Chapter 08
Test Bank
1. Firms would prefer to manufacture in a country that has a trade surplus, or a higher level of exports than imports.
2. The greater the wealth of a country, generally, the better the opportunity a firm will have in that particular country.
3. The Big Mac Index is a measure of economic health in a country.
4. Colin wants information about the infrastructure in the countries his company is planning to export to, so he should gather information about the
transportation and communications capabilities in each country.
5. Tariffs artificially lower prices and therefore lower demand.
6. Among the various international trade agreements, the North American Free Trade Agreement represents the highest level of integration across
individual nations.
7. The BRIC countries are Bolivia, Russia, Italy, and China.
8. Even as growth in its gross domestic product has slowed, China maintains a thriving retail market, likely to reach the $8 trillion mark soon and
surpass the United States as the world’s largest.
9. India is one of the fastest-growing markets and has one of the youngest populations in the world.
10. Brazil is characterized by strong upper and lower classes, but the middle class has declined in recent years.
11. Russia lags behind most European countries in use of the Internet.
12. Global expansion often begins when a firm receives an order for its product from another country.
13. Exporting refers to a situation where a company maintains ownership of its plants, operational facilities, and offices in a foreign country in which it
sells its products.
14. In a joint venture, the burden of ownership, control, and profits is not shared.
15. Entering into a global franchise agreement exposes a company to higher risk than if the company had entered into direct investment in the country.
16. There is only one global product strategy: to sell a product or service similar to that sold in the home country, but include minor adaptations.
17. An effective global pricing strategy can be easily established by setting the same prices in every market around the world.
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18. Glocalization refers to a global marketing strategy in which each of the four Ps is customized for each country.
19. To maximize potential, segments and target markets can and should be defined by more than just geography.
20. In parts of Europe, including Belgium, Italy, Spain, Greece, and France, sales are allowed only twice a year, in January and June or July.
21. Firms with global appeal can run global advertising campaigns and simply translate the wording in the advertisements and product labeling.
22. Global distribution networks that involve middlemen, exporters, importers, and different transportation systems generally lower costs and prices for
products.
23. Sophia owns a string of boutiques in Italy. As such she is allowed to have sales only twice a year, in January and June or July.
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24. A consumer products company produces inexpensive goods in underdeveloped markets, then repackages them as cost-effective innovations for
Western buyers. This is an example of glocalization.
25. Direct investment offers the firm complete control over its operations in the foreign country.
26. Globalization refers to the processes by which goods, services, capital, people, information, and ideas
27. The components of global market assessment include all of the following except
28. Chris is gathering information about the general economic environment in Nepal. In doing so, he will look for information about the general
economic environment, market size and population growth rate, and
29. To determine the market potential for its particular product or service, a firm should use
30. Manufacturers would prefer to produce in a country with a trade __________, because it signals a greater opportunity to export products to more
markets.
31. The most common measure of market potential of an economy is a country’s
32. GDP is defined as
33. Gross national income consists of GDP
34. The Big Mac Index is a novel measure of
35. According to purchasing power parity theory, if __________ is(are) in equilibrium, products will cost the same in each country.
36. Economic measures like GDP and GNI do not fully account for a country’s economic health because they measure only
37. Today, many developed countries are experiencing __________ population growth.
38. Cory is working on a global marketing assessment team looking out well into the future to help determine the most attractive market areas around
the world. He is evaluating market sizes and growth rates. Based on population growth rates in different regions, he should consider that
39. The shift of population from rural to urban areas in countries such as India helps global marketers by
40. When considering global marketing opportunities in Bangladesh, Tom asked the question, “How will we get it there?” Tom is concerned about
__________ capabilities in Bangladesh.
41. As part of efforts to stimulate economic development in Africa, the Gates Foundation announced that it would provide cellular phones to farmer
cooperatives. The Gates Foundation recognized that problems in __________ exist in many African markets.
42. When Ben evaluated the commercial infrastructure in Mauritius, he considered the island’s
43. Changes in tariffs and quotas are
44. Tariffs protect domestic producers by
45. In most cases, countries use tariffs to reduce foreign competition, but tariffs are also used
46. A __________ limits the quantity of imported merchandise, thus minimizing competition faced by domestic products.
47. When the U.S. government determined the prices of solar panels imported from China were artificially low due to illegal subsidies, it imposed a
______ to help domestic firms compete.
48. When the value of the dollar declines in relation to other currencies, it benefits U.S. marketers who
49. All of the following are major trade agreements affecting global marketing except
50. Marketers considering operations and trade with a specific country must consider whether or not the country belongs to a trading bloc. A trading
bloc is a group of countries
51. Which of these trade agreements represents the highest level of integration among participating nations?
52. Global businesses often find it particularly difficult to understand the __________ of a country’s culture.
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53. Chris laughed at some of the cultural mistakes companies made in advertising and promotion in international trade while he was in school. Now he
was trying to determine what had gone wrong with the campaign he had planned in Latin America for his company’s product, and it didn’t seem quite as
amusing. He narrowed the issues to sociocultural factors. He was looking at both __________ and __________.
Feedback: Sociocultural factors include visible artifacts like symbols and dress; they also include underlying values that can be more difficult to
understand. Some of the other answers list one sociocultural factor (language, symbols, verbal communication) along with something that is not a
sociocultural factor.
54. Geert Hofstede’s cultural dimensions concept focuses on five dimensions of __________ in a country.
55. All of the following are included in Hofstede’s cultural dimensions except
56. Marketers sometimes use Hofstede’s cultural dimensions to design marketing campaigns
57. Culture affects
58. Generally, firms entering foreign markets begin with
59. When entering a foreign market, the least risky strategy is
60. Global expansion often begins with
61. Many of the best-known American retailers, like Starbucks and McDonald’s, have contractual agreements with another firm or individuals, allowing
its businesses to operate overseas. These companies expanded globally using
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62. Gerald is assessing global entry strategies for his gourmet sandwich business. He does not want to take a lot of risk and he is willing to limit his
control of international stores. Gerald will most likely use a(n) __________ strategy.
63. Domestic firms developing a global entry strategy might consider franchising; however, the disadvantages need to be considered. All of the
following are disadvantages of franchising except
64. When a firm pools its resources with that of a local firm to enter a new market, they create a(n)
65. India, like some other countries, may require entering firms to create _________ when expanding into their markets, limiting outsiders’ control of
businesses.
66. Of the five strategies for entering new markets, direct investment creates the
67. NCD Company wants to expand into the Mexican market. It has the financial resources, wants to control business operations, and has had
considerable success marketing to Hispanics in the United States. NCD will likely use __________ to expand into the Mexican market.
68. Global segmentation, targeting, and positioning (STP) are more complicated than local STP, in part because
69. As noted in your text, global segmenting, targeting, and positioning are more complicated than domestic segmenting and positioning because of
cultural nuances, significant subcultures within countries, and
70. Cultural nuances, subcultures, and consumers’ different views of their roles in different countries can make __________ complicated.
71. Which of the following statements regarding global segmentation, targeting, and positioning is true?
72. Which of the following are the two components of a global marketing strategy?
73. The most important consideration when a firm chooses a global product strategy should be
74. Tariffs, quotas, and currency exchange policies affect global
75. Global pricing strategies should strive to be consistent with
76. Global marketers are under constant pressure to simplify distribution channels in order to
77. Global marketers typically find distribution in developing countries is more complex because