Test Bank for Global Marketing 11
Edition by Green, Keegan
ISBN: 9780135357477
Global Marketing, 11e (Green/Keegan)
Chapter 1 Introduction to Global Marketing
1) What is the goal of a firm that pursues a global market development strategy?
A) Creating new product offerings in a new country
B) Seeking new customers in a geographical market
C) Creating new niche markets in each country they serve
D) Creating new products for a new country
Answer: B
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
2) In which way does Starbucks exemplify the implementation of growth strategies in its global markets when the company offers drinks to non-coffee drinkers and introduces new flavors?
A) Market development
B) Diversification
C) Market penetration
D) Product development
Answer: D
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
3) Why did Starbucks drop the word "coffee" from its logo after acquiring Evolution Fresh and Teavana Holdings?
A) To indicate standardization
B) To indicate adaptation
C) To indicate diversification
D) To indicate automation
Answer: C
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
4) How could McDonald's use product development to expand into India?
A) Offer meals and drinks in multiple sizes.
B) Offer a loyalty program for frequent diners.
C) Increase the number of outlets.
D) Offer a vegetarian burger.
Answer: D
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
5) Which of the following is a fundamental difference between regular marketing and global marketing?
A) The lack of marketing mix
B) The scope of activities
C) The lack of strategic planning
D) The focus on resources
Answer: B
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
6) When a company wants to expand into new markets with existing products, which growth strategy should they use?
A) Market development
B) Product development
C) Diversification
D) Market penetration
Answer: A
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
7) Companies doing business in global markets must take extra care to protect knockoffs.
Answer: TRUE
Diff: 1
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
8) Four decades ago, the phrase global marketing did not exist.
Answer: TRUE
Diff: 1
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
9) A critical reason why companies need to take global marketing seriously is survival.
Answer: TRUE
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
10) A fundamental difference between regular marketing and global marketing is the scope of activities.
Answer: TRUE
Diff: 1
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
11) Starbucks offers a loyalty card and rewards program in the United States with an app that displays a bar code that can be scanned by the customer. This is an example of market development.
Answer: FALSE
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Analytical thinking
12) If Nestlé decides not to market biscuits (cookies) in the United States due to competitive reasons, it is considered to have a lack of strategic focus and missed opportunity.
Answer: FALSE
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Analytical thinking
13) What is "global marketing" and how does it differ from "regular marketing"? Give examples of at least one major corporation that explains these differences.
Answer: Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers. An organization that engages in global marketing focuses its resources and competencies on global market opportunities and threats. A fundamental difference between "regular marketing" and "global marketing" is the scope of activities. A company that engages in global marketing conducts important business activities outside the home-country market. For example, as Walmart expands into Guatemala and other Central America countries, it is implementing a market development strategy.
Diff: 2
Chapter LO: 1.1: Use the product/market growth matrix to explain the various ways a company can expand globally.
AACSB: Application of knowledge
14) The essence of marketing worldwide is to surpass the competition in creating perceived value, which can be represented by which formula?
A) Value = Price/Benefits
B) Value = Benefits/Price
C) Value = Benefits × Price
D) Value = Benefits - Price
Answer: B
Diff: 3
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Analytical thinking
15) How are the sets of activities and processes, along with product design, manufacturing, and transportation, described?
A) As the firm's competitive advantage
B) As the firm's value chain
C) As the firm's marketing strategy
D) As the firm's value equation
Answer: B
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
16) How do firms create competitive advantage in an industry?
A) By keeping costs low while improving the product itself
B) By targeting people who are willing and able to buy
C) By creating more value for customers than competitors do
D) By transforming national industries into global ones
Answer: C
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
17) Why is the marketing mix integral to the value equation?
A) Benefits include the product, promotion, and distribution.
B) Benefits establish the ability to surpass competition.
C) Benefits have to be significant if the firm is to go global.
D) Benefits determine the marketing strategy for a brand.
Answer: A
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
18) Which of the following would allow a company to use price as a competitive weapon and offer lower prices than competitors?
A) A niche market is rapidly expanding.
B) There are very few competitors in the market.
C) People in the market are willing and able to buy.
D) Economies of scale are achieved.
Answer: D
Diff: 3
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
19) What is required of managers to achieve competitive advantage in a global industry?
A) A well-defined strategic focus
B) Alliances between suppliers and manufacturers
C) Producing the best value at the lowest price possible
D) The establishment of a value chain
Answer: A
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
20) Starbucks entered India via an alliance with the Tata Group. This is an example of "market penetration."
Answer: FALSE
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Analytical thinking
21) An industry is global to the extent that a company's industry position in one country is interdependent with its industry position in other countries.
Answer: TRUE
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Analytical thinking
22) The essence of marketing is to surpass the competition at the task of creating perceived value.
Answer: TRUE
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
23) The value equation is represented as Value = Price/Benefits.
Answer: FALSE Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
24) One way to determine the value of globalization is to calculate the ratio of the annual value of global trade in the sector to the annual value of industry sales.
Answer: FALSE
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Analytical thinking
25) Nonmonetary costs do not factor into the equation of value, which is represented by the equation Value = Benefits/Price.
Answer: FALSE Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
26) Global marketing requires attention to value, competitive advantage, and focus on a worldwide basis and utilization of a business intelligence system capable of monitoring the globe for opportunities and threats.
Answer: TRUE
Diff: 1
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
27) When a company succeeds in creating more value for customers than its competitors do, that company is said to enjoy competitive advantage.
Answer: TRUE
Diff: 3
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
28) The transformation of formerly local or national industries into global ones is part of a broader economic process of globalization.
Answer: TRUE
Diff: 3
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
29) Studies show that the gains ascribed to globalization have been evenly distributed among developing nations.
Answer: FALSE
Diff: 3
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
30) Why do some of the world's biggest, most successful companies stumble while pursuing global opportunities? Give examples in support of your answer.
Answer: Store locations, pricing, customer preferences, convenience, and unfamiliarity can cause successful companies to fail or not perform well in global markets. Walmart's exit from the German market was due to the fact that German shoppers could find lower prices at "hard discounters" such as Aldi's and Lidl. UK-based Tesco's attempts to enter the U.S. market with its Fresh & Easy stores failed, in part, because U.S. consumers were unfamiliar with the privatelabel goods that made up much of the merchandise stock. American "cheap chic" retailer Target terminated in Canada due to missteps in store location and pricing.
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage.
AACSB: Application of knowledge
31) Explain, with examples, the benefits of competitive advantage and show how globalization presents companies with unprecedented opportunities.
Answer: When a company succeeds in creating more value for customers than its competitors, that company is said to enjoy "competitive advantage." It is measured relative to rivals in a given industry. For example, Coca-Cola and Pepsi are trying to maintain a competitive advantage in global markets. Globalization presents companies with unprecedented opportunities as well as challenges. Achieving competitive advantage in a global industry requires executives and managers to maintain a well-defined strategic focus. Globalization provides companies with opportunities to develop new products, get new ideas, develop markets, expand brand recognition, and eventually profits.
Diff: 2
Chapter LO: 1.2: Describe how companies in global industries pursue competitive advantage. AACSB: Application of knowledge
32) Which dimension of global marketing strategy is the extent to which activities related to the marketing mix are performed in one or a few country locations?
A) Concentration of marketing activities
B) Development of cultural activities
C) C of marketing activities
D) Integration of competitive moves
Answer: A
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
33) In a global marketing strategy, what is the extent to which each marketing mix element is executed the same way or differently in various country markets?
A) Concentration or coordination
B) Products versus plan
C) Standardization versus adaptation
D) Price versus promotion
Answer: C
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
34) Which dimension of the global marketing strategy is the extent to which marketing activities related to the marketing mix are planned and executed interdependently around the globe?
A) Standardization of marketing mix elements
B) Integration of competitive moves
C) Coordination of marketing activities
D) Concentration of marketing activities
Answer: C
Diff: 3
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
35) Burberry's global marketing strategy of offering "affordable luxury" to customers in the United States, with a value proposition of being more expensive than Coach and less expensive than Prada, represents a focus on which element of the marketing mix strategy?
A) Product
B) Price
C) Promotion
D) Position
Answer: B
Diff: 3
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
36) Why would a marketing manager use an integration of competitive moves when developing the company's global marketing strategy?
A) To determine the degree of place standardization needed in each country
B) To create interdependence in competitive marketing tactics
C) To ensure marketing mix activities are performed in only a few country locations
D) To properly adapt the product to the target market
Answer: B
Diff: 3
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
37) Before deciding to enter markets outside the home country, what should the organization consider?
A) The nature of threats and opportunities
B) Actions of competitors
C) Potential market share
D) Degree of emerging market opportunities
Answer: A
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
38) Launching Burberry Acoustic to enhance advocacy and sharing via social media and online channels is an example of which marketing mix element?
A) Product
B) Price
C) Promotion
D) Place
Answer: C
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Information technology
39) When companies pursue global localization, how do they structure their marketing strategy?
A) They pursue only the largest local markets in global markets.
B) They think globally while acting locally.
C) They create standardized products with universal appeal for all markets.
D) They determine which global markets to pursue at the local level.
Answer: B
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
40) How can a company improve their chances of success in global marketing?
A) Pursue a "one size fits all" strategy by creating identical products for homogeneous markets.
B) Customize special products for each country or region.
C) Create both standardized and localized elements.
D) Nurture an ethnocentric management orientation.
Answer: C
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
41) An important managerial task in global marketing is learning to recognize the extent to which it is possible to extend marketing plans as well as the extent to which adaptation is desired. The way a company addresses this task is a reflection of which activity by the company?
A) Market penetration
B) Market diversification
C) Global marketing strategy
D) Product development
Answer: C
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
42) How can an organization benefit from a philosophy of thinking locally while acting globally?
A) The actual product has to dictate the distribution process in each country.
B) A combination of standard and nonstandard approaches must be used.
C) Innovations that occur far from headquarters can be leveraged in the home location.
D) More homogeneous, one-size-fits-all products should be developed in the home location.
Answer: C
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
43) Ultimately, what is the central issue in global marketing?
A) Identifying markets that have the most potential for the most growth
B) Deciding whether standardization or localization is the right approach for a specific market
C) Tailoring the concept to fit particular products, businesses, and markets
D) Using the concept to reconfigure each product to capitalize on local market sales
Answer: C
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
44) McDonald's Switzerland operates themed dining cars on the Swiss national rail system. This is globalization of which marketing mix element?
A) Place
B) Promotion
C) Price
D) Process
Answer: A
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
45) Why does a franchise such as McDonald's include standardized marketing mix elements in their global marketing strategy?
A) Their system can be set up anywhere in the world.
B) Each country has a different pricing strategy.
C) Food products are localized in each country.
D) Marketing and advertising are universal.
Answer: A
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Analytical thinking
46) The approach to global marketing that a company adopts will depend on industry conditions, shifting economic realities, and its source or sources of competitive advantage.
Answer: TRUE
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
47) A central issue in global marketing is how to tailor the global marketing concept to fit particular products, businesses, and markets.
Answer: TRUE
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
48) A disproportionate amount of wealth has flowed to the "have nots" and "have yachts," with much going to the "have nots."
Answer: FALSE
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
49) An industry is considered to be global to the extent that its industry position in one country is dependent upon the industry position in other countries.
Answer: FALSE
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
50) Most reverse flows of innovation occur just between high-income regions such as Western Europe and North America.
Answer: FALSE
Diff: 3
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
51) Companies must decide whether they want to think locally and act globally, or act locally and think globally. They cannot do both.
Answer: FALSE
Diff: 3
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
52) A global product may be the same product everywhere and yet different.
Answer: TRUE
Diff: 3
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
53) McDonald's McAloo Tikka potato burger offered in India is an example of standardization.
Answer: FALSE
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
54) What are the dimensions of global marketing strategy (GMS) that pertain to marketing management?
Answer: GMS has three dimensions that pertain to marketing management. First, "concentration of marketing activities" such as promotional campaigns or pricing decisions is performed in one or a few country locations. The second, "coordination of marketing activities," refers to the extent to which marketing activities related to the marketing mix are planned and executed interdependently around the globe. Finally, "integration of competitive moves" is the extent to which a firm's competitive marketing tactics in different parts of the world are interdependent. In essence, GMS should enhance the firm's performance on a worldwide basis.
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
55) Why is it important for a firm to have a global marketing strategy?
Answer: A firm's global marketing strategy (GMS) can enhance its worldwide performance. GMS addresses several issues. First is the nature of the marketing program in terms of the balance between a standardized (extension) approach to the marketing mix elements and a localized (adaptation) approach that is responsive to country or regional differences. Second is the concentration of marketing activities in a few countries or the dispersal of such activities across many countries. Companies that engage in global marketing can also engage in coordination of marketing activities. Finally, a firm's GMS addresses the issue of global market participation.
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
56) The Coca-Cola Company has convincingly demonstrated that the ability to think globally and act locally can be a source of competitive advantage. Justify this statement using examples. Answer: Coke achieved success in Japan by spending a great deal of time and money to become an insider. The company built a complete local infrastructure with its sales force and vending machine operations. Coke's success in Japan is a function of its ability to achieve "global localization," being as much of an insider as a local company but still reaping the benefits of worldwide operations. The company is adept at adapting sales promotion, distribution, and customer service efforts to local needs. Coke has become one of the brands that has spent time and money getting this experience in unknown territories.
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
57) Using McDonald's as an example, show how effective global marketing can be successfully achieved.
Answer: The particular approach to global marketing that a company adopts will depend on industry conditions and its source or sources of competitive advantage. McDonald's standardized product is the Big Mac, which is localized in various countries, such as McAloo Tikka Burger in India. Similar products with local slang names were used, adapting to tastes in different countries. For promotion, the standardized slogan "I'm lovin' it" is used, whereas individual promotion is used in different countries. Freestanding restaurants are a standardized version, which is localized in several countries by having kiosks or home delivery. Similarly, the average price of Big Mac is used as a standard which is localized based on currency fluctuation and affordability.
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
58) When a global company establishes a benchmark in quality, competitors must quickly make their own improvements and come up to par. Justify the statement giving examples.
Answer: Starting in the 1960s, U.S. auto manufacturers saw their market erode as Japanese carmakers built strong reputations based on their products' quality and durability. In turn, the U.S. companies are making great strides in quality. A new threat is being faced due to the introduction of Tesla's all-electric cars, which have frequently been at or near the top of the quality and safety rankings for several years. Thus, the global companies can establish a benchmark when other companies try to compete.
Diff: 2
Chapter LO: 1.3: Compare and contrast single-country marketing strategy with a global marketing strategy (GMS).
AACSB: Application of knowledge
59) Which of the following statements cannot be ascribed to globalization?
A) Hundreds of millions of people have been lifted from poverty.
B) Millions of people have joined the middle class.
C) Wages and living standards of people have improved.
D) Gains from globalization have been evenly distributed.
Answer: D
Diff: 3
Chapter LO: 1.4: Identify the companies at the top of the Global 500 rankings.
AACSB: Application of knowledge
60) In terms of national income, where is the largest single market in the world?
A) Japan
B) The European Union
C) China
D) The United States
Answer: D
Diff: 2
Chapter LO: 1.4: Identify the companies at the top of the Global 500 rankings.
AACSB: Analytical thinking
61) Why must firms that want to achieve their maximum growth potential "go global"?
A) Because standards of living are declining in large, established economies.
B) Because 75 percent of the world market potential is outside their home country.
C) Because trade barriers make it difficult to enter large markets profitably.
D) Because the home market is saturated with highly competitive goods.
Answer: B
Diff: 2
Chapter LO: 1.4: Identify the companies at the top of the Global 500 rankings.
AACSB: Analytical thinking
62) When is a company most likely to be absorbed by more dynamic, visionary enterprises in the global market?
A) When they pursue markets that allow the business to be national in scope
B) When they fail to adequately respond to challenges and opportunities of globalization
C) When their products are difficult to modify for a global consumer
D) When faced with scandal in the global community
Answer: B
Diff: 2
Chapter LO: 1.4: Identify the companies at the top of the Global 500 rankings.
AACSB: Application of knowledge
63) In most industries, the companies that will survive and prosper in the twenty-first century will be global enterprises.
Answer: TRUE
Diff: 2
Chapter LO: 1.4: Identify the companies at the top of the Global 500 rankings.
AACSB: Application of knowledge
64) Currently, the United States represents roughly 25 percent of the total world market for all products and services.
Answer: TRUE
Diff: 2
Chapter LO: 1.4: Identify the companies at the top of the Global 500 rankings.
AACSB: Application of knowledge
65) As much as 94 percent of the world's market potential is in the United States.
Answer: FALSE
Diff: 2
Chapter LO: 1.4: Identify the companies at the top of the Global 500 rankings.
AACSB: Application of knowledge
66) Explain why non-U.S. countries are highly motivated to seek market opportunities beyond their own borders.
Answer: The largest single market in the world in terms of national income is the United States, representing roughly 25 percent of the total world market for all products and services. Non-U.S. companies have an even greater motivation to seek market opportunities beyond their own borders; their opportunities include the 330-plus million people in the United States. For example, even though the dollar value of the home market for Japanese companies is the third largest in the world (after the United States and China), the market outside Japan is 90 percent of the world potential. For European countries, the picture is even more dramatic. Even though Germany is the largest single-country market in Europe, 94 percent of the world market potential for German companies is outside Germany.
Diff: 3
Chapter LO: 1.4: Identify the companies at the top of the Global 500 rankings.
AACSB: Application of knowledge
67) What will the form and substance of a company's response to global market opportunities typically depend on?
A) Management's ability to standardize its global approach
B) Management's assumptions about national superiority
C) Management's assumptions about the nature of the world
D) Management's ability to maintain control over the culture of the workforce
Answer: C
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
68) Which of the following is an ethnocentric orientation associated with?
A) The ability to find unique global niche markets
B) Assumption of national superiority
C) Indifference to marketing opportunities
D) Selecting unique approaches for each environment
Answer: A
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
69) Which type of company will largely ignore opportunities outside the home country?
A) Polycentric
B) Ethnocentric
C) Geocentric
D) Technocentric
Answer: B
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
70) How do company personnel with an ethnocentric orientation view the global market?
A) They assume what is done in their home country will succeed anywhere.
B) They assume each market is unique and requires new approaches to marketing.
C) They assume products will have to be localized before they can be sold in other markets.
D) They assume consumers want products produced in their home country, but with new approaches to marketing them.
Answer: A
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
71) You have found that several of the divisions in your company are not collaborating and, instead, were focusing on independent activities because they felt they were unique in what they do. Which type of orientation will this lead to in your company?
A) Geocentric
B) Regiocentric
C) Polycentric
D) Ethnocentric
Answer: C
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
72) Unilever, the Anglo-Dutch consumer products company, at one time had 30 different package designs and 48 different formulations for its Rexona deodorant brand. This is an example of which type of orientation?
A) Ethnocentric
B) Polycentric
C) Regiocentric
D) Geocentric
Answer: B
Diff: 3
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
73) When a company views the entire world as a potential market and develops integrated global strategies, which type of company do they become?
A) Transnational
B) Multinational
C) Localized
D) Foreign operator
Answer: A
Diff: 3
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
74) A key factor that distinguishes transnational companies from international or multinational counterparts is based on what?
A) Use of localized elements
B) Mindset
C) Needs assessment
D) Domestic research
Answer: B
Diff: 3
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
75) When a country like China is experiencing rapid economic growth, policymakers are likely to ________ outsiders.
A) look more favorably on
B) look less favorably on
C) experience more resistance toward
D) feel threatened by
Answer: A
Diff: 3
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
76) How would a company with a polycentric orientation approach a market they want to sell products in?
A) They would use a globally integrated approach.
B) They would use a product extension approach.
C) They would use a standardized approach.
D) They would use a localized approach.
Answer: D
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
77) How would a firm using a polycentric orientation develop each subsidiary in each country where the company does business?
A) With unique business and marketing strategies
B) With separate strategies based on the larger region of the subsidiary
C) With a strategy of servicing world markets from a single country
D) With a combination of standardized and localized marketing programs
Answer: A
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
78) When a firm uses one strategy in the European Union, and other strategies in Asia and North America, which type of orientation do they use?
A) Ethnocentric
B) Polycentric
C) Regiocentric
D) Geocentric
Answer: C
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
79) How do global and transnational companies make decisions regarding extension and adaptations?
A) Based on long-standing assumptions about each market
B) Based on ongoing research into market needs and wants
C) Based on sales outside the home country office
D) Based on input from employees in subsidiaries
Answer: B
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
80) According to research, how are companies developing their global responses to changes in the competitive environment?
A) They are seeking to strengthen regional competitiveness.
B) They are taking on more ethnocentric views of the market.
C) They are focusing on markets that have the most potential for growth.
D) They consider the world as one large market they can effectively respond to.
Answer: A
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
81) A company with a geocentric orientation views the world as a potential market and strives to develop integrated global strategies.
Answer: TRUE
Diff: 3
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
82) The term "polycentric" describes management's belief or assumption that each country in which a company does business is the same as the home country business.
Answer: FALSE
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Analytical thinking
83) Transnational companies serve global markets and use global supply chains, which often results in a blurring of national identity. A true transnational company would be characterized as "stateless."
Answer: TRUE
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Analytical thinking
84) Toyota and Honda are two examples of companies that exhibit key characteristics of transnationality.
Answer: TRUE
Diff: 2
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Analytical thinking
85) The geocentric orientation represents a synthesis of ethnocentrism and regiocentrism.
Answer: FALSE
Diff: 3
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Analytical thinking
86) Give examples to show the differences between ethnocentric and polycentric orientations. Answer: A manager who assumes that their home country is superior to the rest of the world is said to have an ethnocentric orientation. Polycentric orientation is the opposite of ethnocentric orientation, where a manager assumes that each country in which a company does business is unique. In ethnocentric orientation, foreign operations or markets are typically viewed as being secondary or subordinate to domestic ones. For example, Nissan's ethnocentric orientation caused managers to believe that consumers all over the world should and would behave as do the Japanese. In Northern Japan, people would put blankets over the hoods of their cars during cold winters and managers assumed that people in the United States should be able to do the same. Citicorp's financial company executives have polycentric orientation, where the assumption was that each country is different, and there is a need for a localized or adaptation approach.
Diff: 3
Chapter LO: 1.5: Explain the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric.
AACSB: Application of knowledge
87) In the United States, some people believe that globalization has depressed the wages of American workers, resulting in the loss of both blue-collar and white-collar jobs. This is an example of ________.
A) discrimination
B) domination
C) globophobia
D) management myopia
Answer: C
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
88) A type of advantage that a global company possesses by virtue of the fact that it has experience in more than one country is referred to as ________.
A) leverage
B) transferability
C) flexibility
D) capability
Answer: A
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Application of knowledge
89) Why do some industries, such as the pharmaceutical industry, have little choice but to engage in global marketing?
A) The home country market has become saturated.
B) Their research centers are located overseas.
C) No single market is large enough to recover costs incurred in research.
D) There is more demand overseas for their products.
Answer: C
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Application of knowledge
90) What has led to the steady growth in the importance of global marketing?
A) Increases in national controls and management myopia
B) A reluctance of large firms to become transnational rather than multinational
C) The predominance of driving forces over restraining forces
D) Increased use of technology that reduces cost and time needed for global efforts
Answer: C
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
91) Which of the following is an example of a driving force that impacts global integration and marketing?
A) National controls
B) Organizational culture
C) Innovation and entrepreneurship
D) Management myopia
Answer: C
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
92) To improve the effectiveness of global business, which essential characteristic must be included?
A) Common business languages
B) Face-to-face communication
C) Use of social media
D) Innovation and adaptation
Answer: B
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
93) How do global marketing strategies lead to the support of design and improved manufacturing quality?
A) Global marketing increases revenues used to establish a benchmark.
B) Global marketing is highly impacted by consumers who leave online reviews.
C) Global marketing allows consumers to compare products from around the world.
D) Global marketing encourages different standards of quality in different markets.
Answer: A
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
94) Which of the following has created market opportunities that provide a major incentive for companies to expand globally?
A) Rapid reductions in barriers that prevent companies from operating globally
B) Increased access to technology allows consumers to compare trends globally
C) Rapid reductions in the cost of international transportation
D) Economic growth in key lower- and upper-income countries
Answer: D
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
95) When a company draws on its management practices, strategies, products and other ideas that have been market tested in one country and applied in comparable markets, which type of leverage is the company using?
A) Global leverage
B) Experience transfers
C) Scale economies
D) Resource utilization
Answer: B
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
96) How does a company's global strategy become its greatest single advantage?
A) By eliminating the reliance on a strong "home" currency to determine value
B) By creating scale economies on a global scale
C) By using information systems to identify opportunities, trends, threats, and resources
D) By eliminating the impact of natural downturns in the business cycle
Answer: C
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
97) How do effective leaders of global companies prevent management myopia at the global level?
A) By integrating global vision with local market initiatives and input
B) By providing guidance on when subsidiaries should listen to local team members
C) By assuming most developed markets have the same goals and restrictions
D) By assuming the global market is a level playing field because of governmental restrictions
Answer: A
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
98) Multinational companies pursuing strategies of product adaptation run the risk of failing to be successful against global competitors that have recognized opportunities to serve global customers.
Answer: TRUE
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
99) A global company possesses the unique opportunity to develop leverage.
Answer: TRUE
Diff: 1
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Application of knowledge
100) Leverage from scale economies is limited to manufacturing industries.
Answer: FALSE
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Application of knowledge
101) The European Union prohibits the use of generic terms such as "Parmesan" for dairy imports to protect cheese producers in Italy. This is an example of a nontariff barrier (NTB).
Answer: TRUE
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
102) Globophobia is a term used to describe a hostile attitude toward global brands or company policies that appear to result in hardship for some individuals or countries while benefiting others.
Answer: TRUE
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
103) The pressure for globalization is so intense that even leading pharmaceutical companies such as Eli Lilly, Novo Nordisk, and others have little choice but to engage in global marketing.
Answer: TRUE
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Analytical thinking
104) Global marketing does not necessarily mean operating everywhere since there are forces affecting global integration and global marketing. Justify this statement using examples based on the world economic trends.
Answer: Economic growth in key developing countries creates market opportunities that provide a major incentive for companies to expand globally. Due to the rising per capita incomes in India, China, and elsewhere, the growing ranks of middle-class consumers have more money to spend than in the past. At the same time, slow growth in industrialized countries has compelled management to look ahead for opportunities in nations or regions with high rates of growth. Also, the economic growth has reduced resistance that might otherwise have developed in response to the entry of foreign firms into domestic economies. The worldwide movement toward free markets, deregulation, and privatization is also a driving force. The trend toward privatization is opening up formerly closed markets, creating tremendous opportunities.
Diff: 3
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Application of knowledge
105) Discuss the impact of management myopia and organizational culture on the globalization of a corporation?
Answer: There are several examples where management simply ignores opportunities to pursue global marketing. A company that is "nearsighted" and ethnocentric will not expand geographically. For example, Anheuser-Busch, the brewer of Budweiser beer, lost its independence after years of focusing primarily on the domestic U.S. market. Myopia is also a recipe for market disaster if headquarters attempts to dictate when it should listen. Global marketing does not work without a strong local team that can provide information about local market conditions.
Diff: 2
Chapter LO: 1.6: Discuss the driving and restraining forces affecting global integration today.
AACSB: Application of knowledge