Question 1

If a producer agrees to enter into a management contracting arrangement with a zinc mining operation in Chile,

Accepted Answer

If a producer enters into a management contracting arrangement with a zinc mining operation in Chile, they should be prepared to send people to Chile to manage and execute the mining operations. Option A may or may not be necessary depending on the existing facilities. Option C is not necessarily true, as the success of the arrangement depends on the skills and expertise of both parties involved. Option D is also not necessarily true, as political risks can never be entirely ruled out.

Question 2

Sunkist sells foreign companies the right to use the Sunkist brand on soft drinks and citrus juices sold outside the United States. Sunkist gets both an initial fee and a royalty on the sale of goods bearing its brand name. Sunkist is engaged in:

Accepted Answer

Sunkist is engaged in licensing as it is selling the right to use its brand name to foreign companies.

Question 3

Which of the following is the easiest way for a firm to enter foreign markets?

Accepted Answer

Licensing is the easiest way for a firm to enter foreign markets as it involves granting the rights to use a company's product, technology, trademark, or services to a foreign firm in return for royalty payments. This allows the firm to enter the foreign market without actually having to set up operations there, making it less risky and less expensive than other options such as direct investment or joint ventures.

Question 4

_____ means selling the right to use some process, trademark, patent, or other right for a fee or royalty.

Accepted Answer

Licensing involves selling the right to use some process, trademark, patent, or other right for a fee or royalty.

Question 5

In Europe, auto manufacturers are required by law to allow owners of their brands to give the cars back to the manufacturers at the end of their useful life. The manufacturers must then recycle and reuse at least 85 percent of any vehicle made after 2004. This is an example of a(n):

Accepted Answer

The law described in the passage is commonly known as a "take back law," which requires manufacturers to take back their products at the end of their useful life for recycling and reuse. This is not an example of integration, horizontal, contractual, or vertical law.

Question 6

If a firm's involvement in international marketing is limited to managing others' production facilities, it is using:

Accepted Answer

Managing others' production facilities is an example of management contracting, where a firm provides management expertise to a foreign company in exchange for a fee. This is not considered exporting, licensing, direct investment, or joint venturing.

Question 7

Reverse channels may be used to retrieve products from:

Accepted Answer

Reverse channels can be used to retrieve products from business customers, final consumers and intermediaries. Therefore, option D, "all of the above" is the best choice.

Question 8

When the Rosco International chain of restaurants enters foreign markets, locals own the restaurant facilities, but look to Rosco to provide expertise in management and marketing. Rosco uses the _______ approach to enter international markets.

Accepted Answer

The management contracting approach involves a domestic firm (in this case, Rosco International) providing expertise in management and marketing to a foreign firm (the local owners of the restaurant facilities), while leaving ownership and operational control in the hands of the local firm.

Question 9

______________ (as a way to enter foreign markets) means selling the right to use some process, trademark, patent, or other right for a fee.

Accepted Answer

Licensing involves selling the right to use a specific process or product in a foreign market for a fee. This is a common method for companies looking to enter foreign markets without significant investment or risk.

Question 10

Selling products manufactured in the United States to foreign customers--often without any product changes--is called:

Accepted Answer

Exporting is the act of selling goods or services produced in one country to another country. In this case, the products are manufactured in the United States and sold to foreign customers without any changes to the product, which fits the definition of exporting.

Question 11

If Wilkinson were to sell Norelco the exclusive rights to produce and sell its brand of shavers in Japan for a 5 percent royalty on all sales, it would be using:

Accepted Answer

Licensing is a strategy in which a company allows another company to use its intellectual property, such as patents or trademarks, in exchange for a fee. In this scenario, Wilkinson would be licensing its brand of shavers to Norelco for exclusive use in Japan in exchange for a 5 percent royalty on all sales. This allows Wilkinson to earn revenue without having to establish a physical presence or invest in manufacturing facilities in Japan.

Question 12

Worldwide Drilling, Inc. of Fort Worth, Texas, operates an oil well in Russia for its owners. Worldwide is involved in:

Accepted Answer

The answer of Worldwide Drilling, Inc. of Fort Worth, Texas,...

Question 13

The lowest cost and lowest risk way to enter a foreign market is through

Accepted Answer

Exporting typically has the lowest cost and lowest risk compared to other market entry modes. It allows a company to test the waters in a new market without significant investment and commitment. Additionally, exporting can potentially lead to establishing a local market presence in the long term as the company becomes more familiar with the market and the opportunities it offers.

Question 14

Licensing, in international marketing,

Accepted Answer

Licensing means selling the right to use a process, trademark, patent, or other right for a fee or royalty. The other options are either incorrect or incomplete.

Question 15

To minimize its own risks, the Boomtown Petroleum Corp. of Houston, Texas, operates a South American oil refinery that is owned by residents of that country. Boomtown is engaged in an activity known as:

Accepted Answer

Management contracting involves a company (Boomtown Petroleum Corp.) managing operations for a facility (the South American oil refinery) that is owned by another party (residents of that country), without owning the facility itself. This arrangement allows the managing company to apply its expertise and brand while minimizing its investment risk.

Question 16

Josh Adams runs a large cattle farm in Texas. In order to take advantage of higher prices for beef in Europe compared to the United States, he has started selling cattle overseas by using an agent wholesaler who specializes in finding European customers for U. S. firms. He ships the cattle to Europe by water transport. Josh is involved in:

Accepted Answer

Josh Adams is exporting his cattle to Europe, which involves selling goods overseas and transporting them through international channels of distribution.

Question 17

Which of the following is typically the lowest risk approach for moving into international markets?

Accepted Answer

Exporting is typically the lowest risk approach for moving into international markets because it involves less investment and commitment than other options. With exporting, a company can establish a presence in international markets by simply selling its products to customers in other countries without setting up operations there. This reduces the risks associated with managing operations in foreign countries, such as political instability, legal issues, and cultural differences.

Question 18

In a licensing agreement, the licensee

Accepted Answer

The answer of In a licensing agreement, the licensee
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Question 19

A producer that enters into a licensing agreement with a foreign company to better reach foreign customers is MOST likely selling the rights to use its:

Accepted Answer

By entering into a licensing agreement with a foreign company, the producer is most likely selling the rights to use its brand name in order to reach foreign customers. This allows the foreign company to use the established reputation of the producer's brand to promote and sell products in their market.

Question 20

In international markets, a firm can sell its management and marketing know-how while letting locals own the production and distribution facilities by using

Accepted Answer

Management contracting allows a firm to sell its management expertise to a foreign company that owns the production and distribution facilities, without the firm having to invest directly in those facilities.

Quiz 11: Place and Development of Channel Systems