Chapter 15 Questions

The issue of initial investment in creating a channel and the cost of then maintaining it is identified in the channel strategy of ___________. A. Cost B. Coverage C. Character D. Continuity E. Control

A. Cost

__________ is(are) not one of the forces that drive countries to form regional market zones. A. Cultural differences B. Geographic proximity C. Economic factor D. Cultural similarities E. Political factor

A. Cultural differences

Charlotte, the international sales manager at a fashion house, is concerned that the euro is stronger than the U.S. dollar. This would be identified in the _______ section of a global research report. A. Economic B. Cultural, societal C. Business environment D. Political, legal E. History, geography

A. Economic

Data on consumer spending per capita or industrial purchasing trends would be identified in the _______ section of a global research report. A. Economic B. Cultural, societal C. Business environment D. Political, legal E. History, geography

A. Economic

Samsung Electronics sold more televisions than any other company in 2012 with sales of 47 million and a worldwide market share of 27 percent. Samsung is engaged in __________________. A. Global marketing B. No direct foreign marketing C. Global partnerships D. Foreign marketing E. International marketing

A. Global marketing

When distributors do not have authorization from manufacturers but divert products from low-price markets and sell them in high-price markets, they are practicing ____________. A. Gray marketing B. Price fixing C. Dumping D. Compensation trading E. Offset pricing

A. Gray marketing

Many people are surprised to find that the price they pay in their home country for products may be twice as much in a foreign country due to transportation charges, taxes, tariffs, and exchange rate fluctuations. This change in price is referred to as _____________. A. Price escalation B. Price scaling C. Cost-plus pricing D. Cost-based pricing E. Price fluctuation

A. Price escalation

S. companies that earn more than 50 percent of their revenue from international markets include all but ______________. A. Starbucks B. Hewlett-Packard C. Nike D. Caterpillar E. Chevron

A. Starbucks

A country that is primarily dependent on agriculture and has high illiteracy rates is in the _______ stage of development. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

A. Traditional society

Sudan should be classified as being in the __________ stage of development. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

A. Traditional society

NAFTA is a market zone that eliminates tariffs between the United States and _______. A. Canada, Mexico, and Costa Rica B. Canada and Mexico C. Mexico, Honduras, Nicaragua, Costa Rica, and Panama D. Canada, Mexico, Costa Rica, and Panama E. Canada, Costa Rica, and Panama

B. Canada and Mexico

Ask your friends which country produces the best perfume and most likely the answer will be "France." This shows the issue that international consumer marketers face of _________. A. Brand strategy B. Country-of-origin effect C. Quality D. Fitting the product to the culture E. Manufacturing

B. Country-of-origin effect

Tyrone wants to get his girlfriend an impressive gift of chocolates for Valentine's Day. He chooses candy that was made in Belgium. This is an example of how consumers respond to ____________. A. Brand strategy B. Country-of-origin effect C. Quality D. Fitting the product to the culture E. Price

B. Country-of-origin effect

The use of local distribution networks is identified in the channel factor of ___________. A. Cost B. Coverage C. Character D. Continuity E. Control

B. Coverage

In Spain, most people do not eat dinner until 10:00 at night. This would be identified in the _______ section of a global research report. A. Economic B. Cultural, societal C. Business environment D. Political, legal E. History, geography

B. Cultural, societal

The color red means different things in different parts of the world. For example, in China a bride traditionally would wear red but not white. White is a symbol of death. This would be identified in the _______ section of a global research report. A. Economic B. Cultural, societal C. Business environment D. Political, legal E. History, geography

B. Cultural, societal

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 _________. A. Franchise B. Joint venture C. Joint venture with minority ownership D. Strategic alliance E. Licensing

B. Joint venture

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 _________. A. Franchise B. Joint venture C. Direct sales force D. Greenfield operations E. Licensing

B. Joint venture

Crude oil is priced the same in every market by OPEC which uses a __________ strategy. A. Going-rate pricing B. One world price C. Local market condition price D. Transfer price E. Cost-based price

B. One world price

In Japan, where salespeople maintain strong relationships with buyers, customers do not go to a showroom. The salesperson goes to the buyer's home. Half of all cars are sold in the home. This element of marketing communications is called _______. A. Advertising B. Personal selling C. Promotion D. Public relations E. Direct marketing

B. Personal selling

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. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

B. Preconditions for take-off

Romania would be classified as being in the __________ stage of development. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

B. Preconditions for take-off

Coca-Cola changes the taste of its soft drinks to meet local market preferences. This is an example of ___________. A. Direct product extension B. Product adaptation C. Backward product invention D. Product invention E. Hybrid products

B. Product adaptation

_________ is not an advantage to franchising as a market entry strategy. A. The franchisee has local market knowledge B. Products have no need for adaptation C. Local management has expertise D. Quality control is at the point of customer contact E. Economies of scale exist

B. Products have no need for adaptation

The most successful regional market zone is ______. A. NAFTA B. The European Union C. MERCOSUR D. ASEAN E. The Cooperation Council for the Arab States of the Gulf

B. The European Union

The ___________ industry best illustrates the power of strategic alliances. A. Automobile B. Telecommunications C. Airline D. Computer E. Video gaming

C. Airline

Outdated cell phones used in Europe or Asia have been introduced into the Latin American markets. This is an example of ____________. A. Forward extension B. Product adaptation C. Backward product invention D. Product invention E. Hybrid products

C. Backward product invention

Jonathan must travel to Japan to meet with a prospective supplier for his company. He wants to learn proper protocol for meeting his Japanese contact, presenting his business card, and figuring out if he should call him by first name. The area of global market research where Jonathan would find this information is in the ____________ trends. A. Economic B. Cultural, societal C. Business environment D. Political, legal E. History, geography

C. Business environment

Sam is flying to Rio de Janeiro, Brazil, to meet with a prospective customer. Sam is very successful in the United States because he is a multitasking high achiever who hates wasting time with small talk and leaves the details of a contract up to his legal staff. His personal assistant has prepared a global market research report for him and emphasized that he should read the ___________ section. A. Economic B. Cultural, societal C. Business environment D. Political, legal E. History, geography

C. Business environment

Aligning the firm's philosophy with that of a potential channel partner would be identified in the channel strategy of ___________. A. Cost B. Coverage C. Character D. Continuity E. Control

C. Character

_____________ 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. A. Brokers B. Export agents C. Distributors D. Direct sales forces E. Freight forwarders

C. Distributors

Charging a price that is lower than actual costs or less than the company charges in its home market is called _____________. A. Gray marketing B. Price fixing C. Dumping D. Compensation trading E. Offset pricing

C. Dumping

___________ is one of the most widely used measures of economic growth. A. GNP B. Purchasing power parity C. GDP D. GNI E. Per capita income

C. GDP

When local government relationships are critical to the success of international operations the best organizational structure for a firm would be __________. A. Targeted organization B. Global product lines C. Geographic regions D. Hybrid or matrix E. Multinationals

C. Geographic regions

Coca-Cola advertisements in Brazil may feature famous Brazilian soccer players and use the theme "Always Coca-Cola." Ads in Japan may use Japanese rock stars and the theme "Always Coca-Cola." This approach to advertising strategy is _____. A. Global marketing themes B. Local advertising C. Global marketing with local content D. Basket of global advertising themes E. Local market ad generation

C. Global marketing with local content

Firms that manufacture in a foreign market or maintain an extensive sales organization and distribution network but whose managers still maintain a "domestic first" mind-set are probably engaged in ________. A. No foreign marketing B. Foreign marketing C. International marketing D. Global marketing E. Intergalactic marketing

C. International marketing

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. A. Accounting and law B. Currency trading C. Marketing and logistics D. Human resources E. Customer service

C. Marketing and logistics

Pepsi and Coca-Cola both sponsor traveling carnivals in rural Latin America to encourage product trial. This element of marketing communications is _______. A. Advertising B. Personal selling C. Promotion D. Public relations E. Direct marketing

C. Promotion

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. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

C. Take-off

The Czech Republic would be classified as being in the __________ stage of development. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

C. Take-off

The value of the Japanese yen has fluctuated widely during the 2000s compared to the U.S. dollar. A firm considering direct foreign investment would report this finding under the heading of _____. A. Timing B. Legal issues C. Transaction costs D. Marketing communication barriers E. Product differentiation

C. Transaction costs

_______ of the world's economic growth in the next 20 years is predicted to come from emerging economies. A. 10 percent B. 35 percent C. 52 percent D. 75 percent E. 90 percent

D. 75 percent

The most well established local distributors might already have relationships with competitors. This problem for new market entrants would be identified in the channel strategy of ___________. A. Capital B. Coverage C. Character D. Continuity E. Control

D. Continuity

The market entry strategy with the greatest long-term implication is __________. A. Direct sales force B. Strategic alliance C. Joint venture D. Direct foreign investment E. Licensing

D. Direct foreign investment

You Are Here, a personal navigation system company, has contracted its manufacturing to a firm in Malaysia for five years. Now that You Are Here has explosive growth, it wants to purchase the manufacturing facility. This market entry method is _________. A. Direct sales force B. Strategic alliance C. Joint venture D. Direct foreign investment E. Licensing

D. Direct foreign investment

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. A. Broker B. Export agent C. Distributor D. Direct sales force E. Freight forwarder

D. Direct sales force

___________ is the most common method for entering foreign markets and accounts for ________ of all global economic activity. A. Direct foreign investment, 20 percent B. Licensing, 12 percent C. Franchising, 35 percent D. Exporting, 10 percent E. Joint ventures, 15 percent

D. Exporting, 10 percent

When Coca-Cola introduced Diet Coke in Japan, sales were poor because Japanese women don't like the concept of dieting and associate "diet" with sickness. Sales improved when the name was changed to Coke Light. This illustrates a problem with ______________. A. Brand strategy B. Country-of-origin effect C. Quality D. Fitting the product to the culture E. Manufacturing

D. Fitting the product to the culture

When Ford Motor Co. introduced the Nova model in Mexico, it faced certain ridicule because "No va" in Spanish means "It doesn't go." Oops! This illustrates a problem with __________________. A. Brand strategy B. Country-of-origin effect C. Quality D. Fitting the product to the culture E. Manufacturing

D. Fitting the product to the culture

An understanding of marketing beyond home markets develops over time as a company gets more international business experience. This process is referred to as the ___________. A. Global experience curve B. Global learning continuum C. International experience learning curve D. Global experience learning curve E. International experience continuum

D. Global experience learning curve

The organizational structure used by most companies is ______________. A. Targeted organization B. Global product lines C. Geographic region D. Hybrid or matrix E. Multinational

D. Hybrid or matrix

Many countries restrict marketing to children more severely than in the United States. A firm considering direct foreign investment would report this finding under the heading of _____. A. Timing B. Legal issues C. Transaction costs D. Marketing communication barriers E. Product differentiation

D. Marketing communication barriers

China would be classified as being in the __________ stage of development. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

D. Maturity

Mi Casa, a furniture maker in Peru, has received an e-mail from an interior decorator in Colombia asking the company to ship furniture to her clients. Mi Casa has shipped outside Peru only three times in the past. Mi Casa's position toward marketing is classified as _________________________. A. Foreign marketing B. International marketing C. Global marketing D. No direct foreign marketing E. Global partnerships

D. No direct foreign marketing

Andrew wants to fire a manager in the Dijon, France, office of his company. He recently found out that French law makes it difficult to terminate employees. This would be identified in the _______ section of a global research report. A. Economic B. Cultural, societal C. Business environment D. Political, legal E. History, geography

D. Political, legal

John has learned that the government in one of his South American markets has enacted a new law that limits the amount of profit it can take out of the country. If John had researched the _________ environment, he may have been prepared for this bad news. A. Economic B. Cultural, societal C. Business D. Political, legal E. History, geography

D. Political, legal

Many countries base their court systems on those of former rulers or colonizers. For example, the Spanish ruled many South American countries for many years so the court system there is based on code or civil law. This would be identified in the _______ section of a global research report. A. Economic B. Cultural, societal C. Business environment D. Political, legal E. History, geography

D. Political, legal

Bistrone corn canned soup was made expressly for the Japanese market by Coca-Cola Japan. This is an example of ___________________. A. Direct product extension B. Product adaptation C. Backward product adaptation D. Product invention E. Hybrid products

D. Product invention

The task of handling crises and giving the company's perspective to news organizations belongs in the ___________ element of marketing communications. A. Advertising B. Personal selling C. Promotion D. Public relations E. Direct marketing

D. Public relations

Advantages to licensing as a market entry strategy do not include ___________. A. Limited financial risk in the short run B. Complete control of the patent or trademark C. Services such as local distribution D. Protection of trade secrets E. Both complete control of the patent or trademark and protection of trade secrets

E. Both complete control of the patent or trademark and protection of trade secrets

All but the most accomplished global marketers rely on local distribution networks in foreign markets. It is very expensive to build the company's own distribution network. This issue would be identified in the channel strategy of ___________. A. Cost B. Coverage C. Character D. Continuity E. Control

E. Control

Germany should be classified as being in the __________ stage of development. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

E. High mass consumption

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. A. Traditional society B. Preconditions for take-off C. Take-off D. Maturity E. High mass consumption

E. High mass consumption

The fastest-growing economy in the world in 2012 was ______. A. Sierra Leone B. Afghanistan C. Macau D. China E. Libya

E. Libya

__________ is not a product issue for international product marketers. A. Brand strategy B. Country-of-origin effect C. Quality D. Fitting the product to the culture E. Manufacturing

E. Manufacturing

_____________ spends more money on advertising than any other company in the world. A. Toyota B. Unilever C. General Motors D. Coca-Cola E. Procter & Gamble

E. Procter & Gamble

The degree of centralization is a critical decision a firm makes before deciding on an international organizational structure. Options include _________. A. Highly decentralized, decentralized, and centralized B. Highly centralized, centralized, and decentralized C. Regionalized, highly regionalized, and centralized D. Decentralized, centralized, and regionalized E. Regionalized, moderately decentralized, and centralized

E. Regionalized, moderately decentralized, and centralized

The world's largest company in 2013 was _____________. A. ExxonMobil B. Walmart C. BP D. Toyota E. Royal Dutch Shell

E. Royal Dutch Shell

MERCOSUR is a regional market zone in ________. A. Asia B. Africa C. North America D. The Mideast E. South America

E. South America

Franchising requires a high level of investment by the franchisor in foreign markets.

FALSE

Germany has a very relaxed culture. If you make a business appointment for 10:00, your German counterpart will not mind if you do not show up until 11:00.

FALSE

Global marketing research focuses on three types of basic information.

FALSE

Mr. Coffee had a good understanding of the Japanese culture when it introduced coffeemakers that fit well in a Japanese kitchen.

FALSE

Small companies have to invest a lot of money to go global.

FALSE

The country-of-origin effect is always a positive effect.

FALSE

The economy of the European Union is larger than that of the United States.

FALSE

When companies sell in other countries through limited direct contact or indirect intermediaries they always consider themselves to be involved in foreign marketing.

FALSE

A company can do business with an international company and still not engage in direct foreign marketing.

TRUE

According to Rostow, a take-off economy is moving from agricultural to industrial and has banking systems, technology industries, and other skilled industries.

TRUE

Countries create regional market zones for mutual economic benefit through reduced trade barriers and lower tariffs.

TRUE

Direct foreign investment is a market entry strategy with the greatest long-term implications.

TRUE

Due to improved distribution, better communication tools, product standardization, and the Internet, businesses are not confined to a local market.

TRUE

Global luxury brands like Tiffany's look to Asian markets that have a higher demand for luxury goods than the U.S. market.

TRUE

Licensing is a useful form of market entry when companies lack the resources to establish independent operations in foreign markets.

TRUE

McDonald's socially responsible coffee, Kenco, is sold in the European market because Europeans expect companies to care about the environment.

TRUE

Nestlé embraces a local branding strategy globally while other companies like Coca-Cola and Kellogg use a global branding strategy.

TRUE

The European Union is the most successful regional trade zone.

TRUE

The most common market entry strategy is exporting.

TRUE

The most significant difference between international and global marketing is management philosophy and corporate planning.

TRUE