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Franco, a former retailer, has been living in the United States for five years and wants to start a business. He does not have an existing firm or a product, and he doesn't have a lot of capital, but since he loves McDonald's food, he decides to

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McDonald's is a global franchisor. A franchising contract allows the franchisee to operate a business—a retail product or service firm or a B2B provider—using the name and business format developed and supported by the franchisor. The correct answer is: open a McDonald's franchise.

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Tariffs, quotas, and currency exchange policies affect global

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These are all important issues that will affect the price consumers will pay for a product. The correct answer is: pricing strategies.

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Which of the BRIC countries has the highest illiteracy rate?

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In India, approximately 39 percent of the adult population is illiterate, compared with 11 percent in Brazil, 7.8 percent in China, and less than 1 percent in Russia. The correct answer is: India

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One Laptop Per Child is a nonprofit initiative with the goal of making extremely low-cost laptops available to children in the developing world to help them learn skills, with the goal of helping them to learn skills needed in today's workforce. If some of the low-cost technology developed for this laptop found its way into laptops created for U.S. consumers, this would be an example of

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Reverse innovation occurs when an innovation is introduced first in the developing world and then moves to developed countries, which is the opposite of the usual path for innovations. The correct answer is: reverse innovation.

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Chris laughed at some of the cultural mistakes companies made in advertising and promotion in international trade while he was in school. Now he was trying to determine what had gone wrong with the campaign he had planned in Latin America for his company's product, and it didn't seem quite as amusing. He narrowed the issues down to sociocultural factors. He was looking at both __________ and __________.

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Sociocultural factors include visible artifacts like symbols and dress; they also include underlying values that can be more difficult to understand. Some of the other answers list one sociocultural factor (language, symbols, verbal communication) along with something that is not a sociocultural factor. The correct answer is: visible artifacts; underlying values

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Marketers considering operations and trade with a specific country must consider whether the country belongs to a trading bloc. A trading bloc is a group of countries

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A trading bloc consists of countries who have signed a cooperative trade agreement. The correct answer is: that have established a formal agreement to manage trade activities.

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Which statement about India's population is TRUE?

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India's highly skilled workforce holds great attraction for firms that hope to expand using local talent, especially in technical fields. The correct answer is: India's workforce is highly skilled, particularly in technology.

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Which of these is NOT one of the BRIC countries?

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The BRIC countries are Brazil, Russia, India, and China. The correct answer is: Bulgaria

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If you visit a Kentucky Fried Chicken restaurant in China, you will find congee, a rice porridge that can feature pork, pickles, mushrooms, and preserved egg, on the menu. This is an example of which global product strategy?

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Congee would be a totally new product. The correct answer is: Sell totally new products or services.

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Which of the following global entry strategies is being used if a company collaborates with a competitor on a globally based opportunity for mutual benefit, but the competitors do not invest in each other?

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A strategic alliance is a collaborative relationship that does not create an equity partnership. Competitors might enter into this kind of arrangement if both could profit from it. Since they do not invest in each other, there is enough distance that they could continue to compete in other arenas. The correct answer is: strategic alliance

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Tariffs protect domestic producers by

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Tariffs are taxes added to imported goods to raise their prices, making it easier for domestic firms to compete on price. The correct answer is: making imported products more expensive.

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Gandolph's Tires sells the same tire globally, but it uses different advertisements based on the country and culture. This is an example of

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Referred to as glocalization, some firms also standardize their products globally but use different promotional campaigns to sell them. The correct answer is: glocalization.

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Many of the best-known American retailers, like Starbucks and McDonalds, have expanded globally using

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Franchising is a contractual agreement between two companies in which one pays for the right to use the brand and concept developed by the other. Fast food restaurant chains are one category in which franchising is widely used. The correct answer is: franchising.

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Global marketers are under constant pressure to shorten distribution channels to

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Distribution channels tend to be longer and more complex within global contexts than in domestic markets. For this reason, distribution channel efficiency is a critical factor in keeping costs down in global marketing. The correct answer is: reduce costs.

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Graham had developed an extremely successful advertising and promotion campaign for a client in the United States. The client wanted to roll out the same campaign to markets worldwide, but Graham cautioned against doing this, most likely because

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When designing communication strategies for global markets, differences in languages, customs, and culture must be carefully considered. A campaign that works well in one country might be ineffective or even offensive in another. The correct answer is: differences in languages, customs, and culture might make the campaign meaningless and ineffective in some markets.

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China, like many other countries, usually requires entering firms to create _________ when expanding into their markets, limiting outsiders' control of businesses.

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A joint venture is a business formed when two or more firms pool their resources. It is a medium-risk strategy for global market entry. By requiring that foreign firms engage in joint ventures to enter the market, China ensures that a local firm retains partial ownership of the venture. The correct answer is: joint ventures

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Which of the following is currently a negative factor for foreign investment in India?

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India presently lacks a modern supply chain infrastructure; however, with recent liberalization of regulations on foreign investment, this may change. The correct answer is: India's infrastructure for supply chain management is not up to date.

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What do the BRIC countries have in common?

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The BRIC countries are Brazil, Russia, India, and China. All are experiencing significant economic growth. The correct answer is: They are experiencing significant levels of economic growth.

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Which of the following best describes the direct investment global entry strategy?

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Direct investment involves formation of wholly owned subsidiaries in which the firm retains complete control and ownership. The correct answer is: With direct investment, a firm maintains total ownership of its plants, operation facilities, and offices in a foreign country.

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Globalization refers to the process by which goods, services, capital, people, and ideas

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Goods, services, capital, and people can all flow across national boundaries due to globalization. The correct answer is: flow across national borders.

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Mary wants to sell her products in Europe, since they are doing well in the U.S. She does not have a lot of capital and is risk-averse, so she most likely would choose to begin with

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Exporting is the least financially risky global entry strategy, so Mary most likely would choose this route. The correct answer is: exporting her products.

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In most cases, countries use tariffs to reduce foreign competition, but tariffs are also used

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Tariffs are used primarily to raise the prices of imported goods; however, they can also be used to punish countries engaging in trade practices that are seen as unfair, by making it harder for their goods to find buyers. The correct answer is: as a response to perceived unfair trade practices.

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Unilever discovered that people in emerging economies could not afford to buy standard sizes of toothpaste or shampoo, so Unilever started selling single-serve packets at very low prices. Later, Unilever discovered that the same approach worked in the U.S. and started also selling them there. This is an example of

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In reverse innovation, companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets. The correct answer is: reverse innovation.

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Which of the following is NOT one of the major trade agreements affecting global marketing?

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The GNI is the gross national income, a measure of a country's economic output. The others are trade agreements. The correct answer is: GNI

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When Ben evaluated the commercial infrastructure in Mauritius, he considered the island's

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The commercial infrastructure consists of systems—including legal, banking, and regulatory systems—that allow markets to function. The correct answer is: legal, banking, and regulatory systems.

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Which country's government has recently made significant changes that will modernize the retail environment, such as allowing joint ventures and direct ownership in some cases?

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Foreign retailers that carry multiple brands, like Walmart, are now allowed to own up to 51 percent of joint ventures in India, and retailers that carry only their own brand, like Nike, can now own 100 percent of their Indian businesses. The correct answer is: India

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Which of the following statements best describes global expansion through a strategic alliance?

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A strategic alliance refers to a collaborative relationship that does not create an equity partnership—in other words, the firms do not invest in each other. They may, though, rely on each other to provide certain business functions that an opportunity requires. The correct answer is: A strategic alliance is a relationship in which two firms collaborate on a business opportunity, but do not invest in each other.

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Celia's firm has developed a breakfast cereal targeted toward children. Rather than compete in the mature U.S. market, she has decided instead to introduce the product in Europe, where she feels it will be innovative. Her advertising agency urged caution because

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Regulation of advertising—especially to children—can vary widely from one country to another. The correct answer is: advertising regulations differ in other countries, including advertising to children.

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The most important consideration when a firm chooses a global product strategy should be

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Just as with domestic marketing, all global marketing decisions should consider the needs of the target market. The correct answer is: the needs of the target market.

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Gross national income equals GDP

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Gross national income (GNI) consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy). In other words, U.S. firms that maintain operations abroad count their income from those operations in the GNI but not the GDP. The correct answer is: plus the net investment income earned from abroad.

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Marketers sometimes use Hofstede's cultural dimensions to design marketing campaigns

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Marketers analyze cultures using Hofstede's five dimensions to help them to design culturally appropriate marketing plans based on underlying cultural values. The correct answer is: consistent with underlying cultural values in a country.

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With a median age of 34.1 years, ________ is one of the most rapidly aging countries in the world.

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Marketers analyze cultures using Hofstede's five dimensions to help them to design culturally appropriate marketing plans based on underlying cultural values. The correct answer is: consistent with underlying cultural values in a country.

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When entering into a franchise agreement, what term is used to refer to the firm that is granted the right to operate a business using the franchise name and business concept?

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Franchising is a contractual agreement between a firm, the franchisor, and another firm or individual, the franchisee. The franchisee can operate a business using the name and business format developed and supported by the franchisor. The correct answer is: franchisee

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Economic measures like GDP and GNI do not fully account for a country's economic health because they only measure

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The GDP and GNI look at material output of the economy, failing to take other issues (such as quality of life) into account. The correct answer is: material output.

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Core Publishing Company learned that when selling overseas, local fulfillment can be more cost effective, and it can decrease delivery time and improve customer service. This is an example of a global _________ strategy.

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This is a global distribution strategy as it relates to the distribution channel chosen by Core Publishing Company. The correct answer is: distribution

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As part of efforts to stimulate economic development in Africa, the Gates Foundation announced that it would provide cellular phones to farmer cooperatives. The Gates Foundation recognized problems in __________ exist in many African markets.

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Communication—including telephony—is one aspect of infrastructure analysis. Communication systems are weak in some developing nations. The correct answer is: communication

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Domestic firms developing a global entry strategy might consider franchising; however, the disadvantages need to be considered. Which of these is NOT a disadvantage of franchising?

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Franchising is actually among the lower-risk global expansion strategies. The correct answer is: Franchising is the riskiest way to enter a foreign market.

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The components of global market assessment include all of the following EXCEPT

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The four components of a global market assessment are economic analysis, sociocultural analysis, infrastructure/technology analysis, and analysis of government actions. The correct answer is: ethnic analysis.

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GDP is defined as

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Gross domestic product (GDP) measures the market value of goods and services produced by a country in a year, and is the most widely used of the various economic metrics. The correct answer is: the market value of goods and services produced in a country in a year.

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The United States imports more goods from China than it exports to China. This is known as

answer

Gross domestic product (GDP) measures the market value of goods and services produced by a country in a year, and is the most widely used of the various economic metrics. The correct answer is: the market value of goods and services produced in a country in a year.

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Which of the following is NOT one of Hofstede's cultural dimensions?

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Hofstede's five dimensions are power distance, uncertainty avoidance, individualism, masculinity, and time orientation. The correct answer is: certainty assurance

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Chris is gathering information about the general economic environment in Nepal. He will look for information about the general economic environment, market size and population growth rate, and

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Economic analysis includes metrics such as the general economic environment, market size and population growth, and real income. The correct answer is: real income.

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Once a firm has done an analysis of the most viable markets for its products, then it must next

answer

It must next conduct an internal analysis of its capabilities. This analysis includes an assessment of the firm's access to capital, the current markets it serves, its manufacturing capacity, its proprietary assets, and the commitment of its management to the proposed strategy. The correct answer is: conduct an internal assessment of its capabilities.

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In the 1970s and 1980s, __________ dominated the global marketplace because they could exploit their skills in production, materials management, and new product development.

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Unlike the 1950s and 1960s, when large U.S. firms had the skills needed to dominate global selling, Japanese firms dominated in the 1970s and 1980s through their skills related to production and development. The correct answer is: Japanese firms

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Generally, firms entering foreign markets begin with

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Many firms choose to enter foreign markets first with less risky strategies (such as exporting), moving to riskier strategies as their knowledge and experience grow. The correct answer is: less risky strategies first.

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Which of the following is currently a negative factor for foreign investment in Russia?

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Bribery is widely practiced in Russian business, creating ethical problems for foreign investors. The correct answer is: Russia is known for corruption, creating ethical dilemmas for firms.

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When Ford introduced its Figo in India, it was responding to

answer

A company must continually monitor economic and social trends to protect its position within the market and adjust its products and marketing strategies to meet the changing needs of global markets. In this case, there was a clear trend toward smaller, less expensive cars. The correct answer is: the economic and social trends in India toward small cars.

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Which country is projected to become Europe's largest online market in the next few years, with Internet users growing at a rate of 15 percent annually?

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The text states that Russia is likely to become Europe's largest online market in the next few years. The correct answer is: Russia

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Manufacturers would prefer to produce in a country with a trade __________, because it signals a greater opportunity to export products to more markets.

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A country with a trade surplus does more exporting than importing. This offers an advantage to manufacturers in that country. The correct answer is: surplus

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Of the five strategies for entering new markets, direct investment creates the

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Direct investment is the riskiest strategy for global expansion; however, it also offers the greatest potential rewards. The correct answer is: greatest potential risk.

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Exchange control refers to the regulation of a country's

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Exchange control refers to the regulation of a country's currency exchange rate, the measure of how much one currency is worth in relation to another. The correct answer is: currency exchange rate.

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