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CHAPTER 5
Global Markets
CHAPTER OUTLINE
XXXIII. Understanding Markets and Buyers
XXXIV. The Consumer Market
B. Government Contracts in Developing Countries
C. Bribery and Government Markets
XXXVII. Conclusion
CHAPTER OBJECTIVES
At the end of this chapter, students should be able to do the following:
List the factors that influence consumers abilities to buy and explain how these affect various
national markets.
Describe Maslows hierarchy-of-needs model and apply it to consumers in different cultures.
Give examples of how consumer behavior is similar across cultures and examples of how it
QUESTIONS FOR DISCUSSION
1. What critical factors influence a consumer’s ability to purchase a product such as a
stereo system?
There are several critical factors that might influence a consumers ability to purchase a
product such as a stereo system:
2. How might segmenting by country be useful to global marketers of cosmetics? What
could limit the usefulness of such segmentation?
The nation-state is still sovereign, and governments grant the right to do business in national
3. Will the buying process be more similar from country to country for deodorants or
delivery vans? Why?
One immediate response would be to assume that there are more cultural differences in
purchasing consumer goods than in purchasing industrial goods. But there are arguments for
the buying process of each of these products to vary across countries:
Deodorants:
Do individuals make the choice to buy a certain deodorant more on their own or
4. If you were selling a product such as a nuclear power plant that is purchased mostly by
governments, how would you prepare to sell to Belgium, Egypt, and Mexico? What
means would you use to understand the government buying process in each of these
countries?
This question allows students to blend ideas from both the section on selling to the Belgian
government and the section on selling to developing countriesas well as contemplating the
unique factors that might be involved with nuclear power plants!
Although presented as applying to developing countries, the five screens largely apply to a
5. Why do you think the U.S. Foreign Corrupt practices Act allows expediting payments?
Why are these payments seen as less reprehensible than other forms of bribery?
Several answers are likely to surface:
These payments are small.
CASE 5.1: WHAT TEENS WANT
This case allows students to think more in depth about what constitutes a useful global segment.
It also highlights an ethical issue: When we talk of global segments are we tacitly ignoring most of
the worldthe poor of the developing countries?
DISCUSSION QUESTIONS
1. Would it be useful for global marketers to think of teens as a global segment? Why or
why not?
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The discussion should encompass not only issues of what teens may have in common around
the world, but also whether it makes sense to tailor a marketing mixproduct, promotion,
price, and distributionto them.
Pros:
There seems to be some convergence in teen lifestyles at least between Europe and
the United States: watching television, talking on the phone and listening to music.
Cons:
Estée Lauder could not find a clear teen segment for their productunless you
2. Suggest ways in which teen consumer behavior is likely to differ between developed and
developing countries.
Drawing from the case, this chapter (Chapter 5), and the culture chapter (Chapter 3), the
following points may be made:
Teens in developing countries might be much more dichotomous than in developed
countries. Elite teens will likely be a very distinct segment from the masses of poor
A former teaching assistant of mine from Brazil tells this story: Dana decided to
launch a fragrance in Brazil that was targeted to teens in the United States. They
3. Why do you think street kids in Brazil are attracted to global brand names?
Since few (if any) of us come from this world, our answers must be speculative. But this issue
deserves addressing. From the chapter, students should recall the discussion on Maslows
hierarchy of needs and the statement that some consumers in developing countries deprive
CASE 5.2: DIASPORA MARKETING
Global segments can present distinctive and lucrative opportunities for international marketers.
But it is often challenging to identify homogeneous global segments. This case introduces the
opportunities associated with targeting the diaspora — a country‘s migrants and their descendants
living abroad—as a specific segment. Successful examples of companies who market products and
services to specific diasporas are presented. The discussion questions are designed to expand on
this positive discussion but also can be used to tease out some of the challenges of thinking about
the diaspora segment as a homogeneous group.
DISCUSSION QUESTIONS
1. Might diasporans’ ability to buy differ from individuals of a similar age and
life stage in their country of origin or homeland? In what cases might the
ability to buy differ? Why?
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Some diasporans may have left their country of origin to seek greater education or
employment opportunities abroad than are available at home. These migrants may
2. Using Maslow’s hierarchy of needs, identify and describe the level of needs that
the companies featured in this article (e.g., Tulumba, Jollibees, Thamel.com,
Wizz Air, the African American Travel Agency, and Coptic Orphans) fill for
the diasporans who buy them.
In the case of Thamel.com, diasporans are able to pay bills, purchase health insurance, pay
education expenses, and finance durable goods for family back home. Thus, the service
The consumption of diaspora goods and services can enhance an individual’s self-esteem.
The diasporan may feel good about themselves if they believe that they are contributing to
the economic development of their country of origin through the purchase of goods and
services created by companies back home. In some cases, the purchases of such homeland
goods and services may be deemed by the diaspora community as an honorable or worthy
endeavor. As such, diasporans who purchase these goods and services may gain social
status in their diaspora community if it becomes known that they are buying goods and
services from these companies.
3. Are the companies featured in this article (e.g., Tulumba, Jollibees,
Thamel.com, Wizz Air, the African American Travel Agency, and Coptic
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Orphans) targeting a global segment when they target their diaspora
communities? Why or why not?
There are some challenges to treating diasporas as a global segment. First, migrants leave
their countries of origin for many reasons, and those reasons may generate differences
between individuals in the country of origin and those in the diaspora. Some may have left
UPDATE
Clemens and Pritchet (2008) have developed a technique for estimating the incomes of all
of those born in a country—no matter where they live in the world. This measurement,
called the income per natural (the mean per person income of those born in the country of
origin regardless of current country of residence) can be a useful tool for analyzing
differences in the ability to buy between a migrant population and the population in a
country of origin. Where the income per natural far exceeds the GDP per person in a given
country, one can assume that the differential is due to greater incomes earned by those
living abroad.