Test Bank For Global Marketing Contemporary Theory Practice and Cases 1st Edition Alon Full Download

Test Bank for Global Marketing Contemporary Theory Practice and Cases, 1st Edition: Alon
Test Bank for Global Marketing Contemporary

Theory Practice and Cases, 1st Edition: Alon
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Chapter 7
Selecting International Markets
Multiple Choice Questions
1. When a firm makes a strategic decision to enter foreign markets and adapt to
international environments, _____________________ has occurred.
A. internationalization
B. globalization
C. standardization
D. market selection
2. After a firm decides it will expand internationally, its next step is to

_____________________________________.
A. hire a global sales force

B. locate specific market opportunities
C. decide which entry mode to utilized
D. determine the expansion strategy
3. Of the four Ansoff expansion strategies, the one representing the least risk is
____________________________.
A. market development
B. diversification
C. product development
D. market penetration
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4. Tactics such as implementing more aggressive advertising and price discounts
are associated with ____________________________.
A. product development
B. diversification
C. market penetration
D. market development
True / False Questions
5. In the Ansoff matrix, only a market development strategy can pertain to

internationalization.
True False
6. Morris is a sales manager for organizational software firm Cleveco. In checking

his e-mail he notes an inquiry from a firm in Dubai. His resultant sale in this
market reflects a ______________________, ___________________________
motive for internationalization.
A. reactive, external
B. reactive, internal
C. proactive, internal
D. proactive, external
7. When management believes that there are firm-specific assets that can be
exploited abroad, they will act on the basis of ___________________.
A. inactive
B. active
C. proactive
D. reactive
8. Market, resource, efficiency and strategic resource-seeking comprise the four

categories of __________________________.
B. diversification
C. reactive internationalization motives
D. proactive internationalization motives
9. Roto-molder Inpack Corporation purchased Innovate Technologies, holder of a

patent for a quick-change mold adapter. Through its acquisition, Inpack is
seeking __________________________.
A. new markets
B. strategic resources
C. resources
D. raw materials
10. Efficiency-seekers are usually firms that have been already established abroad.
True False
11. When Glove-Tex, a producer of protective rubber gloves, purchases a rubber

plantation in Malaysia, it exhibits a ______________-seeking motive for
A. strategic resource
B. distribution
C. resource
D. market
12. The Roving Export Managers (ROV) deployed by the Israel Export Institute
represent a change agent associated with strategic resources.
True False
13. Removal of export barriers, but not investment barriers, serves as a motive for
True False
14. Generally speaking, the cost of information acquisition in foreign markets is far
more expensive than acquiring information in internal markets.
True False
15. When the benefits of internalization outweigh its costs,
________________________ occurs.
A. foreign direct investment

B. licensing
C. franchising
D. contract manufacturing
16. The idea that foreign entrants will employ the strategy needing the least product
adaptation is called similitude.
True False
17. According to the Uppsala model of internationalization, firms first enter markets
______________________________________.
A. that are psychically close to their home base

B. that are geographically close to their home base
C. without regard to the psychic distance of the market from the home base
D. without regard to psychic or geographic distance
18. The first stage in the International Product Life Cycle model involves
________________________________.
A. establishing manufacturing facilities in foreign markets

B. licensing production technology
C. exporting products specifically designed for foreign markets
D. exporting domestically-produced goods designed for the home market
19. One critique of Vernon's IPLC model is that competitors are able to imitate
products more rapidly than the model presumes.
True False
20. During the maturity stage of the IPLC,

______________________________________________________________.
A. American firms experience competition primarily from developing countries

B. products become more of a commodity and lose much of their competitive
advantage
C. American firms can retain their foreign market positions via exporting
D. foreign competitors experience difficulty producing the American product
21. The Uppsala model theorizes that firms internationalize by progressing through a
series of stages based upon _________________.
A. geographic proximity
B. government incentives
C. experiential learning and commitment of resources
D. level of domestic sales
22. By what motives was the 'born global' firm Infomedia driven to internationalize?
A. External, reactive.
B. Internal, proactive.
C. Internal, reactive.
D. External, reactive.
23. Mattson and Hertz postulate that international networks are governed by the
market rather than by exchange relationships.
True False
24. Global business relationships in which contracts and customers are highly
interdependent are ___________________ -based.
A. market
B. network
C. competitor
D. supplier
25. All of these scenarios represent options for network formation except
______________________.
A. creating new relations to actors in networks

B. using existing contacts in order to connect to new networks
C. exploiting existing relationships in current networks
D. creating new networks in the country of expansion
26. A central point in Network Theory is that the different processes within a company
cannot be explained without analyzing the company's method of
True False
27. The cost of making an economic exchange is known as a(n)
___________________________.
A. transaction cost
B. change cost
C. economic cost
D. cost of doing business
28. When Hussein participates in a U.S. Department of commerce trade mission to

identify new distributors in Singapore, his travel and lodging are considered
________________________ costs.
A. search and information

B. bargaining
C. governance
D. monitoring
29. Golda is finalizing a distributor agreement with a new partner in Costa Rica. Her
attorneys have submitted an invoice for their work on the contract. Golda has
incurred a(n) _____________________________ cost.

B. monitoring
C. governance
D. bargaining
30. When RCA sold its proprietary technology for the product of color televisions to
Japanese companies, ______________________ was realized.
A. monitoring risk
B. trademark risk
C. production risk
D. dissemination risk
31. Dissemination risk occurs when control over an asset such as a brand name,
patent or knowledge is high.
True False
32. According to transaction cost theory, a firm will tend to _____________________

when transaction costs are ______________.
A. produce abroad, low

B. export, low
C. export, high
D. exit the foreign market, high
33. Dunning's OLI model suggests three conditions are drivers of foreign market entry
mode, including _______________________, ________________________ and
______________________.
A. ownership, licensing, investment

B. ownership, location, internalization
C. observing, locating, investigating
D. ownership, location, investment
34. In the OLI model, ownership benefits derive from monopolistic advantages such
as economies of scale and managerial experience.
True False
35. Raw material availability and a well-developed transportation system are

examples of ___________________ advantages according to OLI.
A. location
B. ownership
C. internalization
D. network
36. Protection of property rights and assurance of quality control are examples of
______________________ advantages.
A. both transactional and location

B. transactional
C. internalization
D. location
37. Colleen has determined that the four most critical elements of market demand for
wallpaper include age of housing stock, number of homes owned, savings rate,
and overall economic indicators. She uses these factors to construct a grid
determining potential for wallpaper purchases in several countries. She has
created a(n) ___________________.
A. APG grid
B. quadrant analysis
C. multiple factor index
D. OLI grid
38. The Boston Consulting Group matrix is more appropriate for selecting countries
for market entry.
True False
39. The selection of one or a relatively few countries with the objective of intensive
market penetration is known as a ________________ strategy.
A. concentration
B. single market
C. diversification
D. competition
40. SMEs with limited resources and limited competition may find a concentration
market strategy preferable.
True False
41. The calculation that relates the value of investment in marketing to the revenue
generated is known as the ________________.
A. sales response function

B. transaction cost analysis
C. BCG model
D. multiple factor model
Chapter 7 Selecting International Markets Answer Key
1. When a firm makes a strategic decision to enter foreign markets and adapt to
international environments, _____________________ has occurred.
A. internationalization
B. globalization
C. standardization
D. market selection
Correct!
2. After a firm decides it will expand internationally, its next step is to

_____________________________________.
A. hire a global sales force

B. locate specific market opportunities
C. decide which entry mode to utilized
D. determine the expansion strategy
This would not necessarily be a required activity depending on the mode of

entry selected for the process.
3. Of the four Ansoff expansion strategies, the one representing the least risk is
____________________________.
A. market development
B. diversification
C. product development
D. market penetration
Market development involves risk by virtue of the firm's financial investment in

tapping the new market, and the uncertainty associated with the endeavor.
4. Tactics such as implementing more aggressive advertising and price discounts

are associated with ____________________________.
B. diversification
C. market penetration
D. market development
In this strategy new products would be used to increase revenue and

profits. Price discounting would not be a factor as newly-introduced products
are not ready to be discounted.
5. In the Ansoff matrix, only a market development strategy can pertain to
FALSE
While only a market development strategy fits the technical definition of

internationalization as the process of adapting firms to international
environments, it can be seen by Figure 7-1 that most example firms have
adopted all four Ansoff strategies at one time or another.
6. Morris is a sales manager for organizational software firm Cleveco. In

checking his e-mail he notes an inquiry from a firm in Dubai. His resultant sale
in this market reflects a ______________________,
___________________________ motive for internationalization.
A. reactive, external
B. reactive, internal
C. proactive, internal
D. proactive, external
Correct!
7. When management believes that there are firm-specific assets that can be
exploited abroad, they will act on the basis of ___________________.
A. inactive
B. active
C. proactive
D. reactive
This answer is incorrect because inactivity implies that no effort to

internationalize has occurred.
8. Market, resource, efficiency and strategic resource-seeking comprise the four

categories of __________________________.
B. diversification
C. reactive internationalization motives
D. proactive internationalization motives
Product development activities are not categorized in these terms, so this

answer is incorrect.
9. Roto-molder Inpack Corporation purchased Innovate Technologies, holder of a
patent for a quick-change mold adapter. Through its acquisition, Inpack is
seeking __________________________.
A. new markets
B. strategic resources
C. resources
D. raw materials
Since Inpack is purchasing Innovate to obtain a patent, it is not necessarily

seeking new markets, but rather, a discrete technology, which is considered a
strategic resource.
10. Efficiency-seekers are usually firms that have been already established
abroad.
TRUE
Correct!
11. When Glove-Tex, a producer of protective rubber gloves, purchases a rubber
plantation in Malaysia, it exhibits a ______________-seeking motive for
A. strategic resource
B. distribution
C. resource
D. market
Glove-Tex is not seeking a strategic resource in its purchase, but rather, an

ample and inexpensive resource for one of its main raw materials, rubber.
Remember that to be strategic, a resource must provide knowledge, patents
and/or skills embedded in human resources.
12. The Roving Export Managers (ROV) deployed by the Israel Export Institute
represent a change agent associated with strategic resources.
TRUE
Correct!
13. Removal of export barriers, but not investment barriers, serves as a motive for
FALSE
The removal of barriers such as banking and investment regulations in host

countries can also be a motivator for service institutions such as banks to
establish branches or affiliates abroad, which constitutes internationalization.
14. Generally speaking, the cost of information acquisition in foreign markets is far
more expensive than acquiring information in internal markets.
TRUE
Correct!
15. When the benefits of internalization outweigh its costs,

________________________ occurs.
A. foreign direct investment

B. licensing
C. franchising
D. contract manufacturing
Correct!
16. The idea that foreign entrants will employ the strategy needing the least
product adaptation is called similitude.
TRUE
Correct!
17. According to the Uppsala model of internationalization, firms first enter markets
______________________________________.
A. that are psychically close to their home base

B. that are geographically close to their home base
C. without regard to the psychic distance of the market from the home base
D. without regard to psychic or geographic distance
Correct!
18. The first stage in the International Product Life Cycle model involves
________________________________.
A. establishing manufacturing facilities in foreign markets

B. licensing production technology
C. exporting products specifically designed for foreign markets
D. exporting domestically-produced goods designed for the home market
See Figure 7-5 for more clarification.
19. One critique of Vernon's IPLC model is that competitors are able to imitate
products more rapidly than the model presumes.
TRUE
Correct!
20. During the maturity stage of the IPLC,

______________________________________________________________.
A. American firms experience competition primarily from developing countries

B. products become more of a commodity and lose much of their competitive
advantage
C. American firms can retain their foreign market positions via exporting
D. foreign competitors experience difficulty producing the American product
In the maturity stage, American firms experience competition from both

developed and developing countries, making this response incorrect.
21. The Uppsala model theorizes that firms internationalize by progressing through
a series of stages based upon _________________.
A. geographic proximity
B. government incentives
C. experiential learning and commitment of resources
D. level of domestic sales
The Uppsala model suggests that firms internationalize on the basis of

experiential learning and resource commitment as opposed to geographic
factors.
22. By what motives was the 'born global' firm Infomedia driven to
internationalize?
A. External, reactive.
B. Internal, proactive.
C. Internal, reactive.
D. External, reactive.
Box 7-2 discusses Infomedia's 'born global' status by stating that "Infomedia
was dragged into the world market by its customers," clearly an indication that
the firm was motivated on the basis of external (customers) and reactive
(dragged into the world market) factors.
23. Mattson and Hertz postulate that international networks are governed by the
market rather than by exchange relationships.
FALSE
Network participants are governed by exchange relationships rather than

through the market. Because many small companies do not have infinite
resources, network collaborations are seen as an important internationalization
strategy.
24. Global business relationships in which contracts and customers are highly
interdependent are ___________________ -based.
A. market
B. network
C. competitor
D. supplier
Correct!
25. All of these scenarios represent options for network formation except
______________________.
A. creating new relations to actors in networks

B. using existing contacts in order to connect to new networks
C. exploiting existing relationships in current networks
D. creating new networks in the country of expansion
This is one of the three ways that a company can form new networks during the
internationalization process.
26. A central point in Network Theory is that the different processes within a
company cannot be explained without analyzing the company's method of
FALSE
The core of Network Theory is that different processes within a company

cannot be explained without analyzing the networks that a company directly or
indirectly is a part of.
27. The cost of making an economic exchange is known as a(n)

___________________________.
A. transaction cost
B. change cost
C. economic cost
D. cost of doing business
Correct!
28. When Hussein participates in a U.S. Department of commerce trade mission to

identify new distributors in Singapore, his travel and lodging are considered
________________________ costs.

B. bargaining
C. governance
D. monitoring
Correct!
29. Golda is finalizing a distributor agreement with a new partner in Costa
Rica. Her attorneys have submitted an invoice for their work on the
contract. Golda has incurred a(n) _____________________________ cost.

B. monitoring
C. governance
D. bargaining
While Golda's travel to Costa Rica would fall into this category, her legal
expenses do not.
30. When RCA sold its proprietary technology for the product of color televisions to
Japanese companies, ______________________ was realized.
A. monitoring risk
B. trademark risk
C. production risk
D. dissemination risk
It is dissemination risk that is experienced when control over an asset such as

production technology is low. The loss of such assets carries a considerable
cost to the firm.
31. Dissemination risk occurs when control over an asset such as a brand name,
patent or knowledge is high.
FALSE
Dissemination risk occurs when control over an asset of this type is low and
consequently subject to adaptation by competitors.
32. According to transaction cost theory, a firm will tend to

_____________________ when transaction costs are ______________.
A. produce abroad, low

B. export, low
C. export, high
D. exit the foreign market, high
A firm experiencing low transaction costs would not have a reason to produce
abroad to internationalize.
33. Dunning's OLI model suggests three conditions are drivers of foreign market
entry mode, including _______________________,
________________________ and ______________________.
A. ownership, licensing, investment

B. ownership, location, internalization
C. observing, locating, investigating
D. ownership, location, investment
Dunning's criteria include ownership (who is going to produce abroad), location

(where to produce) and internalization (why produce rather than license?)
34. In the OLI model, ownership benefits derive from monopolistic advantages
such as economies of scale and managerial experience.
TRUE
Correct!
35. Raw material availability and a well-developed transportation system are

examples of ___________________ advantages according to OLI.
A. location
B. ownership
C. internalization
D. network
Correct!
36. Protection of property rights and assurance of quality control are examples of
______________________ advantages.
A. both transactional and location

B. transactional
C. internalization
D. location
Transactional advantages are not an element of Dunning's OLI model, and

location would not necessarily protect either property rights or production
quality, so this answer is incorrect.
37. Colleen has determined that the four most critical elements of market demand
for wallpaper include age of housing stock, number of homes owned, savings
rate, and overall economic indicators. She uses these factors to construct a
grid determining potential for wallpaper purchases in several countries. She
has created a(n) ___________________.
A. APG grid
B. quadrant analysis
C. multiple factor index
D. OLI grid
See Table 7-4 for more information.
38. The Boston Consulting Group matrix is more appropriate for selecting countries
for market entry.
FALSE
The BCG matrix uses a factor of market share, which is not applicable for firms
just entering a market. In addition, market growth, the second BCG factor, is
only one indicator of a country's attractiveness. Therefore it is the GE matrix
that is considered more pertinent.
39. The selection of one or a relatively few countries with the objective of intensive
market penetration is known as a ________________ strategy.
A. concentration
B. single market
C. diversification
D. competition
Correct!
40. SMEs with limited resources and limited competition may find a concentration
market strategy preferable.
TRUE
Correct!
Test Bank for Global Marketing Contemporary Theory Practice and Cases, 1st Edition: Alon
41. The calculation that relates the value of investment in marketing to the revenue
generated is known as the ________________.
A. sales response function

B. transaction cost analysis
C. BCG model
D. multiple factor model
Correct!
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Test Bank for Global Marketing Contemporary

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Visit TestBankBell.com to get complete for all chapters

Selecting International Markets

Multiple Choice Questions

2. After a firm decides it will expand internationally, its next step is to

A. hire a global sales force

True / False Questions

5. In the Ansoff matrix, only a market development strategy can pertain to

Multiple Choice Questions

6. Morris is a sales manager for organizational software firm Cleveco. In checking

8. Market, resource, efficiency and strategic resource-seeking comprise the four

9. Roto-molder Inpack Corporation purchased Innovate Technologies, holder of a

True / False Questions

11. When Glove-Tex, a producer of protective rubber gloves, purchases a rubber

True / False Questions

Multiple Choice Questions

A. foreign direct investment

True / False Questions

Multiple Choice Questions

A. that are psychically close to their home base

A. establishing manufacturing facilities in foreign markets

True / False Questions

Multiple Choice Questions

20. During the maturity stage of the IPLC,

A. American firms experience competition primarily from developing countries

True / False Questions

Multiple Choice Questions

A. creating new relations to actors in networks

True / False Questions

Multiple Choice Questions

28. When Hussein participates in a U.S. Department of commerce trade mission to

A. search and information

A. search and information

Multiple Choice Questions

32. According to transaction cost theory, a firm will tend to _____________________

A. produce abroad, low

A. ownership, licensing, investment

True / False Questions

Multiple Choice Questions

35. Raw material availability and a well-developed transportation system are

A. both transactional and location

Multiple Choice Questions

True / False Questions

Multiple Choice Questions

A. sales response function

Multiple Choice Questions

2. After a firm decides it will expand internationally, its next step is to

A. hire a global sales force

This would not necessarily be a required activity depending on the mode of

Market development involves risk by virtue of the firm's financial investment in

4. Tactics such as implementing more aggressive advertising and price discounts

In this strategy new products would be used to increase revenue and

True / False Questions

While only a market development strategy fits the technical definition of

Multiple Choice Questions