International Market Entry Strategies
Exam Answer Key
Course Introduction
International Market Entry Strategies explores the various methods companies use to expand their operations into foreign markets. The course examines decision-making processes for selecting appropriate entry modes, including exporting, licensing, franchising, joint ventures, and wholly-owned subsidiaries. Students will analyze the risks, benefits, and challenges associated with each strategy, considering cultural, economic, legal, and political factors that affect international business ventures. Real-world case studies and practical frameworks will be used to guide students in evaluating market potential, developing entry plans, and implementing strategies that align with organizational goals.
Recommended Textbook
International Marketing 15th Edition by Philip; Gilly
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19 Chapters
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Page 2
Chapter 1: The Scope and Challenge of International Marketing
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Sample Questions
Q1) Why is the international marketer's task more difficult than that of the domestic marketer?
Answer: The international marketer's task is more complicated than that of the domestic marketer because the international marketer must deal with at least two levels of uncontrollable uncertainty instead of one. Uncertainty is created by the uncontrollable elements of all business environments, but each foreign country in which a company operates adds its own unique set of uncontrollable factors.
Q2) Which of the following is an obvious strategy organizations should use to build global awareness into organizations?
A) Establish subsidiaries in culturally diverse countries, thus leading to inter-cultural communication.
B) Select individual managers specifically for their demonstrated global awareness.
C) Recruit managers from other nations to increase diversity.
D) Organize foreign trips for managers to improve their understanding.
E) Increase mix of diversity in the employee profile of the organization.
Answer: B
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3
Chapter 2: The Dynamic Environment of International Trade
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Sample Questions
Q1) A VER is generally imposed under the threat of stiffer quotas and tariffs being set by the importing country if a VER is not established.
A)True
B)False
Answer: True
Q2) An agreement between the importing country and the exporting country for a restriction on the volume of exports is called a(n):
A) tariff.
B) standards option.
C) voluntary export restraint(VER).
D) trade block.
E) documentation requirement.
Answer: C
Q3) A case might be made for long-term protection of markets with excess productive capacity or excess labor when such protection could facilitate an orderly transition.
A)True
B)False
Answer: False
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Chapter 3: History and Geography: The Foundations of Culture
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Sample Questions
Q1) During which of the following engagements did the United States secure California and other parts of the West?
A) The Battle of San Jacinto
B) The War of 1812
C) The Mexican War of 1836
D) The Mexican War of 1846-1848
E) The Gadsden Purchase of 1912
Answer: D
Q2) Countries most affected from major natural calamities are among the poorest in the world.
A)True
B)False
Answer: True
Q3) The world population is estimated to grow to about 6.8 billion by 2050.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Cultural Dynamics in Assessing Global Markets
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Q1) According to data provided in the text, Mexico scores high in the Individualism/Collective Index (IDV).
A)True
B)False
Q2) _____ is an important ancient belief held by Chinese, considered the process that links humans and the universe to ch'i, the energy that sustains life and flows through our bodies and surroundings, in and around our homes and workplaces.
A) Shamanism
B) Voodoo
C) Ouija
D) Kung fu
E) Feng shui
Q3) According to Dutch management professor Geert Hofstede, culture is seen as:
A) "software of the mind."
B) "the difference between life and death."
C) "the conflict of civilization versus the masses."
D) "tool of the elite."
E) "art's triumph over banality."
Q4) List Hofstede's dimensions of cultural values.
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Chapter 5: Culture, Management Style, and Business Systems
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Q1) According to Max Weber, part of the standard of living in the United States today can be attributed to:
A) the historical hard-working Protestant ethic.
B) the (artificially) low price of gasoline.
C) the near complete penetration of the Internet.
D) the leveling of statuses brought about by the American business class.
E) the slave-labor that formed the basis for early industry.
Q2) As a guide to adaptation, all of the following criteria would be appropriate EXCEPT: A) open to tolerance.
B) flexibility.
C) humility.
D) profit motive.
E) awareness.
Q3) Cultural electives are business customs in which an outsider must not participate. A)True
B)False
Q4) Which is the most fundamental philosophy of Western management practices? Is it universally acceptable?
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Chapter 6: The Political Environment: A Critical Concern
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Q1) Economically prosperous countries do not display strong nationalistic feelings.
A)True
B)False
Q2) When Toyota Motor Company built automobile manufacturing plants in Tennessee and Ohio, it faced economic risks associated with ___. This occurred because the United States required that 50 percent of all parts used in an automobile constructed in the United States must contain parts that were manufactured in the United States. The United States wanted to promote it "Buy American" policy.
A) exchange controls
B) local-content laws
C) import restrictions
D) tax controls
E) price controls
Q3) The seizing of a company's assets without payment is called:
A) confiscation.
B) expropriation.
C) domestication.
D) exchange controls.
E) local-content laws.
Q4) Discuss the threats posed by cyberterrorism or cyberattacks with an example.
Page 8
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Chapter 7: The International Legal Environment: Playing by the Rules
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Q1) According to Canadian law, what is the standard expected by courts in Canada in determining whether a representation is false or misleading?
A) De Novo standard
B) Credulous person standard
C) Clearly Erroneous standard
D) Arbitrary and Capricious standard
E) Discretionary standard
Q2) The form of law found in the United States and England is classified as civil or code law.
A)True
B)False
Q3) The World Court can settle disputes between governments.
A)True
B)False
Q4) When all else fails in an international commercial dispute, the final step is:
A) conciliation.
B) to encourage one's government to force the other party to comply.
C) to find fault or wrong doing as a public relations device.
D) litigation.
E) coercion.
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Chapter 8: Developing a Global Vision Through Marketing Research
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Sample Questions
Q1) The _____ method for estimating demand assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country.
A) reference class forecasting
B) analogy
C) morphing
D) scenario building
E) triangulation
Q2) The text describes four kinds of company-agency-customer relationships that might be used to bridge the cultural barrier that is present in most international marketing research. Which of the following is deemed to be best suited for managing the cultural barrier across the chain of communication?
A) Company--Agency--Customers
B) Company--Agency--Local Agency--Customers
C) Company--Foreign Agency--Customers
D) Company--Customers
E) Company--Internet--Customers
Q3) List the six steps in a research process.
Q4) Explain the parallel translation method.
Q5) Write a short note on the expert opinion method of demand forecasting.
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Chapter 9: Economic Development and the Americas
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Sample Questions
Q1) When the marketing process is characterized by mass distribution, all of the following marketing functions are performed EXCEPT:
A) demand creation.
B) market information analysis.
C) physical distribution.
D) exchange.
E) market and product planning, development.
Q2) In which of the following countries the literacy rate is 100 percent?
A) Mexico
B) Canada
C) Colombia
D) Argentina
E) Peru
Q3) If a country is industrially underdeveloped, agrarian, has a subsistence society with rural populations, has an extremely low per capita income level, and has little world trade involvement, then the country would be classified as a LDC (less-developed country).
A)True
B)False
Q4) Write a short note on Mercosur.
Page 11
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Chapter 10: Europe, Africa, and the Middle East
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Q1) Europe and Asia had a trade group that emerged and persisted since the dissolution of the Soviet Union called the Newly Independent States.
A)True
B)False
Q2) The Arab Gulf states, Egypt, and Morocco have worked out an agreement on an Arab Free Trade Area, sometimes called the Gulf Arabian Free Trade Area (GAFTA).
A)True
B)False
Q3) The _____ has reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the group.
A) political union
B) common market
C) regional cooperation for development (RCD)
D) customs union
E) free trade area (FTA)
Q4) The Baltic States had a history of a free trade regime.
A)True
B)False
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Page 12
Chapter 11: The Asia Pacific Region
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Sample Questions
Q1) This region in China is the political and R&D center of China. The 75-mile corridor in this region hosts some 5,000 Chinese high-tech companies, and more than 1,000 international IT companies. Perhaps the key to this region is the quality of its higher education. Identify the region in discussion.
A) The coastal Dalian city
B) The Pearl River Delta
C) The Yangtze River Delta
D) Beijing-Tianjin
E) Fujian
Q2) C. K. Prahalad and associates introduced the concept of a global market, not necessarily defined by national borders but rather by the pockets of poverty across countries, and consisting of 4 billion people across the globe with annual incomes of less than $1,200. These consumers, concentrated in the LDCs and LLDCs, are referred to as _____ markets.
A) subsistence
B) third-world
C) underdeveloped
D) bottom-of-the-pyramid
E) peripheral
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Page 13
Chapter 12: Global Marketing Management: Planning and Organization
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Sample Questions
Q1) The "Nestlé way" is to dominate its markets. One of the ways Nestlé does this is to decentralize with respect to foreign markets.
A)True
B)False
Q2) Phase 3 of the international planning process, begins with:
A) the creation of a management performance guide.
B) the selection of an action program.
C) conducting a situation analysis.
D) developing a list of home-country constraints.
E) exploration of the distribution option including logistics and channels.
Q3) With respect to globalism, only in America can international market requirements be an afterthought.
A)True
B)False
Q4) Explain the differences between a joint venture and consortia.
Q5) List the four phases of the international planning process.
Q6) Briefly, explain the benefits of global marketing.
Page 14
Q7) Describe the two basic contractual agreements that most companies follow in their attempt to enter a foreign market.
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Chapter 13: Products and Services for Consumers
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Sample Questions
Q1) One of the core components in the product component model is the product platform.
A)True
B)False
Q2) If a company wished to alter a product's platform so that the product could be manufactured in a variety of forms to meet local differences in five different foreign markets, the _____ of the product component model would be component that would be in consideration.
A) core component
B) support services component
C) packaging component
D) functional component
E) global component
Q3) Consumer services are distinguished by four unique characteristics. List and characterize each of these four unique characteristics.
Q4) The newness of a product or brand introduced can be an important competitive advantage.
A)True
B)False
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Chapter 14: Products and Services for Businesses
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Sample Questions
Q1) What is ISO 9000?
Q2) For firms producing products and services for industrial markets, a chief reason for venturing abroad is the prospect of high profits with little risk.
A)True
B)False
Q3) Which of the following will create expanding demand, particularly for industrial goods and business services, in Latin America?
A) The fast economic growth
B) The creation of market economies
C) The privatization of state-owned enterprises
D) Employment creation
E) Government regulations
Q4) ISO 9000 concerns the:
A) ability of a company to meet quality expectations of consumers.
B) registration and certification of a manufacturer's quality system.
C) profitability of a production line.
D) ability of a company's computer system to adapt to SAP.
E) assurance of product application.
Q5) What are the trends that spur demand for technologically advanced products?
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Chapter 15: International Marketing Channels
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Sample Questions
Q1) What is secondary wholesaling?
Q2) _____ 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
Q3) 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.
Q4) Agent middlemen take title to the goods and buy and sell on their own account.
A)True
B)False
Q5) Write a short note on import-oriented distribution structure.
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Chapter 16: Integrated Marketing Communications and International Advertising
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Q1) Describe the role of public relations (PR).
Q2) Language is one of the major barriers to effective communication through advertising. Explain with an example.
Q3) 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
Q4) 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.
Page 18
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Chapter 17: Personal Selling and Sales Management
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Q1) 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
Q2) Separation allowances are benefits paid when an expatriate manager leaves a company to join another.
A)True
B)False
Q3) 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
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Page 19
Chapter 18: Pricing for International Markets
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Sample Questions
Q1) One of the primary functions of a cartel is to control markets for its goods and services.
A)True
B)False
Q2) 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.
Q3) 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.
Q4) What is a tariff? What are the three basic ways in which tariffs may be levied?
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Chapter 19: Negotiating With International Customers,
Partners, and Regulators
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Q1) What is the importance of bringing along a senior executive to a business negotiation?
A) Influence at headquarters is crucial to success
B) Indicating the flexible position of the organization
C) Focusing on the specific and technical details of the deal
D) Collecting information with the goal of enhancing creativity
E) A larger number of nodding heads can exercise greater influence than even the best arguments
Q2) Using multiple communication channels during presentations-writing, exhibits, speaking, repetition-works to increase the errors and fosters miscommunication.
A)True
B)False
Q3) Negotiators from which of the following countries is more likely to provide brutally frank negative feedback to foreign presenters?
A) U.S.A
B) Japan
C) China
D) Germany
E) Mexico
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