Deck 8: Global Marketing

Question 1

Tariffs artificially lower prices and therefore lower demand.

Answer 1

False

Question 2

In a joint venture, the burden of ownership, control, and profits is not shared.

Answer 2

False

Question 3

India is one of the fastest growing markets and has one of the youngest populations in the world.

Answer 3

True

Question 4

The Big Mac Index is a measure of economic health in a country.

Question 5

To maximize potential, segments and target markets can and should be defined by more than just geography.

Question 6

Most Americans tend to take access to global products and services for granted.

Question 7

There is only one global product strategy: to sell a product or service similar to that sold in the home country, but include minor adaptations.

Question 8

Global expansion often begins when a firm receives an order for its product from another country.

Question 9

Exporting refers to a situation where a company maintains ownership of its plants, operational facilities, and offices in a foreign country in which it sells its products.

Question 10

China is now the second-largest economy and the third-largest market for U.S. exports.

Question 11

The BRIC countries are Bolivia, Russia, Italy and China.

Question 12

An effective global pricing strategy can be easily established by setting the same prices in every market around the world.

Question 13

The North American Free Trade Agreement represents the highest level of integration among the various international trade agreements.

Question 14

The EU recently recommended common guidelines for its member countries regarding advertising to children.

Question 15

Colin wants information about the infrastructure in the countries his company is planning to export to. He will gather information about the transportation and communications capabilities in each country.

Question 16

Entering into a global franchise agreement exposes a company to higher risk than if the company had entered into direct investment in the country.

Question 17

Brazil is characterized by strong upper and lower classes, but the middle class has declined in recent years.

Question 18

Russia lags behind most European countries in use of the Internet.

Question 19

Glocalization refers to a global marketing strategy in which each of the four Ps is customized for each country.

Question 20

The greater the wealth of a country, generally, the better the opportunity a firm will have in that particular country.

Question 21

Manufacturers would prefer to produce in a country with a trade __________, because it signals a greater opportunity to export products to more markets.

A) surplus
B) deficit
C) culture
D) bonus
E) balance

Question 22

Firms with global appeal can run global advertising campaigns and simply translate the wording in the advertisements and product labeling.

Question 23

Direct investment offers the firm complete control over its operations in the foreign country.

Question 24

The shift of population from rural to urban areas in countries such as India helps global marketers by

A) decreasing pollution.
B) simplifying the supply chain needed to make goods and services available.
C) increasing the human development index.
D) decreasing competition for intellectual capital.
E) increasing nonmaterial GDP output.

Question 25

Chris is gathering information about the general economic environment in Nepal. He will look for information about the general economic environment, market size and population growth rate, and

A) culture.
B) real income.
C) airport capabilities.
D) political status.
E) religious institutions.

Question 26

To determine the market potential for its particular product or service, a firm should use

A) GDP data.
B) unemployment data.
C) purchasing power parity data.
D) inflation data.
E) as many metrics as it can obtain.

Question 27

Many developed countries are experiencing __________ population growth.

A) slight
B) zero or negative
C) infinite
D) moderate
E) significant

Question 28

Gross national income equals GDP

A) minus net consumer spending.
B) plus government spending on international trade.
C) minus purchasing power parity.
D) plus the net investment income earned from abroad.
E) plus gross domestic international investment.

Question 29

When considering global marketing opportunities in Bangladesh, Tom asked the question, "How will we get it there?" Tom is concerned about __________ capabilities in Bangladesh.

A) production capacity
B) pricing
C) advertising
D) infrastructure
E) cultural

Question 30

Cory is working on a global marketing assessment team looking out well into the future to help determine the most attractive market areas around the world. He is evaluating market sizes and growth rates. Based on population growth rates in different regions, he should consider that

A) countries with high purchasing power today may not continue to show the same growth in the future.
B) the United States and Western Europe will have dramatic increases in population growth leading to overcrowding.
C) the middle class in India will continue to shrink as the rich get richer and the poor get poorer.
D) urban population centers will become increasing unattractive and the rural areas will experience major growth in population.
E) the global population is expected to grow at staggering rates indefinitely.

Question 31

The Big Mac Index is a novel measure of

A) GDP.
B) purchasing power parity.
C) per capita GNI.
D) economic growth.
E) international trade surplus.

Question 32

The most common measure of market potential of an economy is a country's

A) GNI.
B) GDP.
C) PPP.
D) CPI.
E) APR.

Question 33

Economic measures like GDP and GNI do not fully account for a country's economic health because they only measure

A) material output.
B) international trade.
C) global expectations.
D) purchasing power parity.
E) poverty potential.

Question 34

A consumer products company produces inexpensive goods in underdeveloped markets, then repackages them as cost-effective innovations for Western buyers. This is an example of glocalization.

Question 35

The components of global market assessment include all of the following EXCEPT

A) ethnic analysis.
B) infrastructure and technology analysis.
C) analysis of government actions.
D) sociocultural analysis.
E) economic analysis.

Question 36

Using middlemen in global distribution networks generally lowers costs and prices for products.

Question 37

According to purchasing power parity theory, if __________ is / are in equilibrium, products will cost the same in each country.

A) imports and exports
B) consumer spending
C) interest rates
D) domestic products
E) exchange rates

Question 38

Globalization refers to the process by which goods, services, capital, people, and ideas

A) are onshored and offshored.
B) flow across national borders.
C) are integrated through IMF facilitation.
D) form joint ventures.
E) affect corporate culture.

Question 39

GDP is defined as

A) the value of a country's exports minus its imports.
B) great domestic product.
C) the market value of goods and services produced in a country in a year.
D) national income minus national taxes.
E) the gross purchasing power of domestic goods and services plus international income.

Question 40

Sophia owns a string of boutiques in Italy. As such, she is only allowed to have sales twice a year, in January and June or July.

Question 41

When Ben evaluated the commercial infrastructure in Mauritius, he considered the island's

A) population control measures.
B) legal, banking, and regulatory systems.
C) retailing capabilities.
D) per capita income estimates.
E) climate and culture.

Question 42

Marketers sometimes use Hofstede's cultural dimensions to design marketing campaigns

A) with low individualism symbolism when confronted with a time oriented culture.
B) using uncertainty avoidance to reduce power distance.
C) with significant power distance.
D) consistent with underlying cultural values in a country.
E) with more consistent time orientation.

Question 43

Marketers considering operations and trade with a specific country must consider whether the country belongs to a trading bloc. A trading bloc is a group of countries

A) that have established a formal agreement to manage trade activities.
B) using the same currency.
C) with similar cultural shopping patterns.
D) located next to each other.
E) with similar political views.

Question 44

Which of the following is NOT one of the major trade agreements affecting global marketing?

A) NAFTA
B) EU
C) GNI
D) ASEAN
E) CAFTA

Question 45

Exchange control refers to the regulation of a country's

A) comparative inflation rate.
B) countertrade exchange.
C) quota rate of exchange.
D) exchange tariffs.
E) currency exchange rate.

Question 46

Which of these trade agreements represents the highest level of integration among participating nations?

A) NAFTA
B) EU
C) GNI
D) ASEAN
E) CAFTA

Question 47

Global businesses often find it particularly difficult to understand the __________ of a country's culture.

A) symbols
B) underlying values
C) ceremonies
D) dress
E) visible artifacts

Question 48

Tariffs protect domestic producers by

A) making imported products more expensive.
B) increasing brand recognition.
C) reducing the cost of production.
D) offering subsidies to exports.
E) avoiding regulation.

Question 49

Geert Hofstede's cultural dimensions concept focuses on five dimensions of __________ in a country.

A) symbols
B) underlying values
C) ceremonies
D) dress
E) visible artifacts

Question 50

Global expansion often begins with

A) franchising.
B) an order from another country.
C) joint ventures.
D) direct investment.
E) strategic alliances.

Question 51

Culture affects

A) how consumers decide to make their purchases.
B) what consumers decide to purchase.
C) when consumers decide to make their purchases.
D) where consumers decide to make their purchases.
E) every aspect of consumers' purchase decisions.

Question 52

A __________ limits the quantity of imported merchandise, thus minimizing competition faced by domestic products.

A) tariff
B) duty
C) trading bloc
D) trade agreement
E) quota

Question 53

When the value of the dollar declines in relation to other currencies, it benefits U.S. marketers who

A) export goods to other countries.
B) import goods from other countries.
C) engage in countertrade.
D) enforce import quotas.
E) outsource labor.

Question 54

Generally, firms entering foreign markets begin with

A) less risky strategies first.
B) direct investment.
C) importing.
D) decentralized production.
E) cultural output.

Question 55

Which of the following is NOT one of Hofstede's cultural dimensions?

A) power distance
B) certainty assurance
C) masculinity
D) individualism
E) time orientation

Question 56

In most cases, countries use tariffs to reduce foreign competition, but tariffs are also used

A) to shorten supply chains.
B) as a response to perceived unfair trade practices.
C) to offer domestic discounts.
D) to stimulate consumer demand.
E) as a way to equalize quotas.

Question 57

When entering a foreign market, the least risky strategy is

A) franchising.
B) exporting.
C) joint venture.
D) direct investment.
E) strategic alliance.

Question 58

Changes in tariffs and quotas are

A) business actions stimulating imports.
B) corporate strategies designed to maximize profits.
C) government actions that reduce competition from international firms.
D) efforts to stimulate choices among government agencies.
E) a means of slowing outsourcing.

Question 59

Chris laughed at some of the cultural mistakes companies made in advertising and promotion in international trade while he was in school. Now he was trying to determine what had gone wrong with the campaign he had planned in Latin America for his company's product, and it didn't seem quite as amusing. He narrowed the issues down to sociocultural factors. He was looking at both __________ and __________.

A) product uses; currency rates
B) language; trading blocs and social structure
C) potential tariffs; symbols
D) visible artifacts; underlying values
E) verbal communication; logistics

Question 60

As part of efforts to stimulate economic development in Africa, the Gates Foundation announced that it would provide cellular phones to farmer cooperatives. The Gates Foundation recognized problems in __________ exist in many African markets.

A) transportation
B) communication
C) distribution
D) commerce
E) population

Question 61

Global segmentation, targeting, and positioning (STP) are more complicated than local STP, in part because

A) consumers may view their roles differently in different countries.
B) there are fewer franchising opportunities in global markets.
C) global consumer markets are almost totally homogeneous, making segmentation difficult.
D) most governments have rules against targeting consumers.
E) positioning almost always fails when attempted in a foreign country.

Question 62

NCD company wants to expand into the Mexican market. It has the financial resources, wants to control business operations, and has had considerable success marketing to Hispanics in the United States. NCD will likely use __________ to expand into the Mexican market.

A) franchising
B) exporting
C) a joint venture
D) direct investment
E) a strategic alliance

Question 63

Global segmenting, targeting, and positioning are more complicated than domestic segmenting and positioning because of cultural nuances, significant subcultures within countries, and

A) currency differences.
B) anti-discrimination regulations prohibiting segmentation and targeting in developing countries.
C) differences in the way consumers see themselves and in the way they see products and services.
D) complications due to franchising issues.
E) the taxes imposed by some foreign countries on marketing activities.

Question 64

During the early stages of globalization, in the 1950s and 1960s, _______________ were uniquely positioned in the global marketplace because they had the skills necessary to develop, promote, and market brand name consumer products.

A) large U.S. firms
B) Japanese electronics companies
C) low-cost Chinese manufacturers
D) European service companies
E) Mideast oil producers

Question 65

Cultural nuances, subcultures, and consumers' different views of their roles in different countries can make __________ complicated.

A) purchasing power parity
B) segmentation, targeting, and positioning
C) trading bloc coordination
D) exchange control planning
E) reducing trade surpluses

Question 66

The most important consideration when a firm chooses a global product strategy should be

A) opportunities for countertrade.
B) the effectiveness of the marketing team.
C) the needs of the target market.
D) the provisions of GATT.
E) WTO regulations.

Question 67

Domestic firms developing a global entry strategy might consider franchising; however, the disadvantages need to be considered. Which of these is NOT a disadvantage of franchising?

A) The franchisor has limited ability to ensure that foreign operations follow all the concepts and ideas that made the firm successful domestically.
B) The franchisor might end up becoming a competitor.
C) Franchising limits profit potential, since profits will have to be split with the franchisee.
D) Franchising is the riskiest way to enter a foreign market.
E) All of these are disadvantages a firm must consider.

Question 68

Celia's firm has developed a breakfast cereal targeted toward children. Rather than compete in the mature U.S. market, she has decided instead to introduce the product in Europe, where she feels it will be innovative. Her advertising agency urged caution because

A) advertising regulations differ in other countries, including advertising to children.
B) print media are different in Europe, and it would be difficult to create a global campaign.
C) literacy rates are significantly lower in Europe, and print ads would be ineffective.
D) research indicates that European children do not eat breakfast as often as American children.
E) domestic advertising agencies cannot earn commissions on advertising they place overseas.

Question 69

Of the five strategies for entering new markets, direct investment creates the

A) least investment cost.
B) greatest potential risk.
C) most franchisee control.
D) best opportunity for strong strategic alliances.
E) greatest coordination of efforts of global and local partners.

Question 70

When firms pool their resources to enter a new market, they create a(n)

A) franchise.
B) export promotion.
C) joint venture.
D) direct investment.
E) strategic alliance.

Question 71

China, like many other countries, usually requires entering firms to create _________ when expanding into their markets, limiting outsiders' control of businesses.

A) franchises
B) export promotions
C) joint ventures
D) direct investments
E) strategic alliances

Question 72

Many of the best-known American retailers, like Starbucks and McDonalds, have expanded globally using

A) franchising.
B) exporting.
C) joint ventures.
D) direct investment.
E) strategic alliances.

Question 73

Gerald is assessing global entry strategies for his gourmet sandwich business. He does not want to take a lot of risk and he is willing to limit his control of international stores. Gerald will likely use a(n) __________ strategy.

A) franchising
B) exporting
C) joint venture
D) direct investment
E) strategic alliance

Question 74

Global marketers typically find distribution in developing countries is more complex because

A) they must go through many types of distribution channels.
B) distribution is more heavily regulated in developing countries.
C) most consumers in developing countries live in densely populated cities.
D) the infrastructure is more advanced in most developing countries.
E) consumers in developing countries have very specific preferences.

Question 75

Tariffs, quotas, and currency exchange policies affect global

A) offshore product design.
B) pricing strategies.
C) advertising.
D) logistics.
E) promotion.

Question 76

Graham had developed an extremely successful advertising and promotion campaign for a client in the United States. The client wanted to roll out the same campaign to markets worldwide, but Graham cautioned against doing this, most likely because

A) differences in languages, customs, and culture might make the campaign meaningless and ineffective in some markets.
B) copyright and intellectual property concerns prevented him from wanting to share his good ideas outside of the U.S. market.
C) he had not applied for or received international certification that was required for working outside the United States.
D) he was unfamiliar with the code of ethics for advertising in other countries.
E) he did not have the budget for a global rollout.

Question 77

In the 1970s and 1980s, __________ dominated the global marketplace because they could exploit their skills in production, materials management, and new product development.

A) large U.S. firms
B) Japanese firms
C) low-cost Chinese manufacturers
D) European service companies
E) Mideast oil producers

Question 78

Global pricing strategies should be consistent with

A) offshore distribution facilities.
B) cost of materials.
C) positioning strategies.
D) domestic pricing.
E) trade surplus guidelines.

Question 79

Global marketers are under constant pressure to shorten distribution channels to

A) improve promotion efficiency.
B) reduce trade deficits.
C) afford tariffs.
D) meet trade agreement guidelines.
E) reduce costs.

Question 80

Brands can be extremely valuable domestically, but challenging internationally. Companies can help to overcome language difficulties in using brands by

A) keeping the brand name the same in all languages, regardless of meanings, as long as the brand logo and symbol are displayed prominently.
B) avoiding the use of the brand name in advertising and focusing on feature and benefits.
C) translating advertising copy for the entire ad except the brand name.
D) developing brand names that are meaningless in known languages.
E) adhering to the UN Convention on Naming Rights.