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International Business
Q:
Five valuesrelationships, objectivity, competitiveness, equality, and punctualitythat are held strongly and deeply by most Americans seem to frequently cause misunderstandings and bad feelings in international business negotiations.
Q:
The British, German, and American businesspeople are found to fall in the middle of most scales for dimensions of negotiating behaviors.
Q:
Israeli business negotiators use the lowest percentage of self-disclosure, yet they also use, by far, the highest percentages of promises and recommendations.
Q:
The style of United Kingdom negotiators is the most aggressive of all cultures.
Q:
The behavior of the businesspeople in Asian countries tends to be similar in style.
Q:
The Japanese business negotiation style comprises an infrequent use of no and you and facial gazing, as well as more frequent silent periods.
Q:
The variation across cultures is greater when comparing linguistic aspects of language than when the verbal content of negotiations is considered.
Q:
Verbal tactics used during negotiations differ vastly across diverse cultures.
Q:
Disagreements among foreign team members, in the form of side conversations, are often followed by concessions to the other negotiating party.
Q:
Americans are lacking in foreign language skills more than most countries in international business negotiations.
Q:
Cultural differences in nonverbal behaviors are almost always hidden below our awareness.
Q:
Cultural differences cause four kinds of problems in international business negotiations, and these problems occur at the levels of language, nonverbal behaviors, verbal styles, and values.
Q:
Japan's negotiation style is unique. On almost every dimension of negotiation style considered in a study of 17 countries, the Japanese are on or near the end of the scale.
Q:
Generalizations about the negotiation style of a region are usually correct.
Q:
Age and experience are known to affect the negotiation behaviors of individuals.
Q:
Individual personalities and backgrounds are of no relevance at the international negotiation table.
Q:
In the age of the Internet and virtual conferencing, face-to-face negotiations are rare.
Q:
The costs of production may be lowered if a firm ships unassembled goods to a free trade zone (FTZ) in an importing country because
A) wages and other overheads may be higher in an FTZ.
B) locally produced components do not qualify for tariffs.
C) unassembled goods may qualify for lower freight rates.
D) the finished goods cannot be exported to other countries.
E) goods imported in an FTZ qualify for the same level of tariffs as other imported goods.
Q:
A marketer may face lower costs by shipping unassembled goods to a free trade zone (FTZ) in an importing country because
A) locally produced components may not be used in production.
B) labor costs may be lower in the importing country.
C) FTZs levy higher taxes and surcharges on imported goods.
D) ocean transportation rates may not be affected by the weight and volume of the components.
E) duties may be assessed at a higher rate for unassembled goods.
Q:
By shipping unassembled goods to a free trade zone (FTZ) in an importing country, a marketer can typically lower costs because
A) labor costs are higher in the importing country.
B) the final prices of the goods are adjusted for inflation.
C) use of unassembled goods gives the marketer immunity from dumping penalties.
D) duties are typically assessed at lower rates for unassembled goods.
E) local content used in production is low.
Q:
The creation of a free trade zone may lead to
A) a decline in exports.
B) an increase in taxes and duties levied on a product.
C) a reduction in the price escalation.
D) a decline in imports.
E) an increase in labor costs and overheads.
Q:
Lower prices to the buyer may also mean lower tariffs, because most tariffs are levied on a(n) ________ basis.
A) specific
B) alternative
C) accrual
D) shorter, lower
E) ad valorem
Q:
What is the most probable reason a manufacturer would choose to conduct its manufacturing operations in a third country?
A) to standardize middlemen margins
B) to reduce the credit risk of the seller
C) to increase the capitallabor ratio
D) to avoid antidumping duties
E) to reduce manufacturing costs
Q:
When a company exports a product from the United States to another country, the company is most likely to be unable to determine the ultimate price of a product if
A) the channels of distribution are short.
B) the number of middlemen in its distribution channels is low.
C) large orders are placed by retailers.
D) marketing and distribution channel infrastructures are well developed.
E) the middleman markups are not standardized.
Q:
When the Indian rupee depreciated against the U.S. dollar, PC manufacturers who were dependent on imported components had to either absorb the increased cost or
A) raise the quantity of inputs they used in production.
B) give discounts to their customers.
C) increase the wages that they paid to labor.
D) increase the production of PCs.
E) raise the price of PCs.
Q:
When the value of the dollar is weak relative to the buyer's currency, sellers usually use ________ pricing.
A) competition-based
B) demand-based
C) premium
D) psychological
E) cost-plus
Q:
In a deflationary market, in order to win the trust of consumers, it is essential for a company to
A) engage in forfaiting agreements with consumers.
B) spend more on advertising and stall the production of products.
C) allow prices to escalate and target the price insensitive segment of the market.
D) keep prices low and raise brand value.
E) form a cartel to control the dynamics of the market.
Q:
What primary discriminatory tax must be taken into account in foreign competition?
A) transfer taxes
B) tariffs
C) tolls
D) excise taxes
E) inflation taxes
Q:
________ duties are levied as a percentage of the value of the goods imported.
A) Specific
B) Protective
C) Prohibitive
D) Ad valorem
E) Compound
Q:
A(n) ________ duty is a flat charge per physical unit imported.
A) ad valorem
B) compound
C) prohibitive
D) alternative
E) specific
Q:
What results from the added costs incurred as a result of exporting products from one country to another?
A) price deflation
B) penetration pricing
C) price escalation
D) price gouging
E) predatory pricing
Q:
In most cases, the reason products cost relatively little in one country and cost more in another is the
A) profiteering measures taken by exporting companies.
B) consistency in perception of quality in all countries.
C) inelastic demand of most consumer goods.
D) requirement that all export goods must use set skimmed price.
E) higher costs of exporting.
Q:
Cosmeticon, a U.S.-based firm, has recently started exporting cosmetics to India. Cosmeticon has introduced a new range of mineral-based makeup products for the first time in the Indian market. As Cosmeticon has no competitors in this segment of the Indian cosmetics market, it has set a very high price for its products in order to reach the premium, price insensitive segment of the market. This is an example of
A) penetration pricing policy.
B) psychological pricing policy.
C) bundling.
D) price skimming.
E) cost-based pricing policy.
Q:
A ________ policy is used to stimulate market and sales growth by deliberately offering products at low prices.
A) penetration pricing
B) variable-cost pricing
C) premium pricing
D) price skimming
E) full-cost pricing
Q:
If the supply of a product in a market is limited, a company may follow a ________ approach to maximize revenue and to match demand to supply.
A) penetration
B) psychological pricing
C) variable-cost pricing
D) predatory pricing
E) price skimming
Q:
A company uses ________ when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received.
A) penetration pricing
B) everyday low pricing
C) predatory pricing
D) price skimming
E) psychological pricing
Q:
Which approach to pricing is most suitable when a company has high variable costs relative to its fixed costs?
A) full-cost pricing
B) marginal-cost pricing
C) static-cost pricing
D) demand-based pricing
E) premium pricing
Q:
Companies that use ________ pricing insist that no unit of a similar product is different from any other unit in terms of cost and that each unit must bear its full share of the total fixed and variable cost.
A) full-cost
B) fixed-cost
C) variable-cost
D) demand-based
E) premium
Q:
________ pricing is a practical approach to use when a company has high fixed costs and unused production capacity.
A) Full-cost
B) Cost-plus
C) Marginal-cost
D) Demand-based
E) Premium
Q:
What characterizes the variable-cost pricing approach?
A) Prices are often set on a cost-plus basis, that is, total costs plus a profit margin.
B) No unit of a similar product is different from any other unit in terms of cost.
C) Each unit must bear its full share of the total fixed and variable cost.
D) This approach is suitable when a company has high variable costs relative to its fixed costs.
E) Any contribution to fixed cost after variable costs are covered is profit to the company.
Q:
Marianne's Chocolates sell well in the U.S. at a price of $24 per pound, and she has overproduced one kind of chocolate bar. Marianne has decided to see if she can sell them in Mexico, so she sets a price that is just over her cost. She figures if she makes even a little money, it would be worth it. Marianne is using ________ pricing.
A) full-cost
B) fixed-cost
C) variable-cost
D) demand-based
E) premium
Q:
In ________ pricing, a firm is concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets.
A) full-cost
B) fixed-cost
C) variable-cost
D) demand-based
E) premium
Q:
Firms that are unfamiliar with overseas marketing and firms that produce industrial goods orient their pricing solely on the basis of
A) cultural differences in perceptions of pricing.
B) market segmentation from market to market.
C) the costs of production of the goods.
D) market segmentation from country to country.
E) competitive pricing in the market.
Q:
________ distribution, a practice often used by companies to maintain high retail margins to encourage retailers to maintain the exclusive-quality image of a product, can create a favorable condition for parallel importing.
A) Exclusive
B) Speculative
C) Intensive
D) Lateral
E) Dual
Q:
Gift Group Inc., an importing organization in New York, buys perfume from a company in France for $13 a unit. Unknown to the French company, Gift Group sells this product in the United States for $19 a unit. This leads to a loss of revenue for the French company as it also sells its perfume in the United States but for a higher price of $22. What concept does this demonstrate??
A) black-listed importing
B) indirect importing
C) circular importing
D) co-mingled importing
E) parallel importing
Q:
A company that views pricing as a static element in a business decision most probably
A) places a high priority on foreign business.
B) sets prices to achieve specific objectives such as targeted return on profit.
C) views export sales as active contributions to sales volume.
D) views domestic sales as an insignificant source of revenue.
E) places a low priority on foreign business.
Q:
What is most likely to be true of a company that views prices as an active instrument of accomplishing marketing objectives?
A) The company sets prices to achieve specific objectives.
B) The company follows market prices to achieve specific objectives.
C) The company exports only excess inventory.
D) The company views its export sales as an insignificant source of revenue.
E) The company places a low priority on foreign business.
Q:
In general, price decisions are viewed in two ways: pricing as a static element in a business decision, and pricing
A) that depends on factors that are often beyond the control of a company.
B) as more a phenomenon of luck than planning.
C) as an active instrument of accomplishing marketing objectives.
D) that is determined by local sales managers.
E) that is static no matter the market.
Q:
Assuming that an international marketer has produced the right product, used the proper channel of distribution, and promoted the goods correctly, the effort will fail if the international marketer fails to
A) inform the host government about all its marketing objectives.
B) set the right price for the goods or services.
C) set the import tariff for the goods or services.
D) form a joint venture in order to sell the product.
E) work on a franchise basis in the country.
Q:
Sales on open accounts are recommended when shipping is hazardous.
Q:
In bills of exchange, the buyer assumes all the risk until the payment is made.
Q:
The portion of international business handled on a cash-in-advance basis is not large and this is typically used when credit is doubtful.
Q:
Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.
Q:
An irrevocable, confirmed letter of credit means that a U.S. bank accepts responsibility to pay the seller regardless of the financial situation of the buyer or foreign bank.
Q:
Letters of credit shift the buyer's credit risk to the bank issuing the letter of credit.
Q:
Domestic cartelization is legal in the United States.
Q:
Cartels have the ability to maintain control of markets for indefinite periods.
Q:
Paul's oil delivery company was struggling to make ends meet, so it conspired with the other oil delivery companies in the area to set prices, allocate market territories, and redistribute profits. By controlling the market in this way, the companies created a cartel.
Q:
Administered pricing is an attempt to establish prices for an entire market.
Q:
Barter houses help countries negotiate prices for imports and exports and also provide facilities for cash payments and receipts.
Q:
Countertrading does not benefit countries that face a shortage of hard currencies with which to trade.
Q:
Gerard was concerned that he would not be able to get maintenance and servicing on equipment used in his overseas operation. Leasing the equipment would be the best option for Gerard.
Q:
For countervailing duties to be invoked, it must be shown that prices are higher in the importing country than in the exporting country.
Q:
In a free trade zone, payment of import duties is postponed until the product leaves the free trade zone and enters the country.
Q:
Involving fewer middlemen in distribution means higher overall taxes.
Q:
Longer channels of distribution are more useful for keeping prices under control than shorter channels of distribution.
Q:
Eliminating costly functional features of a product or lowering overall product quality can reduce price escalation.
Q:
The international marketer must rely on experience and marketing research to determine middleman costs because no convenient source of data on middleman costs is available.
Q:
Price escalation could lead to the sales of exported goods being confined to a limited segment of wealthy, price-insensitive customers.
Q:
When the U.S. dollar strengthens, U.S. exports will decrease.
Q:
With deflation, consumers face ever-rising prices that eventually exclude many of them from the market.
Q:
Deflation results in ever-decreasing prices, creating a positive result for consumers, but putting pressure on everyone in the supply chain to lower costs.
Q:
In countries where large shares of the population are moving into middle-income classes, penetration pricing will depress market growth.
Q:
Companies should use the full-cost pricing approach when it has high fixed costs relative to its variable costs.
Q:
To restrict the gray market, companies must establish and monitor controls that effectively police sales channels.
Q:
The possibility of a parallel market occurs when price differences are less than the cost of transportation between two markets.
Q:
A product sold in one country may be exported to another and undercut the prices charged in that country.
Q:
Companies that use pricing to achieve marketing objectives use pricing as a static element.
Q:
Setting the right price for a product can be the key to success or failure in international markets.
Q:
What is the difference between forfaiting and factoring?