International trade in 2003 accounted for over of U.S. GDP up from 11 percent in 1970

a. one-third

b. one-eighth

c. one-half

d. one-quarter

e. 18 percent

D. one-quarter

Global firms plan, operate, and their activities on a worldwide basis.

a. produce

b. coordinate

c. distribute

d. price

e. service

B. coordinate

The major decisions in international marketing include which of the following steps?

a. deciding whether to go abroad

b. deciding which markets to enter

c. deciding how to enter the market

d. deciding on the marketing program

e. all of the above

e. all of the above

The internationalization process has four stages. These stages are .

a. no regular export activities

b. export via independent representatives (agents)

c. establishment of one or more sales subsidiaries

d. establishment of production facilities abroad.

e. all are part of the internationalization process

E. all are part of the internationalization process

Most firms work with an and enter a nearby or similar country.

a. independent agent

b. contractual export department

c. import/export department

d. franchisee

e. management contract

A. independent Agent

A "waterfall: approach to international marketing is defined as:

a. countries that are gradually entered sequentially

b. countries in which the demand for the product is greatest is entered first

c. countries in which the demand for the product is greatest is entered last

d. countries in which the supply of race material is greatest is entered first

e. countries are entered based upon ease of entry

A. countries that are gradually entered sequentially

A "sprinkler" approach to international marketing is defined as :

a. countries that are entered when timing is right

b. countries that are gradually entered sequentially

c. countries in which the supply of raw material is greatest is entered first

d. countries in which the demand for the product is greatest is entered first

e. many countries are entered simultaneously within a limited period of time

E. many countries are entered simultaneously within a limited period of time.

The developed nations and the prosperous parts of developing nations account for less than of the world's population.

a. 10%

b. 15%

c. 20%

d. 25%

e. 30%

B. 15%

Marketers must change their conventional marketing to sell their products to developing countries. One of the changes that marketers can make is to :

a. reduce the price of the product but increase the packaging size

b. reduce the size but keep the pricing the same

c. reduce the price of the product

d. reduce the size and price of the packaging

e. increase the price and packaging size because these countries have never seen the product before

D. Reduced the size and price of the packaging

Factors that influence the "Attractiveness: of a country to enter include which of the following?

a. product, geography, income and population, political climate, and other factors

b. product, geography, income, climate, and source of income

c. population, incomes, competition, and political climate

d. incomes, profit potentials, competitions, and climate

e. incomes, families, competition, and cultural differences

A. product, geography, income and population, political climate, and other factors.

Regional economic integration is defined as:

a. agreements between individual firms for the sake of commerce

b. trading agreements between individual countries

c. trading agreements between individual firms

d. trading agreements between countries and firms

e. trading agreements between blocs of countries

E. Trading agreements between blocs of countries.

The European Union founded in 1957 added in May 2004 bringing its total membership to 25 countries.

a. 10 countries

b. 5 countries

c. 20 countries

d. 6 countries

e. 4 countries

A. 10 countries

NAFTA established a free trade zone between what three countries?

a. Canada, Mexico, and South America

b. Canada, Mexico, and Peru

c. Mexico, South America, and the United States

d. Canada, Mexico, and the United States

e. Canada, Mexico, and Japan

D. Canada, Mexico, and the United States

MERCOSUL is a free trade zone linking which of the following South American countries

a. Mexico, Japan, Brazil, and Paraguay

b. Mexico, Brazil, and Paraguay

c. Brazil, Argentina, and Paraguay

d. Canada, Brazil, and Paraguay

e. Brazil Argentine, Paraguay and Uruguay

E. Brazil, Argentina, Paraguay, and Uruguay

The five modes of entry into foreign markets generally flow by increasing commitment, risk, control, and profit potential as follows ________.

a. indirect exporting, direct exporting, licensing, joint ventures, and direct investment

b. direct investment, joint ventures, licensing, direct exporting, and indirect exporting.

c. direct investment, joint ventures, and licensing

d. direct investment, joint ventures, licensing, and indirect exporting

e. none of the above

A. indirect exporting, direct exporting, licensing, joint ventures, and direct investment.

In choosing which countries to invest in, companies sometimes choose psychic proximity to their own country. Psychic proximity can best be defined as ________.

1. countries close to the “host” country in which the company feels comfortable with the language, laws, and culture
2. countries that “mimic” the host country in terms of language and culture
3. countries that the host country’s management team have visited
4. countries close to the “host” country in which the company feels that they can infiltrate quickly and profitable
5. countries close to the “host” country in which the company can easily transport their products

A. countries close to the "host" country in which the company feels comfortable with the language, laws, and culture.

The normal way to get involved in an international market is through exporting. Occasional exporting is defined as ________.

1. when the company carries on exporting activities on the behalf of others
2. when the company makes a commitment to expand into particular markets
3. when the company works through independent agents
4. when the company hires domestic-based agents to negotiate foreign purchases
5. a passive level of involvement in which the company exports its products from time to time

E. a passive level of involvement in which the company exports its products from time to time

Active exporting takes place when the company ________ to expand into a particular market.

1. forms a “skunk” group
2. forms an export department
3. hires an agent
4. makes an effort
5. makes a commitment

E. makes a commitment

Domestic-based export merchants ________.

1. buy the manufacturer’s products and then sell them abroad
2. buy the manufacturer’s products then sell them in the host country
3. buy the manufacturer’s products then fine agents and customers in foreign countries
4. seek and negotiate foreign purchases
5. carry on exporting activities on behalf of several producers

A. buy the manfacturer's products and then sell them abroad

Domestic based export agents perform a valuable service for the companies seeking to enter foreign markets. The primary function of these agents is to ________.

1. carry on exporting activities on behalf of several producers
2. buy the manufacturer’s products and then sell them abroad
3. buy the manufacturer’s products then sell them in the host country
4. seek and negotiate foreign purchases and are paid a commission on those sales
5. export products to foreign countries

D. seek and negotiate foreign purchases and are paid a commission on those sales.

Company’s prefer to enter a country that ranks high on market attractiveness, low in market risks and ________.

1. in which it would possesses a competitive advantage
2. turn a quick profit
3. able to dominate its foreign competitors through superior product design and performance
4. gain a dominate market share within one year of exporting
5. increase its foreign market share by 50 percent in one year

A. in which it would possesses a competitive advantage

Indirect export has two advantages for the firm. First in involves less investment for the firm and secondly it ________.

1. involves less paperwork
2. involves less intrusion by the government
3. involves less risk
4. involves less people to manage the process
5. involves less products and product lines

C. involves less risk

A company can carry on direct exporting in several ways. These include domestic- based export department or division, overseas sales branch or subsidiary, traveling export sales representatives, and ________.

1. foreign-based distributors or agents
2. marketing departments based in the foreign country
3. export merchants in foreign countries
4. export management companies
5. none of the above

A. foreign-based distributors or agents

According to the text, Shaper Image receives more than ________ of its online business form overseas customers.

1. 15 percent
2. 30 percent
3. 25 percent
4. 40 percent
5. 10 percent

C. 25%

“Going abroad” using the Internet has its challenges. One of the challenges that a global marketer may run up against when using the Web are ________.

1. cultural restrictions
2. language barriers
3. pricing procedures
4. monetary exchanges
5. logistical limitations

A. cultural restrictions

Licensing is a simple way to become involved in international marketing. In licensing, the licensor issues a license to a foreign company to use a process, trademark, patent, or trade secret for a(n) ________.

1. limited period of time
2. fee or royalty
3. exchange of information or propriety information
4. exchange for access to the market place
5. exchange for “their” process, trademark, patent, or secret

B. fee or royalty

Companies such as Marriott and Hyatt sell a variation of the licensing agreement called ________ to the owners of foreign hotels to manage these businesses for them in foreign countries.

1. contract manufacturing
2. management contracts
3. franchising
4. hotel management licensing
5. none of the above

B. management contracts

In ________, the firm hires local manufacturers to produce the product. This gives the company less control over the manufacturing process and loss of profits of the manufacturing efficiencies.

1. contract manufacturing
2. management contracts
3. licensing
4. franchising
5. none of the above

A. contract manufacturing

A company can enter a foreign market through ________, which is a complete form of licensing in which the company offers a complete brand concept and operating system designed to ensure that the ________ operates according to the requirements of the licensor.

1. contract manufactures/licensor
2. contract management/firm
3. management contracts/firm
4. joint venture/firm
5. franchising/franchisor

E. franchising/franchisor

The definition of a joint venture company is one ________.

1. in which foreign inventors join with local investors where they share ownerships and control
2. in which two people or more own the firm jointly
3. where foreign investors join with others to own the firm
4. where ownership by local and distant investors in share ownership of a franchise
5. where ownership is by investors of foreign firms

A. in which foreign inventors join local investors where they share ownership and control

A joint venture may be necessary or desirable for economic or political reasons. Additionally, a foreign firm might lack the ________, or managerial resources to undertake the venture alone.

1. resource, competency
2. financial, physical
3. financial, willingness
4. political, financial
5. political, competency

B. financial, physical

In an adapted marketing mix, the producers’ ________ the marketing program to each target market.

1. reduce the importance of each element of the marketing program to adjust for cost differential between countries
2. decide on which element of the marketing mix to change/country/target market prior to entering the country
3. adapt the communications message to the host country
4. change only one element of the marketing mix/country
5. adjust

E. adjust

International companies must decide on how much to adapt their marketing strategy to local conditions. At one extreme are companies that use a globally standardized marketing mix worldwide. A standardized marketing mix includes ________.

1. a concentric strategy which includes the product, integrated marketing communications mix, and distribution strategy
2. standardization of the product, communication, and distribution channels promising lowest costs.
3. changes only to the product keeping distribution channels and marketing communications consistent across countries
4. changing only the distribution channels to accommodate the host country
5. changes only to the product and communication message

B. standardization of the product, communication, and distribution channels promising lowest costs

The ultimate form of foreign involvement is direct ownership of foreign-based assembly or manufacturing facilities. One of the advantages of direct ownership can include economies of scale, creating jobs in the host country, developing deeper relations with local suppliers etcetera and the firm ________.

1. retains full control over its investment
2. reviews global outreach projections
3. redefines the business concept
4. reviews the successes from e-commerce
5. receives no disadvantages to direct investment

A. retains full control over its investment

Hofstede identifies four cultural dimensions that can differentiate countries. These are individualism versus collectivism, high versus low power distances, masculine versus feminine, and ________.

1. customer relationship management versus power distances
2. strategic management versus marketing management
3. weak versus strong uncertainty avoidance
4. total quality management versus JIT deliveries
5. marketing management versus customer relationships

C. weak versus strong uncertainty avoidance

Straight extension of the product means ________.

1. introducing the product to the foreign market without any changes to the product.
2. introducing the product to the foreign market without major changes to the product
3. introducing the product to the foreign market with major changes to the product
4. introducing the product to the foreign market with no major marketing program
5. not introducing the product to the foreign market until changes have been made

A. introducing the product to the foreign market without any changes to the product.

An advantage of global marketing is that it can lower marketing costs, has economies of scale in production and distribution, can produce consistency in brand image, has the ability to leverage good ideas quickly and efficiently, and ________.

1. is easier to adapt to foreign countries
2. allows for the same message to be used worldwide
3. allows for individual countries to add their specific needs to the message
4. is easier for corporations to evaluate the marketing message
5. allows for uniformity of marketing practices

E. allows for uniformity of marketing practices

Product adaptation involves ________.

1. altering the product to meet local conditions or preferences
2. altering the product to meet minimum acceptable standards
3. changing the product periodically
4. upgrading the product on a periodic basis
5. changing the product to meet competition

A. altering the product to meet local conditions or preferences

A firm can successful introduce four versions of its products into a foreign country or a firm may select one of these for inclusion. These versions include ________.

1. customer version, regional version, and city version
2. customer version, country version, and retailer version
3. regional version, country version, city version, and retailer version
4. customer version, regional version, city version, and retailer version
5. regional version, country version, city version, and market versions

C. regional version, country version, city version, and retailer version

Product invention consists of creating something new. Backward invention is reintroducing earlier product forms that are well adapted to a foreign country’s needs. Forward invention is ________.

1. creating a new product to meet a need in another country
2. creating a new product to meet the need in the host country
3. understanding the differences between host and foreign country markets
4. increasing the control over the development of new products
5. inventing something that yet has a “market”

A. creating a new product to meet a need in another country

Companies can run the same marketing communications programs as used in the home market or change them for each local market, a process called ________.

1. product communications
2. brand communications
3. dual adaptation
4. marketing communications
5. communication adaptation

E. communication adaption

Many multinationals are plagued by the gray market problem. The gray market consists of ________.

1. the marketing of products to older consumers
2. branded products diverted from normal distribution channels in the country of product origin
3. branded products diverted from one country to another
4. products being repackaged from the intended country to a diverted country
5. products not having full warranties by the manufacturer

B. branded product diverted from normal distribution channels in the country of product origin.

If a company adapts or changes both the product and the communications, the company engages in a process called ________.

1. straight extension
2. marketing communication
3. product adaptation
4. dual adaptation
5. full adaptation

D. dual adaption

The use of media requires international adaptation because media availability varies from country to country. Norway, Belgium, and France do not allow cigarettes and alcohol to be advertised on TB. Austria and Italy regulate TV advertising ________.

1. between the hours of 9 p.m. and 6 a.m.
2. to children
3. for those under the age of majority
4. regarding content and clarity
5. using women in advertising

B. to children

A Gucci bag sells for $120 in Italy and $240 in the United States. This is an example of when a firm tries to sell its products abroad. This phenomenon is called a ________.

1. strategic marketing pricing problem
2. market pricing problem
3. tactical pricing problem
4. price escalation problem
5. transfer pricing problem

D. price escalation problem

A firm that charges a price to another unit in the company sets the ________ price for goods that it ships to its foreign subsidiaries.

1. original price
2. transfer price
3. margin price
4. break-even price
5. customer value price

B. Transfer Price

The cost escalation problem exists for multinationals and varies from country to country; the question is: How to set prices in different countries? Companies have three choices. One is to set a uniform price everywhere, two is to set a market-based price in each country, and three is to ________.

1. set a final “cost plus” price in each country
2. set a cost-based price in each country
3. let the market dictate price/country
4. vary the price/market/country on a daily basis to reflect consumer demand
5. set the transfer price at marginal costs = marginal revenue

B. Set a cost based price in each country

In 2000 Stelco a Canadian steelmaker, successfully fought dumping changes against steelmakers in Brazil and other countries. “Dumping” is defined or occurs when ________.

1. a company charges either less than its costs or less than it charges in its home market
2. the company charges less that its costs but more than it charges in its home market
3. the company’s pricing plans are below current domestic prices
4. a company must increase its prices/product prior to importing the product
5. a company unloads an excess supply of the product at the best possible prices to the consumer

A. a company charges either less than its costs or less than it charges in its home market

The “whole channel concept for international marketing” includes the following steps________.

1. seller to seller’s international marketing headquarters to channels between nations to channels within foreign nations to final buyers
2. seller to marketing headquarters to channels within foreign markets to final buyers
3. sellers to channels between nations to final buyers
4. sellers to channels within foreign nations to final buyers
5. sellers to international markets to channels within foreign nations to final buyers

A. seller to seller's international marketing headquarters to channels between nations to channels within foreign nations to final buyers

In an increasingly connected, highly competitive global marketplace, government officials, and marketers are concerned with how attitudes and beliefs about their country affect consumer and business decision-making. ________is(are) the mental associations and beliefs triggered by a country.

1. Corporate ownership of the firm
2. Materials used in manufacturing
3. Brand names and trademarks
4. Country-of-origin perceptions
5. Competitive positions in the marketplace

D. country-or-origin perceptions

A company has several options when its products are competitively priced but their place of origin turns consumers off. The company can consider ________.

1. re-packaging the product to disguise the country of origin
2. co-branding
3. reducing their country of origin mentions in their advertising
4. re-branding the product to disguise the country of origin
5. co-production with a foreign company that has a better name.

E. co-production with a foreign company that has a better name

Most brands are adapted to some extent to reflect significant differences in ________, ________, competitive forces, and the legal and political environment.

1. consumer behavior, brand development
2. business mission, brand development
3. strategy and consumer behavior
4. programs and marketing communications
5. political and social mores differences

A. consumer behavior, brand development

Disadvantages to global marketing include differences in consumer needs, wants, and usage patterns for products; difference in consumer response to marketing-mix elements; differences in brand and product development and the competitive environment; and ________.

1. differences in marketing institutions
2. differences in language and consumer expectations
3. differences in product performance
4. differences in management’s reaction to the marketplace
5. none of the above

A. differences in marketing institutions

Marketers must also adapt sales promotion techniques to different markets. Several European countries have laws preventing or limiting sales promotion tools such as discounts. In Germany, Lands’ End could not advertise its ________.

1. woman’s bathing suits
2. sale price
3. close-out specials
4. end-of-the-season sale
5. money-back guarantee

E. money-back guarantee

Companies can manage their international marketing activities in three ways. These include, through export departments, international divisions, ________.

1. or a global organization
2. or from a fixed corporate headquarters
3. or through a strong marketing department in the “host” country
4. and through local marketing efforts
5. none of the above

A. or a global organization

Bartlett and Ghoshal have identified three organizational strategies for international firms. These are: (1) a global strategy treats the world as a single market; (2) a multinational strategy treats the world as a portfolio of national opportunities; and (3) ________.

1. a local strategy standardizes all of the local elements
2. the marketing strategy identifies those elements assigned to a country and uses those elements plus corporate’s contribution in the marketing plan
3. a “glocal” strategy standardizes certain core elements and localizes other elements
4. assumes that there are no “local” or multinational differences in formulating the marketing mix
5. none of the above

C. a "glocal" strategy standardizes certain core elements and localizes other elements

A small firm has decided to enter the international market. At the present time, the firm has decided to enter only one country. What is the next step in the decision making process if the firm is to continue with its plans?

1. Deciding on the marketing organization.
2. Deciding on the marketing program.
3. Deciding how to enter the market.
4. Deciding whether to go abroad.
5. Deciding which markets to enter.

C. Deciding how to enter the market

When Microsoft introduces a new form of Windows software, the first-mover approach is preferred. Microsoft would then tend to use which form of entry strategy?

1. Market attractiveness
2. Continuous
3. Born global
4. Sprinkler
5. Waterfall

D. Sprinkler

Approximately 85 percent of the world’s population lies outside of the developed nations and prosperous part of the world. In attempting to reach these markets, where income and purchasing power is diminished, marketers could review their service by ________.

1. offering lower sale prices and smaller packaging
2. conducting business as usual in these countries
3. offering lower sales prices but higher packaging sizes
4. increasing spending in these countries
5. decreasing expenditures in these countries until the country has fully developed for their products.

A. offering lower sale prices and smaller packaging

You small firm has decided to begin exporting to a foreign country. Available to you are the five modes of entry. Your company has decided on direct exporting as its first venture into the foreign markets. What would the firm’s next step in the exporting process be, considering that the next step involves increased risk and commitment to the processes?

1. Indirect exporting
2. Direct exporting
3. Joint venture
4. Direct investment
5. Licensing

E. Licensing

James Franks works out of Miami and buys locally produced manufacturer’s products and sells them abroad mainly to Caribbean nations. Mr. Frank’s is ________.

1. a domestic-based export merchant
2. a domestic-based export agent
3. a cooperative organization
4. an export-management company
5. indirect exporting

A. a domestic-based export merchant

Mr. Day and Ms. Pound represent a number of producers and carry on exporting activities for each of them. As a result, Mr. Day and Ms. Pound’s firm come under the administrative control of these producers. How would you describe Mr. Day and Ms. Pound’s firm?

1. Indirect exporters
2. Cooperative organization
3. Direct exporters
4. Agents
5. Joint venture

B. Cooperative organization

Your firm has decided to enter the international market with your product called “Trema’” a new pocket organizer/cell phone combination. In your discussions about the marketing plans, your CMO has decided that no changes will be/are necessary in either the marketing mix or product for export. What form of marketing strategy is the CMO advocating?

1. Collectivism
2. Individualism
3. Adapted marketing mix
4. Engineering-driven marketing mix
5. Standardized marketing mix

E. Standardized-marketing mix

For the launch of “Trema’” the CMO has decided on no changes to either the marketing mix or the product necessary. This introduction is described as ________.

1. design change
2. straight extension
3. product adaptation
4. regional version
5. market version

B. straight extension

Finnish cellular phone superstar Nokia customized its 6100 series phone for every major market in which it sells the product. In Asia, for example, the developers raised the ring volume so that it could be heard on the crowded Asian streets. This kind of adaptation is called ________.

1. straight extension
2. market adaptation
3. regional version
4. city version
5. country version

C. regional version

When the National Cash Register Company reintroduced its crank-operated cash registers in Latin America and Africa, it was practicing what form of invention?

1. Backward invention
2. Forward invention
3. Product innovation
4. Product invention
5. None of the above

A. Backward Integration

Your firm has decided to enter the international market with your product called “Trema’” a new pocket organizer/cell phone combination. In your discussions about the marketing plans, your CMO has decided that your firm will use the same advertising program from the “home” market to the new foreign markets. Your CMO is advocating ________.

1. product adaptation
2. dual adaptation
3. straight extension
4. communication adaptation
5. none of the above

D. Communication adaption

The Trema’ launch was a success! Now, a year later, you have been receiving calls from U.S. dealers complaining that Trema’ is available from international distributors at prices 50 percent less than the U.S. price. You are faced with the ________ problem due to the international success of your product.

1. gray market
2. export/import problem
3. overstocks
4. distributor relationships
5. none of the above

A. gray market

Too many U.S. firms think their job is done once the product leaves the factory for the foreign country. These firms do not pay attention to how the product moves within the foreign country. There are three major links between seller and ultimate buyer in the foreign country. The first link is ________. where the export department or international division makes decisions on channels and other marketing-mix elements.

1. channel partners
2. corporate headquarters
3. seller’s international marketing headquarters
4. advertising agencies
5. host country corporate offices

C. Seller's international marketing headquarters

The second link, ________ gets the products to the borders of the foreign nation and includes the types of intermediaries that will be used, the type of transportation, and the financing and risk arrangements.

1. channels between nations
2. channels within foreign nations
3. seller’s international marketing headquarters
4. seller’s corporate offices
5. host country executive offices

A. Channels between nations

The international division’s corporate staff consists of functional specialists who provide services to various operating units. Operating units can be organized several ways. Your firm has a president of your division who reports to the president of the international division. This defines your organization as having a ________.

1. international company
2. world product group
3. geographical organization
4. international subsidiaries
5. none of the above

D. international subsidiaries

If you were the CEO of a company that was truly a global organization, you would have some decisions to make regarding corporate strategy. Bartlett and Ghoshal have distinguished three organizational strategies one of which is to ________.

1. treat the world as a single market
2. treat the world as a multiple markets
3. treat the world as a set of international markets
4. treat the world as a subset of the “global” market

A. treat the world as a single market

The favorability of country-of-origin perceptions must be considered both from a domestic and foreign perspective. In the domestic market, country-of-origin perceptions may stir consumers’ ________ or remind them of the past.

1. availability of foreign products
2. patriotic notions
3. product-development
4. diversification
5. concentric

B. patriotic notions

Bartlett and Ghoshal have proposed circumstances under which different approaches work best. In their book, Managing Across Borders, they describe forces that favor “global integration” (capital-intensive production, and ________).

1. homogeneous demand
2. competitive positioning
3. distinctive advantage
4. need for market share
5. corporate culture

A. homogeneous demand

Exxon used the slogan “Put a tiger in your tank” across countries with minor variations and gained international recognition. This is an example of ________.

1. implementation
2. strategy formulation
3. communication adaptation
4. functional analysis
5. dual adaptation

c. communication adaption

Firm’s in general prefer to enter countries that: (1) rank high on market attractiveness; (2) are low in market risk; and (3) ________.

1. in which they have a product alliance
2. in which they would have a competitive advantage
3. in which they would have a pricing advantage
4. in which they would have a service advantage
5. in which they would have a promotional advantage

B. in which they would have a competitive advantage.