Global Marketing
Chapter Exam Questions
Course Introduction
Global Marketing explores the strategies and practices that organizations use to effectively market products and services across international borders. This course examines the complexities of global markets, including cultural, economic, legal, and political factors that influence marketing decisions. Topics include market research, entry strategies, international product adaptation, global branding, pricing, distribution, and promotion. By analyzing real-world case studies and current trends, students gain the skills necessary to develop and implement successful marketing plans in the increasingly interconnected global business environment.
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International Business Environments Operations 14th Edition by John Daniels
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Page 2
Chapter 1: Globalization and International Business
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Q1) The process of shifting production from a domestic to a foreign location is best known as ________.
A) offshoring
B) outsourcing
C) licensing
D) joint venturing
Answer: A
Q2) The same automobile company produces Fiats and Ferraris. The company builds an engine plant in China with low production costs for Fiats but not Ferraris. The probable reason is that ________.
A) Fiat competes mainly on a focus strategy, whereas Ferrari competes mainly on a mass-market strategy
B) Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy
C) Ferrari faces global competitors in China, whereas Fiat competes in China mainly against Chinese competitors
D) although Ferrari did not build an engine plant, it will use the same Fiat engines in its models
Answer: B
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Chapter 2: The Cultural Environments Facing Business
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Q1) What is the difference between a monochronic and polychronic culture? How do such cultural differences affect business practices for international firms?
Answer: Cultures such as those in Northern Europe are called monochronic.People prefer to work sequentially,such as finishing with one customer before dealing with another.Conversely,polychronic Southern Europeans are more comfortable working simultaneously with all the tasks they face.Such cultural differences affect the degree of multitasking with which people are comfortable.International companies and individuals must evaluate their business and personal practices to ensure that their behavior may fit with the culture.
Q2) A firm that concentrates on national cultural differences in terms of averages is more likely to ________.
A) underestimate market demands
B) increase political risks
C) seek cultural collision
D) overlook outliers
Answer: D
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Chapter 3: The Political and Legal Environments Facing Business
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Q1) In a totalitarian political system,________.
A) political power resides with the citizens of the country
B) governments direct most economic activity but few social ones
C) an individualistic outlook shapes political debate and policy formation
D) one agent monopolizes political power
Answer: D
Q2) ________ political risks arise from political actions,such as public corruption or a partisan judicial system,that interfere with transactions between sellers and buyers and that can significantly raise the costs of getting things done.
A) Systemic
B) Procedural
C) Catastrophic
D) Distributive
Answer: B
Q3) As exemplified in China,the government in a collectivist society is highly connected to and interdependent with business.
A)True
B)False
Answer: True
Page 5
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Chapter 4: The Economic Environments Facing Businesses
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Q1) A system in which individuals,rather than the government,make the majority of economic decisions is commonly referred to as a ________.
A) command economy
B) market economy
C) private economy
D) mixed economy
Q2) Managers at Morrison Manufacturing are considering expanding the firm's production overseas and want to ensure that the firm is located in a country with a high degree of economic freedom. Presently,which of the following locations would most likely offer Morrison the highest economic freedom?
A) Mexico
B) Hong Kong
C) Venezuela
D) North Korea
Q3) Economic indicators such as GNI,and its expression in terms of per capita,growth rate,and PPP,are not sufficient to develop a clear picture of the overall quality of life in a country.
A)True
B)False
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Page 6
Chapter 5: Globalization and Society
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Q1) What is extraterritoriality? Why is the concept controversial?
Q2) Which stakeholder group primarily wants additional sales and increased productivity?
A) customers
B) shareholders
C) society at large
D) government
Q3) Which stakeholders must companies satisfy? What role should stakeholders play in a firm's internal code of conduct?
Q4) Which of the following is a primary business objective for pursuing ethical behavior?
A) avoiding industrial sanctions
B) developing competitive advantages
C) developing creative advertisements
D) discouraging false commitments to the firm
Q5) The law is often based on imprecisely defined moral concepts that cannot be separated from legal concepts.
A)True
B)False
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Chapter 6: International Trade and Factor Mobility Theory
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Q1) Country X brings in a large number of unskilled immigrants to meet its labor needs. Which of the following is the LEAST likely to occur in Country X as a result?
A) Country X will develop a long-term class of "have-nots" if the children of immigrants remain unskilled.
B) Country X will need more unskilled people in the future if immigrant children become skilled.
C) The continual supply of unskilled labor will delay the development of labor saving technology in Country X.
D) Country X will experience a significant transfer of knowledge and a resulting rise in start-up businesses.
Q2) In a short essay,discuss the theory of mercantilism,and discuss favorable and unfavorable balances of trade as they apply to international business.
Q3) Trade occurs more between culturally dissimilar countries than between culturally similar countries.
A)True
B)False
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Chapter 7: Governmental Influence on Trade
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Q1) An effective tariff is the sum of the ad valorem tariff plus the specific duty.
A)True
B)False
Q2) Many companies and industries argue that they should have the same access to foreign markets as foreign industries and companies have to their markets. In a short essay,discuss this issue of "comparable access" or "fairness."
Q3) What are common reasons that governments enact export restrictions? What are the possible negative consequences of such restrictions?
Q4) At present there is little reciprocal recognition of professional licensing among countries.
A)True
B)False
Q5) Helping a struggling domestic company through import restrictions frequently causes other countries to retaliate.
A)True
B)False
Q6) What is the difference between import substitution policies and export-led development policies? What are the potential effects of each?
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Chapter 8: Cross-National Cooperation and Agreements
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Q1) Compared to the European Union,the North American Free Trade Agreement
A) has a stronger currency linkage due to the U.S. dollar
B) has more trade problems since it is a customs union
C) is significantly larger in population and total GNI
D) is slightly smaller in population and GDP
Q2) Production location is not an important choice when doing business in the European Union.
A)True
B)False
Q3) Which of the following members of the European Union has NOT adopted the euro?
A) United Kingdom
B) Estonia
C) Germany
D) Greece
Q4) Which of the following is a unique provision of NAFTA?
A) tariff elimination
B) common currency
C) environmental standards
D) immigration oversights and policies
Page 10
Q5) What has been the impact of NAFTA on trade and employment in NAFTA nations?
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Chapter 9: Global Foreign-Exchange Markets
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Q1) An exchange rate is the number of units that buys one unit of another currency.
A)True
B)False
Q2) The Chicago Mercantile Exchange and NASDAQ are part of the OTC market.
A)True
B)False
Q3) The top location for trading foreign exchange is ________.
A) London
B) New York
C) Zurich
D) Tokyo
Q4) As a trading currency,the euro is ________.
A) more widely traded than the U.S. dollar in seven of the top ten currency markets in the world
B) widely traded in London but not in any other major foreign exchange markets in the world
C) becoming more popular than the U.S. dollar because of its global acceptance
D) gaining ground against the U.S. dollar in Eastern European countries
Q5) What is currency speculation? Why is it risky?
Q6) What is a futures contract? What institutions handle futures contracts?
Page 11
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Chapter 10: The Determination of Exchange Rates
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Q1) Ray,a marketer at a global firm,monitors the exchange rate of countries in which the firm sells its products. Ray is most likely concerned about changes in ________.
A) operating expenses
B) exporting policies
C) product demand
D) quality control
Q2) In order to join the IMF,a country must contribute a certain sum of money,called a ________.
A) special drawing right
B) trade balance
C) monetary reserve
D) quota
Q3) None of the new members of the EU has yet been allowed to adopt the euro as its currency.
A)True
B)False
Q4) The IMF's primary role is to identify exchange rate regimes.
A)True
B)False
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Chapter 11: The Strategy of International Business
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Q1) Which force in Toyota's immediate environment would most likely have the greatest impact on its strategy?
A) interest rate trends
B) technology developments
C) shifts in U.S. political attitudes
D) actions taken by Honda and Mercedes Benz
Q2) In the context of value chain analysis,the support activities of a firm include ________.
A) outbound logistics, human resources, and information systems
B) production, marketing, and operations
C) shipping and customer service
D) research and development
Q3) A differentiation strategy is a unique mixture of the multidomestic and global strategies whereby the company attempts to capture the advantages of both.
A)True
B)False
Q4) What is the Industry Organization (IO)paradigm? Discuss the underlying assumptions of this model.
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Chapter 12: Country Evaluation and Selection
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Q1) The concept of liquidity preference in international operations refers to ________.
A) a company's willingness to accept a lower rate of return on investments in countries where it can more easily sell them and convert the proceeds at a favorable rate
B) a company's willingness to accept lower rates of return in poor countries that really need the investments
C) management's need to maintain sufficient funds, preferably in local currency, in each country of operation to ensure meeting daily cash needs
D) investors' preference for foreign stocks over foreign bonds because of the larger market for them
Q2) It is generally agreed that because of technical advancements,managers will not need face-to-face communication in the future.
A)True
B)False
Q3) What problems are common with the published data available about different countries?
Q4) Why do companies engage in international harvesting or divestment?
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Page 14
Chapter 13: Export and Import
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Q1) The probability of a company being an exporter is independent of the size of the company.
A)True
B)False
Q2) Major types of indirect intermediaries include export trading companies,distributors,and freight forwarding companies.
A)True
B)False
Q3) One advantage of importing is that an importer can diversify its operating risks by developing alternative suppliers.
A)True
B)False
Q4) The incremental internationalization view of exporting holds that companies first target countries that are ________ their home market.
A) different from B) similar to C) smaller than D) larger than
Q5) What difficulties of exporting can be minimized by customs brokers?
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Chapter 14: Direct Investment and Collaborative Strategies
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Q1) A licensing agreement is a contract for the granting of rights on tangible property.
A)True
B)False
Q2) Although a company may have a good track record with collaborative arrangements,this is of little help when negotiating new collaborative arrangements with different companies.
A)True
B)False
Q3) A greenfield investment is another name for a company's decision to ________.
A) acquire an interest in an existing foreign operation
B) implement sustainable marketing practices
C) construct a new facility in a foreign market
D) build a facility for a local company
Q4) What is a master franchise?
A) the original agreement between the franchisor and franchisee
B) the franchisee with the highest revenue in a region
C) a franchisee with rights to open outlets on its own or develop subfranchises
D) the set of standard terms regulating the relationship between franchisor and franchisee
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Chapter 15: The Organization of International Business
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Q1) IBM puts investments,people,and work anywhere in the world based on the best mix of costs,skills,and environment and uses sophisticated strategies and technologies to support and coordinate activities. IBM most likely uses a ________ structure.
A) classical
B) product
C) neoclassical
D) locational
Q2) Which of the following is the most likely benefit of a network structure?
A) encouraging competition among members for resources
B) facilitating supplier changes anywhere in the value chain
C) developing core competencies in a broad range of value activities
D) maintaining a strong sense of organization in the face of dynamic partnerships
Q3) Why is it essential for MNEs to consider coordination systems when implementing an organizational structure? Briefly describe each approach to coordination.
Q4) Why do you think corporate universities are becoming more popular among MNEs? How do both MNEs and employees benefit from corporate universities?
Q5) Describe how an MNE might use reports as a control mechanism.
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Page 17
Chapter 16: Marketing Globally
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Q1) In advertisements aimed at different countries,companies sometimes use actors who do not speak,along with a voice and/or print overlay. What is the main reason for doing this?
A) avoiding dubbing that does not correspond to lip movements
B) altering themes and messages among countries
C) meeting legal requirements on morality
D) reaching a hearing-or sight-impaired audience
Q2) Higher disposable income and technological advances help overcome many geographic constraints on product demand and distribution.
A)True
B)False
Q3) Why are MNEs criticized for exporting to developing countries the same products they sell in developed countries?
A) The prices of the products are too low in developing countries.
B) Many of the products are deemed to be unnecessary for low income consumers.
C) The sales enhance local company failures in developing countries.
D) Developing countries need local production rather than imports.
Q4) In a short essay,describe the various reasons for product alteration.
Q5) Define price escalation in exporting and explain why it occurs.
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Chapter 17: Global Manufacturing and Supply Chain Management
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Q1) The manufacturing plants of Orion Computers are located closer to customers rather than in low-wage areas. What is the most likely reason for this strategy?
A) competitor locations in emerging markets
B) overseas producers with innovative designs
C) customer demand for dependability
D) diversification of product lines
Q2) Vertical integration occurs when the company owns the entire supplier network or at least a significant part of it.
A)True
B)False
Q3) Fortis Manufacturing Systems uses a highly focused system of quality control that takes a statistical approach and scrutinizes the firm's entire production system. Fortis most likely uses ________.
A) total quality management
B) acceptable quality levels
C) just-in-time processes
D) Six Sigma processes
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Chapter 18: International Accounting Issues
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Q1) Assume a U.S. company purchases equipment from a German supplier for 37,500 when the exchange rate at the time of the transaction is $1.5 per euro,or 0.667 per dollar. The U.S. company doesn't have to pay the German supplier until the end of the month,at which time the euro is now worth only $1.49 per euro or 0.671 per dollar. According to U.S. GAAP,the equipment would be valued at ________.
A) $25,167
B) $25,000
C) $56,250
D) $55,875
Q2) Translation of foreign currency financial statements is best described as ________.
A) the process of restating foreign currency financial statements from one currency into another
B) the process of combining financial statements of different subsidiaries into one statement
C) the conversion of foreign currencies into the U.S. dollar
D) easier when the foreign currency is the euro
Q3) In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?
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Chapter 19: The Multinational Finance Function
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Q1) The CFO's function in a company focuses on ________.
A) improving distributor relationships
B) acquiring financial resources
C) handling accounting issues
D) creating financial statements
Q2) When Sistema,a Russian company,issued a U.S. dollar stock offering in London,its shares were classified as a(n)________.
A) Global Depositary Receipt
B) American Depositary Receipt
C) European Depositary Receipt
D) International Depositary Receipt
Q3) What is the primary concern about offshore financial centers?
A) engaging in illegal activities
B) enabling firms to avoid taxation
C) allowing the transfer of large funds
D) existing in politically risky environments
Q4) A tax credit is a credit on goods and services paid by one member of a corporate family to another.
A)True
B)False
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Chapter 20: International Human Resources
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Q1) Unlike the geocentric and polycentric mindsets,the ethnocentric mindset is not tied to a particular home or host nation.
A)True
B)False
Q2) Growing demand for expatriates stems from which of the following trends?
A) the emergence of developing countries as high-growth markets
B) the resurgence of developed countries as high-growth markets
C) the reduced need for localized expatriate assignments
D) the longer-term assignments created in response to the global credit crisis
Q3) A(n)________ manager champions the ways of foreign markets as comparable,if not more enlightened,than the practices of his or her parent company and home nation.
A) ethnocentric
B) geocentric
C) monocentric
D) polycentric
Q4) List and compare the three common methods of implementing a balanced compensation plan.
Q5) What are the differences between ethnocentric,polycentric,and geocentric frameworks?
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