marketing ch 15 – Flashcards
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A country in South America has large reserves of copper and tin. Mining forms the pillar of its economy. A major part of its revenue is generated from exporting these resources. This country is poor in many other ways. It is a good market for large equipment, tools and supplies, and trucks. Since there are many foreign residents in this country and a wealthy upper class, it is also a market for luxury goods. This country has a(n) ________ economy.
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raw material exporting
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An emerging economy is one in which ________.
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fast growth in manufacturing results in rapid overall economic growth
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________ means marketing a product in a foreign market without making any changes to the product.
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Straight product extension
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________ ventures consist of one company collaborating with foreign investors to create a local business in which they share possession and control.
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Joint ownership
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Which of the following is true of the World Trade Organization (WTO)?
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The WTO mediates global trade disputes.
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Which of the following is a type of joint venture?
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management contracting
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The ________ replaced GATT in 1995 and now oversees the original GATT provisions.
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World Trade Organization
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________ is a method of entering a foreign market by associating with foreign companies to produce or market products or services.
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Joint venturing
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An emerging economy is also known as a(n) ________ economy.
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industrializing
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Lemon N' Honey is a juice manufacturing company in the U.S. It exports its products to Australia, licenses to China, has a joint ownership venture in France, and owns a subsidiary in Brazil. It will eventually create a(n) ________ to handle all its worldwide activities.
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international division
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Which of the following is true of the Uruguay Round of the WTO?
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The Uruguay Round toughened the international protection of copyrights and patents.
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Japan is a major exporter of manufactured goods, services, and investment funds. Japan also exports its goods to other types of economies for raw materials and semifinished goods. Japan has a(n) ________ economy.
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b. industrial d. subsistence
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Pizza House, a leading Italian restaurant, recently opened a new restaurant in New York called Papa James. The property is locally owned, but Pizza House operates the restaurant with its world-renowned culinary expertise. Pizza House has used the ________ method of entering the foreign market
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a. management contracting b. direct investment c. contract manufacturing
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Which of the following is a disadvantage of straight product extension?
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c. Straight product extension can be costly in the long run if products fail to satisfy consumers.
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________ is a method of entering a foreign market by developing foreign-based assembly or manufacturing facilities.
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a. Licensing b. Management contracting c. Indirect exporting e. Direct investment
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Which of the following is true of free trade zones?
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a. Free trade zones are groups of nations organized to work toward common goals in the regulation of international trade.
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Compared to adapted global marketing, standardized global marketing ________.
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a. produces a larger market share c. basically uses the same marketing strategy approach worldwide d. involves adjusting the marketing mix elements to target markets e. usually results in higher returns
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Which of the following is a benefit of joint ownership?
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The companies merge their complementary strengths to develop a global marketing opportunity.
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Which of the following is a drawback of management contracting?
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a. Management contracting is a high-risk method of getting into a foreign market. b. Management contracting prevents the company from setting up its own operations for a period of time. d. Management contracting does not provide the option of buying shares in the managed company.
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________ are operating units responsible for worldwide sales of collections of merchandise, which are similar in nature.
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World product groups
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Which of the following is true of exporting?
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a. Exporting is the most complex way to enter a foreign market. . c. Exporting involves the least change in the company's product lines. e. Exporting usually offers more control over pricing.
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In managing their international marketing activities, most companies first organize a(n) ________.
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a. geographical organization c. export department d. international subsidiary e. world product group
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Which of the following is an accurate statement about a truly global organization?
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b. An export department is adequate to manage this organization. c. Executives are trained in worldwide operations, not just domestic or international operations. . e. A truly global organization considers itself as a national marketer who sells abroad.
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Leonards, a leading French garment manufacturing company, is looking for ways to go global. Penny, a designer from California, wishes to open a fashion boutique in the neighborhood, and gain production expertise and name without having to invest significantly. She learns about Leonards' global expansion plans, and buys the right to use its manufacturing process for a royalty fee. This allows it to gain entry into a foreign market at little risk. Leonards has used the ________ method of entering a foreign market.
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licensing
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________ are a type of operating unit under an international division that are responsible for their own sales and profits.
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a. Geographical organizations b. International subsidiaries c. Global organizations d. World product groups
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A firm normally gets into international marketing by ________
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a. simply shipping out its goods b. acquiring a foreign company c. establishing an export department e. organizing an international division
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Licensing is a type of ________.
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b. contract manufacturing c. Greenfield investment e. joint venture
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Which of the following is a benefit of contract manufacturing?
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a. Contract manufacturing does not require an overseas marketing organization or network. b. Contract manufacturing helps the company make greater profits on manufacturing. c. The home company keeps full control over the manufacturing process. d. Contract manufacturing gives the company a chance to start faster, with less risk.
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Which of the following is a major disadvantage of direct investment for the domestic company?
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a. The returns are lesser as compared to exporting. b. The firm eventually loses control over the investment. d. Due to a lack of control, the firm is unable to develop marketing policies that serve its long-term international objectives. e. The firm faces many risks such as falling markets or government changes.
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Which of the following is true of a global firm?
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A global firm manufactures and markets goods wherever it can do the best job.
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Kimlee, a company based in China, is a global leader in manufacturing and marketing noodles. It recognizes the immense demand for noodles in the Australian market. Wanley, a producer of noodles in Australia, has a deeper understanding of the Australian market. Kimlee believes that together, each can accomplish more than either could alone. Hence, both the companies decide to form a new business venture in which they share possession and control. Which method of entering a foreign market has Kimlee chosen?
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a. contract manufacturing b. management contracting d. licensing e. joint ownership
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The similarity between an industrializing economy and an industrial economy is that both ________.
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are importers of raw materials
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Which of the following is an advantage of direct investment?
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The firm keeps full control over the investment.
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Which of the following is true of communication adaptation for a company entering a foreign market?
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a. A strategy of fully modifying advertising messages to local markets is used. b. As media availability is similar across countries, media need not be adapted internationally. . d. Cultural differences are seen as a negligible necessity in the process. e. Language adjustments are considered unimportant.
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________ is a method of going global in which the company makes agreements with producers in the foreign market to produce its product or provide its service.
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a. Acquisition c. Contract manufacturing d. Management contracting e. Direct investment
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Which of the following is a disadvantage of licensing?
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b. The company gains entry into a foreign market at a high risk. c. When the contract ends, the firm may find that it has created a competitor in the licensee. d. Licensing is a complex way for a manufacturer to enter international marketing. e. It takes a lot of time for the licensee to gain production expertise and name.
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One of the disadvantages of adapted global marketing when compared to standardized global marketing is that ________.
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a. adapted global marketing results in more costs c. the returns are lesser d. products and marketing approaches remain the same worldwide e. the strategies are not tailored to the needs of the target customers
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In management contracting, the domestic firm ________.
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a. exports both management services and products c. exports management services rather than products e. provides only capital to the foreign company
