International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
11 Instructor’s Manual – Module 7 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
3. Developing countries represent over three-quarters of the world’s total
population
4. Many forces are responsible for reduction in birthrates, but declining birthrates
in many developed countries is cause for concern in those nations in terms of
future prosperity, workforce size, ability to support social security systems, and
similar considerations.
5. Figure 7.6 shows percentages of Elderly (over 65) in the population of selected
countries, for 2013 and projected for 2025.
C. Population Density and Distribution
1. Population density refers to the number of inhabitants per area unit, such as per
square mile.
a. Densely populated areas tend to make product distribution and
communications simpler and less costly
b. Should know how populations are distributed (e.g., urban versus rural;
impact of geographic features such as mountains and waterways)
2. Especially in developing countries, there is an evident rural-to-urban shift as
people move to cities for higher wages and more conveniences.
a. In 2008, for the first time half of the world’s population was living in
cities; this is expected to increase to 60 percent by 2030
b. Table 7.8 indicates that the greatest urban shifts are occurring in low–
and middle-income countries.
D. Other Socioeconomic Dimensions
1. Increase in the number of working women may produce a larger labor supply,
and also result in larger family incomes, a greater market for convenience goods,
a need to alter promotional methods, and perhaps changes in production
processes, employee facilities, and human resource policies.
2. Data on a country’s divorce rate may indicate formation of single-parent families
and single-person households
3. In many nations, important ethnic groups may require special consideration by
both marketing and human resource managers
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
CONNECT TOOLS FOR CLASS PREPARATION
SmartBook
How Does SmartBook Help You/Students?
• Assignable – assigning students their reading and studying their textbook content
ensures they are coming to class prepared.
• Proven to help students get a better grade. Studies show SmartBook technology can help
increase grades by a full letter.
offline–via your browser or mobile app.
• Results in real time. Track student progress–and prevents them from wait for midterms
or finals. Know how well you understand the material now.
•
How to assign SmartBook to ensure students come to class prepared?
minutes.
• Assign points to the assignment. Instructors have found that if they give the
LearnSmart/SmartBook assignment a minimum of 10% of the course grade that students
are more likely to complete the assignment.
• The entire LearnSmart/SmartBook module is available to your student at all times,
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
13 Instructor’s Manual – Module 7 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
• The student’s LearnSmart/SmartBook score in the Connect reports is based on their
mastery of the material at the time the assignment is due. Mastery is an evaluation of
the number of learning objectives they completed via performance on answering
questions.
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
ENGAGEMENT & APPLICATION (FACE TO FACE & ONLINE & HYBRID)
BOXED TEXT DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS
IB IN PRACTICE: Assessing PPP Using the Big Mac Index
The Economist magazine presents an interesting application of PPP theory through its “Big Mac
currency is overvalued or undervalued. The figure in this box shows the overvaluation and
undervaluation of national currencies using the implied exchange rate, based on the market
price of the Big Mac.
The Economist claims that its Big Mac index performs pretty well over the long run. Of course,
when using this index, we must remember that the price of a Big Mac represents more than a
Online and Hybrid: Assign questions to be prepared in virtual teams and submitted as a
team assignment, or submitted individually and then discussed in a blog or group discussion site.
Face-to–Face: Students develop responses to the questions in class in teams/groups
1. Under what conditions might an index based on the pricing of Big Mac sandwiches be
most useful in understanding whether a particular currency is overvalued or undervalued?
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
2. UBS Wealth Management Research has used the Big Mac index as a basis for assessing
the purchasing power of an average worker in a particular country. In this regard, they
identify the amount of time an average worker in a nation would have to work in order to
earn enough money to buy a Big Mac. How might information such as this be of value to
business people?
GLOBAL DEBATE: How to Best Measure Development: Economy or People?
1. Which approach to measuring development do you think would be most useful for
international managers to follow in assessing a potential market’s level of development?
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
16 Instructor’s Manual – Module 7 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This
document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
2. Do you agree or disagree with Robert Kennedy’s assertions that an approach to
understanding development that relies on market data is not really what we need to know to
understand our development as people (and markets)? Defend your answer.
3. If you were the manager of a subsidiary of an international company and you were asked
by the host country government to justify your proposed investment in a production plant
based on human development needs, what arguments could you provide to help support your
position?
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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
GET THAT JOB! FROM BACKPACK TO BRIEFCASE
Jason Jack Peters: Understand New Cultures through Immersion
1. How would you evaluate Jason Peters’ efforts to understand and integrate effectively
within Korean, Chinese and Brazilian cultures? How can such efforts help him to achieve his
objective of immersing within and understanding other cultures?
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
2. Jason Peters says that he has learned that, for someone who wishes to develop
international skills and experiences, the biggest challenge is oneself. Do you agree with this
assertion? Why or why not? What do you think of his recommendations for addressing this
challenge?
END OF MODULE EXERCISES
CRITICAL THINKING QUESTIONS
1. What impacts do economic forecasts have on a firm’s functional areas? If
management learns from the economic analysis of country A that wage rates are expected to
increase by 10 percent next year, which functional areas of the firm will be concerned? Why
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
2. When might a country’s level of economic development mislead a marketer?
3. What might the differences between economically developing and developed nations
mean to an international company considering entry into a foreign market?
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 7
4. Why should managers of international companies be concerned about purchasing
power parity?
5. What is the value of using data on GNI per capita and population density when
analyzing the attractiveness of an economy? What limitations or potential problems can arise
when using these data in an analysis?