GLOBAL MARKETING, SVEND HOLLENSEN

MULTIPLE CHOICE QUESTIONS CHAPTER 1-19

(only right answer)

Chapter 1: Global marketing in the firm.

Which of the following is true in terms of SMEs´ marketing expertise?

- Specialist expertise is often a constraint

What does globalization reflect?

- The trend of firms buying, developing, producing and selling products and services in
most countries and regions of the world

Withing the value chain, what is considered as a support activity?

- Procurement

Which of the following is true about value shops?

- It´s a model for solving problems in a service environment

Which of the options is correct in terms of customer experience?

- It provides customer value

Having equipment in some McDonalds´ stores to gather operational data that tracks
customer interactions, traffic in stores and ordering patterns is an example of using
what?
- Big data

Which of the following is not correct in terms of SMEs´ global marketing expertise?
- SME entrepreneurs have a formal business education.

When management believes or assumes that the home country is superior and the needs
of the home country are most relevant in terms of doing business internationally, then
management is thought to have a (n) __________ business orientation.
- Ethnocentric

Which term refers to the phenomenon in which the world´s population shares commonly
recognized cultural symbols?
- Global village

Regionalism is:
- The grouping of countries into regional clusters based on geographic proximity

Within an international context, what are economies of scope´ synonymous with?

- Reusing a resource from one business/country in additional businesses/countries

According to the concept of the value chain, a firm is profitable if:

- The value it commands exceeds the costs involved in creating the product

In which industries is global competition more common?

 - Where upstream and support activities are crucial to competitive advantage

Chapter 2: Initiation of internationalization

Based upon the flowchart in Figure 2.1 showing the pre-internationalization process,
which of the following sentences is correct?
- Proactive motives act as the input for SMEs´ pre-internationalization process

What refers to internal or external events taking place to initiate internationalization?

- Internationalization trigger

What acts as a barrier for internationalization initiation?

- Insufficient market knowledge

Proactive motives for internationalization steam mainly from:

- Internal pull for the company to internationalize

Which of the following are positive reasons for internationalization?

- All the above (market diversification, international competitiveness, economies of
scale).

It is generally believed that SMEs and firm that are in their early stages of
internationalization are more likely to use ______ procedures:
a. ´rules of the thumb´
b. Psychic distance
c. Cultural distance
d. The first of second answer above

In the case od SMEs, increasing internationalization often results in:

- Multi-domestic strategies

In Sven Hollensen´s view, `_____ are perhaps the most critical factor in the initiation of
the internationalization process in the SME´:
- Information and knowledge

Which of the following does not represent a political risk in the internationalization
process:
- Difficulties in obtaining export financing

The following represent major reactive motives for initiating export:

- (all the above) overproduction/excess capacity and unsolicited foreign order,
competitive pressures, extended sales of seasonal products

According to Svend Hollensen, the main internal triggers of export initiation are:
- (all the above) perceptive management, specific internal event, importing as inward
internationalization
Chapter 3: Internationalization theories

What reflects the traditional marketing focus on the firm´s core competences combined
with opportunities in the foreign environment?
- The Penrosian tradition

With reference to the four different modes of entering an international market

(Johanson and Wiedersheim-Paul, 1975), which of the following statements is correct?
- The first stage of entering an international market is characterized by no regular export
activities (sporadic export).

When do transaction costs emerge?

- When market fails to operate under the requirements of perfect competition. (this
described opportunistic behavior).

Which of the following is a basic assumption of the network model?

- Companies usually depend on other companies

Why would K-pop be considered `born-global´?

- They operate in international markets from the earliest days of their establishment

According to the original Uppsala Internationalization Model:

- Lack of knowledge of foreign markets is a barrier to internationalization

An international online firm is most likely:

- A born global firm

The main consequence according to the Uppsala model is that organizations tend to:
- Intensify their commitment towards foreign markets as their experience grows

According to the TCA model, firms integrate _____ in order to reduce transaction costs:
- Vertically

Psychic distance refers to factors such as:

- Differences in language, culture and political systems

According to the incremental approach, firms typically begin their internationalization

by going to those markets that they can:
- Most easily understand

Chapter 4: Development of the firm´s international competitiveness

Which one of the following statements is true about the development of a company´s
international competitiveness?
- Porter´s diamond represent the first stage in the model

Porter´s five-forces model is defined as:

- The state of competition and profit potential in an industry dependent on five basic
competitive forces: new entrants, supplier, buyers, substitutes and market competitors.
Which of the following is correct in terms of perceived value?
- It might lead to brand loyalty

Which of these are considered an example of company resources?

- Human and organization resources

Which of the following statements is true? Competitive benchmarking _____

- Assesses relative market performance compared which main competitors

Why is Airbnb an example of shared economy?

- Airbnb customer are able to make short-term rentals of assets (e.g., holiday homes)
owned by service providers, typically through an online marketplace.

Which of the following is one of the value chain activities?

- Marketing

Which of the following statements about blue oceans is true?

- They denote an environment where companies beat the competition by focusing on
developing compelling value innovations that create uncontested marketplace.

Internationalizing the downstream value chain means that:

- Marketing is moved to a foreign country

Which of the following is not a determinant of the threat of new entrants in Porter´s
Five Forces Model:
- Perceived level of product differentiation

Imperfect competition in international markets occurs in: all the above

According to Porter´s diamond, the characteristics of the _______ play a central role in
explaining the international competitiveness of the firm:
- Home base

The value chain activities by which the firm is regarded as a better performer than any
of its competitors are known as:
- Core competences

What metaphor is used to describe the competitive space where products are not yet
well defined, competitors are not structured, and the market is relatively unknown?
- Blue ocean

According to the. __________, it can be concluded that firms have a competitive

advantage in a market if they offer products of a higher perceived value to the
customers and lower relative costs than competing firms:
- Competitive triangle

The key international marketing principles are:

- Value, focus and competitive advantage
Organizations attempting to compete effectively in global markets are faced with the
following main interrelated challenges:
- Complexity, change, competition and conscience

Which of the following sentences best summarize the differences between the red and
blue oceans strategies?
- In the red oceans, industry boundaries are defined and accepted, and the competitive
rules of the game are known. Blue oceans are occasionally created well beyond
existing industry boundaries.

Chapter 5: Global marketing research

Why international marketing decisions are concerned with allocation of resources

between countries?
- Because they have to deal with different countries

Which question is used to judge effectively the reliability of data sources?

- Who collected the data?

In qualitative research...
- Design is flexible (the interviewer and hid or her competence is the critical element in
the research process).

A study conducted by a market research specialist that covers many topics, where
companies can buy questions in the survey and receive an analysis of the questions
purchased, is an example of:
- Omnibus studies

Chapter 6: The political and economic environment

Political/legal environment compromises three dimensions: _____, host country

environment and general international environment.
- Home country environment

Fishing is an example of ______

- Primary economic activity

Which of the following is true about GNP?

- It is the value of all goods and services produced by a country during a one-year
period

To join the EU, countries must fulfil some conditions (Copenhagen criteria) such as:
- Respect human rights

____ is one of the key elements proposed by Prahalad to thrive in the low-income
market.
- Shaping aspirations (tailoring local solutions to target consumers who want value and
are well aware of the value brands).
Which type of barriers become much more prevalent in times of recession?
- Non-tariff barriers

China is an example of a ______ system:

- Market socialism

In Svend Hollensen´s classification, which of the following is not a major type of political
risk?
- Partnership risk

Which of the following is not a common form of tariff?

- Quotas

The European Union is an example of:

- An economic union

_____ is the economic system whereby the state holds broad powers to serve the public
interest, it decided what goods and services are produced and in what quantities and
demand typically exceeds supply:
- Centrally planes socialism

Which of the following options contains the correct order from the lowest to the highest
level of economic integration:
- From free trade area to customs union to common market to economic union

Among the factors that affect the balance of trade figures are:
- Exchange rates, taxes, tariffs and trade measures

Global marketers should emphasize ___________ in countries ranking low in power

distance:
- Functional product benefits

Chapter 7: The socio-cultural environment

Which of the following is true about culture characteristic?

- It is shared (it is interrelated: that is, one part of the culture is deeply connected with
another part, such as religion and marriage, business and social status).

Which of the following is true about low-context cultures?

- They have high time consciousness

Which reference to Hofstede is model, when people are motivated by a more qualitative
goal set as a means to hob enrichment, this is related to:
- Low masculinity

Which of the following is true about the Self-Reference Criterion (SRC)?

- The first step is to define the problem in terms of home country culture, traits, habits
and norms
Which of the following is not true about high-context cultures?
- Negotiations are lengthy

_____ enhance brand performance in countries that rank high on the power distance
dimension in Hofstede´s model:
- Social brand images

The cultural environment of a country is best defined by which characteristics?

- Values, attitudes, heroes, myths and symbols

Hyperbole, persuasiveness, dreams, great expectations, and comparative advertising are

reflections of which Hofstede´s dimensions?
- Masculinity

Which of the following sentences is not true?

- Characteristics of weak uncertainty avoidance is resistance to change, a desire for
stability

Chapter 8: The international market selection process

Which approach do LSEs use in the international market selection process?

- The systematic approach

What is the problem with defining international markets´ as a country or group of

countries?
- Country boundaries do not necessarily relate to differences in buyer characteristic.

Which of the following is considered as a fine-grained screening method?

- The market attractiveness/competitive strength matrix

What is considered to be one of the drawbacks of traditional approached to

segmentation?
- It is difficult to be consistent about segmentation across different markets.

Which option best describes the waterfall approach?

- It is a suitable approach for unexperienced companies to enter new markets.

Within the Herfindahl index, what does **** C represent?

- The export concentration index.

SME´s choice of international market selection is often limited to:

- Immediate neighbors

High degree of measurability, accessibility and actionability in international market

segmentation equals analysis of general characteristics such as geographic, language,
political factors, etc.
- True
Which of the following represent the main determinants of a firm´s choice for
international markets?
- The environment & the firms´ characteristics

BERI, a useful tool in the coarse-grained, macro-oriented screening of international

markets, stand for:
- Business Environment Risk Index

Income and population are two variables that can be used in ________ segmentation:
- demographic

Which of the following tools measures the general quality of a country´s business
climate?
- (all the above) Euromoney, BERI, BMI

The ___ is based upon the identification of relative changes in international import
shares among various countries.
- Shift-share approach

According to which approach have multinational companies stripped away features of

new products or technologies, originally for advanced countries, in order to offer them
at lower prices to people in developing countries?
- The waterfall approach

The least demanding targeting strategy in international marketing is:

- Undifferentiated

SMEs´ choice for international market selection is often limited to:

- Immediate neighbors

Which of the following are positive reasons for internationalization?

- (all the above) market diversification, economies of scale, international
competitiveness

Which of the following is not a major reactive motif for initiating export?
- Foreign market opportunities/market information

How can a marketer use the age distribution of the population in a market?
- The marketer can use it to identify the potential number of customers in various age
groups

Chapter 9: Approached to the choice of entry mode

Company X is planning to enter the Chinese market using the same entry mode used for
the German market. Which rule are they using?
- Naïve

Which of the following is true about friction?

- It´s caused by opportunistic behavior
Which of the following is correct in terms of the choice of entry mode?
- The choice depends on several conflicting forces (4: internal, external factors, desired
mode characteristics, transaction-specific behavior).

One of the following is not among the main internal factors affecting the choice for
market entry mode:
- Demand uncertainty

The foreign entry mode pertaining to the lowest level of control and risk is the __ mode.
- Export

The rule whereby the decision maker uses a workable entry mode for each foreign
market, although this may not be the best entry mode, is also known as:
- The pragmatic rule

SMEs most probably use:

- The naïve or pragmatic rule

The main benefit of planning an international centralized decision-making structure is

that:
- Is facilitates international coordination

The main advantage of employing a differentiation strategy in international markets lies

in that:
- The focus is taken away from price

One of the following does not represent a general market risk in the internationalization
process:
- Lack of tax incentives for organizations that export

Chapter 10: Export mode

In which situations is export a typically used international market entry mode?

- When production is concentrated in a single or a limited number of locations (due to
substantial economies of scale or limited number of buyers).

When would a company use indirect export mode?

- If the company is interested in gradually engaging with international markets.

Thinking of direct and indirect export modes, which of the following applies to direct
export modes?
- It includes export through foreign-based agents and distributors (independent
intermediaries)

Company A joins companies B & C (which provide complementary products) to export

their products with a local representative. Which exporting mode do they use?
- Export marketing group
Piggybacking brings the following main disadvantage(s) to the carrier:
- The rider may not maintain the quality of the product sold by another company

Which is the most traditional and well-established form of operating in foreign

markets?
- Exporting

Which of the following approaches is most appropriate for an organization with little
experience in international markets?
- Exporting

One of the main criticisms of the Uppsala model is that the internationalization model is
not valid for:
- Service organizations

Chapter 11: Intermediate modes

Which of the following applies to the intermediate entry mode?

- It is a vehicle for the transfer of knowledge and skills

Unlike contract manufacturing, which of the following is true about licensing?

- The contract is usually for a longer term

Which of the following has contributed towards the rapid growth for franchising?
- The decline of traditional manufacturing

In contrast to a joint venture, the formal difference is that a strategic alliance ____
- Is typically a non-equity cooperation

The fundamental basis of the relationship between the exporter and the intermediary is
the:
- Contract

The formal differences between a joint venture and a strategic alliance is that the latter
one is typically a(n):
- Non-equity alliance

An appropriate entry strategy for a company seeking a limited form of participation in

global markets is:
- Licensing

One of the international agreements by which an organization establishes local

production in foreign countries without capital investment is:
- Licensing

The overall goal of _______ is to achieve global competitiveness through recognizing

cross-border market similarities and differences and to link the capabilities of the
organization across national boundaries:
- A transnational organization
Chapter 12: Hierarchical modes

Which of the following is true about hierarchal modes?

- The degree of control that head office can exert on the subsidiary will depend on value
chain functions.

Thinking of resident sales representatives/foreign sales, in which is of the following cases

should a company consider using domestic´ sales representatives?
- For order taking

Which of these is downside of establishing production subsidiary?

- Greats investment

Which of these is the best way to cope with subsidiaries being vulnerable to closure?
- Asking managers to take initiatives

Within a transnational organization, management should be sensitive when _____

- Adopting expertise from different market

Company X (MNC) is evaluating its subsidiary. When would you advise it to withdraw
the subsidiary?
- If the market is entered by more efficient competitors

Among the main reasons why a firm would employ sales subsidiaries are:
- (all the above) the possibilities to transfer greater autonomy to these subunits, the
possibilities to transfer greater responsibility to these subunits, the desire to be closer
to its customers as well as potential tax advantages.

The main risks associated with establishing sales and production subsidiaries are:
- (all the above) Subsequent withdrawal from any foreign market can be extremely -
costly in terms of reputation in international markets/ financial costly/ costly in terms
of reputation in the domestic market

What is the main benefit of acquisition over other hierarchical entry modes?
- Rapid entry

In international marketing the main differences between a foreign branch and a foreign
subsidiary is:
- A foreign subsidiary is a local company owned and operated by a foreign company
under the laws of the host country.

Chapter 13: International sourcing decisions

Why is it important to outsource some activities/functions?

- It´s often more efficient
Thinking of subcontracting and outsourcing, which of the following applies to
outsourcing?
- Moving functions out of the organization

Which of these is the main problem with approaching the internationalization process as
a learning process?
- The presence of a deterministic and mechanistic path that must be followed by firms
implementing their internationalization strategy.

Which of these is an example of hardware?

- Machines

OEM stands for:

- Original Equipment Manufacturer

In the process of developing a business relationship in international markets, SMEs are

likely to be:
- Reactive

One of the following is not a basic element of the buyer-seller interaction model:
- The value chain

Kanter argues that organizations will have a better relationship with their business
partners if they look for the following three key selection criteria:
- Self-analysis, chemistry, compatibility

Original equipment manufacturers (OEM) are different from other typical buyer-seller
relationships in that:
- OEMs have much stronger bargaining power than the subcontractor

Multinationals have been criticized for:

- (all the above) having a significant impact on government policy primarily through the
threat of market withdrawal, dominating over local firms and offering higher wages,
creating a ´race to the bottom´ through their capital mobility

One criticism of outsourcing is that:

- Product quality suffers

The differences between management know-how and project know-how lies in that:
- Project know-how refers to project management, assembly and environmental know-
how, while management know-how generally refers to tactical and operational
management

McDonalds is an example of a:
- Horizontally integrated multinational corporation

Which of the following is not one of the basic internationalization routes suggested by
Andersen et al (1995)?
- Dependent internationalization
Chapter 14: Product decision

Thinking of service characteristic, which of the following is true?

- Service is intangible and payment is for use or performance

Rapid TTM is important because _____

- It provides competitive advantage

Why must a manufactured product have as good a quality as required by the customer
(i.e., as good as necessary), but not as good as technically feasible?
- Because it will be too expensive for the customer

Why is product positioning a key element in the successful marketing of any

organization in any market?
- Because it allows the company to command more than a simple commodity or utility
price.

Which of the following is a dynamic customization principle?

- Modularity

Which of these best explains long tail theory?

- In the internet era, selling fewer quantities to more people is a strategy that can be
pursued successfully

If you were a marketer for an organization selling software products and you were
assigned the task of evaluating a few international markets with a view to entering them,
a crucial factor that you would take into account would be:
- The technological factor

Global branding is a branding alternative that bears great advantages such as:
- (all the above) uniform world-wide image, elimination of brand confusion easy
identification and recognition, reduction of advertising costs

The strategy involving the introduction of a standardized product with the same
promotion strategy throughout the world market is known as:
- Straight extension

In international marketing it is much easier to:

- Standardize the core product benefit across markets rather than do standardize the
support services.

The strategy consisting of adapting both product and promotion for each market is
known as:
- Dual adaptation

The main differences between the gray and the black markets are:
- (all the above) (grey market not illegal, black market illegal, grey market refers to the
flow of goods through unauthorized distribution channels i.e., not illegal goods)
Chapter 15: Pricing decisions and terms of doing business

Which of this is true about price?

- Price is the only element of the marketing mix that is directly linked to profits

Which of these described a problem associated with price skimming?

- The need for a lot of resources to maintain a high-quality product.

Incoterms include _____

- Standard definitions for term of sale (described price quotation)

Export credit insurance ____

- Covers political risks

Which of the following does not contribute to price escalation in foreign markets?
- Product image

______ implies that the export price quote includes cost of deliver to the importer´s
premises:
- Delivery duty paid

`Cost and freight´ is a popular term of sale which implies that:

- The seller´s liability ends when the goods are loaded on board a carrier or are in
custody of the carrier at the export dock

______ implies that the process in the individual countries may only vary within a set
range:
- A price corridor

The most restrictive type of countertrade is:

- barter

Which of the following foes not contribute to price escalation in foreign markets?
- Product image

Tariff levels from country to country affect an organization´s ____ strategies

- pricing

Chapter 16: Distribution decisions

Although the communication mix carries information of interest to the customer, in the
end it is designed to _____’
- Convince the customer to buy a product/service

Company M decided to distribute its product through only one intermediary: company
A. This is an example of ___
- Exclusive coverage
Which of these is an advantage of multiple channel distribution strategy?
- High market coverage

Which of the following is part of Arnold´s guidelines to the international marketer

(manufacturer) in order to anticipate and correct potential problems with international
distributors?
- From the start, maintain control over market strategy

Blockchain helps marketers to _____

- Tell a products story based on documentation

What is the function of the `banana split´ model?

- It shows the high retailing power retailers have against the food and grocery
manufacturers.

In international marketing, the most critical distribution questions are:

- `choice of international shipping method´ and `choice of local logistics in foreign
markets´

`Locked-up` channels occur for all the following reasons except:

- Channel members´ ability to change allegiance without major negative consequences

Consumer product channels tend to be ____ industrial product channels

- Longer than

When an organization´s intermediary is located in the target foreign market, the

international entry model is known as:
- Direct exporting

The most restrictive type of countertrade is:

- Barter

One of the following is not a form of letter of credit:

- Confirmed revocable L/C

Chapter 17: Communication decisions (promotion strategies)

Thinking of communication in global marketing, which of the following is correct?

- It´s designed to communicate with and persuade the customer

Thinking of budget decisions, which of the following applies to the affordable approach?
- It ensures equality among different markets

Which of the following is true about international advertising strategies?

- Successful campaign focus on both the creative and implementation challenges

One of the advantages of WoM is:

- It can be more effective than traditional printed advertising
Chapter 18: Cross-cultural sales negotiations

How does culture affect the negotiation process?

- Directly, culture directly influence the negotiation process

A company A is about to start negotiations with an Asian country. The management was
advised to use titles and status as well as to avoid using negotiator’s first name. Which
dimension of Hofstede does this advice align with?
- Power distance (this dimension refers to the acceptance of authority differences between
those who have power and those affected by power).

Which of the following would help companies in transferring their best practices to other
international markets?
- Companies should compare their procedures with other companies in the international
markets (comparing = benchmarking).

A _____ style is the pattern of behavior an individual develops in response to conflict

with others, such as differences of opinion:
- Conflict management

____ is a type of negotiation in which the buyer and seller of a product dispute the price
which will be paid and the exact nature of the transaction what will take place in hope
that they will come to an agreement:
- Bargaining

Business negotiations between which cultures usually result in more cooperative and
creative behavior?
- When a businessperson from a low masculine culture meets a business person from a
low power distance culture

What is the main benefit of having a good BATNA?

- In increases negotiation power

Compared to negotiators from low risk-avoidance countries, negotiators from high risk-
avoidance countries are likely to seek:
- (Answer #1 and #2) specific commitments in terms of volume, timing and
requirements, clearly defined structure and guidance

The main differences between bribery and lubrication are:

- (all the above) (lubrication payments involves small cash sums, gifts, or services etc.,
bribery involves large sum of money, lubrication payments accompany requests for a
person).

Chapter 19: Organization and control of the global marketing programme

Company A (small enterprise with no international experience) is going to begin its

international business activities soon. The global marketing activities will be handled by
the current marketing department and the export department will be a sub-department
of the marketing one. Which structure is company A following?
- Functional structure

Which of the following is true of global account management?

- It is a relationship-oriented marketing management approach focusing on dealing with
the needs of an important global customer (an account) in the business-to-business (B2B)
market.

The purpose of a marketing budget is ______

- To pull all the revenues and costs involved in marketing together into one
comprehensive document.
+
Which staffing policy is the most consistent with an international multidomestic strategy:
- Polycentric

A strategy of ____ pricing involves using prices as a competitive weapon in order to push
competitors out of a national market:
- Predatory

GAM stands for _______:

- Global Account Management

Philip Kotler distinguishes the following four types of marketing control, each involving
different approaches, purposes and allocation of responsibilities:
- Strategic control, efficiency control, annual plan control and profit control

In which of the following situations do geographical structures best serve firms wishing
to internationalize?
- When firms have homogeneous range of products that need fast and efficient world-
wide distribution.

The belief that a very technically component employee from a domestic market will
perform just as well in any of the foreign countries where the organization operates is a(n)
_____ approach to international HR staffing:
- High risk

Which type of marketing structure implies that divisions become primarily responsible
for the development and implementation of the overall international strategy?
- The international division structure

One of the main advantages of an ethnocentric staffing policy in international markets is:
- It facilitates the transfer of core competencies to and among the firms´ foreign
subsidiaries

Which type of relationship has the advantage of allowing the understanding of global
account opening?
- The `diamond´ relationship
According to Svend Hollensen, the simplest approach to global marketing organization is
represented by:
- The functional structure

The main situations when the existence of regional management center is necessary are:
- `when sales volume in a particular region becomes substantial´ and `when each region
needs to be treated separately due to the homogeneity within regions and the
heterogeneity between them´ are correct.