Firms Must Decide If It Is Preferable to Use a Standardization

question 12

Multiple Choice

Firms must decide if it is preferable to use a Standardization versus Localization-Adaptation approach. Considerations supporting a Standardization approach are:

• A) Customer segments in many countries still have differing preferences.
• B) Some products are cheap to develop, produce and do not have learning curve issues.
• C) Companies using a standardized approach can gain economies of scale in both production and marketing when customer segments have converging preferences.
• D) Customers always will pay a premium price for the most luxurious brand in a product class.
• E) Even with a standardized product, often other marketing mix variables should be localized.

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Definitions:

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Total Assets

The sum of all current and non-current assets owned by a company.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, highlighting a company’s profitability.

Net Income

The remaining earnings of a corporation after deducting all expenditures and tax obligations from its revenue.