True / False Questions

1. Market screening is a modified version of environmental scanning in which the firm

studies the stock market to eliminate the less desirable markets.

True False

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

True False

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

True False

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

True False

5. Country and segment are units of analysis for market screening.

True False

6. Country and region are units of analysis for market screening.

True False

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

True False

8. 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.

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

True False

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

True False

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

True False

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

True False

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

True False

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

True False

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

True False

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

True False

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

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

True False

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

True False

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

True False

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

True False

22. 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.

True False

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

True False

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

True False

25. A management contract is used only by manufacturing companies to earn income by

providing expertise for a fee.

True False
26. 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.

True False

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

True False

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

True False

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

True False

30. Market indicators and market factors measure market demand.

True False

Multiple Choice Questions

31. 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.

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.
33. 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

34. Market screening eliminates

A. undesirable
products.

B. markets that are judged to be less

attractive.

C. environmental
forces.

D. competitio
n.
35. 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

36. 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.
37. 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

38. 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.
39. 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.

40. 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.
41. 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.

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

A. Exportin
g

B. Establishment of a foreign sales

company

C. A
website

D. Manufacturi
ng
43. 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.

44. Which of the following does not organize trade missions?

A. Export-oriented
organization

B. State
government

C. Department of
commerce

D. Regional open
markets
45. 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.

46. 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.
47. 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.

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

A. Definabl
e

B. Accessibl
e

C. Smal
l

D. Actionabl
e
49. 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.

50. Companies wishing to sell internationally with minimal risk usually begin with

A. exporting
directly.

B. local
manufacturing.

C. establishing a local sales

company.

D. licensin
g.
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.

52. 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.
53. 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.

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.
55. Licensing provides income for

A. fashion designers and IT

companies.

B. turnkey
projects.

C. startup
firms

D. domestic
sales.

56. 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.
57. 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.

58. Franchising is a form of

A. contract
management.

B. licensin
g.

C. contract
manufacturing.

D. joint
venture.
59. 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.

60. McDonald's, KFC, and Subway are examples of

A. joint
ventures.

B. licensin
g.

C. franchisin
g.

D. strategic
alliances.
61. 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.

62. 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.
63. 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.

64. 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.
65. Strategic alliances are

A. partnerships between competitors, customers, or suppliers that may take

various forms.

B. another name for a growth

triangle.

C. arbitratio
n.

D. another name for joint

ventures.

66. Channels of distribution are included in

A. the fifth
screening.

B. both controllable and uncontrollable

variables.

C. the controllable variables

category.

D. joint
ventures.
67. 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.

68. 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.
69. The basic needs potential may be dependent on

A. climate and
topography.

B. export
availability.

C. consumption
rates.

D. sample
availability.

70. 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.
71. 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.

72. 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.
73. 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.

74. 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.
75. 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.

76. Most _____________ are familiar with market factors for specific markets.

A. marketing
researchers

B. tax
authorities

C. university marketing
professors

D. business
owners
77. _____________ uses market data to estimate future values.

A. Trend
analysis

B. A least developed
organization

C. A
licensee

D. Market
segmentation

78. 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.
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

80. 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.
81. An example of a political force of concern in market screening is a(n)

A. entry barrier established by the host

government.

B. change in the general platform of the ruling

democratic party.

C. change in voter registration

numbers.

D. local blue law prohibiting sales on

Sunday.

82. Local content restrictions are an example of a

A. political and legal

force.

B. marketing
force.

C. sustainability
force.

D. cultural
force.
83. Political stability and policy stability

A. are not synonymous. Policy stability is important; political stability may be of lesser
importance.

B. are synonymous and both are needed for low-risk

market entry.

C. are not related and policy stability is of no concern to

market entry.

D. are often confused by politicians and slow down

market entry.

84. The screening for cultural forces

A. is difficult because culture is a perceived

phenomenon.

B. is easy to complete using cultural databases and desk

research.

C. can be omitted if there are locals involved in the

process.

D. is optional because globalization is integrating

cultures.
85. The purpose of the fifth screening, just before the final selection of markets, is to

A. look at the markets in terms of what and how the

competition is doing.

B. determine that potential consumers can buy the

product.

C. ensure that markets exist for the

product.

D. analyze government involvement in

trade.

86. In most market screenings, there is

A. no substitute for a personal visit. The market must

be visited.

B. no need to make a market visit, since the data resources are so

abundant.

C. ample opportunity for consultants to substitute for a

market visit.

D. so much data that over analysis is a

danger.
87. The field trip is meant to

A. develop a feel for the market and what is going

on there.

B. be an opportunity to meet local potential

partners.

C. assess the competition's

readiness.

D. close the market screening with a well-deserved

reward.

88. The field trip report often provides the final data for the decision, but may

A. lead to the need for on-site

research.

B. not be necessary if earlier data are

unambiguous.

C. further confound the decision in the case of conflicting

assumptions.

D. suggest that the market entry decision is

overdue.
89. When doing business in several countries, the two market screening approaches are

A. country and
segment.

B. country and
region.

C. segment and
market.

D. region and
market.

90. Segments need to be, among other traits,

A. definable, large, and

accessible.

B. large, unambiguous, and

affluent.

C. affluent, accessible, and

actionable.

D. definable, affluent, and

actionable.
91. A definable segment is one that

A. can be identified and

measured.

B. has a clear reason and

purpose.

C. is understood by the
client.

D. relies on lifestyle
differences.

92. Accessibility in a segment screening is that the segment is

A. reachable for promotion and

distribution.

B. communicating in a shared
language.

C. willing to be contacted by
researchers.

D. ready to focus on our questions about the

product.
93. An actionable segment is one that

A. allows the marketing mix to

operate.

B. has resources to purchase the

product.

C. perceives that the product line is

useful.

D. can be moved through

advertising.

94. A capturable segment is one that

A. can be influenced to move from the

competition.

B. can be traded on the open

market.

C. can be reached through online

communication.

D. is open to product
modification.
95. With segment screening it may be a good idea to

A. view markets on a regional rather than on a national level, moving beyond

national lines.

B. operate with larger, more populated segments rather than

smaller ones.

C. rely on traditional marketing approaches to have clear market

definitions.

D. regard new products as part of a product line

extension.

96. The general purpose of a trade mission is to

A. exploit a foreign market

opportunity.

B. extend the political influence of a

country.

C. spend time in the field to gather specific market Remember on

consumer use.

D. gather additional data sources for market

screening.
97. A trade fair is

A. a more promotion-focused activity than a trade mission, that often

results in sales.

B. a way for specific governments (France, Germany) to claim leadership

in a sector.

C. an industry-wide
holiday.

D. an event for the exchange of marketing materials and approaches among members of
an industry.

98. Research in the local market by home-country researchers can be impeded by

A. language issues within the market and between the researcher and the
market members.

B. jet lag, other travel-related issues, and a hurried

schedule.

C. an inability to supervise locally hired

researchers.

D. the locals' inclination to develop long answers to

questions.
99. Technical difficulties researchers in international markets may encounter include

A. outdated or no maps and a lack of street

names.

B. undependable electrical
power.

C. unusual work schedules and work

values.

D. a lack of access to high-speed Internet for data

transmission.

100 The social desirability bias is

.

A. the respondent's desire to please the researcher, leading to answers

calculated to please.

B. the desire to be accepted as a foreigner in the local setting, so assuming local dress
and mannerisms.

C. the desire to become part of the social in-group in the new setting, with
high status.

D. a bias in favor of those locals who pretend to like and accept the
researcher.
101 Online research communities are
.

A. online platforms that connect researchers to interested consumers willing to

collaborate in the research.

B. groups of graduate students who do research part time and

will travel.

C. a sophisticated collection of proprietary data

sources.

D. a loosely connected collaboration of local researchers who will collaborate with major
marketing companies in their home markets.

102 In Asia, mobile application users (smartphones, iPads) in online research communities
. showed

A. increased participation in the

surveys.

B. reduced participation in the

surveys.

C. increased responsiveness to product

advertisements.

D. a marked preference for open-ended

inquiries.
103 The text points out that big data Analytical Thinkings can be used to
.

A. personalize the shopping

experience.

B. generalize about increasingly larger

segments.

C. identify outliers more

readily.

D. promote shopping at
home.

104 That culture does not always stand in the way of market entry is illustrated by
.

A. Starbucks' success in
China.

B. Caterpillar's Swiss tractor

sales.

C. French unpasteurized cheese sales in the

U.S.

D. Greek citrus sales in

Africa.
105 To be successful in international markets, one has to
.

A. adapt to local culture and commit to a long-term

presence.

B. sell what is most fashionable in the home

market.

C. avoid employing
locals.

D. avoid joint ventures and

alliances.

106 Nonequity modes of entry include

.

A. exporting, licensing, and

franchising.

B. joint ventures and

licensing.

C. subsidiaries and
franchising.

D. a publically held
company.