Deck 3: Global Markets and Marketing

Question 1

The economic reasons for international trade include:

A) a good advertising campaign that has become boring in the U.S. due to repetition.
B) the need to take advantage of an oversupply of labor.
C) a comparative advantage.
D) the desire to grow a company by overcoming trade barriers.
E) all of the above.

Answer 1

a comparative advantage.

Question 2

Countries that possess unique natural or human resources have a(n) _____ when it comes to producing particular products.

A) comparative advantage
B) production perquisite
C) economic hammerlock
D) competitive lead
E) competitive distinction

Answer 2

comparative advantage

Question 3

The African nations of Zaire and Morocco control 65 percent of the world's supply of cobalt. In terms of international marketing, the natural occurrence of cobalt gives these two countries a:

A) comparative advantage.
B) production perquisite.
C) demographic advantage.
D) competitive lead.
E) competitive distinction.

Answer 3

comparative advantage.

Question 4

Until the development of synthetic fertilizers, Chile controlled the fertilizer market with its large deposits of sodium nitrate, a naturally-occurring fertilizer. The deposits of sodium nitrate gave Chile a:

A) competitive lead.
B) technological advantage.
C) economic advantage.
D) comparative advantage.
E) trade barrier.

Question 5

South Africa has approximately 90 percent of the diamonds in the world. This gives South Africa an extraordinary:

A) competitive lead.
B) technological advantage.
C) economic advantage.
D) comparative advantage.
E) trade barrier.

Question 6

Andorra is a fairly prosperous nation that is 2.5 times the size of Washington, D. C. It is a popular site for immigrants because it does not have an income tax as do most other European countries. The absence of income tax gives Andorra a(n):

A) competitive lead.
B) technological advantage.
C) economic advantage.
D) comparative advantage.
E) trade barrier.

Question 7

A country's _____ is an accounting record of all of its transactions with all the other nations of the world.

A) equilibrium point
B) balance of payments
C) trade equilibrium
D) break even point
E) trade balance

Question 8

A country's _____ is the difference between what it exports and what it imports.

A) equilibrium point
B) balance of payments
C) trade equilibrium
D) break even point
E) trade balance

Question 9

Andorra annually exports $58 million dollars worth of products and imports $1.077 billion. Andorra has a:

A) countertrade-based economy.
B) trade surplus.
C) non-economic exchange practice.
D) trade deficit.
E) fiduciary overdraft.

Question 10

A country's trade balance is the:

A) relationship between manufacturing and agriculture within its national borders.
B) difference between what it pays in import duties and what it earns from export duties.
C) accounting record of all of its transactions with all other nations of the world.
D) dollar value of the difference between what it exports and what it imports.
E) quantity of items that it exported weighed against the quantity of items it imports.

Question 11

In international trade, if a country has a trade deficit, it means the:

A) value of the country's imports exceeds the value of its exports.
B) country is maintaining its imports and increasing its level of exports.
C) country is not paying its international debts.
D) value of the country's exports exceeds the value of its imports.
E) country is a developing nation.

Question 12

Which of the following expenditures would contribute to a U.S. trade deficit?

A) expenditures on foreign aid.
B) the importation of foreign oil.
C) money spent by American tourists traveling abroad.
D) expenditures for our overseas military forces.
E) all of the above expenditures.

Question 13

Which of the following has NOT contributed to the U.S. trade deficit?

A) American consumers have developed preferences for imported products.
B) An international movement to standardize strategic marketing programs has been growing.
C) Government policies in foreign countries encourage foreign trade.
D) Foreign firms are developing excellent marketing skills.
E) The U.S. lead in technology has been narrowed.

Question 14

Which of the following does NOT have a significant impact on the U.S.'s trade balance?

A) its infrastructure
B) its foreign aid
C) its oil imports
D) its citizens traveling abroad
E) its military forces stationed overseas

Question 15

Russian gas monopoly Gazprom sells gas to Russian industrial companies at one-sixth the price it charges European buyers. This _____ would have a significant influence on the balance of trade between Russia and other European nations.

A) industrial subsidiary
B) balance of trade
C) subsidized industry
D) tariff
E) financial boycott

Question 16

Why does a firm choose to engage in international marketing?

A) the possession of a technological advantage
B) domestic markets become saturated
C) the existence of a comparative advantage
D) the simple existence of readily accessible markets
E) all of the above

Question 17

_____ takes place when an organization actively markets its products in two or more countries.

A) Proactive marketing
B) Market diversity
C) Diverse commerce
D) International marketing
E) Societal marketing

Question 18

Cola Turka was launched in the summer of 2003 in Turkey by a Turkish food company, Ulker Group. Cola Turka and other products made by Ulker are actively sold in Europe, Canada, and other areas where there is a large Islamic community. (It is not available in the U.S.) Ulker Group engages in:

A) proactive marketing
B) market diversity
C) diverse commerce
D) international marketing
E) ethnocentric commerce

Question 19

With _____, essentially the same marketing program is employed around the world.

A) synonymous marketing
B) a global strategy
C) international uniformity
D) market uniformity
E) market symmetry

Question 20

Cola Turka was launched in the summer of 2003 in Turkey by a Turkish food company, Ulker Group. Ulker Group uses global strategy to see Cola Turka and its other products in Europe, Canada, and other areas where there is a large Islamic community. From this information, you know that Ulker:

A) use essentially the same marketing program around the world.
B) use a product adaptation strategy.
C) modify their products for climate, custom, and use variations.
D) transfer relatively few marketing dimensions from one country to another.
E) permit local brand managers to develop marketing programs.

Question 21

According to the VP of marketing and communications at IBM, it is very important for IBM to have a common look and feel around the world in the 160 countries in which it operates. This statement indicates IBM purposefully uses a _____ strategy.

A) regional
B) transnational
C) regiocentric
D) local
E) global

Question 22

Mars, Inc. is using a _____ strategy in Europe. The call to candy bar lovers in the United Kingdom is "Pleasure you can't measure" while their counterparts in Germany will be targeted with "It's Mars- that's it". In France, audiences will see "Mars-What happiness."

A) regional
B) transnational
C) regiocentric
D) local
E) continental

Question 23

Automated Logic Corporation, a manufacturer of high-tech building automation systems, can use the same marketing program to sell its system in Singapore, New Delhi, and Minneapolis. The manufacturer can use:

A) market adaptation.
B) a global strategy.
C) multicultural marketing.
D) market aggregation.
E) market uniformity.

Question 24

According to one of its annual reports, Colgate-Palmolive's "researchers create products for the world-- not for a single market." This statement indicates a corporate philosophy that supports:

A) market adaptation.
B) a global strategy.
C) multicultural marketing.
D) market aggregation.
E) market uniformity.

Question 25

Max Factor cosmetics are sold all over the world, but in Latin America, the lipsticks and eye shadows are in much brighter colors than found in the rest of the world. This is an example of a _____ strategy.

A) local
B) regional
C) market aggregation
D) global
E) ethnocentric

Question 26

Whirlpool sells washing machines all over the world. To sell its washing machines in India, it had to develop a new type of agitator for its washers that would not tangle a sari. To enter the Indian washing machine market, Whirlpool used a(n) _____ strategy.

A) local
B) repositioning
C) market aggregation
D) global
E) regiocentric

Question 27

Which of the following is a cultural element that can be used to determine whether a nation's citizens are a potential market for a brand of breakfast cereal?

A) the family structure
B) religious beliefs
C) social customs and behavior
D) educational level
E) all of the above

Question 28

An Ad for HSBC, an international banking company, showed three pictures of a cricket. The first labeled USA-pest. The second labeled China Pet, and the third labeled Northern Thailand appetizer. The ad read, "Never underestimate the importance of local knowledge." HSBC has recognized how _____ forces influence the environment in which the bank operates.

A) political
B) competitive
C) social and cultural
D) economic
E) political and legal

Question 29

All of the following are social and cultural forces, which can be used to determine whether or not a nation's citizens are a potential market for many products EXCEPT:

A) the family structure.
B) per capita income.
C) social customs.
D) language differences.
E) educational level.

Question 30

Packaging for Healthy Choice products prominently features the color green. The product would not sell well in Malaysia because there green is associated with death. This is an example of how _____ forces in the environment can affect what products a nation will buy.

A) natural
B) competitive
C) social and cultural
D) economic
E) political and legal

Question 31

When researchers ask Ethiopians what they feel is the most important issue that affects them today, they inevitably say ethnicity. Ethiopia with a population of more than 65 million has more than 89 registered ethnic groups and about 140 recognized languages, each associated with a uniquely different culture and way of life. _____ forces have a strong influence on international marketers.

A) Natural
B) Competitive
C) Social and cultural
D) Economic
E) Political and legal

Question 32

Ninety-five percent of the CDs sold in Switzerland are by local singers and musicians while 51 percent of the CDs sold in Greece are by local artists. Someone who is interested in entering the market needs to understand how _____ forces affect the music people listen to.

A) demograhic
B) competitive
C) social and cultural
D) economic
E) political and legal

Question 33

Ocean Spray experienced poor sales in Great Britain until it mixed its cranberry juice with black currant juice, a juice that is very popular with British children, and it started using juice boxes, which are preferred by Britons over bottles. This change in the product and its packaging reflects a response to the _____ forces within the international environment.

A) political
B) competitive
C) social and cultural
D) economic
E) political and legal

Question 34

Which of the following is a key factor for determining the economic attractiveness of an international market?

A) its trade barriers
B) its population distribution
C) its infrastructure
D) its trade agreements
E) all of the above

Question 35

Almost 50 percent of the population in the landlocked, mountainous country of Andorra have a telephone. The number of telephones is part of Andorra's:

A) economic development.
B) infrastructure.
C) organizational structure.
D) industrial hierarchy.
E) trade barriers.

Question 36

A nation's ability to provide the phone lines and electrical service needed for e-commerce is an example of its:

A) culture.
B) infrastructure.
C) organizational structure.
D) industrial hierarchy.
E) trade barriers.

Question 37

A country's ability to provide transportation, communications, and energy is its:

A) economic development.
B) infrastructure.
C) organizational structure.
D) industrial hierarchy.
E) trade barriers.

Question 38

Azerbaijan is one of the former Soviet republics. The nation is slightly smaller than Maine. It has a total of 52 airports, but only nine of them have paved runways. Its airport system is a part of Azerbaijan's:

A) economic development.
B) infrastructure.
C) organizational structure.
D) industrial hierarchy.
E) transportation barriers.

Question 39

Which of the following describes part of the Bulgarian infrastructure?

A) The population of Bulgaria is approximately 9 million.
B) The average Bulgarian earns the equivalent of $233 American dollars annually.
C) There are only two major highways in Bulgaria--one from Sofia to Istanbul and one from Sofia to Bucharest.
D) Joint ventures with foreign companies are permitted in Bulgaria.
E) Honeywell and Pepsi are both U.S. companies that have been successful in the Bulgarian market.

Question 40

Andorra has approximately 65, 000 people. Tourism is the mainstay of Andorra's tiny, well-to-do economy and accounts for roughly 80 percent of the nation's GDP. An estimated 9 million tourists visit annually are attracted by Andorra's duty-free status and by its summer and winter resorts. Per capita GDP in the nation is $19,000. Andorra would be an example of a(n):

A) newly industrialized nation.
B) postindustrial nation.
C) traditional nation.
D) less developed nation.
E) heavily industrialized nation.

Question 41

Less developed countries (LDC) have:

A) eager work forces.
B) high wages.
C) unstable governments.
D) low rates of economic growth.
E) all of the above.

Question 42

Postindustrial countries have:

A) well-trained work forces.
B) high levels of education and literacy.
C) stable governments.
D) well-developed infrastructures.
E) all of the above.

Question 43

Which of the following would be a useful indicator of a country's level of economic development?

A) the number of daily newspapers
B) the infant mortality rate
C) distribution of income
D) rate of growth of buying power
E) all of the above

Question 44

Which of the following is a commonly used economic criterion for assessing a country's level of economic development?

A) distribution of income
B) the number of daily newspapers
C) percent of the population that lives in urban areas
D) infant mortality rate
E) all of the above

Question 45

According to the text, which of the following is an economic element that can be used to determine whether a nation's citizens are a potential market for many products?

A) language differences
B) competition
C) occupations of citizens
D) types of trade barriers
E) education level

Question 46

A Georgia aircraft distributor wants to sell 10 of its Ayres Turbo Thrush cropdusting planes to Iran, but the U.S. State and Commerce Departments have refused to approve the $7 million deal, saying the airplanes can be converted to spray chemical weapons. This is an example of how _____ affect international marketing.

A) trade barriers
B) local-content laws
C) infrastructures
D) political and legal forces
E) list quotas

Question 47

Hartsfield International Airport wants to offer nonstop service between Atlanta and Tel Aviv, Israel. To do so it must receive approval from both the U.S. government and the Israeli government--neither of which has shown much interest in the idea. This is an example of how _____ can affect marketing strategy.

A) trade barriers
B) local-content laws
C) infrastructures
D) political and legal forces
E) list quotas

Question 48

The advertising for New Balance shoes claimed the shoes are "Made in America," but all the soles and most of the uppers are imported from China. The Federal Trade Commission made New Balance discontinue this advertising. This is an example of a company can have problems with _____ forces in its environment.

A) technological
B) competitive
C) social and cultural
D) economic
E) political and legal

Question 49

The Southern Shrimp Alliance presented the following statement to the U.S. Senate: "A variety of financial incentives provided by national government and international institutions over a number of years have over-stimulated the infrastructure and production of farm-raised shrimp in many of the targeted countries. This overproduction means that ever-increasing volumes of foreign shrimp are entering the U.S. market at ever-lower prices." This statement reflects concern about how _____ forces are adversely affecting the U.S. shrimp industry.

A) competitive
B) demographic
C) social and cultural
D) technological
E) economic

Question 50

Beer cannot be exported into Mexico without a license. To obtain a license, an importer must prove the domestic demand for beer cannot be satisfied by Mexican breweries. This is an example of how _____ affect international marketing.

A) trade barriers
B) local-content laws
C) infrastructures
D) political and legal forces
E) list quotas

Question 51

A(n) _____ is a tax imposed on a product entering a country.

A) import quota
B) boycott
C) ad valorem tax
D) tariff
E) trade ratio

Question 52

In 2004, the European Union imposed a(n) _____ or a tax on bananas imported from Latin America.

A) import quota
B) boycott
C) ad valorem quota
D) tariff
E) trade ratio

Question 53

China considered raising _____ on certain categories of textiles in the hope of slowing down the rapid growth in number of shipments to the U.S. and Europe by raising the price of the textiles to foreign buyers.

A) import quotas
B) boycotts
C) income taxes
D) export tariffs
E) trade ratios

Question 54

A(n) _____ is a limit on the amount of a particular product that can be brought into a country.

A) import quota
B) boycott
C) ad valorem tax
D) tariff
E) trade ratio

Question 55

As the third-largest market for motorbikes in the world, the nation of Vietnam is a logical location for Honda, Suzuki and Yamaha motorcycle manufacturing plants. The Vietnamese government has instituted a(n) _____ which limits the quantity of motorcycle components that can be brought into the country.

A) import quota
B) boycott
C) ad valorem tax
D) tariff
E) trade ratio

Question 56

The Multi-Fiber Arrangement (MFA) sets limits on the amount of low-priced textiles the U.S. can import from Third World nations. Such limits are called:

A) import quotas.
B) boycotts.
C) ad valorem taxes.
D) tariffs.
E) trade ratios.

Question 57

In Italy, food products cannot be called pasta unless they are made from durum wheat, which is the major kind of wheat grown in Italy. Such restrictions are called:

A) import quotas.
B) boycotts.
C) local-content laws.
D) literal quotas.
E) agricultural quotas.

Question 58

Foreign retailers in China are restricted to a 65 percent ownership in Chinese stores. This _____ is an example of how political and legal forces influence international retailers.

A) import quota
B) local operating law
C) nationalization process
D) tariff import
E) advertising boycott

Question 59

Which of the following is the BEST example of an international boycott?

A) Dragon Airlines, a Chinese venture, got landing rights at the Singapore airport.
B) Quebec passed a bill that dictated that all business in the province was to be conducted in French.
C) The Chinese Communists seized all U.S. businesses when they took power in 1949.
D) Chile and Argentina had a boundary dispute and discontinued trade with each other.
E) The Bank of America moved its regional data processing center from the Philippines to Hong Kong.

Question 60

Human rights campaigners have asked consumers not to buy Angolan diamonds as a means of protesting numerous human-right abuses in the country. The organization hopes this _____ will cause the Angolan government to take a more active role in reducing mistreatment of its citizens.

A) import quota
B) boycott
C) local-content law
D) literal quota
E) tariff quota

Question 61

The World Trade Organization (WTO):

A) established the European Union (EU).
B) eliminated all trade barriers for North American countries.
C) calls for a balance between U.S. imports and exports.
D) is a successor to the General Agreement on Tariffs and Trade (GATT).
E) declared Canada to be the U.S.'s largest trading partner.

Question 62

The _____ has 135 member-countries that account for 90 percent of world trade. It provides a forum for airing disputes between countries, but does not guarantee solutions to the disagreements will be found.

A) World Trade Organization (WTO)
B) European Union
C) Asian-Pacific Economic Corporation (APEC)
D) North American Free Trade Agreement (NAFTA)
E) Association of Southeast Asian Nations (ASEAN)

Question 63

India lodged a complaint that the European Union's preferential trade agreements wrongly discriminated against poor countries. Which of the following organizations would be responsible for ruling on the case?

A) World Trade Organization (WTO)
B) MERCOSUR
C) Asian-Pacific Economic Corporation (APEC)
D) North American Free Trade Agreement (NAFTA)
E) Association of Southeast Asian Nations (ASEAN)

Question 64

The European Union (EU):

A) is no longer allowing any other nations to seek membership in the organization.
B) was created to help bring Eastern Europe into the twentieth century.
C) is also called the Council for Mutual Economic Assistance Alliance.
D) is a multinational cartel.
E) is determined to liberalize trade among its members.

Question 65

The _____ is a political and economic alliance that has as its overriding objective to liberalize trade among its members. It evolved from the Treaty of Rome in 1957

A) World Trade Organization (WTO)
B) European Union (EU)
C) Asian-Pacific Economic Corporation (APEC)
D) North American Free Trade Agreement (NAFTA)
E) Association of Southeast Asian Nations (ASEAN)

Question 66

The North American Free Trade Agreement (NAFTA):

A) defined what international business behavior was unethical and how a firm would be punished for malfeasance.
B) includes all of Central America.
C) created a bond between the U.S. and the European Community.
D) created a free-trade zone in Europe for North American-made products.
E) eliminated tariffs between Canada and the U.S. over a period of 10 years.

Question 67

Under the guidelines of NAFTA, cars built by Mercedes-Benz in Alabama must have 62.5 percent of their components made in North America to be able to enter Mexico and Canada duty-free. This requirement is a result of a(n) _____ that is found in the NAFTA agreement.

A) import quota
B) boycott
C) local-content law
D) literal quota
E) tariff quota

Question 68

Which of the following nations is a member of the Asia-Pacific Economic Cooperation forum (APEC)?

A) Turkey
B) South Africa
C) Brazil
D) China
E) India

Question 69

Which of the following statements about the Common Market of the South (MERCOSUR) is True?

A) MERCOSUR was disbanded when NAFTA was enacted.
B) The goals of MERCOSUR are very similar to those of the EU.
C) MERCOSUR is the only organization of its type of South America.
D) MERCOSUR has helped countries in the southern part of Africa achieve rapid levels of industrialization.
E) None of the above statements about MERCOSUR is True.

Question 70

According to the president of Chile, "If, when given the chance, Latin America expresses itself as a unified force rather than on a country-by-country basis, then it has more chance of being heard." In other words the Chilean president voiced support of:

A) World Trade Organization (WTO)
B) European Union (EU)
C) Asian-Pacific Economic Corporation (APEC)
D) North American Free Trade Agreement (NAFTA)
E) MERCOSUR

Question 71

The simplest way of operating in foreign markets is to:

A) export.
B) sign a licensing agreement.
C) join a cartel.
D) open a company sales branch.
E) enter into a joint venture.

Question 72

Export merchants:

A) are located in the manufacturer's home country.
B) are under strict supervision by the exporter.
C) are typically very aggressive marketers.
D) generate large sales volumes.
E) are accurately described by none of the above.

Question 73

Wilson Creative Cosmetics in New York wants to sell its Moodmatcher lipstick in Japan. The company wants to avoid risk and capital outlays; it also has little time or energy to invest in exporting. Therefore, the firm should use a(n):

A) company sales branch.
B) joint venture.
C) broker.
D) export merchant.
E) wholesaling subsidiary.

Question 74

Henry Valve Co. in Illinois wants to sell its ball valves to refrigeration manufacturers in Germany. (Ball valves are designed for air conditioner and refrigeration applications.) The easiest way for Henry Valve Co. to enter the global market and still retain title to its merchandise until it is sold is by using a(n):

A) company sales branch.
B) joint venture.
C) broker.
D) export agent.
E) wholesaling subsidiary.

Question 75

Ball valves are designed for air conditioners and refrigeration applications. Henry Valve Co. in Illinois wants to use an export merchant to market its ball valves to refrigeration manufacturers in Europe because this method of international marketing:

A) allows the exporting merchant to handle a large sales volume.
B) will provide a high return on investment.
C) will give Henry Valve a strong control over the agent middleman.
D) requires minimal time, investment, and effort from Henry Valve.
E) will produce a worldwide aggressive promotion of its valves.

Question 76

One of the advantages of using an export merchant to operate in foreign markets is the:

A) large sales volume export merchants handle.
B) high return on investment.
C) strong control the producer has over the agent middleman.
D) minimal time and effort required of the producer.
E) worldwide aggressive promotion of products.

Question 77

Advance Machine Company makes a full-line of commercial cleaning equipment that it markets to retailers. The Minnesota-based company is thinking about marketing its cleaning equipment to retailers in Japan through the use of an export merchant. The major reason for its hesitancy to use an export merchant is likely to be a concern over the:

A) high degree of international involvement required by this method.
B) amount of implementation time required for this method.
C) lack of control it will have over its agent middlemen.
D) necessary large capital investment for this type of growth.
E) high degree of risk involved in this type of operation.

Question 78

A drawback to the use of an export merchant as a way to operate in international markets is the:

A) high degree of international involvement required by this method.
B) amount of time required of the producer.
C) lack of control the producer has over its agent middleman.
D) necessary large capital investment.
E) high degree of risk involved in this type of operation.

Question 79

Export merchants:

A) generate large sales volumes for manufacturers.
B) operate in the country to which the manufacturer wishes to subsidize product manufacturing.
C) are aggressive marketers.
D) buy goods and export them.
E) are accurately described by all of the above.

Question 80

Purafil, Inc., is a small Georgia firm that manufacturers and sells air purification systems. The company's management believes there is a market overseas for its product, but it has little time or money to invest in finding foreign buyers. Purafil should use a(n):

A) company sales branch.
B) joint venture.
C) broker.
D) export merchant.
E) wholesaling subsidiary.