Penelope's Pizza, a Local Chain of Carryout Restaurants, Has Made

question 28

Multiple Choice

Penelope's Pizza, a local chain of carryout restaurants, has made the decision to expand to a national basis. It plans to open 50 Penelope's in 20 cities across the country within the next two years. In order to efficiently integrate all the tools and company resources to maximize the impact on new customers, Penelope's Pizza is considering using an integrated marketing strategy to promote a coherent national brand perception. The account manager argues that an integrated marketing strategy is the way to go, but the CEO argues that each local community is different, and the needs, values, and norms of the host cities should drive the marketing campaign. After becoming a successful national brand, Penelope's Pizza has made the decision to expand overseas and enter the global market. Using a globally integrated marketing plan, Penelope's plans to enter the pizza market in Germany, Japan, and India. The CEO wants to use an adaptation plan in the new markets, and thus offer kielbasa pizza in Germany, sushi pizza in Japan, and vegetarian pizza in India. The advertising firm recommends a standardization approach as being more cost efficient and brand identifiable. Which statement, if true, supports the CEO's argument?

• A) Traditionally, all three markets are slow to adapt to the idea of fast food, and prefer meals with known ingredients that are familiar to them.
• B) The cost of introducing new ingredients to the menu will increase the price of pizza by 15 percent.
• C) Marketing surveys show that the under-30 generation in each of the three countries is increasingly eager to consume fast food as a status symbol of increasing wealth.
• D) The current economic slump has decreased the volume of sales for all fast foods on a global basis.
• E) Obtaining vendors for new pizza toppings would require the hiring of additional translators in each country.

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Definitions:

Capital Structure

The mix of different forms of external funds used to finance a company's operations, such as debt and equity.

Earnings Per Share

A financial ratio that measures the amount of net income earned per share of stock outstanding.

Cost Of Debt

The effective interest rate that a company pays on its total debt, influencing its finance strategy.

Total Capital

The sum of a company's equity and debt, reflecting the total resources available to the company for business activities.