International Marketing Final

Which of the following steps is an international negotiator most likely to take in order to ensure influence at headquarters? A. Bringing along a senior executive to the business negotiations. B. Assigning the task of note-taking to a team member. C. Engaging in frequent facial gazing. D. Interrupting the client as often as possible. E. Bringing along many members to overwhelm the client.

A. Bringing along a senior executive to the business negotiations. Negotiators may have to request the accompaniment of senior executives to better match up with client's and partner's negotiation teams. Particularly in relationship-oriented cultures, rank speaks quite loudly in both persuasion and the demonstration of interest in the business relationship. Bringing along a senior executive is important because influence at headquarters is crucial to success.

Which of the following is true of letters of credit? A. Except for cash in advance, letters of credit afford the greatest degree of protection for the seller. B. A letter of credit is a guarantee of payment to the seller. C. The procedure for a letter of credit ends with the completion of the contract. D. Letters of credit shift the seller's credit risk to the bank issuing the letter of credit. E. An irrevocable letter of credit means that once the seller has accepted the credit, the buyer can alter it without the permission of the seller.

A. Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.

Which of the following is true of firms that follow variable-cost pricing? A. Firms that follow variable-cost pricing sell their products at lower net prices abroad than in the domestic market. B. This approach to pricing emphasizes that no unit of a similar product is different from any other unit in terms of cost. C. This approach to pricing emphasizes that no unit of a similar product is different from any other unit in terms of cost. D. If limited supply exists, a company may follow a variable-cost approach to maximize revenue and to match demand to supply. E. This approach emphasizes that each unit must bear its full share of the total fixed and variable cost.

A. Firms that follow variable-cost pricing sell their products at lower net prices abroad than in the domestic market. In variable-cost pricing, firms are concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets. Such firms regard foreign sales as bonus sales and assume that any return over their variable cost makes a contribution to net profit. These firms may be able to price most competitively in foreign markets, but because they are selling products abroad at lower net prices than they are selling them in the domestic market, they may be subject to charges of dumping.

Which of the following statements regarding the persuasion tactics used by various groups of negotiators is true? A. In Japan, no clear separation exists between task-related information exchange and persuasion B. Americans tend to hold their cards close to their chests and delay the information exchange. C. Japanese buyers and sellers are known to frequently use threats and warnings in the persuasion stage of negotiations. D. Americans use the least aggressive persuasive approach as compared to any other group. E. Americans rarely express emotions that are completely inappropriate in foreign countries.

A. In Japan, no clear separation exists between task-related information exchange and persuasion. In Japan, a clear separation does not exist between task-related information exchange and persuasion. The two stages tend to blend together as each side defines and refines its needs and preferences. Much time is spent in the task-related exchange of information, leaving little to "argue" about during the persuasion stage.

Which of the following countries is not officially on the metric system? A. Myanmar B. Japan C. Saudi Arabia D. Mexico E. China

A. Myanmar

Which of the following statements is true of economic unions? A. Political, geographical, and cultural factors are important for the success of an economic union. B. Individual differences do not affect the success quotient of that union. C. Economic integration is not influenced by the existence or absence of transportation networks. D. Geographic and temporal proximity are absolutely imperative for members of a customs union. E. A political union has the least amount of integration compared to all the other types of regional economic integrations.

A. Political, geographical, and cultural factors are important for the success of an economic union. Successful economic union requires favorable economic, political, cultural, and geographic factors as a basis for success. Major flaws in any one factor can destroy a union unless the other factors provide sufficient strength to overcome the weaknesses.

Identify the true statement about sales promotions. A. They are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trials. B. They primarily involve activities that encourage the press to cover positive stories about the company. C. They are ineffective in markets where consumers are difficult to reach due to media limitations. D. They are extremely reliable as research shows that responses to promotions remain the same across all promotional types and cultures. E. They are least effective when the product concept is new.

A. They are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trials.

Which of the following is most likely to have a direct sales force in the foreign country where it intends to sell its products? A. a company manufacturing fiber optics B. a company manufacturing decorative candles C. a company manufacturing shirts D. a company manufacturing kitchenware E. a company manufacturing plasticware

A. a company manufacturing fiber optics In this case, a company manufacturing fiber optics is most likely to have a direct sales force in the foreign country to sell its product. Particularly for high-technology and big ticket industrial products, a direct sales force may be required in a foreign country.

In U.S. domestic trade, the typical payment procedure for established customers is A. an open account. B. a letter of credit. C. a bill of exchange. D. cash in advance. E. forfaiting.

A. an open account.

Which of the following is the main reason for the failure of individual incentives to motivate employees in Japan? A. emphasis on collectivism B. high corruption levels C. practice of cultural chauvinism D. democratic form of government E. emphasis on capitalism

A. emphasis on collectivism With Japan's emphasis on paternalism and collectivism, and its system of lifetime employment and seniority, motivation through individual incentives does not work well because Japanese employees seem to derive the greatest satisfaction from being comfortable members of a group. Japanese bonus systems are therefore based on group effort, and individual commission systems are rare.

Identify the true statement about strategic planning. A. it is usually conducted at the highest levels of management B. it does not include the research component of a company C. it is designed to solely address marketing and advertising questions at the local level D. it is most commonly referred to as market planning E. it does not address either the long-term or short-term goals of the company

A. it is usually conducted at the highest levels of management

Which of the following is one of the advantages that an expatriate salesperson has over a native sales person? A. proven dependability B. fewer legal barriers C. better understanding of distribution channels D. narrowing of the cultural gap E. elimination of the risk of employee-poaching

A. proven dependability

The primary role of _____ is to encourage the press to cover positive stories about companies and manage unfavorable rumors, stories, and events. A. public relations B. direct selling C. trade shows D. personal selling E. sales promotion

A. public relations

According to studies conducted at Ford Motor Company and AT&T, an important predictor of success in negotiations with international clients and partners is A. the willingness to use team assistance when negotiating with foreigners. B. the lack of influence at headquarters. C. the unwillingness to share information about oneself. D. hypersensitivity to cultural differences. E. willingness to take copious notes during negotiations.

A. the willingness to use team assistance when negotiating with foreigners. In studies conducted at Ford Motor Company and AT&T, three additional traits were found to be important predictors of negotiator success with international clients and partners: willingness to use team assistance, listening skills, and influence at headquarters.

A consortium is different from a joint venture in that a consortium A. usually operates in a country where none of the participants is currently active. B. is a partnership between individuals rather than companies. C. restricts the right to hold an equity position to its majority partners. D. does not involve the creation of a separate legal entity. E. is formed mainly for executing short-term projects.

A. usually operates in a country where none of the participants is currently active. Consortia are similar to joint ventures and could be classified as such except for two unique characteristics: (1) They typically involve a large number of participants and (2) they frequently operate in a country or market in which none of the participants is currently active.

_____ is a unique forum that has evolved into the primary regional vehicle for promoting trade liberalization and economic cooperation in the Asia Pacific region. A. WTO B. APEC C. OPEC D. EU E. OECD

B. APEC

_____ is one of the means of motivation and control of sales representatives in relationship-oriented cultures like Japan. A. An individual incentive plan B. Corporate culture C. An individual financial reward D. Attraction of a foreign assignment E. An individual commission system

B. Corporate culture

Which of the following is most likely to be the reason for the reduced influence of foreign nationals in a sales force? A. Foreign nationals are not keen on keeping relationships at home office warm. B. Foreign nationals have limited English communication skills. C. Foreign nationals lack the knowledge of local culture and prevalent practices. D. Foreign nationals cannot build a close relationship with subordinates and customers. E. Foreign nationals are corrupt and often leak company secrets.

B. Foreign nationals have limited English communication skills. Even though most foreign nationals are careful to keep relationships at the home office warm, their influence is often reduced by their limited English communication skills and lack of understanding of how home-office politics influence decision making.

Which of the following is a characteristic of Stage 3 of Rostow's five-stage model of economic growth? A. Industrial demand is associated with natural resources extraction. B. Goods demanded in the economy relate to equipment and supplies to support manufacturing. C. The focus is more on low-cost manufacturing of a variety of consumer and some industrial goods. D. The focus is on design activities and the development of manufacturing techniques. E. Infrastructure development is a primary requirement in the economy.

B. Goods demanded in the economy relate to equipment and supplies to support manufacturing. In Stage 3, takeoff, of Rostow's five-stage model of economic growth, manufacturing of both semidurable and nondurable consumer goods has begun. Goods demanded relate to equipment and supplies to support manufacturing. Russian and Eastern European countries fit this category.

Which of the following is true of deflation? A. Deflation causes consumer prices to escalate, and consumers face ever-rising prices that eventually exclude many of them from the market. B. In a deflationary market, it is essential for a company to keep prices low and raise brand value to win the trust of consumers. C. In countries with rapid deflation, the selling price must be related to the cost of goods sold and the cost of replacing the items. D. In a deflationary market, an exporter need not place emphasis on controlling price escalation. E. Deflation tends to decrease the real value of money over time.

B. In a deflationary market, it is essential for a company to keep prices low and raise brand value to win the trust of consumers.

Identify the true statement regarding the physical arrangements of an international negotiation setting. A. In high-context cultures, the physical arrangements of rooms are taken casually. B. Japanese prefer to talk to everyone separately, then, once everyone agrees, to schedule inclusive meetings. C. Americans are against the idea of "hammering out an arrangement" even when the opinions and positions are divergent. D. Japanese tend to shun the practice of higher-level executives being included in a negotiation to indicate interest in a deal. E. Americans tend toward a cumulative approach, meeting with one party and reaching an agreement, then both parties calling on a third party.

B. Japanese prefer to talk to everyone separately, then, once everyone agrees, to schedule inclusive meetings. Physical arrangements can affect cooperativeness in subtle ways. Americans tend to want to get everyone together to "hammer out an agreement" even if opinions and positions are divergent. Japanese prefer to talk to everyone separately, then, once everyone agrees, to schedule inclusive meetings.

Which of the following is true of open accounts? A. When political unrest requires additional caution, open accounts are the best mode of payment.' B. Sales on open accounts are generally not recommended when special merchandise is ordered. C. Sales on open accounts are usually recommended when shipping is hazardous. D. Sales on open accounts are recommended when the country of the importer imposes difficult exchange restrictions. E. Sales on open accounts are generally made when the practice of the trade is to use some other method.

B. Sales on open accounts are generally not recommended when special merchandise is ordered.

Which of the following statements is true of the existing multinational market groups? A. Among the EU institutions, the European parliament initiates policy and supervises its observance by member states. B. The European Union, European Economic Area, and the European Free Trade Area (EFTA) are the most established cooperative groups in Europe. C. Of all the multinational market groups, the NAFTA is the most secure and most important economically. D. The European Commission, the Council of Ministers, the European Parliament, and the Court of Justice are all part of the EFTA. E. The European Parliament is the decision-making body of the European Union.

B. The European Union, European Economic Area, and the European Free Trade Area (EFTA) are the most established cooperative groups in Europe.

Which of the following is an advantage that a sales force consisting of local nationals has over a sales force of expatriates? A. They are more efficient in influencing the personnel at the home office. B. They will be better able to lead a company through referral networks. C. They are more knowledgeable about the company and its product line. D. They are likely to have superior technical expertise. E. They are less likely to accept any form of bribe.

B. They will be better able to lead a company through referral networks. Usually, more knowledgeable about a country's business structure and systems than an expatriate would be, local salespeople are better able to lead a company through the maze of unfamiliar distribution systems and referral networks. Pools of qualified foreign personnel available in some places cost less to maintain than a staff of expatriates.

Global Source Inc. prefers to set its prices and not follow the prices prevailing in the market to achieve specific goals. This implies that Global Source views pricing as a(n) _____ of accomplishing marketing objectives. A. passive instrument B. active instrument C. static element D. constant element E. fixed activity

B. active instrument If prices are viewed as an active instrument, the company sets prices (rather than following market prices) to achieve specific objectives, whether targeted returns on profit, targeted market shares, or some other specific goals. Therefore, Global Source views pricing as an active instrument of accomplishing marketing objectives.

Countries A, B, and C are at a particular level of economic integration. All these countries enjoy reduced or eliminated internal tariffs on trade between them and have added a common external tariff on products imported from countries outside the union. If the free flow of labor is still restricted between these three countries, they represent a _____. A. free trade area B. customs union C. political union D. preferential trade area E. regional cooperation group

B. customs union A customs union represents the next stage in economic cooperation. It enjoys the free trade area's reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the union. Therefore, the three countries A, B, and C form a customs union.

Which step of international advertising always represents the most difficult task for international marketing managers? A. performing marketing research B. developing the most effective message(s) for the market segments selected C. composing and securing a budget based on what is required to meet goals D. evaluating the campaign relative to the goals specified E. specifying the goals of the communication

B. developing the most effective message(s) for the market segments selected

Cottonware Corp., an American fabric manufacturing company, sells its products to Big Mart, a Japanese retailer. Big Mart retails these products in major Japanese cities. Which of the following best describes the alternative market-entry strategy that Cottonware Corp. is engaged in? A. franchising B. direct exporting C. a joint venture D. direct foreign investment

B. direct exporting In this case, Cottonware Corp is engaged in direct exporting. With direct exporting, the company sells to a customer in another country. This method is the most common approach employed by companies taking their first international step because the risks of financial loss can be minimized.

Companies are proposing newer _____ market segments defined by "consumer cultures" related to shared sets of consumption-related symbols— convenience, youth, America, internationalism, cosmopolitan orientation, and humanitarianism are examples. A. local B. global C. regional D. domestic E. linguistic

B. global

China has two important steps to take if the road to economic growth is to be smooth: reforming the legal system and _____. A. increasing embargoes on the U.S B. improving human rights C. giving up its admission to the WTO D. giving up all trade with Tibet E. making Taiwan its special administrative region (SAR)

B. improving human rights

Which of the following would be considered by American negotiators as a signal of progress when conducting business negotiations with foreigners? A. absence of higher-level foreigners in the discussions B. inclusion of questions on specific areas of the deal C. a hardening of attitudes and positions on some of the issues D. decreased bargaining and use of the higher-level and formal channels of communication E. decreased talk among foreigners in their own language at the negotiation table

B. inclusion of questions on specific areas of the deal Important signals of progress in business negotiations can be (1) higher-level foreigners being included in the discussions; (2) questions beginning to focus on specific areas of the deal; (3) a softening of attitudes and positions on some of the issues; (4) at the negotiation table, increased talk among themselves in their own language, which may often mean they are trying to decide something; and (5) increased bargaining and use of the lower-level, informal, and other channels of communication.

Identify the true statement about indirect exporting. A. it involves more investments than direct foreign investment B. it carries a lower risk than other modes of foreign-market entry C. it has the highest rate of return D. it offers the highest possible control than any other modes of foreign market entry E. it accounts for about 90 percent of global economic activity

B. it carries a lower risk than other modes of foreign-market entry Indirect exporting requires no equity investment and thus has a low risk, low rate of return, and little control.

In the context of how differences in values affect international negotiations, Guanxi, the Chinese word for _____ is key for negotiators working in China. A. aggression B. personal connections C. nonverbal behavior D. pushiness E. doublespeak

B. personal connections Experts tell us that businesses don't grow beyond the bounds and bonds of tight family control in the burgeoning "Chinese Commonwealth." Things work the same way in Spain, Mexico, and the Philippines by nature. And, just as naturally, negotiators from such countries not only will take things personally but will be personally affected by negotiation outcomes. Guanxi, the Chinese word for personal connections, is key for negotiators working in China.

Product tie-ins, contests, and sweepstakes are types of _____ devices. A. peddling B. sales promotion C. content marketing D. direct selling E. public relations

B. sales promotion

China has a dual economy that embraces aspects of A. capitalism and libertarian socialism. B. socialism and capitalism. C. federalism and socialism. D. libertarian socialism and federalism. E. federalism and communism.

B. socialism and capitalism. China's dual economic system, embracing socialism along with many tenets of capitalism, produced an economic boom with expanded opportunity for foreign investment that has resulted in annual GNP growth averaging nearly 10 percent since 1970. All of this growth is dependent on China's ability to deregulate industry, import modern technology, privatize overstaffed and inefficient state owned enterprises (SOEs), and continue to attract foreign investment.

Which of the following is an advantage of teams managed by virtual expatriates? A. Managers can have close contact with their subordinates. B. Managers have closer contact with their customers. C. Companies are benefitted by diversity-driven creativity. D. Managers possess complete local knowledge. E. Problems related to cross-cultural communications can be avoided.

C. Companies are benefitted by diversity-driven creativity.

The institutions of the _____ consist of executive, parliamentary, and judicial branches. A. European Court of Justice B. European Economic Area C. European Union D. European Commission E. EFTA

C. European Union

Which of the following is essential while making price quotations for international sale? A. Parties to a transaction must be certain that the price quotation must not reveal the credit terms involved. B. Price quotations must act as the primary outside source of aid for companies beset by the uncertainty of a countertrade. C. The price quotation must state who pays transportation charges and from what point. D. The price quotation and contract should define only the quantity and not the quality. E. Parties to the transaction must ensure that the quotation is made only in terms of electronic trade dollars.

C. The price quotation must state who pays transportation charges and from what point. Parties to the transaction must be certain that the quotation settled on appropriately locates responsibility for the goods during transportation and spells out who pays transportation charges and from what point. Price quotations must also specify the currency to be used, credit terms, and the type of documentation required. Finally, the price quotation and contract should define quantity and quality.

The emergence of pan-European communications media entices companies to A. brand the same products differently in different countries. B. use different advertising appeals for different regions in Europe. C. adopt promotional activities that are standardized. D. advertise local products locally. E. limit sales and promotions to English-speaking regions.

C. adopt promotional activities that are standardized. The emergence of pan-European communications media is enticing many companies to push the balance toward more standardized promotional efforts. As media coverage across Europe expands, it will become more common for markets to be exposed to multiple messages and brands of the same product.

For most companies, _____ and personal selling are the major components in the marketing communications mix. A. public relations B. direct selling C. advertising D. newsletters E. trade shows

C. advertising

In the context of the four stages of business negotiations, which of the following is usually made until the end of a negotiation in most cultures? A. nontask sounding B. persuasion C. concessions D. task-related exchange of information E. imaging

C. concessions

Everyday Coffee Inc., a coffee chain, has recently decided on the mode of entry into a particular market. Which phase of the planning process is the coffee chain currently in? A. preliminary analysis B. defining market segment C. developing the marketing plan D. implementation and control E. standardization of the marketing mix

C. developing the marketing plan In this case, Everyday Coffee Inc. is in the Phase 3 of the international planning process. In Phase 3 of the international planning process, a marketing plan is developed for the target market—whether it is a single country or a global market set. The marketing plan begins with a situation analysis and culminates in the selection of an entry mode and a specific action program for the market.

At which level of economic integration do member countries maintain individual tariff schedules for external countries but reduce customs duties and nontariff trade barriers among themselves? A. regional cooperation groups B. common market C. free trade area D. customs union E. political union

C. free trade area A free trade area is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries.

In a free trade zone (FTZ) or free port A. the duties on labor and overhead costs are higher than in the rest of the country. B. price escalation cannot be controlled easily. C. import duties are postponed till the product leaves the FTZ and enters the country. D. tariffs are usually higher for raw materials than for finished goods. E. goods can only be stored but not processed.

C. import duties are postponed till the product leaves the FTZ and enters the country. In a free port or FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the country. When an item leaves an FTZ and is imported officially into the host country of the FTZ, all duties and regulations are imposed.

A company that considers pricing to be a static element in a business decision A. views its export sales as a significant source of revenue. B. sets prices to achieve a specific objective such as targeted market share. C. places a low priority on foreign business. D. serves a very small proportion of the domestic market. E. does not export any excess inventory.

C. places a low priority on foreign business.

Fifteen countries agree to form a regional economic integration, which adopts all the features of a common market along with the enforcement of economic integration. This form of regional cooperation would most accurately be described as a _____. A. free trade area B. regional cooperation for development C. political union D. customs union E. preferential trade area

C. political union Political union is the most fully integrated form of regional cooperation. It involves complete political and economic integration, either voluntary or enforced. In addition to this, the member countries eliminate all tariffs and other restrictions on internal trade, adopt a set of common external tariffs, remove all restrictions on internal trade, and remove all restrictions on the free flow of capital and labor. Therefore, the fifteen countries form a political union.

A country is beginning to start manufacturing activities. The economy of the country primarily requires infrastructure development. Which of the following stages of Rostow's five-stage model of economic growth is the country in? A. the traditional society B. drive to maturity C. preconditions for takeoff D. takeoff E. the age of mass consumption

C. preconditions for takeoff In Stage 2 of Rostow's five-stage model of economic development, known as the preconditions for takeoff stage, manufacturing is just beginning in a country. The country's primary needs will be related to infrastructure development—for example, telecommunications, construction, and power generation equipment and expertise. Therefore, the country mentioned in the scenario is in the second stage of Rostow's five-stage model of economic development.

Isabel is a senior manager at a well-established food company in the U.S. She regularly conducts press conferences and engages with various outlets of the media to build positive image about the brand. She is also assigned with the task of dealing with all the controversies that surround the firms' products. Isabel is most likely to be engaged in _____. A. personal selling B. direct selling C. public relations D. trade shows E. sales promotions

C. public relations In this case, Isabel is most likely to be engaged in public relations. Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of public relations (PR). The job consists of not only encouraging the press to cover positive stories about companies but also managing unfavorable rumors, stories, and events.

Multinational market regions are those groups of countries that seek mutual economic benefit from: A. reducing cooperative agreements for economic alliances. B. increasing customs duties among member nations. C. reducing interregional trade and tariff barriers. D. reducing the free flow of capital among member nations. E. increasing domestic trade tariffs.

C. reducing interregional trade and tariff barriers. Multinational market regions are those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers and are the most important global trends today.

In the context of interpersonal selling, a company's most direct tie to the customer is the A. trustee. B. general manager. C. salesperson. D. chairperson. E. marketing manager.

C. salesperson. The salesperson is a company's most direct tie to the customer; in the eyes of most customers, the salesperson is the company.

Which of the following is the basic orientation for every type of economic union? A. increased social and cultural integration B. the sharing of a common currency C. the development and enlargement of markets D. an equal tariff treatment for members and nonmembers E. the settlement of longstanding political disputes

C. the development and enlargement of markets Every type of economic union shares the development and enlargement of market opportunities as a basic orientation; usually, markets are enlarged through preferential tariff treatment for participating members, common tariff barriers against outsiders, or both.

Which of the following makes it important that market potential be viewed in the context of regions of the world rather than country by country? A. the structuring of eastern Europe's individual market-driven economies into a single eastern European bloc B. the localization of markets C. the dissolution of the Soviet Union into independent states D. the worldwide trend of avoiding economic cooperation E. reduced global competition

C. the dissolution of the Soviet Union into independent states The globalization of markets, the restructuring of the eastern European bloc into independent market-driven economies, the dissolution of the Soviet Union into independent states, the worldwide trend toward economic cooperation, and enhanced global competition make it important that market potential be viewed in the context of regions of the world rather than country by country.

Which of the following is most likely to be the purpose of side conversations in the native language during a business meeting between Americans and a foreign client? A. to buy time in order to come to a decision B. to tell half-truths about the American firm C. to settle a disagreement among the foreign team members D. to evade key issues regarding the business deal E. to disapprove of the negotiation location

C. to settle a disagreement among the foreign team members The usual purpose of side conversations among foreign negotiators in their native languages is to straighten out a translation problem. For instance, one Korean may lean over to another and ask, "What'd he say?" Or the side conversation can regard a disagreement among the foreign team members. Both circumstances should be seen as positive signs by Americans—that is, getting translations straight enhances the efficiency of the interactions, and concessions often follow internal disagreements.

Identify the true statement about the problems caused by cultural differences in international business negotiations. A. Cultural differences in values are less subtle than differences in language. B. Cultural differences in verbal behaviors are hidden deeper than cultural differences in nonverbal behaviors. C. Differences in language are harder to cure than cultural differences in decision-making processes. D. Differences in language are less serious than cultural differences in values. E. Cultural differences in thinking and decision-making processes are less serious than differences in language.

D. Differences in language are less serious than cultural differences in values. Cultural differences cause four kinds of problems in international business negotiations, and they occur at the levels of language, nonverbal behaviors, values, and thinking and decision-making processes. The order is important; the problems lower on the list are more serious because they are more subtle.

The most successful multinational market region since World War II is the ______. A. Americas and the Association of Southeast Asian Nations B. Asia Pacific Economic Cooperation C. Latin American Integration Association D. European Union E. North American Free Trade region

D. European Union Regional economic cooperative agreements have been around since the end of World War II. The most successful one is the European Union (EU), the world's largest multinational market region and foremost example of economic cooperation.

Which of the following is true of franchising? A. Franchising is an important form of horizontal market integration. B. The franchiser provides market knowledge, capital, and personal involvement in management. C. Foreign laws and regulations are usually hostile toward franchising. D. Franchising provides an effective blending of skill centralization and operational decentralization. E. The franchiser has little control on marketing of the products at the point of final sale.

D. Franchising provides an effective blending of skill centralization and operational decentralization. Franchising is a rapidly growing form of licensing in which the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management. The combination of skills permits flexibility in dealing with local market conditions and yet provides the parent firm with a reasonable degree of control. The franchiser can follow through on marketing of the products to the point of final sale. It is an important form of vertical market integration. Potentially, the franchise system provides an effective blending of skill centralization and operational decentralization. Foreign laws and regulations are friendly toward franchising because it tends to foster local ownership, operations, and employment.

Which of the following is the reason why an international sales force in Germany can make greater use of expatriates? A. The standard of living is low. B. The language is easy to master. C. It is a developing country. D. It is an information-oriented culture. E. It is a relationship-oriented society.

D. It is an information-oriented culture.

ASEAN+3 consists of the members of ASEAN plus South Korea, China, and _____. A. Pakistan B. Philippines C. Indonesia D. Japan E. India

D. Japan One result of the Asian financial crisis of 1997 to 1998 was the creation of ASEAN+3 (ASEAN plus China, Japan, and South Korea) to deal with trade and monetary issues facing Asia.

Which of the following is true of parallel imports? A. The possibility of a parallel market occurs whenever price differences are lesser than the cost of transportation between two markets B. If the prices for the same good are equal in different markets, the volume of parallel imports will increase. C. Restrictions like import quotas and high tariffs eliminate parallel imports. D. Parallel imports can do long-term damage in the market for trademarked products. E. Parallel imports arise from the differences in the quality of trademarked goods.

D. Parallel imports can do long-term damage in the market for trademarked products. Parallel imports can do long-term damage in the market for trademarked products. Customers who unknowingly buy unauthorized imports have no assurance of the quality of the item they buy, of warranty support, or of authorized service or replacement parts.

In the context of the four stages of business negotiations, which of the following is true of the behavior of Americans during the persuasion stage? A. They tend to withhold information from the foreign client. B. They refrain from using threats or warnings during negotiations. C. They hardly express any emotions during negotiations. D. They intend to handle any objections that the foreign client may have. E. They ask innumerable questions in order to delay the proceedings.

D. They intend to handle any objections that the foreign client may have. Americans tend to lay their cards on the table and hurry through the information exchange to persuasion. A key aspect of sales training in the United States is "handling objections." So the goal in information exchange among Americans is to quickly get those objections out in the open so they can be handled.

Customer training is rapidly becoming a major part of a company's _____ when selling technical products in countries that demand the latest technology. A. promotional pricing B. product innovation C. capacity utilization efficiency D. after-sales service E. predatory pricing

D. after-sales service Customer training is rapidly becoming a major after-sales service when selling technical products in countries that demand the latest technology but do not always have trained personnel.

C.K. Prahalad and his associates referred to consumers who had been relatively ignored by international marketers because of misconceptions about their lack of resources as the _____ market. A. virgin B. economically disadvantaged C. below-poverty-line D. bottom-of-the-pyramid E. bottom-of-the-line

D. bottom-of-the-pyramid C.K. Prahalad and his associates introduced a new concept into the discussion of developing countries and markets— bottom-of-the pyramid markets (BOPMs)—consisting of the 4 billion people across the globe with annual incomes of less than $1,200. Prahalad's basic point is that these consumers have been relatively ignored by international marketers because of misconceptions about their lack of resources (both money and technology) and the lack of appropriateness of products and services usually developed for more affluent consumers.

Countries X, Y, and Z have eliminated all tariffs and other restrictions on internal trade, adopted a set of common external tariffs, and removed all restrictions on the free flow of capital and labor among member nations. However, they lack political unity. These countries are most likely in a _____. A. preferential trade area B. free trade area C. customs union D. common market E. political union

D. common market A common market agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations. Thus, a common market is a common marketplace for goods as well as for services (including labor) and for capital. Therefore the three countries X, Y, and Z form a common market.

Which of the following characteristics of an innovation is likely to have a negative impact on the acceptance of a product in the intended market? A. relative advantage B. compatibility C. trialability D. complexity E. observability

D. complexity

A product's _____ is most likely to influence the purchase decision of the consumers A. appearance B. size C. technology D. cost E. design

D. cost In most global markets, the cost and quality of a product are among the most important criteria by which purchases are made. For consumer and industrial products alike, the reason often given for preferring one brand over another is better quality at a competitive price.

Queen Chocolates Inc., a Swiss firm, was given permission to sell its products in Spain only if it agreed to purchase Spanish tomatoes in return. This is an example of _____. A. bargaining B. countervailing trade C. buy-back D. countertrade E. bribery

D. countertrade

Which of the following is not a specific objective of sales promotion? A. achieving immediate purchase B. introducing consumers to the store or brand C. gaining retail point-of-purchase displays D. creating good relationships with the popular press E. augmenting advertising and personal sales efforts

D. creating good relationships with the popular press Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase, consumer introduction to the store or brand, gaining retail point-of-purchase displays, encouraging stores to stock the product, and supporting and augmenting advertising and personal sales efforts.

A(n) _____ tax is based on total selling price and is assessed every time the goods change hands. A. noncumulative B. gross receipt C. excise D. cumulative value-added E. cumulative fair

D. cumulative value-added Some countries levy a value-added tax on goods as they pass through channels. Goods are taxed each time they change hands. The tax may be cumulative or noncumulative. A cumulative value-added tax is based on total selling price and is assessed every time the goods change hands.

John is a part of the marketing team in his company. There is a conflict between the finance team and the marketing team of the company on the issue of market segmentation. While the finance team is arguing for a standardized approach toward market segmentation, John and his team members feel that it is more important to understand customer requirements on an individual basis for greater customer satisfaction. Which of these terms best describes the approach adopted by John's team? A. standardization B. homogenization C. normalization D. customization E. integration

D. customization In this case, the approach adopted by John's team is customization. As the information explosion allows marketers to segment markets ever more finely, it is only the manufacturing and/or finance managers in companies who argue for standardization for the sake of economies of scale. From the marketing perspective, customization is always best. The ideal market segment size, if customer satisfaction is the goal, is one.

Which of the following traits is important for technical experts who accompany marketing executives in international negotiations? A. hypersensitivity B. altruism C. verbosity D. empathy E. skepticism

D. empathy Traits such as maturity, emotional stability, breadth of knowledge, optimism, flexibility, empathy, and stamina are all important, not only for marketing executives involved in international negotiations but also for the technical experts who often accompany and support them.

Identify the true statement about tactical planning. A. it specifically deals with a company's products, capital, and research at a global level B. it is conducted at the highest levels of management C. it excludes plans that are made at the local level D. it deals with specific actions that are used to implement strategic planning goals E. it hardly deals with questions that relate to advertising and marketing

D. it deals with specific actions that are used to implement strategic planning goals

When two or more participating companies join forces to create a separate legal entity to facilitate doing business in a country where at least one of them is currently active, it is called a _____. A. consortium B. franchise pact C. license arrangement D. joint venture E. direct investment agreement

D. joint venture

The marketing team at Ojho Technologies is drafting a plan to convey the benefits of its newly developed software to the users in its international markets. In this scenario, the marketing team is working on improving the _____ of the product. A. compatibility B. trialability C. complexity D. observability

D. observability

LiteFeet Inc., a footwear company, has developed a marketing plan for its target market. Budgets, sales, and profit expectations have been chalked out. Now, LiteFeet has begun to implement its specific plans and is anticipating great success in its chosen market. Which of the following phases of the international marketing process is LiteFeet currently in? A. phase 1 B. phase 2 C. phase 3 D. phase 4 E. phase 5

D. phase 4 In this case, LiteFeet Inc. is currently in phase 4 of the international marketing process. A "go" decision in phase 3 triggers phase 4 of the international planning process. Phase 4 involves implementation of specific plans and anticipation of successful marketing.

An expatriate sales force is most likely to have an advantage over a local sales force when selling A. consulting services. B. in relationship-oriented countries. C. a low-technology product. D. requires an extensive background of information. E. a product that requires the most complete local knowledge.

D. requires an extensive background of information. he number of companies relying on expatriate personnel is increasing as the volume of world trade increases and as more companies use locals to fill marketing positions. However, when products are highly technical, or when selling requires an extensive background of information and applications, an expatriate sales force remains the best choice.

In Eastern Europe, countries are trying to move from A. socialism to communism. B. capitalism to communism. C. capitalism to federalism. D. socialism to capitalism. E. capitalism to socialism.

D. socialism to capitalism. Eastern Europe and the Baltic states, satellite nations of the former Soviet Union, continue to adjust to the political, social, and economic realities of changing from the restrictions of a Marxist-socialist system to some version of free markets and capitalism.

Which of these regions in China is the world's manufacturing base for the IT industry? A. the traditional industrial heartland in Northeast China B. the Beijing-Tianjin corridor in north China C. the Yangtze River Delta D. the Pearl River Delta E. the Inland area, south of the country

D. the Pearl River Delta The Pearl River Delta, containing Hong Kong, Macau, Guangzhou, and Shenzhen, is the world's manufacturing base for the IT industry.

Which of the following is true of administered pricing? A. The end goal of all administered pricing activities is to increase price competition. B. The legality of administered pricing arrangements is uniform across all nations. C. Administered pricing is legal, as long as it takes place through a cartel. D. Administered pricing is the practice of promoting general welfare by increasing the number of firms in a market. E. Administered pricing may be arranged through the cooperation of competitors or by international agreement.

E. Administered pricing may be arranged through the cooperation of competitors or by international agreement.

Which of the following is true of tariffs? A. A tariff is levied for the purpose of decreasing government revenue. B. An ad valorem duty is a flat charge per physical unit imported. C. A specific duty is levied as a percentage of the value of the goods imported. D. Tariffs and other forms of import taxes serve to treat domestic and foreign goods equally without any discrimination. E. Compound duties include both a specific and an ad valorem charge.

E. Compound duties include both a specific and an ad valorem charge. A specific duty is a flat charge per physical unit imported. Ad valorem duties are levied as a percentage of the value of the goods imported. Compound duties include both a specific and an ad valorem charge.

The _____, a provision of the Maastricht Treaty, established the parameters of the creation of a common currency for the European Union, the euro, and established a timetable for its implementation. A. Court of Justice B. Council of Ministers C. European Commission D. European Parliament E. Economic and Monetary Union

E. Economic and Monetary Union

"Every negotiator has two kinds of interests: in the substance and in the relationship." In the context of international business negotiations, in which of the following countries will the above statement hold true? A. China B. Spain C. Mexico D. The Philippines E. Germany

E. Germany "Every negotiator has two kinds of interests: in the substance and in the relationship." This advice is probably worthwhile in the United States or perhaps in Germany, but in most places in the world, such advice is nonsense.

The vigorous economic growth of the ASEAN countries is primarily linked to the emergence of _____ as a major provider of technology and capital necessary to upgrade manufacturing capability and develop new industries. A. Indonesia B. China C. India D. Philippines E. Japan

E. Japan Four major events account for the vigorous economic growth of the ASEAN countries and their transformation from cheap-labor havens to industrialized nations. One of them is Japan's emergence as a major provider of technology and capital necessary to upgrade manufacturing capability and develop new industries.

When using virtual trade shows as opposed to the physical model, manufacturers A. face higher costs. B. will not be able to exhibit the product. C. will not be able to demonstrate the use of the product. D. always require more manpower and marketing personnel. E. cannot engage in interpersonal relationship building.

E. cannot engage in interpersonal relationship building. An aspect of real trade shows that the virtual ones miss is the face-to-face contact and the all-important interpersonal relationship building that goes on over drinks or during those plastic meals.

Ben's chocolates had to be sold in tin containers in its Middle East markets to prevent the chocolate from melting due to high temperatures. In this scenario, the factor that is influencing the change in the product is the _____ of the foreign market. A. legal requirements B. economic requirements C. technological requirements D. cultural requirements E. climatic requirements

E. climatic requirements

Lately, more and more multinational companies are favoring _____ of advertising themes in different countries. A. standardization B. normalization C. uniformity D. regularization E. customization

E. customization More and more multinational companies can be seen to be managing the balance between standardization of advertising themes and customization. And recently, more companies are favoring the latter.

Product homologation is a term used in many countries to A. describe the process of marketing products similar to the ones already on the market in a manner as congruent as possible with existing cultural norms. B. describe the process of establishing new technical standards for a product. C. define the process by which innovation spreads in a new market. D. describe the influence of the manufacturing country on a consumer's perception of a product. E. describe the changes mandated by the local product and service standards.

E. describe the changes mandated by the local product and service standards.

Which of the following is the first step in adapting a product to a foreign market? A. developing a strategy to convey the benefits of the product to a consumer B. determining ways in which the product can be modified C. determining which physical attribute to modify to suit the local needs D. developing a successful product strategy E. determining how new a product is to a market and how people react to newness

E. determining how new a product is to a market and how people react to newness

Which of the following modes of foreign market entry is the riskiest? A. exporting B. joint venture C. contractual agreement D. strategic alliance E. direct foreign investment

E. direct foreign investment Direct foreign investment requires the most equity of the four modes of entry and creates the greatest risk while offering the most control and the potential highest return.

In the context of international salespeople, personnel from the home country assigned to foreign countries are specifically referred to as A. local nationals. B. foreign managers. C. outsourcers. D. native managers. E. expatriates.

E. expatriates. Increasingly, the number of U.S. home-country nationals (expatriates) assigned to foreign posts is smaller as the pool of trained, experienced locals grows.

Firms that sell industrial goods in the international market should focus on after-sales services because these services A. require high levels of investment in training and development. B. cannot be outsourced to other companies. C. need to be heavily advertised. D. cost the firm almost nothing. E. help the firm build customer loyalty.

E. help the firm build customer loyalty. After-sales services are not only crucial in building strong customer loyalty and the all-important reputation that leads to sales at other companies, but they are also almost always more profitable than the actual sale of the machinery or product.

Which of the following is a chief disadvantage of hiring an expatriate salesperson? A. adverse effect on the prestige of the product B. deterioration of product quality C. lack of technological expertise D. inadequate knowledge of the company E. legal barriers

E. legal barriers The chief disadvantages of an expatriate sales force are the high cost, cultural and legal barriers, and the limited number of high-caliber personnel willing to live abroad for extended periods.

n the context of the four stages of business negotiations, _____ describes the preliminary talk that helps a negotiator determine if a client's attention is focused on business or distracted by other matters, personal or professional. A. persuasion B. concession C. negotiation setting D. task-related exchange of information E. nontask sounding

E. nontask sounding Nontask sounding is much more than just friendly or polite; it helps negotiators learn how the other side feels that particular day. During nontask sounding, one can determine if a client's attention is focused on business or distracted by other matters, personal or professional.

Which of the following is the most advanced stage in Rostow's five-stage model of economic development? A. the traditional society B. drive to maturity C. preconditions for takeoff D. takeoff E. the age of mass consumption

E. the age of mass consumption Stage 5, the age of mass consumption, is the most advanced stage in Rostow's five-stage model of economic development. Countries in this stage have design activities going on and manufacturing techniques being developed, and they are mostly service economies. Japan and Germany are obvious examples of countries that purchase the highest-technology products and services, mostly from other Stage 5 suppliers and consumer products from Stage 3 and 4 countries.

The country-of-origin effect refers to the influence of A. the home country laws on the products marketed in foreign markets. B. the success of a product in the domestic market on the marketing strategies in foreign markets. C. the economic conditions of foreign markets on the acceptance of a product in those markets. D. the international trade regulations on the marketing of a product. E. the country of manufacture or design on a consumer's perception of a product.

E. the country of manufacture or design on a consumer's perception of a product.

In the context of the four stages of business negotiations, an indispensable medium of persuasion in relationship-oriented countries is A. recommendations. B. rewards. C. threats. D. warnings. E. third parties.

E. third parties. Third parties and informal channels of communication are the indispensable media of persuasion in many countries, particularly the more relationship-oriented ones. Meetings in restaurants or meetings with references and mutual friends who originally provided introductions may be used to handle difficult problems with partners in other countries.