Marketing Management, 3e (Marshall)
Chapter 2 Marketing Foundations: Global, Ethical, Sustainable
1) Businesses are not confined to a local market due to improved distribution, sophisticated
communication tools, product standardization, and the Internet.
2) Small companies have to invest a lot of money to go global.
3) When companies sell in other countries through limited direct contact or indirect
intermediaries, they always consider themselves to be involved in foreign marketing.
4) A company can do business with an international customer and still not engage in direct
foreign marketing.
5) The most significant difference between international and global marketing organizations is
management philosophy and corporate planning.
6) The first step in moving into global markets is to evaluate the market opportunities.
7) Global marketing research focuses on just three types of basic information: economic,
cultural, and political/legal.
8) Countries create regional market zones for mutual economic benefit through reduced trade
barriers and lower tariffs.
9) The European Union is the most successful regional market zone.
10) The economic output of the European Union (EU) is larger than that of the United States.
11) The most common foreign market entry strategy is licensing.
12) Licensing is a useful form of market entry when companies lack the resources to establish
independent operations in foreign markets.
13) Franchisees have a great deal of control in how they manage their businesses.
14) Direct foreign investment is the market entry strategy with the greatest long-term
implications.
15) Mr. Coffee had a good understanding of the Japanese culture when it introduced
coffeemakers that fit well in Japanese kitchens.
16) Nestlé embraces a local branding strategy globally while other companies like Coca-Cola
and Kellogg use a global branding strategy.
17) The country-of-origin effect is always positive in a customer’s perception.
18) The strategic objective of channel strategy known as “coverage” relates to how much the
global market distribution systems cost.
19) The global market advertising approach in which distinct ads are built around several
marketing messages, and local marketers select the ads that best fit their specific market
situation, is known as global marketing with local content.
20) Farah’s Fabrics Inc. prices its products for the global market by using cost plus markup to
arrive at a final price. This is known as cost-based pricing.
21) Engaging in ethical business practices generally has little impact on marketing strategy and
implementation.
22) Ethical issues related to product strategy begin with determining what markets should be
targeted.
23) The concept of sustainability includes all business practices that seek to balance business
success and societal success over the long term.
24) The triple bottom line metric is used for measuring the financial results of the company, but
does not take into account equity, economic or environmental considerations.
25) An understanding of marketing beyond home markets develops over time as a company gets
more international business experience. This process is referred to as the ________.
A) global acceptance curve
B) global learning continuum
C) international experience learning curve
D) global experience learning curve
E) international experience continuum
26) Firms that manufacture in a foreign market and maintain an extensive sales organization and
distribution network but have a “domestic first” mind-set are probably engaged in ________
marketing.
A) organic
B) buzz
C) international
D) viral
E) local
27) ________ is one of the most widely used measures of economic growth.
A) Return on investment
B) Break-even point
C) Gross domestic product
D) Six Sigma
E) Stock market index
28) Techel Electronics, a multinational company, manufactures its products in its home market,
but treats the world as a single market with many segments in it. It sold televisions worth $47
million in 2017 in international markets, which was more than half of its total revenue. In the
context of stages of global experience learning curve, the company is engaged in ________.
A) global marketing
B) no direct foreign marketing
C) global partnerships
D) foreign marketing
E) international marketing
29) Sam is flying to Rio de Janeiro, Brazil, to meet with a prospective customer. He wants to
learn the ethical standards, degree of formality, and gender biases of the country. Which of the
following types of information will help Sam to accomplish his task?
A) economic
B) demographic
C) business environment
D) political and legal
E) geography
30) John, the CEO of Tresnel Inc., learns that the government of one of his company’s foreign
markets has enacted a new law that limits the amount of profit it can make. He projects that this
will result in future losses. If John researches the ________ environment, he can plan a strategy
to deal with this situation.
A) economic
B) cultural and societal
C) business
D) political and legal
E) geographical
31) In Serovia, most people eat dinner after 10:00 p.m. This would be identified in the ________
section of a global market research report.
A) economic
B) cultural, societal
C) business environment
D) political, legal
E) history, geography
32) The color red means different things in different parts of the world. For example, in China, a
bride traditionally would wear red but not white. White is a symbol of death. This would be
identified in the ________ section of a global market research report.
A) economic
B) cultural, societal trends
C) business environment
D) political, legal
E) history, geography
33) Many countries base their court systems on those of former rulers. For example, the Spanish
ruled many South American countries; therefore, the court system is based on code or civil law.
This would be identified in the ________ section of a global market research report.
A) economic
B) cultural, societal
C) business environment
D) political, legal
E) history, geography
34) Data on consumer spending per capita or industrial purchasing trends would be identified in
the ________ section of a global market research report.
A) economic
B) cultural, societal
C) business environment
D) political, legal
E) history, geography
35) Cho, the international sales manager at a fashion house, is concerned that the euro is stronger
than the U.S. dollar. This would be identified in the ________ section of a global market
research report.
A) economic
B) cultural, societal
C) business environment
D) political, legal
E) history, geography
36) Phillippe needs to fire a manager of a French subsidiary of his company. He recently found
that French law makes it difficult to terminate employees. This would be identified in the
________ section of a global market research report.
A) economic
B) cultural, societal
C) business environment
D) political, legal
E) history, geography
37) ________ percent of the world’s economic growth in the next 20 years is predicted to come
from emerging markets, such as China and India.
A) 10
B) 35
C) 52
D) 75
E) 90
38) The fastest-growing economy in the world in 2017 was ________.
A) Sierra Leone
B) Afghanistan
C) Macau
D) China
E) Libya
39) Which of the following is NOT one of the forces that drives countries to form regional
market zones?
A) religious values
B) geographic proximity
C) economic
D) cultural similarities
E) political
40) MERCOSUR is a regional market zone in ________.
A) Asia
B) Africa
C) North America
D) The Mideast
E) South America
41) NAFTA is a market zone that eliminates tariffs between the United States and ________.
A) Canada, Mexico, and Costa Rica
B) Canada and Mexico
C) Mexico, Honduras, Nicaragua, Costa Rica, and Panama
D) Canada, Mexico, Costa Rica, and Panama
E) Canada, Costa Rica, and Panama
42) ________ is the most common method for entering foreign markets.
A) Direct foreign investment
B) Licensing
C) Franchising
D) Exporting
E) Joint ventures
43) ________ represent an exporting firm in a foreign market. They become the face of a
company through servicing customers, selling products, and receiving payment. They often take
title to the goods and resell them.
A) Brokers
B) Export agents
C) Distributors
D) Direct sales forces
E) Freight forwarders
44) A technology or high-end industrial product company is most likely to use a(n) ________ in
foreign markets because customers expect the expertise of highly-trained, accessible personnel.
A) broker
B) export agent
C) distributor
D) direct sales force
E) freight forwarder
45) Advantages to licensing as a market entry strategy include all of the following
EXCEPT________.
A) limited financial risk in the short run
B) easy availability of raw materials
C) services such as local distribution
D) decrease in operational costs
E) complete control of the patent
46) Which of the following is NOT an advantage of franchising as a market entry strategy?
A) local market knowledge
B) product consistency and easing of legal requirements
C) local management expertise
D) quality control is at the point of customer contact
E) economies of scale exist
47) The ________ industry best illustrates the power of strategic alliances.
A) automobile
B) telecommunications
C) airline
D) computer
E) video gaming