978-1259709074 Chapter 8 Solutions Manual

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Chapter 8 – Global Marketing Marketing 6th

Answers to End of Chapter Learning Aids

Marketing Digitally

1 For many small businesses, the idea of entering a foreign market is frightening. The U.S.

government, and most state governments now offer assistance designed specifically for

small-business owners. Visit the website of the Massachusetts Export Center at

http://www.mass.gov/export/ and examine the types of services it provides. Click on the

Export Statistics link. To what five countries did Massachusetts export the most? Are you

surprised?

The exercise allows students to explore the assistance available to businesses looking to enter a foreign

market.

1 Nike is a global brand, yet it alters its promotions to meet local tastes. Go to

http://store.nike.com/gb/en_gb/ and explore the U.K. site. Now go to the U.S. site. How are

these websites different?

The product assortment that Nike offers to U.K. customers is different from the product assortment for

Marketing Applications

1 What is globalization? Why is it important for marketers to understand what globalization

entails?

Globalization refers to the processes by which goods, services, capital, and people, information, and

2 Moots is a high-end bicycle manufacturer located in Steamboat Springs, Colorado. Assume

the company is considering entering the Brazilian, Chinese, and Indian markets. When

conducting its market assessment, what economic factors should Moots consider to make its

decision? Which market do you expect will be more lucrative for Moots? Why?

By taking the perspective of a global marketing professional considering expansion, students should

recognize the need for analyses of the Brazilian, Chinese, and Indian markets and thus recall the key

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Chapter 8 – Global Marketing Marketing 6th

3 Now consider the political, economic, and legal systems of China, India, and Brazil. Explain

why you think one country might be more hospitable to Moots than the others.

As a follow-up, this question prompts students to examine China, India, and Brazil from another

perspective: the political and legal risk. In this way, students gain a more comprehensive picture of the

4 Colgate sells its products in many countries throughout the world. How would you expect its

market position to differ in various countries, compared with that in the United States?

Consider various areas across the globe in formulating your answer.

Colgate should invest in understanding its international markets. Colgate might adapt some of the flavors

and benefits of its products to meet the unique needs of international markets. For example, consumers

5 How does Coca-Cola market its products differently in the BRIC countries? In formulating

your answer, go to: http://www.cocacola.com.br/;

https://www.coca-cola.ru/;http://www.coca-cola.in/en/home/; and http://www.icoke.cn/. What

are the benefits of being able to offer a globally standardized product? What types of products

easily lend themselves to global standardization?

Global products generally rely on one of three strategies: (a) sell the same product in both the home

country market and the host country (Coca-Cola’s Coke brand is available in all BRIC countries), (b) sell a

6 What are some examples of companies that use a glocalization strategy?

McDonald’s does not offer an American-style menu in a place like India, where many residents do not eat

beef. In India, McDonald’s sells mostly chicken, lamb, and vegetarian offerings.

7 Choose a firm that currently manufactures and sells its products or services only in the United

States. Choose and defend a global entry strategy for the firm.

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Chapter 8 – Global Marketing Marketing 6th

The Kroger Company is an American retailer and is the country’s largest supermarket chain by revenue

($109.83 billion for fiscal year 2015). It maintains markets in 34 states, with store formats that include

supermarkets, superstores, department stores, 786 convenience stores, and 326 jewelry stores.

Quiz Yourself

1 The shift of population from rural to urban areas in countries such as India helps global marketers by:

a. decreasing pollution.

b. simplifying the supply chain needed to make goods and services available.

c. increasing the human development index.

d. decreasing competition for intellectual capital.

e. increasing nonmaterial GDP output.

8 Why should marketers be aware of the BRIC countries?

a. They are a microcosm of the rest of the world.

b. They represent almost half the world’s population.

c. They are likely to be the source of most market growth.

d. They have had the most dramatic changes in culture and consumer buying patterns.

e. They have stable population growth, which makes them easier to study.

Chapter Case Study: The Globalization of the Most Ubiquitous of American

Cuisines—The Hamburger

1 Which sociocultural factors have informed McDonald’s global expansion?

While most of the sociocultural factors may impact expansion depending on the country, here are some of

the more dominant:

Uncertainty avoidance: The extent to which the society relies on orderliness, consistency, structure, and

9 Describe some of the global distribution strategies that McDonald’s uses or might consider

using to spread through-out the world.

In most countries the companies employs a franchising strategy. A franchising contract allows the

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10 Explain McDonald’s global marketing strategy. Compare McDonald’s strategy in the U.S.

(http://www.mcdonalds.com/us/en/home.html) to McDonald’s strategy in India

(http://www.mcdonaldsindia.com/).

Overall, McDonald’s values transcend borders and culture. However, the company will make the

necessary changes to adapt to the local environment. Globally, McDonald’s typically segments on (1) on

Additional Teaching Tips

In this chapter, students are exposed to global product development, distribution, and marketing strategy.

Students evaluate the similarities and differences between a domestic marketing strategy and a global

marketing strategy. Ethical consideration and cultural diversity are addressed as they impact the

marketing message.

Students will be re-introduced to business terms such as quota, various trade agreements, joint

venture, GNP, GDP, etc. To review these terms before discussing the concepts in the chapter, the

instructor may want to exercise a challenge similar to the Jeopardy game.

Divide students into four or five groups of equal size. The instructor writes down three-four terms from the

chapter on four or five note cards. The group then takes the word and writes a story problem without the

word in it. They can transfer the story problem to a transparency. One group presents each of their story

problems while the other groups (with one person being the spokesperson for the group) try to determine

the term. The group earns one point if they get the story problem correct. They also can lose a point if

they get it wrong and the next spokesperson’s hand that goes up (acting like a buzzer) gets a chance to

answer. Instructors can award the winning group with +2 points on a quiz or exam. This “livens-up”

content that is heavily laden with vocabulary.

Online Teaching Tip: This exercise can be transferred to a post situation with a term assigned to each

student and fellow students guessing the term. If the instructor can solicit a real-time chat, the students

can submit their story problems in advance of the session and the instructor can play the role of

presenting the story problems for the class.

Students do not fully appreciate cultural diversity and location and its impact on the four Ps until they

study a country and are assigned related questions to answer. Instructors may want to make this an

assignment with students turning to the Web for research. Questions asked may be: What social

customs may impact the way a product is marketed? Are there barriers to the distribution system? Is the

product use in the country consistent with the home country or do they differ and why? Will language

barriers present a problem?

Connect Activities

Activity Type Learning Objectives 08-

01 02 03 04

Manager’s Hot Seat Video Case X

Kraft: Marketing Globally Video Case X

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Manager’s Hot Seat

Activity Type: Video Case

Learning Objectives: 08-01

Difficulty: Medium

Activity Summary: This video shows an unsuccessful sales negotiation involving two

businesspeople—one from Japan and one from the U.S.—in which the failure can be attributed to

cultural differences. After the video ends, students are asked questions about the video and related

course concepts.

Activity

Introduction: Michael Sokoloff has assumed responsibility for a new client during the last stage of a

big deal, but he cannot for the life of him figure out why this Japanese businessperson won’t let him

close the deal. Watch as this real manager deals with this difficult situation.

Concept Review: Understanding another country’s culture is crucial to the success of any global

marketing initiative. Culture, or the set of values, guiding beliefs, understandings, and ways of doing

Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activities

Ask students how the company should have handled the situation differently—for example, keeping

Roger involved in order to make an orderly transition (this would be a good idea even in a situation

involving a U.S. customer). It would have been wise for the first meeting between the Japanese

businessman and the new account representative to have taken place in a social setting (with Roger

there as well)—a lunch or dinner, for example.

Kraft: Marketing Globally

Activity Type: Video Case

Learning Objectives: 08-04

Difficulty: Medium

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Activity Summary: Reviews Kraft’s global marketing strategy for the Oreo brand, addressing issues

related to each of the Four Ps. After the video ends, students are asked questions about the video

and related course concepts.

Activity

Introduction: At 95 years old, Kraft’s Oreo cookie is the most popular cookie in the world, enjoyed in

more than 100 countries spread across every continent. The Oreo cookie is truly a global product—

but although the Oreo adapts to meet the needs of various countries, it’s still an Oreo.

Concept Review: Globalization refers to the processes by which goods, services, capital, people,

information, and ideas flow across national borders. Global markets are the result of several

Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activity

Oreo has faced some challenges recently in maintaining its strong brand position in China. Assign this

article, and ask students to summarize the changes it describes to Kraft’s marketing mix for the Oreo in

China:

http://blogs.wsj.com/chinarealtime/2014/02/13/why-chinas-falling-out-of-love-with-the-oreo/

Global Entry Strategies

Activity Type: Click & Drag

Learning Objectives: 08-03

Difficulty: Medium

Activity Summary: Students are provided with five potential market entry approaches for a coffee

business and asked to match them with the market entry strategy they represent.

Activity

Introduction: A U.S. national coffee chain called Bean is reviewing the various strategies it could use

to enter its first international market in South America. The company is aware that different foreign

market entry strategies offer different levels of control and profit potential, but its executives are

primarily concerned with the risks involved in each strategy. Read about Bean’s various options and

then assemble the foreign market entry risk assessment as instructed.

Concept Review: A firm can choose from several approaches when entering a foreign market. The

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Follow-Up Activity

Ask students which of the options they think would make the most sense (and why) for:

A large company like Starbucks

A medium-sized company like Peet’s Coffee and Tea

A small-to-medium coffee bean roasting company that sells beans to other coffee companies but

does not run its own stores.

Country Market Assessment: Starbucks

Activity Type: Click & Drag

Learning Objectives: 08-01

Difficulty: Medium

Activity Summary: Students are presented with types of issues Starbucks might consider when

evaluating a market for expansion, and asked to classify them according to the four categories of

factors used to assess global markets. NOTE: This activity is very similar to the Under Armour click

and drag activity, also in this chapter.

Activity

Introduction: Starbucks Corporation (Starbucks) roasts and retails specialty coffee in stores

Concept Review: Firms must assess the viability of various potential foreign markets before

Follow-Up Activity

For one or more of the BRIC countries discussed in the text, identify potential issues in these four

Country Market Assessment: Under Armour

Activity Type: Click & Drag

Learning Objectives: 08-01

Difficulty: Medium

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Activity Summary: Students are presented with types of issues Under Armour might consider when

evaluating a market for expansion, and asked to classify them according to the four categories of

Activity

Introduction: Under Armour is at the forefront of its industry producing performance apparel for men,

women, and youth. The company provides products from everyday wear to just about any sport

activity in virtually all climates and conditions and has made itself known over the past 10 years by

Concept Review: Firms must assess the viability of various potential foreign markets before

Follow-Up Activity

For one or more of the BRIC countries discussed in the text, identify potential issues in these four

categories that might make the country a less attractive market for Starbucks.

The Globalization of the American Hamburger

Activity Type: Case Analysis

Learning Objectives: 08-01, 08-03, 08-04

Difficulty: Medium

Activity Summary: Students read a case exploring the way McDonald’s approaches global

expansion. Then they answer questions applying chapter concepts to the case.

Activity

Introduction: When companies expand to other countries, they must decide how to adapt their

Global Marketing: Domino’s Abroad

Activity Type: Video Case

Learning Objectives: 08-01, 08-03, 08-04

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Difficulty: Medium

Activity Summary: Domino’s Pizza earns over half its revenue from sales outside the USA. This

Activity

Introduction: Domino’s Pizza is the world’s largest pizza delivery chain, with stores in over 80

Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

ISeeIt Video Case: Global Entry Strategies

Activity Type: Video Case

Learning Objectives: 08-03

Difficulty: Easy

Activity Summary: This video case reviews different global entry strategies from the perspective of a

coffee company.

Activity

Introduction: When expanding into a global marketplace, companies must select a means of market

entry. The decision between exporting, franchising, a strategic alliance, a joint venture and direct

investment is based upon an organization’s interest in maintaining marketing control and how much of

Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

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