Question 1

Which of the following is true about the market entry strategy of direct investment?

Accepted Answer

Direct investment allows a foreign firm to establish its own operations in a target country, which means it can take advantage of a domestic company's political savvy and market position, making option A the correct choice. Option B is incorrect because export merchants are not usually involved in direct investment strategies. Option C is incorrect because direct investment typically involves a significant level of risk due to the amount of resources required to enter a new market. Option D is incorrect because direct investment does not rely on intermediaries. Option E is incorrect because direct investment provides a high level of control for a firm.

Question 2

All of the following are barriers to successful exporting except ________.

Accepted Answer

Export merchants are not a barrier to successful exporting, but rather a facilitator as they specialize in handling and facilitating international trade transactions. Tariffs, local content laws, import quotas, and economic sanctions are all barriers to exporting that can hinder a company's ability to successfully enter foreign markets.

Question 3

Briefly describe the three stages of the business cycle that all economies go through.

Accepted Answer

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Question 4

When considering the four Ps in international marketing, advocates of ________ focus on the similarities among cultures and argue that basic needs and wants are the same everywhere.

Accepted Answer

Standardization advocates believe that there are similarities among cultures and basic needs and wants remain the same everywhere, so they suggest that companies should use a standardized marketing mix across all international markets.

Question 5

Marketers monitor the technological environment. How can changes in technology affect marketing communication strategy? Provide at least two examples.

Accepted Answer

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Question 6

Toyota opened manufacturing plants in the United States and hires local workers to run these locations. Explain what the local content rules have to do with Toyota increasing its presence in the United States.

Accepted Answer

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Question 7

The Federal Trade Commission (FTC) ordered KFC to stop running ads with false claims that its fried chicken is compatible with certain weight loss programs. What law gives the FTC the authority to stop KFC's marketing program and what law was KFC violating?

Accepted Answer

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Question 8

The ViVi brand is a line of designer clothing for pregnant businesswomen. If its owner believes that professional women in other countries have a need for conservative maternity wear, the owner of the small company would most likely hire a(n) ________ to locate and negotiate with buyers in other countries.

Accepted Answer

An export merchant is an intermediary who facilitates the export of goods for a fee. The ViVi brand owner can hire an export merchant to locate and negotiate with buyers in other countries, as they specialize in international trade and have knowledge of foreign markets. This would be the easiest and most cost-effective way for a small company like ViVi to expand globally without having to establish a physical presence in other countries. The other options (franchisee, franchisor, strategic ally, and joint venture partner) are more suited for businesses that are looking to establish a long-term presence in foreign markets, which may not be feasible or desirable for ViVi.

Question 9

A ________ exists when an unauthorized party imports products and then sells them for a fraction of the price of authorized products.

Accepted Answer

A gray market exists when an unauthorized party imports products and then sells them for a fraction of the price of authorized products. This can occur when products are sold in countries with lower prices, and then imported and resold in countries with higher prices. It is not a black market, which involves illegal goods or activities, nor is it a dual distribution system or disintermediation system.

Question 10

How has the Group of Seven (G7) recently expanded the issues it discusses in its annual summits?

Accepted Answer

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Question 11

After exporting, the next level of commitment a firm can make to a foreign market is a contractual agreement. Two of the most common types of such agreements are ________.

Accepted Answer

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Question 12

A firm would be most likely to use backward invention in which of the following situations?

Accepted Answer

Backward invention involves simplifying a product to meet the needs of consumers in a lower-income, less developed country. This strategy is ideal when a firm is entering a foreign market that demands a less complex product than what is sold in its current markets. Therefore, Option A is the correct answer. Option B is incorrect, as relying on a straight extension strategy means simply offering the same product in both domestic and foreign markets without altering it. Options C, D and E are also incorrect, as these situations do not require or relate to backward invention.

Question 13

What are the two purposes of the laws governing American business? Describe how at least two regulatory agencies fulfill these purposes.

Accepted Answer

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Question 14

When considering the four Ps in international marketing, advocates of ________ focus on the unique characteristics of cultures and argue for products and promotional messages tailored to each culture.

Accepted Answer

Localization is the approach that focuses on adapting product features and promotional messages to meet specific cultural preferences and norms. This recognizes the importance of cultural differences in shaping consumer behavior and preferences. Nationalization, on the other hand, is the extension of domestic marketing strategies to international markets without regard for cultural differences, while standardization is the use of the same marketing mix elements across different countries. Expropriation refers to the government seizure of foreign assets, and ethnocentrism is the belief in the superiority of one's own culture.

Question 15

Compare the three product strategy choices a firm like General Electric has when selling in foreign markets.

Accepted Answer

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Question 16

Companies need to understand the differences in the cultures in which they operate. Explain the terms cultural values and social norms, giving an example of each.

Accepted Answer

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Question 17

In a ________, a firm gives another firm the right to produce and market its product in a specific country or region in return for royalties on goods sold.

Accepted Answer

This describes a licensing agreement, which involves granting permission for another firm to produce and market a product in a specific region or country. The original firm receives royalties on the goods sold, but does not have any ownership or direct control over the operations.

Question 18

Many countries outlaw ________, a practice in which a company prices its products lower than they are priced at home.

Accepted Answer

Dumping refers to the practice of a company pricing its products lower in a foreign market than in its domestic market. This can harm domestic producers in the foreign market and can be seen as anti-competitive, which is why many countries outlaw this practice. Gray marketing, parallel importing, black marketing, and countertrading refer to different practices and are not necessarily outlawed in all countries.

Question 19

The telephone system in Argentina is antiquated and is just starting to work properly after years of neglect by the government. What does this tell a marketer about Argentina, and why would a marketer need to know this?

Accepted Answer

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Question 20

Franchising is a form of ________.

Accepted Answer

Franchising is a form of licensing, where the franchisor grants the franchisee the right to use its trademark, products, and business processes in exchange for a fee or royalty. The franchisor provides branding, training, and support to the franchisee, but the franchisee operates independently.

Quiz 2: Global, Ethical, and Sustainable Marketing