Deck 18: International Marketing in the Decade Ahead

Question 1

Consumers globally who are considered to be at the bottom of the pyramid (BOP) have been generally overlooked by international firms because:

A)They have high mortality rates due to increased susceptibility to disease
B)They often have no fixed abode and are difficult to reach
C)They live in regions characterised by political stability
D)All of the above
E)Options B and C only

Answer 1

D

Question 2

In what ways may a firm need to adjust its Western management approach when entering emerging markets?

Answer 2

Leaders in emerging markets have a preference for theories popularised by marketing gurus from Western developed countries, despite the fact that these theories have not been validated or tested in emerging markets. Many business practices are influenced by indigenous cultural considerations. If only Western management techniques are expected or taught, it can be directly threatening to many local business owners because it calls into question a number of successful local business practices, such as reliance on networks, and challenges the basis on which successful family businesses have evolved. Companies that develop strategies to take into account local markets' unique conditions, and do not stereotype a market based on Western approaches, are more likely to succeed.

Question 3

Which of the following is NOT a common economic constraint in emerging markets?

A)Disproportionate income spread
B)Declines in terms of trade
C)Inflation and hyper-inflation
D)Foreign currency shortages
E)Abundance of bureaucracy and lack of transparency

Answer 3

E

Question 4

Because BOP consumers' incomes are low, there is not a sustainable amount of spending by these consumers.

Question 5

Which of the following is a key prerequisite for a fast-moving consumer goods firm to successfully enter an emerging market?

A)Rapid urbanisation
B)Infrastructure such as energy and transportation
C)Steady relationships with key government officials
D)Understanding the MOP and BOP
E)]A proportionate income distribution in the market

Question 6

Sources of market growth in the coming decade is expected to come from the BRICS group. Which countries are the members of this group?

A) Britain, Russia, Ireland, Canada and Spain
B) Brazil, Romania, Indonesia, Chile and South Korea
C) Bolivia, Rwanda, Iran, Czech Republic and Slovakia
D) Brazil, Russia, India, China and South Africa
E) Belarus, Russia, Iran, China and South Korea

Question 7

What are the key differences between consumers in the MOP compared with consumers in the BOP?

Question 8

It is never necessary for international marketers to develop relationships with governments at the local level.

Question 9

Discuss the benefits and shortcomings of globalisation. How does it differ for developed countries compared with emerging countries?

Question 10

Adopting a market orientation has resulted in many developing countries achieving lower income disparities between the 'haves' and the 'have nots'.

Question 11

Some of the reasons why firms from developed countries have tended to focus firstly on other developing countries when expanding internationally include:

A)They were easier to do business with
B)From a buyer perspective the country of origin effect was smaller
C)They were easier to understand
D)From a supply perspective, the psychic distance was less
E)All of the above

Question 12

Traditionally, the basis for international market segmentation has been cultural groupings.

Question 13

The two main growth segments in emerging markets are the MOP and the SOP.

Question 14

Some of the benefits of globalisation include:

A)It enables countries to focus on what they do best
B)It creates cheaper goods by outsourcing/offshoring elements of production and other parts of the value chain to lower cost countries
C)It is championed by developed countries who stand to benefit most from it
D)All of the above
E)Options A and B only

Question 15

Historically the focus of international marketing has been on:

A)Developing customer relationship management systems
B)Creating networks in international markets
C)Corporate and social responsibility
D)Identifying and segmenting markets that have customers with a capacity to consume
E)All of the above

Question 16

Firms that currently cater to the BOP argue that to do it well a firm needs to:

A) take into account local markets' unique conditions.
B) consider the market in a holistic way.
C) use Eastern management methods and theories in their approach.
D) focus on a non-customized approach.
E) none of the above.

Question 17

Rapid urbanisation in developing countries has led to:

A) an increased need for perishable consumer goods.
B) lower prices being charged for luxury items.
C) increased availability of sources of electricity and fuel.
D) a constantly growing demand for accommodation.
E) none of the above.

Question 18

The economic shocks during the past few years, starting with the global financial crisis and the resulting global recession, have resulted in:

A)Lower levels of government debt
B)A reliance on the private sector to stimulate demand
C)A greater move towards globalisation and 'buy-global'
D)A return to protectionism by governments
E)All of the above

Question 19

At least 15-25 % of the population in Russia is now considered to be middle class.

Question 20

The most commonly cited political factor on whether a firm will invest in an international market is:

A)Lack of legal protection for consumers
B)Political instability
C)Remnants of colonial inequity
D)Poor governance
E)Corruption and weak legal systems

Question 21

________ is considered to be the most challenging task for managers at the BOP, particularly those working for MNEs.

A)Pricing
B)Distribution
C)Promotion
D)Product development
E)Market research

Question 22

Which of the following statements about products in the BOP market is FALSE?

A)Consumers make an effort to look for new or alternative products in the market-place
B)Consumers prefer to purchase products at local shops
C)Units of products for purchase are usually smaller
D)Expenditure on non durable goods accounts for a high percentage of income
E)There are significant perceived differences between authentic and pirated products

Question 23

When accessing suitable respondents for research in developing country markets, which of the following issues may arise?

A)Accessing the networks to which they belong
B)Ascertaining the reliability of secondary information
C)Discovering the actual unit of decision-making
D)All of the above
E)Options A and C only

Question 24

The basic concern for consumers in BOP marketplaces is to:

A)Conform to group expectations and norms
B)Satisfy physiological needs in the best way possible
C)Understand the safety requirements for consumer products
D)Ensure ecological best practices are being met
E)Find products at the lowest price

Question 25

Some of the difficulties in obtaining primary data in emerging countries include:

A)Mistrust of strangers
B)Lack of readily available and current data such as census reports and industry updates
C)Unwillingness of respondents to answers questions that they perceive to be personal or private
D)All of the above
E)Options A and C only

Question 26

Which of the following is NOT a characteristic of BOP markets?

A)The informal economy employs more people than the formal economy
B)Women have the strongest direct influence on household purchasing decisions
C)Infrastructure tends to be unreliable
D)Urban consumers differ in the needs from rural consumers
E)Demographics are skewed towards a younger age profile

Question 27

Difficulties in obtaining secondary data in emerging countries include:

A)The different classifications and definitions used in the available data
B)The falsifying of statistics by governments in order to attract investments
C)Unavailability of data such as census reports and industry updates
D)All of the above
E)Options A and B only

Question 28

What is commonly identified as the main route or mechanism for becoming MOP?

A)Government assistance
B)Family connections
C)Employment type
D)Growing older
E)Education

Question 29

The key economic variables that define the MOP and have an impact on MOP consumers' lives are:

A)Debt levels, inflation, interest rates
B)Interest rates, inflation, asset ownership
C)Source of income, inflation, asset ownership
D)Currency exchange rates, national debt levels, balance of payments
E)Source of income, asset ownership, house ownership

Question 30

Disproportionate income distribution is a common challenge in developed markets.

Question 31

Concept equivalence is at risk in developing markets because of the:

A)Different measurement scales used in developing countries compared with developed countries
B)Wide cultural and economic disparity between the researcher and the respondent
C)Greater dependence of the informal economy
D)Dearth of familiarity with research among subjects in these markets
E)Attitudes of the respondents to the conduct of research

Question 32

Which of the following variables is often regarded as the most accurate determination of social class?

A)Occupation
B)Value orientations
C)Interactions
D)Personal performance
E)Possession

Question 33

Emerging market consumers are exposed to a variety of environmental challenges that influence their purchase decision which include:

A)Corruption
B)Unemployment
C)Lack of income
D)All of the above
E)Options A and C only

Question 34

A key form of migration that takes place in emerging markets is regional and international migration, which involves skilled labour migrating to the developed countries.

Question 35

The macro-environment provides firms with many opportunities and threats in international marketing. Discuss the constraints these factors present to firms when looking to enter emerging markets.

Question 36

Laws governing intellectual property protection are lacking and unenforced in developing countries.

Question 37

Research studies in emerging markets may be restricted to convenience sampling because of:

A)The lack of street directories and telephone directories
B)The isolation of villages and towns
C)The unreliable nature of the transport services available
D)All of the above
E)Options A and B only

Question 38

Semicommercial or subsistence-oriented activities are the basis for:

A) burial societies.
B) modern social networks.
C) collective labour groups.
D) village development groups.
E) non-traditional community hierarchy systems.

Question 39

The three segments that make up the middle of the pyramid in Africa are known as:

A)Working class, lower middle class, upper class
B)Rural workers, regional workers, urban workers
C)Lower class, middle class, upper class
D)Blue collar workers, white collar workers, working families
E)Lower middle class, floating class, upper middle class

Question 40

Research by Chikweche and Fletcher (2012) found that it was necessary to enhance product ________ and ________ in BOP markets.

A)Affordability; cultural significance
B)Essentiality; value-added features
C)Availability; desirability
D)Accessibility; affordability
E)Basic needs; discount pricing

Question 41

What are the key product decisions a firm needs to make when entering a BOP market?

Question 42

What can firms do to manage the challenge of communicating with consumers in BOP segments?

A)Ensure that in-store promotions are culturally sensitive and appropriate
B)Increase television and radio advertising to reach a mass audience
C)Use lobbying tools to influence governments and other key stakeholders
D)Shift to below the line direct marketing activities such as mobile sampling
E)All of the above

Question 43

In emerging markets, individual consumer behaviour is influenced by lack of participation in social networks so that consumers conform to the group norms.

Question 44

BOP consumers tend to have a 'just in time' philosophy regarding purchases.

Question 45

Promotion activities and branding are important influencers of purchase, although their role is becoming less important in BOP markets.

Question 46

Consumers in BOP markets prefer to shop in smaller stores with more limited selections.

Question 47

Outline the promotional approach a FMCG firm could take in Zimbabwe. Explain why this approach would be appropriate.

Question 48

Discuss the challenges a firm would face when undertaking market research in developing countries.

Question 49

Consumer behaviour in BOP markets differs greatly to developed markets. Discuss these differences and explain how a firm that distributes clothing may need to adjust their marketing mix.

Question 50

The most effective pricing approach in BOP markets is:

A)Low margins, low quality
B)High margins, low quality
C)Low margins, high volumes
D)High margins, low volumes
E)None of the above

Question 51

The availability of new or alternative products is not important to consumers in BOP markets.

Question 52

Western management theories should override indigenous cultural considerations when undertaking international marketing.

Question 53

The influence of social networks as a means of interaction between the consumers and firms is very important in emerging markets.

Question 54

Price is the most important consideration for consumers in BOP markets.

Question 55

In emerging markets, relationships and networks become more critical due to greater levels of uncertainty and shocks in the environment.

Question 56

Children do not have much influence in purchase decisions in BOP markets.

Question 57

In Africa, the use of road shows as a promotional tool has become widespread as a vehicle for firms to reach out to BOP markets.

Question 58

What the characteristics of the BOP market?

Question 59

Which of the following add cost to the distribution channels in BOP markets?

A)Weak distribution infrastructure
B)Poor transport networks
C)Lack of telecommunication
D)Lack of storage facilities
E)All of the above

Question 60

How may a firm tailor its marketing mix in emerging markets? Examine each of the 4Ps in your discussion.