Question 1

World trade activity has been rapidly declining over the last twenty years.

Accepted Answer

This statement is incorrect. According to World Trade Organization (WTO) data, world trade has been steadily increasing over the last twenty years, with occasional dips due to economic downturns. However, the growth has slowed down in recent years, and there are concerns about the impact of trade tensions and the COVID-19 pandemic on world trade.

Question 2

Which of the following is part of a foreign market's economic environment?

Accepted Answer

A

Question 3

Which of the following statements about companies that export is true?

Accepted Answer

D

Question 4

Which of the following is not part of a foreign market's cultural environment?

Accepted Answer

Political stability is not a cultural element, but rather a political and economic element of a foreign market. Ethnocentricity, symbols and superstitions, values, norms and customs are all cultural elements that can impact a company's success in a foreign market.

Question 5

The first step in deciding whether and how to go global is to ________.

Accepted Answer

Examining basic market conditions including domestic demand, market potential abroad, and the firm's ability to achieve competitive advantages is the first step in deciding whether and how to go global. This analysis will help the firm determine whether going global is the right decision and what strategies to use to succeed in the global market. Establishing a research budget, hiring someone with experience to manage global operations, creating broader marketing objectives, and creating an internationalized mission statement can come after this initial analysis.

Question 6

Which of the following is part of a foreign country's market conditions?

Accepted Answer

All three options (market potential abroad, domestic demand, and competitive advantage) are part of a foreign country's market conditions. Market potential refers to the potential demand for a product or service in a foreign country, domestic demand is the existing demand for products or services within that country, and competitive advantage refers to an advantage that a company has over its competitors in that market. Therefore, the correct answer is D, all of the above.

Question 7

Logitech International is a Swiss company that from its inception sold its product worldwide with operational headquarters in California and regional headquarters in Switzerland,Taiwan,and Hong Kong.

Accepted Answer

Logitech International is a born-global firm as it started its operations globally from its inception, with headquarters and presence in multiple regions, without a gradual expansion from a domestic market to international markets.

Question 8

PepsiCo has been selling its products in Russia for years in exchange for Stolichnaya vodka that it then sells in other markets.

Accepted Answer

This scenario describes a countertrade agreement, where PepsiCo is exchanging its products with Stolichnaya vodka instead of using traditional currency.

Question 9

Trading firms are practicing ________ when they work out elaborate deals in which they trade or barter their products with each other or even supply goods in return for tax breaks from the local government.

Accepted Answer

The practice described in the question is known as countertrade. Countertrade involves the exchange of goods or services instead of using money. This can be especially useful for businesses operating in countries with limitations on currency exchange or trade regulations.

Question 10

Which of the following is part of a foreign market's political/legal environment?

Accepted Answer

Regulatory issues are part of a foreign market's political/legal environment, which refers to the laws, regulations, and policies that affect businesses' operations in that market.

Other choices such as norms and customs, domestic demand, language, and GDP are part of a foreign market's cultural and economic environment.

Question 11

Which of the following statements about global marketing is not true?

Accepted Answer

This statement is not true as competition can come from both domestic and foreign firms in the global marketplace.

Question 12

With countertrade,goods are paid for with other items instead of cash.

Accepted Answer

In countertrade, payment is made in the form of goods or services instead of cash.

Question 13

When entering foreign markets,marketers must analyse which of the following?

Accepted Answer

When entering foreign markets, marketers should analyze all of the above (the economic environment, political/legal environment, market conditions, and cultural environment). Understanding these factors is crucial for adapting a company's products, pricing, distribution, and promotion strategies to the foreign market's unique characteristics. Ignoring any of these factors can lead to unsuccessful market entry, significant financial losses, and irreparable reputational damage. Therefore, marketers must conduct comprehensive market research to obtain insights into each of these environmental factors before making decisions regarding market entry.

Question 14

The simplest and easiest way to enter a global marketplace is by ________.

Accepted Answer

Exporting is the simplest and easiest way to enter a global marketplace. It involves selling products or services produced in one country to customers located in another country. This approach requires less investment and involves fewer risks compared to other entry modes such as joint ventures or establishing a subsidiary in a foreign market.

Question 15

Which of the following statements about world trade is true?

Accepted Answer

Option A is true as world trade refers to the value of all exports and imports of the world's nations. Option B is also true as world trade refers to the flow of goods and services among different countries. Option D is true as not all countries have equal participation in world trade, as some countries are more developed and have more resources to engage in trade than others. Option C is not entirely true for all countries, as some countries are still struggling to recover from the financial crisis. Therefore, E is the correct answer as all the given statements are correct.

Question 16

When a currency cannot be exchanged outside a country's borders,it is considered ________.

Accepted Answer

The term "convertible" refers to a currency that can be easily exchanged for another currency outside of the country's borders. Therefore, if a currency cannot be exchanged outside of the country, it is not convertible. A, B, C, and E are all incorrect or incomplete descriptions of this concept.

Question 17

With global marketing,the lower the risk,the greater the reward.

Accepted Answer

In global marketing, typically higher risks are associated with higher potential rewards, as entering new markets can involve uncertainties but also opportunities for significant growth.

Question 18

Which of the following is part of a foreign market's cultural environment?

Accepted Answer

Symbols and superstitions are aspects that are part of a foreign market's cultural environment. They are beliefs, customs, and values that influence behavior and purchasing decisions.

Question 19

Companies that deliberately try to sell their products in multiple countries from the moment they are created are called ________.

Accepted Answer

Born-global firms are companies that intentionally target multiple countries from the outset of their operations, rather than focusing solely on their domestic market before expanding overseas.

Question 20

To be successful in creating competitive advantage in international markets companies must ________.

Accepted Answer

All of the above choices are important for companies to create a competitive advantage in international markets. Realizing local companies may have a 'home court advantage' helps companies to adapt their strategies and tactics to the local market. Capitalizing on their home country's assets helps companies to differentiate themselves from local competitors. Avoiding competing in areas in which they are at a disadvantage minimizes the risk of failure. Realizing there are more players involved helps companies to understand the complexity of international markets and adapt to them.

Quiz 3: Thriving in the Marketing Environment: The World Is Flat