Principles of Marketing Online
Learning Module 7, Chapter 7
Serving Global Markets
Test 7 is multiple choice and is worth 10 points (with 65 actual and 5 bonus points). Each
student is to key in their answers on the ANSWER SHEET and e-mail to the instructor by
12:00 midnight on Friday (10/16/09). Think and carefully select your answers to the
questions. This is not a group test, you are to do your own work.
ANSWER SHEET REQUIRED
1. A major question which, correctly answered, helps assure success in foreign mark ets is
a. Can we apply the exactly same marketing techniques abroad as we use domestically?
b. Do we have the capacity to deal wit h or eliminate officials of foreign governments?
c. How can we turn potential threats into opportunities?
d. Do any of our executives speak a foreign language - any foreign language?
2. The value of U.S. exports to Asia now approximate
a. about half the amount of U.S. exports to Europe.
b. well over twice the U.S. exports to Canada.
c. twice the total of U.S. exports to Europe.
d. only about fifteen percent of our exports to France and Italy combined.
3. Which of the following companies is the leading U.S. exporter?
a. General Motors
b. General Electric
4. As measured by sales, which of the following is the largest company not bas ed in the U.S.?
d. Royal Dutch/Shell
5. The largest corporation in the United States is
a. General Motors Corporation
c. General Electric
d. Wal-Mart Stores
6. The most profitable U.S. servic e exports are
a. travel and tourism.
b. in-store retailing.
c. business and technical services.
7. All of the following are benefits of going global except
a. generating additional revenues.
b. simplifying distribution channels.
c. gaining new insights into customer behavior.
d. advance notice of new products.
8. One-fifth of the world's population -- 1.2 billion people -- live in
b. South America
d. Nort h America
9. At present, the proportion of world population living in large cities is
a. less than 15 percent.
b. 25 percent.
c. 42 percent.
d. 50 percent.
10. Worldwide, the rate of population growth is ________ while the pace of urbanization is _______.
a. slowing; growing.
b. slowing; slowing.
c. growing; slowing.
d. growing; growing.
11. Which of the following count ries is the most attractive to U.S. marketers ?
b. South Africa
12. The underlying foundation for modern life and efficient marketing which an area must possess in order
not to be considered underdeveloped is known by the term
13. All of the following are considered parts of a nation’s infrastructure except
a. retailing and wholesaling facilities.
b. transportation networks.
c. communications systems.
d. energy facilities.
14. Why did Blockbuster decide to shut down its stores in Hong Kong?
a. The government ordered the stores shut down.
b. The population of Hong Kong is declining.
c. Video piracy is rampant in Hong Kong.
d. Most households in Hong Kong do not own DVD players or VCRs.
15. What percentage of total sales does Coca-Cola generate from int ernational markets?
a. Around one-quarter.
b. Between one-quarter and one-half.
c. Between one-half and three-quarters.
d. More than three-quarters.
16. The world's largest market for cell phones, with 200 million subscribers expected by the year 2010, is
a. the United States.
b. the Russian Federation.
17. Natives of India, both ric h and poor, prefer
a. to buy in bulk, saving money because of the lower unit price of the goods.
b. small packages with low prices, even when larger packages may be more economical.
c. disposable products to products that have to be kept for a while.
d. to purchase symbols of affluence so all can see how well they 've done.
18. Marketers expect developing economies to have
a. substandard utility and communications networks.
b. excellent highway and railroad systems for goods transportation.
c. extensive involvement in precious metals mining.
d. high levels of literacy but not much engineering education.
19. The new European Union currency, the "Euro," is based on the idea that
a. tying other European currencies to the Euro will stabilize exchange rates.
b. the presence of the Euro will eliminate soft currencies from the marketplace.
c. having a single currency will strengthen Europe's competitiveness in the global
d. having such a currency will strengthen the area's barter economy.
20. All of the following are so-called hard currencies except
c. Canadian dollar.
d. Russian ruble.
21. Assume the value of the dollar falls relative to the euro, which of the following will be hurt the most?
a. European visitors to the U.S.
b. U.S. visitors to Europe
c. European importers of American products
d. American ex port ers to Europe
22. A rise in the value of the dollar relative to the euro would hurt all of the following firms except
d. The Coca-Cola Company
23. The controversial 1996 law that attempted to impose trade sanctions on Cuba is the
a. Helms-B urton Act.
b. Cuban Trade Restriction Act.
c. Export Trading Act.
d. Nort h American Free Trade Agreement.
24. The Foreign Corrupt Practices Act makes bribery of foreign officials in attempts to solicit new or repeat
sales abroad illegal and
a. punishable by fines in excess of $1 million levied against the individuals involved.
b. can result in fines and imprisonment for the individuals involved and seizure by the foreign
government of the firm's assets.
c. has been controversial because what constitutes "bribery" is not clearly defined in the law.
d. is seldom considered by firms a serious enough threat to deter them.
25. Where did ISO certification originat e?
b. United States
d. United Nations
26. ISO 14000 standards set requirements for
a. product quality.
c. work er compensation.
d. environmental prot ection.
27. The basic purpose of revenue tariffs is to
a. raise money for the country into which the products are being imported.
b. raise the retail prices of imported products to match or exceed those of similar domestic
c. counter the effects of protective tariffs on the domestic market.
d. stabilize the prices of imported goods.
28. Tariffs whose purpose is to raise funds for government operations are known as
a. operating tariffs.
b. protective tariffs.
c. revenue tariffs.
d. funding tariffs.
29. The Republic of Eastern Africa imposes a duty on imported goods to pay for government services. This is
best described as a(n)
a. protective tariff.
b. revenue tariff.
c. import quota.
d. anti-dumping law.
30. Exchange control is an administrative barrier to international trade that consists of
a. requiring that firms exchanging currencies do so through the cent ral bank at its discretion.
b. supporting domestic industry through grants of money or research support.
c. completely banning the importation of a product.
d. selling products in a foreign market cheaper than they are sold domestically.
31. A complete ban on the import of a product is known as
a. an import quota.
b. an embargo.
c. a revenue tariff.
d. a prot ective tariff.
32. Boeing and Airbus are currently in a dispute over
b. protective tariffs.
c. government subsidies.
d. import quotas.
33. The practice of selling a product in a foreign mark et for a lower price than it commands in the producer's
domestic market is called
b. exchange pricing.
d. competitive reaction.
34. When a group of nations agree to the free trade of goods among themselves by abolishing tariffs and
other trade restrictions, the nations have created a
a. common market.
b. customs union.
c. trading block.
d. free trade area.
35. Among the forms of multinational economic integration, the one that seeks to reconcile all government
regulations affecting trade is the
a. common market.
b. customary union.
c. free-t rade area.
d. united state.
36. This type of multinational organization features free trade of goods among the members and a uniform
tariff for trade with nonmember nations. It is a
a. common market.
b. common area of administration.
c. customs union.
d. free trade area.
37. Which organization was established as a result of GA TT?
b. the EU
c. the WTO
d. the FTAA
38. The progress the WTO has made toward its goals of liberalizing world financial services,
telecommunications, and maritime markets has been
a. slow - its activities have focused on complaint resolution, not trade barriers.
b. rapid - several major new treaties have been ratified in the last two years.
c. about as expected - there have been the usual victories and the usual defeats.
d. extremely fast - some authorities claim a new world order by the year 2010.
39. Which of the following is one of the major policy initiatives of the WTO?
a. increasing the average level of education world -wide.
b. liberalizing world financial services.
c. replacing the bull fight in Spain with a less terminal sort of contest.
d. regulating automobile production by less-advanced nations.
40. Assume China and the United States are involved in a trade dispute. Which organization will attempt to
resolve the dispute?
a. United Nations
41. The U.S. would eventually like the NAFTA to become
a. the FTAA.
b. part of the EU.
c. a global free trade zone.
d. an American-Asian free trade zone.
42. All of the following statements about the FTAA are correct except
a. the NAFTA nations will bec ome members of the FTAA.
b. the FTAA would be the largest free trade zone in the world.
c. the FTAA would include nations from both North and Sout h America.
d. the FTAA is scheduled to go into effect in 2008.
43. Comparing the E U to the United States, the EU’s GDP is ___________ than that of the United States
while its population ___________.
a. smaller; is smaller.
b. smaller; is larger.
c. larger; is larger.
d. larger; is smaller.
44. The goal of the EU is
a. establishment of 155 sets of standards for their area.
b. elimination of some of the smaller European nations like Switzerland.
c. removal of all barriers to free trade among its members.
d. absorption of the former "eastern bloc" of n ations.
45. Which of the following count ries joined the EU most recently?
46. Which is the most often cited reason for U.S. firms going global?
a. Globalization of competition
b. New customers in emerging markets
c. Reduced trade barriers
d. Globalization of customers
47. The first step toward successful global marketing is to
a. secure top management's support for the effort to become an exporter.
b. seek to license a foreign company to produce and market its products.
c. enter int o a joint venture wit h a foreign firm to gain market share in a foreign market.
d. establish and maintains a separate marketing or selling operation in a foreign country.
48. The type of organization that provides first-time exporters with expertise to help in locating foreign buyers,
handling paperwork, and conforming to local labeling and testing laws is called:
a. an export facilitator.
b. an export title company.
c. a trade assistance corporation.
d. an export management company.
49. The arrangement where a small firm teams with and serves as a subcontractor for a larger int ernational
company on a large foreign project is called
a. international trade ment orship.
b. trade facilitation.
c. an offset agreement.
d. a mutual trade agreement.
50. A form of contractual agreement in which a wholesaler or retailer acquires the right to sell a manufacturer
or other firm's products and use the firm's brand name while agreeing to conform with the firm's operati ng
a. foreign licensing.
c. joint licensing.
d. offset licensing.
51. Which of the following is NOT one of the advantages of foreign licensing over ex porting?
a. access to the local partners' (licensees') marketing in formation.
b. access to local distribution channels.
c. protection from certain legal barriers.
d. less control of the venture by the licensor.
52. The contractual agreement by which a domestic firm grants foreign marketers the right to distribute a
firm's merchandis e or use its trademark, patent, or process in a specified geographic area is called
a. subcontracting through a foreign provider.
b. franchising as the franchiser participant.
c. reciprocal partnership.
d. foreign licensing.
53. McDonald’s and Starbucks have extensive operations in foreign markets. McDonald’s has generally used
the __________ approach while Starbucks has used the __________ approach.
a. direct investment; franchise.
b. franchise; foreign licensing.
c. franchise; direct investment.
d. foreign licensing; franchise.
54. Honda, a Japanese firm, builds a factory in Alabama to make minivans to be marketed to Americans. This
venture is best described as
a. a joint venture bet ween Honda and Alabama.
b. foreign mark eting by Honda.
c. international direct investment by Honda in the United States.
d. indirect exporting.
55. The international market ent ry strategy that involves high levels of involvement and high risk potential but
offers a competitive advantage over ot her alternatives is
b. offset agreements.
c. foreign licensing.
d. international direct investment.
56. Which of the following is not an example of international direct investment by a firm?
a. a foreign sales office.
b. overseas marketing subsidiaries.
c. acquisition of an existing foreign company.
d. an export management company.
57. A firm with significant operations and marketing activities outside its home country is
a. a monopoly.
b. an active export er.
c. a multinational corporation.
d. an overs eas market er.
58. Though direct foreign investment calls for a high level of involvement and risk, firms that choose the
strategy often find themselves with
a. difficulty getting their products into the host count ry.
b. problems dealing with the citizens of the host country.
c. real problems gaining market share against local firms.
d. a competitive advantage.
59. ExxonMobil can best be described as a
a. global exporter.
b. multinational corporation.
c. domestic corporation.
d. global importer.
60. Examples of alternative strategies that international marketers can choose from in selecting an
appropriate product/promotion strategy are
a. product adaptation and dual adaptation.
b. promotion adaptation and direct exporting.
c. countert rading and product invention.
d. global marketing and multinational marketing.
61. In the int ernational mark et, a product adaptation strategy combines
a. changes in promotion strategy with changes in the product itself.
b. the domestic product with promotional changes tuned to the foreign market.
c. product changes with the same promotional strategy used in the domestic market.
d. product characteristics not seen in the home count ry with a foreign promotional strategy.
62. Developing a completely new product to take advantage of a unique foreign opportunity is called product
63. Which of the following statements about the international aspects of distribution strategy is true?
a. Trans port ation systems and warehousing facilities may be unavailable or of poor quality in
a given foreign market.
b. Switzerland's train system, the Volksbahn, is of especially poor quality.
c. Because of different cultural approaches to business, international marketers should avoid
d. Europeans have never responded to direct-by-television sales efforts.
64. Which of the following need NOT be considered in making an international distribution decision?
a. precisely duplicating domestic distribution strategy
b. the nature of the firm's products
c. transportation options available
d. warehousing facilities and their quality
65. Countert rade is makes up about ______ percent of the glob al trade. The rat e of inc reas e in
countert rading has ________ in recent years.
a. 25 percent; increased.
b. 25 percent; slowed.
c. 50 percent; increased.
d. 50 percent; slowed.