AACSB: Analytic
Blooms: Remember
Difficulty Level: 2 Medium
Learning Objective: 01-03 The scope of the international marketing task
Topic: The International Marketing Task
91.Explain with an example how domestic competition affects prospects of an international marketer.
Competition within the home country can have a profound effect on the international marketer’s task. Students’ examples might vary. For more than a century, Eastman Kodak dominated the U.S. film market and could depend on achieving profit goals that provided capital to invest in foreign markets. However, the competitive structure changed when Fuji Photo Film became a formidable competitor by lowering film prices in the United States, opening a $300 million plant, and soon gaining 12 percent of the U.S. market. Competition within its home country affects a company’s domestic as well as international plans.
AACSB: Reflective Thinking
Blooms: Apply
Difficulty Level: 3 Hard
Learning Objective: 01-03 The scope of the international marketing task
Topic: The International Marketing Task
92.Explain how the “alien status” of a company amplifies the political and legal issues faced by the company in a foreign market.
Political and legal issues a business faces abroad are often amplified by the “alien status” of the company, which increases the difficulty of properly assessing and forecasting the dynamic international business climate. The alien status of a foreign business has two dimensions: It is alien in that foreigners control the business and in that the culture of the host country is alien to management. The alien status of a business means that, when viewed as an outsider, it can be seen as an exploiter and receive prejudiced or unfair treatment at the hands of politicians, legal authorities, or both. Political activists can rally support by advocating the expulsion of the “foreign exploiters,” often with the open or tacit approval of authorities.
AACSB: Analytic
Blooms: Understand
Difficulty Level: 3 Hard
Learning Objective: 01-03 The scope of the international marketing task
Topic: The International Marketing Task
93.What are the primary obstacles to success in international marketing?
The primary obstacles to success in international marketing are a person’s self-reference criterion (SRC) and an associated ethnocentrism. The SRC is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions. Closely connected is ethnocentrism, that is, the notion that people in one’s own company, culture, or country know best how to do things. Ethnocentrism is generally a problem when managers from affluent countries work with managers and markets in less affluent countries. Both the SRC and ethnocentrism impede the ability to assess a foreign market in its true light.
AACSB: Analytic
Blooms: Remember
Difficulty Level: 2 Medium
Learning Objective: 01-04 The importance of the self-reference criterion (SRC) in international marketing
Topic: The Self-Reference Criterion and Ethnocentrism: Major Obstacles
94.To avoid errors in business decisions, it is necessary to conduct a cross-cultural analysis that isolates the self-reference criterion influences. List the four steps that make up the framework for such an analysis.
The steps are: (1) define the business problem or goal in home-country cultural traits, habits, or norms; (2) define the business problem or goal in foreign-country cultural traits, habits, or norms through consultation with natives of the target country—make no value judgments; (3) isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem; and, (4) redefine the problem without the SRC influence and solve for the optimum business goal situation.
AACSB: Analytic
Blooms: Remember
Difficulty Level: 2 Medium
Learning Objective: 01-04 The importance of the self-reference criterion (SRC) in international marketing
Topic: The Self-Reference Criterion and Ethnocentrism: Major Obstacles
95.Describe the “regular foreign marketing” stage of international marketing involvement.
At the “regular foreign marketing” stage, the firm has permanent productive capacity devoted to the production of goods and services to be marketed in foreign markets. A firm may employ foreign or domestic overseas intermediaries, or it may have its own sales force or sales subsidiaries in important foreign markets. The primary focus of operations and production is to service domestic market needs. However, as overseas demand grows, production is allocated for foreign markets, and products may be adapted to meet the needs of individual foreign markets. Profit expectations from foreign markets move from being seen as a bonus in addition to regular domestic profits to a position in which the company becomes dependent on foreign sales and profits to meet its goals.