Marketing Chapter 9 Although There Are Economic And Competitive Advantages

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Chapter 9: Reaching Global Markets 191

CLASS EXERCISES

Class Exercise 1: Environmental Forces and Marketing Strategy

The objective of this class exercise is to point out how various environmental forces may influence a

company’s marketing strategy. The information contained in the examples came from an actual in–class

discussion among students, many of whom were from European countries. The text offers numerous other

examples that students can use if they have not been to Europe.

Prompt for Students:

There are many differences between European countries and the United States. The following are just

examples:

• CULTURAL: Advertising in many European countries often contains nudity. Some Europeans

are not as concerned with body odor and cleanliness as are people in the United States.

Based on your understanding of differences between European countries and the United States, how

might a U.S. company’s marketing strategy be affected in each of the following situations?

a. The Walt Disney Company opens EuroDisney in Paris, France.

b. McDonald’s opens a fast-food restaurant in Berlin, Germany.

c. The National Football League forms a team in Barcelona, Spain.

d. Federal Express begins overnight package delivery to Hungary.

e. Procter & Gamble begins to sell Safeguard soap in France.

Answers:

a. In the EuroDisney situation, students may point out that Disney’s advertising would definitely be

affected. Not only would the language in an ad have to be changed, but the availability of media

192 Chapter 9: Reaching Global Markets

d. Federal Express would be concerned about the availability of transportation and communication

networks in Hungary. Additional concerns might include changes in weights and measurements,

pricing, and advertising.

Class Exercise 2: International Environmental Forces

The following environmental forces affect international markets: sociocultural, economic, political/legal,

social responsibility/ethics, competitive, and technological. With which force is each of the following

most closely associated?

Characteristic

Environmental Force

Handshaking

Sociocultural

Religion

Sociocultural

Transportation networks

economic, political/legal

Computer literacy

social/technological

Sporting events

Sociocultural

Color preferences

Sociocultural

Standard of living

Economic

Role of children in the family

Sociocultural

Communications equipment

Technological

10.

Touching

Sociocultural

11.

Import restrictions

political/legal

12.

Government stability

political/legal

13.

Climate

Economic

14.

Language

Sociocultural

15.

Payoffs and bribes

sociocultural/legal/ethical

Chapter 9: Reaching Global Markets 193

Class Exercise 3: Global Interests

Ask students to write down their top three choices of countries they would like to visit and why. Once

completed, these results can be compiled and shared with the class as an example of how diverse and

194 Chapter 9: Reaching Global Markets

CHAPTER QUIZ

1. By 2009, NAFTA created a totally free trade area between the United States,

a. Canada, and Mexico.

b. Japan, and China.

c. Brazil, and Mexico.

d. Cuba, and Panama.

e. Panama, and Canada.

2. A duty levied by a nation on goods bought outside its borders and brought inside is called a(n)

a. import duty.

b. embargo.

c. quota.

d. export tariff.

e. import tariff.

3. ______ bring together buyers and sellers from different countries and collect a commission for

arranging sales.

4. Globalization of marketing involves

a. developing a set of marketing strategies for the entire world or major regions of the world.

b. performing marketing activities across national boundaries.

c. exporting goods and services to foreign countries.

d. creating value and exchanging value between countries.

e. locating operations or subsidiaries in many countries.

Chapter 9: Reaching Global Markets 195

ANSWERS TO DISCUSSION AND REVIEW QUESTIONS

1. How does international marketing differ from domestic marketing?

International marketing differs from domestic marketing in that exchanges occur across national

2. What factors must marketers consider as they decide whether to engage in international

marketing?

International marketing involvement relates to the firm’s goals and the perceived opportunity from

3. Why are the largest industrial corporations in the United States so committed to international

marketing?

The largest industrial corporations in the United States are committed to international marketing

4. Why do you think this chapter focuses on an analysis of the international marketing

environment?

The environment is a major consideration in analyzing international marketing. If a marketing

5. If you were asked to provide a small tip (or bribe) to have a document approved in a foreign

nation where this practice is customary, what would you do?

This question relates to the values and ethical standards of the individual involved. There is no right

6. How will NAFTA affect marketing opportunities for U.S. products in North America (the

United States, Mexico, and Canada)?

NAFTA makes it easier for U.S. businesses to invest in Mexico and Canada, provides protection for

7. What should marketers consider as they decide whether to license or enter into a joint venture

in a foreign nation?

A decision to license or to enter into a joint venture in a foreign country depends on the nature of the

196 Chapter 9: Reaching Global Markets

8. Discuss the impact of strategic alliances on international marketing strategies.

Strategic alliances, partnerships formed to create competitive advantage on a world-wide basis, are

the newest form of international business structure. In some areas, they are becoming the predominant

9. Contrast globalization with customization of marketing strategies. Is one practice better than

the other?

Marketers have traditionally customized marketing strategies according to cultural, regional, and

national differences. Increasingly, more firms are attempting to globalize marketing strategies by

10. What are some of the product issues that you need to consider when marketing luxury

automobiles in Australia, Brazil, Singapore, South Africa, and Sweden?

Student responses to this question may vary depending on their own knowledge and understanding of

Chapter 9: Reaching Global Markets 197

ANSWERS TO APPLICATION QUESTIONS

1. To successfully implement marketing strategies in the international marketplace, a

marketer must understand the complexities of the global marketing environment. Which

environmental forces (sociocultural, economic, political/legal/regulatory, ethical,

competitive, or technological) might a marketer need to consider when marketing the

following products in the international marketplace, and why?

a. Barbie dolls

2. Many firms, including Procter & Gamble, FedEx, and Occidental Petroleum, wish to do

business in eastern Europe and in the countries that were once part of the former Soviet

Union. What events could occur that would make marketing in these countries more

difficult? What events might make it easier?

This question asks students to consider the political and environmental forces that could

3. This chapter discusses various organizational approaches to international marketing. Which

would be the best arrangements for international marketing of the following products, and

why?

a. Construction equipment

4. Procter & Gamble has made a substantial commitment to foreign markets, especially in

Latin America. Its actions may be described as a “globalization of marketing.” Describe

how a shoe manufacturer (e.g., Wolverine World Wide) would go from domestic marketing

to limited exporting, to international marketing, and finally to a globalization of marketing.

Give examples of some activities that might be involved in this process.

This question relates to the modes of entry into international markets. This four-stage process

includes:

198 Chapter 9: Reaching Global Markets

5. Use the information on windshield wiping fluid heaters and the Russian market included in

the text. Based on approximately 275 motor vehicles per 1,000 people in the Russian

population, what percent of the market do you think that companies selling this product can

capture (industry sales)? Which mode of entry seems best for one of these manufacturers?

They are usually mid-sized companies with limited capital, international experience, and

knowledge. How much customization would a product like this require for Russia?

Responses to the first question (percent of the market) will vary for each student, but the

estimates for industry sales should be realistic. Suggestions for mode of entry will also vary, but

Chapter 9: Reaching Global Markets 199

ANSWERS TO INTERNET EXERCISES

FTD

Founded in 1910 as Florists’ Telegraph Delivery, FTD was the first company to offer a “flowers –by–

wire” service. FTD does not deliver flowers itself, but it depends on local florists to do it. In 1994,

FTD expanded its toll-free telephone-ordering service by establishing a website. Visit the site at

www.ftd.com, and answer the following:

1. Click on “International.” Select a country to which you would like to send flowers.

Summarize the delivery and pricing information that would apply to that country.

2. Determine the cost of sending fresh–cut seasonal flowers to Germany.

3. What are the benefits of this global distribution system for sending flowers worldwide?

What other consumer products could be distributed globally through the Internet?

Students will be able to list several benefits of global distribution, including the ability to send

200 Chapter 9: Reaching Global Markets

ANSWERS TO DEVELOPING YOUR MARKETING PLAN

The information obtained from these questions should assist students in developing various aspects of

your marketing plan found in the Interactive Marketing Plan exercise at www.cengagebrain.com.

1. Review the environmental analysis that was completed in Chapter 3. Extend the analysis for

each of the seven factors to include global markets.

2. Using Figure 9.1 as a guide, determine the degree of international involvement that is

appropriate for your product and your company.

3. Discuss the concepts of customization and globalization for your product when moving to

international markets. Refer to Table 9.7 for guidance in your discussion.

Table 9.7 provides a variety of international issues for students to consider. Not every issue applies to

Chapter 9: Reaching Global Markets 201

COMMENTS ON THE CASES

VIDEO CASE 9.1: EVO: THE CHALLENGE OF GOING GLOBAL

Summary

Evo is an active sports retailer that has unexpectedly become a global distributor. Founded as an

online store in 2001, the company opened its first retail store in 2006; this combination of e-

commerce and physical stores allows evo to carry a greater selection and extend its global reach

while providing customers with a way to interact with its products. Approximately 5 percent of evo’s

business comes from outside the United States, but the company has been constrained by its

relationships with international vendors. Evo hopes to work with its vendors to make global selling

more feasible. In the meantime, the company continues to ship directly to consumers and engage with

its fans through the Internet.

Questions for Discussion

1. What are both the positive and negative outcomes from using exclusive dealer agreements

that restrict global distribution?

Vendors create exclusive dealer arrangements with evo to avoid saturating markets overseas and

2. What are the unique product features that could make evo a global brand?

Evo creates global brand exposure through the Internet. The company launched evoTrip as a

3. What should evo’s marketing strategy be to go global?

Student answers will vary. Evo should continue to build strong relationships with global

202 Chapter 9: Reaching Global Markets

CASE 9.2: STARBUCKS FACES GLOBAL OPPORTUNITIES AND

BARRIERS

Summary

This case shows why even successful American companies such as Starbucks need to customize their

products as they expand into international markets. As the coffee industry becomes increasingly

Questions for Discussion

1. Describe Starbucks’ global strategy. Is it engaging in more of a globalization or

customization approach?

Students can make a case for either approach. For example, Starbucks is engaging in a

2. What appear to be some of the most significant barriers Starbucks is facing when

expanding into foreign countries?

Starbucks has faced sociocultural barriers in the United Kingdom, China, India, and Italy

3. What are some of the most significant obstacles to expansion in Italy, and how can

Starbucks overcome them?

Although Starbucks was inspired by coffee shops in Italy, the company’s American concept