Chapter 5 Case StudyP&G, Unilever, Panasonic: The $2-a-Day Initiative

TRUE/FALSE
1. For multinationals, the primary growth demographic in emerging markets is the very poor.
ANS: F
Virtually every demographic is researched by multinationals for the purpose of expanding their
markets.
PTS: 1
OBJ: 5-3
TOP: AACSB Reflective Thinking
KEY: CB&E Model International Perspective
MSC: BLOOMS Level I Knowledge
2. Product demonstrations, rather than promotions such as coupons, are preferred as market tools in the
more isolated, rural regions of emerging countries.
ANS: T
PTS: 1
OBJ: 5-5
KEY: CB&E Model International Perspective
MSC: BLOOMS Level I Knowledge

TOP: AACSB Reflective Thinking

3. Simplifying design and lowering other costs is still a viable way to penetrate the lowest level of the
economic pyramid in emerging markets.
ANS: T
PTS: 1
OBJ: 5-5
KEY: CB&E Model International Perspective
MSC: BLOOMS Level I Knowledge

TOP: AACSB Reflective Thinking

4. Panasonic designs its products for the global poor by simplifying preexisting Japanese market designs.
For Panasonic, standardization is way to realize profits in these otherwise unprofitable markets.
ANS: F
The head of Panasonics overseas consumer products states that If [a local product] starts with a
Japanese product or Japanese design, this [strategy of simplification] is impossible.
PTS: 1
OBJ: 5-2
TOP: AACSB Reflective Thinking
KEY: CB&E Model International Perspective
MSC: BLOOMS Level I Knowledge
MULTIPLE CHOICE
1. Single- and small-use packaging, such as Unilever deodorant sticks that sell for pennies, are costeffective for multinationals because __________.
a. of product standardization with free sample packaging used in developed countries
b. the income in many countries in less than $1,000
c. they are easier for rural people to carry and use in the fields
d. the pricing is fair trade
e. all of the above
ANS: B
There are many very poor countries where the GNI per capita is under $1,000 and is a measure of a
countrys citizens ability to buy various goods.

PTS: 1
OBJ: 5-3
KEY: CB&E Model Product

TOP: AACSB Reflective Thinking

MSC: BLOOMS Level II Comprehension

2. When confronted with a consumer population that can only spend $2 a dayand only a fraction of
that is disposablea marketer is looking at a factor in the __________.
a. gross domestic production
b. average daily salary of the worlds poor
c. economic disparity between developed and emerging countries
d. multidomestic strategy
e. external environment
ANS: E
A second major factor in the external environment facing the global marketer is the level of economic
development in the countries where it operates.
PTS: 1
OBJ: 5-3
TOP: AACSB Reflective Thinking
KEY: CB&E Model International Perspective
MSC: BLOOMS Level II Comprehension
3. By removing certain chemicals from Tide because it irritated the skin when used by rural villagers who
wash clothes by hand, Procter & Gamble did not go along with the trend toward __________.
a. one-size-fits-all design
b. unsafe products for the poor
c. human testing
d. cheaper versions of brand-name products
e. standardized consumer products
ANS: E
Standardized consumer products have emerged on a huge scale, as opposed to segmented foreign
markets with different products.
PTS: 1
OBJ: 5-2
TOP: AACSB Ethics
KEY: CB&E Model International Perspective
MSC: BLOOMS Level II Comprehension
4. Providing low-cost, simplified versions of familiar products can be impossible to market in some
regions, especially in Africa. Which of the following is a probable reason for nonexistent markets?
a. poor channels of distribution
b. inadequate physical infrastructure
c. high tariffs
d. severely impoverished population that dont even use money
e. all of the above
ANS: E
In many developing nations, channels of distribution and the physical infrastructure are inadequate. In
Africa, the continents GDP is growing rapidly, and African businesses want to expand. Unfortunately,
they face high tariffs, weak infrastructure, and severely impoverished populations.
PTS: 1
OBJ: 5-5
TOP: AACSB Reflective Thinking
KEY: CB&E Model International Perspective
MSC: BLOOMS Level II Comprehension

5. Procter & Gambles policy, described as __________ by its CEO, puts patience before a quick return
on investment.
a. time-intensive growth
b. fair priceproduct mix
c. purpose-inspired growth
d. diluting expectations
e. none of the above
ANS: C
McDonald looks on the strategy as one of purpose-inspired growthone designed to generate
profitable business for P&G and improve its customers daily lives with quality products.
PTS: 1
OBJ: 5-4
TOP: AACSB Ethics
KEY: CB&E Model International Perspective
MSC: BLOOMS Level II Comprehension
6. Marketers are often surprised that the poor reject products that have been made cheaper for their
benefit. What explains the failure of P&G and other firms, such as LOral when both used a strategy
of diluting?
a. The special pricing was not cheap enough.
b. The poor can tell when water has been added.
c. The poor dont see themselves as poor.
d. Poor customers have product aspirations just like other customers.
e. Poor customers have aesthetics about package design too.
ANS: D
The firm must not assume that low-income customers will accept lower quality.
PTS: 1
OBJ: 5-5
TOP: AACSB Reflective Thinking
KEY: CB&E Model International Perspective
MSC: BLOOMS Level II Comprehension