Deck 7: Understanding and Reaching Global Consumers and Markets

Question 1

Which of the following countries is the world's leading importer?

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

Answer 1

A
Explanation: The United States,China,Japan,Western Europe,and Canada together account for more than two-thirds of world trade in manufactured products and commodities.The United States is the world's leading importer,followed by China and Germany.

Question 2

Recipco and Tradaq are both companies that connect international companies who want to barter the products they make for the products they need without using cash or credit.Recipco and Tradaq assist international companies in making

A)countertrades.
B)quota exchanges.
C)trading exchanges.
D)balances of trade.
E)WTO trade arrangements.

Answer 2

A
Explanation: Countertrade is the practice of using barter rather than money for making global sales.Recipco and Tradaq assist companies in bartering the products they make for products they need.

Question 3

The Malaysian government exchanged 20,000 tons of rice for an equivalent amount of Philippine corn.This transaction is an example of a(n)

A)countertrade.
B)competitive advantage.
C)balance of trade.
D)quota.
E)trade feedback.

Answer 3

A
Explanation: Countertrade is the practice of using barter rather than money for making global sales;in this case,exchanging rice for corn.

Question 4

The complementary nature of economic flows internationally,whereby imports stimulate exports and vice versa,is called ________ and is one argument for free trade among nations.

A)the balance of trade
B)countertrade
C)exchange trade
D)the trade feedback effect
E)global market trading

Question 5

All nations and regions of the world do not participate equally in world trade.World trade flows reflect

A)the influences of culture and language.
B)the differences among industries,countries,and regions.
C)interdependencies among industries,countries,and regions.
D)the challenges of currency and exchange imbalances.
E)the increasing importance of services verses products.

Question 6

Gross domestic product refers to the

A)monetary value of all products and services produced by a single manufacturer during one year.
B)monetary value of all domestic exports of a nation during one year.
C)monetary value of all products and services produced in a country during one year.
D)monetary value of all domestic imports of a nation during one year.
E)difference between all domestic exports and imports for any nation during the course of one fiscal year.

Question 7

Which of the following countries is the world's leading exporter?

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

Question 8

Which of the following statements about the dynamics of world trade is most accurate?

A)Manufactured products and commodities account for only 25 percent of world trade.
B)Services such as telecommunications,transportation,and banking are not included in calculations of world trade.
C)The United States has replaced China as the biggest country in terms of world trade.
D)All nations participate equally in world trade.
E)Dollar value of world trade has roughly doubled in the past decade.

Question 9

Which of the following statements about the dynamics of world trade is most accurate?

A)As the largest international importer and exporter,the U.S.accounts for 65 percent of world trade.
B)World trade is calculated to include only the exchange of money for products or services.
C)An estimated 35 percent of world trade involves countertrade.
D)China,the United States,and Germany far outpace other countries in terms of imports and exports.
E)Because of NAFTA,North American intratrade is no longer counted in calculations of world trade.

Question 10

When a nation's imports exceed its exports,it incurs a ________ in its balance of trade.

A)countertrade
B)trade feedback effect
C)deficit
D)surplus
E)tariff

Question 11

A country's imports

A)stimulate the imports of other countries.
B)have no effect on its exports.
C)have no relationship with its balance of payments.
D)affect its exports and exports affect its imports.
E)over time will decrease its overall economic activity.

Question 12

When a country's exports exceed its imports,

A)it incurs a deficit in its balance of trade.
B)the result is the trade feedback effect.
C)it will try to rebalance its overall economy.
D)it will attempt to engage in a trade war.
E)it incurs a surplus in its balance of trade.

Question 13

An estimated 10 to 15 percent of world trade involves ________,the practice of using barter rather than money for making global sales.

A)cross trade
B)countertrade
C)exchange trade
D)trade feedback
E)market trading

Question 14

All of the following are challenges faced by Amazon in its expansion into India except which?

A)Low rates of credit and debit card usage among Indian consumers,and many without bank accounts
B)Well-financed and capable domestic competitors in India
C)Political instability and social unrest in India
D)Underdeveloped technology requiring financial and technological investment in a localized cloud computing platform for India
E)Strict trade regulations that prevent direct sales to Indian consumers

Question 15

The trade feedback effect is one argument for

A)decreasing a nation's exports.
B)free trade agreements.
C)increased tariffs and quotas.
D)international trade associations.
E)decreasing a nation's imports.

Question 16

The monetary value of all products and services produced in a country during one year is referred to as the

A)balance of trade.
B)gross domestic product.
C)national monetary reserve.
D)monetary national balance.
E)annual national product.

Question 17

Countertrade refers to

A)the illegal agreement of one country to buy products exclusively from another.
B)the legal agreement of one country to buy and sell certain products exclusively from one another.
C)the practice of using barter rather than money for making global sales.
D)the sale of industrial goods from a brick and mortar outlet rather than directly from the manufacturer.
E)the use of foreign currency in making global purchases to minimize risk from currency fluctuation.

Question 18

Volvo of North America delivered automobiles to the Siberian police force when Siberia had no cash to pay for them.It accepted payment in oil,which it then sold for cash to pay for media advertising in the United States.This transaction is an example of

A)a quota.
B)countertrade.
C)balance of trade.
D)competitive advantage.
E)a trade feedback effect.

Question 19

Why has Amazon been aggressively pursuing the Indian market since 2013?

A)U)S.sales have begun to decrease.
B)Amazon believed it would be inexpensive to begin operations in India.
C)There was no competition to speak of for Amazon's e-commerce channel in India.
D)There were fewer restrictions in retailing in India.
E)The India market offered significant growth potential.

Question 20

The balance of trade is the

A)difference between the monetary value of a nation's exports and imports.
B)sum of the monetary value of a nation's exports and imports.
C)monetary value of a nation's exports divided by its imports.
D)surplus that occurs when nations engage in exporting.
E)state of equilibrium when two neighboring nations participate in countertrade.

Question 21

Whirlpool asked the United States to impose ________ on washing machine imports made by LG Electronics and Samsung Electronics,both South Korean companies,to raise the price of these products.Whirlpool accused these companies of selling below fair market value and receiving anticompetitive export subsidies from their governments,both of which could jeopardize American jobs.

A)boycotts
B)quotas
C)sanctions
D)tariffs
E)embargoes

Question 22

The world's largest manufacturer of peppermint candy canes was located in Albany,Georgia,until it could no longer afford to buy the sugar needed for its operation.It moved its manufacturing business to Mexico where there are no restrictions (like those that exist in the United States)on the amount of sugar that can be brought into the nation.The business moved to Mexico because of a(n)________ established by the U.S.government.

A)tariff
B)trade imbalance
C)excise tax
D)subsidy
E)quota

Question 23

The practice of shielding one or more sectors of a country's economy from foreign competition through the use of tariffs or quotas is referred to as

A)domestic imperialism.
B)protectionism.
C)blocked competition.
D)import taxation.
E)trade restriction.

Question 24

Which of the following issues raises concerns about the ethics of protectionism?

A)Competitive advantage grows out of continuous improvement.
B)Small firms succeed in foreign niche markets.
C)Tariffs have declined from an average of 40 percent to less than 5 percent.
D)Regional trade agreements may provide preferential treatment for member nations.
E)Pan-European marketing strategies are possible due to greater uniformity in packaging standards.

Question 25

Tariffs refer to

A)government payments to companies or industries that primarily serve to create competitive advantage for domestic products.
B)government taxes on products or services entering a country that primarily serve to raise prices on imports.
C)a restriction placed on the amount of a product allowed to enter or leave a country.
D)a minimum requirement for the purchase between two or more nations of products or services.
E)a refusal to purchase or exchange products or services with another nation unless certain financial or ideological requirements have been satisfied.

Question 26

A restriction placed on the amount of a product allowed to enter or leave a country is referred to as a(n)

A)quota.
B)tariff.
C)WTO tax.
D)subsidy.
E)excise tax.

Question 27

The four largest importers of U.S.products and services are

A)Japan,Germany,China,and Canada.
B)Canada,Mexico,China,and Japan.
C)China,Brazil,Japan,and Germany.
D)Mexico,Canada,Brazil,and China.
E)England,Canada,Australia,and New Zealand.

Question 28

Arguments in favor of protectionism include that it

A)helps reduce tariffs and quotas.
B)promotes development of domestic industries.
C)encourages economic reliance on foreign countries.
D)creates opportunities for the outsourcing of domestic jobs.
E)creates a more favorable environment for a global economy.

Question 29

Which of the following statements about the relationship between the imports into the United States and the exports from the United States during the last 40 years is most accurate?

A)Exports from the United States have declined,while import levels have remained about constant.
B)The volume of both imports and exports has consistently decreased.
C)Imports into the United States and exports have been about equal,indicating balanced trade.
D)Exports have exceeded imports,indicating a continuing balance of trade surplus.
E)Imports have exceeded exports,indicating a continuing balance of trade deficit.

Question 30

The U.S.Rice Millers' Association claims that if the Japanese rice market were opened to imports by lowering ________,lower prices would save Japanese consumers $6 billion annually and the United States would gain a large share of the Japanese rice market.

A)boycotts
B)quotas
C)sanctions
D)tariffs
E)subsidies

Question 31

Five developments in the past decade have significantly influenced the landscape of global marketing.One of them is

A)an increase in most countries' GDP coupled with an increased degree of consumer ethnocentrism.
B)a significant increase in economic protectionism and a decline in tariffs and quotas.
C)a more aggressive attitude toward regulating international banking.
D)a decrease in most countries' GDP and a renewal of nationalism.
E)a growth in economic integration among countries.

Question 32

The ________ imposed on imported bananas by European Union countries cost consumers $2 billion a year in higher prices.

A)boycotts
B)quotas
C)sanctions
D)subsidies
E)tariffs

Question 33

Recently,the United States imposed a 35 percent tariff on Chinese tire imports in the hopes of sustaining U.S.jobs in tire manufacturing.This addition of tariffs is an example of

A)imposing the rule of eminent domain.
B)increasing ethnocentrism.
C)enhancing domestic imperialism.
D)increasing protectionism.
E)slowing countertrade.

Question 34

A quota refers to

A)a government tax on products or services entering a country that primarily serves to raise prices on imports.
B)government payments to companies or industries that serve to lower costs and provide a competitive advantage to domestic industries.
C)a restriction placed on the amount of a product allowed to enter or leave a country.
D)a minimum requirement for the purchase of specific products or services between two nations.
E)a refusal to purchase or exchange products or services with another nation unless certain financial or ideological requirements have been satisfied.

Question 35

U.S.citizens pay $5 billion more annually for shoes and Japanese citizens pay $6 billion more for rice than the actual cost of the products because

A)both countries have suffered major financial crises due a severe trade imbalance.
B)both countries have imposed tariffs on imported goods to protect their domestic markets.
C)both countries have imposed limits on the quantity of these goods that can leave their respective domestic markets.
D)both products are considered essentials and as a result are more heavily taxed.
E)these products were purchased at a lower price from nations that currently are under governmental sanctions.

Question 36

Five developments in the past decade have significantly influenced the landscape of global marketing.One of them is

A)the presence of a networked global marketspace.
B)an elimination worldwide of tariff and quotas.
C)a more aggressive attitude toward regulating international banking.
D)a sharp decline in economic espionage.
E)a gradual dissolution of unpopular trade agreements.

Question 37

Government taxes on products or services entering a country that primarily serve to raise prices on imports are referred to as

A)tariffs.
B)quotas.
C)WTO taxes.
D)foreign excise taxes.
E)trade subsidies.

Question 38

If you wanted to set up a business importing amber jewelry from Latvia to the United States,you would have to plan on paying the U.S.Customs Service a government tax of roughly 11 percent of the value of the product as a(n)

A)bribe.
B)tariff.
C)subsidy.
D)excise tax.
E)quota.

Question 39

Figure 7-2

The question mark in Figure 7-2 above leads to which of the following as a result of the imposition of tariffs and quotas?

A)an increase in world trade
B)a decrease in world trade
C)a limit on exports
D)an increase in exports
E)countertrade

Question 40

Recently,the Japanese government,under pressure from its domestic farm lobby,slapped government taxes on mushrooms,leeks,and the reeds used in tatami mats that were being imported from China.These taxes Japan levied are referred to as

A)WTO taxes.
B)quotas.
C)tariffs.
D)excise taxes.
E)subsidies.

Question 41

The European Union is an economic and political union of ________ member countries that have eliminated most barriers to the free flow of products,services,capital,and labor across their borders.

A)17
B)20
C)28
D)30
E)37

Question 42

Coca-Cola has operations in all but three nations in the world and Pepsi-Cola is now available in more than 160 countries and territories,making the soft drink industry an example of

A)global competition.
B)acculturation.
C)free trade.
D)global branding.
E)transactional exchange.

Question 43

A trade war is initiated when

A)the World Trade Organization issues fines to two or more corporations in a country.
B)two or more companies attempt to undercut one another's pricing strategy.
C)a country begins to accept imports for a new product category or class.
D)a country reduces tariffs for a particular product category or class.
E)countries attempt to damage each other's trade with excessive tariffs and quotas.

Question 44

To eliminate the need to continually monitor currency exchange rates,16 of the countries in the European Union (EU)have adopted a common currency,which is called the

A)pound.
B)franc.
C)euro.
D)mark.
E)dollar.

Question 45

Global competition exists when

A)a firm produces and markets its products domestically rather than globally.
B)firms originate,produce,and market their products and services worldwide.
C)two firms from two different countries compete for market share in a single domestic market.
D)two or more firms from different nations combine their resources to market products in a single domestic market.
E)the firm from one nation dominates the market for its product in every nation.

Question 46

An institution that sets rules governing trade between its members through a panel of trade experts who decide on trade disputes between members and issue binding decisions is referred to as the

A)League of Nations (LoN).
B)World Trade Organization (WTO).
C)Association for Commerce Equity (ACE).
D)United Nations Board of Trade (UNBT).
E)Global Better Business Bureau (BBB-G).

Question 47

To eliminate the need to continually monitor currency exchange rates,________ of the countries in the European Union (EU)have adopted a common currency called the euro.

A)11
B)16
C)20
D)28
E)32

Question 48

The North American Free Trade Agreement was designed to encourage free trade between

A)North America,Central America,and South America.
B)the United States and the European Union.
C)member countries originally from NATO (North Atlantic Treaty Organization).
D)the United States,Canada,and Mexico.
E)the United States,Canada,and the United Kingdom.

Question 49

In terms of the global marketplace,there are three primary types of companies: ________ firms,multinational firms,and transnational firms.

A)worldwide
B)conglomerate
C)intercontinental
D)international
E)cosmopolitan

Question 50

There are ________ World Trade Organization countries,including the United States,which account for more than 90 percent of world trade.

A)31
B)52
C)97
D)133
E)162

Question 51

The EU has benefited its member nations in part because

A)there is a legally binding code of economic conduct.
B)there is immunity against world recessions.
C)there are fewer regulatory restrictions on transportation,advertising,and promotion.
D)there is a common language advantage among EU consumers.
E)most companies within the EU are engaging in strategic global partnerships.

Question 52

CAFTA-DR is a comprehensive free trade agreement between Costa Rica,the Dominican Republic,El Salvador,Guatemala,Honduras,Nicaragua,and

A)the United States.
B)Panama.
C)Belize.
D)Cuba.
E)Mexico.

Question 53

Russia currently has a limit on pork of 400,000 metric tons annually that can be imported from any country.This restriction would be considered a

A)tariff.
B)trade imbalance.
C)limit tax.
D)quota.
E)subsidy.

Question 54

When firms originate,produce,and market their products and services worldwide,it is referred to as

A)acculturation.
B)free trade.
C)global branding.
D)global competition.
E)transactional exchange.

Question 55

Which of the following statements about the World Trade Organization (WTO)is most accurate?

A)The World Trade Organization is a temporary institution.
B)The 168 member countries of the WTO account for less than 25 percent of world trade.
C)The WTO sets rules governing trade between its members and the rest of the world.
D)The WTO uses panels of trade experts who can issue nonbinding recommendations.
E)The WTO was formed by the major industrialized nations of the world.

Question 56

The European Union (EU)consists of 28 countries with about 750 million consumers.The EU has eliminated most barriers to the free flow of products,capital,and labor across its borders.Which of the following countries is not a member of the EU?

A)Poland
B)Greece
C)Ireland
D)Switzerland
E)France

Question 57

The European Union (EU)has been beneficial to electronic commerce because it is no longer necessary to

A)use multiple languages when settling accounts for purchases made across borders.
B)continually monitor currency exchange rates among participating nations.
C)trade with the former Eastern European communist countries.
D)obey international e-trade regulations.
E)use the American dollar as the economic standard.

Question 58

The EU has benefited firms in its member nations because

A)it provides a safe haven in times of world economic crises.
B)there is a common language advantage among EU consumers.
C)most companies within the EU are engaging in strategic global partnerships.
D)there is now a legally binding code of economic conduct.
E)firms do not need to market their products and services on a nation-by-nation basis.

Question 59

Which of the following statements about the World Trade Organization (WTO)is most accurate?

A)The WTO acts as an agent in trade negotiations between its members and the remainder of the world.
B)The 119 member countries of the WTO account for less than 25 percent of world trade.
C)The WTO attempts to mitigate trade wars between countries.
D)The WTO uses legal scholars who can only issue nonbinding recommendations.
E)The WTO was formed by the United Nations.

Question 60

The World Trade Organization (WTO)refers to

A)the world's largest banking institution responsible for establishing and maintaining equitable exchange rates for all member nations.
B)the world's largest licensing institution responsible for the certification of products distributed to a global market.
C)an institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.
D)a multinational trade organization composed of the world's wealthiest nations whose primary purpose is to aid in the economic growth of developing nations.
E)a multinational trade organization comprised of the world's wealthiest nations whose primary purpose is to promote free trade economies.

Question 61

A global marketing strategy refers to

A)the strategy used by multinational firms that have as many different product variations,brand names,and advertising programs as countries in which they do business.
B)the strategy of transnational firms not to employ adaptive marketing techniques when there are cultural differences,but to redirect their marketing resources toward customer education.
C)the strategy of transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
D)the global strategy of seeking out already established firms in other nations and selling them the rights to manufacture and distribute the firm's products through a host nation's local businesses.
E)the strategy currently used by most U.S.domestic firms that when entering a new international market,these firms offer only those products that require the least amount of product adaptation.

Question 62

A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.However,adaptations of global brands are made

A)only if required by government regulations in the host market.
B)only in its initial introduction into a market and only until the brand is recognized.
C)by domestic competitors causing brand confusion.
D)only when necessary to better connect the brand to consumers in different markets.
E)when there is a serious drop in market share.

Question 63

Which of the following types of firms would be most likely to use a global marketing strategy?

A)multidomestic
B)multinational
C)multicountry
D)transnational
E)transborder

Question 64

Disney employed a(n)________ marketing strategy for its Disneyland Paris,particularly when it came to the eateries in the park.These restaurants featured recipes that were revised for local tastes,alcoholic beverages (not permitted in previous parks),and increased outdoor seating.

A)global
B)transnational
C)multidomestic
D)meganational
E)international

Question 65

Generally speaking,a(n)________ firm markets its existing products and services in other countries the same way it does in its home country.

A)meganational
B)international
C)multinational
D)transnational
E)intranational

Question 66

A(n)________ firm engages in trade and marketing in different countries as an extension of the marketing strategy in its home country.

A)multidomestic
B)meganational
C)international
D)multinational
E)transnational

Question 67

Lever Europe,a division of Unilever,markets Snuggle fabric softener.But in 10 European countries,it uses seven brand names,including Kuschelweich in German,Coccolino in Italy,and Mimosin in France.These products also have different packages,different advertising programs,and occasionally different formulas.From this information,we can assume that Lever Europe uses a(n)________ marketing strategy.

A)ethnocentric
B)transnational
C)global
D)international
E)multidomestic

Question 68

A firm that views the world as consisting of unique parts and markets to each part differently is referred to as a(n)

A)meganational firm.
B)extranational firm.
C)international firm.
D)multinational firm.
E)transnational firm.

Question 69

In terms of the global marketplace,there are three primary types of companies: international firms,multinational firms,and transnational firms.The key factor that distinguishes one from another is

A)the firm's financial capacity to take risks.
B)the willingness and ability to embrace diversity and cultural differences.
C)the firm's orientation toward and strategy for global markets and marketing.
D)the relative position of the product or service in terms of its life cycle.
E)the relative size of the firm both in financial terms and in production capacity.

Question 70

A(n)________ firm views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences.

A)transcontinental
B)multidomestic
C)international
D)multinational
E)transnational

Question 71

Companies that use a(n)________ marketing strategy have as many different product variations,brand names,and advertising programs as countries in which they do business.

A)ethnocentric
B)multidomestic
C)transnational
D)global
E)international

Question 72

A multidomestic marketing strategy refers to

A)the strategy of transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
B)the strategy used by firms that use the same product variations,brand names,and advertising programs for every country in which they do business.
C)the strategy used by firms that have as many different product variations,brand names,and advertising programs as countries in which they do business.
D)the strategy of seeking out already established firms in other nations and selling them the rights to manufacture and distribute the firm's products.
E)the strategy currently used by most U.S.domestic firms that when entering a new international market,these firms offer only those products that require the least amount of product adaptation.

Question 73

In terms of the global marketplace,there are three primary types of companies: international firms,________ firms,and transnational firms.

A)large-scale
B)conglomerate
C)intercontinental
D)cosmopolitan
E)multinational

Question 74

U.S.appliance manufacturers note that people in Northern Europe shop only once a week,so they need bigger refrigerators than Southern Europeans,who shop daily.Furthermore,Northern Europeans insist that freezers should be on the top just as firmly as Southern Europeans want them on the bottom.Based on this,U.S.appliance manufacturers would more likely be successful if they used a(n)________ marketing strategy.

A)global
B)multidomestic
C)transnational
D)meganational
E)international

Question 75

Mars,America's second-largest candy company,began doing business in Russia in the late 1980s.The Snickers bar is one of the top-selling candies in Russia and is marketed in much the same way as it is in the United States.What type of global company is Mars?

A)international firm
B)multidomestic firm
C)transnational firm
D)meganational firm
E)multinational firm

Question 76

A global brand refers to

A)two or more domestic products that coincidentally share the same brand name but represent two completely unrelated products.
B)two or more international products that coincidentally share the same brand name but represent two completely unrelated products.
C)a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.
D)a brand that is essentially the same but that has minor adaptations made to meet the more specific needs of different nations.
E)a brand marketed under different names in multiple countries with similar and centrally coordinated marketing programs.

Question 77

A brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs is referred to as a(n)

A)transnational brand.
B)international brand.
C)multinational brand.
D)global brand.
E)meganational brand.

Question 78

The administrative,marketing,and manufacturing operations that many international firms,multinational firms,and transnational firms have around the world are often called

A)divisions.
B)outlets.
C)departments.
D)markets.
E)holding companies.

Question 79

Which of the following statements regarding global brands is most accurate?

A)A global brand has centrally coordinated marketing programs.
B)A global brand is marketed under different names but uses identical ads for all markets.
C)A global brand alters the product formulation or service for each geographical region.
D)A global brand delivers varying benefits based on the GDP of each country.
E)A global brand is a collaborative effort among several different transnational firms.

Question 80

The strategy transnational firms employ that standardizes marketing activities when there are cultural similarities and adapts them when cultures differ is referred to as a(n)

A)global marketing strategy.
B)integrated marketing strategy.
C)transnational marketing strategy.
D)meganational marketing strategy.
E)international marketing strategy.