Deck 5: Developing a Global Vision

Question 1

Which of the following is a difference between product invention and product adaptation?

A)Product invention involves altering the promotional strategies for a product, while product adaptation does not involve altering such strategies.
B)Product invention takes the marketing mix into consideration, while product adaptation does not take it into consideration.
C)Product invention involves drastically changing an existing product, while product adaptation involves slightly altering a basic product.
D)Product invention applies only to products that are sold in local markets, while product adaptation applies to products all around the world.

Answer 1

C

Question 2

Using a capital-intensive technology refers to using less equipment than labor in the production process.

Answer 2

False

Question 3

The final step in creating a marketing mix is developing a thorough understanding of the global target market.

Answer 3

False

Question 4

Exporting is usually the most complicated and most risky method of global marketing.

Question 5

Because Facebook, YouTube, and other social media are popular around the world, firms both large and small have embraced social media marketing.

Question 6

Global marketing is a one-way street whereby only U.S. companies sell their wares and services throughout the world.

Question 7

Traditionally, marketing-oriented multinational corporations enable individual subsidiaries to compete independently in domestic markets.

Question 8

The surge in global trade in recent years has added to strains and charges for all forms of transport.

Question 9

One important resource of foreign direct investment is personnel, especially managers.

Question 10

The four Ps of global marketing strategy are product, place, promotion, and price.

Question 11

The Uruguay Round replaced General Agreement on Tariffs and Trade (GATT) with _____.

A)the European Union (EU)
B)the World Trade Organization (WTO)
C)the North American Free Trade Agreement (NAFTA)
D)the International Monetary Fund (IMF)

Question 12

Which of the following is a characteristic of market grouping?

A)It occurs when government efforts stifle imports or investment by foreign corporations.
B)It occurs when several countries agree to work together to form a common trade area.
C)It occurs when a trade agreement dramatically lowers trade barriers across the world.
D)It occurs when a domestic firm joins with a foreign company to create a new entity.

Question 13

The Group of Twenty (G-20) was founded in 1945, one year after the creation of the World Bank, to promote trade through financial cooperation and eliminate trade barriers in the process.

Question 14

A company wishing to buy goods abroad must first obtain a foreign currency exchange from the control agency.

Question 15

Opening an e-commerce site on the Internet makes it difficult for a company to gain recognition in the international marketplace.

Question 16

Sinesia is a country that has very few sources of potable water. Given this information, which of the following is most likely to happen?

A)Sinesia's international marketing will remain unaffected because petroleum is the only factor that affects international marketing.
B)Sinesia will remain an importer of foodstuffs.
C)Sinesia will become an attractive target for military intervention.
D)Sinesia's wealth will equal that of the countries with rich sources of water.

Question 17

In the context of distribution, ocean shipping is faster than airfreight.

Question 18

Of all the types of managers, the managers of global social media campaigns are the ones who need not be aware of the cultures of the countries in which they operate.

Question 19

Joint ventures prevent a local firm from acquiring managerial skills and new technology.

Question 20

Average family incomes are higher in more developed countries than in less developed countries.

Question 21

Small businesses are taking slow, hesitant steps into the global market because it:

A)limits access to advanced technologies in less developed countries.
B)slows down the rate at which people's living standards increase.
C)involves various trade laws or tariffs.
D)empowers governments to abuse the freedom and property of their citizens.

Question 22

Which of the following is a difference between a joint venture and contract manufacturing?

A)A joint venture is formed when a domestic firm buys part of a foreign company to create a new entity, while firms choose contract manufacturing to avoid being involved in licensing.
B)A joint venture is formed when a domestic firm broadens its global marketing base without investment, while in contract manufacturing, a licensor allows another firm to use its manufacturing process.
C)A joint venture is formed when several countries agree to work together to form a common trade area, while contract manufacturing occurs when government efforts stifle investment by foreign corporations.
D)A joint venture is formed when an agreement to stimulate international trade is made, while contract manufacturing occurs when a tax is levied on the goods entering a country.

Question 23

Which of the following companies is in the first stage of global business?

A)D Feet Corp., which manufactures footwear in a small town in Lucitona and sells the footwear to several countries around the world
B)Laelle Inc., which is based in Euphonia and has set up several subsidiaries to manage its business in another country
C)Fournotts Bros., which is based in Datford and opens a new line of business in a neighboring country
D)Rues and West Inc., which operates online shopping sites around the world

Question 24

Which of the following statements is true of a company that is in the second stage of global business?

A)It maintains a virtual executive suite.
B)It sets up foreign subsidiaries to handle sales in one country.
C)It runs its business entirely through the Internet.
D)It bases its entire operations in its home country.

Question 25

Which of the following is true of outsourcing?

A)It reduces corporate growth.
B)It reduces productivity and revenue growth.
C)It faces production delays due to faulty parts.
D)It increases energy costs in the United States.

Question 26

Melrow Inc., a U.S. firm, suffers heavy losses and lays off many of its employees. To reduce its manufacturing costs, it shifts its production units to another country where labor costs are less. In this scenario, Melrow Inc. is engaged in _____.

A)licensing
B)outsourcing
C)franchising
D)inshoring

Question 27

Which of the following is a reason for practicing outsourcing in the United States?

A)Increased corporate growth
B)Chances of increased production delays
C)Rising wages in the developing world
D)Improperly designed parts and products in foreign countries

Question 28

Which of the following statements is a characteristic of dumping?

A)It refers to the active ownership of a foreign company or of overseas manufacturing or marketing facilities.
B)It refers to the sale of an exported product at a price lower than that charged for the same or a like product in the ''home'' market of the exporter.
C)It refers to a form of trade in which all or part of the payment for goods or services is in the form of other goods or services.
D)It refers to a system in which prices of different currencies move up and down based on the demand for and the supply of each currency.

Question 29

Which of the following countries has the highest gross domestic product?

A)Belwick, whose market value of final goods is $100 billion and market value of final services is $50 billion for two years
B)Sparanthea, whose market value of intermediate goods is $200 billion and market value of intermediate services is $50 billion for a quarter year
C)Zaneland, whose market value of final goods is $120 billion and market value of intermediate goods is $20 billion for a year
D)Acquardica, whose market value of final goods is $170 billion and market value of final services is $90 billion for a year

Question 30

The management of Irving Inc., an apparel company based in Letonia, decides to expand the company's operations to several other countries. Given this information, which of the following strategies can be adopted by the management to succeed in the foreign environment?

A)It can sell the same clothes it sells in its home country in the other countries.
B)It can modify its Web site according to the foreign countries' cultures.
C)It can limit personal selling to buyers in the foreign countries.
D)It can solely rely on free translation software to translate slogans and instructions.

Question 31

_____ is the largest Latin American trade agreement, and it includes Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela.

A)Mercosur
B)General Agreement on Tariffs and Trade (GATT)
C)The Uruguay Round
D)The North American Free Trade Agreement (NAFTA)

Question 32

Aztic Inc., a manufacturer of sports goods, plans to expand its operations to various other countries. After market research, it avoids countries where the dominant population is mostly rural. In this case, Aztic Inc. is assessing the _____ of the countries.

A)political structure
B)natural resources
C)legal environment
D)demographic makeup

Question 33

Which of the following statements is true in the context natural resources?

A)The past decade has witnessed an abundance of natural resources.
B)Petroleum is the only natural resource that affects international marketing.
C)Vast differences in natural resources result in minor shifts of wealth among countries.
D)Steep declines in the price of oil had a negative impact on America's oil producers.

Question 34

Which of the following a difference between a quota and a boycott?

A)A boycott is a limit on the amount of goods entering a country, whereas a quota is a tax levied on goods entering a country.
B)A boycott is the revenue received from international trade, whereas a quota is the revenue received from domestic trade.
C)A boycott is used to include all foreign competition, whereas a quota is used by governments to exclude companies from countries with which they have a political dispute.
D)A boycott is the exclusion of all products from certain countries or companies, whereas a quota is a means of protection from foreign competition.

Question 35

Which of the following statements is true of the term boycott?

A)It refers to a limit on the amount of a specific product that can enter a country.
B)It refers to a tax levied on the goods entering a country.
C)It refers to the exclusion of all products from certain countries or companies.
D)It refers to an agreement to stimulate international trade.

Question 36

A company is doomed to failure in a foreign country if it _____.

A)does not understand the foreign country's culture
B)focuses on translating product names to the foreign country's language
C)varies its marketing mix according to the foreign customers
D)pays attention to the foreign country's demographics

Question 37

_____ was founded in 1945, one year after the creation of the World Bank, to promote trade through financial cooperation and eliminate trade barriers in the process.

A)The European Union (EU)
B)The World Trade Organization (WTO)
C)The North American Free Trade Agreement (NAFTA)
D)The International Monetary Fund (IMF)

Question 38

In a direct foreign investment, which of the following statements is true of the direct investors?

A)They do not have a controlling interest in the firm.
B)They possess the lowest potential risk.
C)They have the highest potential reward.
D)They have a small minority interest in the foreign firm.

Question 39

D'Costas, an authentic Sparanthean restaurant, has many branches all over the world. The taste and quality of the food served is same across all its branches. Based on this information, D'Costas is most likely following the strategy of _____.

A)global marketing localization
B)product adaptation
C)mass customization
D)global marketing standardization

Question 40

Which of the following is a factor that drives the popularity of imports in the United States?

A)Lower wages compared to that of other countries
B)Higher number of employees in the countries from where goods are imported
C)Higher prices of products in the countries from where the goods are imported
D)Lower capacity of the equipment used for production in the exporting countries

Question 41

A(n) _____ is an intermediary who brings a buyer and a seller together.

A)licenser
B)export broker
C)contract manufacturer
D)export merchant

Question 42

Maria Apparel is a well-known apparel store. The owners of the store want the store to go global; hence, they have opened a Web site. In this scenario, opening a Web site:

A)makes it difficult for Maria Apparel to go global through the Internet.
B)frees Maria Apparel from old brick-and-mortar rules, regulations, and habits.
C)immediately puts Maria Apparel in the international marketplace.
D)stops Maria Apparel from selling products in its physical stores.

Question 43

Why do firms that enter into foreign trade need to adhere to the principles of the marketing mix?

Question 44

Which of the following is a similarity between export brokers and export agents?

A)Both act as hired purchasing agents for foreign customers operating in an exporter's home market.
B)Both live in foreign countries and assist in international trade.
C)Both assume all risks associated with selling a manufacturer's product in the international market.
D)Both allow manufacturers to retain title for products.

Question 45

Nessca Motors, a well-known company based in Nebolina, manufactures engines. Its management recently signed a joint venture with Singletone Inc., a company based in Trinitia. Given this information, which of the following statements will most likely be true?

A)The government of Trinitia will restrict Nessca Motors's entry to the country.
B)Nessca Motors and Singletone Inc.will switch to contract manufacturing as the next step.
C)Nessca Motors may buy a part of Singletone Inc.
D)Singletone Inc. will pay royalty to Nessca Motors.

Question 46

A U.S. licensor will be most successful at maintaining effective control over licensees and preventing them from voiding the contract by:

A)using lawyers from both countries to write the licensing agreement.
B)insisting that all licensees have a published code of ethics.
C)receiving all the revenue earned by the licensees.
D)locally registering patents and trademarks.

Question 47

Explain the major role played by the Internet and social media in global marketing.

Question 48

Fresnas Corp., a company that designs and manufactures apparel, practices inshoring. Given this information, which of the following is most likely to be true of Fresnas Corp.?

A)It keeps its research team in close proximity.
B)It faces increased shipping and transportation costs.
C)It outsources its manufacturing jobs to other countries.
D)It faces a lot of production delays.

Question 49

Yuncen Foods is a food manufacturer based in Lumberne. It gets over half of its revenue from international sales. It has been consistently ranked as the best food manufacturer in the world. Given this information, which of the following statements is true of Yuncen Foods?

A)The company is overlooking the threats posed by foreign companies in Lumberne.
B)The packing of frozen foods is outsourced to other countries.
C)The company is not competitive in its home country.
D)Geographic and political barriers are irrelevant to the company's business decisions.

Question 50

Which of the following statements is true of third-stage multinational companies?

A)They sell products only in one country.
B)Their top executives and core corporate functions are in different countries.
C)They operate an entire line of business in another country.
D)They set up foreign subsidiaries to handle sales in one country.

Question 51

Which of the following is a similarity between joint ventures and licensing agreements?

A)Both involve joining with a foreign company to create a new entity.
B)Both depend heavily on contract manufacturing.
C)Both are free from government interference.
D)Both are free from risks.

Question 52

Currency markets operate under a system of _____, which is a system in which the prices of different currencies move up or down based on the demand for and the supply of each currency.

A)countertrade
B)floating exchange rates
C)dumping
D)contract manufacturing

Question 53

The owners of Fashion Spell, an apparel store based in the town of Lumberne, want to expand the store's business all over the world. In this case, which of the following strategies can help the owners of Fashion Spell achieve their objectives?

A)Opening an e-commerce site
B)Standardizing sizing of apparels
C)Acting as an export broker
D)Countertrading with foreign companies

Question 54

Which of the following statements is true of the term quota?

A)It refers to a limit on the amount of a specific product that can enter a country.
B)It refers to the exclusion of all products from certain countries or companies.
C)It refers to a tax levied on the goods entering a country.
D)It refers to an agreement to stimulate international trade.

Question 55

Which of the following statements is a characteristic of countertrade?

A)It refers to a form of trade in which all or part of the payment for goods or services is in the form of other goods or services.
B)It refers to the sale of an exported product at a price lower than that charged for the same or a like product in the ''home'' market of the exporter.
C)It refers to the active ownership of a foreign company or of overseas manufacturing or marketing facilities.
D)It refers to a system in which prices of different currencies move up and down based on the demand for and the supply of each currency.

Question 56

Write a note on the economic factors that influence the external business environment.

Question 57

Which of the following statements is true of inshoring and outsourcing?

A)Inshoring occurs when multinational firms enable individual subsidiaries to compete independently in domestic markets, while outsourcing occurs when markets throughout the world become alike.
B)Inshoring refers to a strategy of providing different product features, while outsourcing refers to a strategy of using a global vision to effectively market goods and services across national boundaries.
C)Inshoring occurs when several countries agree to work together to form a common trade area, while outsourcing occurs when prices of different currencies ''float'' up and down based on demand.
D)Inshoring refers to a strategy of returning production jobs to the United States, while outsourcing refers to a strategy of sending United States jobs to foreign countries.

Question 58

Which of the following statements is true of globalization?

A)It expands economic freedom and increases the living standards of people.
B)It increases prices and decreases product and service quality.
C)It has curbed the growth of the middle class in developing countries.
D)It leads to a monopoly of domestic producers.

Question 59

Khokho's Coffee House was the first company to introduce flavored coffee in the global market. It sells coffee in several different flavors, such as blueberry, cinnamon, and cranberry, based on the flavors each country prefers. In this scenario, Khokho's Coffee House is involved in _____.

A)product invention
B)promotion adaptation
C)global marketing standardization
D)product adaptation

Question 60

_____ is a trade agreement that has dramatically lowered trade barriers worldwide. It led to the creation of the World Trade Organization.

A)The European Agreement
B)General Agreement on Tariffs and Trade
C)The North American Free Trade Agreement
D)The Uruguay Round

Question 61

Discuss exports in the United States.

Question 62

Explain franchising.

Question 63

Explain the legal structures that affect international trade.

Question 64

Explain the four stages in which multinational corporations develop their businesses.