Market Research & Competitive Analysis Flashcards

A company uses 'desk research' (secondary research) as the first step in international market analysis. What is the PRIMARY advantage of this approach?

Answer: It is faster and less expensive than primary research, using existing published data

Secondary (desk) research leverages existing data from government reports, trade associations, and databases, making it quicker and cheaper than collecting new primary data.

Which element of a competitive analysis examines a rival firm's capabilities, cost structure, and strategic intent rather than just its market share?

Answer: Competitor profiling

Competitor profiling goes beyond market share to assess a rival's financial strength, technology base, management goals, and likely strategic moves.

The 'product life cycle' theory of international trade (Vernon) suggests that products are initially exported from the U.S. and later produced abroad because:

Answer: As a product matures and technology diffuses, lower-cost foreign production becomes competitive

Raymond Vernon's product life cycle theory holds that innovation occurs in high-income countries but as products standardize, production shifts to lower-cost countries with cheaper labor.

An exporter analyzing survey data from a foreign market finds that 40% of respondents gave socially desirable answers rather than their true opinions. This research bias is called:

Answer: Social desirability bias

Social desirability bias occurs when respondents answer questions in a way they believe is more acceptable to the interviewer rather than expressing their actual views or behaviors.

When computing the 'market share' of a U.S. exporter in a foreign country, the denominator should be:

Answer: Total imports of the product by that foreign country from all sources

Export market share in a target country is typically calculated as the exporter's sales in that country divided by total imports of that product by the country from all sources.

A key output of competitive analysis used in export pricing strategy is the 'landed cost' comparison. Which cost component is INCLUDED in landed cost?

Answer: Ocean freight, insurance, and import duties to deliver goods to the foreign buyer's door

Landed cost includes all costs to deliver goods to the destination—product cost, ocean/air freight, insurance, customs duties, and destination charges—allowing direct price comparison with local competitors.

Which method of estimating foreign market demand uses analogies from countries at similar stages of economic development to project product adoption rates?

Answer: Proxy indicator / analogy method using comparable country data

The analogy method estimates demand in a new market by using actual consumption data from a country at a similar development stage as a proxy, on the assumption that adoption patterns will mirror each other.