Question 1

In the case of offshoring, the vendor takes control of the operations and runs the operations as they see fit.

Accepted Answer

In offshoring, while the operations are moved to another country, the client company often retains control over standards, processes, and outcomes, guiding how the vendor executes the operations.

Question 2

In the case of outsourcing, the firm retains control of the operations and directly hires the employees.

Accepted Answer

In outsourcing, the firm contracts out some of its operations or business functions to a third-party service provider, which then hires its own employees to carry out those functions. The firm does not typically retain direct control over those employees.

Question 3

Intermediaries in the channel of distribution can include distributors, wholesalers, agents, brokers, retailers, international freight forwarders, and trading companies.

Accepted Answer

Intermediaries in the channel of distribution can indeed include distributors, wholesalers, agents, brokers, retailers, international freight forwarders, and trading companies.

Question 4

Multiple brands may resonate more with specific markets, especially if a company merges with or acquires a local brand that is well respected in that region.

Accepted Answer

This statement is true. Different brands may appeal to different markets or demographics, and acquiring a local brand that is already established and respected in a particular region can help a company to better connect with consumers in that area.

Question 5

In the case of the indirect channel of distribution, there are no intermediaries between the consumer and the producer.

Accepted Answer

In the case of indirect channel of distribution, there are intermediaries between the consumer and the producer. Examples of intermediaries include wholesalers, retailers, agents or brokers who help in getting the product to the end consumer.

Question 6

The world does become flatter to the extent a brand is recognized, accepted, and trusted across borders.

Accepted Answer

As a brand gains recognition and trust across borders, it is more easily able to penetrate new markets and overcome cultural and geographic barriers, thereby flattening the world to a certain extent.

Question 7

Counterfeit markets hurt companies that have invested in building intellectual assets such as unique product designs, technological developments, costly media content, and carefully crafted brands.

Accepted Answer

Counterfeit markets undermine the value of these intellectual assets, resulting in lost revenue and market share for legitimate companies.

Question 8

One of the biggest challenges in selling to emerging markets involves making the product affordable.

Accepted Answer

Emerging markets often have lower purchasing power and higher levels of poverty, making affordability a crucial factor in generating sales.

Question 9

All citizens of a given country can be marketed to uniformly.

Accepted Answer

Not all citizens of a country can be marketed to uniformly as they have different needs, interests, and preferences. Demographic, geographic, and psychographic segmentation must be considered for effective marketing.

Question 10

Understanding the market's culture and social trends is irrelevant when it comes to doing business in the emerging economies of the world.

Accepted Answer

Understanding the market's culture and social trends is crucial when it comes to doing business in the emerging economies of the world. It plays a significant role in building relationships, communication, and trust with potential customers and partners. It also helps in developing products and services that cater to the local needs and preferences, thereby increasing the chances of success in the market.

Question 11

The advantage of straight product extension strategy is that the company doesn't need to invest in new research, development, or manufacturing.

Accepted Answer

Straight product extension strategy involves selling an existing product in a new market without making any changes to the product. This strategy saves the company from investing in new research, development, or manufacturing as they are utilizing their existing product in a new market. Therefore, the statement is true.

Question 12

One advantage of straight product extension is that the products may be less costly due to lower manufacturing and labour costs in the United States.

Accepted Answer

Straight product extension means selling the same product in different markets without any changes or adaptations. It does not consider differences in manufacturing, labour costs or other factors that may impact pricing in different markets. Therefore, it is unlikely to result in lower costs in the United States specifically.

Question 13

The downsides of safety stock include the increased costs of carrying that inventory such as the investment in the products, taxes and insurance, and storage space.

Accepted Answer

The statement is true. Carrying safety stock means having extra inventory on hand, which comes with extra costs such as the cost of holding that inventory (investment in the products), taxes and insurance, and storage space.

Question 14

In the case of outsourcing, the company pays the outsource vendor for the end result; how the vendor achieves the end result is up to the vendor.

Accepted Answer

When a company outsources, they typically pay the vendor for the end result rather than dictating how the vendor achieves it. This allows the vendor to use their own methods and expertise to complete the task in the most efficient and effective way possible.

Question 15

Gray markets are illegal and the operators in the market are punishable by law.

Accepted Answer

Gray markets are not technically illegal, but they operate outside of authorized distribution channels and may violate trademark or copyright laws. However, gray market goods may not be covered by manufacturer warranties or support services.

Question 16

The disadvantage of straight product extension is that a company's products may not be well suited to local needs.

Accepted Answer

Straight product extension means a company offering the same products in a foreign market as it does in its domestic market without any modifications, which may not be well suited to local needs, preferences or cultural differences. This may result in low demand or failure of the products in the foreign market.

Question 17

The purpose of segmentation is to give the company a concrete vision of its customers, so that it can better understand how to market to that customer.

Accepted Answer

Segmentation helps a company group its target market into smaller, more specific groups based on shared characteristics or behaviors. This allows the company to tailor its marketing efforts and messages to better resonate with each customer segment. By understanding its customers through segmentation, a company can improve its overall marketing strategy and increase its chances of success.

Question 18

The existence of gray-market activity across a country's border has a positive impact on the producer and their channel partners (e.g., distributors and retailers) in the higher-priced country.

Accepted Answer

Gray-market activity involves the unauthorized sale of goods outside of the authorized distribution channels, often at a lower price. This can have a negative impact on the producer and their authorized channel partners in the higher-priced country, who may lose sales and profits to the gray market.

Question 19

A multibrand strategy is not advisable when a country has a strong, positive association with a particular brand.

Accepted Answer

A multibrand strategy can still be advisable even if a country has a strong, positive association with a particular brand, as it allows a company to target different market segments, cater to diverse consumer needs, and mitigate risks by not relying on a single brand.

Question 20

Counterfeit markets are illegal because they purposely deceive the buyer.

Accepted Answer

Counterfeit markets involve the deliberate production and sale of fake goods that are designed to appear genuine, thereby deceiving buyers who believe that they are receiving authentic products. This is illegal because it violates trademark, copyright, and intellectual property laws, and can result in consumers suffering from health and safety risks, as well as economic harm.

Quiz 14: Competing Effectively Through Global Marketing, Distribution, and Supply-Chain Management