Question 1

Toyota Motor Company recently announced plans to build a new production facility in Mexico and will be able to take advantage of reduced production costs related to wage rates in the local area. Toyota will sell the vehicles in Mexico and will also export the Corolla model the plant produces around the world. The finished products costs will be based on the Mexican peso, which fluctuates but is generally considered to be weaker than the U.S. dollar or euro. This will provide Toyota with a price advantage in the export market. This is an example of the _______ force that affects international marketing activities.

Accepted Answer

The economic force, specifically the difference in wage rates and currency exchange rates, is affecting Toyota's decision to build a production facility in Mexico and export vehicles from there.

Question 2

The trade agreement that links Mexico, Canada, and United States into one economic market is called which one of the following?

Accepted Answer

NAFTA (North American Free Trade Agreement) is the trade agreement that links Mexico, Canada, and the United States into one economic market. The European Union (A) is a political and economic union of 27 member states in Europe. MERCOSUR (B) is a regional trade bloc in South America. The Central American Free Trade Agreement (C) is a trade agreement between the United States and several Central American countries. APEC (D) is the Asia-Pacific Economic Cooperation, a regional economic forum comprising 21 member economies.

Question 3

The ______________ of marketing suggests that firms should adopt marketing strategies as though the entire world was one single marketplace. These firms would then market ___________ products using the same marketing mix everywhere in the world.

Accepted Answer

The concept described in the question is that of globalization, where firms treat the entire world as one single marketplace and use a standardized marketing mix to promote their products everywhere. Option A is incorrect because internationalization suggests that firms should expand to international markets while still customizing their offerings. Option B is partially correct, as it mentions globalization, but it suggests that firms should also adopt customized marketing strategies. option C is wrong because flexibility is not a concept related to the question. Option E is incorrect because while it mentions an international perspective, it doesn't describe the idea of a standardized marketing mix.

Question 4

Tim Baker is an account representative from the United States for an automotive parts supplier and is meeting with a client team in Japan. This is Tim's first trip to Japan, and unfortunately, he wasn't able to review any information about "doing business in Japan" before he left the States. His first meeting with representatives from the prospective client's firm is a dinner, and he is immediately surprised at the formality of the event. All of his counterparts are dressed very formally, and no one is addressing him by his first name but is referring to him as Mr. Baker. In addition, the members of the client team seem to be waiting on their supervisor to make the first move, and Tim is beginning to realize that age and seniority are very important to the team members. Tim is growing a little concerned that he may not be successful in business since he feels like a fish out of water. Which environmental force has the sales representative encountered?

Accepted Answer

The sales representative has encountered a sociocultural environmental force, as he is experiencing cultural differences in business practices such as formality, respect for age and seniority, and addressing individuals by their titles rather than first names.

Question 5

Solar Sports is excited about expanding their export opportunities to Cuba, since the United States has renewed trade relations with Cuba, and plans to utilize a _______, which links buyers and sellers in different countries but is not involved in manufacturing and does not own assets related to manufacturing.

Accepted Answer

A trading company is a company that facilitates trade between buyers and sellers in different countries by acting as an intermediary. This would be an ideal choice for Solar Sports to expand their export opportunities to Cuba since they are not involved in manufacturing and do not own assets related to manufacturing.

Question 6

Media allocation, retail outlets, and price are among the easiest marketing mix variables to standardize.

Accepted Answer

Media allocation, retail outlets, and price are all highly dependent on the local market, competition, and consumer preferences. Therefore, they are difficult to standardize across different regions or countries.

Question 7

Because firms have different resources and core competencies, their international marketing strategies will also be different. Nevertheless, any firm seeking to be successful in international markets must establish the right organizational structure for its core competencies and resources. Which of the following is a valid international organizational structure?

Accepted Answer

A geographic area structure allows a company to divide its global operations based on different regions or countries where it operates. This structure ensures that each region or country receives customized marketing strategies that take into account their unique cultures, laws, and economic conditions. Therefore, it helps a firm to better manage its resources and core competencies in a way that meets the needs of each specific market.

Question 8

Baxter Publishing sought to reduce expenditures related to the printing of books in its trade and educational market and contracted with a printing company in China. However, the publishing company soon realized that China has weak enforcement of intellectual property laws and that gray market books began appearing in the marketplace, which greatly impacted Baxter's profits. The company found that they had little recourse against the contract manufacturer and learned a very difficult lesson in international marketing. This exemplifies the impact of _______ forces on international business.

Accepted Answer

The answer of Baxter Publishing sought to reduce expenditures related...

Question 9

Sebastian Motors is a family-owned car dealership with two locations in central France. The car dealership markets BMWs and Mini Coopers and provides servicing. Recently, Sebastian Motors has been impacted by the economic climate in the ________ ,which has suffered recently due to a weakening of the currency and the poor financial conditions of several member countries including Portugal, Italy, Greece, and Spain-affectionately known as the PIGS of the Common Market.

Accepted Answer

The PIGS countries are all members of the European Union, making it the correct answer. The other options are not relevant to the situation described.

Question 10

_____________ are companies that were started with the knowledge and resources to compete in a global marketplace. They are usually small technology companies that quickly establish themselves in international markets. They reach a point where as much as ________% of their sales come from locations outside the United States.

Accepted Answer

The given description perfectly fits the definition of "Born Globals". They are known for being small technology companies that quickly establish themselves in international markets and earn as much as 70% of their sales from outside the United States.

Question 11

A ______________ links buyers and sellers in different countries, but it has no manufacturing capability. It most important function is ___________ to products and moving them from the domestic country to the foreign country.

Accepted Answer

A trading company is a type of intermediary that connects buyers and sellers in different countries. Unlike a foreign subsidiary, it has no manufacturing capability. The most important function of a trading company is to facilitate the movement of products from the domestic country to the foreign country. This typically involves taking title to the products, which means assuming ownership and responsibility for them during the shipping process. Adding value or customizations may also be part of a trading company's role, but it is not its primary function. Therefore, the best choice is E - trading company; taking title.

Question 12

Brand name, product characteristics, packaging, and media allocation are among the easiest marketing mix variables to standardize around the world.

Accepted Answer

While brand name and product characteristics can sometimes be standardized globally, packaging and media allocation often need to be tailored to local cultural and market preferences.

Question 13

The international marketplace offers a new set of challenges for the marketer to navigate. There are multiple forces that must be overcome if the firm's marketing strategies are to be successful in international markets. For example, some countries have import tariffs and quotas that restrict the flow of foreign products into their domestic markets. This is an example of which of the following environmental forces present in international markets?

Accepted Answer

Import tariffs and quotas are imposed by governments as a means of protecting domestic industries and limiting competition from foreign firms. As such, they fall under the Political, Legal, and Regulatory Forces present in international markets, which also encompass other factors such as trade agreements, intellectual property laws, and taxation policies. Sociocultural Forces, on the other hand, refer to the cultural, social, and demographic characteristics of a given market, while Ethical and Social Responsibility Forces relate to issues such as sustainable business practices, labor standards, and human rights. Competitive Forces refer to the intensity of rivalry between firms operating in the same industry, while Economic Forces encompass factors such as exchange rates, inflation, and economic growth.

Question 14

U.S. businesses are increasingly recognizing that international markets provide enormous opportunities for growth and profit. ___________companies are entering international markets and quickly realizing as much as 70% of their sales outside the domestic market within two years.

Accepted Answer

Born global companies are those that enter international markets early in their life cycle and have a global focus from the beginning. These companies have a high propensity for internationalization and quickly expand into foreign markets. Studies have shown that born global companies can achieve up to 70% of their sales from international markets within two years. Therefore, option B is the best choice.

Question 15

IKEA has opened stores in Beijing and Shanghai and hopes to capitalize on China's growing consumer economy, since the potential of China's consumer market is so vast that it is almost impossible to measure. IKEA and other global retailing giants operating in China are beneficiaries of the _____, which was established in 1989 to promote open trade and economic and technical cooperation among member nations. In addition, they are allowed to participate in a wide range of organizational activities and have become increasingly competitive regarding global business.

Accepted Answer

ASEAN (Association of Southeast Asian Nations) and NAFTA (North American Free Trade Agreement) do not include China, while the EU (European Union) is a regional organization focused on Europe. APEC (Asia-Pacific Economic Cooperation) is the most relevant organization in this context, as it includes China and aims to promote open trade and economic cooperation among member nations in the Asia-Pacific region.

Question 16

Sociocultural forces in international markets keep marketers busy trying to understand local preferences, tastes, customs, and idioms. The marketer's failure to understand these forces almost certainly leads to failures in the marketing strategies used. Which one of the following statements about the sociocultural forces in international markets is true?

Accepted Answer

This statement is true as it highlights the importance of cultural similarities between the buyer and seller cultures for successful product acceptance in international markets. The other options are false and do not reflect the impact of sociocultural forces in international marketing.

Question 17

Signature Cycles creates sleek and modern bicycles for commuters and cycling enthusiasts using the latest materials such as carbon fiber frames. Signature Cycles are relatively expensive, but its urban customers routinely pay $800 to $1,000 for the hand-crafted bicycles. The owners are considering expanding their company's footprint outside the United States and are considering opportunities to export its products to Canada and Mexico. They have learned that _______ eliminated virtually all tariffs on goods produced and traded among Canada, Mexico, and the United States.

Accepted Answer

NAFTA (North American Free Trade Agreement) eliminated virtually all tariffs on goods produced and traded among Canada, Mexico, and the United States. This would make it easier and potentially more profitable for Signature Cycles to export their products to Canada and Mexico.

Question 18

The internationally integrated structure is one type of organizational structure used by U.S. firms for their international operations. Which of the following statements is true about internationally integrated structures?

Accepted Answer

The answer of The internationally integrated structure is one type...

Question 19

The North American Free Trade Agreement (NAFTA) ___________ tariffs on goods produced in and traded between Canada, Mexico, and the United States.

Accepted Answer

NAFTA eliminated tariffs on goods produced in and traded between Canada, Mexico, and the United States.

Question 20

Brand name, product characteristics, packaging, and labeling are some of the ______________ marketing mix variables to standardize for international markets.

Accepted Answer

Standardizing the brand name, product characteristics, packaging, and labeling is generally considered the easiest marketing mix variables to standardize for international markets compared to other variables such as price, promotion, and distribution. This is because these variables are primarily related to the physical aspects of the product and can be adapted relatively easily to suit different markets.

Quiz 9: Reaching Global Markets