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61) Demographic characteristics, geographic characteristics, economic factors, sociocultural
factors, and political and legal factors all help a company ________.
A) determine a market's potential
B) determine a country's degree of globalization
C) evaluate its marketing objectives
D) evaluate its value delivery network
E) determine a country's income distribution
62) If Azerbaijan imported wheat from Romania in exchange for crude oil, and Vietnam
exchanged rice for Philippine fertilizer and coconuts then these scenarios would be examples of
________.
A) cash transaction
B) compensation
C) buyback
D) blocked currency
E) barter
63) Which of the following is a demographic factor that a company should consider before
deciding to enter into a new country?
A) transportation structure
B) natural resources
C) political stability
D) languages
E) education
64) Nike inadvertently offended Chinese officials when it ran an ad featuring LeBron James
crushing a number of revered Chinese figures in a kung fu-themed television ad. As a result,
Nike had to release a formal apology. This is an example of the impact of ________ on
marketing strategy.
A) culture
B) political stability
C) level of industrialization
D) income distribution
E) monetary regulations
65) Which of the following is a sociocultural factor that a company should consider before
deciding to enter into a new country?
A) political stability
B) population density (urban vs. rural)
C) education
D) income distribution
E) consumer lifestyles, beliefs, and values
66) Which of the following would a defender of globalization most likely use as an example to
argue that concerns of Americanization are overblown and that globalization is indeed a two-
way street?
A) the view of McDonald's being a domestic brand in China
B) the growing popularity of coffee in China since the introduction of Starbucks
C) the growing number of IKEA furniture stores in the United States
D) the initial failure of Disneyland Paris
E) the anti-globalization protests aimed at KFC
67) Which of the following is a geographic factor that a company should consider before
deciding to enter into a new country?
A) climate
B) population size
C) GDP size and growth
D) government bureaucracy
E) business norms and approaches
68) Which of the following is the LEAST critical decision a company should make before
going abroad?
A) Can the company learn to understand buyer behavior of consumers in other countries?
B) Can the company offer competitively attractive products?
C) Can the company adapt to other countries' business cultures?
D) How many foreign nationals should the company employ?
E) Do the company's managers have the necessary international experience?
69) A company should make several important decisions before deciding which markets to
enter. These include all of the following EXCEPT ________.
A) how many countries it wants to enter
B) what volume of foreign sales it wants
C) how many different products it wants to offer in a specific country
D) what its international marketing objectives are
E) what its international marketing policies are
70) Market size, market growth, the cost of doing business, competitive advantage, and risk
level all help a company ________.
A) determine a market's potential
B) determine a country's degree of globalization
C) evaluate its marketing objectives
D) evaluate its value delivery network
E) determine a country's income distribution
Refer to the scenario below to answer the following question(s).
Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little
reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose
largest division engages in a licensing agreement with a German firm to produce women's
hosiery, managers at Selman & Saks wondered whether a company-wide global focus would be
more profitable after all.
Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Even after
seeing the benefits Wellman achieved with the licensing agreement, managers decided that
Selman & Saks would target the French market merely via exporting.
With the assistance of a domestic export department, Selman & Saks razors and hair trimmers
entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions
varied among numerous managers as to the cause of the failure. "Who knows the local market
better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe
we needed an alliance with a French firm, or a licensing agreement, before racing to get there."
71) What did Selman & Saks hope to gain by entering the French market?
A) access to new consumer markets
B) access to less expensive labor
C) access to less expensive materials
D) access to foreign investment incentives
E) the ability to offset domestic economic cycles
72) Foreign firms are expanding aggressively into new international markets, and home
markets are no longer as rich in opportunity.
73) Tariffs are limits on the amount of foreign imports that a country will accept in certain
product categories.
74) Nontariff trade barriers include restrictive product standards.
75) The World Trade Organization established the General Agreement on Tariffs and Trade,
which replaced the WTO in 1995 and now oversees the original WTO provisions.
76) The EU acts as an umbrella organization that oversees GATT and mediates global disputes.
77) Widespread adoption of the euro has decreased much of the currency risk associated with
doing business in Europe, making member countries with previously weak currencies more
attractive markets.
78) In 1994, the North American Free Trade Agreement (NAFTA) established a free trade zone
among the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala,
Honduras, and Nicaragua.
79) CAFTA-DR has eliminated all trade barriers and investment restrictions among the United
States, Canada, and Mexico.
80) UNASUR is the economic community of South American nations.
81) In a subsistence economy, fast growth in manufacturing results in rapid overall economic
growth.
82) Industrial economies are major importers of manufactured goods, services, and investment
funds.
83) The exchange of U.S. wheat for Russian vodka would be an example of barter.
84) As more developed markets stagnate and become increasingly competitive, many marketers
are now targeting growth opportunities in emerging markets.
85) Poor or emerging economies are unattractive markets for many kinds of goods.
86) The "bottom of the economic pyramid" has become an attractive target for many
companies.
87) Business norms vary from country to country. A company will likely be more successful in
expanding internationally if it understands cultural traditions, preferences, and behaviors in the
target countries.
88) Briefly explain why the European Union could be considered a threat to U.S. marketers that
want to do business in Europe.
89) Companies that go global confront several major risks. Describe three of these risks.
90) Compare and contrast a tariff and a quota.
91) Briefly explain why economic communities are formed.
92) Why is it important for companies to understand cultural differences and nuances before
entering a foreign country's market? Give two examples of cultural differences that would be
important for a company to know.
93) Describe the factors that might draw a company into the international arena.
94) Explain why some critics worry that American multinationals are causing countries around
the globe to lose their individual identities. Give an example of the "Americanizing" of the
world's cultures.
95) Many studies reveal that instead of "Americanizing" the world's cultures, the cultural
exchange between America and other countries goes two ways. Give two examples of how
America has been influenced culturally by foreign products or services.
96) Name two of the five indicators of market potential and provide an example of each.
97) Describe the purpose, roles, and achievements of GATT and the WTO.
98) Describe the political-legal factors that a company should consider before deciding to
conduct business in a foreign country.
99) Compare the three different types of industrial structures.
100) Discuss the international marketing objectives and policies a company should try to define
before going abroad.
101) Members of management at Growing Green, a company that markets organic and
environmentally friendly gardening and landscaping supplies and equipment, are evaluating the
benefits and disadvantages of indirect exporting, direct exporting, and licensing. In which stage
of the international marketing process is Growing Green?
A) deciding on the global advertising strategy
B) deciding which markets to enter
C) deciding how to enter the market
D) deciding on the global marketing program
E) deciding on the global marketing organization
102) The simplest way to enter a foreign market is through ________.
A) joint venturing
B) direct investment
C) exporting
D) joint ownership
E) contract manufacturing
103) When entering a foreign market, companies typically start with ________, working
through independent intermediaries to sell products produced in the home country.
A) direct exporting
B) embargo
C) product adaptation
D) indirect exporting
E) licensing
104) Which of the following characterizes indirect exporting?
A) It requires more investment than joint venturing.
B) It requires an overseas marketing organization or network.
C) It involves less risk and investment than other entry methods.
D) The potential returns are greater than direct exporting.
E) It involves joining with foreign companies to produce or market products or services.
105) In the case of ________ exporting, sellers handle their own exports.
A) direct
B) licensed
C) indirect
D) countervailing
E) multilateral
106) Think Ink is a growing company that sells a variety of inks for home and business
printers. Management at Think Ink has decided to open a sales branch overseas to handle sales
and distribution abroad. Think Ink is engaging in ________.
A) indirect exporting
B) direct exporting
C) licensing
D) joint ownership
E) management contracting
107) Working with foreign companies to produce or market products or services is known as
________.
A) direct export
B) global distribution
C) direct investment
D) joint venturing
E) indirect export
108) Which of the following is a type of joint venturing?
A) trade embargo
B) licensing
C) direct investment
D) direct exporting
E) indirect exporting
109) Which of the following is NOT a type of joint venturing?
A) joint ownership
B) management contracting
C) direct export
D) licensing
E) contract manufacturing
110) Through ________, an organization in the foreign market buys the right to use a
company's manufacturing process, trademark, patent, trade secret, or other item of value.
A) indirect exporting
B) licensing
C) contract manufacturing
D) management contracting
E) joint ownership
111) In Japan, Budweiser beer flows from Kirin breweries, and Moringa Milk Company
produces Sunkist fruit juice. These are examples of ________.
A) contract manufacturing
B) management contracting
C) licensing
D) joint venturing
E) direct investment
112) An advantage of licensing to a company is that it ________, while the licensee gains
production expertise or a well-known product without having to start from scratch.
A) does not maintain the same level of control over product quality
B) must send employees to work with the licensee in training, selling, and distribution
C) might create a competitor
D) gains entry to a foreign market at little risk
E) requires significant financial investment
113) Sears opened up department stores in Mexico and Spain, where it found qualified local
manufacturers to produce many of the products it sells. This type of joint venture is known as
________.
A) joint ownership
B) licensing
C) management contracting
D) indirect exporting
E) contract manufacturing
114) Which of the following is true of contract manufacturing?
A) It provides a chance to start faster but with more risks.
B) It involves decreased control over the manufacturing process.
C) It leads to an increase in potential profits on manufacturing.
D) It is the simplest way to enter a foreign market.
E) It involves entering a foreign market by exporting surplus products.
115) Potential advantages of contract manufacturing include all of the following EXCEPT
________.
A) reducing plant investment
B) starting faster with less risk
C) providing a later opportunity to form a partnership with the local manufacturer
D) decreasing tariff costs while meeting the country's local manufacturing regulations
E) loss of potential profits on manufacturing
116) Hilton helps others run their hotels by providing the management know-how. This type of
joint venture is known as ________.
A) contract manufacturing
B) licensing
C) management contracting
D) joint ownership
E) direct investment
