapper to protect it from the heat and dust. Which of the following factors in the local
market dictated product adaptation in the current scenario?

A. Legal requirements.
B. Economic requirements.
C. Political requirements.
D. Climatic requirements.
E. Technological requirements.

37. Booster bar is a popular brand of energy bars in Canada. The company sold these bars singly or in packs of
two in the South Asian markets, instead of their regular multiple-item packaging containing 10 or 20 bars
to make it more affordable for the consumers. Which of the following requirements of the local market is
influencing product adaptation in the above scenario?

B. Political requirement.
C. Economical requirements.
D. Technological requirements.
E. Cultural requirements.

38. A wine company had to market its products with a different name in a foreign market as it was mandatory
to translate the name in the local language. The factor that is influencing product adaptation in the above
scenario is _____.

A. legal requirements
B. climatic requirements
C. technological requirements
D. cultural requirements
E. economic requirements

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39. Adore cosmetics had to increase the SPF value of their sunscreen lotions marketed in the Middle East to
provide more protection against UV radiation. Which of the following factors is dictating product
adaptation in the above scenario?

B. Cultural requirements.
C. Economic requirements.
E. Political requirements.

40. Nuan, a television manufacturer in Korea, had to modify its televisions before introducing it to the
Zimbabwean markets, as the country did not have the skills to repair the product in case of a malfunction.
The local salesforce too, did not have the sufficient knowledge regarding the installation of the product.
The factor that is influencing product adaptation in the above scenario is ________.

C. political requirements
E. technological requirements

41. A clothing company in Singapore which specialized in women’s clothing, had to modify its clothes before
introducing them to Iranian markets, to suit the needs of women in that country. Women in Iran are
expected to cover themselves completely. The company mostly used opaque material and provided
accessories like scarves. Which of the following factors is dictating product adaptation in the above
scenario?

C. Technological requirements.
D. Economic requirements.
E. Climatic requirements.

42. _____ is a term used to identify concern with the environmental consequences of a variety of marketing
activities.

A. Greenhouse business
B. Hybrid business
C. Greenfield business
D. Green marketing
E. Alternative marketing

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43. HT motors is introducing a new technology in its cars to improve the mileage of the cars as well as to
reduce carbon emissions. The company is also taking measures to improve its production facilities in order
to reduce its carbon footprint. These measures employed by HT motors to meet the guidelines issued by the
government shows that the company is engaging in ________.

A. permission marketing
B. value-based marketing
C. green marketing
D. cause marketing
E. greenwashing

44. Which of the following has been at the forefront of the “green movement”?

A. The United States

B. Japan
C. Europe
D. OPEC countries
E. NAFTA countries

45. As part of the “green movement”, the European Commission has passed legislation to control all kinds of
packaging waste throughout the European Union. Two critical issues that affect product development are
the control of the packaging component of solid waste and _____.

A. variations in standards across different member countries

B. consumer demand for environmentally friendly products
C. government subsidies for greener technologies
D. availability of alternative energy resources for production
E. management of existing inventory of conventional energy products

46. Which of the following is a physical attribute of a product that is essential for its primary function?

A. Colors
B. Prices
C. Components
D. Designs
E. Sizes

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47. An important first step in adapting a product to a foreign market is to determine:

A. the degree of newness as perceived by the intended market.

B. the economic climate of the target market.
C. the advertising parallels with the domestic market.
D. the ability of a sales force to sell the product.
E. the compliancy to religious doctrine(s) in the foreign country.

48. From a sociological viewpoint, any idea perceived as new by a group of people is considered as a(n) _____.
A. creation
B. adaptation
C. ideation
D. homologation
E. innovation

49. _____ is the process by which innovation spreads.

A. Diffusion
B. Filtering
C. Dissolution
D. Flighting
E. Cascading

50. According to Everett Rogers, the goals of the diffusion researcher and the marketer are to shorten the time
lag between:

A. the dispatch of the product from the company and the time it takes to reach the customer.
B. the time that a budget is constructed and the time needed for the funds to reach the communication
channels.
C. initial investment and the profits obtained from those investments.
D. introduction of an idea or product and its widespread adoption.
E. introduction of an idea or product and when revisions can be made.

51. According to Everett Rogers, what is the element that differentiates diffusion from other types of
communications research?

A. Breakthrough innovation
B. Communications channels
C. Time
D. Social system
E. Government system

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52. Which of the following is considered to be one of the extraneous variables that affects the rate of diffusion
of an object?

A. The use of the internet in the diffusion process.

B. The age appearance of the innovation.
C. The number of marketing personnel dedicated to diffusion.
D. The method used to communicate the idea.
E. The shelf life of the diffusion object.

53. Martin is comparing the characteristics of his company’s water filters with those that are already being
marketed in the local market. He realizes that there is lot of scope for his filters as they are functionally
more advanced, have longer life, and also can be marketed at a competitive price in these markets. The
characteristic of his product that will help in wide acceptance of his product is its _____.

A. trialability
B. compatibility
C. observability
D. relative advantage
E. complexity

54. A product is said to be compatible if:

A. it provides greater value to the consumers compared to competitors’ products.

B. the risk associated with using the product is low.
C. it is user friendly.
D. it offer clear functional benefits over other products.
E. it complies with the accepted norms, values, and culture of the local market.

55. Carolyn is interested in marketing her company’s diet products in Asia. She is studying the acceptable
behavior, norms, and values in Asian markets. Carolyn is studying _____.

A. relative advantage
B. compatibility
C. complexity
D. trialability
E. observability

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56. A company focusing its efforts on making its new innovation more user-friendly is working on the _____
of the product.

B. compatibility
C. complexity
D. trialability
E. observability

57. Mark Harmon has found that using his new digital camera is a snap. He did not even have to read the
instruction manual to determine how to turn the camera on, snap a digital picture, and export the picture to
his computer. The signs (symbols) on the camera body made it very clear what he was to do to achieve
digital photography success. Which of the following characteristics of Mark’s “new product” made it easy
for him to begin his digital experience?

B. compatibility
C. complexity
D. trialability
E. observability

58. Fiona asked her product manager for samples to give to potential consumers in Madrid, her new European
market. Fiona is trying to reduce the degree of economic and/or social risk, or _____ associated with
product use.

B. compatibility
C. complexity
D. trialability
E. observability

59. A product’s _____, refers to the ease with which its benefits can be communicated to the customers.

B. compatibility
C. complexity
D. trialability
E. observability

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60. Ingrid is developing promotional materials and product demonstrations to easily communicate the benefits
of her cleaning products. Ingrid is trying to enhance the _____ of her products.

B. compatibility
C. complexity
D. complexity
E. observability

61. In general, the rate of diffusion can be postulated as negatively related to _____.

B. compatibility
C. trialability
D. complexity
E. observability

62. Which of the following factors is mainly responsible for a perceptual bias when interpreting the
characteristics of a product?

A. Poor product knowledge.

B. Noise in the communication channel.
C. Market analyst’s self-reference criterion.
D. Multitude of competing products.
E. Market analyst’s intelligence quotient.

63. The success achieved by firms when they take their inventions to market is referred to as _____.

A. conversion-ability
B. product penetration
C. diffusion
D. marketization
E. mass customization

64. The product platform, design features, and functional features are all found in the _____ component of the
product, according to the product component model.

A. core
B. support
C. packaging
D. functional
E. global

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65. Simone Francis is a specialist in product design. She is responsible for a product’s aesthetic as well as
functional appearance. With respect to the product component model, in which of the following component
categories would Simone’s talents most likely be used?

A. Core component.
B. Support services component.
C. Packaging component.
D. Functional component.
E. Global component.

66. If a company wished to alter a product’s platform so that the product could be manufactured in a variety of
forms, to meet local differences in five different foreign markets, the _____ of the product component
model would be in consideration.

A. support services component

B. packaging component
C. functional component
D. global component
E. core component

67. Omega appliances, a Korean company that manufactures kitchen appliances had to alter the design of its
chimneys to suit the needs of the consumers in its Japanese market. The Japanese preferred compact and
efficient appliances to fit their small kitchens. The component of the product that had to be altered in the
above scenario is the _____.

A. packaging component
B. functional component
C. core component
D. technical component
E. support services component

68. If a company is altering the price of its product to compete with the local companies in the international
market, it is focusing on the _____ component of the product, according to the product component model.

A. core
B. support
C. design
D. maintenance
E. packaging

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69. Apple Computer had difficulties when it first entered the Japanese market with its Macintosh computers.
Some of the computers were returned unused after customers found the wrapping on the instruction manual
damaged. Though this would probably be no big deal in the U.S., it was certainly a cause for concern in
quality-conscious Japan. To fix the problem, Apple needed to concentrate on which of the following
components of the product component model?

A. Core component.

70. Bagel’s foods had to change the labeling on their products to meet the specifications regarding vegetarian
and non-vegetarian foods, set by the government in the Japanese market. They also had to mention the
ingredients in Japanese to make it clear for the local customers. The component of the product that is in
focus in the above scenario is the _____.


D. design component
E. core component

71. According to the product component model, installation, repair and maintenance, deliveries, and warranties
are all part of the _____ component of the product.

A. core
B. support services
C. packaging
D. functional
E. global

72. In some countries, maintenance of automobiles is not the norm. Cars are not repaired until they break
down. Since the consumer is automatically angry with the manufacturer when something goes wrong with
the car, repair and maintenance has become a concern of the various automobile manufacturers in this
market. In which of the following components of the product component model would the management
need to make improvements if problems such as the one above are to be solved?

A. Core component.
B. Functional component.
D. Support services component.
E. Design component.

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73. A Korean electronics company had to add detailed instructions regarding the repair and replacement of its
product to make it easy for the local consumers to maintain it. Which of the following components of the
product is being altered in the given scenario?

A. Support services component.

B. Design component.
C. Core component.
D. Packaging component.
E. Functional component.

74. The washing machines marketed by Taichi failed in Asian markets as those countries lacked the skills
necessary to repair and maintain their products. Also, the washing machines spares available in local
markets were not compatible with these machines. This product failure was a result of lack of attention by
the company to the _____ component of the product.

A. core
B. design
C. packaging
D. support services
E. global

75. Insurance, dry cleaning, and hotel accommodations have intrinsic value resulting from a process, a
performance, or an occurrence that only exists while it is being created. Which of the following
characteristics of services best matches to the above?

A. Intangibility.
B. Inseparability.
C. Profitability.
D. Heterogeneity.
E. Perishability.

76. Because a service is individually produced and is virtually unique, the service is said to have _____.

A. intangibility
B. inseparability
C. profitability
D. heterogeneity
E. perishability

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77. Dr. Mark Townes is a dentist practicing in Denver. During a four-day stretch in March, it snowed so
heavily that not a single patient was able to visit him. Since all the appointments were missed, he did not
make any money for those four days, even though his normal expenses remained. Which of the following
characteristics of services is affecting Dr. Townes’ business?

A. Indivisibilit
y
B. Inseparability
C. Profitability
D. Heterogeneity
E. Perishability

78. A characteristic of a service is that it is _____, since it cannot be stored and must be consumed
simultaneously with its creation.

A. definite
B. separable
C. heterogeneous
D. tangible
E. perishable

79. Adam, a hairstylist at a salon in Seattle, styles his customers in various ways. His work looks different on
different people even though he has styled all of them. This unique character of a service that is unique for
every customer as it is individually produced is referred to as ______.

A. intangibility
B. inseparability
C. profitability
D. heterogeneity
E. perishability

80. Which is the largest services export of the United States, ranking behind only capital goods and industrial
supplies when all exports are counted?

A. Media and entertainment.

B. International tourism.
C. Healthcare.
D. Research and development.
E. Education services.

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81. How do the vast majority of services enter a foreign market?

A. Exporting.
B. Importing.
C. Licensing, franchising, or direct investment.
D. Through brokers.
E. Through agent intermediaries.

82. Marketers of consumer services face four kinds of barriers in the global marketplace. Which of the
following of these barriers is in force when a foreign market requires that services (such as banking or
insurance) originate within the country itself and not from outside sources?

A. Protectionism.
B. Controls on transborder data flows.
C. Protection of intellectual property.
D. Cultural requirements for adaptation.
E. Language translation barriers.

83. The Red Lobster seafood restaurant is considering opening branch operations in China. However, the
restaurant chain’s labor union has already pointed out a potential problem with this expansion. In China, it
is considered to be in bad taste to allow employees to collect tips for service. Since a great portion of a
typical wait-staff person’s compensation comes in the form of tips, the union would like to know how
employees would be compensated for this loss. The above example illustrates which of the following
barriers a consumer services marketer faces in a foreign market?

A. Protectionism.

84. Maxcare, an insurance firm based in California had difficulties expanding their operations to Asian
markets, as most of their target countries had strict regulations on transferring the details of the customers
among the different branches of the firm. The company had to obtain an approval from its customers before
sharing their personal information with their branches in other countries. Which of the following barriers is
affecting the services of the insurance firm in the above scenario?

A. Protectionism.

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85. A name, term, sign, symbol, design, or combination used worldwide to identify goods or services of one
seller and to differentiate them from those of competitors is called a(n) _____.

A. trademark
B. copymark
C. global brand
D. brand’s equity position
E. owner’s mark

86. The Norton group, a manufacturer of toiletries and cleaning products uses the name Cleanex, for most its
products in all of their international markets. The name has created a universal appeal for their products as
customers identify their products with the name. Hence, Cleanex can be regarded as a _____.

A. retailer’s brand
B. shelf brand
C. store brand
D. global brand
E. national brand

87. The _____ effect refers to the possibility that the place of manufacture may affect product or brand image.

A. plus or minus
B. polar
C. transfer
D. alteration
E. country-of-origin

88. A shoe manufacturer in Puerto Ria shipped his entire production to San Francisco and brought it back to his
home country to market it as “Made in the U.S.” He knew that people would prefer buying products made
in the U.S. rather than those that are domestically produced. The factor that is influencing the perception of
the customers in the above scenario is called _____.

A. host country effect

B. first-mover advantage
C. country-of-origin effect
D. copycat aversion
E. product homologation

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89. Consumers have broad but somewhat vague stereotypes about specific countries and specific product
categories that they judge “best.” Which of the following would not fit in the “best” stereotype scheme?

A. English tea
B. American chocolate
C. French perfume
D. Chinese silk
E. Jamaican rum

90. In Russia, products are divided into two categories— “ours” and “imported.” This is an example of:

A. cultural revisionism
B. ethnocentrism
C. conversion to capitalism
D. communist mentality
E. structural marketing orientation

Essay Questions

91. What is the impact of global competition on the business strategies in the marketplace?

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92. In the context of products and services for consumers, what is the importance of quality while marketing
products?

93. In the context of product adaptation, what is product homologation?

94. What are the various factors that influence product adaptation in new markets?

95. What is green marketing? How does it influence product development?

13-19
96. Everett Rogers noted that four crucial elements impact the diffusion of new ideas. What are those
elements?

97. List out the five characteristics of an innovation that assist in determining the rate of acceptance or
resistance of the market to a product.

98. What are the four barriers faced by consumer services marketers when they enter the global market?

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99. Define a global brand. How important are global brands?

100. Define Country-of-origin effect. How can a company overcome this effect?

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Chapter 13 Products and Services for Consumers Answer Key
True / False Questions

1. Global competition has put more power in the hands of the seller.

FALSE
Global competition has shifted the power in the marketplace from a sellers’ to a customers’ market, and
the latter have more choices because more companies are competing for their attention. More
competition and more choices put more power in the hands of the customer, and that of course drives
the need for quality.

AACSB: Analytic
Blooms: Understand
Difficulty Level: 1 Easy
Learning Objective: 13-01 The importance of offering a product suitable for the intended market
Topic: Quality

2. The cost and quality of the product are among the most important criteria by which purchases are made.
(p. 361)
TRUE
In most global markets, the cost and quality of a product are among the most important criteria by which
purchases are made. For consumer and industrial products alike, the reason often given for preferring
one brand over another is better quality at a competitive price.

AACSB: Analytic
Blooms: Remember
Topic: Quality

3. Consumer perceptions of a quality product often have more to do with market-perceived quality than
(p. 362) performance quality.

TRUE
Quality can be defined on two dimensions: market-perceived quality and performance quality. Both are
important concepts, but consumer perceptions of a quality product often have more to do with market-
perceived quality than performance quality.

AACSB: Analytic
Blooms: Remember
13-22
Learning Objective: 13-02 The importance of quality and how quality is defi ned
Topic: Quality

4. Though quality is always important in the consumer’s mind, in general, do not expect it to be a given.
(p. 363)
FALSE
Since the consumer expects performance quality to be a given, quality to the consumer is more than
compliance.

AACSB: Analytic
Blooms: Remember
Difficulty Level: 2 Medium
Topic: Quality

5. The decision to standardize or adapt a product is crucial in delivering quality.
(p. 363)
TRUE
Quality is not just desirable, but essential for success in today’s competitive global market, and the
decision to standardize or adapt a product is crucial in delivering quality.

AACSB: Analytic
Blooms: Remember
Topic: Quality

6. In many countries the term product homologation is used to describe the changes mandated by local

TRUE
In many countries, the term product homologation is used to describe the changes mandated by local

AACSB: Analytic
Blooms: Remember
Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation
Topic: Quality

13-23
7. Green marketing is the term frequently used to identify a marketer's efforts to reduce its dependency on
(p. 364) U.S. dollars as the standard for international exchange.

FALSE
Green marketing is a term used to identify concern with the environmental consequences of a variety of
marketing activities.

AACSB: Analytic
Blooms: Remember
Topic: Quality

8. The European Commission (EC) mandate requires a product to be evaluated on all significant
environmental effects throughout its life cycle, from manufacturing to disposal.

TRUE
The European Commission issued guidelines for ecolabeling that became operational in 1992. Under
the directive, a product is evaluated on all significant environmental effects throughout its life cycle,
from manufacturing to disposal—a cradle-to-grave approach.

AACSB: Analytic
Blooms: Remember
Topic: Quality

9. An important first step in adapting a product to a foreign market is to determine the degree of newness
as perceived by the intended market.

TRUE
An important first step in adapting a product to a foreign market is to determine the degree of newness
as perceived by the intended market.

AACSB: Analytic
Blooms: Remember
Topic: Products and Culture

13-24
10. Adaptation of a product to a new culture requires changes in most of the physical attributes of
the product.

FALSE
The meaning and value imputed to the psychological attributes of a product can vary among cultures
and are perceived as negative or positive. To maximize the bundle of satisfactions received and to create
positive product attributes rather than negative ones, adaptation of the nonphysical features of a product
may be necessary.

AACSB: Analytic
Blooms: Remember

11. From a sociological point of view, any idea perceived as new by a group of people is an innovation.
(p. 369)
TRUE
From a sociological viewpoint, any idea perceived as new by a group of people is an innovation.

AACSB: Analytic
Blooms: Remember

12. According to Everett Rogers, the element of time differentiates diffusion from other types of
(p. 370) communication research.

TRUE
Everett Rogers noted that “crucial elements in the diffusion of new ideas are an innovation, which is
communicated through certain channels, over time, among the members of a social system.” Rogers
continued with the statement that it is the element of time that differentiates diffusion from other types
of communications research.

AACSB: Analytic
Blooms: Remember

13-25
13. One of the three variables, which affect the rate of diffusion of a product, is the product’s degree of
perceived newness.

TRUE
At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived
newness, the perceived attributes of the innovation, and the method used to communicate the idea.

AACSB: Analytic
Blooms: Remember

14. The perceived attributes of an innovation is a variable that affects the rate of diffusion of a product.

TRUE

AACSB: Analytic
Blooms: Remember

15. In general, the rate of diffusion of a product is negatively related to its relative advantage.
(p. 371)
FALSE
The rate of diffusion of a product can be postulated as positively related to relative advantage,
compatibility, trialability, and observability but negatively related to complexity.

AACSB: Reflective thinking
Blooms: Understand

16. The newness of a product or brand introduced can be an important competitive advantage.

TRUE
The newness of the product or brand introduced can be an important competitive advantage. The
pioneer brand advantage often delivers long-term competitive advantages in both domestic and foreign
markets.

AACSB: Analytic
13-26
Blooms: Remember

17. The packaging component of the product component model consists of the physical product and all its
design and functional features.

FALSE
The core component consists of the physical product—the platform that contains the essential
technology—and all its design and functional features. The packaging component includes style
features, packaging, labeling, trademarks, brand name, quality, price, and all other aspects of a product’s
package.

AACSB: Analytic
Blooms: Remember
Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance

18. One of the core components in the product component model is the product platform.

TRUE
The core component of the product component model comprises the product platform that contains the
essential technology and all its design and functional features.

AACSB: Analytic
Blooms: Remember
Topic: Analyzing Product Components for Adaptation

19. According to the product component model, the instructions for using the product and the warranty of
the product are included under the packaging component.

FALSE
The support services component includes repair and maintenance, instructions, installation, warranties,
deliveries, and the availability of spare parts.

AACSB: Analytic
Blooms: Remember

13-27
20. One of the consistencies that marketers can look forward to when marketing products abroad is that
almost all labeling laws worldwide are essentially the same.

FALSE
Labeling laws vary from country to country and do not seem to follow any predictable pattern.

AACSB: Analytic
Blooms: Remember

21. In countries with low-literacy rates, the pictures and symbols on products are literally taken as
(p. 374) instructions and information.

TRUE
It is easy to forget that in low-literacy countries, pictures and symbols are taken literally as instructions
and information. Care must be taken to ensure that corporate trademarks and other parts of the
packaging component do not have unacceptable symbolic meanings.

AACSB: Analytic
Blooms: Remember

22. The support services component of the product component model contains such items as repair and
maintenance and availability of spare parts.

TRUE

AACSB: Analytic
Blooms: Remember

13-28
23. Services such as insurance and dry cleaning are classified as tangible.

FALSE
Products are often classified as tangible, whereas services are intangible. Automobiles, computers, and
furniture are examples of products that have a physical presence; Insurance, dry cleaning, hotel
accommodations, and airline passenger or freight service, in contrast, are intangible.

AACSB: Analytic
Blooms: Remember
Topic: Marketing Consumer Services Globally

24. Financial and legal services can not be regarded as a business service as they only provide services to
the consumers.

FALSE
A service can be marketed as both an industrial (business-to-business) and a consumer service,

depending on the motive of, and use by the purchaser. Financial services, hotels, insurance, legal
services, and others may each be classified as either a business or a consumer service.

AACSB: Analytic
Blooms: Understand

25. A majority of services enter foreign markets by licensing, franchising, or direct investment.

TRUE
The vast majority of services (some 85 percent) enter foreign markets by licensing, franchising, or direct
investment.

AACSB: Analytic
Blooms: Remember

13-29
26. Cultural barriers play a bigger role in services than in merchandise trade.

TRUE
Because trade in services frequently involves people-to-people contact, culture plays a much bigger role
in services than in merchandise trade.

AACSB: Analytic
Blooms: Understand

27. A single global approach is the best way to market a brand worldwide.
(p. 380)
FALSE
Ideally a global brand gives a company uniformly positive worldwide brand associations that enhance
efficiency and cost savings when introducing other products with the brand name, but not all companies
believe a single global approach is the best.

AACSB: Analytic
Blooms: Remember
Topic: Brands in International Markets

28. Brand image is at the very core of business identity and strategy.

TRUE
Brand image is at the very core of business identity and strategy.

AACSB: Analytic
Blooms: Remember

29. Products from developing countries have the highest quality image.

FALSE
Countries are also often stereotyped on the basis of whether they are industrialized, in the process of
industrializing, or developing. Industrialized countries have the highest quality image, and products
from developing countries generally encounter bias.

AACSB: Analytic
Blooms: Remember
13-30
Learning Objective: 13-05 Country-of-origin effects on product image

30. Effective advertising and proper positioning of products can help brands to ameliorate a less-than-
positive country stereotype.

TRUE
Brands effectively advertised and products properly positioned can help ameliorate a less-than-positive
country stereotype.

AACSB: Analytic
Blooms: Remember

Multiple Choice Questions

31. Which of the following is true regarding the impact of global competition on the business activities in
the marketplace?

A. It has shifted the focus in the marketplace from a consumer’s market to a seller’s market.
B. It has improved the financial position of domestic industries.
C. It has put more power in the hands of the customer.
D. It has shifted the focus away from the performance quality of a product.
E. It has limited the choices of the consumers.
The power in the marketplace is shifting from a sellers’ to a customers’ market, and the latter have more
choices because more companies are competing for their attention. More competition and more choices
put more power in the hands of the customer, and that of course drives the need for quality.

AACSB: Analytic
Blooms: Remember
Topic: Quality

13-31
32. Which of the following is the most important criterion for consumers while purchasing products?

A. Appearance
B. Size
C. Technology
D. Quality
E. Service
In most global markets, the cost and quality of a product are among the most important criteria by which
purchases are made. For consumer and industrial products alike, the reason often given for preferring
one brand over another is better quality at a competitive price.

AACSB: Analytic
Blooms: Remember
Topic: Quality

33. What are the two dimensions that help in defining the quality of a product of quality?

A. Product quality and process quality.

B. Market-perceived quality and performance quality.
C. Product quality and service quality.
D. Actual quality and assumed quality.
E. Absolute quality and relative quality.
Quality can be defined on two dimensions: market-perceived quality and performance quality.

AACSB: Analytic
Blooms: Remember
Topic: Quality

13-32
34. _____ is the term used to describe the changes mandated by local product and service standards.

A. Product localization

B. Product blending
C. Product standardization
D. Product dilution
E. Product homologation
A product may have to change in a number of ways to meet the physical or mandatory requirements of a
new market, ranging from simple package changes to total redesign of the physical core product. The
term used to describe the changes mandated by local product and service standards is product
homologation.

AACSB: Analytic
Blooms: Remember
Topic: Quality

35. Vital Health Products found out that they had to reduce the length of the tread in their treadmills sold in
(p. 362) China owing to the shorter legs of the average Chinese person. By doing this, Vital has achieved
product _____.

A. homologation
B. standardization
C. dilution
D. flexibilit
y
E. repositioning
A product may have to change in a number of ways to meet the physical or mandatory requirements of a
new market, ranging from simple package changes to total redesign of the physical core product. The
term used to describe the changes mandated by local product and service standards is product
homologation.

Blooms: Apply
Topic: Quality

13-33
36. A European chocolate manufacturer received several complaints from customers about the quality of its
product when it began selling them in a tropical country. The firm had to re-package its chocolate bars
in an extra plastic wrapper to protect it from the heat and dust. Which of the following factors in the
local market dictated product adaptation in the current scenario?


B. Economic requirements.
C. Political requirements.
E. Technological requirements.
Legal, economic, political, technological, and climatic requirements of the local marketplace often
dictate product adaptation.

Blooms: Apply
Topic: Quality

37. Booster bar is a popular brand of energy bars in Canada. The company sold these bars singly or in packs
of two in the South Asian markets, instead of their regular multiple-item packaging containing 10 or 20
bars to make it more affordable for the consumers. Which of the following requirements of the local
market is influencing product adaptation in the above scenario?


B. Political requirement.
C. Economical requirements.
D. Technological requirements.
E. Cultural requirements.
The less economically developed a market is, the greater degree of change a product may need for
acceptance. To make a purchase more affordable in low-income countries, the number of units per
package may have to be reduced from the typical quantities offered in high-income countries.

Blooms: Apply
Topic: Quality

13-34
38. A wine company had to market its products with a different name in a foreign market as it was
mandatory to translate the name in the local language. The factor that is influencing product adaptation
in the above scenario is _____.


C. technological requirements
E. economic requirements
dictate product adaptation. Laws that vary among countries usually set specific package sizes and safety
and quality standards.

Blooms: Apply
Topic: Quality

39. Adore cosmetics had to increase the SPF value of their sunscreen lotions marketed in the Middle East to
provide more protection against UV radiation. Which of the following factors is dictating product
adaptation in the above scenario?


C. Economic requirements.
E. Political requirements.
dictate product adaptation. Changes may also have to be made to accommodate climatic differences.

Blooms: Apply
Topic: Quality

13-35
40. Nuan, a television manufacturer in Korea, had to modify its televisions before introducing it to the
Zimbabwean markets, as the country did not have the skills to repair the product in case of a
malfunction. The local salesforce too, did not have the sufficient knowledge regarding the installation of
the product. The factor that is influencing product adaptation in the above scenario is ________.


C. political requirements
E. technological requirements

Blooms: Apply
Topic: Quality

41. A clothing company in Singapore which specialized in women’s clothing, had to modify its clothes
before introducing them to Iranian markets, to suit the needs of women in that country. Women in Iran
are expected to cover themselves completely. The company mostly used opaque material and provided
accessories like scarves. Which of the following factors is dictating product adaptation in the above
scenario?


C. Technological requirements.
D. Economic requirements.
E. Climatic requirements.

Blooms: Apply
Topic: Quality

13-36
42. _____ is a term used to identify concern with the environmental consequences of a variety of marketing
activities.

A. Greenhouse business

B. Hybrid business
C. Greenfield business
D. Green marketing
E. Alternative marketing

AACSB: Analytic
Blooms: Remember
Topic: Quality

43. HT motors is introducing a new technology in its cars to improve the mileage of the cars as well as to
reduce carbon emissions. The company is also taking measures to improve its production facilities in
order to reduce its carbon footprint. These measures employed by HT motors to meet the guidelines
issued by the government shows that the company is engaging in ________.

A. permission marketing

B. value-based marketing
C. green marketing
D. cause marketing
E. greenwashing

Blooms: Apply
Topic: Quality

13-37
44. Which of the following has been at the forefront of the “green movement”?
(p. 368)
A. The United States

B. Japan
C. Europe
D. OPEC countries
E. NAFTA countries
Europe has been at the forefront of the “green movement,” with strong public opinion and specific
legislation favoring environmentally friendly marketing and products.

AACSB: Analytic
Blooms: Remember
Topic: Quality

45. As part of the “green movement”, the European Commission has passed legislation to control all kinds
of packaging waste throughout the European Union. Two critical issues that affect product development
are the control of the packaging component of solid waste and _____.

A. variations in standards across different member countries

B. consumer demand for environmentally friendly products
C. government subsidies for greener technologies
D. availability of alternative energy resources for production
E. management of existing inventory of conventional energy products
The European Commission has passed legislation to control all kinds of packaging waste throughout the
European Union. Two critical issues that affect product development are the control of the packaging
component of solid waste and consumer demand for environmentally friendly products.

AACSB: Analytic
Blooms: Remember
Topic: Quality

13-38
46. Which of the following is a physical attribute of a product that is essential for its primary function?

A. Colors
B. Prices
C. Components
D. Designs
E. Sizes
A product’s physical attributes generally are required to create its primary function. Few changes to the
physical attributes of a product are required when moving from one culture to another. The
psychological features like color, design, size, brand name, and price have little to do with its primary
function, but are important in providing customer satisfaction.

AACSB: Analytic
Blooms: Understand

47. An important first step in adapting a product to a foreign market is to determine:

A. the degree of newness as perceived by the intended market.

B. the economic climate of the target market.
C. the advertising parallels with the domestic market.
D. the ability of a sales force to sell the product.
E. the compliancy to religious doctrine(s) in the foreign country.
An important first step in adapting a product to a foreign market is to determine the degree of newness
as perceived by the intended market. How people react to newness and how new a product is to a
market must be understood.

Blooms: Understand
Topic: Quality

13-39
48. From a sociological viewpoint, any idea perceived as new by a group of people is considered as a(n)
_____.

A. creation
B. adaptation
C. ideation
D. homologation
E. innovation
From a sociological viewpoint, any idea perceived as new by a group of people is an innovation.

AACSB: Analytic
Blooms: Remember

49. _____ is the process by which innovation spreads.

A. Diffusion
B. Filtering
C. Dissolution
D. Flighting
E. Cascading
Diffusion is the process by which innovation spreads and knowledge of this is helpful in developing a
successful product strategy.

AACSB: Analytic
Blooms: Remember

13-40
50. According to Everett Rogers, the goals of the diffusion researcher and the marketer are to shorten the
time lag between:

A. the dispatch of the product from the company and the time it takes to reach the customer.
B. the time that a budget is constructed and the time needed for the funds to reach the communication
channels.
C. initial investment and the profits obtained from those investments.
D. introduction of an idea or product and its widespread adoption.
E. introduction of an idea or product and when revisions can be made.
According to Everett Rogers, the goals of the diffusion researcher and the marketer are to shorten the
time lag between introduction of an idea or product and its widespread adoption.

AACSB: Analytic
Blooms: Remember

51. According to Everett Rogers, what is the element that differentiates diffusion from other types of
communications research?

A. Breakthrough innovation

B. Communications channels
C. Time
D. Social system
E. Government system
Everett Rogers states that it is the element of time that differentiates diffusion from other types of
communications research. The goals of the diffusion researcher and the marketer are to shorten the time
lag between introduction of an idea or product and its widespread adoption.

AACSB: Analytic
Blooms: Remember

13-41
52. Which of the following is considered to be one of the extraneous variables that affects the rate of
diffusion of an object?

A. The use of the internet in the diffusion process.

B. The age appearance of the innovation.
C. The number of marketing personnel dedicated to diffusion.
D. The method used to communicate the idea.
E. The shelf life of the diffusion object.

AACSB: Analytic
Blooms: Remember

53. Martin is comparing the characteristics of his company’s water filters with those that are already being
(p. 370) marketed in the local market. He realizes that there is lot of scope for his filters as they are functionally
more advanced, have longer life, and also can be marketed at a competitive price in these markets. The
characteristic of his product that will help in wide acceptance of his product is its _____.

A. trialability
B. compatibility
C. observability
D. relative advantage
E. complexity
There are five characteristics of an innovation that can assist in determining the rate of acceptance or
resistance of the market to a product. A product’s (1) relative advantage (the perceived marginal value
of the new product relative to the old), (2) compatibility (its compatibility with acceptable behavior,
norms, values, and so forth), (3) complexity (the degree of complexity associated with product use), (4)
trialability (the degree of economic and/or social risk associated with product use), and (5) observability
(the ease with which the product benefits can be communicated) affect the degree of its acceptance or
resistance.

Blooms: Apply

13-42
54. A product is said to be compatible if:
(p. 370)
A. it provides greater value to the consumers compared to competitors’ products.

B. the risk associated with using the product is low.
C. it is user friendly.
D. it offer clear functional benefits over other products.
E. it complies with the accepted norms, values, and culture of the local market.
resistance.

AACSB: Analytic
Blooms: Remember

55. Carolyn is interested in marketing her company’s diet products in Asia. She is studying the acceptable
behavior, norms, and values in Asian markets. Carolyn is studying _____.


B. compatibility
C. complexity
D. trialability
E. observability
resistance.

Blooms: Apply

13-43
56. A company focusing its efforts on making its new innovation more user-friendly is working on the
_____ of the product.


B. compatibility
C. complexity
D. trialability
E. observability
resistance.

AACSB: Analytic
Blooms: Understand

57. Mark Harmon has found that using his new digital camera is a snap. He did not even have to read the
instruction manual to determine how to turn the camera on, snap a digital picture, and export the picture
to his computer. The signs (symbols) on the camera body made it very clear what he was to do to
achieve digital photography success. Which of the following characteristics of Mark’s “new product”
made it easy for him to begin his digital experience?


B. compatibility
C. complexity
D. trialability
E. observability
resistance.

Blooms: Apply
13-44

58. Fiona asked her product manager for samples to give to potential consumers in Madrid, her new
European market. Fiona is trying to reduce the degree of economic and/or social risk, or _____
associated with product use.


B. compatibility
C. complexity
D. trialability
E. observability
resistance.

Blooms: Apply
Topic: Quality

59. A product’s _____, refers to the ease with which its benefits can be communicated to the customers.


B. compatibility
C. complexity
D. trialability
E. observability
resistance.

AACSB: Analytic
Blooms: Remember

13-45
60. Ingrid is developing promotional materials and product demonstrations to easily communicate the
benefits of her cleaning products. Ingrid is trying to enhance the _____ of her products.


B. compatibility
C. complexity
D. complexity
E. observability
In general, the rate of diffusion can be postulated as positively related to relative advantage,

Blooms: Apply

61. In general, the rate of diffusion can be postulated as negatively related to _____.


B. compatibility
C. trialability
D. complexity
E. observability
In general, the rate of diffusion can be postulated as positively related to relative advantage,

AACSB: Analytic
Blooms: Understand

13-46
62. Which of the following factors is mainly responsible for a perceptual bias when interpreting the
characteristics of a product?

A. Poor product knowledge.

B. Noise in the communication channel.
C. Market analyst’s self-reference criterion.
D. Multitude of competing products.
E. Market analyst’s intelligence quotient.
A market analyst’s self-reference criterion (SRC) may cause a perceptual bias when interpreting the
characteristics of a product. Thus, instead of evaluating product characteristics from the foreign user’s
frame of reference, the marketer might analyze them from his or her frame of reference, leading to a
misinterpretation of the product’s cultural importance.

AACSB: Analytic
Blooms: Remember

63. The success achieved by firms when they take their inventions to market is referred to as _____.

A. conversion-ability
B. product penetration
C. diffusion
D. marketization
E. mass customization
Conversion-ability is the success firms have when they take inventions to market. Three main factors
seem to favor conversion: patience, focus on a few important innovations, and experience.

AACSB: Analytic
Blooms: Remember

13-47
64. The product platform, design features, and functional features are all found in the _____ component of
the product, according to the product component model.

A. core
B. support
C. packaging
D. functional
E. global
technology—and all its design and functional features. It is on the product platform that product
variations can be added or deleted to satisfy local differences. Refer to Exhibit 13.2-Product Component
Model.

AACSB: Analytic
Blooms: Remember

65. Simone Francis is a specialist in product design. She is responsible for a product’s aesthetic as well as
functional appearance. With respect to the product component model, in which of the following
component categories would Simone’s talents most likely be used?

A. Core component.

variations can be added or deleted to satisfy local differences.

Blooms: Apply

13-48
66. If a company wished to alter a product’s platform so that the product could be manufactured in a variety
of forms, to meet local differences in five different foreign markets, the _____ of the product
component model would be in consideration.


D. global component
E. core component

Blooms: Understand

67. Omega appliances, a Korean company that manufactures kitchen appliances had to alter the design of its
chimneys to suit the needs of the consumers in its Japanese market. The Japanese preferred compact and
efficient appliances to fit their small kitchens. The component of the product that had to be altered in the
above scenario is the _____.

A. packaging component

B. functional component
C. core component
D. technical component
E. support services component

Blooms: Apply

13-49
68. If a company is altering the price of its product to compete with the local companies in the international
market, it is focusing on the _____ component of the product, according to the product component
model.

A. core
B. support
C. design
D. maintenance
E. packaging
The packaging component includes style features, packaging, labeling, trademarks, brand name, quality,
price, and all other aspects of a product’s package.

Blooms: Remember

69. Apple Computer had difficulties when it first entered the Japanese market with its Macintosh
computers. Some of the computers were returned unused after customers found the wrapping on the
instruction manual damaged. Though this would probably be no big deal in the U.S., it was certainly a
cause for concern in quality-conscious Japan. To fix the problem, Apple needed to concentrate on which
of the following components of the product component model?

A. Core component.

price, and all other aspects of a product’s package.

Blooms: Apply

13-50
70. Bagel’s foods had to change the labeling on their products to meet the specifications regarding
vegetarian and non-vegetarian foods, set by the government in the Japanese market. They also had to
mention the ingredients in Japanese to make it clear for the local customers. The component of the
product that is in focus in the above scenario is the _____.


D. design component
E. core component
price, and all other aspects of a product’s package. Labeling laws vary from country to country and do
not seem to follow any predictable pattern.

Blooms: Apply

71. According to the product component model, installation, repair and maintenance, deliveries, and
warranties are all part of the _____ component of the product.

A. core
B. support services
C. packaging
D. functional
E. global

AACSB: Analytic
Blooms: Remember

13-51
72. In some countries, maintenance of automobiles is not the norm. Cars are not repaired until they break
down. Since the consumer is automatically angry with the manufacturer when something goes wrong
with the car, repair and maintenance has become a concern of the various automobile manufacturers in
this market. In which of the following components of the product component model would the
management need to make improvements if problems such as the one above are to be solved?

A. Core component.

B. Functional component.
D. Support services component.
E. Design component.
deliveries, and the availability of spare parts. Refer to Exhibit 13.2-Product Component Model.

Blooms: Apply

73. A Korean electronics company had to add detailed instructions regarding the repair and replacement of
its product to make it easy for the local consumers to maintain it. Which of the following components of
the product is being altered in the given scenario?

A. Support services component.

B. Design component.
C. Core component.
D. Packaging component.
E. Functional component.
deliveries, and the availability of spare parts. The literacy rates and educational levels of a country may
require a firm to change a product’s instructions.

Blooms: Apply

13-52
74. The washing machines marketed by Taichi failed in Asian markets as those countries lacked the skills
necessary to repair and maintain their products. Also, the washing machines spares available in local
markets were not compatible with these machines. This product failure was a result of lack of attention
by the company to the _____ component of the product.

A. core
B. design
C. packaging
D. support services
E. global

AACSB: Analytic
Blooms: Remember

75. Insurance, dry cleaning, and hotel accommodations have intrinsic value resulting from a process, a
(p. 381) performance, or an occurrence that only exists while it is being created. Which of the following
characteristics of services best matches to the above?

A. Intangibility.
B. Inseparability.
C. Profitability.
D. Heterogeneity.
E. Perishability.
Insurance, dry cleaning, hotel accommodations, and airline passenger or freight service, are intangible
and have intrinsic value resulting from a process, a performance, or an occurrence that exists only while
it is being created.

AACSB: Analytic
Blooms: Understand

13-53
76. Because a service is individually produced and is virtually unique, the service is said to have _____.

A. intangibility
B. inseparability
C. profitability
D. heterogeneity
E. perishability
A service is heterogeneous in that it is individually produced and is thus unique.

AACSB: Analytic
Blooms: Understand

77. Dr. Mark Townes is a dentist practicing in Denver. During a four-day stretch in March, it snowed so
heavily that not a single patient was able to visit him. Since all the appointments were missed, he did not
make any money for those four days, even though his normal expenses remained. Which of the
following characteristics of services is affecting Dr. Townes’ business?

A. Indivisibilit
y
B. Inseparability
C. Profitability
D. Heterogeneity
E. Perishability
A service is perishable in that once created it cannot be stored but must be consumed simultaneously
with its creation.

Blooms: Apply

13-54
78. A characteristic of a service is that it is _____, since it cannot be stored and must be consumed
(p. 387) simultaneously with its creation.

A. definite
B. separable
C. heterogeneous
D. tangible
E. perishable
Services are perishable in that once created it cannot be stored but must be consumed simultaneously
with its creation.

AACSB: Analytic
Blooms: Remember

79. Adam, a hairstylist at a salon in Seattle, styles his customers in various ways. His work looks different
on different people even though he has styled all of them. This unique character of a service that is
unique for every customer as it is individually produced is referred to as ______.

A. intangibility
B. inseparability
C. profitability
D. heterogeneity
E. perishability
A service is heterogeneous in that it is individually produced and is thus unique.

AACSB: Analytic
Blooms: Understand

13-55
80. Which is the largest services export of the United States, ranking behind only capital goods and
industrial supplies when all exports are counted?

A. Media and entertainment.

B. International tourism.
C. Healthcare.
D. Research and development.
E. Education services.
International tourism is by far the largest services export of the United States, ranking behind only
capital goods and industrial supplies when all exports are counted.

AACSB: Analytic
Blooms: Remember

81. How do the vast majority of services enter a foreign market?

A. Exporting.
B. Importing.
C. Licensing, franchising, or direct investment.
D. Through brokers.
E. Through agent intermediaries.
The vast majority of services (some 85 percent) enter foreign markets by licensing, franchising, or direct
investment.

AACSB: Analytic
Blooms: Remember

13-56
82. Marketers of consumer services face four kinds of barriers in the global marketplace. Which of the
following of these barriers is in force when a foreign market requires that services (such as banking or
insurance) originate within the country itself and not from outside sources?

A. Protectionism.
Four kinds of barriers face consumer services marketers in this growing sector of the global
marketplace: protectionism, controls on transborder data flows, protection of intellectual property, and
cultural requirements for adaptation.

AACSB: Analytic
Blooms: Understand

83. The Red Lobster seafood restaurant is considering opening branch operations in China. However, the
restaurant chain’s labor union has already pointed out a potential problem with this expansion. In China,
it is considered to be in bad taste to allow employees to collect tips for service. Since a great portion of a
typical wait-staff person’s compensation comes in the form of tips, the union would like to know how
employees would be compensated for this loss. The above example illustrates which of the following
barriers a consumer services marketer faces in a foreign market?

A. Protectionism.
Because trade in services frequently involves people-to-people contact, culture plays a much bigger role
in services than in merchandise trade.

Blooms: Apply

13-57
84. Maxcare, an insurance firm based in California had difficulties expanding their operations to Asian
(p. 388) markets, as most of their target countries had strict regulations on transferring the details of the
customers among the different branches of the firm. The company had to obtain an approval from its
customers before sharing their personal information with their branches in other countries. Which of the
following barriers is affecting the services of the insurance firm in the above scenario?

A. Protectionism.
Four kinds of barriers face consumer services marketers in this growing sector of the global
marketplace: protectionism, controls on transborder data flows, protection of intellectual property, and
cultural requirements for adaptation.

Blooms: Apply

85. A name, term, sign, symbol, design, or combination used worldwide to identify goods or services of one
seller and to differentiate them from those of competitors is called a(n) _____.

A. trademark
B. copymark
C. global brand
D. brand’s equity position
E. owner’s mark
A global brand is defined as the worldwide use of a name, term, sign, symbol (visual and/or auditory),
design, or combination thereof intended to identify goods or services of one seller and to differentiate
them from those of competitors.

AACSB: Analytic
Blooms: Remember

13-58
86. The Norton group, a manufacturer of toiletries and cleaning products uses the name Cleanex, for most
its products in all of their international markets. The name has created a universal appeal for their
products as customers identify their products with the name. Hence, Cleanex can be regarded as a
_____.

A. retailer’s brand

B. shelf brand
C. store brand
D. global brand
E. national brand
them from those of competitors.

Blooms: Apply

87. The _____ effect refers to the possibility that the place of manufacture may affect product or brand
image.

A. plus or minus

B. polar
C. transfer
D. alteration
E. country-of-origin
Country-of-origin effect (COE) can be defined as any influence that the country of manufacture,
assembly, or design has on a consumer’s positive or negative perception of a product. A company
competing in global markets today manufactures products worldwide; when the customer becomes
aware of the country of origin, there is the possibility that the place of manufacture will affect product
or brand images.

AACSB: Analytic
Blooms: Remember

13-59
88. A shoe manufacturer in Puerto Ria shipped his entire production to San Francisco and brought it back to
his home country to market it as “Made in the U.S.” He knew that people would prefer buying products
made in the U.S. rather than those that are domestically produced. The factor that is influencing the
perception of the customers in the above scenario is called _____.

A. host country effect

B. first-mover advantage
C. country-of-origin effect
D. copycat aversion
E. product homologation
assembly, or design has on a consumer’s positive or negative perception of a product. Stereotyping is
typically product specific and may not extend to all categories of products from specific countries.

Blooms: Apply

89. Consumers have broad but somewhat vague stereotypes about specific countries and specific product
categories that they judge “best.” Which of the following would not fit in the “best” stereotype scheme?
A. English tea

B. American chocolate
C. French perfume
D. Chinese silk
E. Jamaican rum
Consumers have broad but somewhat vague stereotypes about specific countries and specific product
categories that they judge “best”: English tea, French perfume, Chinese silk, Italian leather, Japanese
electronics, Jamaican rum, and so on. American chocolate is not one of them.

AACSB: Analytic
Blooms: Apply

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90. In Russia, products are divided into two categories— “ours” and “imported.” This is an example of:

A. cultural revisionism

B. ethnocentrism
C. conversion to capitalism
D. communist mentality
E. structural marketing orientation
Ethnocentrism can also have country-of-origin effects; feelings of national pride—the “buy local”
effect, for example—can influence attitudes toward foreign products. Russians prefer fresh, homegrown
food products but imported clothing and manufactured items.

AACSB: Analytic
Blooms: Understand

Essay Questions

91. What is the impact of global competition on the business strategies in the marketplace?

Global competition is placing new emphasis on some basic tenets of business. It is shortening product
life cycles and focusing on the importance of quality, competitive prices, and innovative products. The
power in the marketplace is shifting from a sellers’ market to a customers’ market, and the latter have
more choices because more companies are competing for their attention. More competition and more
choices put more power in the hands of the customer, and that of course drives the need for quality.

AACSB: Analytic
Blooms: Remember
Topic: Quality

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92. In the context of products and services for consumers, what is the importance of quality while marketing
products?

Quality can be defined on two dimensions: market-perceived quality and performance quality. The
market-perceived quality attributes are embedded in the total product, that is, the physical or core
product and all the additional features the consumer expects. Consumer perceptions of a quality product
often have more to do with market-perceived quality than performance quality. But, since the consumer
expects performance quality to be a given, quality to the consumer is more important than compliance.

AACSB: Analytic
Blooms: Remember
Topic: Quality

93. In the context of product adaptation, what is product homologation?

Product homologation is a term used to describe the changes mandated by local product and service
standards. A product may have to change in a number of ways to meet the physical or mandatory
requirements of a new market ranging from simple package changes to total redesign of the physical
core product.

AACSB: Analytic
Blooms: Remember
Topic: Quality

94. What are the various factors that influence product adaptation in new markets?

dictate product adaptation. The less economically developed a market is, the greater degree of change a
product may need for acceptance.

AACSB: Analytic
Blooms: Remember
Topic: Quality

13-62
95. What is green marketing? How does it influence product development?

marketing activities. It is a quality issue of growing importance all over the world. Two critical issues
that affect product development are the control of the packaging component of solid waste and
consumer demand for environmentally friendly products.

AACSB: Analytic
Blooms: Remember
Topic: Quality

96. Everett Rogers noted that four crucial elements impact the diffusion of new ideas. What are those
elements?

Everett Rogers noted that “crucial elements in the diffusion of new ideas are (1) an innovation, (2)
which is communicated through certain channels, (3) over time, (4) among the members of a social
system.” Rogers continued with the statement that it is the element of time that differentiates diffusion
from other types of communications research.

AACSB: Analytic
Blooms: Remember

97. List out the five characteristics of an innovation that assist in determining the rate of acceptance or
resistance of the market to a product.

The five characteristics of an innovation that help to determine the rate of acceptance or resistance of
the market to a product are: (1) relative advantage (the perceived marginal value of the new product
relative to the old), (2) compatibility (its compatibility with acceptable behavior, norms, values, and so
forth), (3) complexity (the degree of complexity associated with product use), (4) trialability (the degree
of economic and/or social risk associated with product use), and (5) observability (the ease with which
the product benefits can be communicated) In general, the rate of diffusion can be postulated as
positively related to relative advantage, compatibility, trialability, and observability but negatively
related to complexity.

AACSB: Analytic
Blooms: Remember
13-63

98. What are the four barriers faced by consumer services marketers when they enter the global market?

The barriers to consumer services are (a) protectionism, (b) controls on transborder data flows, (c)
protection of intellectual property, and (d) cultural requirements for adaptation.

AACSB: Analytic
Blooms: Remember

99. Define a global brand. How important are global brands?

them from those of competitors. The importance of a brand name, even in the nonprofit sector, is
unquestionable. Companies with strong brands strive to use those brands globally. Even perceived
“globalness” can lead to increases in sales. Ideally, a global brand gives a company uniformly positive
worldwide brand associations that enhance efficiency and cost savings when introducing other products
with the brand name.

AACSB: Analytic
Blooms: Remember

100. Define Country-of-origin effect. How can a company overcome this effect?

assembly, or design has on a consumer’s positive or negative perception of a product. A company
competing in global markets today manufactures products worldwide; when the customer becomes
aware of the country of origin, there is the possibility that the place of manufacture will affect product
or brand images. Once the market gains experience with a product, negative country stereotypes can be
overcome. Moreover, country stereotyping or “nation equity” can be overcome with good marketing.

AACSB: Analytic
Blooms: Remember

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Products and Services For Consumers: True / False Questions

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Chapter 13

Products and Services for Consumers

True / False Questions

A. Product quality and process quality.

A. The United States

A. variations in standards across different member countries

A. the degree of newness as perceived by the intended market.

A. The use of the internet in the diffusion process.

A. it provides greater value to the consumers compared to competitors’ products.

A. Poor product knowledge.

A. support services component

A. support services component

A. Support services component.

A. Media and entertainment.

A. host country effect

True / False Questions

A service can be marketed as both an industrial (business-to-business) and a consumer service,

Brand image is at the very core of business identity and strategy.

Multiple Choice Questions

A. Product quality and process quality.

A. Product localization

A. Legal requirements.

A. Legal requirements.

A. legal requirements

A. Legal requirements.

A. legal requirements

A. Legal requirements.

A. Greenhouse business

A. permission marketing

A. The United States

A. variations in standards across different member countries

A. the degree of newness as perceived by the intended market.

A. Breakthrough innovation

A. The use of the internet in the diffusion process.

A. it provides greater value to the consumers compared to competitors’ products.

A. relative advantage

A. relative advantage

A. relative advantage

A. relative advantage

A. relative advantage

A. relative advantage

A. relative advantage

A. Poor product knowledge.

A. Core component.

A. support services component

A. packaging component

A. Core component.

A. support services component

A. Core component.

A. Support services component.

A service is heterogeneous in that it is individually produced and is thus unique.

A service is heterogeneous in that it is individually produced and is thus unique.

A. Media and entertainment.

A. retailer’s brand

A. plus or minus

A. host country effect

A. English tea

A. cultural revisionism

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