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b. EU
c. APEC
d. ASEAN
126. Maquiladoras are
a. exchange controls from central banks in Latin American countries.
b. production facilities in north-central Mexican states.
c. import-export agents of the Mexican government.
d. global marketing programs established in Latin American countries.
e. freight forwarders from Mexico.
127. Brand name, product characteristics, packaging, and labeling are some of the ______________ marketing mix
variables to standardize for international markets.
a. most difficult
b. most urgent
c. easiest
d. most expensive
e. most culturally sensitive
128. When the makers of Red Bull, an energy drink, decided to go international with their marketing effort, a global
approach was adopted. With which of the following factors did Red Bull most likely experience difficulty as the firm
applied a global strategy for marketing?
a. Branding
b. Product characteristics
c. Packaging
d. Labeling
e. Advertising
129. If a certain country considered handshakes in business transactions to be taboo and preferred to use nodding, this
would be an example of differences in ____ forces.
a. sociocultural
b. political
c. sales
d. ethical
e. regulatory
130. Many marketers claim that ____ will become the world’s largest market.
a. Japan
b. the United States
c. China
d. Thailand
e. India
131. IKEA, a Swedish retailer of contemporary furniture, operates several stores in various Scandinavian countries, as
well as in the United States and Canada. Which of the following describes IKEA’s level of commitment to international
marketing?
a. Licensing
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b. Direct ownership
c. Exporting
d. A trading company
e. A joint venture
132. How does using an exporting intermediary limit the risk involved with global marketing?
a. Most exporting intermediaries assume all financial risks on behalf of their clients.
b. Exporting intermediaries are not subject to the same laws as companies, and therefore limit the legal risk
involved.
c. Using an exporting intermediary restricts a company to being involved with joint ventures and not direct
ownership.
d. Exporting intermediaries guarantee that the products a company is selling will be a good fit for the foreign
markets they are entering.
e. This approach involves limited risk because the company has no direct investment in the foreign country.
133. Which of the following describes a company hiring a foreign firm to produce a designated volume of its product to
specification?
a. Licensing
b. Contract manufacturing
c. Exporting
d. Importing
e. Direct investment
134. Tim Baker is an account representative from the United States for an automotive parts supplier and is meeting with a
client team in Japan. This is Tim’s first trip to Japan, and unfortunately, he wasn’t able to review any information about
“doing business in Japan” before he left the States. His first meeting with representatives from the prospective client’s
firm is a dinner and he is immediately surprised at the formality of the event. All of his counterparts are dressed very
formally and no one is addressing him by his first name but is referring to him as Mr. Baker. In addition, the members of
the client team seem to be waiting on their supervisor to make the first move and Tim is beginning to realize that age and
seniority are very important to the team members. Tim is growing a little concerned that he may not be successful in
business since he feels like a fish out of water. Which environmental force has the sales representative encountered?
a. sociocultural
b. economic
c. technological
d. competitive
135. Walmart is currently expanding its stores into Canada and Mexico. This expansion is being facilitated by the
a. European Union.
b. North American Free Trade Agreement.
c. Pacific Rim Unification Act.
d. International Retail Alliance Association.
e. Latin American Free Trade Association.
136. The role of export agents is to
a. bring buyers and sellers from different countries together and collect a commission for arranging sales.
b. purchase products from different companies and sell them to foreign countries.
c. help a firm to make direct investments in foreign countries.
d. contact domestic firms about the opportunities available in exporting.
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e. arrange for licensing agreements between domestic and foreign firms.
137. The purchase of products from a foreign source is called
a. exporting.
b. dumping.
c. importing.
d. licensing.
e. venturing.
138. Toshiba Electronics is very interested in taking advantage of business opportunities in India but does not have access
to India’s market. Toshiba has the patent on a low-cost, quality computer system that could assist small businesses in
India. Sony Computer, Toshiba’s competitor, is experienced in India’s small business market but does not have a computer
comparable to Toshiba’s. If Toshiba and Sony work together to utilize these strengths to seize this opportunity in India,
what type of business structure would they likely use?
a. Trading company
b. Strategic alliance
c. Licensing
d. Direct ownership
e. Exporting
139. A subsidiary in a foreign country generally operates under
a. the laws of the parent company’s home country.
b. foreign management in order to develop a local identity.
c. strict management control from the home country’s executives.
d. the regulations set forth by the International Trade Agreement.
e. a team of managers from the distant parent company.
Scenario 8.2
Use the following to answer the questions.
KFC opened its first franchised restaurant outside of North America in England in 1964. Now, over a billion KFC chicken
dinners are sold annually at more than 80 countries and territories around the world. KFC has established its own
processing plants in these countries to ensure the quality of its chickens and other food items. In the U.S., the menu at
KFC is usually the same in all restaurants, with only a very few additional items available in different regions. However,
when KFC first franchised into Asian countries, it added many unusual local delicacies to the menu items such as fried
octopus and squid. Additionally, the franchised stores in Asian countries display cooked food in “plates” near windows at
the front of the store. This is a tradition for many restaurants in these countries to offer the customer passing by a
preliminary view of their product.
140. Refer to Scenario 8.2. KFC’s establishment of international production/processing facilities is an example of
a. direct ownership.
b. franchising.
c. strategic alliance.
d. outsourcing.
e. a trading company.
141. Henderson Synthetics is a producer of chemical products aimed at increasing agricultural yield per acre. Henderson
Synthetics’ management believes that several of the firm’s products could have sizable markets in other countries,
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however, it is costly to obtain market research to confirm this. If Henderson Synthetics wanted to temporarily “try out”
these international markets with a minimal level of commitment and cost, it should use
a. contract manufacturing.
b. exporting.
c. joint ventures.
d. licensing.
e. subsidiaries.
142. Once a company makes a long-term commitment to a foreign market that has a promising political and economic
environment, which of the following options then emerges as a possibility?
a. Exporting
b. Joint venture
c. Limited exporting
d. Direct ownership
e. Licensing
143. Both Nike and Adidas standardize many of their shoe models and colors worldwide, which is an example of
_______.
a. globalization.
b. customization.
c. nationalization.
d. culturalization.
e. internationalization.
144. A(n) ____ is an organization that links buyers and sellers in different countries but is not involved in manufacturing.
a. trading company
b. exporter
c. joint venture
d. strategic alliance
e. licensee
Scenario 8.1
Use the following to answer the questions.
Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a large number of its
bikes sold in markets all around the world, it still retains the manufacturing close to the headquarters for several reasons,
one being that its management wants to keep close watch on the quality of its products. However, for all the accessories,
apparel, and other riding gear, Harley-Davidson contracts out to other manufacturers to produce the items with the Harley
name and logo. Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley
Owners’ Group (HOG) have been complaining to the company about this practice, citing that “everything Harley should
be made in America”.
145. Refer to Scenario 8.1. If Harley-Davidson were to suddenly find its inventory building up in Japan, it might reduce
inventory by selling the bikes at below cost prices. This practice is known as
a. price skimming.
b. market penetration.
c. dumping.
d. differential pricing.
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e. inventory compensation.
146. Special interest groups and regulatory bodies are ____ forces that must be taken into account in international
marketing.
a. socioeconomic
b. technological
c. economic
d. social and ethical
e. political and legal
147. One of the effects of NAFTA is the simplification of country-of-origin rules. This will likely hinder the international
trade activities of
a. Canada.
b. Japan.
c. Brazil.
d. Cuba.
e. Panama.
148. Organizations that employ standardized products, promotion campaigns, and prices for all markets are practicing
what is known as
a. customization.
b. internationalization.
c. globalization.
d. regionalization.
e. nationalization.
149. Which of the following is not true of NAFTA?
a. The agreement has a long adjustment phase-in time period.
b. Increased competition should lead to a more efficient market.
c. It will provide additional opportunities for the United States in long-term affiliations with other countries in the
Western hemisphere.
d. Provides protection for intellectual property among its members.
e. Business licensing requirements have been increased.
150. Which of the following is used to help maintain a more favorable balance of trade by a country?
a. Limiting imports
b. Limiting exports
c. Establishing exchange controls
d. Increasing gross domestic product
e. Changing political systems
151. Tony & Guy is a global hairdressing and education business headquartered in England. It has recently opened salons
in Mongolia, adding to its numerous salons worldwide. Tony & Guy allows foreign businesspeople to use its name, logo,
methods of operation, advertising, and products. In exchange, Tony & Guy receives a financial commitment and an
agreement to conduct business in accordance with its standard of operations. Tony & Guy is engaging in
a. contract manufacturing.
b. wholesaling.
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c. franchising.
d. exporting.
e. direct investment.
152. In many developing countries around the world, technology is enabling opportunities to “leapfrog” existing
technology. What does this mean?
a. These countries are able to forgo current technological advances in order to wait for even better technology to be
developed.
b. More advanced technology is reaching these countries even though they lack technological infrastructures.
c. Technological advances are often offered at prices considerably lower than in well-developed countries.
d. The technology in developing countries is rapidly surpassing the technology in well-developed countries.
e. The existing technological infrastructures in these countries are rapidly being replaced by newer, more advanced
technology.
153. The ____ is the difference in value between a nation’s exports and its imports.
a. net trade value
b. export/import ratio
c. gross domestic product
d. balance of payments
e. balance of trade
154. Japan’s Sony Corporation is a prime example of a multinational enterprise. With this in mind, which of the following
would most accurately characterize Sony’s operations?
a. It follows a strategy of market globalization.
b. It has operations or subsidiaries in many different countries.
c. It places most of its emphasis on profits generated in foreign countries.
d. It would not expect its foreign operations to share the same goals as the parent firm.
e. It does not concern itself with differences in markets around the world.
155. Caterpillar, maker of large construction equipment in the U.S., would like to better understand factors that would
affect its ability to export its products to various countries. Which of the following forces determine how trade barriers
affect Caterpillar’s marketing efforts?
a. Political and legal
b. Economic
c. Industrial and Technological
d. Technological and Legal
e. Economic and political
Scenario 8.1
Use the following to answer the questions.
Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a large number of its
bikes sold in markets all around the world, it still retains the manufacturing close to the headquarters for several reasons,
one being that its management wants to keep close watch on the quality of its products. However, for all the accessories,
apparel, and other riding gear, Harley-Davidson contracts out to other manufacturers to produce the items with the Harley
name and logo. Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley
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Owners’ Group (HOG) have been complaining to the company about this practice, citing that “everything Harley should
be made in America”.
156. Refer to Scenario 8.1. One of Harley-Davidson’s largest international markets is in Japan, where American brands are
highly sought after. This is an example of ____ impacting the market.
a. international forces
b. economic forces
c. domestic forces
d. cultural forces
e. environmental forces
157. Which of the following lists the levels of involvement in global marketing from the lowest to the highest?
a. Regional marketing, multinational marketing, limited exporting, domestic marketing, globalized marketing
b. Limited exporting, domestic marketing, globalized marketing, multinational marketing, regional marketing
c. Globalized marketing, multinational marketing, regional marketing, limited exporting, domestic marketing
d. Domestic marketing, globalized marketing, regional marketing, multinational marketing, limited exporting
e. Domestic marketing, limited exporting, multinational marketing, regional marketing, globalized marketing
158. Sebastian Motors is a family-owned car dealership with two locations in central France. The car dealership markets
BMW and Mini Coopers and provides servicing. Recently, Sebastian Motors has been impacted by the economic climate
in the ________ which has suffered recently due to a weakening of the currency and the poor financial conditions of
several member countries including Portugal, Italy, Greece, and Spain—affectionately known as the PIGS of the Common
Market.
a. European Union
b. Northern European Commonwealth
c. Southern Hemisphere
d. United Kingdom
159. All of the following European countries use a common currency, the _____, except for _____, which uses its own
currency.
a. euro; France
b. euro; England
c. dollar; England
d. euro; Germany
e. euro; Austria
160. The World Trade Organization accomplishes all of the following except
a. educating companies about international trade rules.
b. lending money to businesses interested in developing international markets.
c. serving as a forum for trade negotiations.
d. helping settle trade disputes.
e. providing legal ground rules for international commerce.
161. What level of commitment in international marketing may be most attractive when the political and economic
stability of a foreign country is questionable?
a. Joint ventures
b. Direct ownership
c. Exporting
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d. Limited exporting
e. Licensing
162. Which of the following would be a benefit to a franchiser, such as Jiffy Lube, in expanding into international
marketing?
a. There are no risks involved with allowing a foreign franchisee.
b. The franchiser does not have to put up a large capital investment.
c. The franchiser does not have to share its name or operational procedures.
d. The franchisee only pays a set fee every month to the franchiser.
e. An equal partnership is formed between the franchiser and franchisee.
163. Ikea has opened stores in Beijing and Shanghai and hopes to capitalize on China’s growing consumer economy since
the potential of China’s consumer market is so vast that it is almost impossible to measure. Ikea and other global retailing
giants operating in China are beneficiaries of the _____ which was established in 1989 to promote open trade and
economic and technical cooperation among member nations. In addition, they are allowed to participate in a wide range of
organization activities and have become increasingly competitive regarding global business.
a. APEC
b. EU
c. NAFTA
d. ASEAN
164. Selling products that are not in demand in all world markets, such as hand-powered washing machines for use in
countries where electricity is not universally available, represents an international marketing strategy focusing on
a. internationalization.
b. culturalization.
c. nationalization.
d. globalization.
e. customization.
165. ____ refers to the idea that morality varies from one culture to another and that business practices are therefore
differentially defined as right or wrong by particular cultures.
a. The self-reference criterion
b. Global ethics
c. Economic relativism
d. Cultural relativism
e. Moral relativism
166. Mitsubishi Motors, based in Japan, operates several ________ as part of its global footprint where it has centralized
the responsibility of international operations such as human resources, sales, and production into one unit that serves as
the central point for all information flows related to the international operations. The company maintains these offices in
Africa, Asia, Europe, Latin America, Middle East, North America, and Oceania.
a. international divisions
b. export departments
c. outsourcing units
d. trading companies
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167. Which of the following agreements provides a forum for tariff negotiations, reducing trade restrictions, resolution of
international trade problems, and ground rules for international trade?
a. The World Trade Organization
b. The North American Free Trade Agreement
c. The Latin American Free Trade Agreement
d. The European Union Free Trade Agreement
e. The General Agreement on Tariffs and Trade
168. Italy currently limits the number of Coach bags that can be imported during a one-year period, since Coach bags are
made in New York, USA. This is an example of a(an) ____
a. exchange control limit.
b. embargo.
c. quota.
d. import tariff.
e. supply limit.
169. The country with the highest GDP is
a. Japan.
b. the United Kingdom.
c. Brazil.
d. the United States.
e. China.
170. Which of the following is most likely to engage in direct ownership activities internationally?
a. Internationally integrated structures
b. International division structures
c. Export department structures
d. Import department structures
e. Outsourcing structures
171. When a firm’s products sell in foreign countries with little or no effort to obtain foreign sales, the firm is engaging in
a. international marketing.
b. global marketing.
c. limited exporting.
d. product licensing.
e. unplanned exporting.
172. Before the 1990s, most firms entered international markets
a. globally and quickly.
b. incrementally and slowly.
c. incrementally and quickly.
d. domestically and slowly.
e. regionally and quickly.
173. In what ways can a nation restrict the flow of imported goods?
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174. How do globalized marketing strategies differ from customized marketing strategies? What are the implications of
each for marketing managers?
175. Explain why the modes of entry into an international market are a major issue for managers to consider.
176. In what ways can businesses become involved in international marketing activities?
177. What marketing and ethical problems can bribes create in international marketing transactions?
178. What effects are technological forces having on international marketing? What opportunities exist in the global
marketplace that marketers can exploit with regard to technology?
179. Describe the sociocultural forces that affect international marketing strategy.
180. Describe how economic and competitive forces affect international marketing strategies.
181. What effect is NAFTA having on the international trade of the following countries: United States, Canada, and
Mexico?
182. Describe the difficulties encountered in standardizing the marketing mix globally.
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Answer Key
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