Chapter 8 practice questions – Flashcards
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Most Americans tend to take access to global products and services for granted.
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T
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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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T
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The Big Mac Index is a measure of economic health in a country.
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F
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Colin wants information about the infrastructure in the countries his company is planning to export to. He will gather information about the transportation and communications capabilities in each country.
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T
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Tariffs artificially lower prices and therefore lower demand.
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F
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The North American Free Trade Agreement represents the highest level of integration among the various international trade agreements.
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F
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The BRIC countries are Bolivia, Russia, Italy and China.
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F
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China is now the second-largest economy and the third-largest market for U.S. exports.
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T
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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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T
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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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F
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Russia lags behind most European countries in use of the Internet.
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F
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Global expansion often begins when a firm receives an order for its product from another country.
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T
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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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F
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In a joint venture, the burden of ownership, control, and profits is not shared.
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F
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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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F
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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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F
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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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F
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Glocalization refers to a global marketing strategy in which each of the four Ps is customized for each country.
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F
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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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T
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The EU recently recommended common guidelines for its member countries regarding advertising to children.
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T
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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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T
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Using middlemen in global distribution networks generally lowers costs and prices for products.
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F
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Sophia owns a string of boutiques in Italy. As such, she is only allowed to have sales twice a year, in January and June or July.
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T
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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 glocalization.
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F
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Direct investment offers the firm complete control over its operations in the foreign country.
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T
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Globalization refers to the process by which goods, services, capital, people, and ideas A. are onshored and offshored. B. flow across national borders. C. are integrated through IMF facilitation. D. form joint ventures. E. affect corporate culture.
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B
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The components of global market assessment include all of the following EXCEPT A. ethnic analysis. B. infrastructure and technology analysis. C. analysis of government actions. D. sociocultural analysis. E. economic analysis.
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A
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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 A. culture. B. real income. C. airport capabilities. D. political status. E. religious institutions.
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B
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To determine the market potential for its particular product or service, a firm should use A. GDP data. B. unemployment data. C. purchasing power parity data. D. inflation data. E. as many metrics as it can obtain.
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E
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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. A. surplus B. deficit C. culture D. bonus E. balance
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A
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The most common measure of market potential of an economy is a country's A. GNI. B. GDP. C. PPP. D. CPI. E. APR.
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B
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GDP is defined as A. the value of a country's exports minus its imports. B. great domestic product. C. the market value of goods and services produced in a country in a year. D. national income minus national taxes. E. the gross purchasing power of domestic goods and services plus international income.
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C
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Gross national income equals GDP A. minus net consumer spending. B. plus government spending on international trade. C. minus purchasing power parity. D. plus the net investment income earned from abroad. E. plus gross domestic international investment.
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D
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The Big Mac Index is a novel measure of A. GDP. B. purchasing power parity. C. per capita GNI. D. economic growth. E. international trade surplus.
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B
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According to purchasing power parity theory, if __________ is/are in equilibrium, products will cost the same in each country. A. imports and exports B. consumer spending C. interest rates D. domestic products E. exchange rates
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E
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Economic measures like GDP and GNI do not fully account for a country's economic health because they only measure A. material output. B. international trade. C. global expectations. D. purchasing power parity. E. poverty potential.
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A
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Many developed countries are experiencing __________ population growth. A. slight B. zero or negative C. infinite D. moderate E. significant
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B
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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 A. countries with high purchasing power today may not continue to show the same growth in the future. B. the United States and Western Europe will have dramatic increases in population growth leading to overcrowding. C. the middle class in India will continue to shrink as the rich get richer and the poor get poorer. D. urban population centers will become increasing unattractive and the rural areas will experience major growth in population. E. the global population is expected to grow at staggering rates indefinitely.
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A
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The shift of population from rural to urban areas in countries such as India helps global marketers by A. decreasing pollution. B. simplifying the supply chain needed to make goods and services available. C. increasing the human development index. D. decreasing competition for intellectual capital. E. increasing nonmaterial GDP output.
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B
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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. A. production capacity B. pricing C. advertising D. infrastructure E. cultural
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D
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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. A. transportation B. communication C. distribution D. commerce E. population
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B
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When Ben evaluated the commercial infrastructure in Mauritius, he considered the island's A. population control measures. B. legal, banking, and regulatory systems. C. retailing capabilities. D. per capita income estimates. E. climate and culture.
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B
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Changes in tariffs and quotas are A. business actions stimulating imports. B. corporate strategies designed to maximize profits. C. government actions that reduce competition from international firms. D. efforts to stimulate choices among government agencies. E. a means of slowing outsourcing.
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C
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Tariffs protect domestic producers by A. making imported products more expensive. B. increasing brand recognition. C. reducing the cost of production. D. offering subsidies to exports. E. avoiding regulation.
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A
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In most cases, countries use tariffs to reduce foreign competition, but tariffs are also used A. to shorten supply chains. B. as a response to perceived unfair trade practices. C. to offer domestic discounts. D. to stimulate consumer demand. E. as a way to equalize quotas.
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B
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A __________ limits the quantity of imported merchandise, thus minimizing competition faced by domestic products. A. tariff B. duty C. trading bloc D. trade agreement E. quota
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E
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Exchange control refers to the regulation of a country's A. comparative inflation rate. B. countertrade exchange. C. quota rate of exchange. D. exchange tariffs. E. currency exchange rate.
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E
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When the value of the dollar declines in relation to other currencies, it benefits U.S. marketers who A. export goods to other countries. B. import goods from other countries. C. engage in countertrade. D. enforce import quotas. E. outsource labor.
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A
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Which of the following is NOT one of the major trade agreements affecting global marketing? A. NAFTA B. EU C. GNI D. ASEAN E. CAFTA
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C
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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 A. that have established a formal agreement to manage trade activities. B. using the same currency. C. with similar cultural shopping patterns. D. located next to each other. E. with similar political views.
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A
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Which of these trade agreements represents the highest level of integration among participating nations? A. NAFTA B. EU C. GNI D. ASEAN E. CAFTA
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B
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Global businesses often find it particularly difficult to understand the __________ of a country's culture. A. symbols B. underlying values C. ceremonies D. dress E. visible artifacts
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B
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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 __________. A. product uses; currency rates B. language; trading blocs and social structure C. potential tariffs; symbols D. visible artifacts; underlying values E. verbal communication; logistics
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D
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Geert Hofstede's cultural dimensions concept focuses on five dimensions of __________ in a country. A. symbols B. underlying values C. ceremonies D. dress E. visible artifacts
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B
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Which of the following is NOT one of Hofstede's cultural dimensions? A. power distance B. certainty assurance C. masculinity D. individualism E. time orientation
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B
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Marketers sometimes use Hofstede's cultural dimensions to design marketing campaigns A. with low individualism symbolism when confronted with a time oriented culture. B. using uncertainty avoidance to reduce power distance. C. with significant power distance. D. consistent with underlying cultural values in a country. E. with more consistent time orientation.
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D
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Culture affects A. how consumers decide to make their purchases. B. what consumers decide to purchase. C. when consumers decide to make their purchases. D. where consumers decide to make their purchases. E. every aspect of consumers' purchase decisions.
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E
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Generally, firms entering foreign markets begin with A. less risky strategies first. B. direct investment. C. importing. D. decentralized production. E. cultural output.
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A
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When entering a foreign market, the least risky strategy is A. franchising. B. exporting. C. joint venture. D. direct investment. E. strategic alliance.
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B
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Global expansion often begins with A. franchising. B. an order from another country. C. joint ventures. D. direct investment. E. strategic alliances.
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B
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Many of the best-known American retailers, like Starbucks and McDonalds, have expanded globally using A. franchising. B. exporting. C. joint ventures. D. direct investment. E. strategic alliances.
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A
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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 likely use a(n) __________ strategy. A. franchising B. exporting C. joint venture D. direct investment E. strategic alliance
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A
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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? A. The franchisor has limited ability to ensure that foreign operations follow all the concepts and ideas that made the firm successful domestically. B. The franchisor might end up becoming a competitor. C. Franchising limits profit potential, since profits will have to be split with the franchisee. D. Franchising is the riskiest way to enter a foreign market. E. All of these are disadvantages a firm must consider.
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D
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When firms pool their resources to enter a new market, they create a(n) A. franchise. B. export promotion. C. joint venture. D. direct investment. E. strategic alliance.
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C
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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. A. franchises B. export promotions C. joint ventures D. direct investments E. strategic alliances
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C
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Of the five strategies for entering new markets, direct investment creates the A. least investment cost. B. greatest potential risk. C. most franchisee control. D. best opportunity for strong strategic alliances. E. greatest coordination of efforts of global and local partners.
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B
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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. A. franchising B. exporting C. a joint venture D. direct investment E. a strategic alliance
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D
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Global segmentation, targeting, and positioning (STP) are more complicated than local STP, in part because A. consumers may view their roles differently in different countries. B. there are fewer franchising opportunities in global markets. C. global consumer markets are almost totally homogeneous, making segmentation difficult. D. most governments have rules against targeting consumers. E. positioning almost always fails when attempted in a foreign country.
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A
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Global segmenting, targeting, and positioning are more complicated than domestic segmenting and positioning because of cultural nuances, significant subcultures within countries, and A. currency differences. B. anti-discrimination regulations prohibiting segmentation and targeting in developing countries. C. differences in the way consumers see themselves and in the way they see products and services. D. complications due to franchising issues. E. the taxes imposed by some foreign countries on marketing activities.
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C
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Cultural nuances, subcultures, and consumers' different views of their roles in different countries can make __________ complicated. A. purchasing power parity B. segmentation, targeting, and positioning C. trading bloc coordination D. exchange control planning E. reducing trade surpluses
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B
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During the early stages of globalization, in the 1950s and 1960s, _______________ were uniquely positioned in the global marketplace because they had the skills necessary to develop, promote, and market brand name consumer products. A. large U.S. firms B. Japanese electronics companies C. low-cost Chinese manufacturers D. European service companies E. Mideast oil producers
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A
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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. A. large U.S. firms B. Japanese firms C. low-cost Chinese manufacturers D. European service companies E. Mideast oil producers
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B
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The most important consideration when a firm chooses a global product strategy should be A. opportunities for countertrade. B. the effectiveness of the marketing team. C. the needs of the target market. D. the provisions of GATT. E. WTO regulations.
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C
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Tariffs, quotas, and currency exchange policies affect global A. offshore product design. B. pricing strategies. C. advertising. D. logistics. E. promotion.
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B
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Global pricing strategies should be consistent with A. offshore distribution facilities. B. cost of materials. C. positioning strategies. D. domestic pricing. E. trade surplus guidelines.
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C
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Global marketers are under constant pressure to shorten distribution channels to A. improve promotion efficiency. B. reduce trade deficits. C. afford tariffs. D. meet trade agreement guidelines. E. reduce costs.
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E
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Global marketers typically find distribution in developing countries is more complex because A. they must go through many types of distribution channels. B. distribution is more heavily regulated in developing countries. C. most consumers in developing countries live in densely populated cities. D. the infrastructure is more advanced in most developing countries. E. consumers in developing countries have very specific preferences.
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A
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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 A. differences in languages, customs, and culture might make the campaign meaningless and ineffective in some markets. B. copyright and intellectual property concerns prevented him from wanting to share his good ideas outside of the U.S. market. C. he had not applied for or received international certification that was required for working outside the United States. D. he was unfamiliar with the code of ethics for advertising in other countries. E. he did not have the budget for a global rollout.
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A
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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 A. advertising regulations differ in other countries, including advertising to children. B. print media are different in Europe, and it would be difficult to create a global campaign. C. literacy rates are significantly lower in Europe, and print ads would be ineffective. D. research indicates that European children do not eat breakfast as often as American children. E. domestic advertising agencies cannot earn commissions on advertising they place overseas.
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A
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Brands can be extremely valuable domestically, but challenging internationally. Companies can help to overcome language difficulties in using brands by A. keeping the brand name the same in all languages, regardless of meanings, as long as the brand logo and symbol are displayed prominently. B. avoiding the use of the brand name in advertising and focusing on feature and benefits. C. translating advertising copy for the entire ad except the brand name. D. developing brand names that are meaningless in known languages. E. adhering to the UN Convention on Naming Rights.
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D
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Which of the following is one of the global entry strategies? A. direct investment B. countertrade C. offshoring D. infrastructure development E. trade agreements
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A
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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 A. exporting. B. franchising. C. a strategic alliance. D. a joint venture. E. direct investment.
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A
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Which of the following best describes the direct investment global entry strategy? A. With direct investment, a firm maintains total ownership of its plants, operation facilities, and offices in a foreign country. B. Direct investment occurs when a firm enters a new market by pooling its resources with those of a local firm to form a new company in which ownership, control, and profits are shared. C. Direct investment refers to depositing payroll funds in a foreign bank. D. Direct investment designates the maximum quantity of a product that may be brought into a country during a specified time period. E. Direct investment occurs when a producer sells its offering in a foreign market at a price less than its production cost.
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A
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The term "trade deficit" refers to A. a country that exports more goods than it imports. B. an indicator of the quality of life in a country. C. a level of population growth that affects exports. D. the sum of all goods and services handled in a country. E. higher levels of imports than exports.
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E
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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 A. a tariff. B. a boycott. C. overseas consolidation. D. globalization. E. franchising.
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A
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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? A. franchisee B. franchisor C. franchise agent D. franchise partner E. franchised owner
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A
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Which of the following statements best describes global expansion through a strategic alliance? A. In a strategic alliance, a firm enters a new market and forms a new company with shared ownership, profits, and controls. B. A strategic alliance is a relationship in which two firms collaborate on a business opportunity, but do not invest in each other. C. In a strategic alliance, two firms enter into a franchise agreement. D. In a strategic alliance, a firm in one country sends products to a firm in another country. E. In a strategic alliance, a firm signs a trade agreement with a firm in another country.
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B
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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? A. franchising B. joint venture C. strategic alliance D. direct investment E. equity partnership
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C
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The United States imports more goods from China than it exports to China. This is known as A. gross national income (GNI). B. a trade surplus. C. gross domestic product (GDP). D. a trade deficit. E. an import imbalance.
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D
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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. A. communication B. pricing C. distribution D. exchange E. product
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E
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Which of the following trade agreements is designed to manage and promote trade activities for the United States, Canada, and Mexico? A. NAFTA B. EU C. CAFTA D. Mercosur E. ASEAN
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A
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Ford Motor Company decided to sell the Fiesta around the globe. Which of the following would be an example of glocalization of the Fiesta? A. The same product design and features, and the same basic promotional campaign, used in all countries. B. Variations in the product design country by country, with the same basic promotional campaign used in all countries. C. The same product design and features in all countries, with variations in the promotional campaigns country by country. D. Variations in the product design and the promotional campaign country by country. E. The same marketing mix for all of the four Ps used in all countries.
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C
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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 A. glocalization. B. reverse innovation. C. franchising. D. a strategic alliance. E. purchasing power parity.
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B
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Which of these is NOT one of the BRIC countries? A. Bulgaria B. Russia C. India D. China E. These are all BRIC countries.
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A
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What do the BRIC countries have in common? A. They participate together in a trading bloc. B. They have suffered more than most other countries in the recent recession. C. They are Asian countries experiencing explosive population growth. D. They are the four countries known for the highest levels of bribery in business and government. E. They are experiencing significant levels of economic growth.
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E
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Which of the following is currently a negative factor for foreign investment in Russia? A. The Russian population is poorly educated. B. Russian consumers have little interest in online shopping. C. Russia is known for corruption, creating ethical dilemmas for firms. D. Russian consumer markets are saturated, offering few opportunities for goods from U.S. companies to sell well. E. Few Russians have access to the Internet due to heavy regulation.
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C
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Which of the following is currently a negative factor for foreign investment in India? A. India's population is fairly old and aging fast. B. India's infrastructure for supply chain management is not up to date. C. India prevents foreign investors from entering into joint ventures. D. India has no shopping malls or other large commercial centers. E. India lacks a skilled workforce.
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B
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Which of the following is a potential negative factor for foreign investment in China? A. China's population is aging rapidly. B. China drastically restricts the goods it allows U.S. companies to export to China. C. China's standard of living has dropped over the past 30 years. D. China has imported fewer goods from the U.S. each year for the past decade. E. Chinese consumers are not interested in purchasing products from the U.S.
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A
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Which of the BRIC countries has the highest illiteracy rate? A. Russia B. Brazil C. India D. Italy E. China
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C
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Why should marketers be aware of the BRIC countries? A. They are a microcosm of the rest of the world. B. They represent almost half the the world's population. C. They are likely to be the source of most market growth. D. They have had the most dramatic changes in culture and consumer buying patterns. E. They have stable population growth, which makes them easier to study.
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C
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Which statement about India's population is TRUE? A. With a median age of 61, India has one of the oldest populations in the world. B. India's young people mostly live in rural areas in large families. C. India's workforce is highly skilled, particularly in technology. D. India claims more than 25% of the world's population. E. Most Indian citizens shop in large retail outlets.
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C
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With a median age of 34.1 years, ________ is one of the most rapidly aging countries in the world. A. Russia B. China C. Brazil D. India E. Chile
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B
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Changes in _________ have been a driving force for growth in global markets for decades. A. infrastructure B. demographics C. population D. technology E. ethical standards
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D
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Which country has a large literate population, which has helped it move up to become the world's seventh largest economy? A. Russia B. China C. Brazil D. India E. United States
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C
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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? A. Great Britain B. Spain C. France D. Germany E. Russia
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E
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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? A. Brazil B. Russia C. India D. China E. Mexico
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C
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Which country has embraced market-oriented economic development in spite of maintaining communist political ideals? A. Brazil B. Russia C. Iran D. China E. Afghanistan
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D
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Which country has a rapidly aging population due to its one-child policy? A. Brazil B. Russia C. India D. China E. Japan
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D
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Once a firm has done an analysis of the most viable markets for its products, then it must next A. determine the competition and develop strategies to overcome it. B. conduct an internal assessment of its capabilities. C. conduct an external analysis of the target market's economy, culture, and regulatory barriers. D. develop a product to meet the needs of those markets. E. achieve success with the product in its home market.
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B
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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 A. opening a franchise. B. exporting her products. C. a strategic alliance with another company. D. a joint venture with a local firm. E. direct investment in another country.
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B
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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 A. open a McDonald's franchise. B. directly invest in McDonald's. C. export McDonald's products to other countries. D. form a strategic alliance with McDonald's. E. form a joint venture with McDonald's.
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A
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Sydney's Emporium has 59 stores in the U.S. 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 A. exporting. B. a strategic alliance. C. a joint venture. D. direct investment. E. franchising.
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D
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When Ford introduced its Figo in India, it was responding to A. increased competition in the small car market. B. India's movement away from small cars. C. the economic and social trends in India toward small cars. D. the new middle class in India who prefer status cars. E. an increased need for large trucks to accommodate the burgeoning construction trade in India.
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C
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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? A. Sell the same products in both the home country market and the host country. B. Sell only products native to the home country. C. Sell a product similar to that sold in the home country, but include minor adaptations. D. Sell only products native to the various global markets. E. Sell totally new products or services.
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E
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Franz lives in a country where he and his friends have disposable income, in spite of the fact that their average income is $650 per month, because they have no debt and don't save money. Franz most likely lives in A. Brazil. B. Russia. C. India. D. China. E. Japan.
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B
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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 A. cultural shift. B. glocalization. C. ethnic sensitivity. D. promotional flex. E. unethical marketing practices.
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B
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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 A. reverse innovation. B. glocalization. C. ethnic sensitivity. D. promotional flex. E. unethical marketing practices.
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A
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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. A. communication B. product C. promotion D. distribution E. pricing
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D
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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. A. communication B. product C. cultural D. distribution E. pricing
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A
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China has three main languages, and many more dialects. This presents a particular challenge to developing a global ________ strategy. A. communication B. product C. cultural D. distribution E. pricing
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A
