Chapter 1—An Overview of Marketingecarter2/CSUB F14 Courses/Module 1 P… · Web view7._____ is...

EXAM 1 POOL ITEMS

Chapter 1—An Overview of Marketing

MULTIPLE CHOICE

1. The term marketing refers to:a. new product concepts and improvementsb. sellingc. advertising and promotion activitiesd. a philosophy that stresses customer satisfactione. planning sales campaigns

ANS: D PTS: 1 REF: 3 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

2. A business is concerned with many day-to-day activities. Some of the most important of these activities are the planning and development of a product, its pricing policy, and the distribution strategy. These activities are all a part of:a. a control systemb. marketingc. accountingd. productione. human resources

ANS: BThis description contains three of the four main activities included in the marketing function. Many students may mistakenly believe that marketing is only concerned with promotion.

PTS: 1 REF: 3 OBJ: 01-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Distribution

3. _____ is a philosophy, an attitude, a perspective, or a management orientation that stresses customer satisfaction.a. Planning strategyb. Customer managementc. Marketingd. A control systeme. Reciprocity

ANS: C PTS: 1 REF: 3 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

4. The American Marketing Association's definition of marketing:a. is limited to promotional activitiesb. focuses on the value of empowerment, teamwork, and customer valuec. shows how marketing benefits the marketerd. relies on the synergy created by exchangee. includes the processes marketers use to establish and maintain relationships with

customers

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ANS: EAccording to the American Marketing Association, marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

PTS: 1 REF: 3 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

5. _____ is a key ingredient in the philosophy of marketing; it occurs when people give up something in order to receive something that they would rather have.a. Exchangeb. Synergyc. Transformationd. Leveraginge. Reciprocity

ANS: A PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

6. In order for exchange to occur:a. a complex societal system must be involvedb. organized marketing activities must also take placec. a profit-oriented organization must be involved in the processd. money or other legal tender is requirede. each party must have something the other party considers to be valuable

ANS: EExchange involves the trade of items of value, but does not necessarily involve formal organizations, profit, or money/legal tender.

PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Product

9. For an exchange to take place:a. there must be at least two parties involvedb. money must be used in the transactionc. each party must feel obligated to accept the offerd. at least one party must have something of value that the other party desirese. neither party must communicate with the other

ANS: A PTS: 1 REF: 3-4 OBJ: 01-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

10. Indonesian logging companies harvest the rainforests for timber and assume that a market exists for their products. The typical Indonesian logging company has a(n) _____ orientation.a. exchangeb. productc. productiond. salese. environmental

ANS: C

EXAM 1 POOL ITEMS

The logging companies do not focus on the needs and desires of the marketplace.

PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: AppTOP: AACSB Ethics| TB&E Model Product

11. The concept of exchange is important to marketing because:a. if all the conditions for an exchange are in place, then the exchange will be completedb. exchange provides money to marketersc. marketing activities help to create exchanged. marketing activities are a requirement for exchange to take placee. money is the only medium of exchange for business marketers

ANS: CMarketing activities help the exchange to take place, but marketing can occur without an exchange.


14. Which of the following is NOT a marketing management philosophy?a. sales orientationb. societal marketing orientationc. market orientationd. profitability orientatione. production orientation

ANS: D PTS: 1 REF: 4-6 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

15. Firms with a _____ orientation focus on the internal capabilities of the firm rather than on the desires and needs of the marketplace.a. salesb. productionc. marketd. customere. customer-benefit

ANS: B PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

16. A company that sets its goals and strategies based on what its current equipment can produce, what products engineering can design, and what the company itself can do best, has a(n) _____ orientation.a. marketplaceb. salesc. marketd. exchangee. production

ANS: E PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Product

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19. A firm with a production orientation is most likely to survive if:a. there are many small competitors in the marketplaceb. demand for the product it produces exceeds supplyc. the needs of the marketplace are constantly shiftingd. supply for the product it produces exceeds demande. any of the above conditions exist

ANS: BThe production orientation can survive in the short term under a variety of conditions; however, if market needs change, long-term survival is difficult.

PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

20. A firm that adopts a(n) _____ orientation to marketing will fail to consider whether what the firm produces most efficiently also meets the needs of the marketplace.a. customerb. exchangec. productd. markete. production

ANS: EThe production orientation forces a company to build whatever it builds best, that is, whatever it has the experience and expertise in doing.

PTS: 1 REF: 4-5 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

22. The _____ orientation assumes people will buy more if aggressive selling techniques are used.a. marketb. salesc. customerd. productione. exchange

ANS: BThe sales orientation assumes aggressive selling is what is needed to increase demand.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

23. A _____ orientation assumes marketing means selling things and collecting money. It also assumes people will buy more goods and services if aggressive marketing techniques are used.a. salesb. productionc. marketd. customere. marketplace

ANS: A PTS: 1 REF: 5 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

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25. If a company uses a sales orientation, consumer complaints would most likely result in:a. a modification of the sales presentationb. product reinventionc. continuous market researchd. philanthropye. attempts to cut production costs

ANS: AThe sales orientation relies on aggressive sales techniques to fuel business.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

29. Companies that rely on the marketing concept and that have implemented a market orientation strategy recognize that:a. price is the most important variable for customersb. sales depend predominantly on an aggressive sales forcec. what the customer thinks he or she is buying is what is importantd. a company has to apply scientific management techniques to survivee. selling and marketing are essentially the same thing

ANS: CThe perceived product and perceived value are what the customer is buying, and the marketing concept and market orientation have endeavored to understand those perceptions.


30. A company that has a market orientation and adheres to the marketing concept does NOT:a. integrate all the activities of the firm to satisfy customer wantsb. focus on consumer needs and wantsc. differentiate the firm's products from its competitor's productsd. fuel sales growth through the application of aggressive sales techniquese. concentrate on long-term goal achievement (such as profits and growth) for the firm

ANS: DAggressive sales techniques are part of the sales orientation and are not needed if a company is meeting needs and wants of its customers.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy| TB&E Model Product

31. The statement, "Marketing should be introduced at the beginning rather than the end of the production cycle and integrated into each phase of the business," is consistent with a(n) _____ orientation.a. productionb. marketc. retaild. salese. enterprise

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ANS: BUnderstanding the competitive arena and competitors' strengths and weaknesses is a critical component of market orientation.


36. The marketing concept involves:a. focusing on customers' wants so that the organization can distinguish its product (or

products) from the competitors' productsb. satisfying management's needs and wants with the idea of maximizing profits in the short

runc. selling as much product as possible under the assumption people will buy more goods and

services if aggressive selling techniques are usedd. selling as much as possible under the assumption consumers will buy more at lower pricese. focusing on production in order to increase product quality and lower prices

ANS: A PTS: 1 REF: 5-6 OBJ: 01-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

37. The marketing concept includes a goal orientation to remind managers that:a. achieving long-term organizational goals is as important as satisfying customersb. customers must be satisfied no matter what the long-term effect on the firmc. the only reason for any business to exist is to make a profitd. the objective is to find a target market that differs from that of the competitione. functional integration of all departments is useful but not essential

ANS: AThe goal orientation refers to the company's goals, such as profit, growth, service, and survival.


38. The marketing concept stresses that the social and economic justification for an organization's existence is the satisfaction of customer needs and wants while:a. producing a good or service at the lowest possible costb. improving the general standard of livingc. constantly increasing sales volumesd. applying scientific management techniques to improve efficiencye. simultaneously meeting organization objectives

ANS: EThe marketing concept holds that the needs and wants of both the customer and the firm be served.


EXAM 1 POOL ITEMS

40. An organization with a(n) _____ believes that it exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests.a. sales orientationb. market orientationc. ethical business missiond. focused target market strategye. societal orientation

ANS: E PTS: 1 REF: 6 OBJ: 01-2 TYPE: DefTOP: AACSB Diversity| TB&E Model Customer

45. Which of the following statements about the societal orientation is true?a. Companies that protect the environment by using all-natural materials in their products are

showing a societal marketing orientation.b. Marketers cannot deliver all benefits sought by customers because these benefits may not

be in the long-term best interests of the customers.c. The societal marketing concept is an important refinement of the market concept.d. Organizations have both a social and economic justification for their existence.e. All of these statements about the societal orientation are true.

ANS: E PTS: 1 REF: 6 OBJ: 01-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Research| TB&E Model Customer

48. Organizations that sell products that are often unsought (such as life insurance and retirement plans) may find themselves adopting a _____ orientation because the companies are marketing products that most people do not want.a. salesb. productionc. marketingd. producte. customer

ANS: AAggressive selling is sometimes used by companies that sell products their customers do not want to buy.

PTS: 1 REF: 5 OBJ: 01-2 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model Promotion

57. _____ gives customers the feeling their concerns are being addressed and at the same time gives employees the feeling their expertise matters to management.a. Management-employee synergyb. Organizational entropyc. Managerial reciprocityd. Empowermente. Delegation

ANS: D PTS: 1 REF: 9 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

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58. Market-oriented firms primarily focus their efforts upon:a. improving the technological skills and competitive advantages of the firmb. satisfying the organization's needs for low overheadc. achieving the company’s societal responsibilities inexpensivelyd. distributing goods and servicese. satisfying the wants and needs of their customers

ANS: EMarket-oriented firms are focused outward toward their customers.

PTS: 1 REF: 6 OBJ: 01-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

59. Which of the following statements about a typical sales-oriented business is true?a. The company develops its products to meet the needs of specific groups of people.b. The primary goal of the company is profit through customer satisfaction.c. The company invests the majority of its resources in promoting its products and services.d. The company is in business to satisfy customers' wants and needs and deliver superior

value.e. All of these statements about a typical sales-oriented business are true.

ANS: CSee Review Learning Outcome 3.

PTS: 1 REF: 6 | 10 OBJ: 01-3 TYPE: CompTOP: AACSB Analytic| TB&E Model Customer

60. _____ is defined as the relationship between benefits and the sacrifice necessary to obtain those benefits.a. Opportunity costb. Marketing utilityc. Market qualityd. Satisfaction percentagee. Customer value

ANS: E PTS: 1 REF: 6 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

61. Marketers interested in offering customer value can:a. offer products that performb. give the consumer factsc. offer organization-wide commitment to service and after-the-sale supportd. avoid unrealistic pricinge. do all of these

ANS: E PTS: 1 REF: 6-7 OBJ: 01-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Customer

64. When customer expectations regarding product quality, service quality, and value-based price are met or exceeded, _____ is created.a. a value lineb. a quality riftc. planning excellence

EXAM 1 POOL ITEMS

d. customer satisfactione. expectation satisfaction

ANS: D PTS: 1 REF: 7 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product| TB&E Model Customer

66. _____ is a strategy that entails forging long-term partnerships with customers.a. Commitment sellingb. Relationship marketingc. Transactional marketingd. Market engineeringe. Organization-customer synergy

ANS: B PTS: 1 REF: 8 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

71. Which of the following measures would be the best indicator of whether your organization's personnel have a customer orientation?a. Ask each employee's boss if that person is customer-oriented.b. Assess each employee's impact on the profitability of the firm.c. Survey customers on how oriented the organization's personnel are to customer needs and

desires.d. Assess how well each employee has contributed to the marketing success of the firm by

examining every financial statement created by the organization.e. Test employees on their knowledge of customer service techniques.

ANS: CThe key to assessing how customer-oriented a firm's personnel are is to ask the customer. Only the customer can provide this type of information.


73. Some market-oriented firms give employees expanded authority to solve customer problems on the spot. This is known as:a. trainingb. deregulationc. empowermentd. commissioninge. mediating

ANS: C PTS: 1 REF: 9 OBJ: 01-3 TYPE: DefTOP: AACSB Communication| TB&E Model Customer

76. _____ is the collaborative efforts of people to achieve common objectives.

EXAM 1 POOL ITEMS

a. Effort trainingb. Teamworkc. Empowermentd. OJT traininge. Mediation

ANS: B PTS: 1 REF: 9 OBJ: 01-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

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Chapter 3 (Current text edition chapters 3 & 4) MULTIPLE CHOICE

1._____ is the concern of business for the long-range welfare of both the company and its relationships to the society within which it operates.a. Consumerismb. Corporate social responsibilityc. Cultural sensitivityd. Conventional moralitye. Environmental consideration

ANS: B PTS: 1 REF: 29 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

3. Corporate social responsibility is defined as the:a. belief that the legal system defines ethical behaviorb. development of inclusive codes of ethicsc. rules by which social rewards are attainedd. concern for social welfare by businessese. coordination of social programs for publicity purposes

ANS: D PTS: 1 REF: 29 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

4. Corporate social responsibility:a. is mandated by federal lawb. requires companies to sacrifice economic performance for the sake of their stakeholdersc. does not influence competitiond. may not always result in profit and growthe. is unaffected by environmental changes

ANS: D PTS: 1 REF: 29 OBJ: 03-1 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

7. _____ is the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profit and help the world at the same time.a. Sustainabilityb. Philanthropyc. Cause marketingd. Creative ethicse. International ethics

ANS: A PTS: 1 REF: 29 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

TOP: AACSB Ethics| TB&E Model Strategy

9. The pyramid of corporate social responsibilities contains all of the following components EXCEPT:a. economic responsibilitiesb. ethical responsibilities

EXAM 1 POOL ITEMS

c. cultural responsibilitiesd. legal responsibilitiese. philanthropic responsibilities

ANS: CSee Review Learning Outcome 1.

PTS: 1 REF: 29-30 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

15. The four components of the pyramid of corporate social responsibility are:a. sustainability, creativity, profit, and cultureb. organizational culture, creativity imagery, economic performance, and objectivityc. organizational, financial, social, and cultural responsibilitiesd. sustainability, legality, creativity, and competitione. economic, legal, ethical, and philanthropic responsibilities

ANS: E PTS: 1 REF: 29-30 OBJ: 03-1 TYPE: DefTOP: AACSB Ethics| TB&E Model Strategy

16. Which of the following statements describes ethics?a. Ethics are the moral principles or values that generally govern the conduct of an

individual.b. Ethics is the standard of behavior by which conduct is judged.c. Morals are a foundation for ethical behavior.d. Ethical values are situation specific and time oriented.e. All of the statements describe ethics.

ANS: E PTS: 1 REF: 30 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

17. Which of the following sayings best describes how people with conventional morality act?a. Don't put all of your eggs in one basket.b. When in Rome, do as the Romans do.c. Be wary of strangers bearing gifts.d. A rolling stone gathers no moss.e. Don't count your chickens before they hatch.

ANS: B PTS: 1 REF: 31 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

20. The use of ethical decision making:a. can be influenced by top managersb. is influenced by the probability of harmful outcomesc. depends on the number of people to be affectedd. depends on the magnitude of possible consequencese. is accurately described by all of the choices

ANS: E PTS: 1 REF: 31 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

22. Which of the following factors does NOT tend to influence ethical decision making and judgments?

EXAM 1 POOL ITEMS

a. probability of a harmful outcomeb. length of time between decision and the onset of consequencesc. level of multiculturalismd. number of people to be affectede. potential magnitude of the consequences

ANS: C PTS: 1 REF: 31 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| AACSB Diversity| TB&E Model Strategy

24. A human resources manager is creating a code of ethics for the employees of the retirement home she works for. Which of the following is NOT an ethics principle she should keep in mind as she creates this code?a. The principles should not upset current retirement home workers and future job applicants.b. Any decisions should be fair to all concerned: retirement home nurses, cleaning personnel,

and administrative staff.c. Input on the code should be gained from other knowledgeable individuals or groups.d. Principles can deviate from common practices because of the prestigious nature of the

facility.e. She should not have to pull rank or use coercion to implement her ethics code.

ANS: DAn unethical code would presume that the company is an exception to a common practice in the industry.

PTS: 1 REF: 31-32 OBJ: 03-2 TYPE: CompTOP: AACSB Ethics| TB&E Model Strategy

25. A(n) _____ is a defined group that managers feel is most likely to buy a firm's product.a. target marketb. buying centerc. aggregated unitd. consumer clustere. demographic sample


27. Which of the following statements best describes the typical target market?a. A target market will remain stable over time, with the same group of consumers.b. Target markets change over time as consumers drop in or out of the market, and as tastes

change.c. Target markets are not strongly affected by changes in the external environment.d. Target markets only change when the features and benefits of the product offering change.e. Target markets cannot be specifically defined according to age, income, or location

because these factors are continually changing.

ANS: BTarget markets are defined and described, but they are always changing in response to environmental changes.


EXAM 1 POOL ITEMS

29. The external environment:a. can be controlled in much the same manner as the internal marketing mixb. cannot be influenced by marketing managersc. does not change over timed. does not have an impact on Fortune 500 companiese. must be continually monitored by marketing managers

ANS: E PTS: 1 REF: 32 OBJ: 03-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Strategy

30. The external environment is a strong influence on a target market and can be a source of _____ for the marketing manager.a. opportunities and threatsb. threats and strengthsc. environmental loopholesd. opportunities and weaknessese. product myopia

ANS: AThe external environment can provide opportunities to serve new and changing needs, as well as warnings about changes that could threaten the current position of the firm. Students will need to remember what a SWOT analysis is to answer this question.


31. Marketing managers cannot control _____, but they can at times influence it.a. where advertising is placedb. the external environmentc. the sales forced. the distribution strategye. how products are priced

ANS: BThe external environment is basically uncontrollable, but the other four answers are part of the marketing mix.


33. What is apparently the most difficult external variable for marketing managers to forecast, influence, or integrate into marketing plans?a. technologyb. social factorsc. demographyd. competitione. economic conditions

ANS: BSocial factors and changes are difficult to foresee, because they are usually slow and/or small changes. Also, it is very difficult for one company to affect social factors in any appreciable manner.

PTS: 1 REF: 33 OBJ: 03-4 TYPE: Comp

EXAM 1 POOL ITEMS

TOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

35. When a company engages in _____, it is implementing strategies that attempt to shape the external environment in which it operates.a. synergistic controlb. environmental managementc. transactional managementd. market controle. reactive management


38. _____ factors are the environmental factors concerned with the changes in people's values, lifestyles, and family roles.a. Socialb. Economicc. Politicald. Competitivee. Demographic

ANS: A PTS: 1 REF: 33 OBJ: 03-4 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

43. Consumer preference for low-carb diets has greatly modified the way food is being marketed. This concern with health issues is an example of a(n) _____ factor.

a. economicb. political and legalc. technologicald. demographice. social

ANS: E PTS: 1 REF: 33 OBJ: 03-4 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product| TB&E Model Customer

45. What do self-sufficiency, upward mobility, and conformity have in common?a. These are no longer valued attitudes.b. They are attitudes that can easily be changed.c. These are three perceptions that Americans have of the Asian lifestyle.d. These are three of the core values that have influenced lifestyles in the United States.e. They are the determinants of a component lifestyle.

ANS: DThe fourth value is work ethic.

PTS: 1 REF: 33 OBJ: 03-4 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

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48. A(n) _____ is the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle.a. aggregated lifestyleb. component lifestylec. psychographic mode of livingd. demographically defined lifestylee. targeted lifestyle

ANS: B PTS: 1 REF: 33-34 OBJ: 03-4 TYPE: DefTOP: AACSB Diversity| TB&E Model Product

55. The growth of dual-income families has resulted in:a. burnoutb. a sense of entitlementc. decreased discretionary incomed. decreased GNPe. increased purchasing power

ANS: E PTS: 1 REF: 34 OBJ: 03-4 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

56. Which of the following events has had a greater effect on marketing than any other social change?a. the growing number of one-child familiesb. the increasing number of immigrants from Northern Europec. the growing number of people on the Internetd. the increasing number of working womene. the growing number of people of retirement age who are continuing work

ANS: D PTS: 1 REF: 34 OBJ: 03-4 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

58. The study of people's vital statistics, such as their ages, births, deaths, and locations, is called:a. cultural sociologyb. psychometricsc. ecologyd. ethnographye. demography

ANS: E PTS: 1 REF: 34-35 OBJ: 03-5 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

59. Which of the following is NOT a demographic characteristic of a population?a. income levelb. agec. valuesd. educatione. birthrate

ANS: CValues are a social factor.

PTS: 1 REF: 34-35 OBJ: 03-5 TYPE: CompTOP: AACSB Diversity| TB&E Model Customer

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69.A multicultural society is characterized by:a. a population of recent immigrants that are closely related by custom and traditionb. a conglomeration of small and large ethnic groups that have little in commonc. even distribution of all ethnic groups in a geographic regiond. effective mass-marketing techniquese. one large dominating racial or ethnic group in a geographic area

ANS: C PTS: 1 REF: 39 OBJ: 03-6 TYPE: DefTOP: AACSB Diversity| TB&E Model Distribution| TB&E Model Customer

71. A furniture retailer that specializes in selling entire rooms of furniture has hired you to identify 25 geographic target markets that can be described as multicultural societies. What types of locations should you offer this firm?a. cities that have historically had low immigration ratesb. traditional test marketsc. regions that are dominated by one ethnic group and that have multiple smaller ethnic

groupsd. unindustrialized arease. locations in which all major ethnic groups in the area are equally represented

ANS: EMulticultural societies are not defined by geography, history, or products produced, but by the racial and ethnic composition of the population.

PTS: 1 REF: 39 OBJ: 03-6 TYPE: AppTOP: AACSB Diversity| TB&E Model Customer

74. The higher your _____, the higher your purchasing power:a. gross incomeb. social classc. disposable incomed. cost of livinge. inflation index

ANS: CPurchasing power is measured by comparing income to the relative cost of a set standard of goods an services. It is a aligned with net income, or income minus a standard set of expenses. Assuming a constant income, the higher the cost of living (the expenses), the lower the purchasing power.


76. Factors, such as interest rates, inflation, and consumer income that influence the marketing environment, are called _____ factors.a. economicb. socio-demographicc. politicald. governmente. consumption

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77. _____ is measured by comparing the relative cost of a standard of goods and services in different geographic areas.a. Gross individual profitb. Purchasing powerc. Net profitd. Relative pricinge. Price escalation

ANS: B PTS: 1 REF: 39-40 OBJ: 03-7 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

78. When income is high relative to the cost of living, consumers _____.a. have more discretionary incomeb. begin anticipating a period of price decelerationc. stop buying luxury goods and servicesd. have significantly less disposable incomee. anticipate price escalation by stockpiling

ANS: A PTS: 1 REF: 39-40 OBJ: 03-7 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Customer

79. _____ is the primary determinant of a person's earnings.a. Multiculturalismb. Lifestylec. Educationd. The aging of the baby boomerse. Global competition

ANS: C PTS: 1 REF: 39 OBJ: 03-7 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Customer

80. ____ is measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year.a. Inflationb. Recessionc. Depressiond. Consumer break-evene. Price escalation

ANS: A PTS: 1 REF: 40 OBJ: 03-7 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

81. When planning marketing strategies during times of inflation, marketers must be aware inflation causes consumers to:a. purchase more goods and services to support their psychological selves, such as

counseling and stress management trainingb. consume more meals away from homec. buy in small quantities until inflation is overd. decrease their brand loyalty to products they have traditionally usede. put more money into savings accounts because prices are too high

ANS: D

EXAM 1 POOL ITEMS

In times of inflation, consumers are more price conscious and less brand-loyal.

PTS: 1 REF: 40 OBJ: 03-7 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Pricing

82. A period of economic activity when income, production, and employment tend to fall, reducing overall demand, is called:a. stagnationb. an inflationc. a recessiond. price escalatione. a depression

ANS: C PTS: 1 REF: 40 OBJ: 03-7 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

85. Which of the following strategies is appropriate for a marketer to use during a time of economic recession?a. Promote product value.b. Maintain and improve customer services.c. Emphasize top-of-the-line products in promotions.d. Offer products that are economical and efficient.e. Do all of these.

ANS: E PTS: 1 REF: 40-41 OBJ: 03-7 TYPE: CompTOP: AACSB Technology| TB&E Model Pricing

86. Which of the following is sometimes an effective weapon for fighting inflation and recession?a. technologyb. line extensionsc. increased capital gains taxesd. introducing product-line extensionse. reducing R&D expenditures

ANS: A PTS: 1 REF: 40-41 OBJ: 03-8 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

87. Research that attempts to expand the frontiers of knowledge rather than solving a specific, pragmatic problem is called:a. technical diversityb. reactive researchc. applied researchd. experiential researche. basic research

ANS: E PTS: 1 REF: 41 OBJ: 03-8 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

100. Laws and regulations of various governments and their ongoing development and change are an example of _____ factors and are part of all organizations' external environment.a. economic investmentb. political and legalc. research and development

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d. competitivee. demographic

ANS: B PTS: 1 REF: 42 OBJ: 03-9 TYPE: DefTOP: AACSB Technology| TB&E Model Strategy

101. The _____ Act strengthened the Clayton Act to prevent corporate acquisitions that reduce competition.a. Hart-Scott-Rodinob. Lanham-Scottc. Celler-Kefauver Antimergerd. Robinson-Patmane. Sherman

ANS: CSee Exhibit 3.2. The Celler-Kefauver Act bolstered the Clayton Act's provision dealing with interlocking directorates and closed another loophole that had allowed corporate takeovers.

PTS: 1 REF: 42 OBJ: 03-9 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

102.The _____ Act requires large companies to notify the government of their intent to merge.a. Hart-Scott-Rodinob. Shermanc. Celler-Kefauver Antimergerd. Robinson-Patmane. Lanham

ANS: ASee Exhibit 3.2.


103. The Gramm-Leach-Bliley Act and the Health Insurance Portability and Accountability Act are both important laws designed to:a. protect the channels of commerceb. restrict alcohol and tobacco advertisingc. eliminate certain products from being advertised on children’s television programsd. protect consumers from identity thefte. penalize marketers selling merchandise with counterfeit brand names

ANS: D PTS: 1 REF: 42 OBJ: 03-9 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

EXAM 1 POOL ITEMS

Chapter 2

3. Strategic plans require:a. long-term resource commitmentsb. a change in organizational structurec. the addition of new personneld. new product developmente. changes in prices

ANS: AStrategic plans are long-range plans that involve developing, organizing, and controlling marketing activities.


4. _____ is the managerial process of creating and maintaining a fit between the organization's objectives and resources and evolving market opportunities.a. Tactical managementb. The market auditc. Functional planningd. Environmental scanninge. Strategic planning

ANS: E PTS: 1 REF: 15 OBJ: 02-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

7. Which of the following statements about a marketing plan is true?a. Marketing plans can exist as oral traditions.b. The marketing plan should be viewed as a series of sequential steps.c. All marketing plans have basically the same content.d. A marketing plan is created so an organization can meet its marketing objectives.e. All of the statements about a marketing plan are true.

ANS: DBy definition, marketing plans are written. Several steps of the marketing plan can be done at the same time. The content of marketing plans varies.

PTS: 1 REF: 15 OBJ: 02-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

8. _____ is the process of anticipating events and determining strategies to achieve organizational objectives.a. Planningb. Portfolio evaluationc. Forecastingd. Implementatione. Evaluation

ANS: A PTS: 1 REF: 15 OBJ: 02-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

EXAM 1 POOL ITEMS

10. Marketing plans should be written to do all of the following EXCEPT:a. compare actual and expected performanceb. provide clearly stated activitiesc. create common goals for employees to work towardd. allow managers to enter the marketplace with an awareness of possibilities and problemse. control the elements of the external marketing environment

ANS: EMarketing environment variables cannot be controlled.

PTS: 1 REF: 16 OBJ: 02-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

11. Which of the following is one of the elements of the marketing plan?a. a business mission statementb. a situation analysisc. a target market strategyd. the marketing mixe. all of the choices

ANS: ESee Exhibit 2.1.

PTS: 1 REF: 17 OBJ: 02-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Marketing Plan

13. The _____ answers the question, "What business are we in, and where are we going?"a. mission statementb. financial statementc. situation analysisd. market strategye. strategic plan

ANS: A PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

17. The focus of an organization's mission statement should be on:a. the products it wishes to sellb. the market it wishes to servec. its social responsibilitiesd. the desires of government regulatorse. technologies it understands well

ANS: BThe choice of the market to serve determines the product and technology decisions.


20. _____ occurs when a business is defined in terms of goods and services rather than by the benefits customers seek from it.

EXAM 1 POOL ITEMS

a. A circle trapb. A market barrier entryc. A reactive focusd. Unempowermente. Marketing myopia

ANS: E PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

21. A popular technique for managing a large organization with different technologies and markets is to divide it into:a. strategic business unitsb. different technologiesc. strategic target marketsd. design matricese. tactical segments

ANS: A PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

22. The acronym SBU refers to:a. stock in business unitsb. strategic business unitc. standard business utilizationd. strategic barter unitse. samples by units

ANS: B PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Analytic| TB&E Model Strategy

25. An SBU:a. competes with the same companies as the other SBUs in the parent organizationb. shares the same mission with all the other SBUs in the parent organizationc. controls its business independent of other SBUs in the organizationd. usually benefits from the combined corporate raw materials purchasese. still has strategic planning performed back at corporate headquarters

ANS: CSBUs have separate business functions from one another and have their own mission statements, markets, and planning.


27. After management agrees on a mission statement, it must set objectives. Which of the following is NOT a characteristic of a good objective?a. profitableb. realisticc. measurabled. time-specific

EXAM 1 POOL ITEMS

e. consistent

ANS: AGood objectives are not necessarily stated in terms of profit.

PTS: 1 REF: 18 OBJ: 02-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

28.A _____ is defined as a statement of what is to be accomplished through marketing activities.a. mission statementb. business planc. marketing objectived. goal-driven directivee. marketing criteria

ANS: C PTS: 1 REF: 18 OBJ: 02-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

30. When an organization creates a mission statement that is too narrow, _____ results.a. marketing synergyb. marketing myopiac. directional marketingd. an internal threate. sustainable competitive advantage

ANS: BMarketing myopia defines a business in terms of goods and services rather than in terms of benefits customers seek. See Review Learning Outcome 2.

PTS: 1 REF: 18 OBJ: 02-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

35. For marketing objectives to be realized, they must meet all of the following criteria EXCEPT:a. be consistent with organization objectivesb. be measurablec. be attainabled. be challenginge. be set within a one-year time frame

ANS: EThere is no one-year time frame restriction for marketing objectives although specifying a particular time frame makes an objective more clear and precise.


EXAM 1 POOL ITEMS

37. A _____ is a formal study conducted by an organization to ascertain its current status and capabilities and its future expectations.a. situation analysisb. marketing auditc. trend analysisd. strategic alternative selectione. competitive advantage audit

ANS: A PTS: 1 REF: 19 OBJ: 02-4 TYPE: DefTOP: AACSB Analytic| TB&E Model Research

39. The SWOT acronym refers to a firm’s analysis of its:a. sales, width of product mix, observations, and technologyb. situations, wealth, organizational strengths, and target marketsc. strengths, weaknesses, opportunities, and threatsd. service levels, willingness to spend, organizational culture, and total revenuese. strategies, willingness to change, objectives, and trends


43. _____ is defined as the collection and interpretation of information about forces, events, and relationships that may affect the organization.a. Market samplingb. An internal auditc. Opportunity analysisd. Environmental scanninge. Stakeholder analysis

ANS: D PTS: 1 REF: 19 OBJ: 02-4 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Research

61. _____ show costs declining at a predictable rate as experience with a product increases.a. Liquidity growth curvesb. EOQ graphsc. Breakeven analysesd. Experience curvese. Supply/demand curves

ANS: D PTS: 1 REF: 20 OBJ: 02-5 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product| TB&E Model Pricing

62. Which of the following is NOT a source of a cost competitive advantage?a. reengineeringb. experience curvesc. break-even analysesd. efficient labore. production innovation

ANS: C PTS: 1 REF: 20-21 OBJ: 02-5 TYPE: Comp

EXAM 1 POOL ITEMS

TOP: AACSB Reflective Thinking| TB&E Model Pricing

67. Which of the following is a type of strategic alternative that matches products and markets?a. vertical integrationb. product penetrationc. divestmentd. horizontal integratione. market penetration


68. _____ is a strategy of increasing market share for present products in existing markets.a. Market penetrationb. Product developmentc. Market developmentd. Diversificatione. Product penetration

ANS: A PTS: 1 REF: 22 OBJ: 02-6 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

70. _____ is a strategy that attracts new customers to existing products.a. Product developmentb. Market developmentc. Market penetrationd. Product penetratione. Diversification


75. _____ is a strategy that creates new products for present markets.a. Product penetrationb. Market penetrationc. Product developmentd. Market developmente. Diversification


76. _____ is the strategy of increasing sales by introducing new products into new markets.a. Product penetrationb. Product developmentc. Market penetrationd. Market developmente. Diversification

EXAM 1 POOL ITEMS

ANS: E PTS: 1 REF: 22 OBJ: 02-6 TYPE: DefTOP: AACSB Diversity| TB&E Model Strategy| TB&E Model International Perspective

102. A(n) _____ describes and estimates the size and sales potential of market segments of interest to the firm and assesses key competitors in these market segments.a. marketing orientationb. environmental scanc. marketing mix auditd. target market strategye. market opportunity analysis


105. The _____ is the unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.a. internal environmental mixb. marketing mixc. product mixd. product linee. market portfolio


106. The starting point of any firm's marketing mix is the:a. analysis of what production equipment is available and owned by the companyb. design of the promotion campaign to be used for the productc. selection of the places through which the good or service will be soldd. determination of the product's price, enabling future revenues and budgets to be estimatede. development of the good or service to be sold

ANS: EThe product is the starting point for any marketing mix. Without it, pricing, distribution, and promotion are irrelevant. The production capacity can be changed to fit the proposed product.


109. Making sure products are available when and where customers want them is the job of which element of the marketing mix?a. advertising strategiesb. production strategiesc. product strategiesd. promotion strategiese. distribution strategies

ANS: EDistribution strategies make products available when and where customers want them.PTS: 1 REF: 25-26 OBJ: 02-8 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Distribution| TB&E Model Product

EXAM 1 POOL ITEMS

EXAM 1 POOL ITEMS

Chapter 4 (Current text edition chapter 5)MULTIPLE CHOICE

1.Individuals and organizations utilizing a global vision to effectively market goods and services across national boundaries are engaged in:a. developing international selling schemesb. implementing standard international marketingc. implementing global marketing standardizationd. supplementing their foreign visione. practicing global marketing

ANS: E PTS: 1 REF: 47 OBJ: 04-1 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Product

3. Which of the following statements about global marketing is true?a. Marketing to target markets throughout the world has become an imperative for business.b. Often a U.S. firm's toughest domestic competition comes from foreign companies.c. Marketing managers must develop a global vision not only to recognize and react to

international marketing opportunities but also to remain competitive at home.d. Adopting a global vision can be lucrative for a company, and global marketing can offset

weak domestic performance.e. All of these statements about global marketing are true.

ANS: E PTS: 1 REF: 47 OBJ: 04-1 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective

6. Which of the following statements about multinational firms is true?a. Multinationals typically do not change their methods of reaching their global markets if

they are successful with their initial strategy.b. Multinationals are defined as companies heavily engaged in exporting and importing.c. All multinationals must enter the fourth stage of globalization before they are fully

internationalized.d. Multinationals often develop their global businesses in stages.e. The five stages of globalization closely mirror the five stages of the product life cycle.

ANS: DMultinationals can go through up to four stages in their quest to globalize their business. Generally, only high-tech firms ever reach the fourth stage. Multinationals are companies that heavily engage in international trade, beyond exporting and importing.

PTS: 1 REF: 49-50 OBJ: 04-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective

7. A(n) _____ is a company that is heavily engaged in global trade and moves its resources, goods, services, and skills across national boundaries.a. international facilitatorb. global traderc. multinational corporationd. exporting companye. international merchant

EXAM 1 POOL ITEMS

ANS: C PTS: 1 REF: 49-50 OBJ: 04-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Distribution

10. Which of the following describes a common criticism of multinational companies?a. the transference of the wrong kind of technology to a developing nationb. excessive employment informationc. countertradingd. the transference of labor-intensive technologye. dumping

ANS: ATypically, the technology needed to run operations in developing nations is capital-intensive and thus does not substantially increase employment.

PTS: 1 REF: 50 OBJ: 04-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective

11. A company that is capital-intensive:a. has an altered fiscal strategy for overseas operationsb. spends more on equipment than on laborc. makes better use of benchmarking than other types of businessd. creates employment monopoliese. must engage in countertrading due to restrictive foreign legislature

ANS: B PTS: 1 REF: 50 OBJ: 04-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective

13. With a _____, a firm produces standardized products to be sold the same way all over the world.a. traditional marketing strategyb. global marketing standardization approachc. product extension approachd. culturally based marketing strategye. synergistic approach to marketing

ANS: B PTS: 1 REF: 50 OBJ: 04-2 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Product

14. Global marketing standardization:a. is becoming less popular with the large multinationalsb. encourages product, packaging, and advertising variations for each nation or local marketc. actually raises production costsd. presumes markets throughout the world are becoming more alikee. is more popular with consumer products than with industrial goods

ANS: DWith a global marketing standardization approach, a firm produces standardized products to be sold the same way worldwide. This approach assumes all customers have the same needs and wants.

PTS: 1 REF: 50 OBJ: 04-2 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective

EXAM 1 POOL ITEMS

16. A business thinking of expanding into global markets needs to examine all of the following external environments EXCEPT:a. cultureb. political structure and actionsc. its marketing mixd. natural resourcese. demographic makeup

ANS: CThe marketing mix is the keystone of a company's internal environment.

PTS: 1 REF: 50 OBJ: 04-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model International Perspective| TB&E Model Strategy

EXAM 1 POOL ITEMS

17.Central to any society is a common set of values shared by its citizens that determines what is socially acceptable. Marketers refer to these values collectively as a country's:a. ethical systemb. culturec. ethnocentricityd. national personalitye. socialization

ANS: B PTS: 1 REF: 50-51 OBJ: 04-3 TYPE: DefTOP: AACSB Diversity| TB&E Model Customer

24. Which of the following is an important cultural factor that should be considered by global marketers?a. competitive synergyb. languagec. natural resourcesd. technology sensitivitye. level of economic development

ANS: B PTS: 1 REF: 51 OBJ: 04-3 TYPE: CompTOP: AACSB Diversity| TB&E Model Strategy

26. Which of the following statements about the political environment is true?a. A recession is part of the political environment.b. A country is either socialistic or capitalistic, but never both.c. The countries with the least across-the-board regulations and political structures foster the

strongest economies.d. The European Union is purely an economic arrangement and has no political impact on

marketing.e. All of these statements about the political environment are true.

ANS: CRecession is an economic factor. Countries are a combination of socialism and capitalism. The European Union is a means for the member nations to pursue an economic, monetary, and political union.


31. A tax levied on the goods entering a country is called a(n):a. licenseb. quotac. boycottd. exchange controle. tariff

ANS: E PTS: 1 REF: 52 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing| TB&E Model Product

33. A(n) _____ is a limit on the amount of a specific product that can enter a country.a. quotab. tariff

EXAM 1 POOL ITEMS

c. boycottd. exchange controle. transfer limit

ANS: A PTS: 1 REF: 52 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

36. An exclusion of all products from certain countries or companies by a government or group is called a(n):a. expropriationb. quotac. tariffd. exchange controle. boycott

ANS: E PTS: 1 REF: 52 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Product

39. A(n) _____ is a law that compels a company earning foreign currency from its exports to sell it to a central bank rather than sending the money out of the country.a. tariffb. quotac. fiscal prerequisited. exchange controle. transfer barrier

ANS: D PTS: 1 REF: 52 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Pricing

40. _____ are trade alliances in which several countries agree to work together to form a common trade area that enhances trade opportunities among those countries.a. Boycottsb. Regional unificationsc. Market groupingsd. Free trade nationse. Expropriation members


41. Negotiations (such as GATT or the Uruguay Round) between countries that are made to stimulate global exchange and remove barriers are called _____ agreements.a. tradeb. joint venturec. CRMd. exchangee. licensing


42. _____ is a trade agreement that includes Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, and Uruguay. This agreement eliminated the tariffs among these trading partners.

EXAM 1 POOL ITEMS

a. NAFTAb. Maastrichtc. WTOd. GATTe. Mercosur


43. The latest round of World Trade Organization (WTO) talks has been contentious. A major goal of this _____ is to bolster the developing economies of Africa, Asia, and Latin America where up to two-thirds of the population works in agriculture.a. Mercosur covenantb. CAFTA Alliancec. Doha Roundd. Uruguay Rounde. WTO Round

ANS: C PTS: 1 REF: 52-53 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model International Perspective

44. The _____ of trade negotiations created the _____, which replaces GATT. This trade agreement dramatically lowers trade barriers worldwide.a. Uruguay Round; World Trade Organizationb. Doha Round; European Unionc. Doha Round; NAFTAd. Paraguay Round; South American Free Trade Agreemente. Mercosur; European Union

ANS: AThe Uruguay Round created the WTO.

PTS: 1 REF: 53 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

45. The _____ is the most ambitious global trade agreement ever negotiated; the agreement has reduced tariffs by one-third worldwide.a. Uruguay Roundb. Mercosurc. GATTd. NAFTAe. Maastricht Treaty

ANS: A PTS: 1 REF: 52-53 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

46. The North American Free Trade Agreement (NAFTA) did NOT:a. create the world's largest free-trade zone including Canada, the United States, and Mexicob. substantially reduce economic growth in Mexicoc. allow U.S. and Canadian financial-services companies to own subsidiaries in Mexicod. remove many tariffs and duties so that Mexico, Canada, and the United States can trade

more freelye. expand opportunities for U.S. businesses in Mexico

ANS: B

EXAM 1 POOL ITEMS

Over the years, Mexico has made economic gains due to NAFTA.

PTS: 1 REF: 53 OBJ: 04-3 TYPE: CompTOP: AACSB Reflective Thinking| TB&E Model Distribution

48. The goal of the Central America Free Trade Agreement (CAFTA) is to:a. create free-trade agreements between the United States and other industrialized nationsb. eliminate all protectionismc. raise prosperity levels in all industrializing nationsd. establish a free trade agreement between the United States and certain Latin American

countriese. make sure all nations achieve the economic and technological development of a takeover

economy or better

ANS: D PTS: 1 REF: 53 OBJ: 04-3 TYPE: DefTOP: AACSB Reflective Thinking| TB&E Model Strategy

EXAM 1 POOL ITEMS

49. Which of the following statements about the European Union (EU) is true?a. The EU creates a single Europroduct for a generic Euroconsumer.b. The EU removes all internal trade barriers and standardizes regulations in European

countries for easier trade.c. The EU can correctly be called the "United States of Europe" because all European voters

have agreed to these changes.d. The existence of the EU eliminates protectionist movements by United Europe against the

Japanese and the United States.

e. None of these statements about the EU is true.

ANS: EBecause of diverse languages and cultures, no "United States of Europe" or a generic Euroconsumer results from United Europe. There exists the possibility of a protectionist movement and increased competition. It does not eliminate all trade barriers.


51. A multinational company that makes a labor-intensive product would be interested in the _____ makeup of countries. Factors such as median age, gender, and literacy rates would determine the success of its global expansion.a. demographicb. lifestylec. naturald. culturale. economic

ANS: ADemographics include age and educational levels as well as ethnicity and gender.

PTS: 1 REF: 54-55 OBJ: 04-3 TYPE: AppTOP: AACSB Reflective Thinking| TB&E Model International Perspective

EXAM 1 POOL ITEMS

54. Vast differences in natural resources create all of the following EXCEPT:a. potential for military interventionb. shifts in wealth between nationsc. inflation and recessiond. global dependenciese. export opportunities for countries with no natural resources

ANS: EWhile differences do create shifts in wealth, dependencies, inflation, recession, and the potential for conflict, they only hinder opportunities for the countries that do not have resources.


55. Which method of entering the global marketplace would be LEAST risky?a. exportingb. licensingc. contract manufacturingd. joint venturese. direct investment

ANS: ASee Exhibit 4.1.


63. A(n) _____ is a global intermediary that operates primarily in agriculture and raw materials by bringing the buyer and seller together.a. buyer for exportb. export agentc. license agentd. import agente. export broker


64. A cooperative of egg producers believes a profitable market for eggs exists overseas where people are not as concerned about cholesterol. If the cooperative decides to export, it will most likely use a(n):a. commission merchantb. drop shipperc. export brokerd. import agente. export agent

ANS: CExport brokers typically handle agriculture and raw materials.

PTS: 1 REF: 56 OBJ: 04-4 TYPE: AppTOP: AACSB Analytic| TB&E Model Product

EXAM 1 POOL ITEMS

65. _____ are foreign sales agents-distributors who live in a foreign country and represent a domestic company in sales situations. They perform the same functions as domestic manufacturers' agents who help with financing and shipping.a. Export agentsb. Export brokersc. Import brokerd. Buyers for exporte. Licensing agents


66. The _____ is an intermediary in the global market who assumes all risks and sells globally for its own account. The domestic manufacturer usually treats it like a domestic customer.a. buyer for exportb. export agentc. joint venturerd. contract manufacturere. market group


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