Eastern Michigan University MKT 510A Chapter 19-Managing Marketing in the New World TRUE/FALSE Questions 1)A global firm is one in which the strategic positions of competitors in major geographic or national markets are fundamentally affected by their overall global positions

Eastern Michigan University

MKT 510A

Chapter 19-Managing Marketing in the New World

TRUE/FALSE Questions

1)A global firm is one in which the strategic positions of competitors in major geographic or national markets are fundamentally affected by their overall global positions.  

2. One factor drawing companies into the global arena is that some foreign markets offer more profit opportunities than the domestic market does.  

3. The second major decision in international marketing is deciding which market(s) to enter.  

4. The mode of entry into international markets with the highest level of commitment, risk, control, and profit potential is the joint venture.  

5. Indirect exporting involves working with independent intermediaries that sell the product.  

6. A drawback of joint ventures is that the partners might disagree over marketing policies.  

7. Making no product changes and no communications changes when moving into an international market is termed “dual adaptation.”  

8. A straight extension means introducing the product in the foreign market without any change.  

9. Backward invention is reintroducing later product forms that are well adapted to a foreign country’s needs.  

10. Bill sells Fram-branded auto parts in Guangzhou and Foshan. He sells the exact products the same way, using Cantonese-language radio advertising. This is an example of a straight extension.  

11. Gray markets refer to selling to older consumers in countries with aging populations, such as Japan.  

12. Internal marketing requires that everyone in the organization buy into the concepts and goals of marketing.  

13. The functional form of a marketing organization is the most common form.  

14. A drawback of the product manager organization is that while these managers are

expert in the product, they rarely achieve functional expertise.

15. When customers fall into different user groups with distinct buying preferences and practices, a matrix-management organization is desirable.  

16. Some important benefits of interactive marketing are that it is highly accountable and that its effects can be easily traced.  

17. It has been estimated that over half of all online searches are for products and services.  

18. One important guideline for email marketing is to make it easy for customers and potential customers to “unsubscribe.”  

Multiple Choice Questions

19. A model for international marketing is Avon, who has      representatives (the company’s sales force) in more than                                                                                        countries.

1. 5 million; 120
2. 1 million; 50

c. 500,000; 40

d. 300,000; 30

e. 100,000; 25

20. A(n)             operates in two or more countries and captures advantages (in R&D, production, and other areas) in its costs and reputation that are NOT available to purely domestic competitors.

1. backyard economy
2. global firm
3. NiMBy
4. GPS
5. Ethernet

21. What is NOT a reason a firm might be drawn to international markets?

1. a foreign market may provide higher profits
2. selling more allows for better economies of scale
3. following a large customer abroad
4. reducing dependence on any one market—the portfolio approach
5. all of the above are reasons

22. What is NOT an important risk to consider when making the decision to market abroad?

1. Foreign customer preferences are not easily understood
2. Foreign business culture is challenging

3. The regulations in other countries will likely be confusing and costly to deal with
4. Domestic customers will resist following the company abroad
5. Finding managers with talent could be challenging

23. Ayal and Zif argue that going into fewer countries is advisable when                                      .

1. population, income size, and growth are high in the initial countries chosen
2. population, income size, and growth are low in the initial countries chosen
3. population is low, and income size and growth are high in the initial countries chosen
4. population and income size are high, and population growth is low in the initial countries chosen
5. Ayal and Zif recommend always going into more countries over choosing to go into less countries

24. Which is the last major decision in international marketing?

1. Deciding how to enter the market.
2. Deciding on the marketing organization.
3. Deciding on the marketing program.
4. Deciding which markets to enter.
5. Deciding whether to go abroad.

25. The American owners of StrongBad comics have been approached by a Japanese entrepreneur who wants to sell StrongBad stuffed animals and cell phone ringtones. If the owners agree they are entering into a(n)  agreement with the entrepreneur.

1. indirect exporting
2. direct exporting
3. licensing
4. joint venture
5. direct investment

26. Which of the following entry modes has the most financial risk and profit potential?

1. Indirect exporting.
2. Direct exporting.
3. Licensing.
4. Joint venture.
5. Direct investment.

27. A(n)             is where foreign investors join with local ones to create a company in which they share ownership and control.

1. joint venture
2. lateral arrangement
3. direct investment
4. overseas audit
5. none of the above

28. When a Chinese company buys existing cigarette factories in Southeast Asia, it is an example of why type of international entry mode?

1. Joint venture.
2. Direct investment.
3. Lateral arrangement.
4. Embracing overseas opportunities.
5. Direct export of management practices.

29. Making a direct investment on international soil can lead to cost economies in each of the following ways, EXCEPT:

1. cheaper labor.
2. cheaper raw materials.
3. easier advertising.
4. government incentives.
5. freight savings.

30. When a company does a straight extension into a foreign marketplace, they

                            the communications, and                               the product.

1. adapt; adapt
2. adapt; do not change
3. do not change; adapt
4. do not change; do not change
5. do not change; develop a new version of

31. Which is NOT a way of doing communications adaptation when taking a market

offering abroad?

1. Use the very same message everywhere.
2. Use the same message everywhere, varying language, name or colors.
3. Use the same theme globally, but adapt the copy.
4. Develop a global pool of ads and let local managers pick the most appropriate for their market.
5. Create an entirely country-specific program.

32. Which is NOT a contributor to price escalation?

1. Transportation costs.
2. Retailer give-backs.
3. Importer margin.
4. Currency fluctuation.
5. Tariffs.

33. McDonald’s worldwide Big Mac prices are published annually in the Big Mac Index in the Economist magazine. The sandwiches run from around a $1 to over $5, depending on the country and what other food costs there. This is an example of setting a

                            price in the markets served.

1. uniform
2. within-tolerance
3. variable
4. market-based
5. cost-based

34. Fiat sends the metal-stamping equipment and molds for its Series 2 small car to Yugoslavia. The car is no longer sold in Western markets, but will be made and marketed in this eastern region at a low price compared to other offerings in the market. This is an example of       .

1. product translation
2. straight extension
3. forward invention
4. forward vertical integration
5. backward invention

35. To get soap products to consumers in Japan, Procter & Gamble products must go through                      intermediaries.

1. five-six
2. one-two
3. a big, crazy, inefficient number
4. the same number as in America
5. the same number as in Europe

36. In the         , branded products are diverted from normal or authorized distribution channels in the country of product origin or across international borders.

1. trading docks
2. gray market
3. black market
4. stock market
5. distribution channels

37. Which of the following is NOT a part of developing your distribution channels in a new country?

1. Choosing the right distributors.
2. Contacting potential distributors.
3. Seeking pricing advice from distributors.
4. Investing in your distributors.
5. Setting up performance goals for your distributors.

38. Which is the most common form of marketing organization?

1. Geographic.
2. Product management.
3. Hedonic.
4. Functional.
5. Aesthetic.

39. Which type of organization makes sense if the company’s products are quite different or if there is a huge number of products?

1. Geographic.
2. Functional.
3. Area-market specialists.
4. Utilitarian.
5. Product management.

40. Which is NOT a disadvantage of the functional organization structure?

1. Administrative simplicity.
2. Inadequate planning for specific products.
3. Inadequate planning for specific markets.
4. Functional groups competing for the same budget.
5. Difficult coordination problems.

41. When customers fall into different user groups with distinct buying preferences and practices                 , is the most desirable type of organization.

1. product management
2. brand management
3. market management
4. category management
5. matrix management

42. Which of the following is NOT a disadvantage of using a matrix-management organization?

1. The system is costly.
2. It creates conflict.
3. Questions about authority.
4. Doesn’t work in flat, lean team organizations.
5. Questions about responsibility.

43. Certain activities must occur within the organization in a top-down fashion. According to Weber, the role of marketing at the corporate level includes all of the following, EXCEPT:

1. promoting a culture of customer orientation.
2. assessing market attractiveness in terms of customer needs.
3. promoting a culture of trust in leadership.
4. assessing market attractiveness in terms of competitive offerings.
5. developing the overall value proposition to deliver superior value to customers.

44. With broadband Internet connections becoming more common, marketers can do more communicating online with customers. Which is NOT really associated with this growing ability to market?

1. Better animation possibilities.
2. Direct-to-customer video.
3. Increased sophistication in sound.
4. Stronger strategic thinking.

5. Ability to interact with the customer.

45. Which of the following is NOT an important guideline for those that market using email?

1. Give the customer a reason to respond.
2. Personalize the email content.
3. Only use email with customers who have agreed to receive it.
4. Offer something the customer could not get via direct mail.
5. Make it easy to “unsubscribe.”

46. The Internet is most useful as a channel of distribution, for all of the following

situations EXCEPT:

1. when shoppers seek more ordering convenience.
2. when products must be touched or examined in advance of purchase.
3. when consumers are looking for lower cost.
4. when the customer wants more information about the product’s features.
5. when shoppers seek information about pricing.

Essay Questions

47. Before making a decision to market abroad, what are the risks the company must consider?

48. Explain how the different, major modes of entering into foreign markets carry with them different levels of risk, commitment, control, and reward for the firm.

49. Keegan has suggested five strategies for adapting product and communications to a foreign market. They involve changes, adaptations, or new creations of products and marketing communications. What are the five strategies and what changes, adaptations or newly-created product or communications do each require?