Question 1

Boeing Company has spent more than $100 million to create a major presence in China,complete with a major office complex,a large spare-parts facility,extra training programs for Chinese air crews,and a deal to buy fuselage sections for the 737 from local manufacturers.Asia is the fastest-growing aircraft market in the world.Asian carriers have been a major part of Boeing's sales;Boeing predicts 40 percent of future air-traffic growth will come from Asia-Pacific travel,and it wants those passengers flying on Boeing jets.So Boeing is jointly designing and building an American-Japanese-Chinese plane,all to lock out any European,South American,or even Asian threat to its market.To keep the fate of Asian aerospace in its hands,Boeing is steadily broadening its contractual relationship with Japan's three major players,Mitsubishi Heavy Industries,Kawasaki Heavy Industries,and Fuji Heavy Industries.The Japanese "heavies" make part of the airframe of the Boeing 767 and 20 percent of Boeing's newest plane,the 777.This strategy should ensure Boeing's dominance in Japan.
-Refer to Boeing Company.The new American-Japanese-Chinese plane Boeing plans to design and build gives partial ownership to the manufacturing partners involved in the project.What is this an example of?
A)direct investment
B)a joint venture
C)buying-for-export agreements
D)a contract manufacturing agreement

Accepted Answer

A joint venture is a business partnership in which two or more parties join together to undertake a specific project or business activity. In this case, Boeing is partnering with American, Japanese, and Chinese companies to design and build a new airplane, and the partnership involves partial ownership for the manufacturing partners. This fits the definition of a joint venture.

Question 2

A price war began in Japan in the personal computer market when Dell,Inc.introduced PCs at prices 25 to 60 percent lower than rivals.Dell targeted corporate customers from its Tokyo offices by "direct sales," the company's preferred name for mail order and its main avenue for PC sales in North America.Japan is the world's second-largest market for personal computers and had been ruled by NEC Corporation,which maintained a strong dealer network and had traditionally sold its computers at very high prices.Dell joined IBM and Compaq in targeting the Japanese market.Dell bet it could succeed in Japan by transplanting its North American method of operations in which the company assembles the PC to customer specifications,loads it with software,and delivers it to the customer.The company's success depended on its ability to sell PCs over the telephone.Analysts doubted this was possible in Japan because dealer networks are the key to the market,but Dell executives believed name recognition was the main hurdle.To familiarize its target market with the idea of buying a computer sight unseen,Dell launched a major ad campaign through direct mail and ads in computer-related magazines and newspapers.
-Refer to Computer Sales.Dell's decision to market PCs by phone in Japan mirrors its marketing strategy in North America.This suggests Dell believes in which concept?
A)cultural marketing
B)global marketing standardization
C)traditional marketing concepts
D)combination marketing

Accepted Answer

Firms practising global marketing standardization produce "globally standardized products" to be sold the same way all over the world.

Question 3

A Brazilian-based office supply distributor wishes to close a deal for advertising space in a major Argentine newspaper.The office supply distributor is strapped for cash but would like to run weekly quarter-page ads in the newspaper.The newspaper needs office supplies for its employees.The Brazilian supplier knows the Argentine economy is going through a period of inflation and the value of its money is falling.Which of the following strategies should the Brazilian office supply distributor implement?
A)Let the Argentine newspaper pay for its office supplies in Argentine currency over a period of years.
B)Don't close the deal because the Argentines don't have any way to pay.
C)Use a countertrade agreement.
D)Create a general trade agreement with the Argentine newspaper.

Accepted Answer

Trade not based on the exchange of currency is a countertrade.

Question 4

A price war began in Japan in the personal computer market when Dell,Inc.introduced PCs at prices 25 to 60 percent lower than rivals.Dell targeted corporate customers from its Tokyo offices by "direct sales," the company's preferred name for mail order and its main avenue for PC sales in North America.Japan is the world's second-largest market for personal computers and had been ruled by NEC Corporation,which maintained a strong dealer network and had traditionally sold its computers at very high prices.Dell joined IBM and Compaq in targeting the Japanese market.Dell bet it could succeed in Japan by transplanting its North American method of operations in which the company assembles the PC to customer specifications,loads it with software,and delivers it to the customer.The company's success depended on its ability to sell PCs over the telephone.Analysts doubted this was possible in Japan because dealer networks are the key to the market,but Dell executives believed name recognition was the main hurdle.To familiarize its target market with the idea of buying a computer sight unseen,Dell launched a major ad campaign through direct mail and ads in computer-related magazines and newspapers.
-Refer to Computer Sales.Dell believed it would have a competitive advantage in Japan due to which of the marketing mix elements?
A)product
B)use of publicity
C)pricing strategy
D)use of direct marketing

Accepted Answer

Dell allows its computer buyers to personalize each of the computers it sells.

Question 5

A price war began in Japan in the personal computer market when Dell,Inc.introduced PCs at prices 25 to 60 percent lower than rivals.Dell targeted corporate customers from its Tokyo offices by "direct sales," the company's preferred name for mail order and its main avenue for PC sales in North America.Japan is the world's second-largest market for personal computers and had been ruled by NEC Corporation,which maintained a strong dealer network and had traditionally sold its computers at very high prices.Dell joined IBM and Compaq in targeting the Japanese market.Dell bet it could succeed in Japan by transplanting its North American method of operations in which the company assembles the PC to customer specifications,loads it with software,and delivers it to the customer.The company's success depended on its ability to sell PCs over the telephone.Analysts doubted this was possible in Japan because dealer networks are the key to the market,but Dell executives believed name recognition was the main hurdle.To familiarize its target market with the idea of buying a computer sight unseen,Dell launched a major ad campaign through direct mail and ads in computer-related magazines and newspapers.
-Refer to Computer Sales.Which method of entry has Dell chosen for the foreign market?
A)dumping
B)contract manufacturing
C)joint venture
D)direct investment

Accepted Answer

Dell manufactured and marketed its PCs from its Japanese offices.This suggests the firm has entered the market via direct investment.

Question 6

A price war began in Japan in the personal computer market when Dell,Inc.introduced PCs at prices 25 to 60 percent lower than rivals.Dell targeted corporate customers from its Tokyo offices by "direct sales," the company's preferred name for mail order and its main avenue for PC sales in North America.Japan is the world's second-largest market for personal computers and had been ruled by NEC Corporation,which maintained a strong dealer network and had traditionally sold its computers at very high prices.Dell joined IBM and Compaq in targeting the Japanese market.Dell bet it could succeed in Japan by transplanting its North American method of operations in which the company assembles the PC to customer specifications,loads it with software,and delivers it to the customer.The company's success depended on its ability to sell PCs over the telephone.Analysts doubted this was possible in Japan because dealer networks are the key to the market,but Dell executives believed name recognition was the main hurdle.To familiarize its target market with the idea of buying a computer sight unseen,Dell launched a major ad campaign through direct mail and ads in computer-related magazines and newspapers.
-Refer to Computer Sales.The fact that Japanese consumers do not buy through the methods typically used by Dell is an example of how the global marketing is influenced by which environmental influence?
A)legal
B)economic
C)technological
D)cultural

Accepted Answer

Culture is a shared set of values that determines what is socially acceptable.

Question 7

Which of the following statements best describes the use of the Internet in global marketing?
A)Global consumers are much more interested in buying quality than finding a bargain when they shop on the Internet.
B)The new Internet economy is being restrained by the old bricks-and-mortar rules,regulations,and habits.
C)Businesses are not shopping at Internet websites.
D)Buyers at Internet sites avoid trade restrictions.

Accepted Answer

Europeans in particular like the Internet because of its bargains.Trade restrictions have caused some businesses to rethink their Internet marketing strategies.

Question 8

CNS,Inc.is the manufacturer of Breathe Right nasal strips,a spring-loaded adhesive device that can be stuck on your nose to open up the nasal passages.Since their introduction,Breathe Right strips have been used by athletes hoping to improve their performance through increased oxygen flow,snorers hoping for a sound night's sleep,and allergy and cold sufferers looking for relief from their stuffed noses.Because CNS is a small company,it initially had trouble promoting its product.Then San Francisco 49er Jerry Rice started regularly wearing one,and U.S.sales took off.Today,Breathe Right strips are marketed in more than 40 countries.When CNS decided to expand globally,its size made it look for a partner.It chose 3M because 3M already had a global market distribution system and because the Breathe Right strips complemented the 3M first-aid product line.
-Refer to Breathe Right.In Canada,one of the standard methods for introducing a new product is couponing,but many countries prohibit the issuing of coupons.Which element of the global environment would this prohibition represent?.
A)cultural
B)economic
C)legal
D)demographic

Accepted Answer

The prohibition on issuing coupons in certain countries represents a legal element of the global environment. Legal factors vary across countries and can impact marketing strategies and product promotions.

Question 9

CNS,Inc.is the manufacturer of Breathe Right nasal strips,a spring-loaded adhesive device that can be stuck on your nose to open up the nasal passages.Since their introduction,Breathe Right strips have been used by athletes hoping to improve their performance through increased oxygen flow,snorers hoping for a sound night's sleep,and allergy and cold sufferers looking for relief from their stuffed noses.Because CNS is a small company,it initially had trouble promoting its product.Then San Francisco 49er Jerry Rice started regularly wearing one,and U.S.sales took off.Today,Breathe Right strips are marketed in more than 40 countries.When CNS decided to expand globally,its size made it look for a partner.It chose 3M because 3M already had a global market distribution system and because the Breathe Right strips complemented the 3M first-aid product line.
-Refer to Breathe Right.The same Breathe Right nasal strip you can buy in any pharmacy in North America can also be purchased in 40 other countries.Which type of strategy did CNS use?
A)mass marketing
B)product invention
C)market substitution
D)global market standardization

Accepted Answer

CNS used a global market standardization strategy by expanding globally and partnering with 3M, which already had a global market distribution system. This allowed CNS to market its product in over 40 countries.

Question 10

Boeing Company has spent more than $100 million to create a major presence in China,complete with a major office complex,a large spare-parts facility,extra training programs for Chinese air crews,and a deal to buy fuselage sections for the 737 from local manufacturers.Asia is the fastest-growing aircraft market in the world.Asian carriers have been a major part of Boeing's sales;Boeing predicts 40 percent of future air-traffic growth will come from Asia-Pacific travel,and it wants those passengers flying on Boeing jets.So Boeing is jointly designing and building an American-Japanese-Chinese plane,all to lock out any European,South American,or even Asian threat to its market.To keep the fate of Asian aerospace in its hands,Boeing is steadily broadening its contractual relationship with Japan's three major players,Mitsubishi Heavy Industries,Kawasaki Heavy Industries,and Fuji Heavy Industries.The Japanese "heavies" make part of the airframe of the Boeing 767 and 20 percent of Boeing's newest plane,the 777.This strategy should ensure Boeing's dominance in Japan.
-Refer to Boeing Company.Which method of entering the Chinese market has Boeing chosen?
A)dumping
B)contract manufacturing
C)licensing
D)direct investment

Accepted Answer

Boeing invested more than $100 million to open a new headquarters and establish manufacturing capability in China.This is direct investment.

Question 11

Boeing Company has spent more than $100 million to create a major presence in China,complete with a major office complex,a large spare-parts facility,extra training programs for Chinese air crews,and a deal to buy fuselage sections for the 737 from local manufacturers.Asia is the fastest-growing aircraft market in the world.Asian carriers have been a major part of Boeing's sales;Boeing predicts 40 percent of future air-traffic growth will come from Asia-Pacific travel,and it wants those passengers flying on Boeing jets.So Boeing is jointly designing and building an American-Japanese-Chinese plane,all to lock out any European,South American,or even Asian threat to its market.To keep the fate of Asian aerospace in its hands,Boeing is steadily broadening its contractual relationship with Japan's three major players,Mitsubishi Heavy Industries,Kawasaki Heavy Industries,and Fuji Heavy Industries.The Japanese "heavies" make part of the airframe of the Boeing 767 and 20 percent of Boeing's newest plane,the 777.This strategy should ensure Boeing's dominance in Japan.
-Refer to Boeing Company.Which method of entering the Japanese market has Boeing chosen?
A)dumping
B)contract manufacturing
C)licensing
D)direct investment

Accepted Answer

Boeing has entered into a contractual agreement with Japanese manufacturers.

Question 12

Boeing Company has spent more than $100 million to create a major presence in China,complete with a major office complex,a large spare-parts facility,extra training programs for Chinese air crews,and a deal to buy fuselage sections for the 737 from local manufacturers.Asia is the fastest-growing aircraft market in the world.Asian carriers have been a major part of Boeing's sales;Boeing predicts 40 percent of future air-traffic growth will come from Asia-Pacific travel,and it wants those passengers flying on Boeing jets.So Boeing is jointly designing and building an American-Japanese-Chinese plane,all to lock out any European,South American,or even Asian threat to its market.To keep the fate of Asian aerospace in its hands,Boeing is steadily broadening its contractual relationship with Japan's three major players,Mitsubishi Heavy Industries,Kawasaki Heavy Industries,and Fuji Heavy Industries.The Japanese "heavies" make part of the airframe of the Boeing 767 and 20 percent of Boeing's newest plane,the 777.This strategy should ensure Boeing's dominance in Japan.
-Refer to Boeing Company.The Boeing facility in China is only one branch of this huge organization.What can Boeing be called?
A)a domestic trader
B)a cultural trader
C)a multinational corporation
D)an export agent

Accepted Answer

Boeing is heavily involved in international marketing and sales worldwide and is a multinational organization.

Question 13

CNS,Inc.is the manufacturer of Breathe Right nasal strips,a spring-loaded adhesive device that can be stuck on your nose to open up the nasal passages.Since their introduction,Breathe Right strips have been used by athletes hoping to improve their performance through increased oxygen flow,snorers hoping for a sound night's sleep,and allergy and cold sufferers looking for relief from their stuffed noses.Because CNS is a small company,it initially had trouble promoting its product.Then San Francisco 49er Jerry Rice started regularly wearing one,and U.S.sales took off.Today,Breathe Right strips are marketed in more than 40 countries.When CNS decided to expand globally,its size made it look for a partner.It chose 3M because 3M already had a global market distribution system and because the Breathe Right strips complemented the 3M first-aid product line.
-Refer to Breathe Right.What did 3M and CNS enter?
A)a franchise
B)a licensing agreement
C)a contract manufacturing agreement
D)a joint venture

Accepted Answer

CNS and 3M entered into a joint venture, as 3M had the global market distribution system and the Breathe Right strips complemented 3M's first-aid product line.

Question 14

CNS,Inc.is the manufacturer of Breathe Right nasal strips,a spring-loaded adhesive device that can be stuck on your nose to open up the nasal passages.Since their introduction,Breathe Right strips have been used by athletes hoping to improve their performance through increased oxygen flow,snorers hoping for a sound night's sleep,and allergy and cold sufferers looking for relief from their stuffed noses.Because CNS is a small company,it initially had trouble promoting its product.Then San Francisco 49er Jerry Rice started regularly wearing one,and U.S.sales took off.Today,Breathe Right strips are marketed in more than 40 countries.When CNS decided to expand globally,its size made it look for a partner.It chose 3M because 3M already had a global market distribution system and because the Breathe Right strips complemented the 3M first-aid product line.
-Refer to Breathe Right.What is 3M an example of?
A)an ethnocentric organization
B)a standard international corporation
C)a multinational corporation
D)an expatriated organization

Accepted Answer

3M is a multinational corporation, as it has operations and marketing activities in multiple countries around the world.

Question 15

CNS,Inc.is the manufacturer of Breathe Right nasal strips,a spring-loaded adhesive device that can be stuck on your nose to open up the nasal passages.Since their introduction,Breathe Right strips have been used by athletes hoping to improve their performance through increased oxygen flow,snorers hoping for a sound night's sleep,and allergy and cold sufferers looking for relief from their stuffed noses.Because CNS is a small company,it initially had trouble promoting its product.Then San Francisco 49er Jerry Rice started regularly wearing one,and U.S.sales took off.Today,Breathe Right strips are marketed in more than 40 countries.When CNS decided to expand globally,its size made it look for a partner.It chose 3M because 3M already had a global market distribution system and because the Breathe Right strips complemented the 3M first-aid product line.
-Refer to Breathe Right.How people value a sound night's sleep is an example of which element of the global environment?
A)culture
B)natural
C)socioeconomic
D)technical

Accepted Answer

The example of people valuing a sound night's sleep relates to cultural factors in the global environment, as different cultures may place varying levels of importance on sleep and may have different attitudes and practices related to sleep.

Question 16

Having a global vision means management recognizes and reacts to international marketing opportunities,is aware of threats from foreign competitors in all markets,and effectively utilizes international distribution networks.

Accepted Answer

A global vision involves recognizing and reacting to international marketing opportunities, being aware of threats from foreign competitors, and effectively utilizing international distribution networks.

Question 17

CNS,Inc.is the manufacturer of Breathe Right nasal strips,a spring-loaded adhesive device that can be stuck on your nose to open up the nasal passages.Since their introduction,Breathe Right strips have been used by athletes hoping to improve their performance through increased oxygen flow,snorers hoping for a sound night's sleep,and allergy and cold sufferers looking for relief from their stuffed noses.Because CNS is a small company,it initially had trouble promoting its product.Then San Francisco 49er Jerry Rice started regularly wearing one,and U.S.sales took off.Today,Breathe Right strips are marketed in more than 40 countries.When CNS decided to expand globally,its size made it look for a partner.It chose 3M because 3M already had a global market distribution system and because the Breathe Right strips complemented the 3M first-aid product line.
-Refer to Breathe Right.To market the nasal strips in countries outside North America,CNS and 3M provided the strips to national sports teams.For example,sales in South Africa took off when the entire South African rugby team wore the strips when they won the World Cup of rugby.This example primarily illustrates the use of which element of the global marketing mix?
A)production
B)publicity
C)promotion
D)distribution

Accepted Answer

This example primarily illustrates the use of promotion in the global marketing mix, as CNS and 3M provided the strips to national sports teams to increase awareness and sales.

Question 18

Goodyear Tire and Rubber Company provided China with the materials and training needed to establish a printing plant in exchange for finished labels that Goodyear attaches to its tires.What is this an example of?
A)exchange control
B)price control
C)exchange adaptation
D)countertrade

Accepted Answer

In countertrading,all or part of the payment for goods or services is in the form of other goods.

Question 19

Boeing Company has spent more than $100 million to create a major presence in China,complete with a major office complex,a large spare-parts facility,extra training programs for Chinese air crews,and a deal to buy fuselage sections for the 737 from local manufacturers.Asia is the fastest-growing aircraft market in the world.Asian carriers have been a major part of Boeing's sales;Boeing predicts 40 percent of future air-traffic growth will come from Asia-Pacific travel,and it wants those passengers flying on Boeing jets.So Boeing is jointly designing and building an American-Japanese-Chinese plane,all to lock out any European,South American,or even Asian threat to its market.To keep the fate of Asian aerospace in its hands,Boeing is steadily broadening its contractual relationship with Japan's three major players,Mitsubishi Heavy Industries,Kawasaki Heavy Industries,and Fuji Heavy Industries.The Japanese "heavies" make part of the airframe of the Boeing 767 and 20 percent of Boeing's newest plane,the 777.This strategy should ensure Boeing's dominance in Japan.
-Refer to Boeing Company.Boeing has utilized a global vision in marketing its planes in Asia.The company realizes different countries require different strategies but that effective global marketing is a key to success.What is Boeing practising?
A)global marketing
B)standard international marketing
C)global marketing standardization
D)international marketing vision

Accepted Answer

Boeing is practising global marketing by utilizing a global vision to effectively market goods and services across national boundaries.

Question 20

A price war began in Japan in the personal computer market when Dell,Inc.introduced PCs at prices 25 to 60 percent lower than rivals.Dell targeted corporate customers from its Tokyo offices by "direct sales," the company's preferred name for mail order and its main avenue for PC sales in North America.Japan is the world's second-largest market for personal computers and had been ruled by NEC Corporation,which maintained a strong dealer network and had traditionally sold its computers at very high prices.Dell joined IBM and Compaq in targeting the Japanese market.Dell bet it could succeed in Japan by transplanting its North American method of operations in which the company assembles the PC to customer specifications,loads it with software,and delivers it to the customer.The company's success depended on its ability to sell PCs over the telephone.Analysts doubted this was possible in Japan because dealer networks are the key to the market,but Dell executives believed name recognition was the main hurdle.To familiarize its target market with the idea of buying a computer sight unseen,Dell launched a major ad campaign through direct mail and ads in computer-related magazines and newspapers.
-Refer to Computer Sales.Dell is dedicated to entering the Japanese market.Company executives believe name recognition is the largest marketing issue.What should be the first step in creating the international marketing mix?
A)marketing research
B)selecting the method of promotion
C)creating a new product
D)setting pricing policies

Accepted Answer

Although Dell executives believe name recognition is the key problem,this should be confirmed with marketing research.Also,customer needs and wants must be established to guide decisions about the marketing mix variables.

Quiz 20: Developing a Global Vision

Which of the following statements best describes the use of the Internet in global marketing?

Having a global vision means management recognizes and reacts to international marketing opportunities,is aware of threats from foreign competitors in all markets,and effectively utilizes international distribution networks.

Goodyear Tire and Rubber Company provided China with the materials and training needed to establish a printing plant in exchange for finished labels that Goodyear attaches to its tires.What is this an example of?