Deck 9: Reaching Global Markets

Question 1

If Germany, in an attempt to bolster the sales of its own auto manufacturers, decided to limit the number of automobiles that could be brought in from other countries, Germany would be using a(n)

A) embargo.
B) boycott.
C) exchange control.
D) import tariff.
E) quota.

Answer 1

E

Question 2

Describe the sociocultural forces that affect international marketing strategy.

Answer 2

Cultural and social differences among nations can have significant effects on marketing activities. Because marketing activities are primarily social in purpose, they are influenced by beliefs and values regarding family, religion, education, health, and recreation. Local preferences, tastes, and idioms can all prove complicated for international marketers. It can be difficult to transfer marketing symbols, trademarks, logos, and even products to international markets, especially if these are associated with objects that have profound religious or cultural significance in a particular culture. Cultural differences may also affect marketing negotiations and decision-making behavior. Buyers' perceptions of other countries can influence product adoption and use. Multiple research studies have found that consumer preferences for products depend on both the country of origin and the product category of competing products. When people are unfamiliar with products from another country, their perceptions of the country as a whole may affect their attitude toward the product and influence whether they will buy it. If a country has a reputation for producing quality products and therefore has a positive image in consumers' minds, marketers of products from that country will want to make the country of origin well known. The extent to which a product's brand image and country of origin influence purchases is subject to considerable variation based on national culture characteristics.

Question 3

According to your text, ____ are small technology-based firms operating in international markets almost immediately after their establishment and realizing as much as 70% of their sales outside the domestic home market.

A) "natural globals"
B) "multinational corporations"
C) "born globals"
D) "born multinationals"
E) "multinational enterprises"

Answer 3

C

Question 4

If Tasmania levied a duty on all goods purchased from the United States and other countries outside its borders that were brought into Tasmania, its businesses and citizens would be paying a(n)

A) embargo.
B) import tariff.
C) travelers' tax.
D) export tax.
E) foreign duty.

Question 5

Before the 1990s, most firms entered international markets

A) globally and quickly.
B) incrementally and slowly.
C) incrementally and quickly.
D) domestically and slowly.
E) regionally and quickly.

Question 6

The forces that affect foreign markets may differ dramatically from those affecting domestic markets. This makes a careful ____ a critical part of a successful international marketing strategy.

A) political analysis
B) regulatory analysis
C) social audit
D) environmental analysis
E) marketing analysis

Question 7

In China, the price of imported Scotch is $30 per glass as opposed to Scotch from China, which is $3. Which of the following do you think accounts for the difference in price?

A) Exchange control
B) Balance of trade
C) Import tariff
D) Embargo
E) Export tariff

Question 8

In what ways can a nation restrict the flow of imported goods?

Question 9

What effect is NAFTA having on the international trade of the following countries: United States, Canada, and Mexico?

Question 10

What marketing and ethical problems can bribes create in international marketing transactions?

Question 11

When Starbucks decided to expand into the international markets of India, Japan, and Argentina, management realized that there would be significant differences in the standards of living, credit, buying power, and income distribution in those countries. Starbucks is currently examining the ____ forces in its environmental analysis.

A) economic
B) cultural
C) ethical
D) technological
E) legal

Question 12

What effects are technological forces having on international marketing? What opportunities exist in the global marketplace that marketers can exploit with regard to technology?

Question 13

Which of the following is often used to raise revenue for a country and/or to protect domestic products?

A) Quota
B) Warning label
C) Embargo
D) Import tariff
E) Exchange control

Question 14

In what ways can businesses become involved in international marketing activities?

Question 15

Describe how economic and competitive forces affect international marketing strategies.

Question 16

When a glove manufacturer in China is allowed to sell only a certain number of plastic gloves to Japan, that firm is facing a(n)

A) tariff.
B) embargo.
C) restrictive product standard.
D) quota.
E) balance of trade restriction.

Question 17

Explain why the modes of entry into an international market are a major issue for managers to consider.

Question 18

How do globalized marketing strategies differ from customized marketing strategies? What are the implications of each for marketing managers?

Question 19

Describe the difficulties encountered in standardizing the marketing mix globally.

Question 20

Italy currently limits the number of Coach bags that can be imported during a one-year period, since Coach bags are made in New York, USa. This is an example of a(an) ____

A) exchange control limit.
B) embargo.
C) quota.
D) import tariff.
E) supply limit.

Question 21

Marketers of computer software, music CDs, and books are particularly affected by cultural differences in

A) socioeconomic status of citizens.
B) advances in technology.
C) differences in cross-cultural exchange behavior.
D) ethical codes of conduct for businesses.
E) standards regarding intellectual property.

Question 22

Caterpillar, maker of large construction equipment in the U.S., would like to better understand factors that would affect its ability to export its products to various countries. Which of the following forces determine how trade barriers affect Caterpillar's marketing efforts?

A) Political and legal
B) Economic
C) Industrial and technological
D) Technological and legal
E) Economic and political

Question 23

When products are introduced into one nation from another, acceptance is far more likely

A) if prices are set very low.
B) when bribes are paid to local officials to aid distribution.
C) if there are similarities between the two cultures.
D) if packaging is adjusted to match local preferences.
E) when retailers are given incentives to push the products.

Question 24

Maquiladoras are

A) exchange controls from central banks in Latin American countries.
B) production facilities in north-central Mexican states.
C) import-export agents of the Mexican government.
D) global marketing programs established in Latin American countries.
E) freight forwarders from Mexico.

Question 25

Walmart is currently expanding its stores into Canada and Mexico. This expansion is being facilitated by the

A) European Union.
B) North American Free Trade Agreement.
C) Pacific Rim Unification Act.
D) International Retail Alliance Association.
E) Latin American Free Trade Association.

Question 26

Which of the following countries has the highest GDP?

A) Japan.
B) the United Kingdom.
C) Brazil.
D) the United States.
E) Canada.

Question 27

Select the true statement.

A) Legislation regulating marketing in many foreign countries is being eased.
B) A government's attitude toward cooperation with importers has little impact on marketing to that country.
C) Refusing to give payoffs and bribes in some foreign countries may put a marketer at a competitive disadvantage.
D) Bribes and payoffs are considered unethical in all countries and cultures.
E) Bribes and payoffs are supported by U.S. trade policies under certain conditions.

Question 28

The agreement between the United States, Canada, and Mexico that merges these three countries into one marketplace is called

A) EU.
B) MERCOSUR.
C) APEC.
D) NAFTa.
E) GATT.

Question 29

The Foreign Corrupt Practices Act of 1977 makes it illegal for U.S. firms to

A) attempt to make large payments or bribes to influence policy decisions of foreign governments.
B) offer foreign businesses any type of incentive for purchasing their company's products and services.
C) change their ethical standards when dealing with foreign firms.
D) give even small tips or gifts in countries where such gifts are customary business practices.
E) introduce any type of corruption into foreign businesses that have higher ethical standards than those of the U.S. firm.

Question 30

In considering the viability of potential international markets for Pepsi products, PepsiCo is advised to take into account ____, which provides insight into market potential.

A) per capita gross domestic product
B) gross domestic product
C) the quantity of exports
D) the quantity of imports
E) total consumer income

Question 31

If a certain country considered handshakes in business transactions to be taboo and preferred to use nodding, this would be an example of differences in ____ forces.

A) sociocultural
B) political
C) sales
D) ethical
E) regulatory

Question 32

Special interest groups and regulatory bodies are ____ forces that must be taken into account in international marketing.

A) socioeconomic
B) technological
C) economic
D) social and ethical
E) political and legal

Question 33

____ can force businesspeople to buy and sell foreign products through a central agency, such as a central bank.

A) Embargoes
B) Export tariffs
C) Quotas
D) Import tariffs
E) Exchange controls

Question 34

The gross domestic product is

A) a measure of the profit made by all firms in a nation.
B) the average annual earnings per person in a nation.
C) a measure of the types of products produced by a nation.
D) an overall measure of a nation's economic standing.
E) a ratio of domestic products to products produced in foreign countries.

Question 35

Which of the following is used to help maintain a more favorable balance of trade by a country?

A) Limiting imports
B) Limiting exports
C) Establishing exchange controls
D) Increasing gross domestic product
E) Changing political systems

Question 36

The United States' former prohibition against importing cigars from Cuba for resale was an example of a(n)

A) health control.
B) quota.
C) embargo.
D) exchange control.
E) import control.

Question 37

Government restrictions on the amount of a particular country's currency that can be bought or sold are known as

A) embargoes.
B) quotas.
C) exchange controls.
D) import controls.
E) balance of trade controls.

Question 38

Many companies choose to standardize their ____ across national boundaries to maintain a consistent and well-integrated corporate culture.

A) technology
B) ethical behavior
C) language
D) dress code
E) products

Question 39

____ refers to the idea that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures.

A) The self-reference criterion
B) Global ethics
C) Economic relativism
D) Cultural relativism
E) Moral relativism

Question 40

The ____ is the difference in value between a nation's exports and its imports.

A) net trade value
B) export/import ratio
C) gross domestic product
D) balance of payments
E) balance of trade

Question 41

The extent of Raytheon's participation in global business is selling the batteries it manufactures to companies in Spain. In this case, Raytheon is a(n)

A) trading company.
B) importer.
C) exporter.
D) franchiser.
E) contract manufacturer.

Question 42

The trade alliance that includes Brazil, Argentina, Chile, and other countries is known as

A) OPEC.
B) APEC.
C) MERCOSUR.
D) NAFTa.
E) the Common Market.

Question 43

Which of the following is not true of NAFTA?

A) The agreement has a long adjustment phase-in time period.
B) Increased competition should lead to a more efficient market.
C) It will provide additional opportunities for the United States in long-term affiliations with other countries in the Western Hemisphere.
D) It provides protection for intellectual property among its members.
E) Business licensing requirements have been increased.

Question 44

Many marketers claim that ____ will become the world's largest market.

A) Japan
B) the United States
C) China
D) Thailand
E) India

Question 45

If a newly formed country wanted to increase its international trade and reduce worldwide tariffs, it would most likely try to become a part of

A) NAFTa.
B) WTO.
C) MERCOSUR.
D) APEC.
E) EU.

Question 46

The Southern Common Market (MERCOSUR) includes

A) countries from southern Africa.
B) both India and Indonesia.
C) Australia and New Zealand.
D) countries in South America.
E) southern China and India.

Question 47

The unification of Europe through the European Union (EU)

A) produced the largest single market in the world.
B) calls for greater customization of products and attention to regulations and restrictions of European countries.
C) means that members of the EU have become more heterogeneous in their needs and wants.
D) required the countries to be segmented into many different markets.
E) permits virtually free trade among the member nations of the EU.

Question 48

At the heart of the ____ are agreements that provide legal ground rules for international commerce and trade policy.

A) United Nations
B) GATT
C) MERCOSUR
D) WTO
E) APEC

Question 49

One of the effects of NAFTA is the simplification of country-of-origin rules. This will likely hinder the international trade activities of

A) Canada.
B) Japan.
C) Brazil.
D) Cuba.
E) Panama.

Question 50

When a firm's products sell in foreign countries with little or no effort to obtain foreign sales, the firm is engaging in

A) international marketing.
B) global marketing.
C) limited exporting.
D) product licensing.
E) unplanned exporting.

Question 51

When the American company Exxon purchases crude oil from Saudi Arabia, it is engaging in

A) licensing.
B) importing.
C) free trade.
D) exporting.
E) dumping.

Question 52

Most European countries use a common currency, the _____, except for _____, which uses its own currency.

A) euro; France
B) euro; England
C) dollar; England
D) euro; Germany
E) euro; Austria

Question 53

The purchase of products from a foreign source is called

A) exporting.
B) dumping.
C) importing.
D) licensing.
E) venturing.

Question 54

The World Trade Organization accomplishes all of the following except

A) educating companies about international trade rules.
B) lending money to businesses interested in developing international markets.
C) serving as a forum for trade negotiations.
D) helping settle trade disputes.
E) providing legal ground rules for international commerce.

Question 55

Henderson Synthetics is a producer of chemical products aimed at increasing agricultural yield per acre. Henderson Synthetics' management believes that several of the firm's products could have sizable markets in other countries; however, it is costly to obtain market research to confirm this. If Henderson Synthetics wanted to temporarily "try out" these international markets with a minimal level of commitment and cost, it should use

A) contract manufacturing.
B) exporting.
C) joint ventures.
D) licensing.
E) subsidiaries.

Question 56

Which of the following alliances/agreements is the United States not a part of?

A) NAFTA
B) APEC
C) GATT
D) WTO
E) MERCOSUR

Question 57

Which of the following lists the levels of involvement in global marketing from the lowest to the highest?

A) Regional marketing, multinational marketing, limited exporting, domestic marketing, globalized marketing
B) Limited exporting, domestic marketing, globalized marketing, multinational marketing, regional marketing
C) Globalized marketing, multinational marketing, regional marketing, limited exporting, domestic marketing
D) Domestic marketing, globalized marketing, regional marketing, multinational marketing, limited exporting
E) Domestic marketing, limited exporting, multinational marketing, regional marketing, globalized marketing

Question 58

Another name for the European Union is

A) the Common Market.
B) the European Market.
C) the Euro.
D) NAFTa.
E) AECO.

Question 59

The term dumping refers to the sale of

A) products sold in foreign markets that cannot be sold in the United States.
B) products sold in foreign markets at prices above those charged in the United States.
C) all discontinued U.S. products in foreign countries.
D) products sold in foreign countries at unfairly low prices.
E) products sold in foreign markets that cannot pass safety standards in the United States.

Question 60

Which of the following agreements provides a forum for tariff negotiations, reducing trade restrictions, resolution of international trade problems, and ground rules for international trade?

A) The World Trade Organization
B) The North American Free Trade Agreement
C) The Latin American Free Trade Agreement
D) The European Union Free Trade Agreement
E) The General Agreement on Tariffs and Trade

Question 61

Which of the following describes a company hiring a foreign firm to produce a designated volume of its product to specification?

A) Licensing
B) Contract manufacturing
C) Exporting
D) Importing
E) Direct investment

Question 62

Which of the following would be a benefit to a franchisor, such as Jiffy Lube, in expanding into international marketing?

A) There are no risks involved with allowing a foreign franchisee.
B) The franchisor does not have to put up a large capital investment.
C) The franchisor does not have to share its name or operational procedures.
D) The franchisee only pays a set fee every month to the franchisor.
E) An equal partnership is formed between the franchisor and franchisee.

Question 63

A company not involved in manufacturing that brings together buyers and sellers in different countries is usually referred to as a

A) franchise.
B) contract manufacturer.
C) strategic intermediary.
D) trading company.
E) joint venture.

Question 64

Franchising offers all the following benefits for franchisors except

A) franchise agreements require a certain standard of behavior from franchisees, which helps protect the franchise name.
B) franchisors can retain control of their name while increasing global penetration of their products.
C) the franchisee's revenue stream is fairly consistent because franchisors pay fixed fees and royalties.
D) the franchisor's revenue stream is fairly consistent because franchisees pay fixed fees and royalties.
E) franchisors do not have to put up a large capital investment.

Question 65

A large farming cooperative that focuses on the production of fruits and vegetables uses a business that sells the farmers' products in foreign countries and also provides consulting, insurance, legal assistance, and warehousing to the cooperative. This business would most likely be called a(n)

A) trading company.
B) export specialist.
C) contract wholesaler.
D) licensor.
E) strategic partner.

Question 66

Some hospitals in the United States find that their need for radiologists to read X-rays is volatile during the evening and early morning hours, especially between 2:00 and 6:00 a. m. This is because the number of emergency room visits needing X-rays is usually lower than those required during daytime operating hours. There is a recent trend where hospitals in the United States are contracting radiologists from countries such as Australia to read the electronically-transmitted X-rays during the evening and early morning hours. This is an example of

A) outsourcing.
B) licensing.
C) franchising.
D) contract manufacturing.
E) contract sourcing.

Question 67

What is the primary distinction between a joint venture and a strategic alliance in international marketing?

A) Strategic alliances are only formed between companies from well-developed countries whereas joint ventures are between companies from economically-diverse countries.
B) A joint venture involves only two companies whereas a strategic alliance is formed between three or more companies.
C) A joint venture is defined in scope, while a strategic alliance is typically represented by an agreement to work together.
D) A joint venture is formed between companies with dissimilar product offerings while a strategic alliance is formed between companies with similar product offerings.
E) A joint venture is simply a financial investment in a foreign firm while a strategic alliance involves more than just financial support.

Question 68

Sometimes business partnerships are formed between traditional rivals competing for market share in the same product class. These partnerships are known as

A) trading companies.
B) contract manufacturers.
C) joint ventures.
D) strategic alliances.
E) licenses.

Question 69

The Cooper Tire & Rubber Company has been searching for less expensive raw materials for manufacturing its bicycle tires. Cooper has found that there are less expensive sources in the country of Indonesia, but it needs to form a partnership with the government of Indonesia in order to gain access to the country's rubber. What type of partnership will need to be formed?

A) A multinational enterprise
B) A contract manufacturing arrangement
C) A strategic alliance
D) A franchise
E) A joint venture

Question 70

Nuhitzu believes it has the technological expertise to produce communication systems that will be leaders around the globe. Boston Electronics is widely regarded as having excellent management systems and superior marketing programs. To utilize these strengths, the two firms might form a(n) ____ to work together on a worldwide basis.

A) licensing agreement
B) export trading company
C) joint agreement
D) strategic alliance
E) multinational enterprise

Question 71

If The Limited Company relies on hiring a foreign textile manufacturer to produce a designated amount of clothing for its Express, Limited, and other stores, it is using

A) exporting.
B) franchising.
C) contract manufacturing.
D) a joint venture.
E) licensing.

Question 72

A business partnership between a domestic firm and a foreign firm is known as

A) a joint venture.
B) an international partnership.
C) a multinational enterprise.
D) licensing.
E) exporting.

Question 73

A(n) ____ is an organization that links buyers and sellers in different countries but is not involved in manufacturing.

A) trading company
B) exporter
C) joint venture
D) strategic alliance
E) licensee

Question 74

A special form of licensing in which one company grants another company the right to market its product in accordance with its standards in exchange for a financial commitment is called

A) a joint venture.
B) contract manufacturing.
C) direct licensing.
D) franchising.
E) a strategic alliance.

Question 75

The role of export agents is to

A) bring buyers and sellers from different countries together and collect a commission for arranging sales.
B) purchase products from different companies and sell them to foreign countries.
C) help a firm to make direct investments in foreign countries.
D) contact domestic firms about the opportunities available in exporting.
E) arrange for licensing agreements between domestic and foreign firms.

Question 76

If Caterpillar wished to reach the market in Malaysia but was leery of a direct investment in the country, it might provide a Malaysian operation with the knowledge to produce and market its products in exchange for a commission. This type of arrangement is called

A) licensing.
B) exporting.
C) a strategic alliance.
D) a joint venture.
E) contract manufacturing.

Question 77

Toshiba Electronics is very interested in taking advantage of business opportunities in India but does not have access to India's market. Toshiba has the patent on a low-cost, quality computer system that could assist small businesses in India. Sony Computer, Toshiba's competitor, is experienced in India's small business market but does not have a computer comparable to Toshiba's. If Toshiba and Sony work together to utilize these strengths to seize this opportunity in India, what type of business structure would they likely use?

A) Trading company
B) Strategic alliance
C) Licensing
D) Direct ownership
E) Exporting

Question 78

What level of commitment in international marketing may be most attractive when the political and economic stability of a foreign country is questionable?

A) Joint ventures
B) Direct ownership
C) Exporting
D) Limited exporting
E) Licensing

Question 79

Tony&Guy is a global hairdressing and education business headquartered in England. It has recently opened salons in Mongolia, adding to its numerous salons worldwide. Tony&Guy allows foreign businesspeople to use its name, logo, methods of operation, advertising, and products. In exchange, Tony&Guy receives a financial commitment and an agreement to conduct business in accordance with its standard of operations. Tony&Guy is engaging in

A) contract manufacturing.
B) wholesaling.
C) franchising.
D) exporting.
E) direct investment.

Question 80

The Ford Motor Company has entered into an alliance with Yves Saint Laurent, a maker of clothing and one of the most successful fashion houses in the world. Yves Saint Laurent is headquartered in France. Ford will use Yves Saint Laurent designs and color traditions in its production of luxury models of the company's Expedition SUV and Lincoln vehicles. The Yves Saint Laurent elements will appear in the interior and body paint color. This alliance would most likely be classified as

A) a strategic alliance.
B) a joint venture.
C) a global direct ownership.
D) a multinational enterprise.
E) contract manufacturing.