Question 1

India,like some other countries,may require entering firms to create _________ when expanding into their markets,limiting outsiders' control of businesses.

Accepted Answer

Joint ventures involve a partnership between a foreign company and a local company in India. This type of agreement allows for the sharing of resources, knowledge, and control of the business, which is often a requirement in India when expanding into their market. Joint ventures can help to limit outsiders' control of the business while also providing the opportunity for foreign firms to benefit from the knowledge and expertise of a local company.

Question 2

Global marketers typically find distribution in developing countries is more complex because

Accepted Answer

Developing countries often have fragmented distribution channels, which means global marketers need to work with a variety of intermediaries to get their products into the hands of consumers. Additionally, there may be limited infrastructure and logistical challenges that make distribution more complex.

Question 3

Celia's firm has developed a breakfast cereal targeted toward children.Rather than compete in the mature U.S.market,she has decided instead to introduce the product in Europe,where she feels it will be innovative.Her advertising agency urged caution because

Accepted Answer

Advertising regulations vary between countries, including regulations on advertising to children. This could potentially impact Celia's advertising strategy and messaging, which is why her advertising agency is urging caution.

Question 4

Many of the best-known American retailers,like Starbucks and McDonald's,have contractual agreements with another firm or individuals,allowing its businesses to operate overseas.These companies expanded globally using

Accepted Answer

Franchising is the business model used by companies like Starbucks and McDonald's to expand globally by allowing another firm or individual (the franchisee) to operate their businesses overseas under a contractual agreement.

Question 5

Tariffs,quotas,and currency exchange policies affect global

Accepted Answer

Tariffs and quotas can increase the cost of importing goods, which may lead to higher prices for consumers. Currency exchange policies can also affect pricing by making imports more expensive or exports cheaper. Therefore, these policies can have a significant impact on pricing strategies. The other options (offshore product design, advertising, logistics, and promotion) may be indirectly affected but are not the primary focus.

Question 6

Cultural nuances,subcultures,and consumers' different views of their roles in different countries can make __________ complicated.

Accepted Answer

Segmentation, targeting, and positioning are marketing strategies that involve understanding the cultural nuances, subcultures, and different views of consumers in different countries. These factors can greatly affect how a company chooses to segment its market, target specific segments, and position its products or services in the minds of consumers. Failure to understand these cultural differences can lead to ineffective marketing campaigns and a loss of potential sales. Therefore, it is important for companies to consider these factors when developing their marketing strategies.

Question 7

NCD Company wants to expand into the Mexican market.It has the financial resources,wants to control business operations,and had considerable success marketing to Hispanics in the United States.NCD will likely use __________ to expand into the Mexican market.

Accepted Answer

Direct investment would give NCD Company complete control over business operations, which they have indicated they want. Additionally, they have the financial resources to make such an investment. A joint venture and strategic alliance would involve partnering with a Mexican company, which could limit NCD's control over business operations. Exporting and franchising may not provide sufficient control for NCD in the Mexican market.

Question 8

Global marketers are under constant pressure to shorten distribution channels in order to

Accepted Answer

Shortening distribution channels can help global marketers reduce costs by eliminating intermediaries and reducing transportation and storage expenses. This is especially important in highly competitive industries where every cost-saving opportunity is crucial for maintaining profitability. Improving promotion efficiency, reducing trade deficits, affording tariffs, and meeting trade agreement guidelines are also important factors for global marketers, but they are not directly related to shortening distribution channels.

Question 9

Global segmentation,targeting,and positioning (STP)are more complicated than local STP,in part because

Accepted Answer

Consumers in different countries may have different cultural values, lifestyles, and preferences, which can affect how they view their roles as consumers. This can make it more challenging to segment, target, and position products in global markets.

Question 10

Gerald is assessing global entry strategies for his gourmet sandwich business.He does not want to take a lot of risk and he is willing to limit his control of international stores.Gerald will most likely use a(n)__________ strategy.

Accepted Answer

Franchising allows for limited risk and control as the franchisee operates the international stores under the guidance and control of the franchisor. This option allows for expansion without the financial burden and management required for direct investment.

Question 11

Graham had developed an extremely successful advertising and promotion campaign for a client in the United States.The client wanted to roll out the same campaign to markets worldwide,but Graham cautioned against doing this,most likely because

Accepted Answer

Differences in languages, customs, and culture can have a significant impact on the effectiveness of an advertising and promotion campaign in different markets. Therefore, Graham's caution against a global rollout is likely due to his awareness of these potential issues.

Question 12

As noted in your text,global segmenting,targeting,and positioning are more complicated than domestic segmenting and positioning because of cultural nuances,significant subcultures within countries,and

Accepted Answer

Cultural nuances, significant subcultures within countries, and differences in the way consumers see themselves and in the way they see products and services are all factors that can greatly impact global segmenting, targeting, and positioning strategies. Currency differences, antidiscrimination regulations, franchising issues, and taxes may also be factors, but they are not mentioned in the text as causing greater complexity than domestic strategies.

Question 13

Brands can be extremely valuable domestically,but challenging internationally.Companies can help overcome language difficulties in using brands by

Accepted Answer

Developing brand names that have no preexisting meaning in any known language can help overcome language difficulties in using brands internationally. This will ensure that the brand names do not have any negative connotations or meanings that may affect their acceptance in different languages and cultures. Additionally, this approach can also ensure consistency in the brand's name and image across different countries and languages.

Question 14

Global pricing strategies should strive to be consistent with

Accepted Answer

Global pricing strategies should be consistent with positioning strategies as they aim to position the product at a certain level in the market. Pricing too high or too low could affect the product positioning and its perceived value among consumers. Consistency in pricing and positioning across different markets also helps to build and maintain the brand image.

Question 15

When a firm pools its resources with that of a local firm to enter a new market,they create a(n)

Accepted Answer

A joint venture is the pooling of resources and expertise between two firms to enter into a new market together. A franchise involves granting another firm the rights to use a company's name and business model in exchange for fees and royalties. Export promotion refers to government policies and initiatives aimed at increasing a country's exports. Direct investment involves a company investing in a foreign market by building or acquiring ownership of facilities. A strategic alliance is a partnership between two or more firms that agree to cooperate while still retaining their individual identities.

Question 16

Of the five strategies for entering new markets,direct investment creates the

Accepted Answer

Direct investment involves substantial investment costs and therefore creates the greatest potential risk. The other strategies (exporting, licensing, franchising, and strategic alliances) may involve less investment and risk, but also have their own limitations and challenges.

Question 17

Domestic firms developing a global entry strategy might consider franchising; however,the disadvantages need to be considered.Which of these is not a disadvantage of franchising?

Accepted Answer

Option D is not a disadvantage of franchising. While franchising does involve risks, it is not necessarily the riskiest way to enter a foreign market. The other options are all potential disadvantages of franchising that a firm must consider.

Question 18

The most important consideration when a firm chooses a global product strategy should be

Accepted Answer

The most important consideration when a firm chooses a global product strategy should be the needs of the target market. The strategy should be aligned with the demands and preferences of the local customers in order to effectively compete in the global marketplace. Factors such as opportunities for countertrade, the effectiveness of the marketing team, overall cost of the strategy, and WTO regulations are important considerations, but should be secondary to the needs of the target market.

Question 19

Which of the following are the two components of a global marketing strategy?

Accepted Answer

The two components of a global marketing strategy are determining which target markets to pursue and developing a marketing mix to obtain a competitive advantage. Understanding foreign currency fluctuations, supply chain and distribution networks, developing culturally appropriate advertising messages, and adapting to foreign regulations are all important aspects of global marketing strategy, but they are subcomponents of the overall strategy. Target market selection and developing a competitive advantage through a marketing mix are the two key components that guide these subcomponents. Target market selection involves identifying and prioritizing the foreign markets that are most promising for the company's products or services. Developing a marketing mix for each of these priority markets involves creating a product, price, promotion, and distribution strategy that is tailored to the unique needs and characteristics of that market.

Question 20

Which of the following statements regarding global segmentation,targeting,and positioning is true?

Accepted Answer

Companies must continually adjust products and marketing strategies to meet the changing needs of global markets. Global markets can vary greatly in terms of cultural factors, economic conditions, and consumer preferences, so it is important for companies to continually adapt their strategies to remain competitive. Additionally, global STP activities are often more complicated than domestic activities due to the increased complexity of working in multiple markets. Furthermore, defining segments by geography alone is not always the most effective approach, as consumer behavior and preferences can vary within regions. Finally, altering the marketing mix to serve the needs of global markets is often necessary for success.

Quiz 8: Global Marketing