49) All of the following are major trade agreements affecting global marketing except
A) NAFTA.
B) EU.
C) GNI.
D) ASEAN.
E) CAFTA.
50) Marketers contemplating operations and trade with a specific country must consider whether
or not the country belongs to a trading bloc. A trading bloc is a group of countries that have
A) established a formal agreement to manage trade activities.
B) agreed to use the same currency.
C) similar consumer purchasing patterns.
D) been segmented according to their geographic proximity.
E) been segmented based on shared cultural values.
51) Which of these trade agreements represents the highest level of integration among
participating nations?
A) NAFTA
B) EU
C) GNI
D) ASEAN
E) CAFTA
52) Global businesses often find it particularly difficult to understand the ________ of a
country’s culture.
A) symbols
B) underlying values
C) ceremonies
D) exhibited behavior
E) visible artifacts
53) Chris is trying to determine what went gone wrong with the campaign he had planned in
Latin America for his company’s product. He narrowed the issues down to sociocultural factors,
specifically
A) product uses and currency rates.
B) trade agreements and trading blocs.
C) potential tariffs and quotas.
D) visible artifacts and underlying values.
E) population distribution and logistics.
54) Geert Hofstede’s cultural dimensions concept focuses on five dimensions of ________ in a
country.
A) symbols
B) underlying values
C) buying patterns
D) personality
E) visible artifacts
55) All of the following are included in Hofstede’s cultural dimensions except
A) power distance.
B) certainty assurance.
C) masculinity.
D) individualism.
E) time orientation.
56) The marketers of an investment firm just developed a promotional campaign for a new
financial service. In a print ad intended for its Chinese market, a representative from the firm is
shown shaking hands with an Asian customer—a symbol that a business relationship based on
trust and honor has been established. To convey this same message to its U.S. market, the U.S.
print ad features a customer in an office formally signing a contract. Which of Hofstede’s cultural
dimensions accounts for this difference in the two ads?
A) power distance
B) indulgence
C) time orientation
D) uncertainty avoidance
E) individualism
57) Culture affects
A) how consumers decide to make their purchases.
B) what consumers decide to purchase.
C) when consumers decide to make their purchases.
D) where consumers decide to make their purchases.
E) every aspect of consumers’ purchase decisions.
58) Generally, firms entering foreign markets begin with
A) less risky strategies first.
B) direct investment.
C) importing.
D) decentralized production.
E) the riskiest, but most profitable endeavor.
59) When entering a foreign market, the least risky strategy is
A) franchising.
B) exporting.
C) joint venture.
D) direct investment.
E) strategic alliance.
60) Global expansion often begins with
A) franchising.
B) exporting of goods.
C) joint ventures.
D) direct investment.
E) strategic alliances.
61) Many of the best-known American retailers, like Starbucks and McDonald’s, have
contractual agreements with another firm or individuals, allowing its businesses to operate
overseas. These companies expanded globally using
A) franchising.
B) exporting.
C) joint ventures.
D) direct investment.
E) strategic alliances.
62) Gerald is assessing global entry strategies for his gourmet sandwich business. He does not
want to take a lot of risk and he is willing to limit his control of international stores. Gerald will
most likely use a(n) ________ strategy.
A) franchising
B) exporting
C) joint venture
D) direct investment
E) strategic alliance
63) Domestic firms developing a global entry strategy might consider franchising. Before
deciding on franchising as a strategy however, firms must understand the disadvantages. All of
the following are disadvantages of franchising except
A) the franchisor has limited control over the market operations in the foreign country.
B) the franchisee might end up becoming a competitor under a different name.
C) franchising limits profit potential for the parent firm.
D) franchising is the riskiest way to enter a foreign market.
E) the franchisor has to split the profits with the franchisee.
64) When a firm pools its resources with that of a local firm to enter a new market, they create
a(n)
A) franchise.
B) export promotion.
C) joint venture.
D) direct investment.
E) strategic alliance.
65) India, like some other countries, may require entering firms to create ________ when
expanding into their markets, limiting outsiders’ control of businesses.
A) franchises
B) export promotions
C) joint ventures
D) direct investments
E) strategic alliances
66) Of the five strategies for entering new markets, direct investment creates the
A) least investment cost.
B) greatest potential risk.
C) most franchisee control.
D) best opportunity for strong strategic alliances.
E) greatest coordination of efforts of global and local partners.
67) NCD Company wants to expand into the Mexican market. It has the financial resources,
wants to control business operations, and has had considerable success marketing to Hispanics in
the United States. NCD will likely use ________ to expand into the Mexican market.
A) franchising
B) exporting
C) a joint venture
D) direct investment
E) a strategic alliance
68) Global segmentation, targeting, and positioning (STP) are more complicated than local STP,
in part because
A) consumers may view their roles differently in different countries.
B) there are fewer franchising opportunities in global markets.
C) global consumer markets are almost totally homogeneous, making segmentation difficult.
D) most governments have rules against targeting consumers.
E) positioning almost always fails when attempted in a foreign country.
69) As noted in your text, global segmenting, targeting, and positioning are more complicated
than domestic segmenting and positioning because of cultural nuances, significant subcultures
within countries, and
A) currency differences.
B) antidiscrimination regulations prohibiting segmentation and targeting in developing countries.
C) differences in the way consumers see themselves and in the way they see products and
services.
D) complications due to franchising issues.
E) the taxes imposed by some foreign countries on marketing activities.
70) Cultural nuances, subcultures, and consumers’ different views of their roles in different
countries can make ________ complicated.
A) purchasing power parity
B) segmentation, targeting, and positioning
C) trading bloc coordination
D) exchange control planning
E) reducing trade surpluses
71) Which of the following statements regarding global segmentation, targeting, and positioning
is true?
A) Companies must continually adjust products and marketing strategies to meet the changing
needs of global markets.
B) Global segmentation, targeting, and positioning activities are far less complicated than the
same activities in the domestic market.
C) When developing a global STP strategy, it is best to define segments by geography alone.
D) Segmentation, targeting, and positioning activities for global markets do not differ
substantially from that of domestic markets.
E) The “golden rule” for global STP activities for firms is to never alter a firm’s marketing mix to
serve the needs of global markets.
72) Which of the following are the two components of a global marketing strategy?
A) understanding foreign currency fluctuations and developing products that can be priced
accordingly
B) determining which target markets to pursue and developing a marketing mix to obtain a
competitive advantage
C) understanding the supply chain and distribution networks in foreign markets
D) developing culturally appropriate advertising messages and cultivating “domestic” habits
among foreign consumers
E) adapting to foreign regulations and targeting as many people as possible
33
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73) The most important consideration when a firm chooses a global product strategy should be
A) opportunities for countertrade.
B) the effectiveness of the marketing team.
C) the needs of the target market.
D) the overall cost of the strategy.
E) WTO regulations.
74) Tariffs, quotas, and currency exchange policies affect global
A) offshore product design.
B) pricing strategies.
C) advertising.
D) logistics.
E) promotion.
75) Global pricing strategies should strive to be consistent with
A) offshore distribution facilities.
B) the cost of materials.
C) positioning strategies.
D) domestic pricing.
E) trade surplus guidelines.
76) Global marketers are under constant pressure to simplify distribution channels in order to
A) improve promotion efficiency.
B) reduce trade deficits.
C) afford tariffs.
D) meet trade agreement guidelines.
E) reduce costs.
77) Global marketers typically find distribution in developing countries is more complex because
A) they must go through many different types of distribution channels.
B) distribution is more heavily regulated in developing countries.
C) most consumers in developing countries live in densely populated cities.
D) the infrastructure is more advanced in most developing countries.
E) consumers in developing countries have very specific preferences.
78) Graham had developed an extremely successful advertising and promotion campaign for a
client in the United States. The client wanted to roll out the same campaign to markets
worldwide, but Graham cautioned against doing this, most likely because
A) differences in languages, customs, and culture might make the campaign meaningless and
ineffective in some markets.
ideas outside of the U.S. market.
C) he had not applied for or received international certification that was required for working
outside the United States.
D) he was unfamiliar with the code of ethics for advertising in other countries.
E) he did not have the budget for a global rollout.
79) Celia’s firm has developed a breakfast cereal and rather than compete in the U.S. market, she
has decided instead to introduce the product in Europe, where she feels it will be innovative. Her
advertising agency urged caution because
A) differences in language, customs, and culture complicate marketers’ ability to communicate
with customers in various countries.
B) print media are different in Europe, and it would be difficult to create a global campaign.
C) literacy rates are significantly lower in Europe, and print ads would be ineffective.
D) research indicates that Europeans do not eat breakfast as often as Americans.
E) domestic advertising agencies cannot earn commissions on advertising they place overseas.
80) Brand names can present a challenge for global marketers because of language differences.
Meaning gets lost in translation. To avoid committing language faux pas with brand names,
companies should
A) keep the brand name the same in all languages, regardless of meanings, as long as the brand
logo and symbol are displayed prominently.
B) avoid the use of the brand name in advertising and focus on features and benefits.
C) translate advertising copy for the entire ad except for the brand name.
D) develop brand names that have no preexisting meaning in any known language.
E) adhere to the UN Convention on Naming Rights.
81) Which of the following is one of the global entry strategies?
A) direct investment
B) countertrade
C) offshoring
D) infrastructure development
E) trade agreements
82) When a company decides to minimize risk and enter a global market by shipping its products
to buyers in other countries, this is known as
A) exporting.
B) franchising.
C) a strategic alliance.
D) a joint venture.
E) direct investment.
83) Which of the following best describes the direct investment global entry strategy?
A) With direct investment, a firm maintains total ownership of its plants, operation facilities, and
offices in a foreign country.
B) Direct investment occurs when a firm enters a new market by pooling its resources with those
of a local firm to form a new company in which ownership, control, and profits are shared.
C) Direct investment refers to depositing payroll funds in a foreign bank.
D) Direct investment designates the maximum quantity of a product that may be brought into a
country during a specified time period.
E) Direct investment occurs when a producer sells its offering in a foreign market at a price less
than its production cost.
84) The term trade deficit refers to
A) a country that exports more goods than it imports.
B) an indicator of the quality of life in a country.
C) a level of population growth that impacts exports.
D) the sum of all goods and services handled in a country.
E) higher levels of imports than exports.
85) When shopping for a car you notice a significant price gap between domestic and imported
cars, with the imported cars being much more expensive. This could be the result of
A) a tariff.
B) a boycott.
C) overseas consolidation.
D) globalization.
E) franchising.
86) When entering into a franchise agreement, the term ________ refers to the firm that is
granted the right to operate a business using the franchise name and business concept.
A) franchisee
B) franchisor
C) franchise agent
D) franchise partner
E) franchised owner
87) Which of the following statements best describes global expansion through a strategic
alliance?
A) In a strategic alliance, a firm enters a new market and forms a new company with shared
ownership, profits, and controls.
B) A strategic alliance is a relationship in which two firms collaborate on a business opportunity,
but do not invest in each other.
C) In a strategic alliance, two firms enter into a franchise agreement.
D) In a strategic alliance, a firm in one country sends products to a firm in another country.
E) In a strategic alliance, a firm signs a trade agreement with a firm in another country.
88) The XYZ Company is collaborating with a competitor on a globally based opportunity for
mutual benefit, but the two competitors are not investing in one another. This is an example of
A) franchising.
B) a joint venture.
C) a strategic alliance.
D) a direct investment.
E) an equity partnership.