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220 Part 2 Understanding Buyers and Markets
Note: Would a
multidomestic
strategy work well
with large
companies with
many product lines?
Why or why not?
viii. Its major benefit is its low implementation costs
c. A multidomestic marketing strategy assumes that
differences between market characteristics and
competitive situations in certain nations require firms to
customize their marketing decisions to effectively reach
individual marketplaces
i. Many marketing experts believe that most products
Assessment check questions
5.1. What is the difference between a global marketing strategy and a
multidomestic marketing strategy? A global marketing strategy defines a
Chapter Objective 6: Describe the five alternative marketing mix strategies used in global
marketing.
Key Terms: countertrade
PowerPoint Basic: 12-15
PowerPoint Expanded: 43-46
Figure 8.4—
Alternative
International Product
and Promotional
Strategies—Think of
other well-known
1. International product and promotional strategies
a. Global marketers can choose from among five strategies
for selecting the most appropriate product and promotion
strategy for a specific foreign market:
i. Straight extension
ii. Promotion adaptation
iii. Product adaptation
iv. Dual adaptation
v. Product invention
b. A firm may follow a one-product, one-message straight
extension strategy; this permits economies of scale in
2. International distribution strategy
a. Distribution is a vital aspect of overseas marketing
b. Marketers must set up proper channels and anticipate
3. Pricing strategy
a. Pricing can critically affect the success of an overall
marketing strategy for foreign markets
b. Considerable competitive, economic, political, and legal
constraints often limit pricing decisions
4. Countertrade
a. In a growing number of nations, the only way a marketer
can gain access to foreign markets is through
countertrade—a form of exporting in which a firm barters
products rather than selling them for cash
b. Less-developed nations sometimes impose countertrade
requirements when they lack sufficient foreign currency to
Assessment check questions
6.1. What are the five strategies for selecting the most appropriate
product and promotion strategy for a specific foreign market? The five
6.2. What is countertrade? Countertrade is a form of exporting in which a
firm barters products rather than selling them for cash.
Chapter Objective 7: Explain the attractiveness of the United States as a target market for
222 Part 2 Understanding Buyers and Markets
foreign marketers.
Key Terms: None
PowerPoint Basic: 16-17
PowerPoint Expanded: 47-48
foreign firms in your
area. Did the entry
of foreign firms
affect the local
strategies?
1. The United States as a target for international marketers
a. Foreign marketers regard America as an inviting target
b. It offers a large population of more than 316 million people
i. In addition, U.S. consumers have a high level of
c. Among the best-known industries in which foreign
manufacturers have established U.S. production facilities
is automobiles
i. Most of the world’s leading auto companies have
2. Strategic Implications of Marketing in the 21st Century
a. Marketers need to reevaluate the strengths and
weaknesses of their current marketing practices and
realign their plans to meet the new demands of this era
b. Actions of international marketers will influence every
Assessment check questions
7.1. What characteristics of the United States make it an inviting target
for foreign marketers? The characteristics making the United States an
7.2. Why would U.S. automobile manufacturing be a target for foreign
companies? Because the United States has a large population and high
Chapter 8 Global Marketing 223
ANSWERS AND TEACHING NOTES TO CHAPTER EXERCISES
Chapter 8 Assurance of Learning Review
1. What are the benefits to firms that decide to engage in global marketing?
Answer: Besides generating additional revenue, firms expand operations outside their home country to
gain other benefits, including new insights into consumer behavior, alternative distribution strategies, and
2. Why is a nation’s infrastructure an important factor for global marketers to consider?
Answer: Infrastructure—the underlying foundation for modern life and efficient marketing that includes
transportation, communications, banking, utilities, and public services—is an important economic factor
3. What are the two different classifications of tariffs? What is each designed to do?
Answer: Tariffs refer to taxes levied on imported products. Some tariffs impose set taxes per pound,
gallon, or unit; others are calculated according to the value of the imported item. Tariffs can be classified
4. How does an import quota restrict trade?
Answer: Import quotas limit the number of units of products in certain categories that can cross a
country’s border for resale. The quota is supposed to protect domestic industry and employment and
5. What are two major victories achieved by the Uruguay Round of GATT conferences?
Answer: In 1994, the Uruguay Round culminated in one of the biggest victories for free trade in decades.
The Uruguay Round reduced average tariffs by one-third, or more than $700 billion. Among its major
victories it:
• reduced farm subsidies, which opened vast new markets for U.S. exports.
• increased protection for patents, copyrights, and trademarks.
6. Why has the progress of the WTO been slow?
Answer: To date, the WTO has made slow progress toward its major policy initiatives: liberalizing world
financial services, telecommunications, and maritime markets. Trade officials have not agreed on the
direction for the WTO. Big differences between developed and developing nations create a major
7. What are the three alternatives for first-time exporters to reach foreign customers?
Chapter 8 Global Marketing 225
Answer: First-time exporters can reach foreign customers through one or more of three alternatives:
export-trading companies (ETC), export-management companies (EMC), or offset agreements.
An ETC buys products from domestic producers and resells them abroad. While manufacturers lose
8. Define and describe the different types of contractual agreements that provide flexible alternatives to
exporting.
Answer: As a firm gains sophistication in global marketing, it may enter contractual agreements that
provide several flexible alternatives to exporting. Both large and small firms can benefit from these
methods. Franchising and foreign licensing, for example, are good ways to take services abroad.
9. In what conditions is a global marketing strategy generally most successful?
10. What type of nation benefits most from countertrade? Why?
Answer: Countertrade is a form of exporting in which a firm barters products rather than selling them for
cash. Less-developed nations benefit most from countertrade. Such nations impose countertrade
Projects and Teamwork Exercises
1. Answer: Ask the students to name the company they decided on (Trader Joe’s, Ace Hardware, or
Menard’s) and the markets into which that company could expand (Mexico, India, or China). Have them
share what they discovered about the chosen nation’s infrastructure, technology, social-cultural
2. Answer: Talk to the class about the countries they explored, beyond the 20 plus countries in which
Chapter 8 Global Marketing 227
Weight Watchers’ already has a presence. Ask students which country they chose. Why that country?
How would they plan on entering this foreign market? Can they use methods that have been effective for
Weight Watchers’ in other nations? What would those methods be? Have them share their print ads
3. Answer: Which companies did students choose that might benefit from promoting goods or services at
the 2016 Summer Olympics that will be held in Rio de Janeiro, Brazil? Were they U.S. firms or foreign
firms? What strategy was used (straight extension, product or promotion adaptation, dual adaptation, or
product invention)? Why was that particular strategy chosen? Did it depend on the product or service?
The company?
4. Answer: Have pairs of students talk about the firm they imagined that is marketing its brand of
headphones in China. Which strategies did they feel would be most effective for the firm? Why?
5. Answer: Ask for information found during research on the Chinese auto manufacturer Geely. Are there
any kinds of plans to launch its cars in the U.S.? What might this entail? What elements might be
important to American consumers, in order to be convinced to at least consider buying a car
manufactured in China? Have students share their ads and discuss the way they target U.S. consumers.
How is this Chinese auto manufacturer different from those American firms that they’re familiar with, such
as General Motors or Ford? How is it different from foreign auto manufacturers such as Toyota or
Volkswagen?
Point Value: 1
Critical-Thinking Exercises
1. Few elements in the global marketing environment are more difficult to overcome than the unexpected,
such as natural disasters or outbreaks of disease such as the avian flu. Travel may be curtailed or halted
by law, by a breakdown in infrastructure, or simply by fear on the part of consumers. Suppose you work
for a firm that has resorts on several continents. As a marketer, what kinds of contingency plans might
you recommend for your firm in the event of an unexpected disaster?
Answer: Have students review how Toronto, China, and Hong Kong dealt with the SARS virus—both the
good and the bad—or how other locations handled similar contingencies. You may need to review the
2. Zippo lighters have been around for more than 80 years. But as the number of smokers in the United
States continues to decline, Zippo has spent the last half century scouting the world for new markets.
Today, Zippo is a status symbol among Chinese consumers, who prefer U.S. products. Recently, Zippo
also broadened its product line to include watches, writing instruments, and items for outdoor
enthusiasts. Can you think of other product lines that would be logical extensions for Zippo? And if Zippo
decided to introduce additional product lines, which would work better: a global marketing strategy or a
multidomestic strategy? Explain the reasons for your choice.
Answer: Student responses will vary. Those that select the global marketing strategy should emphasize
3. Do you agree with the goals and ideas of the proposed FTAA? Why or why not?
Answer: Student responses will vary. You may want to provide students with a specific point of view to
4. Do you agree with countertrade as a legitimate form of conducting business? Why or why not?
Describe a countertrade agreement that Microsoft might make in another country.
Answer: It would be hard for a student to argue that this is not a legitimate form of conducting business.
Microsoft would have many countertrade options. It could even follow the example of PepsiCo and trade
5. Foreign investment continues to grow in the United States. Do you think this is a positive trend for U.S.
businesses and consumers? Why or why not?
Answer: Student responses will vary. Some may suggest that this leads to the creation of U.S. jobs and
that the added competition leads to better prices for consumers. Others will argue that the profits are
Ethics Exercises
Cheap—and illegal—copies of pirated popular movies, video games, and music often are available for
sale in Asia within days of their worldwide release. The entertainment industry has so far had little
success in stopping the flow of these copies into consumers’ hands. Do you think multinational economic
communities should be more effective at combating piracy? Why or why not? What actions could they
take?
Internet Exercises
1. Chinese currency policy. Critics contend that the Chinese government pursues policies that keep the
value of the Chinese currency artificially low relative to other currencies such as the U.S. dollar and euro.
Using Google News and other online news sources, research the current state of Chinese currency
policy. Why would the Chinese government engage in such efforts? What impact do these efforts have
on global trade? Assume you work for a U.S. based firm that engages in extensive trading operations
with China. What impact would a major revaluation of the Chinese currency have on your firm?
http://news.google.com
Answer: Student responses will vary. They should make a note of the various reasons why countries
inflate or deflate the value of their currencies. They must be aware of the values of Chinese currency as
2. Global marketing strategies. Samsung—the electronics company based in South Korea—has been
quite successful over the past ten years at marketing its products worldwide. Visit the Samsung website
and note two or three elements of the firm’s global marketing strategy. Next visit the websites of two
other global electronics company such as Sony or Philips. Compare and contrast the marketing
strategies used by all three companies.
http://www.samsung.com
http://www.philips.com
http://www.sony.com
Answer: Student answers may vary. There are many ways to compare and contrast marketing strategies.
After all the students gather and present their data, a short discussion on the possible effects of
3. World statistics. The CIA World Factbook contains a wide range of information and statistics on
individual countries. Go to www.cia.gov, select “World Factbook,” and then “Guide to Country
Comparisons.” Then click on the relevant section to obtain the top five countries in each of the following:
a. Per-capita GDP
b. Real growth rate in GDP
c. Inflation rate
d. Exports
e. Population growth rate
Answer: The students are expected to visit the website and note down the relevant information.
Case 8.1 The NFL Takes Its Brand to London—Questions for Critical Thinking
1. What accounts for the popularity of the NFL games in London? Do the British really like American-style
football, or is it just a novelty? How might the NFL answer this critical question if it plans a British league?
Answer: Student answers may vary. They should discuss whether the NFL should go for straight
extensions, promotion adaptations, product adaptation, dual adaptation, or product invention. They
2. Do you think a sports franchise as American as NFL football could become truly global? Why or why
not? What obstacles do you think the NFL would have to overcome?
Answer: Student answers may vary. They may say that the NFL will need to adapt its business and
customer strategies in a way that clearly proves it is a different game than soccer, the most popular sport
Video Case 8.2 Nederlander Productions Hoof It Around the World —Questions for Critical
Thinking
1. How might Nederlander benefit from expanding its business throughout the European Union (outside
the United Kingdom)? What might be the drawbacks?
Answer: Benefits to expanding farther into the European Union include the huge common market of
more than 500 million people, the removal of trade barriers among these countries, and the
2. Nederlander has already engaged in some product and promotional adaptations to bring shows from
London to New York and vice versa. What additional adaptations might the firm have to make for the
Turkish and Chinese markets?
Answer: Adaptations may include the choice of performance itself (for example, a theater hit in New York
or London might not be acceptable to audiences in Turkey or China); infrastructure factors such as
Part 2 Video Case: Everyone Eats—Questions for Critical Thinking
1. Scripps identifies its core audience as upscale women who are decision makers. Give at least one
example each of cultural, social, and family influences that might sway their viewing and purchasing
choices as related to Food Network.
Answer: Possible cultural influences: any food customs or preferences stemming from an ethnic
background (or geographic area); convenience; family dining; local agriculture; vegetarianism or
2. What marketing efforts might Scripps and Food Network make to change the attitude of men who are
not viewers, so that they become viewers of Food Network?
Answer: Through social media, Food Network marketers can learn more about what shows and products
male consumers would like to see—and then adjust their offerings. For example, a show might be linked
3. How would you segment Food Network’s business partners? Give an example of each segment you
cite.
4. In addition to the free-pasta sweepstakes, describe how Buitoni might leverage its relationship with
Food Network via social media.
Chapter 8 Global Marketing 233
COLLABORATIVE LEARNING EXERCISES
Going Global
Purpose:
To help students understand the implications of globalization
Background:
Besides generating additional revenue, firms expand operations outside their home country to
gain other benefits, including new insights into consumer behavior, alternative distribution
strategies, and advance notice of new products. By setting up foreign offices and production
facilities, marketers may encounter new products, new approaches to distribution, or clever new
promotions that they may apply successfully in their domestic market or in other international
markets.
Relationship to Text:
The Importance of Global Marketing
Estimated Class Time:
About 15 minutes
Preparation/Materials:
None needed
Questions for Reflection:
• What characteristics should a global company possess?
Global Marketing Strategy
Purpose:
To help students apply marketing strategy concepts to “real-world” situations
Background:
Relationship to Text:
Going Global
Estimated Class Time:
About 20 to 25 minutes
Preparation/Materials:
Each group will need unlined paper and a pencil or pen.
234 Part 2 Understanding Buyers and Markets
Exercise*:
Divide your students into small groups, then direct each team to select a company—familiar to
everyone in the group—that could benefit from promoting its products to the Brazilian market in
conjunction with the 2016 Rio Summer Olympics. Which strategy would make the most sense:
Questions for Reflection:
• What product categories are most likely to succeed in the Brazilian market? Why?
• What are other issues to consider with regard to the Brazilian market? (Possibilities span the
spectrum of the global marketing environment, with particular emphasis on social/cultural,
economic, and political/legal.)
*This exercise was adapted from the text.
Globalization and Cultural Exchanges
Purpose:
To highlight the cultural shifts that have resulted from economic globalization
Background:
During the past 25 years, the United States has been accused with increasing frequency of
cultural imperialism, visible in the ubiquitous presence of fast food, hip-hop music, and Hollywood
blockbusters. But the cultures of other countries have profoundly influenced the United States as
well. This discussion-based exercise is designed to explore the cultural exchanges that inevitably
result from economic globalization.
Relationship to Text:
The U.S. as a Target for International Marketers
Estimated Class Time:
About 10 minutes
Preparation/Materials:
None needed
Exercise:
Discussion Questions:
• Ask your class for examples of how American culture has spread to other countries
around the world. American students who have traveled are a great source of information,
along with international students, if you have any.
• Ask them how U.S. products have been modified, if at all, to suit other cultures. One
interesting example is the film Pearl Harbor, marketed in the U.S. as a war movie and in
Japan (where it was also a hit) as a love story. If you have computer projection, you may
