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国际营销课后习题



Chapter 1 2、“. . . the marketer’s task is the same whether applied in Dime Box, Texas, or Dar es Salaam, Tanzania.” Discuss. The only difference between domestic marketing and international marketing is that the activities take place in more than one country. Therefore, the marketing task is the same throughout the world.

3、How can the increased interest in international marketing on the part of the U.S. firms be explained? Increased interest has been brought about because of changing competitive structures, coupled with shifts in demand characteristics throughout the world. The U.S. market has reached saturation levels for many products, and increasing numbers of firms are faced with surpluses which must be sold. Also, many firms find that return on investment may be higher in foreign markets than in domestic markets. Finally, more and more firms realize that tomorrow’s markets will be world markets and it is imperative that they establish world market positions early.

4、Discuss the four phases of international marketing involvement. The first phase includes those domestic firms which have no foreign business activity except those sales made to foreign customers who come directly to the firm. The second phase includes domestic firms which have temporary surpluses which are sold abroad. Therefore, sales are made on an availability basis with little or no intention for continuing market representation. The third phase includes the domestic firms that have permanent productive capacity which is utilized to produce goods which are sold on a continuing basis in foreign markets. The fourth phase includes the international company that produces a product for the world market.

5、Discuss the conditions that have led to the development of global markets. According to the Professor Levitt and others who suggest that there is a global market for goods, this phenomenon has resulted from new communications technology, travel and other factors which have led to the markets of the world being more aware of different products and processes. As a result of this awareness, there are segments in each market who have had similar experiences and thus have common needs. These common

needs are described as a demand for high quality, reasonably priced, standardized products. There is a strong feeling that within each country’s market there is a growing segment that has been exposed to ideas from around the world and thus have had their tastes and perceived needs affected. There is a strong feeling that world markets are being driven toward a converging commonality of taste and needs leading toward global markets.

6、Differentiate between a global company and a multinational company. The main distinction between a global and a multinational company is that a global company assumes there are segments across countries which have the same needs and wants and designs a standardized, high quality, reasonably priced product for those segments and markets it as if there are no differences among the country markets. On the other hand, a multinational company operates in a number of countries and adjusts its products and marketing practices for each market. The multinational company has a specific marketing plan and adapts products for each country market. The philosophy for the multinational company is that there are cultural differences among countries that require specific adaptations for those markets. This is contrasted with the global company which sees the entire world, or major regions of it, as a single entity requiring no specialized adjustments. This distinction may be more myth than fact and reflects Professor Levitt’s opinion.

7、Differentiate among the three international marketing concepts. Companies can be described by one of three orientations to international marketing management: 1. Domestic Market Expansion Concept 2. Multi-Domestic Market Concept 3. Global Marketing Concept It is expected that differences in the complexity and sophistication of a company’s marketing activity depend on which of these orientations guides its operations. The Domestic Market Extension Concept. The domestic company that seeks sales extension of its domestic products into foreign markets illustrates this orientation to international marketing. It views its international operations as secondary to and an extension of its domestic operations. The primary motive is to dispose of excess domestic production. Domestic business is its priority and foreign sales are seen as a profitable extension of domestic operations. While foreign markets may be vigorously

pursued, the orientation remains basically domestic. Its attitude toward international sales is typified by the belief that if it sells in Peoria it will sell anywhere else in the world. Minimal, if any, efforts are made to adapt the marketing mix to foreign markets. The firm’s orientation is to market to foreign customers in the same manner the company markets to domestic customers. It seeks markets where demand is similar to the home market and its domestic product will be acceptable. This Domestic Market Expansion Strategy can be very profitable. Large and small exporting companies approach international marketing from this perspective. Multi-Domestic Market Concept. Once a company recognizes the importance of differences in overseas markets and the importance of offshore business to their organization, its orientation toward international business may shift to a Multi-Domestic Market Strategy. A company guided by this concept has a strong sense that country markets are vastly different (and they may be, depending on the product) and that market success requires an almost independent program for each country. Firms with this orientation market on a country-by-country basis with separate marketing strategies for each country. Subsidiaries operate independently of one another in establishing marketing objectives and plans. The domestic market and each of the country markets have separate marketing mixes with little interaction among them. Products are adapted for each market with minimum coordination with other country markets, advertising campaigns are localized as are the pricing and distribution decisions. A company with this concept does not look for similarity among elements of the marketing mix that might respond to standardization. Rather, it aims for adaptation to local country markets. Control is typically decentralized to reflect the belief that the uniqueness of each market requires local marketing input and control. Global Marketing Concept. A company guided by this new orientation or philosophy is generally referred to as a global company, its marketing activity is global marketing, and its market coverage is the world. A company employing a Global Marketing Strategy strives for efficiencies of scale by developing a standardized product, of dependable quality, to be sold at a reasonable price to a global market (that is, the same country market set throughout the world). Important to the Global Marketing Concept is the premise that world markets are being ―driven toward a converging commonalty‖ that seek much the same ways to satisfy their needs and desires and thus, constitute significant market segments with similar demands for the same product the world over. With this orientation a company attempts to standardize as much of the company effort as is practical on a world-wide basis. Some decisions are viewed as applicable worldwide, while others require consideration of local influences. The world as a whole is viewed as the market and the firm develops a global marketing strategy.

9、Discuss the three factors necessary to achieve global awareness. The three factors necessary to achieve global awareness are: 1) objectivity; objective in assessing opportunities, evaluating potential, and responding to problems. Too often mistakes are made because companies are swept away with generalities and make investments only later to find out that their commitment or abilities were not sufficient to succeed, 2) tolerance toward cultural differences; tolerance is understanding cultural differences and accepting and working with others whose behavior may be different from yours, 3) knowledgeable; knowledgeable about cultures, history, world market potentials, and global economy and social trends is critical for a person to be culturally aware. To be successfully in international business and globally aware, a person needs to keep abreast of the enormous changes occurring throughout the world. The 21st century will usher in great change and opportunities. The knowledgeable marketer will identify those opportunities long before it becomes evident to others.

10、Define and discuss the idea of global orientation. A global orientation means operating as if all the country markets in a company’s scope of operations (including domestic market) are approachable as a single global market and to standardize the marketing mix where culturally feasible and cost effective or to adapt the marketing mix where culturally required and cost effective. A global orientation does not mean to follow a single strategy of standardization without regard for cultural differences nor does it imply that the marketing effort must be adapted to every cultural difference. Instead, it means looking for market segments with similar demands that can be satisfied with the same product, standardizing the components of the marketing mix that can be standardized, and, where there are significant cultural differences that require parts of the marketing mix to be culturally adapted, adapting.

Chapter 2:
2. The Tokyo Round of GATT has emphasized the reduction of nontariff barriers. How does the Uruguay Round differ? 东京回合关贸总协定强调非 关税壁垒的减少。如何在乌拉圭回合有什么不同? Nontariff barriers are all the restrictions imposed on the importation of goods by a host government with the exception of tariffs. Such things as standards, quotas, import licenses, countervailing duties, border taxes can be classified as nontariff barriers. The Tokyo Round considered nontariff

barriers as having become one of the major deterrents to international trade. Earlier rounds of negotiations by GATT members had been successful in reducing tariffs but nontariff barriers are considered to be insidious protectionist devices and the Tokyo Round focused on the reduction of nontariff barriers. The Tokyo Round made a good start at addressing a number of nontariff barriers that have become more serious in recent years. Despite the success of these past rounds, high tariffs have not disappeared entirely and nontariff barriers are still widely used. There are also areas that, until now, GATT has not addressed such as services, intellectual property rights, and investment. Specifically, GATT negotiations in this round are to address key areas of importance in international trade which are not now under the scope of GATT rules. For example, GATT rules do not apply to the international trade of services which represent an increasing percentage of international trade flows. Similarly, GATT rules have little influence over government investment policies affecting international trade or on policies concerning the protection of intellectual property rights such as patents, trademarks, and copyrights. Agricultural trade is another area where GATT rules either do not apply or are not effective. Finally, the dispute settlement mechanism is seen to be increasingly ineffective at resolving conflicts among GATT members.

3. Discuss the impact of GATS, TRIMS, AND TRIPS on global trade.
讨论服务贸易总协定,TRIMS 的知识产权协议对全球贸易的影响

An important objective of the United States in the Uruguay Round was to reduce or eliminate barriers to international trade in services. While there is still much progress to be made before free trade in services will exist throughout the world, the General Agreement on Trade in Services (GATS) is the first multilateral, legally enforceable agreement covering trade and investment in services sector. It provides a legal basis for future negotiations aimed at eliminating barriers that discriminate against foreign services trade and deny them market access. For the first time, comprehensive multilateral disciplines and procedures covering trade and investment in services have been established. Specific market-opening concessions from a wide range of individual countries were achieved and provision was made for continued negotiations to further liberalize telecommunications and financial services. Equally significant were the results of negotiations in the investment sector. Trade-Related Investment Measures (TRIMs), established the basic principle that investment restrictions can be major trade barriers and therefore are included, for the first time, under GATT procedures. An initial set of specific practices were prohibited including: local content requirements

specifying that some amount of the value of the investor’s production must be purchased from local sources or produced locally; trade balancing requirements specifying that an investor must export an amount equivalent to some proportion of imports or condition the amount of imports permitted on export levels; and, foreign exchange balancing requirements limiting the importation of products used in local production by restricting its access to foreign exchange to an amount related to its exchange inflow. As a result of TRIMs, restrictions in Indonesia which prohibit foreign firms from opening their own wholesale or retail distribution channels can be challenged. And so can investment restrictions in Brazil that require foreign-owned manufacturers to buy most of their components from high-cost local suppliers and that affiliates of foreign multinationals maintain a trade surplus in Brazil’s favor by exporting more than they sell within. Another objective of the United States from the Uruguay Round was achieved by an agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). The TRIPs agreement establishes substantially higher standards of protection for a full range of intellectual property rights (patents, copyrights, trademarks, trade secrets, industrial designs, and semiconductor chip mask works) than are embodied in current international agreements and it provides for the effective enforcement of those standards both internally and at the border.

4. Discuss the evolution of world trade that has led to the formulation of the WTO.讨论世界贸易已经导致了世界贸易组织制定的演变 Since the inception of GATT, there have been eight ―rounds‖ of intergovernmental tariff negotiations. The most recently completed was the Uruguay round which built on the success of the Tokyo Round, the most comprehensive and far-reaching round undertaken by GATT up to that time. The Tokyo Round resulted in tariff cuts and set new international rules for subsidies and countervailing measures, anti-dumping, government procurement, technical barriers to trade (standards), customs valuation, and import licensing. While the Tokyo Round addressed non-tariff barriers, there were some areas not covered by that round which continued to impede free trade. In addition to market access, there were issues of trade in services, agriculture, and textiles; intellectual property rights; and investment and capital flows. . The Uruguay Round was begun in 1986 in Punta del Este, Uruguay and finally concluded in 1994. By 1995, 80 GATT members including the United States, the European Union (and it member states) Japan, and Canada had accepted the agreement. Perhaps the most notable achievement of the Uruguay Round was the creation of a new institution as a successor to the GATT, the World Trade Organization (WTO). At the signing of the Uruguay

Round trade agreement, U.S. representatives pushed for an enormous expansion of the definition of trade issues. The result was the creation of the World Trade Organization that encompasses the current GATT structure and extends it to new areas not adequately covered in the past. The WTO is an institution—not an agreement as was GATT. It will set the rules governing trade between its 117 members, provide a panel of experts to hear and rule on trade disputes between members and, unlike GATT, issue binding decisions. It will require for the first time, the full participation of all members in all aspects of the current GATT and the Uruguay Round agreements and, through its enhanced stature and scope, provide a permanent, comprehensive forum to address the trade issues of the 21st century global market. Trade disputes will be heard by a panel of experts. A panel of experts, selected by the WTO, will hear both sides and issue a decision; the winning side will be authorized to retaliate with trade sanctions if the losing country does not change its practices. While the WTO has no actual means of enforcement, international pressure to comply with WTO decisions from other member countries is expected to force compliance. The WTO ensures that member countries agree to the obligations of all the agreements, countries, including developing countries (the fastest growing markets of the world) will undertake obligations to open their markets and to be bound by the rules of the multilateral trading system. The GATT has had a long and eventful history. Visit http://www.wto.org/wto/about/about.html and write a short report on the various Rounds of GATT. What were the key issues addressed in each round? This exercise is designed to familiarize the student with the Internet and issues GATT as well as the WTO. In addition to the various Rounds of GATT, this site is a complete discussion of WTO. The discussion of this question could include a broader discussion of WTO.

5. U. S. exports to the European Community are expected to decline in

future years. What marketing actions may a company take to counteract such changes? 美国出口到欧盟,预计在未来几年下降。什么样的营
销行为可能一个公司采取抵制这样的变化?

An economic unity such as the EC is primarily concerned with increases of trade within its member-countries because they want to raise their own production and gain through economic growth that their specialized members can supply. It may be said that the EC wants to decrease their trade with nonmember nations. One study has shown some proportional declines already. What the U.S. marketer should do to counteract such actions is to, as rapidly as possible, expand exports to this market. More important, the

marketers should build new and expand EC-located, U.S.-owned industries and marketing facilities to strengthen their position before it becomes too late. EC members are now busy building new plants and establishing their outlets and markets. From the U.S. foreign marketer’s point of view, there is no time to waste, otherwise they will lose some of the grip they have established in Europe. Also, keeping in mind that many other Western European countries are again interested in joining EC. The typical argument: ―It will be too expensive to stay outside.‖ A sound policy for American companies wanting or dependent upon marketing in the European market might increase their potential in EFTA.

6. Discuss the implications of the European Union’s decision to admit Eastern European nations to the group.讨论欧盟决定承认东欧国家的群体的
影响

The admission of Eastern European nations into the EU will create an ever larger and more economically important than the present EU. The globalization of markets, the restructuring of Eastern Europe into independent market-driven economies, the dissolution of the Soviet Union into independent states, the worldwide trend toward economic cooperation, and enhanced global competition make it important that market potential be viewed in the context of regions of the world rather than country by country. Formal economic cooperation agreements such as the EC are the most notable examples of multinational market groups but many new coalitions are forming, old ones are being re-energized, and the possibility of many new cooperative arrangements is on the horizon. 7、“Because they are dynamic and because they have great growth possibilities, the multinational markets are likely to be especially rough-and-tumble for the external business.” Discuss.因为它们是动态的,
因为他们有很大的增长的可能性,跨国市场很可能是特别粗糙和混乱的外部业务。 “讨论。

The attractive growth and profit opportunities in multinational markets tend to draw the more aggressive marketers into competition. Whereas, a company may have virtually no competition in its home market, it may be competing with three or four major firms in the multinational market. National interest gives preferential treatment of various types to firms from member nations and intensifies the normal market competition. 8、Discuss the strategic marketing implications of the Canada-United States-Mexico Free Trade Agreement.讨论加拿大 - 美国 - 墨西哥自由贸易协定
的战略营销的影响。

NAFTA affects a variety of strategic issues, the most important of which are: Market Access. Within 10 years of implementation, all tariffs will be eliminated on North American industrial products traded between Canada, Mexico, and the United States. All trade between Canada and the U.S. not already duty free will be duty free by 1998 as provided for in CFTA. Mexico will immediately eliminate tariffs on nearly 50 percent of all industrial goods imported from the U.S., and remaining tariffs will be phased out entirely within 15 years. Nontariff Barriers. In addition to elimination of tariffs, Mexico will eliminate nontariff barriers and other trade-distorting restrictions. U.S. exporters will benefit immediately from the removal of most import licenses that have acted as quotas essentially limiting the importation of products into the Mexican market. NAFTA also eliminates a host of other Mexican barriers such as local content, local production, and export performance requirements that have limited U.S. exports. Rules of Origin. NAFTA reduces tariffs only for goods made in North America. Tough rules of origin will determine whether goods qualify for preferential tariff treatment under NAFTA. Rules of origin are designed to prevent ―free riders‖ from benefiting through minor processing or transshipment of non-NAFTA goods. For example, Japan could not assemble autos in Mexico and avoid U.S. or Canadian tariffs and quotas unless the auto had a specific percentage of Mexican (i.e., North American) content. For goods to be traded duty free, they must contain substantial (62.5 percent) North American content. Since NAFTA rules of origin have been strengthened, clarified, and simplified over those contained in the U.S.-Canada Free Trade Agreement, they supersede the CFTA rules. Customs Administration. Under NAFTA, Canada, Mexico, and the U.S. have agreed to implement uniform customs procedures and regulations. Uniform procedures ensure that exporters who market their products in more than one NAFTA country will not have to adapt to multiple customs procedures. Most procedures governing rules of origin documentation record keeping, and origin verification will be the same for all three NAFTA countries. In addition, the three will issue advanced rulings, on request, on whether or not a product qualifies for tariff preference under the NAFTA rules of origin. Investment. NAFTA will eliminate investment conditions that restrict the trade of goods and service to Mexico. Among conditions eliminated are the requirements that foreign investors export a given level or percentage of goods or services, use domestic goods or services, transfer technology to competitors, or limit imports to a certain percentage of exports.

Services. NAFTA establishes the first comprehensive set of principles governing services trade. U.S. and Canadian financial institutions are permitted to open wholly owned subsidiaries in Mexico, and all restrictions on the services they offer will be lifted by the year 2000. U.S. and Canadian trucking companies are able to carry international cargo into Mexican border states and, by 1999, they will be able to truck throughout Mexico. Intellectual Property. NAFTA will provide the highest standards of protection of intellectual property available in any bilateral or international agreement. The agreement covers patents, trademarks, copyrights, and trade secrets, semiconductor integrated circuits, copyrights for North American movies, computer software, and records. Government Procurement. NAFTA guarantees businesses fair and open competition for procurement in North America through transparent and predictable procurement procedures. In Mexico, Pemex (national oil company), CFE (national electric company), and other government-owned enterprises will be open to U.S. and Canadian suppliers. Standards. NAFTA prohibits the use of standards and technical regulations used as obstacles to trade. However, NAFTA provisions do not require the United States or Canada to lower existing health, environmental, or safety regulations, nor does NAFTA require the importation of products that fail to meet each country’s health and safety standards.

9. Discuss the economic and trade importance of the big emerging markets. 讨论了大型新兴市场的经济和贸易中的重要性。 The Department of Commerce estimates that over 75 percent of the expected growth in the world trade over the next two decades will come from the more than 130 developing and newly industrialized countries (NICs). There is a small core of these that will account for over half of that growth. They predict that the countries identified as Big Emerging Markets (BEMs) alone will be a bigger import market by the end of this decade than the European Union and by the year 2010, will be importing more than the EU and Japan combined. The BEMs differ from other developing countries because they import more than smaller markets an more than economies of similar size. As they embark on economic development, demand for capital goods to build their manufacturing base and develop infrastructure increases. Increased economic activity means more jobs and more income to spend on products not yet produced locally. Thus, as their economies expand, there is an accelerated growth in demand for goods and services, much of which must be imported. BEM merchandise imports are expected to be nearly one trillion dollars higher than they were in 1990; if services are added, the amount jumps beyond one trillion dollars.

Chapter 3
2. Why study geography in international marketing? Discuss. Geography is a study of the physical characteristics of a particular region of the earth. Involved in this study are climate, topography, and population. The interaction of the physical characteristics is one of the principal determinants of a country’s customs, products, industries, needs, and methods of satisfying those needs. Marketing is concerned with satisfying the needs of people. International marketing seeks out the whole world as its marketplace. Therefore, for an international marketer to know how to satisfy the needs of the international market, he must be familiar enough with geography to know what the various causal factors of the people’s needs are. He must know that various climates and topographies do exist and that they are vital in shaping the marketing plans that an international marketer must make. As an example, a producer selling machinery in the tropics would have to realize that special protection is needed to keep a machine running properly in hot and humid climates.

3.

Why study a country’s history? Discuss

History helps define a nation’s ―mission,‖ how it perceives its neighbors, how it sees its place in the world, and how it sees itself. Insights into the history of a country are important for understanding attitudes about the role of government and business, the relations between managers and the managed, the sources of management authority, and attitudes toward foreign corporations. To understand, explain, and appreciate a people’s image of itself and the attitudes and unconscious fears that reflected in its view of foreign cultures, it is necessary to study the culture as it is now as well as to understand the culture as it was—that is, a country’s history. Unless you have a historical sense of the many changes that have buffeted Japan—seven centuries under the shogun feudal system,i the isolation before the coming of Admiral Perry in 1853, the threat of domination by colonial powers,ii the rise of new social classes, Western influences, the humiliation of World War II, and involvement in the international community—it is difficult to fully understand its contemporary behavior. Loyalty to family, to country, to company, and to social groups and the strong drive to cooperate, to work together for a common cause, permeate many facets of Japanese behavior and have historical roots that date back thousands of years. Loyalty and service, a sense of responsibility, and

respect for discipline, training, and artistry have been stressed since ancient times as necessary for stability and order. Confucian philosophy, taught throughout Japan’s history, emphasizes the basic virtue of loyalty ―of friend to friend, of wife to husband, of child to parent, of brother to brother, but, above all, of subject to lord,‖ that is, to country. A fundamental premise of Japanese ideology reflects the importance of cooperation for the collective good. Japanese achieve consensus by agreeing that all will unite against outside pressures that threaten the collective good. A historical perspective gives the foreigner in Japan a basis on which to begin developing cultural sensitivity and a better understanding of contemporary Japanese behavior. 4、How does an understanding of history help an international marketer? 1. To understand, explain, and appreciate a people’s image of itself and the fundamental attitudes and unconscious fears that are often reflected in its view of foreign cultures, it is necessary to study the culture as it is now as well as to understand culture as it was, that is, a country’s history. An awareness of the history of a country is particularly effective for understanding attitudes about the role of government and business, the relations between managers and the managed, the sources of management authority, and attitudes toward foreign MNC’s. History is what helps define a nation’s ―mission,‖ how it perceives its neighbors, and how it sees its place in the world. To understand a country’s attitudes, prejudices, and fears it is necessary to look beyond the surface or current events to the inner subtleties of the country’s entire past for clues. 5. Why is there a love/hate relationship between Mexico and the United States? Discuss. A crucial element in understanding any nation’s business and political culture is the subjective perception of its history. To a Mexican, the United States is seen as a threat to their political, economic, and cultural independence. To most citizens in the United States, the causes for such feelings are a mystery. After all, the U.S. has always been Mexico’s ―good neighbor.‖ Most would agree with President Kennedy’s proclamation during a visit to Mexico, ―Geography has made us neighbors, tradition has made us friends.‖ North Americans may be surprised to learn that most Mexicans felt it more accurate to say, ―Geography has made us closer, tradition has made us far apart.‖ North Americans feel they have been good neighbors. They see the Monroe Doctrine as protection for Latin America from European colonization and the intervention of Europe in the governments of the Western Hemisphere. Latin Americans tend to see the Monroe Doctrine as an offensive expression of U.S. influence in Latin America. Or to put it

another way, ―Europe keep your hands off, Latin American is only for the United States.‖ United States Marines sing with pride of their exploits ―form the Halls of Montezuma to the shores of Tripoli.‖ To the Mexican, the ―Halls of Montezuma‖ is remembered as U.S. troops marching all the way to the center of Mexico City and extracting as tribute 890,000 square miles that included Texas, New Mexico, Arizona and California. Most U.S. citizens probably do not know of the boy heroes of Chaptultepec Park but every Mexican can recount the heroism of ―Los Ninos Heroes,‖ and the loss of Mexican territory to the United States.
在了解任何国家的商业和政治文化的一个重要内容是主观的历史认知。到墨西哥,美国被看 作是对他们的政治,经济,文化的独立性构成威胁。对于大多数公民在美国,原因这样的感 情是一个谜。毕竟,美国一直是墨西哥的“好邻居” 。大多数人会在访问墨西哥期间,肯尼 迪总统宣布同意“,地理,使我们的邻国,传统,使我们的朋友。 ”北美人可能会惊讶地 得知, 大多数墨西哥人认为它更准确的说,“地理使我们更接近, 传统, 使我们相距甚远。 ” 北美国人觉得他们已经好邻居。 他们看到了门罗主义为保护拉丁美洲从欧洲殖民化和欧洲在 西半球的政府干预。拉美人往往看到门罗主义作为美国的影响力在拉美地区的进攻表现。或 者换一种说法, “欧洲保持你的手拿开,拉丁美洲仅适用于美国。 ” 美海军陆战队员一起唱他们的功勋的骄傲“形成蒙特祖玛的大厅到的黎波里的海岸。 ”到 了墨西哥, 在 “大厅蒙特祖玛的” 被记住, 美军踏着一路墨西哥城的中心, 作为提取贡 890,000 平方英里,其中包括德克萨斯州,新墨西哥州,亚利桑那州和加利福尼亚州。大多数美国公 民可能不知道 Chaptultepec 公园男孩的英雄,但每一个墨西哥人可以各显神通的“青年英 雄”和墨西哥境内流失到美国的英雄气概。

6. Some say the global environment is a global issue rather than a national one. What does this mean? Discuss. Many view the problem as a global issue rather than a national one. One report on the global environment stressed . . . ―it is quite clear that a number of critical problems—the threat to the ozone layer, the greenhouse effect, the loss of biodiversity, and ocean pollution—cannot be addressed by nations in isolation.‖ Companies looking to build manufacturing plants in countries with more liberal pollution regulations than they have at home are finding that regulations everywhere are becoming stricter. Many Asian governments are drafting new regulations and strictly enforcing existing ones. A strong motivator for Asia and the rest of the world is the realization that pollution is on the verge of getting completely out of control. Neither Western Europe nor the rest of the industrialized world are free of environmental damage; rivers are polluted and the atmosphere in many major urban areas is far from clean. The very process of controlling industrial wastes leads to another and perhaps equally critical issue: the disposal of hazardous waste, a by-product of pollution control. Estimates of hazardous wastes collected annually exceed 300 million tons; the critical question is disposal that does not move the problem elsewhere.

The business community is responding positively to the notion that the focus must be on the global environment rather than ―the quality of the air, land, and water in our own backyards.‖ An International Chamber of Commerce Industry Forum on the environment reflected a shift in company attitudes toward environmental issues away from a reactive and largely defensive stance to a proactive and constructive approach. Some skeptics may dismiss such statements as ―window dressing‖ and they could be, but the beginning of change is awareness. Responsibility for cleaning up the environment does not rest solely with governments, businesses, or activist groups. Each citizen has social and moral responsibility to include environmental protection among his/her highest goals. 7. 8。略 9. Discuss the bases of world trade. Give examples illustrating the different bases. 2. The basis for world trade is the differences between countries. One of these differences is the difference between people. Different heritages have resulted in the development of certain unique skills in the people of a country. An example would be the watchmaking skill developed by the Swiss. Thus, they have a unique skill on which to base trade. Another difference is the one of differing stages of economic development existing in the world today. Some countries are highly developed and industrialized. These nations, such as the United States and France, might be trading in luxuries, whereas an underdeveloped nation, such as Kenya, might be forced to trade only in essential capital goods. A third difference in countries serving as a basis for world trade is the availability of natural resources. Great Britain, poor in mineral resources, imports petroleum, where West Germany, rich in mineral resources but not food, imports large amounts of fruits and vegetables. Thus, trade is created by these differences: (1) Differences in skills – other countries seek the products of skills, (2) differences in economies – countries seek products they don’t produce but need, and (3) differences in na tional resources – countries buy and sell resources which they do not have or have an abundance of. 10. The marketer “should also examine the more complex effect of geography upon general market characteristics, distribution systems, and the state of the economy.” Comment. There can be no doubt that geography has had a ―complex effect upon general market characteristics, distribution systems, and the state of the economy.‖ Therefore, the world marketer should be careful not to look just at how his product must be changed to fit into a foreign market. That is, he

must not just fit his electric motors, say, with high-temperature operating characteristics and stop there. There’s more to it than that. Consider the diverse nature of South America, for example. The channels of distribution that a domestic marketer has been accustomed to using might not even exist because of natural barriers. These same natural barriers also cause quite varied levels of economic development within the same country. Cities and rural areas might not even be on the same economic plane. Finally, as a result of these barriers and thus physical isolation of various population centers, areas of the same economic development might have entirely different cultures. Therefore, the general market characteristics of these areas would also differ greatly and have a direct effect upon the success of marketing plans.

11.

The world population pattern trend is shifting from rural to urban areas. Discuss the marketing ramifications

There are many marketing ramifications to the world rural-urban population shift. One of the obvious ones is that the world market is becoming more unified in location. Thus, it is becoming easier to reach a larger segment of the market by just marketing in the urban population centers. The types of products marketed will also change with this population shift. For example, food might become a more important product in international marketing with few people raising their own. Similarly, these shifts will result in greater industrialization in countries with presently low levels of industrialization. This again implies marketing changes that might affect the world marketer, increased sales of capital goods, for example. In summary, people living in cities have different needs than those living in the country. Thus, the shift from country to city means that the world marketer has a different market to serve with different characteristics.

12.14

Library Project

13. “. . . world trade routes bind the world together . . .” Discuss. World trade routes bind the world together. This statement means that the world trade routes serve as avenues of minimizing differences between countries. Without these routes, countries would stand alone – each different from the rest in resources, economy, and people. The trade routes allow both people and products to flow, making more of a unified, balanced world. The physical imbalances overcome, also smooth, cultural and economic differences through the exchange of ideas as well as products.

15.

The telegraph, telephone, television, satellites, computer, and the Internet have all had an effect on how international business operates. Discuss how each of these communications innovations affects international business management.

An underpinning of all commerce is effective communications, knowledge of where goods and services exist and where they are needed and the ability to communicate instantaneously across vast distances. Facilitating the expansion of trade have been continuous improvements in electronic communications. First came the telegraph, then the telephone, television, satellites, the computer and the Internet. Each revolution in electronic technology has had a profound effect on human conditions, economic growth and the manner in which commerce functions. As each ―new‖ communications technology has had its impact, new business models have been spawned and some existing businesses re-invented to adapt to the new technology while other businesses have failed to respond and thus ceased to exist. The Internet revolution will be no different; it too affects human conditions, economic growth, and the manner in which commerce operates. As we will discuss in subsequent chapters, the Internet has already begun to shape how international business is managed. However, as the Internet permeates the fabric of the world’s cultures, the biggest changes are yet to come!

Chapter 4
2. Which role does the marketer play as a change agent? Whether or not the marketer is aware of it, he assumes the role of a change agent when he introduces into another culture new ideas or new products requiring some form of change in behavior for acceptance and use of the new idea or product. The international marketer must concern himself with the impact of his actions upon the new culture.

3. Discuss the three cultural change strategies a foreign marketer can pursue. There are three strategies. (a) Culturally congruent strategy, (b) Strategy of unplanned change, (c) Strategy of planned change. The culturally congruent strategy involves marketing products similar to ones already on the market in a manner as congruent as possible with existing cultural norms, thereby minimizing resistance. A strategy of planned change means deliberately setting out to change those aspects of a culture most likely to offer resistance to predetermined marketing goals. The strategy of unplanned change consists of introducing an innovation and then waiting for an eventful cultural change that will permit the culture to accept the innovation. The essence of unplanned change lies in the fact that the marketer does nothing to accelerate or help to

bring about the necessary change where the marketer deliberately sets about to overcome resistance and to cause change that will accelerate the rate of adoption of his product or innovation.

4. “Culture is pervasive in all marketing activities.” Discuss. Marketers are constantly in the process of adjusting their efforts to the demands of the culture of their markets. Although in the long run they may affect their market’s culture as a result of their efforts, most current activity involves reconciling marketing activity to the immediate culture.

5. What is the importance of “cultural empathy” to the foreign marketer? How does he or she acquire “cultural empathy?” The importance of ―cultural empathy‖ to the foreign marketer is that being culturally sensitive allows him or her to objectively see, evaluate, and appreciate another culture. A marketer can obtain cultural empathy by studying the culture and living with it. The latter is not always possible, and it may be expedient to hire natives who speak your tongue and their own. This procedure will often give you the intuition which is necessary for success.

6. Why should a foreign marketer be concerned with the study of culture? A foreign marketer should study culture in order to avoid making blunders which would not be made if he or she had cultural knowledge. Culture should be studied because it affects the consumer’s desire and abilit y to buy.

7. What is the popular definition of culture? What is the viewpoint of cultural anthropologists? What is the importance of the difference? The popular definition of culture is that a person is either ―cultured‖ or ―uncultured‖ according to his or her ability in certain specialized fields of knowledge. The cultural anthropologist defines culture as ―all the knowledge, beliefs, and skills he or she acquires as a member of society.‖ The importance to the marketer of the differences between these two definitions is the fact that the anthropologist’s definition includes all parts of life, and all of these parts affect a consumer’s desire and ability to pay for a product.

8. It is stated that members of a society borrow from other cultures to solve problems that they face in common. What does this mean?

What is the significance to marketing? Cultural borrowing entails using the best solutions to a problem that different cultures face. This best solution, borrowed by one culture from another, is incorporated into the borrowing culture’s system, and becomes part of their cultural heritage. This fact is significant to the marketer because although the solutions to the problems are similar they are put together in a unique manner which is strictly American, Chinese, French, etc. In realizing the ―similar but different‖ aspect of culture, the marketer is aided in gaining cultural empathy.

9. “For the inexperienced marketer, the “similar but different” feature of culture creates an illusion of similarity which usually does not always exist.” Discuss and give examples. Although some cultures seem similar, they most likely are not. For example, two different countries speaking the same language may use words or phrases which are acceptable to one, but totally unacceptable to the other. Some cultures may have subcultures in which the ―similar but different‖ principle applies.

10. Outline the elements of culture as seen by an anthropologist. How can a marketer use this “cultural scheme?” a. Material Culture 1. 2. Technology Economics

b. Social Institutions 1. 2. 3. Social organizations Education Political structures

c. Man and the Universe 1. Belief systems

d. Aesthetics 1. 2. 3. Graphic and plastic arts Folklore Music, drama, and the dance

e. Language The foreign marketer may use the above outline of cultural elements (1) to provide a meaningful framework to use in evaluating a marketing plan or in

studying the potential of a foreign market, (2) to point out those things which must be learned about the culture of the people since most of these elements are reacted to automatically in a cultural system, (3) as factors with which the market interacts and which are basic in the understanding of the character of the marketing system of any society

11. Social institutions affect marketing in a variety of ways. Discuss, give examples. Social institutions affect marketing because they regulate the consumer’s behavior and attitudes by organizing his activities and teaching him acceptable behavior. Examples of social institutions affecting marketing are the literacy rate as a function of education, the strength of the family unit, and political acceptance or hindrance of marketing activities.

12. “Markets are the result of the triune interaction of a marketer’s efforts, economic conditions, and all other elements of the culture.” Comment. This statement emphasizes the point that markets evolve out of the interrelationship of three major factors. They are a marketer’s efforts, economic conditions and all the other elements of the culture. Marketers are constantly in the process of adjusting their efforts to cultural demands of the market, but they are also agents of change whenever the product or idea being marketed is innovative. Whatever the degree of acceptance and whatever level of culture is, the use of something new is the beginning of cultural change and the marketer becomes a change agent. This statement is important because it emphasizes the fact that the marketer is not a passive influence in a culture and that, while the marketer attempts to react to cultural demands, in so doing the marketer also influences cultural change.

13. What are some particularly troublesome problems caused by language in foreign marketing? Discuss. Language poses some difficult problems in foreign marketing not merely because of the obvious differences in tongues, but because the idiomatic interpretations mean something different than what the marketer had intended. Examples of this are ―Body by Fisher‖ which translates to ―Corpse by Fisher‖ and ―Let Hertz Put You in the Drivers Seat‖ which translates to ―Let Hertz Make You a Chauffeur.‖

14、17、19 略

15、Cultures are dynamic. How do they change? Are there cases where change is not resisted but actually preferred? Explain. What is the relevance to marketing? Cultures change gradually with resistance to changes. The resistance varies inversely with the interest a society has in the change. Culture doesn’t resist change if the product is a status-valued imported item, a fashion item, or is given the advantage of inferior feelings about local products. Marketers can expect resistance to their products, with greater resistance to those products with the greatest deviation from the cultural norm or status quo.

16、 How can resistance to cultural change influence product introduction. Are there any similarities in domestic marketing? Explain, giving examples. Resistance to cultural change will affect new product introduction in the respect that the greatest resistance will confront products which are farthest from the status quo, but this resistance can be lowered by gaining public interest. Lowering resistance in this situation means shortening the duration of the resistance. Domestic marketing is subject to the same resistance to change. Examples of this resistance in the domestic market are the introduction of contact lenses and using motorcycles as an acceptable means of recreation. 18、Defend the proposition that a MNC has no responsibility for the consequences of an innovation beyond the direct effects of the innovations such as the product’s safety, performance, and so forth. It would be difficult to defend this proposition since the dysfunctional consequences of an innovation may not only have negative consequences on the social system but may ultimately impact on the success of the multinational concern. While most multinational companies have not concerned themselves with the consequences of an innovation beyond product safety, it appears that in the future there will be greater concern on the part of host countries in holding companies responsible for the consequences of their marketing activities. It would seem that from an enlightened self-interest viewpoint, companies should attempt to determine the consequences of their innovations, and should they prove to be dysfunctional, include in their marketing strategies attempts to eliminate the negative aspects of the acceptance of diffusion of their product.

Chapter 5
2. “More than a toleration of an alien culture is required . . . there is a need for affirmative acceptance as different but equal.” Elaborate. Adaptation is one of the key concepts for success in international marketing. Through this ―affirmative acceptance as different but equal,‖ adaptation becomes easier. One gains an appreciation of the outlook of those with whom one is dealing.

3. “We should also bear in mind that in today’s business-oriented world economy, the cultures themselves are being significantly affected by business activities and business practices.” Comment. The business activities and the culture of a nation are intermixed. A change in one results in a change in another. When a foreign culture encounters the domestic culture, there is a mixing of cultures. When a foreign business encounters another, the result is the same because business and culture are inextricably intertwined.

4. “In dealing with foreign businesses, the marketer must be particularly aware of the varying objectives and aspirations of management.” Explain. The marketer cannot judge what he feels that the objectives of management of a foreign firm are by what they are in a similar firms of his own country. With every firm in our country, the objectives and aspirations of management are different. Therefore, it is quite likely that they are quite different in foreign countries. The marketer must deal with a company in a way to correspond with the objectives of the company, or it is possible that he might lose his dealings with that company.

5. Suggest ways in which persons might prepare themselves to handle unique business customs that may be encountered in a trip abroad. The businessman should: a. Learn all he can about foreign cultures by reading, visiting with foreigners and those who have traveled or lived in the countries he will visit. b. Condition and sensitize himself by projecting himself into possible situations and analyzing his learned belief patterns. c. Seek advice from consultants, ambassadors, and others who can provide professional guidance.

6. Business customs and national customs are closely interrelated. In what way would one expect the two areas to coincide and in what ways would they show differences? How could such areas of similarity and difference be identified? COINCIDE a. Language used b. Methods of carrying on business must coincide with local customs c. Religious effect d. Political effect 1. Laws 2. Taxes DIFFER a. Subject matter b. Degree of technicalities involved c. Business customs are continually changing—national customs do not d. Business customs cause some change in national customs One would have to examine each possible difference and similarity to determine whether or not they exist.

7. Identify both local and foreign examples of cultural imperatives, adiaphora, and exclusives. Be prepared to explain why each example fits into the category you have selected. Domestic examples: a. Cultural imperatives: It is imperative that one pay income tax, license one’s car, or wear a coat and tie to a fine restaurant, not belch in public, etc. b. Cultural adiaphora: One may or may not attend church, one may eat local foods, but doesn’t have to. c. Cultural exclusives: An African wouldn’t join the KKK. A foreigner couldn’t sell firearms for the purpose of overthrowing the government. Foreign examples: a. Cultural imperatives: Not wearing shorts in Mazatlan, Mexico; not doing business on Saturday in Israel. b. Cultural adiaphora: An American businessperson in Mexico may or may not drink tequila or eat burritos. c. Cultural exclusives: It would be inappropriate for an American to go to Vietnam and act like a Moslem.

8. Contrast the authority roles of top management in different societies. How will the differing views of authority affect marketing activities? There are three main different types of authority patterns: (1) top management decision making, (2) decentralized decision making, and (3) committee decision making. In Europe, top management makes most of the major decisions. One of the reasons for this is their belief that subordinates are generally inadequate people. In the United States, the subordinates are given more responsibility and top management doesn’t have complete responsibility of decision making. This is what can be called more decentralized decision making. In the Far Eastern countries, group decision making predominates because of their culture. The marketing approach to each of these different situations is quite varied. The problem is to determine what system is being used, and who is in authority.

9. Do the same for aspirational patterns. In the United States, management tends to emphasize profit or high wages. In foreign countries, managers are more likely to emphasize security, good personal life, acceptance status, advancement, or power. Individual goals vary from country to country and from manager to manager. By knowing the goals of management, a marketing man can aim the marketing of his product toward these different goals.

10. What effects on business customs might be anticipated from the recent rapid increases in the level of international business activity? Business customs are bound to be altered in all countries. It is axiomatic in anthropology that when two cultures meet, there is a blending rather than an elimination of one or the other. We would therefore expect business practices to become more standard because of the necessity of dealing in the same ways. This would take much time.

11. Interview 12. Differentiate between: Private ownership and family ownership. Decentralized and committee decision making. ____―Private ownership‖ means ownership by private investors and not government ownership. ―Family ownership‖ refers to a business dynasty controlled by one or a few families.

―Decentralized decision making‖ means subordinates have the authority to make certain decisions, with top management making the most important decisions. ―Committee decision making‖ means emphasis is placed on group participation, with endorsement of a decision by a group.

13. In which ways does the size of a customer’s business affect his business behavior? The large organizations of the different countries have a professionalized management which is much the same from country to country. In medium-sized businesses, the management is likely to be in direct contact with the workers and customer. The management of the smaller firms is likely to be closely tied to the customs and attitudes of the country. Management is directly responsible for the supervision of employees and comes into direct contact with the customers.

14. Compare three decision-making authority patterns in international business. The top management decision making is the centralized decision making whereby only the people at the top make the decisions. The reason for this is management’s distrust of the ability of the subordinates. The decentralized decision making is the system whereby executives at various levels of the business hierarchy are given rather complete decision making authority over their own functions. The committee decision-making places great emphasis on group participation, group harmony, and group decision making.

15. Explore the various ways in which business customs can affect the structure of competition. The customs would affect the structure of competition mainly by determining whether or not there is competition in that country. If the industries are government controlled, then there is obviously no competition. There may be different policies on how competition may occur in different countries. Some countries might have a rigid competition requirement, whereas another could have a quite loose competition requirement.

16. Why is it important that the business executive be alert to the significance of business customs?

The business executive must be very sensitive to the cultural variations; he must be alert and prepared to adapt when necessary; he must realize that he is not a native and will always be treated as an outsider. If he does not follow these points, he will be excluded from doing business or will lose out in doing business in different countries.

17. Suggest some cautions that an individual from a high-context culture should take when dealing with someone from a low-context culture. Do the same for low- to high-context situations. An individual from a high-context culture operating in a low-context culture should be careful about: a. assuming that he has communicated when he has not. b. leaving out major elements of communication. c. depending too much on the spoken word and not enough on writing. d. becoming frustrated by lack of feedback in interpersonal communication. An individual from a low-context culture operating in a high-context culture should be careful about: a. communicating messages he did not intend. b. becoming frustrated from the imprecision of his counterpart’s communication. c. expending too much on reports and letters. d. missing important communication cues.

18. Political



19. Differentiate among the following: Subornation Lubrication Extortion Bribery --------Subornation generally involves large sums of money, frequently not properly accounted for, which are designed to entice an official to commit an illegal act of magnitude on behalf of the one paying the bribe. Lubrication, on the other hand, involves a relatively small sum of cash, gift, or service made to a low-ranking official in a country where such offerings

are not prohibited by law; the purpose of such a gift being to facilitate or expedite a normal, lawful performance of a duty by an official. Extortion is payment extracted under duress by someone in authority from a person seeking only what one is lawfully entitled to. Bribery is money voluntarily offered by someone seeking unlawful advantage. Lubrication payments are a request for a person to do a job more rapidly or more efficiently, whereas subornation is a request for officials to turn their heads, not do their job, or to break the law. An example of extortion would be a Finance Minister of a country demanding heavy payments under the threat that millions of dollars of investment would be confiscated.

20. Distinguish between P-time and M-time. Edward Hall defines two kinds of time systems in the world – monochronic and polychronic time. M-time (monochronic) typifies most North Americans, Swiss, Germans, and Scandinavians. In these Western cultures, they tend to concentrate on one thing at a time. They divide time into small units and are concerned with promptness. M-time is used in a linear way and it is experienced as being almost tangible in that we save time, waste time, bide time, spend time and lose time. Most low context cultures operate on M-time. P-time is more dominant in high context cultures where the completion of a human transaction is emphasized more than holding to schedules. P-time is characterized by the simultaneous occurrence of many things and by ―a great involvement with people.‖ P-time allows for relationships to build and context to be absorbed that are a part of high-context cultures. In Japan there is a mix between P-time and M-time. For appointments, Japan is very M-time but for all other interaction, they are more P-time. The American desire to ―get straight to the point,‖ to ―get down to business‖ and other indications of directness are all manifestations of M-time cultures. While the P-time system gives rise to looser time schedules, deeper involvement with individuals and a ―wait and see what develops‖ attitude. For example, two Latins conversing would likely opt to be late for their next appointments rather than abruptly terminate the conversation before it came to a natural conclusion.

21. Discuss how a P-time person reacts differently from an M-time person in keeping an appointment. When business people from M-time and P-time meet, adjustments on both sides need to be made for a harmonious relationship. P-time is characterized by a much ―looser‖ notion of what is ―on time‖ or ―late.‖

Interruptions are routine, delays to be expected. It is not so much putting things off until ―manana‖ but the concept that human activities are not expected to proceed like clockwork. One study comparing perceptions of punctuality in the U.S. and Brazil found that Brazilian timepieces were less reliable and public clocks less available than it was in the United States. Researchers also found that Brazilians more often described themselves as late arrivers, allowed greater flexibility in defining early and late, were less concerned about being late, and were more likely to blame external factors for their lateness than were Americans. Often clarity can be gained by specifying tactfully, for example, whether a meeting is to be on ―Mexican time‖ or ―American time.‖ An American who has been working successfully with the Saudis for many years says he has learned to take plenty of things to do when he travels. Others schedule appointments in their offices so they can work until their P-time friend arrives.

22. What is meant by “laws are the markers of past behavior that society has deemed unethical or socially irresponsible?” It means that to be ethical does not mean just abiding by the law. Most laws reflect societies’ concern that some type of behavior is not proper and that people do not voluntarily refrain from the offensive behavior, thus, laws are passed. In many countries, the law may help define the borders of minimum ethical or social responsibility, but the law is only the floor above which one’s social and personal morality is tested. Ethical business conduct should normally exist at a level well above the minimum required by law.

23. What are the three ethical principles that provide a framework to help distinguish between right and wrong? Explain. There are three ethical principles that provide a framework to help the marketer distinguish between right and wrong, determine what ought to be done, and properly justify his or her actions. They are: Utilitarian ethics, i.e., does the action optimize the common good or benefits of all constituencies? Rights of the parties, i.e., does the action respect the rights of the individuals involved? Justice or fairness, i.e., does the action respect the canons of justice or fairness to all parties involved?

Answers to these questions can help the marketer ascertain the degree to which decisions are beneficial or harmful, right or wrong, or whether the consequences of actions are ethical or socially responsible.

Chapter 6
2. Why would a country rather domesticate than expropriate? Expropriation creates problems with other governments and can cause potential investors to shy away from investments in their country. Further, if a country domesticates, they are able to achieve almost all, if not all, the advantages of expropriation without the negative aspects associated with such a drastic move. 3. “A crucial fact when doing business in a foreign country is that permission to conduct business is controlled by the government of the host country.” Comment. It is extremely critical for a company to examine, evaluate, and comprehend the present and future policies of the government in a foreign country. To do this, the type of government and the types of political parties and their basic philosophies toward foreign business must be studied in depth. The level of economic development and the accompanying political policies are directly correlated with the attitude of the government toward foreign business. This attitude may or may not change with changes in government, political parties, economic conditions, etc. Also, the importance of products to the country is a deciding factor in restricting or encouraging foreign business.

4. What are the main factors to consider in assessing the dominant political climate within a country? a. Current form of government. b. Current political party systems. c. Stability and permanency of government policy. d. Risks or encouragements of foreign business resulting from political activity.

5. Why is working knowledge of party philosophy so important in a political assessment of a market? Discuss. A working knowledge of party philosophies is necessary if there is a possibility that a change in government policy toward foreign business could result from a change in government or political parties.

6. 略 7. What are the most common causes of instability in governments? Discuss. The most common causes of instability in governments are: a. a change in the form of government – this is the most drastic cause because a ―reform‖ government is often replacing a government which encouraged foreign business, b. a shift in political parties – the policy of various parties quite often differs concerning restrictions or encouragements of foreign business, c. a rise in feelings of nationalism – the people may pressure the government or party in control to negatively influence the extent of trade with foreign countries (i.e., ―Buy American‖).

8. Discuss how governmental instability can affect marketing. Government instability affects marketing because of the risks which are inherent in foreign marketing. Much can be lost if a company invests money in a plant or operation within a foreign country and is later subjected to restrictions, controls, or expropriation by the present or new government.

9. What are the most frequently encountered political risks in foreign business? Discuss. a. Expropriation – the acquisition of a company’s property by the host country. The companies may or may not be compensated. b. Exchange Controls – used to conserve the supply of foreign exchange. Controls may be levied against foreign companies or types of products. c. Import Restrictions – restrictions on the imports of raw material, parts, etc., are employed to induce the foreign industry to purchase its supplies locally. d. Taxes – they are sometimes increased despite prior agreements calling for a specific tax rate. e. Price Controls – generally applied during inflationary periods to essential products. f. Labor Problems – unions may have strong government support which allows special labor concessions from the foreign business. Companies may be forced to abide by rules set up by labor unions through the government.

10. Expropriation is considered a major risk of foreign business. Discuss ways in which this particular type of risk has been minimized somewhat as a result of company activities. Explain how these risks have been minimized by the activities of the U.S. government. 3. The risk of expropriation has been minimized by: a. a change in attitude of foreign governments toward expropriating an industry or company. b. application of strict economic pressures by the country of the expropriated firm. c. encouraging the people of the host country to invest in the business venture and work in the enterprise. d. The U.S. government also offers support in minimizing political risks by establishing agencies (such as export-import Bank) to underwrite the investment activities of American companies. The U.S. government also supplies pressure to countries which expropriate U.S. firms by cutting off foreign aid via the Hickenlooper amendment.

11. How do exchange controls impede foreign business? Discuss. Exchange controls are established by a country in order to maintain a specific level of foreign exchange. They are used especially during periods when the country faces shortages of foreign currency. This control keeps the company from exchanging its earnings into the currency of its own country. Also, demand for imported goods may exist, but exchange controls may limit currency and thus render the demand ineffective.

12. How do foreign governments encourage investment? Discuss. Foreign governments encourage foreign investment by offering tax exemptions, protection against competing imports, and unimpeded movement of capital and profits.

13. How does the U.S. government encourage foreign investment? Spell out the implications in foreign marketing. The U.S. government encourages foreign investment by attempting to create favorable climates in foreign countries for investment and by assisting in current operations of the foreign-located firm. The United States does this by minimizing investment risks. These encouragements by the United States set the stage for foreign investment. However, it is basically up to the company to combine its self-interest with that of the host country. By doing so, the U.S. government will probably not be called upon to apply political or economic pressures.

14. What are the motives behind U.S. government encouragement for foreign investment? Explain. Governments, both foreign and U.S. encourage foreign investment as well as discourage it. In fact, within the same country some foreign businesses may fall prey to politically induced harassment while others may be placed under a government umbrella of protection and preferential treatment. The difference lies in the evaluation of a company’s contribution to the nation’s interest. The most important reason to encourage foreign investment is to accelerate the development of an economy. An increasing number of countries are encouraging foreign investment with specific guidelines aimed toward economic goals1. Multinational corporations may be expected to create local employment, transfer technology, generate export sales, stimulate growth and development of local industry, conserve foreign exchange, or meet a combination of these expectations as a requirement for market concessions2. Recent investments in China, India, and the former republics of the USSR include provisions stipulating specific contributions to economic goals of the country that must be made by foreign investors. The U.S. government is motivated for economic as well as political reasons to encourage American firms to seek business opportunities in countries worldwide, including those that are politically risky. It seeks to create a favorable climate for overseas business by providing the assistance that helps minimize some of the more troublesome politically motivated financial risks of doing business abroad. The Department of Commerce (DOC) http://www.doc.gov/ is the principal agency that supports U.S. business abroad. The International Trade Administration (ITA) http://www.ita.gov/, a bureau in the DOC is dedicated to helping U.S. business compete in the global marketplace. Other agencies that provide assistance to U.S. companies include:

15. Discuss measures a company might take to lessen its political vulnerability. Companies investing in foreign countries can minimize the political and economic risks by: a. establishing a management of Americans and nationals, b. employing nationals,
1 2

―Tax Incentives Key to Turning Korea Into NE Asian Hub,‖ the Korea Times, July 8, 2002. Matthew Mok, ―Pooling Best Practices to Woo MNCs,‖ New Straits Times-Management Times, September 5, 2002

c. selling stock in the company to nationals, d. sharing the profits and earnings in a fair manner, e. understanding the traditions of the people in the host country, f. having the national work with you, not for you.

17、The text suggests that violence is a politically motivated risk of international business. Comment. Although violence is not generally government initiated, it is a risk that multinational companies must consider in assessing the political vulnerability of their activities. Violence against government, as well as against multinational firms, has been on a steady increase during the 1970s. Violence against multinational companies may have governmental-political overtones since it is frequently directed toward a multinational in order to embarrass a government. Much of the violence is designed to disrupt the relationship between a government and a multinational firm forcing the government to expropriate or force a multinational to leave the country. A recent example would be the experience of Owens-Illinois Company in Venezuela. The government admitted that their decision to expropriate Owens-Illinois was directly related to the violence that leftist groups caused against that company.

18、There is evidence that expropriation and confiscation are less frequently encountered today than just a few years ago. Why? What other types of political risks have replaced expropriation and confiscation importance? Risks of confiscation and expropriation have lessened over the last decade because experience has shown that few of the desired benefits materialized after government takeover. Rather than a quick answer to economic development, expropriation and nationalization often lead to nationalized businesses that were inefficient, technologically weak, and noncompetitive in world markets. As the world became more economically interdependent and it became obvious that much of the economic success of countries like South Korea, Singapore, and Taiwan could be tied to foreign investments, countries began to view foreign investment as a means of economic growth. Even in Mexico, MNCs that were heavily restricted until only a few years ago, are now courted for direct investment as well as a source of much needed capital and technology. Additionally, Mexico has begun to privatize many nationally owned companies. A national airline was sold to private investors and the nationalized telephone company was sold to a consortium of investors from Mexico, U.S. and France. The benefits realized by Mexico of privatizing the national

telephone company were almost immediate because the government received hundreds of millions of dollars of much needed capital from the sale. In addition, Mexico’s antiquated telephone system will be replaced by the latest technology, something the financially strapped government could not do. A similar scenario is being played out in Brazil, Argentina, India, and many Eastern European countries. Although expropriation and confiscation are waning in importance as a risk of doing business abroad, more frequently international companies are confronted with a variety of economic restraints that are often imposed with little warning. These economic risks may be imposed under the banner of national security, protection of infant industry, protection of scarce foreign exchange, or as taxes to raise revenue. They include such things as exchange controls, local content laws, import restrictions, tax controls, price controls, and labor problems.

Chapter 7
2. How does the international marketer determine what legal system will have jurisdiction when legal disputes arise? Since there is no judicial body to deal with legal problems arising between citizens of different countries, the foreign marketer must look to the legal systems of all the countries involved; that is, the laws of his own country and the laws of the country in which he is conducting business. In general, a U.S. citizen is subject to the laws of the United States as well as to those of any foreign country in which he lives or works. In the case of a conflict, and unless the government of the citizen takes up the citizen’s case in an international court, jurisdiction is generally determined (1) on the basis of jurisdictional clauses included in the contract, (2) on the basis of where a contract was entered into, or (3) on the basis of where the provisions of the contract were performed. The jurisdictional clause is the most clear-cut and is usually honored. If there is no such clause or if it is ineffective, either of the other two methods is used.

3. Discuss the state of international commercial law. Commercial law, as seen in Question 1, varies in meaning between common law (where commercial disputes are subject either to civil or commercial law) and code law (where a codified inclusive commercial law exists). Consequently, there is no such thing as an ―international‖ commercial law, and the question of jurisdiction is handled as described in Question 2. In general, the marketer must deal with national commercial laws and must vary his operations from country to country with regard to its

individual laws. Progress toward unification is being taken with greatest success in the EEC countries, which eventually aim toward a unified commercial legal system as well as unification in all other areas, especially political.

4. Discuss the limitations of jurisdictional clauses in contracts. In general, jurisdictional clauses, when present in a contract, are honored by the courts. For example, it is not unusual for a court to use the law of another country for its decisions. However, if the contractual events are not in effect, entered into or executed within the state indicated, courts have been known to disregard the jurisdictional clause and apply different rules in determining what law governs. Since there is no obligation for the courts to uphold jurisdictional clauses, the parties must be reasonable when adding such clauses, or they are liable to have very limited actual value.

5. What is the “objective theory of jurisdiction?” How does it apply to a firm doing business within a foreign country? The question of U.S. sovereignty over its citizens abroad has been dealt with by the ―objective theory of jurisdiction‖ which states that ―even if an act is committed abroad, that is outside the territorial jurisdiction of the courts, those courts can nevertheless have jurisdiction over it if this act produces consequences or effects within the United States.‖ Broadly interpreted, this means that an American is always a citizen of the United States and is subject to its laws as interpreted by the U.S. courts. Commonly interpreted, however, only those violations of U.S. laws which ―affect our foreign or domestic trade‖ are considered subject to the U.S. legal system when operations are outside the legal jurisdiction of U.S. courts. Since an American working, traveling, or living in a foreign country is subject to the laws of that country and must obey them, he will not be punished by an American court if he is at the same time violating a domestic U.S. law. It is obvious, however, that a firm (U.S.) in a foreign country must consider at least two sets of laws, and perhaps more. This is especially important in antitrust cases, or with laws governing loyalty and U.S. citizenship (i.e., trading with enemy, political office in foreign countries, offices in political parties, etc.).

6. Discuss some of the reasons why it is probably best to seek an out-of-court settlement in international commercial legal disputes rather than sue. The most important reasons for avoiding court settlements of international legal disputes is that they are time consuming, frustrating, and costly. In addition, court cases are often publicized and may create a poor image of

the company; the courts may not be well versed in the problem and thus hand down an unfair decision; and a more fair, less time consuming and less expensive decision can often be reached through arbitration. As a result of the high costs of litigation, the philosophy of most companies is to first ―placate,‖ second to ―arbitrate,‖ and to ―litigate‖ as a last resort.

7. Illustrate the procedure generally followed in international commercial disputes when settled under the auspices of a formal arbitration tribunal. Arbitration obviously depends upon the willingness of both parties to accept the arbitrator’s rulings; it has been most successful when provision for this method of settlement is included in the contract. However, there is some question of the legality of enforcing arbitration agreements which have been made prior to a dispute. While the theory of arbitration is that each of the parties involved in the dispute selects or agrees upon a referee or judge of the case, in actual practice most arbitration is submitted to one of the established arbitration boards and to established rules and procedures. The general procedure followed by an established arbitration tribunal is that of immediately attempting a conciliation between the parties. If not successful, each party selects an arbitrator to defend its case, the court appoints a third member (from a list of arbitrators it maintains), hearings of both sides take place, a decision and an award is made. Such decisions have had a great deal of success, i.e., they are upheld by the parties.

8. What are intellectual property rights? Why should a company in international marketing take special steps to protect them? Industrial property rights are rights to the exclusive or limited use of products, processes, designs, formulas, brand names, and trademarks which provide a company with advantages over competitors; i.e., patents, trademarks, and copyrights. Such industrial properties are among the most important assets of a company because they symbolize quality, entice consumers, and have a psychological or intangible quality which is invaluable. Because of this fact and the fact that millions of dollars are spent developing such qualities, the international marketer should take special steps to govern these properties since the rules governing them vary from country to country. (See next question.) 9. In many code law countries, ownership of intellectual property rights is established by registration rather than prior use. Comment. Most countries of the world follow a code law principle concerning property rights. That is, rights are established by registration, and the first to register a product is its legal owner. In the United States, the common law principle is observed: prior use established ownership. That is, whoever can

establish first use is considered the owner and has legal rights. Obviously, an oversight in understanding these differences may result in much pirating and the loss of property rights, or at least in the loss of a great deal of time, effort, and/or money. Obviously, uniform laws would help since the international marketer must necessarily consider the world as his or her market and should have a means of obtaining worldwide intellectual property rights.

10. Discuss the advantages to the international marketer arising from the existence of the various international conventions on trademarks, patents, and copyrights. The obvious advantage to international marketers arising from the existence of the various international conventions on trademarks, patents, and copyrights is that their product, their sales, their profits are more easily protected, i.e., the marketer may register the product at the same time in many countries, thus avoiding piracy, eliminating time-consuming patent procedures and bureaucracy. in addition, such conventions make an attempt at establishing uniform requirements. Obviously, the situation is difficult when different countries have different attitudes toward the rights of individuals. In most countries, the individual may not obtain exclusive monopoly of a product without manufacturing and selling that product (as an individual may in the United States) but must share the product with the citizens of the country. The patent will revert to public domain if the product isn’t manufactured within a specified time. Thus, conventions aid the businessperson by enabling him or her to more easily patent the product, to jog his or her memory that laws are not uniform and that he or she needs a worldwide basis of protection, and to eliminate much time. In addition, conventions serve as the machinery for obtaining these rights and as a possible means of establishing uniform worldwide industrial property rights laws.

11. “The legal environment of the foreign marketer takes on an added dimension of importance since there is no single uniform international commercial law which governs foreign business transactions.” Comment. As discussed in Question 10, the lack of uniform commercial laws results in the expenditure of much time, energy, and money on the part of the marketer. In addition, a lack of understanding of foreign laws or customs may have serious consequences for the unwary businessperson. Furthermore, information concerning these customs and laws might be hard to obtain. Since any mistakes are liable to have legal consequences, they thus represent some sort of loss to the company. Since customs, politics, geography and innumerable other factors vary greatly, affect, and

are affected by the legal environment, it is imperative that the businessperson be acquainted with all aspects. Since legal questions also establish insurmountable roadblocks, the wisest course for the international marketer is to have reference to a council well versed in the intricacies of the international legal environment.

12. Why is conciliation a better way to resolve a commercial dispute than arbitration? Although arbitration is generally regarded as the best means of settling international disputes, a preliminary effort at conciliation is the best method for resolving disputes with a Chinese business partner. In fact, some Chinese companies may avoid doing business with companies that go first to arbitration when differences arise. Conciliation is considered by the Chinese to be far friendlier than arbitration or litigation in settling disputes. The Chinese believe that when a dispute occurs, friendly negotiation should be used first to solve the problem; if that fails, then conciliation should be tried. The Chinese are less threatened with conciliation but, unfortunately, neither side is bound to a conciliation settlement, as would be the case under arbitration.

13. Differentiate between conciliation and arbitration. The main difference between conciliation and arbitration is that neither side is bound to a conciliation settlement as would be the case under arbitration. Conciliation can be either formal or informal. Informal conciliation can be established by both sides agreeing on a third party to mediate. In China, formal conciliation is conducted under the auspices of the Beijing Conciliation Center that assigns one or two conciliators to mediate. If agreement is reached, a conciliation statement based on the signed agreement is recorded. Although conciliation may be the friendly route to resolving disputes in China, it is not legally binding so an arbitration clause should be included in all conciliation agreements. Experience has shown that having an arbitration clause in the conciliation agreement makes it easier to move to arbitration if necessary. For companies doing business in China, settlement of disputes should follow four steps; first informal negotiation; if this does not work, conciliate, arbitrate; and finally, litigate.

15. Discuss the issues of a website being sued for libel for information posted on the site. The United States has taken a giant step in dealing with domain name pirates by passing the Anti-cybersquatting Consumer Protection Act (ACPA) and the World Intellectual Property Organization (WIPO) established a structure through the Internet Corporation for Assigned Names and

Numbers (ICANN) in which anyone registering a domain name with complying registries has to agree to dispute resolution. This is known as the Uniform Dispute Resolution Policy (UDRP). Neither the ACPA nor the UDPR provide failsafe ways of recovering a domain name once it has been cybersquatted. A study indicated that protection is needed for geographical names, ethnic groups and pharmaceutical substances, all of which have been appropriated by CSQs. These abuses will continue unless preventive steps are taken. Agencies like the ACAP, DRS, and the World Intellectual Property Organization (WIPO) are useful, but, besides being costly, they only address disputes involving sites using names that are trademarked and have commercial value or are so well known they have common law trademark rights. Even though protection from cybersquatters is not perfect, if a business has taken steps to properly defend its brand names, trade names, or product names and properly registers them, it greatly enhances its ability to defend against improper use of the name by a third party. Countries that recognize intellectual property will generally refer to those laws to resolve disputes. Most country’s courts are inclined to assert jurisdiction over online activity, where it originates, so long as harm is experienced locally and the sense is that the party responsible either knew or ought to have known that the harm was a likely consequence of their actions. Most agree though that the laws that are expressly designed to apply not just in a single country but worldwide are necessary to untangle the legal hassles that are occurring.

Chapter 8
Marketing research The systematic gathering, recording, and analyzing of data to provide information useful in marketing decision making. International Marketing research The systematic gathering, recording, and analyzing of data to provide information useful in international marketing decision making. Multicultural research Involves countries that have different languages, economics, social structures, behaviour, and attitude patterns Research process A set of six steps which defines the tasks to be accomplished in conducting a

marketing research study. These include problem definition, developing an approach to problem, research design formulation, field work, data preparation and analysis, and report generation and presentation. Primary data Data collected specifically for the particular research project. Secondary data Data collected already by some other agency, such as government statistics, NGO statistics, etc. Quantitative research(定量研究) ? Usually a large number of respondents ? Respondents answer structured oral or written questions using a specific response format (such as yes/no) or to select a response from a set of choices ? Responses can be summarized in percentages, averages, or other statistics Qualitative research(定性研究) ? If questions are asked, they are almost always open-ended or in-depth ? Seeks unstructured responses that reflect the person's thoughts and feelings on the subject. ? Qualitative research interprets people in the sample ? Qualitative research is helpful in revealing the impact of sociocultural factors on behavior patterns and in developing research hypotheses Back translation In which the questionnaire is translated from one language to another, and then a second party translates it back into the original, and the two original versions are compared. This process often pinpoints misinterpretations and misunderstanding before they reach the public. Parallel translation It is used to overcome the inaccurate translation, in which more than two translators are used for the back translation; results are compared, differences discussed, and the most appropriate translation selected. Decentering It is a hybrid of back translation, which is a successive process of translation and retranslation of a questionnaire, each time by a different translator. Expert opinion the key in using expert opinion to help in forecasting demand is triangulation,

that is comparing estimates produce by different sources. Analogy(类比) assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country. 2.Discuss how the shift from making "market entry" decision to "continuous operation" decisions creates a need for different types of information and data. ? General information about the country, area, and/or market ? Information to forecast future marketing requirements ? By anticipating social, economic, consumer, and industry trends within specific markets or countries ? Specific market information used to make and develop marketing plans 3.Discuss the breadth and scope of international marketing research. Why is it generally broader in scope than domestic marketing research? ? Economic and demographic climate ? Cultural, sociological; and political climate ? Overview of market conditions ? Summary of the technological environment ? Competitive situation 5、What is the task of the international marketing researcher? How is it complicated by the foreign environment? The task of the international market researcher is to answer questions with current, valid information that a marketer can use to design and implement successful marketing programs. This task is complicated by the foreign environment in the case of secondary data by a lack of collected data or data which have been poorly collected and the reliability of the secondary data available. In many countries, national pride comes before statistical accuracy, and frequently secondary data are opinions rather than fact. Another difficulty with secondary data involves the comparability and currency of available data. Oftentimes, data are not comparable from period to period, nor are they current or collected on a predictable basis. 6、Discuss the stages of research process in relation to the problems encountered. ? Define the research problem and establish research objectives ? Determine the sources of information to fulfill the research objectives ? Consider the costs and benefits of the research effort ? Gather relevant data from secondary or primary sources, or both ? Analyze, interpret, and summarize the results ? Effectively communicate the results to decision makers

7、Why is the formulation of the research problem difficult in foreign market research? ? The major difficulty is converting a series of often ambiguous business problems into tightly drawn and achievable research objectives ? The first, most crucial step in research is more critical in foreign markets because an unfamiliar environment tends to cloud problems definition ? Other difficulties in foreign research stem from failures to establish problem limits broad enough to include all relevant variables 8、Discuss the problems of gathering secondary data in foreign markets. ? Availability of data ? Reliability of data ? Comparability of data 10、What are some problems created by language and the ability to comprehend the questions in collecting primary data? How can a foreign marketer overcome these difficulties? P191 ? Ability to communicate opinions ? Sampling in field survey ? Language and comprehension ? Other difficulties after the data was collected, such as the response bias 11、Discuss how decentering is used to get an accurate tranlation of a questionnaire. Decentering is a hybrid of back translation, which is a successive process of translation and retranslation of a questionnaire, each time by a different translator. 12、Discuss when qualitative research may be more effective than quantitative research. ? If questions are asked, they are almost always open-ended or in-depth ? Seeks unstructured responses that reflect the person's thoughts and feelings on the subject. ? Qualitative research interprets people in the sample ? Qualitative research is helpful in revealing the impact of sociocultural factors on behavior patterns and in developing research hypotheses 13、 Sampling presents some major problems in marketing research. P193 ? The great problem stems from the lack of adequate demographic data and available lists from which to draw meaningful information ? The effectiveness of various methods of communication in survey is limited ? The adequacy of sampling techniques is also affected by a lack of detailed social and economic information

?

Inadequate mailing lists and poor postal service can be problems for the market researcher using mail to conduct research

15、"The foreign market researcher must possess three essential capabilities to generate meaningful information", what are they? ? A high degree of cultural understanding of the market in which the research is being conducted ? A creative talent for adapting research methods ? A skeptical attitude in handling both primary and secondary data 13.Problems in international marketing research ? Stem from differences among countries ? Range from inability or unwillingness of respondents to communicate their opinions ? Inadequacies in questionnaire translation 14.Three keys to successful international marketing research ? The inclusion of natives of the foreign culture on research teams ? The use of multiple methods and triangulation ? The inclusion of decision makers, even top executives, who must on occasion talk directly to or directly observe customers in foreign markets

Chapter 9
2. Define strategic planning. How is strategic planning different for international marketing than domestic marketing? Strategic planning is a systemized way of relating to the future. It is an attempt to manage the effects of external uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end. Further, it is a commitment of resources to a country market to achieve specific goals. The principles of planning are not in themselves different between international and domestic marketing, but the intricacies of the operating environments of the MNC (host country, home, and corporate environments), its organizational structure, and the task of controlling a multicountry operation create differences in the complexity and processes of international planning. Strategic planning on an international level allows for rapid growth of the international function, changing markets, increasing competition, and the ever-varying challenges of different national markets. The plan blends the changing parameters of external country environments with corporate objectives and capabilities to develop a sound, workable marketing program.

4、Discuss the effect of shorter product life cycles on a company’s planning process. Global competition is placing new emphasis on some basic tenets of business. It is reducing time frames and focusing on the importance of quality, competitive prices, and innovative products. Time is becoming a precious commodity for business, and expanding technology is shortening product life cycles and creating greater opportunities for innovative products. A company no longer can introduce a new product with the expectation of dominating the market for years while the idea spreads slowly through world markets. In any given year, for example, two thirds of Hewlett-Packard’s revenue comes from product introduced in the prior three years. Shorter product life cycles mean that a company must maximize sales rapidly to recover development costs and generate a profit by offering its products globally. Along with technological advances have come enhanced market expectation for innovative products at competitive prices. Today, strategic planning must include emphasis on quality, technology, and cost containment. To achieve the flexibility and speed required under such conditions, many firms are entering collaborative relationships to shore up their weaknesses whether in distribution, technology or manufacturing that will enable them to respond to the problems created by shorter life cycles.

5、What is the importance of collaborative relationships to competition?
什么是竞争合作关系的重要性?

The competitive environment of international business is changing rapidly. To be competitive in global markets a company must meet or exceed new standards for quality and new levels of technology. There is an increasing change of pace for product development and profitability. Cost efficient, technologically advanced products are being offered by competitors and demanded in established markets as well as in markets rising from formerly Marxist-socialist economies. Opportunities abound the world over, but to benefit, firms must be current in new technology, have the ability to keep abreast of technological change, have distribution systems to capitalize on global demand, have cost-effective manufacturing, and have capital to build new systems as necessary. The accelerating rate of technological progress, market demand created by global industrialization, and the creation of new middle classes will result in tremendous potential in global markets. But, along with this surge in global demand comes an increase in competition as technology and management capabilities spread beyond global companies to new competitors from Asia, Europe, and Latin America. Although global markets offer tremendous potential, companies seeking to function effectively in a fragmented global

market of five billion people are being forced to stretch production, design\engineering, and marketing resources and capabilities because of the intensity of competition and the increasing pace of technology. Improvements in quality and staying on the cutting edge of technology are critical and basic for survival but often are not enough. Restructuring, reorganizing and downsizing are all avenues being taken by firms to strengthen their competitive positions. Additionally, many multinational companies are realizing they must develop long term, mutually beneficial relationships throughout the company and beyond to competitors, suppliers, governments, and customers. In short, multinational companies are developing orientations that focus on building collaborative relationships to promote long-term alliances and they are seeking continuous, mutually beneficial exchanges. The environment facing multinational companies demands flexibility, quality, cost containment, cutting edge manufacturing skills, and a rapid response to market changes to sustain a competitive advantage. The strengths and capabilities a company must have to be a major player are enormous and few companies can cover all the bases all of the time. To shore up weaknesses, companies are entering relationships with others to share what each does best whether in marketing, research or manufacturing. Collaborative relationships are becoming a common way to meet the demands of global competition and a successful collaboration means that each achieves more together than either can accomplish alone.

6、 In phases one and two of the international planning process, countries may be dropped from further consideration as potential markets. Discuss some of the conditions in each phase that may exist in a country that would lead a marketer to exclude a country.
在一期和二期的国际规划过程中, 国家可能会进一步考虑作为减少潜在市场。 讨论一些可能 存在的,这将导致一个营销排除一个国家一个国家在每一阶段的条件

In phase one of the planning process, there are a host of reasons why a country would no longer be considered. On balance, those countries that do not offer sufficient potential for further consideration will be eliminated. Some of the reasons why this may occur are that product acceptance within the country could not be achieved without extensive investment and new product development, and the firm does not have sufficient resources to make that investment; the legal structure may be such that it would be impossible for the company to function within that country. Competition in the country is such that, based on the company’s objectives, resources, etc., it is felt that it would not be a profitable venture. In other words, any problem that would lead to minimum market potential, minimum profit, minimum return on investment, unacceptable competitive levels,

unacceptable political stability, unacceptable legal requirements, etc., may all lead to the dropping of a country. While the major reasons for dropping a country in phase one center around general environmental constraints, the reasons that a country may be dropped in phase two center around the more specific questions of what cultural environmental adaptations are necessary for successful acceptance of the company’s marketing mix, and will adaptation costs allow for profitable market entry. In phase two, the marketing mix is the focal point of analysis. Still, the final determination of whether or not a country is dropped depends upon the anticipated profitability of the market after necessary adaptations are made. 8、“The dichotomy typically drawn between export marketing and overseas marketing is partly fictional; from a marketing standpoint, they are but alternative methods of capitalizing on foreign market opportunities.” Discuss. “典型的出口市场和海外市场之间绘制的二分法,部分是虚
构的,从营销的角度来看,他们却把握国外市场机会的替代方法。 ”讨论。

The dichotomy drawn between export marketing and overseas marketing is very misleading, for in fact they are but alternative methods of approaching the foreign markets. Yet, on the other hand, these approaches are often interrelated in the complete marketing structure. Both exporting and overseas marketing can be successfully interchanged to reach various heterogeneous markets. Depending on market structure, competition, and company policies, the organizational structure can be so devised so as to use exporting, overseas marketing, or a combination of both to successfully reach a wide assortment of foreign markets. In one country, due to high tariff rates, overseas production and marketing might be advised; on the other hand, poor communications or resources might necessitate exporting. 9、How will entry into a developed foreign market differ from entry into a relatively untapped market? 从入门如何将进入一个发展国外市场不同,进入一个相
对未开发的市场?

The differences between entering a fully developed market and an untapped foreign market are many and extremely varied. Some of these differences are channels of distribution which may or may not be developed. Governmental attitudes toward business, foreigners, and industry may be very liberal in a growing economy, while an established market may be very restrictive. Communication and transportation may be highly limited in untapped markets and highly developed in successful countries. The amount of capital, banks, and exchange-rate systems will vary according to the market’s development. Finally, the degree and amount of competition

will vary accordingly. To this list, endless factors could be added such as cost of entering the market, social customs, laws, etc. 10、Why do companies change their organizations when they go from being an international to a global company?为什么公司改变他们的组织,当他们
去从一个国际向全球的公司吗?

An international marketing plan should optimize the resources committed to stated company objectives. The organizational plan includes the type of organizational arrangements to be used, and the scope and location of responsibility. Many ambitious multinational plans meet with less than full success because of confused lines of authority, poor communications, and lack of cooperation between headquarters and subsidiary organizations. Companies are usually structured around one of three alternatives: global product divisions responsible for product sales throughout the world; geographical divisions responsible for all products and functions within a given geographical area; and a matrix organization consisting of either of these arrangements with centralized sales and marketing run by a centralized functional staff, or a combination of area operations and global product management. Market-oriented firms are finding greater competitiveness in world markets makes it essential to assume a global perspective in planning and organizational structure. Global competition also requires quality products designed to meet ever-changing customer needs in the face of rapidly growing competition from every corner of the world. Cost containment, escalating technology, customer satisfaction and a greater number of players mean that every opportunity to refine international business practices must be examined in light of company goals. Strategic international alliances, strategic planning and alternative market entry strategies are important avenues to global marketing that must be implemented in the planning and organization of global marketing management. 12、Explain the popularity of joint ventures. 说明合资企业的知名度。 Joint ventures have become popular for a number of reasons. One important marketing reason is to gain access to markets. Nearly all of the developing countries, and many developed countries, require some degree of local participation for operating in their country. Mergers with distributor companies or companies which already have well-established local distribution may provide rapid market access and distribution to foreign companies entering a country. Sometimes companies join forces in order to broaden the line of merchandise that they have available, thereby gaining marketing efficiency and better public image. Another market reason for joining ventures is that local firms possess market information and the marketing know-how which would take years for a foreign company

to acquire. Such participation minimizes the risk of market failure and speeds the marketing effort. Joint ventures may also arise for financial and manpower reasons. Financially it is sometimes desirable to merge with foreign companies because the merger provides access to local capital markets and combines the resources and fund raising capabilities the companies have. It may also give access to a higher quality and more capable managerial manpower. 13、Compare the organizational implications of joint ventures versus licensing. 比较合资企业与授权组织的影响。 Joint ventures involve the partners in a new venture and usually require significant inputs of both capital and management. In licensing, the companies retain separate identity. Usually the licensor is little affected by his licensing actions.

Chapter 10
2、Debate the issue of global versus adapted products for the international market. A recurring debate exists relative to product planning and focuses on the question of standardized products marketed worldwide versus differentiated products adapted or even redesigned for each culturally unique market. Those with a strong production and unit cost orientation advocate standardization and others, perhaps more culturally sensitive, propose the policy of a different product for each market. The issue cannot be resolved with a simple either/or decision. Cost revenue analyses need to be done and decisions made in the hard, cold lights of profitability. There is no question that significant cost savings can be realized from having standardized products, packages, brand names, and promotional messages but this makes sense only if there is adequate demand for the standardized products: costs must be balanced with demand. On the other hand, if the cost of an individualized product when evaluated against price/demand characteristics within a market exceeds potential profit, then it is ridiculous not to consider other alternatives including not marketing the product at all. To differentiate for the sake of differentiation is no solution, and realistic business practice requires a company to strive for uniformity in its marketing mix whenever and wherever possible. Economies of production, better planning, more effective control, and better use of creative managerial personnel are all advantages of standardization. 3、Define the country-of-origin effect and give examples.

Country of Origin Effect (COE) can be defined as any influence that country-of-manufacturer has on a consumer’s positive or negative perception of a product. Today a company competing in global markets will manufacture products worldwide and, when the customer is aware of the country of origin, there is the possibility that the place of manufacture will affect product/brand image. Some examples are French wines, German beer, Swiss watches, Cuban cigars, and Irish woolens are some positive COEs. A negative COE is an automobile from Yugoslavia (the Yugo). 5、Discuss product alternatives and the three marketing strategies: domestic market extension, multidomestic market, and global market strategies. The marketer has at least three viable alternatives when entering a new market: (1) sell the same product presently sold in the home market (Domestic Market Extension Strategy); (2) adapt existing products to the tastes and specific needs in each new country market (Multi-Domestic Market Strategy); or (3) develop a standardized product for all markets (Global Market Strategy.) An important issue in choosing which alternative to use is whether or not a company is starting from scratch (i.e., no existing products to market abroad), or whether it has products already established in various country markets. For a company starting fresh, the prudent alternative is to develop a global product. If the company has several products that have evolved over time in various foreign markets, then the task is one of repositioning the existing products into a global product. 6、Discuss the different promotional/product strategies available to an international marketer. The marketer has at least three viable alternatives when entering a new market: he can (1) sell the same product he presently sells elsewhere, (2) individualize existing products to the tastes and specific needs of the new country, or (3) develop a totally new product. These three basic alternatives, when combined with promotional effort, can be developed into five different product strategies available to the international marketer. First, a company can sell the same product using the same promotional message worldwide as Pepsi-Cola and the Coca-Cola company do. A second version is to sell the same product but with promotions featuring different use patterns, for example, garden power equipment designed for United States home use but sold as agricultural equipment in underdeveloped countries. A third strategy involves altering the basic physical features of the product to meet local environmental needs but promoting the product to fill the same use patterns as are prevalent in the domestic market. Detergents redesigned to function in cold water but still promoted to get clothes clean is an example

of this strategy. The fourth strategy requires both a change in the product to meet different use patterns and a change in the promotional message accompanying it. For example, the fifth strategy is one of investing or developing a totally new product rather than adapting an existing one. This is less frequently done, but as companies move into less developed markets and seek greater economic penetration into these markets it becomes more prevalent. As examples, the Coca-Cola Company has developed Saci, a protein fortified beverage to sell in foreign countries as a diet supplement; and Ford and General Motors are experimenting with a ―bare bones‖ Model T-type truck to sell in developing countries. The success of any of these strategies depends upon the product and the fundamental need it fulfills, its characteristics and their perception within the culture, and finally, the associated costs of each program. 8、Products can be adapted physically and culturally for foreign markets. Discuss. Products can be adapted to a new culture in a variety of ways ranging from simple package changes to total redesign in the physical product. Some need for change becomes obvious with relatively little analysis. For example, a cursory analysis of a country will uncover the need to require electrical goods if it uses a different voltage system, or to indicate product simplification when the local level of technologies is not high, or the need for a color change if the present color violates local taboos, etc. Most such superficial changes can be spotted by looking at product use patterns, the economy, and other related culture elements. One international scholar has categorized these changes into thirteen environmental factors listed below. Each is quickly detected and requires only basic changes to bring the product in line with a culture. Environmental Factor Level of technical skills Level of labor cost Level of literacy Level of income Level of interest rates Level of maintenance Climatic differences Isolation (heavy repair difficult and expensive) Differences in standards Design Change Product simplification Automation or manualization of product Remarking and simplification of product Quality and price change Quality and price change (investment in high quality might not be financially desirable Change in tolerances Product adaptation Product simplification and reliability improvement Recalibration of product and resizing

The suggested changes are primarily concerned with the price and physical or mechanical properties of a product. Such product characteristics certainly can impede effective use of a product within another culture, but more subtle differences within a culture require other kinds of changes that must be resolved before a product gains acceptance. Internal cultural variations may require product adaptation that hinges more on the product’s conflict with norms, values, and behavior patterns than on its physical or mechanical aspects. For example, introduction of a new product into a culture that does not perceive a need for such an item can conflict with established norms, locally accepted values can be upset by trying to introduce personal care items into a culture that prefers body functions remain very private and assuming too high a level of sophistication in product usage may overlook local behavior patterns.

9、What are the three major components of a product? Discuss their importance to product adaptation. The three major components of a product are: (1) its core, the physical product and all its functional features; (2) the packaging component that includes the physical package in which the product is presented, as well as the brand name, trademark, styling and design features, price and quality levels; (3) the support services component, which completes the product buyers receive and from which the bundle of satisfactions received are derived. This support services component includes repair and maintenance services, installation, delivery, warranty, spare parts, training and instructions, credit, and any other services related to the use and purchase of the product. The importance of each component, as well as the perceived component attributes are functions of culture. What may be desirable in one culture may be unimportant in another. A product is, in a large part, a cultural phenomenon; that is, culture determines the individual’s perception of what a product is and what satisfaction that product provides. Therefore, in developing products for international markets, adaptation of that bundle of utilities or satisfaction received may be necessary to bring the product in line with the culture’s needs. Such adaptation may require changes of any one or all of the product components as defined above. 10、 How can the knowledge of the diffusion of innovations help a product manager plan his international investments? Knowledge of the diffusion of innovation provides the international marketer with several important pieces of information; for example, a knowledge of the concept may provide the marketer with an estimate of the time it will take before his innovation would be accepted by a culture, and therefore help him decide whether or not to make the necessary investment. It can also give him insights into how to accelerate the rate of acceptance of his product and the steps that he as a marketer can take to eliminate some of

the ―newness‖ thereby gaining more rapid acceptance of his product. In preparing characteristics of innovations study of the new product, he or she might determine a product profile which could be extremely useful as a model for planning product strategy. By analyzing the product in terms of those attributes which contribute to its newness (or innovativeness) the marketer’s attention is focused on those factors which give rise to resistance; thus, the marketer can estimate the possible rate of adoption and perhaps effect the rate of adoption of an innovation by changing its characteristics through physical modifications, advertising, and/or sales promotion efforts. 11、Old products (that is, old to the U.S. market) may be innovations in a foreign market. Discuss fully. It is important for the marketer to appreciate that a product which has gained acceptance and is now at the top or perhaps even in the declining stage of the product life cycle, may be perceived in another culture as a new and, in fact, very innovative product. The marketer must guard against assuming that an ―old hat‖ in one market which has achieved acceptance after many years of exposure and learning and adaptation on the part of the culture toward the product can be transferred to another culture with its learned acceptance intact. In fact, the ―old hat‖ may be so outside the experience of the new market that the marketer will have to start at the beginning of the assimilation process 12、“. . . If the product sells in Dallas, it will sell in Tokyo or Berlin.” Comment. Basically, the needs and hence the demand for a product are the same in all markets. Similarities in wants are universal and, as income increases, practically everyone desires the ―good life.‖ The important aspect to consider is that in crossing one culture to another, separate characteristics of nationality and stages of economic and industrial development determine consumer behavior to a great extent. Hence, each group’s interpretation of the ―good life‖ as reflected in consumer behavior relates heavily to cultural heritage. Thus, the statement can be very wrong and represents an attitude which has frequently led to international market failures.

13. How can a country with a per capita GNP of $100 be a potential market for consumer goods? What kinds of goods would probably be in demand? Discuss. A country with a low GNP can have a large demand for consumer goods because of the need that exists for certain products and because there are no production facilities or very limited ones within the country. India, for example, has a per capita income of $58/year, yet its imports were about

$2.4 billion in 1963. The type of goods that likely are in demand are the more basic type of consumer goods, such as clothing or basic housing needs.、

14. Discuss the characteristics of an innovation which can account for differential diffusion rates. The characteristics of an innovation which can account for differential diffusion rates are: (1) relative advantage, (2) compatibility, (3) complexity, (4) trialability, and (5) observability. Relative advantage is the degree to which an innovation is better than the products it replaces or with which it competes. Compatibility is concerned with how consistent a product is with existing value and behavior patterns. Complexity refers to how difficult it is to understand and use the new product. Trialability is the degree to which a product may be tried, on a limited basis, without complete commitment to the product. And, observability refers to the ease with which the results of an innovation may be communicated to others.

15. Discuss the four types of innovations. Give examples of the products which would be considered by the U.S. market as one type of innovation but a different type in another market. Support your choice. There are four types of innovations: (1) Congruent innovation, (2) continuous innovation, (3) dynamically continuous innovation, and (4) discontinuous innovation. A congruent innovation is actually no innovation at all because it causes absolutely no disruption of established consumption patterns. Some products do fit this category; the best example would be an exact duplicate of an already existing product. A continuous innovation has the next least disruptive influence on established consumption patterns. Alternative of a product is almost always involved, rather than the creation of a new product. An example may be fluoride toothpaste and menthol cigarettes, etc. A dynamically continuous innovation has more disruptive effects than a continuous innovation, although it still does not generally involve new consumption patterns. It may mean the creation of a new product or considerable alternation of an existing one. Examples would include such items as electric toothbrushes, electric haircurlers, and the Mustang automobile. A discontinuous innovation involves the establishment of a new consumption pattern and the creation of previously unknown products. Examples might include such items as a television, the computer, and the automobile. In any one of these situations a single product may range from being a congruent innovation to a discontinuous innovation. For example, in the United States another small

car would either be considered a continuous or a congruent innovation, whereas the same automobile in a very underdeveloped country that has no automobiles would be a discontinuous innovation. 16、Discuss “environmentally friendly” products and product development. Germany has a strict Eco-labeling program to identify, for the concerned consumer, products that have a lesser negative impact on the environment than similar products. Under German law, a manufacturer is permitted to display a logo, called the ―Blue Angel,‖ on all products that comply with certain criteria that make it environmentally friendly. More than 3,200 products in 58 product categories have been examined and given the Blue Angel logo. While it is difficult to judge the commercial value of a Blue Angel designation, manufacturers are seeking the eco-label for their products in response to growing consumer demand for environmentally friendly products. Similar national labels are under discussion in France, Denmark, the Netherlands and the United Kingdom. The EC Commission issued guidelines for eco-labeling that became operational in October 1992. Under the EC directive, a product is evaluated on all significant environmental effects throughout its life cycle, from manufacturing to disposal, a cradle-to-grave approach. Companies will be encouraged to continuously update their environmental technology because eco-labels will be granted for only a limited period. As more environmentally friendly products come onto the market, the standards will become tougher, and products that have not been improved will lose their eco-label. The ―Blue Angel‖ and similar eco-labels are awarded on the basis of a product’s environmental friendliness, that is, how ―friendly‖ when used and when its residue is released into the environment. A detergent formulated to be bio-degradable and not pollute would be judged more friendly than a detergent whose formulation would be harmful when discharged. Aerosol propellants that do not deplete the ozone layer are another example of environmentally friendly products. No country’s laws yet require products to carry an ―eco-label‖ to be sold. The designation that a product is ―environmentally friendly‖ is voluntary and its environmental success depends on the consumer selecting the ―eco-friendly‖ product. However, laws that mandate systems to control solid waste management, while voluntary in one sense, do carry penalties in that consumers may not select their products.

Chapter 12
2. Discuss the distinguishing features of the Japanese distribution

system. Distribution in Japan has long been considered the most effective non-tariff barrier to the Japanese market. The distribution system is different enough from its United States or European counterparts that it should be carefully studied by anyone contemplating entry. The Japanese system has four distinguishing features: 1) a structure dominated by many small wholesalers dealing with many small retailers; 2) channel control by manufacturers; 3) a business philosophy shaped by a unique culture; and 4) laws that protect the foundation of the system, the small retailer. High Density of Middlemen. There is a density of middlemen, retailers and wholesalers in the Japanese market unparalleled in any Western industrialized country. The traditional structure serves consumers who make small, frequent purchases, at small conveniently located stores. The high density of small stores with small inventories is supported by an equal density of wholesalers. It is not unusual for consumer goods to go through three or four intermediaries before reaching the consumer—producer to primary, secondary, regional, and local wholesaler, and finally to retailer to consumer. Channel Control. Manufacturers depend on wholesalers for a multitude of services to other members of the distribution network. Financing, physical distribution, warehousing, inventory, promotion and payment collection are provided to other channel members by wholesalers. The system works because wholesalers and all other middlemen downstream are tied to manufacturers by a set of practices and incentives designed to ensure strong marketing support for their products and to exclude rival competitors from the channel. Business Philosophy. Coupled with the close economic ties and dependency created by trade customs and the long structure of Japanese distribution channels is a unique business philosophy that emphasizes loyalty, harmony, and friendship. The value system supports long-term dealer/supplier relationships that are difficult to change as long as each party perceives economic advantage. The traditional partner, the insider, generally has the advantage. Large-Scale Retail Store Law. Competition from large retail stores has been almost totally controlled by Daitenho–the Large-Scale Retail Store Law. Designed to protect small retailers from large intruders into their markets, the law requires that any store larger than 5,382 square feet (500 square meters) must have approval from the prefectural government to be ―built, expanded, stay open later in the evening, or change the days of the month they must remain closed.‖ All proposals for new ―large‖ stores are first judged by MITI (Ministry of International Trade and Industry). Then, if local retailers unanimously agree to the plan, it is swiftly approved. However, without approval at the prefecture level (all small retailers in the

area must agree), the plan is returned for clarification and modification that may take several years (ten years is not unheard of) for approval. Besides the large-scale retail store law, there are myriad licensing rules. One investigation of the regulations that governed the opening of a retail store revealed 39 different licenses, each with a separate law, needed to open a full-service store. 3、Discuss the ways Japanese manufacturers control the distribution process from manufacturer to retailer. Manufacturers depend on wholesalers for a multitude of services to other members of the distribution network. Financing, physical distribution, warehousing, inventory, promotion and payment collection are provided to other channel members by wholesalers. The system works because wholesalers and all other middlemen downstream are tied to manufacturers by a set of practices and incentives designed to ensure strong marketing support for their products and to exclude rival competitors from the channel. Wholesalers typically act as agent middlemen and extend the manufacturer’s control through the channel to the retail level. Control is maintained by: 1) inventory financing, sales made on consignment with credits extending for several months; 2) cumulative rebates, rebates given annually for any number of reasons including quantity purchases, early payments, achieving sales targets, performing services, maintaining specific inventory levels, participating in sales promotions, loyalty to suppliers, maintaining manufacturer’s price policies, cooperation, and contribution to overall success; 3) merchandise returns, all unsold merchandise may be returned to the manufacturer; and, 4) promotional support, intermediaries receive a host of displays, advertising layouts, management education programs, in-store demonstrations, and other dealer aids which strengthen the relationship among middlemen and the manufacturer. 5、“Japanese retailing may be going through a change similar to that which occurred in the United States after World War II.” Discuss and give examples. Japanese retailing may be going through a change similar to that which occurred in the United States after World War II. At that time the U.S. retailing structure was made up of many small retailers served by a multilayered wholesaling system and full service department stores and specialty stores offering all the needs of the shopper from soup to nuts including a long list of ―services.‖ Resale price maintenance laws (also referred to as fair trade laws) allowed national manufacturers to dictate high retail prices necessary to support an inefficient distribution system and

amenities, i.e., ―services,‖ which, when offered the opportunity, the consumer was willing to give up for lower prices. High margins were an attraction to the discounter who offered few, if any services and priced items well below manufactured suggested prices. Department stores and other ―traditional retailers‖ fought back with attempts to enforce fair trade laws. When that failed, they also began to discount items but found they could not continue to operate in the old way with discounted prices. At that point, retailing in the United States began to change. Some traditional stores went out of business, others down-sized and dropped entire lines, others reinvented themselves into different operations and many of the small ―mom and pop‖ stores went out of business. Thus began a retailing revolution that ultimately spawned new types of retailers like Wal-Mart, Kmart, Target, Price/Costco, Levitz Furniture, Best, Toys `R’ Us, and a whole host of other retail store types that did not exist a few decades earlier. If retailing follows a similar pattern in Japan, as it appears to be doing, Japanese retailing will not be recognizable in a decade or two. What seemed to be an impenetrable retailing system just a few years ago now appears to be on the verge of opening up and creating opportunities for U.S. marketers. 6、Discuss how the globalization of markets, especially Europe 1992, will affect retail distribution. There are some important trends in distribution systems that will lead to their eventual globalization. That is, there is greater commonalty than disparity among middlemen in different countries. U.S. based Southland Corporation’s 7-Eleven Stores are replacing many of the traditional ―Mom and Pop‖ stores that have dominated a significant part of Japan’s retail food distribution. In Spain, 7-Eleven and Campsa, the Spanish gasoline monopoly, opened 200 7-Eleven minimarkets at Campsa service stations. Hypermarkets, a retailing innovation developed in France, have expanded beyond French borders to other European countries and to the United States. Discount, home repair, self-service, and supermarkets are all mass merchandising concepts gradually spreading all over the world. In anticipation of Europe 1992, national and international retailing networks are developing throughout the world. European integration, global brands, globalized media communications, consumers that expect rational and predictable product assortments, and global companies anxious for their products to be distributed in the most efficient manner are factors driving a growing number of traditional distribution channel members to greater efficiencies and competitiveness. Many are developing into transnational, if not global, operations. Global products require integrated, efficient distribution systems to achieve maximum effectiveness.

7、To what extent, and in what ways, do the functions of domestic middlemen differ from their foreign counterparts? The functions of the domestic and foreign middlemen are quite similar in many areas, but there are certain differences. First, the domestic agent usually takes possession of the goods, whereas the foreign agent does not. In the area of setting prices, the domestic agent has the authority to do so, while his foreign counterpart does not. Both types of domestic middlemen arrange for the shipping of goods, but the foreign middlemen do not. Two other differences exist between foreign and domestic agents. The domestic agent does some promotion and selling, and occasionally extends credit. On the other hand, foreign agents usually do not participate in these activities. 8、Why is the EMC sometimes called an independent export department? The EMC is sometimes called an international marketing department. There are several reasons for this title. First, many of the firms it represents are small and cannot afford extensive overseas marketing themselves. They must rely on the EMS. The EMC does business in the name of the manufacturer. This includes not only normal selling activities, but also active promotion, provision of credit information, physical handling, and even financing. In this light the EMC appears to be an independent marketing arm of the manufacturer. 9、Discuss how physical distribution relates to channel policy and how they affect one another. Two extremely different channel policies exist in various areas which affect physical distribution. For example, in Turkey the buyer must seek out the seller with very little service offered by the latter. This is an example of the marketing channel working backwards. The normal policy is for the seller to seek out the buyer, excluding the retail market, and for the seller to offer a whole range of services. In some areas, middlemen are characterized by specialization. This practice tends to make the distribution process overly complex. Another channel policy found in many countries is the existence of huge middlemen and tiny middlemen with no one in between these two. The large ones tend to be very efficient in distribution, while the other is not. In most countries other than the United States and U.S.S.R., channel length is very long. This slows up the physical distribution of goods. Often, distribution of goods is slowed up because of low inventories caused by the high cost of money. It is unprofitable to maintain a large stock of goods. 10、Explain how and why distribution channels are affected as they are when the stage of development of an economy improves.

As an economy advances, the distribution system begins to take the form of distribution in the U.S. The apparent reason for this change in structure is due to the decentralization of the total marketing function. As an economy becomes more sophisticated it places increasingly complicated and sophisticated demands upon the marketing function. This results in modification of the existing system to be able to meet the increased demand placed upon it by the emerging economy. Consumer segments become much larger and diversified and each in turn places new demands on the distribution system which causes modification in order to administer to the requirements of that segment. 11-In what circumstances is the use of a EMC logical? The export management company is the logical choice of middlemen for firms with relatively small international volume or for those that do not want to involve their own personnel in the international function. 12、In what circumstances are trading companies likely to be used? Trading companies are likely to be employed when adequate coverage of a market, market access, or political acceptability is not possible by one firm. This would be the case in trade between developed and underdeveloped countries as well as between Western nations and the former Communist bloc countries. 13、How is the distribution channel structure affected by increasing emphasis on the government as a customer and by the existence of state trading agencies? The growth of government both as a user and as a middleman has placed new emphasis on marketing to monopsonies. Government is especially important in dealing with industrial goods and commodities. Facilitating middlemen are often used to gain advantage from their strong government contacts and ability to cut red tape. In general government dealings call for short channels with direct contact or one local middleman at most. 14、Review the key variables that affect the marketer’s choice of distribution channels. The four main variables which affect the marketer’s choice of distribution channels are (1) the availability of middlemen, (2) the cost of their services, (3) the functions performed (and the effectiveness with which each is performed) and (4) the extent of control which the manufacturers can exert over the middlemen’s activities. 15、Account, as best you can, for the differences in channel patterns

which might be encountered in a highly developed country and an underdeveloped country. The attitude toward the middlemen in underdeveloped countries is generally negative, whereas his or her place in developed countries is accepted. This feeling in underdeveloped areas exists because the people emphasize production and consider the middleman unproductive. The result is often that this function is done on the side or secretly, which makes distribution overly difficult. Also, distribution is done on a small scale, whereas developed countries are often characterized by the extremely large middlemen. The poor nations live on a subsistence level. They are not so dependent on trade as developed countries are. Therefore, the importance of distributors is low. Distribution is slow and inefficient in underdeveloped countries because the population is widely scattered, inventories are low (high cost of capital), the middleman is very small, and margins are high. The developed nations are generally of opposite character. 16、“One of the first things companies discover about international channel of distribution patterns is that in most countries it is nearly impossible to gain adequate market coverage through a simple channel of distribution plan.” Discuss. A single channel of distribution is often unavailable in foreign countries. One reason is that the channels used may be very unfamiliar to the producer and only seem to be complicated. More realistic reasons may be true in financial arrangements or the unavailability of middlemen. In many countries, middlemen may be specialists in either product or market area or both. If this is the case, several different middlemen are needed to distribute a single product in a country or to distribute several products within a single contiguous area. 17、Discuss the various methods of overcoming blocked channels. Buying equity in the middlemen and thereby gaining entrance to the channel. Buying distribution through wide margins, contract bonuses, and other forms of cash settlements will unblock the channel. Seeking alternative channels or new channels can get around the dilemma. The most expensive means is for the company to build its own channel. 18、What strategy might be employed to distribute goods effectively in the dichotomous small-large middleman pattern which characterizes merchant middlemen in most countries? The strategy in this situation is no different than it would be in the United States in that selection of wholesaler middlemen should be based on at least two criteria. One, to whom the wholesaler sells or distributes, i.e.,

selects a wholesaler to reach a specific target market and the cost efficiency of a particular wholesaler middleman. In most countries if complete distribution of your goods is to be achieved, both small and large middlemen must be utilized to effectively reach all segments of the market. However, the smaller middlemen may be sufficiently inefficient to increase the cost of distribution thereby increasing the cost of the product to a point that it is no longer priced competitively.

19、Discuss the economic implications of charging termination penalties or restricting the termination of middlemen. Do you foresee such restrictions in the United States? Termination penalties restrict the freedom of marketers to adjust to changing needs of the market and therefore reduce market efficiency. Such restrictions may stultify company growth and restrict its flexibility. Risk taking and experimentation are minimized because the marketer has a difficult time terminating experimental channels that fail. There are indicators and a few legal precedents restricting manufacturer’s middleman termination in the United States but growth of such restriction has been slow and cautious. 20、Discuss why Japanese distribution channels can be the epitome of blocked channels. Distribution in Japan has long been considered the most effective non-tariff barrier to the Japanese market. The distribution system is different enough from U.S. or European countertrades to give an advantage to domestic competitors. The Japanese system has three layers (1) a structure dominated by small wholesalers dealing with small retailers, (2) unique trade customs, and, (3) a philosophy shaped by unique culture. It is not unusual for consumer goods to go through three or four intermediaries before reaching the consumer producer—the primary, secondary, regional and local wholesaler, and finally to retailers and consumers. The high degree of fragmentation and specialization makes it difficult to go direct and thus forces a manufacturer to rely on middlemen with an elaborate set of trade customs. Traditions unknown to the U.S. marketer make these channels the epitome of blocked channels. 21、 What are the two most important provisions of the Export Trading Act of 1982? The two most important provisions of the Export Trading Act of 1982 are that companies are exempt from Sherman Antitrust violations for their activities as an export trading company for sales of products outside the United States. This exemption is given by the Department of Commerce as

a certificate which enables the export trading company to have the added assurance that the export program in which they are engaging will not be challenged by the courts. The second provisions of the Export Trading Act is that financial institutions, i.e., banks, can be owners of export trading companies. Prior to the ETC act, banks were not permitted to own commercial enterprises.

Chapter 13
2. “Perhaps advertising is the side of international marketing with the greatest similarities from country to country throughout the world. Paradoxically, despite its many similarities, it may also be credited with the greatest number of unique problems in international marketing.” Discuss. The paradox lies in the fact that advertising methodology is similar from country to country but that the unique problems of company policy limitations, legal aspects, linguistics, media limitations, all pose a distinct problem to the international advertiser. Advertising must be related to the basic and existing motivation patterns. The unique problem is to find this motivation and orient your campaign to the stimuli which must make the majority of the people buy the product. But these problems are generally mechanical and can be easily overcome by long-range research. 3、Someone once commented that advertising is America’s greatest export. Discuss. This comment portrays the fact that America was first to realize that advertising is a crucial element in the integrated marketing plan. Since the American ―philosophy‖ of advertising has penetrated the foreign market, it is said to have been ―exported.‖ Many of America’s largest advertising agencies successfully operate in the foreign market. World advertising is generally patterned after the American advertising approach and system.

4、With satellite TV able to reach many countries, discuss how a company can use satellite TV and deal effectively with different languages, different cultures, and different legal systems. The reality of satellite TV provides the means to have truly global advertising. This raises the question of the effectiveness of standardized advertising versus locally produced ads. Problems of different languages and laws raise doubts about the effectiveness of pan-European ads. In European satellite broadcasting, English is the preferred language for programming since the satellites must cover a territory with 12 languages and 17 national borders. A study done on Sky Channel viewers indicated that the English language programs are unacceptable for many. Germans

watch the English language programs for about a minute before deciding they have the wrong station. European programming is developing, but slowly. One of the reasons for using U.S. made programming is that producing quality programs for each country is too costly. One approach to language differences and the production costs of programming is a six-part series called ―Eurocops.‖ It is a police series in which each country produces one episode based in the country with their own police, in their own style and with their own problems. Each broadcaster provides the episode produced in his country to the other five. The five are then dubbed into the local language and broadcast locally. The idea is to produce European programming but at a much lower cost per country than if each country had to produce all six shows. There is no question that cable, satellites, privatization and the advent of Europe 1992 will revolutionize broadcasting and create greater demand for global advertising. 5、Outline some of the major problems confronting an international advertiser. Of all the elements of the marketing mix, decisions involving advertising are the ones most often affected by cultural differences among country markets. Consumers reflect their culture, its style, feelings, value systems, attitudes, beliefs, and perceptions. Since advertising’s function is to ―interpret or translate the need/want satisfying qualities of product and services in terms of consumer needs, wants, desires, and aspirations,‖ the emotional appeals, symbols, persuasive approaches and other characteristics of an advertisement must coincide with cultural norms to be effective. Reconciling international advertising and sales promotion effort with cultural uniqueness of markets is the challenge confronting the international or global marketer. The global advertiser is confronted with legal and tax considerations, language limitations, media limitation and production and cost limitations. These limitations must all be dealt with effectively if a company is to have an effective advertisement. 6、Defend either side of the proposition that advertising can be standardized for all countries. Yes, the basic theme, objectives, and philosophy of international advertising can be standardized; but the vast mechanical problems most certainly cannot be solved through international standardization. The ad man can adapt his basic skills to all countries. If buying motives and company objectives are the same for various countries, then the advertising approach may be the same. If they vary, then customizing your approach to each country is a must.

7、Review the basic areas of advertising regulation. Are such regulations purely foreign phenomena? a. The basic areas of advertising regulation are (1) the legal type such as Germany’s Comparative Terminology and Direct Comparison Laws, and (2) taxation on advertising, prevalent in Britain, France, and Austria. b. No, these regulations are not purely foreign. Here in the United States there are certain advertising codes and standards that one must follow. These are generally enforced by the advertising industry itself—but the FCC also imposes strict standards of ―truth in advertising.‖ 8、How can advertisers overcome the problems of low literacy in their market? They can overcome low literacy by making use of ads that are self-explanatory, and extensive use of radio which doesn’t have written words. 9、What special media problems confront the international advertiser? Special problems in media—availability, cost, and coverage—confront the international advertiser. Local variations and lack of market data are also great headaches. Availability of media varies from country to country due to government restrictions. Countries have either too many or too few media to adequately cover the majority of the population. As far as price goes, the United States ad man must be prepared to haggle greatly over costs. Most media costs are subject to negotiation. Agency discounts are often split with the client to bring costs down. Coverage problems generally arise when trying to reach certain sections of the population. There are many uneconomical media divisions which do not permit enough regionality. Underlying all these problems is the lack of market information which hampers a good communication mix in foreign markets and causes much waste in ad campaigns. 10、After reading the section in this chapter on direct mail, develop guidelines to be used by a company when developing a direct mail program. Guideline for direct mail should be the same as for any advertising program, i.e., identify the target market, select a medium that reaches the target market, develop a message that communicates how the attributes of your product fit the needs of the target market. On this last point is the issue of translation. You want to avoid the mistake a catalog producer, R.R.

Donnelley, made when a collection of a dozen American catalogs sent to Japanese consumers received only modest responses and orders. Failure to receive sufficient response may have reflected more on the American Showcase package than on the success of direct mail in the Japanese market. Even though the covering letter and brochure describing the catalogs were in Japanese, the catalogs were all in English. This error was further amplified by the fact that the mailing list did not target English-speaking Japanese. In addition to these general issues, special attention needs to give to characteristics of mail. Are mailing lists that include your target market without excessive coverage of non-target market recipients? Does the mailing system impose some additional burden on the recipient? For example, the situation in Chile where the person receiving mail must pay a portion of the postage. 11、Will the ability to broadcast advertisements over TV satellites increase or decrease the need for standardization of advertisements? What are the problems associated with satellite broadcasting? Comment. The ability to broadcast advertising over TV satellites will increase the need for standardization of advertisements. The problems associated with satellite broadcasting will focus on creating an advertisement that will be culturally acceptable in all the countries receiving the BC satellite broadcast and created in such a manner that language differences that may exist within the countries will not affect the message sent. There are those, however, who feel that such an advertisement would be so bland that it would be relatively ineffective. 12、In many of the world’s marketplaces, a broad variety of media must be utilized to reach the majority of the market. Explain. 在世界上很多交易市
场的,各种各样的媒体都必须被用来达到广大的市场。解释

Due to the uneconomical division of media coverage, a large amount of media must be engaged to cover a majority of the market. If an advertiser wants to reach his total market, the expenditure he will have to incur in using a broad variety of media is great. The media competitors have segmented the market so that one must employ most of them in a successful campaign. 13、Cinema advertising is unimportant in the United States but a major media in such countries as Austria. Why?影院广告是不重要的,在美国,但在这
些国家为奥地利各大媒体。为什么呢?

Austria has 20 percent of all advertising in cinema as a solution to its huge taxes against the other media; and the effectiveness of this type of

advertising is reflected by its dollar expenditure in this medium —11 percent of the total ad expenditure in the country per year. 14、“Foreign newspapers obviously cannot be considered as homogeneous advertising entities.” Explain.“外国报纸显然不能被视为同质的
广告公司。 ”解释一下。

Literacy rates vary, and this results in coverage not being constant (selective rather than intensive). Many countries have too many papers to run an effective campaign because one must utilize all of them if one desires to cover large geographic areas. Even then, it is not known if effective readership exists. Political position of the newspaper in which you decide to run an ad may have a bad effect on the reputation of the product. 16、 What is sales promotion and how is it used in international marketing?
什么是促销?如何在国际市场营销中使用?

Sales promotions include all marketing activities other than advertising, personal selling, and publicity that stimulate consumer purchases and improve retailer or middleman effectiveness and cooperation. Sales promotions include such items as cents-off, in store demonstrations, samples, coupons, product tie-ins, contests, sweepstakes, sponsorship of special events, and point-of-purchase displays. Sales promotions are used as short-term efforts directed at consumer and/or retailer to achieve such specific objectives as (1) consumer product trial and/or immediate purchase, (2) consumer introduction to the store, (3) gaining retail point-of-purchase displays, (4) encouraging stores to stock a product, and (5) supporting and augmenting the advertising, personal sales efforts. 17、Show how the communications process can help an international marketer avoid problems in international advertising.如何显示通信过程可以
帮助国际营销避免国际广告问题

Since promotional activities are basically communications processes, all the attendant problems in developing an effective promotional strategy is domestic marketing plus all the cultural problems discussed in the chapter must be overcome to have a successful international promotional program. A major consideration for a foreign marketer is to ascertain that cultural diversity, media limitations, legal problems and constraints, or control of the message can be communicated properly. International advertising and promotional communications fail for a variety of reasons: (1) the message may not get through because of media inadequacy, (2) the message may be received by the intended audience but not be understood because of different cultural interpretations, and (3) the message may be received by the intended audience and be understood but have no effect because the marketer did not correctly assess the needs and wants of the target market.

Because of the many different influences that may jeopardize the success of a promotional strategy, those international executives who understand the communications process will probably be better equipped to manage that diversity since the communications process forces the international advertiser to examine all of those areas where problems in promotion may surface. 19、Discuss the problems created because the communications process is initiated in one cultural context and ends in another.讨论产生的问题,因为
通信过程开始于一体的文化背景下,结束于另一个

The major problem here is that the encoder is in one culture using one’s own SRC and the message is decoded in another culture where the decoders are using their own SRC. The challenge is that the encoder needs to be certain that the message is being encoded in such a manner that it will be decoded in the other culture in a manner in which it is intended. Thus, cultural decoding misinterpretations can be avoided. 20、What is the importance of feedback in the communications process? Of noise?什么是在通信过程中反馈的重要性的噪音 The importance of feedback is to provide the marketers who are generally in one cultural context with an immediate interpretation of the message sent so that any problems created by errors in the communications process or errors created by the different cultural contexts can be adjusted before significant harm occurs. The importance of noise in the system is that such things as competitive activity and other types of confusion can detract from the communications process and affect any or all of the six steps. The most important factor about noise is that it is generally uncontrollable and unpredictable, yet it can influence the outcome. Noise is also a significant reason why feedback in any communications process is so very important.

Chapter 14
2. Why may it be difficult to adhere to set job criteria in selecting foreign personnel? What compensating actions might be necessary? It may be difficult to adhere to set job criteria in selecting foreign salesmen because there may be several different levels of job criteria and the company must move down these levels after having trouble hiring individuals who conform to the established criteria. Compensating actions, which may be necessary, include sales commissions, as this motivates the better personnel and eliminates the receiving of equal wages by both the better and poorer salesmen.

3. Why do the global sales force cause special compensation problems? Suggest some alternate solutions. The global sales force causes special compensation problems because an imbalance is created, as the expatriate salesman would normally receive more than would the foreign salesman, and the foreign salesman will feel aggrieved and mistreated. Motivational devices are valuable in providing solution but perhaps a foreign sales force managed by expatriate salesmen is best.

4. Under what circumstances should expatriate salesmen be utilized? Expatriate salesmen should be used when a more technical approach is necessary, when communication with the parent company is vital, when legal barriers dictate the use of expatriate salesmen, or when the markets will not support full-time salesmen.

5. Discuss the problems which might be encountered in having an expatriate sales manager supervising foreign salesmen. Problems encountered would include the following: legal barriers, a lack of communication between the expatriate sales manager and the foreign sales force, and the expatriate’s inability to adapt to the foreign environment.

6. “To some extent, the exigencies of the manpower situation will dictate the approach to overseas sales organization.” Discuss. Sales organization approach will vary for a number of reasons which are: inadequately trained foreign personnel (so expatriate personnel are required), foreign personnel must be employed for legal reasons, expatriate salesmen are unwilling or unavailable to enter the market, and foreign personnel are unwilling or unavailable to enter the market. 7. How do legal factors affect international sales management? Legal factors may affect international sales management because some countries require that the sales force be composed all or partly of natives. In other cases (such as in Argentina), severe regulations regarding the firing or discharging of personnel force companies to hire expatriates or be stuck with incompetent or noncooperative nationals who cannot be discharged without a legal struggle.

8. How does the sales force relate to company organization? To channels of distribution?

The sales force may be a domestic salesman working from the parent company, expatriate salesmen and/or foreign salesmen. Home office management or decentralization of the above vary with the type of sales force. If a market is small, chances are that it will not be serviced by a resident expatriate salesman or foreign salesmen but by a domestic salesman from the parent company.

9. “It is costly to maintain an international sales force.” Comment. It is certainly more expensive to maintain an international sales force than a domestic sales force because travel, living expenses, interpreters, training and establishing a sales force, etc., all contribute to higher expenses. However, the increasing number of companies going overseas indicates it is well worth it.

10. Adaptability and maturity are traits needed by all salesmen. Why should they be singled out as especially important for international salesmen? These two traits are singled out as especially important for international salesmen because the foreign market is extremely different from the domestic market and calls for different policies and more independent decisions and commitments. The traits are credited with being two of the prime causes for failure of international salesmen.

11. Can a person develop good cultural skills? Yes. Good cultural skills just as good social skills can be developed. Cultural skills provide the individual with the ability to relate to a different culture, even when the individual is unfamiliar with the details of that particular culture. Anyone being sent to another culture should receive training to develop cultural skills. In addition, they should receive specific schooling on the customs, values, and the social and political institutions of the host country. There are a variety of organizations that provide intercultural training.

12. Describe the six attributes of a person with good cultural skills. Someone with cultural skills can: (1) communicate respect and convey verbally and nonverbally a positive regard and sincere interest in people and their culture; (2) tolerate ambiguity and cope with cultural differences and the frustration that frequently develops when things are different and circumstances change; (3) display empathy by understanding other people’s needs and differences from their viewpoint rather than from the individual’s own viewpoint; (4) be nonjudgmental, avoid judging the

behavior of others on their own value standards; (5) recognize and control the SRC, that is, recognize their own cultural values as an influence on their perceptions, evaluations, and judgment in a situation; and (6) laugh things off, a good sense of humor helps when frustration levels rise and things do not work out as planned.、

14、Evaluate the three major sources of multinational manpower. Expatriates—declining in importance as foreign nationals are found to fill marketing positions. The cost of an expatriate is often much greater than a foreign national. The advantages of the expatriate are more adequate technical training, better knowledge of the firm and its product, and often better communication with the parent company. The weakness is that the expatriate often suffers from the cultural differences existing in the host company. Cosmopolitan personnel—type of expatriate who is not a national of the parent company’s country. Reflects the growing nature of international business. Used nearly exclusively at the top level of management. Foreign national—an increase in the mobility of foreign nationals is making them more useful to the firm. At the sales level, the foreign national is at an advantage. Salary levels are lower for them as well as their selling expenses, because they are able to transcend legal and cultural barriers. However, they sometimes are too close to the culture which impedes their effectiveness. They sometimes are too close to the culture which impedes their effectiveness. They are most effective in situations which do not require great technical training.

15、Which factors complicate the task of motivating the foreign sales force? The biggest factor is the cultural differences that occur, which cause motivation and behavior to vary from the domestic salesmen. The cultural differences reviewed in Chapters 4 and 7 affect the motivational pattern of the foreign sales force. 16、Why do companies include an evaluation of their employees’ families among selection criteria? An evaluation of employees’ families is becoming more important for overseas assignments since it is recognized that the family’s ability to adjust to a foreign environment may be the most important factor determining whether or not an employee will stay in a foreign assignment for the length of time the company desires.

17、Concern for career and family is the most frequently mentioned reason for managers to refuse a foreign assignment. Why? The most important career-related reservation is that a two-or three-year absence will adversely affect opportunities for advancement. This ―out of sight, out of mind‖ fear is closely linked to the problems of repatriation. Without evidence of forward planning to protect career development, the better qualified and ambitious personnel may decline the offer to go abroad. Concern for one’s family may also interfere with many accepting an assignment abroad. Initially, most potential candidates are concerned with the problems of uprooting a family and taking them into a strange environment. Such questions as the education of the children, isolation from relatives and friends, proper medical and health care, and, in some countries, the potential for violence reflect the misgivings the family may have about relocating in another country. 19、If “the language of international business is English,” why is it important to develop a skill in a foreign language? Discuss. Proponents of language skills argue that learning a language improves cultural understanding and business relationships. Others point out that to be taken seriously in the business community, the expatriate must be at least conversational in the host language. Some recruiters want candidates who speak at least one foreign language even if the language will not be needed in a particular job. Having learned a second language is a strong signal to the recruiter that the candidate is willing to get involved in someone else’s culture. Though most companies offer short, intensive language training courses for managers being sent abroad, many are making stronger efforts to recruit people who are bi- or multilingual. According to the director of human resources at Coca-Cola, when his department searches its data base for people to fill overseas posts, the first choice is often someone who speaks more than one language. The author feels strongly that language skills are of great importance; if you want to be a major player in international business in the future, learn to speak other languages or you might not make it—your competition will speak more than one language.

Chapter 15
2. Discuss the causes and solutions of parallel imports and their effect on price. Parallel imports develop when importers buy products from distributors in one country and sell them in another to distributors who are not part of the manufacturer’s regular distribution system. This practice is lucrative when

wide margins exist between prices for the same products in different countries. There are a variety of conditions that can create the profitable opportunity for a parallel market. Variations in the value of currencies between countries frequently lead to conditions that make parallel imports profitable. When the dollar was high relative to the West German mark, Cabbage Patch dolls were purchased from German distributors at what amounted to a discount and resold in the United States. Purposefully restricting the supply of a product in a market is another practice that can cause abnormally high prices and thus make a parallel market lucrative. Such was the case with the Mercedes-Benz automobile whose supply was limited in the U.S. Americans could buy a Mercedes-Benz automobile which was partially supplied by Americans returning to the United States with cars they could sell for double the price they paid in Germany. This situation persisted until the relative value of the dollar to the mark weakened and the price differential created by limited distribution evaporated. Pricing policies that permit large price differentials between country markets is another condition conducive to the creation of parallel markets. Japanese merchants have long maintained very high prices for consumer products sold within the Japanese market. As a result, prices for Japanese products sold in other countries are often lower than they are in Japan. For example, Japanese can buy Cannon Cameras from New York catalogue retailers and have them shipped to Japan for a price below that of the camera purchased in Japan. In addition to the higher prices for products at home, the rising value of the yen makes these price differentials even wider. For example, the New York price for Panasonic cordless telephones is $59.95 versus $152 in Tokyo and the Sony Walkman is $89.00 versus $165.23. Foreign companies doing business in Japan generally follow the same pattern of high prices for the products they sell in Japan, thus creating an opportunity for parallel markets in their products also. Eastman Kodak prices its film higher in Japan than in other parts of Asia. Enterprising merchants buy Kodak film in South Korea for a discount and resell it in Japan at 25% less than the authorized Japanese Kodak dealers. For the same reasons, Coca-Cola syrup imported from Los Angeles is cheaper than that purchased through normal channels in Japan. The possibility of parallel market occurs whenever price differences are greater than the cost of transportation between two markets. In Europe, because of differing taxes and competitive price structures, prices for the same product vary between countries. When this occurs, it is not unusual

for companies to find themselves competing in one country with their own products imported from a lower priced country. Perfume and designer brands like Gucci and Cartier are especially prone to gray markets. To maintain the image of quality and exclusivity, prices for such products traditionally include high profit margins at each level of distribution, differential prices among markets, limited quantities, and distribution that is restricted to upscale retailers. In the U.S., wholesale prices for exclusive brands of fragrances are often 25% more than wholesale prices in other countries. These are the ideal conditions for a lucrative gray market for unauthorized dealers in other countries who buy more than they need at wholesale prices lower than U.S. wholesalers pay. They then sell the excess at a profit to unauthorized U.S. retailers, but at a lower price than the retailer would have to pay to an authorized U.S. distributor. To prevent parallel markets from developing when such marketing and pricing strategies are used, companies must maintain strong control systems. These control systems are difficult to maintain and there remains the suspicion that some companies are less concerned with controlling gray markets than they claim.

3. Why is it so difficult to control consumer prices when selling overseas? There are many variables which must be considered when attempting to control consumer prices overseas. Among these are: tariffs on imports, ―dumping‖ tariffs, sales taxes, distributive channel costs, added middlemen costs, and shipping costs. It is very difficult to control consumer prices when selling overseas. Price escalation is one of the main reasons, as prices escalate differently. Some profiteering is also found in some countries, thus upsetting any consumer price control. Dumping, being defined differently, is treated differently under various laws making for more varied prices. Firms operating overseas have less ways to protect themselves from price variations and fluctuating exchange rates also tend to increase price fluctuations. In addition, many retailers overseas don’t like price competition and avoid it if possible by raising or lowering their prices.

4. Explain the concept of “price escalation” and tell why it can mislead an international marketer. Price escalation is price increases due to added costs produced by such things as tariffs, taxes, longer lines of distribution, etc. It can mislead many international marketers into thinking that exorbitant prices that are charged in foreign countries for goods that are relatively reasonable in the domestic market can increase profits in the foreign market. This is just the opposite

of the real case in many situations where the effects for price escalation, not added profit, account for the high prices.

5. What are the causes of price escalation? Do they differ for exports and goods produced and sold in a foreign country? Some of the causes of price escalation are: a. profiteering b. shipping costs c. longer channels of distribution d. larger middlemen margins e. special taxes Exports may be subject to all of the above, but many times goods produced and sold in a foreign country may have reduced shipping costs, lower tariffs, and are subject to fewer special taxes.

6. Why is it seldom feasible for a company to absorb the high cost of international transportation and reduce the net price received? A company can seldom reduce their price to an overseas market (by absorbing transportation costs, for example) because if the prices are lower than competition in the country of origin or lower than normal export prices, ―dumping tariffs will just raise the price back up by inducing a new cost on the manufacturer.‖

7. Price escalation is a major pricing problem for the international marketer. How can this problem be counteracted? Discuss. The key to counteracting the problem of price escalation centers on any method that will reduce the price of the product, tariffs, or any other cost in marketing the product. Some of the more frequently used methods are: (1) offsetting tariffs and transportation charges by the net price for goods sold in foreign markets. A problem which may arise here however is the possibility that the importing country will consider this move as dumping. (2) Modify the product in a way that tariffs are reduced. For example, assemble in the foreign country which may lower the tariff and transportation costs. The foreign trade zone is especially useful in this process. (3) Manufacture within the country thereby eliminating tariffs and perhaps also benefiting from lower labor costs. (4) Shorten the channels of distribution especially in those countries that have value added taxes or turnover taxes. (5) Eliminate costly functional features on the product thereby reducing the overall cost and price. For U.S. products this is a reasonable alternative since for many markets U.S. products have unwanted or unnecessary

functional features. In addition, depending on market needs, the overall quality of the product may also be lessened in order to lower the cost of goods. In all of these situations the main thrust is to lower entry cost of the product thereby lowering the tariffs and the transportation cost which are the two major contributors to price escalation.

8. Changing currency values have an impact on export strategies. Discuss. In addition to the risks from exchange rate variations other risks result from changing values of a country’s currency relative to other currencies. A strong dollar produces price resistance since it takes a large quantity of local currency to buy a U.S. dollar. Conversely, when the U.S. dollar is weak, demand for U.S. goods increases since fewer units of foreign currency are needed to buy a U.S. dollar. Each additional market in which a company operates adds to the problem. Currency-exchange rate swings are considered by many global companies to be a major trade barrier. For a company whose long range plans call for continued operation in foreign markets and who wants to remain price competitive, price strategies need to reflect variations in currency values. When the value of the dollar is weak relative to the buyer’s currency (i.e., it takes fewer units of the foreign currency to buy a dollar), companies generally employ cost plus pricing. To remain price competitive when the dollar is strong (i.e., when it takes more units of the foreign currency to buy a dollar), companies must find ways to offset the higher price caused by currency values.

9. “Regardless of the strategic factors involved and the company’s orientation to market pricing, every price must be set with cost considerations in mind.” Discuss. This statement is true, as all products must be priced with cost considerations in mind. However, most firms overplay this aspect of pricing and don’t rely enough on pricing to the market. The latter is usually a higher price; therefore, manufacturers lose by not taking advantage of market pricing.

10. “Price fixing by business is not generally viewed as an acceptable procedure (at least in the domestic market); but when governments enter the field of price administration, they presume to do it for the general welfare to lessen he effects of `destructive’ competition.” Discuss. This statement typifies the general viewpoint of the public (unknowledgeable public), but the statement’s implications are invalid. The statement implies that

price setting is good if done by the government and bad otherwise. This is not always the case. Companies are forever entering into some form of price setting which affects the economy either positively or negatively. Governmental price setting can also be either good or bad. However, government knowledge and research usually results in better forms of action. 11. Do value added taxes discriminate against imported goods? Typically, value added taxes are applied within the country to all products. As a consequence these taxes do not directly discriminate against imported goods. However, imported goods frequently have a higher cost due to tariffs and additional transportation costs and thus may have to pay higher value added taxes. When compared with the lower amount charged to locally produced and nonimported goods, the value added tax may increase the price to the point that the market will not buy the product. However, relatively speaking, value added taxes do not discriminate against imported goods.

12. Explain specific tariffs, ad valorem tariffs, and combination tariffs. Specific tariffs are fees charged at a flat rate per physical unit imported. Ad valorem tariffs are duties levied as a percentage of the value of the goods. Combination tariffs include both of the above.

13. Suggest an approach a marketer may follow in adjusting prices to accommodate exchange-rate fluctuations. Prices may be quoted in the currency of the home country or in terms of some stable monetary unit, such as the U.S. dollar. Hedging (the process of selling or buying foreign currencies in such a manner as to offset exchange fluctuations) may be employed.

14. Explain the effects of indirect competition and how it may be overcome. Indirect competition is competition from goods which are substitutes for a certain product but which are not exactly the same. For example, indirect competition for coffee might come not only from other coffee manufacturers but also from tea manufacturers. This type of competition may be overcome by the same processes that overcome any type of competition: good advertising, fair prices, good services rendered, and achieving a strategic position in the market.

15. Why has dumping become such an issue in recent years?

The growing importance of world trade to individual companies has combined with saturated domestic markets, overproduction and increased competition to encourage dumping in many product areas. Procedures are looking to the marginal revenue contribution which can be gained when products are sold above direct cost into markets not normally sold. In recent years the number of dumping complaints in the United States has exploded and interest in antidumping enforcement and legislation has grown apace.

16. Cartels seem to rise phoenix-like after they have been destroyed. Why are they so appealing to business? Cartels are appealing to business because they allow participating companies greater power by taking over the selling function (pricing, types of goods produced, licensing agreements.) Cartels put industry in a position to promote rationalization and specialization; consequently, technical progress results. Cartels are similar to monopolies in that they benefit at the expense of consumers. Thus, wherever it is politically acceptable, cartels tend to spring up.

17. Discuss the different pricing problems that result from inflation versus deflation in a county. Inflation causes consumer prices to escalate and the consumer is faced with ever rising prices that eventually exclude many consumers from the market. On the other hand, deflation results in ever decreasing prices creating a positive result for consumers but both put pressure to lower costs on everyone in the supply chain. The Japanese economy has been in a deflationary spiral for a number of years. In a country better known for $10 melons and $100 steaks, McDonald’s now sells hamburgers for 52 cents down from $1.09, a flat screen 32 inch color television down from $4000 to $24003 and clothing stores compete to sell fleece jackets for $8, down from $25 two years earlier. 4 Prices have dropped to a point that consumer prices are similar to those they once found only on overseas shopping trips. The high prices prevalent in Japan before deflation allowed substantial margins for everyone in the distribution chain. As prices continued to drop over several years, those less able to adjust costs to allow some margin with deflated prices, fell by the way side. Entirely new retail categories – 100-yen discount shops, clothing chains selling low-cost imported products from
3 4

Brian Bremner and Irene M. Kunii, ―Deflation Nation,‖ BusinessWeek, May 26, 2003, . 22. At least one exception in Japan is Louis Vuitton brand of handbags, leather and other luxury goods that has

managed to raise prices twice on one year despite Japan’s severe deflation. See: Philippe Ries, ―French Luxury Goods Hold Their Own in Japan Despite Euro’s Rise,‖ Agence France-Presse, March 2, 2003.

China, and warehouse-style department stores have become the norm. Sales at discount stores grew by 78% from 1995 to 2000. Discounting is the way to prosper in Japan, which again helps fuel deflation. While those in the distribution chain adjusted to a different competitive environment or gave up, Japanese consumers were reveling in their newfound spending power. Japanese tourists used to travel to the U.S. to buy

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