Chapter 7 Exam Questions Understanding And Reaching Global

Chapter 07

Understanding and Reaching Global Consumers and Markets

Multiple Choice Questions

Why did Dell, Inc., embark on a global growth initiative?

A.	U.S. sales had decreased.

B.	Dell was recently purchased by Lenovo, a major Chinese competitor.

C.	There was too much competition in Dell's direct-to-consumer marketing channel.

D.	There were fewer restrictions in computer technology outside the United States.

E.	Emerging economies offered significant growth potential.

In what way is Dell's expansion into the global arena a departure from its prior marketing practices?

A.	All Dell products were manufactured in the countries within which they were sold.

B.	Dell sold its products to emerging markets using the telephone and Internet sales strategy that was so successful in the United States.

C.	Dell opened shop-within-a-shop counters in selected retailers in India so shoppers could experience the products.

D.	Dell sold only laptops in China, whereas it sold both desktops and laptops in India due to trade restrictions in China.

E.	Dell designed and distributed the same products globally to take advantage of economies of scale.

Dell established its company primarily with direct telephone- and Internet-based sales. In terms of Dell's global expansion strategy, which of the following statements is most accurate?

A.	Dell sells its computers via word of mouth, which is the most powerful method for consumer electronics.

B.	Dell partners with each country's largest department stores and sells its computers in the small appliance department.

C.	Dell issues its own credit card through multinational banks, making it possible for customers who would not normally qualify for credit to do so.

D.	Dell distributes its products through individual sales associates who reach out to customers with a first-hand experience at their doorsteps.

E.	Dell maintains the exact same U.S. strategies that brought it this far because it sees no reason to change.

All nations and regions of the world do not participate equally in world trade. World trade flows reflect

A.	the influences of culture and language.

B.	the differences among industries, countries, and regions.

C.	interdependencies among industries, countries, and regions.

D.	the challenges of currency and exchange imbalances.

E.	the increasing importance of services verses products.

A country's imports

A.	stimulate the imports of other countries.

B.	have no affect on its exports.

C.	have no relationship with its balance of payments.

D.	affect its exports and exports affect its imports.

E.	over time will decrease its overall economic activity.

An estimated 10 to 15 percent of world trade involves __________, the practice of using barter rather than money for making global sales.

A.	cross trade

B.	countertrade

C.	exchange trade

D.	trade feedback

E.	market trading

The balance of trade is the

A.	difference between the monetary value of a nation's exports and imports.

B.	sum of the monetary value of a nation's exports and imports.

C.	monetary value of a nation's exports divided by its imports.

D.	surplus that occurs when nations engage in exporting.

E.	difference between a country's services and goods exports.

When a country's exports exceed its imports,

A.	it incurs a deficit in its balance of trade.

B.	the result is the trade feedback effect.

C.	it will try to rebalance its overall economy.

D.	it will attempt to engage in a trade war.

E.	it incurs a surplus in its balance of trade.

Five trends in the past decade have significantly influenced the landscape of global marketing. One of them is

A.	an increase in most countries' GDP coupled with an increased degree of consumer ethnocentrism.

B.	a significant increase in economic protectionism and a decline in free trade.

C.	a more aggressive attitude toward initiating international tariffs and quota systems.

D.	a decrease in most countries' GDP and a renewal of nationalism.

E.	a decline in economic protectionism by individual countries.

10.

Five trends in the past decade have significantly influenced the landscape of global marketing. One of them is

A.	the rise of economic integration and free trade among nations.

B.	an increase in economic protectionism and a decline in free trade.

C.	a more aggressive attitude toward initiating international tariffs and quota systems.

D.	a decrease in most countries' GDP and a renewal of nationalism.

E.	an increase in most countries' GDP coupled with an increased degree of consumer ethnocentrism.

11.

Five trends in the past decade have significantly influenced the landscape of global marketing. One of them is

A.	an increase in economic protectionism and a decline in free trade.

B.	a more aggressive attitude toward initiating international tariffs and quota systems.

C.	global competition among global companies for global customers.

D.	a decrease in most countries' GDP and a renewal of nationalism.

E.	an increase in most countries' GDP coupled with an increased degree of consumer ethnocentrism.

12.

Five trends in the past decade have significantly influenced the landscape of global marketing. One of them is

A.	an increase in economic protectionism and a decline free trade.

B.	a more aggressive attitude toward initiating international tariffs and quota systems.

C.	a decrease in most countries' GDP and a renewal of nationalism.

D.	the emergence of networked global marketspace.

E.	an increase in most countries' GDP coupled with an increased degree of consumer ethnocentrism.

13.

The practice of shielding one or more sectors of a country's economy from foreign competition through the use of tariffs or quotas is referred to as

A.	domestic imperialism.

B.	protectionism.

C.	blocked competition.

D.	import taxation.

E.	trade restriction.

14.

Those in favor of protectionism argue that it

A.	helps reduce tariffs and quotas.

B.	encourages the development of domestic industries.

C.	encourages economic reliance on foreign countries.

D.	creates opportunities for the outsourcing of domestic jobs.

E.	creates a more favorable environment for a global economy.

15.

Beginning January 1, 2005, China removed import quotas and lowered tariffs on automobiles. This removal of quotas and the lowering of tariffs is an example of

A.	relaxing the rule of eminent domain.

B.	reducing ethnocentrism.

C.	enhancing domestic imperialism.

D.	reducing protectionism.

E.	enhancing countertrade.

16.

Which of the following issues raises concerns about the ethics of protectionism?

A.	Competitive advantage grows out of continuous improvement.

B.	Small firms succeed in foreign niche markets.

C.	Tariffs have declined from an average of 40 percent to less than 5 percent.

D.	Regional trade agreements may provide preferential treatment for member nations.

E.	Pan-European marketing strategies are possible due to greater uniformity in packaging standards.

17.

Protectionism leads to

A.	an increase in world trade.

B.	possible profits for domestic producers.

C.	an increase in exports.

D.	an increase in imports.

E.	countertrade.

18.

Government taxes on products or services entering a country that primarily serve to raise prices on imports are referred to as

tariffs.

quotas.

C.	WTO taxes.

D.	foreign excise taxes.

E.	trade subsidies.

19.

Tariffs refer to

A.	government payments to companies or industries that primarily serve to create competitive advantage for domestic products.

B.	government taxes on products or services entering a country that primarily serve to raise prices on imports.

C.	a restriction placed on the amount of a product allowed to enter or leave a country.

D.	a minimum requirement for the purchase between two or more nations of products or services.

E.	a refusal to purchase or exchange products or services with another nation unless certain financial or ideological requirements have been satisfied.

20.

The U.S. Rice Millers' Association claims that if the Japanese rice market were opened to imports by lowering __________, lower prices would save Japanese consumers $6 billion annually and the United States would gain a large share of the Japanese rice market.

boycotts

quotas

sanctions

tariffs

subsidies

21.

The __________ imposed on imported bananas by European Union countries cost consumers $2 billion a year in higher prices.

boycotts

quotas

sanctions

subsidies

tariffs

22.

U.S. citizens pay $5 billion more annually for shoes and Japanese citizens pay $6 billion more for rice than the actual cost of the products because

A.	both countries have suffered major financial crises due a severe trade imbalance.

B.	both countries have imposed tariffs on imported goods to protect their domestic markets.

C.	both countries have imposed limits on the quantity of these goods that can leave their respective domestic markets.

D.	both products are considered essentials and as a result are more heavily taxed.

E.	these products were purchased at a lower price from nations that currently are under governmental sanctions.

23.

Recently, the Japanese government, under pressure from its domestic farm lobby, slapped government taxes on mushrooms, leeks, and the reeds used in tatami mats that were being imported from China. These taxes Japan levied are referred to as

A.	WTO taxes.

quotas.

tariffs.

D.	excise taxes.

E.	subsidies.

24.

If you wanted to set up a business importing amber jewelry from Latvia to the United States, you would have to plan on paying the U.S. Customs Service a government tax of roughly 11 percent of the value of the product as

a bribe.

a tariff.

C.	a subsidy.

D.	an excise tax.

a quota.

25.

Whirlpool asked the United States to impose __________ on washing machine imports made by LG Electronics and Samsung Electronics, both South Korean companies, to raise the price of these products. Whirlpool accused these companies of selling below fair market value and receiving anticompetitive export subsidies from their governments, both of which could jeopardize American jobs.

boycotts

quotas

sanctions

tariffs

embargoes

26.

President Bill Clinton attempted to protect American firms from foreign competition by placing a government tax on Japanese automobiles imported to the United States. President Clinton's goal was to raise the price on Japanese imports, thereby encouraging American consumers to purchase American-made automobiles. The tax the president threatened to impose is an example of a

boycott.

quota.

tariff.

sanction.

subsidy.

27.

A restriction placed on the amount of a product allowed to enter or leave a country is referred to as a(n)

quota.

tariff.

GATT tax.

subsidy.

E.	excise tax.

28.

A quota refers to

A.	a government tax on products or services entering a country that primarily serves to raise prices on imports.

B.	government payments to companies or industries that serve to lower costs and provide a competitive advantage to domestic industries.

C.	a restriction placed on the amount of a product allowed to enter or leave a country.

D.	a minimum requirement for the purchase of specific products or services between two nations.

E.	a refusal to purchase or exchange products or services with another nation unless certain financial or ideological requirements have been satisfied.

29.

The world's largest manufacturer of peppermint candy canes was located in Albany, Georgia, until it could no longer afford to buy the sugar needed for its operation. It moved its manufacturing business to Mexico where there are no restrictions (like those that exist in the United States) on the amount of sugar that can be brought into the nation. The business moved to Mexico because of __________ established by the U.S. government.

a tariff

B.	a trade imbalance

C.	an excise tax

a subsidy

a quota

30.

Italy currently has a limit on the number of motorcycles that can be imported from Japan. This restriction would be considered a(n)

tariff.

B.	trade imbalance.

C.	excise tax.

quota.

subsidy.

31.

An institution that sets rules governing trade between its members through a panel of trade experts who decide on trade disputes between members and issue binding decisions is referred to as the

A.	League of Nations.

B.	World Trade Organization (WTO).

C.	Association for Commerce Equity (ACE).

D.	United Nations Board of Trade (UNBT).

E.	Global Better Business Bureau (BBB-G).

32.

The World Trade Organization (WTO) refers to

A.	the world's largest banking institution responsible for establishing and maintaining equitable exchange rates for all member nations.

B.	the world's largest licensing institution responsible for the certification of products distributed to a global market.

C.	an institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.

D.	a multinational trade organization composed of the world's wealthiest nations whose primary purpose is to aid in the economic growth of developing nations.

E.	a multinational trade organization comprised of the world's wealthiest nations whose primary purpose is to promote free trade economies.

33.

There are __________ World Trade Organization countries, including the United States, which account for more than 90 percent of world trade.

113

160

34.

Which of the following statements about the World Trade Organization (WTO) is most accurate?

A.	The WTO acts as an agent in trade negotiations between its members and the remainder of the world.

B.	The 179 member countries of the WTO account for less than 25 percent of world trade.

C.	The WTO was formed by the major industrialized nations in 1995 to address trade issues.

D.	The WTO uses panels of trade experts who can issue nonbinding recommendations.

E.	The WTO was formed by the United Nations.

35.

Which of the following statements about the World Trade Organization (WTO) is most accurate?

A.	The World Trade Organization is a temporary institution.

B.	The 168 member countries of the WTO account for less than 25 percent of world trade.

C.	The WTO sets rules governing trade between its members and the rest of the world.

D.	The WTO uses panels of trade experts who can issue nonbinding recommendations.

E.	The WTO was formed by the major industrialized nations of the world.

36.

Which of the following statements about the World Trade Organization (WTO) is most accurate?

A.	The World Trade Organization was formed in 2008 to response to the global recession.

B.	There are 160 WTO member countries, including the United States, which account for more than 90 percent of world trade.

C.	The WTO sets rules governing trade between member and nonmember countries of the world.

D.	The WTO uses panels of trade experts who can issue nonbinding recommendations.

E.	The WTO was formed by the United Nations.

37.

Which of the following statements about the World Trade Organization (WTO) is most accurate?

A.	The WTO is an institution that sets rules governing trade between its members.

B.	The WTO acts as an agent in trade negotiations between its members and the remainder of the world.

C.	The 183 member countries of the WTO account for approximately 55 percent of world trade.

D.	The WTO uses panels of trade experts who issue nonbinding recommendations.

E.	The WTO was formed by the United Nations.

38.

Which of the following statements about the World Trade Organization (WTO) is most accurate?

A.	The World Trade Organization was formed in 2008 in response to the global recession.

B.	The 12 member countries of the WTO account for approximately 55 percent of world trade.

C.	The WTO acts as an agent in licensing negotiations between its members and the remainder of the world.

D.	The WTO uses panels of trade experts who can issue binding decisions.

E.	The WTO was formed by the United Nations.

39.

The European Union (EU) in early 2016 consisted of 28 countries with more than 500 million consumers. The EU has eliminated most barriers to the free flow of products, capital, and labor across its borders. Which of the following countries is not a member of the EU?

Latvia

Greece

Ireland

D.	Switzerland

England

40.

The European Union is an economic and political union of __________ member countries that have eliminated most barriers to the free flow of products, services, capital, and labor across their borders.

41.

To eliminate the need to continually monitor currency exchange rates, 16 of the countries in the European Union (EU) have adopted a common currency, which is called the

pound.

franc.

euro.

mark.

dollar.

42.

To eliminate the need to continually monitor currency exchange rates, __________ of the countries in the European Union (EU) have adopted a common currency called the euro.

43.

The European Union (EU) has been beneficial to electronic commerce because it is no longer necessary to

A.	use multiple languages when settling accounts for purchases made across borders.

B.	continually monitor currency exchange rates among participating nations.

C.	trade with the former Eastern European communist countries.

D.	obey international e-trade regulations.

E.	use the American dollar as the economic standard.

44.

The EU has benefited firms in its member nations because

A.	it provides a safe haven in times of world economic crises.

B.	there is a common language advantage among EU consumers.

C.	most companies within the EU are engaging in strategic global partnerships.

D.	there is now a legally binding code of economic conduct.

E.	firms do not need to market their products and services on a nation-by-nation basis.

45.

The EU has benefited its member nations because firms do not need to market their products and services on a nation-by-nation basis; most tariffs that affect pricing practices have been removed; and

A.	there is a legally binding code of economic conduct.

B.	there is immunity against world recessions.

C.	there are fewer regulatory restrictions on transportation, advertising, and promotion.

D.	there is a common language advantage among EU consumers.

E.	most companies within the EU are engaging in strategic global partnerships.

46.

Pan-European marketing strategies are possible because

A.	there is a legally binding code of economic conduct.

B.	there are effective countermeasures for protectionism.

C.	there are fewer regulatory restrictions on transportation, advertising, and promotion.

D.	there is a common language advantage among EU consumers.

E.	most companies within the EU are engaging in strategic global partnerships.

47.

The North American Free Trade Agreement was designed to encourage free trade between

A.	North America, Central America, and South America.

B.	the United States and the European Union.

C.	member countries originally from NATO (North Atlantic Treaty Organization).

D.	the United States, Canada, and Mexico.

E.	North America and the Commonwealth of Independent States.

48.

CAFTA-DR, a comprehensive free trade agreement between Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and

A.	the United States.

Panama.

Belize.

Cuba.

Mexico.

49.

When firms originate, produce, and market their products and services worldwide, it is referred to as

A.	acculturation.

B.	free trade.

C.	global branding.

D.	global competition.

E.	transactional exchange.

50.

Global competition exists when

A.	a firm produces and markets its products domestically rather than globally.

B.	firms originate, produce, and market their products and services worldwide.

C.	two firms from two different countries compete for market share in a single domestic market.

D.	two or more firms from different nations combine their resources to market products in a single domestic market.

E.	the firm from one nation dominates the market for its product in every nation.

51.

Coca-Cola has operations in all but three nations in the world and Pepsi-Cola is now available in more than 160 countries and territories, making the soft drink industry an example of

A.	global competition.

B.	acculturation.

C.	free trade.

D.	global branding.

E.	transactional exchange.

52.

In terms of the global marketplace, there are three primary types of companies: __________ firms, multinational firms, and transnational firms.

worldwide

B.	conglomerate

C.	intercontinental

D.	international

E.	cosmopolitan

53.

In terms of the global marketplace, there are three primary types of companies: international firms, __________ firms, and transnational firms.

A.	large-scale

B.	conglomerate

C.	intercontinental

D.	cosmopolitan

E.	multinational

54.

In terms of the global marketplace, there are three primary types of companies: international firms, multinational firms, and __________ firms.

A.	multiethnic

B.	transnational

C.	multidomestic

D.	ethnocentric

E.	meganational

55.

The administrative, marketing, and manufacturing operations that many international firms, multinational firms, and transnational firms have around the world are often called

A.	divisions.

outlets.

C.	departments.

markets.

E.	holding companies.

56.

In terms of the global marketplace, there are three primary types of companies: international firms, multinational firms, and transnational firms. The key factor that distinguishes one from another is

A.	the firm's financial capacity to take risks.

B.	the willingness and ability to embrace diversity and cultural differences.

C.	the firm's orientation toward and strategy for global markets and marketing.

D.	the relative position of the product or service in terms of its life cycle.

E.	the relative size of the firm both in financial terms and in production capacity.

57.

A(n) __________ firm engages in trade and marketing in different countries as an extension of the marketing strategy in its home country.

A.	multidomestic

B.	meganational

C.	international

D.	multinational

E.	transnational

58.

Generally speaking, __________ firm markets its existing products and services in other countries the same way it does in its home country.

A.	a meganational

B.	an international

C.	a multinational

D.	a transnational

E.	an intranational

59.

Mars, America's second-largest candy company, began doing business in Russia in the late 1980s. The Snickers bar is one of the top-selling candies in Russia and is marketed in much the same way as it is in the United States. What type of global company is Mars?

A.	an international firm

B.	a multidomestic firm

C.	a transnational firm

D.	a meganational firm

E.	a multinational firm

60.

A firm that views the world as consisting of unique parts and markets to each part differently is referred to as

A.	a meganational firm.

B.	an extranational firm.

C.	an international firm.

D.	a multinational firm.

E.	a transnational firm.

61.

Unilever markets its Snuggle fabric softener differently to different parts of the world. Unilever is __________ firm.

A.	an ethnocentric

B.	a multinational

C.	a transnational

a global

E.	an international

62.

A multidomestic marketing strategy refers to

A.	the strategy of transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.

B.	the strategy used by firms that use the same product variations, brand names, and advertising programs for every country in which they do business.

C.	the strategy used by firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.

D.	the strategy of seeking out already established firms in other nations and selling them the rights to manufacture and distribute the firm's products.

E.	the strategy currently used by most U.S. domestic firms that when entering a new international market, these firms offer only those products that require the least amount of product adaptation.

63.

Companies that use __________ marketing strategy have as many different product variations, brand names, and advertising programs as countries in which they do business.

A.	an ethnocentric

B.	a multidomestic

C.	a transnational

a global

E.	an international

64.

Lever Europe, a division of Unilever, markets its Snuggle fabric softener in the United States. But in 10 European countries, it uses seven brand names, including Kuschelweich in German, Coccolino in Italy, and Mimosin in France. These products also have different packages, different advertising programs, and occasionally different formulas. From this information, we can assume that Lever Europe uses __________ marketing strategy.

A.	an ethnocentric

B.	a transnational

a global

D.	an international

E.	a multidomestic

65.

U.S. appliance manufacturers find that different customs about shopping must be used to determine local product design. For instance, people in Northern Europe shop only once a week, so they need bigger refrigerators than Southern Europeans, who shop daily. Furthermore, Northern Europeans insist that freezers should be on the top just as firmly as Southern Europeans want them on the bottom. Based on this, U.S. appliance manufacturers would more likely be successful if they used __________ marketing strategy.

a global

B.	a multidomestic

C.	a transnational

D.	a meganational

E.	an international

66.

Disney employed __________ marketing strategy for its Disneyland Paris, particularly when it came to the eateries in the park. These restaurants featured recipes that were revised for local tastes, alcoholic beverages (not permitted in previous parks), and increased outdoor seating.

a global

B.	a transnational

C.	a multidomestic

D.	a meganational

E.	an international

67.

A(n) __________ firm views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences.

A.	transcontinental

B.	multidomestic

C.	international

D.	multinational

E.	transnational

68.

The strategy transnational firms employ that standardizes marketing activities when there are cultural similarities and adapts them when cultures differ is referred to as

A.	a global marketing strategy.

B.	an integrated marketing strategy.

C.	a transnational marketing strategy.

D.	a meganational marketing strategy.

E.	an international marketing strategy.

69.

A global marketing strategy refers to

A.	the strategy used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.

B.	the strategy of transnational firms not to employ adaptive marketing techniques when there are cultural differences, but to redirect their marketing resources toward customer education.

C.	the strategy of transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.

D.	the global strategy of seeking out already established firms in other nations and selling them the rights to manufacture and distribute the firm's products through a host nation's local businesses.

E.	the strategy currently used by most U.S. domestic firms that when entering a new international market, these firms offer only those products that require the least amount of product adaptation.

70.

Which of the following types of firms would be most likely to use a global marketing strategy?

A.	multidomestic

B.	multinational

C.	multicountry

D.	transnational

E.	transborder

71.

A brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs is referred to as

A.	a transnational brand.

B.	an international brand.

C.	a multinational brand.

D.	a global brand.

E.	a meganational brand.

72.

A global brand refers to

A.	two or more domestic products that coincidentally share the same brand name but represent two completely unrelated products.

B.	two or more international products that coincidentally share the same brand name but represent two completely unrelated products.

C.	a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.

D.	a brand that is essentially the same but that has minor adaptations made to meet the more specific needs of different nations.

E.	a brand marketed under different names in multiple countries with similar and centrally coordinated marketing programs.

73.

Which of the following statements regarding global brands is most accurate?

A.	A global brand has dispersed marketing centers, each of which is responsible for a specific region.

B.	A global brand is marketed under the same name in multiple countries.

C.	A global brand alters the brand name for each dialect in a geographical region.

D.	A global brand delivers multiple benefits to the GDP of each country.

E.	A global brand is a collaborative effort among several different transnational firms.

74.

Which of the following statements about global brands is most accurate?

A.	A global brand has centrally coordinated marketing programs.

B.	A global brand is marketed under different names but uses identical ads for all markets.

C.	A global brand alters the product formulation or service for each geographical region.

D.	A global brand delivers multiple benefits based on the GDP of each country.

E.	A global brand is a collaborative effort among several different national firms.

75.

A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs. However, adaptations of global brands are made

A.	only if required by government regulations in the host market.

B.	only in its initial introduction into a market and only until the brand is recognized.

C.	by domestic competitors causing brand confusion.

D.	only when necessary to better connect the brand to consumers in different markets.

E.	when there is a serious drop in market share.

76.

In Europe, North America, South America, and the industrialized nations of Asia, those 13 to 19 years old

A.	are more similar than different regarding their purchase behaviors.

B.	are becoming more similar, but still differ significantly in terms of fashion and design.

C.	are rebelling against the Americanization of fashion and culture.

D.	have very different tastes in fashions and music.

E.	are more influenced by Asian culture than European culture.

77.

The appreciation of fashion, music, and a desire for novelty and trendier designs and images

A.	are preferences found more in American teenagers than in most other cultures around the world.

B.	actually begin at age 10, but begin to decline significantly as students enter high school.

C.	ironically are found more for teenagers who cannot afford to make those purchases than for those who can.

D.	are preferences of teenagers around the world regardless of where they live.

E.	are often established early among European teens and they typically linger well into adulthood.

78.

Based on a study of 6,500 teens in 26 countries, when asked what country had the most influence on their attitudes and purchase behavior, 54 percent of teens from the United States, 87 percent of those from Latin America, 80 percent of the Europeans, and 80 percent of those from Asia named

A.	the United States.

Japan.

C.	the United Kingdom.

France.

China.

79.

Consumer groups living in many countries or regions of the world that have similar needs or seek similar features and benefits from products or services are referred to as

A.	transnational consumers.

B.	meganational consumers.

C.	international consumers.

D.	multinational consumers.

E.	global consumers.

80.

Global consumers refers to

A.	all potential consumers for any and all products or services regardless of cultural, ethnic, or national origins.

B.	customers within a nation who consider the entire world a single marketplace.

C.	consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services.

D.	consumer groups living in many countries or regions of the world that have similar needs but seek customized features and benefits from products or services that reflect their individual cultures.

E.	multinational organizations whose products incorporate raw materials, assembly, and distribution contributions from multiple nations before they are marketed.

81.

Around the world, middle-class, youth, and elite markets that consume similar assortments of products and services, regardless of geographic location, are referred to as

A.	transnational consumers.

B.	meganational consumers.

C.	international consumers.

D.	multinational consumers.

E.	global consumers.

82.

The use of __________ as a tool for exchanging goods, services, and information on a global scale is one of the trends that has affected world trade.

A.	buying centers

B.	Internet technology

C.	language translators

D.	tariff and quota policies

E.	multinational marketing strategies

83.

Which of the following statements about the emergence of a networked global marketspace is most accurate?

A.	Marketspace creates an unfair competitive environment for emerging nations.

B.	More business-to-consumer marketing is done on the Internet than business-to-business marketing.

C.	The most active participants in the networked global marketspace are companies in developing nations.

D.	All business in the networked global marketspace is conducted in English.

E.	A networked global marketspace enables the exchange of products, services, and information from sellers anywhere to buyers anywhere at any time and at a lower cost.

84.

The clandestine collection of trade secrets or proprietary information about a company's competitors is referred to as

A.	trade piracy.

B.	transnational fraud.

C.	economic espionage.

D.	competitive duplicity.

E.	transnational espionage.

85.

Economic espionage is the clandestine collection of trade secrets or

A.	government economic information.

B.	industrial intelligence.

C.	government weapons information.

D.	banking lists.

E.	proprietary information about competitors.

86.

The estimated cost of economic espionage to firms in the United States is estimated to be

A.	$10 billion per year.

B.	$250 billion per year.

C.	$750 billion per year.

D.	$900 billion per year.

E.	exceeding $1 trillion per year.

87.

The Economic Espionage Act

A.	allows the World Court in The Hague to adjudicate trade disputes on behalf of UN members and requires the home country to impose any penalties.

B.	imposes a personal fine on a convicted U.S. citizen of up to $10 million.

C.	targets espionage activities that are commonplace in any industry that holds governmental contracts.

D.	makes the theft of trade secrets by foreign entities a federal crime in the United States.

E.	is well-intended in theory, but is virtually impossible to enforce.

88.

The prescribed penalty for agents of foreign governments found guilty of economic espionage is

A.	up to 15 years in prison and fines up to $500,000.

B.	life in prison with the possibility of parole after 25 years.

C.	25 years in prison and a $10 million fine.

D.	permanent expulsion from the United States.

E.	30 years in prison and fines proportional to the damage caused.

89.

The prescribed penalty for individuals found guilty of the theft of trade secrets is

A.	up to 25 years in prison and fines up to $10 million.

B.	life in prison with chance of parole after 25 years.

C.	expulsion from the United States and/or revocation of citizenship.

D.	30 years in prison and fines to be determined by the courts.

E.	up to 15 years in prison and fines up to $500,000.

90.

Cross-cultural analysis refers to the study of

A.	the subgroups within the larger, or national, culture with unique values, ideas, and attitudes.

B.	the set of values, ideas, and attitudes that are learned and shared among the consumers of a country.

C.	the similarities and differences among consumers in two or more nations or societies.

D.	the buying behaviors within a given nation to identify similarities and differences among individuals.

E.	the buying behaviors within a given nation that link a person's actions to the cultural group with which he or she identifies most.

91.

The study of similarities and differences among consumers in two or more nations or societies is referred to as

A.	market synthesis.

B.	cross-cultural analysis.

C.	international sociographics.

D.	transnational anthropology.

E.	multicultural ethnocentrism.

92.

For the marketer, a thorough __________ involves an understanding of and an appreciation for the values, customs, symbols, and language of other societies.

A.	market synthesis

B.	international sociographic study

C.	anthropological examination

D.	cross-cultural analysis

E.	ethnocentrism assessment

93.

A thorough cross-cultural analysis involves an understanding of and an appreciation of all of the following except

A.	economics.

symbols.

values.

D.	languages.

customs.

94.

Personally or socially preferable modes of conduct or states of existence that tend to persist over time are referred to as

customs.

ethics.

values.

culture.

beliefs.

95.

Values refers to

A.	personally or socially held core beliefs that are consistent within a given culture.

B.	the beliefs that dictate a person's behavior, which are often derived from a religious code of conduct.

C.	personally or socially preferable modes of conduct or states of existence that tend to persist over time.

D.	the innate sense of what a person considers to be right or wrong in terms of his or her own conduct when dealing with others.

E.	those personality traits regarding honesty and integrity that have been passed down from generation to generation.

96.

The reverence that Japan shows toward its elderly is an example of that nation's

values.

beliefs.

customs.

religion.

E.	cultural diversity.

97.

Which of the following examples best demonstrates a company's appreciation of another country's values?

A.	American companies in Germany encourage the use of all types of credit cards.

B.	In Brazil, American companies are extremely careful to keep to a strict agenda and time schedule, even though an informal structure is preferred.

C.	Bath products are advertised by portraying intimate scenes between husbands and wives in countries where personal privacy is important.

D.	McDonald's restaurants in India sell the Maharaja Mac rather than beef products.

E.	Vogue Italia published a feature with a model wearing "slave earrings," which it said were "worn by women of color during the slave trade."

98.

Which of the following examples best demonstrates a company's appreciation for another country's values?

A.	A German company allows customers to make large purchases using lay-away (paying small amounts until the item is paid for and delivered).

B.	In Brazil, an appliance maintenance firm schedules service appointments allowing only 15 minutes of leeway for missed calls or no shows.

C.	In Japan, a spa owner created special exercise classes for husbands and wives.

D.	In India, a popular hamburger chain separated its dining area by color for people who wanted to eat beef and those who did not.

E.	Calvin Klein reduced the number of outdoor advertising placements showing scantily clad models in countries with predominantly Muslim populations.

99.

Almost all countries have some division of social class (upper, middle, and lower). The determining factor for the assignment to one of these classes may differ from country to country. For example, in the United States, the primary determining factor is occupation; in India, it is birthright; in China, it is geographical region and education; and in Singapore, it is income. These differences are best explained in terms of a country's

A.	semiotics.

B.	legal system.

C.	ethnocentricity.

religion.

values.

100.

What is considered normal and expected about the way people do things in a specific country is referred to as

morals.

ethics.

values.

customs.

beliefs.

101.

Customs refers to

A.	what is considered normal and expected about the way people do things in a specific country.

B.	those actions or activities within a community that are unique or distinctly different from any other group.

C.	actions or behaviors that are repeated over time and carry a specific meaning to a unique group, nationality, or ethnicity.

D.	traditions among a group of people, a nation, or ethnicity that affect their purchase behaviors.

E.	what would be considered unusual or unexpected, and even unacceptable, about the way people do things in a specific country.

102.

In Japan, Japanese women give Japanese men chocolates on Valentine's Day. This is an example of a(n)

custom.

value.

C.	demographic pattern.

belief.

E.	idiosyncrasy.

103.

KFC in Japan sells tempura crispy strips. In northern England, it stresses gravy and potatoes. In Thailand, it offers fresh rice. In Holland, instead of potatoes, KFC offers customers a potato and onion croquette. In France, KFC sells pastries alongside its chicken. These examples illustrate that KFC exhibits an appreciation for the __________ of other societies.

A.	demographics

symbols

C.	sensitivities

customs

values

104.

Which of the following statements about bribery is most accurate?

A.	Bribes, kickbacks, and payoffs offered to entice someone to commit an illegal or improper act are deemed corrupt in some cultures but not in others.

B.	The world's major exporting nations have agreed to treat bribery of foreign government officials as a violation of trade agreements.

C.	Bribes paid to foreign companies are in some cases a tax-deductible expense in the United States.

D.	It is a crime for U.S. corporations to bribe an official of a foreign government or political party unless preapproved by the Federal Trade Commission.

E.	It is illegal for a U.S. corporation to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.

105.

The Foreign Corrupt Practices Act

A.	makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.

B.	has different levels of punishment based upon the wealth of the host nation.

C.	regulates only the behavior of U.S. businesses conducting business within the United States.

D.	makes the theft of trade secrets by foreign entities a federal crime in the United States.

E.	is a unilateral agreement the United States made with several developing nations.

106.

The law, as amended by the International Anti-Dumping and Fair Competition Act, that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country, is referred to as the

A.	International Law for Egalitarian Ethics Act.

B.	International Fair Practices Act.

C.	Law of International Equity Act.

D.	International Law of Ethical Business Practices Act.

E.	Foreign Corrupt Practices Act.

107.

Cultural symbols refers to

A.	ideas that can be protected by international copyrights.

B.	ideas that cannot be expressed by words or characters.

C.	things that represent values that exist solely within a nation.

D.	things that represent ideas and concepts.

E.	words that represent pictures or designs.

108.

Cultural symbols are things that

A.	can be protected by international copyrights.

B.	cannot be expressed by words or characters.

C.	represent values that exist solely within a nation.

D.	represent words through the use of pictures or designs.

E.	represent ideas and concepts.

109.

The representations of ideas and concepts to which different cultures often attach different meanings are referred to as

A.	universal symbols.

B.	cultural symbols.

C.	symbolic concepts.

D.	ideological representations.

E.	cultural representations.

110.

A field of study that examines the correspondence between symbols and their role in the assignment of meaning for people is referred to as

A.	back translation.

B.	symbiotics.

C.	semiotics.

D.	symbolic linguistics.

E.	cross-cultural analysis.

111.

Semiotics refers to

A.	a field of study in marketing linguistics that identifies the connotative meanings behind words in order to create the most effective product or brand names.

B.	a field of study in marketing linguistics that identifies the connotative meanings behind words in order to create the most effective advertising messages.

C.	a field of study that examines the correspondence between symbols and their role in the assignment of meaning for people.

D.	a field of linguistics that translates words into internationally recognized symbols to help companies carry their product message across international boundaries.

E.	the practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.

112.

A researcher studying the fact that in some nations black is a sign of mourning while in others white is a sign of mourning would be studying

A.	semiotics.

B.	semantics.

C.	semaphorics.

D.	cultural symbolism.

E.	cultural linguistics.

113.

By skillfully using __________, global marketers can tie positive meanings to their products, services, and brands to enhance their attractiveness to consumers.

A.	cultural symbols

B.	visual icons

C.	trademarks

D.	brand names

E.	ethnic emblems

114.

Tiffany & Co. knows that Japanese are superstitious about the number four. As a result, Tiffany sells its fine glassware and china in sets of five, not four, in Japan. Tiffany uses its knowledge of __________ to avoid connecting its products with the number four.

A.	trademarks

B.	visual icons

C.	cultural symbols

D.	brand names

E.	ethnic emblems

115.

The Parthenon evokes strong feelings from consumers in Greece and is referred to as the "holy rock." Coca-Cola marketers did not expect that this __________, when used in a marketing campaign that replaced the columns with Coke bottles, would arouse such an angry response in that country.

A.	cultural symbol

B.	anthropomorphic code

C.	back translation

D.	semantic representation

E.	civil analysis

116.

Canada has two official languages, which are

A.	English and Japanese.

B.	English and Spanish.

C.	English and French.

D.	English and Italian.

E.	English and German.

117.

Even though there are hundreds of different languages and dialects, the three major languages used in global diplomacy and commerce are

A.	English, Japanese, and Chinese.

B.	English, French, and Spanish.

C.	Japanese, Spanish, and French.

D.	Japanese, Spanish, and English.

E.	Spanish, English, and Chinese.

118.

The practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors is referred to as

locution.

B.	heuristics.

C.	transliteration.

D.	back translation.

E.	cross-cultural paraphrasing.

119.

If you were responsible for marketing communications at a company that manufactures office supplies and had to provide product literature to be distributed in France, you would be wise to use __________, whereby you have someone translate your literature from American English into French, and then have someone else in France translate the French into American English.

back talk

B.	back translation

C.	double talk

D.	double entendre

E.	double indemnity

120.

A Tokyo shopkeeper would have been wise to use __________ to verify the accuracy of the new sign in English he purchased for his dry cleaning business. The sign read, "Drop your pants here for best results," which he did not know had another suggestive meaning to native speakers.

A.	cultural symbolism

B.	dialect transformation

C.	semantic analysis

D.	linguistic exchange

E.	back translation

121.

A New York car wash owner wanted to open a car wash in Quebec, Canada. He hired a U.S. translator to create signage for the new venture and to design some simple advertising. It was not until the business was opened that he realized he should have used __________. His French signs actually said "car bath" instead of "car wash."

Esperanto

B.	back translation

semiotics

D.	semantic symbolism

E.	linguistic exchange

122.

Kit Kat bars are marketed by Nestlé worldwide. Kit Kat is pronounced "kitto katsu" in Japanese, which roughly translates to "surely win." Japanese teens eat Kit Kat bars for good luck, particularly when taking crucial school exams. This positive result might have been missed had the company used __________ and felt it necessary to use a name without an additional meaning.

A.	intentional transliteration

B.	semantic symbolism

C.	back translation

D.	semantic analysis

E.	linguistic exchange

123.

____________ is the tendency to believe that it is inappropriate, indeed immoral, to purchase foreign-made products.

A.	Country partisanship

B.	Cultural ethnocentrism

C.	Economic ethnocentrism

D.	Consumer ethnocentrism

E.	Nationalism

124.

Since global marketing is affected by economic considerations, a scan of the global marketplace should include which of the following factors?

A.	an analysis of cultural diversity within the country under consideration

B.	regulatory constraints regarding contracts, mergers, and partnerships

C.	measurement of consumer income in different countries

D.	an assessment of language differences including dialect variation

E.	political and ideological differences between the countries involved

125.

Since global marketing is affected by economic considerations, a scan of the global marketplace should include which of the following factors?

A.	recognition of a country's currency exchange rates

B.	an analysis of cultural diversity within the country under consideration

C.	regulatory constraints regarding contracts, mergers, and partnerships

D.	an assessment of language differences including dialect variation

E.	political and ideological differences between the countries involved

126.

A country's communications, transportation, financial, and distribution systems are considered to be its

A.	capital improvements.

B.	fixed-asset base.

C.	economic infrastructure.

D.	geopolitical wealth.

E.	asset wealth.

127.

Economic infrastructure refers to

A.	a nation's military-industrial complex.

B.	a country's governmental services.

C.	the people and the wealth of a nation.

D.	a country's communications, transportation, financial, and distribution systems.

E.	all of a country's natural resources, whether or not they are currently being exploited.

128.

Two-thirds of the commercial transactions in Russia involve nonmonetary forms of payment due to limits in formal operating procedures among financial institutions and even limits on the notion of private property there. These would best be described as constraints in the country's

A.	capital infrastructure.

B.	political infrastructure.

C.	economic infrastructure.

D.	geopolitical system.

E.	financial exchange system.

129.

Although Russia now has a free economy, there are still some problems with its financial and legal systems, as well as with the notion of

A.	private property.

B.	product promotion.

C.	paid advertising.

D.	community property.

E.	foreign exchange rates.

130.

In Latvia, only one six-lane highway exists, connecting Riga, its capital, with Moscow. Otherwise, the roads are two lanes and many are made of cobblestones or bricks. This limits the speed with which deliveries can be made and requires that delivery trucks be quite small. The road network in Latvia is an example of problems with a country's

A.	capital improvements.

B.	fixed-asset base.

C.	geopolitical wealth.

D.	asset wealth.

E.	economic infrastructure.

131.

A global marketer selling consumer products and services must also consider what the average per capita or __________ is among a country's consumers and how the income is distributed to determine a nation's purchasing power.

A.	buying capacity

B.	currency exchange risk

C.	purchasing power

D.	household income

E.	cost of living

132.

A country's income distribution is important because it gives a more reliable picture of a country's

A.	consumer tastes.

B.	taxable income.

C.	purchasing power.

D.	discretionary income.

E.	cost of living.

133.

Foreign countries with very low per capita incomes may still be attractive markets for some goods. To get a more reliable picture of a country's purchasing power, a country's __________ must also be considered.

A.	total income

B.	total area

C.	geographical location

culture

E.	income distribution

134.

Generally, as the proportion of middle-income households in a country __________, the __________ a nation's purchasing power.

A.	increases; greater

B.	increases; lesser

C.	decreases; greater

D.	levels off; greater

E.	There is no relationship between middle-income households and a nation's purchasing power.

135.

Generally, as the proportion of middle-income households in a country __________, the nation's purchasing power increases.

decreases

increases

C.	levels off

D.	reaches 33 percent of the total population

E.	reaches 50 percent of the total population

136.

Generally, as the proportion of middle-income households in a country increases, the nation's purchasing power

A.	levels off.

B.	decreases.

C.	increases.

D.	becomes less of an economic priority.

E.	becomes progressively unstable.

137.

The price of one country's currency expressed in terms of another country's currency is referred to as the

A.	balance of price.

B.	currency exchange rate.

C.	money conversion factor.

D.	balance of payments.

E.	transfer payment.

138.

Currency exchange rate refers to

A.	the unit equivalency of all international currency.

B.	the ratio of a nation's basic unit of currency relative to the price of silver.

C.	the ratio of a nation's basic unit of currency relative to the price of gold.

D.	the price of one country's currency expressed in terms of another country's currency.

E.	the unit of wealth (gold, oil, diamonds, etc.) upon which a nation bases its national currency.

139.

Fluctuations in the __________ among the world's currencies have direct impact on the sales and profits made by global companies.

A.	production costs

B.	transportation

C.	reciprocity

D.	economic infrastructure

E.	exchange rates

140.

When foreign currencies can buy more U.S. dollars,

A.	U.S. products are more expensive to foreign customers.

B.	U.S. products are more expensive to U.S. customers.

C.	U.S. products are less expensive to foreign customers.

D.	economists consider it an indicator of an impending long-term economic upturn.

E.	American consumers will buy in large quantities and stockpile in fear of an impending economic crisis.

141.

Which of the following statements concerning currency exchange rates is most accurate?

A.	Fluctuations in exchange rates among the world's currencies are of critical importance in global marketing.

B.	Fluctuations in exchange rates among the world's currencies occur, but multinational companies are insulated from the affects because of direct investment.

C.	Exchange rate fluctuations are relatively rare, but when they occur, their effects are minimal.

D.	Exchange rate fluctuations are now almost nonexistent due in great part to the stability of the euro.

E.	Exchange rate fluctuations may affect the financial sector but rarely reach the consumer.

142.

Chrysler Corp. wanted to sell its Jeeps in Japan. The car was priced in U.S. dollars at about $19,000, but when it reached the Japanese car showrooms, its price was over 3,100,000 Japanese yen, and the Japanese could not afford to buy it. Its price was set without regard for the

A.	balance of price.

B.	currency exchange rate.

C.	reciprocity price.

D.	balance of payments.

E.	balance of trade.

143.

Assessing the political and regulatory climate for marketing in a country or region of the world means not only identifying the current environment but also determining how

A.	it conducts its macrofinancing.

B.	its citizens budget their money.

C.	long a favorable or unfavorable climate will last.

D.	the country's stocks are performing on the stock exchange.

E.	its population ranks in size compared to other countries.

144.

An assessment of a country's or region's political-regulatory climate includes an analysis of its political stability and

A.	economic infrastructure.

B.	stock market performance.

C.	trade regulations.

D.	cultural diversity.

E.	currency exchange rates.

145.

Trade among nations or regions depends on political stability. In recent times, billions of dollars have been lost in __________ and __________ as a result of internal political strife, terrorism, and war.

A.	Russia; Poland

B.	France; Spain

C.	China; Japan

D.	the Middle East; Africa

E.	Germany; the United Kingdom

146.

The PRS Group maintains a website that can be used to determine

A.	changing demographic and psychographic data for each country in the registry.

B.	a country's political risk ratings using multiple databases of country-specific information.

C.	the tariffs of each country and their relative effect on product and services sales.

D.	the rankings of American products relative to domestic equivalents in each country.

E.	changing social trends within different segments of the economy.

147.

Japanese car safety rules effectively require all automobile replacement parts to be Japanese, and the country has about 11,000 other rules that specify how goods are to be made and marketed. These rules often function as

A.	economic infrastructure.

B.	trade barriers.

C.	universal codes.

D.	binding requirements.

E.	targets for bribery.

148.

A firm's profit potential and control over marketing activities __________ as it moves from exporting to direct investment as a global market entry strategy.

A.	becomes more stable

increases

C.	levels off

decreases

E.	becomes more unpredictable

149.

Once a company has decided to enter the global marketplace, it must select a means of market entry. Four general options exist: (1) __________, (2) licensing, (3) joint venture, and (4) direct investment.

exporting

B.	accreditation

C.	countertrading

D.	cooperative

E.	franchising

150.

Once a company has decided to enter the global marketplace, it must select a means of market entry. Four general options exist: (1) exporting, (2) __________, (3) joint venture, and (4) direct investment.

A.	macrofinancing

B.	microfinancing

C.	franchising

licensing

E.	collateral venture

151.

Once a company has decided to enter the global marketplace, it must select a means of market entry. Four general options exist: (1) exporting, (2) licensing, (3) __________, and (4) direct investment.

A.	franchising

B.	joint venture

C.	cooperative

D.	multiparty initiative

E.	mutual investment

152.

Once a company has decided to enter the global marketplace, it must select a means of market entry. Four general options exist: (1) exporting, (2) licensing, (3) joint venture, and (4) __________.

A.	franchising

B.	microfinancing

C.	unilateral venture

D.	cooperative

E.	direct investment

153.

A firm's profit potential and control over marketing activities increases as it moves from exporting to direct investment as a global market entry strategy. But so does the firm's

A.	likelihood of long-term success.

B.	financial commitment and risk.

C.	vulnerability to political changes and doctrines.

D.	need for a more educated workforce.

E.	need for a larger workforce.

154.

As a firm changes its global market entry strategy from exporting to direct investment, all of the following increase except

A.	marketing control.

risk.

C.	divestiture.

D.	profit potential.

E.	financial commitment.

155.

What option would allow a company to make the least number of changes in terms of its product, its organization, and even its corporate goals when entering the global marketplace?

A.	joint venture

licensing

exporting

D.	direct investment

franchise

156.

What option would allow a company to make a low-risk and capital-free entry into a foreign country?

exporting

B.	joint venture

C.	direct investment

D.	franchising

licensing

157.

In which option would two companies share the ownership, control, and profits of a new company designed to enter a foreign market?

exporting

B.	joint venture

C.	direct investment

licensing

E.	franchising

158.

What option for entering the global marketplace entails a domestic firm actually investing in and owning a foreign subsidiary or division?

exporting

B.	joint venture

C.	direct investment

D.	franchising

licensing

159.

The two global market entry strategies that represent the least and most risk are __________, respectively.

A.	joint venture and licensing

B.	licensing and exporting

C.	licensing and joint venture

D.	direct investment and licensing

E.	exporting and direct investment

160.

The two global market entry strategies in which a company forgoes control of its product and governmental bureaucracy may bog down the effort are __________, respectively.

A.	exporting and licensing

B.	licensing and joint venture

C.	joint venture and direct investment

D.	exporting and direct investment

E.	exporting and joint venture

161.

A global market entry strategy in which a company produces goods in one country and sells them in another country is referred to as

A.	exporting.

B.	direct investment.

C.	countertrade.

D.	licensing.

E.	multinational marketing.

162.

Exporting refers to a global market entry strategy

A.	in which a company will sell its products in international markets but not in its own domestic market.

B.	in which a company produces goods in one country and sells them in another country.

C.	in which a company will manufacture its product in several countries at the same time using different brand names and slight product modifications.

D.	in which a company will manufacture products specifically designed for nondomestic markets, but will sell those products to distributors that take title and resell the products to different companies around the world.

E.	whereby a product is made in one country, assembled in a second country, and ultimately marketed to a third country.

163.

What market entry option allows a company to make the least number of changes in terms of its product, its organization, and even its corporate goals?

exporting

licensing

C.	joint venture

D.	direct investment

E.	franchising

164.

Indirect exporting refers to

A.	offering the right to a trademark, patent, trade secret, or similarly valued item of intellectual property in return for a royalty or fee.

B.	selling a firm's domestically produced products in a foreign country without interference by that government.

C.	contracting with a foreign firm to manufacture products according to stated specifications.

D.	avoiding the use of additional parties when a firm sells its domestically produced products in another country.

E.	selling a firm's domestically produced products in a foreign country through an intermediary.

165.

When a firm sells its domestically produced products in a foreign country through an intermediary, it is referred to as

A.	direct exporting.

B.	indirect exporting.

C.	licensing.

D.	franchising.

E.	foreign assembly.

166.

Indirect exporting occurs when a firm sells its domestically produced products in a foreign country

A.	in violation of a quota.

B.	without paying import tariffs.

C.	without paying export duties.

D.	through a joint venture.

E.	through an intermediary.

167.

What type of exporting has the least amount of commitment and risk but will probably return the least profit?

direct

indirect

licensing

joint

E.	unilateral

168.

A small Canadian winery located in British Columbia has developed a superior wine. It has no overseas contacts but wants to get its wine on the shelves in selected Asian and European markets where growth has been substantial in the past two years. What type of exporting option would best suit this company?

A.	direct exporting

licensing

C.	indirect exporting

D.	joint venture

E.	cooperative partnership

169.

The U.S. motorcycle manufacturer Harley-Davidson uses intermediaries to sell its motorcycles in numerous nations outside the United States. Harley-Davidson uses

A.	direct exporting.

B.	licensing.

C.	contract manufacturing.

D.	indirect exporting.

E.	foreign assembly.

170.

Fran Wilson Creative Cosmetics attributes its success to a top-quality product, effective advertising, and a novel __________ strategy.

A.	joint venture

licensing

C.	franchising

D.	indirect export

E.	direct investment

171.

To avoid competing with Japanese firms through their traditional channel of distribution, Fran Wilson Creative Cosmetics Moodmatcher lip coloring is sold in which type of retail venue?

A.	grocery stores

B.	flower shops

C.	beauty salons

D.	department stores

E.	gift stores

172.

Direct exporting refers to

A.	offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.

B.	contracting with a foreign firm to manufacture products according to certain specifications.

C.	when a foreign country and a local firm invest together to create a local business.

D.	using additional parties when a firm sells its domestically produced goods in another country.

E.	when a firm sells its domestically produced goods in a foreign country without intermediaries.

173.

What global market entry strategy involves slightly more risk than indirect exporting for a company but also opens the door to increased profits?

A.	direct exporting

licensing

C.	cooperative

D.	joint venture

E.	direct investment

174.

Most companies become involved in direct exporting when

A.	foreign governments believe that they will benefit the most from allowing the entry of direct exports.

B.	emerging markets in foreign countries become economically viable.

C.	they believe their volume of sales will be sufficiently large and easy to obtain so that they do not require intermediaries.

D.	the domestic market becomes saturated with competing products and services.

E.	evolving technologies in foreign countries come online.

175.

The prominent global market entry strategy among small- and medium-sized companies is

A.	direct exporting.

B.	direct franchising.

C.	licensing.

D.	joint venture.

E.	direct investment.

176.

When a U.S. airplane manufacturer sells its airplanes to a company in Germany without using intermediaries, it is referred to as

A.	direct exporting.

B.	indirect exporting.

C.	licensing.

D.	foreign manufacturing.

E.	foreign assembly.

177.

Licensing refers to

A.	offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.

B.	contracting with a foreign firm to manufacture products according to certain specifications.

C.	when a foreign country and a local firm invest together to create a local business.

D.	having a company handle its own exports directly without intermediaries.

E.	exporting through an intermediary, which often has the knowledge and means to succeed in selling a firm's product abroad.

178.

Offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee is referred to as

A.	direct exporting.

B.	indirect exporting.

C.	licensing.

D.	contract manufacturing.

E.	outside branding.

179.

Which of the following is an advantage inherent in the use of licensing?

A.	The licensor retains control of its product.

B.	The licensor is protected from creating a potential competitor.

C.	It provides an exemption from domestic trade regulations.

D.	There is an increase in potential profit compared with direct investment.

E.	The licensee gains information about the dynamics of the market.

180.

All of the following are advantages of licensing except

A.	the foreign country gains employment by having the product manufactured locally.

B.	the licensee gains information that allows it to start with a competitive advantage.

C.	the low risk to the company granting the license.

D.	the licensor's brand name can never be harmed as a result of the licensee.

E.	the capital-free entry into a foreign country.

181.

Which of the following is a disadvantage associated with licensing?

A.	The licensee pays lower wages and sells at lower prices.

B.	The licensor may create its own competition.

C.	The foreign government dislikes it because it does not increase local employment.

D.	This is the most expensive and risky method for global expansion.

E.	The firm's brand does not get international exposure.

182.

Which form of entry into a global market makes a firm the most vulnerable to harm regarding its brand name or reputation?

A.	direct exporting

B.	indirect exporting

licensing

D.	direct investment

E.	joint venture

183.

All of the following are disadvantages of licensing except

A.	the licensor reduces its potential profits gained from product sales.

B.	the foreign country gains employment by having the product manufactured locally.

C.	the licensor forgoes control of its product.

D.	should the licensee prove to be a poor choice, the name or reputation of the company may be harmed.

E.	the licensor may be creating its own competition.

184.

Tricon was the restaurant division of PepsiCo until it was spun off in 1997. Since then, Tricon has opened 6,000 KFC restaurants abroad. It has 158 restaurants in Indonesia and more than 500 restaurants in China. All are locally owned and each owner pays a fee to Tricon. Tricon is engaged in

A.	licensing.

B.	direct exporting.

C.	indirect exporting.

D.	contract manufacturing.

E.	foreign assembly.

185.

Select Service Partner (SSP) Group has operations in 30 countries involving food and beverage establishments, often in transit hubs such as airports and railway stations. SSP also operates Starbucks locations in airports in Finland, Sweden, and Norway. SSP pays Starbucks a royalty based on sales, as well as a fee for each store. In these instances, Starbucks is engaged in

A.	direct exporting.

B.	indirect exporting.

C.	contract manufacturing.

D.	foreign assembly.

E.	franchising.

186.

A form of low-risk and capital-free entry into international markets that includes local manufacturing is referred to as

A.	indirect exporting.

B.	direct ownership.

C.	joint ventures.

D.	licensing.

E.	direct exporting.

187.

One variation of licensing is referred to as

A.	direct investment.

B.	joint ventures.

C.	direct exporting.

D.	franchising.

E.	dual adaptation.

188.

Yum! Brands, the restaurant division of PepsiCo, has 12,600 KFC restaurants abroad, with more than 3,700 restaurants in China. Many of the latter are locally owned and subject to a contractual agreement that allows the owners to operate the business under the established KFC brand name and according to specific rules. Yum! Brands is engaged in

A.	contract assembly.

B.	a joint venture.

C.	contract manufacturing.

D.	a partnership.

E.	franchising.

189.

Yogen Früz is a successful chain of frozen yogurt shops originating in Canada. Archeology Investments has an agreement with the Canadian firm that grants rights to its company to open and operate Yogen Früz shops in Dubai, Oman, Qatar, Bahrain, and Kuwait. Yogen Früz is engaged in

A.	dual adaptation.

B.	a joint venture.

C.	direct exporting.

D.	indirect exporting.

E.	franchising.

190.

Joint venture refers to

A.	offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.

B.	contracting with a foreign firm to manufacture products according to certain specifications.

C.	when a foreign company and a local firm invest together to create a local business.

D.	having a company handle its own exports directly, but using intermediaries for importing.

E.	exporting through an intermediary, which often has the knowledge and means to succeed in selling a firm's products abroad.

191.

A global market entry strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits of the new company is referred to as

A.	licensing.

B.	a joint venture.

C.	direct exporting.

D.	contract assembly.

E.	dual adaptation.

192.

PepsiCo and __________ entered into a joint venture to market Frito-Lay's, Cheetos, Ruffles, and Doritos in Israel.

A.	The Strauss Group

Ericsson

C.	General Mills

D.	Hebrew National

CGCT

193.

The __________ arrangement between Ericsson, a Swedish telecommunications firm, and CGCT, a French switch maker, enabled them together to beat out AT&T for a $100 million French contract.

A.	franchising

licensing

C.	joint venture

D.	direct investment

exporting

194.

A disadvantage of a joint venture arrangement when entering a new global market is that

A.	intermediaries have the potential to harm the brand.

B.	the firm entering the foreign market must pay royalties to the other firm.

C.	one of the companies forgoes control over its product.

D.	the two companies may disagree about policies.

E.	this method is likely to provide the fewest subsidies from the host country's government.

195.

Starbucks and Tata Global Beverage have together formed TATA Starbucks Limited in order to bring Starbucks to India. The global market entry strategy is known as

A.	franchising.

B.	a joint venture.

C.	licensing.

D.	direct investment.

E.	exporting.

196.

Direct investment in international marketing refers to

A.	offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.

B.	contracting with a foreign firm to manufacture products according to certain specifications.

C.	a national market entry strategy that entails a foreign company and a local firm investing together to create a local business.

D.	having a company handle its own exports directly, without intermediaries.

E.	a global market entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division.

197.

A global market entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division is referred to as

A.	licensing.

B.	local assembly.

C.	a joint venture.

D.	direct investment.

E.	local manufacturing.

198.

When Nestlé actually owns a subsidiary or division in a foreign country, such as its own ice cream manufacturing operation in China, this global market entry strategy is known as __________ and represents the greatest commitment a company can make to international sales.

licensing

B.	local assembly

C.	a joint venture

D.	direct investment

E.	local manufacturing

199.

Which form of entry into a foreign market requires the greatest commitment?

A.	direct exporting

B.	direct investment

C.	joint venture

licensing

E.	indirect exporting

200.

One advantage of direct investment when entering a new global market is that

A.	intermediaries have the potential to harm the brand.

B.	the firm entering the foreign market does not have to pay royalties to the government.

C.	the company forgoes control over its product.

D.	the firm gains and uses a better understanding of local market conditions.

E.	this method is likely to provide the fewest subsidies from the host country's government.

201.

One disadvantage of direct investment when entering a new global market is

A.	intermediaries have the potential to harm the brand.

B.	the firm entering the foreign market must pay royalties to the government.

C.	the company forgoes control over its product.

D.	the financial commitments involved.

E.	this method is likely to provide the fewest cost savings relative to the other global market entry options.

202.

Both Honda and Toyota have plants in the United States that use American labor. This illustrates Honda's and Toyota's use of

A.	direct exporting.

B.	direct investment.

C.	joint venture.

D.	licensing.

E.	indirect exporting.

203.

Yum! Brands, the parent company of KFC, has pursued an aggressive growth strategy in China. There are now more than 3,700 restaurants in 650 Chinese cities, and KFC has a 40 percent market share of the entire fast-food industry there. Yum! Brands China owns and directly manages about 90 percent of its Chinese stores, so it appears that the company prefers __________ in this market.

licensing

B.	local assembly

C.	a joint venture

D.	direct investment

E.	local manufacturing

204.

Global companies have five strategies for matching products and their promotion efforts to global markets. The strategy of selling virtually the same product in other countries is referred to as

A.	product adaptation.

B.	product invention.

C.	brand adaptation.

D.	product extension.

E.	product integration.

205.

As a general rule, __________ seems to work best when the consumer target market for the product is alike across countries and cultures—that is, consumers share the same desires, needs, and use for the product.

A.	product adaptation

B.	product extension

C.	product integration

D.	product invention

E.	product customization

206.

Coca-Cola, Gillette razors, and Nike apparel and shoes are being sold in the same form in many countries. This is an example of which type of global marketing product and promotion strategy?

A.	product customization

B.	product adaptation

C.	product extension

D.	product integration

E.	product invention

207.

GlaxoSmithKline PLC of Great Britain makes Breathe-Right nasal strips. It sells the same product in many countries because customers all over the world will use them in the same way. This is an example of which type of global marketing product and promotion strategy?

A.	product customization

B.	product extension

C.	product adaptation

D.	product invention

E.	product integration

208.

Global companies have five strategies for matching products and their promotion efforts to global markets. Changing a product in some way to make it more appropriate for a country's climate or preferences is an example of which type of global marketing product and promotion strategy?

A.	product extension

B.	product customization

C.	product adaptation

D.	product invention

E.	product integration

209.

Frito-Lay produces and markets potato chips in Russia that have seafood flavor. This is an example of which type of global marketing product/promotion strategy?

A.	product adaptation

B.	product integration

C.	product invention

D.	product customization

E.	product extension

210.

KFC in Japan altered the sweetness of its coleslaw to appeal to Japanese tastes. This is an example of which type of global marketing product and promotion strategy?

A.	product extension

B.	product adaptation

C.	product customization

D.	product invention

E.	product integration

211.

Global companies have five strategies for matching products and their promotion efforts to global markets. Designing a product to serve the unmet needs of a foreign nation is which type of global marketing product and promotion strategy?

A.	product extension

B.	product customization

C.	product adaptation

D.	product invention

E.	product integration

212.

Black & Decker launched the Snake Light flexible flashlight. Created to address a global need for portable lighting, the product became a best seller in North America, Europe, Latin America, and Australia. This is an example of which type of global marketing product and promotion strategy?

A.	product extension

B.	product customization

C.	product adaptation

D.	product invention

E.	product integration

213.

Even though Exxon adapts its gasoline blends for different countries based on climate, the promotion message is unchanged. The wording of that slogan is

A.	"Put a Tiger in Your Tank."

B.	"Put the Pedal to the Metal."

C.	"Buy American Fuel."

D.	"Keep America Driving."

E.	"Power to the Pistons."

214.

Nescafé coffee is marketed using different coffee blends and promotional campaigns to match consumer preferences in different countries. For example, Nescafé generally emphasizes the taste, aroma, and warmth of shared moments in its advertising around the world. However, in Thailand, Nescafé is advertised as a way to relax from the pressures of daily life. This is an example of which type of global marketing product and promotion strategy?

A.	product extension

B.	product customization

C.	product adaptation

D.	dual adaptation

E.	dual integration

215.

Global companies have five strategies for matching products and their promotion efforts to global markets. A same product-same promotion emphasis refers to which type of strategy?

A.	product extension strategy

B.	communication adaptation strategy

C.	product adaptation strategy

D.	dual adaptation strategy

E.	product invention strategy

216.

Global companies have five strategies for matching products and their promotion efforts to global markets. An adapt product-same promotion emphasis refers to which type of strategy?

A.	product extension strategy

B.	communication adaptation strategy

C.	product adaptation strategy

D.	dual adaptation strategy

E.	product invention strategy

217.

Global companies have five strategies for matching products and their promotion efforts to global markets. A same product-adapt promotion emphasis refers to which type of strategy?

A.	product extension strategy

B.	product adaptation strategy

C.	dual adaptation strategy

D.	product invention strategy

E.	communication adaptation strategy

218.

Global companies have five strategies for matching products and their promotion efforts to global markets. An adapt product-adapt promotion emphasis refers to which type of strategy?

A.	product extension strategy

B.	product adaptation strategy

C.	dual adaptation strategy

D.	product invention strategy

E.	communication adaptation strategy

219.

Global companies have five strategies for matching products and their promotion efforts to global markets. A create new product emphasis refers to which type of strategy?

A.	product extension strategy

B.	product adaptation strategy

C.	dual adaptation strategy

D.	product invention strategy

E.	communication adaptation strategy

220.

Consider the distribution channels through which a product manufactured in one country must travel to reach its destination in another country. Distribution begins with the organization's headquarters as the starting point, which is represented as the

seller.

B.	seller's international marketing headquarters.

C.	channels between nations.

D.	channels within the foreign nation.

E.	final customer.

221.

Consider the distribution channels through which a product manufactured in one country must travel to reach its destination in another country. The step that links the seller and its international operations, is the

A.	channels within foreign nations.

B.	channels between nations.

C.	seller's international marketing headquarters.

D.	political forces.

E.	final consumer.

222.

Consider the distribution channels through which a product manufactured in one country must travel to reach its destination in another country. The step that is the channel between two nations, moving the product from one country to another, is the

seller.

B.	seller's international marketing headquarters.

C.	channels within foreign nations.

D.	final consumer.

E.	channels between nations.

223.

Consider the distribution channels through which a product manufactured in one country must travel to reach its destination in another country. Which of the following is most likely to involve intermediaries or agents?

A.	the seller

B.	the seller's international marketing headquarters

C.	channels between nations; channels within a foreign nation

D.	internal channels; external channels

E.	delivery channels; the final consumer

224.

Consider the distribution channels through which a product manufactured in one country must travel to reach its destination in another country. In which step of the distribution channel is it suggested that the channels can be very long or surprisingly short?

A.	the seller

B.	the seller's international marketing headquarters

C.	channels between nations

D.	channels within the foreign nation

E.	final consumer

225.

Consider the distribution channels through which a product manufactured in one country must travel to reach its destination in another country. The distribution channels can be considered to have been successful when the product reaches the

seller.

B.	channels between nations.

C.	seller's international marketing headquarters.

D.	final consumer.

E.	channels within foreign nations.

226.

Consider the distribution channels through which a product manufactured in one country must travel to reach its destination in another country. Channels of distribution in global marketing are often long and complex. The availability and quality of retailers and wholesalers as well as transportation, communication, and warehousing facilities are often determined by

A.	the seller and the exporter.

B.	a country's stage of economic development.

C.	the seller's international marketing headquarters and the channels between nations.

D.	channels between nations and the channels within the foreign nation.

E.	channels within the foreign nation and the foreign retailer.

227.

When a firm sells a product in a foreign country below its domestic price or below its actual cost, the practice is referred to as

A.	loss-leader pricing.

B.	surplus marketing.

dumping.

D.	second-market pricing.

E.	entrepreneurial pricing.

228.

In international trade, dumping refers to

A.	illegally disposing of unusable or damaged goods to avoid paying removal fees and/or taxes.

B.	a firm selling damaged or unsalable goods below their original production cost.

C.	a firm selling quality goods at significantly lower prices for the primary purpose of reducing inventory to make room for seasonal goods.

D.	a firm selling quality goods at significantly lower prices for the primary purpose of reducing inventory to make room for newer or more expensive models.

E.	a firm selling a product in a foreign country below its domestic price or below its actual cost.

229.

Eastman Kodak accused Japanese rival Fuji Photo Film of selling photographic paper in the United States for 25 percent below what it charges in Japan. In other words, Eastman Kodak accused Fuji of

A.	tariff avoidance.

B.	countertrade.

C.	surplus marketing.

dumping.

E.	underbidding.

230.

The U.S. Commerce Department imposed additional duties of 31 percent to 250 percent on imported photovoltaic products from Chinese solar manufacturers after ruling that they sold them below cost. The Commerce Department took this action in response to what it saw as

A.	tariff avoidance.

B.	countertrade.

C.	surplus marketing.

D.	underbidding.

dumping.

231.

A situation where products are bought in a lower-priced country from a manufacturer's authorized reseller, shipped to higher-priced countries, and then sold through unauthorized retailers below the manufacturer's suggested retail price is referred to as

A.	the black market.

B.	a gray market.

dumping.

D.	a globalized market.

E.	parallel exporting.

232.

Gray market refers to

A.	the segment of products specifically designed for the need of older buyers.

B.	a once active and powerful market that is rapidly becoming the bottom of the barrel.

C.	a situation where products are sold through unauthorized channels of distribution.

D.	a pricing structure that is based upon haggling that is considered acceptable in some countries but not others.

E.	the willingness of one party to accept gifts in exchange for better prices or price allowances.

233.

Another term for a gray market is

A.	equivalent exporting.

B.	back-channel market.

C.	mature marketing.

D.	parallel importing.

E.	transparent market.

234.

The Japanese manufacture tractors for rice paddies. They are smaller than most U.S. tractors and perfect for a weekend farmer who wants to tend to a small garden. The tractors are not sold in the United States through any authorized channels, yet they are available in the United States at prices below the manufacturer's suggested retail price. These Japanese tractors are being sold

A.	through the gray market.

B.	under the table.

C.	over the counter.

D.	with bypassed global channels.

E.	by breaking the distribution monopoly.

235.

Before Apple's iPhone 5 was officially for sale in China, it was being sold there. These phones were purchased in the United States and Australia and then resold by unauthorized vendors in China for between $1,700 and $2,000. These products are considered to be part of

A.	under-the-counter sales.

B.	over-the-counter sales.

C.	the gray market.

D.	integrated global channels.

E.	breaking the distribution monopoly.

236.

Mary Kay, Inc., can be classified as which type of company when marketing its products around the world?

A.	multinational firm

B.	transnational firm

C.	international firm

D.	global marketing firm

E.	multidomestic firm

237.

Since 1963, the guiding principle of Mary Kay, Inc., has been based on

A.	the Consumer Bill of Rights.

B.	the Golden Rule.

C.	caveat emptor.

D.	the American Marketing Association Statement of Ethics.

E.	maximizing profits so long as the firm stays within the rules.

238.

What global market entry strategy did Mary Kay use when it entered India?

A.	direct importing

licensing

C.	indirect exporting

D.	joint venture

E.	direct exporting

Short Answer Questions

239.	Give at least one argument for and one argument against protectionism.

240.	Play devil's advocate. Select any American industry and argue persuasively why protectionism is not only patriotic, it is absolutely essential for survival.

241.	"A signal that the world's trading nations are committed to open markets—and will resist protectionism—would inject confidence and energy into our markets," says the Office of the U.S. Trade Representative. Discuss this statement.

242.	If your primary motive was to raise prices on imports, would you use tariffs or quotas? Why would you want to do this?

243.	Describe the World Trade Organization (WTO) and its purpose.

244.	In recent years, a number of countries with similar economic goals have formed transnational trade groups or signed trade agreements for the purpose of promoting free trade. Describe the three discussed in the textbook.

245.	Three types of companies populate and compete in the global marketplace. Identify and describe each type.

246.	Identify and describe the factors a company should consider in order to do a thorough cross-cultural analysis. In your answer, define cross-cultural analysis.

247.	Why is it wise for global marketers to use back translation? Provide an example to support your answer.

248.	Global marketing is affected by economic considerations. Identify the three steps that should be performed when scanning the global marketplace.

249.	What is meant by the term economic infrastructure and how can this affect a firm's plans to enter a global market?

250.	Define a currency exchange rate and discuss its importance to global companies.

251.	What are the market entry strategy options available to a company seeking to enter the global marketplace? How do they relate to each other in terms of profit potential, risk, financial commitment required, and marketing control?

252.	Explain the difference between indirect exporting and direct exporting. What are the advantages and disadvantages of each approach?

253.	Explain the difference between joint venture and direct investment market entry strategies. What are the advantages and disadvantages of each approach?

254.	Define licensing, cite its advantages and disadvantages, and explain what franchising is.

255.	What are the product and promotion strategies available to a company seeking to enter the global marketplace? How do they relate to each other in terms of the same or adapted product and promotion?

256.	Describe the elements in a global channel of distribution.

257.	Explain the difference between dumping and parallel importing.

258.	Explain why not all nations and regions of the world participate equally in world trade.

259.	Chapter 7 states that a global perspective on world trade views exports and imports as complementary economic flows. Explain this concept.

260.	Explain the trade feedback effect.

261.	Explain the concept of countertrade, and discuss its importance.

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