Solution Manual for Marketing 12th Edition

Lamb Hair and McDaniel 111182164X

9781111821647
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Chapter 5 ♦ Developing a Global Vision 5-1

CHAPTER 5 Developing a Global Vision

CHAPTER FEATURES

Chapter Features Key Points

✓ Marketing & You  Students are given a survey to measure their cultural openness.

✓ Ethics in Marketing
 In early 2010, Google and the Chinese government had a public
dispute over censorship, as Google refused to censor its search
results. Google pulled out of mainland China and moved its
operations to Hong Kong, but the Chinese government began
censoring mainland access to the Hong Kong site.

✓ Customer Experience  Marking to the poor around the world poses unique problems.
Modifications to existing products and marketing strategies may
be necessary to accommodate the low-income market.
Multinationals must think creatively to breach such markets.

✓ Application Exercise  A geography exercise helps students refresh their memories on a

topic they probably haven’t studied for a while but that is very
important for global marketers.

✓ Case Study  In order to continue growing, large corporations like P&G,

Unilever, and Panasonic are expanding into emerging international
markets. Such companies are now trying to reach individuals who
make less than $2 a day.
✓ Company Clip  While new companies, such as Method, are forging their way
domestically, they may also experience an added layer of challenges
from trying to enter global markets at the same time.

USING THIS MANUAL

Chapter five includes six learning outcomes that help students become more familiar with the development of a global
vision. The chapter outline provides detailed analysis of these learning outcomes, listing PowerPoint slides and review
questions as they correspond to sections of the text. Answers and explanations for end-of-chapter exercises are
included following the outline. Supplemental exercises for video, classroom, and group activities are also included
throughout the manual to provide more ideas on instructional applications. The last section lists great ideas for teaching
marketing from faculty from around the country.

5-2 Chapter 5 ♦ Developing a Global Vision

LEARNING OUTCOMES

1 Discuss the importance of global marketing

Businesspeople who adopt a global vision are better able to identify global marketing opportunities, understand the
nature of global networks, create effective global marketing strategies, and compete against foreign competition in
domestic markets.

2 Discuss the impact of multinational firms on the world economy

Multinational corporations are international traders that regularly operate across national borders. Because of their
vast size and financial, technological, and material resources, multinational corporations (MNCs) have a great
influence on the world economy. They have the ability to overcome trade problems, save on labor costs, and tap new
technology. However, some countries are beginning to block foreign investment by multinationals.

3 Describe the external environment facing global marketers

Global marketers face the same environmental factors as they do domestically: culture, economic and technological
development, political structure and actions, demography, and natural resources. Cultural considerations include
societal values, attitudes and beliefs, language, and customary business practices. A country’s economic and
technological status depends on its stage of industrial development, which, in turn, affects average family incomes.
The political structure is shaped by political ideology and such policies as tariffs, quotas, boycotts, exchange controls,
trade agreements, and market groupings. Demographic variables include the size of a population and its age and
geographic distribution.

4 Identify the various ways of entering the global marketplace

Firms use the following strategies to enter global markets in descending order of risk and profit: direct investment,
joint venture, contract manufacturing, licensing and franchising, and exporting.

5 List the basic elements involved in developing a global marketing mix

A firm’s major consideration is how much it will adjust the four Ps—product, promotion, place (distribution), and
price—within each country. One strategy is to use one product and one promotion message worldwide. A second
strategy is to create new products for global markets. A third strategy is to keep the product basically the same but
alter the promotional message. A fourth strategy is to slightly alter the product to meet local conditions.

6 Discover how the Internet is affecting global marketing

Simply opening a Web site can open the door for international sales. International carriers, like UPS, can solve logistics
problems. Language translation software can help an e-commerce business become multilingual. Yet cultural
differences and old-line rules, regulations, and taxes hinder rapid development of e-commerce in many countries.

CHAPTER OUTLINE

1 Discuss the importance of global marketing

PowerPoint 5-4: I. Rewards of Global Marketing

Rewards of Global
Marketing The word global has assumed a new meaning, referring to a boundless
mobility and competition in social, business, and intellectual arenas.

Chapter 5 ♦ Developing a Global Vision 5-3

 Global marketing is marketing that targets markets throughout the world.
Managers must recognize and react to international opportunities as well as to
foreign competition via imports, which are found in almost every industry.

Review Question 1.1 Global vision means recognizing and reacting to international marketing
opportunities, using effective global marketing strategies, and being aware of
threats from foreign competitors in all markets.

PowerPoint 5-6: A. Importance of Global Marketing to the United States

Importance of Global
Marketing to the U.S.
1. The United States exports about a fifth of its industrial production.
2. Exports create jobs for more than 10 million Americans.
3. Exports represent approximately 13 percent of GDP.
4. Every state has realized net employment gains directly attributed to
foreign trade.
5. Almost a third of U.S. corporate profits comes from international
trade and foreign investment.

6. The U.S. is the world’s leading exporter of farm products.

7. Chemicals, office machinery, computers, automobiles, aircraft, and
industrial machinery make up almost half of all nonagricultural
exports.
8. About half of U.S. merchandise imports are raw materials.
9. America exports more than $1.7 trillion in goods and services each
year.

PowerPoint 5-7: The B. The Fear of Trade and Globalization.

Fear of Trade and
Globalization The WTO, World Bank, and IMF have drawn considerable protests.
Some of the negatives of global trade are as follows:

Review Question 1.2
Review Question 1.3
1. Millions of Americans have lost jobs due to imports, production
shifts abroad, or outsourcing of tech jobs.
2. Millions of Americans fear losing their jobs.
3. Employers often threaten to outsource jobs if workers do not accept
pay cuts.
4. Service and white-collar jobs are increasingly vulnerable to
operations moving offshore.

PowerPoint 5-8: Benefits C. Benefits of Globalization

of Globalization
Some of the benefits of global trade are as follows:

1. Expands economic freedom.

2. Spurs competition.
3. Raises the productivity and living standards of people in countries
that open themselves to the global marketplace.
4. Offers access to foreign capital, global export markets, and
advanced technology.
5. Promotes higher labor and environmental standards.
6. Acts as a check on government power.

5-4 Chapter 5 ♦ Developing a Global Vision

 2 Discuss the impact of multinational firms on the world
economy

II. Multinational Firms

Review Question 2.2 The multinational corporation (MNC) is a company that is heavily engaged
in international trade. Multinational corporations move resources, goods,
services, and skills across national boundaries without regard to the country in
which the headquarters is located.

PowerPoint 5-11: Multinationals often develop their global business in stages:

Stages of Global Business
Development
• Companies operate in one country and sell in another
• Companies set up foreign subsidiaries to handle sales in one country
• Companies operate an entire line of business in another country
• Using the Internet to facilitate commerce, top executives and core
corporate functions are in different countries.
• Capital-intensive technology requires greater expenditure for
equipment than for labor.

A. Currency Fluctuations

Multinationals can be helped or hurt by currency fluctuations. The exchange

rate is the price of one country’s currency in terms of another. If a country’s
currency appreciates, less of that currency will be needed to buy another
country’s currency, and vice versa.

B. Global Marketing Standardization

1. Global marketing can be defined as individuals and organizations

using a global vision to effectively market goods and services across
national boundaries.

PowerPoint 5-12: 2. Global marketing standardization, representing Ted Levitt’s use

Global Marketing of the term, presumes that the markets throughout the world are
Standardization becoming more alike and that globally standardized products can be
sold the same way all over the world.
Review Question 2.1
3. Some markets and products, such as McDonald's and Coca-Cola, do
seem to fit global market standardization concepts, but critics argue
that their successes are actually based on variation.

PowerPoint 5-15: 3 Describe the external environment facing global

External Environment marketers
Facing Global Marketers
III. External Environment Facing Global Marketers

PowerPoint 5-16: A. Culture

Culture

Chapter 5 ♦ Developing a Global Vision 5-5

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