102. The pricing component of the global marketing mix is:
a.
the same in domestic and foreign markets
b.
fairly simplistic due to the strength of the U.S. dollar abroad
c.
the easiest element to implement successfully
d.
complicated by product penetration strategies
e.
a complex matter due to tariffs, exchange rates, and government regulations
103. Once marketing managers have determined a global product and promotion strategy, they can select
the remainder of the marketing mix. However, entry into many developing nations presents special
pricing problems because:
a.
the rate of capital accumulation exceeds the rate of population growth
b.
exchange rates caps
c.
of price discrimination
d.
there is a lack of mass purchasing power
e.
advertising time on television is available for sale in all developed countries
104. _____ is generally defined as the sale of an exported product at a price lower than that charged for the
same or a similar product in the home market of the exporter.
a.
Export reengineering
b.
Crossdocking
c.
Boycotting
d.
Dumping
e.
Countertrading
105. All of the following are reasons for dumping EXCEPT:
a.
lowering unit costs by exploiting large-scale productions
b.
attempting to avoid costly tariffs in the country to which the product is exported
c.
attempting to maintain stable prices during periods of exchange rate fluctuations
d.
temporarily distributing products in overseas markets to offset slack demand in the home
market
e.
trying to increase an overseas market share
106. The European Union accused South Korea of selling ships at a loss in an attempt to push its European
rivals out of the market. In other words, South Korea was accused of:
a.
dumping
b.
illegal importing
c.
countertrading
d.
fiscal impropriety
e.
using an illegal cartel
107. The Canadian magazine industry accused U.S. magazine publishers of _____, or selling the magazines
in Canada at a lower price than in the United States.
a.
dumping
b.
offloading
c.
boycotting
d.
repatriating
e.
crossdocking
108. In a newspaper release, Corning, Inc. announced it had received a favorable ruling from China’s
Ministry of Commerce on allegations that it was selling its fiber more cheaply in China than in other
countries. Corning was falsely accused of:
a.
dumping
b.
offloading
c.
boycotting
d.
repatriating
e.
crossdocking
109. International trade does not always involve cash. Sometimes companies accept all or part of the
payment for goods or services in the form of other goods or services. This is known as:
a.
export trading
b.
crossdocking
c.
exchange modification
d.
domestic barter
e.
countertrade
110. All of the following statements about the use of the Internet in global marketing are true EXCEPT:
a.
Opening an e-commerce site on the Internet immediately puts a company in the
international marketplace.
b.
The new Internet economy is being restrained by the old bricks-and-mortar rules,
regulations, and habits.
c.
Consumers in some countries are reluctant to use credit cards to make purchases over the
Internet.
d.
FedEx is a global shipper that helps solve international e-commerce distribution.
e.
Language barriers are limiting the potential of the Internet in international marketing.
CNS, Inc. is the manufacturer of Breathe Right nasal strips, a spring-loaded adhesive device that can
be stuck on your nose to open up the nasal passages. Since their introduction in the United States,
Breathe Right strips have been used by athletes hoping to improve their performance through
increased oxygen flow, snorers hoping for a sound night’s sleep, and allergy and cold sufferers looking
for relief from their stuffed noses. Because CNS is a small company, it initially had trouble promoting
its product. Then San Francisco 49er Jerry Rice started regularly wearing one, and U.S. sales took off.
Today, Breathe Right strips are marketed in more than 40 countries. When CNS decided to expand
globally, its size made it look for a partner. It chose 3M because 3M already had a global market
distribution system and because the Breathe Right strips complemented the 3M first-aid product line.
111. Refer to Breathe Right. 3M is an example of a(n):
a.
ethnocentric organization
b.
standard international market
c.
multinational corporation
d.
expatriated organization
e.
organization with no domestic base
112. Refer to Breathe Right. The same Breathe Right nasal strip you can buy in any pharmacy in the United
States can also be purchased in 40 other countries. CNS used a _____ strategy.
a.
mass marketing
b.
product invention
c.
market substitution
d.
product adaptation
e.
global market standardization
113. Refer to Breathe Right. How people value a sound night’s sleep is an example of which element of the
global environment?
a.
Culture
b.
Natural
c.
Socioeconomic
d.
Technical
e.
Regulatory
114. Refer to Breathe Right. In the United States, one of the standard methods for introducing a new
product is couponing, but many countries prohibit the issuing of coupons. This prohibition would
represent a(n) _____ element of the global environment.
a.
cultural
b.
economic
c.
legal
d.
technological
e.
demographic
115. Refer to Breathe Right. 3M and CNS entered into a:
a.
franchise
b.
licensing agreement
c.
direct countertrade
d.
joint venture
e.
contract manufacturing agreement
116. Refer to Breathe Right. To market the nasal strips in countries outside the United States, CNS and 3M
provided the strips to the national sports teams. For example, sales in South Africa took off when the
entire South African rugby team wore the strips when they won the World Cup of rugby. This example
primarily illustrates the use of which element of the global marketing mix?
a.
Production
b.
Publicity
c.
Promotion
d.
Distribution
e.
Product
The popular Kit Kat chocolate bar was created by Rowntree’s, a confectionary company in the United
Kingdom, in 1935. By the 1940s, Rowntree’s was exporting Kit Kats to Australia, New Zealand,
South Africa, and Canada. The brand further expanded in the 1970s when Rowntree created a new
distribution factory in Germany to meet European demand, and established agreements to distribute
the brand in the USA and Japan, through the Hershey and Fujiya companies respectively. In June
1988, Nestlé acquired Kit Kat through the purchase of Rowntree’s, giving Nestlé global control over
the brand—except in North America, where it is made under license by the Hershey Company.
Variants in the traditional chocolate bar began to appear in the mid-1990s and have continued to
develop ever since. Kit Kat Japan, in particular, has many unique flavors such as mango-flavored,
cucumber, and wasabi Kit Kats. Today, Nestlé produces Kit Kat bars are produced in 21 countries
and has expanded its marketplace in Japan, Russia, Turkey, and South America in addition to markets
throughout Europe.
117. Refer to Kit Kat. Nestlé has utilized a global vision in marketing Kit Kat bars throughout the world.
The company realizes different countries require different strategies but that effective global marketing
is a key to success. Nestlé is practicing:
a.
global marketing
b.
standard international marketing
c.
global marketing standardization
d.
the foreign vision
e.
international selling schemes
118. Refer to Kit Kat. The Kit Kat manufacturing facilities in Egypt, Ukraine, Bulgaria, and 18 different
countries are only small parts of the Nestlé organization. Nestlé can be called a(n):
a.
domestic trader
b.
cultural trader
c.
multinational corporation
d.
export agent
e.
localized corporation
119. Refer to Kit Kat. When Rowntree’s, the original manufacturer of Kit Kats, first decided to enter the
global market, the company used which method?
a.
direct investment
b.
a joint venture
c.
exporting
d.
market groupings
e.
a contract manufacturing agreement
120. Refer to Kit Kat. Which of the following statements about the relationship between Nestlé and The
Hershey Company is probably TRUE?
a.
Hershey is not allowed to market the bars as “Kit Kats” in North America.
b.
Hershey does not need to consult Nestlé if it wants to make a unique Kit Kat flavor.
c.
Hershey and Nestlé are in a joint venture together.
d.
Hershey pays Nestlé a fee for the privilege of producing Kit Kat bars.
e.
Nestlé has not given Hershey any proprietary knowledge about Kit Kat bars.
121. Refer to Kit Kat. Variants to the traditional chocolate Kit Kats are sold in various markets around the
world. In Japan, for example, you can purchase a cheese or lemon-vinegar Kit Kat. Which strategy is
Nestlé using?
a.
dumping
b.
product adaptation
c.
promotion adaptation
d.
countertrading
e.
distribution
Wataniya Mobile is offering cellular service in the Palestinian territories. It is only the second
cellphone carrier in the region and is significant because it is owned by foreign companies and
investors like the Qatari royal family and the Palestine Investment Fund. The new service is aimed at
increasing cellphone penetration, which is only 35%, in this economically challenged area. It has not
been easy for Wataniya, though. It took two years to gain the required license from Israel, which
controls the Palestinian territories’ airwaves and bandwidth required for the service. Even though
Wataniya is allowed bandwidth, it has only received 3.8 megahertz of bandwidth from Israel, which is
not enough for it to offer 3G mobile services that enable Web browsing and email.
122. Refer to Wataniya Mobile. In which stage of globalization is Wataniya Mobile?
a.
Stage one
b.
Stage two
c.
Stage three
d.
Stage four
e.
Stage five
123. Refer to Wataniya Mobile. Israel and the Palestinian territories have vastly different religious believes
and are frequently at war. The differences between these two are attributed to which environmental
factor?
a.
Technology
b.
Culture
c.
Demographics
d.
Economic
e.
Natural
124. Refer to Wataniya Mobile. The fact that many potential customers in Wataniya’s market cannot
afford a cellphone is part of which environment?
a.
Cultural
b.
Technological
c.
Economic
d.
Natural
e.
Legal
125. Refer to Wataniya Mobile. Israel’s control of licensing and the limitation on the amount of
bandwidth allotted to Wataniya Mobile is part of which environment?
a.
Cultural
b.
Economic
c.
Political and legal
d.
Demographic
e.
Resource
126. Refer to Wataniya Mobile. Wataniya Mobile has spent $100 million on infrastructure so far and will
spend another $700 million over the next ten years. This is an example of which method of entering
the global marketplace?
a.
Exporting
b.
Licensing
c.
Contract manufacturing
d.
Direct investment
e.
Complete
ESSAY
1. Why is developing a global vision important for firms in the United States?
2. Identify at least three negatives of global trade.
3. What is a multinational corporation (MNC)? Discuss two MNCs you are familiar with.
4. Describe the four stages of business globalization. Why do most companies stop when they reach the
third stage?
5. Traditionally, marketing-oriented multinational corporations have operated differently in each country,
with segmentation strategies that provided different marketing mixes. Today, there has been a trend
toward global marketing standardization. What is global marketing standardization? Can companies
truly follow the basic premise of the global marketing standardization concept?
6. Assume you are the president of a company that manufactures wooden bowls, cutting boards, and
spoons. Your company is considering marketing its kitchen items globally. List the five important
external environmental factors that should be examined for each country you are considering for this
global venture.
7. Global legal structures are designed to either encourage or limit trade. Name and define five of these
legal structures.
8. An important factor in the global external environment that has become more evident in the past
decade is the shortage of natural resources. Choose two different natural resources and describe how
shortages of each of these resources affect global trade.
9. Assume you are a global marketing consultant for a U.S. manufacturer of light fixtures and have been
asked to name the available options or methods of entry into the global marketplace. Name five
methods of entry in the order of high risk/high return to low risk/low return for the lighting company.
10. Define and describe exporting. Briefly describe the three types of export intermediaries.
11. Briefly define licensing and joint ventures as means of engaging in global marketing. Be sure to
demonstrate both the similarities of the two processes and how they differ.
12. Assume you are the marketing manager for a leading U.S. manufacturer of earth-moving equipment.
Your company would like to become heavily involved in global marketing (especially in India) but has
some capital limitations. Your job is to evaluate whether it should use contract manufacturing or direct
investment. Compare and contrast these two options and make a recommendation.
13. Assume you are the promotions manager for a lingerie company. Your company has decided to market
its product line in Brazil, Mexico, Italy, France, and Japan. Your company wishes to use a global
marketing standardization strategy. In general terms, explain how your company would advertise in
these different countries.
14. Often it is difficult for a firm to obtain adequate global distribution. Compare and contrast the
difficulties of distributing in Japan and India.
15. In the 1980s, Japanese computer chip manufacturers were accused of dumping in the United States.
Explain what this means and discuss why a company would do this.
16. Explain the following statement: “The Internet economy is being restrained by the old
bricks-and-mortar rules, regulations, and habits.”