Chapter 9
A special form of licensing in which one company grants another company the right to market its product in accordance with its standards in exchange for a financial commitment is called
franchising.
In many countries, Wendy's allows foreign businesspeople to use its name, logo, methods of operation, advertising, and products. In exchange, Wendy's receives a financial commitment and an agreement to conduct business in accordance with its standard of operations. Wendy's is engaging in
franchising.
According to your text, ____ are small technology-based firms operating in international markets within two years of their establishment and realizing as much as 70 percent of their sales outside the domestic home market.
"born globals"
Which of the following is most likely to engage in direct ownership activities internationally?
Internationally integrated structures
Which of the following is used to help maintain a more favorable balance of trade by a country?
Limiting imports
The trade alliance that includes Brazil, Argentina, Chile, and other countries is known as
MERCOSUR.
Which of the following alliances/agreements is the United States not a part of?
MERCOSUR.
Special interest groups and regulatory bodies are ______ forces that must be taken into account in international marketing.
Political and legal
Swiss-based Nestlé has taken a global approach to marketing its chocolate products. Which of the following is most easily standardized?
Product
At the heart of the ____ are agreements that provide legal ground rules for international commerce and trade policy.
WTO
If a newly formed country wanted to increase its international trade and reduce worldwide tariffs, it would most likely try to become a part of
WTO
Henderson Synthetics' management believes that several of the firm's products could have sizable markets in other countries. To maintain a low level of commitment with minimum effort and cost, Henderson should engage in international marketing through
exporting.
A subsidiary in a foreign country generally operates under
foreign management in order to develop a local identity.
If Germany, in an attempt to bolster the sales of its own auto manufacturers, decided to limit the number of automobiles that could be brought in from other countries, Germany would be using a(n)
quota
When a glove manufacturer in China is allowed to sell only a certain number of plastic gloves into Japan, that firm is facing a(n)
quota
72. The Grummond Group buys computer peripherals in industrialized countries and sells them to customers in developing countries. Grummond is most likely classified as a(n)
trading company
A ___________ is an organization that links buyers and sellers in different countries but is not involved in manufacturing.
trading company
Before the 1990s, most firms entered international markets
incrementally and slowly.
Levi Strauss markets its denim jeans in many countries and develops its marketing strategy as if the world were a single market. This approach to selling a standardized product in all countries represents which type of international marketing?
Globalization of markets
The contracting of noncore operations or jobs from internal production within a business to an external entity that specializes in that operation is known as
outsourcing
In considering the viability of potential international markets for Pepsi products, PepsiCo is advised to take into account __________, which provides insight into market potential.
per capita gross domestic product
Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with a(n) ________ structure.
export department
The extent of Raytheon's participation in global business is selling the batteries it manufactures to companies in Spain. In this case, Raytheon is a(n)
exporter
Approximately ____ of the world's purchasing power is outside of the United States.
2/3
In relation to international marketing, which of the following best describes direct ownership?
A company owns subsidiaries or facilities in foreign countries.
What is the primary distinction between a joint venture and a strategic alliance in international marketing?
A strategic alliance is formed by companies who have traditionally been rivals, which is not the case with a joint venture.
Which of the following trade alliances differs from others in its commitment to facilitating business and its practice of allowing the private sector to participate in a wide range of activities?
APEC
When Smithson Graphics decided to go international with its marketing effort, it adopted a global approach. Which factors did SG most likely experience difficulty as the firm applied a global strategy for marketing?
Advertising
Which of the following is not true of NAFTA?
Business licensing requirements have been increased.
Many marketers claim that ____ will become the world's largest market.
China
Which of the following describes a company hiring a foreign firm to produce a designated volume of its product to specification?
Contract manufacturing
Johnston Chemicals' president is very excited about the possibility of the firm's British subsidiary having access to customers in the entire EU. He realizes that it will be some time before this area truly becomes one market, primarily because of differences in which of the following?
Cultural factors
____ refers to the idea that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures.
Cultural relativism
IKEA, a Swedish retailer of contemporary furniture, operates several stores in various Scandinavian countries, as well as in the United States and Canada. Which of the following describes IKEA's level of commitment to international marketing?
Direct Ownership
Once a company makes a long-term commitment to a foreign market that has a promising political and economic environment, which of the following options then emerges as a possibility?
Direct Ownership
Which of the following lists the levels of involvement in global marketing from the lowest to the highest?
Domestic marketing, limited exporting, international marketing, globalized marketing
___________ can force businesspeople to buy and sell foreign products through a central agency, such as a central bank.
Exchange controls
Which of the following is often used to raise revenue for a country and/or to protect domestic products?
Import Tariff
In China, the price of imported Scotch is $30 per glass as opposed to Scotch from China which is $3. Which of the following do you think accounts for the difference in price?
Import tariff
What is the greatest advantage to an organization of having a subsidiary in a foreign nation?
Increase in cross-cultural approaches to management that allows subsidiaries to develop their own identity
Which of the following centralizes all of the responsibility for international operations?
International division structures
Japan's Sony Corporation is a prime example of a multinational enterprise. With this in mind, which of the following would most accurately characterize Sony's operations?
It has operations or subsidiaries in many different countries.
Which of the following is true about NAFTA?
It remains politically controversial.
One of the effects of NAFTA is the simplification of country-of-origin rules. This will likely hinder the international trade activities of
Japan
Which of the following countries has made the greatest inroads into other world markets?
Japan
If Caterpillar wished to reach the market in Malaysia but was leery of a direct investment in the country, it might provide a Malaysian operation with the knowledge to produce and market its products in exchange for a commission. This type of arrangement is called
Licensing
Questor Corporation owns the Spalding brand name but does not produce a single golf club or tennis ball. This arrangement is an example of what type of involvement level for international marketing?
Licensing
What level of commitment in international marketing may be most attractive when the political and economic stability of a foreign country is questionable?
Licensing
Globalization of markets requires developing marketing strategies as if the world were one market. Which of the following marketing mix variables is most difficult to standardize for globalization?
Media allocation
In many developing countries around the world, technology is enabling opportunities to "leapfrog" existing technology. What does this mean?
More advanced technology is reaching these countries even though they lack technological infrastructures.
The agreement between the United States, Canada, and Mexico that merges these three countries into one marketplace is called
NAFTA
Walmart is currently expanding its stores into Canada and Mexico. This expansion is being facilitated by the
North American Free Trade Agreement.
Caterpillar would like to better understand factors that would affect its ability to market construction equipment in various countries. Which of the following forces determine how trade barriers affect Caterpillar's marketing efforts?
Political and legal
Select the true statement.
Refusing to give payoffs and bribes in some foreign countries may put a marketer at a competitive disadvantage.
The Common Market of the Southern Cone (MERCOSUR) includes countries from
South America
Which of the following agreements provides a forum for tariff negotiations, reducing trade restrictions, resolution of international trade problems, and ground rules for international trade?
The World Trade Organization
Which of the following would be a benefit to a franchiser, such as Jiffy Lube, in expanding into international marketing?
The franchiser does not have to put up a large capital investment.
How does using an exporting intermediary limit the risk involved with global marketing?
This approach involves limited risk because the company has no direct investment in the foreign country.
A business partnership between a domestic firm and a foreign firm is known as
a joint venture.
The Foreign Corrupt Practices Act of 1977 makes it illegal for U.S. firms to
attempt to make large payments or bribes to influence policy decisions of foreign governments.
The gross domestic product is
an overall measure of a nation's economic standing.
The ___________ is the difference in value between a nation's exports and its imports.
balance of trade
The role of export agents is to
bring buyers and sellers from different countries together and collect a commission for arranging sales.
If The Limited Company relies on hiring a foreign textile manufacturer to produce a designated amount of clothing for its Express, Limited, and other stores, it is using
contract manufacturing
If a certain country considered handshakes in business transactions to be taboo and preferred to use nodding, this would be an example of differences in _____ forces.
cultural
Selling products that are not in demand in all world markets, such as hand-powered washing machines for use in countries where electricity is not universally available, represents an international marketing strategy focusing on
customization.
Miller's Home Furnishings uses marketing strategies aimed at markets within the United States, its home country. Miller's engages in
domestic marketing.
If Hyundai, a Korean automobile manufacturing firm, started selling its cars at unfairly low prices to Germany, Hyundai would be engaging in
dumpling
Government restrictions on the amount of a particular country's currency that can be bought or sold are known as
exchange controls.
Differences in standards of living, credit, buying power, and income distribution are all examples of _____ forces that must be considered in international marketing efforts.
economic
The United States' prohibition against importing cigars from Cuba is an example of a(n)
embargo
The environmental forces that affect foreign markets may differ dramatically from those affecting domestic markets. This makes a careful _______ a critical part of a successful international marketing strategy.
environmental analysis
Many companies choose to standardize their _____ across national boundaries to maintain a consistent and well-integrated corporate culture.
ethical behavior
The exchange rates of several European countries are linked together to a common currency, the
euro.
When asked where Laser Tools, Inc., markets its products, company president and founder Roger Helms says that "the world is just one big market." He feels anyone not taking this stance is systematically passing up profitable business. Helms's international marketing strategy is best described as
globalization of marketing.
MTV can now be seen by most of the world's population. This is an example of
globalization.
Organizations that employ standardized products, promotion campaigns, and prices for all markets are practicing what is known as
globalization.
Standardizing many Nike and Adidas shoe models worldwide is an example of
globalization.
The Mont Blanc Company plans to export expensive consumer gift items to Germany. The best overall economic measure of market potential would be Germany's
gross domestic product per capita.
When products are introduced into one nation from another, acceptance is far more likely
if there are similarities between the two cultures.
If Tasmania levied a duty on all goods purchased from the United States and other countries outside its borders that were brought into Tasmania, its businesses and citizens would be paying a(n)
import tariff.
The purchase of products from a foreign source is called
importing.
When the American company Exxon purchases crude oil from Saudi Arabia, it is engaging in
importing.
When a firm's products sell in foreign countries with little or no effort to obtain foreign sales, the firm is engaging in
limited exporting.
If a U.S. bicycle tire manufacturer has to form a partnership with the government of Indonesia in order to gain access to the country's rubber, a _____ has been formed.
joint venture
Timex, a U.S. based watchmaker -- recently entered into a partnership agreement with the Australian government to make watches. What type of partnership agreement does this situation most likely represent?
joint venture
The World Trade Organization accomplishes all of the following except
lending money to businesses interested in developing international markets.
Nestlé Food Company is a Swiss-based company that operates several divisions in the United States and other countries. This classifies Nestlé as a(n)
multinational enterprise.
Southern Tier Industries has operations in more than 30 foreign countries. The headquarters in Atlanta controls the entire organization while offering subsidiaries the freedom necessary to achieve success in local markets. Southern Tier Industries is an example of a(n)
multinational enterprise.
Firms that have operations or subsidiaries located in many countries are referred to as
multinational enterprises.
The unification of Europe through the European Union (EU)
permits virtually free trade among the member nations of the EU.
Maquiladoras are
production facilities in north-central Mexican states.
The term dumping refers to the sale of
products sold in foreign countries at unfairly low prices.
A limit on the amount of goods an importing country will accept for certain product categories during a specified time period is called a(n)
quota
Marketers of computer software, music CDs, and books are particularly affected by cultural differences in
standards regarding intellectual property
An alliance between Honda and Ford would most likely be classified as
strategic alliance
Nuhitzu believes it has the technological expertise to produce communication systems that will be leaders around the globe. Boston Electronics is widely regarded as having excellent management systems and superior marketing programs. To utilize these strengths, the two firms might form a(n) ___________ to work together on a worldwide basis.
strategic alliances.
Sometimes business partnerships are formed between traditional rivals competing for market share in the same product class. These partnerships are known as
strategic alliances.
Toshiba Electronics is very interested in taking advantage of business opportunities in India but does not have access to India's market. Toshiba has the patent on a low-cost, quality computer system that could assist small businesses in India. Sony Computer, Toshiba's competitor, is experienced in India's small business market but does not have a computer comparable to Toshiba's. If Toshiba and Sony work together to utilize these strengths to seize this opportunity in India, what type of business structure would they likely use?
strategic alliances.
the country with the highest GDP is
the United States
Another name for the European Union is
the common park
Franchising offers all the following benefits for franchisers except
the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and royalties.
The unconscious reference to one's own cultural values, experiences, and knowledge when encountering new and different cultures is known as
the self-reference criterion.
A large farming cooperative that focuses on the production of fruits and vegetables uses a business that sells the farmers' products in foreign countries and also provides consulting, insurance, legal assistance, and warehousing to the cooperative. This business would most likely be called a(n)
trading company
A company not involved in manufacturing that brings together buyers and sellers in different countries is usually referred to as a
trading company.