978-1337407588 Chapter 5 Solution Manual Part 1

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Chapter 5: Developing a Global Vision

Review and Assignments for Chapter 5

Review Quesons

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 networks, and meet foreign competition head-on in domestic markets.

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?

Students’ answers will vary, but an interesting answer might include a historical perspective of

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 not

In some developing countries, the infrastructure to support a traditional channel of distribution

does not exist. For example, a company like Procter & Gamble might have to act as its own

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

If, say, the U.S. dollar depreciates relative to the Japanese yen, U.S. residents would have to

pay more dollars to buy Japanese goods. As the dollar depreciates, the prices of Japanese

Applicaon Quesons

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

advantages including economies of scale in manufacturing and promotion. However,

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) the

Chapter 5: Developing a Global Vision

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?

Many of your students may argue this is true, largely because of the prevalence of American

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 will

come to agreement because they see the necessity of a strong, united front to be

Chapter 5: Developing a Global Vision

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.

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?

One way would be to establish relationships with international lighting wholesalers. Another

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 share costs with your partner; (2) you can gain expertise in the area

9. The sale of cigarettes in many developed counties either has peaked or is declining.

However, the developing markets represent major growth markets. Should U.S.

tobacco companies capitalize on this opportunity?

Students should argue the ethical implications of exporting cigarettes. Some will argue that it

10. Give several examples of how culture may hinder “going global” via the Internet.

Chapter 5: Developing a Global Vision

Culture can present lots of challenges on the Internet. First, you may have to translate your

Web site into several languages, depending on what areas of the world you want to target.

Language translation can be fraught with problems if you don’t get a good translator.

Applicaon 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

Activities

1. To review domestic geography, go to http://www.50states.com/tools/usamap.htm, and print

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

3. To be a global marketer, it is not enough to know where countries are located. You will

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

Chapter 5: Developing a Global Vision

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.

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 make the students’ task easier, I provide them with a list of all the European countries

Over the last few years, the average number of countries missed has totaled approximately 14.38

A number of students comment when seeing their actual scores that they would have performed

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.

Chapter 5: Developing a Global Vision

The purpose of these quizzes is to reinforce exactly how little American students know about the

The students are not only unable to show where a particular country or state is located, but they

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

My goal is to give them some geographical knowledge and to make it fun. Several years ago, I

Chapter 5: Developing a Global Vision

The game becomes very competitive, and the amount of information learned is phenomenal. It is

At midterm, I give an exam with a map in which the students must identify 20 “significant”

The geography game is fun. The students love it and want to play it again. More importantly,

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?

Chapter 5: Developing a Global Vision

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.

The AMA Code of Ethics does address this issue when it states that the marketer’s

Video Assignment: The Nederlander Organizaon

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

Chapter 5: Developing a Global Vision

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 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.

Chapter 5: Developing a Global Vision