GMS522 Midterm Exam with complete
solutions
international marketing - ANSWER- the process of planning and conducting
transactions across national borders to create exchanges that satisfy the
objectives of individuals and organizations.
(international sales are seen as secondary to developing the domestic market)
multidomestic marketing strategy - ANSWER- the development of separate
marketing strategies for each country that a firm conducts business activities in
(if you are in latin america there is one strategy for brazil, one for argentina, etc.)
the market concept - ANSWER- the need to identify and satisfy unique customer
needs in order to increase sales, maximize profits and beat competition
global marketing - ANSWER- the marketing activities that are coordinated and
integrated across multiple country markets. integration involves product
standardization (identical brand names, similar advertising messages, consistent
packaging, etc.)
why global marketing activities? - ANSWER- - expansion
- survival: if business is not conducted by the domestic firm on a global level, at
some point they will be beat by their foreign rivals
glocal marketing - ANSWER- attempting to balance standardization with local
customer needs, "think global, act local"
e.g. mcdonalds - in germany mcdonalds sells beer, whereas in the us they have
different perceptions of alcohol, mcdonalds - does not serve beef on the menu in
india due to hindu community's belief system, coca cola - markets "qoo" in japan
,what is globalization? - ANSWER- a trend towards greater interdependence
among national institutions and economies. this is beneficial to consumers bc
they are exposed to a wider array of products and ideal for businesses due to
visible expansion opportunities
two forms of globalization - ANSWER- 1. globalization of markets - convergence
of buyer preferences in markets around the world
2. globalization of production - dispersal of production activities to locations
around the world that are low cost or high quality producers (usually shift
production in an effort to reduce costs)
e.g. in 2010 vietnam replaced china as nike's largest production base worldwide
e.g. b/c trump has imposed tariffs on manufactured products in the US, harley
davidson wants to relocate their production to europe
the five key drivers of globalization - ANSWER- 1. market - differences in brands
2. cost - cost savings
3. environmental - reduction of tariff and non-tariff barriers, reduction of direct
foreign investment barriers
4. competitive - expansion to defend brand from competitors
5. technological - the internet - builds increased awareness of market conditions,
etc.
axel dreher's three dimensions of globalization - ANSWER- 1. economic
integration - examines trade and investment flows between countries and the
extent to which the country uses policy measures to restrict these flows,
constructed from variables such as fdi, imports and exports, portfolio investment,
average tariff rates and income payments to foreign nationals
2. social integration - reflects the flow and movement of ideas, people and info.,
captures data on variables such as tourism flows between countries, telecom
traffic, the number of international letters sent, the number of Internet users, etc.
3. political integration - captures the diffusion of government policies around the
world, incorporates data on the number of embassies in a country, the number of
international organizations to which the country belongs and the number of UN
peacekeeping missions the country participates in
dreher's globalization index - ANSWER- dreher's globalization index and sub-
indexes range from 1 to 100 with increasing values denoting greater globalization
,liability of foreigness - ANSWER- the inherent disadvantages that multinational
firms face when operating in a new host country. this includes all additional costs
multinational firms must bear in order to compete with local firms. foreign firms
are put at a competitive disadvantage b/c they are not always aware of all
political, economic and social conditions of a country
economies of scale - ANSWER- refers to the decrease in per unit cost of
production as the firm increases its level of output (the more available, the less
costly)
economies of scope - ANSWER- refers to the reduced cost per unit as the firm
spreads its total costs (production, marketing, R & D) over a large number of
brands, product lines or target markets
ted levitt's homogeneous markets - ANSWER- ted levitt argued in 1983 that
markets are becoming more homogeneous and could be targeted with
standardized products, people want the same things globally; convergence of
tastes and preferences, technology and communications were the drivers, ted's
work gave rise to the idea of "global marketing"
the anti-globalization movement - ANSWER- many people are angered by
globalization due to the impact of the trend on the poor (low wages), the
environment, women and the ability of sovereign states to make independent
decisions. this anger led to protests such as the wto meeting in seattle on
december 1999 that resulted in violent behaviour
culture - ANSWER- defined as an integrated system of learned behavior patterns
that are distinguishing characteristics of the members of any given society
cultural adaptation - ANSWER- everyone is encultured into a particular culture.
however, problems may arise when a person encultured in one culture has to
adjust to a different culture, also known as becoming "acculturated"
cultural universals - ANSWER- common traits that cut across all cultures such as
mourning, body adornment, decorative art, music, religious rituals and courtship
(common across cultures, but practiced differently)
ethnocentricity - ANSWER- the belief that one's own ethnic group or culture is
superior to that of others. this causes people to view other culture in terms of
their own, causing them to overlook import human and environmental differences
among cultures
, consumer ethnocentricity - ANSWER- you think your culture is superior and
therefore, feel that purchasing foreign products is immoral
e.g. " it is not right to purchase foreign products, because it puts americans out
of jobs"
CETSCALE ethnocentricity - ANSWER- shimp and sharma (1987): measures the
tendency towards being consumer ethnocentric, useful in understanding
negative consumer reactions towards foreign products
consists of 17 items which consumers rank on a scale of 1 (=strongly agree) to 7
(=strongly disagree)
polycentric - ANSWER- highly flexible in making decisions with respect to
marketing, production and technology choices in serving their local customers
regiocentric - ANSWER- firms with a regiocentric attitude view the world as a set
of distinct regional markets, they attempt to coordinate their business activities
and strategies within these regions and not across them
geocentric - ANSWER- standardize products and adapt to the number of markets
they serve
cultural literacy - ANSWER- detailed knowledge of a country that helps the
manager to function effectively within it such as understanding the pace at which
business transactions can be completed
e.g. in mexico business transactions tend to proceed slowly in order to allow time
for the parties to get to know each other more on a personal level, whereas in
north america such personal relationships are not as important and transactions
proceed at a much faster pace
the elements of culture - ANSWER- - language
- religion
- values and attitudes
- manners and customs
- material elements
- aesthetics
- education
- social institutions
in global marketing language is important in: - ANSWER- - collecting information
- providing access to the local society
