978-1305405769 Chapter 8 Part 2

Unlock access to all the studying documents.

View Full Document

Chapter 8: Error! Unknown document property name.

overall marketing strategy.

1. Regardless of the extent to which a firm chooses to globalize its marketing strategy,

extensive environmental analysis and marketing research are necessary to understand the

needs and desires of the target market(s) and successfully implement the chosen marketing

strategy.

E. A global presence does not automatically result in a global competitive advantage; however, a

global presence generates five opportunities for creating value:

1. To adapt to local market differences

2. To exploit economies of global scale

3. To exploit economies of global scope

4. To mine optimal locations for activities and resources

5. To maximize the transfer of knowledge across locations

Chapter 8: Error! Unknown document property name.

DISCUSSION STARTERS

Discussion Starter 1: Global Service in a Global Economy

The video clip below portrays AT&T and its global services. As a discussion starter, students can be

asked to name other well-known global companies and what their particular expertise is.

http://www.youtube.com/watch?v=F24ckDW0izI

Discussion Starter 2: FedEx and Customer Satisfaction

FedEx frequently appears on lists of the most admired companies in the world. FedEx is globally known

for its creative advertising and its operational excellence in moving packages from their origins to their

destinations quickly. Below are several video clips that highlight Federal Express’s creative advertising.

http://www.youtube.com/watch?v=31yxkSIIn9A

http://www.youtube.com/watch?v=6hKWM5Z1zds&feature=related

After viewing these clips, instructors can ask how many students have used Federal Express or other

companies to send packages. If so, instructors should ask students why they spend the extra money (rather

than shipping packages using the US Postal Service), and ask the students if anyone has had a package get

lost or arrive late.

Discussion Starter 3: Global Shipping

ASK: What is more than ¼ mile long and can carry more than a 44–mile-long train?

Chapter 8: Error! Unknown document property name.

CLASS EXERCISES

Class Exercise 1: Environmental Forces and Marketing Strategy

The objective of this class exercise is to point out how various environmental forces may influence a

company’s marketing strategy. The information contained in the examples came from an actual in-class

discussion among students, many of whom were from European countries. The text offers numerous other

examples that students can use if they have not been to Europe.

Prompt for Students: There are many differences between European countries and the United States. The

following are just some of the examples:

• CULTURAL—advertising in many European countries often contains nudity. Some Europeans are

not as concerned with body odor and cleanliness as are people in the United States.

• SOCIAL—people in the United States are often more serious and aggressive about religion than

people in some European countries. Sports fans (particularly those of soccer) in Europe are much

more fanatic and violent; in some cases, large fences are needed to separate the fans of different

teams.

• ECONOMIC—European countries in general place a greater emphasis on public transportation

(train and bus) than does the United States. Many European countries face much higher inflation

rates than does the United States.

• POLITICAL/LEGAL—in some European countries, bribes and payoffs are common business

practices. Other countries allow the sale of narcotic drugs without prosecution. Prostitution is legal

in some countries.

• TECHNOLOGICAL—most countries outside the United States use the metric system. Television

and radio are often not as widespread as they are in the United States.

Based on your understanding of differences between European countries and the United States, how

might a U.S. company’s marketing strategy be affected in each of the following situations?

a. The Walt Disney Company opens EuroDisney in Paris, France.

b. McDonald’s opens a fast-food restaurant in Berlin, Germany.

c. The National Football League forms a team in Barcelona, Spain.

d. Federal Express begins overnight package delivery to Hungary.

e. Procter & Gamble begins to sell Safeguard soap in France.

Answers:

Chapter 8: Error! Unknown document property name.

the new team should anticipate the actions of excited sports fans.

d. Federal Express would be concerned about the availability of transportation and communication

networks in Hungary. Additional concerns might include changes in weights and measurements,

pricing, and advertising.

e. If Procter & Gamble begins to sell Safeguard soap in France, the company has a unique

challenge—How do you convince people who are less concerned about body odor to buy deodorant

soap? This problem will force many changes in the company’s advertising.

In addition to these specific changes, students should recognize other changes. Will bribes or payoffs be

required to establish businesses in these foreign countries? How will inflation rates affect the prices these

companies must charge for their products? Can the people of these countries even afford to buy the

products? McDonald’s initially had this problem in Moscow, where a Big Mac could cost as much as half

a day’s wages for some Muscovites.

Class Exercise 2: International Environmental Forces

The following environmental forces affect international markets: sociocultural, economic, political/legal,

social responsibility/ethics, competitive, and technological. With which force is each of the following

most closely associated?

Characteristic

Environmental Force

Handshaking

Sociocultural

Religion

Sociocultural

Transportation networks

Economic, political/legal

Computer literacy

Social/technological

Sporting events

Sociocultural

Color preferences

Sociocultural

Standard of living

Economic

Role of children in the family

Sociocultural

Communications equipment

Technological

10.

Touching

Sociocultural

11.

Import restrictions

Political/legal

12.

Government stability

Political/legal

13.

Climate

Economic

14.

Language

Sociocultural

15.

Payoffs and bribes

Sociocultural/legal/ethics

This exercise asks students to match each factor with its corresponding environmental force, but it should

not end there. Ask your students to explain their own customs, such as handshaking, the use of color, or

behavior at sporting events. Chances are they take these things for granted in their lives and will have

some difficulty explaining them to the class. Then correlate this difficulty to the challenge of

understanding the environmental forces affecting international marketing activities. Most likely answers

are included next to each characteristic.

Chapter 8: Error! Unknown document property name.

Class Exercise 3: Global Interests

Ask students to write down their top three choices of countries they would like to visit and why. Once

completed, these results can be compiled and shared with the class as an example of how diverse and

eclectic people are in their global awareness and interest. The larger the class the better this exercise

works. Also, it is likely that the top countries listed will be Australia and western European countries.

This provides food for thoughts on how Euro/Anglo-centric America can be.

Chapter 8: Error! Unknown document property name.

CHAPTER QUIZ

1. By 2009, NAFTA created a totally free trade area between the United States,

a. Canada and Mexico.

b. Japan and China.

c. Brazil and Mexico.

d. Cuba and Panama.

e. Panama and Canada.

2. A duty levied by a nation on goods bought outside its borders and brought inside is called a(n)

a. import duty.

b. embargo.

c. quota.

d. export tariff.

e. import tariff.

3. __________ bring together buyers and sellers from different countries and collect a commission for

arranging sales.

a. Export agents

b. Licensors

c. Trading companies

d. Import specialists

e. Trade brokers

4. Globalization of marketing involves

a. developing a set of marketing strategies for the entire world or major regions of the world.

b. performing marketing activities across national boundaries.

c. exporting goods and services to foreign countries.

d. creating value and exchanging value between countries.

e. locating operations or subsidiaries in many countries.

Chapter 8: Error! Unknown document property name.

ANSWERS TO ISSUES FOR DISCUSSION AND REVIEW

1. How does international marketing differ from domestic marketing?

2. What factors must marketers consider as they decide whether to engage in international

marketing?

International marketing involvement relates to the firm’s goals and the perceived opportunity from

3. Why are the largest industrial corporations in the United States so committed to international

marketing?

4. Why do you think this chapter focuses on an analysis of the international marketing

environment?

5. If you were asked to provide a small tip (or bribe) to have a document approved in a foreign

nation where this practice is customary, what would you do?

6. How will NAFTA affect marketing opportunities for U.S. products in North America (the

United States, Mexico, and Canada)?

Chapter 8: Error! Unknown document property name.

NAFTA makes it easier for U.S. businesses to invest in Mexico and Canada, provides protection for

7. What should marketers consider as they decide whether to license or enter into a joint venture

in a foreign nation?

A decision to license or to enter into a joint venture in a foreign country depends on the nature of the

8. Discuss the impact of strategic alliances on international marketing strategies.

9. Contrast globalization with customization of marketing strategies. Is one practice better than

the other?

10. What are some of the product issues that you need to consider when marketing luxury

automobiles in Australia, Brazil, Singapore, South Africa, and Sweden?

Students’ responses to this question may vary depending on their own knowledge and understanding

Chapter 8: Error! Unknown document property name.

ANSWERS TO DEVELOPING YOUR MARKETING PLAN

The information obtained from these questions should assist you in developing various aspects of your

marketing plan. Develop your marketing plan online using the Interactive Marketing Plan at

1. Review the environmental analysis that was completed in Chapter 3. Extend the analysis for

each of the seven factors to include global markets.

Students’ answers will vary. Students should begin to think about the international challenges

2. Using Figure 8.1 as a guide, determine the degree of international involvement that is

appropriate for your product and your company.

Students’ answers will vary. The product and company of most students will have some degree of

3. Discuss the concepts of customization and globalization for your product when moving to

international markets. Refer to Table 8.6 for guidance in your discussion.

Students’ answers will vary. Table 8.6 provides a variety of international issues for students to

Chapter 8: Error! Unknown document property name.

COMMENTS ON VIDEO CASE 8: EVO: THE CHALLENGE OF GOING

GLOBAL

Summary

Evo is an active sports retailer that has unexpectedly become a global distributor. Founded as an

online store in 2001, the company opened its Seattle-based retail store four years later; this

combination of e–commerce and physical stores allows evo to carry a greater selection and extend its

global reach while providing customers with a way to interact with its products. Approximately 5

percent of evo’s business comes from outside the United States, but the company has been

constrained by its relationships with international vendors. Evo hopes to work with its vendors to

make global selling more feasible. In the meantime, the company continues to ship directly to

consumers and engage with its fans through the Internet.

Questions for Discussion

1. What are both the positive and negative outcomes from using exclusive dealer agreements

that restrict global distribution?

2. What are the unique product features that could make evo a global brand?

3. What should evo’s marketing strategy be to go global?