Test Bank For Marketing 2014 17th Edition Pride

Test Bank for Marketing 2014, 17th Edition : Pride
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Chapter 9—Reaching Global Markets
ESSAY
1. Describe the cultural and social forces that affect international marketing strategy.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 09-02

NAT: BUSPROG: Analytic STA: DISC: Research
KEY: Bloom's: Knowledge
2. In what ways can a nation restrict the flow of imported goods?
ANS:
PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 09-02

NAT: BUSPROG: Analytic STA: DISC: Strategy
3. Describe how economic and technological forces affect marketing strategies.
ANS:

4. What marketing and ethical problems can bribes create in international marketing transactions?
ANS:

NAT: BUSPROG: Ethics STA: DISC: Research
5. What effects are technological forces having on international marketing? What opportunities exist in
the global marketplace that marketers can exploit with regard to technology?
ANS:

NAT: BUSPROG: Technology STA: DISC: International Perspective
6. What effect is NAFTA having on the international trade of the following countries: United States,
Canada, Mexico, and Japan?
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ANS:

NAT: BUSPROG: Analytic STA: DISC: International Perspective
7. Explain why the mode of entry into an international market is a major issue for managers to consider.
ANS:

8. In what ways can businesses become involved in international marketing activities?
ANS:

9. How do globalized marketing strategies differ from customized marketing strategies? What are the
implications of each for marketing managers?
ANS:

10. Describe the difficulties encountered in standardizing the marketing mix globally.
ANS:

MULTIPLE CHOICE
11. Before the 1990s, most firms entered international markets

a. globally and quickly.
b. incrementally and slowly.
c. incrementally and quickly.
d. domestically and slowly.
e. regionally and quickly.
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 09-01 NAT: BUSPROG: Analytic STA: DISC: Strategy
12. According to your text, ____ are small technology-based firms operating in international markets
within two years of their establishment and realizing as much as 70 percent of their sales outside the
domestic home market.
a. "natural globals"
b. "multinational corporations"
c. "born globals"
d. "born multinationals"
e. "multinational enterprises"
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 09-01 NAT: BUSPROG: Diversity STA: DISC: Research
13. Approximately ____ of the world's purchasing power is outside of the United States.
a. 1/10
b. 1/3
c. 2/3
d. 1/2
e. 9/10
14. The forces that affect foreign markets may differ dramatically from those affecting domestic markets.
This makes a careful ____ a critical part of a successful international marketing strategy.
a. political analysis
b. regulatory analysis
c. social audit
d. environmental analysis
e. marketing analysis
ANS: D PTS: 1 DIF: Difficulty: Easy
KEY: Bloom's: Comprehension
15. When Starbucks decided to expand into the international markets of India, Japan, and Argentina,
management realized that there would be significant differences in the standards of living, credit,
buying power, and income distribution in those countries. Starbucks is currently examining the ____
forces in its environmental analysis.
a. economic
b. cultural
c. ethical
d. technological
e. legal
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 09-02 NAT: BUSPROG: Diversity | BUSPROG: Reflective Thinking
STA: DISC: Strategy | DISC: Research KEY: Bloom's: Application
16. In China, the price of imported Scotch is $30 per glass as opposed to Scotch from China which is $3.
Which of the following do you think accounts for the difference in price?
a. Exchange control
b. Balance of trade
c. Import tariff
d. Embargo
e. Export tariff
17. Which of the following is often used to raise revenue for a country and/or to protect domestic
products?
a. Quota
b. Warning label
c. Embargo
d. Import tariff
e. Exchange control
18. If Tasmania levied a duty on all goods purchased from the United States and other countries outside its
borders that were brought into Tasmania, its businesses and citizens would be paying a(n)
a. embargo.
b. import tariff.
c. travelers' tax.
d. export tax.
e. foreign duty.
KEY: Bloom's: Application
19. If Germany, in an attempt to bolster the sales of its own auto manufacturers, decided to limit the
number of automobiles that could be brought in from other countries, Germany would be using a(n)
a. embargo.
b. boycott.
c. exchange control.
d. import tariff.
e. quota.
ANS: E PTS: 1 DIF: Difficulty: Moderate
20. Italy currently limits the number of Coach bags that can be imported during a one-year period, since
Coach bags are made in New York, USA. This is an example of a(an) ____
a. exchange control limit.
b. embargo.
c. quota.
d. import tariff.
e. supply limit.
ANS: C PTS: 1 DIF: Difficulty: Moderate
21. When a glove manufacturer in China is allowed to sell only a certain number of plastic gloves into
Japan, that firm is facing a(n)
a. tariff.
b. embargo.
c. restrictive product standard.
d. quota.
e. balance of trade restriction.
ANS: D PTS: 1 DIF: Difficulty: Moderate
22. The United States' prohibition against importing cigars from Cuba is an example of a(n)
a. health control.
b. quota.
c. embargo.
d. exchange control.
e. import control.
23. Government restrictions on the amount of a particular country's currency that can be bought or sold are
known as
a. embargoes.
b. quotas.
c. exchange controls.
d. import controls.
e. balance of trade controls.
24. ____ can force businesspeople to buy and sell foreign products through a central agency, such as a
central bank.
a. Embargoes
b. Export tariffs
c. Quotas
d. Import tariffs
e. Exchange controls
25. Which of the following is used to help maintain a more favorable balance of trade by a country?
a. Limiting imports
b. Limiting exports
c. Establishing exchange controls
d. Increasing gross domestic product
e. Changing political systems
ANS: A PTS: 1 DIF: Difficulty: Easy
26. The ____ is the difference in value between a nation's exports and its imports.
a. net trade value
b. export/import ratio
c. gross domestic product
d. balance of payments
e. balance of trade
OBJ: LO: 09-02 NAT: BUSPROG: Analytic
STA: DISC: International Perspective KEY: Bloom's: Knowledge
27. The gross domestic product is

a. a measure of the profit made by all firms in a nation.
b. the average annual earnings per person in a nation.
c. a measure of the types of products produced by a nation.
d. an overall measure of a nation's economic standing.
e. a ratio of domestic products to products produced in foreign countries.
OBJ: LO: 09-03 NAT: BUSPROG: Analytic STA: DISC: Research
28. The country with the highest GDP is

a. Japan.
b. the United Kingdom.
c. Brazil.
d. the United States.
e. China.
29. In considering the viability of potential international markets for Pepsi products, PepsiCo is advised to
take into account ____, which provides insight into market potential.
a. per capita gross domestic product
b. gross domestic product
c. the quantity of exports
d. the quantity of imports
e. total consumer income
30. The Mont Blanc Company plans to export expensive consumer gift items to Germany. The best overall
economic measure of market potential would be Germany's
a. gross domestic product.
b. gross domestic product per capita.
c. gross national product.
d. balance of trade.
e. unemployment rate.
31. Caterpillar, maker of large construction equipment in the U.S., would like to better understand factors
that would affect its ability to export its products to various countries. Which of the following forces
determine how trade barriers affect Caterpillar's marketing efforts?
a. Political and legal
b. Economic
c. Industrial and Technological
d. Technological and Legal
e. Economic and political
OBJ: LO: 09-02 NAT: BUSPROG: Reflective Thinking STA: DISC: Strategy
32. Special interest groups and regulatory bodies are ____ forces that must be taken into account in
international marketing.
a. socioeconomic
b. technological
c. economic
d. social and ethical
e. political and legal
ANS: E PTS: 1 DIF: Difficulty: Easy
33. Select the true statement.

a. Legislation regulating marketing in many foreign countries is being eased.
b. A government's attitude toward cooperation with importers has little impact on marketing
to that country.
c. Refusing to give payoffs and bribes in some foreign countries may put a marketer at a
competitive disadvantage.
d. Bribes and payoffs are considered unethical in all countries and cultures.
e. Bribes and payoffs are supported by U.S. trade policies under certain conditions.
STA: DISC: International Perspective KEY: Bloom's: Comprehension
34. The Foreign Corrupt Practices Act of 1977 makes it illegal for U.S. firms to
a. attempt to make large payments or bribes to influence policy decisions of foreign
governments.
b. offer foreign businesses any type of incentive for purchasing their company's products and
services.
c. change their ethical standards when dealing with foreign firms.
d. give even small tips or gifts in countries where such gifts are customary business practices.
e. introduce any type of corruption into foreign businesses that have higher ethical standards
than those of the U.S. firm.
35. If a certain country considered handshakes in business transactions to be taboo and preferred to use
nodding, this would be an example of differences in ____ forces.
a. cultural
b. political
c. sales
d. sociological
e. regulatory
OBJ: LO: 09-02 NAT: BUSPROG: Communication | BUSPROG: Diversity
STA: DISC: Strategy KEY: Bloom's: Comprehension
36. When products are introduced into one nation from another, acceptance is far more likely
a. if prices are set very low.
b. when bribes are paid to local officials to aid distribution.
c. if there are similarities between the two cultures.
d. if packaging is adjusted to match local preferences.
e. when retailers are given incentives to push the products.
37. Marketers of computer software, music CDs, and books are particularly affected by cultural
differences in
a. socioeconomic status of citizens.
b. advances in technology.
c. differences in cross-cultural exchange behavior.
d. ethical codes of conduct for businesses.
e. standards regarding intellectual property.
38. Many companies choose to standardize their ____ across national boundaries to maintain a consistent
and well-integrated corporate culture.
a. technology
b. ethical behavior
c. language
d. dress code
e. products
ANS: B PTS: 1 DIF: Difficulty: Easy
39. In many developing countries around the world, technology is enabling opportunities to "leapfrog"
existing technology. What does this mean?
a. These countries are able to forgo current technological advances in order to wait for even
better technology to be developed.
b. More advanced technology is reaching these countries even though they lack technological
infrastructures.
c. Technological advances are often offered at prices considerably lower than in well-
developed countries.
d. The technology in developing countries is rapidly surpassing the technology in well-
developed countries.
e. The existing technological infrastructures in these countries are rapidly being replaced by
newer, more advanced technology.
40. The unconscious reference to one's own cultural values, experiences, and knowledge when
encountering new and different cultures is known as
a. the "when-in-Rome" approach.
b. the Fraedrich Principle.
c. cultural relativism.
d. the self-reference principle.
e. the self-reference criterion.
41. ____ refers to the idea that morality varies from one culture to another and that business practices are
therefore differentially defined as right or wrong by particular cultures.
a. The self-reference criterion
b. Global ethics
c. Economic relativism
d. Cultural relativism
e. Moral relativism
42. Maquiladoras are

a. exchange controls from central banks in Latin American countries.
b. production facilities in north-central Mexican states.
c. import-export agents of the Mexican government.
d. global marketing programs established in Latin American countries.
e. freight forwarders from Mexico.
43. The agreement between the United States, Canada, and Mexico that merges these three countries into
one marketplace is called
a. EU.
b. MERCOSUR.
c. APEC.
d. NAFTA.
e. GATT.
44. Walmart is currently expanding its stores into Canada and Mexico. This expansion is being facilitated
by the
a. European Union.
b. North American Free Trade Agreement.
c. Pacific Rim Unification Act.
d. International Retail Alliance Association.
e. Latin American Free Trade Association.
45. One of the effects of NAFTA is the simplification of country-of-origin rules. This will likely hinder
the international trade activities of
a. Canada.
b. Japan.
c. Brazil.
d. Cuba.
e. Panama.
46. Which of the following is not true of NAFTA?

a. The agreement has a long adjustment phase-in time period.
b. Increased competition should lead to a more efficient market.
c. It will provide additional opportunities for the United States in long-term affiliations with
other countries in the Western hemisphere.
d. It is controversial.
e. Business licensing requirements have been increased.
47. Which of the following is true about NAFTA?

a. It remains politically controversial.
b. It will increase the total output of goods and services to foreign markets.
c. It will decrease the total number of jobs in the United States.
d. It eliminated all tariffs on goods traded between the United States, Canada, and Mexico.
e. It will reduce the number of illegal aliens in the United States.
48. Another name for the European Union is
a. the Common Market.
b. the European Market.
c. the Euro.
d. NAFTA.
e. AECO.
49. The unification of Europe through the European Union (EU)

a. produced the largest single market in the world.
b. calls for greater customization of products and attention to regulations and restrictions of
European countries.
c. means that members of the EU have become more heterogeneous in their needs and wants.
d. required the countries to be segmented into many different markets.
e. permits virtually free trade among the member nations of the EU.
50. All of the following European countries use a common currency, the _____, except for _____, which
uses its own currency.
a. euro; France
b. euro; England
c. dollar; England
d. euro; Germany
e. euro; Austria
51. Johnston Chemicals' president is very excited about the possibility of the firm's British subsidiary
having access to customers in the entire EU. He realizes that it will be some time before this area truly
becomes one market, primarily because of differences in which of the following?
a. Available advertising media
b. Cultural factors
c. Legal challenges
d. Technological advances
e. Economic environmental factors
ANS: B PTS: 1 DIF: Difficulty: Challenging
52. The trade alliance that includes Brazil, Argentina, Chile, and other countries is known as
a. OPEC.
b. APEC.
c. MERCOSUR.
d. NAFTA.
e. the Common Market.
53. Which of the following alliances/agreements is the United States not a part of?
a. NAFTA
b. APEC
c. GATT
d. WTO
e. MERCOSUR
ANS: E PTS: 1 DIF: Difficulty: Easy
54. The Common Market of the Southern Cone (MERCOSUR) includes

a. countries from southern Africa.
b. both India and Indonesia.
c. Australia and New Zealand.
d. countries in South America.
e. southern China and India.
55. Which of the following trade alliances differs from others in its commitment to facilitating business
and its practice of allowing the private sector to participate in a wide range of activities?
a. NAFTA
b. EU
c. MERCOSUR
d. WTO
e. APEC
56. Which of the following countries has made the greatest inroads into other world markets?
a. Indonesia
b. Philippines
c. Malaysia
d. Japan
e. China
57. Many marketers claim that ____ will become the world's largest market.
a. Japan
b. the United States
c. China
d. Thailand
e. India
58. Which of the following agreements provides a forum for tariff negotiations, reducing trade restrictions,
resolution of international trade problems, and ground rules for international trade?
a. The World Trade Organization
b. The North American Free Trade Agreement
c. The Latin American Free Trade Agreement
d. The European Union Free Trade Agreement
e. The General Agreement on Tariffs and Trade
59. If a newly formed country wanted to increase its international trade and reduce worldwide tariffs, it
would most likely try to become a part of
a. NAFTA.
b. WTO.
c. MERCOSUR.
d. APEC.
e. EU.
60. The term dumping refers to the sale of

a. products sold in foreign markets that cannot be sold in the United States.
b. products sold in foreign markets at prices above those charged in the United States.
c. all discontinued U.S. products in foreign countries.
d. products sold in foreign countries at unfairly low prices.
e. products sold in foreign markets that cannot pass safety standards in the United States.
61. If Hyundai, a Korean automobile manufacturing firm, started selling its cars at unfairly low prices to
Germany, Hyundai would be engaging in
a. quota-enforcing.
b. embargoing.
c. shoveling.
d. dumping.
e. dipping.
62. The World Trade Organization accomplishes all of the following except
a. educating companies about international trade rules.
b. lending money to businesses interested in developing international markets.
c. serving as a forum for trade negotiations.
d. helping settle trade disputes.
e. providing legal ground rules for international commerce.
63. At the heart of the ____ are agreements that provide legal ground rules for international commerce and
trade policy.
a. United Nations
b. GATT
c. MERCOSUR
d. WTO
e. APEC
64. When a firm's products sell in foreign countries with little or no effort to obtain foreign sales, the firm
is engaging in
a. international marketing.
b. global marketing.
c. limited exporting.
d. product licensing.
e. unplanned exporting.
65. High Plains Furnishings, a furniture manufacturer in southern Montana, markets its furniture products
in markets within the United States. It has also found several niche target markets in Finland, Chile,
and Argentina. High Plains Furnishings is engaging in
a. domestic marketing and limited exporting.
b. localized marketing and domestic marketing.
c. globalized marketing.
d. domestic marketing and international exporting.
e. localized marketing and globalized marketing.
OBJ: LO: 09-04 NAT: BUSPROG: Reflective Thinking
STA: DISC: International Perspective KEY: Bloom's: Application
66. Which of the following lists the levels of involvement in global marketing from the lowest to the
highest?
a. International marketing, limited exporting, domestic marketing, globalized marketing
b. Limited exporting, domestic marketing, globalized marketing, international marketing
c. Globalized marketing, international marketing, limited exporting, domestic marketing
d. Domestic marketing, globalized marketing, international marketing, limited exporting
e. Domestic marketing, limited exporting, international marketing, globalized marketing
67. The purchase of products from a foreign source is called

a. exporting.
b. dumping.
c. importing.
d. licensing.
e. venturing.
68. When the American company Exxon purchases crude oil from Saudi Arabia, it is engaging in
a. licensing.
b. importing.
c. free trade.
d. exporting.
e. dumping.
69. Henderson Synthetics is a producer of chemical products aimed at increasing agricultural yield per
acre. Henderson Synthetics’ management believes that several of the firm's products could have
sizable markets in other countries, however, it is costly to obtain market research to confirm this. If
Henderson Synthetics wanted to temporarily “try out” these international markets with a minimal level
of commitment and cost, it should use
a. contract manufacturing.
b. exporting.
c. joint ventures.
d. licensing.
e. subsidiaries.
70. The extent of Raytheon's participation in global business is selling the batteries it manufactures to
companies in Spain. In this case, Raytheon is a(n)
a. trading company.
b. importer.
c. exporter.
d. franchiser.
e. contract manufacturer.
71. The Grummond Group buys air conditioner components in industrialized countries and sells them to
business customers in developing countries where the air conditioners are assembled. Grummond is
most likely classified as a(n)
a. trading company.
b. strategic alliance.
c. joint venture.
d. licensee.
e. exporter.
72. The role of export agents is to

a. bring buyers and sellers from different countries together and collect a commission for
arranging sales.
b. purchase products from different companies and sell them to foreign countries.
c. help a firm to make direct investments in foreign countries.
d. contact domestic firms about the opportunities available in exporting.
e. arrange for licensing agreements between domestic and foreign firms.
73. How does using an exporting intermediary limit the risk involved with global marketing?
a. Most exporting intermediaries assume all financial risks on behalf of their clients.
b. Exporting intermediaries are not subject to the same laws as companies, and therefore
limit the legal risk involved.
c. Using an exporting intermediary restricts a company to being involved with joint ventures
and not direct ownership.
d. Exporting intermediaries guarantee that the products a company is selling will be a good
fit for the foreign markets they are entering.
e. This approach involves limited risk because the company has no direct investment in the
foreign country.
74. A company not involved in manufacturing that brings together buyers and sellers in different countries
is usually referred to as a
a. franchise.
b. contract manufacturer.
c. strategic intermediary.
d. trading company.
e. joint venture.
75. A large farming cooperative that focuses on the production of fruits and vegetables uses a business that
sells the farmers' products in foreign countries and also provides consulting, insurance, legal
assistance, and warehousing to the cooperative. This business would most likely be called a(n)
a. trading company.
b. export specialist.
c. contract wholesaler.
d. licensor.
e. strategic partner.
76. A(n) ____ is an organization that links buyers and sellers in different countries but is not involved in
manufacturing.
a. trading company
b. exporter
c. joint venture
d. strategic alliance
e. licensee
77. Questor Corporation owns the Spalding brand name but does not produce a single golf club or tennis
ball. This arrangement is an example of what type of involvement level for international marketing?
a. Exporting
b. Trading
c. Joint venture
d. Strategic alliance
e. Licensing
78. If Caterpillar wished to reach the market in Malaysia but was leery of a direct investment in the
country, it might provide a Malaysian operation with the knowledge to produce and market its
products in exchange for a commission. This type of arrangement is called
a. licensing.
b. exporting.
c. a strategic alliance.
d. a joint venture.
e. contract manufacturing.
ANS: A PTS: 1 DIF: Difficulty: Challenging
79. What level of commitment in international marketing may be most attractive when the political and
economic stability of a foreign country is questionable?
a. Joint ventures
b. Direct ownership
c. Exporting
d. Limited exporting
e. Licensing
80. A special form of licensing in which one company grants another company the right to market its
product in accordance with its standards in exchange for a financial commitment is called
a. a joint venture.
b. contract manufacturing.
c. direct licensing.
d. franchising.
e. a strategic alliance.
81. Tony & Guy is a global hairdressing and education business headquartered in England. It has recently
opened salons in Mongolia, adding to its numerous salons worldwide. Tony & Guy allows foreign
businesspeople to use its name, logo, methods of operation, advertising, and products. In exchange,
Tony & Guy receives a financial commitment and an agreement to conduct business in accordance
with its standard of operations. Tony & Guy is engaging in
a. contract manufacturing.
b. licensing.
c. franchising.
d. exporting.
e. direct investment.
ANS: C PTS: 1 DIF: Difficulty: Challenging
82. Franchising offers all the following benefits for franchisers except
a. franchise agreements require a certain standard of behavior from franchisees, which helps
protect the franchise name.
b. franchisers can retain control of their name while increasing global penetration of their
products.
c. the franchisee's revenue stream is fairly consistent because franchisers pay fixed fees and
royalties.
d. the franchiser's revenue stream is fairly consistent because franchisees pay fixed fees and
royalties.
e. franchisers do not have to put up a large capital investment.
83. Which of the following would be a benefit to a franchiser, such as Jiffy Lube, in expanding into
international marketing?
a. There are no risks involved with allowing a foreign franchisee.
b. The franchiser does not have to put up a large capital investment.
c. The franchiser does not have to share its name or operational procedures.
d. The franchisee only pays a set fee every month to the franchiser.
e. An equal partnership is formed between the franchiser and franchisee.
84. Which of the following describes a company hiring a foreign firm to produce a designated volume of
its product to specification?
a. Licensing
b. Contract manufacturing
c. Exporting
d. Importing
e. Direct investment
85. If The Limited Company relies on hiring a foreign textile manufacturer to produce a designated
amount of clothing for its Express, Limited, and other stores, it is using
a. exporting.
b. franchising.
c. contract manufacturing.
d. a joint venture.
e. licensing.
86. Some hospitals in the United States find that their need for radiologists to read X-rays is volatile
during the evening and early morning hours, especially between 2:00 and 6:00 am. This is because the
number of emergency room visits needing X-rays is usually lower than those required during daytime
operating hours. There is a recent trend where hospitals in the United States are contracting
radiologists from countries such as Australia to read the electronically-transmitted X-rays during the
evening and early morning hours. This is an example of
a. outsourcing.
b. licensing.
c. franchising.
d. contract manufacturing.
e. contract sourcing.
87. A business partnership between a domestic firm and a foreign firm is known as
a. a joint venture.
b. an international partnership.
c. a multinational enterprise.
d. licensing.
e. exporting.
88. The Cooper Tire & Rubber Company has been searching for less expensive raw materials for
manufacturing its bicycle tires. Cooper has found that there are less expensive sources in the country
of Indonesia, but it needs to form a partnership with the government of Indonesia in order to gain
access to the country's rubber. What type of partnership will need to be formed?
a. a multinational enterprise
b. a contract manufacturing arrangement
c. a strategic alliance
d. a franchise
e. a joint venture
ANS: E PTS: 1 DIF: Difficulty: Challenging
89. The Swatch Group is the parent company of the most successful wristwatch of all time, the Swatch.
Headquartered in Switzerland, The Swatch Group recently entered into a partnership with a company
in France to make the packaging materials for all of its Swatch lines. What type of partnership
agreement does this situation most likely represent?
a. Trading company
b. Licensing arrangement
c. Strategic alliance
d. Joint venture
e. Direct ownership arrangement
ANS: D PTS: 1 DIF: Difficulty: Challenging
90. Sometimes business partnerships are formed between traditional rivals competing for market share in
the same product class. These partnerships are known as
a. trading companies.
b. contract manufacturers.
c. joint ventures.
d. strategic alliances.
e. licenses.
91. Nuhitzu believes it has the technological expertise to produce communication systems that will be
leaders around the globe. Boston Electronics is widely regarded as having excellent management
systems and superior marketing programs. To utilize these strengths, the two firms might form a(n)
____ to work together on a worldwide basis.
a. licensing agreement
b. export trading company
c. joint agreement
d. strategic alliance
e. multinational enterprise
92. Toshiba Electronics is very interested in taking advantage of business opportunities in India but does
not have access to India's market. Toshiba has the patent on a low-cost, quality computer system that
could assist small businesses in India. Sony Computer, Toshiba's competitor, is experienced in India's
small business market but does not have a computer comparable to Toshiba's. If Toshiba and Sony
work together to utilize these strengths to seize this opportunity in India, what type of business
structure would they likely use?
a. Trading company
b. Strategic alliance
c. Licensing
d. Direct ownership
e. Exporting
93. What is the primary distinction between a joint venture and a strategic alliance in international
marketing?
a. Strategic alliances are only formed between companies from well-developed countries
whereas joint ventures are between companies from economically-diverse countries.
b. A joint venture involves only two companies whereas a strategic alliance is formed
between three or more companies.
c. A strategic alliance is formed by companies who have traditionally been rivals, which is
not the case with a joint venture.
d. A joint venture is formed between companies with dissimilar product offerings while a
strategic alliance is formed between companies with similar product offerings.
e. A joint venture is simply a financial investment in a foreign firm while a strategic alliance
involves more than just financial support.
94. The Ford Motor Company has entered into an alliance with Yves Saint Laurent, a maker of clothing
and one of the most successful fashion houses in the world. Yves Saint Laurent is headquartered in
France. Ford will use Yves Saint Laurent designs and color traditions in its production of luxury
models of the company’s Expedition SUV and Lincoln vehicles. The Yves Saint Laurent elements
will appear in the interior and body paint color. This alliance would most likely be classified as
a. a strategic alliance.
b. a joint venture.
c. a global direct ownership.
d. a multinational enterprise.
e. contract manufacturing.
95. Once a company makes a long-term commitment to a foreign market that has a promising political and
economic environment, which of the following options then emerges as a possibility?
a. Exporting
b. Joint venture
c. Limited exporting
d. Direct ownership
e. Licensing
96. In relation to international marketing, which of the following best describes direct ownership?
a. A company owns its own manufacturing facilities.
b. A company forms an alliance with a similar company in a foreign country.
c. Foreign companies contract with manufacturers in other countries.
d. A company owns subsidiaries or facilities in foreign countries.
e. Two companies from different nations have interests in each other's facilities.
97. IKEA, a Swedish retailer of contemporary furniture, operates several stores in various Scandinavian
countries, as well as in the United States and Canada. Which of the following describes IKEA's level
of commitment to international marketing?
a. Licensing
b. Direct ownership
c. Exporting
d. A trading company
e. A joint venture
98. Firms that have operations or subsidiaries located in many countries are referred to as
a. multinational enterprises.
b. strategic alliances.
c. joint ventures.
d. international marketers.
e. export alliances.
99. Southern Tier Industries has operations in more than 30 foreign countries. The headquarters in Atlanta
controls the entire organization while offering subsidiaries the freedom necessary to achieve success in
local markets. Southern Tier Industries is an example of a(n)
a. strategic alliance.
b. joint venture.
c. export-driven corporation.
d. multinational enterprise.
e. trading company.
100. The Samsung Group sells several different product lines around the world through home appliance and
electronics stores. Samsung appliances and electronics have been historically made in Korea, where
the company is headquartered. Recently, Samsung has been investigating the possibility of buying
land and building a production plant in Tennessee, in the United States. Samsung is now operating as
a(an) ______; however, if the plant is built in Tennessee, it will be operating as a(an) ______.
a. exporter; strategic alliance.
b. limited exporter; national marketer.
c. limited exporter; international proprietorship.
d. exporter; multinational enterprise.
e. exporter; global franchise.
101. Japan's Sony Corporation is a prime example of a multinational enterprise. With this in mind, which of
the following would most accurately characterize Sony's operations?
a. It follows a strategy of market globalization.
b. It has operations or subsidiaries in many different countries.
c. It places most of its emphasis on profits generated in foreign countries.
d. It would not expect its foreign operations to share the same goals as the parent firm.
e. It does not concern itself with differences in markets around the world.
102. What is the greatest advantage to an organization of having a subsidiary in a foreign nation?
a. Avoidance of all U.S. laws
b. Increase in cross-cultural approaches to management that allows subsidiaries to develop
their own identity
c. Increased trend toward nationalistic marketing approaches
d. Greater amount of standardization of the marketing mix
e. Greater amount of security from government nationalization and other anticompetitive
measures
STA: DISC: International Perspective KEY: Bloom's: Comprehension
103. A subsidiary in a foreign country generally operates under

a. the laws of the parent company's home country.
b. foreign management in order to develop a local identity.
c. strict management control from the home country's executives.
d. the regulations set forth by the International Trade Agreement.
e. a team of managers from the distant parent company.
104. Exporting, licensing, and using trading companies are preferred modes of international market entry
for firms with a(n) ____ structure.
a. international division
b. internationally integrated
c. export department
d. geographic area
e. matrix
105. Which of the following centralizes all of the responsibility for international operations?
a. Product division structures
b. Export department structures
c. Internationally integrated structures
d. International division structures
e. Global matrix structures
106. Which of the following is most likely to engage in direct ownership activities internationally?
a. Internationally integrated structures
b. International division structures
c. Export department structures
d. Import department structures
e. Outsourcing structures
107. Northeastern University and Penn State University both offer online MBA programs that are available
to students around the world. This is an example of
a. globalization.
b. customization.
c. licensing.
d. nationalization.
e. regionalization.
108. When asked where Laser Tools, Inc., markets its products, company president and founder Roger
Helms says that "the world is just one big market." He feels anyone not taking this stance is
systematically passing up profitable business. Helms's international marketing strategy is best
described as
a. customization of marketing.
b. globalization of marketing.
c. limited exporting.
d. full-scale international marketing.
e. export agenting.
109. Organizations that employ standardized products, promotion campaigns, and prices for all markets are
practicing what is known as
a. customization.
b. internationalization.
c. globalization.
d. regionalization.
e. nationalization.
110. Selling products that are not in demand in all world markets, such as hand-powered washing machines
for use in countries where electricity is not universally available, represents an international marketing
strategy focusing on
a. internationalization.
b. culturalization.
c. nationalization.
d. globalization.
e. customization.
111. Both Nike and Adidas standardize many of their shoe models and colors worldwide, which is an
example of _______.
a. globalization.
b. customization.
c. nationalization.
d. culturalization.
e. internationalization.
112. Levi Strauss markets its denim jeans in many countries and develops its marketing strategy as if the
world were a single market. This approach to selling a standardized product in all countries represents
which type of international marketing?
a. Exporting
b. Accidental exporting
c. Limited exporting
d. Licensing
e. Globalization of markets
113. Globalization of markets requires developing marketing strategies as if the world were one market.
Which of the following marketing mix variables is most difficult to standardize for globalization?
a. Brand name
b. Package
c. Media allocation
d. Labels
e. Product characteristics
114. Swiss-based Nestlé has taken a global approach to marketing its chocolate products. Which of the
following is most easily standardized?
a. Product
b. Promotion
c. Distribution
d. Advertising
e. Price
115. When the makers of Red Bull, an energy drink, decided to go international with their marketing effort,
a global approach was adopted. With which of the following factors did Red Bull most likely
experience difficulty as the firm applied a global strategy for marketing?
a. Branding
b. Product characteristics
c. Packaging
d. Labeling
e. Advertising
Scenario 9.1
Use the following to answer the questions.
Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a
large number of its bikes sold in markets all around the world, it still retains the manufacturing close to
the headquarters for several reasons, one being that its management wants to keep close watch on the
quality of its products. However, for all the accessories, apparel, and other riding gear, Harley-
Davidson contracts out to other manufacturers to produce the items with the Harley name and logo.
Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley
Owners' Group (HOG) have been complaining to the company about this practice, citing that
"everything Harley should be made in America".
116. Refer to Scenario 9.1. Harley-Davidson's practice of having manufacturers in China produce apparel
items with the Harley logo is an example of
a. contract manufacturing
b. globalization
c. direct ownership
d. joint venture
e. exporting
117. Refer to Scenario 9.1. One of Harley-Davidson's largest international markets is in Japan, where
American brands are highly sought after. This is an example of ____ impacting the market.
a. international forces
b. economic forces
c. domestic forces
d. cultural forces
e. environmental forces
118. Refer to Scenario 9.1. If Harley-Davidson were to suddenly find its inventory building up in Japan, it
might reduce inventory by selling the bikes at below cost prices. This practice is known as
a. price skimming.
b. market penetration.
c. dumping.
d. differential pricing.
e. inventory compensation.
119. Refer to Scenario 9.1. At what level of involvement in international marketing is Harley-Davidson
with regard to its bikes?
a. Full-scale
b. Globalization
c. Joint venture
d. Direct ownership
e. Exporting
Scenario 9.2
Use the following to answer the questions.
KFC opened its first franchised restaurant outside of North America in England in 1964. Now, over a
billion KFC chicken dinners are sold annually at more than 80 countries and territories around the
world. KFC has established its own processing plants in these countries to ensure the quality of its
chickens and other food items. In the U.S., the menu at KFC is usually the same in all restaurants, with
only a very few additional items available in different regions. However, when KFC first franchised
into Asian countries, it added many unusual local delicacies to the menu⎯items such as fried octopus
and squid. Additionally, the franchised stores in Asian countries display cooked food in "plates" near
windows at the front of the store. This is a tradition for many restaurants in these countries⎯to offer
the customer passing by a preliminary view of their product.
120. Refer to Scenario 9.2. KFC's establishment of international production/processing facilities is an

example of
a. direct ownership.
b. franchising.
c. strategic alliance.
d. outsourcing.
e. a trading company.
121. Refer to Scenario 9.2. The practice of offering fried octopus and squid at Asian KFC's is best described
as
a. a strategy of standardization.
b. a strategy of globalization.
c. a strategy of some customization.
d. competitive advantage.
e. internationalizing the franchise.
122. Refer to Scenario 9.2. Suppose that KFC's parent company experienced difficulty in opening its
restaurants in China unless KFC was willing to pay the government a "bribe". If KFC were to resort to
paying this bribe in China saying that "it's different doing business there"⎯this would be an example
of
a. a licensing arrangement.
b. the self-reference criterion.
c. cultural relativism.
d. balance of trade issues.
e. exchange controls.
123. Refer to Scenario 9.2. Which of the following alliances will KFC most likely utilize to guide its
business transactions in Japan and China?
a. WTO
b. MERCOSUR
c. FTAA
d. NAFTA
e. APEC
TRUE/FALSE
124. International marketing is defined as marketing activities performed across national boundaries.
ANS: T PTS: 1 DIF: Difficulty: Easy

125. Two-thirds of the world's total purchasing power is outside the United States.

126. Customers that travel the globe expect to be able to buy the same product in most of the world's more
than 200 countries.

127. An embargo occurs when a government suspends trade with a particular country.

128. A quota is the suspension, by a government, of trade in a particular product.
ANS: F PTS: 1 DIF: Difficulty: Easy

129. Government restrictions on the amount of a particular currency that can be bought or sold are known
as import controls.
ANS: F PTS: 1 DIF: Difficulty: Moderate

130. A positive balance of trade is considered good because it means that U.S. dollars are supporting
foreign economies at the expense of U.S. companies and workers.

131. In determining the size of the market for consumer products, the international marketer will probably
be very interested in per capita GDP figures.

132. Opportunities for international marketers are limited to industrial nations with the highest incomes.

133. U.S. marketers may engage in bribery to compete with foreign firms.
134. The study of the cultural environment is unnecessary in the foreign market because foreign consumers
will accept anything that American marketers have to sell.

135. Customs and taboos are culture-bound and should be taken into consideration when products are
marketed in a foreign environment.

136. Cultural differences do not affect marketing negotiations and decision-making behavior.

137. When products are introduced from one nation into another, acceptance is more likely if the two
cultures are different.

138. Cultural relativism is the unconscious reference to one's own cultural values, experiences, and
knowledge when traveling in other countries.

139. NAFTA eventually eliminates all tariffs on goods produced and traded between the United States,
Mexico, and Brazil.

140. NAFTA simplifies country-of-origin rules, hindering Japan's use of Mexico as a staging ground for
further penetration into U.S. markets.

141. While NAFTA eliminates many tariffs immediately, the tariffs on more sensitive goods, such as
glassware, footwear, and some fruits and vegetables, will be phased out over a 15-year period.
142. The passage of NAFTA was agreeable to all parties.

143. The unification of Europe permits virtually free trade among the member nations of the European
Union.

144. Because of continuing disputes and inconsistencies among the administrations of member states, it will
be many years before the European Union truly becomes one deregulated market.
ANS: T PTS: 1 DIF: Difficulty: Moderate

145. The U.S. and Japanese economies are more integrated than are the U.S. and Canadian economies.

146. GATT is based on negotiations between member countries to reduce worldwide tariffs and increase
international trade.

147. The World Trade Organization was an important outcome of the unification of Europe.

148. Domestic marketing involves marketing strategies aimed at markets within the home country.

149. Importing is the sale of products to foreign markets.

150. The job of the export agent is to bring together buyers and sellers from different countries.

151. A trading company provides a link between buyers and sellers in different countries.

152. Under a licensing arrangement, the licensee pays commissions or royalties on sales or supplies used in
manufacturing.

153. Franchising is an arrangement whereby a franchisee grants a franchiser the right to market its product,
using its name, logo, methods of operation, advertising, products, and other elements of the franchising
company's business, in return for a financial commitment and an agreement to conduct business in
accordance with the franchisee's standard of operations.

154. Contract manufacturing occurs when a firm pays a commission or royalties on sales or supplies used in
manufacturing.

155. The joint venture approach has little appeal to industries involved in extraction of natural resources.

156. As project sizes increase in the face of global competition and firms attempt to spread the huge costs
of technological innovation, there is a stronger impetus to form joint ventures.

157. A multinational enterprise is a firm that has operations or subsidiaries located in many countries.

158. It is impossible for a subsidiary to develop a local identity because it seldom employs personnel from
the country within which it operates.

159. The greatest danger in becoming involved in direct ownership in international marketing is political
uncertainty.

160. A subsidiary operating in a foreign country may have important tax, tariff, and other operating
advantages over a licensing agreement or a joint venture.

161. Exporting, licensing and franchising, trading companies, contract manufacturing, and joint ventures
are preferred modes of international market entry for firms with an export department structure.

162. Firms that use an international division structure are often organized domestically on the basis of
functions or product divisions, while the international division operates based on geography.

163. Firms with internationally integrated structures are the least likely to engage in direct ownership
activities internationally.

164. The degree of commitment to international marketing can range on a continuum from national or
domestic orientation to a global orientation.

165. Globalization of marketing involves developing marketing strategies as though the entire world (or
major regions of it) were a single entity.

166. Media allocation, retail outlets, and price are among the easiest marketing mix variables to standardize.

167. Brand name, product characteristics, packaging, and media allocation are among the easiest marketing
mix variables to standardize around the world.

168. Regardless of the extent to which a firm chooses to globalize its marketing strategy, extensive
environmental analysis and marketing research are necessary to understand the needs and desires of
the target market(s) and successfully implement the chosen marketing strategy.

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Chapter 9—Reaching Global Markets

PTS: 1 DIF: Difficulty: Easy OBJ: LO: 09-02

2. In what ways can a nation restrict the flow of imported goods?

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 09-02

3. Describe how economic and technological forces affect marketing strategies.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 09-02

PTS: 1 DIF: Difficulty: Easy OBJ: LO: 09-02

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 09-02

Visit TestBankBell.com to get complete for all chapters

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 09-03

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 09-04

8. In what ways can businesses become involved in international marketing activities?

PTS: 1 DIF: Difficulty: Easy OBJ: LO: 09-04

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 09-06

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 09-06

11. Before the 1990s, most firms entered international markets

27. The gross domestic product is

28. The country with the highest GDP is

33. Select the true statement.

42. Maquiladoras are

46. Which of the following is not true of NAFTA?

47. Which of the following is true about NAFTA?

49. The unification of Europe through the European Union (EU)

54. The Common Market of the Southern Cone (MERCOSUR) includes

60. The term dumping refers to the sale of

67. The purchase of products from a foreign source is called

72. The role of export agents is to

103. A subsidiary in a foreign country generally operates under

120. Refer to Scenario 9.2. KFC's establishment of international production/processing facilities is an

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

128. A quota is the suspension, by a government, of trade in a particular product.

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Moderate

ANS: F PTS: 1 DIF: Difficulty: Moderate

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Moderate

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Moderate

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

142. The passage of NAFTA was agreeable to all parties.

ANS: F PTS: 1 DIF: Difficulty: Moderate

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Moderate

ANS: F PTS: 1 DIF: Difficulty: Moderate

ANS: T PTS: 1 DIF: Difficulty: Moderate

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

149. Importing is the sale of products to foreign markets.

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Moderate

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Moderate

ANS: F PTS: 1 DIF: Difficulty: Moderate