Question 1

Explain product invention with the help of suitable examples.

Accepted Answer

The answer of Explain product invention with the help of...

Question 2

Which of the following is true of international divisions that are structured as geographical organizations?

Accepted Answer

Geographical organizations are structured as separate operating units, managed by country managers responsible for salespeople, distributors, and licensees in their respective countries. This structure facilitates local responsiveness and adaptation to local market conditions. It is often used in firms with a multidomestic strategy, where the emphasis is on decentralization and differentiation to meet local needs. Product-based organizations, on the other hand, are more suitable for firms with a global strategy, where the emphasis is on standardization and integration to achieve economies of scale and scope.

Question 3

Many organizations no longer have a clearly defined home market. Nor do they have home-office staffs. Instead, multicultural managers operate out of facilities located all around the world, bringing diverse cultural perspectives to their brands and operations. They are truly ________.

Accepted Answer

The description suggests that the organization operates globally and has multicultural managers located around the world, indicating a global organization. Options A, B, C, and E do not fully capture the characteristics mentioned in the description.

Question 4

Most of the retailing in the United States is done by small, independent retailers.

Accepted Answer

While small, independent retailers do exist, most of the retailing in the United States is done by large chain stores and e-commerce giants.

Question 5

Global companies recruit management from many countries, buy components and supplies where they cost the least, and invest where the expected returns are greatest.

Accepted Answer

This statement accurately describes the behaviors and strategies of many global companies. They prioritize efficiency and profit, often resulting in sourcing materials and talent from different countries based on cost and potential benefits.

Question 6

In managing their international marketing activities, most companies first ________.

Accepted Answer

The most common and basic approach for companies in managing their international marketing activities is to first organize an export department to handle the exportation of products to foreign markets. This allows companies to test their products in foreign markets with minimal investment and risk. Once a company gains experience in the international market, they may then choose to expand further through foreign direct investment, creating an international division, or forming a domestic subsidiary. Organizing an import department would be more relevant for companies that need to source inputs or raw materials from foreign markets.

Question 7

Strawberry Fizz is a renowned bottled juice manufacturer in the United States. It exports its products to Mexico, has a joint venture in Hong Kong, and owns a subsidiary in South Africa. The company has organized an export department to manage its international marketing activities. Do you think it has made the right decision? Justify your answer.

Accepted Answer

The answer of Strawberry Fizz is a renowned bottled juice...

Question 8

Which of the following is most likely true about a global organization?

Accepted Answer

A global organization is one that operates in multiple countries and has a centralized top management that plans worldwide policies to ensure consistency and alignment across all regions. This helps the organization maintain a cohesive brand identity and achieve economies of scale. Options B, C, D, and E are all inconsistent with the characteristics of a global organization.

Question 9

Differentiate between straight product extension and product adaptation. Give a few examples of each.

Accepted Answer

The answer of Differentiate between straight product extension and product...

Question 10

In the global value delivery network, the second link between the sellers and the final buyers moves products from points of production to the borders of countries within which they are sold.

Accepted Answer

The second link in the global value delivery network typically involves moving products from the borders of the countries where they are produced to the final buyers within those countries, not from points of production to the borders.

Question 11

Companies that export goods to one country cannot have a subsidiary in another country because of international trade agreements.

Accepted Answer

Companies can have subsidiaries in other countries even if they export goods to another country. International trade agreements do not prohibit companies from opening subsidiaries in other countries.

Question 12

Lemon N' Honey is a juice manufacturing company in the United States. It exports its products to Australia, licenses to China, has a joint ownership venture in France, and owns a subsidiary in Brazil. The firm will most likely need to create a(n)________ to handle all its worldwide activities.

Accepted Answer

Lemon N' Honey's expansive global operations require it to have a specialized and dedicated department to handle all its worldwide activities. An international division would be the most appropriate choice for this purpose as it would be responsible for overseeing the firm's international marketing, sales, and distribution efforts. This would enable the company to better coordinate its global operations and ensure that its products are effectively marketed and distributed in all its target markets.

Question 13

Explain the whole-channel view of the distribution process.

Accepted Answer

The answer of Explain the whole-channel view of the distribution...

Question 14

Jazz is a costume jewelry manufacturing company based in the United States. The company decides to sell its products abroad, but it faces the major problem of price escalation. What is price escalation? How can Jazz overcome this problem?

Accepted Answer

The answer of Jazz is a costume jewelry manufacturing company...

Question 15

Which of the following is an international division organized based on different merchandise categories?

Accepted Answer

A world product group is a type of international division that is organized based on different merchandise categories. It allows for greater specialization and focus on specific types of products. A global organization is a term used to describe a company that operates in multiple countries but is not necessarily organized in a specific way. A geographical organization is a type of international division organized by country or region. An export department is a department within a company that is responsible for managing the exports of goods and services. An international subsidiary is a separate legal entity established in a foreign country.

Question 16

Retailing practices among countries can vary widely.

Accepted Answer

Retailing practices can be influenced by cultural, economic, and regulatory factors, among others, leading to significant variation across countries.

Question 17

It is common that a multinational company eventually creates ________ or subsidiaries to handle all of its international activity.

Accepted Answer

International divisions are commonly established by multinational companies to manage their operations across different countries, centralizing the oversight of international activities separate from domestic operations.

Question 18

Differentiate between standardized global marketing and adapted global marketing. Describe the advantages and disadvantages of each strategy.

Accepted Answer

The answer of Differentiate between standardized global marketing and adapted...

Question 19

The Internet is forcing companies toward more standardized international pricing.

Accepted Answer

The internet has made it easier for consumers to compare prices across different countries. As a result, companies are increasingly adopting more standardized international pricing to avoid price discrimination and maintain customer loyalty.

Question 20

Price escalation is caused by transportation costs, tariffs, importer margin, wholesaler margin, and retailer margin. As a result, foreign prices are typically lower than domestic prices for comparable products.

Accepted Answer

Price escalation refers to the increase in the final selling price of goods as they are imported from one country to another, often making foreign prices higher, not lower, than domestic prices due to added costs such as transportation, tariffs, and various margins.

Quiz 15: The Global Marketplace