Deck 21: Tapping into Global Markets

Question 1

In a sprinkler approach to international expansion,________.

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

Answer 1

E

Question 2

A global industry is defined as ________.

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

Answer 2

A

Question 3

Marketers must change their conventional marketing practices to sell their products to developing countries.One of the changes that marketers can make is to ________.

A) reduce the price of the product but increase the packaging size
B) reduce the size but keep the pricing the same
C) reduce the price of the product but keep packaging size the same
D) reduce the size and price of the packaging
E) increase the price and the packaging size because these countries have never seen the product before

Answer 3

D

Question 4

The five modes 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, licensing, direct exporting, and indirect exporting.
C) direct investment, joint ventures, and licensing
D) direct investment, joint ventures, licensing, and indirect exporting
E) none of the above

Question 5

Companies prefer to enter a country ________.

A) in which it possesses a competitive advantage
B) that is low on speed to profit
C) that is high on concentration of competitors
D) where it can gain a dominate market share within one year of exporting
E) where it can increase its foreign market share by 50% in one year

Question 6

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) foreign-based distributors or agents
B) marketing departments based in the foreign country
C) export merchants in foreign countries
D) export management companies
E) none of the above

Question 7

In a waterfall approach to international expansion,________.

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

Question 8

Regional economic integration is defined as the creation of ________.

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

Question 9

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

Question 10

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

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

Question 11

Domestic-based export agents perform a valuable service for 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) buy the manufacturer's products and then sell them abroad
C) buy the manufacturer's products then sell them in the host country
D) seek and negotiate foreign purchases for a commission
E) export products to foreign countries

Question 12

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

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

Question 13

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

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

Question 14

________ is one of the world's largest single markets,with 25 member countries,a common currency,and more than 454 million consumers.

A) NAFTA
B) MERCOSUR
C) The European Union
D) APEC
E) ASEAN

Question 15

A global firm is one ________.

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

Question 16

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

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

Question 17

The internationalization process has four stages.These stages include ________.

A) no regular export activities
B) export via independent representatives (agents)
C) establishment of one or more sales subsidiaries
D) establishment of production facilities abroad
E) All are part of the internationalization process.

Question 18

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

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

Question 19

NAFTA established a free trade zone between what three countries

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

Question 20

Domestic-based export merchants ________.

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

Question 21

The ultimate form of foreign involvement is direct ownership of foreign-based assembly or manufacturing facilities.Advantages of direct ownership can include securing cost economies,creating jobs in the host country,and developing deeper relations with local suppliers; and the firm ________.

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

Question 22

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

Question 23

According to Hofstede,cultures with low power distance are best described as ________.

A) dominated by assertive individuals
B) hierarchical
C) egalitarian
D) risk-averse
E) risk-tolerant

Question 24

Backward invention is ________.

A) creating a new product to meet a need in another country
B) reintroducing earlier product forms
C) inventing products a company knows consumers will not like
D) taking a product currently made in the home and manufacturing it on a broad scale
E) none of the above

Question 25

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

A) consumer behavior
B) business mission
C) strategy
D) programs
E) politics

Question 26

Product invention consists of creating something new.Forward invention is ________.

A) creating a new product to meet a need in another country
B) creating a new product to meet the need in the host country
C) understanding the differences between host and foreign country markets
D) increasing the control over the development of new products
E) inventing something that as yet has no "market"

Question 27

Which of the following is most likely to be successful when introduced in foreign markets as a straight extension

A) Laundry detergent
B) Khaki pants
C) Dessert mixes
D) Digital camera
E) Condensed soup

Question 28

In an adapted marketing mix,the producers ________ the marketing programs to each target market.

A) reduce the importance of each element of the marketing program to adjust for cost differential between countries
B) decide on which element of the marketing mix to change for each country and target market prior to entering the country
C) change packaging and distribution but leave the advertising message unchanged
D) change only one element of the marketing mix per country
E) tailor the marketing programs to each target market.

Question 29

Straight extension of the product means ________.

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

Question 30

According to Hofstede,cultures with weak uncertainty avoidance are best described as ________.

A) dominated by assertive individuals
B) hierarchical
C) egalitarian
D) risk-averse
E) risk-tolerant

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.In return,the ________invests in and pays certain fees to the company.

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

Question 32

Companies such as Hyatt sell a variation of the licensing agreement called a ________ to the owners of foreign hotels to manage these businesses for a fee.

A) contract manufacturing
B) management contracts
C) franchising
D) hotel management licensing
E) none of the above

Question 33

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

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

Question 34

According to Hofstede,in collectivist societies,such as Japan,________.

A) the culture is dominated by assertive individuals
B) the self-worth of the individual is rooted more in the social system than in individual achievement
C) the culture is dominated by nurturing individuals
D) the culture is highly egalitarian
E) people are highly risk-averse

Question 35

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 mix worldwide.A standardized marketing mix includes ________.

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

Question 36

Product adaptation involves ________.

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

Question 37

In ________,the firm hires local manufacturers to produce the product,giving the company less control over the manufacturing process.

A) contract manufacturing
B) management contracts
C) licensing
D) franchising
E) none of the above

Question 38

One advantage of global marketing is that it can ________.

A) facilitate adaptation to foreign countries
B) allow for the same message to be used worldwide
C) allow for individual countries to add their specific needs to the message
D) facilitate the evaluation of the marketing message
E) allow for uniformity of marketing practices

Question 39

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

Question 40

Hofstede identifies four cultural dimensions that can differentiate countries,including ________.

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

Question 41

A Gucci bag sells for $120 in Italy and $240 in the United States due to the differences in the costs of distributing the product in the two countries.This phenomenon is called a ________.

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

Question 42

When companies are setting prices in different countries,the problem with setting a uniform price everywhere is that ________.

A) it allows intermediaries in low-price countries to reship their products to high-price countries
B) the company would earn the same profits everywhere, regardless of the cost structure
C) this strategy might price the product out of the market in countries where costs are high
D) this strategy would make the price too high in poor countries and not high enough in rich countries
E) all of the above

Question 43

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

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

Question 44

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

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

Question 45

________ is one of the most important functions of intermediaries in developing countries and helps perpetuate the long channels of distribution,which are a major obstacle to the expansion of retailing.

A) Haggling
B) Breaking bulk
C) Risk management
D) Transfer pricing
E) Dual adaptation

Question 46

When forces for global integration are low and forces for national responsiveness are high,a strategy that ________ makes sense.

A) treats the world as a single market
B) views the marketplace as completely homogeneous
C) treats the world as a portfolio of national opportunities
D) standardizes all elements of the marketing mix
E) none of the above

Question 47

An international division that is organized with regional vice presidents for North America,Latin America,Europe,and Africa is said to be a(n)________.

A) international subsidiary
B) geographical organization
C) world product group
D) export department
E) none of the above

Question 48

Various governments are watching for dumping and transfer pricing abuses and often force companies to charge the ________-the price charged by other competitors for the same or a similar product.

A) gray market price
B) implicit price
C) arm's-length price
D) authorized price
E) contingent price

Question 49

Multinationals are plagued by the gray market problem.The gray market consists of ________.

A) the marketing of products to older consumers
B) branded products diverted from normal distribution channels in the country of product origin
C) branded products diverted from one country to another
D) products being repackaged from the intended country to a diverted country
E) products not having full warranties by the manufacturer

Question 50

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

Question 51

When forces for global integration are high and forces for national responsiveness are weak,a strategy that ________ makes sense.

A) segments consumers on a regional basis
B) tailors the product on a city-by-city basis
C) treats the world as a heterogeneous market
D) treats the world as a single market
E) customizes marketing messages to each region of the world

Question 52

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

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

Question 53

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

A) or a global organization
B) or a fixed corporate headquarters
C) or a strong marketing department in the "host" country
D) and local marketing efforts
E) none of the above

Question 54

The price escalation problem exists for multinationals and varies from country to country; the question is: How should prices be set in different countries Companies have three choices.One is to set a uniform price everywhere.Another is to set a market-based price in each country.Finally,companies can ________.

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

Question 55

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

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

Question 56

Decisions made by the seller's international marketing headquarters in the whole-channel view of distribution include ________.

A) what channels to use to sell the product to end consumers
B) how to get products to the borders of foreign nations
C) the types of financing and risk management used when transporting products between countries
D) how to get products from their entry point into the company to final buyers and users
E) none of the above

Question 57

Decisions made by the channels within foreign nations in the whole-channel view of distribution include ________.

A) what channels to use to sell the product to end consumers
B) how to get products to the borders of foreign nations
C) the types of financing and risk management used when transporting products between countries
D) how to get products from their entry point into the company to final buyers and users
E) none of the above

Question 58

Operating units within an international division may be ________,each with an international vice president responsible for worldwide sales of each product group.

A) international subsidiaries
B) geographical organizations
C) world product groups
D) export departments
E) none of the above

Question 59

Forces promoting global integration include ________.

A) strong local preferences
B) heterogeneous demand
C) local standards and barriers
D) strong consumer resistance to foreign goods
E) capital-intensive production

Question 60

When companies are setting prices in different countries,the problem with setting a market-based price in each country is that ________.

A) it allows intermediaries in low-price countries to reship their products to high-price countries
B) the company would earn the same profits everywhere, regardless of the cost structure
C) this strategy might price the product out of the market in countries where costs are high
D) this strategy would make the price too high in poor countries and not high enough in rich countries
E) all of the above

Question 61

Global firms,because they are targeting such a large market,must abandon niche strategies.

Question 62

Regional economic integration-the creation of trading agreements between blocs of countries-has intensified in recent years.

Question 63

Management contracts offers foreign owners the opportunity to manage businesses for a fee.

Question 64

Smaller packaging and lower sales prices are often critical in markets where incomes are limited.

Question 65

Once a company decides to target a particular country,it must determine the best mode of entry.Its broad choices are indirect exporting,direct exporting,licensing,joint ventures,and direct investment.

Question 66

As the EU standardizes its general trade regulations and currency,creating an economic community has created a homogeneous marketplace in Europe.

Question 67

Major decisions to enter the international marketplace and to conduct international marketing do not include deciding on how to enter the market.

Question 68

A global firm is a firm that operates in more than one country and captures R&D,production,logistical,marketing,and financial advantages not available to purely domestic competitors.

Question 69

A global industry is an industry in which the strategic positions of competitors in major geographic or national markets are affected by their overall global positions.

Question 70

Contract manufacturing gives the company less control over the manufacturing process and risks loss of potential profits on manufacturing.However,it offers a chance to start faster,with the opportunity to form a partnership or buy out the local manufacturer later.

Question 71

There are several variations of a licensing agreement.One of these that gives the licensee a complete brand concept and operating system is called franchising.

Question 72

A waterfall approach to entering foreign markets is described as entering countries gradually and sequentially.

Question 73

Export-management companies agree to manage a company's export activities for a fee.

Question 74

In licensing,the licensor issues a license to a foreign company to use an item of value for a fee or royalty.

Question 75

Cooperative organizations carry on exporting activities on behalf of several producers and are partly under their administrative control.

Question 76

The internationalization process has four stages.The first stage is moving the company from no regular exports to regular export activities.

Question 77

Domestic-based export merchants buy the manufacturer's products and then sell them abroad.

Question 78

Indirect export has two advantages.First,it involves less investment; and second,it involves less risk.

Question 79

More than 90% of future population growth is projected to occur in the less developed countries.

Question 80

Most companies would prefer to enter the international marketplace because their national markets are too small for continued growth.