Question 1

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

Accepted Answer

The answer of Over the next ten years, the market...

Question 2

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

Accepted Answer

Industrialized countries typically have a high standard of living, which means consumers have more disposable income to spend on goods and services, making them attractive target markets.

Question 3

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

Accepted Answer

In industrialized countries, central air conditioning is more commonly found in residential settings, making it a consumer good. This is due to higher average incomes and a greater focus on home comfort.

Question 4

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.

Accepted Answer

In the short run, consumer-goods manufacturers often see greater sales in industrialized countries due to higher disposable incomes and established markets. In the long run, however, less-developed countries offer greater sales potential due to their growing populations and rising incomes, which can lead to an expanding consumer base.

Question 5

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.

Accepted Answer

The answer of A firm seeking untapped markets with the...

Question 6

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

Accepted Answer

Less-developed countries typically have the poorest physical distribution facilities due to limited infrastructure, such as roads, ports, and communication systems, which are essential for efficient distribution.

Question 7

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)?

Accepted Answer

When a foreign currency is devalued by 50% relative to the U.S. dollar, the value of sales made in that currency, when converted to U.S. dollars for reporting purposes, will effectively be halved, resulting in a 50% reduction in reported sales.

Question 8

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?

Accepted Answer

Industrialized countries are generally more economically stable and have stronger financial systems, which makes currency devaluations less likely compared to underdeveloped, developing, or less-developed countries.

Question 9

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?

Accepted Answer

Setting all prices in U.S. dollars helps the firm to reduce the risk associated with currency devaluations in foreign countries. By pricing in U.S. dollars, the firm ensures that it receives a consistent amount of its home currency regardless of fluctuations in the foreign currency's value.

Question 10

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

Accepted Answer

The answer of A U.S. manufacturer opening a manufacturing plant...

Question 11

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?

Accepted Answer

Local content laws require foreign companies to use a certain percentage of local resources or labor, which can stimulate foreign investment, reduce unemployment, and encourage the growth of local manufacturing industries.

Question 12

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

Accepted Answer

The WTO seeks to promote free trade among all its member nations, not just those within the same economic community.

Question 13

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

Accepted Answer

The EU has implemented measures to reduce delays caused by Customs Office inspections among member countries, aiming to facilitate smoother trade and movement of goods.

Question 14

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?

Accepted Answer

The answer of The firm has low financial resources, and...

Question 15

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.

Accepted Answer

A joint venture allows the manufacturer to comply with local content laws by partnering with a local company, which can help minimize total investment and financial risk while adjusting prices to reflect higher production costs. This approach leverages local expertise and resources, potentially reducing the need for a significant initial investment and spreading the financial risk between the partners.

Question 16

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

Accepted Answer

The answer of Local content laws are best satisfied by...

Question 17

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

Accepted Answer

The standardized approach to international marketing is most appealing to a firm planning to be a low-cost provider because it allows the firm to use the same marketing strategy and mix in multiple markets, leading to economies of scale and lower costs.

Question 18

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

Accepted Answer

The standardized approach to international marketing involves using the same marketing strategy and mix in all of the company's international markets, without adapting to the local cultures. This can lead to insensitivity to a country's cultural environment because it ignores local preferences, customs, and traditions.

Question 19

Which approach to international marketing involves decentralized planning and implementation?

Accepted Answer

The nonstandardized approach to international marketing involves decentralized planning and implementation, allowing for adjustments to local market conditions and preferences.

Question 20

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

Accepted Answer

The nonstandardized approach is the most costly because it requires tailoring marketing strategies to each specific market, leading to higher costs in research, development, and execution.

Quiz 6: Global Aspects of Marketing