Deck 13: Global Marketing

Question 1

When Procter & Gamble introduced Pampers disposable diapers into Japan, it used the same pricing strategy as it used in the United States. P&G did not realize the typical Japanese mother changes her baby's diapers about 14 times a day-twice as often as her U.S. counterpart. Thus, Pampers were too expensive for the Japanese market. What kind of a problem did P&G experience when it introduced Pampers in Japan?

A) Cultural misunderstanding
B) Political uncertainty
C) Import Restrictions
D) Exceptionally high taxation

Answer 1

A
Explanation: Differences in the cultural environment of foreign countries may be misunderstood or not even recognized because of the tendency for marketing managers to use their own cultural values and priorities as a frame of reference.

Question 2

All of the following are stated offensive goals of firms investing in foreign countries except to

A) increase long-term growth and profit prospects.
B) maximize total sales revenue.
C) take advantage of economies of scale.
D) compete with foreign companies on their own turf instead of in the United States.

Answer 2

D
Explanation: Competing with foreign companies on their own turf instead of in the United States is a defensive goal.

Question 3

How does the multidomestic corporation differ from the global corporation?

A) The multidomestic companies rely on management teams made up of nationals; global corporations use management teams from the home office.
B) Multidomestic is highly centralized, while global corporations are highly decentralized.
C) Multidomestic companies use a standardized marketing strategy; global companies use a rigid marketing strategy.
D) Multidomestic companies pursue different strategies in each of their foreign markets; global companies have an integrated approach.

Answer 3

D
Explanation: The multidomestic company pursues different strategies in each of its foreign markets. The global company views the world as one market and pits its resources against the competition in an integrated fashion.

Question 4

Chrysler pulling out of a deal with China worth billions of dollars as the Chinese government refused to protect Chrysler's rights to limit access to technological information illustrates which aspect of problems associated with entering foreign markets?

A) Cultural misunderstandings
B) Political uncertainty
C) Exchange controls and ownership restrictions
D) Import restrictions

Question 5

The Chinese are not big consumers of dairy products. In China, Frito-Lay introduced its popular Cheetos snack food as cheeseless and consisting of flavors such as "Savory American Cream" and "Zesty Japanese Steak." This action taken by Frito-Lay is an example of

A) a successful adaptation to cultural differences.
B) American markets reaching saturation.
C) a takeoff on a popular theme used in the United States.
D) the dramatic changes that have taken place in China.

Question 6

According to Michael Porter's Diamond Model, all of the following are factors that determine the competitive advantage or disadvantage of a nation, except

A) factory conditions.
B) demand conditions.
C) related and supporting industries.
D) company strategy, structure, and rivalry.

Question 7

At the turn of the century, firms scaled back their investment plans in Russia due to an economy troubled by runaway inflation and a plummeting ruble. Identify one of the main problems faced by firms entering Russian markets.

A) Cultural misunderstanding
B) Political uncertainty
C) Ownership restrictions
D) Social customs

Question 8

Exxon Mobile opened its first 'On the Run' store in Chile. The service station/store combines the familiar pumping islands, convenience stores, and separate food courts. The success of the store led to the opening of more than 300 'On the Run' stores worldwide. Identify the offensive strategic goal that can explain why Exxon Mobil opened 'On the Run' stores worldwide.

A) To increase long-term growth and profit prospects.
B) To prevent global consolidation.
C) To preempt competitors' from opening similar stores.
D) To avoid being locked out of markets by arriving too late.

Question 9

There is a small, but growing market for golfing equipment in China. Which of the following is an example of a defensive strategic goal that can be used to explain why American manufacturers of golfing equipment like Wilson and Titleist are eager to export their products to the Chinese?

A) To improve overall market position.
B) To increase long-term growth and profit prospects.
C) To avoid being locked out of markets by arriving too late.
D) To take advantage of economies of scale.

Question 10

Which of the following is an example of a defensive strategic goal that might be used to explain why MTV developed MTV European, a pan-European cable and satellite system that transmits music-based programming across the continent?

A) To maximize its total sales revenues.
B) To improve its overall market position.
C) To increase its long-term growth and profit prospects.
D) To preempt competitors' global moves.

Question 11

Which of the following statements pertaining to differences in cultures across the world is true?

A) Patting a child on the head is a grave offense in Thailand or Singapore, since the head is revered as the location of the soul.
B) In an Oriental culture, touching another person is considered a sign of warmth and friendship.
C) Carrying on a conversation with your hands in your pockets makes a good impression in France, Belgium, Finland, and Sweden.
D) It is rude to leave anything on your plate when eating in Egypt.

Question 12

By investing solely in domestic operations or not willing to adapt products to foreign markets, U.S. companies are more susceptible to

A) higher economies of scale.
B) domestic competition.
C) foreign incursions.
D) diminished operating costs.

Question 13

Governments are unstable in many countries; social unrest and even armed conflict must sometimes be reckoned with. This problem that a firm faces while entering the market pertains to

A) import restrictions.
B) political uncertainty.
C) cultural misunderstanding.
D) ownership restrictions.

Question 14

Shaking your head from side to side means yes in Bulgaria and Sri Lanka. This is an example of cultural differences pertaining to _____ and could lead to marketing problems for firms attempting to enter global markets.

A) physical contact
B) body language
C) promptness
D) social customs

Question 15

Which of the following is an example of an offensive strategic goal that might be used to explain why Eastman Kodak is eager to expand into new international markets?

A) To maximize total sales revenue.
B) To increase its long-term growth and profit prospects.
C) To compete with foreign companies on their own turf instead of in the United States.
D) To take advantage of significant differences in operating costs in other countries.

Question 16

According to Michael Porter's Diamond Model, which factors refer to a nation's ability to turn its natural resources, skilled labor, and infrastructure into a competitive advantage?

A) Factor conditions
B) Demand conditions
C) Related and supporting industries
D) Company strategy, structure, and rivalry

Question 17

Before Michael Porter developed the Diamond Model, he studied companies in more than 100 industries. While most successful companies differed in many ways and employed different strategies, a very important common theme that emerged was that

A) firms that have been extremely successful in marketing in the United States must duplicate the same strategy in foreign markets.
B) a company that succeeds on a global scale first succeeded in intense domestic competition.
C) marketing research is not important in foreign markets but extremely important in domestic markets.
D) marketing managers must organize the same controllable decision variables that exist in domestic markets in foreign markets with no changes whatsoever.

Question 18

Foreign holdings in business ventures in India were limited to a maximum of 40 percent until recently. Once this ban was lifted, numerous global companies rushed to invest in this market. This delay in investment in India can be attributed to

A) cultural misunderstandings.
B) import restrictions.
C) political uncertainty.
D) exchange controls and ownership restrictions.

Question 19

Breath Right nasal strips are adhesive pads with a small spring inside them; when attached to the nose, they pull the nasal passages open and make it easier to breathe. Their manufacturer, CNS Inc., sells the nasal strips to countries in four different continents by using standardized marketing activities. CNS Inc., is an example of a

A) multidomestic company.
B) start-up company.
C) global company.
D) domestic company.

Question 20

All of the following are stated defensive goals of firms investing in foreign countries except

A) competing with foreign companies on their own turf instead of in the United States.
B) having access to technological innovations that are developed in other countries.
C) preempting competitors' global moves.
D) improving overall market position.

Question 21

The underlying dimensions of which of these refer to the ability to project a global versus national identity, a worldwide versus domestic commitment to employees, and a willingness to tolerate interdependence among business units?

A) Structure
B) Management processes
C) People
D) Culture

Question 22

_____ companies pursue different strategies in each of their foreign markets. They could have as many different product variations, brand names, and advertising campaigns as countries in which they operate.

A) Multidomestic
B) Domestic
C) Global
D) Start-up

Question 23

Tariffs, import quotas and other types of import restrictions hinder global business. These are usually established to promote _____ and can be a huge road block for multinational firms.

A) trade relations
B) self sufficiency
C) dependency
D) international trade

Question 24

Which external environmental factor conducive to a global strategy pertains to steep learning curves, worldwide sourcing efficiencies, and significant differences in host-country costs?

A) Market factors
B) Economic factors
C) Environmental factors
D) Competitive factors

Question 25

All of the following are ground rules that marketers can use when planning a global branding campaign, except

A) understanding similarities and differences in the global branding landscape.
B) balancing global and local control.
C) establishing operable guidelines.
D) implementing a totally localized brand equity measurement system.

Question 26

To assess the ability of consumers in a foreign market to buy, some broad measures need to be examined. Which of the following is not one among them?

A) Per capita income
B) Political environment
C) Rate of growth in buying power
D) Extent of available financing

Question 27

Global customers, shorter product life cycles, and the ability to globalize distribution channels pertain to which external factor conducive for a global strategy?

A) Market factors
B) Economic factors
C) Environmental factors
D) Competitive factors

Question 28

In 1990, Tyco, the toy manufacturer, believed it needed to expand into the European market to keep up with the global expansion of Toys R Us. Tyco immediately began building manufacturing operations in Belgium, Italy, Spain, and Germany. Tyco's rapid push to enter the global market strained the ranks of its senior executives who knew little about running an international company, but did not wish to relinquish control to foreign superiors. The toy company eventually had to close or consolidate many of its European holdings. From this information, it can be assumed that Tyco's growth was impeded by internal problems due to

A) its inability to determine whether to act as a multidomestic company or a global company.
B) an economic downturn that resulted in declining toy sales.
C) new pricing and promotion restrictions that resulted from the creation of the European union.
D) its centralized structure, its people, and its management processes.

Question 29

Several internal factors can either facilitate or impede a company's efforts to undertake a global approach to marketing strategies. These factors and their underlying dimensions are structure, culture, people and

A) management processes.
B) strategic partnerships.
C) direct marketing.
D) competition.

Question 30

Factors constituting the external environment that are conducive to a global strategy include

A) market factor.
B) structure factor.
C) people factor.
D) cultural factor.

Question 31

In the United States, the use of cosmetics is common among women of all income classes. However, in Latin America, upper-income women want high-quality cosmetics promoted in prestige media and sold through exclusive outlets. In some rural and less prosperous areas, cosmetics must be inexpensive; in other rural areas, women do not accept cosmetics. Identify the organizational issue that must be considered here by marketing managers seeking to enter the Latin American market.

A) Population characteristics
B) Employee characteristics
C) Individual characteristics
D) Religious characteristics

Question 32

Playboy Enterprises has seen the U.S. circulation of Playboy magazine decline by more than 50 percent since 1972, but its international circulation is growing rapidly. It publishes seventeen foreign editions and successfully markets its bunny logo merchandise in Asia. Which of the following is an example of a market factor that can be used to explain the success of its global marketing strategy?

A) Homogeneous market needs
B) Favorable government policies
C) Improving communications
D) Worldwide sourcing efficiencies

Question 33

To be successful, organizations must collect and analyze pertinent information to support the basic go/no-go decision before entering foreign markets. All of the following are organizational issues that must be considered toward this end, except

A) population characteristics.
B) ability to buy.
C) differences in research tasks and processes.
D) duplication of previous success.

Question 34

Some nations establish limits on the amount of earned and invested funds that can be withdrawn from it. These exchange controls are usually established by nations that

A) a high trade-surplus.
B) are a part of larger trade agreements.
C) are experiencing balance-of-payment problems.
D) have an open economy.

Question 35

When planning a global branding campaign, if the meanings of the brand names and all related trademarked identifiers are clear, they can be an invaluable source of brand equity worldwide. Which of the following does this pertain to?

A) Establishing brand partnerships
B) Leveraging brand elements
C) Implementing a global brand equity measurement system
D) Establishing marketing infrastructure

Question 36

With regard to global branding balancing global and local control is very important in all of the following areas, except

A) organization structure.
B) entry strategies.
C) individual behavior.
D) coordination processes.

Question 37

All of the following are "market factors" that are conducive to a global strategy except

A) global customers.
B) shorter product life cycles.
C) transferable brands and advertising.
D) steep learning curves.

Question 38

The underlying dimensions of which of the following internal factors relates to the capabilities and resources available to perform global planning, budgeting, and coordination activities?

A) Structure
B) Management processes
C) Culture
D) People

Question 39

The ease of installing a centralized global authority and the absence of rifts between present domestic and international divisions or operating units is the underlying dimensions of which of the following internal factors?

A) Structure
B) Management processes
C) People
D) Culture

Question 40

Local managers at General Foods are given the authority to make necessary decisions and are held accountable for results. From this information, General Foods can be categorized as a

A) global corporation.
B) multi-domestic corporation.
C) national corporation.
D) state-owned corporation.

Question 41

An American manufacturer sells directly to organizational buyers in the foreign market. He is most likely to have _____ over distribution.

A) no control
B) absolute control
C) very little control
D) much control

Question 42

A firm can use _____ to determine whether there is an unsatisfied need for which a new product could be developed to serve a foreign market.

A) global marketing research
B) test marketing
C) product design and development
D) varied pricing strategies

Question 43

Kraft blends different coffees for its British market (they drink their coffee with milk), for its French market (they drink their coffee black) and its Latin American market (they want chicory-flavored coffee). These product variations are part of Kraft's _____ strategy.

A) global product
B) global pricing
C) global advertising
D) global distribution

Question 44

Census data for many countries do not exist while for some, it will be difficult to obtain. The problem encountered by researchers here in using census data pertains to its

A) language.
B) timeliness.
C) data content.
D) availability in the United States.

Question 45

Selmix Exports Inc. is an American firm exporting agricultural commodities to India. It sells all its products to resident buyers located in the United States. Identify the statement that best describes Selmix Exports' distribution system and the amount of control it has on it.

A) It has a high degree of control over its global distribution system.
B) It has a great potential to influence foreign consumer.
C) It has the most indirect channels of distribution.
D) It has a distribution system that is most direct in nature.

Question 46

When American manufacturers first started exporting refrigerators to Europe, they essentially exported the same models sold in the United States. However, the refrigerators were the wrong size, shape, and temperature range for some areas and had weak appeal in others-thus failing miserably. This failure can be best attributed to

A) the lack of personal selling on the part of the sales force.
B) entering a domestic market without extensive product planning.
C) the lack of adequate pricing strategies in foreign markets.
D) problems encountered in effectively using census data.

Question 47

A manufacturer that establishes its own foreign branch, and sells directly to other intermediaries will have

A) no control over distribution.
B) absolute control over distribution.
C) to relinquish some control over distribution.
D) lesser potential to influence these intermediaries.

Question 48

In which of the following channel arrangements would an American manufacturer exporting goods to a foreign market have the greatest control over distribution?

A) Manufacturer uses a resident buyer in the American market.
B) Manufacturer has an export agent in the American market.
C) Manufacturer sells its products directly to distributors in the foreign market.
D) Manufacturer sells directly to organizational buyers in the foreign market.

Question 49

In which of the following channel arrangements would an American manufacturer exporting goods to a foreign market have the least control over distribution?

A) Manufacturer uses a resident buyer in the American market.
B) Manufacturer has an agent in the foreign market.
C) Manufacturer sells its products to distributors in the foreign market.
D) Manufacturer sells directly to organizational buyers in the foreign market.

Question 50

U.S. companies seeking to successfully market to global consumers must

A) be sure that the company and brand name are translated exactly-with no changes-in the language of the target country.
B) use the same general marketing strategy used in all geographic areas.
C) price products in the target country or region at exactly the same level as in its home market.
D) decide whether the targeted country or region will require a unique marketing strategy.

Question 51

A company looking to expand globally should pretest integrated marketing communication efforts in the targeted country to

A) ensure that messages are translated accurately.
B) avoid spending resources to correct subtle differences in meaning.
C) reduce the competitive advantage of other global players.
D) replace its brand name with a local one.

Question 52

The United States takes a census every 10 years. Japan and Canada conduct one every five years and some northern European nations are abandoning the census as a data-collection tool altogether. These differences create a problem in using census data and pertain to

A) language.
B) timeliness.
C) data content.
D) availability in the united states.

Question 53

All of the following observations are true of the global distribution strategy except

A) Selling to resident buyers, export agents, or export merchants located in the United States constitutes the indirect channel of distribution.
B) Manufacturers have greater control over distribution when they select agents and distributors located in foreign markets.
C) If manufacturers establish their own foreign branch, they greatly increase control over their global distribution system.
D) Agents located in foreign markets assume title to the manufacturers' products, while distributors do not.

Question 54

Cultural factors such as the group's values concerning acquisition of material goods, the role of the family, and the positions of men and women in society can have an effect on marketing because

A) each can influence consumer behavior.
B) they provide data for in-depth demographic information.
C) they can help duplicate previous success.
D) they provide a firm the advantage of using a partner's distribution system.

Question 55

All of the following are suggestions for companies seeking to successfully market to global consumers, except

A) ensure that the company and brand name translate favorably in the language of the target country.
B) make sure the product is always exported to the foreign country without modifications.
C) research the prices of similar products in the target country or region.
D) decide whether the targeted country or region will require a unique marketing strategy.

Question 56

Which of the following observations about common distribution channels for global marketing is true?

A) Manufacturers have greater control over an export merchant than they have over a foreign branch.
B) Manufacturers have no control over a resident buyer.
C) Manufacturers have nearly complete control over an export agent.
D) Manufacturers have complete control over foreign distributors and foreign agents.

Question 57

Most foreign nations do not include an income question on their census while others omit such items as marital status or education levels. What problem that the market researcher is likely to encounter in foreign countries is addressed here?

A) Language
B) Timeliness
C) Data content
D) Availability in the United States

Question 58

Which of the following is a problem associated with using census data for in-depth demographic information?

A) None of the nations publish their census reports in English.
B) Data contained in a census often omit items of interest to researchers.
C) Canada does not conduct a census and instead relies on population registers.
D) Census data for Japan does not exist.

Question 59

The soaps sold by Procter & Gamble in Japan goes through a general wholesaler, a product wholesaler, a product-specialty wholesaler, a regional wholesaler, a local wholesaler, and a retailer before it reaches the customer. This is a description of the _____ P&G uses in Japan.

A) advertising strategy
B) product strategy
C) distribution strategy
D) promotion strategy

Question 60

Marketing consumer goods successfully in global markets requires a long-term commitment because

A) long term commitments guarantee profits.
B) it may take time to establish an identity in new markets.
C) new markets are not developed.
D) marketing strategies for new markets always take a longer time to formulate.

Question 61

Franchising is similar to licensing but tends to involve

A) longer-term commitments.
B) strict operating procedures.
C) manufacturing firms rather than service firms.
D) cross-functional teams.

Question 62

Which is true of selecting media in foreign markets?

A) There is a media directory that covers all the media available throughout the world.
B) Media that are traditionally used in the domestic market may not be available in foreign markets.
C) Where data are available, their accuracy is always conclusive.
D) If media are available, they are able to reach all potential buyers.

Question 63

Coca-Cola granted a South African bottling company the patent rights, trademark rights, and the right to use its formulas so that Coca-Cola could have a presence in the nation. Which of the following describes a potential disadvantage of this licensing agreement?

A) Loss of control over marketing and manufacturing strategies.
B) Payment of import duties.
C) Potential for competitive conflict with other bottlers in South Africa.
D) Huge costs inherent in such a strategy.

Question 64

Pizza Hut has sold limited rights to use its brand name in return for a lump sum of money and a share of future profits to a group of business people in Hungary. So far, the Hungarian group has opened sixteen Pizza Hut restaurants in that Eastern European country. Pizza Hut used _____ to enter the international market.

A) direct ownership
B) a joint venture
C) a strategic alliance
D) franchising

Question 65

An advantage believed to be gained by using use a purely local agency for advertising in foreign markets is that

A) companies are able to take advantage of economies of scale.
B) in emerging markets, they take a more entrepreneurial and fresher approach to advertising than global agencies.
C) local advertising is always more successfully than advertising through global agencies.
D) because they employ only foreign nationals they can better adapt the firm's message to all cultures.

Question 66

_____ can be used as a strategy for bypassing restrictions on advertising enforced by some foreign governments.

A) Market entry
B) Telemarketing
C) Sales promotions
D) Strategic alliances

Question 67

An advantage of using global advertising agencies is that

A) companies are able to take advantage of economies of scale and other efficiencies.
B) in emerging markets, they take a more entrepreneurial and fresher approach to advertising than local agencies.
C) global advertising can always be used more successfully than advertising through local agencies.
D) since they employ only local nationals they can better adapt the firm's message to the local culture.

Question 68

All of the following are advantages for a firm entering into a joint venture except

A) the firm may be able to benefit from a partner's knowledge of the host country's competitive position, culture, language, political systems etc.
B) the firm gains by sharing costs and risks of operating in a foreign market.
C) the firm will have tight control over a foreign subsidiary needed to engage in coordinated global attacks against rivals.
D) it allows firms to take advantage of a partner's distribution system, technological know-how, or marketing skills.

Question 69

_____ is the easiest and most common strategic approach for a company making its first foray into the international marketplace.

A) Exporting
B) Importing
C) Franchising
D) Licensing

Question 70

Exporting has two distinct advantages - it avoids the cost of establishing manufacturing operations in the host country, and

A) it reduces the product cost.
B) helps a firm achieve experience-curve and location economies.
C) minimizes production errors.
D) creates a ready market to set up production units at a later time.

Question 71

_____ occurs when a company produces the product outside the final destination and ships it there for sale.

A) Licensing
B) Exporting
C) Importing
D) Joint ventures

Question 72

In _____, a company may decide to share management with one or more collaborating foreign firms.

A) joint ventures
B) licensing agreements
C) franchising
D) direct ownerships

Question 73

The major advantage associated with the use of licensing is

A) complete control of proprietary information.
B) elimination of development and risk costs associated with opening up a foreign market.
C) instant credibility and gains in the foreign country.
D) firm has tight control over manufacturing, marketing, and strategy that is required for realizing economies of scale.

Question 74

Companies granting patent rights, trademark rights, and the right to use a technological process to foreign partners are involved in

A) exporting.
B) importing.
C) franchising.
D) licensing.

Question 75

One of the disadvantages associated with the use of a(n) _____ strategy is the need to delegate marketing responsibility for the product to foreign agents who may or may not be dependable.

A) partnership
B) franchising
C) licensing
D) export

Question 76

In order to have a presence in South Africa, while avoiding development costs and risks associated with setting up a base in a foreign market, Chic-Fill-A decided to use _____ to open a number of restaurants in South Africa.

A) licensing
B) direct ownership
C) a strategic alliance
D) exporting

Question 77

Which of the following is not true of sales promotion in foreign markets?

A) Sales promotions often contain certain characteristics that are more attractive than other elements of the promotion mix.
B) In less-wealthy countries, consumers tend to be even more interested in saving money through price discounts, sampling, or premiums.
C) Sales promotion can not be used as a strategy for bypassing restrictions on advertising placed by some foreign governments.
D) Sales promotion can be an effective means for reaching people living in rural locations where media support for advertising is virtually nonexistent.

Question 78

Which of the following is a major constraint faced by global marketers in devising global pricing strategies?

A) Restrictions on advertising
B) Promotional mix
C) Non availability of media
D) Import duties

Question 79

RCA Corporation's experience with Japanese firms in the color TV technology market underscores the disadvantage associated with

A) exporting.
B) direct ownership.
C) joint venture.
D) licensing.

Question 80

E-Trade Group is an internet broker-dealer. It has entered into a(n) _____ agreement with Jerusalem Global, Ltd., an Israeli investment banking operation. E-Trade has granted the Israeli firm the right to use its name, its reputation, and its technology in a politically volatile environment. E-Trade bears none of the development costs and risks.

A) strategic alliance
B) exporting
C) direct ownership
D) licensing