Question 1

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

Accepted Answer

The answer of When a firm's products sell in foreign...

Question 2

How does using an exporting intermediary limit the risk involved with global marketing?

Accepted Answer

Using an exporting intermediary involves limited risk because the company has no direct investment in the foreign country. The intermediary assumes some of the financial and legal risks associated with global marketing, making it a safer approach for companies that are new to international markets.

Question 3

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

Accepted Answer

Exporting would allow Henderson Synthetics to temporarily "try out" international markets with minimal commitment and cost. Exporting involves selling products directly to foreign customers or intermediaries, such as distributors or importers, without establishing a physical presence in the foreign market. This would allow Henderson Synthetics to test the demand for their products in other countries without investing in expensive market research or establishing joint ventures, subsidiaries, or licensing agreements.

Question 4

The World Trade Organization accomplishes all of the following except

Accepted Answer

The World Trade Organization does not lend money to businesses interested in developing international markets. It mainly focuses on promoting free trade through various means such as educating companies on international trade rules, serving as a forum for trade negotiations, helping settle trade disputes, and providing legal ground rules for international commerce.

Question 5

If Hyundai,a Korean automobile manufacturing firm,started selling its cars at unfairly low prices to Germany,Hyundai would be engaging in

Accepted Answer

Selling products at unfairly low prices in a foreign market is referred to as dumping. It is a form of unfair trade practice that is prohibited by the World Trade Organization (WTO).

Question 6

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)

Accepted Answer

Raytheon is selling its batteries to companies in Spain, which makes it an exporter.

Question 7

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)

Accepted Answer

A trading company typically engages in importing and exporting goods and may also provide additional services such as logistics, financing, and market research. In this scenario, the business is selling the farmers' products in foreign countries and providing consulting, insurance, legal assistance, and warehousing, which fits the definition of a trading company. The other options (B, C, D, E) do not fully capture the range of services provided by the business.

Question 8

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

Accepted Answer

A trading company is a company that connects buyers and sellers in different countries without being involved in the actual production of goods.

Question 9

The purchase of products from a foreign source is called

Accepted Answer

The purchase of products from a foreign source is called importing. Exporting refers to selling products to a foreign market, dumping refers to selling products at a lower price than in the domestic market to gain an unfair advantage, licensing refers to allowing another company to use your intellectual property, and venturing refers to forming a partnership or joint venture with a foreign company.

Question 10

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

Accepted Answer

This type of licensing is known as franchising, where the franchisor grants the right to market its product, use its brand name, and follow its standards in exchange for financial commitment from the franchisee.

Question 11

The role of export agents is to

Accepted Answer

Export agents act as intermediaries between domestic companies and foreign buyers. Their main role is to bring buyers and sellers from different countries together and facilitate the sales process. In return for their services, they receive a commission based on the value of the sales they arrange.

Question 12

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

Accepted Answer

The correct order is from the lowest to highest involvement: domestic marketing, limited exporting, international marketing, globalized marketing. Choice E is the only option that lists the levels in this order.

Question 13

The Grummond Group buys air conditioner components in industrialized countries and sells them to business customers in developing countries where the air conditioners are assembled.Grummond is most likely classified as a(n)

Accepted Answer

Grummond Group is primarily involved in importing and exporting of goods, and is functioning as a middleman between suppliers and buyers. Thus, it is best classified as a trading company. The other options, such as strategic alliance, joint venture, licensee, and exporter, do not accurately describe Grummond's role in the supply chain.

Question 14

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

Accepted Answer

A trading company is specifically defined as an organization that connects buyers and sellers in different countries, but does not directly engage in the manufacturing or production of goods. Exporters, joint ventures, strategic alliances, and licensees may also engage in manufacturing or production, making them less appropriate choices for this definition.

Question 15

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

Accepted Answer

The answer of What level of commitment in international marketing...

Question 16

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

Accepted Answer

Licensing is a type of arrangement where a company grants the right to use its intellectual property (patents, trademarks, copyrights, etc.) to another company in exchange for a fee or royalty. In this case, Caterpillar could license its knowledge and technology to a Malaysian operation, allowing them to produce and market its products while maintaining control over its intellectual property. This would allow Caterpillar to enter the Malaysian market without making a direct investment.

Question 17

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

Accepted Answer

Exxon is buying crude oil from Saudi Arabia and bringing it into the United States, which is importing.

Question 18

Questor Corporation owns the Spalding brand name but does not produce a single golf club or tennis ball.This arrangement is an example of what type of involvement level for international marketing?

Accepted Answer

This arrangement is an example of licensing, where Questor Corporation allows another company to use their brand name in exchange for royalty payments or other forms of compensation.

Question 19

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

Accepted Answer

The WTO (World Trade Organization) is the global organization that regulates trade between countries. It is responsible for enforcing international trade agreements and provides a forum for negotiating new ones. The GATT (General Agreement on Tariffs and Trade) is a predecessor to the WTO that established rules for international trade in 1947, but it was replaced by the WTO in 1995. While the UN (United Nations) and regional organizations like MERCOSUR and APEC may address trade policies, they do not provide the legal ground rules for international commerce like the WTO does.

Question 20

High Plains Furnishings,a furniture manufacturer in southern Montana,markets its furniture products in markets within the United States.It has also found several niche target markets in Finland,Chile,and Argentina.High Plains Furnishings is engaging in

Accepted Answer

The answer of High Plains Furnishings,a furniture manufacturer in southern...

Quiz 9: Reaching Global Markets