Deck 12: International Markets: Assessment and Entry Modes

Question 1

Turnkey projects export technology,management expertise,and capital equipment.

Answer 1

True
Explanation:

Question 2

In environmental scanning the firm scans the world for environmental forces that might affect it.

Answer 2

True

Question 3

Projections for future dollar value of a product are part of the initial screening.

Answer 3

True

Question 4

During the second screening,analysts are highly concerned with inflation trends,exchange rates,and interest rates.

Question 5

Climate,topography,and natural resources refer to environmental scanning.

Question 6

Imports to a country can be a good indicator of the potential demand for a new product.

Question 7

Environmental scanning provides the firm with information about world opportunities and threats.

Question 8

Assessing the basic need potential and foreign trade and investment potential are both part of the initial screening.

Question 9

Entering foreign markets may be described by two levels of involvement: nonequity and equity-based.

Question 10

Trade flows are good indicators of the magnitude of present sales.

Question 11

Country and region are units of analysis for market screening.

Question 12

During the second screening,analysts are highly concerned with inflation rates,education levels,and entry barriers.

Question 13

Knowing the number of imports to a specific country gives a firm a complete measure of market potential.

Question 14

By conducting environmental scanning,a firm can monitor the natural resources around the world that may affect it.

Question 15

In general,when the basic need for a product is absent,no reasonable expenditure of effort is likely to enable a firm to market its goods or services.

Question 16

Country and segment are units of analysis for market screening.

Question 17

Market screening is a modified version of environmental scanning in which the firm studies the stock market to eliminate the less desirable markets.

Question 18

The means of supplying overseas markets-exporting to and production in those markets-depend on non-equity modes of entry.

Question 19

Direct exporting is an excellent means of getting a feel for international business without committing a great amount of human or financial resources.

Question 20

Analysis of the paying habits of customers is studied as part of the sociocultural forces screening.

Question 21

In a joint venture,a management contract is often used as a non-ownership-based control mechanism by any of the firms when an agreement cannot be reached.

Question 22

A management contract is used only by manufacturing companies to earn income by providing expertise for a fee.

Question 23

In what order is the selection of foreign markets process presented in the textbook?

A) Basic needs, sociocultural, economic/financial, political, and competitive
B) Basic needs, economic/financial, political, sociocultural, and competitive
C) Basic needs, political, economic/financial, competitive, and sociocultural
D) Basic needs, competitive, political, economic/financial, and sociocultural

Question 24

Some firms grant licenses to other firms in order to reduce the competitive level of a potential rival,especially in the fashion industry.

Question 25

Market size,market growth rate,and e-commerce indexes are all part of

A) market factors.
B) trend analysis.
C) cluster analysis.
D) market indicators.

Question 26

Licensing refers to a contractual agreement in which the licensor grants access to its patents,trade secrets,or technology for a fee paid by the licensee.

Question 27

If a firm decides to become involved in overseas manufacturing it has two options: (1)wholly owned subsidiary and (2)joint venture.

Question 28

All of the following are part of the e-commerce readiness index except

A) mobile phones per 1,000.
B) number of PCs per 1,000.
C) electricity consumption.
D) Internet host per million people.

Question 29

Producing a factory ready to operate is similar to producing a "turnkey project."

Question 30

Market screening eliminates

A) undesirable products.
B) markets that are judged to be less attractive.
C) environmental forces.
D) competition.

Question 31

Market indicators and market factors measure market demand.

Question 32

Market screening is needed to

A) reduce the nearly 200 countries to pinpoint the most attractive prospects.
B) show films in the best regional markets.
C) prevent noncompetitive firms from joining alliances.
D) filter out potential competitors.

Question 33

When the government of a host country requires companies to have some local participation,foreign firms must engage in strategic alliances with local owners.

Question 34

Another name for contract manufacturing is "foreign direct investment without investment."

Question 35

Industry association listings or specialized trade journals are good sources when conducting

A) economic/financial screening.
B) competitive screening.
C) basic needs screening.
D) sociocultural screening.

Question 36

Credit availability,paying habits of customers,and rates of return are considered in the

A) first screening.
B) second screening.
C) third screening.
D) fourth screening.

Question 37

The licensee generally pays a fixed sum when signing a license agreement and then royalties over the life of the contract.

Question 38

Environmental scanning is mostly used

A) during the planning process to obtain information on opportunities and threats.
B) to gather information on market weaknesses.
C) to determine triple bottom-line report data.
D) to predict weather conditions in the agricultural sector.

Question 39

The analyst is mostly concerned with which of the following during the second screening?

A) Trends in inflation, interest rates, exchange rates
B) Banking legislation and regulation
C) Market growth
D) Consumer profile

Question 40

Market screening is divided into which of the following:

A) Environmental and contextual screening
B) Country and segment screening
C) Competitive and price screening
D) Regional and environmental screening

Question 41

Methods for supplying foreign markets may be summarized in just two activities:

A) Exporting to a foreign market and manufacturing in it.
B) Exporting goods to a foreign market and exporting services to it.
C) Manufacturing in a foreign market and licensing technology.
D) Establishing joint ventures and wholly owned production facilities.

Question 42

The principal ingredient that a franchiser exports is

A) a brand name, marketing strategy, and procedures.
B) local Remember and expertise.
C) commercial goods.
D) accounting methods and legal assistance.

Question 43

In 2012 to 2013,foreign firms licensing from companies in the United States spent

A) $40 billion.
B) 25 percent as much as in an earlier period.
C) nine times as much as in the previous year.
D) one-ninth as much as earlier, due to the financial crisis.

Question 44

When a licensing agreement is made,

A) the licensee receives expertise from another company.
B) the licensee obtains permission from the government to do business in a foreign country.
C) the licensor is a foreign government which grants the license.
D) the licensor pays to receive assistance from the licensee.

Question 45

Mail surveys can be a difficult foreign market research tool because

A) mail deliveries can take weeks and have low response rates.
B) commercially generated mail is not welcomed in some areas.
C) response validity is lower on mail surveys.
D) response bias may be excessive or require payment.

Question 46

Entry barriers,profit remittance barriers,and policy stability are all part of the

A) first screening.
B) second screening.
C) third screening.
D) fourth screening.

Question 47

Most companies enter a market in stages.Which of the following is not listed in the textbook as a stage of market entry?

A) Exporting
B) Establishment of a foreign sales company
C) A website
D) Manufacturing

Question 48

The final step in the screening process will generally include

A) a field trip.
B) the use of primary data.
C) a cost-benefit analysis.
D) a visit to a trade fair.

Question 49

There are several criteria for segmenting markets.Which of the following is not a criterion for segmenting?

A) Definable
B) Accessible
C) Small
D) Actionable

Question 50

A joint venture may be

A) a corporate entity formed between an international firm and local owners.
B) a corporate entity acquiring a local business.
C) a legal undertaking to mentor a developing company's personnel.
D) a shared effort to research consumer taste.

Question 51

A turnkey project includes

A) plant design and technology supply.
B) direct selling.
C) government training.
D) construction up to but not including trial runs.

Question 52

The market growth rate index is measured by

A) average growth rate in commercial energy + real growth rate in GDP.
B) real growth rate in commercial energy + real growth rate in GDP.
C) average growth rate in commercial energy + average growth rate in GDP.
D) real growth rate in commercial energy + average growth rate in GDP.

Question 53

Cultural problems and technical difficulties cause problems

A) when preparing for field trips.
B) in the collection of secondary data.
C) in the collection of primary data.
D) during the economic/financial screening.

Question 54

According to the text,management contracts usually stipulate that

A) a fee be paid to the firm providing the management expertise.
B) 30 to 50 percent of sales belong to the licensee.
C) 30 to 50 percent of revenues belong to the licensor.
D) the contract be annual with renewal options.

Question 55

McDonald's,KFC,and Subway are examples of

A) joint ventures.
B) licensing.
C) franchising.
D) strategic alliances.

Question 56

Companies wishing to sell internationally with minimal risk usually begin with

A) exporting directly.
B) local manufacturing.
C) establishing a local sales company.
D) licensing.

Question 57

By means of a licensing agreement,

A) an international firm receives permission from a foreign government to set up a subsidiary in that country.
B) one firm grants to another the right to use stipulated parts of its expertise.
C) a foreign company receives products made for it by another company.
D) one firm grants to another the right to use all of its expertise.

Question 58

Franchising is a form of

A) contract management.
B) licensing.
C) contract manufacturing.
D) joint venture.

Question 59

Which of the following does not organize trade missions?

A) Export-oriented organization
B) State government
C) Department of commerce
D) Regional open markets

Question 60

Licensing provides income for

A) fashion designers and IT companies.
B) turnkey projects.
C) startup firms
D) domestic sales.

Question 61

The FT900 is a

A) U.S. Department of Commerce monthly report on trade.
B) measure of quality levels necessary for the target market.
C) financial measure of disposable income.
D) stock market index that is keyed to imports.

Question 62

Country screening differs from segment screening in that

A) it looks at the country level, while segment screening is international.
B) there is no real difference, just terminology differences.
C) it looks at the country level, while segment screening is within the country.
D) segment screening is larger than country screening.

Question 63

Basic need potential can be assessed

A) using data obtainable from standard sources.
B) by visiting the market and doing on-the-ground research.
C) by doing calculations on present imports.
D) by examining product substitutions.

Question 64

Most _____________ are familiar with market factors for specific markets.

A) marketing researchers
B) tax authorities
C) university marketing professors
D) business owners

Question 65

_____________ uses market data to estimate future values.

A) Trend analysis
B) A least developed organization
C) A licensee
D) Market segmentation

Question 66

Imports

A) do not completely measure a market's potential.
B) completely measure a market's potential.
C) are not related to a market's potential.
D) do not reflect the effects of nontariff barriers and other government actions.

Question 67

Although there are many forms of strategic alliances,the alliances are often between:

A) customers, competitors, and suppliers.
B) exporters and importers.
C) domestic fashion designers, for branding.
D) internal departments of the company.

Question 68

Trend analysis assumes that

A) past conditions affecting the dependent variable will remain constant.
B) future conditions will modify the dependent variable.
C) the historical data are accurate.
D) researchers are objective in their estimates.

Question 69

Hilton and Delta provide assistance to other international companies,an example of

A) a joint venture.
B) a management contract.
C) a strategic alliance.
D) contract manufacturing.

Question 70

Channels of distribution are included in

A) the fifth screening.
B) both controllable and uncontrollable variables.
C) the controllable variables category.
D) joint ventures.

Question 71

Market factors are similar to market indicators except that

A) they tend to correlate with the market demand for a given product.
B) indicators are an international measure.
C) factors are more general and domestic.
D) they are less reliable.

Question 72

Strategic alliances are

A) partnerships between competitors, customers, or suppliers that may take various forms.
B) another name for a growth triangle.
C) arbitration.
D) another name for joint ventures.

Question 73

International firms employ contracted manufacturing

A) as a means of entering a foreign market without investing in plant facilities.
B) to increase their export earnings.
C) to establish tax havens and manage location of profits.
D) as a means of direct foreign investment.

Question 74

The basic needs potential is

A) a screening of the market's need for the good or service.
B) an assessment of the quality of life and level of economic development.
C) a measure of the market size.
D) an assessment of the purchase to potential ratio.

Question 75

According to the text,a market's potential for new products can be measured by

A) import levels.
B) standard of living.
C) disposable income.
D) xenophobic indices.

Question 76

The basic needs potential may be dependent on

A) climate and topography.
B) export availability.
C) consumption rates.
D) sample availability.

Question 77

Import data indicate only

A) that a market has been buying a certain product from abroad.
B) the standard of living of a market.
C) that market expansion may be a possibility.
D) that there are sophisticated segments of the market.

Question 78

Political and legal forces

A) classify a lot of information into meaningful groups.
B) allow for larger product lines from smaller groupings.
C) are part of the third screening for market entry.
D) are external to the company's concerns.

Question 79

Marketers use _____________ to identify a group of markets where a single promotional approach can be used.

A) cluster analysis
B) trend analysis
C) retrograde statistical analysis
D) estimates combined with expatriate opinions

Question 80

According to the text,a management contract is useful for

A) joint ventures and wholly owned subsidiaries.
B) earning money by branding.
C) turnkey projects.
D) import stimulation in the host country.