1. What is International Marketing?

Question 1

Who are the Stakeholders of an International Firm?

Answer 1

1. Expatriate Staff
2. Customers
3. Local workers and unions
4. Suppliers
5. Host-country government
6. Pressure groups
7. Financial Intermediaries
8. Shareholders
9. Competitors
10. Distributors/retailers

Question 2

Why do companies go abroad?

Answer 2

1. Market Drivers
2. Cost Drivers
3. Competitive Drivers

Question 3

Market Drivers ?

Answer 3

• Respond to client demands
• Consumer interest
• Product life cycle expansion

Question 4

Cost Drivers?

Answer 4

• Economies of scale - mass produce = manufacturing efficiency
• Cost savings: cheaper labour, material, etc.
• Technology/Communication advancement

Question 5

Competitive Drivers?

Answer 5

• Saturated local markets
• New foreign entrants
• Mergers and acquisitions
• Keep up/stay ahead of rivals

Question 6

International Marketing in the past.

Answer 6

1. The silk Road
2. China -> Europe
3. 100BC - A.D 1450 = change is slow
4. Spread:
   - > fundamental buddhism
   - > Diseases (rats)

Question 7

International Marketing in the present.

Answer 7

1. TheSilkRoad.com (2011 -2013)
   - > bitcoin
   - > change = rapidly quicker
2. New Silk Road
   - > increase trade
   - > political power
3. Distribution alot more spread out
   - > new co. overtaking
   - > wealth spreading out (america -> china)

Question 8

What does Figure 1.8 International Marketing Task consist of?

Answer 8

1. Firm environment (controllables)
   - > PPPP
2. Domestic environment (uncontrollables)
   - > political/ legal forces
   - > economic environment
   - > communication forces
3. Foreign environment (uncontrollables)
   - > Political/legal forces
   - > Social/cultural forces
   - > Global & infrastructure
   - > International Obligations
   - > Advancement of Tech
   - > Financial forces
   - > Economic forces

Question 9

List the types of risks in International Business.

Answer 9

1. Commercial Risk
2. Currency/ Financial Risk
3. Country (political/legal risks)
4. Cultural risk

Question 10

Explain Commercial Risk.

Answer 10

1. weak partner
2. operational problems
3. time of entry
4. competitive intensity
5. poor execution of strategy

Question 11

Explain Currency/Financial Risk.

Answer 11

1. Currency Exposure
2. Asset valuation
3. Foreign taxation
4. Inflationary and transfer pricing
5. Global sourcing

Question 12

Explain Country (political and legal risks).

Answer 12

1. Social/political unrest/instability
2. Economic mismanagement; inflation
3. Distribution of income, size of middle class
4. Government intervention; bureaucracy. red tape
5. Market access; barriers; profit repatriation
6. Legal safeguards for intellectual property rights

Question 13

Explain Cross-cultural risks.

Answer 13

1. Cultural distance
2. Negotiation patterns
3. DM styles
4. Ethical practices

Question 14

What are the 4 specific Rationales for Expansion?

Answer 14

1. Proactive - internal
2. Proactive - external
3. Reactive - internal
4. Reactive - external

Question 15

Explain Proactive - internal.

Answer 15

1. Managerial desire
2. USP
3. Utilise excess capacity
4. Small size of domestic mkt
5. Stagnant or declining domestic mkt

Question 16

Explain Reactive - internal.

Answer 16

1. Diversifying risk

2. Reduce the disadvantage of seasonality

Question 17

Explain Proactive - external.

Answer 17

1. Opportunities in foreign markets

2. Other sources of stimulus e.g. gov, banks, etc.

Question 18

Explain Reactive - external.

Answer 18

1. Unsolicited order
2. Competitor strategy
3. Supplier Stimulus

Question 19

List the Stages of Internationalisation.

Answer 19

1. Domestic Mktg -ethnocentric (ararat kebabs)
2. Export Mktg - ethnocentric (goon)
3. International country-by-country MKtg - local product development based on local needs (aldi)
4. Multinational region-by-region Mktg - standardise within region but not across (ford)
5. Global Mktg. - integrate, coordinate, allocated (apple)