Question 121. KFC’s establishment of international production/processing facilities is an example of a) direct ownership.

121. KFC’s establishment of international production/processing facilities is an example of
a) direct ownership.
b) franchising.
c) strategic alliance.
d) outsourcing.
e) a trading company.
122. The practice of offering fried octopus and squid at Asian KFC’s is best described as
a) a strategy of standardization.
b) a strategy of globalization.
c) a strategy of some customization.
d) competitive advantage.
e) internationalizing the franchise.
123. Suppose that KFC’s parent company experienced difficulty in opening its restaurants in China
unless KFC was willing to pay the government a “bribe”. If KFC were to resort to paying this bribe in
China saying that “it’s different doing business there” — this would be an example of
a) a licensing arrangement.
b) the self-reference criterion.
c) cultural relativism.
d) balance of trade issues.
e) exchange controls.
124. Which of the following alliances will KFC most likely utilize to guide its business transactions
in Japan and China?
a) WTO
b) MERCOSUR
c) FTAA
d) NAFTA
e) APEC
125. T F International marketing is defined as marketing activities performed across national
boundaries.
126. T F Two-thirds of the world’s total purchasing power is outside the United States.
127. T F Customers that travel the globe expect to be able to buy the same product in most of
the world’s more than 200 countries.
128. T F An embargo occurs when a government suspends trade with a particular country.
129. T F A quota is the suspension, by a government, of trade in a particular product.
130. T F Government restrictions on the amount of a particular currency that can be bought or
sold are known as import controls.
131. T F A positive balance of trade is considered good because it means that U.S. dollars are
supporting foreign economies at the expense of U.S. companies and workers.
132. T F In determining the size of the market for consumer products, the international
marketer will probably be very interested in per capita GDP figures.
133. T F Opportunities for international marketers are limited to industrial nations with the
highest incomes.

134. T F U.S. marketers may engage in bribery to compete with foreign firms.
135. T F The study of the cultural environment is unnecessary in the foreign market because
foreign consumers will accept anything that American marketers have to sell.
136. T F Customs and taboos are culture-bound and should be taken into consideration when
products are marketed in a foreign environment.
137. T F Cultural differences do not affect marketing negotiations and decision-making
behavior.
138. T F When products are introduced from one nation into another, acceptance is more
likely if the two cultures are different.
139. T F Cultural relativism is the unconscious reference to one’s own cultural values,
experiences, and knowledge when traveling in other countries.
140. T F NAFTA eventually eliminates all tariffs on goods produced and traded between the
United States, Mexico, and Brazil.
141. T F NAFTA simplifies country-of-origin rules, hindering Japan’s use of Mexico as a staging
ground for further penetration into U.S. markets.
142. T F While NAFTA eliminates many tariffs immediately, the tariffs on more sensitive
goods, such as glassware, footwear, and some fruits and vegetables, will be phased out over a 15-
year period.
143. T F The passage of NAFTA was agreeable to all parties.

144. T F The unification of Europe permits virtually free trade among the member nations of
the European Union.
145. T F Because of continuing disputes and inconsistencies among the administrations of
member states, it will be many years before the European Union truly becomes one deregulated
market.
146. T F The U.S. and Japanese economies are more integrated than are the U.S. and Canadian
economies.
147. T F GATT is based on negotiations between member countries to reduce worldwide
tariffs and increase international trade.
148. T F The World Trade Organization was an important outcome of the unification of Europe.
149. T F Domestic marketing involves marketing strategies aimed at markets within the home
country.
150. T F Importing is the sale of products to foreign markets.

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