Q&A Hero

Q: Discuss the meaning and nature of cartels. Are these groups beneficial? State an example.

Q: What is administered pricing, and how does it differ from price fixing? How is it arranged in international markets?

Q: Making price quotations for international sales requires including a number of elements that may not be relevant in domestic pricing. Explain the process and what must be considered.

Q: What is a countertrade? What are the advantages and disadvantages of countertrading?

Q: What is a tariff? What are the three basic ways in which tariffs may be levied?

Q: What are common reasons why price escalation occurs in international marketing?

Q: What is the difference between variable-cost pricing and full-cost pricing? When would a company choose one over the other?

Q: Describe what happens in parallel importing. What are the advantages and disadvantages of this practice?

Q: Differentiate the two ways price decisions are viewed.

Q: In ________, a company has an ongoing relationship with a bank that routinely buys its short-term accounts receivable at a discount. A) forfaiting B) factoring C) a barter transaction D) a cash-in-advance transaction E) an open accounts transaction

Q: Sales on open accounts are A) very common as a method of payment in foreign trade. B) generally recommended when special merchandise is ordered by the buyer. C) not generally recommended when there is political unrest in the importer's country. D) recommended when the country of the importer imposes difficult exchange restrictions. E) less risky for the seller when it involves new buyers.

Q: In a(n) ________ transaction, the seller makes a one-time arrangement with a bank or other financial institution to take over responsibility for collecting the account receivable. A) forfaiting B) factoring C) barter D) cash-in-advance payment E) open account

Q: ________ leave sellers in a position where most of the problems of international commercial finance work to their disadvantage. A) Letters of credit B) Dollar drafts C) Forfaiting contracts D) Cash in advance agreements E) Open accounts

Q: A company manufactures extremely specialized equipment for medical imaging. Because of its value, when the company exports this equipment overseas to hospitals, it generally requires ________, which is a nonrefundable deposit. A) a letter of credit B) a dollar draft C) a forfaiting contract D) cash in advance E) an open account

Q: With ________, the seller assumes all risk until the actual dollars are received. A) open accounts B) irrevocable letters of credit C) bills of exchange D) factoring agreements E) forfaiting contracts

Q: A ________, which shifts the buyer's credit risk to the bank, is not a guarantee of payment to the seller. Rather, payment is tendered only if the seller complies exactly with its terms. A) open account B) letter of credit C) bill of lading D) bill of regression E) credit agreement

Q: A(n) ________ means that once the seller has accepted the credit, the buyer cannot alter it in any way without permission of the seller. A) open account B) letter of credit C) bill of lading D) bill of regression E) sales agreement

Q: What is the typical payment procedure for established customers where the goods are delivered and the customer is billed on an end-of-the-month basis. A) an open account B) a letter of credit C) a bill of exchange D) cash in advance E) forfaiting

Q: OPEC is an example of a ________; it can control the price of oil by controlling the market. A) cabal B) monopoly C) cartel D) producers' association E) competitive market

Q: A ________ exists when various companies producing similar products or services work together to control markets for the types of goods and services they produce. A) cabal B) monopoly C) cartel D) producers' association E) competitive market

Q: What is an example of a price-fixing arrangement most directly associated with international marketing? A) price escalation B) barter houses C) letters of credit D) cartels E) countertrade

Q: In general, the end goal of all ________ activities is to reduce the impact of price competition or eliminate it. A) reciprocal pricing B) administered pricing C) free trade D) export-oriented trade E) price skimming

Q: What is true of price quotations for international sale? A) Price quotations can be made only if it is shown that prices are lower in the importing country than in the exporting country. B) Price quotations must specify the currency to be used, credit terms of the transaction, and documents required. C) The price quotation and contract should define only the quantity of goods and not necessarily the quality. D) Price quotations must be quoted only in terms of electronic trade dollars. E) Price quotations need to specify the transportation charges but need not necessarily state what type of documentation needs to be used.

Q: ________ are the primary outside source of aid for companies affected by the uncertainty of a countertrade. A) Trade unions B) Barter houses C) Industry associations D) Swap centers E) Satellite towns

Q: What do barter houses do? A) They specialize in trading goods acquired through barter arrangements. B) They negotiate barter arrangements with countries that accept the U.S. currency as a countertrade. C) They specialize in bartering with third countries for unused raw materials. D) They direct bartered goods to the World Trade Organization for its approval. E) They review disputes in barter arrangements at the request of the International Court of Justice.

Q: A crucial problem confronting a seller in a countertrade negotiation is determining the ________ for the goods offered as payment. A) delivery method B) warranties C) insurance premiums D) potential demand E) the cost

Q: The use of countertrade in international trade A) allows trade with countries short of hard currency. B) reduces a firm's competitive advantage. C) increases the tax liabilities of trading firms. D) leads to a loss of revenue. E) is considered unethical.

Q: When Burger Boys an American fast-food company, wanted to market its burgers and fries in France, it was asked to import French mustard to the United States in return. This is an example of A) bargaining. B) countervailing duties. C) buy-back. D) countertrade. E) bribery.

Q: What would be considered an advantage of leasing equipment rather than owning it? A) Lease revenue tends to fluctuate greatly. B) Leased equipment rarely breaks down. C) Leasing helps guarantee better maintenance on overseas equipment. D) Leasing keeps companies from using experimental equipment. E) Leasing is less risky than outright sale of equipment.

Q: An important selling technique to alleviate high prices and capital shortages for capital equipment is the ________ system. A) leasing B) antidumping C) direct buy-back D) consignment E) rental

Q: Assembly in the importing country is a way companies attempt to lower prices and avoid dumping charges. These assembly plants are known as ________ plants. A) antidumping B) screwdriver C) import-oriented D) export-oriented E) automated

Q: Dumping in the world markets is most likely to increase when A) domestic production capacity is low. B) demand in the home country is low. C) demand in the foreign country is low. D) foreign production capacity is high. E) cost of production is low.

Q: For ________ duties to be levied on a product, it must be shown that prices are lower in the importing country than in the exporting country and that producers in the importing country are being directly harmed by the dumping of the product. A) countertrade B) domestic protection C) countervailing D) foreign practice E) import restriction

Q: A ________, which restricts the amount a country will import, may be imposed on foreign goods benefiting from subsidies, whether in production, export, or transportation. A) trigger volume B) trigger price C) minimum access volume D) market access opportunity E) substantial cause

Q: What is the function of a countervailing duty? A) balance revenues against costs B) restrict the amount a country will import C) increase revenues from parallel imports D) increase the amount a country will export E) permit the use of foreign currency within the country

Q: Dumping has been defined as the situation in which a product is sold in the international market A) at a price below the cost of production. B) only to the premium, price insensitive segment of the market. C) where the demand for the product is lower than in the domestic market. D) at a higher price than in the domestic market. E) at the same price as in the domestic market.

Q: In the context of international marketing, how important is a second language for a manager?

Q: How does the family impact the success of an expatriate manager?

Q: Describe three reasons for the low morale and growing amount of attrition among returning expatriates.

Q: Discuss how compensation plans of American companies vary substantially around the world.

Q: What is the reason for the failure of individual incentives to motivate employees in Japan?

Q: What should be the nature of a training program for international marketing personnel?

Q: What are the eight specific characteristics and skills a company should look for when selecting sales and marketing personnel for international marketing positions?

Q: What are third-country nationals (TCNs)? Why do American companies favor third-country nationals over expatriates from other English-speaking countries for overseas assignments?

Q: What are virtual expatriates, and what are the disadvantages associated with using these sales managers?

Q: Describe the advantages and disadvantages of using an expatriate sales force.

Q: What decisions must be made in designing an international sales force, and what are the complications that tend to arise?

Q: A foreign managerial posting is becoming increasingly viewed as A) a negative for advancement. B) a necessary evil that can't be avoided. C) an important stepping stone to executive positions. D) a cherished experience. E) an experience to be avoided at all costs.

Q: In the past, most chief executives came from one of three backgrounds. What is one of these? A) accounting B) information technology C) law D) marketing E) public relations

Q: What is a trait of people with good cultural skills? A) They have a clear set of principles and do not tolerate ambiguity. B) They take pride in their culture and practice cultural ethnocentrism. C) They monitor the behavior of their employees and judge them accordingly. D) They convey a sincere interest in people and their culture. E) They try to propagate their culture and insist that others follow them.

Q: Most expatriate failures are caused by the lack of A) management skills. B) technical skills. C) an understanding of cultural differences. D) knowledge of the product line. E) knowledge of the company.

Q: Which factor significantly differentiates companies with the least amount of returnee attrition from those with the highest attrition? A) specialized expatriate department B) personal career planning for expatriates C) continued cultural training D) protection from work councils E) family migration planning

Q: What is likely the single most important reason for expatriate dissatisfaction? A) unsuccessful family adjustment B) cultural conflict in the foreign country C) noncooperation of foreign colleagues D) communication issues with home-country headquarters E) redundant skills in a foreign country

Q: When Sandra was offered a transfer to the London office from New York, she worried that she would miss out on opportunities in the New York office when she returned because she hadn't been there. This is a common problem with A) conflict of interests. B) acculturation. C) skill redundancy. D) repatriation. E) assimilation.

Q: Qualified and ambitious sales personnel refuse to take up foreign assignments for fear of hampering their career development. This "out of sight, out of mind" fear is most closely linked to the problems of A) conflict of interests. B) acculturation. C) skill redundancy. D) naturalization. E) repatriation.

Q: The primary control tool used by American sales managers with sales representatives is the A) encumbrance system. B) quota system. C) incentive system. D) attraction of a foreign assignment. E) threat of foreign postings.

Q: What practice, with respect to motivating sales personnel, is most common in relationship-oriented countries like Japan? A) Companies lay greater emphasis on incentives that are based on individual performance. B) Companies do not allow local managers to decide the mix between base and incentive pay. C) Commissions are measured by sales revenues generated by each employee. D) Companies are not very tolerant of poor performers and fire them immediately. E) Companies motivate sales representatives through frequent interaction with supervisors.

Q: Unlike the Japanese, the American sales managers have less need to worry about the problem of motivating poor performers. What is the reason for this? A) The group incentive system balances pay differences and thus is motivating enough. B) Companies are more focused on long-term loyalty and are willing to compromise on performance initially. C) Sales personnel are shifted to areas where their performance levels can meet expectations. D) The base pay that is higher than their performance based incentive motivates them. E) The team usually does not have any low performers as they either quit or are fired.

Q: What strategy should be practiced when determining compensation globally? A) A similar framework should be created for jobs with different responsibilities. B) The support of senior sales executives should not be sought before taking action. C) Local managers should not decide the mix between base and incentive pay. D) Consistent communication and training themes should be used worldwide. E) The incentive plan should be designed centrally and dictated to local offices.

Q: A survey showed that most companies establish sales compensation practices locally (either at the country or regional levels). The program element most often determined at the global level is A) Program Design Principles. B) Pay Mix. C) Job Grades. D) Formula Mechanics. E) Performance Measures.

Q: What is actively involved in setting rules about compensation companywide in Europe? A) pension committees B) work councils C) external labor unions D) the European Union E) the World Trade Organization

Q: Claudia is being transferred to a foreign assignment that will last 3 months. Her family is not accompanying her, so the company is paying her a premium, which is called a A) fringe benefit. B) pension plan. C) displacement reserve. D) special assessment. E) separation allowance.

Q: Nontaxable perks such as a company vehicle given to an expatriate is an example of A) an overseas premium. B) a family compensation. C) a special assessment. D) a fringe benefit. E) a separation allowance.

Q: What is the main reason for the failure of individual incentives to motivate employees in Japan? A) society's emphasis on paternalism and collectivism B) high corruption levels C) practice of cultural chauvinism D) a democratic form of government E) encouragement of individualism

Q: Considering the specific characteristics of Japan's culture, what strategies would be most successful in motivating employees in Japanese organizations? A) individual commission systems B) group bonus systems C) company cars D) birthday gift vouchers E) best employee awards

Q: Japanese and American salespersons are surprisingly similar except for one difference that Japanese rate as more important than their American counterparts. Identify this difference. A) job security B) promotion C) job satisfaction D) social recognition E) personal growth and development

Q: What is likely to be the most effective method in making home-office personnel aware of the problems of foreign operations? A) providing cross-cultural training B) designing a theoretical course C) conducting in-house seminars D) holding corporate virtual reality training E) distributing marketing reading materials

Q: The training of foreign employees is likely to be most effective when A) it is handled by trainers who communicate in languages alien to the employees. B) it is tailored to the employees' ways of learning and communicating. C) national differences are ignored during motivational sessions. D) the superiority of their culture is emphasized over others. E) it is different from the familiar ways of communicating.

Q: What is most likely the reason that continual training is more important in foreign markets than in domestic ones? A) slow adaptation of foreign markets to innovative products B) technological inferiority of domestic products C) the need to establish the superiority of domestic cultures D) lack of technical knowledge among expatriate salespersons E) lack of routine contact with the parent company

Q: Japanese sales representatives tend to be most satisfied with their jobs when A) their values are consistent with those of their company. B) they receive high salaries and many perks. C) they are better educated than their colleagues. D) their technological knowledge is superior to that of others. E) their ideas that do not conform to the company's goals are well-received.

Q: When hiring new personnel for international marketing, what is considered to be the best way to assess the traits necessary for success? A) paper-and-pencil ability tests B) interviews and role-playing exercises C) biographical information D) reference checks E) calligraphy analysis

Q: Cultural empathy involves A) being subservient to a superior culture. B) understanding another culture and not being antagonistic. C) believing that the people of inferior cultures should be enlightened. D) having the attitude that one's own culture is superior to others. E) being dissatisfied with one's own culture and adopting a new culture.

Q: A marketer who expects to be effective in the international marketplace should A) be antagonistic toward other cultures. B) not let the local culture influence his or her decisions. C) practice cultural ethnocentrism. D) not let consumer behavior influence marketing decisions. E) have a positive outlook on an international assignment.

Q: What is the most important quality of marketing personnel for a foreign assignment that a recruiter should consider? A) They should have little cultural empathy as this might distract them from their main purpose. B) When working in a foreign country, they must be capable of making decisions that are not influenced by the habits of the market. C) They should be able to represent a culturally superior image of their country and its products. D) They should be hypersensitive to the behavioral variations in different countries. E) They should possess a considerable breadth of knowledge of many subjects both on and off the job.

Q: One feature of third-country nationals is A) U.S. firms have to pay double tax when hiring them. B) they are local nationals who work for a foreign company. C) they work at the company's headquarters and are located in their home country. D) they manage their foreign clients and subordinates from their home country. E) their nationality has little to do with where they work or for whom.

Q: Doreen is a French citizen who has been working for a U.S. company in Spain for twenty years. Doreen may be considered to be a A) virtual expatriate. B) native salesperson. C) third-country national. D) professional expatriate. E) local national.

Q: Expatriates from their own countries working for a foreign company in another country are called A) virtual expatriates. B) native salespeople. C) third-country nationals. D) professional expatriates. E) local nationals.

Q: What is considered to be the most common job in the United States despite being viewed negatively? A) government service B) attorney C) office management D) personal selling E) teaching

Q: In relationship-oriented cultures such as France, Mexico, and Japan, sales representatives A) are available to fill vacant positions perennially. B) tend not to be highly respected. C) are better paid than their U.S. counterparts. D) lack proper knowledge of their culture. E) are respected and held in high esteem.

Q: What is true of local nationals who are hired to sell a company's products? A) They are not keen on maintaining a cordial relationship at the home office. B) They lack the knowledge of local culture and prevalent practices. C) They are better able to lead a company through the maze of unfamiliar distribution systems. D) They do not communicate with subordinates and customers directly. E) They normally work for a foreign company in a third country.