BMKT Final Exam Set
The service sector internationally represents about ___ percent of world trade.
20
Estimates place the number of computers with software not properly licensed is:
43 percent
What is the primary barrier to using a standardized promotion message in a global marketing campaign?
Although consumer needs may be similar between countries, the way in which those needs are met does vary.
Exchange rate calculation for which 3 years worth of data is used is referred to as
Atlas method.
What is the basis for the trade dispute between Airbus and Boeing?
Both sides argue each of the airplane manufacturers receive government subsidies which each believe are illegal under W.T.O. law.
As international marketers develop their marketing communications, they must be aware of which international business environmental issues and constraints?
Cultural differences, governmental controls, economic differences, and agency availability.
What is the primary challenge in taking a firm's domestic supply chain management into foreign markets?
Dealing with the significant differences in the global business environment including cultural, political, legal, and financial.
What is best practice in using either global or local agencies when a firm is entering foreign markets?
Due to local constraints and market differences, companies may still need to use a local agency while otherwise striving toward a single global agency.
Which of the following factors would most likely lead a firm to standardize its products for international markets?
Economies of scale in production.
Which of the following situations would likely have more political risk than the others?
Entry into a market in which the home and the host countries do not have good relations.
A company can often minimize tariffs by shipping an assembled product rather than paying tariffs on all the unassembled parts.
False
A firm's supply chain is the sum of all activities related to procuring materials from global sources.
False
A product near the end of its life cycle in the domestic market will likely also mean it would have low demand in foreign markets.
False
A single worldwide entity helps firms protect their intellectual property across borders.
False
Companies need to understand the global economic environment primarily in order to ensure their products meet consumer quality needs.
False
Contract manufacturing requires more foreign involvement than wholly owned overseas manufacturing.
False
Firms with strong domestic success can generally translate that success into international markets, and increasingly with few major changes to its marketing.
False
Freight forwarders is essentially another name for 3PL providers.
False
Generally, the less direct the foreign market entry method, the fewer the control problems.
False
In most cases, a country's GDP will be larger than its GNI.
False
Increased economic integration between countries leads to lower risks for companies.
False
Licensing agreements permit a company to have greater control over production and marketing decisions than joint venture agreements.
False
National sovereignty involves how much control a firm has in foreign markets.
False
Product adaptation is often more necessary in urban rather than rural markets.
False
Selling to international retail organizations that have buying offices in the manufacturing firm's home country is an example of direct exporting.
False
Studies have found that the most significant impact subsidiaries had in advertising strategies was in the choice of advertising message.
False
Tariffs affect pricing, but do not have an impact on distribution strategies.
False
The World Trade Organization has jurisdiction over international marketing disputes between companies.
False
The convergence of tastes around the world tends to favor a product adaptation strategy.
False
The most important decision criterion influencing media selection is cost of the medium to be used.
False
The top markets indicated by the market analysis should be the primary markets for global expansion.
False
The use of an export management company will not spare the manufacturer of the burden and cost of developing in-house expertise in exporting.
False
There are five phases to the product life cycle theory of international trade.
False
Vending retailers are essentially any type of firms selling products to end consumers including brick-and-mortar and online.
False
When a firm wants to determine the role of advertising abroad, the easiest way is to look at the country's level of economic development.
False
Generally, should a firm's distribution strategy in foreign markets be standardized or adapted?
Firms generally favor a standardized strategy but must frequently adapt that strategy due to market and industry differences.
Compare the challenge of product standardization for industrial products versus consumer products.
Industrial products generally require less adaptation than consumer products.
What is one of the benefits of the Madrid protocol in regard to protecting a firm's intellectual property?
It allows the extension of a firm's trademark into other member countries without the use of a lawyer in the foreign country.
What are important arguments against the use of product-line extensions for a firm's NPD strategy?
It can crowd out genuine new product ideas, poentially recudes brand loyalty and it cannibalizes demand from other items in the product line.
Assume a U.S. airline is considering a joint venture with a foreign airline but will not have any financial ownership. Will this venture require U.S. government approval?
It likely would require U.S. government approval.
What is an important benefit of decentralized product development for a global firm?
It more likely incorporates local market needs, which, for consumer products can be particularly important.
What are key benefits to using a stage-gate model to manage NPD?
It offers a formal process to control the number of products in development and nicely balances technological, financial, and marketing issues.
What is the primary benefit in using sensory segmentation for NPD?
It reduces the number of different products needed.
Assume a luxury car manufacturer wants to identify foreign markets where high-income consumers are highly segmented apart from low-income consumers. How would they use the Gini index?
It would identify markets with a high Gini index.
Assume a firm is seeking to enter a foreign market and wants to work with a foreign partner, including having equity in the foreign company. It would likely be seeking which of the following?
Joint venture
What conditions would support a firm's personal selling budget that is at a higher percent of the overall promotion budget in one country as contrasted with another?
Key factors include government restrictions on media, media availability, and the cost of a sales force.
A manufacturer of medical testing equipment for hospitals is developing its foreign market selection matrix. Which of the following is a suitable indicator for the matrix?
Level of imports of medical equipment.
Contrast local R&D versus global R&D for a firm as it grows internationally.
Local R&D can limit a firm's overall competitiveness whereas global R&D provides enhanced competitiveness.
Refer to the decision by ABC Steel Products to select France as the company's first official market. What is the primary disadvantage to such a foreign market selection process?
Loss of first-mover advantage.
What are important arguments in favor of product-line extensions for a firm's NPD strategy?
Lower costs and the ability to satisfy narrow customer segments.
Assume Pizza Hut considers its brand and logo to be a critical asset as it expands internationally. Which of the following agreements is of most importance as it selects foreign markets?
Madrid Agreement
Which of the following can be an important technique to support effective international public relations?
Maintain a high degree of autonomy in decision making of foreign operations.
What are important factors when a firm is considering entering a foreign market through the use of FDI?
Management expertise and relative risk in the foreign market.
When a firm is entering a foreign market, what is the primary benefit of using private brands?
Market penetration can be faster and at a lower overall cost.
Which country in Africa is expected to be in the top ten for internet users and mobile phone sales by 2018?
Nigeria
Why is researching non-tariff barriers important before a firm enters a foreign market?
Non-tariff barriers can impact product design requirements.
If a company is seeking a way to identify countries with a strong commitment to a market-led economy, which of the following organizations would likely be the most relevant?
OECD
A small U.S. company has received an inquiry from a potential buyer in Cuba. To determine whether the U.S. company can sell its products to Cuba, which agency would the company consult?
Office of Foreign Assets Controls
A company that makes snack foods is planning to use national income as an indicator for its foreign market selection matrix. Which of the following exchange rate methods do you recommend as the basis for converting national income to a common currency?
PPP method.
What are some important considerations regarding the international supply chain and packaging?
Packaging often has to be adapted for international transportation needs or local consumer needs.
If a firm is not familiar with a foreign market and is seeking the easiest method to set an advertising budget, which method is recommended?
Percentage-of-sales approach
Assume Pizza Hut is considering extending its franchise stores into a country that already has a strong local pizza chain. Can it be successful
Perhaps. Even with a strong local competitor, research shows foreign franchises have strong international opportunities.
Assume a company is planning to make a major financial investment to build a manufacturing facility in a foreign country. Which of the following risks is particularly important to research in the foreign country?
Political risk
Contrast the need for product adaptation in urban markets versus semi-urban markets.
Products from developed countries generally require less adaptation for foreign urban markets than foreign semi-urban markets.
A firm's ability to control its promotional message is most constrained with which of the following?
Public relations
Which of the following offers the benefit of appearing the most trustworthy and impartial?
Public relations
Assume ABC Steel Products is a small manufacturer of unique office products and is seeking to expand internationally. It has already made some initial export sales through its website but otherwise has limited international experience. A distributor in France, Lyon Distribution, contacts ABC Steel Products suggesting the company consider using Lyon Distribution as its distributor for France. ABC Steel Products is excited because this will be its first official international distributor. Within a matter of a few weeks, a contract is signed, and Lyon Distribution is now the exclusive importer of ABC Steel Products. The type of foreign market selection process used by ABC Steel Products is best classified as
Reactive market selection.
What are examples of best practice in support of building a global brand?
Sharing input from local markets, using a global planning process, and assigning specific responsibilities within the firm.
Assume a company is considering establishing a new manufacturing facility in a country that is a member of a common market with five other nearby countries. What is a key benefit in selecting that country versus another country not a member?
Significant government regulations will be harmonized across all six countries, and labor among the six countries would likely move freely.
Assume a firm is seeking to enter a foreign market and wants to partner with a foreign company but not make an investment in the foreign company. It would likely be seeking which of the following?
Strategic alliance
What are examples of best practice in using branded products against private brands?
Stressing to retailers the higher profits through branded products, and combining brand marketing with complementary sales promotions.
What is a key concern when using export management companies?
There is a lack of market control and feedback.
When a firm is entering a foreign market, what is the concern with using private brands?
There is no control over pricing and little market feedback.
To what extent are product selection and foreign market entry mode related?
They are highly inter-related in that choice of entry mode will likely have an impact on product selection options.
What is the role of social media for a firm as it expands internationally?
To both promote its brand and company, and protect its image.
Why would firms use 3PL companies as they grow internationally?
To outsource specific functions of its supply chain.
What is best practice in platform selection when developing a global social media strategy?
To use a mix of platforms including global and local platforms.
An indirect exporter has limited control over how its product is sold or serviced in the foreign market.
True
As a firm expands internationally the marketing tasks of the promotion mix needs to be addressed to match the international business environment.
True
Common law is English in origin and is found in the U.S. and other countries with a strong English influence.
True
Converting the qualitative data in a market screening process involves transforming the data to a quantitative scale that can be more easily compared.
True
Generally, the smaller the firm's visibility in a country, the less the political risk.
True
Host country national interests give a clue to the political situation a firm will face.
True
International media selection is complicated by the differences in media availability between countries.
True
Marketing is defined as the collection of activities undertaken by a firm in order to assess and satisfy customer needs, wants, and desires.
True
Mercosur is an example of a common market.
True
One goal of UNCTAD is to promote the economic development of emerging nations.
True
One way to reduce legal uncertainty is to include a choice of law clause in contracts.
True
Private branding provides a quick and relatively low-cost approach to penetrating foreign markets.
True
Product innovation is important to the first phase of the product life cycle theory.
True
Product quality standards and government requirements in different markets have an impact on whether a product should be adapted in foreign markets.
True
Sensory segmentation divides customers according to their responses to sensory product characteristics.
True
The Internet and social networks are increasingly important to a firm's internationalization.
True
The rationing of foreign currencies is referred to as exchange controls.
True
Weighting indicator data in the market screening process is based on the level of importance the decision criteria means to the company or the data accuracy.
True
Wholly-owned foreign operations offer the greatest product-line flexibility, whereas exporting offers the least product-line flexibility.
True
Which of the following agencies maintains the Automated Export System (AES)?
U.S. Customs and Border Protection
What would be a suitable resource to help determine product labeling requirements in a foreign market?
USDOC Country Commercial Guides
What is brand extension in the context of the international market?
Using the same brand for new products in a foreign market, or adding the brand name to related products.
If a firm has a dispute involving national trading practices, it is best if the firm petitions its government to put forward a complaint to the
WTO.
In which of the following situations would a firm likely sell standardized products?
When its foreign market entry mode is principally through direct exporting.
Which of the following lists a fundamental decision in global sourcing?
Whether to procure from the home market or another country for home market production.
Assume a company has a technology to help countries develop their high-speed Internet infrastructure. To increase the company's sales, which of the following would most likely offer loans to a country?
World Bank
A tariff that is calculated on the basis of a product's value is referred to as a(n)
ad valorem duty.
A firm's international marketing manager would want to stay informed of WTO or IMF actions within a foreign country primarily because those actions
affect the stability or trade practices of the foreign country.
International opportunities for small companies
are significant even against larger competitors.
Products that are most likely to be adapted tend to
be purchased based on strong cultural preferences.
A nation's international solvency can be evaluated by checking its __________ over several years.
capital account
Which of the following would be used to determine the country where a dispute would be litigated or arbitrated?
choice of forum clause
International law is best described as the
collection of international treaties, conventions, and agreements that have, more or less, the force of law.
A term used to refer to government regulation and activity bearing on foreign trade is
commercial policy.
As the costs of developing new products rise and diverse technologies are needed, international companies may utilize product development partners. This is referred to as the
consortium approach
As the costs of developing new products rise and diverse technologies are needed, international companies may utilize product development partners. This is referred to as the
consortium approach.
One major difference between the distribution for industrial products and consumer products is that
consumer products companies need to account for a potentially large and very diverse retail structure.
Assume a firm is considering expansion into a foreign country that does not have good relations with its home country. This could mean
consumers in the foreign country may resist the firm's products.
Developing warranty and service policies for international markets
continues to be a challenge of offering a standardized policy versus local policy.
Prices of goods differ in different countries because countries producing the goods have different.
costs.
Calculation of exchange rate data on a one-year official rate is referred to as
current U.S. method.
3PL providers help firms balance warehousing issues in relation to
customer needs and costs.
If, in a foreign market versus a firm's home market, consumer needs are _____, conditions of use are _____, and ability of consumers to buy ____, then an appropriate product-line strategy is product extension and communications adaptation.
different, the same, exists
Which of the following products best fits within "Phase 1" of the product life cycle?
drones
In order for a company from the United States to ship products covered by U.S. export controls, it must obtain a(n)
export license.
A potential U.S. exporter has determined that its products are included within U.S. export controls. The implication is that
exports may be allowed but U.S. authorization must be received.
When a company is the primary supplier of a new product to gain market share and brand recognition, it is said to have
first-mover advantage.
In general, __________ products are harder to brand globally, while __________ and __________ products can be easier.
food, industrial, luxury
The capital account of the balance of payments includes
foreign investment.
Which of the following lists forms of economic integration from lower levels to increasingly higher levels of integration?
free-trade area, customs union, common market, economic union
Sourcing decisions
have wide-ranging implications, including product, quality, and costs.
A key strategic issue involving managing supply chains is
how does a firm leverage its supply chain for competitive advantage.
If a firm is having low sales in a foreign market due to fragmented wholesaling, a suitable strategy would be to
implement a pull strategy.
As a company develops its foreign market selection matrix, one method to apply a weight to each indicator is according to the indicator's
importance in estimating demand.
Reverse logistics
includes product returns, warranties, and repairs.
The impact of UNCTAD on a company expanding internationally could mean
increased sales opportunities in developing countries.
As the company expands globally, supply chain management
increases in complexity.
The use of private branding is __________ because of __________.
increasing, better quality
A firm with relatively low management commitment to internationalize would most likely export through
indirect exporting.
Effective distribution decisions as a firm grows internationally
involve maximizing the effectiveness of meeting customer needs versus containing costs.
Assume a firm has a new product using the latest technology. In selling its products internationally
it may find success in both developing and emerging economies.
A U.S. manufacturer of electric motors has received the product safety testing certification from Underwriters Laboratories (U/L) in the U.S. This means that
its products also need to meet other product safety standards such as the CE mark if sold in other countries.
For the international marketing manager, not researching the impact of tariff and non-tariff barriers in a foreign market could result in
lack of competitiveness and reduced sales.
The increasing trend toward regional economic integration means that
larger economic entities are replacing more than 200 national markets. Which of the following is a way a subsidiary could contribute to the welfare of its host country? exporting from the country.
The arrangement between two parties in which one party provides the other something of value in exchange for specific performance and payment is
licensing.
Company factors influencing political risk include
localization of operations.
When a firm develops policies regarding warranties and after-sales service, the core issue is to
maintain goal equivalence.
An executive based in Germany working for sports manufacturer Nike is considering changing jobs to Nike's competitor Reebok to be Reebok's European Manager. The executive's knowledge of Nike's product pricing policies in Germany
may be considered as trade secrets under international law, limiting the executive's ability to share that information.
Studies have found the greatest role of subsidiaries in advertising is in
media selection.
A country seeking to protect its national sovereignty might
minimize foreign company involvement in sensitive industries such as power generation.
Companies selling to developing economies are finding _____ as well as _____.
new consumers, new competitors
In looking at the political environment, a firm is primarily concerned about the form of government.
political risk.
The principal basis for international trade is
price differences.
Assume a Mexican firm has a subsidiary in a Latin American country that is experiencing dramatic balance of payments problems. Ultimately, this could have a particularly important impact on
pricing policies, repatriating profits, and currency used for sales quotes.
Assuming that consumers are able to purchase a new product, but conditions of use and customer needs are different from those in most other markets, an appropriate product-line strategy is
product and communication adaptation.
If a manufacturer wishes to gain businesses by involving intermediaries in the promotion process, it utilizes a(n)
push strategy
In developing new products, the feasibility study
results in product definitions and return on investment estimates.
The use of a limited number of outlets for providing consumers with a product is known as
selective distribution.
In today's global business environment
small companies have increased opportunities as contrasted with prior years.
Adam Smith said the wealth of a nation derives from the division of labor and
specialization.
If, as a firm grows internationally it is seeking to develop competitive product platforms to support strong product families, it first must have
strong core competencies.
When developing an international social media strategy, companies
tend to focus most on countries in which they currently operate or have the best potential.
Fundamental elements of the controllable global environment include
the 4 P's of marketing.
Marketing can be defined as
the activities involved in assessing and satisfying customer needs.
If a firm has a global brand
the brand's image may still vary between specific foreign markets.
Assume an exporter is seeking to appoint a distributor in a foreign country and expects the distributor to conduct all sales, marketing, and customer support functions. In this case
the distributor will likely seek market exclusivity.
As a result of economic cooperation and regional trading blocks
there are increased marketing opportunities, but also increased competition.
A country's market barriers may be less of a consideration if
there is limited local production of the product to be imported.
A major strategic reason for establishing a wholly owned foreign venture is
to ensure complete control of the operation and property rights.
The carrier firm in piggybacking exporting is
usually the larger firm and a manufacturer.
