72. 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
d. Limited exporting
e. Licensing
73. A special form of licensing in which one company grants another company the right to market its product in
accordance with its standards in exchange for a financial commitment is known as _____.
a. a joint venture
b. contract manufacturing
c. direct licensing
d. franchising
e. a strategic alliance
Chapter 8 – Reaching Global Markets
74. 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. licensing
c. franchising
d. exporting
e. direct investment
75. Franchising offers all the following benefits for franchisers except:
a. franchise agreements require a certain standard of behavior from franchisees, which helps protect the
franchise name.
b. franchisers can retain control of their name while increasing global penetration of their products.
c. the franchisee’s revenue stream is fairly consistent because franchisers pay fixed fees and royalties.
d. the franchiser’s revenue stream is fairly consistent because franchisees pay fixed fees and royalties.
e. franchisers do not have to put up a large capital investment.
Chapter 8 – Reaching Global Markets
76. 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 pays a set fee every month to the franchiser.
e. An equal partnership is formed between the franchiser and franchisee.
77. 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
Chapter 8 – Reaching Global Markets
78. If The Limited Company relies on hiring a foreign textile manufacturer to produce a designated amount of clothing
for its Express, Limited, and other stores, it is using _____.
a. exporting
b. franchising
c. contract manufacturing
d. direct investment
e. licensing
79. Some hospitals in the United States find that their need for radiologists to read X-rays is volatile during the evening
and early morning hours, especially between 2:00 a.m. and 6:00 a.m. This is because the number of emergency
room visits needing X-rays is usually lower than those required during daytime operating hours. There is a recent
trend where hospitals in the United States are contracting radiologists from countries such as Australia to read the
electronically-transmitted X-rays during the evening and early morning hours. This is an example of _____.
a. outsourcing
b. licensing
c. franchising
d. contract manufacturing
e. offshoring
Chapter 8 – Reaching Global Markets
80. A business partnership between a domestic firm and a foreign firm is known as _____.
a. a joint venture
b. outsourcing
c. a multinational enterprise
d. licensing
e. exporting
81. The Cooper Tire & Rubber Company has been searching for less expensive raw materials for manufacturing its
bicycle tires. Cooper has found that there are less expensive sources in the country of Indonesia, but it needs to
form a partnership with the government of Indonesia in order to gain access to the country’s rubber. What type of
partnership will need to be formed?
a. A multinational enterprise
b. A contract manufacturing arrangement
c. A strategic alliance
d. A franchise
e. A joint venture
Chapter 8 – Reaching Global Markets
82. The Swatch Group is the parent company of the most successful wristwatch of all time, the Swatch.
Headquartered in Switzerland, The Swatch Group recently entered into a partnership with a company in France to
make the packaging materials for all of its Swatch lines. What type of partnership agreement does this situation
most likely represent?
a. Trading company
b. Licensing arrangement
c. Strategic alliance
d. Joint venture
e. Direct ownership arrangement
83. Sometimes business partnerships are formed between traditional rivals competing for market share in the same
product class. These partnerships are known as _____.
a. franchises
b. incorporations
c. joint ventures
d. strategic alliances
e. corporations
Chapter 8 – Reaching Global Markets
84. Nuhitzu believes it has the technological expertise to produce communication systems that will be leaders around
the globe. Boston Electronics is widely regarded as having excellent management systems and superior marketing
programs. To utilize these strengths, the two firms might form a(n) _____ to work together on a worldwide basis.
a. licensing agreement
b. export trading company
c. joint agreement
d. strategic alliance
e. multinational enterprise
85. Toshiba Electronics is 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, they would likely use the _____ type of a business structure.
a. trading company
b. strategic alliance
c. licensing
d. direct ownership
e. exporting
Chapter 8 – Reaching Global Markets
86. Which of the following is the primary distinction between a joint venture and a strategic alliance in international
marketing?
a. Strategic alliances are only formed between companies from well-developed countries whereas joint
ventures are between companies from economically-diverse countries.
b. A joint venture involves only two companies whereas a strategic alliance is formed between three or more
companies.
c. A strategic alliance is formed by companies who have traditionally been rivals, which is not the case with a
joint venture.
d. A joint venture is a partnership formed to create a competitive advantage on a worldwide basis whereas a
strategic alliance is a partnership between a domestic firm and a foreign firm or government.
e. A joint venture is simply a financial investment in a foreign firm while a strategic alliance involves more than
just financial support.
87. The Ford Motor Company has entered into an alliance with Yves Saint Laurent, a maker of clothing and one of the
most successful fashion houses in the world. Yves Saint Laurent is headquartered in France. Ford will use Yves
SaintLaurentdesignsandcolortraditionsinitsproductionofluxurymodelsofthecompany’sExpeditionSUVand
Lincoln vehicles. The Yves Saint Laurent elements will appear in the interior and body paint color. This alliance
would most likely be classified as a _____.
a. strategic alliance
b. franchise agreement
c. global direct ownership
d. multinational enterprise
e. trade contract
Chapter 8 – Reaching Global Markets
88. Which of the following options emerges as a possibility if a company makes a long-term commitment to a foreign
market that has a promising political and economic environment?
a. Exporting
b. Joint venture
c. Limited exporting
d. Direct ownership
e. Licensing
89. In relation to international marketing, which of the following best describes direct ownership?
a. A company owns its own manufacturing facilities.
b. A company forms an alliance with a similar company in a foreign country.
c. Foreign companies contract with manufacturers in other countries.
d. A company owns subsidiaries or facilities in foreign countries.
e. Two companies from different nations have interests in each other’s facilities.
Chapter 8 – Reaching Global Markets
90. 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
b. Direct ownership
c. Exporting
d. A trading company
e. A joint venture
91. Firms that have operations or subsidiaries located in many countries are referred to as _____.
a. multinational enterprises
b. strategic alliances
c. joint ventures
d. international marketers
e. export alliances
Chapter 8 – Reaching Global Markets
92. Southern Tier Industries has operations in more than 30 foreign countries. The headquarters in Atlanta controls the
entire organization while offering subsidiaries the freedom necessary to achieve success in local markets. Southern
Tier Industries is an example of a(n) _____.
a. strategic alliance
b. joint venture
c. export-driven corporation
d. multinational enterprise
e. trading company
93. The Samsung Group sells several different product lines around the world through home appliance and electronics
stores. Samsung appliances and electronics have been historically made in Korea, where the company is
headquartered. Recently, Samsung has been investigating the possibility of buying land and building a production
plant in Tennessee, in the United States. Which of the following is true about this scenario?
a. Samsung is now operating as an exporter; however, if the plant is built in Tennessee, it will be operating as a
strategic alliance.
b. Samsung is now operating as a limited exporter; however, if the plant is built in Tennessee, it will be
operating as a national marketer.
c. Samsung is now operating as a limited exporter; however, if the plant is built in Tennessee, it will be
operating as an international proprietor.
d. Samsung is now operating as an exporter; however, if the plant is built in Tennessee, it will be operating as a
multinational enterprise.
e. Samsung is now operating as an exporter; however, if the plant is built in Tennessee, it will be operating as a
global franchise.
Chapter 8 – Reaching Global Markets
94. 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 would be a wholly owned foreign subsidiary and would not be allowed to export products to the home
country.
b. It would have operations or subsidiaries in many different countries.
c. It would place most of its emphasis on profits generated in foreign countries.
d. Its foreign subsidiaries would not offer any tax, tariff, and other operating advantages.
e. It would not concern itself with differences in markets around the world.
95. Which of the following is the greatest advantage to an organization of having a subsidiary in a foreign nation?
a. Avoidance of all U.S. laws
b. Increase in cross-cultural approaches to management that allows subsidiaries to develop their own identity
c. Increased trend toward nationalistic marketing approaches
d. Greater amount of standardization of the marketing mix
e. Greater amount of security from government nationalization and other anticompetitive measures
Chapter 8 – Reaching Global Markets
96. A subsidiary in a foreign country generally operates under:
a. the laws of the parent company’s home country.
b. a 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.
97. Northeastern University and Penn State University both offer online MBA programs that are available to students
around the world. This is an example of _____.
a. globalization
b. customization
c. licensing
d. nationalization
e. regionalization
Chapter 8 – Reaching Global Markets
98. When asked where Laser Tools Inc., markets its products, company president and founder Roger Helms says that
“the world is just one big market.” He feels anyone not taking this stance is systematically passing up profitable
business. Helms’s international marketing strategy is best described as:
a. customization of marketing.
b. globalization of marketing.
c. limited exporting.
d. full-scale international marketing.
e. export agenting.
99. 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.
Chapter 8 – Reaching Global Markets
100. 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
101. 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
Chapter 8 – Reaching Global Markets
102. Levi Strauss markets its denim jeans in many countries and develops its marketing strategy as if the world were a
single market. This approach to selling a standardized product in all countries represents:
a. exporting.
b. accidental exporting.
c. limited exporting.
d. licensing.
e. globalization of markets.
103. Globalization of markets requires developing marketing strategies as if the world were one market. Which of the
following marketing mix variables is most difficult to standardize for globalization?
a. Brand name
b. Package
c. Media allocation
d. Labels
e. Product characteristics
Chapter 8 – Reaching Global Markets
104. SwissbasedNestléhastakenaglobalapproachtomarketingitschocolateproducts.Whichofthefollowingismost
easily standardized?
a. Product
b. Promotion
c. Distribution
d. Advertising
e. Price
105. 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
Chapter 8 – Reaching Global Markets