International marketing terpstra foley sarathy pdf

International Marketing 11e: Terpstra, Foley, Sarathy 1

International Marketing 11e: Terpstra, Foley, Sarathy 2

No. Correct

Pct Correct Ques No. Question

16 100% 14 Which of the seven elements of culture was labeled the most "obvious"?

16 100% 16 Give two examples of how religion could affect a country's economy.

16 100% 25 What are the main moral principles or ethical standards discussed in detail the text or lecture? Click all that apply.

15 94% 7 The WTO fosters agreements what concepts and practices in the area of international trade?

15 94% 15 Spanish speakers in the US all speak the same dialect.

15 94% 18 High or Low Context language 1

15 94% 20 What is the role of education in a culture?

15 94% 26 What is greenwashing?

15 94% 27 Define utilitarianism. Why is it a subjective concept?

15 94% 31 What trade agreement involving Canada and Mexico did we

discover was impacted by President Trump's executive order

on rejecting the Trans Pacific Partnership?

International Marketing 11e: Terpstra, Foley, Sarathy 3

No. Correct

Pct Correct

Ques No. Question

14 88% 12 What are the seven elements of culture from the text and lectures?

14 88% 17 What popular US sandwich meat would fail in an Islamic country based on religious grounds?

13 81% 1 Give an example of what you consider to be an absolute advantage in a country other than Portugal.

13 81% 2 Give an example of comparative advantage between two US states on a product, service or destination and explain why.

13 81% 3 Match the Product Life Cycle step with the graphic.

13 81% 11 Expropriation and nationalization are examples of the worst case of political risk in foreign markets.

13 81% 19 High or low context language 2

13 81% 22 What is the acronym we discussed in class for the Hofstede quantitative assessment of culture?

13 81% 28 Which of the following is an example of a firm using hypernorms as a guide for ethical behavior?

13 81% 30 As a country develops economically, to encourage local proprietary technology development (which could result in patents) and foreign direct investment from venture capital looking for new technology, it may

International Marketing 11e: Terpstra, Foley, Sarathy 4

No. Correct

Pct Correct Ques No. Question

12 75% 5 An ad valorem duty is a

12 75% 6 What is the correct order of the stages of regional economic integration between nations?

12 75% 8 If you are launching a new export business expanding globally, list an agency that can help you and how it can help.

12 75% 9 What are the dimensions of the legal environment in international marketing? Check all that apply.

WTO common incorrect.

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No. Correct

Pct Correct Ques No. Question

11 69% 21 In a developed nation, why would it be politically and profitably attractive to target the people in the "BOP"?

10 63% 13 Which brand colors are probably safe to use in Ecuador and which colors in Mexico?

10 63% 24 For the element you selected in Question 23, which is/arethe most favorable country(s) shown in the Table on p 99 and why?

9 56% 4 How do tariffs distort the comparative advantage of good that are traded internationally?

9 56% 10 Give an example of a standards organization in international law and trade. What does it do?

7 44% 23

You are considering selling your company's consumer product in a foreign country which already has similar products, but of inferior quality. Which Hofstede element shown in Table on page 99 would be most important and why?

7 44% 29

Assume you are a US international marketing manager and you discover that your business school classmate who is your firm's sales representative in India has paid a large bribe to an Indian colleague working at a private company in order to win a big contract. Should you be worried that the bribe is a violation of US law?

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International Marketing 11e: Terpstra, Foley, Sarathy 7

3 Because Valentine's day is around the corner, Ecuador has an absolute advantage in

producing and exporting roses to the USA. Ecuador has the resources and perfect

weather …

4 California has a comparative advantage in milk compared to Chicago who would have

a comparative advantage in skyscrapers. …Chicago has the schools and companies

that can build skyscrapers.

8 The U.S. Department of Commerce, Bureau of Industry and Security (BIS) is

responsible for dual-use goods and any technology that could threaten the U.S. security

if improperly exported in the case you would like to export highly dangerous chemicals

for the Indian pharmaceutical producer that can be used as a chemical weapon against

US.

16 …the Muslim prohibition against alcohol it has caused Heineken and other brewers to

have to sell nonalcoholic beer in Saudi Arabia. …how religion could affect a country's

economy would be by the divisions within a country can impact marketing efforts. For

example, in the Netherlands there are major Catholic and Protestant groups who have

their own political parties and newspapers. ...

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XTRA CREDIT ANS

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TOC

Part Chapter Description

1 1 Intro: The Global Marketing Manager

2 Global Economic environment

3 Political-Legal environment

4 Cultural Environment

5 Ethics and International Marketing

2 6 Global Marketing Research

7 Foreign Marketing Selection

8 Foreign Marketing Entry, Partner Select, Distribution

9 International Product Policy

10 International Branding, Advertising and Promotion

11 Supply Chain Management and Intl Marketing

12 International Pricing

13 Global Marketing of Services

3 14 Global Marketing Strategy

15 Planning, organization and control of International

Marketing

Characteristics of a country or market that would be useful to predict demand for a product or service.

Identify other market conditions that would impact profitability, such as political and economic risk factors.

Model for screening suitable foreign markets to rank market opportunities.

Importance of primary research to understand the opportunities and risks in a foreign market.

International Marketing 11e: Terpstra, Foley, Sarathy 11

-List of top foreign markets

-Rank opportunities

-Often neglected task -Firms often fail to do adequate research

-Firms react to market opportunities

-Don't proactively seek the best ones.

Foreign market selection is frequently done wrong

or not done at all. International Marketing 11e: Terpstra, Foley, Sarathy 12

Entering a foreign market mostly based on ‘reacting’ to opportunities or following competitors

…rather than proactively seeking the best opportunity for the firm

Costs of reactive foreign market selection include:

• Loss of first mover advantage

• Following competitors gives the competitors first mover advantage -establish their brand, set market expectations, and build strong relationships.

• Opportunity costs

• Firms cannot enter all markets simultaneously and therefore must expend resources on the markets it does enter.

• Sub-optimal market consumes resources better spent on better markets that allow the firm to earn higher returns.

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Planned approach of listing potential markets, a time frame for entering the markets, and incorporating those decisions into the international marketing plan

• Firms to select the most optimal markets by researching, anticipating market demand and ranking opportunities.

• Firms become market seekers and leaders taking advantage of first mover advantages and minimizing opportunity costs

• "How-to" research and rank foreign market opportunities.

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Potential Demand

Size of market

Population indicators

Income

Nature of the economy

Infrastructure of the nation

Entry Barriers

Tariffs and quotas (see Chapter 2)

Non-tariff barriers (see Chapter 2)

Market Risks

Political, legal, and economic risks (see Chapter 3)

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The international marketing manager can assess potential demand using the following indicators in the following areas:

Size of Market

Nature of the Economy

Infrastructure of the Nation

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Absolute size (total population)

• People (consumers) are needed to make a market

Population growth rates

• Trends (growth or decline) over time indicate future market potential

Distribution of population

• Characteristics like age, density, and gender reflect meaningful differences in the market potential

Population Indicators

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Which exchange rate?

• A number in the same unit (currency is required to compare country incomes)

• Often, the U.S. dollar is used as a common currency

• Purchasing power parity (PPP) takes into account relative price differences and purchasing power between countries

Income

National Income: GDP and GNI

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Gross Domestic Product (GDP) - measure of the total domestic value created by resident producers plus any product taxes minus any subsidies.

Gross National Income (GNI) - measure of a country’s wealth by summing the value added of all resident producers, plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad.

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Per Capita Income

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• Roughly equates to a country’s level of economic development and is a good indicator of the size or quality of a market

• Atlas and PPP measures of per capita income attempt to get better measures of the actual purchasing power in a country

• Some goods (e.g., industrial goods) may not correlate with per capita income

Income

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Exchange rate calculations may not be accurate

• Domestic value of a currency is different from its international value

It lacks comparability

• Not all goods that are counted for in a developed nation’s national income are counted for in a less-developed nation’s income

• National income does not reflect wealth because not all countries have the same sources of income

Sales of some goods have no relation to per capita income

• These goods may link more closely to households

It does not accurately reflect GDP or the potential of a product within a market

Income

Per capita income may not always be useful as a demand indicator because:

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• Even in a lower per capita income country, there may be pockets of high income that can be targeted

Income

Distribution of Income

Gini Index - also known as the Gini coefficient, this is a common indicator of income distribution such that the higher the number, the greater the income inequality between people in a country.

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• Generally, the larger and more diverse the endowments, the higher the country’s potential for favorable economic development

Physical endowment

• Important as raw materials for local production and as an indicator of favorable economic development

Natural Resources

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• Indicate physical distribution problems

• May divide the country into different markets (culturally and economically)

Topography

• Some product offerings more appropriate to some climates

• Climate may require product, packaging, and distribution modifications

Climate

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A firm’s production and marketing inside a country relies on the infrastructure of a country. Differences in infrastructure require adaptations of product, promotion, and distribution.

• Required for production and for the use of many products

• Energy production per capita is a good measure of infrastructure adequacy.

Energy

1 of 2

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• Communicate with various audiences

• May require adaptation to production and promotion

Communication

• Movement of people and goods

• Includes railways, roads, waterways, pipelines, airports, and seaports

Transportation

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Reduces the set of potential opportunities from 200-plus countries to a manageable list of researchable markets.

Converting the data into

comparable indicators

Weighing each indicator

Analyzing the

results

Identifying indicators for the selection

criteria

In-depth research, both secondary and primary, follows the screening of markets to the short list.

Market Screening in Four Steps

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1 2 3 4

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• Indicators must be accurate predictors of potential demand.

• Indicators should be focused on demand, not risk or barriers, as strategy can overcome risk and barriers but not poor demand

• (Most common failure for new products= no need)

• Five to ten market indicators

Step 1 Identifying Indicators for the Selection Criteria

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Five to ten market indicators should come from:

• Product-specific indicators (e.g., trade statistics and past sales) • Industry indicators (e.g., industry growth rates and level of competition) • Demand indicators (e.g., population, population growth rates, and density) • Income, political, and economic indicators (e.g., GDP, GDP per capita, income

distribution, and GDP growth rates) • Nature of the economy (e.g., climate, natural resources, and country size) • Infrastructure of the country (e.g., number of facilities linked to demand,

paved roads, and access to the internet)

See Table 7-4 for tips on selecting market indicators

Step 1 Identifying Indicators for the Selection Criteria

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• Data may not be in comparable units.

• For example, population data is in number of people while import statistics are in currency.

• A simple method is to convert the raw data for each indicator to a scale from 1 to 10.

Step 2 Converting the Data into Comparable Indicators

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A simple method is to convert the raw data for each indicator to a scale from 1 to 10.

• Divide each indicator by the value of the top performing country and multiply by ten such that the top country has a score of 10.

• This converts the data to the relative performance of each indicator against the top performer in that indicator.

• In some cases, the top performer may be so much larger as to skew the data. (For example, if China is included in population data, all other countries are less than 1 while China is “10”.) In these cases, it may be necessary to treat the outlying data point as a “10” but use the next highest country to create the rest of the scale (resulting in two countries with a value of “10”).

Alternatively, an average of the remaining countries could be used to create the scale.

A final approach is to rank the countries instead of using a strictly numerical approach.

Step 2 Converting the Data into Comparable Indicators

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After indicators are scaled to be comparable, each set of indicators should be weighed according to their relative importance.

• First, weighting should reflect the criticality of the indicator to demand.

• Second, weighting should promote accurate and dependent data so that potentially suspect data does not drive the market selection short list.

Step 3 Weighing Each Indicator

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The top markets do not necessarily indicate that these are the first markets a firm should enter. Instead, these are likely candidates for expansion. Rankings should be matched with the firm’s current level of international experience and its international expansion goals. Firm specific factors (e.g., current network and ability to transfer competitive advantage) play an important role.

Step 4 Analyzing the Results

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• Market screening provides a guideline for conducting detailed market research to ensure that markets have good potential while matching the needs and strategy of the firm.

• Conducting primary research is important to answer detailed questions that cannot be answered by secondary measures

• Meet potential partners and learn about the markets.

• More detailed secondary sources such as the U.S. Department of Commerce “Country Commercial Guides” and Euromonitor reports =in-depth market information.

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