Deck 21: Tapping into Global Markets

Question 1

Global firms plan, operate, and ________ their activities on a worldwide basis.

A) price
B) coordinate
C) service
D) distribute
E) produce

Answer 1

B

Question 2

A "waterfall" approach to international marketing is defined as

A) countries are entered based upon ease of entry.
B) countries in which the supply of raw material is greatest is entered first.
C) countries in which the demand for the product is greatest is entered first.
D) countries that are gradually entered sequentially.
E) countries in which the demand for the product is greatest is entered las.t

Answer 2

D

Question 3

The major decisions in international marketing include which of the following steps?

A) deciding on the marketing program
B) deciding whether to go abroad
C) deciding how to enter the market.
D) deciding which markets to enter
E) all of the above

Answer 3

E

Question 4

The internationalization process has four stages. In which stage does the company replace the export department with an international department?

A) establishment of one or more sales subsidiaries
B) no regular export activities
C) export via independent representatives (agents)
D) establishment of head offices abroad
E) establishment of production facilities abroad

Question 5

Exports represent approximately ________ of our gross domestic product; the highest percentage of any of the G-8 economies.

A) 38 percent
B) 25 percent
C) 30 percent
D) 18 percent
E) 50 percent

Question 6

A "sprinkler" approach to international marketing is defined as

A) countries in which the supply of raw material is greatest is entered first.
B) countries in which the demand for the product is greatest is entered first.
C) countries that are gradually entered sequentially.
D) many countries are entered simultaneously.
E) countries that are entered when timing is right.

Question 7

Emerging markets that embrace capitalism and _____ are especially attractive targets for marketers.

A) commodity
B) brands
C) low-priced products
D) profit
E) consumerism

Question 8

Most firms work with a(n) ________ and enter a nearby or similar country.

A) franchisee
B) import/export department
C) contractual export department
D) management contract
E) independent agent

Question 9

A small firm has decided to enter the international market. At the present time, the firm has decided to enter only one country. What is the next step in the decision making process if the firm is to continue with its plans?

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

Question 10

NAFTA established a free trade zone between what three countries?

A) Canada, Mexico, and Japan
B) Canada, Mexico, and Peru
C) Mexico, South America, and the United States
D) Canada, Mexico, and South America
E) Canada, Mexico, and the United States

Question 11

Developed nations account for about ________ of the world's population.

A) 20 percent
B) 25 percent
C) 10 percent
D) 15 percent
E) 30 percent

Question 12

A global firm is one that

A) where the strategic positions of competitors are fundamentally affected by their overall global positions.
B) operates in more than one country and has a sales and marketing staff in those countries developing.
C) has strategic positions in many countries but is not affected by competition research.
D) operates in more than one country and captures R&D, marketing, and other financial advantages not available to purely domestic competitors.
E) operates in more than one country and has a sales and marketing staff in those countries.

Question 13

A global industry is defined as

A) a firm that operates in more than one country and has a sales and marketing staff in those countries.
B) an industry that has strategic positions in many countries but is not affected by competition.
C) an industry that operates in more than one country and has a strategic position in many countries.
D) an industry that operates in more than one country and captures R&D, marketing, and other financial advantages in its costs and reputation.
E) an industry in which the strategic positions of competitors are affected by their overall global positions.

Question 14

The European Union, founded in 1957, brings its total membership to ____ countries.

A) 25
B) 26
C) 27
D) 28
E) 29

Question 15

Approximately 80 percent of the world's population lies outside of the developed nations and prosperous part of the world. Which of the following is the best tactic for serving markets with much less purchasing power?

A) offering lower sales prices but larger packaging sizes
B) promoting an eastern image
C) conducting business as usual in these countries
D) dismissing local competition
E) offering lower sale prices and smaller packaging

Question 16

Amway expanded from the U.S. into Canada in the 1950s and into Australia in 1971. Amway India was established in 1998. Amway is an example of which type of entry strategy?

A) sprinkler approach
B) born global strategy
C) waterfall approach
D) triad market strategy
E) first mover strategy

Question 17

Regional economic integration is defined as

A) trading agreements between countries and firms.
B) trading agreements between blocs of countries.
C) trading agreements between individual countries.
D) agreements between individual firms for the sake of commerce.
E) trading agreements between individual firms.

Question 18

Trade is Canada's primary engine of economic growth. Exports represent approximately ____ percent of our GDP.

A) 10
B) 20
C) 25
D) 30
E) 40

Question 19

When Microsoft introduces a new form of Windows software, the first-mover approach is preferred. Microsoft would then tend to use which form of entry strategy?

A) sprinkler
B) waterfall
C) born global
D) market attractiveness
E) continuous

Question 20

Factors that influence the "attractiveness" of a country to enter include which of the following?

A) incomes, families, competition, and cultural differences
B) population, incomes, competition, and political climate
C) product, geography, income and population, and political climate
D) product, geography, income, climate, and source of income
E) incomes, profit potentials, competition, and climate

Question 21

The normal way to get involved in an international market is through exporting. The second stage in internationalization process is ______

A) when the company hires domestic-based agents to negotiate foreign purchases.
B) when the company makes a commitment to expand into particular markets.
C) when the company works through independent agents.
D) a passive level of involvement in which the company exports its products from time to time.
E) when the company carries on exporting activities on the behalf of others.

Question 22

The fourth stage in internationalization process is when the company______.

A) forms an export department
B) makes an effort
C) establishes one or more sales subsidiaries
D) establishes production facilities abroad
E) hires independentagents

Question 23

Licensing is a simple way to become involved in international marketing. In licensing, the licensor issues a license to a foreign company to use a process, trademark, patent, or trade secret for a(n)

A) exchange of information or propriety information.
B) limited period of time.
C) exchange for "their" process, trademark, patent, or secret.
D) exchange for access to the market place.
E) fee or royalty.

Question 24

In a sprinkler approach to international expansion, ________.

A) countries are entered when competition is limited
B) countries are gradually entered sequentially
C) many countries are entered simultaneously
D) countries in which the supply of raw material is greatest are entered first
E) countries in which the demand for the product is greatest are entered first

Question 25

The five models of entry into foreign markets generally flow by increasing commitment, risk, control, and profit potential as follows:

A) indirect exporting, direct exporting, licensing, joint ventures, and direct investment.
B) direct investment, joint ventures, and licensing.
C) direct investment, joint ventures, licensing, and indirect exporting.
D) joint ventures, licensing, indirect exporting, direct investment.
E) direct investment, joint ventures, licensing, direct exporting, and indirect exporting.

Question 26

Your small firm has decided to begin exporting to a foreign country. Available to you are the five modes of entry. Your company has decided on direct exporting as its first venture into the foreign markets. What would the firm's next step in the exporting process be, considering that the next step involves increased risk and commitment to the processes?

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

Question 27

Mr. Day and Ms. Pound represent a number of producers and carry on exporting activities for each of them. As a result, Mr. Day and Ms. Pound's firm come under the administrative control of these producers. Mr. Day and Ms. Pound's firm could be described as

A) a joint venture.
B) agents.
C) a cooperative organization.
D) direct exporters.
E) indirect exporters.

Question 28

Indirect export has two advantages for the firm. First in involves less investment for the firm and secondly it

A) involves less products and product lines.
B) involves less people to manage the process.
C) involves less intrusion by the government.
D) involves less risk.
E) involves less paperwork.

Question 29

Existence of gray markets lead to which of the following outcomes?

A) They create a free-rider problem making legitimate distributors' investments in supporting a manufacturer's product less productive.
B) They make the distribution channel stronger.
C) Goods sold in grey markets are always counterfeit.
D) Goods sold in grey markets come with standard product warranties.
E) Taxes imposed on grey market products are very high.

Question 30

Domestic-based export merchants

A) buy the manufacturer's products and then sell them abroad.
B) seek and negotiate foreign purchases.
C) buy the manufacturer's products then sell them in the host country.
D) carry on exporting activities on behalf of several producers.
E) buy the manufacturer's products then fine agents and customers in foreign countries.

Question 31

A company can enter a foreign market through ________, which is a complete form of licensing in which the company offers a complete brand concept and operating system designed to ensure that the ________ operates according to the requirements of the licensor.

A) contract manufactures/licensor
B) franchising/franchisee
C) management contracts/firm
D) contract management/firm
E) joint venture/firm

Question 32

James LeBrun works out of Miami and buys locally produced manufacturer's products and sells them abroad mainly to Caribbean nations. Mr. LeBrun is

A) indirect exporting.
B) a cooperative organization.
C) an export-management company.
D) a domestic-based export agent.
E) a domestic-based export merchant.

Question 33

MERCOSUL is a free trade zone linking which of the following South American countries?

A) Canada, Brazil, and Paraguay
B) Brazil, Argentina, and Paraguay
C) Brazil, Argentina, Paraguay, and Uruguay
D) Mexico, Japan, Brazil, and Paraguay
E) Mexico, Brazil, and Paraguay

Question 34

In ________, the firm hires local manufacturers to produce the product. This gives the company less control over the manufacturing process and loss of profits of the manufacturing efficiencies.

A) franchising
B) joint ventures
C) management contracts
D) contract manufacturing
E) licensing

Question 35

Companies such as Marriott and Hyatt sell a variation of the licensing agreement called ________ to the owners of foreign hotels to manage these businesses for them in foreign countries.

A) joint ventures
B) franchising
C) contract manufacturing
D) management contracts
E) hotel management licensing

Question 36

One of the best ways to initiate or extend export activities used to be to

A) exhibit at an overseas trade show.
B) leverage Canadian embassies in Europe.
C) partner with international suppliers.
D) acquire foreign subsidiaries.
E) produce an international catalogue.

Question 37

A company can carry on direct exporting in several ways. These include domestic- based export department or division, overseas sales branch or subsidiary, traveling export sales representatives, and

A) export merchants in foreign countries.
B) domestic sales representatives.
C) export management companies.
D) foreign-based distributors or agents.
E) marketing departments based in the foreign country.

Question 38

A global marketer, such as Gillette, prefers to enter countries that: (1) rank high on market attractiveness; (2) are low in market risk; and (3)

A) in which they would have a promotional advantage.
B) in which they would have a competitive advantage.
C) in which they would have a service advantage.
D) in which they have a product alliance.
E) in which they would have a pricing advantage.

Question 39

Domestic based export agents perform a valuable service for the companies seeking to enter foreign markets. The primary function of these agents is to

A) carry on exporting activities on behalf of several producers.
B) export products to foreign countries.
C) buy the manufacturer's products then sell them in the host country.
D) seek and negotiate foreign purchases and are paid a commission on those sales.
E) buy the manufacturer's products and then sell them abroad.

Question 40

In choosing which countries to invest in, companies sometimes choose psychic proximity to their own country. Psychic proximity can best be defined as

A) countries that "mimic" the host country in terms of language and culture.
B) countries that the host country's management team have visited.
C) countries close to the "host" country in which the company feels that they can infiltrate quickly and profitable.
D) countries close to the "host" country in which the company feels comfortable with the language, laws, and culture.
E) countries close to the "host" country in which the company can easily transport their products.

Question 41

Companies can run the same marketing communications programs as used in the home market or change them for each local market, a process called

A) communication adaptation.
B) product communications.
C) marketing communications.
D) dual adaptation.
E) brand communications.

Question 42

Exxon used the slogan "Put a tiger in your tank" across countries with minor variations and gained international recognition. This is an example of

A) strategy formulation.
B) implementation.
C) functional analysis.
D) communication adaptation.
E) dual adaptation.

Question 43

P&G is about to enter the international market with its latest stain remover product. If P&G decides to take this product global by using the same marketing program wherever the product is sold, what form of global marketing program has it chosen?

A) adapted marketing program
B) global marketing program
C) straight extension marketing program
D) standardized marketing program
E) localized marketing program

Question 44

Straight extension of the product means

A) not introducing the product to the foreign market until changes have been made.
B) introducing the product to the foreign market without major changes to the product.
C) introducing the product to the foreign market with no major marketing program.
D) introducing the product to the foreign market without any changes to the product.
E) introducing the product to the foreign market with major changes to the product.

Question 45

If a company adapts or changes both the product and the communications, the company engages in a process called

A) marketing communication.
B) straight extension.
C) product adaptation.
D) full adaptation.
E) dual adaptation.

Question 46

Product adaptation involves

A) altering the product to meet local conditions or preferences.
B) changing the product to meet competition.
C) changing the product periodically.
D) altering the product to meet minimum acceptable standards.
E) upgrading the product on a periodic basis.

Question 47

The ultimate form of foreign involvement is direct ownership of foreign-based assembly or manufacturing facilities. One of the advantages of direct ownership can include economies of scale, creating jobs in the host country, developing deeper relations with local suppliers etcetera and the firm

A) reviews global outreach projections.
B) receives no disadvantages to direct investment.
C) retains full control over its investment.
D) reviews the successes from e-commerce.
E) redefines the business concept.

Question 48

Most brands are adapted to some extent to reflect significant differences in ________, competitive forces, and the legal and political environment.

A) political and social mores
B) business mission, brand development
C) strategy, consumer behaviour
D) consumer behaviour, brand development
E) programs, marketing communications

Question 49

Cambell Soup introduced its condensed soups to British consumers by employing ________. Unfortunately, consumers saw expensive small-sized cans and did not realize water was to be added.

A) regional version
B) market version
C) product adaptation
D) straight extension
E) design change

Question 50

Product invention consists of creating something new. Backward invention is reintroducing earlier product forms that are well adapted to a foreign country's needs. Forward invention is

A) increasing the control over the development of new products.
B) creating a new product to meet a need in another country.
C) inventing something that yet has a "market".
D) understanding the differences between host and foreign country markets.
E) creating a new product to meet the need in the host country.

Question 51

The definition of a joint venture company is one

A) in which two people or more own the firm jointly.
B) where ownership by local and distant investors in share ownership of a franchise.
C) where ownership is by investors of foreign firms.
D) in which foreign inventors join with local investors where they share ownerships and control.
E) where foreign investors join with others to own the firm.

Question 52

When the National Cash Register Company reintroduced its crank-operated cash registers in Latin America and Africa, it was practicing what form of invention?

A) traditional invention
B) product invention
C) product innovation
D) backward invention
E) forward invention

Question 53

Various governments force companies to charge the ________ price, which is charged by other competitors for the same or a similar product.

A) gray market
B) arm's-length
C) implicit
D) escalation
E) dumping

Question 54

A joint venture may be necessary or desirable for economic or political reasons. Additionally, a foreign firm might lack the ________, or managerial resources to undertake the venture alone.

A) resource, competency
B) financial, physical
C) political, competency
D) political, financial
E) financial, willingness

Question 55

Disadvantages to global marketing include differences in consumer needs, wants, and usage patterns for products; difference in consumer response to marketing-mix elements; differences in brand and product development and the competitive environment; and

A) differences in marketing institutions.
B) differences in product performance.
C) differences in management's reaction to the marketplace.
D) differences in currency.
E) differences in language and consumer expectations.

Question 56

An advantage of global marketing is that it can lower marketing costs, has economies of scale in production and distribution, can produce consistency in brand image, has the ability to leverage good ideas quickly and efficiently, and

A) is easier to adapt to foreign countries.
B) allows for individual countries to add their specific needs to the message.
C) is easier for corporations to evaluate the marketing message.
D) allows for uniformity of marketing practices.
E) allows for the same message to be used worldwide.

Question 57

A firm can successfully introduce four versions of its products into a foreign country or a firm may select one of these for inclusion. These versions include:

A) customer version, country version, and retailer version.
B) customer version, regional version, and city version.
C) regional version, country version, city version, and retailer version.
D) regional version, country version, city version, and market versions.
E) customer version, regional version, city version, and retailer version.

Question 58

International companies must decide on how much to adapt their marketing strategy to local conditions. At one extreme are companies that use a globally standardized marketing program worldwide. Which of the following options promises the lowest cost?

A) a concentric strategy which includes the product and distribution strategy
B) changing only the distribution channels to accommodate the host country
C) changes only to the product and communication message
D) standardization of the product, communication, and distribution channels
E) changes only to the product, keeping distribution channels and marketing communications consistent across countries

Question 59

Finnish cellular phone superstar Nokia customized its 6100 series phone for every major market in which it sells the product. In Asia, for example, the developers raised the ring volume so that it could be heard on the crowded Asian streets. This kind of adaptation is called

A) city version.
B) country version.
C) straight extension.
D) regional version.
E) market adaptation.

Question 60

Hofstede identifies four cultural dimensions that can differentiate countries. These are individualism versus collectivism, high versus low power distances, masculine versus feminine, and

A) weak versus strong uncertainty avoidance.
B) marketing management versus customer relationships.
C) total quality management versus JIT deliveries.
D) customer relationship management versus power distances.
E) strategic management versus marketing management.

Question 61

Hofstede identifies four cultural dimensions that can differentiate countries. These are individualism versus collectivism, high versus low power distances, ________, and weak versus strong uncertainty avoidance.

A) masculine versus feminine
B) total quality management versus JIT deliveries.
C) customer relationship management versus power distances.
D) strategic management versus marketing management.
E) marketing management versus customer relationships.

Question 62

Your firm thinks the job is done once the product leaves the factory for the foreign country. If you want them to pay attention to how the product moves within the foreign country, you'll have explain the three major links between seller and ultimate buyer in the foreign country. Which link is where the export department or international division makes decisions about channels and other marketing activities?

A) channel partners
B) advertising agencies
C) corporate headquarters
D) host country corporate offices
E) seller's international marketing headquarters

Question 63

The international division's corporate staff consists of functional specialists who provide services to various operating units. Operating units can be organized several ways. Your firm has a president of your division who reports to the president of the international division. This defines your organization as having

A) international subsidiaries.
B) an international company.
C) global organization.
D) a geographical organization.
E) a world product group.

Question 64

If you were the CEO of a company that was truly a global organization, you would have some decisions to make regarding corporate strategy. Bartlett and Ghoshal have distinguished three organizational strategies one of which is to

A) treat the world as a set of international markets.
B) treat the world as a single market.
C) treat the world as a number of regions.
D) treat the world as a subset of the "global" market.
E) treat the world as a multiple markets.

Question 65

Marketers must also adapt sales promotion techniques to different markets. Several European countries have laws preventing or limiting sales promotion tools such as discounts. In India and Brazil, Lands' End could not advertise its

A) sale price.
B) close-out specials.
C) comparative ads.
D) woman's bathing suits.
E) end-of-the-season sale.

Question 66

Many multinationals are plagued by the grey market problem. The grey market consists of

A) branded products diverted from one country to another.
B) branded products diverted from authorized distribution channels either in-country or across international borders.
C) products not having full warranties by the manufacturer.
D) products being repackaged from the intended country to a diverted country.
E) the marketing of products to older consumers.

Question 67

In an increasingly connected, highly competitive global marketplace, government officials, and marketers are concerned with how attitudes and beliefs about their country affect consumer and business decision-making. ________ is(are) the mental associations and beliefs triggered by a country.

A) Materials used in manufacturing
B) Corporate ownership of the firm
C) Competitive positions in the marketplace
D) Brand names and trademarks
E) Country-of-origin perceptions

Question 68

The use of media requires international adaptation because media availability varies from country to country. Norway, Belgium, and France do not allow cigarettes and alcohol to be advertised on TV. Norway and Sweden regulate TV advertising

A) using women in advertising.
B) not allowed to direct at children under 12.
C) between the hours of 9 p.m. and 6 a.m.
D) regarding content and clarity.
E) for those under the age of majority.

Question 69

Companies can manage their international marketing activities in three ways. These include, through export departments, international divisions,

A) and through local marketing efforts.
B) and franchises.
C) or from a fixed corporate headquarters.
D) or through a strong marketing department in the "host" country.
E) or a global organization.

Question 70

Kraft uses different ads for Cheez Whiz in different countries, such as Peurto Rico, where the cheese is put on everything. This is an example of which of the following adaptation strategies?

A) allowing country managers to create country-specific ads
B) using the same theme globally, but adapting the copy
C) using one message everywhere, but varying the language, name, and colours
D) developing a global pool of ads, from which countries select those most appropriate
E) adapting sales promotion techniques based on media availability

Question 71

Bartlett and Ghoshal have identified three organizational strategies for international firms. These are: (1) a global strategy treats the world as a single market; (2) a multinational strategy treats the world as a portfolio of national opportunities; and (3)

A) a "regcal" strategy standardizes broad brand concepts but customizes for regional differences.
B) a "glocal" strategy standardizes certain elements and localizes other elements.
C) the marketing strategy identifies those elements assigned to a country and uses those elements plus corporate's contribution in the marketing plan.
D) a local strategy standardizes all of the local elements.
E) assumes that there are no "local" or multinational differences in formulating the marketing mix.

Question 72

The cost escalation problem exists for multinationals and varies from country to country; the question is: How to set prices in different countries? Companies have three choices. One is to set a uniform price everywhere, two is to set a market-based price in each country, and three is to

A) set a cost-based price in each country.
B) set the transfer price at marginal costs + marginal revenue.
C) set a final "cost plus" price in each country.
D) vary the price/market/country on a daily basis to reflect consumer demand.
E) let the market dictate price/country.

Question 73

The favourability of country-of-origin perceptions must be considered both from a domestic and foreign perspective. Molson Canadian is an example of a product in the domestic market, where country-of-origin perceptions stirred consumers'

A) diversification.
B) regional pride.
C) familiarity with foreign products.
D) patriotic spirit.
E) product perceptions.

Question 74

The "whole channel concept for international marketing" includes the following steps:

A) sellers to channels between nations to final buyers.
B) sellers to channels within foreign nations to final buyers.
C) seller to seller's international marketing headquarters to channels between nations to channels within foreign nations to final buyers.
D) seller to marketing headquarters to channels within foreign markets to final buyers.
E) sellers to international markets to channels within foreign nations to final buyers.

Question 75

In 2000 Stelco, a Canadian steelmaker, successfully fought dumping changes against steelmakers in Brazil and other countries. "Dumping" is defined or occurs when

A) a company unloads an excess supply of the product at the best possible prices to the consumer.
B) a company must increase its prices/product prior to importing the product.
C) the company's pricing plans are below current domestic prices.
D) the company charges less that its costs but more than it charges in its home market.
E) a company charges either less than its costs or less than it charges in its home market.

Question 76

To sell soap in Japan, Procter & Gamble sells to a general wholesaler, which sells to a product wholesaler, which sells to a product-specialty wholesaler, which sells to a regional wholesaler, which sells to a local wholesaler, which sells to retailers. This scenario represents the third link in the chain between sellers and final buyers, which is

A) seller's corporate offices.
B) channels between nations.
C) seller's international marketing headquarters.
D) host country executive offices.
E) channels within foreign nations.

Question 77

In which of the following modes of licensing does the firm hire local producers to produce the product, giving the company less control over the manufacturing process?

A) management contracts
B) direct investment
C) joint venture production
D) franchising
E) contract manufacturing

Question 78

A firm that charges a price to another unit in the company sets the ________ for goods that it ships to its foreign subsidiaries.

A) original price
B) margin price
C) customer value price
D) transfer price
E) break-even price

Question 79

In the United States, Tim Hortons has only seen around a 3-percent annual growth as it faces strong competition from Dunkin' Donuts. The company may need to market itself differently in the United States. The process of changing the communications programs used in the home market for each new local market is called

A) straight extension.
B) communication adaptation.
C) product adaptation.
D) regionalized approach.
E) dual adaptation.

Question 80

A Gucci bag sells for $120 in Italy and $240 in Canada. This is an example of a problem faced by firms trying to sell products abroad. This phenomenon is called a

A) tactical pricing problem.
B) strategic marketing pricing problem.
C) transfer pricing problem.
D) price escalation problem.
E) market pricing problem.