Global Marketing Management, 8E Warren J. Keegan Test Bank

Type:

Test Bank

Resource:

Global Marketing Management

Edition:

8th Edition

Author(s):

Warren J. Keegan Gautam Dutta

Global Marketing Management, 8e (Keegan) Chapter 1 Introduction to Global Marketing 1) One difference between domestic marketing and global marketing is the scope of activities.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) Marketing discipline varies from one region to another.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3) Marketers can always directly apply experience from one country to another or from one market to another.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 4) The old marketing concept focused on a customer-centric marketing approach.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 5) The strategic concept of marketing focuses on customer satisfaction in a socially responsible and sustainable way.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 6) A company's competitive advantage exists only in its price differentiation strategies.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 7) A company engaging in global marketing must standardize all elements of the marketing mix everywhere in the world.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 8) Global marketing requires marketers to behave in a way that is global and local at the same time by responding to similarities and differences in world markets.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 1 .

9) Market capitalization is defined as a company's total revenues in a given accounting period.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 10) Ethnocentric companies are sometimes referred to as global companies.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 11) Ethnocentric companies cater to the different needs of different world regions.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 12) A polycentric company views foreign operations as being secondary or subordinate to domestic operations.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 13) Global companies view world regions as unique and seek to develop an integrated regional strategy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 14) A regiocentric manager views the world outside his area of interest with an ethnocentric orientation.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 15) Geocentric companies are integrated on a global scale.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 16) Geocentric companies are based on a belief of home-country superiority.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 17) A polycentric orientation is diametrically different from an ethnocentric orientation.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2 .

18) Management vision is a driving force for global integration.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 19) Cost is a restraining force affecting globalization.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 20) Multinational companies adhere to the notion that the products that succeed in the home country are superior and, therefore, can be sold everywhere without adaptation.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 21) Trade agreements such as the European Union and NAFTA have decreased the pace of global integration.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 22) Most global markets do not exist in nature; they are created by marketing effort.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 23) The time and cost barriers associated with distance have increased over the past decade.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 24) A domestic company will have many times the revenue of a global company as it focuses only on local regions.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 25) A global company can leverage its experiences in any market in the world.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

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26) Countries protect local enterprise and interests by maintaining control over market access and entry.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 27) Government regulations on advertising and promotion are similar across all world countries.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 28) Which of the following is a focus of the new concept of marketing?

A) Mmaking a profit is the only end result of selling products.

B) emphasizing the product rather than the end consumer C) achieving objectives by pushing products toward consumers D) using integrated marketing mix to achieve profits Answer: D AACSB: Analytical thinking Difficulty: Easy 29) Which of the following is a marketing mix element?

A) profit B) promotion C) potential D) package Answer: B Difficulty: Easy 30) Which of the following statements is true about the strategic concept of marketing?

A) Its objective is to maximize stakeholder benefits.

B) It has a product-centric marketing focus.

C) It emphasizes marketing from a company-centric paradigm.

D) Its focus is only on consumers and not their societies.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 31) Which of the following statements is true about global marketing?

A) Marketing practices must vary between different market segments.

B) Customers and markets across regions are considered similar.

C) Transferring irrelevant experience between markets may be beneficial.

D) Marketing initiatives cannot include more than one marketing mix element.

Answer: A AACSB: Analytical thinking Difficulty: Easy

4 .

32) Which of the following statements best describes the phrase "global localization" in a nutshell?

A) A global product must be the same product everywhere without modifications in the marketing mix.

B) A global marketer must push local markets to accept global products.

C) A global marketer must adapt product marketing mix to the similarities and differences in the world market.

D) A global product must be a different product everywhere across the world regions.

Answer: C AACSB: Analytical thinking Difficulty: Easy 33) A company that sees only the similarities between the domestic and the world market is said to have a(n) ________ orientation.

A) regiocentric B) ethnocentric C) concentric D) polycentric Answer: B Difficulty: Easy 34) Levy Inc., a U.S.-based smartphone manufacturer, extends its line of high-end smartphones to the Asian market to capitalize on the high demands for smartphones. Owing to its huge success in the United States, Levy uses the same set of marketing mix in the Asian markets. In this case, the company's management orientation is referred to as ________.

A) regiocentric B) polycentric C) concentric D) ethnocentric Answer: D AACSB: Analytical thinking Difficulty: Hard 35) In a(n) ________ international company, foreign operations are viewed as being secondary or subordinate to domestic operations.

A) ethnocentric B) concentric C) polycentric D) regiocentric Answer: A Difficulty: Easy

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36) Which of the following management orientations views only the differences in the world regions?

A) ethnocentric B) regiocentric C) polycentric D) concentric Answer: C Difficulty: Easy 37) Which of the following statements is true of a polycentric company?

A) Its orientation is based on a belief in home-country superiority.

B) Its marketing management is decentralized.

C) It's generally referred to as a domestic company.

D) It views foreign operations as being secondary to domestic operations.

Answer: B AACSB: Analytical thinking Difficulty: Easy 38) A(n) ________ company typically has a regiocentric or geocentric management orientation.

A) multinational B) transnational C) domestic D) international Answer: B Difficulty: Easy 39) Which of the following management orientations provides a worldview and sees the similarities and differences in home and host countries?

A) ethnocentric B) polycentric C) concentric D) geocentric Answer: D Difficulty: Easy 40) Latour Boutiques, which is based in Europe, views each section within the European Union as a unique market and develops an integrated marketing strategy to sell its products. Due to its success in the European territory, Latour exports its products to other world markets sans any modifications. In this case, Latour's management orientation is typically ________.

A) concentric B) polycentric C) regiocentric D) geocentric Answer: C AACSB: Analytical thinking Difficulty: Hard 6 .

41) Which of the following companies is centralized in its market management strategies?

A) ethnocentric B) polycentric C) regiocentric D) geocentric Answer: A Difficulty: Easy 42) Which of the following companies typically has a polycentric management orientation?

A) transnational B) international C) domestic D) multinational Answer: D Difficulty: Easy 43) Which of the following orientations is based only on home-country superiority?

A) ethnocentric B) polycentric C) geocentric D) regiocentric Answer: A Difficulty: Easy 44) Which of the following is a driving force for global integration?

A) domestic focus B) market needs C) market differences D) national controls Answer: B AACSB: Analytical thinking Difficulty: Easy 45) Which of the following is a restraining force behind global integration?

A) market needs B) management vision C) strategic intent D) national controls Answer: D AACSB: Analytical thinking Difficulty: Easy

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46) A(n) ________ corporation tries to link world resources to world market opportunities.

A) ethnocentric B) geocentric C) polycentric D) concentric Answer: B Difficulty: Easy 47) Which of the following factors restrains ethnocentric companies from pursuing opportunities in the global market?

A) experience transfer B) scale economies C) global strategy D) management myopia Answer: D AACSB: Analytical thinking Difficulty: Moderate 48) What are the new concept of marketing and the Four Ps? Answer: The new concept of marketing, which appeared about 1960, shifted the focus of marketing from the product to the customer. The objective was still profit, but the means of achieving the objective expanded to include the entire marketing mix, or the Four Ps as they became known: product, price, place (channels of distribution), and promotion.

AACSB: Analytical thinking Difficulty: Easy 49) What is the value equation? Identify its various components and explain how the equation relates to a company's pursuit of competitive advantage.

Answer: The task of marketing is to create customer value that is greater than the value created by competitors. According to the value equation, value for the customer can be increased by expanding or improving product and/or service benefits, by reducing the price, or by a combination of these elements. Companies with a cost advantage can use this advantage to gain a sustainable competitive edge in any of the marketing mix elements: product, price, promotion, or place. Knowledge of the customer combined with innovation and creativity can lead to a total offering that offers superior customer value. If the benefits are strong enough and valued enough by customers, a company does not need to be the low-price competitor to win customers. On the other hand, the value equation may lead to a focus on price as the key element of competitive advantage.

AACSB: Analytical thinking Difficulty: Moderate

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50) What are the differences between regiocentric and geocentric management orientation?

Answer: In a company with a regiocentric orientation, management views regions as unique and seeks to develop an integrated regional strategy. A company with a geocentric orientation views the entire world as a potential market and strives to develop integrated world market strategies.

The geocentric orientation represents a synthesis of ethnocentrism and polycentrism; it is a worldview that sees similarities and differences in markets and countries and seeks to create a global strategy that is fully responsive to local needs and wants. A regiocentric manager might be said to have a worldview on a regional scale; the world outside the region of interest will be viewed with an ethnocentric or a polycentric orientation, or a combination of the two.

AACSB: Analytical thinking Difficulty: Moderate

9 .

Global Marketing Management, 8e (Keegan) Chapter 2 The Global Economic Environment 1) The macro dimensions of the environment are economic, social and cultural, political and legal, and technological.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) Economic growth remains concentrated at the high-income countries.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3) The more developed a country is, the scarcer the availability of economic data.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 4) Technology as a factor has contributed to the flattening of the world economy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 5) Countries in emerging markets have sustained high rates of growth by taking advantage of high labor costs.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) Global companies entering new markets will need to adapt their offerings, distribution systems, and operations to local demand and custom.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 7) Most countries of the world have a mixed system of allocation.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 8) There are no pure market or command allocation systems today.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

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9) According to the Heritage Foundation, the country with the highest degree of economic freedom is the United States.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 10) Low-income countries are typically referred to as industrialized nations.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 11) High-income countries are referred to as emerging markets.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 12) Low-income countries typically have low birth rates and high literacy rates.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 13) Another name for lower-middle income countries is industrializing countries.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 14) The nations of the G20 are among the most powerful nations of the postindustrial societies.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) A market can be defined as a group of people willing and able to buy a particular product or service.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 16) Location is the single most valuable economic indicator of potential for industrial products.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 17) Agricultural output and services, in particular, are often priced higher in relation to industrial output in developing countries than in industrial countries.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 2 .

18) Purchasing power differences can account for differential in demand of products and services, and also provide an indication on differences in costs.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 19) Purchasing power parity measures an economy's output in terms of demand and supply.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 20) The current account is a record of all long-term direct investment, portfolio investment, and other short- and long-term capital flows.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 21) In general, a country accumulates reserves when the net of its current and capital account transactions shows a deficit.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 22) Devaluation means that more of the home-country's currency is now needed to buy the same amount of a foreign currency.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 23) In a fixed exchange-rate system, the currency value is determined by demand and supply.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 24) The United States is an example of a country that follows a fixed exchange-rate system.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 25) The members of a customs union agree to the establishment of individual external trade barriers.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

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26) The Euro is a common currency adopted by the members of the European Union.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 27) The member states of the Commonwealth of Independent States (CIS) have signed agreements addressing issues of integration and cooperation with respect to economics, defense, and foreign policy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 28) A common market goes beyond the removal of internal barriers to trade and the establishment of common external barriers to the important next stage of eliminating the barriers to the flow of factors (labor and capital) within the market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 29) Member states of the North American Free Trade Agreement (NAFTA) are allowed to make separate bilateral treaties with nonmember states.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 30) The ASEAN Free Trade Area, or AFTA, was created in 1992 with the aim of promoting the region's competitive advantage as a single production area with the elimination of tariff and nontariff barriers among the member countries.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 31) Which of the following statements is true about world economy?

A) Countries in emerging markets have sustained low rates of growth.

B) Global competitors are deprived of new opportunities.

C) The emergence of global markets has displaced local ones.

D) The integration between all world regions has steadily decreased.

Answer: C AACSB: Analytical thinking Difficulty: Moderate

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32) Which of the following statements is true about the trends in world economy?

A) Global economic activity will shift from the East to the West.

B) The demand for natural resources will continue to grow.

C) Shifts in consumer segments will not affect the consumer marketplace.

D) An aging worldwide population will demand decreasing levels of productivity.

Answer: B AACSB: Analytical thinking Difficulty: Easy 33) Which of the following is characteristic of a pure market allocation system?

A) The consumers decide what goods will be produced and by whom.

B) The state determines the goods that consumers should use.

C) It has limited economic integration with the rest of the world regions.

D) It fails to utilize the market mix elements when demand exceeds supply.

Answer: A AACSB: Analytical thinking Difficulty: Easy 34) Which of the following is characteristic of a command allocation system?

A) The government's role is to ensure the protection of consumer rights.

B) Product distribution is handled by a large number of intermediaries.

C) The state makes decisions on what consumers should purchase.

D) Consumers allocate resources to the system.

Answer: C AACSB: Analytical thinking Difficulty: Easy 35) Which of the following is used to indicate the relative wealth of a country's citizenry?

A) Gross National Product B) Gross Output C) Gross Domestic Product D) Gross Value Added Answer: A Difficulty: Easy 36) With regard to Gross National Product per capita, which of the following categories of countries is considered to be developed?

A) lower-middle income B) high-income C) low-income D) upper-middle income Answer: B Difficulty: Easy

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37) Which of the following is characteristic of low-income countries?

A) sustained economic growth B) low engagement in agriculture C) high degree of urbanization D) heavy reliance on foreign aid Answer: D AACSB: Analytical thinking Difficulty: Easy 38) Which of the following categories of countries is referred to as a postindustrial country?

A) low-income B) upper-middle income C) lower-middle income D) high-income Answer: D Difficulty: Easy 39) Which of the following is the most valuable economic variable used to chart strategic plans for global market expansion of commercial products?

A) regulations B) competitors C) income D) location Answer: C Difficulty: Easy 40) ________ accounts for the largest share of output in less developed countries.

A) Education B) Agriculture C) Consumer goods D) Heavy industries Answer: B Difficulty: Easy 41) ________ provides the best comparison of the standards of living in the countries of the world.

A) Purchasing power parity B) Exchange rate C) Gross National Product per capita D) Gross National Income Answer: A Difficulty: Easy

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42) Which of the following is the primary output of the World Bank's International Comparison Program?

A) purchasing power parities B) currency fluctuations C) market demand and supply D) production costs Answer: A Difficulty: Easy 43) Which of the following can be perceived from measuring actual individual consumption across global markets?

A) Developed countries are likely to benefit more from full integration than developing countries.

B) Purchasing power differences do not account for differences in demand of products and services.

C) The living standards of high-income countries differ from low-income countries.

D) A vast majority of the world's income is concentrated in the lower-middle or upper-middle income countries.

Answer: C AACSB: Analytical thinking Difficulty: Moderate 44) Which of the following is the most important variable considered for identifying opportunities in the global economy to sell low-priced products?

A) middle-class income B) location of population C) demand in products D) cost of products Answer: B AACSB: Analytical thinking Difficulty: Easy 45) Which of the following portrays all the economic transactions of a country with the rest of the world?

A) balance of payments B) International Comparison Program C) purchasing power parity D) Gross National Product per capita Answer: A AACSB: Analytical thinking Difficulty: Easy

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46) Which of the following statements is true of global trade patterns?

A) The annual rate of output is less than the total merchandise trade.

B) In most countries, the share of trade as a percentage of the national economy has reduced.

C) Import and export growth has outpaced the rate of increase in GNP. D) The share of agriculture in exports has increased over the past decade.

Answer: C AACSB: Analytical thinking Difficulty: Moderate 47) ________ refers to the price of one currency in terms of another.

A) Tariff B) Exchange rate C) Duty D) National income Answer: B Difficulty: Easy 48) Which of the following is a characteristic of countries in a free trade area?

A) abolition of internal tariffs and quotas B) establishment of common external barriers C) removal of restriction on factor movements D) harmonization of economic, social, and regulatory policies Answer: A AACSB: Analytical thinking Difficulty: Moderate 49) Which of the following eliminates trade barriers to allow the harmonization of economic, social, and regulatory policies?

A) a customs union B) a common market C) a free trade area D) an economic union Answer: D Difficulty: Easy 50) Which of the following is a trade block created between Canada, Mexico, and the United States?

A) NAFTA B) SCCM C) CIS D) APEC Answer: A Difficulty: Easy

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51) Which of the following is an example of a customs union?

A) CSME B) European Economic Area C) NAFTA D) Mercosur Answer: D AACSB: Analytical thinking Difficulty: Easy 52) What are the characteristics of a low-income country?

Answer: Low-income countries share the following characteristics: 1. Limited industrialization and a high percentage of the population engaged in agriculture and subsistence farming 2. High birth rates and low literacy rates, especially among women and girls 3. Heavy reliance on foreign aid 4. High levels of poverty 5. Inequality of income distribution 6. Political instability and unrest due at least in part to disenfranchised social groups AACSB: Analytical thinking Difficulty: Easy 53) What are exchange rates? How do they affect the global economy?

Answer: Exchange rates are the price of one currency in terms of another. If exchange rates change, so do the prices of exports and imports. Countries whose exchange rates are depreciating will find their exports becoming more price competitive and their imports relatively more expensive. If a seller of products or services expects payment for exports in any denomination other than their home currency, the total home-country receipts will change depending on the exchange rate at the time payment is made. Because exchange rates can give a price advantage to producers, governments seek to manage exchange rates. This is done by using reserves to buy or sell foreign currencies. If reserves are not used, market supply and demand will decide the value of the currency. Countries can choose to devalue their currency purposefully to stimulate their economy's exports and limit imports.

AACSB: Analytical thinking Difficulty: Moderate

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Global Marketing Management, 8e (Keegan) Chapter 3 The Political, Legal, and Regulatory Environments of Global Marketing 1) Political risk tends to be higher in developing countries compared to industrialized countries.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) Many companies make efforts to minimize their tax liability by shifting the location of income.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 3) Creeping expropriation is said to have occurred when a previously expropriated property by the government is returned to the original owners.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 4) Expropriation is said to have occurred when a foreign national company dispossesses a homecountry company through uncompetitive practices.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 5) If a foreign company is taken over by the host-country government and some form of compensation is paid, confiscation is said to have occurred.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) A government can limit the economic activities of a foreign firm that resists its effort to introduce home-country nationals into the company.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 7) Foreign properties expropriated by a government cannot be reclaimed.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

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8) Private International Law is the body of law that applies to interpretations of and disputes arising from commercial transactions between companies of different nations.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 9) Most countries that were once part of the British Empire now have civil law systems.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 10) Common law cases are decided by precedents set in past judicial decisions.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 11) If a foreign company can be shown to be doing business in the United States, then it is subject to the jurisdiction of U.S. courts.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 12) Typically, all economic activity within a nation is governed by that nation's laws.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 13) In the United States, a patent holder retains all rights for the life of the patent only if the product is produced or sold.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 14) An associative counterfeit uses a product name that differs slightly from a well-known brand but is close enough that consumers will associate it with the genuine product.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) Brand value is one of the most important assets that a business holds.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

2 .

16) Antitrust laws are designed to restrict new competition from entering foreign markets.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 17) U.S. companies are subject to U.S. antitrust laws no matter what country they are doing business in.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) Each act of privatization dilutes the command portion of a mixed economic system.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 19) In the United States, laws do not regulate the licensing process per se as do technology transfer laws in the EU, Australia, Japan, and many developing countries.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 20) Licensing agreements do not come under antitrust scrutiny.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 21) A company hoping to protect its trade secrets from being stolen by a foreign company can seek relief under the Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 22) U.S. individuals are exempted from being prosecuted for bribery under the Foreign Corrupt Practices Act. Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 23) A common economic characteristic of countries with pervasive corruption is a lack of integration with the global economy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

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24) A U.S. company is exempt from the Foreign Corrupt Practices Act if a host-country citizen serving as an agent for the company pays a bribe to a government official in the host country.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 25) The fact that the United States has more lawyers per 100,000 people than other countries is, in part, a reflection of the low-context nature of American culture.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 26) Generally, companies find that the fastest, easiest, and least expensive way to resolve international commercial disputes is litigation.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 27) By law, U.S. courts can be discretionary while accepting an arbitrator's decision in patent disputes.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 28) GATT is primarily based on the principle of trade protectionism.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 29) Which of the following statements is true about the political risks in a global marketing environment?

A) The political risk of low-income countries is lesser than high-income countries.

B) The more a country is developed, the greater is the political risk.

C) Political risk is a major deterrent for companies that want to invest abroad.

D) A country with high political risks attracts more investors.

Answer: C AACSB: Analytical thinking Difficulty: Moderate

4 .

30) Which of the following is an approach that foreign companies in the United States use for avoiding taxes on their revenues?

A) confiscation B) liquidation C) expropriation D) earnings stripping Answer: D AACSB: Analytical thinking Difficulty: Easy 31) ________ refers to governmental action to dispossess a company or investor.

A) Equity dilution B) Deracination C) Expropriation D) Earnings stripping Answer: C Difficulty: Easy 32) ________ occurs if ownership of a property or assets of a company is transferred to the host government.

A) Internalization B) Nationalization C) Deportation D) Deracination Answer: B Difficulty: Easy 33) When a nation refuses to accept the judgment against it made by the International Court of Justice, the plaintiff nation can seek recourse through the ________.

A) International Law Commission B) Permanent Court of International Justice C) United Nations Security Council D) World Bank Investment Dispute Settlement Center Answer: C AACSB: Analytical thinking Difficulty: Moderate 34) Which of the following statements is true about code law?

A) In code-law countries, intellectual property rights are established by prior use.

B) It is established based on the rulings from previous cases.

C) It uses written norms, which are complemented by court decisions.

D) In code-law countries, companies are granted the ability to operate by public authority.

Answer: C AACSB: Analytical thinking Difficulty: Moderate

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35) The national laws applying to a transaction crossing boundaries must be determined by ________.

A) both parties involved in the agreement B) only the host-country government C) only parent-country government D) the International Law Commission Answer: A AACSB: Analytical thinking Difficulty: Moderate 36) Which of the following statements is true about patent and trademark protection in the global marketing environment?

A) Patents and trademarks protected in one country are not necessarily protected in another.

B) Foreign organizations can register patents and trademarks only in their parent country.

C) Patent and trademark laws are the same across all nations.

D) Trademarks and patents cannot be counterfeited.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 37) ________ refers to the unauthorized copying or production of a product.

A) Accommodation B) Embezzlement C) Counterfeiting D) Expropriation Answer: C AACSB: Ethical understanding and reasoning Difficulty: Easy 38) In many parts of the world, sales of unauthorized videos of Hollywood movies cost the movie studios billions of dollars. When illegal copies of movies are made, what form of intellectual property has been wrongly appropriated?

A) patent B) copyright C) trademark D) trade secrets Answer: B AACSB: Ethical understanding and reasoning Difficulty: Easy

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39) Which of the following business practices does the Sherman Act of 1890 prohibit?

A) limiting production B) betting C) licensing trademarks D) direct investments Answer: A AACSB: Analytical thinking Difficulty: Easy 40) How can a licensor prevent a licensee from using the licensed technology to compete with it directly?

A) by allowing the licensee to continue using the technology after the contract has expired B) by limiting the licensee to selling only in the home country C) by keeping the licensed technology unchanged D) by cancelling the contractual agreement Answer: B AACSB: Analytical thinking Difficulty: Moderate 41) ________ are confidential information or knowledge that has commercial value.

A) Copyrights B) Trade secrets C) Trademarks D) Patents Answer: B Difficulty: Easy 42) Which of the following is an example of a trade secret?

A) customer list B) brand logo C) product price D) company profit Answer: A AACSB: Analytical thinking Difficulty: Easy 43) Which of the following marked the first international trade agreement with provisions for protecting trade secrets?

A) EPA B) EU C) NAFTA D) TRIPs Answer: C Difficulty: Easy

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44) ________ refers to the misuse of entrusted power for private gain.

A) Corruption B) Counterfeiting C) Piracy D) Imitation Answer: A Difficulty: Easy 45) ________ consists of isolated transactions executed by individual public officials that abuse their office.

A) Bureaucratic corruption B) Earnings stripping C) Grand corruption D) Influence peddling Answer: A Difficulty: Easy 46) Which of the following is an example of grand corruption?

A) isolated transactions executed by individual public officials that abuse their office B) favors granted in exchange for personal consideration to a public official C) collusion between members of the private sector and public officials for mutual benefit D) state officials misusing large amounts of public resources over a prolonged period Answer: D AACSB: Ethical understanding and reasoning Difficulty: Moderate 47) ________ involves collusion between members of private sector and public officials to gain mutual benefit.

A) Bureaucratic corruption B) State capture C) Grand corruption D) Expropriation Answer: B AACSB: Ethical understanding and reasoning Difficulty: Easy 48) Which of the following is an economic attribute shared by countries with a high perceived level of corruption?

A) high levels of poverty B) high economic growth rate C) free trade policies D) low import tariffs Answer: A AACSB: Analytical thinking Difficulty: Easy

8 .

49) Americans doing business abroad must conform to proper ethical and legal behavior as spelled out by the ________.

A) TRIPs B) FCPA C) FERA D) ICJ Answer: B Difficulty: Easy 50) Which of the following has been empowered to resolve conflicts between national law and EU law?

A) the European Court of Auditors B) the European Court of Justice C) the International Chamber of Commerce D) the International Criminal Court Answer: B Difficulty: Easy 51) Which of the following replaced the General Agreement on Tariffs and Trade?

A) the World Trade Organization B) the European Union C) the North American Free Trade Agreement D) the World Intellectual Property Organization Answer: A Difficulty: Easy 52) Explain the different forms of corruption.

Answer: Corrupt activities take a variety of forms and can be generally categorized in a number of different ways. These range from the stereotypical bribing of a public official to highly complex, organized corruption that takes place on a large scale. Shah and Schacter segregate corruption into three broad forms: bureaucratic corruption, grand corruption, and influence peddling. Bureaucratic corruption consists of isolated transactions executed by individual public officials that abuse their office. These transactions might include the demand for bribes and kickbacks, diversion or embezzlement of public funds, or the granting of favors in exchange for personal consideration. Grand corruption involves the misappropriation or misuse of large amounts of public resources by state officials who are often members of the political or administrative elite. Influence peddling or state capture involves collusion between members of the private sector and public officials to gain mutual benefit. This form of corruption is also known as state capture because members of the private sector effectively capture the state, legislative, executive, or judicial apparatus for their own purpose.

AACSB: Analytical thinking Difficulty: Moderate

9 .

53) What is the role of GATT and the World Trade Organization in international trade?

Answer: In 1948, when 23 contracting countries signed the General Agreement on Tariffs and Trade (GATT), their objective was to reduce import tariffs. This was considered a milestone in international trade relations. GATT is based on three principles. The first concerns nondiscrimination, wherein each member country must treat the trade of all other member countries equally. The second principle is open markets, which are encouraged by the GATT through a prohibition of all forms of protection except customs tariffs. Fair trade is the third principle, which prohibits export subsidies on manufactured products and limits the use of export subsidies on primary products. In reality, none of these principles is fully realized as yet, although much progress was made during the Uruguay Round on issues such as nontariff barriers, protection of intellectual property rights, and government subsidies.

Another major breakthrough at the Uruguay Round was the establishment of the World Trade Organization (WTO) in 1995, which replaced GATT. In contrast to GATT, which was more loosely organized, WTO as a permanent institution is endowed with much more decision-making power in undecided cases. These extended competencies have become manifest in visible consequences. During its 50 years of existence, only 300 complaints in international trade disputes were filed with GATT; since its installation in 1995, the WTO has already dealt with 200 cases.

AACSB: Analytical thinking Difficulty: Moderate

10 .

Global Marketing Management, 8e (Keegan) Chapter 4 The Global Cultural Environment 1) Cultural similarities provide a good basis for making relatively standardized marketing strategies.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 2) Culture does not include unconscious values or attitudes that shape human behavior.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 3) Cultural evolution produces convergence and avoids fragmentation.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 4) Culture is most likely converging toward individual autonomy and independence in the massmarket segment of an emerging market.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 5) SMS messages provide a substitute for telephone calls in the urban-elite segment of an emerging market.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 6) Products can be symbols of individual or collective reality.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 7) Sociopsychological processes are shaped by recurrent episodes in daily life, which personalize the core ideas communicated by the external world.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 8) Consumers derive utilitarian value for a product from its functional and physical qualities.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 1 .

9) Consumers use possession rituals to display consumer goods.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 10) Increasing travel and digital communications mean that many national attitudes toward style in clothing, color, music, food, and drink are increasingly diverging.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 11) People who grow up in the East tend to use more nonverbal communication than those in the West.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 12) Ethnographic approaches refer to the use of standardized measures to classify countries.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 13) According to Maslow, as countries progress through the stages of economic development, more and more members of society operate at the esteem need level and higher.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 14) Hellmut Schütte has proposed a modified equivalent of Maslow's hierarchy of needs theory to explain the needs and wants of African consumers.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 15) According to Hellmut Schütte, at the top of the Asian hierarchy is status.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 16) Luxury badging describes consumers who engage in conspicuous consumption and buy products and brands that others will notice.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy

2 .

17) Values affect every stage of the consumer decision process, except information processing.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 18) Hofstede's measures and methodology are increasingly criticized for Western cultural bias.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 19) According to Hofstede, achievement and success are dominant values in feminine cultures.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 20) According to Hofstede, people typically show less emotion during interactions and are more contemplative in cultures with high uncertainty avoidance.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 21) According to Hofstede, long-term orientation emphasizes respect for tradition, fulfilling social obligations, and protecting one's public image.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 22) According to Project GLOBE, the degree to which individuals in organizations or societies are confrontational and aggressive in interpersonal relations is called institutional collectivism.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 23) According to Project GLOBE, the degree to which an organization rewards groups for performance improvements is called humane orientation.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 24) According to Schwartz, individuals are encouraged to recognize each other as equals who share basic interests as human beings in societies where egalitarianism is emphasized.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy

3 .

25) According to Schwartz, embeddedness is a cultural dimension that emphasizes ambition and curiosity.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 26) According to Schwartz, emerging-market cultures emphasize embeddedness and hierarchy.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 27) According to Schwartz, Western European cultures emphasize autonomy and egalitarianism.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 28) Social axioms are conceptualized as generalized expectancies that people hold about life and how it works.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 29) The reason cultural factors are a challenge to global marketers is that they are hidden from view.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 30) The "minimal-group paradigm" experiments of French psychologist Henri Tajfel first brought the idea of national culture into prominence.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 31) The unconscious avoidance of reference to one's own cultural values is called the selfreference criterion.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 32) Environmental sensitivity is the extent to which products must be adapted to the culturespecific needs of different national markets.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy

4 .

33) Food is considered to be the most culturally sensitive category of consumer products.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 34) Culture is a determining rather than an influencing factor in the context of marketing.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 35) The United States has a high-context culture.

Answer: FALSE AACSB: Diverse and multicultural work environments Difficulty: Easy 36) Role-playing often brings out thoughts and feelings that otherwise might go unexamined or even unacknowledged.

Answer: TRUE AACSB: Diverse and multicultural work environments Difficulty: Easy 37) Which of the following statements is true of culture?

A) Culture includes only conscious, and not unconscious, values.

B) Culture is innate in nature.

C) All facets of culture are interrelated.

D) The earlier the cultural responses are learned, the easier they are to change.

Answer: C AACSB: Diverse and multicultural work environments Difficulty: Easy 38) ________ occurs when population segments within a country diverge in culture.

A) Cultural imperialism B) Cultural hegemony C) Cultural fragmentation D) Cultural genocide Answer: C AACSB: Diverse and multicultural work environments Difficulty: Easy 39) Which of the following is a characteristic of a mass-market segment in an emerging nation?

A) full access to globalized media B) emphasis on social connectedness in its culture C) letter writing replaced by SMS messages D) high household income Answer: B AACSB: Diverse and multicultural work environments Difficulty: Easy 5 .

40) Which of the following cultural layers reflects the ecological, economic, and sociopolitical factors that determine the development of institutions within a culture?

A) collective reality B) individual reality C) sociopsychological processes D) psychological structures Answer: A AACSB: Diverse and multicultural work environments Difficulty: Easy 41) Which of the following statements is true of individual reality as a cultural layer?

A) It reflects reference group influences that promote the core ideas of a society.

B) It reflects core cultural ideas regarding what is good and what is moral.

C) It exerts pressure on all formal and informal regulative and socioeconomic systems.

D) It helps shape psychological structures, such as needs and personality traits.

Answer: D AACSB: Diverse and multicultural work environments Difficulty: Easy 42) Consumers derive ________ from products that have high aesthetic and emotional values and are closely associated with personal, social, or cultural identity.

A) utilitarian meaning B) hedonic meaning C) original meaning D) egalitarian meaning Answer: B AACSB: Diverse and multicultural work environments Difficulty: Easy 43) Which of the following statements is true of Maslow's hierarchy of needs?

A) The first level of need that an individual has to fulfill is his safety requirements.

B) Self-esteem needs act as a powerful drive to create demand for status-improving goods.

C) As countries progress economically, more people begin to operate at the physiological level.

D) The final stage in Maslow's need hierarchy is self-esteem.

Answer: B AACSB: Diverse and multicultural work environments Difficulty: Easy

6 .

44) According to Hellmut Schütte, which of the following is a higher-level need that can be satisfied through acts within a group that command respect?

A) physiological needs B) safety needs C) admiration needs D) affiliation needs Answer: C AACSB: Diverse and multicultural work environments Difficulty: Easy 45) ________ refer to enduring, centrally held beliefs that pertain to goals in life and guide attention, comprehension, and the selection or evaluation of people, behavior, and events in life.

A) Values B) Emotions C) Skills D) Competencies Answer: A AACSB: Diverse and multicultural work environments Difficulty: Easy 46) According to Hofstede, which of the following is a dominant characteristic of a society with high power-distance?

A) Societies regulate behavior with very few rules.

B) Status is not given much importance.

C) People are integrated into strong, cohesive in-groups.

D) Inequality is expected by all.

Answer: D AACSB: Diverse and multicultural work environments Difficulty: Easy 47) According to Hofstede, which of the following is a characteristic of a society with high uncertainty avoidance?

A) People show greater diversity in opinions and behavior.

B) People are more contemplative and tolerant of unorthodox ideas.

C) People are highly innovative and entrepreneurial.

D) People typically show more emotions during social interactions.

Answer: D AACSB: Diverse and multicultural work environments Difficulty: Easy

7 .

48) According to Hofstede, a society with long-term orientation emphasizes ________.

A) respect for tradition B) thrift and perseverance C) protection of one's public image D) fulfillment of social obligations Answer: B AACSB: Diverse and multicultural work environments Difficulty: Easy 49) According to Project GLOBE, ________ refers to the degree to which individuals in organizations or societies encourage and reward individuals for fairness, altruism, generosity, caring, and kindness toward others.

A) institutional collectivism B) in-group collectivism C) humane orientation D) performance orientation Answer: C AACSB: Diverse and multicultural work environments Difficulty: Easy 50) According to Project GLOBE, future orientation refers to the degree to which organizations or societies ________.

A) expect and agree that power should be distributed unequally, favoring those at higher levels B) avoid uncertainty by relying on established norms and behaviors C) engage in behaviors such as planning and delaying individual or collective gratification D) encourage and reward group members for performance improvements and excellence Answer: C AACSB: Diverse and multicultural work environments Difficulty: Easy 51) According to Schwartz, societies that emphasize intellectual autonomy encourage individuals to ________.

A) pursue their own ideas independently B) respect social order and tradition C) place importance on security, obedience, and wisdom D) participate in a shared way of life Answer: A AACSB: Diverse and multicultural work environments Difficulty: Easy

8 .

52) According to Schwartz, societies in which egalitarianism is emphasized encourage individuals to ________.

A) pursue affective positive experiences for themselves B) master, direct, and change the natural and social environment to attain group goals C) assume and expect unequal distribution of power, roles, and resources D) recognize each other as equals who share basic interests as human beings Answer: D AACSB: Diverse and multicultural work environments Difficulty: Easy 53) According to Leung and Bond, the degree to which societies are characterized by cognitive apprehension or assessment of the world confronting people is referred to as ________.

A) dynamic externality B) societal cynicism C) fate control D) social complexity Answer: B AACSB: Diverse and multicultural work environments Difficulty: Easy 54) ________ refers to a process of adapting to a foreign culture through continuous direct contact with it.

A) Acculturation B) Marginalization C) Recuperation D) Cultural relativism Answer: A AACSB: Diverse and multicultural work environments Difficulty: Easy 55) Which of the following is true of the people in high-context cultures compared to lowcontext cultures?

A) Lawyers are considered extremely important.

B) Competitive bidding is infrequent.

C) Negotiations proceed quickly.

D) Intrusions into private space are resented.

Answer: B AACSB: Diverse and multicultural work environments Difficulty: Easy

9 .

56) Which of the following is most likely a part of the American culture?

A) Responsibilities for organizational errors are taken by the highest level.

B) Negotiations are lengthy and enable involved parties to get to know each other.

C) A monochronic time system is followed and time is considered precious.

D) A person's word can be relied upon and no written agreements are needed.

Answer: C AACSB: Diverse and multicultural work environments Difficulty: Hard 57) How does social behavior vary in different cultures? Explain with a few examples.

Answer: There are a number of social behaviors and comments that have different meanings in other cultures. For example, while Americans consider it impolite to mound food on a plate or make noises when eating, some Chinese feel it is polite to take a portion of every food served and consider it evidence of satisfaction to belch. Other social behaviors, if not known, will place an international traveler at a disadvantage. For example, in Saudi Arabia, it is an insult to question a host about the health of his spouse. In Korea, both hands should be used when passing objects to another person. Also in Korea, formal introductions are very important. In both Japan and Korea, ranks and titles are expected to be used in addressing hosts. In the United States, there is not a clear rule on this behavior, except in select fields such as the armed forces or medicine. In Indonesia, it is considered rude to point at another person with a finger. However, one may point with the thumb or gesture with the chin. When greeting someone, it is appropriate in most countries to shake hands. In some countries, the greeting includes a handshake and more.

Greetings when meeting too vary from country to country. Also, in some countries, it is not advisable for men to touch or talk alone with a woman.

AACSB: Diverse and multicultural work environments Difficulty: Moderate 58) According to psychologist Henri Tajfel, what are the basic strategies that people employ when positive social identity is threatened?

Answer: When positive social identity is threatened, people employ three basic strategies. If group boundaries are permeable, they may move between groups (social mobility). In the global marketing contexts, social mobility strategies may cause associates within the company, its agents, distributors, or other important stakeholders to resign or give their allegiance to a competitive firm that does not evoke a perceived threat to positive social identity. If social mobility is not possible, people may respond to identity threats with social creativity (i.e., attempt to improve the desirability of group membership by associating groups with positive characteristics) or social conflict (i.e., actively challenge group desirability or overturn existing or imposed order). Social creativity or social conflict strategies may threaten harmonious relations within the company, distribution channel partners, or customers.

AACSB: Diverse and multicultural work environments Difficulty: Easy

10 .

59) What are some of the guidelines that can help managers improve the ability to learn about other cultures?

Answer: To transcend ethnocentricity and cultural myopia, managers must make the effort to learn and internalize cultural differences. There are several guidelines that will improve the ability to learn about other cultures: 1. People should accept that they will never fully understand themselves or others. People are far too complex to be understood.

2. People's perceptual systems are extremely limited. They "see" almost nothing. Their nervous systems are organized on the principle of negative feedback. The only time their control system is brought into play is when input signals deviate from what they have learned to expect.

3. They spend most of their energy managing perceptual inputs.

4. When they do not understand the beliefs and values of a particular cultural system and society, things that they observe and experience may seem bizarre.

5. If they want to be effective in another culture, they must attempt to understand that culture's beliefs, motives, and values. This requires an open attitude that allows them to transcend perceptual limitations based on their own culture.

AACSB: Diverse and multicultural work environments Difficulty: Easy

11 .

Global Marketing Management, 8e (Keegan) Chapter 5 Global Customers 1) Similarities exist among countries that are in the same stage of economic development.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) The World Bank classifies countries as: eastern, central, and western.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3) The six largest rapidly-growing emerging markets in the world are referred to as BRIC-EN. Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 4) Turkey is one of the six largest rapidly-growing emerging markets in the world.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 5) Middle-income economies are often referred to as developed countries.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) The EU consists of 27 member countries, but it operates as a single market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 7) Though the EU has adopted a common currency, barriers to the movement of people, goods, and money within the EU continue to exist.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 8) The objective of the EU is to harmonize national laws so that goods, services, people, and money can flow freely across national borders.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

1 .

9) The Treaty of Maastricht led to cooperation among EU members in critical areas such as internal affairs and defense policy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 10) The Treaty of Maastricht failed to bring about a monetary union among the members of the EU. Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 11) The United Kingdom has not adopted the euro as its currency.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 12) Parallel importing is a product development strategy that is commonly used by marketers in the European community.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 13) The deregulation of national broadcasting monopolies has affected the promotional strategies of marketers in the European community.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 14) Foreign investors have been entering Russia mainly due to its increasingly democratic political leadership that fervently promotes free media.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 15) Costa Rica and the United States share the biggest trading relationship between any two nations in the world.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 16) Land prices in Japan are among the lowest in the world.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

2 .

17) The major barriers to entry in Japan are the nontariff barriers of custom and tradition, practice, and preference.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) Income within India is highly polarized with a considerable part of the population living close to or below the poverty line.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 19) India has the largest Muslim population in the world.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 20) Indonesia is the second "I" in the BRIC-IT group of emerging markets.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) Latin American reforms show a broad shift away from the policy of protectionism toward recognition of the benefits of participating fully in the global economy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 22) Chile's economic reforms mostly lean toward nationalization instead of privatization.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 23) Brazil is the largest country and economy in Latin America.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 24) The Arab Spring refers to a series of protests and demonstrations that began in 2010 in the Middle East.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

3 .

25) Business in the Middle East is primarily driven by the price of steel.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 26) The central problem faced by transitioning economies and low-income countries is the shortage of goods and services.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 27) The upside of the value equation is that when a company's perceived value is high, it can charge more than the competition for the same product.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 28) The bottom line on the value equation is that you can succeed in a market only if you have perceived value that is equal to or lesser than that of your competitors.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 29) The relative advantage of a product, with regard to the rate at which innovations are adopted, refers to the extent to which a product is consistent with existing values and past experiences of adopters.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 30) Interaction effect refers to the process through which individuals who have adopted an innovation influence others.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 31) The six largest rapidly-growing emerging markets in the world are referred to as ________.

A) G8 B) G20 C) BRIC-IT D) NAFTA Answer: C AACSB: Analytical thinking Difficulty: Easy

4 .

32) The World Bank had developed a classification system whereby economies are divided into groups according to their ________.

A) purchasing power parity (PPP) B) gross domestic product (GDP) C) human development index (HDI) D) gross national income (GNI) Answer: D AACSB: Analytical thinking Difficulty: Easy 33) The European Union (EU) consists of ________ countries.

A) 27 B) 50 C) 45 D) 40 Answer: A AACSB: Analytical thinking Difficulty: Easy 34) Which of the following statements is true of the EU market?

A) The EU is an example of a preferential trade area.

B) The Treaty of Versailles established the base for cooperation among the EU members.

C) All members of the EU have adopted a common currency.

D) The EU is economically bigger than the United States.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 35) Which of the following seminal documents established the base for cooperation among the members of the EU? A) The Treaty of Lausanne B) The Treaty of Greenville C) The Treaty of Maastricht D) The Treaty of Versailles Answer: C AACSB: Analytical thinking Difficulty: Easy 36) Which of the following statements is true of the Russian economy?

A) Russia has a technologically competent manufacturing base with the latest machinery.

B) Russia has a highly democratic political leadership that fervently promotes free media.

C) Russia's middle class has been slow to accept foreign goods, services, and brands.

D) Russia has an economy that is largely dependent on oil revenues.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 5 .

37) Which of the following statements is true of the North American market?

A) The U.S. is the home country of more top global brands than any other country in the world.

B) Canada has a purely capitalist economy but with an outdated manufacturing base and unskilled labor force.

C) The North American Free Trade Agreement was signed by the U.S., Canada, and Costa Rica.

D) All the three countries that signed the NAFTA have adopted a common currency called the dollar.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 38) Which of the following statements is true of the Mexican economy?

A) Since the formation of EFTA, Mexico has been modernizing its infrastructure.

B) Immigrant workers from Mexico fill the need for low-cost labor in the U.S. C) Over 80 percent of Mexico's trade is with Canada.

D) Americans have invested more in Mexico than any other foreign land.

Answer: B AACSB: Analytical thinking Difficulty: Moderate 39) ________ refer to plants in Mexico where companies can import materials duty free, assemble them using inexpensive local labor, and export them to the U.S. paying duty only on the value added in Mexico.

A) Company stores B) Black corporations C) Maquiladora shops D) Factory farms Answer: C AACSB: Analytical thinking Difficulty: Easy 40) Which of the following is a characteristic of the Asia-Pacific market that makes it one of the hottest spots for marketers?

A) enormous population size B) high product ownership levels C) monetary union between countries D) removal of trade barriers between countries Answer: A AACSB: Analytical thinking Difficulty: Easy

6 .

41) Which of the following countries is one of the five economic "tigers" of East Asia?

A) Indonesia B) Malaysia C) Thailand D) Taiwan Answer: D AACSB: Analytical thinking Difficulty: Easy 42) Which of the following statements is true of the Chinese economy?

A) The United Kingdom is China's largest trading partner.

B) The Chinese economy has been converted to a communist controlled system from a freemarket system.

C) The Chinese economy started growing tremendously during the Mao era.

D) The Chinese are the biggest global supplier of consumer goods.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 43) Which of the following statements is true about the regional and cultural differences within China?

A) The interior regions in China have highly developed distribution and logistics facilities which attract marketers.

B) There are several important gender variances that marketers need to be aware of while operating in China.

C) The majority of Chinese consumers are wary of advertisements and are more receptive to other means of promotions.

D) Cultural homogeneity throughout the country enables marketers to package products without localizing them.

Answer: B AACSB: Analytical thinking Difficulty: Moderate 44) Which of the following statements is true of the Japanese market?

A) A crucial factor that marketers need to consider while operating in Japan is its low population density.

B) Buying or renting space for business operations is cheap in Japan.

C) Countless visits and socializing are necessary to build trust with distributors in Japan.

D) Japan is an individualistic country that emphasizes the individual rather than the group.

Answer: C AACSB: Analytical thinking Difficulty: Moderate

7 .

45) Which of the following best describes the cultural values of a traditional Asian?

A) resentment of authority B) control by "guilt" and conscience C) personal responsibility D) extended family ties Answer: D AACSB: Analytical thinking Difficulty: Easy 46) Which of the following best describes the marketing values of a traditional Asian?

A) environmentalism B) personal choice and self-expression through brand C) belief in "understatement" of wealth D) confidence in technology Answer: D AACSB: Analytical thinking Difficulty: Easy 47) Which of the following statements is true of the economies of Australia and New Zealand?

A) There are restrictions in the free movement of people between the two countries.

B) There are trade barriers and border restrictions between the two countries.

C) There is a major challenge facing marketers in Australia regarding high marketing costs for distributing goods internationally.

D) There has been an increase in the relative wealth of New Zealand due to an increase in prices for agricultural commodities.

Answer: C AACSB: Analytical thinking Difficulty: Moderate 48) Which of the following characteristics of Latin American countries discourages global corporations from entering their markets?

A) wide income disparity between the rich and the poor B) inclination toward the policy of protectionism C) low potential for establishing regional production D) increasing tariffs within subregional trading groups Answer: A AACSB: Analytical thinking Difficulty: Easy 49) Which of the following statements is true about the business scenario in the Middle East?

A) Business decisions are usually made by correspondence.

B) Well-connected businesspeople generally progress faster.

C) Business in the Middle East is driven by the price of gold.

D) Arab businessmen are known for never entertaining any sort of haggling.

Answer: B AACSB: Analytical thinking Difficulty: Easy 8 .

50) Which of the following statements is true about the economies of Africa?

A) South Africa's main export is oil.

B) Nigeria is an upper-middle income country.

C) Nigeria and South Africa, account for over two-thirds of sub-Saharan African GDP. D) South Africa is the largest country in Africa, and has a lower-middle income economy.

Answer: C AACSB: Analytical thinking Difficulty: Easy 51) Which of the following statements is true about customer value?

A) The customer value equation is represented by B = V/P, where B = benefits, V = value, and P = price.

B) Value can always be increased for a customer by increasing the price of a product or service.

C) A company can succeed in a market only if its perceived value is equal to, and not lesser than or greater than, its competitors.

D) A company that has high perceived value can charge more than its competitor for the same product.

Answer: D AACSB: Analytical thinking Difficulty: Easy 52) According to Rogers' diffusion theory, customers engage in research activities to seek out additional information about a product during the ________ of the adoption process.

A) awareness stage B) interest stage C) evaluation stage D) adoption stage Answer: B AACSB: Analytical thinking Difficulty: Easy 53) Sarah comes across an online ad promoting a new deodorant that is priced much lower than the one she regularly uses. She goes to a nearby supermarket and uses a free sample pack to evaluate the deodorant. According to Rogers' diffusion theory, Sarah is in the ________ stage of the adoption process.

A) awareness B) interest C) trial D) adoption Answer: C AACSB: Application of knowledge Difficulty: Moderate

9 .

54) As a characteristic of innovation, ________ refers to whether a product can be tried and used on a limited basis or in smaller quantities without great expense.

A) divisibility B) complexity C) communicability D) compatibility Answer: A AACSB: Analytical thinking Difficulty: Easy 55) ________ tend to include people who are the most influential in their communities, have high social status, and are in favorable financial positions?

A) Innovators B) Early adopters C) Late majority D) Laggards Answer: B AACSB: Analytical thinking Difficulty: Easy 56) Differentiate between the cultural and marketing values of Westerners and Asians.

Answer: Western cultural values are characterized by: (1) nuclear family, self, or immediate family; (2) beliefs in competition, challenge, and self-expression; (3) personal responsibility and independence; (4) doing one's own thing; (5) resentment of authority; (6) primacy given more to youth and change; and (7) control by "guilt" and conscience. Whereas, the Asian cultural values are characterized by: (1) extended family, blood/kinship/work groups; (2) beliefs in harmony, cooperation, avoiding confrontation; (3) shared responsibility, interdependence; (4) public self and "face;" (5) respect for authority; (6) age and seniority important, value tradition; and (7) control by "shame" and "loss of face."

Western marketing values are characterized by: (1) brand segmentation; personal choice and self-expression through brand; (2) presenters/testimonials important but more to draw attention to brands; (3) seeding and diffusion from leading edge; (4) belief in "understatement" of wealth; and (5) environmentalism. Whereas, the Asian marketing values are characterized by: (1) popular famous brands; confidence in brand and corporate names; (2) imitation, emulation, use of presenters as role models in ads; (3) rapid adoption of successful brands; (4) display of wealth and status; and (5) confidence in technology.

AACSB: Analytical thinking Difficulty: Moderate

10 .

57) Describe the adoption process as explained by the diffusion theory.

Answer: One of the basic elements of Rogers' diffusion theory is the concept of an adoption process–the mental stages through which an individual passes from the time of his or her first knowledge of an innovation to the time of product adoption or purchase. Rogers suggests that an individual passes through five different stages in proceeding from first knowledge of a product to the final adoption or purchase of that product: 1. Awareness: In the first stage, the customer becomes aware for the first time of the product or innovation. Studies have shown that at this stage, impersonal sources of information such as mass media advertising are most important. An important early communication objective in global marketing is to create awareness of a new product through general exposure to advertising messages.

2. Interest: During this stage, the customer is interested enough to learn more. The customer has focused his or her attention on communications relating to the product and will engage in research activities to seek out additional information.

3. Evaluation: In this stage, the individual mentally assesses the product's benefits in relation to present and anticipated future needs and, based on this judgment, decides whether or not to try it.

4. Trial: Most customers will not purchase expensive products without the "hands-on" experience marketers call trial. A good example of a product trial that does not involve purchase is the automobile test drive. For health-care products and other inexpensive consumer packaged goods, trial often involves actual purchase. Marketers frequently induce trial by distributing free samples. For inexpensive products, an initial single purchase is defined as trial.

5. Adoption: At this point, the individual makes an initial purchase (in the case of the more expensive product) or continues to purchase–adopts and exhibits brand loyalty to–the less expensive product. Studies show that, as a person moves from evaluation through trial to adoption, personal sources of information are more important than impersonal sources. It is during these stages that sales representatives and word of mouth become major persuasive forces affecting the decision to buy.

AACSB: Analytical thinking Difficulty: Easy

11 .

Global Marketing Management, 8e (Keegan) Chapter 6 Global Marketing Information Systems and Research 1) In high-income countries, the amount of information available far exceeds the absorptive capacity of an individual or an organization.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) A company's marketing information system should only cover important aspects of a company's internal environment.

Answer: FALSE AACSB: Information technology Difficulty: Easy 3) Poor operating results can often be traced back to insufficient data and information about events both inside and outside the company.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 4) The search scanning mode includes monitoring and viewing market activities.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 5) The best way to identify unnecessary duplication is to carry out an audit of reading activity by asking each person involved to list the publications she/he reads regularly.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 6) Headquarters executives of global companies obtain as much as two-thirds of the information they need from personal sources.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 7) The availability of documented information in print and on the Internet is in decline over the years.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate

1 .

8) Social media monitoring tools provide marketers with rich data that reveals important consumer information.

Answer: TRUE AACSB: Information technology Difficulty: Easy 9) Marketing research is best defined as a continuous flow of information about company operations.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 10) A latent market is an undiscovered marketing segment.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 11) In an incipient market, demand is zero before the product is offered.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 12) A company offering products to meet incipient demand before the trends have taken root generally will have a huge market response.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 13) A cost-benefit analysis is performed after collecting secondary data.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 14) Companies wishing to minimize the cost and time associated with market research should start by collecting and analyzing secondary data.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) Displacing time is a useful method of market analysis when data are available for two markets at the same level of development.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

2 .

16) A focus group is a tool used to collect secondary market data.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 17) A good questionnaire must be simple and easy for respondents to answer.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) The time displacement method requires a marketer to estimate when two markets are at similar stages of development.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 19) Online surveys enable faster fieldwork.

Answer: TRUE AACSB: Information technology Difficulty: Easy 20) The two basic sampling methods in use today are probabilistic and nonprobabilistic sampling.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) The quota sample does not require selection on a probability basis and is, therefore, much easier to implement than random sample.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 22) The results of nonprobability sample can be projected with statistical reliability.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 23) Cluster analysis is well suited to global marketing research.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

3 .

24) The greater a company's information intensity, the more the traditional product/market boundaries shift.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 25) The relatively lower revenue and margins in smaller markets limit marketing expenditure budgets.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 26) In a global company, overall responsibility and control of marketing research resides in operating subsidiaries.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 27) Organized intelligence should systematize the collection and analysis of internal information.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 28) Organized competitive intelligence should replace the informal activities or information gathering by employees.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 29) Monitoring activities should be kept separate from decision-making processes to increase a company's competitiveness.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 30) The technical term for the process of information acquisition is ________.

A) scanning B) benchmarking C) investigation D) monitoring Answer: A AACSB: Information technology Difficulty: Easy

4 .

31) Which of the following is the starting point for a global marketing information system?

A) collecting data B) determining the subject agenda C) analyzing relevant data D) making business decisions Answer: B AACSB: Information technology Difficulty: Easy 32) Which of the following subject agenda categories for a global business intelligence system covers the laws and regulations both in the host countries and the home country?

A) foreign exchange B) resource information C) general conditions D) prescriptive information Answer: D AACSB: Information technology Difficulty: Moderate 33) General exposure to information is known as ________.

A) benchmarking B) viewing C) investigation D) research Answer: B AACSB: Information technology Difficulty: Moderate 34) The "environmental studies" staff at Gamble, Inc.'s headquarters keeps tabs on the worldwide social, political, legal, economic, and technological environments that are directly relevant to its businesses. Which of the following scanning modes does this scenario reflect?

A) monitoring B) viewing C) investigation D) research Answer: B AACSB: Information technology Difficulty: Hard

5 .

35) Which of the following is a reason for the scarcity of information generated in the viewing mode of surveillance?

A) the limited receptivity of managers to information outside the subject agenda B) the high exposure to information excluded from the subject agenda C) the marketers' high exposure to information relevant to the organization D) the limited receptivity of executives to internal information relevant to the organization Answer: A AACSB: Information technology Difficulty: Moderate 36) Interested in a business opportunity in Russia, Peter Terian stood on a busy street corner in Moscow and watched the different cars that went past. He noticed a large number of Mercedes, but not a single Rolls Royce. Terian later set up the first Rolls Royce dealership in Russia. In this case, the source of information is referred to as ________.

A) survey research B) direct perception C) income elasticity measurements D) secondary data Answer: B AACSB: Information technology Difficulty: Hard 37) ________ refers to the project-specific, systematic gathering of data in the search scanning mode.

A) Monitoring B) Viewing C) Marketing research D) Accommodation Answer: C AACSB: Information technology Difficulty: Easy 38) Which of the following is the first step of a formal marketing research process?

A) developing a research plan B) identifying the research problem C) collecting primary data D) analyzing research data Answer: B AACSB: Information technology Difficulty: Easy

6 .

39) Which of the following is an example of a secondary data source used in marketing research?

A) an interview B) a survey research C) a focus group D) an online database Answer: D AACSB: Information technology Difficulty: Easy 40) Which of the following is true about latent markets?

A) An organization's initial success is based on its competitiveness.

B) A product has zero demand before it is offered.

C) A product's demand emerges with a particular political trend.

D) A product's demand remains incipient in a latent market.

Answer: B AACSB: Information technology Difficulty: Moderate 41) ________ demand is demand that will emerge if a particular economic, technological, political, or sociocultural trend continues.

A) Existing B) Latent C) Incipient D) Parallel Answer: C AACSB: Information technology Difficulty: Easy 42) Carter Electronics began selling the first-ever 18" home digital satellite system (DSS) in the U.S. Although DSS represented a totally new technology, one million DSS units were sold in the first year of release. Which of the following best describes the market situation in the U.S. when the company researched DSS? A) There was an existing market for home digital satellite systems.

B) There was an incipient market for home digital satellite systems.

C) There was a latent market for home digital satellite systems.

D) There was a subnational market for home digital satellite systems.

Answer: C AACSB: Analytical thinking Difficulty: Hard

7 .

43) Which of the following techniques for gathering primary data facilitates the discussion of a product concept or a social trend?

A) observation B) documentation C) focus group D) online search Answer: C AACSB: Information technology Difficulty: Easy 44) Which of the following is a disadvantage of online marketing research?

A) Internet surveys are heavily affected by interviewer bias.

B) A researcher cannot ask follow-up questions.

C) It is hard to target lower incidence populations.

D) Online data collections are typically expensive.

Answer: B AACSB: Information technology Difficulty: Moderate 45) ________ is referred to as the selection of a subset or group from a population that is representative of the entire population.

A) Investigating B) Monitoring C) Viewing D) Sampling Answer: D AACSB: Information technology Difficulty: Easy 46) Which of the following is an advantage of probability sample?

A) It produces results of statistically measurable accuracy.

B) It is easy to select elements from a population on a probability bias.

C) It is easier to implement than a quota sampling method.

D) It does not require a sample selection on random basis.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 47) Which of the following is a key characteristic of a probability sample that determines the sample size of a population?

A) the number of chances a result occurs as planned B) the permissible sample error that can be allowed C) the inability to statistically project the results to the entire population D) the similarity in the sample characteristics being measured Answer: B AACSB: Analytical thinking Difficulty: Moderate 8 .

48) Which of the following is a technique used to analyze research data?

A) demand pattern analysis B) random sampling C) direct perception D) survey research Answer: A AACSB: Information technology Difficulty: Easy 49) Luxury car manufacturers, Lewitt, invest in dealerships across Asian countries based on a marketing research outcome showing the recent increase in purchase of luxury cars. In this case, Lewitt's investigation of research data reflects a(n) ________.

A) demand pattern analysis B) income elasticity measurement C) estimation by analogy D) comparative analysis Answer: A AACSB: Analytical thinking Difficulty: Hard 50) Which of the following techniques of analyzing research data groups variables into collections that maximize within-group similarities and between-group differences?

A) demand pattern analysis B) income elasticity analysis C) cluster analysis D) comparative analysis Answer: C AACSB: Analytical thinking Difficulty: Easy 51) What are the six subject agenda categories and coverage for global business intelligence systems?

Answer: There are six subject agenda categories: 1. Markets that cover demand estimates, consumer behavior, products, channels, communication media availability and cost, and market responsiveness; 2. Competition that covers corporate, business, and functional strategies and plans; 3. Foreign Exchange that covers balance of payments, interest rates, attractiveness of country currency, and expectations of analysts; 4. Perspective information that covers laws, regulations, rulings concerning taxes, earnings, and dividends in both host countries and home country; 5. Resource information that covers the availability of human, financial, information, and physical resources; 6. General conditions that cover the overall review of sociocultural, political, and technological environments.

AACSB: Analytical thinking Difficulty: Moderate 9 .

52) Explain the current issues in global marketing research.

Answer: Marketers engaged in global research face special problems and conditions that differentiate their task from that of the domestic market researcher.

First, instead of analyzing a single national market, the global market researcher must analyze many national markets, each of which has unique characteristics that must be recognized in analysis.

Second, the small markets around the world pose a special problem for the researcher. The relatively lower revenue and margins in smaller markets limit marketing expenditure budgets.

Therefore, the global researcher must devise techniques and methods that keep expenditures in line with the market's profit potential.

One of the frequently encountered problems in developing countries is that data may be inflated or deflated either inadvertently or for political expediency.

Another problem is that the comparability of international statistics varies greatly. An absence of standard data-gathering techniques contributes to the problem.

AACSB: Analytical thinking Difficulty: Moderate

10 .

Global Marketing Management, 8e (Keegan) Chapter 7 Segmentation, Targeting, and Positioning 1) A market segment is a subset of a larger market of people or organizations who will respond similarly to a marketing mix.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) Targeting defines the position of a product or a company in the minds of customers.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3) An advantage of geographic segmentation is that the segments would be close to each other.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 4) Demographic segmentation is based on immeasurable or intangible characteristics of populations.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 5) Attitudes and lifestyles are examples of demographic variables.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) Income is a more important segmentation variable than population in the case of low-priced products.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 7) For most consumer and industrial products, the national literacy rate is the single most important segmentation variable and indicator of market potential.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 8) In the case of psychographic segmentation, data are obtained from secondary sources such as books and periodicals.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 1 .

9) According to the psychographic segmentation of Porsche users, Elitists are American Porsche users who believe that a car, even an expensive one, is not an extension of a person's personality.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 10) According to the psychographic segmentation of Porsche users, Fantasists are American Porsche users who believe that their cars heighten excitement.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 11) According to Backer, Spielvogel & Bates Worldwide's Target Scan, the Pressured segment is largely comprised of men.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 12) According to Backer, Spielvogel & Bates Worldwide's Target Scan, Adapters are older people who maintain their values while keeping open minds when faced with change.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 13) Global Scan is a tool for identifying consumer similarities across national boundaries and consumer differences between segments in different countries.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 14) According to D'Arcy Masius Benton & Bowles's psychographic study in Europe, Successful Idealists have achieved professional and material success while maintaining commitment to socially responsible ideals.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) According to D'Arcy Masius Benton & Bowles's psychographic study in Europe, Affluent Materialists are characterized as being content with the comfort of their homes, families, friends, and community.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

2 .

16) According to D'Arcy Masius Benton & Bowles's psychographic study in Russia, "Russian Souls" theoretically prefer Russian products but look down on mass-produced goods of inferior quality.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 17) According to D'Arcy Masius Benton & Bowles's psychographic study in Russia, the kuptsy is most likely to admire automobiles from countries with good reputations for engineering.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) According to Young & Rubicam's 4Cs, craftsmen and teachers are included in the psychographic segment called Transitionals.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 19) According to Young & Rubicam's 4Cs, Mainstreamers are unhappy and ambitious people with white collar jobs.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 20) According to Young & Rubicam's 4Cs, Succeeders tend to value luxury and quality while making purchases.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) Global benefit segmentation focuses on value, which is the denominator of the value equation.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 22) Vertical segmentation is based on product category and price points.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 23) Even a narrow segment can be served profitably with a standardized product if the segment exists in several countries.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 3 .

24) A market or a market segment characterized by strong competition should ideally be targeted.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 25) Standardized global marketing involves devising a marketing mix to reach a single segment of the global market.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 26) Standardized global marketing is the strategy employed by global companies that define their markets narrowly.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 27) Differentiated global marketing is a variation of concentrated global marketing.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 28) Special-interest products are examples of high-tech products.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 29) Marketing of high-tech products requires less emphasis on specialized information and more emphasis on image.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 30) ________ is the process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs.

A) Market penetration B) Market liquidity C) Market segmentation D) Market capitalization Answer: C AACSB: Analytical thinking Difficulty: Easy

4 .

31) According to Theodore Levitt, "segment simultaneity" refers to a trend wherein ________.

A) the same segments are likely to show up in multiple national markets across the globe B) hundreds of different segments are likely to show up within a single national market C) the segments in two different national markets are never likely to have any similarities D) no two segments within a single national market show similarities in more than a certain number of attributes Answer: A AACSB: Analytical thinking Difficulty: Moderate 32) ________ is based on measurable characteristics of populations such as age, gender, income, occupation, and education.

A) Demographic segmentation B) Geographic segmentation C) Psychographic segmentation D) Behavioral segmentation Answer: A AACSB: Analytical thinking Difficulty: Easy 33) Which of the following is an example of a variable used in demographic segmentation?

A) behavioral characteristics B) national income C) attitude D) lifestyle Answer: B AACSB: Analytical thinking Difficulty: Easy 34) ________ is the single most important segmentation variable and indicator of market potential for most consumer and industrial products.

A) Population size B) Gender C) National income D) Age Answer: C AACSB: Analytical thinking Difficulty: Easy

5 .

35) Which of the following is an important demographic variable for the segmentation of lowpriced products?

A) national income B) population size C) attitudes D) lifestyles Answer: B AACSB: Analytical thinking Difficulty: Easy 36) An international retail giant chooses women between the ages of 17 and 35 in European countries as the target market for a new line of fashion apparel that it plans to launch soon.

Which of the following types of segmentation is the company using?

A) behavioral segmentation B) benefit segmentation C) psychographic segmentation D) demographic segmentation Answer: D AACSB: Application of knowledge Difficulty: Moderate 37) ________ involves grouping people in terms of their attitudes, values, and lifestyles.

A) Psychographic segmentation B) Geographic segmentation C) Demographic segmentation D) Benefit segmentation Answer: A AACSB: Analytical thinking Difficulty: Easy 38) Steve is an American Porsche customer who is ambitious, power-driven, and expects to be noticed by others. He expects to be recognized as an owner of a Porsche. Which of the following psychographic categories does Steve belong to?

A) Proud Patrons B) Top Guns C) Elitists D) Fantasists Answer: B AACSB: Application of knowledge Difficulty: Hard

6 .

39) Jennifer is the chief financial officer (CFO) of an international bank. She is an American Porsche customer who considers her car as a reward for having worked hard all her life. She strongly feels that owning the car is what really matters and not the prestige of owning an expensive automobile. Which of the following psychographic categories does Jennifer belong to?

A) Top Guns B) Proud Patrons C) Fantasists D) Elitists Answer: B AACSB: Application of knowledge Difficulty: Hard 40) Which of the following segments labeled by Backer, Spielvogel & Bates Worldwide (BSB) consists of young people with a median age of 31 who live hectic lives, are driven to achieve success, and are materialistic pleasure seekers for whom time and money are in short supply?

A) Achievers B) Traditionals C) Adapters D) Strivers Answer: D AACSB: Analytical thinking Difficulty: Easy 41) Which of the following segments labeled by Backer, Spielvogel & Bates Worldwide (BSB) consists of customers who are strongly rooted to their pasts and cling to their country's heritage and cultural values?

A) Traditionals B) Achievers C) Adapters D) Strivers Answer: A AACSB: Analytical thinking Difficulty: Easy 42) Which of the following segments labeled by D'Arcy Masius Benton & Bowles (DMBB) consists of status-conscious and ambitious Europeans, many of whom are business professionals, who use conspicuous consumption to communicate their success to others?

A) Successful Idealists B) Comfortable Belongers C) Affluent Materialists D) Disaffected Survivors Answer: C AACSB: Analytical thinking Difficulty: Easy

7 .

43) Which of the following segments labeled by D'Arcy Masius Benton & Bowles (DMBB) is concentrated in high-crime, urban inner-city neighborhoods and tends to be either resentful or resigned?

A) Affluent Materialists B) Successful Idealists C) Disaffected Survivors D) Comfortable Belongers Answer: C AACSB: Analytical thinking Difficulty: Easy 44) According to Young & Rubicam's (Y&R's) psychographic segmentation study, which of the following groups of customers is likely to exhibit impulse purchase behavior?

A) Transitionals B) Aspirers C) Reformers D) Mainstreamers Answer: A AACSB: Analytical thinking Difficulty: Easy 45) According to Y&R's psychographic segmentation study, which of the following groups of customers is likely to include managers or professionals who frequently travel and dine out?

A) Transitionals B) Aspirers C) Mainstreamers D) Succeeders Answer: D AACSB: Analytical thinking Difficulty: Easy 46) ________ involves categorizing consumers in terms of user status and usage rates.

A) Demographic segmentation B) Benefit segmentation C) Behavior segmentation D) Geographic segmentation Answer: C AACSB: Analytical thinking Difficulty: Easy

8 .

47) ________ is the act of evaluating and comparing identified segments and then selecting one or more of them as the prospect(s) with highest potential.

A) Targeting B) Positioning C) Benchmarking D) Market segmentation Answer: A AACSB: Analytical thinking Difficulty: Easy 48) Which of the following is a characteristic of standardized global marketing?

A) high production costs B) limited distribution C) low sales volume D) high profitability Answer: D AACSB: Analytical thinking Difficulty: Easy 49) Which of the following is true of concentrated global marketing?

A) It involves devising a marketing mix to reach multiple segments of the global market.

B) Companies that use it try to attain worldwide depth rather than national breadth.

C) Companies that use it attain lower production costs and greater sales volume.

D) It calls for extensive distribution in the maximum number of retail outlets.

Answer: B AACSB: Analytical thinking Difficulty: Easy 50) ________ refers to the location of a product in the minds of consumers.

A) Positioning B) Targeting C) Benchmarking D) Product displacement Answer: A AACSB: Analytical thinking Difficulty: Easy 51) Which of the following product categories typically requires high-tech positioning?

A) special-interest products B) global-village products C) products that solve a common problem D) products with universal themes Answer: A AACSB: Analytical thinking Difficulty: Easy

9 .

52) Which of the following is an example of a global-village high-touch product?

A) personal computers B) Canon cameras C) designer fashions D) Fuji bicycles Answer: C AACSB: Analytical thinking Difficulty: Easy 53) Describe the Target Scan study conducted by Backer Spielvogel & Bates.

Answer: To identify attitudes that could help explain and predict purchase behavior for different product categories, researchers studied consumer attitudes and values, as well as media viewership/readership, buying patterns, and product use in 18 countries, mostly located in the Triad. The survey attempted to identify both country-specific and global attitudinal attributes.

Combining all the country data yielded a segmentation study known as Target Scan, a description of five global psychographic segments that Backer Spielvogel & Bates (BSB) claimed represent 95 percent of the adult populations in the 18 countries surveyed. BSB labeled the segments as Strivers, Achievers, Pressured, Traditionals, and Adapters.

(1) Strivers: This segment consists of young people with a median age of 31 who live hectic, onthe-go lives. Driven to achieve success, they are materialistic pleasure seekers for whom time and money are in short supply.

(2) Achievers: Older than the Strivers, the affluent, assertive Achievers are upwardly mobile and already have attained a good measure of success. Achievers are status-conscious consumers for whom quality is important.

(3) Pressured: The Pressured segment, largely comprised of women, cuts across age groups and is characterized by constant financial and family pressures. Life's problems overwhelm the members of this segment.

(4) Traditionals: This segment is "rooted to the past" and clings to the country's heritage and cultural values.

(5) Adapters: This segment is composed of older people who are content with their lives and who manage to maintain their values while keeping open minds when faced with change.

AACSB: Analytical thinking Difficulty: Easy

10 .

54) What are the three basic criteria for assessing opportunity in global target markets?

Answer: The three basic criteria for assessing opportunity in global target markets include the current size of the segment and anticipated growth potential, competition, and compatibility with the company's overall objectives and the feasibility of successfully reaching a designated target.

(1) Current Segment Size and Growth Potential: A company should consider whether a market segment is currently large enough to present the company with the opportunity to make a profit.

If it is not large enough or profitable enough today, the company should make sure that it has high growth potential so that it is attractive in terms of its long-term strategy.

(2) Potential Competition: A market or market segment characterized by strong competition may be a segment to avoid or one in which to utilize a different strategy. Often a local brand may present competition to the entering multinational.

(3) Compatibility and Feasibility: If a global target market is judged to be large enough, and if strong competitors are either absent or not deemed to represent insurmountable obstacles, then the final consideration is whether a company can and should target that market. In many cases, reaching global market segments requires considerable resources, such as expenditures for distribution and travel by company personnel. Another factor to be considered is whether the pursuit of a particular segment is compatible with the company's overall goals and established sources of competitive advantage.

AACSB: Analytical thinking Difficulty: Easy

11 .

Global Marketing Management, 8e (Keegan) Chapter 8 Global Entry and Expansion Strategies 1) Before doing any business internationally, a company must look at the conditions in a potential country to analyze what the advantages, disadvantages, and costs will be and whether it is worth the risk.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) Political risk is directly proportional to a country's stage of economic development.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3) Labor costs include the cost of workers at every level.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 4) In capital-intensive industries, wage levels are often a large percentage of costs associated with a product.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 5) Advanced global companies generally pursue cheap labor for manufacturing locations.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) The use of computer controls and technology has increased the cost of labor.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 7) The greater the distance between the product source and the target market, the lower the transportation costs.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 8) Exchange-rate fluctuations have little effect on the attractiveness of a potential target market.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 1 .

9) When a country's currency fluctuates drastically, a company with productive capacity in other locations can maintain its competitive advantage by shifting production.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 10) If a company's export products are similar to products manufactured inside the target market, the exported target gains competitive advantage.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 11) Global marketers typically take domestic products as they are and sell it to international customers.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 12) A domestic company can go global simply by responding to an unsolicited order.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 13) Export selling involves extensive tailoring of various elements of the marketing mix to global market requirements.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 14) Export marketing involves tailoring various elements of the marketing mix to global marketing requirements.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) A company that engages in export marketing uses an extension approach to pricing, ensuring that product prices in export markets are the same as prices in the home-country market.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 16) Most companies handle export operations in-house.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

2 .

17) The extent of a company's in-country presence in a target market has no impact on perceived customer value.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 18) The costs of maintaining a global staff in an overseas market is cheaper compared to domestic sales.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 19) Licensing is a contractual arrangement whereby one company makes an asset available to another company in exchange for some form of compensation.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 20) Licensees can become direct competitors to licensors.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) Franchising is a contractual agreement where one company sells the rights to its brand, logo, and business model to another company.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 22) Licensing is a more extensive form of participation in foreign markets than joint ventures.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 23) One advantage of a joint venture is that it may be the only way to enter a country if local laws prohibit foreign ownership.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 24) With foreign direct investment, the owner has a passive role without significant influence or management control.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

3 .

25) The most extensive form of participation in global markets is 100 percent ownership of a foreign subsidiary.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 26) Companies can expand seeking new country markets for already identified market segments.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 27) The stages of development for a transnational company are: domestic, international, multinational, global, and transnational.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 28) One of the strengths of the transnational company is that it combines the strengths of each of the preceding stages in an integrated network which leverages worldwide learning and experience.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 29) Research and development becomes centralized when a company becomes transnational.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 30) A multinational company would be self-sufficient, decentralized, and have its key assets dispersed.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 31) How do organizations assess the political risks of an international investment?

A) The higher a country's income, the higher the political risks.

B) The more a country is transparent, the more it is risk-free.

C) The lower the income of per capita, the lower the risks.

D) The more a country allows imports, the higher the risks.

Answer: B AACSB: Analytical thinking Difficulty: Easy

4 .

32) How can an organization gain market access in a new country that limits imports?

A) by establishing a production facility within the country B) by locating a production source outside the market C) by forming a partnership with a local distribution company D) by establishing a local supply chain system in the neighboring country Answer: A AACSB: Analytical thinking Difficulty: Moderate 33) While deciding a location for a manufacturing base, which of the following can be directly determined by organizations based on the foreign exchange rate of a country's currency?

A) potential competition B) product fit C) demands for a product D) costs of production Answer: D Difficulty: Moderate 34) Agents differ from distributors in that agents ________.

A) do not assist in invoice collection B) do not take title to the goods C) add channel value where thousands of customers are involved D) pay directly to exporters Answer: B AACSB: Analytical thinking Difficulty: Moderate 35) Which of the following is true of distributors?

A) They take title to the goods.

B) They cannot add their margins to the sales.

C) They cannot resell to the trade.

D) They allow direct representation to the exporter.

Answer: A Difficulty: Easy 36) Mckelvey Inc., a U.S. - based cosmetics manufacturer, promotes its products using the same price value, composition, and advertisements irrespective of the target market location. In this case, the company is utilizing ________.

A) contract manufacturing B) export marketing C) intermediary selling D) export selling Answer: D AACSB: Analytical thinking Difficulty: Hard

5 .

37) Which of the following is the typical first step for a company that is going global?

A) licensing B) direct exporting C) inshoring D) outsourcing Answer: B Difficulty: Easy 38) Which of the following is true of licensing as a form of global market entry?

A) A company can expand its market reach with almost no capital or marketing costs.

B) It allows a licensor to directly involve in the overseas market and user's needs.

C) It can restrict the growth of domestic competitors in an overseas market.

D) A company's resources cannot be exploited by another company.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 39) ________ refers to a marketing strategy where companies do not manufacture any of their product's components.

A) Product sourcing B) Product differentiation C) Joint venture D) Export marketing Answer: A AACSB: Analytical thinking Difficulty: Moderate 40) Escobar, a global enterprise selling athletic shoes, procures its shoes through contract manufacturing agreements with producers in developing nations. It uses its expertise in distribution and sales to promote these products. In this case, the marketing strategy used by the company is referred to as ________.

A) franchising B) direct investment C) product sourcing D) joint venture Answer: C AACSB: Analytical thinking Difficulty: Hard 41) A ________ is referred as the collaboration between two or more firms on a specific project to serve one or more markets.

A) franchise B) direct investment C) portfolio D) joint venture Answer: D Difficulty: Easy 6 .

42) Which of the following market entry strategies allows an organization 100 percent ownership of its foreign subsidiaries?

A) franchising B) direct investment C) product sourcing D) joint venture Answer: B Difficulty: Easy 43) Which of the following is the first stage of development of a transnational corporation?

A) global B) international C) domestic D) multinational Answer: C Difficulty: Easy 44) Which of the following kinds of marketing orientation is a domestic company most likely to have?

A) polycentric B) ethnocentric C) regiocentric D) geocentric Answer: B AACSB: Analytical thinking Difficulty: Easy 45) How is the location of a manufacturing base dependent on foreign exchange rate of a country's currency?

Answer: In deciding where to locate a manufacturing base, costs of production will be determined in part by the prevailing foreign exchange rate for the country's currency. Exchange rates can be volatile and many companies pursue global sourcing strategies from a "portfolio" of countries and in a range of currencies as a way of limiting exchange-related risk. At any point in time, what had been an attractive location for sales or production may become much less attractive due to exchange-rate fluctuations. The prudent company will incorporate exchange volatility into its planning assumptions and be prepared to prosper under a variety of exchangerate relationships.

Dramatic shifts in price levels of commodities and currencies are a characteristic of the world economy today. Such volatility argues for a sourcing strategy that provides alternative country options for supplying markets. With alternative production locations, if any location is in a country with a seriously overvalued currency, a company with productive capacity in other locations can maintain its competitive advantage by shifting production to competitively valued country locations.

AACSB: Analytical thinking Difficulty: Moderate 7 .

46) Explain the criteria to be assessed when selecting a potential target market for export?

Answer: There are six criteria that should be assessed: 1. Market Potential. What is the basic market potential for the product? To answer this question, secondary information (that which is already assembled and available) is a good place to start.

2. Market Access. This aspect of market selection concerns the entire set of national controls that apply to imported merchandise and any restrictions the host-country government might impose.

These can include such items as import/ export licenses, import duties, nontariff barriers, foreign exchange regulations, and preference arrangements.

3. Shipping Costs and Time. Product modification, export packing, and shipping costs can affect the market potential for a product. If a company's export product is similar to what is already being manufactured inside the target market, shipping costs, duties, and "time on the water" may render the exported product uncompetitive. It is important to investigate alternative modes of shipping as well as finding ways to further differentiate the product–the exporter may need to offset a price or delivery disadvantage.

4. Potential Competition. A country's overseas-based commercial attachés or representatives can be a valuable resource. When contacting a commercial attaché in a prospective country market, it is important to provide as much specific information as possible. Many home-country governments offer a broad range of services, including assistance in finding potential local agents and distributors.

5. Service Requirements. If service, regular technical support, or warranty offerings are required for a product, it must be delivered at a cost consistent with the size and profitability of the market. The growing universality of the Internet makes it possible to offer cost-efficient webbased global service support in addition to or in some cases as an alternative to in-country support.

6. Product Fit. With information on market potential, cost of access to the market, and local competition, a final step is to decide how well a company's product fits the market in question. In general, a product fits a market if it satisfies the criteria discussed previously in the chapter and is profitable.

AACSB: Analytical thinking Difficulty: Moderate

8 .

Global Marketing Management, 8e (Keegan) Chapter 9 Competitive Analysis and Strategy 1) Competition works to drive down the rate of return on invested capital toward the rate that would be earned in a perfectly competitive industry.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) New entrants in an industry push prices downward and squeeze margins, resulting in reduced industry profitability.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 3) One of the barriers that a new entrant to an industry might face is low switching costs.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 4) The availability of substitute products places limits on the prices market leaders can charge in an industry.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 5) Suppliers enjoy bargaining power when their products or services carry low switching costs.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) A buyer can exert power over a supplier when the supplier's products are highly differentiated.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 7) Buyers enjoy bargaining power when they are willing to achieve backward vertical integration.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 8) According to Michael Porter, motivation is one of the local things that distant rivals will find hard to match.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 1 .

9) Firms with high strategic stakes in achieving success in an industry generally are destabilizing because they may be willing to accept unreasonably low profit margins to establish themselves.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 10) The effects of global competition have been highly disadvantageous for consumers around the world.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 11) The downside of global competition is its impact on the producers of goods and services.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 12) A country's size and location are considered as its physical resources.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 13) The quantity of workers available in a country and their wage levels constitute a nation's knowledge resource factors.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 14) Firms paying high capital costs are frequently unable to stay in a market in which the competition comes from a nation with low capital costs.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) Basic factors do not lead to sustainable international competitive advantage.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 16) A focused educational system is an example of a generalized factor.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

2 .

17) Competitive advantage may be created indirectly by nations that have selective factor disadvantages.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) The presence of significant domestic rivalry will create complacency in home firms and will eventually cause them to become noncompetitive in the world markets.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 19) Chance events are occurrences that are beyond the control of firms, industries, and usually governments.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 20) Governments are not considered determinants but can exert their influence on determinants.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) A market environment principally involves economic exchange whereas a nonmarket environment includes regulatory bodies.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 22) The thesis that a firm's home-base country is the main source of core competencies and innovation was challenged by Michael Porter.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 23) The uniqueness and magnitude of the customer value created by a firm's strategy are ultimately determined by the firm's management.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 24) When a firm's product delivers unique value because of an actual or perceived uniqueness in a broad market, it is said to have a cost-leadership advantage.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3 .

25) Cost leadership is a sustainable source of competitive advantage only if barriers exist that prevents competitors from achieving the same low costs.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 26) A narrow-focus strategy can be combined with differentiation-advantage strategies but not with cost-leadership strategies.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 27) A cost-focus strategy focuses on a narrow target segment.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 28) The generic strategy used in variety-based positioning is product differentiation.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 29) According to Porter, segmentation is the generic strategy used in access-based positioning.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 30) Richard D'Aveni notes that in today's business environment, market stability is high due to long product life cycles.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 31) According to Hambrick and Fredrickson, which of the following elements of a strategy represents the competitive advantage of an organization?

A) arenas B) vehicles C) differentiators D) economic logic Answer: C AACSB: Analytical thinking Difficulty: Easy

4 .

32) ________ refers to the decline in per unit product costs as the absolute volume of production per period increases.

A) Economies of scale B) Economies of scope C) Diseconomies of scale D) Diseconomies of scope Answer: A AACSB: Analytical thinking Difficulty: Easy 33) According to Michael Porter, which of the following is a barrier to the entry of new companies into an industry?

A) vertical integration B) horizontal integration C) product differentiation D) rapid manufacturing Answer: C AACSB: Analytical thinking Difficulty: Easy 34) ________ is a major entry barrier where industry leaders convince potential competitors that any market entry effort will be countered with vigorous and unpleasant responses.

A) Corporate narcissism B) Brinkmanship C) Gamesmanship D) Chaotics Answer: B AACSB: Analytical thinking Difficulty: Easy 35) According to Michael Porter, one of the major forces influencing competition in an industry is the threat of ________.

A) Giffen goods B) independent goods C) Veblen goods D) substitute goods Answer: D AACSB: Analytical thinking Difficulty: Easy

5 .

36) According to Michael Porter, the suppliers in an industry enjoy bargaining power when ________.

A) there are many suppliers to choose from B) their products or services are not differentiated C) their products or services carry low switching costs D) their businesses are not threatened by alternative products Answer: D AACSB: Analytical thinking Difficulty: Easy 37) According to Michael Porter, the buyers in an industry enjoy bargaining power when ________.

A) they are planning to integrate horizontally B) they purchase in large quantities from supplier firms C) supplier products represent a small portion of the buyers' costs D) the supplier's products are highly differentiated Answer: B AACSB: Analytical thinking Difficulty: Easy 38) The reluctance of U.S. manufacturers to produce small cars for smaller unit profits despite the growing preference of U.S. customers for small cars is a classic example of ________.

A) marketing myopia B) vertical disintegration C) diseconomies of scale D) diseconomies of scope Answer: A AACSB: Analytical thinking Difficulty: Easy 39) Which of the following production concepts was invented in Japan and gave Japanese automobile companies a knockout advantage in world markets through lower costs and higher quality?

A) horizontal integration B) vertical integration C) lean manufacturing D) mass customization Answer: C AACSB: Analytical thinking Difficulty: Easy

6 .

40) According to Michael Porter, which of the following refers to a country's endowment of resources?

A) factor conditions B) dependent variables C) cultural dimensions D) value constructs Answer: A AACSB: Analytical thinking Difficulty: Easy 41) Which of the following is scarcer in nature, requires sustained investment, and leads to sustainable international competitive advantage?

A) advanced factors B) basic factors C) human resources D) physical resources Answer: A AACSB: Analytical thinking Difficulty: Easy 42) Which of the following is true of the demand conditions described in Porter's diamond model?

A) Early market saturation puts extreme pressure on a company to expand, which leads to inappropriate establishment in foreign countries that destabilize the company.

B) Early home demand fails to anticipate international demand and hence gives foreign rivals the advantage of getting established in an industry sooner than local firms.

C) Slow home-market growth is an incentive for companies to invest in and adopt new technologies, and to build large, efficient facilities.

D) The size and pattern of growth of home demand are important only if the composition of the home demand is sophisticated and anticipates foreign demand.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 43) ________ are geographic concentrations of interconnected companies and institutions in a particular field, which constitute a critical mass.

A) Districts B) Clusters C) Mill towns D) Creative cities Answer: B AACSB: Analytical thinking Difficulty: Easy

7 .

44) According to Michael Porter, which of the following is a broad market strategy that can enable companies to offer lower prices to customers in the late, more competitive stages of the product life cycle?

A) focused differentiation B) product differentiation C) cost leadership D) cost focus Answer: C AACSB: Analytical thinking Difficulty: Easy 45) According to Michael Porter, which of the following is true of differentiation as a generic strategy?

A) It is an effective strategy for obtaining above-average financial returns because unique products often command premium price.

B) It offers an opportunity for small, specialized companies to grow while retaining their narrow focus on highly differentiated products.

C) It requires companies to construct the most efficient facilities in terms of scale or technology and obtain the largest share of market.

D) It has become increasingly popular in recent years as a result of the popularization of the experience curve concept.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 46) According to Michael Porter, which of the following is a narrow market strategy for creating competitive advantage?

A) vertical integration B) horizontal integration C) cost leadership D) focused differentiation Answer: D AACSB: Analytical thinking Difficulty: Easy 47) According to Michael Porter, ________ is a generic strategy in which a company can offer lower prices than the competition to a narrow target market.

A) focused differentiation B) product differentiation C) cost leadership D) cost focus Answer: D AACSB: Analytical thinking Difficulty: Easy

8 .

48) According to Michael Porter, ________ is based on a firm's decision to carry out a limited number of activities related to delivering a limited product or service.

A) needs-based positioning B) variety-based positioning C) access-based positioning D) global network positioning Answer: B AACSB: Analytical thinking Difficulty: Easy 49) According to Michael Porter, access-based positioning occurs when a company ________.

A) satisfies a broad set of needs of all the customers in a wide segment B) limits its product offering in order to minimize its prices C) uniquely or preferentially reaches a specific market D) focuses on the cost leadership generic strategy alone Answer: C AACSB: Analytical thinking Difficulty: Easy 50) According to Hamel and Prahalad, which of the following approaches is being utilized by a company that refuses to follow the practices and regulations set by industry leaders and finds new ways to gain competitive advantage?

A) searching for loose bricks B) changing the rules of engagement C) collaborating D) building layers of advantage Answer: B AACSB: Analytical thinking Difficulty: Easy 51) According to Hamel and Prahalad, which of the following approaches is being utilized by a company that gains access to the know-how developed by other companies through licensing agreements, joint ventures, or partnerships?

A) collaborating B) searching for loose bricks C) building layers of advantage D) changing the rules of engagement Answer: A AACSB: Analytical thinking Difficulty: Easy

9 .

52) Richard D'Aveni uses the term ________ to describe a dynamic, competitive world in which no action or advantage can be sustained for long.

A) hypercompetition B) imperfect competition C) interspecific competition D) intraspecific competition Answer: A AACSB: Analytical thinking Difficulty: Easy 53) According to Porter, what are the different barriers that new entrants to an industry face?

Answer: Porter describes eight major sources of barriers to entry, the presence or absence of which determines the extent of the threat of new industry entrants. The first barrier, economies of scale, refers to the decline in per unit product costs as the absolute volume of production per period increases. When existing firms in an industry achieve significant economies of scale, it becomes difficult for potential new entrants to be competitive. Product differentiation, the second major entry barrier, is the extent of a product's perceived uniqueness. High levels of product differentiation and brand loyalty, whether the result of physical product attributes or effective marketing communication, "raise the bar" for would-be industry entrants. A third entry barrier relates to capital requirements. The enormous capital requirements in such industries as pharmaceuticals, mainframe computers, chemicals, and mineral extraction present formidable entry barriers. A fourth barrier to entry is one-time switching costs caused by the need to change suppliers and products. A fifth barrier to entry is access to distribution channels. To the extent that channels are full, expensive to enter, or unavailable, the cost of entry is substantially increased because a new entrant must create and establish new channels. Government policy is frequently a major entry barrier. Established firms may also enjoy cost advantages independent of the scale economies that present barriers to entry. Finally, expected competitor response can be a major entry barrier. If new entrants expect existing competitors to respond strongly to entry, their expectations about the rewards of entry will certainly be affected.

AACSB: Analytical thinking Difficulty: Easy

10 .

54) According to Porter, what are the generic strategies for creating competitive advantage?

Answer: Porter developed a framework of so-called generic business strategies based on two sources of competitive advantage: low cost and differentiation. The combination of these two sources with the scope of the target market served (narrow or broad) or product mix width (narrow or wide) yields four generic strategies: cost leadership, product differentiation, focused differentiation, and cost focus. When the unique value delivered by a firm is based on its position as the industry's low-cost producer, in broadly defined markets or across a wide mix of products, a cost-leadership advantage occurs. A firm that bases its competitive strategy on overall cost leadership must construct the most efficient facilities (in terms of scale or technology) and obtain the largest share of market so that its cost per unit is the lowest in the industry. When a firm's product delivers unique value because of an actual or perceived uniqueness in a broad market, it is said to have a differentiation advantage. This can be an extremely effective strategy for defending market position and obtaining above-average financial returns. Focused differentiation enables small, specialized companies to grow while retaining their narrow focus on highly differentiated products. The final strategy is cost focus, in which a firm's lower-cost position enables it to offer lower prices than the competition to a narrow target market.

AACSB: Analytical thinking Difficulty: Easy

11 .

Global Marketing Management, 8e (Keegan) Chapter 10 Product Decisions 1) A product could be a tangible object or an intangible service.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) Intangible product attributes do not play a significant role in global marketing.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3) A national product is offered in a single national market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 4) The term regional product is synonymous with local product in the United States.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 5) International products are exclusively offered in global markets.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) Some global products are designed to meet the needs of a national market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 7) A global product is considered as a global brand.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 8) The marketing mix for a global brand can vary from country to country.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 9) Global products cannot be converted into global brands.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 1 .

10) Developing a global product design increases a company's research and development costs.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 11) Creating global brands requires a different kind of marketing effort than to create one or two national brands.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 12) Repositioning existing brands is simpler than creating a new brand in a global market.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 13) Exploiting a particular feature, benefit, or attribute of a product is a frequently used positioning strategy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 14) "Transformation advertising" describes advertising that seeks to change the experience of buying and using a product.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) Marketing of high-touch products requires more emphasis on specialized information and less emphasis on image.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 16) High-touch products may have a global appeal by virtue of their country of origin.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 17) A product saturation level is the percentage of potential buyers who own a particular product.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

2 .

18) Unit cost of a product is directly related to the production volume.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 19) Compliance with the laws and regulations of a global market can lead to increases in costs.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 20) Organizations must ensure that its products are compatible to the environment in which it is being used.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) Every country has a monopoly on a favorable foreign reputation for its products or a universally inferior reputation.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 22) Country stereotyping can present a considerable disadvantage to a competitor in a given market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 23) For international companies, the dual extension strategy grows out of a geocentric orientation.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 24) Dual adaptation is essentially a combination of the product extension/communication adaptation and product adaptation/communication extension approaches.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 25) A global company adapts a dual extension strategy based on an assumption that every market is alike.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate

3 .

26) For a multinational company, the product adaptation strategy grows out of a polycentric orientation, as it assumes that all markets are different.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 27) Dual extension is the best approach to international and multinational marketing.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 28) It is better for a company to have a centralized product development strategy as opposed to one which is dispersed in many countries around the world.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 29) If a product is successful in its home country, it is not necessary to test market in new geographic markets.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 30) How do national products cause substantial opportunity costs to companies?

A) by restricting companies from utilizing global leverage in marketing and production B) by transferring the experience gained in one market to other markets C) by utilizing the expertize acquired by managers in a single product in other markets D) by allowing managers from outside markets to acquire product expertise Answer: A AACSB: Analytical thinking Difficulty: Moderate 31) Which of the following is true about global products?

A) They always carry the same name and image from country to country.

B) They are offered in every world region at every stage of development.

C) They are a symbol about which customers have beliefs and perceptions.

D) They are exclusively used as an umbrella for introducing new products in the market.

Answer: B AACSB: Analytical thinking Difficulty: Moderate

4 .

32) How is a global brand different from a global product?

A) A global brand can be made a global product, whereas a global product cannot become a global brand.

B) A global brand's market positioning is different when compared to that of a global product.

C) A global brand's strategic principles are fundamentally different from those of a global product.

D) A global brand carries the same name and image from country to country, whereas a global product does not.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 33) Product ________ refers to the act of locating a brand in customers' minds over and against other products.

A) differentiation B) sampling C) positioning D) extension Answer: C Difficulty: Easy 34) Which of the following types of products requires a marketing approach that emphasizes less on specialized information and more on image?

A) high-tech products B) high-touch products C) agricultural products D) unsought products Answer: B Difficulty: Easy 35) Under which of the following circumstances would the saturation levels of a product most likely increase in a global market?

A) when the national income per capita of a country increases B) when product supply does not meet product demand C) when a product appeals to only a few segments of a targeted market D) when the economic growth of a country stagnates Answer: A AACSB: Analytical thinking Difficulty: Moderate

5 .

36) Which of the following actions should a global marketer consider to counter the country stereotyping problem in global markets?

A) export products without any modifications B) restrict production to home country C) develop an international image D) sell products at below-market prices Answer: C AACSB: Analytical thinking Difficulty: Moderate 37) Which of the following is the easiest product marketing strategy when pursuing opportunities outside the home market?

A) product adaptation/communication extension B) dual extension C) product extension/communication adaptation D) dual adaptation Answer: B Difficulty: Easy 38) Countries pursuing the ________ strategy sell the same product with the same promotional appeal as used in the home country, in world-market segments.

A) product adaptation/communication extension B) product extension/communication adaptation C) dual extension D) dual adaptation Answer: C Difficulty: Easy 39) Briners Cafe promotes their products as a "quick snack for a busy life" in the United States, and advertises the same products as "cheap and delicious" in the Asian countries. In this case, the product marketing strategy used by Briners is referred to as ________.

A) product adaptation/communication extension B) product extension/communication adaptation C) dual extension D) dual adaptation Answer: B AACSB: Analytical thinking Difficulty: Hard

6 .

40) A global marketing strategy where companies use the basic home-market communications strategy while adapting the product to local use or preference conditions is referred to as ________.

A) product/communication extension B) product extension/communication adaptation C) product adaptation/communication extension D) product/communication adaptation Answer: C Difficulty: Easy 41) Which of the following types of companies will utilize the dual extension strategy based on the assumptions that all markets are alike?

A) global B) international C) transnational D) domestic Answer: B Difficulty: Moderate 42) In ________, the basic home-market communications strategy is retained while the product is changed to local use or preference conditions.

A) dual extension B) mono adaption C) product extension/communication adaptation D) product adaptation/communication extension Answer: D Difficulty: Easy 43) When the environmental conditions and consumer preferences of a global market differ from a domestic market, companies should use a ________ strategy.

A) dual extension B) product extension/communication adaptation C) product adaptation/communication extension D) dual adaptation Answer: D Difficulty: Easy

7 .

44) Rivera Inc., a leading mobile manufacturer in the United States, manufactures a new product similar to its existing line of high-end smart phones to meet the demands for a low-cost product in the developing countries. They also plan to use new ads that are more sensitive to those countries. In this case the product marketing strategy used by Rivera is referred to as ________.

A) mono adaption B) product extension/ communication adaptation C) dual extension D) dual adaptation Answer: D AACSB: Analytical thinking Difficulty: Hard 45) Explain the product positioning strategy based on a product's attribute/benefits with an example?

Answer: A frequently used positioning strategy exploits a particular product attribute, benefit, or feature. In global marketing, the fact that a product is imported can itself represent a benefit positioning. Economy, reliability, and durability are other frequently used attribute/benefit positions. Volvo automobiles are known for solid construction that offer safety in the event of a crash. In the ongoing credit card wars, VISA's advertising focuses on the benefit of worldwide merchant acceptance.

AACSB: Analytical thinking Difficulty: Moderate 46) How do organizations identify new-product ideas?

Answer: The starting point for an effective worldwide new-product program is an information system that seeks new-product ideas from all potentially useful sources and channels. Those ideas relevant to the company undergo screening at decision centers within the organization.

There are many sources of new-product ideas, including customers, suppliers, competitors, company salespeople, distributors and agents, subsidiary executives, headquarters executives, documentary sources (for example, information service reports and publications), and, finally, actual firsthand observation of the market environment.

AACSB: Analytical thinking Difficulty: Moderate

8 .

Global Marketing Management, 8e (Keegan) Chapter 11 Pricing Decisions 1) Changing pricing policies will lead to direct cost implications immediately.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 2) Pricing below cost can be profitable in the long term.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 3) Domestic competition typically puts pressure on the prices of international companies.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 4) The price of a product or service should ideally be higher than the demand for that product or service.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 5) In practice, companies always fix the price of products in country target markets to avoid the impact of currency fluctuations.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) Companies in strong, competitive market positions pass on price increases to consumers leading to a significant decrease in sales volume.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 7) The task of determining prices is simplified by exchange rate fluctuations.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 8) An exchange-rate clause allows the buyer and seller to agree to supply and purchase at fixed prices in each company's national currency.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 1 .

9) Exchange-rate clauses protect both buyers and sellers from unforeseen large swings in currencies.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 10) In many parts of the world, external market information regarding demand is distorted.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 11) Companies typically avoid periodic price adjustments during inflation.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 12) Companies need not maintain gross and operating profit margins under inflammatory conditions.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 13) A local government can require a prior cash deposit from importers before allowing goods into the country.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 14) The United States does not subsidize any of its agricultural sectors.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 15) The traditional method of cost-plus pricing estimates costs based on future forecasts.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 16) Cost-plus pricing requires adding up all the costs required to get the product to where it must go, plus shipping and ancillary charges, and a profit percentage.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate

2 .

17) Compared to other pricing strategies, it's relatively hard to arrive at a selling price using the cost-plus pricing method, even if the accounting costs are readily available.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 18) Price escalation is the increase in a product's price as transportation, duty, and distributor margins are added to the factory price.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 19) Sourcing is a tool that can be used to fight price escalation.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 20) Gray market goods are trademarked products that are exported from one country to another, where they are sold by authorized persons or organizations.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 21) Gray markets are beneficial to buyers as they gain from lower prices and increased choices.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 22) In the United States, gray market goods are subject to a 80-year-old law, the Tariff Act of 1930.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 23) Dumping in international trade is a market skimming strategy.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 24) For a positive proof of dumping to occur in the United States, both price discrimination and injury must be demonstrated.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

3 .

25) Transfer pricing concerns transactions between buyers and sellers that have separate individual corporate parents.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 26) Cost-plus pricing is a variation to a market-based transfer pricing approach.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 27) Transfer prices cannot be determined by allowing an organization's affiliates to negotiate among themselves.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 28) A polycentric pricing policy permits subsidiary managers to establish prices.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 29) Using a geocentric approach to international pricing, a company fixes a single price worldwide.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 30) Local income levels are critical for the pricing of consumer products.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 31) Which of the following is a basic factor that determines the boundaries within which market prices should be set?

A) market access B) competition C) service D) export duties Answer: B AACSB: Analytical thinking Difficulty: Easy

4 .

32) Which of the following is perceived from an experience curve?

A) Prices increase as total production volume is doubled.

B) Labor time does not impact an organization's overall costs.

C) Valued-added costs increase each time cumulative volume doubles.

D) Performing a task more often reduces the costs of doing it.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 33) Which of the following is a global pricing strategy used by organizations when the domestic currency is weak?

A) maximizing expenditures in host-country currency B) billing foreign customers in the domestic currency C) shifting sourcing to domestic market D) improving productivity and engaging in cost reduction Answer: C AACSB: Analytical thinking Difficulty: Easy 34) ________ is a global pricing strategy used by organizations when the domestic currency is strong.

A) Billing foreign customers in the domestic currency B) Minimizing expenditures in local or host country currency C) Shifting sourcing to domestic market D) Stressing price benefits Answer: A AACSB: Analytical thinking Difficulty: Easy 35) Under which of the following circumstances does an exchange-rate policy accept the foreign exchange market's effect on currency value?

A) if the exchange rate is greater than the maximum rate limit B) if the exchange rate is within the agreed range of fluctuation C) if the exchange rate fluctuation is lesser than a minimum rate D) if the exchange rate fluctuation remains unpredictable Answer: B AACSB: Analytical thinking Difficulty: Moderate 36) A marketing strategy used to set deliberate high prices for new products is referred to as ________.

A) market holding B) penetration pricing C) market skimming D) cost-plus pricing Answer: C Difficulty: Easy 5 .

37) Pricing products at a loss for certain amount of time is characteristic of a ________ strategy.

A) penetration pricing B) market holding C) cost-plus pricing D) market skimming Answer: A Difficulty: Easy 38) Companies that want to maintain their share in the market frequently adopt a ________ strategy.

A) market holding B) market penetration C) skimming D) price escalation Answer: A Difficulty: Easy 39) Bailey, a luxury car brand, has manufacturing units located across the United States, from where it exports to several Asian countries. The rising costs and a strong home currency have forced the organization to rethink its strategic plans. Based on the market holding strategy, which of the following actions is the organization most likely to take to maintain its competitive advantage in the Asian countries?

A) sell the product at a loss for a certain amount of time B) increase the price of its exported products C) accept lower margins to maintain competitive advantage D) shift manufacturing units to the target countries Answer: D AACSB: Analytical thinking Difficulty: Hard 40) Which of the following is a disadvantage of using the historical cost-plus approach to arrive at a selling price?

A) It does not include the shipping and ancillary charges as part of a product's cost.

B) It ignores demand and competitive conditions in the target markets.

C) It fails to address the indirect manufacturing costs that a company is likely to incur.

D) It cannot be used by companies that are new to exporting products.

Answer: B AACSB: Analytical thinking Difficulty: Moderate

6 .

41) Which of the following statements best defines parallel importing?

A) selling products at an undercut price than other legitimate importers B) selling goods in the gray market at higher prices than the market rate C) competing with authorized importers in the gray market D) competing in a market by selling legitimately imported goods Answer: B AACSB: Analytical thinking Difficulty: Easy 42) ________ is referred as the exporting of products at a price that is lower than that charged in its home market.

A) Price escalation B) Transfer pricing C) Dumping D) Competitive pricing Answer: C Difficulty: Easy 43) ________ refers to the pricing of goods and services bought and sold by operating units or divisions of a single company.

A) Price escalation B) Transfer pricing C) Dumping D) Competitive pricing Answer: B Difficulty: Easy 44) Which of the following is an alternative approach to transfer pricing?

A) negotiated prices B) sourcing C) dumping D) competitive pricing Answer: A AACSB: Analytical thinking Difficulty: Easy 45) The main purpose of Section 482 of the United States Internal Revenue Code is to ________.

A) control corporate monopoly B) lower prices in global markets C) discourage dumping D) regulate transfer pricing Answer: D AACSB: Analytical thinking Difficulty: Easy

7 .

46) The specific regulation of the U.S. government that governs the fair distribution of income is ________.

A) the Robinson-Pitman Act B) the Sherman Antitrust Act C) GATT D) Section 482 of the tax code Answer: D Difficulty: Easy 47) ________ is defined as the prices that would have been charged in independent transactions between unrelated parties.

A) Predatory formula B) Relative price C) Nominal price D) Arm's-length formula Answer: D Difficulty: Easy 48) Which of the following global pricing policies allows subsidiary or affiliate managers to establish whatever price they feel is most desirable in their circumstances?

A) adaptation B) invention C) extension D) depreciation Answer: A Difficulty: Easy 49) When a company neither fixes a single price worldwide nor remains aloof from subsidiary pricing, the strategy is referred to as ________.

A) adaptation B) invention C) extension D) depreciation Answer: B Difficulty: Easy 50) A company using a geocentric international pricing strategy typically fixes the long term price floor based on ________.

A) transfer prices within corporate systems B) profits from local sourcing C) market penetration pricing D) return on invested capital Answer: D AACSB: Analytical thinking Difficulty: Moderate

8 .

51) What are the three basic factors that determine the market price of a product?

Answer: In any country, three basic factors determine the boundaries within which market prices should be set: cost, competition, and demand. The first is product cost, which establishes a long-run price floor, or minimum price. The second is competition, which of course is defined by customers: your competitors are those companies whose products compete with your products from the consumer's point of view. The third consideration is demand and value: price is a cue for value and, in the case of luxury products, is part of value. A cheap luxury watch is an oxymoron: there is no luxury without a luxury price.

AACSB: Analytical thinking Difficulty: Easy 52) Explain transfer pricing. What are the three alternative approaches to determine a transfer price?

Answer: Transfer pricing refers to the pricing of goods and services bought and sold by operating units or divisions of a single company. In other words, transfer pricing concerns intracorporate exchanges–transactions between buyers and sellers that have the same corporate parent. As companies expand and create decentralized operations, profit centers become an increasingly important component in the overall corporate financial picture. Appropriate intracorporate transfer pricing systems and policies are required to ensure profitability at each level. When a company extends its operations across national boundaries, transfer pricing takes on new dimensions and complications. In determining transfer prices to subsidiaries, global companies must address a number of issues, including taxes, duties and tariffs, country profit transfer rules, conflicting objectives of joint venture partners, and government regulations.

There are three major alternative approaches to transfer pricing. The approach used will vary with the nature of the firm, products, markets, and the historical circumstances of each case. The alternatives are (1) cost-based transfer pricing, (2) market-based transfer pricing, and (3) negotiated prices.

AACSB: Analytical thinking Difficulty: Moderate 53) Explain briefly about the ethnocentric global pricing policy.

Answer: The ethnocentric global pricing policy requires that the price of an item be the same around the world and that the importer absorb freight and import duties. This approach has the advantage of extreme simplicity because no information on competitive or market conditions is required for implementation. The disadvantage of this approach is directly tied to its simplicity.

Extension pricing does not respond to the competitive and market conditions of each national market and, therefore, neither maximizes the company's profits in each national market nor globally.

AACSB: Analytical thinking Difficulty: Moderate

9 .

Global Marketing Management, 8e (Keegan) Chapter 12 Global Marketing Channels 1) Distribution channels are composed of coordinated groups of individuals or firms that add utility to a product or service.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) Street vendors are considered distribution channels.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 3) Distribution channels in markets around the world are among the most highly uniform aspects of national marketing systems.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 4) Place utility refers to the availability of a product or service when desired by a customer.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 5) The starting point in selecting the most effective channel arrangement is a clear focus on a company's marketing effort in a target market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 6) Indirect involvement as a channel strategy requires a company to establish franchised outlets.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 7) Direct involvement as a channel strategy requires incentives to be paid to independent channel agents.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 8) The need for multiple channel intermediaries increases as the number of customers increases in a market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 1 .

9) Direct selling that bypasses wholesale intermediaries is a cost-effective means of serving large-volume retailers.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 10) The degree of standardization of a product has no influence on channel design and strategy.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 11) Companies using direct distribution for consumer products rely on low gross margins to generate the revenue necessary to compensate salespeople.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 12) Bulky products require channel arrangements that minimize the number of times products change hands between channel intermediaries before reaching customers.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 13) Soft drinks are an example of a bulky product whose widespread availability is an important aspect of an effective marketing strategy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 14) Middlemen often practice cherry picking which is highly advantageous to manufacturers attempting to break into a market with a new product.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 15) Middlemen are in business to maximize their own profit and not that of the manufacturer.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 16) A disadvantage to manufacturers for using a distributor's sales force is that it generally tends to increase costs.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

2 .

17) Two of the most important clauses in a distributor contract are the performance and cancellation clauses.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) It is expensive and often impossible to terminate distributor and agent agreements.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 19) Termination can result in legal expenses.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 20) There is a need to delegate a large degree of independence to local channel agents because of the enormous variety of economic, social, and political environments internationally.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) Door-to-door selling is a relatively inexpensive form of distribution that requires low gross margins.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 22) Door-to-door selling is growing in popularity in many countries at later stages of market development.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 23) Half of Japan's cars are sold through door-to-door selling.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 24) Companies sometimes establish retail outlets as a means of obtaining marketing intelligence rather than as a distribution strategy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

3 .

25) In the case of franchise operations, a franchisor agrees to operate a business according to a plan defined by a franchisee and under a trade name owned by the franchisee.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 26) The first step in becoming a global franchisor is to have a well-established and successful operation in a home market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 27) Japan has a characteristic distribution pattern where several layers of small wholesalers play an important role in the distribution of food.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 28) The larger a market, the less feasible it is for a manufacturer to use its own sales force to distribute industrial products.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 29) The low cost of a direct sales force acts as an incentive for establishing direct distribution in a new market.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 30) The process of disintermediation in the global distribution system has been declining at a steady rate.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 31) Order handling refers to the process by which products are made available to a customer.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 32) When entering Japan, it is recommended that foreign companies offer better quality, lower price, or a distinctive positioning as a foreign product.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 4 .

33) A ________ is an organized network of agencies and institutions which, in combination, perform all the activities required to link producers with users to accomplish the marketing task.

A) fulfillment house B) demand signal repository C) general line of merchandise D) channel of distribution Answer: D AACSB: Analytical thinking Difficulty: Easy 34) The purpose of marketing channels is to create ________.

A) time utility B) place utility C) form utility D) all of the above Answer: D AACSB: Analytical thinking Difficulty: Easy 35) Which of the following best explains form utility?

A) the availability of answers to questions about useful product features and benefits B) the availability of a product that is processed, prepared, ready to use, and in proper condition C) the availability of a product or service in a location that is convenient to a potential customer D) the availability of a product or service when desired by a customer Answer: B AACSB: Analytical thinking Difficulty: Moderate 36) In the case of direct involvement, a company that wants to enter a competitive market should ________.

A) establish franchised outlets in the new market B) approach retailers selling substitute products in the new market C) approach retailers selling complementary products in the new market D) establish bonds with distributors or wholesalers in the new market Answer: A AACSB: Analytical thinking Difficulty: Moderate 37) Which of the following is an example of having direct involvement when entering a competitive market?

A) using independent agents B) using wholesalers C) using distributors D) using retail stores Answer: D AACSB: Analytical thinking Difficulty: Easy 5 .

38) Which of the following statements is true of the influence of customer characteristics on a company's channel strategy?

A) The need for multiple channel intermediaries decreases as the number of customers increases.

B) The need for multiple channel intermediaries is high during the early stages of market development.

C) The need for multiple channel intermediaries increases toward the last stages of market development.

D) The technique of direct selling is one of the most cost-effective means of serving largevolume retailers.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 39) Which of the following statements is true of the influence of product characteristics on a company's channel strategy?

A) Products with low unit prices are usually sold using a company's sales force.

B) Products that are sold using direct distribution generally require narrow selling margins.

C) Perishability is an important product characteristic that influences channel strategy.

D) Bulky products are ideally distributed through direct-sales systems globally.

Answer: C AACSB: Analytical thinking Difficulty: Moderate 40) ________ is the practice of middlemen taking orders from manufacturers whose products and brands are in demand so as to avoid any real selling effort for a manufacturer's products that may require push.

A) Gatekeeping B) Informal fallacy C) Cherry picking D) Selection bias Answer: C Difficulty: Easy 41) Which of the following is an example of having indirect involvement when entering a competitive market?

A) using retail stores B) using distributors C) using manufacturer's own sales force D) selling through company website Answer: B AACSB: Analytical thinking Difficulty: Easy

6 .

42) Which of the following aids in indirect marketing?

A) wholesalers B) manufacturer-owned stores C) mail-order selling D) door-to-door selling Answer: A Difficulty: Easy 43) Which of the following statements is true of door-to-door selling?

A) It is a relatively inexpensive form of distribution.

B) It is growing in popularity in many countries at later stages of market development.

C) It fails to take advantage of and utilize local market strengths.

D) It requires high gross margins and can result in higher product prices.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 44) Which of the following involves a contractual agreement whereby a company grants the right to sell its goods and services to another company?

A) joint ventures B) franchising C) cross-licensing D) acquisitions Answer: B Difficulty: Easy 45) The world's best-known franchises are ________.

A) advertising agencies B) travel agencies C) hotel chains D) fast-food chains Answer: D Difficulty: Easy 46) While distributing industrial goods, the larger a target market, the more feasible it is for a manufacturer to ________.

A) rely on distributors or agents B) increase the number of intermediary levels C) use its own sales force D) rely on a wholesaler's work force Answer: C AACSB: Analytical thinking Difficulty: Easy

7 .

47) Which of the following terms is used to refer to large stores?

A) open shops B) tuck shops C) discounters D) convenience stores Answer: C Difficulty: Moderate 48) Which of the following statements is true of global channel innovation?

A) Threshold levels of economic development are not required for supporting retailing methods.

B) Innovation takes place only in the most highly developed systems.

C) The ability of a system to adapt innovations has no relation to its level of economic development.

D) The actions of innovative individual firms alone can never accelerate the adaptation of innovation.

Answer: B AACSB: Analytical thinking Difficulty: Moderate 49) Which of the following is a provision for customers to handle and select merchandise themselves in a store with minimal assistance from sales personnel?

A) self-service B) self-reference C) self-organization D) self-offering Answer: A Difficulty: Easy 50) Which of the following is often the most effective and the only feasible way for a company to establish itself in a new market?

A) by setting up a direct sales force B) by approaching a company producing substitute products C) by providing special incentives to wholesalers D) by providing special incentives to retailers Answer: A AACSB: Analytical thinking Difficulty: Moderate 51) ________ refers to the coordination of production and distribution across markets.

A) Horizontal integration B) Logistical integration C) Vertical integration D) Location intelligence Answer: B Difficulty: Easy

8 .

52) Which of the following statements is true of transportation in the context of global product distribution?

A) Global firms fail to survive in a "two-speed world" that has a high growth rate and low per capita income.

B) Companies in low-growth markets need to deliver high volumes of low-cost products profitably with little infrastructure to support it.

C) Companies in high-growth markets need to develop innovative and cost-competitive logistics to surpass competitors without sacrificing profit margins.

D) A company with home-market competitive advantages in both upstream and downstream activities may be forced to reconfigure distribution activities to enter new global markets.

Answer: D AACSB: Analytical thinking Difficulty: Moderate 53) How do customer characteristics influence channel design?

Answer: Customer characteristics constitute a major factor that affects the process of shaping international channels to fit overall company objectives. The number, geographic distribution, income, shopping habits, and reactions of customers to different selling methods all vary from country to country and, therefore, require different channel approaches. Regardless of the stage of market development, the need for multiple channel intermediaries increases as the number of customers increases. The converse is also true: the need for channel intermediaries decreases as the number of customers decreases. For mass-market products bought by millions of customers, retail distribution outlets or mail-order distribution is effective. In a country with a large number of low-volume retailers, it is usually cheaper to reach them via wholesalers. Direct selling that bypasses wholesale intermediaries may be the most cost-effective means of serving large-volume retailers.

AACSB: Analytical thinking Difficulty: Moderate 54) How are industrial products distributed?

Answer: Industrial channels deliver products to manufacturers or organizations that use them in the production process or in day-to-day operations. Three basic elements are involved in the distribution of industrial products: the manufacturer's sales force, distributors or agents, and wholesalers. A manufacturer can reach customers with its own sales force, or a sales force that calls on wholesalers who sell to customers, or a combination of these two arrangements. A manufacturer can sell directly to wholesalers without using a sales force, and wholesalers, in turn, can supply customers. Finally, a distributor or agent can call on wholesalers or customers for a manufacturer. B2B sales via the Internet are a rapidly growing option. Distribution patterns vary from country to country. Before deciding which pattern to use and which wholesalers and agents to select, managers must ideally study each country individually. In general, the larger the market, the more feasible it is for a manufacturer to use its own sales force.

AACSB: Analytical thinking Difficulty: Moderate

9 .

55) What role does transportation play in distribution?

Answer: Transportation decisions concern five methods a company should use to move its products: rail, truck, air, water, or pipeline. When contemplating market expansion outside the home country, management's inclination may be to configure aspects of the value chain exactly as they are at home. However, this may not be the most effective solution because the organization may lack the necessary skill and experience to conduct all value-chain activities in target markets. A company with home-market competitive advantages in both upstream activities and downstream activities may be forced to reconfigure distribution activities to successfully enter new global markets. Global firms exist in a "two-speed world." One has a lower rate of growth and high per capita income; the other has much higher growth and low per capita income.

These divergent growth patterns have significant implications for a global firm's supply and channel management processes and operations. The challenge of this "two-speed world" is in the need for both flexibility and adaptability in supply-chain creation and management. In light of these challenges, companies are rethinking their sourcing and distribution facilities and partnerships, often looking to "near-shore" production for the added value of providing better service and more innovative products that will allow the firm to charge premium prices.

AACSB: Analytical thinking Difficulty: Moderate

10 .

Global Marketing Management, 8e (Keegan) Chapter 13 Global Integrated Marketing Communications 1) Direct marketing is an element of the promotion mix.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) The Internet is a critical component of integrated marketing communications.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 3) Billboards are the primary medium vehicle, especially for global firms and global brands competing on brand attributes.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 4) The first company to find a global market for any product is always at a disadvantage over competitors.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 5) Advertising is often designed to add psychological value to a product or brand.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 6) Industrial products companies top the list of big global advertising spenders.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 7) Global advertising offers companies economies of scale in advertising and improved access to distribution channels.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 8) Coke has the number one brand-awareness and esteem position in the world according to Interbrand.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 1 .

9) The overall requirements of effective communication and persuasion are fixed and do not vary from country to country.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 10) Advertisers who follow the localized approach are skeptical of the global-village argument.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 11) Proponents of the localization approach to advertising believe that consumer tastes and preferences are converging worldwide.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 12) A localized campaign will result in the substantial benefits of cost savings and increased control.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 13) Standardized global campaigns have the advantage of appeals that focus on the most important attributes of a product in each nation or culture.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 14) According to the 2011 Customer Engagement Report created by Razorfish, traditional wordof-mouth is one of the most important customer engagement channels.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) According to the 2011 Customer Engagement Report created by Razorfish, social networking sites constitute the least important customer engagement channel.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 16) According to the 2011 Customer Engagement Report created by Razorfish, real-time chats with customer service representatives engage customers the best out of all channel categories.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 2 .

17) In traditional media, such as TV, radio, newspapers and magazines, and even podcasts, personal interaction is confined to consumption.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) One of the benefits of curation is that it enables people to experience themselves as participants.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 19) Curation is a stronger engagement vehicle than content creation.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 20) Completing an order application is an example of a social engagement.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 21) Spotlighting customer-generated negative reviews can be beneficial to the company because it demonstrates that the company values customer input even if it's negative.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 22) The smartphone is a device that makes use of convergence.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 23) Behavioral targeting can be used to create the needed degree of engagement for making a marketing campaign successful.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 24) Personal information such as name and e-mail contact that are provided by customers when visiting webpages is an example of observed data.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

3 .

25) Number of page views and time-on-site data are the best indicators of purchase intent.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 26) Reaching unique or overlapping markets that have different levels of product awareness require programming standardization.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 27) Experience research is an experience data ecosystem tool used for tracking behavioral and attitudinal data but not diagnostic data.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 28) The successful marketing of expensive and technically complex industrial products requires a highly trained direct sales force.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 29) An advertising copy should be relatively short and should avoid slang or idioms.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 30) Recognizing overlaps in the use of languages in many areas of the world helps global advertisers realize economies of scale.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 31) Which of the following refers to placing a sponsored, paid message in a mass medium?

A) public relations B) advertising C) inter-process communication D) accommodation Answer: B AACSB: Analytical thinking Difficulty: Easy

4 .

32) Which of the following requires the heaviest advertising support?

A) consumer goods B) industrial goods C) producer goods D) capital goods Answer: A AACSB: Analytical thinking Difficulty: Easy 33) ________ companies top the list of big global advertising spenders.

A) B2B B) Financial services C) Consumer products D) Industrial goods Answer: C Difficulty: Easy 34) In a communication process, an external influence such as competitive advertising that impairs the effectiveness of an advertising message is referred to as ________.

A) signal fire B) language barrier C) information paradox D) noise Answer: D AACSB: Written and oral communication Difficulty: Easy 35) Which of the following would proponents of the standardized approach to advertising support?

A) unifying advertising around the globe B) adapting campaigns to a country's culture C) accepting the global-village argument D) focusing on a single medium of communication Answer: A AACSB: Analytical thinking Difficulty: Easy 36) Which of the following is an advantage of localized advertising campaigns compared to standardized marketing?

A) cost savings B) increased control over campaigns C) focus on product attributes relevant for a nation D) potential creative leverage of a global appeal Answer: C AACSB: Analytical thinking Difficulty: Moderate 5 .

37) According to the 2011 Razorfish Customer Engagement Report, the most important reason for customer engagement across channels and touch points is ________.

A) the consistency with which a company addresses the needs of their suppliers B) getting needs addressed quickly and efficiently by companies C) feeling that the companies people deal with are trustworthy D) the need to feel valued by the companies people do business with Answer: D AACSB: Analytical thinking Difficulty: Moderate 38) According to the 2011 Razorfish Customer Engagement Report, which of the following channels is the least important for customer engagement?

A) transactional e-mail B) company websites C) social networking sites D) traditional word-of-mouth Answer: C AACSB: Analytical thinking Difficulty: Easy 39) ________ refers to the act of rating, reviewing, and otherwise passing judgment on content available in a social setting.

A) Convergence B) Curation C) Emulation D) Configuration Answer: B Difficulty: Easy 40) Which of the following statements is true of social engagement?

A) An advantage of curation is that it leaves no trace on the Internet.

B) In traditional media, personal interaction is confined to consumption.

C) Content on social networks has a long shelf life.

D) Web-enabled self-service interaction is an example of social engagement.

Answer: B AACSB: Analytical thinking Difficulty: Moderate

6 .

41) Which of the following statements is true of online reputation management?

A) Mild doses of negative information after exposure to positive information may increase customers' positive impression about a product.

B) Developing an online reputation management strategy is an important element to branding strategy only at the product category level.

C) A reactive approach to online reputation management is better than a proactive approach.

D) Highlighting customer-generated negative reviews is never beneficial for a company.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 42) ________ refers to the flow of content across multiple media platforms, the cooperation between multiple media industries, and the migratory behavior of media audiences who will go almost anywhere in search of the kinds of entertainment experience they want.

A) Emulation B) Curation C) Configuration D) Convergence Answer: D Difficulty: Easy 43) ________ is information that is contributed by consumers themselves to databases such as social media profiles, answers to online surveys or questionnaires, or personal information such as name and e-mail contact when visiting webpages.

A) Secondary data B) Declared data C) Observed data D) Panel data Answer: B Difficulty: Easy 44) ________ is collected from website visits where companies data mine points of contact and interactions such as dates and times of visits, keywords used to find information, and time spent on selected pages.

A) Observed data B) Declared data C) Secondary data D) Panel data Answer: A Difficulty: Easy

7 .

45) ________ can be expanded to include metrics such as search volume and social intensity as key performance indicators (KPIs).

A) Panel data B) Secondary data C) Declared data D) Observed data Answer: D AACSB: Analytical thinking Difficulty: Easy 46) ________ has grown to become the largest online advertising tool, in great part due to its ability to deliver a targeted message to a potential customer at the most opportune time.

A) Mobile marketing B) E-mail marketing C) Search marketing D) Social networking Answer: C AACSB: Analytical thinking Difficulty: Easy 47) Which of the following statements is true of web analytics as a tool that inhabits the experience data ecosystem?

A) They aid in sentiment testing from social media content.

B) They are generally reported at the aggregate level.

C) They can track both the behaviors and attitudes of customers over time.

D) They include techniques such as ethnography and focus group.

Answer: B AACSB: Analytical thinking Difficulty: Moderate 48) Which of the following data/tools that inhabit the experience data ecosystem provides purely diagnostic data and no tracking data?

A) customer experience measurement systems B) user testing C) web analytics D) voice-of-the-customer programs Answer: B Difficulty: Easy

8 .

49) Which of the following dimensions of the customer experience dashboard is used for sentiment testing and classifying positive or negative customer experience culled from social media buzz?

A) user testing B) web analytics C) experience research D) social listening Answer: D AACSB: Analytical thinking Difficulty: Easy 50) Which of the following is true of Japanese creative advertising strategies according to Tamotsu Kishii?

A) They use humor to create a bond of mutual feelings.

B) They use long, explanatory narrations in television commercials.

C) They place priority on product quality rather than company trust.

D) They prefer direct rather than indirect forms of expression.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 51) What are the major difficulties that organizations are likely to face while attempting to communicate with customers?

Answer: Four major difficulties can compromise an organization's attempt to communicate with customers in any location: 1. The message may not get through to the intended recipient. This problem may be the result of an advertiser's lack of knowledge about appropriate media for reaching certain types of audiences. For example, the effectiveness of television as a medium for reaching mass audiences will vary proportionately with the extent to which television viewing occurs within a country.

2. The message may reach the target audience but may not be understood or may even be misunderstood. This can be the result of an inadequate understanding of the target audience's level of sophistication or improper encoding.

3. The message may reach the target audience and may be understood but still may not induce the recipient to take the action desired by the sender. This could result from a lack of cultural knowledge about a target audience.

4. The effectiveness of the message can be impaired by noise. Noise in this case is an external influence such as competitive advertising, other sales personnel, and confusion at the receiving end, which can detract from the ultimate effectiveness of the communication.

AACSB: Analytical thinking Difficulty: Moderate

9 .

52) What is the role of copy writing in advertising?

Answer: A global strategy of using a global appeal requires the translation of copy, which is the written text of an advertisement. The clearer the basic appeal, the greater is the possibility that it can be executed globally in translation. Copy should be relatively short and avoid slang or idioms. Low literacy rates in countries seriously compromise the use of print as a communications device and require greater creativity in the use of audio-oriented media. It is important to recognize overlap in the use of languages in many areas of the world. Capitalizing on this, global advertisers can realize economies of scale in producing advertising copy with the same language and message for these markets. Advertising slogans often present the most difficult translation problems. The challenge of encoding and decoding slogans and tag lines in different national and cultural contexts can lead to hilarious errors. Advertising executives may elect to prepare new copy for a foreign market in the language of the target country, or to translate the original copy into the target language. A third option is to leave some or all copy elements in the original home-country language. In choosing from these alternatives, the advertiser must consider whether a translated message can be received and comprehended by the intended foreign audience. A copywriter who can think in the target language and understands the consumers in the target country will be able to create the most effective appeals, organize the ideas, and craft the specific language, especially if colloquialisms, idioms, and humor are involved.

AACSB: Analytical thinking Difficulty: Moderate

10 .

Global Marketing Management, 8e (Keegan) Chapter 14 Global Organization and Leadership: Managing the Global Marketing Effort 1) Global business leaders must be capable of articulating a coherent global vision and strategy that integrates local responsiveness, global efficiency and leverage.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) The challenge of leaders is to direct the efforts and creativity of everyone in the company toward personal goals.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3) The use of self-directed teams to respond to competitive advantage is decreasing due to better communications through technology.

Answer: FALSE AACSB: Information technology Difficulty: Easy 4) One critical value vital to global companies today is to have the proper mind set for both leadership and the organization.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 5) For organizational effectiveness, the composition of the board of directors of an organization should have a majority of home-country nationals.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 6) The choice of location for board meetings is not critical.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 7) A key issue in global organization is how to achieve balance between autonomy and integration.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

1 .

8) A geographically dispersed company cannot limit its knowledge to product, function, and the home territory.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 9) As a company's international business grows, the complexity of coordinating and directing this activity extends beyond the scope of a single person.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 10) In a geographic structure, the corporate headquarters retains responsibility for worldwide planning and control.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 11) A country subsidiary is a major structural device employed today to enable a corporation to acquire geographic knowledge.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 12) Product managers with a worldwide responsibility typically achieve competence in technical knowledge and know-how on a global basis.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 13) As foreign product diversification increases, the likelihood that product divisions will operate on a worldwide basis decreases.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 14) Today, successful firms are sourcing product from emerging markets and also looking for customers and new business and product innovations to use globally.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) Planning, control and budgeting are three independent functions of a market audit.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 2 .

16) Most companies typically ignore the previous year's actual performance and concentrate on industry averages when evaluating performance.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 17) A major responsibility of staff specialists is to ensure that lessons learned in more advanced markets are applied to the management of their products in smaller, less developed markets.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) A marketing plan or a budget must be prepared with respect to the level of competition in a target market.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 19) The more entrenched the market competition, the easier it is to achieve market share.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 20) Because market share is hard to obtain, it should not be considered in a marketing audit.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 21) Which of the following characteristics of a great company distinguishes it from an ordinary company?

A) It keeps its purpose and mission limited.

B) It views itself only as a money-making machine.

C) It sees itself as a key social institution.

D) It always adapts a product-centric marketing approach.

Answer: C AACSB: Analytical thinking Difficulty: Easy 22) Which of the following is most likely a key organizational design characteristic suitable for global marketing?

A) a flat organizational structure B) a top-bottom one-way communication hierarchy C) a multilayered internal structure D) a hierarchy with a strong control over subordinates Answer: A AACSB: Analytical thinking Difficulty: Moderate 3 .

23) Which of the following is a factor contributing to the establishment of an international division for an organization?

A) the need for foreign subsidiaries to be bound within the guidelines of the headquarters B) the need for a single organization unit with complete authority to take decisions C) the top management's commitment to head global operations by a single executive D) the top management's decisions to only respond to situations in the global market Answer: B AACSB: Analytical thinking Difficulty: Moderate 24) Which of the following statements is true about regional management centers?

A) The scale of regional management must exceed the scale of operations in the region.

B) These centers reduce the number of management levels within an organization.

C) The center can coordinate within a region on pricing and sourcing.

D) Executives in regional centers do not have any role in the planning and control of each country's operations.

Answer: C AACSB: Analytical thinking Difficulty: Moderate 25) Under which of the following conditions will an international organization move toward an integrated structure?

A) when it has a limited percentage of its total business in foreign countries B) when it has worldwide product diversity and a large-scale foreign business C) when it has low product diversity contributing a large portion of its foreign business D) when it has a limited number of product divisions in the foreign countries Answer: B AACSB: Analytical thinking Difficulty: Easy 26) Which of the following is a distinctive characteristic of multidivisional structured organizations in the United States?

A) These organizations have a close relationship with the different organizations part of the supply chain.

B) Executives at the corporate headquarters are committed to single business units.

C) Corporate headquarters are least concerned about strategic planning and the allocation of resources among business units.

D) Profit responsibility for operating decisions is assigned to managers of individual business units.

Answer: C AACSB: Analytical thinking Difficulty: Moderate

4 .

27) According to Bartlett, which of the following was the first stage of development for successful organizations that avoided the myth of the ideal organizational structure?

A) transitioning from ethnocentric and polycentric to geocentric orientation B) building channels of communication between managers in various parts of the world C) developing organization norms and values to support decision making D) moving from international division to a worldwide product division Answer: A AACSB: Analytical thinking Difficulty: Easy 28) Which of the following is a typical problem caused by global markets to managers responsible for marketing control?

A) Differences in market practices create communication problems.

B) Intermediaries reduce the number of levels in the control system.

C) Managers typically lose marketing control to the executives in global headquarters.

D) The size of the area under a manager's control reduces significantly.

Answer: A AACSB: Analytical thinking Difficulty: Easy 29) ________ is defined as the process by which managers ensure that resources are used effectively and efficiently in the accomplishment of organizational objectives.

A) Review B) Monitor C) Control D) Accommodation Answer: C Difficulty: Easy 30) The ________ structure involves the assignment of operational responsibility of the different areas of the world to line managers.

A) ethnocentric B) geographic C) integrated D) rationalistic Answer: B Difficulty: Easy

5 .

31) Which of the following statements is true of the geographic structure?

A) The geographic structure assigns operational responsibility for geographic areas of the world to the corporate headquarters.

B) The most common appearance of this structure is in companies with closely related product lines that are sold in similar end-use markets around the world.

C) The line managers of the regional centers are given responsibility for worldwide planning and control.

D) Each area of the world–including the "home" or base market–is considered organizationally different and unique.

Answer: B AACSB: Analytical thinking Difficulty: Easy 32) Which of the following statements is true of a full marketing audit?

A) It can only be conducted by the company's own finance team once a year.

B) It utilizes a set of random questions.

C) It is formal and systematic.

D) It is only conducted once in 5 years.

Answer: C AACSB: Analytical thinking Difficulty: Easy 33) Which of the following is typically the first step in conducting an audit?

A) creating a report B) presenting the findings C) analyzing information D) gathering data Answer: D Difficulty: Easy 34) ________ planning refers to the selection of opportunities defined in terms of products and markets, and the commitment of resources, both human and financial, to achieve these objectives.

A) Strategic B) Operational C) Functional D) Accommodative Answer: A Difficulty: Easy

6 .

35) Out of the different types of mechanisms that are available to help headquarters acquire control over a subsidiary, which of the following helps shift the perception of self-interest from subsidiary autonomy to global business performance?

A) data management mechanisms B) managers' management mechanisms C) conflict resolution mechanisms D) session management mechanism Answer: B AACSB: Analytical thinking Difficulty: Easy 36) Which of the following is essential when a company management decides to develop a global strategy?

A) creating autonomous subsidiaries limiting the influence of the headquarters B) changing the balance of power from the headquarters to the global subsidiaries C) restricting subsidiaries from providing inputs into the strategic planning process D) shifting the control of the subsidiary operations from subsidiary to headquarters Answer: D AACSB: Analytical thinking Difficulty: Moderate 37) How does competition influence market planning and budgeting?

A) Market planning and budgeting must be prepared in light of the competitive level in the market.

B) Planning and budgeting is not affected for companies with minor positions in foreign markets competing against entrenched companies in the same market.

C) Competitive moves are not important as a variable in international market planning and budgeting.

D) The more competitive a target market is, the easier it is to prepare market planning and budgeting.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 38) Which of the following statements is true about the indicative planning method?

A) Subsidiaries are in no way bound by the guidance provided by the headquarters.

B) The potential of a target market is estimated completely by an organization's headquarters.

C) An organization's headquarters does the planning and budgeting for the subsidiaries.

D) Planning is done only using the global data and not market specific information.

Answer: A AACSB: Analytical thinking Difficulty: Moderate

7 .

39) Which of the following is most likely a reason for the success of the indicative planning method?

A) combining a global perspective with country-specific marketing plans B) the need for the headquarters to understand a target market in depth C) the restriction on operating subsidiaries to follow global guidelines D) using standard procedures for different target markets Answer: A AACSB: Analytical thinking Difficulty: Easy 40) Which of the following provides a comparison of a company's performance with that of other competitors within the market?

A) a marketing audit B) a global marketing audit C) a measure of market share D) a company's hierarchical flatness Answer: C Difficulty: Easy 41) Which of the following is an informal control method in global marketing?

A) transfer of people B) measuring share of market C) indicative planning method D) marketing audit Answer: A Difficulty: Easy 42) What is the purpose of a global marketing audit?

Answer: A global marketing audit can be defined as a comprehensive, systematic, and periodic examination of a company's or business unit's marketing environment, objectives, strategies, programs, policies, and activities, which is conducted with the objective of identifying existing and potential problems and opportunities and recommending a plan of action to improve a company's marketing performance. The global marketing audit is a tool for evaluating and improving a company's global marketing operations. The audit is an effort to assess effectiveness and efficiency of marketing strategies, practices, policies, and procedures vis-à-vis the firm's opportunities, objectives, and resources.

AACSB: Analytical thinking Difficulty: Easy

8 .

43) Explain any two factors that influence marketing plans and budgets.

Answer: The following factors are important in creating a plan or a budget: Market Potential - How large is the potential market for the product being planned? In every domestic market, management must address this question in formulating a product plan. A company that introduces a product in more than one national market must answer this question for each market.

Impact of Substitute Products - One of the sources of competition for a product in a market is the frequent existence of substitute products. As a product is moved into markets at different stages of development, improbable substitute products often emerge. For example, in Colombia, a major source of competition for manufactured boxes and other packaging products is woven bags and wood boxes made in the handicraft sector of the economy. Marketing officials of multinational companies in the packaging industry in Colombia report that the garage operator producing a handmade product is very difficult competition because of low costs of materials and labor.

AACSB: Analytical thinking Difficulty: Moderate

9 .

Global Marketing Management, 8e (Keegan) Chapter 15 Global Corporate Social Responsibility and Environmental Sustainability 1) The new idea in business and marketing is that profit can and should be aligned with creating economic and social value in any truly successful socially responsible business.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2) According to the old value equation, value can be increased by increasing the price.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 3) Shifting production activities to lower-wage locations is a sustainable solution to competitive challenges.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 4) The myopic view of values emphasizes that companies view value creation as something that happens in a bubble that includes only the company and its customers.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 5) Great companies believe that business is an intrinsic part of society.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 6) Globalization requires that companies respond to the needs of many societies.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 7) Global organizations are successful because they contribute to the wealth and health of every country they operate in.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 8) The three dimensions of corporate social responsibility and environmental sustainability are social, economic, and scientific.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 1 .

9) Companies have acted on the false assumption that sustainability will add costs and decrease their competitiveness.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 10) A negative correlation always exists between sustainability and competitiveness.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 11) As a move toward sustainability, organizations take advantage of a new law setting standards for environmental regulations and gain greater competitive advantage.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 12) A global presence presents more opportunities for experimentation and innovation for a global company.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 13) Stake refers to claim and interest, and the term stake holding defines the interdependent relationship between constituents.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 14) Individuals that have the least impact on corporate governance are considered to be stakeholders of an organization.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 15) All managers in an organization are created as equals.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 16) The top management of an organization has no influence on the extent to which the organization will adapt the concept of shared value.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

2 .

17) According to the neoclassical theory, the sole purpose of a firm is to manage resources according to the societies' interests.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 18) The main rationale of the neoclassical theory is to create economic value in order to provide a financial return to stockholders since they invest their capital in the firm.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 19) Stockholders own the corporations to which they fund resources.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 20) Advocates of the shareholder's perspective toward value creation tend to oppose activities that reduce a firm's profitability.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) Shareholders that provide corporations with financial resources are typically concerned with capital appreciation.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 22) A strong commitment toward corporate social responsibilities contributes to an organization's employee retention.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 23) A company's relationship with its customers has least impact on its credibility.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 24) The concept of outsourcing to low-wage countries is an effort to please shareholders.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy

3 .

25) Companies committed to effective corporate social responsibilities do not extend this concept to their relationship with suppliers.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 26) Members of society are stakeholders who are affected by corporate activities.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 27) Members of a society cannot influence businesses to contribute to change.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 28) According to Peter Drucker, the purpose of a business must lie in ________.

A) managing power B) increasing control C) maximizing share value D) supporting society Answer: D Difficulty: Easy 29) Which of the following is referred to as the big new idea in business and marketing?

A) the emphasis on pushing products B) the focus of a business to maximize profits C) the responsibility of a business to create value D) the provision for customer-perceived benefits Answer: C AACSB: Analytical thinking Difficulty: Moderate 30) Which of the following statements is true about the new concept of value creation?

A) It defines value based on stockholder welfares.

B) It creates a profit-centric value.

C) It defines value as only customer-perceived benefits.

D) It creates real economic and social value.

Answer: D AACSB: Analytical thinking Difficulty: Easy

4 .

31) Which of the following best defines the concept of shared value?

A) creating economic value in a way that also creates value for society B) creating economic value by means of maximizing profits C) creating economic value in a way that reduces prices D) creating economic value by increasing the quantity of products Answer: A Difficulty: Easy 32) Which of the following will most likely give an organization a sense of identity?

A) short-term perspectives B) purpose and values C) profit maximization D) customer retention Answer: B AACSB: Analytical thinking Difficulty: Easy 33) Which of the following is essential in organizing corporate social responsibility as a means to attain competitive advantage?

A) translating existing business strategies and methods into policies on ethical and social issues B) communicating corporate policies on environmental impact and human rights on a need-toknow basis C) adopting only a top-down approach for strategic planning and development D) integrating social, economic, and technological issues into all dimensions of a business Answer: D AACSB: Analytical thinking Difficulty: Moderate 34) Which of the following is the first stage in creating a sustainable competitive advantage?

A) making value chains sustainable B) viewing compliance as an opportunity C) designing sustainable products and services D) developing new business models Answer: B Difficulty: Easy 35) Which of the following is a challenge faced by organizations in the second stage of moving toward a sustainable growth?

A) to increase efficiencies and reduce harmful environmental impact B) to set standards for environmental regulations C) to identify compliance as an opportunity to competitive advantage D) to recognize the ways sustainability can create consumer value Answer: A AACSB: Analytical thinking Difficulty: Moderate

5 .

36) A consumer is considered to be a stakeholder ________.

A) when they stay away from influencing corporate governance B) when they show concerns about the working conditions in a company C) when they refrain from getting involved in the marketing exchange process D) when they acquire an aversion toward an organization's services Answer: B AACSB: Analytical thinking Difficulty: Moderate 37) ________, a key stakeholder, is responsible for shaping the overall mission or goals of an organization.

A) A customer B) An employee C) A shareholder D) The management Answer: D Difficulty: Easy 38) ________ lend financial resources to firms but don't own these corporations in a meaningful sense.

A) Customers B) Employees C) Stockholders D) Vendors Answer: C Difficulty: Easy 39) Which of the following statements is true about shareholders?

A) They are not entitled to a distribution of the dividend income.

B) They have direct equity interest in the firms to which they fund resources.

C) They have no rights to transfer their shares to other investors.

D) They emphasize corporate responsibility over financial profitability.

Answer: B AACSB: Analytical thinking Difficulty: Moderate 40) Which of the following statements is true of employees as stakeholders of an organization?

A) Employees are always aware of competitive alternatives and are therefore not subject to inequitable treatment.

B) Employees are voluntary stakeholders and have limited bargaining power.

C) Employees hold securities and lend financial resources to firms.

D) Employees are responsible for shaping the overall mission or goal and the strategy and structure of the organization.

Answer: B AACSB: Analytical thinking Difficulty: Easy 6 .

41) ________ are key stakeholders in the marketing exchange process.

A) Stockholders B) Employees C) Shareholders D) Customers Answer: D AACSB: Analytical thinking Difficulty: Moderate 42) Which of the following statements is true about the relationship between consumers and an organization's corporate social responsibilities?

A) Consumers' image of the organization and their purchasing powers are influenced by it.

B) Consumers are not considered as powerful stakeholders and the organization's poor relationship with them does not affect its credibility.

C) Consumers today view the quality of products and services as a key issue more than social responsibility.

D) Consumers are not concerned about the organization's corporate ethical behavior.

Answer: A AACSB: Analytical thinking Difficulty: Moderate 43) Which of the following statements is true of members of society as stakeholders of an organization?

A) Members of society are external stakeholders, and are therefore not affected by corporate activities.

B) Collaboration between members of civil society, the private sector, and the public sector can lead to intractable and complex global problems.

C) Members of society have become powerful catalysts and can use modern communication technology to form protest alliances.

D) Members of society do not have the power to force businesses to contribute to change.

Answer: C AACSB: Analytical thinking Difficulty: Easy 44) Explain briefly about the big new idea in marketing.

Answer: The new idea in business and marketing is that it is the responsibility of business to create value. This position is that profit can and should be aligned with creating economic and social value in any truly successful socially responsible business. It is the responsibility of business to make profits in a way that expands the total pool of value: economic and social. The new concept of shared value is the recognition that business has an opportunity and a duty to "expand the total pool of economic and social value" by recognizing that value is not defined only by customer-perceived benefits of a product and price, but also by the external costs and benefits to customers and society.

AACSB: Analytical thinking Difficulty: Moderate

7 .

45) What are the stages that a company goes through to attain a sustainable competitive advantage?

Answer: Companies go through the following stages when they recognize that sustainability is a key to innovation, success, and competitive advantage: Stage 1: Viewing compliance as an opportunity: The challenge in this stage is to see compliance as an opportunity. The first step in the move to sustainability is frequently a new law setting standards for environmental regulation.

Stage 2: Making value chains sustainable: The challenge in stage two is to increase efficiencies and reduce harmful environmental impact throughout the value chain. In order to ensure that this kind of initiative is successfully implemented, it is necessary for the company to develop competencies in determining what is possible and in helping suppliers reduce the harmful environmental impact of their operations.

Stage 3: Designing sustainable products and services: The challenge is to design sustainable offerings or redesign existing ones to reduce harmful environmental impact.

Stage 4: Developing new business models and practice platforms: The challenge is to recognize that sustainability can lead to new ways of creating value for customers and lowering the harmful impact of operations on the environment. One of the advantages of the global company is that a global presence provides more opportunities for experimentation and innovation. A global company with the goal of increased global sustainability must identify and learn from global experience in order to minimize environmental damage and maximize efficiency.

AACSB: Analytical thinking Difficulty: Moderate

8 .

Global Marketing Management, 8e (Keegan) Chapter 16 The Future of Global Marketing 1) Relocating production to low-wage countries is a viable strategy for sustainable competitive advantage.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 2) Value is a relationship between customer benefits and price.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 3) The importance of sustainability is growing as the world's population and income continue to grow.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 4) The IT driven globalization is itself driving constant productivity gains.

Answer: TRUE AACSB: Information technology Difficulty: Easy 5) IT globalization has led employers to replace computers with manual labor.

Answer: FALSE AACSB: Information technology Difficulty: Easy 6) Information enables marketers to identify consumer needs and wants.

Answer: TRUE AACSB: Information technology Difficulty: Easy 7) The Internet is completely dependent on distance.

Answer: FALSE AACSB: Information technology Difficulty: Easy 8) The location of a website affects the cost and speed of accessing information.

Answer: FALSE AACSB: Information technology Difficulty: Easy

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9) The cost and time of communicating across world regions has remained unchanged with the advent of information technology.

Answer: FALSE AACSB: Information technology Difficulty: Easy 10) The improvement of transportation and communications technologies has been a major driver pushing the world toward greater globalization.

Answer: TRUE AACSB: Information technology Difficulty: Easy 11) Consumers and marketers expect interactive engagement in their use of digital media.

Answer: TRUE AACSB: Information technology Difficulty: Easy 12) Organizations can correlate customer attributes and interests into actionable insights using predictive modeling.

Answer: TRUE AACSB: Information technology Difficulty: Easy 13) To truly engage customers in a fast-paced marketplace where push advertising has long lost its luster, companies must move outside of their more comfortable, traditional marketing strategy and programming.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 14) Understanding how people interact with all touch points with the company is imperative to designing and implementing a customer-engagement strategy.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 15) The lack of an educated consumer was a profit center for many businesses with fixed pricing as the norm.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 16) Social tools enable companies to offer better consumer experiences.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 2 .

17) A customer no longer separates marketing from the product or service.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 18) The world economy has remained static over the past 60 years.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 19) Large superpower countries like the United States can dictate to poorer countries how they should behave on the global stage.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 20) The prices of a product are determined by the global supply and demand.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 21) With the rise of the rest of the world, competition for resources and markets are becoming more local.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 22) The engine behind the accelerating growth of global markets is the high rate of growth in the emerging markets and the continued growth in high-income countries.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 23) In the future, the developed countries will contribute more to world growth than the emerging countries.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 24) The graying population of the developed countries will have no impact on the global markets.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy

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25) High-income countries are faced with an aging population and a decreasing birthrate.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 26) The combination of low birthrates and wealth will drive a continuation of the global economic migration of people from poor, undeveloped countries to the rich, developed countries.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 27) In the industrial world, college education and increased women in the workplace have increased the birthrate.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 28) Organizations shift production to emerging markets to cut labor and other location costs.

Answer: TRUE AACSB: Analytical thinking Difficulty: Easy 29) Standardized mature products that require a high percentage cost of labor to produce are made exclusively in high-income countries.

Answer: FALSE AACSB: Analytical thinking Difficulty: Moderate 30) Companies that are not committed to shared value, view value creation as something that includes only the top management and shareholders.

Answer: TRUE AACSB: Analytical thinking Difficulty: Moderate 31) The concept of sustainability does not apply to individual consumption.

Answer: FALSE AACSB: Analytical thinking Difficulty: Easy 32) Which of the following is the single most important driver of globalization?

A) national regulation B) information technology C) domestic focus D) market difference Answer: B AACSB: Information technology Difficulty: Easy 4 .

33) Which of the following has eliminated distance as a barrier to communications and connection via data and voice?

A) telegraph B) radio C) telephone D) World Wide Web Answer: D AACSB: Information technology Difficulty: Easy 34) Which of the following trends in world economy has shaped up the future of global marketing and marketing enterprises?

A) the growing role of consumers as just purchasers of products and services B) downfall of GDP per capita income in developed countries C) the rise of the rest of the world on par with the developed nations D) global economy shifting toward the growth of developed countries Answer: C AACSB: Analytical thinking Difficulty: Moderate 35) Which of the following is an impact of IT driven globalization on marketing?

A) All markets in the world regions are being exposed to global competition.

B) Identifying consumer needs has become more complex than ever.

C) Employers replacing computers with manual labor are gaining competitive advantages.

D) The interaction between companies and consumers is decreasing.

Answer: A AACSB: Information technology Difficulty: Moderate 36) Which of the following is an effect of the Internet on distance in marketing?

A) Marketers cannot communicate with more than one person at the same time.

B) The time taken to communicate increases with increase in distance.

C) The costs of transportation and communication have increased significantly.

D) Marketers can communicate with anyone in the world irrespective of distance.

Answer: D AACSB: Information technology Difficulty: Moderate 37) Which of the following is a typical reason for the accelerating growth of the global markets?

A) decreasing number of middle-class consumers B) high growth rate in the emerging markets C) stagnant growth in the high-income countries D) lack of growth in the world's poorer countries Answer: B AACSB: Analytical thinking Difficulty: Moderate 5 .

38) Which of the following is most likely to cause global economic migration of people to more developed countries?

A) decreasing number of middle-class consumers B) graying population in developed countries C) low birthrate in undeveloped countries D) large wealth in emerging markets Answer: B AACSB: Analytical thinking Difficulty: Easy 39) According to the trade-cycle model, which of the following actions should an organization in a high-income country take when its products mature?

A) shift the location of production to low-wage countries B) innovate to remain competitive in the market C) increase home-country production D) shift the organization's base to emerging countries Answer: A AACSB: Analytical thinking Difficulty: Moderate 40) Which of the following statements is true about the location of production units over the past few decades?

A) Shifting production activities to locations with lower wages leads to long-term sustainable competitive advantage.

B) Production units are being shifted from low to high-income countries.

C) The cost of production is low in emerging markets.

D) The location of production for mature products is restricted to high-wage countries.

Answer: C AACSB: Analytical thinking Difficulty: Moderate 41) Which of the following is the key to success in global marketing?

A) maturity of a product B) location of production C) understanding of the market and the customer D) availability of skilled labor Answer: C AACSB: Analytical thinking Difficulty: Easy

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42) How can organizations create a sustainable competitive advantage in the global marketing environment?

A) by adopting a shared-value approach to marketing B) by shifting production locations to low-wage countries C) by restricting value creation to top management executives D) by enriching the shareholders at the expense of the society Answer: A AACSB: Analytical thinking Difficulty: Moderate 43) Which of the following is essential for a company to survive successfully in a global market?

A) a product-centric marketing approach B) an ethnocentric management orientation C) a low-wage workforce D) a sustainable competitive advantage Answer: D AACSB: Analytical thinking Difficulty: Easy 44) Which of the following statements is true about sustainability?

A) It gives marketers a short-term competitive advantage.

B) Products that are manufactured with renewable resources are sustainable.

C) It does not apply to individual consumption.

D) Sustainable development only caters to the needs of the present generation.

Answer: B AACSB: Analytical thinking Difficulty: Easy 45) Explain briefly about the trends in population changes that affect the global economy.

Answer: The population within the developed economies of the world is continuing to gray. It will impact medical markets, but not all opportunities will be in medicines. Older populations are living more active, healthier lives and will be a major market for goods and services across a broad spectrum of consumer products.

Hand in hand with aging populations, the birthrate in the high-income countries is collapsing.

The combination of low birthrates and wealth will drive a continuation of the global economic migration of people from poor, undeveloped countries to the rich, developed countries. In the industrial world, college education and increased women in the workplace have reduced birthrates to the point where population is steady or declining.

AACSB: Analytical thinking Difficulty: Moderate

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46) Explain the importance of shared value as a means to attain sustainable competitive advantage.

Answer: Shared value is a big new idea for many global marketers and a very old and accepted idea for others. The capitalist system in many countries is failing to meet the needs of society. In other countries, it is alive and well. This is good news: the companies and countries that understand and practice the application of this concept have proven that it works in today's global economy.

Companies that are not committed to shared value are trapped in an outdated and obsolete approach to value creation. These companies view value creation as something that happens in a bubble that includes only top management and shareholders. In this view, whatever is good for the bottom line is good for society. This view is justification for overlooking the well-being of employees, customers, and suppliers and the economic collapse of entire communities. It is this view that leads companies to the myopic conclusion that shifting activities to locations with lower wages is a sustainable solution to competitive challenges when it is, in reality, a short-term move that does nothing to create sustainable competitive advantage. Ignoring the concept of shared value enriches management and shareholders at the expense of society.

AACSB: Analytical thinking Difficulty: Moderate

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