Question 1

Franchising is a form of:
A) contract marketing
B) international exporting
C) licensing
D) direct exporting
E) countertrading

Accepted Answer

Franchising is a form of licensing, where a franchisor grants the right to use its brand name, products or services, and operating system to a franchisee in return for a fee and ongoing royalties.

Question 2

Which list correctly ranks the methods of entering the global marketplace in increasing order of risk?
A) exporting, licensing and franchising, contract manufacturing, joint venture, and direct investment
B) importing, contract manufacturing, licensing and franchising, joint venture, and direct investment
C) licensing, franchising, contract manufacturing, joint venture, direct investment, and exporting
D) franchising, contract manufacturing, joint venture, direct investment, importing, and licensing
E) importing, contract manufacturing, joint venture, direct investment, and exporting.

Accepted Answer

Exporting,licensing and franchising,contract manufacturing,joint venture,and direct investment are methods of entering the global marketplace in order of risk.

Question 3

International Marketing,Inc.is a company located in Brazil and assists businesses that export products to Brazil. This company helps with financing,shipping,and any aspect of marketing a product from another country in Brazil. This company is an example of a(n):
A) agent broker
B) export agent
C) export broker
D) buyer for export
E) import broker

Accepted Answer

A export agent is an intermediary who acts like a manufacturer's agent for the exporter and lives in the foreign market.

Question 4

A multinational company that makes a labor-intensive product would be interested in the _____ makeup of countries.Factors such as median age,gender,and literacy rates would determine the success of its global expansion.
A) demographic
B) lifestyle
C) natural
D) cultural
E) economic

Accepted Answer

Demographics include age and educational levels as well as ethnicity and gender.

Question 5

_____ are foreign sales agents-distributors who live in a foreign country and represent a domestic company in sales situations.They perform the same functions as domestic manufacturers' agents who help with financing and shipping.
A) Export agents
B) Export brokers
C) Import broker
D) Buyers for export
E) Licensing agents

Accepted Answer

This is the definition of an export agent.

Question 6

A U.S.licensor can try to prevent a licensee from voiding its contract and using what it has learned to create a competitor by:
A) using lawyers from both countries to write the licensing agreement.
B) insisting that all licensees have a published code of ethics.
C) having the licensee pay a fee for the use of the manufacturing process, trademark, patent, or other proprietary knowledge.
D) locally registering patents and trademarks to the U.S. firm -- not the licensee.
E) avoiding the use of any patents and trademarks.

Accepted Answer

Even with lawyers writing it and a code of ethics,there is nothing to prevent a licensee from voiding the contract.Licensees typically pay a fee or a royalty to the licensor.Without patents and trademarks,protection becomes almost impossible.

Question 7

Disney sells the rights for an investment company to run a Disneyland theme park in Tokyo.The investment company gains most of the profits from the enterprise while paying Disney a percentage in royalties.This is an example of:
A) a joint venture
B) exporting
C) direct investment
D) licensing
E) capital-intensive manufacturing

Accepted Answer

This kind of arrangement is licensing because Disney is only selling the right to run the park.If the investment company does a poor job,Disney can seek out another to replace it.

Question 8

Vast differences in natural resources create all of the following EXCEPT:
A) potential for military intervention
B) shifts in wealth between nations
C) inflation and recession
D) global dependencies
E) export opportunities for countries with no natural resources

Accepted Answer

While differences do create shifts in wealth,dependencies,inflation,recession,and the potential for conflict,they only hinder opportunities for the countries that do not have resources.

Question 9

Which method of entering the global marketplace would be most risky?
A) licensing
B) direct investment
C) contract manufacturing
D) joint ventures
E) exporting

Accepted Answer

See Exhibit 5.4.

Question 10

Which method of entering the global marketplace would be LEAST risky?
A) exporting
B) licensing
C) contract manufacturing
D) joint ventures
E) direct investment

Accepted Answer

See Exhibit 5.4.

Question 11

The role of a domestic company that sells to an export merchant (also called a buyer for export)is to:
A) guide the marketing actions of the merchant as the goods are sold in foreign countries
B) pay all transportation, warehousing, and marketing expenses
C) sell the product to that merchant who resells the product in the foreign country without the aid or input of the original manufacturer
D) broker a partnership agreement such as a joint venture
E) dictate conditions of sale in foreign countries

Accepted Answer

After the manufacturer sells to the export merchant,the manufacturer has no more control or involvement with the product.

Question 12

DeLouis owns an agency that specializes in bringing international buyers in contact with U.S.companies to facilitate global trade. What type of intermediary is DeLouis?
A) buyer for export
B) export broker
C) license agent
D) import agent
E) export agent

Accepted Answer

An export broker is an intermediary who plays the traditional role by bringing buyer and seller together.

Question 13

The _____ is an intermediary in the global market who assumes all risks and sells globally for its own account.The domestic manufacturer usually treats it like a domestic customer.
A) buyer for export
B) export agent
C) joint venturer
D) contract manufacturer
E) market group

Accepted Answer

This is the definition of a buyer for export.

Question 14

_____ is a legal process whereby a firm agrees to let another firm use its manufacturing process,trademarks,patents,trade secrets,or other proprietary knowledge in return for a fee or royalty.
A) A joint venture
B) Divestment
C) Licensing
D) A principal-agent agreement
E) A contract manufacturing arrangement

Accepted Answer

The is the definition of licensing.

Question 15

Patch Products is an Australian company that has given permission to several Latin American companies to manufacture and market its patented Spanish/English children's frame tray puzzles.Because Patch uses licensing as its global marketing strategy,it:
A) must only pay a minimal royalty to the licensed companies
B) cannot control how the puzzles are manufactured
C) has involved itself in the global marketing strategy that gives it the greatest amount of control
D) cannot have any control over how the puzzles are promoted or distributed
E) chose a method of global marketing that created minimal risk

Accepted Answer

A licensing company has control over all of the marketing activities associated with making its product.The licensed company pays the royalty to Patch.

Question 16

When Krispy Kreme decided to expand its operation internationally,it chose to first make its doughnuts available in Canada to minimize its risk.In accordance with the policy of risk minimization,the company sold the right to manufacture and sell its doughnuts to Canadians.In other words,Krispy Kreme used:
A) contract manufacturing
B) direct investment
C) importing
D) a strategic alliance
E) licensing

Accepted Answer

Krispy Kreme used franchising,which is a form of licensing.Franchising offers only slightly more risk than exporting.

Question 17

A(n)_____ is a global intermediary that brings the buyer and seller together.
A) buyer for export
B) export agent
C) license agent
D) import agent
E) export broker

Accepted Answer

An export broker is an intermediary who plays the traditional broker's role by bringing buyer and seller together.

Question 18

Zambia is internationally recognized as the world's second leading producer of cobalt,which is used to make high-speed and high-temperature cutting tools and dyes.A company that wanted to manufacture tools for shaping steel would be most attracted to which element of the Zambian environment?
A) culture
B) legal
C) economic
D) technological
E) natural resources

Accepted Answer

The text concentrates on the importance of petroleum to global marketing,but other minerals are of equal or greater value to some companies.

Question 19

Carlos Hernandez owns a company in Miami that purchases products from U.S.manufacturers for export to several countries in Central and South America. Carlos is a(n):
A) licensing agent
B) buyer for export
C) export broker
D) export agent
E) export importer

Accepted Answer

A buyer for export,also called an export merchant,is usually treated like a domestic customer by the domestic manufacturer because it buys products and sells them globally.

Question 20

The United States is selling more domestically produced products in other countries than any other country in the world.This means the United States is the world leader in:
A) quota making
B) exporting
C) tariff trading
D) dumping
E) licensing

Accepted Answer

Exporting is selling domestically produced products to buyers in another country.

Quiz 5: Developing a Global Vision

Franchising is a form of:

Which list correctly ranks the methods of entering the global marketplace in increasing order of risk?

International Marketing,Inc.is a company located in Brazil and assists businesses that export products to Brazil. This company helps with financing,shipping,and any aspect of marketing a product from another country in Brazil. This company is an example of a(n) :

A multinational company that makes a labor-intensive product would be interested in the _____ makeup of countries.Factors such as median age,gender,and literacy rates would determine the success of its global expansion.

_____ are foreign sales agents-distributors who live in a foreign country and represent a domestic company in sales situations.They perform the same functions as domestic manufacturers' agents who help with financing and shipping.

A U.S.licensor can try to prevent a licensee from voiding its contract and using what it has learned to create a competitor by:

Disney sells the rights for an investment company to run a Disneyland theme park in Tokyo.The investment company gains most of the profits from the enterprise while paying Disney a percentage in royalties.This is an example of:

Vast differences in natural resources create all of the following EXCEPT:

Which method of entering the global marketplace would be most risky?

Which method of entering the global marketplace would be LEAST risky?

The role of a domestic company that sells to an export merchant (also called a buyer for export) is to:

DeLouis owns an agency that specializes in bringing international buyers in contact with U.S.companies to facilitate global trade. What type of intermediary is DeLouis?

The _____ is an intermediary in the global market who assumes all risks and sells globally for its own account.The domestic manufacturer usually treats it like a domestic customer.

_____ is a legal process whereby a firm agrees to let another firm use its manufacturing process,trademarks,patents,trade secrets,or other proprietary knowledge in return for a fee or royalty.

Patch Products is an Australian company that has given permission to several Latin American companies to manufacture and market its patented Spanish/English children's frame tray puzzles.Because Patch uses licensing as its global marketing strategy,it:

A(n) _____ is a global intermediary that brings the buyer and seller together.

Zambia is internationally recognized as the world's second leading producer of cobalt,which is used to make high-speed and high-temperature cutting tools and dyes.A company that wanted to manufacture tools for shaping steel would be most attracted to which element of the Zambian environment?

Carlos Hernandez owns a company in Miami that purchases products from U.S.manufacturers for export to several countries in Central and South America. Carlos is a(n) :

The United States is selling more domestically produced products in other countries than any other country in the world.This means the United States is the world leader in: