1. Global Marketing Management, 4e
Chapter 1 Globalization Imperative
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2. Historical Perspective of U.S. Business Overseas.
U.S. was the dominant supplier of worldwide demand for technology and industrial goods during 1950’s, 60’s and early 70’s.
This resulted in technological & cultural arrogance  complacency (US: manufacturing nation, trading was for inferior nations like Japan) - unprepared for competition first from Europe, then Japan, then Korea, Taiwan, Singapore etc. & now from China and India.
Lost large shares of US markets for textiles, garments, shoes, toys, steel, electronics, small appliances, autos, and much more during the 1970’s, 80’s, and 90’s. Now: worries about “outsourcing”. IK
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3. The State of Business
US accounts for 5% & 18% of the world population & economy respectively
A great majority of world business is conducted outside the US
Business conducted internationally entails considering far more variables & decisions than business conducted in the home country
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4. The State of Business Most firms die young
Avg. corporate life expectancy in Europe & Japan is roughly 13 years
Avg. life expectancy of a global 500 MNC is 40 to 50 yrs.
Few of the firms in the 1970 Fortune 500 are around today
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5. The World – 1. About 210 countries in all; out of which:
About 30 countries are classified as Developed Countries – Also called OECD (Organization for Economic Cooperation and Development) countries. Include U.S., Canada, most of Europe, Japan, Australia, New Zealand, Singapore, Turkey, etc.
Another 30 or so are Middle Income Countries: Korea, Taiwan, Malaysia, Mexico, South Africa, Brazil, Israel, Chile, several Eastern/Southern European countries, Russia, etc.
Another 15 or so are Major Oil Exporters : 11 OPEC members like Saudi Arabia, Kuwait, Iran, Iraq, Indonesia, Nigeria, Venezuela, etc. Plus non-members like Mexico, Russia, U.K., and Norway. IK
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6. The World – 2.
Developing Countries: Most Asian and African countries (A majority of the world’s countries belong here).
Rapidly Developing Very Large Countries: China, India, Brazil, Russia (BRICs)
Poor Countries: Countries stagnant at very low levels of development, e.g., Burma, Bangladesh, Afghanistan, Haiti, Nepal, most sub-Saharan African countries.
The Triad Region (North America, Western Europe,
and Japan) collectively produced over 78% of world
GDP in 2004.
Source: World Trade Organization (WTO) IK
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7. The World – 3.
Big Emerging Markets (BEMs): In the next years, BEMs such as the Chinese Economic Area (CEA: China + HK+ Taiwan), India, South Korea, Mexico, Brazil, Argentina, South Africa, Poland, Turkey, Russia, and the Association of Southeast Asian Nations (ASEAN: including Indonesia, Brunei, Malaysia, Thailand, the Philippines, and Vietnam) will provide major/dominant opportunities in global business.
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8. World’s Largest Countries (by population)
World 6.72 billion 1. China 1.3billion 2. India 1.1b 3. U.S. 305million 4. Indonesia 232m 5. Brazil 188m 6. Pakistan 164m 7. Bangladesh 159m 8. Nigeria 148m 9. Russia 142m 10. Japan 128
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9. World’s Biggest Economies PPP 2007 estimates.
9 Brazil $1.84 trillion
10 Italy $1.79 trillion
11 Spain $1.352 trillion
12 Mexico $1.346 trillion
13 Canada $1.266 trillion
14 South Korea $1.2 trillion
15 Turkey $888 billion
16 Indonesia $838 billion
17 Australia $761 billion
18 Iran $753 billion
Source: CIA World Fact Book
World $65.6 trillion EU $14.4 trillion 1 US $13.8 trillion 2 China $7.0 trillion 3 Japan $4.3 trillion 4 India $3.0 trillion 5 Germany $2.8 trillion 6 UK $2.1 trillion 7 Russia $2.09 trillion 8 France $2.05 trillion
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10. Nationalities of World’s Largest Companies (2008).
1. U.S
2. Japan - 64
3. France - 39
4. Germany - 37
5. Britain - 34
6. China - 29
7. South Korea -15
8. Canada - 14
8. Switzerland - 14
10. Netherlands - 13
11. Spain - 11
12. Italy - 10
13. Australia - 8
14. India - 7
15. Sweden - 6
15. Taiwan - 6
17. Mexico - 5
Source: Forbes
Also see Exhibit 1-1 in the text
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11. International Trade.
Products have been traded across borders throughout recorded civilization, extending back beyond the Silk Road that once connected East with West from Xian (China) to Rome (Italy). The North-South extension of the silk Road connected India to this route. Also important were the North-South trade caravans in Africa.
Total world trade volume in goods and services grew from $7.6 trillion in 2000 to nearly $14 trillion in 2007.
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12. World’s Largest Exporters/Importers
World Imports – 14+ trillion 1. United States $1.97trillion 2. Germany $ 1.09tr 3. China $ 901million 4. United Kingdom $ 617b 5. France $ 600b
World Exports $14+ trillion
1 Germany $1.334 trillion
2 China $ tr.
3 United States $1.149 tr.
4 Japan $677 billion
5 France $548 billion
Source: CIA World Fact Book, 2007
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13. Why Global Marketing is Imperative
Domestic Market Saturation, especially First World markets
Intensifying Global/Domestic competition.
Expanding market opportunities.
Higher margins overseas
Spreading the risk
Customers moving abroad
Need for global cooperation (Global competition brings global cooperation).
The Internet and e-commerce revolution
Etc.
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14. Globalization of Markets: Convergence and Divergence
Per capita income determines buying behavior.
In lower per-capita-incomes countries much of the income is spent on food and other necessities. Very little discretionary spending.
In higher per-capita-income countries discretionary portion of income increases dramatically → increased convergent pressures on consumer buying behavior.
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15. Globalization of Markets: Convergence and Divergence
People with higher incomes tend to enjoy similar educational levels, desire for material positions, leisure time pursuits, and aspirations for the future.
Globalization liberates local cultures from ethnocentricity so consumers become more receptive to new things and choose from a wider, more divergent “choice set” of goods and services.
Divergence of consumer needs is taking place at the same time.
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16. Globalization of Markets: Convergence and Divergence
International trade: exports and imports. International business: international trade and foreign production. Global reach: extensive international penetration of companies. International trade and foreign production activities are managed on a global basis. Growth of Multinational Corporations (MNCs) and intra-firm trade is a major aspect of global markets.
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17. Comparative Advantage Commodity Terms of Trade Factor Endowment Theory
Appendix: Theories of International Trade & the Multinational Enterprise
─ Absolute Advantage
Comparative Advantage
Commodity Terms of Trade
Factor Endowment Theory
International Product Cycle Theory
Economies of Scale
Supply Industry Position
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18. Absolute & Comparative Advantage.
Absolute advantage Suppose country A is better than country B at making automobiles, and country B is better than country A at making bread, then both would benefit if A specialized in automobiles, B specialized in bread and they traded their excess production.
But what if a country A is better than B at making everything? They would still benefit from trade because of the principle of comparative advantage which says that if A is much more superior at making automobiles and only slightly superior at making bread, then A should still invest resources in what it does best — producing automobiles — and export the product to B. B should still invest in what it does best — making bread — and export that product to A even if it is not as efficient as A. Both would still benefit from the trade. A country does not have to be best at anything to gain from trade.
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19. Sources of Comparative Advantage (Resource Endowment).
TM Factors of Comparative Advantage
Sources of Comparative Advantage (Resource Endowment).
(A) Natural Resources (climate, size, location, topography, flora & Fauna, minerals, etc.).
Man-made Resources (Science, technology, engineering, infrastructure, capital, etc.)
Human Resources (number, age distribution, health, size, etc.)
Managerial know-how, education & training
Traditions IK

20. Comparative Advantage – Example.
U.S. vs. China
Both have 1,000lh (labor hour) resources
US: 1lh corn, 5lh microwave
China: 5lh corn, 2lh microwave
Without Trade:
U.S. – 500 corn microwave
China – 100 corn microwave
Total = 600 corn microwave
With trade:
U.S. – 1,000 corn, China – 500 microwave
Total = 1,000 corn microwave ovens
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21. International Product Life Cycle Theory
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22. Global Marketing Management, 4e
Chapter 2
Global Economic Environment
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23. 1. Intertwined World Economy
Foreign direct investment (FDI): investment in manufacturing and service facilities in a foreign country.
In recent decades, companies from many countries have expanded into new markets around the world, thereby adding to the stock of foreign direct investment.
The increase in foreign direct investment has also been promoted by the efforts of many national governments to woo multinationals.
Portfolio investment or indirect investment refers to investments in foreign countries that are withdrawable at short notice, such as foreign stocks and bonds.
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24. 1. Intertwined World Economy
Examples of severe currency fluctuations:
Current US mortgage and credit meltdown → severe worldwide consequences.
1995 Mexican meltdown
Asian financial crisis ( ) Asian financial crisis (caused by China’s devaluation the yuan) →Thai baht lost almost 60% of its purchasing power in dollar terms, Malaysian ringgit 40%, Korean won 50%.
Argentina and Brazil financial crises (2001, 2002) Argentina defaulted and lost 40%of its currency value. It also effected Brazil.
The influence of these short-term money flows are nowadays far more powerful for exchange rates than an investment by a Japanese or German automaker.
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25. Forces Affecting Global Integration and Global Marketing.
Driving Forces
Regional economic agreements
Market needs and wants
Technology
Transportation and communication improvements
Product development costs
Quality
World economic trends
Leverage
Restraining Forces
Management myopia
Organizational culture
National controls
The next slide will show the interplay between the driving and restraining forces. This slide outlines what these forces include.
Regional economic agreements, converging market needs and wants, technology advances, pressure to cut costs, pressure to improve quality, improvements in communication and transportation technology, global economic growth, and opportunities for leverage all represent important driving forces; any industry subject to these forces is a candidate for globalization.
Despite the impact of the driving forces identified previously, several restraining forces may slow a company’s efforts to engage in global marketing. In addition to the market differences discussed earlier, important restraining forces include management myopia, organizational culture, national controls, and opposition to globalization. As
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26. Trade Barriers. - Tariffs
TM Trade Barriers
- Tariffs
Non-tariff Barriers (port charges, import deposits, consular fees, stamp taxes, etc.).
Customs processing/administrative barriers (tariff calculation, customs formalities, administrative obstacles, certification, etc.).
Quantitative restrictions (embargos, quotas, import licenses, bilateral agreements, etc.).
State participation in trade (subsidies, government procurements, government monopolies, etc.).
Technical norms/ standards/consumer protection (regulations: health/safety, product design, sizes/weights & measures, packaging, labeling, trademarks, etc.).
Flag protectionism IK
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27. 2. Country Competitiveness
Country competitiveness refers to the productiveness of a country, which is represented by its firms’ domestic and international productive capacity.
Country competitiveness is not a fixed thing.
The role of human skill resources has become increasingly important as a primary determinant of industry and country competitiveness
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28. 2. Country Competitiveness (2007 Report).
Twenty Most Competitive
1. United States 5.67
2. Switzerland 5.62
3. Denmark 5.55
4. Sweden 5.54
5. Germany 5.51
6. Finland
7. Singapore 5.45
8. Japan
9. United Kingdom
10. Netherlands 5.40
11. Korea
12. Hong Kong 5.37
13. Canada 5.34
14. Taiwan 5.25
15. Austria 5.23
16. Norway 5.20
17. Israel
18. France 5.18
19. Australia 5.17
20. Belgium 5.10
Twenty Least Competitive
112. Burkina Faso 3.43
113. Suriname 3.40
114. Nepal 3.38
115. Mali
116. Cameroon 3.37
117. Tajikistan 3.37
118. Madagascar 3.36
119. Kyrgyz Republic 3.34
120. Uganda 3.33
121. Paraguay 3.30
122. Zambia 3.29
123. Ethiopia 3.28
124. Lesotho 3.27
125. Mauritania 3.26
126. Guyana 3.25
127. East Timor
128. Mozambique 3.02
129. Zimbabwe 2.88
131. Burundi 2.84
132. Chad
Source: World Economic Forum, Global Competitiveness Report
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29. Evolution of Cooperative Global Trade Agreements
International Trade Organization (ITO): Agreed upon Bretton Woods (1944) but never ratified by the U.S. GATT (General Agreement on Tariffs and Trade): agreed upon in Geneva and adopted by 23 countries in1947 Purpose: provide an international forum to encourage free trade among member states Means: 1. regulation and reduction of tariffs on traded goods, 2. provision of a common mechanism for resolving trade disputes Name: Changed to World Trade Organization (WTO) on January 1, 1995 (based in old GATT offices in Geneva)
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30. Evolution of Cooperative Global Trade Agreements
WTO continues to supervise & liberalize trade between nations (153 members as of 12/9/2008). It deals with the rules of trade between nations; negotiates and implements new trade agreements, and is in charge of policing member countries‘ adherence to all the WTO agreements Functions: • Administers WTO trade agreements • Forum for trade negotiations • Handles trade disputes (has the power to to enforce rulings) • Monitors national trade policies (countries found in violation of WTO rules are expected to change policies or else face sanctions)
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31. 4. Evolution of Cooperative Global Trade Agreements
WTO’s ninth round---called the “Doha Development Agenda” (Doha Round) was launched in Doha, Qatar in November It facilitated the way for China and Taiwan to get full membership in the WTO.
Interim deal in December 2005 to end farm export subsidies by 2013 seemed to prevent the collapse of the this round of talks, but didn’t.
The Doha Round negotiations are considered to have failed as of August, 2008.
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32. Information Technology and the Changing Nature of Competition
Over the Internet, any piece of electronically represented intellectual property can be copied.
The Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement was concluded as part of the GATT Uruguay Round. Update to accord ensuring patent protection does not block developing countries’ access to affordable medicines is at the top of the agenda.
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33. Information Technology and the Changing Nature of Competition
Proliferation of E-Commerce and Regulations: Countries’ regulators have not kept pace with the rapid proliferation of international e-commerce and Internet-related activities.
In many countries, rules and regulations are vague regarding e-commerce transactions.
The United Nations Commission on International Trade Law (UNCITRAL) has formed a Working Group on Electronic Commerce to reexamine these treaties.
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34. Levels of Economic Integration
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35. European Union.
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36. EU Membership History 1952: Belgium, Netherlands Luxemburg, Germany,
France & Italy
1973: Denmark, Ireland, UK
1981: Greece
1986: Portugal, Spain
1995: Austria, Finland, Sweden
2004: Cyprus, the Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Malta, Poland, the Slovak
Republic and Slovenia
2007: Romania, Bulgaria (27 countries) IK
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37. EU’s Governing Bodies.
Council of European Union - Main decision-making body. One minister from each member country.
European Parliament (Legislative body)
European Commission (Bureaucracy)
Court of Justice - Ensures that Community laws are uniformly interpreted and applied
Court of Auditors - Checks EU’s receipts and expenses and manages the budget. IK
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38. Other Agreements. North America: NAFTA
Europe: EFTA (European Free Trade Association): Iceland, Norway, Switzerland and Liechtenstein.
Africa: Different agreements. Recent example: ECOWAS (Economic Community of West African States)
Latin America: MERCOSUR (Southern Common Market), LAIA (Latin American Integration Association); CENCOM (Central American Common Market); ANCOM (Andean Common Market); CARICOM (Caribbean Community and Common Market)
Asia: ASEAN (Association of South East Asian Nations); SAARC (South Asian Association for Regional Cooperation)
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39. Mercosur.
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40. Global Marketing Management, 4e
Chapter 3
Financial Environment
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41. 2. Development of Today’s International Monetary System
The 1944 Bretton Woods (New Hampshire) conference also established the
IMF (International Monetary Fund) to:
promote international monetary cooperation
expansion and balanced growth of international trade
promote orderly exchange arrangements
assist in the establishment of a multilateral system of payments in respect to current transactions between member nations; to eliminate foreign exchange restrictions
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42. 2. Development of Today’s International Monetary System
The IMF makes temporarily loans fund’s resources to members under adequate safeguards, to help them correct balance of payment problems, and
To shorten the duration and lessen the degree of disequilibrium in the international balance of payments to members
IMF resources are in SDRs whose value is determined by a weighted average of the U.S. dollar, the yen, the euro, and the British pound.
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43. 2. The World Bank Group.
IBRD (1945) International Bank for Reconstruction
and Development
IFC (1956) International Finance Corporation
IDA (1960) International Development Association
MIGA (1988) Multilateral Investment Guarantee
Agency, and
ICSID (1966) International Centre for Settlement of
Investment Disputes
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44. 4. Foreign Exchange and Exchange Rates
Spot versus forward exchange rates
Fixed exchange rates
Floating exchange rates
Free (no government intervention)
Managed (some government intervention)
To avoid the risk of currency fluctuations, companies use hedging.
Target exchange rate
Exchange rate pass through
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45. Hedging Example
Hedging involves engaging in 2 equal but opposite transactions in the Spot and Forward markets simultaneously
Spot Market Forward Market
2/1/ /1/09
Bought 10mm £10/$ Sold 10mm 5/31/09 £9/$
4/20/ /20/09
Sold 10mm £11/$ Bought 10mm £10/$
Result: 1 £/$ loss Result: 1 £/$ profit
Net result= +/- 0 (perfect hedge)
Hedging is made possible because prices in the spot and the forward markets almost always move in the same direction by the same amount and there are speculators on both sides of expected future price movements.

46. Foreign Exchange and Exchange Rates
Factors influencing Foreign Exchange Rates
Macroeconomic Factors: Relative inflation, balance of payments, foreign exchange reserves, economic growth, government spending, money supply growth, and interest rate policy.
Political Factors: Exchange rate control, election year or leadership change.
Random Factors: Unexpected and/or unpredicted events, fear of uncertainty, etc.
Many countries attempt to maintain a lower value for their currency in order to encourage exports.
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47. Big Mac Earn Time.
Ten fastest earned Tokyo - 10 min Los Angeles - 11 min Chicago - 12 min Miami - 12 min New York City - 13 min Auckland - 14 min Sydney - 14 min Toronto - 14 min Zürich - 15 min Dublin - 15 min
Ten slowest earned Sofia - 69 min Bucharest - 69 min Bombay - 70 min Manila - 81 min Mexico City - 82 min Caracas - 85 min Jakarta - 86 min Lima - 86 min Nairobi - 91 min Bogotá - 97 min
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48. Balance of Payments
The balance of payment (BOP): summary of all transactions between a country & its residents and other countries (& their residents) over a specified time period (a month, quarter, or year).
The BOP transactions contain three categories
Current account
Capital account
Official reserves
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49. Balance of Payments Categories
Current account = Balance of trade + Net factor income (fees, interest, dividends etc.) + net unilateral transfers from abroad
Financial account (IMF)/Capital account (economics) = Increase in foreign ownership of domestic assets - Increase in domestic ownership of foreign assets (= FDI) + Portfolio investment + Other investment
Official reserves = Stock of reserve assets at a country’s monetary authority (official gold reserves + foreign exchange reserves + (IMF) SDRs + any foreign property held by such central banks)
Net errors and omissions: any necessary corrections in the above three accounts
Source: Wikipedia
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50. Responses to the Regional Financial Crises
Consumer response to the recession (see Exhibit 3-7 in your text)
Corporate response to the recession
Pull-out
Emphasize a product’s value
Change the product mix
Repackage the goods
Maintain stricter inventory
Look outside the region for expansion opportunities
Increase advertising in the region
Increase local procurement
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51. Global Marketing Management, 4e
Chapter 4
Global Cultural Environment and Buying Behavior
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52. Introduction Culture drives buyer behavior & consumer needs
A culture influences consumption processes:
Access (economic, physical)
Buying behavior (brand/country perceptions, loyalty, attitudes about marketing & consumption, etc.)
Consumption characteristics (products vs. service, cultural orientation - traditional vs. modern, social influences, urban vs. rural, etc.)
Disposal (resale, recycle, repair, social responsibility, environmental orientation, etc.) (see Exhibit 4-1 in your text).
Global business means dealing with consumers, strategic partners, distributors, and competitors with different cultural mindsets.
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53. 1. Definition of Culture
Numerous definitions of culture. Your text: culture (in a business setting) is defined as being a learned, shared, compelling, interrelated set of symbols whose meanings provide a set of orientations for members of society.
Cultures are often defined by national borders, especially when countries are isolated by natural barriers.
Cultures contain subcultures that may have little in common with one another but a lot in common with the mainstream culture
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54. 2. Elements of Culture
Material life (technologies that are used to produce, distribute, and consume goods and services)
Language (language has two parts: the spoken and the silent language)
Social Interaction (social interactions among people; nuclear family, extended family; reference groups), proxemics (differences in personal and public space), eye contact, body contact etc.
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55. Language Written/Spoken/Body Language Forms of Address
Direct/Contextual
Hierarchy
Diversity
Etc.
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56. 2. Elements of Culture
Aesthetics (ideas and perceptions that a culture upholds in terms of beauty and good taste)
Religion (community’s set of beliefs that relate to a reality that cannot be verified empirically)
Education (One of the major vehicles to channel from one generation to the next)
Value System (values shape people’s norms and standards)
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57. Religion
Religious Philosophies: Christian, Muslim, Hindu, Buddhist, Confucian, Shinto, Jewish, others Superstitions and other supernatural beliefs
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58. Education Levels of Participation Literacy Secondary Vocational
Tertiary
Technical, Professional
Etc.
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59. 3. Cross-Cultural Comparisons
Hofstede’s Cultural Classification Scheme
(see Exhibits 4-7A & 4-7B):
Power distance: The degree of inequality among people in a culture
Uncertainty avoidance: cultural preference for structured situations with clear rules over unstructured ones
Individualism: preference for individual vs. group actions.
Masculinity: The importance of “male” vs. “female” values
Long-term vs. short-term orientation: Future versus past and present orientations
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60. Japan vs. The US.
Variable Japan US Personal Emphasis Group Individual Attitude Self-denial, Dependence Self-expressive, Independence Social Emphasis Obligations Rights Style Cooperation Competition Assumptions Interdependence Independence View of Self Organization Man Individual with Skill Cultural Attitude 1 We are unique Everybody is like us Cultural Attitude 2 Willing to borrow/adopt/ NIH syndrome adapt Organizational goal 1 Share of the market Profitability, Financial success Organizational goal 2 World markets National markets Organizational goal 3 Quality, Customer value Production, Financial return
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61. 4. Adaptation to Cultures
Self-reference criterion (SRC): people’s unconscious tendency to resort to their own cultural experience and value systems to interpret a given business situation.
Ethnocentrism: the feeling of or belief in one’s own cultural superiority.
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62. 5. Culture and the Marketing Mix
Product Policy: some products are more culture-bound than others. Food, beverages, and clothing products tend to be very culture bound. Pricing: Pricing policies are driven by four Cs: Customers, Company (costs, objectives, strategy), Competition and Collaborators (e.g., distributors) Distribution: Cultural variables may also dictate distribution strategies. Promotion: Culture typically has a major influence on this a firm’s communication strategy most visible marketing mix component..
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63. Global Marketing Management, 4e
Chapter 5
Political and Legal Environments

64. Political Environment - Individual Governments
Structure of Government:
Ideology
Communism
Socialism
Capitalism
Political Parties
Single-party-dominant countries
Dual-party systems
Multi-party systems
Government Policies and Regulations: Designed to promote a country’s interests in the international arena regarding national security, developing new industries, protecting declining industries. creating employment, etc.
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65. Consequences Of Political Actions – 1.
Indigenization/Domestication
Nationalization (Acceptable according to international law if: satisfies public purpose & includes compensation)
Expropriation (prompt, effective, fair compensation)
Confiscation (no compensation)
Local content/local buying/local hiring laws
Discriminatory taxes
Discriminatory pricing of resources
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66. Consequences Of Political Actions – 2.
Threat of equity dilution
Joint-venture pressure
Import/Export restrictions
Profit repatriation restrictions
Selective boycotts
Price controls
Terrorism
Etc….
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67. POLITICAL-RISK INDICATORS.
ECONOMIC - GDP, Inflation, Capital flight - Foreign debt, Food output - Commodity dependence... POLITICAL - Wars or involvement in foreign conflicts... - Relations with neighbors - Degree of authoritarianism (use of coercion to retain power) - Legitimacy of government/Mechanisms for transfer of power - Military or political control - Politically motivated violence SOCIETAL - Urbanization,, - Corruption, nepotism… - Social Unrest (ethnic, language, religious… fundamentalism) - Xenophobia, Extreme nationalism
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68. Political Risk Assessment.
Risk Assessment Techniques
- Grand Tour (include AmCham)
- Old Hand
- Delphi Technique
Quantitative Methods
Commercial services
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69. Risk Reduction Strategies.
Local Partners
Invaluable Status
Critical Technologies
Frequent Tech. transfers
Critical Parts from Home Country
Vertical Integration
Local Borrowing
Minimizing Fixed Investments
Political Risk Insurance
Etc.
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70. 3. Terrorism and the World Economy
According to an IMF study, the September 11, 2001 terrorist attacks resulted in short-term lost economic output worth an estimated as $47billion, the stock market lost $1.7 trillion. In addition, 125,000 workers were laid off for 30 days.
Terrorist activities disrupt international movement of supplies and merchandise and financial flows.
Terrorists are active in many countries and often target large firms to get money for profit, weapons, payrolls, bribes, expenses, etc. Piracy has historically been practiced in most of the world’s seas. During 2008, Somali pirates captured 42 ships and received $30million in ransom. Have already captured about 40 ships in
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71. International Legal Environment - 1
Types of Legal Systems: Common Law Code (written) Law Civil Law Commercial Law Islamic Law International Law (the law of nations) comes from three main sources: Customs, International treaties, Court decisions
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72. International Legal Environment - 2
U. S. Laws
- The Sherman Antitrust Act (1890)
The Clayton Act (1914)
Foreign Corrupt Practices Act (FCPA), 1977: prohibits the payment of any money or anything of value to a foreign official, political party, or any candidate for political office for purposes of obtaining, retaining, or directing business.
FCPA does not prohibit so called facilitating or grease payments. It also does not prohibit bribery payments to nongovernmental personnel.
Local laws governing business practices
─ Competition, fraud, consumer protection, labor rights, routine business practices, etc.
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73. Global Marketing Management, 4e Global Marketing Research
Chapter 6
Global Marketing Research

74. Introduction Major challenges faced by global marketing researchers:
Complexity of research design due to environmental differences
Lack and inaccuracy of secondary data
More variables are involved
Communication across cultural barriers
Time and cost requirements to collect primary data
Coordination of multicountry research efforts
Difficulty in establishing comparability across multi-country studies
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75. Information Needs.
For market selection: Information about the country, area, and/or market
In-country marketing: Specific market information used to make product, promotion, distribution, and price decisions and to develop marketing plans
In-country requirements: Information necessary to forecast future marketing requirements by anticipating social, economic, consumer, and industry trends within specific markets or countries
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76. Selecting the Target Country
Initial screening process:
1. Select indicators and collect data
2. Determine importance of country indicators
3. Rate the countries in the pool on each
indicator
4. Compute overall score for each country
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77. Secondary Global Marketing Research
Problems with Secondary Data Research:
Accuracy
Age
Reliability over time
Comparability (functional or conceptual equivalence)
Lumping of data
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78. Sources of Secondary Data
Some Secondary Data Sources:
National governments, Regional organizations, UN
agencies
Banks – international, development, regional, local
Business/Trade publications
US and foreign consulting/research firms
Universities
Other Internet sources and databases
etc.
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79. Problems of Gathering Primary Data.
Language barrier (questionnaires must have functional and scalar equivalency)
Inability/unwillingness of respondents to state their opinions
Cultural response bias
Situational response bias
Respondent unfamiliarity with research products, brands, services, usage etc.
Inappropriate interviewers
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80. Fixing Translation Errors.
(1) Back Translation: the questionnaire is translated from one language to another, and then a second party translates it back into the original. (2) Parallel Translation: more than two translators are used for the back translation; the results are compared, differences discussed, and the most appropriate translation selected.
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81. New Research Technologies.
Several different uses for the Internet in
international research:
(1) Online surveys and buyer panels (CATI - Computer-Assisted Telephone Interviewing, CAPI - Computer-Assisted Personal Interviewing)
(2) Online focus groups
(3) Web visitor tracking
(4) Advertising measurement
(5) Customer identification systems
(6) marketing lists
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82. Rules for Market Size Estimates
Use several different methods.
Don’t be misled by numbers.
Don’t be misled by fancy methods.
Do a sensitivity analysis by asking what-if questions.
Look for interval estimates with a lower and upper limit rather than for point estimates.
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83. Estimating Market Demand.
Some more useful methods of forecasting
demand are:
Expert Opinion:
Analogy: assumes that demand for a product develops in similar ways in all countries as comparable economic development occurs in each country
(3) Chain Ratio Method
(4) Trade Audit
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84. Management of Global Marketing Research
Selecting a Research Agency:
Consider:
Level of expertise
Qualifications
Track record
Credibility and experience
International/regional coverage
Client record
Coordination of Multi-Country Research:
Chapter 1

85. End of Ch. 6
Chapter 1