Deck 6: Global Aspects of Marketing

Question 1

The marketing of goods and services outside an organization's home country (whether in one or several markets) is known as

A) direct exporting.
B) indirect exporting.
C) international marketing.
D) multinational marketing.

Answer 1

international marketing.

Question 2

While a(n) ___ firm engages in marketing operations in many foreign countries, the firm's domestic market is still its dominant one.

A) international
B) exporting
C) global
D) glocal

Answer 2

international

Question 3

A ___ firm is a worldwide player with the greatest geographic business scope.

A) multinational
B) international
C) global
D) glocal

Answer 3

global

Question 4

Countries have different rates of productivity due to their natural resources, climate, technology, labor costs, and other factors. This represents the country's

A) differential advantage.
B) trade surplus.
C) comparative advantage.
D) balance of trade.

Question 5

Which of the following best explains the concept of comparative advantage?

A) Comparative advantage is generally based on economic and demographic trends.
B) Developing and less-developed countries are potentially attractive due to the rapid growth of their populations.
C) High competition increases a country's efficiency in a particular area.
D) Countries with different rates of productivity benefit by exporting products in which they have high productivity for those in which they have low productivity.

Question 6

Which concept forms the economic justification for trade between countries?

A) Comparative advantage
B) Product life cycle
C) Comparative currency values
D) Differential advantage

Question 7

What percent of the world's population growth is in developing and less-developed countries?

A) 25
B) 50
C) 75
D) 90

Question 8

A company may prolong a product's life cycle through international marketing by exporting a product

A) that is in the mature stage in its home market to a foreign market with high growth prospects.
B) with high growth in the firm's home market to a foreign market with high growth prospects.
C) to a country with a high standard of living.
D) to a country with a high population growth rate.

Question 9

The world's leading importer countries are the United States,

A) Japan, China, and the Phillipines.
B) Germany, Japan, Italy, and Singapore.
C) Germany, China, Great Britain, France, and Japan.
D) Germany, Japan, China, and Vietnam.

Question 10

The world's largest importer is

A) Great Britain.
B) the United States.
C) West Germany.
D) Japan.

Question 11

Which statement about trade deficits is correct?

A) A trade deficit occurs when exports exceed imports.
B) The United States has the greatest merchandise deficit of any country in the world.
C) In 1980, the United States had its first trade deficit.
D) The dependence of the United States on foreign natural resources has no effect on its trade deficit.

Question 12

The amount by which the value of a country's exports exceeds the value of its imports is that country's

A) comparative advantage.
B) trade surplus.
C) trade deficit.
D) import-export balance.

Question 13

Which of these is NOT a major cause of the U.S. trade deficit?

A) The mediocre image of U.S. products to many U.S. residents
B) The weak U.S. dollar relative to the Euro
C) Manufacturing products in the United States with imported parts and materials
D) The decision of U.S. firms to virtually exit such markets as televisions and VCRs

Question 14

Which of these is the most valid explanation for firms committing cultural errors in international markets?

A) Political instability is difficult to monitor.
B) Products are priced too high for the market chosen.
C) A firm uses a nonstandardized marketing strategy.
D) The firm does not employ foreign personnel in high ranking positions in its foreign offices.

Question 15

Which one of the following best represents an illustration of an international marketing error due to lack of cultural awareness?

A) A product is priced too high, based upon residents' economic means.
B) The brand name has an unanticipated double meaning to a country's residents.
C) The permit for a factory is delayed due to the need to register plans with a country's environmental protection agency.
D) Competition is higher than anticipated due to the start-up of a domestic competitor.

Question 16

A firm can best increase its awareness of a foreign country's culture by

A) hiring foreign nationals.
B) having its domestic marketing research department conduct special studies for each region.
C) setting up production facilities in foreign countries.
D) entering into export arrangements in foreign countries.

Question 17

Which of the following best illustrates the definition of a country's standard of living?

A) The value of the goods and services produced in a country
B) A country's gross domestic product per capita
C) The average quantity and quality of goods and services that are owned and consumed in a country
D) A country's stability of currency

Question 18

A country's per-capita gross domestic product (GDP) figure may be misleading since

A) it does not reflect a population's size.
B) it does not reflect a country's trade deficit.
C) it does not reflect a country's stage of industrialization.
D) a few very wealthy residents may boost per-capita GDP.

Question 19

Countries' stages of economic growth are often placed into which three categories?

A) Industrialized, developing, and less-developed
B) Less-developed, growing, and mature
C) Industrialized, emerging, and pre-industrialized
D) Industrialized, emerging, and growth

Question 20

Which stage of economic development most accurately characterizes the United States, Australia, and the nations in Western Europe?

A) Industrialized countries
B) Newly emerging free-market economies
C) Post-industrialized countries
D) Mature countries

Question 21

In what category of economic growth would a country be placed if it is characterized by rising education and technology, and per-capita GDP of $4,000 to $9,000?

A) Less-developed countries
B) Developing countries
C) Emerging countries
D) Industrialized countries

Question 22

Which stage of economic growth best describes the largest number of countries in Latin America?

A) Developing countries
B) Less-developed countries
C) Pre-industrialized countries
D) Emerging countries

Question 23

Nations in what stage of economic development have two-thirds of the world's population but less than 15 percent of world income?

A) Less-developed
B) Developing
C) Pre-industrialized
D) Emerging

Question 24

The greatest marketing opportunities generally occur in industrialized countries because of their

A) high population growth.
B) high currency stability.
C) low degree of product ownership in many product categories.
D) higher incomes and standard of living.

Question 25

When a foreign country devalues its currency relative to the dollar, it

A) lessens the efforts of nationalism.
B) makes imports more costly to that country's populace.
C) makes that country's exports more costly to U.S. residents.
D) increases that country's trade deficit.

Question 26

Which statement about the effect of currency devaluation on a country's balance of trade is correct?

A) A currency devaluation increases a country's imports.
B) A currency devaluation reduces a country's exports.
C) A currency devaluation has no impact on a country's balance of trade.
D) A currency devaluation improves the country's balance of trade.

Question 27

A country's efforts to become self-reliant and raise its status in the eyes of the world community is best known as

A) nationalism.
B) trade advocacy.
C) comparative advantage.
D) a local content law.

Question 28

Government stability is generally measured on the basis of

A) consistency of policies and the orderliness in installing leaders.
B) economic growth and currency devaluations.
C) the frequency and magnitude of currency devaluations.
D) a country's use of embargos and local content laws.

Question 29

A U.S.-based firm can protect itself from political instability through

A) insurance available through OPEC.
B) insurance available through OPIC.
C) insisting on payment in U.S. dollars.
D) local content laws.

Question 30

The most common form of trade restriction is a(n)

A) trade quota.
B) local content law.
C) tariff.
D) embargo.

Question 31

A tax placed on imported goods by a foreign government is a(n)

A) tariff.
B) levy.
C) embargo.
D) trade tax.

Question 32

The strictest form of trade quota is a(n)

A) local content law.
B) trade protection instrument.
C) embargo.
D) tariff.

Question 33

What trade restriction encourages manufacturers to establish local plants in foreign countries?

A) Domestic stability law
B) Embargo
C) Local content laws
D) Trade quota

Question 34

Which form of trade restriction seeks to directly increase local employment?

A) Domestic stability law
B) Embargo
C) Local content laws
D) Trade quota

Question 35

The concept of reducing impediments to international trade among all nations is central to the

A) European Community Agreement.
B) World Trade Organization.
C) Overseas Private Investment Corporation.
D) Latin American Integration Association.

Question 36

The European Union rules call for

A) all members to join the European Free Trade Association.
B) all members to participate in the World Trade Organization.
C) common standards for all products and services to be developed and implemented with NAFTA.
D) no trade restrictions with members, and a uniform tariff with nonmembers.

Question 37

Which statement concerning the European Union (EU) is NOT correct?

A) The combined gross domestic product of EU member nations is slightly more than that of the United States.
B) One of the EU's challenges is to install a common currency, the Euro, across all of the member counties.
C) The EU agreement calls for increased free trade between EU members and members of other regional economic communities.
D) The EU agreement seeks common standards to increase the flow of capital and people.

Question 38

Which statement concerning the North American Free Trade Agreement (NAFTA) is NOT correct?

A) NAFTA is within 10 percent of the size of the European Union in terms of population.
B) The goal of NAFTA is to remove tariffs and other trade restrictions among its members.
C) Like the EU, there is some movement on a common currency among NAFTA members.
D) There have been some discussions about including some emerging Latin American nations in NAFTA.

Question 39

Which one of the following is NOT a basic international organizational format?

A) Management contracting
B) Joint venture
C) Exporting
D) Direct ownership

Question 40

With which of these organizational formats does a firm reach international markets by selling directly through its own sales force or indirectly through foreign merchants or agents?

A) Direct ownership
B) Management contracting
C) Exporting
D) Joint venture

Question 41

Which of these organizational formats represents a company's lowest level of commitment to international marketing?

A) Joint venture
B) Contract manufacturing
C) Exporting
D) Direct ownership

Question 42

Which basic international organizational format enables firms to share expertise, costs, and/or connections with key persons?

A) Direct ownership
B) Management contracting
C) Joint venture
D) Exporting

Question 43

Which one of the following is NOT a major advantage of the direct ownership organizational format for international marketing?

A) Full control over all phases of production and marketing
B) Marketing plans that are sensitive to local needs
C) Potential savings in labor costs
D) Low risk due to nationalism

Question 44

Which one of the following is a major advantage of a standardized or global approach to international market planning?

A) Marketing and production economies
B) An image tailored to country or regional preferences
C) High opportunities for input from foreign personnel
D) High sensitivity to local needs

Question 45

What approach to international marketing works best when a firm's foreign markets are similar to its home country?

A) Standardized
B) Nonstandardized
C) Mixed
D) Direct

Question 46

What international product-planning strategy enables a firm to best capitalize on economies of scale?

A) Forward invention
B) Product adaptation
C) Backward invention
D) Straight extension

Question 47

Firms that appeal to developing and less-developed countries often must produce less complex items for these markets due to poorer consumer education, lower incomes, and lower education. This strategy best illustrates which product-planning strategy?

A) Straight extension
B) Product adaptation
C) Backward invention
D) Forward invention

Question 48

Which international product-planning strategy is the most time consuming and requires the highest capital investment?

A) Backward invention
B) Forward invention
C) Straight extension
D) Product adaptation

Question 49

High overlap in media circulation exists among many European countries. Which international promotion planning strategy best takes advantage of this overlap?

A) Standardized
B) Nonstandardized
C) Mixed
D) Global

Question 50

A firm sells a product in a foreign country at a price that is considerably lower than that in the firm's home market. This illustrates what type of international pricing strategy?

A) Forward invention
B) Backward invention
C) Dumping
D) Psychological pricing

Question 51

The major difference between international and multinational marketing is that multinational marketing is more prone to

A) allocate resources without regard to national boundaries.
B) operate only in its home country.
C) use standardized marketing plans.
D) utilize exporting.

Question 52

Low labor costs, preferential climate conditions, and high-quality mineral deposits are examples of

A) a country's comparative advantage.
B) conditions in less-developed countries.
C) conditions in industrialized countries.
D) a country's marketing mix.

Question 53

What concept is best illustrated when developing countries exchange raw materials (extracted and semi-processed with low-priced labor) for high-technology products from industrialized countries?

A) The balance of trade
B) The product life cycle
C) Comparative advantage
D) Nationalism

Question 54

Although the market for washing machines is mature in the United States, in many developing countries, home washing machine market penetration is low. This best illustrates what international marketing concept?

A) Comparative advantage
B) The balance of trade
C) Product differentiation
D) The product life cycle

Question 55

A U.S. firm decides to sell a lot of discontinued computer products abroad (rather than sell these products to a discount retailer in the United States) because the manufacturer

A) does not want to spoil the domestic market for full-price computers.
B) seeks to earn monies on the basis of currency shifts.
C) is concerned about legislation relating to dumping.
D) wishes to expand its sales abroad to take advantage of sales opportunities.

Question 56

A weak U.S. dollar should have a positive effect on the trade deficit because

A) it reduces U.S. companies' price-earnings ratios.
B) it increases a foreign investor's tax rate.
C) U.S. exports are less costly, while imports of foreign goods are more costly.
D) U.S. exports are more costly, while import costs are less costly.

Question 57

The United States should be best able to reduce its trade deficit by

A) insisting on dollars as payment for all foreign transactions.
B) insisting on joint ventures as an alternative to direct ownership.
C) selling its assets in foreign countries to foreign nationals.
D) reducing trade restrictions on U.S. products in foreign markets.

Question 58

A common scenario that often results in international cultural errors is to

A) use a standardized approach to marketing where a nonstandardized approach is appropriate.
B) use foreign personnel as key inputs in the planning process.
C) develop plans on a decentralized basis, where applicable.
D) rely on marketing research studies that suggest that important cultural differences exist.

Question 59

Donuts were originally not popular in some Latin American countries because residents assumed that "someone ate the middle." This illustrates a(n)

A) misunderstanding relative to a country's economic environment.
B) example of a country's technological environment.
C) example of nationalism, applied to a food product.
D) lack of cultural awareness of this market.

Question 60

Which of the following measures allows market analysts to most closely measure a country's stage of economic development?

A) The relative costs of a market basket of goods
B) Average household income
C) The proportion of a country's residents who have incomes within given ranges
D) Gross domestic product per capita

Question 61

Over the next ten years, the market for Internet-based telephone services should probably have the fastest growth rate in what type of countries?

A) Post-industrial
B) Industrialized
C) Developing
D) Subsistence

Question 62

The major attraction of industrialized countries as a target market is their

A) high population growth rate.
B) high market penetration rate for most products.
C) relatively low tariffs on all imported goods.
D) high standard of living.

Question 63

The market for central air conditioning is primarily an industrial good in a developing country. It is primarily a consumer good in a(n)

A) industrialized country.
B) post-developing country.
C) developing country.
D) less-developed country.

Question 64

In the short run, consumer-goods manufacturers will generate their greatest sales in ___ countries; their long-run sales potential will probably be greater in ___ countries.

A) developing, less-developed
B) industrialized, less-developed
C) less-developed, developing
D) less-developed, industrialized

Question 65

A firm seeking untapped markets with the greatest long-term marketing opportunities from a broad variety of goods and services should seek distribution in ___ countries.

A) industrialized
B) pre-industrialized
C) developing
D) less-developed

Question 66

Physical distribution facilities are poorest for countries at which stage of economic development?

A) Industrialized
B) Pre-industrialized
C) Developing
D) Less-developed

Question 67

A U.S.-based firm consolidates all foreign sales and profits in its profit-and-loss statement. The sales are made in a foreign currency but reported in U.S. dollars in the firm's profit-and-loss statement. An important subsidiary exists in a foreign country where the currency has just been devalued, relative to the U.S. dollar, by 50 percent. What effect will the currency devaluation have on the reporting of the subsidiary's sales (in U.S. dollars)?

A) Sales will be increased by 50 percent.
B) Sales will be reduced by 30 percent.
C) Sales will be reduced by 50 percent.
D) Sales will be reduced by 70 percent.

Question 68

The Following Questions are linked to this scenario: A small manufacturer of consumer food products seeks to increase its international sales. The firm's marketing manager has been assigned by the firm's president to examine the economic environment of several regions, with particular emphasis on currency devaluations.

-In general, currency devaluations are LEAST likely to occur in what type of country?

A) Underdeveloped
B) Industrialized
C) Developing
D) Less-developed

Question 69

The Following Questions are linked to this scenario: A small manufacturer of consumer food products seeks to increase its international sales. The firm's marketing manager has been assigned by the firm's president to examine the economic environment of several regions, with particular emphasis on currency devaluations.

-What pricing strategy can the firm use to reduce the risk of currency devaluations?

A) Set all prices in a foreign country's currency.
B) Set all prices in U.S. dollars.
C) Set all prices in a foreign currency at the official exchange rate (based on the actual U.S. dollar price).
D) Set all prices in a foreign currency at the unofficial (black market) exchange rate (based on the desired U.S. dollar price).

Question 70

A U.S. manufacturer opening a manufacturing plant in a foreign country with high political stability should seek to reduce its risk through

A) hiring foreign nationals as key executives.
B) undertaking a joint venture with another U.S. partner.
C) utilizing exporting as a form of company organization.
D) borrowing funds from a U.S. bank.

Question 71

A less-developed nation wants to stimulate foreign investment, to reduce its unemployment, and to encourage its manufacturing industries to grow. Which form of trade restriction best accomplishes these multiple objectives?

A) Local content laws
B) Quotas
C) Embargos
D) Tariffs

Question 72

Which statement concerning the World Trade Organization (WTO) is NOT correct?

A) The WTO is the only international organization dealing with the global rules of trade between nations.
B) The WTO has replaced GATT.
C) The WTO has a trade dispute settlement process among its member nations.
D) The WTO seeks to promote free trade among members of the same economic community.

Question 73

Which statement concerning the European Union (EU) is NOT correct?

A) The combined gross domestic product (GDP) of the EU nation members is more than the GDP for the United States.
B) The EU is seeking to remove both economic (tariff-based) and noneconomic barriers to trade among its members.
C) The EU agreement will result in no significant improvement on delays caused by Customs Office inspections among member countries.
D) The combined population of EU members is greater than that of the United States.

Question 74

The firm has low financial resources, and realizes significant cost savings in manufacturing through economies of scale. In addition, it wishes to limit its financial exposure in the event that its products are not accepted in its new international markets. What form of company organization should you recommend?

A) Direct ownership
B) Exporting
C) Joint venture
D) Management contracting

Question 75

What type of company organization should you recommend for the manufacturer as a means of complying with local content laws? The manufacturer desires to minimize its total investment, as well as its financial risk and is now willing to raise its prices to reflect the higher production costs.

A) Joint venture
B) Exporting
C) Direct ownership
D) Licensing

Question 76

Local content laws are best satisfied by which form of joint venture?

A) Exporting
B) Contract manufacturing
C) Joint ownership
D) Direct ownership

Question 77

Which approach to international marketing is most appealing to a firm that plans to be a low-cost provider?

A) Nonstandardized approach
B) Standardized approach
C) Mixed approach
D) Joint venture

Question 78

Which approach to international marketing is most likely to be insensitive to a country's cultural environment?

A) Standardized approach
B) Nonstandardized approach
C) Mixed approach
D) Joint venture

Question 79

Which approach to international marketing involves decentralized planning and implementation?

A) Standardized approach
B) Nonstandardized approach
C) Mixed approach
D) Joint venture

Question 80

Which approach to international marketing is the most costly to implement?

A) Standardized approach
B) Nonstandardized approach
C) Mixed approach
D) Joint venture