Marketing Ch.15 Practice Questions

A firm that makes processed foods and beverages has seven major product lines and sells in 37 countries. All sales of bottled iced teas, for example, report to one manager worldwide. What form of organization of international operations does the firm employ?

World product groups

As companies increasingly enter the global marketplace, they need to address several basic questions. Which of the following is automatically answered when a firm goes global?

When should we convert to a foreign currency

Since 1959, one of the most influential international trade forces has been ________, which has over 155 members, imposes international trade sanctions, and mediates global trade disputes.

World Trade Organization (WTO)

________ involves less investment because the firm does not require an overseas marketing organization or network. It also involves less risk. A) Indirect exporting B) Direct exporting C) Joint Venturing D) Licensing E) Contract manufacturing

A) Indirect exporting

Sellers may eventually move into ________, whereby they handle their own exports. The investment and risk are somewhat greater in this strategy. A) direct exporting B) embargo C) product adaptation D) indirect exporting E) licensing

A) direct exporting

A ________ is one that, by operating in more than one country, contains marketing, production, research and development, and financial advantages that are not available to purely domestic competitors. A) global firm B) global industry C) whole-channel view D) direct investment E) free trade zone

A) global firm

World trade volume of products and services last year was valued at more than $18.8 trillion. How much of the flow of goods and services are derived from global trade, not domestic trade?

About one third

________ occurs when a company either charges less than its costs or less than it charges in its home market. A) Price escalation B) Dumping C) Licensing D) Straight product extension E) Countertrade

B) Dumping

The ________ is a 60-year-old treaty designed to promote world trade by reducing tariffs and other international trade barriers. A) WTO B) GATT C) EU D) CAN E) NAFTA

B) GATT

In India, where cows are considered sacred, McDonald's serves McChicken, Filet-O-fish, McVeggie, and Pizza McPuffs. This is an example of ________. A) standard global marketing B) adapted global marketing C) straight product extension D) product invention E) communication adaptation

B) adapted global marketing

All of the following are modes of entry that companies can use when they have decided to sell in a foreign country EXCEPT ________. A) exporting B) embargo C) joint venturing D) direct investment E) licensing

B) embargo

Economic communities are also known as ________. A) global firms B) free trade zones C) management communities D) production communities E) open channels

B) free trade zones

A ________ gives the seller more presence and program control in the foreign market and often serves as a display center and customer service center. A) straight product extension B) sales branch C) market-centered company D) market niche E) foreign licensing agreement

B) sales branch

Kellogg cereals, Gillette razors, Heineken beer, and Black & Decker tools are all sold successfully in about the same form around the world. This is an example of which product strategy? A) product adaptation B) straight product extension C) product invention D) dual adaptation E) communication adaptation

B) straight product extension

In a(n) ________, the vast majority of people engage in simple agriculture and consume most of their output. A) raw material economy B) subsistence economy C) industrializing economy D) emerging economy E) industrial economy

B) subsistence economy

________ is a group of nations organized to work toward common goals in the regulation of international trade. A) A joint venture B) A standardized marketing mix C) An economic community D) A global firm E) A multinational enterprise

C) An economic community

All of the following are major decisions a company faces in international marketing EXCEPT? A) deciding which markets to enter B) deciding how to enter the market C) deciding how to set standardized prices D) deciding on the global marketing program E) looking at the global marketing environment

C) deciding how to set standardized prices

All of the following are types of industrial structures EXCEPT? A) subsistence economies B) raw material exporting economies C) developing economies D) industrializing economies E) industrial economies

C) developing economies

The simplest way to enter a foreign market is through ________. A) joint venturing B) direct investment C) exporting D) joint ownership E) contract manufacturing

C) exporting

In which of the following situations is the firm "niching" globally?

Carl's Jr. is a small to medium-size fast-food chain in the southwestern part of the United States that has not entered any part of the Asian or European market except Vietnam. The Happy Star (Carl's JR.) logo is a solid red background with a large single yellow star and is almost identical to the Vietnamese flag.

McDonald's markets its restaurants in the United States and Europe as an affordable, convenient place to get fast food often through a drive-thru. In China, the marketing is geared to families as a place for dine-in eating and spending time with several generations. What type of global marketing strategy does McDonald's use in China?

Communication adaptation

Firms that play it safe and do not enter the global market are likely to lose their chances to enter other markets ________. A) but achieve more stability at home B) but gain a competitive edge in their home markets C) but successfully shield themselves from foreign competition D) and risk losing their home markets E) A and B

D) and risk losing their home markets

The two key economic factors reflecting a country's attractiveness as a market are its industrial structure and its ________. A) communication adaptation B) nontariff trade barriers C) exchange controls D) income distribution E) transportation systems

D) income distribution

World product groups, geographical organizations, and international subsidiaries are all options for organizing a(n)________. A) export department B) indirect exporting venture C) joint ownership D) international division E) standardized global marketing strategy

D) international division

Under which foreign market entry strategy is there both the greatest risk and the greatest potential for profitability for the foreign firm?

Direct investment

In a(n) ________, executives are trained in worldwide operations, not just domestic or international. A) direct exporting company B) joint venture C) international division D) international subsidiary E) global organization

E) global organization

Nokia created dustproof keypads, crucial in dry, hot countries with many unpaved roads, such as India. This is an example of ________. A) product invention B) straight product extension C) standard global marketing D) communication adaptation E) product adaptation

E) product adaptation

The BRIC countries, Brazil, Russia, India, and China, are classified as what type of economy illustrating which type of industrial structure?

Emerging Economy

What international trade organization was created in 1957 by six countries and now numbers 28 members? It is one of the most advanced regional trade organization and accounts for over 20 percent of the Gross World Product (GWP).

European Union (EU)

Often a firm evolves from a simpler to a more complex organization in the way it deals with the foreign market. What is the logical evolution process?

Export department, international division, and global organization

There are three main categories of entry into the foreign market. What are they?

Exporting, joint venturing, and direct investment

The type of industrial structure is shaped by a country's product and service needs, income levels, and employment levels. Which form is unclassified as a type of industrial structure?

Finished Goods Importing Economy

Although the need for companies to go abroad is greater today than in the past, so are the risks. Which of the following is a serious risk the global marketer faces?

High corruption indices in many foreign nations

A small manufacturer of a gadget a golfer attaches to his belt to hold his golf gloves and extra tees is based in Omaha, Nebraska, and distributes the product to pro shops across the United States. The firm is now entering the Japanese golf market, packages the item with Japanese labels, sells the items to several Japanese golf agents who take ownership in Nebraska, and then distributes the item across Japan. What market entry method does the firm follow?

Indirect exporting

Of the following entry modes a foreign firm can adopt, which one is not a joint venture?

Indirect exporting

What are the two economic factors firms use to analyze the country's attractiveness as a market?

Industrial Structure and Income Distribution

Many countries do not make it particularly easy for a foreign firm to do business in the host country. Which of the following issues makes it easier to enter a foreign country than doing business in some other foreign markets?

Offering Incentives

Pricing products in foreign markets is not a simple task. Four of the following are issues repeatedly encountered in setting prices globally. Which one is rarely encountered by global marketers?

Price will usually be higher in the home market rather than the foreign market.

In the 1950s, Sony made the first transistor radio intending to primarily target the American and then European market long before it was to be introduced to the Japanese market. What approach to global marketing was Sony using at that point?

Product invention

Whereas consumer brands sold in stores in Western markets rely largely on self-service, brands in China hire armies of uniformed in-store sales persons to dispense samples and pitch their products person to person. What are these employees called?

Push Girls

In the process of entry to the foreign market, not all companies follow the same mode nor do they employ the same mode of entry in all countries. At one end of the spectrum, the firm might be using an adapted global marketing strategy and what is the anchor at the other end of the continuum?

Standardized Global Marketing

Name and define the four types of country industrial structures.

Subsistence economies, Raw material exporting economies, Industrializing economies, Industrial economies

Until 2006, the United States imposed a $2 charge on every garment imported to the country from China regardless of the cost of the garment—it could be a t-shirt or an expensive suit, for example. What type of trade restriction is this?

Tariffs or Duties

There are many advantages for a firm to make a direct investment in a foreign market. Which of the following is not an accurate description of an issue the firm confronts in foreign direct investment?

The firm loses some control over its investment

For the firm contemplating entering a foreign market, which of the following issues can be ignored?

The home culture and whether it's compatible with the host culture

Although anti-globalists attack American marketing's expansion into too many foreign markets, concern that Americanization and the potential damage to American brands is overblown. What portion of the top 25 global brands are, in fact, American brands?

The vast Majority

Discuss the three ways to enter foreign markets. Which is the best?

exporting, joint venturing, direct investment