Chapter 8

Which of the following is an example of an agency that sets the rules for currency exchange in a nation? (Check all that apply.)

The U.S. Federal Reserve A central bank

The assumptions a group of people have regarding the world and the people in it are an example of the ______ of a culture.

underlying values

What does a trade deficit signal to economic analysts?

Strong competition from foreign producers

Direct investment requires a firm to maintain ______ ownership of its facilities, offices, and plants in a foreign country.

100%

Infrastructure includes basic facilities, services, and installations needed for a community or society to function, including all EXCEPT which of the following?

A culture that accepts innovation

Why might a firm prefer to manufacture in a country that has a trade surplus?

A trade surplus offers the chance to export to more markets.

Which of the following factors threaten Russia's prospects for economic growth? (Check all that apply.)

An aging population Widespread corruption Economic sanctions

Which of the following are factors that have contributed to Brazil's economic growth in the 21st century?

An increase in the literate population Social programs that have expanded the middle class

Which of the following is an example of a visible artifact of culture?

Ceremonies

Which of the following types of businesses would be MOST affected by pricing laws that prohibit selling products below cost?

Discount retailers such as Walmart

Which of the following criteria are necessary to assess a country's market?

Economic analysis Sociocultural analysis Infrastructural analysis

What is a major benefit of selling the exact same product or service in both the home and host countries?

Establishing strong brand recognition

Which method of global expansion poses the least amount of risk?

Exporting goods to other countries

True or false: The global population has only experienced negative population growth since the turn of the 20th century in both less developed nations and developed countries.

False

Why is global segmentation, targeting, and positioning (STP) more complicated than domestic STP? (Select all that apply.)

Firms struggle to understand the cultural nuances of other countries. Foreign consumers view products and their roles as consumers differently.

What is a major economic factor a firm conducting an economic analysis of a country market must take into account?

General economic environment

______ refers to a strategy in which firms sell a standardized product around the world but develop different promotional campaigns for different countries.

Glocalization

Which of the following metrics measures a country's economic output?

Gross domestic product (GDP)

What benefits does the local partner typically offer in a joint venture agreement? (Select all that apply.)

Improved understanding of the global marketplace Access to local resources such as vendors and real estate

Which of the following factors is included in gross national income (GNI) but not gross domestic product (GDP)?

Income from foreign investments

______ is defined as the basic facilities, services, and installations needed for a community or society to function, such as water and power lines, and public institutions.

Infrastructure

Which of the following are reasons marketers must adapt their global distribution strategies for developing countries? (Check all that apply.)

It is difficult to transport products to retailers in remote areas. Consumers shop in small, family-owned retail outlets.

When a firm enters into a joint venture agreement with a local firm, the two investors will then share which of the following?

Ownership of the firm Control of business operations Any profit gained

Which of the following can increase a foreign entrant's risk in a direct investment strategy?

Political instability

The Big Mac Index, which uses exchange rates to compare the cost of a Big Mac hamburger in U.S. dollars in countries around the world, is a method of evaluating which economic metric?

Purchasing power parity (PPP)

Which of the following are current population trends that affect marketing strategy?

Rapid population growth in less developed countries Stagnant or declining population in developed countries

Which of the following are the three potential global product strategies? (Select all that apply.)

Selling a completely new product in the host country Selling a product in the host country with minor adaptations from what is sold in the home country Selling the same product or service in both the home and host country

What is the most common method of introducing a product or service outside of the home country?

Selling the same product or service in the home country and host country

Which of the following is a market entry strategy in which independent companies form a partnership to collaborate in the foreign market but do not necessarily invest in each other?

Strategic alliance

Which of the following factors does a firm typically consider when conducting an internal assessment of its market expansion strategy? (Select all that apply.)

The current markets it serves Access to capital Management's commitment to the proposed strategy

Which of the following factors will most significantly influence the price of a product on the global marketplace?

The local pricing structures of individual markets

Describe Russian buyers' attitudes toward American brands.

They exhibit a strong preference for brand and products from the United States.

Which of the following statements about metrics is true?

They provide marketers with a good picture of the economic health of a country despite different stages of economic development.

When firms develop a marketing mix as part of their global marketing strategy, what is their primary goal?

To sustain a competitive advantage over time

If a laundry soap manufacturer decides to introduce a single-use package of detergent in a developing country when it only sells the detergent in bulk sizes in the home country, which global product strategy is the company using?

Totally new product or service

What global product strategy does a firm pursue if it offers a product in one country that uses ingredients not found in the products it sells in other countries?

Totally new product or service

True or false: To do business in less developed nations, firms often adjust products or prices to make their offerings more affordable.

True

Which two of the following are franchises?

a Holiday Inn motel a McDonald's restaurant

Evaluating real income is:

a critical way in which global markets are assessed

In any given country, who is usually responsible for regulating currency exchange?

a designated agency, such as the central bank

The level of economic development, as well as differences in product and technical standards, help determine the need for and level of product ______ in a global product strategy.

adaptation

Elements in a global communication strategy usually need to be ______ to the local market to be effective.

adapted

Gross domestic product is defined as the total market value of ______ produced by a country in a year.

all goods and services

To best understand the economic health and market potential of a country, a firm should use ______.

as many metrics as it can obtain

Language can ______ marketers' ability to communicate with customers in different countries.

complicate

The theory of purchasing power parity suggests that, if exchange rates between two countries are in equilibrium, a product should ______ when expressed in the same currency.

cost the same in both countries

Global marketing strategies includes two elements: identification of the target markets and ______.

developing and implementing the marketing mix

Retailers may devise a creative solution for getting their product to hard-to-reach consumers. The development of this type of solution is part of the firm's ______.

distribution strategy

The most common method of evaluating the economic health of a country is to use metrics that measure the country's ______.

economic output

A joint venture is formed when a firm ______ a new market and ______ its resources with those of a local firm to form a new, shared company.

enters; pools

The ________ rate is the measure of how much one country's currency is worth in relation to another country's currency.

exchange

The complex value chains inherent in global distribution networks include which of the following?

exporters importers transportation systems middlemen

A country with a trade surplus ______.

exports more goods than it imports

True or false: A disadvantage of direct investment is that profits must be shared with other firms.

false

When a firm ventures into a foreign market, it will often take a low-risk step toward global expansion and will ______.

fill an order for a product or service from another country.

A franchise is a contractual agreement between ______.

firms or a firm and individual

Franchising is a contractual agreement between a firm, the franchiser, and another firm or individual, known as the ______.

franchisee

A strategic alliance is a type of _____ for a firm to expand into the foreign market.

global entry strategy

When a firm decides to standardize its products globally but use different promotional campaigns, this strategy is referred to as __________. (Please read the question carefully!)

glocalization

The total market value of all goods and services produced by a country in a year is known as the country's ______.

gross domestic product

A trading bloc comprises countries that ______.

have signed a particular trade agreement

Prices are often different in the global marketplace than they are in the home country because a firm's products may not ______.

have the same positioning as they do in the home country

True or false: A global marketing mix is more complicated than a domestic marketing mix.

true

The major challenge in developing a global communication strategy is ______.

identifying the elements of an advertising campaign that need to be adapted in the global marketplace

When a firm identifies its positioning within a market, it must decide how to ______ its marketing strategies using the marketing mix.

implement

The complex value chains inherent in global distribution networks include which of the following?

importers transportation systems middlemen exporters

A trade deficit means that a country ______.

imports more goods than it exports

Global distribution networks form complex value chains that ultimately ______ the final selling price of a product.

increase

An exchange rate quantifies how much a currency ______.

is worth in relation to another

In the timeline for a firm's global expansion, a firm conducts an internal assessment of its capabilities when _____.

it has concluded its assessment analysis of the most viable markets

Many firms choose the direct investment strategy when entering foreign markets because ______.

it offers complete control over operations potential profits are not shared with other firms

Exporting is an entry strategy that requires the ______ financial risk and allows a(n) ______ return to the firm.

least; limited

When entering their first foreign markets, firms typically take a(n) ______ approach.

less risky

Trade agreements are signed by different governments to ______.

manage and promote trade activities for a certain region

When adopting strategies for entering a new market, many firms follow a(n) approach that may morph and become ______ over time.

more risky

The marketing strategy a firm chooses when entering a new foreign market depends on the ______ of the target consumers.

needs

Gross national income consists of GDP plus ______, without including any payments made to those who do not live in a country but who contribute to the domestic economy.

net income earned from investments abroad

A quota designates the highest quantity of a product that may be imported ______.

over a specified time period

In a franchising agreement, the franchisor ______.

owns the overarching firm

Joint ventures can be a risky entry strategy because ______. (Check all that apply.)

partners might disagree governments might place restrictions on the entering firm

The components of a country market assessment include all of the following EXCEPT:

pricing and product decisions

It is the global ______ which offers marketing managers specifically three potential global product or service options from selling the same product to introducing an entirely new product.

product strategy

Countries with the highest ______ today may lose appeal in the future for many products and services because of stagnated growth.

purchasing power

A(n) ____________ refers to the maximum quantity of a good that may be imported during a specified time period.

quota

Direct investment is the ______ type of global entry strategy.

riskiest

Exporting happens when a firm produces a product in its domestic plants and then ______.

sells it in a foreign country

Depending on the country, joint ventures sometimes require ______ when entering a foreign market.

shared ownership

In a joint venture, a company ______.

shares the financial burden with a local partner in a foreign market

Direct investment exposes a firm to ______ risk.

significant

True or False: Brazil is currently in the top ten of the world's largest economies.

true (8th largest)

Marketers might be less interested in countries with the highest purchasing power because of ______ growth and saturated markets.

stagnated

After a firm has determined its position in the global market, it will typically seek to meet the needs of global markets by ______.

tailoring its marketing mix to the needs of consumers in individual markets

A(n) ______ is a tax levied on a good imported into a country.

tariff

Which of the following have a direct impact on pricing in the global marketplace?

tariffs and anti-dumping laws national rules governing the competitive marketplace

A tariff is a ______ imposed on a product imported into a country.

tax

Some details used to evaluate the general economic environment include ______.

the trade deficit or surplus GDP

Firms spend millions of dollars to develop brand names that have no preexisting meaning in any known language because ______.

they want to avoid potential emberassment that langauge confusion can casue