ECO Final Exam Ch.12

Locating production facilities within regional markets is popular because ________.
A) producing in one of a region’s countries provides duty-free access to every consumer in the trade bloc
B) it simplifies language gaps
C) it simplifies political and economic gaps
D) marketing strategies can then be standardized across the bloc
A
The first step in the screening process for potential markets and sites is to ________.
A) select the market/site
B) obtain government approval for research
C) identify basic appeal
D) assess the national business environment
C
Assessing the national business environment is the ________ step in the screening process for potential markets and sites.
A) first
B) second
C) third
D) fourth
B
Recognizing a lack of demand for snow skis in Indonesia would take place during the ________ stage of the screening process for potential markets and sites.
A) first
B) second
C) third
D) fourth
A
Selecting the market or site would take place in the ________ stage of the screening process for potential markets and sites.
A) first
B) second
C) third
D) fourth
D
During the ________ stage of the screening process for potential markets and sites, basic appeal for the product or service is identified.
A) first
B) second
C) third
D) fourth
A
Measuring market or site potential takes place during the ________ stage of the screening process for potential markets and sites.
A) first
B) second
C) third
D) fourth
C
Which of the following is the correct sequence in the screening process for potential markets and sites?
A) Measure market or site potential, identify basic appeal, select market or site, assess the national business environment
B) Identify basic appeal, assess the national business environment, measure market or site potential, select the market or site
C) Assess the national business environment, identify basic appeal, select the market or site, measure the potential
D) Select the market or site, measure the potential, assess the national business environment, identify basic appeal
B
Once the basic appeal of a market or site has been identified, which of these should occur in the screening process?
A) Assess the national business environment
B) Select the market or site
C) Measure the market or site potential
D) Conduct a climate suitability test
A
Which of these is the final step in the screening process for potential markets and sites?
A) Assess the national business environment
B) Measure market or site potential
C) Select the market or site
D) Identify basic appeal
C
Exploring the cost of transporting goods is part of which step in the screening process for potential markets and sites?
A) Step 1: Identify basic appeal
B) Step 2: Assess the national business environment
C) Step 3: Measure market or site potential
D) Step 4: Select the market or site
B
Quality of workforce, materials, and infrastructure is analyzed in which step of the screening process for potential markets and sites?
A) Step 1: Identify basic appeal
B) Step 2: Assess the national business environment
C) Step 3: Measure market or site potential
D) Step 4: Select the market or site
C
Assessing how culture affects the national business environment is part of the ________ stage of the screening process for potential markets and sites.
A) first
B) second
C) third
D) fourth
B
Government regulation and government bureaucracy are evaluated in which step of the market or site screening process?
A) Identify basic appeal
B) Measure market/site potential
C) Analyze the infrastructure
D) Assess the national business environment
D
Which of these government regulations or actions would indicate that a government is quite receptive to international trade and investment?
A) Creating investment barriers to ensure domestic control of an industry
B) Requiring companies to divulge proprietary secrets
C) Allowing companies to remove profits earned in the domestic market
D) Barring companies entirely from certain sectors of the domestic economy
C
The key element of political risk of greatest concern to companies is most likely ________.
A) the cost of transporting materials and goods
B) unforeseen political change
C) currency and liquidity problems
D) letting past political events blind future opportunities
B
The likelihood that a society will undergo political changes that negatively affect local business activity is known as ________.
A) business risk
B) investment risk
C) political risk
D) production risk
C
Which of the following is an example of a legal force that might influence a site location decision?
A) Strong work ethic
B) Strict environmental regulations
C) Qualified workforce
D) Liquidity problems
B
Which of the following is most likely to lead international companies to cancel proposed investments?
A) Low rates of inflation
B) Increasing budget deficits
C) Rising productivity levels
D) An appreciating currency
B
Fiscal and monetary policies of a nation are evaluated in which step of the market/site screening process?
A) Assess the national business environment
B) Identify basic appeal
C) Select the market/site
D) Measure market/site potential
A
Poor fiscal and monetary policies of a nation’s central bank are LEAST likely to cause which of the following?
A) High rates of inflation
B) Increasing budget deficits
C) Flagging innovation
D) Appreciating currency
D
Which of the following refers to management of the physical flow of products from point of origin as raw materials to end users as finished products?
A) Market receptivity
B) Logistics
C) Commercial infrastructure
D) Environmental scanning
B
Assessing how country image affects the decision to enter a particular market is part of the ________ stage of the screening process for potential markets and sites.
A) first
B) second
C) third
D) fourth
B
All of these are true about country image EXCEPT that ________.
A) it embodies every facet of a nation’s business environment
B) the positive or negative image is the same across all product classes
C) it can change over time
D) products made in relatively more developed countries tend to be evaluated more positively
B
A product’s income elasticity is determined in which of these steps of the market/site screening process?
A) Measure market or site potential
B) Identify basic appeal
C) Select the market or site
D) Assess the national business environment
A
A typical industry analysis includes each of the following EXCEPT ________.
A) volume of exports and imports of a product
B) structure of the wholesale and retail distribution networks
C) total expenditure on the product in the market and future outlook
D) history of currency fluctuations
D
The sensitivity of demand for a product relative to changes in income is called ________.
A) income elasticity
B) product elasticity
C) the relativity principle
D) the market intensity
A
A coefficient of ________ conveys an income-elastic product.
A) 0.25
B) greater than 1.0
C) greater than 0.5 but less than 1.0
D) less than 1.0
B
If the income-elasticity coefficient for coffee is 0.5, the demand for coffee will ________.
A) decrease 0.5 percent for every 1.0 percent increase in income
B) increase 1.0 percent for every 5.0 percent increase in income
C) increase 0.5 percent for every 1.0 percent increase in income
D) not move related to income because it is at the neutral level
C
Examples of income-elastic products include all of the following EXCEPT ________.
A) computers
B) video games
C) jewelry
D) beverages
D
Developing a market-potential indicator for an emerging market is useful to companies considering ________.
A) exporting
B) licensing
C) joint ventures
D) wholly owned subsidiaries
A
Which of these is NOT a variable commonly included in market-potential analysis of an emerging market?
A) Economic freedom
B) Commercial infrastructure
C) Fiscal and monetary policies
D) Market intensity
C
When creating a market-potential indicator for an emerging market, which of the following allows managers to rank countries from the largest to the smallest regardless of a particular product?
A) Market growth rate
B) Market intensity
C) Market size
D) Market consumption capacity
C
When creating a market-potential indicator for an emerging market, the ________ factor attempts to assess channels of distribution and communication.
A) market size
B) country risk
C) commercial infrastructure
D) market receptivity
C
When creating a market-potential indicator for an emerging market, market consumption capacity is often estimated from the percentage of a market’s population in the ________.
A) upper class
B) middle class
C) lower class
D) working class
B
When creating a market-potential indicator for an emerging market, market size estimates the ________.
A) size of a market for a particular product
B) size of the overall economy
C) current and expected size of the market
D) buying power of the market
B
When creating a market-potential indicator for an emerging market, the ________ variable reflects the fact that although overall size of the market is important, so too is its rate of growth.
A) market intensity
B) market consumption capacity
C) market receptivity
D) market growth rate
D
When creating a market-potential indicator for an emerging market, an estimate of the wealth or buying power of a nation can be found by examining ________.
A) market intensity
B) market consumption capacity
C) market size
D) market receptivity
A
When creating a market-potential indicator for an emerging market, which of these variables attempts to estimate market openness?
A) Market consumption capacity
B) Market receptivity
C) Market size
D) Market intensity
B
When creating a market-potential indicator for an emerging market, we can estimate ________ by determining a nation’s volume of international trade as a percent of GDP.
A) market receptivity
B) market intensity
C) consumption capacity
D) market freedom rate
A
During which stage of the market or site screening process do managers normally want to visit locations?
A) Assess national business environment
B) Select the market or site
C) Measure market or site potential
D) Identify basic appeal
B
Research regarding the potential threat from substitute products in a market is an example of an element included in which of the following?
A) Market intensity measurement
B) Resource availability assessment
C) Labor availability assessment
D) Competitor analysis
D
Assessing the potential threat from substitute products takes place in which stage of the screening process for potential markets and sites?
A) First
B) Second
C) Third
D) Fourth
D
Competitor analysis is conducted during which stage of the market/site screening process?
A) Assess national business environment
B) Select the market or site
C) Measure market or site potential
D) Identify basic appeal
B
Collection and analysis of information used to assist managers in making informed decisions is known as ________.
A) data collection
B) market research
C) secondary market research
D) market analysis
B
All of the following are main difficulties associated with conducting international market research EXCEPT ________.
A) availability of data
B) cultural differences
C) marketability of data
D) comparability of data
C
Which of the following is NOT a difficulty associated with conducting international market research?
A) Availability of data
B) Comparability of data
C) Cultural differences
D) Economic differences
D
In countries with high illiteracy rates, a(n) ________ should not be used to collect information.
A) personal interview
B) observation of behavior
C) written survey
D) group interview
C
The process of obtaining information that already exists within the company or that can be obtained from outside sources is called ________.
A) secondary market research
B) logistics management
C) primary market research
D) invalid market research
A
Secondary data is ________ because it has already been collected, analyzed, and summarized by another party.
A) inaccurate
B) relatively inexpensive
C) unreliable
D) very expensive
B
The process of collecting and analyzing original data and applying the results to current research needs is called ________.
A) primary market research
B) secondary survey research
C) secondary market research
D) original focus study
A
An exhibition at which members of an industry showcase their latest products, study activities of rivals, and examine recent trends and opportunities is called a(n) ________.
A) focus group
B) trade show
C) environmental survey
D) trade mission
B
A(n) ________ is an international trip by government officials and businesspeople that is organized by agencies of national or provincial governments for the purpose of exploring international business opportunities.
A) environmental scanning
B) trade show
C) logistics movement
D) trade mission
D
An unstructured but in-depth interview of a small group of individuals by a moderator to learn the group’s attitude about a company or its products is called a ________.
A) focus group
B) survey
C) consumer panel
D) secondary research method
A
Research in which people record in personal diaries information on their attitudes, behaviors, or purchasing habits is called a ________.
A) survey
B) focus group
C) consumer panel
D) secondary research method
C
Research in which an interviewer asks current or potential buyers to answer written or verbal questions to obtain facts, opinions, or attitudes is called a ________.
A) survey
B) focus group
C) consumer panel
D) secondary research method
A
An ongoing process of gathering, analyzing, and dispensing information for tactical or strategic purposes is called ________.
A) secondary research
B) consumer paneling
C) survey research
D) environmental scanning
D
Scenario: Rookie Chong
John Chong is a rookie in global business, but wants to sell his product, Zulu doll, in every corner of the world. He wants to examine every potential market but wants to keep the costs low. John has asked you to explain a few things about analyzing international markets.

When screening a potential market, which of these would you ask John to do first?
A) Assess the national business environment
B) Select the market
C) Identify basic appeal
D) Measure market potential

C
Scenario: Rookie Chong
John Chong is a rookie in global business, but wants to sell his product, Zulu doll, in every corner of the world. He wants to examine every potential market but wants to keep the costs low. John has asked you to explain a few things about analyzing international markets.

If John is examining government regulations and bureaucracy in a market, he is in which stage of the screening process?
A) Assess the national business environment
B) Select the market
C) Identify basic appeal
D) Measure market potential

A
Scenario: Rookie Chong
John Chong is a rookie in global business, but wants to sell his product, Zulu doll, in every corner of the world. He wants to examine every potential market but wants to keep the costs low. John has asked you to explain a few things about analyzing international markets.

The income elasticity of Zulu doll is determined in which step of the screening process?
A) Select the market
B) Assess the national business environment
C) Identify basic appeal
D) Measure market potential

D
Scenario: Rookie Chong
John Chong is a rookie in global business, but wants to sell his product, Zulu doll, in every corner of the world. He wants to examine every potential market but wants to keep the costs low. John has asked you to explain a few things about analyzing international markets.

The income elasticity coefficient for Zulu doll is 1.2, which means the demand for Zulu doll will ________.
A) increase 1.2 percent for every 1.0 percent increase in income
B) increase 1.0 percent for every 1.2 percent increase in income
C) decrease 1.2 percent for every 1.0 percent increase in income
D) remain stagnant since 1.2 is the neutral point

A
Scenario: Rookie Chong
John Chong is a rookie in global business, but wants to sell his product, Zulu doll, in every corner of the world. He wants to examine every potential market but wants to keep the costs low. John has asked you to explain a few things about analyzing international markets.

In which step would you ask John to actually visit the country personally?
A) Assess the national business environment
B) Select the market
C) Identify basic appeal
D) Measure market potential

A
Scenario: Markowitz Tools
Susan Markowitz is analyzing potential markets where Markowitz Tools can sell its products, and she has narrowed her research to three markets. Country A is a developing country with a low literacy rate, Country B has a group-oriented culture, and Country C is a highly developed nation.

Which of the following would be most appropriate for conducting primary market research in Country A?
A) Internet research
B) Verbal questioning
C) Written surveys
D) Trade Information Center research

B
Scenario: Markowitz Tools
Susan Markowitz is analyzing potential markets where Markowitz Tools can sell its products, and she has narrowed her research to three markets. Country A is a developing country with a low literacy rate, Country B has a group-oriented culture, and Country C is a highly developed nation.

If Susan wants to obtain information in the least expensive way, she should use ________.
A) secondary market research
B) consumer panels
C) primary market research
D) large focus groups followed by surveys

A
Scenario: Markowitz Tools
Susan Markowitz is analyzing potential markets where Markowitz Tools can sell its products, and she has narrowed her research to three markets. Country A is a developing country with a low literacy rate, Country B has a group-oriented culture, and Country C is a highly developed nation.

Which of the following would be most appropriate for conducting primary market research on attitudes, behaviors, and purchasing habits in Country B?
A) Personal interview
B) Focus group
C) Consumer panel
D) Asian Development Bank records review

C
Scenario: Markowitz Tools
Susan Markowitz is analyzing potential markets where Markowitz Tools can sell its products, and she has narrowed her research to three markets. Country A is a developing country with a low literacy rate, Country B has a group-oriented culture, and Country C is a highly developed nation.

Each of the following would be most appropriate for conducting secondary market research on Country C EXCEPT ________.
A) International Trade Center data review
B) World Fact Book research
C) Internet research
D) focus groups

D
Scenario: Indy Bats, LLC
Indy Bats, LLC, is looking for new markets. Matt Johnson has been appointed head of a special task force that has been given the responsibility of identifying new markets for the company’s products. The company is especially interested in exploring emerging economies.

To get a rough estimate of the overall size of an emerging market’s economy, Matt should examine the nation’s ________.
A) market intensity
B) market size
C) market growth rate
D) market consumption capacity

B
Scenario: Indy Bats, LLC
Indy Bats, LLC, is looking for new markets. Matt Johnson has been appointed head of a special task force that has been given the responsibility of identifying new markets for the company’s products. The company is especially interested in exploring emerging economies.

For several emerging markets, Matt has collected data on the number of telephones, TVs, and fax machines per capita, and population per retail outlet, which helps determine ________.
A) country risk
B) commercial infrastructure
C) market growth rate
D) market size

B
Scenario: Indy Bats, LLC
Indy Bats, LLC, is looking for new markets. Matt Johnson has been appointed head of a special task force that has been given the responsibility of identifying new markets for the company’s products. The company is especially interested in exploring emerging economies.

If Matt wants to estimate an emerging market’s spending capacity, he should focus on the ________.
A) population in the middle class
B) need for consumer products
C) demand for consumer and industrial products
D) population in all socio-economic classes

A
Scenario: Indy Bats, LLC
Indy Bats, LLC, is looking for new markets. Matt Johnson has been appointed head of a special task force that has been given the responsibility of identifying new markets for the company’s products. The company is especially interested in exploring emerging economies.

If Matt wants to estimate the extent to which free-market principles predominate in an emerging market, Matt should consider the variable called ________.
A) country risk
B) economic freedom
C) political freedom
D) market intensity

B