INSTRUCTOR'S MANUAL
GLOBAL MARKETING MANAGEMENT
9TH EDITION
CHAPTER 1: GLOBALIZATION IMPERATIVE
REVIEW QUESTIONS
1. Discuss the reasons why international business is much more complex today
than it was 20 years ago.
In today’s changing business world, the commonly cited reasons for increasingly
complex international business environments are:
a. Saturation of domestic markets and more sophisticated consumers.
b. Emerging markets.
c. Global consumer convergence.
d. More consumers and markets to analyze.
e. Increasing global competition that impacts the international as well as the
domestic environment.
f. Need for global cooperation and expanding international opportunities.
g. More divergent ‘choice sets’ found in consumers.
h. Political and governmental barriers.
i. Ethical and moral concerns.
j. Cultural barriers.
k. Shifting multinational environments.
l. Role of the Internet and electronic commerce, especially in B2B, B2C, and C2C
commerce.
2. What is the nature of global competition?
The new view toward global competition is that it includes domestic as well as foreign
competitors. Multinationals from developed countries and emerging markets have
expanded to the extent that they can begin to think globally rather than on a country-by-
country or region-by-region basis. In order to do this, new formats for strategies and
subsidiaries are being developed. Products and services are being adapted or standardized
(as the market dictates) at the global and regional levels. Proactive strategies are
replacing reactive strategies.
,3. Does international trade accurately reflect the nature of global competition?
If the marketer only thinks in terms of exports and imports, the answer is no. If the
marketer does not consider the amount of business that is being done between the
subsidiaries of the same multinational or global firm, then the answer is no. If the global
competitor truly is designing strategy and policy to fit the current international trade
environment, the competitor uses international trade as a component of the firm’s
strategy formulation process.
4. Why are consumption patterns similar across industrialized countries despite
cultural differences?
As a country or a market’s disposable income increases, research has shown that more of
the discretionary income is spent on non-subsistence goods and services. Once the
average person passes about $20,000 per capita income per year, that person begins to
become a viable prospect for non-subsistence goods. The need for goods in general is
similar. The need for specific goods may be affected by cultural differences.
5. How is global marketing different from international marketing?
Global marketing is a more advanced phase of international marketing. Once export
marketing becomes an integral part of a company’s marketing activity, it begins to seek
growth and expansion through international marketing. The emphasis is polycentric
(emphasis on product and promotional adaptation in foreign markets--wherever
necessary). In global marketing, fragmentation caused by international marketing is
overcome.
Global marketing refers to marketing activities by companies that emphasize:
a. 1). Standardization efforts---standardizing marketing programs across
different countries and regions.
b. 2). Coordination across markets---reducing cost inefficiencies and duplication
of efforts at the national and regional levels.
c. 3). Global integration---participating in many major world markets to gain
competitive advantage.
6. Why do you think a company should or should not market the same product in
the same way around the world?
,Students should be encouraged to think about the standardization versus the adaptation
alternative. Standardization has the advantages of efficiencies in production and
communication as well as economies of scale. Adaptation has the advantages of
customization, matching the true unique desires and wants of the customer, and the
ability to compete against local competition more effectively.
Students should be encouraged to think of product examples for standardization and then
adaptation. Try to make a case for each form being effective.
7. What is proactive standardization?
In global marketing, the trend may be to see the world as one giant market. The trick to
being successful in more than one market (while still retaining the advantages of
production economies of scale) may be in finding products that everyone needs (with
little adaptive change). This response to true global competitors may be a very good
defense against market erosion.
8. How is the Internet reshaping the nature of global marketing?
The Internet was one of the most useful inventions of the 20th Century. In the global
marketplace, the Internet and its Web-related activities have brought a multitude of
benefits to companies, consumers, and producers. The Internet’s future prospects and
fundamentals seem very strong especially in the area of B2B e-commerce. As mentioned
in the text, there is still a “digital divide” between developed and developing countries
regarding the availability of Internet marketing and its Web-related activities. In the
coming years, many companies will be using this medium to reach far-flung places on the
earth. In short, the Internet will help connect buyers and suppliers in most efficient and
effective ways.
DISCUSSION QUESTIONS
INSTRUCTOR’S NOTE: Discussion Questions are found at the end of each chapter in
the text. These questions (in many cases) are too lengthy to repeat in this manual.
Suggestions for answering and discussing the questions are presented in this section.
Many of the questions require student opinion and judgment.
1. The United States and Japan, the two largest developed economies in the world, and
their imports and exports put together comprise only 20 to 30 percent of their GDPs.
However, this percentage has not changed much over the last three decades for both
, of these countries. Does this imply that the corporations and the media may be
overemphasizing globalization? Discuss why you agree or do not agree with the last
statement.
• Students should discuss the trends, not just current percentages.
• Students should also mention how firms are outsourcing production to lower cost
countries.
• Their opinions may depend, in part, on their country of origin.
2. Merchandise trade today accounts for less than 2 percent of all the foreign exchange
transactions around the world. Can one deduce that merchandise plays an
insignificant role in today’s economies? Why or why not?
• It was conventional wisdom that world merchandise trade would on average grow
by twice the annual growth rate of global GDP.
• Developing countries accounted for 43 percent of world merchandise in 2013.
These markets are likely to grow rapidly in the future.
3. A major cereal manufacturer produces and markets standardized breakfast cereals to
countries around the world. Minor modifications in attributes such as sweetness of the
product are made to cater to local needs. However, the core products and brands are
standardized. The company entered the Chinese market a few years back and was
extremely satisfied with the results. The company’s sales continue to grow at a rate of
around 50 percent a year in China. Encouraged by its marketing success in China and
other Asian countries, and based on the market reforms taking place, the company
started operations in India by manufacturing and marketing its products. Initial
response to the product was extremely encouraging, and within one year the company
was thinking in terms of rapidly expanding its production capacity. However, after a
year, sales tapered off and started to fall. Detailed consumer research seemed to
suggest that while the upper-middle social class, especially families where both
spouses were working, to whom this product was targeted, adopted the cereals as an
alternative meal (i.e., breakfast) for a short time, they eventually returned to the
traditional Indian breakfast. The CEOs of some other firms in the food industry in
India are quoted as saying that non-Indian snack products and restaurant business are
the areas where multinational companies (MNCs) can hope for success. Trying to
replace a full meal with a non-Indian product has less of a chance of succeeding. You
are a senior executive in the international division of this food MNC with experience
of operating in various countries in a product management function. The CEO plans
to send you to India on a fact-finding mission to determine answers to these specific
questions. What, in your opinion, would be the answers to these questions:
GLOBAL MARKETING MANAGEMENT
9TH EDITION
CHAPTER 1: GLOBALIZATION IMPERATIVE
REVIEW QUESTIONS
1. Discuss the reasons why international business is much more complex today
than it was 20 years ago.
In today’s changing business world, the commonly cited reasons for increasingly
complex international business environments are:
a. Saturation of domestic markets and more sophisticated consumers.
b. Emerging markets.
c. Global consumer convergence.
d. More consumers and markets to analyze.
e. Increasing global competition that impacts the international as well as the
domestic environment.
f. Need for global cooperation and expanding international opportunities.
g. More divergent ‘choice sets’ found in consumers.
h. Political and governmental barriers.
i. Ethical and moral concerns.
j. Cultural barriers.
k. Shifting multinational environments.
l. Role of the Internet and electronic commerce, especially in B2B, B2C, and C2C
commerce.
2. What is the nature of global competition?
The new view toward global competition is that it includes domestic as well as foreign
competitors. Multinationals from developed countries and emerging markets have
expanded to the extent that they can begin to think globally rather than on a country-by-
country or region-by-region basis. In order to do this, new formats for strategies and
subsidiaries are being developed. Products and services are being adapted or standardized
(as the market dictates) at the global and regional levels. Proactive strategies are
replacing reactive strategies.
,3. Does international trade accurately reflect the nature of global competition?
If the marketer only thinks in terms of exports and imports, the answer is no. If the
marketer does not consider the amount of business that is being done between the
subsidiaries of the same multinational or global firm, then the answer is no. If the global
competitor truly is designing strategy and policy to fit the current international trade
environment, the competitor uses international trade as a component of the firm’s
strategy formulation process.
4. Why are consumption patterns similar across industrialized countries despite
cultural differences?
As a country or a market’s disposable income increases, research has shown that more of
the discretionary income is spent on non-subsistence goods and services. Once the
average person passes about $20,000 per capita income per year, that person begins to
become a viable prospect for non-subsistence goods. The need for goods in general is
similar. The need for specific goods may be affected by cultural differences.
5. How is global marketing different from international marketing?
Global marketing is a more advanced phase of international marketing. Once export
marketing becomes an integral part of a company’s marketing activity, it begins to seek
growth and expansion through international marketing. The emphasis is polycentric
(emphasis on product and promotional adaptation in foreign markets--wherever
necessary). In global marketing, fragmentation caused by international marketing is
overcome.
Global marketing refers to marketing activities by companies that emphasize:
a. 1). Standardization efforts---standardizing marketing programs across
different countries and regions.
b. 2). Coordination across markets---reducing cost inefficiencies and duplication
of efforts at the national and regional levels.
c. 3). Global integration---participating in many major world markets to gain
competitive advantage.
6. Why do you think a company should or should not market the same product in
the same way around the world?
,Students should be encouraged to think about the standardization versus the adaptation
alternative. Standardization has the advantages of efficiencies in production and
communication as well as economies of scale. Adaptation has the advantages of
customization, matching the true unique desires and wants of the customer, and the
ability to compete against local competition more effectively.
Students should be encouraged to think of product examples for standardization and then
adaptation. Try to make a case for each form being effective.
7. What is proactive standardization?
In global marketing, the trend may be to see the world as one giant market. The trick to
being successful in more than one market (while still retaining the advantages of
production economies of scale) may be in finding products that everyone needs (with
little adaptive change). This response to true global competitors may be a very good
defense against market erosion.
8. How is the Internet reshaping the nature of global marketing?
The Internet was one of the most useful inventions of the 20th Century. In the global
marketplace, the Internet and its Web-related activities have brought a multitude of
benefits to companies, consumers, and producers. The Internet’s future prospects and
fundamentals seem very strong especially in the area of B2B e-commerce. As mentioned
in the text, there is still a “digital divide” between developed and developing countries
regarding the availability of Internet marketing and its Web-related activities. In the
coming years, many companies will be using this medium to reach far-flung places on the
earth. In short, the Internet will help connect buyers and suppliers in most efficient and
effective ways.
DISCUSSION QUESTIONS
INSTRUCTOR’S NOTE: Discussion Questions are found at the end of each chapter in
the text. These questions (in many cases) are too lengthy to repeat in this manual.
Suggestions for answering and discussing the questions are presented in this section.
Many of the questions require student opinion and judgment.
1. The United States and Japan, the two largest developed economies in the world, and
their imports and exports put together comprise only 20 to 30 percent of their GDPs.
However, this percentage has not changed much over the last three decades for both
, of these countries. Does this imply that the corporations and the media may be
overemphasizing globalization? Discuss why you agree or do not agree with the last
statement.
• Students should discuss the trends, not just current percentages.
• Students should also mention how firms are outsourcing production to lower cost
countries.
• Their opinions may depend, in part, on their country of origin.
2. Merchandise trade today accounts for less than 2 percent of all the foreign exchange
transactions around the world. Can one deduce that merchandise plays an
insignificant role in today’s economies? Why or why not?
• It was conventional wisdom that world merchandise trade would on average grow
by twice the annual growth rate of global GDP.
• Developing countries accounted for 43 percent of world merchandise in 2013.
These markets are likely to grow rapidly in the future.
3. A major cereal manufacturer produces and markets standardized breakfast cereals to
countries around the world. Minor modifications in attributes such as sweetness of the
product are made to cater to local needs. However, the core products and brands are
standardized. The company entered the Chinese market a few years back and was
extremely satisfied with the results. The company’s sales continue to grow at a rate of
around 50 percent a year in China. Encouraged by its marketing success in China and
other Asian countries, and based on the market reforms taking place, the company
started operations in India by manufacturing and marketing its products. Initial
response to the product was extremely encouraging, and within one year the company
was thinking in terms of rapidly expanding its production capacity. However, after a
year, sales tapered off and started to fall. Detailed consumer research seemed to
suggest that while the upper-middle social class, especially families where both
spouses were working, to whom this product was targeted, adopted the cereals as an
alternative meal (i.e., breakfast) for a short time, they eventually returned to the
traditional Indian breakfast. The CEOs of some other firms in the food industry in
India are quoted as saying that non-Indian snack products and restaurant business are
the areas where multinational companies (MNCs) can hope for success. Trying to
replace a full meal with a non-Indian product has less of a chance of succeeding. You
are a senior executive in the international division of this food MNC with experience
of operating in various countries in a product management function. The CEO plans
to send you to India on a fact-finding mission to determine answers to these specific
questions. What, in your opinion, would be the answers to these questions:
