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Chapter 01 - The Scope and Challenge of International Marketing

Chapter 01

The Scope and Challenge of International Marketing

True / False Questions

1. For companies today, becoming international is a l!ry only some can afford.Tre False

". Companies from #apan are the leading grop of in$estors in the %nited States.Tre False

&. International marketing is the performance of bsiness acti$ities designed to plan, price,promote, and direct the flo' of a company(s goods and ser$ices to consmers or sers in morethan one nation for a profit.Tre False

). The difference bet'een domestic and international marketing lies in the different conceptsof marketing.Tre False

*. The international marketer mst deal 'ith at least t'o le$els of ncontrollable ncertainty.Tre False

+. good illstration of an ncontrollable $ariable that might impact international bsiness isa marketing decision 'ith respect to research.Tre False

. The foreign ncontrollable en$ironment is the same as the domestic ncontrollableen$ironment.Tre False

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. The le$el of technology is an ncontrollable element for international marketers.Tre False

/. The ncontrollable factors a company has to deal 'ith decreases 'ith the nmber offoreign markets in 'hich a company operates.Tre False

10. The controllable elements can be altered in the long rn and, sally, in the short rn toadst to changing market conditions, consmer tastes, or corporate obecti$es.Tre False

11. olitical and legal forces, economic climate, and competition are some of the domesticen$ironment controllables.Tre False

1". 2omestic foreign policy is an e!ample of an international ncontrollable element affectinga firm(s international marketing sccess.

Tre False

1&. bolition of apartheid in Soth frica is an e!ample of a positi$e ncontrollable elementin an international marketing scenario.Tre False

1). The international marketer is not affected by domestic competition.

Tre False

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1*. The process of e$alating the ncontrollable elements in an international marketingprogram in$ol$es sbstantial doses of cltral, political, and economic shock.Tre False

1+. 3ne ncontrollable element that is generally 'ell nderstood is the le$el of technology.Tre False

1. olitical and legal isses a company may face abroad are mitigated by the 4alien stats4 ofthe company.Tre False

1. In a domestic sitation, political details and the ramifications of political and legal e$entsare often more transparent than they are in some foreign contries.Tre False

1/. The political and legal en$ironment is a controllable element for international marketersbecase of the ability to lobby and inflence legislation.

Tre False

"0. In a broad sense, the ncontrollable elements of the foreign bsiness en$ironmentconstitte the cltre.Tre False

"1. In dealing 'ith nfamiliar markets, marketers mst be a'are of the frames of reference

they are sing in making their decisions.Tre False

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"". #ohn refses to by #apanese prodcts becase he sees this as a 'ay of selling ot to anation kno'n for its aggressi$e beha$ior. #ohn is sing a self-reference criterion to make hisdecision.

Tre False

"&. self-reference criterion is closely related to ethnocentrism.Tre False

"). Sam 5atkins st recently ate and, therefore, feels stified in refsing food from hisMiddle 6astern host. In this instance, Sam(s self-reference criterion has st sa$ed him from

making a cltral blnder.Tre False

"*. To a$oid errors in bsiness decisions, it is necessary to condct a cross-cltral analysisthat emphasi7es the need for ethnocentrism.Tre False

"+. %nderstanding one(s o'n cltre normally re8ires no additional stdy.Tre False

". The most effecti$e approach to bild global a'areness into an organi7ation is to increasethe di$ersity mi! of the employee profile.Tre False

". 9esearch has re$ealed that smaller home markets and larger prodction capacities appearto fa$or internationali7ation.Tre False

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"/. company at the 4no direct foreign marketing4 stage of international marketingin$ol$ement does not acti$ely clti$ate cstomers otside national bondaries.Tre False

&0. The most profond change in the orientation of a company to'ard markets and associatedplanning acti$ities happens at the 4reglar foreign marketing4 stage of the internationalmarketing in$ol$ement.Tre False

&1. The global marketing concept $ie's the marketplace as consisting of one primary

domestic market that is complimented by se$eral smaller regional markets.Tre False

Multiple Choice Questions

&". 3f all the e$ents and trends affecting global bsiness today, for stand ot as the mostdynamic. 5hich of the follo'ing 'old be one of those e$ents:. The trend to'ard bying merican cars in 6rope.

;. The trend to'ard the acceptance of the free market system among de$eloping contries.C. The trend to'ard sing 6nglish as the global langage.2. The trend to'ard establishing a 'orld crrency.6. The trend to'ard 'orld'ide instant commnication.

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&&. ll of the follo'ing e$ents and trends are among the for maor trends described in thechapter as ha$ing a maor impact or effect on global bsiness 6

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&+. 5hich of the follo'ing is the most critical difference bet'een domestic marketing andinternational marketing:. The en$ironment in 'hich marketing plans mst be implemented

;. The different concepts of marketingC. The change in marketing goals2. The difference in technological standards6. The change in corporate obecti$es

&. 5hich of the follo'ing is the reason 'hy the international marketer(s task is morecomplicated than that of the domestic marketer:. ;ecase the international marketer mst change his marketing goals in the $arioscontries of operation.

;. ;ecase the international marketer mst deal 'ith at least t'o le$els of ncontrollablencertainty instead of one.C. ;ecase technological standardi7ation cold challenge effecti$e cstomi7ation in differentmarkets.2. ;ecase international trade reglations still do not allo' free trade in most markets acrossthe globe.6. ;ecase lack of competent skills makes effecti$e ser$ice a maor challenge.

&. 5hich of the follo'ing is a controllableelement for an international marketer:

. >e$el of technology;. Aeography and infrastrctreC. Channels of distribtion2. Cltral forces6. Strctre of distribtion

&/. 5hich of the follo'ing is an ncontrollableelement for an international marketer:. Strctre of distribtion;. romotion

C. rice2. 9esearch6. Firm characteristics

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)0. For an international marketer, the @@@@@ can be altered in the long rn and, sally, in theshort rn to adst to changing market conditions, consmer tastes, or corporate obecti$es.. competiti$e strctre

;. economic climateC. strctre of distribtion2. en$ironmental factors6. controllableelements

)1. 5hich of the follo'ing is an ncontrollablefactor in a domestic en$ironment:. Firm characteristics;. Competiti$e strctreC. Channels of distribtion

2. rice6. romotion

)". 5hich of the follo'ing is an e!ample of a positi$e political action that fa$oredinternational marketing:. bolition of apartheid in Soth frica;. Trade ban on >ibyaC. Trade embargo on Cba2. Tariff hike for imports established by China

6. Copling hman rights isses 'ith foreign trade policy

)&. 5hich of the follo'ing reflects the relation bet'een international bsiness and domesticbsiness:. 2omestic economic climate does not normally impact international bsinesses.;. 2omestic bsinesses find it relati$ely easy to manage profits in the crrent scenario.C. Most domestic bsinesses are the reslt of cstomi7ation efforts of internationalbsinesses.2. The ability to in$est abroad is to a large e!tent a fnction of domestic economic $itality.

6. 2omestic bsinesses are more $iable as capital tends to mo$e to'ard minimm se.

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)). 5hich of the follo'ing is a possible otcome of the alien stats of a company:. The company can be seen as an e!ploiter.;. The company recei$es preferred treatment at the hands of politicians.

C. olitical acti$ists can rally spport for the company.2. >ocal indi$idals are gi$en control of management.6. The company is $ie'ed as a platform for cltral integration.

)*. 5hich of the follo'ing is ?3T tre of the impact of cltre:. The reaction to mch of the en$ironment(s Bcltral impact on the marketer(s acti$ities isatomatic.;. In dealing 'ith nfamiliar markets, frames of reference are nimportant in e$alating thepotential of a market.

C. #dgments are deri$ed from e!perience that is the reslt of accltration in the homecontry.2. n established frame of reference is an important factor in determining a marketer(sreaction to sitationsDsocial and e$en nonsocial.6. s a reslt of accltration, 'e react in a manner acceptable to or society 'ithotconsciosly thinking abot it.

)+. Crrent data says that foreign in$estments in the %.S. amont to @@@.. "&.) trillion

;. 00 millionC. &0 billion2. &*0 billion6. +0 billion

). Companies from @@@@@ lead in foreign in$estment in the %nited States.. Eingdom of Sadi rabia;. 9ssiaC. China

2. %nited Eingdom6. Canada

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). @@@@@ is the performance of bsiness acti$ities designed to plan, price, promote, anddirect the flo' of a company(s goods and ser$ices to consmers or sers in more than onenation for a profit.

. Alobal management;. Alobal bsinessC. Marketing2. International marketing6. Alobal marketing concept

)/. ccording to the te!t, the primary difference in the practice of marketingat the domestic$erss the international le$el is=. the en$ironment 'ithin 'hich the marketing plans mst be implemented.

;. the cltral mi! of the people 'orking in the organi7ation.C. the le$el of in$estment re8ired.2. the le$el of management control.6. the difference in the concepts of marketing.

*0. 5ith respect to the en$ironment in 'hich a bsiness operates, sch factors as competition,legal restraints, go$ernment controls, and the 'eather 'old all be e!amples of 'hat arecalled=. controllableelements.

;. ncontrollable elements.C. predictable elements.2. demographic elements.6. cltral elements.

*1. ll of the follo'ing 'old be considered to be controllableelements of marketingdecisions 6

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*". Considering the model of the international marketingtask displayed in the te!t, 'hich ofthe follo'ing reasons demonstrates the most important difference bet'een the internationalmarketer(s task and that of the domestic marketer:

. The international marketer mst deal 'ith at least t'o le$els of ncontrollablencertaintyinstead of one.;. The le$el of technology and cltral forces are controllable elements for the domesticmarketer.C. The spply and distribtion channels are ncontrollable elements for the internationalmarketer.2. The competiti$e strctre is one of the controllable factors for an international marketer.6. The international marketer is less concerned abot geography and infrastrctre than thedomestic marketer.

*&. 9obert #onas is in charge of a ne' marketing effort directed to'ard er. In order for hiscompany to effecti$ely market and distribte to all of er(s maor cities, Mr. #onas mstde$ise a logistics plan for crossing the ndes Montains on a daily basis. 5hich of thefollo'ing foreign en$ironment ncontrollable$ariables 'old be a chief concern as Mr. #onasde$ises his plan:. Competiti$e forces;. Cltral forcesC. Aeography and infrastrctre2. 6conomic forces6. oliticallegal forces

*). Compared to the foreign en$ironment ncontrollable$ariables, 'hich of the follo'ingelements is e!clded from the domestic marketer(s list of ncontrollable $ariables:. olitical forces.;. Competiti$e strctre.C. 6conomic climate.2. Cltral forces.6. >egal forces.

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**. ll of the follo'ing 'old be among the domestic marketer(s controllableen$ironmental$ariables 6

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*/. Competition 'ithin the home contry can ha$e a profond effect on the internationalmarketer(s task. 5hich of the follo'ing ;6ST illstrates this statement:. ;oeing recently opened talks 'ith its primary trade nion to a$oid a forecasted strike.

;. Microsoft and 2ell ha$e ointly in$ested G00 million in a ne' $entre to in$estigate hightechnology of the ftre.C. Fi opened a G&00 million plant in the %.S. and no' commands a 1" percent share of thelcrati$e %.S. film market.2. Se$eral companies are still nder in$estigation becase of the 6nron scandal.6. 2eclaration of independence by ;altic States after the collapse of the So$iet %nion.

+0. 9alph 5aite has st been assigned the task of re$ie'ing his company(s internationalin$estment opportnities. He kno's that his $ie' of the list of opportnities shold be

tempered by foreign en$ironment ncontrollables that might be encontered. 5hich of thefollo'ing 'old be the ;6ST illstration of a foreign en$ironmental ncontrollable that Mr.5aite shold in$estigate:. contry(s le$el of technology.;. ricing policies in the foreign contry.C. The ability to do research in the foreign contry.2. Manfactring capabilities in the foreign contry.6. The ability to do ad$ertising in the foreign contry.

+1. The @@@@@ is an ncontrollableelement that can often be misread becase of the $astdifferences that may e!ist bet'een de$eloped and nde$eloped contries.. strctre of distribtion;. competiti$e forcesC. economic forces2. politicallegal forces6. le$el of technology

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+". The @@@@@ and isses abroad are often amplified by the 4alien stats4 of the company,'hich increases the difficlty of properly assessing and forecasting the dynamic internationalbsiness climate.

. strctre of distribtion;. competiti$e forcesC. economic forces2. politicallegal forces6. le$el of technology

+&. 5hich of the follo'ing 'old be the ;6ST illstration of the 4alien stats4 fond in thepolitical and legal arena that sometimes case problems for international marketers as theyattempt to doing bsiness in foreign contries:

. company in the %.E. recently prchased ;en #erry(s ice cream operations.;. The Indian go$ernment told Coca-Cola that it mst re$eal its 4secret formla4 if it 'ishedto contine doing bsiness in India.C. 9ichard ;ranson(s Jirgin Cola 'as not 'idely accepted in the %nited States.2. French Canadians prefer French to 6nglish 'hen condcting bsiness in Canada.6. ;ritish irlines and #apan irlines oin merican irlines to form 3ne5orld lliance.

+). The task of @@@@@ is the most challenging and important one confronting internationalmarketers.

. caring for the en$ironment;. dealing 'ith politicsC. international standardi7ation2. cltral adstment6. international branding

+*. @@@@@ is the conscios effort on the part of the international marketer to anticipate theinflences of both the foreign and domestic ncontrollablefactors on a marketing mi! andthen adst the marketing mi! to minimi7e the effects.

. Standardi7ation;. daptationC. Segregation2. Segmentation6. roection

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++. The primary obstacles to sccess in international marketingare a person(s @@@@@ and anassociated ethnocentrism.. regionalism

;. holismC. self-reference criterion2. segregation6. integration

+. @@@@@ is an nconscios reference to one(s o'n cltral $ales, e!periences, andkno'ledge as a basis for decisions.. 9egionalism;. Holism

C. Self-reference criterion2. Segregation6.

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0. Lor @@@@@ can pre$ent yo from being a'are that there are cltral differences or fromrecogni7ing the importance of those differences.. self-space

;. personalityC. demographic character2. self-reference criterion BS9C6. concept of integration

1. 5hich of the follo'ing is tre of ethnocentrism:. It is the cltral binding force among a di$erse employee poplation in an organi7ation.;. It is generally a problem 'hen managers from afflent contries 'ork 'ith managers andmarkets in less afflent contries.

C. merican managers ha$e generally been ninflenced by it, especially in the beginning ofthe "1st centry.2. 6thnocentrism is the casati$e factor behind the phenomenon of self-reference criterion.6. Self-reference criterion is ni$ersally considered the techni8e to redce or eliminateethnocentrism.

". The most effecti$e 'ay to control the inflence of ethnocentrismand the S9Cis to=. redce interaction 'ith cltrally di$erse adience.;. ask for feedback on e$ery possible occasion.

C. recogni7e their effects on or beha$ior.2. learn at least t'o foreign langages to nderstand the cltral differences.6. ask for second opinion in a decision-making scenario.

&. To a$oid errors in bsiness decisions, it is necessary to condct a cross-cltral analysisthat isolates the self-reference criterion inflences. 5hich of the follo'ing 'old be the first-step to take to a$oid the aforementioned errors:. 9edefine the problem 'ithot the S9Cinflence.;. Sol$e the problem for the optimm bsiness goal sitation.

C. Isolate the S9C inflence in the problem and e!amine it careflly to see ho' it complicatesthe problem.2. 2efine the bsiness problem or goal in home-contry cltral traits, habits, or norms.6. 2efine the bsiness problem or goal in foreign-contry cltral traits, habits, or normsthrogh consltation 'ith nati$es of the target contry.

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). part of cross-cltral analysis re8ires nderstanding of one(s o'n cltre. 5hy is itsrprising that nderstanding one(s o'n cltre re8ires additional stdy:. ;ecase self-criticism is not easy to bild 'hen stdying one(s o'n cltre.

;. ;ecase mch of cltral inflence on market beha$ior is at the sbconscios le$el.C. ;ecase of the comple!ity of the cltral traits in one(s o'n contry.2. ;ecase international trade treaties mandate that managers ha$e e!tensi$e cltralkno'ledge of their o'n contry.6. ;ecase cltral inflence on one(s o'n market beha$ior is generally ndocmented.

*. To be globally a'are, an international marketer mst ha$e all the follo'ing 6

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. 5hich of the follo'ing is an ob$ios strategy organi7ations shold se to bild globala'areness into organi7ations:. 6stablish sbsidiaries in cltrally di$erse contries, ths leading to inter-cltral

commnication.;. Select indi$idal managers specifically for their demonstrated global a'areness.C. 9ecrit managers from other nations to increase di$ersity.2. 3rgani7e foreign trips for managers to impro$e their nderstanding.6. Increase mi! of di$ersity in the employee profile of the organi7ation.

/. 5hich of the follo'ing is the most effecti$e 'ay to achie$e organi7ational globala'areness:. 6stablish reglar a'areness campaigns across the organi7ation.

;. 3rgani7e employee trips to foreign cltres to increase their sensiti$ity.C. Increase the di$ersity mi! of the employee profile.2. Ha$e a cltrally di$erse senior e!ecti$e staff or board of directors.6. romote social net'orking as a means to impro$e inter-cltral commnication.

0. 5hich of the follo'ing organi7ations seem better e8ipped for internationali7ation:. firm that has more than t'o liaison offices in foreign contries;. firm that has a prodction capacity that is mch greater than home market demandC. firm that has more than three prodction facilities in the home market

2. firm that has a cltrally di$erse employee profile6. firm that has e!perienced increased profits in home market for three consecti$e years

1. 5hich of the follo'ing organi7ations has a better chance of accelerating theirinternationali7ationprocess:. Firms 'ith key managers 'ell net'orked internationally;. Firms re8iring global standards for employee skillsC. Firms 'ith e!cess prodction capacity than their domestic demand2. Firms sing the Internet as their maor commnication platform

6. Firms that aim at otsorcing non-core bsiness fnctions

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". 5hich of the follo'ing is ?3T one of the stages of international marketingin$ol$ement:. Indirect Foreign Marketing;. Infre8ent Foreign Marketing

C. 9eglar Foreign Marketing2. International Marketing6. Alobal Marketing

&. 5hich of the follo'ing is T9%6 regarding the stages of international marketingin$ol$ement:. firm progresses throgh the stages in a linear order;. The stages do not o$erlapC. firm begins its international in$ol$ement at the second stage

2. firm may be in more than one stage simltaneosly6. The first stage of the process is ?o Foreign Marketing(

). There are a $ariety of stages in the process of becoming in$ol$ed in internationalmarketing. 5hich of the follo'ing best describes the stage of de$elopment 'here thecompany(s prodcts reach a foreign market throgh no conscios effort on the part of themarketer:. Infre8ent foreign marketing;. 9eglar foreign marketing

C. ?o direct foreign marketing2. International marketing6. Alobal marketing

*. If a marketer is moti$ated to enter into an international marketingeffort becase oftemporary srplses in the domestic market, 'hich of the follo'ing stages ;6STcharacteri7es the stage of international marketing in$ol$ement for this marketer:. Infre8ent foreign marketing;. 9eglar foreign marketing

C. ?o direct foreign marketing2. International marketing6. Alobal marketing

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+. #ames ;right(s company seeks markets all o$er the 'orld and attempts to sell prodctsthat are a reslt of planned prodction for markets in $arios contries. 5hich of thefollo'ing stages ;6ST characteri7es the stage of international marketingin$ol$ement for Mr.

;right(s company:. Infre8ent foreign marketing;. 9eglar foreign marketingC. ?o direct foreign marketing2. International marketing6. Alobal marketing

. Maria eron(s company treats the 'orld, inclding the home market in Spain, as onemarket. Market segmentation decisions no longer focs on national borders. Instead, market

segments are defined by income le$els, sage patterns, and other factors that span contriesand regions. 5hich of the follo'ing stages ;6ST characteri7es the stage of internationalmarketingin$ol$ement for Ms. eron(s company:. Infre8ent foreign marketing;. 9eglar foreign marketingC. ?o direct foreign marketing2. International marketing6. Alobal marketing

. The a! Corporation has decided to enter the international marketingarena by marketingits prodcts on a contry-by-contry basis, 'ith separate marketing strategies for eachcontry. The company is sing 'hich of the follo'ing concepts to formlate its internationalpolicies and strategies:. 2omestic market e!tension concept;. Mltidomestic market conceptC. Alobal marketing concept2. %ni$ersal marketing concept6. Standardi7ed marketing concept

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/. 5hich of the follo'ing is tre of the first t'o stages of international marketingin$ol$ementDno direct foreign marketing and infre8ent foreign marketing:. Firms may not begin internationali7ationat these stages

;. They represent carefl strategic thinking abot international e!pansionC. They are more reacti$e in natre2. Firms cannot be at both the stages simltaneosly6. They are se8ential in the process of internationali7ation

/0. t 'hich stage is the primary focs of operations and prodction to ser$ice domesticmarket needs 'hile the firm has permanent prodcti$e capacity de$oted to the prodction ofgoods and ser$ices to be marketed in foreign markets:. ?o direct foreign marketing

;. Infre8ent foreign marketingC. 9eglar foreign marketing2. International marketing6. Alobal marketing

/1. 5hich of the follo'ing is ?3T a featre of firms at the internationali7ationstage ofreglar foreign marketing:. ermanent prodcti$e capacity de$oted to the prodction of goods to be marketed inforeign markets.

;. The primary focs of operations and prodction is to ser$ice foreign market needs.C. The firm may employ foreign or domestic o$erseas intermediaries.2. The firm may ha$e its o'n sales force or sales sbsidiaries in important foreign markets.6. rofit e!pectations from foreign markets are initially seen as a bons in addition to reglardomestic profits.

/". 5hich of the follo'ing is tre of firms at the internationali7ationstage of internationalmarketing:. The primary focs of operations and prodction is to ser$ice domestic market needs.

;. s domestic demand increases and absorbs srplses, foreign sales acti$ity is redced ore$en 'ithdra'n.C. rofit e!pectations from foreign markets are seen primarily as a bons in addition toreglar domestic profits.2. lanning generally entails prodction of goods otside the home market.6. The firm treats the 'orld, inclding the home market, as one market.

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/&. 5hat is the most profond change for firms at the global marketing stage ofinternationali7ation:. Companies treat the 'orld, along 'ith home market, as one market

;. Sales to foreign markets are made as and 'hen goods become a$ailableC. Temporary srplses are marketed in foreign markets2. lanning in$ol$es prodction of goods otside the home market6. rodction capacity e!ceeds domestic demand

/). 5hich of the follo'ing firmsprodcts reflects a global marketing orientation:. skin-lightening cream aimed at frican merican 'omen;. company promoting >atino a77 msicalsC. firm prodcing high-end sailing yachts

2. fast-food company selling beef brgers6. #apanese to 6nglish translating soft'are

/*. For a company at the @@@@@ stage of internationali7ation, market segments are defined byincome le$els, sage patterns, or other factors that fre8ently span contries and regions.. domestic market e!tension;. mltidomestic marketC. global marketing2. ni$ersal marketing

6. standardi7ed marketing

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Essay Questions

/+. >ist and briefly describe the for e$ents or trends described in the te!t that ha$e shaped

international bsiness beyond today(s bmpy roads and into the ftre.

/. 2escribe the internationali7ationthat has occrred in %.S. bsinesses.

/. 2efine international marketing. Ho' is it different from domestic marketing:

//. 5hy is the international marketer(s task more difficlt than that of the domestic marketer:

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100. Ho' can a manager constrct a marketing program designed for optimal adstment tothe ncertainty of the bsiness climate:

101. >ist the domestic en$ironment ncontrollables that inflence an international marketer.

10". 6!plain 'ith an e!ample ho' domestic competition affects prospects of an internationalmarketer.

10&. 5hat is the impact of the 4alien stats4 of a company:

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10). To be an effecti$e international marketer, 'hy is it necessary to master cltraladstment: 6!plain.

10*. 6!plain the concept of the self-reference criterion BS9C.

10+. To a$oid errors in bsiness decisions, it is necessary to condct a cross-cltral analysisthat isolates the self-reference criterion inflences. >ist the for steps that make p theframe'ork for sch an analysis.

10. In order for a company to be globally a'are, 'hat are the t'o things a company mstdo:

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10. 5hat are the stages of international marketingin$ol$ement:

10/. 2escribe the 4reglar foreign marketing4 stage of international marketingin$ol$ement.

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Chapter 01 The Scope and Challenge of International Marketing ns'er Eey

True / False Questions

1.(p. 6)For companies today, becoming international is a l!ry only some can afford.FASE

For a gro'ing nmber of companies, being international is no longer a l!ry bt a necessityfor economic sr$i$al.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: !edium

Lea"ning #$%ectie: && *+e c+anging face of ,.S. $usiness*opic: *+e C+anging -ace of ,.S. Business

".(p. )Companies from #apan are the leading grop of in$estors in the %nited States.FASE

Foreign in$estment in the %nited States is more than G"&.) trillion. Companies from the

%nited Eingdom lead the grop of in$estors, 'ith companies from the ?etherlands, #apan,Aermany, and S'it7erland, in that order.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: /asyLea"ning #$%ectie: && *+e c+anging face of ,.S. $usiness

*opic: *+e 0nte"nationali1ation of ,.S. Business

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&.(p. &)International marketing is the performance of bsiness acti$ities designed to plan,price, promote, and direct the flo' of a company(s goods and ser$ices to consmers or sersin more than one nation for a profit.T!"E

International marketing is the performance of bsiness acti$ities designed to plan, price,promote, and direct the flo' of a company(s goods and ser$ices to consmers or sers in morethan one nation for a profit.

AACSB: Analytic

Bloom's: KnowledgeDifficulty Leel: /asy

Lea"ning #$%ectie: && *+e c+anging face of ,.S. $usiness

*opic: 0nte"national !a"2eting Defined

).(p. )The difference bet'een domestic and international marketing lies in the differentconcepts of marketing.FASE

The difference bet'een domestic and international marketing lies not 'ith different conceptsof marketing bt 'ith the en$ironment 'ithin 'hich marketing plans mst be implemented.

AACSB: Analytic

Bloom's: KnowledgeDifficulty Leel: !edium



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*.(p. )The international marketer mst deal 'ith at least t'o le$els of ncontrollablencertainty.T!"E

The international marketer(s task is more complicated than that of the domestic marketerbecase the international marketer mst deal 'ith at least t'o le$els of ncontrollablencertainty instead of one.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: !ediumLea"ning #$%ectie: && *+e c+anging face of ,.S. $usiness

*opic: *+e 0nte"national !a"2eting *as2

+.(p. ) good illstration of an ncontrollable $ariable that might impact internationalbsiness is a marketing decision 'ith respect to research.FASE

9efer 6!hibit 1.&DThe International Marketing Task

AACSB: 3eflectie *+in2ing

Bloom's: Comp"e+ension




.(p. )The foreign ncontrollable en$ironment is the same as the domestic ncontrollableen$ironment.FASE


AACSB: 3eflectie *+in2ingBloom's: Comp"e+ension




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.(p. )The le$el of technology is an ncontrollable element for international marketers.T!"E






/.(p. )The ncontrollable factors a company has to deal 'ith decreases 'ith the nmber offoreign markets in 'hich a company operates.FASE

The more foreign markets in 'hich a company operates, the greater is the possible $ariety offoreign en$ironmental factors 'ith 'hich to contend.


Bloom's: Comp"e+ensionDifficulty Leel: 4a"d

Lea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2


10.(p. )The controllable elements can be altered in the long rn and, sally, in the short rnto adst to changing market conditions, consmer tastes, or corporate obecti$es.T!"E

The sccessfl manager constrcts a marketing program designed for optimal adstment tothe ncertainty of the bsiness climate. The controllable elements can be altered in the longrn and, sally, in the short rn to adst to changing market conditions, consmer tastes, orcorporate obecti$es.

AACSB: AnalyticBloom's: Knowledge

Difficulty Leel: 4a"d

Lea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2*opic: !a"2eting Decision -acto"s

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11.(p. )olitical and legal forces, economic climate, and competition are some of thedomestic en$ironment controllables.FASE

2omestic en$ironment ncontrollables inclde home-contry elements that can ha$e a directeffect on the sccess of a foreign $entre= political and legal forces, economic climate, andcompetition.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: !ediumLea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2

*opic: Aspects of t+e Domestic /ni"onment

1".(p. )2omestic foreign policy is an e!ample of an international ncontrollable elementaffecting a firm(s international marketing sccess.FASE

2omestic en$ironment ncontrollables inclde home-contry elements that can ha$e a directeffect on the sccess of a foreign $entre= political and legal forces, economic climate, andcompetition. political decision in$ol$ing domestic foreign policy can ha$e a direct effect ona firm(s international marketing sccess.



Lea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2*opic: Aspects of t+e Domestic /ni"onment

1&.(p. )bolition of apartheid in Soth frica is an e!ample of a positi$e ncontrollableelement in an international marketing scenario.T!"E

ositi$e effects occr 'hen changes in foreign policy offer contries fa$ored treatment. Sch'as the case 'hen Soth frica abolished apartheid.





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1).(p. )The international marketer is not affected by domestic competition.FASE

Competition 'ithin the home contry can also ha$e a profond effect on the internationalmarketer(s task.


Difficulty Leel: /asy



1*.(p. 5)The process of e$alating the ncontrollable elements in an international marketingprogram in$ol$es sbstantial doses of cltral, political, and economic shock.T!"E

The process of e$alating the ncontrollable elements in an international marketing programoften in$ol$es sbstantial doses of cltral, political, and economic shock.

AACSB: Analytic

Bloom's: Knowledge



*opic: Aspects of t+e -o"eign /ni"onment

1+.(p. 5)3ne ncontrollable element that is generally 'ell nderstood is the le$el oftechnology.FASE

The le$el of technology is an ncontrollable element that can often be misread becase of the$ast differences that may e!ist bet'een de$eloped and de$eloping contries.





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1.(p. )olitical and legal isses a company may face abroad are mitigated by the 4alienstats4 of the company.FASE

olitical and legal isses a bsiness faces abroad are often amplified by the 4alien stats4 ofthe company, 'hich increases the difficlty of properly assessing and forecasting the dynamicinternational bsiness climate.





1.(p. 7)In a domestic sitation, political details and the ramifications of political and legale$ents are often more transparent than they are in some foreign contries.T!"E

In a domestic sitation, political details and the ramifications of political and legal e$ents areoften more transparent than they are in some foreign contries. In many foreign contries,corrption may pre$ail, foreigners may recei$e nfair treatment, or the la's may be sodifferent from those in the home contry that they are misinterpreted.



Lea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2*opic: Aspects of t+e -o"eign /ni"onment

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1/.(p. )The political and legal en$ironment is a controllable element for internationalmarketers becase of the ability to lobby and inflence legislation.FASE

oliticallegal forces and the le$el of technology are only t'o of the ncontrollable aspects ofthe foreign en$ironment along 'ith economic forces, competiti$e forces, strctre ofdistribtion, geography and infrastrctre, and cltral forces.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: /asyLea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2


"0.(p. 7)In a broad sense, the ncontrollable elements of the foreign bsiness en$ironmentconstitte the cltre.T!"E

In a broad sense, the ncontrollable elements constitte the cltreK the difficlty facing themarketer in adsting to the cltre lies in recogni7ing its impact.


Bloom's: Comp"e+ensionDifficulty Leel: /asy

Lea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2*opic: /ni"onmental Adaptation 8eeded

"1.(p. 76)In dealing 'ith nfamiliar markets, marketers mst be a'are of the frames ofreference they are sing in making their decisions.T!"E

In dealing 'ith nfamiliar markets, marketers mst be a'are of the frames of reference theyare sing in making their decisions or e$alating the potential of a market, becase dgmentsare deri$ed from e!perience that is the reslt of accltration in the home contry.




*opic: /ni"onmental Adaptation 8eeded

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"".(p. 6)#ohn refses to by #apanese prodcts becase he sees this as a 'ay of selling ot toa nation kno'n for its aggressi$e beha$ior. #ohn is sing a self-reference criterion to make hisdecision.

T!"E

The S9C is an nconscios reference to one(s o'n cltral $ales, e!periences, andkno'ledge as a basis for decisions. Closely connected is ethnocentrism, that is, the notion thatpeople in one(s o'n company, cltre, or contry kno' best ho' to do things.


Bloom's: ApplicationDifficulty Leel: !edium

Lea"ning #$%ectie: && *+e impo"tance of t+e self"efe"ence c"ite"ion (S3C) in inte"national ma"2eting

*opic: *+e Self3efe"ence C"ite"ion and /t+nocent"ism: !a%o" #$stacles

"&.(p. 6) self-reference criterion is closely related to ethnocentrism.T!"E

The self-reference criterion is an nconscios reference to one(s o'n cltral $ales,e!periences, and kno'ledge as a basis for decisions. Closely connected is ethnocentrism, thatis, the notion that people in one(s o'n company, cltre, or contry kno' best ho' to dothings.



Lea"ning #$%ectie: && *+e impo"tance of t+e self"efe"ence c"ite"ion (S3C) in inte"national ma"2eting*opic: *+e Self3efe"ence C"ite"ion and /t+nocent"ism: !a%o" #$stacles

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").(p. 6)Sam 5atkins st recently ate and, therefore, feels stified in refsing food from hisMiddle 6astern host. In this instance, Sam(s self-reference criterion has st sa$ed him frommaking a cltral blnder.

FASE

5hen faced 'ith a problem in another cltre, or tendency is to react instincti$ely and referto or S9C for a soltion. 3r reaction, ho'e$er, is based on meanings, $ales, symbols, andbeha$ior rele$ant to or o'n cltre and sally different from those of the foreign cltre.Sch decisions are often not good ones.


Bloom's: Application




"*.(p. 9)To a$oid errors in bsiness decisions, it is necessary to condct a cross-cltralanalysis that emphasi7es the need for ethnocentrism.FASE

To a$oid errors in bsiness decisions, the kno'ledgeable marketer 'ill condct a cross-cltral analysis that isolates the S9C inflences and maintains $igilance regardingethnocentrism.



Difficulty Leel: !ediumLea"ning #$%ectie: && *+e impo"tance of t+e self"efe"ence c"ite"ion (S3C) in inte"national ma"2eting


"+.(p. 9)%nderstanding one(s o'n cltre normally re8ires no additional stdy.T!"E

%nderstanding one(s o'n cltre may re8ire additional stdy, becase mch of the cltralinflence on market beha$ior remains at a sbconscios le$el and is not clearly defined.

AACSB: Analytic

Bloom's: Knowledge



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".(p. )The most effecti$e approach to bild global a'areness into an organi7ation is toincrease the di$ersity mi! of the employee profile.FASE

The most effecti$e approach to bild global a'areness into an organi7ation is to ha$e acltrally di$erse senior e!ecti$e staff or board of directors.

AACSB: Analytic

Bloom's: Knowledge


Lea"ning #$%ectie: &&7 *+e inc"easing impo"tance of glo$al awa"eness


".(p. )9esearch has re$ealed that smaller home markets and larger prodction capacitiesappear to fa$or internationali7ation.T!"E

9esearch has re$ealed a nmber of factors fa$oring faster internationali7ation= B1 Companies'ith either high-technology andor marketing-based resorces appear to be better e8ipped tointernationali7e than more traditional manfactring kinds of companiesK B" smaller homemarkets and larger prodction capacities appear to fa$or internationali7ationK and B& firms'ith key managers 'ell net'orked internationally are able to accelerate theinternationali7ation process.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: !ediumLea"ning #$%ectie: &&6 *+e p"og"ession of $ecoming a glo$al ma"2ete"

*opic: Stages of 0nte"national !a"2eting 0nolement

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"/.(p. &) company at the 4no direct foreign marketing4 stage of international marketingin$ol$ement does not acti$ely clti$ate cstomers otside national bondaries.T!"E

company in this stage does not acti$ely clti$ate cstomers otside national bondariesKho'e$er, this company(s prodcts may reach foreign markets. Sales may be made to tradingcompanies as 'ell as foreign cstomers 'ho directly contact the firm.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: !ediumLea"ning #$%ectie: &&6 *+e p"og"ession of $ecoming a glo$al ma"2ete"

*opic: 8o Di"ect -o"eign !a"2eting

&0.(p. &)The most profond change in the orientation of a company to'ard markets andassociated planning acti$ities happens at the 4reglar foreign marketing4 stage of theinternational marketing in$ol$ement.FASE

t the global marketing le$el, the most profond change is the orientation of the companyto'ard markets and associated planning acti$ities.


Bloom's: Comp"e+ensionDifficulty Leel: !edium

Lea"ning #$%ectie: &&6 *+e p"og"ession of $ecoming a glo$al ma"2ete"

*opic: ;lo$al !a"2eting

&1.(p. )The global marketing concept $ie's the marketplace as consisting of one primarydomestic market that is complimented by se$eral smaller regional markets.FASE

t the global marketing stage of international marketing in$ol$ement, companies treat the'orld, inclding their home market, as one market.




*opic: ;lo$al !a"2eting

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Multiple Choice Questions

&".(p. 6)3f all the e$ents and trends affecting global bsiness today, for stand ot as the most

dynamic. 5hich of the follo'ing 'old be one of those e$ents:.The trend to'ard bying merican cars in 6rope.#$The trend to'ard the acceptance of the free market system among de$eloping contries.C.The trend to'ard sing 6nglish as the global langage.2.The trend to'ard establishing a 'orld crrency.6.The trend to'ard 'orld'ide instant commnication.

3f all the e$ents and trends affecting global bsiness today, for stand ot as the mostdynamic, the ones that 'ill inflence the shape of international bsiness beyond today(s4bmpy roads4 and far into the ftre= B1 the rapid gro'th of the 5orld Trade 3rgani7ationand regional free trade areas sch as the ?orth merican Free Trade rea and the 6ropean

%nionK B" the trend to'ard the acceptance of the free market system among de$elopingcontries in >atin merica, sia, and eastern 6ropeK B& the brgeoning impact of theInternet, mobile phones, and other global media on the dissoltion of national bordersK and B)the mandate to manage the resorces and global en$ironment properly for the generations tocome.

AACSB: Analytic

Bloom's: Knowledge



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&&.(p. 6)ll of the follo'ing e$ents and trends are among the for maor trends described inthe chapter as ha$ing a maor impact or effect on global bsiness 6atin merica, sia, and eastern 6ropeK B& the brgeoning impact of theInternet, mobile phones, and other global media on the dissoltion of national bordersK and B)the mandate to manage the resorces and global en$ironment properly for the generations tocome.

AACSB: Analytic



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&).(p. 9&)5hich of the follo'ing is ?3T T9%6 of the impact of globali7ation on domesticmarkets:.Stdy of manfactring companies fond that mltinationals of all si7es and in all

indstries otperformed their strictly domestic %.S. conterparts.;.rofit le$els from international $entres e!ceed those from domestic operations for manymltinational firms.C.3n a$erage, firm $ale is increased by global di$ersification.2.Companies 'ith foreign operations find that foreign earnings are making an importanto$erall contribtion to total corporate profits.E$Companies 'ith only domestic markets ha$e fond it relati$ely easy to sstain theircstomary rates of gro'th.

Companies 'ith only domestic markets ha$e fond increasing difficlty in sstaining theircstomary rates of gro'th, and many are seeking foreign markets in 'hich to e!pand.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: 4a"dLea"ning #$%ectie: && *+e c+anging face of ,.S. $usiness


&*.(p. &)@@@@@ is the performance of bsiness acti$ities designed to plan, price, promote, anddirect the flo' of a company(s goods and ser$ices to consmers or sers in more than onenation for a profit..Mltinational marketing;.5orld tradeC.Corporate management%$International marketing6.Alobal trade


AACSB: AnalyticBloom's: KnowledgeDifficulty Leel: /asy



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&+.(p. &)5hich of the follo'ing is the most critical difference bet'een domestic marketingand international marketing:A$The en$ironment in 'hich marketing plans mst be implemented

;.The different concepts of marketingC.The change in marketing goals2.The difference in technological standards6.The change in corporate obecti$es

The difference lies not 'ith different concepts of marketing bt 'ith the en$ironment 'ithin'hich marketing plans mst be implemented. The ni8eness of foreign marketing comesfrom the range of nfamiliar problems and the $ariety of strategies necessary to cope 'ithdifferent le$els of ncertainty encontered in foreign markets.

AACSB: 3eflectie *+in2ingBloom's: ,nde"stand




&.(p. )5hich of the follo'ing is the reason 'hy the international marketer(s task is morecomplicated than that of the domestic marketer:.;ecase the international marketer mst change his marketing goals in the $arioscontries of operation.#$;ecase the international marketer mst deal 'ith at least t'o le$els of ncontrollablencertainty instead of one.C.;ecase technological standardi7ation cold challenge effecti$e cstomi7ation in differentmarkets.2.;ecase international trade reglations still do not allo' free trade in most markets acrossthe globe.6.;ecase lack of competent skills makes effecti$e ser$ice a maor challenge.

The international marketer(s task is more complicated than that of the domestic marketerbecase the international marketer mst deal 'ith at least t'o le$els of ncontrollablencertainty instead of one. %ncertainty is created by the ncontrollable elements of allbsiness en$ironments, bt each foreign contry in 'hich a company operates adds its o'nni8e set of ncontrollable factors.



Difficulty Leel: 4a"dLea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2


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&.(p. )5hich of the follo'ing is a controllable element for an international marketer:.>e$el of technology;.Aeography and infrastrctre

C$Channels of distribtion2.Cltral forces6.Strctre of distribtion






&/.(p. )5hich of the follo'ing is an ncontrollable element for an international marketer:A$Strctre of distribtion;.romotionC.rice2.9esearch6.Firm characteristics






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)0.(p. )For an international marketer, the @@@@@ can be altered in the long rn and, sally,in the short rn to adst to changing market conditions, consmer tastes, or corporateobecti$es.

.competiti$e strctre;.economic climateC.strctre of distribtion2.en$ironmental factorsE$controllable elements

The controllable elements can be altered in the long rn and, sally, in the short rn to adstto changing market conditions, consmer tastes, or corporate obecti$es.


Bloom's: ApplicationDifficulty Leel: 4a"d



)1.(p. )5hich of the follo'ing is an ncontrollable factor in a domestic en$ironment:.Firm characteristics#$Competiti$e strctreC.Channels of distribtion2.rice6.romotion






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)).(p. )5hich of the follo'ing is a possible otcome of the alien stats of a company:A$The company can be seen as an e!ploiter.;.The company recei$es preferred treatment at the hands of politicians.

C.olitical acti$ists can rally spport for the company.2.>ocal indi$idals are gi$en control of management.6.The company is $ie'ed as a platform for cltral integration.

The alien stats of a foreign bsiness has t'o dimensions= It is alien in that foreigners controlthe bsiness and in that the cltre of the host contry is alien to management. The alienstats of a bsiness means that, 'hen $ie'ed as an otsider, it can be seen as an e!ploiter andrecei$e prediced or nfair treatment at the hands of politicians, legal athorities, or both.

AACSB: Analytic




)*.(p. 7)5hich of the follo'ing is ?3T tre of the impact of cltre:.The reaction to mch of the en$ironment(s Bcltral impact on the marketer(s acti$ities isatomatic.#$In dealing 'ith nfamiliar markets, frames of reference are nimportant in e$alating thepotential of a market.C.#dgments are deri$ed from e!perience that is the reslt of accltration in the homecontry.2.n established frame of reference is an important factor in determining a marketer(sreaction to sitationsDsocial and e$en nonsocial.6.s a reslt of accltration, 'e react in a manner acceptable to or society 'ithotconsciosly thinking abot it.

In dealing 'ith nfamiliar markets, marketers mst be a'are of the frames of reference theyare sing in making their decisions or e$alating the potential of a market.




Lea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2*opic: /ni"onmental Adaptation 8eeded

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)+.(p. )Crrent data says that foreign in$estments in the %.S. amont to @@@.A$"&.) trillion;.00 million

C.&0 billion2.&*0 billion6.+0 billion

Foreign in$estment in the %nited States is more than G"&.) trillion.

AACSB: Analytic




).(p. )Companies from @@@@@ lead in foreign in$estment in the %nited States..Eingdom of Sadi rabia;.9ssiaC.China%$%nited Eingdom6.Canada

Foreign in$estment in the %nited States is more than G"&.) trillion. Companies from the%nited Eingdom lead the grop of in$estors, 'ith companies from the ?etherlands, #apan,

Aermany, and S'it7erland, in that order.

AACSB: Analytic

Bloom's: Knowledge




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).(p. &)@@@@@ is the performance of bsiness acti$ities designed to plan, price, promote, anddirect the flo' of a company(s goods and ser$ices to consmers or sers in more than onenation for a profit.

.Alobal management;.Alobal bsinessC.Marketing%$International marketing6.Alobal marketing concept






)/.(p. )ccording to the te!t, the primary difference in the practice of marketing at thedomestic $erss the international le$el is=A$the en$ironment 'ithin 'hich the marketing plans mst be implemented.;.the cltral mi! of the people 'orking in the organi7ation.C.the le$el of in$estment re8ired.2.the le$el of management control.6.the difference in the concepts of marketing.

The difference bet'een domestic and international marketing lies not 'ith different conceptsof marketing bt 'ith the en$ironment 'ithin 'hich marketing plans mst be implemented.

AACSB: Analytic

Bloom's: Knowledge



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*0.(p. )5ith respect to the en$ironment in 'hich a bsiness operates, sch factors ascompetition, legal restraints, go$ernment controls, and the 'eather 'old all be e!amples of'hat are called=

.controllable elements.#.ncontrollable elements.C$predictable elements.2.demographic elements.6.cltral elements.





Lea"ning #$%ectie: &&5 *+e scope of t+e inte"national ma"2eting tas2*opic: *+e 0nte"national !a"2eting *as2

*1.(p. )ll of the follo'ing 'old be considered to be controllable elements of marketingdecisions 6

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*".(p. )Considering the model of the international marketing task displayed in the te!t,'hich of the follo'ing reasons demonstrates the most important difference bet'een theinternational marketer(s task and that of the domestic marketer:

A.The international marketer mst deal 'ith at least t'o le$els of ncontrollable ncertaintyinstead of one.;.The le$el of technology and cltral forces are controllable elements for the domesticmarketer.C$The spply and distribtion channels are ncontrollable elements for the internationalmarketer.2.The competiti$e strctre is one of the controllable factors for an international marketer.6.The international marketer is less concerned abot geography and infrastrctre than thedomestic marketer.






*&.(p. )9obert #onas is in charge of a ne' marketing effort directed to'ard er. In order forhis company to effecti$ely market and distribte to all of er(s maor cities, Mr. #onas mstde$ise a logistics plan for crossing the ndes Montains on a daily basis. 5hich of thefollo'ing foreign en$ironment ncontrollable $ariables 'old be a chief concern as Mr. #onasde$ises his plan:.Competiti$e forces;.Cltral forcesC$Aeography and infrastrctre2.6conomic forces6.oliticallegal forces


AACSB: 3eflectie *+in2ingBloom's: ApplicationDifficulty Leel: !edium



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*).(p. )Compared to the foreign en$ironment ncontrollable $ariables, 'hich of thefollo'ing elements is e!clded from the domestic marketer(s list of ncontrollable $ariables:.olitical forces.

;.Competiti$e strctre.C.6conomic climate.%$Cltral forces.6.>egal forces.







**.(p. )ll of the follo'ing 'old be among the domestic marketer(s controllableen$ironmental $ariables 6

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*+.(p. )ll of the follo'ing appear as a foreign en$ironment ncontrollable $ariable in themodel of the international marketing task sho'n in the te!t 6

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*.(p. ) political decision in$ol$ing @@@@@ 'old most likely ha$e a direct effect on afirm(s international marketing sccess.A$domestic foreign policy

;.immigration reformC.oil e!ploration policy2.FCC satellite reglations6.F airline reglations

political decision in$ol$ing domestic foreign policy can ha$e a direct effect on a firm(sinternational marketing sccess. For e!ample, the %.S. go$ernment placed a total ban on trade'ith >ibya to condemn >ibyan spport for terrorist attacks.





*/.(p. 5)Competition 'ithin the home contry can ha$e a profond effect on the internationalmarketer(s task. 5hich of the follo'ing ;6ST illstrates this statement:.;oeing recently opened talks 'ith its primary trade nion to a$oid a forecasted strike.;.Microsoft and 2ell ha$e ointly in$ested G00 million in a ne' $entre to in$estigate hightechnology of the ftre.C$Fi opened a G&00 million plant in the %.S. and no' commands a 1" percent share of thelcrati$e %.S. film market.2.Se$eral companies are still nder in$estigation becase of the 6nron scandal.6.2eclaration of independence by ;altic States after the collapse of the So$iet %nion.

Fi hoto Film became a formidable competitor by lo'ering film prices in the %nited States,opening a G&00 million plant, and soon gaining 1" percent of the %.S. market. s a reslt,Eodak has had to direct energy and resorces back to the %nited States.

AACSB: Analytic

Bloom's: Knowledge



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+0.(p. 5)9alph 5aite has st been assigned the task of re$ie'ing his company(s internationalin$estment opportnities. He kno's that his $ie' of the list of opportnities shold betempered by foreign en$ironment ncontrollables that might be encontered. 5hich of the

follo'ing 'old be the ;6ST illstration of a foreign en$ironmental ncontrollable that Mr.5aite shold in$estigate:A$ contry(s le$el of technology.;.ricing policies in the foreign contry.C.The ability to do research in the foreign contry.2.Manfactring capabilities in the foreign contry.6.The ability to do ad$ertising in the foreign contry.






+1.(p. 5)The @@@@@ is an ncontrollable element that can often be misread becase of the $astdifferences that may e!ist bet'een de$eloped and nde$eloped contries..strctre of distribtion;.competiti$e forcesC.economic forces2.politicallegal forcesE$le$el of technology

The le$el of technology is an ncontrollable element that can often be misread becase of the$ast differences that may e!ist bet'een de$eloped and de$eloping contries. marketercannot assme that nderstanding of the concept of pre$enti$e maintenance for machinery isthe same in other contries as in the %nited States.


Bloom's: Knowledge



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+".(p. )The @@@@@ and isses abroad are often amplified by the 4alien stats4 of thecompany, 'hich increases the difficlty of properly assessing and forecasting the dynamicinternational bsiness climate.

.strctre of distribtion;.competiti$e forcesC.economic forces%$politicallegal forces6.le$el of technology

olitical and legal isses face a bsiness, 'hether it operates at home or in a foreign contry.Ho'e$er, the isses abroad are often amplified by the 4alien stats4 of the company, 'hichincreases the difficlty of properly assessing and forecasting the dynamic internationalbsiness climate.





+&.(p. )5hich of the follo'ing 'old be the ;6ST illstration of the 4alien stats4 fond inthe political and legal arena that sometimes case problems for international marketers as theyattempt to doing bsiness in foreign contries:. company in the %.E. recently prchased ;en #erry(s ice cream operations.#$The Indian go$ernment told Coca-Cola that it mst re$eal its 4secret formla4 if it 'ishedto contine doing bsiness in India.C.9ichard ;ranson(s Jirgin Cola 'as not 'idely accepted in the %nited States.2.French Canadians prefer French to 6nglish 'hen condcting bsiness in Canada.6.;ritish irlines and #apan irlines oin merican irlines to form 3ne5orld lliance.

The alien stats of a foreign bsiness has t'o dimensions= It is alien in that foreigners controlthe bsiness and in that the cltre of the host contry is alien to management.


Bloom's: Application



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+).(p. 7)The task of @@@@@ is the most challenging and important one confrontinginternational marketers..caring for the en$ironment

;.dealing 'ith politicsC.international standardi7ation%$cltral adstment6.international branding

The task of cltral adstment, ho'e$er, is the most challenging and important oneconfronting international marketersK they mst adst their marketing efforts to cltres to'hich they are not attned.

AACSB: Analytic



*opic: /ni"onmental Adaptation 8eeded

+*.(p. 6)@@@@@ is the conscios effort on the part of the international marketer to anticipatethe inflences of both the foreign and domestic ncontrollable factors on a marketing mi! andthen adst the marketing mi! to minimi7e the effects..Standardi7ation#$daptationC.Segregation2.Segmentation6.roection

daptation is a conscios effort on the part of the international marketer to anticipate theinflences of both the foreign and domestic ncontrollable factors on a marketing mi! andthen to adst the marketing mi! to minimi7e the effects.

AACSB: Analytic




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++.(p. 6)The primary obstacles to sccess in international marketing are a person(s @@@@@ andan associated ethnocentrism..regionalism

;.holismC$self-reference criterion2.segregation6.integration

The primary obstacles to sccess in international marketing are a person(s self-referencecriterion BS9C and an associated ethnocentrism. The S9C is an nconscios reference toone(s o'n cltral $ales, e!periences, and kno'ledge as a basis for decisions.

AACSB: Analytic




+.(p. 6)@@@@@ is an nconscios reference to one(s o'n cltral $ales, e!periences, andkno'ledge as a basis for decisions..9egionalism;.HolismC$Self-reference criterion2.Segregation6.

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+.(p. 6)In the %nited States, nrelated indi$idals keep a certain physical distance bet'eenthemsel$es and others 'hen talking or in grops. 5e do not consciosly think abot thatdistanceK 'e st kno' 'hat feels right 'ithot thinking. Someone from another cltre

'old not necessarily nderstand this and 'old apply their o'n rles for contact 'henspeaking. The preceding is an illstration of 'hat is called applying a @@@@@ 'hen re$ie'ingthe mentioned social cstom of contact..self-space;.segregationC.integration2.space command theoryE$self-reference criterion BS9C

Misnderstandings that can occr abot personal space bet'een people of different cltres isan e!ample that illstrates the impact of S9C.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: !ediumLea"ning #$%ectie: && *+e impo"tance of t+e self"efe"ence c"ite"ion (S3C) in inte"national ma"2eting


+/.(p. 6)5hich of the follo'ing is closely related to self-reference criterion:.Central tendency;.Marketing myopiaC$6thnocentrism2.Mlticltralism6.lralism

The self-reference criterion is an nconscios reference to one(s o'n cltral $ales,e!periences, and kno'ledge as a basis for decisions. Closely connected is ethnocentrism, thatis, the notion that people in one(s o'n company, cltre, or contry kno' best ho' to dothings.

AACSB: Analytic

Bloom's: Knowledge



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0.(p. 6)Lor @@@@@ can pre$ent yo from being a'are that there are cltral differences orfrom recogni7ing the importance of those differences..self-space

;.personalityC.demographic character%$self-reference criterion BS9C6.concept of integration

5hen faced 'ith a problem in another cltre, or tendency is to react instincti$ely and referto or S9C for a soltion. 3r reaction, ho'e$er, is based on meanings, $ales, symbols, andbeha$ior rele$ant to or o'n cltre and sally different from those of the foreign cltre.Sch decisions are often not good ones.





1.(p. 6)5hich of the follo'ing is tre of ethnocentrism:.It is the cltral binding force among a di$erse employee poplation in an organi7ation.#$It is generally a problem 'hen managers from afflent contries 'ork 'ith managers andmarkets in less afflent contries.C.merican managers ha$e generally been ninflenced by it, especially in the beginning ofthe "1st centry.2.6thnocentrism is the casati$e factor behind the phenomenon of self-reference criterion.6.Self-reference criterion is ni$ersally considered the techni8e to redce or eliminateethnocentrism.

6thnocentrism 'as particlarly a problem for merican managers at the beginning of the "1stcentry becase of merica(s dominance in the 'orld economy dring the late 1//0s.





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".(p. )The most effecti$e 'ay to control the inflence of ethnocentrism and the S9C is to=.redce interaction 'ith cltrally di$erse adience.;.ask for feedback on e$ery possible occasion.

C$recogni7e their effects on or beha$ior.2.learn at least t'o foreign langages to nderstand the cltral differences.6.ask for second opinion in a decision-making scenario.

The most effecti$e 'ay to control the inflence of ethnocentrism and the S9C is to recogni7etheir effects on or beha$ior.

AACSB: Analytic

Bloom's: Knowledge




&.(p. 9)To a$oid errors in bsiness decisions, it is necessary to condct a cross-cltralanalysis that isolates the self-reference criterion inflences. 5hich of the follo'ing 'old bethe first-step to take to a$oid the aforementioned errors:.9edefine the problem 'ithot the S9C inflence.;.Sol$e the problem for the optimm bsiness goal sitation.C.Isolate the S9C inflence in the problem and e!amine it careflly to see ho' it complicatesthe problem.%$2efine the bsiness problem or goal in home-contry cltral traits, habits, or norms.6.2efine the bsiness problem or goal in foreign-contry cltral traits, habits, or normsthrogh consltation 'ith nati$es of the target contry.

2efining the bsiness problem or goal in home-contry cltral traits, habits, or norms is thefirst step pro$ided in the analysis frame'ork to a$oid errors in bsiness decisions o'ing toS9C.

AACSB: Analytic




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).(p. 9) part of cross-cltral analysis re8ires nderstanding of one(s o'n cltre. 5hy isit srprising that nderstanding one(s o'n cltre re8ires additional stdy:.;ecase self-criticism is not easy to bild 'hen stdying one(s o'n cltre.

#$;ecase mch of cltral inflence on market beha$ior is at the sbconscios le$el.C.;ecase of the comple!ity of the cltral traits in one(s o'n contry.2.;ecase international trade treaties mandate that managers ha$e e!tensi$e cltralkno'ledge of their o'n contry.6.;ecase cltral inflence on one(s o'n market beha$ior is generally ndocmented.

%nderstanding one(s o'n cltre may re8ire additional stdy, becase mch of the cltralinflence on market beha$ior remains at a sbconscios le$el and is not clearly defined.





*.(p. 9)To be globally a'are, an international marketer mst ha$e all the follo'ing6

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+.(p. 9)5hich of the follo'ing ;6ST e!emplifies the tolerance of a globally a'aremanager:.Lo shold be familiar 'ith the leading cltral trends in the 'orld.

;.Lo ha$e to accept as yor o'n the cltral 'ays of another.C$Lo mst allo' others to be different and e8al.2.Lo mst be a'are of globally accepted cltrally standards.6.Lo mst ha$e ndertaken corses in cltral differences.

Tolerance is nderstanding cltral differences and accepting and 'orking 'ith others 'hosebeha$iors may be different from yors. Lo do not ha$e to accept as yor o'n the cltral'ays of another, bt yo mst allo' others to be different and e8al.




*opic: Deeloping a ;lo$al Awa"eness

.(p. 9)5hich of the follo'ing 'ill aid a manager in nderstanding some >atin mericans(relctance to'ard foreign in$estment or Chinese relctance to open completely to otsiders:. better nderstanding of global economic trends.;. deeper nderstanding of 'orld market potential.C. tolerance to'ard cltral differences.2.n nderstanding of microeconomics.E$ historical perspecti$e.

Eno'ledge of history is important becase the 'ay people think and act is inflenced by theirhistory. Some >atin mericans( relctance to'ard foreign in$estment or Chinese relctance toopen completely to otsiders can be nderstood better if yo ha$e a historical perspecti$e.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: !ediumLea"ning #$%ectie: &&7 *+e inc"easing impo"tance of glo$al awa"eness


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.(p. )5hich of the follo'ing is an ob$ios strategy organi7ations shold se to bildglobal a'areness into organi7ations:.6stablish sbsidiaries in cltrally di$erse contries, ths leading to inter-cltral

commnication.#$Select indi$idal managers specifically for their demonstrated global a'areness.C.9ecrit managers from other nations to increase di$ersity.2.3rgani7e foreign trips for managers to impro$e their nderstanding.6.Increase mi! of di$ersity in the employee profile of the organi7ation.

Alobal a'areness can and shold be bilt into organi7ations sing se$eral approaches. Theob$ios strategy is to select indi$idal managers specifically for their demonstrated globala'areness. Alobal a'areness can also be obtained throgh personal relationships in othercontries.




Lea"ning #$%ectie: &&7 *+e inc"easing impo"tance of glo$al awa"eness*opic: Deeloping a ;lo$al Awa"eness

/.(p. )5hich of the follo'ing is the most effecti$e 'ay to achie$e organi7ational globala'areness:.6stablish reglar a'areness campaigns across the organi7ation.;.3rgani7e employee trips to foreign cltres to increase their sensiti$ity.C.Increase the di$ersity mi! of the employee profile.%$Ha$e a cltrally di$erse senior e!ecti$e staff or board of directors.6.romote social net'orking as a means to impro$e inter-cltral commnication.

Alobal a'areness can be obtained throgh personal relationships in other contries. ;tperhaps the most effecti$e approach is to ha$e a cltrally di$erse senior e!ecti$e staff orboard of directors.




Lea"ning #$%ectie: &&7 *+e inc"easing impo"tance of glo$al awa"eness*opic: Deeloping a ;lo$al Awa"eness

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0.(p. )5hich of the follo'ing organi7ations seem better e8ipped for internationali7ation:. firm that has more than t'o liaison offices in foreign contries#$ firm that has a prodction capacity that is mch greater than home market demand

C. firm that has more than three prodction facilities in the home market2. firm that has a cltrally di$erse employee profile6. firm that has e!perienced increased profits in home market for three consecti$e years

3ne of the factors fa$oring faster internationali7ation is smaller home markets and largerprodction capacities.






1.(p. )5hich of the follo'ing organi7ations has a better chance of accelerating theirinternationali7ation process:A$Firms 'ith key managers 'ell net'orked internationally;.Firms re8iring global standards for employee skillsC.Firms 'ith e!cess prodction capacity than their domestic demand2.Firms sing the Internet as their maor commnication platform6.Firms that aim at otsorcing non-core bsiness fnctions

Firms 'ith key managers 'ell net'orked internationally are able to accelerate theinternationali7ation process.

AACSB: Analytic

Bloom's: Knowledge

Difficulty Leel: /asyLea"ning #$%ectie: &&7 *+e inc"easing impo"tance of glo$al awa"eness


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".(p. &)5hich of the follo'ing is ?3T one of the stages of international marketingin$ol$ement:A$Indirect Foreign Marketing

;.Infre8ent Foreign MarketingC.9eglar Foreign Marketing2.International Marketing6.Alobal Marketing

The first stage mentioned in the fi$e stages is 4?o 2irect Foreign Marketing.4

AACSB: Analytic

Bloom's: Knowledge




&.(p. &)5hich of the follo'ing is T9%6 regarding the stages of international marketingin$ol$ement:. firm progresses throgh the stages in a linear order;.The stages do not o$erlapC. firm begins its international in$ol$ement at the second stage%$ firm may be in more than one stage simltaneosly6.The first stage of the process is ?o Foreign Marketing(

Thogh presented in a linear fashion, it cannot be inferred that a firm progresses from onestage to anotherK 8ite to the contrary, a firm may begin its international in$ol$ement at anyone stage or be in more than one stage simltaneosly.





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).(p. &)There are a $ariety of stages in the process of becoming in$ol$ed in internationalmarketing. 5hich of the follo'ing best describes the stage of de$elopment 'here thecompany(s prodcts reach a foreign market throgh no conscios effort on the part of the

marketer:.Infre8ent foreign marketing;.9eglar foreign marketingC$?o direct foreign marketing2.International marketing6.Alobal marketing

company in this stage does not acti$ely clti$ate cstomers otside national bondariesKho'e$er, this company(s prodcts may reach foreign markets. Sales may be made to tradingcompanies as 'ell as foreign cstomers 'ho directly contact the firm.



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Chap001 (2)