PART I - MULTIPLE CHOICE (4 points)

Select the best answer to the following multiple choice questions.

1) The most general term for the global phenomenon involving reciprocal business interactions
between parties in various countries is known as:
A) switch trading.
B) barter.
C) offset.
D) compensation trading.
E) countertrade.

2) Gillette markets its flagship MACH3 razor in more than 100 countries around the world. The
MACH3 is available virtually everywhere that consumers shop for personal-care products;
because of its advanced 3-blade design, the MACH3 typically costs more than other wet-shaving
systems. Which generic strategy is evident in Gillette's global marketing effort of MACH3?
A) cost leadership
B) differentiation
C) cost focus
D) focused differentiation
E) consumer focus

3) Which type of countertrade arrangement is required by governments seeking to reduce the

budgetary impact of expenditures for defense or telecommunications?
A) barter
B) switch trading
C) offset
D) compensation trading
E) none of the above

4) To win a contract to supply the United Kingdom with AWACS military aircraft, Boeing
agreed to purchase products from the United Kingdom whose value was equivalent to 130% of
the contract. This type of pricing arrangement, which is common when the customer is a foreign
government and the product has military applications, is known as:
A) barter.
B) switch trading.
C) compensation trading.
D) offset.
E) dumping.

5) When one of the parties to a barter transaction is not willing to accept the goods included in
the transaction, that party is likely to utilize the services of a:
A) switch trader.
B) Foreign Trade Organization.
C) Foreign Sales Corporation.
D) Mittelstand owner.
E) broker.

6) In choosing an export market expansion strategy, a market concentration strategy is

characterised by:
A. funnelling resources that can be made available to a small number of markets.
B. a gradual rate of growth in the number of markets served.
C. both of the above.
D. none of the above.
E. spreading resources to any available markets.

7) ________-commerce is one of the significant marketing opportunities made possible by the

digital revolution.
A) Multinational
B) Mobile
C) Multisegment
D) Marginal-cost
E) Multilingual

8) Suppose a company selling in various country markets makes statements such as "we know
what the customer wants, and he or she will have to pay for it." This is an indication of a(n)
_____ approach to setting prices.
A) ethnocentric
B) polycentric
C) regiocentric
D) geocentric
E) adaptation

9) If company managers decide to set the export price for a particular product at an amount
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equivalent to the home-country price, they would be using which approach to pricing?
A) ethnocentric
B) polycentric
C) regiocentric
D) geocentric
E) extension pricing

10) Parallel importing occurs when companies employ a(n) ________ multinational pricing
policy that calls for setting different prices in different country markets.
A) ethnocentric
B) polycentric
C) regiocentric
D) geocentric
E) extension

11) The unauthorized distribution of trademarked goods to exploit price differentials in world
markets is known as:
A) market skimming.
B) black marketing.
C) gray marketing.
D) dumping.
E) licensing.

12) If a company sells products in export markets at prices that are below fair market value and
that can harm producers in the export market that company may be accused of:
A) market skimming.
B) using offsets.
C) pursuing artificially high margins.
D) dumping.
E) gray marketing.

13) Web sites can be classified by purpose as represented by the term:

A) matrix sites.
B) international sites.
C) geographic sites.
D) promotion sites.
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E) regional sites.

14) Web sites that provide news and entertainment and support a company's PR efforts are
known as:
A) company sites.
B) transaction sites.
C) promotion sites.
D) content sites.
E) cyber sites.

15) Amazon.com, the leading Internet bookseller, allows users to purchase books, CDs, and
other products online. Amazon.com is primarily a(n) _________ site.
A) promotion
B) content
C) transaction
D) execution
E) cyber

16) Some global marketers make the strategic decision to establish a presence on the Web
without offering transaction opportunities even though the product could be sold that way. Such
sites are known as:
A) company sites.
B) transaction sites.
C) promotion sites.
D) content sites.
E) cyber sites.

PART II (4 points) – You have 20 questions in this section.

1. Although international trade grew rapidly in total amount during the last half of the 20th
century, its relative importance decreased in most economies.
(a) True.
(b) False.
2. While imports provide consumers with an increase in the supply and variety of goods, they do
not provide any benefits to domestic industry.
(a) True.
(b) False.
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3. One lap top perchild is a program run by Microsoft.
(a) True.
(b) False.
4. Experienced international marketers virtually never fail to determine if there is an adequate
market for their products or services prior to market entry.
(a) True.
(b) False.
5. With the introduction of the Euro, the European customers comprise a single market in every
way.
(a) True.
(b) False.
6. Market segmentation is a process of breaking down overall markets into segments of types
of customers for particular products in particular countries.
(a) True.
(b) False.
7. In market segmentation, ‘actionability’ refers to deciding whether or not to take action.
(a) True.
(b) False.
8. In the contractible method of market selection procedures, you work outward from the core
market to the nearest neighbours.
(a) True.
(b) False.
9. The expansive method of market selection is sometimes called the nearest neighbour
approach.
(a) True.
(b) False.
10. There are many possible methods to use in export market segmentation and applying mixed
criteria can create the most meaningful segments.
(a) True.
(b) False.

PART III (2 points)

1. (1 points) What is market segmentation, and why is it more complex for foreign markets than
it is for domestic markets?
2. (1 points) What is contract manufacturing? Compare Licensing and contrat manufacturing.