Q&A Hero

Q: Which of the following is used by home-country governments to promote outbound foreign direct investment? A) political pressure B) performance demands C) ownership restrictions D) sanctions

Q: Scenario: Silk Industries LLCSilk Industries LLC comprises two major divisions: consumer products and industrial products. The consumer product line of the company is well-recognized and consists of loyal customers worldwide. The management is considering different types of promotional strategies for the two product divisions.Which of the following would be most appropriate for its products sold through grocery stores?A) horizontal integrationB) vertical integrationC) push strategyD) pull strategy

Q: Which of the following methods is used by a host country to restrict incoming foreign direct investment? A) differential tax rates for earnings abroad B) insurance to cover the risk of overseas investments C) low-interest loans to investors D) performance demands

Q: Which of the following would be most appropriate for its consumer product line? A) horizontal integration B) vertical integration C) push strategy D) pull strategy

Q: Tax breaks on profits earned abroad and political pressures are used by ________. A) host countries to promote FDI B) host countries to restrict FDI C) home countries to promote FDI D) home countries to restrict FDI

Q: Scenario: Silk Industries LLCSilk Industries LLC comprises two major divisions: consumer products and industrial products. The consumer product line of the company is well-recognized and consists of loyal customers worldwide. The management is considering different types of promotional strategies for the two product divisions.If Silk Industries is interested in creating buyer demand that will encourage channel members to stock its products, it should employ ________.A) a pull strategyB) a push strategyC) horizontal integrationD) vertical integration

Q: Which of the following methods is being used when a host country provides lower tax rates and low-interest loans to firms from abroad for encouraging inflows of foreign direct investment? A) financial incentives B) sanctions C) local content requirements D) embargoes

Q: Which of the following occurs when the price of a good is lower in export markets than it is in the domestic market?A) skimmingB) dumpingC) transfer pricingD) price escalation

Q: A home country encourages outflows of foreign direct investment because it ________. A) helps in replacing jobs at home B) sends resources out of the home country C) tends to increase the long-term competitiveness of firms D) takes the place of all the exports and imports in the country

Q: Upper or lower limits placed on the prices of products sold within a country are known as ________. A) price controls B) transfer prices C) price escalators D) arm's length prices

Q: Home nations discourage foreign direct investment outflows because it ________. A) discourages cooperation between countries B) replaces jobs in the home nation C) fails to protect the "sunset" industries in the home nation D) decreases long-term competitiveness of companies

Q: The free-market price that unrelated parties charge one another for a specific product is called a(n) ________. A) worldwide price B) transfer price C) dual price D) arm's length price

Q: The difference between the balances of the current and capital accounts of a country's balance of payments caused by errors in recording methods is called a(n) ________. A) round-off error B) type I error C) currency crisis D) statistical discrepancy

Q: Which of the following refers to the price charged for products sold between a company's divisions or subsidiaries? A) dual pricing B) transfer price C) price skimming D) arm's length price

Q: If a Japanese citizen invests in the Australian stock market, the transaction would show up on the capital account in the balance of payments of ________. A) Japan B) Australia C) both Japan and Australia D) neither Japan nor Australia

Q: When a product has a higher selling price in the target market than it does in the home market or the country where production takes place, it is called ________. A) price skimming B) price escalation C) price dispersion D) price fixing

Q: Which of the following is the type of production illustrated in the automobile industry? A) customized production B) rationalized production C) job production D) craft production

Q: A pricing policy in which a product has a different selling price in export markets than it has in the home market is called ________. A) dual pricing B) cost-plus pricing C) penetration pricing D) premium pricing

Q: Which of the following statements is true of rationalized production? A) It depends on a large number of distribution channels which leads to inefficiency. B) It depends on a large number of distribution channels which increases the cost of production. C) It can bring the entire production process to a standstill, if work is stopped in one country. D) It is an unethical method of production as it uses questionable labor practices to reduce costs.

Q: A pricing policy in which one selling price is established for all international markets is called ________. A) dual pricing B) value-based pricing C) worldwide pricing D) target pricing

Q: A system of production in which each of a product's components is produced in the location where the cost of producing that component is lowest is called ________ production. A) rationalized B) craft C) job D) customized

Q: Which of the following is true of the value densities of products? A) The cost of transporting goods with high value-density ratios is high relative to their value. B) Products with high value-density ratios are integrated into the manufacturing process at points close to their original locations. C) Most commodities, including cement, iron ore, and crude oil, have high value-density ratios. D) The lower a product's value density, the more localized the distribution system.

Q: If Blickinstock's home government tries to stop the company from investing in Latin America, the government is most likely trying to ________. A) protect its balance of payments B) prevent a monopoly situation from occurring C) discourage the entry of a "sunset" company D) protect the "sunset" companies in Latin America

Q: Which of the following products has a low value-density ratio? A) semiconductors B) emerald C) crude oil D) premium perfumes

Q: Ownership restrictions and performance demands are used by ________.A) host countries to promote FDIB) host countries to restrict FDIC) home countries to promote FDID) home countries to restrict FDI

Q: Which of the following is implied by a product with a low value density? A) the distribution system is more localized B) the product is more valuable C) the cost of shipping the product is negligible D) the product is processed in areas away from their original locations

Q: ________ are those that use outdated and obsolete technologies or employ low-wage workers with few skills. A) Business-agile enterprises B) Sunset industries C) Greenfield investments D) Shell corporations

Q: The value of a product relative to its weight and volume is called its ________. A) face value B) value investing C) real value D) value density

Q: Which of the following is a reason behind intervention by a host country on matters related to FDI? A) to keep their balance of payments under control B) to protect their outdated technology and management skills C) to strictly encourage the establishment of sunset industries D) to decrease the country's competitiveness in the global market

Q: A(n) ________ channel places a single intermediary between the producer and the buyer. A) intensive B) exclusive C) one-level D) two-level

Q: A firm's subsidiary built abroad from the ground up is called a(n) ________. A) greenfield investment B) portfolio investment C) distributive channel D) shell corporation

Q: Which of the following is also known as direct marketing? A) an intensive channel B) an exclusive channel C) a zero-level channel D) a two-level channel

Q: Partnerships between a government and a host company in the context of foreign direct investment lead to ________. A) increased exploitation of workers in the home country B) domination of industries in the home country by large international firms C) increased market access for the host company D) increased control for the host country over its operations

Q: ________ refers to the number of intermediaries between producer and buyer. A) Critical path B) Channel length C) Frequency D) Value density

Q: Why is it important to assess R&D costs when considering FDI? Given its costs, how can FDI benefit the host country with access to technology, management skills, and employment?

Q: A(n) ________ channel provides buyers with location convenience because of the large number of outlets through which a product is sold. A) intensive B) exclusive C) one-level D) zero-level

Q: Explain the concept of balance of payments and describe its two major components.

Q: A(n) ________ channel does not create strong barriers to channel entry for other producers, nor does it provide much control over reseller decisions such as what competing brands to sell. A) one-level B) zero-level C) exclusive D) intensive

Q: Discuss the role entrepreneurs and small businesses play in the expansion of FDI. What are some of the surprises that managers face as they invest in new markets abroad?

Q: A distribution channel in which a producer grants the right to sell its product to many resellers is referred to as a(n) ________. A) one-level channel B) zero-level channel C) exclusive channel D) intensive channel

Q: Describe any three management issues involved in foreign direct investment decisions.

Q: A(n) ________ channel gives producers a good deal of control over the sale of their product by channel members such as wholesalers and retailers. A) exclusive B) intensive C) two-level D) selective

Q: A potential problem with a rationalized production model is that a work stoppage in one country can bring the entire production process to a standstill.

Q: A(n) ________ channel creates a barrier that makes it difficult or impossible for outsiders to penetrate. A) exclusive B) intensive C) selective D) two-level

Q: Rationalized production is a system of production in which each of a product's components is produced in the same location so that the cost of producing that product is lowest.

Q: A distribution channel in which a manufacturer grants the right to sell its products to only one or a limited number of resellers is called a(n) ________. A) intensive channel B) exclusive channel C) zero-level channel D) two-level channel

Q: In which of the following accounts would GMI's purchase of the company in Brazil appear? A) the current account of the United States B) the current account of Brazil C) the capital account of the Thailand D) the capital accounts of Brazil and the United States

Q: Companies along a distribution channel that work together in delivering products to customers are called ________. A) subsidiaries B) intermediaries C) value chains D) value networks

Q: Which of the following occurs in a country's balance of payments when a country exports more goods and services and receives more income from abroad than it imports and pays abroad?A) current account deficitB) capital account surplusC) current account surplusD) capital account deficit

Q: The physical path a product follows on its way to customers is called a(n) ________. A) distribution channel B) demand chain C) critical path D) external value network

Q: When a U.S. subsidiary in another country remits profits back to its parent company in the U.S., the receipt of profits is recorded in the ________. A) income receipts account and given a plus sign B) income receipts account and given a minus sign C) income payments account and given a plus sign D) income payments account and given a minus sign

Q: Which of the following refers to planning, implementing, and controlling the physical flow of a product from its point of origin to its point of consumption? A) customization B) distribution C) communication D) promotion

Q: The ________ account within the United States' current account includes financial gains compensated to entities in other nations that is earned on assets they hold in the United States. A) income receipts B) income payments C) merchandise D) services

Q: ________ is often necessary as a communication strategy when many important differences exist between the home and target markets. A) Product invention B) Product adaptation C) Dual adaptation D) Dual extension

Q: Which of the following accounts within the current account of the United States' balance of payments includes financial gains earned on U.S. assets held abroad? A) income receipts account B) income payments account C) merchandise account D) services account

Q: A ________ strategy can be implemented successfully for communicating promotional messages only if a sufficiently large and profitable market segment exists. A) dual extension method B) product extension/communications adaptation method C) product adaptation/communications extension method D) dual adaptation method

Q: Which of the following is recorded in the capital account of a country's balance of payments? A) income payments B) income receipts C) foreign official assets D) unilateral transfers

Q: Which of the following communication strategies adapts both the product and its marketing communication to suit the target market? A) product/communications extension B) product extension/communications adaptation C) product adaptation/communications extension D) product/communications adaptation

Q: Which of the following accounts of a country's balance of payments records transactions involving the export of services? A) transactional account B) capital account C) savings account D) current account

Q: Which of the following communication strategies adapts a product to the requirements of the international market while retaining its original marketing communication? A) product/communications extension B) product extension/communications adaptation C) product adaptation/communications extension D) product/communications adaptation

Q: A country's ________ is a national accounting system that records all monetary transactions to entities in other countries and all receipts coming into the nation. A) balance of payments B) chart of accounts C) global financial system D) international monetary system

Q: Which of the following communication strategies expands the same product into new target markets but alters its marketing promotion? A) product/communications extension B) product extension/communications adaptation C) product adaptation/communications extension D) product/communications adaptation

Q: Which of the following is true of a "follow the leader" scenario in the context of foreign direct investment? A) Companies that practice "follow the leader" supply each other with inputs. B) Companies that practice "follow the leader" pressurize each other to follow environmentally safe methods. C) It is a frequent practice in industries with a limited number of large firms. D) It is common in industries in which producers source component parts from suppliers.

Q: Which of the following communication strategies uses the same home-market product and marketing promotion in target markets? A) product/communications extension B) product extension/communications adaptation C) product adaptation/communications extension D) product/communications adaptation

Q: Firms engage in FDI when the firms they supply have already invested abroad. This practice of "following clients" is observed in industries having ________. A) a huge number of clients B) only large companies as clients C) suppliers who are geographically scattered around the world D) suppliers who have close working relationships with producers

Q: Which of the following countries would a watchmaker most prefer to manufacture its watches in, in order to capitalize on buyer perceptions of high quality? A) China B) Thailand C) Mexico D) Switzerland

Q: Which of the following reflects the correct sequence of the marketing communication process? A) promotional message; encoding; decoding; feedback B) encoding; promotional message; decoding; feedback C) promotional message; decoding; feedback; encoding D) encoding; decoding; promotional message; feedback

Q: ________ refers to anything that disrupts the audience's ability to receive and interpret a promotional message. A) Noise B) Interpolation C) Feedback D) Resonance

Q: Making investments in distribution in order to leapfrog channels of distribution that are tightly controlled by competitors is an example of ________. A) an internalization advantage B) an ownership advantage C) forward integration D) backward integration

Q: Once an audience receives a message, they interpret the meaning of the message by ________ it. A) preprocessing B) decoding C) parsing D) compiling

Q: The extension of a company's activities into stages of production that absorb the company's outputs is known as ________. A) forward integration B) backward integration C) an internalization advantage D) an ownership advantage

Q: Which of the following occurs when an idea to be communicated is translated into images, words, and symbols? A) compiling B) encoding C) parsing D) processing

Q: ________ is the extension of company activities into stages of production that provide a firm's inputs or absorb its outputs. A) Decentralization B) Vertical integration C) Market penetration D) Social stratification

Q: A company can achieve market power through ________. A) ownership advantages B) internalization advantages C) horizontal integration D) vertical integration

Q: The process of sending messages about products to target markets is called ________. A) customer relations B) customer service C) market segmentation D) marketing communication

Q: How does the eclectic theory explain the concept of FDI? How can a host country offer incentives to attract FDI?

Q: Which of the following statements is true about international promotions? A) Most companies standardize all aspects of their international promotions to cut costs. B) Firms that standardize advertising often control campaigns from the home office. C) Companies that adapt their advertising to different markets project a consistent brand image. D) Companies discourage blending product and promotional strategies in a communication process.

Q: Explain the market power theory of FDI, and discuss why the decision whether or not to follow rivals into a new international market is important.

Q: A company that makes its marketing program elements uniform, targeting an entire region with similar products, is demonstrating ________. A) customization B) segmentation C) standardization D) differentiation

Q: Explain the theory of market imperfections and describe the two major market imperfections.