Liberty University BUSI 330 quiz 2 solutions answers right

Liberty University BUSI 330 quiz 2 solutions answers right

How many versions: 4 different versions

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Question 1 A consumer's subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people are referred to as __________.

Question 2 Based on the stages of the family life cycle, which of the following groups most likely has the largest amount of discretionary income?

Question 3 The Ford Escape Hybrid SUV was the first SUV on the market to be powered by both electricity and gasoline. Ford has targeted not only people who are excited about technology but also those who want to contribute to cleaner air. Ford set a goal to attract 20,000 buyers a year for this SUV. Ford is trying to change consumer attitudes by

Question 4 Figure 4­4 In Figure 4­4 above, B represents the __________ influences that can affect the consumer purchase decision process.

Question 5 When strolling through the grocery store, a toddler tells her mother, "Yuck, I don't like peas." Her mother puts down the peas and chooses green beans instead. The role of the little girl in this purchase was that of __________.

Question 6 Another name for the analysis of consumer lifestyles is __________.

Question 7 A person's ability to perceive differences in stimuli is referred to as

Question 8 An attitude refers to

Question 9 An example of a marketer­dominated source of information consulted during an external search would include

Question 10 Figure 4­1 According to Figure 4­1 above, the point at which you would exchange money for your sandwich of corned beef on rye would be found in stage __________.

Question 11 Many companies have broadened their buying objectives to include an emphasis on

Question 12 Because more and more companies are concerned with the depletion of natural resources, supply partnerships often include provisions for

Question 13 Which of the following types of firms comprises an industrial market?

Question 14 Online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services are referred to as

Question 15 The system that provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA), is referred to as the

Question 16 JCPMedia

Question 17 Firms selling consumer products or services often try to reach thousands or millions of individuals or households. Firms selling to organizations

Question 18 A __________ exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate customer.

Question 19 When prospective buyers observe the bids of others and decide whether or not to increase the bid price, it is called a(n)

Question 20 Most large multistore chain resellers use __________ that are highly formalized and known as buying committees to arrive at buying decisions.

Question 21 A firm's profit potential and control over marketing activities increases as it moves from exporting to direct investment as a global market­entry strategy. But so does the firm's

Question 22 The economic argument for protectionism is that it

Question 23 U.S. appliance manufacturers find that different customs about shopping must be used to determine product design. For instance, people in Northern Europe shop only once a week, so they need bigger refrigerators than Southern Europeans, who shop daily. Furthermore, Northern Europeans insist that freezers should be on the top just as firmly as Southern Europeans insist that freezers should be on the bottom. Consumers in other regions use their appliances differently and have other different product demands. Given this information, you should conclude U.S. appliance manufacturers would be more likely successful if they used a(n) __________ marketing strategy.

Question 24 Mars, America's second­largest candy company, began doing business in Russia in the late 1980s. The Snickers bar is one of the top selling candies in Russia and is marketed in much the same way as it is in the United States. Mars is most likely a(n) __________ firm.

Question 25 In terms of the global marketplace, there are three primary types of companies: international firms, __________ firms, and transnational firms.

Question 26 The European Union is an economic and political union of __________ member countries located primarily in Europe that have eliminated most barriers to the free flow of goods, services, capital, and labor across their borders.

Question 27 If you wanted to set up a business importing amber jewelry from Latvia to the United States, you would have to plan on paying the U.S. Customs Service roughly 20 percent of the value of the product as a(n) __________.

Question 28 Disney employed a(n) __________ marketing strategy for its Disneyland Paris, particularly when it came to the eateries in the park. These restaurants featured recipes that were revised for local tastes, alcoholic beverages (not permitted in previous parks), and increased outdoor seating.

Question 29 A firm's profit potential and control over marketing activities __________ as it moves from exporting to direct investment as a global market­entry strategy.

Question 30 3M Company executives were perplexed when the company's Scotch­Brite floor­cleaning product initially produced lukewarm sales in the Philippines. A Filipino employee explained that consumers generally clean floors by pushing coconut shells around with their feet. 3M changed the shape of the pad to a foot and sales soared. 3M changed its product in response to a Filipino __________.

Question 1

Learning refers to

Question 2

Edison noticed that prices at a new video game rental website were lower than those at most of the other gaming websites or retail stores such as Game Stop. He is exhibiting

Question 3

Which of the following is a concept from behavioral learning theory that marketers use?

Question 4

Which problem solving variation would typically be used for blenders, a restaurant for lunch, or professional ball game tickets?

Question 5

You need to buy a gift for a young cousin's birthday. You go to the mall and see a girl wearing a Hello Kitty t‑shirt. You remember there is a store in the mall with a lot of Hello Kitty merchandise so you go there and buy a little backpack. When you give it to your cousin, she is very excited. In terms of behavioral learning, seeing the girl with the Hello Kitty t‑shirt was a __________.

Question 6

An ad for Conesco's life insurance asks the question, "How do you plan on supporting your family after you pass away?" The ad shows a tombstone with a sign that offers the face of the stone as ad space. The ad is intended to appeal to which of the Maslow hierarchy of needs?

Question 7

An example of a public source of information consulted during an external search would include

Question 8

Figure 4‑3

In Figure 4‑3 above, column B represents which of the following in terms of consumer involvement and product knowledge?

Question 9

A favorable attitude toward and consistent purchase of a single brand over time is referred to as

Question 10

Those behaviors that result from repeated experience and reasoning is referred to as

Question 11

The buying situation where users, influencers, or deciders want to change product specifications, price, delivery schedule, or supplier for an item that is largely the same as what was previously purchased is referred to as a

Question 12

In terms of organizational buyers, Amazon.com, Lands' End, and JCPenney would all be generally classified as __________.

Question 13

Itex Corporation, a marketer of Photostat products used in the graphic arts field, buys photo sensitized paper from Eastman Kodak Company, packages it with the Photostat brand name, and sells it directly to amateur photographers. In this context, Itex Corporation is most accurately classified as a

Selected Answer: reseller.

Question 14

To lower costs and reduce manufacturing time, Michelin has people work together on important purchases. These people include individuals in the roles of buyers, deciders, gatekeepers, and others, as needed. This type of cross‑functional group is known as a(n)

Question 15

Online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services are referred to as

Question 16

Archer Daniels Midland Co. (ADM) is the world's largest cocoa‑bean processor. It buys cocoa beans and converts them into cocoa powder and cocoa butter, which it then sells to companies like Hershey's that manufacture consumer products containing chocolate. ADM is operating in a(n) __________ market.

Question 17

Because orders in organizational buying are typically much larger than in consumer buying, buyers must often __________ when the order is above a specific amount, such as $5,000.

Question 18

All of the following are roles in a buying center EXCEPT:

Question 19

In a buying center, __________ have the formal or informal power to select or approve the supplier that receives the contract.

Question 20

Unfortunately, the NAICS system will not allow marketing managers to gather information about

Question 21

In terms of the global marketplace, there are three primary types of companies: international firms, __________ firms, and transnational firms.

Question 22

When foreign currencies can buy more U.S. dollars,

Question 23

When Nestlé actually owns a subsidiary or division in a foreign country, such as when it established its own ice cream manufacturing operation in China, this global market entry strategy is known as __________ and represents the greatest commitment a company can make.

Question 24

A government tax on goods or services entering a country is referred to as a

Question 25

Which of the following is an advantage inherent in the use of licensing?

Question 26

The practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors is referred to as

Question 27

Once a company has decided to enter the global marketplace, it must select a means of market entry. Four general options exist: (1) exporting; (2) __________; (3) joint venture; and (4) direct investment.

Question 28

According to Figure 6‑3 above, point "A" would most likely what option for entering the global marketplace?

Question 29

When CNS decided to enter the global market for its Breathe Right strips, there were many contributing factors for doing so. However, according to Kevin McKenna, vice president for international at CNS, the real key to successfully enter a specific global market is

Question 30

A gray market refers to

1. JCPMedia

A. buys the fashions that are sold in JCPenney stores.

B. is an advertising agency for industrial companies seeking brand recognition.

C. is the print and paper purchasing arm of JCPenney.

D. is a marketing research company that monitors e-commerce activities.

E. buys and sells media space for newspapers.

2. Kim Nagele, the senior procurement agent at JCPMedia purchases tons of publication paper annually at a cost of hundreds of millions of dollars. In the buying center, Kim Nagele performs the role of the

_________.

A. user

B. gatekeeper

C. influencer

D. buyer

E. decider

3. When JCPMedia buys paper, it considers the supplier's forest management practices and its environmental practices. How the supplier assumes its __________ is important in the selection of a paper supplier for JCPMedia.

A. profit responsibility

B. societal responsibility

C. ecological accountability

D. environmental autonomy

E. stakeholder responsibility

4. To select a paper supplier, JCPMedia looks at the supplier's capacity to deliver selected grades of paper, the availability of specific types of paper, and price. This examination would be done during JCPMedia's __________

A. procurement analysis

B. break-even analysis

C. value analysis

D. database search

E. social audit

5. The size and number of JCPenney catalogs designed and mailed to consumers would determine how much paper JCPMedia would need to buy. This is an example of _________.

A. derived demand

B. reciprocity

C. a tying agreement

D. a transactional sale

E. elastic supply

6. The marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others is referred to as _________.

A. integrated marketing

B. institutional marketing

C. business marketing

D. reseller marketing

E. agricultural marketing

7. Business marketing refers to

A. the marketing of goods and services to companies, governments, or ultimate consumers for use in the creation of goods and services.

B. the marketing of goods and services to not-for-profit organizations at a reduced fee or nominal for use in the creation of goods and services that they can produce and market to others.

C. the marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others.

D. the marketing of services in the area of intellectual property such as legal, financial, or creative consulting.

E. the marketing of an idea to create interest or generate goodwill, not for an individual brand but for entire industry or product class.

8. A business market is also referred to as

A. the transactional market.

B. the ultimate market.

C. a relational enterprise.

D. entrepreneurship.

E. an industrial market.

9. Manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale are referred to as

A. multinational buyers.

B. resellers.

C. organizational buyers.

D. ultimate consumers.

E. institutional buyers.

10. Organizational buyers refer to

A. manufacturers, wholesalers, retailers, and government agencies that buy goods and services exclusively for resale.

B. manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.

C. manufacturers, wholesalers, retailers, and government agencies that buy goods and services exclusively for their own use.

D. nonprofit organizations that make purchases at a reduced or nominal fee and are exempt from most governmental taxes.

E. manufacturing cooperatives that purchase large quantities in order to take advantage of economies of scale that they could not be able to attain otherwise.

11. Organizational buyers include manufacturers, wholesalers, retailers, and government agencies

A. that purchase exclusively from one supplier.

B. that are exempt from state and local taxes.

C. that sell directly to ultimate consumers.

D. that employ at least 1000 workers.

E. that buy goods and services for their own use or resale.

12. These organizational buyers purchase raw materials and parts to reprocess into the finished goods they sell.

A. retailers

B. wholesalers

C. manufacturers' agents

D. manufacturers

E. ultimate consumers

13. Which of these statements regarding organizational buyers is most accurate?

A. Wholesalers and retailers resell the goods they buy without reprocessing them.

B. Wholesalers and retailers alter the products they sell to meet the specific needs of their customers prior to sale.

C. Manufacturers purchase processed goods and resell them to suppliers who in turn resell them to ultimate consumers.

D. Ultimate consumers can be considered organizational buyers when they purchase in large quantities or they make long-term purchase agreements.

E. Government agency purchases are more similar to ultimate consumer purchases than they are to wholesalers and retailers.

14. Organizational buyers can be divided into three different markets. They are

A. industrial, wholesaler, and retailer markets.

B. industrial, retailer, and government markets.

C. retailer, manufacturer, and government markets.

D. industrial, government, and ultimate consumer.

E. industrial, reseller, and government markets.

15. Which of the following statements represents an organizational buyer?

A. A local baker buys sugar to make cookies with his children at home.

B. A dentist buys a new VCR for her den.

C. Mr. Langley hires a housecleaning service to clean his apartment.

D. The owner of a fried chicken restaurant hires a snow removal service to keep the parking lot clear.

E. The city mayor purchases a new suit to wear to his daughter's wedding.

16. An industrial firm is a firm that

A. is distinguished by the amount of energy it uses.

B. has 500 or more employees.

C. deals exclusively with federal, state, and local governments.

D. in some way reprocesses a good or service it buys before selling the product again to the next buyer.

E. is most likely to operate a factory.

17. A firm that reprocesses a good or service it buys before selling the product again to the next buyer is referred to as a(n)

A. industrial firm.

B. reseller firm.

C. government agency.

D. wholesaler.

E. retailer.

18. Mining companies, farms, financial services, and fisheries are all examples of

A. consumer markets.

B. cooperative markets.

C. reseller markets.

D. industrial markets.

E. government markets.

19. Which of the following is an industrial firm within the set of firms that comprise the industrial market?

A. retailing

B. mining

C. finance

D. government

E. dry cleaning

20. The highest percentage of firms in industrial markets are classified as

A. manufacturing firms.

B. construction firms.

C. agricultural firms.

D. mining companies.

E. service firms.

21. Which of the following is a service business within the set of firms that comprise the industrial market?

A. retailing

B. mining

C. finance

D. government

E. farming

22. Archer Daniels Midland Co. is the world's largest cocoa-bean processor. It buys cocoa beans and converts them into cocoa powder and cocoa butter, which it sells to companies that manufacture consumer products that contain chocolate. The cocoa-bean processor is operating in a(n) __________ market.

A. consumer

B. government

C. service

D. reseller

E. industrial

23. Mile High Frozen Foods is a distributor for McDonalds. It also bakes the buns used by McDonalds in several states. It purchases flour, yeast, and sesame seeds, manufactures the buns, and then distributes them to McDonalds' stores. Mile High Frozen Foods is operating in a(n) __________ market.

A. consumer

B. government

C. industrial

D. service

E. reseller

24. Graham-Field Health Products makes hospital beds and wheelchairs from the component parts and materials it buys. It sells these manufactured products to hospitals, nursing homes, and retailers of health care products. Graham-Field Health Products operates in a(n) __________ market.

A. consumer

B. government

C. industrial

D. service

E. reseller

25. Wholesalers and retailers that buy physical products and resell them without any reprocessing are

A. industrial firms.

B. reseller firms.

C. government firms.

D. consumer product firms.

E. non-profit firms.

26. The reseller market includes

A. manufacturers and service providers.

B. transportation providers and other facilitators.

C. government agencies and service providers.

D. agricultural markets and the mining industry.

E. retailers and wholesalers.

27. Itex Corporation, a marketer of Photostat products used in the graphic arts field, buys sensitized paper from Eastman Kodak Company, packages it with the Photostat brand name, and sells it directly to amateur photographers. In this context, Itex Corporation is most accurately classified as a

A. manufacturer.

B. reseller.

C. service provider.

D. wholesaler.

E. industrial firm.

28. Apex Therapeutic buys medical supplies and services from a multitude of sources for people with hemophilia and other related blood diseases. It then sells these products to anyone who needs them. When it sells directly to a person who is a hemophiliac, it would most accurately be classified as a(n) _________.

A. service provider

B. manufacturer

C. reseller

D. industrial firm

E. wholesaler

29. In terms of organizational buyers, Amazon.com, Lands' End, and JCPenney would all be classified as _________.

A. government units

B. resellers

C. manufacturers

D. wholesalers

E. industrial firms

30. Federal, state, and local agencies that buy goods and services for the constituents they serve are referred to as

A. industrial markets.

B. reseller markets.

C. consumer markets.

D. government units.

E. global markets.

31. When Louisiana State University buys new laptops for its faculty, it is operating as a(n)

A. industrial market.

B. business market.

C. government unit.

D. consumer market.

E. service provider.

32. When the Federal Aviation Administration purchases 3,000 computerized workstations for 22 major air traffic control centers in the U.S., it is operating as a(n)

A. industrial market.

B. business market.

C. government unit.

D. consumer market.

E. service provider.

33. International trade statistics indicate the largest exporting industries in the United States focus on _________, not _________.

A. organizational customers; ultimate consumers

B. ultimate consumers; organizational consumers

C. governmental agencies; ultimate consumers

D. governmental agencies; organizational consumers

E. ultimate consumers; governmental agencies

34. U.S.-based Pratt & Whitney sells aircraft engines to Europe's Airbus S.A.S., which sells passenger airplanes to Japan Airlines that flies businesspeople around the world. This is an example of

A. product life cycle.

B. reseller dynamics.

C. global organizational markets.

D. organizational clusters.

E. market elasticity principles.

35. Amtrak, the U.S. passenger train service, purchases train cars from Siemens, a German manufacturing company. This purchase is an example of

A. the circular flow of products.

B. market dynamics.

C. global organizational markets.

D. organizational clusters.

E. market elasticity principles.

36. U.S.-based Pratt and Whitney manufactures the liquid hydrogen-fueled rocket engine used in the Atlas, Titan, and Delta launch vehicles made by Lockheed-Martin and Boeing. These rockets are then sold to space agencies of many countries for use in deploying communication and weather satellites. These transactions are examples of

A. the circular flow of products.

B. market dynamics.

C. global organizational markets.

D. organizational clusters.

E. market elasticity principles.

37. The system that provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA) is referred to as the

A. Standard Industrial Code System (SICS).

B. United Nations Central Product Classification System (UNCPCS).

C. Free Trade Classification System (FTCS).

D. North American Industry Classification System (NAICS).

E. Federated System of International Organizations (FSIO).

38. North American Industry Classification System (NAICS) refers to

A. the system that provides common industry definitions for North America, Central America, and South America, which makes it easier to measure economic activity in the three Western Hemispheric areas involved.

B. the system that provides common industry definitions between Canada the United States, which makes it easier to measure economic activity and reduce barriers of trade for cross-border firms.

C. the system that provides a classification system for products and services that is consistent across Canada, Mexico, and the United States.

D. the system that provides common industry definitions between Canada the United States, which makes it easier to measure economic activity and reduces barriers of trade for pharmaceuticals.

E. the system that provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA).

39. The North American Industry Classification System (NAICS) provides common industry definitions to facilitate the measurement of economic activity for the members of the

A. European Union (EU).

B. United Nations (UN).

C. North American Free Trade Agreement (NAFTA).

D. North Atlantic Treaty Organization (NATO).

E. USCANMEX.

Figure 6-1

40. Consider Figure 6-1 above. The acronym on the NAICS logo stands for

A. National Association of Industrial Compliance Standards

B. National Association of Industrial Communication Systems

C. North American Industrial Computer Standards

D. North American Industry Classification System

E. North Atlantic Industrial Classification System

41. The International Standard Industrial Classification of All Economic Activities is published by the __________ to facilitate global economic activity.

A. European Union (EU)

B. International Standards Organization (ISO)

C. North American Free Trade Agreement (NAFTA)

D. North American Product Classification System (NAPCS)

E. United Nations (UN)

42. Which of the following statements about the North American Industry Classification System (NAICS) is most accurate?

A. After being used more than 50 years, the NAICS was replaced by the Standard Industrial Classification (SIC system).

B. The NAICS permits comparability across countries but does not accurately measure new or emerging industries.

C. One drawback to NAICS is that its industry classifications are inconsistent with the International Standards Organization.

D. The NAICS groups economic activity to permit studies of market share, demand for goods and services, import competition in domestic markets, and similar studies.

E. The NAICS is a five-digit code that allows comparison of industries even when information is limited.

Figure 6-2

43. According to Figure 6-2 above, what is the industry sector represented by NAICS code 51?

A. manufacturing

B. fisheries

C. information

D. publishing

E. retailing

44. According to Figure 6-2 above, what is the NAICS code for cable and other subscription programming?

A. 511

B. 5152

C. 51512

D. 51520

E. 511515

45. The North American Industry Classification System (NAICS) permits a firm to

A. find the NAICS codes of its present customers and then obtain NAICS-coded lists for similar firms.

B. learn the names of the purchasing agents of all prospective customers.

C. sell to any company within North America as long as it is not a monopoly.

D. engage in benchmarking with companies manufacturing and/or marketing similar products.

E. conduct an industry-wide SWOT analysis to determine internal strengths and weaknesses of current and prospective competitors.

46. A disadvantage of the North American Industry Classification System (NAICS) systems is that

A. it only lists the top ten firms in any particular industry.

B. it is too difficult and confusing to read.

C. it only covers organizations with sales in excess of (US) $1 million.

D. it makes it possible to find how the firm's customers are coded.

E. five-digit national industry codes are not always available for all three countries.

47. Unfortunately, the NAICS system will not allow marketing managers to gather information about

A. import competition in domestic markets.

B. geographic distribution of industries.

C. market share in a pure competition environments.

D. demand for goods and services.

E. data on industries that are oligopolies.

48. You are the research director of a major marketing research consulting firm. You need to select an NAICS code that gives you the most detail about the competitors in a client's industry. Which of the following levels of classification would provide the greatest detail?

A. Code 512

B. Code 5175

C. Code 51721

D. Code 517212

E. Code 5172122

49. How might a marketing manager for a manufacturer of turboprop engines used in private jet planes use the NAICS to help with her marketing planning?

A. She could record the NAICS numbers for each of her firm's best customers and then obtain lists of companies with the same NAICS numbers.

B. She could go to a library and find the NAICS numbers for all government units—federal, state, and local.

C. She could identify all NAICS numbers that reflect the classifications of her firm's customers and compare them to previous SIC codes.

D. She could poll her field sales organization to see if her company's sales representatives know what NAICS numbers mean.

E. She could forgo using the NAICS system because it is a dated concept that has no current usefulness.

50. The demand for industrial products and services that is driven by demand for consumer products and services is referred to as

A. derivative marketing.

B. derived demand.

C. reciprocal marketing.

D. demand elasticity.

E. sequential demand.

51. Derived demand refers to

A. the demand for consumer products and services that is driven by excess inventory of manufacturers, distributors, or suppliers.

B. the demand for industrial products and services that is driven by demand for consumer products and services.

C. the formula used to determine the greatest number of potential buyers based upon the lowest price they would be willing to pay.

D. the point on a demand curve where supply and demand intersect.

E. the formula used to determine which element of the marketing mix has the greatest impact on increases or decreases in demand.

52. Derived demand means the demand for industrial products and services is driven by, or derived, from the

A. NAICS statistical models.

B. gross national product.

C. demand for consumer goods and services.

D. demand for industrial goods and services.

E. demand for government goods and services.

53. During late summer and early fall, there is a large demand for containers located in Asia that are used to ship consumer goods from Asia to the United States in time for the holiday selling season. The demand for these containers is referred to as __________ demand.

A. unitized

B. derived

C. consumer

D. applied

E. implied

54. Spruceland Millworks in Canada makes wooden pallets for transporting and storing new appliances such as stoves, freezers, and refrigerators. The demand for Spruceland pallets would be classified as

A. reactive demand, which is tied to the sales of appliances, not the sale of the pallets.

B. derived demand, which is tied to the sales of appliances, but independent of the sales of pallets.

C. derived demand, which is tied to the sales of pallets, which in turn, is tied to the sales of appliances.

D. inelastic demand, which is tied to the cost of the components of the pallets.

E. elastic demand, which is tied to the cost of the components of the pallets.

55. Concert Staging Company provides the stage, the roof system, and the lighting and sound for outdoor concerts and theaters. It is typically hired by the organization sponsoring the event. When the economy slows down, consumers are more likely to save their money for a rainy day rather than buy a concert or theater ticket. The number of concert and theater events determines how many times the company gets to provide its services. Demand for the services provided by Concert Staging Company is a result of __________ demand.

A. derived

B. unitized

C. industrial

D. applied

E. consumer

56. Purchases of sodium fluoride by Procter & Gamble for use in the manufacture of Crest toothpaste would be an example of __________ demand.

A. applied

B. unitized

C. industrial

D. derived

E. consumer

57. If there is a downturn in U.S. passenger air travel, a number of U.S. airlines would very likely cancel some of their orders for new planes. The relationship between passenger air travel and the need for new planes is referred to as

A. consumer demand.

B. derived demand.

C. manufacturer demand.

D. reseller demand.

E. price-inelasticity of demand.

58. Which of the following statements about organizational buying compared to consumer buying is most accurate?

A. Perceived risk is lower in organizational buying.

B. Brand loyalty exists in both organizational and consumer buying.

C. More organizational buying decisions are lower in involvement.

D. Organizational buyers are more influenced by lifestyle factors.

E. Derived demand is more important in consumer buying.

59. Which of the following possible characteristics of consumer buying decisions is least likely to enter into an organizational buying decision?

A. comparison of product performance with expectations

B. purchase decisions based on the highest overall evaluation

C. alternatives evaluated on important criteria

D. information gathered from internal and external searches

E. problem recognition triggered by self-actualization motives

60. In the organizational buying process, important product or service characteristics include: multiple buying influences, a predominance of raw and semi-finished goods, and

A. delivery time, technical assistance, and postsale service.

B. low price, buyer incentives, and extended contracts.

C. buyer incentives, technical assistance, and exclusive contracts.

D. quantity discounts, delivery time, and exclusive contracts.

E. low price, buyer incentives, and post-sale service.

61. Important market characteristics in organizational buying behavior include which of the following?

A. unlimited markets but orders are becoming progressively smaller.

B. diminishing international opportunities as more firms enter the market.

C. more customers placing progressively larger orders.

D. fewer customers but with larger orders.

E. a market that functions independently of consumer demand.

62. Important product or service characteristics in organizational buying behavior include which of the following?

A. a heavy emphasis on quantity price discounts, extended contracts, and customer loyalty.

B. a heavy emphasis placed on delivery time, technical assistance, and post-sale service.

C. flexibility with delivery schedules, technical assistance, and renewable contracts.

D. market sensitive pricing, sales incentives, and postsale service.

E. flexibility with product specifications, limited liability, and adherence to government regulations.

63. Important buying process characteristics in organizational buying behavior include which of the following?

A. few large transactions are made over the Internet due to concerns of industrial espionage.

B. there are often reciprocal arrangements and negotiations between buyers and sellers.

C. negotiations, purchases, and delivery occur in real time at an accelerated rate.

D. most purchases are made through government-licensed negotiators.

E. sellers, rather than the buyers, are responsible for post-purchase evaluation of their goods or services.

64. Important marketing mix characteristics in organizational buying behavior include which of the following?

A. few large transactions are made over the Internet due to concerns of industrial espionage.

B. products must be easily adaptable in form and function to accommodate consumer tastes.

C. negotiations, purchases, and delivery occur in real time at an accelerated rate.

D. direct selling to organizational buyers is the rule, and distribution is very important.

E. sellers rather than buyers, are responsible for post-purchase evaluation of their goods or services.

65. Which of the following statements accurately characterizes buying behavior in organizational markets?

A. Organizational buying behavior is similar to consumer buying behavior since individuals are involved in both processes.

B. Demand for industrial products is elastic instead of inelastic or derived because companies, not ultimate consumers, determine the quantity of goods produced.

C. Fewer customers typically exist in organizational markets than in consumer markets.

D. Purchase orders much more frequent but they are usually small.

E. Forecasting is not as important in organizational buying as in consumer buying.

66. Because orders in organizational buying are typically much larger than in consumer buying, buyers must often __________ when the order is above a specific amount, such as $5,000.

A. pay taxes in advance

B. bond and insure their employees

C. get competitive bids from at least three prospective suppliers

D. forgo the purchase

E. carry insurance to cover possible losses due to shrinkage

67. Firms selling consumer goods or services often try to reach thousands or millions of individuals or households. Firms selling to organizations are often

A. inclined to try to reach tens of millions.

B. restricted to far fewer buyers.

C. hoping to obtain similar numbers of non-consumer customers.

D. restricted by government regulations to only a few industrial categories.

E. simultaneously purchasing from organizational buyers and ultimate consumers.

68. An organization buys products and services for one main reason: to

A. achieve its objectives.

B. beat its competitors.

C. help smaller companies stay in business.

D. increase the proficiency of its buyers.

E. balance inventory.

69. The primary buying objective for business firms is usually to

A. increase profits through increasing costs and increasing revenues.

B. increase profits through reducing costs and decreasing revenues.

C. increase profits through reducing costs or increasing revenues.

D. maintain profits through reducing costs and increasing revenues.

E. reduce profits through reducing costs and reducing revenues.

70. Many companies have broadened their buying objectives to include an emphasis on

A. purchasing from as many vendors as possible to avoid product shortfalls.

B. purchasing locally made products even if they are less cost efficient.

C. diversifying their product lines to include seemingly non-compatible items.

D. purchasing products from fair trade firms around the world who practice microfinancing.

E. proactively purchasing from minority-and women-owned suppliers and vendors.

71. The primary reason companies have placed an emphasis on buying from minority- and women-owned suppliers and vendors is

A. new government regulations require it.

B. it is the socially responsible thing to do.

C. it can attract new customer target markets.

D. these companies will work harder for less.

E. they can help a firm meet its objectives in sales, profits, and/or customer satisfaction.

72. The objective attributes of the supplier's products and services and the capabilities of the supplier itself are collectively referred to as

A. supplier consideration set.

B. derived demand factors.

C. evaluative criteria.

D. performance metrics.

E. organizational buying criteria.

73. Organizational buying criteria refer to

A. the specific qualifications of a potential supplier based upon price, delivery time, and product availability.

B. the specific qualifications of a potential supplier based upon past performance, reliability, and consistency.

C. the subjective attributes of the supplier's products and services and the capabilities of the supplier itself.

D. the objective attributes of the supplier's products and services and the capabilities of the supplier itself.

E. the need of suppliers to become qualified bidders by adhering to all written specifications, in a timely manner, and in compliance with government regulation.

74. Organizational buying criteria serve the same purpose as __________ criteria used by consumers.

A. consideration

B. evaluative

C. decision

D. alternative

E. pre-purchase

75. There are seven commonly used organizational buying criteria. One of them is _________.

A. price

B. loyalty

C. flexibility

D. adaptability

E. consumer demand

76. There are seven commonly used organizational buying criteria. One of them is _________.

A. flexibility and adaptability

B. ability to meet the quality specifications required for the item

C. adherence to governmental policies

D. senior management directives

E. consumer demand

77. There are seven commonly used organizational buying criteria. One of them is _________.

A. flexibility and adaptability

B. ability to meet required delivery schedules

C. consumer demand

D. senior management directives

E. adherence to governmental policies

78. There are seven commonly used organizational buying criteria. One of them is _________.

A. consumer demand

B. flexibility and adaptability

C. technical capability

D. promotional incentives

E. senior management directives

79. There are seven commonly used organizational buying criteria. One of them is _________.

A. consumer demand

B. promotional incentives

C. warranties and claim policies

D. current mood of the buyer

E. senior management directives

80. There are seven commonly used organizational buying criteria. One of them is _________.

A. adherence to governmental policies

B. flexibility and adaptability

C. past performance on previous contracts

D. consumer demand

E. senior management directives

81. There are seven commonly used organizational buying criteria. One of them is _________.

A. consumer demand

B. flexibility and adaptability

C. production facilities and capacity

D. adherence to government policies

E. senior management directives

82. Many industrial buyers for manufacturing firms place great importance on delivery time because they often rely on a just-in-time inventory system. This system has increased the importance of which organizational buying criterion?

A. low prices

B. high quality

C. on-time delivery

D. customer service and follow-up

E. inexpensive truck-driver labor

83. To be a Walmart supplier, a firm must be able to deliver its products to Walmart distribution centers within a 15-minute window. If the driver arrives before or after the scheduled window, the supplier will be turned away and fined. Walmart's insistence of choosing a supplier based upon its ability to provide on-time delivery is an example of a(n)

A. supplier value dimension.

B. derived demand factor.

C. evaluative criterion.

D. external performance measure.

E. organizational buying criterion.

84. Standards for registration and certification of a manufacturer's quality management and assurance system based on an on-site audit of practices and procedures developed by the International Standards Organization are referred to as

A. ISO 14000

B. ICC 9000

C. IS0 9000

D. Compliance 2000

E. Consistency codes

85. ISO 9000 refers to

A. standards for registration and certification of a manufacturer's quality management and assurance system developed by the U.S. Department of Trade in order for firms to qualify for tax exemptions.

B. the International Safety Organization responsible for establishing international guidelines for products designed for or relating to children.

C. the International Safety Organization responsible for establishing international guidelines for products used in the manufacturing and distribution of products across national boundaries.

D. standards for registration and certification of a manufacturer's quality management and assurance system based on an on-site audit of practices and procedures developed by the International Standards Organization.

E. the 9000 major product and industry classifications used in the Central Product Classification System of the United Nations.

86. The primary purpose of ISO 9000 standards is to

A. determine if a company can be classified as a green marketer.

B. create standards for registration and certification of a manufacturer's quality management and assurance system.

C. govern what constitutes legal economic espionage in an international marketplace.

D. set the communication interfaces between computer networks for the sharing of data.

E. establish an international code of ethics.

87. 3M has over 80 percent of its worldwide manufacturing and service facilities that are ISO 9000 certified. This certification gives 3M confidence that

A. its suppliers' manufacturing systems and products is of consistent quality as well.

B. the suppliers will always fill 3M orders before those of other buyers.

C. the suppliers will not sell any of their products to 3M competitors.

D. supplier representatives will attend all appropriate 3M training sessions.

E. 3M will be financially compensated for any orders that fail to meet assigned criteria.

88. An international company that wants indisputable proof that its suppliers maintain a high level of quality management could ask the company to

A. apply for an ISO 9000 certification.

B. allow its engineers to study all of the supplier's proprietary information before establishing any formal relationship.

C. enter a tying arrangement in which it only sells to one customer—the international one.

D. show how it is listed in the NAICS to prove its quality focus.

E. to sign a binding contract to meet all quality specifications without an escape clause.

89. The deliberate effort by organizational buyers to build relationships that shape suppliers' products, services, and capabilities to fit a buyer's needs and those of its customers is referred to as

A. buyer development.

B. organizational development.

C. relational organization.

D. supplier development.

E. buyer-seller reciprocity.

90. Supplier development refers to

A. the deliberate effort by suppliers to build relationships that shape buyers' products, services, and capabilities to fit both the buyer's and seller's needs, as well as the needs of ultimate consumers.

B. the practice of dividing up large orders amongst a number of suppliers rather than only one, to avoid possible delays due to environmental forces such as bad weather, plant mishaps, union issues, etc.

C. the practice of establishing a close relationship with one supplier rather than many to insure loyalty and preferred treatment when filling exceptionally large orders.

D. the deliberate effort by organizational buyers to build relationships that shape suppliers' products, services, and capabilities to fit a buyer's needs and those of its customers.

E. the shift of a firm from that of supplier to manufacturer when repeated experience with a product and excellent buyer/seller relationships make the shift both more feasible and profitable.

91. When the John Deere Company employs 94 engineers who work full-time with the company's suppliers to improve their efficiency and quality and reduce their costs, it is practicing

A. buyer development.

B. organizational development.

C. relational organization skills.

D. supplier development.

E. directive purchasing.

92. Harley-Davidson is admired by its suppliers for involving suppliers in future products, referring to suppliers as stakeholders, using quality benchmarks, and

A. building long-term relationships.

B. signing lifetime contracts to demonstrate loyalty.

C. offering its products at cost for all key supplier personnel.

D. listing the names of all suppliers on its Harley-Davidson promotional material.

E. extending Harley-Davidson healthcare benefits to its suppliers' employees.

93. Harley-Davidson is admired by its suppliers because it

A. has its own financial fund making it unnecessary for suppliers to seek outside credit for purchases.

B. will purchase surplus goods in order for suppliers to take advantage of economies of scale.

C. tells them exactly what to do and the suppliers simply follow directions.

D. builds long-term relationships with its suppliers.

E. does not require suppliers to participate in planning and development.

94. Which of the following characterizes organizational buyer-seller relationships?

A. Purchases are often made after lengthy or complex negotiations.

B. Purchases are usually of small dollar values.

C. Short-term contracts are often prevalent.

D. Reciprocal arrangements never exist.

E. Delivery schedules are less important than production capacity.

95. Which of the following characterizes organizational buyer-seller relationships?

A. Purchases are often made after brief negotiations.

B. Purchases are usually of small dollar values.

C. Long-term contracts are often prevalent.

D. Reciprocal arrangements never exist.

E. Delivery schedules are largely irrelevant.

96. Which of the following characterizes organizational buyer-seller relationships?

A. Purchases are often made after brief negotiations.

B. Purchases are usually of large dollar values.

C. Short-term contracts are often prevalent.

D. Reciprocal arrangements rarely exist.

E. Delivery schedules are less important than production capacity.

97. The existence of reciprocal arrangements, long-term contracts, and in some cases, buyer-seller relationships that evolve into supply partnerships, are all examples of

A. illegal activities that are a common weakness of organizational buying.

B. illegal activities that result from collusion between buyers and sellers.

C. activities that are strictly governed by the NAICS.

D. activities that can result from relationships between buyers and sellers in organizational buying.

E. activities that result from extreme competition between manufacturers when there are too few sellers.

98. Merrill Lynch and Thompson Financial are two years into a three-year, $1 billion project that will put workstations on the desks of 25,000 of Merrill Lynch's brokers. These machines will put the world of investing information at the broker's fingertips. Thompson, the supplier, is obligated not only to deliver technology and services on time and on budget, but to constantly improve customer-satisfaction levels among Merrill's brokers and end customers. This is an example of

A. reciprocity.

B. exclusive dealing.

C. review marketing.

D. a long-term buyer-seller relationship.

E. a tying arrangement.

99. An industrial buying practice in which two organizations agree to purchase each other's products and services is referred to as _________.

A. a tying arrangement

B. exclusive dealing

C. reciprocity

D. transactional marketing

E. noncompetitive bidding

100.Reciprocity refers to

A. the illegal practice of refusing to purchase a seller's products unless the seller agrees to purchase the buyer's products as well.

B. the illegal practice of refusing to purchase a seller's products unless the seller agrees not to sell that product or any similar products to the buyer's competitors.

C. the illegal practice of refusing to purchase a seller's products unless the seller agrees not to purchase that product or any similar products from any other buyer.

D. an industrial buying practice in which two organizations agree to purchase each other's products and services.

E. when a supplier requires a buyer purchasing some products from it to also buy others.

101.This practice, which can affect the natural flow of the free market, is occasionally addressed in the ethics codes of companies or their purchasing policies.

A. tying agreements

B. just-in-time management

C. quid pro quo

D. transactional benefits

E. reciprocity

102.Although not strictly illegal, the U.S. Justice Department frowns on reciprocity because it

A. gives an unfair advantage to smaller companies.

B. gives an unfair advantage to larger corporations.

C. reduces the amount of taxes paid by the parties involved.

D. restricts the normal operation of the free market.

E. encourages free trade.

103. Although the U.S. Justice Department frowns on __________ because it restricts the normal operation of a free market, it is still legal for two companies to buy one another's products as long as no coercion is involved.

A. tying agreements

B. just-in-time management

C. quid pro quo

D. transactional benefits

E. reciprocity

104.A study on ethical practices in purchasing found that smaller firms frequently make agreements with other organizations to purchase each other's goods and services. This practice is referred to as

A. exclusive dealing.

B. review marketing.

C. Reciprocity.

D. transactional relationships.

E. tying arrangements.

105.If General Motors (GM) purchases Borg-Warner transmissions, and Borg-Warner buys trucks and cars from GM, they would be demonstrating which type of buyer-seller interaction?

A. exclusive dealing

B. relationship marketing

C. reciprocity

D. tying arrangements

E. noncompetitive bidding

106.A __________ exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost of and/or increasing the value of goods and services delivered to the ultimate customer.

A. binding partnership

B. company partnership

C. restricted relationship

D. supply partnership

E. symbiotic partnership

107.A relationship that exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost of and/or increasing the value of goods and services delivered to the ultimate customer is referred to as a _________.

A. binding partnership

B. channel partnership

C. restricted relationship

D. supply partnership

E. symbiotic partnership

108.Supply partnership refers to

A. an agreement between a manufacturer and a supplier that precludes the purchase of any similar products to other manufacturers.

B. an agreement between a supplier and a manufacturer that precludes the purchase of any similar products from other suppliers.

C. a manufacturing firm that actually holds title to the raw materials (mines) or processing plants (smelting plants) although the actual operation of that facility is independent of the firm.

D. a relationship that exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost of and/or increasing the value of goods and services delivered to the ultimate customer.

E. an illegal partnership amongst suppliers to control prices that are charged to their customers - a form of price fixing and manipulation.

109.A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of

A. putting competitors of both parties out of business.

B. lowering costs and increasing profits.

C. lowering costs or increasing value of products or services to the ultimate consumer.

D. creating a single channel of distribution.

E. creating an exclusionary relationship from all other buyers and sellers.

110.Sun Microelectronics custom orders processors, chips, and circuit boards for its products. Sun doesn't actually make any of its microelectronic gear itself. Sun contracts the work to outside manufacturers, who in turn rely on components from their own subcontracted suppliers. The 150 suppliers involved in making and delivering Sun products have adopted mutually beneficial objectives and strategies that give Sun's customers value for their money. Sun's method of doing business is an example of a

A. symbiotic partnership.

B. a legal but unethical partnership.

C. manufacturer-dominated relationship.

D. supply partnership.

E. supplier-dominated relationship.

111.Because more and more companies are concerned with the depletion of natural resources, supply partnerships often include provisions for

A. government tax exemptions.

B. regulatory exemptions.

C. purchase credits.

D. environmental waivers.

E. sustainable procurement.

112.The group of people within an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision is referred to as the

A. gatekeepers.

B. buying center.

C. purchasing department.

D. procurement committee.

E. acquisition office.

113.A buying center refers to

A. a centralized location for large national or international firms that allows purchases to be made from multiple vendors at the same time.

B. the department within a firm responsible for the logistics of placing, tracking, and delivering orders to other departments within the firm.

C. the department within a firm responsible for the logistics of placing, tracking, and delivering orders to ultimate consumers.

D. the group of people within an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision.

E. the department within a firm that allows purchases to be made from a centralized location from multiple vendors at the same time.

114.The term __________ is used to identify a group of people within an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision.

A. procurement committee

B. purchasing department

C. buying center

D. gatekeepers

E. acquisition office

115.Several people often participate in the organizational buying process. Called _________, these people share common goals, risks, and knowledge important to a purchase decision.

A. a buying center

B. a buying cohort

C. a procurement committee

D. a feasibility study group

E. a purchasing department

116.Large multistore chain retailers such as Sears, Safeway, and Target use a highly formalized buying center referred to as a(n)

A. ad hoc committee.

B. buying committee.

C. central control unit.

D. purchasing department.

E. purchasing control system.

117.Marketers need to understand their firms' buying centers. A series of questions can be used to facilitate this process. Which of the following questions would be the least useful when trying to understand the operations of a buying center?

A. Which individuals are in the buying center for the product or service?

B. What is the relative influence of each member of the group?

C. What are the buying criteria of each member?

D. How does each member of the group perceive our firm, our products and services, and our

salespeople?

E. What selection process was used to confirm membership in the buying center?

118.In an effort to make better and more efficient purchase decisions, the Ford Motor Company forms loosely organized groups of people who work together on purchase decisions. The people included in these groups change depending on the purchase situation and may include key personnel from various departments, including research and development, finance, marketing, shipping, and sales. Such a loosely organized group of people within an organization who are involved in the purchase decision is correctly called an organizational

A. selling committee.

B. functional unit.

C. purchasing unit.

D. buying center.

E. decision-making unit.

119.Which of the following statements accurately describe the people in the buying center of a medium-sized manufacturing plant?

A. The composition of the buying center never changes.

B. The buying center avoids cross-functional teams if possible.

C. The composition of the buying center depends on the specific item being purchased.

D. The key difference between large and medium firms' buying centers is that medium sized firms do not include an organizational buyer or purchasing agent.

E. Cross-functional teams are not used when the purchased item is to become part of a manufactured product.

120.To lower costs and reduce manufacturing time, Michelin has people work together on important purchases. These people include individuals in the roles of buyers, deciders, gatekeepers, and others, as needed. This type of cross-functional group is known as a(n)

A. purchasing committee.

B. negotiating panel.

C. buying center.

D. supply partnership.

E. purchasing task force.

121.The people in the organization who actually use the product or service are referred to as _________.

A. gatekeepers

B. deciders

C. buyers

D. influencers

E. users

122.As the salesperson for West Plains Band Saw talked to a group from Conner Industries, he overheard one of the men on the production line saying, "This band saw has a 36-inch wheel that could really save us time, and with its adjustable height, it can be operated by someone tall like me and by some of our shorter workers. I bet this will speed up production time by 30 percent. Why don't we order this band saw?" The person the salesperson heard giving input has which buying center role?

A. purchasing agent

B. decider

C. buyer

D. motivator

E. user

123.In a buying center, __________ affect the buying decision, usually by helping define the specifications for what is bought.

A. gatekeepers

B. deciders

C. buyers

D. influencers

E. users

124.Within the buying center, influencers are people who

A. have the formal authority and responsibility to select the supplier and negotiate the terms of the contract.

B. control the flow of information in the buying center.

C. have the formal or informal power to select or approve the supplier that receives the contract.

D. affect the buying decision usually by helping define the specifications for what is bought.

E. actually use and evaluate the product or service.

125.A computer company salesperson invites the IT managers of its top ten customers (in terms of dollar sales) to view a demonstration of the firm's new product line so she can obtain their opinions regarding various options and configurations that could be offered. These IT managers are most likely to be the __________ of their organizations' buying centers.

A. gatekeepers

B. reciprocity managers

C. buyers

D. influencers

E. users

126.In a buying center, __________ have formal authority and responsibility to select the supplier and negotiate the terms of a contract.

A. gatekeepers

B. deciders

C. buyers

D. influencers

E. users

127.The people in the buying center who have the authority to select a supplier and negotiate the terms of the contract are referred to as

A. gatekeepers.

B. deciders.

C. buyers.

D. influencers.

E. users.

128.The purchasing manager of Ingram Printing has selected IBM as the supplier of its new high-speed printer and negotiated the terms of the contract. The purchasing manager is the __________ for

Ingram.

A. user

B. gatekeeper

C. influencer

D. buyer

E. decider

129.The person who assumed the __________ role in the buying center shook the salesperson's hand and said, "Ms. Hron, my manager has accepted your bid. I'll expect 48 boxes of ring shank nails to be delivered by November 8th, and we will pay the agreed-upon price of $21.74 per box."

A. gatekeeper

B. broker

C. buyer

D. influencer

E. user

130.In a buying center, __________ have the formal or informal power to select or approve the supplier that receives the contract.

A. gatekeepers

B. deciders

C. buyers

D. influencers

E. users

131.Within the buying center, deciders are people who

A. have the formal authority and responsibility to select the supplier and negotiate the terms of the contract.

B. control the flow of information in the buying center.

C. have the formal or informal power to select or approve the supplier that receives the contract.

D. the buying decision usually by helping define the specifications for what is bought.

E. actually use and evaluate the product or service.

132.An IT engineer specifies the type of plug-in to be used on her company's new Web site. She also chooses the supplier who receives the contract to provide the software. In the buying center, this person is the _________.

A. gatekeeper

B. decider

C. broker

D. influencer

E. user

133.People who control the flow of information in the buying center, such as technical experts and secretaries, can keep sales people and information from reaching others in the buying center and are referred to as _________.

A. deciders

B. obstructionists

C. gatekeepers

D. power-brokers

E. influencers

134.A sales representative for a pharmaceutical company visits the doctor's office, hoping to explain a new drug to her. However, the office receptionist explains that the doctor is with patients and will not be able to see the sales rep. The receptionist is acting as a(n) _________.

A. user

B. influencer

C. buyer

D. decider

E. gatekeeper

135.June Golden is part of the buying center for a large manufacturer. Her field of expertise is logistics and she is responsible for choosing transportation providers for the company. A sales representative for Yellow Roadway (a very large trucking firm) regularly buys June's secretary lunch. The representative does this because he views the secretary as a(n) __________ and he wants to be sure that information about his company reaches June.

A. gatekeeper

B. decider

C. influencer

D. obstructionist

E. power-broker

136.June Golden is part of the buying center for a large manufacturer. Her field of expertise is logistics and she is responsible for choosing transportation providers for the company. A sales representative for Yellow Roadway (a very large trucking firm) calls on June, however her secretary thinks he is quite rude and announces that June is not available. The secretary is acting in the role of __________ for the buying center.

A. gatekeeper

B. decider

C. buyer

D. influencer

E. user

137.Mark manages a small family-owned amusement park. He believes the park can increase its profits if its owners will buy three food concession trailers. He has contacted three dealers of such trailers, which come fully customized to user specifications, and has determined Century Industries has the best price. He will present only the Century Industries information to the family tomorrow. What buying center roles does Mark perform?

A. gatekeeper and buyer

B. decider and gatekeeper

C. buyer and decider

D. influencer and buyer

E. influencer, gatekeeper, and decider

138.Researchers who have studied organizational buying identify three types of buying situations that are referred to as

A. purchase criteria.

B. buy classes.

C. buying alternatives.

D. purchase prioritization.

E. purchase hierarchy.

139.Organizations face three kinds of specific buying situations. They are new buy, straight rebuy, and modified rebuy. Collectively, these situations are referred to as

A. industrial buying behavior.

B. reseller buying behavior.

C. buy classes.

D. purchasing classes.

E. purchase prioritization.

140.The three types of organizational buy classes are

A. industrial, reseller, and government.

B. consumer goods, industrial goods, and services.

C. users, influencers, and deciders.

D. new buy, make-buy, and modified rebuy.

E. straight rebuy, new buy, and modified rebuy.

141.Buy classes refer to the three types of organizational buying situations:

A. buy, lease, and rent.

B. new buy, make-buy, and modified rebuy.

C. manufacturing contracts, consulting contracts, service contracts.

D. straight rebuy, new buy, and modified rebuy.

E. new buy, remake, and used buy.

142.The buying situation where an organization is a first-time buyer of the product or service is referred to as a

A. buy class.

B. new buy.

C. make-buy.

D. straight rebuy.

E. modified rebuy.

143.A buy class situation affects buying center tendencies in different ways. If there are many people involved, the problem definition is uncertain and the time required for a decision is long, the buy class situation which is most likely is a

A. standard buy.

B. straight rebuy.

C. conditional rebuy.

D. modified rebuy.

E. new buy.

144.A buy class situation affects buying center tendencies in different ways. If there are many people involved, the problem definition is uncertain, and the buying objective is to find a good solution, the buy class situation which is most likely is a

A. modified buy.

B. straight rebuy.

C. conditional rebuy.

D. new rebuy.       

E. standard buy.

145.A buy class situation affects buying center tendencies in different ways. If there are many people involved, the problem definition is uncertain, and the buying influence comes from technical or operating personnel, the buy class situation which is most likely is a

A. conditional buy.

B. straight rebuy.

C. new rebuy.

D. modified rebuy.

E. standard buy.

146.A buy class situation affects buying center tendencies in different ways. If there are many people involved, both new and present suppliers are considered, and the buying objective is a good solution, the buy class situation which is most likely is a

A. modified buy.

B. new rebuy.

C. straight rebuy.

D. make-buy.

E. standard buy.

147.If a purchase is a new buy for a manufacturer, the seller should be prepared to act as a consultant to the buyer, work with technical personnel, and

A. expect a long time for a buying decision to be reached.

B. neutralize a lot of conflict.

C. expect specifications to be changed several times before the buy is completed.

D. expect to have to do some favors for the decision makers.

E. avoid making concessions or compromises.

148.If a purchase is a new buy for a manufacturer, the seller should be prepared to act as a consultant to the buyer, expect a long time for a buying decision to be reached, and

A. expect to have to do some favors for the decision makers.

B. anticipate a great deal of conflict.

C. accommodate unlimited specification change before the buy is completed.

D. work with technical personnel.

E. avoid making concessions or compromises.

149.If a purchase is a new buy for a manufacturer, the seller should expect a long time for a buying decision to be reached, work with technical personnel and

A. expect specifications to be changed many times before the buy is completed.

B. expect a lot of conflict.

C. act as a consultant to the buyer.

D. expect to have to do some favors for the decision-makers.

E. avoid making concessions or compromises.

150.At the weekly meeting for Choice Hotels (the company that owns Clarion Hotel, Quality Inn, Comfort Inn, Comfort Suites, Sleep Inn, and Mainstay Inn), the marketing manager said, "We need an inexpensive creative way to increase awareness of our hotels among people who travel by automobile. To do that, I want to find some new media that the other hotel chains are not using." The purchase of this new media for the hotel chains' advertising would be an example of a

A. new buy.

B. straight rebuy.

C. converted rebuy.

D. modified rebuy.

E. standard rebuy.

151.A reorder of an existing product or service from a list of acceptable suppliers is referred to as a

A. new buy.

B. straight rebuy.

C. modified rebuy.

D. standard buy.

E. make-buy.

152.A buy class situation affects buying center tendencies in different ways. If there is one person involved, the problem definition is well-defined, and the time required for a decision is short, most likely the buy class situation is a

A. new buy.

B. straight rebuy.

C. conditional rebuy.

D. modified rebuy.

E. standard buy.

153.A buy class situation affects buying center tendencies in different ways. If there is one person involved, the problem definition is well-defined, and the buying objective is to find the low-priced supplier, most likely the buy class situation is a

A. new buy.

B. modified rebuy.

C. conditional rebuy.

D. straight rebuy.

E. standard buy.

154.The assistant heard her supervisor in the supply room yell, "Call Crate & Barrel—we need another case of their coffee mugs for the conference next week." The supervisor was asking her assistant to make a

A. new buy.

B. straight rebuy.

C. modified rebuy.

D. make-buy.

E. standard buy.

155.The department secretary orders ink cartridges for the department printer from the Corporate Express catalog each month. This is an example of a

A. new buy.

B. straight rebuy.

C. modified rebuy.

D. make-buy.

E. standard buy.

156.The buying situation where users, influencers, or deciders want to change product specifications, price, delivery schedule, or supplier is referred to as a

A. new buy.

B. straight rebuy.

C. modified rebuy.

D. buy class.

E. make-buy.

157.In a ___________ situation, users, influencers, or deciders in the buying center want to change product specifications, price, delivery schedule, or suppliers.

A. new buy

B. straight rebuy

C. make-buy

D. buy class

E. modified rebuy

158.A buy class situation affects buying center tendencies in different ways. If there are two or three people involved, the problem definition has only minor modifications, and the time required for a decision is moderate, most likely the buy class situation is a

A. new buy.

B. straight rebuy.

C. conditional rebuy.

D. modified rebuy.

E. standard buy.

159.A buy class situation affects buying center tendencies in different ways. If there are two or three people involved, the problem definition has only minor modifications, and the buying objective is the low-priced supplier, most likely the buy class situation is a

A. new buy.

B. modified rebuy.

C. conditional rebuy.

D. straight rebuy.

E. standard buy.

160.A buy class situation affects buying center tendencies in different ways. If there are two or three people involved, only present suppliers are considered, and the time required for a decision is moderate, the buy class situation which is most likely is a

A. new buy.

B. straight rebuy.

C. modified rebuy.

D. conditional rebuy.

E. standard buy.

161.The office of SFX Entertainment, a talent promoter, needs a new fax machine that will print at three seconds a page (instead of five seconds per page like the one it is using now) and has both local and network printing capabilities. Its purchase of a replacement fax machine would be an example of a

A. new buy.

B. straight rebuy.

C. modified rebuy.

D. make-buy.

E. standard buy.

162.A university has changed and updated its logo and now finds that it needs to order new stationery and business cards for departments and staff of the university. This purchase would be a

A. modified rebuy.

B. straight rebuy.

C. new buy.

D. standard buy.

E. class buy.

163.If a purchase is a straight or modified rebuy for a manufacturer, the seller would most likely emphasize a competitive price and __________ in meetings with the purchasing agent.

A. nationwide distribution

B. reliable supply

C. available advertising money

D. quality product

E. a great brand name

164.If a purchase is a straight or modified rebuy for a manufacturer, the seller should emphasize a reliable supply and __________ in meetings with the purchasing agent.

A. nationwide distribution

B. competitive price

C. available advertising money

D. quality product

E. a great brand name

165.A straight rebuy is a(n) __________ while a modified rebuy is a(n) _________.

A. exchange; resale

B. routine reorder; exchange

C. first-time order; routine reorder

D. changed order; first-time order

E. routine reorder; changed order

166.The decision-making process organizations use to establish the need for products and services and to identify, evaluate, and choose among alternative brands and suppliers is referred to as

A. the consumer purchase decision process.

B. organizational buying behavior.

C. the industrial purchase procedure.

D. facilitating behavior.

E. the reseller procurement process.

167.Organizational buying behavior refers to

A. the assessment of consumer needs and the decision-making process organizations use to create the correct balance of product, price, promotion, and place.

B. the decision-making process organizations use to establish the need for products and services and to identify, evaluate, and choose among alternative brands and suppliers.

C. the determination of what to purchase and the quantity to purchase based upon derived demand.

D. the determination of what to purchase and the quantity to purchase based upon different environmental forces.

E. the process organizations use to purchase the raw materials and tools used in the manufacturing of product that will ultimately be used by other organizations in the manufacturing of their products.

168.Organizational buying behavior is similar to consumer behavior in some ways and different in others. One commonality is

A. both use five different stages in the buying process.

B. both use formal evaluation criteria when choosing among alternative brands.

C. both are affected by derived demand.

D. both have unlimited options for suppliers.

E. rely on gatekeepers to supply product information.

169.The first stage in the organizational buying decision process is

A. information search.

B. antecedent states.

C. alternative evaluation.

D. purchase decision.

E. problem recognition.

170.The make-buy decision is typically made during which stage of the organizational buying decision process?

A. information search

B. supplier search

C. alternative evaluation

D. purchase decision

E. problem recognition

171.An evaluation of whether components and assemblies will be purchased from outside suppliers or built by the firm itself is referred to as a

A. modified rebuy.

B. make-buy decision.

C. new buy.

D. cost analysis.

E. buy class decision.

172.A make-buy decision refers to

A. the decision-making process that determines whether a product has sustainability or not.

B. the decision-making process to determine which manufacturer meets a firm's criteria for the manufacturing of a new component part or equipment.

C. an evaluation of whether components and assemblies will be purchased from outside suppliers or built by the firm itself.

D. an evaluation of different suppliers to determine which one can fill an order without having to make any changes to the original product, while maintaining the same level of quality.

E. the decision-making process to determine which supplier can fill an order the fastest by a specified time period to guarantee there will be no shut-downs in the production process.

173.Sales engineers from Siemens, a German manufacturer, have won a contract for a new space telescope. They must now evaluate whether components and assemblies will be purchased from outside suppliers or be built by Siemens itself. This part of problem recognition is known as a

A. cost analysis.

B. make-buy decision.

C. value analysis.

D. modified rebuy.

E. derived-demand decision.

174.The decision by General Electric to purchase electric motors for its clothes dryers rather than to manufacture them itself is the result of a(n)

A. value analysis.

B. make-buy decision.

C. decrease in steel prices.

D. reciprocity agreement.

E. sensitivity analysis.

175.Once an organization making a purchase decision passes through the problem recognition stage, it reaches the __________ stage.

A. information search

B. value analysis

C. alternative evaluation

D. purchase decision

E. behavioral learning

176.At which stage in the buying decision process would design and production engineers draft specifications?

A. problem recognition

B. information search

C. alternative evaluation

D. purchase decision

E. value analysis

177.A systematic appraisal of the design, quality, and performance requirements of a product to reduce purchasing costs is referred to as a(n)

A. cost analysis.

B. make-buy decision.

C. value analysis.

D. engineering assessment.

E. buy class decision.

178.After conducting a value analysis, a company is hopefully able to

A. identify product defects.

B. reduce purchasing costs.

C. increase product value.

D. evaluate the merits of one product in relation to that of its competitor(s).

E. determine a fair but profitable price for purchased products.

179.Value analysis is a systematic appraisal of the design, quality, and performance of a product in order to

A. maintain quality assurance.

B. offer the lowest possible price.

C. increase the value of company assets.

D. reduce purchasing costs.

E. assure customer satisfaction.

180.During the third stage of the organizational purchase decision process, the organization engages in

A. information search.

B. postpurchase behavior.

C. alternative evaluation.

D. purchase decision.

E. problem recognition.

181.At which stage in the buying decision process would a firm visit potential suppliers to assess their facilities?

A. problem recognition

B. information search

C. alternative evaluation

D. purchase decision

E. postpurchase behavior

182.At which stage in the buying decision process would a firm visit potential suppliers to assess their production capacity?

A. problem recognition

B. information search

C. alternative evaluation

D. purchase decision

E. postpurchase behavior

183.At which stage in the buying decision process would a firm visit potential suppliers to assess their quality control?

A. problem recognition

B. information search

C. alternative evaluation

D. purchase decision

E. postpurchase behavior

184.At which stage in the buying decision process would a firm visit potential suppliers to assess their financial status?

A. problem recognition

B. information search

C. alternative evaluation

D. purchase decision

E. postpurchase behavior

185.A list of firms believed to be qualified to supply a given item is referred to as a

A. bidder's list.

B. make-buy list.

C. supplier's sheet.

D. vendor-rating sheet.

E. performance evaluation index.

186.A bidder's list refers to

A. a list of firms believed to be qualified to purchase a given item.

B. a list of firms believed to be qualified to supply a given item.

C. those firms that expressed interest in supplying a specific item but that have not yet been qualified.

D. a list of firms that have not yet been qualified but that are interested in purchasing a specific item.

E. customers, either industrial or consumer, who are participating in an open-bid auction and have been formally registered and qualified.

187.Poor performance on a contract may result in a supplier's name being dropped from the buying organization's

A. industry directory.

B. make-buy list.

C. vendor-rating sheet.

D. suppliers sheet.

E. bidder's list.

188.Firms selected from the __________ are sent a quotation request from the purchasing agent describing the desired quantity, delivery date(s), and specifications of the components or assemblies. Suppliers are expected to respond within 30 days.

A. Yellow Pages

B. industry directory

C. bidder's list

D. value analysis

E. vendor-rating sheet

189.The concept in organizational buying that corresponds most closely to a consumer's consideration set in consumer buying is the

A. supplier index.

B. bidder's directory.

C. selection set.

D. bidder's list.

E. NAICS index.

190.When selecting new uniforms for the Atlanta Hawks, Champion, Nike, and Puma sports apparel manufacturers were asked to submit quotes on how much each would charge to provide the NBA team with new uniforms. These three qualified sports apparel manufacturers were most likely identified by

A. the Yellow Pages.

B. an industry directory.

C. a bidder's list.

D. a value analysis.

E. vendor-rating sheet.

191.At which stage in the buying decision process would a firm clarify its organizational buying criteria and select a supplier?

A. problem recognition

B. information search

C. purchase decision

D. purchase review

E. alternative evaluation

192.During the next-to-the-last stage of the organizational purchase decision process, the organization

A. does an information search.

B. engages in postpurchase behavior.

C. evaluates alternatives.

D. makes the purchase decision.

E. recognizes the final problem.

193.Which of the following is indicative of the purchase decision stage of the organizational buying process?

A. The purchase decision is usually quick once the information search has been completed.

B. Even after the bid is accepted, further negotiation is likely.

C. Even if several vendors make it onto the bidder's list, ultimately only one can be chosen.

D. If a supplier on the bidder's list is not selected, they are rarely told the reason(s) why.

E. Once an agreement has been formally reached, neither the buyer nor the seller is permitted to make changes.

194.What is the last stage of the organizational purchase decision process?

A. information search

B. postpurchase behavior

C. alternative evaluation

D. purchase decision

E. purveyor review

195.At which point in the buying decision process would a firm use a formal vendor rating system to evaluate the quality of the vendor's product and customer service?

A. problem recognition

B. information search

C. purchase decision

D. postpurchase behavior

E. performance review

196.As in the consumer decision process, evaluation occurs in the industrial decision process, but it is more formalized and often more sophisticated. All items purchased are examined in a formal product acceptance process. The performance of the vendor is also monitored and recorded. This evaluation is described as

A. problem recognition.

B. information search.

C. purchase decision.

D. postpurchase behavior.

E. purveyor review.

197.Marketers who want to increase their chances of selling products and services to organizations must understand the organization's needs, get on the right bidder's list, find the right people in the buying center, and ultimately

A. provide value to organizational buyers.

B. adapt the product or service to offer the lowest price possible.

C. beat out all other possible vendors.

D. sign a binding contract that prohibits changes to the product, time line, or distribution quantities.

E. outspend their competitors to get the business.

198.Business-to-business electronic commerce over the Internet

A. is not nearly as prevalent as consumer electronic commerce when measured by the total dollar value of all Internet transactions.

B. is at least four times greater than consumer electronic commerce when measured by the total dollar value of all Internet transactions.

C. has dramatically decreased since face-to-face time is so important.

D. is impossible to estimate since companies will not share information.

E. has decreased since timely information is unavailable.

199.Online buying in organizational markets is prominent because Internet technology

A. allows companies to increase their advertising and promotion expenditures.

B. can convey timely information quickly.

C. substantially reduces buyer order processing costs.

D. narrows the potential customer base for many products.

E. totally eliminates marketing costs.

200.Online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services are referred to as

A. Webfronts.

B. icommerce.

C. e-syndicates.

D. e-marketplaces.

E. Web commerce rooms.

201.E-Marketplaces refer to

A. simulated purchasing scenarios that allow manufacturers to estimate demand based upon different changes in environmental forces.

B. Web sites that allow consumers to make direct purchases from a manufacturer rather than through a traditional retail outlet.

C. online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services.

D. computer simulations that allow manufacturers to estimate how much inventory to keep on hand based upon different purchasing scenarios.

E. a computer data base sponsored by the U.S. Government that houses all public access records for the purpose of aiding American businesses.

202.Another name for an e-marketplace is a(n)

A. e-hub

B. E-place

C. e-trade

D. E-xchange

E. 4NXchange

203.Another name for an e-marketplaces is a(n)

A. Webtie

B. Hub-knot

C. B2B exchange       

D. 2B1 marketplace

E. C2C market forum

204.E-marketplace can take two different formats

A. bricks-and-mortar exchanges and clicks-and-mortar exchanges.

B. privately-owned trading communities and open-to-the-public trading communities.

C. networked exchanges and public trading communities.

D. independent trading communities and private exchanges.

E. public exchanges and networked exchanges.

205.Independent e-marketplaces act as a neutral third party and provide an Internet technology trading platform and a __________ that enable exchanges between buyers and sellers.

A. centralized market

B. decentralized market

C. segregated market

D. integrated market

E. non-competitive

206.Plastics Net, Hospital Network.com, Textile Web, and eBay Business are all examples of

A. Webfront operations.

B. clicks-and-mortar stores.

C. e-marketplaces.

D. non-competitive markets.

E. integrated markets.

207.In the construction industry, an independent trading community such as Buzzsaw.com or Cephren.com enables a general contractor to manage and coordinate the many suppliers, subcontractors, architects, and engineers necessary to complete a project. Buzzsaw.com and Cephren.com are examples of

A. Webfronts.

B. Web chains.

C. Web commerce rooms.

D. e-syndicates.

E. e-marketplaces.

208.eBay is the predominant person-to-person trading community in the world. The eBay Business Web site is an example of a(n)

A. Webfront operation.

B. clicks-and-mortar store.

C. e-marketplace.

D. non-competitive market.

E. integrated market.

209.When a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other, it is referred to as a(n) _________.

A. reverse auction

B. traditional auction

C. bidder's war

D. Internet closeout sale

E. Webfront auction

210.Dell, Inc. sells surplus, refurbished, or closeout computer merchandise at its dellauction.com Web site to many buyers who bid sequentially. This is an example of a

A. reverse auction.

B. traditional auction.

C. bidder's war.

D. Internet closeout sale.

E. Webfront auction.

Figure 6-3

211.Which type of auction does Figure 6-3 above represent?

A. reverse auction

B. horizontal auction

C. traditional auction

D. vertical auction

E. diagonal auction

212.In Figure 6-3 above, as the number of buyers increases, the price

A. increases.

B. decreases.

C. stays the same.

D. has no relation to the number of buyers.

E. fluctuates depending on economic conditions.

213.In an e-marketplace, an online auction in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other is referred to as a

A. vertical auction

B. reverse auction

C. horizontal auction

D. traditional auction

E. reciprocal auction

214.A reverse auction refers to an online auction

A. where firms may sell their overstock—unused raw materials, packaging, and tools—to the highest bidder.

B. in which a manufacturer offers to share its facilities, inventory, or services with other smaller firms that are invited to bid in competition with each other.

C. in which a smaller manufacturer seeks to share the facilities, inventory, or services of a larger firm, and invites those firms to bid in competition with each other.

D. in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other.

E. where firms seek to purchase other firms' overstock—unused raw materials, packaging, and tools— while trying to find the lowest price possible.

215.Reverse auctions

A. are seller-initiated.

B. benefit the sellers significantly more than the buyers.

C. have an increasing number of bidders as the auction progresses.

D. have sequential bidding.

E. have many buyers.

216.Reverse auctions

A. are seller-initiated.

B. benefit the buyers significantly more than the sellers.

C. have an increasing number of buyers as the auction progresses.

D. do not have sequential bidding.

E. have many buyers at the start of the auction.

217.Reverse auctions

A. are buyer-initiated.

B. benefit the sellers significantly more than the buyers.

C. have an increasing number of buyers as the auction progresses.

D. do not have sequential bidding.

E. have many buyers at the start of the auction.

Figure 6-4

218.Which type of auction does Figure 6-4 above represent?

A. traditional auction

B. vertical auction

C. reverse auction

D. horizontal auction

E. reciprocal auction

219.In Figure 6-4 above, as the number of sellers increases, the price

A. increases.

B. decreases.

C. stays the same.

D. has no relation to the number of sellers.

E. fluctuates depending on economic conditions.

220.According to Lands' End, the biggest difference between it and some other retailers or catalog business is it

A. has access to data bases that other companies do not.

B. designs all of the products and creates all the specifications.

C. actively pursues large corporate and government orders.

D. purchases all its bulk orders from other firms.

E. offers loyalty discounts to repeat customers.

221.One clever way that Lands' End provides quality products is by

A. paying real people to "wear-test" and "fit-test" all types of garments.

B. selling hand made products exclusively from local artisans.

C. using products from firms that have an AAA ISO 9000 quality rating in their industries.

D. hiring a staff that includes past members of consumer advocacy organizations such as Consumers Union, publisher of Consumer Reports magazine.

E. requiring all the employees from top management to maintenance to only wear Lands' End clothing or shoes while at work.

222.When Lands' End reorders linen blend blazers that it has been selling for the last 20 years in misses sizes in new larger women's sizes, it would most likely be an example of a

A. new buy.

B. modified rebuy.

C. conditional rebuy.

D. make-buy.

E. standard buy.

223.In terms of the buying center, Lands' End quality assurance personnel would assume the role of

_________.

A. gatekeepers

B. deciders

C. buyers

D. influencers

E. users

1. Why has Dell, Inc. embarked on a global growth initiative?
A. National sales have decreased.
B. Dell was recently purchased by a major Chinese competitor.
C. There is too much competition in Dell's direct marketing channel.
D. There are fewer restrictions in computer technology outside the U.S.
E. Emerging economies offer significant growth potential.

 2. In what way is Dell's expansion into the global arena a departure from its standard operating procedure?
A. All Dell products will be manufactured in the countries in which they are sold.
B. All Dell products will be compatible with competitors' products and operating systems.
C. Dell's global expansion efforts will be focused towards emerging economies instead of established ones.
D. Dell will seek to penetrate the market at the expense of making profits until it obtains a 12% market share.
E. It will design and distribute the same product globally to take advantage of economies of scale.

 3. Dell established its company primarily with direct telephone-and Internet-based sales. In terms of Dell's global expansion strategy, which of the following statements is most accurate?
A. Dell will sell its computers in "traveling" stores: custom-made trailers with solar energy panels, that will allow them to reach remote marketplaces.
B. Dell will partner with each country's largest department stores and sell its computers in the small appliance department.
C. Dell will issue their own credit card through multi-national banks making it possible for customers who would not normally qualify for credit, to do so.
D. Dell will distribute its products through electronics retailers to reach more buyers quickly.
E. Dell will maintain the exact same strategies that brought them this far; they see no reason to "mess with success."

 4. Dell established its company primarily with direct telephone-and Internet-based sales. In terms of Dell's global expansion strategy, which of the following statements is most accurate?
A. Dell will continue to use it direct buy strategy, but will require all new-hires in their sales force to be multi-lingual.
B. Dell will open "experience centers" where customers can reduce anxiety by using the computers before they buy.
C. Dell will establish call centers in all major international cities so customers may deal directly with native born speakers.
D. Dell will issue their own credit card through multi-national banks making it possible for customers who would not normally qualify for credit, to do so.
E. Dell will maintain the exact same strategies that brought them this far; they see no reason to "mess with success."

 5. Which of the following statements about the dynamics of world trade is most accurate?
A. All nations participate equally in world trade.
B. Manufactured goods account for 10 percent of world trade.
C. Three-fourths of world trade includes services such as telecommunications and transportation.
D. World trade will likely exceed $12 trillion by 2012.
E. There is still greater growth potential in developed countries than emerging ones.

 6. Countertrade refers to
A. the use of barter rather than money in making global sales.
B. the legal agreement of one country to buy products exclusively with another.
C. the illegal agreement of one country to buy products exclusively from another.
D. the sale of industrial goods from a brick and mortar outlet rather than directly from the manufacturer.
E. the agreement of a firm to buy one product from a manufacturer provided that manufacturer agrees to buy another product from them.

 7. What percentage of world trade involves countertrade?
A. 5 - 10%.
B. 15 - 20%.
C. 25% - 30%.
D. Roughly 50%.
E. Countertrade is so pervasive, it cannot accurately be calculated.

 8. The Tahitian pearl market might never have existed were it not for Salvador Assael, "pearl king" of the South Seas. Assael got into the pearl business at the end of World War II. Tahiti had thousands of Swiss watches and suddenly had no GIs to buy them. Assael observed that the Japanese were desperate for watches but had no cash and that the Japanese still had a pearl industry. So Assael oversaw the swapping of watches for pearls, which were then sold to the Australian and U.S. markets. This international barter is an example of
A. reciprocal exchange.
B. countertrade.
C. cross-cultural exchange.
D. economic adaptation.
E. trade feedback.

 9. Volvo of North America delivered automobiles to the Siberian police force when Siberia had no cash to pay for them. It accepted payment in oil, which it then sold for cash to pay for media advertising in the U.S. This is an example of
A. predatory pricing.
B. countertrade.
C. cross-cultural exchange.
D. economic adaptation.
E. trade feedback.

 10. Recipco and Tradaq are both companies that connect international companies who want to trade the product they make, for products they need. Recipco and Tradaq assist international companies in making
A. trading exchanges.
B. cross-cultural exchanges.
C. countertrades.
D. economic adaptations.
E. cross-trade feedbacks.

 11. The Malaysian government recently exchanged 20,000 tons of rice for an equivalent amount of Philippine corn. This is an example of
A. the gray market.
B. countertrade.
C. cross-cultural exchange.
D. a trading exchange.
E. cross-trade feedback.

 12. Which of the following statements is most accurate?
A. As the largest international marketer, the U.S. accounts for 85 percent of world trade.
B. World trade refers exclusively to the exchange of money for goods or services.
C. An estimated 25 percent of world trade involves countertrade.
D. European intratrade is smaller but more powerful than for any of the other world regions.
E. The U.S. Europe, Canada, China, and Japan together account for more than half of world trade.

 13. Which of the following statements accurately describes the global perspective on world trade?
A. Exports are of significantly greater importance than imports.
B. Imports are of significantly greater importance than exports.
C. Imports and exports should be complementary economic flows: imports affecting exports, and exports affecting imports.
D. Exports and imports should always be kept in a state of equilibrium.
E. Imports and exports should be controlled through extensive use of international tariffs and trade regulations.

 14. The trade feedback effect is one argument for
A. decreasing a nation's exports.
B. increased tariffs and quotas.
C. international trade associations.
D. decreasing a nation's imports.
E. free trade agreements.

 15. The monetary value of all goods and services produced in a country during one year is referred to as
A. gross national production.
B. national monetary reserve.
C. gross domestic product.
D. annual domestic production.
E. annual production value

 16. Gross domestic product refers to
A. the monetary value of all goods and services produced by a single manufacturer during one year.
B. the monetary value of all domestic exports leaving a nation during one year.
C. the monetary value of all goods and services produced in a country during one year.
D. the monetary value of all domestic imports entering a nation during one year.
E. the difference between all domestic exports and imports for any nation during the course of one fiscal year.

 17. Which of the following statements about gross domestic product (GDP) is most accurate?
A. The United States is tied with China and Japan as the world's leaders in exports.
B. The U.S. percentage share of world exports has shifted upwards over the past 30 years.
C. The U.S. has maintained a steady percentage share of world imports.
D. The United States' relative role as an exporter has decreased in areas of aerospace, chemical, pharmaceutical, and information technology industries with in the past five years.
E. The relative position of the U.S. as a supplier to the world has diminished despite an absolute growth in exports.

 18. Which of the following statements about gross domestic product (GDP) is most accurate?
A. The United States is tied with China and Japan as the world's leaders in exports.
B. The U.S. percentage share of world exports has shifted downwards over the past 30 years.
C. The U.S. has maintained a steady percentage share of world imports.
D. The United States' relative role as an exporter has decreased in areas of aerospace, chemical, pharmaceutical, and information technology industries with in the past five years.
E. The relative position of the U.S. as a supplier to the world has increased because of an absolute growth in exports.

 19. Which of the following statements regarding gross domestic product (GDP) is most accurate?
A. China is the world's leader in terms of GDP (gross domestic product).
B. The relative position of the United States as a supplier to the world has increased because of an absolute growth in exports.
C. The relative position of the U.S. as a supplier to the world has diminished despite an absolute growth in exports.
D. The United States' relative role as an exporter has decreased especially in areas of aerospace, chemical, pharmaceutical, and information technology industries.
E. It is impossible to compare GDPs of different nations since the measurement is internal rather than external.

 20. Which of the following statements about gross domestic product (GDP) is most accurate?
A. The U.S. is the world's leader in terms of GDP (gross domestic product).
B. The relative position of the United States as a supplier to the world has increased because of an absolute growth in exports.
C. The United States is running a continuing trade surplus, because of having the world's largest gross domestic product.
D. The United States' relative role as an exporter has decreased especially in areas of aerospace, chemical, pharmaceutical, and information technology industries.
E. During the past 30 years, the relative position of the U.S. in terms of GDP has remained stable, despite the fact that actual value of products and services has increased.

 21. Which of the following statements about gross domestic product (GDP) is most accurate?
A. The EU (European Union) is the world's leader in terms of GDP (gross domestic product).
B. The relative position of the United States as a supplier to the world has increased because of an absolute growth in exports.
C. The United States is running a continuing trade surplus, because of having the world's largest gross domestic product.
D. The United States' relative role as an exporter has increased especially in areas of aerospace, chemical, pharmaceutical, and information technology industries.
E. During the past 30 years, the relative position of the U.S. in terms of GDP has remained stable, despite the fact that actual value of products and services has increased.

 22. Which of the following statements about gross domestic product (GDP) is most accurate?
A. The EU (European Union) is the world's leader in terms of GDP (gross domestic product).
B. The relative position of the United States as a supplier to the world has increased despite an absolute growth in exports.
C. The U.S. role as a marketplace for the world has increased, especially for automobiles, oil, textiles, and consumer electronics.
D. The United States' relative role as an exporter has decreased especially in areas of aerospace, chemical, pharmaceutical, and information technology industries.
E. The United States' relative role as an exporter changed dramatically when they became a service oriented economy.

 23. Balance of trade refers to
A. the sum of all a nation's imports and exports.
B. the difference between the monetary value of a nation's exports and imports.
C. the comparison of total exports from one quarterly period (within a fiscal year) to the next.
D. the difference between projected sales and actual sales for a nation's exports.
E. the state of equilibrium when two neighboring nations participate in countertrade.

 24. The four largest importers of U.S. goods and services are
A. Japan, Germany, China, and Canada.
B. Canada, China, Japan, and Mexico.
C. China, Brazil, Japan, and Germany.
D. Mexico, Canada, Russia, and China.
E. England, France, China, and Germany.

 25. World trade flows, to and from the United States, reflect __________ for goods and services among nations and industries.
A. demand and supply interdependencies
B. disparities between supply and demand
C. positive and negative synergistic trade
D. a negative currency exchange
E. an ethnocentric bias

 26. Which of the following statements best describes the relationship between the imports into the U.S. and the exports from the U.S. during the last 30 years?
A. No accurate data has been available on trade imports and exports.
B. The volume of imports and exports has consistently decreased.
C. Imports into the U.S. and exports have been about equal, indicating balanced trade.
D. Exports have exceeded imports, indicating a continuing trade surplus.
E. Imports have exceeded exports, indicating a continuing trade deficit.

 27. Which of the following statements best describes the relationship between the imports into the U.S. and the exports from the U.S. during the last 30 years?
A. No accurate data has been available on trade imports and exports.
B. The volume of imports and exports has consistently decreased.
C. Imports into the U.S. and exports have been about equal, indicating balanced trade.
D. Exports have exceeded imports, indicating a continuing trade surplus.
E. The volume of both U.S. exports and U.S. imports has increased significantly.

 28. Changes in the products Americans buy and sell, additional jobs, and an improved standard of living, are all effects of
A. an increase in imports and an increase of exports.
B. an increase in imports and a decrease in exports.
C. a decrease in imports and a decrease in exports.
D. a state of equilibrium between imports and exports.
E. the reversal of importance between the service industry and manufacturing.

 29. The four largest exporters to the United States are
A. Canada, China, Japan, and Mexico.
B. Japan, Germany, Brazil, and Canada.
C. China, Brazil, Japan, and Germany.
D. Mexico, Canada, Brazil, and China.
E. England, France, China, and Germany.

 30. China, Japan, and South Korea combine for about _________ percent of the total U.S. balance of trade deficit.
A. 30
B. 50
C. 65
D. 80
E. 95

 31. Michael Porter has identified four key elements to explain why some companies and industries succeed globally while others fail. These four elements collectively are referred as
A. the balance of trade.
B. the industrial diversity effect.
C. the trade feedback effect.
D. international trade matrix.
E. the "diamond" of national competitive advantage.

 32. Michael Porter has identified four key elements in a nation's competitive advantage. They are demand conditions; related and supporting industries; company strategy, structure, and rivalry; and
A. consumer behavior.
B. industrial diversity.
C. governmental regulation.
D. entrepreneurial spirit.
E. factor conditions.

 33. Michael Porter has identified four key elements in a nation's competitive advantage. They are factor conditions, related and supporting industries; and company strategy, structure, and rivalry; and
A. demand conditions.
B. ethnocentrism.
C. industrial diversity.
D. governmental regulation.
E. entrepreneurial spirit.

 34. Michael Porter has identified four key elements in a nation's competitive advantage. They are factor conditions; demand conditions; company strategy, structure, and rivalry; and
A. consumer behavior.
B. industrial diversity.
C. related and supporting industries.
D. governmental regulation.
E. entrepreneurial spirit.

 35. Michael Porter has identified four key elements in a nation's competitive advantage. They are factor conditions; demand conditions; related and supporting industries; and
A. consumer behavior.
B. industrial diversity.
C. governmental regulation.
D. company strategy, structure, and rivalry.
E. entrepreneurial spirit.

   
Figure 7-1

 36. According to Michael Porter's diamond in Figure 7-1 above, quadrant "A" represents
A. factor conditions.
B. related and supporting industries.
C. demand conditions.
D. managerial conditions.
E. company strategy, structure, and rivalry.

 37. According to Michael Porter's diamond in Figure 7-1 above, quadrant "B" represents
A. factor conditions.
B. related and supporting industries.
C. demand conditions.
D. managerial conditions.
E. company strategy, structure, and rivalry.

 38. According to Michael Porter's diamond in Figure 7-1 above, quadrant "C" represents
A. factor conditions.
B. related and supporting industries.
C. demand conditions.
D. managerial conditions.
E. company strategy, structure, and rivalry.

 39. According to Michael Porter's diamond in Figure 7-1 above, quadrant "D" represents
A. factor conditions.
B. related and supporting industries.
C. demand conditions.
D. managerial conditions.
E. company strategy, structure, and rivalry.

 40. Every day, in a third-class carriage of the express train that rolls between Bombay and Ahmadabad, plainly dressed couriers carry precious cargo: diamonds. Rough gems are imported to Bombay from dealers in London, Antwerp, Tel Aviv, and New York, taken by these couriers to cutting and polishing centers in Gujarat state, and then carried back to Bombay to be reexported to the world. This system, based on trust, secrecy, and skilled low-cost labor, has been working for half a century. It has helped make India the world's premier center for diamond cutting and polishing. Nine out of every 10 stones sold in the world pass through India, making diamonds that country's largest export at $6.6 billion a year. This ability to use its skilled labor as a resource is an example of what Michael Porter would term
A. structural conditions.
B. demand conditions.
C. socio-cultural conditions.
D. competitive conditions.
E. factor conditions.

 41. The Dutch lead the world in the cut-flower industry because of their research in flower cultivation, packaging, and shipping. Using this knowledge as a resource is an example of what Michael Porter would term
A. structural conditions.
B. demand conditions.
C. socio-cultural conditions.
D. competitive conditions.
E. factor conditions.

 42. According to Michael Porter's diamond of national competitive advantage, both the number and sophistication of domestic customers for an industry's product are examples of
A. structural conditions.
B. demand conditions.
C. socio-cultural conditions.
D. competitive conditions.
E. factor conditions.

 43. Austria has been described as "the very heartland of European coffee culture." These "coffee-knowledgeable" Austrians drink 21.5 liters of coffee per person annually. Starbucks wanted to open coffeehouses in Austria and sell Starbucks coffee there. For Starbucks, the Austrian level of coffee-drinking sophistication would be an example of
A. structural conditions.
B. demand conditions.
C. socio-cultural conditions.
D. competitive conditions.
E. factor conditions.

 44. Which of the following is an example of a demand condition?
A. Available natural resources
B. Existence of supplier clusters
C. Sophistication of consumers
D. Intensity of competition
E. Competitive wage rates

 45. To become leaders in the world market, countries need related and supporting industries because
A. collaborative suppliers can generate revenue for further investment.
B. they can eliminate the need to import materials from other countries.
C. clusters of strong suppliers can accelerate innovation.
D. most countries still believe strongly in protectionism.
E. their union lessens financial vulnerability and increases buying power.

 46. Which of the following is an element of related and supporting industries?
A. Media exposure of products
B. Existence of supplier clusters
C. Sophistication of consumers
D. Intensity of competition
E. Aggregation of markets

 47. Nine out of every 10 diamonds sold in the world pass through India, making diamonds that country's largest export at $6.6 billion a year. One of the reasons for its success is the nation's 2,500 trading firms, its banks, airlines, customers' offices, and courier services that make sure the diamonds are safely delivered. Most of these are members of the diamond-trading bourse in Bombay. According to Michael Porter's theory about national competitive advantage, India's success in the diamond industry is due in part to its
A. company strategy, structure, and rivalry.
B. absence of competition.
C. related and supporting industries.
D. factor conditions.
E. demand conditions.

 48. Which of the following statements reflects Michael Porter's theory regarding national competitive advantage?
A. Clusters of strong suppliers can interfere with entry into a global market.
B. A firm that succeeds in global markets often has first succeeded in intense domestic competition.
C. A country's natural resources, education, and infrastructure often pose obstacles that cannot be overcome.
D. The first goal of a global marketer is to actively educate a nation's domestic customers.
E. A nation's domestic workforce is more motivated to work for foreign corporations than for their own.

 49. Which of the following statements reflects Michael Porter's theory regarding national competitive advantage?
A. Clusters of strong suppliers can interfere with entry into a global market.
B. A firm that succeeds in global markets has often left a domestic market that has too much competition.
C. A country's natural resources, education, and infrastructure can be turned into a competitive advantage.
D. The first goal of a global marketer is to actively educate a nation's domestic customers.
E. A nation's domestic workforce is more motivated to work for foreign corporations than for their own.

 50. Which of the following statements reflects Michael Porter's theory regarding national competitive advantage?
A. Clusters of strong suppliers can accelerate innovation.
B. A firm that succeeds in global markets has often left a domestic market that has too much competition.
C. A country's natural resources, education, and infrastructure can represent obstacles that are often difficult to overcome.
D. The first goal of a global marketer is to actively educate a nation's domestic customers.
E. A nation's domestic workforce is more motivated to work for foreign corporations than for their own.

 51. Which of the following statements reflects Michael Porter's theory regarding national competitive advantage?
A. Clusters of strong suppliers can interfere with entry into a global market.
B. A firm that succeeds in global markets has often left a domestic market that has too much competition.
C. A country's natural resources, education, and infrastructure can represent obstacles that are often difficult to overcome.
D. Conditions such as both the number and sophistication of domestic customers can affect demand for an industry's product.
E. A nation's domestic workforce is more motivated to work for foreign corporations than for their own.

 52. Which of the following is an element of company strategy, structure, and rivalry?
A. Type of companies in an industry
B. Amount of public ownership
C. Amount of private ownership
D. Intensity of competition
E. The number of sophisticated consumers in the market

 53. The Italian shoe industry has become a world leader because of intense domestic competition among firms such as Bruno Magli, and Rossimoda. According to Michael Porter's theory about national competitive advantage, Italy's success in the shoe industry is due in part to its
A. company strategy, structure, and rivalry.
B. absence of competition.
C. related and supporting industries.
D. factor conditions.
E. demand conditions.

 54. Although there are many factors contributing to the success of major global marketers, a common theme seems to be that they
A. first became involved with a formalized trade organization (such as the EU, NAFTA, etc.).
B. specialized in services rather than consumer goods.
C. employed a multi-cultural or multi-national staff.
D. first succeeded in intense domestic competition.
E. were the largest companies in their industry.

 55. Competitive advantage for global firms grows out of __________, innovation, and change.
A. product quality
B. continuous improvement
C. employment of a multi-cultural or multi-national staff
D. membership in a formalized trade organization
E. country specific market research

 56. Competitive advantage for global firms grows out of continuous improvement, __________, and change.
A. product quality
B. employment of a multi-cultural or multi-national staff
C. membership in a formalized trade organization
D. country specific market research
E. innovation

 57. Competitive advantage for global firms grows out of continuous improvement, innovation, and __________.
A. accountability
B. change
C. product quality
D. company size
E. location

 58. The Economic Espionage Act
A. allows the international community to declare a verdict, but the home country to impose the penalty.
B. imposes a personal fine on the individual, and a temporary moratorium on the goods or services of the firm or government for which he or she spied.
C. targets espionage activities that are commonplace in any industry that holds governmental contracts.
D. makes the theft of trade secrets by foreign entities a federal crime in the U.S.
E. is well-intended in theory, but is virtually impossible to enforce.

 59. The clandestine collection of trade secrets or proprietary information about a company's competitors is referred to as
A. trade espionage.
B. transnational fraud.
C. economic espionage.
D. competitive duplicity.
E. transnational espionage.

 60. The estimated cost of economic espionage to firms in the United States is estimated to be
A. $10 billion a year.
B. $250 billion a year.
C. $750 billion a year.
D. $900 billion a year.
E. approaching 1 trillion dollars per year.

 61. Economic espionage is the clandestine collection of trade secrets or __________ is referred to as
A. government economic information
B. industrial intelligence
C. proprietary information about competitors
D. government weapons information
E. banking lists

 62. The prescribed penalty for individuals found guilty of the theft of trade secrets is
A. up to 15 years in prison and fines up to $500,000.
B. up to 30 years in prison and fines up to $1,000,000.
C. life in prison with chance of parole after 25 years.
D. expulsion from the United States and/or revocation of citizenship.
E. 30 years in prison and fines to be determined by the courts.

 63. The prescribed penalty for agents of foreign governments found guilty of economic espionage is
A. up to 15 years in prison and fines up to $500,000.
B. life in prison with chance of parole after 25 years.
C. 25 years in prison and a $10,000,000 fine.
D. permanent expulsion from the United States and all its territories.
E. 30 years in prison and fines proportional to the damage caused.

 64. Four major trends affecting world trade in the past decade are formal economic integration and free trade among nations, global competition among global companies for global customers, the emergence of networked global marketspace, and
A. a gradual decline in economic protectionism by individual countries.
B. a significant increase in economic protectionism and a decline in free trade.
C. redefined national boundaries and a more aggressive attitude towards initiating international tariffs and quota systems.
D. a decrease in most countries' GDPs and a renewal of nationalism.
E. an increase in most countries' GDPs coupled with an increased degree of consumer ethnocentrism.

 65. Four major trends affecting world trade in the past decade are a gradual decline in economic protectionism exercised by individual countries, formal integration and free trade among nations, the emergence of networked global marketspace, and
A. an increase in economic protectionism and a decline in free trade.
B. redefined national boundaries and a more aggressive attitude towards initiating international tariffs and quota systems.
C. a decrease in most countries' GDPs and a renewal of nationalism.
D. global competition among global companies for global customers.
E. an increase in most countries' GDPs coupled with an increased degree of consumer ethnocentrism.

 66. Four major trends affecting world trade in the past decade are a gradual decline in economic protectionism exercised by individual countries, formal integration and free trade among nations, global competition among global companies for global customers, and
A. an increase in economic protectionism and a decline free trade.
B. redefined national boundaries and a more aggressive attitude towards initiating international tariffs and quota systems.
C. a decrease in most countries' GDPs and a renewal of nationalism.
D. emergence of networked global marketspace.
E. an increase in most countries' GDPs coupled with an increased degree of consumer ethnocentrism.

 67. The practice of shielding one or more sectors of a country's economy from foreign competition through the use of tariffs or quotas is referred to as
A. domestic imperialism.
B. protectionism.
C. blocked competition.
D. the rule of proprietary domain.
E. proportionality.

 68. Protectionism refers to
A. the practice of purchasing products exclusively from a domestic market in order to shore up a nation's economy.
B. the use of tariffs, quotas, and boycotts with the express intention of putting a foreign competitor out of business.
C. the practice of shielding one or more sectors of a country's economy from foreign competition through the use of tariffs or quotas.
D. a form of domestic imperialism that holds that only those products manufactured on one's home nation are of sufficient quality to warrant purchase.
E. the practice of purchasing products exclusively from a domestic market in order to cause intentional harm to an adversarial nation.

 69. According to economists, protectionism
A. guards a nation's political security.
B. encourages economic reliance on foreign countries.
C. inhibits the development of domestic industries.
D. creates opportunities for the outsourcing of domestic jobs.
E. creates a more favorable environment for a global economy.

 70. Beginning January 1, 2005 China lifted the import quotas and lowered tariffs on automobiles. This removal of the quotas and the lowering of tariffs is an example of
A. recalling the rule of protective domain.
B. reducing ethnocentrism.
C. enhancing domestic imperialism.
D. reducing protectionism.
E. reducing blocked currency.

 71. Those in favor of protectionism advocate that protectionism
A. helps reduce tariffs and quotas.
B. safeguards a nation's economy from foreign competition.
C. encourages economic reliance on foreign countries.
D. creates opportunities for the outsourcing of domestic jobs.
E. creates a more favorable environment for a global economy.

 72. Government taxes on goods or services entering a country that primarily serve to raise prices on imports are referred to as
A. tariffs.
B. quotas.
C. GATT taxes.
D. foreign excise taxes.
E. exchange subsidies.

 73. Tariffs refer to
A. a reduction on or refusal to purchase goods from foreign nations with which a country has philosophical or ideological differences.
B. government taxes on goods or services entering a country that primarily serve to raise prices on imports tariffs.
C. a restriction placed on the amount of a product allowed to enter or leave a country.
D. a minimum requirement for the purchase between two or more nations, of products or services.
E. a refusal to purchase or exchange goods or services with another nation unless certain financial or ideological requirements have been satisfied.

 74. Recently the Japanese government, under pressure from its domestic farm lobby, slapped government taxes on mushrooms, leeks, and the reeds used in tatami mats that were being imported from China. Japan levied
A. GATT taxes.
B. quotas.
C. tariffs.
D. foreign excise taxes.
E. exchange subsidies.

 75. A government tax on goods or services entering a country is referred to as a
A. GATT tax.
B. quota.
C. tariff.
D. foreign excise tax.
E. farm subsidy.

 76. U.S citizens pay $5 billion more annually for shoes and Japanese citizens pay $6 billion more for rice than the actual cost of the products because
A. both countries have suffered major financial crises due a severe trade imbalance.
B. both these countries have imposed tariffs on these goods to protect their domestic markets.
C. both countries have imposed limits on the quantity of these goods leaving the domestic market.
D. both products are considered essentials and as a result are more heavily taxed.
E. previously these products were purchased at a lower price from nations that currently are under governmental sanctions.

 77. If you wanted to set up a business importing amber from Latvia to the United States, you would have to plan on paying the U.S. Customs Service roughly 20 percent of the value of the product as a(n) ______.
A. bribe
B. tariff
C. subsidy fee
D. excise tax
E. quota

 78. President Bill Clinton attempted to protect American firms from foreign competition by placing a government tax on Japanese automobiles imported to the United States. President Clinton's goal was to raise the price on Japanese imports, thereby encouraging American consumers to purchase American-made automobiles. The tax the President threatened to impose is an example of a(n) ______.
A. boycott
B. tariff
C. quota
D. sanction
E. exchange subsidy

 79. The orange box in Figure 7-2 above should read
 
Figure 7-2
A. "increase world trade."
B. "decrease world trade."
C. "limit exports."
D. "limit imports."
E. "doubles protectionism."

 80. The __________ imposed on bananas by European Union countries cost consumers $2 billion a year in higher prices.
A. boycotts
B. tariffs
C. quotas
D. sanctions
E. exchange subsidies

 81. The U.S. Rice Millers' Association claims that if the Japanese rice market were opened to imports by lowering __________, lower prices would save Japanese consumers $6 billion annually, and the U.S. would gain a large share of the Japanese rice market.
A. boycotts
B. tariffs
C. quotas
D. sanctions
E. exchange subsidies

 82. A restriction placed on the amount of a product allowed to enter or leave a country is referred to as a
A. quota.
B. tariff.
C. GATT tax.
D. restrictive tax.
E. foreign excise tax.

 83. Quota refers to
A. a government tax on goods or services entering a country that primarily serves to raise prices on imports.
B. a reduction on or refusal to purchase goods from foreign nations with which a country has philosophical or ideological differences.
C. a restriction placed on the amount of a product allowed to enter or leave a country.
D. a minimum requirement for the purchase between two or more nations, of products or services.
E. a refusal to purchase or exchange goods or services with another nation unless certain financial or ideological requirements have been satisfied.

 84. To a degree, every country engages in some form of protectionism. Over the past fifty years however, this practice has diminished, in large part, due to
A. an alignment of nations by ethnicity rather than geographical borders.
B. an increase in population and a decrease in resources.
C. the evolution of mass media.
D. the establishment of GATT.
E. an alignment of nations by political ideology rather than geographical borders.

 85. Which of the following issues raises concerns about the ethics of protectionism?
A. Competitive advantage grows out of continuous improvement.
B. Small firms succeed in foreign niche markets.
C. Tariffs have declined from an average of 40 percent to less than 5 percent.
D. Regional trade agreements provide preferential treatment for member nations.
E. Pan-European marketing strategies are possible due to greater uniformity in packaging standards.

 86. The world's largest manufacturer of peppermint candy canes was in Albany, Georgia, until it could no longer afford to buy the sugar needed for its operation. It moved its manufacturing business to Mexico where there are no restrictions (as existed in the U.S.) on the amount of sugar that can be brought into the nation. The movement of this U.S. business to Mexico was caused by a(n) __________ established by the U.S. government.
A. tariff
B. restrictive tax
C. quota
D. excise tax
E. exchange subsidy

 87. The __________ is an international treaty intended to limit trade barriers and promote world trade through the reduction of tariffs.
A. North Atlantic Treaty Organization (NATO)
B. General Agreement on Tariffs and Trade (GATT)
C. North American Free Trade Agreement (NAFTA)
D. Restraint of Trade Treaty (ROTT)
E. Great Oceanic Treaty on Trade (GOTT)

 88. Every country engages in some form of protectionism. However, protectionism has declined internationally over the past 50 years due in large part to the
A. Balance of Trade Agreement (BOTA).
B. International Trade Feedback Act (ITFA).
C. General Agreement on Tariffs and Trade (GATT).
D. Gross Domestic Product Agreement (GDPA).
E. Cross-Cultural Trade Act (CCTA).

 89. A permanent institution that sets rules governing trade between its members through a panel of trade experts who decide on trade disputes between members and issue binding decisions is referred to as the __________.
A. League of Nations
B. World Trade Organization (WTO)
C. Association for Commerce Equity (ACE)
D. United Nations Board of Trade (UNBT)
E. Global Better Business Bureau

 90. World Trade Organization (WTO) refers to
A. the world's largest banking institution responsible for establishing and maintaining equitable exchange rates for all member nations.
B. the world's largest licensing institution responsible for the certification of products distributed to a global market.
C. a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.
D. a multinational trade organization comprised of the world's wealthiest nations whose primary purpose is to aid in the economic growth of developing nations.
E. a multinational trade organization comprised of the world's wealthiest nations whose primary purpose is to promote free trade economies.

 91. There are __________ World Trade Organization countries, including the United States, which account for more than 90 percent of world trade.
A. 37
B. 52
C. 97
D. 113
E. 153

 92. Which of the following statements about the World Trade Organization (WTO) is most accurate?
A. The World Trade organization is a temporary group that meets on an as needed basis.
B. The 153 member countries of the WTO account for approximately 55% of world trade.
C. The WTO sets rules governing trade between its members and the remainder of the world.
D. The WTO uses panels of trade experts who can issue binding decisions.
E. The WTO was formed by the United Nations.

 93. Which of the following statements about the World Trade Organization (WTO) is most accurate?
A. The WTO is a permanent institution that sets rules governing trade between its members.
B. The WTO sets rules governing trade between its members and the remainder of the world.
C. The 153 member countries of the WTO account for approximately 55% of world trade.
D. The WTO uses panels of trade experts who can issue non-binding recommendations.
E. The WTO was formed by the United Nations.

 94. Which of the following statements about the World Trade Organization (WTO) is most accurate?
A. The World Trade organization is a temporary institution.
B. The 153 member countries of the WTO account for more than 90 percent of world trade.
C. The WTO sets rules governing trade between its members and the remainder of the world.
D. The WTO uses panels of trade experts who can issue non-binding recommendations.
E. The WTO was formed by the United Nations.

 95. Which of the following statements about the World Trade Organization (WTO) is most accurate?
A. The World Trade organization is a temporary institution.
B. The 153 member countries of the WTO account for less than 25 percent of world trade.
C. The WTO sets rules governing trade among its members.
D. The WTO uses panels of trade experts who can issue non-binding recommendations.
E. The WTO was formed by the United Nations.

 96. Which of the following statements about the World Trade Organization (WTO) is most accurate?
A. The World Trade organization is a temporary institution.
B. The 153 member countries of the WTO account for less than 25 percent of world trade.
C. The WTO sets rules governing trade between its members and the rest of the world.
D. The WTO uses panels of trade experts who can issue non-binding recommendations.
E. The WTO was formed by the major industrialized nations of the world.

 97. The EU has benefited its member nations by providing the free flow of goods, services, capital, and labor across borders within the EU. It has created abundant marketing opportunities because it is no longer necessary to
A. print material in multiple languages.
B. continually monitor exchange rates.
C. trade with communist countries.
D. obey international trade regulations.
E. use the American dollar as an economic standard.

 98. The EU has benefited its member nations because most tariffs that affect pricing practices have been removed, fewer regulatory restrictions on transportation, advertising, and promotion imposed by countries; and
A. there is a credit reserve of funds to protect against world recessions.
B. there is a common language advantage amongst EU consumers.
C. most companies within the union are becoming global partnerships.
D. there is a legally binding enforcement code for misconduct.
E. firms do not need to market their products and services on a nation-by-nation basis.

 99. The EU has benefited its member nations because firms do not need to market their products and services on a nation-by-nation basis; most tariffs that affect pricing practices have been removed, and
A. there is a legally binding enforcement code for misconduct.
B. there is a credit reserve of funds to protect against world recessions.
C. there are fewer regulatory restrictions on transportation, advertising, and promotion.
D. there is a common language advantage amongst EU consumers.
E. most companies within the union are becoming global partnerships.

 100. The North American Free Trade Agreement was designed to encourage free trade between
A. North America, Central America, and South America.
B. the United States, Canada, and Mexico.
C. the United States and the European Union.
D. member countries originally from NATO (North Atlantic Treaty Organization).
E. North America and The Commonwealth of Independent States.

 101. CAFTA-DR, a comprehensive free trade agreement between Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and __________.
A. the United States
B. Panama
C. Belize
D. Cuba
E. the Canary Islands

 102. Which of the following is most accurate in regards to the Asian Free Trade agreements?
A. Efforts to liberalize trade in East Asia are growing.
B. Asian Free Trade agreements are more formal than those of the EU and NAFTA.
C. Asian Free Trade agreements are based on ethnicity rather than geographical borders.
D. Asian Free Trade agreements encourage the formation of multi-national corporations.
E. Asian Free Trade agreements are intended to strengthen bonds amongst Asian nations while simultaneously loosening bonds with the West.

 103. The "Little Dragons" are more commonly known as
A. Hong Kong, Singapore, South Korea, and Taiwan.
B. Hong Kong, Shanghai, Singapore, and Bangkok.
C. Beijing, Hong Kong, Shanghai, and Singapore.
D. Beijing, Tokyo, Taiwan, and Singapore.
E. Beijing, Hong Kong, Taiwan, and Bangkok.

 104. Which of the following is most accurate in regards to the Asian Free Trade agreements?
A. Efforts to liberalize trade in East Asia have decreased as a result of the economic downturn in 2009.
B. Asian Free Trade agreements are based on ethnicity rather than geographical borders.
C. Asian Free Trade agreements encourage the formation of multi-national corporations.
D. Asian Free Trade agreements are intended to strengthen bonds amongst Asian nations while simultaneously loosening bonds with the West.
E. Asian Free Trade agreements have reduced tariffs among countries and promoted trade.

 105. In terms of the global marketplace there are three primary types of companies: international firms, multinational firms, and transnational firms. The key factor that distinguishes one from another is
A. the firm's financial capacity to take risks.
B. the willingness and ability to embrace diversity.
C. the firm's orientation toward and strategy for global markets and marketing.
D. the relative position of the product or service in terms of its life cycle.
E. the relative size of the firm both in financial terms and in production capacity.

 106. When firms originate, produce, and market their products and services worldwide, it is referred to as __________.
A. acculturation
B. global competition
C. internationalization
D. global collaboration
E. transactional exchange

 107. Global competition refers to
A. when a firm produces and markets its products worldwide rather than in its own domestic market.
B. when firms originate, produce, and market their products and services worldwide.
C. when two firms from two different countries compete for market share in their own domestic markets.
D. when two or more firms from different nations combine their resources to market products globally.
E. when the firm from one nation dominates the market for that product in every other nation.

 108. Agreements between two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation are referred to as
A. compacts.
B. collaborative treaties.
C. strategic alliances.
D. independent agreements.
E. coalitions.

 109. Strategic alliances refer to
A. multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.
B. a global market-entry strategies whereby a foreign company and a local firm invest together to create a local business in order to share ownership, control and profits of the new company.
C. a global marketing strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division.
D. agreements between two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value.
E. offering the right to a trademark, patent, trade secret, or similarly valued item of intellectual property in return for a royalty or fee.

 110. Collaborative relationships are becoming a common way to meet the demands of global competition. Global __________ are agreements between two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation.
A. compacts
B. collaborative treaties
C. strategic alliances
D. independent agreements
E. coalitions

 111. Two carmakers have developed a strange but successful partnership. Ford, a U.S. automaker, and Mazda, an Asian carmaker, have collaborated on several models, including the Explorer, the Probe, the Mazda 323, and the Mazda MX-6. The U.S. automaker has supplied Mazda with help in marketing, finance, and styling. In return, Mazda has provided manufacturing and product development expertise to Ford. Both companies have worked together toward a common goal and both have benefited as a result of their
A. international contract.
B. international competitive agreement.
C. strategic alliance.
D. collaborative treaty.
E. global oligopoly.

 112. Three types of companies populate and compete in the global marketplace: international firms, multinational firms, and __________ firms.
A. multi-ethnic
B. transnational
C. polycentric
D. ethnocentric
E. decentralized

 113. A(n) __________ firm engages in trade and marketing in different countries as an extension of the marketing strategy in its home country.
A. polycentric
B. foreign expansion
C. international
D. multinational
E. transnational

 114. A firm that views the world as consisting of unique parts and markets to each part differently is referred to as a(n)
A. economic expansion firm.
B. foreign expansion firm.
C. international firm.
D. multinational firm.
E. transnational firm.

 115. A(n) __________ firm views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences.
A. transcontinental
B. multidomestic
C. international
D. multinational
E. transnational

 116. Mars, America's second-largest candy company, began doing business in Russia in the late 1980s. The Snickers bar is one of the top selling candies in Russia and is marketed in much the same way as it is in the United States. Mars is most likely a(n) __________ firm.
A. international
B. multidomestic
C. transnational
D. multi-ethnic
E. multinational

 117. The strategy used by firms that have as many different product variations, brand names, and advertising programs as countries in which they do business is referred to as a(n)
A. ethnocentric orientation
B. multidomestic strategy
C. transnational marketing
D. polycentric marketing
E. multi-market strategy

 118. Multidomestic marketing strategy refers to
A. the strategy used by firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.
B. the strategy used by firms that use the same product variations, brand names, and advertising programs for every country in which they do business.
C. the strategy of transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
D. the strategy of seeking out already established firms in other nations and selling them the rights to manufacture and distribute the firm's products through host nation's established infrastructure.
E. the strategy currently used by most U.S. domestic firms that when entering a new international market to select products that require the least amount of product adaptation or consumer education.

 119. Companies that use a(n) ___________ marketing strategy have as many different product variations, brand names, and advertising programs as countries in which they do business.
A. ethnocentric
B. multidomestic
C. transnational
D. polycentric
E. international

 120. U.S. appliance manufacturers find that different customs about shopping must be used to determine product design. For instance, people in Northern Europe shop only once a week, so they need bigger refrigerators than Southern Europeans who shop daily. Furthermore, Northern Europeans insist that freezers should be on the top just as loudly as Southern Europeans insist that freezers should be on the bottom. Other regions use their appliances differently and have other different product demands. Given this information, you should conclude U.S. appliance manufacturers would be more likely successful if they used a(n) __________ marketing strategy.
A. ethnocentric
B. multidomestic
C. transnational
D. polycentric
E. international

 121. Lever Europe, a division of Unilever, markets its fabric softener known as Snuggle in the United States in 10 European countries under seven brand names, including Kuschelweich in German, Coccolino in Italy, and Mimosin in France. These products have different packages, different advertising programs, and occasionally different formulas. From this information we can assume that Lever Europe is a(n) __________ company.
A. ethnocentric
B. multidomestic
C. transnational
D. polycentric
E. international

 122. The strategy of transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ are referred to as a
A. global marketing strategy.
B. integrated marketing strategy.
C. transnational marketing strategy.
D. pancentric marketing strategy.
E. international marketing strategy.

 123. Global marketing strategy refers to
A. the strategy of transnational firms not to employ adaptive marketing techniques when there are cultural differences, but to redefine their target markets instead.
B. the strategy of transnational firms not to employ adaptive marketing techniques when there are cultural differences, but to redirect their marketing resources towards customer education.
C. the strategy of transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
D. the strategy of seeking out already established firms in other nations and selling them the rights to manufacture and distribute the firm's products through host nation's established infrastructure.
E. the strategy currently used by most U.S. domestic firms that when entering a new international market to select products that require the least amount of product adaptation or consumer education.

 124. Which of the following types of firms would be most likely to use a global marketing strategy?
A. Multidomestic
B. Multinational
C. Multicountry
D. Transnational
E. Transborder

 125. The appreciation of fashion, music, and a desire for novelty and trendier designs and images
A. are preferences found more in American teenagers than in most other cultures.
B. actually begins at age 10, but begins to decline significantly, as students enter high school.
C. ironically is found more for teenagers who cannot afford to make those purchases than for those who can.
D. are preferences of teenagers around the world regardless of whether they live in Europe, North America, or South America.
E. once established, rarely if ever changes, which is why identifying these consumers is so important.

 126. Thirteen to nineteen year olds in Europe, North and South America, and the industrialized nations of Asia
A. are more similar than different regarding their purchase behavior.
B. are becoming more similar, but still differ significantly in terms of fashion and design.
C. are rebelling against the Americanization of fashion and culture.
D. have some very different appreciation of fashions and music.
E. are more and more influenced by Asian culture than European culture.

 127. A brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs is referred to as a
A. global brand.
B. international brand.
C. multinational brand.
D. transnational brand.
E. multi-national product category.

 128. Global brand refers to
A. two or more domestic products that coincidentally share the same brand name but represent two completely unrelated products or manufacturers.
B. two or more international products that coincidentally share the same brand name but represent two completely unrelated products or manufacturers.
C. a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.
D. a product that is essentially the same, but that has had minor adaptations made to meet the more specific needs of different nations.
E. a brand marketed under the different names in multiple countries with similar and centrally coordinated marketing programs.

 129. Which of the following statements regarding global brands is most accurate?
A. A global brand is marketed under the same name in multiple countries.
B. A global brand has dispersed marketing centers, each responsible for a specific region.
C. A global brand alters product formulation or service for each geographical region.
D. A global brand delivers the multiple benefits based on the GDP of each country.
E. A global brand is a collaborative effort amongst several different national firms.

 130. Which of the following statements about global brands is most accurate?
A. A global brand is marketed under the different names but uses identical ads for all markets.
B. A global brand has centrally coordinated marketing programs.
C. A global brand alters product formulation or service for each geographical region.
D. A global brand delivers the multiple benefits based on the GDP of each country.
E. A global brand is a collaborative effort amongst several different national firms.

 131. A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs. Global brands have the same product formulation or service concept, deliver the same benefits to consumers, and use consistent advertising across multiple countries and cultures. However, adaptations of global brands are made
A. if required by government regulations in the host market, but for no other reason.
B. only in its initial introduction into a market and only until the brand is recognized.
C. by domestic competitors causing brand confusion and loss of market share.
D. only when necessary to better connect the brand to consumers in different markets.
E. when there is a serious drop in market share.

 132. Customer groups living in many countries or regions of the world that have similar needs or seek similar features and benefits from products or services are referred to as
A. global consumers.
B. nondomestic consumers.
C. international consumers.
D. multinational consumers.
E. transnational consumers.

 133. Global consumers refer to
A. consumer groups living in many countries or regions of the world that have similar needs or seek similar features and benefits from products or services.
B. customers within a nation who consider the entire globe their personal marketplace basing their purchases on product value.
C. all potential consumers for any and all products or services regardless of cultural, ethnic, or national origins.
D. consumer groups living in many countries or regions of the world that have similar needs but seek customized features and benefits, from products or services, that reflect their individual cultures.
E. multi-national organizations whose products incorporate raw materials, assembly, and distribution contributions from multiple nations before they go to market.

 134. Which of the following statements about the emergence of a networked global marketspace is most accurate?
A. The chief advantage of the global marketspace over the traditional bricks-and-mortar stores for customers is the ability to shop anywhere, at any time, and at the lower cost.
B. More business-to-consumer marketing is done on the Internet than business-to-business marketing.
C. The most active participants in the networked global marketspace are companies in developing nations.
D. All business in the networked global marketspace is conducted in English or Unispeak.
E. Marketspace creates an unfair competitive environment for emerging nations.

 135. Cross-cultural analysis refers to
A. a study that determined that consumers use basically the same criteria when purchasing gifts for their families regardless of their country or culture.
B. a study that determined that consumers use basically the same criteria when purchasing raw materials for industrial use.
C. the study of similarities and differences among consumers in two or more nations or societies.
D. the study of buying behaviors within a given nation to identify similarities and differences.
E. the study of buying behaviors within a given nation that links a person's actions to the cultural group with which he or she identify most.

 136. The study of similarities and differences among consumers in two or more nations or societies is referred to as __________.
A. market synthesis
B. cross-cultural analysis
C. international sociographics
D. transnational anthropology
E. multicultural psychographics

 137. Personally or socially preferable modes of conduct or states of existence that tend to persist over time are referred to as _____.
A. customs
B. ethics
C. values
D. culture
E. beliefs

 138. Values refer to
A. personally or socially held beliefs that are consistent within a given culture.
B. the beliefs that dictate a person's behavior often derived from a religious code of conduct.
C. personally or socially preferable modes of conduct or states of existence that tend to persist over time.
D. the innate sense of what a person considers to be right or wrong in terms of his or her own conduct when dealing with others.
E. personal traits regarding honesty and integrity and one's preferable modes of conduct or states of existence that have been passed down from generation to generation.

 139. The reverence that Japan shows towards its elderly is an example of the nation's _____.
A. values
B. beliefs
C. customs
D. religion
E. cultural diversity

 140. Almost all countries have some division of social class. The determinant factor for assigning these classes may differ from country to country. For example, in the United States the primary determinant factor for assigning social class is occupation, in India it is birthright, in China it is geographical region and education, and in Singapore it is income. These differences are best explained in terms of a country's
A. cultural mores.
B. beliefs.
C. customs.
D. religion.
E. values.

 141. Which of the following examples best demonstrates a company's appreciation of another country's values?
A. American companies in Germany encourage the use of all types of credit cards.
B. In Brazil, American companies are extremely careful to keep to a strict agenda and time schedule, even though an informal structure is preferred.
C. Advertising bath products by portraying intimate scenes between husbands and wives, in countries where personal privacy is important.
D. McDonald's restaurants in India serve a full line of products except for hamburgers made from beef.
E. All of the above.

 142. Which of the following examples best demonstrates a company's appreciation for another country's values?
A. A German company allows customers to make large purchase using lay-away (paying small amounts until the item is paid for and delivered.
B. In Brazil, an appliance maintenance firm schedules service appointments allowing only 15 minutes of leeway for missed calls or no shows.
C. In Japan, a spa owner created special exercise classes for husbands and wives.
D. In India, a popular hamburger chain separated its dining area by color for people who wanted to eat beef and those who did not.
E. Calvin Klein reduced the number of outdoor advertising placements showing scantily clad models in countries with predominantly Muslim populations.

 143. What is considered normal and expected about the way people do things in a specific country are referred to as __________.
A. morals
B. ethics
C. values
D. customs
E. beliefs

 144. Customs refer to
A. what is considered normal and expected about the way people do things in a specific country.
B. those actions or activities within a community that are unique or distinctly different from any other group.
C. actions or behaviors, that are repeated over time, that carry a specific meaning only to a unique group, nationality, or ethnicity.
D. traditions amongst a group of people, a nation, or ethnicity, that affect their purchase behaviors.
E. what would be considered unusual or unexpected, and even unacceptable, about the way people do things in a specific country.

 145. M Company executives were perplexed when the company's Scotch-Brite floor-cleaning product initially produced lukewarm sales in the Philippines. A Filipino employee explained that consumers generally clean floors by pushing coconut shells around with their feet. 3M changed the shape of the pad to a foot and sales soared. 3M changed its product in response to a Filipino _____.
A. value
B. belief
C. custom
D. idiosyncrasy
E. demographic pattern

 146. KFC in Japan sells tempura crispy strips. In northern England, it stresses gravy and potatoes, while in Thailand it offers fresh rice. In Holland instead of potatoes, KFC offers customers a potato and onion croquette. In France, KFC sells pastries alongside its chicken. These examples illustrate that KFC exhibits an understanding of and appreciation for the __________ of other societies.
A. demographics
B. symbols
C. customs
D. sensitivities
E. selective perception

 147. The Foreign Corrupt Practices Act (1977)
A. has different levels of punishment based upon the wealth of the host nation.
B. regulates only the behavior of U.S. businesses conducting business in the U.S.
C. makes the theft of trade secrets by foreign entities a federal crime in the U.S.
D. is a unilateral agreement the U.S. made with several developing nations.
E. makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.

 148. A law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country is referred to as the
A. International Law for Egalitarian Ethics.
B. International Fair Practices Act.
C. Law of International Equity.
D. International Law of Ethical Business Practices.
E. Foreign Corrupt Practices Act.

 149. Which of the following statements about bribery is most accurate?
A. Bribes, kickbacks, and payoffs offered to entice someone to commit an illegal or improper act is deemed corrupt in some cultures but not in others.
B. The world's major exporting nations have agreed to make bribery of foreign government officials a national offense.
C. Bribery paid to foreign companies is in some cases, a tax-deductible expense in the United States.
D. It is a crime for U.S. corporations to bribe an official of a foreign government or political party unless preapproved by the U.S. judiciary.
E. It is illegal for a U.S. corporation to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.

 150. Cultural symbols refer to
A. ideas that can be protected by international copyrights.
B. ideas that cannot be expressed by words or characters.
C. things that represent values that exist solely within a nation's boundaries.
D. things that represent ideas and concepts.
E. icons that consist of pictures or designs that represent ideas and concepts that are considered to be universal.

 151. Cultural symbols are things that
A. can be protected by international copyrights.
B. cannot be expressed by words or characters.
C. represent values that exist solely within a nation's boundaries.
D. represent ideas and concepts.
E. consist of pictures or designs that represent ideas and concepts that are considered to be universal.

 152. The representations of ideas and concepts to which different cultures often attach different meanings are referred to as
A. universal symbols.
B. symbolic concepts.
C. ideological representations.
D. cultural representations.
E. cultural symbols.

 153. By adroitly using __________, global marketers can tie positive symbolism to their products, services, and brands to enhance their attractiveness to consumers.
A. cultural symbols
B. visual icons
C. trademarks
D. brand names
E. ethnic emblems

 154. Tiffany & Company knows that Japanese are superstitious about the number 4. As a result, Tiffany sells its fine glassware and china in sets of five, not four, in Japan. Tiffany has used its knowledge of __________ to avoid connecting its products with the number 4.
A. cultural symbols
B. visual icons
C. trademarks
D. brand names
E. ethnic emblems

 155. A field of study that examines the correspondence between symbols and their role in the assignment of meaning for people is referred to as
A. semiotics.
B. symbiotics.
C. back translation.
D. symbolic linguistics.
E. cross-cultural analysis.

 156. Semiotics refers to
A. a field of study in marketing linguistics that identifies the connotative meanings behind words in order to create the most effective product or brand names.
B. a field of study in marketing linguistics that identifies the connotative meanings behind words in order to create the most effective advertising messages.
C. a field of study that examines the correspondence between symbols and their role in the assignment of meaning for people.
D. a field of linguistics that translates words into internationally recognized symbols to help companies carry their product message across international boundaries.
E. the combination of a symbol from one language and the verbal message from another in order for companies to standardize their brand across international boundaries.

 157. Someone who wanted to study the fact that in some nations black is a sign of mourning while in other nations white is a sign of mourning would be studying
A. semiotics.
B. semantics.
C. semaphorics.
D. cultural symbolism.
E. cultural linguistics.

 158. In German, the word "Schuld" which means credit, is the same as the German word for __________.
A. wealth
B. desire
C. fear
D. dreams
E. guilt

 159. Even though there are hundreds of different languages and dialects, the three major languages used in global diplomacy and commerce are
A. English, Japanese, and German.
B. English, French, and Spanish.
C. Japanese, Spanish and French.
D. Japanese, Spanish and English.
E. Spanish, English, and Chinese.

 160. The practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors is referred to as
A. locution.
B. heuristics.
C. transliteration.
D. back translation.
E. cross-cultural paraphrasing.

 161. If you were responsible for marketing communications at a company that manufactures office supplies and had to provide product literature to be distributed in France, you would be wise to use ___________, whereby you have someone to translate your literature from American English into French, and then have someone else in France translate the French into American English.
A. back talk
B. back translation
C. double talk
D. double entendre
E. double indemnity

 162. A New York carwash owner wanted to open a carwash in Quebec, Canada. He hired a U.S. translator to create signage for the new venture and to design some simple advertising. It was not until the business was opened that he learned that he should have used __________. His French signs actually said "car bath" instead of "car wash."
A. unispeak
B. back translation
C. semiotics
D. semantic symbolism
E. linguistic exchange

 163. Kit Kat (see Figure 7-3 above) is pronounced "kitto katsu" in Japanese, which roughly translates to "I hope you win." Japanese teens eat Kit Kat bars for good luck, particularly when taking crucial school exams. This is the result of
 
Figure 7-3
A. faulty semiotics.
B. semantic symbolism.
C. a fortuitous mistake in back translation.
D. an intentional manipulation of a cultural icon.
E. a clever example of intentional transliteration.

 164. The belief that aspects of one's culture are superior to another's is referred to as
A. cultural ethnocentricity.
B. consumer ethnocentrism.
C. cultural commitment.
D. cross-cultural bias.
E. cultural imperialism.

 165. The tendency to believe it is inappropriate, indeed immoral, to purchase a foreign-made product is referred to as
A. cultural ethnocentricity.
B. consumer ethnocentrism.
C. xenophobia.
D. cross-cultural bias.
E. cultural imperialism.

 166. Consumer ethnocentrism refers to
A. the belief that all products that are foreign made are cheap and of poor quality.
B. the belief that one should only purchase produce that is in season and grown locally.
C. the belief that all corporations are corrupt and the consumer must look out for himself.
D. the tendency to believe that the only products that are of true quality are those that are manufactured in one's own country.
E. the tendency to believe it is inappropriate, indeed immoral, to purchase a foreign-made product.

 167. A commercial depicts a young son asking his mother why they have to move. The mother's response indicates because Americans are buying products made in other countries, the boy's father has lost his job. This commercial reflects an attitude of
A. cultural semiotics.
B. the trade feedback effect.
C. protectionism.
D. cultural ethnocentricity.
E. consumer ethnocentrism.

 168. A woman from Bloomington, Indiana, is in Chicago for a weekend of shopping and fine dining. After shopping in at least 10 different stores and trying at least 20 different outfits, she finds exactly what she has been looking for—the perfect linen suit. At the register however, she notices that the label indicates that the suit was made in Ireland. Although she agrees with the salesclerk that the suit is indeed perfect, and that Irish linen is considered to be some of the best, she does not purchase that suit; instead she selects a less flattering, more expensive suit that contains a label stating it was made in the USA. This behavior would likely be an example of
A. uncertainty avoidance.
B. cultural ethnocentricity.
C. consumer ethnocentrism.
D. cultural semiotics.
E. cultural bias.

 169. Not so many years ago, many U.S. consumers thought Americans who purchased Japanese- made radios, televisions, and other electronic equipment were behaving not only inappropriately, but immorally. U.S. consumers who thought buying Japanese products was wrong were exhibiting
A. back translation.
B. consumer ethnocentrism.
C. culture shock.
D. consumer bias.
E. cultural acclimation.

 170. The slogan "Buy American-made products. Keep America working."—Jim Brown, Cleveland, Ohio, USA, reflects
A. the American value of working hard for your money.
B. patriotism in a time of political uncertainty.
C. an American attitude of consumer ethnocentrism.
D. a promotional campaign by an American manufacturer.
E. the American value of capitalism.

 171. Since global marketing is affected by economic considerations, a scan of the global marketplace should include a comparative analysis of the economic development in different countries, an assessment of the economic infrastructure in the countries, determination of consumer income in different countries, and
A. an analysis of cultural diversity within the country under consideration.
B. regulatory constraints regarding contracts, mergers, and partnerships.
C. consideration of a country's currency exchange rates.
D. an assessment of language differences including dialect variation.
E. political and ideological differences between the countries involved.

 172. Since global marketing is affected by economic considerations, a scan of the global marketplace should include a comparative analysis of the economic development in different countries, determination of consumer income in different countries, recognition of a country's currency exchange rates, and
A. an analysis of cultural diversity within the country under consideration.
B. regulatory constraints regarding contracts, mergers, and partnerships.
C. an assessment of language differences including dialect variation.
D. political and ideological differences between the countries involved.
E. an assessment of the economic infrastructure in these countries.

 173. Since global marketing is affected by economic considerations, a scan of the global marketplace should include, determination of consumer income in different countries, recognition of a country's currency exchange rates, an assessment of the economic infrastructure in these countries, and
A. an analysis of cultural diversity within the country under consideration.
B. regulatory constraints regarding contracts, mergers, and partnerships.
C. an assessment of language differences including dialect variation.
D. a comparative analysis of the economic development in different countries.
E. political and ideological differences between the countries involved.

 174. Since global marketing is affected by economic considerations, a scan of the global marketplace should include, determination of consumer income in different countries, a comparative analysis of the economic development in different countries, an assessment of the economic infrastructure in these countries, and
A. an analysis of cultural diversity within the country under consideration.
B. regulatory constraints regarding contracts, mergers, and partnerships.
C. an assessment of language differences including dialect variation.
D. political and ideological differences between the countries involved.
E. recognition of a country's currency exchange rates.

 175. The two major classifications of stages of economic development helpful to global marketers are
A. capitalistic and communist.
B. developed and underdeveloped.
C. developed and developing.
D. capitalistic and developing.
E. free enterprise and planned economy.

 176. Countries moving from an agricultural to an industrial economy are referred to as __________ countries.
A. capitalistic
B. emerging
C. developing
D. agrarian
E. evolving

 177. Private enterprise dominates __________ countries although they have substantial public sectors as well.
A. developing
B. evolving
C. developed
D. emerging
E. third-world

 178. The largest, but poorest socioeconomic group of people in the world are often referred to as being at the
A. bottom of the pyramid.
B. pivot point of economic growth.
C. focal point of economic change.
D. bottom of the economic pool.
E. edge of global evolution.

 179. Bottom of the pyramid refers to
A. the largest, but poorest socioeconomic group of people in the world.
B. the tenth lowest firm, in terms of market share, within any given industry.
C. the last link in the chain between the manufacturer and the ultimate consumer.
D. the department within a firm with the least input into how the organization operates.
E. the largest and most powerful socioeconomic group of people in the world whose combined buying power essentially dominates the world's economy.

 180. Motorola developed a low-cost cell phone with battery life as long as 500 hours for rural villagers without regular electricity and an extra-loud volume for use in noisy markets. This phone, a no-frills design priced at $40 is most likely targeted to people at the
A. bottom of the pyramid.
B. pivot point of economic growth.
C. focal point of economic change.
D. bottom of the economic pool.
E. edge of global evolution.

 181. A country's communication, transportation, financial, and distribution systems are considered to be its
A. capital infrastructure.
B. fixed-asset infrastructure.
C. economic infrastructure.
D. geopolitical network.
E. network infrastructure.

 182. Economic infrastructure refers to
A. a nation's military-industrial complex.
B. a country's governmental services.
C. the people and the wealth of a nation.
D. a country's communication, transportation, financial, and distribution systems.
E. all of a country's natural resources, whether or not they are currently being exploited.

 183. In Latvia, the only six-lane highway connects Riga with Moscow. Otherwise, the roads are two-lane and many are made of cobblestones or bricks. This limits the speed with which deliveries can be made and means that delivery trucks must be quite small. The road network in Latvia is an example of its
A. capital infrastructure.
B. political infrastructure.
C. economic infrastructure.
D. geopolitical network.
E. ecosystem.

 184. Two-thirds of the commercial transactions in Russia involve non-monetary forms of payment. This is a function of the country's __________.
A. capital infrastructure.
B. political infrastructure.
C. economic infrastructure.
D. geopolitical network.
E. financial exchange system.

 185. Although Russia now has a free economy, there are still some problems within the financial and legal system with the notion of
A. private property.
B. product promotion.
C. paid advertising.
D. community property.
E. foreign exchange rates.

 186. Foreign countries with very low per capita incomes may, nonetheless, be attractive markets for expensive goods. To get a more accurate picture of a country's purchasing power, a country's __________ must also be considered.
A. total income
B. total area
C. geographical location
D. culture
E. income distribution

 187. Generally, as the proportion of middle-income households in a country __________, the __________ a nation's purchasing power.
A. increases; greater
B. increases; less
C. decreases; greater
D. decreases; less
E. There is no relationship between middle-income households and the nation's purchasing power.

 188. Generally, as the proportion of middle-income households in a country __________, the nation's purchasing power increases.
A. increases
B. decreases
C. levels off
D. reaches 33% of the total population
E. reaches 50% of the total population

 189. Generally, as the proportion of middle-income households in a country increases, the nation's purchasing power __________.
A. increases
B. decreases
C. levels off
D. becomes less of an economic priority
E. becomes progressively unstable

 190. The practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small businesses or other income-generating activities, is referred to as
A. macrofinance.
B. microfinance.
C. microcapitalization.
D. macrocapitalization.
E. collateral-free financing.

 191. Microfinance refers to
A. the practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small businesses or other income-generating activities in exchange for a percentage of future profits rather than repaying of loans.
B. the practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small businesses or other income-generating activities.
C. the lending of money contingent upon a daily accounting of all expenditures made and all income generated.
D. the day-to-day expenses such as coffee for the office, flowers for anniversaries, etc. that are considered too small or too insignificant to be itemized and instead are listed as discretionary funds.
E. the expenditures within an individual household assigned to each individual family member whether they personally generate income or not.

 192. Hindustan Lever realized it could not sell to the rural poor in India unless it found ways to distribute its products such as soap, shampoos, and laundry detergents. Lever provided start-up loans to women to buy stocks of products to sell to local villagers. Today, about 1300 poor women sell Lever products in 50,000 villages in India and account for about 15 percent of the company's rural sales in that country. This is an example of Lever's use of
A. macrofinance.
B. macrocapitalization.
C. microfinance.
D. microcapitalization.
E. collateral-free finance.

 193. Hindustan Lever realized it could not sell to the rural poor in India unless it found ways to distribute its products such as soap, shampoos, and laundry detergents. Lever provided start-up loans to women to buy stocks of products to sell to local villagers. Today, about 1300 poor women sell Lever products in 50,000 villages in India and account for about 15 percent of the company's rural sales in that country. This effort was called __________.
A. Project Open Roads
B. Project Fresh Start
C. Project Tikva
D. Project Shakti
E. Project Helping Hand

 194. The price of one country's currency expressed in terms of another country's currency is referred to as
A. balance of price.
B. currency exchange rate.
C. reciprocity price.
D. balance of payments.
E. equity exchange factor.

 195. Currency exchange rate refers to
A. the unit equivalency of all international currency.
B. the ratio of a nation's basic unit of currency to the international gold standard.
C. the ratio of a nation's basic unit of currency relative to its own cache of gold.
D. the price of one country's currency expressed in terms of another country's currency.
E. the unit of wealth (gold, oil, diamonds, etc.) upon which a nation basis its national currency.

 196. When foreign currencies can buy more U.S. dollars, U.S.
A. products are more expensive and worth less to foreign customers.
B. products are more expensive and worth more to foreign customers.
C. products are less expensive and worth more to foreign customers.
D. economists consider it an indicator of an impending long-term economic down swing.
E. American consumers buy in large quantities and stockpile in fear of an impending economic crisis.

 197. Which of the following statements concerning currency exchange rates is most accurate?
A. Fluctuations in exchange rates among the world's currencies are of critical importance in global marketing.
B. Fluctuations in exchange rates among the world's currencies are of minor importance in global marketing.
C. Exchange rate fluctuations are relatively rare, but they usually have serious long-term consequences.
D. Exchange rate fluctuations are almost non-existent due in great part to the Euro.
E. Exchange rate fluctuations affect the financial sector but rarely reaches the consumer.

 198. Chrysler Corporation wanted to sell its Jeeps in Japan. The car was priced in U.S. dollars at about $19,000, but when it reached the Japanese car showrooms, its price was over 31,000 Japanese yen, and the Japanese could not afford to buy it. Its price was set without regard for the
A. balance of price.
B. currency exchange rate.
C. reciprocity price.
D. balance of payments.
E. equity exchange factor.

 199. Fluctuations in __________ among the world's currencies have direct impact on the sales and profits made by global companies.
A. immigration
B. transportation
C. reciprocity
D. exchange rates
E. equity

 200. The PRS group maintains a Web site that can be used to determine
A. changing demographic and psychographic data for each country in the registry.
B. a country's political risk ratings using multiple databases of country specific information.
C. the tariffs of each country and their relative effect on product/services sales.
D. the rankings of American products relative to domestic equivalents in each country.
E. changing social trends within different segments of the economy.

 201. Standards for registration and certification of a manufacturer's quality management and quality assurance system are __________ standards.
A. XK-90
B. 7-300ZX
C. IPD 2000
D. ISO 9000
E. IOS 14000

 202. Japanese car safety rules require all automobile replacement parts to be Japanese and EU nations have 10,000 rules that specify how goods are to be made and marketed. These are examples of
A. EU ISO 9000 quality standards.
B. trade barriers.
C. universal codes.
D. binding requirements.
E. "the price of doing business."

 203. A global market-entry strategy in which a company produces goods in one country and sells them in another country is referred to as _____.
A. exporting
B. facilitating
C. countertrade
D. foreign exchange
E. multi-national marketing

 204. Exporting refers to
A. a global market-entry strategy in which a company will sell its products in international markets but not in its own domestic market.
B. a global market-entry strategy in which a company produces goods in one country and sells them in another country.
C. a global market-entry strategy in which a company will manufacture its product in several countries at the same time using different brand names and slight product modifications.
D. a global market-entry strategy in which a company will manufacture products specifically designed for non-domestic markets, but sell those products to distributers who take title and resell the products to different companies around the world.
E. a global market-entry strategy whereby a product is made in one country, assembled in a second country, and ultimately marketed to a third country.

 205. A firm's profit potential and control over marketing activities __________ as it moves from exporting to direct investment as a globe market-entry strategy.
A. becomes more stable
B. increases
C. levels off
D. decreases
E. becomes more unpredictable

 206. A firm's profit potential and control over marketing activities increases as it moves from exporting to direct investment as a globe market-entry strategy. But so does the firm's
A. likelihood of long-term success.
B. financial commitment and risk.
C. vulnerability to political changes and doctrines.
D. need for a more educated workforce.
E. need for a larger workforce.

 207. Indirect exporting refers to
A. offering the right to a trademark, patent, trade secret, or similarly valued item of intellectual property in return for a royalty or fee.
B. contracting with a foreign firm to manufacture products according to stated specifications.
C. the combined investment of a foreign country and a local firm to create a local business.
D. when a firm sells its domestically-produced goods in a foreign country through an intermediary.
E. when a firm sells its domestically-produced goods in a foreign country without intermediaries.

 208. When a firm sells its domestically produced goods in a foreign country through an intermediary, it is referred to as
A. direct exporting.
B. indirect exporting.
C. licensing.
D. contract manufacturing.
E. foreign assembly.

 209. The U.S. motorcycle manufacturer Harley-Davidson uses intermediaries to sell its motorcycles in numerous nations outside the U.S. Harley-Davidson uses
A. direct exporting.
B. indirect exporting.
C. licensing.
D. contract manufacturing.
E. foreign assembly.

 210. Indirect exporting occurs when a firm sells its domestically produced goods in a foreign country
A. in violation of a quota.
B. without paying import duties.
C. without paying export duties.
D. through an intermediary.
E. without billing in blocked currency.

 211. When a U.S. airplane manufacturer sells its airplanes to business executives in Germany without using intermediaries, it is referred to as
A. direct exporting.
B. indirect exporting.
C. licensing.
D. foreign manufacturing.
E. foreign assembly.

 212. Direct exporting refers
A. offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.
B. contracting with a foreign firm to manufacture products according to certain specifications.
C. when a foreign country and a local firm invest together to create a local business.
D. when a firm sells its domestically-produced goods in a foreign country through an intermediary.
E. when a firm sells its domestically-produced goods in a foreign country without intermediaries.

 213. Licensing refers to
A. offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.
B. contracting with a foreign firm to manufacture products according to certain specifications.
C. when a foreign country and a local firm invest together to create a local business.
D. having a company handle its own exports directly, without intermediaries.
E. exporting through an intermediary, which often has the knowledge and means to succeed in selling a firm's product abroad.

 214. Which form of entry into a global market makes a firm vulnerable to harm to its name or reputation?
A. Direct exporting
B. Indirect exporting
C. Licensing
D. Contract manufacturing
E. Joint ventures

 215. Offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee is referred to as
A. direct exporting.
B. indirect exporting.
C. licensing.
D. contract manufacturing.
E. outside branding.

 216. Tricon was the restaurant division of PepsiCo until it was spun off in 1997. Since then Tricon has opened 6,000 KFC restaurants abroad. It has 158 in Indonesia and more than 500 restaurants in China. All are locally owned, and the owner pays a fee to Tricon. Tricon is engaged in
A. direct exporting.
B. indirect exporting.
C. licensing.
D. contract manufacturing.
E. foreign assembly.

 217. A form of low risk and capital-free entry into international markets that includes local manufacturing and local assembly is referred to as
A. indirect exporting.
B. direct ownership.
C. joint ventures.
D. licensing.
E. direct exporting.

 218. To circumvent competing with Japanese firms through their traditional channel of distribution, Fran Wilson Creative Cosmetics Moodmatcher lip coloring, is sold in which type of retail venue?
A. Grocery stores
B. Flower shops
C. Beauty salons
D. Department stores
E. Gift stores

 219. Two variations on licensing are
A. contract manufacturing and franchising.
B. contract manufacturing and joint ventures.
C. foreign assembly and franchising.
D. contract manufacturing and contract assembly.
E. foreign assembly and joint ventures.

 220. Contract manufacturing refers to
A. offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.
B. contracting with a foreign firm to manufacture products according to stated specifications.
C. contracting between a foreign country and a local firm to invest together to create a local business.
D. having a company handle its own exports directly, without intermediaries.
E. exporting through an intermediary, which has the knowledge and means to succeed in selling a firm's product abroad.

 221. Companies, which contract with a foreign firm to manufacture products according to stated specifications, are using
A. direct exporting.
B. indirect exporting.
C. licensing.
D. contract manufacturing.
E. contract assembly.

 222. New Balance Athletic Shoes, Inc. claimed its shoes were "made in the USA" when actually the shoe soles and most of the uppers were made in China. The shoes were assembled in the U.S. The Federal Trade Commission did not think that assembling the shoes in the U.S. was enough to use the "made in the USA" logo. New Balance actually used
A. direct exporting.
B. indirect exporting.
C. licensing.
D. contract manufacturing.
E. contract assembly.

 223. Contracting with a foreign firm to assemble parts and components that have been shipped to that country is referred to as
A. direct exporting.
B. indirect exporting.
C. licensing.
D. contract manufacturing.
E. contract assembly.

 224. Contract assembly refers to
A. offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.
B. contracting with a foreign firm to assemble parts and components that have been shipped to that country.
C. when a foreign company and a local firm invest together to create a local business.
D. having a company handle its own exports directly, without intermediaries.
E. exporting through an intermediary, which has the knowledge and means to succeed in selling a firm's product abroad.

 225. Which of the following is an advantage inherent in the use of licensing?
A. The licensee retains control of its product.
B. The licensee is protected from creating a potential competitor.
C. The licensee gains information about the dynamics of the market.
D. There is an exemption from domestic trade regulations.
E. There is an increase in potential profit gains.

 226. Which of the following is an advantage inherent in the use of licensing?
A. The foreign country gains employment.
B. There is an exemption from domestic trade regulations.
C. There is an increase in potential profit gains.
D. The licensee retains control of its product.
E. The licensee is protected from creating a potential competitor.

 227. Which of the following is a disadvantage associated with licensing?
A. Licensor has lower wages and prices
B. Licensor may create its own competition
C. Licensor has increased profit potential
D. Licensor has complete control of the product
E. The firm's reputation is improved if it selects a poor choice as a licensee

 228. Tricon was the restaurant division of PepsiCo until it was spun off in 1997. Since then Tricon has opened 6,000 KFC restaurants abroad. It has 158 in Indonesia and more than 500 restaurants in China. All are locally owned, and the owner pays a fee to Tricon. Tricon is engaged in
A. contract assembly.
B. a joint venture.
C. contract manufacturing.
D. a partnership.
E. franchising.

 229. A joint venture refers to
A. offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.
B. contracting with a foreign firm to manufacture products according to certain specifications.
C. when a foreign company and a local firm invest together to create a local business.
D. having a company handle its own exports directly, but using intermediaries for importing.
E. exporting through an intermediary, which often has the knowledge and means to succeed in selling a firm's product abroad.

 230. A global market-entry strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits of the new company foreign company and a local firm invest together to create a local business, it is referred to as
A. licensing.
B. joint venture.
C. direct exporting.
D. local assembly.
E. local manufacturing.

 231. Joint venture refers to
A. a global marketing strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division.
B. offering the right to a trademark, patent, trade secret, or similarly valued item of intellectual property in return for a royalty or fee.
C. contracting with a foreign firm to manufacture products according to stated specifications.
D. when a firm sells its domestically-produced goods in a foreign country through a paid intermediary.
E. a global market-entry strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits of the new company foreign company and a local firm invest together to create a local business.

 232. PepsiCo and the __________ entered into a joint venture to market Frito-Lay's, Cheetos, Ruffles, and Doritos, in Israel.
A. The Strauss Group
B. Ericsson
C. General Mills
D. Hebrew National
E. CGCT

 233. Direct investment in international marketing refers to
A. offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.
B. contracting with a foreign firm to manufacture products according to certain specifications.
C. a national market-entry strategy that entails a foreign company and a local firm investing together to create a local business.
D. having a company handle its own exports directly, without intermediaries.
E. a global market-entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division.

 234. A global market-entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division, it is referred to as
A. licensing.
B. local assembly.
C. a joint venture.
D. direct investment.
E. local manufacturing.

 235. Which form of entry into a foreign market requires the greatest commitment?
A. Direct exporting
B. Direct investment
C. Joint venture
D. Licensing
E. Indirect exporting

 236. Both Honda and Toyota have plants in the U.S. that use American labor. This example is an illustration of Honda and Toyota practicing
A. direct exporting.
B. direct investment.
C. joint venture.
D. licensing.
E. indirect exporting.

 237. According to Figure 7-4 above, points "A" and "D" would most likely be __________ and __________ respectively.
 
Figure 7-4
A. joint venture; licensing
B. licensing; exporting
C. licensing; joint venture
D. direct investment; licensing
E. exporting; direct investment

 238. The product strategy of selling virtually the same product in other countries is referred to as
A. product extension.
B. global distribution.
C. limited adaptation.
D. product assimilation.
E. product integration.

 239. The company that makes Breathe-Right nasal strips sells the same product in other countries. This is an example of which type of international product strategy?
A. Product extension
B. Product customization
C. Product adaptation
D. Product invention
E. Product integration

 240. Changing a product in some way to make it more appropriate for a country's climate or preferences is an example of which type of product strategy?
A. Product extension
B. Product customization
C. Product adaptation
D. Product invention
E. Product integration

 241. KFC in Japan altered the sweetness of its coleslaw to appeal to Japanese tastes. This is an example of which type of international product strategy?
A. Product extension
B. Product customization
C. Product adaptation
D. Product invention
E. Product integration

 242. Designing a product to serve the unmet needs of a foreign nation is which type of product strategy?
A. Product extension
B. Product customization
C. Product adaptation
D. Product invention
E. Product integration

 243. Nescafé coffee is marketed using different coffee blends and promotional campaigns to match consumer preferences in different countries. For example Nescafé generally emphasizes the taste, aroma, and warmth of shared moments in its advertising around the world. However in Thailand Nescafé is advertised as a way to relax from the pressures of daily life. Nescafé is using which type of product strategy?
A. Product extension
B. Product customization
C. Product adaptation
D. Dual adaptation
E. Dual integration

   
Figure 7-5

 244. According to Figure 7-5 above, cell "A" refers to which type of product and promotion strategy?
A. Product extension strategy
B. Communication adaptation strategy
C. Product adaptation strategy
D. Dual adaptation strategy
E. Product invention strategy

 245. According to Figure 7-5 above, cell "B" refers to which type of product and promotion strategy?
A. Product extension strategy
B. Communication adaptation strategy
C. Product adaptation strategy
D. Dual adaptation strategy
E. Product invention strategy

 246. According to Figure 7-5 above, cell "C" refers to which type of product and promotion strategy?
A. Product extension strategy
B. Product adaptation strategy
C. Dual adaptation strategy
D. Product invention strategy
E. Communication adaptation strategy

 247. According to Figure 7-5 above, cell "D" refers to which type of product and promotion strategy?
A. Product extension strategy
B. Product adaptation strategy
C. Dual adaptation strategy
D. Product invention strategy
E. Communication adaptation strategy

 248. According to Figure 7-5 above, cell "E" refers to which type of product and promotion strategy?
A. Product extension strategy
B. Product adaptation strategy
C. Dual adaptation strategy
D. Product invention strategy
E. Communication adaptation strategy

 249. When a firm sells a product in a foreign country below its domestic price or below its actual cost it is referred to as
A. dumping.
B. surplus marketing.
C. loss-leader pricing.
D. second-market pricing.
E. entrepreneurial pricing.

 250. Dumping refers to
A. illegally disposing of unusable or damaged goods to avoid paying removal fees and/or taxes.
B. when a firm sells damaged or unsellable goods below their original production cost.
C. when a firm sells quality goods at significantly lower prices for the primary purpose of reducing inventory to make room for season goods.
D. when a firm sells quality goods at significantly lower prices for the primary purpose of reducing inventory to make room for newer or more expensive models.
E. when a firm sells a product in a foreign country below its domestic price or below its actual cost.

 251. What is the term for a firm selling a product in a foreign country below its domestic price or below its actual cost?
A. Dumping
B. Surplus marketing
C. Second-market pricing
D. Channeling
E. Entrepreneurial pricing

 252. Eastman Kodak accused Japanese rival Fuji Photo Film of selling photographic paper in the United States for 25 percent of what it charges in Japan. In other words, Eastman Kodak accused Fuji of __________.
A. dumping
B. channeling
C. surplus marketing
D. second-market pricing
E. underbidding

 253. A situation where products are bought in a lower-priced country from a manufacturer's authorized reseller, shipped to higher-priced countries, and sold through unauthorized retailers below the manufacturer's suggested retail price, is referred to as __________.
A. the black market
B. a gray market
C. a monopolized market
D. a globalized market
E. parallel exporting

 254. Gray market refers to
A. the segment of products specifically designed for the need of older buyers.
B. a situation where products are sold through unauthorized channels of distribution.
C. a once active and powerful market that is rapidly becoming the bottom of the barrel.
D. a pricing structure that is based upon "not-quite-clear" price negotiations or "haggling" that is considered acceptable in some countries but not others.
E. the willingness of one party to accept "gifts" in exchange for better prices or price allowances.

 255. Another term for gray market is
A. parallel importing
B. back-channel market
C. negotiation marketing
D. mature market
E. transparent market

 256. The Japanese manufacture tractors for rice paddies. They are smaller than most U.S. tractors and perfect for a weekend farmer who wants to tend to a small garden. The tractors are not sold in the U.S. through any authorized channels, yet they are available in the U.S. at prices below the manufacturer's suggested retail price. What is the term for how these tractors are being sold?
A. On the gray market
B. Under the counter
C. Over the counter
D. Through globalized channels
E. Through a distribution monopoly

 257. The acronym OTC stands for
A. Off the Cuff.
B. Over the Counter.
C. Off-tariff Countries.
D. Outstanding Trade Countries.
E. Off-shore Trade Consortiums.