Deck 18: Tapping Into Global Markets

Question 1

Companies enter the international market only when their domestic markets are saturated.

Answer 1

False

Question 2

WayToGrow Inc. is one of the most popular brands of toys in its home market. The company decides to expand its business abroad, and its directors feel that instead of trying to establish its presence all at once in multiple markets, it should expand one country at a time. This would limit their risk and allow them to analyze customer response, after which they could expand to other similar countries. WayToGrow is following a ________ approach.

A) shotgun
B) continuous
C) born global
D) sprinkler
E) waterfall

Answer 2

E

Question 3

Regional economic integration has intensified in recent years, so companies are less likely to enter entire regions at the same time.

Answer 3

False

Question 4

List several factors that are drawing more and more companies into the international arena.

Question 5

Which of the following is a risk that firms must consider prior to expanding abroad?

A) The domestic consumers may prefer low-priced products.
B) The market in the foreign country may be too similar to the domestic market.
C) Consumers in the foreign country may be very particular about quality.
D) The foreign country may have very low pollution control standards.
E) Management may not understand the foreign country's business culture.

Question 6

Indirect exports have two advantages for a firm: less investment and less ________.

A) paperwork
B) intrusion by the government
C) risk
D) competition
E) customer suits

Question 7

Which of the following modes of entry into a foreign market involves the maximum commitment and risk?

A) franchising
B) direct investment
C) joint ventures
D) licensing
E) direct exporting

Question 8

What are the basic criteria that a country should possess in order to be a viable and attractive investment destination?

Question 9

Why do many U.S. firms prefer to sell in Canada, England, and Australia, rather than in Germany and France?

A) They prefer markets that are culturally distant.
B) Germany and France have larger markets.
C) They feel more comfortable with the languages, laws, and culture.
D) They are seeking markets with high market risk.
E) This gives them a toehold in fast-growing markets.

Question 10

Companies typically start their international foray with ________, which involves working through independent intermediaries who sell their products abroad.

A) indirect exporting
B) licensing
C) franchising
D) direct exporting
E) joint ventures

Question 11

A company that is planning to go global must decide on how many countries to enter and how fast to expand. A company's entry strategy typically follows one of two possible approaches. What are those approaches?

Question 12

Discuss the pros and cons of selling to neighboring countries or those that share the same language.

Question 13

Services represent the fastest-growing sector of the global economy and account for two-thirds of global output.

Question 14

In a sprinkler approach to international expansion, ________.

A) countries are entered when competition is limited
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

Question 15

In general, a company prefers to enter countries that have high market attractiveness and high market risk, regardless of whether it possesses a competitive advantage.

Question 16

Services account for nearly ________ percent of global trade.

A) 10
B) 33
C) 20
D) 67
E) 90

Question 17

What is a global firm?

A) A firm that operates in one country and exports its goods and services to foreign countries.
B) A firm that operates in more than one country and has a sales and marketing staff in those countries.
C) 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.
D) A firm that sells its products and services across the world but restricts manufacturing to the home country.
E) A firm that operates in more than one country but restricts the sale of its products to the home country.

Question 18

A waterfall approach to entering foreign markets is described as entering countries simultaneously.

Question 19

A well-known producer of breakfast cereals has decided to hire producers in different countries so that the cereals marketed under their brand are locally produced in the respective countries. This would not only appeal more to consumers who preferred domestically produced goods, but would also create jobs in the host-country enhancing the brand's image further. This is an example of ________.

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

Question 20

What are the various risks that a company must consider before making a decision to enter foreign markets?

Question 21

Forward invention refers to reintroducing earlier product forms that are well adapted to a foreign country's needs.

Question 22

The more favorable a country's image, the less prominently the "Made in…" label should be displayed.

Question 23

When Kraft blends different coffees for the British (who drink coffee with milk), the French (who drink it black), and Latin Americans (who want a chicory taste), it is engaged in ________.

A) straight extensions
B) product adaptation
C) retailer versions
D) backward invention
E) forward invention

Question 24

Your firm has decided to enter the international market with your product called "Trema," a new pocket organizer that can also be used as a cell phone. While discussing marketing plans, your CMO decides that no changes will be necessary in either the marketing mix or the product for export. What form of marketing strategy is the CMO advocating?

A) distributive marketing program
B) leveraged marketing program
C) adapted marketing program
D) engineering-driven marketing program
E) standardized marketing program

Question 25

Your firm has decided to enter the international market with your product called "Trema," a combination of a pocket organizer and cell phone. Even though the product has been a huge success in the home country, market research suggests some changes may be required before it can be introduced in Europe. Your CMO is of the opinion that the product requires certain extra features and the product will also have to be advertised differently. Your CMO is advocating ________.

A) product invention
B) dual adaptation
C) straight extension
D) forward adaptation
E) product standardization

Question 26

In countries where much retailing is in the hands of small, independent retailers, ________ remains an important function of intermediaries and helps perpetuate long channels of distribution.

A) breaking bulk
B) jobbing
C) type of transportation
D) information sharing
E) reinforcing policies

Question 27

Whirlpool took a 53 percent stake in the Dutch electronics group Phillips' home appliances business. Sharing ownership and control of this business enabled Whirlpool to leapfrog into the European market. This is an example of ________.

A) a straight extension
B) a joint venture
C) an exporting agreement
D) a licensing agreement
E) a sprinkler approach

Question 28

The main disadvantage of direct investment is that the partners might disagree over investment, marketing, or other policies.

Question 29

Briefly describe the advantages of direct investment.

Question 30

Which of the following is True about direct investment as a mode of international expansion?

A) It allows a firm to retain full control over its investment.
B) It yields the lower returns than joint ventures.
C) It involves the least amount of risk.
D) It involves the least cost.
E) It does not allow the firm to diversify.

Question 31

Finnish cellular phone giant, Nokia, customized its 6100 series mobile phone for every major market in which it is present. In Asia, for example, the series came with higher ring volume so that it could be heard on the crowded Asian streets. This is an example of a ________.

A) straight extension
B) forward invention
C) regional version
D) city version
E) country version

Question 32

Once a company decides to target a particular country, it must determine the best mode of entry. List the market entry strategies in order from low risk to high risk.

Question 33

Indirect exports are characterized by high investment, and therefore high risk.

Question 34

Which of the following statements is True about licensing?

A) It is one of the most complex ways to engage in international marketing.
B) The licensor gains entry into the new market at low risk.
C) The licensee has no access to proprietary information.
D) The licensee receives a fee or royalty.
E) The licensor can use a manufacturing process or trademark for a fee.

Question 35

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) opportunity cost
B) market pricing
C) tactical pricing
D) price escalation
E) transfer pricing

Question 36

Product adaptation not only involves altering the product to meet local preferences, but also calls for a change in the communication strategy.

Question 37

Straight extension of the product means introducing ________.

A) the product to the foreign market without any changes to the product
B) the product to the foreign market with minor changes to the product
C) the product to the foreign market with major changes to the product
D) a customized product to the foreign market with a new marketing strategy
E) a customized product to the foreign market with existing marketing strategy

Question 38

Define a joint venture, and list some of its advantages and disadvantages.

Question 39

In an adapted marketing program, the company ________.

A) ensures that uniform practices are adopted across countries
B) focuses more on brand image than consumer preferences
C) ignores differences in the legal environment
D) ensures the lowest cost marketing program is adopted
E) tailors the marketing programs to each target market

Question 40

Gray markets involve which of the following activities?

A) Gray markets strengthen the distribution channel.
B) Gray markets divert branded products from authorized distribution channels.
C) Goods sold in gray markets are always counterfeit.
D) Goods sold in gray markets come with standard product warranties.
E) Taxes imposed on gray-market products are very high.

Question 41

Name the three choices that companies have for setting prices in different countries.

Question 42

Market managers are staff people, with duties like those of a product manager.

Question 43

You work for a company that produces and markets apparel for men and women, and is planning to enter the Chinese market. If you were asked if the company should opt for a straight extension or a product adaptation, what would you choose, and why?

Question 44

Most brands are adapted to some extent to reflect significant differences in consumer behavior, brand development, competitive forces, and the legal or political environment. Identify the five international product and communication strategies available to firms that expand their businesses to foreign countries.

Question 45

Companies that produce many products for many markets may adopt a ________ marketing organization.

A) flat
B) brand
C) product
D) matrix
E) top-down

Question 46

Country-of-origin effects refer to the attitude anything produced by the home country is better than imported goods.

Question 47

The most common form of marketing organization consists of ________ reporting to a marketing vice president who coordinates their activities.

A) zonal managers
B) functional specialists
C) product managers
D) area market specialists
E) brand managers

Question 48

Identify three disadvantages and three advantages of standardizing the marketing mix worldwide.

Question 49

Which of the following is True regarding a matrix-management organization?

A) It is a low-cost form of organization.
B) It often creates conflicts regarding authority and responsibility for marketing activities.
C) It hampers the flow of information among marketing personnel.
D) It promotes the matrix concept throughout the company.
E) It is best suited to companies that offer a small range of products to niche markets.

Question 50

Which of the following observations is True?

A) In today's business environment, marketers mainly focus on sales.
B) Marketing has the sole ownership of customer interactions.
C) Satisfying customers is the responsibility of all employees, not just marketers.
D) Marketers must ensure that every customer receives a personalized marketing message.
E) Marketers must maintain a strict separation from other organizational departments.

Question 51

Transforming into a True market-driven company requires organizing around ________.

A) sales
B) customer segments
C) products
D) functions
E) brands

Question 52

Internal marketing requires that everyone in the organization buy into the concepts and goals of marketing and engage in choosing, providing, and communicating customer value.

Question 53

The product-management organization replaces the functional organization in the firm.

Question 54

A functional organization allows for adequate planning as the number of products and markets of a firm increases.

Question 55

Which of the following is True of building a creative marketing organization?

A) It is enough if firms are customer-oriented.
B) Companies must build a capability in strategic innovation and imagination.
C) Firms should focus more on efficiency rather than innovation.
D) Companies should attempt to minimize risks as much as possible.
E) Firms should focus on protecting their existing markets and physical resources.

Question 56

Which of the following is the main advantage of a functional marketing organization?

A) easy coordination
B) lower staff requirements
C) administrative simplicity
D) reduced competition between functional groups
E) smooth working relationships

Question 57

Explain the country-of-origin effect.

Question 58

What are the choices available to companies when setting prices to avoid price escalation problems?

Question 59

When customers fall into different user groups with distinct buying preferences and practices, a ________ organization is desirable.

A) market-management
B) product-management
C) brand-management
D) geographic
E) functional

Question 60

A company selling in a national market often organizes its sales force along ________.

A) functional groups
B) geographic lines
C) product teams
D) brand groups
E) product categories

Question 61

The first step in the social marketing planning process is ________.

A) determining the focus of the program
B) selecting the target audience
C) setting objectives and goals
D) designing the market offering
E) finding a source of funding

Question 62

Because of insincere firms jumping on the "green" bandwagon, consumers bring a healthy skepticism to environmental claims, but they are also unwilling to sacrifice product performance and quality.

Question 63

________ gives products the appearance of being more environmentally friendly without living up to that promise.

A) Ambush marketing
B) Greenwashing
C) Astroturfing
D) Viral marketing
E) Green politics

Question 64

How can firms promote ethical behavior among their employees?

Question 65

________ refers to the ability to meet humanity's needs without harming future generations.

A) Greenwashing
B) Sustainability
C) Ecological footprinting
D) Scalability
E) Legal practice

Question 66

Cadbury's "Sports for Schools" promotion offered sports and fitness equipment for schools in exchange for vouchers. The problem was that the public and media saw a perverse incentive for children to eat more chocolate, a product associated with obesity. Which of the following best summarizes Cadbury's problem?

A) Customers felt that the cause was not in sync with the company's brand image.
B) Consumers did not value the cause Cadbury was promoting.
C) Customers saw the firm as self-serving and exploitive.
D) Consumers resented being sold an inferior product on the back of a cause-marketing program.
E) Consumers felt that the campaign did not try hard enough to change the audience's behavior.

Question 67

________ marketing by nonprofit or government organizations furthers a cause.

A) Corporate societal
B) Brand
C) Causal
D) Social
E) Place

Question 68

Cause-related marketing is part of ________.

A) sustainability
B) corporate societal marketing
C) social media
D) global marketing
E) community marketing

Question 69

Which of the following is True regarding cause-related marketing?

A) The positive impact of cause-related marketing can be increased through sporadic involvement with numerous causes.
B) Many companies focus on multiple causes to simplify execution and maximize impact.
C) Limiting support to a single cause increases the pool of stakeholders who can transfer positive feelings from the cause to the firm.
D) Most firms choose causes that fit their corporate or brand image and matter to their employees and shareholders.
E) In order to avoid public backlash, firms are advised to adopt a hard-sell approach to their cause efforts.

Question 70

In order to promote ethical cultures, companies should do all of the following EXCEPT ________.

A) disseminate a written code of ethics
B) build a company tradition of ethical behavior
C) hold people responsible for observing ethical and legal guidelines
D) ensure every employee knows and observes relevant laws
E) encourage business practices that are not clearly ethical or unethical

Question 71

The actual success of a social marketing program should be evaluated in terms of the program objectives.

Question 72

What is sustainability? How is it related to the concept of greenwashing?

Question 73

Identify some of the brand benefits that can accrue to a company that engages in cause marketing.

Question 74

Companies must adopt and disseminate a written code of ethics, build a company tradition of ethical behavior, and hold their people fully responsible for observing ethics and legal guidelines if they wish to demonstrate ethical behavior.

Question 75

Cause-related marketing efforts are unlikely to backfire as customers generally view the company's motives as genuine.

Question 76

Many companies are beginning to realize that they are not really market and customer driven, they are product and sales driven. In the attempt to transform themselves into True market-driven companies, many firms must change. Summarize the kinds of changes that are necessary.

Question 77

What is a market-management organization?

Question 78

Describe the functional organization of a marketing department in terms of its structure, advantages, and disadvantages.

Question 79

Cause marketing has a particularly interested audience in civic-minded ________.

A) Millennial consumers
B) baby boomers
C) Gen Xers
D) Gen Yers
E) shadow boomers

Question 80

Transforming into a True market-driven company involves organizing around products.