International Marketing Exam 2
(T or F) Islamic law defines a complete system that prescribes specific patterns of social and economic behavior for all individuals.
T
(T or F) Many countries have domestication as a condition for investment
T
(T or F) Nongovernmental organizations can affect the policy decisions made by governments
T
(T or F) Planned domestication can be profitable and operationally expedient for the foreign investor.
T
(T or F) The UN classification has been criticized because it no longer seems relevant in the rapidly industrializing world.
T
(T or F) The form of law found in Germany, France, and Japan is called civil or code law.
T
(T or F) The ideal approach to multicountry marketing research is to have local researchers in each country, with close coordination and networking between the client company and the local research companies.
T
A textile manufacturing company is trying to solve a dispute with one of its raw material suppliers over a breach of contract. After the failure of the initial attempts to solve the dispute in a friendly informal manner, the companies have approached an international commission to appoint an informed party to act as a referee and make a judgment that both parties will honor. Which of the following dispute resolution methods is being used by the companies in the above scenario? A. Litigation B. Arbitration C. Mediation D. Coercion E. Judicial intervention
Arbitration
Ralph Richards has been attempting to solve a problem that his company has with a contract default by the Dutch government. He has tried conciliation but the two parties did not find any common ground on which they could begin a fruitful negotiation for settlement. Which of the following is likely to be the course of action that both the parties will try next? A. Mediation B. Informal settlement C. Arbitration D. Litigation E. Coercion
Arbitration
Which of the following is more likely to be subjected to price control? A. Leather garments B. Mobile phone accessories C. Aspirin and antacids D. Camcorders and lenses E. Ceramic tiles
Aspirin and antacids
(T or F) The level of political stability in a country is the single most important environmental element to which the foreign marketer must adjust the marketing task.
F
(T or F) The marketing research process should begin with the determination of the sources of information to fulfill the research objectives.
F
Which of the following forms of law is derived from English law? A. Code law B. Common law C. Religious law D. Civil law E. Universal law
Common law
Which of the following laws is primarily found in the United States, England, Canada, and other countries once under English influence? A Code law B. Common law C. Religious law D. Civil law E. Universal law
Common law
Jimmy's foods, a popular food company in the United States, is trying to resolve a dispute with a local company in New Zealand that has been operating under the same name in its country. All attempts made by the U.S. company to settle the issue in a friendly manner have failed. The directors want to retain their trade name in New Zealand and have decided to settle the dispute with the local company by appointing a mediator. They also want the sessions to be private because of the fear of creating a poor public image. Which of the following dispute resolution methods is best suited for this situation? A. Conciliation B. Prosecution C. Arbitration D. Coercion E. Litigation
Conciliation
_____ is a nonbinding agreement between parties to resolve disputes by asking a third party to mediate differences. A. Litigation B. Prosecution C. Arbitration D. Conciliation E. Coercion
Conciliation
The seizing of a company's assets without payment is called: A. confiscation. B. expropriation. C. domestication. D. exchange controls. E. local-content laws
Confiscation
With respect to the political risk that can be faced by a company seeking to invest abroad, which of the following is most severe? A. Confiscation B. Expropriation C. Domestication D. Exchange controls E. Local-content laws
Confiscation
Unisys Corporation's international marketing research calls for collecting and assessing various types of information. Which of the following types of information is Unisys Corporation most likely to be interested in if it conducts a general noneconomic review of conditions affecting the division's business? A. Monetary and demographic data B. Cultural, sociological, and political climate C. Overview of market conditions D. Summary of the technological environment E. Competitive situation
Cultural, sociological, and political climate
Unisys Corporation's international marketing research calls for collecting and assessing various types of information. Which of the following types of information is Unisys Corporation most likely to be interested in if it gathers information related to ecology, safety, and leisure time and their potential impacts on the division's business? A. Economic and demographic data B. Cultural, sociological, and political climate C. Overview of market conditions D. Summary of the technological environment E. Competitive situation
Cultural, sociological, and political climate
(T or F) The more developed an economy, the lesser the variety of marketing functions demanded
F
(T or F) The newly industrialized countries have per capita incomes lower than LDCs
F
Bert Wong has decided to pursue a marketing research effort to acquire information before his company makes a strategic relocation move to the West Coast. Which of the following marketing research process steps would be the first step that Bert (and the marketing researchers) should take as he embarks on the research effort? A. Define the research problem and establish research objectives. B. Analyze, interpret, and summarize the results. C. Determine the sources of information to fulfill the research objectives. D. Consider the costs and benefits of the research effort. E. Gather relevant data from secondary or primary sources, or both.
Define the research problem and establish research objectives.
Which of the following is the principle U.S. agency that supports U.S. business abroad? A. State Department of Entrepreneurship B. Better Business Bureau C. Department of Commerce D. Department of Foreign Relations E. Department of Defense
Department of Commerce
(T or F) When dealing with foreign countries, a marketer should refer to "international commercial law" for guidance.
F
The government in Chile recently informed Clint Travis' company that his retail grocery chain in Chile would have to be gradually turned over to the people of Chile by the year 2050 as it is a foreign company in Chile. Additionally, starting next year 50 percent of the board of directors of the Chilean operation of the company must be Chileans. Which of the following political risk actions is Mr. Travis' company facing in Chile? A. Confiscation B. Expropriation C. Domestication D. Patronization E. Socialization
Domestication
_____ occurs when host countries gradually cause the transfer of foreign investment to national control and ownership through a series of government decrees by mandating local ownership and greater national involvement in a company's management. A. Confiscation B. Expropriation C. Domestication D. Democratization E. Socialization
Domestication
(T or F) In the context of international marketing research, the environments within which the research tools are applied are often different in foreign markets.
T
Unisys Corporation's international marketing research calls for collecting and assessing various types of information. Which of the following types of information is Unisys Corporation most likely to be interested in if it gathers information related to profitability for the division's products, inflation, business cycle trends, and the like? A. Economic and demographic data B. Cultural, sociological, and political climate C. Overview of market conditions D. Summary of the technological environment E. Competitive situation
Economic and demographic data
Which of the following is the last step of the market research process? A. Defining the research problem and establish research objectives B. Effectively communicating the results to decision makers C. Analyzing, interpreting, and summarizing the results D. Considering the costs and benefits of the research effort E. Gathering the relevant data from secondary or primary sources, or both
Effectively communicating the results to decision makers
Harry along with his team has undertaken a marketing research study to help his company expand in the eastern European region. Which of the following marketing research process steps is most likely to be the last step in Harry's research effort? A. Defining the research problem and establishing research objectives B. Analyzing, interpreting, and summarizing the results C. Effectively communicating the results to the decision makers D. Considering the costs and benefits of the research effort E. Gathering the relevant data from secondary or primary sources, or both
Effectively communicating the results to the decision makers
Which of the following agencies underwrites trade and investments for U.S. firms? A. Export-Import Bank B. The Federal Trade Commission C. The Agency for International Development D. Social Security Advisory Board E. The Overseas Private Investment Corporation
Export-Import Bank
(T or F) Commercial sources, trade associations, management groups, and state and local governments are good sources of primary data for a researcher
F
(T or F) Considering the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, Brazil falls under the group of more-developed countries (MDCs).
F
(T or F) Data collected specifically for a particular research project at hand is known as secondary data
F
(T or F) Economic growth is measured solely in economic goals
F
(T or F) Economically prosperous countries do not display strong nationalistic feelings
F
(T or F) Expropriation and nationalization have often led to nationalized businesses that were efficient, technologically strong, and competitive in world markets
F
(T or F) High transaction costs associated with the use of the Internet prevents smaller firms in emerging countries from selling into a global market
F
(T or F) In static economies, consumption patterns change rapidly
F
(T or F) It is illegal for U.S. citizens to pay a bribe unless it is a common practice in the host country.
F
(T or F) Mercosur is a free trade group formed by the United States of America
F
(T or F) Moving their businesses outside the political boundaries of the home country exempts the companies from the home-country laws.
F
(T or F) Political and social activists have no impact on the normal flow of trade.
F
(T or F) Risk of violence is not a consideration in assessing the political vulnerability of a multinational company's activities.
F
(T or F) The United States-Canada Free Trade Area (CFTA) was a customs union like the European Community
F
(T or F) The World Court can settle disputes between a company and a government
F
(T or F) The form of law found in the United States and England is classified as civil or code law.
F
The _____ of the United States makes it illegal for companies to pay bribes to foreign officials, candidates, or political parties. A. Taft-Hartley Act B. Informed Consumer Standard C. Foreign Corrupt Practices Act D. Best Practices Act E. International Codes of Law
Foreign Corrupt Practices Act
Mark Bressler is having great difficulties with his company's advertising in Japan. As a representative of Jerry Motors, he believes that it is all right to use American campaigns in the Japanese market. He is surprised to learn that a slogan "Body by Arnold" (the company that makes external structures for Jerry Motors) loosely translated in Japanese means "Corpse by Arnold." Which of the following problems did Mr. Bressler experience with his company's advertising in this scenario? A. Improper syntax B. Improper colloquialisms or slang C. Improper grammar D. Improper local language E. Improper foreign language
Improper colloquialisms or slang
A toy manufacturer conducted a survey to estimate the market demand for its specialized wood-based toys in a foreign country. For the survey, it interviewed all the families in four rural towns of that country but it did not have sufficient information to make the distinction between those with children and those without children. The market demand forecast based on this survey failed to match the actual demand for the toys. Which of the following is the most likely reason for this failure? A. Difficulty in defining the research objective B. Unwillingness of the respondents to reply to survey questions C. Difficulty in translating the responses D. Inappropriate sample selection due to lack of adequate demographic data E. Lack of appropriate methods for analyzing the data
Inappropriate sample selection due to lack of adequate demographic data
Which of the following best describes the U.S. government's policy toward multinational corporations that are confronted with situations where bribery is an issue? A. A bribe may be paid as long as it is not a domestic situation. B. Bribery is justified if it is a documented traditional practice in a country. C. A bribe can be paid in a foreign country if it is tied to national security. D. It is illegal for a U.S. citizen to pay a bribe. E. The issue revolves around the customs of the country and each issue is decided separately.
It is illegal for a U.S. citizen to pay a bribe.
In Thailand, it is required that any milk product sold in the country by a foreign company must use the milk produced by Thai dairy farmers. Which of the following economic risks is faced by the international producers of milk products in this situation? A. Exchange controls B. Local-content laws C. Export restrictions D. Tax controls E. Price controls
Local-content laws
_____ is an economy's arbitrator between productive capacity and consumer demand. A. Warehousing B. Marketing C. Convergence D. Procurement E. Outsourcing
Marketing
_____ is traditionally defined as the systematic gathering, recording, and analyzing of data to provide information useful to marketing decision making. A. Marketing reach B. Market skimming C. Marketing research D. Marketing exposure E. Marketing activation
Marketing research
Which of the following countries has been identified by the Department of Commerce as a BEM (big emerging market)? A. Philippines B. Egypt C. Venezuela D. Mexico E. Nicaragua
Mexico
Which of the following statements is true of the reliability of secondary data while conducting market research? A. The data in less developed countries are particularly prone to being less positive in nature when reported by these countries. B. Reliability of data remains unaffected by the tax structures prevailing in countries. C. Official statistics are sometimes too optimistic, reflecting national pride rather than practical reality. D. Economic data about less developed countries are more reliable when reported by these countries. E. Willful errors in the reporting of marketing data are predominantly absent in most industrialized countries.
Official statistics are sometimes too optimistic, reflecting national pride rather than practical reality.
Which of the following commonly counterfeited products has the potential for doing the greatest harm to the consuming public? A. Toys B. CDs C. Pharmaceuticals D. Software E. Clothing
Pharmaceuticals
In the context of international marketing research, which of the following is one of the two basic types into which marketing research methods can be grouped? A. Analytical research B. Qualitative research C. Descriptive research D. Deductive research E. Exploratory research
Qualitative research
Which of the following is the top political issue concerning foreign businesses? A. Demographic profile of political leaders B. Government policies on infrastructure C. Economic awareness of political leaders D. Stability of prevailing government policies E. Membership of governments in trade treaties
Stability of prevailing government policies
(T or F) 1Newly industrialized countries (NICs) are characterized by markets free from restrictive trade practices and the presence of significant free market reforms.
T
(T or F) Among three kinds of distances that international marketers must traverse, time zones have the greatest influence on the success of their commercial efforts abroad
T
(T or F) As a country develops, market behavior changes and eventually it leads to market segmentation.
T
(T or F) Big emerging markets are of major political importance within their regions
T
(T or F) Easy accessibility of volumes of secondary data is the biggest advantage that Internet now provides to international marketing researchers.
T
(T or F) Economic development means rapid economic growth and increases in consumer demand
T
(T or F) In Marxist-socialist societies, law is strictly subordinate to prevailing economic conditions
T
(T or F) In international marketing, the greatest problem in sampling stems from the lack of adequate demographic data and available lists from which to draw meaningful samples
T
(T or F) The liberalization of trade and investment policies in developing countries are changing the way countries will trade and prosper in the 21st century.
T
(T or F) The principal agency that supports U.S. business abroad is the Department of Commerce (DOC).
T
(T or F) The quality of an infrastructure directly affects a country's economic growth potential
T
(T or F) The ultimate goal of domestication is to force foreign investors to share more of the ownership, management, and profits with nationals than was the case before domestication.
T
(T or F) When the only marketing functions performed are demand creation and physical distribution, the marketing process is said to be in the mass distribution substage
T
(T or F) With respect to international marketing research, cultural differences among countries offer the best explanation for the unwillingness or the inability of many to respond to research surveys.
T
Which of the following agencies is dedicated to helping U.S. business compete in a global marketplace? A. Commodity Futures Trading Commission (CFTC) B. The Federal Trade Commission (FTC) C. The Small Business Administration (SBA) D. The United States International Trade Commission (USITC) E. The International Trade Administration (ITA)
The International Trade Administration (ITA)
Which of the following is one of the main political causes of instability in international markets? A. Varied taxing conventions B. Differences in economic philosophies C. Global focus D. Environmental awareness E. Trade disputes
Trade disputes
Which of the following questions should be asked by a marketing researcher when trying to establish the reliability of secondary data sources in the international arena? A. How much do the data cost? B. What language is used in the parent country? C. How long did it take to complete the survey in question? D. Who collected the data? E. What type of survey was used during the data collection process?
Who collected the data?
List and briefly discuss the various economic risks that international companies must face when they seek to market abroad. The text lists six economic risks.
a. Exchange controls: When a nation faces shortages of foreign exchange and/or a substantial amount of capital is leaving the country, controls may be levied over all movements of capital or selectively against the most politically vulnerable companies to conserve the supply of foreign exchange for the most essential uses. b. Local-content laws: Countries often require a portion of any product sold within the country to have local content, that is, to contain locally made parts. c. Import restrictions: Selective restrictions on the import of raw materials, machines, and spare parts are fairly common strategies to force foreign industry to purchase more supplies within the host country and thereby create markets for local industry. d. Tax controls: Taxes must be classified as a political risk when used as a means of controlling foreign investments. In such cases, they are raised without warning and in violation of formal agreements. e. Price controls: Controls applied for essential products during inflationary periods can be used to control the cost of living. They also may be used to force foreign companies to sell equity to local interests. f. Labor problems: In many countries, labor unions have strong government support that they use effectively in obtaining special concessions from business. Layoffs may be forbidden, profits may have to be shared, and an extraordinary number of services may have to be provided.
Alexia is geographically large and represents a sizable market for a wide range of products. It has a strong growth rate and is considered as the regional economic driver. Based on this information, Alexia can be classified as a _____. A. grey market B. big emerging market C. two-sided market D. frontier market E. niche market
big emerging market
Markets that are geographically large, have strong growth rates, are regional economic drivers, and represent sizable markets for a wide range of products are known as _____. A. frontier markets B. big emerging markets C. two-sided markets D. niche markets E. grey markets
big emerging markets
Stopping or refusing to trade with another nation for political reasons is called: A. monopolizing. B. boycotting. C. confiscation. D. democratization. E. expropriation
boycotting.
Code law is also known as _____. A. business law B. common law C. religious law D. civil law E. universal law
civil law
Once a researcher has defined the research problem and established research objectives, the researcher must: A. effectively communicate the problem and objectives to decision makers. B. analyze, interpret, and summarize the results. C. determine the sources of information to fulfill the research objectives. D. assess the suitability of available statistical methods for analyzing the data. E. evaluate the cost and benefits of the research effort.
determine the sources of information to fulfill the research objectives.
The level of market development roughly parallels the stages of _____. A. economic stagnation B. economic duress C. economic repression D. economic equilibrium E. economic development
economic development
When a government seizes an investment of a foreign investor but some reimbursement for the assets is made, the government follows a process called: A. confiscation. B. expropriation. C. domestication. D. exchange controls. E. local-content laws.
expropriation.
The World Court can adjudicate disputes between _____. A. governments B. a company and a government C. two companies D. a citizen and a government E. trade associations of two countries
governments
Alex's research focuses on exploring countries that have different languages, economies, social structures, behavior, and attitude patterns. In this case, Alex is most likely engaged in _____ research. A. geographical B. anthropological C. psychological D. sociological E. multicultural
multicultural
Taxes must be classified as a(n) _____ risk when used as a means of controlling foreign investments. A. political B. social C. ignorable D. environmental E. harmless
political
Brian is attempting to forecast political instability and help his company's management identify and evaluate political events and their potential influence on current and future international business decisions. Brian is engaged in: A. political risk assessment. B. political confiscation. C. democratization. D. arbitration. E. risk expropriation. :
political risk assessment.
In North Korea, foreign investors or producers are required to sell products at prices stated by the North Korean government rather than letting market value and demand determine the prices. This implies that there is severe application of _____. A. exchange controls B. local-content laws C. import restrictions D. tax controls E. price controls
price controls
Before launching its latest line of health drinks, a beverage manufacturer provided free samples of the health drinks to a large and culturally diverse set of families. It then conducted a survey with mostly open-ended questions where the participants were asked about their first impressions about the drinks. This is an example of _____ research. A. qualitative B. analytical C. quantitative D. laboratory E. statistical
qualitative
Before launching its latest line of environment-friendly and child-friendly wooden toys, a toy manufacturer gave samples of these toys to a large and culturally diverse set of families. It then conducted a survey in which the parents were asked to rate the toys on a step-wise scale of "not satisfied" to "extremely pleased." This research is most likely an example of _____ research. A. quantitative B. longitudinal C. descriptive D. qualitative E. explanatory
quantitative
In _____, usually a large number of respondents are asked to reply, either verbally or in writing, to structured questions using a specific response format or to select a response from a set of choices. A. quantitative research B. a focus group interview C. descriptive research D. an in-depth interview E. explanatory research
quantitative research
Ben Grissom has decided to use information collected by the U.S. government in his upcoming research project on cultural trends. This is an example of using a _____ data source. A. first-hand B. secondary C. primary D. direct E. personal
secondary
In the context of sources of data, commercial sources, trade associations, management groups, and state and local governments are examples of _____. A. first-hand data B. secondary data C. primary data D. personal data E. direct data
secondary data
20. Since the government of Nigeria is strapped for cash, it has decided to tax all foreign investments (such as oil production equipment) by up to 40 percent of the appraised value. The Nigerian government has found that this is the handiest and quickest means of finding operating funds. The economic risk in discussion here is: A. exchange controls. B. local-content laws. C. tax restrictions. D. tax controls. E. price controls.
tax controls.
All of the following are traits of big emerging markets (BEMs) EXCEPT: A. they import less than smaller markets. 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.
they import less than smaller markets.
Relations between governments and MNCs are generally positive if the investment: A. increases the volume of imports. B. uses globally produced resources. C. transfers capital, technology, and/or skills. D. brings in more number of foreign nationals. E. decreases the volume of exports.
transfers capital, technology, and/or skills.
Meteora Inc. is planning to enter the Kenyan market by establishing a mobile phone manufacturing operation in Kenya. Meteora is most likely to have a positive relationship with Kenyan government through its investment if it: A. uses locally produced resources. B. imports phone components from China C. establishes an R&D center in California and has all its technology patented there. D. ensures that its middle and upper management are made of expatriates. E. bargains for a tax holiday for the next five financial years.
uses locally produced resources.
List the six steps in the research process
• Define the research problem and establish research objectives. • Determine the sources of information to fulfill the research objectives. • Consider the costs and benefits of the research effort. • Gather the relevant data from secondary or primary sources, or both. • Analyze, interpret, and summarize the results. • Effectively communicate the results to decision makers.