Question 1

A country that is primarily dependent on agriculture and has high illiteracy rates is in the _______ stage of development.

Accepted Answer

Stage 1: The traditional society (for example, Sudan). Dependent on agriculture as the primary driver of the economy, these economies lack the capabilities to industrialize. Illiteracy is high, which hinders advances in technology.

Question 2

In an economy where the population has met basic needs and seeks to spend large discretionary income on products that improve quality of life,the country is in the ______ stage of economic development.

Accepted Answer

Stage 5: High mass consumption (for example, Germany). Consumption patterns shift as consumers demand higher levels of service and more durable goods. Income levels rise, creating a large population with discretionary income. Put another way, people are no longer concerned with simply surviving (food, shelter) but, rather, seek products and services that enhance the quality of their life. In other words, products are not needed but wanted.

Question 3

Shade Tree Auto Parts Co.wants to enter the Russian market.Russian law prevents foreign entities from owning a majority position in a company there.The best method of entry for Shade Tree is _________.

Accepted Answer

A specific type of strategic alliance called joint venture enables many companies to enter a market that would otherwise be closed because of legal restrictions or cultural barriers. Additionally, like all strategic alliances, it reduces risk by spreading risk to other partners.

Question 4

China would be classified as being in the __________ stage of development.

Accepted Answer

Stage 4: Maturity (for example, China). The economy, through private and public investments, seeks to maintain growth rates. As the economy grows, investments focus on expanding the infrastructure (technology and communications networks) to attract additional industrial investment. At this point, local companies begin to look outward and enter the global marketplace.

Question 5

_________ is not an advantage to franchising as a market entry strategy.

Accepted Answer

Combining low capital investments, rapid expansion opportunities, and local market expertise, franchising offers many advantages as a market entry strategy. However, there are also challenges. Worldwide, consumer tastes vary significantly and franchisers need sufficient resources to create products that will meet demands of global customers while maintaining quality control.

Question 6

A marketing manager must evaluate global market opportunities that will allow the firm to utilize its strengths and minimize its weaknesses.A firm must be particularly strong in ___________ to succeed in expanding to global markets.

Accepted Answer

As a marketing manager you will need to evaluate global market opportunities against key company characteristics to look for markets that maximize the company's strengths while minimizing weaknesses. Moving into new foreign markets brings greater risk to the company. As a result, decision makers must consider whether their company philosophy, personnel skill sets (principally in critical areas such as marketing and logistics).

Question 7

A country that invests heavily in infrastructure,receives investment from foreign governments,and is attractive to firms seeking first-mover advantage is in the _______ stage of development.

Accepted Answer

Stage 2: Preconditions for take-off (for example, Romania). In these economies, new investments in infrastructure (transportation, communication, education, and health care) create the foundation for growth and encourage industrial expansion. Often these changes are driven by investments from private organizations (foreign companies looking to expand operations).

Question 8

The most successful regional market zone is ______.

Accepted Answer

The European Union is the most successful regional market zone and it is also one of the oldest.

Question 9

NAFTA is a market zone that eliminates tariffs between the United States and _______.

Accepted Answer

NAFTA is the North American Free Trade Agreement and it specifically eliminates tariffs between the United States and its neighboring countries of Canada and Mexico. The other options include additional countries that are not included in NAFTA.

Question 10

__________ is(are)not one of the forces that drive countries to form regional market zones.

Accepted Answer

Regional market zones generally form as a result of four forces. The first and most fundamental factor is economic. Second, research suggests geographic proximity to other alliance partners is advantageous in the development of a market zone. The third factor is political. Culture similarities, such as having a shared language, among alliance partners also facilitate markets zones as shared cultural experiences encourage greater cooperation and minimize possible conflicts from cultural disparities.

Question 11

MERCOSUR is a regional market zone in ________.

Accepted Answer

NAFTA is not the only market zone in the Americas. MERCOSUR, the most powerful market zone in South America, was inaugurated in 1995 and includes the economies of South America: Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay.

Question 12

A country whose economy transitions from agricultural to industrial and has skilled industries such as banking or technology-based industries is in the _______ stage of development.

Accepted Answer

Stage 3: Take-off (for example, the Czech Republic). The investments in infrastructure yield sustainable economic growth, which makes an economy look much more attractive to foreign investors. The economy transitions from agricultural to industrial.

Question 13

Romania would be classified as being in the __________ stage of development.

Accepted Answer

Stage 2: Preconditions for take-off (for example, Romania). In these economies, new investments in infrastructure (transportation, communication, education, and health care) create the foundation for growth and encourage industrial expansion. Often these changes are driven by investments from private organizations (foreign companies looking to expand operations).

Question 14

A technology or high-end industrial product company is most likely to use a(n)______ in foreign markets because customers expect the expertise of highly trained,accessible personnel.

Accepted Answer

For some industries, creating a direct sales force is required because customers will demand that company salespeople be in the country. This is often the case in the technology and high-end industrial product industries.

Question 15

_____________ represent the exporting firm in foreign markets.They are the face of the company through servicing customers,selling products,and taking payment.They often take title to goods and resell them.

Accepted Answer

Distributors represent the company and often many others in foreign markets. These organizations become the face of the company in that country, servicing customers, selling products, and receiving payments. In many cases, they take title to the goods and then resell them.

Question 16

Herbie recently read that Crane Airways of Japan,Kestral Airlines of Germany,Heron Air of Australia,and Egret Airways of India have code sharing,which allow passengers to fly on any of the airlines,share frequent flyer miles,and give each other logistical support.Herbie had just learned in his Global Marketing class that this arrangement is known as a _________.

Accepted Answer

A specific type of strategic alliance called joint venture enables many companies to enter a market that would otherwise be closed because of legal restrictions or cultural barriers. Additionally, like all strategic alliances, it reduces risk by spreading risk to other partners.

Question 17

The ___________ industry best illustrates the power of strategic alliances.

Accepted Answer

In some industries, strategic alliances now dominate the competitive landscape. Nowhere is this more noticeable than the airline industry.

Question 18

___________ is the most common method for entering foreign markets and accounts for ________ of all global economic activity.

Accepted Answer

Exporting is the most common method for entering foreign markets and accounts for 10 percent of all global economic activity.

Question 19

The Czech Republic would be classified as being in the __________ stage of development.

Accepted Answer

Stage 3: Take-off (for example, the Czech Republic). The investments in infrastructure yield sustainable economic growth, which makes an economy look much more attractive to foreign investors. The economy transitions from agricultural to industrial. Banking systems, technology industries, and other "skilled" industries come into the market as business opportunities increase.

Question 20

Advantages to licensing as a market entry strategy do not include ___________.

Accepted Answer

Licensing is a contractual agreement which transmits something of value such as technology, a trademark, a patent, or a unique manufacturing process in return for financial compensation in the form of a licensing fee or percentage of sales. In licensing, companies can choose to license their key asset to another company, effectively giving the company the right to use that asset in that market.

Quiz 15: Understand the Global Marketplace: Marketing Without Borders