International Marketing chapter 12

Investing in a foreign company is a means of foreign market development and entry known as

Direct foreign investment

True or false: Strategic planning takes place only at the lowest level of management.

False

Planning aids international marketers by

allowing them to create guidelines for dealing with both positive and negative business circumstances that may occur

Direct exporting involves selling products to foreign customers, while indirect exporting involves selling products to

another company in the home country that then exports the products

A strategic international alliance (SIA) is a(n)

business relationship between two or more companies.

In the first phase of planning for international marketing, companies

collect information to evaluate the potential of a country market

General planning for a company over a long period of time is called

corporate planning

In the process of franchising, franchisers

offer management assistance to franchisees

In global marketing, the major objective of the fourth phase of the planning process is to

organize and direct implementation

Joint ventures are

partnerships between legally incorporated entities and not between individuals.

In global marketing, the results of the first phase of planning help marketers

recognize potential issues in a new country market

In a matrix structure, the management

solves problems that happen in any region

A business relationship in which two or more companies share risks in achieving common objectives and cooperate out of mutual need is known as a

strategic international alliance

Consortia reduce hazards associated with big investments because

they generally involve a greater amount of participants

The marketing plan begins with a situation analysis and culminates in the selection of an entry mode

third

What is an advantage of franchising?

It allows the parent company to grow quickly.

Identify an accurate statement about a joint venture.

It helps an outsider firm comprehend cultural differences and niceties.

Identify an accurate statement about direct foreign investment.

Local firms are able to acquire new technology from foreign investors.

planning relates to the allocation of resources used to implement strategic planning goals in particular markets.

Tactical planning

Product choices tend to _____ when products are culturally delicate or complex.

be decentralized

P&L, a French luxury goods company, launched a new line of leather accessories in four countries. The company devised an aggressive marketing strategy to promote this line of products. After 6 months, the CEO of P&L calls a meeting to evaluate the success of the marketing campaigns in each country. In the context of global marketing, this meeting would fall under the _____ of the planning process.

fourth phase

Two companies decide to pool their resources and create a company to exploit opportunities in a developing market. Their agreement is a good example of a

joint venture

One advantage of clustering operations in specific regions is that clustering

minimizes problems caused by varying time zones

The major objective of the second phase of planning for international marketing is to

modify a marketing mix to the cultural realities of the target country

Direct foreign investment will flourish with

more free trade region

Planning for global markets involves

preparing for unknown and uncontrollable circumstances that may affect the company

A drawback of licensing is that licensees

require supervision.

Rachel owns a small business that deals in custom wear and accessories. She wants to expand her business worldwide and is launching an online portal under her label. To open an effective online business, she will have to ensure that

she has easy access to delivery services that operate internationally

What must global businesses understand about doing business in emerging markets?

Consumers in emerging countries have a variety of yearly incomes.

Identify a measure that companies take when corporate objectives do not match foreign market opportunities

Developing a new company objective to match the opportunity

Match the partners in the franchising process (in the left column) with their description

Franchiser: Offers homogenized company products Franchisee: Offers information about host country mark

Identify an accurate statement about strategic international alliances (SIAs).

SIAs decrease marketing expenses.

Identify a measure that companies take when corporate objectives do not match foreign market opportunities.

Developing a new company objective to match the opportunity

Identify the statement that relates to the "timing" factor of direct foreign investments.

Early foreign investment in a market has benefits, but it is more uncertain.

Identify the scenario that describes a consortium.

Five technology corporations and ten consulting corporations come together to form a telecommunications company in Africa for the first time.

Identify the three typical company structures.

Geographical divisions Matrix organizations Global product divisions

Deal City, an online shopping portal based in China, supplies cost-effective household products to customers in North America. Identify the type of alternate market-entry strategy that best describes this scenario.

International Internet marketing

Identify a market-entry strategy that will help a multinational company gain entry into a country market that is not receptive to companies with foreign owners.

Licensing

Rank the four phases of planning for global marketing, starting from the first phase and ending with the last phase.

Preliminary analysis and screening Defining market segments and adapting the market mix accordingly Developing the marketing plan Implementation and control

planning deals with capital, products, research, and the short-term and long-term goals of the company. The highest levels of management are involved with this type of planning.

Strategic

True or false: A matrix structure encourages transfer of a variety of knowledge throughout the firm.

True

The third phase of planning for global marketing involves

choosing a mode of entry into the target country

Identify the factors that influence the performance and structure of direct investment.

complicated contracts knowledge of local firms investment timing

Unlike a joint venture, a consortium

consists of a greater number of companies

Unlike decentralized organizations, centralized organizations

direct planning

A major element that influence the success of a franchise is

past international experience of the franchiser.

The primary medium of organizational learning is the _____ process.

planning

Wavetel, a hardware company based in Europe, acquires Telior, its competitor in a neighboring country. Identify the market-entry strategy that best describes Wavetel's move.

Direct foreign investment

True or false: Tactical planning is done at the national level and deals with products, research, and long-term goals of the company.

False

Identify an accurate statement about franchising.

Franchisers have some direction over the activities of the franchisees.

Which statement is true of planning for global markets?

It is a structured way of thinking about anticipated and unanticipated events.

Licensing is an appropriate choice when

a company wants to enter a country that places strict limits on imports

The ______ phase of planning for global markets begins with a situation analysis and ends with the selection of specific action plans for a new country market.

third

In the process of franchising, the franchiser

utilizes the franchisee's awareness of the local market

In which decade was the market segmentation argument framed as "global integration versus local responsiveness"?

1990s

Match the phase of planning for global marketing (in the left column) with its description (in the right column).

1: Exploratory assessment of potential country markets Exploratory assessment of potential country markets 2: Branding products keeping cultural specificities in mind Branding products keeping cultural specificities in mind 3: Choosing an approach into a country market 4: Evaluating a firm's operation in a country market

Identify the market segmentation dispute in the 1970s.

Adaptation versus standardization

As a result of direct foreign investment, local companies that are acquired by large multinationals

As a result of direct foreign investment, local companies that are acquired by large multinationals

True or false: Corporate planning plans for the immediate future.

False

True or false: Research demonstrates that when choices are centralized, subsidiaries have no impact on business choices.

False

Which statement is true about establishing global operations?

It leads to the creation of innovative methods to attract customers.

Identify benefits of global marketing.

Reducing the cost of producing a product Sharing experience across markets Sharing knowledge across markets

True or false: The problem of locating and overseeing licensees can contribute to the failure of licensing agreements.

True

Research suggests that multinational firms like to focus on specific regions because

a regional focus minimizes problems caused by cultural distance

A joint venture between two multinational corporations helps an international marketer

access a partner's local supply and delivery methods

When making decisions for international marketing, managers should

ensure that policies define the decisions to be made at each managerial level.

Solinol Inc. is one of the largest oil refineries in Europe. Three years ago, it entered the Central African Republic and started production on several oil fields. The access to these oil fields made Solinol one of the largest oil companies in the world. Soon after that, the political situation in the Central African Republic deteriorated. Many of its assets are now under siege by rebel groups. The result has been losses of over $5 billion to Solinoil. In this scenario, the market opportunities for Solinol in the Central African Republic clashed with the

firm's business objectives

The trend of establishing manufacturing operations around the world will increase when

free trade is allowed

Emerging markets may

have rudimentary frameworks for doing business

One advantage of a matrix structure is that it

involves transfer of knowledge and skills

A partnership between legally incorporated entities that join forces to create a separate, legal entity, where each partner holds an equity position, is known as a(n)

joint venture

A partnership of two or more companies with the goal of creating a separate legal entity is known as a

joint venture

Market entry through direct foreign investment helps multinational corporations in

lowering the costs of shipping

Tactical choices for international marketing should be made at the ______ of an organization.

lowest level

A strategic international alliance aids international marketing by

making a company more profitable

Once target markets are chosen, the ______ must be assessed with regard to the information yielded in the first phase of the planning process.

marketing mix