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UNIVERSITY OF BOTSWANA
FACULTY OF BUSINESS
DEPARTMENT OF MARKETING
MKT 300: INTERNATIONAL MARKETING
FINAL EXAMINATION -2008 DATE: NOVEMBER/DECEMBER 2008
DURATION: 2HRS MARKS: 60
INSTRUCTIONS
. This paper is divided into two sections A and B.
. Section A is an essay question
. Section B consists of multiple choice questions and truelfalse statements
. For the truelfalse statements write your answer infull (e.g. False not F)
. All sections are compulsory
. Use both sides of the sheets in the answer booklet
. Please write legibly and be orderly in your presentation
DO NOT OPEN THIS PAPER UNTIL YOU HAVE BEEN TOLD TO DO SO BY
THE SUPERVISORIINVIGILATOR
NO.OF PAGES I 12 I
Page 1 of 12
ANSWER ALL QUESTIONS
SECTION A
You are the CEO of a company that has previously traded only in the domestic market
and is now planning to go international. After a meeting with the Board of directors, you
are given a mandate to choose between making a PIOO million worth investment in
Country A or Country B. You are supposed to give feedback during the next meeting.
Both the countries have an attractive population,just above 30 million each. Upon further
investigation to facilitate your choice, you learn that Country A is a Command economy
and Country B is a Market capitalism economy. Based on this last fact:
(i) Which country would you recommend as the best to the Board for investment?
(02 marks)
(ii) Why? (10 marks)
Total (12 marks)
SECTION B (Each question carries 1 mark)
Multiple choice question- Indicate the best answer
Q1. Which of the following describes the concept of intellectual property?
A) Exclusive legal rights of authors, composers, playwrights, artists, and publishers
to publish and dispose of their work as they see fit.
B) Property, such as original computer software, screenplays, musical scores, or
chemical formulas for new drugs.
C) Designs and names, often officially registered, by which merchants or
manufacturers designate and differentiate their products.
D) Document giving the inventor of a new product or process exclusive rights to the
manufacturer, use, or sales of that invention.
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Q2. Consider the following scenario: Ballard Manufacturing wants to sell its products
overseas, but only if it can act on its own and manufactures its product in a central
location. Based on these objectives, the appropriate foreign entry mode for
Ballard is:
A) wholly owned subsidiary.
B) franchising.
C) exporting.
D) licensing.
Q3. All of the following are disadvantages of exporting except?
A) It may help a firm achieve experience curve economies
B) High transportation costs can make exporting uneconomical
C) Tariff barriers can make exporting uneconomical
D) Exporting from a firm's home bases may not be appropriate if there are lower-cost
locations for manufacturing the product abroad
Q4. A common market includes all of the following characteristics except
A) factors of production are allowed to move freely between members.
B) there are no restrictions on immigration between members.
C) full economic integration.
D) there are no restrictions on the cross-border flow of capital between members.
Q5. Establishment of a trade policy necessitates a significant degree of
harmony and cooperation on fiscal, monetary, and employment policies to
oversee trade relations with nonmembers.
A) political
B) free-customs
C) tariff
D) common external
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Q6. An administrative policy is an informal instrument or bureaucratic rule that can be
used to restrict imports and boost exports. Such policies benefit but hurt
A) trade associations, producers
B) consumers, producers
C) consumers, trade associations
D) producers, consumers
Q7. Which of the following is not an argument in favor of licensing as a means of
foreign market entry?
A) The firm does not have to have capital to open markets overseas
B) A firm wants to participate in a foreign market, but is prohibited from doing so by
barriers to investment
C) The firm possesses some intangible property that might have business
applications and wants to develop that technology or those applications itself
D) The firm does not have to bear the development costs and risks associated with
opening a foreign market
Q8. An individual who is has an understanding of how cultural differences
across and within nations can affect the way in which business is practiced.
A) experienced in international business
B) cross-culturally literate
C) from a foreign country
D) stationed overseas
Q9. Which of the following are the three broad types of economic systems?
A) Market economy, combined economy, production economy
B) Market economy, command economy, mixed economy
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C) Combined economy, separate economy, mixed economy
D) Ordinance economy, production economy, political economy
QI0. Boswa, Inc, a Botswana company, has chosen to establish a wholly owned
subsidiary in South Africa. It has the choice of acquiring an established company
in South Africa or
A) create a joint venture.
B) buy a franchise.
C) license the manufacturing techniques to a South African corporation.
D) build a green-field venture.
QU. Suppose you invent a new product and want to obtain the exclusive rights to
manufacture the product. To protect yourself, you should apply for a
on the product.
A) trust
B) patent
C) copyright
D) trademark
Q12. The system evolved in England over hundreds of years and is based
on tradition, precedent, and custom.
A) civil
B) theocratic
C) common law
D) economic law
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Q13. The bundle oflegal rights over the use to which a resource is put and over the use
made of any income that may be derived form that resource are called
rights.
A) statutory
B) asset
C) taxable
D) property
Q14. The letter of credit is issued by a bank at the request of a(n)
A) exporter.
B) government.
C) importer.
D) shipping company.
Q15. While tariffs are levied as a fixed charge for each unit of a good
imported, tariffs are levied as a proportion of the value of the
imported good.
A) general, special
B) ad valorem, special
C) global, special
D) specific, ad valorem
Q16. Tariffs usually benefit the following two groups:
A) government and producers.
B) consumers and trade associations.
C) government and consumers.
D) producers and consumers.
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Q17. Segments that transcend national borders exist in certain - markets, but are
rare In markets.
A) consumer; industrial
B) industrial; consumer
C) service; industrial
D) consumer; serVIce
Q18. Which of the following is not a justification for global advertising?
A) It has significant economic advantages
B) Because creative talent is scarce, one large effort to develop a campaign will
produce better results than 40 or 50 smaller efforts
C) Many brands are global
D) Cultural differences among nations are such that a message that works in one
nation can fail in another
Q19. If a company has as its objective to reach a market segment that is relatively price
insensitive and thus willing to pay a premium price for the value received, it will
most likely use a pricing strategy called:
A) penetration pricing.
B) everyday low pricing.
C) value-based pricing.
D) skimming pricing.
Q20. The existence of market segments that transcend national borders
A) diminishes the ability of an international business to view the global marketplace
as a single entity
B) enhances the ability of an international business to view the global marketplace as
a single entity
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C) has no effect on the ability of an international business to view the global
marketplace as a single entity
D) enhances the ability of an international business to view the global marketplace as
a single entity for manufacturing firms but not for service firms
Q21. What is the name of the system that integrates the location of plants and
warehouses, transportation modes, inventory quantities, and packing?
A) distributing
B) reselling
C) intermediary control
D) physical distribution system
Q22. Every type of economic union shares the development and enlargement of market
opportunities as a basic orientation. Which of the following best describes the
primary way in which market opportunities are enlarged by economic unions?
A) Provision preferential tariff treatment for participating members or charging
common tariff barriers against outsiders.
B) Formulation of cartels.
C) Seeking economic dominance through boycotts of rivals.
D) Movement towards a common language as a means to overcoming economic
hurdles.
Q23. Though definitions of marketing research and international marketing research are
basically the same, there are two distinct complications that impact international
marketing research. Which of the following would be one of those
complications?
A) International marketing research is always more expensive than domestic
research.
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B) International marketing research is very poor when it comes to promotional
studies.
C) International marketing research is better with respect to cultural research because
it involves more cultural information.
D) The environments within which the research tools are applied are often different
in foreign markets.
Q24. regulations may be designed to conserve scarce goods for home
consumption or to control the flow of strategic goods to actual or potential
enemIes.
A) Export
B) Import
C) Demand
D) Supply
Q25. For duties to be invoked, 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 dumping.
A) countertrade
B) domestic protection
C) countervailing
D) foreign practices
True and false statements
Q26. In a market economy the goods and services that a country produces, and the
quantity in which they are produced, is not planned by anyone. Rather, it is
determined by the interaction of supply and demand and signaled to producers
through the price system.
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Q27. Advantages of joint ventures include (1) access to local partner's knowledge, (2)
sharing development costs and risks; and (3) politically acceptable.
Q28. Import quotas are considered very important and beneficial by consumers in the
importing country
Q29. If a firm's competitive advantage is based on control over proprietary
technological know-how, licensing and joint venture arrangements are preferred
methods of foreign market entry.
Q30. Franchising is basically a specialized form of licensing in which the franchiser not
only sells intangible property to the franchisee, but also insists that the franchisee
agrees to abide by strict rules as to how it does business.
Q31. Property rights refer to the bundle of legal rights over the use to which a resource
is put and over the use made of any income that may be derived from that
resource.
Q32. A patent grants the investor of a new product or process exclusive rights to the
manufacture, use, or sale of that invention.
Q33. Administrative trade policies are bureaucratic rules that are designed to make it
easy for imports to enter a country.
Q34. The main gains from subsidies accrue to importers, whose international
competitiveness is increased as a result of them.
Q35. The prohibition of the payment or receipt of interest is one economic principle of
Islam that has received particular attention.
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Q36. Tariffs increase the overall efficiency of the world economy because a protective
tariff encourages domestic firms to produce products at home, in theory, which
could be produced more efficiently abroad.
Q37. One of the reliability problems faced by a marketing researcher that seeks to do
secondary research in a foreign market is that official statistics are sometimes too
optimistic (e.g., reflecting national pride or politics rather than practical reality).
Q38. A buyback occurs when a firm builds a plant in a country - or supplies
technology, equipment, training, or other services to the country - and agrees to
take a certain percentage of the plant's output as partial payment for the contract.
Q39. A draft is the instrument normally used in international commerce to effect
payment.
Q40. Tariff barriers can effectively put foreign producers at a competitive disadvantage
to indigenous producers.
Q41. If a firm that makes bicycles in Germany acquires a French bicycle producer,
Greenfield investment has taken place.
Q42. One of the reasons that a marketing communication may fail is that the message
that is received by the intended audience is not understood because of cultural
interpretations.
Q43. Comparative Advantage theory of international trade suggests that when one
country has an absolute advantage in the production of all goods, the country
might not drive any benefit from international trade.
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Q44. Since English is often thought of as the global language of business, it is not
important for an American business executive to learn foreign languages.
Q45. Foreign companies that form joint ventures with local partners face a very high
risk of being subject to confiscation or other forms of government interference.
Q46. It is generally better to collect primary data before turning to secondary data
because of the increased reliability and validity of primary data.
Q47. Distribution channels vary depending on, among other factors, the target market
size, competition and available distribution intermediaries.
Q48. The Certificate of Origin is the most important document required for establishing
legal ownership and facilitating financial transactions for exports.
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