Deck 8: Global Marketing

Question 1

Manufactured goods account for the largest share of U.S. production output today.

Answer 1

False

Question 2

A noticeable trend toward multinational economic integration has developed since the end of World War II.

Answer 2

True

Question 3

The ability to adapt products to local preferences and culture is the key to success in foreign markets.

Answer 3

True

Question 4

A nation's size, per-capita income, and stage of economic development determine its prospects as a host for international business expansion.

Question 5

Firms often use more than one strategy to enter into foreign markets.

Question 6

Quotas on imports and export subsidies are different forms of tariffs.

Question 7

U.S. imports mainly include crude oil, machines, consumer electronics, and passenger cars.

Question 8

The two largest trading partners of the United States are Canada and Mexico.

Question 9

The recently ratified Treaty of Lisbon enables the European Union to enter into international agreements as a political entity.

Question 10

NAFTA has succeeded in achieving political integration among its member nations: the United States, Canada, and Mexico.

Question 11

Establishing a free-trade area is the simplest way to achieve multinational economic integration.

Question 12

A nation's basic system of transportation networks, communication systems, and energy facilities is referred to as its infrastructure.

Question 13

Nearly four of every five dollars in the United States' gross domestic product comes from services such as banking, entertainment, business and technical services, retailing, and communications.

Question 14

Administrative barriers are more subtle than tariffs.

Question 15

Global marketing is rapidly becoming a necessity for most U.S. companies.

Question 16

The three basic strategies for entering foreign markets are exporting, contractual agreements, and international direct investment.

Question 17

The labor conditions in a country are part of its political environment.

Question 18

The WTO makes binding decisions in mediating disputes and reduces trade barriers.

Question 19

The term "exchange rate" refers to the price of one nation's currency in terms of another country's currency.

Question 20

Walmart is the world's largest private employer and the largest retailer.

Question 21

A simple and inexpensive way for first-time exporters to reach foreign customers is to sell their products to an export-trading company.

Question 22

International direct investment does not provide a competitive advantage because of its high risk potential and high involvement characteristics.

Question 23

Subcontracting is a type of contractual agreement that assigns the production of goods or services to local or smaller firms.

Question 24

Pizza Hut franchises stores in areas with Arab and Indian populations. To accommodate dietary differences, the traditional American recipes are modified. Consequently, the advertising, packaging, and promotional message will change. Marketers refer to these changes as dual adaptation.

Question 25

A franchisee receives the right to sell the franchiser's products and to use the franchiser's name as well as a variety of marketing, management, and other services.

Question 26

An export-trading company provides the first-time exporter with expertise in locating foreign buyers and ensuring that its goods meet local labeling and testing laws.

Question 27

Licensing is advantageous compared to exporting as it provides access to local partner's distribution channels and also protection from legal barriers.

Question 28

Subcontracting with a local company provides protection from import duties.

Question 29

Foreign licensing agreements are valid for a specified time period after which they need to be revised or renewed.

Question 30

An importer is a firm that sells goods manufactured domestically in foreign markets.

Question 31

A manufacturing firm retains more control over the export process when it deals with an export-trading company rather than dealing with an export-management company.

Question 32

Licensing is an attractive entry strategy for small firms as it does not involve capital outlays.

Question 33

A company that changes its product's package size, price, and promotional message to meet the local market's taste is using a straight extension marketing strategy.

Question 34

Acquiring an existing firm in a country where the company wants to do business is a form of international direct investment.

Question 35

Use of straight extension strategy as part of global marketing strategy permits economies of scale in production and marketing.

Question 36

A successful implementation of a straight extension strategy creates universal recognition of a product for consumers from country to country.

Question 37

Manufacturers control marketing and distribution of their products while selling them through an export-trading company.

Question 38

The product invention strategy helps a firm take advantage of unique foreign market opportunities.

Question 39

Contractual agreements are less flexible compared to exporting strategies.

Question 40

Franchising is a low-risk way to enter a foreign market as it offers a proven concept.

Question 41

Which of the following is one of the major policy initiatives of the WTO?

A) Increasing the average level of education worldwide
B) Liberalizing world financial services
C) Promoting and protecting the environment
D) Regulating automobile production by less-advanced nations

Question 42

The activities of the World Trade Organization thus far have focused on dispute resolution rather than reducing trade barriers as:

A) the main aim of this organization is to increase the level of production in the developing nations.
B) the differences between the developed and developing nations have created a major roadblock to its progress.
C) the organization does not have the authority to make binding decisions on trade policies and trade barriers.
D) the organization is attempting to increase profit levels for developed nations.

Question 43

The goal of the European Union, a multinational economic community, is to:

A) liberalize the world financial services, telecommunications, and maritime markets.
B) help American workers, farmers, and small businesses thrive and grow.
C) remove all barriers to free trade among its members, and standardization of currencies and regulations.
D) extend free-trade benefits to most nations around the world.

Question 44

When a group of nations agree to buy and sell goods among themselves by abolishing tariffs and trade restrictions, the nations have created a _____.

A) customary market
B) cooperation council
C) political union
D) free-trade area

Question 45

Which of the following firms is ranked as the world's largest company in terms of annual sales?

A) General Electric
B) ExxonMobil
C) Walmart
D) Royal Dutch Shell

Question 46

The North American Free Trade Agreement (NAFTA) is a trade accord that removes trade barriers among:

A) countries in Western hemisphere and North, Central, and South America.
B) Canada, Mexico, and the United States.
C) the United States, the Dominican Republic, and Central American nations.
D) the United States and the European Union.

Question 47

Which of the following industries makes the largest contribution to the United States' gross domestic product?

A) Automobile industry
B) Service industry
C) Oil industry
D) Manufacturing industry

Question 48

Which of the following is true regarding the North American Free Trade Agreement (NAFTA)?

A) The member nations of the NAFTA have agreed to create a trade bloc similar to that of the European Union.
B) The major aim of the NAFTA is to increase the level of literacy among the United States, Mexico, and Canada.
C) NAFTA has been successful in creating the Free Trade Area of the Americas, the world's largest free-trade zone.
D) The member nations of NAFTA focus mainly on economic cooperation rather than on political integration.

Question 49

A nation's size, per-capita income, and stage of economic development determine its prospects as a host for _____.

A) regional economic integration
B) international business expansion
C) free-trade association
D) public private partnership

Question 50

In the 1800s, more than 90 percent of Americans worked in the _____ industry.

A) shipping
B) automobile
C) service
D) farming

Question 51

Which of the following products forms a major part of U.S. imports?

A) Agricultural products
B) Iron ore
C) Medical equipments
D) Crude oil

Question 52

Which of the following factors is most likely to be included in the political environment?

A) Inflation levels in different countries
B) Labor conditions in different countries
C) Exchange rate fluctuations in a country
D) Level of natural resources in a country

Question 53

_____ are the taxes levied on imported goods.

A) Excise duties
B) Import quotas
C) Subsidies
D) Tariffs

Question 54

Modifying the control panel of a washing machine to accommodate for those cultures that read from right to left would be considered a form of product invention.

Question 55

The fluctuation in exchange rates results in:

A) a country employing additional tariffs and quotas on imports to manage fluctuations.
B) a nation's currency becoming more or less valuable compared with those of other nations.
C) the possibility of an economy reaching short-run equilibrium at levels below or above full employment.
D) a relatively rapid economic growth and periods of relative stagnation or decline.

Question 56

Outboard motors that are sold in the United States primarily as recreational products may be sold in a foreign country as basic transportation equipment. Such a practice is an example of product adaptation.

Question 57

The _____ serves as a forum for trade negotiations, and mediates trade disputes between countries throughout the world.

A) FTAA
B) GATT
C) European Union
D) WTO

Question 58

Nations with low per-capita incomes are usually good markets for:

A) automobiles and electronics.
B) expensive industrial machinery.
C) agricultural hand tools.
D) luxury goods.

Question 59

A nation's basic system of transportation networks, communication systems, and energy facilities form a part of its _____ environment.

A) social
B) political
C) legal
D) economic

Question 60

Which of the following actions generally helps marketers encounter new products, new approaches to distribution, or clever new promotional ideas?

A) Globalization
B) Developing core values
C) Market penetration
D) Product standardization

Question 61

Describe the World Trade Organization (WTO). Discuss its role and policies in regulating trade barriers.

Question 62

VB Group, a South African firm, is a leading supplier of African agricultural products to the world. It buys products from the domestic producers and resells them in international markets. The company maintains complete control over the marketing and distribution of the products in the foreign markets. VB Group is an example of a(n) _____.

A) subcontractor
B) export-trading company
C) export-management company
D) franchisee

Question 63

Which of the following international market entry strategies is most likely to offer a competitive advantage to the firms and is characterized by high levels of involvement and high risk potential?

A) Franchising
B) Sole sourcing
C) Foreign licensing
D) International direct investment

Question 64

Little Princess, a California-based company, is a creator of dolls and other toys for girls. The company is mainly involved in designing new toys and developing their prototypes. It has signed an agreement with some local toy manufacturers in Europe and North America to manufacture and distribute their toys in the local markets. These contracts are for a specified time period and permit the foreign marketer to distribute goods in a specified geographic area. Which of the following strategies is being used by Little Princess to enter foreign markets?

A) Exporting
B) Direct investment
C) Foreign licensing
D) Sole sourcing

Question 65

What are the different ways to achieve multinational economic integration? Why are some nations not keen on entering into free trade?

Question 66

_____ is a form of global marketing that involves a continuous effort in marketing a firm's merchandise to customers in other countries.

A) Business process reengineering
B) Exporting
C) Sole sourcing
D) Social referencing

Question 67

Developing a completely new product to take advantage of a unique foreign opportunity is called product:

A) prototyping.
B) commercialization.
C) invention.
D) origination.

Question 68

Honda, a Japanese firm, builds a factory in Alabama to make minivans to be marketed in the United States. Which of the following strategies of entering into a foreign market is best represented by this example?

A) Subcontracting
B) Franchising
C) International direct investment
D) Licensing

Question 69

Why is global marketing important for a nation and its marketers?

Question 70

A strategy for going global through contractual agreements in which the production of goods or services is assigned to local companies is termed as _____.

A) sole sourcing
B) a differentiation strategy
C) an offset strategy
D) subcontracting

Question 71

_____ is a contractual agreement that grants marketers in other countries the right to distribute a firm's merchandise or to use its trademark, patent, or process in a specified geographic area.

A) Value engineering
B) Sole sourcing
C) Offset agreement
D) Foreign licensing

Question 72

Alumna, a ceramics-manufacturing company in Denmark, is trying to market its products in Bulgaria. The company has assigned the production of its goods to a local company in Bulgaria to take advantage of the low labor costs and also to avoid the import duties on the products. In this case, the strategy used by Alumna for entering foreign markets is an example of _____.

A) subcontracting
B) licensing
C) sole sourcing
D) exporting

Question 73

D. J. International, a firm based in North America, is a leader in international sales and exports. The company is not directly involved in the purchase and selling of goods but helps firms find customers for their products in global markets. It also helps the companies handle all the legal formalities in foreign markets and provides guidance regarding the local labeling and testing laws. D. J. International can be regarded as a(n):

A) export-management company.
B) export-trading company.
C) franchisee.
D) subcontractor.

Question 74

A(n) _____ buys products from domestic producers and resells them abroad.

A) outsourcing firm
B) export-trading company
C) export-management company
D) offset marketer

Question 75

An organization that provides first-time exporters with expertise in locating foreign buyers, handling paperwork, and conforming to local labeling and testing laws is called a(n):

A) export facilitator.
B) export-trading company.
C) trade assistance corporation.
D) export-management company.

Question 76

What are the economic factors that determine a nation's prospect as a host for international business expansion?

Question 77

How has the economy in the United States changed in the recent years?

Question 78

_____ is a contractual arrangement in which a wholesaler or retailer agrees to meet the operating requirements of a manufacturer.

A) Direct investment
B) Franchising
C) Value engineering
D) Business process reengineering

Question 79

The European Union's Treaty of Lisbon is designed to further streamline operations and enable the European Union to enter into international agreements as a(n) _____.

A) common market
B) political entity
C) customs union
D) economic union

Question 80

Tru-Shine is a cleaning company in the United States that offers various cleaning products and services. After gaining popularity in the United States, the company decided to expand its business in other North American nations. The company entered into an agreement with some local cleaning companies in Canada where the local companies would sell its products and services under the same trade name. Tru-Shine also agreed to provide the training and necessary equipments and supplies to the local companies. In this example, the strategy used by Tru-Shine for entering foreign markets is an example of _____.

A) sole sourcing
B) value engineering
C) franchising
D) direct investment