Deck 15: Understand the Global Marketplace: Marketing Without Borders

Question 1

Franchising requires a high level of investment by the franchisor in foreign markets.

Answer 1

False
Explanation: The franchiser, usually a company seeking to enter a foreign market, agrees to supply a bundle of products, systems, services, and management expertise to the franchisee in return for local market knowledge, financial consideration (franchisee fee, percentage of sales, required purchasing of certain products from franchiser), and local management experience. Franchisers exert a great deal of control with extensive franchise agreements that dictate how the franchisee will operate the business.

Question 2

When companies sell in other countries through limited direct contact or indirect intermediaries they always consider themselves to be involved in foreign marketing.

Answer 2

False
Explanation: Many companies with no direct foreign marketing still do business with international customers through intermediaries or limited direct contact. In these cases, however, there is no formal international channel relationship or global marketing strategy targeted at international customers. Of course, any company with a website is now a global company as someone can visit the site from anywhere in the world, but companies with no foreign marketing consider any sales to an international customer as incidental.

Question 3

Global luxury brands like Tiffany's look to Asian markets that have a higher demand for luxury goods than the U.S.market.

Answer 3

True
Explanation: Tiffany's has performed surprisingly well. The luxury goods retailer saw a slight increase in U.S. sales, which were up 2 percent. It is the company's Asian market that has propelled its overall growth. Sales at Tiffany's are up 13 percent in Asia, with the Chinese market performing especially well. As Chinese demand for gold has grown, sales of Tiffany's jewelry have increased dramatically. To maintain its growth, the company has therefore continued to push its presence in the global market and the Asian region-a strategy that fueled its 20 percent growth in share value in 2013.

Question 4

Germany has a very relaxed culture.If you make a business appointment for 10:00,your German counterpart will not mind if you do not show up until 11:00.

Question 5

Nestlé embraces a local branding strategy globally while other companies like Coca-Cola and Kellogg use a global branding strategy.

Question 6

Small companies have to invest a lot of money to go global.

Question 7

Due to improved distribution,better communication tools,product standardization,and the Internet,businesses are not confined to a local market.

Question 8

A company can do business with an international company and still not engage in direct foreign marketing.

Question 9

McDonald's socially responsible coffee,Kenco,is sold in the European market because Europeans expect companies to care about the environment.

Question 10

Mr.Coffee had a good understanding of the Japanese culture when it introduced coffeemakers that fit well in a Japanese kitchen.

Question 11

The European Union is the most successful regional trade zone.

Question 12

The most significant difference between international and global marketing is management philosophy and corporate planning.

Question 13

According to Rostow,a take-off economy is moving from agricultural to industrial and has banking systems,technology industries,and other skilled industries.

Question 14

Countries create regional market zones for mutual economic benefit through reduced trade barriers and lower tariffs.

Question 15

Licensing is a useful form of market entry when companies lack the resources to establish independent operations in foreign markets.

Question 16

Global marketing research focuses on three types of basic information.

Question 17

The country-of-origin effect is always a positive effect.

Question 18

The economy of the European Union is larger than that of the United States.

Question 19

The most common market entry strategy is exporting.

Question 20

Direct foreign investment is a market entry strategy with the greatest long-term implications.

Question 21

Many countries base their court systems on those of former rulers or colonizers.For example,the Spanish ruled many South American countries for many years so the court system there is based on code or civil law.This would be identified in the _______ section of a global research report.

A)Economic
B)Cultural, societal
C)Business environment
D)Political, legal
E)History, geography

Question 22

Mi Casa,a furniture maker in Peru,has received an e-mail from an interior decorator in Colombia asking the company to ship furniture to her clients.Mi Casa has shipped outside Peru only three times in the past.Mi Casa's position toward marketing is classified as _________________________.

A)Foreign marketing
B)International marketing
C)Global marketing
D)No direct foreign marketing
E)Global partnerships

Question 23

The world's largest company in 2013 was _____________.

A)ExxonMobil
B)Walmart
C)BP
D)Toyota
E)Royal Dutch Shell

Question 24

U.S.companies that earn more than 50 percent of their revenue from international markets include all but ______________.

A)Starbucks
B)Hewlett-Packard
C)Nike
D)Caterpillar
E)Chevron

Question 25

An understanding of marketing beyond home markets develops over time as a company gets more international business experience.This process is referred to as the ___________.

A)Global experience curve
B)Global learning continuum
C)International experience learning curve
D)Global experience learning curve
E)International experience continuum

Question 26

Charlotte,the international sales manager at a fashion house,is concerned that the euro is stronger than the U.S.dollar.This would be identified in the _______ section of a global research report.

A)Economic
B)Cultural, societal
C)Business environment
D)Political, legal
E)History, geography

Question 27

John has learned that the government in one of his South American markets has enacted a new law that limits the amount of profit it can take out of the country.If John had researched the _________ environment,he may have been prepared for this bad news.

A)Economic
B)Cultural, societal
C)Business
D)Political, legal
E)History, geography

Question 28

Sudan should be classified as being in the __________ stage of development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 29

Samsung Electronics sold more televisions than any other company in 2012 with sales of 47 million and a worldwide market share of 27 percent.Samsung is engaged in __________________.

A)Global marketing
B)No direct foreign marketing
C)Global partnerships
D)Foreign marketing
E)International marketing

Question 30

Sam is flying to Rio de Janeiro,Brazil,to meet with a prospective customer.Sam is very successful in the United States because he is a multitasking high achiever who hates wasting time with small talk and leaves the details of a contract up to his legal staff.His personal assistant has prepared a global market research report for him and emphasized that he should read the ___________ section.

A)Economic
B)Cultural, societal
C)Business environment
D)Political, legal
E)History, geography

Question 31

Germany should be classified as being in the __________ stage of development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 32

In Spain,most people do not eat dinner until 10:00 at night.This would be identified in the _______ section of a global research report.

A)Economic
B)Cultural, societal
C)Business environment
D)Political, legal
E)History, geography

Question 33

Andrew wants to fire a manager in the Dijon,France,office of his company.He recently found out that French law makes it difficult to terminate employees.This would be identified in the _______ section of a global research report.

A)Economic
B)Cultural, societal
C)Business environment
D)Political, legal
E)History, geography

Question 34

_______ of the world's economic growth in the next 20 years is predicted to come from emerging economies.

A)10 percent
B)35 percent
C)52 percent
D)75 percent
E)90 percent

Question 35

The fastest-growing economy in the world in 2012 was ______.

A)Sierra Leone
B)Afghanistan
C)Macau
D)China
E)Libya

Question 36

Data on consumer spending per capita or industrial purchasing trends would be identified in the _______ section of a global research report.

A)Economic
B)Cultural, societal
C)Business environment
D)Political, legal
E)History, geography

Question 37

___________ is one of the most widely used measures of economic growth.

A)GNP
B)Purchasing power parity
C)GDP
D)GNI
E)Per capita income

Question 38

The color red means different things in different parts of the world.For example,in China a bride traditionally would wear red but not white.White is a symbol of death.This would be identified in the _______ section of a global research report.

A)Economic
B)Cultural, societal
C)Business environment
D)Political, legal
E)History, geography

Question 39

Jonathan must travel to Japan to meet with a prospective supplier for his company.He wants to learn proper protocol for meeting his Japanese contact,presenting his business card,and figuring out if he should call him by first name.The area of global market research where Jonathan would find this information is in the ____________ trends.

A)Economic
B)Cultural, societal
C)Business environment
D)Political, legal
E)History, geography

Question 40

Firms that manufacture in a foreign market or maintain an extensive sales organization and distribution network but whose managers still maintain a "domestic first" mind-set are probably engaged in ________.

A)No foreign marketing
B)Foreign marketing
C)International marketing
D)Global marketing
E)Intergalactic marketing

Question 41

A country that is primarily dependent on agriculture and has high illiteracy rates is in the _______ stage of development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 42

In an economy where the population has met basic needs and seeks to spend large discretionary income on products that improve quality of life,the country is in the ______ stage of economic development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 43

Shade Tree Auto Parts Co.wants to enter the Russian market.Russian law prevents foreign entities from owning a majority position in a company there.The best method of entry for Shade Tree is _________.

A)Franchise
B)Joint venture
C)Direct sales force
D)Greenfield operations
E)Licensing

Question 44

China would be classified as being in the __________ stage of development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 45

_________ is not an advantage to franchising as a market entry strategy.

A)The franchisee has local market knowledge
B)Products have no need for adaptation
C)Local management has expertise
D)Quality control is at the point of customer contact
E)Economies of scale exist

Question 46

A marketing manager must evaluate global market opportunities that will allow the firm to utilize its strengths and minimize its weaknesses.A firm must be particularly strong in ___________ to succeed in expanding to global markets.

A)Accounting and law
B)Currency trading
C)Marketing and logistics
D)Human resources
E)Customer service

Question 47

A country that invests heavily in infrastructure,receives investment from foreign governments,and is attractive to firms seeking first-mover advantage is in the _______ stage of development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 48

The most successful regional market zone is ______.

A)NAFTA
B)The European Union
C)MERCOSUR
D)ASEAN
E)The Cooperation Council for the Arab States of the Gulf

Question 49

NAFTA is a market zone that eliminates tariffs between the United States and _______.

A)Canada, Mexico, and Costa Rica
B)Canada and Mexico
C)Mexico, Honduras, Nicaragua, Costa Rica, and Panama
D)Canada, Mexico, Costa Rica, and Panama
E)Canada, Costa Rica, and Panama

Question 50

__________ is(are)not one of the forces that drive countries to form regional market zones.

A)Cultural differences
B)Geographic proximity
C)Economic factor
D)Cultural similarities
E)Political factor

Question 51

MERCOSUR is a regional market zone in ________.

A)Asia
B)Africa
C)North America
D)The Mideast
E)South America

Question 52

A country whose economy transitions from agricultural to industrial and has skilled industries such as banking or technology-based industries is in the _______ stage of development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 53

Romania would be classified as being in the __________ stage of development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 54

A technology or high-end industrial product company is most likely to use a(n)______ in foreign markets because customers expect the expertise of highly trained,accessible personnel.

A)Broker
B)Export agent
C)Distributor
D)Direct sales force
E)Freight forwarder

Question 55

_____________ represent the exporting firm in foreign markets.They are the face of the company through servicing customers,selling products,and taking payment.They often take title to goods and resell them.

A)Brokers
B)Export agents
C)Distributors
D)Direct sales forces
E)Freight forwarders

Question 56

Herbie recently read that Crane Airways of Japan,Kestral Airlines of Germany,Heron Air of Australia,and Egret Airways of India have code sharing,which allow passengers to fly on any of the airlines,share frequent flyer miles,and give each other logistical support.Herbie had just learned in his Global Marketing class that this arrangement is known as a _________.

A)Franchise
B)Joint venture
C)Joint venture with minority ownership
D)Strategic alliance
E)Licensing

Question 57

The ___________ industry best illustrates the power of strategic alliances.

A)Automobile
B)Telecommunications
C)Airline
D)Computer
E)Video gaming

Question 58

___________ is the most common method for entering foreign markets and accounts for ________ of all global economic activity.

A)Direct foreign investment, 20 percent
B)Licensing, 12 percent
C)Franchising, 35 percent
D)Exporting, 10 percent
E)Joint ventures, 15 percent

Question 59

The Czech Republic would be classified as being in the __________ stage of development.

A)Traditional society
B)Preconditions for take-off
C)Take-off
D)Maturity
E)High mass consumption

Question 60

Advantages to licensing as a market entry strategy do not include ___________.

A)Limited financial risk in the short run
B)Complete control of the patent or trademark
C)Services such as local distribution
D)Protection of trade secrets
E)Both complete control of the patent or trademark and protection of trade secrets

Question 61

Bistrone corn canned soup was made expressly for the Japanese market by Coca-Cola Japan.This is an example of ___________________.

A)Direct product extension
B)Product adaptation
C)Backward product adaptation
D)Product invention
E)Hybrid products

Question 62

Many countries restrict marketing to children more severely than in the United States.A firm considering direct foreign investment would report this finding under the heading of _____.

A)Timing
B)Legal issues
C)Transaction costs
D)Marketing communication barriers
E)Product differentiation

Question 63

Aligning the firm's philosophy with that of a potential channel partner would be identified in the channel strategy of ___________.

A)Cost
B)Coverage
C)Character
D)Continuity
E)Control

Question 64

Coca-Cola changes the taste of its soft drinks to meet local market preferences.This is an example of ___________.

A)Direct product extension
B)Product adaptation
C)Backward product invention
D)Product invention
E)Hybrid products

Question 65

The use of local distribution networks is identified in the channel factor of ___________.

A)Cost
B)Coverage
C)Character
D)Continuity
E)Control

Question 66

All but the most accomplished global marketers rely on local distribution networks in foreign markets.It is very expensive to build the company's own distribution network.This issue would be identified in the channel strategy of ___________.

A)Cost
B)Coverage
C)Character
D)Continuity
E)Control

Question 67

The issue of initial investment in creating a channel and the cost of then maintaining it is identified in the channel strategy of ___________.

A)Cost
B)Coverage
C)Character
D)Continuity
E)Control

Question 68

Tyrone wants to get his girlfriend an impressive gift of chocolates for Valentine's Day.He chooses candy that was made in Belgium.This is an example of how consumers respond to ____________.

A)Brand strategy
B)Country-of-origin effect
C)Quality
D)Fitting the product to the culture
E)Price

Question 69

Outdated cell phones used in Europe or Asia have been introduced into the Latin American markets.This is an example of ____________.

A)Forward extension
B)Product adaptation
C)Backward product invention
D)Product invention
E)Hybrid products

Question 70

You Are Here,a personal navigation system company,has contracted its manufacturing to a firm in Malaysia for five years.Now that You Are Here has explosive growth,it wants to purchase the manufacturing facility.This market entry method is _________.

A)Direct sales force
B)Strategic alliance
C)Joint venture
D)Direct foreign investment
E)Licensing

Question 71

The value of the Japanese yen has fluctuated widely during the 2000s compared to the U.S.dollar.A firm considering direct foreign investment would report this finding under the heading of _____.

A)Timing
B)Legal issues
C)Transaction costs
D)Marketing communication barriers
E)Product differentiation

Question 72

The market entry strategy with the greatest long-term implication is __________.

A)Direct sales force
B)Strategic alliance
C)Joint venture
D)Direct foreign investment
E)Licensing

Question 73

When Ford Motor Co.introduced the Nova model in Mexico,it faced certain ridicule because "No va" in Spanish means "It doesn't go." Oops! This illustrates a problem with __________________.

A)Brand strategy
B)Country-of-origin effect
C)Quality
D)Fitting the product to the culture
E)Manufacturing

Question 74

__________ is not a product issue for international product marketers.

A)Brand strategy
B)Country-of-origin effect
C)Quality
D)Fitting the product to the culture
E)Manufacturing

Question 75

When Coca-Cola introduced Diet Coke in Japan,sales were poor because Japanese women don't like the concept of dieting and associate "diet" with sickness.Sales improved when the name was changed to Coke Light.This illustrates a problem with ______________.

A)Brand strategy
B)Country-of-origin effect
C)Quality
D)Fitting the product to the culture
E)Manufacturing

Question 76

When local government relationships are critical to the success of international operations the best organizational structure for a firm would be __________.

A)Targeted organization
B)Global product lines
C)Geographic regions
D)Hybrid or matrix
E)Multinationals

Question 77

The most well established local distributors might already have relationships with competitors.This problem for new market entrants would be identified in the channel strategy of ___________.

A)Capital
B)Coverage
C)Character
D)Continuity
E)Control

Question 78

The organizational structure used by most companies is ______________.

A)Targeted organization
B)Global product lines
C)Geographic region
D)Hybrid or matrix
E)Multinational

Question 79

The degree of centralization is a critical decision a firm makes before deciding on an international organizational structure.Options include _________.

A)Highly decentralized, decentralized, and centralized
B)Highly centralized, centralized, and decentralized
C)Regionalized, highly regionalized, and centralized
D)Decentralized, centralized, and regionalized
E)Regionalized, moderately decentralized, and centralized

Question 80

Ask your friends which country produces the best perfume and most likely the answer will be "France." This shows the issue that international consumer marketers face of _________.

A)Brand strategy
B)Country-of-origin effect
C)Quality
D)Fitting the product to the culture
E)Manufacturing