Embed Size (px)
DESCRIPTION
TEST BANK
Citation preview
Chapter 1: Introduction to Global Marketing
1. The least complicated form of non-domestic marketing is
Correct A. export marketing.
B. international marketing.
C. multinational marketing.
D. global marketing.
2. In export marketing, the firm concentrates mostly on
A. identifying foreign markets.
Correct B. product modifications.
C. process modifications.
D. choosing the best agents.
3. Understanding different cultural, economic, and political environments is important for a firm undertaking
A. export marketing.
B. international marketing.
C. global marketing.
Correct D. both international and global marketing.
4. Multinational corporations (MNCs) operate in a number of foreign countries as if they were local competitors.
Correct A. True
B. False
5. MNCs traditionally pursue __________ strategies.
A. international
Correct B. multidomestic
C. pan-regional
D. global
6. Which IS NOT a problem when firms pursue multidomestic strategies?
A. Lessons from one market aren't applied in others
B. Product promotion ideas are not shared within the firm
Correct C. Cultural differences are often overlooked
D. Firms fail to take advantage of their global size when negotiating with suppliers
7. Pan-regional marketing strategies take advantage of
A. economies of scale.
B. marketing synergies.
C. political integration.
Correct D. economies of scale, marketing synergies, and political integration.
8. Global marketing strategies attempt to
A. tailor strategies perfectly to each national market.
B. standardize strategies across all markets.
Correct C. establish a basic strategy worldwide but allow for some local adaptation.
D. standardize products worldwide while allowing national subsidiaries to decide.
9. When Philips attacked General Electric (GE) Lighting in the United States, GE responded by
A. lowering prices in the united states.
B. lowering prices in Europe.
C. lowering prices in the united states and lowering prices in Europe.
Correct D. buying a Hungarian lighting company.
10. Hollywood producers sell TV shows overseas because
A. per capita income is increasing.
B. they own the overseas affiliates.
C. their u.s. customers have asked them to do so.
Correct D. the u.s. market won't cover their costs.
Chapter 2: The Global Economy
1. Which country has the lowest imports/GDP ratio?
A. Canada
Correct B. Japan
C. Switzerland
D. United States
2. Income earned on overseas investments is called a (n)
A. remittance.
B. service earning.
C. invisible import.
Correct D. invisible export.
3. Which organization has helped decrease tariffs?
A. GATT
B. WTO
Correct C. GATT and WTO
D. World Bank
4. The theory of comparative advantage was developed in the twentieth century to explain why certain industries moved production to less developed countries.
A. True
Correct B. False
5. Which IS NOT a factor influencing a country's competitive advantage in an industry?
Correct A. Balance of payments
B. Elements of production
C. Nature of domestic demand
D. Presence of related industries
6. Which IS NOT a unilateral transfer?
A. Aid
B. Gifts
Correct C. Investment income
D. Remittances
7. In the balance of payments, stock purchases are never considered direct investments.
A. True
Correct B. False
8. If the Euro's exchange rate changes from 0.50 yen to .65 yen, the euro is said to _____
Correct A. appreciate.
B. depreciate.
C. soften.
D. float.
9. A Brazilian worker can produce either 200 computers or 4,000 lbs. of coffee a year. A Chinese worker can produce 100 computers or 1,000 lbs. of coffee per year. According to the theory of comparative advantage
A. China should trade Brazil coffee for computers
Correct B. Brazil should trade China coffee for computers
C. Brazil should not trade with China
D. Brazil should trade with China, but not trade coffee or computers
10. A surge in oil exports allowed Ecuador to
A. devalue its currency.
B. revalue its currency.
C. hedge its currency.
Correct D. dollarize.
11. Soft currencies are currencies that
A. constantly change value.
B. freely float.
Correct C. attract little global demand.
D. have recently devalued.
12. Which of the following provides assistance to countries that experience temporary balance-of-payments deficits?
Correct A. IMF
B. World Bank
C. European Monetary System
D. Groups of 7
13. In the United States, export tariffs are
A. common.
B. rare.
C. applied to military exports only.
Correct D. prohibited by the constitution.
14. The Omnibus Trade and Competitiveness Act of 1988 gave the U.S. president the right to
A. re-set U.S. balance of payments.
B. restrict remittances from foreigners working in the united states.
C. sign NAFTA.
Correct D. negotiate orderly marketing arrangements.
15. The GATT principal of transparency requires that member countries
A. give MFN status to all other member countries.
B. never give MFN status to non-member countries.
Correct C. make trade restrictions overt.
D. agree to reciprocal reductions in trade barriers.
16. The Battle of Seattle involved protests against the
A. IMF.
B. World Bank.
Correct C. WTO.
D. NAFTA.
17. In NAFTA, member countries agreed to drop trade barriers among themselves, but the agreement does not set common external tariffs.
Correct A. True
B. False
18. Mercosur is a
Correct A. customs union.
B. free trade area.
C. common market.
D. monetary union.
19. In 1999, the European Monetary System became the world's first monetary union.
Correct A. True
B. False
20. For domestic producers, a _________ provides the greatest protection.
A. strong domestic currency
B. tariff
Correct C. quota
D. free trade area
Chapter 6: Global Competitors
1. When BIC uses profits in France to attack Scripto's pen business in Britain this is called
A. targeting global competitors.
B. an extension strategy.
Correct C. cross-country subsidization.
D. a counter parry.
2. A global roll-out is an example of a globally coordinated move involving
A. global competitors.
Correct B. a new product.
C. an extension strategy.
D. pricing policies.
3. In global industries, local firms should consider counter trade or dodger strategies.
Correct A. True
B. False
4. Which of the following IS NOT part of a contender strategy?
Correct A. Expanding into foreign markets similar to the domestic market
B. Investing more in R & D
C. Establishing large-scale production.
D. Raising money through a stock offering
5. When a local firm avoids competition by finding a way to cooperate with its more powerful competitors, this is called a(n)
A. business group.
Correct B. dodger strategy.
C. anti-trust infringement.
D. defender strategy.
6. A defender strategy may be successful when a local firm can leverage
A. knowledge of local tastes.
B. good relations with local distributors.
C. good relations with local subsidiaries.
Correct D. All of these
7. A firm's assets that work well for a defender strategy may also support a(n)
Correct A. extender strategy.
B. contender strategy.
C. dodger strategy.
D. None of these
8. In the past three decades, the most intense competition has been in
A. the European Union.
B. The United States.
Correct C. Japan.
D. developing countries.
9. Europe outlawed cartels before the United States developed its antitrust laws.
A. True
Correct B. False
10. Anti-trust laws in the European Union (EU) focus on
A. protecting consumers from monopolies.
Correct B. guaranteeing fairness among competitors.
C. protecting consumers from monopolies and guaranteeing fairness among competitors.
D. protecting european competition from foreign firms.
11. Fujitsu and Hitachi are examples of
A. Korean business groups.
Correct B. horizontal keiretsus.
C. vertical keiretsus.
D. privatized SOEs.
12. Governments in developing countries sometimes licensed production in order to
A. protect SOEs.
B. discriminate against foreign investors.
C. discriminate against local investors.
Correct D. protect new ventures from intense competition.
13. Encouraging competition where prior monopolies or strict entry controls previously existed is called
Correct A. market liberalization.
B. privatization.
C. trade liberalization.
D. economic development.
14. In 2002, Mexico's antitrust commission found which company guilty of abusing their dominant position in Mexico?
A. Cemex
B. Citibank
Correct C. Coca-Cola
D. Wal-Mart
15. In 1990s many SOEs faced
A. bankruptcy.
B. decreasing ancillary agendas.
Correct C. privatization.
D. increasing ancillary agendas.
16. China and India are two countries in which privatization has been slow.
Correct A. True
B. False
17. A fiduciary bond often replaces equity ownership in a(n)
Correct A. business group.
B. SOE.
C. privatized SOE.
D. global firm.
18. Which IS NOT a characteristic of a business group?
Correct A. Concentration in a single industry
B. Family-ownership to some degree
C. A financial core such as a bank or an insurance company
D. Concentration in its domestic market
19. The positive effect of a country of origin is usually product-specific.
Correct A. True
B. False
20. Which IS NOT true of the country of origin phenomenon?
A. It can be positive or negative
B. Perceptions of countries can change quickly
Correct
C. The home country of the brand's firm is more important than where the product is made
D. All of these are true
Chapter 8: Global Marketing Strategies
1. When a firm responds to unsolicited orders from abroad, we call this
A. pursuing potential abroad.
Correct B. opportunistic expansion.
C. following customers abroad.
D. utilizing an extension strategy.
2. Internationalizing by following customers abroad IS NOT common in which industry
A. accounting.
B. automobile components.
C. consulting.
Correct D. packaged goods.
3. Which market is attractive to Japanese pharmaceutical companies because of its growth rate?
A. China
B. Indonesia
C. EU
Correct D. United States
4. Born global firms are more likely to be
A. fast food franchises.
Correct B. high-tech start-ups.
C. subsidiaries of multinational companies.
D. service firms.
5. Japanese firms tend to begin their internationalization by entering Asian and European markets first and then proceeding to enter the U.S. market.
A. True
Correct B. False
6. Global companies are advised to have strong positions in
A. developed countries.
B. developing countries.
C. developed and developing countries.
Correct D. Europe, Japan, and the United States.
7. Which IS NOT a common characteristic of markets in developing countries compared to markets in developed countries?
A. High growth rates
Correct B. Steady growth
C. Higher risks offset by higher returns
D. A growing middle class
8. Market growth in developing countries may exceed growth in developed countries often as a result of higher population growth.
Correct A. True
B. False
9. The former Soviet Bloc represents about _________ percent of worldwide demand in any industry.
A. 5
Correct B. 15
C. 25
D. 40
10. Eastern European countries such as Poland and the Czech Republic have proven more problematic to Western marketers than Russia.
A. True
Correct B. False
11. Lead markets are usually
Correct A. home markets of global competitors.
B. major growth markets worldwide.
C. major growth markets regionally.
D. None of these
12. Must-win markets are located exclusively in triad countries and are defined as crucial to global market leadership.
A. True
Correct B. False
13. What IS NOT a macroindicator of market size?
A. Climatic conditions
B. Income distribution
C. Telephones
Correct D. Age distribution of the population
14. What IS NOT a microindicator of market size?
A. Scientists and engineers
Correct B. Population growth rate
C. Number of farms
D. Electricity consumption
15. Firms often choose markets similar to their home market because
A. they provide the greatest growth potential.
B. there will be no surprises.
Correct C. domestic success will be more easily transferable to such markets.
D. All of these
16. Which of the following would affect a decision to enter a group of countries in a single geographic region?
A. Economies of scale
B. Critical mass
C. Geographic proximity
Correct D. All of these
17. Coordination of various country strategies is called
Correct A. Integration.
B. Internationalization.
C. Globalization.
D. Standardization.
18. Multidomestic strategies are appropriate for industries where
A. global economies of scale can be realized.
Correct B. buyers vary greatly from country to country.
C. competition is global.
D. All of these
19. Global segment strategies are more common for ____________ firms.
A. packaged foods
B. consumer electronics
Correct C. industrial product
D. automobile
20. Pan-Asian strategies differ from Pan-European strategies in that the countries involved are more similar across Asia than they are across Europe.
A. True
Correct B. False
Chapter 9: Global Market Entry Strategies
1. Indirect exporting ____________
A. yields higher profits for exporting manufacturers than direct exporting because it cuts out the middleman, granting exporting manufacturers more control over the marketing of their products in foreign countries.
Correct
B. enables manufacturers inexperienced in the export process the opportunity to leverage the foreign-market experience, know-how, and contacts of readily available expertise in their domestic markets.
C. allows manufacturers with little export experience the chance to learn first-hand about the local environment and buyer behavior in foreign markets.
D. None of these.
2. Export management companies __________
A. are often utilized by manufacturers with little in-house export experience or
expertise.
B. handle all aspects of export operations, including market research, patent protection, channel credit, logistics, and the actual marketing of the product.
C. can act as a merchant, taking title to the product, or as an agent, receiving a fee or commission on the sale of the product.
Correct D. All of these
3. A company is said to be engaged in direct exporting when it ____________
A. utilizes an intermediary in its domestic market to handle its export operations.
B. employs an export management company.
Correct C. exports to intermediaries located in foreign markets.
D. All of these
4. Which of the following IS NOT a reason why firms grant a license to companies in foreign markets?
A. To facilitate quick market entry for companies producing products with short product lifecycles
B. To enable companies hesitant to invest substantial financial resources in a politically risky country
Correct
C. To signal the firm's long-term market commitment to the local government and consumers
D. All of these
5. When a company grants a franchise in a foreign market_____________
Correct
A. it makes its total marketing program available to the franchisee, including brand name, logo, products, and method of operation.
B. the franchisee manufactures products for the company per the company's specification, sending final products back to the company for resale in the company's domestic market.
C. the company establishes a production plant in the foreign market that is responsible for final assembly of the product.
D. None of these
6. Which of the following IS NOT a reason why firms establish foreign market operations?
A. To establish a strong commitment to the market
B. To follow an important industrial customer that has entered that market
Correct C. To avoid foreign investment incentives, such as tax holidays
D. To take advantage of lower costs of the factors of production (land, labor, capital, etc.)
7. A wholly-owned subsidiary
Correct
A. may be involved in marketing, assembly, or full-scale integrated production operations in the foreign market.
B. is always the least costly way to enter a market.
C. is the less risky and less committed way to enter a market.
D. None of these
8. Companies may choose to create a joint venture because___________
A. the partner may be an important customer who is willing to contract for a portion of the new unit's output in return for equity participation.
B. taking a local partner may be the only foreign investment alternative that the government grants to foreign companies.
C. local partners may have important skills or contacts of value.
Correct D. All of these
9. Joint venture divorces __________ but can ____________
Correct
A. may be necessary if partners disagree about the strategic direction of the joint venture; require an expensive buy-out of the partner.
B. never happen; be a threat that local partners make to acquire greater control from their foreign partners.
C. eventually occur; be stalled if local companies buy nice gifts for their foreign partners.
D. None of these.
10. U.S. multinationals have recently ____________ their reliance on joint ventures because _____________
A. increased; the availability of skilled local partners has increased.
Correct B. decreased; they want to move production to countries where demand is growing.
C. increased; consumers in foreign markets increasingly prefer to purchase goods produced by joint venture partnerships than from wholly owned subsidiaries of foreign companies.
D. None of these.
11. Which of the following IS NOT a type of strategic alliance?
A. A distribution-based alliance
B. A technology-based alliance
C. A production-based alliance.
Correct D. A license-based alliance
12. Entering a market by acquiring a local company is an attractive strategy when _____
A. companies are unsure about investing resources in a politically unstable country.
Correct B. a market is already dominated by established brands.
C. a firm's financial resources are limited.
D. None of these.
13. Bundling refers to _______
Correct A. the process of providing just one legal unit in a given market.
B. entering a market with an extended product line.
C. a special arrangement for master franchises.
D. None of these.
14. Which of the following IS NOT is not an example of a country exiting a market for political considerations?
A. Coca-Cola leaves the Indian market in 1977 because the Indian Exchange Regulation Act required foreign companies to divest themselves of 60 percent ownership in their foreign subsidiaries.
B. The Sainsbury supermarket chain leaves Egypt in 2002 after an organized campaign aimed against the company is orchestrated by anti-Israel protesters.
C. IBM leaves South Africa in the mid-1980s under pressure from consumers in the United States who were against the country's apartheid policies.
Correct D. All of these.
15. Export agents
A. travel around the world, conducting competitive intelligence on competitive product pricing in foreign markets.
Correct
B. focus on the sale and handling of a company's goods in a foreign market typically receiving a fee or a commission on product sales.
C. take title of a company's goods and manage all the aspects of export operations for a company, including marketing research, patent protection, channel credit, shipping, and logistics.
D. None of these
16. Once a company has exited a market, it is impossible to re-enter the market.
A. True
Correct B. False
17. Market consolidation often occurs when an international firm acquires more debt than it can handle.
Correct A. True
B. False
18. Companies competing against each other in their domestic market may unite to address export markets.
Correct A. True
B. False
19. E-commerce activity takes place only in advanced industrialized nations, like the United States.
A. True
Correct B. False
20. The term "strategic alliance" refers to any relationship between firms that exceeds a simple sales transaction but stops short of full-scale merger.
Correct A. True
B. False
Chapter 10: Global Product and Service Strategies
1. Which of the following IS NOT a benefit of product standardization across markets?
A. Lower input costs achieved through volume purchasing
B. Faster global product roll-outs
Correct C. Greater sales achieved by responding to cultural preferences
D. Lower costs of manufacturing through economies of scale
2. Which of the following IS NOT a benefit of product adaptation across markets?
A. Products can be sold for use in different climates
Correct B. Lower costs of manufacturing through economies of scale
C. Greater sales may be attained by better meeting industry norms
D. Product costs may be decreased be eliminating unnecessary product features
3. Product standards are becoming increasingly standardized across national markets in part because the
A. United States has pressured other nations to adopt the simple standard-setting processes it employs.
B. International Standards Organization insures that all nations employ the product standard system established by Japan in 1973.
C. EU member states have been unable to unify any of their pre-unification product standards.
Correct
D. Universal standards make it easier to enter markets globally with a standardized product.
4. A globally recognized brand name an asset because____
A. it can help consumers make choices faster and more easily.
B. it enable consumers to better identify the product.
C. it enhance the product's credibility in the eyes of the consumer.
Correct D. All of these.
5. Global brand names may be created by__________
Correct
A. choosing an arbitrary or invented word that cannot be found in any dictionary of standard English (or other language).
B. translating the English-language (or foreign-language) brand into the languages of local markets.
C. selecting an Assyrian-language brand name.
D. None of these.
6. Tracking systems enable companies to___________
A. preempt counterfeits.
Correct B. assess global brand identity across markets.
C. establish international standards.
D. leverage the product life cycle.
7. A trademark is said to be preempted when____________
A. it is copyrighted and then is plagiarized.
Correct
B. a local individual or business registers it in their country before the real owner of the brand does.
C. another manufacturer tries to make their mark look very similar to the legitimate brand.
D. All of these.
8. Product piracy_______
A. flourishes in countries where legal protection is strong.
B. usually plagues producers of food and beverage products.
C. has decreased due to the development of the internet.
Correct D. None of these.
9. Product packaging and labeling adaptations may be necessary in foreign markets because_____________
A. international standards clearly require standardized packaging and labeling requirements in all markets.
B. consumers in rich and poor countries alike require the same product size.
Correct
C. materials typically used for packaging and labeling the product may differ from country to country.
D. colors like red and blue—often used in product packaging and labeling—mean the same thing in all cultures.
10. Products __________; but services __________
Correct A. can often be stored; are perishable.
B. require simultaneous production and consumption; require production and consumption at different points in time.
C. are not readily displayed or communicated; are tangible.
D. are heterogeneous; can be delivered with standardized, consistent quality.
11. In China fast food restaurant personnel regularly pay personal visits to customers' table, welcoming their guests and inquiring about food and service quality. In the United States fast food restaurant personnel rarely leave the service counter and typically only interact with customers when they leave the service counter to clean the dining area. This is an example of____________
A. international product standards.
B. differing time perceptions across markets.
C. tangible services.
Correct D. cultural differences in service expectations.
12. Culture may complicate efforts to standardize service delivery worldwide because it affects consumers'__________
A. perceptions of acceptable waiting time before being served.
B. expectations regarding service personnel's gender and social class.
C. willingness to stand in line.
Correct D. All of these
13. Comprehensive warranties and service polices can be important marketing tools for companies entering foreign markets because__________
Correct
A. buyers may want extra assurance that the foreign manufacturer will back the product.
B. most governments require foreign manufacturers to provide them.
C. foreign companies find it difficult to acquire access to local media channels without them.
D. comprehensive warranties and service policies are easier to standardize and implement across markets.
14. Product lines in large markets, such as Germany, Japan, and the United States, tend to be ________ because _________
A. narrow; niche target segments are small.
B. homogeneous; niche target segments are large.
C. wide; niche target segments are small.
Correct D. None of these.
15. International marketers can exploit the product life cycle by____________
Correct
A. expanding into new markets to compensate for declining growth rates in mature markets.
B. introducing the product in all markets at the same time.
C. debugging and refining new products in developing countries.
D. encouraging products to enter into the mature phase simultaneously across markets.
16. A Chinese textile manufacturer seeking to penetrate the US market looks at the US Customs web site and learns all textiles imported into the United States from China must include a "Made in China" label sewn into the seam of the product. To successfully enter the US market, the Chinese manufacturer will make a discretionary adaptation.
A. True
Correct B. False
17. The top global brands are dominated by US and European brands.
Correct A. True
B. False
18. Branding in Asia may rely more on the visual appeal of logos than on brand names.
Correct A. True
B. False
19. In bottom-up approaches to global brand strategy, country strategies are derived from a global brand strategy devised by a global management team.
A. True
Correct B. False
20. Trade in business services has traditionally taken place in developed economies; but many services are entering into developing markets, often to provide services to the subsidiaries of multinational companies.
Correct A. True
B. False
Chapter 11: Developing New Products for Global Markets
1. Traditionally a company follows one of three basic strategies when introducing products into a foreign market. These strategies are ___________________
A. ally, franchise, and license.
Correct B. invention, extension, and adaptation.
C. consortia, lead market, and concept test.
D. None of these.
2. When entering a market with a new product, companies may choose to extend both the existing product strategy and the communication strategy into the foreign market if__________
A. the physical event surrounding product use varies but the socio-cultural environment is the same as in the country's home market.
Correct
B. product functions, consumer needs, use conditions, andconsumers' ability to buy are approximately the same across markets.
C. the reasons for buying a product differ but the use, conditions, and standards remain identical.
D. both product use conditions and socio-cultural concerns vary.
3. When entering a market with a new product, companies may choose to extend the existing product strategy and adapt the communication strategy into the foreign market if_____________
A. the physical event surrounding product use varies but the socio-cultural environment is the same as in the country's home market.
B. product functions, consumer needs, use conditions, and consumers' ability to buy are approximately the same across markets.
Correct
C. the reasons for buying a product differ but the use conditions and standards remain identical.
D. both product use conditions and socio-cultural concerns vary.
4. When entering a market with a new product, companies may choose to extend the existing product strategy and adapt the communication strategy into the foreign market if_____________
A. the physical event surrounding product use varies but the socio-cultural environment is the same as in the country's home market.
B. product functions, consumer needs, use conditions, and consumers' ability to buy are approximately the same across markets.
Correct
C. the reasons for buying a product differ but the use conditions and standards remain identical.
D. both product use conditions and socio-cultural concerns vary.
5. The market research team at Campbell Soup Company. discovers that processed soup flavors and ingredients vary market to market. They also learn that family meals are important to consumers in some markets, but in other markets, consumers are more concerned with quick meal preparation. Given this information, which of the following new product introduction strategies would you recommend to Campbell Soup?
A. Product adaptation-communications extension
B. Product extension-communications extension
C. Product extension-communications adaptation
Correct D. Product adaptation-communications adaptation
6. The Ford Escort _________
Correct A. is an example of increasing modularity in the world car industry.
B. is an example of increasing local adaptation and tailoring in the world car industry.
C. is an example of increasing franchise behavior in the world car industry.
D. is an example of increasing communications extension in the world car industry.
7. Which of the following IS NOT an advantage of centralizing research and development in the domestic market?
A. It maximizes scarce research funds
B. It prevents possible duplication of efforts across subsidiaries
C. It is easier to integrate research and development activities into corporate strategy when the research and development department is in close contact to strategic decision-makers
Correct
D. It makes it possible to employ the world's smartest people; the most intelligent scientists can only be found in the home market
8. The United States is the lead market for which of the following industries?
A. Textiles
B. Steel
C. Automobiles
Correct D. Biosciences
9. GM's "project center" concept
Correct A. was developed to help the company develop a better global product.
B. enabled the company to purchase higher-quality research and development from their subsidiaries.
C. helped the company identify potential companies for acquisition in foreign markets.
D. None of these
10. Japanese firms are reported to have invested $350 million to purchase minority equity positions in U.S.-based technology firms to get access to new products. These purchases are examples of________________
A. franchising as a route to new products.
Correct B. acquisitions as a route to new products.
C. importing as a route to new products.
D. consortium as a route to new products.
11. Some firms join in a working relationship without forming a new entity to jointly develop new products. On completion of the assigned task, member firms are free to seek other relationships with different firms. This is an example of a(n) _______
Correct A. consortium.
B. license.
C. master franchise.
D. acquisition.
12. CPC International set out to investigate U.S. market potential for dehydrated soups made by its newly acquired Knorr subsidiary. Prior to introducing the Knorr product line in the United States, the company conducted several taste tests in malls and other public spaces to ensure that the final product suited U.S. consumer tastes. This ____________ failed to _____________
Correct A. concept test; subject the new product to actual use conditions.
B. test market; measure consumer satisfaction with the product.
C. implementer; establish a lead market role for the subsidiary.
D. communications adaptation; extend the product line.
13. Polaroid used __________ as a test market for its pocket camera after an executive on a trip to that country observed teenage girls cramming into photo booths to take instant minipictures.
A. Singapore
B. Lesotho
Correct C. Japan
D. Russia
14. Global launches are often ____________ because_____________
Correct
A. challenging; it is logistically difficult to coordinate new product introductions across multiple markets.
B. easy; increasingly large and capable foreign subsidiaries are able to execute new
product introductions smoothly.
C. cheap; developing country governments often subsidizes a company's global launch efforts.
D. None of these
15. As American car makers have moved increasingly toward the _________ of their products worldwide, Japanese car makers have intensified their efforts to _________ their products in foreign markets.
Correct A. modularization; adapt
B. adaptation; standardize
C. modularlization; standardize
D. standardization; modularlize
16. Today, there is increasingly less time to commercialize products before their patents expire or competitors come out with a similar product.
Correct A. True
B. False
17. The shift from global to local development requires consideration of unique or special conditions for major markets at the very beginning of product development.
Correct A. True
B. False
18. "Lead market" is the term used to refer to the first market a company selects to introduce its first new product.
A. True
Correct B. False
19. Global products are 100 percent standardized products.
A. True
Correct B. False
20. New product invention in a foreign market may be necessary if consumer's ability to buy existing products is low.
Correct A. True
B. False
Chapter 12: Pricing for International and Global Markets
1. Which of the following contribute to price escalation in foreign markets?
A. Costs of modifying products for foreign tastes and preferences
B. Costs of the export operation, such as export personnel, market research, transportation, and insurance
C. Costs incurred during foreign market entry, such as tariffs and taxes
Correct D. All of these
2. Which of the following is the reason why distribution channel structure can affect the final price of the product?
Correct
A. Each channel member typically adds a distribution margin to the product price as the product moves along the channel.
B. Each channel member will be required to pay a tariff.
C. Each channel member must participate in the creation of a marketing strategy.
D. None of these.
3. Buyers can be powerful price negotiators when _________
A. there are a few large buyers in a national industry.
Correct B. there are many small buyers in the national industry.
C. there are many medium-sized buyers in the national industry.
D. None of these.
4. Two countries, the United States and Britain, produce one good - beef. Suppose the price of beef in the United States today is $2.80 per pound of beef, and in Britain it is £3.70 per pound of beef. In a year, the price of beef is expected to rise to $3.10 in the United States and to £4.65 in Britain. The spot exchange rate should be calculated as:
Correct A. 2.80/3.70 = .76$/£.
B. 3.10/4.65 = .67$/£
C. 2.80/4.65 = .60$/£
D. 3.70/3.10 = 1.19$/£
5. When an exporting company quotes the price of an export in the customer's national currency, he/she runs the risk that a change in exchange rates may occur between the invoicing date and the settlement date. This is an example of _____
A. operational risk.
B. credit risk.
Correct C. transaction risk.
D. rating risk.
6. When a company opts to contract through a financial intermediary for the future delivery of foreign currency at a set price instead of accepting whatever spot market rate exists on the settlement in 30 or 90 days it is called _______
A. playing the gray market.
Correct B. hedging.
C. speculation.
D. taking a rating risk.
7. Pharmaceuticals face strong ____________ in European markets.
A. exchange rate fluctuations
B. transaction risk
Correct C. price controls
D. transfer prices
8. The practice of selling a product at a price below cost is referred to as _______
A. skimming.
B. penetration pricing.
C. price control.
Correct D. dumping.
9. A _________________ is the price paid by the importing or buying unit of a firm to the exporting unit of the same firm.
A. translation price
Correct B. transfer price
C. tariff price
D. vat price
10. Vakko silk scarves are much cheaper in their home market of Turkey than in their Saudi Arabian export market. A frequent traveler between Turkey and Saudi Arabia buys the cheaper scarves in Istanbul and sells them in Saudi Arabia at much lower prices than the scarves are selling for in Saudi Arabian stores. This is an example of
A. smuggling.
Correct B. parallel imports.
C. hedging.
D. transfer pricing.
11. Gray markets can be hurtful to exporting manufacturers because they
Correct A. can harm the manufacturer's relationship with legitimate, authorized dealers.
B. may create currency fluctuations between the invoicing date and the settlement date.
C. require manufacturers to pay vat taxes.
D. All of these
12. Which of the following describes a way to combat parallel importing?
A. Cut prices in higher-priced markets
B. Limit supplies to wholesalers in lower-priced markets
C. Acquire the individual or entity involved in diverting the product supply
Correct D. All of these
13. When a customer is not able to arrange hard-currency financing, he/she might offer a product in return. This is an example of ________
A. modified uniform pricing.
B. translation risk.
C. transaction risk.
Correct D. countertrade.
14. Saudi Arabia purchased 10 jet airplanes with crude oil. This is an example of _________
Correct A. bartering.
B. a compensation arrangement.
C. a buyback.
D. a switch trade.
15. An Australian textile machinery company sells a Kazakh wool yarn producer a yarn bundling machine. The Kazakh wool yarn producer pays for the machine with a large shipment of bundled yarn that is produced by the Australian machine. This is an example of________
A. bartering.
B. a compensation arrangement.
Correct C. a buyback.
D. a switch trade.
16. The income level of a country affects the appropriate pricing strategy for that market because they determine the amount and type of goods and services bought in that country, particularly in consumer markets.
Correct A. True
B. False
17. Different taxes, trade margins, and customs duties across foreign markets make a uniform pricing strategy challenging.
Correct A. True
B. False
18. The fact that the cost of a product's components may change through time is one of the reasons why a marginal-pricing strategy is preferred to full-cost pricing.
Correct A. True
B. False
19. Fixed costs vary directly with output.
A. True
Correct B. False
20. To the IRS, market pricing is the preferred method of transfer pricing, but cost-plus markups will be accepted by the IRS if market prices are not available.
Correct A. True
B. False
Chapter 13: Managing Global Distribution Channels
1. Distribution channel members are not only located in foreign markets. Some manufacturers also incorporate channel members in their home markets, such as _______
A. foreign wholesalers.
B. foreign retailers.
C. import agents.
Correct D. export management companies.
2. In _________ manufacturers typically play the role of channel captain but wholesalers are most often the channel captain in ____________ distribution systems.
A. Europe; American
Correct B. The United States; Japanese
C. Europe; Russian
D. Canada; American
3. Extensive distribution is appropriate for ___________
A. perishable goods.
Correct B. convenience goods.
C. technical goods.
D. luxury goods.
4. Which of the following affects distribution channel length?
A. The average order quantity
B. The availability of channel members
C. A product's distribution density
Correct D. All of these
5. Distribution logistics costs include ___________
Correct A. transportation expenses, storage costs, and the costs of breaking bulk.
B. costs of company's salespeople, sales managers, and travel expenses.
C. sales commissions for export management companies.
D. None of these.
6. The Agent Distributor Service locates distributors and agents interested in a particular product line. This service is provided by ____________
A. International trade shows.
Correct B. the U.S. Department of Commerce.
C. Citibank.
D. None of these.
7. Programs to motivate foreign independent intermediaries are likely to succeed if monetary incentives are considered along with _______________
A. sales commissions and fees.
B. travel to deserted islands.
Correct C. close communication and training.
D. All of these.
8. ___________ is one of the common ways manufacturers cause channel conflict.
A. Oversaturating the market with too many distributors
B. Bypassing channels to sell directly to large customers
C. Opening new discount channels that offer the same goods at lower prices
Correct D. All of these.
9. World2Market.com is a web site that
Correct A. sells handicrafts made by artisans in developing countries.
B. helps manufacturers identify reliable distributors.
C. creates virtual trade fairs.
D. None of these.
10. When a new entrant into a market cannot easily convince any channel to participate and distribute their product, the channel is said to be _____
Correct A. locked up.
B. piggybacked.
C. dense.
D. None of these
11. Company A and Company B sell complementary products to the same target segments. When Company A contracts with Company B to distribute Company A's products through Company B's distribution channel, it is called ___________
A. a slotted exchange.
B. a joint venture.
C. just-in-time distribution.
Correct D. piggybacking.
12. Modes of transportation appropriate for long transit times are ________
A. air and truck.
B. spaceship and rocket.
Correct C. shipping and rail.
D. None of these.
13. The just-in-time inventory strategy has many benefits, including
Correct A. a reduced number of suppliers and improved quality control.
B. greater retailer margins.
C. leveraging piggyback arrangements.
D. All of these.
14. The increased popularity of large-scale retailers, such as IKEA, is a result of which of the following trends?
A. An increase in car ownership
B. An increase in the number of households with freezers and refrigerators
C. An increase in the number of working wives
Correct D. All of these
15. American retailers have entered foreign markets ________ their European and Japanese counterparts.
A. before
Correct B. after
C. less successfully than
D. None of these
16. Wal-Mart has experienced substantial challenges in the German market because____
Correct A. Germans do not appreciate Wal-Mart's friendly customer service practices.
B. extraordinarily long distribution channels in Germany have prevented Wal-Mart from offering the substantial price savings it provides customers in other markets.
C. Wal-Mart has struggled to compete with IKEA in the Germany market.
D. None of these
17. The illegal transport of products across national borders is called __________
A. parallel importing.
Correct B. smuggling.
C. hedging.
D. piracy.
18. As countries become more economically developed, the retail scene comes to be dominated by fewer, larger stores.
Correct A. True
B. False
19. In Japan, foreign firms are expected to commit themselves to a long-term relationship with their distributor. If a firm terminates its distributor, it reflects poorly on that firm.
Correct A. True
B. False
20. A limited product line more attractive to channel members means easier to justify a direct channel.
A. True
Correct B. False
21. The size and accessibility of retail channels vary greatly by country.
Correct A. True
B. False
Chapter 14: Global Promotion Strategies
1. A(n) _________ promotional strategy is characterized by a relatively greater dependence on promotion, such as sales promotions and advertising, directed at the final buyer or end-user for a product or service.
A. integrated
B. push
C. languid
Correct D. pull
2. Mavi Jeans focuses its promotional strategy on the distributors of their products. This type of promotional strategy is called ______________
A. integrated.
Correct B. push.
C. languid.
D. pull.
3. When a company's sales force travels across countries and meets directly with clients abroad, its practicing _____________
Correct A. international selling.
B. cross-company selling.
C. local selling.
D. matrix selling.
4. One of the challenges of global selling in business-to-business sales is that ________________
Correct A. actual decision makers may hold different positions from country to country.
B. distribution channels are much longer than in business-to-consumer selling.
C. gatekeepers are always the decision makers.
D. personal selling is less effective than in business-to-consumer selling.
5. Global marketers selling to many markets are likely to encounter a diverse set of business practices as they move from one country. For example, in China__________
A. it is considered impolite to show the bottom of your shoe.
B. PowerPoint presentations are only displayed in black-and-white.
Correct
C. visiting businesspeople must attend long banquets when engaging in sales negotiations.
D. All of these
6. International marketers can obtain information about the business customs in foreign markets from _________
A. their company's foreign market representatives or sales subsidiary.
B. global accounting firms.
C. international banks.
Correct D. All of these
7. Cultural norms in international sales negotiations vary from country to country. A 15-year study of negotiation styles in seventeen cultures found that in _________ negotiation styles were the least aggressive and sales people used few threats or warnings but in ___________ they were intensely aggressive and threats and warnings from salespeople were common.
A. France; Japan
B. Russia; the United States
Correct C. Japan; France
D. None of these
8. A ______________ concentrates on visiting clients together with the local distributor's sales force.
Correct A. missionary sales force
B. rotary sales force
C. company-owned local sales force
D. double-blind sales force
9. Recruiting sales professionals in foreign markets can be challenging because
A. there are few people outside the developed world with the strong math skills necessary for the job.
Correct B. sales positions do not enjoy uniformly high esteem country to country.
C. few people outside the united states speak English.
D. LCD projectors necessary for good PowerPoint presentations are hard to find in emerging markets.
10. Jorge Vergara started his own nutritional supplements company, Omnilife, and decided to reward his salespeople differently than his competitor, Herbalife. Instead of rewarding on the basis of sales volume, he rewarded salespersons who sold consistently. This is an example of a ____________
A. telemarketing adaptation.
B. slotting allowance adaptation.
Correct C. compensation scheme adaptation.
D. premium adaptation.
11. During the pre-qualifying phase of a business-to-business bidding process, _________
A. companies soliciting a bid utilize their network of agents, contacts, or former customers to inform them of a new project open for bidding.
B. bidding companies submit a written proposal to the company soliciting the bid and describe how they will solve the soliciting company's problem and the price that they will charge for doing so.
Correct
C. the company soliciting the bid asks potential bidding companies to submit documents to describe their background and capabilities.
D. the company soliciting the bid often requires a performance bond be paid.
12. A ________ is a payment made to retailers in return for their agreeing to take a new product
Correct A. slotting allowance.
B. performance bond.
C. premium.
D. sponsorship.
13. To take advantage of global sports events, a company must ______________
A. establish personal contact with Michael Jordan.
B. insure that they receive a slotting allowance prior to signing a contract.
Correct C. have a recognizable logo and a brand name.
D. None of these
14. A McDonald's franchise in Indonesia donates food and dining facilities to local Islamic institutions. This is an example of _________________
A. publicity.
Correct B. public relations.
C. integrated marketing.
D. buzz marketing.
15. Telemarketing faces challenges in the European Union because__________
A. Europeans do not trust salespeople over the phone.
B. recently Brazilian telemarketers have broken long-established social norms in the European Union by making sales calls during the dinner hour.
Correct
C. European consumers may place their name in a telephone preference list to eliminate telemarketing calls to their homes.
D. All of these
16. There is little opportunity to standardize sales promotion techniques across many markets.
Correct A. True
B. False
17. A performance bond is paid for by the company that is receiving and selecting bids for a business-to-business sale.
A. True
Correct B. False
18. A company may participate in a trade fair to break into a new market, showcase or demonstrate new products, and check up on the competition.
Correct A. True
B. False
19. Japanese customers often judge whether a company really wants to do business by the frequency of the sales calls they receive.
Correct A. True
B. False
20. Since English is widely spoken in Europe and is the leading second language in Asia and Latin America, it is not necessary for international marketers to learn a foreign language.
A. True
Correct B. False
Chapter 15: Managing Global Advertising
1. Most translation blunders are the result of ____________
A. the use of domestic advertising agencies.
Correct B. literal translations performed outside the target country.
C. college graduates employed by advertising agencies.
D. None of these
2. Many advertisers in the European Union emphasize visual communication rather than verbal because_____________
Correct A. there are nine official spoken languages in the European union.
B. government regulations require 50 percent non-verbal content.
C. the soft-sell advertising technique is more effective in the European union.
D. All of these
3. In a major re-branding campaign for the Mars candy bar, outdoor billboards ran the slogan "Saturday 3PM" in Britain, "August" in France, and "The last parking space" in Germany. The purpose of the slogans was to evoke consumer______________
A. feelings of hostility through the use of country-specific, anger-provoking phrases.
B. curiosity through the use of meaningless phrases.
Correct C. feelings of pleasure through the use of country-specific positive phrases.
D. hunger through the use of country-specific, come-to-dinner phrases.
4. Many countries impose strict regulations on advertisers. For example in China, advertisers ____________
A. must employ 50 percent non-verbal content in their print advertisements.
Correct B. are forbidden to use superlative adjectives in any advertisement.
C. are prohibited from showing ads of women in sleeveless dresses.
D. must place the Chinese flag into any print advertisement.
5. When a company selects some features as standard for all its advertisements but localizes other features, it is called a ______________.
Correct A. modularized approach
B. global theme.
C. universal theme.
D. visual technique.
6. A global advertising campaign requires _______________.
A. taking into account various levels of customer awareness of the product in each market.
B. a standardized brand name or trademark in each market.
C. a brand name that is pronounced identically in each market.
Correct D. All of these
7. Which of the following countries is known as the "land of the soft sell?"
A. Canada
B. France
Correct C. Japan
D. Russia
8. Soft selling means that advertising takes a(n) _________________.
A. humor-oriented approach, commonly incorporating localized jokes into the slogans.
B. factual approach, comparing specific product attributes to competitive products.
C. abstract approach, drawing upon the influence of genius abstract painters, such as Jackson Pollack.
Correct
D. image-oriented approach, rarely mentioning the product's price or discrediting the products of competing firms.
9. "The last hundred years of western advertising [experience] has been compressed into just four year for us" describes the advertising experience of ______________
A. the Arab Middle East.
Correct B. Eastern Europe.
C. Central America.
D. Southeast Asia.
10. It is difficult to use the same media in each country because__________
A. there are radically different literacy rates in many parts of the world.
B. the usage of radio varies considerably from one country to another.
C. there are different levels of television ownership around the world.
Correct D. All of these
11. The click-through rate for Internet banner ads in ____________ is much higher than in Britain and the United States.
A. Canada
Correct B. Hong Kong
C. Germany
D. All of these.
12. When scheduling international advertising to consumers, marketers must take into consideration ______________
Correct A. climatic seasons.
B. government budgetary cycles.
C. the missionary sales force schedule.
D. All of these
13. When a company starts to grown internationally, it is not unusual for a(n) ___________ to handle its international advertising.
Correct A. domestic advertising agency
B. local advertising agency
C. international advertising network
D. None of these
14. Companies with extensive international operations may find it too difficult and cumbersome to deal simultaneously with a large number of advertising agencies. To simplify the process, these companies may employ a(n) ___________
A. domestic advertising agency.
B. local advertising agency.
Correct C. international advertising network.
D. None of these
15. A(n) __________________ is expected to understand the local environment fully and is in a position to create advertisements targeted to the local market.
A. domestic advertising agency
Correct B. local advertising agency
C. international advertising network
D. None of these
16. If a company is competing everywhere against a small set of international firms, the company is more apt to centralize its advertising decisions rather than delegating them to local subsidiaries.
Correct A. True
B. False
17. Because globalization has developed uniform availability of media around the world, a company can now expect to use its preferred medium to the fullest extent everywhere.
A. True
Correct B. False
18. All of the Top 25 Global Marketers spend the greatest percentage of their advertising expenditures in the United States.
A. True
Correct B. False
19. Countries view the value of advertising in very different ways.
Correct A. True
B. False
20. Benetton's "United Colors of Benetton" campaign that portrayed a black woman breast-feeding a white baby was universally hailed as an example of the transnational appeal, attractiveness, and persuasiveness of non-verbal advertising.
A. True
Correct B. False
