Chapter 1
Introduction to international marketing
TRUE/FALSE
1.International marketing is the process of planning and conducting transactions across national borders to create exchanges that satisfy the objectives of individuals and organisations.
ANS:TPTS:1DIF:EasyREF:What is international marketing?
2.In the definition of international marketing, the major foundation of this process is the planning and conducting of transactions across national borders to create exchanges that satisfy the objectives of individuals and organisations.
ANS:TPTS:1DIF:EasyREF:What is international marketing?
3.The basic principles of marketing still apply, but their applications, complexity and intensity may vary substantially.
ANS:TPTS:1DIF:EasyREF:What is international marketing?
4.Even though a firm operates in the international marketplace, it still cannot separate its activities by content and context.
ANS:FPTS:1DIF:DifficultREF:Environmental and social sustainability
5.The binding effect of the global linkages created by world trade (on countries, institutions and individuals) was first widely recognised during the Second World War.
ANS:FPTS:1DIF:DifficultREF:Environmental and social sustainability
6.International marketing is a tool used to obtain improvement of one’s present position and retains the basic marketing tenets of ‘satisfaction’ and ‘exchange’.
ANS:TPTS:1DIF:EasyREF:What is international marketing?
7.International marketing creates an interdependence that makes a country like Australia more affluent but also more vulnerable.
ANS:TPTS:1DIF:DifficultREF:The importance of world trade
8.The global market imposes increasingly tight limits on national economic regulation and sovereignty.
ANS:TPTS:1DIF:ModerateREF:Environmental and social sustainability
9.Whilst Asia has grown in importance as an export market for Australia, the UK still remains the most important export market for this country.
ANS:FPTS:1DIF:ModerateREF:Environmental and social sustainability
10.A firm can only build and strengthen its competitive position in the international marketplace if it does not transfer its knowledge around the globe
ANS:FPTS:1DIF:ModerateREF:The importance of world trade
11.Currency flows and exchange rates have a greater effect on trade than do government monetary policies.
ANS:TPTS:1DIF:ModerateREF:Environmental and social sustainability
12.In the international areas of social responsibility and ethics, the international marketer is faced with a multicultural environment with differing expectations and often inconsistent legal systems when it comes to monitoring environmental pollution, maintaining safe working conditions, copying technology or trademarks, or paying bribes.
ANS:TPTS:1DIF:EasyREF:What is international marketing?
13.All of the key difficulties encountered in doing business internationally are marketing problems.
ANS:FPTS:1DIF:ModerateREF:Global linkages
14.Changes in transportation technology may force currently important transportation hubs like Singapore into ‘sleepy oblivion’.
ANS:TPTS:1DIF:DifficultREF:Geographical perspectives on international marketing
15.Merchandise trade statistics, in particular, overemphasise production and understate intellectual property from design to brand.
ANS:TPTS:1DIF:ModerateREF:What is international marketing?
16.According to the text, the ‘emerging’ economies refer to Saudi Arabia, Mexico, South Korea, Hong Kong and China.
ANS:TPTS:1DIF:ModerateREF:What is international marketing?
17.It is not possible to isolate domestic economic activity from international market events.
ANS:FPTS:1DIF:ModerateREF:Domestic policy repercussions
18.According to the text, the environment is broken down into four major components – economic, trade institutions and trade policy, political and legal and cultural.
ANS:TPTS:1DIF:ModerateREF:Environmental and social sustainability
19.Trading blocs encourage trade relations between their members but, through their rules and standards and the incentives they provide for mutual trade, they also affect the trade and investment flows of non-member countries.
ANS:TPTS:1DIF:ModerateREF:The importance of world trade
20.The decision of target market is crucial because of the corporate environment factors of scarcity and comparative strengths.
ANS:TPTS:1DIF:ModerateREF:Target market selection
MULTIPLE CHOICE
1.Which of the following is not one of the forms of international marketing defined in the text?
A. Government-owned operations.
B. Licensing.
C. Joint ventures.
D. Wholly owned subsidiaries.
ANS:APTS:1DIF:ModerateREF:What is international marketing?
2.Which of the following statements is not true when describing international transactions?
A.Marketing internationally needs to be pursued, often aggressively.
B.Those who do not participate in the transaction are still exposed to the changing influences of international marketing.
C.International marketing can be as much art as science.
D.The international marketer recognises the changing nature of transactions but is not part of the exchange.
ANS:DPTS:1DIF:ModerateREF:What is international marketing?
3.Which of the following trading blocs does not exist?
A. NAFTA in North America.
B. European Union in Europe.
C. ASEAN Free Trade Area (AFTA) in Asia.
D. Bilateral trade agreements between China and India.
ANS:DPTS:1DIF:ModerateREF:The importance of world trade
4.Technological innovation in marketing has direct effects on the efficiency of business. Which of the following statements is true?
A. Technological innovation has complicated the production process, so products take longer to produce.
B. Technological innovation has increased demand, therefore products cost more to distribute.
C. Technological innovation allows for customization in order to meet diverse customer needs.
D. Technological innovation causes higher prices because of the distance that raw materials have to travel.
ANS:CPTS:1DIF:DifficultREF:Environmental and social sustainability
5.According to the text, from the mid-1970s onwards this was ‘other Asia’ – the Four Dragons were Taiwan, South Korea, Singapore and
A. Thailand.
B. Hong Kong.
C. Vietnam.
D. China.
ANS:BPTS:1DIF:DifficultREF:Global linkages
6.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 damn diversion tunnels.
C. Applications for government subsidies.
D. Agriculture and farm policies affecting imports and exports.
ANS:DPTS:1DIF:DifficultREF:Environmental and social sustainability
7.Which country has had the most dramatic growth in exports between the period 1990–2004?
A. Japan.
B. India.
C. US.
D. China.
ANS:BPTS:1DIF:ModerateREF:Environmental and social sustainability
8.Traditionally, trade flow determined currency flows and therefore the level of the exchange rate.The exchange rate is now determined by
A. currency flows.
B. trade levels.
C. domestic policy.
D. wholesalers who take possession of the product prior to sale.
ANS:APTS:1DIF:DifficultREF:Environmental and social sustainability
9.What was the total GDP of China and India in 2002 (in millions of US dollar terms)?
A. $1 536 938.
B. Approximately $45 for every man, woman and child in the US.
C. Half of Western Europe’s GDP.
D. Almost twice that of 1980.
ANS:DPTS:1DIF:DifficultREF:The importance of world trade
10.The shift in financial flow as a result of global investment has had the following effect:
A. A build-up of international, government debt.
B. Lower profits and higher costs.
C. Increases in the international value of currencies.
D. Higher costs and lower profits.
ANS:APTS:1DIF:ModerateREF:Environmental and social sustainability
11.According to the text, a lowering of interest rates domestically would
A. stimulate domestic travel and reduce international travel.
B. create a subsidiary in a neighbouring country.
C. make consumers happy or may be politically wise, but it quickly becomes unsustainable if it results in a major outflow of funds to countries that offer higher interest rates.
D. Make consumers unhappy or may be politically unwise, but it quickly becomes sustainable if it results in a major outflow of funds to countries that offer higher interest rates.
ANS:CPTS:1DIF:DifficultREF:Domestic policy repercussions
12.According to the text, to regain some of their power to influence events, policymakers have sought to restrict the impact of global trade and financial flows by erecting barriers, charging tariffs, designing quotas and
A. developing legal framework.
B. changing import and export quota.
C. decreasing imports.
D. implementing other import regulations.
ANS:DPTS:1DIF:DifficultREF:Domestic policy repercussions
13.Which of the following events helped identify global linkages causing the world to realise that the systems of product development, distribution and consumption are intertwined and related?
A. The worldwide oil crisis of 1970.
B. Gulf War One and Gulf War Two.
C. The Second World War.
D. Opening of the Suez Canal.
ANS:APTS:1DIF:ModerateREF:Environmental and social sustainability
14.The marketing manager’s task is to plan and execute programmes that will ensure a long-term competitive advantage for the company, this includes determining of a specific target market and
A. developing a uniform currency worldwide.
B. marketing management.
C. looking at occupants, objects, occasions and objectives.
D. testing markets.
ANS:BPTS:1DIF:ModerateREF:Target market selection
15.The emergence of technology has created new markets for companies. Which of the following represents an example of this new market tendency?
A. The construction of convenience stores that replace service stations.
B. Listing of ingredients on the side panel labels of products distributed worldwide.
C. Newspapers being distributed online as opposed to physically on newsprint.
D. Storage facilities rented just on time.
ANS:CPTS:1DIF:ModerateREF:Environmental and social sustainability
16.By erecting barriers, charging tariffs, designing quotas and implementing other import regulations, governments have attempted to
A. popularise bureaucratic movement and entice more individuals into government service.
B. restrict the impact of global trade and financial flows.
C. increase income into the government.
D. capitalise on technology and enforce worldwide standards.
ANS:BPTS:1DIF:DifficultREF:Environmental and social sustainability
17.One way to guard against market saturation of a product is
A. to lower interest rates.
B. to delay introduction of a new product.
C. to personalise the message to the customer.
D. to lengthen or rejuvenate product life cycles in other countries.
ANS:DPTS:1DIF:DifficultREF:The importance of world trade
18.The five fundamental themes to structure geographic questions are:
A. Location, place, interaction, movement and region.
B. Continent, seas, oceans and rivers.
C. Race, religion and dialect.
D. All of the above.
ANS:APTS:1DIF:ModerateREF:Geographical perspectives on international marketing
19.According to the text, the eight Os are
A. occupants, objects, occasions, objectives, out-groups, organisation, operations and opposition.
B. occupations, objects, occasions, objectives, outlets, organisation, operations and opposition.
C. occupants, objections, occasions, objectives, outlets, organisation, operations and opposition.
D. occupants, objects, occasions, objectives, outlets, organisation, operations and opposition.
ANS:DPTS:1DIF:DifficultREF:Target market selection
20.Firms and industries that are not participating in the world market
A. recognise that isolation is possible.
B. will become participants in global business affairs anyway.
C. will be better able to react to competition from abroad in the domestic market.
D. are only reactive participants in the domestic market.
ANS:BPTS:1DIF:ModerateREF:Global linkages
21.According to the text, South Africa’s economy is the most prosperous on that continent because they have resources such as
A. gold and diamonds.
B. crude oil.
C. crude oil, gold and diamonds.
D. copper and natural gas.
ANS:APTS:1DIF:ModerateREF:Natural features
22.Production has become more efficient as a result of
A. ‘just on time’ warehousing.
B. the Internet.
C. cross-sourcing.
D. newly created niche markets.
ANS:CPTS:1DIF:ModerateREF:What is international marketing?
23.According to the text, about how many percentage of the Australian population live in cities on the coastal strip?
A. 50per cent.
B. 65per cent.
C. 60per cent.
D. 70per cent.
ANS:DPTS:1DIF:EasyREF:Environmental and social sustainability
24.To achieve success in the art of international marketing, it is necessary for a firm to be firmly grounded in
A. the language and aesthetics of any cultural group targeted.
B. the cultural differences in the expanded client base.
C. the six ‘p’s of international marketing.
D. the scientific aspects of international marketing.
ANS:DPTS:1DIF:ModerateREF:What is international marketing?
25.According to the text, which of the following factors influence the kind of crops grown in different areas?
A. The average daily and evening temperatures, the amount and timing of precipitation, the timing of frosts and freezing weather, and the variability of weather from one year to the next.
B. The average daily and evening temperatures, the amount and timing of wind, the timing of frosts and freezing weather, and the variability of weather from one year to the next.
C. The average night temperatures, the amount and timing of precipitation, the timing of frosts and freezing weather, and the variability of weather from one year to the next.
D. The average night temperatures, the amount and timing of wind, the timing of winter, and the variability of weather from one year to the next.
ANS:APTS:1DIF:ModerateREF:Natural features
26.World trade has made
A. information easier to gather, manipulate, analyse and disseminate.
B. the pressure to gather information lessen.
C. information easier to gather and disseminate.
D. the price of information more easily manipulated.
ANS:APTS:1DIF:EasyREF:Environmental and social sustainability
27.In the past two decades:
A. The role of primary commodities in world trade has dropped.
B. The volume of services in world trade has stabilised.
C. The importance of manufactured goods in world trade has decreased.
D. All of the above.
ANS:APTS:1DIF:ModerateREF:Environmental and social sustainability
28.A lowering of interest rates will cause:
A. Domestic consumers to be happier.
B. National capital account creation.
C. An outflow of money from the country.
D. ‘A’ and ‘C’ are correct.
ANS:DPTS:1DIF:ModerateREF:Environmental and social sustainability
29.According to the text, the factors of the population that also play a role in determining how a place fits into global economic affairs include:
A. The skills and qualification.
B. The culture, race and religion.
C. The natural resource, skills and qualification.
D. The traditions, history and culture.
ANS:APTS:1DIF:EasyREF:Human features
30.Many of the characteristics of a place relate to four natural attributes, namely:
A. Geological characteristics, terrain, hydrology and climate.
B. Time, environment, water and population.
C. Position, context, rotogravure and agriculture.
D. Prehistoric, historic, post-genealogical and genealogical.
ANS:APTS:1DIF:ModerateREF:Natural features
31.What types of hydrology affect terrain?
A. Rainfall, snowfall and hail.
B. Rivers, lakes and other bodies of water.
C. Canals, sewer systems and reservoirs.
D. Precipitation, weather and climate.
ANS:BPTS:1DIF:ModerateREF:Natural features
32.According to the text, which groups of the Australian population generally move out of cities to coastal strips for a ‘sea change’?
A. Double income families with no children.
B. Double income families with at least two children.
C. Professionals, managers, executives and directors.
D. Wealthier residents and the ‘babyboomers’.
ANS:DPTS:1DIF:ModerateREF:Human features
33.Halting destruction of forests in the Amazon Basin, selective harvesting of hardwoods and other products from natural forest, and a restaurant refusing to purchase beef raised on pastures that are established by clearing forests are all examples of what?
A. Concerns about the viability of environmental constructs.
B. Concerns about environmental quality.
C. The clustering of people-centred incidents in the natural environment.
D. Global companies taking advantage of social responsibility awareness.
ANS:BPTS:1DIF:ModerateREF:Marketing management
34.The role of advanced technology and its effect on international marketing are even more apparent
A. with respect to advances in communications systems.
B. in the need for places to adapt to changing transportation systems.
C. when a city is favourably located along transportation lines.
D. when movement provides a structure for different places to relate to each other.
ANS:APTS:1DIF:DifficultREF:Geographical perspectives on international marketing
35.Darrell Delamaide’s 1994 book
A. discusses the nine nations of North America.
B. surprisingly does not include Mitteleuropa.
C. divides Europe into 10 regions.
D. considers the various regions of Asia.
ANS:CPTS:1DIF:DifficultREF:Natural features
SHORT ANSWER
1.Why is international marketing important to the growth of global and domestic companies?
ANS:
International marketing is the process of planning and conducting transactions across national borders to create exchanges that satisfy the objectives of individual organisations. 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, companies need to adopt the international marketing concept. In any case, international marketing cannot be ignored; its inevitability means that firms cannot adopt an isolationist attitude: they must embrace international marketing in order to survive.
PTS:1DIF:ModerateREF:Domestic policy repercussions
2.What are the four elements of the marketing mix?
ANS:
The four Ps are traditionally featured as the elements of the marketing mix. These four variables (product, price, place and promotion) engage the company in the fundamental aspects of conducting business. Blending the four variables into a coherent programme requires trade-offs based on the type of product or service being offered, the stage of the product’s life cycle and resources available for the marketing effort, as well as the type of customer at whom the marketing efforts are directed.
PTS:1DIF:ModerateREF:Target market selection
3.Briefly describe the four processes of marketing.
ANS:
The actual process of marketing consists of four stages: analysis, planning, implementation and control.
Analysis begins with collecting data on the eight Os and using various quantitative and qualitative techniques of marketing research. Planning refers to the blueprint generated to react to and exploit the opportunities in the marketplace. Implementation is the actual carrying out of the planned activity. Control mechanisms occur concurrently with implementation.
PTS:1DIF:ModerateREF:The marketing process