ch 4

33. A(n) _____ is a limit on the amount of a specific product that can enter a country.

a. quota b. tariff c. boycott d. exchange control e. transfer limit ANS:A

26. Which of the following statements about the political environment is true?

a. A recession is part of the political environment. b. A country is either socialistic or capitalistic, but never both. c. The countries with the least across-the-board regulations and political structures foster the strongest economies. d. The European Union is purely an economic arrangement and has no political impact on marketing. e. All of these statements about the political environment are true. ANS: C Recession is an economic factor. Countries are a combination of socialism and capitalism. The European Union is a means for the member nations to pursue an economic, monetary, and political union.

40. _____ are trade alliances in which several countries agree to work together to form a common trade area that enhances trade opportunities among those countries.

a. Boycotts b. Regional unifications c. Market groupings d. Free trade nations e. Expropriation members ANS:C

65. _____ 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 ANS:A

3. Which of the following statements about global marketing is true?

a. Marketing to target markets throughout the world has become an imperative for business. b. Often a U.S. firm's toughest domestic competition comes from foreign companies. c. Marketing managers must develop a global vision not only to recognize and react to international marketing opportunities but also to remain competitive at home. d. Adopting a global vision can be lucrative for a company, and global marketing can offset weak domestic performance. e. All of these statements about global marketing are true. ANS:E

43. The latest round of World Trade Organization (WTO) talks has been contentious. A major goal of this _____ is to bolster the developing economies of Africa, Asia, and Latin America where up to two-thirds of the population works in agriculture.

a. Mercosur covenant b. CAFTA Alliance c. Doha Round d. Uruguay Round e. WTO Round ANS:C

6. Which of the following statements about multinational firms is true?

a. Multinationals typically do not change their methods of reaching their global markets if they are successful with their initial strategy. b. Multinationals are defined as companies heavily engaged in exporting and importing. c. All multinationals must enter the fourth stage of globalization before they are fully internationalized. d. Multinationals often develop their global businesses in stages. e. The five stages of globalization closely mirror the five stages of the product life cycle. ANS: D Multinationals can go through up to four stages in their quest to globalize their business. Generally, only high-tech firms ever reach the fourth stage. Multinationals are companies that heavily engage in international trade, beyond exporting and importing.

42. _____ is a trade agreement that includes Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, and Uruguay. This agreement eliminated the tariffs among these trading partners.

a. NAFTA b. Maastricht c. WTO d. GATT e. Mercosur ANS:E

54. 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 ANS: E 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.

49. Which of the following statements about the European Union (EU) is true?

a. The EU creates a single Europroduct for a generic Euroconsumer. b. The EU removes all internal trade barriers and standardizes regulations in European countries for easier trade. c. The EU can correctly be called the "United States of Europe" because all European voters have agreed to these changes. d. The existence of the EU eliminates protectionist movements by United Europe against the Japanese and the United States. e. None of these statements about the EU is true. ANS: E Because of diverse languages and cultures, no "United States of Europe" or a generic Euroconsumer results from United Europe. There exists the possibility of a protectionist movement and increased competition. It does not eliminate all trade barriers.

45. The _____ is the most ambitious global trade agreement ever negotiated; the agreement has reduced tariffs by one-third worldwide.

a. Uruguay Round b. Mercosur c. GATT d. NAFTA e. Maastricht Treaty ANS:A

44. The _____ of trade negotiations created the _____, which replaces GATT. This trade agreement dramatically lowers trade barriers worldwide.

a. Uruguay Round; World Trade Organization b. Doha Round; European Union c. Doha Round; NAFTA d. Paraguay Round; South American Free Trade Agreement e. Mercosur; European Union ANS: A The Uruguay Round created the WTO.

66. 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 ANS:A

63. A(n) _____ is a global intermediary that operates primarily in agriculture and raw materials by bringing the buyer and seller together.

a. buyer for export b. export agent c. license agent d. import agent e. export broker ANS:E

64. A cooperative of egg producers believes a profitable market for eggs exists overseas where people are not as concerned about cholesterol. If the cooperative decides to export, it will most likely use a(n):

a. commission merchant b. drop shipper c. export broker d. import agent e. export agent ANS: C Export brokers typically handle agriculture and raw materials.

24. Which of the following is an important cultural factor that should be considered by global marketers?

a. competitive synergy b. language c. natural resources d. technology sensitivity e. level of economic development ANS:B

48. The goal of the Central America Free Trade Agreement (CAFTA) is to:

a. create free-trade agreements between the United States and other industrialized nations b. eliminate all protectionism c. raise prosperity levels in all industrializing nations d. establish a free trade agreement between the United States and certain Latin American countries e. make sure all nations achieve the economic and technological development of a takeover economy or better ANS:D

46. The North American Free Trade Agreement (NAFTA) did NOT:

a. create the world's largest free-trade zone including Canada, the United States, and Mexico b. substantially reduce economic growth in Mexico c. allow U.S. and Canadian financial-services companies to own subsidiaries in Mexico d. remove many tariffs and duties so that Mexico, Canada, and the United States can trade more freely e. expand opportunities for U.S. businesses in Mexico ANS: B Over the years, Mexico has made economic gains due to NAFTA.

16. A business thinking of expanding into global markets needs to examine all of the following external environments EXCEPT:

a. culture b. political structure and actions c. its marketing mix d. natural resources e. demographic makeup ANS: C The marketing mix is the keystone of a company's internal environment.

51. 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 ANS: A Demographics include age and educational levels as well as ethnicity and gender.

1. Individuals and organizations utilizing a global vision to effectively market goods and services across national boundaries are engaged in:

a. developing international selling schemes b. implementing standard international marketing c. implementing global marketing standardization d. supplementing their foreign vision e. practicing global marketing ANS:E

17. Central to any society is a common set of values shared by its citizens that determines what is socially acceptable. Marketers refer to these values collectively as a country's:

a. ethical system b. culture c. ethnocentricity d. national personality e. socialization ANS:B

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

a. exporting b. licensing c. contract manufacturing d. joint ventures e. direct investment ANS: A See Exhibit 4.1.

36. An exclusion of all products from certain countries or companies by a government or group is called a(n):

a. expropriation b. quota c. tariff d. exchange control e. boycott ANS:E

11. A company that is capital-intensive:

a. has an altered fiscal strategy for overseas operations b. spends more on equipment than on labor c. makes better use of benchmarking than other types of business d. creates employment monopolies e. must engage in countertrading due to restrictive foreign legislature ANS:B

7. A(n) _____ is a company that is heavily engaged in global trade and moves its resources, goods, services, and skills across national boundaries.

a. international facilitator b. global trader c. multinational corporation d. exporting company e. international merchant ANS:C

14. Global marketing standardization:

a. is becoming less popular with the large multinationals b. encourages product, packaging, and advertising variations for each nation or local market c. actually raises production costs d. presumes markets throughout the world are becoming more alike e. is more popular with consumer products than with industrial goods ANS: D With a global marketing standardization approach, a firm produces standardized products to be sold the same way worldwide. This approach assumes all customers have the same needs and wants.

31. A tax levied on the goods entering a country is called a(n):

a. license b. quota c. boycott d. exchange control e. tariff ANS:E

39. A(n) _____ is a law that compels a company earning foreign currency from its exports to sell it to a central bank rather than sending the money out of the country.

a. tariff b. quota c. fiscal prerequisite d. exchange control e. transfer barrier ANS:D

10. Which of the following describes a common criticism of multinational companies?

a. the transference of the wrong kind of technology to a developing nation b. excessive employment information c. countertrading d. the transference of labor-intensive technology e. dumping ANS: A Typically, the technology needed to run operations in developing nations is capital-intensive and thus does not substantially increase employment.

41. Negotiations (such as GATT or the Uruguay Round) between countries that are made to stimulate global exchange and remove barriers are called _____ agreements.

a. trade b. joint venture c. CRM d. exchange e. licensing ANS:A

13. With a _____, a firm produces standardized products to be sold the same way all over the world.

a. traditional marketing strategy b. global marketing standardization approach c. product extension approach d. culturally based marketing strategy e. synergistic approach to marketing ANS:B