Porsche relies on currency hedging rather than price increases to boost pretax profits on
sales of its automobiles. What is the advantage of doing this, and how does hedging
work?
India has the youngest demographic profile among the world’s large nations with more
than half of its population being younger than 25 and the number of young people
below the age of 14 is greater than the entire U.S. population.
Grocery distribution companies in Brazil use logistics software to route their trucks;
meanwhile, horse-drawn carts are still a common sight on many roads.
Carly Fiorina, former CEO of Hewlett-Packard, said in her 2002 commencement
address at the Massachusetts Institute of Technology that leadership is not about
hierarchy or title or status: It is about having influence and mastering change.
“Piggyback exporter,” “cooperative exporter,” and “export vendor” are all terms used to
describe an export broker.
CRM tools allow companies like American Express, Dell, Sharp, and Sony to determine
which customers are most valuable and to react in a timely manner with customized
products and service offerings that closely match customer needs.
If a potential Latin American customer insists on giving you a tour of the architectural
highlights of his city prior to discussing business, it’s a clue that you are doing business
in a high-context culture.
Market research is the project-specific, systematic gathering of data and is the activity
that links the consumer, customer, and public to the marketer through information.
According to Hofstede’s research on cultural values, masculinity dimension describes a
society in which social roles of men and women overlap.
A company with a geocentric orientation views the world as a potential market and
strives to develop integrated global strategies.
The geocentric orientation represents a synthesis of ethnocentrism and regiocentrism.
Organizations as diverse as Disney, Caterpillar, and the National Basketball Association
make extensive use of licensing in overseas markets.
In an export/import transaction requiring a letter of credit (L/C), the exporter’s (seller’s)
bank can be known as the “advising” bank, the “confirming” bank, or both.
Recently, global companies have embraced a technique known as “pattern advertising”
which is analogous to the concept of global product platforms.
Franchising in a global market is actually a market-entry strategy that is typically
executed with less localization than is licensing.
A stakeholder is any group or individual that is affected by, or takes an interest in, the
policies and practices adopted by an organization.
During the 2004 Super Bowl broadcast, PepsiCo launched a joint promotion with
Apple’s iTunes Music Store. Anyone purchasing a bottle of Pepsi had a one-in-three
chance of being a winner. However, many people discovered that by tilting the bottles,
they could tell whether the bottle was a winner.
Despite the fact that Starbucks is widely admired for forward-thinking management
policies, Global Exchange allowed the company to further demonstrate its commitment
to social responsibility by selling Fair Trade coffee.
Gray market goods are trademarked products that are exported from one country to
another and sold by authorized persons or organizations.
Direct representation identifies that the exporter is selling directly to the consumer or
customer.
McDonald’s has learned the wisdom of leveraging local market knowledge by granting
franchisees considerable leeway to tailor restaurant interior designs and menu offerings
to suit country-specific preferences and taste.
“Market skimming” is a strategy that uses low prices as a competitive weapon to gain
market position.
As Pandora CEO Joe Kennedy recently remarked, “The good news is that the Internet is
global and that the copyright law is country by country.”
Kodak adopted a direct involvement approach in Japan by utilizing independent agents,
distributors, and retailers.
Four decades ago, the phrase global marketing did not exist.
Pareto’s Law suggests that 80% of a company’s revenues or profits are accounted for by
20% of a firm’s products or customers.
With a 2013 GNI per capita of $1,570, India has transitioned out of the low-income
category and is now classified as an upper-middle-income country, also known as an
industrializing or developing country.
Japanese retailers traditionally offered few extra services to clientele; their stock was
chosen not according to consumer demand but, rather, according to purchasing
preferences of the stores.
In countries like India and Vietnam, and other emerging markets, amenities such as
refrigerators, flush toilets, and cell phones are considered status symbols.
Domino’s Pizza had to pull out of Italy because Italians perceived its products to be “too
American.”
Uichiro Niwa, former president of Japan’s ITOCHU Corp., took steps to ensure that
more of the trading company’s $115 billion in annual transactions were conducted
online. He also radically changed the way he communicated with employees and began
relying more on e-mail, a practice that until recently was virtually unknown in Japan.
According to a recent “digital opportunity index” published by the United Nations,
Japan leads the world in providing its citizens with access to information and
communications technologies (ICT).
In the case of Volkswagen, dealers are its key consumers while individual car buyers are
the key consumers of the dealers.
Hewlett-Packard (HP) is the world’s leading marketer of inkjet printers. HP’s printers
are priced very low and margins are slim; by contrast, the company enjoys healthy
margins on sales of replacement ink cartridges. This approach is sometimes known as
“razors and blades” pricing.
Host-country nationals may possess work habits or selling styles that do not mesh with
those of the parent company.
China’s ongoing trade-related friction with the United States highlights the need for:
A) a better distribution system.
B) a better PR effort.
C) sales promotion.
D) a better transportation system.
E) pattern advertising.
Hindustan Lever recently developed a hard candy flavored with natural fruit juice that it
sells profitably in India for the equivalent of 1 cent per piece. This is Hindustan Lever’s
first-ever candy product. What strategy is evident here?
A) product-communications extension
B) product extension-communications adaptation
C) product adaptation-communications extension
D) dual adaptation
E) product invention
In the shipbuilding industry, Polish and Chinese shipyards offer simple, standard vessel
types at low prices that reflect low production costs. This represents generic strategy
related to:
A) cost leadership.
B) differentiation.
C) cost focus.
D) focused differentiation.
E) cost differentiation.
The process of global market segmentation begins with the choice of one or more
variables to use as a basis for grouping customers. All of the following are variables
that are commonly used except:
A) demographics.
B) polycentrics.
C) behavioral characteristics.
D) benefits sought.
E) psychographics.
Dietrich Mateschitz, Red Bull’s creator, stated “When we first started, we said that there
is not an existing market for Red Bull.” The reasons behind Red Bull’s success include
all of the following except:
A) a market was created for Red Bull.
B) a market segment was found with unmet needs.
C) the blue-and-silver color on cans helped in Red Bull’s popularity.
D) orthodox advertising strategies were used with tactics.
E) The Red Bulletin magazine helped in Red Bull’s popularity.
In the 1990s, Philips Electronics developed a new consumer electronics product called
the Digital Compact Cassette (DCC) player. DCC allowed users to record and playback
in a new digital format; DCC was also designed to play the older, analog cassette tapes
that many people own. This latter feature reflects which of the following characteristics
of innovations?
A) relative advantage
B) communicability
C) compatibility
D) complexity
E) divisibility
Ford Motor Company (United States) has a 50-50 joint venture to build Ford Fiestas
with:
A) Toyota (Japan).
B) Shanghai Automotive Industry (China).
C) BMW (Germany).
D) Mahindra & Mahindra (India).
E) Mazda (Japan).
Ironically, Motorola, a key player in the cell phone business, could have been first to
market with a cell phone camera.
In which of the following forms of export financing does a bank assume a financial
obligation?
A) with an L/C but not a documentary collection
B) with a documentary collection but not an L/C
C) neither an L/C nor a documentary collection requires a bank to assume financial
obligation
D) with either an L/C or a collection letter
E) with both an L/C and a documentary collection
All of the listed advantages are for “extension or ethnocentric” pricing strategy except:
A) it does not respond to the competitive and market conditions of each national
market.
B) it calls for the per-unit price of an item to be the same all over the world.
C) it is extremely simple since it does not require information on market condition.
D) it does not require competitive conditions for implementation.
E) the importer must absorb freight and import duties.
For years, ads for Volvo automobiles stressed safety features and protection in the event
of a crash. Thus, Volvo automobiles developed a reputation based on which positioning
strategy?
A) use/user
B) attribute/benefit
C) competition
D) high touch
E) quality/price
Because they are in transition, the markets of Central and Eastern Europe present
interesting opportunities and challenges which include:
A) new sources of growth.
B) first mover advantage.
C) exporting as an entry mode.
D) lower wage rate.
E) all of the above
The Maastricht Treaty called for:
A) the creation of an Asia Free Trade Area (AFTA).
B) the creation of an economic and monetary union in Europe.
C) Chile’s acceptance into Mercosur.
D) the purchase of CDs and tapes from distributors in Europe.
E) the creation of the seven-nation European Free Trade Association (EFTA).
Other international personal selling approaches that fall somewhere between sales
agents and full-time employee teams include all of the followingexcept:
A) exclusive license arrangements.
B) contract manufacturing or production.
C) management-only agreements.
D) franchising.
E) joint ventures.
Standardized print campaigns can be used for all of the following except:
A) visual appeal.
B) industrial products.
C) high-tech consumer products.
D) voiceovers TV commercials.
E) stereotype advertising.
The cell phone division of Toshiba prospered by doing business in the domestic market.
When handset sales slowed, Atsutoshi Nishida, president of Toshiba noted, “We were
thinking only about Japan. We really missed our chance.” This statement is indicative of
________ orientation.
A) polycentric
B) ethnocentric
C) geocentric
D) technocentric.
E) regiocentric
The kind of brand awareness a company wants to project is identified by:
A) area coverage.
B) buyer perception.
C) company organization.
D) national responsiveness.
E) in-house marketing.
After the aftermath of the tragedy involving fire in garment factories in Bangladesh, it
was found that the buildings were inspected by:
A) Dhaka’s building-safety authority.
B) Business Social Compliance Initiative (BSCI).
C) Walmart’s approved contractors.
D) Worker Rights Consortium.
E) Interfaith Center for Corporate Responsibility.
All of the following facts pertain to Brazil except:
A) It is the largest country in Latin America.
B) It boasts the richest reserves of natural resources in the hemisphere.
C) It’s top trading partner is China.
D) It’s GNI has grown at an average annual rate of 4 percent over the past 8 years.
E) It lacks logistics software, horse-drawn carts are still a common sight on many roads.
Mitsubishi Heavy Industries Ltd. and other Japanese companies manufacture airplanes
under license to U.S. firms, and also work as subcontractors for aircraft parts and
systems. This type of effort is known as:
A) searching for loose bricks.
B) collaborating.
C) building of layers of advantage.
D) changing the rules of engagement.
E) innovating.
If a marketing manager plans to enter newly industrializing-countries (NICs) or other
Asia markets with a product that has proved to be successful in the home market, the
product’s diffusion processes are likely to be:
A) negligible since consumers will take time to assess the relative advantage.
B) much slower than in the home market.
C) much faster than in the home market.
D) similar to that in the home market.
E) less compatible in the Asian market.
Other than tariffs, there are certain problems that restrict free trade between the
European Union and the United States which includes all of the following except:
A) use of genetically modified agricultural products.
B) product labeling.
C) Hollywood movie domination.
D) Internet usage.
E) cultural diversity.
Coca-Cola’s latest packaging innovation is Fridge Pack, a long, slender carton that
holds the equivalent of 12 cans of soda. This pack fits into the refrigerator’s lower shelf
and is convenient for use by global consumers.
With a 2013 GNI per capital of $1,570, India has transitioned out from the former
category and now is classified as a(n):
A) low-income country.
B) upper-middle-income country.
C) lower-middle-income country.
D) upper-income country.
E) lower-upper-income country.
Which of the following environmental factors may require marketers to adjust their
approach to conducting international as opposed to domestic marketing research?
A) Researchers must be prepared for new parameters of doing business.
B) Company personnel must come to grips with a new set of culture-based assumptions
about conducting business.
C) Research may help reduce psychological overload.
D) Researchers may have to broaden the definition of competitors to include
competitive pressures not present in the domestic market.
E) All of the above
________ is an independent marketing intermediary that acts as the export department
for two or more manufacturers whose product lines do not compete with each other.
A) Manufacturer’s export agent
B) Export commission representative
C) Export merchant
D) Export management company
E) Cooperative exporter
The Middle East and North Africa are sometimes viewed as a regional entity known as
“Mena.”
Which approach to retail expansion is most appropriate when targeting a country that
management considers both culturally close and easy to enter?
A) organic growth
B) chain acquisition
C) franchise
D) joint venture
E) own-label focus
Argentina provides a good example of how a country can emerge from an economic
crisis as a stronger global competitor as per the following statement:
A) Argentina reduced the duties on consumer goods.
B) Argentina devalued its currency for exports and capital transactions.
C) Argentina added tariffs on imported wines.
D) Argentina adopted the U.S. dollar as official currency.
E) Argentina added tariffs on wine produced within the country.
For consumer products, qualitative research is especially well suited to accomplish all
of the following tasks except:
A) provide consumer understanding.
B) describe the social and cultural context of consumer behavior.
C) identify core brand equity and brands.
D) assess consumer spending trends.
E) what consumers really feel.
One of the most exciting projects in the Central American region in 2014 was:
A) the enlargement of the Panama Canal.
B) Central America’s effort to revive its common market.
C) the five original members’ decision to reestablish the CACM.
D) the establishment of Guatemala as region’s headquarter.
E) the Free Trade Agreement with the United States.
Anheuser-Busch and Miller Brewing both experienced market failures in the United
Kingdom when they used the phrase “light beer” which was misinterpreted as:
A) being low in calories.
B) having reduced alcohol levels.
C) having light color.
D) having less quality.
E) having less quantity.
One of the key advantages of an EDI (Electronic Data Interchange) system is:
A) it allows easy access to all company data to vendors.
B) its transaction formats are universal.
C) it allows third-party transmission connections to company data.
D) it saves both time and money by using different languages.
E) vendors receive orders by voice mail.
Government in Singapore and Korea offer large sums of money to private citizens and
businesses to pay for broadband equipment and consulting services. In contrast, the
spread of broadband is very slow in the United States. What could be the reason for
slow movement in the United States?
Grey China Advertising agency gathers a wealth of information about attitudes and
buying patterns of the Chinese in its Grey China Base Annual Consumer Study. Recent
findings point to growing concerns about the future, Westernization of grocery
purchases, growing market saturation, increasingly discerning customers and a rise in
consumer willingness to try new products. These data can be very inconsistent since
conflicting findings were reported by different agencies. For example, data gathered by
Euromonitor International estimates soft-drink consumption at 23 billion liters in China,
while Coca-Cola’s in-house marketing research team places the figure at 39 billion
liters. Similar differences were noted in other data published by different agencies.
What is the best approach in such situations so that finite decisions can be made? What
are the differences between latent and incipient markets?
One of the basic elements of Roger’s diffusion theory is the concept of adoption process
which deals with the mental stages through which an individual passes from the time of
his or her first knowledge of an innovation to the time of product adoption or purchase.
Briefly describe these stages giving examples of Apples’ iPhone.
What are some of the salient characteristics and differences between high- and
low-context cultures?
How can observational studies and focus groups be used in marketing research? What
are the different methods by which these studies are conducted?
The Coca-Cola Company has convincingly demonstrated that the ability to think
globally and act locally can be a source of competitive advantage. Justify this statement
using examples.
In 2012, a scandal broke out after horse DNA was found in frozen beef burgers sold in
supermarkets in Ireland. What are the factors and impact of this scandal on consumer’s
food selection patterns and health consequences?
Companies are faced with the decision whether to expand by seeking new markets in
existing countries or seeking new country markets for already identified and served
market segments. Faced with these situations, what are the strategies that can be
followed?
McDonald’s, Philips Electronics, 3M International and many other similar well known
global corporations are operating in Central and Eastern Europe. Some countries in the
region are still recovering from decades of command economies. What makes the
region so attractive for global business corporations?
Food is a product category most likely to exhibit cultural sensitivity. Using Heinz
ketchup as an example, discuss how the company has used its advertising taking into
account cultural sensitivities in different parts of the world.
Michael E. Porter, a leading theorist of competitive strategy, developed a five forces
model to explain competition in an industry. List these forces and describe the impact of
the threat of new entrants.
There is an ongoing debate between ‘standardization” versus “adaptation” pertaining to
global advertising. Explain how different sides of the arguments fit into the global
context.
There are specific characteristics of innovations that affect which innovations are
adopted. Define those characteristics giving examples of products or services.
What are some examples of global marketing where corporations have undertaken
Corporate Social Responsibility (CSR)?
Discuss the basics of a framework for selecting target markets highlighting the salient
features of David Arnold’s framework.
Colgate Total toothpaste is positioned as the brand that addresses all aspects of oral
health. Such positioning is very important from a business point of view. How does
positioning help in deciding on a marketing strategy? What are the differences between
using “attribute or benefit” and “quality and price” as positioning strategy?
If a Lexus car is priced in U.S. dollars and sold at the dollar converted price in Indian
rupees, what problems can be expected? What is the difference between ethnocentric,
polycentric and geocentric pricing?
What is meant by Comparative Analysis and Market Estimation by Analogy? How can
these be helpful in marketing research?