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54. Which of the following trade alliances differs from others in its commitment to facilitating business and its practice of
allowing the private sector to participate in a wide range of activities?
a.
NAFTA
b.
EU
c.
MERCOSUR
d.
WTO
e.
APEC
55. Many marketers claim that ____ will become the world's largest market.
a.
Japan
b.
the United States
c.
China
d.
Thailand
e.
India
56. 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
57. If a newly formed country wanted to increase its international trade and reduce worldwide tariffs, it would most likely
try to become a part of
a.
NAFTA.
b.
WTO.
c.
MERCOSUR.
d.
APEC.
e.
EU.
58. The term dumping refers to the sale of
a.
products sold in foreign markets that cannot be sold in the United States.
b.
products sold in foreign markets at prices above those charged in the United States.
c.
all discontinued U.S. products in foreign countries.
d.
products sold in foreign countries at unfairly low prices.
e.
products sold in foreign markets that cannot pass safety standards in the United States.
59. If Hyundai, a Korean automobile manufacturing firm, started selling its cars at unfairly low prices to Germany,
Hyundai would be engaging in
a.
quota-enforcing.
b.
embargoing.
c.
shoveling.
d.
dumping.
e.
dipping.
60. 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.
61. At the heart of the ____ are agreements that provide legal ground rules for international commerce and trade policy.
a.
United Nations
b.
GATT
c.
MERCOSUR
d.
WTO
e.
APEC
62. 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.
63. High Plains Furnishings, a furniture manufacturer in southern Montana, markets its furniture products in markets
within the United States. It has also found several niche target markets in Finland, Chile, and Argentina. High Plains
Furnishings is engaging in
a.
domestic marketing and limited exporting.
b.
localized marketing and domestic marketing.
c.
globalized marketing.
d.
domestic marketing and international exporting.
e.
localized marketing and globalized marketing.
64. 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
65. The purchase of products from a foreign source is called
a.
exporting.
b.
dumping.
c.
importing.
d.
licensing.
e.
venturing.
66. When the American company Exxon purchases crude oil from Saudi Arabia, it is engaging in
a.
licensing.
b.
importing.
c.
free trade.
d.
exporting.
e.
dumping.
67. 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,
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.
68. The extent of Raytheon's participation in global business is selling the batteries it manufactures to companies in Spain.
In this case, Raytheon is a(n)
a.
trading company.
b.
importer.
c.
exporter.
d.
franchiser.
e.
contract manufacturer.
69. The Grummond Group buys air conditioner components in industrialized countries and sells them to business
customers in developing countries where the air conditioners are assembled. Grummond is most likely classified as a(n)
a.
trading company.
b.
strategic alliance.
c.
joint venture.
d.
licensee.
e.
exporter.
70. 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.
e.
arrange for licensing agreements between domestic and foreign firms.
71. 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.
72. A company not involved in manufacturing that brings together buyers and sellers in different countries is usually
referred to as a
a.
franchise.
b.
contract manufacturer.
c.
strategic intermediary.
d.
trading company.
e.
joint venture.
73. A large farming cooperative that focuses on the production of fruits and vegetables uses a business that sells the
farmers' products in foreign countries and also provides consulting, insurance, legal assistance, and warehousing to the
cooperative. This business would most likely be called a(n)
a.
trading company.
b.
export specialist.
c.
contract wholesaler.
d.
licensor.
e.
strategic partner.
74. 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
75. If Caterpillar wished to reach the market in Malaysia but was leery of a direct investment in the country, it might
provide a Malaysian operation with the knowledge to produce and market its products in exchange for a commission. This
type of arrangement is called
a.
licensing.
b.
exporting.
c.
a strategic alliance.
d.
a joint venture.
e.
contract manufacturing.
76. 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
77. 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 called
a.
a joint venture.
b.
contract manufacturing.
c.
direct licensing.
d.
franchising.
e.
a strategic alliance.
78. 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.
c.
franchising.
d.
exporting.
e.
direct investment.
79. 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.
80. 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.
81. 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
82. 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.
a joint venture.
e.
licensing.
83. 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 and 6:00 am. 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.
contract sourcing.
84. A business partnership between a domestic firm and a foreign firm is known as
a.
a joint venture.
b.
an international partnership.
c.
a multinational enterprise.
d.
licensing.
e.
exporting.
85. 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
86. Sometimes business partnerships are formed between traditional rivals competing for market share in the same
product class. These partnerships are known as
a.
trading companies.
b.
contract manufacturers.
c.
joint ventures.
d.
strategic alliances.
e.
licenses.
87. 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
88. 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
89. What 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 joint venture is defined in scope, while a strategic alliance is typically represented by an agreement to work
together.
d.
A joint venture is formed between companies with dissimilar product offerings while a strategic alliance is
formed between companies with similar product offerings.
e.
A joint venture is simply a financial investment in a foreign firm while a strategic alliance involves more than
just financial support.
90. 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 Saint
Laurent designs and color traditions in its production of luxury models of the company’s Expedition SUV and 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.
a joint venture.
c.
a global direct ownership.
d.
a multinational enterprise.
e.
contract manufacturing.
91. 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
92. 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.
93. 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
94. 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.
95. 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.
96. 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. Samsung is now operating as a(an) ______; however, if the plant is built in Tennessee, it will be
operating as a(an) ______.
a.
exporter; strategic alliance.
b.
limited exporter; national marketer.
c.
limited exporter; international proprietorship.
d.
exporter; multinational enterprise.
e.
exporter; global franchise.
97. 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.
98. What 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
99. 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.
100. Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with
a(n) ____ structure.
a.
international division
b.
internationally integrated
c.
export department
d.
geographic area
e.
matrix
101. Which of the following centralizes all of the responsibility for international operations?
a.
Product division structures
b.
Export department structures
c.
Internationally integrated structures
d.
International division structures
e.
Global matrix structures
102. 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
103. 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.
104. 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.
105. 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.
106. 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.
107. 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.
108. 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 which type of international
marketing?
a.
Exporting
b.
Accidental exporting
c.
Limited exporting
d.
Licensing
e.
Globalization of markets
109. 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
110. Swiss-based Nestlé has taken a global approach to marketing its chocolate products. Which of the following is most
easily standardized?
a.
Product
b.
Promotion
c.
Distribution
d.
Advertising
e.
Price
