Which of these is a potential benefit of expanding globally?
A) Counteracting boredom among domestic staff by adding the excitement of international business
B) Getting rid of excess inventory in the domestic supply chain
C) Pressuring domestic employees to improve performance
D) Pressuring domestic suppliers to improve performance
E) Transferring ideas and products from international operations back to the domestic market

E

Which of these benefits did Cinnabon realize from its marketing efforts in Central and South America?
A) Bringing products developed there back to Hispanic consumers in the U.S.
B) Employee pride at serving international markets
C) Being named a cultural ambassador by the U.S. Trade Commission
D) Reducing company workload through economies of scale
E) Simplifying recruiting of U.S. employees

A

When companies are hesitant to expand internationally, even when potentially profitable opportunities await, what is that reluctance based on?
A) A lack of managerial energy and focus
B) Employee resistance
C) Sufficient opportunities in their domestic markets
D) The real challenges of moving into international markets
E) A lack of interest in global affairs

D

Which of the following is NOT a risk that firms must consider prior to expanding into another country?
A) Not understanding the nuances of the other country's business culture
B) Not understanding the nuances of the other country's business regulations
C) Lacking skilled managers with international experience
D) Having business disrupted by commercial and political changes
E) Choosing countries too similar to their home market

E

Once a firm decides to enter the international market, what is the next step in the decision-making process?
A) Deciding on the marketing organization
B) Deciding on the marketing program
C) Deciding how to enter the market
D) Deciding how to adapt the product to the new market
E) Deciding which markets to enter

E

Which decision by Unilever and Procter & Gamble has been vital to their success in reaching underserved markets in developing countries?
A) Touting the eco-friendliness of their offerings
B) Emphasizing their outsider status
C) Emphasizing their products' stature in global markets
D) Offering products in smaller, less-expensive packages
E) Running harsh competitive ads in local media

D

How was Deere & Company able to make its 8R line of tractors successful in 130 countries, in both developing and developed economies?
A) By making it highly customizable
B) By emphasizing its U.S. origins
C) By teaching farmers around the world U.S. farming techniques
D) Be centralizing all manufacturing in the U.S.
E) By undercutting local prices in nearly every market

A

Which of these is a challenge to selling in developing areas around the world?
A) Customers don't care about brand names.
B) Customers don't care about quality.
C) A marketing infrastructure may barely exist.
D) Consumers refuse to buy foreign goods.
E) It's impossible to figure out consumer needs.

C

Which of these is a key factor about the consumer market in India that food manufacturers need to consider?
A) Consumers don't care about brand names.
B) A handful of huge retail conglomerates control the final stage of distribution.
C) Food is largely purchased from supercenters that exceed the size of typical U.S. supermarkets.
D) Food is largely purchased from 12 million small neighborhood stores.
E) Consumer shop less frequently than in the U.S. and buy in much larger quantities.

D

Which of these was NOT mentioned as a reason for Unilever's successful introduction of TRESemmé in Brazil?
A) Collaborating with 40 big retailers
B) Courting fashion bloggers
C) Using social media outreach through Facebook
D) Distributing free samples
E) Keeping the brand name a secret until launch day

E

How did Grameenphone successfully market cell phones to 35,000 villages in Bangladesh?
A) Hiring local women as agents who leased phone time to other villagers
B) Using social media to build demand for mobile devices
C) Giving the phones away for free
D) Selling the phones but offering airtime away for no cost
E) Building demand through a text messaging campaign

A

WayToGrow Inc. is one of the most popular brands of toys in its home market. The company decides to expand its business abroad and its board of directors feel that instead of trying to establish its presence all at once in multiple markets, it is better to expand one country at a time. This would limit their risk and allow them to analyze customer response, after which they could expand to other similar countries. WayToGrow is following a ________ approach.
A) shotgun
B) continuous
C) born global
D) sprinkler
E) waterfall

E

The main risks in a ________ approach are the substantial resources needed and the difficulty of planning entry strategies for many diverse markets.
A) shotgun
B) continuous
C) born global
D) sprinkler
E) waterfall

D

When innovation at Siemens enables the company to offer solutions that can make the generation of hydroelectricity more environment-friendly, the company wants to reap the benefits of being the first to introduce such a product across multiple countries. In this case, which of the following approaches is likely to be the best approach to entering foreign markets?
A) The rifle approach
B) The continuous approach
C) The born-global approach
D) The sprinkler approach
E) The waterfall approach

C

A2Z Inc. is a producer of a wide variety of consumer goods in Brazil. It has successfully captured a huge share of the domestic market and has been able to create a very strong brand. It is now considering a foray into foreign markets. Its board of directors decides to first try out some of its products in the neighboring country of Argentina. A2Z plans to eventually expand its presence in other countries, after they analyze the impact of their entry into the Argentine market. A2Z Inc. is following a ________ approach.
A) born global
B) waterfall
C) sprinkler
D) franchisee
E) shotgun

B

In a waterfall approach to international expansion, ________.
A) firms enter countries gradually in a sequence
B) firms enter those countries first where the demand for the product is greatest
C) countries are entered based upon the availability of government subsidies
D) firms enter those countries first where the supply of raw material is greatest
E) countries are entered based upon ease of entry

A

In a sprinkler approach to international expansion, ________.
A) countries are entered when competition is limited
B) countries are gradually entered sequentially
C) countries in which the supply of raw material is greatest are entered first
D) countries in which the demand for the product is greatest are entered first
E) many countries are entered simultaneously

E

When first-mover advantage is crucial and a high degree of competitive intensity prevails, the ________ approach is better.
A) waterfall
B) born global
C) rifle
D) sprinkler
E) franchisee

D

Which of the following requires different marketing approaches in developed countries versus developing countries?
A) The cost of production varies substantially between the developed and the developing world.
B) The disparity between the rich and the poor in the developing world is reducing.
C) There are substantial economic and cultural differences between the developed and the developing world.
D) Marketing in developing countries is far more expensive than in the developed world.
E) The developing countries have more trade barriers in place than the developed countries.

C

Many U.S. firms prefer to sell in Canada, England, and Australia rather than in larger markets such as Germany and France because they feel more comfortable with the languages, laws, and culture. This reflects the ________ between these countries and the United States.
A) self-serving bias
B) coincident development
C) cultural proximity
D) cognitive dissonance
E) backward invention

C

While choosing countries to invest in, companies often choose cultural proximity to their own country. Cultural proximity can best be defined as countries ________.
A) in which the company feels comfortable with the language, laws, and culture
B) that are located close
C) that the home country's management team have visited
D) that have no trade barriers
E) with good infrastructure and stable political environment

A

If a company that has been licensing its business format to firms in other countries wants to take a more hands-on approach in some countries but doesn't yet have the financial resources for direct investment, which of these options would be best?
A) Indirect exporting
B) Direct exporting
C) Subsidiaries
D) Joint ventures
E) Sub-licensing

D

Which of these is NOT an option for direct exporting?
A) Domestic-based export department operating as a service function
B) Domestic-based export department operating as its own profit center
C) Overseas sales branch
D) Home-country-based traveling export sales representatives
E) Domestic-based export agent

E

Which state government agencies can help U.S. companies move into exporting?
A) Export-promotion offices
B) Export merchant offices
C) Export agencies
D) Public communication offices
E) Small Business

A

Which of these is a potential risk of using licensing for global marketing?
A) Licensors that can evolve into competitors
B) Licensees that can evolve into competitors
C) Complexity relative to direct investing
D) Lack of licensors in most markets
E) Inability to reach contractual terms

B

Which of these is the simplest way for a company to get started in international marketing?
A) Direct exporting
B) Indirect exporting
C) Joint ventures
D) Licensing
E) Direct investment

B

Which of the following modes of entry into a foreign market involves the maximum commitment and risk?
A) Franchising
B) Direct investment
C) Joint ventures
D) Licensing
E) Direct exporting

B

Domestic-based export merchants ________.
A) buy manufacturers' products and then sell them abroad
B) manage a company's export activities for a fee
C) buy foreign products and sell them in the domestic country
D) seek and negotiate foreign purchases
E) carry on exporting activities on behalf of several producers

A

Domestic-based export agents perform a valuable service for companies seeking to enter foreign markets. The primary function of these agents is to ________.
A) carry on exporting activities on behalf of several producers
B) buy the manufacturer's products and then sell them abroad
C) buy foreign products and sell them in the domestic country
D) seek and negotiate foreign purchases for a commission
E) produce and export products to foreign countries

D

Companies typically start their international foray with ________, which involves working through independent intermediaries who sell their products abroad.
A) indirect exporting
B) licensing
C) franchising
D) direct exporting
E) joint ventures

A

Indirect exports have two advantages for a firm: less investment and less ________.
A) paperwork
B) intrusion by the government
C) risk
D) competition
E) customer suits

C

James Franks buys local products from manufacturers in Miami and other parts of Florida and sells them abroad, mainly to Caribbean nations. Franks is a(n) ________.
A) domestic-based export merchant
B) domestic-based export agent
C) cooperative agent
D) export-management agent
E) direct exporting agent

A

________ agree to manage a company's export activities for a fee.
A) Cooperative organizations
B) Domestic-based export agents
C) Export-management companies
D) Domestic-based export merchants
E) Contract manufacturing organizations

C

After successfully exporting its products through export merchants, Boyes Inc. decides to take control of its exports. It sets up its own unit in the home country that takes care of all
export-related activities. Boyes Inc. is most likely using ________.
A) foreign-based distributors or agents
B) a domestic-based export department
C) export merchants in foreign countries
D) export-management companies
E) traveling export sales representatives

B

A well-known producer of breakfast cereals has decided to hire producers in different countries so that the cereals marketed under their brand are locally produced in the respective countries. This would not only appeal more to consumers who prefer domestically produced goods, but would also create jobs in the host-country enhancing the brand's image further. This is an example of ________.
A) management contracting
B) franchising
C) greenfield venturing
D) contract manufacturing
E) straight extension

D

Which of the following statements is true about licensing?
A) It is one of the most complex ways to engage in international marketing.
B) The licensor gains entry into the new market at low risk.
C) The licensee has no access to proprietary information.
D) The licensee receives a fee or royalty.
E) The only benefit for a licensee is the production expertise it gains.

B

Hotel chains such as Hyatt and Marriott sell a variation of the licensing agreement called ________ to the owners of foreign hotels to manage these businesses for a fee.
A) greenfield venturing
B) management contracts
C) strategic alliance
D) indirect exporting
E) direct exporting

B

In which of the following modes of licensing does the firm hire local producers to produce the product, giving the company less control over the manufacturing process?
A) Contract manufacturing
B) Management contracts
C) Direct investment
D) Joint venture production
E) Greenfield venturing

A

Toshiba, Hitachi, and other Japanese television manufacturers use ________ to service the Eastern European market.
A) contract manufacturing
B) management contracts
C) direct investment
D) joint venture production
E) greenfield venturing

A

A company can enter a foreign market through a ________, which is a complete form of licensing in which the company offers a complete brand concept and operating system.
A) contract manufacturing agreement
B) cooperative agreement
C) management contract
D) joint venture
E) franchising arrangement

E

Which of the following is true about direct investment as a mode of international expansion?
A) It allows a firm to retain full control over its investment.
B) It yields lower returns than joint ventures.
C) It involves the least amount of risk.
D) It involves the least cost.
E) It does not allow the firm to diversify.

A

Whirlpool took a 53 percent stake in the Dutch electronics group Philips' home appliances business to leapfrog into the European market. This is an example of a ________.
A) straight extension
B) direct investment
C) contract manufacturing agreement
D) licensing agreement
E) franchising agreement

B

Which of the following is NOT one of the ways direct exporting happens?
A) Overseas sales branch or subsidiary
B) Domestic-based export agents
C) Domestic-based export division
D) Traveling export sales representatives
E) Foreign-based distributors or agents

B

If a U.S. bicycle manufacturer sells products to a retail chain in Indonesia which then resells some of that stock to an unauthorized retailer in Malaysia for less than the manufacturer itself sells to its authorized retail chains in Malaysia, this is an example of ________.
A) the black market
B) multi-shipping
C) the gray market
D) forward buying
E) reverse buying

C

Which is the most effective deterrent against gray market reselling by authorized distribution channels?
A) Severe and/or timely penalties
B) Closing operations in the country
C) Contract renegotiation
D) Diplomatic discussions
E) Threats

A

Which of these is a frequent target of gray market activities?
A) Breakfast cereals
B) Magazines
C) Prescription drugs
D) Over the counter drugs
E) Cosmetics

C

The ways that a society handles inequalities among its people is reflected in which of these cultural dimensions?
A) Power distance index
B) Individualism vs. collectivism
C) Masculinity vs. femininity
D) Uncertainty avoidance index
E) Normative vs. pragmatic orientation

A

Societies that prefer to maintain time-honored traditions and are skeptical about societal change are said to have a ________.
A) collectivist orientation
B) high power distance
C) normative orientation
D) high degree of uncertainty avoidance
E) pragmatic orientation

C

A country in which people accept a hierarchical social stratification is said to have a ________.
A) collectivist orientation
B) high power distance
C) normative orientation
D) high degree of uncertainty avoidance
E) pragmatic orientation

B

If a society tends to maintain rigid codes of belief and behavior and is intolerant of unorthodox behavior and ideas, this reflects a ________.
A) collectivist orientation
B) high power distance
C) normative orientation
D) high degree of uncertainty avoidance
E) pragmatic orientation

D

A U.S. executive who is transferred to the company's subsidiary in Tokyo causes friction with his new colleagues, who think he worries too much about his own career advancement. This
is an example of which cultural dimension?
A) Power distance index
B) Individualism vs. collectivism
C) Masculinity vs. femininity
D) Uncertainty avoidance index
E) Normative vs. pragmatic orientation

B

A data scientist who grew up in a fairly strict culture relocates to a new country, where she is taken aback by the freer lifestyle that most of the residents pursue. This is an example of which cultural dimension?
A) Indulgence vs. restraint
B) Individualism vs. collectivism
C) Masculinity vs. femininity
D) Uncertainty avoidance index
E) Normative vs. pragmatic orientation

A

General Mills positions its Häagen-Dazs brand globally in terms of "indulgence," "affordable luxury," and "intense sensuality." Which of these best describes its communication strategy in this regard?
A) Maintaining the same basic positioning but modifying the specific language country by country
B) Modifying the positioning but keeping the same general language
C) Modifying the brand name but keeping the positioning
D) Changing the brand name, the positioning, and the specific implementation language.
E) Leaving the communication up to local distributors

A

How did Ikea respond to the prevalence of low-cost copies of its products when it expanded into China?
A) Drastically slashed prices on its products
B) Switched to selling local brands
C) Slashed prices on its own products and began selling some local brands
D) Changed its name to avoid any association with the knockoff products
E) Kept its usual prices and repositioned itself as a luxury brand

C

The price a company charges its own subsidiaries in other countries is known as the ________.
A) escalator
B) transfer price
C) subsidiary price
D) international price
E) internal price

B

Which of these countries has a reputation for high-tech innovations, soft drinks, toys, cigarettes, and jeans?
A) Japan
B) China
C) The United States
D) Germany
E) France

C

What is the estimated global scale of the problem of counterfeit goods?
A) Between $100 and $200 million a year
B) About $500 million a year
C) About $500 billion a year
D) More than a trillion dollars a year
E) The real cost is unknown

D

How does McDonald's manage to maintain consistent global branding when tastes and eating habits vary so widely from country to country?
A) By enforcing menu consistency from country to country
B) By allowing franchise owners in each country to run their restaurants as they see fit
C) By enforcing global branding and service standards but allowing regions and countries to customize store layout and menu staples
D) By insisting that every McDonald's outlet in the world emphasize the company's U.S. roots
E) By frequently passing product ideas from one country to another

C

If consumers believe that French products are naturally stylish, what phenomenon is occurring?
A) Francophone marketing
B) Francophile marketing
C) Country-of-origin effects
D) Regional perceptions
E) Nationalism

C

What impact is the growing middle class in many emerging markets having on the product strategies of many international marketers?
A) They are raising prices across the board.
B) They are dropping their economy price lines.
C) They are trying to nudge these consumers toward luxury brands.
D) They are adding price-quality tiers to their product portfolios to appeal to the growing middle class.
E) They are trying to "price shame" consumers into abandoning lower-cost products.

D

In a localized marketing program, the company ________.
A) ensures that uniform practices are adopted across countries
B) focuses more on brand image than consumer preferences
C) ignores differences in the legal environment
D) ensures the lowest cost marketing program is adopted
E) tailors the marketing programs to each target market

E

When Kraft blends different coffees for the British (who tend to drink coffee with milk), the French (who often prefer it black), and Latin Americans (who often want a chicory taste), it is
engaged in ________.
A) straight extensions
B) product adaptation
C) retailer versions
D) backward invention
E) forward invention

B

A standardized marketing program involves ________.
A) adopting the strategy that best fits a given target market
B) using the same products and communication programs in every country
C) adjusting the product to suit market preferences
D) changing the features of the product to accommodate the host country
E) changing only the communication message to suit the different target markets

B

Which of the following is one of the six cultural dimensions that differentiate countries?
A) Customer relationship management versus power distance
B) Strategic management versus marketing management
C) High versus low uncertainty avoidance
D) Total quality management versus JIT deliveries
E) Marketing management versus customer relationships

C

The United States imposed a duty of on wind towers produced in China and Vietnam and imported to the United States after they found evidence both countries were selling them at below fair market value, or ________, the practice of charging less than its costs or less than it charges at home to win a market.
A) arm's-length pricing
B) gray marketing
C) counterfeiting
D) transfer pricing
E) dumping

E

In collectivist societies, ________.
A) all property is owned by the government
B) the self-worth of the individual is rooted more in the social system than in individual achievement
C) the culture is dominated by the need to maintain low power distance and reduce income inequality
D) the culture is dominated by a nurturing attitude as opposed to an assertive attitude
E) people are highly risk-averse

B

Cultures with low power distance ________.
A) emphasize collectivism
B) are pragmatic
C) strive to equalize the distribution of power
D) are averse to risk
E) are tolerant of risk

C

Straight extension of the product means introducing ________.
A) the product to the foreign market without any changes
B) the product to the foreign market with minor changes
C) the product to the foreign market with major changes
D) a customized product to the foreign market with a new marketing strategy
E) a customized product to the foreign market with existing marketing strategy

A

Cultures with high uncertainty avoidance ________.
A) are open to change and ambiguity
B) are tolerant of unorthodox behavior and ideas
C) believe practice counts more than principle
D) maintain a relaxed attitude
E) maintain rigid codes of belief and behavior

E

Which of the following is most likely to be successful when introduced in foreign markets as a straight extension?
A) Laundry detergent
B) Casual pants
C) Dessert mixes
D) Digital camera
E) Condensed soup

D

Finnish cellular phone giant Nokia customized its 6100 series mobile phone for every major market in which it is present. In Asia, for example, the series came with higher ring volume so that it could be heard on the crowded Asian streets. This is an example of ________.
A) straight extension
B) forward invention
C) product adaptation
D) city version
E) country version

C

Product adaptation involves ________.
A) altering the product to meet local preferences
B) altering the product to meet minimum acceptable standards
C) altering the communication strategy to meet local preferences but not the product
D) altering neither the product nor the communication strategy while entering a new market
E) developing a new product and adapting the communication strategy to enter a new market

A

A Gucci bag that might sell for $200 in its home country of Italy but $300 in the United States and $400 in China due to the differences in the costs of distributing the product in the two
countries. This phenomenon is called a(n) ________ problem.
A) opportunity cost
B) market pricing
C) tactical pricing
D) price escalation
E) transfer pricing

D

The problem with setting a uniform global price for a product is that ________.
A) it allows intermediaries in low-price countries to reship their products to high-price countries
B) the company would earn the same profits everywhere, regardless of the cost structure
C) this strategy can price the product out of the market in countries where costs are high
D) this strategy makes the price too high in poor countries and not high enough in rich countries
E) it is ineffective for products that are homogeneous

D

When companies are setting prices in different countries, the problem with setting a market-based price in each country is that ________.
A) it might motivate intermediaries in low-price countries to reship their products to high-price countries
B) the company would earn the same profits everywhere, regardless of the cost structure
C) this strategy might price the product out of the market in countries where costs are high
D) this strategy would make the price too high in poor countries and not high enough in rich countries
E) it prevents the company from differentiating its products

A

When one unit charges another unit in the same company for goods it ships to its foreign subsidiaries, the charge is called a(n) ________ price.
A) original
B) transfer
C) margin
D) break-even
E) customer value

B

Existence of gray markets leads to which of the following outcomes?
A) They make the distribution channel stronger.
B) They create a free-rider problem making legitimate distributors' investments in supporting a manufacturer's product less productive.
C) Goods sold in grey markets are always counterfeit.
D) Goods sold in grey markets come with standard product warranties.
E) Taxes imposed on grey market products are very high.

B

Dumping occurs when a company ________.
A) selling in a foreign market charges either less than its costs or less than it charges at home
B) selling in a foreign market charges more than the price in its home market
C) selling in a foreign market charges prices that are lower than those charged by its competitors in this market
D) sets its price equal to its average cost of production
E) exports its products to a foreign country to increase its revenue in spite of excess demand in the home country

A

In India, where people often buy items like cigarettes one at a time because incomes are low and people shop daily because homes lack storage and refrigeration, ________ remains an important function of intermediaries and helps perpetuate long channels of distribution.
A) breaking bulk
B) jobbing
C) type of transportation
D) information sharing
E) reinforcing policies

A

As people in developing countries often prefer to buy in smaller quantities, ________ is one of the most important functions of intermediaries in developing countries and helps perpetuate the long channels of distribution, which are a major obstacle to the expansion of retailing.
A) product adaptation
B) breaking bulk
C) diversification
D) transfer pricing
E) dual adaptation

B

If PepsiCo charges what each country could afford, ignoring cost differences from country to country, it would be using a(n) ________ price.
A) uniform
B) market-based
C) cost-based
D) escalation
E) skimming

B

As a result of ad campaigns depicting Brazil as a multicultural land of carnivals and beaches, any mention of the country can make people think of sun and sand. This is an example of ________.
A) collectivism
B) target market impact
C) ethnocentric thinking
D) country-of-origin effect
E) cognitive dissonance

D

The New Zealand Way program was an initiative by the government of New Zealand to raise awareness and attract tourists by showing the dramatic landscapes featured in "The Lord of the Rings" film trilogy. This is an example of a government trying to strengthen its ________.
A) country-of-origin perceptions
B) international subsidiaries
C) internationalization
D) contract manufacturing
E) distributor relationships

A