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Chapter 5: Developing a Global Vision
21
© 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.
every purchase of eyewear. TOMS Roasting Co. supplies clean water with each purchase of
coffee.
PTS: 1 OBJ: LO: 5-3 TOP: AACSB: Reflective Thinking
KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge
5. TOMS is a multinational corporation.
1. Which of the following is NOT part of the external environment faced by global marketers?
a. the global economy
b. political structure
c. culture
d. competition
2. __________ is the riskiest way to enter into the global marketplace.
a. Direct investment
b. Exporting
c. Licensing
d. Joint venture
3. If TOMS decided to enter the tea business and they purchased part of a foreign tea company to
join with them to found TOMS Teas, this would be an example of __________.
a. direct foreign investment
b. contract manufacturing
c. a joint venture
d. licensing
© 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.
4. If TOMS advertised their shoes differently in European markets than it did in American, this
would be an example of __________ adaptation.
a. product
b. promotion
c. distribution
d. price
5. As TOMS utilizes social media in global marketing, they must always be aware of the
__________ in countries in which they operate.
a. climate
b. countertrade
c. culture
d. currency
Great Ideas for Teaching Chapter 5
James S. Cleveland, Sage College of Albany
Discussion Board Topics to Encourage Participation
Discussion board questions, which are provided to students to encourage them to engage in
thinking and writing about the content of the Principles of Marketing course, usually take the
form of a provocative statement to which students are asked to respond. An example of this
would be “All PR is good PR.”
Discussion topics such as this one are abstract and often require that the instructor provide an
initial reply to show students what is expected of them in their own replies. For students with
limited work experience, this approach may be quite appropriate. For adult students with
extensive experience as employees and consumers, however, the abstract nature of such topics
can be frustrating.
I have developed, therefore, a series of discussion board questions to use with experienced adult
students. These questions are designed to encourage them to use their experiences as employees
Chapter 5: Developing a Global Vision
23
and consumers as doorways to better understand the course material. The questions are also
designed to make these students’ responses more interesting to themselves and to the other
students in the class who will read and comment on them.
Each question has three parts.
1. First, there is a sentence or two from the students’ textbooks introducing the topic. By
using the text author’s own words, students are enabled to locate relevant material in the
text more easily, the text content is reinforced, and confusion resulting from use of variant
terms or expressions is minimized.
2. Second, there is a reference to text pages the student should review before proceeding.
Since the goal of the exercise is for students to apply the course content to their own
experiences, reviewing the content first is important.
3. Third, there is a request for the student to think about or remember some specific situation
in their experience to which they can apply the text material, and a question or questions
for them to address in their reply.
Here are additional discussion board questions that are similar and have been developed for
Chapter 5 of MKTG11. Each is written to fit the same text cited above but could easily be
rewritten and revised to fit another text.
Series A
1. No longer just an option, global marketing—marketing that targets markets throughout the
world—has become an imperative for business.
2. Review the information on the rewards of global marketing in section 5-1 of your text.
3. Then describe how your employer (current or past) participates in the global marketplace
by buying foreign-made goods and services or selling its goods and services abroad.
Series B
1. A company that is heavily engaged in international trade, beyond exporting and importing,
is called a multinational corporation.
2. Review the information about multinational corporations in section 5-2 of your text.
3. Describe the products you buy that are manufactured by multinational corporations. How
many of them are not made in this country? (Check labels or packaging to see where they
were made.) Do you think this is a good situation? Why, or why not?
John L. Beisel, Pittsburg State University
Forcing International Communication
Students from other countries who are studying in the United States bring with them a rich
Chapter 5: Developing a Global Vision
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cultural heritage and perspective that most American students seldom bother to learn about. In
fact, many American students rarely even take the opportunity to talk to an international student
during their college years, even though they have sat in class with them time after time. I have
had international students tell me upon graduation that they regret the fact that they never
became friends with an American student.
I decided to force communication between the two groups at every opportunity in my classes. In
my International Marketing course, the students are divided up into teams consisting of four
students, and each team is assigned a country. Their task is to develop a plan for marketing a
specific consumer product to their assigned country, in 25 pages or less.
In a recent class, I appointed 11 teams of 4 students each. Each team was assigned a different
country. Those 11 countries that were most represented by students in our university were the 11
countries assigned. They were India, Indonesia, Japan, Malaysia, Nigeria, Pakistan, Paraguay,
Singapore, South Korea, Taiwan, and Thailand. The teams were expected to personally interview
a minimum of four students from the country that they were assigned. The interviews consisted
of learning about the customs, product preferences, buying habits, prices, competitors, types of
retail outlet shops, and so forth, in the home country of the students interviewed, especially
relating to the product assigned.
The final report for each team included, among other things, a country analysis with a brief
description of the market (demographics, primary marketing areas, etc.), an economic profile of
the country, business customs, consumer behavior, general U.S. relationships with the country,
export prospects to the country, and the country’s restrictions on imports.
Also, customs regulations had to be cited regarding documentation, packing, labeling, marking,
import quotas and restrictions, tariffs, trademark protection, taxes, import licensing, shipping
documents, health and sanitary requirements, and so forth. Much of this information could be
found in Overseas Business Reports.
Each team also created a brand name and a package design. A pricing policy was decided on, as
well as a promotional strategy. Common distribution channel alternatives were named, and entry
alternatives (i.e., licensing, trading companies, franchising, agents, joint venture, wholesalers,
etc.) were chosen.
The students were quite positive about the project as a learning experience, especially regarding
the face-to-face contact with international students. During the interviews, the students found
new friends, and in some instances, they were even invited to the interviewees’ living quarters
for a meal with an international flavor.
Chapter 5: Developing a Global Vision
25
David J. Brennan, Webster University – St. Louis, Missouri
It’s Not Funny Money!
In teaching International Marketing, it is important for American students to develop a
knowledge of foreign currencies. For marketing students, this need not be a detailed financial
knowledge but simply an awareness of a few key international currencies and their names,
symbols, and relative values.
Given a list of several relatively familiar countries, students are asked to name the currency of
that country and to indicate the symbol used to designate that currency. Some typical countries,
currencies, and symbols (with the United States as an example) could include (answers in
brackets):
Country
Currency
Symbol
Example:
USA
Dollar/cent
$ US
Australia
[Dollar/Cent]
[$AUS]
Belgium
(or other
EU
member)
[Euro]
[€]
Canada
[Dollar/Cent]
[$CD]
Russia
[Ruble]
[RUB]
Great
Britain
[Pound/Pence]
[£]
Hong Kong
[Dollar]
[$HK]
Ireland
[Punt]
[Pt]
Japan
[Yen/Sen]
[¥]
Poland
[Zloty]
[Z]
Switzerland
[Franc]
[Sf]
Mexico
[Peso]
[$MXN]
Argentina
[Peso]
[$ARS]
China
[Yuan]
[元]
These, as well as other countries and their respective currencies, can be found in the foreign
exchange listings in the Financial Section of the Wall Street Journal. This listing provides the
country, its major currency and foreign exchange values for the previous two business days in
terms of foreign currency value in $US, and $US in terms of value in the foreign currency. If
possible, it is also useful to go to a local bank and get/buy a few foreign currency bills (£, DM,
Chapter 5: Developing a Global Vision
26
© 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.
Ff, $CD) for class.
Several aspects of foreign currencies, as they may apply to marketing students, can be raised
during class discussion. These could include the features given below.
• Some currencies have similar names (e.g., the dollar in the United States, Canada, and
Hong Kong and the peso in Mexico, Argentina, Chile, Colombia, and Uruguay), but all
have very different values.
• It is important for marketing students to be aware of the relative values of the currencies of
key major trading partners (Canada, Germany, Great Britain, China, and Japan). It
illustrates how one can use those foreign currencies with values less than, approximately
equal to, and greater than the U.S. dollar. For example, in fall 2012:
✓ The Canadian ($CD) dollar is close to the value of the U.S. dollar ($US): 1 $CD =
0.97 $US or 1 $US = 1.03 $CD
✓ The euro (€) is worth more than the U.S. dollar ($US): 1 € = 0.76 $US or 1 $US =
1.31€
✓ The Japanese yen (¥) is worth much less than the U.S. dollar ($US): 1 ¥ = 0.013 $US
(1¢ US) or 1 $US = 79 ¥
✓ The British pound (£) is worth more than the U.S. dollar ($US): 1 £ = 1.62 $US or 1
$US = 0.62 £ (62 pence)
• Changes in foreign currency values in terms of the U.S. dollar can impact international
business. A good example of that is of the Japanese yen (¥). In 1987, 1 $US was worth
(bought) approximately 250 ¥, while in 1992 the U.S. dollar weakened (and the Japanese
yen strengthened), and 1 $US was only worth (bought) approximately 128 ¥. In 1996, it
hovered in the 80–100¥ to the 1 $US range. A useful point of discussion is the change in
foreign or U.S. consumer buying power due to such a change of currency values.
This exercise can educate American marketing students who are typically used to operating only
in the U.S. dollar. Although the U.S. dollar is still a key global currency, other currencies (such
as the euro) are important to understand. It can illustrate to our students that foreign currencies
are not “funny money” and need to be taken seriously in international marketing.
Jacqueline J. Kacen, University of Michigan—Dearborn
Cross-Cultural Marketing: Taking the Brand Local?
What must international and cross-cultural marketers think about when introducing products into
foreign markets? Instead of focusing on familiar U.S. products being introduced into a new
foreign market, this exercise has students introduce a foreign product into the United States. This
exercise works well as an in-class exercise, a group project, or an individual homework
assignment.
Chapter 5: Developing a Global Vision
27
The product I use for this exercise is Vegemite, a Kraft product manufactured and sold in
Australia and New Zealand. However, any foreign product that is not currently marketed in the
United States can be used in class.
As an introduction to the exercise, I provide students with a one-page summary of the product—
its history, ingredients, uses, target market, and position—in its home market. Alternatively,
depending on time and resources, students can be required to research the product on their own.
Information about Vegemite, for example, is available through various Web sites. This exercise
can provide an opportunity for students to access Internet resources.
Globalizing the Thinking of Business Students
During the last decade, we have seen a strong emphasis being placed on providing business
students with a more global orientation. To accommodate this, we need to make the students
realize that being raised in a particular culture results in their “business perceptions,” as
employed in a particular context, being not only a function of the actual attributes, but their
respective cultural background as well. I have devised a simple exercise aimed at forcing
students to think of other cultures not in terms of the potential differences, but rather in terms of
strengths, weaknesses, opportunities, and threats that these diverse environments may provide.
On the first day of class, I ask students to write on an index card their name, major,
classification, and then two groups of countries. The students are instructed to, for Group 1,
create a list of foreign countries, which they perceive as being the most culturally similar to their
Chapter 5: Developing a Global Vision
28
own. Conversely, Group 2 is to be composed of five countries that they perceive as being the
most culturally dissimilar to their own country. Lastly, the students are asked to consider a
generic industrial product (such as a bearing) and use a scale of 1–10 to rate the perceived
quality of that product that is being manufactured in their own country of origin, the country they
PART 1—Integrated Case Assignments
Marketing Miscues
Concerns over Sustainability Result in Social Media Disaster for Nestlé
In March 2010, Greenpeace began coordinating environmental activists in a protest over Nestlé’s
alleged purchase of palm oil from an Indonesian company that Greenpeace International claimed
was destroying the rain forest to build palm plantations. The palm oil was used to make Kit Kat
candy bars. Although Nestlé claimed to have already made the decision to no longer do business
with the supplier, while also asserting that the purchase had comprised only 1.25 percent of the
company’s total palm oil consumption in 2009, the company was a vulnerable target for
Chapter 5: Developing a Global Vision
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environmental activists because of its history of questionable practices with respect to child labor
and infant formula.
The coordinated efforts of the activists were composed of two major components. Greenpeace
staged a protest outside Nestlé’s headquarters in Switzerland and a mock Kit Kat commercial
was posted on YouTube. Protesters at the company headquarters wore cutouts of the candy bar,
but instead of the bar saying “Kit Kat,” it said “Killer.” The Kit Kat commercial parody
portrayed an office worker opening the candy bar and munching on a bloody orangutan finger.
As YouTube videos go, the Nestlé parody was shared widely on social media platforms such as
Facebook and Twitter.
Like many companies, Nestlé has a fan page on Facebook to interact with its consumers. The
Facebook fan page is a location that enables dialogue about the company’s brands. Once the
commercial parody hit the social media airwaves, protesters began posting negative comments
about the company on Nestlé’s Facebook fan page. Nestlé responded with two actions. One, it
asked Google’s YouTube to remove the commercial parody from the site due to copyright
Chapter 5: Developing a Global Vision
30
© 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.
began to drop dramatically.
Nestlé had a social media disaster on its hands. Interestingly, that disaster was due to the way
Nestlé engaged in interactions on Facebook—not because of the fact that it had purchased palm
oil from a non-sustainable company. The negative social media engagement, however, brought
the palm oil issue to the forefront of people’s minds who might not have otherwise even thought
about sustainability concerns related to candy bars. Thus, while the sustainability concern might
have lost its luster in a few days and activists would have moved on to the next cause, the social
media engagement snowballed and affected the company financially.
Sources: Raj Dash, “The Facebook Nestlé Mess: When Social Media Goes Anti-Social,” All
Facebook, March 22, 2010; Rick Broida, “Nestlé’s Facebook Page: How a Company Can Really
Screw up Social Media,” BNET, March 19, 2010, www.bnet.com/blog/businesstips/nestles-
facebook -page-how-a-company-can-really-screw-up-social-media/6786; “Nestlé and Black
Friday,” March 23, 2010, www.rgc-media.com/nestle-and-black-friday; Emily Steel, “Nestlé
Takes a Beating on Social-Media Sites,” The Wall Street Journal, March 29 2010,
http://online.wsj.com/article/SB1000142405270230443440457 5149883850508158.html.
Open-ended questions
1. How could Nestlé have handled the situation differently? Should the company have
simply shut down its Facebook page?
Most students will agree that the employee in charge of Nestlé’s Facebook fan page really
2. Although the Kit Kat candy bar was at the original heart of the issue, what other
products/companies are owned by Nestlé? Could these products be affected by the Kit
Kat social media fiasco?
Chapter 5: Developing a Global Vision
31
Students should be directed to www.nestle.com to identify the product mix at Nestlé—any
of which could have been affected. Product categories and brands are listed below.
• Baby foods (Cerelac, Gerber, NaturNes, Nestum)
Close-ended questions
True/False
1. Until it was accused by Green Peace of deforestation, Nestlé had no prior controversies
surrounding its corporate ethical behavior.
True
False
ANS: F
Nestlé was a vulnerable target for environmental activists because of its history of questionable
practices with respect to child labor and infant formula.
OBJ: LO-3.2
TOP: AACSB Ethics
KEY: CB&E Model International Perspective
MSC: BLOOMS Level I Knowledge
