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
instructors to use to deliver the content.
• Lecture (for large sections) on page 3
• Company Clips (video) on page 5
• Group Work (for smaller sections) on page 8
Review and Assignments begin on page 9
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 23
We’ve also created integrated cases that cover the topics in Chapters 1 through 5.
• Nestle on page 30
• Telekom Austria on page 37
Chapter 5: Developing a Global Vision
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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
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
5-3 Describe the external environment facing global marketers
Global marketers face the same environmental factors as they do domestically: culture, economic
development, the global economy, political structure and actions, demography, and natural
resources. Cultural considerations include societal values, attitudes and beliefs, language, and
5-4 Identify the various ways of entering the global marketplace
Chapter 5: Developing a Global Vision
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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
5-6 Discover how the Internet is affecting global marketing
Simply opening an e-commerce site can open the door for international sales. Global shippers
Key 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
Chapter 5: Developing a Global Vision
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Learning Outcomes and Topics
PowerPoint Slides
LO1 Discuss the importance of global
marketing
5-1 Rewards of Global Marketing and
the Shifting Global Business
Landscape
1. Developing a Global Vision
2. Learning Outcomes
3. Rewards of Global Marketing and the
Shifting Global Business Landscape
4. Global Marketing and Global Vision
5. Gross Domestic Product (GDP)
6. Job Outsourcing and Inshoring
7. Benefits of Globalization
8. Costs 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. Pros and Cons of Multinationals
12. Global Marketing Standardization
LO3 Describe the external environment
facing global marketers
5-3 External Environment Faced by
Global Marketers
13. External Environment Faced by Global
Marketers
14. External Environment Faced by Global
Marketers
15. External Environment Faced by Global
Marketers (continued)
16. Legal Considerations
17. Legal Considerations (continued)
18. Natural Resources
LO4 Identify the various ways of entering
the global marketplace
5-4 Global Marketing by the Individual
Firm
19. Global Marketing by the Individual Firm
20. Methods of Entering the Global Market
21. Methods of Entering the Global Market
(continued 1)
22. Methods of Entering the Global Market
(continued 2)
LO5 List the basic elements involved in
developing a global marketing mix
5-5 The Global Marketing Mix
23. Global Marketing Mix
24. Four Ps of Global Marketing Strategy
25. Product Decisions
26. Placing, or Distribution
27. Pricing
28. Exchange Rates
Chapter 5: Developing a Global Vision
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Learning Outcomes and Topics
PowerPoint Slides
29. Dumping
30. Dumping (continued)
LO6 Discover how the Internet is affecting
global marketing
6.1 The Impact of the Internet
31. Impact of the Internet
32. e-Commerce
33. Key Terms
34. Key Terms
35. Summary
36. Summary
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 Plans for Video
Company Clips
Segment Summary: The Nederlander Organization
The Nederlander Organization is a theater management company that manages a global network
of Broadway style theaters. In this video clip, top management discusses how the Nederlander
Organization grew from a small midwestern theater management company into a global brand
that helps successful producers move from Broadway to a global tour circuit.
These teaching notes combine activities that (a) you can assign students to prepare before class,
(b) you can do in class before watching the video, (c) you can do in class while watching the
video, and (d) 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 it is
appropriate to ask students the questions listed on the grid 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 answers while viewing the segment. That way, students will be engaged in
active viewing rather than passive viewing.
Chapter 5: Developing a Global Vision
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Pre-Class Prep For Your Students
• 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
Teaching Method
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?
• 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 the 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.
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Solutions for Viewing Activities
1. Is the Nederlander Organization a multinational company? Explain.
The Nederlander Organization has direct investment in the United Kingdom, where it owns
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.
By expanding into the United Kingdom, the Nederlander Organization did not face a
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.)
Chapter 5: Developing a Global Vision
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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 areas
listed below.
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,
2. Isolationists have suggested that the United States would be much better off
Chapter 5: Developing a Global Vision
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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?
Students’ answers will vary, but an interesting answer might include a historical
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 committing those financial resources. In some cases, the firm does
4. Why is direct investment considered risky?
Students’ answers should reflect an understanding that the risks of investment are high
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 currency appreciates, less of that country’s currency is needed to
Chapter 5: Developing a Global Vision
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© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
decline. Or seen in another way, sales of Japanese goods in the United States decline. At
the same time the dollar depreciates relative to the yen, the yen appreciates relative to the
dollar. This means prices of U.S. goods fall for the Japanese, so they buy more U.S.
goods—and U.S. exports (i.e., sales in foreign markets) rise.
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?
Although students’ answers will vary, they should address some of the following points.
Promoting standardized products globally is a recent marketing trend that offers significant
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 countries. Some of the benefits include (1)
3. Many marketers now believe that teenagers in developed countries are becoming
Chapter 5: Developing a Global Vision
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“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?
Students’ answers will vary. Some may argue that those car manufacturers have never
5. Suppose your state senator has asked you to contribute a brief article to her
constituents’ newsletter that answers this 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
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
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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, some tools have been compiled 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.
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.
This application exercise was inspired by the following Great Ideas in Teaching Marketing.
Chapter 5: Developing a Global Vision
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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).
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 percent). 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 provided 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 percent) 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, for example, made the
following statements:
• 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.
• 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
Chapter 5: Developing a Global Vision
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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 percent of them
were unable to place Kansas in its correct geographical position. In addition, 35 percent missed
placing Colorado correctly, and 46 percent 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 a market with the thought of possible expansion
of that particular country or state 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.
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
Chapter 5: Developing a Global Vision
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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 percent 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 an acceptable practice in the Eastern European country, Moore should not
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.
Chapter 5: Developing a Global Vision
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The AMA Code of Ethics does address this issue when it states that the marketer’s
Video Assignment: The Nederlander Organization
The Nederlander Organization is a theater management company that manages a global network
of Broadway style theaters. In this video clip, top management discusses how the Nederlander
Organization grew from a small midwestern theater management company into a global brand
that helps successful producers move from Broadway to a global tour circuit.
1. When Jimmy Nederlander purchased three theaters 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
theaters?
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
Chapter 5: Developing a Global Vision
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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 theaters 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:
a. to change ticket prices for certain markets, particularly Evita.
b. to expand the brand and sell tickets online for shows anywhere with a Nederlander
theater.
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 theaters so people will be more willing to buy
tickets.
Case Assignment: TOMS
In 2006 while traveling in Argentina, TOMS founder Blake Mycoskie saw how much harder life
was for children growing up without shoes. Driven by a desire to help, Mycoskie launched
TOMS Shoes, a company that would match one-for-one every pair of shoes purchased with a
Chapter 5: Developing a Global Vision
19
new pair of shoes for a child in need. In the decade since its founding, TOMS Shoes has given
over 60 million pairs of shoes to children in need. But the desire to help didn’t just end with
shoes.
In 2011, TOMS expanded and launched TOMS Eyewear. They have helped restore sight
to over 400,000 people in 13 countries, providing prescription eyeglasses, medical treatment,
and/or sight-saving surgeries funded by every purchase of eyewear.
“We were no longer just a shoe company, serving the mission of providing shoes to
children in need. We became a One for One company, using our business model to change
lives,” said Mycoskie in a blog post. “TOMS Shoes put us on the map, but we are having an
incredible impact through TOMS Eyewear and our mission to help restore sight.”
TOMS Roasting Co. began in 2014. With every purchase of coffee from TOMS Roasting
Co., they work with Giving Partners to provide 140 liters of safe water to a person in need. That
is one week’s supply of water for each coffee purchase. In two years, they have provided over
335,000 weeks of safe water in six countries. By helping create sustainable water systems,
TOMS not only allows people to hydrate, but also improves overall health, increases economic
productivity, increases job creation, and increases access to education.
Chapter 5: Developing a Global Vision
20
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
school,” according to the American Academy of Optometry, 2015. Eyewear is just one part of
TOMS global mission of improving the lives of children.
“One for One.” That’s the TOMS way. “Together we can make a difference.”
Sources: B. Mycoskie, “World Sight Day,” The Huffington Post, October 10, 2013, accessed
October 21, 2016, http://www.huffingtonpost.com/blake-mycoskie/world-sight-day-
2013_b_4073653.html; “TOMS Company Overview,” TOMS, accessed October 21, 2016,
http://www.toms.com/corporate-responsibility; “Unite to Give Sight,” TOMS, accessed October
21, 2016, http://www.toms.com/world-sight-day/.
TRUE/FALSE
1. TOMS was founded with a global vision already in mind.
2. When a customer purchases from TOMS Roasting Co., their purchase finances one person’s
supply of clean drinking water for one week. But ultimately, each purchase will affect the GDP
of the country that receives the water in a small way.
3. The mission of TOMS shoes is to outsource shoes to children in need.
4. TOMS Eyewear is trying to help improve the vast differences in access to safe water (a vital
natural resource) between nations.