MCQS

Q&A

MCQS
Unit 4
1. Export/ import financing in which a bank acts as an intermediary without accepting
financial risk is called documentary collection
2. A document ordering an importer to pay an exporter a specified sum or money at a
specified time is called a (an) Draft/bill of exchange
3. Export/ import financing in which the importer's bank issues a document stating that the
bank will pay the exporter when the exporter fulfills the terms of the document is called a
(an) Letter of credit
4. A contract between the exporter and carrier that specifies destination and shipping costs of
the merchandise is called a(n) Bill of lading
5. Export/import financing in which an exporter ships merchandise and later bills the
importer for its value is called Open account
6. Export/import financing in which an importer pays an exporter for merchandise before it
is shipped is called Advance payment

Unit 5
1. Efforts by a company to reach distribution channels and target customer through
communications such as personal selling, advertising, public relations, and direct marketing
are called its Promotional mix
2. A promotional strategy designed to create buyer demand that will encourage channel
members to stock a company's product is called a Pull strategy
3. A Push strategy is a promotional strategy designed to pressure channel members to carry a
product and promote it to final users.
4. The process of sending promotional messages about products to target markets is called
Marketing communication
5. Dual extension method extends the same home-market product and marketing promotion
into target markets.
6. Under Product extension – communication adaptation method, a company extends the
same product into new target markets but alters its promotion.
7. Under Product adaptation – communication extension method, a company adapts its
product to the requirements of international market while retaining the product's original
marketing communication.
8. Dual adaptation method adapts both the product and its marketing communication to suit
the target market.
9. Planning, implementing, and controlling the physical flow of a product from its point of
origin to its point of consumption is called Distribution
10. The physical path that a product follows on its way to customers is called a Distribution
channel
11. An Exclusive channel is one in which a manufacturer grants the right to sell its product to
only one or a limited number of resellers.
12. An Inclusive channel is one in which a producer grants the right to sell its product to
many resellers.
13. A/An Channel length refers to the number of intermediaries between the producer and
the buyer.
14. The value of a product relative to its weight and volume is called its Value density
15.A pricing policy in which one selling price is established for all international markets is
called Worldwide pricing
16. A pricing policy in which a product has a different selling price in export markets than it
has in the home market is called Dual pricing
17. A(An) Transfer price is the price charged for products sold between a company's
divisions or subsidiaries.
18. A free-market price that unrelated parties charge one another for a specific product is
called a(n) Arm’s length price
19. Countermarketing is the attempt to destroy unwholesome demand for products that are
considered undesirable, e.g. cigarettes, drug, handguns, or extremist political parties.
20 Conversional marketing is the difficult task of reversing negative demand, eg. for dental
work, or hiring disabled people
21. Stimulational marketing is necessary where there's no demand, which often happens
with new products and services.
22. Developmental marketing involves developing a product or service for which there is
clearly a talent demand, eg: a non-polluting and fuel-efficient car.
23. Synchromarketing involves altering the times pattern of irregular demand, eg:for public
transport between rush hours, or for ski resorts in the summer.
24. Remarketing involves revitalizing falling demand, for example, for churches, inner city
areas, or aging film stars.
25. Demarketing is the attempt (by governments rather than private businesses) to reduce
overfull demand, permanently or temporarily, eg. for some roads and bridges during rush
hours.
26. Maintenance marketing is a matter of retaining a current (may be full) level of demand,
in the face of competition or changing tastes.

Unit 6
1. Outbound logistics is the process related to the storage and movement of the final product
and the related information flows from the end of the production line to the end user.
2. Inbound logistics is the flow, or management, of goods into a production unit or
warehouse.
3. Logistics is the management of the Now of goods, information and other resources,
between the point of origin and the point of consumption.
4. Supply chain is a network of facilities that performs the function of procurement of
materials, transformation of these materials into finished products, and the distribution of
these products to customers.
5. Logistics management is a part of supply chain management, which plans, implements,
and controls the flow and storage of goods between the point of origin and the point of
consumption.
6. Customs clearance is the act of passing goods through customs so that they can enter or
leave the country.
7. Inventory contains the raw materials, the work in process and all the finished products of a
supply chain.
8. Transportation is the movement of product from one location to another as it makes its
way from the beginning of a supply chain to the customer's handle.
9. Supply chain management is the management of materials, information, and finances as
they move in a process from supplier to consumer.
10. Reverse logistics is the process of moving products from end-user back to the origin to
recover value or for proper disposal

Unit 7
1. The company will Indemnify the policy-holder against loss of or damage to the insured
vehicle.
2. Ships' cargoes are covered by Marine insurance policies.
3. Insurance policy is a standard form contract between the insured and the insurer, which
determines the claims that the insurer is legally required to pay.
4. Insurance premium is payments to the insurance company to buy a policy and to keep it
in force.
5. General Average is the losses/ damages caused by special expenses and sacrifices that
intentionally and reasonably conducted to save the vessel, cargo and freight from a threat in
the common ocean voyage.
6. The party to an insurance arrangement who undertakes to indemnity for losses is the
Insurer/underwriter
7. Insuree/policyholder is the person or entity buying the insurance and receiving indemnity
on happening of unforeseen events.
8. The person, group, or property for which an insurance policy is issued is The subject-
matter insured
 9. Insurance is a contract whereby, in return for the payment of premium by the insured, the
insurers pay the financial losses suffered by the insured as a result of the occurrence of
unforeseen events.

Unit 9
1. A merger is a combination of two or more firms, often comparable in size, in which
all but one ceases to exist legally.
2. Firms are merged in the same industries (horizontal) or different industries
(conglomerate) and on their positions in the corporate value chain (vertical)
3. A vertical merger is when a company merges with another company in an
immediately related stage of production and distribution.
4. The acquisition of a food products firm by a computer firm would be considered a
conglomerate acquisition.
5. The combination of Coca-Cola and Pepsi would be a horizontal merger.
6. Acquisition of a target company by an acquirer/bidder with the consent or approval of
the management and board of directors of the target company is called friendly acquisition
7. Unfriendly takeover attempt by a company or raider that is strongly resisted by the
management and the board of directors of the target firm is called hostile acquisition
8. Reverse acquisition means that a smaller firm will acquire management control of a
larger and/or longer-established company and retain the name of the latter for the post-
acquisition combined.
 Q&A
Unit 4
1. What are the roles of banks in the four common payment methods?
- Active Role: Banks get involved in the payment process, supporting both import &
export, letter of credit, check the accuracy of docs and guarantee payment
- Passive Role: transfer docs and funds - DC, open account, advance payment
4. What is the difference between documents against payment (D/P) and documents agai
nst acceptance (D/A)?
- D/P: The B can only receive the documents once he has paid the sight draft. The S retai
ns title to and control over the Goods until he gets payment
- D/A: The B can get the documents just by accepting payment on a future date. The B wr
ites the word "ACCEPTED" on the draft and sign it
5. How does a documentary collection differ from a letter of credit as a means of financi
ng international trade?
- Documentary Collection: The bank acts an intermediary. The Banks do not verify the do
cuments, take risks, nor guarantee payment. The banks just control the flow of documents
- L/C provides increased assurance to both Ex and Im so long as they fulfil their obligatio
ns. The bank not only verifies the document accuracy and authenticity, but also guarantee
s payment
11. When do people use the 4 payment methods?
- Open account: 2 sides have long-established trading relation
- Advance Payment: 2 sides are unfamiliar
- L/C: the I's credit rating is questionable, The E needs an L/C to obtain financing
- Collection: there is ongoing biz relation between the Parties

Unit 5
1. What is the difference between selling concept and marketing concept?
- Selling: Persuading the customers to buy products that you already have, rather than
producing new products which customers may want
- Marketing: finding out what kinds of products customers want and then produce them;
Finding wants and filling them.
2. Distinguish need, want, demand
- Needs are basic human requirements
- Wants are needs directed to specific objects which might satisfy the need
- Demands are wants for specific products backed by an ability to pay
3. Identify at least four factors that influence a company's product policies in
international markets.
 - Companies undertake mandatory product adaptation in response to a target market's
laws and regulations.
- Companies also adapt their products to suit cultural differences
- Although companies keep their brand names consistent across markets, they often create
new product names or modify existing ones to suit local preferences.
- The image of a nation where a company is located that designs, manufactures, or
assembles a product influences buyers' perceptions of quality and reliability.
- Counterfeit goods can damage buyers' image of a brand when the counterfeits are of
inferior quality.
- Shortened product life cycles are affecting the timing of when to market internationally
4. Briefly describe the difference between a push strategy and a pull strategy. What are
some factors that affect the choice of an appropriate strategy?
- Pull strategy: A promotional strategy designed to create buyer demand that will
encourage channel members to stock a company's product.
Eg: Creating consumer demand through direct marketing techniques is a common
example of a pull strategy
- Puch Prategy: A promotional strategy designed to pressure channel members to carry a
product and promote it to final users of the product.
Eg: A push strategy is often used by manufacturers of all sorts of products commonly sold
through department and grocery stores
5. What are the five generic strategies for blending product and promotional policies for
international markets? Describe each briefly.
- Product/communications extension (dual extension) extends the same home-market
product and marketing promotion into target markets.
- Product extension, communications adaptation extends the same product into new target
markets but alters its promotion.
- Product adaptation, communications extension adapts a product to the requirements of
the international market while retaining the product's original marketing communication.
- Product/communications adaptation (dual adaptation) adapts both the product and its
marketing communication to suit the target market.
- Product invention requires that an entirely new product be developed for the target
market
6. What is the difference between exclusive and intensive channels of distribution? Give
an example of a product sold through each.
- An exclusive channel is one in which a manufacturer grants the right to sell its product
to only one or a limited number of resellers.
Eg: New car dealerships, for example, in most countries reflect exclusive distribution.
Thus Honda dealerships cannot normally sell Toyotas and Chrysler dealers cannot sell
Fords.
 - An intensive channel is one in which a producer grants the right to sell its product to
many resellers.
Eg: Large companies whose products are sold through grocery stores and department
stores typically take an intensive channel approach to distribution.

Unit 6
1. What are the major benefits of efficient logistics operations?
Cost-savings
Faster order fulfillment
Improved cash flaw
Optimized Distribution
Increased Customer satisfaction
2. What may cargo handling services include?
Cargo collection and consolidation
Cargo forwarding
Transit warehousing
Cargo tracking and tracing
Documentation handling
Customs clearance
3. What are the five major logistics activities?
Demand forecasting/ planning
Material Handling
Logistics communication
Inventory Management
Customer Service
4. What business functions does the supply chain involve?
Forecasting, Sourcing, Procurement, Material Handling, Order processing,
Manufacturing, Transportation, Logistics, Warehousing, Inventory management,
Customer service

Unit 7
1. Why is marine insurance required?
- High probability of risk occurring in transit
- Marine insurance provides protection against such risk
- MI is a custom in international trade
- Carrier liability is limited
2. What are the risks excluded from a marine insurance policy?
- Delay
 - Wear and tear
- Inherence vice
- Ullage
- Willful misconduct of the assured
3. What documents are typically requested for marine insurance claims?
- Original policy or Cert
- Invoices, packing specifications
- Original bill of lading or other transport docs
- Survey report or other documents of damage
- Landing account/Weight note

Unit 9
1. Why is there a high percentage of failure in mergers and acquisitions?
Clashes of corporate cultures
Increased complexity
Show space for integrations
Overpayment due to overestimating synergy
Unrealistic expectations about the future success of the new company
Overoptimistic managers
Poor strategies
Employees are reluctant to change
2. What are the reasons behind a horizontal merger?
To reduce competition
To increase market share
To acquire additional plants and equipment
The archive synergy and economics of scale
3. What are the reasons behind a vertical merger?
- To guarantee the supply and costs of raw materials and components
- To be closer to customers by cutting out the wholesalers and dealing directly with the
retail trade.
Unit 4
1. Export/ import financing in which a bank acts as an intermediary without accepting financial risk is
called ...
2. A document ordering an importer to pay an exporter a specified sum or money at a specified time is
called a (an) ...
3. Export/ import financing in which the importer's bank issues a document stating that the
bank will pay the exporter when the exporter fulfills the terms of the document is called a
(an) ...
4. A contract between the exporter and carrier that specifies destination and shipping costs of
the merchandise is called a(n) ...
5. Export/import financing in which an exporter ships merchandise and later bills the
importer for its value is called ...
6. Export/import financing in which an importer pays an exporter for merchandise before it
is shipped is called ...

Unit 5
1. Efforts by a company to reach distribution channels and target customer through communications such
as personal selling, advertising, public relations, and direct marketing are called its ...
2. A promotional strategy designed to create buyer demand that will encourage channel members to stock a
company's product is called a ...
3. A ... is a promotional strategy designed to pressure channel members to carry a product and promote it to
final users.
4. The process of sending promotional messages about products to target markets is called ...
5. ... method extends the same home-market product and marketing promotion into target markets.
6. Under ... method, a company extends the same product into new target markets but alters its promotion.
7. Under ... method, a company adapts its product to the requirements of international market while
retaining the product's original marketing communication.
8. ... method adapts both the product and its marketing communication to suit the target market.
9. Planning, implementing, and controlling the physical flow of a product from its point of origin to its
point of consumption is called ...
10. The physical path that a product follows on its way to customers is called a ...
11. An ... is one in which a manufacturer grants the right to sell its product to only one or a limited number
of resellers.
12. An ... is one in which a producer grants the right to sell its product to many resellers.
13. A/An ... refers to the number of intermediaries between the producer and the buyer.
14. The value of a product relative to its weight and volume is called its ...
15.A pricing policy in which one selling price is established for all international markets is called ...
16. A pricing policy in which a product has a different selling price in export markets than it has in the
home market is called ...
17. A(An) ... is the price charged for products sold between a company's divisions or subsidiaries.
18. A free-market price that unrelated parties charge one another for a specific product is called a(n) ...
19. ... is the attempt to destroy unwholesome demand for products that are considered undesirable, e.g.
cigarettes, drug, handguns, or extremist political parties.
20 ... is the difficult task of reversing negative demand, eg. for dental work, or hiring disabled people
21. ... is necessary where there's no demand, which often happens with new products and services.
22. ... involves developing a product or service for which there is clearly a talent demand, eg: a non-
polluting and fuel-efficient car.
23. ... involves altering the times pattern of irregular demand, eg:for public transport between rush hours, or
for ski resorts in the summer.
24. ... involves revitalizing falling demand, for example, for churches, inner city areas, or aging film stars.
25. ... is the attempt (by governments rather than private businesses) to reduce overfull demand,
permanently or temporarily, eg. for some roads and bridges during rush hours.
26. ... is a matter of retaining a current (may be full) level of demand, in the face of competition or
changing tastes.

Unit 6
1. ... is the process related to the storage and movement of the final product and the related information
flows from the end of the production line to the end user.
2. ... is the flow, or management, of goods into a production unit or warehouse.
3. ... is the management of the Now of goods, information and other resources, between the point of origin
and the point of consumption.
4. ... is a network of facilities that performs the function of procurement of materials, transformation of
these materials into finished products, and the distribution of these products to customers.
5. ... is a part of supply chain management, which plans, implements, and controls the flow andstorage of
goods between the point of origin and the point of consumption.
6. ... is the act of passing goods through customs so that they can enter or leave the country.
7. ... contains the raw materials, the work in process and all the finished products of a supply chain.
8. ... is the movement of product from one location to another as it makes its way from the beginning of a
supply chain to the customer's handle.
9. ... is the management of materials, information, and finances as they move in a process from supplier to
consumer.
10. ... is the process of moving products from end-user back to the origin to recover value or for proper
disposal

Unit 7
1. The company will ... the policy-holder against loss of or damage to the insured vehicle.
2. Ships' cargoes are covered by ... insurance policies.
3. ... is a standard form contract between the insured and the insurer, which determines the claims that the
insurer is legally required to pay.
4. ... is payments to the insurance company to buy a policy and to keep it in force.
5. ...is the losses/ damages caused by special expenses and sacrifices that intentionally and reasonably
conducted to save the vessel, cargo and freight from a threat in the common ocean voyage.
6. The party to an insurance arrangement who undertakes to indemnity for losses is the ...
7. ... is the person or entity buying the insurance and receiving indemnity on happening of unforeseen
events.
8. The person, group, or property for which an insurance policy is issued is ...
9. ... is a contract whereby, in return for the payment of premium by the insured, the insurers pay the
financial losses suffered by the insured as a result of the occurrence of unforeseen events.

Unit 9
1. A ... is a combination of two or more firms, often comparable in size, in which all but one ceases to exist
legally.
2. Firms are merged in the same industries (...) or different industries (...) and on their positions in the
corporate value chain (...)
3. A ... is when a company merges with another company in an immediately related stage of production and
distribution.
4. The acquisition of a food products firm by a computer firm would be considered a … acquisition.
5. The combination of Coca-Cola and Pepsi would be a ... merger.
6. Acquisition of a target company by an acquirer/bidder with the consent or approval of the management
and board of directors of the target company is called ...
7. Unfriendly takeover attempt by a company or raider that is strongly resisted by the management and the
board of directors of the target firm is called ...
8. ... means that a smaller firm will acquire management control of a larger and/or longer-established
company and retain the name of the latter for the post-acquisition combined.
 Trash can
2. What are the risks for the exporter on documentary collection method of payment?
Non-payment
Late payment
The Goods may not be accepted
3. What are the risks faced by exporters in the 4 common payment methods?
- Open account: Non-payment. The exporters lose control of the Goods
- Collection: Importer may fail to accept the B/E, or dishonor the accepted B/E at maturit
y
The Exporter may have to ship the goods back home.
- L/C: few risks. Failure to present compliant docs to the bank will result in the Exporter
losing the protection of the credit
- Advance payment: No risks associated with nonpayment. The Exporter receives paymen
t
in full before the goods are dispatched