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Terms in this set (95)Globalization refers to the process by which goods, services, capital, people, and ideas B. C. D. E. b Goods, services, capital, and people can all flow across national boundaries due to globalization. The components of global market assessment include all of the following EXCEPT B. C. D. E. a The four components of a global market assessment are economic analysis, sociocultural analysis, infrastructure/technology analysis, and analysis of government actions. Chris is gathering information about the general economic environment in Nepal. He will look for information about the general economic environment, market size and population growth rate, and B. C. D. E. b Economic analysis includes metrics such as the general economic environment, market size and population growth, and real income. To determine the market potential for its particular product or service, a firm should use B. C. D. E. e The market potential for a firm depends on many variables, and no one metric can offer a complete picture of the economic environment in a country. As a result, the best approach is to use many measures in an analysis. Manufacturers would prefer to produce in a country with a trade __________, because it signals a greater opportunity to export products to more markets. B. C. D. E. a A country with a trade surplus does more exporting than importing. This offers an advantage to manufacturers in that country. The most common measure of market potential of an economy is a country's B. C. D. E. b Gross domestic product (GDP) measures the market value of goods and services produced by a country in a year, and is the most widely used of the various economic metrics. GDP is defined as B. C. D. E. c Gross domestic product (GDP) measures the market value of goods and services produced by a country in a year, and is the most widely used of the various economic metrics. Gross national income equals GDP B. C. D. E. d Gross national income (GNI) consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy). In other words, U.S. firms that maintain operations abroad count their income from those operations in the GNI but not the GDP. The Big Mac
Index is a novel measure of B. C. D. E. b The Big Mac Index compares the price of a Big Mac wherever it can be bought around the world. The lower the cost of the Big Mac, the higher (according to this index, at least) the purchasing power of the country's currency. According
to purchasing power parity theory, if __________ is/are in equilibrium, products will cost the same in each country. B. C. D. E. e The purchasing power parity (PPP) theory holds that if exchange rates are in equilibrium, products should cost the same in each country. In that case, the Big Mac Index (an index comparing the cost of a Big Mac wherever it is sold throughout the world) would be identical for each country. Economic measures like GDP and GNI do not fully account for a country's economic health because they only measure B. C. D. E. a The GDP and GNI look at material output of the economy, failing to take other issues (such as quality of life) into account. Many developed countries are experiencing __________ population growth. B. C. D. E. b In general, developed countries are experiencing zero or negative population growth, while most less developed nations are experiencing rapid population growth. 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 B. C. D. E. a In general, developed countries are experiencing zero or no population growth, while most less developed nations are experiencing rapid population growth. These trends are expected to shift today's patterns of purchasing power. The shift of population from rural to urban areas in countries such as India helps global marketers by B. C. D. E. b Long supply chains are necessary to reach rural populations and therefore add costs to products. When considering global marketing opportunities in Bangladesh, Tom asked the question, "How will we get it there?" Tom is concerned about __________ capabilities in
Bangladesh. B. C. D. E. d Transportation—or "How will we get it there?"—is one aspect of infrastructure. 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
problems in __________ exist in many African markets. B. C. D. E. b Communication—including telephony—is one aspect of infrastructure analysis. Communication systems are weak in some developing nations. When Ben evaluated the commercial infrastructure in Mauritius, he considered the
island's B. C. D. E. b The commercial infrastructure consists of systems—including legal, banking, and regulatory systems—that allow markets to function. Changes in tariffs and quotas are B. C. D. E. c Tariffs protect
domestic producers by B. C. D. E. a In most cases, countries use tariffs to reduce
foreign competition, but tariffs are also used B. C. D. E. b Tariffs are used primarily to raise the prices of imported goods; however, they can also be used to punish countries engaging in trade practices that are seen as unfair, by making it harder for their goods to find buyers. A __________ limits the quantity of imported merchandise, thus minimizing competition faced by domestic products. B. C. D. E. e Exchange control refers to the regulation of a country's B. C. D. E. e When the value of the dollar declines in relation to other currencies, it benefits U.S. marketers who B. C. D. E. a U.S. firms exporting to other countries can sell their goods at lower relative prices when the value of the U.S. dollar drops, increasing sales opportunities. Which of the following is NOT one of the major trade agreements affecting global marketing? B. C. D. E. c The GNI is the gross national income, a measure of a country's economic output. The others are trade agreements.
Marketers considering operations and trade with a specific country must consider whether the country belongs to a trading bloc. A trading bloc is a group of countries B. C. D. E. a A trading bloc consists of countries who have signed a cooperative trade agreement. Which of these trade agreements represents the highest level of integration among participating nations? B. C. D. E. b The European Union (EU) represents the highest level of integration, including a common currency. Global
businesses often find it particularly difficult to understand the __________ of a country's culture. B. C. D. E. b While symbols, ceremonies, and dress are visible artifacts of a culture, the underlying values can be more difficult to observe and understand. 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 down to sociocultural factors. He was looking at both __________ and __________. B. C. D. E. d 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. Geert
Hofstede's cultural dimensions concept focuses on five dimensions of __________ in a country. B. C. D. E. b Hofstede's cultural dimensions attempt to classify underlying cultural values along five dimensions. Which of the following is NOT one of Hofstede's cultural dimensions?
B. C. D. E. b Hofstede's five dimensions are power distance, uncertainty avoidance, individualism, masculinity, and time orientation. Marketers sometimes use Hofstede's cultural dimensions to design marketing campaigns B. C. D. E. d Culture affects B. C. D. E. e Culture affects every aspect of the purchase decisions consumers make. Generally, firms entering foreign markets begin with B. C. D. E. a Many firms choose to enter foreign markets first with less risky strategies (such as exporting), moving to riskier strategies as their knowledge and experience grow. When entering a foreign market, the least risky strategy is B. C. D. E. b The least risky strategy is exporting because the firm does not own or establish anything in the country. The firm simply ships its products to buyers (whether consumers or business buyers) in the foreign country. Global expansion often begins with B. C. D. E. b Often, a firm may receive an order from another country and, as a result, be led to consider global expansion. Many of the best-known American retailers, like Starbucks and McDonalds, have expanded globally using B. C. D. E. a Franchising is a contractual agreement between two companies in which one pays for the right to use the brand and concept developed by the other. Fast food restaurant chains are one category in which franchising is widely used. 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 likely use a(n) __________ strategy. B. C. D. E. a Exporting is the lowest-risk strategy; however, for a food service business it probably makes more sense to use franchising, another relatively low-risk global expansion strategy. Franchising is a contractual arrangement between two companies, allowing one to use a brand and concept developed by the other. Domestic firms developing a global entry strategy might consider franchising; however, the disadvantages need to be considered. Which of these is NOT a disadvantage of franchising? B. C. D. E. d Franchising is actually among the lower-risk global expansion strategies. When firms pool their resources to enter a new market, they create
a(n) B. C. D. E. c A joint venture is a business formed when two or more firms pool their resources. It is a medium-risk strategy for global market entry. Strategic alliances are slightly different in that firms collaborate but do not pool their resources. China, like many other
countries, usually requires entering firms to create _________ when expanding into their markets, limiting outsiders' control of businesses. B. C. D. E. c A joint venture is a business formed when two or more firms pool their resources. It is a medium-risk strategy for global market entry. By requiring that foreign firms engage in joint ventures to enter the market, China ensures that a local firm retains partial ownership of the venture. Of the five strategies for entering new markets, direct investment creates the B. C. D. E. b Direct investment is the riskiest strategy for global expansion; however, it also offers the greatest potential rewards. 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. B. C. D. E. d Direct investment is a market entry strategy in which the firm directly owns property and equipment in the foreign market. NCD has the resources and experience necessary for a firm contemplating direct investment; in addition, direct investment offers NCD the control of business operations that it seeks. Global
segmentation, targeting, and positioning (STP) are more complicated than local STP, in part because B. C. D. E. a Global segmentation, targeting, and positioning (STP) is complicated because differences in country culture, politics, or the economy may lead consumers to view their roles differently, and these differences can be hard for an entering company to understand. Global consumers are definitely not homogeneous. Global segmenting, targeting, and positioning are more complicated than domestic segmenting and positioning
because of cultural nuances, significant subcultures within countries, and B. C. D. E. c Global segmentation, targeting, and positioning (STP) is complicated because differences in country culture, politics, or the economy may lead consumers to view their roles differently, and these differences can be hard for an entering company to understand. Cultural nuances, subcultures, and consumers' different views of their roles in different countries can make __________ complicated. B. C. D. E. b Global segmentation, targeting, and positioning (STP) is complicated because differences in country culture, politics, or the economy may lead consumers to view their roles differently, and these differences can be hard for an entering company to understand. During
the early stages of globalization, in the 1950s and 1960s, _______________ were uniquely positioned in the global marketplace because they had the skills necessary to develop, promote, and market brand name consumer products. B. C. D. E. a In the 1970s and 1980s, __________ dominated the global marketplace because they could exploit their skills in production, materials management, and new product development. B. C. D. E. b Unlike the 1950s and 1960s, when large U.S. firms had the skills needed to dominate global selling, Japanese firms dominated in the 1970s and 1980s through their skills related to production and development. The most important consideration when a firm chooses a global product strategy should be B. C. D. E. c Just as with domestic marketing, all global marketing decisions should consider the needs of the target market. Tariffs, quotas, and currency exchange policies affect global B. C. D. E. b Global pricing strategies should be consistent with B. C. D. E. c As with domestic marketing, pricing strategies for global products should be consistent with the positioning of the product. Global marketers are under constant pressure to shorten distribution channels to B. C. D. E. e Distribution channels tend to be longer and more complex within global contexts than in domestic markets. For this reason, distribution channel efficiency is a critical factor in keeping costs down in global marketing. Global marketers typically find distribution in developing countries is more complex because B. C. D. E. a Distribution channels tend to be longer and more complex within global contexts than in domestic markets. For this reason, distribution channel efficiency is a critical factor in keeping costs down in global marketing. Graham had developed an extremely successful
advertising and promotion campaign for a client in the United States. The client wanted to roll out the same campaign to markets worldwide, but Graham cautioned against doing this, most likely because B. C. D. E. a When designing communication strategies for global markets, differences in languages, customs, and culture must be carefully considered. A campaign that works well in one country might be ineffective or even offensive in another. Celia's firm has developed a breakfast cereal targeted toward children. Rather than compete in the mature U.S. market, she has decided instead to introduce the product in Europe, where she feels it will be innovative. Her advertising agency urged caution because B. C. D. E. a Raegulation of advertising—especially to children—can vary widely from one country to another. Brands can be extremely valuable domestically, but challenging internationally. Companies can help to overcome language difficulties in using brands by B. C. D. E. d By choosing a meaningless brand name, the company is free to attach its own meanings to the name without the risk of the name suggesting unintended characteristics because of its meaning in a particular language. Which of the following is one of the
global entry strategies? B. C. D. E. a Direct investment is one of the global entry strategies. When a company decides to minimize risk and enter a global market by shipping its products to buyers in other countries, this is known as B. C. D. E. a This example refers to exporting, in which the company simply sells its products to either end consumers or a business buyer in another country. This is the least risky global entry strategy. Which of the following best describes the direct investment global entry strategy? B. C. D. E. a Direct investment involves formation of wholly owned subsidiaries in which the firm retains complete control and ownership. The term "trade deficit" refers to B. C. D. E. e When shopping for a car, you notice a significant price gap between domestic
and imported cars, with the imported cars being much more expensive. This could be the result of B. C. D. E. a A tariff is a tax levied on a good imported into a country, which could account for the higher price of foreign cars. When entering into a franchise agreement, what term is used to
refer to the firm that is granted the right to operate a business using the franchise name and business concept? B. C. D. E. a Franchising is a contractual agreement between a firm, the franchisor, and another firm or individual, the franchisee. The franchisee can operate a business using the name and business format developed and supported by the franchisor. Which of the following statements best describes global expansion through a strategic alliance? B. C. D. E. b A strategic alliance refers to a collaborative relationship that does not create an equity partnership—in other words, the firms do not invest in each other. They may, though, rely on each other to provide certain business functions that an opportunity requires. Which of the following global entry strategies is being used if a company collaborates with a competitor on a globally based opportunity for mutual benefit, but the competitors do not invest in each other? B. C. D. E. c A strategic alliance is a collaborative relationship that does not create an equity partnership. Competitors might enter into this kind of arrangement if both could profit from it. Since they do not invest in each other, there is enough distance that they could continue to compete in other arenas. The United States imports more goods from China than it exports to China. This is known as B. C. D. E. d When Ford Motor Company decided to sell the Fiesta—in the same form and design—around the globe, instead of selling different versions in different
countries, this was part of Ford's global ________ strategy. B. C. D. E. e Which of the following trade agreements is designed to manage and promote trade activities for the United States,
Canada, and Mexico? B. C. D. E. a The NAFTA is between the United States, Canada, and Mexico. Ford Motor Company decided to sell the Fiesta around the globe. Which of the following would be an example of glocalization of the Fiesta? B. C. D. E. c Glocalization refers to a global product strategy with a common product around the world but differences in the promotion strategy. One Laptop Per Child is a nonprofit initiative with the goal of making extremely low-cost laptops available to children in the developing world to help them learn skills, with the goal of helping them to learn skills needed in today's workforce. If some of the low-cost technology developed for this laptop found its way into
laptops created for U.S. consumers, this would be an example of B. C. D. E. b Reverse innovation occurs when an innovation is introduced first in the developing world and then moves to developed countries, which is the opposite of the usual path for innovations. Which
of these is NOT one of the BRIC countries? B. C. D. E. a The BRIC countries are Brazil, Russia, India, and China. What do the BRIC countries have in common? B. C. D. E. e Which of the following is currently a negative factor
for foreign investment in Russia? B. C. D. E. c Bribery is widely practiced in Russian business, creating ethical problems for foreign investors. Which of the following is currently a negative factor for foreign investment in India? B. C. D. E. b India presently lacks a modern supply chain infrastructure; however, with recent liberalization of regulations on foreign investment, this may change. Which of the following is a potential negative factor for foreign investment in China? B. C. D. E. a Which of the BRIC countries has the highest illiteracy rate? B. C. D. E. c In India, approximately 39 percent of the adult population is illiterate, compared with 11 percent in Brazil, 7.8 percent in China, and less than 1 percent in Russia. Why should
marketers be aware of the BRIC countries? B. C. D. E. c Which statement about India's population is TRUE? B. C. D. E. c India's highly skilled workforce holds great attraction for firms that hope to expand using local talent, especially in technical fields. With a median age of 34.1 years, ________ is one of the most rapidly aging countries in the world. B. C. D. E. b Although China's median age is slightly younger than that of the United States currently, at 34.1 years, the application of the one-child policy means that China is one of the most rapidly aging countries in the world. Changes in _________ have been a driving force for growth in global markets for decades. B. C. D. E. d Changes in technology, especially communications, have been a driving force for growth in global markets for decades. The telegraph, radio, television, computer, and Internet have increasingly connected distant parts of the world. Which country has a large literate population, which has helped it move up to become the world's seventh largest economy? B. C. D. E. c Currently, Brazil is the world's seventh largest economy, but predicted growth rates indicate it will move into the fifth spot within a few years. This growth has been aided by a large, literate population and the impositions of social programs that have allowed more than half of the 190 million Brazilians to enter the middle class. Which country is projected to become Europe's largest online market in the next few years, with Internet users
growing at a rate of 15 percent annually? B. C. D. E. e The text states that Russia is likely to become Europe's largest online market in the next few years. Which country's government has recently made significant changes that will modernize the retail environment, such as allowing joint ventures and direct ownership in
some cases? B. C. D. E. c Foreign retailers that carry multiple brands, like Walmart, are now allowed to own up to 51 percent of joint ventures in India, and retailers that carry only their own brand, like Nike, can now own 100 percent of their Indian businesses. Which country has embraced market-oriented economic development in
spite of maintaining communist political ideals? B. C. D. E. c Which country has a rapidly aging population due to its one-child policy? B. C. D. E. d Although China's median age is slightly younger than that of the United States currently, at 34.1 years, the application of the one-child policy means that China is one of the most rapidly aging countries in the world. Once a firm has done an analysis of the most viable markets for its products, then it must next B. C. D. E. b It must next conduct an internal analysis of its capabilities. This analysis includes an assessment of the firm's access to capital, the current markets it serves, its manufacturing capacity, its proprietary assets, and the commitment of its management to the proposed strategy. Mary wants to sell her products in Europe, since they are doing well in the U.S. She does not have a lot of capital and is risk-averse, so she most likely would choose to begin with B. C. D. E. b Exporting is the least financially risky global entry strategy, so Mary most likely would choose this route. Franco, a former retailer, has been living in the United States for five years and wants to start a business. He does not have an existing firm or a product, and he doesn't have a
lot of capital, but since he loves McDonald's food, he decides to B. C. D. E. a McDonald's is a global franchisor. A franchising contract allows the franchisee to operate a business—a retail product or service firm or a B2B provider—using the name and business format developed and supported by the franchisor. Sydney's Emporium has 59 stores in the U.S. and wants to expand globally. Sydney's wants to achieve the highest possible returns, and is not concerned about pursuing a high-risk strategy as long as it maintains complete control over its stores. The best global entry strategy for Sydney's is most likely B. C. D. E. d When Ford introduced its Figo in India, it was responding
to B. C. D. E. c A company must continually monitor economic and social trends to protect its position within the market and adjust its products and marketing strategies to meet the changing needs of global markets. In this case, there was a clear trend toward smaller, less expensive cars. If you visit a Kentucky Fried Chicken restaurant in China, you will find congee, a rice porridge that can feature pork, pickles, mushrooms, and preserved egg, on the menu. This is an example of which global product strategy? B. C. D. E. e Congee would be a totally new product. Franz lives in a country where he and his friends
have disposable income, in spite of the fact that their average income is $650 per month, because they have no debt and don't save money. Franz most likely lives in B. C. D. E. b Russians have disposable income, because they generally live mortgage free; receive heavily subsidized electricity and gas; have very little debt (because credit was not available under communism); and have little interest in saving, because history has taught them that they were likely to lose any pensions they might have saved. Gandolph's Tires sells the same tire globally, but it uses different advertisements based on the country and culture. This is an example of B. C. D. E. b Referred to as glocalization, some firms also standardize their products globally but use different promotional campaigns to sell them. Unilever discovered that people in emerging economies could not afford to buy standard sizes of toothpaste or shampoo, so Unilever started selling single-serve packets at very low prices. Later, Unilever discovered that the same approach worked in the U.S. and started also selling
them there. This is an example of B. C. D. E. a In reverse innovation, companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets. Core Publishing Company learned that when selling
overseas, local fulfillment can be more cost effective, and it can decrease delivery time and improve customer service. This is an example of a global _________ strategy. B. C. D. E. d In China,
state control of media is high, so companies are challenged to find ways to get their message to customers. This demonstrates one of the difficulties in crafting a global ________ strategy. B. C. D. E. a China
has three main languages, and many more dialects. This presents a particular challenge to developing a global ________ strategy. B. C. D. E. a Sets found in the same folderChapter 1799 terms Dmill14 chapter 18104 terms Dmill14 chapter 1995 terms Dmill14 chapter 1560 terms Dmill14
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