Q&A Hero

Q: One advantage of direct investment when entering a new global market is thatA. intermediaries have the potential to harm the brand.B. the firm entering the foreign market does not have to pay royalties to the government.C. the company forgoes control over its product.D. the firm gains and uses a better understanding of local market conditions.E. this method is likely to provide the fewest subsidies from the host country's government.

Q: Which form of entry into a foreign market requires the greatest commitment?A. direct exportingB. direct investmentC. joint ventureD. licensingE. indirect exporting

Q: Direct investment in international marketing refers toA. 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.

Q: Starbucks and Tata Global Beverage have together formed Starbuck Coffee A Tata Alliance in order to bring Starbucks to India. The global market-entry strategy is known asA. franchising.B. a joint venture.C. licensing.D. direct investment.E. exporting.

Q: A joint venture refers toA. 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 products abroad.

Q: Yogen Frz is a successful chain of frozen yogurt shops originating in Canada. Archeology Investments has an agreement with the Canadian firm that grants rights to its company to open and operate Yogen Frz shops in Dubai, Oman, Qatar, Bahrain, and Kuwait. Yogen Frz is engaged inA. dual adaptation.B. a joint venture.C. direct exporting.D. indirect exporting.E. franchising.

Q: Yum! Brands, the restaurant division of PepsiCo, has 12,600 KFC restaurants abroad, with more than 3,700 restaurants in China. Many of the latter are locally owned and subject to a contractual agreement that allows the owners to operate the business under the established KFC brand name and according to specific rules. Yum! Brands is engaged inA. contract assembly.B. a joint venture.C. contract manufacturing.D. a partnership.E. franchising.

Q: One variation of licensing is referred to asA. direct investment.B. joint ventures.C. direct exporting.D. franchising.E. dual adaptation.

Q: Select Service Partner (SSP) Group has operations in 30 countries involving food and beverage establishments, often in transit hubs like airports and railway stations. SSP also operates Starbucks locations in airports in Finland, Sweden, and Norway. SSP pays Starbucks a royalty based on sales as well as a fee for each store. In these instances, Starbucks is engaged inA. direct exporting.B. indirect exporting.C. contract manufacturing.D. foreign assembly.E. licensing.

Q: All of the following are disadvantages of licensing EXCEPT:A. the licensor reduces its potential profits gained from product sales.B. the foreign country gains employment by having the product manufactured locally.C. the licensor forgoes control of its product.D. should the licensee prove to be a poor choice, the name or reputation of the company may be harmed.E. the licensor may be creating its own competition.

Q: Which of the following is a disadvantage associated with licensing?A. The licensee pays lower wages and sells at lower prices.B. The licensor may create its own competition.C. The foreign government dislikes it because it does not increase local employment.D. This is the most expensive and risky method for global expansion.E. The firm's brand does not get international exposure.

Q: All of the following are advantages of licensing EXCEPT:A. the foreign country gains employment by having the product manufactured locally.B. the licensee gains information that allows it to start with a competitive advantage.C. the low risk to the company granting the license.D. the licensor's brand name can never be harmed as a result of the licensee.E. the capital-free entry into a foreign country.

Q: Licensing refers toA. 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.

Q: The prominent global market-entry strategy among small- and medium-sized companies isA. direct exporting.B. direct franchising.C. licensing.D. joint venture.E. direct investment.

Q: Most companies become involved in direct exporting whenA. foreign governments believe that they will benefit the most from allowing the entry of direct exports.B. emerging markets in foreign countries become economically viable.C. they believe their volume of sales will be sufficiently large and easy to obtain so that they do not require intermediaries.D. the domestic market becomes saturated with competing products and services.E. evolving technologies in foreign countries come online.

Q: Direct exporting refers toA. 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. using additional parties when a firm sells its domestically produced goods in another country.E. when a firm sells its domestically produced goods in a foreign country without intermediaries.

Q: To avoid 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 storesB. flower shopsC. beauty salonsD. department storesE. gift stores

Q: Indirect exporting occurs when a firm sells its domestically produced products in a foreign countryA. in violation of a quota.B. without paying import tariffs.C. without paying export duties.D. through a joint venture.E. through an intermediary.

Q: When a firm sells its domestically produced products in a foreign country through an intermediary, it is referred to asA. direct exporting.B. indirect exporting.C. licensing.D. franchising.E. foreign assembly.

Q: Indirect exporting refers toA. offering the right to a trademark, patent, trade secret, or similarly valued item of intellectual property in return for a royalty or fee.B. selling a firm's domestically produced products in a foreign country without interference by that government.C. contracting with a foreign firm to manufacture products according to stated specifications.D. avoiding the use of additional parties when a firm sells its domestically produced products in another country.E. selling a firm's domestically produced products in a foreign country through an intermediary.

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

Q: Figure 6-3 According to Figure 6-3 above, points B and C would most likely represent __________ and __________ options respectively for entering the global marketplace. A. exporting; licensing B. licensing; joint venture C. joint venture; direct investment D. exporting; direct investment E. exporting; joint venture

Q: Figure 6-3 According to Figure 6-3 above, points A and D would most likely represent __________ and __________ options respectively for entering the global marketplace. A. joint venture; licensing B. licensing; exporting C. licensing; joint venture D. direct investment; licensing E. exporting; direct investment

Q: Figure 6-3 According to Figure 6-3 above, point D would most likely represent what option for entering the global marketplace? A. exporting B. joint venture C. direct investment D. franchising E. licensing

Q: Figure 6-3 According to Figure 6-3 above, point C would most likely represent what option for entering the global marketplace? A. exporting B. joint venture C. direct investment D. licensing E. franchising

Q: Figure 6-3 According to Figure 6-3 above, point B would most likely represent what option for entering the global marketplace? A. exporting B. joint venture C. direct investment D. franchising E. licensing

Q: Figure 6-3 According to Figure 6-3 above, point A would most likely represent what option for entering the global marketplace? A. joint venture B. licensing C. exporting D. direct investment E. franchise

Q: As a firm changes its global market-entry strategy from exporting to direct investment, all of the following increase EXCEPT:A. marketing control.B. risk.C. divestiture.D. profit potential.E. financial commitment.

Q: The sales department's identification of an improvement made to a competitor's product would occur during which stage of the organizational buying decision process?A. information searchB. supplier searchC. alternative evaluationD. problem recognitionE. purchase decision

Q: The first stage in the organizational buying decision process isA. information search.B. antecedent states.C. alternative evaluation.D. purchase decision.E. problem recognition.

Q: Organizational buying behavior refers toA. the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.B. the decision-making process that organizations use to establish the need for products and services and 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 the derived supply.E. the process that organizations use to purchase the raw materials and tools used in the manufacturing of a product.

Q: Recently, Matt Kistler, a senior vice-president at Walmart, claimed the company was making progress on achieving three major goals: (1) to be supplied by 100% renewable energy; (2) to create zero-waste; and (3) to increase the sale of renewably-produced products. Walmart is focusing onA. using ecological buying centers.B. complying with government regulations.C. engaging in cause marketing.D. using sustainable procurement.E. meeting ISO 9000 standards.

Q: Starbucks purchases from coffee growers located in more than 20 countries. It pays the coffee farmers a fair price for the beans, the coffee is grown in an ecologically sound manner, and Starbucks invests in the farming communities where the coffees are produced. This is an example ofA. green marketing.B. ISO 14000 certification.C. sustainable procurement.D. ecological procurement.E. cause marketing.

Q: Because many companies are concerned with the depletion of natural resources, supply partnerships often include provisions forA. green marketing.B. regulatory exemptions.C. stakeholder procurement.D. ecological procurement.E. sustainable procurement.

Q: Walmart asked that Procter & Gamble (P&G) electronically link to its computerized cash register scanning system, allowing for direct electronic ordering and replenishing for all of its stores. This way, Walmart can tell P&G what merchandise it needs, along with how much, when, and to which store to deliver on a daily basis. Walmart is engaged in __________.A. ISO 9000 certificationB. ISO 14000 certificationC. a supply partnershipD. sustainable developmentE. cause marketing

Q: Apple, Inc. custom orders the microprocessors for its iMac, iPhone, and iPad. Intel makes chips for the iMac and Samsung produces Apple-designed chips for the iPhone and iPad. Intel and Samsung work with Apple to minimize costs for each of them while maximizing quality, ultimately giving customers good value for their money. This is an example of a(n)A. symbiotic partnership.B. make-buy decision.C. reciprocal agreement.D. supply partnership.E. exclusive dealing.

Q: Milsco Manufacturing emphasizesA. signing lifetime contracts with suppliers to demonstrate its loyalty to them.B. supplier partnerships when designing products for its customers.C. reciprocity arrangements with its customers so that each can maximize profit.D. cobranding as a form of supply partnerships with customers.E. extending healthcare benefits to its suppliers' employees as a result of the Affordable Care Act.

Q: Milsco Manufacturing markets __________ in partnership with its customers.A. motorsB. braking systemsC. transmissionsD. seatsE. customized wheels

Q: A supply partnership refers toA. an arrangement a manufacturer makes with a reseller to handle only its products and not those of competitors.B. 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.C. when a supplier requires a buyer purchasing some products from it to also buy others.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 or increasing the value of products and services delivered to the ultimate consumer.E. the practice whereby a seller requires the purchaser of one product to also buy another item in the line.

Q: The practice of __________, which can affect the normal operation of the free market and limit the flexibility of buyers, is disapproved of by the U.S. Justice department.A. tying agreementsB. just-in-time procurementC. quid pro quoD. supply partnershipsE. reciprocity

Q: In a buyer-seller relationship, reciprocity refers toA. the practice whereby a seller requires the purchaser of one product to buy another item in the line.B. an industrial buying practice in which two organizations, in this case a manufacturer and a supplier, agree to purchase each other's products and services.C. an arrangement a manufacturer makes with a reseller to only handle its products and not those of competitors.D. 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.E. when a supplier requires a buyer purchasing some of its products to also buy others.

Q: Merrill Lynch and Thompson Financial had a three-year, $1 billion project that put workstations on the desks of 25,000 of Merrill Lynch's brokers. These machines put the world of investing information at brokers' fingertips. Thompson, the supplier, was obligated to not only deliver technology and services on time and on budget, but also constantly improve customer-satisfaction levels among Merrill's brokers and customers. This is an example ofA. a reciprocity agreement.B. exclusive dealing.C. supplier alliance.D. a buyer-seller relationship.E. a tying arrangement.

Q: The existence of reciprocal arrangements, the long-term contracts, and the buyer-seller relationships that can evolve into supply partnerships, are all examples ofA. 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. the nature of relationships between buyers and sellers in organizational buying.E. activities that result from extreme competition between manufacturers when there are too few suppliers.

Q: Which of the following characterizes organizational buyer-seller relationships?A. Purchases are often made after brief negotiations if any.B. Supply partnerships may eventually develop.C. Short-term contracts are often prevalent.D. Reciprocal arrangements provide the most flexibility to buyer and seller.E. Delivery schedules are less important than production capacity.

Q: When the John Deere Company employs engineers who work full-time with the company's suppliers to improve their efficiency and quality and reduce their costs, it is practicingA. buyer development.B. make-buy decisions.C. supply partnerships.D. supplier development.E. directive purchasing.

Q: Supplier development refers toA. the deliberate effort by suppliers to build relationships that shape buyers' needs, as well as the needs of ultimate consumers.B. the practice of dividing up large orders among several suppliers rather than a single one to avoid possible manufacturing delays due to bad weather, plant mishaps, union issues, etc.C. 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.D. the practice of establishing a close relationship with one supplier rather than many to insure loyalty and preferential treatment when filling exceptionally large orders.E. the shift of a firm from supplier to manufacturer when repeated experience with a product and excellent buyer/seller relationships make the change both feasible and profitable.

Q: Organizational buying criteria refer toA. the restrictions placed on potential solutions to a problem in a purchase decision.B. the specific qualifications of a potential customer based upon past performance, reliability, and consistency regarding the purchase of an organization's offerings.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 factors that an ultimate consumer would consider that represent both the objective attributes of a brand and the subjective ones to compare different products and brands.

Q: Many companies have broadened their buying objectives to include an emphasis onA. purchasing from as many vendors as possible to avoid component shortfalls.B. purchasing from start-up firms to grow the economy.C. diversifying their product lines and brand extensions to reduce the risk of failure for any one item.D. pricing freezes to maintain consistent quantities demanded from consumers.E. proactively purchasing from minority-owned suppliers and vendors.

Q: The American Red Cross provides disaster relief, among many other services. As a nonprofit organization, its primary buying objective is to __________.A. increase profits through reducing costsB. increase profits through increasing donationsC. diversify its services mix to survive the continued economic downturnD. meet the needs of the groups it servesE. maintain profits through reducing costs and increasing donations

Q: The buying objective for nonprofit firms and government agencies is usually toA. meet the needs of the groups they serve.B. increase profits through reducing costs.C. increase profits through increasing revenues.D. maintain profits through reducing costs and increasing revenues.E. reduce profits through reducing costs and reducing revenues.

Q: The primary buying objective for business firms is usually toA. 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.

Q: The primary organizational buying objective for business firms is toA. create an atmosphere of inclusiveness.B. help smaller companies stay in business.C. increase the proficiency of its buyers.D. help the firm achieve its objectives.E. balance inventory.

Q: Firms selling consumer products or services often try to reach thousands or millions of individuals or households. Firms selling to organizationsA. try to reach tens of millions of wholesalers, retailers, and government units.B. are restricted to far fewer buyers.C. hope to obtain similar numbers of business customers, or even more.D. do not have customers, per se.E. simultaneously purchase from organizational buyers and ultimate consumers.

Q: All of the following statements about the purchase involved in organizational buying are true EXCEPT:A. the length of time required to arrive at a purchase agreement can vary with size of purchase.B. the dollar value of a single purchase made by an organization often runs into thousands or millions of dollars.C. the size of purchase impacts who participates in the purchase decision.D. the size of purchase impacts who makes the final decision.E. the size of the purchase involved in organizational buying is typically smaller than that in consumer buying but it is done more frequently.

Q: Swiss specialty chemical company Ciba is the primary producer of the chemical triclosan, the antibacterial agent in many household products like liquid soap. Consumers may have heard about research suggesting environmental and health risks associated with the cumulative effects of antibacterial agents. Changing consumer purchases provide an example of __________ demand for Ciba's triclosan product.A. appliedB. unitizedC. industrialD. derivedE. consumer

Q: South Cape Ostrich Tanning (SCOT) is a producer of fine ostrich leathers, which are sold to manufacturers that make a variety of products from shoes to car interiors. Demand for SCOT's leather is a result of consumer interest in products like Via La Moda handbags made from this exotic and expensive leather. SCOT has __________ demand for its product.A. derivedB. unitizedC. industrialD. appliedE. reseller

Q: Concert Staging Company provides the stage, roof system, lighting and sound for outdoor concerts and theatrical events. The number of concert and theater events sponsored by various organizations determines how many times the company is hired to provide its services, which often depends on consumer willingness to buy event tickets. Demand for the services provided by Concert Staging Company is would be considered __________.A. derivedB. unitizedC. industrialD. appliedE. reseller

Q: Airbus manufactures commercial aircraft that it sells to a variety of airlines worldwide. Still, demand for its products often depends on rates of air travel among consumers. Demand for Airbus products is referred to as __________ demand.A. unitizedB. resellerC. appliedD. impliedE. derived

Q: Derived demand refers toA. a graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price.B. the demand for industrial products and services that is driven by the demand for consumer products and services.C. the relationship between total revenue and total cost to determine profitability at various levels of output.D. the point on a demand curve where supply and demand intersect.E. the percentage change in quantity demanded relative to a percentage change in price.

Q: Which of the following statements about marketing mix characteristics in organizational buying behavior is most accurate?A. Few large transactions are made over the Internet.B. The actual buyer retains all of the influence in the buying decision.C. Advertising is very simplistic in nature.D. Direct selling to organizational buyers is the rule.E. Only finished goods are sold in this way.

Q: In the organizational buying process, important product or service characteristics includeA. 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.

Q: Important product or service characteristics in organizational buying include which of the following?A. Products or services that are technical in nature and purchased on the basis of specifications.B. A heavy emphasis is placed on delivery time, technical assistance, and postsale service.C. Direct selling to organizational buyers is rare.D. A fixed, nonnegotiable price is the norm.E. Personal relationships are preferred to online buying over the Internet.

Q: Important market characteristics in organizational buying behavior include which of the following?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.C. Demand for industrial products and services is derived.D. Purchase orders much more frequent but they are usually small.E. Forecasting is not as important in organizational buying as in consumer buying.

Q: You are a researcher for a major marketing research consulting firm. A client needs an NAICS code to get the most detail about industry competitors that operate in Canada, Mexico, and the U.S., but there are very few competitor firms in Mexico. Which of the following levels of classification would provide the greatest detail about the firms within this industry?A. Code 51B. Code 517C. Code 5172D. Code 51721E. Code 517212

Q: In the breakdown for the NAICS code based on Figure 5-1 above, D represents theA. two-digit industry sector code.B. three-digit industry subsector code.C. four-digit industry group code.D. five-digit industry code.E. six-digit U.S. national industry code.

Q: Figure 5-1 Based on Figure 5-1 above, what is the NAICS code for cable and other subscription programming? A. 511 B. 5152 C. 51512 D. 51520 E. 511515

Q: Figure 5-1 Based on Figure 5-1 above, what is the most likely industry sector represented by NAICS code 51? A. manufacturing B. fisheries C. information D. publishing E. retailing

Q: A disadvantage of the North American Industry Classification System (NAICS) is thatA. 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 (U.S.) $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.

Q: The North American Industry Classification System (NAICS) permits a firm toA. 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 and external opportunities and threats of current and prospective competitors.

Q: The North American Industry Classification System (NAICS) designates industries with a numerical code in a defined structure. A six-digit coding system is used. The sixth digit designates a(n)A. industry subsector.B. industry group.C. specific industry.D. individual country-level national industry.E. sector of the economy.

Q: The NAICS provides common industry definitions forA. Canada, England, and the United States.B. North America, Asia, and Europe.C. North America, Central America, and South America.D. Canada, England, Australia.E. Canada, Mexico, and the United States.

Q: The acronym NAICS stands forA. National Association of Industrial Compliance Standards.B. National Association of Industrial Communication Systems.C. North American Industrial Communication Standards.D. North American Industry Classification System.E. North Atlantic Industrial Classification System.

Q: The North American Industry Classification System (NAICS)A. provides common industry definitions for North America, Central America, and South America to measure economic activity in the Western Hemisphere.B. provides common industry definitions between Canada and the United States to measure economic activity and reduce barriers of trade for cross-border firms.C. provides a classification system for products and services that is consistent worldwide.D. provides a classification system for products and services that is consistent across North America, Central America, and South America to measure economic activity in the Western Hemisphere.E. provides common industry definitions for Canada, Mexico, and the United States to measure economic activity in the three member countries.

Q: The City of Denver contracts with Solid Waste Management to provide trash collection services for its citizens. The city is operating as a(n)A. government unit.B. industrial market.C. business market.D. consumer market.E. service provider.

Q: When the General Services Administration (GSA), an agency of the federal government, purchased 116 Chevy Volts from General Motors for its vehicle fleet, it was operating as a(n)A. industrial market.B. business market.C. consumer market.D. government unit.E. service provider.

Q: When the Federal Aviation Administration (FAA) purchases radar systems for 22 major air traffic control centers in the U.S., it is operating as a(n)A. government unit.B. industrial market.C. business market.D. consumer market.E. service provider.

Q: When Georgia 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.

Q: Federal, state, and local agencies that buy products and services for the constituents they serve are referred to asA. industrial markets.B. reseller markets.C. consumer markets.D. government units.E. global markets.

Q: In terms of organizational buying, Amazon.com, Lands' End, and JCPenney would most likely be classified as __________.A. government unitsB. resellersC. manufacturersD. wholesalersE. industrial firms

Q: Liberty Medical Supply is a home delivery service that sells diabetes testing supplies, prescription drugs, and other supplies directly to consumers to assist them in the management of their health-related conditions. Since Liberty Medical does not make any changes to the supplies that it obtains from manufacturers, it would most likely be classified as a(n) __________.A. industrial service providerB. health care manufacturerC. industrial firmD. resellerE. government agency