Deck 19: The Global Marketplace

Question 1

Before a company decides to go global, it must evaluate all of the following environments EXCEPT the ________ environment.

A) cultural
B) natural
C) political-legal
D) global marketing
E) economic

Answer 1

B

Question 2

According to the text, what location does Coca-Cola consider a promising long-term growth opportunity?

A) Russia
B) Brazil
C) China
D) Africa
E) India

Answer 2

D

Question 3

Which of the following does NOT characterize international trade in the past 30 years?

A) The number of multinational corporations has more than doubled.
B) Over 40 percent of the largest economies in the world are corporations.
C) Trade value of products and services grew even during the recession.
D) U.S. companies have long been successful at international marketing.
E) Home markets are just as rich in opportunity as foreign markets.

Answer 3

E

Question 4

A ________ firm is one that, by operating in more than one country, gains marketing, production, research and development, and financial advantages that are not available to purely domestic competitors.

A) global
B) domestic
C) federally chartered
D) direct investment
E) free trade zone

Question 5

Which of the following was designed to help foster trade between nations?

A) tariffs
B) GATT
C) exchange controls
D) quotas
E) nontariff trade barriers

Question 6

Since the global company sees the world as one market, it raises capital, obtains components and materials, and manufactures and markets its goods ________.

A) at home
B) in the lowest-cost country near where each product will be sold
C) in each country in which it does business
D) in the lowest-cost country on each continent
E) wherever it can do the best job

Question 7

A(n) ________ serves to limit the amount of foreign exchange and the exchange rate against other currencies.

A) exchange premium
B) free trade zone
C) quota
D) exchange control
E) tariff trade barrier

Question 8

Which of the following major decisions should a company make immediately after it decides to operate internationally?

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

Question 9

Bias against bids made by American companies is an example of a(n) ________.

A) quota
B) tariff
C) boycott
D) nontariff trade barrier
E) exchange control

Question 10

Foreign businesses in India appear to receive unusually close scrutiny and special regulations, aimed at protecting the local businesses. This is an example of a(n) ________.

A) nontariff trade barrier
B) tariff
C) boycott
D) exchange control
E) quota

Question 11

A(n) ________ is a limit on the amount of goods that an importing country will accept in certain product categories.

A) embargo
B) tariff
C) benchmark
D) quota
E) exchange control

Question 12

Which of the following is a nontariff trade barrier?

A) strike
B) quota
C) boycott
D) exchange premium
E) restrictive product standards

Question 13

Immediately after deciding which markets to enter, the company should determine ________.

A) the most suitable global communication program
B) how to price its products in different markets
C) the global marketing organization
D) the global marketing program
E) how to enter the market

Question 14

Which of the following terms refers to a tax levied by a foreign government against certain imported products to raise revenue or to protect domestic firms?

A) embargo
B) tariff
C) excise
D) exchange control
E) quota

Question 15

Which question should most likely be answered by all companies due to the rapid move toward globalization?

A) How should we eliminate domestic competition?
B) Should we diversify in a new business area in the home country?
C) Who will our global competitors be, and what are their strategies and resources?
D) How should we fulfill our environmental obligations?
E) Which medium of advertising should we use in our home country?

Question 16

Which of the following is most likely to be the consequence of increased growth of global trade?

A) Home markets become richer in opportunities.
B) Foreign firms expand aggressively into new international markets.
C) Global competition is curbed.
D) Industries become safe from foreign competition.
E) Domestic companies increase their chances to dominate their home markets.

Question 17

Firms that decide against international expansion to play it safe ________.

A) protect themselves from competition at home
B) gain a competitive edge against imports in their home markets
C) successfully shield themselves from foreign competition
D) risk losing their home markets
E) increase their chances of entering other markets

Question 18

Companies risk losing their home markets ________.

A) by protecting themselves from competition at home
B) to other domestic competitors
C) as they may find foreign competitors in their own backyards
D) by focusing only on their home markets
E) in hopes of growing market share at home

Question 19

Which of the following is a risk associated with international trade?

A) technological obsolescence
B) highly unstable governments
C) market monopolization
D) lack of trade barriers
E) currency stagnation

Question 20

Risks of global trade include all of the following EXCEPT ________.

A) high trade barriers
B) corruption
C) restrictive government policies
D) unstable currencies
E) increased opportunities for growth

Question 21

Which of the following industrial structures presents the fewest market opportunities?

A) subsistence economies
B) raw material exporting economies
C) industrializing economies
D) emerging economies
E) industrial economies

Question 22

In a(n) ________, the vast majority of people engage in simple agriculture and consume most of their output.

A) raw material economy
B) subsistence economy
C) industrializing economy
D) emerging economy
E) industrial economy

Question 23

In 2005, ________ established a free trade zone between the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.

A) CAFTA-DR
B) FTAA
C) CAN
D) NAFTA
E) the EU

Question 24

A country's ________ shapes its product and service needs, income levels, and employment levels.

A) international trade system
B) income distribution
C) industrial structure
D) political structure
E) foreign exchange system

Question 25

Which of the following was a result of the Uruguay Round of global WTO trade talks?

A) It increased the world's remaining merchandise tariffs by 30 percent.
B) It minimized the international protection of copyrights, patents, and trademarks.
C) It extended the WTO to cover trade in agriculture and a wide range of services.
D) It established NATO for purposes of collective security.
E) It established the EU to reduce trade barriers and increase cooperation among its members.

Question 26

Which of the following is an example of an economic community?

A) NATO
B) BRIC
C) CAFTA
D) GATT
E) WTO

Question 27

A(n) ________ community is a group of nations organized to work toward common goals in the regulation of international trade.

A) joint venture
B) strategic marketing
C) economic
D) joint-stock
E) multilateral

Question 28

Formed in 2004 and formalized in 2008, ________ makes up the largest trading block after NAFTA and the European Union.

A) CAFTA-DR
B) FTAA
C) UNASUR
D) MCAN
E) GATT

Question 29

The two key economic factors reflecting a country's attractiveness as a market are its industrial structure and its ________.

A) communication adaptation
B) nontariff trade barriers
C) exchange controls
D) income distribution
E) transportation systems

Question 30

Formed in 1957, ________ set out to create a single European market by reducing barriers to the free flow of products, services, finances, and labor among member countries and developing policies on trade with nonmember nations.

A) the Uruguay Round
B) the European Union
C) the European Organization
D) the European Central Bank
E) CAFTA

Question 31

In 1994, ________ established a free trade zone among the United States, Canada, and Mexico.

A) GATT
B) the WTO
C) NAFTA
D) the EU
E) CAFTA

Question 32

Economic communities are also known as ________.

A) global firms
B) free trade zones
C) management communities
D) production communities
E) open channels

Question 33

Which of the following is a problem caused by a policy of the EU?

A) Barriers to the free flow of products, services, finances, and labor decreased.
B) Policies on trade with nonmember nations were developed.
C) Economic powers stepped in to prop up weaker economies.
D) Adopting a common currency decreased currency risk.
E) The EU represents one of the world's largest single markets.

Question 34

The EU helped unify Europe by adopting the euro as a common currency. Adopting a common currency has caused problems as stronger economic countries have had to prop up all the following European countries EXCEPT ________.

A) Cyprus
B) Portugal
C) France
D) Greece
E) United States

Question 35

The ________, established in 1947 and modified in 1994, was designed to promote world trade by reducing tariffs and other international trade barriers.

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

Question 36

Growing Green, a U.S. company that markets organic and environmentally friendly gardening and landscaping supplies and equipment, wants to expand the business internationally. Growing Green managers are currently examining the rules imposed by the WTO and the agreements made by NAFTA and the EU. In which stage of the international marketing process is Growing Green?

A) deciding on the global pricing strategies
B) deciding which markets to enter
C) deciding how to enter the market
D) deciding on the global marketing program
E) looking at the global marketing environment

Question 37

Trusted Wholesalers is a company that purchases products produced in Mexico and sells them to companies based in the United States and Canada. Management at Trusted Wholesalers would most likely be interested in becoming experts in the policies developed by ________.

A) the EU
B) NAFTA
C) CAFTA-DR
D) APTA
E) the BRIC countries

Question 38

Which of the following is a type of industrial structure?

A) marketing economies
B) subsistence economies
C) laissez-faire economies
D) capitalistic economies
E) socialistic economies

Question 39

________ was established to replace GATT in 1995 and now oversees the original GATT provisions.

A) The WTO
B) The EU
C) NAFTA
D) CAFTA
E) NATO

Question 40

Trusted Wholesalers is a company that currently purchases products made in Mexico and sells them to companies based in the United States and Canada. Trusted Wholesalers is considering whether to also purchase products produced in Costa Rica and the Dominican Republic. To make their decision, members of management at Trusted Wholesalers will most likely evaluate the agreements made by ________.

A) the EU
B) NAFTA
C) CAFTA-DR
D) MCAN
E) UNASUR

Question 41

Countries with ________ economies consist mostly of households with very low family incomes.

A) industrial
B) industrializing
C) raw material exporting
D) emerging
E) subsistence

Question 42

The United States and Norway are examples of ________ economies.

A) subsistence
B) industrializing
C) emerging
D) industrial
E) raw material exporting

Question 43

India needs more imports of raw materials such as textiles, steel, and heavy machinery and fewer imports of finished textiles, paper products, and automobiles. In the context of industrial structures, India is most likely a(n) ________ economy.

A) subsistence
B) totalitarian
C) raw material exporting
D) agrarian
E) industrializing

Question 44

Coffee, tea, cotton, and tobacco are the main exports of Uganda. It is most likely that Uganda has a(n) ________ economy.

A) subsistence
B) marketing
C) merchandise exporting
D) raw material exporting
E) industrializing

Question 45

A(n) ________ economy is rich in one or more natural resources but poor in other ways and much of its revenue comes from exporting its natural resources.

A) industrial
B) industrializing
C) raw material exporting
D) subsistence
E) agrarian

Question 46

Industrializing economies are also known as ________ economies.

A) emerging
B) raw material exporting
C) totalitarian
D) subsistence
E) capitalist

Question 47

________ are major importers and exporters of manufactured goods and services

A) Raw material exporting economies
B) Subsistent economies
C) Industrializing economies
D) Industrial economies
E) Emerging economies

Question 48

BRICS countries are examples of ________ economies.

A) raw material exporting
B) industrializing or emerging
C) subsistence
D) industrial
E) totalitarian

Question 49

The BRICS countries are ________.

A) Bolivia, the Republic of Haiti, Israel, and Chile
B) Britain, the Republic of the Marshall Islands, Ireland, and the Commonwealth of Australia
C) Brazil, Russia, India, China, and South Africa
D) Burundi, Rwanda, Ivory Coast, and Congo
E) Belarus, Romania, Iceland, and Czech Republic

Question 50

Which of the following is an example of a raw material exporting economy?

A) Sweden
B) Russia
C) the United Kingdom
D) Chile
E) Brazil

Question 51

Sellers might accept a(n) ________, one whose removal from the country is restricted by the buyer's government, if they can buy other goods in that country that they need themselves or can sell elsewhere for a needed currency.

A) blocked currency
B) countervailing duty
C) custom duty
D) anti-dumping duty
E) tariff

Question 52

Which of the following involves the direct exchange of goods and services?

A) cash transaction
B) compensation
C) buyback
D) blocked currency
E) barter

Question 53

Which of the following is a political and legal factor that a company should consider before deciding to enter into a new country?

A) monetary and trade regulations
B) transportation structure
C) population size and growth
D) industrial infrastructure
E) business norms and approaches

Question 54

A company should consider political and legal factors such as monetary regulations, political stability, the country's attitudes toward international buying, and ________ when determining whether to enter a specific country.

A) size of population
B) government bureaucracy
C) natural resources
D) income distribution
E) cultural norms

Question 55

In a(n) ________ economy, fast growth in manufacturing results in rapid overall economic growth.

A) industrial
B) industrializing
C) materials exporting
D) subsistence
E) agrarian

Question 56

Which of the following is an economic factor that a company should consider before deciding to enter into a new country?

A) industrial structure
B) natural resources
C) cultural and social norms
D) political stability
E) climate

Question 57

Which of the following characterizes emerging economies?

A) Industrialization typically creates a new rich class and a growing middle class, both demanding new types of imported goods.
B) They trade goods among themselves and also export them to other types of economies for raw materials and semifinished goods.
C) Most African countries fall into this category.
D) They consume most of their output and barter the rest for simple goods and services.
E) These countries are the best markets for large equipment, tools and supplies, and trucks.

Question 58

Foreign businesses in India appear to receive unusually close scrutiny and must meet special regulations, aimed at protecting local businesses. This includes nontariff trade barriers. This reflects that a country's ________ should be carefully considered before doing business in that country.

A) political-legal environment
B) industrial structure
C) cultural norms
D) natural resources
E) income distribution

Question 59

Income distribution is the second economic factor. While much of Africa consists of countries with subsistence economies, companies are increasingly targeting ________ consumers in subsistence and emerging economies.

A) upper-class
B) "bottom of the economic pyramid"
C) middle-income
D) low-income
E) middle-income and low-income

Question 60

Which of the following is an example of an industrial economy?

A) Japan
B) China
C) Vietnam
D) India
E) North Korea

Question 61

Nike inadvertently offended Chinese officials when it ran an ad featuring LeBron James crushing a number of revered Chinese figures in a kung fu-themed television ad. As a result, Nike had to release a formal apology. This is an example of the impact of ________ on marketing strategy.

A) culture
B) political stability
C) level of industrialization
D) income distribution
E) monetary regulations

Question 62

A company should make several important decisions before deciding which markets to enter. These include all of the following EXCEPT ________.

A) how many countries it wants to enter
B) what volume of foreign sales it wants
C) how many different products it wants to offer in a specific country
D) what its international marketing objectives are
E) what its international marketing policies are

Question 63

Tariffs are limits on the amount of foreign imports that a country will accept in certain product categories.

Question 64

Refer to the scenario below to answer the following question(s).
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 whether a company-wide global focus would be more profitable after all.
Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Even after seeing the benefits Wellman achieved 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, 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."
What did Selman & Saks hope to gain by entering the French market?

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 65

If Azerbaijan imported wheat from Romania in exchange for crude oil, and Vietnam exchanged rice for Philippine fertilizer and coconuts then these scenarios would be examples of ________.

A) cash transaction
B) compensation
C) buyback
D) blocked currency
E) barter

Question 66

Market size, market growth, the cost of doing business, competitive advantage, and risk level all help a company ________.

A) determine a market's potential
B) determine a country's degree of globalization
C) evaluate its marketing objectives
D) evaluate its value delivery network
E) determine a country's income distribution

Question 67

Foreign firms are expanding aggressively into new international markets, and home markets are no longer as rich in opportunity.

Question 68

Which of the following is a demographic factor that a company should consider before deciding to enter into a new country?

A) transportation structure
B) natural resources
C) political stability
D) languages
E) education

Question 69

Demographic characteristics, geographic characteristics, economic factors, sociocultural factors, and political and legal factors all help a company ________.

A) determine a market's potential
B) determine a country's degree of globalization
C) evaluate its marketing objectives
D) evaluate its value delivery network
E) determine a country's income distribution

Question 70

In 1994, the North American Free Trade Agreement (NAFTA) established a free trade zone among the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.

Question 71

Which of the following is a geographic factor that a company should consider before deciding to enter into a new country?

A) climate
B) population size
C) GDP size and growth
D) government bureaucracy
E) business norms and approaches

Question 72

Which of the following would a defender of globalization most likely use as an example to argue that concerns of Americanization are overblown and that globalization is indeed a two-way street?

A) the view of McDonald's being a domestic brand in China
B) the growing popularity of coffee in China since the introduction of Starbucks
C) the growing number of IKEA furniture stores in the United States
D) the initial failure of Disneyland Paris
E) the anti-globalization protests aimed at KFC

Question 73

Which of the following is a sociocultural factor that a company should consider before deciding to enter into a new country?

A) political stability
B) population density (urban vs. rural)
C) education
D) income distribution
E) consumer lifestyles, beliefs, and values

Question 74

UNASUR is the economic community of South American nations.

Question 75

The EU acts as an umbrella organization that oversees GATT and mediates global disputes.

Question 76

Which of the following is the LEAST critical decision a company should make before going abroad?

A) Can the company learn to understand buyer behavior of consumers in other countries?
B) Can the company offer competitively attractive products?
C) Can the company adapt to other countries' business cultures?
D) How many foreign nationals should the company employ?
E) Do the company's managers have the necessary international experience?

Question 77

CAFTA-DR has eliminated all trade barriers and investment restrictions among the United States, Canada, and Mexico.

Question 78

Nontariff trade barriers include restrictive product standards.

Question 79

Widespread adoption of the euro has decreased much of the currency risk associated with doing business in Europe, making member countries with previously weak currencies more attractive markets.

Question 80

The World Trade Organization established the General Agreement on Tariffs and Trade, which replaced the WTO in 1995 and now oversees the original WTO provisions.