BUS 346 Ch 8

Global segmenting, targeting, and positioning are more complicated than domestic segmenting and positioning because of cultural nuances, significant subcultures within countries, and
c. differences in the way consumers see themselves and in the way they see products and services.
Global businesses often find it particularly difficult to understand the __________ of a country’s culture.
c. underlying values
NCD company wants to expand into the Mexican market. It has the financial resources, wants to control business operations, and has had considerable success marketing to Hispanics in the United States. NCD will likely use __________ to expand into the Mexican market.
b. direct investment
Which of the following trade agreements is designed to manage and promote trade activities for the United States, Canada, and Mexico?
d. NAFTA
Global segmentation, targeting, and positioning (STP) are more complicated than local STP, in part because
c. consumers may view their roles differently in different countries
Cory is working on a global marketing assessment team looking out well into the future to help determine the most attractive market areas around the world. He is evaluating market sizes and growth rates. Based on population growth rates in different regions, he should consider that
e. countries with high purchasing power today may not continue to show the same growth in the future
When considering global marketing opportunities in Bangladesh, Tom asked the question, “How will we get it there?” Tom is concerned about __________ capabilities in Bangladesh.
a. infrastructure
During the early stages of globalization, in the 1950s and 1960s, _______________ were uniquely positioned in the global marketplace because they had the skills necessary to develop, promote, and market brand name consumer products.
d. large U.S. firms
When a company decides to minimize risk and enter a global market by shipping its products to buyers in other countries, this is known as
b. exporting
In China, state control of media is high, so companies are challenged to find ways to get their message to customers. This demonstrates one of the difficulties in crafting a global ________ strategy.
d. communication
Which of these trade agreements represents the highest level of integration among participating nations?
e. EU
Culture affects
a. every aspect of consumers’ purchase decisions
Changes in _________ have been a driving force for growth in global markets for decades.
d. technology
A __________ limits the quantity of imported merchandise, thus minimizing competition faced by domestic products.
e. quota
Geert Hofstede’s cultural dimensions concept focuses on five dimensions of __________ in a country.
b. underlying values
When entering a foreign market, the least risky strategy is
d. exporting
The most common measure of market potential of an economy is a country’s
a. GDP
The Big Mac Index is a novel measure of
b. purchasing power parity
When firms pool their resources to enter a new market, they create a
b. joint venture
Franco, a former retailer, has been living in the United States for five years and wants to start a business. He does not have an existing firm or a product, and he doesn’t have a lot of capital, but since he loves McDonald’s food, he decides to
open a McDonald’s franchise.
Tariffs, quotas, and currency exchange policies affect global
pricing strategies.
Which of the BRIC countries has the highest illiteracy rate?
India
One Laptop Per Child is a nonprofit initiative with the goal of making extremely low-cost laptops available to children in the developing world to help them learn skills, with the goal of helping them to learn skills needed in today’s workforce. If some of the low-cost technology developed for this laptop found its way into laptops created for U.S. consumers, this would be an example of
reverse innovation.
Chris laughed at some of the cultural mistakes companies made in advertising and promotion in international trade while he was in school. Now he was trying to determine what had gone wrong with the campaign he had planned in Latin America for his company’s product, and it didn’t seem quite as amusing. He narrowed the issues down to sociocultural factors. He was looking at both __________ and __________.
visible artifacts; underlying values
Marketers considering operations and trade with a specific country must consider whether the country belongs to a trading bloc. A trading bloc is a group of countries
that have established a formal agreement to manage trade activities.
Which statement about India’s population is TRUE?
India’s workforce is highly skilled, particularly in technology.
Which of these is NOT one of the BRIC countries?
Bulgaria
If you visit a Kentucky Fried Chicken restaurant in China, you will find congee, a rice porridge that can feature pork, pickles, mushrooms, and preserved egg, on the menu. This is an example of which global product strategy?
Sell totally new products or services.
Which of the following global entry strategies is being used if a company collaborates with a competitor on a globally based opportunity for mutual benefit, but the competitors do not invest in each other?
strategic alliance
Tariffs protect domestic producers by
making imported products more expensive.
Gandolph’s Tires sells the same tire globally, but it uses different advertisements based on the country and culture. This is an example of
glocalization.
Many of the best-known American retailers, like Starbucks and McDonalds, have expanded globally using
franchising.
Global marketers are under constant pressure to shorten distribution channels to
reduce costs.
Graham had developed an extremely successful advertising and promotion campaign for a client in the United States. The client wanted to roll out the same campaign to markets worldwide, but Graham cautioned against doing this, most likely because
differences in languages, customs, and culture might make the campaign meaningless and ineffective in some markets.
China, like many other countries, usually requires entering firms to create _________ when expanding into their markets, limiting outsiders’ control of businesses.
joint ventures
Which of the following is currently a negative factor for foreign investment in India?
India’s infrastructure for supply chain management is not up to date.
What do the BRIC countries have in common?
They are experiencing significant levels of economic growth.
Which of the following best describes the direct investment global entry strategy?
With direct investment, a firm maintains total ownership of its plants, operation facilities, and offices in a foreign country.
Globalization refers to the process by which goods, services, capital, people, and ideas
flow across national borders.
Mary wants to sell her products in Europe, since they are doing well in the U.S. She does not have a lot of capital and is risk-averse, so she most likely would choose to begin with
exporting her products.
In most cases, countries use tariffs to reduce foreign competition, but tariffs are also used
as a response to perceived unfair trade practices.
Unilever discovered that people in emerging economies could not afford to buy standard sizes of toothpaste or shampoo, so Unilever started selling single-serve packets at very low prices. Later, Unilever discovered that the same approach worked in the U.S. and started also selling them there. This is an example of
reverse innovation.
Which of the following is NOT one of the major trade agreements affecting global marketing?
GNI
When Ben evaluated the commercial infrastructure in Mauritius, he considered the island’s
legal, banking, and regulatory systems.
Which country’s government has recently made significant changes that will modernize the retail environment, such as allowing joint ventures and direct ownership in some cases?
A strategic alliance is a relationship in which two firms collaborate on a business opportunity, but do not invest in each other.
Celia’s firm has developed a breakfast cereal targeted toward children. Rather than compete in the mature U.S. market, she has decided instead to introduce the product in Europe, where she feels it will be innovative. Her advertising agency urged caution because
advertising regulations differ in other countries, including advertising to children.
The most important consideration when a firm chooses a global product strategy should be
the needs of the target market.
Gross national income equals GDP
plus the net investment income earned from abroad.
Marketers sometimes use Hofstede’s cultural dimensions to design marketing campaigns
consistent with underlying cultural values in a country.
With a median age of 34.1 years, ________ is one of the most rapidly aging countries in the world.
consistent with underlying cultural values in a country.
When entering into a franchise agreement, what term is used to refer to the firm that is granted the right to operate a business using the franchise name and business concept?
franchisee
Economic measures like GDP and GNI do not fully account for a country’s economic health because they only measure
material output.
Core Publishing Company learned that when selling overseas, local fulfillment can be more cost effective, and it can decrease delivery time and improve customer service. This is an example of a global _________ strategy.
distribution
As part of efforts to stimulate economic development in Africa, the Gates Foundation announced that it would provide cellular phones to farmer cooperatives. The Gates Foundation recognized problems in __________ exist in many African markets.
communication
Domestic firms developing a global entry strategy might consider franchising; however, the disadvantages need to be considered. Which of these is NOT a disadvantage of franchising?
Franchising is the riskiest way to enter a foreign market.
The components of global market assessment include all of the following EXCEPT
ethnic analysis.
GDP is defined as
the market value of goods and services produced in a country in a year.
The United States imports more goods from China than it exports to China. This is known as
a trade deficit.
Which of the following is NOT one of Hofstede’s cultural dimensions?
certainty assurance
Chris is gathering information about the general economic environment in Nepal. He will look for information about the general economic environment, market size and population growth rate, and
real income.
Once a firm has done an analysis of the most viable markets for its products, then it must next
conduct an internal assessment of its capabilities.
In the 1970s and 1980s, __________ dominated the global marketplace because they could exploit their skills in production, materials management, and new product development.
Japanese firms
Generally, firms entering foreign markets begin with
less risky strategies first.
Which of the following is currently a negative factor for foreign investment in Russia?
Russia is known for corruption, creating ethical dilemmas for firms.
When Ford introduced its Figo in India, it was responding to
the economic and social trends in India toward small cars.
Which country is projected to become Europe’s largest online market in the next few years, with Internet users growing at a rate of 15 percent annually?
Russia
Manufacturers would prefer to produce in a country with a trade __________, because it signals a greater opportunity to export products to more markets.
surplus
Of the five strategies for entering new markets, direct investment creates the
greatest potential risk.
Exchange control refers to the regulation of a country’s
currency exchange rate.
If you visit a Kentucky Fried Chicken restaurant in China, you will find congee, a rice porridge that can feature pork, pickles, mushrooms, and preserved egg, on the menu. This is an example of which global product strategy
sell totally new products or services
Ford Motor Company decided to sell the Fiesta around the globe. Which of the following would be an example of glocalization of the Fiesta?
The same product design and features in all countries, with variations in the promotional campaigns country by country.
Which country has a large literate population, which has helped it move up to become the world’s seventh largest economy?
Brazil
Global pricing strategies should be consistent with
positioning strategies.
Which country has a rapidly aging population due to its one-child policy?
China
Gerald is assessing global entry strategies for his gourmet sandwich business. He does not want to take a lot of risk and he is willing to limit his control of international stores. Gerald will likely use a __________ strategy.
franchising
The term “trade deficit” refers to
higher levels of imports than exports
Global marketers typically find distribution in developing countries is more complex because
they must go through many types of distribution channels
Which of the following is one of the global entry strategies?
direct investment
Many developed countries are experiencing __________ population growth.
zero or negative
Brands can be extremely valuable domestically, but challenging internationally. Companies can help to overcome language difficulties in using brands by
developing brand names that are meaningless in known languages
Franz lives in a country where he and his friends have disposable income, in spite of the fact that their average income is $650 per month, because they have no debt and don’t save money. Franz most likely lives in
Russia
When the value of the dollar declines in relation to other currencies, it benefits U.S. marketers who
export goods to other countries.
Why should marketers be aware of the BRIC countries?
They are likely to be the source of most market growth.
According to purchasing power parity theory, if __________ is/are in equilibrium, products will cost the s
exchange rates
Which of the following statements best describes global expansion through a strategic alliance?
A strategic alliance is a relationship in which two firms collaborate on a business opportunity, but do not invest in each other
Which of the following is a potential negative factor for foreign investment in China?
China’s population is aging rapidly.