Chapter 1

Question 1

List the 5 most important trends affecting global business

Answer 1

1) Rapid growth of the WTO and regional free trade areas
2) Acceptance of the free market system
3) Growing middle class in developing countries
4) Impact of the internet, mobile phones, and other global media on the dissolution of national borders
5) Mandate to properly manage the resources and global environment

Question 2

• Many formally U.S. companies are now foreign owned
• Many foreign companies manufacture in U.S.
• Huge portion of the products sold in U.S. are foreign made

This lead to increased competition for U.S. companies

Answer 2

Non-U.S. companies entering the U.S.

Question 3

An example of this is: Western Central Transportation controls U.K. Rail freight business and Queen’s private train

Answer 3

U.S. companies in other countries

Question 4

Being international is not a luxury ___________________

Answer 4

It’s a necessity

Question 5

__________________ outperforms domestic companies

Answer 5

U.S. multinational companies

Question 6

What is: the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit?

Answer 6

International Marketing

Question 7

What two things differentiates marketing and international marketing?

Answer 7

1) In more than one nation

2) The uncontrollable environment

Question 8

List the seven components of the international marketing task under the foreign environment portion:

Answer 8

1) Political/legal forces
2) Cultural forces
3) Geography and infrastructure
4) Structure of distribution
5) Level of technology
6) Competitive forces
7) economic forces

Question 9

List the three components of the international marketing task under the domestic environment portion:

Answer 9

1) Political/legal forces
2) Economic climate
3) Competitive structure

Question 10

List the six components of the international marketing task under the controllable portion:

Answer 10

1) Firm characteristics
2) Price
3) Product
4) Promotion
5) Channels of distribution
6) Research

Question 11

Tell whether each portion of the international marketing task is controllable or uncontrollable:

1) Foreign environment
2) Domestic environment
3) Environmental

Answer 11

1) Uncontrollable
2) Uncontrollable
3) Uncontrollable elements

Question 12

What is: an unconscious reference to ones own cultural values, experiences, and knowledge as a basis for decisions?

What is an example?

Answer 12

Self-Reference Criterion (SCR)

Personal space

*Aware of only 1/10 of our cultural conditioning

Question 13

What is: the notion that people in ones own company, culture, or country knows best how to do things?

Where does this most often occur?

Answer 13

Ethnocentrism

When managers from affluent countries work with managers from less affluent countries

Question 14

What is a risk of SRC?

Answer 14

SRC influences the evaluation of the appropriateness of a domestically designed marketing mix for a foreign market

Question 15

• To recognize the effects on our behavior
• To recognize that there may be more similarities than differences between countries
• To conduct cross-cultural analysis

These are all ways to do what?

Answer 15

Control the influence of SRC and ethnocentrism when adapting to foreign markets

Question 16

_______ involves:

• Tolerance of cultural differences
• knowledge of cultures, history, world market potential, and global economic, social, and political trends

Answer 16

Global Awareness

Question 17

List the three steps in developing a firm’s global awareness:

Answer 17

1) Management selection
2) Develop relationships in foreign countries
3) Culturally diverse senior executive staff or board of directors

Question 18

List the 5 stages of international marketing involvement and tell whether they are reactive or proactive:

Answer 18

1) No direct foreign marketing (reactive)
2) Infrequent foreign marketing (reactive)
3) Regular foreign marketing (proactive)
4) International marketing (proactive)
5) Global marketing (proactive)

Question 19

Describe “No Direct Foreign Marketing”

Answer 19

• Products indirectly reach foreign markets

* Foreign orders stimulate a company’s interest to seek additional international sales

Question 20

Describe “Infrequent Foreign Marketing”

Answer 20

• Caused by temporary surpluses

* Firm has little or no intention of maintaining continuous market representation

Question 21

Describe “Regular Foreign Marketing”

Answer 21

• Dedicated production capacity for foreign markets
• Products are adapted for foreign markets
• Firms depend on profits from foreign markets

Question 22

Describe “International Marketing”

Answer 22

• Fully committed and involved in foreign markets

* Production takes place on foreign soil earning firms the MNC (MultiNational Corporation) title

Question 23

Describe “Global Marketing”

Answer 23

• Firm sees the world as one market
• Market segmentation
  
  • not defined by borders
  • defined by income levels, usage patterns, or other factors that span the globe
• More than half of its revenues come from abroad
• “Global companies” and “global marketing”
• Most effective orientation