International Marketing FINAL EXAM

In the context of controlling middlemen, parallel importing is also known as _____. A. secondary wholesaling B. black marketing C. backwashing D. industrial piracy E. smuggling

A. secondary wholesaling

Which of the following is TRUE regarding the stages of international marketing involvement?

A firm may be in more than one state simultaneously.

The ________ measures customers' satisfaction and perceptions of quality of a representative sample of America's goods and services

American Customer Satisfaction Index (ACSI)

In the communications process in advertising, during the _____ stage, a consumer takes certain actions to respond to a decoded message. A. feedback B. receiver C. message channel selection D. encoding E. source identification

B. receiver

Grengens, a European chocolate manufacturer, received several complaints from customers about the quality of its product when it began selling them in a tropical country. The firm had to repackage its chocolate bars in an extra plastic wrapper to protect it from the heat and dust. Which of the following factors in the local market is most likely to have dictated Grengens' product adaptation in this scenario? A. Legal requirements B. Economic requirements C. Political requirements D. Climatic requirements E. Technological requirements

D. Climatic requirements By adapting the packaging of its products to protect them from extreme heat and dust, Grengens has been influenced by the climatic requirements of the tropical country. Legal, economic, political, technological, and climatic requirements of the local marketplace often dictate product adaptation.

Which of the following was a customs union before becoming a common market? A. NAFTA B. DR-CAFTA C. Israel-Mexico Free Trade Agreement D. The European Union E. South Asian Free Trade Area

D. The European Union

The first relationship activity in building a strategic alliance, where senior executives leverage their personal networks is labeled as _____. A. imaging B. initiating C. committing D. dating E. interfacing

D. dating The first relationship activity in building a strategic alliance is labeled as dating. It involves senior executives leveraging personal networks and wondering how to respond to inquiries and how to seek out possibilities. Refer to Exhibit 12.3-Building Strategic Alliances.

As some business services have intrinsic value that can be embodied in some tangible form, they can be produced in one country and exported to another. Which of the following is an example of this?

Data processing services

Which of the following is the biggest threat to the fast pace of growth China is experiencing?

Economic volatility that accompanies fast growth.

All three Baltic states started off with the same legacy of efficient industry and American-style capitalist economies.

FALSE The Baltic states started off with roughly the same legacy of inefficient industry and Soviet-style command economies.

In the context of the different kinds of middlemen, the WTO in 2003 ruled export management companies to be in violation of international trade rules.

FALSE The WTO in 2003 ruled foreign sales corporations to be in violation of international trade rules, thus starting a major trade dispute with the European Union that still simmers and occasionally boils over.

The marketing process substage in the United States economy from 1950 to the present is mass production.

FALSE The marketing process in the United States economy from 1950 to the present is said to be in a substage known as mass distribution.

The more developed an economy, the lesser the variety of marketing functions demanded.

FALSE The more developed an economy, the greater the variety of marketing functions demanded, and the more sophisticated and specialized the institutions become to perform marketing functions.

Which of the following thinkers is famous for his statement on the deep influence of geography on history, economics, and consumer behavior?

Phillip Parker

According to C. K. Prahalad, which of the following represents the misconception that leads international markets to ignore the bottom-of-the-pyramid markets?

Products usually developed for more affluent consumers will not be appropriate for BOPMs.

At which state is the primary focus of operations and production to service domestic market needs while the firm has permanent productive capacity devoted to the production of goods and services to be marketed in foreign markets?

Regular foreign marketing

In the United States, unrelated individuals keep a certain physical distance between themselves and others when talking or in groups. We do not consciously think about that distance; we just know what feels right without thinking. Some one from another culture would not necessarily understand this and would apply their own rules for contact when speaking. The preceding is an illustration of what is called applying a _________when reviewing the mentioned social custom of contact.

Self-reference criterion (SRC)

Which of the following was designated as China's first Special Economic Zone?

Shenzhen

Which of the following is an uncontrollable element for an international marketer?

Structure of distribution

_____ has replaced Nanjing, to become Jiangsu province's number one economy and foreign trade center.

Suzhou

Administered pricing is an attempt to establish prices for an entire market.

TRUE

The trend toward privatization is currently a major economic phenomenon in industrialized as well as in developing countries.

TRUE Many countries have deregulated industry, opened their doors to foreign investment, lowered trade barriers, and begun privatizing SOEs. The trend toward privatization is currently a major economic phenomenon in industrialized as well as in developing countries.

The DR-CAFTA includes a wide array of tariff reductions aimed at increasing trade and employment.

TRUE The DR-CAFTA includes a wide array of tariff reductions aimed at increasing trade and employment among the seven signatories. Thus, it represents another important step toward the ultimate goal of a free trade agreement encompassing all the Americas

The behavior of channel members in the distribution process is the result of the interactions between the cultural environment and the marketing process.

TRUE The behavior of channel members is the result of the interactions between the cultural environment and the marketing process. Channel structures range from those with little developed marketing infrastructure, such as those found in many emerging markets, to the highly complex, multilayered system found in Japan.

Which of the following is the main reason for corporations being the forerunners of innovations in society?

The access they have to ideas from around the world.

Which of the following stages of Rostow's five-stage model of economic growth do highly-industrialized countries like Japan and Germany fit into?

The age of mass consumption

Which of the following is the most significant factor affecting the international market for industrial goods and services?

The degree of industrialization

Which of the following factors accounts for greater market similarities among industrial goods customers than among consumer goods customers?

The inherent nature of the product

Buyers in country X prefer to use the older, cheaper version of Firm A's product although it is bulkier and less user-friendly. Buyers in country Y, however, prefer to use the newer, lightweight version for its new user interface. Which of the following statements is the most accurate conclusion from the given information?

The perception of quality can differ across countries.

_____ is China's third largest industrial city after Shanghai and Beijing.

Tianjin

Which of the following most accurately represent the "three direct links" leading to the establishment of One China?

Transportation, trade, and communications.

The process of adjusting to a new culture is known as:

acculturation

The ISO 9000 certification allows a company to:

differentiate its product from its competitors.

Hofstede's data on cultural values suggest that:

diffusion of innovations will be slower in countries that are low on individualism and high on uncertainty avoidance.

One of the advantages of the emergence of gender equality is the _______ gap between the sexes being narrowed in many places around the world.

education

To the foreign marketer, the similar-but-different feature of cultures has important meaning in gaining cultural _______.

empathy

According to Jared Diamond, a professor of physiology, innovations spread faster north to south than east to west.

false

Acculturation refers to the process of becoming an agent of change by innovating.

false

The Masculinity/Feminity Index (MAS), identified by Geert Hofstede, focuses on risk orientation.

false

Which of the following social institutions that influence culture has comparatively the least impact on culture?

government

The Global Harmonization Task Force is an international effort that is attempting to:

harmonize standards for several international industrial sectors.

The lack of universal standards in the industrial goods market:

increases the cost of doing business

In knowledge-based services such as consulting, engineering, education, and information technology, ________ are a key driver of success and failure.

intellectual property issues

The negotiators in the Pearl River Delta are reputed to be:

relatively honest and forthright.

The aesthetics of a culture must be taken into account by marketers when:

styling the product and its packaging

According to Phillip Parker, a marketing professor, there are strong correlations between latitude and the per capita GDP of countries.

true

Cultural values can predict such consumer behaviors as ______ and impulsive buying

word-of-mouth communications

Which of the following is true about strategic planning? A. It is conducted at the lowest levels of management. B. It deals with a company's products and capital. C. It excludes the research component of a company. D. It is designed to solely address marketing and advertising questions at the local level. E. It is most commonly referred to as market planning.

B. It deals with a company's products and capital. International corporate planning is essentially long term, incorporating generalized goals for an enterprise as a whole. Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and the long- and short-term goals of a company. Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets. Tactical plans are made at the local level and address marketing and advertising questions.

Which of the following countries has 100 percent literacy rate? A. Mexico B. Canada C. Colombia D. Argentina E. Peru

B. Canada Canada and the U.S. have 100 percent literacy rate. Refer to Exhibit 9.3-Infrastructure of Most Populous American Countries.

Which of the following is considered as the single most important environmental element of a country to which the foreign marketer must adjust the marketing task? A. Political stability B. Economic level C. Social norms D. Literacy level E. Cultural orientation

B. Economic level The economic level of a country is the single most important environmental element to which the foreign marketer must adjust the marketing task. The stage of economic growth within a country affects the attitudes toward foreign business activity, the demand for goods, the distribution systems found within a country, and the entire marketing process

Which of the following makes Walmart's transactions with suppliers highly efficient and lowers its cost of operations? A. Clean business reputation B. Internal Internet-based system C. Ability to beat competitors D. Outreach programs to placate small retailers E. Ability to influence foreign governments

B. Internal Internet-based system One of Walmart's strengths is its internal Internet-based system, which makes its transactions with suppliers highly efficient and lowers its cost of operations.

A part of cross-cultural analysis requires understanding of one's own culture. Why is it surprising that understanding one's own culture requires additional study?

Because much of cultural influences on market behavior is at the subconscious level.

Which of the following is the reason why the international marketer's task is more complicated than that of the domestic marketer?

Because the international marketer must deal with at least two levels of uncontrollable uncertainty instead of one.

The ties that bind members of the Commonwealth of Independent States stem mainly from their: A. agreement to the European Trade Pact. B. former Soviet membership. C. UN membership. D. affiliation to the Eurasian Alliance. E. WTO membership.

B. former Soviet membership.

In Spain, a new medium for advertising called Publicoche includes: A. lasers projected onto clouds. B. private cars that are painted with advertisements. C. buses fitted with television sets showing promotional messages. D. financing of popular sporting and entertainment events. E. hot air balloons printed with promotional messages.

B. private cars that are painted with advertisements.

Which of the following regions is considered as the information technology (IT) corridor in north China?

Beijing-Tianjin

Which of the following countries has the largest number of retailers? A. United States B. Argentina C. China D. Brazil E. Japan

C. China has the largest number of retailers. Refer to Exhibit 15.2-Retail Structure in Selected Countries.

Which of the following actions does the marketing plan in Phase 3 of the international planning process begin with? A. Creating a management performance guide B. Evaluating host-country constraints C. Conducting a situation analysis D. Evaluating home-country constraints E. Exploring the distribution options

C. Conducting a situation analysis In Phase 3 of the planning process, a marketing plan is developed for the target market—whether it is a single country or a global market set. The marketing plan begins with a situation analysis and culminates in the selection of an entry mode and a specific action program for the market.

_____ in advertising is a thorny issue, because most member countries of the European Commission have different interpretations of what constitutes a misleading advertisement. A. Discrimination B. Endorsement C. Deception D. Plagiarism E. Fear mongering

C. Deception

Which of the following is NOT a factor that has contributed to the rapid economic growth of NICs (newly industrialized countries)? A. Political stability B. Well-established economic and legal reforms C. Decrease in labor population D. Outward orientation E. Entrepreneurship

C. Decrease in labor population Political stability, well-established economic and legal reforms, outward orientation, and entrepreneurship are factors behind the remarkable success of NICs.

Pizza Hearth is in the process of deciding on the mode of entry into countries of Eastern Europe. Which phase of the international planning process is Pizza Hearth currently in? A. Preliminary analysis B. Defining market segment C. Developing the marketing plan D. Implementation and control E. Standardization of the marketing mix

C. Developing the marketing plan

Current data says that foreign investments in the U.S. amount to _________

$23.4 trillion

The rural population, which accounts for almost three-fourths of the Chinese population, usually receives about _____ percent of the central government budget.

10

Ralph Waite has just been assigned the task of reviewing his company's international investment opportunities. He knows that his view of the list of opportunities should be tempered by foreign environment uncontrollable that might be encountered. Which of the following would be the BEST illustration of a foreign environmental uncontrollable that Mr. Waite should investigate?

A country's level of technology.

To be globally aware, an international marketer must have all of the following EXCEPT:

A knowledge of microeconomics

All of the following would be among the domestic marketer's controllable environment variables EXCEPT:

Competitive structure

Which of the following is closely related to self-reference criterion?

Ethnocentrism

Which of the following factors spurs demand for technologically advanced products in the world?

Expanding economic and industrial growth in Asia

Mercosur is a free trade group formed by the United States of America.

FALSE free trade group formed by Argentina, Brazil, Paraguay, and Uruguay.

Which of the following provinces of China shares the closest economic ties with Russia?

Heilongjiang

Liaoning province of Northeast China has the closest economic ties with _____.

Japan

The national language of China is standard _____ but more than 56 dialects and other languages are spoken across the country.

Mandarin

Which of the following are driving a strong level of interest in the ISO 9000 certification?

Marketplace requirements

Aside from the United States and Japan, _____ is the most important single national market.

People's Republic of China

Which of the following is an obvious strategy organizations should use to build global awareness into organizations?

Select individual managers specifically for their demonstrated global awareness.

The primary obstacles to success in international marketing are a person's _________ and an associated ethnocentrism.

Self-reference criterion

ASEAN+3 is a forum for ASEAN ministers plus ministers from China, Japan, and _____.

South Korea

In the context of linguistic distance, which of the following languages is the most distant from English?

Thai

Which of the following reflects the relation between international business and domestic business?

The ability to invest abroad is to a large extent a function of domestic economic vitality.

Political explanations of Japan's crisis during the 1990s identified two villains. One of them was the powerful Japanese bureaucracy. Which of the following is the other one?

The long entrenched Liberal Democratic political party.

Which of the following is true of the marketing opportunities in Greater China?

There are extreme differences in economic well-being, cultures, and political structures.

Which of the following countries would be characterized as being in Stage 2 of Rostow's five-stage model of economic growth?

Vietnam

Most analysts predict that China would see an 8 to 10 percent average GNP growth in the next 10 to 15 years. All of this growth is primarily dependent on China's:

ability to deregulate industry.

According to traditional definitions, culture is transmitted from generation to generation.

true

Understanding one's own culture normally requires no additional study.

False

The most rapidly growing economies in the Asia Pacific region during the 1980s and 1990s, Hong Kong, South Korea, Singapore, and Taiwan are often referred to as the _____.

Four Dragons

In some parts of the world, language is itself thought of as a social institution, often with political importance. Which of the following countries best exemplifies the above statement?

France

Which of the following is the most effective way to achieve organizational global awareness?

Have a culturally diverse senior executive staff or board of directors.

Which of the following actions is important for foreign marketers in order to be effective in a foreign market?

Learning to appreciate the intricacies of cultures different from their own.

Which of the following is true of the ISO 9000 standards?

The ISO 9000 standards are a certification of the quality control system that a company has in place.

Which of the following would be the BEST illustration of the "alien status" found in the political and legal arena that sometimes cause problems for international marketers as they attempt to doing business in foreign countries?

The Indian government told Coca-Cola that it must reveal its "secret formula" if it wished to continue doing business in India.

Which of the following is the primary reason behind the inaccessibility of most of the 1.3 billion potential consumers?

The distribution network is poor or absent.

James Day Hodgson, former U.S. ambassador to Japan, describes culture as a _____ which according to him is tough to get through, but with effort and patience could often lead to success.

thicket

Which of the following countries rejected the euro? A. Austria B. Greece C. Finland D. Denmark E. Spain

D. Denmark

Which of the following is true about international corporate planning? A. It predominantly deals with a company's products, capital, and research. B. It only addresses marketing and advertising questions. C. It refers to the plans that are made at the local level. D. It incorporates generalized goals for an enterprise as a whole. E. It solely deals with the tactical issues of marketing.

D. It incorporates generalized goals for an enterprise as a whole. International corporate planning is essentially long term, incorporating generalized goals for an enterprise as a whole. Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and the long- and short-term goals of the company. Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets. Tactical plans are made at the local level and address marketing and advertising questions.

Which of the following is true of state ownership? A. Privatization of state-owned enterprises blocked the release of immediate capital to invest in strategic areas. B. State ownership is the most ideal engine for economic growth. C. Privatization of state-owned enterprises continually drained the future national resources. D. State ownership has resulted in complicated and unpredictable regulatory environments. E. State ownership has consistently resulted in the inclusion of foreign and domestic private ownership, and the formation of efficient public companies.

D. State ownership has resulted in complicated and unpredictable regulatory environments.

With respect to the political factors that affect supranational markets, which of the following is one of the most cherished possessions of any nation? A. A two-party system B. A three-party system C. State federalism D. State sovereignty E. A benevolent upper class

D. State sovereignty Before entering into an economic union, a country should be clear about the advantages of the economic union. Moreover, the benefits must greatly outweigh the disadvantages before nations forgo any part of their sovereignty. It is therefore implied that state sovereignty is a cherished possession of any nation.

39. _____ planning is conducted at the highest levels of management and deals with products, capital, research, and the long- and short-term goals of a company. A. Market B. Tactical C. Single-use D. Strategic E. Personnel

D. Strategic Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and the long- and short-term goals of a company.

Which of the following is most likely to occur in the international planning process once a "go" decision in Phase 3 has been taken? A. The objectives and goals phase B. The budget phase C. The action-program(s) phase D. The implementation and control phase E. The communication phase

D. The implementation and control phase A "go" decision in Phase 3 of the international planning process triggers implementation of specific plans and anticipation of successful marketing.

Which of the following is considered to be one of the extraneous variables that affect the rate of diffusion of an object? A. The absolute marginal value of the innovation relative to the old B. The actual attributes of the innovation C. The climatic conditions of the region in which the market is located D. The method used to communicate the idea E. The degree of actual novelty of the innovation

D. The method used to communicate the idea At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived newness, the perceived attributes of the innovation, and the method used to communicate the idea.

In some countries, maintenance of automobiles is not the norm, and they are not repaired until they break down. Since the consumer is automatically angry with the manufacturer when something goes wrong with the vehicle, repair and maintenance has become a concern of the various automobile manufacturers in this market. In which of the following components of the product component model would the management need to make improvements if problems such as the one above are to be solved? A. The core component B. The functional component C. The packaging component D. The support services component E. The price component

D. The support services component

At the most general level, the _____ represents the most important and comprehensive trade agreement in history. A. NAFTA B. Amsterdam Treaty C. MERCOSUR D. WTO E. ASEAN

D. WTO

One of the first factors that gave the European Union an edge over others in the process of becoming a common market was: A. a similarity in agriculture and monetary policies. B. a similarity in political systems. C. a similarity in languages. D. a well-developed transportation network. E. a common affiliation toward communism.

D. a well-developed transportation network.

In the context of factors affecting choice of channels, which of the following is one of the key elements in distribution decisions? A. Selection of optimum container sizes B. Volume discounts and rebates C. Functions performed by middlemen D. Local advertising modes E. Target market culture

C. Functions performed by middlemen Distribution channels vary depending on target market size, competition, and available distribution intermediaries. Key elements in distribution decisions include the functions performed by middlemen (and the effectiveness with which each is performed), the cost of their services, their availability, and the extent of control that the manufacturer can exert over middlemen activities.

Of all the elements of the marketing mix, decisions involving _____ are those most often affected by cultural differences among country markets. A. direct selling B. public relations C. trade shows D. advertising E. sales promotion

D. advertising Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

NAFTA differs from Mercosur in that NAFTA: A. was provided legal basis by the Treaty of Asunción. B. is the second-largest common-market agreement in the Americas after Mercosur. C. includes Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay. D. aims to address and improve all aspects of doing business within North America. E. aims to establish a common currency for its Latin American members.

D. aims to address and improve all aspects of doing business within North America.

In the context of foreign market entry, _____ are long-term, nonequity associations between a company and another in a foreign market. A. consortia B. exporting arrangements C. direct foreign investments D. contractual agreements E. joint ventures

D. contractual agreements Contractual agreements are long-term, nonequity associations between a company and another in a foreign market.

With respect to advertising, _____ is especially important when a budget is small or where there are severe production limitations. A. class distinction B. politicization C. inventory analysis D. creativity E. following a formula

D. creativity

A _____ has reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the group. A. preferential trade area B. currency union C. regional cooperation for development D. customs union E. free trade area

D. customs union A customs union enjoys the free trade area's reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the union.

A _____ is an intermediate step in the transition from a free trade area to a common market. A. political union B. currency union C. regional cooperation for development (RCD) D. customs union E. preferential trade area

D. customs union The customs union is a logical stage of cooperation in the transition from an FTA to a common market.

Home-country middlemen are also known as _____ middlemen. A. area B. local C. merchant D. domestic E. regional

D. domestic

In the context of the communications process in advertising, problems of literacy, media availability, and types of media create challenges in the communications process at the _____ step. A. feedback B. decoding C. amplification D. encoding E. message selection

D. encoding

Which of the following primary relationship activities in building strategic alliances involves facilitating the creation of personal relationships at many levels, traveling to partner facilities and engaging in technical conversations, and blending social and business time? A. Imaging B. Initiating C. Interfacing D. Dating E. Committing

C. Interfacing The fourth relationship activity in building a strategic alliance is labeled as interfacing. It involves facilitating the creation of personal relationships at many levels, traveling to partner facilities and engaging in technical conversations, and blending social and business time. Refer to Exhibit 12.3-Building Strategic Alliances.

The Norton group, a manufacturer of toiletries and cleaning products, uses the name SparkleX, for most its products in all of their international markets. The name has created a universal appeal for its products as customers identify their products with the name. Hence, SparkleX can be regarded as a _____. A. retailer's brand B. shelf brand C. store brand D. global brand E. dual brand

D. global brand

Which of the following countries is a part of the free trade area known as CFTA? A. France B. Uruguay C. The United States D. Argentina E. Brazil

C. The United States To further support trade activity, the United States and Canada established the United States-Canada Free Trade Area (CFTA), designed to eliminate all trade barriers between the two countries.

Omigar Appliances, a Korean company that manufactures kitchen appliances, alters the design of its chimneys to suit the needs of its Japanese consumers. The Japanese prefer compact and efficient appliances to fit their small kitchens. The component of Omigar's chimneys that is most likely altered in this scenario is the _____. A. packaging component B. invisible component C. core component D. ancillary component E. support services component

C. core component

Sole Tales, a shoe manufacturer in Puerto Rico, shipped its entire production to San Francisco and brought it back to its home country to market it as "Made in the U.S." The manufacturer knew for a fact that people would prefer buying products made in the U.S. rather than those domestically produced. The factor that is influencing the perception of the customers in the given scenario is called the _____. A. Doppler effect B. comparative advantage effect C. country-of-origin effect D. mass effect E. placebo effect

C. country-of-origin effect

In the international communications process, _____ is defined as the interpretation by the receiver of the symbolism transmitted from an information source. A. encoding B. message selection C. decoding D. message channel selection E. feedback evaluation

C. decoding

More household money goes for _____ in emerging markets than in developed markets. A. housing B. durable goods C. food D. leisure E. education

C. food

A name, term, sign, symbol, design, or combination used worldwide to identify goods or services of one seller and to differentiate them from those of competitors is called a _____. A. copier B. copymark C. global brand D. brand's equity position E. brand jingle

C. global brand A global brand is defined as the worldwide use of a name, term, sign, symbol (visual and/or auditory), design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors.

A company uses _____ when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received. A. penetration pricing B. everyday low pricing C. predatory pricing D. price skimming E. psychological pricing

D. price skimming

_____ is now Japan's most important trading partner.

China

Which of the following is an uncontrollable factor in a domestic environment?

Competitive structure

C. K. Prahalad has cited two primary misconceptions behind the international marketers ignoring the bottom-of-the-pyramid markets. One of the reasons is that the products and services developed for more affluent consumers are not appropriate for these markets. Which of the following is the other misconception?

Consumers in the bottom-of-the-pyramid markets lack both money and technology.

Which of the following social institutions introduce innovations to society?

Corporations

Compared to the foreign environment uncontrollable variables, which of the following elements is excluded from the domestic marketer's list of uncontrollable variables?

Cultural Forces

________ is rapidly becoming a major after-sales service when selling technical products in countries that demand the latest technology.

Customer training

Which of the following countries is a member of the free trade agreement DR-CAFTA? A. Bahrain B. Bhutan C. Morocco D. Costa Rica E. Oman

D. Costa Rica In August 2005, President George Bush signed into law a comprehensive free trade agreement among Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States. This free trade agreement is known as DR-CAFTA.

In the context of the evolution of the marketing process, which of the following would be considered to be the most fundamental substage (first substage)? A. Surplus commodity product B. Commercial-transition C. Mass production D. Mass distribution E. Self-sufficient

E. Self-sufficient The first stage in the evolution of the marketing process is the "agricultural and raw materials" stage, and its first substage is "self-sufficient." If a country is primarily dominated by nomadic or hunting tribes, the marketing process in the country will be in the "self-sufficient" substage. Refer to Exhibit 9.4-Evolution of the Marketing Process.

In the context of cultural reactions when engaging in e-commerce, the color red is associated with socialism in _____. A. the United States B. China C. Brazil D. Uruguay E. Spain

E. Spain The different cultural reactions to color can be a potential problem for websites designed for global markets. While red may be highly regarded in China or associated with love in the United States, in Spain it is associated with socialism.

In the context of foreign market entry, a _____ is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective without forming a separate legal entity. A. direct sales group B. consortium arrangement C. franchising arrangement D. strategic international alliance E. joint venture

D. strategic international alliance A strategic international alliance (SIA) is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective.

In _____, a firm is concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets. A. full-cost pricing B. C. fixed-cost pricing D. variable-cost pricing E. demand-based pricing F. premium pricing

D. variable-cost pricing

To avoid errors in business decisions, it is necessary to conduct a cross-cultrual analysis that isolates the self-reference criterion influences. Which of the following would be the first-step to take to avoid the aforementioned errors?

Define the business problem or goal in home-country cultural traits, habits, or norms.

_____ might be classified as an aspect of sales promotions or public relations, though their connections to advertising are also manifest. A. Corporate entrepreneurship B. Corporate sustainability C. Corporate governance D. Corporate espionage E. Corporate sponsorship

E. Corporate sponsorship Corporate sponsorships might be classified as an aspect of sales promotions or public relations, though their connections to advertising are also manifest.

Which of these aspects of international marketing are analyzed in Phase 1 of the international planning process? A. Budgets B. Promotions C. Product adaptations D. Action programs E. Host-country constraints

E. Host-country constraints

The European Union was created when the 12 nations of the European Community ratified the _____. A. Kent Treaty B. Paris Treaty C. Rome Treaty D. Cannes Treaty E. Maastricht Treaty

E. Maastricht Treaty

Which of the following statements is true of industrial markets?

Industrial sellers tend to have small numbers of customers upon which they are more dependent.

If a marketer is motivated to enter into an international marketing effort because of temporary surpluses in the domestic market, which of the following stages BEST characterizes the stage of international marketing involvement for this marketer?

Infrequent foreign marketing

James Bright's company seeks markets all over the world and attempts to sell products that are a result of planned production for markets in various countries. Which of the following stages BEST characterizes the stage of international marketing involvement for Mr. Bright's company?

International marketing

Which of the following is true of the Tianjin region in China?

It is China's fastest growing city.

Which of the following Asian countries was the first to move from a status of developing country to a newly industrialized country?

Japan

Which of the following provinces of China shares the closest economic ties with South Korea?

Jilin

Which of the following is most likely to cause the biggest problems for television and radio advertisers in China?

Lack of common language.

Which of the following statements is true of business services?

Most business services companies enter international markets to service their local clients abroad.

There are a variety of stages in the process of becoming involved in international marketing. Which of the following best describes the stage of development where the company's products reach a foreign market though no conscious effort on the part of the marketer?

No direct foreign marketing

When the value of the dollar is weak relative to the buyer's currency, sellers generally employ _____. A. competition-based pricing B. demand-based pricing C. premium pricing D. psychological pricing E. cost-plus pricing

E. cost-plus pricing When the value of the dollar is weak relative to the buyer's currency (i.e., it takes fewer units of the foreign currency to buy a dollar), companies generally employ cost-plus pricing.

The _____ effect refers to the possibility that the place of manufacture may affect product or brand image. A. Doppler B. polar C. transfer D. misinformation E. country-of-origin

E. country-of-origin Country-of-origin effect (COE) can be defined as any influence that the country of manufacture, assembly, or design has on a consumer's positive or negative perception of a product. A company competing in global markets today manufactures products worldwide; when the customer becomes aware of the country of origin, there is the possibility that the place of manufacture will affect product or brand images.

Yugoslavia has been facing internal strife due to: A. reunification with Slovenia. B. European Parliament sanctions. C. adoption of Marxist-socialist policies. D. rise of autocracy. E. ethnic divisions.

E. ethnic divisions.

A(n) _____ is a flat charge per physical unit imported. A. ad valorem duty B. compound duty C. prohibitive duty D. alternative duty E. specific duty

E. specific duty A specific duty is a flat charge per physical unit imported, such as 15 cents per bushel of rye

The newly industrialized countries have per capita incomes lower than LDCs.

FALSE These countries have shown rapid industrialization of targeted industries and have per capita incomes that exceed other developing countries.

Economic growth is measured solely in economic goals.

FALSE not solely in economic goals but also in social achievements.

Brazil is a fully industrialized country.

FALSE Brazil is considered as a rapidly industrializing country.

Deflation causes consumer prices to escalate, and consumers face ever-rising prices that eventually exclude many of them from the market.

FALSE Deflation results in ever-decreasing prices, creating a positive result for consumers, but both put pressure to lower costs on everyone in the supply chain.

Tactical planning is essentially long term, incorporating generalized goals for an enterprise as a whole.

FALSE International corporate planning is essentially long term, incorporating generalized goals for an enterprise as a whole.

One of the consistencies that marketers can look forward to when marketing products abroad is that almost all labeling laws worldwide are essentially the same.

FALSE Labeling laws vary from country to country and do not seem to follow any predictable pattern

In the context of international advertising, advertisers prefer global television (satellite broadcasts) due to the availability of accurate market data in most countries.

FALSE Lack of available market data seems to characterize most international markets; advertisers need information on income, age, and geographic distribution, but such basic data seem chronically elusive except in the largest markets. Even the attractiveness of global television (satellite broadcasts) is diminished somewhat because of the lack of media research available

The decisions of the European Court of Justice can be appealed in national courts.

FALSE The European Court of Justice (ECJ) is the European Union's Supreme Court. It is responsible for challenging any measures incompatible with the Treaty of Rome and for passing judgment, at the request of a national court, on the interpretation or validity of points of European Union law. The court's decisions are final and cannot be appealed in national courts.

The European Union is most accurately described as a free trade area.

FALSE The European Union is a common market that is on the road to a political union.

Services are distinguished from products on the basis of their tangibility, durability, homogeneity, and separability.

FALSE intangibility, inseparability, heterogeneity, and perishability— and thus require special consideration. The intangibility of services results in characteristics unique to a service: It is inseparable in that its creation cannot be separated from its consumption; it is heterogeneous in that it is individually produced and is thus unique; and it is perishable in that once created it cannot be stored but must be consumed simultaneously with its creation.

A good illustration of an uncontrollable variable that might impact international business is a marketing decision with respect to research.

False

Political and legal issues a company may face abroad are mitigated by the "alien status" of the company.

False

The foreign uncontrollable environment is the same as the domestic uncontrollable environment.

False

The political and legal environment is a controllable element for international marketers because of the ability to lobby and influence legislation.

False

The uncontrollable factors a company has to deal with decreases with the number of foreign markets in which a company operates.

False

To avoid errors in business decisions, it is necessary to conduct a cross-cultural analysis that emphasizes the need for ethnocentrism.

False

Business-to-business marketers frequently misinterpret the concept of quality. Which of the following examples best illustrates this idea?

Farmers in developing countries prioritize ease of maintenance over efficiency of a farm vehicle.

Competition within the home country can have a profound effect on the international marketer's task. Which of the following BEST illustrates this statement?

Fuji opened a $300 million plant in the U.S. and now commands a 12 percent share of the lucrative U.S. firm market.

The most useful information on how cultural values influence various types of business and market behavior comes from work done by:

Geert Hofstede

In the context of culture's pervasive impact, which of the following is true about birthrates?

Government policies and birth control technologies have caused a decline in birthrates.

All of the following would be considered to be controllable elements of marketing decisions EXCEPT:

Government regulations

IBM entered into a venture with the Chinese Railways Ministry that allowed IBM to set up a national network of IBM service centers in railway stations that has enabled IBM to ship computer parts via the railroad around the country within 24 hours. This venture was dubbed the _____.

Blue Express

Which of the following countries has the most egregious control over advertising, where each medium has its own censorship board that passes judgment on any advertising even before it is submitted for approval by the Ministry of Information. A. Germany B. France C. Myanmar D. Australia E. Argentina

C. Myanmar

The _____ is the decision-making body of the European Union that can enact into law all proposals by majority vote except for changes in tax rates on products and services, which require unanimous vote. A. United Nations B. World Trade Organization C. European Commission D. Commonwealth of Independent States E. Council of Ministers

E. Council of Ministers

Television is an advertising medium with no restrictions in most countries.

FALSE Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the length and number of television commercials permitted when their programs are classified as advertisements.

Age and gender have been the most obvious international market segmentation variables, particularly for Americans.

FALSE Country has been the most obvious segmentation variable, particularly for Americans

For most companies, trade shows and direct selling are the major components in the marketing communications mix.

FALSE For most companies, advertising and personal selling are the major components in the marketing communications mix.

Which of the following is characteristic of Stage 2 of Rostow's five-stage model of economic growth?

Infrastructure development is the primary requirement in the economy

_________ is the performance of business activities designed to plan, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit.

International marketing

An advantage of a matrix organization structure in international business is that it permits management to respond to the conflicts that arise among functional activity, product, and geography

TRUE A matrix structure permits management to respond to the conflicts that arise among functional activity, product, and geography.

Incorrect decisions taken in Phase 2 of the international planning process lead to products inappropriate for the intended market or costly mistakes in pricing, advertising, and promotion

TRUE A more detailed examination of the components of the marketing mix is the purpose of Phase 2 of the international planning process. Incorrect decisions at this point lead to products inappropriate for the intended market or costly mistakes in pricing, advertising, and promotion

A free trade area (FTA) provides its members with a mass market without barriers to impede the flow of goods and services.

TRUE A free trade area provides its members with a mass market without barriers to impede the flow of goods and services.

Domestic middlemen are most likely to be used when the marketer desires to minimize financial and management investment.

TRUE A major trade-off when using home-country middlemen is limited control over the entire process. Domestic middlemen are most likely to be used when the marketer is uncertain or desires to minimize financial and management investment.

The anthropologist, Edward T. Hall tells us that culture is:

communication

Marketing strategy is judged culturally in terms of _______.

acceptance, resistance, or rejection

For managers selling capital equipment and big-ticket industrial services, understanding the concept of ________ is absolutely fundamental to their success.

derived demand

Ten new countries joined the European Union in 2004 followed by Bulgaria and Romania in 2007.

TRUE Ten new countries were added to the European Union in 2004. Bulgaria and Romania entered in 2007.

Leasing helps guarantee better maintenance and service on overseas equipment.

TRUE

Newly industrialized countries (NICs) are characterized by markets free from restrictive trade practices and the presence of significant free market reforms.

TRUE Newly industrialized countries (NICs) have shown rapid industrialization of targeted industries and have per capita incomes that exceed other developing countries. They have moved away from restrictive trade practices and instituted significant free market reforms; as a result, they attract both trade and foreign direct investment.

An important first step in adapting a product to a foreign market is to determine the degree of newness as perceived by the intended market.

TRUE An important first step in adapting a product to a foreign market is to determine the degree of newness as perceived by the intended market.

Brand image is at the very core of business identity and strategy.

TRUE Brand image is at the very core of business identity and strategy.

Ideally, a website should be translated into the languages of the target market.

TRUE Ideally, a website should be translated into the languages of the target markets. This translation may not be financially feasible for some companies, but at least the most important pages of the site should be translated.

An important objective of the member countries of the United Nations is bringing about mutual economic development.

TRUE Part of the efforts of the 193 member countries in the United Nations includes mutual economic development.

The Export Trading Company Act allows producers of similar products to form export trading companies.

TRUE The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies. A major goal of the ETC Act was to increase U.S. exports by encouraging more efficient export trade services to producers and suppliers to improve the availability of trade finance and to remove antitrust disincentives to export activities.

The UN classification has been criticized because it no longer seems relevant in the rapidly industrializing world.

TRUE The UN classification has been criticized because it no longer seems relevant in the rapidly industrializing world. Also, many countries that are classified as LDCs are industrializing at a very rapid rate, whereas others are advancing at more traditional rates of economic development.

A French company sells its products to a large retailer in France, who in turn sells the products all over Europe and Asia. This is an example of indirect exporting.

TRUE The goods of the French company being subsequently sold by the retailer in Europe and Asia is an example of indirect exporting. Indirect exporting usually means that the company sells to a buyer (importer or distributor) in the home country, which in turn exports the product.

Which of the following is an additional reason for marketing industrial goods abroad that does NOT necessarily apply to consumer goods?

Reducing the volatility of demand

Which part of China is considered, by other Chinese, to be the most conservative both in terms of behavior and language?

Taiwan

Which of the following is one of the major events that account for the vigorous economic growth of the ASEAN countries and their transformation from cheap-labor havens to industrialized nations?

The ASEAN governments' commitment to deregulation, liberalization, and privatization of their economies.

Which of the following is the term used to refer to both the People's Republic of China (PRC) and the Republic of China (ROC) or Taiwan?

The Greater China

Which of the following is true regarding Hong Kong, post its turnover to the People's Republic of China?

The Hong Kong government negotiates bilateral agreements and makes major economic decisions on its own.

Which of the following statements is true of ISO 9000 certification?

The ISO 9000 is generally voluntary except for certain regulated products.

______________ is an unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions.

Self-reference criterion

Your ________ can prevent you from being aware that there are cultural differences or from recognizing the importance of those differences.

Self-reference criterion (SRC)

What is the most serious threat to the continued expansion of international services trade?

protectionism

C. K. Prahalad and his associates introduced a new concept into the discussion of developing countries and markets—bottom-of-the-pyramid markets (BOPMs)—consisting of the 4 billion people across the globe with annual incomes of less than _____.

$1200

The answers to which of the following questions is generated in Phase 2 of the international marketing process? A. Are there identifiable market segments that allow for common marketing mix tactics across countries? B. Have objectives and goals been established? C. Have all budgets been determined within the constraints of resources? D. Are pre-existing channels of distribution in the new market mature enough to support the proposed expansion? E. Have responsibilities been established for implementation and control?

A. Are there identifiable market segments that allow for common marketing mix tactics across countries? The answers to three major questions are generated in Phase 2 of the international marketing process: a) Are there identifiable market segments that allow for common marketing mix tactics across countries? b) Which cultural/environmental adaptations are necessary for successful acceptance of the marketing mix? c) Will adaptation costs allow profitable market entry?

Which of these aspects of international marketing is analyzed in Phase 1 of the international planning process? A. Company character B. Product adaptation C. Advertising D. Situation analysis E. Budget

A. Company character A critical first step in the international planning process is deciding in which existing country market to make a market investment. A company's strengths and weaknesses, including the characteristics of its home country, products, philosophies, modes of operation, and objectives must be matched with a country's constraining factors and market potential. Refer to Exhibit 12.1-International Planning Process.

Simone, a specialist in product design, is responsible for a product's functional design. With respect to the product component model, in which of the following component categories would Simone's talents most likely be used? A. Core B. Support services C. Packaging D. Invisible E. Auxiliary

A. Core The core component consists of the physical product—the platform that contains the essential technology—and all its design and functional features. It is on the product platform that product variations can be added or deleted to satisfy local differences.

_____ is the process by which innovation spreads. A. Diffusion B. Filtering C. Dissolution D. Flighting E. Liquidation

A. Diffusion Diffusion is the process by which innovation spreads and knowledge of this is helpful in developing a successful product strategy.

Janet works for a media agency based in Japan. Janet is helping the integrated marketing communications (IMC) manager of Siljure, a French cosmetics company, with the design and content to be used in an upcoming promotional campaign in Japan. The IMC manager knows what to convey but wants to advertise it in a culturally relevant manner. Which step of the international communications process is Janet helping Siljure with? A. Encoding of the message B. Choosing an appropriate channel for the message C. Decoding of the message D. Providing feedback from customers E. Reducing noise from competing ad campaigns

A. Encoding of the message

_____, a practice often used by companies to maintain high retail margins to encourage retailers to maintain the exclusive-quality image of a product, can create a favorable condition for parallel importing. A. Exclusive distribution B. Speculative distribution C. Intensive distribution D. Lateral distribution E. Dual distribution

A. Exclusive distribution

Which of the following is true about the present state of foreign businesses in most developing countries? A. Foreign investors are seen as vital partners in economic development. B. Today, most developing countries have more conservative attitudes toward foreign investments than before. C. Foreign firms are expropriated and charged with excessively high tariffs and quotas by all developing countries. D. Foreign businesses are not allowed to raise money by means of shares in developing countries. E. Foreign investment is banned in most developing countries.

A. Foreign investors are seen as vital partners in economic development. Today, foreign investors are seen as vital partners in economic development. Many countries have deregulated industry, opened their doors to foreign investment, lowered trade barriers, and begun privatizing SOEs.

Which of the following is one of the reasons that have hampered the conferences held by the United Nations Economic Commission for Africa to bring about holistic integration? A. Governmental inexperience B. Depletion of natural resources C. Excessive influx of products D. Lack of beneficial funds E. Excess of cheap labor

A. Governmental inexperience

Which of the following primary relationship activities in building strategic alliances involves seeing the reality in possibilities of an alliance, creating a shared vision from being together, and involving trusted senior managers? A. Imaging B. Committing C. Interfacing D. Dating E. Initiating

A. Imaging The second relationship activity in building a strategic alliance is labeled as imaging. It involves seeing the reality in possibilities of an alliance, creating a shared vision from being together, and involving trusted senior managers. Refer to Exhibit 12.3-Building Strategic Alliances.

Meta Garbon, a manufacturer of sports bicycles, in a bid to tap the enormous market for bicycles in China promote their cycles as premium sporting and leisure bicycles. They use various cycling legends and sports celebrities as brand ambassadors and use television, radio, and newspapers as media. Bicycles in China are used mainly by the working class for commutation, and the main users of bicycles did not relate to Meta Garbon's products, and the promotional campaign was a failure. During which of the following steps of the international communications process did Meta Garbon most likely go wrong? A. Information source selection B. Selection of message channel C. Encoding D. Decoding E. Noise cancellation

A. Information source selection

Insurance, dry cleaning, and hotel accommodations have intrinsic value resulting from a process, a performance, or an occurrence that only exists while it is being created. Which of the following characteristics of services is being referred to here? A. Intangibility B. Separability C. Liquidity D. Homogeneity E. Durability

A. Intangibility Insurance, dry cleaning, hotel accommodations, and airline passenger or freight service are intangible and have intrinsic value resulting from a process, a performance, or an occurrence that exists only while it is being created.

Which of the following statements is true of the European Parliament? A. It has extensive budgetary powers that allow it to be involved in major EU expenditures. B. It serves as a purely consultative body. C. It is responsible for debating and deciding which proposals of the Single European Act to accept as binding on EU members. D. It initiates policy and supervises its observance by member states. E. It is responsible for challenging any measures incompatible with the Treaty of Rome.

A. It has extensive budgetary powers that allow it to be involved in major EU expenditures.

Which of the following is true about tactical planning? A. It is designed to address questions that relate to advertising and marketing. B. It specifically deals with a company's products, capital, and research at a global level. C. It is conducted at the highest levels of management. D. It excludes plans that are made at the local level. E. It is most commonly referred to as corporate planning.

A. It is designed to address questions that relate to advertising and marketing. Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets. Tactical plans are made at the local level and address marketing and advertising questions.

Which of the following barriers faced by consumer service marketers is in force when a foreign market strictly requires that services (such as banking or insurance) originate within the country itself and not from outside? A. Protectionism B. Lack of transborder data flows restrictions C. Protection of intellectual property D. Religious requirements for adaptation E. Language translation barriers

A. Protectionism Protectionism is in force when a foreign market strictly requires that services (such as banking or insurance) originate within the country itself and not from outside. Four kinds of barriers face consumer services marketers in this growing sector of the global marketplace: protectionism, controls on transborder data flows, protection of intellectual property, and cultural requirements for adaptation.

The Webb-Pomerene Act of 1918 made it possible for American business firms to join forces in export activities without being subject to the _____. A. Sherman Antitrust Act B. Federal Communications Act C. Trade Commission Act D. Food, Drug, and Cosmetics Act E. Robinson-Patman Act

A. Sherman Antitrust Act

_____ has the potential to become the newest big emerging market (BEM), but its development will depend on government action and external investment by other governments and multinational firms. A. South Africa B. Canada C. Japan D. Singapore E. Britain

A. South Africa

Which of the following statements is true regarding an import-oriented distribution structure? A. The importer-wholesaler traditionally performs most of the marketing functions. B. The relationship between the importer and any middleman is similar to that found in a mass-marketing system. C. Several independent agencies providing functions such as advertising, marketing research, financing are part of this distribution structure. D. The idea of a channel as a chain of intermediaries performing specific activities is common. E. This distribution system is national in scope.

A. The importer-wholesaler traditionally performs most of the marketing functions. An import-oriented distribution structure is considered as a traditional distribution structure. The import-oriented distribution systems are local rather than national in scope, and the relationship between the importer and any middleman in the marketplace is considerably different from that found in a mass-marketing system. Since the importer-wholesaler traditionally performs most marketing functions, independent agencies that provide advertising, marketing research, warehousing, and storage are nonexistent or underdeveloped.

A Korean electronics company had to add detailed instructions about the repair and replacement of its product to make it easy for the local consumers to maintain it. Which of the following components of the product is most likely being altered in the given scenario? A. The support services component B. The design component C. The core component D. The packaging component E. The functional component

A. The support services component

Which of the following statements is true of sales promotions? A. They are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation. B. C. They are long-term efforts directed to a manufacturer or supplier. D. They primarily involve activities that encourage the press to cover positive stories about companies. E. They are ineffective in markets where consumers are hard to reach. F. They are the only element of the marketing mix that are affected by cultural differences among country markets.

A. They are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

Which of the following is the reason why global retailers like IKEA, Costco, Sears Roebuck, and Walmart are becoming major domestic middlemen for international markets? A. They maintain their core marketing approaches while localizing the array of products, promotions, and other peripheral aspects of their operations. B. They work under the names of the manufacturers and function as low-cost, independent marketing departments with direct responsibility to the parent firms. C. They have minimum investment costs as they do not commit to investing in company personnel. D. They serve as the producer's export department but have a short-term relationship, cover only one or two markets, and operate on a straight commission basis. E. They offer reduction of export costs, demand expansion through promotion, trade barrier reduction, and improvement of trade terms through bilateral bargaining.

A. They maintain their core marketing approaches while localizing the array of products, promotions, and other peripheral aspects of their operations. As global retailers like IKEA, Costco, Sears Roebuck, Toys "R" Us, and Walmart expand their global coverage, they are becoming major domestic middlemen for international markets. Their successes seem to result from maintaining their core marketing approaches while localizing the array of products, promotions, and other peripheral aspects of their operations.

Sixty percent of the Japanese population lives in the _____ market area, which essentially functions as one massive city. A. Tokyo-Nagoya-Osaka B. Komaki-Tokoname-Kariya C. Nagoya-Handa-Seto D. Nishio-Okazaki-Inazawa E. Inuyama-Nisshin-Takahama

A. Tokyo-Nagoya-Osaka

Due to differences in culture in different markets, standardized products that are marketed globally will most likely require: A. a different advertising appeal. B. a different primary function. C. consistent promotional messages. D. a standardized marketing strategy. E. standardized secondary attributes.

A. a different advertising appeal. In many cases, standardized products may be marketed globally. But because of differences in cultures, they still require a different advertising appeal in different markets.

Most newly industrialized countries (NICs) have moved away from restrictive trade practices and instituted significant free market reforms. As a result, these countries have: A. attracted both trade and foreign direct investment. B. become poor importers as well as exporters. C. experienced low gross national income. D. stepped up their protectionist policies. E. majorly given up on their domestic markets.

A. attracted both trade and foreign direct investment Countries that are experiencing rapid economic expansion and industrialization and do not exactly fit as LDCs or MDCs are more typically referred to as newly industrialized countries (NICs). They have moved away from restrictive trade practices and instituted significant free market reforms; as a result, they attract both trade and foreign direct investment.

A direct sales force may be required in a foreign country particularly for _____. A. big ticket industrial products B. low-technology products C. personal care products D. nonmechanical goods E. traditional hand-made goods

A. big ticket industrial products Particularly for high-technology and big ticket industrial products, a direct sales force may be required in a foreign country.

Eastern Europe and the Baltic states, satellite nations of the former Soviet Union, have moved steadily toward adopting aspects of _____. A. capitalism B. autocracy C. Marxist socialism D. despotism E. autarchism

A. capitalism

Great Britain has epitomized distribution through specialty-type middlemen, distributors, wholesalers, and retailers. In recent years, however, there has been a trend toward broader lines, conglomerate merchandising, and mass marketing. This suggests that a firm that neglects the growth of self-service, scrambled merchandising, or discounting may find that it has lost large segments of its market only because its channels no longer reflect the _____ of the market. A. character B. continuity C. control D. cost E. capital requirement

A. character Channel captains must be aware that channel patterns change; they cannot assume that once a channel has been developed to fit the character of both company and market, no more need be done. Great Britain, for example, has epitomized distribution through specialty-type middlemen, distributors, wholesalers, and retailers; in fact, all middlemen have traditionally worked within narrow product specialty areas. In recent years, however, there has been a trend toward broader lines, conglomerate merchandising, and mass marketing.

Estimating market potential in less-developed countries involves additional challenges, but most of the difficulty arises from the _____. A. coexistence of three distinct kinds of markets in each country B. dependence of the markets on the industrialized sectors C. lower wage rates of the workforce D. high fluctuation in the currency rate E. higher concentration of population residing in the urban areas

A. coexistence of three distinct kinds of markets in each country Most of the difficulty arises from the coexistence of three distinct kinds of markets in each country: (1) the traditional rural/agricultural sector, (2) the modern urban/high-income sector, and (3) the often very large transitional sector usually represented by low-income urban slums.

Sales promotions are short-term efforts directed to the consumer or retailer to achieve specific objectives such as: A. consumer product trial or immediate purchase. B. reducing promotional expenses. C. discouraging stores to stock a product. D. eliminating the need for retail point-of-purchase displays. E. long-term performance of a product.

A. consumer product trial or immediate purchase. Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase, consumer introduction to the store or brand, gaining retail point-of-purchase displays, encouraging stores to stock the product, and supporting and augmenting advertising and personal sales efforts.

The success achieved by firms when they take their inventions to market is referred to as _____. A. conversion-ability B. liquidation C. formation-ability D. homologation E. consultation

A. conversion-ability Conversion-ability is the success firms have when they take inventions to market. Three main factors seem to favor conversion: patience, focus on a few important innovations, and experience.

The product platform, design features, and functional features are all found in the _____ component of the physical product according to the product component model. A. core B. support C. packaging D. supplementary E. auxiliary

A. core The core component consists of the physical product—the platform that contains the essential technology—and all its design and functional features. It is on the product platform that product variations can be added or deleted to satisfy local differences. Refer to Exhibit 13.2-Product Component Model.

One of the long-term challenges facing the European Union in the next 50 years is: A. deciding about further enlargement. B. creation of a common currency. C. reducing the free flow of capital between its member nations. D. deciding on how to control the individualistic European population. E. establishing a court that would settle the disputes among member nations.

A. deciding about further enlargement.

Of the seven steps involved in international advertising, _____ almost always represents the most daunting task for international marketing managers. A. developing messages B. selecting effective media C. executing the campaign D. composing and securing a budget E. specifying the goals of the communication

A. developing messages Of the seven steps in developing international advertising, developing messages almost always represents the most daunting task for international marketing managers.

In the context of the use of the Internet in international marketing channels, technically, e-commerce is a form of _____ selling. A. direct B. parallel C. dual D. mass E. targeted

A. direct Technically, e-commerce is a form of direct selling; however, because of its newness and the unique issues associated with this form of distribution, it is important to differentiate it from other types of direct marketing. E-commerce is used to market B2B services, consumer services, and consumer and industrial products via the World Wide Web. It involves the direct marketing from a manufacturer, retailer, service provider, or some other intermediary to a final user.

A major disadvantage of _____ is that they can seldom afford to make the kind of market investment needed to establish deep distribution for products. A. export management companies B. trading companies C. import associations D. global retailers E. complementary marketers

A. export management companies A major disadvantage of export management companies is that they seldom can afford to make the kind of market investment needed to establish deep distribution for products because they must have immediate sales payout to survive.

In the context of the types of domestic middlemen, the WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union. A. foreign sales corporations B. direct marketing partnerships C. trading companies D. export promotion companies E. Webb-Pomerene export associations

A. foreign sales corporations

Companies following the _____ philosophy insist that no unit of a similar product is different from any other unit in terms of cost and that each unit must bear its full share of the total fixed and variable cost. A. full-cost pricing B. fixed-cost pricing C. variable-cost pricing D. demand-based pricing E. premium pricing

A. full-cost pricing

Companies that adopt the _____ structure are generally experiencing rapid growth and have broad, diverse product lines. A. global product division B. pyramid C. hierarchical D. geographical division E. matrix organization

A. global product division Companies that adopt the global product division structure are generally experiencing rapid growth and have broad, diverse product lines.

With respect to global marketing management, the argument for market segmentation in the 1980s was framed as _____. A. globalization versus localization B. standardization versus adaptation C. adaptation versus one-to-one marketing D. globalization versus one-to-one marketing E. standardization versus localization

A. globalization versus localization. In the 1970s, the market segmentation argument was framed as "standardization versus adaptation." In the 1980s, it was "globalization versus localization," and in the 1990s, it was "global integration versus local responsiveness."

The United Nations' classification of stages of economic development has been mainly criticized because: A. it no longer seems relevant in the rapidly industrializing world. B. countries classified as LLDCs are growing at a very rapid rate. C. It no longer takes into account social overhead capital as an indicator of economic development. D. it only focuses on the literacy level in a country. E. countries that are classified as LDCs are industrializing at a slow rate.

A. it no longer seems relevant in the rapidly industrializing world. The UN classification has been criticized because it no longer seems relevant in the rapidly industrializing world. Many countries that are classified as LDCs are industrializing at a very rapid rate, whereas others are advancing at more traditional rates of economic development.

Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the _____ of television commercials permitted when their programs are classified as advertisements. A. length and number B. religious content C. subliminal messaging D. superlative description E. ethnic derision

A. length and number

A _____ policy is used to stimulate market and sales growth by deliberately offering products at low prices. A. penetration pricing B. variable-cost pricing C. premium pricing D. price skimming E. full-cost pricing

A. penetration pricing

The most fully integrated form of regional cooperation is called a: A. political union. B. common market. C. regional cooperation for development (RCD). D. customs union. E. free trade area (FTA).

A. political union.

Vital Health Products found out that they had to reduce the length of the tread in their treadmills sold in China owing to the shorter legs of the average Chinese person. By doing this, Vital has achieved _____. A. product homologation B. global product standardization C. product dilution D. product obsolescence E. product disapprobation

A. product homologation A product may have to change in a number of ways to meet the physical or mandatory requirements of a new market, ranging from simple package changes to total redesign of the physical core product, and this is known as product homologation.

A market in which the only marketing function performed is exchange is most likely to be classified under the _____ stage. A. surplus commodity product B. commercial-transition C. mass production D. mass distribution E. self-sufficient

A. surplus commodity product According to the evolution of the marketing process, between 1885 and 1914, the marketing process in the U.S. is said to be characterized by mass production. In this stage, the marketing functions performed are demand creation and physical distribution.

If a company were to focus on market planning that involved specific actions and allocation of resources, the company would most likely be using _____ planning. A. tactical B. strategic C. corporate D. operational E. synergistic

A. tactical Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets.

An important first step in adapting a product to a foreign market is to determine: A. the degree of newness of the product as perceived by the intended market. B. the personal ethics of individuals in the target market. C. the regional political parties present in the domestic market. D. the language problem of the intended market. E. the product's compliancy to irrational beliefs of its potential foreign consumers.

A. the degree of newness of the product as perceived by the intended market. How people react to newness and how new a product is to a market must be understood.

One of the most important aspects of LAIA that differs from LAFTA, its predecessor, is: A. the differential treatment of member countries according to their level of economic development. B. the inclusion of rules of origin. C. the exclusion of tariff barrier. D. that members are forbidden from establishing bilateral trade agreements among member countries. E. the introduction of a common currency for the member countries.

A. the differential treatment of member countries according to their level of economic development.

All of the following are traits of big emerging markets (BEMs) EXCEPT: A. they import less than smaller markets. B. they are all physically large. C. they have significant populations. D. they are regional economic drivers. E. they are of major political importance within their regions.

A. they import less than smaller markets. The BEMs differ from other developing countries in that they import more than smaller markets and more than economies of similar size.

A joint venture is different from a consortium in that a joint venture: A. usually operates in a country in which the participants are already present. B. typically involves a large number of participants. C. restricts the right to hold an equity position by its major partners. D. does not involve the creation of a separate legal entity. E. is formed mainly for executing short-term projects.

A. usually operates in a country in which the participants are already present. Four characteristics define joint ventures (JVs): (1) JVs are established, separate, legal entities; (2) they acknowledge intent by the partners to share in the management of the JV; (3) they are partnerships between legally incorporated entities, such as companies, chartered organizations, or governments, and not between individuals; and (4) equity positions are held by each of the partners. Consortia are similar to joint ventures and could be classified as such except for two unique characteristics: (1) They typically involve a large number of participants and (2) they frequently operate in a country or market in which none of the participants is currently active.

Which of the following organizations provides a formal structure for the major governments of the Asian-Pacific Rim, including the United States and Canada, to discuss their mutual interests in open trade and economic collaboration?

APEC

One result of the Asian financial crisis of 1997 to 1998 was the creation of _____.

ASEAN+3

Which of the following is an example of a positive political action that favored international marketing?

Abolition of apartheid in South Africa

Devonaile Inc. is a small-scale apparel manufacturer in Florida. Devonaile and other similar firms from Florida collaborate and form a separate company in India as none of the participants in this collaboration have active operations in the Indian market. The newly created firm primarily manufactures apparel suited to the tastes and preferences of the Indian customers. Identify the type of foreign market-entry approach depicted in this scenario. A. A franchising agreement B. A consortium C. A licensing agreement D. Direct exporting E. Indirect exporting

B. A consortium Consortia are similar to joint ventures and could be classified as such except for two unique characteristics: (1) They typically involve a large number of participants and (2) they frequently operate in a country or market in which none of the participants is currently active. Consortia are developed to pool financial and managerial resources and to lessen risks.

Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period. This is an example of problems associated with which of the following six Cs of distribution channel strategy? A. Character B. Continuity C. Control D. Cost E. Capital requirement

B. Continuity Channels of distribution often pose longevity problems. Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period.

Which of the following is one of the six Cs of distribution channel strategy? A. Communication B. Continuity C. Capacity D. Commission E. Contribution

B. Continuity cost, capital, control, coverage, character, and continuity.

Godcare, an insurance firm based in California, had difficulties expanding their operations to Asian markets as most of their target countries had strict regulations on transferring the details of the customers among the different branches of the firm. The company had to obtain an approval from its customers before sharing their personal information with its branches in other countries. Which of the following barriers is most likely to have affected the services of Godcare in the given scenario? A. Protectionism B. Control on transborder data flows C. Protection of intellectual property D. Cultural requirements for adaptation E. Language translation barriers

B. Control on transborder data flows

In the context of consumer products, which of the following is the major limitation of the Internet? A. Knowledge of how to use the Internet B. Coverage of the Internet C. Government regulations on the use of the Internet D. Difficulty in tracking the effectiveness of advertisements on the Internet E. Cost of using the Internet

B. Coverage of the Internet

Which of the following relationship skills is necessary during the imaging activity of building a strategic alliance? A. Good relationship self-awareness B. Creating intimacy C. Trust building D. Partnering E. Commitment

B. Creating intimacy Seeing the reality in possibilities, creating a shared vision from being together, and involving trusted senior managers are actions taken during the imaging stage of building a strategic alliance. These actions require the key relationship skill of creating intimacy. Refer to Exhibit 12.3-Building Strategic Alliances.

Which of the following countries is a member of the Latin American Integration Association (LAIA, aka ALADI)? A. Bahamas B. Cuba C. Nicaragua D. Costa Rica E. Honduras

B. Cuba

She Tales, a women's clothing company based in Singapore, had to modify its clothes before introducing them in markets in Iran to suit the needs of the women in that country who are generally expected to cover themselves completely as per societal norms. To adapt its clothes to Iranian markets, She Tales had to mostly use opaque material and provided accessories like scarves. Which of the following factors has dictated She Tales' product adaptation in this scenario? A. Legal requirements B. Cultural requirements C. Technological requirements D. Economic requirements E. Climatic requirements

B. Cultural requirements By adapting its clothes to suit the societal expectation of the way a woman dresses in Iran, She Tales has been dictated by the cultural requirements of the Iranian market. Legal, economic, political, technological, and climatic requirements of the local marketplace often dictate product adaptation.

At which phase of the international planning process would a marketing manager conduct situation analysis and make decisions involving objectives and goals, budgets, and action programs? A. Adapting the marketing mix to target markets B. Developing the marketing plan C. Matching company and country needs D. Implementation and control E. Defining company objectives and resources

B. Developing the marketing plan Phase 3 of the international planning process involves developing the marketing plan. At this stage, a marketing manager conducts situation analysis and makes decisions regarding objectives and goals, strategy and tactics, mode of entry, budgets, and action programs. Refer to Exhibit 12.1-International Planning Process.

Which of the following modes of distribution affords the most control over the distribution channels but often at a cost that is not practical? A. Complementary marketers B. Direct sales force C. Export associations D. Trading companies E. Export management companies

B. Direct sales force

Analysis of which of the following factors is carried out in Phase 2 of the international planning process? A. Company character B. Distribution C. Situation analysis D. Budgets E. Standards

B. Distribution Incorrect decisions at this point lead to products inappropriate for the intended market or costly mistakes in pricing, advertising, and promotion. Refer to Exhibit 12.1-International Planning Process.

_____ has long been considered the most effective nontariff barrier to the Japanese market. A. Population in Japan B. Distribution in Japan C. Culture in Japan D. Import and export procedures in Japan E. Intense competition in Japan

B. Distribution in Japan Distribution in Japan has historically been considered the most effective nontariff barrier to the Japanese market. However, the market is becoming more open as many traditional modes of operation are eroding in the face of competition from foreign marketers and as Japanese consumers continue to focus on lower prices.

Big Donuts has already reviewed its objectives and capabilities, established the screening criteria for reviewing potential foreign markets, and examined a series of environmental factors for the markets in which it plans to operate. What should Big Donuts do next as it proceeds with the international planning process? A. Match the company to a country's needs. B. Evaluate the marketing mix to target markets. C. Modify the company's position to communication objectives. D. Develop a marketing plan. E. Implement and control information obtained in the initial examination.

B. Evaluate the marketing mix to target markets

Which of the following is a type of domestic middleman? A. Sole proprietors B. Export management companies C. Foreign distributors D. Lessors E. Joint ventures

B. Export management companies

Which of the following is a requisite for the survival of any economic union? A. Avoiding potentially significant opportunities for international business B. Having agreements and mechanisms in place in order to settle economic disputes C. Including into the union, countries with diverse economies, distinctive monetary systems, developed agricultural bases, and different natural resources D. Establishing of a comprehensive agriculture and economic policy E. Ensuring biased treatment of goods produced within the union

B. Having agreements and mechanisms in place in order to settle economic disputes For an economic union to survive, it must have agreements and mechanisms in place to settle economic disputes.

In the context of international advertising, _____ is the neon capital of the world. A. Paris B. Hong Kong C. London D. Sydney E. Brasília

B. Hong Kong

Which of the following distribution structures is also known as a traditional distribution structure? A. Export-oriented B. Import-oriented C. Manufacturer-oriented D. Service-oriented E. Customer-oriented

B. Import-oriented An import-oriented distribution structures is also known as a traditional distribution structure.

In a _____ distribution structure, an importer controls a fixed supply of goods and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. A. domestic B. traditional C. manufacturer-oriented D. service E. customer-oriented

B. In an import-oriented or traditional distribution structure, an importer controls a fixed supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. In the resulting seller's market, market penetration and mass distribution are not necessary because demand exceeds supply, and in most cases, the customer seeks the supply from a limited number of middlemen.

Pots and Pans Inc., a large U.S. kitchenware distributor, sells its inventory twice a year to CookWell Corp., a kitchenware retailer in the United States. CookWell, in turn, sells those products through its retail stores in Vietnam and Thailand. Which of the following is Pots and Pans most likely engaged in? A. Franchising B. Indirect exporting C. A consortium D. Direct foreign investment E. A joint venture

B. Indirect exporting Pots and Pans Inc. is engaged in indirect exporting. Indirect exporting usually means that a company sells to a buyer (importer or distributor) in the home country, which in turn exports the product.

Which of the following primary relationship activities in building strategic alliances involves bringing key executives into action and creating trust through face-to-face time? A. Dating B. Initiating C. Committing D. Imaging E. Interfacing

B. Initiating The third relationship activity in building a strategic alliance is labeled as initiating. It involves bringing key executives into action and creating trust through face-to-face time. Refer to Exhibit 12.3-Building Strategic Alliances.

Which of the following is true of privatization of state-owned enterprises? A. It leads to a decline in productivity throughout the private sector. B. It was done in order to stop the drain on national budgets due to inefficient state-owned enterprises. C. It blocks capital mobility to strategic areas. D. It leads to a change in political leadership. E. It acts as a set back to the process of modernization.

B. It was done in order to stop the drain on national budgets due to inefficient state-owned enterprises Privatization releases immediate capital to invest in strategic areas and gives relief from a continuing drain on future national resources. Privatization of state-owned enterprises (SOEs) helped to prevent the drain on national budgets.

Which of the following is a consequence of creation of large mass markets? A. It will cripple businesses accustomed to mass production and mass distribution. B. It will increase the significance of small national markets. C. It will lead to decreased purchasing power. D. It will increase import tariffs worldwide by at least 70 percent. E. It will lead to an overall drop in international trade.

B. It will increase the significance of small national markets. Economic integration creates large mass markets. Many national markets, too small to bother with individually, take on new dimensions and significance when combined with markets from cooperating countries.

What are the two dimensions that help in defining the quality of a product of quality? A. Consumer choice quality and process quality B. Market-perceived quality and performance quality C. Product quality and market quality D. Actual quality and assumed quality E. Absolute quality and relative quality

B. Market-perceived quality and performance quality Quality can be defined on two dimensions: market-perceived quality and performance quality.

_____ is an economy's arbitrator between productive capacity and consumer demand. A. Warehousing B. Marketing C. Convergence D. Procurement E. Outsourcing

B. Marketing is an economy's arbitrator between productive capacity and consumer demand. The marketing process is the critical element in effectively utilizing production resulting from economic growth; it can create a balance between higher production and higher consumption.

Which of the following is true of the newspaper industry around the world? A. In many countries, newspapers hardly have any trouble achieving complete market coverage. B. Most U.S. cities have just one or two major daily newspapers. C. In many countries, advertisements can be run in a newspaper without any time lag. D. Since there is an indication that the space for advertising is paid for, it is easy to tell exactly how much advertising appears in a given newspaper. E. Japan has more than 15 national daily newspapers, but the circulation numbers are the lowest.

B. Most U.S. cities have just one or two major daily newspapers.

Which of the following is one of the multilateral free trade agreements signed by the United States? A. CETA B. NAFTA C. NATO D. MERCOSUR E. LAFTA

B. NAFTA

The Czech Republic, Hungary, the Slovak Republic, and Poland have become members of the _____. A. UNDP B. OECD C. ASEAN D. LAIA E. APEC

B. OECD

Apex Corp. is a wholesaler for Global Electronics in the French market. Global Electronics discovered that Apex Corp. was diverting some of its goods to the English market. Apex Corp. could get a greater profit in the English market because the goods were bought by the firm at a cheaper price in France. In the context of the above scenario, which of the following forms of business is Apex engaged in? A. Black marketing B. Parallel importing C. Backwashing D. Industrial piracy E. Smuggling

B. Parallel importing A company's goods intended for one country are sometimes diverted through distributors to another country, where they compete with existing retail or wholesale organizations. This is known as parallel importing or secondary wholesaling.

_____ allows ESPN to fill visual real estate—blank walls, streets, stadium sidings—with computer-generated visuals that look like they belong in the scene. A. Self-extracting archive B. Princeton Video Imaging C. High Definition Television D. HighMAT (High Performance Media Access Technologies) E. Conditional Access System

B. Princeton Video Imaging

Analysis of which of the following factors is carried out in Phase 2 of the international planning process? A. Host-country constraints B. Product adaptation C. Company character D. Situation analysis E. Budgets

B. Product adaptation The primary goal of Phase 2 of the international planning process is to decide on a marketing mix adjusted to the cultural constraints imposed by the uncontrollable elements of the environment that effectively achieves corporate objectives and goals

Which of the following actions should be taken to begin the search for prospective middlemen? A. Short-listing the middlemen B. Studying the target market C. Evaluating the available financial resources D. Designing the sales force required E. Understanding the mission of the manufacturing firm

B. Studying the target market The search for prospective middlemen should begin with study of the market and determination of criteria for evaluating middlemen servicing that market.

_____ are the primary discriminatory tax that must be taken into account in reckoning with foreign competition. A. Transfer taxes B. Tariffs C. Tolls D. Excise taxes E. Inflation taxes

B. Tariffs are the primary discriminatory tax that must be taken into account in reckoning with foreign competition

Which is the trade group that is part of Europe and Asia and has emerged and persisted since the dissolution of the Soviet Union comprising of all the republics save the Baltic states? A. The European Union East B. The Commonwealth of Independent States C. The Eastern Bloc Economic Area D. The European Free Trade Association E. The Euro-Soviet Union

B. The Commonwealth of Independent States Europe (and Asia) has one other trade group that has emerged and persisted since the dissolution of the Soviet Union: the Commonwealth of Independent States (CIS).

Which of the following institutions is responsible for challenging any measures incompatible with the Treaty of Rome and for passing judgment, at the request of a national court, on the interpretation or validity of points of European Union Law? A. The International Court of Justice B. The European Court of Justice C. The International Criminal Court D. The European Common Judicial Council E. The European Security Council

B. The European Court of Justice

It was not until this single market was established that the United States, Japan, and other countries gave serious thought to creating other alliances. Which of the following is being referred to here? A. The European Commission B. The European Economic Community C. The Organization for Security and Co-operation in Europe D. The Asia-Pacific Economic Cooperation E. The European Community

B. The European Economic Community Following the success of the European Steel and Coal Community, a global economic revolution began in 1958 when the European Economic Community was ratified and Europe took the step that would ultimately lead to the present-day European Union (EU). It was not until this single market was established that the United States, Japan, and other countries gave serious thought to creating other alliances.

Which of the following makes the South African market an important base for serving nearby African markets that are too small to be considered individually? A. The rise of communism in South Africa B. The South African market's developed infrastructure C. The economic embargo imposed by the United Nations D. The existence of inward-looking trade and investment policies E. The South African government's nationalization initiative

B. The South African market's developed infrastructure

Which of the following is true of franchising? A. It provides an effective blending of skill decentralization and operational centralization. B. The franchisee provides market knowledge, capital, and personal involvement in management. C. Foreign laws and regulations are usually hostile toward franchising. D. It is an important form of horizontal market integration. E. The franchiser has little control on marketing of the products at the point of final sale.

B. The franchisee provides market knowledge, capital, and personal involvement in management. Franchising is a rapidly growing form of licensing in which the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management. The combination of skills permits flexibility in dealing with local market conditions and yet provides the parent firm with a reasonable degree of control. The franchiser can follow through on marketing of the products to the point of final sale. It is an important form of vertical market integration. Potentially, the franchise system provides an effective blending of skill centralization and operational decentralization. Foreign laws and regulations are friendly toward franchising because it tends to foster local ownership, operations, and employment.

Which of the following statements is true regarding agent middlemen? A. They take title to the merchandise. B. They work on commission and arrange for sales in the foreign country. C. Manufacturers cannot control them as much as they control merchant middlemen. D. They do not represent the best interests of the manufacturer. E. They assume trading risks.

B. They work on commission and arrange for sales in the foreign country. Agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise.

Which of the following is a provision of the commonwealth agreement signed by the Commonwealth of Independent States? A. To reject the powers of the old regimes B. To keep the ruble but allow new currencies C. To create disjointed control of nuclear weapons D. To invalidate all Soviet foreign treaties and debt obligations E. To avoid creating a European Union-style free trade association

B. To keep the ruble but allow new currencies The main provisions of the commonwealth agreement are to repeal all Soviet laws and assume the powers of the old regimes; launch radical economic reforms, including freeing most prices; keep the ruble but allow new currencies; establish a European Union-style free trade association; create joint control of nuclear weapons; and fulfill all Soviet foreign treaties and debt obligations.

Which of the following statements about advertising laws around the world is correct? A. Advertising of pharmaceuticals is unrestricted in most countries. B. Toy, tobacco, and liquor advertising is restricted in numerous countries. C. Advertising on television is unregulated in most countries. D. The Internet is the only medium where no restrictions exist in any country. E. Television ads are exempted from tax in all countries.

B. Toy, tobacco, and liquor advertising is restricted in numerous countries.

With the expansion of the European Union, existing members fear: A. retaliation by the Soviet Union against them. B. a flood of cheap labor into their countries. C. that OPEC will cut off supplies to countries supporting the expansion of the European Union. D. free movement of capital amongst the member nations. E. that they would need to close the borders between member nations.

B. a flood of cheap labor into their countries.

Similarity of cultures can make or break an economic union. Although there is great cultural diversity in the European Union, key members share _____ and are commonly aware of being European. A. a common language B. a long-established Christian heritage C. a dislike for foreigners D. a strong affiliation to monarchy and feudalism E. a democratic background and heritage

B. a long-established Christian heritage

Essentially, a free trade area (FTA) provides its members with: A. complete political integration. B. a mass market without trade barriers among partner countries. C. a regional cooperation for social development. D. a common market that eliminates all external tariffs. E. a market that offsets higher nontrade barriers with lower external tariff.

B. a mass market without trade barriers among partner countries. A free trade area provides its members with a mass market without barriers to impede the flow of goods and services among partner countries.

Alexia is geographically large and represents a sizable market for a wide range of products. It has a strong growth rate and is considered as the regional economic driver. Based on this information, Alexia can be classified as a _____. A. grey market B. big emerging market C. two-sided market D. frontier market E. niche market

B. big emerging market

Markets that are geographically large, have strong growth rates, are regional economic drivers, and represent sizable markets for a wide range of products are known as _____. A. frontier markets B. big emerging markets C. two-sided markets D. niche markets E. grey markets

B. big emerging markets Big emerging markets share a number of important traits. They are all geographically large, have significant populations, represent sizable markets for a wide range of products, and have strong rates of growth or the potential for significant growth.

According to the evolution of the marketing process, when the only marketing functions performed are demand creation, physical distribution, and market information analysis, the marketing process is in the _____ substage. A. mass production B. commercial-transition C. self-sufficient D. surplus commodity product E. small scale

B. commercial-transition pg273 According to the evolution of the marketing process, when the only marketing functions performed are demand creation, physical distribution, and market information analysis, the marketing process is in a substage known as commercial-transition. Refer to Exhibit 9.4-Evolution of the Marketing Process.

A _____ agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations. A. preferential trade B. common market C. regional cooperation for development D. customs union E. free trade area

B. common market A common market agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.

Carolyn, who is interested in marketing her company's diet products in Asia, studies the acceptable behavior, norms, and values in Asian markets. In this scenario, Carolyn studies her product's _____ in the Asian markets. A. partibility B. compatibility C. dissidence D. billability E. docibility

B. compatibility

As part of the "green movement," the European Commission has passed a legislation to control all kinds of packaging waste throughout the European Union. Two critical issues that affect product development are the control of the packaging component of solid waste and _____. A. prevalence of similar environmental standards across different member countries B. consumer demand for environmentally friendly products C. higher government subsidies for greener technologies D. continuous availability of alternative energy resources for production E. proven efficient management of inventory of conventional energy products

B. consumer demand for environmentally friendly products The European Commission has passed legislation to control all kinds of packaging waste throughout the European Union. Two critical issues that affect product development are the control of the packaging component of solid waste and consumer demand for environmentally friendly products.

In the context of foreign market entry, _____ serve as a means of transfer of knowledge rather than equity. A. consortia B. contractual agreements C. strategic alliances D. foreign direct investments E. joint ventures

B. contractual agreements Contractual agreements serve as a means of transfer of knowledge rather than equity.

In Russia, products are divided into two categories—"ours" and "imported." This is an example of: A. an autarky. B. ethnocentrism. C. theocentrism. D. feudalism. E. a closed economy.

B. ethnocentrism. Ethnocentrism can also have country-of-origin effects; feelings of national pride—the "buy local" effect, for example—can influence attitudes toward foreign products. Russians prefer fresh, homegrown food products but imported clothing and manufactured items.

Dynamic economies differ from static economies in that dynamic economies: A. need not match marketing efforts with the market needs and wants. B. have rapidly changing consumption patterns. C. have a highly predictable and loyal consumer base. D. define marketing as typically nothing more than a supply effort. E. do not require a marketer to be prepared for economic shifts and emerging markets.

B. have rapidly changing consumption patterns. In a dynamic economy, consumption patterns change rapidly. Marketing constantly faces the challenge of detecting and providing for new levels of consumption, and marketing efforts must be matched with ever-changing market needs and wants.

In the context of foreign market entry, _____ requires no equity investment and thus has a low risk, low rate of return, and little control. A. licensing B. indirect exporting C. a strategic alliance D. a joint venture E. franchising

B. indirect exporting Indirect exporting requires no equity investment and thus has a low risk, low rate of return, and little control.

A disadvantage when using home-country middlemen as intermediaries in the distribution process is the: A. large financial investment required. B. limited control over the distribution process. C. large managerial investments required. D. limited number of retailers in the foreign country who can be reached. E. large amount of commission.

B. limited control over the distribution process. A major trade-off when using home-country middlemen is limited control over the entire process. Domestic middlemen are most likely to be used when the marketer is uncertain or desires to minimize financial and management investment.

Eastern Europe and the Baltic states, satellite nations of the former Soviet Union, have moved steadily toward establishing post-communist market reforms. This implies that: A. the region is against establishing free markets. B. new business opportunities are emerging in this region. C. all of the eastern European countries can be viewed as one entity. D. all of these countries have made the same level of progress. E. all of these countries have had the same success in economic reform and growth.

B. new business opportunities are emerging in this region. Eastern Europe and the Baltic states, satellite nations of the former Soviet Union, have moved steadily toward establishing post communist market reforms. New business opportunities are emerging almost daily, and the region is described as anywhere from chaotic with big risks to an exciting place with untold opportunities.

Bagel's Foods had to change the labeling on their products to meet the specifications regarding vegetarian and non-vegetarian foods set by the government in the Japanese market. They also had to mention the ingredients in Japanese to provide clarity to its local customers. The component of the product that is in focus in the given scenario is the _____. A. support services component B. packaging component C. functional component D. design component E. core component

B. packaging component

A major goal of the Export Trading Company (ETC) Act was to: A. allow U.S. companies to bypass tax laws with respect to international trading. B. remove antitrust disincentives to export activities. C. bypass trade barriers in foreign countries. D. earn the highest possible profits in foreign countries. E. combine export shipments within single containers.

B. remove antitrust disincentives to export activities. The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies. A major goal of the ETC Act was to increase U.S. exports by encouraging more efficient export trade services to producers and suppliers to improve the availability of trade finance and to remove antitrust disincentives to export activities

In-store demonstrations, samples, coupons, contests, and sweepstakes are examples of _____ devices. A. personal selling B. sales promotions C. content marketing D. direct selling E. public relations

B. sales promotions Cents-off, in-store demonstrations, samples, coupons, gifts, product tie-ins, contests, sweepstakes, sponsorship of special events such as concerts, the Olympics, fairs, and point-of-purchase displays are types of sales promotion devices.

According to the product component model, installation, repair and maintenance, deliveries, and warranties are most likely to be part of the _____ component of the product. A. core B. support services C. packaging D. functional E. styling

B. support services The support services component includes repair and maintenance, instructions, installation, warranties, deliveries, and the availability of spare parts.

During the early market growth of many countries, the first large open market was _____. A. Russia B. the United States C. Australia D. Germany E. the United Kingdom

B. the United States During the early growth of many countries, the first large open market was the United States, later joined by Europe and now, as the fundamental principles of the World Trade Organization (WTO) are put into place, by much of the rest of the world.

Direct mail is an unpopular medium in Chile because: A. the literacy level in Chile is extremely low. B. the letter carrier must collect additional postage for every item delivered. C. it uses paper; hence, it is considered as a threat to the environment. D. its reach is extremely limited. E. it is subject to complicated government regulations.

B. the letter carrier must collect additional postage for every item delivered. In Chile, direct mail is virtually eliminated as an effective medium because the sender pays only part of the mailing fee; the letter carrier must collect additional postage for every item delivered. Obviously, advertisers cannot afford to alienate customers by forcing them to pay for unsolicited advertisements.

For companies seeking entrance into the complicated Japanese distribution system, _____ offer one of the easiest routes to success because they virtually control distribution through all levels of channels in Japan. A. trade representatives B. trading companies C. brokers D. export management companies E. complementary marketers

B. trading companies The omnipresent trading companies virtually control distribution through all levels of channels in Japan. Because trading companies may control many of the distributors and maintain broad distribution channels, they provide the best means for intensive coverage of the market.

A consortium is different from a joint venture in that a consortium: A. usually operates in a country in which the participants are already active. B. typically involves a large number of participants. C. restricts the right to hold an equity position by its major partners. D. does not involve the creation of a separate legal entity. E. is formed mainly for executing short-term projects.

B. typically involves a large number of participants. Four characteristics define joint ventures (JVs): (1) JVs are established, separate, legal entities; (2) they acknowledge intent by the partners to share in the management of the JV; (3) they are partnerships between legally incorporated entities, such as companies, chartered organizations, or governments, and not between individuals; and (4) equity positions are held by each of the partners. Consortia are similar to joint ventures and could be classified as such except for two unique characteristics: (1) They typically involve a large number of participants and (2) they frequently operate in a country or market in which none of the participants is currently active.

Grameen Bank is a private commercial enterprise in _____.

Bangladesh

This region in China is the political and R&D center of China. The 75-mile corridor in this region hosts some 5,000 Chinese high-tech companies, and more than 1,000 international IT companies. Perhaps the key to this region is the quality of its higher education. Identify the region in discussion.

Beijing-Tianjin

Which of the following is most closely associated with negotiators from the Beijing area?

Bureaucratic sloth

Booster Bar, a popular brand of energy bars in Canada, sold its bars singly or in packs of two in the South Asian markets, instead of their regular multiple-item packaging containing 10 or 20 bars to make it more affordable for the consumers. Which of the following requirements of the local market has most likely influenced Booster Bar's product adaptation in the form of reduction of bar units per package in this scenario? A. Legal requirements B. Political requirements C. Economic requirements D. Technological requirements E. Cultural requirements

C. Economic requirements By reducing the number of units per package, Booster Bar has adapted its product based on the economic requirements of its South Asian market. The less economically developed a market is, the greater degree of change a product may need for acceptance. To make a purchase more affordable in low-income countries, the number of units per package may have to be reduced from the typical quantities offered in high-income countries

Which of the following countries or group of countries has been at the forefront of the "green movement"? A. The United States B. Japan C. Europe D. OPEC countries E. NAFTA countries

C. Europe

The _____ initiates policy and supervises its observance by member states, and it proposes and supervises execution of laws and policies. A. European Parliament B. European Committee of the Regions C. European Commission D. European Court of Auditors E. European Court of Justice

C. European Commission

Which of the following is an indicator of economic development? A. Population expansion B. Expanding state ownership C. Extent of social overhead capital D. Social reformation E. Cultural diversity

C. Extent of social overhead capital One indicator of economic development is the extent of social overhead capital, or infrastructure, within the economy.

General Motors, _____, and DaimlerChrysler have created a single online site called Covisint for purchasing automotive parts from suppliers. A. Toyota Motor Corporation B. Honda Motor Company C. Ford Motor Company D. Nissan Motor Company E. Tata Motors

C. Ford Motor Company General Motors, Ford Motor Company, and DaimlerChrysler have created a single online site called Covisint (www.covisint.com) for purchasing automotive parts from suppliers, which is expected to save the companies millions of dollars.

Which of the following is true of franchising? A. It is an important form of horizontal market integration. B. The franchiser has little control on marketing of the products at the point of final sale. C. Foreign laws and regulations are friendly toward franchising. D. It provides an effective blending of skill decentralization and operational centralization. E. The franchiser provides market knowledge, capital, and personal involvement in management.

C. Foreign laws and regulations are friendly toward franchising. Franchising is a rapidly growing form of licensing in which the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management. The combination of skills permits flexibility in dealing with local market conditions and yet provides the parent firm with a reasonable degree of control. The franchiser can follow through on marketing of the products to the point of final sale. It is an important form of vertical market integration. Potentially, the franchise system provides an effective blending of skill centralization and operational decentralization. Foreign laws and regulations are friendly toward franchising because it tends to foster local ownership, operations, and employment.

Which of the following is a fully industrialized country? A. Brazil B. Russia C. Germany D. Argentina E. Vietnam

C. Germany is a fully industrialized country. The United Nations classifies a country's stage of economic development on the basis of its level of industrialization.

GHB Corp. is a manufacturer of consumer goods. It intends to sell its products in Vietnam as it is looking to enter into Asian markets. It does not want to make any equity investment and is keen on minimizing any risk of loss in the foreign market. It is also willing to settle for a low rate of return. Which of the following types of foreign market-entry strategies is GHB most likely to follow? A. Direct foreign investment B. Joint Venture C. Indirect exporting D. Strategic alliance E. Licensing

C. Indirect exporting In this case, GHB Corp. is most likely to follow indirect exporting. The amount of equity required by a company to use different modes affects the risk, return, and control that it will have in each mode. Indirect exporting requires no equity investment and thus has a low risk, low rate of return, and little control.

_____ spend more time on social media sites than any users in any other country. A. Mexicans B. Americans C. Israelis D. Spaniards E. Italians

C. Israelis

Which of the following is true about the impact of global competition on the business activities in the marketplace? A. It has shifted the focus in the marketplace from a consumer's market to a seller's market. B. It has increased product life cycles. C. It has put more power in the hands of the customer. D. It has reduced the competitive spirit of most businesses in a marketplace. E. It has limited the choices of the consumers.

C. It has put more power in the hands of the customer. The power in the marketplace is shifting from a sellers' to a customers' market, and the latter have more choices because more companies are competing for their attention. More competition and more choices put more power in the hands of the customer, and that of course drives the need for quality.

Which of the following is a characteristic feature of privatization of state-owned enterprises? A. It normally has a negative effect on economic growth. B. It blocks investment of capital in strategic areas. C. It often leads to modernization. D. It results in a draining of the future national resources. E. It brings about a political shift in the country.

C. It often leads to modernization. Privatization released immediate capital to invest in strategic areas and gave relief from a continuing drain on future national resources. Often when industries are privatized, the new investors modernize, thus creating new economic growth.

In the context of integrated marketing communications, which of the following best defines public relations? A. It is the usage of funds collected from the common public for manufacturing a product in the inaccessible regions of a market. B. It is the direct sale of goods at discount rates to the public at trade fairs. C. It the creation of good relationships with popular press to help communicate messages to their customers, the general public, and governmental regulators. D. It is the distribution of samples and coupons directly to the public in the inaccessible regions of a market. E. It is the sale of goods to the public based on their credit ratings.

C. It the creation of good relationships with popular press to help communicate messages to their customers, the general public, and governmental regulators. Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of public relations.

Which of the following statements is true of the European Court of Justice? A. It initiates policy and supervises its observance by member states. B. Its decisions require approval by the top three nations of the European Union. C. Its decisions are final and cannot be appealed in national courts. D. It primarily has a consultative role in interpreting the nuances of the EU law. E. It can amend and adopt Union legislation.

C. Its decisions are final and cannot be appealed in national courts.

How do the vast majority of services enter a foreign market? A. Exporting B. Smuggling C. Licensing, franchising, or direct investment D. Through brokers E. Through diaspora population

C. Licensing, franchising, or direct investment The vast majority of services (some 85 percent) enter foreign markets by licensing, franchising, or direct investment.

Mark finds that his new digital camera is easy to handle, as he did not have to read the instruction manual to determine how to turn the camera on, snap a digital picture, and export the picture to his computer. The signs (symbols) on the camera body make it very clear what he was to do to achieve digital photography success. Which of the following characteristics of Mark's "new product" makes it easy for him to begin his digital experience? A. Partibility B. Susceptibility C. Low complexity D. High trialability E. Low billability

C. Low complexity

Which of the following treaties allows for the free movement of goods, persons, services, and capital throughout the member states of the European community. A. Rome Treaty B. Berlin Treaty C. Maastricht Treaty D. Barcelona Treaty E. Athens Treaty

C. Maastricht Treaty

Which country announced that it would seek free trade with the United States immediately after the ratification of the United States-Canada Free Trade Area (CFTA)? A. Germany B. Australia C. Mexico D. The United Kingdom E. China

C. Mexico Shortly after both countries had ratified the CFTA, Mexico announced that it would seek free trade with the United States.

In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the _____. A. Transport and Tourism Department B. Internal Affairs and Business Council C. Ministry of International Trade and Industry D. Health and Welfare Committee E. Local Retailers Union

C. Ministry of International Trade and Industry In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the Ministry of International Trade and Industry.

Which of the following is a physical attribute of a motorbike that is essential for its primary function? A. Color B. Price C. Mobility D. Design E. Popularity

C. Mobility A product's physical attributes generally are required to create its primary function. The primary function of an automobile, for example, is to move passengers from point A to point B. Therefore, its primary function is mobility. The psychological features like color, design, size, brand name, and price have little to do with its primary function, but are important in providing customer satisfaction.

According to the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, which category does an industrialized country with high per capita income fall under? A. Less-developed countries B. Least-developed countries C. More-developed countries D. Frontier markets E. Pre-emerging markets

C. More-developed countries Industrialized countries with high per capita incomes, such as Canada, England, France, Germany, Japan, and the United States fall into the category of more-developed countries.

Groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers are called: A. multilateral economic associations. B. cartels. C. multinational market regions. D. trade associations. E. political and cultural associations.

C. Multinational market regions are those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers.

Harry Johnson Tractor Corp. has just completed a marketing plan for entering South Africa. Included in this plan are budgets and sales and profit expectations. Which of the following phases of the international planning process has Harry Johnson Tractor just completed? A. Phase 1 B. Phase 2 C. Phase 3 D. Phase 4 E. Phase 5

C. Phase 3 In this case, Harry Johnson Tractor Corp. has just completed Phase 3 of the international planning process. In Phase 3 of the international planning process, a marketing plan is developed for the target market—whether it is a single country or a global market set. The marketing plan begins with a situation analysis and culminates in the selection of an entry mode and a specific action program for the market. The marketing plan includes budgets and sales and profit expectations.

Which of the following key provisions of NAFTA restricts Japan from assembling autos in Mexico and avoiding U.S. or Canadian tariffs and quotas, unless the auto had a specific percentage of Mexican (i.e., North American) content? A. Services B. Standards C. Rules of origin D. Uniform customs procedures E. Government procurement

C. Rules of origin According to rules of origin, for goods to be traded duty free, they must contain substantial (62.5 percent) North American content. Refer to Exhibit 9.6-Key Provisions of NAFTA.

Which of these is the most advanced and viable of Africa's regional organizations? A. Economic Community of West African States B. African Development Bank C. Southern African Development Community D. Organization of African Unity E. Economic Community of Central African States

C. Southern African Development Community

Which of the following institutions has the responsibility to debate and decide which proposals of the Single European Act to accept as binding on European Union members? A. The European Commission B. The European Parliament C. The Council of Ministers D. The European Court of Justice E. The European Committee of the Regions

C. The Council of Ministers

Which of the following statements is true of the Japanese market? A. The costs of Japanese consumer goods are among the lowest in the world. B. Manufacturers are independent of wholesalers for a multitude of services to other members of the distribution network. C. The Japanese distribution structure supports long-term dealer-supplier relationships. D. Japanese law favors the establishment of large retail stores. E. Japanese consumers favor price over personal service.

C. The Japanese distribution structure supports long-term dealer-supplier relationships. Coupled with the close economic ties and dependency created by trade customs and the long structure of Japanese distribution channels is a relationship-oriented business philosophy that emphasizes loyalty, harmony, and friendship. The value system supports long-term dealer-supplier relationships that are difficult to change as long as each party perceives economic advantage.

Cherry Computers had difficulties when it first entered the Japanese market with its CheriTec computers. Some of its computers were returned unused after customers found the wrapping on the instruction manual damaged. Though this would probably be an insignificant problem in the U.S., it was certainly a cause of concern in quality-conscious Japan. Which of the following components of the product component model should Cherry Computers concentrate on to fix this problem? A. The core component B. The support services component C. The packaging component D. Functional component E. The design component

C. The packaging component

Which of the following statements is true about MDCs (more-developed countries)? A. These countries are just entering world trade. B. Majority of their populations stay in rural areas. C. These countries have high per capita incomes. D. These countries have little world trade involvement. E. These countries have mainly agrarian economies.

C. These countries have high per capita incomes. More-developed countries (MDCs) are industrialized countries with high per capita incomes. Examples include industrialized countries with high per capita incomes, such as Canada, England, France, Germany, Japan, and the United States.

Which of the following statements is true regarding merchant middlemen? A. They represent the best interests of a manufacturer. B. They can be controlled better than agent middlemen. C. They assume trading risks. D. They work on commission and arrange for sales in the foreign country. E. They do not take title to manufacturers' goods.

C. They assume trading risks.

According to Everett Rogers, what is the element that differentiates diffusion from other types of communications research? A. Marketing efficiency B. Communication channel C. Time D. Social system E. Government system

C. Time Everett Rogers states that it is the element of time that differentiates diffusion from other types of communications research. The goals of the diffusion researcher and the marketer are to shorten the time lag between introduction of an idea or product and its widespread adoption.

Which of the following relationship skills is necessary during the initiating activity of building a strategic alliance? A. Commitment B. Partnering C. Trust building D. Creating intimacy E. Good relationship self-awareness

C. Trust building The third relationship activity in building a strategic alliance is labeled as initiating. It involves bringing key executives into action and creating trust through face-to-face time. These actions require the key relationship skill of trust building. Refer to Exhibit 12.3-Building Strategic Alliances.

The creation of a free trade zone leads to: A. a decline in exports. B. an increase in taxes and duties levied on a product. C. a reduction in the price escalation. D. a decline in imports. E. an increase in labor costs and overheads.

C. a reduction in the price escalation.

A (n) _____ of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration. A. autarchy B. monocracy C. commonwealth D. proprietary colony E. trade association

C. commonwealth commonwealth of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration.

Companies with marketing facilities or contacts in different countries with excess distribution capacity or a desire for a broader product line sometimes take on additional lines for international distribution. The formal name for such activities is _____. A. skimming B. backhauling C. complementary marketing D. export marketing E. demand shifting

C. complementary marketing

A company focusing its efforts on making its new innovation more user-friendly than before is working on the _____ of the product. A. docibility B. partibility C. complexity D. discordancy E. observability

C. complexity

Simon and his team draft a plan for their organization, MG Corp. They primarily establish the overall goals that MG should accomplish in the next 25 years. In this case, Simon and his team are most likely engaged in _____ planning. A. tactical B. market C. corporate D. strategic E. personnel

C. corporate International corporate planning is essentially long term, incorporating generalized goals for an enterprise as a whole.

HT Motors introduces a new technology in its cars to improve its mileage as well as to reduce carbon emissions. It also takes measures to improve its production facilities in order to reduce its carbon footprint. Actual introduction of green measures to meet the government guidelines rather than just through advertising and marketing shows that HT Motors engages in ________. A. permission marketing B. traditional marketing C. green marketing D. black marketing E. greenwashing

C. green marketing Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities.

One of the reasons that channels of distribution often pose longevity problems is that most middlemen _____. A. do not maintain sufficient inventory to serve customers B. lack product knowledge resulting in low sales volume C. have little loyalty to their vendors D. tend to slow down distribution to extract higher commissions E. do not have sufficient knowledge of the target market

C. have little loyalty to their vendors

CARICOM established the CSME (CARICOM Single Market and Economy) with the major goal of: A. establishing central institutions similar to those of the European Union institutions. B. forming a political union. C. implementing a common currency for all member nations. D. increasing nontariff barriers. E. implementing uniform customs procedures.

C. implementing a common currency for all member nations. CARICOM has worked toward a single-market economy and in 2000 established the CSME (CARICOM Single Market and Economy) with the goal of a common currency for all members. The introduction of a common external tariff structure was a major step toward that goal.

Paved roads, railroads, seaports, communication networks, and financial networks are illustrations of _____. A. environmental resources B. inventory C. infrastructure D. factors of production E. freight claims

C. infrastructure Infrastructure represents those types of capital goods that serve the activities of many industries. Included in a country's infrastructure are paved roads, railroads, seaports, communication networks, financial networks, and energy supplies and distribution—all necessary to support production and marketing.

South Africa is most likely to experience rapid economic growth in as few as 10 years owing to: A. the rise of communism. B. its induction into the ASEAN. C. its industrial base. D. the economic embargo laid upon it by the UN. E. the decoupling of small African markets from it.

C. its industrial base.

According to the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, _____ consist of industrially developing countries just entering world trade with relatively low per capita income. A. first world countries B. least-developed countries C. less-developed countries D. Third World countries E. more-developed countries

C. less-developed countries Less-developed countries are industrially developing countries just entering world trade and have relatively low per capita incomes.

The marketing process in the U.S between 1885 and 1914 mainly focused on _____. A. mass distribution B. self-sufficiency C. mass production D. surplus commodity product E. commercial-transition

C. mass production According to the evolution of the marketing process, between 1885 and 1914, the marketing process in the U.S. is said to be characterized by mass production. In this stage, the marketing functions performed are demand creation and physical distribution. Refer to Exhibit 9.4-Evolution of the Marketing Process.

In the context of the communication process in advertising, using the Internet as a medium when only a small percentage of an intended market has access to it is an example of an error related to: A. feedback. B. decoding. C. message channel selection. D. encoding. E. message selection.

C. message channel selection.

According to the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, Canada falls under the category of _____. A. Third World countries B. least-developed countries C. more-developed countries D. less-developed countries E. pre-emerging countries

C. more-developed countries Industrialized countries with high per capita incomes, such as Canada, England, France, Germany, Japan, and the United States are classified as MDCs (more-developed countries).

Complementary marketing is commonly known as _____. A. backhauling B. demand shifting C. piggybacking D. shape shifting E. skimming

C. piggybacking

An especially effective promotional tool when a product concept is new or has a very small market share is _____. A. sponsorship B. sweepstakes C. product sampling D. contests E. product tie-ins

C. product sampling An especially effective promotional tool when the product concept is new or has a very small market share is product sampling.

Certain advertising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent in: A. the Internet forums. B. personal selling initiatives. C. radio and television broadcasting. D. trade shows and exhibitions. E. direct selling and sales promotions.

C. radio and television broadcasting.

The most basic economic integration and cooperation is the: A. political union. B. common market. C. regional cooperation for development (RCD). D. customs union. E. free trade area (FTA).

C. regional cooperation for development (RCD).

When countries sell off state-owned enterprises and privatize them, it usually results in a(n): A. lack of accommodation of outside investors. B. decline in productivity throughout the private sector. C. release of capital to invest in strategic areas. D. instant change in political leadership. E. continuing drain on future natural resources.

C. release of capital to invest in strategic areas. Privatization releases immediate capital to invest in strategic areas and gives relief from a continuing drain on future national resources.

In the context of international advertising, companies are moving from the commission system to a _____ system. A. tactical B. standardized C. reward-by-results D. self-regulation E. business-to-business

C. reward-by-results

Firms that are unfamiliar with overseas marketing and firms that produce industrial goods orient their pricing solely on the basis of: A. cultural differences in perceptions of pricing. B. market segmentation from market to market. C. the costs of production of the goods. D. market segmentation from country to country. E. competitive pricing in the market.

C. the costs of production of the goods.

The long-term goal of the LAIA (Latin American Integration Association), better known by its Spanish acronym, ALADI, is: A. to improve the literacy levels in member countries. B. to reduce the child mortality rates in member countries. C. to establish a Latin American common market. D. to establish a common currency for all its member countries. E. to standardize the industrial production in the member countries.

C. to establish a Latin American common market.

The assault on advertising of _____ is escalating, as evidenced by the World Health Organization launching a global campaign against it. A. trans fat B. alcohol C. tobacco D. pharmaceuticals E. animal-derived products

C. tobacco

In the context of media planning and analysis, billboards are especially useful in countries: A. with high income levels. B. where the laws governing the Internet are very complicated. C. with high illiteracy rates. D. where sales promotions are ineffective. E. where people prefer buying in small quantities.

C. with high illiteracy rates.

Most eastern European countries are privatizing state-owned enterprises, establishing free market pricing systems, and: A. introducing autarchic trade policies. B. increasing trade barriers. C. wrestling with inflation. D. making import controls stringent. E. switching to a socialistic economy.

C. wrestling with inflation. Most eastern European countries are: privatizing state-owned enterprises, establishing free market pricing systems, relaxing import controls, and wrestling with inflation.

All of the following appear as a foreign environment uncontrollable variable in the model of the international marketing task shown in the text EXCEPT:

Channels of distribution

Which of the following is a controllable element for an international marketer?

Channels of distribution

For an international marketer, the _________ can be altered in the long run, and, usually, in the short run to adjust to changing market conditions, consumer tastes, or corporate objectives.

Controllable elements

People from which of the following cultures are more likely to have a general distrust of others (not those in their groups) because power is seen to rest with individuals and is coercive rather than legitimate?

Cultures with a high Power Distance Index score.

Analysis of which of the following factors is carried out in Phase 2 of the international planning process? A. Company character B. Budgets C. Situation analysis D. Advertising E. Standards

D. Advertising

James Barker is the marketing manager of a firm with small international sales volume. He is looking for a middleman who can take responsibility for promotion of the company's products, credit arrangements, physical handling, and market research. Also, the middleman must be able to provide information on financial, patent, and licensing matters. In addition, the middleman should agree to work under the name of the firm. Which of the following types of middlemen would be the best choice for Mr. Barker if he wants to meet his objectives? A. A manufacturer's export agent B. An export merchant C. A trade representative D. An export management company E. A complementary marketer

D. An export management company The EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm. The export management company may take full or partial responsibility for promotion of the goods, credit arrangements, physical handling, market research, and information on financial, patent, and licensing matters.

In the context of the different types of middlemen, which of the following is an example of a manufacturer's retail store? A. Toys "R" Us B. Walmart C. Costco D. Benetton E. IKEA

D. Benetton

Though now disbanded, which of the following was considered to be the most notable enforced political union of the last 40 years? A. NATO B. NAFTA C. MERCOSUR D. COMECON E. LAFTA

D. COMECON The most notable enforced political union was the Council for Mutual Economic Assistance (COMECON), a centrally controlled group of countries organized by the Soviet Union

Which of the following is one of the highest costs of doing business in China? A. Money required for the transportation of goods B. Money required for obtaining appropriate permits C. Cost of local advertising D. Capital required to maintain effective distribution E. Cost of customizing products for the Chinese market

D. Capital required to maintain effective distribution

Adore cosmetics had to increase the SPF value of their sunscreen lotions marketed in the Middle East to provide more protection against UV radiation. Which of the following factors dictated product adaptation in this scenario? A. Legal requirements B. Cultural requirements C. Economic requirements D. Climatic requirements E. Political requirements

D. Climatic requirements The climatic requirements of the Middle East nations dictated that Adore Cosmetics increase the SPF value of its lotions to provide more protection against UV radiation to ensure product adaptation. Legal, economic, political, technological, and climatic requirements of the local marketplace often dictate product adaptation. Changes may also have to be made to accommodate climatic differences.

The Red Lobster, a restaurant, considers opening branches in China. However, the restaurant's labor union feels that since accepting tips by wait-staff is considered in bad taste in China, they will face considerable loss. Therefore, they demand to know how employees would be compensated for this since a great portion of a typical wait-staff person's compensation comes in the form of tips. Which of the following barriers a consumer services marketer faces in a foreign market is illustrated in this scenario? A. Protectionism B. Controls on transborder data flows C. Protection of intellectual property D. Cultural requirements for adaptation E. Language translation barriers

D. Cultural requirements for adaptation The Red Lobster needs to adapt to the cultural requirement in China—to refrain its wait-staff from accepting tips for services rendered—in order carry out smooth business there. Because trade in services frequently involves people-to-people contact, culture plays a much bigger role in services than in merchandise trade.

During which step of the international communications process does the receiver of the message interpret symbolism transmitted from an information source? A. Selecting a message B. Encoding C. Selecting a message channel D. Decoding E. Identifying the sources of noise

D. Decoding The interpretation by the receiver of the symbolism transmitted from an information source is known as decoding.

In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment? A. Export management companies B. Trading companies C. Export associations D. Direct sales force E. Complementary marketers

D. Direct sales force Maximum investment is usually required when a company establishes its own internal channels, that is, its own sales force. Use of distributors or dealers may lessen the capital investment, but manufacturers often have to provide initial inventories on consignment, loans, floor plans, or other arrangements.

The adoption of the euro has facilitated which of the following? A. Increased complexity of online marketing B. Elimination of parallel imports C. Increase in European import tariffs by 60 percent D. Easily recognizable price differentials E. Decrease in the toughness of market competition in Europe

D. Easily recognizable price differentials

_____ refers to an increase in national production that is reflected by an increase in the average per capita gross domestic product (GDP) or gross national income (GNI). A. Economic repression B. Economic duress C. Economic equilibrium D. Economic development E. Economic sustainability

D. Economic Development Economic development is generally understood to mean an increase in national production reflected by an increase in the average per capita gross domestic product (GDP) or gross national income (GNI).

What is happening in BEMs today is analogous to what happened in: A. Saudi Arabia in the 1800s. B. India during the rule of the British Empire. C. Russia after the fall of the Czar. D. Europe after World War II. E. Iraq between 1890 and 1990.

D. Europe after World War II. BEMs lack modern infrastructure, much of the expected growth will be in industrial sectors such as information technology, environmental technology, and financial services. What is occurring in the BEMs is analogous to the situation after World War II when tremendous demand was created during the reconstruction of Europe.

The European Commission, the Council of Ministers, the European Parliament, and the Court of Justice are institutions of the _____. A. COMECON B. European Free Trade Area C. European Economic Area D. European Union E. Trans-Pacific Union

D. European Union

Of all the multinational market groups, none has been more secure in its cooperation or more important economically than the: A. Newly Independent States. B. Economic Community of West African States. C. Commonwealth of Independent States. D. European Union. E. Trans-Pacific Union.

D. European Union.

As George Platt examines markets that might match his company's investment requirements, he is particularly interested in the fact that the European Community has an extensive transportation network. This network seems to draw all the member nations closer together. Which of the following critical factors for ensuring an effective economic union is Mr. Platt most likely examining when reviewing transportation networks? A. Cultural factors B. Trade factors C. Political factors D. Geographic proximity E. Economic factors

D. Geographic proximity

Which of the following is the last step in the international planning process? A. Defining target markets and adapting the marketing mix accordingly B. Matching company and country needs C. Adapting the marketing mix according to market segments D. Implementation and control E. Developing the marketing plan

D. Implementation and control All marketing plans require coordination and control during the period of implementation. Implementation and control constitute the last step in the international planning process

What is the reason for Estonia's economic growth since independence from the Soviet Union to handily outpace the other Baltic nations? A. It took up the ruble. B. It nationalized all companies and land. C. It helped all its struggling banks by using state funds. D. It adopted the freest trading regime of the three Baltic nations. E. It joined the European Union immediately after its independence in 1992.

D. It adopted the freest trading regime of the three Baltic nations.

Which of the following is true of the Maastricht Treaty? A. It serves as a deterrent for the political unification of the European countries. B. It restricts movement of goods between the United Kingdom and France. C. It allows for the free movement of persons between the United States and Canada. D. It allows for the free movement of goods throughout the member states of the European Union. E. It is the first European treaty whose terms have been universally accepted.

D. It allows for the free movement of goods throughout the member states of the European Union.

Which of the following is true of the distribution process? A. It does not involve the physical handling and distribution of goods. B. It includes activities related to the promotion of goods and services. C. The ownership title remains with the distributor even on completion of the transaction. D. It includes buying and selling negotiations. E. The behavior of channel members is not affected by the cultural environment.

D. It includes buying and selling negotiations. In every country and in every market, urban or rural, rich or poor, all consumer and industrial products eventually go through a distribution process. The distribution process includes the physical handling and distribution of goods, the passage of ownership (title), and—most important from the standpoint of marketing strategy—the buying and selling negotiations between producers and middlemen and between middlemen and customers.

Which of the following is true about international corporate planning? A. It only addresses marketing and advertising questions. B. It specifically deals with a company's products, capital, and research. C. It predominantly deals with the tactical issues of marketing. D. It is essentially long term in nature. E. It refers to the plans that are made at the local level.

D. It is essentially long term in nature. International corporate planning is essentially long term, incorporating generalized goals for an enterprise as a whole. Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and the long- and short-term goals of the company. Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets. Tactical plans are made at the local level and address marketing and advertising questions.

Which of the following best defines green marketing? A. It refers to word-of-mouth marketing, where a company develops customers who become voluntary advocates of a product. B. It refers to inbound marketing used on websites in the form of a banner, text, or graphic. C. It refers to the type of marketing that takes place on the internet, where all the marketing resources and assets are transferred online. D. It is used to identify concerns with the environmental consequences of a variety of marketing activities. E. It refers to nontraditional or stealth marketing campaigns.

D. It is used to identify concerns with the environmental consequences of a variety of marketing activities. Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities.

Which of the following refers to two or more participating companies joining forces to create a separate legal entity to facilitate doing business in the international arena? A. Indirect exporting B. Franchise C. License arrangement D. Joint venture E. Direct investment agreement

D. Joint venture A joint venture is different from other types of strategic alliances or collaborative relationships in that a joint venture is a partnership of two or more participating companies that have joined forces to create a separate legal entity.

Which of the following is a long-term challenge that the European Union is facing? A. Eliminating all tariffs on internal trade amongst member nations B. Establishing a common currency for the Union C. Including Asia into the Union D. Limiting the political aspects of the Union E. Finding ways to contract the Union

D. Limiting the political aspects of the Union The long-term challenges facing the Union in the next 50 years appear to fall into three categories: (1) improving the Union's economic performance, (2) deciding how to limit the political aspects of union, and (3) deciding about further enlargement. The last problem may well disappear as both multilateral and bilateral agreements continue to multiply around the world and as the WTO continues to gain influence and traction in trade barrier reduction.

Who are frequently criticized for not representing the best interests of a manufacturer? A. Global wholesalers B. Trading companies C. Consumers D. Merchant middlemen E. Brokers

D. Merchant middlemen Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen. Because merchant middlemen primarily are concerned with sales and profit margins on their merchandise, they are frequently criticized for not representing the best interests of a manufacturer.

Which of the following countries has been identified by the Department of Commerce as a BEM (big emerging market)? A. Philippines B. Egypt C. Venezuela D. Mexico E. Nicaragua

D. Mexico India, China, Brazil, Mexico, Poland, Turkey, and South Africa are prominent examples of countries the Department of Commerce has identified as BEMs. Other countries such as Egypt, Venezuela, and Colombia may warrant inclusion in the near future.

_____ required the United States, Canada, and Mexico to remove all tariffs and trade barriers over 15 years, and beginning in 2008, all tariff barriers were officially dropped. A. Mercosur B. LAIA C. CARICOM D. NAFTA E. DR-CFTA

D. NAFTA NAFTA required the United States, Canada, and Mexico to remove all tariffs and trade barriers over 15 years, and beginning in 2008, all tariff barriers were officially dropped

_____ is a subject area that should be on the checklist of criteria for evaluating middlemen servicing a market. A. Flexibility B. Hypersensitivity C. Cultural empathy D. Productivity E. Breadth of knowledge

D. Productivity The checklist of criteria differs according to the type of middlemen being used and the nature of their relationship with the company. Basically, such lists are built around four subject areas: productivity or volume, financial strength, managerial stability and capability, and the nature and reputation of the business.

Which of the following is the most important criterion for global market consumers while purchasing products? A. Appearance B. Size C. Technology D. Quality E. Service

D. Quality In most global markets, the cost and quality of a product are among the most important criteria by which purchases are made. For consumer and industrial products alike, the reason often given for preferring one brand over another is better quality at a competitive price

_____ are considered to be the foundation of the Japanese distribution system. A. Consumers B. Brokers C. Manufacturers D. Small retailers E. Wholesalers

D. Small retailers The Japanese system has four distinguishing features: (1) a structure dominated by many small middlemen dealing with many small retailers, (2) channel control by manufacturers, (3) a business philosophy shaped by a unique culture, and (4) laws that protect the foundation of the system—the small retailer.

Which of the following statements is true of the legal instruments used by the European Union? A. The European Union issues regulations that are binding against the member states if the national courts of the member states agree to the regulations. B. The European Union must confer with the United Nations before issuing directives against member states. C. The European Union directs all disputes involving the European Union law to the International Court of Justice. D. The European Union has the authority to issue regulations that bind the member states directly. E. The European Union requires the approval of individual nations to address binding decisions against an enterprise of that nation.

D. The European Union has the authority to issue regulations that bind the member states directly.

Which of the following statements is true about the Internet? A. The Internet further increases the advantage of rich economies over the poor ones. B. The Internet increases market transaction costs. C. The Internet allows for innovative services but at a relatively higher cost. D. The Internet enables smaller firms in emerging economies to sell into a global market. E. The Internet decreases the economies of scale from vertical integration.

D. The Internet enables smaller firms in emerging economies to sell into a global market. Lower transaction costs enable small firms in Asia or Latin America to work together to develop a global reach. The Internet has enabled smaller firms in emerging economies can now sell into a global market.

_____ classifies a country's stage of economic development on the basis of its level of industrialization into three categories and the three categories are MIDCs, LDCs, and LLDCs. A. The U.S. Department of Commerce B. The North Atlantic Treaty Organization C. The International Organization for Standardization D. The United Nations E. The International Development Association

D. The United Nations classifies a country's stage of economic development on the basis of its level of industrialization into three categories and the three categories are MIDCs, LDCs, and LLDCs.

All of the following are specific objectives of sales promotion EXCEPT: A. immediate purchase. B. consumer introduction to the store. C. gaining retail point-of-purchase displays. D. building brand loyalty. E. encouraging stores to stock the product.

D. building brand loyalty.

In general, the rate of diffusion can be postulated as negatively related to _____. A. relative advantage B. compatibility C. trialability D. complexity E. observability

D. complexity In general, the rate of diffusion can be postulated as positively related to relative advantage, compatibility, trialability, and observability but negatively related to complexity.

In the context of international advertising, it has been observed that advertising expenditures are generally _____. A. linear B. supplemental C. mutually reinforcing D. cyclical E. constrained

D. cyclical

Economic planners are most likely to be least concerned with the problems related to _____. A. production B. finance C. expenditure D. distribution E. investment

D. distribution Given such attitudes, economic planners generally are more concerned with the problems of production, investment, and finance than the problems of efficiency of distribution.

When the marketing process is characterized by mass distribution, all of the following marketing functions are performed EXCEPT _____. A. demand creation B. market information analysis C. physical distribution D. exchange E. market and product planning, development

D. exchange When the marketing process is characterized by mass distribution, the marketing functions performed are demand creation, market information analysis, physical distribution, and market and product planning, development. It does not involve exchange. Refer to Exhibit 9.4-Evolution of the Marketing Process.

Newly industrialized countries (NICs) differ from less-developed countries in that NICs: A. include Canada, the United States, and Germany. B. attract insignificant or no foreign investment. C. have per capita incomes that are lower than other developing countries. D. have moved away from restrictive trade practices and instituted significant free market reforms. E. have shown slow industrialization and expansion of targeted industries.

D. have moved away from restrictive trade practices and instituted significant free market reforms. Newly industrialized countries (NICs) have moved away from restrictive trade practices and instituted significant free market reforms; as a result, they attract both trade and foreign direct investment.

Because a service is individually produced and is virtually unique, the service is said to have _____. A. liquidity B. coherence C. equivalence D. heterogeneity E. placability

D. heterogeneity A service is heterogeneous in that it is individually produced and is thus unique. Services are distinguished by four unique characteristics—intangibility, inseparability, heterogeneity, and perishability— and thus require special consideration.

The only way to avoid linguistic problems in advertising communication is by: A. creating an entirely new advertisement for the new market. B. using only English in all media promotions. C. developing a new version of the product for the new market. D. in-country testing with the target consumer group. E. using facial expressions and physical gestures in the advertisement.

D. in-country testing with the target consumer group.

According to Everett Rogers, the goals of the diffusion researcher and the marketer are to shorten the time lag between: A. the dispatch of the product from the company and the time it takes to reach the customer. B. the time that a budget is constructed and the time needed for the funds to reach the communication channels. C. initial investment and the profits obtained from those investments. D. introduction of an idea or product and its widespread adoption. E. introduction of an idea or product and when revisions can be made.

D. introduction of an idea or product and its widespread adoption. According to Everett Rogers, the goals of the diffusion researcher and the marketer are to shorten the time lag between introduction of an idea or product and its widespread adoption.

In a deflationary market, in order to win the trust of consumers, it is essential for a company to: A. engage in forfaiting agreements with consumers. B. spend more on advertising and stall the production of products. C. allow prices to escalate and target the price insensitive segment of the market. D. keep prices low and raise brand value. E. form a cartel to control the dynamics of the market.

D. keep prices low and raise brand value.

In the context of foreign market entry strategies, the advantages of _____ are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse. A. consortia B. exporting arrangements C. strategic alliances D. licensing E. joint ventures

D. licensing The advantages of licensing are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse.

A _____ provides a selling service for a manufacturer, has a short-term relationship, and operates on a straight commission basis. A. manufacturers' retail store B. trading company C. global retailer D. manufacturer's export agent E. complementary marketer

D. manufacturer's export agent

In the international communications process, the sales force of a company that conveys the encoded content to the intended receiver acts as a(n) _____. A. decoder B. interpreter C. receiver D. message channel E. noise

D. message channel In the international communications process, the sales force and/or advertising media convey the encoded message to the intended receiver and thus it acts as a message channel.

Given the fact that NAFTA is now effective among the U.S., Mexico, and Canada, an American company which has its production plant in Sri Lanka will be willing to relocate its production plant to Mexico mostly because: A. it will improve the image of its goods. B. Mexico has lower wages than Sri Lanka. C. it will enable the company to get an entirely western consumer base for its products. D. moving goods from Mexico to the United States is cheaper and faster than moving them from Sri Lanka. E. workers in Mexico are more skilled than those in Sri Lanka.

D. moving goods from Mexico to the United States is cheaper and faster than moving them from Sri Lanka.

Chile, Brazil, Mexico, South Korea, Singapore, and Taiwan are examples of _____ countries. A. least-developed B. Third World C. underdeveloped D. newly industrialized E. closed economy

D. newly industrialized Countries that are experiencing rapid economic expansion and industrialization and do not exactly fit as LDCs or MDCs are more typically referred to as newly industrialized countries (NICs). Chile, Brazil, Mexico, South Korea, Singapore, and Taiwan are some of the countries that fit this description.

Lush Cosmetics Corp., a U.S.-based firm, has recently started exporting cosmetics to India. Lush has introduced a new range of mineral-based makeup products for the first time in the Indian market. As Lush has no competitors in this segment of the Indian cosmetics market, it has set a very high price for its products in order to reach the premium, price insensitive segment of the market. This is an example of _____. A. penetration pricing policy B. psychological pricing policy C. bundling D. price skimming E. cost-based pricing policy

D. price skimming

Martin is comparing the characteristics of his company's water filters with those that are already being marketed in the local market. He realizes that there is lot of scope for his filters as they are functionally more advanced, have a longer life, and can also be marketed at a competitive price than those of other sellers in the local market. The innovation characteristic of Martin's product that will help in wide acceptance of his product in the local market is its _____. A. partibility B. defectibility C. docibility D. relative advantage E. vincibility

D. relative advantage Martin's water filters have a relative advantage over that of his counterparts in the local market as they are functionally more advanced, have a longer life, and can be marketed at competitive prices. There are five characteristics of an innovation that can assist in determining the rate of acceptance or resistance of the market to a product. A product's (1) relative advantage (the perceived marginal value of the new product relative to the old), (2) compatibility (its compatibility with acceptable behavior, norms, values, and so forth), (3) complexity (the degree of complexity associated with product use), (4) trialability (the degree of economic and/or social risk associated with product use), and (5) observability (the ease with which the product benefits can be communicated) affect the degree of its acceptance or resistance.

In the context of distribution patterns, the rate of change in retailing around the world appears to be directly related to the _____. A. literacy rate B. rate of inflation C. population growth D. speed of economic development E. currency exchange rate

D. speed of economic development Retailing around the world has been in a state of active ferment for several years and the rate of change appears to be directly related to the stage and speed of economic development, and even the least developed countries are experiencing dramatic changes. Supermarkets of one variety or another are blossoming in developed and underdeveloped countries alike

The washing machines marketed by Taichi failed in Asian markets as those countries lacked the skills necessary to repair and maintain its products. Also, the washing machine spares available in local markets were not compatible with these machines. This product failure is most likely to be a result of lack of attention by the company to the _____ component of the product. A. core B. price C. packaging D. support services E. style

D. support services

Fiona's company wants to launch a new product in Madrid. Fiona requests her product manager to distribute some samples to potential customers there so that she can gauge the consumer preferences prevalent there before introducing the product. Here, Fiona tires to reduce the degree of economic and social risks, also known as _____, associated with product use. A. billability B. docibility C. invincibility D. trialability E. partibility

D. trialability

_____ at the southern tip of the Liaodong Peninsula in China is the focus of bi-national relationships and has one of the world's largest and most modern port facilities.

Dalian

Of all the elements of the marketing mix, decisions involving which of the following is most often affected by cultural differences among country markets? A. Price of the product B. Benefits offered by the product C. Services offered along with the product D. The place of offering the product E. Advertisement of the product

E. Advertisement of the product Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

Which of the following accounts for the lion's share of Mercosur exports to Europe? A. Clothing and apparel B. Telecommunication equipment C. Consumer durables D. Petroleum and minerals E. Agricultural and agro-industrial products

E. Agricultural and agro-industrial products

The _____ increases the authority of the institutions of the European Union and is designed to accommodate the changes brought about by the monetary union and the admission of new members. A. Treaty of Rome B. Single European Act C. Maastricht Treaty D. Expansion Act E. Amsterdam Treaty

E. Amsterdam Treaty

The three members of the North American Free Trade Agreement (NAFTA) are: A. the United States, the United Kingdom, and France. B. the United States, Cuba, and Uruguay. C. Canada, China, and Japan. D. the United States, France, and Germany. E. Canada, Mexico, and the United States.

E. Canada, Mexico, and the United States.

Which of the following is a critical element associated with using a particular type of middleman? A. Knowledge of the culture of the target market B. Number of employees C. Mode of transportation for moving goods D. Influence over the target market E. Cash-flow patterns

E. Cash-flow patterns Capital requirement and cash-flow patterns are critical elements associated with using a particular type of middleman.

Which of the following arrangements is undertaken when a firm wants to keep its seasonal distribution channels functioning throughout the year? A. Price skimming B. Using the services of a trading company C. Establishing a retail store D. Using the services of an export management company E. Complementary marketing

E. Complementary marketing Most complementary marketing arrangements are undertaken when a firm wants to fill out its product line or keep its seasonal distribution channels functioning throughout the year. Companies may work either on an agency or merchant basis, but the greatest volume of piggyback business is handled on an ownership (merchant) purchase-and-resale arrangement.

Which of the following modes of foreign market entry requires the most amount of equity and therefore, creates the greatest risk? A. Exporting B. Joint venture C. Contractual agreement D. Strategic alliance E. Direct foreign investment

E. Direct foreign investment Direct foreign investment requires the most equity of the four modes of foreign market entry and creates the greatest risk while offering the most control and the potential highest return.

Which of the following is the last step in an international advertising campaign? A. Developing the most effective message(s) for the market segments selected B. Specifying the goals of the communication C. Selecting effective media D. Executing the campaign E. Evaluating the campaign relative to the goals specified

E. Evaluating the campaign relative to the goals specified An international advertising campaign usually ends with evaluating the campaign relative to the goals specified.

Which of the following steps of the international communications process is important as a check on the effectiveness of the other steps? A. Selecting a proper message B. Encoding the message C. Selecting an appropriate channel of communication D. Decoding the message E. Feedback

E. Feedback The feedback step of the communications process is important as a check on the effectiveness of the other steps. Companies that do not measure their communications efforts are likely to allow errors of source, encoding, media selection, decoding, or receiver to continue longer than necessary.

Kwok Winn wants to open a new business in his own country, Singapore. He has decided on a form of licensing that will provide him with a standard package of products, systems, and management services in order to sell fast food to local residents. Which of the following best describes the form of business that Mr. Winn has chosen? A. Direct sales B. Indirect exporting C. Joint venture D. Strategic alliance E. Franchising

E. Franchising In this case, Mr. Winn has chosen to conduct his business through franchising. Franchising is a rapidly growing form of licensing in which the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management.

All of the following statements are true about Mercosur EXCEPT that: A. it is the second-largest common-market agreement in the Americas after NAFTA. B. the Treaty of Asunción provided the legal basis for Mercosur. C. it is the most influential and successful free trade area in South America. D. Mexico has observer status in Mercosur. E. Germany is a member of Mercosur.

E. Germany is a member of Mercosur.

Which of the following characterizes the variable-cost pricing approach? A. In this approach, prices are often set on a cost-plus basis, that is, total costs plus a profit margin. B. This approach insists that no unit of a similar product is different from any other unit in terms of cost. C. This approach insists that each unit must bear its full share of the total fixed and variable cost. D. This approach is suitable when a company has high variable costs relative to its fixed costs. E. In this approach, any contribution to fixed cost after variable costs are covered is profit to the company.

E. In this approach, any contribution to fixed cost after variable costs are covered is profit to the company. Variable-cost (or marginal-cost) pricing is a practical approach to pricing when a company has high fixed costs and unused production capacity. Any contribution to fixed cost after variable costs are covered is profit to the company.

In the context of Latin American trade progress, which of the following was a result of state ownership? A. Inclusion of foreign and domestic private ownership B. Efficient state treasuries C. Efficient public companies D. Predictable regulatory environments E. Inflated public-sector bureaucracies

E. Inflated public-sector bureaucracies State ownership was once considered the ideal engine for economic growth. Instead of economic growth, however, they ended up with inflated public-sector bureaucracies, complicated and unpredictable regulatory environments, the outright exclusion of foreign and domestic private ownership, and inefficient public companies.

Which of the following is especially vulnerable as EU member states decide which area of regulation should apply to these services? A. Newspaper advertising B. Radio advertising C. Outdoor services D. Personal selling E. Internet services

E. Internet services Internet services are especially vulnerable as EU member states decide which area of regulation should apply to these services.

Which of the following statements is true regarding an export management company (EMC)? A. It acts as a middleman for firms with relatively large international sales volume. B. It operates under its own name while providing services to another firm. C. It does not have direct responsibility to the parent firm. D. It acts as a middleman for firms willing to involve their own personnel in international functions. E. It calls for minimum investment from the parent firm to get into international markets.

E. It calls for minimum investment from the parent firm to get into international markets. The export management company (EMC) is an important middleman for firms with relatively small international volume or those unwilling to involve their own personnel in the international function. Two of the chief advantages of EMCs are minimum investment on the part of the company to get into international markets, and no commitment of company personnel or major expenditure of managerial effort.

Which of the following is true of a physical distribution system? A. It involves only the physical movement of goods. B. It is a total systems approach to the management of the distribution process. C. It includes decisions involving an activity that has no impact on the cost and efficiency of one or all others. D. It excludes the interdependence of the costs of each activity. E. It includes transportation mode, inventory quantities, and packing.

E. It includes transportation mode, inventory quantities, and packing. A physical distribution system involves more than the physical movement of goods. It includes the location of plants and warehousing (storage), transportation mode, inventory quantities, and packing. The concept of physical distribution takes into account the interdependence of the costs of each activity; a decision involving one activity affects the cost and efficiency of one or all others. In fact, because of their interdependence, the sum of each of the different activity costs entails an infinite number of "total costs."

Which of the following is true of the CFTA? A. It was designed to establish similar literacy levels in North American states. B. It created several independent commercial markets for goods and services. C. It was a customs union like the European Community. D. It involved both economic and political unions. E. It provided only for the elimination of tariffs and other trade barriers between the United States and Canada.

E. It provided only for the elimination of tariffs and other trade barriers between the United States and Canada.

Which of the following statements is true about NAFTA? A. It allows the use of standards and technical regulations as obstacles to trade. B. It was ratified and became effective in the year 2000. C. It prohibits U.S. and Canadian financial institutions to open wholly owned subsidiaries in Mexico. D. Its provisions require goods to contain minimum of 10% North American content to be traded duty free. E. Its provisions require Canada, Mexico, and the United States to implement uniform customs procedures and regulations.

E. Its provisions require Canada, Mexico, and the United States to implement uniform customs procedures and regulations. NAFTA provisions on services state that both U.S. and Canadian financial institutions are permitted to open wholly owned subsidiaries in Mexico, and all restrictions on the services they offer will be lifted. Refer to Exhibit 9.6-Key Provisions of NAFTA.

Which of the following substages best characterizes the United States today with respect to the evolution of the marketing process? A. Mass production B. Commercial-transition C. Self-sufficiency D. Surplus commodity product E. Mass distribution

E. Mass distribution The marketing process in the U.S. today is said to be characterized by mass distribution. The marketing functions which take place at this stage are demand creation, physical distribution, market information, market and product planning, and development. Refer to Exhibit 9.4-Evolution of the Marketing Process.

Which of the following organizational structures is the most extensive of those usually adopted by companies? A. Transnational structure B. Geographical division structure C. Region-specific structure D. Global product division structure E. Matrix structure

E. Matrix structure The matrix form—the most extensive of the three organizational structures—is popular with companies as they reorganize for global competition.

Which of the following companies has been known for its ability to adapt to local needs and wants in the international marketplace since its inception in 1866? A. Kodak B. General Foods C. R.J. Reynolds Tobacco D. Ralston Purina E. Nestlé

E. Nestlé Nestlé has been international almost from its start in 1866 as a maker of infant formula. Nestlé certainly hasn't been bothered by the debate on standardization versus adaptation. Its overall strategy can be summarized in four points: (1) think and plan long term, (2) decentralize, (3) stick to what you know, and (4) adapt to local tastes.

56. Which of the following elements of the international communications process comprises of external influences such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication? A. Selecting a message source B. Encoding C. Selecting a message channel D. Decoding E. Noise

E. Noise Noise comprises various external influences such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication.

Floral Group Inc., an importing organization in New York, buys perfumes from GS Inc. in France for $13 a unit. Unknown to GS, Floral Group sells this product in the United States for $15 a unit. This leads to a loss of revenue for GS Inc. as it also sells its perfume in the United States but for a higher price of $18. Which of the following best describes the above scenario? A. Black-listed importing B. Direct importing C. Circular importing D. Co-mingled importing E. Parallel importing

E. Parallel importing

Which of the following relationship skills is necessary during the interfacing activity of building a strategic alliance? A. Trust building B. Creating intimacy C. Good relationship self-awareness D. Commitment E. Partnering

E. Partnering It involves facilitating the creation of personal relationships at many levels, traveling to partner facilities and engaging in technical conversations, and blending social and business time. These actions require the key relationship skill of partnering. Refer to Exhibit 12.3-Building Strategic Alliances.

While developing an international advertisement campaign, which of the following is the first step of the process? A. Compose and secure a budget based on what is required to meet goals. B. Specify the goals of the communication. C. Select effective media. D. Execute the campaign. E. Perform marketing research.

E. Perform marketing research. The steps to be performed for developing an international advertisement campaign are: perform marketing research; specify the goals of the communication; develop the most effective message(s) for the market segments selected; select effective media; compose and secure a budget based on what is required to meet goals; execute the campaign; and evaluate the campaign relative to the goals specified.

Dr. Townes is a dentist practicing in Denver. During a four-day stretch in March, it snowed so heavily that not a single patient was able to visit him. Since none of the appointments took place, he did not make any money in those four days, even though his normal expenses remained. In this scenario, which of the following characteristics of services is most likely affecting Dr. Townes' business? A. Tangibility B. Separability C. Profitability D. Homogeneity E. Perishability

E. Perishability Dr. Townes business is most likely affected by the perishable nature of the dental services rendered by him. A service is perishable in that once created it cannot be stored but must be consumed simultaneously with its creation. Services are distinguished by four unique characteristics—intangibility, inseparability, heterogeneity, and perishability— and thus require special consideration.

_____ is the term used to describe the changes mandated by local product and service standards. A. Product localization B. Product protectionism C. Product disapprobation D. Product dilution E. Product homologation

E. Product homologation A product may have to change in a number of ways to meet the physical or mandatory requirements of a new market, ranging from simple package changes to total redesign of the physical core product. The term used to describe the changes mandated by local product and service standards is product homologation.

Which of the following, according to experienced exporters, is the only way to select a middleman? A. Conduct a background check on all the distributors available in the target market B. Issue a request-for-proposal to all distributors in the target market and evaluate their responses C. Consult other manufacturers of similar products and select the distributor recommended by them D. Consult trade organizations and select the distributor recommended by them E. Talk personally to ultimate consumers to find whom they consider to be the best distributors

E. Talk personally to ultimate consumers to find whom they consider to be the best distributors Experienced exporters suggest that the only way to select a middleman is to go personally to the country and talk to ultimate users of your product to find whom they consider to be the best distributors. Visit each possible middleman once before selecting the one to represent you; look for one with a key person who will take the new product to his or her heart and make it a personal objective to make the sale of that line a success.

_____ suffer(s) from issues such as difficulty in assessing taxes, unfair competition, import duties, and privacy. A. The radio B. Direct mail C. Magazines D. Newspapers E. The Internet

E. The Internet As the Internet continues to grow and countries begin to assert control over what is now a medium with few restrictions, increasing limitations will be set. Beyond the control of undesirable information, issues such as pay-per-view, taxes, unfair competition, import duties, and privacy are being addressed all over the world.

Which of the following is NOT one of the factors directly changing the way countries trade and prosper in the twenty-first century? A. The transition from socialist to market-driven economies B. Liberalization of trade and investment policies in developing countries C. The transfer of public-sector enterprises to the private sector D. The rapid development of regional market alliances E. The increase in military capabilities of countries around the world

E. The increase in military capabilities of countries around the world The transition from socialist to market-driven economies, the liberalization of trade and investment policies in developing countries, the transfer of public-sector enterprises to the private sector, and the rapid development of regional market alliances are changing the way countries will trade and prosper in the 21st century.

Which of the following statements is true of a traditional distribution structure? A. The distribution system is national in scope. B. The relationship between the importer and any middleman is similar to that found in a mass-marketing system. C. The idea of a channel as a chain of intermediaries performing specific activities and each selling to a smaller unit beneath it until the chain reaches the ultimate consumer is common. D. Independent agencies providing functions such as advertising, marketing research, and financing are part of this distribution structure. E. The marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

E. The marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. In an import-oriented or traditional distribution structure, an importer controls a fixed supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. In the resulting seller's market, market penetration and mass distribution are not necessary because demand exceeds supply, and in most cases, the customer seeks the supply from a limited number of middlemen.

Which of the following subjects is explored after developing information and selecting a country market in the international planning process? A. Company character B. The constraints of home country C. Geography D. Host-country constraints E. The mode of entry

E. The mode of entry With the information developed in the international planning process and a country market selected, the decision regarding the entry mode can be made. The choice of mode of entry is one of the more critical decisions for a firm because the choice will define the firm's operations and affect all future decisions in that market.

Which of the following is true of large multinational markets? A. They lead to negligible marketing efficiencies. B. They are incapable of achieving economies of scale. C. They are particularly important to businesses not accustomed to mass production. D. They result in decreased purchasing power. E. They employ coordinated programs to foster economic growth.

E. They employ coordinated programs to foster economic growth. Most multinational groups have coordinated programs to foster economic growth as part of their cooperative efforts.

Which of the following is the most probable reason a manufacturer would choose to conduct its manufacturing operations in a third country? A. To standardize middlemen margins B. To reduce the credit risk of the seller C. To increase the capital-labor ratio D. To avoid antidumping duties E. To reduce manufacturing costs

E. To reduce manufacturing costs One of the important reasons for manufacturing in a third country is an attempt to reduce manufacturing costs and thus price escalation.

Lower prices to the buyer may also mean lower tariffs, because most tariffs are levied on a(n) _____ basis. A. specific B. alternative C. accrual D. shorter, lower E. ad valorem

E. ad valorem

The emergence of pan-European communications media will most likely cause companies to: A. opt for localized promotional campaigns. B. opt for greater customization of promotional efforts. C. promote their products only in English. D. use only the Internet as their message channel. E. choose more standardized promotional efforts.

E. choose more standardized promotional efforts. The emergence of pan-European communications media is enticing many companies to push the balance toward more standardized promotional efforts. As media coverage across Europe expands, it will become more common for markets to be exposed to multiple messages and brands of the same product.

Most toy manufacturers would agree that toys cannot be marketed profitably in countries without commercial television advertising directed toward children. In this scenario, commercial television advertising exemplifies the availability of appropriate _____. A. demonstrations B. personal selling services C. direct mailing services D. financial aid E. communication channels

E. communication channels In many markets, the availability of appropriate communication channels to customers can determine entry decisions. For example, most toy manufacturers would agree that toys cannot be marketed profitably in countries without commercial television advertising directed toward children.

The transitional sector differs from the modern urban sector in that the transitional sector: A. is an exclusively agriculture-oriented sector. B. consists of population that works in the country side. C. consists of an expanding Westernized middle class. D. represents the high-income urban slums. E. consists of population that moves from the country to the large cities.

E. consists of population that moves from the country to the large cities. Directly juxtaposed to the modern sector, the transitional sector contains those moving from the country to the large cities. It is usually represented by low-income urban slums

If a company wished to alter a product's platform so that the product could be manufactured in a variety of forms, to meet local differences in five different foreign markets, the component of the product component model that is most likely to be under consideration is: A. support services. B. packaging. C. delivery. D. ancillary. E. core.

E. core.

The level of market development roughly parallels the stages of _____. A. economic stagnation B. economic duress C. economic repression D. economic equilibrium E. economic development

E. economic development

Nations with complementary economic bases are least likely to: A. develop a distinctive monetary system. B. allow individual differences to be outweighed by the total benefit of economic integration. C. experience internal economic development. D. achieve enlargement of market opportunities through preferential tariff treatment. E. encounter frictions in the development and operation of a common market unit.

E. encounter frictions in the development and operation of a common market unit. Nations with complementary economic bases are least likely to encounter frictions in the development and operation of a common market unit.

A company that views pricing as a static element in a business decision most probably: A. places a high priority on foreign business. B. sets prices to achieve specific objectives such as targeted return on profit. C. views export sales as active contributions to sales volume. D. views domestic sales as an insignificant source of revenue. E. exports only excess inventory.

E. exports only excess inventory. The company that follows pricing as a static element, probably exports only excess inventory, places a low priority on foreign business, and views its export sales as passive contributions to sales volume.

The _____ step in the international communications process refers to the information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process. A. message channel selection B. interpretation C. encoding D. decoding E. feedback

E. feedback The feedback step in the international communications process refers to the information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process.

A(n) _____ is a domestic middleman set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property. A. Webb-Pomerene export association B. manufacturer's export agent C. export management company D. complementary marketer E. foreign sales corporation

E. foreign sales corporation A foreign sales corporation (FSC) is a sales corporation set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property. Manufacturers and export groups can form FSCs. An FSC can function as a principal, buying and selling for its own account, or a commissioned agent.

A _____ is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries. A. restricted trade area B. noncooperation agreement C. regional cooperation for development D. tariff pact E. free trade area

E. free trade area A free trade area is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries.

From a sociological viewpoint, any idea perceived as new by a group of people is considered as a(n) _____. A. creation B. adaptation C. declension D. tradition E. innovation

E. innovation

A product is said to be compatible if: A. it provides greater value to the manufacturers than to the consumers. B. the degree of social repercussions associated with it is high. C. its benefits can be communicated easily. D. it has a higher degree of complexity compared with its counterparts'. E. it complies with the accepted norms, values, and culture of the local market.

E. it complies with the accepted norms, values, and culture of the local market.

A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that covers only one or two markets. A. manufacturer's retail store B. export management company C. Webb-Pomerene export association D. global retailer E. manufacturer's export agent

E. manufacturer's export agent The manufacturer's export agent (MEA) is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers. Unlike the EMC, the MEA does not serve as the producer's export department but has a short-term relationship, covers only one or two markets, and operates on a straight commission basis.

Ingrid Cleaners develops promotional materials and product demonstrations to easily communicate the benefits of its cleaning products. In this scenario, Ingrid Cleaners tries to enhance the _____ of its products. A. partibility B. discordancy C. vincibility D. complexity E. observability

E. observability

If a company is altering the price of its product to compete with the local companies in the international market, it is most likely focusing on the _____ component of the product, according to the product component model. A. core B. support C. design D. maintenance E. packaging

E. packaging The packaging component includes style features, packaging, labeling, trademarks, brand name, quality, price, and all other aspects of a product's package.

A characteristic of a service is that it is _____, since it cannot be stored and must be consumed simultaneously with its creation. A. durable B. separable C. indelible D. tangible E. perishable

E. perishable

Integrated marketing communications are composed of all of the following EXCEPT: A. advertising. B. sales promotions. C. trade shows. D. public relations. E. political rallying.

E. political rallying. Integrated marketing communications (IMC) are composed of advertising, sales promotions, trade shows, personal selling, direct selling, and public relations.

If the supply of a product in a market is limited, a company may follow a _____ approach to maximize revenue and to match demand to supply. A. penetration pricing B. psychological pricing C. variable-cost pricing D. predatory pricing E. price skimming

E. price skimming

When the Indian rupee depreciated against the U.S. dollar, PC manufacturers who were dependent on imported components had to either absorb the increased cost or _____. A. raise the quantity of inputs they used in production B. give discounts to their customers C. increase the wages that they paid to labor D. increase the production of PCs E. raise the price of PCs

E. raise the price of PCs When the rupee in India depreciated significantly against the U.S. dollar, PC manufacturers faced a serious pricing problem. Because the manufacturers were dependent on imported components, their options were to absorb the increased cost or raise the price of PCs

Nuan, a television manufacturer in Korea, had to simplify its televisions before introducing it to the Zimbabwean markets, as the country lacked the skills to repair the product in case of a malfunction. The local salesforce too did not have the sufficient knowledge about the installation of the product. The factor that is influencing product adaptation in this scenario is ________. A. legal requirements B. climatic requirements C. political requirements D. cultural requirements E. technological requirements

E. technological requirements By simplifying its television sets, Nuan has adapted its product to match the technological standards of the Zimbabwean market. Legal, economic, political, technological, and climatic requirements of the local marketplace often dictate product adaptation.

E-commerce is more developed in _____ than the rest of the world, partly because of the lower cost of access to the Internet than found elsewhere. A. China B. Brazil C. Switzerland D. South Africa E. the United States

E. the United States E-commerce is more developed in the United States than the rest of the world, partly because of the vast number of people who own personal computers and partly because of the much lower cost of access to the Internet than found elsewhere.

In most cases, the reason why products cost relatively little in one country and cost more in another is: A. the profiteering measures taken by exporting companies. B. the consistency in perception of quality in all countries. C. the inelastic demand of most consumer goods. D. the requirement that all export goods must use set skimmed price. E. the higher costs of exporting.

E. the higher costs of exporting. People traveling abroad often are surprised to find goods that are relatively inexpensive in their home country priced outrageously high in other countries. Because of the natural tendency to assume that such prices are a result of profiteering, manufacturers often resolve to begin exporting to crack these new, profitable foreign markets only to find that, in most cases, the higher prices reflect the higher costs of exporting.

When a company exports a product from the United States to another country, the company is most likely to be unable to determine the ultimate price of a product if: A. the channels of distribution are short. B. the number of middlemen in its distribution channels is low. C. large orders are placed by retailers. D. marketing and distribution channel infrastructures are well developed. E. the middleman markups are not standardized.

E. the middleman markups are not standardized. Channel length and marketing patterns vary widely, but in most countries, channels are longer and middleman margins higher than is customary in the United States. The diversity of channels used to reach markets and the lack of standardized middleman markups leave many producers unaware of the ultimate price of a product.

One of the drawbacks of satellites, which is also their strength, is: A. the cost of creating a high quality ad for satellite television. B. the limited market penetration of satellite television. C. the number of intermediaries required for satellite service transmission. D. the government regulations placed on satellite advertising. E. their ability to span a wide geographical region.

E. their ability to span a wide geographical region. One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different country markets. That means a single message is broadcast throughout a wide area. This span may not be desirable for some products.

Which of the following is the best way to stimulate economic development and growth from within developing countries?

Encouraging entrepreneurial activities that are networked.

Considering the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, Brazil falls under the group of more-developed countries (MDCs).

FALSE is an NIC

According to the UN classification, industrially developing countries just entering world trade with relatively low per capita incomes are referred to as more-developed countries.

FALSE many in Asia or Latin America are classified as less-developed countries

A commonwealth of nations is an organization providing for the strongest possible economic integration relationship

FALSE A commonwealth of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration.

The first step in the international planning process is to adapt the marketing mix to target markets.

FALSE A critical first step in the international planning process is deciding in which existing country market to make a market investment.

Joint ventures are similar in structure and organization to minority holdings by a multinational company (MNC) in a local firm.

FALSE A joint venture is different from other types of strategic alliances or collaborative relationships in that a joint venture is a partnership of two or more participating companies that have joined forces to create a separate legal entity. Joint ventures are different from minority holdings by an MNC in a local firm.

With some exceptions, usually a majority of the population of less developed countries can be reached readily through the traditional mass medium of advertising.

FALSE A majority of the population of less developed countries cannot be reached readily through the traditional mass medium of advertising.

A physical distribution system involves only the physical movement of goods.

FALSE A physical distribution system involves more than the physical movement of goods. It includes the location of plants and warehousing (storage), transportation mode, inventory quantities, and packing.

A customs union is the most fully integrated form of regional cooperation.

FALSE A political union is the most fully integrated form of regional cooperation. It involves complete political and economic integration, either voluntary or enforced.

A proper encoding system allows a company to correct errors before substantial damage occurs.

FALSE A proper feedback system allows a company to correct errors before substantial damage occurs.

Merchant middlemen tend to be more controllable than agent middlemen because they take title to manufacturers' goods.

FALSE Agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise. Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen.

Around the Asia Pacific Rim, where U.S. companies face unfamiliar legal and cultural barriers, it is preferable to buy an existing business than to enter into a joint venture.

FALSE Around the Asia Pacific Rim, where U.S. companies face unfamiliar legal and cultural barriers, joint ventures are preferred to buying existing businesses.

To be a success in the global marketplace today, the best companies will focus on country as the primary segmentation variable.

FALSE As global markets continue to homogenize and diversify simultaneously, the best companies will avoid the trap of focusing on country as the primary segmentation variable.

The actual attributes of an innovation is a variable that affects the rate of diffusion of a product.

FALSE At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived newness, the perceived attributes of the innovation, and the method used to communicate the idea.

Barter houses help countries negotiate prices for imports and exports and also provide facilities for cash payments and receipts.

FALSE Barter houses specialize in trading goods acquired through barter arrangements and are the primary outside source of aid for companies beset by the uncertainty of a countertrade.

As the price of a particular product remains the same in different markets, the product sold in one country may be exported to another and undercut the prices charged in that country

FALSE Because of the different prices possible in different country markets, a product sold in one country may be exported to another and undercut the prices charged in that country.

Involving fewer middlemen in distribution means higher overall taxes.

FALSE Besides eliminating markups, fewer middlemen may mean lower overall taxes. Some countries levy a value-added tax on goods as they pass through channels.

Contests, sweepstakes, and sponsorship of special events such as concerts are techniques used for maintaining and improving public relations.

FALSE Cents-off, in-store demonstrations, samples, coupons, gifts, product tie-ins, contests, sweepstakes, sponsorship of special events such as concerts, the Olympics, fairs, and point-of-purchase displays are types of sales promotion devices.

Companies should use the full-cost pricing approach when it has high fixed costs relative to its variable costs.

FALSE Companies following the full-cost pricing philosophy insist that no unit of a similar product is different from any other unit in terms of cost and that each unit must bear its full share of the total fixed and variable cost. This approach is suitable when a company has high variable costs relative to its fixed costs.

Legal advice is not necessary when entering distribution contracts with middlemen.

FALSE Competent legal advice is vital when entering distribution contracts with middlemen. But as many experienced international marketers know, the best rule is to avoid the need to terminate distributors by screening all prospective middlemen carefully.

Countertrading does not benefit countries that face a shortage of hard currencies with which to trade.

FALSE Corporate debts to suppliers, payments and services, even taxes—all have a noncash component or are entirely bartered. Many countries constantly face a shortage of hard currencies with which to trade and thus resort to countertrades when possible.

Products from developing countries have the highest quality image.

FALSE Countries are also often stereotyped on the basis of whether they are industrialized, in the process of industrializing, or developing. Industrialized countries have the highest quality image, and products from developing countries generally encounter bias.

Domestic middlemen offer many advantages for companies with large international sales volume.

FALSE Domestic middlemen offer many advantages for companies with small international sales volume, those inexperienced with foreign markets, those not wanting to become immediately involved with the complexities of international marketing, and those wanting to sell abroad with minimal financial and management commitment.

Europe and Asia have a trade group that has emerged and persisted since the dissolution of the Soviet Union called the Newly Independent States.

FALSE Europe and Asia have a trade group that has emerged and persisted since the dissolution of the Soviet Union: the Commonwealth of Independent States (CIS).

For countervailing duties to be invoked, it must be shown that prices are higher in the importing country than in the exporting country.

FALSE For countervailing duties to be invoked, it must be shown that prices are lower in the importing country than in the exporting country and that producers in the importing country are being directly harmed by the dumping.

Green marketing is the term frequently used to identify a marketer's efforts to reduce its dependency on U.S. dollars as the standard for international exchange.

FALSE Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities.

Historically, standards have been used to effectively increase market access.

FALSE Historically, standards have been used to effectively limit market access. Restrictive standards have kept competing products, whether from other European countries or elsewhere, out of their respective markets.

If a product is culturally sensitive, then decisions related to the product are more likely to be centralized

FALSE If a product is culturally sensitive, the decisions are more likely to be decentralized.

Companies that use pricing to achieve marketing objectives use pricing as a static element

FALSE If prices are viewed as an active instrument of accomplishing marketing objectives, the company sets prices (rather than following market prices) to achieve specific objectives, whether targeted returns on profit, targeted sales volumes, or some other specific goals.

When a message from a source is converted into effective symbolism for transmission to a receiver, the message is said to have been decoded.

FALSE If the message from a source is converted into effective symbolism for transmission to a receiver, the message is encoded. Decoding occurs when the receiver interprets the symbolism transmitted from the information source.

In an import-oriented distribution structure, supply often exceeds demand.

FALSE In an import-oriented or traditional distribution structure, an importer controls a fixed supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. In the resulting seller's market, market penetration and mass distribution are not necessary because demand exceeds supply, and in most cases, the customer seeks the supply from a limited number of middlemen.

In countries where large shares of the population are moving into middle-income classes, penetration pricing becomes irrelevant as a tool to stimulate market growth.

FALSE In country markets experiencing rapid and sustained economic growth, and where large shares of the population are moving into middle-income classes, penetration pricing may be used to stimulate market growth even with minimum competition. Penetration pricing may be a more profitable strategy than skimming if it maximizes revenues as a base for fighting the competition that is sure to come.

In the context of international advertising, an advertiser should ideally exclude availability, cost, and coverage of media.

FALSE In international advertising, an advertiser must consider the availability, cost, coverage, and appropriateness of the media. Local variations and lack of market data require added attention.

In bills of exchange, the buyer assumes all the risk until the payment is made.

FALSE In letters of credit, the credit of one or more banks is involved, but with bills of exchange (also known as dollar drafts), the seller assumes all risk until the actual dollars are received.

In static economies, consumption patterns change rapidly.

FALSE In static economies, consumption patterns become rigid, and marketing is typically nothing more than a SUPPLY effort. In a dynamic economy, consumption patterns change rapidly.

In the 1970s, the market segmentation argument in global marketing was framed as "global integration versus local responsiveness."

FALSE In the 1970s, the market segmentation argument was framed as "standardization versus adaptation." In the 1980s, it was "globalization versus localization," and in the 1990s, it was "global integration versus local responsiveness."

In the United States, if a middleman is terminated, the company is required to pay 1 percent of the middleman's average annual compensation multiplied by the number of years the middleman served as a final settlement.

FALSE In the United States, termination is usually a simple action regardless of the type of middlemen; they are simply dismissed. However, in other parts of the world, the middleman often has some legal protection that makes termination difficult.

In a traditional distribution structure, distribution systems are national rather than local in scope.

FALSE In the traditional distribution structure, distribution systems are local rather than national in scope, and the relationship between the importer and any middleman in the marketplace is considerably different from that found in a mass-marketing system. The idea of a channel as a chain of intermediaries performing specific activities and each selling to a smaller unit beneath it until the chain reaches the ultimate consumer is not common in an import-oriented system.

When a marketing executive advertises his product in a newspaper, the newspaper acts as a feedback channel.

FALSE In this case, since the marketer is sending his message to his target audience through a newspaper, the newspaper acts as a message channel.

A Korean television manufacturer recently invested in a new television tube plant in Mexico. This form of international business is aptly named international licensing.

FALSE In this case, the Korean television manufacturer is engaged in direct foreign investment. In this type of investment, companies may invest locally to capitalize on low-cost labor, to avoid high import taxes, to reduce the high costs of transportation to market, to gain access to raw materials and technology, or as a means of gaining market entry.

With indirect exporting, a company sells to a customer in another country without the use of any intermediaries or distributors.

FALSE Indirect exporting usually means that a company sells to a buyer (importer or distributor) in the home country, which in turn exports the product.

Industrial advertisers rarely use direct mail for advertising

FALSE Industrial advertisers are heavy mail users and rely on catalogs and sales sheets to generate large volumes of international business.

High transaction costs associated with the use of the Internet prevents smaller firms in emerging countries from selling into a global market.

FALSE Lower transaction costs associated with the use of the Internet enable small firms in Asia or Latin America to work together to develop a global reach. Smaller firms in emerging economies can now sell into a global market.

Mercosur is the largest common-market agreement in the Americas.

FALSE Mercosur is the second-largest common-market agreement in the Americas after NAFTA.

The Mercosur envisioned central institutions similar to those of the European Union institutions.

FALSE Mercosur members were concerned about sacrificing sovereign control over taxes and other policy matters; hence the agreement envisioned no central institutions similar to those of the European Union institutions.

Feedback channels must be carefully selected if an encoded message is to reach the consumer.

FALSE Message channels must be carefully selected if an encoded message is to reach the consumer.

Nations with complementary economic bases are most likely to encounter frictions in the development and operation of a common market unit.

FALSE Nations with complementary economic bases are LEAST likely to encounter frictions in the development and operation of a common market unit.

The European Union has been an officially established political union since its inception.

FALSE Now that the Economic and Monetary Union is in place and most participating members share a common currency, the European Union is headed toward political union as well.

Cartels have the ability to maintain control of markets for indefinite periods.

FALSE One important aspect of cartels is their inability to maintain control of markets for indefinite periods.

In the context of distribution structures, one of Walmart's strengths is its ability to influence foreign governments.

FALSE One of Walmart's strengths in distribution is its internal Internet-based system, which makes its transactions with suppliers more efficient and lowers its cost of operations.

Due to their inherent entertainment value, satellite TV and the Internet have become major communications media in almost all nations.

FALSE Possibly because of their inherent entertainment value, radio and television have become major communications media in almost all nations.

Services such as insurance and dry cleaning are classified as tangible.

FALSE Products are often classified as tangible, whereas services are intangible. Automobiles, computers, and furniture are examples of products that have a physical presence; insurance, dry cleaning, hotel accommodations, and airline passenger or freight service, in contrast, are intangible.

In the context of distribution patterns, wholesaling shows a greater diversity in its structure than does retailing.

FALSE Retailing shows even greater diversity in its structure than does wholesaling.

Sales on open accounts are recommended when shipping is hazardous

FALSE Sales on open accounts are generally not recommended when the practice of the trade is to use some other method, when special merchandise is ordered, when shipping is hazardous, when the country of the importer imposes difficult exchange restrictions, or when political unrest requires additional caution.

Sales promotions are long-term IMC efforts directed to the consumer or retailer.

FALSE Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase, consumer introduction to the store or brand, gaining retail point-of-purchase displays, encouraging stores to stock the product, and supporting and augmenting advertising and personal sales efforts.

Longer channels of distribution are more appropriate for keeping prices under control than shorter channels of distribution.

FALSE Shorter channels can help keep prices under control. Designing a channel that has fewer middlemen may lower distribution costs by reducing or eliminating middleman markups.

One of the major consequences of the Maastricht Treaty (1992) was that the 12 members of the European Union agreed to dissolve the Union.

FALSE The 12 nations of the European Community ratified the Maastricht Treaty and committed themselves to economic and political integration.

The Arab states on the Persian Gulf, Egypt, and Morocco have worked out an agreement on the Gulf Arabian Free Trade Area (GAFTA).

FALSE The Arab states on the Persian Gulf, Egypt, and Morocco worked out an agreement on an Arab Free Trade Area, sometimes called the Greater Arab Free Trade Area (GAFTA).

The Commonwealth of Independent States (CIS) was formed by Britain because it did not want to join the European Economic Community (EEC).

FALSE The Commonwealth of Independent States (CIS) was formed by the republics of the former Soviet Union.

The Council of Ministers of the European Union can enact into law all proposals involving changes in tax rates on products and services by majority vote.

FALSE The Council can enact into law all proposals by majority vote except for changes in tax rates on products and services, which require unanimous vote.

In the context of the distribution structure in Japan, it has been observed that Japanese consumers favor cheaper prices over personal service.

FALSE The Japanese consumer contributes to the continuation of the traditional nature of the distribution system through frequent buying trips, small purchases, favoring personal service over price, and a proclivity for loyalty to brands perceived to be of high quality. Additionally, Japanese law gives the small retailer enormous advantage over the development of larger stores and competition.

The Japanese distribution structure is similar to the one found in the United States or in Europe.

FALSE The Japanese distribution structure is different enough from its U.S. or European counterparts that it should be carefully studied by anyone contemplating entry. The Japanese system has four distinguishing features: (1) a structure dominated by many small middlemen dealing with many small retailers, (2) channel control by manufacturers, (3) a business philosophy shaped by a unique culture, and (4) laws that protect the foundation of the system—the small retailer.

A distinguishing characteristic of the Japanese distribution channel system is that it is controlled by a few small retailers found in the country.

FALSE The Japanese system has four distinguishing features: (1) a structure dominated by many small middlemen dealing with many small retailers, (2) channel control by manufacturers, (3) a business philosophy shaped by a unique culture, and (4) laws that protect the foundation of the system—the small retailer.

In the context of foreign market entry, licensing is least suitable when capital is scarce.

FALSE The advantages of licensing are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse.

The United States-Canada Free Trade Area (CFTA) was a customs union like the European Community.

FALSE The agreement between the United States and Canada was not a customs union like the European Community; no economic or political union of any kind was involved. It provided only for the elimination of tariffs and other trade barriers.

The importance of political unity to fully achieve all the benefits of economic integration has driven European countries to form the World Trade organization (WTO).

FALSE The communist threat no longer exists, but the importance of political unity to fully achieve all the benefits of economic integration has driven European countries to form the Union (EU).

The packaging component consists of the physical product—the platform that contains the essential technology—and all its design and functional features.

FALSE The core component consists of the physical product—the platform that contains the essential technology—and all its design and functional features. The packaging component includes style features, packaging, labeling, trademarks, brand name, quality, price, and all other aspects of a product's package

In the context of global marketing, a product's country of origin cannot affect its brand's image significantly.

FALSE The country of origin can affect a product or brand's image significantly. A finding in a recent study suggests that more knowledgeable consumers are more sensitive to a product's COE than those less knowledgeable are.

The distribution channel process includes all activities, beginning with the manufacturer and ending with the retailer.

FALSE The distribution channel process includes all activities, beginning with the manufacturer and ending with the final consumer. This inclusion means the seller must exert influence over two sets of channels: one in the home country and one in the foreign-market country.

The distribution process includes promotion of goods and services by sellers and resellers.

FALSE The distribution process includes the physical handling and distribution of goods, the passage of ownership (title), and—most important from the standpoint of marketing strategy—the buying and selling negotiations between producers and middlemen and between middlemen and customers.

The level of political stability in a country is the single most important environmental element to which the foreign marketer must adjust the marketing task.

FALSE The economic level of a country is the single most important

Domestic cartelization is legal in the United States.

FALSE The legality of cartels at present is not clearly defined. Domestic cartelization is illegal in the United States.

Adaptation of the nonphysical features of a product can be avoided while trying to adapt the product to a new culture

FALSE The meaning and value imputed to the psychological attributes of a product can vary among cultures and are perceived as negative or positive. To maximize the bundle of satisfactions received and to create positive product attributes rather than negative ones, adaptation of the nonphysical features of a product may be necessary.

The most basic level of economic integration and cooperation is the geographical local federation (GLF).

FALSE The most basic level of economic integration and cooperation is the regional cooperation for development (RCD).

The possibility of a parallel market occurs whenever price differences are less than the cost of transportation between two markets.

FALSE The possibility of a parallel market occurs whenever price differences are greater than the cost of transportation between two markets.

In general, the rate of diffusion of a product is negatively related to its relative advantage.

FALSE The rate of diffusion of a product can be postulated as positively related to relative advantage, compatibility, trialability, and observability but negatively related to complexity.

According to the product component model, the instructions for using the product and the warranty of the product are included under the packaging component.

FALSE The support services component includes repair and maintenance, instructions, installation, warranties, deliveries, and the availability of spare parts.

Uruguay is a member of NAFTA.

FALSE The three members of NAFTA are the United States, Canada, and Mexico.

International advertisers use foreign national consumer magazines extensively because they have dependable circulation figures.

FALSE The use of foreign national consumer magazines by international advertisers has been notably low for many reasons. Few magazines have a large circulation or provide dependable circulation figures.

An e-vendor in a foreign market can generally ignore culture as an important variable because the commerce is being done via the Internet, which is culturally insensitive.

FALSE The website and the product must be culturally neutral or adapted to fit the uniqueness of a market, because culture does matter.

Export management companies work under their own names

FALSE Typically, the EMC becomes an integral part of the marketing operations of its client companies. The export management companies work under the names of the manufacturers. An export management company functions as a low-cost, independent marketing department with direct responsibility to the parent firm.

Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process of communication are called feedback.

FALSE Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process of communication are called noise.

Using foreign-country middlemen moves the manufacturer away from the market and the company becomes less involved with problems of language, physical distribution, communications, and financing.

FALSE Using foreign-country middlemen moves the manufacturer closer to the market and involves the company more closely with problems of language, physical distribution, communications, and financing. Foreign middlemen may be agents or merchants, they may be associated with the parent company to varying degrees, or they may be hired temporarily for special purposes

When the marketing process in a country is in the commercial-transition substage, the only marketing function performed is physical distribution.

FALSE When the marketing process in a country is in the commercial-transition substage, the marketing functions performed are demand creation, physical distribution, and market information analysis.

Companies from Japan are the leading group of investors in the United States.

False

For companies today, becoming international is a luxury only some can afford.

False

Global competition has put more power in the hands of the seller.

False

One uncontrollable element that is generally well understood is the level of technology.

False

Political and legal forces, economic climate, and competition are some of the domestic environment controllable.

False

Sam Watkins just recently ate and, therefore, feels justified in refusing food from his Middle Eastern host. In this instance, Sam's self-reference criterion has just saved him from making a cultural blunder.

False

The global marketing concept views the marketplace as consisting of one primary domestic market that is complimented by several smaller regional markets.

False

The international marketer is not affected by domestic competition.

False

The most effective approach to build global awareness into an organization is to increase the diversity mix of the employee profile.

False

Which of the following organizations has a better chance of accelerating their internationalization precess?

Firms with key managers well networked internationally

Which of the following is the stereotype of businesspeople in the Northeast area of China?

Forthrightness

Robert Jonas is in charge of a new marketing effort directed toward Peru. In order for his company to effectively market and distribute to all of Peru's major cities, Mr. Jonas must devise a logistics plan for crossing the Andes Mountains on a daily basis. Which of the following foreign environment uncontrollable variables would a chief concern as Mr. Jonas devises his plan?

Geography and infrastructure

For a company at the _________ stage of internationalization, market segments are defined by income levels, usage patterns, or other factors that frequently span countries and regions.

Global marketing

Maria Peron's company treats the world, including the home market in Spain, as one market. Market segmentation decisions no longer focus on national borders. Instead, market segments are defined by income levels, usage patterns, and other factors that span countries and regions. Which of the following stages BEST characterizes the stage of international marketing involvement for Ms. Person's company?

Global marketing

Which of the following is true with respect to Professor Jared Diamond's ideas regarding the influence of geography on history and cultural values?

Historically, innovations spread faster east to west than north to south.

Which of the following are the two most important steps China has to take to ensure that the road to economic growth is smooth?

Improving human rights and reforming the legal system.

Which of the following was primarily instrumental in decreasing the historical tension between People's Republic of China (PRC) and the Republic of China (ROC)?

Increase in direct trade.

Which of the following is NOT one of the stages of international marketing involvement?

Indirect foreign marketing

Which of the following is one of the primary reasons behind the persistence of economic stagnation in Japan in the 1990s?

Inept political apparatus

___________ is the performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit.

International marketing

Which of the following is true of ethnocentrism?

It is generally a problem when managers from affluent countries work with managers and markets in less affluent countries.

Which of the following is true of the APEC?

It promotes economic cooperation.

The __________ is an uncontrollable element that can often be misread because of the vast difference that may exist between developed and undeveloped countries.

Level of technology.

The three contiguous provinces in Northeast China _____, Jilin, and Heilongjiang have long represented a cohesive unit in terms of culture and the political economy and are referred to as "dongbei", meaning Northeast, or "dong sansheng", meaning Northeastern Three Provinces.

Liaoning

The Ajax Corporation has decided to enter the international marketing arena by marketing its products on a country-by-country basis, with separate marketing strategies for each country. The company is using which of the following concepts to formulate its international policies and strategies?

Multidomestic market concept

Which of the following is a factor that exacerbates the volatility in demand in industrial markets?

Professional buyers in the industrial market tend to act in concert.

Amy Sims has been assigned the task of preparing a marketing plan for a company for the next year's business activities. She knows that she should begin her plan of examining the variables that she has some control over. these controllable variables would include price, product, channels-of-distribution, and:

Promotion

A survey of U.S. manufacturers shows that 95 percent of respondents with Indian operations plan on expanding, and none say they are leaving. Which of the following is primarily behind this new trend?

Qualified labor is cheap, and the market potential is massive.

The most effective way to control the influence of ethnocentrism and the SRC is to:

Recognize their effects on out behavior.

Which of the following can be used as a measure to manage volatility in industrial demand in the domestic market?

Reducing advertising expenditures during booms

_____ a boomtown bordering Hong Kong and a fishing village just 20 years ago has replaced the provincial capital Guangzhou to lead the local economy.

Shenzhen

Which of the following is at present the center of trade links with north China and the Asian republics of the former Soviet Union?

South Korea

Which of the following is one of the nations referred to as the Four Asian Tigers?

South Korea

The liberalization of trade and investment policies in developing countries are changing the way countries will trade and prosper in the 21st century.

TRUE The transition from socialist to market-driven economies, the liberalization of trade and investment policies in developing countries, the transfer of public-sector enterprises to the private sector, and the rapid development of regional market alliances are changing the way countries will trade and prosper in the 21st century.

A cartel exists when various companies producing similar products or services work together to control markets for the types of goods and services they produce.

TRUE A cartel exists when various companies producing similar products or services work together to control markets for the types of goods and services they produce.

A business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective is called a strategic international alliance (SIA).

TRUE A strategic international alliance (SIA) is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective.

Agent middlemen work on commission and do not take title to the merchandise

TRUE Agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise. By using agents, the manufacturer assumes trading risk but maintains the right to establish policy guidelines and prices and to require its agents to provide sales records and customer information.

An irrevocable, confirmed letter of credit means that a U.S. bank accepts responsibility to pay the seller regardless of the financial situation of the buyer or foreign bank.

TRUE An irrevocable, confirmed letter of credit means that a U.S. bank accepts responsibility to pay regardless of the financial situation of the buyer or foreign bank. From the seller's viewpoint, this step eliminates the foreign political risk and replaces the commercial risk of the buyer's bank with that of the confirming bank.

As a country develops, market behavior changes and eventually it leads to market segmentation.

TRUE As a country develops, incomes change, population concentrations shift, expectations for a better life adjust to higher standards, new infrastructures evolve, and social capital investments are made. Market behavior changes, and eventually groups of consumers with common tastes and needs (i.e., market segments) arise.

From the marketing perspective, the ideal market segment size, if customer satisfaction is the goal, is one.

TRUE As the information explosion allows marketers to segment markets ever more finely, it is only the manufacturing and/or finance managers in companies who argue for standardization for the sake of economies of scale. From the marketing perspective, customization is always best. The ideal market segment size, if customer satisfaction is the goal, is one.

One of the three variables that affect the rate of diffusion of a product is the perceived attributes of product innovation.

TRUE At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived newness, the perceived attributes of the innovation, and the method used to communicate the idea.

At the most general level, the WTO represents the most important and comprehensive trade agreement in history.

TRUE At the most general level, the World Trade Organization represents the most important and comprehensive trade agreement in history. However, beyond the WTO, multinational market groups take several other forms, varying significantly in the degree of cooperation, dependence, and interrelationship among participating nations.

Phase 3 of the international planning process involves developing a marketing plan and deciding budgets and profit expectations.

TRUE At the third stage of the international planning process, a marketing plan is developed for the target market—whether it is a single country or a global market set. The specific plan establishes what is to be done, by whom, how it is to be done, and when. Included are budgets and sales and profit expectations.

Cultural barriers play a bigger role in services than in merchandise trade.

TRUE Because trade in services frequently involves people-to-people contact, culture plays a much bigger role in services than in merchandise trade.

Big emerging markets are of major political importance within their regions.

TRUE Big emerging markets have undertaken significant programs of economic reform and are of major political importance within their regions.

Effective advertising and proper positioning of products can help brands to ameliorate a less-than-positive country stereotype.

TRUE Brands effectively advertised and products properly positioned can help ameliorate a less-than-positive country stereotype.

Channels of distribution often pose longevity problems.

TRUE Channels of distribution often pose longevity problems. Most agent middlemen firms tend to be small institutions. When one individual retires or moves out of a line of business, the company may find it has lost its distribution in that area.

Companies that are serious about restricting the gray market must establish and monitor controls that effectively police distribution channels.

TRUE Companies that are serious about restricting the gray market must establish and monitor controls that effectively police distribution channels. In some countries they may get help from the courts.

The role of public relations is to create good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators.

TRUE Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of public relations (PR).

Deflation results in ever-decreasing prices, creating a positive result for consumers, but both put pressure to lower costs on everyone in the supply chain.

TRUE Deflation results in ever-decreasing prices, creating a positive result for consumers, but both put pressure to lower costs on everyone in the supply chain. In a deflationary market, it is essential for a company to keep prices low and raise brand value to win the trust of consumers.

Different cultures often seek the same value or benefits from the primary function of a product.

TRUE Different cultures often seek the same value or benefits from the primary function of a product—for example, the ability of an automobile to get from point A to point B, a camera to take a picture, or a wristwatch to tell time.

Economic development means rapid economic growth and increases in consumer demand

TRUE Economic development, as commonly defined today, tends to mean rapid economic growth and increases in consumer demand—improvements achieved "in decades rather than centuries."

Eliminating costly functional features or lowering overall product quality can minimize price escalation.

TRUE Eliminating costly functional features or even lowering overall product quality is a method of minimizing price escalation.

Errors at the receiver end of the international communications process can be avoided if the message is encoded properly.

TRUE Errors at the receiver end of the process generally result from a combination of factors: an improper message resulting from incorrect knowledge of use patterns, poor encoding producing a meaningless message, poor media selection that does not get the message to the receiver, or inaccurate decoding by the receiver so that the message is garbled or incorrect

According to Everett Rogers, the element of time differentiates diffusion from other types of communication research.

TRUE Everett Rogers noted that "crucial elements in the diffusion of new ideas are an innovation, which is communicated through certain channels, over time, among the members of a social system." Rogers continued with the statement that it is the element of time that differentiates diffusion from other types of communications research.

Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.

TRUE Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.

Exporting is a common market-entry approach for mature international companies with strong marketing and relational capabilities.

TRUE Exporting is a common market-entry approach for mature international companies with strong marketing and relational capabilities.

Trading companies provide the best means for intensive coverage of the market in Japan

TRUE For companies seeking entrance into the complicated Japanese distribution system, the Japanese trading company offers one of the easiest routes to success. Because trading companies may control many of the distributors and maintain broad distribution channels, they provide the best means for intensive coverage of the market.

Franchising is a rapidly growing form of licensing in which a franchiser provides a standard package of products, systems, and management services, and a franchisee provides market knowledge, capital, and personal involvement in management.

TRUE Franchising is a rapidly growing form of licensing in which a franchiser provides a standard package of products, systems, and management services, and a franchisee provides market knowledge, capital, and personal involvement in management.

In Phase 2 of the international planning process, the results of an analysis frequently indicate that the marketing mix would require such drastic adaptation that a decision not to enter a particular market is made.

TRUE Frequently, the results of the analysis in Phase 2 of the international planning process indicate that the marketing mix will require such drastic adaptation that a decision not to enter a particular market is made. The primary goal of Phase 2 is to decide on a marketing mix adjusted to the cultural constraints imposed by the uncontrollable elements of the environment that effectively achieves corporate objectives and goals.

From a sociological viewpoint, any idea perceived as new by a group of people is an innovation.

TRUE From a sociological viewpoint, any idea perceived as new by a group of people is an innovation.

When there are alternative products in a market, all of which meet performance quality standards, the product chosen is the one that meets market-perceived quality attributes.

TRUE In a competitive marketplace in which the market provides choices, most consumers expect performance quality to be a given. When there are alternative products, all of which meet performance quality standards, the product chosen is the one that meets market-perceived quality attributes.

In a free trade zone, payment of import duties is postponed until the product leaves the free trade zone and enters the country.

TRUE In a free port or FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the country.

In the traditional distribution structure, independent agencies that provide facilitating functions are nonexistent or underdeveloped.

TRUE In a traditional distribution structure, the importer-wholesaler performs most of the marketing functions. Hence, independent agencies that provide advertising, marketing research, warehousing and storage, transportation, financing, and other facilitating functions found in a developed, mature marketing infrastructure are nonexistent or underdeveloped.

The term product homologation is used to describe the changes mandated by local product and service standards.

TRUE In many countries, the term product homologation is used to describe the changes mandated by local product and service standards.

Sales promotions constitute the major portion of the promotional effort in rural and less accessible parts of a market.

TRUE In markets in which the consumer is hard to reach because of media limitations, the percentage of the promotional budget allocated to sales promotions may have to be increased. In some less developed countries, sales promotions constitute the major portion of the promotional effort in rural and less accessible parts of the market.

With respect to the international planning process, the marketing plan begins with a situation analysis and culminates in the selection of an entry mode and a specific action program for a market.

TRUE In the context of the international planning process, the marketing plan begins with a situation analysis and culminates in the selection of an entry mode and a specific action program for a market.

Ten high-technology companies joined forces to produce and market their products in China. By joining together, these companies were able to enter the Chinese market for the first time. A good name for this type of arrangement is a consortium.

TRUE In this case, the arrangement by the ten high-technology companies to produce and market their products together in the Chinese market is an example of a consortium. Consortia are similar to joint ventures and could be classified as such except for two unique characteristics: (1) They typically involve a large number of participants and (2) they frequently operate in a country or market in which none of the participants is currently active.

A reason for the failure of marketing communications is that the message received by the intended audience is not understood because of different cultural interpretations.

TRUE International communications may fail for a variety of reasons: A message may not get through because of media inadequacy, the message may be received by the intended audience but not be understood because of different cultural interpretations, or the message may reach the intended audience and be understood but have no effect because the marketer did not correctly assess the needs and wants or even the thinking processes of the target market.

Iran, Pakistan, and Turkey, formerly the Regional Cooperation for Development (RCD), have renamed their regional group the Economic Cooperation Organization (ECO).

TRUE Iran, Pakistan, and Turkey, formerly the Regional Cooperation for Development (RCD), have renamed their regional group the Economic Cooperation Organization (ECO).

In countries with low-literacy rates, the pictures and symbols on products are literally taken as instructions and information.

TRUE It is easy to forget that in low-literacy countries, pictures and symbols are taken literally as instructions and information. Care must be taken to ensure that corporate trademarks and other parts of the packaging component do not have unacceptable symbolic meanings.

Letters of credit shift the buyer's credit risk to the bank issuing the letter of credit.

TRUE Letters of credit shift the buyer's credit risk to the bank issuing the letter of credit. When a letter of credit is employed, the seller ordinarily can draw a draft against the bank issuing the credit and receive dollars by presenting proper shipping documents.

Multinational market regions are those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers.

TRUE Multinational market regions are those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers.

Competitive advertising is a source of noise in the international communications process.

TRUE Noise comprises external influences such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication.

Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

TRUE Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different cultures.

TRUE One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different country markets. That means a single message is broadcast throughout a wide area. This span may not be desirable for some products

One of the most important aspects of LAIA that differs from LAFTA is the differential treatment of member countries according to their level of economic development.

TRUE One of the most important aspects of LAIA that differs from LAFTA, its predecessor, is the differential treatment of member countries according to their level of economic development.

Patent rights, trademark rights, and the rights to use technological processes are granted in foreign licensing.

TRUE Patent rights, trademark rights, and the rights to use technological processes are granted in foreign licensing.

Problems of literacy, media availability, and types of media create problems in the international communications process at the encoding step.

TRUE Problems of literacy, media availability, and types of media create challenges in the communications process at the encoding step.

The decision to standardize or adapt a product is crucial in delivering quality

TRUE Quality is not just desirable, but essential for success in today's competitive global market, and the decision to standardize or adapt a product is crucial in delivering quality.

Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

TRUE Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

In the context of retail patterns, direct marketing works well in affluent markets as well as in markets with underdeveloped distribution systems.

TRUE Selling directly to the consumer through mail, by telephone, or door-to-door is often the approach of choice in markets with insufficient or underdeveloped distribution systems. The approach, of course, also works well in the most affluent markets.

Setting the right price for a product can be the key to success or failure in international markets.

TRUE Setting the right price for a product or service can be the key to success or failure in international markets.

Spreading the portfolio of markets served brings important stability of revenues and operations to many global companies.

TRUE Spreading the portfolio of markets served brings important stability of revenues and operations to many global companies.

Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and the long-and short-term goals of a company.

TRUE Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and the long- and short-term goals of a company.

In the Treaty of Amsterdam (1977), the European Union agreed to accommodate the changes brought about by the monetary union and the admission of new members.

TRUE The Amsterdam Treaty increases the authority of the institutions of the European Union and is designed to accommodate the changes brought about by the monetary union and the admission of new members.

The Commonwealth of Independent States is a loose economic and political alliance with open borders but no central government.

TRUE The CIS is a loose economic and political alliance with open borders but no central government.

The European Commission (EC) mandate requires a product to be evaluated on all significant environmental effects throughout its life cycle, from manufacturing to disposal

TRUE The European Commission issued guidelines for ecolabeling that became operational in 1992. Under the directive, a product is evaluated on all significant environmental effects throughout its life cycle, from manufacturing to disposal—a cradle-to-grave approach.

The European Union was created when the 12 nations of the European Community ratified the Maastricht Treaty.

TRUE The European Union was created upon ratification of the Maastricht Treaty by 12 nations of the European Community.

The most advanced and viable of Africa's regional organizations is called the Southern African Development Community.

TRUE The Southern African Development Community is the most advanced and viable of Africa's regional organizations.

The blueprint for the European Union began with the Treaty of Rome in 1957.

TRUE The Treaty of Rome established the European Economic Community (EEC). The European Union is an extension of the EEC.

The WTO is wholly dedicated to making trade among nations more efficient.

TRUE The World Trade Organization, with its 160 members and 24 observers, is wholly dedicated to making trade among nations more efficient.

The amount of equity required by a company to use different modes of entry in a new market affects the risk, return, and control that it will have in each mode.

TRUE The amount of equity required by a company to use different modes of entry in a new market affects the risk, return, and control that it will have in each mode

One of the core components in the product component model is the product platform.

TRUE The core component of the product component model comprises the product platform that contains the essential technology and all its design and functional features.

The feedback step of the international communications process is important as a check on the effectiveness of the other steps.

TRUE The feedback step of the communications process is important as a check on the effectiveness of the other steps.

Building a strategic international alliance (SIA) takes several steps to be successful. The first step in building strategic alliances is called dating.

TRUE The first step in building strategic alliances is called dating. Refer to Exhibit 12.3-Building Strategic Alliances.

The growth of free trade areas that are tariff-free among members but have a common tariff for non-members creates an opportunity that can be capitalized on by direct investment

TRUE The growth of free trade areas that are tariff-free among members but have a common tariff for non-members creates an opportunity that can be capitalized on by direct investment.

The initial aim of a multinational market is to protect businesses that operate within its borders.

TRUE The initial aim of a multinational market is to protect businesses that operate within its borders

In the context of advertising, a marketer's self-reference criterion (SRC) affects the ultimate success of the communication.

TRUE The international communications model's significance is that one or all steps in the process, cultural factors, or the marketer's self-reference criterion (SRC) can affect the ultimate success of the communication.

The international marketer must rely on experience and marketing research to ascertain middleman costs because no convenient source of data on middleman costs is available.

TRUE The international marketer must rely on experience and marketing research to ascertain middleman costs because no convenient source of data on middleman costs is available.

The more congruent product perceptions are with current cultural values, the more rapid product diffusion or acceptance will be.

TRUE The more congruent product perceptions are with current cultural values, the less resistance there will be and the more rapid product diffusion or acceptance will be.

In the context of planning for global markets, the planning process is a primary medium of organizational learning.

TRUE The planning process is a primary medium of organizational learning.

The portion of international business handled on a cash-in-advance basis is not large and this is typically used when credit is doubtful.

TRUE The portion of international business handled on a cash-in-advance basis is not large. Cash places unpopular burdens on the customer and typically is used when credit is doubtful.

The quality of an infrastructure directly affects a country's economic growth potential.

TRUE The quality of an infrastructure directly affects a country's economic growth potential and the ability of an enterprise to engage effectively in business. Infrastructure is a crucial component of the uncontrollable elements facing marketers.

The first Soviet republics to declare independence were the Baltic states.

TRUE The series of events after the aborted coup against Mikhail Gorbachev led to the complete dissolution of the USSR. The first Soviet republics to declare independence were the Baltic states, which quickly gained recognition by several Western nations.

In the context of international advertising, search engines have now become crucial directors of Internet users' attention.

TRUE The sheer proliferation of the number of websites makes it increasingly difficult for a customer to stumble across a particular page. Search engines have now become crucial directors of Internet users' attention.

While developing an international advertisement campaign, the last step of the process is evaluating the campaign relative to the goals specified.

TRUE The steps to be performed for developing an international advertisement campaign are: perform marketing research; specify the goals of the communication; develop the most effective message(s) for the market segments selected; select effective media; compose and secure a budget based on what is required to meet goals; execute the campaign; and evaluate the campaign relative to the goals specified.

The support services component of the product component model contains such items as repair and maintenance and availability of spare parts.

TRUE The support services component includes repair and maintenance, instructions, installation, warranties, deliveries, and the availability of spare parts.

A majority of services enter foreign markets by licensing, franchising, or direct investment.

TRUE The vast majority of services (some 85 percent) enter foreign markets by licensing, franchising, or direct investment.

As traditional channel structures are changing, importers and retailers are also becoming involved in new product development.

TRUE Traditional channel structures are giving way to new forms, new alliances, and new processes—some more slowly than others, but all are changing. Multinational marketers are seeking ways to profitably tap market segments that currently are served by costly, traditional distribution systems. Direct marketing, door-to-door selling, hypermarkets, discount houses, shopping malls, catalog selling, the Internet, and other distribution methods are being introduced in an attempt to provide efficient distribution channels. Importers and retailers also are becoming more involved in new product development.

Traditional channels in developing countries evolved from economies with a strong dependence on imported manufactured goods.

TRUE Traditional channels in developing countries evolved from economies with a strong dependence on imported manufactured goods. In an import-oriented or traditional distribution structure, an importer controls a fixed supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

An export management company functions as a low-cost, independent marketing department with direct responsibility to the parent firm.

TRUE Typically, the export management company (EMC) becomes an integral part of the marketing operations of its client companies. Working under the names of the manufacturers, the EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm. The working relationship is so close that customers are often unaware they are not dealing directly with the export department of the company.

Price escalation could lead to the sales of exported goods being confined to a limited segment of wealthy, price-insensitive customers.

TRUE Unless some of the costs that create price escalation can be reduced, the marketer is faced with a price that may confine sales to a limited segment of wealthy, price-insensitive customers. In many markets, buyers have less purchasing power than in the United States and can be easily priced out of the market.

What is occurring in the BEMs is analogous to the situation after World War II when tremendous demand was created during the reconstruction of Europe.

TRUE What is occurring in the BEMs is analogous to the situation after World War II when tremendous demand was created during the reconstruction of Europe. As Europe rebuilt its infrastructure and industrial base, demand for capital goods exploded; as more money was infused into its economies, consumer demand also increased rapidly.

When the only marketing functions performed are demand creation and physical distribution, the marketing process is said to be in the mass distribution substage.

TRUE When the only marketing functions performed are demand creation and physical distribution, the marketing process is said to be in the mass production substage. Refer to Exhibit 9.4-Evolution of the Marketing Process.

To remain price competitive when the U.S. dollar is strong, export-oriented companies must find ways to offset the higher price caused by currency values.

TRUE When the value of the U.S. dollar is weak relative to the buyer's currency (i.e., it takes fewer units of the foreign currency to buy a dollar), companies generally employ cost-plus pricing. To remain price competitive when the dollar is strong (i.e., when it takes more units of the foreign currency to buy a dollar), companies must find ways to offset the higher price caused by currency values.

With the adoption of the euro, price differentials are much easier to spot, and the consumer can search for the best bargains in brand-name products more easily.

TRUE With the adoption of the euro, price differentials are much easier to spot, and the consumer can search for the best bargains in brand-name products more easily.

Immediately after World War II, a shattered Japanese nation arrived at a consensus goal for national recovery. That consensual goal provided the incentive for its spectacular progress, decade after decade. Then during the late 1980s, the Japanese people stepped back and looked around at their manifest achievement. It was easy to conclude they had reached their coveted goal. So the question for them became, "all right, what's next?" This theory tries to explain the Japanese crisis of the 1990s. Which of the following theory are we talking about?

The Cultural Causation theory.

This region in China includes three cities of over 5 million inhabitants (Hong Kong, Guangzhou, and Shenzhen); five cities with more than 1 million inhabitants (Zhuhai, Huizhou, Foshan, Zhongshan, and Dongguan); and a number of cities that each contain approximately half a million inhabitants, such as Macau. Identify the region.

The Greater Pearl River area

Which of the following is true of the standard of living of the eight most populous countries of the Asia/Pacific region?

The Japanese healthcare system produces the longest lifespans in the world.

Negotiators from this region in China have been the closest to foreign influences, which has yielded their special forms of entrepreneurship and spontaneity. They are excellent traders and particularly interested in making short-term gains. Identify the region.

The Pearl River Delta

Which of the following is a possible outcome of the alien status of a company?

The company can be seen as an exploiter

Which of the following will expand demand for industrial goods and business services in Latin America?

The privatization of state-owned enterprises

Which of the following is one of the primary targets of ASEAN Vision 2020?

To implement fully and as rapidly as possible the ASEAN Free Trade Area.

A company at the "no direct foreign marketing" stage of international marketing involvement does not actively cultivate customers outside national boundaries.

True

A self-reference criterion is closely related to ethnocentrism.

True

In a domestic situation, political details and the ramifications of political and legal events are often more transparent than they are in some foreign countries.

True

In dealing with unfamiliar markets, marketers must be aware of the frames of reference they are using in making their decisions.

True

Research has revealed that smaller home markets and larger production capacities appear to favor internationalization.

True

The cost and quality of the product are among the most important criteria by which purchases are made.

True

The international marketer must deal with at least two levels of uncontrollable uncertainty.

True

The level of technology is an uncontrollable element for international marketers.

True

The process of evaluating the uncontrollable elements in an international marketing program involves substantial doses of cultural, political, and economic shock.

True

Which of the following is true of commercial relationships in countries with collectivistic and high-context cultures?

Trust is a crucial aspect of commercial relationships.

Cultures with high ______ scores tend to have a high level of anxiety and stress and a concern with security and rule following.

Uncertainty Avoidance index

With respect to the environment in which a business operates, such factors as competition, legal restrains, government controls, and the weather would all be examples of what are called:

Uncontrollable elements

Companies from ______ lead in foreign investments in the United States.

United Kingdom

Based on Richard Nisbett's metaphor involving Confucius's worthy picture, what is his analysis regarding the thought process or perceptual process of Westerners?

Westerners can provide great details about central figures but see relatively little in the background

Which of the following is a cultural hurdle in the path of China becoming a vast market in the long run?

Xenophobia

Which of the following BEST exemplifies the tolerance of a globally aware manager?

You must allow others to be different and equal

_____ is known as China's Silicon Valley.

Zhongguancun

Mervin is excited about his new home in the Phillippines. Though native of Los Angeles, he has been given the opportunity to learn about a new culture, form new friendships, and capitalize on opportunities that were not available in his previous home or workplace. He will go through what is known as _______ as he adjusts to living in the Phillipines.

acculturation

Firms that sell industrial goods in international market should focus on after-sales services because these services:

are almost always more profitable than the actual sale of the goods themselves.

C. K. Prahalad and associates introduced the concept of a global market, not necessarily defined by national borders but rather by the pockets of poverty across countries, and consisting of 4 billion people across the globe with annual incomes of less than $1,200. They refer to these consumers, concentrated in the LDCs and LLDCs, as _____ markets.

bottom-of-the-pyramid

The most rapidly growing sector of U.S. international trade today consists of

business services

Numerous studies indicate a direct link between the literacy rate of a country and its:

capability for rapid economic growth

Linguistic distance is an important factor that helps in determining differences in values across countries and the amount of trade between countries because:

crossing "wider" language differences increases transaction costs.

______ is a responsibility effort to learn from others' cultural ways in the quest for better solutions to a society's particular problems.

cultural borrowing

Morton Foods has decided to introduce a new line of turkey products to the American consumer. Turkey steaks resemble beefsteak in taste but are made from turkey meat, and are leaner and healthier for a variety of reasons. However, the company is concerned that the product will not be accepted in America. If Morton Foods follows a strategy of _______, they are more likely to have a successful introduction of the new product.

cultural congruence

_______ refers to a strategy that involves marketing products similar to ones already on the market thereby minimizing resistance

cultural congruence

_______ refers to being attuned to the nuances of culture so that a new culture can be viewed objectively, evaluated, and appreciated.

cultural sensitivity

When designing a product, the style, uses, and other related marketing activities must be made ______ if they are to be operative and meaningful.

culturally acceptable

Most traditional definitions of _______ center around the notion that it is the sum of the values, rituals, symbols, beliefs, and thought processes that are learned, shared by a group of people, and transmitted from generation to generation.

culture

The sum total of knowledge, beliefs, art, morals, laws, customs, and any other capabilities and habits acquired by humans as members of society is called_________.

culture

The first meeting of the members of the ASEAN+3 was devoted to devising a system whereby the member countries could:

defend their currencies against future attack.

Derived demand can be defined as demand that is:

dependent on another source.

Governments influence thinking and behavior through the:

enforcement of a variety of laws affecting consumption and marketing behaviors

As countries move from agricultural to industrial to services economies, birthrates increase.

false

Cultures with high Uncertainty Avoidance Index scores tend to have a low level of anxiety and stress.

false

For a marketer, one's own religion is most often the best guide to another's beliefs.

false

For most of the 20th century, the predominant approach to governance in the world was colonialism.

false

In some countries, language is itself thought of as a social institution, with no relation to political importance.

false

In the context of social institutions such as families, the ratio of male to female children is scarcely affected by culture.

false

The Power Distance dimension of culture, identified by Geert Hofstede, has proven to be the most useful of the four dimensions.

false

Half of Shanghai's GDP is derived from its _____.

financial services industries

On the basis of Hofstede's four dimensions, cultures with high Power Distance Index (PDI) scores tend to be:

hierarchical

The process of total quality management (TQM) starts with:

involving customers in the product development process.

Which of the following reflects Dutch management professor Geert Hofstede's perception of culture?

it is a problem-solving tool

The most important advantage of Northeast China that mainly contributed toward its being the industrial and technological center of the country in the 1970s and 1980s is:

its juxtaposition with China's most important industrial neighbors.

In the context of the elements of culture, rituals are patterns of behavior and interaction that are:

learned and repeated

In the context of the relationship between language and international marketing, recent studies indicate that a new concept, ______, is proving useful to marketing researchers in market segmentation and strategic entry decisions.

linguistic distance

Which of the following social institutions is considered to have had a detrimental effect on American culture?

media

An important dimension of quality is how well the product:

meets the specific needs of the buyer

In the 1970s, Frank Gibney had called Japan "The Fragile Superpower", which was confirmed with the crisis of the 1990s. In his new appraisal, Gibney writes that Japan has become the victim of:

one-party sickness.

Nexar Energy is advoating the use of solar power to replace all petroleum-based energy sources. The company holds demonstrations to show how solar power could be used in all major petroleum-based products -- automobiles, power sources, and heating and cooling. Nexar Energy is employing a strategy of ________, a deliberate attempt to change the way we do things with respect to energy sources.

planned change

Mary is a new international sales representative for an industrial supply company. She will learn that the inherent nature of industrial goods creates a market where:

product and marketing mix standardization are commonplace.

ISO 9000 concerns the:

registration and certification of a manufacturer's quality system.

Which of the following is a way individuals learn culture from social institutions?

socialization

If a country is in Stage 5 (the age of mass consumption) of Rostow's five-stage model of economic development, it purchases most of its highest-technology products and services from ________.

stage 5 suppliers

A country has reached a level of economic development where the manufacturing of both semidurable and nondurable consumer goods has just begun. Also, the goods demanded relate to equipment and supplies to support manufacturing. Which of the following stages of Rostow's five-stage model of economic growth does the country fit?

take off

Which of the following has become the primary vehicle for business-to-business promotion and selling in many foreign countries?

trade shows

________ provide the facilities for a manufacturer to exhibit and demonstrate products to potential users and to view competitors' products.

trade shows

According to James Day Hodgson, former U.S. ambassador to Japan, culture is like a "thicket" that is tough to get through, but effort and patience often leads to success.

true

According to the World Bank, no country with less than fifty percent literacy has succeeded economically.

true

Cultures low in Uncertainty Avoidance Index take a more empirical approach to understanding and knowledge

true

Dutch management professor Geert Hofstede argues that culture provides a guide for humans on how to think and behave.

true

In the context of the elements of culture, marriage ceremonies and funerals are good examples of rituals.

true

Marketers with little or no understanding of a religion may readily offend deeply because the influence of religion is often quite strong.

true

Markets constantly change; they are not static but evolve, expand, and contract in response to marketing effort, economic conditions, and other cultural influences

true

People from cultures with high Power Distance Index scores are more likely to have a general distrust of others.

true

Religion has a significant impact on the value systems of a society and the effect of value systems on marketing

true

The Individualism/Collective index, identified by Geert Hofstede, refers to the preference for behavior that promotes one's self-interest

true

The four social institutions that most strongly influence values and culture are schools, churches, families, and the media

true

The manner in and amount which people consume, the priority of needs and wants they attempt to satisfy, and the manner in which they satisfy them are functions of their culture.

true

The strategy of cultural congruence involves marketing products similar to ones already on the market in a manner as similar as possible with existing cultural norms, thereby minimizing resistance.

true

When marketers introduce an innovative product or idea, they act as agents of change.

true

Which of the following firms/products reflects a global marketing orientation?

A firm producing high-end sailing yachts

_____ in countries can distort media choice by changing the cost ratios of various media. A. Advertising taxation B. Language C. Power distance D. Cultural traits E. Dialect

A. Advertising taxation

Bahamas is a member of _____. A. CARICOM B. NAFTA C. CFTA D. LAIA E. Mercosur

A. CARICOM

_____ is often the approach of choice in markets with insufficient or underdeveloped distribution systems. A. Direct marketing B. A big wholesale store C. Internet selling D. A discount house E. Television advertising

A. Direct marketing Sometimes called direct marketing, selling directly to the consumer through mail, by telephone, or door-to-door is often the approach of choice in markets with insufficient or underdeveloped distribution systems. The approach, of course, also works well in the most affluent markets.

Which of the following approaches to pricing is most suitable when a company has high variable costs relative to its fixed costs? A. Full-cost pricing B. Marginal-cost pricing C. Variable-cost pricing D. Demand-based pricing E. Premium pricing

A. Full-cost pricing

Which of the following elements of integrated marketing communications is related to encouraging the press to cover positive stories about companies and managing unfavorable rumors, stories, and events? A. Public relations B. Direct selling C. Trade shows D. Personal selling E. Sales promotion

A. Public relations A public relations job consists of not only encouraging the press to cover positive stories about companies but also managing unfavorable rumors, stories, and events.

A _____ involves complete political and economic integration, either voluntary or enforced. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA)

A. political union

Economic planners are often more _____ oriented than marketing oriented. A. production B. advertising C. logistics D. theory E. distribution

A. production Economic planners frequently are more production oriented than marketing oriented and tend to ignore or regard distribution as an inferior economic activity.

The primary multinational trade group in Asia is _____.

ASEAN

Two major events that occurred in 2000 had a profound effect on China's economy. One of these is the United States's granting normal trade relations (NTR) to China on a permanent basis (PNTR). Which of the following is the other one?

Admission to the World Trade Organization.

Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge "best." Which of the following would not fit in the "best" stereotype scheme? A. English tea B. Indian cars C. French perfume D. Chinese silk E. Jamaican rum

B. Indian cars

Which is the largest services export of the United States, ranking behind only capital goods and industrial supplies when all exports are counted? A. Automobile services B. International tourism C. Banking services D. Research and development E. Education services

B. International tourism International tourism is by far the largest services export of the United States, ranking behind only capital goods and industrial supplies when all exports are counted.

Analysis of which of the following factors is carried out in Phase 2 of the international planning process? A. Company character B. Pricing C. Situation analysis D. Budgets E. Standards

B. Pricing The primary goal of Phase 2 is to decide on a marketing mix—product, price, promotion, and distribution—adjusted to the cultural constraints imposed by the uncontrollable elements of the environment that effectively achieves corporate objectives and goals. Incorrect decisions at this point lead to products inappropriate for the intended market or costly mistakes in pricing, advertising, and promotion. Refer to Exhibit 12.1-International Planning Process.

_____ are considered to be major communications media in most countries due to their inherent entertainment value. A. Newspapers and magazines B. Radio and television C. Newspapers and billboards D. Billboards and television E. Radio and newspapers

B. Radio and television

Which of the following treaties provided the legal basis for Mercosur? A. The Treaty of Verdun B. The Treaty of Asunción C. The Treaty of Westphalia D. The Treaty of Versailles E. The Treaty of Montevideo

B. The Treaty of Asunción The Treaty of Asunción, which provided the legal basis for Mercosur, was signed in 1991 and formally inaugurated in 1995.

Which of the following kinds of market sectors is also known as the "new middle class"? A. The traditional sector B. The modern sector C. The rural services sector D. The transitional sector E. The agricultural sector

B. The modern sector (1) the traditional rural/agricultural sector, (2) the modern urban/high-income sector, and (3) the often very large transitional sector. The modern urban/high income sector is also referred to as the "new middle class."

The Commonwealth of Independent States is: A. a political alliance with a central government. B. an economic and political alliance with open borders and no central government. C. an economic and political alliance with closed borders and a federal government. D. a federation of many states. E. a supranational organization similar to the old European community.

B. an economic and political alliance with open borders and no central government.

In the international communications process, an international marketing executive with a product message to communicate specifically acts as a(n) _____. A. decoder B. information source C. receiver D. encoder E. noise source

B. information source

Multinational market groups form: A. a large organization that promotes harmony by mutual agreement to a common peace treaty. B. large markets that provide potentially significant opportunities for international business. C. a conglomerate that seeks to undertake foreign trading ventures as one company. D. a nonprofit entity that works together to aid the development of underdeveloped countries. E. regional trading blocs without trade restrictions internally but with borders protected from outsiders.

B. large markets that provide potentially significant opportunities for international business. Multinational market groups form large markets that provide potentially significant opportunities for international business

According to the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, a country that is industrially underdeveloped, agrarian, has subsistence society with rural populations, and has extremely low per capita income levels falls under the category of _____. A. first world countries B. least-developed countries C. less-developed countries D. newly industrialized countries E. frontier markets

B. least-developed countries The least-developed countries (LLDCs) are industrially underdeveloped and agrarian. These countries have extremely low per capita income levels.

Using newspapers or magazine ads as a channel of communication when the majority of the intended users are illiterate is an example of ineffective _____ in the communications process. A. feedback B. media channel selection C. noise D. market selection E. message selection

B. media channel selection

Assuming that an international marketer has produced the right product, used the proper channel of distribution, and promoted the goods correctly, the effort is most likely to fail if the international marketer fails to: A. inform the host government about all its marketing objectives. B. set the right price for the goods or services. C. set the import tariff for the goods or services. D. form a joint venture in order to sell the product. E. work on a franchise basis in the country.

B. set the right price for the goods or services.

In the context of global marketing management, international marketers framed the argument toward market segmentation during the 1970s as _____. A. global integration versus one-to-one marketing B. standardization versus adaptation C. adaptation versus one-to-one marketing D. global integration versus local responsiveness E. standardization versus local responsiveness

B. standardization versus adaptation

_____ are the major components in the marketing communications mix for most companies. A. Public relations and advertising B. Direct selling and trade shows C. Advertising and personal selling D. Public relations and sales promotions E. Direct selling and sales promotions

C. Advertising and personal selling

Pots and Pans Inc., a large U.S. kitchenware distributor, takes a selection of its inventory twice a year to Vietnam and sells it to CookWell Corp., a large Vietnam-based kitchen retailer. CookWell, in turn, sells those products through its retail stores in Vietnam and Thailand. Which of the following best describes the alternative market-entry strategy that Pots and Pans is engaged in? A. Franchising B. Licensing C. Direct exporting D. A joint venture E. Direct foreign investment

C. Direct exporting In this scenario, Pots and Pans Inc. is engaged in direct exporting. With direct exporting, a company sells to a customer in another country. This method is the most common approach employed by companies taking their first international step because the risks of financial loss can be minimized.

Which of the following is true of the full-cost pricing approach? A. In this approach, firms regard foreign sales as bonus sales and assume that there will be no return over their variable costs. B. In this approach, firms are concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets. C. In this approach, prices are often set on a cost-plus basis, that is, total costs plus a profit margin. D. This approach is a practical approach to pricing when a company has high fixed costs and unused production capacity. E. This approach insists that each unit of a similar product is treated differently in terms of cost.

C. In this approach, prices are often set on a cost-plus basis, that is, total costs plus a profit margin.

_____ is a practical approach to pricing when a company has high fixed costs and unused production capacity. A. Full-cost pricing B. Cost-plus pricing C. Marginal-cost pricing D. Demand-based pricing E. Premium pricing

C. Marginal-cost pricing

Which of the following factors is mainly responsible for a perceptual bias when interpreting the characteristics of a product? A. Too much product information B. A shorter distribution channel C. Market analyst's self-reference criterion D. Low number of product competitors E. Authoritative product information of the market analyst

C. Market analyst's self-reference criterion A market analyst's self-reference criterion (SRC) may cause a perceptual bias when interpreting the characteristics of a product. Thus, instead of evaluating product characteristics from the foreign user's frame of reference, the marketer might analyze them from his or her frame of reference, leading to a misinterpretation of the product's cultural importance

Which of the following is the first phase in the international planning process? A. Adapting the marketing mix to target markets B. Developing the marketing plan C. Matching company and country needs D. Implementation and control E. Defining market segments

C. Matching company and country needs Whether a company is new to international marketing or heavily involved, an evaluation of potential markets is the first step in the planning process. A critical first step in the international planning process is deciding in which existing country market to make a market investment. Refer to Exhibit 12.1-International Planning Process.

_____ is a free trade group formed by Argentina, Brazil, Paraguay, and Uruguay. A. NAFTA B. Caricom C. Mercosur D. SACU E. DR-CAFTA

C. Mercosur

_____ results from the added costs incurred as a result of exporting products from one country to another. A. Price deflation B. Penetration pricing C. Price escalation D. Price gouging E. Predatory pricing

C. Price escalation Price escalation is the added costs incurred as a result of exporting products from one country to another.

In general, price decisions are viewed in two ways. Which of the following is one of them? A. Pricing entirely depends on factors that are often beyond the control of a company. B. Pricing is more a phenomenon of luck than planning. C. Pricing is an active instrument of accomplishing marketing objectives. D. The less control a company has over the final selling price of a product, the better it is able to achieve its marketing goals. E. The broader a company's product line, the less complex is the process of controlling prices to the end user.

C. Pricing is an active instrument of accomplishing marketing objectives

The Treaty of _____ established the European Economic Community (EEC) in 1957 and called for common external tariffs and the gradual elimination of intramarket tariffs, quotas, and other trade barriers. A. Kent B. Paris C. Rome D. Cannes E. Hamburg

C. Rome

The primary goal of Phase 2 of the international planning process is to: A. perform a preliminary analysis of a country. B. perform a screening of the environment. C. decide on a marketing mix according to the market segments. D. perform a situation analysis for the country that has been selected for expansion. E. implement action plans and measure performance.

C. decide on a marketing mix according to the market segments.

The institutions of the European Union form a(n) _____ pattern. A. bilateral B. unitary C. federal D. provincial E. autarchic

C. federal with executive, parliamentary, and judicial branches.

The _______ in India is a social institution that influences the roles and status positions found within Indian society.

Caste system

The task of ________ is the most challenging and important one confronting international marketers.

Cultural adjustments

Harry Johnson Tractor Corp. wishes to expand its presence in Eastern Europe. Toward that end, it has selected the countries where it will market its products. It has also selected a mode of entry. It is now in the process of implementing specific plans. Which of the following phases of the international planning process is Harry Johnson Tractor Corp. currently in? A. Phase 1 B. Phase 2 C. Phase 3 D. Phase 4 E. Phase 5

D. Phase 4 In this case, Harry Johnson Tractor Corp. is currently in Phase 4 of the international planning process. A "go" decision in Phase 3 triggers Phase 4 of the international planning process. Phase 4 involves implementation of specific plans and anticipation of successful marketing.

Adam, a hairstylist at a salon in Seattle, styles his customers in various ways. His work looks different on different people even though he has styled all of them. This unique character of a service that is unique for every customer as it is individually produced is referred to as ______. A. tangibility B. separability C. durability D. heterogeneity E. divisibility

D. heterogeneity A service is heterogeneous in that it is individually produced and is thus unique. Services are distinguished by four unique characteristics—intangibility, inseparability, heterogeneity, and perishability— and thus require special consideration.

A political decision involving ___________ would most likely have a direct effect on the firm's international marketing success.

Domestic foreign policy

Which of the following modes of foreign market entry offers the most control and the highest potential return for a company? A. Exporting B. Joint venture C. Contractual agreement D. Strategic alliance E. Direct foreign investment

E. Direct foreign investment Direct foreign investment requires the most equity of the four modes of foreign market entry and creates the greatest risk while offering the most control and the potential highest return.

Which of the following countries is NOT a member of the Caribbean Community and Common Market (CARICOM)? A. Barbados B. Dominica C. Grenada D. Jamaica E. Guatemala

E. Guatemala

Which of the following institutions drafted the Maastricht Treaty that was presented to the European Union member states for ratification? A. The United Nations B. The World Trade Organization C. The European Commission D. The Commonwealth Delineation E. The Council of Ministers

E. The Council of Ministers

Which of the following is a reason for East Asia's economic success? A. The availability of an extraordinarily rich land B. The existence of a common currency C. The implementation of Marxist-socialist policies D. The rise of autocracy E. The emphasis placed on education and healthcare

E. The emphasis placed on education and healthcare The formula for success in East Asia was an outward-oriented, market-based economic policy coupled with an emphasis on education and healthcare.

Which of the following is true of foreign sales corporations? A. They are commonly called piggybackers. B. They can only be related to a manufacturing parent and not an independent broker. C. They virtually control distribution through all levels of channels in Japan. D. They accumulate, transport, and distribute goods from many countries. E. They can function as principal or commissioned agents.

E. They can function as principal or commissioned agents. A foreign sales corporation can function as a principal, buying and selling for its own account, or a commissioned agent. It can be related to a manufacturing parent or can be an independent merchant or broker.

In the international communications process, during _____, the message from the source is converted into effective symbolism for transmission to a receiver. A. interpretation B. scrambling C. standardizing D. decoding E. encoding

E. encoding

The Economic and Monetary Union provision of the Maastricht Treaty established the parameters of the creation of the _____. A. dollar B. pound C. rupee D. ruble E. euro

E. euro

The World Trade Organization is wholly dedicated to _____. A. the expansion of capitalism B. the elimination of language barriers in trade C. free and open national borders D. the enforcement of international anti-bribery laws E. making trade among nations more efficient

E. making trade among nations more efficient

A product's _____ refers to the ease with which its benefits can be communicated to the customers. A. vincibility B. partibility C. complexity D. trialability E. observability

E. observability

Which of the following is one of the important reasons behind the fact that there is no one-growth strategy for China?

Each region in China being at a different stage economically.

The difference between domestic and international marketing lies in the different concepts of marketing.

False

Which of the following is NOT true of the impact of culture?

In dealing with unfamiliar markets, frames of reference are unimportant in evaluating the potential of a market

Which of the following statements regarding industrial goods is true?

Industrial goods are generally standardized.

The ___________ and issues abroad are often amplified by the "alien status" of the company, which increases the difficulty of properly assessing and forecasting the dynamic international business climate.

Political/legal forces

For a culture, a low score in the ______ reflects more egalitarian views.

Power Distance index

_____ contains Hong Kong, Macau, Guangzhou, and Shenzhen and it is considered as the world's manufacturing base for the IT industry.

The Pearl River Delta

Which of the following is the most critical difference between domestic marketing and international marketing?

The environment in which marketing plans must be implemented

According to the text, the primary difference in the practice of marketing at the domestic versus the international level is:

The environment within which the marketing plans must be implemented.

Which of the following statements is true of universal standards in the sale of international products?

The lack of universal standards limits the expansion of industries.

Why are German and Japanese firms generally better at managing market volatility than American firms?

They value employees highly and eschew layoffs.

What is common among the Asian countries Hong Kong, South Korea, Singapore, and Taiwan?

They were among the first countries in Asia to move from a status of developing countries to newly industrialized countries.

Harry Jordan's company has just entered into an agreement with a German firm to create a separate legal entity. This new firm will be allowed to conduct business and actively compete in various European Union markets. A good description of the new company is a joint venture

True A joint venture is a partnership of two or more participating companies that have joined forces to create a separate legal entity.

Among three kinds of distances that international marketers must traverse, time zones have the greatest influence on the success of their commercial efforts abroad.

True miles, time zones, and cultural distances—time zones have the greatest influence on the success of their commercial efforts abroad.

Much of American trade policy has depended on the happenstance of cotton being the original source of the Virginia colony's economic survival in the 1600s. `

false

S&F Advertising Agency has just signed a contract with Miracle Inc., a multimillion-dollar cosmetics company, to make advertisements for Miracle's products. Miracle wants S&F to come up with creative ideas for its recent expansion into South Asian markets of India and Indonesia. In order to accommodate Miracle, S&F has now opened offices in two Indian cities and one Indonesian city. In this context, S&F is a ________.

client follower

The first step in bringing about planned change in a society is to:

determine which cultural factors conflict with an innovation.

The Uncertainty Avoidance Index (UAI), one of the four dimensions of culture, identified by Geert Hofstede, focuses on assertiveness and achievement.

false

When a culture scores high on Individualism/Collectivism index, individuals fail to identify with groups.

false

Wayne is working at the overseas branch of his organization. He needs some clarification about a project. He approaches a senior manager thinking he would get a good explanation. However, he is instructed to follow protocol and sent away. Also, he is informed that only team leads are allowed to approach senior managers. This implies that the organization has a ______ score.

high Power Distance index

With regard to resistance to change, observations indicate that those innovations most readily accepted are those that:

hold the greatest interest within the society and those that are least disruptive

According to Edward Hall's comments on culture, which of the following could hurt companies and careers in foreign markets?

ignorance of cultural differences in the foreign market

The strategy of _______ deliberately sets out to change those aspects of the culture offering resistance to predetermined marketing goals.

planned change

The American Customer Satisfaction Index (ACSI) focuses on:

results, that is, quality as perceived by product and service users.

Family, religion, schools, the media, government, and corporations are all examples of a:

social institution

Mike grew up learning a great deal about his culture from his school, the church, the mass media, and his family. this kind of learning of culture is called:

socialization

New cola alternatives (Mecca Cola, Muslim Up. Arab Cola, and ColaTurka) sprang up after the military conflicts in the middle East in 2003. This is an example that shows how:

specific events in history can influence consumer behavior

Russia and Eastern European countries fit in which of the following stages of Rostow's five-stage model of economic growth?

take off

In the case of cellular phones, the physical product is practically given away to gain the phone services contract. This could be because:

the revenues from associated services exceed the revenues from the cellular phones.

Which of the following countries is NOT officially on the metric system?

the united states

Which of the following was the greatest hindrance to the development of software innovations appropriate for world markets in Japan?

The complex Japanese language.

Which of the following is NOT a feature of firms at the internationalization stage of regular foreign marketing?

The primary focus of operations and production is to service foreign market needs

Which of the following is possibly the best indicator of a country's ability to use technology to leap several stages of economic development in a very short time?

The quality of the educational system

Which of the following is the first stage of Rostow's five-stage model of economic development?

The traditional society

All of the following events and trends are among the four major trends described in the chapter as having a major impact or effect on the global business EXCEPT:

The trend toward decreasing OPEC profits as oil reserves decline in the 21st century.

Of all the events and trends affecting global business today, four stand out as the most dynamic. Which of the following would be one of those events?

The trend toward the acceptance of the free market system among developing countries.

Abolition of apartheid in South Africa is an example of a positive uncontrollable element in an international marketing scenario.

True

Consumer perceptions of a quality product often have more to do with market-perceived quality than performance quality.

True

Domestic foreign policy is an example of an international uncontrollable element affecting a firm's international marketing success.

True

In a broad sense, uncontrollable elements of the foreign business environment constitute the culture.

True

International marketing is the performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit.

True

John refuses to buy Japanese products because he sees this as a way of selling out to a nation known for its aggressive behavior. John is using a self-regerence criterion to make his decision.

True

The controllable elements can be altered in the long run and, usually, in the short run to adjust to changing market conditions, consumer tastes, or corporate objectives.

True

Privatization of industries released immediate capital to invest in strategic areas.

True Privatization released immediate capital to invest in strategic areas and gave relief from a continuing drain on future national resources. Often when industries are privatized, the new investors modernize, thus creating new economic growth.

When marketers first introduced the personal digital assistant (PDA) to the American consumer, they performed the role of being _______ because the cultural impact of the product became widespread.

agents of change

The Uncertainty Avoidance index measures the tolerance of uncertainty and ______ among members of a society.

ambiguity

Blogs, virtual worlds, and video sharing are examples of media commonly known as _____. A. global media B. local media C. social media D. Texas Visual Imaging E. widespread media

C. social media

Which of these levels of economic integration has no restrictions on internal trade and free flow of capital among member nations and lacks only political unity to become a political union? A. Common market B. Free trade area C. Regional cooperation group D. Customs union E. Preferential trade agreement

A. Common market A common market is a unified economy and lacks only political unity to become a political union.

When the Soviet Union dissolved, the _____ emerged that had 12 members that agreed to a loose economic and political alliance with open borders but no central government. A. European Trade Pact B. Commonwealth of Independent States C. Eurasian Alliance D. Russian Confederation E. Post-Soviet Bloc

B. Commonwealth of Independent States

Which of the following factors affects the choice of distribution channels? A. Distance from manufacturer B. Language spoken in the target market C. Available distribution intermediaries D. Consumer literacy levels E. Country's per capita income

C. Available distribution intermediaries

The first Soviet republics to declare independence from the Soviet Union were the _____. A. Russian SFSR B. Ukrainian SSR C. Baltic states D. Falkland Islands E. Papal states

C. Baltic states

Which of the following is the weakest of political unions that is mostly based on economic history and a sense of tradition? A. A conglomerate B. A community C. A commonwealth D. A proprietary colony E. A trade association

C. A commonwealth

ECOWAS, SADC, and EAC are active regional cooperative groups in _____. A. North America B. Australia C. Africa D. Europe E. Asia

C. Africa

Which of the following is true of international currencies? A. Exchange rate volatility index can be used to accurately predict the value of any currency. B. The value of all currencies is set by the World Trade Organization. C. All major currencies are floating freely relative to one another. D. All currencies are fully backed by gold reserves. E. The World Bank mandates a fixed exchange rate regime.

C. All major currencies are floating freely relative to one another. Now that all major currencies are floating freely relative to one another, no one is quite sure of the future value of any currency.

_____ are levied as a percentage of the value of the goods imported. A. Specific duties B. Protective duties C. Prohibitive duties D. Ad valorem duties E. Compound duties

D. Ad valorem duties

The most profound change in the orientation of a company toward markets and associated planning activities happens at the "regular foreign marketing" stage of the international marketing involvement.

False

Feng shui is a Chinese ______, considered to be the process that links humans and the universe to ch'i, the energy that sustains life and flows through out bodies and surroundings, in and around our homes and workplaces.

belief

Which of the following technological innovations has had a great impact on the gender-based determining of responsibilities and roles?

birth control pills

Cultures which are low in Uncertainty Avoidance index:

take a more empirical approach to understanding and knowledge.

Which of the following terms pertains to societies in which people from birth onward are integrated into strong, cohesive groups?

collectivism

Modern medicine has thrived in the United States together with the use of herbal remedies from South America. This is an example of:

cultural borrowing

The perception of quality:

depends solely on the customer.

The industrialized economies in the ________ stage of Rostow's five-stage model of economic development focus more on low-cost manufacturing of a variety of consumer and some industrial goods. They buy from all categories of industrial products and services.

drive to maturity

Which of the following stages of Rostow's five-stage model of economic growth do industrialized economies such as Korea and the Czech Republic fit into?

drive to maturity

In various cultures of the world, acceptance for hybrid grains was obtained through unplanned change.

false

In the context cultural values, the ______ index refers to the preference for behavior that promotes one's self-interest

individualism/collectivism

Country X is most likely to be in the age of mass consumption according to Rostow's five-stage model of economic development if:

it is primarily a service economy

Based on the individualism/Collectivism Index, in which of the following cultures will the "virtual social" activity of online chatting be most acceptable?

one in which individualism reigns supreme

In most cultures, the first social institution infants are exposed to outside the home takes the form of a:

religious institution

Restrictions on cross-border data flows are potentially the most damaging to industries that:

rely on information transfers across countries.

Which of the following is an unfavorable outcome of the usage of birth control pills?

schools are forced to address issues like abstinence and condom distribution

The negotiators from the Shanghai area are famous for their:

shrewdness.

The U.S. Congress and businesses have been resisting conversion to the metric system because they fear:

that it will be too costly to implement.

For most consumer services firms, the mode of entry into a foreign market is licensing, franchising, strategic alliances, or direct. This is usually done because:

the creation and consumption of services cannot be separated.

Which of the following is the most important factor in determining what kind and how much of an innovation will be accepted by a culture?

the degree of interest in the particular subject

Industrial markets differ from consumer markets in that:

the demand for industrial goods is more volatile than the demand for consumer goods.

Many suppliers are adopting ISO 9000 standards because:

their buyers require them to be ISO 9000 registered.

Industrial goods are most likely to be standardized if:

their uses are the same across markets.

The Westernized diet has caused many Japanese to become overweight. This is an example of ______ change.

unplanned

Which of the following has proved to be an important way to break the trade barrier imposed by the Japanese distribution system? A. Direct sales through catalogs B. Large wholesale stores C. Street corner kiosks D. Internet shopping E. Television advertising

A. Direct sales through catalogs Direct sales through catalogs have proved to be a successful way to enter foreign markets. In Japan, it has been an important way to break the trade barrier imposed by the Japanese distribution system.

Cremics, a multinational drug manufacturing company, used a saffron trident in a promotional campaign for one of its drugs in India. The saffron trident, a religious symbol in India, was meant to indicate the three levels of efficacy of the drug but mistakenly conveyed a religious message to Indians. This miscommunication indicates a problem associated with which of the following steps of an international communications process? A. Encoding B. Noise cancellation C. Media channel selection D. Message transmission E. Information source selection

A. Encoding

Which of these aspects of international marketing are analyzed in Phase 1 of the international planning process? A. Home-country constraints B. Budgets C. Situation analysis D. Promotions E. Product adaptations

A. Home-country constraints Company character, home-country constraints, and host-country constraints are analyzed in the first phase of the international planning process

Which of the following organizations seem better equipped for internationalization?

A firm that has a production capacity that is much greater than home market demand

What has been the impact on American culture, of women joining the workforce in growing numbers for the past thirty years?

A reduction in the influence of family in the American culture.

GreatW, a wine company, had to market its products with a different name in a foreign market as it was mandatory to translate the name into the local language. Which of the following factors has most likely influenced the compulsory change of GreatW's product name in the foreign market in this scenario? A. Legal requirement B. Climatic requirement C. Technological requirement D. Monetary requirement E. Economic requirement

A. Legal requirement The mandatory laws of the foreign market led GreatW to change its name there. Legal, economic, political, technological, and climatic requirements of the local marketplace often dictate product adaptation. Laws that vary among countries usually set specific package sizes and safety and quality standards.

Which of the following forms of business relationships lets a company grant patent rights, trademark rights, and the rights to use technological processes to another company in a foreign country? A. Licensing B. Exporting arrangements C. Joint ventures D. Consortia E. Strategic alliances

A. Licensing Patent rights, trademark rights, and the rights to use technological processes are granted in foreign licensing.

Which of the following characterizes the business philosophy of the Japanese distribution channels? A. Loyalty B. Direct sales C. Fast delivery D. Variety E. Price competition

A. Loyalty Coupled with the close economic ties and dependency created by trade customs and the long structure of Japanese distribution channels is a relationship-oriented business philosophy that emphasizes loyalty, harmony, and friendship. The value system supports long-term dealer-supplier relationships that are difficult to change as long as each party perceives economic advantage.

Identify the substage in the evolution of the marketing process when the only marketing functions performed are demand creation and physical distribution. A. Mass production B. Global distribution C. Self-sufficient D. Surplus commodity product E. Small scale

A. Mass production According to the evolution of the marketing process, when the only marketing functions performed are demand creation and physical distribution, the marketing process is in a substage known as mass production. Refer to Exhibit 9.4-Evolution of the Marketing Process

_____ take title to manufacturers' goods and assume the trading risks. A. Merchant middlemen B. Brokers C. Buying offices D. Export agent E. Agent middlemen

A. Merchant middlemen Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen. Merchant middlemen provide a variety of import and export wholesaling functions involved in purchasing for their own account and selling in other countries.

Which of the following is the basic requisite for the development of a supranational market arrangement? A. Political amenability among countries B. Business strategy sharing C. Adoption of common cultural prejudices D. Protection of the market by exercising boycotts E. Regulation of demand by increasing tariffs

A. Political amenability among countries Political amenability among countries is another basic requisite for the development of a supranational market arrangement.

Every type of economic union shares the development and enlargement of market opportunities as a basic orientation. Which of the following best describes the primary way market opportunities are enlarged by economic unions? A. Preferential tariff treatment for participating members B. Use of embargos to eliminate rival competition C. Formulation of cartels D. Seeking economic dominance through boycotts of rivals E. Movement toward a common language as a means to overcoming economic hurdles

A. Preferential tariff treatment for participating members

Which of the following provisions established the parameters of the creation of a common currency for the European Union? A. The Economic and Monetary Union provision of the Maastricht Treaty B. The Single Currency provision of the Treaty of Rome C. The Enhanced Cooperation provision of the Treaty of Utrecht D. The Economic Union provision of the Treaty of Vienna E. The Free Trade provision of the Anglo-Irish Treaty

A. The Economic and Monetary Union provision of the Maastricht Treaty

Which of the following European Union institutions originally had only a consultative role but can now amend and adopt Union legislation? A. The European Parliament B. The Council of Ministers C. The Court of Justice D. The European Commission E. The European Central Bank

A. The European Parliament

Which of the following is an example of the primary function of a product? A. The ability of a camera to take a picture B. The design and form factor of a phone C. The color of a laptop D. The prestige associated with driving a car E. The shape of speakers

A. The ability of a camera to take a picture A market offering really is a bundle of satisfactions the buyer receives. This package of satisfactions, or utilities, includes the primary function of the product or service, along with many other benefits imputed by the values and customs of the culture.

Which of the following is most likely to be true of a company that views prices as an active instrument of accomplishing marketing objectives? A. The company sets prices to achieve specific objectives. B. The company follows market prices to achieve specific objectives. C. The company exports only excess inventory. D. The company views its export sales as an insignificant source of revenue. E. The company places a low priority on foreign business.

A. The company sets prices to achieve specific objectives.

Which of the following is true of advertising agencies for international advertising? A. The cross-cultural communication between a foreign client and a local agency can be problematic. B. A multinational agency always has the best feel for a market. C. Only a multinational agency can provide the best cultural interpretation in a situation in which local modification is required. D. Only a local domestic agency can provide a company with a high level of sophistication. E. Agency commission patterns are consistent throughout the world.

A. The cross-cultural communication between a foreign client and a local agency can be problematic.

_____ refers to a partnership of two or more participating companies that have joined forces to create a separate legal entity to facilitate doing business in a country where none of the participants are currently active. A. A consortium B. A franchise pact C. A license arrangement D. Indirect exporting E. Direct foreign investment

A. A consortium (1) They typically involve a large number of participants and (2) they frequently operate in a country or market in which none of the participants are currently active.

MedUmbrella Inc. provides a broad and diverse range of services for the healthcare industry. It also manufactures a wide variety of hospital equipment. It wants to experience rapid growth and intends to have an organizational structure to better face global competition. Which of the following organizational structures will suit MedUmbrella best? A. A global product division structure B. A geographical division structure C. A matrix structure D. A pyramid structure E. A hierarchical structure

A. A global product division structure Companies that adopt the global product division structure are generally experiencing rapid growth and have broad, diverse product lines.

According to Dutch management professor Geert Hofstede, culture is referred to as the:

"software of the mind"

The true consumer market in China is probably limited to no more than _____ percent of those who live in the more affluent cities.

25

Which is the comprehensive free trade agreement among Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States that includes a wide array of tariff reductions aimed at increasing trade and employment? A. DR-CAFTA B. NAFTA C. CFTA D. SAARC E. Mercosur

A. DR-CAFTA

Which of the following will aid a manager in understanding some Latin Americans' reluctance toward foreign investment of Chinese reluctance to open completely to outsiders?

A historical perspective

__________ is the conscious effort on the part of the international marketer to anticipate the influences of both the foreign and domestic uncontrollable factors on a marketing mix and then adjust the marketing mix to minimize the effects.

Adaptation

Which of the following is an example of comparative advertising? A. An ad using a scantily clad model to promote a soft drink B. An ad showing a celebrity smoking his preferred brand of cigarettes C. An ad showing a dog choosing one brand of dog food over another D. An ad showing the superiority of synthetic materials used in its products as compared to cotton E. An ad using shocking or taboo material to promote a product

C. An ad showing a dog choosing one brand of dog food over another

Which of the following countries was involved in the formation of the free trade group Mercosur? A. Australia B. China C. Argentina D. Russia E. Thailand

C. Argentina Mercosur is the free trade group formed by Argentina, Brazil, Paraguay, and Uruguay.

The success of the Caribbean Free Trade Association led to the creation of the _____. A. Central American Integration System B. Community of Latin American and Caribbean States C. Caribbean Community and Common Market D. Union of South American Nations E. United Nations Economic Commission for Latin America and the Caribbean

C. Caribbean Community and Common Market The success of the Caribbean Free Trade Association led to the creation of the Caribbean Community and Common Market.

What is the most profound change for firms at the global marketing stage of internationalization?

Companies treat the world, along with home market, as one market.

Which of the following is NOT TRUE of the impact of globalization on domestic markets?

Companies with only domestic markets have found it relatively easy to sustain their customary rates of growth.

Which of the following is considered to be an important competitive marketing tool in Europe?

ISO 9000 certification

What is the tenet that China follows to ensure that Hong Kong's exuberant capitalism is retained despite the communist leanings of mainland China?

One country, two systems

Which of the following is true of firms at the internationalization stage of international marketing?

Planning generally entails production of goods outside the home market.

Considering the model of the international marketing task displayed in the text, which of the following reasons demonstrates the most important difference between the international marketer's task and that of the domestic marketer?

The international marketer must deal with at least two levels of uncontrollable uncertainty instead of one.

Which of the following is true of Stage 1 of Rostow's five-stage model of economic development?

The most important industrial demand relates to natural resources extraction.

Which of the following is true or the first two stages of international marketing involvement-no direct foreign marketing and infrequent foreign marketing?

They are more reactive in nature