Chap 009
Chap 009
Chap 009
True / False Questions 1. (p. 246) The transfer of public-sector enterprises to the private sector creates opportunities for international marketers. TRUE
2. (p. 246) The standard for making profit is the single most important environmental element to which the foreign marketer must adjust the marketing task. FALSE
3. (p. 247) The current level of economic development within a country dictates the kind and degree of market potential that exists. TRUE
4. (p. 247) The expansion of military interventions around the world is one of the factors changing the way countries trade and prosper in the 21st century. FALSE
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5. (p. 247) Capital development is generally understood to mean an increase in national production results that increase in the average per capita gross domestic product. FALSE
Difficulty: Hard Type: Application
6. (p. 247) In the United Nations' stages of economic development, the first group is MDCs (more-developed countries). TRUE
7. (p. 247) With respect to the United Nations' stages of economic development, the most advanced stage is one described as industrialized countries with high per capita incomes. TRUE
9. (p. 247) Countries characterized as being industrially underdeveloped, agrarian, a subsistence society with rural populations, an extremely low per capita income level, and has little world trade involvement, the country would be classified as a LDC (less-developed country). FALSE
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10. (p. 248) One of the "Four Tigers" of Southeast Asia is South Korea. TRUE
Difficulty: Moderate Type: Application
11. (p. 250) One of the factors that exists that helps a NIC (newly industrializing country) to experience economic growth is economic and legal reforms. TRUE
12. (p. 252) Industrialization is the fundamental objective of most developing countries. TRUE
13. (p. 253) Examples of infrastructure include automobiles, bicycles, motorcycles, and motorboats. FALSE
14. (p. 254, Exhibit 9.2) Miles (or kilometers) of roads, rail lines, numbers of vehicles, mobile phones, and personal computers are indicators of a country's external market structure. FALSE
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15. (p. 254) Countries begin to lose economic development ground when their infrastructure cannot support an expanding population and economy. TRUE
Difficulty: Easy Type: Comprehension
16. (p. 258) If modern and traditional sectors within a country's economy coexist alongside one another, the correct term for this phenomenon would be bi-economic. FALSE
17. (p. 256) With respect to marketing in a developing country, a marketing program cannot superimpose a sophisticated strategy but must be keyed to each situation and provide for optimum utility given a specific set of circumstances. TRUE
18. (p. 257, Exhibit 9.3) The beginning stage of the marketing process is called manufacturing. FALSE
19. (p. 257, Exhibit 9.3) An entrepreneurial commercial society is based on agriculture and raw materials production and has achieved a level of surplus where the surplus can be sold. TRUE
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20. (p. 257, Exhibit 9.3) The United States economy from 1950 to the present has been described as one where the primary orientation is marketing. TRUE
Difficulty: Easy Type: Application
21. (p. 259, Exhibit 9.4) The leisure consumption of Japan is approximately three times as great as the leisure consumption of Brazil. FALSE
22. (p. 263) What is occurring in the BEMs is analogous to the situation after World War II when tremendous demand was created during the reconstruction of Europe. TRUE
23. (p. 262) Big emerging markets share common traits. One of the traits common to BEMs is that they have significant populations. TRUE
24. (p. 262) Mexico, China, and Turkey are considered to be BEM (Big Emerging Markets) countries. TRUE
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25. (p. 264-265) A key to economic development in Eastern Europe has been the ability to adopt advertising techniques used in the West. FALSE
Difficulty: Moderate Type: Application
26. (p. 265) South America has been the fastest-growing area in the world for the past three decades. FALSE
27. (p. 266) The "Four Tigers" are represented by Hong Kong, South Korea, Singapore, and Taiwan. TRUE
28. (p. 267) In formal terms, Hong Kong is listed as a SAR (special administrative region) of China. TRUE
29. (p. 271) Consumers in countries with low per capita incomes show remarkable resourcefulness in finding ways to buy what really matters to them. TRUE
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30. (p. 246) Which of the following is NOT one of the factors changing the way countries trade and prosper in the twenty-first century? A. The transition from socialist to market-driven economies. B. Liberalization of trade and investment policies in developing countries. C. The transfer of public-sector enterprises to the private sector. D. The rapid development of regional market alliances. E. The expansion of military interventions around the world.
Difficulty: Hard Type: Application
31. (p. 246) The __________ level of a country is the single most important environmental element to which the foreign marketer must adjust the marketing task. A. political stability B. entrepreneurial C. economic D. technology E. literacy
32. (p. 247) The current level of economic development within a country: A. determines the economic models to be used in countries' universities and colleges. B. solidifies the mindset of the economic minister of any country to be traded with. C. dictates the kind and degree of market potential that exists. D. constrains the ability to exchange currency. E. indicates its degree of social progress.
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33. (p. 247) ___________ development is generally understood to mean an increase in national production that results in an increase in the average per capita gross domestic product (GDP). A. Market B. Export C. Import D. Economic E. Supply
Difficulty: Moderate Type: Application
34. (p. 247) _____________, as commonly defined today, tends to mean rapid economic growth and increases in consumer demand. A. Economic development B. Market development C. Supply development D. Export development E. Import development
35. (p. 247) __________ classifies a country's stage of economic development as three categories of its level of industrialization. A. The U.S. Department of Commerce B. John Maynard Keynes C. Arthur Laffer D. The United Nations E. The World Trade Organization
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36. (p. 247) The United Nations stages of economic development has been criticized because it __________. A. no longer seems relevant in the rapidly industrializing world B. accepts contributions from more developed countries C. duplicates the European Union stages of economic development D. contains too many categories E. serves as a resource for the World Bank
Difficulty: Moderate Type: Comprehension
37. (p. 247) Considering the United Nations' stages of economic development presented in the text for classifying countries with respect to levels of industrialization, if a country is industrially underdeveloped, agrarian, subsistence society with rural populations, extremely low per capita income levels, the country is in which of the following groups? A. PDCs (parallel-developed countries) B. LLDCs (least-developed countries) C. LDCs (less-developed countries) D. NICs (newly industrialized countries) E. RGCs (rapid-growth countries)
38. (p. 247) Considering the United Nations' stages of economic development presented in the text for classifying countries with respect to levels of industrialization, if a country is an industrialized country with high per capita income, the country is in which of the following groups? A. PDCs (parallel-developed countries) B. LLDCs (least-developed countries) C. MDCs (more-developed countries) D. NICs (newly industrialized countries) E. RGCs (rapid-growth countries)
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39. (p. 247) Considering the United Nations' stages of economic development presented in the text for classifying countries with respect to levels of industrialization, if a country is an industrially developing country just entering world trade with relatively low per capita income, the country is in which of the following groups? A. PDCs (parallel-developed countries) B. LLDCs (least-developed countries) C. LDCs (less-developed countries) D. NICs (newly industrialized countries) E. MDCs (more-developed countries)
Difficulty: Moderate Type: Comprehension
40. (p. 248 & Exhibit 9.1) Countries that are experiencing rapid economic expansion and industrialization and do not exactly fit as LDCs or MDCs are typically referred to as: A. LLDCs (least-developed countries) B. KDCs (kinetically-developing countries) C. PDCs (parallel-developed countries) D. NICs (newly industrialized countries) E. RGCs (rapid-growth countries)
41. (p. 247) Most newly industrialized countries (NICs) have moved away from restrictive trade practices and instituted significant free market reforms. As a result these countries have: A. attracted both trade and foreign direct investment. B. overcome environmental damages caused by lack of development. C. reduced population pressures through labor outsourcing. D. joined the United Nations' economic development referral council. E. taken measures to protect their cultures and traditions.
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42. (p. 247) Which of the following countries would carry the label MDC (more-developed countries)? A. Canada B. England C. France D. Germany E. all of the above
Difficulty: Easy Type: Application
43. (p. 247) Countries classified LLDC (least-developed countries) would be industrially underdeveloped, agrarian, subsistence societies with rural populations, extremely low per capita income levels, and would have _____________ world trade involvement. A. only petroleum products B. significant C. little D. substantial E. service-oriented
44. (p. 247) According to information presented in the text, Chile, Brazil, Mexico, and South Korea don't exactly fit as MDCs (more-developed countries) or LDCs (less-developed countries). A new category applies to these countries. Which of the following would be most appropriate? A. LLDCs (least-developed countries) B. KDCs (kinetically-developing countries) C. PDCs (parallel-developed countries) D. NICs (newly industrialized countries) E. RGCs (rapid-growth countries)
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45. (p. 248) Which of the following countries WOULD NOT be classified as one of the "Four Tigers" of Southeast Asia? A. South Korea B. Taiwan C. the Philippines D. Hong Kong E. Singapore
Difficulty: Moderate Type: Application
46. (p. 250) All of the following factors are cited as being reasons that NICs (newly industrializing countries) have had such remarkable success EXCEPT: A. political stability. B. economic and legal reforms. C. development of mass media advertising. D. outward orientation. E. entrepreneurship.
47. (p. 250) If a NIC (newly industrializing country) had the characteristic of increasing the production for the domestic market and export markets with increases in efficiencies and continual differentiation of exports from competition as its focus, the country would be using which of the following factors as a component for growth? A. economic and legal reforms B. privatization C. an outward orientation D. entrepreneurship E. factors of production
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48. (p. 248-249) These four countries began their industrialization as assemblers of products for U.S. and Japanese companites. A. Argentina, India, Vietnam, and Poland B. Turkey, Brazil, Columbia, and Mexico C. South Africa, China, South Korea, and Hong Kong D. Spain, Kenya, Singapore, and Taiwan E. South Korea, Taiwan, Hong Kong, and Singapore
Difficulty: Moderate Type: Knowledge
49. (p. 250) When countries sell off state-owned enterprises, it usually results in a: A. surge in domestic savings to spend. B. decline in productivity throughout the private sector. C. release of capital to invest elsewhere. D. change in political leadership which often reduces social tension. E. increase in unemployment rate.
50. (p. 251) The Internet accelerated the process of economic growth by speeding up the diffusion of ____________ to emerging economies. A. political propaganda B. cell phones C. PDAs D. new technologies E. simulated consumption
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51. (p. 251) The Internet facilitates ________________, a fundamental underpinning for economic development. A. psychological dialogue B. anthropological change C. social cohesiveness D. political ideas E. education
Difficulty: Hard Type: Comprehension
52. (p. 252) The IT revolution is not limited to broad, long-range economic goals but can have an almost immediate impact on the __________ of an emerging country. A. poorest inhabitants B. export trade C. per capita GNP D. international visibility E. tourism
53. (p. 252) Which of the following would be characterized as being the fundamental objective of most developing countries? A. Entrepreneurship B. Industrialization C. Conservation of resources D. Enabling a strong home land defense force E. Establishing a strong agricultural system
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54. (p. 253) Paved roads, railroads, and energy supplies are illustrations of a country's: A. supply system. B. labor support system. C. infrastructure. D. extrastructure. E. microenvironment.
Difficulty: Moderate Type: Application
55. (p. 253) Countries begin to lose economic development ground when their ___________ cannot support an expanding population and economy. A. source remediation technology B. infrastructure C. cultural arts D. statistical discrepancy accounting E. currency conversion ratio
56. (p. 254) Economic planners are often more ___________ oriented than __________ oriented. A. production; marketing B. private; public C. profit; policy D. system; subject E. logistically; symbolically
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57. (p. 254) According to a case made by the text, economic planners with a national goal of growth should be more concerned with the efficiency of __________ than with the other choices mentioned. A. production B. investment C. finance D. distribution E. advertising
Difficulty: Moderate Type: Application
58. (p. 255) __________ is an economy's arbitrator between productive capacity and consumer demand. A. Management B. Marketing C. Public relations D. Operations procedures E. Economics
59. (p. 256) The level of market development roughly parallels the stages of: A. the product life cycle. B. the adoption curve. C. a production cycle. D. marketing mix application. E. economic development.
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60. (p. 256) Estimating demand potential in less-developed countries involves myriad challenges. Most of the difficulty arises from the __________. A. coexistence of three distinct kinds of markets in each country. B. problems of collecting reliable market data. C. superimposition of sophisticated marketing strategies. D. high currency rate of exchange. E. lack of rural electric power.
Difficulty: Moderate Type: Application
61. (p. 256) Morris Mayer has found it difficult to accurately estimate market potential in Mexico. He has observed that while Mexico has had rapid technological growth and production that can certainly be classified as modern, it also has certain traditional sectors in the rural parts of the country that are at best primitive. This situation is best described as one arising from the __________. A. coexistence of three distinct kinds of markets in each country. B. problems of collecting reliable market data. C. superimposition of sophisticated marketing strategies. D. high currency rate of exchange. E. lack of rural electric powering one of economic.
62. (p. 257, Exhibit 9.3) With respect to the evolution of the marketing process, which of the following stages would be considered to be the most fundamental stage (first stage) of the process? A. marketing B. regionalism C. manufacturing D. agricultural and raw materials E. entrepreneurship
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63. (p. 257, Exhibit 9.3) If a country was primarily dominated by nomadic or hunting tribes, which of the following stages of the marketing process would most likely be used to describe the country? A. marketing B. regionalism C. manufacturing D. agricultural and raw materials E. entrepreneurship
Difficulty: Moderate Type: Application
64. (p. 257, Exhibit 9.3) According to the evolution of the marketing process, mass production first came to the United States during which of the following time periods? A. 1885-1914 B. 1776-1785 C. 1805-1830 D. 1915-1929 E. 1950-present
65. (p. 257, Exhibit 9.3) Which of the following best characterizes the United States today with respect to the evolution of the marketing process? A. mass production B. commercial--transition C. cottage industry D. surplus commodity product E. mass distribution
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66. (p. 257, Exhibit 9.3) With respect to the evolution of the marketing process, the United States is best characterized today as to its primary orientation as being a nation whose focus is on: A. entrepreneurial/commercial. B. entrepreneurial/financial. C. production and finance. D. marketing. E. public relations and advertising.
Difficulty: Hard Type: Application
67. (p. 259) All of the following are categories in Exhibit 9.4, Consumption Patterns in Selected Countries EXCEPT __________. A. Food B. Clothing C. Taxes D. Transportation E. Leisure
68. (p. 258) __________ of many developing countries are simultaneously at many stages. A. Automobile technology B. Marketing structures C. Technical education D. Social structures E. Financial agencies
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69. (p. 260) The companies that invest in developing markets _______________ will benefit in the future. A. when it is difficult and initially unprofitable B. after the process of growth has begun C. where there are many competitors D. at the request of the poorest citizens E. assume high risks and gamble that they
Difficulty: Easy Type: Application
70. (p. 262) In the language of international marketing, BEM stands for: A. business, e-commerce, and marketing. B. business units and economic models. C. big emerging markets. D. bilingual economic microcosms. E. bilateral enhanced marketing.
71. (p. 262) Big emerging markets (BEMs) share a number of important traits. All of the following would be among those traits EXCEPT: A. they principally export labor and raw resources. B. they are all physically large. C. they have significant populations. D. they are "regional economic drivers." E. they are of major political importance within their regions.
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72. (p. 262) If a market is characterized as being physically large, has significant population, is a regional economic driver, and has undertaken significant programs of economic reform, the market is classified as a(n): A. cottage industry market. B. less developed market. C. entrepreneurial market. D. agrarian market. E. big emerging market.
Difficulty: Moderate Type: Application
73. (p. 262) According to the text, which of the following countries may warrant inclusion as a BEM (big emerging country)? A. Poland B. Brazil C. Guatemala D. Mexico E. Venezuela
74. (p. 263) What is happening in BEMs today is analogous to what happened in: A. Saudi Arabia in the 1800s. B. India during the British Empire period. C. Russia after the fall of the czar. D. Europe after World War II. E. no prior happening; it is unique in economic development history.
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75. (p. 264-265) Of the former Soviet bloc nations of Eastern Europe, the Czech Republic seems to be doing the best in reshaping itself in terms of: A. returning to pre-occupation political and market structures. B. offering alternative economic development to Asian partners. C. adapting to realigned Russian economic partnerships. D. adopting a model of privatization, free market system and capitalism E. the transition from capitalism to socialism.
Difficulty: Moderate Type: Application
76. (p. 265) The former Soviet-controlled Eastern European countries that did not move to market economies: A. permitted Western experts to run their economies for them. B. have experienced the fastest rates of economic growth in the region. C. substituted domestic capital for foreign investment. D. permitted bureaucrats from communist days to delay and derail reforms. E. adhered to the principles of Soviet-style state-controlled economies.
77. (p. 265) According to the text, of the Baltic States, Estonia has made the most of its split from the former Soviet Union and exceeds its neighbors in production and economic reform because Estonia did all of the following EXCEPT: A. established domestic export controls. B. dropped the ruble as its currency. C. privatized companies and land. D. let struggling banks fail. E. adopted a free trade policy.
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78. (p. 266) The text describes China as having a dual economic system. This refers to China's _______________ and _______________ tenets. A. market-driven; supply-side driven B. egalitarian; unitarian C. socialist; capitalist D. aristocratic; democratic E. internal; external
Difficulty: Easy Type: Application
79. (p. 266) Miles Daniels has heard that if his company is to succeed in Asia it must be willing to trade with one or more of the Four Tigers. All of the following are part of the group of countries known as the Four Tigers EXCEPT: A. Hong Kong. B. South Korea. C. Australia. D. Singapore. E. Taiwan.
80. (p. 267) The rule of governing law that most accurately describes the relationship between Hong Kong and China is: A. "let the buyer beware." B. "he who has the might makes the right." C. "trade will not supersede the people." D. "communist wealth." E. "one country, two systems."
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81. (p. 268) With regards to Taiwan and China, the talks on One China include establishing "three direct links" referring to: A. education, emancipation, and equity B. religion, culture, and marketing C. systems, energy, and advertising D. sports, education, and environmental E. transportation, trade, and communications.
Difficulty: Moderate Type: Application
Fill in the Blank Questions 82. (p. 246) According to the text, a pattern of economic growth and global trade appears to be emerging among three multinational market regions that comprise the major trading blocs of Europe, Asia, and the __________. Americas
83. (p. 247) In a dynamic economy with rapidly changing consumption patterns __________ is constantly faced with the challenge of detecting and providing for new levels of consumption. marketing
84. (p. 247) __________ is generally understood to mean an increase in national production that results in an increase in the average per capita gross domestic product (GDP). Economic development
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85. (p. 247) __________, as commonly defined today, tends to mean rapid economic growth and increases in consumer demand. Economic development
Difficulty: Easy Type: Knowledge
86. (p. 247) Countries like Canada, England, France, and Germany are called MDCs. MDC stands for ______________. more-developed countries
87. (p. 247) Agrarian, industrially underdeveloped, subsistence societies with rural populations are called LLDCs. LLDC stands for ___________. least-developed countries
88. (p. 247-248) Countries like Chile, Brazil, Mexico, and South Korea attract trade and foreign direct investment. These countries are called ________________ or NICs. newly industrialized countries
89. (p. 252) _____________ is the fundamental objective of most developing countries. Industrialization
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90. (p. 252) With respect to economic development in developing countries, economic growth is measured not solely in economic goals but also in __________. social achievement
Difficulty: Hard Type: Comprehension
91. (p. 253) _____________ represents those types of capital goods that serve the activities of many industries. Infrastructure
92. (p. 254) Economic planners are frequently more _____________ than marketing oriented. production oriented
93. (p. 255) ___________ is an economy's arbitrator between productive capacity and consumer demand. Marketing
94. (p. 257, Exhibit 9.3) With respect to the evolution of the marketing process, the United States economy is currently in a substage of the marketing stage called __________ distribution. mass
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95. (p. 270) Behind China, __________ is the most populated country in the world. India
Difficulty: Moderate Type: Application
96. (p. 262) According to the text, this Middle East nation has been identified as a BEM (big emerging market) and that nation is ____________. Egypt
97. (p. 265) ___________ has been the fastest-growing economic area of the world for the past three decades. Asia
98. (p. 266) The Four Tigers consist of ____________, ______________, ____________, and _________. Hong Kong; Singapore; South Korea; Taiwan
99. (p. 270) The United States' decision to lift the embargo against ___________ has resulted in the rapid expansion of this economy. The country has now been designated as a BEM (big emerging market) by the U.S. Department of Commerce. Vietnam
Essay Questions
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100. (p. 247) According to the text, economic development presents a two-sided challenge. What is that challenge? First, a study of the general aspects of economic development is necessary to gain empathy regarding the economic climate within developing countries. Second, the state of economic development must be studied with respect to market potential, including the present economic level and the economy's growth potential.
101. (p. 247) What does the term economic development mean? Economic development is generally understood to mean an increase in national production that results in an increase in the average per capita gross domestic product (GDP).
102. (p. 260-261) Briefly describe and explain the concept of Bottom-of-the-Pyramid Markets (BOPMs). C. K. Prahalad and his associates introduced a new concept into the discussion of developing countries and markets -- bottom-of-the-pyramid markets (BOPMs) -- consisting of the 4 billion people across the globe with annual incomes of less than $1,200. These markets are not necessarily defined by national borders but rather by the pockets of poverty across countries. Prahalad's basic point is that these consumers have been relatively ignored by international marketers because of misconceptions about their lack of resources (both money and technology) and the lack of appropriateness of products and services usually developed for more affluent consumers.
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103. (p. 247-249) Characterize the scheme that characterizes countries as being MDCs, LDCs, or LLDCs. Explain each abbreviation and give an example of a country that might fit in the category. MDCs (more-developed countries) are industrialized countries with high per capita incomes, such as Canada or the United States. LDCs (less-developed countries) are industrially developing countries just entering world trade, have relatively low per capita incomes, and are characterized by many Asian and Latin American countries. LLDCs (least-developed countries) are industrially underdeveloped, agrarian, subsistence societies with rural populations, extremely low per capita income levels, and little world trade. Most are found in Central Asia and parts of Asia.
104. (p. 253-254) Describe and characterize the term infrastructure. Why is it important to world trade? One indicator of economic development is the extent of social overhead capital, or infrastructure, within the economy. Infrastructure represents those types of capital goods that serve the activities of many industries. Examples would include roads, railroads, seaports, et cetera. For more information see pages 253-254.
105. (p. 258-259) Explain the coexistence of three distinct markets in developing countries. Estimating market potential in less developed countries involves additional challenges. Most of the difficulty arises from the coexistence of three distinct kinds markets in each country: (1) the traditional rural/agricultural sector, (2) the modern urban/high-income sector, and (3) the often very large transitional sector usually represented by low-income urban slums. The modern sector is centered in the capital city and has jet airports, international hotels, new factories, and an expanding Westernized middle class. The traditional rural sector tends to work in the countryside, as it has for centuries. Directly juxtaposed to the modern sector, the transitional sector contains those moving from the country to the large cities.
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106. (p. 262-263) BEMs (big emerging markets) share a number of important traits. List and briefly comment on four of those common traits. The traits are: (a) are all physically large, (b) have significant populations, (c) represent considerable markets for a wide range of products, (d) have strong rates of growth or the potential for significant growth, (e) have undertaken significant programs of economic reform, (f) are of major political importance within their regions, (g) are "regional economic drivers", and (h) will engender further expansion in neighboring markets as they grow. Additional information can be found on page 262-263.
107. (p. 265-266) Mark Swift is in the process of deciding whether to make a major commitment or not in the Asian market. If Mark decides to expand into this market it will commit his company for at least ten years. Write a one to two paragraph summary of why Mark should expand into Asia. You may cite product or industry successes to support your contention. Students are free to construct their own paragraphs. There is ample information found on pages 265-266 to support the expansion case. Asia has been the fastest-growing area (even with the financial downturn experienced in the 90s) in for the past three decades. Students might also describe the Four Tigers and their success stories to support their case. If you would like to add additional parameters, please do so.
108. (p. 270-271) Assume the role of an American businessman or woman who is considering moving a business venture to Vietnam or South Africa. Discuss why or why not this might be wise move. Students are free to create in this question, however, the text supplies ample evidence that both Vietnam and South Africa are going to be huge markets in the future. The U.S. Department of Commerce recently designated both markets to be BEMs with respect to U.S. trade. See information in the text on pages 270-271 and facts in Exhibit 9.13 for further information to support such a case.
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