Question 1

The appreciation of fashion, music, and a desire for novelty and trendier designs and images

Accepted Answer

A) are preferences found more in American teenagers than in most other cultures around the world. 
B) actually begin at age 10, but begin to decline significantly as students enter high school. 
C) ironically are found more for teenagers who cannot afford to make those purchases than for those who can. 
D) are preferences of teenagers around the world regardless of where they live. 
E) are often established early among European teens and they typically linger well into adulthood.

Question 2

In Latvia, only one six-lane highway exists, connecting Riga, its capital, with Moscow. Otherwise, the roads are two lanes and many are made of cobblestones or bricks. This limits the speed with which deliveries can be made and requires that delivery trucks be quite small. The road network in Latvia is an example of problems with a country's

Accepted Answer

A) capital improvements. 
B) fixed-asset base. 
C) geopolitical wealth. 
D) asset wealth. 
E) economic infrastructure.

Question 3

Which of the following is an advantage inherent in the use of licensing?

Accepted Answer

A) The licensor retains control of its product. 
B) The licensor is protected from creating a potential competitor. 
C) It provides an exemption from domestic trade regulations. 
D) There is an increase in potential profit compared with direct investment. 
E) The licensee gains information about the dynamics of the market.

Question 4

U.S. appliance manufacturers find that different customs about shopping must be used to determine local product design. For instance, 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 __________ marketing strategy.

Accepted Answer

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

Question 5

Foreign countries with very low per capita incomes may still be attractive markets for some goods. To get a more reliable picture of a country's purchasing power, a country's __________ must also be considered.

Accepted Answer

A) total income 
B) total area 
C) geographical location 
D) culture 
E) income distribution

Question 6

Consider the distribution channels through which a product manufactured in one country must travel to reach its destination in another country. In which step of the distribution channel is it suggested that the channels can be very long or surprisingly short?

Accepted Answer

A) the seller 
B) the seller's international marketing headquarters 
C) channels between nations 
D) channels within the foreign nation 
E) final consumer

Question 7

Yum! Brands, the restaurant division of PepsiCo, has 12,600 KFC restaurants abroad, with more than 3,700 restaurants in China. Many of the latter are locally owned and subject to a contractual agreement that allows the owners to operate the business under the established KFC brand name and according to specific rules. Yum! Brands is engaged in

Accepted Answer

A) contract assembly. 
B) a joint venture. 
C) contract manufacturing. 
D) a partnership. 
E) franchising.

Question 8

What option for entering the global marketplace entails a domestic firm actually investing in and owning a foreign subsidiary or division?

Accepted Answer

A) exporting 
B) joint venture 
C) direct investment 
D) franchising 
E) licensing

Question 9

A firm's profit potential and control over marketing activities __________ as it moves from exporting to direct investment as a global market entry strategy.

Accepted Answer

A) becomes more stable 
B) increases 
C) levels off 
D) decreases 
E) becomes more unpredictable

Question 10

Which of the following is a disadvantage associated with licensing?

Accepted Answer

A) The licensee pays lower wages and sells at lower prices. 
B) The licensor may create its own competition. 
C) The foreign government dislikes it because it does not increase local employment. 
D) This is the most expensive and risky method for global expansion. 
E) The firm's brand does not get international exposure.

Question 11

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.

Accepted Answer

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

Question 12

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.

Accepted Answer

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

Question 13

What market entry option allows a company to make the least number of changes in terms of its product, its organization, and even its corporate goals?

Accepted Answer

A) exporting 
B) licensing 
C) joint venture 
D) direct investment 
E) franchising

Question 14

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

Accepted Answer

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 15

A global market entry strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits of the new company is referred to as

Accepted Answer

A) licensing. 
B) a joint venture. 
C) direct exporting. 
D) contract assembly. 
E) dual adaptation.

Question 16

Currency exchange rate refers to

Accepted Answer

A) the unit equivalency of all international currency. 
B) the ratio of a nation's basic unit of currency relative to the price of silver. 
C) the ratio of a nation's basic unit of currency relative to the price of gold. 
D) the price of one country's currency expressed in terms of another country's currency. 
E) the unit of wealth (gold, oil, diamonds, etc.) upon which a nation bases its national currency.

Question 17

The two global market entry strategies in which a company forgoes control of its product and governmental bureaucracy may bog down the effort are __________, respectively.

Accepted Answer

A) exporting and licensing 
B) licensing and joint venture 
C) joint venture and direct investment 
D) exporting and direct investment 
E) exporting and joint venture

Question 18

Starbucks and Tata Global Beverage have together formed TATA Starbucks Limited in order to bring Starbucks to India. The global market entry strategy is known as

Accepted Answer

A) franchising. 
B) a joint venture. 
C) licensing. 
D) direct investment. 
E) exporting.

Question 19

Global companies have five strategies for matching products and their promotion efforts to global markets. The strategy of selling virtually the same product in other countries is referred to as

Accepted Answer

A) product adaptation. 
B) product invention. 
C) brand adaptation. 
D) product extension. 
E) product integration.

Question 20

Identify and describe the factors a company should consider in order to do a thorough cross-cultural analysis. In your answer, define cross-cultural analysis.

Accepted Answer

The answer of Identify and describe the factors a company...

Exam 7: Understanding and Reaching Global Consumers and Markets