Global Marketing Management, 8e (Keegan)

Chapter 1 Introduction to Global Marketing

1) One difference between domestic marketing and global marketing is the scope of activities.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy

2) Marketing discipline varies from one region to another.

Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

3) Marketers can always directly apply experience from one country to another or from one
market to another.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

4) The old marketing concept focused on a customer-centric marketing approach.

Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

5) The strategic concept of marketing focuses on customer satisfaction in a socially responsible

and sustainable way.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy

6) A company's competitive advantage exists only in its price differentiation strategies.

Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

7) A company engaging in global marketing must standardize all elements of the marketing mix
everywhere in the world.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

8) Global marketing requires marketers to behave in a way that is global and local at the same
time by responding to similarities and differences in world markets.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy

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9) Market capitalization is defined as a company's total revenues in a given accounting period.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

10) Ethnocentric companies are sometimes referred to as global companies.

Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

11) Ethnocentric companies cater to the different needs of different world regions.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

12) A polycentric company views foreign operations as being secondary or subordinate to

domestic operations.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

13) Global companies view world regions as unique and seek to develop an integrated regional
strategy.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy

14) A regiocentric manager views the world outside his area of interest with an ethnocentric
orientation.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Moderate

15) Geocentric companies are integrated on a global scale.

Answer: TRUE
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Difficulty: Easy

16) Geocentric companies are based on a belief of home-country superiority.

Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

17) A polycentric orientation is diametrically different from an ethnocentric orientation.

Answer: TRUE
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Difficulty: Easy

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18) Management vision is a driving force for global integration.
Answer: TRUE
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Difficulty: Easy

19) Cost is a restraining force affecting globalization.

Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy

20) Multinational companies adhere to the notion that the products that succeed in the home
country are superior and, therefore, can be sold everywhere without adaptation.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

21) Trade agreements such as the European Union and NAFTA have decreased the pace of
global integration.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

22) Most global markets do not exist in nature; they are created by marketing effort.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy

23) The time and cost barriers associated with distance have increased over the past decade.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Easy

24) A domestic company will have many times the revenue of a global company as it focuses
only on local regions.
Answer: FALSE
AACSB: Analytical thinking
Difficulty: Moderate

25) A global company can leverage its experiences in any market in the world.
Answer: TRUE
AACSB: Analytical thinking
Difficulty: Easy

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26) Countries protect local enterprise and interests by maintaining control over market access
and entry.
Answer: TRUE
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Difficulty: Easy

27) Government regulations on advertising and promotion are similar across all world countries.
Answer: FALSE
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Difficulty: Easy

28) Which of the following is a focus of the new concept of marketing?

A) Mmaking a profit is the only end result of selling products.
B) emphasizing the product rather than the end consumer
C) achieving objectives by pushing products toward consumers
D) using integrated marketing mix to achieve profits
Answer: D
AACSB: Analytical thinking
Difficulty: Easy

29) Which of the following is a marketing mix element?

A) profit
B) promotion
C) potential
D) package
Answer: B
Difficulty: Easy

30) Which of the following statements is true about the strategic concept of marketing?
A) Its objective is to maximize stakeholder benefits.
B) It has a product-centric marketing focus.
C) It emphasizes marketing from a company-centric paradigm.
D) Its focus is only on consumers and not their societies.
Answer: A
AACSB: Analytical thinking
Difficulty: Moderate

31) Which of the following statements is true about global marketing?

A) Marketing practices must vary between different market segments.
B) Customers and markets across regions are considered similar.
C) Transferring irrelevant experience between markets may be beneficial.
D) Marketing initiatives cannot include more than one marketing mix element.
Answer: A
AACSB: Analytical thinking
Difficulty: Easy

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32) Which of the following statements best describes the phrase "global localization" in a
nutshell?
A) A global product must be the same product everywhere without modifications in the
marketing mix.
B) A global marketer must push local markets to accept global products.
C) A global marketer must adapt product marketing mix to the similarities and differences in the
world market.
D) A global product must be a different product everywhere across the world regions.
Answer: C
AACSB: Analytical thinking
Difficulty: Easy

33) A company that sees only the similarities between the domestic and the world market is said
to have a(n) ________ orientation.
A) regiocentric
B) ethnocentric
C) concentric
D) polycentric
Answer: B
Difficulty: Easy

34) Levy Inc., a U.S.-based smartphone manufacturer, extends its line of high-end smartphones
to the Asian market to capitalize on the high demands for smartphones. Owing to its huge
success in the United States, Levy uses the same set of marketing mix in the Asian markets. In
this case, the company's management orientation is referred to as ________.
A) regiocentric
B) polycentric
C) concentric
D) ethnocentric
Answer: D
AACSB: Analytical thinking
Difficulty: Hard

35) In a(n) ________ international company, foreign operations are viewed as being secondary
or subordinate to domestic operations.
A) ethnocentric
B) concentric
C) polycentric
D) regiocentric
Answer: A
Difficulty: Easy

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36) Which of the following management orientations views only the differences in the world
regions?
A) ethnocentric
B) regiocentric
C) polycentric
D) concentric
Answer: C
Difficulty: Easy

37) Which of the following statements is true of a polycentric company?

A) Its orientation is based on a belief in home-country superiority.
B) Its marketing management is decentralized.
C) It's generally referred to as a domestic company.
D) It views foreign operations as being secondary to domestic operations.
Answer: B
AACSB: Analytical thinking
Difficulty: Easy

38) A(n) ________ company typically has a regiocentric or geocentric management orientation.
A) multinational
B) transnational
C) domestic
D) international
Answer: B
Difficulty: Easy

39) Which of the following management orientations provides a worldview and sees the
similarities and differences in home and host countries?
A) ethnocentric
B) polycentric
C) concentric
D) geocentric
Answer: D
Difficulty: Easy

40) Latour Boutiques, which is based in Europe, views each section within the European Union
as a unique market and develops an integrated marketing strategy to sell its products. Due to its
success in the European territory, Latour exports its products to other world markets sans any
modifications. In this case, Latour's management orientation is typically ________.
A) concentric
B) polycentric
C) regiocentric
D) geocentric
Answer: C
AACSB: Analytical thinking
Difficulty: Hard

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41) Which of the following companies is centralized in its market management strategies?
A) ethnocentric
B) polycentric
C) regiocentric
D) geocentric
Answer: A
Difficulty: Easy

42) Which of the following companies typically has a polycentric management orientation?
A) transnational
B) international
C) domestic
D) multinational
Answer: D
Difficulty: Easy

43) Which of the following orientations is based only on home-country superiority?

A) ethnocentric
B) polycentric
C) geocentric
D) regiocentric
Answer: A
Difficulty: Easy

44) Which of the following is a driving force for global integration?

A) domestic focus
B) market needs
C) market differences
D) national controls
Answer: B
AACSB: Analytical thinking
Difficulty: Easy

45) Which of the following is a restraining force behind global integration?

A) market needs
B) management vision
C) strategic intent
D) national controls
Answer: D
AACSB: Analytical thinking
Difficulty: Easy

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46) A(n) ________ corporation tries to link world resources to world market opportunities.
A) ethnocentric
B) geocentric
C) polycentric
D) concentric
Answer: B
Difficulty: Easy

47) Which of the following factors restrains ethnocentric companies from pursuing opportunities
in the global market?
A) experience transfer
B) scale economies
C) global strategy
D) management myopia
Answer: D
AACSB: Analytical thinking
Difficulty: Moderate

48) What are the new concept of marketing and the Four Ps?
Answer: The new concept of marketing, which appeared about 1960, shifted the focus of
marketing from the product to the customer. The objective was still profit, but the means of
achieving the objective expanded to include the entire marketing mix, or the Four Ps as they
became known: product, price, place (channels of distribution), and promotion.
AACSB: Analytical thinking
Difficulty: Easy

49) What is the value equation? Identify its various components and explain how the equation
relates to a company's pursuit of competitive advantage.
Answer: The task of marketing is to create customer value that is greater than the value created
by competitors. According to the value equation, value for the customer can be increased by
expanding or improving product and/or service benefits, by reducing the price, or by a
combination of these elements. Companies with a cost advantage can use this advantage to gain a
sustainable competitive edge in any of the marketing mix elements: product, price, promotion, or
place. Knowledge of the customer combined with innovation and creativity can lead to a total
offering that offers superior customer value. If the benefits are strong enough and valued enough
by customers, a company does not need to be the low-price competitor to win customers. On the
other hand, the value equation may lead to a focus on price as the key element of competitive
advantage.
AACSB: Analytical thinking
Difficulty: Moderate

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50) What are the differences between regiocentric and geocentric management orientation?
Answer: In a company with a regiocentric orientation, management views regions as unique and
seeks to develop an integrated regional strategy. A company with a geocentric orientation views
the entire world as a potential market and strives to develop integrated world market strategies.
The geocentric orientation represents a synthesis of ethnocentrism and polycentrism; it is a
worldview that sees similarities and differences in markets and countries and seeks to create a
global strategy that is fully responsive to local needs and wants. A regiocentric manager might be
said to have a worldview on a regional scale; the world outside the region of interest will be
viewed with an ethnocentric or a polycentric orientation, or a combination of the two.
AACSB: Analytical thinking
Difficulty: Moderate

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