Marketing Ch. 9

A

Another name for the European Union is a) the Common Market. b) the European Market. c) the Euro. d) NAFTA. e) AECO.

2/3

Approximately ____ of the world's purchasing power is outside of the United States. a) 1/10 b) 1/3 c) 2/3 d) 1/2 e) 9/10

C

Government restrictions on the amount of a particular country's currency that can be bought or sold are known as a) embargoes. b) quotas. c) exchange controls. d) import controls. e) balance of trade controls.

B

Many companies choose to standardize their _____ across national boundaries to maintain a consistent and well-integrated corporate culture. a) technology b) ethical behavior c) language d) dress code e) products

C

Many marketers claim that ____ will become the world's largest market. a) Japan b) the United States c) China d) Thailand e) India

B

Maquiladoras are a) exchange controls from central banks in Latin American countries. b) production facilities in north-central Mexican states. c) import-export agents of the Mexican government. d) global marketing programs established in Latin American countries. e) freight forwarders from Mexico.

D

The agreement between the United States, Canada, and Mexico that merges these three countries into one marketplace is called a) EU. b) MERCOSUR. c) APEC. d) NAFTA. e) GATT.

B

What is the greatest advantage to an organization of having a subsidiary in a foreign nation? a) Avoidance of all U.S. laws b) Increase in cross-cultural approaches to management that allows subsidiaries to develop their own identity c) Increased trend toward nationalistic marketing approaches d) Greater amount of standardization of the marketing mix e) Greater amount of security from government nationalization and other anticompetitive measures

E

What level of commitment in international marketing may be most attractive when the political and economic stability of a foreign country is questionable? a) Joint ventures b) Direct ownership c) Exporting d) Limited exporting e) Licensing

E

When Smithson Graphics decided to go international with its marketing effort, it adopted a global approach. Which factors did SG most likely experience difficulty as the firm applied a global strategy for marketing? a) Branding b) Product characteristics c) Packaging d) Labeling e) Advertising

C

When a firm's products sell in foreign countries with little or no effort to obtain foreign sales, the firm is engaging in a) international marketing. b) global marketing. c) limited exporting. d) product licensing. e) unplanned exporting.

B

When asked where Laser Tools, Inc., markets its products, company president and founder Roger Helms says that "the world is just one big market." He feels anyone not taking this stance is systematically passing up profitable business. Helms's international marketing strategy is best described as a) customization of marketing. b) globalization of marketing. c) limited exporting. d) full-scale international marketing. e) export agenting.

C

When products are introduced into one nation from another, acceptance is far more likely a) if prices are set very low. b) when bribes are paid to local officials to aid distribution. c) if there are similarities between the two cultures. d) if packaging is adjusted to match local preferences. e) when retailers are given incentives to push the products.

A

Which of the following agreements provides a forum for tariff negotiations, reducing trade restrictions, resolution of international trade problems, and ground rules for international trade? a) The World Trade Organization b) The North American Free Trade Agreement c) The Latin American Free Trade Agreement d) The European Union Free Trade Agreement e) The General Agreement on Tariffs and Trade

A

Which of the following is most likely to engage in direct ownership activities internationally? a) Internationally integrated structures b) International division structures c) Export department structures d) Import department structures e) Outsourcing structures

C

Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with a(n) ________ structure. a) international division b) internationally integrated c) export department d) geographic area e) matrix

E

The United States' prohibition against importing cigars from Cuba is an example of a(n) a) health control. b) quota. c) embargo. d) exchange control. e) import control.

C

The trade alliance that includes Brazil, Argentina, Chile, and other countries is known as a) OPEC. b) APEC. c) MERCOSUR. d) NAFTA. e) the Common Market.

E

Which of the following alliances/agreements is the United States not a part of? a) NAFTA b) APEC c) GATT d) WTO e) MERCOSUR

D

Which of the following centralizes all of the responsibility for international operations? a) Product division structures b) Export department structures c) Internationally integrated structures d) International division structures e) Global matrix structures

D

Which of the following countries has made the greatest inroads into other world markets? a) Indonesia b) Philippines c) Malaysia d) Japan e) China

B

Which of the following describes a company hiring a foreign firm to produce a designated volume of its product to specification? a) Licensing b) Contract manufacturing c) Exporting d) Importing e) Direct investment

A

Firms that have operations or subsidiaries located in many countries are referred to as a) multinational enterprises. b) strategic alliances. c) joint ventures. d) international marketers. e) export alliances.

C

Franchising offers all the following benefits for franchisers except a) franchise agreements require a certain standard of behavior from franchisees, which helps protect the franchise name. b) franchisers can retain control of their name while increasing global penetration of their products. c) the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and royalties. d) the franchiser's revenue stream is fairly consistent because franchisees pay fixed fees and royalties. e) franchisers do not have to put up a large capital investment.

c

Globalization of markets requires developing marketing strategies as if the world were one market. Which of the following marketing mix variables is most difficult to standardize for globalization? a) Brand name b) Package c) Media allocation d) Labels e) Product characteristics

A

A business partnership between a domestic firm and a foreign firm is known as a) a joint venture. b) an international partnership. c) a multinational enterprise. d) licensing. e) exporting.

D

A company not involved in manufacturing that brings together buyers and sellers in different countries is usually referred to as a a) franchise. b) contract manufacturer. c) strategic intermediary. d) trading company. e) joint venture.

C

A limit on the amount of goods an importing country will accept for certain product categories during a specified time period is called a(n) a) exchange control limit. b) embargo. c) quota. d) import tariff. e) balance limit.

D

A special form of licensing in which one company grants another company the right to market its product in accordance with its standards in exchange for a financial commitment is called a) a joint venture. b) contract manufacturing. c) direct licensing. d) franchising. e) a strategic alliance.

B

A subsidiary in a foreign country generally operates under a) the laws of the parent company's home country. b) foreign management in order to develop a local identity. c) strict management control from the home country's executives. d) the regulations set forth by the International Trade Agreement. e) a team of managers from the distant parent company.

C

According to your text, ____ are small technology-based firms operating in international markets within two years of their establishment and realizing as much as 70 percent of their sales outside the domestic home market. a) "natural globals" b) "multinational corporations" c) "born globals" d) "born multinationals"

B

Before the 1990s, most firms entered international markets a) globally and quickly. b) incrementally and slowly. c) incrementally and quickly. d) domestically and slowly. e) regionally and quickly.

A

Caterpillar would like to better understand factors that would affect its ability to market construction equipment in various countries. Which of the following forces determine how trade barriers affect Caterpillar's marketing efforts? a) Political and legal b) Interpersonal c) Social d) Technological e) Industrial

A

Differences in standards of living, credit, buying power, and income distribution are all examples of _____ forces that must be considered in international marketing efforts. a) economic b) cultural c) ethical d) technological e) legal

B

Henderson Synthetics' management believes that several of the firm's products could have sizable markets in other countries. To maintain a low level of commitment with minimum effort and cost, Henderson should engage in international marketing through a) contract manufacturing. b) exporting. c) joint ventures. d) licensing. e) subsidiaries.

E

How does using an exporting intermediary limit the risk involved with global marketing? a) Most exporting intermediaries assume all financial risks on behalf of their clients. b) Exporting intermediaries are not subject to the same laws as companies, and therefore limit the legal risk involved. c) Using an exporting intermediary restricts a company to being involved with joint ventures and not direct ownership. d) Exporting intermediaries guarantee that the products a company is selling will be a good fit for the foreign markets they are entering. e) This approach involves limited risk because the company has no direct investment in the foreign country.

A

If Caterpillar wished to reach the market in Malaysia but was leery of a direct investment in the country, it might provide a Malaysian operation with the knowledge to produce and market its products in exchange for a commission. This type of arrangement is called a) licensing. b) exporting. c) a strategic alliance. d) a joint venture. e) contract manufacturing.

E

If Germany, in an attempt to bolster the sales of its own auto manufacturers, decided to limit the number of automobiles that could be brought in from other countries, Germany would be using a(n) a) embargo. b) boycott. c) exchange control. d) import tariff. e) quota.

B

If a newly formed country wanted to increase its international trade and reduce worldwide tariffs, it would most likely try to become a part of a) NAFTA. b) WTO. c) MERCOSUR. d) APEC. e) EU.

C

In China, the price of imported Scotch is $30 per glass as opposed to Scotch from China which is $3. Which of the following do you think accounts for the difference in price? a) Exchange control b) Balance of trade c) Import tariff d) Embargo e) Export tariff

A

In considering the viability of potential international markets for Pepsi products, PepsiCo is advised to take into account __________, which provides insight into market potential. a) per capita gross domestic product b) gross domestic product c) the quantity of exports d) the quantity of imports e) total consumer income

B

In many developing countries around the world, technology is enabling opportunities to "leapfrog" existing technology. What does this mean? a) These countries are able to forgo current technological advances in order to wait for even better technology to be developed. b) More advanced technology is reaching these countries even though they lack technological infrastructures. c) Technological advances are often offered at prices considerably lower than in well-developed countries. d) The technology in developing countries is rapidly surpassing the technology in well-developed countries. e) The existing technological infrastructures in these countries are rapidly being replaced by newer, more advanced technology.

D

In relation to international marketing, which of the following best describes direct ownership? a) A company owns its own manufacturing facilities. b) A company forms an alliance with a similar company in a foreign country. c) Foreign companies contract with manufacturers in other countries. d) A company owns subsidiaries or facilities in foreign countries. e) Two companies from different nations have interests in each other's facilities.

B

Johnston Chemicals' president is very excited about the possibility of the firm's British subsidiary having access to customers in the entire EU. He realizes that it will be some time before this area truly becomes one market, primarily because of differences in which of the following? a) Available advertising media b) Cultural factors c) Legal challenges d) Technological advances e) Economic environmental factors

E

Marketers of computer software, music CDs, and books are particularly affected by cultural differences in a) socioeconomic status of citizens. b) advances in technology. c) differences in cross-cultural exchange behavior. d) ethical codes of conduct for businesses. e) standards regarding intellectual property.

D

Once a company makes a long-term commitment to a foreign market that has a promising political and economic environment, which of the following options then emerges as a possibility? a) Exporting b) Joint venture c) Limited exporting d) Direct ownership

B

One of the effects of NAFTA is the simplification of country-of-origin rules. This will likely hinder the international trade activities of a) Canada. b) Japan. c) Brazil. d) Cuba. e) Panama.

C

Organizations that employ standardized products, promotion campaigns, and prices for all markets are practicing what is known as a) customization. b) internationalization. c) globalization. d) regionalization. e) nationalization.

E

Questor Corporation owns the Spalding brand name but does not produce a single golf club or tennis ball. This arrangement is an example of what type of involvement level for international marketing? a) Exporting b) Trading c) Joint venture d) Strategic alliance e) Licensing

C

Select the true statement. a) Legislation regulating marketing in many foreign countries is being eased. b) A government's attitude toward cooperation with importers has little impact on marketing to that country. c) Refusing to give payoffs and bribes in some foreign countries may put a marketer at a competitive disadvantage. d) Bribes and payoffs are considered unethical in all countries and cultures. e) Bribes and payoffs are supported by U.S. trade policies under certain conditions.

E

Selling products that are not in demand in all world markets, such as hand-powered washing machines for use in countries where electricity is not universally available, represents an international marketing strategy focusing on a) internationalization. b) culturalization. c) nationalization. d) globalization. e) customization.

D

Sometimes business partnerships are formed between traditional rivals competing for market share in the same product class. These partnerships are known as a) trading companies. b) contract manufacturers. c) joint ventures. d) strategic alliances. e) licenses.

D

Southern Tier Industries has operations in more than 30 foreign countries. The headquarters in Atlanta controls the entire organization while offering subsidiaries the freedom necessary to achieve success in local markets. Southern Tier Industries is an example of a(n) a) strategic alliance. b) joint venture. c) export-driven corporation. d) multinational enterprise. e) trading company.

A

Special interest groups and regulatory bodies are ______ forces that must be taken into account in international marketing. a) socioeconomic b) technological c) economic d) social and ethical e) political and legal

A

The Foreign Corrupt Practices Act of 1977 makes it illegal for U.S. firms to a) attempt to make large payments or bribes to influence policy decisions of foreign governments. b) offer foreign businesses any type of incentive for purchasing their company's products and services. c) change their ethical standards when dealing with foreign firms. d) give even small tips or gifts in countries where such gifts are customary business practices. e) introduce any type of corruption into foreign businesses that have higher ethical standards than those of the U.S. firm.

A

The Grummond Group buys computer peripherals in industrialized countries and sells them to customers in developing countries. Grummond is most likely classified as a(n) a) trading company. b) strategic alliance. c) joint venture. d) licensee. e) exporter.

B

The World Trade Organization accomplishes all of the following except a) educating companies about international trade rules. b) lending money to businesses interested in developing international markets. c) serving as a forum for trade negotiations. d) helping settle trade disputes. e) providing legal ground rules for international commerce.

E

The ___________ is the difference in value between a nation's exports and its imports. a) net trade value b) export/import ratio c) gross domestic product d) balance of payments e) balance of trade

a

The contracting of noncore operations or jobs from internal production within a business to an external entity that specializes in that operation is known as a) outsourcing. b) licensing. c) franchising. d) contract manufacturing. e) contract sourcing.

D

The environmental forces that affect foreign markets may differ dramatically from those affecting domestic markets. This makes a careful _______ a critical part of a successful international marketing strategy. a) background check b) regulatory analysis c) social audit d) environmental analysis e) marketing statement analysis

D

The gross domestic product is a) a measure of the profit made by all firms in a nation. b) the average annual earnings per person in a nation. c) a measure of the types of products produced by a nation. d) an overall measure of a nation's economic standing. e) a ratio of domestic products to products produced in foreign countries.

A

The role of export agents is to a) bring buyers and sellers from different countries together and collect a commission for arranging sales. b) purchase products from different companies and sell them to foreign countries. c) help a firm to make direct investments in foreign countries. d) contact domestic firms about the opportunities available in exporting. e) arrange for licensing agreements between domestic and foreign firms.

D

The term dumping refers to the sale of a) products sold in foreign markets that cannot be sold in the United States. b) products sold in foreign markets at prices above those charged in the United States. c) all discontinued U.S. products in foreign countries. d) products sold in foreign countries at unfairly low prices. e) products sold in foreign markets that cannot pass safety standards in the United States.

E

The unconscious reference to one's own cultural values, experiences, and knowledge when encountering new and different cultures is known as a) the "when-in-Rome" approach. b) the Fraedrich Principle. c) cultural relativism. d) the self-reference principle. e) the self-reference criterion.

E

The unification of Europe through the European Union (EU) a) produced the largest single market in the world. b) calls for greater customization of products and attention to regulations and restrictions of European countries. c) means that members of the EU have become more heterogeneous in their needs and wants. d) required the countries to be segmented into many different markets. e) permits virtually free trade among the member nations of the EU.

E

Which of the following is not true of NAFTA? a) The agreement has a long adjustment phase-in time period. b) Increased competition should lead to a more efficient market. c) It will provide additional opportunities for the United States in long-term affiliations with other countries in the Western hemisphere. d) It is controversial. e) Business licensing requirements have been increased.

D

Which of the following is often used to raise revenue for a country and/or to protect domestic products? a) Quota b) Warning label c) Embargo d) Import tariff e) Exchange control

A

Which of the following is true about NAFTA? a) It remains politically controversial. b) It will increase the total output of goods and services to foreign markets. c) It will decrease the total number of jobs in the United States. d) It eliminated all tariffs on goods traded between the United States, Canada, and Mexico. e) It will reduce the number of illegal aliens in the United States.

A

Which of the following is used to help maintain a more favorable balance of trade by a country? a) Limiting imports b) Limiting exports c) Establishing exchange controls d) Increasing gross domestic product e) Changing political systems

E

Which of the following lists the levels of involvement in global marketing from the lowest to the highest? a) International marketing, limited exporting, domestic marketing, globalized marketing b) Limited exporting, domestic marketing, globalized marketing, international marketing c) Globalized marketing, international marketing, limited exporting, domestic marketing d) Domestic marketing, globalized marketing, international marketing, limited exporting e) Domestic marketing, limited exporting, international marketing, globalized marketing

E

Which of the following trade alliances differs from others in its commitment to facilitating business and its practice of allowing the private sector to participate in a wide range of activities? a) NAFTA b) EU c) MERCOSUR d) WTO e) APEC

D

____ refers to the idea that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures. a) The self-reference criterion b) Global ethics c) Economic relativism d) Cultural relativism e) Moral relativism