International Marketing Exam 1

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Terms in this set (...)

self-reference criterion (SRC)
is an unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions.
Ethnocentrism
is the notion that people in one's own company, culture, or country know best how to do things
Factors favor internationalization
1. Companies with either high technology and/or marketing-based resources are better equipped to internationalize than more traditional manufacturing kinds of companies
2. Smaller home markets and larger production capacities favor internationalization
3. firms with key managers well networked internationally are able to accelerate the internationalization process
Stages of international marketing involvement
No Direct Foreign Marketing
Infrequent Foreign Marketing
Regular Foreign Marketing
International Marketing
Global Marketing
Requirements for companies to succeed in international markets
adapting to that cultures, rules regulations and business requirements
Controllable factors
changing market conditions, consumer tastes, corporate objectives
Uncontrollable factors
political-legal forces, environmental climate and competition
Trade deficit -> the value of the dollar
the higher the trade deficit, the lower the value of the dollar is
The World Bank
helping maintain stability in the financial markets and
by assisting countries that are seeking economic development and restructuring
The adverse consequences of globalization
environmental concerns, worker exploitation, domestic job losses, cultural extinction, higher oil prices, and diminished sovereignty of nations
Critique of the global financial institutions
anti sweatshop campaigns against companies for better working conditions
Trade barriers and their purposes
can be tariffs, embargoes, or quotas
tariffs- a tax put on goods being imported it makes goods more expensive
embargoes- when a government orders a complete ban on trade with another country this hurts a country economically
quotas- a limit on the amount of goods being imported to another country encourage people to buy goods in their home countries
For companies today, becoming international is a luxury only some can afford
False
Companies from Japan are the leading group of investors in the United States
False
International marketing involves selling of a company's goods and services to consumers or users in more than one nation
True
The difference between domestic and international marketing lies in the different concepts of marketing.
True
An international marketer must deal with at least two levels of uncontrollable uncertainty.
True
The geography and infrastructure of a country are uncontrollable factors that influence the business decisions of a company in an international market.
True
The uncontrollable factors affecting international marketing are limited to political forces, economic climate, and competitive structure
False
The level of technology in a country is an uncontrollable element for international marketers
True
The uncontrollable factors a company has to deal with decreases with the number of foreign markets in which it operates
False
The controllable elements can be altered in the long run and, usually, in the short run to adjust to changing market conditions, consumer tastes, or corporate objectives
True
Political and legal forces, economic climate, and competition are some of the domestic environment's controllable factors.
False
The foreign policies of a country have a direct effect on a firm's international marketing success.
True
Abolition of apartheid in South Africa is an example of a positive uncontrollable element in an international marketing scenario
True
The business activities of international marketers are not affected by competition in their domestic market
False
The process of evaluating the uncontrollable elements in an international marketing program involves substantial doses of cultural, political, and economic shock.
True
Level of technology remains unchanged across countries making it a fairly predictable factor in international marketing.
False
Political and legal issues a company may face abroad are mitigated by the "alien status" of the company.
False
The political details and the ramifications of political and legal events are often more transparent in a domestic situation than they are in a foreign market
True
The political and legal environment is a controllable element for international marketers because of their potent ability to lobby and influence legislation in foreign markets
False
In a broad sense, the uncontrollable elements of the foreign business environment constitute the culture.
False
In dealing with unfamiliar markets, marketers must be aware of the frames of reference they are using in making their decisions.
True
John refuses to buy Japanese products because he sees this as a way of selling out to a nation known for its aggressive behavior. John is using a self-reference criterion to make his decision.
True
The self-reference criterion is closely related to ethnocentrism.
True
Sam Watkins just ate cookies and, therefore, feels justified in refusing food offered by his Asian host. In this instance, Sam's self-reference criterion has just saved him from making a cultural blunder.
False
To avoid errors in business decisions, it is necessary to conduct a cross-cultural analysis that emphasizes the need for ethnocentrism
False
Understanding one's own culture normally requires no additional study
False
The most effective approach to build global awareness into an organization is to increase the diversity mix of the employee profile, especially for entry-level jobs
True
Research has revealed that smaller home markets and larger production capacities appear to favor internationalization
True
A company in the "no direct foreign marketing" stage of international marketing involvement does not actively cultivate customers outside national boundaries
True
The global marketing concept views the marketplace as consisting of one primary domestic market that is complimented by several smaller regional markets
False
For companies today, becoming international is a luxury only some can afford.
False
After World War II, the U.S. provided assistance to other countries to develop their markets and improve global trade though it gained no returns on these initiatives.
False
The GATT became part of the World Trade Organization in 1995, with the ratification of the Uruguay Round agreements
True
3. As part of the worldwide economic growth and rebuilding after World War II, countries once classified as less developed were reclassified as underdeveloped countries
False
By the year 1971, the United States was selling more to other countries than it bought from them; that is, the United States had a favorable balance of trade.
True
The Organization for Economic Cooperation and Development (OECD) has estimated that the economies of the developed world will expand at much faster rates when compared to the developing economies.
True
A nation's balance-of-payments statement records all financial transactions between its residents and those of the rest of the world during a given period of time.
True
In a balance-of-payments record, if the credit and debit offset each other, it means that a nation is in particularly good financial condition
False
The reserves account is a record of direct investment, portfolio investment, and short-term capital movements to and from countries.
False ( it is the capital account)
As the U.S. trade deficit has grown, pressures have begun to push the value of the dollar to higher levels.
False
Protection of an infant industry is recognized by economists as a valid argument in favor of protectionism.
True
A case might be made for temporary protection of markets with excess productive capacity or excess labor when such protection could facilitate an orderly transition.
True
To encourage development of domestic industries, governments work on reducing trade barriers
False
In general, tariffs decrease inflationary pressures.
False
Tariffs are often used as reprisals against protectionist moves of trading partners.
True
15. Quotas strictly permit importing on a case-by-case basis.
False
Quotas are more flexible than import licenses
False
A government boycott is a partial restriction against the purchase and importation of certain goods and/or services from other countries
False
In the context of blocked currency, blockage is accomplished by refusing to allow an importer to exchange its national currency for the currency of the seller.
True
It is mandatory for importers who want to buy a foreign good to apply for a business permit in that country.
False
The exchange permit can stipulate an unfavorable rate of exchange depending on the desires of the government.
True
The United States and other countries require some products to contain a percentage of "local content" to gain admission to their markets.
True
Antidumping laws were specifically designed to prevent foreign producers from investing in the U.S. local markets.
False
The Omnibus Trade and Competitiveness Act of 1988 focuses on assisting businesses to be more competitive in world markets as well as on correcting perceived injustice in trade practices.
True
The Omnibus Trade and Competitiveness act gives the U.S. president authority to restrict sales of a country's products in the U.S. market if that country imposes unfair restrictions on U.S. products.
True
Obtaining export licenses for products on the export control list is more arduous than for those items that are exempted from the list.
False
The GATT panels were formed to resolve bilateral trade disputes and thus have both advisory and enforcement powers.
False
The decisions taken by the World Trade Organization in solving trade disputes among members are binding ones.
True
The World Bank was formed with the primary objective of overcoming inadequate monetary reserves and dealing with unstable currencies which were particularly vexing problems in global trade.
True
Since both SDRs and the U.S. dollar have lost their utility as the basic medium of financial exchange, most monetary statistics relate to gold rather than dollars.
False
Manifest Destiny
meant that Americans were a chosen people ordained by God to create a model society. It referred to the territorial expansion of the United States from the Atlantic to the Pacific
The Monroe Doctrine
No further European colonization in the New World
abstention of the United States from European political affairs, and nonintervention by European governments in the governments of the Western Hemisphere.
Confucian philosophy
taught throughout Japan emphasizes the basic virtue of loyalty to a friend
Roosevelt Corollary
an extension of the Monroe Doctrine states that the usa would prohibit non american intervention in latin american affairs and would ensure the us would police the latin americas if they met international obligations
Worlds Top Polluter vs Worlds most efficient user
China vs. Iceland
Physical barriers that exist within Europe
tariffs, quotas, embargo
Human labor as a source of energy
sustainable developments with the use of minerals and natural resources
Economic effects of controlling population growth
fewer people to work, governments are forced to increase taxation, lack of money to source for the government.
Geography
Countries with hostile climates associated with economic stagnation Countries that suffer the most from major calamities are among the poorest in the world, which influences ability to market products
To understand fully a society's actions and its points of view, one must have an appreciation for the influence of historical events.
True
Confucian philosophy, taught throughout Japan's history, emphasizes the basic virtue of loyalty to the country.
True
A fundamental premise of Japanese ideology reflects the importance of individualism and competitive spirit for economic progress.
False
Recording of historic events by historians belonging to different cultures gives us a subjective view of history.
True
The Mexican attitude toward their American neighbors may be summed up in the statement—"Geography has made us neighbors, tradition has made us friends."
False
In the context of U.S. foreign policies, the Monroe Doctrine, in its broadest interpretation, meant that Americans were a chosen people ordained by God to create a model society.
False
In the context of U.S. foreign policies, the Monroe Doctrine was used to justify the U.S. annexation of Texas, Oregon, New Mexico, and California.
False
In the context of U.S. foreign policies, the Monroe Doctrine dictated the abstention of the United States from European political affairs.
True
In the context of U.S. foreign policies, the Roosevelt Corollary was an extension of the policy of the Monroe Doctrine.
True
. In the context of U.S. foreign policies, the Roosevelt Corollary paved the way for non-American intervention in Latin American affairs.
False
The Roosevelt Corollary is typified by the dictum—whatever is good for the United States is justifiable.
True
Altitude, humidity, and temperature extremes are climatic features that affect the uses and functions of products and equipment.
True
Physical barriers that exist within Europe are nowadays seen as a natural protection from potentially hostile neighbors.
False
Countries that suffer the most from major natural calamities are among the poorest in the world.
False
In the context of social responsibility and environmental management, the United States continues to be the world's top pollution-causing nation.
False
In the context of social responsibility and environmental management, the process of controlling industrial wastes leads to the issue of disposal of hazardous waste.
True
In the context of social responsibility and environmental management, the United States leads the fight against pollution with the most stringent greenhouse emission standards in the world.
False
In the context of social responsibility and environmental management, sustainable development is about protecting the environment at all costs.
False
In the context of social responsibility and environmental management, the idea of sustainable development is quite popular in the United States owing to the cultural characteristics of the Americans
False
The availability of minerals and the ability to generate energy are the foundations of modern technology.
True
In much of the underdeveloped world, human labor is the prevalent source of energy.
True
Petroleum's versatility ensures that petroleum-related products still dominate energy usage.
True
The United States is a major exporter of petroleum products.
False
China has emerged as the most efficient user of energy worldwide.
False
According to some economists, economic prosperity is a factor that leads to decline in fertility rates.
True
Most of the major industrialized countries have sufficient internal population growth to maintain themselves.
False
North America is the region of the world most affected by a steadily declining worker-to-retiree ratio.
False
Trade routes represent the attempts of countries to overcome economic and social imbalances created in part by the influence of geography.
True
Continuous improvements in electronic communications have facilitated the expansion of trade.
True
Culture
is the sum of the "values, rituals, symbols, beliefs, and thought processes that are learned, shared by a group of people, and transmitted from generation to generation"
the four dimensions of culture by Hofstede
power distance- authority, masculinity/feminity-assertiveness and achievement, individualism/collectivism- most useful of all the four dimensions, and uncertainty avoidance-risk orientation,
Social institutions
family, religion, school, the media, the government, and corporations all affect the way which people relate to one another, organize their activities, and teach acceptable behaviors.
Acculturation
adjusting to a new culture.
The influence of governments
governments have little influence on family, religion, school and the media. most often they try to influence thinking and behaviors of adult citizens to procreate. an example in some countries they give stipends of $800 to new mothers.
When marketers introduce an innovative product or idea, they act as agents of change.
True
The manner in and amount which people consume, the priority of needs and wants they attempt to satisfy, and the manner in which they satisfy them are functions of their culture.
True
Markets constantly change; they are not static but evolve, expand, and contract in response to marketing effort, economic conditions, and other cultural influences.
True
As countries move from agricultural to industrial to services economies, birthrates increase.
False
According to traditional definitions, culture is transmitted from generation to generation.
False
According to James Day Hodgson, former U.S. ambassador to Japan, culture is like a "thicket" that is tough to get through, but effort and patience often lead to success.
True
Dutch management professor Geert Hofstede argues that culture provides a guide for humans on how to think and behave.
True
Acculturation refers to the process of becoming an agent of change by innovating.
False
According to Jared Diamond, a professor of physiology, innovations spread faster north to south than east to west.
False
According to Philip Parker, a marketing professor, there are strong correlations between latitude and the per capita GDP of countries.
True
Much of American trade policy has depended on the happenstance of cotton being the original source of the Virginia colony's economic survival in the 1600s
False
For most of the 20th century, the predominant approach to governance in the world was colonialism.
False
In the context of social institutions such as families, the ratio of male to female children is scarcely affected by culture.
False
Marketers with little or no understanding of a religion may readily offend deeply because the influence of religion is often quite strong.
True
For a marketer, one's own religion is most often the best guide to another's beliefs.
False
Religion has a significant impact on the value systems of a society and the effect of value systems on marketing.
True
According to the World Bank, no country with less than fifty percent literacy has succeeded economically.
True
The four social institutions that most strongly influence values and culture are schools, churches, families, and the media.
True
The Uncertainty Avoidance Index (UAI), one of the four dimensions of culture, identified by Geert Hofstede, focuses on assertiveness and achievement.
False
The Power Distance dimension of culture, identified by Geert Hofstede, has proven to be the most useful of the four dimensions.
False
The Individualism/Collective Index, identified by Geert Hofstede, refers to the preference for behavior that promotes one's self-interest.
True
The Masculinity/Feminity Index (MAS), identified by Geert Hofstede, focuses on risk orientation.
False
When a culture scores high on Individualism/Collectivism Index, individuals fail to identify with groups.
False
People from cultures with high Power Distance Index scores are more likely to have a general distrust of others.
True
Cultures with high Uncertainty Avoidance Index scores tend to have a low level of anxiety and stress
False
Cultures low in Uncertainty Avoidance Index take a more empirical approach to understanding and knowledge.
True
In the context of the elements of culture, marriage ceremonies and funerals are good examples of rituals.
True
In some countries, language is itself thought of as a social institution, with no relation to political importance.
False
The strategy of cultural congruence involves marketing products similar to ones already on the market in a manner as similar as possible with existing cultural norms, thereby minimizing resistance.
True
Stages of international marketing involvement
No Direct Foreign Marketing
Infrequent Foreign Marketing
Regular Foreign Marketing
International Marketing
Global Marketing
this is temporary caused by variations in production levels or demand may result in infrequent marketing overseas.
Infrequent Foreign Marketing
At this level, the firm has a permanent productive capacity devoted to the production of goods and services to be marketed in foreign markets. A firm may employ foreign or domestic intermediaries, or may have its own sales force or sales subsidiaries in important foreign markets
Regular Foreign Marketing
Companies at this stage are fully committed and involved in international marketing activities. Companies seek markets over the world and sell products that are a result of planned production
International Marketing
At this stage companies treat the world including their home market as one market.
Global Marketing
When a company does not actively cultivate customers outside national boundaries, however, this company' products reach many foreign markets. Sales may be made to trading companies as well as foreign customers who directly contact the firm. Products may reach foreign markets via domestic wholesalers and distributors
No direct foreign marketing
GATT
a forum for member countries to negotiate a reduction of tariffs and other barriers to trade. With the ratification of the Uruguay Agreements it became apart of the WTO in 1995.
balance of payments
the system accounts that records a nations international financial transactions. it records all transactions between its residents and the rest of the world during a given period of time usually its one year.
current account
a record of all merchandise exports, imports,and services plus unilateral transfers of funds, it is important because it includes all international merchandise imported and exported all investments, payments, receipts, and overseas employment
protectionism
Utilizing legal barriers, exchange barriers, and psychological barrier to restrain the entry of unwanted goods
voluntary export restraints (VERS)
common in textiles, clothing, steel, agriculture, it is an agreement between the importing country and the exporting country for a restriction on the volume of exports.
The Omnibus Trade and Competitiveness Act 1988
this act focuses on assisting businesses to be more competitive in world markets as well as on correcting perceived injustices in trade practices
The WTO World Trade Organization
encompasses the current GATT, structure and extends it to new areas not adequately covered in the past, its merely an institution sets rules governing trade among its 157 members. provides a panel of experts to hear and rule trade disputes among members and issues binding decisions.
expropriatation
confiscation of foreign investments.