Chapter 8 - BA 370 - Flashcards

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Firms would prefer to manufacture in a country that has a trade surplus, or a higher level of exports than imports.

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True

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The greater the wealth of a country, generally, the better the opportunity a firm will have in that particular country.

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True

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The Big Mac Index is a measure of economic health in a country.

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False

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Colin wants information about the infrastructure in the countries his company is planning to export to, so he should gather information about the transportation and communications capabilities in each country.

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True

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Tariffs artificially lower prices and therefore lower demand.

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False

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Among the various international trade agreements, the North American Free Trade Agreement represents the highest level of integration across individual nations.

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False

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The BRIC countries are Bolivia, Russia, Italy, and China.

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False

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Even as growth in its gross domestic product has slowed, China maintains a thriving retail market, likely to reach the $8 trillion mark soon and surpass the United States as the world's largest.

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True

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India is one of the fastest-growing markets and has one of the youngest populations in the world.

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True

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Brazil is characterized by strong upper and lower classes, but the middle class has declined in recent years.

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False

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Russia lags behind most European countries in use of the Internet.

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False

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Global expansion often begins when a firm receives an order for its product from another country.

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True

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Exporting refers to a situation where a company maintains ownership of its plants, operational facilities, and offices in a foreign country in which it sells its products.

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False

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In a joint venture, the burden of ownership, control, and profits is not shared.

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False

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Entering into a global franchise agreement exposes a company to higher risk than if the company had entered into direct investment in the country.

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False

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There is only one global product strategy: to sell a product or service similar to that sold in the home country, but include minor adaptations.

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False

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An effective global pricing strategy can be easily established by setting the same prices in every market around the world.

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False

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Globalization refers to a global marketing strategy in which each of the four Ps is customized for each country.

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False

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To maximize potential, segments and target markets can and should be defined by more than just geography.

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True

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In parts of Europe, including Belgium, Italy, Spain, Greece, and France, sales are allowed only twice a year, in January and June or July.

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True

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Firms with global appeal can run global advertising campaigns and simply translate the wording in the advertisements and product labeling.

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True

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Global distribution networks that involve middlemen, exporters, importers, and different transportation systems generally lower costs and prices for products.

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false

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Sophia owns a string of boutiques in Italy. As such she is allowed to have sales only twice a year, in January and June or July.

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True

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A consumer products company produces inexpensive goods in underdeveloped markets, then repackages them as cost-effective innovations for Western buyers. This is an example of globalization.

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False

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Direct investment offers the firm complete control over its operations in the foreign country.

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True

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

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flow across national borders.

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

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ethnic analysis.

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

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real income

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To determine the market potential for its particular product or service, a firm should use

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as many metrics as it can obtain.

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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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surplus

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The most common measure of market potential of an economy is a country's

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GDP

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GDP is defined as

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the market value of goods and services produced in a country in a year.

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Gross national income consists of GDP

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plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy).

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The Big Mac Index is a novel measure of

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purchasing power parity.

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According to purchasing power parity theory, if __________ is(are) in equilibrium, products will cost the same in each country.

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exchange rates

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

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material output

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Today, many developed countries are experiencing __________ population growth.

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zero or negative

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Cory is working on a global marketing assessment team looking out well into the future to help determine the most attractive market areas around the world. He is evaluating market sizes and growth rates. Based on population growth rates in different regions, he should consider that

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countries with high purchasing power today may not continue to show the same growth in the future.

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The shift of population from rural to urban areas in countries such as India helps global marketers by

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simplifying the supply chain needed to make goods and services available.

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When considering global marketing opportunities in Bangladesh, Tom asked the question, "How will we get it there?" Tom is concerned about __________ capabilities in Bangladesh.

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infrastructure

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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 that problems in __________ exist in many African markets.

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communication

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

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legal, banking, and regulatory systems.

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Changes in tariffs and quotas are

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government actions that reduce competition from international firms.

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Tariffs protect domestic producers by

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making imported products more expensive.

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

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as a response to perceived unfair trade practices.

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A __________ limits the quantity of imported merchandise, thus minimizing competition faced by domestic products.

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quota

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When the U.S. government determined the prices of solar panels imported from China were artificially low due to illegal subsidies, it imposed a ______ to help domestic firms compete.

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tariff

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When the value of the dollar declines in relation to other currencies, it benefits U.S. marketers who

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export goods to other countries.

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All of the following are major trade agreements affecting global marketing except

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GNI

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Marketers considering operations and trade with a specific country must consider whether or not the country belongs to a trading bloc. A trading bloc is a group of countries

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that have established a formal agreement to manage trade activities.

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Which of these trade agreements represents the highest level of integration among participating nations?

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EU

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Global businesses often find it particularly difficult to understand the __________ of a country's culture.

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underlying values

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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 to sociocultural factors. He was looking at both __________ and __________.

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visible artifacts; underlying values

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Geert Hofstede's cultural dimensions concept focuses on five dimensions of __________ in a country.

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underlying values

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All of the following are included in Hofstede's cultural dimensions except

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certainty assurance.

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

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consistent with underlying cultural values in a country.

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Culture affects

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every aspect of consumers' purchase decisions.

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Generally, firms entering foreign markets begin with

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less risky strategies first.

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When entering a foreign market, the least risky strategy is

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exporting

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Global expansion often begins with

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exporting of goods

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Many of the best-known American retailers, like Starbucks and McDonald's, have contractual agreements with another firm or individuals, allowing its businesses to operate overseas. These companies expanded globally using

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franchising

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Gerald is assessing global entry strategies for his gourmet sandwich business. He does not want to take a lot of risk and he is willing to limit his control of international stores. Gerald will most likely use a(n) __________ strategy.

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franchising

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Domestic firms developing a global entry strategy might consider franchising; however, the disadvantages need to be considered. All of the following are disadvantages of franchising except

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Franchising is the riskiest way to enter a foreign market.

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When a firm pools its resources with that of a local firm to enter a new market, they create a(n)

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joint venture

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India, like some other countries, may require entering firms to create _________ when expanding into their markets, limiting outsiders' control of businesses.

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joint ventures

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

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greatest potential risk

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NCD Company wants to expand into the Mexican market. It has the financial resources, wants to control business operations, and has had considerable success marketing to Hispanics in the United States. NCD will likely use __________ to expand into the Mexican market.

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direct investment

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Global segmentation, targeting, and positioning (STP) are more complicated than local STP, in part because

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consumers may view their roles differently in different countries.

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As noted in your text, global segmenting, targeting, and positioning are more complicated than domestic segmenting and positioning because of cultural nuances, significant subcultures within countries, and

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differences in the way consumers see themselves and in the way they see products and services.

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Cultural nuances, subcultures, and consumers' different views of their roles in different countries can make __________ complicated.

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segmentation, targeting, and positioning

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Which of the following statements regarding global segmentation, targeting, and positioning is true?

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Companies must continually adjust products and marketing strategies to meet the changing needs of global markets.

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Which of the following are the two components of a global marketing strategy?

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determining which target markets to pursue and developing a marketing mix to obtain a competitive advantage

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

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the needs of the target market.

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Tariffs, quotas, and currency exchange policies affect global

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pricing strategies.

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Global pricing strategies should strive to be consistent with

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positioning strategies.

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Global marketers are under constant pressure to simplify distribution channels in order to

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reduce costs.

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Global marketers typically find distribution in developing countries is more complex because

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they must go through many different types of distribution channels.

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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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differences in languages, customs, and culture might make the campaign meaningless and ineffective in some markets.

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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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advertising regulations differ in other countries, including advertising to children.

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Brands can be extremely valuable domestically, but challenging internationally. Companies can help overcome language difficulties in using brands by

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developing brand names that have no preexisting meaning in any known language.

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Which of the following is one of the global entry strategies?

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direct investment

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When a company decides to minimize risk and enter a global market by shipping its products to buyers in other countries, this is known as

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exporting

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

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With direct investment, a firm maintains total ownership of its plants, operation facilities, and offices in a foreign country.

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The term trade deficit refers to

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higher levels of imports than exports.

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When shopping for a car you notice a significant price gap between domestic and imported cars, with the imported cars being much more expensive. This could be the result of

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a tariff

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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?

answer

franchise

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

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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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The XYZ Company is collaborating with a competitor on a globally based opportunity for mutual benefit, but the two competitors are not investing in one another. This is an example of

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a strategic alliance

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

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a trade deficit

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When Ford Motor Company decided to sell the Fiesta—in the same form and design—around the globe, instead of selling different versions in different countries, this was part of Ford's global ________ strategy.

answer

product

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When Cisco Systems Inc. of San Jose, California, and Tata Consultancy Services of Mumbai, India, entered into a relationship, they both continued to develop market-ready infrastructure and network solutions for customers, but they relied on each other to provide the training and skills that one or the other might have lacked. This relationship is best described as

answer

a strategic alliance

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Ford Motor Company decided to sell the Fiesta around the globe. Which of the following would be an example of globalization of the Fiesta?

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The same product design and features in all countries, with variations in the promotional campaigns country by country.

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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, with the goal of helping them 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.

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Despite multiple upturns and downturns in its economy, Russia's overall growth prospects appear promising, especially as a consumer market. However, there are still multiple dilemmas for firms trying to market their goods and services. These dilemmas include all of the following Russia's

answer

involvement in China.

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What do the BRIC countries have in common?

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They are experiencing significant levels of economic growth.

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

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Russia is known for corruption, creating ethical dilemmas for firms.

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

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India's retail environment lacks modern supply chain management facilities and systems.

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Which of the following is a potential negative factor for foreign investment in China?

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China's population is aging and is likely to continue to do so for many years.

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A company is assessing opportunities in the BRIC companies and determines that _________ is one of the youngest populations in the world and is increasingly adopting global attitudes.

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India

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Why should marketers be aware of the BRIC countries?

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They are likely to be the source of most market growth.

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Which statement about India's population is true?

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India's workforce is highly skilled, particularly in technical fields.

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A publishing company plans to outsource its production-related tasks to a BRIC country. They are assessing opportunities and are attracted to this country due to its population of young, well-educated, technically-skilled workers who are fluent in English.

answer

India

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Which of the following statements is true with regard to growth in global markets?

answer

Changes in technology, especially communications, have been a driving force for growth in global markets for decades.

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A U.S. company is analyzing its business prospects in Brazil. Marketing executives understand which of the following statements to be true regarding this market?

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In Brazil, Facebook has 65 million members, making it the company's second-largest market, behind the United States.

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Which country is Europe's largest Internet market, with Internet users growing at a rate of 10 percent annually?

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Russia

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A U.S. firm is analyzing its business prospects in China. Marketing executives understand which of the following to be true of this potential market?

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China's strict censorship rules present serious challenges; a post on Facebook could lead to jail time.

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Which country has embraced market-oriented economic development in spite of maintaining communist political ideals?

answer

China

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Which country has a rapidly aging population due to its one-child policy?

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China

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

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conduct an internal assessment of its capabilities.

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

answer

exporting her products

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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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open a McDonald's franchise.

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Sydney's Emporium has 59 stores in the United States and wants to expand globally. Sydney's wants to achieve the highest possible returns, and is not concerned about pursuing a high-risk strategy as long as it maintains complete control over its stores. The best global entry strategy for Sydney's is most likely

answer

direct investment

question

When Porsche filmed an advertisement in which its vehicles ran over the Great Wall of China, Chinese consumers were left more confused than intrigued. To address or avoid such issues, one important cultural classification scheme that firms can use is Geert Hofstede's cultural dimensions concept. Hofstede proposes that cultures differ on all of the following dimensions except

answer

collectivism

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If you visit a Kentucky Fried Chicken restaurant in China, along with KFC's regular menu items, 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?

answer

sell totally new products or services

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According to Hofstede's cultural dimensions concept, which BRIC country posts notably high scores in the dimensions of uncertainty avoidance and power distance?

answer

Russia

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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

answer

globalization

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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 United States and started also selling them there. This is an example of

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reverse innovation

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

answer

distribution

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In China, state control of media is high, so companies are challenged to find ways to get their message to customers. This demonstrates one of the difficulties in crafting a global ________ strategy.

answer

communication

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China has three main languages, and many more dialects. This presents a particular challenge to developing a global ________ strategy.

answer

communication

Chapter 8 – BA 370 – Flashcards

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