MKTG 351 Ch. 9
The ______ was implemented in 1994 and merged Canada, Mexico, and the United States into one market of nearly 454 million consumers.
NAFTA
The ______ differs from other international trade alliances in its commitment to facilitating business and its practices of allowing the business/private sector to participate in a wide range of organization activities.
APEC
The 10 members of this trade bloc plan to increase their integration, but they do not plan to adopt a common currency or fully free labor flows between members. This describes which of the following trading blocs?
Association of Southeast Asian Nations
_____ is considered by some to have the potential to become the world's largest market and one of the most productive manufacturing nations.
China
_________ occurs when a company hires a foreign firm to produce a designated volume of the firm's product to specification and the final product carries the domestic firm's name.
Contract manufacturing
______ is another name for the European Union.
European Community
International business in the ________ has been negatively impacted by poor financial conditions in member countries, including Portugal, Italy, Greece, and Spain—affectionately known as the PIGS of the Common Market.
European Union
_____ are defined as government restrictions on the amount of a particular currency that can be bought or sold and may also limit international trade.
Exchange controls
_______ bring together buyers and sellers from different countries and collect a commission for arranging sales.
Export agents
Exporting, licensing and franchising, trading companies, contract manufacturing, and joint ventures are preferred modes of international market entry for firms with an export department structure. T/F
False
Government restrictions on the amount of a particular currency that can be bought or sold are known as import controls. T/F
False
Walmart started out as a born global firm. T/F
False
_______ is implemented when a company employs a standardized approach to marketing treating all countries or markets where their products are sold as a single entity—marketing standardized products in the same way in each market with no differentiation across markets.
Globalization
Rave Denim is a small, family-owned designer and manufacturer of denim products such as its signature blue jeans which retail for $195 per pair and are highly sought-after as a fashion brand. Rave Denim is considering expansion into international markets and has recently learned of favorable opportunities to export its products to Canada and Mexico. They have learned that _______ eliminated virtually all tariffs on goods produced and traded among Canada, Mexico, and the United States.
NAFTA
_____ are often utilized to produce revenue for a country and/or to protect domestic products from foreign competition.
Import tariffs
_______ is defined as the purchase of products from a foreign source.
Importing
NAFTA makes it easier for U.S. businesses to invest in Mexico and Canada and simplifies country-of-origin rules which make it more difficult for ______ to use Mexico as a staging ground for further penetration into U.S. markets.
Japan
_______ is(are) defined as a partnership between a domestic firm and a foreign firm or government and is especially popular in industries that require large investments such as automobile manufacturing.
Joint ventures
Which of the following is not a benefit to a franchisor such as Kentucky Fried Chicken in expanding into international markets?
Kentucky Fried Chicken has decreased penetration in global markets.
_______ can be a viable alternative when the political stability of a foreign country is in doubt. In addition, it's especially advantageous for small manufacturers wanting to launch a well-known brand internationally.
Licensing
The United States is not part of which of the following trade alliances?
MERCOSUR
Roots is a popular clothing brand with retail stores in Canada and is considering expanding its stores into the United States and Mexico. Which of the following would facilitate the expansion of Roots?
North American Free Trade Agreement
Which of the following is true about the European Union?
The European Union was established to promote free trade among its members.
Traditionally, most companies entered the international marketplace _______ as they gained knowledge about various markets and opportunities.
incrementally
How does using an exporting intermediary limit the risk involved with global marketing?
This approach involves limited risk because the company has no direct investment in the foreign country.
Because of continuing disputes and inconsistencies among the administrations of member states, it will be many years before the European Union truly becomes one deregulated market. T/F
True
Contract manufacturing occurs when a company hires a foreign firm to produce a designated volume of the firm's product to specification and the final product carries the domestic firm's name. T/F
True
Regardless of the extent to which a firm chooses to globalize its marketing strategy, extensive environmental analysis and marketing research are necessary to understand the needs and desires of the target market(s) and successfully implement the chosen marketing strategy. T/F
True
_________________ marketing involves developing and performing marketing activities across national boundaries.
international
A shoe manufacturer in Italy is allowed to export a limited number of shoes to Russia and is an example of how Russia utilizes _______ to limit the amount of goods it will accept for certain product categories.
a trade embargo
Recently diplomatic ties have improved between the United States and Cuba and consumers in the United States could soon benefit from the lifting of ________ on products from Cuba, such as cigars, rum, sugar, as well as fruits and vegetables. Due to this policy, the United States has suspended trade with Cuba due to human rights violations and political concerns.
an embargo
An organizational structure that centralizes all of the responsibility for international operations is called
international division
Because Skype was an Internet firm, it was not faced with some of the limitations many other companies encountered. It adopted a global orientation from the outset. Since Skype is an application that allows for video chat services, it quickly grew popular worldwide. Eventually, Microsoft acquired Skype for $8.5 billion. Skype is an example of what type of firm?
born global
Companies that are described as ________ were founded with the knowledge and resources to expedite their commitment and investment in the global marketplace and typically represent small technology-based firms that earn as much as 70% of their sales outside their domestic home market.
born globals
Nike uses _______ in Vietnam to produce many of its athletic shoes at a specified level of volume to their exact specifications.
contract manufacturing
The fashion giant H&M was recently named as one of the retail brands that use ______ to manufacture garments in Bangladesh where workers were victims to a fire that killed over 100 people. The retailer and other companies that participate in Bangladesh's garment industry have signed a legally binding agreement to improve safety in the factories they operate in and will increase safety inspections to protect workers.
contract manufacturing
What countries are members of the Southern Common Market (MERCOSUR)?
countries in South America
A French clothing company is excited about the opportunity to expand its market to other members of the EU and realizes that over time consumers in the EU may become more homogeneous in their needs and wants. However, the company should recognize that _____ differences among the nations may require modifications in the marketing mix for customers in each nation.
cultural
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?
cultural factors
The concept that morality varies from one culture to another and that business practices are differentially defined as right or wrong by each culture is termed
cultural relativism.
Which of the following is most likely to lead to acceptance of a new product being introduced from one country to another?
cultural similarities between the two countries
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 _________.
customization
A firm may utilize a(n) _______ organizational structure and engage in exporting, licensing, and use of trading companies as preferred modes of international market entry.
international divisions
A company that makes a long-term commitment to marketing their products or services in a foreign country that offers both a promising market opportunity and a stable political and economic environment should consider ________.
direct ownership
Toyota has established manufacturing operations across North America and just announced plans to build a state-of-the-art plant in Guanajuato, Mexico, that will produce the popular Corolla model. Toyota has engaged in _______.
direct ownership
High Plains Furnishings, a furniture manufacturer in southern Montana, markets its furniture products in markets within the United States. It has also found several niche target markets in Finland, Chile, and Argentina. High Plains Furnishings is engaging in ___________.
domestic marketing and limited exporting
Limited Pottery makes hand-crafted pottery and dining sets and markets its line of products throughout the United States in specialty stores. It has also several relationships with distributors in France, Germany, and Sweden who represent the company and sell the product to retailers in those countries. Limited Pottery is engaging in which type(s) of global marketing?
domestic marketing and limited exporting
If Hyundai, a Korean automobile manufacturing firm, started selling its cars at unfairly low prices to Germany, Hyundai would be engaging in __________.
dumping
Recently, the European Commission launched a(n) ________ investigation related to allegations that Russia and China were selling cold-rolled flat steel products—used in cars and home appliances—at below market prices in the EU market "causing material injury" to the EU industry.
dumping
The selling of products at unfairly low prices is known as
dumping
A beverage company is considering international expansion and knows there could be differences related to _______ forces, such as differences in standards of living, credit, buying power, and income distribution.
economic
Global companies are becoming more adept at managing their products, sourcing, and pricing in ways that realize the most profit and must be aware of concerns such as currency exchange rates when conducting their business and exporting products from one country to another country. For example, a U.S.-based company that sells product in Canada must price in Canadian dollars. The level of inflation or deflation and the relationship between the U.S. dollar and Canadian dollar will affect the price that customers will be willing to pay for the products as well as the profit margins realized by the U.S. firm. This is an example of the _______ force which affects international marketing activities.
economic
Firms that enter international markets often find that they must make significant adjustments in their marketing strategies since the forces impacting foreign markets are distinct from those affecting domestic markets. Therefore, a successful international marketing strategy requires a careful _____ analysis.
environmental
U.S. manufacturers utilizing contract manufacturers in China have faced increased concerns about intellectual property and gray market goods. For example, a walk through any of China's open-air markets will demonstrate the frequency with which foreign firms' logos and merchandise are available, such as the famous Burberry beige-black-and-red pattern scarf, Coach purses, and Caterpillar-logo shoes. This exemplifies the impact of _______ forces on international business.
ethical and social responsibility
Member countries of the European Union utilize a common currency, called the _____, except for _______.
euro; Denmark
When a Japanese alcohol distributor purchases Kentucky bourbon from a distillery in Kentucky, it is engaging in
importing
Mitsubishi Motors, based in Japan, operates several ________ as part of its global footprint where it has centralized the responsibility of international operations such as human resources, sales, and production into one unit that serves as the central point for all information flows related to the international operations. The company maintains these offices in Africa, Asia, Europe, Latin America, the Middle East, North America, and Oceania.
international divisions
Which of the following is most likely to engage in direct ownership activities internationally?
internationally integrated structures
A Spanish term used to refer to production facilities established in Mexico near the United States border is
maquiladoras
The United States began a program to limit the number of pounds of sugar that could be imported into the United States in order to maintain higher prices on domestically produced sugar and protect the industry from foreign competition. The current _____ is 3 billion pounds which represents about 15% of U.S. consumption of sugar.
quota
Countries may utilize nontariff trade restrictions such as _____ which place a limit on the amount of goods an importing country will accept for certain product categories. For example, if the United States wanted to increase sales of domestic products such as textiles, it could limit the number of textile products imported into the United States from other countries.
quotas
An account representative is meeting with a client team in an Asian company and notices that any attempt to discuss business is avoided and, instead, the clients are more interested in learning about the sales representative's family and hobbies. The account representative is surprised and growing anxious that he's not able to get down to business more quickly and is worried the client company may not be interested in his product. Which environmental force has the sales representative encountered?
sociocultural
Partnerships which are formed to create a competitive advantage on a worldwide basis and may involve traditional rivals competing for the same market are called
strategic alliances.
The unconscious reference to one's own cultural values, experiences, and knowledge when encountering new and different cultures is known as ____________.
the self-reference criterion
An organization that links buyers and sellers in different countries but is not involved in manufacturing is called a(n)
trading company
Companies seeking to expand their exporting opportunities to Cuba are utilizing a(n) _______, which links buyers and sellers in different countries but is not involved in manufacturing and does not own assets related to manufacturing.
trading company
The Grummond Group buys air conditioner components in industrialized countries and sells them to business customers in developing countries where the air conditioners are assembled. Grummond is most likely classified as a(n) ___________.
trading company
Apple operates manufacturing facilities in China in order to take advantage of low labor costs and high-quality production. Apple and other foreign firms operating in China are beneficiaries of the _____ which was established in 1989 to promote open trade and economic and technical cooperation among member nations. In addition, they are allowed to participate in a wide range of organization activities and have become increasingly competitive regarding global business.
APEC
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?
APEC
Fiat and the Indian automotive manufacturing company, Tata Motors, authorized a 50:50 industrial _______ in the mid-2000s. Both companies agreed to share a distribution network, back-end support system, and the co-manufacturing of products at a facility in Ranjangaon, India.
joint venture
The ________ was established in 1991 under the Treaty of Asuncion to unite Argentina, Brazil, Paraguay, and Uruguay as a free trade alliance. It now also includes Venezuela, Bolivia, Chile, Columbia, Ecuador, and Peru as associate members representing approximately 67% of the South American market.
MERCOSUR
In many developing countries around the world, technology is enabling opportunities to "leapfrog" existing technology. What does this mean?
More advanced technology is reaching these countries even though they lack technological infrastructures.
According to the text, which country has the highest gross domestic product?
United States
The _____ promotes free trade among members and deals with the rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably, and freely as possible between nations.
WTO
When governments restrict the amount of a particular currency that can be bought or sold, it can force businesses to conduct business through a central agency such as a central bank. These restrictions are known as _______.
exchange controls
Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with a(n) ____ structure.
export department
SUP ATX is a manufacturer and marketer of stand-up paddleboards and sells its boards to companies in Australia. Which of the following best characterizes SUP ATX?
exporter
Thirty-thirty Coffee is a national coffee roaster that sells coffee to restaurants and coffee shops. They are considering opportunities to expand internationally since they have won many awards for their coffee and believe their product could be successful in other countries. However, the company has never conducted business outside of the United States and does not have the capitol to conduct marketing research to identify the best market opportunities for their products. What type of business could best enable Thirty-thirty Coffee to explore its opportunities with little risk and no foreign direct investment?
exporting
Which of the following activities are not conducted by the World Trade Organization (WTO)?
extends business loans through the World Bank
A form of licensing in which a company grants another entity the right to market its product, using its name, logo, methods of operation, advertising, products, and other elements associated with the original business in exchange for a financial commitment is called
franchising
The Hard Rock Café operates gift stores and restaurants in major cities across the United States and select cities around the globe. The Hard Rock Café has been able to expand internationally by granting other companies the right to market its product, using its name, logo, methods of operation, advertising, products, and other elements associated with the Hard Rock Café business, in return for a financial commitment and an agreement to conduct business in accordance with the Hard Rock Café's standard of operations. The Hard Rock Café is engaging in
franchising
Calloway Golf Company standardizes many of their products worldwide which is an example of
globalization
Princeton Sun Hats markets its products around the world and creates standardized products that can be successfully marketed in various countries utilizing the same marketing mix since customer needs are relatively homogeneous. Princeton Sun Hats is utilizing a ______ strategy.
globalization
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 ___________.
globalization of marketing
The Mont Blanc Company plans to export expensive consumer gift items to Germany. The best overall economic measure of market potential would be Germany's _____________.
gross domestic product per capita
An overall measure of a nation's economic standing and the market value of a nation's total output of goods and services for a given period is called
gross domestic product.
China attempts to protect its domestic market by levying a(n) ________ on foreign goods such as poultry which results in imported products costing considerably more than products produced or raised within China.
import tariff
Buffalo Trace is one of the oldest distillers of Kentucky bourbon and has been enjoying a sharp increase in sales of its various brands as bourbon has become more popular both at home and abroad. The Japanese consumers were quick to develop a taste for Kentucky bourbon and fueled the growth in revenue for Buffalo Trace as well as other distillers in Kentucky. Buffalo Trace quickly learned the complexities of international trade however when ______ were imposed on its products which raised the price of the bourbon and affected trade. Buffalo Trace realized that Japan was simply attempting to protect its local alcohol spirit market at the expense of foreign firms competing in Japan.
import tariffs
China is the world's largest beer producer and consumer and represents a significant opportunity for American craft breweries. An increasing number of consumers in China, especially middle-class residents, prefer imported beers due to their higher quality, flavor options, and enhanced food safety. In stores, restaurants, and bars, the price of an imported beer would be $2 to $4 per liter and vary from 100%-200% more expensive than Chinese domestic mass-produced beers. Part of the price difference is related to the ______ that are imposed on imported beers, which raised the price of the product and affected trade. American craft breweries must realize that China is simply attempting to protect its local beer market at the expense of foreign firms competing in China.
import tariffs
Greece has been facing dire economic conditions recently and is seeking ways to raise revenue. Greece could impose _______ on goods purchased outside its borders and brought into the country.
import tariffs
Stepan Chemical, based in Illinois, operates several ________ as part of its global footprint where it has centralized the responsibility of international operations such as human resources, sales, and production into one unit that serves as the central point for all information flows related to the international operations. The company maintains these offices in Mexico, Europe, and Singapore to serve its growing market in Asia.
international divisions
BMW recently engaged in a(n) ___________ arrangement with Maclaren, a stroller manufacturer to expand its market through lifestyle products. According to the Maclaren website, "The BMW Buggy is an engineering-inspired Maclaren Object of Design combining the highest quality materials and signature design details to create a sophisticated stroller. The award-winning Maclaren BMW Buggy is our lightweight, high-performance stroller. Suitable for children from 6 months and up, the car-inspired stroller delivers a padded liner with a luxurious bucket-seat feel, multiple position recline seat, contoured hood with mesh windows and insignia details."
licensing
A firm engaging in _______ would develop no international marketing strategies but could have international distributors, foreign firms, or selected customers purchase some of its products.
limited exporting
The balance of trade is the difference in value between a nation's exports and its imports. Which of the following strategies can be utilized to enable a country to maintain a more favorable balance of trade?
limiting imports
Caterpillar is a global business and utilizes engineers to assist with new product development, specifications and quotations for client purchases, and other engineering services. In order to quickly respond to requests for bids, Caterpillar utilizes ______ to contract with engineering firms in China and India that can respond to bid requests during the evening and overnight hours of the United States and enable customers to receive faster quotes.
outsourcing
A small, family-owned French winery is considering exporting its champagne to China. Which of the following would be the best measure of market potential for the winery to utilize in making decisions about exporting its wines?
per capita GDP
A nation's political system, laws, regulatory bodies, special-interest groups, and courts all have a great impact on international marketing. These entities are part of the _____forces that affect international marketing activities.
political, legal, and regulatory
A variety of environmental factors affect the ability of companies to successfully launch international or global marketing activities. A firm considering the expansion of its business through exporting should consider the impact and existence of trade barriers which is a _______ force.
political, legal, and regulatory
Apple and IBM recently announced a _______ to allow the two companies to work together on a worldwide basis. Apple hopes to capitalize on IBM's capabilities to analyze big data as well as break into the corporate, business-to-business marketplace. IBM will benefit from Apple's innovations and iOS systems which will allow people to change the way they work. Thus, the arrangement will enable Apple and IBM to create a competitive advantage on a worldwide basis.
strategic alliance
An organization that links buyers and sellers in different countries but is not involved in manufacturing and does not own assets related to manufacturing is a
trading company.
