Deck 14: Products and Services for Businesses

Question 1

George Howard's company has just invented a product that will reduce the time it takes to construct a new home by one-third. However, his company's product is not doing well in third world countries. The reason is probably that labor-saving features are of little importance when time has limited value and labor is plentiful.

Answer 1

True
Explanation: Standard quality requirements of industrial products sold in the U.S. market that command commensurately higher prices may be completely out of line for the needs of the less developed markets of the world. Labor-saving features are of little importance when time has limited value and labor is plentiful.

Question 2

Perhaps the most significant environmental factor affecting the international market for industrial goods and services is the degree of industrialization.

Answer 2

True
Explanation: Perhaps the most significant environmental factor affecting the international market for industrial goods and services is the degree of industrialization.

Question 3

A country is able to leap several stages of economic development by using technology as economic leverage.

Answer 3

True
Explanation: An important approach to grouping countries is on the basis of their ability to benefit from and use technology, particularly now that countries are using technology as economic leverage to leap several stages of economic development in a very short time.

Question 4

There is agreement between the U.S. and the European Union to mutually accept one another's standards in sectors such as telecommunications, medical devices, electromagnetic compatibility, electrical safety, recreation craft, and pharmaceuticals.

Question 5

Derived demand can be defined as demand that comes from the psychological aspects of market forces.

Question 6

At present, there are generally accepted universal standards for industrial products around the world.

Question 7

One of the trends that have spurred the demand for technologically advanced products is the disintegration of the Soviet empire.

Question 8

The U.S. Department of Commerce does not mandate the use of the metric system unless your company wants to sell something to the U.S. government; all sellers to this market must use metric.

Question 9

Good quality, as perceived by highly industrialized and less-industrialized countries, is basically the same.

Question 10

For firms producing products and services for industrial markets, a chief reason for venturing abroad is the prospect of high profits with little risk.

Question 11

The perception of quality rests solely with the quality inspector.

Question 12

For managers selling capital equipment and big-ticket industrial services, understanding the concept of derived demand is absolutely fundamental to their success.

Question 13

ISO 9000 standards apply to specific products.

Question 14

One of the ways that an industrial firm can manage against the inherent volatility of the industrial sector is to maintain broad product lines.

Question 15

With respect to Rostow's five-stage model of economic development, countries in Stage 5 (the age of mass consumption) are mostly service economies.

Question 16

Extreme variations in climate create problems in designing equipment that is universally operable.

Question 17

Recent studies have demonstrated that perceptions of industrial product quality can vary across per capital income levels.

Question 18

With respect to Rostow's five-stage model of economic development, in Stage 1 (the traditional society), the most important industrial demand is associated with labor.

Question 19

For many industrial products, the revenue from associated services exceeds the revenue from the products themselves.

Question 20

An important trend that has spurred the demand for technologically advanced products is worldwide popularity of the Xbox video game system.

Question 21

A company Web site is the most important vehicle for selling products, reaching prospective customers, and marketing in most countries.

Question 22

Mary is a new international sales rep for an industrial supply company. She will learn that the inherent nature of industrial goods and the sameness in motive and behavior among business customers create a market where product and marketing mix _____ are commonplace.

A) customization
B) localization
C) standardization
D) simplification
E) regulations

Question 23

In Stage 2 of Rostow's five-stage model of economic growth, manufacturing is beginning and primary needs are related to infrastructure development. Which of the following countries would be characterized as being in this stage of economic development?

A) Russia
B) Eastern European countries
C) South Korea
D) Czech Republic
E) Vietnam

Question 24

The first and foremost characteristic of industrial goods markets is the motive of the buyer: to make a profit.

Question 25

Along with industrial goods, the most rapidly growing sector of U.S. international trade today consists of:

A) industrial products.
B) consumer products.
C) computer products.
D) business services.
E) governmental services.

Question 26

For managers selling capital equipment and big-ticket industrial services, understanding the concept of _____ demand is absolutely fundamental to their success.

A) kinked
B) sliding
C) multiple
D) derived
E) postponed

Question 27

Derived demand can be defined as demand:

A) that is derived from supply.
B) that is matched to consumer wants and needs.
C) dependent on another source.
D) that is volatile.
E) for a basic good wanted for its own sake.

Question 28

Although important in most countries, trade shows serve a much more important role in the United States.

Question 29

Why are German and Japanese firms generally better at managing market volatility than American firms?

A) Their emphasis is on beating competitors.
B) They value employees and stability very highly.
C) They maintain limited product lines.
D) They reduce prices faster and raise advertising expenditures during booms.
E) They consider market share as a strategic goal.

Question 30

With respect to industrial demand, which of the following best characterizes the "traditional society" described in Stage 1 of Rostow's five-stage model of economic development?

A) A service economy is on the horizon.
B) The important industrial demand is associated with natural resources extraction.
C) Primary needs are related to infrastructure development.
D) Manufacturing of both semidurable and nondurable consumer goods begins.
E) The focus in on low-cost manufacturing of a variety of consumer and some industrial goods.

Question 31

Which of the following is a factor that exacerbates the volatility in demand in industrial markets?

A) Professional buyers tend to act in concert.
B) Derived demand decelerates changes in markets.
C) There are small, noncyclical swings in demand inherent in industrial markets.
D) Experienced purchasers tend to act independently.
E) Inelastic demand accelerates changes in markets.

Question 32

Two basic factors account for the market similarities among industrial goods customers. One factor is the motive or intent of industrial customers is the same. The other factor accounting for the similarity among industrial goods customers is:

A) the inherent nature of the product.
B) the customer is seeking satisfaction.
C) the government influence over design specifications.
D) the tie to services.
E) the perishability of the product.

Question 33

If a country has reached an economic development level where there is a focus on manufacturing of both semidurable and nondurable consumer goods and goods demanded relate to equipment and supplies to support manufacturing, which of the following stages of Rostow's five-stage model of economic growth is the country in?

A) The traditional society
B) Drive to maturity
C) Preconditions for takeoff
D) Takeoff
E) The age of mass consumption

Question 34

Demand in industrial markets is different from that in consumer markets. All of the following are factors that differentiate the industrial market from the consumer market EXCEPT:

A) demand is more volatile in the industrial market.
B) stages in industrial development affect demand for industrial products.
C) stages in economic development affect demand for industrial products.
D) industrial products are always more expensive than consumer products.
E) the level of technology of products and services makes their sale more appropriate in some countries than others.

Question 35

Blue Cross is now selling HMO services to American companies operating in Mexico. In this case, Blue Cross is referred to as a client follower.

Question 36

Many reasons for marketing consumer products and services abroad match with those for marketing industrial goods abroad. However, there is one important additional reason for marketing industrial goods abroad that does not apply to the consumer market. What is that reason?

A) Avoiding inflationary pressures domestically
B) Making as much profit as possible
C) Dampening the natural volatility of industrial markets
D) Meeting foreign competitors in their home markets
E) Setting up situations where strategic alliance opportunities might be realized

Question 37

Which of the following is, perhaps, the most significant environmental factor affecting the international market for industrial goods and services?

A) Foreign exchange
B) Political conditions
C) The degree of industrialization
D) The level of competition
E) Inflation

Question 38

According to a recent study of international users of heavy construction equipment, next to the manufacturer's country of origin, quick delivery of replacement parts was of major importance in purchasing construction equipment.

Question 39

Which of the following statements regarding standardization versus adaptation in the industrial market is most correct?

A) The exact same situation occurs in marketing industrial goods as in marketing consumer goods.
B) There is more standardization in industrial goods.
C) There is more adaptation in industrial goods than in consumer goods.
D) The industrial goods market demands adaptation.
E) The industrial goods market varies across cultural groups.

Question 40

Ryan Teed knows that domestic industrial demand is very volatile. He decided to hire a consultant to give him advice on what to do about this unacceptable situation. Which of the following would NOT be a measure put forward as a solution to combat volatile demand in the industrial goods sector?

A) Maintain a broad product line
B) Raise prices faster
C) Reduce advertising expenditures during booms
D) Ignore market share as a strategic goal, avoid layoffs, and focus on stability
E) Invest in foreign high-yield financial instruments

Question 41

Countries such as Japan and Germany are characterized as being in which stage of Rostow's five-stage model of economic growth?

A) Traditional society
B) Preconditions to takeoff
C) Takeoff
D) Drive to maturity
E) Age of mass consumption

Question 42

"Making deals in pounds isn't easy when you're negotiating with someone who speaks in grams" is why many American firms are:

A) championing an international weight-loss program.
B) only doing business in Great Britain.
C) converting measures to the metric system.
D) simulating rather than estimating production standards.
E) offering to change customers' calculations into standards acceptable to American manufacturers.

Question 43

With respect to universal standards in the sales of international products, which of the following statements is most applicable?

A) There are generally accepted universal standards for industrial products around the world.
B) There is a lack of universal standards.
C) The movement toward universal standards is nearing completion.
D) Most governments now mandate universal standards.
E) Universal standards have been present for a number of years.

Question 44

The U.S. Congress and businesses have been resisting conversion to the metric system fearing:

A) market competition from international firms already using the metric system.
B) consumer backlash and substitution of international products.
C) Department of Commerce rules requiring wine to be sold in liters.
D) workers would not understand the system.
E) it would be too costly.

Question 45

Which international organization is concerned with standard specifications for electrical equipment for machine tools?

A) The U.S. Department of Labor
B) The International Telecommunication Union
C) The International Organization for Standardization
D) The International Electrotechnical Commission
E) The U.S. Chamber of Commerce

Question 46

Which of the following is NOT an interrelated trend that spurs demand for technologically advanced products?

A) Expanding industrial growth in Asia
B) Expanding economic growth in Asia
C) The disintegration of the Soviet empire
D) The privatization of government-owned industries worldwide
E) The opening of the Trans-Arctic route

Question 47

If a country is in Stage 5 (the age of mass consumption) of Rostow's five-stage model of economic development, where does the country purchase most of its highest-technology products and services?

A) From Stage 4 suppliers
B) From Stage 3 suppliers
C) From other Stage 5 suppliers
D) From itself-it never needs anyone else
E) From Stage 3 and 4 suppliers together

Question 48

Industrialized economies such as Korea and the Czech Republic have been characterized as being in which stage of Rostow's five-stage model of economic growth?

A) Preconditions to takeoff
B) Takeoff
C) Traditional society
D) Drive to maturity
E) Age of mass consumption

Question 49

To be competitive in today's global markets, the concept of total quality management (TQM) must be part of all MNCs' management strategy, and TQM starts with:

A) the initial designer.
B) the comptroller's office.
C) talking with the customers.
D) ISO 9000.
E) the corporate mission statement.

Question 50

Russia and Eastern European countries have been characterized as being in which of the following stages of Rostow's five-stage model of economic growth?

A) The traditional society
B) Drive to maturity
C) Preconditions for takeoff
D) The age of mass consumption
E) Takeoff

Question 51

Which of the following will create expanding demand, particularly for industrial goods and business services, in Latin America?

A) The fast economic growth
B) The creation of market economies
C) The privatization of state-owned enterprises
D) Employment creation
E) Government regulations

Question 52

Which of the following is the international organization that is attempting to synchronize standards for several international industrial sectors?

A) The U.S. Department of Labor
B) The Global Harmonization Task Force
C) The United Nations
D) The Better Business Bureau
E) The U.S. Chamber of Commerce

Question 53

Quality is defined by the:

A) seller.
B) manufacturer.
C) buyer.
D) government.
E) trade publications.

Question 54

Which of the following is, perhaps, the best indicator of the "countries' abilities to benefit from and use technology as economic leverage" dimension of development?

A) The educational system
B) The degree of industrialization
C) The general economic environment
D) Market size and growth
E) Government regulations

Question 55

In the _____ stage of Rostow's five-stage model of economic development, an industrialized economy's focus is more on low-cost manufacturing of a variety of consumer and some industrial products; they buy from all categories of industrial products and services.

A) traditional society
B) drive to maturity
C) preconditions to takeoff
D) age of mass consumption
E) takeoff

Question 56

Which of the following has become the most advanced industrialized country in the Asian region?

A) South Korea
B) Japan
C) Hong Kong
D) Singapore
E) Taiwan

Question 57

Business-to-business marketers frequently misinterpret the concept of quality. Which of the following examples best illustrates this idea?

A) Farmers in third world countries often prefer less-efficient and lower quality but easier-to-maintain products to do work tasks.
B) Arabic accountants often use the abacus rather than a calculator.
C) The Japanese will no longer do business with many U.S. suppliers because their packaging is faulty.
D) The French absolutely abhor the term "French fry."
E) The universal acceptance of ISO 9000 standards as a guarantee of the suitability of products in consumer applications.

Question 58

To Chinese import managers, which of the following aspects of the purchasing process was ranked as the number one important aspect when buying a product or service from a foreign supplier?

A) Quality
B) Price
C) Product style
D) Product features
E) Timely delivery

Question 59

The perception of quality rests solely with the:

A) retailer.
B) customer.
C) marketer.
D) manufacturer.
E) quality inspector.

Question 60

One important dimension of quality is how well the product:

A) meets the specific needs of the buyer.
B) exceeds competitors' products.
C) conforms to manufacturer's specifications.
D) alters the marketing landscape.
E) matches up to applicable conditions.

Question 61

Which of the following about ISO 9000 is true?

A) ISO 9000 standards apply to specific products.
B) It guarantees that a manufacturer produces a "quality" product or service.
C) The series describes five quality system models.
D) ISO 9000 standards relate to generic system standards that enable a company to provide assurance that it has a quality control system.
E) ISO 9000s were originally designed by the International Organization for Standardization in Zurich.

Question 62

B&F Advertising Agency has just acquired a significant piece of Oracle's multimillion-dollar advertising business. Oracle would particularly like B&F to come up with creative ideas for Oracle's recent expansion into the lower Asian markets of India and Indonesia. In order to accommodate Oracle, B&F has now opened offices in two Indian cities and one Indonesian city. What would be the proper term to use to describe what B&F is doing with its own expansion into the above Asian markets?

A) Client baiting
B) Client following
C) Bargain hunting
D) Padding their bet
E) Risk avoidance

Question 63

Which of the following countries is not officially on the metric system?

A) The United States
B) Japan
C) Saudi Arabia
D) Mexico
E) China

Question 64

Many suppliers are adopting ISO 9000 standards because:

A) customer satisfaction surveys indicate retail customers prefer ISO certified suppliers.
B) it is the latest fad that adds value according to customer perception.
C) they want to be perceived as eco-friendly.
D) the WTO expects international suppliers to conform to ISO standards.
E) manufacturers are requiring them to do so.

Question 65

Research has shown that after-sales services are crucial in building customer loyalty and maintaining company reputation. What is another key reason that after-sales services should receive particular attention of top management?

A) These services are almost always more profitable than the actual sale of the primary good itself.
B) These services are very difficult to duplicate.
C) These services can be very heavily advertised.
D) These services cost almost nothing.
E) Degree of outsourcing service support.

Question 66

A strong level of interest in ISO 9000 is being driven more by:

A) government regulations.
B) marketplace requirements.
C) coercive action.
D) collective action.
E) internal perspectives.

Question 67

The _____ measures customers' satisfaction and perceptions of quality of a representative sample of America's goods and services.

A) ISO 9000
B) Loyalty business model
C) Net Promoter Score (NPS)
D) American Customer Satisfaction Index (ACSI)
E) American Price Index (API)

Question 68

For many technical products, the willingness of the seller to provide _____ may be the deciding factor for the buyers accepting one company's product over another's.

A) trade in kind
B) barter arrangements
C) installation and training
D) a 90-day no pay period
E) a no fault policy

Question 69

The mode of entry for most consumer services firms is licensing, franchising, strategic alliances, or direct. This tendency is so because of the:

A) natural or planned differentiation of commodities.
B) perishability or inability to inventory.
C) inseparability of creation and consumption.
D) variability of inputs and outputs.
E) physical intangibility of services.

Question 70

Until the _____ and _____ agreements, there were few international rules of fair play governing trade in services.

A) WTO; MERCOSUR
B) GATT; NAFTA
C) FCPA; ISO
D) GDP; RRP
E) HMO; EU

Question 71

ISO 9000 concerns the:

A) ability of a company to meet quality expectations of consumers.
B) registration and certification of a manufacturer's quality system.
C) profitability of a production line.
D) ability of a company's computer system to adapt to SAP.
E) assurance of product application.

Question 72

What is the most serious threat to the continued expansion of international services trade?

A) Free trade
B) Capitalism
C) Trade bloc
D) Countervailing duties
E) Protectionism

Question 73

McDonald's Hamburger University is known for having one of the finest (and most famous) international customer training facilities in the world. This is part of McDonald's _____ when dealing with international customers.

A) pricing promotion
B) product innovation
C) capacity utilization efficiency
D) after-sales service
E) warranty

Question 74

Identify the correct statement about ISO 9000.

A) To receive ISO 9000 certification, a company requests a certifying body to conduct an audit of the governance framework of a company.
B) The object of the assessor asking questions about everything is to develop a transitory plan to ensure that minute details are not overlooked.
C) A complete assessment for recertification is done every four years.
D) Although ISO 9000 is generally involuntary, the EU Product Liability Directive puts pressure on all companies to become certified.
E) The assessor helps employees create a quality manual, which will be made available to customers wishing to verify the organization's reliability.

Question 75

For many industrial products, the revenues from associated services exceed the revenues from the products. Which of the following examples best illustrates this statement?

A) Paper produced in a paper mill
B) A dental laboratory that prepares false teeth
C) Cell phones
D) A fax machine
E) A heavy duty lathe machine

Question 76

To spur U.S. industry into action, the _____ indicated that accepting the metric system will not be mandatory unless you want to sell something to the U.S. government; all U.S. government purchases are to be conducted exclusively in metric.

A) Office of the United States Trade Representative
B) International Electrotechnical Commission
C) Department of Labor
D) International Organization for Standardization
E) Department of Commerce

Question 77

The ready availability of parts and services provided by U.S. marketers can give them _____ in international markets.

A) easy market entry
B) increased liability
C) performance problems
D) reduced costs
E) a competitive advantage

Question 78

Because some business services have intrinsic value that can be embodied in some tangible form, they can be produced in one country and exported to another. Which of the following is an example of this?

A) Language schools
B) In-flight services related to air transportation
C) Operating an automatic teller machine
D) Data processing
E) Consultations of physicians

Question 79

Which of the following is considered to be an important competitive tool in Europe?

A) Adoption of ISO 9000 by a company.
B) All packaging instructions are printed in English.
C) All pricing is pegged to the dollar as the international standard.
D) The ability to incorporate U.S. products into inventories.
E) All product components are indigenously sourced.

Question 80

What is the chief reason that most U.S. business services companies enter the international market?

A) To service their U.S. clients abroad
B) To make high profits
C) To avoid government restrictions
D) To find and service new international customers
E) To avoid governmental controls in the domestic market