Quick Study Questions
Quick Study 1
1. Q: What is the first step in the screening process for potential markets and sites?
A: The first step in identifying potential markets is to assess the basic demand for a product.
Similarly, the first step in selecting a site for a facility to undertake production, R&D, or some
2. Q: What forces should a company research when assessing a nation’s business environment?
A: Cultural differences in language, attitudes toward business, religious beliefs, traditions, and
customs can influence what products are sold and how they are sold. Companies sometimes
locate production in the local market when significant changes must be made to a product’s
Nations differ in their attitudes toward trade and investment from other countries.
Governments can create barriers to investment, for example, by placing restrictions on the
corrupt one can discourage it. Political risk can threaten the activities of any type of
international business activity.
Companies must analyze a nation’s economic policies before selecting a new market or
3. Q: Evaluating a product from a certain country as superior to similar products from other
countries is an example of what force at work?
A: Country image embodies every facet of a nation’s business environment, it is highly relevant
to the selection of sites for production, R&D, or any other activity. Country image affects the
software and services.
Quick Study 2
1. Q: The sensitivity of demand for a product relative to changes in income is called what?
A: Income elasticity is the sensitivity of demand for a product relative to changes in income and
is one way of forecasting market demand. It is calculated by dividing the percent change in the
quantity of a product demanded by a percent change in income. A coefficient of greater than 1.0
2. Q: What variable is commonly included in a market potential indicator?
A: The main variables commonly included in market-potential analysis are: market size, market
growth rate, market intensity, market consumption capacity, commercial infrastructure,
economic freedom, market receptivity, and country risk. Its usefulness lies in the fact that hard
3. Q: How important is it for top managers to pay a visit to a market or site before making a final
decision?
A: The final step in the screening process represents the most intensive efforts of assessing
remaining potential markets and sites—typically less than a dozen, sometimes just one or two.
At this stage of the screening process, managers often want to take trips to each remaining site.
Quick Study 3
1. Q: Obtaining information that already exists within or outside the company is called what?
A: The process of obtaining information that already exists within the company or that can be
obtained from outside sources is called secondary market research.
2. Q: What are possible sources of secondary research data?
A: The main sources of secondary research data include international organizations,
and World Wide Web.
3. Q: What are potential problems that can arise with the use of secondary research data?
A: Availability of data: In the most industrialized markets, much secondary data already exists
on various product markets. However, in many emerging and developing countries, previously
gathered information of high quality can be difficult to obtain. Even when market data is
Comparability of data: Data obtained from other countries must be interpreted with
Cultural differences: Marketers conducting research in unfamiliar markets must pay
attention to the ways that cultural variables influence information. Perhaps the most important
variable is language. For example, even the use of interpreters can complicate matters as they
Quick Study 4
1. Q: Collecting and analyzing original data and applying the results to current research needs is
called what?
A: Primary market research is the process of collecting and analyzing original data and
outside agency on behalf of the company) gathers it for the first time.
2. Q: A trade show is the same thing as what?
A: A trade show is an exhibition at which members of an industry or group of industries
opportunities.
3. Q: A firm researching a very unfamiliar but potentially very profitable market might be best to
do what?
A: Companies that have little experience in an unfamiliar market often hire local agencies to
perform some or all of their market research.
Ethical Challenge
You are executive director of Qualitative Research Consultants Association (QRCA), an organization
designed to assist market research practitioners. As part of their membership agreement, QRCA
members agree to abide by a nine-point code of ethics that forbids practices such as discriminating in
respondent recruitment and offering kickbacks or other favors in exchange for business. The code also
calls for research to be conducted for legitimate research purposes, and not as a front for product
promotion.
12-5 Why do you think the QRCA and other market research organizations create such codes?
A: The codes were created by the QRCA to ensure that its members uphold the highest
with clients, field suppliers, colleagues and respondents.
12-6 Do you believe they are helpful in reducing unethical research practices?
A: Students response can vary, however, it is important to note that qualitative research helps
business owners identify customer needs, clarify marketing messages, generate ideas for
improvements of a product, extend a line or brand, and/or gain perspective on how a product
12-7 As QRCA director, what other areas of marketing research do you believe should be covered by
ethical codes of conduct?
A: Clearly, such codes are designed to provide researchers with ethical guidelines of conduct.
The question of whether they help reduce unethical behavior is a tricky one. Many students will
likely respond that the code at least becomes part of the subconscious and therefore will guide
snooping and “cookies.”
Teaming Up
As a team, select an emerging market that interests you. Start by compiling fundamental country data
and then do additional research following the steps in this chapter. Flesh out the nature of the market
opportunity offered by this country or its suitability as a manufacturing site. Next, select a company
that is pursuing opportunities in the country. Determine whether the company’s activities are
consistent with the market or site potential as your team researched it.
A: This may be a good time to get students working on their Market Entry Strategy Project. This
develop teamwork in the course.
Practicing International Management Case
Vietnam’s Emerging Market Potential
12-10 Q: What do you think western countries can do to help improve the political climate in
Vietnam?
A: Governments in the West can probably best help improve the business climate in Vietnam
by developing closer ties with the government. They can provide aid for infrastructure
12-11 Q: What problems might a company encounter while conducting market research in Vietnam?
A: Students should review the problems covered in this chapter and consult the business press
when researching the market of Vietnam.
12-12 Q: Reflecting on your perception of products labeled, “Made in Vietnam.” Does the type of
product affect your perception? Explain.
A: As discussed in this chapter, certain low-cost products will be unlikely to have any negative
connotation if labeled “Made in Vietnam.” However, high-priced luxury or technical products