Marketing Chapter 5

The World Trade Organization (WTO) aims to do which of the following? (Select three)

--Mediate trade disputes --Serve as a forum for trade negotiations --Monitor national trade policies

A company considering culture when marketing a product in a foreign country would want to be sure that promotional messages _______, _______, and _______. (Select three)

--are translated correctly --reflect the country's social values --convey the intended meaning

Cabi is a women's fashion clothing brand based in Los Angeles, California. Cabi's design team in Los Angeles creates its fashion line sixteen months to two years in advance. The design team selects fabrics and other details to create the clothes. Cabi then hires manufacturers in China to produce the items according to the specifications. Once completed, the garments are shipped to California on container ships that take up to two months in transit. It's a complex process but one that enables Cabi to control costs. Which method is Cabi using to engage in global marketing?

Contract manufacturing

A country's _______ is the difference between the value of a country's exports and the value of its imports over a given period.

balance of trade

Nederlander's first expansion globally was to purchase three theaters in London, England. This strategy of entering global markets is called _______.

direct investment

Matcha green tea has become a very popular beverage in recent years. Soar Organic produces some of the finest matcha green tea and works with sales agents and distributors in the United States, Canada, and Australia to aid with international financing, shipping, and supporting Soar Organic's export needs. The sales agents who reside in the countries to which Soar Organic is exporting are called _______.

export agents

Companies must consider a country's economic factors because nations with __________ may be poor markets for expensive industrial machinery but good ones for ___________.

low per-capita incomes, agricultural hand tools

A company that allows its individual subsidiaries to compete independently in domestic markets with unique or slightly varied products is using a _______.

multidomestic strategy

Yeti is based in Austin, Texas. The company produces a variety of high-quality products such as coolers, beverage containers, chairs, bags, and branded apparel. It is a publicly traded company operating in the United States, Europe, Canada, Asia, and Australia and manufactures products in the United States, China, and Thailand. A brief look at Yeti's current job openings reveals professional positions in the United Kingdom, the Philippines, and Thailand. Assuming Yeti has office locations in these countries, it would be classified as a ______ firm.

multinational

The trade agreement formally known as the North American Free Trade Agreement (NAFTA) is an agreement between _______.

the United States, Canada, and Mexico

A company that alters a basic product to fit in a local market is using a _______ strategy.

product adaptation

_______ is the riskiest way to enter a foreign market but provides the highest return.

Foreign direct investment

After a successful run in New York, the Nederlander would like to take Evita to a theater in Argentina as Eva Perón was a much-loved historical figure there. This decision was likely based on the Nederlander Group's examination of Argentina's _______.

cultural factors

Many customers appreciate the benefits of joining Amazon's Prime membership program that provides free shipping on many products. However, some products on Amazon's site are sold by companies outside the United States and are not eligible for Prime shipping since they are shipped directly by the exporter. Which of the following statements is true regarding Amazon and the suppliers who export their items?

Amazon's marketplace has enabled many small firms to participate in global business.

Over the last 30 or so years, Toyota, a Japanese firm has made a considerable investment in the United States and has several manufacturing plants where it produces vehicles for the U.S. market. Its two plants in Kentucky make the Camry, Lexus ES 350, and Avalon. A plant in Texas produces its truck line— the Tundra and Tacoma. In total, Toyota annually produces more than 1.2 million vehicles in the United States. Which method of global marketing best describes Toyota's manufacturing operations in the United States?

Foreign direct investment

_______ means recognizing and reacting to international marketing opportunities, using effective global marketing strategies, and being aware of threats from foreign competitors in all markets.

Global vision

The Nederlander Producing Company has expanded to China through a strategic partnership with the China Arts and Entertainment Group (CAEG). They are hoping to open a production of Ghost, based on the movie by the same name. Nederlander has been forced to cut one song from the show due to censorship imposed by the nation's government. Which external factor does this reflect?

Political factors

Identify the stage of global business development by matching the descriptions in the left column to the stages of global business development in the right column.

Stage 1: companies operate in one country and sell products in others. Stage 2: Companies set up foreign subsidiaries to handle sales in one country. Stage 3: Companies operate an entire line of business in another country. Stage 4: Companies operate virtually, with executives and core corporate functions likely in different countries.

Global marketing must take into consideration the value of its country's currency in relation to the countries' currency where its products will be sold. Over the last several years, the U.S. dollar has been strong, meaning that it has a higher value than the currency in other countries. If the U.S. dollar is strong, which of the following is true?

Trade deficits may grow.

The _______ offers low-interest loans, advice, and information to developing nations.

World Bank

Direct foreign investment can occur through _______.

acquisition of a foreign company or building an international division

When a country can produce and sell a product at a lower cost than any other country or when it is the only country that can provide a product, it is said to have ______.

an absolute advantage

In a global economy, products and services are exchanged around the world. Ford Motor Company has production plants in Mexico and purchases component parts from various suppliers around the world which are imported to Mexico to be used in production. Once the automobiles are completed, the finished cars are exported primarily to the United States and Canada. The difference between the value of exports of a country and the value of its imports over a given period is called _______.

balance of trade

Employees working long hours and enduring sweatshop conditions are a concern in ______.

contract manufacturing

A form of trade in which all or part of the payment for goods or services is in the form of other goods and services is called _______.

countertrade

Hoover manufactures vacuums and wanted to expand its manufacturing capabilities. Hoover contracted with an India-based firm and invested funds to provide technology and equipment in a new manufacturing plant in Mumbai. In exchange, Hoover received vacuums that were produced in India and could be sold worldwide. This practice is called _______.

countertrade

Pranav works for a German company that provides components for automobiles. He is preparing for a trip to China to meet with car manufacturers and had a short session on business etiquette. One recommendation regarded the presentation of business cards. The recommendation stated that it's a much more formal process in China and that it was important to use two hands when presenting a card to another person. Pranav is learning about the importance of _____ in global business.

culture

Unilever was able to identify an expanding middle class within certain emerging markets and capitalized on this opportunity with several initiatives. In India, Hindustan Unilever Limited (HUL) trained local women to be rural sales agents, selling Unilever products within their communities. This initiative was a result of _______ in the external environment.

demographic factors

Following natural disasters such as hurricanes and tornadoes, the demand for building products such as drywall or gypsum panels and lumber increases. Sometimes, these events lead to higher prices for building products as demand exceeds supply. However, due to global exporting, the prices might decline. U.S. gypsum manufacturing companies complained that China-based Knauf Tianjin was _____ products and selling panels for lower prices than they charged in China.

dumping

Luxury goods such as designer handbags and watches are highly favored in developed countries such as France, Italy, Germany, the United States, and other countries around the globe where consumers have high discretionary income and enough purchasing power to afford these items. Thus, _____ factors are important considerations when selecting global markets for export opportunities.

economic

The _______ is the price of one country's currency in terms of another country's currency.

exchange rate

Although _______ provides the least amount of return, many companies choose this method as a first step in international marketing because it is also low risk.

exporting

Heritage Glass in rural Tennessee expects 60 to 70 percent of its sales to come from regions outside of the United States including the Philippines, Europe, and South America. Heritage Glass has a _____ vision.

global

Canon is a Japanese firm specializing in imaging and optical products such as cameras, photocopiers, and printers. The company recognizes that consumers around the world have similar needs regarding the functions of cameras, photocopiers, and printers. Therefore, Canon can create and manufacture models that are sold around the world with few to no modifications. This is an example of _______.

global marketing standardization

In India, water can be scarce. As a result, Unilever sells the RIN detergent bar. The bar utilizes an anti-foam molecule developed by Unilever to halve the water and time needed for rinsing laundry. This product development was impacted by _______ in the external environment.

natural resources

Remote geographic locations such as the Bahamas must rely on imported goods since the country cannot produce everything it needs. However, the Bahamas is well known for its cigars and rum, which are exported around the world. The principle that captures this example of goods imported to the Bahamas and exported from the Bahamas is called the _______.

principle of comparative advantage

Unilever also recognized that lower-income consumers in emerging markets may not be able to afford Unilever products. As a result, Unilever offers single-use packets of their existing soap and shampoo products at a lower price than traditional sizes. This is an example of a _______ strategy.

product adaptation

Farmers who grow wheat and corn in Australia can export their grains to Japan. However, Japan has limits on the quantity of grain that can be imported into the country. Japan is using _____ to limit trade.

quotas

Caterpillar is a manufacturer of heavy machinery that is sold around the world. A growing business for this U.S.-based company are products that feature the company's name or logo. Branded merchandise is available in over 150 countries through agreements known as _____, in which, for a fee, Caterpillar allows other firms to use its name or logo on products such as hats, boots, apparel, and scale model replicas of its equipment.

licensing

Capital Finance provides investment consulting services to businesses. It has contracts with several companies around the globe, including companies in Thailand, Australia, and India. The Internet has enabled Capital Finance to serve customers around the globe. It is estimated that _____ percent of global trade is facilitated by digital technology.

50

Captiva designs and manufactures a line of swimsuits for active women pursuing surfing, sailing, and other water sports. The brand is becoming popular since it is designed by women and is perfect for active lifestyles. Captiva uses its website to fulfill orders from women around the world but has its offices in the United States. Which stage of global business best describes Captiva's operations?

First stage

Lihua is learning about global market standardization. She was explaining to a friend the types of products that could easily be standardized for sale around the world except for language differences. Which of the following products could most likely be standardized?

Flash drive

Miguel lives in Mexico and is studying at a university in Monterrey. He's interested in studying abroad and chooses a program in Angers, France that is approved by his university. He's interested in learning more about the city of Angers and locates a website sponsored by the local tourism board. Miguel doesn't read or speak French. Which of the following could most easily help Miguel use the tourism website?

Language translation software

In 2012, the ______ was signed by Colombia, Chile, Peru, and Mexico to create a single region for the free movement of goods, services, investment, capital, and people.

Pacific Alliance

Free trade means _______.

allowing people to buy and sell in other countries without restrictions

Solumbra designs and manufacturers protective clothing which helps people reduce the risk of skin cancer from exposure to ultraviolet rays. Its hats, shirts, shorts, and pants are sold globally through its website as well as through retail accounts in specialty stores. Solumbra's product line is consistent across its global markets which provides efficiency in manufacturing. Minimal modifications are made to the information and language on the product tag. Solumbra is utilizing a(n) _____ strategy for product decisions.

global marketing standardization

A __________ is a tax levied on goods entering a country, while a _________ is the exclusion of all products from certain countries or companies.

tariff, boycott

Apple recently announced that it was investing billions to build a new manufacturing facility near its headquarters in California to produce screens for computers, tablets, and smartphone devices. This investment is part of Apple's strategy to control all component parts of its products and to return production to the United States, a process called _______.

inshoring

If the Nederlander Producing Company wanted to take the production of Newsies to a theater in Paris but realized that some of the song lyrics would need to be changed in order for French audiences to understand the jokes, it would be using a _______ strategy.

product adaptation

McDonald's operates restaurants around the world. The company seeks to make modifications in its menu selections and promotions to appeal to each local market. McDonald's recognizes how individual customer differences in culture and local ingredients impact its business opportunities. Thus, McDonald's is a global company that is acting locally to ensure its success. This strategy is known as _______.

product adaptation

Four Roses produces bourbon in Kentucky. It has a growing export business due to the global popularity of the beverage. Some countries, such as China, impose tariffs on bourbon produced in the United States to strengthen their own domestic brands. This strategy is known as _______.

protectionism

A company chooses to use the same product in every foreign market that it serves and does not alter any promotional messaging. The company is using a _______ strategy.

straight extension