Marketing Final Exam

Franchising is a form of a b c d e obj 05 4 top aacsb

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Unformatted text preview: fee or royalty. a. A joint venture b. Divestment c. Licensing d. A principal-agent agreement e. A contract manufacturing arrangement ANS: C The is the definition of licensing. PTS: 1 REF: 67 Thinking KEY: CB&E Model Strategy 67. Franchising is a form of: a. b. c. d. e. OBJ: 05-4 TOP: AACSB Reflective MSC: BLOOMS Knowledge contract marketing international exporting licensing direct exporting countertrading ANS: C Franchising is a form of licensing that has grown rapidly in recent years. PTS: 1 REF: 67 Thinking KEY: CB&E Model Strategy OBJ: 05-4 TOP: AACSB Reflective MSC: BLOOMS Comprehension 68. When Krispy Kreme decided to expand its operation internationally, it chose to first make its doughnuts available in Canada to minimize its risk. In accordance with the policy of risk minimization, the company sold the right to manufacture and sell its doughnuts to Canadians. In other words, Krispy Kreme used: a. contract manufacturing b. direct investment c. importing d. a strategic alliance e. licensing ANS: E Krispy Kreme used franchising, which is a form of licensing. Franchising offers only slightly more risk than exporting. PTS: 1 REF: 67 OBJ: 05-4 TOP: AACSB Reflective Thinking KEY: CB&E Model International Perspective | CB&E Model Strategy MSC: BLOOMS Application 69. A U.S. licensor can try to prevent a licensee from voiding its contract and using what it has learned to create a competitor by: a. using lawyers from both countries to write the licensing agreement b. insisting that all licensees have a published code of ethics c. having the licensee pay a fee for the use of the manufacturing process, trademark, patent, or other proprietary knowledge d. locally registering patents and trademarks to the U.S. firm, not to the licensee e. avoiding the use of any patents and trademarks ANS: D Even with lawyers writing it and a code of ethics, there is nothing to prevent a licensee from voiding the contract. Licensees typically pay a fee or a royalty to the licensor. Without patents and trademarks, protection becomes almost impossible. PTS: 1 REF: 67 OBJ: 05-4 Thinking KEY: CB&E Model International Perspective Comprehension TOP: AACSB Reflective MSC: BLOOMS 70. Disney sells the rights for an investment company to run a Disneyland theme park in Tokyo. The investment company gains most of the profits from the enterprise while paying Disney a percentage in royalties. This is an example of: a. a joint venture b. exporting c. direct investment d. licensing e. capital-intensive manufacturing ANS: D This kind of arrangement is licensing because Disney is only selling the right to run the park. If the investment company does a poor job, Disney can seek out another to replace it. PTS: 1 REF: 67 OBJ: 05-4 TOP: AACSB Reflective Thinking KEY: CB&E Model International Perspective | CB&E Model Strategy MSC: BLOOMS Application 71. Patch Products is an Australian company that has given permission to several Latin American companies to manufacture and market its patente...
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This document was uploaded on 09/29/2013.

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