Question 1

Which of the following statements is true about licensing?

Accepted Answer

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. 
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.

Question 2

Straight extension of the product means ________.

Accepted Answer

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

Question 3

Which of the following is a risk that firms must consider prior to expanding abroad?

Accepted Answer

A)  The domestic consumers prefer low-priced products. 
B)  The market in the foreign country may be too similar to the domestic market. 
C)  Consumers in the foreign country are very particular about the quality of the goods they consume. 
D)  The foreign country has very low pollution control standards. 
E)  The foreign country's business culture may be too different from the domestic country. 
A)  The domestic consumers prefer low-priced products. 
B)  The market in the foreign country may be too similar to the domestic market. 
C)  Consumers in the foreign country are very particular about the quality of the goods they consume. 
D)  The foreign country has very low pollution control standards. 
E)  The foreign country's business culture may be too different from the domestic country.

Question 4

Product adaptation involves ________.

Accepted Answer

A)  altering the product to meet local preferences with no change in communication strategy 
B)  altering the product to meet minimum acceptable standards 
C)  altering both the product and the communication strategy to meet local preferences 
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)  altering the product to meet local preferences with no change in communication strategy 
B)  altering the product to meet minimum acceptable standards 
C)  altering both the product and the communication strategy to meet local preferences 
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

Question 5

According to Hofstede, cultures with weak uncertainty avoidance are best described as ________.

Accepted Answer

A)  collectivist 
B)  hierarchical 
C)  egalitarian 
D)  risk-averse 
E)  risk-tolerant 
A)  collectivist 
B)  hierarchical 
C)  egalitarian 
D)  risk-averse 
E)  risk-tolerant

Question 6

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

Accepted Answer

A)  countries in which the company feels comfortable with the language, laws, and culture 
B)  countries that are located close 
C)  countries that the home country's management team have visited 
D)  countries that have no trade barriers 
E)  countries with good infrastructure and stable political environment 
A)  countries in which the company feels comfortable with the language, laws, and culture 
B)  countries that are located close 
C)  countries that the home country's management team have visited 
D)  countries that have no trade barriers 
E)  countries with good infrastructure and stable political environment

Question 7

Which of the following can cause a firm to choose joint ventures as a mode of expansion into foreign markets?

Accepted Answer

A)  excellent managerial resources 
B)  lack of sufficient finances 
C)  lack of redtapism in the host country 
D)  preferences of target consumers in the host country 
E)  psychic proximity of the host country 
A)  excellent managerial resources 
B)  lack of sufficient finances 
C)  lack of redtapism in the host country 
D)  preferences of target consumers in the host country 
E)  psychic proximity of the host country

Question 8

Most companies would prefer to remain domestic if their domestic market were large enough. Yet several factors are drawing more and more companies into the international arena. List some of these factors.

Accepted Answer

Some of the factors are: (1) Some foreig

Question 9

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

Accepted Answer

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 
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

Question 10

The ultimate form of foreign investment is direct ownership of foreign-based assembly or manufacturing facilities.

Accepted Answer

A) True 
 B)False

Question 11

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 ________.

Accepted Answer

A)  foreign-based distributors or agents 
B)  domestic-based export department 
C)  export merchants in foreign countries 
D)  export-management companies 
E)  traveling export sales representatives 
A)  foreign-based distributors or agents 
B)  domestic-based export department 
C)  export merchants in foreign countries 
D)  export-management companies 
E)  traveling export sales representatives

Question 12

Whirlpool took a 53% stake in the Dutch electronics group Phillips' home appliances business to leapfrog into the European market. This is an example of a ________.

Accepted Answer

A)  straight extension 
B)  joint venture 
C)  contract manufacturing agreement 
D)  licensing agreement 
E)  franchising agreement 
A)  straight extension 
B)  joint venture 
C)  contract manufacturing agreement 
D)  licensing agreement 
E)  franchising agreement

Question 13

James Franks lives in Miami. He buys local products from manufacturers in Miami and other parts of Florida and sells them abroad, mainly to Caribbean nations. Mr. Franks is a(n)________.

Accepted Answer

A)  domestic-based export merchant 
B)  domestic-based export agent 
C)  cooperative agent 
D)  export-management agent 
E)  direct exporting agent 
A)  domestic-based export merchant 
B)  domestic-based export agent 
C)  cooperative agent 
D)  export-management agent 
E)  direct exporting agent

Question 14

When companies are setting prices in different countries, the problem with setting a market-based price in each country is that ________.

Accepted Answer

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 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)  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 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

Question 15

Companies enter the international market only when their domestic markets are saturated.

Accepted Answer

A) True 
 B)False

Question 16

Management contracts offer foreign owners the opportunity to manage businesses for a fee.

Accepted Answer

A) True 
 B)False

Question 17

In a sprinkler approach to international expansion, ________.

Accepted Answer

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 
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

Question 18

Smaller packaging and lower sales prices are often critical in markets where incomes are limited.

Accepted Answer

A) True 
 B)False

Question 19

WayToGrow Inc. is one of the most popular brand 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 ________.

Accepted Answer

A)  shotgun approach 
B)  continuous approach 
C)  born global approach 
D)  sprinkler approach 
E)  waterfall approach 
A)  shotgun approach 
B)  continuous approach 
C)  born global approach 
D)  sprinkler approach 
E)  waterfall approach

Question 20

If Kellogg's offered different varieties of breakfast cereals in India as compared to Australia, and also positioned its products differently in the two countries, then Kellogg's would be engaging in dual adaptation.

Accepted Answer

A) True 
 B)False

Exam 21: Tapping into Global Markets

Which of the following statements is true about licensing?

Straight extension of the product means ________.

Which of the following is a risk that firms must consider prior to expanding abroad?

Product adaptation involves ________.

According to Hofstede, cultures with weak uncertainty avoidance are best described as ________.

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

Which of the following can cause a firm to choose joint ventures as a mode of expansion into foreign markets?

Most companies would prefer to remain domestic if their domestic market were large enough. Yet several factors are drawing more and more companies into the international arena. List some of these factors.

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

The ultimate form of foreign investment is direct ownership of foreign-based assembly or manufacturing facilities.

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 ________.

Whirlpool took a 53% stake in the Dutch electronics group Phillips' home appliances business to leapfrog into the European market. This is an example of a ________.

James Franks lives in Miami. He buys local products from manufacturers in Miami and other parts of Florida and sells them abroad, mainly to Caribbean nations. Mr. Franks is a(n)________.

When companies are setting prices in different countries, the problem with setting a market-based price in each country is that ________.

Companies enter the international market only when their domestic markets are saturated.

Management contracts offer foreign owners the opportunity to manage businesses for a fee.

In a sprinkler approach to international expansion, ________.

Smaller packaging and lower sales prices are often critical in markets where incomes are limited.

If Kellogg's offered different varieties of breakfast cereals in India as compared to Australia, and also positioned its products differently in the two countries, then Kellogg's would be engaging in dual adaptation.

Defining Marketing for the 21st Century

Developing Marketing Strategies and Plans

Collecting Information and Forecasting Demand

Conducting Marketing Research

Creating Long-Term Loyalty Relationships

Analyzing Consumer Markets

Analyzing Business Markets

Identifying Market Segments and Targets

Creating Brand Equity

Crafting the Brand Positioning

Competitive Dynamics

Setting Product Strategy

Designing and Managing Services

Developing Pricing Strategies and Programs

Designing and Managing Integrated Marketing Channels

Managing Retailing, Wholesaling, and Logistics

Designing and Managing Integrated Marketing Communications

Managing Mass Communications: Advertising, Sales Promotions, Events and Experiences, and Public Relations

Managing Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling

Introducing New Market Offerings

Managing a Holistic Marketing Organization for the Long Run

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