Question 1

________ represent an exporting firm in a foreign market. They become the face of a company through servicing customers, selling products, and receiving payment. They often take title to the goods and resell them.

Accepted Answer

Distributors represent exporting firms in a foreign market by servicing customers, selling products, and receiving payment. They often take title to the goods and resell them. Brokers assist in finding buyers or sellers for a commission, export agents facilitate export transactions on behalf of the exporting firm, direct sales forces are employed by the exporting firm to sell products directly to customers, and freight forwarders handle the logistics of shipping goods.

Question 2

The ________ industry best illustrates the power of strategic alliances.

Accepted Answer

The airline industry is known for its strategic alliances, such as code-sharing agreements, joint ventures, and global alliances like Star Alliance and OneWorld. These alliances help airlines expand their reach, improve their services, and reduce their costs by sharing resources and expertise with their partners. For example, Delta and Air France-KLM have a joint venture that allows them to coordinate their schedules, pricing, and sales efforts, which has helped them capture a larger share of the transatlantic market.

Question 3

When local government relationships are critical to the success of international operations, the best organizational structure for a firm would be ________.

Accepted Answer

When local government relationships are critical to the success of international operations, the best organizational structure for a firm would be geographic regions, as it allows for a focus on local market conditions, regulatory requirements, and cultural differences. This structure also enables more effective communication and coordination with local government officials and stakeholders.

Question 4

Many countries restrict marketing to children more severely than in the United States. A firm considering direct foreign investment would report this finding under the heading of ________.

Accepted Answer

The finding that many countries restrict marketing to children more severely than in the United States would be reported under the heading of marketing communication barriers. This is because the firm would face barriers in communicating their marketing messages effectively to their target audience, which in this case would include children, due to stricter regulations in the foreign market.

Question 5

In the context of organizational structures, most companies today use some form of ________ structure that encourages regional autonomy while building product competence in key areas around the world.

Accepted Answer

The matrix structure encourages regional autonomy while building product competence in key areas around the world. This structure combines the geographic region and global product lines structure to create a hybrid structure that allows companies to have the best of both worlds.

Question 6

A technology or high-end industrial product company is most likely to use a(n) ________ in foreign markets because customers expect the expertise of highly-trained, accessible personnel.

Accepted Answer

A technology or high-end industrial product company would want to use a direct sales force in foreign markets because it allows for the company to provide the expertise of highly-trained personnel that customers expect. A direct sales force would also allow for better communication and relationship building with customers, which is important in these industries. A broker or export agent might be better for simpler products or commodities, and a distributor may not have the same level of expertise as a direct sales force. A freight forwarder's role is mainly to help with logistics and shipping, not sales.

Question 7

NaviCal Inc., a personal navigation system company, has contracted its manufacturing to a firm in Malaysia for five years. NaviCal had high financial growth, and it wants to purchase the manufacturing facility. This market entry method is called ________.

Accepted Answer

Direct foreign investment involves a company investing directly in a foreign country by creating a subsidiary or acquiring an existing business. In this case, NaviCal Inc. wants to purchase the manufacturing facility in Malaysia, which is an example of direct foreign investment. Franchising, strategic alliance, joint venture, and licensing are all different market entry methods, but they do not involve the direct ownership of a facility or subsidiary in a foreign country.

Question 8

Herbie recently read that Crane Airways of Japan, Kestrel Airlines of Germany, Heron Air of Australia, and Egret Airways of India have code sharing partnership, which allows passengers to fly on any of the airlines, share frequent flyer miles, and give each other logistical support. Herbie had just learned in his Global Marketing class that this arrangement is known as a(n) ________.

Accepted Answer

A strategic alliance is a cooperative agreement between two or more firms that engage in various forms of partnership such as joint ventures, code sharing, technology transfers, and cross-licensing. The code sharing partnership among Crane Airways, Kestrel Airlines, Heron Air, and Egret Airways exemplifies a strategic alliance as they share resources and coordinate their operations to expand their presence in the aviation industry. Franchising, green field project, acquisition, and licensing are not applicable in this scenario.

Question 9

The primary organizational patterns employed by organizations around the world are ________.

Accepted Answer

This is because the organizational patterns mentioned in option D, i.e. decentralized, centralized, and regionalized, are the most commonly used organizational patterns around the world. Option A is incorrect because there is no "highly decentralized" pattern commonly used. Option B is incorrect because "highly centralized" is not a common pattern, and option C is incorrect because "highly regionalized" is not a common pattern either. Option E's pattern, i.e. "moderately decentralized", is not commonly used, making it an incorrect choice.

Question 10

________ is the most common method for entering foreign markets.

Accepted Answer

Exporting is the most common method for entering foreign markets, as it involves the least amount of investment and risk. It allows companies to test the waters and gain experience in international trade before committing to more substantial investments like direct foreign investment or joint ventures. Licensing and franchising typically involve more significant investments and commitments, while direct foreign investment and joint ventures involve the highest levels of investment and risk.

Question 11

Arthur's Auto Parts Inc. wants to enter the Russian market. Russian law prevents foreign entities from owning a majority position in a company there. The best method of entry for Arthur's is most likely ________.

Accepted Answer

Joint venture allows Arthur's Auto Parts Inc. to enter the Russian market while complying with the local law that foreign companies cannot own a majority position in a company. By partnering with a local firm in a joint venture, Arthur's can bring its expertise and technology to the market while sharing ownership and control with a local partner. This can also help mitigate cultural and regulatory differences that can often be a barrier to entry in foreign markets.

Question 12

Coca-Cola introduced a new product called Diet Coke in Japan. Sales of this product were low in the initial stages because Japanese women associated the word diet with weakness; however, changing the name of the product from Diet Coke to Coke Light proved effective. Which of the following product issues affected the sales of Diet Coke in this scenario?

Accepted Answer

The low sales of Diet Coke in Japan were a result of the product not fitting the culture as Japanese women associated the word "diet" with weakness. However, changing the name of the product to Coke Light, which was more in line with the cultural preferences, helped to increase sales.

Question 13

NAFTA is a market zone that eliminates tariffs between the United States and ________.

Accepted Answer

NAFTA stands for North American Free Trade Agreement and it only eliminates tariffs between the United States, Canada, and Mexico. None of the other countries listed are part of NAFTA.

Question 14

Outdated cell phones used in Europe or Asia have been introduced into the Latin American markets that don't have more updated models. This is an example of ________.

Accepted Answer

Backward invention involves introducing simpler or earlier versions of products to markets where the demand exists for less advanced or less expensive products, as is the case with outdated cell phones being introduced into Latin American markets.

Question 15

Bistrone corn canned soup was made expressly for the Japanese market by Coca-Cola Japan. This is an example of ________.

Accepted Answer

Product invention refers to creating a new product specifically for a particular market, which is what Coca-Cola Japan did with Bistrone corn canned soup for the Japanese market.

Question 16

Advantages to licensing as a market entry strategy include all of the following EXCEPT________.

Accepted Answer

Licensing involves giving another company the right to use your patent or technology. Therefore, complete control of the patent is not an advantage of licensing. The other options, limited financial risk in the short run, easy availability of raw materials, services such as local distribution, and decrease in operational costs are all advantages of licensing.

Question 17

Which of the following is NOT an advantage of franchising as a market entry strategy?

Accepted Answer

Product consistency and easing of legal requirements are actually advantages of franchising as a market entry strategy. The disadvantage of franchising is that the franchisee may have a different vision or approach than the franchisor, which may harm the brand image.

Question 18

In the context of identifying specific consumer trends, ________ is not a product issue for international consumer marketers.

Accepted Answer

Manufacturing is not a product issue for international consumer marketers. While manufacturers are responsible for producing the product, identifying and adapting to specific consumer trends falls under the responsibility of the marketer. The other options listed (brand strategy, country-of-origin effect, quality, and fitting the product to the culture) all directly relate to the product and its positioning in the international marketplace.

Question 19

The value of the Japanese yen has fluctuated widely during the 2000s compared to the U.S. dollar. A firm considering direct foreign investment would report this finding under the heading of ________.

Accepted Answer

The fluctuation in the value of the Japanese yen compared to the U.S. dollar affects the transaction costs associated with currency exchange in international business operations, making it a relevant factor under this heading.

Question 20

Coca-Cola changes the taste of its soft drinks to meet local market preferences. This is an example of ________.

Accepted Answer

Product adaptation refers to modifying a product to meet the specific needs of a local market. By changing the taste of its soft drinks to match local preferences, Coca-Cola is adapting its product to better fit the preferences of consumers in different regions. Direct product extension involves offering the same product to different markets without making any changes to it, while product invention and backward product invention involve creating entirely new products. Hybrid products refer to a mix of two or more different product categories.

Quiz 2: Marketing Foundations: Global, Ethical, Sustainable