Mkt 515 week 11 final exam – strayer new

MKT 515 Week 11 Final Exam – Strayer New

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Chapter 9 Through 19

Chapter 9

Multiple Choice

1. In global market entry, all of the following are entry decisions that must be made by management before entering an international market EXCEPT:

a. decide on the time of entry. b. decide on the target product/market.

c. decide on the goals of the target markets.d. decide on the mode of entry.e. decide on the target budget.

2. When marketers are making the decision to enter an international market or not, the first step is generally to:

a. decide on the target budget. b. decide on the target product/market. c. decide on the goals of the target markets. d. decide on the mode of entry. e. decide on the time of entry.

3. When marketers are making the decision to enter an international market or not, the final step in the decision process is generally to:

a. decide on a control system to monitor the performance of the entered market. b. decide on the target product/market. c. decide on the goals of the target markets. d. decide on the mode of entry. e. decide on the time of entry.

4. Which of the following most accurately describes the first step in the market entry



decision process?

a. Decide on the goals of the target markets. b. Decide on the mode of entry. c. Decide on the time of entry. d. Decide on the target product/market. e. Decide on the marketing mix plan.

5. Which of the following is a step in the market entry decision process?

a. Forecast a corporate budget. b. Conduct a marketing audit. c. Decide on a mode of entry. d. Review transportation strengths. e. Analyze domestic demand.

6. To identify market opportunities for a given product or service, the international marketer usually starts off with a large pool of candidate countries. To narrow down this pool, the company will typically do a(n) _______________________.

a. internal audit. b. external audit. c. cross-border budget. d. preliminary screen. e. econometric analysis.

7. The goals of a preliminary screen to determine market opportunities are to minimize mistakes of ignoring countries that offer viable opportunities for the product and:

a. offending local governments. b. offending local cultures. c. offending local merchants. d. violating local advertising laws. e. not wasting time on countries that offer little or no potential.

8. The four-step procedure that can be employed for the initial screening process includes all of the following EXCEPT:

a. select indicators and data selection. b. analyze parallel strengths and weaknesses of the market. c. determine the importances of country indicators. d. rate the countries in the pool on each indicator. e. compute the overall scores for each country.

9. When Colgate-Palmolive sees prospects in countries with purchasing power as a major driver behind market opportunities and Coca-Cola looks at per capita income and the number of minutes that it would take someone to work to be able to afford a Coca-Cola product, they are following which of the following steps of the initial screening process for market entry?

a. indicator and data selection. b. analyze parallel strengths and weaknesses of the market. c. determine the importances of country indicators. d. rate the countries in the pool on each indicator. e. compute overall scores for each country.

10. A four-step procedure that can be employed for the initial screening process includes the following EXCEPT:

a. select indicators and collect data. b. determine importance of country indicators. c. hire outside consultants to do a marketing audit. d. rate the countries in the pool on each indicator. e. compute overall score for each country.

11. When Coca-Cola looks at per capita income and the number of minutes that it would take for somebody to work to be able to afford a Coca-Cola product, the company is following which of the following steps of the initial screening process for market entry?

a. indicator and data selection. b. analyze parallel strengths and weaknesses of the market. c. determine the importances of country indicators. d. rate the countries in the pool on each indicator. e. compute overall scores for each country.

12. Wrigley, the U.S. chewing gum manufacturer, has not been interested in most Latin American markets because many of the local governments imposed ownership restrictions. This would be an example of ________________ in markets.

a. finding opportunities b. “weeding out” c. cross-fertilization d. demand conflict

e. unfairness

13. One method of assessing whether a company should enter a foreign market or not is to use an opportunity matrix. To use such a matrix, the marketer should assess high, moderate, and low opportunities as measured on business and political risk and ___________________ scales or cells.

a. demand b. financial constraints c. market opportunities d. market sensitivity e. distance from home market

14. All of the following are major external criteria for making a decision as to a mode of entry into a foreign market EXCEPT:

a. company leadership. b. market size and growth. c. need for control. d. government regulations. e. local infrastructure.

15. The key determinant in the market entry choice decisions is the:

a. risk. b. local infrastructure. c. flexibility. d. internal resources and assets. e. market size and growth potential.

16. In the mode of entry, many companies see liaison office as a low-cost ___________________.

a. joint venture b. export management company c. listening post d. contract exporter e. alliance post

17. The ____________________ of a market refers to the country’s distribution system, transportation network, and communication system.

a. demographic environment b. infrastructure c. logistical d. physical distribution e. physical infrastructure

18. Markets can be classified in four types of countries based on their respective market attractiveness. All of the following are part of the classification scheme EXCEPT:

a. platform countries. b. emerging countries. c. low-tech countries. d. growth countries. e. maturing and established countries.

19. Markets can be classified in four types of countries based on their respective market attractiveness. Which of the following of those types can be used to gather intelligence and establish a network?

a. platform countries. b. emerging countries. c. maturing and established countries. d. growth countries. e. none of the above.

20. Markets can be classified in four types of countries based on their respective market attractiveness. Hong Kong and Singapore would fall into which of the types listed below (where the purpose would be to gather intelligence and establish a network)?


21. Markets can be classified in four types of countries based on their respective market attractiveness. Which of the following of those types can be used to build up an initial presence (such as through a liaison office)?

a. platform countries.

b. emerging countries. c. maturing and established countries. d. growth countries. e. none of the above

22. Markets can be classified in four types of countries based on their respective market attractiveness. Vietnam and the Philippines would fall into which of the types listed below (where the purpose would be to build up an initial presence such as through a liaison office)?


23. Markets can be classified in four types of countries based on their respective market attractiveness. Which of the following countries would most likely be listed as a maturing/established market?

a. China. b. Burma. c. India. d. Taiwan. e. China.

24. Markets can be classified in four types of countries based on their respective market attractiveness. Which of the following countries would most likely be listed as an established/maturing market?

a. China. b. the Philippines. c. India. d. Vietnam. e. Japan.

25. Markets can be classified in four types of countries based on their respective market attractiveness. Which of the following countries would most likely be listed as a growth country?

a. Hong Kong. b. Vietnam. c. China. d. Taiwan. e. Japan.

26. A _________________________ perspective argues that the desirable governance structure (high- versus low-control mode) will depend on the comparative transaction costs (the costs of running an operation).

a. demand-delivery b. just-in-time management c. management-by-objectives d. quantity-cost allocation e. transaction-cost analysis

27. From a transaction-cost analysis perspective, market failure typically happens when transaction-specific assets become _________________ and therefore more high- control situations are needed.

a. optional b. valuable c. expendable d. less-valuable e. weaker

28. Most companies start their international expansion with _________________.

a. exporting b. joint ventures c. licensing d. franchising. e. contract manufacturing.

29. In the area of exporting, a middleman could be an __________________________.

a. export outsourcing company b. export management company c. export production company d. export specialist company e. export manufacturing company

30. Companies that plan to engage in exporting have a choice between indirect, _________________, and direct exporting.

a. licensing b. parallel c. cooperative d. venture e. summation

31. _______________________ means that the firm uses a middleman based in its home market to do the exporting.

a. Licensing b. Contract manufacturing c. Cooperative exporting d. Venture exporting e. Indirect exporting

32. ___________________ offers several advantages. Chief among these are the firm gets instant foreign market expertise, very little risk is involved, and no major resource commitments are required.

a. Licensing b. Parallel exporting c. Cooperative exporting d. Direct exporting e. Indirect exporting

33. ___________________ has disadvantages. Chief among these are that the company has little or no control over the way their product is marketed in a foreign country, lack of adequate sales support (among other support variables) can lead to poor sales, and bad decisions made by an intermediary can damage the corporate image.


34. ______________________ means that the firm enters into an agreement with another firm (local or foreign) where the partner will use its distribution network to sell the exporter’s goods.

a. Licensing b. Parallel exporting c. Cooperative exporting d. Venture exporting e. Indirect exporting

35. ______________________ means that the company sets up its own export organization within the company and relies on a middleman based in a foreign market (foreign distributor).


36. Cooperative exporting is also called:

a. specialist exporting. b. lean exporting. c. long-range exporting. d. backward exporting. e. piggyback exporting.

37. One of the most popular forms of cooperative exporting is _________________. With this method, the company uses the overseas distribution network of another company (local or foreign) for selling its goods in the foreign market.

a. parallel exporting. b. venture exporting. c. piggyback exporting. d. make-or-buy exporting. e. foreign export management exporting.

38. One of the main advantages of direct exporting over indirect exporting is that the exporter has more:

a. leverage. b. risk. c. control over its operations. d. budget. e. leadership.

39. ___________________ is a contractual strategy where the firm offers some

proprietary assets to a foreign company in exchange for royalty fees.


40. The Oriental Land Company in Japan owns Tokyo Disneyland. This would be an example of an international _________________ agreement between the Oriental Land Company (owner) and Disneyland (receives royalties).

a. licensing b. parallel exporting c. cooperative exporting d. direct exporting e. indirect exporting

41. Benefits of licensing include:

a. not very demanding on company resources. b. always protected against copying or technical theft. c. always a strong partner relationship. d. low profits, therefore, low taxes. e. licensee is always enthusiastic.

42. Nurturing a future competitor is the biggest danger in ___________________.

a. licensing b. parallel exporting c. cooperative exporting d. direct exporting e. indirect exporting

43. One of the most popular entry modes in the international marketplace for service firms is:

a. licensing. b. franchising. c. cooperative exporting. d. direct exporting. e. indirect exporting.

44. According to the textbook, in franchising, companies can capitalize on a _______________________________.

a. cheap business formula. b. expensive business formula. c. winning business formula. d. parallel business formula. e. hybrid business formula.

45. One of the most popular franchise plans used in international marketing is ____________________ where the franchiser gives the franchise to a local entrepreneur who in turn sells local franchises within a territory.

a. sales franchise b. master franchise c. strategic franchise d. cross-country franchise e. border-territory franchise

46. In ____________________, the company arranges with a local manufacturer to manufacture parts of the product or even the entire product. The marketing of the product, however, is still the responsibility of the international firm.

a. licensing b. franchising c. cooperative exporting d. contract manufacturing e. indirect exporting

47. ___________________ are(is) the prime motivation behind contract manufacturing.

a. Advertising cooperation b. Leadership c. Cost savings d. Profit expansion e. Desire to be part of a cartel

48. Like licensing and franchising, nurturing a future competitor is one of the biggest dangers in ___________________.

a. contract manufacturing. b. parallel exporting. c. cooperative exporting. d. using an export management company. e. indirect exporting.

49. In contract manufacturing, because of “nurture-a-future competitor” threat, many companies prefer to make ___________________ or products that involve proprietary design features in-house.

a. just-in-time items b. under-value items c. low-value items d. high-value items e. none of the bove

50. With a __________________, the foreign company agrees to share equity and other resources with other partners to establish a new entity in the target country.

a. contract manufacturing agreement b. parallel exporting agreement c. cooperative exporting agreement d. export management company e. joint venture

51. A major advantage of joint ventures, as compared to lesser forms of resource commitment such as licensing, is:

a. the return potential. b. infrastructure enhancement. c. expansion of stockholders. d. division of leadership. e. an increase in ethical standards.

52. All of the following are considered benefits of forming joint ventures EXCEPT:

a. greater return potential. b. shared profits instead of shared royalties. c. more control over operations. d. increased cost controls. e. synergies.

53. With respect to joint ventures, the ________________ argument is illustrated by not only shared capital and risk but possible contributions brought in by the local partner in land, raw materials, expertise on the local environment, and access to local distribution networks.

a. demand b. parallel management c. consensus management d. domestication

e. synergy

54. Lack of trust and mutual conflicts can often turn ______________ into partnerships doomed to failure.

a. contract manufacturing agreements b. parallel exporting agreements c. cooperative exporting agreements d. export management companies e. joint ventures

55. One of the problems with joint ventures is ________________ between partners. An example would be when one partner wants to stress reduction of political and economic controls on decision-making and the other partner wants to accept technology and capital but precludes foreign authority infringement on sovereignty and ideology.

a. conflicting purchasing objectives b. conflicting process objectives c. control objectives d. budget objectives e. staffing objectives

56. There are no magic ingredients to foster the stability of joint ventures, however, all of the following are good guidelines EXCEPT:

a. pick a partner with which control can be maintained. b. pick the right partner. c. establish clear objectives from the beginning. d. bridge cultural gaps. e. get top management commitment and respect.

57. _____________________ come about when multinational companies prefer to enter new markets with 100 percent ownership.

a. Contract manufacturing agreements b. Parallel exporting agreements c. Cooperative exporting agreements d. Wholly owned subsidiaries e. Joint ventures

58. When a multinational company chooses to invest in foreign markets with wholly owned subsidiaries, these subsidiaries may be acquisitions or _______________ operations.

a. joint venture b. strategic alliance c. greenfield d. franchise e. piggyback

59. A _________________ operation (with respect to wholly owned subsidiaries) is one which is started from scratch.

a. joint venture b. strategic alliance c. greenfield d. franchise e. piggyback

60. Wholly owned subsidiaries give MNCs _______________ of their operations.

a. almost no control b. partial control c. moderate control d. full control e. strategic control only

61. Advantages of wholly owned subsidiaries include all of the following EXCEPT:

a. full control. b. control of profits. c. own processes. d. control government relationships. e. can often be set quicker that other forms of investment.

62. One of the chief disadvantages of a wholly owned subsidiary is that:

a. it is often perceived as a threat to cultural or economic sovereignty. b. it is often perceived as generating low profits. c. it is often perceived as having problems in supply lines. d. it is often perceived as being more expensive e. it is often perceived as a threat to the local media for promotion.

63. One way to address hostility to foreign acquisitions in the host country is by

______________ the firm’s presence in the foreign market by hiring local managers, sourcing locally, and developing local brands.

a. regionalizing b. localizing c. socializing d. acculturating e. emphasizing the self-reference criterion (SRC)

64. Companies that enter via wholly owned subsidiaries are sometimes perceived as a threat to the culture and/or economic sovereignty of the____________________.

a. host country. b. home country. c. buffer country. d. greenfield country. e. high-tech country.

65. The chief reason that some firms choose acquisitions (or mergers) to enter a foreign market is that they can:

a. receive greater tax relief. b. receive greater profits. c. reduce debt. d. increase stock price. e. enter the market more quickly.

66. When contrasted with greenfield operations, _________________ provide(s) a rapid means to get access to the local market.

a. licensing b. exporting c. contract manufacturing d. acquisitions e. joint ventures

67. __________________ are described as a coalition of two or more organizations to achieve strategically significant goals that are mutually beneficial.

a. Joint ventures b. Strategic alliances c. Greenfield operations d. Franchises

e. Piggyback arrangements

68. The partnership established by Coca-Cola and Nestle to market ready-to-drink coffees and teas under the Nescafe and Nestea brand names is an example of which of the following:

a. strategic alliance. b. contract manufacturing. c. licensing. d. wholly owned subsidiary. e. exporting.

69. All of the following are illustrations of the four generic reasons for forming strategic alliances EXCEPT:

a. offense. b. defense. c. catch-up. d. remain. e. restructure.

70. The underlying goal of _________________ in creating a strategic alliance is to sustain the firm’s leadership position by learning new skills, getting access to new markets and developing new technologies.

a. offense b. defense c. catch-up d. remain e. restructure

71. The strategic alliance strategy of ______________ might be enacted when the firm has an established leadership position but that only plays a peripheral role in the company’s business portfolio.

a. offense b. defense c. catch-up d. remain e. restructure

72. When a firm uses a strategic alliance as a vehicle to rejuvenate a business that is not core and in which it has no leadership position, it is probably using a

________________ strategy.

a. defend b. catch up c. restructure d. remain e. none of the above

73. Decisions to exit or divest a foreign market may have all the following reasons EXCEPT:

a. sustained losses. b. volatility. c. premature entry. d. ethical reasons. e. new market.

74. Risks of exiting a foreign market may lead to all the following EXCEPT:

a. fixed costs of exit. b. disposition of assets. c. short-term opportunities. d. signal to other markets. e. long-term opportunities.

True/False Short Answer

75. The first step in the process of entering a foreign market is to decide on the _____________________.

76. Preliminary screening is an accepted method of reducing the number of candidates for market entry.

77. As an example of a preliminary screening process in assessing international market opportunities, Colgate-Palmolive uses assessments of whether people bath regularly or not as a critical factor in deciding whether to enter a market or not.

78. To identify market opportunities for a given product (or service), the international marketer usually starts off with a large pool of candidate cities.

79. Colgate-Palmolive views per capita purchasing power as a major driver behind market opportunities.

80. _________________ countries (with respect to market attractiveness) can be used to gather intelligence and establish a network.

81. An example of a platform country is India.

82. An example of a growth country is China.

83. An example of an emerging country (with respect to market attractiveness) is the Philippines.

84. Corporate objectives have no influence in choosing entry modes.

85. From the transaction cost analysis, market failure typically happens when transaction-specific assets become valuable.

86. When going abroad most companies start their international expansion with _______________.

87. Piggyback exporting is when two different transportation modes (such as truck and rail) are combined.

88. Under ___________ exporting, a firm sets up its own export department and sells its products via a middleman located in the foreign market.

89. In a master franchise, the franchiser gives a master franchise to a local entrepreneur, who will, in turn, sell local franchises within a territory.

90. Contract manufacturing is also known as outsourcing.

91. In a cooperative joint venture, the partners agree to raise capital in proportion to the equity stakes agreed upon.

92. Ownership strategies in foreign markets can take two forms: acquisitions and ____________________.

93. There four generic reasons for forming strategic alliances are defense, catch-up,remain, and __________________.

94. Strategic alliances between strong and weak partners often work because of the synergy and learning that can take place between mentor and subordinate.

95. Stable alliances have the commitment and support of the top of the parents’ organizations.

96. Exiting a country often involves substantial fixed cost.

Essay

97. List the steps in the global market entry decision process. Which of the steps is probably the most important in the overall success of the foreign venture? Justify your answer.

98. Explain what is meant by the concept of a liaison office and why some firms prefer to use this technique to enter markets.

99. Briefly, explain the concept of licensing in a foreign market. In addition, cite the benefits and drawbacks of licensing. Be specific in your responses.

100. Briefly explain the concept of joint venture. Additionally, give the benefits and drawbacks of entering into a joint venture.

101. Provide an assessment of strategic alliances. What are they used for, what are the characteristics of those that generally succeed, and what are the general types? Be sure to be specific in your answers.

Chapter 10

Multiple Choice

1. Ikea, the Swedish furniture chain, insists that all its stores carry the basic product line with little room for adaptation to local tastes. If research of the U.S. market showed that Americans preferred larger beds than their Swedish counterparts, which of the following strategies would be advisable to Ikea?

a. standardization. b. new product development. c. adaptation. d. withdraw from market. e. lower prices to encourage attitude change.

2. In the Australian market, rather than manufacturing disposable diapers, Procter & Gamble decided to import them since the size of the market did not warrant localmanufacturing according to P&G. Unfortunately, by using packaging designed for the Asian region with non-English labeling, P&G alienated its customers in Australia. This is an example of improper:

a. global policy decisions. b. pricing decisions. c. brand policy decisions. d. product policy decisions. e. company policy decisions.

3. Even though other combination alternatives can be devised, companies generally can pursue three global product strategies to penetrate foreign markets. These strategies are to extend the home-grown product/communication strategies, adapt their strategy to the local marketplace, and:

a. invent new products for foreign customers. b. concentrate on services. c. apply for permission to copy domestic products. d. concentrate on image adjustment. e. focus on secondary issues (such as warranties).

4. In the area of global product policy, companies can pursue three strategies to penetrate foreign markets. The strategies include:

a. extension, adaptation, and invention. b. extension, adaptation, and prevention. c. extension, adaptation, and creation.

d. extension, adaptation, and placement. e. extension, adaptation, and balancing.

5. Which of the following is NOT one of the strategic options available to the marketing planner, considering various product policies that could be devised for the international marketplace?

a. product and communication extension--dual extension. b. communication extension--mono extension. c. product extension--communications adaptation. d. product adaptation--communications extension. e. product and communications adaptation--dual adaptation.

6. If a company were to follow a strategy of product and communication extension (dual extension) in a foreign market, an example of a product category that would fit this strategy would be _________________________.

a. personal care items b. motorscooters c. gasoline d. clothing e. hand-powered washing machines

7. If a company were to follow a strategy of product adaptation-communications extension in a foreign market, an example of a product category that would fit this strategy would be __________________.

a. soft drinks b. motorscooters c. shampoo d. clothing e. hand-powered washing machines

8. If a company were to follow a strategy of product extension-communications adaptation in a foreign market, an example of a product category that would fit this strategy would be __________________.

a. soft drinks b. gum c. shampoo d. clothing e. hand-powered washing machines

9. If a company were to follow a strategy of product and communications adaptation (dual adaptation) in a foreign market, an example of a product category that would fit this strategy would be __________________.

a. soft drinks b. motorscooters c. gasoline d. diet aids e. hand-powered washing machines

10. If a company is an early entrant in the global arena and possesses little in the way of resources, they will probably chose _____________________ as a method of entry.

a. product and communication extension--dual extension b. product invention c. product extension--communications adaptation d. product adaptation--communications extension e. product and communications adaptation--dual adaptation

11. As a strategy, ____________________ will work when the company targets a “global” segment with similar needs.


12. The biggest advantage of a product and communication extension--dual extension policy is:

a. it is easy for management to understand. b. it offers substantial savings because of economies of scale. c. it passes most legal tests. d. it is service oriented. e. it will usually not violate cultural taboos.

13. Due to differences in the cultural or competitive environment, a company may choose the _______________________ strategy if it wishes to keep its product economies scale intact but customize its communications.


14. When the Wrigley chewing gum company markets its basic products abroad, it keeps its well-known brands but customizes promotional approaches in individual countries. Which of the following strategies best describes the strategy that Wrigley is following?


15. Many companies add brands to their portfolio via acquisitions of local companies. When the local brand is retained but incorporated into the existing communications strategy, the strategy can be described as being one of:

a. product and communication extension--dual extension. b. product invention. c. product extension--communications adaptation. d. product adaptation--communications extension. e. product and communications adaptation--dual adaptation.

16. Differences in both the cultural and physical environment across countries call for a _________________________ strategy.


17. Because of differences in preferences in flavors and government regulations regarding the marketing of diet products, Slim-Fast normally uses which of the following strategies?

a. product and communication extension--dual extension b. product invention c. product extension--communications adaptation d. product adaptation--communications extension

e. product and communications adaptation--dual adaptation

18. Genuinely global marketers try to figure out how to create products with a global scope rather than just for a single country. The mindset is to zero in on global opportunities. The strategy that best describes this approach is called:

a. product and communication extension--dual extension. b. product invention. c. product extension--communications adaptation. d. product adaptation--communications extension. e. product and communications adaptation--dual adaptation.

19. Black & Decker is a good example of a company that adopts the _______________ approach to global expansion. The company aims to bring out new products that cater to common needs and opportunities around the world.


20. __________________ means offering a uniform product on a regional or worldwide basis (only minor alterations are made to meet local standards).

a. Customization b. Standardization c. Miniaturization d. Assimilation e. Marginalization

21. The primary advantage to using a standardization approach to marketing a product in the international arena is:

a. minimization of costs (which can be passed on to customers). b. more profit. c. less service complaints. d. less product returns. e. standard budgets.

22. Standardization of product has a __________________ orientation (lower costs via mass production).

a. market-driven b. service-driven c. budget-driven d. promotion-driven e. product-driven

23. ____________________ is leveraging cross-border differences in needs and wants of the firm’s target customers.

a. Customization b. Standardization c. Proliferation d. Expansion e. Synthesizing

24. Customization of product has a ______________________ orientation (increase customer satisfaction by adapting products to the local needs).

a. market-driven b. service-driven c. budget-driven d. promotion-driven e. product-driven

25. All of the following are factors that favor a globalized product strategy EXCEPT:

a. common customer needs. b. global customers. c. scale economies. d. time-to-market. e. rising strength of the Latin American markets.

26. Many product categories show a gradual but steady ____________________ in consumer preferences.

a. slowdown. b. difficulties c. convergence. d. divergence. e. rising strength of the Latin American markets.

27. During the last decade, car buyers in the Triad markets (Japan, the United States, and

Europe) have increasingly begun to have the same outlook and preferences in cars. Which of the following factors that favor globalization of product, would most accurately be associated with this trend?

a. common customer needs. b. global customers. c. scale economies. d. time-to-market. e. Europe 1992 and other Regional Market Agreements.

28. _____________________ means shortening the time to bring new product projects to the market.

a. Delivery-to-market b. Orientation-to-market c. Time-to-market d. Extension-to-market e. Perfection-to-market

29. One attempt to combine the strengths of standardization and customization of products is to deal with both issues as functions of product design. The _______________ approach consists of developing a range of product parts that can be used worldwide. The parts can be assembled into numerous product configurations.

a. core-product b. uniform commercial code c. die-casting d. modular e. Nexus

30. In a ______________________, scale economies flow from the mass production of more-or-less standard product components at a few manufacturing sites.

a. convergence approach b. divergence c. linear approach d. forecasting approach e. modular approach

31. One attempt to combine the strengths of standardization and customization of products is to deal with both issues as functions of product design. The _______________ approach consists of developing a mostly uniform core-

product/platform and then adding attachments that match local market needs.

a. core-product b. uniform commercial code c. die-casting d. modular e. PRIZM

32. With respect to product design strategies, the ___________________ approach is very popular with the French carmaker Renault. They use common core-products but customize them in each market (such as making stronger heaters for the Nordic market).

a. core-product b. uniform commercial code c. die-casting d. modular e. PRIZM

33. One of the disadvantages that a global marketer may have is ___________________. This would occur when too much standardization stifles initiative and experimentation at the local level.

a. overcustomization b. micro-managing c. technocracy d. group think e. overstandardization

34. One of the pitfalls that a global marketer can run into is _____________. This would occur when too much adaptation to the local market occurs and the brand becomes vulnerable to losing its unique foreigness.

a. overcustomization b. micro-managing c. technocracy d. group think e. overstandardization

35. Adoption rates of new products are affected by: a. population homogeneity b. proportion of women in the labor force c. cosmopolitanism d. mobility

e. all of the above

36. In general, the rate of adoption of new products (in foreign markets) is driven by individual differences, personal influences, and:

a. fashion. b. trends. c. cash on hand. d. product characteristics. e. promotion characteristics.

37. In general, the adoption of new products is driven by factors such as:

a. individual differences. b. personal influences. c. product characteristics. d. all of the above. e. none of the above.

38. ___________________ are always eager to experiment with new ideas and products.

a. Early adopters. b. Early majority. c. Late majority. d. Laggards. e. Prior adopters.

39. Which of the following would NOT be one of the five key product characteristics that contribute to its acceptance?

a. low service maintenance. b. relative advantage. c. compatibility. d. complexity. e. trialability.

40. To what extent does the new product offer more perceived value to potential adopters than exiting alternatives, would be a question that best fits with which of the following key product characteristics acceptance categories?

a. observability. b. relative advantage.

c. compatibility. d. complexity. e. trialability.

41. Is the product consistent with exiting values and attitudes of the individuals in the social system, would be a question that best fits with which of the following key product characteristics acceptance categories?

a. observability. b. relative advantage. c. compatibility. d. complexity. e. trialability.

42. Is the product easy to understand or use, would be a question that best fits with which of the following key product characteristics acceptance categories?

a. observability. b. relative advantage. c. compatibility. d. complexity. e. trialability.

43. The adoption rate for new products in countries with a ________________ population is usually faster than in countries with a highly diverse culture.

a. heterogeneous b. complex c. diverse d. homogeneous e. polycentric

44. The adoption rate for a new product in countries with a homogeneous population is usually faster than in countries with a highly diverse culture. Which of the following countries would probably have the fastest adoption based on the information provided above?

a. Ireland. b. United States. c. Japan. d. United Kingdom. e. France.

45. With respect to adoption rates in the international marketplace, it appears to be

generally true that adoption rates are higher in ______________ countries than in ____________ countries.

a. lead/lag b. lag/lead c. lead/middle adopters d. lag/middle adopters e. lead/opinion-lead

46. A _________________ country is where a product is first introduced.

a. lag b. low-profile c. lead d. high-profile e. fast

47. A _________________ country is where a product is entered after initial introduction has taken place. a. lag b. low-profile c. lead d. high-profile e. fast

48. _______________________ are people who look beyond their immediate social surroundings and are not local in their opinions.

a. Domestics b. Introverts c. Negotiators d. Cosmopolitans e. Regionalists

49. All of the following are factors that affect product penetration in the European market (according to a recent survey), EXCEPT:

a. cosmopolitanism. b. number of locals in the market. c. mobility. d. percentage of children in the labor force. e. percentage of women in the labor force.

50. A recent study examined the difference of six products in 31 developing and developed countries across the world. A key finding was that ___________________ tend to experience a far slower adoption rate than developed countries.

a. European countries b. global countries c. advanced countries d. developed countries e. emerging market countries

51. All of the following are steps in the new product development process EXCEPT:

a. identification of new product ideas. b. budget development. c. screening. d. concept testing. e. test marketing.

52. Which of the following are among the best sources for finding new product ideas?

a. company, customers, competition, and collaborators. b. trade magazines, television, and the internet. c. government statistics, demographic charts, and psychological profiles. d. reverse engineering, industrial spying, and out-of-date patents. e. rumors, stories, and intuition.

53. Once new product ideas have been identified, the next logical step is to have the ideas _______________.

a. modeled b. budgeted c. screened d. concept tested e. test marketed

54. ______________ is part of a formal scoring model in screening new products.

a. New Prod b. ExProd c. YProd d. ZProd e. none of the above

55. Conjoint analysis is also referred to as _____________________.

a. geometric analysis b. trade-off analysis c. meta analysis d. longitudinal analysis e. metric analysis

56. A sophisticated method (sometimes called trade-off analysis) for measuring consumer preferences for product concepts is called:

a. chi-square. b. correlation analysis. c. focus groups. d. regression analysis. e. conjoint analysis.

57. The starting premise of _______________ is that people make trade-offs between the different product attributes when they evaluate alternatives (or brands) from which they pick a choice.

a. chi-square b. correlation analysis c. focus groups d. regression analysis e. conjoint analysis

58. If a consumer considered four attributes to be important in the purchase of a TV, by using ________________ the researcher might be able to determine the trade-offs between the different product attributes (such as purchase price or number of channels that could be received) when the consumer evaluated the alternatives for eventual purchase.

a. chi-square b. correlation analysis c. focus groups d. regression analysis e. conjoint analysis

59. A(n) ________________ is essentially a field experiment where the new product is marketed in a select set of cities to assess its sales potential and scores of other performance measures.

a. attitude screen b. product model c. product concept d. test market e. focus concept

60. Testing objectives, testing marketing mixes, making projections of sales volume, and analyzing potential competitive marketing mixes are all reasons to conduct:

a. attitude screens. b. product models. c. product concepts. d. test markets. e. focus concepts.

61. One alternative to the test market is the _____________________.

a. thought panel b. laboratory test market c. internet exposure technique d. preferred patron experiment e. use of break-even analysis

62. If prospective customers are contacted and shown commercials for the new product and existing brands (then asked to state attitudes and preferences of what they have seen), then the marketing research entity will probably have conducted a(n) __________________ instead of a full test market.

a. thought panel b. laboratory test market c. internet exposure technique d. preferred patron experiment e. break-even analysis

63. A common technique to avoid a global test market is to make global sales projections based on product performance in a ________________ market.

a. lag b. middle adopter c. lead d. opinionated e. innovative

64. Timing is a very important element in any new product launch. One of the strategies is described as being the ________________ where there is a phased rollout. In this approach the product uses a trickle down approach.

a. sprinkler method b. shotgun method c. rifle method d. dribble method e. waterfall method

65. Timing is a very important element in any new product launch. One of the strategies is described as being the ________________. This method often involves introducing the new product in the company’s home market and then moving to other advanced markets. Finally, less advanced markets are exposed to the product.


66. The prime motive for the waterfall model (in introducing new products on a global scale) is that the customization of the product for the foreign market is: a. impractical. b. very expensive. c. time consuming. d. promotionally limited. e. not supported by top management.

67. Timing is a very important element in any new product launch. One of the strategies is described as being the ________________ where there is a simultaneous introduction of products in other markets of the world.


68. A phased rollout is less demanding on the company resources whereas ____________________ are not always acceptable.

a. sprinkler rollouts b. shotgun rollouts c. staggered rollouts d. dribble rollouts e. waterfall rollouts

69. The chief reason for a company choosing the sprinkler method of new product introduction is to off-set:

a. rising costs. b. unstable labor. c. competitive preemption. d. government control. e. shoddy promotions.

70. The waterfall strategy of sequential entry is preferable over the sprinkler model when all of the following conditions exist EXCEPT:

a. the lifecycle of the product is relatively long. b. high costs of entry are present. c. very weak local competitors. d. anticipation of fast growth. e. no real competitors.

71. The waterfall strategy of sequential entry is preferable over the sprinkler model when:

a. the lifecycle of the product is relatively short. b. there are low costs of entry into the market. c. there are many competitors. d. there are weak local competitors. e. fast growth is anticipated.

72. The sprinkler strategy of one to two entries (globally) is preferable over the waterfall model when all of the following conditions exist EXCEPT:

a. the lifecycle of the product is relatively short. b. there are low costs of entry into the market. c. there are many competitors. d. very weak local competitors. e. anticipation of fast growth.

73. The sprinkler strategy of one to two entries (globally) is preferable over the waterfall model when:

a. the lifecycle of the product is relatively long. b. high costs of entry are present. c. very weak local competitors exist. d. fast growth is anticipated. e. no real competitors exist.

74. Truly global innovators are called:

a. metanational innovators. b. delta innovators. c. beta innovators. d. gamma innovators. e. none of the above.

75. To harvest the benefits of metanational innovators, a company must pursue three things:

a. Prospecting, assessing, and mobilizing. b. Prospecting, assessing, and delivering. c. Prospecting, assessing, and running. d. Prospecting, assessing, and planning. e. none of the above.


76. Companies can pursue three global strategies to penetrate foreign markets. The strategies are: extension, adaptation, and___________________.

77. Early market entrants often choose dual extension (product and communication extension) as a strategy to enter markets with new products.

78. The biggest savings to the company when following a strategy of dual extension is in economies of scale.

79. Because of their universally known products, the Wrigley chewing gum company can use product adaptation-communications extension strategies effectively.

80. Local market circumstances do not favor the case of product adaptation.

81. Many companies add brands to their product portfolio via acquisitions of local brands.

82. Differences in both the cultural and physical environment across countries call for a ________________________ strategy.

83. _________________ means offering a uniform product on a regional or worldwide basis.

84. The goal of standardization is to minimize competition.

85. ____________________ leverages cross-border differences in needs and wants of the firm’s target customers.

86. Five forces favor a globalized product strategy. These include: common customer needs, global customers, scale economies, time to market, and__________________.

87. Overstandardization is a risk of the core-product approach to introducing new products in the world market.

88. In general, the adoption of new products is driven by individual differences, personal influences, and product characteristics.

89. With respect to categories of consumers that adopt new products, the __________ category is eager to experiment with new ideas or products.

90. The lead country is where the product is introduced first.

91. In marketing, new product ideas do not come from the company, customers, competition, and collaborators.

92. In these days, many MNCs create organizational structures to foster global product

development.

93. Conjoint analysis is also called tradeoff analysis.

94. In the area of a global product launch strategy, two strategic options available are: waterfall strategy and _________________________.

95. The waterfall model is also called staggered roll-out.

96. A truly global innovators are called metanational innovators.

Essay

97. List the strategic options available to the firm considering global expansion in the product area. Detail the conditions that make the strategic option favorable. Be sure to detail your answer.

98. List the forces that now favor a globalized product design strategy.

99. There are strategic options that allow firms to modify their product while keeping most of the benefits of following a uniform product policy. Explain the differences between the modular and core-product approaches.

100. Test marketing is considered a critical step in new product development in most Western countries. Comment on test marketing. Also, outline some of the shortcomings of test marketing?

101. In marketing, timing is crucial. In new product development it might be even more crucial given the risk of the venture. Explain the waterfall and sprinkler approaches to introducing a new product to the market. When is the waterfall method preferred over the sprinkler method? Be sure to be specific as to your comments on these two strategic options.

Chapter 11

Multiple Choice

1. The German company Henkel is always customizing its brand portfolio, positioning, and product formulations. The two main challenges that the company faces are:

a. global brand and beta line management. b. global brand and quality line management. c. global brand and modular line management. d. global brand and hybrid line management. e. global brand and product line management.

Difficulty: (3) Knowledge: (A) Page: 361

2. A ____________ is a name, term, sign, symbol, or combination of them which is intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors.

a. trademark b. patent c. signature d. figure e. brand

Difficulty: (1) Knowledge: (F) Page: 362

3. Linked to the brand name is a collection of assets and liabilities called ____________.

a. the trademark b. the patent

c. knowledged. proprietary investments

e. brand equity


4. Brand-name awareness, perceived quality, and other associations invoked by the brand name in the customer’s mind are all illustrations of the concept called _______________.

a. brand color b. brand equity c. brand warranty d. local brand value e. brand mark


5. “How do we strike a balance between a global brand that shuns cultural barriers and

one that allows for local requirements” is an illustration of a question that needs to be asked when building up and managing _________________ in a multinational setting.

a. proprietary investments b. brand equity c. brand warranty d. local brand name e. brand mark


6. All of the following are questions that must be asked when building up and managing brand equity in a multinational setting EXCEPT:

a. How do we strike a balance between a global brand that shuns cultural barriers and one that allows for local requirements? b. What aspects of service are too expensive to be included in the brand warranty? c. What aspects of brand policy can be adapted to global use? d. Which brands are destined to become “global” mega-brands? e. How do you execute the changeover from a local to a global brand?


7. A key strategic issue that appears on international marketers’ agendas is whether there should be a ________________________.

a. national brand b. country brand c. regional brand d. local brand e. global brand


8. A truly ________________ is one that has a consistent identity with consumers across the world.

a. private brand b. public brand c. global brand d. local brand e. government brand


9. The most obvious reason for having a global brand would be to take advantage of:

a. power promotions. b. a large labor and selling force. c. economies of scale. d. coordinated logistics. e. corporate vision.


10. In 2008, which of the following brands was ranked the number one brand in the world?

a. Disney b. Coca-Cola c. GE d. Nokia e. IBM

Difficulty: (2) Knowledge: (A) Page: 363, Exhibit 11-1

11. In 2008, which of the following auto brands was ranked number one in the global auto industry?

a. BMW b. Mercedes c. GM d. Ford e. Toyota


12. In 2008, which of the following brands was ranked number one in the world among the high-tech companies?

a. Microsoft. b. IBM. c. Intel. d. Hewlett Packard. e. Dell.

Difficulty: (1) Knowledge: (A) Page: 363, Exhibit 11-113. Marlboro quickly became the leading cigarette brand in Hong Kong when it positioned itself as being the leading brand in the United States. This strategy is attributed to Marlboro as being a:

a. global brand. b. geo brand. c. regional brand.

d. country brand. e. local brand.


14. A desire to reflect its American roots motivated Disney to change the name for its Paris themepark from Euro Disney to __________________.

a. Disneyland Village b. Disneyland Park c. Disneyland Paris d. Disneyland Europe e. Disneyland France


15. Brand equity for global brands varies greatly from country to country. All of the following factors contribute to the variation EXCEPT:

a. competitive climate. b. marketing support. c. cultural receptivity to brands. d. literacy. e. product category penetration.

Difficulty: (2) Knowledge: (F) Pages: 365-66

16. Brand equity for global brands varies greatly from country to country. All of the following factors contribute to the variation EXCEPT:

a. history. b. competitive climate. c. marketing support. d. cultural receptivity to brands. e. brand equity scale.


17. ____________________ often justify(ies) local branding instead of global branding.

a. Domestic barriers b. Regulatory barriers c. Cultural barriers d. Social barriers e. Religious barriers


18. Mecca Cola is a new soft drink that was launched by a ____________________

entrepreneur to cash in on anti-America sentiments in Europe.

a. Irish b. English c. Dutch d. German e. French


19. The following four branding strategies are available to markets EXCEPT:

a. solo branding. b. hallmark branding. c. family(umbrella) branding. d. Extension branding. e. horizontal branding.

Difficulty: (2) Knowledge: (A) Pages: 367-68

20. In international marketing, a firm’s global brand structure is shaped by the following three types of factors:

a. firm-based drivers, product-market derivers, and the manufacturing dynamics. b. firm-based drivers, hi-tech derivers, and Web dynamics. c. firm-based drivers, product-market derivers, and market dynamics. d. firm-based drivers, product-market derivers, Internet dynamics. e. none of the above


21. Brand architecture guides the dynamics of the firm’s brand __________________:

a. portfolio. b. color. c. basket. d. Web e. none of the above.


22. According to Nestle’s Branding Tree, the company has four types of brands in its global operations EXCEPT:

a. plain brands. b. local brands. c. regional brands. d. worldwide strategic brands.

e. worldwide corporate brands.


23. With respect to a brand name changeover strategy, the _________________ strategy ties the new global brand name to the existing local brand name. After a transition period, the old name is dropped.

a. transparent forewarning b. summary axing c. fade-in/fade-out d. pyramid focusing e. parallel dimension


24. Euro Disney eventually becoming Disneyland is an example:

a. transparent forewarning. b. summary axing. c. fade-in/fade-out. d. pyramid focusing. e. parallel dimension.


25. With respect to a brand name changeover strategy, the _________________ strategy alerts customers about the brand name change (via communications such as in-store displays).

a. transparent forewarning b. summary axing c. fade-in/fade-out d. pyramid focusing e. parallel dimension


26. When Mars candy company took over Raider candy products and used the theme line “Now Raider becomes Twix, for it is Twix everywhere in the world,” the company used the ________________________ strategy for changing brand names.

a. transparent forewarning b. summary axing c. fade-in/fade-out d. pyramid focusing

e. parallel dimension


27. With respect to a brand name changeover strategy, the __________________ strategy where the company simply drops the old brand name and immediately replaces it with the global name. a. transparent forewarning b. summary axing c. fade-in/fade-out d. pyramid focusing e. parallel dimension


28. Global product line mix options could be:

a. an extension of the home country product line b. a subset of the home country product line c. a mix of local and home country d. localized only e. all of the above


29. _________________ is a system where a single banner brand is used worldwide, often with a sub-brand name, for almost the entire product mix of the company.

a. Domestic branding b. National branding c. Manufacturer’s branding d. Store branding or private labeling e. Umbrella (corporate) branding


30. All of the following are brand areas that might need protection EXCEPT:

a. the name itself. b. the slogan. c. the jingle. d. visual imagery. e. the size of the logo.


31. McDonald’s golden arches are part of the famous brand. Which of the following elements best describes that element of the brand that should be protected (according

to the example provided)?

a. the name itself. b. the slogan. c. the jingle.

d. visual imagery. e. the size of the logo.


32. Most companies sell a wide assortment of products. The assortment is usually described on the dimensions of ______________________ of the product mix.

a. width and scale b. width and timing c. width and ingredients d. width and length e. scale and length


33. The ______________ of the product assortment refers to the collection of different product lines marketed by the firm.

a. lengthb. width

c. horizontal scale d. vertical scale e. consistency


34. The ______________ of the product assortment refers to the number of items that the company sells within a given product line.

a. length b. width c. horizontal scale d. vertical scale e. consistency


35. When comparing the product mix in the company’s host and home markets, all of the following are possible scenarios EXCEPT:

a. an extension of the domestic line. b. an extension of a joint venture or strategic alliance. c. a subset of the home market’s product line.

d. a mixture of local and nonlocal product lines. e. a completely localized product line.


36. Small firms with narrow product assortment will normally choose which of the following strategies when attempting to enter an international market?

a. an extension of the domestic line. b. an extension of a joint venture or strategic alliance. c. a subset of the home market’s product line. d. a mixture of local and nonlocal product lines. e. a completely localized product line.


37. Blistex, a tiny U.S. company that makes primarily lip-care products, has a very limited range of product lines that are marketed to foreign markets. Blistex would probably choose which of the following strategies for entering foreign markets?

a. an extension of the domestic line. b. an extension of a joint venture or strategic alliance. c. a subset of the home market’s product line. d. a mixture of local and nonlocal product lines. e. a completely localized product line.


38. All of the following are drivers that impact the composition of a firm’s international product line EXCEPT:

a. customer service and warranty requirements. b. customer preferences. c. competitive climate. d. organizational structure. e. history.


39. The __________________ procedure uses a product line as a listening post for the new foreign market to see what product items work best.

a. drop/add matrix b. ship and shop approach c. probing and learning approach d. seal and deal approach e. push down approach


40. Product lines can be categorized as:

a. Core product, niche items, seasonal products, and filler products b. Core product, niche items, seasonal products, and filter products c. Core product, niche items, seasonal products, and final products d. Core product, niche items, seasonal products, and flimsy products e. None of the above


41. A good place to start is to analyze each individual country’s product portfolio on the basis of a sales turnover basis. Product lines can be categorized by all the following ways EXCEPT:

a. core products. b. cultural products. c. niche items. d. seasonal products. e. filler products.


42. With respect to product categories analyzed on the basis of sales turnover, a _____________ product is one where the item represents the bulk of the subsidiary’s sales volume.

a. core product b. cultural product c. niche item d. seasonal product e. filler product


43. With respect to product categories analyzed on the basis of sales turnover, a _____________ product is one where the product appeals to a small segment of the population (which might grow in time).



44. With respect to product categories analyzed on the basis of sales turnover, a _____________ product is one where the product has most of its sales during limited times during the year.



45. With respect to product categories analyzed on the basis of sales turnover, a _____________ product is one where the product is only a small portion of the subsidiary’s overall sales. These even might be “dead-weight” items.



46. Brand piracy might cause which outcomes?

a. revenue losses to the companyb. price increases by the MNC to identify the goods as genuinec. better diffusion of the brandd. consumer danger from poor quality fakese. both A and D


47. All of the following are strategic options available to international marketers to stop product piracy EXCEPT:

a. joint ventures. b. lobbying activities. c. legal action. d. product policy options. e. communication options.


48. Pirated products tend to be of ______________ quality.

a. good b. poor c. high d. special e. none of the above


49. Trying to obtain sanctions against countries that tolerate product piracy would be an example of which of the following strategic options available to international marketers trying to stop product piracy?



50. Intellectual property rights violations have been a major problem in China. Which of the following strategic options could be available to international marketers in the area of product piracy?

a. customs. b. lobbying activities. c. legal action. d. product policy options. e. all of the above.


51. LVMH, the owner of wide variety of upscale liquor brands, redesigned its bottles to make it more difficult for copycatters to reuse LVMH bottles for their own brews. This would be an example of which of the following strategic options in product piracy:

a. product policy options. b. lobbying activities. c. legal action. d. hybrid options. e. communication options.


52. Yamaha decided to combat China’s counterfeiters by launching new motorcycle

models at a similar price as fake products. This would be an example of which of the following strategic options in product piracy:



53. When international marketers warn consumers about the ramifications of accepting or buying counterfeit merchandise, this would be an example of which of the following strategic options available to international marketers trying to stop product piracy?



54. Holding cultural stereotypes about countries as an important source in assessing the value of a product is an example of:

a. the country of origin (COO) effect. b. nationalism. c. racial bias. d. social sensitivity. e. xenophobia.


55. The “Made In” label as an important source of assessing the value of a product is an example of:

a. regionalism b. nationalism. c. materialism d. social sensitivity. e. the country of origin (COO) effect.


56. Find the general statement about the country of origin (COO) effect listed below that is NOT true.

a. COO effects are not flexible. b. consumers prefer domestic products over imports. c. the critical factor appears to be the place of manufacture rather than the location of the company’s headquarters. d. COO effects do not change very much over time. e. demographics make a difference.


57. All of the following statements about the country of origin effect (COO) are true EXCEPT:

a. COO effects are restricted to Europe. b. Asian consumers prefer domestic products over imports. c. the critical factor appears to be the place of manufacture rather than the location of the company’s headquarters. d. COO effects do not change very much over time. e. psychographics make a difference.


58. If the country of origin (COO) effect is anticipated to be negative, a company can follow all of the following strategies to offset the effect EXCEPT:

a. select a brand name that disguises the country of origin. b. select a local brand name. c. select a high prestigious price. d. try to explain any negative government policy that might influence buyers. e. select a relatively low price.385-86-48

59. One of the major challenges faced by international marketers of services is:

a. protectionism. b. high costs. c. patent infringement. d. piracy. e. low profits.


60. The need for direct customer interface in providing services means that service providers must often have ____________________.

a. a warranty b. a command of the local language c. a local presence d. low profit expectation e. an inside government contact


61. Regarding opportunities in the global service industries, some of the _________rules have been extended to the international services trade under the new WTO regime.

a. World Bank b. International Monetary Fund c. United Nations d. GATT (General Agreements on Tariffs and Trade) e. none of the above


62. A major strength of global service firms is that their _________________.

a. local know-how b. global know-how c. regional know-how d. high-tech know-how e. political know-how


63. Global service firms often benefits from:

a. scale economies. b. weight economies. c. hybrid economies. d. perfect economies. e. visible economies.


64. To bridge cultural gaps between the home and host market, service companies often customize the product to the local market. This can be done by spotting _________________________.

a. environmental opportunities b. funding opportunities

c. regional opportunitiesd. cultural opportunities

e. political opportunities



65. A ______________ is a name, term, sign, symbol, or combination of them which is intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors.

66. Brand name awareness, perceived quality, and other associations invoked by the brand name in the customer’s mind can be described as being part of brand equity.

67. A good example of a global brand name is Microsoft.

68. One of the chief reasons for having a global brand is economies of scale.

69. The number one brand in the world in market value is IBM.


70. Interbrand’s most valuable brands list is dominated by American brands.

Difficulty: (2) Knowledge: (F) Page: 363, Exhibit 11-1

71. One of the reasons for pursuing a global brand as part of product policy is what might be called a prestige factor.


72. Euro Disney changed its name to Disneyland Europe.


73. Brand equity is usually consistent from country to country.


74. In solo branding, each brand stands on its own with a product or brand manager running it.


75. Family (umbrella) branding is a not hierarchy of brands that may use the company’s corporate brand.


76. With respect to brand name changeover strategies, a ____________ strategy consists of somehow tying the global brand name to the local name. Eventually, the local brand is phased out.

77. With respect to brand name changeover strategies, a ________________ strategy consists of alerting the consumer about an impending brand name change and then changing the brand name to the global brand name.

78. If a company simply drops the old brand name and immediately replaces it with the global name, it is called summary axing.

79. Companies should monitor the marketplace’s response to the brand-name change with marketing research.


80. Pirated products tend to be of high quality.


81. Country of origin (COO) effects have been shown to be unstable over time.


82. Country of origin (COO) influences are particularly strong among the elderly.


83. Country of origin (COO) effects depend on the product category.


84. Country-image stereotypes cannot hurt a company.


85. In international marketing, trade barriers to service marketers tend to be much more cumbersome than physical products.


86. Demand for premium quality services expands with increases in consumers’ age.


Essay

87. Deciding to move toward global branding is a difficult decision. This must often be considered with respect to the globalization versus localization issue. What are the questions that might be useful in reaching a decision as to pursue globalization over localization?

88. When the case for a transition from a local to a global (or regional) brand name is made, the firm needs to decide on how to implement the changeover in practice. Comment on the strategies that might be available for doing this and the considerations that might steer the manager toward one of the strategies.

89. Describe the strategies that might be used by multinational corporations to cope with the growing threat of product piracy. What are your feelings about purchasing pirated products? Give a brief illustration.

90. Comment on how you perceive the marketing of services on a global basis to be different from marketing tangible goods. Think about the difficulties that might be present with marketing services.

Chapter 12

Multiple Choice

1. ________________ is the only marketing mix instrument that creates revenues.

a. Product b. Price c. Place d. Promotion e. People


2. A company’s pricing policy is a highly ____________________ process based on inputs from various departments.

a. under-functional b. low-functional c. geo-functional d. bi-functional e. cross-functional


3. All of the following are drivers that govern global pricing decisions EXCEPT:

a. company b. customers c. controls d. competition e. channels


4. In many countries, multinationals’ pricing decisions are impacted by:

a. break-even analysis b. regression functions c. supply and service curves d. government policies e. business ethics


5. When developing a pricing strategy for its global markets, one of the first steps that a company must go through is to decide:

a. what the actual price should be. b. how high or low to price. c. how much money will the price bring in. d. what it wants to accomplish with its strategy. e. what form of controls will regulate price.


6. The most important pricing objectives of companies doing business in the United States (including foreign-based firms) are(is) to:

a. achieve a satisfactory return on investment. b. maintain market share. c. meet a specified profit goal. d. all of the above. e. none of the above.


7. According to a recent research, all of the following are examples of important pricing objectives EXCEPT:

a. drive competition out of business. b. to achieve a satisfactory return on investment. c. maintain market share. d. expand market share. e. to meet a specified profit goal.


8. When New Balance, the U.S.-based maker of high-tech running shoes, sells its shoes

in France as haute couture items rather than simply athletic shoes, this is an example of:

a. country objectives.b. company objectives.c. consumer objectives.

d. monopoly objectives. e. none of the above.


9. When making pricing decisions, ______________ set(s) the floor.

a. profits b. costs c. demand d. supply e. service


10. ______________ costs change with sales volume. a. Demand b. Supply c. Derived d. Fixed e. Variable


11. _________________ costs do not vary with sales volume changes.

a. Demand

b. Supply c. Derived d. Fixed e. Variable


12. In the international marketplace, _________________ pricing adds international costs and a mark-up to the domestic manufacturing cost.

a. dynamic incremental pricing b. export price c. import price d. cost-plus price e. target-return price


13. In the international marketplace, ________________ pricing arrives at a price after removing domestic fixed costs. Only variable export costs generated by the exporting effort and a portion of the overhead load should be recuperated by the pricing effort (according to this method).

a. dynamic incremental pricing b. export price c. import price d. cost-plus price e. target-return price


14. Examples of exporting-related ____________________ include manufacturing costs, shipping expenses, insurance, and overseas promotional costs.

a. incremental costs b. demand costs c. fixed costs d. target costs e. service costs


15. One of the risks of dynamic incremental pricing (in the case where the export list price is far below the domestic price) that ______________ can be triggered in the export market.

a. high profit potential b. dumping charges or accusations c. falling profits d. falling quality e. falling service


16. When demand is highly price sensitive, the company needs to consider how it can _________________ from a global perspective.

a. raise prices b. lower prices c. lower service d. raise quality e. reduce costs


17. Customers’ _________________ is a key consideration in pricing decisions.

a. location b. buying power c. decision power d. thinking power e. none of the above


18. Countries with low per-capita income are more __________________ than in developed countries.

a. promotion sensitive b. price sensitive c. need sensitive d. demand sensitive e. service sensitive


19. One alternative for successful marketing to the price sensitive low per-capita income market is to produce a ________________ product or lower product quality.

a. downsized b. upgraded c. synthetic d. copy e. parallel


20. According to textbook, ________________ by and large charges the same price worldwide.

a. Starbucks b. IBM c. Coca-Cola d. Toyota e. BMW


21. According to the text, once brand loyalty has been established, _____________ will play less of a role as a purchase criterion.

a. promotion b. service c. product d. price e. place


22. Differences in the competitive situation across countries will usually lead to:

a. cross-border price differentials. b. local price differentials. c. domestic price differentials. d. intra-company price differentials. e. company-based price differentials.


23. Once brand loyalty has been established, price will play less of a role as a purchase criterion, and the firm may be able to institute a ________________ strategy.

a. demand-based b. premium pricing c. elastic pricing d. promotion-related pricing e. sensitivity-based


24. All of the following are reasons that competitive situations vary from country to country (with respect to the competitive environment) EXCEPT:

a. the number of competitors varies from country to country. b. the nature of competition changes. c. the presence of counterfeit products. d. the presence of gray markets. e. the competitive position of a firm changes from one country to another.


25. An example of nonprice competition that is faced in some markets is:

a. retailer sales. b. discounts. c. coupons. d. advertising. e. cents-off deals.


26. Wide gaps in the price sensitivity between countries for the same product may create conditions that promote _________________ markets.

a. backward b. gray c. white d. demand e. forward


27. Large cross-country price gaps open up arbitrage opportunities that lead to _________________ imports from low-price countries to high-price ones.

a. black market b. white market c. zero market d. smuggled e. parallel


28. Sales tax rates, tariffs, and price controls are all examples of _______________ that can have a direct or indirect impact on the pricing policies of a firm in the international marketplace.

a. sales volume policies b. price policies c. government policies d. restrictions e. punishments


29. Huge government deficits are examples of a(n) ________________ impact on pricing decisions.

a. direct b. indirect c. artificial d. planned e. uncontrollable


30. Inflation in an economy is an example of a(n) ________________ impact on pricing decisions.

a. direct b. indirect c. artificial d. planned e. uncontrollable


31. To cover the incremental costs (such as shipping), the final foreign retail price will often be much higher than the domestic retail price. This phenomenon is known as ______________________.

a. inflation. b. the price deflator. c. price escalation. d. price sensitivity. e. global arbitrage.


32. There are two ways to deal with the price escalation phenomenon. One of these methods is to cut the export price. The other is to:

a. change the promotion strategy. b. position the product as a (super) premium brand. c. position the product as a lower quality brand. d. reduce retailer margins. e. reduce distances that the good must be shipped.


33. Which of the following would be a good option to follow if lowering the export price were the firm’s objective?

a. rearrange the distribution channel. b. change the promotion. c. change the warranty provisions. d. give more of the product in the package as an incentive to purchase. e. study the demand curve.

Difficulty: (3) Knowledge: (A) Page: 402-3

34. All of the following are options that might be followed if the firm wished to lower its export price on a product EXCEPT:

a. rearrange the distribution channel. b. eliminate costly features (or make them optional). c. downsize the product. d. expand the warranty categories to give incentive for higher quality. e. assemble or manufacture the product in foreign markets.


35. If a firm decide to penetrate the Japanese consumer market through direct marketing (such as catalog or telemarketing sales). Which of the following strategies best describes this option for lowering the price of an exported product?

a. rearrange the distribution channel. b. eliminate costly features (or make them optional). c. downsize the product. d. expand the warranty categories to give incentive for higher quality. e. assemble or manufacture the product in foreign markets.


36. When the U.S. levied a 10 percent tax on plus-$30,000 luxury cars, Land Rover changed the weight of Range Rover models so they could be classed as a truck and thereby avoid the luxury status, the company was attempting to follow which of the price strategies listed below for lowering the price of an exported product?

a. rearrange the distribution channel. b. eliminate costly features (or make them optional). c. downsize the product. d. adapt the product to escape tariffs or tax levies. e. assemble or manufacture the product in foreign markets.


37. LEGO, the Danish toymaker, rather than worrying about finding ways to lower the price of its product in foreign markets has chosen (most LEGO sets are sold from $6-$223) to adopt a __________________ strategy position.

a. demand-based b. premium pricing c. elastic pricing d. promotion-related pricing e. sensitivity-based


38. When McDonald’s first opened their restaurants in Russia in 1990, the Big Mac meal cost 6 rubles. Three years later, the same meal cost 1,100 rubles. This would be an example of how:

a. demand can change. b. how premium pricing can damage a product. c. price elasticity works. d. inflation can damage a market. e. service is what matter the most to the average customer.


39. All of the alternatives listed below are ways to safeguard against inflation EXCEPT:

a. modify components, ingredients, parts and/or packaging materials. b. source materials from low-cost suppliers. c. lengthen credit terms. d. include escalator clauses in long-term contracts. e. quote prices in a stable currency.


40. ___________ inflation also mandates rapid inventory turnarounds.

a. High b. Low c. Visible d. Hyper e. Slow


41. To combat hyperinflation, many governments occasionally impose ______________

controls.

a. commodity b. inflation c. margin d. discount e. price


42. According to lessons learned in Brazil’s hyperinflationary economy, McDonald’s will deal with Russia’s runaway inflation by using all of the following tools EXCEPT:

a. emphasize cash flow management. b. control of raw materials. c. institute sales and price setting strategies. d. hedge for potentially substantial distortions in the exchange rate. e. make loans to local franchise investors to bring them past hard times.


43. Firms faced with price controls can take any of the following strategies EXCEPT: a. shift the target segment or markets. b. launch new products or variants of existing products. c. negotiate with the government. d. predict the incidence of price controls. e. have the home government bring pressure on the host government.


44. When a manufacturer of breakfast cereals for humans shifts production to a chicken feed product to overcome the effects of price controls, the firm would be following which of the strategies outlined below?

a. adapt the product line. b. shift target segments or market. c. negotiate with the government. d. launch a variant of an existing product. e. predict the incidence of price controls.


45. If a company that is threatened with price controls diversifies into product lines that are relatively free of price controls, the firm would be following which of the following strategies?

a. adapt the product line.

b. shift target segments or market. c. negotiate with the government. d. launch a variant of an existing product. e. predict the incidence of price controls.


46. The most drastic reaction to government-imposed price controls is to:

a. adapt the product line. b. shift target segments or market. c. negotiate with the government. d. launch a variant of an existing product. e. leave the country.


47. One of the main reasons for staying in a country that has government-imposed price controls to deal with hyperinflation is:

a. the government might not let you out. b. when the danger is over you cannot get back in. c. you gain experience for other markets with similar problems. d. you do not want to loose face. e. you do not want to show weakness to your competition.


48. ___________________ reflect how much one currency is worth in terms of another currency.

a. Interest rates b. Credit rates c. Bond rates d. Inflation rates e. Exchange rates


49. All of the following are exporter strategies when the domestic currency is weak EXCEPT: a. stress price benefits. b. engage in nonprice competition by improving quality, delivery, and aftersale service. c. expand the product line and add more. d. shift sourcing and manufacturing to domestic market. e. exploit export opportunities in all markets.


50. Which of the following are exporter strategies when the domestic currency is strong?

a. stress price benefits. b. engage in nonprice competition by improving quality, delivery, and aftersale service. c. expand the product line and add more. d. shift sourcing and manufacturing to domestic market. e. exploit export opportunities in all markets.


51. All of the following are considered to be exporter strategies when the domestic currency is strong EXCEPT:

a. conduct conventional cash-for-goods trade. b. engage in nonprice competition by improving quality, delivery, and aftersale service. c. improve productivity and engage in vigorous cost reduction. d. shift sourcing and manufacturing overseas. e. give priority to exports to relatively strong-currency countries.


52. Which of the following are considered to be exporter strategies when the domestic currency is weak?

a. conduct conventional cash-for-goods trade. b. engage in nonprice competition by improving quality, delivery, and aftersale service. c. improve productivity and engage in vigorous cost reduction. d. shift sourcing and manufacturing overseas. e. give priority to exports to relatively strong-currency countries.


53. Two major issues confronting international marketers result from currency movement. The first of these is in which currency do we quote our prices? The second is:

a. how much of the loss or gain (because of pass through) should be passed to consumers? b. how much should we invest in the local currency? c. how much should we invest in our own currency? d. what role should the central bank play in currency movement? e. should we trust international arbitrage as a means of settling currency value?


54. A weakening of the U.S. dollar relative to the Japanese yen has the effect of:

a. strengthening the Japanese position in the United States. b. strengthening the U.S. position in Japan. c. weakening the dollar in Europe. d. strengthening the yen in Europe. e. all positions remain unchanged.


55. A strengthening of the U.S. dollar relative to the Japanese yen has the effect of:

a. strengthening the Japanese position in the United States. b. strengthening the U.S. position in Japan. c. weakening the dollar in Europe. d. strengthening the yen in Europe. e. all positions remain unchanged.


56. One of the ways that a weakening of the U.S. dollar relative to the Japanese yen may not necessarily be a benefit to a U.S. firm is that:

a. the government may not allow the pass through. b. the government might erect tariff barriers. c. Japanese parts might become more expensive and when imported for inclusion into an exported product, prices might actually rise. d. other currencies might be the ones actually traded. e. costs can be cut in other ways.


57. When considering the currency pass-through phenomenon, all of the following factors give an indication as to the appropriate action EXCEPT:

a. the customer’s price sensitivity. b. government actions. c. the impact of dollar appreciation on the firm’s cost structure. d. the impact of dollar depreciation on the firm’s cost structure. e. the amount of competition in the export market.


58. When exporters lower their mark-ups in a more price-conscious export market than in a price-sensitive market, with respect to exchange rate movements this is called ______________________.

a. local-currency price stability (LCPS) b. pricing-to-market (PTM)

c. transfer pricing d. countertrade pricing e. demand mark-up pricing


59. When an exporter uses the _______________________ method, the effect can be negative. Frequent adjustments of prices in response to currency movements will distress local channels and customers.

a. local-currency price stability (LCPS) b. pricing-to-market (PTM) c. transfer pricing d. countertrade pricing e. demand mark-up pricing


60. _____________________ is a special form of pricing where mark-ups are adjusted to stabilize prices in the buyer’s currency. This method helps to create stability in the local currency.

a. Local-currency price stability (LCPS) b. Pricing-to-market (PTM) c. Transfer pricing d. Countertrade pricing e. Demand mark-up pricing


61. With respect to currency quotation when preparing for buying and selling transactions, buyers and sellers generally prefer to quote in: a. a world currency. b. the seller’s currency. c. the buyer’s currency. d. their own currency. e. the dollar.


62. When sales take place between related entities of the same company, ___________ is often used.

a. local-currency price stability (LCPS) b. pricing-to-market (PTM) c. transfer pricing d. countertrade pricing

e. demand mark-up pricing


63. Transfer pricing decisions in an international context need to balance off the interests of a broad range of stakeholders. All of the following would be examples of those stakeholders EXCEPT:

a. the parent company. b. the competition. c. local country managers. d. host government(s). e. the domestic government.


64. There are a series of key drivers behind transfer pricing decisions. The most important of these drivers is thought to be:

a. competition in the foreign country. b. economic conditions in the foreign country. c. price controls. d. exchange controls. e. market conditions in the foreign country.


65. __________________ uses the market mechanism as a cue for setting transfer prices.

a. Local-currency price stability (LCPS) pricing b. Pricing-to-market (PTM) c. Market-based pricing d. Countertrade pricing e. Nonmarket-based pricing


66. __________________ (as a form of market-based pricing) basically dictates that the company charges the price that any buyer outside the company would pay (as if the transaction occurred between two unrelated entities).

a. Local-currency price stability (LCPS) pricing b. Pricing-to-market (PTM) c. Arm’s length pricing d. Countertrade pricing e. Nonmarket-based pricing


67. ___________________ simply adds a mark-up to the cost of the goods.

a. Demand-based pricing b. Negotiated pricing c. Cost-based pricing d. Markup-based pricing e. Target return pricing


68. To conduct ________________, conflicts between country affiliates are resolved through mutual discussion of the transfer pricing problems.

a. demand-based pricing b. negotiated pricing c. cost-based pricing d. markup-based pricing e. target return pricing


69. In the area of transfer pricing, experts suggest to set transfer prices that are as close as possible to the _________________________________.

a. Balanced Arm’s Length Standard b. Building Arm’s Length Standard

c. Best Arm’s Length Standardd. Branding Arm’s Length Standard

e. Basic Arm’s Length Standard


70. ______________ occurs when imports are being sold at an “unfair” price.

a. Price fixing b. Dumping c. Gray marketing d. Countertrade e. Predatory pricing


71. To reduce exposure and risk of antidumping actions, the exporter can follow any of the following marketing strategies EXCEPT:

a. trading-up b. service enhancement c. distribution

d. government intervention e. communications


72. In the area of price coordination, the following considerations matter EXCEPT:

a. nature of customer. b. amount of product differentiation. c. nature of channels. d. nature of competition. e. role of the World Bank.


73. In international marketing, purchasers often demand _____________________ from their suppliers.

a. uniform-pricing contracts b. diverse-pricing contracts c. bilateral-pricing contracts d. global-pricing contracts e. local-pricing contracts


74. ___________________ is an umbrella term used to describe unconventional trade- financing transactions that involve some form of noncash compensation.

a. Local-currency price stability (LCPS) b. Pricing-to-market (PTM) c. Arm’s length pricing d. Countertrade e. Nonmarket-based pricing


75. Countertrade transactions include the following options EXCEPT:

a. simple barter. b. switch trading. c. geo trading. d. countertrade pricing. e. clearing agreements.


76. In a(n) _______________, no third party is involved to carry out the transaction.

a. clearing agreement b. offset c. buyback arrangement d. switch trading e. simple barter



77. According to the textbook, factors that impact global pricing decisions include company, customers, competition, technology.


78. Cost differentials do not lead to wide price gaps.


79. In gray markets, products marketed in low-priced countries are shipped and resold by unauthorized channels in high-priced markets.


80. Government policies do not have any impact on pricing decisions.


81. To cover the incremental costs of doing business in a foreign market, the final foreign retail price will often be much higher than the domestic retail price. This is called price _________________.

82. To combat hyperinflation, governments occasionally impose price controls.


83. One of the courses of action that a company can follow when faced with price controls is to adapt the product line.


84. A stronger U.S. dollar undermines the competitive position of American exports.


85. An exporter strategy when faced with a weak domestic currency would be to

engage in nonprice competition by improving quality, delivery, and aftersale service.


86. If an exporter were to stress price benefits, the exporter would probably be facing a domestic currency that was perceived as being weak.


87. LCPS stands for:

88. In the area of international pricing, sellers and buyers usually prefer a quote in their domestic currency.


89. When sales transactions occur between related entities of the same company, ________________ pricing often occurs.

90. In arm’s-length prices, a firm uses the market mechanism as a cue for setting transfer prices.


91. Cost-based pricing simply adds a mark-up to the cost of goods.


92. Negotiated transfer pricing is another form of nonmarket-based pricing.


93. Government-imposed market constraints favor nonmarket-based transfer pricing methods.


94. In transfer pricing, BALS stands for:

95. Multinationals do not need to take antidumping laws into account when determining their global pricing strategy.


96. VER is an acronym for:

97. Global pricing contract (GPCs) are demanded by governments.


98. Several multinationals doing business in the European Union harmonize their prices to narrow price gaps between different member states..


99. When sales transactions occur in some form of compensation other than money (such as trading corn for whiskey), the two trading companies are engaged in ________________.

100. In switch trading, a third party is involved which uses the credits to buy goods from the deficit country.


101. Countertrade purchase is not the most popular form of countertrade.


Essay

102. In international marketing, price escalation can be a serious problem. To offset these difficulties marketers must be prepared to creatively meet the price escalation challenge. List the various ways that marketers might attack this problem.

103. Setting prices in a floating exchange rate world pose unique problems. Comment on how a company might react to floating exchange rates. What considerations are probably the most important for the decision maker to consider?

104. What is transfer pricing? Comment on the stakeholders and key drivers that impact the decision maker faced with transfer pricing.

105. Antidumping measures are very popular with most of the governments of industrialized nations. What measures might exporters consider to hedge themselves against antidumping procedures? Which method do you think is probably the best? Justify your answer.

106. Discuss the motives behind countertrade and the guidelines for making countertrade successful.

Chapter 13

Multiple Choice

1. In international marketing, advertising to some extent is a _________________ phenomenon.

a. cultural b. social c. general d. static e. global


2. ___________________ is one of most formidable barriers that international advertisers need to surmount.

a. Politicsb. Technology

c. Translation d. Language e. None of the above


3. In international marketing, numerous promotional efforts misfire because of ____________________ -related problems.

a. politicsb. technology

c. transfer d. transaction e. language


4. Translation errors include:

a. simple carelessness.b. multiple-meaning words.

c. idioms. d. all of the above. e. none of the above.


5. All of the following are language barriers that can be identified as typical international translation errors EXCEPT:

a. simple carelessness. b. idioms. c. local slang. d. multiple-meaning words. e. incorrect grammar.


6. To solve language-related barriers, companies in international markets should use __________________ advertising agencies.

a. local b. regional c. global d. transnational e. domestic


7. In an advertising message, the original slogan was “Body by Fisher.” The translation in a foreign market was “Corpse by Fisher.” This would be an example of which of the following constraints on international promotion?

a. language barriers. b. advertising regulations. c. cultural constraints. d. local attitudes toward advertising. e. poor media infrastructure.


8. In an advertising message, the original slogan was “Body by Fisher.” The translation in a foreign market was “Corpse by Fisher.” This would be an example of which of the following types of translation errors?

a. simple carelessness.

b. idioms. c. local slang. d. multiple-meaning words. e. incorrect grammar.


9. In an advertising message, the original slogan was “When I used this shirt, I felt good.” The translation in a foreign market was “Until I used this shirt, I felt good.” This would be an example of which of the following types of translation errors?



10. In Britain, one U.S. advertiser ran a campaign that centered around the slogan “You can use no finer napkin at your dinner table.” In Britain, some people use the word “napkin” for the word “diapers.” This would be an example of which of the following types of translation errors?



11. In Spanish, five different words can be used for the word “tires” (cauchos, cubiertas, gomas, llantas, and neumaticos). Obviously, this might present problems in advertising. This would be an example of which of the following types of translation errors?



12. Given that so many errors can occur with translation and misunderstanding of advertising in the foreign market, which of the following is probably the easiest

solution to the problem?

a. involve ad agencies from the company’s domestic environment. b. involve ad agencies from the host country’s environment. c. check with government officials. d. employ foreign language specialists for all markets. e. don’t worry about it, the problem usually corrects itself.


13. All of the following are strategies for dealing with translation problems in a foreign market EXCEPT:

a. involve ad agencies from the host country’s environment. b. don’t translate the message for the foreign market. c. add foreign language subtitles. d. use voice-overs that use foreign slang. e. check with foreign officials.


14. Many of the trickiest promotional issues occur in the domain of _________________.

a. environment b. money c. technology d. business e. religion

Difficulty: (2 Knowledge: (F) Page: 429

15. Of the barriers that face a foreign company when attempting to promote products in a foreign market, ___________________ are arguably the biggest stumbling block to successful advertising in the foreign market.

a. language barriers b. advertising regulations c. cultural constraints or barriers d. local attitudes toward advertising e. poor media infrastructure


16. When considering barriers that are faced by international marketers attempting to successfully advertise in foreign markets, cultural constraints can pose huge difficulties. The trickiest problem within this category is usually posed by:

a. the government. b. trade unions. c. environmental rights groups. d. women. e. the host country’s religion(s).


17. One framework that helps with studying the influence of culture on global advertising is the cultural classification scheme developed by Dutch researcher Geert Hofstede. All of the following are dimensions of a value system used in the cultural classification scheme EXCEPT:

a. power distance. b. possessions. c. uncertainty avoidance. d. individualism. e. masculinity.


18. One framework that helps with studying the influence of culture on global advertising is the cultural classification scheme developed by Dutch researcher Geert Hofstede. One dimension refers to the degree of inequality that is seen as acceptable within the country. This dimension would best be described as:

a. power distance. b. long-termism. c. uncertainty avoidance. d. individualism. e. masculinity.


19. One framework that helps with studying the influence of culture on global advertising is the cultural classification scheme developed by Dutch researcher Geert Hofstede. One dimension refers to the extent that people within the culture prefer structured situations with clear cut rules and little ambiguity. This dimension would best be described as:



20. If ads in a foreign country stress performance, success, and completion, they would probably be focusing on which of the following cultural classification schemes as a way to reach a segment of the population where this dimension was high or important.



21. With respect to budget forms for advertising, the _______________ method simply sets the overall advertising budget based on either past or expected sales revenue.

a. percentage of sales b. competitive parity c. all-you-can-afford d. objective-and-task e. marginal increment


22. The primary appeal of the percentage of sales method of allocating an advertising budget is its:

a. popularity. b. accounting good sense. c. control feature. d. simplicity. e. accuracy.


23. If an advertiser does not want to “rock the boat” and desires to sustain a minimum “share of voice” they will probably choose which of the following advertising budget forms?



24. The most popular of the budget methods (in fact, two-thirds of respondents in a survey said they had used the method) is the _________________ method.



25. If an advertiser spells out the goals of their communication strategy and determines what they would like to accomplish with advertising and then plans a budget accordingly, they are probably using the ______________ method of budgeting.



26. If an advertiser uses field experiments (such as systematically manipulating the spending amount in different areas within the country to measure the impact of advertising on the brand’s awareness, sales volume, and market share) to adjust budget expenditures, they are probably using the ______________ method of budgeting for advertising expense.



27. A good case can be made for standardizing an ad campaign in the international marketplace. All of the following would be good, justifiable reasons for standardization EXCEPT:

a. scale economics. b. consistent image. c. government regulation. d. global consumer segments. e. creative talent.


28. Message consistency (an advertising standardization issue) matters a great deal in markets with extensive media overlap or for goods that are sold to “cosmopolitan” customers who travel the globe. The best example of a product or service that fits the above is:

a. beer. b. banking. c. a beef product. d. an automobile. e. cosmetics.


29. In the domain of advertising, __________________ means that marketers encourage their affiliates to adopt, or at least consider, advertising ideas that have proven successful in other markets. Which of the following standardization benefits applies?

a. scale economics b. consistent image c. cross-fertilization d. global consumer segments e. creative talent


30. Nestle used an ad for Taster’s Choice coffee originally developed in the U.K. as its campaign in the U.S., with some minor changes to reflect actors and speech. This would be an example of which of the following reasons for using standardization in the foreign market?

a. scale economics b. consistent image c. cross-fertilization d. global consumer segments e. creative talent


31. Research from an advertising agency survey indicates that the number one reason for standardizing multinational advertising was to:

a. take advantage of demographics. b. take advantage of cultural similarities between the countries. c. capitalize on the fact that the product was standardized. d. make full use of a proven successful idea. e. create a single brand image in all markets.


32. All of the following are barriers to standardization in international advertising EXCEPT:

a. cultural differences. b. budget. c. advertising regulations. d. differences in the degree of market development. e. the “Not Invented Here” syndrome.

Difficulty: (2) Knowledge: (A) Page: Pages: 437-38

33. As an illustration of a barrier to advertising standardization, Ray-Ban had to re-shoot a sunglasses commercial for Malaysia because the original version had Caucasian actors. In Malaysia, ads featuring Caucasians are not allowed. This example would be an example of which of the following barriers to standardization of international advertising?

a. cultural differences. b. budget. c. advertising regulations. d. differences in the degree of market development. e. the “Not Invented Here” syndrome.


34. In the area of “Not-Invented-Here” (NIH) syndrome, stonewalling attempts at standardization may come from ________________ subsidiaries/advertising agencies.

a. local b. regional c. global d. transnational e. multinational


35. In the ________________ approach, every country subsidiary follows its own course developing its own ads based on what it thinks works best in its market.

a. host country b. home country c. foreign d. laissez faire

e. polycentric


36. There are a variety of formats for creating international advertising. With _________ advertising, the creative strategy is highly centralized. Universal copy is developed for all markets.

a. export b. import c. prototype (pattern) d. concept cooperation e. psychological


37. There are a variety of formats for creating international advertising. With _________ advertising, guidelines are given to local affiliates concerning the execution of the advertising. The guidelines are then conveyed via manuals or tapes.

a. export b. import c. prototype (pattern) d. concept cooperation e. psychological


38. With prototype standardization, ____________________ spell out guidelines on the positioning theme.

a. competitors b. governments c. advertising mangers d. headquarters e. CEOs


39. With __________________ advertising, guidelines are given to the local affiliates concerning the execution of the advertising.

a. geotype b. prototype c. modulartype d. export

e. psychological


40. Another term to describe the portfolio of media choices (and variations within those choices) is called:

a. media decision making. b. media super structure. c. media infrastructure. d. media bias. e. media method.


41. High cost-per-thousand (CPMs) are found in areas that have a high per capita __________. a. LMP b. ZNP c. MMP d. GNP e. PPP


42. Recent developments in the global media landscape include the following EXCEPT: a. growing commercialization and deregulation of mass media. b. shift from radio and print to TV advertising. c. rise of global and regional media. d. growing spread of interactive marketing. e. growing importance of high definition television.


43. All of the following can be characterized as being significant trends or developments in the international media landscape EXCEPT:

a. growing commercialization and deregulation of mass media. b. shift from radio and print to TV advertising. c. rise of global and regional media. d. growing importance of state controlled advertising. e. improved monitoring.


44. Infomercial marketers now have access to over one-half of Japanese consumers. Which of the following trends would be most representative or closely associated with the above fact?

a. growing commercialization and deregulation of mass media. b. shift from radio and print to TV advertising. c. rise of global and regional media. d. growing spread of interactive marketing. e. improved monitoring.


45. To promote the Xbox video program, Microsoft gave away two million DVDs with an interactive commercial. This is an example of which of the following trends?

a. growing commercialization and deregulation of mass media. b. shift from radio and print to TV advertising. c. rise of global and regional media. d. growing spread of interactive marketing. e. improved monitoring.


46. Ad regulations governing the advertising of cigarettes would probably fall under which of the following advertising regulation categories?

a. advertising of “vice products” and pharmaceuticals. b. comparative advertising. c. content of advertising messages. d. advertising targeting children. e. none of the above.


47. If advertisers disparage their competition in an advertisement, the regulation category that would govern this practice would probably be:

a. advertising of “vice products” and pharmaceuticals. b. comparative advertising. c. content of advertising messages. d. advertising targeting children. e. all of the above.


48. Given that advertising regulations not only govern advertising in foreign markets but can also create difficulties, how can marketers cope? All of the following are valid suggestions EXCEPT:

a. keep track of regulations and pending legislation. b. challenge regulations in court. c. adapt the marketing mix strategy. d. try to circumvent the regulation by using local advertisers. e. lobby for favorable regulations or results.


49. When screening ad agencies, all of the following criteria might be used EXCEPT:

a. market coverage. b. cost of agency talent and expense. c. quality of coverage. d. expertise with developing a central international campaign. e. scope and quality of support services.

50. _________________ refer(s) to a collection of short-term incentive tools that lead to quicker and/or larger sales of a particular product by consumers or the trade.

a. Advertising b. Sales promotion c. Internet marketing d. Promotion e. Publicity


51. Sampling, price-offs, coupons, sweepstakes, bonus packs, and trade allowances are all examples of ____________________.

a. advertising b. sales promotion c. direct marketing d. public relations e. publicity


52. All of the following explain the local nature of sales promotion for the multinational corporation EXCEPT:

a. economic development. b. market maturity. c. cultural perceptions. d. trade structure.

e. new product development.


53. If promotional dollars are aimed at the end-user, then the strategy is described as being a ______________ strategy.

a. push b. pull c. conventional d. vertical e. horizontal


54. If promotional dollars are aimed at the middlemen, then the strategy is described as being a ______________ strategy.



55. If promotional dollars are aimed at the trade or distributor, then the strategy is described as being a ______________ strategy.



56. Procter & Gamble has attempted to cut back on _____________ strategy incentives by introducing every-day-low-pricing.



57. Adidas, the German sportswear maker, paid a hefty $80 million to $100 million in cash and services for sponsorship of the 2008 Beijing Summer Olympics. This is an example of _________________________.

a. event sponsorship b. sales sponsorship c. trade shows d. publicity e. public relations


58. Although, Coca-Cola was the official sponsor of the 2002 World Cup Soccer, Pepsi managed to sign up some of the biggest soccer celebrities, including England’s soccer star David Beckham. In event sponsorship, this is an example of ________________.

a. guerilla marketing b. ambush marketing c. passive marketing d. active marketing e. cooperative marketing


59. All of the following are risks associated with event sponsorship EXCEPT:

a. nonsponsors can come in. b. too many sponsorships might be sold. c. there might be clutter among the sponsors and their messages. d. the sponsorship might be too expensive for the number of people that show up. e. adequate protection of the sponsorship.

Difficulty: (3) Knowledge: (F) Page: 45260. Trade shows are also called _______________________.

a. trade marts b. trade markets c. trade fairs d. trade expos e. trade circles


61. Trade shows in Europe:

a. are about more than just business.b. are exactly the same as in the U.S.c. never serve refreshments or meals.d. might be much larger than American shows.e. both A and D


62. Which of the following does NOT describe mobile marketing?

a. It refers to ads on the sides of trucks and buses.b. Mobile marketing cannot interact with consumers.c. It fosters top-of-mind brand awareness.d. It increases customer involvement.e. Both A and B


63. In a modern sense, the goal of many MNCs is to pursue a(n)________________ program. In this program, coordination of all communication vehicles would take place. Key ideas would be communicated in a unified manner.

a. vertical communications b. horizontal communications c. integrated marketing communications d. global communications e. synergistic communications


64. The goal of ________________________________ is to coordinate mass advertising, sponsorships, sales promotions, packaging, point-of-purchase displays, and so forth.

a. integrated marketing communications b. integrated horizontal communications c. integrated vertical communications d. global communications e. synergistic communications


65. A __________________________________ program goes one step further since it is a system of active promotional management that strategically coordinates global communications in all of its component parts both horizontally (country-level) and vertically (promotion tools).

a. vertical communications

b. horizontal communications c. globally integrated marketing communications d. global communications e. synergistic communications



66. Language is not a major barrier in international advertising.


67. One can identify three different types of _______________________: simple carelessness, multiple-meaning words, and idioms.

68. Language barriers can occur through translation problems. The most common of these translation difficulties are due to ____________________ , multiple-meaning words, and idioms.

69. Language barriers can occur through translation problems. If the original slogan was “Body by Fisher” and the translation was “Corpse by Fisher,” the problem with translation was probably due to a problem idiom.


70. Idioms that use slang from one country to another may inadvertently lead to embarrassing meanings in the host country.


71. One obvious cure for misinterpreted meanings of advertising slogans in foreign countries is to reduce the usage of slogans.


72. With respect to advertising, probably the trickiest of the cultural barriers centers around the host country’s religion.


73. One framework that helps with studying the influence of culture on global advertising is the cultural classification scheme developed by Geert Hofstede. The value system construct that refers to the degree of inequality that is seen as acceptable within the country is called ________________.

74. One framework that helps with studying the influence of culture on global advertising is the cultural classification scheme developed by Geert Hofstede. One of these constructs is called power distance. Research has shown that ads that position products or services as status symbols are most likely to be effective in countries with large power distance.


75. One framework that helps with studying the influence of culture on global advertising is the cultural classification scheme developed by Geert Hofstede. The value system construct that refers to the extent that people within the culture prefer structured situations with clear-cut rules and little ambiguity is called __________________.

76. Ad campaigns that center around the hard-sell approach (such as testimonials) are advisable for cultures with high uncertainty avoidance such as the United States.


77. In the percentage of sales method, the overall advertising budget is based on either past or expected sales revenues.


78. Viral marketing involves the selling of disease-causing agents.

79. With respect to budget forms that can be used in advertising, the ________________ method simply sets the overall advertising budget as a percentage of sales.

80. In the competitive parity rule, advertisers do not use competitors’ advertising spending as a benchmark.


81. With respect to budget forms that can be used in advertising, the _____________ method uses competition’s spending as a benchmark and provides the measure of the optimal spending amount.

82. The most popular budgeting rule is the objective-and-task method.


83. In the domain of advertising, ___________________ means that marketers encourage their affiliates to adopt, or at least consider, advertising ideas that have

proven successful in other markets.

84. “Not-Invented-Here” (NIH) syndrome does not come from local subsidiaries.


85. With export advertising, the creative strategy is highly centralized.


86. With prototype standardization, headquarters spell out guidelines on the positioning themes and brand identity.


87. Shift from TV and print to radio advertising is becoming a big reality.


88. Most firms do not rely heavily on the expertise of an advertising agency.


89. Sponsorship is one of the fastest growing promotion tools.


90. The goal of many MNCs is to avoid an integrated marketing communications approach.


Essay

91. List and discuss the major challenges faced by international advertisers.

92. What situations are conducive to localization of advertising from the viewpoint of the international advertiser?

93. How should marketers cope with advertising regulations?

94. How do you choose an advertising agency overseas?

Chapter 14

Multiple Choice

1. Unlike the United States where customers visit car dealers, a majority of cars are sold

by door-to-door salespeople in _________________.

a. India. b. Pakistan. c. Japan. d. Ireland. e. Mongolia.


2. All of the following are tasks of the average salesperson EXCEPT:

a. take orders. b. deliver products. c. repair products. d. educate consumers. e. provide technical knowledge.


3. The salesperson can best be described as being the ______________ for the company.

a. support mechanism b. front line c. mouthpiece d. promoter e. educator


4. The salesforce management process starts with setting:

a. objectives and strategy. b. objectives and manufacturing. c. objectives and marketing. d. objectives and operations. e. objectives and raw material.


5. When researchers try to put the word international into sales management and

personal selling, clarification is needed. ____________________ considerations include issues that analyze more than one country’s assets, strengths, and situations, or that deal directly with cross-border coordination.

a. International product b. International strategy c. International mix d. Intercultural e. Global society


6. All of the following are examples of international sales strategy issues EXCEPT:

a. sales force skill availability. b. selling style differences. c. country image. d. expatriate recruiting. e. centralized training.


7. Which of the following is an example of an issue that is addressed by intercultural issues with the foreign country?

a. sales force skill availability. b. selling style differences. c. country image. d. expatriate recruiting. e. centralized training.


8. All of the following are examples of intercultural issues with the foreign country EXCEPT:

a. motivation. b. cultural sensitivity. c. ethical standards. d. relationship building. e. home to host communications.


9. Which of the following is an example of an issue faced by international sales strategy?

a. motivation. b. cultural sensitivity.

c. ethical standards. d. relationship building. e. home to host communications.


10. Sales force skill availability, company image, expatriate recruiting, and centralized training are issues relevant to ________________________ considerations.

a. international product b. international sales strategy c. international mix d. intercultural issues with the foreign country e. global society


11. Motivation, cultural sensitivity, ethical standards, fairness, and relationship building are issues relevant to _______________________ considerations.

a. international product b. international sales strategy c. international mix d. intercultural issues with the foreign country e. global society


12. In the sales management “process,” the first step is where the manager:

a. sets objectives and strategy. b. determines goals and purposes. c. recruits. d. trains. e. supervises.


13. A key decision that a marketer must make with respect to international marketing is _______________________. This decision limits and defines key underlying aspects of its future sales force management.

a. which market to enter b. how much to spend in a market c. how to enter the market d. how far should a market be entered

e. how long to stay in a market


14. The _________________ in(into) a market will determine how large the sales force needs to be and will influence how much training it will require.

a. form of marketing b. form of entry c. form of promotion d. form of commission e. form of management


15. How large a sales force needs to be, how much training the sales force will need, whether the sales force is predominately local or foreign, and the manner of compensation are all issues influenced by the __________________ in(into) a market.

a. form of marketing b. form of entry c. form of promotion d. form of commission e. form of management


16. With respect to sales and sales management, the entry method into a market is also called the ____________________________.

a. zone process b. level of migration c. level of expatriation d. level of complexity e. level of integration


17. With respect to sales and sales management entry into a foreign market, _________ integration refers to greater ownership and control of the distribution channel. a. vertical b. horizontal c. forward d. backward e. dual


18. If a company begins its foreign sales by exporting through a merchant distributor who takes title to the product and performs all the necessary foreign sales functions, this would be a form of ________________ integration.

a. vertical b. horizontal c. forward d. backward e. dual


19. If a company begins its foreign sales by exporting through merchant distributors and then purchases a foreign sales subsidiary and locates product warehouses abroad, this would be a form of _____________________ integration.

a. vertical b. horizontal c. forward d. backward e. dual


20. Selling through an Export Management Company (EMC) or an Export Trading Company (ETC) is considered a _____________ involvement approach to international sales.

a. low b. middle c. high d. backward e. parallel


21. _____________________ serves the needs of their clients in entering a market or sourcing goods from a market. They are characterized by their “service” nature and efforts to interact with and meet the needs of the exporter client.

a. A foreign franchise b. An Export Trading Company c. An Export Management Company d. A Noraizi agent

e. A bulk-breaker


22. Which of the following degrees of involvement would probably be in use when Export Management Companies, Export Trading Companies, or direct exporting are being used by the firm?

a. limited foreign involvement and visibility b. local management and sales force c. expatriate management and local sales force (mixed) d. heavy to complete expatriate sales force e. maximum global control and world wide ownership


23. Which of the following degrees of involvement would probably be in use when piggybacking and selling through chains are used by the firm?



24. Many ______________________ use EMCs services mainly to test the international arena.

a. contract manufacturers b. franchisees c. experienced exporters d. inexperienced exporters e. none of the above


25. If the company describes its situation as being concerned with a contract for sales from the U.S., no sales force or representatives abroad, and little or no control over the foreign marketing process, the firm will probably use which form of involvement listed below?



26. If the company uses expatriates to oversee sales regions and lead training, the firm will probably use which form of involvement listed below?



27. _____________________ is usually a large conglomerate that imports, exports, countertrade, invests, and manufactures in the global arena.

a. A foreign franchise b. An Export Trading Company c. An Export Management Company d. A Noraizi agent e. A bulk-breaker


28. Sogoshosha (such as Mitsubishi, Mitsui, Sumitomo, and Marubeni) are the Japanese equivalents of _______________________.

a. a foreign franchise b. an Export Trading Company c. an Export Management Company d. a dealer network e. a bulk-breaker


29. If a company follows a _______________ involvement path, it normally gives up the ability to motivate and monitor the sales force and to train them to better serve the customer.

a. low b. middle c. high d. backward e. parallel


30. When a company has the ____________________ involvement approach, the company (because it uses either host country employees or expatriates) must face the foreign culture and intercultural communication can become an issue that must be dealt with through training.

a. low-level b. mid-level c. high-level d. backward level e. parallel level Difficulty: (2) Knowledge: (A) Page: 426

31. Which of the following forms of company sales involvement generally have the lowest involvement of expatriates?


32. Which of the following forms of company sales involvement generally have the highest involvement of expatriates?


33. When a company has a _________________ involvement approach, the company substantially controls the foreign distribution channels. a. low-level b. mid-level c. high-level d. backward level e. parallel level Difficulty: (1) Knowledge: (F) Page: 426

34. As an example of a company that has the _______________________ involvement approach, the company will generally own warehouses where goods are stored and/or own outlets where products are sold.


35. Which of the following statements MOST accurately describes the state of international selling?

a. At the level of personal selling there is little true international selling. b. International selling is a function of the degree of involvement. c. Because of the global nature of business today, global selling transcends international boundaries. d. International selling will never work. e. International selling is tightly monitored by most governments because of the potential for funds outflow.


36. Which of the following statements MOST accurately describes the state of international selling?

a. Despite growing “international sales,” salespeople typically work only in one region. b. International selling is a function of the degree of involvement. c. Because of the global nature of business today, global selling transcends international boundaries. d. International selling will never work. e. International selling is tightly monitored by most governments because of the potential for funds outflow.


37. Personal selling is predominantly a _________________ activity.

a. psychological b. ethnic c. tribal d. group e. personal


38. A _________________ occurs when we group people (from what might appear to us as very similar cultures) together in perhaps an inappropriate manner because those people consider themselves to be different.

a. cultural assimilation b. cultural harmony c. cultural generalization d. cultural syncopation e. cultural similarity


39. Germans are typically viewed as scientifically exacting and industrious people. However, the typical German manufacturing work week is only thirty hours and the workers jealously guard their free time and show little interest in working overtime. This would be an example of the dangers of ____________________.

a. cultural onomonopea b. cultural adiaphoria c. cultural generalization d. cultural syncopation e. cultural similarity


40. If a marketing manager were to mistakenly group South Koreans and Japanese together (either as a market or by business and labor practices), this would be an example of a _________________ problem.

a. cultural onomonopea b. cultural adiaphoria c. cultural generalization d. cultural syncopation e. cultural similarity


41. The differences between the cultures of companies in two countries are based more on the ingrained cultural values of the ___________________.

a. consumers b. governments c. board of directors d. CEOs e. employees


42. One popular tool for characterizing people that addresses their cognitive styles is the ____________________.

a. Kelsey-Ciebold scale. b. Johns-Hopkins initial perception scale.

c. Majors-Hawkins Cognitive Indicator. d. Myers-Briggs Type Indicator. e. Spaniel test.


43. The ________________ classifies people on four personal dimensions. These are extrovert versus introvert, sensing versus intuitive, thinking versus feeling, and judging versus perceiving.

a. Hartman profile b. Myers-Briggs Type Indicator c. Majors-Hawkins Cognitive Indicator d. Spaniel test for concepts e. Freudian fantasy test


44. According to the Myers-Briggs Type Indicator test, the _____________ tends to rely on the environment for guidance, be action-oriented, sociable, and communicate with ease and frankness.

a. extrovert b. introvert c. sensing person d. intuitive person e. thinking person


45. According to the Myers-Briggs Type Indicator test, the _____________ tends to show a greater concern with concepts and ideas than with external events, relative detachment, and enjoyment of solitude and privacy over companionship.

a. extrovert b. introvert c. sensing person d. intuitive person e. thinking person


46. According to the Myers-Briggs Type Indicator test, the _____________ tends to focus on immediate experience, become more realistic and practical, and develop skills such as acute powers of observation and memory for details.

a. extrovert b. introvert c. sensing person

d. intuitive person e. thinking person


47. According to the Myers-Briggs Type Indicator test, the _____________ tends to value the possibility and meaning more than immediate experience, and become more imaginative, theoretical, abstract, and future oriented. a. extrovert b. introvert c. sensing person d. intuitive person e. thinking person


48. All of the following are steps in the sales force management process EXCEPT:

a. setting sales force objectives. b. designing sales force strategy. c. recruiting and selecting salespeople. d. commission system management. e. supervising salespeople.


49. The first step in the sales force management process is best described as being:

a. designing sales force strategy. b. setting sales force objectives. c. recruiting and selecting salespeople. d. commission system management. e. supervising salespeople.


50. The __________________ states explicitly what the sales force will be asked to do.

a. sales force strategy b. sales force objectives c. sales force training procedures d. sales force recruiting procedures e. sales force evaluation procedures


51. Setting sales force objectives internationally will not only depend on the company goals but will also depend on:

a. the training procedures. b. the recruiting procedures. c. the evaluation procedures. d. an analysis of the culture and the values of the country it is entering. e. management standards for excellence.


52. __________________ addresses the structure, size, and compensation of the sales force.

a. Sales force objectives b. Sales force goals c. Sales force strategy d. Sales force policy e. Sales force vision


53. With respect to sales force structure, the ____________________ sales force has each salesperson responsible for a particular area (reporting up the line to regional sales managers).

a. territorial b. product c. customer d. matrix e. “open plan”


54. With respect to sales force structure, the ______________________ sales force has each salesperson sell only one product or product line (even when selling to a single customer).

a. territorial b. product c. customer d. matrix e. “open plan”


55. With respect to the functions of sales force strategy, the ______________ refers to and determines the physical positioning and responsibilities of each salesperson.

a. size b. structure

c. compensation procedure d. modeling procedure e. evaluation procedure


56. In order to ensure a globally consistent sales strategy, a company will likely: a. conduct sales training on a country-by-country basis. b. train the sales managers in the headquarters country and send them abroad. c. bring all employees to the headquarters country for training, then send them to their home markets. d. hire professional sales trainers to travel abroad to train employees. e. none of the above

Difficulty: (2) Knowledge: (a) Page: 436

57. Difficulties in setting compensation packages for global salesforces include: a. unions may restrict wage options. b. some cultures are not motivated to work harder regardless of monetary incentives. c. local firms may protest that the MNC is stealing the best talent with wages out of line with local standards. d. culture may dictate that people of the same rank should not be compensated differently regardless of performance. e. all of the above


58. Ethics for international sales reps: a. are the same regardless of country. b. can be taught and are no longer a problem once training has taken place. c. don’t matter—reps should do what the home culture expects. d. demand clear corporate policies to help reps avoid problems. e. should be ignored until a complaint is made, then the guilty should be punished.


59. Evaluations of sales performance should be ________. a. cumulative b. exhaustive c. quantitative d. qualitative e. both C and D


60. ____________________ the sales force means directing and motivating the sales force to fulfill the company’s objectives and providing the resources to allow them to do so.

a. Recruiting b. Training c. Evaluating d. Supervising e. Compensating


61. With respect to rewarding salespeople, _________________ reinforces the negative image of the salesperson benefiting from the sale, with no regard for the purchaser’s well-being.

a. the salary system b. the commission system c. the motivation system d. the retainer system e. the hourly wage system


62. With respect to evaluating salespeople, _________________ evaluations can be in the form of comparisons of sales, of sales percents, or increases in sales.

a. parametric b. qualitative c. quantitative d. nonparametric e. decisional


63. Stages of the negotiation process include the following EXCEPT:

a. non-task sounding. b. task-related information exchange. c. foreign travel. d. persuasion. e. concessions and agreements.


64. In international marketing, negotiation strategies include the following EXCEPT:

a. employ an outsourcing consultant. b. employ an agent or advisor. c. involve a mediator. d. induce the counterpart to follow one’s own negotiation script.

e. Adapt the counterpart’s negotiation script.


65. ___________________ are home country personnel sent overseas to manage local operations in the foreign market.

a. Managers b. International personnel c. Group managers d. Expatriates e. Foreign managers


66. All of the following are advantages that expatriates have over foreign nationals as managers of MNCs, EXCEPT:

a. more intelligence. b. better communication. c. better understanding of office politics. d. develops better future managers. e. better relationships with the home office.


67. All of the following are disadvantages of using expatriates over foreign nationals as managers, EXCEPT:

a. cross-cultural training. b. motivation. c. honesty. d. compensation. e. family discord.


68. The general trend among U.S. multinationals has been a decreasing use of ______________ managers overseas and an increasing reliance on ____________ foreign talent since the 1990s.

a. global, local b. international, local c. European, local d. expatriate, local e. Asian, local


69. The single most compelling reason that most expatriates return home early from their tour of duty abroad is:

a. motivation. b. salary. c. health. d. fear of the foreign environment. e. family discord.


70. Expatica’s Relocation Services’ 2008 survey provided the following recommendations regarding reducing attrition rates EXCEPT:

a. membership in top private business clubs. b. chances to use international experience. c. a choice of positions upon return. d. recognition. e. repatriation career support.



71. Unlike the United States, the majority of cars sold in Japan are sold door-to-door.


72. The salesperson is not the front line for the company.


73. Sales people do not sell services.


74. When considering international sales management issues, ________________ considerations are issues that analyze more than one country’s assets, strengths, and situations, or that deal directly with cross-border coordination.

75. Sales force skill availability, country image, and expatriate recruiting are all issues that are relevant as intercultural issues with the foreign country.


76. Motivation, cultural sensitivity, ethical standards, and fairness are all issues that are relevant as intercultural issues with the foreign country.


77. The question of how to enter the market is central to marketing.


78. Backward integration refers to greater ownership and control of the distribution channel.


79. If a firm has limited foreign involvement and visibility, a correct choice for them to use in entering a foreign country would be to develop an expatriate sales force.


80. If a firm has limited foreign involvement and visibility, a correct choice for them to use in entering a foreign country would be to enter into an arrangement with an Export Management Company.


81. The term sogoshosha in Japan describes an Export Trading Company.

Difficulty: (2) Knowledge: (A) Page: Page: 425

82. Personal selling is predominantly a group activity.


83. At the level of personal selling there is little true international selling.

84. Equating Korean and Japanese consumers and business practices to be the same just because they are in geographic proximity to one another would be a mistake often made because of _______________________.

85. Myers-Briggs-Type Indicator (MBTI) is a tool for addressing people’s cognitive styles.


86. One of the dimensions of Myers-Briggs-Type Indicator (MBTI) include ethnocentric behavior:


87. The first step in the process of sales force management starts with recruiting and selecting salespeople.


88. The size of the salesforce depends on the sales structure.

89. In the negotiation process, nontask soundings do not include activities that are used to establish a rapport among the parties involved.

90. ______________ are home country personnel sent overseas to manage local operations in the foreign market.

91. Negotiations practices do not vary enormously across cultures.


92. Expatriate involvement in international sales has been on the rise since the 1990s.


93. Once the expatriate is overseas, training becomes more difficult.


94. Cross-cultural training is on the decline in recent years.


95. Repatriation is the return of the expatriate employee from overseas.


96. Expatriates do not face a long list of difficulties upon returning home.


Essay

97. It has been said that selling is the world over. However, there are differences between the way that domestic and international selling efforts occur and are managed. Comment on these differences.

98. Considering various types of entry formats into the international arena, under what circumstances might it be advisable for the company to attempt a traveling global salesforce?

99. Considering the four major categories of the Myers-Briggs Type Indicator, which of the categories (or combination of categories) best describes you? Explain why.

100. Not all United States sales methods or systems can automatically be exported abroad. Considering the information provided by research on different cultural dimensions, why might it be difficult to adopt a U.S.-style commission system for salespeople in such countries as Japan or Mexico. Be sure to remember how these two countries might rank on the five cultural dimension scales.

101. Why do most firms still consider expatriates to be a valuable extension of their company? What are the advantages and disadvantages of using expatriates?

Chapter 15

Multiple Choice

1. In global logistics and distribution, Coca-Cola’s success relies largely on its global distribution arm, ______________________, the world’s largest bottler group.

a. Coca-Cola Enterprises b. Coca-Cola Network c. Coca-Cola Web d. Coca-Cola Team e. Coca-Cola Trucking Co.


2. According to the textbook, which of the following famous business thinkers characterized logistics as being “the darkest continent of business?”

a. Philip Kotler. b. Stephen Covey. c. Michael E. Porter. d. Peter Drucker. e. Tom Peters.


3. As firms start operating on a global basis, ___________________ need to manage the shipping of raw materials, components, and supplies among various manufacturing sites at the most economical and reliable rates.

a. human resource managers b. logistics managers c. operations managers d. outsourcing managers e. information technology managers


4. In 2011, the total logistics cost represented about 8.5 percent of the GDP, or $1 trillion in the _________________.

a. U.S. b. Ireland c. Portugal d. Belgium e. Romania


5. In 2012, in the U.S., the total logistics cost was ______ percent of the U.S. GDP.

a. 1 b. 3 c. 5.5 d. 8.5 e. 10.5

Difficulty: (2 Knowledge: (F) Page: 452

6. __________________ transportation refers to the seamless transfer of goods from one mode of transportation (such as an aircraft) to another (such as a ship) and vice versa without the hassle of unpacking and repackaging of goods to suit the dimensions of the mode of transportation being used.

a. Bi-polar b. Bi-modal c. Intercontinental d. Dual-basic e. Intermodal


7. __________________ refers to the means of keeping continuous tabs on the exact location of the goods being shipped in the logistics chain.

a. Data processing b. Messaging service c. Tracking technology d. Computerized messaging e. Hybrid technology


8. With electronic tracking technology, shippers are able to quickly react to any disruption in the shipments because the shipper knows where exactly the goods are in real time and:

a. labor can be adjusted accordingly. b. the alternative means can be quickly mobilized should problems develop. c. costs can always be evaluated. d. losses are rare. e. customer service is now at a premium.


9. ________________ is defined as the design and management of a system that directs and controls the flows of materials into, through and out of the firm across national boundaries to achieve its corporate objectives at a minimum total cost.

a. Global goods flow b. Global distribution c. Global logistics d. Global wholesaling e. Global shipping


10. Global logistics encompasses:

a. advertising and personal selling. b. purchasing and manufacturing. c. materials management and trucking. d. materials management and physical distribution. e. pricing and manufacturing.


11. ___________________ refers to the inflow of raw materials, parts, and supplies in and through the firm.

a. Global logistics b. Physical distribution c. Materials management

d. Purchasing processes e. Global distribution


12. The global logistics process begins with which of the following?

a. materials management b. processing and assembly c. physical distribution d. raw materials, components, and supplies e. finished products ready for shipment


13. When raw materials, components, and supplies are converted or manipulated for processing and assembly by the firm, the process is monitored and controlled by the ________________________ function of the firm.

a. physical distribution b. purchasing c. intermodal transportation d. materials handling e. materials management


14. _______________________ refers to the movement of the firm’s finished products to its customers, consisting of transportation, warehousing, inventory, customer service/order entry, and admission.

a. Physical distribution b. Purchasing c. Intermodal transportation d. Global logistics e. Materials management


15. All of the following are activities that occur during physical distribution EXCEPT:

a. transportation. b. warehousing. c. inventory. d. order entry. e. promotion and advertising.


16. With respect to distribution costs, a geographically large country such as the United States will normally incur more ______________________ costs than in smaller countries.

a. transportation, insurance, and inventory b. warehousing, customer service/order entry, and general administration c. transportation and inventory d. materials handling e. warehousing and transportation


17. Which of the following factors contribute significantly to the increased complexity and cost of global logistics as compared to domestic logistics?

a. domestic intermediaries b. service c. purchasing d. exchange rate fluctuation e. materials handling


18. All of the following factors contributed significantly to the increased complexity and cost of global logistics as compared to domestic logistics EXCEPT:

a. exchange rate fluctuation. b. distance. c. domestic intermediaries. d. foreign intermediaries. e. negotiations with government officials and distributors.


19. Recently the U.S. dollar depreciated while the Japanese yen soared in value. Honda found that it was much cheaper to ship its Accord models to Europe from its Ohio plant than from Japan. This could most accurately be classed as a move made because of problems or opportunities with:

a. distance. b. logistics. c. exchange rate fluctuations. d. foreign intermediaries. e. domestic intermediaries.


20. The bulk of international trade is handled by ________________________. a. ocean shipping b. air transport c. trucking services d. railroads e. inland waterways


21. The most important factors in determining an optimal mode of transportation for foreign markets are the value-to-volume ratio, perishability of the product, and:

a. the cost of transportation. b. intermodal ratio. c. total cost ratio to inventory and warehousing expense. d. the cost of insurance. e. the distance to speed relationship.


22. All of the following are important factors in determining an optimal mode of transportation to be used in foreign markets EXCEPT: a. the cost of transportation. b. the value-to-volume ratio. c. the perishability of the product. d. obsolescence along the product life cycle. e. the cost of insurance.

Difficulty: (3) Knowledge: (F) Pages: 456

23. The _________________ is determined by how much value is added to the materials used in the product.

a. perishability of the product b. cost of transportation c. the cost of insurance d. the value-to-volume ratio e. the intermodal ratio


24. The ________________ of the product refers to the quality degradation over time and/or product obsolescence along the product life cycle.

a. perishability b. cost of transportation

c. cost of insurance d. value-to-volume ratio e. intermodal ratio


25. All of the following are viable options for shipping products internationally on a global basis (anywhere in the world) EXCEPT:

a. ocean shipping. b. air freight. c. cargo liner service. d. truck. e. intermodal transportation.


26. The primary forms of ocean shipping include all of the following EXCEPT:

a. liner service. b. bulk shipping. c. tanker shipping. d. irregular runs. e. FedEx surface.


27. If a product were to be categorized as being heavy, bulky, and nonperishable, probably the best form of global shipping would be:

a. ocean shipping. b. air freight. c. truck. d. rail. e. barge.


28. If a company wished to ship semiconductor chips abroad, they would probably choose:

a. ocean shipping. b. air freight. c. truck. d. rail. e. barge.


29. Research has shown that if Nike or Reebok were to be transporting their footwear

from plants in Asia to the United States, they would probably choose which of the following transportation modes?

a. ocean shipping b. air freight c. truck d. rail e. barge


30. The traditional logistics strategy involves ____________________ based on forecasting and inventory speculation.

a. supply and demand b. anticipatory demand management c. inventory volume equations d. purchasing ratios e. microeconomic principles


31. Information technology, electronic data interchange, and intermodal transportation have made ____________________ a reality in physical distribution.

a. low cost transportation b. a “no returns” policy c. ultimate distribution service d. just-in-time delivery e. accurate purchasing management


32. Multinational corporations can use ________________ as a strategic tool in dealing with currency fluctuations and as a hedge against inflation.

a. buying power b. just-in-time management c. just-in-time delivery d. purchasing management e. inventory


33. By increasing ___________________ before imminent depreciation of a currency instead of holding cash, the firm may reduce its exposure to currency depreciation losses.

a. buying power

b. plant and equipment c. trucks d. materials handling equipment (such as forklifts) e. inventory


34. ___________ inventories also provide a hedge against inflation because the value of the goods/parts held in inventory remains the same compared to the buying power of local currency.

a. High-tech b. Low-tech c. High d. Low e. None of the above


35. __________________ refers to coordinating production and distribution across geographic boundaries.

a. Rationalization b. Utility management c. Physical distribution management d. Logistic integration e. Logistic modeling


36. _________________ means reducing resources to achieve more efficient and cost-effective operations.

a. Rationalization b. Utility management c. Physical distribution management d. Logistic integration e. Logistic modeling


37. Another profound change in the last decade is the proliferation of _______________.

a. IT warehouses b. e-commerce c. information technology d. global shipping traffic

e. global air traffic


38. 3PL stands for:

a. third-party logistics. b. third-power logistics. c. third-peer logistics. d. third-production logistics.

e. none of the above.


39. The largest third-party logistics sector is the value-added ________________ and _________________ industry.

a. warehousing, purchasing b. warehousing, manufacturing c. warehousing, distribution d. warehousing, painting e. none of the above


40. The trend toward third-party logistics is a result of the _____________ and the _____________.

a. Internet, enterprise resource planning b. Internet, technology simulations c. Internet, customer relationship management d. Internet, Intranet e. none of the above


41. The Internet and Intranet facilitate __________________________.

a. parallel delivery. b. cheap delivery. c. expensive delivery. d. forward-time delivery. e. on-time delivery.


42. _________________ influences decisions regarding what activities and technologies a company should concentrate its investment and managerial resources in (in relation to its competitors in the industry). a. Relative advantage

b. Absolute cost advantage c. Comparative advantage d. Competitive advantage e. Sourcing advantage


43. __________________ affects the company’s decision about where to source and market, based on lower cost of labor and other resources in one country relative to another.

a. Relative advantage b. Absolute cost advantage c. Comparative advantage d. Competitive advantage e. Sourcing advantage


44. Some distribution companies even find that the best way to be successful is to create a distribution ________________.

a. alliances b. mergers c. acquisitions d. consortia e. joint ventures


45. Sourcing strategy includes two basic choices. One of these is intra-firm sourcing and the other is __________________.

a. importing b. outsourcing c. in-sourcing d. matrix manipulation e. horizontal integration


46. As a type of intra-firm sourcing, _____________________ is when a company procures major components in-house by producing them domestically.

a. domestic in-house sourcing b. offshore subsidiary sourcing c. domestic purchasing arrangement d. offshore outsourcing (offshore sourcing) e. export management company


47. As a type of intra-firm sourcing, _____________________ is when a company procures major components from its foreign subsidiary.

a. domestic in-house sourcing b. offshore subsidiary sourcing c. domestic purchasing arrangement d. offshore outsourcing (offshore sourcing) e. export management company


48. As a type of outsourcing, _____________________ is when a company buys major components from independent suppliers at home.

a. domestic in-house sourcing b. offshore subsidiary sourcing c. a domestic purchasing arrangement d. offshore outsourcing (offshore sourcing) e. export management company


49. As a type of outsourcing, _____________________ is when a company buys major components from independent suppliers overseas.

a. domestic in-house sourcing b. offshore subsidiary sourcing c. a domestic purchasing arrangement d. offshore outsourcing (offshore sourcing) e. export management company


50. Covisint is probably the largest global online ________ procurement system.

a. C2B b. B2B c. B2G d. C2C e. B2C

Difficulty: (2) Knowledge: (F) Page: 466-67

51. Typical B2B procurement systems rely on _______________ that emphasize the lowest bids on a global basis.

a. promotions

b. selling c. manufacturing d. auctions e. production


52. Companies that outsource to the extent that they adopt a “designer role” in global competition (i.e., offer innovations in product design without investing in manufacturing process technology) have been described by some as being:

a. vertical corporations. b. horizontal corporations. c. hollow corporations. d. supply and demand corporations. e. monopoly manufacturers.


53. A __________________ is an area that is located within a nation, but is considered outside of the customs territory of the nation.

a. border zone b. red zone district c. warehouse district d. dock facility e. free trade zone


54. In the United States, a free trade zone is officially called a __________________.

a. Maquiladora operation b. border zone c. red zone district d. Foreign Trade Zone e. Channel Zone


55. All of the following are benefits of using a free trade zone EXCEPT:

a. duty deferral and elimination. b. lower tariff rates. c. no government interference in intelligence gathering activities. d. exchange rate hedging. e. “Made in U.S.A.” designation.


56. Duty deferral and elimination, lower tariff rates, exchange rate hedging, and a “Made in U.S.A.” designation are all benefits of using a __________________.

a. Maquiladora operation b. border zone c. red zone district d. Foreign Trade Zone e. Channel Zone


57. At the macro-level, benefits of using a free trade zone include all of the following EXCEPT:

a. increased investment and employment. b. more revenue through increased local taxes. c. obtaining a beachhead in a foreign market without being in the mainstream distribution process. d. the ability to reassemble large shipments into different groupings. e. no duties on labor.


58. Japan has established trade zones to increase __________________.

a. maquiladora operations b. assembly operations c. imports d. exports e. none of the above


59. Various governments have established ____________________________.

a. export processing circles. b. export processing groups. c. export processing clans. d. export processing networks. e. export processing zones.


60. _________________________ usually provide tax- and duty-free treatment of production facilities whose output is meant to be exported.

a. Gray products processing zones b. High-tech processing zones c. Maquiladora processing zones

d. Export processing zones e. Import processing zones


61. To show the increasing power of retailers in today’s business world, the traditional supply chain that was once powered by the manufacturer has been turned around. Distribution today is characterized as being ____________ in nature. a. push b. pull c. vertical shove d. horizontal slant e. parallelism


62. Which of the following should a company NOT do with a channel partner? a. seek companies with good contacts b. treat companies as short-term partners c. withhold information from the distribution partner d. allow the distribution partner to make marketing strategy decisions e. all of the above


63. If a retail firm sells a product under its own store name it is called a:

a. unique brand. b. vertical brand. c. horizontal brand. d. store brand or private label. e. hybrid label.


64. When Heinz sells its soup products to grocery store chains and allows them to put their own store names on the product, the product is being sold as a:

a. domestic brand. b. national brand. c. manufacturers brand. d. store brand or private label. e. service label.


65. In which of the following countries are store brands marginal players because of

loyalty to national or manufacturer brands?

a. United States. b. United Kingdom. c. Japan. d. France. e. Canada.


66. All of the following are factors that have explained the success of private labels in recent years EXCEPT:

a. better packaging decoration. b. improved quality of private-label products. c. development of premium private-label brands. d. expansion into new product categories. e. internationalization of retail chains.


67. As a branding strategy, _______________ is especially attractive to MNCs that face well-entrenched incumbent brands in the markets they plan to enter. (This overcomes the problem of shelf-space denial.)

a. domestic branding b. national branding c. manufacturers branding d. store branding or private labeling e. service labeling


68. The traditional supply chain powered by manufacturer push is becoming a:

a. demand chain driven by logistics. b. demand chain driven by advertising. c. service chain driven by customer service. d. service chain driven by response time. e. demand chain driven by customer pull.


69. With respect to strategies available to the business unit, a ____________ strategy appears to be more effective than a __________ strategy in emerging markets.

a. service/product b. product/service c. push/pull d. pull/push

e. pull/parallel


70. On-time retail information management carries two distinct advantages which are:

a. reduced inventory and accounting information at the retail level. b. reduced inventory and market information at the retail level. c. reduced inventory and manufacturing information at the retail level. d. reduced inventory and production information at the retail level. e. reduced inventory and outsourcing information at the retail level.


71. Industrialized countries tend to have a lower distribution outlet density than the _______________________.

a. regional markets b. global markets c. world markets d. submerging markets e. emerging markets


72. The Large Scale Retail Store Law (LSRSL) in _______________ helped to protect small retail stores.

a. Singapore b. Pakistan c. Indonesia d. Japan e. South Korea


73. In _________________, store hours are limited and stores do not open on Sundays.

a. Germanyb. USA

c. Mexico d. Brazil e. UK


74. _______________ is the fastest growing Internet market in Asia.

a. China b. India

c. Indonesia d. Hong Kong e. South Korea


75. The Mexican version of the free trade zone is called the _________________.

a. Maquiladora operation or industry b. border zone c. red zone district d. Foreign Trade Zone e. Channel Zone


76. In Mexico another name for the Maquiladora operation or industry is the:

a. in-bond or twin-plant program. b. bonded warehouse. c. border zone. d. cross border zone. e. indentured zone.


77. In Mexico, the free trade zone program (also called the in-bond or twin-plant program) is called the _____________________________.

a. Maquiladora operation or industry b. border zone c. red zone district d. Foreign Trade Zone e. Channel Zone


78. Mexico allows duty-free imports of machinery and equipment for manufacturing as well as components for further processing and assembly, as long as at least 80 percent of the plant’s output is exported. This is called a _______________ industry.

a. moonlighting b. cross border c. gray market d. TRW e. Maquiladora


79. Mexico’s border industrialization program was developed in __________.

a. 1945 b. 1955 c. 1965 d. 1975 e. 1985


80. Mexico permits _______ percent foreign ownership of the maquiladora plants in the designated maquiladora zone.

a. 25 b. 50 c. 75 d. 90 e. 100


81. Mexico is an attractive location for ____________ intensive assembly.

a. capital b. labor c. technology d. repair e. service



82. When Peter Drucker described logistics as “the darkest continent of business” he probably meant it is was ________________________.

83. In 2008, in the United States, total logistical cost is estimated to be about 20 percent of the country’s GDP.

84. Global logistics encompasses materials management only.


85. _________________ transportation refers to the seamless transfer of goods from one

mode of transport to another and vice versa without the hassle of unpacking and repackaging.

86. Materials management does not include the inflow of raw material, parts, and supplies through the firm.


87. ________________ is defined as the design and management of a system that directs and controls the flows of materials into, through and out of the firm across national boundaries to achieve its corporate objectives at a minimum total cost.

88. Global logistics, unlike domestic logistics, does not put emphasis on physical distribution.


89. ___________________ refers to the inflow of raw materials, parts, and supplies in and through the firm.

90. ___________________ refers to the movement of the firm’s finished products to its customers, consisting of transportation, warehousing, inventory, customer service/order entry, and administration.

91. Materials management refers to the movement of the firm’s finished products to its customers, consisting of transportation, warehousing, inventory, customer service/order entry, and administration.

92. Physical distribution refers to the inflow of raw materials, parts, and supplies in and through the firm.

93. The bulk of international trade is handled by airlines.

94. The inventory-to-volume ratio is determined by how much value is added to materials used in the product.

95. Air freight represents more than 40 percent of the value of goods shipped in international commerce.

96. Ocean shipping is used extensively for the transport of heavy perishable cargoes.

97. In intermodal transportation, only one type of transportation is employed.

98. Rationalization means reducing resources to achieve more efficient and cost-effective operations.


99. ____________________ refers to coordinating production and distribution across geographic boundaries.

100. In global logistics and distribution, 3PL stands for:

101. A ___________________ is an area that is located within a nation, but is considered outside of the customs territory of the nation.

102. The Mexican version of a free trade zone is called the ___________________.

103. Wal-Mart is the largest retailer in the world.

104. LSRSL stands for:

105. In China, basket shopping is still considered the norm for most consumers.


106. An agent intermediary takes title to goods.


107. A merchant intermediary does not take title to goods.


108. In Japan, private brands are very popular.


Essay

109. Explain what the terms global logistics, materials management, and physical distribution mean. Describe the various operations and procedures encompassed by these terms.

110. The global logistics manager must understand the specific properties of the different modes of transportation in order to use them optimally. What are the most important factors in determining an optimal mode of transportation? List and briefly describe each of the factors.

111. Explain the role that so called “third-party logistics” (3PL) companies play in contemporary international trade. Cite the advantages of using third-party companies in the trade process.

112. Explain the role of the free trade zone in modern trade. Explain the free trade zone’s relationship and benefit to global logistics.

113. In which parts of the world are private labels popular? Why? What factors might explain this?

114. Explain the concept and function of the Maquiladora operation or industry in Mexico.

Chapter 16

Multiple Choice

1. ___________________ is the most popular way for many companies to become international.

a. Exporting b. Importing c. Licensing d. Contract manufacturing e. None of the above


2. _______________ is usually the first entry mode of entry used by many companies.

a. Exporting b. Importing c. Licensing d. Contract manufacturing e. None of the above


3. In 2011, an estimated _______________ American jobs depended on international trade and export expansion.

a. 1 million b. 8 million c. 10 million d. 15 million e. 20 million


4. In 2011, exports represented about __________ percent of the U.S. GDP.

a. 5 percent b. 8 percent c. 9 percent d. 10 percent e. 14 percent


5. For a firm beginning exports for the first time, the first step is to use available ___________________.

a. primary data b. secondary data c. tertiary data d. Internet data e. intranet data


6. As an aid to expanding information about world trade, increasingly, international marketing information is available in the form of ____________________.

a. CD-ROMs b. electronic encyclopedias c. electronic databases d. CIA reports

e. government intelligence reports


7. Which of the following countries is the largest participant in database growth?

a. United Kingdom b. Germany c. Japan d. France e. United States


8. Approximately how many databases (that can be used to help with international trade) are available online in the world?

a. 1,000 b. 3,000 c. 4,000 d. 5,000 e. 6,000


9. Conducting export research on China and Russia would best be done by:

a. doing database research. b. doing on-line searches. c. doing field work. d. using existing government facts and figures. e. using data supplied by trade missions.


10. The identification of an appropriate overseas market and an appropriate segment involves grouping by all of the following criteria EXCEPT:

a. socioeconomic characteristics. b. political and legal characteristics. c. consumer variables. d. service variables. e. financial conditions.


11. When attempting to identify an appropriate overseas market and an appropriate segment, socioeconomic variables should be considered. All of the following are socioeconomic variables that should be considered EXCEPT:

a. demographics. b. economic. c. geographic. d. econometrics. e. climatic characteristics.


12. When attempting to identify an appropriate overseas market and an appropriate segment, consumer variables should be considered. All of the following are consumer variables that should be considered EXCEPT:

a. service quality. b. purchase frequency. c. lifestyle. d. preferences. e. purchase behavior.


13. To get an idea of market segments in a foreign country, the marketer can first group regions within countries across the world by macroeconomic variables. An illustration of one of these macroeconomic variables would be:

a. level of industrial development. b. purchase preferences. c. services sought. d. lifestyles. e. purchase frequency.


14. Data for grouping along macroeconomic criteria are available from international agencies such as:

a. the International Court of Justice b. the World Court. c. the World Bank. d. the National Geographic Society. e. the World Economic Council.


15. The easiest product to sell abroad with respect to logistics is a(n) _____________ product.

a. differentiated b. semi-standardized c. clustered d. gray market

e. standardized


16. _________________ exporting involves the use of independent U.S. middlemen to market the firm’s products overseas.

a. Direct b. Indirect c. Parallel d. Synchronized e. Dual


17. When independent U.S. middlemen market a firm’s goods in an overseas market, they are called ______________________. They market through their own network of foreign distributors and their own sales force.

a. exporters b. export specialists c. export representatives d. distribution specialists e. parallel exporters


18. The CEM stands for:

a. cash export manager. b. customs export manager. c. charismatic export manager. d. combination export manager. e. collective export manager.


19. The _________________ acts as the export department to a small exporter or a large producer with small overseas sales.

a. combination export manager (CEM) b. export merchant c. export commission house d. piggyback exporter e. trading company


20. The Japanese trading companies are known as:

a. keiretsus b. chaebols c. sogonets d. sogoshoshas e. akimonos


21. In order to expand their exporting activities, many Japanese firms rely on giant general trading companies known as _________________________.

a. keiretsus b. chaebols c. sogonets d. sogoshoshas e. akimonos


22. All of the following are common types of export representatives in the United States EXCEPT:

a. combination export manager (CEM). b. export merchant. c. export commission house. d. export consortium. e. the trading company.


23. The _________________ buys and sells on their own accounts and assumes all the responsibilities of exporting a product. Manufacturers do not control sales activities.

a. combination export manager (CEM) b. export merchant c. export commission house d. piggyback exporter e. trading company


24. The _____________________ is someone who brings together an overseas buyer and a U.S. manufacturer for the purpose of an export sale and earns a commission for establishing a contact that results in a sale.

a. combination export manager (CEM) b. export broker

c. export commission house d. piggyback exporter e. trading company


25. A(n) ____________________ places orders on behalf of its foreign clients with U.S. manufacturers and acts as a finder for its client to get the best buy.

a. combination export manager (CEM) b. export broker c. export commission house d. piggyback exporter e. trading company


26. ___________________ are large, foreign organizations engaged in exporting and importing. They buy on their own account and export the goods to their home country.

a. Combination export manager (CEM) b. Export broker c. Export commission house d. Piggyback exporter e. Trading companies


27. A(n) ___________________ refers to the practice where U.S. firms that have an established export department assume, under a cooperative agreement, the responsibility of exporting the products of other U.S. companies.

a. combination export manager (CEM) b. export broker c. export commission house d. piggyback exporter e. trading company


28. Which of the following is an example of a large trading company?

a. IBM. b. General Motors. c. Mitsui. d. Volvo. e. Wal-Mart.


29. _________________ exporting occurs when a manufacturer or exporter sells directly to an importer or buyer located in a foreign market.

a. Direct b. Indirect c. Parallel d. Synchronized e. Dual


30. With respect to direct exporting, the primary difference between a foreign sales subsidiary and a foreign sales branch is that the foreign sales branch:

a. is larger. b. is smaller. c. is not a separate legal entity. d. uses home country managers. e. does not pay taxes.


31. The following characteristics (high set-up costs, higher credit risks, and higher customer loyalty) apply to which of the following forms of exporting?

a. direct b. indirect c. parallel d. synchronized e. dual


32. In the U.S., ______________________ allows exporters to file export information at no cost over the Internet.

a. Auxiliary Export System b. Amended Export System c. Automated Export System d. Alliance Export System e. none of the above


33. All exports from the United States (except to Canada and U.S. territories) require a(n) _____________________.

a. letter of credit. b. letter of ownership. c. letter for transportation permission. d. export license. e. social security number.


34. The second pillar of the export transaction is the logistics of the export transaction. Included in this transaction are all of the following EXCEPT:

a. a bill of lading. b. the terms of sale. c. the payment. d. a dispute mechanism. e. monitoring of the shipment and delivery of the goods.


35. A(n) _________________________ is a contract between the exporter and the shipper indicating that the shipper has accepted responsibility for the goods and will provide transportation in return for payment.

a. bill of disclosure b. term of sale c. payment statement d. transportation invoice e. bill of lading


36. A(n) _______________________ is a bill for the goods stating basic information about the transaction, including a description of the merchandise, total cost of the goods sold, addresses of the buyer and seller, and delivery and payment.

a. bill of disclosure b. term of sale c. payment statement d. commercial invoice e. bill of lading


37. When the exporter quotes a price for the goods, including charges for delivery of the goods alongside a vessel at a port (the seller covers all costs of unloading and wharfage at the shipment port and the buyer covers all other charges to get the goods to the buyer), this form of terms of shipment is called:

a. ex-works. b. free alongside ship (FAS). c. free on board (FOB). d. cost and freight (CFR). e. Cost, Insurance, and Freight (CIF).


38. INCOTERMS 2000 which went into effect from January 1, 2000 and is an acronym for ____________________________, are the internationally accepted standard definitions for the terms of sale by the International Chamber of Commerce.

a. Industrial Commercial Terms b. Insurance Commercial Terms c. Irrevocable Commercial Terms d. International Commercial Terms e. none of the above


39. When the exporter quotes a price for the goods, including charges for delivery of the goods alongside a vessel at a port (the seller covers all costs of unloading and wharfage plus loading the goods on the vessel and the buyer covers all other charges to get the goods to the buyer), this form of terms of shipment is called:

a. ex-works. b. free alongside ship (FAS). c. free on board (FOB). d. cost and freight (CFR). e. Cost, Insurance, and Freight (CIF).


40. All of the following are possible payment terms for goods exported to another nation EXCEPT:

a. advance payment b. third party draft. c. confirmed irrevocable letter of credit. d. unconfirmed irrevocable letter of credit e. open account


41. A(n) __________________ is a payment form where a shipment is held by the importer until the merchandise has been sold, at which time payment is made to the exporter.

a. cash with order b. confirmed irrevocable letter of credit c. sight draft d. time draft e. consignment


42. A(n) _______________________ is a payment form where a cash payment occurs when the order is placed.

a. cash with order b. confirmed irrevocable letter of credit c. sight draft d. time draft e. consignment


43. A(n) ________________________ is a payment form where a draft is so drawn as to be payable on presentation to the drawee (usually the buyer).

a. cash with order b. third party draft c. confirmed irrevocable letter of credit d. sight draft e. time draft


44. The terms of payment between the exporter and importer are a matter of negotiation and depend on a variety of factors. All of the following might be on that list of factors EXCEPT:

a. the buyer’s credit standing. b. the seller’s reputation. c. the amount of the sale transaction. d. the risks associated with the type of merchandise to be shipped. e. the usual practice in the trade.


45. _______________ risk is the risk that the importer will not pay or fail to pay on the agreed terms.

a. Credit b. Exchange c. Transfer d. Importer e. Exporter


46. ___________________ risk exists when the sale is in the importer’s currency and that currency depreciates in terms of the dollar, leaving the exporter with a lesser number of dollars.

a. Foreign credit b. Foreign exchange c. Foreign transfer d. Foreign payment e. Foreign delivery


47. ___________________ risk refers to the chances that payment will not be made due to the importer’s inability to obtain U.S. dollars and transfer them to the exporter.

a. Credit b. Exchange c. Transfer d. Importer e. Exporter


48. A confirmed irrevocable letter of credit is issued by the ____________ bank and confirmed by a bank usually in the ____________ country.

a. importer’s, exporter’s b. exporter’s, importer’s c. investment, exporter’s d. government’s, exporter’s e. none of the above


49. A shipment that is held by the importer until the merchandise has been sold is called:

a. advance payment. b. confirmed irrevocable letter of credit. c. unconfirmed irrevocable letter of credit. d. open account. e. consignment.


50. The Japan External Trade Organization (JETRO) which helps foreign businesses to export to Japan is affiliated with Japan’s _____________________________.

a. Ministry of Business, Trade, and Industry b. Ministry of Economy, Trade, and Industry c. Ministry of Economy, Trade, and Technology d. Ministry of Economy, Trade, and Logistics e. Ministry of Economy, Trade, and Agriculture


51. The Ex-Im Bank is described as being a:

a. bank that lends exclusively to importers. b. new name for the old “World Bank.” c. federally supported bank whose mission is to thwart communism by making loans to anti-communist nations and exporters. d. federally supported bank whose mission is to support exporters with necessary credit.

e. bank which is not in existence yet. The concept still awaits Congressional approval.


52. The main emphasis of the Ex-Im Bank’s lending practices today is in the area of:

a. loans to Japan. b. loans to Taiwan. c. loans to Mexico. d. loans for prior bankrupt countries. e. project finance (such as infrastructure projects---roads, dams, etc.).


53. Ex-Im Bank is not an aid or development agency, but a_____________________ corporation.

a. state b. domestic c. regional d. private

e. government


54. Ex-Im Bank has two major programs in place which include:

a. Project Finance Division and Working Capital Program. b. Project Finance Division and Working Capital Business Program. c. Project Finance Division and Working Capital Export Program. d. Project Finance Division and Working Capital Guarantee Program. e. Project Finance Division and Working Capital Infrastructure Program.


55. One of the biggest advantages the United States has in importing is that U.S. companies can:

a. order unlimited amounts of goods. b. always sell what they order abroad. c. be assured that the government will support their trade efforts. d. pay in U.S. dollars--a currency accepted everywhere. e. always turn a profit with the goods they buy because of market demand.


56. Since most world trade is done in dollars, the U.S. importer does not usually need to _____________ foreign exchange transactions.

a. capitalize b. hedge c. capitate d. survey e. monitor


57. All of the following are activities that an importer would normally go through in order to complete the purchase process. Which of the items listed below does not logically fit?

a. Find a bank in the exporter’s country to handle financial transactions. b. Establish a letter of credit to smooth the process. c. Decide on the mode of transfer of goods. d. Always use an export or import middleman to expedite the process. e. Check compliance with national laws.


58. When a shipment reaches the United States, the consignee (usually the importer) will file ______________ with the port director at the port of entry.

a. visas b. product passports c. bills of landing d. bills of shipping e. entry documents


59. With respect to shipments entering the United States, a(n) __________ is a guarantee by someone that the duties and any potential penalties will be paid to the customs of the importing country.

a. line of credit b. transfer c. bond d. permit e. tariff


60. Merchandise arriving from Canada and Mexico, trade fair goods, and perishable goods and shipments assigned to the U.S. government almost always utilize the ____________________ to enable fast delivery after arrival.

a. quick release form b. quick permit form c. Customs form 7200 d. Special Permit for Immediate Delivery e. block and load release form


61. If goods enter a ________________, they can be re-exported anytime (up to five years) without payment of duty.

a. holding pen b. corporate security zone c. bonded warehouse d. wharf zone e. parallel import zone


62. When import duties are paid, the _________________ duty is a percentage of the value of the merchandise.

a. ad valorem b. specific c. compound d. nontariff e. import


63. When import duties are paid, the _________________ duty is a specified amount of the per unit weight or other quantity of the merchandise.

a. ad valorem b. specific c. compound d. nontariff e. import


64. When import duties are paid, the _________________ duty is a combination of a specified amount of the per unit weight or other quantity of the merchandise plus an ad valorem rate.

a. bonded b. corkage c. compound d. nontariff e. import


65. _________________ duties are assessed on imported merchandise sold to importers in the United States at a price that is less than the fair market value.

a. Ad valorem b. Specific c. Compound d. Nontariff e. Antidumping


66. ______________________ duties are duties that are assessed to counter the effects of subsidies provided by foreign governments to goods that are exported to the United States.

a. Ad valorem b. Specific c. Compound

d. Countervailing e. Antidumping


67. ________________ channels refer to the legal export/import transaction involving genuine products into a country by intermediaries other than the authorized distributors.

a. Black market b. Gray market c. Positioned d. Zoned e. Red zone


68. Another name for gray market channels is _________________.

a. positioned imports b. concentric marketing c. strategic entry imports d. parallel imports e. sidebar hedging


69. Brand reputation is a critical element in _________________ products.

a. gray b. black c. furniture d. smuggled e. none of the above


70. All of the following conditions lend to the development of gray markets EXCEPT:

a. currency fluctuations. b. differences in market demand. c. legal differences. d. opportunistic behavior. e. foreign trade outlets.



71. Exporting is the first mode of foreign entry used by many companies.


72. Exports represent about 4 percent of the U.S. gross domestic product (GDP).

Difficulty: (3)Knowledge: (F) Page: 492

73. For a firm beginning exports for the first time, the first step is to use available primary data.


74. The World Bank publishes the World Development Report.


75. A standardized product is not the easiest to sell abroad.


76. _________________ exporting involves using independent U.S. middlemen to market the firm’s products overseas.

77. The combination export manager (CEM) acts as the import department to a small importer.


78. Piggyback exporting refers to the practice where U.S. firms that have an established export department assume, under a cooperative agreement, the responsibility of exporting the products of other U.S. companies.


79. In the U.S., the Automated Export System (AES) enables exporters to file import information at no cost over the Internet.


80. Exports from the United States do not require an export license.


81. A bill of lading is a contract between the exporter and the shipper indicating that the shipper has accepted responsibility for the goods and will provide transportation in return for payment.


82. INCOTERMS is an acronym for _____________________________________.

83. FOB is an acronym for ______________________.

84. Exchange risk is the risk that the importer will not pay or fail to pay on the agreed terms. Difficulty: (2) Knowledge: (F) Page: 502

85. A confirmed irrevocable letter of credit is issued by the importer’s bank and confirmed by a bank usually in the exporter’s country.


86. The Japan External Trade Organization (JETRO) is affiliated with the U.S. department of Commerce.


87. The World Bank is a federally supported bank whose mission is to support the Ex-Im Bank.


88. The American Export Trading Company act was passed in 1982.


89. More than 90 percent of the world’s trade is denominated in U.S. dollars.


90. With respect to importing fees, a(n) ______________ duty is a percentage of the value of the merchandise.

91. Antidumping duties are assessed on imported merchandise sold to importers in the United States at a price that is less than the fair market value.


92. Gray market channels are also known as parallel imports.


93. Three conditions are necessary for gray markets to develop. The conditions include:

(a) Availability of products in other markets, (b) limited trade barriers, and (c)_______________________.

94. Gray marketing is an illegal trade transaction.

95. Smuggling and black market activities are illegal global markets.

Essay

96. Indicate the factors that a prospective exporter might examine to choose an export market.

97. Describe the direct and indirect channels of distribution that are available to exporters. As part of the description process, indicate any conditions or advantages that might be present in these channels.

98. Pick three (3) of the options available to exporters when it comes to terms of payment. Explain each of the options available based on your choice.

99. Describe the role the U.S. government plays in maintaining and fostering export activities. Demonstrate this role with specific examples of activities that the government might undertake.

100. Describe gray markets. Explain how they develop. Describe your feelings about buying from a gray market.

Chapter 17

Multiple Choice

1. The capstone of a company’s global marketing activities is its ____________________________.

a. strategic marketing plan. b. strategic marketing design. c. strategic marketing circle. d. strategic marketing products. e. strategic marketing processes.


2. The content of a global strategic marketing plan covers the following four areas EXCEPT:

a. a market situation analysis. b. objectives. c. strategies. d. regional analysis. e. action plans.


3. The first step of a global strategic marketing plan starts with:

a. market situation analysis. b. actions plans. c. strategies. d. global ranking. e. objectives.


4. Top-down strategic planning is based on a _____________________ approach.

a. decentralized b. centralized c. regional d. globalized e. local


5. A bottom-up planning approach starts with the ______________ subsidiaries.

a. local b. global c. transnational d. manufacturing e. high-tech


6. A recent survey of large multinational corporations found that pure ______________

planning was most popular (used by 66 percent of the companies surveyed).

a. bottom-up b. top-down c. strategic

d. long-term e. short-term


7. A series of key criteria impact global organizations and their organizational designs. All of the following would be major environmental influences on the organizational design decision and structure EXCEPT:

a. competitive environment. b. rate of environmental change. c. product diversity. d. regional trading blocs. e. nature of customers.


8. As international sales grow, the organizational structure will evolve to mirror the growing importance of the firm’s _________________ activities.

a. local b. regional c. global d. strategic e. manufacturing


9. A series of key criteria impact global organizations and their organizational designs. All of the following would be major firm-specific factors on the organizational design decision and structure EXCEPT:

a. strategic importance of international business. b. product diversity. c. company heritage. d. regional trading blocs. e. quality of local managerial skills.


10. Which of the following would be considered a key environmental factor that influences global organization design decisions and structure?

a. strategic importance of international business. b. product diversity. c. company heritage.

d. regional trading blocs. e. quality of local managerial skills.


11. In the area of global organizational design, the major firm-specific factors include the following EXCEPT:

a. local customers. b. strategic importance of international business. c. product diversity. d. company heritage. e. quality of local managerial skills.


12. Typically, when overseas sales account for a very small fraction of the company’s overall sales revenues, ____________________ can easily handle the firm’s global activities.

a. complex organizational structures b. network organizational structures c. simple organizational structures d. a virtual system e. a matrix system


13. All of the following are examples of the principal designs that firms can adopt to organize their global activities EXCEPT:

a. an international division. b. a city division. c. a product-based structure. d. a geographic structure. e. a matrix structure.


14. Under the _____________________ design of global activities organization, the company basically has two entities (the domestic division and the international division).

a. international division b. cryptic division c. product-based structure d. geographic structure e. matrix structure


15. Under the _____________________ design of global activities organization, the company is organized along its various product divisions.



16. Under the _____________________ design of global activities organization, the company is configured along areas such as countries, regions, or some combination of these two levels.



17. Under the _____________________ design of global activities organization, the company uses the option of integrating two approaches so there is a dual chain of command.



18. Most companies that engage in global marketing will initially start off by establishing a(n):

a. city division. b. country division. c. international division. d. export department. e. export commission manager.


19. Which of the following organizational structures is most appropriate for the company whose product line is not too diverse and does not require a large amount of adaptation to the local country needs?

a. international division b. cryptic division c. global product division structure d. geographic structure e. matrix structure


20. Which of the following organizational structures is most appropriate for the high-tech company with highly complex products or MNCs with a very diversified product portfolio?

a. international division b. cryptic division c. global product division structure d. geographic structure e. matrix structure


21. If a high-tech company organizes itself by breaking into business networks, radio communications, public telecommunications, components, and microwave systems, which of the following organizational structures would probably be in use?

a. international division b. global product division structure c. global network solutions d. geographic structure e. matrix structure


22. All of the following are benefits of the global product division structure EXCEPT:

a. large degree of flexibility in terms of cross-country resource allocation. b. large degree of flexibility in terms of cross-country strategic planning. c. scale economics. d. facilitates a global focus. e. easy communication and coordination among the various product divisions without duplication of effort.


23. Which of the following areas are very difficult for a global product division to accomplish (therefore, this area is a shortcoming)?

a. large degree of flexibility in terms of cross-country resource allocation. b. large degree of flexibility in terms of cross-country strategic planning. c. scale economics. d. facilitates a global focus. e. easy communication and coordination among the various product divisions without duplication of effort.


24. All of the following are problems with country-based subsidiaries EXCEPT:

a. they are too costly. b. they have coordination problems with corporate headquarters. c. cross-fertilization is hindered. d. local market conditions go unnoticed. e. a not-invented-here mentality exists.


25. All of the following are profiles that are suggested for the twenty-first century country manager EXCEPT:

a. the trader. b. the power broker. c. the builder. d. the ambassador. e. the cabinet member.


26. As a profile of a twenty-first century country manager, _________________ establishes a beachhead in a new market or heads a recently acquired local distributor. They should have an entrepreneurial spirit.

a. the trader b. the representative c. the builder d. the ambassador e. the cabinet member


27. As a profile of a twenty-first century country manager, _________________ is a team player with profit and loss responsibility for a small- to medium-sized country. Team-manship is key here. a. the trader

b. the representative c. the builder d. the ambassador e. the cabinet member


28. As a profile of a twenty-first century country manager, _________________ develops local markets. They are entrepreneurs who are willing to be part of regional global strategy teams.

a. the trader b. the representative c. the builder d. the ambassador e. the cabinet member


29. As a profile of a twenty-first century country manager, _________________ is in charge of large and/or strategic markets. Prime responsibilities include handling government relations and integrating acquisitions and strategic alliances.

a. the trader b. the power broker c. the builder d. the ambassador e. the cabinet member


30. With respect to regional structures, a recent survey found that all of the following roles were performed EXCEPT:

a. scouting. b. liberating. c. strategic simulation. d. signaling commitment. e. pooling resources.


31. The _________________ structure of organization explicitly recognizes the multidimensional nature of global strategic decision making.

a. international division b. customer division c. global product division

d. geographic e. matrix


32. The primary advantages of the matrix structure for organizing is that they represent the growing complexities of the global market arena and:

a. it fosters team spirit and cooperation among managers. b. it secures higher profits. c. it does not duplicate efforts. d. it has smooth and accurate communications. e. it has clear lines of communication with no confusion.


33. All of the following are considered to advantages of the matrix structure of organizing EXCEPT:

a. it fosters team spirit. b. it fosters cooperation among managers. c. it does not duplicate efforts. d. it causes managers to think globally. e. it causes managers to think globally but act locally.


34. Which of the following would be considered a disadvantage or drawback of the matrix structure of organizing?

a. it does not foster team spirit. b. it does not foster cooperation among managers. c. it duplicates efforts and can cause confusion. d. it prohibits managers from thinking globally. e. it causes managers to think locally only.


35. All of the following are disadvantages or drawbacks of the matrix structure of organizing EXCEPT:

a. dual reporting leads to conflicts and confusion. b. dual profit responsibilities lead to conflicts and confusion. c. bureaucratic bloat. d. power clashes can occur. e. managers think globally and act locally.


36. The __________________ is one solution that has been suggested to cope with the shortcomings associated with the classical hierarchical organization structures.

a. international division b. global network c. global product division d. geographic e. matrix


37. The __________________ model is an attempt to reconcile the tension between the need for local responsiveness and the wish to be an integrated whole.

a. international division b. global network c. global product division d. geographic e. matrix


38. Asea Brown Boveri (ABB), the Swiss-Swedish engineering company is an example of ______________________.

a. local networking b. regional networking c. global networking d. domestic networking e. high-tech networking


39. The networked global organization is sometimes referred to as _____________________.

a. international. b. multinational. c. transnational. d. local-national. e. quasi-national.


40. In the area of global branding strategies, the following options are used EXCEPT:

a. global branding committee. b. brand champion. c. global brand manager. d. informal, ad-hoc branding meetings. e. network meetings.


41. In the process of global brand management, if a company decides against a formal structure, it might still find it worthwhile to have an informal mechanism. This usually takes the form of a(n) ______________ branding meeting.

a. ad-hoc b. temporary c. longitudinal d. outside e. domestic


42. Global branding committees are usually made up of ________________executives.

a. matrix b. network c. medium-line d. top-line e. bottom-line


43. A ______________________ is a top-line executive (sometimes CEO) who serves as the brand’s advocate.

a. brand champion b. product champion c. local champion d. corporate champion e. high-tech champion


44. Global brand manager positions are created when top management lacks ___________________ expertise:

a. high-tech b. human resources c. operational d. manufacturing

e. marketing


45. Several management theorists have made an attempt to come up with the “right” fit between the MNC’s environment (internal and external) and the organizational setup. One popular model examines the relationship between organizational structure, _____________________, and the importance of foreign sales to the company (as a share of total sales).

a. product prices b. domestic services c. foreign product deliveries d. foreign product diversity e. purchasing habits


46. The Stopford and Wells model shows the relationship between the:

a. organizational structure, foreign product diversity and domestic sales. b. organizational structure, foreign product diversity and local sales.

c. organizational structure, foreign product diversity and the importance of foreign

sales. d. organizational structure, foreign product diversity and regional sales. e. organizational structure, foreign product diversity and high-tech sales.


47. According to the Stopford and Wells model, when companies first explore the global marketplace, they start off with a(n) ___________________________.

a. local division b. regional division c. international division d. global division e. none of the above


48. According to the Stopford and Wells model, as foreign sales expand without an increase in the firm’s foreign product assortment diversity, the company will most likely switch to a __________________________ structure.

a. host-country area b. home-country area c. global area d. geographic area

e. local area


49. A(n) ____________________ can be described as being where country and regional managers look at strategic issues from multiple perspectives.

a. glocal mindset b. global mindset c. local mindset d. regional mindset e. country mindset


50. To make global marketing strategies work, companies need to establish a(n) ____________________.

a. career system. b. development system. c. control system. d. appeals system. e. listening system.


51. The main purpose of a _____________ is to ensure that the behaviors of the various parties within the organization are in line with the company’s strategic goals.

a. career system b. development system c. control system d. appeals system e. listening system


52. All of the following are parts (or basic building blocks) of a formal control system EXCEPT:

a. the establishment of performance standards. b. the measurement and evaluation of performance against standards. c. the analysis and correction of deviation from standards. d. perfection training. e. none of the above.

Difficulty: (1) Knowledge: (F) Page: 590-91

53. Formal control systems are also called ________________ control systems.

a. administrative b. conductive c. selective d. bureaucratic e. strategic


54. The first step in any control process should be to:

a. clearly establish rewards and punishments. b. set standards (metrics). c. set controls. d. set monitoring mechanisms. e. establish who the controller is.


55. The two types of standards are behavior and ____________________________.

a. outcome-based. b. performance-based. c. intellectual-based. d. strategic-based. e. structural-based.


56. Although proper reward systems are crucial to motivate subsidiary managers, a recent study has shown that the key role played is by the presence of ____________.

a. strong leadership b. bonuses c. perks d. due process e. nondiscrimination


57. The two most common forms of informal control are human resource development and _________________.

a. manufacturing b. production c. network structure d. strategic control

e. corporate culture


58. Corporate cultures can be clan-based or ___________________.

a. market based b. leader based c. employee based d. symbol based e. tradition based


59. The __________________ form of corporate culture is distinguished by an embodiment of a long socialization process; strong, power norms; and a defined set of internalized controls.

a. market based b. leader based c. employee based d. clan based e. tradition based


60. The _________________ form of corporate culture is distinguished by norms that are loose or absent; socialization processes are limited; and control systems are purely based on performance measures.

a. market based b. leader based c. employee based d. clan based e. tradition based


61. To shape a shared vision, cultural values primarily demand which of the following properties?

a. easy to understand in only one way and written in English. b. have clarity, continuity, and consistency. c. have symbolism, sex-appeal, and sensitivity. d. be dynamic, demanding, and declarative. e. be global, gifted, and guiding.


62. The company’s management programs are another major ________________ control tools.

a. informal b. formal c. simple d. dynamic e. complex



63. The capstone of a company’s global marketing activities is its strategic marketing plan.


64. The first step of a global strategic marketing plan starts with market situation analysis.


65. The content of a global strategic marketing plan covers four areas which include: market situation analysis, objectives, strategies, and ____________________.

66. Companies with substantial product diversity tend to go for a global geographic division configuration.


67. The charter of the international division is to develop and coordinate the firm’s global operations.


68. The global product structure is most appropriate for companies whose product line is not too diverse and does not need a large amount of adaptation to local country needs.


69. Under the ________________ design, the company configures its organization along geographic areas.

70. Country-focused organizations can be very good forms of structure because they tend to be less costly than other forms.


71. Under the __________________ design, the company integrates two approaches and has a dual chain of command.

72. Some corporate strategy experts believe that in the twenty-first century, the role of the country manager will be minimal.


73. The ___________________ type of manager is characterized as being in charge of large and/or strategic markets. They also handle government relations.

74. With respect to organizational forms, the matrix structure explicitly recognizes the multidimensional nature of global strategic decision making.


75. The matrix structure explicitly recognizes the multidimensional nature of global strategic decision making.


76. Matrix structure can be a bureaucratic bloat.


77. The network global organization is sometimes also referred to as an “ethnocentric” organization.


78. Asea Brown Boveri is a prime example of networking.


79. A brand champion is not a top-line executive.


80. The Stopford-Wells international structural stages model shows the relationship

between the MNCs’ networks and their overseas productivity.


81. The concept of a glocal mind-set encourages looking at strategic issues from multiple perspectives.


82. The first step in the control process is to set standards.


83. Clan cultures embody a long socialization process, strong powerful norms, and a defined set of internalized controls.


84. In market cultures, norms are always very strong.


85. The company’s management programs are another major formal control tools.


Essay

86. List and briefly discuss the key criteria that impact global organizational design.

87. List and briefly describe the principal organizational design options that firms can use to organize their global activities. Cite the advantages and disadvantages of each form.

88. Describe the five profiles that country managers might need to fit to be able to lead their organizations into the challenges of the twenty-first century.

89. Explain how a global networked organization might differ from a matrix organizational structure. To answer this question, review the characteristics of both structures carefully.

90. Although some feel country managers are obsolete, most companies believe they are essential to the firm. What reasons make country managers more important than ever? What roles will they play?

Chapter 18

Multiple Choice

1. Emerging markets can be found in which of the following areas?

a. Africab. Asiac. Latin Americad. Eastern Europee. All of the above


2. Emerging markets refer to:

a. countries that used to be called “less developed countries.”b. countries that were previously called “Third World.”c. countries that lacked convertible currency.d. countries that were communist.e. both a and b

3. Which of the following is NOT a category of emerging markets?

a. developed countriesb. advanced emergingc. secondary emergingd. frontier countriese. both a and d

4. Which of these does not describe the BRIC nations?

a. They consist of Brazil, Russia, India and China.b. They have large populations.c. They constitute almost 15 percent of world GDP.d. They are developed countries.e. All have growing economies.

5. The BRIC nations:

a. are all rich in natural resources.b. are small countries with high income economiesc. are expected to surpass the GDP of the G7 nations within 20 years.d. constitute a trade bloc.e. none of the above

6. The Next Eleven:

a. is a George Clooney movie sequel.b. consists of a diverse group of emerging markets.c. constitute their own trade bloc.d. are all located in Asia.e. none of the above

7. Which of the following nations is NOT a member of the Next Eleven?

a. Malaysiab. Indonesiac. Egyptd. Mexicoe. Nigeria


8. What event caused severe setbacks to many emerging markets?

a. global warmingb. China’s rise as a global superpowerc. losses in the World Cup soccer matchesd. the Asian financial crisise. EU focus on North Africa as a trading partner

9. Emigrant workers from emerging markets:

a. are a nuisance to the countries they work in.b. deplete the economy of their home country.c. are almost always unskilled workers.d. form local communities abroad that can be leveraged.e. travel only within their own continent.


10. Which country has the greatest number of mobile phone subscribers per 100 inhabitants?

a. Italy b. Russia c. Germany d. United Kingdom e. Nigeria


11. After China, the country with the largest shopping malls in the world is:

a. United Statesb. Philippinesc. Turkeyd. Canadae. Malaysia


12. Because emerging markets have underdeveloped infrastructure:

a. they cannot afford the best products from MNCs.b. they can leapfrog old technology.c. they are more eager to adopt new products.d. R&D efforts are centered in these markets to generate new ideas.e. distribution channels will be easier to set up.


13. Emerging markets:

a. cannot afford the most modern products.b. are innovative in service offerings.c. embrace new products quickly.d. have low time-to-takeoff for new products.e. all of the above


14. Global competitors:

a. are not headquartered in emerging markets.b. duel for market share in emerging markets but only consist of MNCs from

developed countries.c. come only from the BRIC nations.d. may emerge from any nation to challenge established MNCs.e. none of the above


15. Significant companies from emerging markets are leaders in which of these industries?

a. smart phonesb. computersc. beerd. carse. all of the above


16. Acer, the world leader in laptop manufacturing and design, is based in which country?

a. South Koreab. Taiwanc. Chinad. Japane. Singapore


17. Jollibee competes in which industry around the world?

a. theme parksb. entertainmentc. fast foodd. children’s clothinge. shoes


18. Jollibee is a major international player that has its headquarters in ________.

a. Malaysiab. Indonesiac. Chinad. Philippinese. India


19. Which of the following brands has NOT been bought by firms in emerging markets?

a. Miller beerb. Jaguarc. IBM PCd. Ferrarie. Budweiser


20. One strategy used by the new champions to succeed in major markets is:

a. reviving old technology to save money.b. copying the same model as MNCs from developed markets but with cheaper

items.c. employing the latest technology.d. training staff in foreign companies first.e. both a and d


21. Emerging market champions:

a. avoid new technology because it is too expensive.b. use a combination of old technology and cheap labor for a competitive

advantage.c. leapfrog to the newest technologies to offer quality products.d. copy MNC products to avoid problems with product development.e. try to avoid innovation.


22. Rapid scale-up of new champions:

a. doesn’t occur because capital is in short supply.b. can be done by absorbing smaller rivals.c. is achieved by investing more than smaller rivals.d. both b and ce. can only be done with the help of outside loans from such as the World Bank.


23. When would emerging market companies use a dodge strategy?

a. when its assets are transferableb. when there is little pressure to globalizec. when industry pressure is highd. when assets are only valuable in the home markete. both c and d


24. An emerging market company would be a defender when:

a. its assets are transferable.b. there is little pressure to globalize.c. industry pressure is high.d. assets are only valuable in the home market.e. both b and d


25. When competing with the new champions from emerging markets, MNCs:

a. should give up—the new champions have cheaper labor and the latest technology.

b. can ignore the new champions—they are only effective in emerging markets.c. should focus on the high end of the market and leave the rest to the local

companies.d. buy out local rivals and use them to challenge the new champion in the home

market.e. none of the above


26. MNCs are being threatened by new champions from the emerging markets. Which of the following strategies is NOT recommended for them?

a. Continue to use low cost sourcing in emerging markets.b. Sell only goods developed by home country R&D in emerging markets.c. Ignore emerging market branding strategies as being too elementary.d. Do not invest in the mass markets of emerging economies as they will never

amount to much revenue.e. All of the above are not suggested.


27. Companies from the emerging markets are proving to be surprising challengers to older, larger MNCs. Which of the following would you recommend as an MNC strategic response?

a. Invest in growing mass markets of developing countries.b. Partner with companies from the emerging markets.c. Buy out smaller rival firms in the emerging markets.d. Consider developing countries as more than just manufacturing sites.e. All of the above


28. BOP stands for:

a. a type of music common to developing countries.b. bottom of the pyramid.c. bottom of the pile.d. boost our profits.e. none of the above


29. Some people are optimistic about the BOP as a market segment. This is because:

a. they are hopeless romantics and can’t face reality.b. there is a great deal of untapped money in the BOP.c. BOP is critical for long term growth of the company.d. the BOP needs help and would welcome input from outsiders.e. only b and c


30. Despite its dismal financial condition, the BOP has support as a viable market segment. This is because:

a. Wal-Mart concentrated in a similar area in the U.S. and became a world player.b. incomes are expected to rise over time and this segment could become brand

loyal.c. challenges faced here could be the basis for new and innovative products. d. the BOP is a source of cheap labor.e. both b and c


31. The BOP:

a. constitutes a majority of the world’s population.b. generates $2 an hour in wages.c. is found mostly in the western hemisphere.d. does not offer opportunities for MNCs.e. is a viable market for only small firms with very cheap products.


32. Bottom of the pyramid means:

a. lower class Egyptians.b. the lowest level of consumer involvement with your product.c. the lowest satisfaction level of Maslow’s hierarchy.d. people earning less than $2 per day.e. the first step toward $1 million on a game show.


33. Compared to developed countries, segments in emerging markets are:

a. enormous.b. much more coarse and difficult to define.c. harder to reach because media options are not as well developed.d. less wealthy. e. all of the above


34. Hindustan Unilever pursued the following strategy to expand its market share in India.

a. retained the low unit price concept only for shampoob. focused its efforts on the BOP massesc. emphasized local R&D effortsd. concentrated on the urban population for salese. offered a wide variety of brands to tightly segment the market

Difficulty: (3) Knowledge: (F) Page: 610, Global Perspective 18-1

35. Hindustan Lever decided that its product line should include:

a. only products for the rich, so it could charge a premium.b. products for all three major segments: affluent, middle income, and low

income.c. low income only, to capture the entire lower end as loyal customers for the

future.d. only the middle income, as they were ignored by other firms.e. both the middle and upper income groups, as profit margins were viable there.

Difficulty: (2) Knowledge: (A) Page: 610, Global Perspective 18-1

36. Social marketing—in the form of new product development and/or aiding development:

a. is not practiced by emerging market companies.b. is a waste of time—the population won’t be exposed to the messages and is

unlikely to follow directions.c. can expand market opportunities for the firm.d. builds goodwill that can be leveraged into greater profits.e. both c and d


37. What best describes the outcome of early entry into emerging markets?

a. It can be lucrative, especially for huge markets like China and India.b. It is likely to fail because the markets don’t or can’t appreciate the product.c. It will probably face few direct competitors.d. Products will be too expensive for local consumers.e. None of the above


38. There are many reasons why a company might prefer to be a follower in a new market, not a first entrant. Which of these is NOT one of those reasons?

a. reduced profits because the market is already goneb. fewer pitfalls as the follower can see the mistakes of the first-moverc. better developed marketing channelsd. competitive response from other MNCs and local competitorse. none of the above


39. Why is being a first-mover attractive in emerging markets?

a. Pent-up demand may lead to high initial sales.b. Governments are eager to offer concessions to first-movers.c. Early entrants get best access to key marketing resources.d. Marketing dollars generate higher productivity.e. All of the above


40. What approach should smaller firms take in emerging markets?

a. Be a follower so you don’t make costly mistakes.b. Be a first-mover—to the victor go the spoils.c. Be a first-mover to outmaneuver larger firms eyeing the same market.d. Avoid the markets altogether—they take too much time and effort to develop

compared to the pay-off for a small firm.e. Merge with a local company.


41. The risks of entering emerging markets:

a. are financial, but only in terms of getting paid promptly and in full.b. are financial, but include both currency volatility and getting paid.c. are marketing related only—we wouldn’t enter a country where we couldn’t

get paid.d. are marketing and currency volatility driven.e. cover the enter spectrum of marketing and financial risks.


42. Entry strategies for emerging markets include _______.

a. exportb. licensingc. joint ventured. direct investmente. all of the above


43. The preferred entry mode(s) for emerging markets:

a. include(s) both licensing and minority joint venture.b. seek(s) to adapt products to ensure the capture of the market.c. involve(s) direct investment to close the market to local challengers and later

MNCs.d. focus (focuses) on marketing instead of sales.e. both a and b


44. Which of the following is not a common risk when entering emerging markets?

a. product piracyb. enforcing property rightsc. well-developed marketing infrastructured. antitrust lawse. government intervention


45. When MNCs enter an emerging market, they are likely to:

a. share product secrets with the new country.b. insist on tight corporate control.c. take a high risk approach to increase the chance for greater rewards.d. emphasize sales as a measure of success.e. both b and d


46. Product policies that have been pursued when entering emerging markets include:

a. no adaptation—the risks and expense are too great.b. selling a narrow range of premium goods.c. pursuing backward innovation.d. anchoring the product entry with products near the end of their life cycle in the

home market.e. all of the above


47. Probably the least effective product design option is:

a. no adaptation—sell what we already make.b. to sell our normal products at premium prices.c. to sell a stripped down version of a normal good.d. to extend the product life cycle by selling obsolete goods abroad.e. All of the above are equally effective.


48. Backward innovation and selling obsolete goods:

a. run a risk of consumer backlash in emerging markets. b. could save the company money on product development.c. should not be used because cutting edge products are most highly favored in

emerging markets.d. are entirely different approaches to entering a market.e. a, b and c are all reasonable answers


49. Common features that products must have to be successful in emerging markets include:

a. the very latest designs.b. the widest variety of options.c. ruggedness.d. high quality.e. warranties.


50. Companies have used which of the following methods to enhance product acceptance in emerging markets?

a. washing machines that can restart after a power outageb. changing detergent formulae to use more waterc. selling a top-end water purifier in India for greater assurance of pure waterd. lowering quality to keep prices lowe. all of the above


51. When designing a product for emerging markets, companies should consider which of the following?

a. low price, ruggedness, and low qualityb. low price, inconsistent quality, and ability to run without electricityc. high price, consistent quality, and a warrantyd. low incomes, unreliable power supplies, and scarce resourcese. low price, back-up power supplies, and a warranty


52. A manually operated sewing machine would:

a. be a backward innovation.b. be an example of a product life cycle extension.c. be rejected in emerging markets as not being modern enough.d. be too difficult to operate.e. likely have the idea copied as soon as it hit the market.


53. Brand strategies proven to succeed in emerging markets include:

a. pursuing only the wealthy—they don’t require product or price changes.b. aiming brands at various market segments with different formulae and prices.c. focusing on the emerging middle class for its growing buying power and

eventual loyalty.d. purchasing a local brand as part of the product offering.e. both b and d


54. Which of the following is MOST likely to be used when packaging for emerging markets?

a. large packages to cater to the bigger families common in these countriesb. large packages because an entire village will share the productc. smaller packages at lower price pointsd. large packages with individual wrappers so merchants can resell in smaller

quantitiese. both c and d


55. Package design in emerging markets can largely ignore the feature of ________.

a. sturdinessb. heat resistancec. freshnessd. sustainabilitye. none of the above


56. Because of the climate and sales conditions of many emerging markets, packages should:

a. come frozen so freshness and safety are ensured.b. be made of the cheapest materials to save money.c. be sold with reusable containers.d. allow people to see and smell the product before buying.e. all of the above


57. A package characteristic with perhaps greater significance in emerging markets than developed countries is ________.

a. refrigerationb. sustainabilityc. safetyd. variety of sizese. metal containers


58. The pricing strategy most likely to succeed in emerging markets is:

a. very low prices that everyone can afford—large volume makes up for low margins.

b. premium pricing only—establish the image of quality and save money on not having to adapt the product for local sale.

c. cater to the growing middle class and raise prices as income goes up.d. saturate all price points with different products and make money at all levels.e. All of the above are equally viable.


59. Why is distribution considered to be the biggest challenge when entering an emerging market?

a. It isn’t—pricing is.b. It isn’t—product adaptation is.c. Distribution infrastructure is too complex to navigate.d. The country’s land mass is a deterrent.e. All of the above


60. Which of the following is NOT a reason why distribution is difficult in emerging markets?

a. Local and rural areas can both be easily reached.b. Shopping malls and supermarkets are on the rise in emerging markets.c. Traditional retailers can be hard to work with.d. Operating capital of retailers may be lacking.e. Local brands are difficult to displace on the shelves.


61. P&G succeeded in Russia by:

a. using door to door sales reps.b. direct export to a single large distributor in Moscow.c. partnering with EU firms that already had a presence in Russia.d. developing its own distributor network in exchange for exclusivity.e. none of the above—Unilever is the dominant player in Russia.


62. When managing distributors in emerging markets, MNCs should:

a. pick partners with extensive local product-market knowledge.b. choose partners with excellent English-speaking skills.c. focus on entrepreneurs to build local good-will.d. only enter markets with a company-owned distributor network.e. select distributors who are competent working with MNCs.


63. Direct selling in emerging markets:

a. is attractive because of the rapid growth of internet sales.b. often works best in a B2B setting.c. is valuable in countries where face-to-face sales are common.d. both b and ce. none of the above—direct selling should be avoided as too difficult to

supervise.


64. Emerging market distributors seeking exclusive territories should:

a. be told yes, on a temporary basis.b. be denied, because this policy retards rapid market development.c. be ignored—we will set up a company-owned distribution network.d. be told no territories exist—everyone can sell everywhere, and the winner gets

the final contract.e. none of the above


65. Communication challenges include:

a. raising brand awareness.b. educating customers about product use and benefits.c. creating brand image.d. gaining loyalty.e. all of the above


66. Push strategies:

a. are less viable in emerging markets than pull strategies.b. are never used in emerging markets because channels are in disarray.c. work well in many countries because of the enormous channel power of

distributors.d. result in the MNC being cheated because channel members keep the incentives

for themselves.e. never reach consumers.


67. Which of the following is a reason why a push strategy would succeed in emerging markets?

a. more frequent shopping than in developed countriesb. heavy reliance on retailer recommendations about brandsc. significant distributor powerd. numerous opportunities for brand switchinge. all of the above


68. Why might pull strategies aimed at consumers in emerging markets NOT be very successful?

a. They don’t understand the message about the product.b. Coupons may be stolen and never reach the consumer for redemption.c. Mass media are less effective in the emerging nations.d. All of the above apply.e. None of the above apply—emerging market consumers love coupons.



69. Emerging markets are not a tempting target for MNCs.


70. The most busy McDonald’s in the world is in Peking.


71. The bulk of the revenues from some MNCs come from emerging markets.


72. Transition economies are those that are moving from very poor to more developed.


73. Iran is one of the BRIC nations.


74. BRIC stands for “big, rich, independent countries”.


75. Remittances from foreign workers are important to emerging market economies.


76. Most of the world’s largest shopping malls are in Asia.


77. No companies from emerging market countries have made it to the Fortune Global 500 list.


78. Most of the largest banks in the world are from the United States.


79. Product piracy is not a problem in China.


80. Products from emerging markets only compete as low-end challengers to established brands.


81. MNCs cannot use products developed in emerging markets because the quality standards are too low to be transferred to MNC home markets.


82. India is experiencing changes in its income pattern from pyramid to diamond.


83. Hindustan Unilever is a major corporation based in Pakistan.

Difficulty: (2) Knowledge: (F) Page: 610, Global Perspective 18-1

84. Social marketing in the Third World is a waste of time and money.


85. Risk levels of entering emerging markets are higher than those for developed countries.


86. Backward innovation and selling obsolete goods are different names for the same product strategy.


87. The most common packaging choice for emerging markets is a smaller package.


88. Frugal engineering means making very cheap, low quality products so you can get the most profit.


89. Local autonomy should always be granted to distributors because they know the market better than the MNC.


90. Push strategies are more likely to be successful in emerging markets than pull strategies.


91. Billboards can be effective in reaching both rich and poor consumers in emerging markets.


Essay

92. Describe the characteristics that define emerging markets.

93. Despite coming from humble origins and lacking much of the resources of the major global firms, many companies from emerging markets are serious challengers in world markets. What strategies do they employ to enable them to succeed?

94. What are the strategic options for emerging market firms in global marketing? Under what conditions would each be suggested?

95. There are some commonly held beliefs about marketing mix strategy that have been proven to be less than optimal. Identify some of these.

96. Describe the communication challenges faced when entering emerging markets.

Chapter 19

Multiple Choice

1. According to the text, the Web clearly provides a unique _______________ and ______________ channel to marketers across the globe.

a. distribution, higher educationb. distribution, productionc. distribution, networkd. distribution, communicatione. none of the above


2. According to this textbook, compared to the U.S., Europe as a future Internet market will be: a. better, because virtual retailers have a competitive advantage over traditional stores.

b. worse because there are so many languages.c. better because delivery is faster.d. worse because Europe has less well developed Internet infrastructure.e. both A and C


3. Although the Internet has become a global phenomenon, it first originated in (the):

a. Italy.b. Japan.c. U.S.A.d. Belgium.e. Singapore.


4. In 2005, the worldwide Internet population surpassed 1 billion.

a. 1 billionb. 2 billionc. 3 billiond. 4 billione. 5 billion


5. The country with the most Internet users is: a. United States b. Japan c. India d. China e. none of the above


6. The country with the highest penetration rate of Internet users is: a. United States b. Japan c. South Korea d. United Kingdom e. Canada


7. The majority of the Internet users now live outside of ________________ speaking countries.

a. Englishb. Frenchc. Arabicd. Germane. Spanish


8. Which of the following is NOT a barrier to Internet marketing?

a. languageb. culturec. infrastructured. access chargese. none of the above


9. The barriers to global e-commerce are:

a. language barriers.b. cultural barriers.c. infrastructure.d. all of the above.e. none of the above.


10. The structural barriers to global e-commerce include the following EXCEPT:a. language barriers.b. cultural barriers.c. infrastructure.d. knowledge barriers.e. roaming charges.


11. Which of these languages is NOT in the top three on Internet sites?

a. Hindub. Chinesec. Spanishd. Germane. Both a and d


12. Using only English on a website: a. is doomed to fail. b. is ethnocentric. c. works in some industries like aerospace. d. limits your market. e. both c and d


13. In global e-commerce, Web site localization services have created the need for more:

a. translators.b. copy writers.c. media specialists.d. network specialists.e. knowledge experts.


14. Companies that wish to make their Web sites international by translating the information and content into other languages have two alternatives that may include:

a. hire a firm or a person doing the translation.b. use a software having the translation function.c. use only English.d. both a and be. both b and c


15. Which of these would NOT be a barrier to Internet marketing?

a. preference for face-to-face business transactionsb. lack of familiarity with credit cardsc. strict Internet security measuresd. website wording, logos, and colorse. patriotism


16. In the Asia-Pacific region, B2B e-commerce activities are facing obstacles which could hinder the growth of the Internet. These obstacles include:

a. doing business on a face-to-face basis.b. cultivating relationships and secrecy issues.c. reluctance to share information.d. all of the above are obstacles.e. none of the above are obstacles.


17. In many countries, businesspeople prefer to do business on a________________.

a. virtual basis.b. simple basis.c. complex basis.d. face-to-face basis.e. none of the above.


18. E-readiness for Brazil, India, Russia and China is:

a. unknown—they won’t answer the surveys. b. excellent—their relative backwardness lets them jump ahead with the latest technology.

c. middle of the pack because their economies are growing rapidly.d. very low.e. none of the above


19. ISP is an acronym for:

a. Internet strategies provider.b. Internet standards provider.c. Internet service provider.

d. Internet system provider.e. none of the above.


20. In many European markets, consumers are reluctant to surf the Web because of:

a. high telecommunication charges.b. low per capita income.c. government rules and regulations.d. distribution costs.e. limited training and education.

Difficulty: (2)Knowledge: (F) Page: 632

21. In many countries, the cost of going online can be reduced by:

a. government deregulations.b. increased competition.c. new access alternatives.d. all of the above.e. none of the above.


22. In Japan, access to the web was previously dominated by ______________________, the Japanese telecom firm, which charges sky-high fees.

a. British Telecom.b. Toyota.c. Nippon Telephone & Telegraph (NTT).d. Seven-Eleven Japan.e. AT&T.


23. In the Internet world, there are many unsolved issues. For example, e-commerce is global but the national laws are mostly ________________.

a. localb. regionalc. politicald. religiouse. secular


24. At the global level, a new nongovernmental body has been established to resolve domain disputes. The name of this body is:

a. Internet Corporation for Domain Names (ICDN).b. Internet Corporation for Assigned Names (ICAN).c. Internet Corporation for Assigned Names and Numbers (ICANN).d. Internet Corporation for Networks (ICN).e. Internet Corporation for Domain Disputes (ICDD).


25. In the area of global marketing, the Internet offers two major benefits to companies that may be interested in selling their products worldwide. The two benefits include:

a. cost/efficiency savings and accessibility (connectivity).b. cost/efficiency savings and brand image.c. cost/efficiency savings and product standardization.d. cost/efficiency savings and high quality intelligence.e. cost/efficiency savings and product image.


26. According to the text, regarding the profile of Internet buyers, differences across countries are mainly due to two factors which are:

a. access charges and availability of computer programmers.b. access charges and availability of outsourcing.c. access charges and availability of entertainment options.d. access charges and availability of CNN.e. access charges and availability of AOL.

. Difficulty: (3) Knowledge: (A) Page: 634

27. At the core of any global Web marketing strategy is the conflict between local responsiveness and _______________________.

a. local integrationb. regional integrationc. transnational integrationd. polycentric integratione. global integration


28. In the product policy area, the Internet can help build:

a. regional brands.b. food brands only.c. global brands.d. high-tech brands.e. tangible brands.


29. Marketing of services differs from tangible goods in four areas:

a. intangibility, simultaneity, heterogeneity, and perishability.b. intangibility, simultaneity, heterogeneity, and collectivity.c. intangibility, simultaneity, heterogeneity, and connectivity.d. intangibility, simultaneity, heterogeneity, and believability.e. intangibility, simultaneity, heterogeneity, and credibility.


30. India Yahoo! is different from normal portals because is has:

a. no online auctions.b. astrology.c. no online shopping.d. real estate.e. cricket.


31. In some countries, customers might resent having the human element removed from the service encounter because of:

a. cultural factors.b. national factors.c. technology factors.d. consumption factors.e. international factors.


32. In international marketing, a Web site gives service marketers the ability to offer _________ hour service to customers worldwide.

a. 10b. 15c. 20d. 22e. 24


33. Because of the Internet, many MNCs’ pricing decisions are less _____________.

a. nationalb. flexible

c. creatived. rigide. vertical


34. In the area of pricing, the Internet facilitates:

a. work transparency.b. price transparency.c. profit transparency.d. channel transparency.e. none of the above is true.


35. For global marketers, the Web could affect the firm’s high margins because of:

a. profit transparency.b. channel transparency.c. price transparency.d. channel captaincy.e. knowledge transparency.


36. In Internet marketing, consumers often are aware of low prices because of the availability of brand and pricing information. This is a result of:

a. profit transparency.b. knowledge transparency.c. labor transparency.d. profit transparency.e. price transparency.


37. To deal with price transparency issues in Internet marketing, companies can use methods such as:

a. cutting prices in high-price countries.b. localizing the products.c. refusal to handle orders from overseas.d. All of the above methods can be used.e. None of the above methods are used.


38. In many industries, connectivity means that existing channels/distributors can be bypassed by connecting:

a. buyers and suppliers.b. buyers and governments.c. buyers and software companies.d. buyers and advertisers.e. buyers and media companies.


39. Manufacturers who plan to add the Internet to their existing international channels should be aware of two possibilities:

a. replacement effect and international effect.b. replacement effect and complementary effect.c. complementary effect and managerial effect.d. complementary effect and adaptation effect.e. replacement effect and quality effect.


40. In international distribution, replacement effect can:

a. cannibalize existing distribution channels.b. delete existing distribution channels.c. replace existing distribution channels.d. downsize existing distribution channels.e. add more distribution channels


41. In international distribution, complementary effect can:

a. expand the overall business.b. cannibalize existing distribution channels.c. materialize the overall business.d. downsize existing distribution channels.e. none of the above.


42. Click-and-mortar retailers are defined as:

a. those large retail chains trying to compete by pursuing no Web site presence.b. those large retail chains trying to compete by making alliances and joint ventures.c. those large retail chains trying to compete by going international.d. those large retail chains trying to compete by hiring Web specialists.e. those large retail chains trying to compete by setting up a Web site presence.


43. Click-and-mortar chains provide one advantage where:

a. products cannot be returned to the local stores.b. products can be returned to the local stores.c. click-and mortar stores have no Web sites.d. All of the above.e. None of the above.


44. In international marketing, many well-known brands in pure web retailing (e-trade, Amazon.com) still have limited ________________________ expertise.

a. localb. internationalc. regionald. economic e. political


45. Success of an e-tailing model will depend on three factors which include:

a. consumer behavior, cost structure, and networks.b. consumer behavior, cost structure, and government policies.c. consumer behavior, cost structure, and logistics.d. consumer behavior, cost structure, and human resources.e. consumer behavior, cost structure, and manufacturing.


46. According to Jupiter Research, online advertising spending is expected to grow to around ____________ in the U.S. by 2009.

a. $10 billionb. $16 billionc. $20 billiond. $30 billione. $35 billion


47. The Internet offers advantages to international advertisers which include:

a. global reach.b. interactivity.c. precise informationd. all of the above.e. none of the above.


48. In Internet advertising, by clicking on the banner ad, users can be taken to the:

a. internet’s databank.b. advertiser’s web site.c. Netscape’s site.d. Yahoo’s site.e. none of the above.


49. According to the text, the ultimate success of an online campaign depends on the following factors EXCEPT:

a. the nature of the product.b. the targeting.c. choice of the site.d. execution of the ad.e. hiring an efficient CEO.


50. Although Internet advertising is growing at a very rapid pace, many advertisers are skeptical about its potential as a global promotion tool because of (the):

a. annoyance factor.b. audience measurement.c. click-thru rates.d. high access and/or phone chargese. all of the above.


51. International marketers who plan on using the Web as an advertising tool should familiarize themselves with:

a. advertising regulations and restrictions in foreign markets.b. search engines.c. distribution channels.d. digital networks.e. digital suppliers.


52. Keyword search advertising allows the company to have a link to its Web site when

people are looking for ________________________ -related information.

a. peopleb. marketc. productd. countrye. none of the above


53. In Internet advertising, microsites are created to promote ____________________ brands.

a. hybridb. individualc. complexd. globale. none of the above


54. The ultimate success of an online campaign hinges on four factors which include:

a. nature of the product, the target, choice of site, and colorb. nature of the product, the target, choice of site, and graphicsc. nature of the product, the target, choice of site, and bannersd. nature of the product, the target, choice of site, and execution of the ade. none of the above


55. Online campaigns would work for __________________________________.

a. high involvement goods.b. low involvement goods.c. vertical involvement goodsd. horizontal involvement goodse. none o the above



56. Small and medium-size companies (SMEs) are also participating in the area of e-commerce and Internet-related opportunities.


57. Internet usage worldwide is not growing.


58. ISP is an acronym for Internet Standards Provider.


59. Knowledge barrier is not one of the barriers in Internet-related activities.


60. In many European markets, consumers are reluctant to spend time surfing the Web

because of higher telecommunication charges.


61. There are many unsolved issues in the Internet. For example, e-commerce is global

but the national laws are mostly transnational.


62. The Internet has leveled the playing field between large and small firms in global competition.

63. Asians have the most favorable attitude toward Internet shopping.

64. The Internet is not helping companies to create global brands.


65. Google is the #1 search engine throughout the world.

66. Consumer co-creation involves customers in value creation.

67. Mass customization is not the major plus of the Web.


68. Web sites enable companies to manage perishability.


69. In international marketing, a Web site gives service marketers the ability to offer 24 hour service to customers worldwide.


70. For global marketers, the Web could affect the firm’s high margins because of price transparency.


71. In many industries, connectivity means that existing channels can be bypassed byconnecting buyers and suppliers directly.


72. In international distribution, replacement effect does not cannibalize existing distribution channels.


73. It is estimated that most of the Internet advertising spending will be spent in Japan.


74. Banner advertising is not used in Internet advertising.


75. Keyword search advertising allows the company to have a link to its competitors.


76. Microsites are used to promote a particular brand.


77. Online campaigns would work for high-involvement goods whose buyers engage in product research and price comparisons.


Essay

78. Describe briefly the history of the Internet. Which nations are becoming prominent among Internet users? How does their growth compare with the Internet readiness shown in Exhibit 19-2?

79. Although global e-commerce is expected to increase, it has encountered obstacles and structural barriers. Discuss these structural barriers.

80. Discuss some of the ramifications of the Internet for global marketing strategies. Also explain some of the challenges faced by international marketers in the areas of global branding and Internet-based new products.

Mkt 515 week 11 final exam – strayer new

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