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Global Marketing Final

Terms in this set (245)

The distribution process includes all of the following EXCEPT:
A. physical handling of goods.
B. promotion of goods and services.
C. passage of ownership (title).
D. buying and selling negotiations.
E. physical distribution of goods.

promotion of goods and services.

In a(n) _____ distribution structure, an importer controls a fixed supply of goods and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.
A. export-oriented
B. import-oriented
C. manufacturer-oriented
D. service-oriented
E. customer-oriented

import-oriented

Which of the following distribution structures is considered as a traditional distribution structure?
A. Export-oriented
B. Import-oriented
C. Manufacturer-oriented
D. Service-oriented
E. Customer-oriented

Import-oriented

Which of the following statements is true regarding an import-oriented distribution structure?
A. Distribution systems are national in scope.
B. The relationship between the importer and any middleman in the marketplace is similar to that found in a mass-marketing system.
C. The idea of a channel as a chain of intermediaries performing specific activities and each selling to a smaller unit beneath it until the chain reaches the ultimate consumer is common in an import-oriented system.
D. Several independent agencies providing functions such as advertising, marketing research, financing are a part of this distribution structure.
E. An import-oriented distribution structure is considered as a traditional distribution structure.

An import-oriented distribution structure is considered as a traditional distribution structure.

The foundation of the Japanese distribution system is the:
A. middleman.
B. intermediary.
C. manufacturer.
D. small retailer.
E. wholesaler.

small retailer.

_____ has long been considered the most effective nontariff barrier to the Japanese market.
A. Population in Japan
B. Distribution in Japan
C. Japanese culture
D. Cumbersome import and export procedures in Japan
E. Intense competition in Japan

Distribution in Japan

Which of the following does NOT contribute to explaining why Japan has a high number of small stores?
A. Population density
B. A tradition of frequent trips to the store
C. Emphasis on service
D. Freshness and quality expectations
E. Limited commercial real estate plots

Limited commercial real estate plots

Which of the following is an area of emphasis that characterizes Japanese distribution channels?
A. Loyalty
B. Direct sales
C. Fast delivery
D. Variety
E. Intense focus on price

Loyalty

All the following statements are true regarding a Japanese market EXCEPT:
A. the costs of Japanese consumer goods are among the highest in the world.
B. manufacturers depend on wholesalers for a multitude of services to other members of the distribution network like financing, physical distribution etc.
C. the Japanese distribution structure supports long-term dealer-supplier relationships.
D. the Japanese market is characterized by the tradition of frequent trips to the store.
E. the Japanese consumers favor price over personal service.

the Japanese consumers favor price over personal service.

In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the Ministry of ____.
A. Land, Infrastructure, Transport and Tourism
B. Internal Affairs and Communications
C. International Trade and Industry
D. Health and Welfare
E. Labor

International Trade and Industry

In the international business arena, which of the following is considered to be one of Wal-Mart's strengths?
A. Squeaky-clean reputation in the international arena
B. Internal Internet-based system
C. Ability to drive all other competitors out of a market
D. Ability to influence foreign governments
E. Outreach programs designed to placate small retailers

Internal Internet-based system

General Motors, ____, and DaimlerChrysler have created a single online site called Covisint (www.covisint.com) for purchasing automotive parts from suppliers, which is expected to save the companies millions of dollars.
A. Toyota Motor Corporation
B. Honda Motor Company
C. Ford Motor Company
D. Nissan Motor Company
E. TATA motors

Ford Motor Company

Sears, Roebuck and _____ of France have created GlobalNetXchange (www.gnx.com), a retail exchange that allows retailers and their suppliers to conduct transactions online.
A. Carrefour
B. 7-Eleven
C. Ito-Yokado
D. Plus
E. Tesco

Carrefour

_____ is/are often the approach of choice in markets with insufficient or underdeveloped distribution systems.
A. Direct selling
B. Big wholesale stores
C. Internet selling
D. Discount houses
E. Television advertising

Direct selling

Which of the following have proved to be a successful way to break the trade barrier imposed by the Japanese distribution system?
A. Direct catalog sales
B. Large wholesale stores
C. Street corner kiosks
D. Internet shopping
E. Television advertising

Direct catalog sales

Which of the following are frequently criticized for not representing the best interests of a manufacturer?
A. Global wholesalers
B. Trading companies
C. Manufacturer's representatives
D. Merchant middlemen
E. Agent middlemen

Merchant middlemen

According to the text, which of the following countries has the largest number of retailers?
A. United States
B. Argentina
C. China
D. South Africa
E. Japan

China

Retailing around the world has been in a state of active ferment for several years and the rate of change appears to be directly related to the ____.
A. literacy rate in the country
B. rate of inflation in the country
C. rate of population growth
D. stage and speed of economic development
E. dollar exchange rate for the currency of the country

stage and speed of economic development

_____ take title to the goods and buy and sell on their own account.
A. Merchant middlemen
B. Brokers
C. Buying offices
D. Export agent
E. Agent middlemen

Merchant middlemen

With reference to a distribution channel, the channel process includes all activities, beginning with the manufacturer and ending with the ____.
A. wholesaler
B. agent middlemen
C. merchant middlemen
D. retailer
E. final consumer

final consumer

Which of the following statements is true regarding agent middlemen?
A. They take title to the merchandise.
B. They assume trading risk.
C. They are less controllable by manufacturers than merchant middlemen.
D. They are frequently criticized for not representing the best interests of a manufacturer.
E. They work on commission and arrange for sales in the foreign country.

They work on commission and arrange for sales in the foreign country.

All of the following statements are true regarding merchant middlemen EXCEPT:
A. they take title to manufacturers' goods.
B. they are more controllable by manufacturers than agent middlemen.
C. they assume trading risk.
D. they are primarily concerned with sales and profit margins on their merchandise.
E. they are frequently criticized for not representing the best interests of a manufacturer.

they are more controllable by manufacturers than agent middlemen.

A major trade-off when using home-country middlemen is:
A. the large financial investment required.
B. the limited control over the entire distribution process.
C. the large managerial investments required.
D. the limited number of retailers in the foreign country who can be reached through the home-country middlemen.
E. the large amount of commission charged by the home-country middlemen.

the limited control over the entire distribution process.

Which of the following types of companies will most likely use the services provided by a home-country middleman?
A. Companies with large international sales volume
B. Companies which are experienced with the foreign markets
C. Companies which want to become involved with the complexities of international marketing
D. Companies which are willing make managerial investment in the distribution process
E. Companies which want to sell abroad with minimum financial commitment

Companies which want to sell abroad with minimum financial commitment

Another term for home-country middlemen is _____ middlemen.
A. uniform
B. agent
C. merchant
D. domestic
E. regional

domestic

IKEA, Costco, and Sears Roebuck are examples of ____.
A. export management companies
B. trading companies
C. export associations
D. global retailers
E. complimentary marketers

global retailers

James Barker is the marketing manager of a firm which has small international sales volume. He is looking for a middleman who can take responsibility for promotion of the goods, credit arrangements, physical handling, market research, and provide information on financial, patent, and licensing matters while working under the name of his company. Which of the following would be the best choice for Mr. Barker if he wants to meet his objectives?
A. A manufacturer's export agent
B. An export merchant
C. A trade representative
D. An export management company
E. A complimentary marketer

An export management company

Which of the following statements is true regarding an export management company (EMC)?
A. It acts as a middleman for firms with relatively large international volume.
B. EMCs work under their own names.
C. EMCs have direct responsibility to the parent company.
D. It acts as a middleman for companies willing to involve their own personnel in the international function.
E. EMCs seldom can afford to make the kind of market investment needed to establish deep distribution for products.

EMCs seldom can afford to make the kind of market investment needed to establish deep distribution for products.

A major disadvantage of _____ is that they seldom can afford to make the kind of market investment needed to establish deep distribution for products because they must have immediate sales payout to survive.
A. export management companies
B. trading companies
C. export associations
D. global retailers
E. complimentary marketers

export management companies

Specialization of this type of middleman in a given field often enables it to offer a level of service that could not be attained by the manufacturer without years of groundwork. This middleman acts under the name of the manufacturer as an independent marketing department. Identify the middleman in the discussion.
A. Webb-Pomerene export association
B. trading company
C. export management company
D. export agency
E. foreign sales corporation

export management company

Which of the following represents a joint export ventures through which U.S. firms can take advantage of economies of scale, spread risk, and pool their expertise?
A. Manufacturers' export agents
B. U.S. trading companies
C. Manufacturers' Retail Stores
D. Export management companies
E. Complimentary marketers

U.S. trading companies

Typically, which of the following arrangements are undertaken when a firm wants to fill out its product line or keep its seasonal distribution channels functioning throughout the year?
A. Price skimming
B. Using services of a trading company
C. Establishing a retail store
D. Using services of an export management company
E. Complimentary marketing

Complimentary marketing

For companies seeking entrance into the complicated Japanese distribution system, _____ offer one of the easiest routes to success because they virtually control distribution through all levels of channels in Japan.
A. trade representatives
B. trading companies
C. brokers
D. export management companies
E. complimentary marketers

trading companies

What is the basic function of the Export Trading Company Act?
A. It allows U.S. companies to bypass tax laws with respect to international trading.
B. It allows producers of similar products to form export trading companies.
C. It allows companies to bypass trade barriers in foreign countries.
D. It allows companies to earn the highest possible profits in foreign countries.
E. It allows companies to combine export shipments within single containers.

It allows producers of similar products to form export trading companies.

Another term that is commonly used to describe the activities of complementary marketing is:
A. backhauling.
B. demand shifting.
C. piggybacking.
D. shape shifting.
E. skimming.

piggybacking

Companies with marketing facilities or contacts in different countries with excess marketing capacity or a desire for a broader product line sometimes take on additional product lines for international distribution. The formal name for this type of marketing is:
A. skimming.
B. backhauling.
C. complementary marketing.
D. export marketing.
E. demand shifting.

complementary marketing.

A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that normally covers only one or two markets and operates on straight commission basis.
A. complementary marketer
B. export management company
C. Webb-Pomerene export association
D. global retailer
E. manufacturer's export agent

manufacturer's export agent

A(n) _____ does not serve as the producer's export department but has a short-term relationship, covers only one or two markets, and operates on a straight commission basis and they do business in their own names rather than in the name of the client.
A. manufacturers' retail store
B. trading company
C. global retailer
D. manufacturer's export agent
E. complementary marketer

manufacturer's export agent

The Webb-Pomerene Act of 1918 made it possible for American business firms to join forces in export activities without being subject to which of the following acts?
A. The Sherman Antitrust Act
B. The Federal Communications Act
C. The Federal Trade Commission Act
D. The Federal Food, Drug, and Cosmetic Act
E. The Robinson-Patman act

The Sherman Antitrust Act

A(n) _____ is a sales corporation set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property.
A. Webb-Pomerene export association
B. trading company
C. export management company
D. export agency
E. foreign sales corporation

foreign sales corporation

Which of the following is NOT a type of domestic middlemen?
A. Manufacturers' Retail Stores
B. Trading Companies
C. Foreign distributors
D. Complementary Marketers
E. Export Management Companies

Foreign distributors

The WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union that still simmers and occasionally sizzles.
A. foreign sales corporation
B. direct marketing partnerships
C. trading companies
D. export promotion company
E. Webb-Pomerene export associations

foreign sales corporation

The _____ allowed American business firms to join forces in export activities without being subject to the Sherman Antitrust Act.
A. Export Trading Company Act
B. Roebuck-Guillaume Act of 1936
C. Webb-Pomerene Act of 1918
D. North American Free Trade Agreement
E. Sarbanes-Oxley Act

Webb-Pomerene Act of 1918

A variety of factors affect choice of channels in a foreign market. All of the following points should be addressed prior to the selection process EXCEPT:
A. identify specific target markets within and across countries.
B. specify marketing goals in terms of volume, market share, and profit margin requirements.
C. specify financial and personnel commitments to the development of international distribution.
D. identify control, length of channels, terms of sale, and channel relationships.
E. identify decision-making processes and languages of prospective middlemen.

identify decision-making processes and languages of prospective middlemen.

According to the text, distribution channels vary depending on which of the following?
A. Distance from manufacturer
B. Language and dialect spoken in the target market
C. Available distribution intermediaries
D. The literacy levels in the target market
E. Per capita income in the target market

Available distribution intermediaries

Channel strategy is considered to have six specific strategic goals. These goals can be characterized as the six Cs of channel strategy. Which of the following is NOT one of these six Cs?
A. Cost
B. Coverage
C. Capacity
D. Character
E. Continuity

Capacity

One of the key elements in distribution decisions includes ____.
A. the selection of optimum container sizes
B. volume discounts and rebates
C. the functions performed by middlemen
D. the foreign language local advertising modes
E. the target market culture

the functions performed by middlemen

According to the text, one of the critical elements associated with using a particular type of middleman is ____.
A. knowledge of the culture of the target market
B. number of employees
C. mode of transportation available for moving goods
D. influence over the target market
E. capital requirements

capital requirements

In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment?
A. Export management companies
B. Trading companies
C. Export associations
D. Direct sales force
E. Complimentary marketers

Direct sales force

One of the highest costs of doing business in China is the:
A. money required for the transportation of the goods.
B. amount of money and time required for obtaining the appropriate permits.
C. cost of local advertising.
D. capital required to maintain effective distribution.
E. cost of customizing the products for the Chinese market.

capital required to maintain effective distribution.

In China, it is often necessary to use varied distribution forms to reach customers. If a company is using manufacturer's agents, a direct sales force, merchant wholesalers, and small retailers to sell goods to this massive market, which of the following Cs of channel strategy is receiving the attention of the company in its strategy process?
A. Cost
B. Control
C. Coverage
D. Capital
E. Continuity

Coverage

Which of the following modes of distribution affords the most control over the distribution channels but often at a cost that is not practical?
A. Complementary marketers
B. Direct sales force
C. Export associations
D. Trading companies
E. Export management companies

Direct sales force

Sixty percent of the Japanese population lives in the _____ market area, which essentially functions as one massive city.
A. Tokyo-Nagoya-Osaka
B. Komaki-Tokoname-Kariya
C. Nagoya-Handa-Seto
D. Nishio-Okazaki-Inazawa
E. Inuyama-Nisshin-Takahama

Tokyo-Nagoya-Osaka

Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period. This is an example of problems associated with which of the following six Cs of channel strategy?
A. Character
B. Continuity
C. Control
D. Cost
E. Capital requirement

Continuity

One of the reasons that channels of distribution often pose longevity problems is that ____.
A. most middlemen do not maintain sufficient inventory to serve customers
B. some middlemen lack product knowledge resulting in low sales volume
C. most middlemen have little loyalty to their vendors
D. most middlemen tend to slow down distribution to extract higher commissions
E. most middlemen do not have sufficient knowledge of the target market

most middlemen have little loyalty to their vendors

_____ is one of the basic subject areas that should be on a checklist of criteria for evaluating middlemen serving a market.
A. Knowledge of the product
B. Knowledge of geography or terrain
C. Knowledge of local culture and traditions
D. Productivity or volume
E. Reputation in the target market

Productivity or volume

According to the text, the search for prospective middlemen should begin with:
A. shortlisting the middlemen.
B. studying the target market.
C. evaluating the financial resources available with the manufacturing company.
D. exploring the financial investment required for using own sales force in the target market.
E. understanding the mission and vision of the manufacturing firm.

studying the target market.

Experienced exporters suggest that the only way to select a middleman is:
A. to conduct a background check on all the distributors available in the target market.
B. to issue a request-for-proposal (RFP) to all distributors in the target market and evaluate their responses.
C. consult other manufacturers of the similar products and select the distributor recommended by them.
D. consult trade organizations and select the distributor recommended by them.
E. to personally talk to ultimate users of your product to find whom they consider to be the best distributors.

to personally talk to ultimate users of your product to find whom they consider to be the best distributors

Particularly, when cultural distances are great, the company should use which of the following techniques for motivating middlemen?
A. Communication
B. Financial rewards
C. Psychological rewards
D. Company support
E. Corporate rapport

Communication

On all levels of distribution, there is a clear correlation between the middleman's _____ and sales volume produced.
A. reputation in the target market
B. motivation
C. control over the target market
D. closeness to the manufacturer
E. degree of freedom

motivation

Apex Corporation is a wholesaler for Global Electric Company in the French market. Global Electric discovered that Apex was diverting some of the goods of the Global Electric that Apex purchased to the English market where Apex could make higher profits. Apex was able to sell at cheaper prices in the English market than authorized dealers because Global Electric sold its goods at cheaper prices in France. Which of the forms of business is Apex engaged in with respect to what it is doing with GE products?
A. Black marketing
B. Parallel importing
C. Backwashing
D. Industrial piracy
E. Smuggling

Parallel importing

Parallel importing is also known as ____.
A. secondary wholesaling
B. black marketing
C. backwashing
D. industrial piracy
E. smuggling

secondary wholesaling

E-commerce is more developed in _____ than the rest of the world, partly because of the vast number of people who own personal computers and partly because of the much lower cost of access to the Internet than found elsewhere.
A. China
B. Brazil
C. Switzerland
D. South Africa
E. the United States

the United States

Technically, e-commerce is a form of ____.
A. direct selling
B. parallel selling
C. dual selling
D. mass selling
E. targeted selling

direct selling

In ____, red color is associated with socialism.
A. the United States
B. China
C. Brazil
D. Uruguay
E. Spain

Spain

_____ communications are composed of advertising, sales promotions, trade shows, personal selling, direct selling, and public relations.
A. International
B. Integrated marketing
C. Public
D. Management
E. Grapevine

Integrated marketing

Integrated marketing communications are composed of all of the following EXCEPT:
A. advertising.
B. sales promotions.
C. trade shows.
D. public relations.
E. mass customization.

mass customization.

For most companies, which of the following are the major components in the marketing communications mix?
A. Public relations and advertising
B. Direct selling and trade shows
C. Advertising and personal selling
D. Public relations and sales promotions
E. Direct selling and sales promotions

Advertising and personal selling

Which of the following has the general marketing goals of stimulating consumer purchases and improving retailer or middlemen effectiveness and cooperation?
A. Sales promotion
B. Advertising
C. Trade shows
D. Direct selling
E. Public relations

Sales promotion

Sales promotions are _____ efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase.
A. long-term
B. mid-term
C. annual
D. short-term
E. bi-annual

short-term

In-store demonstrations, samples, coupons, contests, and sweepstakes are most likely used for ____.
A. personal selling
B. sales promotions
C. trade shows
D. direct selling
E. public relations

sales promotions

All of the following are specific objectives of sales promotion EXCEPT:
A. immediate purchase.
B. consumer introduction to the store.
C. gaining retail point-of-purchase displays.
D. building brand loyalty.
E. encouraging stores to stock the product.

building brand loyalty.

An especially effective promotional tool when the product concept is new or has a very
small market share is ____.
A. sponsorship of special events such as concerts
B. sweepstakes
C. product sampling
D. contests
E. product tie-ins

product sampling

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 ____.
A. trade shows
B. direct selling
C. public relations
D. personal selling
E. sales promotion

public relations

Which of the following elements of integrated marketing communications is related to encouraging the press to cover positive stories about companies and managing unfavorable rumors, stories, and events?
A. Public relations
B. Direct selling
C. Trade shows
D. Personal selling
E. Sales promotion

Public relations

International public relations, sales promotion, and other IMC efforts work best when coordinated and reinforced with:
A. trade shows and direct selling.
B. personal selling and trade shows.
C. a consistent advertising campaign.
D. personal selling and direct selling.
E. management directive outlining costs, profit-projections, and outside accounting supervision.

a consistent advertising campaign

Which industry is the global leader in advertising expenditures?
A. Food
B. Pharmaceuticals
C. Automotive
D. Electronics, computers
E. Personal care

Automotive

Of all the elements of the marketing mix, decisions involving _____ are those most often affected by cultural differences among country markets.
A. direct selling
B. public relations
C. the Internet
D. advertising
E. sales promotion

advertising

Which of the following organizations has spent the highest amount on advertising during the years 2007 and 2008?
A. Coca-Cola Co.
B. McDonald's Corp.
C. Kraft Foods
D. Procter & Gamble Co.
E. General Motors

Procter & Gamble Co.

While developing an international advertisement campaign, which of the following is the first step of the process?
A. Compose and secure a budget based on what is required to meet goals.
B. Specify the goals of the communication.
C. Select effective media.
D. Execute the campaign.
E. Perform marketing research.

Perform marketing research.

Of all the elements of the marketing mix, decisions involving which of the following are those most often affected by cultural differences among country markets?
A. Price of the product
B. Benefits offered by the product
C. Services offered along with the product
D. The place of offering the product
E. The method of advertising the product

The method of advertising the product

Of the seven steps in developing international advertising, _____ almost always represents the most daunting task for international marketing managers.
A. developing messages
B. selecting effective media
C. executing the campaign
D. composing and securing a budget
E. specifying the goals of the communication

developing messages

Which of the following is LEAST likely to be an international advertising goal?
A. Chinese manufacturers establishing new brands as their economy expands.
B. Gillette Company attempting to gain distributor cooperation in Japan.
C. Unilever introducing a new product-line extension.
D. Aeroflot seeking to upgrade its image.
E. Coca-Cola maintaining its global brand stature.

Gillette Company attempting to gain distributor cooperation in Japan.

In many markets standardized products may be marketed globally. But, because of differences in culture, the products will require:
A. a different advertising appeal.
B. a different distribution pattern.
C. a consistent promotional message.
D. an alternative benefit-cost calculation.
E. a different packaging.

a different advertising appeal.

A market offering most likely refers to the:
A. tangible product.
B. service.
C. price of the product.
D. image of the product.
E. bundle of satisfactions the buyer receives.

bundle of satisfactions the buyer receives.

During which step of the international communications process, the receiver of the message interprets symbolism transmitted from the information source?
A. Selecting a message
B. Encoding
C. Selecting a message channel
D. Decoding
E. Identifying the sources of noise

Decoding

In the international communications process, once a message to communicate has been decided, it goes to the ____ stage.
A. feedback
B. receiver
C. message channel selection
D. decoding
E. encoding

encoding

In an international communication process carried out by a company, the sales force of the company acts as a ____.
A. decoder
B. message source
C. receiver
D. message channel
E. noise

message channel

In an international communications process, an international marketing executive with a product message to communicate acts as a ____.
A. decoder
B. message source
C. receiver
D. message channel
E. noise

message source

Which of the following elements of a communication process can be best defined as the interpretation by the receiver of the symbolism transmitted from the information source?
A. Encoding
B. Selecting a message
C. Decoding
D. Selecting a message channel
E. Evaluating the feedback

Decoding

In an advertisement of a perfume, the perfume was presented against a backdrop of rain that, for Europeans, symbolized a clean, cool, refreshing image but to Africans was a symbol of fertility. The ad prompted many viewers to ask if the perfume was effective against infertility. This miscommunication indicates a problem associated with which of the following steps of an international communication process?
A. Encoding the message
B. Decoding the message
C. Receiving the message
D. Selecting an appropriate channel of communication
E. Providing feedback

Encoding the message

Which of the following elements of a communication process refers to external influences, such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication?
A. Selecting a message source
B. Encoding
C. Selecting a message channel
D. Decoding
E. Noise

Noise

Janet is assisting the IMC manager with the design and language to be used in an upcoming promotional campaign. The manager knows what she wants to say but is having trouble coming up with the right language. Janet is trying to help her in:
A. identifying the various possible feedbacks to the message.
B. encoding the message.
C. choosing the appropriate channel for the message.
D. decoding the message.
E. minimizing noise in the communication channel.

encoding the message.

After running a series of ads promoting the benefits of her company's skin care products, Kathy learns some consumers drank her product rather than applying it to their skin. Kathy has received ____.
A. a feedback
B. an encoded message
C. a source of information
D. a decoded message
E. a noise

a feedback

Once a message, in the international communications process, has been decoded, it goes to the _____ stage.
A. feedback
B. receiver
C. message channel selection
D. encoding
E. identifying the message source

receiver

According to the text, which of the following creates a problem in the communications process at the encoding step?
A. Problems of literacy
B. Amount of budget
C. Seasonality of the product
D. Government regulations
E. Market segmentation

Problems of literacy

According to the text, problems of literacy, media availability, and types of media create challenges in the communications process at the _____ step.
A. feedback
B. decoding
C. message channel selection
D. encoding
E. message selection

encoding

With reference to a communication process, using the Internet as a medium when only a small percentage of an intended market has access to the Internet, is an example of error related to:
A. feedback.
B. decoding.
C. message channel selection.
D. encoding.
E. message selection.

message channel selection.

Decoding problems are generally caused by:
A. improper encoding.
B. poor media choice.
C. inadequate media budget.
D. poor copywriting team.
E. cultural bias.

improper encoding.

Which of the following statements about comparative advertising laws is most correct?
A. There really are no laws governing comparative advertising in the international arena.
B. Almost all laws governing this behavior are essentially the same.
C. There are laws in the Western nations governing this behavior and not in most other countries.
D. Laws vary from country to country with respect to the subject.
E. There are no laws governing comparative advertising in any country.

Laws vary from country to country with respect to the subject.

Which of the following steps of a communications process is important as a check on the effectiveness of the other steps?
A. Selecting a proper message
B. Encoding the message
C. Selecting an appropriate channel of communication
D. Decoding the message
E. Feedback

Feedback

All of the following statements are true regarding legal constraints on advertising EXCEPT:
A. in Germany, it is illegal to use any comparative terminology.
B. Chinese government has banned pigs in advertising.
C. in Kuwait, advertising is not allowed on the government-controlled TV network.
D. the European Union limits product placement in foreign programming but not EU-produced material.
E. Russian law forbids subliminal advertising.

in Kuwait, advertising is not allowed on the government-controlled TV network.

Which of the following are especially vulnerable as EU member states decide which area of regulation should apply to these services?
A. Newspaper advertising
B. Radio advertising
C. Outdoor services
D. Personal selling
E. Internet services

Internet services

_____ is one of the major barriers to effective communication through advertising.
A. Language
B. Ideology
C. Technology
D. Distance
E. Power structure

Language

According to the text, Austria is a best illustration of how media choice can be distorted due to ____.
A. literacy levels
B. government laws
C. cultural differences
D. advertising taxation
E. standard of living

advertising taxation

According to one advertising executive, "International advertising is almost uniformly dreadful mostly because people:
A. don't know how to read."
B. don't like advertising in general."
C. don't understand language and culture."
D. don't have time to watch advertisement."
E. become conditioned to ignore advertising."

don't understand language and culture."

According to the text, the only way to avoid linguistic problems in advertising communication is:
A. creating an entirely new advertisement for the new market.
B. using the best language experts for translating the advertisement.
C. developing a new version of the product for the new market.
D. in-country testing with the target consumer group.
E. avoiding verbal communication and used only facial expressions and physical gestures in the advertisement.

in-country testing with the target consumer group.

With respect to advertising, _____ is especially important when a budget is small or where there are severe production limitations.
A. color
B. language
C. technology
D. creativity
E. slogans

creativity

Which of the following statements is true regarding the cost of the media?
A. Media prices remain fixed in all the countries.
B. Agency space discounts are rarely split with the client.
C. The cost of reaching a prospect through advertising is independent of the agent's bargaining ability.
D. The per contract cost for advertisements varies widely from country to country.
E. Britain has a fixed rate card for advertising slots.

The per contract cost for advertisements varies widely from country to country.

One head of an Italian advertising agency commented about his country: "One fundamental rule. ____."
A. All consumers are alike
B. You cannot buy what you want
C. Television is always the best communication vehicle
D. Literacy is not a problem anymore
E. Only Americans like sex and humor in advertising

You cannot buy what you want

Asahi' is the largest newspaper of ____.
A. Germany
B. Spain
C. Japan
D. Mexico
E. China

Japan

The president of the Mexican National Advertisers Association charged that newspaper circulation figures are grossly exaggerated. He suggested that as a rule, agencies should:
A. divide the circulation data in two and take the result with a grain of salt.
B. avoid using newspaper as a medium of advertisement in Mexico.
C. use newspaper circulation figures from other countries and project them for Mexico.
D. consider television as the best medium of advertisement in Mexico.
E. use magazines for print advertisements rather than newspaper

divide the circulation data in two and take the result with a grain of salt.

According to the text, one of the reasons for the notably low use of foreign national consumer magazines by international advertisers is that:
A. consumers in most of the countries rarely read magazines.
B. few magazines have a large circulation and provide reliable circulation data.
C. in most international markets, consumers read American magazines.
D. international magazines are generally incompatible with company values.
E. advertising in magazines is costly as compared to any other medium of advertisement.

few magazines have a large circulation and provide reliable circulation data.

Which of the following are considered to be major communications media in most countries?
A. Newspapers and magazines
B. Radio and television
C. Newspapers and the Internet
D. Billboards and television
E. Radio and newspapers

Radio and television

_____ was the first to broadcast across Asia.
A. Star TV
B. CNN
C. ESPN
D. MTV
E. Al-Jazeera

Star TV

According to the text, one of the drawbacks of satellites is:
A. the cost of creating an advertisement with high picture quality for the satellite television.
B. the limited reach of the satellite television.
C. the monopoly of small number of satellite service providers.
D. the government regulations placed on advertisements broadcasted using satellite channels.
E. their ability to span a wide geographical region covering many different country markets.

their ability to span a wide geographical region covering many different country markets.

_____ is an innovation that will make regional advertising in diverse cultures easier than it presently is when using cable or satellite television. It allows ESPN, which offers this service, to fill visual real estate—blank walls, streets, stadium sidings—with computer-generated visuals that look like they belong in the scene.
A. Princeton Video Imaging
B. Texas Digital Imaging
C. Massachusetts Video Imaging
D. Texas Visual Imaging
E. Princeton Digital Imaging

Princeton Video Imaging

Direct mail is an unpopular medium in Chile because:
A. the literacy level in Chile is extremely low.
B. the receiver must pay for part of the cost of the direct mail piece.
C. the direct mail uses paper and hence it is considered as a threat to the environment.
D. the reach of the direct mail is extremely limited in Chile.
E. the direct mail communication in Chile is governed by complicated government regulations.

the receiver must pay for part of the cost of the direct mail piece.

It has emerged as a viable medium for advertising and should be included in a company's possible media mix. It is limited in its penetration of households globally and for consumer products, its major limitation is coverage. This media suffers from issues such as difficulty in assessing taxes, unfair competition, import duties, and privacy. Also it is difficult to control this media. Identify the media in the discussion.
A. Radio
B. Direct mail
C. Magazines
D. Newspapers
E. The Internet

The Internet

According to a survey, the most visited Web sites in France are ____.
A. Yahoo! sites
B. Microsoft sites
C. Wikipedia sites
D. T-Online sites
E. Google sites

Google sites

According to the text, for consumer products, which of the following is the major limitation of the Internet?
A. Knowledge of how to use the Internet
B. Coverage of the Internet
C. Government regulations on the use of the Internet
D. Difficulty in tracking the effectiveness of advertisements on the Internet
E. Cost of using the Internet

Cost of using the Internet

According to the text, the new social media permits consumers to ____.
A. obtain discounts on the brands they endorse on their blogs
B. obtain free internet access that is supported by brand ads
C. create content about brands whether the marketers of those brands like it or not
D. contact the manufacturer directly about warranty issues
E. become authorized virtual brand agents for the product manufacturers

create content about brands whether the marketers of those brands like it or not

Blogs, social networking, and video sharing are examples of media commonly known as ____.
A. global media
B. local media
C. popular media
D. social media
E. widespread media

social media

In which of the following countries, the average time spent on social networking sites (measured in terms of hours per user) is the highest?
A. Britain
B. United States
C. Australia
D. Spain
E. Italy

Australia

According to the text, billboards are especially useful in countries:
A. with high income levels.
B. where the laws governing the Internet are very complicated.
C. with high illiteracy rates.
D. where maximum households are below the poverty line.
E. where people prefer buying in small quantities.

with high illiteracy rates.

_____ is clearly the neon capital of the world.
A. Paris
B. Hong Kong
C. London
D. Sydney
E. Bras'lia

Hong Kong

A new medium of advertising includes private cars that are painted with advertisements for products and serve as moving billboards as they travel around. This medium of advertising known as 'Publicoche' is generally found in ____.
A. the United States
B. India
C. Thailand
D. Spain
E. Uganda

Spain

Compensation arrangements for advertising agencies throughout the world are based on the U.S. system of _____ percent commissions.
A. 5
B. 10
C. 15
D. 20
E. 25

Which of the following statements regarding how Brazilians perceive advertisements is true?
A. Most Brazilians consider ads entertaining and enjoyable.
B. Most Brazilians believe that advertising often makes them buy things they do not really need.
C. Most Brazilians believe that advertising means higher prices.
D. Most Brazilians believe that advertisements do not provide any useful information.
E. Most Brazilians believe that advertisements are often deceptive.

Most Brazilians consider ads entertaining and enjoyable.

Demands for regulation of advertising _____ is a trend appearing in both industrialized and developing countries.
A. of medicines
B. aimed at children
C. of alcohol
D. aimed at teenagers
E. of tobacco

aimed at children

The most direct tie to the customer is the:
A. product.
B. manager of the company.
C. salesperson.
D. advertising specialist.
E. public relations specialist.

salesperson

According to some experts, which of the following may be a reason that substantial reductions in field sales may occur in the future?
A. Cost of maintaining a sales team
B. Lack of security for confidential information
C. Skill-set deficiencies in the sales force
D. Advances in information technology
E. Increasing competition

Advances in information technology

Which of the following reasons would best explain why a country such as Germany allows for greater use of expatriates in international sales forces?
A. It is cheap to live there
B. The language is easy to master
C. It wants to spread its arms to the international community
D. It is an information-oriented culture
E. It is a multi-cultural society

It is an information-oriented culture

According to experts, what form of selling has the best results in Japan?
A. Expatriate selling
B. Localized selling
C. Virtual selling
D. Asian selling (i.e., personnel from China)
E. Visionary selling

Localized selling

Distribution strategies will often vary from country to country. Some markets may require a direct sales force, whereas others may not. Countries such as Japan will require the most complete local knowledge possessed only by natives. Which aspect of Japanese culture requires this feature in the sales strategy?
A. Strong traditions and taboos
B. Unfamiliarity with the English language
C. Relationship orientation
D. General suspicion of foreigners
E. Ethnocentrism

Relationship orientation

The largest personnel requirement abroad for most companies is:
A. the management team.
B. the service department.
C. the purchasing professionals.
D. the advertising specialists.
E. the sales force.

the sales force.

In which of the following scenarios is an expatriate sales force the best choice for a company?
A. When the product is customized
B. When the product is mass-marketed
C. When the product caters to a niche market
D. When the product is highly technical
E. When the product is global in nature

When the product is highly technical

Which of the following is one of the advantages of using an expatriate salesperson?
A. Greater technical training
B. Increases the diversity mix of the organizational profile
C. Usually more experienced than local nationals
D. Other-country teams are more accepting of an expatriate manager
E. Lesser risk of employee-poaching in a foreign market

Greater technical training

A(n) _____ is a person who leaves their home country to work for their domestic employer in a foreign country.
A. home-country manager
B. foreign manager
C. outsourcer
D. other-country manager
E. expatriate

expatriate

All of the following are advantages that an expatriate salesperson has in representing his or her company in a foreign market; however, one of these advantages stands out above the others. Which one is it?
A. Greater technical training
B. Better knowledge of the company and its product line
C. Proven dependability
D. Adds prestige to the product line, in the eye of the buyer
E. The ability to communicate with and influence headquarter's personnel

The ability to communicate with and influence headquarter's personnel

All of the following are disadvantages to having an expatriate salesperson in a foreign market EXCEPT:
A. high cost.
B. cultural barriers.
C. willingness to live abroad for extended periods.
D. unverified dependability.
E. legal barriers.

unverified dependability.

Which of the following is the major deterrent for executives offered an expatriate position?
A. The threat of international terrorist attacks in foreign markets
B. The loss of visibility at corporate headquarters
C. The steep increase in living costs in a foreign location
D. The lack of proper communication technology
E. The loss of deep-rooted friendships at the home-country office

The loss of visibility at corporate headquarters

What strategy do companies take to ensure that executives accept expatriate positions?
A. Promote overseas stint as a ticket to top management
B. Mandate expatriate positions for all executives
C. Shift a part of the head-office to the new location
D. Transfer a support team along with the expatriate manager
E. Find a mentor in the new country to guide the executive

Promote overseas stint as a ticket to top management

Mike Assaini has found that his ability to speak several Middle-Eastern languages is a real asset in his chosen career as a salesperson for Shell Oil. Since Mike works one foreign assignment after another and rarely returns to home base in Holland, he is called a(n):
A. rover.
B. castaway.
C. wanderer.
D. professional expatriate.
E. troubleshooter.

professional expatriate.

Because of new advances in communications technology, a new form of expatriate has emerged. What is the name of this new form of expatriate?
A. The geek expatriate
B. The virtual expatriate
C. The e-com expatriate
D. The dotcom expatriate
E. The visionary expatriate

The virtual expatriate

All of the following is true of virtual expatriates EXCEPT that they:
A. do not move to other countries.
B. don't stay in hotels.
C. make long visits.
D. are glued to their laptops and cell phones.
E. maintain their families at home.

don't stay in hotels.

The historical preference for expatriate managers and salespeople from the home country is giving way to a preference for:
A. outsourcers from the home country.
B. virtual managers and salespeople.
C. virtual expatriates.
D. local nationals.
E. visionary expatriates.

local nationals.

Which of the following makes an expatriate manager often three times costlier than their national counterparts?
A. Exchange rate variations
B. Higher taxes for earnings
C. Special cost-of-living benefits
D. Added costs for the goodwill generated
E. Thrice the average pay is the normal expatriate compensation expected

Special cost-of-living benefits

Which of the following is the main disadvantage of hiring local nationals?
A. Headquarters personnel ignore their advice.
B. Most local nationals turn out to be costlier in the long run.
C. Poaching by competition turns out to be a huge challenge.
D. Cultural differences lead to communication issues.
E. National interests conflict with the corporate strategy.

Headquarters personnel ignore their advice.

Particularly in relationship-oriented cultures such as France, Mexico, and Japan, sales representatives tend to be:
A. available only on a part-time basis.
B. on the bottom rung of the social ladder.
C. too close to customers to develop a professional selling relationship.
D. unwilling to commit to an organization for any length of time.
E. respected and held in high esteem

on the bottom rung of the social ladder.

Which of the following is the most common job in the United States?
A. Construction worker
B. Truck driver
C. Office manager
D. Personal selling
E. Teacher

Personal selling

The _____ are a group whose nationality has little to do with where they work or for whom.
A. virtual expatriates
B. expatriate managers
C. third-country nationals
D. transnational expatriates
E. local nationals

third-country nationals

The growing use of third-country nationals is, in part, a(n):
A. response to the increased availability of third-country nationals.
B. symbol of the death of nationalism.
C. acknowledgment that personal skills and motivation are international values.
D. alternative to using domestic product controls.
E. an attempt to stimulate world peace through international marketing.

acknowledgment that personal skills and motivation are international values.

Fritz Weaver is a German national working for a U.S. company in Argentina. This would be an example of which of the following types of foreign worker classifications?
A. Outsourcers
B. Global specialists
C. Global expatriates
D. Third-country nationals
E. Multi-country nationals

Third-country nationals

Which of the following external uncontrollable factor influences selection of expatriates over local nationals?
A. The host government's attitude toward foreign workers
B. Market acceptance of foreign products
C. Technical complexity of the product(s)
D. Size and spread of the customer base
E. Demographic profile of the target customer

The host government's attitude toward foreign workers

Compared to the diplomatic skills required in a transnational management position, what are the major skills people operating in the home country require?
A. Proficiency in at least two languages
B. Attributes of effective salespersons
C. People management and reporting skills
D. Quantitative skills to read market trends
E. Effective strategic planning skills

Attributes of effective salespersons

Which of the following traits of the expatriate would ensure the company to have confidence in his/her ability to make ethical decisions and commitments without constant recourse to the home office?
A. Positive outlook
B. Cultural empathy
C. Breadth of knowledge
D. Flexibility
E. Maturity

Maturity

Why do international sales representatives require lots of stamina?
A. Interacting with other-country colleagues is a stressful procedure.
B. Presentations to foreign customers are generally lengthy procedures.
C. Most of them are required to work late nights.
D. It requires lots of stressful travel and immigration procedures.
E. The new market may be physically difficult to access.

It requires lots of stressful travel and immigration procedures.

Cultural empathy means that a person is:
A. subservient to a superior culture.
B. sympathetic and understanding of a culture other than their own.
C. tolerant of inferior cultures.
D. knowledgeable in the major cultural trends, globally.
E. hostile to all cultures except his own.

sympathetic and understanding of a culture other than their own.

When hiring new personnel, most of the traits necessary for success in international marketing can be assessed by:
A. tests.
B. interviews and role-playing exercises.
C. biographical information.
D. checking references.
E. body language.

interviews and role-playing exercises.

According to a recent study, Japanese sales representatives tended to be more satisfied with their jobs when:
A. their values were consistent with those of their company.
B. they received high salaries.
C. they were better educated.
D. they had high salaries and were better educated.
E. they did not have to work abroad.

their values were consistent with those of their company.

There is evidence that a manager's _____ affects personnel decisions when hiring in the international arena.
A. age
B. sex
C. culture
D. income level
E. emotional stability

culture

Training for local personnel should require greater emphasis on all of the following EXCEPT:
A. the company.
B. selling methods.
C. technical information.
D. special foreign problems.
E. the company's products.

special foreign problems.

What explains the fact that continual training may be more important in foreign markets than in domestic ones?
A. Foreign markets are slower to adapt to innovative products
B. Cultural distance could result in dilution of core aspects of the strategy
C. Updating of newer technological innovations in the product
D. Lack of technical knowledge among the foreign salespersons
E. Lack of routine contact with the parent company

Lack of routine contact with the parent company

Which of the following is suggested to make home-office personnel more aware of problems of foreign operations?
A. Cross-cultural training
B. Global selling techniques
C. Newer technical skills
D. Telecommuting and teleconferencing skills
E. Email and presentation skills

Cross-cultural training

In a study, when asked to rate the rewards from work, Japanese and American salespersons showed surprising similarity barring one aspect which the Japanese rated as more important than what their American counterparts did. Identify the one from the following.
A. Job security
B. Promotion
C. Feeling of worthwhile accomplishment
D. Social recognition (sales club awards)
E. Personal growth and development

Social recognition (sales club awards)

Which of the following reward areas scores the highest among American salespeople?
A. Job security
B. Promotion
C. Merit increase with pay
D. Feeling of worthwhile accomplishment
E. Social recognition (sales club awards)

Merit increase with pay

Considering the specific characteristics of Japan's culture, which of the following strategies might be used as a motivator in Japanese organizations?
A. Individual rewards
B. Group bonus schemes
C. Early promotion opportunities
D. Individual commission system
E. Merit increase in pay

Group bonus schemes

Which of the following represents one of the greatest fears of expatriate managers?
A. They will forget their own culture and traditions.
B. They might be stressed out in the new market.
C. Their product(s) might be unsuitable in the new market.
D. They will be forgotten by the home office.
E. Colleagues in the foreign country will be hostile.

They will be forgotten by the home office.

Overseas premiums, paid if the family does not go along, are called:
A. resettlement claims.
B. family compensation.
C. displacement allowances.
D. fringe benefits.
E. separation allowances.

separation allowances.

Which of the following agencies/bodies is actively involved in setting rules about compensation (even for sales people) in Europe?
A. Pension committees
B. Work councils
C. International Labour Organization
D. The European Union
E. The WTO

Work councils

Which of the following is true of sales compensation practices across the globe?
A. Most Asian MNCs have adopted the U.S. system with its emphasis on commissions based on individual performance.
B. Government intervention in pay determination aimed at leveling pay scales, is gaining popularity in European countries.
C. A majority (nearly 75 percent) of multinational companies describe their sales compensation plans as global in nature.
D. The International Labour Organization is playing a key role in determining compensation practices worldwide.
E. Most companies establish sales compensation practices locally.

Most companies establish sales compensation practices locally.

The primary control tool used by American sales managers is:
A. the threat of termination.
B. the quota system.
C. the incentive system.
D. the attraction of a foreign assignment.
E. tolerance and patience.

the incentive system.

IBM's revamping of its sales compensation scheme led to some valuable information. Which of the following is NOT one of them?
A. Do involve representatives from key countries.
B. Do allow local managers to decide the mix between base and incentive pay.
C. Do use consistent performance measures.
D. Do allow local countries flexibility in implementations.
E. Do assume that cultural differences can be managed through the incentive plan.

Do assume that cultural differences can be managed through the incentive plan.

Unlike the Japanese, Americans sales managers do not have to worry about the problem of how to motivate poor performers. Why?
A. The group incentive system balances pay differences and thus is motivating enough.
B. Companies are more focused on long-term loyalty and are willing to compromise on performance initially.
C. They are automatically shifted to areas where their performance levels could meet expectations.
D. The system of peer-mentoring takes care of progress of low performers.
E. The team usually does not have any low performers as they quit or are fired.

The team usually does not have any low performers as they quit or are fired.

What are the most frequently mentioned reasons for a manager to refuse a foreign assignment?
A. Compensation
B. Destination of the assignment
C. Fear of travel and its hardships
D. Concerns for career and family
E. Dislike of foreigners

Concerns for career and family

Better qualified and ambitious personnel decline to go abroad because sometimes expatriate positions do not have clear evidence of advance planning to protect career development. This "out of sight, out of mind" fear is closely linked to the problems of:
A. conflict of interests.
B. acculturation.
C. skill redundancy.
D. variable compensation.
E. repatriation.

repatriation

Which of the following is the single most important reason for expatriate dissatisfaction?
A. Unsuccessful family adjustment
B. Cultural conflict in the foreign country
C. Non-cooperation of foreign colleagues
D. Communication issues with home-country head quarters
E. Redundant/mismatching skills in a foreign country

Unsuccessful family adjustment

Which of the following is the primary reason for an expatriate's failure to function effectively in a foreign assignment?
A. Differing customer expectations on product features
B. Lack of synergy owing to ineffective team communication
C. Ineffectiveness of home-country skills in the foreign country
D. Inability of the manager's spouse to adjust to a different environment
E. Cultural differences leading to conflicts of interest

Inability of the manager's spouse to adjust to a different environment

Which of the following differentiates companies with least amount of returnee attrition from those with the highest attrition?
A. Specialized expatriate department
B. Personal career planning
C. Continued cultural training
D. Increased compensation
E. Family migration planning

Personal career planning

Assuming that the international marketer has produced the right product, initiated the proper channel of distribution, and promoted goods and services correctly, the effort can fail badly if the international marketer fails to: (pick the best answer)
A. inform the host government of all its marketing objectives.
B. properly price the goods or services.
C. work through union representatives.
D. consider the environmental impact of its goods or services.
E. deliver the product to the correct place at the correct time.

properly price the goods or services.

In general, price decisions are viewed in two ways. Which of the following is one of them?
A. Pricing is often beyond the control of a company.
B. Pricing is more a phenomenon of luck than planning.
C. Pricing is an active instrument of accomplishing marketing objectives.
D. Pricing is a function of product decisions.
E. Pricing is a function of promotion decisions.

Pricing is an active instrument of accomplishing marketing objectives.

The company that follows the approach of viewing prices as an active instrument:
A. views its export sales as passive contributions to sales volume.
B. sets prices to achieve targeted returns on profit.
C. places a low priority on foreign business.
D. follows market prices.
E. probably exports only excess inventory.

sets prices to achieve targeted returns on profit.

The company that follows the approach of pricing as a static element:
A. views its export sales as proactive contributions to sales volume.
B. sets prices to a specific objective such as targeted market shares.
C. places a low priority on foreign business.
D. sets prices to achieve a specific objective.
E. does not export any excess inventory.

places a low priority on foreign business.

The Floral Group, an importing organization in New York, has just bought an excessive amount of perfume from perfume manufacturer in Paris. Unknown to the perfume manufacturer, the Floral Group has sold 25 percent of its order to distributors in France that have been unable to purchase any products from the perfume manufacturer. Which of the following best describes the transaction that has just taken place?
A. Black-listed importing
B. Direct importing
C. Circular importing
D. Co-mingled importing
E. Parallel importing

Parallel importing

The possibility of a _____ market occurs whenever price differences are greater than the cost of transportation between two markets.
A. black-listed
B. direct
C. circular
D. co-mingled
E. parallel

parallel

Which of the following, because it encourages retailers to stock large assortments, often creates a favorable condition for parallel importing?
A. Exclusive distribution
B. Selective distribution
C. Intensive distribution
D. Global distribution
E. Dual distribution

Exclusive distribution

One of the unscrupulous practices that allows parallel importing to function is when freight forwarders:
A. buy black-market goods.
B. send fake paperwork to manufacturers about the final destination of products they handle.
C. double the price of goods to retailers.
D. steal portions of a consignment.
E. fail to pay their outstanding invoices in a timely manner.

send fake paperwork to manufacturers about the final destination of products they handle.

Firms unfamiliar with overseas marketing and firms producing industrial goods orient their pricing solely on:
A. cultural differences in perceptions of pricing.
B. market segmentation from market to market.
C. a cost basis.
D. market segmentation from country to country.
E. competitive pricing in the marketplace.

a cost basis.

In _____ pricing, the firm is concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets.
A. full-cost
B. fixed-cost
C. variable-cost
D. demand-based
E. supply-based

variable-cost

_____ pricing is a practical approach to pricing when a company has high fixed costs and unused production capacity.
A. Full-cost
B. Cost-plus
C. Marginal-cost
D. Demand-based
E. Supply-based

Marginal-cost

In _____ pricing, the philosophy is that no unit of a similar product is different from any other unit in terms of cost and that each unit must bear its full share of the total fixed and variable cost.
A. full-cost
B. fixed-cost
C. variable-cost
D. demand-based
E. supply-based

full-cost

This approach to pricing is suitable when a company has high variable costs relative to its fixed costs.
A. Full-cost
B. Marginal-cost
C. Cost-plus
D. Demand-based
E. Supply-based

Full-cost

Traditionally, the decision of which pricing policy firms should follow depends on all of the following EXCEPT:
A. the level of competition.
B. environmental changes.
C. the innovativeness of the product.
D. market characteristics.
E. company characteristics.

environmental changes.

If a company has as its objective to reach a market segment that is relatively price insensitive and thus willing to pay a premium price for the value received, it will most likely use a pricing strategy called:
A. penetration pricing.
B. everyday low pricing.
C. value-based pricing.
D. skimming pricing.
E. oligopolistic pricing.

skimming pricing.

If limited supply exists, a company may follow a _____ approach to maximize revenue and to match demand to supply.
A. penetration pricing
B. psychological pricing
C. predatory pricing
D. premium pricing
E. skimming

skimming

If a company has as its objective to stimulate market growth and capture market share by deliberately offering products at low prices, it will most likely use a pricing strategy called:
A. penetration pricing.
B. escalator pricing.
C. prestige pricing.
D. skimming pricing.
E. oligopolistic pricing.

penetration pricing.

_____ pricing most often is used to acquire and hold share of market as a competitive maneuver.
A. Penetration
B. Psychological
C. Bundle
D. Skimming
E. Premium

Penetration

In most cases, the reason that products which cost relatively little in one country cost more in another is:
A. profiteering.
B. inadequate demand.
C. inelastic demand.
D. elastic demand.
E. the high costs of exporting.

the high costs of exporting.

The added costs incurred as a result of exporting products from one country to another are called:
A. price deflation.
B. pricing mechanisms.
C. price escalation.
D. price gouging.
E. price translation.

price escalation.

A(n) _____ duty is a flat charge per physical unit imported, such as 15 cents per bushel of rye.
A. ad valorem
B. compound
C. prohibitive
D. alternative
E. specific

specific

_____ duties are levied as a percentage of the value of the goods imported, such as 20 percent of the value of imported watches.
A. Specific
B. Protective
C. Prohibitive
D. Ad valorem
E. Compound

Ad valorem

_____ are the primary discriminatory tax that must be taken into account in reckoning with foreign competition.
A. Transfer taxes
B. Tariffs
C. Tolls
D. Excises
E. Inflation taxes

Tariffs

Sales at discount stores grew by 78 percent in the late 1990s in Japan. The reason for this remarkable increase was the _____ that Japan experienced in that time period.
A. deflation
B. inflation
C. economic boom
D. population increase
E. population decrease

deflation

In a(n) _____ market, it is essential for a company to keep prices low and raise brand value to win the trust of consumers.
A. stagflationary
B. inflationary
C. hyperinflationary
D. deflationary
E. devaluationary

deflationary

What is the best way to describe the relationship of international currencies to one another?
A. All currencies are related to the dollar for contractual purposes.
B. There is a stable standard in the world against which all other currencies are pegged.
C. All major currencies are free floating relative to one another.
D. The UN mandates currency valuation.
E. The World Bank mandates currency valuation.

All major currencies are free floating relative to one another.

When the value of the dollar is weak relative to the buyer's currency, companies generally employ _____.
A. competition-based pricing
B. demand-based pricing
C. supply-based pricing
D. psychological pricing
E. cost-plus pricing

cost-plus pricing

Currency exchange rate swings are considered by many global companies to be a(n):
A. opportunity for windfall profits.
B. uncontrollable without a strong U.S. dollar.
C. standard seasonal variation.
D. cost of doing business.
E. major pricing problem.

major pricing problem.

In most countries, channels are _____ and middleman margins _____ than is customary in the United States.
A. longer; higher
B. shorter; higher
C. longer; lower
D. shorter; lower
E. bigger; smaller

longer; higher

One important reason for manufacturing in a third country is an attempt to _____ and thus price escalation.
A. increase the number of successful product introductions
B. deliver products to market in half the time
C. continue to increase margins annually
D. improve reliability
E. reduce manufacturing costs

reduce manufacturing costs

China is emerging as a global manufacturing powerhouse backed by all of the following EXCEPT:
A. an inexpensive labor force.
B. rapidly improving production quality.
C. new sources of capital.
D. a deliberately overvalued currency.
E. a more dynamic private sector.

a deliberately overvalued currency.

Lowering manufacturing costs can often have a double benefit: The lower price to the buyer may also mean lower tariffs, because most tariffs are levied on a(n) _____ basis.
A. specific
B. alternative
C. prohibitive
D. compound
E. ad valorem

ad valorem

In Russia, Johnson & Johnson's 2-in-1 Shower Gel is considered to be a cosmetic (20 percent tariff). J&J would like it to be considered as a soap substitute (15 percent tariff). This points out which of the following strategies that companies generally prefer in foreign markets with respect to tariffs?
A. Shift the demand for the high tariff product.
B. Ask for reclassification of the product to a lower customs classification.
C. Question the host country's definitions.
D. Withdraw the product from a country that is obviously ripping-off manufacturers.
E. Switch to typical generic labeling.

Ask for reclassification of the product to a lower customs classification.

A foreign trade zone is an important method for controlling which of the following?
A. Theft
B. Labor problems at home
C. Price escalation
D. Profiteering
E. Deflation

Price escalation

Drew's company imports materials and parts into an FTZ within the United States and then exports finished products to other countries. Her company will have to pay:
A. tariffs based on the value of the materials.
B. tariffs based on the value of the parts.
C. tariffs based on the value of the parts and materials.
D. tariffs based on the value of the finished products when they leave the country.
E. no tariffs.

no tariffs.

Which of the following is true about free trade zones (FTZs)?
A. In an FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the country.
B. More than 500 FTZs operate throughout the world, processing imported goods.
C. An FTZ is, in essence, a taxable enclave and considered part of the country as far as import regulations are concerned.
D. When an item leaves an FTZ and is imported officially into the home country of the FTZ, all duties and regulations are imposed.
E. Utilizing FTZs typically control price escalation resulting from the layers of taxes, duties, surcharges, and freight charges.

In an FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the country.

Which of the following is a way that a company can lower costs by shipping unassembled goods to an FTZ in an importing country?
A. Have components manufactured in several countries and ship directly to distributor for assembly to lower manufacturing costs.
B. Reduce total shipment quantity count by reassembling goods onboard ocean vessel to reduce ocean transportation rates.
C. Declare components as obsolete inventory with no market value to lower import duties.
D. Tariffs may be lower because duties are typically assessed at a lower rate for unassembled versus assembled goods.
E. Ship smaller components by air carrier and larger components by ocean freight to reduce overall transportation costs.

Tariffs may be lower because duties are typically assessed at a lower rate for unassembled versus assembled goods.

Identify a way by which a company can lower costs by shipping unassembled goods to an FTZ in an importing country.
A. Ship smaller components by air carrier and larger components by ocean freight to reduce overall transportation costs.
B. If labor costs are lower in the importing country, substantial savings may be realized in the final product cost.
C. Have components manufactured in several countries and ship directly to distributor for assembly to lower manufacturing costs.
D. Declare components as obsolete inventory with no market value to lower import duties.
E. Reduce total shipment quantity count by reassembling goods onboard ocean vessel to reduce ocean transportation rates.

If labor costs are lower in the importing country, substantial savings may be realized in the final product cost.

A company can lower costs by shipping unassembled goods to an FTZ in an importing country through which of the following ways?
A. Reduce total shipment quantity count by reassembling goods onboard ocean vessel to reduce ocean transportation rates.
B. Declare components as obsolete inventory with no market value to lower import duties.
C. Ocean transportation rates are affected by weight and volume; unassembled goods may qualify for lower freight rates.
D. Ship smaller components by air carrier and larger components by ocean freight to reduce overall transportation costs.
E. Have components manufactured in several countries and ship directly to distributor for assembly to lower manufacturing costs.

Ocean transportation rates are affected by weight and volume; unassembled goods may qualify for lower freight rates.

One approach to defining the pricing policy of dumping is to say that it is a case where a product is sold in the international arena:
A. below the cost of production.
B. to only those that can pay for it.
C. to get rid of excess supply.
D. to get rid of old or useless merchandise.
E. to rid the domestic market of potentially harmful substances and products.

below the cost of production.

What is the function of a countervailing duty?
A. To balance revenues against costs.
B. To restrict the amount a country will import.
C. To provide revenues for someone who uses parallel imports as a growth strategy.
D. To expand the amount a country will import.
E. To permit the use of foreign currency within the country.

To restrict the amount a country will import.

A ____, which restricts the amount a country will import, may be imposed on foreign goods benefiting from subsidies, whether in production, export, or transportation.
A. trigger volume
B. trigger price
C. minimum access volume
D. market access opportunity
E. substantial cause

minimum access volume

For _____ duties to be invoked, it must be shown that prices are lower in the importing country than in the exporting country and that producers in the importing country are being directly harmed by the dumping.
A. countertrade
B. domestic protection
C. countervailing
D. foreign practices
E. import restriction

countervailing

In a classic case of dumping, prices are _____ in the home-country market and _____ in foreign markets.
A. increased; sustained
B. sustained; increased
C. maintained; reduced
D. increased; reduced
E. reduced; increased

maintained; reduced

Assembly in the importing country is a way companies attempt to lower prices and avoid dumping charges. These assembly plants are known as _____ plants.
A. antidumping
B. screwdriver
C. importing
D. exporting
E. free labor

screwdriver

The United States and _____ have been the most ardent users of antidumping duties.
A. Mercosur
B. China
C. European Union
D. Canada
E. ASEAN

European Union

An important selling technique to alleviate high prices and capital shortages for capital equipment is the _____ system.
A. leasing
B. anti-dumping
C. direct buy-back
D. consignment
E. rental

leasing

Which of the following would be considered to be an advantage of leasing rather than owning?
A. Lease revenue tends to fluctuate greatly
B. Leased equipment rarely breaks down
C. Leasing helps guarantee better maintenance and service on overseas equipment
D. Leasing keeps companies from using experimental equipment
E. Leasing allows immediate use

Leasing helps guarantee better maintenance and service on overseas equipment

When PepsiCo first began to market Pepsi Cola in Russia, it was asked to accept an equal amount of Russian vodka as payment in return for permission to sell Pepsi Cola. The formal name for this trading strategy is called:
A. bargaining.
B. countervailing trade.
C. buy-back.
D. countertrade.
E. bribery.

countertrade

If a company is willing to accept countertrade in a foreign market, it often gives the company a:
A. problem with asset management.
B. competitive advantage.
C. tax problem in its home country.
D. greater loss of revenue.
E. poor reputation for nonethical activity.

competitive advantage

Countertrade is often used by international marketers to gain entry into a country. PepsiCo used this strategy when it agreed to:
A. offer a more lucrative contract than rival Coca-Cola.
B. package its Russian products in red rather than blue packages.
C. exchange Pepsi syrup for Russian vodka.
D. pressurize the U.S. government into giving PepsiCo an exclusive contract with Russia.
E. merge with KFC and Taco Bell.

exchange Pepsi syrup for Russian vodka.

The crucial problem confronting a seller in a countertrade negotiation is determining the value of and _____ for the goods offered.
A. delivery method
B. warranties
C. insurance
D. potential demand
E. the cost

potential demand

What do barter houses do?
A. Specialize in trading goods acquired through barter arrangements
B. Buy goods from producers through barter arrangements
C. Buy and hold bartered goods for resellers
D. Insure any barter goods
E. Auction goods for sellers

Specialize in trading goods acquired through barter arrangements

_____ are the primary outside source of aid for companies beset by the uncertainty of a countertrade.
A. Auction quarters
B. Barter houses
C. Trade camps
D. Swap centers
E. Switch hubs

Barter houses

In general, the end goal of all _____ pricing activities is to reduce the impact of price competition or eliminate it.
A. reciprocal
B. administered
C. predatory
D. premium
E. skimming

administered

_____ by business is not viewed as an acceptable practice, but when governments enter the field of price administration, they presume to do it for the general welfare to lessen the effects of "destructive" competition.
A. Product bundling
B. Exclusive dealing
C. Predatory pricing
D. Price fixing
E. Monopolization

Price fixing

A _____ exists when various companies producing similar products or services work together to control markets for the types of goods and services they produce.
A. cabal
B. monopoly
C. cartel
D. production association
E. vertical combine

cartel

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

open account.

Except for cash in advance, _____ afford(s) the greatest degree of protection for the seller.
A. open accounts
B. letters of credit
C. bills of exchange
D. factoring
E. forfaiting

letters of credit

A(n) _____ means that once the seller has accepted the credit, the buyer cannot alter it in any way without permission of the seller.
A. open account
B. irrevocable letter of credit
C. bill of lading
D. bill of exchange
E. forfaiting

irrevocable letter of credit

With ____, the seller assumes all risk until the actual dollars are received.
A. open accounts
B. irrevocable letters of credit
C. dollar drafts
D. factoring
E. forfaiting

dollar drafts

Although full payment in advance is employed infrequently, partial payment (from ______ to _____ percent) in advance is not unusual when the character of the merchandise is such that an incomplete contract can result in heavy loss.
A. 5; 10
B. 10; 20
C. 60; 75
D. 25; 50
E. 25; 30

25; 50

Which of the following obviously leave(s) sellers in a position where most of the problems of international commercial finance work to their disadvantage?
A. Letters of credit
B. Dollar drafts
C. Forfaiting
D. Cash-in-advance
E. Open accounts

Open accounts

In ____, the seller makes a one-time arrangement with a bank to buy a specific account receivable.
A. forfaiting
B. factoring
C. using bills of exchange
D. using cash-in-advance
E. open accounts

forfaiting

In ____, a company has an ongoing relationship with a bank that routinely buys its short-term accounts receivable at a discount.
A. forfaiting
B. factoring
C. using bills of exchange
D. using cash-in-advance
E. open accounts

factoring

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