Case Study Answers - Chapters (Word)

International Marketing 4e, Chapter case study answers
Part 1
1. Why was Sappé able to penetrate the Eastern European market? How did the brand’s success in its
domestic market facilitate this entrance?
ANS: There are a wide variety of answers to this question but some key points include:
• Forming strategic alliances
• Understanding the target market's need and wants
• Focusing on product taste as well as positioning
• Innovation.
2. What are the main risks and challenges that Sappe continues to face? How should it deal with these
challenges?
• Product life-cycle saturation
• Minimal barriers to entry - easy to copy
• Highly competitive market can lead to increases in marketing costs
• Reliance on market prices for key inputs makes margins susceptible to volatility
• Solutions:
• Continued investment in product innovation
• Expansion into underdeveloped markets
• Forming exclusive partnerships with suppliers to stabilise input prices.
3. Was Sapanan’s process in searching for and selecting suitable partners appropriate? Are there any
other ways to find suitable importers who could support the company’s brand building activity?
• The challenges/risks of using small distributors (lack of experience, free reign on marketing
materials, risk of copycats)
• The challenges/risks of using established distributors (demanding promotional plans, marketing
budgets and product launchsupport).
4. Identify three ways that Sappe protected their brand and product in European markets?
• The use of trademarks
• Modifying machines used in production to make it harder for competitors to replicate the
product
• Using unique packaging design.
Part 2
Copyright © 2019 Cengage Learning Australia 1

1. Should La Casa de Las Botas embrace expansion or should it maintain the status quo? What changes
may need to occur if La Casa de Las Botas were to expand internationally and further develop the
fashion segment?
• The impact of expansion on brand image, equity and positioning
• Expansion may require revising the payment process, developing a line of 'off the shelf' boots
that do not require custom measurements in order to meet increased demand, establishing a
network of distributors that have an understanding of current market trends, strengthening
their online presence and services.
2. How can the demand for custom-made boots be estimated in an underserved foreign market?
• Direct competitors as well as trends in the broader high-end footwear market
• Barriers to entry including tariffs and taxes which would impact pricing decisions and ultimately
demand.
• Social/cultural factors (leather boycotts, time poor society not willing to wait)
• Economic conditions.
3. How should La Casa de Las Botas address online ordering and customer payment methods for both
individual customers and distributors?
• La Casa de Las Botas would need to forecast how an online ordering and payment system would
impact on the balance between supply and demand.
• Online ordering and payment would create operating efficiencies
• Consider how online ordering would impact the experiential aspects of the purchase process
(the store atmospherics, the face-to-face customer service when taking measurements and
determining style.
4. Identify a barrier that impedes La Casa de Las Bota's expansion as well as protects the custom
equestrian boot market from saturation.
Skilled labour constraints: The skills required in producing custom equestrian boots to a high standard
take approximately five years to acquire.
Part 3
1. The case describes the macro-environmental challenges that X-Pertex faces. What proactive actions
could the company take in facing these challenges?

• Determining the macro-environmental challenges (price volatility of inputs, political instability,
unreliable infrastructure such as communications)
• Proactive solutions may include:
• Moving production off-grid to decrease reliance on unreliable infrastructure (power and
communications)
• Forming partnerships with mills in bordering countries for seamless outsourcing in the event of
civil/political unrest
• Overcoming price volatility through the establishment of long-term trade agreements with
suppliers.
2. Identify three actions that have contributed to X-Pertex's survival within the global marketplace.
• Placing a high importance on customer relationships and customer service
• Empowering their employees and creating a positive internal company culture
• Expanding their online presence to facilitate better communications.
3. Conduct some online research into the textile industry and the denim market. Can you identify any
emerging trends that X-Pertex could capitalise on?
• Organic Cotton - http://textileexchange.org/wp-content/uploads/2017/02/TE-Organic-Cotton-
Market-Report-Oct2016.pdf
• Recycled cotton
• Advanced Denim - http://www.bpt.archroma.com/markets/casual-business-wear/denim/
• Fashion trends - luxury denim, complex blends, fast fashion
• Technology infused wearables eg. inbuilt heating technology.

Table of Contents
Chapter 1 .................................................................................................................................... 1
Chapter outline ....................................................................................................................... 1
Chapter objectives .................................................................................................................. 1
Suggestions for teaching ........................................................................................................ 2
Suggested links to online video material ............................................................................... 2
Questions for discussion ........................................................................................................ 4
Critical analysis questions...................................................................................................... 8
Chapter 2 .................................................................................................................................. 10
Chapter outline ..................................................................................................................... 10
Chapter objectives ................................................................................................................ 10
Suggestions for teaching ...................................................................................................... 10
Suggested links to online video material ............................................................................. 11
Questions for discussion ...................................................................................................... 12
Critical analysis questions.................................................................................................... 16
Chapter 3 .................................................................................................................................. 19
Chapter outline ..................................................................................................................... 19
Chapter 4 .................................................................................................................................. 25
Chapter outline ..................................................................................................................... 25
Chapter 5 .................................................................................................................................. 31
Chapter outline ..................................................................................................................... 31
Critical
Copyright analysis
© 2019 questions
Cengage ....................................................................................................
Learning Australia 364
Chapter 1
1. What were the key motivations for international corporations such as Las Vegas Sands and Genting
International to set up multi-billion casino investments in Singapore?
ANS: [There are a wide variety of answers to this question but some key points include:
• Singapore's legal and regulatory influence on foreign investment (tax breaks)
• Singapore's shift to a more globalised perspective
• Competitive forces from neighbouring Asian countries.]
2. What are the main positive and negative influences the IRs will bring to Singapore?
• Negative social impact of gambling on residents
• IR's positive impact on the job market, employment and foreign investment in tourism
• IR's positive impact on destination competitiveness
• The growing tourism industry's negative influence on population skill gaps]
3. What steps have the Singaporean government taken to mitigate the influence of the IRs?
ANS: [There are a wide variety of answers to this question but key points include:
• Government legal and regulatory measures surrounding gambling
• Government initiatives to build skilled labour force in the face of a growing tourism industry
(increases in unskilled employment opportunities).]
Chapter 2
1. What has allowed IKEA to be successful with a relatively standardised product and product line?
• cost leadership
• the outsourcing of manufacturing to low labour-cost countries
• High volume production to achieve economies of scale
• Exclusive suppliers operating under IKEA terms
• Unique promotional strategies
• Value-added dimension
• Consumers as active participants]
2. Which features of the ‘young people of all ages’ are universal and can be exploited by a
global/regional strategy?
• A universal desire for everyday products which are durable, high quality and functional
• A product range that is underpinned by high social and environmental standards.]
Chapter 3
1. How can institutions, such as the European Commission, create business opportunities? How could
Fonterra originally benefit from the preferential access to the common European market?

• Institutions can influence the flow of trade, reduce barriers to international trade and provide
support mechanisms.
• Fonterra's preferential treatment, in the form of reduced tariffs, gives the company a
competitive advantage over other foreign exporters within the dairy sector in the form of higher
profit margins. Reduced trade barriers also aid in the formation of joint-ventures and
partnerships with local brands]
2. Why did Fonterra lose a significant part of the butter quota? Was the problem a political or legal
issue? Provide some examples of other political or legal factors affecting the conduct of international
business
• Fonterra's loss of the butter quota can be attributed to a legal decision by the European Court of
Justice.
• Other political and legal factors affecting international business include legislative import and
export restrictions, legal standards, export subsidies, government procurement, service and
investment barriers and anticompetitive practices.]
3. Discuss the consequences of the new trading system between the EU and New Zealand introduced in
2007 and the recessionary measures employed by the EU in 2009 with regard to Fonterra’s European
operations.
• Placing limits on how much market share a foreign importer can have
• Tariff reductions for butter imported under quota is a measure that both offsets foreign
importers loss of market share and decreases the event of surplus
• 2009 saw EU export subsidies reintroduced, making EU farmers more competitive in the global
marketplace and putting Fonterra in a less favourable position, particularly due to New
Zealand's policy of zero export price assistance..]
4. Why has Fonterra changed its strategic focus since 2011? What impact will this have on New Zealand
dairy farmers and on Fonterra?
The formation of strategic partnerships to overcome trade barriers and gain a larger share in foreign
markets.]
Chapter 4
1. How can companies learn from Honda’s investment in the Indian market?
• Having a sound understanding of the legal and political system of a foreign market before
embarking on international marketing efforts.

• Management flexibility to adapt and diversify in foreign markets.

• The role of strategic partnerships in overcoming international marketing barriers.]
2. Honda and Hero – what made them such a great partnership?

• shared operational synergies;
• identifying market opportunities of mutual benefit.]
3. Can joint venture partners protect themselves from dissolution and what happens when your partner
becomes your competitor?
• Anticipate and plan for changes that may occur through continued monitoring of the marketing
environment
• Risk management practices and insurance programs.]
Chapter 5
1. To what extent would you classify Aboriginal culture as embodying individualist or collectivist
tendencies?
• Aboriginal culture exhibits collectivist tendencies, with a strong emphasis on community, shared
symbolism and storytelling.
• Aboriginal art, however, can also have individualist tendencies, depicting an individual's
perspective of their land and life experiences.]
2. What cultural issues should marketers be aware of when selling Aboriginal artwork?
• Establishing and nurturing local ties to the artist and their community;
• Recognising the cultural significance and symbolic meaning underpinning Aboriginal art;
• Acknowledgement of country.]
3. Evaluate the statement ‘Aboriginal artwork should be sold when, where and under whatever
conditions retailers choose’.
• ethics behind 'cultural borrowing' and profiting from indigenous culture in the absence of
communication, consultation and consent.]
4. What measures can marketers take to ensure Aboriginal culture is upheld through the sale of
Aboriginal artworks?
• Adhering to Codes of Conduct and ethical practices put in place to protect Aboriginal artists and
their culture;
• Consultation and consent for the use of Indigenous cultural material;

• Ensure authenticity or artworks.]
Chapter 6
1. Why is Lonely Planet a global success?
• In-depth primary research as part of the product development process;
• Using research to understand Lonely Planet's customers what they want and how they go about
fulfilling their needs.
• Adapting their product to the digital environment to maintain competitive and relevant.]
2. How has Lonely Planet been able to provide and market guidebooks that are useful across languages
and cultures?
• Using a global network of collaborators who each have an understanding of their local market
(in product research, print, translation services and distribution).
• The formation of strategic partnerships eg. with Amazon
• Using both online and offline channels to meet a wide target market]
3. How could Lonely Planet guidebooks help marketers develop effective marketing strategies in
targeted foreign markets?
ANS: [There are a wide variety of answers to this question but key points include:
• The guidebooks themselves are a source of secondary research into a foreign markets culture,
economy and competitive environment.
Chapter 7
1. Based on the information provided in this case study and also information available on the internet,
conduct a Political, Economic, Social, Technological and Legal (PESTL) analysis of the retail market in
India.
ANS: [Information for the discussion may be sourced from:

• https://www.investindia.gov.in/foreign-direct-investment
• http://dipp.nic.in/foreign-direct-investment/foreign-direct-investment-policy.]
2. Explain how the change in FDI Indian policy benefitted Wal-Mart. Why is the Indian market
strategically important to Wal-Mart?
• FDI for multi-brand retailers
• FDI in food retailing
• FDI in e-commerce
• Projected growth for India's retail sector
• The competitive environment.]

3. What challenges has Walmart faced throughout their expansion into India?
• FDI policy
• Political opposition to foreign investors
• Undeveloped infrastructure and the impact on supply chain management.]
4. Analyse the advantages and disadvantages to Wal-Mart of the joint venture with Bharti Enterprises.
This case study was written in 2018. Conduct some research on the latest strategic partnerships
affecting Wal-mart within both the online and offline retailing environments in India?
• Overcoming trade barriers through strategic partnerships
• Adhering to FDI policy.]
Chapter 8
1. Consider Li & Fung’s weakness in the European market. In doing so, you might want to take a closer
look at Spain’s Inditex, owner of retailer Zara. Inditex is well known as a rapid response retailer,
changing over its fashion items very quickly, with very short lead times. But it does so by owning
much of and keeping tight control over its supply chain, choosing to supply its stores from its own
production facilities close to its headquarters in Spain. This ownership and tight control approach is,
of course, directly opposed to Li & Fung’s non-ownership and loose control approach.
a. Might differences in the business environment in Asia and Europe have something to do with
these differences between Li & Fung and Inditex? What differences do you think might be
important?
• The macro environmental factors are likely to be the biggest factors here. This could include
cultural and social factors, the way business is conducted in the current economic and political
environment, and uptake in technology.]
b. What would you recommend for Li & Fung in terms of increasing its competitiveness in
Europe?
• Build more relationships with local suppliers to ensure responsiveness if continued
• Ensure local trends are maintained in production of goods to be sold in Europe
• Source raw materials at low cost from Asia.]
2. Li & Fung has recently moved in a couple of new strategic directions by working for more licensed
or sub-brands (LL Cool J at Sears, Metro7 at Wal-Mart), by working directly with more brand owners

rather than retailers (Liz Claiborne’s Lucky Jeans and Juicy Couture, Levi’s Signature and Red Tab),
and by creating its own brands, often through acquisition.
a. Given what you know of Li & Fung, is this a good move for the company? What is required of
a firm as it alters a distribution channel or its place in a distribution channel? What is
required of a firm in managing a consumer brand? Does Li & Fung have the necessary skills to
succeed in these areas?
• This is a major change from their traditional approach which was exclusively derived from
manufacturing.
• This new change involves keeping knowledge up to date with production and end user fashion
habits
• Extra costs may be acquired through this new approach which may not be sustainable in the long
term, though may allow them to weather the trade wars in the short term.]
b. What other actions might Li & Fung take in order to ensure it stays strong in the US market?
• Ensure they continually invest in market research and maintain knowledge on current fashion
trends, and staying ahead of these trends.
• Build relationships with new, local suppliers that are able to provide value or save costs.]
3. Recently there appears to be a marked trend away from outsourcing and offshoring, with a number of
firms bringing supply chains back within or at least closer to home markets. Part of the reason is a
reduction in the wage differential between countries (and the fact that those still having really low
wages might not have the distribution systems to compete), and part is likely due to other aspects
of supply chains becoming more important (control, rapid response, social responsibility concerns).
How would a firm like Li & Fung be affected by this trend? What opportunities and/or threats do
you see?
• Local producers may be more likely to choose a local manufacturer, instead of utilizing Li and Fung’s
extensive manufacturing system.
• Opportunities could be to focus more on establishing local manufacturing hubs, instead of having
manufacturing occurring across the globe.]
Chapter 9
1. What effect on goodwill do you think counterfeit goods would have on the Apple brand?
• If consumers purchase what they believe to be authentic products, and they are delivered
counterfeit products, they may develop a poor brand image.

• Even though in this case Apple was not aware of, nor at fault for the problem, this indirect
attitude could still eventuate
• A customer may not realise the product if counterfeit and judge the product on the poor
perceived quality.]
2. To what extent do you think the counterfeit issue can be resolved by the government, brands or third-
party marketplaces such as Amazon?
• Individually, each institution has a role to play; government, NGOs, third party marketplaces as
well as the brands themselves.
• Without a shift in cultural values, demand for cheap, counterfeit products will not lessen.
• When all parties work together, the best effect can be seen. The government can legislate to
provide a deterrent for producing products, the NGOs can raise awareness among consumers
and retailers, marketplaces can remove advertising and listings for counterfeit products, and the
brands themselves can build high quality products that consumers demand.]
3. What types of product features can brands build into their products to minimise the threat of
counterfeiting?
• Brands can focus on providing high quality goods so that consumers want to only purchase the
original products.
• Brands can also design products with features which are difficult to replicate, or which contain
proprietary software. For example, Louis Vuitton goods are very expensive and are produced
with a high degree of quality and care. For example, the stitching should be perfectly straight,
and the pattern on authentic leather will perfectly match up.]
Chapter 10
1. If no immediate change regarding the Novel Food Regulation (EU) is foreseen, what could be an
alternate use of camu camu?
• To avoid camu camu being classified as a novel food, they should position the product as a
dietary supplement.
• Camu camu could form the main ingredient as a produced food product (such as a health food
bar) that could then be sold. This way, the product is not identified as a novel food, and avoids
classification as such.]
2. What brand strategy is Navitas following to ‘adapt’ camu camu to the US market?

• This strategy is known as product adaption and has been done for regulatory reasons.
• This allows the product to be branded in such a way to allow the food to be sold in the US
market, where it otherwise wouldn’t.]
3. Would you recommend that Peru use the same brand strategy Navitas is using in the US and in other
international markets?
• Strategies should be ascertained after a thorough analysis of the macro marketplace and factors
only.
• It is likely that a different approach be adopted in Peru as there is different social attitudes and
familiarity with camu camu, different regulations and other competitive factors.]
Chapter 11
1. Parker Pen has gone back to its roots of crafting fine writing instruments as luxury consumer symbols.
Are there any new emerging markets that they can focus on that have a similar culture of writing or gift
giving?
• Japan
• Middle East.]
2. This case predominantly looks at the growth of the luxury consumer goods market in China. How
could the services sector tap into this trend?
• Tailoring transportation, banking, beauty, hospitality or personal shopping to appeal to luxury
consumers
• Consider barriers to entry.]
3. What challenges have luxury brands faced when entering into the Chinese market?
• Regulations on corporate gift giving
• A slowing economy
• Increasing competition from both national and foreign competitors
• Understanding/adapting to the cultural environment.]
Chapter 12
1. How would you describe Airbnb's pricing strategy?

• Consider both the pricing strategy of hosts and the pricing strategy of Airbnb (in the form of
service fees).
• Examine the characteristics of standardised, dual and market-differentiated pricing strategies in
relation to Airbnb's service fee structure.]
2. What are the main costs Airbnb needs to consider when setting prices?
• Unlike traditional hotels, Airbnb do not have the degree of physical assets to account for
• How online based operations overcome manufacturing, logistic and export costs
• The largest costs would include host insurances, software and platform development and
marketing costs.]
3. How will external factors, such as regulatory challenges and threats from competitors, impact on
Airbnb's profitability?
• Regulations have the potential to impact negatively on the supply of Airbnb accommodation as
hosts face increasing taxes as well as legal implications.
• Competitive threats come from both the hotel industry as well as companies within the sharing
economy looking to imitate Airbnb's service offering. A competitor could enter the market with
lower service fees in order to gain market share.]
Chapter 13
1. Explain how the use of chat bots might be different depending if the business sells goods or provides
a service.
• Chat bots used for a service provider are likely to play a larger role and be more customer
service oriented. Programming them to be friendly and be able to answer a large range of
questions would be useful here. You could also use chat bots to book in a service. Eg. taking
bookings through the bot, not a website.
• Chat bots for a retailer or product manufacturer are more likely to ask similar questions on the
qualities of the product (eg. what is the price, what is the size). One interesting application of
chat bots for products is in the beauty industry, where chat bots have been used to guide
consumers to which products are best suited to their skin, before redirecting them to a sales
page to purchase these products. See these links for more information:
• https://techcrunch.com/2017/05/15/helloava-launches-a-chatbot-for-personalized-skin-care-
recommendations/
• https://techcrunch.com/video/helloava-a-skincare-consultant-in-your-
pocket/591a0d33955a3135a9d77306/.]

2. Apply the marketing communications process (Fig 13.1) to the use of the TacoBot. How does this
differ to traditional advertising mediums?
• The TacoBot was very untraditional in that it used a pull approach to communication. The
sender of the message is originally the customer. The receiver of the message is a bot; a type of
software that is automated to reply in certain ways. As the bot is receiving the message and will
then reply, bots are not likely to be distracted by ‘noise’ and so the communication can be more
effective than traditional communication.]
3. Discuss problems associated with measuring the effectiveness of a chatbot.
• Measuring the success of a chatbot is difficult, and depends on the metrics used. These metrics
are likely to be influenced by the reason for having a bot. Eg. If the aim of the bot is to convert
sales, an online sales metric may be useful. But what if a customer chooses to make a purchase
from another medium (eg. in-store?). That is not always possible to track sales, unless using
coupon codes or similar.
• Often Chat Bots are used for customer service reasons. At the end of a conversation, the
customer could be asked ‘was your question answered?’ to ascertain if the conversation was
effective.
• In the example of TacoBot, as it was utilised through Twitter, Twitter metrics were used,
including tweets, retweets etc. In this case social listening softare may be useful to also track the
content and salience of conversations about the Tacobot, using the hashtag or about the
TacoBell brand itself.]
4. How could the use of a chat bot help a service firm to reduce customer service staff expenses?
• Chat bots can be used to service basic customer enquiries instead of staff. This is useful if the
same questions are asked often, or if the service can in some ways be automated. For example,
booking in a service.
• Eg. A chat bot could be used by a customer to book a hairdresser appointment, instead of
redirecting to a static booking page. This could redirect customers from calling the hair dresser
(relieving staff of basic call answering duties, allowing them to give more haircuts and thus be
more profitable).]
Chapter 14
1. How have Amazon.com’s international marketing efforts been assisted through the use of social
media?

• Leveraging social media to disseminate product information, raise brand awareness, drive brand
loyalty and increase sales.
• Spark facilitates customer interaction and generates consumer insights
• Social media has opened Amazon to a 2-way conversation with customers.]
2. Is there a chance social media could be problematic for an international organisation such as
Amazon.com? What are some of the ways that social media could be an issue?
• Allows customers to share negative experiences
• Allows merchants and customers to convene in a space where Amazon doesn't have control (Facebook
groups).
• Management and monitoring of social media efforts requires extensive resources.]
3. Two business principles of Amazon.com are customer relationship management and information
management. Discuss these principles and connect your discussion to social media use in an
international context.
• For CRM, social media can be used to address complaints, reward customer loyalty (through
social media promotions) and build a deeper relationship.
• For IM, social media can play a role in generating information (i.e. consumer insights, brand
awareness data), as well as for the distribution of information.]
4. Amazon use different social media platforms in different ways, for example, using Facebook for
promotions and using Twitter for content marketing. Why do you think Amazon have done this?
• Using appropriate social media channels to support different elements within the marketing mix
• Using Twitter to support public relations
Using Facebook and Pinterest to support sales and promotional activities.]
Chapter 1
Introduction to international marketing
Chapter outline
● What is international marketing?
● Globalisation

○ Global market factors

○ Global linkages
○ Economies of scale
○ Competitive factors
● Opportunities and challenges in international marketing
● The strategic planning process
○ Assessment and analysis
○ Objective setting for global market strategy
○ Developing the global market program
○ Implementing global marketing
● The local company in the global environment
● Future insights
Chapter objectives
1 Understand and define the rationale behind international marketing
2 Appreciate the linkages between international marketing and international trade
3 See the benefits and challenges to which international marketing exposes consumers,
suppliers, competitors and countries
4 Outline the process of strategic planning in the context of the global marketplace
5 Examine both the external and internal factors that determine the conditions for development
of strategy and resource allocation

Suggestions for teaching

The main goal of this chapter is to introduce the students to international marketing. Discussing
globalisation can be a good way of getting the class engaged. First, by discussing how globalisation
has had an impact on different aspects of their personal lives. Second, by discussing how
globalisation will have an impact on their professional lives after they graduate. Third, by starting
a discussion about how local and international organisations have been impacted by it. Finally, by
discussing globalisation at the country level.
During this discussion it is important to raise the positive and negative implications of
globalisation. Students should get engaged in discussing topics such as child labour and the
environmental implications of globalisation. To illustrate the interdependence in today’s economy,
the consequences of the global financial crisis are useful to get the students’ attention.
Additionally, it is important to communicate the international environment’s dramatic impact on
firms, allowing students to draw their own conclusions about the value of building an international
vision of the global marketplace. For students, this will clearly establish that international
marketing is a necessary activity as well as its positive and negative implications.
Encourage students to access the ‘Search Me! Marketing online database’ to find more information
that can assist them in answering the questions for discussion.
Suggested links to online video material

Thomas Friedman’s ‘Three eras of globalisation’
Video URL: http://www.youtube.com/watch?v=lp4znWHvsjU
Concept: Thomas Friedman: the three eras of globalisation
Clip description: Thomas Friedman, author of the book The World is Flat, discusses the three
stages of globalisation.
Key outcome/points to consider: This video is a good tool to discuss how globalisation and
technology have increased the pace of changes and how individuals and organisations cannot
ignore the existence of new opportunities and challenges, which are on an international scale.
Students can be encouraged to discuss some examples related to the first, second and third eras of
globalisation.
Fast food boom exceeds expectations

Video URL: https://edition.cnn.com/videos/international/2013/05/17/marketplace-middle-east-
iraq-b.cnn
Concept: Global business opportunities
Clip description: This video highlights the demand of fast food in Iraq and how local businesses
are taking advantage of the lack of international fast-food chains.

Key outcome/points to consider: Students will be exposed to certain opportunities for

organisations to enter different countries. Also, an Iraq risk analysis can be conducted.
Talking point: Protectionism v. free trade

Video URL: http://www.youtube.com/watch?v=DHBbSWauxGo
Concept: This video shows a discussion of whether the EU market should be more open or more
protected.
Clip description: Several countries, and trading blocs such as the EU, have been increasing their
trade barriers to defend themselves from international competition. This video highlights the
difference between trade defence and protectionism.
Key outcome/points to consider: This video can be an interesting tool to discuss how domestic
policies have an effect on trade and the risks of protection. It will give students an introduction to
some issues, such as trade barriers and its possible drawbacks. Students can potentially engage in
a discussion about whether they agree with protectionism or not.
Wal-Mart’s green revolution

Video URL: http://www.youtube.com/watch?v=eUCznRsf1-Y
Concept: ABC News regarding Wal-Mart’s new sustainable green standards
Clip description: This video shows the retail giant Wal-Mart’s new sustainable policy, which is
reported as a game changer. It is expected that all the products will have an environmental rating,
which states the costs that each product had to the environment. Thus, every supplier will have to
take into consideration the sustainability of their products and what can be done to improve their
sustainability.
Key outcome/points to consider: The students will be able to understand how environmental
sustainability has been receiving an increasing amount of attention and how organisations have to
react to this pressure. Another point that can be discussed is the importance and consequences of
the largest retailer in the world forcing all of its suppliers to provide more sustainable products and
decrease environmental costs.
ENEZA Kenya’s innovative education app

Video URL: https://www.youtube.com/watch?v=GbHWtjNUnac
Concept: The video shows how mobile technology as a globalised product can be adapted to the
needs of a local market. It introduces ENEZA, an app that allows students to benefit from
technological advancements, even on older devices.
Clip description: Students dial a particular number from their mobile and follow a simple
registration process, upon which they are granted access to quizzes about the concepts they want
to study.

Key outcomes/points to consider: This video shows the importance and value of innovation in a
globalised world where different markets will have different requirements. The video reflects on
how technology is positively impacting today’s education sector and benefiting students and
teachers in terms of access to online materials, online test systems, and students’ performance
review. What other similar services are likely to benefit students? What could an international
technology services firm learn from ENEZA?
Simon Upton on the importance of green growth

Video URL: https://www.youtube.com/watch?v=anW56v6X6mU
Concept: Importance of sustainable green growth
Clip description: This is an Organisation for Economic Cooperation and Development (OECD)
resource that shows the importance of green growth. It highlights the green growth agenda, which
is identifying policy tools to catalyse green growth. Additionally, green growth should be seen as
a means to secure human progress.
Key outcome/points to consider: This video will show how important green growth is in the
current world scenario. Students should consider what this green growth will mean to global
businesses in the future and how international marketers will have to adapt to this trend.
Questions for discussion

1 What factors do companies have to consider when entering the international market?
This is very broad question. Therefore, answers to this question will vary. There are several
factors to be considered.
o New culture: language, taste, regional values
o Economic factors: supply and demand, per capita income
o Political and legal: laws, licensing, taxes, fees, tariffs, currency risks, trade policies
o Encourage students to demonstrate this with real-life examples. They may come up with
relevant videos or case studies. For example, the webpage at
http://www.tradeready.ca/2018/topics/market-entry-strategies/looking-to-export-8-
golden-rules-success-new-market/ shows eight golden rules for success in international
markets.
2 Describe some opportunities and challenges in international marketing created by new

advances in information technology.
Answers to this question will vary.
One important effect of international marketing is greater opportunities for technology
companies to supply the world with cutting-edge products. Despite concerns about the
increased breadth of goods being made in lower-wage countries, the newest technologies and
products will be conceived in, produced in and shipped from Australia and other

technologically-advanced countries. This has led Australian industry to focus more on

research and development and high-end manufacturing. In addition, there has been a boom in
international business conducted over the internet. Companies don’t need to be physically
present in a country in order to do business with commercial partners located in other nations.
Due to improved infrastructure in many developing countries, international marketing will
also likely result in an overall growth in trade. For example, new telecommunications
capabilities, including wireless technologies and internet access, will create more chances for
companies around the world to identify and take advantage of international business
opportunities.
Opportunities
○ Quicker and cheaper access to data from around the world
○ Easier, more reliable communications
○ New methods of advertising and promoting products internationally
○ More opportunities to find partners to manufacture and develop products
○ 24/7 customer support, operations etc.
○ Advanced management systems
○ Marketing opportunities – online, interactive etc.
○ Outsourcing and offshoring of some organisational functions
Challenges
○ Maintaining an adequately trained workforce
○ Improvising in markets where particular technologies have yet to become standard
○ Greater degree of competition
○ Potential for copyright and patent infringements in countries with a lack of legal
governance
○ Protection of intellectual property rights
3 What effect has the Brexit process had on the UK’s position in the international market?
The impact of Brexit on trade and investment channels will be most severely felt in the UK,
which will impact the status of the UK in the global economy. In economic terms, this will be
most evident in trade policy. While the UK has the ability to strike new trade deals based on
domestic priorities, it will have less leverage and be a lower priority than the EU for other
countries, as it represents a much smaller market. The UK also faces the huge challenge of
renegotiating trade agreements with the EU, as it will no longer be party to the extensive
international trade arrangements that come with EU membership. This includes renegotiating
potential tariffs on goods it wants to export, product standards that goods sold in the EU must
meet, and movement of people. The impact of Brexit will lead to the increase in trade costs
and is predicted to reduce the trade between the UK and the Europe.
You could use this published report as a guiding document for further discussion:
https://www.global-counsel.co.uk/sites/default/files/special-
reports/downloads/Global%20Counsel_Impact_of_Brexit.pdf

4 What is the danger in oversimplifying the globalisation approach? Would you agree with
the statement, ‘If something is working in a big way in one market, you better assume it
will work in all markets’?
Students should understand the complexity of a market that is increasingly becoming more
homogeneous. Oversimplifying can include not taking into consideration that globalisation is
not the same as standardisation, and therefore global organisations need to adapt to a certain
degree and understand that each country will have unique characteristics. Factors such as
cultural, religious, language, legal and political differences, for instance, need to be taken into
consideration.
Encourage students to access the ‘Search Me! Marketing online database’ to answer this
question.
5. When do companies have to standardise their products? What factors influence

standardisation?
New international markets that are most similar to a firm’s existing markets in terms of
marketing mix variables like language, infrastructure and culture can be grouped into segments
and thereby targeted with a largely standardised marketing strategy. By doing so, marketing
costs can be shared across a larger market, making standardisation a potential cost-reduction
strategy. Standardisation also allows for consistent messaging, meaning a brand image can be
more tightly controlled. This is extremely important for high-value brands with large shares
in multiple international markets, such as Toyota, Apple or Louis Vuitton.
The product, brand, promotion, pricing and distribution are the most common elements to be
standardised. For example, you will find identical packaging of well-known international
brands like Coca-Cola in homogenous markets like the USA, UK and Australia. In China, the
packaging of Coca-Cola uses Chinese characters, but other branding like the red colour and
shape of the bottle are retained.
Similarly, the flavours and make-up of McDonald’s and KFC products are standardised
throughout the world. However, McDonald’s has incorporated unique local items onto its
menu most of its outlets outside of the USA. India has a relatively high proportion of
vegetarians compared to other markets and, as the cow is considered a holy animal in the
Hindu religion, many people do not eat beef, so the McDonald’s Indian menu includes more
vegetarian and non-beef options to accommodate consumers’ preferences. To summarise,
many factors including, legal requirements, customers’ preferences, changing tastes and
culture influence the level of standardisation in a particular country of business operations.
6. Discuss the notion of ‘bigger is better’. Should companies always try to grow their
market presence and look for opportunities to acquire or merge with other companies?
Size can become a major asset, and many companies have followed a growth strategy to
strengthen their market presence. This strategy partly explains the increase in many mergers
and acquisitions in industries such as aerospace, pharmaceuticals and telecommunications.
Hence, when General Electric (GE) announced it would spin off its appliance unit, five
possible buyers emerged, each wanting to boost its global position:

• LG, a South Korean electronics and telecommunications giant

• Haier (China), which is already the second-largest maker of refrigerators in the world and
ranks sixth in overall appliance sales
• Contoladora Mabe, a successful Mexico-based appliance firm that is partly owned by GE
and that already makes appliances for other brand-name firms, including GE
• Electrolux AB, a Stockholm-based company that parlayed its success in high-end vacuum
cleaners into a broader success in home appliances
• Arcelik Anonim Sirketi, an Istanbul-based appliance maker that does business throughout
the world-including in the USA.
GE sold its consumer unit to Haier (China) for $5.6 billion, which strengthened Haier’s
position in the global market. The merger meant that Haier could employ a larger economy of
scale, which lowers the production cost of each individual product and thus increases profit.
However, bigger is not necessarily always better. Sometimes mergers may also result in
failure. For example, American Airlines merged with Office Depot to expand its market share,
but the merger failed due to a clash of different business models and management priorities.
Smaller companies that are relatively less risk averse, more agile and have fewer resources are
less likely to involve themselves in mergers and acquisitions compared with bigger firms,
which can better accommodate any losses incurred.
7 Carrefour has adapted many aspects of its products offerings and processes to fit the
different consumer demands in various countries? Why?
The video ‘Carrefour – A China shopping experience’ (see below) of a Carrefour shopping
experience in China highlights a few differences in Carrefour shops in China and is a good
starting point to start discussing this question.
http://www.youtube.com/watch?v=1lYVm0hLXFo&feature=BFa&list=PL2D8662D382204
7D1
Retailers such as Carrefour need to adapt to the local ways of doing business and local cultures.
There are some significant differences in the shopping behaviour and demands of consumers,
thus retailers need to adapt their product assortment and shops to the local way of doing
business. Also, different countries have different supply chains and business practices.
The following link can be useful when answering this question:
http://bear.warrington.ufl.edu/oh/IRET/Student%20Experience/Carrefour%20Essay%20
Edited.pdf

Critical analysis questions

1 Pick one large multinational company (for example, McDonald’s) and assess the degree
to which they ‘think global, act local’. This task can be undertaken by comparing how
the company’s products differ in various countries, and identifying the degree of
localisation.
Students have a broad variety of possible choices to analyse for this question. Coca-Cola’s
‘Share a Coke’, an Australian-born marketing campaign that went global, is a good example
of a global marketing campaign. Students can find several ads of this campaign online and
discuss some small adaptations such as localising the names on the bottles. The reasons behind
the success of this campaign can be analysed and discussed further.
Useful links:
http://www.bandt.com.au/news/marketing/coca-cola-the-most-effective-brand-in-asia-pacifc
https://www.coca-colajourney.com.au/stories/share-a-coke-how-the-groundbreaking-
campaign-got-its-start-down-under
http://www.adnews.com.au/adnews/coca-cola-us-share-a-coke-push-hits-new-levels-of-
genius
2 International marketing is all around us, even if we are not aware of it. Back in 2007, an
American woman, Sara Bongiorni, brought out a book entitled A Year Without ‘Made in
China’: One Family’s True Life Adventure in the Global Economy, describing how her
family tried to live a year without buying anything made in China. Let’s do a mini version
of that. Keep a diary for perhaps a week or so (you might want to continue it through
your international marketing course) noting what you buy and consume that is
internationally marketed. Try to identify the country of production, but also, as
appropriate, the country of the brand.
The aim of this question is to help students to become aware of how much they are affected
by international marketing in their daily lives. It will likely make the students reflect on the
patterns of production and consumption. Consequently, it will highlight the importance of
international marketing and the consequences of globalisation.
Students can be encouraged to read part of Bongiorni’s book, which is available on Google
books, in order to enrich their analysis:
http://books.google.com.au/books?hl=en&lr=&id=taikveCUbmgC&oi=fnd&pg=PR9&dq=A
+year+without+%E2%80%98Made+in+China%E2%80%99+:+One%E2%80%99s+family+
true+life+adventure+in+the+Global+economy%E2%80%9D&ots=vUUaU5dtL5&sig=-
zAOhgSdOgC8084uAZ12NgMNH9E#v=onepage&q&f=false
3 Choose one large multinational company in the luxury market (for example, Louis
Vuitton) and discuss the challenges and opportunities of entering an emerging market –
for example, Brazil. A SWOT analysis (strengths, weaknesses, opportunities, threats)
can be used for this task.
Strengths: Well-known brand, strong brand positioning (i.e. luxury, quality, status)

Weakness: high product prices, limited and exclusive distribution channels, narrow segments
of buyers
Opportunities: development of economy of Brazil, potential growth of luxury market in Brazil
Threats: rising competition with other exclusive brands such as Gucci, counterfeiting products
Note that the weaknesses and threats can be potential challenges to enter into the market.
Chapter 2
The economic environment
Chapter outline
● Understanding individual markets through data
o GDP and Income
o Population
o Consumption patterns
o Infrastructure
● The economic, social and cultural effects of industrialisation
● Regional economic integration
● Future insights
Chapter objectives
1 Evaluate markets by analysing the data
2 Discuss the economic, social and cultural effects of industrialisation
3 Understand the impact of regional economic integration on international trade
Suggestions for teaching

Of the environmental issues, economic dimensions are the most concrete variables from which
individual markets can be analysed and compared. This chapter features a considerable amount of
facts and figures, which students may be quite interested in if presented in the right way. Rather
than trying to accomplish too much in one session, it is worthwhile concentrating on one dataset
at a time (e.g. Table 2.2, which shows regional and urban/rural ownership of consumer durables

in China in 2010). Another approach to overcoming this dilemma is to assign exercises so that
students may discuss these issues.
Activities may include:
• updating the tables presented in the chapter’s case studies and discussing the significance of
the changes that may have emerged
• developing country- or product-specific exercises similar to those that feature in discussion
questions 2 (see below)
• selecting a specific market (and product) for class discussion and asking small groups to
research different economic data related to the issue.
Issues, such as a lack of data for every market and out-of-date information, may present critical
issues for international marketers. For students in developed industrialised nations, data may seem
easily available and accessible. Often, marketing educators find that ‘Let’s collect the data’
becomes the default answer to many of their questions. The problem is that some of the desired
data may not even exist. There are some countries that have not had a census for 20 or 30 years.
Encourage students to access the ‘Search Me! Marketing online database’ to find more information
that can assist them in answering the questions for discussion.
Suggested links to online video material

Ian Goldin: Navigating our global future
Video URL:
http://www.ted.com/talks/lang/eng/ian_goldin_navigating_our_global_future.html
Most relevant section: 00:15–3:07
Concept: Ian Goldin warns that not all of the population will benefit equally from globalisation
and technological developments. In addition, he highlights the increase in systemic risk.
Clip description: Ian Goldin, director of the Oxford Martin School, talks about some of the
challenges and opportunities that come with globalisation, focusing on how part of the world’s
population is left out of several opportunities of advancement. There is a growing inequality among
countries and a growing complexity in the economic environment due to the increase of systemic
risk.
Key outcome/points to consider: This video is an interesting tool to discuss the social issues
involved in globalisation and what can be expected in the future. A good way of discussing this
video is by revising some of the content seen in Chapter 1 by mentioning the growth in the
complexity generated by the increased interdependence among countries. Also, this video can be
linked to the world economic pyramid for students to consider whether the people in the bottom
of the pyramid will benefit from the several kinds of technological advancement that we are still
to see, and the consequences of exclusion.
Chinese consumers have a new wish list

Video URL: http://www.youtube.com/watch?v=19JKczksdAI

Concept: Documentary regarding the change in the Chinese consumption patterns
Clip description: This video shows how the consumption patterns in China have changed in the
last few years due to its economic development.
Key outcome/points to consider: Students will have a better understanding of how the Chinese
economic development has changed the needs and wants of consumers. Additionally, students can
discuss the development differences between the urban and rural Chinese societies, and how some
items that are considered a commodity in big urban centres would be a luxury or unaffordable item
for parts of the rural Chinese population.
Is Russia 2018’s infrastructure ready?

Video URL:
https://edition.cnn.com/videos/sports/2017/12/01/russia-infrastructure-readiness-world-cup-
2018-fifa-football-fred-pleitgen-pkg.cnn
Concept: Russia hosted the 2018 FIFA world cup. The video talks about infrastructure issues in
preparing for one of the world’s largest and most prestigious sporting events.
Clip description: The video highlights some of the infrastructure issues that Russia faced in
preparing for the World Cup.
Key outcome/points to consider: This video explores infrastructure issues specifically related to
large but short-running events. Events like the World Cup are key for particular brands and
companies, but raise some unique difficulties for marketers. Students can generate a list of issues
raised in this video and how they can impact business operations in Russia before, during and after
the World Cup.
Australia-China Free Trade Agreement signed

Video URL: https://www.youtube.com/watch?v=9OlBLwr9X-s
Concept: Benefits and detriments of an FTA
Clip description: The main effects of the free-trade agreement between China and Australia.
Key outcome/points to consider: Students will have a better understanding of some of the main
issues involved in the negotiations of a free-trade agreement. Areas such as agriculture,
manufacturing, trade in services and effects on employment are showed in this video. Additionally,
this video can be used as a tool to discuss the opportunities and challenges that this FTA brings to
Australia.
Questions for discussion

1 Why is classifying countries useful to international marketers?

Classification of countries can be based on:

• trade structure: industrial or developing
• consumer buying patterns and income levels.
It is important for marketers to understand the market based on the factors outlined above. The
potential of the business performance is based on these factors. For example, an international
brand of coffee may work in Australia, but will not necessarily do well in a country like India
where the consumption of tea is more popular. The understanding of consumption behaviour
of consumers is critical to the feasibility of the business. The income level of consumers is
also important to understand. For example, a premium foreign brand such as Luis Vuitton may
not succeed in a country like Pakistan due to consumer affordability. Trade structure is another
factor whereby if the exporting country is developing and the labour and production cost is
cheaper, the international marketers may take advantage of developing resources such as
packaging or manufacturing in such countries to reduce their costs.
2 Using available data, assess the market potential for (a) power generators and (b) consumer
appliances in (i) the Philippines, (ii) Jordan, (iii) Spain and (iv) Nigeria.
The Philippines
The Philippines has allocated $274 million for investment in rural electricity programs. This
has allowed businesses to build new power generation capacity, access government funding
to build grids and set up the additional infrastructure required to supply power.
The Philippines has been urbanising extensively over the last few years. The country has
developed a strong middle-class consumer population that is willing to experiment with and
adopt new consumer appliances.
http://documents.worldbank.org/curated/en/482401468294949474/pdf/520830BRI0IFC01ici
ty0to0Rural0Areas.pdf
https://www.adb.org/sites/default/files/evaluation-document/167391/files/pper-phi-
electricity-market.pdf
https://www.reportbuyer.com/product/1167261/consumer-appliances-in-the-philippines.html
Jordan
Jordan is a moderate, developing nation in the Middle East. Most of it is still highly rural and
much of the population has a traditional lifestyle. The government owns and operates most of
the infrastructure, and access to the market may be difficult for electricity providers.
Due to many Jordanian’s traditional lifestyles, there may be little demand for consumer
appliances. For many, a lack of access to electricity devalues the purchase of consumer
appliances.
http://www.venturemagazine.me/2015/12/time-to-build/

Spain
The Spanish electricity distribution and control apparatus markets grew by 14% in 2015, due
to strong recovery in the country’s residential construction market and the launch of a new
power grid modernisation project. The electricity industry saw no new investment in
conventional (fossil fuel) projects in 2015. Instead, Spain believes that optimising the use of
pumped hydroelectricity that can be stored and used later is more efficient.
Spain recorded an average GDP growth of 3.2% in 2015, up from 1.4% in 2014, supported by
expansionary monetary policy, low oil prices, a looser fiscal stance and the depreciation of the
euro. Consumption has been particularly strong, boosted by rising real disposable incomes as
a result of increasing employment, tax reductions and falling prices.
Despite political instability, Spain’s GDP continued to grow in 2017. Moreover, the demand
for consumer appliances is rising due to rising consumers’ purchasing power.
http://www.euromonitor.com/consumer-appliances-in-spain/report
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Energy-and-
Resources/gx-er-market-reform-spain.pdf
Nigeria
The Nigerian currency was devalued in 2016. The devaluation of currency implies that
imported products and products that require imported materials become relatively more
expensive, as disposable income remains the same while the price of a particular good may
increase. As a result, this led to an increased preference for smaller and cheaper retail products,
particularly consumer appliances. More established brands of consumer appliances suffered a
decline in their sales volume due to this increased price sensitivity
Nigeria is a developing country economy. It has a significant electricity generation deficit.
This is partly because Nigeria has recently begun to recover from recession that reduced an
already small pool of funds available for infrastructure investment. Market realities have
driven Nigerian consumers to more energy efficient products and products that are not as
sensitive to interrupted or limited power supply.
http://www.euromonitor.com/consumer-appliances-in-nigeria/report
3 From the international marketer's point of view, what are the opportunities and
problems caused by increased urbanisation in developing countries?
Increased urbanisation in developing countries is advantageous for international marketing
because it centralises the potential market, thereby centralising the market research and
advertising areas. Urbanisation also simplifies the logistics of product distribution. The greater
ease of distribution to urban areas reduces product costs, and the savings may be passed on to
consumers, which increases the likelihood of consumption.
In urban areas, one phenomenon of marketing is that people are influenced by the consumption
habits of those around them through the demonstration effect. This means that advertising may
affect more people than it directly reaches. In contrast, in rural areas where there are few shops

displaying wide arrays of products, consumers may not be as aware of the goods available to
satisfy their existing needs.
Recently urbanised areas in developing countries differ from urban settings in developed
countries, and marketers must adjust their techniques accordingly. For example, in developing
countries people moving to urban centres have often left behind poor economic situations and
are looking for new opportunities in the city. However, many of these new urban dwellers
send most of their income to support family members outside the city. Thus, they may only
have enough money to purchase subsistence items until they have saved more. Additionally,
newly developed urban areas may lack the infrastructure to support the use of certain products.
For example, many of the suburbs in Manila, the Philippines, do not have electricity. This
would greatly impact a company planning to market electrical appliances or any energy-related
products there.
It should be noted that explosive urbanisation might complicate international marketers’
operations in the country in question, and elsewhere. An excellent example of this is the infant
formula controversy involving 25 large multinational companies, but for which Nestlé has
received most of the negative publicity. In this case, urbanisation has meant that women have
replaced breastfeeding with substitutes, such as infant formula, the proper preparation of
which may be difficult if not impossible in developing countries.
Moreover, the recent urbanisation in developing countries has also caused some social issues,
such increased crime rates, and some cities do not have the necessary structure to
accommodate such a high number of people, which can generate problems such as high traffic
and energy issues.
4 Is a country’s level of family income a good indicator of market potential?

Per capita income is often a good indicator of the purchasing power of a family unit in the
market. Other important factors include consumption patterns and the products considered
‘essential’ for families as opposed to individuals. On the other hand, per capita income may
inaccurately portray a nation’s market potential. Per capita figures are often represented in US
dollars, which may distort a currency’s value and undervalue or overvalue the market. A more
effective measurement is purchasing power parities (PPP), which shows how many units of
currency are needed in one country to buy the amount of goods and services that one unit of
currency will buy in another country.
Also, for relatively low-cost products, a market can be profitable even if the per capita income
is low, as is the case with the household durables market in the Philippines. Despite the
Philippines’ low per capita income, the large size of the market makes these items profitable
as long as products are generally affordable.
Additionally, it is important to notice the income inequality in developing countries. Although
a country’s per capita income may be low, there are usually a certain percentage, which might
be very significant, of wealthy consumers who buy expensive products. Urban centres in even
the poorest of countries have districts dedicated to high-income customers. International
marketers must research individual countries to determine the size of its moneyed population.
For example, consider the Chinese market for personal computers. Though China has a low
per capita income and low level of personal computer ownership (one in 6000), the country’s

GNP growth in the 1990s was 12.3% annually, making it an attractive market. This level of
growth in a large economy is enough to allow for new competitors to enter the market.
Some high-priced products have a high demand in low-income countries due to their social
prestige. For instance, motorcycles and television sets in China have a high demand, regardless
of their high-price in relation to the wages.
5 The pattern in consumer expenditure varies among countries and within them. What
does the current pattern of expenditure in China tell about opportunities for companies
from Australia and New Zealand?
The fast growth of the Chinese economy resulted in an increasing number of medium- and
high-class consumers. These high- and medium-class consumers generate an increasing
demand for consumer goods.
The high- and medium-income classes have generated an extremely significant increase in
luxury goods. China is now the world’s largest market for luxury goods. Thus, the Chinese
market has a great demand for luxury items, which can be explored by international
companies.
It is important to take into consideration the differences among urban and rural areas. For
instance, many Chinese do not own common household appliances. However, with the
increasing number of urban middle-class Chinese consumers, such appliances will be in heavy
demand in the near future. Also, China is currently the main export destination for Australian
services, and, as the numbers show, there is an increasing participation of services in the
Chinese GDP, leading to opportunities for Australian and New Zealand companies.
http://www.austrade.gov.au/Export/Export-Markets/Countries/China/Market-profile
http://www.economist.com/news/business/21579015-life-getting-harder-purveyors-luxury-
china-growth-prospects-are-still
Critical analysis questions

1 How have exports from your home country changed in recent times? Draw on data and
statistics (from national statistics offices), government organisations (Austrade, NZTE,
etc.) and media articles to build a composite picture. Record the changes in the direction
and composition of exports from 2010 onwards. For the top-10 destinations, go to the
Statistics Database on the WTO website and list their imports for the period that you are
researching. Has your country’s share changed?
It is important to notice that Australia did not feel the consequences of the 2008 economic
crisis very heavily due to its natural resource wealth and China’s increasing demand for such
items.
The ‘Trade at a Glance 2012–2016’ graph produced by the Australian Government
Department of Foreign Affairs and Trade shows Australia’s exports of goods and services
from 2012–2016. The graph can be found at the following link:

http://dfat.gov.au/trade/resources/trade-at-a-glance/pages/default.aspx
Major export destinations, 2017
1 China
2 Japan
3 United States
3 Republic of Korea
5 United Kingdom
6 New Zealand
7 India
8 Singapore
9 Thailand
10 Germany
Another useful web resource is the Composition of Trade statistics produced by the Australian
Government Department of Foreign Affairs and Trade: http://dfat.gov.au/about-
us/publications/Documents/cot-2016-17.pdf.
2 Using the statistical sources available through your library, such as the IMF Directory
of Trade Statistics (DOTS), trace the changes in the direction of exports of your country
over the past three decades. What do these changes tell us about the opportunities and
challenges facing international marketing?
The data reveals that Australia has increased trade with China over the period 2015–17 (see
http://data.imf.org/regular.aspx?key=61726507).
The data shows the improving economic relations and trade between Australia and China. This
is mainly because China and Australia recently announced a free trade agreement (ChAFTA).
This resulted in positive outcomes for both China and Australia in terms of growing income
from foreign investments. ChAFTA opens up the opportunity for greater market access to
China, with the elimination of tariff charges on Australian export products including dairy,
seafood, beef and lamb. On full implementation of CHAFTA, 99.9% of Australian products
in the manufacturing, resources and energy sectors will be exported to China without tariffs,
which will further improve the trade between the two countries. Consider the following
resources for further discussion on how these tariffs would influence the trade between
Australia and China:
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Foreign_Affairs_Defen
ce_and_Trade/Completed_inquiries/2004-07/china/report01/index
https://asialinkbusiness.com.au/china/getting-started-in-china/china-australia-free-trade-
agreement-chafta
3 According to the Japanese External Trade Organization (JETRO; see

https://www.jetro.go.jp/en/invest/whyjapan/ch1.html), the Japanese economy is ‘ever-

growing’. How would you assess this statement, and what other factors would make you
consider Japan as a potential market?
The economy of Japan is a highly developed and market-oriented economy. It is the third
largest in the world by nominal GDP and the fourth largest by purchasing power parity (PPP),
and is the world's second-largest developed economy. Therefore, the claim of ever-growing
economy is believable as it is a potential market for international marketers. Consider looking
at the following resource for reasons to invest in Japan:
https://www.jetro.go.jp/ext_images/en/invest/pamphlets/whyjapan_en_201707.pdf.
The other factors to consider Japan as a potential market include the following:
• improving GDP growth
• declining corporate tax rate
• increasing per capita income
• developed infrastructure
• increasing demand and supply.

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• Management flexibility to adapt and diversify in foreign markets.

2. Honda and Hero – what made them such a great partnership?

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• Ensure authenticity or artworks.]

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3. Discuss problems associated with measuring the effectiveness of a chatbot.

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○ Global market factors

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Suggestions for teaching

Suggested links to online video material

Fast food boom exceeds expectations

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Key outcome/points to consider: Students will be exposed to certain opportunities for

Talking point: Protectionism v. free trade

Wal-Mart’s green revolution

ENEZA Kenya’s innovative education app

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Simon Upton on the importance of green growth

Questions for discussion

2 Describe some opportunities and challenges in international marketing created by new

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technologically-advanced countries. This has led Australian industry to focus more on

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5. When do companies have to standardise their products? What factors influence

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• LG, a South Korean electronics and telecommunications giant

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Critical analysis questions

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The economic environment

Suggestions for teaching

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Suggested links to online video material

Chinese consumers have a new wish list

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Video URL: http://www.youtube.com/watch?v=19JKczksdAI

Is Russia 2018’s infrastructure ready?

Australia-China Free Trade Agreement signed

Questions for discussion

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Classification of countries can be based on:

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4 Is a country’s level of family income a good indicator of market potential?