Review and Discussion Questions

Enhance your understanding further with the following review and discussion questions.

Review questions

1. Define exporting and importing.

Answer: 

a. Exporting is the shipment of the finished product from a foreign country to the country of final purchase.

b. Importing is bringing a foreign product into a market.

2. What internal reasons lead to exporting?

Answer: 

a.  Managerial urge

b. Unique product characteristics

c. Economies of scale

d. Extend sales

e. Lower risk

f. Overcapacity

3. What external factors lead to exporting?

Answer: 

a. Change agents

b. Foreign market features

c. Domestic market features

d. Unsolicited orders   

4. Define market concentration and market spreading.

Answer: 

a. Market concentration is the strategy a company uses by exporting to a small number of markets or just one key market and then slowly expands to exporting to new countries.

b. Market spreading – growing exports in many different markets simultaneously and rapid expansion to new markets.

5. What are the home-country based methods of direct exporting?

Answer: 

a. Built-in department

b. Separate export department

c. Export sales subsidiary

6. What are the foreign country-based methods of direct exporting?

Answer: 

a. Foreign sales branch

b. Foreign sales subsidiary

c. Foreign-based distributors and agents/representatives

7. What the major types of merchants and agents used in indirect exporting?

Answer: 

a. Merchants

  • Export merchant

  • Trading company

b. Agents

  • Export commission house

  • Resident buyer

  • Broker

8. What three approaches can be used to price exported products?

Answer: 

a. Lower than domestic prices

b. Higher than domestic prices

c. On par with domestic prices

9. What are the two main kinds of documents that accompany exports?

Answer: 

a. Export license

b. Financing documents

10. What are the five tasks of physical distribution?

Answer: 

a. Materials handling

b. Inventory location

c. Inventory control

d. Order processing

e. Methods of transportation

11. What modes of transportation are used in international marketing?

Answer: 

a. Air

b. Water

c. Railroad

d. Motor carrier

e. Pipeline

f. Intermodal

12. What forms of utility are created by international distribution systems?

Answer: 

a. Place utility

b. Time utility

c. Possession utility

d. Communication or information utility

13. Define international retailing.

Answer: International retailing is all of the retail activities that occur across national boundaries.

14. What are the major types of international retail outlets?

Answer: 

a. Convenience stores

b. Supermarkets

c. Hypermarkets

d. Open markets

e. Department stores

f. Discount stores

g. Specialty stores

h. Online retailing

 

Discussion questions

1. Compare the internal and external reasons for exporting. Can you think of a situation in which one contradicts the other? In other words, internal reasons are compelling to export but external reasons are not, or vice versa.

Answer: The internal and external reasons assess demand of the external market. They often take what one country has and see if another country would be a profitable opportunity. I think they support each other and do not contradict each other.

2. Explain which approach, market concentration or market spreading, should be the primary strategy used in the following situations:

Answer: 

  • A new type of sports energy drink – market spreading – they are new in the market and this will give the first mover advantage
  • 3D digital video players – market spreading – they are new in the market and this will give the first mover advantage
  • Wines made in Africa – market concentration, there are already many competitors in the market – concentration will lead to greater market share
  • Tennis equipment by a manufacturer in Brazil – market concentration, there are already many competitors in the market – concentration will lead to greater market share

3. Discuss the transportation modes that would work best for the following products that are to be shipped overseas.

Answer: 

  • Personal computers – water transportation – these are not extremely small items
  • Industrial equipment – water transportation because of the heavy weight of these products
  • Cell phones – air or water transportation because these items are small
  • Petroleum products – intermobile – pipeline to water

4. Discuss how place, time, possession, and communication utilities can be created for each of the following:

Answer: 

  • Motorcycles in Spain
    • Place – selling at many dealerships
    • Time – make sure you have many models in stock so they can be purchased on the spot
    • Possession – make easy financing options available to customers
    • Communication – provide lots of information about the product – let consumers know about updates and/or new models
  • Video games in Japan
    • Place – sell at many stores
    • Time – make sure stores have the newest version of games available
    • Possession – have stores take all forms of payment, cash, check, credit/debit card
    • Communication – let customers and stores know when new versions and games are being released – get customers really excited about new versions
  • Soft drinks in Portugal
    • Place – sell at many stores and in vending machines
    • Time – sell at convenient locations and make sure the drinks are cold
    • Possession – have stores and vending machines take multiple forms of payment, cash, and credit/debit card
    • Communication – provide lots of information about the product – let consumers know about new flavors
  • Cereal in Australia
    • Place – sell at many stores that also sell milk
    • Time – sell at convenient locations
    • Possession – have stores take multiple forms of payment, cash, and credit/debit card
    • Communication – provide lots of information about the product – let consumers know about new flavors and/or health benefits

5. Discuss how well you think online retailing would work for the following products:

Answer: 

  • Groceries – possibly well. With groceries the concern is how to get the groceries to consumers without them spoiling. Consumers either need to be home when the items are delivered or there needs to be ways to store the goods at refrigerated temperatures. Also, many fresh items consumers like to pick out themselves, like fruits and vegetables.
  • Appliances – Very well. This make comparison shopping easy for consumers. Also, consumers often have to pay a delivery fee even when purchased in the store. I can imagine many customers wanting to purchase appliances online.
  • Fast food – Very poorly. Fast food needs to be served and eaten immediately. Delivery times for ordering food online would not work very well. A cold McDonalds fry is a disgusting fry.
  • Business products – Very well. Companies can set up accounts with businesses and the secretaries can order the products from their offices – no need to leave work to buy copier paper. Delivery should be efficient.