Deck 8: Reaching Global Markets

Question 1

Approximately ____ of the world's purchasing power is outside of the United States.

A) 1/10
B) 1/3
C) 2/3
D) 1/2
E) 9/10

Answer 1

C

Question 2

How do globalized marketing strategies differ from customized marketing strategies? What are the implications of each for marketing managers?

Answer 2

Like domestic marketers, international marketers develop marketing strategies to serve specific target markets. Traditionally, international marketing strategies have customized marketing mixes according to cultural, regional, and national differences. There are many international issues related to product, distribution, promotion, and price. For example, many developing countries lack the infrastructure needed for expansive distribution networks, which can make it harder to get the product to consumers. Realizing that both similarities and differences exist across countries is a critical first step to developing the appropriate marketing strategy effort targeted to particular international markets. Today, many firms strive to build their marketing strategies around similarities that exist instead of customizing around differences.

Question 3

If Germany, in an attempt to bolster the sales of its own auto manufacturers, decided to limit the number of automobiles that could be brought in from other countries, Germany would be using a(n)

A) embargo.
B) boycott.
C) exchange control.
D) import tariff.
E) quota.

Answer 3

E

Question 4

Italy currently limits the number of Coach bags that can be imported during a one-year period, since Coach bags are made in New York, USA. This is an example of a(an) ____

A) exchange control limit.
B) embargo.
C) quota.
D) import tariff.
E) supply limit.

Question 5

Describe how economic and competitive forces affect international marketing strategies.

Question 6

In what ways can businesses become involved in international marketing activities?

Question 7

In what ways can a nation restrict the flow of imported goods?

Question 8

In China, the price of imported Scotch is $30 per glass as opposed to Scotch from China which is $3. Which of the following do you think accounts for the difference in price?

A) Exchange control
B) Balance of trade
C) Import tariff
D) Embargo
E) Export tariff

Question 9

What effect is NAFTA having on the international trade of the following countries: United States, Canada, and Mexico?

Question 10

According to your text, ____ are small technology-based firms operating in international markets almost immediately after their establishment and realizing as much as 70 percent of their sales outside the domestic home market.

A) "natural globals"
B) "multinational corporations"
C) "born globals"
D) "born multinationals"
E) "multinational enterprises"

Question 11

Describe the difficulties encountered in standardizing the marketing mix globally.

Question 12

The forces that affect foreign markets may differ dramatically from those affecting domestic markets. This makes a careful ____ a critical part of a successful international marketing strategy.

A) political analysis
B) regulatory analysis
C) social audit
D) environmental analysis
E) marketing analysis

Question 13

What effects are technological forces having on international marketing? What opportunities exist in the global marketplace that marketers can exploit with regard to technology?

Question 14

Which of the following is often used to raise revenue for a country and/or to protect domestic products?

A) Quota
B) Warning label
C) Embargo
D) Import tariff
E) Exchange control

Question 15

If Tasmania levied a duty on all goods purchased from the United States and other countries outside its borders that were brought into Tasmania, its businesses and citizens would be paying a(n)

A) embargo.
B) import tariff.
C) travelers' tax.
D) export tax.
E) foreign duty.

Question 16

Before the 1990s, most firms entered international markets

A) globally and quickly.
B) incrementally and slowly.
C) incrementally and quickly.
D) domestically and slowly.
E) regionally and quickly.

Question 17

What marketing and ethical problems can bribes create in international marketing transactions?

Question 18

When Starbucks decided to expand into the international markets of India, Japan, and Argentina, management realized that there would be significant differences in the standards of living, credit, buying power, and income distribution in those countries. Starbucks is currently examining the ____ forces in its environmental analysis.

A) economic
B) cultural
C) ethical
D) technological
E) legal

Question 19

Describe the sociocultural forces that affect international marketing strategy.

Question 20

Explain why the modes of entry into an international market are a major issue for managers to consider.

Question 21

The Foreign Corrupt Practices Act of 1977 makes it illegal for U.S. firms to

A) attempt to make large payments or bribes to influence policy decisions of foreign governments.
B) offer foreign businesses any type of incentive for purchasing their company's products and services.
C) change their ethical standards when dealing with foreign firms.
D) give even small tips or gifts in countries where such gifts are customary business practices.
E) introduce any type of corruption into foreign businesses that have higher ethical standards than those of the U.S. firm.

Question 22

Many companies choose to standardize their ____ across national boundaries to maintain a consistent and well-integrated corporate culture.

A) technology
B) ethical behavior
C) language
D) dress code
E) products

Question 23

The unconscious reference to one's own cultural values, experiences, and knowledge when encountering new and different cultures is known as

A) the "when-in-Rome" approach.
B) the Fraedrich Principle.
C) cultural relativism.
D) the self-reference principle.
E) he self-reference criterion.

Question 24

The country with the highest GDP is

A) Japan.
B) the United Kingdom.
C) Brazil.
D) the United States.
E) China.

Question 25

In many developing countries around the world, technology is enabling opportunities to "leapfrog" existing technology. What does this mean?

A) These countries are able to forgo current technological advances in order to wait for even better technology to be developed.
B) More advanced technology is reaching these countries even though they lack technological infrastructures.
C) Technological advances are often offered at prices considerably lower than in well-developed countries.
D) The technology in developing countries is rapidly surpassing the technology in well-developed countries.
E) The existing technological infrastructures in these countries are rapidly being replaced by newer, more advanced technology.

Question 26

Government restrictions on the amount of a particular country's currency that can be bought or sold are known as

A) embargoes.
B) quotas.
C) exchange controls.
D) import controls.
E) balance of trade controls .

Question 27

____ can force businesspeople to buy and sell foreign products through a central agency, such as a central bank

A) Embargoes
B) Export tariffs
C) Quotas
D) Import tariffs
E) Exchange controls

Question 28

When a glove manufacturer in China is allowed to sell only a certain number of plastic gloves to Japan, that firm is facing a(n)

A) tariff.
B) embargo.
C) restrictive product standard.
D) quota.
E) balance of trade restriction.

Question 29

When products are introduced into one nation from another, acceptance is far more likely

A) if prices are set very low.
B) when bribes are paid to local officials to aid distribution.
C) if there are similarities between the two cultures.
D) if packaging is adjusted to match local preferences.
E) when retailers are given incentives to push the products.

Question 30

In considering the viability of potential international markets for Pepsi products, PepsiCo is advised to take into account ____, which provides insight into market potential.

A) per capita gross domestic product
B) gross domestic product
C) the quantity of exports
D) the quantity of imports
E) total consumer income

Question 31

The United States' prohibition against importing cigars from Cuba is an example of a(n)

A) health control.
B) quota.
C) embargo.
D) exchange control.
E) import control.

Question 32

The Mont Blanc Company plans to export expensive consumer gift items to Germany. The best overall economic measure of market potential would be Germany's

A) gross domestic product.
B) gross domestic product per capita.
C) gross national product.
D) balance of trade.
E) unemployment rate.

Question 33

The gross domestic product is

A) a measure of the profit made by all firms in a nation.
B) the average annual earnings per person in a nation.
C) a measure of the types of products produced by a nation.
D) an overall measure of a nation's economic standing.
E) a ratio of domestic products to products produced in foreign countries.

Question 34

The ____ is the difference in value between a nation's exports and its imports.

A) net trade value
B) export/import ratio
C) gross domestic product
D) balance of payments
E) balance of trade

Question 35

Special interest groups and regulatory bodies are ____ forces that must be taken into account in international marketing.

A) socioeconomic
B) technological
C) economic
D) social and ethical
E) political and legal

Question 36

Caterpillar, maker of large construction equipment in the U.S., would like to better understand factors that would affect its ability to export its products to various countries. Which of the following forces determine how trade barriers affect Caterpillar's marketing efforts?

A) Political and legal
B) Economic
C) Industrial and Technological
D) Technological and Legal
E) Economic and political

Question 37

Which of the following is used to help maintain a more favorable balance of trade by a country?

A) Limiting imports
B) Limiting exports
C) Establishing exchange controls
D) Increasing gross domestic product
E) Changing political systems

Question 38

Marketers of computer software, music CDs, and books are particularly affected by cultural differences in

A) socioeconomic status of citizens.
B) advances in technology.
C) differences in cross-cultural exchange behavior.
D) ethical codes of conduct for businesses.
E) standards regarding intellectual property.

Question 39

Select the true statement.

A) Legislation regulating marketing in many foreign countries is being eased.
B) A government's attitude toward cooperation with importers has little impact on marketing to that country.
C) Refusing to give payoffs and bribes in some foreign countries may put a marketer at a competitive disadvantage.
D) Bribes and payoffs are considered unethical in all countries and cultures.
E) Bribes and payoffs are supported by U.S. trade policies under certain conditions.

Question 40

If a certain country considered handshakes in business transactions to be taboo and preferred to use nodding, this would be an example of differences in ____ forces.

A) sociocultural
B) political
C) sales
D) ethical
E) regulatory

Question 41

Many marketers claim that ____ will become the world's largest market.

A) Japan
B) the United States
C) China
D) Thailand
E) India

Question 42

All of the following European countries use a common currency, the _____, except for _____, which uses its own currency.

A) euro; France
B) euro; England
C) dollar; England
D) euro; Germany
E) euro; Austria

Question 43

If a newly formed country wanted to increase its international trade and reduce worldwide tariffs, it would most likely try to become a part of

A) NAFTA.
B) WTO.
C) MERCOSUR.
D) APEC.
E) EU.

Question 44

The term dumping refers to the sale of

A) products sold in foreign markets that cannot be sold in the United States.
B) products sold in foreign markets at prices above those charged in the United States.
C) all discontinued U.S. products in foreign countries.
D) products sold in foreign countries at unfairly low prices.
E) products sold in foreign markets that cannot pass safety standards in the United States.

Question 45

Another name for the European Union is

A) the Common Market.
B) the European Market.
C) the Euro.
D) NAFTA.
E) AECO.

Question 46

Which of the following is not true of NAFTA?

A) The agreement has a long adjustment phase-in time period.
B) Increased competition should lead to a more efficient market.
C) It will provide additional opportunities for the United States in long-term affiliations with other countries in the Western hemisphere.
D) Provides protection for intellectual property among its members.
E) Business licensing requirements have been increased.

Question 47

The agreement between the United States, Canada, and Mexico that merges these three countries into one marketplace is called

A) EU.
B) MERCOSUR.
C) APEC.
D) NAFTA.
E) GATT.

Question 48

The World Trade Organization accomplishes all of the following except

A) educating companies about international trade rules.
B) lending money to businesses interested in developing international markets.
C) serving as a forum for trade negotiations.
D) helping settle trade disputes.
E) providing legal ground rules for international commerce.

Question 49

Walmart is currently expanding its stores into Canada and Mexico. This expansion is being facilitated by the

A) European Union.
B) North American Free Trade Agreement.
C) Pacific Rim Unification Act.
D) International Retail Alliance Association.
E) Latin American Free Trade Association.

Question 50

The unification of Europe through the European Union (EU)

A) produced the largest single market in the world.
B) calls for greater customization of products and attention to regulations and restrictions of European countries.
C) means that members of the EU have become more heterogeneous in their needs and wants.
D) required the countries to be segmented into many different markets.
E) permits virtually free trade among the member nations of the EU.

Question 51

One of the effects of NAFTA is the simplification of country-of-origin rules. This will likely hinder the international trade activities of

A) Canada.
B) Japan.
C) Brazil.
D) Cuba.
E) Panama.

Question 52

____ refers to the idea that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures.

A) The self-reference criterion
B) Global ethics
C) Economic relativism
D) Cultural relativism
E) Moral relativism

Question 53

Which of the following agreements provides a forum for tariff negotiations, reducing trade restrictions, resolution of international trade problems, and ground rules for international trade?

A) The World Trade Organization
B) The North American Free Trade Agreement
C) The Latin American Free Trade Agreement
D) The European Union Free Trade Agreement
E) The General Agreement on Tariffs and Trade

Question 54

Which of the following alliances/agreements is the United States not a part of?

A) NAFTA
B) APEC
C) GATT
D) WTO
E) MERCOSUR

Question 55

The Southern Common Market (MERCOSUR) includes

A) countries from southern Africa.
B) both India and Indonesia.
C) Australia and New Zealand.
D) countries in South America.
E) southern China and India.

Question 56

If Hyundai, a Korean automobile manufacturing firm, started selling its cars at unfairly low prices to Germany, Hyundai would be engaging in

A) quota-enforcing.
B) embargoing.
C) shoveling.
D) dumping.
E) dipping.

Question 57

Johnston Chemicals' president is very excited about the possibility of the firm's British subsidiary having access to customers in the entire EU. He realizes that it will be some time before this area truly becomes one market, primarily because of differences in which of the following?

A) Available advertising media
B) Cultural factors
C) Legal challenges
D) Technological advances
E) Economic environmental factors

Question 58

The trade alliance that includes Brazil, Argentina, Chile, and other countries is known as

A) OPEC.
B) APEC.
C) MERCOSUR.
D) NAFTA.
E) the Common Market.

Question 59

Maquiladoras are

A) exchange controls from central banks in Latin American countries.
B) production facilities in north-central Mexican states.
C) import-export agents of the Mexican government.
D) global marketing programs established in Latin American countries.
E) freight forwarders from Mexico.

Question 60

Which of the following trade alliances differs from others in its commitment to facilitating business and its practice of allowing the private sector to participate in a wide range of activities?

A) NAFTA
B) EU
C) MERCOSUR
D) WTO
E) APEC

Question 61

Which of the following lists the levels of involvement in global marketing from the lowest to the highest ?

A) Regional marketing, multinational marketing, limited exporting, domestic marketing, globalized marketing
B) Limited exporting, domestic marketing, globalized marketing, multinational marketing, regional marketing
C) Globalized marketing, multinational marketing, regional marketing, limited exporting, domestic marketing
D) Domestic marketing, globalized marketing, regional marketing, multinational marketing, limited exporting
E) Domestic marketing, limited exporting, multinational marketing, regional marketing, globalized marketing

Question 62

Tony & Guy is a global hairdressing and education business headquartered in England. It has recently opened salons in Mongolia, adding to its numerous salons worldwide. Tony & Guy allows foreign businesspeople to use its name, logo, methods of operation, advertising, and products. In exchange, Tony & Guy receives a financial commitment and an agreement to conduct business in accordance with its standard of operations. Tony & Guy is engaging in

A) contract manufacturing.
B) wholesaling.
C) franchising.
D) exporting.
E) direct investment.

Question 63

Henderson Synthetics is a producer of chemical products aimed at increasing agricultural yield per acre. Henderson Synthetics' management believes that several of the firm's products could have sizable markets in other countries, however, it is costly to obtain market research to confirm this. If Henderson Synthetics wanted to temporarily "try out" these international markets with a minimal level of commitment and cost, it should use

A) contract manufacturing.
B) exporting.
C) joint ventures.
D) licensing.
E) subsidiaries.

Question 64

A large farming cooperative that focuses on the production of fruits and vegetables uses a business that sells the farmers' products in foreign countries and also provides consulting, insurance, legal assistance, and warehousing to the cooperative. This business would most likely be called a(n)

A) trading company.
B) export specialist.
C) contract wholesaler.
D) licensor.
E) strategic partner.

Question 65

How does using an exporting intermediary limit the risk involved with global marketing?

A) Most exporting intermediaries assume all financial risks on behalf of their clients.
B) Exporting intermediaries are not subject to the same laws as companies, and therefore limit the legal risk involved.
C) Using an exporting intermediary restricts a company to being involved with joint ventures and not direct ownership.
D) Exporting intermediaries guarantee that the products a company is selling will be a good fit for the foreign markets they are entering.
E) This approach involves limited risk because the company has no direct investment in the foreign country.

Question 66

What level of commitment in international marketing may be most attractive when the political and economic stability of a foreign country is questionable?

A) Joint ventures
B) Direct ownership
C) Exporting
D) Limited exporting
E) Licensing

Question 67

Which of the following would be a benefit to a franchiser, such as Jiffy Lube, in expanding into international marketing?

A) There are no risks involved with allowing a foreign franchisee.
B) The franchiser does not have to put up a large capital investment.
C) The franchiser does not have to share its name or operational procedures.
D) The franchisee only pays a set fee every month to the franchiser.
E) An equal partnership is formed between the franchiser and franchisee.

Question 68

A special form of licensing in which one company grants another company the right to market its product in accordance with its standards in exchange for a financial commitment is called

A) a joint venture.
B) contract manufacturing.
C) direct licensing.
D) franchising.
E) a strategic alliance.

Question 69

A company not involved in manufacturing that brings together buyers and sellers in different countries is usually referred to as a

A) franchise.
B) contract manufacturer.
C) strategic intermediary.
D) trading company.
E) joint venture.

Question 70

The purchase of products from a foreign source is called

A) exporting.
B) dumping.
C) importing.
D) licensing.
E) venturing.

Question 71

Franchising offers all the following benefits for franchisers except

A) franchise agreements require a certain standard of behavior from franchisees, which helps protect the franchise name.
B) franchisers can retain control of their name while increasing global penetration of their products.
C) the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and royalties.
D) the franchiser's revenue stream is fairly consistent because franchisees pay fixed fees and royalties.
E) franchisers do not have to put up a large capital investment.

Question 72

At the heart of the ____ are agreements that provide legal ground rules for international commerce and trade policy.

A) United Nations
B) GATT
C) MERCOSUR
D) WTO
E) APEC

Question 73

A(n) ____ is an organization that links buyers and sellers in different countries but is not involved in manufacturing.

A) trading company
B) exporter
C) joint venture
D) strategic alliance
E) licensee

Question 74

If Caterpillar wished to reach the market in Malaysia but was leery of a direct investment in the country, it might provide a Malaysian operation with the knowledge to produce and market its products in exchange for a commission. This type of arrangement is called

A) licensing.
B) exporting.
C) a strategic alliance.
D) a joint venture.
E) contract manufacturing.

Question 75

When a firm's products sell in foreign countries with little or no effort to obtain foreign sales, the firm is engaging in

A) international marketing.
B) global marketing.
C) limited exporting.
D) product licensing.
E) unplanned exporting.

Question 76

The Grummond Group buys air conditioner components in industrialized countries and sells them to business customers in developing countries where the air conditioners are assembled. Grummond is most likely classified as a(n)

A) trading company.
B) strategic alliance.
C) joint venture.
D) licensee.
E) exporter.

Question 77

High Plains Furnishings, a furniture manufacturer in southern Montana, markets its furniture products in markets within the United States. It has also found several niche target markets in Finland, Chile, and Argentina. High Plains Furnishings is engaging in

A) domestic marketing and limited exporting.
B) localized marketing and domestic marketing.
C) globalized marketing.
D) domestic marketing and international exporting.
E) localized marketing and globalized marketing.

Question 78

The role of export agents is to

A) bring buyers and sellers from different countries together and collect a commission for arranging sales.
B) purchase products from different companies and sell them to foreign countries.
C) help a firm to make direct investments in foreign countries.
D) contact domestic firms about the opportunities available in exporting.
E) arrange for licensing agreements between domestic and foreign firms.

Question 79

When the American company Exxon purchases crude oil from Saudi Arabia, it is engaging in

A) licensing.
B) importing.
C) free trade.
D) exporting.
E) dumping.

Question 80

The extent of Raytheon's participation in global business is selling the batteries it manufactures to companies in Spain. In this case, Raytheon is a(n)

A) trading company.
B) importer.
C) exporter.
D) franchiser.
E) contract manufacturer.