Question 1

_____ takes place when a foreign company produces goods to specification set by a domestic company,with the domestic firm's brand name affixed to the goods.
A) Importing
B) Joint venturing
C) Exporting
D) Contract manufacturing
E) Direct investing

Accepted Answer

Contract manufacturing is private-label manufactured by a foreign company.

Question 2

Disney sells the rights for an investment company to run a Disneyland theme park in Tokyo.The investment company gains most of the profits from the enterprise while paying Disney a percentage in royalties.This is an example of:
A) a joint venture
B) exporting
C) direct investment
D) licensing
E) capital-intensive manufacturing

Accepted Answer

This kind of arrangement is licensing because Disney is only selling the right to run the park.If the investment company does a poor job,Disney can seek out another to replace it.

Question 3

_____ is a global marketing strategy that requires active ownership (either a controlling interest or large minority interest)of a foreign company or overseas manufacturing or marketing facilities.
A) Market grouping
B) Import brokering
C) Export subsidizing
D) Licensing
E) Direct foreign investment

Accepted Answer

This is the definition of direct foreign investment.

Question 4

According to the text,which of the following is an example of a product strategy that would be appropriate for a global marketing company to implement?
A) Product adaptation
B) Product divestment
C) Product penetration
D) Market substitution
E) Product licensing

Accepted Answer

Product invention and product adaptation are the two product strategies discussed in the textbook.

Question 5

To enter the Chinese market,Walmart purchased the general merchandise chain Trust-Mart for about $1 billion.Walmart entered the Chinese market through the use of:
A) contract marketing
B) direct foreign investment
C) franchising
D) direct exporting
E) countertrading

Accepted Answer

Active ownership (either a controlling interest or large minority interest)of a foreign company or overseas manufacturing or marketing facilities is an example of direct foreign investment.

Question 6

The first step in creating the global marketing mix is to:
A) create a new product.
B) select the method of promotion.
C) develop a thorough understanding of the global target market.
D) set pricing policies.
E) decide whether product modification is necessary.

Accepted Answer

Developing an understanding of the global target market is the first step,and market research results in knowledge of customer needs and wants that will guide product,price,promotion,and distribution decisions.

Question 7

With _____,a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity.
A) direct investment
B) a joint venture
C) a buying-for-export agreement
D) a contractual agreement
E) a franchise relationship

Accepted Answer

This is the definition of joint venture.

Question 8

Sony,Panasonic,and other Japanese manufacturers that build products to customer order instead of churning out products in anticipation of demand have decided to hire U.S.companies to produce electronics for them.The Japanese companies will handle the marketing of the products.Japanese electronics companies are using:
A) contract manufacturing.
B) direct investment.
C) franchising.
D) direct exporting.
E) countertrading.

Accepted Answer

Contract manufacturing takes place when a foreign company produces goods to specification set by a domestic company,with the domestic firm's brand name affixed to the goods.In this case,the "domestic" companies are in Japan selling in a foreign market for them--the United States.

Question 9

Patch Products is an Australian company that has given permission to several Latin American companies to manufacture and market its patented Spanish/English children's frame tray puzzles.Because Patch uses licensing as its global marketing strategy,it:
A) must only pay a minimal royalty to the licensed companies.
B) cannot control how the puzzles are manufactured.
C) has involved itself in the global marketing strategy that gives it the greatest amount of control.
D) cannot have any control over how the puzzles are promoted or distributed.
E) chose a method of global marketing that created minimal risk.

Accepted Answer

A licensing company has control over all of the marketing activities associated with making its product.The licensed company pays the royalty to Patch.

Question 10

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.It success on its second foray into Japan was based on its ability to give the Japanese consumer what he or she needed without abandoning its product strategy.IKEA had to adopt a _____ strategy.
A) product substitution
B) market differentiation
C) message adaptation
D) product invention
E) product adaptation

Accepted Answer

Product adaptation is the slight alteration of the basic product (in this case,making it smaller.)

Question 11

The European Union accused South Korea of selling ships at a loss in an attempt to push its European rivals out of the market.In other words,South Korea was accused of:
A) dumping.
B) illegal importing.
C) countertrading.
D) fiscal impropriety.
E) using an illegal cartel.

Accepted Answer

Dumping is the sale of an exported product at a price lower than that charged for the same product in the home market of the exporter (South Korea).

Question 12

All of the following are reasons for dumping EXCEPT:
A) lowering unit costs by exploiting large-scale productions
B) attempting to avoid costly tariffs in the country to which the product is exported
C) attempting to maintain stable prices during periods of exchange rate fluctuations
D) temporarily distributing products in overseas markets to offset slack demand in the home market
E) trying to increase an overseas market share

Accepted Answer

Dumping is 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.

Question 13

Belgian Beer brewer InBev bought Anheuser-Busch for $52 billion.This is an example of a(n):
A) export
B) joint venture
C) franchise
D) licensed agreement
E) direct foreign investment

Accepted Answer

Active ownership of a foreign company or of overseas manufacturing or marketing facilities is direct foreign investment.InBev has invested in the United States through its purchase of Anheuser-Busch.

Question 14

Once marketing managers have determined a global product and promotion strategy,they can select the remainder of the marketing mix.However,entry into many developing nations presents special pricing problems because:
A) the rate of capital accumulation exceeds the rate of population growth.
B) of exchange rate caps.
C) of price discrimination.
D) there is a lack of mass purchasing power.
E) advertising time on television is available for sale in all developed countries.

Accepted Answer

Developing nations typically do not have mass purchasing power.

Question 15

Caterpillar,Inc.is the world's largest manufacturer of earthmoving and construction equipment.Kirovsky is a large Russian manufacturer of the same type of products.The two companies entered into a(n)_____ and created NEVAMASH,a new company.
A) import/export partnership
B) countertrade
C) disintermediation agreement
D) joint venture
E) franchise

Accepted Answer

A joint venture occurs when a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity.

Question 16

AFLAC has had to ditch the AFLAC duck in its Japanese commercials because the Japanese consumer does not like to be yelled at.Since Japan is the source of about 70 percent of the insurance company's business,it had no trouble adopting a _____ strategy.
A) product substitution
B) market differentiation
C) promotion adaptation
D) product invention
E) market diversification

Accepted Answer

AFLAC altered its promotional strategy to reach the Japanese market.

Question 17

Apple,Inc.used its Mac and PC guy ad in countries around the world.The company simply modified the characters a bit to fit the culture.Apple is attempting to market the Mac using:
A) standardized marketing practices.
B) mixed marketing.
C) character standardization.
D) global marketing standardization.
E) product invention.

Accepted Answer

Global marketing standardization is developing a single product for all markets and promoting it the same way all over the world.

Question 18

_____ is generally defined as 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.
A) Export reengineering
B) Crossdocking
C) Boycotting
D) Dumping
E) Countertrading

Accepted Answer

This is the definition of dumping.

Question 19

Currency markets operate under a system in which the prices of different currencies move up or down based on the demand for and supply of each currency.This practice is called:
A) Countertrading.
B) floating exchange rates.
C) variable purchasing power.
D) flexible monetary policies.
E) purchasing power elasticity.

Accepted Answer

This is the definition of floating exchange rates.

Question 20

Chinese don't like sweet cookies,and Kraft's Oreos were not selling well.Chinese consumers also thought the package was too expensive.Kraft introduced packages containing fewer Oreos at a reduced price and also created a "Chinese Oreo" consisting of four layers of crispy wafer filled with vanilla and chocolate cream,coated in chocolate.Which of the marketing mix strategies did Kraft use?
A) Countertrading
B) Product invention
C) Global market standardization
D) Product licensing
E) Product adaptation

Accepted Answer

Kraft altered their basic product (cookies)to meet conditions in the Chinese market.This is an example of a product adaptation.

Quiz 9: Developing a Global Vision

_____ takes place when a foreign company produces goods to specification set by a domestic company,with the domestic firm's brand name affixed to the goods.

Disney sells the rights for an investment company to run a Disneyland theme park in Tokyo.The investment company gains most of the profits from the enterprise while paying Disney a percentage in royalties.This is an example of:

_____ is a global marketing strategy that requires active ownership (either a controlling interest or large minority interest) of a foreign company or overseas manufacturing or marketing facilities.

According to the text,which of the following is an example of a product strategy that would be appropriate for a global marketing company to implement?

To enter the Chinese market,Walmart purchased the general merchandise chain Trust-Mart for about $1 billion.Walmart entered the Chinese market through the use of:

The first step in creating the global marketing mix is to:

With _____,a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity.

Patch Products is an Australian company that has given permission to several Latin American companies to manufacture and market its patented Spanish/English children's frame tray puzzles.Because Patch uses licensing as its global marketing strategy,it:

The European Union accused South Korea of selling ships at a loss in an attempt to push its European rivals out of the market.In other words,South Korea was accused of:

All of the following are reasons for dumping EXCEPT:

Belgian Beer brewer InBev bought Anheuser-Busch for $52 billion.This is an example of a(n) :

Once marketing managers have determined a global product and promotion strategy,they can select the remainder of the marketing mix.However,entry into many developing nations presents special pricing problems because:

Caterpillar,Inc.is the world's largest manufacturer of earthmoving and construction equipment.Kirovsky is a large Russian manufacturer of the same type of products.The two companies entered into a(n) _____ and created NEVAMASH,a new company.

AFLAC has had to ditch the AFLAC duck in its Japanese commercials because the Japanese consumer does not like to be yelled at.Since Japan is the source of about 70 percent of the insurance company's business,it had no trouble adopting a _____ strategy.

Apple,Inc.used its Mac and PC guy ad in countries around the world.The company simply modified the characters a bit to fit the culture.Apple is attempting to market the Mac using:

_____ is generally defined as 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.

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