EIILM UNIVERSITY, SIKKIM

END SEMESTER EXAMINATIONS, FEB -2011

MASTER OF BUSINESS ADMINISTRATION, SEMESTER - II

INTERNATIONAL BUSINESS

Duration -3 Hours Max Marks: 60

Note: 1. Attempt any FIVE questions.

2. All questions carry equal marks.

Q1. What are the benefits of going a company to international? Describe the process of
internationalization.

Q2. Explain the various environmental factor which effect international business discuss with example?

Q3. What is social and cultural environment how this social and cultural factor effect on the
international business?
Ans.

Q4. What is the international product life cycle .Discuses the various stages of international product life
cycle?

Q5. What are the main factors which includes in the study of international pricing system of product.
Explain briefly?

Q6. What are the main channel of distribution generally found and the international marketing
approach?

Q7. What is the promotion and explain different types of promotion strategies?

Ans. Promotion is one of the four elements of marketing mix (product, price, promotion, distribution).
It is the communication link between sellers and buyers for the purpose of influencing, informing, or
persuading a potential buyer's purchasing decision.[1]

The following are two types of promotion:

1. Above the line promotion: Promotion in mass media (e.g. TV, radio, newspapers, internet,
mobile phones, and, historically, illustrated songs) in which the advertiser pays an advertising
agency to place the advertisement
2. Below the line promotion: All other promotion. Much of this is intended to be subtle enough for
the consumer to be unaware that promotion is taking place. E.g. sponsorship, product placement,
testimonials, sales promotion, merchandising, direct mail, personal selling, public relations, trade
shows

The specification of five elements creates a promotional mix or promotional plan. These elements are
personal selling, advertising, sales promotion, direct marketing, and publicity.[2] A promotional mix
specifies how much attention to pay to each of the five subcategories, and how much money to budget
for each. A promotional plan can have a wide range of objectives, including: sales increases, new
product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a
corporate image. Fundamentally, however there are three basic objectives of promotion. These are:[3]

1. To present information to consumers as well as others

2. To increase demand
3. To differentiate a product.

There are different ways to promote a product in different areas of media. Promoters use internet
advertisement, special events, endorsements, and newspapers to advertise their product. Many times
with the purchase of a product there is an incentive like discounts, free items, or a contest. This is to
increase the sales of a given product

Sales Promotion Strategies

There are three types of sales promotion strategies:

• A push strategy
• A pull strategy or
• A combination of the two

A 'push' sales promotion strategy involves 'pushing' distributors and retailers to sell your products and
services to the consumer by offering various kinds of promotions and personal selling efforts. What
happens here is that a company promotes their product/services to a reseller who in turn promotes it to
another reseller or to the consumer. The basic objective of this strategy is to persuade retailers,
wholesalers and distributors to carry your brand, give it shelf space, promote it by advertising, and
ultimately 'push' it forward to the consumer. Typical push sales promotion strategies include; buy-back
guarantees, free trials, contests, discounts, and specialty advertising items.

A 'pull' sales promotion strategy focuses more on the consumer instead of the reseller or distributor. This
strategy involves getting the consumer to 'pull' or purchase the product/services directly from the
company itself. This strategy targets its marketing efforts directly on the consumers with the hope that it
will stimulate interest and demand for the product. This pull strategy is often used when distributors are
reluctant to carry or distribute a product. Typical pull sales promotion strategies include; samples,
coupons, cash refunds or rebates, loyalty programs and rewards, contests, sweepstakes, games, and
point-of-purchase displays.

A 'combination' sales promotion strategy is just that; it is a combination of a push and a pull strategy. It
focuses both on the distributor as well as the consumers, targeting both parties directly. It offers
consumer incentives side by side with dealer discounts.

Q8. Write short notes

A- SDR

Special Drawing Rights (SDRs) are international foreign exchange reserve assets.[1]
Allocated to nations by the International Monetary Fund (IMF), a SDR represents a claim
to foreign currencies for which it may be exchanged in times of need.[1]
 Today, the US Dollar is the world's primary foreign exchange reserve asset, and SDRs
may be little used. Some nations, notably China and Russia, favour increasing the
substance and function of the SDR.[6][7]

Although denominated in US dollars, the nominal value of an SDR is derived from a

basket of currencies, specifically, a fixed amount of Japanese Yen, US Dollars, British
Pounds and Euros.[1]

SDRs are the International Monetary Fund's unit of accoun

B- BRANDIG
Branding is an important part of Internet commerce, as branding allows companies to build
their reputations as well as expand beyond the original product and service, and add to the
revenue generated by the original brand. To understand branding, it is important to know
what brands are. A brand is the idea or image of a specific product or service that consumers
connect with, by identifying the name, logo, slogan, or design of the company who owns the
idea or image. Branding is when that idea or image is marketed so that it is recognizable by
more and more people, and identified with a certain service or product when there are many
other companies offering the same service or product.

Branding is also a way to build an important company asset, which is a good reputation.
Whether a company has no reputation, or a less than stellar reputation, branding can help
change that. Branding can build an expectation about the company services or products, and
can encourage the company to maintain that expectation, or exceed them, bringing better
products and services to the market place.

C- DUMPING

"dumping" can refer to any kind of predatory pricing. However, the word is now
generally used only in the context of international trade law, where dumping is
defined as the act of a manufacturer in one country exporting a product to
another country at a price which is either below the price it charges in its home
market or is below its costs of production. The term has a negative connotation
as advocates of free markets see "dumping" as a form of protectionism.
Furthermore, advocates for workers and laborers believe that safeguarding
businesses against predatory practices, such as dumping, help alleviate some of
the harsher consequences of such practices between economies at different
stages of development (see protectionism). The Bolkestein directive, for example,
was accused in Europe of being a form of "social dumping," as it favored
competition between workers, as exemplified by the Polish Plumber stereotype.
While there are very few examples of a national scale dumping that succeeded in
producing a national-level monopoly, there are several examples of dumping that
produced a monopoly in regional markets for certain industries
 D- SPORTRATE

Q9. What is the difference between comparative cost theory and opportunity theory .Explain merits and
demerits of factor enrollment theory?