Deck 5: Developing a Global Vision

Question 1

The U.S.government prohibits the importation of Havana cigars because of political differences with Cuba.This is an example of a boycott.

Answer 1

True

Question 2

The Group of Twenty is the largest free trade agreement in the world.

Answer 2

False
The Group of Twenty is a forum for international economic development that promotes discussion between industrial and emerging-market countries on key issues in the global economy.

Question 3

The same environmental factors that operate in the domestic market also exist internationally.These factors (culture,economic,political structure and actions,demographic makeup,and natural resources)should be examined regardless of the country.

Answer 3

True

Question 4

Global marketing standardization presumes that the markets throughout the world are becoming more alike.

Question 5

Globalization deserves credit for helping lift many nations out of poverty and for improving standards of living of low-wage families.

Question 6

According to research done by the World Bank,countries with the greatest amount of business regulation foster the strongest economies.

Question 7

The European Union Commission and the courts have come under widespread criticism for "rubber-stamping" or approving most business deals involving U.S.multinationals.

Question 8

Licensing agreements reduce the risk for manufacturers and sometimes even remove the requirement for a manufacturer to produce its own product.

Question 9

Private-label manufacturing by a foreign country is called franchising.

Question 10

U.S.-based Procter & Gamble and Italian-based Fater agreed to produce and market diapers for the European market.This is an example of a joint franchise.

Question 11

About 85 percent of U.S.companies export their products to other countries on a regular basis.

Question 12

In general,average family incomes are higher in more developed countries than in the less developed countries.

Question 13

The U.S.government limits the amount of sugarcane that is imported into the country.This is an example of a tariff.

Question 14

Global trade has climbed to about $200 billion a year.

Question 15

Having a global vision means that management recognizes and reacts to international marketing opportunities,uses effective marketing strategies,and is aware of threats from foreign competitors in all markets.

Question 16

Multinational companies typically begin the development of their global business with direct investment and continue using this strategy throughout the company's life span.

Question 17

NAFTA is the New American Foreign Trade Amendment,which allows for balanced trade with the European Union.

Question 18

While some countries have elements of both capitalism and socialism,most nations are at one political extreme or the other.

Question 19

The Uruguay Round of trade negotiations dramatically increased trade barriers worldwide.

Question 20

Even though it is not actively involved in global marketing,Hennessey Enterprises,a U.S.-based business,agreed to sell two thousand of its stress-reducing products to a distribution company in Norway.This would be an example of direct investment.

Question 21

Sawyer Components manufactures high-cost,customized roller parts for paper mills and is expanding into China because of the opportunity for significant growth in this developing country.The owner uses effective global strategies and is aware of threats from foreign competitors.This illustrates that the owner has a global:

A)advantage
B)imperative
C)vision
D)outsource
E)introspection

Question 22

Globalization:

A)relies on strong government regulations to keep down prices
B)promotes economic freedom and increases living standards
C)tends to dry up the flow of foreign capital in less developed countries
D)has made it easier for governments to abuse the freedom and property of their citizens
E)has kept wages low in developing countries around the world

Question 23

Many people fear world trade because it:

A)will inevitably lead to inflation.
B)will cause living standards to increase at a slower rate.
C)causes some people to lose their jobs as production shifts abroad.
D)has brought entire nations out of poverty.
E)has increased per capita income for some countries.

Question 24

Individuals and organizations utilizing a global vision to effectively market goods and services across the world are engaged in:

A)international selling schemes
B)borderless commerce
C)global marketing standardization
D)global logistics
E)global marketing

Question 25

H.J.Heinz,the ketchup company,gets over half of its revenue from international sales.This shows that:

A)U.S.citizens are using less ketchup.
B)their market share should increase.
C)Heinz needs to abandon the U.S.market.
D)sales need to be increased domestically.
E)adopting a global vision can pay off.

Question 26

Global marketing research is not any more difficult than domestic marketing research.

Question 27

Which of the following statements about the impact of international business on the U.S.economy is NOT true?

A)America exports over $1.7 trillion in goods and services each year.
B)Almost one-third of U.S.corporate profits come from international trade and foreign investment.
C)Every U.S.state has realized net employment gains directly attributed to foreign trade.
D)Exports create jobs for over 50 million Americans.
E)The U.S.exports about 20 percent of its industrial production.

Question 28

A(n)_____ is a company that is heavily engaged in global trade and moves its resources,goods,services,and skills across national boundaries.

A)international facilitator
B)global trader
C)multinational corporation
D)exporting company
E)international merchant

Question 29

Basketball is played nearly everywhere in the world and is an easily understood sport.The National Basketball Association (NBA)finals reached more than 600 million televisions in 195 countries.From this information,you should be able to infer that the NBA is:

A)developing international selling schemes
B)implementing standard international marketing
C)implementing global marketing standardization
D)supplementing its foreign vision
E)practicing global marketing

Question 30

The rules,regulations,and habits used for brick-and-mortar stores tend to restrain and limit the success of those retailers engaged in e-commerce.

Question 31

The price of one country's currency in terms of another country's currency is called the conversion price.

Question 32

In the context of global marketing,product invention can be taken to mean either creating a new product for a market or drastically changing an existing product.

Question 33

The form of global organization that provides the highest potential for return on investment as well as the highest level of risk is contract manufacturing.

Question 34

All of the following statements about global marketing are true EXCEPT:

A)Marketing to target markets throughout the world has become imperative for business.
B)Often a U.S.firm's toughest domestic competition comes from foreign companies.
C)Marketing managers must develop a global vision not only to recognize and react to international marketing opportunities but also to remain competitive at home.
D)Adopting a global vision can be lucrative for a company,and global marketing can offset weak domestic performance.
E)Foreign competitors have not gained significant market share in the United States.

Question 35

If a country's currency appreciates,more of that currency will be needed to buy another country's currency.

Question 36

Suppose a Chinese firm makes computer chips at $4.00 per chip but sells the chips for $2.00 in American markets.American producers of computer chips cannot supply chips at the low rates that the Chinese firm is supplying them.The Chinese firm is engaging in dumping.

Question 37

Which of the following statements about multinational firms is true?

A)Multinationals typically do not change their methods of reaching their global markets if they are successful with their initial strategy.
B)Multinationals are defined as companies heavily engaged in exporting and importing.
C)All multinationals must enter the fourth stage of globalization before they are fully internationalized.
D)Multinationals often develop their global businesses in stages.
E)The five stages of globalization closely mirror the five stages of the product life cycle.

Question 38

When European demand for a certain solvent declined,Dow Chemical instructed its German plant to switch to manufacturing a chemical that had been imported from Louisiana and Texas.Dow Chemical would be best described as a(n):

A)global enterprise
B)global trader
C)cultural marketer
D)exporting company
E)multinational corporation

Question 39

The total market value of all final goods and services produced in a country for a given time period is called:

A)the exchange rate
B)gross domestic product (GDP)
C)the trade balance
D)gross national product (GNP)
E)gross operating surplus (GOS)

Question 40

The primary reason large U.S.companies send U.S.jobs abroad is because labor costs are higher in the United States.They are engaging in:

A)outsourcing
B)global trade
C)multinational employee searches
D)employee export
E)global employment

Question 41

Which of the following is a criticism of multinational corporations?

A)Multinationals sometimes support reactionary and oppressive regimes.
B)Multinationals require excessive employment information.
C)Countertrading
D)The transference of labor-intensive technology
E)Multinationals do not do enough to standardize their marketing mixes.

Question 42

Cooley Manufacturing is a multinational company selling plumbing components around the world.This company has progressed to the point that it operates an entire line of business in several other countries.Which stage of multinational business does this represent?

A)Stage one
B)Stage two
C)Stage three
D)Stage four
E)Stage five

Question 43

A business thinking of expanding into global markets needs to examine all of the following external environments EXCEPT:

A)Culture.
B)political structure and actions.
C)its marketing mix.
D)natural resources.
E)demographic makeup.

Question 44

The Patton Awning Company produces tents,tarps,awnings,and other canvas products.The firm is in the first stage of creating its global business.This means that Patton Awning Company:

A)operates in one country and sells to others.
B)has set up a foreign subsidiary.
C)operates an entire line of business in another country.
D)has top executives and core corporate functions in different countries.
E)operates in every country in the world.

Question 45

Central to any society is a common set of values shared by its citizens that determines what is socially acceptable.Marketers refer to these values collectively as a country's:

A)ethical system.
B)culture.
C)Ethnocentrism.
D)national personality.
E)Socialization.

Question 46

When IKEA,the Swedish home furnishings retailer,first entered the Japanese market,it failed.It was more successful in its second try because it was aware of the need to adapt its furnishings to fit the smaller Japanese homes.The _____ environment had the greatest influence on IKEA's first failure in Japan.

A)demographic
B)economic
C)cultural
D)political
E)technological

Question 47

A soft drink manufacturer thinking of investing in a bottling plant in the Czech Republic should know the nation is proud of the fact it is among the world's biggest beer drinkers.Czechs consume an average of one-half liter of beer a day for every man,woman,and child in the country.The _____ environment of this country could very easily prevent the soft drink bottling company from succeeding.

A)demographic
B)economic
C)cultural
D)political
E)technological

Question 48

American firms should never try to do business in Europe in August because they will find that everyone has gone on vacation.Today,all European countries have laws requiring companies to provide employees with vacations of at least four to five weeks.This would be an important part of the European _____ environment that any multinational firm doing business there needs to be aware of.

A)cultural
B)political
C)economic
D)technological
E)natural

Question 49

Which of the following is an important cultural factor that should be considered by global marketers?

A)Competitive synergy
B)Language
C)Natural resources
D)Technology sensitivity
E)Level of economic development

Question 50

When multinational firms enable individual subsidiaries to compete independently in domestic nations,they are engaged in:

A)global marketing standardization.
B)multidomestic strategy.
C)product extension.
D)technological receptivity.
E)marketing hegemony.

Question 51

Otis Elevators has entered into a strategic alliance with a company in France from which it gets its elevator door systems.It has a similar agreement with a manufacturer in Japan that provides it with special motor drives.A manufacturer in Spain has worked closely with Otis to create small geared parts necessary for the manufacture of elevators.The component parts are assembled at its plant in the United States.Otis elevators can be found in buildings all over the world.Otis Elevators is an example of a(n):

A)cultural marketer.
B)global trader.
C)multinational corporation.
D)exporting company.
E)global enterprise.

Question 52

With a _____,a firm produces standardized products to be sold the same way all over the world.

A)traditional marketing strategy
B)global marketing standardization approach
C)product extension approach
D)culturally based marketing strategy
E)synergistic approach to marketing

Question 53

DeFeet International creates its apparel in North Carolina and sells it domestically and abroad.The company is in which stage of global business?

A)Stage one
B)Stage two
C)Stage three
D)Stage four
E)Stage five

Question 54

Muslim countries are receptive to most Disney products,but they have asked Disney not to include Piglet when it sells its Winnie the Pooh characters because Muslims (as a part of their religious beliefs)contend that pork in any form is unclean.This is an example of a _____ factor that directly affects Disney's global operation.

A)political structure
B)cultural
C)technological
D)competitive
E)natural resource

Question 55

A company that is capital intensive:

A)has an altered fiscal strategy for overseas operations.
B)spends more on equipment than on labor.
C)makes better use of benchmarking than other types of business.
D)creates employment monopolies.
E)must engage in countertrading due to restrictive foreign legislature.

Question 56

A U.S.executive had no idea that Germans tend to be very risk-averse.When the executive arrived at a meeting in Berlin,he simply stressed the price of his firm's products without emphasizing their bottom-line benefits,promoting the company's strong service support,or guaranteeing their effectiveness.As a result,the multimillion dollar deal failed.The U.S.executive overlooked the importance of which environmental factor?

A)Culture
B)Demographics
C)Natural resources
D)Economic development
E)Political structure

Question 57

Global marketing standardization:

A)is becoming less popular with the large multinationals.
B)encourages product,packaging,and advertising variations for each nation or local market.
C)actually raises production costs.
D)presumes markets throughout the world are becoming more alike.
E)is more popular with consumer products than with industrial goods.

Question 58

In which stage do multicultural companies operate when they set up foreign subsidiaries to handle sales in one country?

A)Stage one
B)Stage two
C)Stage three
D)Stage four
E)Stage five

Question 59

The Victorinox Swiss Army Knife is found all over the world.It is manufactured and marketed similarly to all consumers.Victorinox uses a(n):

A)ethnocentric strategy.
B)global marketing standardization approach.
C)synergistic approach to globalization.
D)cultural marketing strategy.
E)traditional approach to marketing.

Question 60

Apple,Inc.has partnerships with wireless carriers in Japan,Spain,and a handful of other European countries.Apple works with suppliers and retailers worldwide.This means that Apple is a:

A)multinational corporation
B)worldwide competitor
C)marketplace competitor
D)domestic corporation
E)foreign investor

Question 61

A(n)_____ is a law that compels a company earning foreign currency from its exports to sell it to a central bank rather than sending the money out of the country.

A)tariff
B)quota
C)fiscal prerequisite
D)exchange control
E)transfer barrier

Question 62

Compared to India,China:

A)is a world leader in software
B)has extremely poor logistics
C)has developed world-class information-technology services
D)has a very low level of income disparity
E)is much stronger in mass manufacturing

Question 63

The _____ is the most ambitious global trade agreement ever negotiated;the agreement has reduced tariffs by one-third worldwide.

A)Uruguay Round
B)Mercosur
C)GATT
D)NAFTA
E)Maastricht Treaty

Question 64

Since 1953,the United States has limited the amount of raw peanuts that can be imported to 1.7 million pounds a year.This is only about one-tenth of 1 percent of all domestic edible peanut consumption in the United States.This limitation is an example of a(n):

A)natural resource barrier
B)quota
C)tariff
D)exchange control
E)boycott

Question 65

Which of the following is the latest round of World Trade Organization?

A)Mercosur covenant
B)CAFTA Alliance
C)Doha Round
D)Uruguay Round
E)WTO Round

Question 66

A(n)_____ is a limit on the amount of a specific product that can enter a country.

A)quota
B)tariff
C)boycott
D)exchange control
E)transfer limit

Question 67

Which of the following statements about the European Union (EU)is true?

A)The EU creates a single Europroduct for a generic Euroconsumer.
B)The EU removes all internal trade barriers and standardizes regulations in European countries for easier trade.
C)The EU can correctly be called the "United States of Europe" because all European voters have agreed to these changes.
D)The existence of the EU eliminates protectionist movements by United Europe against the Japanese and the United States.
E)The EU is the largest economy in the world.

Question 68

A tax levied on the goods entering a country is called a(n):

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

Question 69

The _____ of trade negotiations created the _____,which replaces GATT.This trade agreement dramatically lowers trade barriers worldwide.

A)Uruguay Round;World Trade Organization
B)Doha Round;European Union
C)Doha Round;NAFTA
D)Paraguay Round;South American Free Trade Agreement
E)Mercosur;European Union

Question 70

All of the following are countries included in the Central America Free Trade Agreement EXCEPT:

A)the United States
B)Nicaragua
C)El Salvador
D)Guatemala
E)Mexico

Question 71

The goal of the Central America Free Trade Agreement is to:

A)create free trade agreements between the United States and other industrialized nations.
B)eliminate all protectionism.
C)raise prosperity levels in all industrializing nations.
D)establish a free trade agreement between the United States and certain Latin American countries.
E)make sure all nations achieve the economic and technological development of a takeover economy or better.

Question 72

An exclusion of all products from certain countries or companies by a government or group is called a(n):

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

Question 73

In the wake of the global recession of 2008-2009,many countries have:

A)aggressively sought new trade agreements
B)all but eliminated tariffs and quotas
C)tightened environmental regulations and improved working conditions for low-income employees
D)moved toward protectionism
E)drastically reduced imports and exports

Question 74

_____ is a trade agreement that includes Argentina,Bolivia,Brazil,Chile,Colombia,Ecuador,Paraguay,Peru,and Uruguay.This agreement eliminated the tariffs among these trading partners.

A)NAFTA
B)Maastricht
C)WTO
D)GATT
E)Mercosur

Question 75

_____ are trade alliances in which several countries agree to work together to form a common trade area that enhances trade opportunities among those countries.

A)Boycotts
B)Regional unifications
C)Market groupings
D)Free trade nations
E)Expropriation members

Question 76

The North American Free Trade Agreement did all of the following EXCEPT:

A)created the world's largest free trade zone,which includes Canada,the United States,and Mexico
B)substantially reduced economic growth in Mexico
C)allowed U.S.and Canadian financial-services companies to own subsidiaries in Mexico
D)removed many tariffs and duties so that Mexico,Canada,and the United States can trade more freely
E)expanded opportunities for U.S.businesses in Mexico

Question 77

Consumers purchasing an automobile in Hong Kong must pay a 100 percent tax on it.This tax is imposed by the government on all automobiles entering the country and is called a(n):

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

Question 78

Who are the richest people in the world?

A)Americans
B)Chinese
C)British
D)French
E)Luxembourgers

Question 79

Negotiations (such as GATT or the Uruguay Round)between countries that are made to stimulate global exchange and remove barriers are called _____ agreements.

A)trade
B)joint venture
C)CRM
D)exchange
E)licensing

Question 80

Several Arab nations refuse to allow Coca-Cola products to be sold within their borders because of the company's distributorships in Israel.This is an example of a(n):

A)transfer limit.
B)quota.
C)tariff.
D)exchange control.
E)boycott.