MARK Chapter 19

Countries with ________ economies consist mostly of households with very low family incomes. A) industrial B) industrializing C) raw material exporting D) emerging E) subsistence

subsistence

Which of the following industrial structures presents the fewest market opportunities? A) subsistence economies B) raw material exporting economies C) industrializing economies D) emerging economies E) industrial economies

subsistence economies

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

subsistence economy

Which question should most likely be answered by all companies due to the rapid move toward globalization? A) How should we eliminate domestic competition? B) Should we diversify in a new business area in the home country? C) Where should we produce or source our products? D) How should we fulfill our environmental obligations? E) Which medium of advertising should we use in our home country?

Where should we produce or source our products?

Which of the following is a type of joint venturing? A) trade embargo B) licensing C) direct investment D) direct exporting E) indirect exporting

licensing

________ means adjusting the marketing strategy and mix elements to each international target market. A) Standardized global marketing B) Ambush marketing C) Adapted global marketing D) Mass marketing E) Whole channel viewing

Adapted global marketing

According to the text, what location does Coca-Cola consider a "promising long-term growth opportunity"? A) Russia B) Brazil C) China D) Africa E) India

Africa

The BRIC countries are ________. A) Bolivia, the Republic of Haiti, Israel, and Chile B) Britain, the Republic of the Marshall Islands, Ireland, and the Commonwealth of Australia C) Brazil, Russia, India, and China D) Burundi, Rwanda, Ivory Coast, and Congo E) Belarus, Romania, Iceland, and Czech Republic

Brazil, Russia, India, and China

In 2005, the ________ established a free trade zone between the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. A) CAFTA-DR B) FTAA C) CAN D) NAFTA E) EU

CAFTA-DR

Trusted Wholesalers is a company that currently purchases products made in Mexico and sells them to companies based in the United States and Canada. Trusted Wholesalers is considering whether to also purchase products produced in Costa Rica and the Dominican Republic. To make their decision, members of management at Trusted Wholesalers will most likely evaluate the agreements made by ________. A) the EU B) NAFTA C) CAFTA-DR D) MCAN E) UNASUR

CAFTA-DR

________ are the first link between the seller and the final buyer and they move company products from points of production to the borders of countries within which they are sold. A) Channels between nations B) Channels within nations C) Retail channels D) Large-scale channels E) Value chain channels

Channels between nations

Which of the following is an example of a raw material exporting economy? A) Sweden B) Russia C) the United Kingdom D) Chile E) Brazil

Chile

________ ventures consist of one company joining forces with foreign investors to create a local business in which they share ownership and control. A) Joint ownership B) Licensing C) Contract manufacturing D) Management contracting E) Indirect exporting

Joint ownership

Which of the following is a threat posed by the EU? A) Europe could heap favors on firms from EU countries but hinder outsiders by imposing obstacles. B) European companies have become less competitive. C) European companies have begun to monopolize international markets. D) The EU has toughened the international protection of copyrights, patents, and trademarks. E) The EU has reduced Europe's remaining merchandise tariffs by 30 percent.

Europe could heap favors on firms from EU countries but hinder outsiders by imposing obstacles.

Formed in 1957, the ________ set out to create a single European market by reducing barriers to the free flow of products, services, finances, and labor among member countries and developing policies on trade with nonmember nations. A) Uruguay Round B) European Union C) European Organization D) European Central Bank E) CAFTA

European Union

Which of the following is most likely to be the consequence of increase in growth of global trade? A) Home markets become richer in opportunities. B) Foreign firms expand aggressively into new international markets. C) Global competition is curbed. D) Industries become safe from foreign competition. E) Domestic companies increase their chances to dominate their home markets

Foreign firms expand aggressively into new international markets.

The ________, established in 1947 and modified in 1994, was designed to promote world trade by reducing tariffs and other international trade barriers. A) OPEC B) GATT C) EU D) ASEAN E) NAFTA

GATT

Which of the following was designed to help foster trade between nations? A) tariffs B) GATT C) exchange controls D) quotas E) nontariff trade barriers

GATT

Which of the following is the LEAST critical decision a company should make before going abroad? A) Can the company learn to understand buyer behavior of consumers in other countries? B) Can the company offer competitively attractive products? C) Can the company adapt to other countries' business cultures? D) How many foreign nationals should the company employ? E) Do the company's managers have the necessary international experience?

How many foreign nationals should the company employ?

________ are major exporters of manufactured goods, services, and investment funds. A) Raw material exporting economies B) Subsistent economies C) Industrializing economies D) Industrial economies E) Emerging economies

Industrial economies

Which of the following characterizes emerging economies? A) Industrialization typically creates a new rich class and a growing middle class, both demanding new types of imported goods. B) They trade goods among themselves and also export them to other types of economies for raw materials and semifinished goods. C) Most African countries fall into this category. D) They consume most of their output and barter the rest for simple goods and services. E) These countries are the best markets for large equipment, tools and supplies, and trucks.

Industrialization typically creates a new rich class and a growing middle class, both demanding new types of imported goods.

Which of the following was a result of the Uruguay Round of global WTO trade talks? A) It increased the world's remaining merchandise tariffs by 30 percent. B) It minimized the international protection of copyrights, patents, and trademarks. C) It extended the WTO to cover trade in agriculture and a wide range of services. D) It established the NATO for purposes of collective security. E) It established the EU to reduce trade barriers and increase cooperation among its members.

It extended the WTO to cover trade in agriculture and a wide range of services.

In 1994, ________ established a free trade zone among the United States, Canada, and Mexico. A) GATT B) WTO C) NAFTA D) EU E) CAFTA

NAFTA

Trusted Wholesalers is a company that purchases products produced in Mexico and sells them to companies based in the United States and Canada. Management at Trusted Wholesalers would most likely be interested in becoming experts in the policies developed by the ________. A) EU B) NAFTA C) CAFTA-DR D) APTA E) BRIC

NAFTA

Which of the following is an example of an economic community? A) NATO B) BRIC C) NAFTA D) GATT E) WTO

NAFTA

________ involves changing the product to meet local requirements, conditions, or wants. A) Product invention B) Straight product extension C) Standard global marketing D) Communication adaptation E) Product adaptation

Product adaptation

________ consists of creating something new to meet the needs of consumers in a given country. A) Communication adaptation B) Joint venturing C) Product invention D) Straight product extension E) Product adaptation

Product invention

________ involves essentially using the same marketing strategy approaches and marketing mix worldwide A) Adapted global marketing B) Ambush marketing C) Standardized global marketing D) Export marketing E) Niche marketing

Standardized global marketing

________ means marketing a product in a foreign market without making any changes to the product. A) Product adaptation B) Product invention C) Communication adaptation D) Straight product extension E) Product augmentation

Straight product extension

Which of the following characterizes U.S. companies in the past? A) They paid significant attention to international trade. B) Their biggest markets were in other countries. C) The home market was much safer than the foreign market. D) They disregarded political and legal risks overseas. E) They adapted products to foreign customer needs.

The home market was much safer than the foreign market.

Formed in 2004 and formalized in 2008, ________ makes up the largest trading block after NAFTA and the European Union. A) CAFTA-DR B) FTAA C) UNASUR D) MCAN E) GATT

UNASUR

The ________ was established to replace GATT in 1995 and now oversees the original GATT provisions. A) WTO B) EU C) NAFTA D) CAFTA E) NATO

WTO

If Azerbaijan imported wheat from Romania in exchange for crude oil, and Vietnam exchanged rice for Philippine fertilizer and coconuts then these scenarios would be examples of ________. A) cash transaction B) compensation C) buyback D) blocked currency E) barter

barter

Which of the following involves the direct exchange of goods and services? A) cash transaction B) compensation C) buyback D) blocked currency E) barter

barter

Which of the following major decisions should be taken by a company immediately after it decides to operate internationally? A) deciding which markets to enter B) deciding how to enter the market C) deciding on the global marketing organization D) deciding on the global marketing program E) deciding on the global communication program

deciding which markets to enter

A(n) ________ community is a group of nations organized to work toward common goals in the regulation of international trade. A) joint venture B) strategic marketing C) economic D) joint-stock E) multilateral

economic

Which of the following is a demographic factor that a company should consider before deciding to enter into a new country? A) transportation structure B) natural resources C) political stability D) languages E) education

education

Industrializing economies are also known as ________ economies. A) emerging B) raw material exporting C) totalitarian D) subsistence E) capitalist

emerging

The EU helped unify Europe by adopting the ________ as a common currency. A) Eurodollar B) euro C) franc D) Deutsche Mark E) peseta

euro

A(n) ________ serves to limit the amount of foreign exchange and the exchange rate against other currencies. A) exchange premium B) free trade zone C) quota D) exchange control E) tariff trade barrier

exchange control

A firm normally gets into international marketing by simply shipping out its goods. If its international sales expand, the company organizes a(n) ________. A) indirect exporting venture B) joint ownership C) export department D) international division E) standardized global marketing strategy

export department

Immediately after deciding which markets to enter, the company should determine ________. A) the most suitable global communication program B) how to price its products in different markets C) the global marketing organization D) the global marketing program E) how to enter the market

how to enter the market

The United States and Norway are examples of ________ economies. A) subsistence B) industrializing C) emerging D) industrial E) raw material exporting

industrial

Through ________, an organization in the foreign market buys the right to use a company's manufacturing process, trademark, patent, trade secret, or other item of value. A) indirect exporting B) licensing C) contract manufacturing D) management contracting E) joint ownership

licensing

A(n) ________ economy is rich in one or more natural resources but poor in other ways and much of its revenue comes from exporting its natural resources. A) industrial B) industrializing C) raw material exporting D) subsistence E) agrarian

raw material exporting

Coffee, tea, cotton, and tobacco are the main exports of Uganda. It is most likely that Uganda has a(n) ________ economy. A) subsistence B) marketing C) merchandise exporting D) raw material exporting E) industrializing

raw material exporting

Which of the following terms refers to a tax levied by a foreign government against certain imported products? A) embargo B) tariff C) excise D) exchange control E) quota

tariff

The two major links between the seller and the final buyer-channels between nations and channels within nations—make up a ________. A) whole-channel view B) direct-distribution channel C) large-scale channel D) transportation network E) retail channel

whole-channel view

Which of the following is a type of industrial structure? A) marketing economies B) subsistence economies C) laissez-faire economies D) capitalistic economies E) socialistic economies

subsistence economies

________ involves entering a foreign market by developing foreign-based assembly or manufacturing facilities. A) Indirect exporting B) Direct investment C) Joint venturing D) Contract manufacturing E) Direct exporting

Direct investment

Which of the following characterizes indirect exporting? A) It requires more investment than joint venturing. B) It requires an overseas marketing organization or network. C) It involves less risk and investment than other entry methods. D) The potential returns are greater than direct exporting. E) It involves joining with foreign companies to produce or market products or services.

It involves less risk and investment than other entry methods.

Which of the following is an example of an industrial economy? A) Japan B) China C) Vietnam D) India E) North Korea

Japan

Kellogg ads in the United States promote the taste and nutrition of Kellogg's cereals versus competitors' brands. In France, where consumers drink little milk and eat little for breakfast, Kellogg's ads must convince consumers that cereals are a tasty and healthful breakfast. Which marketing strategy is being followed by Kellogg? A) straight product extension B) product adaptation C) product invention D) communication adaptation E) straight communication extension

communication adaptation

Which of the following is a sociocultural factor that a company should consider before deciding to enter into a new country? A) political stability B) population density (urban vs. rural) C) education D) income distribution E) consumer lifestyles, beliefs, and values

consumer lifestyles, beliefs, and values

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

exporting

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

free trade zones

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

global

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

international division

Campbell Soup recently joined forces with Hong Kong-based Swire Pacific to form an entity called Campbell Swire—to better distribute the company's soups in China. This is an example of ________. A) licensing B) contract manufacturing C) management contracting D) joint ownership E) indirect exporting

joint ownership

In Japan, Budweiser beer flows from Kirin breweries, and Moringa Milk Company produces Sunkist fruit juice. These are examples of ________. A) contract manufacturing B) management contracting C) licensing D) joint venturing E) directly investment

licensing

Growing Green, a U.S. company that markets organic and environmentally friendly gardening and landscaping supplies and equipment, wants to expand the business internationally. Growing Green managers are currently examining the rules imposed by the WTO and the agreements made by NAFTA and the EU. In which stage of the international marketing process is Growing Green? A) deciding on the global pricing strategies B) deciding which markets to enter C) deciding how to enter the market D) deciding on the global marketing program E) looking at the global marketing environment

looking at the global marketing environment

Hilton helps others run their hotels by providing the management know-how. This type of joint venture is known as ________. A) contract manufacturing B) licensing C) management contracting D) joint ownership E) direct investment

management contracting

Which of the following is an economic factor that a company should consider before deciding to enter into a new country? A) population size and growth B) natural resources C) cultural and social norms D) political stability E) climate

natural resources

Assume that a Gucci handbag sells for $60 in Italy and $240 in the United States because Gucci must add the cost of transportation, tariffs, importer margin, wholesaler margin, and retailer margin to its factory price. This information indicates that Gucci faces a ________ problem. A) dumping B) tariff C) licensing D) product adaptation E) price escalation

price escalation

Kraft has adapted its popular Oreo cookie to the unique tastes of consumers all around the world, whether it's mango-and-orange flavored Oreos in the Asia Pacific region, green tea Oreos in China, a chocolate and peanut variety in Indonesia, or banana and dulce de leche in Argentina.. This is an example of ________. A) product invention B) straight product extension C) product adaptation D) product augmentation E) communication adaptation

product adaptation

Vidal Sassoon shampoos contain different amounts of scent according to the country in which they are sold. This is an example of ________. A) straight product extension B) product invention C) product adaptation D) communication adaptation E) standardized global marketing

product adaptation

GigaTalk, a U.S. based computer manufacturing company, found that Japanese commuters had difficulty using standard laptops on crowded rush-hour trains because while standing, commuters cannot use their laptops. So GigaTalk created a standing computer. This computer includes a touch screen and small keyboard that can be used while standing or on the move. This is an example of ________. A) straight product extension B) product invention C) product adaptation D) dual adaptation E) communication adaptation

product invention

A(n) ________ is a limit on the amount of goods that an importing country will accept in certain product categories. A) embargo B) tariff C) benchmark D) quota E) exchange control

quota

Which of the following is a nontariff trade barrier? A) strike B) quota C) boycott D) exchange premium E) restrictive product standards

restrictive product standards

Firms that stay at home to play it safe ________. A) protect themselves from competition at home B) gain a competitive edge against imports in their home markets C) successfully shield themselves from foreign competition D) risk losing their home markets E) increase their chances of entering other markets

risk losing their home markets

Heineken beer is sold successfully in the same form around the world. Which of the following product strategies is illustrated in this example? A) product adaptation B) straight product extension C) product invention D) product augmentation E) communication adaptation

straight product extension

Which of the following is true of contract manufacturing? A) It provides a chance to start faster but with more risks. B) It involves decreased control over the manufacturing process. C) It leads to an increase in potential profits on manufacturing. D) It is the simplest way to enter a foreign market. E) It involves entering a foreign market by exporting the surplus products.

It involves decreased control over the manufacturing process.

Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered whether a company-wide global focus would be more profitable after all. Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Even after seeing the benefits Wellman achieved with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting. With the assistance of a domestic export department, Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there." What did Selman & Saks hope to gain by entering the French market? A) access to new consumer markets B) access to less expensive labor C) access to less expensive materials D) access to foreign investment incentives E) the ability to offset domestic economic cycles

access to new consumer markets

Sellers might accept a(n) ________, one whose removal from the country is restricted by the buyer's government, if they can buy other goods in that country that they need themselves or can sell elsewhere for a needed currency. A) blocked currency B) countervailing duty C) custom duty D) anti-dumping duty E) tariff

blocked currency

Which of the following is a geographic factor that a company should consider before deciding to enter into a new country? A) climate B) population size C) GDP size and growth D) government bureaucracy E) business norms and approaches

climate

Changing promotions to suit local markets is known as ________. A) straight product extension B) ambush marketing C) communication adaptation D) product adaptation E) standardized global marketing

communication adaptation

In Chinese, the KFC slogan "finger-lickin'' good" came out as "eat your fingers off." And Motorola's Hello-moto ringtone sounded like "Hello, Fatty" in India. Which of the following strategies can be used to avoid such mistakes? A) communication adaptation B) standardized global marketing C) straight product extension D) product adaptation E) communication extension

communication adaptation

Sears opened up department stores in Mexico and Spain, where it found qualified local manufacturers to produce many of the products it sells. This type of joint venture is known as ________. A) joint ownership B) licensing C) management contracting D) indirect exporting E) contract manufacturing

contract manufacturing

Nike inadvertently offended Chinese officials when it ran an ad featuring LeBron James crushing a number of revered Chinese figures in a kung fu-themed television ad. As a result, Nike has to release a formal apology. This is an example of the impact of ________ on marketing strategy. A) culture B) political stability C) level of industrialization D) income distribution E) monetary regulations

culture

Members of management at Growing Green, a company that markets organic and environmentally friendly gardening and landscaping supplies and equipment, are evaluating the benefits and disadvantages of indirect exporting, direct exporting, and licensing. In which stage of the international marketing process is Growing Green? A) deciding on the global advertising strategy B) deciding which markets to enter C) deciding how to enter the market D) deciding on the global marketing program E) deciding on the global marketing organization

deciding how to enter the market

Demographic characteristics, geographic characteristics, economic factors, sociocultural factors, and political and legal factors all help a company ________. A) determine a market's potential B) determine a country's degree of globalization C) evaluate its marketing objectives D) evaluate its value delivery network E) determine a country's income distribution

determine a market's potential

In the case of ________ exporting, sellers handle their own exports. A) direct B) licensed C) indirect D) countervailing E) multilateral

direct

Think Ink is a growing company that sells a variety of inks for home and business printers. Management at Think Ink has decided to open a sales branch overseas to handle sales and distribution abroad. Think Ink is engaging in ________. A) indirect exporting B) direct exporting C) licensing D) joint ownership E) management contracting

direct exporting

Lower costs in the form of cheaper labor or raw materials, foreign government investment incentives, freight savings, and the opportunity to improve the company image are the factors that would most likely lead a company to enter a foreign market using the market entry strategy of ________. A) direct exporting B) licensing C) management contracting D) indirect exporting E) direct investment

direct investment

At Comfort Homes, a manufacturer of furniture and home accessories, the global operating units report directly to the chief executive instead of a head of an international division. The company recruits management from many countries and buys components and supplies where they cost the least. Comfort Homes is most accurately classified as a(n) ________. A) direct exporter B) geographical organization C) international subsidiary D) global organization E) world product group

global organization

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

global organization

Which of the following is a risk associated with international trade? A) technological obsolescence B) highly unstable governments C) market monopolization D) lack of trade barriers E) currency stagnation

highly unstable governments

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

income distribution

When entering a foreign market, companies typically start with ________, working through independent intermediaries to sell products produced in the home country. A) direct exporting B) embargo C) product adaptation D) indirect exporting E) licensing

indirect exporting

A country's ________ shapes its product and service needs, income levels, and employment levels. A) international trade system B) income distribution C) industrial structure D) political structure E) foreign exchange system

industrial structure

BRIC countries are examples of ________ economies. A) raw material exporting B) industrializing C) subsistence D) industrial E) totalitarian

industrializing

In a(n) ________ economy, fast growth in manufacturing results in rapid overall economic growth. A) industrial B) industrializing C) materials exporting D) subsistence E) agrarian

industrializing

India needs more imports of raw materials such as textiles, steel, and heavy machinery and fewer imports of finished textiles, paper products, and automobiles. In the context of industrial structures, India is most likely a(n) ________ economy. A) subsistence B) totalitarian C) raw material exporting D) agrarian E) industrializing

industrializing

Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered whether a company-wide global focus would be more profitable after all. Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Even after seeing the benefits Wellman achieved with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting. With the assistance of a domestic export department, Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there." If Selman & Saks allowed a French company to produce and market razors and trimmers carrying the company's brand in exchange for a royalty, Selman & Saks would be using the market entry strategy of ________. A) exporting B) franchising C) licensing D) contract manufacturing E) joint ownership

licensing

Which of the following is a political and legal factor that a company should consider before deciding to enter into a new country? A) monetary and trade regulations B) transportation structure C) population size and growth D) industrial infrastructure E) business norms and approaches

monetary and trade regulations

Bias against bids made by American companies is an example of a(n) ________. A) quota B) tariff C) boycott D) nontariff trade barrier E) exchange control

nontariff trade barrier

Foreign businesses in China appear to receive unusually close scrutiny and harsh treatment from Chinese authorities, aimed at boosting the fortunes of local competitors. This is an example of a(n) ________. A) nontariff trade barrier B) tariff C) boycott D) exchange control E) quota

nontariff trade barrier

Foreign businesses in China appear to receive unusually close scrutiny and harsh treatment from Chinese authorities, aimed at boosting the fortunes of local competitors. This includes trade tariffs, quotas, restrictions, etc. This reflects that a country's ________ should be carefully considered before doing business in that country. A) political-legal environment B) industrial structure C) cultural norms D) natural resources E) income distribution

political-legal environment

Which of the following would a defender of globalization most likely use as an example to argue that concerns of Americanization are overblown and that globalization is indeed a two-way street? A) the view of McDonald's being a domestic brand in China B) the growing popularity of coffee in China since the introduction of Starbucks C) the growing number of IKEA furniture stores in the United States D) the initial failure of Disneyland Paris E) the anti-globalization protests aimed at KFC

the growing number of IKEA furniture stores in the United States