Chapter 1: Global Environmental Drivers: True/False

Chapter 1: Global Environmental Drivers
TRUE/FALSE
1. International marketing is unable to retain the basic marketing tenets of value and exchange.
ANS: F PTS: 1 DIF: Easy REF: p. 5

OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: International Perspective KEY: Bloom's: Knowledge
2. It is in the domestic marketing field where one can observe most closely the role of marketing as a key
agent of societal change.

3. Only those who participate in the transactions are exposed to international marketing and subject to its
changing influences.

4. To achieve success in the art of international marketing, it is necessary to be

firmly grounded in its scientific aspects.
ANS: T PTS: 1 DIF: Moderate REF: p. 7

5. World trade has assumed an importance heretofore unknown to the global community and as a result,
many countries and firms have found it highly desirable to become major participants in international
marketing.

6. International specialization and cross-sourcing have made production much more efficient.
ANS: T PTS: 1 DIF: Easy REF: p. 7

7. The network of global linkages that bind us all as a result of world trade were first recognized during
the rebuilding of Europe after WWII.
ANS: F PTS: 1 DIF: Moderate REF: p. 8

8. World trade has brought about a global reorientation of corporate processes.

9. Due to ongoing global technological innovation in marketing, products are distributed at a higher cost.

10. Global investment strategies, coupled with production and distribution sharing, increase the challenge
of staying in a leadership position.

11. The level of global investment has resulted in a decrease in international debt by governments.

12. Currency flows and exchange rates have a greater effect on trade than government monetary policies.

13. The level of trade is now determined by exchange rates.

14. Trade flows outnumber currency flows by 100 to 1.

15. Constant rapid technological change and vast advances in communication permit firms and countries
to quickly emulate innovation and counteract carefully designed plans.

16. Policymakers restrict the impact of global trade and financial flows by eliminating tariffs and quotas.

17. Market saturation can be avoided by lengthening or rejuvenating product life cycles in other countries.

18. Many firms do not participate in the global market because their managers believe that international
marketing should only be carried out by large multinational corporations.

19. Firms are fairly consistent in their international activities because of the similarities in their levels of
experience, resources, and capabilities.

20. The role of government in the marketplace is decreasing dramatically.

MULTIPLE CHOICE
1. Which of the following best defines international marketing?

a. It is the process of planning and conducting economic forecasting in developing countries.
b. It is the process of creating a subsidiary in a neighboring country.
c. It consists of the activity, institutions, and processes across national borders that create,
communicate, deliver, and exchange offerings that have value for stakeholders and society.
d. It is the process of hiring employees from other countries to assist with advertising
messages, public communication, and the building of overall awareness.
ANS: C PTS: 1 DIF: Easy REF: p. 5
2. Which of the following is a form of international marketing?

a. Government-owned operations
b. Inter-state trade
c. Joint ventures
d. Putting-out system
3. Export-import trade, licensing, joint ventures, wholly owned subsidiaries, turnkey operations, and
management contracts are examples of:
a. global positioning systems.
b. outsourcing.
c. regional agreements.
d. international marketing.
ANS: D PTS: 1 DIF: Easy REF: p. 5
4. International marketing differs from domestic marketing in that international marketing has different:
a. marketing principles.
b. tenets of value and exchange.
c. applications, complexity, and intensity.
d. social responsibilities.
5. Which of the following is true of an international marketer?

a. An international marketer faces the same macroenvironmental factors as a domestic
marketer.
b. An international marketer and a domestic marketer are subject to a similar set of
constraints.
c. An international marketer has to understand that basic marketing principles differ in
different markets.
d. An international marketer needs to face conflicts resulting from different laws, cultures,
and societies.
6. Which of the following is true of international marketing?

a. The international marketer is faced with often inconsistent legal systems when it comes to
monitoring environmental pollution.
b. International marketing does not retain the basic marketing tenets of value and exchange.
c. International marketing does not focus on stakeholders and society whose present positions
are to be improved.
d. The international marketer is subject to the same set of macroenvironmental factors as a
domestic marketer.
ANS: A PTS: 1 DIF: Moderate REF: p. 5
7. Which of the following statements is true about the role of international markets?
a. Those who do not participate in the transactions are not exposed to international marketing
and are not subject to its changing influences.
b. International markets can become a source of needs satisfaction.
c. International markets cannot influence the quality of life of individuals.
d. International markets can simplify the process and eliminate complex business decisions.
ANS: B PTS: 1 DIF: Moderate REF: p. 7
8. Which of the following new technologies has allowed consumers to supply and receive products from
across the world for personal use?
a. Travelogues on cable television
b. The Internet
c. Automated pensions and individual retirement accounts
d. Newly created niche markets
ANS: B PTS: 1 DIF: Easy REF: p. 7
9. Which of the following is true about the importance of world trade?

a. World trade has deeply affected domestic policymaking and has often resulted in the
emergence of totally new threats to firms and individuals.
b. The growth of domestic economies has typically outperformed global growth of trade in
the past few decades.
c. When firms invest on a global scale, it is difficult for entire industries to shift their
locations.
d. Due to the severe recession that affected much of the worlds economy in 2008 and 2009,
world trade could not rebound in 2010.
10. The trading bloc NAFTA is located in _____.

a. Asia
b. Europe
c. South America
d. North America
11. The trading bloc MERCOSUR is located in _____.

a. Europe
b. Latin America
c. North America
d. Asia
12. The trading bloc ASEAN is located in _____.

a. Asia
b. Europe
c. North America
d. South America
ANS: A PTS: 1 DIF: Easy REF: p. 8
13. Which of the following is true of world trade?

a. World trade has deeply affected domestic policymaking.
b. World trade has led to an increase in the role of primary commodities in international trade.
c. World trade has decreased the challenge of companies to stay in leadership position.
d. World trade has resulted in the decrease of international debt by governments.
14. World trade has forged a network of global linkages that bind us allcountries, institutions, and
individualsmuch more closely than ever before. These linkages were first widely recognized during
the:
a. worldwide oil crisis of 1970.
b. Gulf War II.
c. 1994 economic crisis.
d. financial crisis that was triggered in 2007.
15. As a result of the March 2011 earthquake and tsunami off the northeastern coast of Japan, the just in
time supply chains of the _____, semiconductor, smartphone, digital camera, and personal computer
industries were immediately jeopardized around the world.
a. textile
b. automotive
c. healthcare
d. cosmetic
16. Which of the following is true of global linkages?

a. Global linkages were first widely recognized during the 1994 economic crisis.
b. Global linkages led to the strengthening of the just in time supply chains around the
world.
c. Global linkages have had no impact on far-away countries that consider themselves distant
and independent of any particular economic event.
d. Global linkages have become more intense on an individual level.
ANS: D PTS: 1 DIF: Moderate REF: p. 9
17. Which of the following is true regarding technological innovation?

a. Technological innovation has complicated the production process.
b. Technological innovation has increased demand, therefore products are distributed at a
higher cost.
c. Technological innovation allows for customization in order to meet diverse clients needs.
d. Technological innovation enables greater access to raw materials around the world which
in turn increases production costs.
18. Advances in technology have:

a. complicated the distribution channel thereby making distribution a lengthy process.
b. allowed firms to separate their activities by content and context.
c. enabled firms to operate in a marketplace rather than a market space.
d. made the procurement of raw materials an expensive process.
19. The emergence of technology has created new markets for companies. Which of the following
represents an example of this new tendency?
a. The construction of corner drugstores that replace gas stations
b. Listing of ingredients on the side panel labels of products distributed worldwide
c. Newspapers being distributed online globally
d. Storage facilities rented on a monthly basis
ANS: C PTS: 1 DIF: Moderate REF: p. 10
20. The shifts in financial flows due to global investments have resulted in:
a. more complex procedures to avail foreign capital.
b. more foreign-direct activities.
c. decreased international debts by governments.
d. increased rates of unemployment.
21. The International Monetary Fund (IMF) was founded to:

a. manage monetary policies around the world.
b. help restructure impoverished economies.
c. provide infrastructural and medical aid to developing countries.
d. provide financial assistance to developing countries for development programs.
22. The _____, which was founded in 1944, has recently been assisting nations that used to be categorized
as wealthy.
a. International Monetary Fund
b. World Trade Organization
c. World Health Organization
d. European Union
23. Which of the following is true about global investments?
a. They have brought about interdependence between nations which is stable in nature.
b. They have made past trade orientations more relevant in todays changing times.
c. They have reduced the role of manufactured goods and services in the international market.
d. They have made it increasingly difficult to differentiate between rich and poor.
24. Which of the following has traditionally been a domestic issue and is now an international issue?
a. Geographic boundaries of cities
b. The flow of water through dam diversion tunnels
c. Applications for government subsidies
d. Agriculture and farm policies affecting imports and exports
25. Independent of trade, currency flows set _____ rates, which are the values of currencies relative to
each other.
a. prime lending
b. interest
c. discount
d. exchange
26. Which of the following is true regarding the domestic repercussions of global linkages?
a. Policymakers find it easier to isolate domestic economic activity from international market
events.
b. Governments have gained more power to implement effective policy measures.
c. Private-sector financial flows exceed the financial flows that can be marshaled by the
government.
d. Policymakers have more effective tools but less responsibilities to carry out.
27. By erecting barriers, designing quotas, and implementing other import regulations, governments have
attempted to:
a. prevent illegal trade across borders.
b. restrict the impact of global trade and financial flows.
c. increase the income of the government.
d. capitalize on technology and enforce worldwide standards.
28. To regain some power to influence events, policymakers have sought to restrict the impact of global
trade and financial flows by:
a. minimizing barriers.
b. charging tariffs.
c. canceling import regulations.
d. limiting quotas.
29. Which of the following is true about closer global linkages and domestic policy makers?
a. They have more effective tools to carry out their responsibilities.
b. They find themselves with decreasing responsibilities.
c. They find it easy to distinguish between domestic and international economic activities.
d. They have imposed import regulations to restrict the impact of global trade.
30. Measures such as quotas and import regulations have been restrained by international agreements that
regulate trade restrictions, particularly through the _____.
a. World Bank
b. United Nations Trade Mission
c. World Trade Organization
d. IMF
31. One way to guard against market saturation of a product is to:

a. lower interest rates.
b. delay introduction of a new product.
c. personalize the message to the customer.
d. lengthen or rejuvenate product life cycles in other countries.
32. Which of the following mistakes committed by firms leads to inefficiency, lack of consumer
acceptance, and sometimes even corporate failure?
a. Overbudgeting the overhead costs in international markets
b. Transferring knowledge around the globe
c. Lengthening product life cycles in other countries
d. Believing that international customers are just like the ones the firm deals with at home
ESSAY
1. Why is international marketing important to the growth of global and domestic companies?
ANS:
International marketing consists of the activity, institutions, and processes across national borders that
create, communicate, deliver, and exchange offerings that have value for stakeholders and society.
Global linkages have made possible investment strategies and marketing alternatives that offer
tremendous opportunities for companies. To benefit from the opportunities and deal with the
adversities of international trade, firms need to prepare themselves and develop active responses,
envision new strategies, make new plans, and change the way of doing business.
The growth of global business activities offers increased opportunities. By transferring knowledge
around the globe, an international firm can build and strengthen its competitive position. Firms that
heavily depend on long production runs can expand their activities far beyond their domestic markets
and benefit from reaching many more customers. Market saturation can be avoided by lengthening or
rejuvenating product life cycles in other countries. Cooperative agreements can be formed that enable
all parties to bring their major strengths to the table and emerge with better products, services, and
ideas.
PTS: 1 DIF: Moderate REF: p. 5 | p. 13 OBJ: LO: 1-1 | LO: 1-3

NAT: BUSPROG: Analytic STA: DISC: International Perspective
KEY: Bloom's: Knowledge
2. What are the domestic policy repercussions of global linkages?
ANS:
The effects of closer global linkages on the economics of countries have been dramatic. Policymakers
have increasingly come to recognize that it is very difficult to isolate domestic economic activity from
international market events. Constant rapid technological change and vast advances in communication
permit firms and countries to quickly emulate innovation and counteract carefully designed plans. As a
result, governments are often powerless to implement effective policy measures even when they know
what to do. Policymakers therefore find themselves with increasing responsibilities yet with fewer and
less effective tools to carry out these responsibilities. At the same time that more parts of a domestic
economy are vulnerable to international shifts and changes, these parts are becoming less controllable.
The global market imposes increasingly tight limits on national economic regulation and sovereignty.
PTS: 1 DIF: Moderate REF: p. 12 OBJ: LO: 1-2

3. What are the opportunities that international marketing provides?
ANS:
The growth of global business activities offers increased opportunities.Firms that heavily depend on
long production runs can expand their activities far beyond their domestic markets and benefit from
reaching many more customers. Market saturation can be avoided by lengthening or rejuvenating
product life cycles in other countries. Production sites once were inflexible, but now plants can be
shifted from one country to another, and suppliers can be found on every continent. Cooperative
agreements can be formed that enable all parties to bring their major strengths to the table and emerge
with better products, services, and ideas than they could produce on their own.
PTS: 1 DIF: Moderate REF: p. 13 OBJ: LO: 1-3


Chapter 1: Global Environmental Drivers: True/False

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Chapter 1: Global Environmental Drivers

ANS: F PTS: 1 DIF: Easy REF: p. 5

ANS: F PTS: 1 DIF: Easy REF: p. 5

ANS: F PTS: 1 DIF: Easy REF: p. 7

4. To achieve success in the art of international marketing, it is necessary to be

ANS: T PTS: 1 DIF: Moderate REF: p. 7

ANS: T PTS: 1 DIF: Moderate REF: p. 7

ANS: T PTS: 1 DIF: Easy REF: p. 7

ANS: F PTS: 1 DIF: Moderate REF: p. 8

ANS: T PTS: 1 DIF: Easy REF: p. 10

ANS: F PTS: 1 DIF: Moderate REF: p. 10

ANS: T PTS: 1 DIF: Easy REF: p. 10

ANS: F PTS: 1 DIF: Moderate REF: p. 10

ANS: T PTS: 1 DIF: Moderate REF: p. 12

13. The level of trade is now determined by exchange rates.

ANS: T PTS: 1 DIF: Moderate REF: p. 12

14. Trade flows outnumber currency flows by 100 to 1.

ANS: F PTS: 1 DIF: Easy REF: p. 12

ANS: T PTS: 1 DIF: Easy REF: p. 12

ANS: F PTS: 1 DIF: Easy REF: p. 12

ANS: T PTS: 1 DIF: Easy REF: p. 13

ANS: T PTS: 1 DIF: Easy REF: p. 15

ANS: F PTS: 1 DIF: Easy REF: p. 15

20. The role of government in the marketplace is decreasing dramatically.

ANS: F PTS: 1 DIF: Easy REF: p. 18

1. Which of the following best defines international marketing?

2. Which of the following is a form of international marketing?

5. Which of the following is true of an international marketer?

6. Which of the following is true of international marketing?

9. Which of the following is true about the importance of world trade?

10. The trading bloc NAFTA is located in _____.

11. The trading bloc MERCOSUR is located in _____.

12. The trading bloc ASEAN is located in _____.

13. Which of the following is true of world trade?

16. Which of the following is true of global linkages?

17. Which of the following is true regarding technological innovation?

18. Advances in technology have:

21. The International Monetary Fund (IMF) was founded to:

31. One way to guard against market saturation of a product is to:

PTS: 1 DIF: Moderate REF: p. 5 | p. 13 OBJ: LO: 1-1 | LO: 1-3

2. What are the domestic policy repercussions of global linkages?

PTS: 1 DIF: Moderate REF: p. 12 OBJ: LO: 1-2

3. What are the opportunities that international marketing provides?

PTS: 1 DIF: Moderate REF: p. 13 OBJ: LO: 1-3

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