M: Marketing, 6e (Grewal)
Chapter 8 Global Marketing
1) Firms would prefer to manufacture in a country that has a trade surplus, or a higher level of
exports than imports.
2) The greater the wealth of a country, generally, the better the opportunity a firm will have in
that particular country.
3) The Big Mac Index is a measure of economic health in a country.
4) Colin wants information about the infrastructure in the countries his company is planning to
export to, so he should gather information about the transportation and communications
capabilities in each country.
5) Tariffs are intended to make imported goods less expensive and thus less competitive with
domestic products.
6) Among the various international trade agreements, the North American Free Trade Agreement
represents the highest level of integration across individual nations.
7) The BRIC countries are Bolivia, Russia, Italy, and China.
8) Increasing liberalization in the Chinese economy has prompted a large improvement in the
country’s Global Retail Development Index (GRDI).
9) India is one of the fastest-growing markets and has one of the youngest populations in the
world.
10) Brazil is characterized by strong upper and lower classes, but the middle class has declined
in recent years.
11) Russia lags behind most European countries in use of the Internet.
12) Global expansion often begins when a firm receives an order for its product from another
country.
13) Exporting refers to a situation where a company maintains ownership of its plants,
operational facilities, and offices in a foreign country in which it sells its products.
14) In a joint venture, the burden of ownership, control, and profits falls on the market entry
firm.
15) Entering into a global franchise agreement exposes a company to higher risk than if the
company had entered into direct investment in the country.
16) There is only one global product strategy: to sell a product or service similar to that sold in
the home country, but include minor adaptations.
17) An effective global pricing strategy can be easily established by setting the same prices in
every market around the world.
18) Glocalization refers to a global marketing strategy in which each of the four Ps is customized
for each country.
19) Companies that engage in global marketing must continually monitor economic and social
trends to protect their position within the market and adjust products and marketing strategies to
meet the changing needs of global markets.
20) In parts of Europe, including Belgium, Italy, Spain, Greece, and France, sales are allowed
only twice a year, in January and June or July.
21) Firms with global appeal can run global advertising campaigns and simply translate the
wording in the advertisements and product labeling.
22) Global distribution networks that involve middlemen, exporters, importers, and different
transportation systems generally lower costs and prices for products.
23) Sophia owns a string of boutiques in Italy. As such she is allowed to have sales only twice a
year, in January and June or July.
24) A consumer products company produces inexpensive goods in underdeveloped markets, then
repackages them as cost-effective innovations for Western buyers. This is an example of
glocalization.
25) Direct investment offers the firm complete control over its operations in the foreign country.
26) Globalization refers to the processes by which goods, services, capital, people, information,
and ideas
A) are onshored and offshored.
B) flow across national borders.
C) are integrated through IMF facilitation.
D) are similar in various markets.
E) affect corporate culture.
27) The components of global market assessment include all of the following except
A) ethnic analysis.
B) infrastructure and technological analysis.
C) analysis of government actions.
D) sociocultural analysis.
E) economic analysis.
28) Chris is gathering information about the general economic environment in Nepal. In doing
so, he will look for information about the general economic environment, market size and
population growth rate, and
A) culture.
B) real income.
C) airport capabilities.
D) political status.
E) religious institutions.
29) To determine the market potential for its particular product or service, a firm should use
A) GDP data.
B) unemployment data.
C) purchasing power parity data.
D) inflation data.
E) as many metrics as it can obtain.
30) Manufacturers would prefer to produce in a country with a trade ________, because it
signals a greater opportunity to export products to more markets.
A) surplus
B) deficit
C) discrepancy
D) bonus
E) balance
31) The most common measure of market potential of an economy is a country’s
A) GNI.
B) GDP.
C) PPP.
D) CPI.
E) APR.
32) GDP is defined as
A) the value of a country’s exports minus its imports.
B) the difference between two country’s exchange rates.
C) the market value of goods and services produced in a country in a year.
D) national income minus national taxes.
E) the gross purchasing power of domestic goods and services plus international income.
33) Gross national income consists of GDP
A) minus net consumer spending.
B) plus government spending on international trade.
C) minus purchasing power parity.
D) plus the net income earned from investments abroad (minus any payments made to
nonresidents who contribute to the domestic economy).
E) plus gross domestic international investment.
34) The Big Mac Index is a novel measure of
A) GDP.
B) purchasing power parity.
C) per capita GNI.
D) economic growth.
E) international trade surplus.
35) According to purchasing power parity theory, if ________ is(are) in equilibrium, products
will cost the same in each country.
A) imports and exports
B) consumer spending
C) interest rates
D) domestic products
E) exchange rates
36) Economic measures like GDP and GNI do not fully account for a country’s economic health
because they measure only
A) material output.
B) international trade.
C) global expectations.
D) purchasing power parity.
E) poverty potential.
37) Today, many developed countries are experiencing ________ population growth.
A) slight
B) zero or negative
C) rapid
D) moderate
E) significant
38) Cory is working on a global marketing assessment team looking out well into the future to
help determine the most attractive market areas around the world. He is evaluating market sizes
and growth rates. Based on population growth rates in different regions, he should consider that
A) countries with high purchasing power today may not continue to show the same growth in the
future.
B) the United States and Western Europe will have dramatic increases in population growth
leading to overcrowding.
C) the middle class in India will continue to shrink as the rich get richer and the poor get poorer.
D) in places like India, urban population centers will become increasing unattractive and the
rural areas will experience major growth in population.
E) the global population is expected to grow at staggering rates indefinitely.
39) How has the population shift from rural to urban areas in India impacted the supply chain?
A) It has decreased the supply chain’s carbon footprint and reduced pollution throughout.
B) It has reduced the number of hands that products must pass through to reach the rural
populations.
C) It has increased the human development index.
D) It has increased competition for intellectual capital.
E) It has increased nonmaterial GDP output.
40) When considering global marketing opportunities in Bangladesh, Tom asked the question,
“How will we get it there?” Tom is concerned about ________ capabilities in Bangladesh.
A) production capacity
B) pricing
C) advertising
D) infrastructure
E) cultural
41) As part of efforts to stimulate economic development in Africa, the Gates Foundation
announced that it would provide cellular phones to farmer cooperatives. The Gates Foundation
recognized that problems in ________ exist in many African markets.
A) transportation
B) communication
C) distribution
D) commerce
E) population
42) When Ben evaluated the commercial infrastructure in Mauritius, he considered the island’s
A) population control measures.
B) legal, banking, and regulatory systems.
C) retailing capabilities.
D) per capita income estimates.
E) climate and culture.
43) Changes in tariffs and quotas are
A) business actions stimulating imports.
B) corporate strategies designed to maximize profits.
C) government actions that reduce competition from international firms.
D) efforts to stimulate choices among government agencies.
E) a means of slowing outsourcing.
44) Tariffs protect domestic producers by
A) making imported products more expensive.
B) increasing brand recognition.
C) reducing the cost of production.
D) offering subsidies to exports.
E) avoiding regulation.
45) In most cases, countries use tariffs to reduce foreign competition, but tariffs are also used
A) to shorten supply chains.
B) as a response to perceived unfair trade practices.
C) to offer domestic discounts.
D) to stimulate consumer demand.
E) as a way to equalize quotas.
46) A ________ limits the quantity of imported merchandise, thus minimizing competition faced
by domestic products.
A) tariff
B) duty
C) trading bloc
D) trade agreement
E) quota
47) When the U.S. government determined the prices of solar panels imported from China were
artificially low due to illegal subsidies, it imposed a ________ to help domestic firms compete.
A) comparative inflation rate
B) countertrade exchange
C) quota
D) tariff
E) currency exchange rate
48) When the value of the dollar declines in relation to other currencies, it benefits U.S.
marketers who
A) export goods to other countries.
B) import goods from other countries.
C) engage in countertrade.
D) enforce import quotas.
E) outsource labor.