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by: Vinnie Haley


Marketplace > Clemson University > Marketing > MKT 427 > INTERNATIONAL MKTG
Vinnie Haley
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Roger Gomes

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Roger Gomes
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This 21 page Class Notes was uploaded by Vinnie Haley on Saturday September 26, 2015. The Class Notes belongs to MKT 427 at Clemson University taught by Roger Gomes in Fall. Since its upload, it has received 54 views. For similar materials see /class/214202/mkt-427-clemson-university in Marketing at Clemson University.

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Date Created: 09/26/15
Chapter 10 Know the term used to identify groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers Multinational market regions most important global trend toay Know and be able to explain the primary way market opportunities are enlarged by economic unions Every type of economic union shares the development and enlargement of market opportunities as a basic orientation Usually markets are enlarged through preferential tariff treatment for participating members common tariff barriers against outsiders or both Markets stimulate internal economic development by providing assured outlets and preferential treatment for goods produced within the union and customers benefit from lower tariff barriers Know and be able to explain why LAFTA met its demise The demise of the Latin American Free Trade Association was the result of economically stronger members not allowing for the needs of the weaker ones Many attempts have languished because of economic incompatibility that couldn t be resolved and the uncertainty of future economic advantage Be able to explain what quotstate sovereignty means and why it is so important to countries consideringjoining some sort of trade organization State sovereignty is one of the most cherished possessions of any nation and is relinquished only for a promise of significant improvement of the national position through cooperation Participating countries must have comparable aspirations and general compatibility for surrendering sovereignty There are five sorts of multinational cooperation from most basic to the most fully integrated form of regional cooperation Be able to list and describe each Note that there will be several questions over this material so be sure to be able to describe each form Regional Cooperation Groups most basic is the regional cooperation for development RCD Governments agree to participate jointly to develop basic industries beneficial to each economy Finance new ventures Ex Building a new hydroelectric plant Free Trade Area FTA requires more cooperation and integration than the RCD Agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries Mass market wo barriers Customs Union represents the next stage Enjoys the free trade area s reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the union EU used to be Between FranceMonaco ItalySan Marino SwitzerlandLiechtenstein Common Market agreement eliminates all tariffs and other restrictions on internal trade adopts a set of common external tariffs and removes all restrictions on the free flow of capital and labor among member nations Common marketplace for goods and services and capital Unified economy lacks only political unity European Economic Community EEC until Maastrincht Treaty created the EU Latin Amer has 3 Political Union most fully integrated Involves complete political and economic integration either voluntary or enforced COMECON was most notable enforced lt Soviet Union Commonwealth vountary org providing for the loosest possible relationship that can be called economic integration Know which treaty established the European Economic Community EEC and in what year Treaty of Rome 1957 Know what the Maastricht Treaty created EU an extension of the EEC into a political union Blueprint for Economic and Monetary Union Know the four largest European Union countries are in population see Exhibit 101 in order Germany France UK Italy Know what organization serves as the EU s Supreme Court European Court ofJustice ECJ Know and be able to explain the four objectives of the Treaty of Amsterdam Increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members Expansion beyond 27 members managing the conversion to the euro and EMU and speaking with one voice on foreign policy that directly affects the European continent are all issues Know how the expansion of the European Union worries existing EU members when it comes to cheap labor Prospect of illegal immigrants going across poorly guarded borders EU is demanding closed borders but new candidates don t wanna make neighbors made EU fears a flood of cheap labor even if the borders are closed it wants a long transition period before freedom of movement of labor whereas the applicants say their citizens should be allowed to work anywhere in the EU once they are members Know and be able to explain the key provisions of NAFTA see Exhibit 107 Market Access 10 yrs a tariffs eliminated Trade between US and Canada duty free Mexico will now eliminate tariffs on 50 of industrial goods imported from US and rest will be phased out Nontariff barriers Mexico eliminate nontariff barriers Removal of most import licenses Will help US exporters Rules of Origin tough rules for what goods qualify for good tariff treatment Japan can t assemble cars in mexico to avoid US tariffs unless certain Mexican content 625 North American content Supercede USCanada rules Customs administration uniform regulations Ensure exporters won t have to adapt to gt1 ruIes Investment eliminate investment conditions that restrict trade of goodsservices to mexico ex That foreign investors export a certain level of goods use domestic goods transfer technology to com petitorsetc Services principles governing services trade Can open subsidiaries in mexicono restrictions Don t have to hand off cargo to Mexican vehicle when entering mexico Intellectual property highest standards of protection available Government Procurement fair and open I 39 39 through quot 39 39 procedures Mexican govt owned enterprises will be open to US and Canadian suppliers Standards prohibits standardstechnical regulations to trade Don t require to lower healthenvsafety regs Be able to explain what Mercosur is southern cone freetrade area Mercosur Argentina Bolivia Brazil Chile Paraguay and Uraguay is the secondlargest commonmarket agreement in the Americas after NAFTA The Treaty of Asuncion provided legal basis in 1995 Common market that eventually allows for free movement of goods capital labor and services among member countries with a uniform external tariff No central institutions similar to the EU because concerned about losing sovereign control over taxes and other policies Know what the primary multinational trade group is in Asia The primary multinational trade group in Asia is ASEAN Association of Southeast Asian Nations Shaded Boxes Global Perspective Might Free Trade Bring Peace to the Middle East How Europe improved About Jerusalem and religions how it could be prosperoustourism to religious places assumes political peace Lost in Translation EU differences of thoughtGerman version united for our fortunehappiness English version united for the better downplays the emotional language BerIin Declaration StruggIe over translation of declaration All versions were agreed on The Death of Drachma Greece phasing out the drachma Europe s oldest currency 2001 Refusing to Pass along the Gas Russia and Ukraine dispute over natural gas supplies Supples to Europe could be affected Taco Bell Tries Again reopening in Mexico Some see as insult Offering an American menu Don t use name taco because its held as name of honor Chapter 9 Know what the chapter says about the importance of the economic level of a country when it comes to a foreign marketer adjusting its marketing tasks The economic level of a country is the single most important environmental element to which the foreign marketer must adjust the marketing task The state of economic growth within a country affects the attitudes toward business activity the demand for goods the distribution systems found within a country and the entire marketing process Ex Static economy consumption rigid mktjust a supply effort Know and be able to briefly describe each of the three categories of the United Nations classification of a country s stage of economic development Also know what the UN s classification scheme is based on MDCs moredeveloped countries industrialized countries with high per capita incomes US France LDCs lessdeveloped countries industrialized countriesjust entering world trade with relatively low per capita incomes Asia and Latin America LLDCs leastdeveloped countries industrially underdeveloped agrarian subsistence societies with rural populations extremely low per capita income levels and little world trade involvement Central Africa parts of Asia Violence and potential for violence associated with LLDCs Scheme is based on a country s level of industrialization Know what NICs are and be able to characterize them Also know whether they attract or repel trade and foreign direct investment NICs newly industrialized countries experiencing rapid economic expansion and industrialization Rapid industrialization of targeted industries and have per capita incomes that exceed other developing countries Away from restrictive trade practices and instituted significant free market reforms Attract both trade and foreign direct investment Chile Brazil Mexico South Korea Singapore Taiwan Know the quotFour Tigers of Southeast Asia and why they are referred to by that name South Korea Taiwan Hong Kong and Singapore such rapid growth and export performance Improved living standards by deregulating their domestic economies and opening up to global markets Know how a country s investment in information technology relates to its economic growth Important key to economic growth The cell phone the internet and other advances in IT open opportunities for emerging economies to catch up with richer ones New innovative electronic technologies can be the key to a sustainable future for developed and developing nations alike Know what the fundamental objective of most developing countries is Industrialization Most see in economic growth the achievement of social as well as economic goals Know what the term quotinfrastructurequot refers to and be able to give examples of it Infrastructure represents those types of capital goods that serve the activities of many industries Included in a country s infrastructure are paved roads railroads seaports communication networks financial networks and energy supplies all necessary to support production and marketing Know why infrastructure is a crucial component of the uncontrollable elements facing marketers is a crucial of the quot 39 39 elements facing marketers Without adequate transportation facilities for example distribution costs can increase substantially and the ability to reach certain segments of the market is impaired Lack of readability Impacts the firm s ability to market effectively The less developed the less adequate the infrastructure for conducting business Be able to explain what business function serves as an arbitrator between productive capacity and consumer demand Marketing is an economy s arbitrator between productive capacity and consumer demand Marketing is a critical element in effectively utilizing production resulting from economic growth It can create a balance between higher production and higher consumption Know and be able to explain what it means to say that the level of market development roughly parallels the stages of economic development The more developed an economy the greater the variety of marketing functions demanded and the more sophisticated and specialized the institutions become to perform marketing functions As countries develop the distribution and channel systems develop Specialty stores supermarkets emerge Number of retail stores declines volume of sales per store increases Channel of structure from manu to retailer develops Ad agencies mkt research etc created Know and be able to explain what BOPMs are BOPMs BottomofthePyramid Markets the 4 billion people across the globe with annual incomes of less than 1200 Markets not defined by national borders but by the pockets of poverty across countries Most concentrated in the LDCs and LLDCs Have been ignored by marketers but there is potential Know and be able to explain what BEMs are and be able to explain what occurs in them and how they re related to the situation after World War II BEMs Big emerging markets with half the world s population and accounting for 25 of the industrialize world s GDP toay will by 2010 be 50 Combined GDP of 2 trillion Already account for as large a share of world output as Germany and the UK combined Exports to BEMs exceed exports to Europe and Japan combined Are large have big population have sizable markets for range of products strong rates of growth economic reform are of political importance within their region are regional economic drivers will have further expansion in neighboring markets What s occurring in BEMs is analogous to the situation after WWII when tremendous demand was created during the reconstruction of Europe As Europe rebuilt its infrastructure and industrial base demand for capital goods exploded as more money was infused into its economies consumer demand also increased rapidly Europe couldn t supply the demand US was supplier Markets in BEMs are booming Now competition will be fierce Know which country in Eastern Europe has been most effective in moving to a marketdriven economy Czech Republic Be able to explain the relationship of Hong Kong and China After 155 yrs of British rule Hong Kong reverted to China in 1997 when it became a special administrative region SAR of the People s Republic of China China s quotone country two systems agreement that guarantees Hong Kong a high degree of autonomy Social and economic systems lifestyle and rights will stay the same for at least 50 yrs Hong Kong negotiates bilateral agreements and makes major decisions on its own The central government in Beijing is responsible for only foreign affairs and defense of the SAR Beijing honoring system well given the laissezfaire ways exuberant capitalism and gung ho spirit of Hong Kong Know what the quotOne China debate is about as well as the quotthree direct linksquot The three direct links are transportation trade and communications This issue must be faced because each country hasjoined the WTO and the rules insist that members communicate about trade disputes and other issues Trade fits well Taiwanese has rising costs an China has cheap labor One China debate is about Taiwan declaring independence from the mainland Not formally declaring unless China attacks Taiwan Both in WTO will have to end many restrictions and implement direct trade Shaded Boxes Global Perspective Walmart Tide and 3Snake Wine most stuff is local Sell in small batches No big deliveries The Benefits of Info Technology in Village Life woman with phone booth nokia phone Bangladesh People can find market values of stuff Infrastructure India animals provide power lots of cattle there They help haul stuff Produce dung for manure and household fuel Preserving best breeds Got Distribution Problems Call Grandma or Your Local University getting drinks to young customers in China CocaCola Used Chinese street committee to market productsolder people making sure people in area being good Chinese citizens High statusrecruited to sell coke pushcarts Pepsi recruited university students with coolers Marketing in the Third World Teaching Pricing and Community Usage must sell in smaller amounts Gillette problem getting them to shave Giving movies to show them how to portable theaters Colgate showing what and how to use toothpaste Need to show them the need for toothpaste first Study Guide for Test 2 MKT 427627 Chapter 5 Culture Management Style and Business Systems pp 126 127 Be able to def39me the term adaptation and explain why it is important in international marketing Adaptation affirmative acceptance open tolerance exibility humility justicefairness ability to adjust to varying tempos curiosityinterest knowledge of the country liking for others ability to command and ability to integrate oneself into an alien culture It is important in international marketing because you need to be able to handle misunderstandings and differences in culture pp 127 129 Know the def39mition and be able to identify cultural imperatives cultural electives and cultural exclusives Cultural imperatives the business customs and expectations that must be met and conformed to or avoided if relationships are to be successful ex establishing friendships Cultural electives relate to areas of behavior or to customs that cultural aliens may wish to conform to or participate in but that are not required ex bowing to the Japanese by a Westerner not necessary but appreciated Cultural exclusives customs or behavior patterns reserved exclusively for the locals and form which the foreigner is barred ex Christian attempting to act like a Muslim pp 129 133 Be able to list the ideas on which normative US cultural concepts are based eg having a master of destiny viewpoint etc Master of Destiny viewpoint Independent enterprise as the instrument of social action Personnel selection and reward based on merit Decisions based on objective analysis Wide sharing in decision making Neverending quest for improvement Competition producing efficiency pp 129 130 Be able to def39me and describe the master of destiny viewpoint people can substantially in uence the future they are in control of their own destinies re ects the attitude that though luck may in uence an individual s future on balance persistence hard work a commitment to fulfill quot and effective use of time give people control of their destinies pp 129 130 Know and be able to explain the belief that business decisions should be based on objective analysis and that managers strive to be scientific US business believes decisions must be supported and based on accurate and relevant information great emphasis is placed on the collection and free ow of information to all levels within the organization and on frankness of expression in the evaluation of business opinions or decisions p131 Be able to explain what it means to say that US business is on a never ending quest for improvement change is not only normal but necessary that nothing is sacred or above improvement results are what count if practices must change to achieve results then change is in order pp 131 132 Be able to explain what it means to say that competition is crucial for efficiency and how the invisible hand notion relates to that normative US cultural concept competition is crucial for efficiency improvement and regeneration society is better off the invisible hand notion justifies competitive behavior because it improves society and its organizations competition among sales people is a good think because it promotes better individual performance and better corporate performance p132 108 Know what PDI stands for and how it is related to employg employg relationships when it comes to authority and decision making Power Distance Index The understanding of rank and status of clients and business partners In highPDI countries 39 Jinates are not likely to J39 bosses pp 132 134 Know and be able to discuss the three typical authority and decision making patterns top level management decisions decentralized decisions and committee or group decisions and be able to give examples of each Toplevel management decisions generally found in situations in which family or close ownership gives absolute control to owners and 39 39 are small enough to allow such centralized decision making ex France has a few at the top who exercise control Decentralized decisions allows executives at different levels of management to exercise authority over their own functions large scale businesses with highly developed management systems ex A trader in the US Committee or group decisions making decisions by group or concensus committees may operate on a centralized or decentralized basis ex Asian cultures and religions p 134 Be able to discuss differences between countries as described in the text when it comes to management objectives and aspirations of job security and mobility Security and Mobility relate directly to basic human motivation and therefore have widespread economic and social implications Some believe security means a big paycheck and the training and ability required for moving from company to company within the business Others think it means security of lifetime positions with their companies 6 paternalistic orientation France and Italy And still other think it means adequate retirement plans and other welfare benefits Personal Life Affiliation and Social Acceptance Power and Achievement FacetoFace Communication Internet Communications pp 136 138 Know where a country would be along Hall s high contextlow context continuum and be able to describe what Exhibit 52 shows High Context flapaneseArabianLatin American SpanishItalianEnglishUKFrenchNorth AmericanUSScandinavianGermanSwissLow Context pp 140 141 Know and be able to explain the difference between P Time and M Time and be able to give examples of each Monochromic tend to concentrate on one thing at a time divide time into small units and are concerned with promptness used in a linear way and is experience as almost tangible low context cultures North Americans Germans Polychronic completion of a human transaction is emphasized more than holding to schedules characterized by the simultaneous occurrence of many things and by a great involvement with people allows relationships to build and context to be absorbed as parts of highcontext cultures Brazil has less public clocks available p 144 Know and be able to describe what Exhibit 54 shows It shows the percentage of women in upper levels of management MostNorway LeastJapan pp 145 153 Read and be able to summarize the point of the Corruption Define paragraphs eg what sorts of things that are considered normal and appropriate by Americans might be Viewed as corrupt in other countries p 151 Know the de nitions of bribery and extortion Bribery voluntary offered payment by someone seeking unlawful advantage Extortion payments are extracted under duress by someone in authority from a person seeking only what he or she is lawfully entitled to p 151 Be able to define and explain what lubrication means in terms of international marketing Lubrication involves a relatively small sum of cash gift or service given to a lowranking official in a country where such offerings are not prohibited by law ex A small payment made to dock workers to speed up their pace so that 39 J39 a truck takes a few hours rather than all day pp 154 155 In the text Lester Thurow introduced the term communitarian Know and be able to explain what that term means Kind of capitalism typified by cooperation among governments management and labor sales I revenues are more stable Chapter 6 The Political Environment A Critical Concern p 161 Know where the U S and EU turned to when they got into a trade dispute over bananas Who won pp 162 163 Know the de nition of sovereign state and be able to explain give its characteristics Sovereign state independent and free from all external control enjoys full legal equality with other states governs its own territory selects its own political economic and social systems and has the power to enter into agreements with other nations p 163 Know what is at the top of the list ie most important of political issues concerning foreign businesses The most important political issue concerning foreign business is a stable and friendly government pp 165 166 Know the three fundamental forms of government put forth by the ancient Greeks as well as the common terms for those in use today Rule by one 7 monarchy or dictatorship Rule by the few 7 aristocracy or oligarchy Rule by the many democracy pp 167 168 Know and be able to describe the definition of nationalism Nationalism an intense feeling of national pride and unity an awakening of a nation s people to pride in their country p 169170 In the section on Political Risks of Global Business be able to de ne con scation expropriation and domestication and be able to describe each Know which political risk is the most severe Confiscation the seizing of a company s assets without payment Expropriation government seizes an investment but makes some reimbursement for the assets Domestication host countries gradually cause the transfer of foreign investments to national control and ownership through a series of government decrees that mandate local ownership and greater national involvement in a company s management pp 170 176 Know and be able to explain the various economic risks of international marketing Exchange controls stem from shortages of foreign exchange held by a country controls may be levied over all movements of capital or selectively against the most politically vulnerable companies to conserve the supply of foreign exchange for the most essential uses Localcontent laws require a portion of any product sold within the country to have local content to contain locally made parts Import restrictions restrictions on imports are common to force foreign industry to purchase more supplies within the host country and thereby create markets for local industry Tax controls Price controls used to control the price of living used to force foreign companies to sell equity to local interests Labor problems in many countries foreign firms are considered fair game for the demands of the domestic labor supply p 174 Know what an NGO is and examples of NGOs given in the text Nongovernmental organizations Red Cross Red Crescent Amnesty International UNICEF Habitat for Humanity pp 176 177 Know which kind of American companies seem to be most vulnerable when it comes to political sensitivity in foreign markets Fastfood restaurants pp 177 178 Know the activities involved in Forecasting Political Risk eg political risk assessment Political risk assessment attempt to forecast political instability to help management identify and evaluate political events and their potential in uence on current and future international business decisions pp 179 Be able to list and explain the various strategies MNCs can take to political vulnerability 181 and risk Improves the balance of payments by increasing exports or reducing imports through import substitution Uses locally produced resources Transfers capital technology and or skills Creates jobs Makes tax contributions Corporate philanthropy Joint ventures Expanding the investment base including several investors and banks in nancing an investment in the host country Licensing license technology for a fee Flamed domestication gradual process of participating with nationals in all phases of company operations Political bargaining lobbying Political payoffs paying those in power to intervene on behalf of the multinational company Know and be able to explain the US government s policy toward MNCs that are confronted with p l 8 l bribery situations It is illegal for US citizens to pay a bribe even if it is a common practice in the host country p 182 Know which U S agency is the principle one that supports U S business abroad The Department of Commerce Chapter 7 The International Legal Environment pp 186 Be able to list the four heritages that form the bases for the majority of the legal systems of the 190 world 1 Common law 2 Civil or code law 3 Islamic law 4 C 39 39 legal system in the Marxistsocialist pp 187 Be able to explain what common law is all about including its unique aspects what it is based 188 on and give examples of countries that use it The basis for common law is tradition past practices and legal precedents set by the courts through interpretation of statues legal legislation and past rulings Ownership is established by use In the United States the impossibility of performance does not necessarily excuse compliance with the provisions ofa contract unless J quot is 39 r quot 39 because of an act of God pp 187 Be able to explain what civil and code law are about including unique aspects what are they 188 based on and give examples of countries that use them p 188189 Be able to explain what Islamic law is all about including its unique aspects what it is based on and give examples of countries that use it pp 189 Be able to explain what Marxist Socialist tenets are all about what it is based on and give 190 examples of countries that use it p 190 Know what sorts of entities that the World Court can adjudicate disputes for The World Court can JJ J disputes between governments p 190 Know how jurisdiction is generally determined when international commercial disputes arise pp 191 Know and be able to describe the types of action that international marketers have available to them 194 eg conciliation arbitration etc when things go wrong in a commercial transaction Conciliation also known as mediation nonbinding agreement between parties to resolve disputes by asking a third party to mediate differences especially effective when resolving disputes with Chinese they feel less threatened Arbitration parties involved select a disinterested and informed party or parties as references to determine the merits of the case and make a judgment that both parties agree to honor preferred over litigation Litigation seek a 39 if possible p 191193 Know how effective arbitration has been and what seems to drive its success p 194 Know the various deterrents to litigation that are described in the text Fear of creating a poor image and damaging public relations Fear of unfair treatment in a foreign court Difficulty in collecting a judgment that may otherwise have been collected in a mutually agreed settlement through arbitration The relatively high cost and time required when bringing legal action Loss Ofcuuf J quot quot pp 196 Know what companies with registered trademarks in the US should learn from the McDonald s 197 trademark case in Japan Must be aware that because the company has established rights in the United States they will be protected around the world or that rightful ownership can be 39 quot 39 A should the need arise p 197 Know how ownership of intellectual property lights is established in a common law country Ownership is 39 quot 39 J by prior use pp 201 Know what the situation is regarding laws regulating marketing activities such as promotion 204 pricing etc in various countries eg Do all countries have such laws Do only a very few countries have such laws Various countries have different laws regarding certain things Some countries may have only a few marketing laws with lax enforcement others may have detailed complicated rules to follow that are stringently enforced Not all countries have laws but a majority do pp 204 Know what green marketing refers to and which country has enacted the most stringent green 205 marketing laws regulating the management and recycling of packaging waste Green marketing focuses on environmentally friendly products and product packaging and its effect on solid waste management Germany pp 205 Know which principle of international law is relevant to the question of jurisdiction of U S law over 210 acts committed outside the territorial limits of the US Be able to discuss that principle the objective theory of jurisdiction even if an act is committed outside the territorial jurisdiction of US courts those courts can nevertheless have jurisdiction if the act produces effects within the home country pp 206 Know which U S act makes it illegal for companies to pay bribes to foreign officials candidates or 207 political parties Foreign Corrupt Practices Act FCPA Chapter 8 Develo lg a Global Vision Through Marketing Research p 216 Know the key component in developing successful marketing strategies and avoiding major marketing blunders in the international marketing environment Information pp 216 Know the two distinct complications that impact international marketing research 217 Information must be communicated across cultural boundaries The environments within which the research tools are applied are often different in foreign markets p 218 Know why it is that many firms engaged in foreign marketing do not make decisions with the benefit of all the pertinent information that is out there Some rms have neither the appreciation for information nor adequate time or money for the implementation of research p 218 Know the five steps to the research process in order 1 Define the research problem and establish research objectives 2 Determine the sources of information to fulfill the research objectives 3 Consider the costs and benefits of the research effort 4 Gather the relevant data from secondary or primary sources or both 5 Analyze interpret and summarize the results 6 Effectively communicate the results to decision makers pp 220 Know what secondary data is as well as the problems that are associated with such data obtained 223 from many international markets and data sources Secondary data data that has already been collected Problems availability of data reliability of data comparability of data validity p 222 Know why much of secondary research that is provided by foreign governments is suspect when it comes to the reliability of the data Less developed countries are particularly prone to being both overly optimistic and unreliable in reporting relevant economic data about their countries Foreign trade statistics may be blown up slightly because each country in the EU grants some form of export subsidy p 223 Know the questions that need to be asked and answered when it comes to effectively validating secondary data eg Who collected the data etc Who collected the data Would there be any reason for purposely misrepresenting the facts For what purposes were the data collected How by what methodology were the data collected Are the data internally 39 and logical in light of known data sources or market factors p 223 Know and be able to explain the term primary data Primary data data collected specifically for the particular research project at hand pp 223 Know and be able to explain the difference between quantitative and qualitative data 225 Quantitative data usually large number of respondents are asked to reply either verbally or in writing to structured questions using a specific response format or to select a response from a set of choices Qualitative data questions are openended or indepth and unstructured responses that re ect the person s thoughts and feelings on the subject are sought p 227 There are many dif culties when engaging in international market research Know the biggest problem in sampling that researchers need to be aware of The lack of adequate demographic data and available lists from which to draw f 39 samples pp 228 Know and be able to completely describe the various techniques that researchers can use to nd 230 translation errors before sending out a survey Back translation questionnaire is translated from one language to another and then a second party translates its back into the original and the two original language versions are compared Parallel translation more than two translators are used for the back translation to ensure accurate translation because of common used idioms in both languages Decentering hybrid of back translation successive process of translation and retranslation of questionnaire each time by a different translator pp 233 235 Know the two methods of forecasting demand that are particularly suitable for international marketers Expert opinion analogy p 234 Know the key in using expert opinion to help a marketer engaged in forecasting demand Triangulation comparing estimates produced by different sources p 234 Know and be able to describe the underlying assumption about analogy when it comes to forecasting demand Assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country pp 238 Know and be able to explain the four kinds of company agency customer relationships that might be 239 used to brid ge the cultural barrier that is present in most international marketing research Companyagency customers Companyagency local agencycustomers Company subsidiaryagencycustomers Company foreign ag n 3 Study Guide for Test 1 7 MKT 427627 Be sure and review your class notes including notes on speakers handouts video etc as per the syllabus material on exam content Be sure to be familiar with all the shaded boxes ie Crossing Borders Global Perspective what counties products and issues involved Review the syllabus exams section for what all exams will cover Know what four events and trends affecting global business today stand out as the most dynamic l The rapid growth of the WTO and regional free trade areas such as the North American Free Trade Area and the European Union 2 The trend toward the acceptance of the free market system among developing countries in Latin America Asia and eastern Europe 3 The burgeoning impact of the Intemet mobile phones and other global media on the dissolution of national borders 4 The mandate to manage the resources and global environment properly for the generations to come Be able to explain the meaning of the comment tha every American company is international Its business performance is conditioned in part by events that occur abroad Companies that do not operate in the international arena are affected to some degree by the success of the European Union the exportled growth in South Korea the revitalized Mexican economy the economic changes taking place in China military con icts in the Middle East and global warming 67 Know the level of foreign investment in the US at present and which countries have the most 163 trillion Netherlands Japan Germany and Switzerland have the most Be able to give examples of US companies that have invested in foreign countries Firestone Ben amp Jerry s Burger King Columbia Pictures Know the company that is considered to be the U S leader with foreign revenues see Exhibit 12 WalMart When it comes to firms venturing into international marketing for the rst time know what the requirement is requirements are The requirement is a thorough and complete commitment to foreign markets and for many new ways of operating Know the de nition of international marketing as well as the only difference between the de nitions of domestic and international marketing The performance of business activities designed to plan price promote and direct the ow of a company s goods and services to consumers or users in more than one nation for a profit The only difference between the definitions of domestic marketing and international marketing is that in the latter case marketing activities take place in more than one country 11 Know and be able to explain the difference between uncontrollable and controllable elements of the environment in which businesses operate Controllable elements marketer s decision area construct a marketing program can be altered in the long run and in the short run to adjust to changing market conditions consumer tastes or corporate objectivies ex firm characteristics price product promotion channels of distribution research Uncontrollable elements uncertainty must actively evaluate and adapt ex political legal forces I competitive structure economic climate cultural forces level of 39 J l3 Be able to explain the total environment of an international marketer including the difference between politicallegal forces economic forces competitive forces level of technology structure of distribution geography and infrastructure and cultural forces Also be able to explain the elements of the uncontrollable foreign environment as well as the uncontrollable domestic environment see Exhibit Know what the term environmental adaptation means and what it involves To adjust and adapt a marketing program to foreign markets marketers must be able to interpret effectively the in uence and impact of each of the uncontrollable environmental elements on the marketing plan for each foreign market in which they hope to do business with Know what the task of cultural adjustment refers to and how challenging and important it is to international marketers The most challenging and important one confronting international marketers they must adjust their marketing efforts to cultures to which they are not attuned Know what the key to successful international marketing is as well as the definition of adaptation The key to successful international marketing is adaptation to environmental differences from one market to another Adaptation a conscious effort on the part of the international marketer to anticipate the in uences of both the foreign and domestic uncontrollable factors on a marketing mix and then to adjust the marketing mix to minimize the effects Be able to define self reference criterion and explain how it might in uence human behavior when it comes to international marketing SRC an unconscious reference to one s own cultural values experiences and knowledge as a basis for decisions SRC impedes the ability to assess a foreign market in its true light Know the steps in order that the knowledgeable marketer should take to avoid errors in business decisions 1 Define the business problem or goal in homecountry cultural traits habits or norms 2 Define the business problem or goal in foreigncountry cultural traits habits or norms through consultation with natives of the target country Make no value judgments 3 Isolate the SRC in uence in the problem and examine it carefully to see how it complicates the problem 4 Redefine the problem without the SRC in uence and solve for the optimum business goal situation 20 Know and be able to describe the stages of international marketing involvement 1 Companies with either hightechnology and or marketingbased resources appear to be better equipped to internationalize than more traditional manufacturing kinds of companies 2 Smaller home markets and larger production capacities appear to favor internationalization 3 Firms with key managers well networked internationally are able to accelerate the internationalization process 23 Know and be able to describe the three approaches that seem to dominate strategic thinking in rms involved in international markets 1 Domestic market extension concept 9 domestic company seeks sales extension of its domestic products into foreign markets market excess domestic production 2 Multidomestic market concept 9 market on a country by country basis with separate marketing strategies for each country I I 3 Global marketing concept 9 J J39 J marketing mix 1 1 39 across national boundaries 23 Be able to define and explain the global marketing concept Views an entire set of country markets as a unit identifying groups of prospective buyers with similar needs and as a global market segment and developing a marketing plan that strives for standardization wherever it is cost and culturally effective 28 Know which four countries the US trades with the most in order see Exhibit 21 1 Canada 2 China 3 Mexico 4 Japan 28 30 Know the name of the plan that was used after World War II to rebuild and reinvigorate war ravaged countries The Marshall Plan 29 30 44 49 Know howwhy a contributing cause of the Great Depression was the Smoot Hawley Act and how GATT was used after World War II Also know what organization GATT became part of after the Uruguay Round of tariff negotiations SmootHawley Act raised average US tariffs on imported goods and in retaliation 60 countries erected high tariff walls and international trade stalled along with most economies GATT was used as a forum for member countries to negotiate a reduction of tariffs and other barriers of trade GATT became part of the WTO 32 Know what MNC stands for and be able to de ne the phrase 39 Corporations 32 Based on Exhibit 22 know which country is number one in the number of corporations 33 that make up the top 100 Know which country has the second most corporations in the top 100 1 United States 2 Germany 33 34 First be able to de ne balance of payments Second know and be able to describe the three accounts that make up a balance of payments statement Balance of payments the system of accounts that records a nation s international financial transactions between its residents and those of the rest of the world during a given period of time 1 Current account a record of all merchandise exports imports and services plus unilateral transfers of funds primary interest to international business 2 Capital account a record of direct investment portfolio investment and shortterm capital movements to and from countries 3 Reserves account a record of exports and imports of gold increases or decreases in foreign exchange and increases or decreases in liabilities to foreign central banks 37 41 Be able to define and explain the term protectionism and what role the WTO if any has played in avoiding it Protectionism the use by nations of legal barriers exchange barriers and psychological barriers to restrain entry of goods from other countries The WTO has been effective in reducing tariffs but countries still resort to protectionism 41 Know the reasons justi cations that countries give for adopting an attitude of protectionism 1 Protection of an infant industry 2 Protection of the home market 3 Need to keep money at home 4 Encouragement of capital accumulation 5 Maintenance of the standard of living and real wages 6 Conservation of natural resources 7 Industrialization of a lowwage nation 8 Maintenance of employment and reduction of unemployment 9 National defense 10 Increase ofbusiness size 1 l Retaliation and bargaining 37 Be able to define tariff and explain what effect tariffs tend to have on business 41 Tariff a tax imposed by a government on goods entering at its borders Tariffs tend to increase in ationary pressures and government control and political considerations in economic matters weaken balance of payments positions and international relations and restrict manufacturers supply sources and competition 37 Know and be able to explain the various mtariff barriers see Exhibit 26 45 Standards to protect health safety and product quality Charges on Imports Governmental Participation in Trade 38 Be able to define voluntary export restraints and explain why they might be used An agreement between the importing country and the exporting country for a restriction on the volume of exports 39 Know and be able to explain the difference between boycotts and embargoes Boycott an absolute restriction against the purchase and importation of certain goods and or services from other countries Embargo a refusal to sellto a specific country 40 Be able to define and explain how standards can be used as a nontariff barrier 45 40 Know what predatory pricing is and whyhow antidumping laws prevent foreign producers from using 41 them Antidumping laws were designed to prevent foreign producers from predatory pricing a practice whereby a foreign producer intentionally sells its products in the US for less than the cost of production to undermine the competition and take control of the market Antidumping laws assess duties for selling below cost andor assess countervailing duties to prevent the use of foreign government subsidies to undermine American industry 41 Know the four ongoing activities to support the growth of international trade Hint one is the IMF 46 l GATT 2 WTO 3 IMF International Monetary Fund 4 World Bank Group 41 Know the signi cant breakthroughs of the Uruguay Round 46 All tariffs in 10 vital industrial sectors with key trading partners were eliminated GATS The General Agreement on Trade in Services was the first multilateral legally enforceable covering trade and investment in the services sector TRIMs Trade Related Investment Measures TRIPs TradeRelated Aspects of 39 quot 39 Property Rights 41 Know the difference between the WTO and GATT 46 The WTO is an institution but an agreement as was GATT WTO issues binding decisions unlike GATT 41 Know why the US challenged the rati cation of the WTO 46 Because of concern for the possible loss of sovereignty over its trade laws to WTO the lack of veto power and the role of the United States would assume when a con ict arises over an individual state s laws that might be 39 quot J by a WTO member 41 Know the various interpretation loopholes that world marketers may attempt when it comes to 46 skirting the spirit of GATT and WTO Antidumping duties Negotiating bilateral trade agreements Reducing tariffs on benign imported goods 41 Know the role of and be able to de ne the IMF 46 Formed to overcome inadequate monetary reserves and unstable currencies in global trade 184 countries are members The stabilization of foreign exchange rates and the establishment of freely convertible currencies to facilitate the expansion and balanced growth of international trade 41 Know the major complaints from protestors during the Seattle Round of the WTO meetings 46 The amalgam of unintended consequences of globalization environmental concerns worker exploitation and domestic job losses cultural extinction higher oil prices and diminished sovereignty of nations 52 Know how why history and geography are important when it comes to interpreting a culture s behavior 53 and attitudes 52 Know what history is used for when it comes to a nation eg how it helps to de ne a nation s mission 53 etc It is used to understand explain and appreciate a people s image of itself and the attitudes and unconscious fears that are re ected in its view of foreign cultures 55 Know what the text says about the isolationopenness of Japan when Commodore Perry sailed there in 1853 There was isolation before Commodore Perry arrived 55 Know the various factors that permeate many facets of Japanese behavior and what those 57 characteristics mean to outsiders Loyalty to family to country to company and to social groups and a strong drive to cooperate to work together for a common cause 55 Know who the text says history is written by and what that means for those of us who read about it see amp Crossing Borders 31 Know the story about who invented the telephone 60 History is written by different historians from different countries so what one historian perceives may be different than what someone else takes away from the event due to culture People in the US UK and Germany believe Alexander Graham Bell invested the telephone but in Italy they believe that Antonio Meucci invented it five years before Bell 56 We know that maps of the world sold in the U S tend to have the US as the center of the world while maps of the world sold in Great Britain show Great Britain at the center of the world We find a similar situation when we buy maps in other countries as well Know why that probably occurs Our perspective in uences history and other matters 55 Be able to summarize the feelings of most Mexicans towards the US according to the text 61 There is a lovehate relationship Mexicans see the US as a threat to their political economic and cultural sovereignty 55 Know what happened during and the outcome of the Mexican War of 1846 1848 61 Mexico ceding California and a large part of the West to the United States 57 Know the various methods that the U S used to expand westward toward the Paci c in the 1800s see 58 Exhibit 31 e g annexation buying Financial deals negotiated settlements and forcible annexations Louisiana Purchase West Florida annexation Texas quot Gadsden Purchase 57 Be able to explain Manifest Destiny and the Monroe Doctrine and the Monroe Doctrine s Roosevelt 60 Corollary Manifest Destiny Americans were chosen people ordained by God to create a model society it referred to the territorial expansion of the US from the Atlantic to the Paci c Monroe Doctrine Proclaimed no further European colonization in the New World abstention of the US from European political affairs and nonintervention of European governments in the governments of the Western Hemisphere Roosevelt Corollary stated that not only would the US prohibit nonAmerican intervention in Latin American affairs but it would also police the area and guarantee that Latin American nations met their international 39 quot quot 57 Be able to characterize how U S citizens and Latin American citizens see the Monroe Doctrine 60 Intervention into Latin America is seen as justifiable to Americans but Latin Americans see them as unwelcome intrusions in Latin American affairs 61 Know what sort of environment that geography is a part of as well as the important elements of 70 geography that should be of interest to someone preparing an appraisal of the feasibility of a venture into another country Geography is an element of the uncontrollable environment Climate and topography resources 65 When it comes to geography nature and economic growth know what sorts of countries suffer the 68 most from major calamities Poor and developing countries 67 Be able to defme and explain the term sustainable development 68 Sustainable development a joint approach among those who seek economic growth with wise resource management equitable distribution of benefits and reduction of negative efforts on people and the environment from the process of economic growth 70 Be able to explain the findings shown in Exhibit 33 e g which continent geographic areas consumes the least and the most world energy The least Africa The most North America 72 Be able to explain why we tend to see migration from rural to urban areas ie why do people move to 74 cities A result of a desire for greater access to sources of education healthcare and improved job opportunities 76 Know the three converging issues in China that are causing a serious gender imbalance in China 1 China has a strict onechild policy to curb population growth 2 Traditional values dictate male superiority and a de nite parental preference for boys 3 Prenatal scanning allows women to discover the sex of their fetuses and thereby abort unwanted female fetuses 94 Be able to explain the de nition 0 culture and explain how culture impacts marketer s efforts Culture the sum total of knowledge beliefs art morals laws customs and any other capabilities and habits acquired by humans as members of society The marketing concept is the satisfaction of consumer needs and wants To find out what exactly a consumer needs or wants a marketer must be a student of culture 94 Be able to explain what it means that marketers may have to act as agents of change When would marketers do that Why in what situations Marketers are acting as agents of change whenever the product or idea being marketed is innovative As markets change due to economic conditions and other elements of the culture marketers must be ready to change their efforts to the demands of the market 96 Know which country has the highest rate of consumption of cut owers chocolate sh pasta and wine see Exhibit 42 Cut owers Netherlands Chocolate United Kingdom Fish Japan Pasta Italy Wine Italy 100 102 Be able to explain what Geert Hofstede meant when he referred to culture as the software of the mind He says that it provides a guide for humans on how to think and behave it is a problemsolving tool 100 102 Know what socialization means when it comes to learning culture In socialization from what sources do individuals learn culture Individuals learn culture from social institutions through socialization growing up They also absorb culture through role modeling or imitation of their peers 100 102 Be able to define acculturation and differentiate it from socialization Acculturation adjusting to a new culture Socialization growing up 101 Know the origins of culture see Exhibit 44 Geography History Technology and political economy Social Institutions 102 106 Know all eight of the social institutions that in uence values and culture and be able to give the four social institutions that most strongly in uence values and culture Family Religion School The media Government Corporations 106 108 When it comes to the US Australia Great Britain Japan France and Canada know which country scores highest and lowest on the IndividualismCollectivism Index IDV and be able to explain what high and low scores mean see Exhibit 45 Lowest Japan 46 Highest United States 91 Cultures that score high re ect an I mentality and tend to reward and accept individual initiative Cultures that score low re ect a we mentality and generally subjugate the individual to the group 112 When it comes to symbols be able to describe aesthetics as symbols beginning with a de nition and 113 then being able to give examples Symbols represented in arts folklore music drama dance dress and cosmetics Examples Japanese vs Chinese restaurant colors and tartan design for new uniforms 114 In Richard Nisbett s book The Geography of Thought he discusses differences in Asian and Western 115 thinking Be able to explain his findings Asians tend to see the whole picture and can report details about the background and foreground Westerners alternatively focus on the foreground and can provide great details about central figures but see relatively little in the background 115 Know and be able to explain the difference between factual and interpretive knowledge 116 factual knowledge a straightforward fact about culture but assumes additional significance when interpreted within the context of the culture Interpretive knowledge requires a degree of insight that may best be described as a feeling most dependent on past experience 117 Know the de nition of cultural borrowing and be able to give an example of it 118 Cultural borrowing a responsible effort to learn from others cultural ways in the quest for better solutions to a society s particular problems Example begin breakfast with a cantaloupe from Persia 117 When it comes to Resistance to Change be able to brie y describe what Hofstede found was 118 associated with consumers acceptance of innovations across cultures Consumers acceptance of innovations varies across cultures depending on higher IDV and lower power distiance and uncertainty avoidance 118 Be able to explain how cultural congruence unplanned change and planned change are used to 119 introduce products into a marketplace Cultural congruence involves marketing products similar to ones already on the market in a manner as congruent as possible with existing cultural norms thereby minimizing resistance Unplanned change 9 introduce a product and hope for the best Planned change 9 deliberately set out to change those aspects of the culture offering resistance to predetermined marketing goals 121 Know and be able to explain diffusion and the possible consequences of diffusion of an innovation 122 Diffusion is product acceptance Functional or dysfunction depending on whether the effects are desirable or undesirable


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