Download Chapter 1 - Introduction to Global Marketing

Chapter 1 – Introduction to Global Marketing
True/False
1.
Skillfully implemented strategies that are implemented in conjunction with universal
marketing fundamentals increase the likelihood of market success.
2.
As Wal-Mart expands into Central American countries, it is implementing a market
development strategy.
3.
A fundamental difference between “regular” marketing and “global” marketing is the
scope of activities.
4.
The perceived value equation can be represented as Value = Price/Benefits.
5.
If Nestle decides not to market biscuits (cookies) in the United States due to competitive
reasons, it is considered as a lack of strategic focus and missed opportunity.
6.
Value, competitive advantage, and the focus required to achieve them are universal in
their relevance and should guide global marketing efforts in any part of the world.
7.
The discipline of marketing is universal and such marketing practices do not vary from
country to country.
8.
Global market participation is the extent to which a company has operations in major
world markets.
9.
Globalization presents companies with limited opportunities to configure themselves
since it allows producers to find the best partners.
10.
According to Professor Levitt, organizations should develop standardized, highquality world products and market them around the globe by using standardized
advertising.
11.
Global localization means that a successful global marketer must have the ability to think
locally and act globally.
12.
The Coca-Cola Company supports its Coke, Fanta, and PowerAde brands with marketing
mix elements that are both global and local.
13.
In order to be successful, global marketing should not impose a totally standardized
approach.
14.
McDonald’s global marketing strategy is based primarily on local marketing mix
elements.
15.
The Coca-Cola Company has achieved great success in global marketing by pursuing a
policy of strict standardization of all marketing mix elements.
16.
McDonald’s home delivery of burgers in India is an example of unusual standardized
global marketing practice.
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17.
Global marketing that a company adopts will depend on industry conditions and its
source of competitive advantage.
18.
By definition, a company engaging in global marketing must standardize all elements of
the marketing mix everywhere in the world.
19.
A cornerstone of Harley-Davidson's global marketing strategy is manufacturing in
Mexico and other low-wage countries.
20.
According to William Greider, the globalization of industries and markets will have
some unintended, possibly dire, consequences in the coming years.
21.
ExxonMobil and Wal-Mart Stores are world’s largest corporations by revenues
according to “the Fortune Global 500” companies in 2006.
22.
The form and substance of a company’s response to global market opportunities depend
greatly on management’s assumptions or beliefs about the nature of the world.
23.
Bangladesh is a leading country in Textiles and clothing market based on the overall
Market Size.
24.
The highest-ranking American company in the annual Fortune 500 survey of global
companies is General Motors (GM).
25.
When comparing the size of global markets in terms of dollar sales, the market for
cigarettes is bigger than the market for cell phones.
26.
A manager who assumes that his or her home country is superior to the rest of the world
is said to have an ethnocentric orientation.
27.
Ethnocentric companies that do business outside the home country can be described as
domestic companies.
28.
Nissan’s assumption that car owners in the United States will cover their cars with
blanket in winters as they do in Japan is an example of ethnocentric orientation.
29.
In this day and age, ethnocentrism is one of the major internal weaknesses of a business
enterprise that must be overcome to sustain global competition.
30.
A U.S. company that focuses on the countries included in the NAFTA has a regiocentric
orientation.
31.
Geocentric orientation represents true global marketing since it views the entire world as
a potential market and develops global strategy.
32.
An ethnocentric management orientation is preferable to a geocentric orientation.
33.
One strength of a polycentric management orientation is the ability to tailor marketing
strategies to the needs of each local market.
34.
Toyota Company can be described as a transnational company.
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35.
Nestle being with a small home country market is compelled to adopt regiocentric or
geocentric orientations in order to grow profitably.
36.
The ethnocentric company is decentralized in its marketing management whereas the
polycentric company is centralized.
37.
A number of multilateral trade Agreements such as NAFTA has accelerated the pace of
global integration.
38.
When a company establishes a site on the Internet, it automatically becomes global.
39.
Economic growth has reduced resistance that might otherwise have developed in
response to the entry of foreign firms into domestic economies.
40.
Management myopia may become a driving force that may advance a company’s effort
to engage in global marketing.
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Multiple Choice
41.
When you call United Airlines for reservation on a toll free number and get response
from an operator in Mumbai, this is an example of:
a.
b.
c.
d.
e.
42.
Which of the following is not one of the 4 Ps in the marketing mix:
a.
b.
c.
d.
e.
43.
b.
c.
d.
e.
the smaller the denominator in the value equation, the higher the overall value
created
Japanese companies exploited economies of scale to become world-class
competitors
the world is becoming more homogeneous
higher product development costs are a driving force behind globalization
luxury goods are taxed at a higher rate
When a company succeeds in creating more value for customers than its competition,
that company is said to enjoy _____________ in an industry.
a.
b.
c.
d.
e.
46.
Value = Price/Benefits
Value = Benefits/Price
Value = Benefits x Price
Value = Benefits – Price
Value = Benefits + Price
A German-made Montblanc fountain pen retailing for $250 in the U.S. is a luxury good
that represents an exception to which general principle:
a.
45.
Product
Place
Price
Period
Promotion
The essence of marketing worldwide is to surpass the competition in creating perceived
value which can be represented as:
a.
b.
c.
d.
e.
44.
Anti-globalization
Global marketplace
Multilingual expression
Discrimination
E-ticketing
competitive advantage
value
leverage
focus
scale economies
According to Michael Porter, a global industry is one in which _________ can be
achieved by integrating and leveraging operations on a worldwide scale.
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a.
b.
c.
d.
e.
47.
The former chairman of Nestlé recently told an interviewer: “We are food and beverages.
We are not running bicycle shops. Even in food we are not in all fields. There are certain
areas we do not touch. Also, we have no soft drinks because I have said we either buy
Coca-Cola or we leave it alone.” What strategic marketing principle does the chairman’s
comment emphasize most specifically:
a.
b.
c.
d.
e.
48.
standardization versus adaptation of the marketing mix
global market participation
coordination of marketing activities
integration of competitive moves
all of the above
An example of the benefit of globalization is that Apple can market iPod models
worldwide without extensive:
a.
b.
c.
d.
e.
51.
leverage
standardized global marketing
ethnocentric orientation
focus
myopia
A firm’s global marketing strategy addresses which of the following issues:
a.
b.
c.
d.
e.
50.
customer value
competitive advantage
focus on specific food and beverages
myopia
policy of dealing only with Swiss businesses
PepsiCo divested its restaurant divisions. A new company, YUM! Brands, is comprised
of Taco Bell, Pizza Hut, and KFC. By spinning off the restaurants, PepsiCo management
will be able to concentrate its attention on the beverage and snack foods industries.
PepsiCo's actions illustrate the concept of:
a.
b.
c.
d.
e.
49.
marketing mix
competitive advantage
cross border infiltration
ration analysis
production capability
standardization
modification
integration
concentration
market participation
Writing in the Harvard Business Review about "The Globalization of Markets,"
Theodore Levitt observed that:
a.
the world is becoming more heterogeneous
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b.
c.
d.
e.
52.
Two decades ago, professor Ted Levitt wrote a classic Harvard Business Review article
titled “The Globalization of Markets.” Which of the following statements about the
author and the article is accurate:
a.
b.
c.
d.
e.
53.
"Think globally, act globally"
"Think globally, act locally"
"Think locally, act locally"
"Think locally, act globally"
None of the above
A company that engages in global marketing:
a.
b.
c.
d.
e.
56.
standardization
global localization
vending machine operations
selecting market mix options
homogenization
Global localization means that a successful global marketer must have the ability to:
a.
b.
c.
d.
e.
55.
Levitt urged companies to adopt products on a country-by-country basis.
There was universal agreement about his thesis that the world is becoming
homogeneous.
Levitt urged companies to develop standardized products that could be marketed
worldwide with little adaptation.
Levitt warned of the coming backlash against globalization
Levitt did not recommend developing standardized products
Coca-Cola achieved success in Japanese market primarily by:
a.
b.
c.
d.
e.
54.
the world is becoming more homogeneous
the 4Ps do not apply to global marketing
products should be adapted to needs and wants on a market-by-market basis
the world is becoming more political
pursues a "one size fits all" strategy by creating identical products for
homogeneous markets
customizes special products for each world country or region
creates both standardized and localized products
nurtures an ethnocentric management orientation
uses localized products only
Examples of companies that have successfully pursued global marketing by creating
strong global brands include:
a.
b.
c.
d.
e.
Italy’s Benetton using a sophisticated distribution system.
Marlboro identifying the brand name with a cowboy
Gillette using the same packaging for Mach3 razor worldwide
A and C
all of the above
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57.
McDonald’s serves McAloo Tikki Burger in India; McRice Burger in Malaysia; McOZ
Burger in Australia; Kiwi Burger in New Zealand; and McHuevo Burger in Uruguay and
McSamurai Burger in Thailand. These menu variations is an example of:
a.
b.
c.
d.
e.
58.
Which of the following correctly states McDonald’s approach to standardization and
adaptation of the marketing mix:
a.
b.
c.
d.
e.
59.
McDonald’s standardizes some product elements and adapts others
McDonald’s standardizes some place elements and adapts others
McDonald’s standardizes some promotion elements and adapts others
McDonald’s standardizes some price elements and adapts others
all of the above
Gap operated 2,692 stores in the United States and more than 450 stores internationally.
The company sources most of its clothing from apparel factories in Honduras, the
Philippines, India, and other low-wage countries. If Gap would like to open more stores
in Japan, primary consideration should include:
a.
b.
c.
d.
e.
60.
a combination of global and local marketing mix elements
a reflection of failure of US menu items in those countries
a deviation from successful marketing practices
a replacement of standard menu names with fancy names
a selection of menu items that can be sold eventually in US markets
industry conditions
sources of competitive advantage
the condition of apparel market worldwide
demand in Japan for US style garments
all of the above
Measured by national income, the United States represents the world's largest single
market for goods and services. Roughly what percentage of world income is found
outside the U.S.:
a.
b.
c.
d.
e.
25%
50%
75%
95%
35%
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61.
Measured by national income, Japan represents the world's second largest single market
for goods and services. What percentage of world income is found outside Japan:
a.
b.
c.
d.
e.
62.
Based on rankings of Fortune Global 500 companies, the world’s most valuable car
company today is:
a.
b.
c.
d.
e.
63.
GM
Daimler AG
Toyota
Ford
Chrysler
The home country of the largest company in the Fortune Global 500 revenue ranking is:
a.
b.
c.
d.
e.
64.
40%
55%
70%
85%
75%
Germany
Great Britain
United States
Japan
France
The highest-ranked German company in the 2006 Fortune Global 500 survey was:
a.
b.
c.
d.
e.
DaimlerAG
Allianz
Volkswagen
Siemens
None of the above
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65.
Based on the size of the market leading players in the Textiles and clothing market
include:
a.
b.
c.
d.
e.
66.
Based on the size of the market leading players in the bottled water market include:
a.
b.
c.
d.
e.
67.
Pakistan
Switzerland
Bangladesh
Japan
South Korea
As discussed in Chapter 1, what do Nissan, Eli Lilly & Company, and Robert Mondavi
Winery have in common:
a.
b.
c.
d.
e.
68.
USA
Italy
Bangladesh
France
South Korea
at one time, they exhibited characteristics of ethnocentric international
companies
at one time, they exhibited characteristics of polycentric, multinational
companies
at one time, they shifted from a geocentric to an ethnocentric orientation
at one time, they exhibited characteristics of ethnocentric transnational
companies
at one time, they exhibited characteristics of regiocentric orientation
GM executives in Asia-Pacific and Europe were given considerable autonomy when
designing cars to meet the needs of their respective regions. This resulted in a total of
270 different types of radios installed in GM vehicles around the world. This is an
example of:
a.
b.
c.
d.
e.
geocentric Orientation
regiocentric Orientation
polycentric Orientation
ethnocentric Orientation
poor globalization Orientation
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69.
Until the mid-1990s, America Online accepted only English-language messages in many
of its discussion areas. Supervisors deleted messages posted in Spanish and Portuguese.
As described here, what management orientation was in evidence at America Online:
a.
b.
c.
d.
e.
70.
Transnational companies such as Toyota have characteristic features including:
a
b.
c.
d.
e.
71.
being in both global markets and utilizes global supply chains
characterized by a mind-set of being “stateless”
using both localized and standardized elements in marketing program
decisions made on the basis of ongoing research
all of the above
Nestle’, Unilever, GlaxoSmithKline, and Royal Philips Electronics can be considered
transnational companies on the basis of:
a.
b.
c.
d.
e.
72.
ethnocentric
polycentric
regiocentric
geocentric
transnational
sales outside the home country to total sales
assets outside the home country to total assets
employees outside the home country to total employees
a and b
all of the above
There is a considerable and growing overlap of advertising across national boundaries
in Europe and Asia. This can be attributed to:
a.
b.
c.
d.
e.
wide use of Internet
the information revolution
increased use of satellite dishes
popularity of CNN advertising worldwide
all of the above
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73.
In the mid-1990s, Gruner + Juhr, one of Europe's top magazine publishers, acquired
McCall's and several other American titles. After top executives from Gruner + Juhr
pushed American editors for changes such as more European visual and editorial styles
at McCall's, advertising revenues dropped. A former editor said, "I don't know how you
can come to America and do the magazine the German or European way." What
management orientation were executives from Gruner + Juhr exhibiting:
a.
b.
c.
d.
e.
74.
Cap Gemini Sogeti SA is the largest computer-services company in Europe and, along
with IBM and EDS, among the top five worldwide. Until recently, the company's
worldwide structure consisted of autonomous national "fiefdoms": Although its
European offices developed expertise with large-scale, complex projects, that expertise
was not shared with the American unit. What type of management orientation is evident
at Cap Gemini:
a.
b.
c.
d.
e.
75.
ethnocentric
polycentric
myopic
geocentric
regiocentric
ethnocentric
polycentric
regiocentric
geocentric
transnational
When Whirlpool acquired Philips Electronics' appliance unit, managers at the American
company discovered that Philips washing machines manufactured in Germany and Italy
did not have a single component or part in common. This evidence suggests that a(n)
_____________ management orientation prevailed at Philips:
a.
b.
c.
d.
e.
ethnocentric
polycentric
regiocentric
geocentric
transnational
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76.
Renault established a joint venture auto plant in Portugal in the late 1970s. Today,
despite the high quality of the Portuguese-built cars, Renault may move production to a
lower-wage Central European country such as Slovenia. A Renault spokesperson
explains that the company originally invested in the Portuguese plant because Southern
Europe had great strategic importance. “Now,” the spokesperson continues, “Having
consolidated a position in Europe, Renault is starting a new phase, looking at the
world." The spokesperson's comment reflects what change in management orientation
at Renault:
a.
b.
c.
d.
e.
77.
Which of the following is not included in the EPRG framework:
a.
b.
c.
d.
e.
78.
From geocentric to regiocentric
From ethnocentric to polycentric
From polycentric to regiocentric
From regiocentric to geocentric
From regiocentric to polycentric
Eurocentric
Polycentric
Regiocentric
Geocentric
Ethnocentric
DaimlerChrysler’s truck unit has operations throughout world. As of 2000, however,
there was little sharing of parts between brands and regions, little sharing of R&D
teams, and little coordination. Today, the unit is characterized by centralized control
over R&D and a single line of heavy truck engines that can be used in all parts of the
world. A plan on the drawing board calls for sharing significant proportions of chassis
and cab components between operations in Europe, the United States and Asia. As
described here, DaimlerChrysler’s truck unit is making the transition from a(n)
______________ organization to a(n) ______________ organization.
a.
b.
c.
d.
e.
multinational; global
ethnocentric; polycentric
global; transnational
transnational; regiocentric
polycentric to regiocentric
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79.
Comparing and contrasting the worldwide marketing activities of Toyota (Japan) and
Harley-Davidson (USA) using terminology and concepts introduced in Chapter 1, one
can say that:
a.
b.
c.
d.
e.
80.
Harley and Toyota are both global companies
Harley and Toyota are both transnational companies
Harley is a global company, Toyota is a transnational company
Toyota is a global company, Harley is a transnational company
Toyota and Harley both have ethnocentric orientation
McDonald's restaurants are found in more than 118countries. To ensure high levels of
consistency and quality, the company's far-flung restaurant system incorporates many
standardized elements (e.g. restaurant design, burgers/fries/soft drinks as basic menu
offerings). However, McDonald's also prides itself on sourcing many of its food inputs
(e.g. potatoes and dairy products) in individual host countries. McDonald's strives to be
locally responsive—it creates new menu items specifically designed with local eating
customs and preferences in mind. Typically, McDonald's forms joint ventures with
local partners, a tactic that ensures that a local "face" is associated with the company.
Finally, McDonald's has been in many country markets long enough that a new
generation of consumers has grown up with McDonald's and are not aware of the
company's U.S. origins. On the basis of this summary, what is the highest stage of
corporate development that McDonald's arguably has achieved:
a.
b.
c.
d.
e.
international
multinational
global
transnational
myopic
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