Deck 12: Assessing International Markets

Question 1

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

Answer 1

False

Question 2

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.

Answer 2

True

Question 3

Market indicators are economic data that correlate highly with market demand for a product.

Answer 3

False

Question 4

Market screening can assist firms that sell exclusively in the domestic market.

Question 5

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

Question 6

A complete financial analysis is part of the financial and economic forces screening process.

Question 7

Market indicators measure relative market weaknesses.

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

Country and segment are units of analysis for market screening.

Question 13

Country and region are units of analysis for market screening.

Question 14

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

Question 15

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

Question 16

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

Question 17

The first step in the market screening process is the economic/financial screening.

Question 18

Market indicators and market factors measure market demand.

Question 19

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

Question 20

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

Question 21

Most companies can enter a market in stages. The order listed in the textbook is establishment of a foreign sales company, exporting, local assembly, and manufacturing.

Question 22

When the historic growth rates of a product are known, future growth can be forecast by means of trend analysis.

Question 23

The United States can be considered politically unstable compared to many countries.

Question 24

Managers may consider entering a market in which strong competition already exists if they believe entering a competitor's home market will distract the competitor's attention from the new entrant's own home market.

Question 25

Trend analysis and cluster analysis are used in the third screening phase.

Question 26

Countries in which strong competition already exists are eliminated from consideration by most managers.

Question 27

Benefits of trade fairs include sales, making contacts with prospective buyers and agents, and competitive intelligence.

Question 28

For a company interested in entering a foreign market, a report analyzing in detail all five screening forces listed in the book is sufficient information.

Question 29

Regulations allowing the repatriation of earnings are considered an entry barrier.

Question 30

Companies sometimes enter markets where strong competitors are in order to distract their competitors from entering their own home market.

Question 31

Trend analysis assumes that past conditions will remain constant.

Question 32

Estimation by analogy is an example of a market factor.

Question 33

One should not look at sociocultural forces as subjective.

Question 34

The e-commerce potential index developed in the text includes three indexes: market size, market growth rate, and e-commerce readiness.

Question 35

Trade missions consist of a group of people in search of business opportunities.

Question 36

Management should take the attitude that the stability of government policy is more important than is the particular form of government of a country.

Question 37

Cluster analysis is a technique for dividing objects into groups based on geographic or economic similarity.

Question 38

When a firm's personnel have had no experience in a country, management should probably use the company's research personnel to conduct local market research.

Question 39

A low level of literacy in a country makes the use of mail questionnaires more appropriate for market research.

Question 40

CeBIT is a horse-trading-related trade fair.

Question 41

College students may make good interviewers for firms doing market research in foreign countries.

Question 42

Market screening is divided into:

A) environmental screening and country screening.
B) region screening and segment screening.
C) segment screening and environmental screening.
D) region screening and environmental screening.
E) country screening and segment screening.

Question 43

Environmental scanning is mostly used:

A) during the planning process.
B) to gather information on market weaknesses.
C) to obtain information on opportunities and threats.
D) all of the above.
E) A and C.

Question 44

_____________ is used by management during the planning process and provides information about threats and opportunities.

A) Market screening
B) Environmental scanning
C) Country screening
D) Segment screening
E) None of the above

Question 45

___________ is(are) economic data that serve as yardsticks for measuring the relative market strengths of various geographic areas.

A) Market factors
B) Trend analysis
C) Cluster analysis
D) Market indicators
E) None of the above

Question 46

Under the country screening process, 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
E) None of the above

Question 47

Generally, producers of _______ experience little difficulty in assessing their basic need potential.

A) textiles
B) air conditioners
C) specialized industrial materials
D) frequently purchased consumer goods
E) chocolate

Question 48

General surveys are not done with a specific firm in mind.

Question 49

The Internet may eventually allow any firm to have the opportunity to conduct surveys anywhere in the world.

Question 50

Climate, topography, and natural resources are all considered part of the _________ stage of the country screening process.

A) basic needs
B) sociocultural
C) economic/financial
D) political
E) competitive

Question 51

_____________ is used by management during the planning process to eliminate the less desirable markets.

A) Market screening
B) Environmental scanning
C) Country screening
D) Segment screening
E) None of the above

Question 52

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

A) Trends in inflation
B) Interest rates
C) Exchange rates
D) All of the above
E) A and C

Question 53

Corporate anthropology refers to the process of obtaining market research data through focus groups and surveys.

Question 54

According to the text, market screening is a valuable method to:

A) assess the nearly 200 countries to pinpoint the most attractive prospects.
B) help domestic firms expand within their home markets.
C) help multinational companies avoid missing potential new markets.
D) all of the above.
E) A and C.

Question 55

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 hosts per million people.
E) two of the above.

Question 56

According to the text, data on imports may not completely measure market potential because:

A) these data are not available for most countries and products.
B) foreign competitors will not report export data accurately.
C) transportation costs impact prices.
D) all of the above.
E) two of A, B, and C.

Question 57

As humans, it is easier to think of ourselves as market segments that extend across borders than as discrete country segments.

Question 58

Market screening eliminates:

A) undesirable products.
B) markets that are judged to be less attractive.
C) environmental forces.
D) competition.
E) two of the above.

Question 59

Social desirability bias can be seen as a cultural problem when conducting market research.

Question 60

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.
E) none of the above.

Question 61

Average growth rate in commercial energy use and real growth rate in GDP compose the __________ index.

A) market size
B) market growth rate
C) e-commerce readiness
D) market factor
E) none of the above

Question 62

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.
E) fifth screening.

Question 63

The final step in the screening process will generally include:

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

Question 64

Which of the following is true about trend analysis?

A) None of the following.
B) It is appropriate for use with the introduction of new products.
C) It is based on the assumption that past conditions are not an accurate predictor of the future.
D) It accounts for the impact of entry by competitors.
E) B, C, and D

Question 65

Which of the following are not identified in the text as being elements of the competitive forces that an analyst uses to examine markets?

A) Competitors' market shares
B) Competitors' marketing strategies
C) Competitors' staffing levels
D) Competitors' levels of after-sales service
E) None of the above (All are identified as elements of the competitive forces used by analysts.)

Question 66

Market research includes:

A) customized research.
B) general surveys.
C) nonprofit surveys.
D) all of the above.
E) two of A, B, and C.

Question 67

Mail surveys can be a difficult foreign market research tool because:

A) mail deliveries can take weeks.
B) sometimes mail is not delivered at all.
C) response rates for mail surveys may be low.
D) all of the above.
E) two of A, B, and C.

Question 68

According to the text, which of the following is true regarding "corporate anthropology"?

A) It involves ethnographic research techniques.
B) It involves extensive use of surveys.
C) It involves extensive use of focus groups.
D) all of the above.
E) A and C.

Question 69

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.
E) none of the above.

Question 70

Which of the following are not identified in the text as being elements of the competitive forces that an analyst uses to examine markets?

A) Competitors' number, size, and financial strength
B) Competitors' marketing strategies
C) Competitors' product portfolios
D) Competitors' coverage of the market
E) None of the above (All are identified as elements of the competitive forces used by analysts.)

Question 71

Which of the following is false regarding sociocultural screening?

A) Sociocultural factors are fairly subjective.
B) Data are difficult to assemble, particularly from a distance.
C) Unless an analyst is a specialist in the country, he or she must rely on the opinions of others.
D) The use of checklists of sociocultural components can be useful.
E) Immigrants from the country are valuable as being representative data sources.

Question 72

___________ is(are) economic data that correlate highly with market demand for a product.

A) Market factors
B) Trend analysis
C) Cluster analysis
D) Market indicators
E) None of the above

Question 73

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.
E) none of the above.

Question 74

Size of the urban population and electricity consumption are part of the __________ index.

A) market size
B) market growth rate
C) e-commerce readiness
D) market factor
E) none of the above

Question 75

The market growth rate index is measured by:

A) none of B, C, D, or
B) average growth rate in commercial energy + real growth rate in GDP.
C) real growth rate in commercial energy + real growth rate in GDP.
D) average growth rate in commercial energy + average growth rate in GDP.
E) real growth rate in commercial energy + average growth rate in GDP.

Question 76

According to the text, a large exhibition, generally held at the same place and same time periodically, at which companies maintain booths to promote the sale of their products is known as:

A) a trade mission.
B) a product introduction.
C) a trade show.
D) a trade fair.
E) none of the above.

Question 77

A statistical technique that divides objects into groups so that the objects within each group are similar is called:

A) trend analysis.
B) group classification analysis.
C) cluster analysis.
D) factor analysis.
E) none of the above.

Question 78

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) Establishing a website
D) Local assembly
E) Local manufacturing

Question 79

Entry barriers are part of the ___________ stage of market screening.

A) economic and financial
B) political and legal
C) sociocultural
D) market entry
E) none of the above

Question 80

In a personal interview or phone survey situation, some respondents want to help the interviewer out of politeness or just to please the interviewer. This is known as:

A) market research.
B) response bias.
C) interviewer bias.
D) social desirability bias.
E) none of the above.