Download FREE Sample Here

Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
Global Marketing Management
Chapter 8 Global Entry and Expansion Strategies
1) Before doing any business internationally, a company must look at the conditions in a
potential country to analyze what the advantages, disadvantages, and costs will be and whether it
is worth the risk.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
2) Political risk is directly proportional to a country's stage of economic development.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
3) Labor costs include the cost of workers at every level.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
4) In capital-intensive industries, wage levels are often a large percentage of costs associated
with a product.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
5) Advanced global companies generally pursue cheap labor for manufacturing locations.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
6) The use of computer controls and technology has increased the cost of labor.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
7) The greater the distance between the product source and the target market, the lower the
transportation costs.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
8) Exchange-rate fluctuations have little effect on the attractiveness of a potential target market.
Answer: FALSE
AACSB: Analytical thinking
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
Difficulty:
Easy
9) When a country's currency fluctuates drastically, a company with productive capacity in other
locations can maintain its competitive advantage by shifting production.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
10) If a company's export products are similar to products manufactured inside the target market,
the exported target gains competitive advantage.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
11) Global marketers typically take domestic products as they are and sell it to international
customers.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
12) A domestic company can go global simply by responding to an unsolicited order.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
13) Export selling involves extensive tailoring of various elements of the marketing mix to
global market requirements.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
14) Export marketing involves tailoring various elements of the marketing mix to global
marketing requirements.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
15) A company that engages in export marketing uses an extension approach to pricing, ensuring
that product prices in export markets are the same as prices in the home-country market.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Moderate
16) Most companies handle export operations in-house.
Answer: TRUE
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
AACSB: Analytical thinking
Difficulty: Easy
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
17) The extent of a company's in-country presence in a target market has no impact on perceived
customer value.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
18) The costs of maintaining a global staff in an overseas market is cheaper compared to
domestic sales.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
19) Licensing is a contractual arrangement whereby one company makes an asset available to
another company in exchange for some form of compensation.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
20) Licensees can become direct competitors to licensors.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
21) Franchising is a contractual agreement where one company sells the rights to its brand, logo,
and business model to another company.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
22) Licensing is a more extensive form of participation in foreign markets than joint ventures.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
23) One advantage of a joint venture is that it may be the only way to enter a country if local
laws prohibit foreign ownership.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
24) With foreign direct investment, the owner has a passive role without significant influence or
management control.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
25) The most extensive form of participation in global markets is 100 percent ownership of a
foreign subsidiary.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
26) Companies can expand seeking new country markets for already identified market segments.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
27) The stages of development for a transnational company are: domestic, international,
multinational, global, and transnational.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
28) One of the strengths of the transnational company is that it combines the strengths of each of
the preceding stages in an integrated network which leverages worldwide learning and
experience.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy
29) Research and development becomes centralized when a company becomes transnational.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
30) A multinational company would be self-sufficient, decentralized, and have its key assets
dispersed.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy
31) How do organizations assess the political risks of an international investment?
A) The higher a country's income, the higher the political risks.
B) The more a country is transparent, the more it is risk-free.
C) The lower the income of per capita, the lower the risks.
D) The more a country allows imports, the higher the risks.
Answer: B
AACSB: Analytical thinking
Difficulty: Easy
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
32) How can an organization gain market access in a new country that limits imports?
A) by establishing a production facility within the country
B) by locating a production source outside the market
C) by forming a partnership with a local distribution company
D) by establishing a local supply chain system in the neighboring country
Answer: A
AACSB: Analytical thinking
Difficulty: Moderate
33) While deciding a location for a manufacturing base, which of the following can be directly
determined by organizations based on the foreign exchange rate of a country's currency?
A) potential competition
B) product fit
C) demands for a product
D) costs of production
Answer: D
Difficulty: Moderate
34) Agents differ from distributors in that agents ________.
A) do not assist in invoice collection
B) do not take title to the goods
C) add channel value where thousands of customers are involved
D) pay directly to exporters
Answer: B
AACSB: Analytical thinking
Difficulty: Moderate
35) Which of the following is true of distributors?
A) They take title to the goods.
B) They cannot add their margins to the sales.
C) They cannot resell to the trade.
D) They allow direct representation to the exporter.
Answer: A
Difficulty: Easy
36) Mckelvey Inc., a U.S. - based cosmetics manufacturer, promotes its products using the same
price value, composition, and advertisements irrespective of the target market location. In this
case, the company is utilizing ________.
A) contract manufacturing
B) export marketing
C) intermediary selling
D) export selling
Answer: D
AACSB: Analytical thinking
Difficulty: Hard
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
37) Which of the following is the typical first step for a company that is going global?
A) licensing
B) direct exporting
C) inshoring
D) outsourcing
Answer: B
Difficulty: Easy
38) Which of the following is true of licensing as a form of global market entry?
A) A company can expand its market reach with almost no capital or marketing costs.
B) It allows a licensor to directly involve in the overseas market and user's needs.
C) It can restrict the growth of domestic competitors in an overseas market.
D) A company's resources cannot be exploited by another company.
Answer: A
AACSB: Analytical thinking
Difficulty: Moderate
39) ________ refers to a marketing strategy where companies do not manufacture any of their
product's components.
A) Product sourcing
B) Product differentiation
C) Joint venture
D) Export marketing
Answer: A
AACSB: Analytical thinking
Difficulty: Moderate
40) Escobar, a global enterprise selling athletic shoes, procures its shoes through contract
manufacturing agreements with producers in developing nations. It uses its expertise in
distribution and sales to promote these products. In this case, the marketing strategy used by the
company is referred to as ________.
A) franchising
B) direct investment
C) product sourcing
D) joint venture
Answer: C
AACSB: Analytical thinking
Difficulty: Hard
41) A ________ is referred as the collaboration between two or more firms on a specific project
to serve one or more markets.
A) franchise
B) direct investment
C) portfolio
D) joint venture
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
Answer: D
Difficulty: Easy
42) Which of the following market entry strategies allows an organization 100 percent ownership
of its foreign subsidiaries?
A) franchising
B) direct investment
C) product sourcing
D) joint venture
Answer: B
Difficulty: Easy
43) Which of the following is the first stage of development of a transnational corporation?
A) global
B) international
C) domestic
D) multinational
Answer: C
Difficulty: Easy
44) Which of the following kinds of marketing orientation is a domestic company most likely to
have?
A) polycentric
B) ethnocentric
C) regiocentric
D) geocentric
Answer: B
AACSB: Analytical thinking
Difficulty: Easy
45) How is the location of a manufacturing base dependent on foreign exchange rate of a
country's currency?
Answer: In deciding where to locate a manufacturing base, costs of production will be
determined in part by the prevailing foreign exchange rate for the country's currency. Exchange
rates can be volatile and many companies pursue global sourcing strategies from a "portfolio" of
countries and in a range of currencies as a way of limiting exchange-related risk. At any point in
time, what had been an attractive location for sales or production may become much less
attractive due to exchange-rate fluctuations. The prudent company will incorporate exchange
volatility into its planning assumptions and be prepared to prosper under a variety of
exchange-rate relationships.
Dramatic shifts in price levels of commodities and currencies are a characteristic of the world
economy today. Such volatility argues for a sourcing strategy that provides alternative country
options for supplying markets. With alternative production locations, if any location is in a
country with a seriously overvalued currency, a company with productive capacity in other
locations can maintain its competitive advantage by shifting production to competitively valued
full file at http://testbankeasy.com
Full file at
http://testbankeasy.eu/Test-bank-for-Global-Marketing-Management,-8th-E
dition---Keegan
country locations.
AACSB: Analytical thinking
Difficulty: Moderate
46) Explain the criteria to be assessed when selecting a potential target market for export?
Answer: There are six criteria that should be assessed:
1. Market Potential. What is the basic market potential for the product? To answer this question,
secondary information (that which is already assembled and available) is a good place to start.
2. Market Access. This aspect of market selection concerns the entire set of national controls that
apply to imported merchandise and any restrictions the host-country government might impose.
These can include such items as import/ export licenses, import duties, nontariff barriers, foreign
exchange regulations, and preference arrangements.
3. Shipping Costs and Time. Product modification, export packing, and shipping costs can affect
the market potential for a product. If a company's export product is similar to what is already
being manufactured inside the target market, shipping costs, duties, and "time on the water" may
render the exported product uncompetitive. It is important to investigate alternative modes of
shipping as well as finding ways to further differentiate the product–the exporter may need to
offset a price or delivery disadvantage.
4. Potential Competition. A country's overseas-based commercial attachés or representatives can
be a valuable resource. When contacting a commercial attaché in a prospective country market, it
is important to provide as much specific information as possible. Many home-country
governments offer a broad range of services, including assistance in finding potential local
agents and distributors.
5. Service Requirements. If service, regular technical support, or warranty offerings are required
for a product, it must be delivered at a cost consistent with the size and profitability of the
market. The growing universality of the Internet makes it possible to offer cost-efficient
web-based global service support in addition to or in some cases as an alternative to in-country
support.
6. Product Fit. With information on market potential, cost of access to the market, and local
competition, a final step is to decide how well a company's product fits the market in question. In
general, a product fits a market if it satisfies the criteria discussed previously in the chapter and is
profitable.
AACSB: Analytical thinking
Difficulty: Moderate
full file at http://testbankeasy.com