FIT - M1 - CH6

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Questions and Answers

What is the primary purpose of defining research objectives in the international trade research process?

To explore all potential research questions

To encourage vague problem definitions

To limit the number of problems identified

To ensure the correct information is gathered initially (correct)

Why are clear research objectives particularly important in international trade compared to domestic research?

Because international trade often involves more complex regulations

Because of potential time delays and long distances for data collection (correct)

Because only international markets require thorough investigations

Because domestic data is more readily available

Which of the following is NOT mentioned as a reason for organizations to initiate international trade research?

To expand the business

To exploit trade opportunities

To identify business problems

To acquire market research software (correct)

What types of questions might arise from the desire to exploit new trade opportunities?

Which product lines are viable for a new market? Signup and view all the answers

How do research objectives influence the types of questions organizations develop?

They help align questions with strategic objectives Signup and view all the answers

When organizations first contemplate international trading, what is often their main concern?

The benefits of international trade Signup and view all the answers

What might organizations experience if they do not establish clear research objectives?

Increased need for additional investigations Signup and view all the answers

As organizations gain familiarity with international environments, their research focus typically shifts toward what?

Specific issues relevant to their operations Signup and view all the answers

Which research objective focuses on the ownership of cars within a population?

Determine the percentage of the population that owns a car. Signup and view all the answers

Which of the following objectives pertains to accessibility to modern technology?

Identify the percentage of the population with access to Internet and wireless communication. Signup and view all the answers

Which research objective is concerned with energy affordability for households?

Determine the affordability and availability of natural gas and electricity for households. Signup and view all the answers

Which objective requires identifying how symbols and colors are culturally interpreted?

Identify common associations related to symbols and colours. Signup and view all the answers

What research objective seeks to understand cultural sensitivities in marketing?

Identify cultural sensitivities that may impact product or service sales. Signup and view all the answers

Which objective is likely to provide insights into language diversity?

Identify national languages. Signup and view all the answers

Which research objective can help in understanding consumer behavior related to taste?

Determine cultural taste preferences. Signup and view all the answers

Which objective explores the dynamics of roles and expectations in society?

Describe societal roles and expectations. Signup and view all the answers

What is a consequence of weak legal protection for property rights in a country?

Higher likelihood of large property losses Signup and view all the answers

Which of the following aspects does intellectual property encompass?

Inventions, literary and artistic works, symbols, images, names, and designs Signup and view all the answers

Why is it important to understand tax regimes in international trade?

To avoid double taxation and understand varying tax practices Signup and view all the answers

What factor should organizations consider when selecting a legal structure for international trade?

The impact on operational capacity and tax liabilities Signup and view all the answers

What type of research objective relates to understanding political instability in a foreign country?

Determining the stability of the current government Signup and view all the answers

How can intellectual property rights influence a country's economy?

By increasing the flow of innovative ideas and new products Signup and view all the answers

What is a potential issue if tax treaties between countries are not established?

The company may face double taxation Signup and view all the answers

Which of the following is a reason organizations are cautious about investing in countries with weak property rights?

Risk of property losses and unhonored contracts Signup and view all the answers

What is a significant concern regarding foreigners and foreign trade in certain markets?

Discrimination against foreigners Signup and view all the answers

What impact do ethical issues like corruption have on foreign business practices?

They can damage a company’s reputation. Signup and view all the answers

How are property rights typically treated in markets with weak legal protection?

They are often disregarded. Signup and view all the answers

What factor can influence an organization's liabilities in a target market?

The form of legal business structure Signup and view all the answers

What is a common characteristic of discriminatory policies in foreign trade?

Creation of barriers for foreign entities Signup and view all the answers

Which group is crucial in shaping policies regarding foreigners in the market?

Key decision makers Signup and view all the answers

What role does the legal structure of a business typically play in the target market?

It influences both liabilities and tax responsibilities. Signup and view all the answers

What is often a challenge faced by foreigners in markets with weak protections for intellectual property?

Risk of idea theft and lack of enforcement Signup and view all the answers

What should be considered regarding packaging preferences in the target market?

The number of units in a typical package Signup and view all the answers

What are important considerations in product labelling?

Regulations for product labelling Signup and view all the answers

In assessing pricing, what aspect is essential to consider?

Cultural perceptions related to pricing Signup and view all the answers

Which of the following is NOT a consideration regarding logos, design, and color?

Color trends in the fashion industry Signup and view all the answers

What should be identified with respect to product quality?

Relevant product certification standards Signup and view all the answers

What is crucial to identify about preferred purchasing methods?

Typical purchase locations for similar products Signup and view all the answers

When considering pricing strategies, what cultural aspect may affect consumer perspectives?

Cultural perceptions related to premium pricing Signup and view all the answers

Which factor is least likely to impact packaging preferences?

Competitive market pricing Signup and view all the answers

What is the main purpose of including organizational background information in a research brief?

To help researchers understand the business context Signup and view all the answers

Why is it essential to estimate timelines in the research planning process?

To control research costs and manage data freshness Signup and view all the answers

Which aspect is NOT mentioned as part of the research brief to guide researchers?

Expected profitability from the research Signup and view all the answers

How should the budget for research be realistically estimated?

By estimating expected sales value and chances of undesired results Signup and view all the answers

What factor influences the choice of research methods according to the brief?

The budget allocated for the research Signup and view all the answers

Which detail is crucial for ensuring research findings are useful in a timely manner?

The deadline for submission of findings Signup and view all the answers

What does a rough budget calculation for research typically involve?

Estimating the sales value and odds of market success Signup and view all the answers

Which scenario illustrates the importance of estimating the research budget appropriately?

An organization estimates potential sales alongside the risk of failure before market entry Signup and view all the answers

Study Notes

International Market Research

Market research is used to gain knowledge of potential markets, customers, and their needs.
It's critical for gaining a better understanding of market opportunities and risks, and better planning.
International market research is critical for strategic planning.
Key factors drive the need for continuous research.

Applications of International Market Research

Research supports business planning.
Research estimates market demand for products and services.
Research analyses the competitiveness of products and services in a market.
Research helps determine target markets and strategies to enter them.
Research identifies new market opportunities.
Research helps analyze costs and benefits of business decisions.
Research helps to determine customer needs and deliver products and services that will meet them.
Research provides comparisons with competing products.
Research identifies modifications needed to address new markets.

Market Intelligence and Competitive Intelligence

Market intelligence gathers and analyzes current and future trends and preferences to understand a market.
Competitive intelligence analyzes information about competitors to gain a competitive advantage.
Market information is gathered from international research and personal experience.
Strategic objectives determine the type of intelligence that is required.
Market intelligence is needed to inform critical decisions.
Business environments are constantly shifting.
Types of market intelligence vary by organizational situation and circumstances.
The components of market intelligence include factors influencing the business environment.
The components of market intelligence also include market infrastructure and forces affecting the market.

Describing Market Research

The market research process involves seven main stages:
- Define research objectives
- Create a research brief
- Screen potential markets
- Select research design and data sources
- Design data collection tools and collect data
- Organize and analyze the data
- Present conclusions and apply the research

Key Research Issues for Exporters

Organizations need to answer key questions about international opportunities.
Identifying characteristics, pressures, trends, requirements.
Prioritizing international trade priorities and related risks.

Macroeconomic Data

Gross National Product (GNP): Market value of goods and services produced by a country's citizens.
Gross Domestic Product (GDP): Market value of final goods and services produced in a country.
Purchasing Power Parity (PPP): Compares purchasing power across countries.
Household disposable income: Average amount households have after taxes and expenses.
Market size: Total number of buyers in a market.
Market potential: Number of potential buyers.

Cultural and Lifestyle Information

Material culture: Technological goods, transportation, communication resources.
Cultural preferences: Product and service tastes, behaviours, and norms.
Languages: Impact on marketing, communications.
Religion: Influences beliefs, traditions, and practices.
Ethics and values: Business conduct, and cultural contexts.

Strategic Objectives for Importers

Identify if the export of products or services complies with country and/or international regulations.

Competitor Analysis

Research competitors.
Describing competitors, their locations, employees, key customers and their strategies.
Competitors' market share, suppliers.

Research Brief

The research brief outlines research parameters.
Includes background of organization, business problems, and reason for research.
Includes details on deliverables and timeline.
Includes a budget.

Timelines

Timetables are structured for defined time periods.
Account for business cycles (e.g., seasonal changes).
Planning deadlines.

Budgets

Realistic budgets based on scope.
Estimating return on investment (ROI).
Considerations of varying research costs.

Partner Based Requirements

Consideration of potential partners.
Size, financial stability, product orientation, market orientation, and reputation.
Strategic direction.

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Description

This quiz covers the essentials of international market research, exploring its importance in understanding potential markets, customers, and strategic planning. It examines various applications including demand estimation, competitiveness analysis, and identifying new market opportunities. Test your knowledge on how research informs business decisions and supports planning.