Pir Mehr Ali Shah

Arid Agriculture University, Rawalpindi

Office of the controller of Examinations
Mid Exam / Spring 2020 (Paper Duration 48 hours)
To be filled by Teacher

Course No.: ………MGT_665…………Course Title:………Global Marketing………………………………

Total Marks:……….……18…………………Date of Exam:…………16/6/2020…………..........................
Degree: …BBA………………………………. Semester:…………6th +8th………… Section:………A………
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Q.No. 1 2 3 4 5 6 7 8 9 10 Obtained/
Total Marks
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Total Marks in Words:
Name of the teacher:
Who taught the course: Signature of teacher / Examiner:

To be filled by Student

Registration No.: 17-Arid-649…… Name:…… Seemab Ali Akbar

Answer the following questions.

Q.No.1. Describe the ways in which foreign exchange fluctuation affect;

(a) trade
(b) investments
(c) tourism in relation to global marketing?
Introduction:
Fluctuation in currency exceeds due to floating exchange rate system and the same is followed by
the major economies. Exchange rate of currencies against others rely on different factors such as
demand for currency and relative supply, inflation outlook, economic growth of countries, and so on.
Because these factors are constantly changing, currencies fluctuate with them. The fluctuation of a
country’s currency can have very drastic impact on the country’s economy and business . This means
that country’s currency improves or depreciates, it can have both positive and negative impacts on a
country’s economy, depending on the sector. Let’s take a closer look at the impact of currency
fluctuation on trade, investments and tourism in relation to global marketing.
Trade:
Currency fluctuations have very great impacts on trade, specifically businesses like export or import
with other countries are most severely affected. A change in currency has a direct impact on trade
business from bottom to top. For example, if any company has some deal with any other company at
the rate of 1 million dollars and the rate of dollar decreases suddenly then the first one has to bear
loss in rupees depending on how the dollar falls, obviously the profit margin will be decreased too.
Likewise , they could see an increase in their profit if the dollar performs heavily against the rupee.
These fluctuations can have some unforeseen consequences. For example , if a company uses trucks
to move its products and a currency change fluctuates the cost of fuel, there will be a direct
consequence on shipping costs. On another side depreciating currency reduce the cost of things
made by self and reduce import
Investment:
A weak domestic currency can increase the inflation rate in a country which is a big importer, just
because the price of foreign products will be increased. This may alarm the central bank to raise
interest rates to cope up with inflation and support the currency to prevent it from plunging sharply.
A strong currency depresses inflation and puts a drag on the economy that is a touchstone to hard
monetary policy. In response, a nation's central bank may keep interest rates low or reduce them
more so as to prevent the domestic currency from getting too strong. The exchange rate has an
indirect relation to the interest rate you pay on mortgage or car loan, or the interest you receive on
the money in your savings.
Tourism’s in relation to global marketing:
There is a great impact of currency fluctuation on tourism. If the Pakistani rupee falls in value for a
considerable amount of time, travelers going outside the country for their vacation will have to
spend more money in foreign countries. Travel businesses will experience a shift in holiday trends.
For example, if someone had their plan to go Europe but now they don't have much money to spend
there because the value of rupee decreased so they will decide to go somewhere else where the
value of rupee is higher than Europe and that place can be Africa for safari. Others may resort to
domestic tourism.

Q.No.2. Do you believe that licensing in represents a feasible long-term product development
strategy for a Company? Discuss in relation to in-house product development.
Answer:
Complain with strategic goal of increasing market share should be considered licensing if they have
proprietary product that can be manufacture easily at a foreign location Licensing provide an
opportunity to rapidly increase in volume of product however the increase in product doesn't result
large profit because of return are limited to a percentage of each product limit sold
Companies that Wish to expand into one or more commitment will find licensing could be the best
marketing entry strategy
Condition:
The strategic objective is to expand market share the company must not required large profit from
international license
Capability:
The company must be able to devote time and resources to receive license negotiate the contract
and monitoring the license it will not demand or able to devote subtitle
Advantages:

1. Entry into Target market is limited

2. The term of license must be monitored over the lifetime agreement and enforcement might like
necessary
3. The licensee company might use intellectual property provide to become a compotator company

Q.No.3. (a) Explain Hofstede cultural dimension theory in detail with reference to cross cultural
perspective and How it impacts on global marketing?
Answer:
In 1980's and early 1990's Greet Hofstede added some views regarding national cultural impacts on
all over the global warming. He presented 5 main dimensions given below.

a. Power distance:
 The first dimension, power distance, refers to the inequality between superiors and
subordinates. In the high power distance organization, organizational hierarchy is good.
There is a limit between managers and subordinates. On another side low power distance
organizations tend to have a flat organizational structure.
b. Individualism Vs Collectivism:
The second dimension, individualism-collectivisms about how people value themselves and
their organizations. People with high individualistic sense tend to care about self-
actualization and career progress in the organization, whereas people with low
individualistic sense tend to value organizational benefits more than their own interests.
c. uncertainty avoidance:
The third dimension, uncertainty avoidance, refers to ambiguity rate. In high uncertainty
avoidance organizations, there are more written rules in order to increase certainty. In low
uncertainty avoidance organizations, there are few written rules.
d. Masculinity Vs Femininity:
The fourth dimension, masculinity , explain the gender role in an organization, there are
many organizations where the male members reach to the high ranks but females are
unable to achieve that, because of gender inequality!
e. Long term Vs short term orientated:

The fifth dimension, Acceptance of that business results may take time to realize The
employee wishes an extended relationship with the corporate. And the other hand Short term
orientation is Results and achievements are set, and may be reached within timeframe The
employee will potentially change employer very often.
In his presentation of this theory he also explained that this cultural method would have impacts on
global marketing and this will have impact that everyone can get the information about any area In
which they want Their product and can advertise their product according to the culture of that
particular region.

(b) According to Hofstede in which dimension Asian culture falls in and how much such
orientations affect the way you market your product to Asian consumer?
Answer:
According to Hofstede's cultural dimensions the Asian countries fall in power distance is low and
collectivism is supported high uncertainty avoidance they have long term orientation. Now if we
have to market our product it could have very useful for persons and it could have to be like similar
nature to the Asian countries.