Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 5 ♦ Developing a Global Vision 1
CHAPTER 5 Developing a Global Vision
This chapter begins with the learning outcome summaries, followed by a set of lesson plans for you to use to
deliver the content in Chapter 5.
Lecture (for large sections) on page 3
Company Clips (video) on page 4
Group Work (for smaller sections) on page 6
Review and Assignments begin on page 7
Review questions
Application questions
Application exercise
Ethics exercise
Video Assignment
Case Assignment – P&G, Unilever, Panasonic
Great Ideas for Teaching Marketing from faculty around the country begin on page 18
We’ve also created integrated cases that cover the topics in Chapters 1 through 5.
• Nestle on page 23
• Telekom Austria on page 27
Chapter 5 ♦ Developing a Global Vision 2
LEARNING OUTCOMES
5-1 Discuss the importance of global marketing
Businesspeople who adopt a global vision are better able to identify global marketing opportunities, understand the
nature of global networks, create effective global marketing strategies, and compete against foreign competition in
domestic markets. Large corporations have traditionally been the major global competitors, but more and more small
businesses are entering the global marketplace. Despite fears of job losses to other countries with cheaper labor, there are
many benefits to globalization, including the reduction of poverty and increased standards of living.
5-2 Discuss the impact of multinational firms on the world economy
Multinational corporations are international traders that regularly operate across national borders. Because of their
vast size and financial, technological, and material resources, multinational corporations have great influence on the
world economy. They have the ability to overcome trade problems, save on labor costs, and tap new technology.
There are critics and supporters of multinational corporations, and the critics question the actual benefits of bringing
capital-intensive technology to impoverished nations. Many countries block foreign investment in factories, land,
and companies to protect their economies. Some companies presume that markets throughout the world are more
and more similar, so some global products can be standardized across global markets.
5-3 Describe the external environment facing global marketers
Global marketers face the same environmental factors as they do domestically: culture, economic and technological
development, the global economy, political structure and actions, demography, and natural resources. Cultural
considerations include societal values, attitudes and beliefs, language, and customary business practices. A country’s
economic and technological status depends on its stage of industrial development, which, in turn, affects average family
incomes. A global marketer today must be fully aware of the intertwined nature of the global economy. The political
structure is shaped by political ideology and such policies as tariffs, quotas, boycotts, exchange controls, trade
agreements, and market groupings. Demographic variables include the size of a population and its age and geographic
distribution. A shortage of natural resources also affects the external environment by dictating what is available and at
what price.
5-4 Identify the various ways of entering the global marketplace
Firms use the following strategies to enter global markets, in descending order of risk and profit: direct investment, joint
venture, contract manufacturing, licensing and franchising, and exporting.
5-5 List the basic elements involved in developing a global marketing mix
A firm’s major consideration is how much it will adjust the four Ps—product, promotion, place (distribution), and
price—within each country. One strategy is to use one product and one promotion message worldwide. A second
strategy is to create new products for global markets. A third strategy is to keep the product basically the same but alter
the promotional message. A fourth strategy is to alter the product slightly to meet local conditions.
5-6 Discover how the Internet is affecting global marketing
Simply opening an e-commerce site can open the door for international sales. International carriers, such as UPS, can
help solve logistics problems. Language translation software can help an e-commerce business become multilingual. Yet
cultural differences and old-line rules, regulations, and taxes hinder rapid development of e-commerce in many
countries. Global marketers use social media not only for understanding consumers but also to build their brands as they
expand internationally.
Chapter 5 ♦ Developing a Global Vision 3
TERMS
buyer for export
exporting
joint venture
capital intensive
floating exchange rates
licensing
contract manufacturing
General Agreement on Tariffs and
Trade (GATT)
Mercosur
countertrade
global marketing standardization
multidomestic strategy
direct foreign investment
global marketing
multinational corporation
Dominican Republic-Central
America Free Trade Agreement
(CAFTA-DR)
global vision
North American Free Trade
Agreement (NAFTA)
dumping
gross domestic product (GDP)
outsourcing
European Union (EU)
Group of Twenty (G-20)
Uruguay Round
exchange rate
inshoring
World Bank
export agent
International Monetary Fund (IMF)
World Trade Organization
(WTO)
export broker
LESSON PLAN FOR LECTURE
Brief Outline and Suggested PowerPoint Slides:
Learning Outcomes and Topics
PowerPoint Slides
LO1 Discuss the importance of global marketing
5-1 Rewards of Global Marketing
1: Developing a Global Vision
2: Learning Outcomes
3: Learning Outcomes
4: Rewards of Global Marketing and the Shifting
Global Business Landscape
5: Rewards of Global Marketing
6: Importance of Global Marketing to the U.S.
7: Job Outsourcing and Inshoring
8: Benefits of Globalization
LO2 Discuss the impact of multinational firms on the
world economy
5-2 Multinational Firms
9: Multinational Firms
10: Stages of Global Business Development
11: Are Multinationals Beneficial?
12: Global Marketing Standardization
Chapter 5 ♦ Developing a Global Vision 4
LO3 Describe the external environment facing global
marketers
5-3 External Environment Facing Global
Marketers
13: External Environment Facing Global Marketers
14: External Environment Facing Global Marketers
15: Culture
16: Culture
17: Economic Development
18: The Global Economy
19: Economic Development
20: Political Structure and Actions
21: Legal Considerations
22: Political and Legal Considerations
23: Doha Round
24: Political and Legal Considerations
25: Exhibit 5.1: Members of G-20
26: Demographic Makeup
27: Natural Resources
LO4 Identify the various ways of entering the global
marketplace
5-4 Global Marketing by the Individual Firm
28: Global Marketing by the Individual Firm
29: Why “Go Global”?
30: Exhibit 5.2: Risk Levels for Five Methods of
Entering the Global Marketplace
31: Entering the Global Marketplace
32: Export Intermediaries
LO5 List the basic elements involved in developing a
global marketing mix
5-5 The Global Marketing Mix
33: The Global Marketing Mix
34: The Global Marketing Mix
35: Product and Promotion
36: Place (Distribution)
37: Pricing
38: Exchange Rates
39: Dumping
40: Dumping
41: Countertrade
LO6 Discover how the Internet is affecting global
marketing
6.1 The Impact of the Internet
42: The Impact of the Internet
43: The Impact of the Internet
44: Social Media
45: Chapter 5 Video
46: Part 1 Video
Suggested Homework:
• The end of this chapter contains an assignment on the Nederlander Organization video and the Nissan case.
• This chapter’s online study tools include flashcards, visual summaries, practice quizzes, and other resources that can
be assigned or used as the basis for longer investigations into marketing.
LESSON PLAN FOR VIDEO
Company Clips
Segment Summary: The Nederlander Organization
The Nederlander Organization is a theatre management company that manages a global network of Broadway style
theatres. In this video clip, top management discusses how the Nederlander Organization grew from a small mid-west
theatre management company into a global brand that helps successful producers move from Broadway to a global tour
circuit.
Chapter 5 ♦ Developing a Global Vision 5
These teaching notes combine activities that you can assign students to prepare before class, that you can do in class
before watching the video, that you can do in class while watching the video, and that you can assign students to
complete on their own after watching the video.
During the viewing portion of the teaching notes, stop the video periodically where appropriate to ask students the
questions or perform the activities listed on the grid. You may even want to give the students the questions before
starting the video and have them think about the answer while viewing the segment. That way, students will be engaged
in active viewing rather than passive viewing.
PRE-CLASS PREP FOR YOU:
PRE-CLASS PREP FOR YOUR STUDENTS:
• Preview the Company Clips video segment for
Chapter 5. This exercise reviews concepts for LO1,
LO3, and LO5.
• Review your lesson plan.
• Make sure you have all of the equipment needed to
show the video to the class, including the DVD and a
way to project the video.
• You can also stream the video HERE
• Have students familiarize themselves with the
following terms and concepts: global marketing, global
vision, and multinational corporation.
• Have students explore the various parts of the
Nederlander Organization’s Web site:
http://www.nederlander.com/
VIDEO REVIEW EXERCISE
ACTIVITY
Warm Up
Begin by asking your students the following questions:
• Without looking, which of you knows (or is confident that you know) where your backpack
was made? Where?
• OK, who was right? Who was wrong?
• “Who cares where their backpack was made?”
[For students who raise their hands to the last question, push them to answer why.]
In-class
Preview
• Segue into a lecture that centers around these questions: “What is global vision?” and “Why is
global marketing imperative for businesses?”
• Review the negatives and benefits of global trade and what it means to be a multinational
company.
• Illustrate the factors of the external environment
• Review the Company Clips questions with students. They should be prepared to answer them
after viewing the video.
Viewing
(Solutions
below.)
1. Is the Nederlander Organization a multinational company? Explain.
2. Which environmental factor(s) facing all global marketers is the Nederlander Organization
confronting as it begins to expand into foreign markets?
3. Outline the Nederlander Organization’s global marketing mix.
Follow-up
• Spark a debate in class by asking students to respond to the following statement: “Any company
can benefit by going global.”
• Have students use the Internet or Yellow Pages to identify a retail store with international
partners or shipping policies. Students should then e-mail or call the company and ask the
manager or sales personnel to describe a difficulty they have overcome in implementing their
global marketing strategy. Ask students to be prepared to share their research at the next class
meeting.
Solutions for Viewing Activities:
1. Is the Nederlander Organization a multinational company? Explain.
Chapter 5 ♦ Developing a Global Vision 6
The Nederlander Organization has direct investment in the U.K., where it owns theatres and acts as a producer and
2. Which environmental factor(s) facing all global marketers is the Nederlander Organization confronting as it
begins to expand into foreign markets?
3. Outline the Nederlander Organizations’s global marketing mix.
By expanding into the United Kingdom, Nederlander did not face a language barrier or much of a cultural barrier, so
LESSON PLAN FOR GROUP WORK
In most cases, group activities should be completed after some chapter content has been covered, probably in the second
or third session of the chapter coverage. (See the “Lesson Plan for Lecture” above.) For “Class Activity – Reverse
International Marketing,” divide the class into small groups of four or five people. Provide the information and the
questions asked by the class activity.
Class Activity – “Reverse” International Marketing
The outcome of this exercise is to get students to understand first-hand the challenges of marketing internationally.
Students won’t understand what they’re doing wrong if they take an American product and hypothetically market it to a
foreign country. So, they will do “reverse” international marketing by taking a foreign product and marketing it in the
United States. (As U.S. consumers themselves, they’ll understand what foreign firms have done wrong in marketing their
products in the United States.)
Before this class session, you should shop for some products made by foreign firms. You can either have friends in
foreign countries send you these products or buy them yourself at a local grocery store that sells foreign products.
Possibilities include ethnic grocery stores (such as Latino stores or Japanese food stores) or chains such as Cost Plus or
Pier One that import inexpensive products from other countries. When selecting products, try to get ones that are
amusing and have obviously been poorly marketed in terms of packaging, brand name, or general lack of appeal to U.S.
consumers. Bring the items to class.
Divide the class into groups of four or five students. Give each group one of the products and explain that they are the
foreign marketers of these products and should put together a strategy for marketing the products in the United States.
They have the opportunity to keep the product, package, and so forth, the way it is or to change it completely. They
should consider the additional costs associated with changing them. The groups should create strategies in the following
areas:
1. Target market: Who should be the target market in the United States? What variables will be used to select the target
market?
2. Product: Will any adaptation be made to the product features? What about the packaging? The brand name?
3. Price: What is a good retail price for the product?
4. Promotion: How will the product be communicated to the target market? What promotional message will be used?
What media will be used to reach the target market?
5. Distribution: Where will the product be sold?
After each group is finished, have them share their ideas with the class. You’ll be surprised at how creative and
entertaining this exercise is!
REVIEW AND ASSIGNMENTS FOR CHAPTER 5
REVIEW QUESTIONS
1. What is meant by “having a global vision?” Why is it important?
A global vision allows businesspeople to identify global marketing opportunities, understand the nature of global
2. Isolationists have suggested that the United States would be much better off economically and politically if we
just “built a wall” around the country and didn’t deal with outsiders. Do you agree? Why or why not?
Answers will obviously vary, but an interesting answer might include a historical perspective of what happened
3. What are the major barriers to international trade? Explain how government policies may be used to either
restrict or stimulate global marketing.
Many firms do not have the financial resources for direct investment or are not willing to take the risk involved in
4. Why is direct investment considered risky?
5. Explain how exchange rates can affect a firm’s global sales.
The exchange rate is the price of one country’s currency in terms of another country’s currency. If a country’s
APPLICATION QUESTIONS
1. Rubbermaid, the U.S. manufacturer of kitchen products and other household items, is considering moving to
global marketing standardization. What are the pros and cons of this strategy?
Chapter 5 ♦ Developing a Global Vision 8
Although students’ answers will vary, they should address some of the following points. Promoting standardized
2. Do you believe that multinationals are beneficial or harmful to developing nations? Why? What could foreign
governments do to make them more beneficial?
Students’ opinions will vary, though most students in a business class such as marketing tend to support global
trade. Regardless of their opinions, students should list the pros and cons of multinational involvement in foreign
3. Many marketers now believe that teenagers in developed countries are becoming “global consumers.” That
is, they all want and buy the same goods and services. Do you think this is true? If so, what has caused the
phenomenon?
4. Renault and Peugeot dominate the French market but have no presence in the U.S. market. Why do you
think that this is true?
5. Suppose your state senator has asked you to contribute a brief article to her constituents’ newsletter that
answers the question “Will there ever be a ‘United States of Europe?’” Write a draft of your article, and
include reasons why or why not.
Students who make a case for the “United States of Europe” may argue that the Europeans will come to agreement
6. Divide into six teams. Each team will be responsible for one of the following industries: entertainment;
pharmaceuticals; computers and software; financial, legal, or accounting services; agriculture; and textiles
and apparel. Interview one or more executives in each of these industries to determine how the Uruguay
Round and NAFTA have affected and will affect their organizations. If a local firm cannot be contacted in
your industry, use the library and the Internet to prepare your report.
Answers will vary dramatically by group and industry.
Chapter 5 ♦ Developing a Global Vision 9
7. Candartel, an upscale manufacturer of lamps and lampshades in the United States, has decided to go global.
Top management is having trouble deciding how to develop the market. What are some entry options for the
firm?
8. What are some of the advantages and potential disadvantages of entering a joint venture?
Advantages of joint ventures over other forms of expansion are: 1) they can be relatively inexpensive, since you
9. The sale of cigarettes in many developed counties either has peaked out or is declining. However, the
developing markets represent major growth markets. Should U.S. tobacco companies capitalize on this
opportunity?
10. Give several examples of how culture may hinder “going global” via the Internet.
Culture can present lots of challenges on the Internet. First, you may have to translate your Web site into several
APPLICATION EXERCISE
To be effective as a marketer, it is important that you know geography. How will you be able to decide whether to
expand into a new territory (domestic or foreign) if you don’t know where it is and something about its culture, currency,
and economy? If you can’t place the European countries on a blank map, or if you can’t label the lower 48 states without
a list to help you, you’re not alone. In one study, students incorrectly located over 50 percent of European countries and
over 25 percent of the states in the Unites States. To help you brush up on your geography, we’ve compiled some tools
that you may find useful.
Activities
1. To review domestic geography, go to http://www.50states.com/tools/usamap.htm and print the blank map of the
United States. Label the map. For a challenge, add the state capitals to the map.
2. Once you have successfully labeled the U.S. map, you may be ready to try labeling a world map. If so, go to
http://www.clickandlearn.com and view the free, printable, blackline maps. Under the category of world maps,
choose the blackline detail map. This shows country outlines, whereas the basic blackline outline map shows
only the continents. You will notice that there are also blackline maps for each continent, so if taking on the
entire world is too daunting, start with more manageable blocks.
3. To be a global marketer, it is not enough to know where countries are located. You will need to know about the
culture, the main exports, the currency, and even the main imports. Select a half-dozen or so countries with
which you are unfamiliar and research basic geographic information about them.
Chapter 5 ♦ Developing a Global Vision 10
Purpose: To be effective marketers, it is important that students know geography. How will students be able to decide
whether to expand into a new territory (domestic or foreign) if they don’t know where it is and something about its
culture, currency, and economy? This exercise is designed to reveal any weakness students might have in geography and
inspire them to fill their gaps of knowledge.
Setting It Up: Follow the links at www.clickandlearn.com to find blackline maps. Blackline maps are geographical
outlines with space for labeling. Click and Learn offers blackline maps in great variety. You can begin the exercise by
requiring students to locate countries (or even states) on the maps. One possibility is to move into a longer assignment, as
featured below.
Chapter 5 ♦ Developing a Global Vision 11
This application exercise was inspired by the following Great Ideas in Teaching Marketing:
Gregory J. Baleja
Alma College
INTERNATIONAL MARKETING: A MAP QUIZ
When discussing international marketing, it is always interesting to investigate the amount of knowledge that American
college students have about any country outside of the United States.
In most cases, I find that my students have very little knowledge of foreign countries or cultures. To reinforce this
assumption, I give my students a map quiz. The map quiz is usually based on the countries of Europe (both Eastern and
Western Europe). Europe is usually selected because it is the region of the world that until recently has undergone the
least amount of name and/or boundary changes.
To make the students’ task easier, I provide them with a list of all the European countries involved (aided recall). To
make sure they legitimately try to fill in all of the correct countries, I state that the quiz will be graded. Later, I inform the
students that the quiz was, in fact, graded, but that the scores were not recorded.
Over the last few years, the average number of countries missed has totaled approximately 14.38 out of 27 possible
European countries listed (an error rate of 53.25%). The number of countries missed has ranged from 0 to 26 (to date no
student has missed all 27 countries).
A number of students comment when seeing their actual scores that they would have performed much better if they were
quizzed on something more familiar, like the United States. Thus, to accommodate their request, during the next class
period I distribute a quiz on the lower 48 states. For this map quiz the students are not provide with a list of states
(unaided recall). The average number of states wrong has averaged 13.76 out of 48 (an error rate of 28.6%) during the
last few years. Familiarity seems to help improve the scores, but not totally.
Some unique answers to both quizzes are listed below. Students have told me, for example:
• West Germany was located east of East Germany;
• New states such as East and West Delaware, Syracuse, and St. Louis exist;
• Ireland is located where Bulgaria is;
• Norway is located where Romania is;
• Great Britain is located where Spain is;
• North and South Carolina are located where North and South Dakota are;
• Arkansas is located where Utah is; and
• Alabama is located where Oklahoma is.
The purpose of these quizzes is to reinforce exactly how little American students know about the world in general. I ask
the students how they can make a conscious business decision about locational alternatives when they don’t even know
where Czechoslovakia is, or for that matter, the state of Kansas. In my most recent Basic Marketing class of 46 students,
43% of them were unable to place Kansas in its correct geographical position. In addition, 35% missed placing Colorado
correctly and 46% missed Arizona.
The students are not only unable to show where a particular country or state is located, but they are also unable to
identify the countries or states that surround it. How, then, can these students intelligently discuss the implications of
entering the Czechoslovakian market (caused by recent developments in Eastern Europe) with the thought of possible
expansion into the rest of Eastern Europe when they don’t even have the most basic knowledge of where it is located? By
the way, the same argument holds for locating a distribution center in Kansas or Colorado or Arizona.
Our students need to have a better understanding of geography if they are going to compete successfully in a global
marketplace.
Chapter 5 ♦ Developing a Global Vision 12
William C. Moncrief
Texas Christian University
USING GEOGRAPHY IN THE INTERNATIONAL MARKETING CLASS
My strong belief is that students should have some sense of geography when studying international marketing. The first
day of class I put a world map on the overhead and ask them to identify 25 countries. The results, as might be expected,
are abysmal. Most students indicate that they have never studied geography or that they did so when they were too young
to be interested.
My goal is to give them some geographical knowledge and to make it fun. Several years ago, I was given a board game
called Where in the World. The game has a card for every country in the world and gives information such as capital,
chief export, chief import, religion, language, and currency. I have put all of this information on a handout along with
maps of Europe, Asia, Africa, and North and South America. Groups of five are formed for a geography competition. On
an announced day we have the geography bowl with six to eight groups competing. Typically, the students have divided
up the world so that two students within the group are “experts” on a particular continent. I shuffle the approximately
200 cards and I randomly pick a card for a Group 1. Each group has a map in front of them with each country numbered
but not named. I ask, “Group 1, where is Argentina?” If they are correct they receive a point, and then I ask, “What is the
capital of Argentina?” If they are correct again they have a chance at a third question. I have created a spinner with
export, import, currency, and language divided equally on the spinner. I spin the spinner and it might indicate “export.”
If the group can name the chief export, they receive a third point. If the group misses the country or capital, I roll a die
and the corresponding numbered competitive group has a chance to “steal” the question and receive bonus points for the
correct answers. After the question has been answered by group 1 or stolen by some other group, I then move to Group 2
and draw a country. This process continues until all groups have been asked a country. Round 2 ensues. The game will
continue throughout the class period, usually lasting somewhere from 10 to 20 rounds (depending on the length of the
class).
The game becomes very competitive and the amount of information learned is phenomenal. It is rare that a group
misidentifies a country and usually they can name the capital. In about half the cases, they even can come up with
exports, imports, currency, and language.
At midterm I give an exam with a map in which the students must identify 20 “significant” countries and capitals that are
active in the international markets. The results are impressive. In my last two classes, exactly 50% of the class did not
miss a single country. Of those who misidentified a country and capital, the average score was 3.4 out of 4.0 possible
answers.
The geography game is fun. The students love it and want to play it again. More importantly, they learn some geography
and as we talk about world markets, most of the students now know where the countries are located and something about
them.
ETHICS EXERCISE
Moore Electronics sells automated lighting for airport runways. The government of an eastern European country has
offered Moore a contract to provide equipment for the 15 major airports in the country. The official in charge of
awarding the contract, however, is demanding a 5 percent kickback. He told Moore to build this into the contract price so
that there would be no cost to Moore. Without the kickback, Moore loses the contract. Such kickbacks are considered a
normal way of doing business in this country.
Questions
1. What should Moore do?
Although this is acceptable practice in the country, Moore should not incorporate in his contract bid a 5 percent
Chapter 5 ♦ Developing a Global Vision 13
2. Does the AMA Code of Ethics address this issue? Go to http://www.marketingpower.com and review the
code. Then write a brief paragraph on what the AMA Code of Ethics contains that relates to Moore’s
dilemma.
The AMA Code of Ethics does address this issue when it states that the marketer’s responsibility is to abstain from
VIDEO ASSIGNMENT: The Nederlander Organization
The Nederlander Organization is a theatre management company that manages a global network of Broadway style
theatres. In this video clip, top management discusses how the Nederlander Organization grew from a small mid-west
theatre management company into a global brand that helps successful producers move from Broadway to a global tour
circuit.
1. When Jimmy Nederlander purchased three theatres in the United Kingdom, what method of entering the Global
Marketplace was he using?
a. Franchising
b. Contract Manufacturing
c. Joint Venture
d. Direct investment
2. What type of product decisions does the Nederlander Organization support for its global theatres?
a. Product Invention
b. Global Marketing Standardization
c. Product Adaptation
d. Product contraction
3. Not all shows that have huge success on Broadway go on to tour successfully overseas. What is the major
contributing factor to the success of a touring play?
a. The Cast. Touring actors are not as strong as the original cast members.
b. The Music. Touring musicals rely on local musicians, which is risky.
c. Boycotts. Touring musicals are just as likely to raise protests as more overtly political events.
d. The culture. Some plays that are successful in the United States don’t strike the same chord in different
countries.
4. Discussing the expansion of the global network of theatres that can house Broadway type shows and its benefit to
touring plays falls under which category of the global marketing mix?
a. Product
b. Promotion
c. Place
d. Price
5. The Nederlander Organization has used the Internet
Chapter 5 ♦ Developing a Global Vision 14
a. to change ticket prices for certain markets, particularly Evita.
b. to expand the brand and sell tickets online for shows anywhere there is a Nederlander theatre.
c. to decide what shows are hits in New York and therefore get to tour.
d. to post clips from shows that are in its theatres so people will be more willing to buy tickets.
CASE AS S IG NMENT: Nis sa n
Prolonged success for auto manufacturers is likely to come from their ability to sell cars in rapidly developing countries
like Russia, Brazil, India, and Indonesia. However, selling cars in these emerging markets can be complicated, especially
for foreign companies. Nissan is one company that has struggled to expand into emerging markets: its overall share of
auto sales is 6 percent, but its share in Brazil is just 1.2 percent. With the goal of increasing its global reach, Nissan
announced that it would revive the Datsun brand name and develop six new vehicles specifically designed for emerging
markets’ growing middle classes. The company aimed to produce modern, stylish cars that appealed to consumers
visually, and more importantly, fit into their budgets.
In bringing back the Datsun brand, Nissan in effect created a distinctive identity for the unique set of cars that
comprised its new global venture. The emerging middle class wants cars, but it can’t afford to spend $15,000 to $20,000
on a family sedan. Thus, automobile companies like Nissan need to create small, extremely affordable cars; to do so,
they must often take a bare bones approach. That means no air conditioning, no passenger air bags, and no power
windows. While Datsun will provide entry into the market, the Nissan brand will continue to be sold as upscale, feature-
rich cars. According to Ammar Master, an analyst at LMC Automotive in Bangkok, “Datsun could bring in volumes at
the lower end of the market…While the Nissan brand will continue to move upmarket.”
Caroline Winter, “Behind the Birth, Death, and Rebirth of Datsun,” Bloomberg Businessweek, March 21, 2012,
www.businessweek.com/articles/2012-03-21/behind-the-birth-death-and-re-birth-of-datsun (Accessed March 25, 2013);
Chester Dawson, “For Datsun Revival, Nissan Gambles on $3000 Model,” Wall Street Journal. October 1, 2012,
http://online.wsj.com/article/SB10000872396390443890304578009284279919750.html (Accessed March 25, 2013);
Siddharth Philip, Anna Mukai, and Yuki Hagiwara, “Nissan Revives Datsun After Three Decades to Boost Sales,”
Bloomberg, March 21, 2012, www.bloomberg.com/news/2012-03-20/nissan-to-revive-datsun-brand-after-three-decades-
to-boost-sales.html (Accessed March 25, 2013).
TRUE/FALSE
Chapter 5 ♦ Developing a Global Vision 15
1. Nissan’s decision to reintroduce the Datsun brand to fit the needs of emerging markets reflects the company’s global
vision.
2. Because it can move resources, products, employees, and skills across national boundaries without regard to its Japanese
headquarters, Nissan is a multinational corporation.
3. Brazil’s gross national income is an important cultural factor that Nissan must consider when analyzing the external
environment.
4. China and India have rapidly growing middle classes, making them prime markets for Nissan’s Datsun brand.
5. Because social networking sites like Facebook and Twitter are not as popular in emerging markets, Nissan should avoid
using social media marketing to advertise its new Datsun offerings.
MULTIPLE CHOICE
1. Nissan uses its Datsun brand to take part in this, or to target markets throughout the world:
a.
Global marketing.
b.
Global advertisement.
c.
Global promotion.
d.
Global selling.
e.
Global campaigning.
2. Which of the following external environment factors must Nissan consider as it enters into rapidly developing countries
like Russia, Brazil, India, and Indonesia?
a.
Nissan’s market share is lower in emerging markets than it is elsewhere.
b.
Customers want modern, stylish cars.
c.
The emerging middle class can’t afford to spend $15,000 to $20,000 on a family sedan.
d.
The Datsun brand creates a distinctive identity that is already recognized by many throughout the
world.
e.
All of these.
3. Assuming that Nissan manufactures all of its car models in Japan and ships them overseas to be sold, which strategy
does it use to penetrate global markets?
a.
Exporting.
b.
Licensing.
c.
Contract Manufacturing.
d.
Joint venture.
e.
Direct investment.
4. Which product decision did Nissan utilize when it developed six new Datsun models for emerging markets’ growing
middle classes?
a.
One product, one message.
b.
Product invention.
c.
Gross domestic product.
d.
Product adaptation.
e.
None of these.
5. Suppose that, instead of developing its Datsun line for emerging markets, Nissan simply sold its existing models in those
markets for half their original price. His would be an example of:
a.
Licensing.
b.
Countertrade.
c.
Job outsourcing.
d.
Dumping.
e.
Global marketing.
