Deck 5: Global Marketing

Question 1

A(n) ________ is a limit on the amount of product that can be imported into a country.

A) tariff
B) exchange control
C) quota
D) barter
E) franchise

Answer 1

C

Question 2

Which of the following is NOT a benefit a company would be likely to expect from engaging in global trade?

A) scale economies
B) access to lower cost materials
C) access to new consumer markets
D) protection from the regulations of foreign governments
E) access to foreign investment incentives

Answer 2

D

Question 3

A(n) ________ is a group of countries that has agreed to lower tariff barriers and promote trade among members.

A) trade union
B) privatized organization
C) economic community
D) joint venture
E) global network

Answer 3

C

Question 4

Which of the following has the largest total GDP?

A) China
B) Japan
C) the United States
D) Chile
E) the European Union

Question 5

A company with no investment outside its home country other than the direct purchase of products and services is referred to as a(n) ________ company.

A) international
B) outsourced
C) offshored
D) multinational
E) global

Question 6

Economies are typically classified by the country's ________.

A) gross domestic product (GDP)
B) purchasing power parity (PPP)
C) non-tariff barriers (NTBs)
D) privatization
E) nationalization

Question 7

BRIC countries are driving forces behind globalization because of their ________.

A) steadily weakening exchange rates
B) relatively inexpensive labor markets
C) well-established upper classes
D) unregulated stock markets
E) strategic geographic locations

Question 8

A(n) ________ is a government ban or restriction on the amount of a specific currency that is permitted to be traded or purchased.

A) tariff
B) exchange control
C) quota
D) barter
E) franchise

Question 9

A company with assets and operations in more than one country and that concentrates on penetrating multiple countries with a minimally customized marketing mix is referred to as a(n) ________ company.

A) international
B) outsourced
C) offshored
D) multinational
E) global

Question 10

Extensive customization of a product offered in different international markets can defeat which of the following benefits of global trade?

A) lowered production costs
B) access to less expensive labor
C) access to less expensive materials
D) access to new consumer markets
E) ability to offset domestic economic cycles

Question 11

A(n) ________ is a schedule of duties or fees applied to goods or services from foreign countries.

A) tariff
B) exchange control
C) quota
D) barter
E) franchise

Question 12

Which of the following is generally reported at purchasing power parity (PPP)?

A) gross domestic product (GDP)
B) an exchange control
C) a trade surplus
D) a trade deficit
E) a non-tariff barrier

Question 13

When a government adopts ________, it enforces rules on foreign firms in order to give local companies an advantage over global competitors.

A) trade agreements
B) balances of trade
C) trade deficits
D) trade surpluses
E) trade barriers

Question 14

Which of the following statements about the World Trade Organization (WTO) is true?

A) The WTO is a branch of the U.S. government.
B) Only countries that belong to established economic communities are granted membership in the WTO.
C) Only developed nations are granted membership to the WTO.
D) The WTO's main function is to help least developed countries grow their economies.
E) The WTO is the most powerful international organization dealing with the global rules of trade between nations.

Question 15

Many countries outlaw ________, a practice in which a company prices its products lower than they are priced at home or lower than the cost to make the product.

A) indirect exporting
B) counterfeiting
C) bribery
D) dumping
E) countertrading

Question 16

________ includes all marketing activities conducted at an international level by individuals or businesses.

A) Global marketing
B) Extraterritoriality
C) Industrialization
D) Multinationalism
E) Nationalized marketing

Question 17

The euro is the currency used by ________.

A) NAFTA
B) CAFTA-DR
C) the EU
D) the WTO
E) ACFTA

Question 18

Which of the following is considered a BRIC country?

A) Italy
B) Indonesia
C) Chile
D) China
E) Canada

Question 19

NAFTA is a(n) ________.

A) South American economic community
B) common market for eastern and southern Africa
C) economic community that includes India, Brazil, and China
D) trade agreement that includes Canada, Mexico, and the United States
E) regulatory branch of the World Trade Organization

Question 20

________ is the outcome of cultures intermingling, sharing experiences, news, and commerce.

A) Extraterritoriality
B) Nationalization
C) Privatization
D) Sustainability
E) Globalization

Question 21

Which of the following best describes a country that is actively engaged in international trade and has robust manufacturing, service, and financial sectors ?

A) subsistence economy
B) raw materials exporting economy
C) industrializing economy
D) industrial economy
E) free-trade economy

Question 22

In a culture that values ________, people tend to subordinate their personal goals to those of a stable group, family, or team.

A) collectivism
B) individualism
C) long-term goals
D) short-term goals
E) ethnocentrism

Question 23

Marketers need to understand the ________ factors of a country from two perspectives: the country's overall level of industrialization and its income distribution.

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

Question 24

In a ________, a legislature selects the head of government according to party strength as expressed in elections.

A) limited democracy
B) monarchy
C) limited monarchy
D) totalitarian state
E) parliamentary democracy

Question 25

When the value of a country's imports exceeds the value of its exports, the country has a(n) ________.

A) industrial economy
B) exchange control
C) trade surplus
D) trade deficit
E) post-industrial economy

Question 26

Which of the following is the first step a firm should take when deciding whether or not to go global?

A) Develop marketing mix strategies for foreign markets.
B) Analyze whether it is in the firm's best interest to focus on the domestic market or to expand to international markets.
C) Identify the most attractive global markets for the firm's products.
D) Select a market-entry strategy that fits the firm's desired level of commitment.
E) Identify potential partners in international markets.

Question 27

Which of the following is the form of government that seeks to control not only all political and economic matters, but also the attitudes, values, and beliefs of its population?

A) limited democracy
B) monarchy
C) limited monarchy
D) totalitarianism
E) parliamentary democracy

Question 28

________ occurs when someone voluntarily offers payment or something of financial value to get an illegal advantage.

A) Privatization
B) Counterfeiting
C) Bribery
D) Jurisdiction
E) Countertrade

Question 29

The unauthorized copying of products, packaging, or other intellectual property of a registered brand is called ________.

A) privatization
B) counterfeiting
C) bribery
D) dumping
E) countertrade

Question 30

Which of the following are usually referred to as developing countries?

A) subsistence economies and raw materials exporting economies
B) raw materials exporting economies and industrializing economies
C) raw materials exporting economies and industrial economies
D) industrial economies and industrializing economies
E) industrial economies and post-industrial economies

Question 31

In a culture that values ________, people tend to have less formal relationships and stress the prominence of individual rights over group rights.

A) collectivism
B) individualism
C) long-term goals
D) short-term goals
E) ethnocentrism

Question 32

When the value of a country's exports exceeds the value of its imports, the country has a(n) ________.

A) industrial economy
B) exchange control
C) trade surplus
D) trade deficit
E) post-industrial economy

Question 33

The power or right of a legal or political entity to exercise its authority over a specific geographic area is referred to as ________.

A) jurisdiction
B) extraterritoriality
C) power parity
D) exchange control
E) nationalization

Question 34

Which of the following holds certain individuals, such as diplomats, accountable to the laws of their home country while exempting them from the laws of a foreign country in which they are operating?

A) jurisdiction
B) extraterritoriality
C) power parity
D) exchange control
E) privatization

Question 35

Trading firms that work out elaborate deals in which they trade or barter their products with one another or even supply goods in return for tax breaks from the local government are using ________.

A) bribery
B) privatization
C) zero-sum games
D) countertrade
E) dumping strategies

Question 36

Which of the following is most characteristic of a post-industrial economy?

A) Service and information sectors are the primary sources of economic growth.
B) The market for consumer goods present little growth potential.
C) The nation has an economy based on agriculture.
D) Many people rely on bartering for basic goods and services.
E) The country has an economy based on exporting raw materials.

Question 37

Nationalization occurs when a government ________.

A) transfers government functions to the private sector in order to create new business opportunities
B) reimburses a foreign company that has lost facilities due to natural causes
C) refuses to allow its businesses to engage in exporting
D) takes control or ownership of private property
E) imports more than it exports

Question 38

Which of the following factors would most likely push a company to decide NOT to pursue a global marketing strategy?

A) The company's home market is stagnant.
B) The company would have to redesign its products.
C) The company needs to counterattack international competitors in its home markets.
D) Foreign markets present higher profit opportunities.
E) Global competitors have offered similar products.

Question 39

Which of the following cultural values refers to how comfortable individuals are with participating in decision making regardless of their position?

A) uncertainty avoidance
B) power distance
C) individualism versus collectivism
D) masculinity versus femininity
E) long-term versus short-term orientation

Question 40

In most cases, which of the following is true about a subsistence economy?

A) It has an agrarian society.
B) It is by definition landlocked.
C) It has a viable middle class.
D) It has high literacy levels.
E) It has an advanced economic infrastructure.

Question 41

Coca-Cola markets globally by making ________ with bottlers around the world for a fee or royalty and then supplying them with the syrups needed to produce Coca-Cola products.

A) contract manufacturing agreements
B) joint manufacturing agreements
C) licensing agreements
D) joint ownerships agreements
E) direct investments

Question 42

Think Ink is a growing company that sells a variety of inks for home and business printers. Management at Think Ink has decided to open a sales branch overseas to handle sales and distribution abroad. Think Ink is engaging in ________.

A) indirect exporting
B) direct exporting
C) licensing
D) joint ownership
E) management contracting

Question 43

In February 2000, the United States imposed a tax on imported steel in an effort to protect about 5,000 U.S. jobs. Another name for this levied tax is a(n) ________.

A) embargo
B) balance of trade
C) tariff
D) quota
E) exchange control

Question 44

Lower costs in the form of cheaper labor or raw materials and the opportunity to gain better first-hand knowledge of the wants and needs of consumers in the local market are factors that would likely lead a company to ________ in a foreign market.

A) use direct exporting
B) begin licensing
C) begin franchising
D) use indirect exporting
E) make a direct investment

Question 45

Which of the following market entry strategies requires the lowest level of investment from a company?

A) indirect exporting
B) direct exporting
C) joint venture
D) joint ownership
E) direct investment

Question 46

U.S. sugar import quotas have existed for more than fifty years and preserve about half of the U.S. sugar market for domestic producers. Why does the United States continue to have these quotas?

A) to reduce competition for its domestic sugar industry
B) to increase the cost of sugar
C) to control the supply and demand for sugar
D) to support a mass market for sugar
E) to improve the promotion of sugar

Question 47

Azerbaijan imported wheat from Romania in exchange for crude oil and Vietnam exchanged rice for Philippine fertilizer and coconuts. Both scenarios are examples of which of the following?

A) convertible trade
B) tarriffs
C) quotas
D) protectionism
E) countertrade

Question 48

________ ventures occur when a company joins forces with foreign investors to create a local business of its own.

A) Joint ownership
B) Licensing
C) Contract manufacturing
D) Franchising
E) Indirect exporting

Question 49

Sears opened up department stores in Mexico and Spain, where it found qualified local manufacturers to produce many of the product it sells. This type of joint venture is known as ________.

A) joint ownership
B) licensing
C) management contracting
D) indirect exporting
E) contract manufacturing

Question 50

Profit opportunities are greatest for marketers that use a(n) ________ strategy.

A) indirect exporting
B) contract manufacturing
C) joint ownership
D) franchising
E) direct investment

Question 51

Kyrgyzstan is a small, poor, mountainous country with a predominantly agricultural economy. Cotton, wool, and meat are the main agricultural products and exports. Fifty-one percent of the population lives in poverty. Kyrgyzstan is an example of a(n) ________.

A) BRIC country
B) subsistence economy
C) industrializing country
D) raw materials exporting economy
E) post-industrial economy

Question 52

Members of management at Growing Green, a company that markets organic and environmentally friendly gardening and landscaping supplies and equipment, are evaluating the benefits and disadvantages of indirect exporting, direct exporting, and licensing. In which stage of the global marketing process is Growing Green?

A) deciding whether to go global
B) deciding which markets to enter
C) deciding how to enter the market
D) deciding on the global marketing program
E) deciding on the global marketing organization

Question 53

Which of the following is the best example of nationalization?

A) In 1940, the city of New York purchased the bankrupt Brooklyn-Manhattan Transit rail lines.
B) In 1979, Great Britain made a partial sale of British Petroleum to private investors.
C) A private company contracts to manage all of a city's waste management.
D) A country's economic policy calls for a balance of trade.
E) A developing country receives a loan from the International Monetary Fund.

Question 54

Which of the following is the distinguishing characteristic of a born global company?

A) the speed at which the company becomes active in global markets
B) the company's preference for entering countries with different languages and commercial practices
C) the company's preference for using direct investment as a market entry strategy
D) the size of the company
E) the company's ability to overcome trade barriers

Question 55

Franchising is a form of ________.

A) importing
B) contract manufacturing
C) licensing
D) joint venture
E) direct investment

Question 56

________ involves entering a foreign market by establishing foreign-based manufacturing facilities.

A) Exporting
B) Direct investment
C) Joint venturing
D) Contract manufacturing
E) Direct exporting

Question 57

The method of entering a foreign market that presents the least amount of risk for a company is ________.

A) joint venturing
B) direct investment
C) exporting
D) joint ownership
E) contract manufacturing

Question 58

Through ________, a partner firm in the foreign market buys the right to use a company's manufacturing process, patent, or brand.

A) indirect exporting
B) licensing
C) contract manufacturing
D) direct investment
E) joint ownership

Question 59

Firms that wish to use indirect exporting go through ________ who understand the local market.

A) direct investors
B) franchisees
C) intermediaries
D) franchisors
E) contract manufacturers

Question 60

Through ________, a local firm purchases the right to use a company's processes and brands in a service business.

A) indirect exporting
B) contract manufacturing
C) joint ownership
D) franchising
E) direct investment

Question 61

A monarch, who usually reigns for life and by hereditary right, is the head of a parliamentary democracy.

Question 62

An industrializing economy is characterized by increasing raw material exports and decreasing raw material imports.

Question 63

A global firm can gain marketing, production, and financial advantages that are not available to purely domestic competitors.

Question 64

The only member countries of the North American Free Trade Agreement (NAFTA) are the United States, Canada, and Mexico.

Question 65

Indirect exporting is a market entry strategy with low costs but higher risks.

Question 66

Offshoring is a type of outsourcing in which business activities are completed in another country.

Question 67

Low masculinity societies have limited differentiation between genders.

Question 68

Refer to the passage below to answer the following questions.
Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered just whether a company-wide global focus would be more profitable after all.
Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Though seeing first-hand the benefits Wellman found with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting.
With the assistance of a domestic export department, the Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there."
If Selman & Saks allowed a French company to produce and market razors and trimmers carrying the company's brand in exchange for a royalty, Selman & Saks would be using which market entry strategy?

A) exporting
B) franchising
C) licensing
D) contract manufacturing
E) joint ownership

Question 69

The Tim Hortons chain accounts for more than half of all the donut and coffee stores in Canada. The chain's red-and-white store banners are fixtures in many Canadian communities. In 2001, the first Tim Hortons appeared in the United States through a contractual agreement allowing an independent operation to adopt Tim Hortons' entire way of doing business. This agreement is an example of a(n)________.

A) direct investment
B) franchise
C) contract manufacturer
D) joint ownership
E) joint venture

Question 70

Most businesses that operate globally tend to gravitate toward countries that are similar in language and commercial practices to their home country.

Question 71

The main pursuit of the World Trade Organization (WTO) is to guarantee basic human rights in all markets.

Question 72

In developed markets such as the United States, it has become more difficult for high rates of GDP growth to be sustained.

Question 73

Global marketing strategies are intended to create efficiencies.

Question 74

When considering the marketing mix in international marketing, advocates of ________ would be most likely to focus on the similarities among cultures and argue that basic needs and wants are the same everywhere.

A) nationalization
B) standardization
C) privatization
D) jurisdiction
E) extraterritoriality

Question 75

A glocal company is committed to using a combination of global and local marketing tactics in every foreign market it enters.

Question 76

Some host countries require foreign companies entering a market to make a direct investment in the country.

Question 77

Refer to the passage below to answer the following questions.
Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered just whether a company-wide global focus would be more profitable after all.
Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Though seeing first-hand the benefits Wellman found with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting.
With the assistance of a domestic export department, the Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there."
Which of the following best explains why Selman & Saks chose exporting as its entry method to the French market?

A) Exporting offers the highest potential for profit.
B) Exporting offers a lower risk level for the company.
C) Indirect exporting is more expensive than direct exporting.
D) Exporting offers the most savings through scale economies.
E) Exporting offers greater access to less expensive labor and materials.

Question 78

Refer to the passage below to answer the following questions.
Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered just whether a company-wide global focus would be more profitable after all.
Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Though seeing first-hand the benefits Wellman found with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting.
With the assistance of a domestic export department, the Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there."
Based on the passage, Selman & Saks entered the French market to gain which of the following benefits of global trade?

A) access to new consumer markets
B) access to less expensive labor
C) access to less expensive materials
D) access to foreign investment incentives
E) the ability to offset domestic economic cycles

Question 79

Though the economies of the BRIC countries are significant, even combined they are unlikely to overtake the size and importance of the U.S. economy.

Question 80

BRIC countries accounted for more than one-third of world economic growth in the most recent decade.