Internatioanl marketing - методичка готова

Ministry of Education and Science of Ukraine
Ivan Franko National University of Lviv
International Marketing
Methodical guidelines and lessons plans
for students of the Faculty of Economics
Rostyslav Hnatyuk
Lviv – 2020
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CONTENTS
Chapter 1. The scope and challenge of International marketing.
Chapter 2. History and geography in International marketing.
Chapter 3. Cultural environment of the International marketing.
Chapter 4. The political and legal environment of the International
marketing.
Chapter 5. International marketing research.
Chapter 6. Global marketing management.
Chapter 7. Products and services in the Global market.
Chapter 8. International marketing channels.
Chapter 9. International marketing communications and
International advertising.
Chapter 10. Pricing for international markets.
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INTRODUCTION
Today, any business is global in scope. Thus, the International
marketing course provides the students with theoretical knowledge and
practical skills that are widely used by international companies in the
sphere of marketing.
The aims of the course are: to master necessary terms and
definitions in the international marketing, as well as specific tools used by
the marketer in global business; to be able to analyze a country specific
characteristics in terms of marketing penetration; to understand thoroughly
the product, pricing, distribution and promotion policy components of the
companies’ overall strategy as well as to be able to compare, suggest and
choose the most appropriate ones; to be aware of the main cases of success
in the international marketing and main global market players.
This course addresses the modern issue of marketing in global
business environment. Topics covered include scope and challenge of
international marketing, international historical, geographical, cultural,
legal and political environment of global business, international marketing
research, planning and organization, products and services for consumers
and for business, international marketing channels, pricing,
communication and advertisement. The main aim of the course is to create
for students a deep understanding of how international and global
marketing really work as well as fuel them with the practical knowledge of
real cases in international business in order for them to comprehend the
reasons and consequences of problems that many companies experience
due to inappropriate marketing policy.
These Methodical guidelines and lessons plans are to be used by the
students of Economic faculty when preparing for their practical lessons.
Every chapter includes questions that must be thoroughly reviewed and
answered in order to be correctly prepared. These guidelines also include
main references to be used, the most important definitions to be learned
and examples of tests that could be encountered at the exam. Furthermore,
it includes cases that could be encountered in the referenced literature and
must be studied and answered by the students in order to receive a
comprehensive mark.
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CHAPTER 1
The Scope and Challenge of International Marketing
1. International marketing defined.
2. The scope of international marketing task:
a) Marketing decision factors;
b) Aspects of the domestic environment;
c) Aspects of the foreign environment;
3. International marketing concepts and SRC.
4. Stages of international marketing involvement.
References
1. Philip R. Cateora, John L. Graham. International Marketing. 15-
th Edition. - McGraw-Hill, - 2013. - Р. 2-25.
2. Johny Johansson. Global Marketing. 5th Edition. - McGraw-
Hill, - 2008. - Р. 3-30.
Terms and definitions
International marketing - the performance of business activities designed
to plan, price, promote, and direct the flow of a company’s goods and
services to consumers or users in more than one nation for a profit.
Controllable elements - the aspects of trade over which a company has
control and influence; they include marketing decisions covering product,
price, promotion, distribution, research, and advertising.
Uncontrollable elements - factors in the business environment over which
the international marketer has no control or influence; may include
competition, legal restraints, government controls, weather, consumer
preferences and behavior, and political events.
Domestic environment uncontrollables - factors in a company’s home
country over which the company has little or no control or influence. They
include political and legal forces, the economic climate, level of
technology, competitive forces, and economic forces.
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Foreign environment uncontrollable - factors in the foreign market over
which a business operating in its home country has little or no control or
influence. They include political and legal forces, economic climate,
geography and infrastructure, level of technology, structure of distribution,
and level of technology.
Self-reference criterion (SRC) - an unconscious reference to one’s own
cultural values, experience, and knowledge as a basis for a decision.
Questions
1. How can the increased interest in international marketing be explained?
2. What are the factors that drive the globalization of the automobile
industry?
3. Discuss the four phases of international marketing involvement.
4. Discuss the conditions that have led to the development of global
markets.
5. Differentiate between a global company and a multinational company.
6. Differentiate among the three international marketing concepts.
7. Discuss the three factors necessary to achieve global awareness.
8. Define and discuss the idea of global orientation.
9. Are domestic marketing and international marketing different only in
scope but not in nature?
Cases
1. Do you feel that marketing is relevant to and should be used locally as
well as internationally by: (a) international agencies (e.g., the United
Nations); (b) national, state, and/or city governments and (c) priests,
monks, churches, and/or evangelists?
2. Study the following cases and answer the questions therein:
a) Starbucks – going global fast.
b) Coke and Pepsi learn to compete in India.
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CHAPTER 2
History and Geography in international marketing
1. The importance of history and geography in understanding

international markets
2. The effects of history on a country’s culture
3. The effect of geographic diversity on economic profile of a
country:
a) Climate and topography;
b) Geography, nature, and economic growth;
c) Social responsibility and environmental management;
d) Resources.
4. Dynamics of global population trends:
a) Controlling population growth;
b) Rural/urban migration;
c) Population decline and aging;
d) Worker shortage and immigration.
References
Hill, - 2008. - Р. 57-96.
Questions
1. Why study geography in international marketing?

2. Why study a country’s history?
3. How does an understanding of history help an international marketer?
4. Some say the global environment is a global issue rather than a national
one. What does this mean?
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5. The world population pattern is shifting from rural to urban areas.
Discuss the marketing ramifications.
6. The telegraph, the telephone, television, satellites, the computer, mobile
phones, and the Internet have all had an effect on how international
business operates. Discuss how each of these communications innovations
affects international business management.
Cases
1. Pick a country and show how employment and topography affect
marketing within the country.
2. Pick a country, and show how significant historical events have affected
the country’s culture.
3. Select a country with a stable population and one with a rapidly
growing population. Contrast the marketing implications of these two
situations.
Tests
1. Which of the following elements of geography are considered to be
very important environmental considerations when appraising a
market?
A) land mass density and population density
B) coal-burning industries and amount of river travel
C) climate and physical terrain
D) number of usable maps and literacy rate
E) number of managers versus number of laborers
2. Historical events always are viewed from one's own biases and
_______________, and thus what is recorded by one historian may not
be what another records, especially if the historians are from different
cultures.
A) political agenda
B) social class
C) group affiliation
D) self-reference criteria (SRC)
E) geographic sphere
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CHAPTER 3
Cultural environment of the International marketing
Part I
Cultural Dynamics in Assessing Global Markets
1. Culture’s pervasive impact.
2. Definitions and origins of culture:
a) Geography and history;
b) Political economy and Technology;
c) Social institutions.
3. Elements of Culture:
a) Cultural values;
b) Rituals;
c) Symbols;
d) Beliefs;
e) Thought processes.
4. Cultural change and cultural borrowing.
5. Resistance to Change:
a) Planned cultural change;
b) Unplanned cultural change.
References
Hill, - 2008. - Р. 57-96.
Culture - the human-made part of human environment - the sum total of
knowledge, beliefs, arts, morals, laws, customs, and any other capabilities
and habits acquired by humans as members of society.
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Social institutions - the methods and systems, including family, religion,
school, the media, government, and corporations, that affect the ways in
which people relate to one another, teach acceptable behavior to
succeeding generations, and govern themselves.
Cultural values - the system of beliefs and customs held by a population
in a given culture.
Rituals - patterns of behavior and interaction that are learned and repeated.
Linguistic distance - the measure of difference between languages; an
important factor in determining the amount of trade between nations.
Aesthetics - philosophically, the creation and appreciation of beauty;
collectively, the arts, including folklore, music, drama, and dance.
Cultural borrowing - phenomenon by which societies learn from other
cultures’ ways and borrow ideas to solve problems or improve conditions.
Cultural congruence - a marketing strategy in which products are
marketed in a way similar to the marketing of products already in the
market in a manner as congruent as possible with existing cultural norms.
Planned change - a marketing strategy in which a company deliberately
sets out to change those aspects of a foreign culture resistant to
predetermined marketing goals.
Unplanned change - a marketing strategy in which a company introduces
a product into a market without a plan to influence the way the market’s
culture responds to or resists the company’s marketing message.
Questions
1. What role does the marketer play as a change agent?
3. Discuss the three cultural change strategies a foreign marketer can
pursue.
5. What is the importance of cultural empathy to foreign marketers? How
do they acquire cultural empathy?
6. Why should a foreign marketer be concerned with the study of culture?
7. What is the popular definition of culture? Where does culture come
from?
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9. “For the inexperienced marketer, the ‘similar-but-different’ aspect of
culture creates an illusion of similarity that usually does not exist.”
Discuss and give examples.
10. Outline the elements of culture as seen by an anthropologist. How can
a marketer use this cultural scheme?
11. Social institutions affect culture and marketing in a variety of ways.
Discuss, giving examples.
12. “Markets are the result of the three-way interaction of a marketer’s
efforts, economic conditions, and all other elements of the culture.”
Comment.
13. What are some particularly troublesome problems caused by language
in foreign marketing? Discuss.
15. Cultures are dynamic. How do they change? Are there cases in which
changes are not resisted but actually preferred? Explain. What is the
relevance to marketing?
16. How can resistance to cultural change influence product introduction?
Are there any similarities in domestic marketing? Explain, giving
examples.
19. Find a product whose introduction into a foreign culture may cause
dysfunctional consequences and describe how the consequences might be
eliminated and the product still profitably introduced.
Cases
1. As Hispanic consumers in the United States are also American
consumers, is it necessary for marketers to adjust their marketing mix for
this market segment?
a) Global perspective: equities and Ebay—culture gets in the way.
b) Cultural norms, fair and lovely, and advertising.
c) The not-so-wonderful world of EuroDisney.
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Part II
Culture, management style and business systems
1. The necessity for adapting to cultural differences:
a) Imperatives;
b) Electives;
c) Exclusives.
2. Management styles around the world:
a) Authority and decision making;
b) Communication styles;
c) Formality and tempo;
d) P-Time versus M-Time.
3. Negotiations emphasis and marketing orientation.
4. Business Ethics:
a) Corruption defined;
b) Bribery: variations on a theme;
c) Ethical and socially responsible decisions.
5. Culture’s influence on strategic thinking:
a) Synthesis: relationship-oriented vs. information-oriented
cultures.
References
Hill, - 2008. - Р. 57-96.
Cultural imperative - a business custom (as in a foreign country) that must
be recognized and accommodated.
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Cultural elective - a business custom (as in a foreign country) to which
adaptation is helpful but not necessary.
Cultural exclusive - a business custom (as in a foreign country) in which
an outsider must not participate.
M-time - monochromatic time; describing a view of time, typical of most
North Americans, Swiss, Germans, and Scandinavians, as something that
is linear and can be saved, wasted, spent, and lost. M-time cultures tend to
concentrate on one thing at a time and value promptness.
P-time - polychromatic time; a view of time, as held in “high context”
cultures, in which the completion of a human transaction is more
important than holding to schedules. P-time is characterized by the
simultaneous occurrence of many things.
Bribery - the use of funds, usually illegally, to influence decisions made
by public employees and government officials. Such payments often range
into the millions of dollars in international commerce.
Lubrication - the use of funds to expedite actions of public employees
and government officials. The payments made to minor officials may or
may not be illegal and are usually of inconsequential amounts.
Subornation - the giving of large sums of money - frequently not fully
accounted for - designed to entice an official to commit an illegal act on
behalf of the one offering the money.
Extortion – when payments are extracted under duress by someone in
authority from a person seeking only what he or she is lawfully entitled to.
Questions
1. Suggest ways in which persons might prepare themselves to handle
unique business customs that may be encountered in a trip abroad.
2. Business customs and national customs are closely interrelated. In
which ways would one expect the two areas to coincide, and in which
ways would they show differences? How could such areas of similarity
and difference be identified?
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3. Identify both local and foreign examples of cultural imperatives,
electives, and exclusives. Be prepared to explain why each example fits
into the category you have selected.
4. Contrast the authority roles of top management in different societies.
How do the different views of authority affect marketing activities?
5. Compare three decision-making authority patterns in international
business.
6. Suggest some cautions that an individual from a relationshiporiented
culture should bear in mind when dealing with someone from an
information-oriented culture.
7. Differentiate among the following: bribery, extortion, lubrication,
subornation.
8. Distinguish between P-time and M-time.
9. Discuss how a P-time person reacts differently from an M-time person
in keeping an appointment.
10. What are the three ethical principles that provide a framework to help
distinguish between right and wrong? Explain.
Cases
1. “The company.com page is a company’s front door and that doorway
should be global in scope.” Discuss. Visit several Web pages of major
multinational companies and evaluate their “front door” to the global
world.
2. Visit the Web sites of Shell and Nike and compare their statements on
corporate values. What are the major issues each addresses? Do you think
their statements are useful as guides to ethical and socially responsible
decision making?
a) Global perspective: Do blondes have more fun in Japan?
b) Marketing Microwave Ovens to a New Market Segment.
c) Coping with Corruption in Trading with China.
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CHAPTER 4
The Political and Legal environment of the
International marketing
Part I
The international political environment
1. Forms of government.
2. Political risks of global business:
a) Confiscation, expropriation and domestication;
b) Economic risks;
c) Political sanctions;
d) Political and social activists and NGO’s.
3. Assessing political vulnerability:
a) Politically sensitive products and issues;
b) Forecasting political risk.
4. Lessening political vulnerability:
a) Joint ventures;
b) Expanding the investment base;
c) Licensing;
d) Planned domestication;
e) Political bargaining;
f) Political payoffs.
References
1. Philip R. Cateora, John L. Graham. International Marketing.
15-th Edition. - McGraw-Hill, - 2013. - Р. 158-183.
Hill, - 2008. - Р. 99-184.
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Confiscation - the seizing of a company’s assets without payment.
Prominent examples involving U.S. companies occurred in Cuba and Iran..
Expropriation - the seizure of an investment by a government in which
some reimbursement is made to the investment owner; often the seized
investment becomes nationalized.
Domestication - a process by which a host country gradually transfers
foreign investments to national control and ownership through a series of
government decrees mandating local ownership and greater national
involvement in company management.
Questions
1. Why would a country rather domesticate than expropriate?
2. What are the main factors to consider in assessing the dominant political
climate within a country?
3. How can a change in the political party in power affect an
investor? Discuss and give examples.
4. Discuss how governmental instability can affect marketing.
5. What are the most frequently encountered political risks in
foreign business? Discuss.
6. Expropriation is considered a major risk of foreign business. Discuss
ways in which this particular type of risk can be minimized somewhat as a
result of company activities.
7. Discuss measures a company might take to lessen its political
vulnerability.
8. Select a country and analyze it politically from a marketing
viewpoint.
9. There is evidence that expropriation and confiscation are less frequently
encountered today than just a few years ago. Why? What other types of
political risks have replaced expropriation and confiscation in importance?
Cases
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1. According to Harvey E. Heinbach, a vice-president of Merrill Lynch,
"You're better off making any car in Japan than in the U.S. But the
political realities don't allow that." Discuss this comment from both
economic and political perspectives and as related to the United States and
Japan.
a) Global perspective: World trade goes bananas. Discuss ways the
companies discussed in could have minimized their losses in the
banana wars.
b) IKEA’s Global Strategy: Furnishing the World
c) Toys “R” Us Goes to Japan.
Part II
The international legal environment
1. Bases for Legal Systems:
a) Common vs. Code law;
b) Islamic law;
c) Marxist–socialist tenets.
2. Jurisdiction and international dispute resolution.
3. Protection of intellectual property rights.
4. Cyberlaw: unresolved issues.
5. Commercial law within countries. Marketing laws.
References
Hill, - 2008. - Р. 99-184.
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Common law - the body of law based on tradition, past practices, and legal
precedents set by courts through interpretations of statutes, legal
legislation, and past rulings. Common law, which is used in all states in
the United States except Louisiana, uses past decisions to interpret statutes
and apply them to present situations. Also known as English law.
Code law - a legal system based on an all-inclusive system of written
rules, or codes, of law; generally divided into three separate codes:
commercial, civil, and criminal.
Islamic law - the Shari’ah; the legal system based on an interpretation of
the Koran. Islamic law encompasses religious duties and obligations as
well as the secular aspect of law regulating human acts. Among its
provisions is a prohibition of the payment of interest.
Conciliation - a nonbinding agreement between parties to resolve disputes
by asking a third party to mediate differences. Also known as mediation.
Arbitration - a procedure, used as an alternative to litigation, in which
parties in a dispute may select a disinterested third party or parties as
referee to determine the merits of the case and make a judgment that both
parties agree to honor.
Litigation - the process in which a dispute between parties is contested in
a formal judicial setting; commonly instigated by a lawsuit asserting one
party’s version of the facts.
Cybersquatters (CSQs) - Persons or businesses that buy, usually for a
nominal fee, and register as Web site names descriptive nouns, celebrity
names, variations on company trademarks, geographic and ethnic group
names, and pharmaceutical and other descriptors and then hold them until
they can be sold at an inflated price. Sometimes called CSQ.
Questions
1. How does the international marketer determine which legal system will
have jurisdiction when legal disputes arise?
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2. Discuss the state of international commercial law.
3. Discuss some of the reasons seeking an out-of-court settlement in
international commercial legal disputes is probably better than suing.
4. What are intellectual property rights? Why should a company in
international marketing take special steps to protect them?
5. Discuss the advantages to the international marketer arising
from the existence of the various international conventions on
trademarks, patents, and copyrights.
6. Differentiate between conciliation and arbitration.
7. Discuss the issues of a Web site owner being liable for information
posted on the site.
8. Discuss the motives of a cybersquatter. What recourse does a
company have to defend itself against a cybersquatter?
Cases
1. Assume you are a vice president in charge of a new business-to-
business e-commerce division of a well-known major international auto
parts manufacturer. A cybersquatter has registered the company name as a
domain Web name. What are your options to secure the domain name for
your company? Discuss the steps you should take to ensure worldwide
protection of your domain name.
a) Global perspective: The Pajama Caper.
b) Globalization Headaches at Whirlpool.
Tests
1. All of the following are considered to be economic risks of doing
business abroad EXCEPT:
A) exchange controls.
B) local-content laws.
C) import restrictions.
D) tax controls.
E) all of the above.
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CHAPTER 5
International marketing Research
1. Breadth and scope of International marketing Research
2. Defining the problem and establishing Research:
a) Objectives
b) Problems of availability and use of secondary Data
c) Availability of data
d) Reliability of data
e) Comparability of data
f) Validating secondary data
3. Gathering primary data: Quantitative and Qualitative Research:
a) Problems of gathering primary data
b) Sampling in field surveys
c) Multicultural Research: A special problem
d) Research on the Internet: A growing opportunity
e) Estimating Market Demand
4. Problems in Analyzing and Interpreting Research
References
Questions
1.Discuss the breadth and scope of international marketing research. Why
is international marketing research generally broader in scope than
domestic one?
2. The measure of a competent researcher is the ability to utilize the most
sophisticated and adequate techniques and methods available within the
limits of time, cost, and the present state of the art. Comment.
3. What is the task of the international marketing researcher? How is it
complicated by the foreign environment?
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4. Discuss the stages of the research process in relation to the problems
encountered.
5. Why is the formulation of the research problem difficult in market
research?
6. What are some problems created by language and the ability to
comprehend the questions in collecting primary data? How can a foreign
market researcher overcome these difficulties?
7. Discuss when qualitative research may be more effective than
quantitative.
8.What are some problems created by language and the ability to
comprehend the questions in collecting primary data? How can a foreign
market researcher overcome these difficulties?
9. Sampling offers some major problems in market research. Discuss.
Cases
a) International marketing Research at the Mayo Clinic.
Tests
1. Unisys Corporation suggests that five areas should receive an

information gatherer's attention when conducting research. Which of
the following areas would be the best avenue for research if the
researcher were interested in a general non-economic review of
conditions affecting the company's business?
A) economic
B) overview of market conditions
C) summary of the technological environment
D) competitive situation
E) cultural, sociological, and political estimate
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CHAPTER 6
Global marketing management
1. Global marketing management: benefits of Global marketing
2. Planning for Global markets:
a) Company objectives and resources
b) International commitment
c) The planning process
3. Alternative market-entry strategies
a) Exporting
b) Contractual agreements
c) Strategic international alliances
d) Direct foreign investment
References
Hill, - 2008. - Р. 371-400.
3. Svend Hollensen. Global Marketing: a Decision Oriented
Approach. 5th ed. - Pearson, - 2011. - P. 315-428.
Direct exporting - the type of exporting in which a company sells to a
customer in another country.
Indirect exporting - the type of exporting in which a company sells to a
buyer (an importer or distributor) in the home country; the buyer in turn
exports the product.
Licensing - a contractual means by which a company grants patent rights,
trademark rights, and the rights to use technology to another company,
often in a foreign market; a favored strategy of small and medium-sized
companies seeking a foothold in foreign markets without making large
capital outlays.
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Franchising - A form of licensing in which a company (the franchiser)
provides a standard package of products, systems, and management
services to the franchisee, which in foreign markets has market
knowledge. Franchising permits flexibility in dealing with local market
conditions while providing the parent firm with a degree of control.
Strategic International Alliance (SIA) - a business relationship
established by two or more companies to cooperate out of mutual need and
to share risk in achieving a common objective.
Joint venture - a partnership of two or more participating companies that
join forces to create a separate legal entity.
Questions
1. Define strategic planning. How does strategic planning for international
marketing differ from domestic?
2. Discuss the effect of shorter product life cycles on a company’s
planning process.
3. In which phase of planning processes companies establish screening
criteria against which prospective countries could be evaluated?
4. How will entry into a developed foreign market differ from entry into a
relatively untapped market?
5. Why do companies change their organizations when they go global?
6. Compare the organizational implications of joint ventures versus
licensing.
7. Why does a global sales force cause special compensation problems?
8. Under which circumstances should expatriate salespeople be utilized?
9. How do legal factors affect international sales management?
10. Adaptability and maturity are traits needed by all salespeople. Why
should they be singled out as especially important for international
salespeople?
11. Which factors complicate the task of motivating the foreign sales
force?
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Cases
a) Raleigh bicycles: does the iconic bicycle brand still have a chance
on the world market?
b) IKEA: expanding through franchising to the South American
market?
c) IMAX Corporation: globalization of the film business.
Tests
1. The Blue Flame Company (a company that sells small gas heaters)
has just sold 5,000 heaters to a buyer in Northern Africa. Which of
the following market entry modes has Blue Flame engaged in?
A) direct exporting
B) indirect exporting
C) licensing
D) joint venturing
E) direct investment
2. Which of the following market entry modes is primarily a

partnership between two (or more) international companies where the
result is a new legal entity?
A) direct exporting
B) indirect exporting
C) licensing
D) joint venturing
E) direct investment
3. The Caliber Corporation is at the stage of international planning

where specific budgets need to be devised for its various markets and
plans. In which stage of the international planning process would you
expect to see these activities?
A) Phase 1-preliminary analysis and screening where company/country
needs are matched
B) Phase 2-adapting the marketing mix to target markets
C) Phase 3-developing the marketing plan
D) Phase 4-implementation and control
E) none of the above phases
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CHAPTER 7
Products and services in the Global market
Part I
Products and services for consumers
1. Quality
a) Quality defined
b) Maintaining quality
c) Physical or mandatory requirements and adaptation
2. Products and culture
a) Innovative products and adaptation
b) Diffusion of innovations
c) Production of innovations
3. Analyzing product components for adaptation
a) Core component
b) Packaging component
c) Support services component
4. Marketing consumer services globally
a) Services opportunities in Global markets
b) Barriers to entering Global markets for consumer services
References
Hill, - 2008. - Р. 401-430.
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Product homologation - A term used to describe changes in a product that
are mandated by local standards for product and service quality.
Diffusion - the adoption or spread of products across markets by
increasing numbers of consumers.
Questions
1. Debate the issue of global versus adapted products for the international
marketer.
2. Discuss product alternatives and the three marketing strategies:
domestic market extension, multidomestic markets, and global market
strategies.
3. Discuss the different product strategies available to an international
marketer.
4. Define the country-of-origin effect and give examples.?
5. Discuss how products can be adapted (physically, culturally) for foreign
markets.
6. What are the three major components of a product? Discuss
their importance to product adaptation.
Cases
a) Zippo Manufacturing Company: has product diversification beyond
the lighter gone too far?
Tests
1. Quality can be defined on two dimensions. One of these dimensions

is performance quality. What is the other dimension?
A) stress tolerance
B) market-perceived quality
C) documented quality
D) tested quality from testing agencies
E) engineering quality
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Part II
Global Branding
1. Brands defined
2. Brand equity and brand identity
3. Brand versus no brand
4. Advantages and disadvantages of Global brands
5. Sensory, celebrity branding and other brand types
References
Hill, - 2008. - Р. 401-430.
Questions
1. When is it appropriate to use multiple brands in (a) a single market and
(b) several markets/countries?
2. Identify the major barriers to developing international brands.
3. What are the characteristics of a good international brand name?
4. Are you or your peers influenced by brand names? For which products?
Why, or why not?
5. Analyze the reasons why some local products (such as local beers)
might have an enhanced potential when standardized global brands enter
the market.
Cases
a) Danish Klassic: launch of a cream cheese in Saudi Arabia
b) Banyan Tree Hotels and Resorts: Building an International Brand
from an Asian Base
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Part III
Products and services for business
1. Demand in Global business-to-business markets

a) The volatility of industrial demand
b) Stages of economic development
c) Technology and market demand
2. Quality and global standards
a) Quality is defined by the buyer
b) ISO 9000 and HACCP
3. Business services
a) After-sale services
b) Other business services
4. Trade shows and Relationship marketing in B-to-B
References
Derived demand - Demand that is dependent on another source; it can be
fundamental to the success of efforts to sell capital equipment and big-
ticket industrial services.
Relationship marketing - The aspect of marketing products that depends
on long-term associations with customers; an important factor in business-
to-business contexts and especially important in most international
markets, where culture dictates strong ties between people and companies.
Questions
1. What are the differences between consumer and industrial goods and
what are the implications for international marketing?
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2. What roles do service, replacement parts, and standards play in
competition in foreign marketing? Illustrate.
3. Discuss the role industrial trade fairs play in international marketing.
4. Discuss the competitive consequences of being ISO 9000 certified.
5. Discuss how the characteristics that define the uniqueness of industrial
products lead naturally to relationship marketing. Give some examples.
6. Discuss the international market environment for business services.
7. Discuss how the various stages of economic development affect the
demand for industrial goods.
Tests
1. The Windsor Group is concerned that consumers will not be able to

get sufficient spare parts for the company's new line of air
conditioners. Which element of product component model would be
the element that contains The Windsor Group's concern?
A) core component
B) packaging component
C) support services component
D) communication component
E) global component
2. Why is the marketing of industrial products and services a natural

fit with relationship marketing?
A) because of the low cost of relationship marketing
B) because of the basic nature of industrial marketing's closeness to its
customers
C) because it is mandated by most governments that allow international
marketing within their borders
D) because it is the only way most industrial marketers know how to do
business
E) none of the above
29
CHAPTER 8
International marketing channels
1. Channel-of-distribution structures
Import-oriented distribution structure
Japanese Distribution Structure
2. Distribution Patterns
Retail Patterns
3. Alternative Middleman Choices
Home-country middlemen
Foreign-country middlemen
Government-affiliated middlemen
4. Factors affecting choice of channels
5. Channel Management
6. Internet and Logistics
References
Hill, - 2008. - Р. 487-514.
Distribution channel - the various routes through which marketers must
negotiate their goods to deliver them to the consumer. Distribution channel
structures range from those with little developed marketing infrastructure,
as found in many emerging markets, to those with a highly complex,
multilayered systems, as found in Japan.
Distribution process - the physical handling of goods, the passage of
ownership (title), and especially important from a marketing viewpoint the
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buying and selling negotiations between the producers and middlemen and
between middlemen and customers.
Distribution structure - the system, present in every country’s market,
through which goods pass from producer to user; within the structure are a
variety of middlemen.
Agent middlemen - in an international transaction, intermediaries who
represent the principal (home manufacturer/marketer) rather than
themselves; agent middlemen work on commission and arrange for sales
in the foreign country but do not take title to the merchandise.
Merchant middlemen - in international transactions, the intermediaries,
located in the foreign market, who take title to the home-country
manufacturer’s goods and sell on their own account. Manufacturers using
merchant middlemen have less control over the distribution process than
those using agent middlemen.
Home-country middlemen - in international transactions, the
intermediaries, located in the producer’s home country, who provide
marketing services from a domestic base; also known as domestic
middlemen. Home-country middlemen offer advantages for companies
with small international sales volume or for those inexperienced in
international trade.
Export management company (EMC) - an important middleman for
firms with relatively small international volume or those unwilling to
involve their own personnel in the international function. These EMCs
handle about 10 percent of the manufactured goods exported. Typically,
the EMC becomes an integral part of the marketing operations of its client
companies. Working under the names of the manufacturers, the EMC
functions as a low-cost, independent marketing department with direct
responsibility to the parent firm. The working relationship is so close that
customers are often unaware they are not dealing directly with the export
department of the company.
Complementary marketing - the process by which companies with excess
marketing capacity in different countries or with a desire for a broader
product line take on additional lines for international distribution;
commonly called piggybacking.
31
Questions
1. To what extent, and in what ways, do the functions of domestic
middlemen differ from those of their foreign counterparts?
2. Why is the EMC sometimes called an independent export department?
3. Explain how and why distribution channels are affected, as they are
when the stage of development of an economy improves.
4. In which circumstances are trading companies likely to be used?
5. How is distribution-channel structure affected by increasing emphasis
on the government as a customer and by the existence of state trading
agencies?
6. Review the key variables that affect the marketer’s choice of
distribution channels.
7. Account, as best you can, for the differences in channel patterns that
might be encountered in a highly developed country and an
underdeveloped country.
8. Discuss the various methods of overcoming blocked channels.
Cases
a) Continued Growth for Zara and Inditex.
b) Hewlett-Packard’s Global Account Managemen.
Tests
1. General Electric has been distributing merchandise from other

suppliers for many years, engaging this way in:
A) partnership marketing.
B) side transaction marketing.
C) relationship marketing.
D) complementary marketing.
E) none of the above.
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CHAPTER 9
International marketing communications and
International advertising
1. Sales promotions in International markets

2. International Public Relations
3. International Advertising
a) Advertising strategy and goals
b) Product attribute and benefit segmentation
4. The message: creative challenges
5. Media planning and analysis
6. International control of advertising: broader issues
References
Hill, - 2008. - Р. 515-573.
Integrated marketing communications - the collective arrangement of
efforts and methods to sell a product or service, including advertising,
sales promotions, trade shows, personal selling, direct selling, and public
relations.
Sales promotions - marketing activities that stimulate consumer purchases
and improve retailer or middlemen effectiveness and cooperation.
Public relations (PR) - the effort made by companies to create positive
relationships with the popular press and general media and to
communicate messages to their publics, including customers, the general
public, and government regulators.
33
Questions
1. Outline some of the major problems confronting an international
advertiser.
2. Defend either side of the proposition that advertising can be
standardized.
3. How can advertisers overcome the problems of low literacy in their
markets?
4. What special media problems confront the international advertiser?
5. What is sales promotion and how is it used in international marketing?
6. Show how the communications process can help an international
marketer avoid problems in international advertising.
7. Take each of the steps of the communications process and give an
example of how cultural differences can affect the final message
perceived.
8. Discuss the problems created because the communications process is
initiated in one cultural context and ends in another.
Cases
a) United Colors of Benetton.
b) Morgan Motor Company: can the British retro sports car brand still
be successful after 100 years?
Tests
1. Which of the following terms is considered to be the general catch-

all term used when advertising, sales promotion, trade shows, personal
selling, direct selling, and public relations are brought together to
unify an organization's promotion effort?
A) global promotion
B) communication promotion
C) nonpersonal communication
D) integrated marketing communication
E) synergistic promotion
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CHAPTER 10
Pricing for international markets
1. Pricing policy
a) Pricing objectives
b) Parallel imports
2. Approaches to international pricing
a) Full-cost versus Variable-cost pricing
b) Skimming versus Penetration pricing
3. Price escalation
4. Approaches to reducing price escalation
5. Leasing in International markets
6. Countertrade as a pricing tool
7. Administered pricing
References
Hill, - 2008. - Р. 459-487.
Parallel market - occurs whenever price differences are greater than the
cost of transportation between two markets..
Exclusive distribution - a practice in which a company restricts which
retailers can carry its product; often used by companies to maintain high
retail margins, to maintain the exclusive-quality image of a product, and to
encourage retailers to provide extra service to customers.
Variable-cost pricing - a method of pricing goods in foreign markets in
which a company is concerned only with the marginal or incremental costs
35
of producing goods for sale in those markets. Firms using variable-cost
pricing take the view that foreign sales are bonus sales.
Full-cost pricing - a method of pricing goods based on the view that no
unit of a similar product is different from any other unit of a similar
product and that each unit must bear its full share of the total fixed and
variable cost, whether sold in the home market or abroad.
Skimming - a method of pricing, generally used for foreign markets, in
which a company seeks to reach a segment of the market that is relatively
price insensitive and thus willing to pay a premium price for the value
received; may be used to sell a new or innovative product to maximize
profits until a competitor forces a lower price.
Penetration pricing policy - a low price policy directed at gaining market
share from competitors.
Countertrade - a type of transaction in which goods are imported and sold
by a company from a country in exchange for the right or ability to
manufacture and/or sell goods in that country. Countertrade can substitute
for cash entirely or partially and is used extensively in trade between U.S.
firms and the former Soviet bloc, along with other emerging markets.
Questions
1. Discuss the causes of and solutions for parallel imports and their effect
on price.
2. Why is it so difficult to control consumer prices when selling overseas?
3. Why is it seldom feasible for a company to absorb the high cost of
international transportation and reduce the net price received?
4. Price escalation is a major pricing problem for the international
marketer. How can this problem be counteracted?
5. Discuss the different pricing problems that result from inflation
(deflation).
6. Discuss the alternative objectives possible in setting prices for
intracompany sales.
7. Why are costs so difficult to assess in marketing internationally?
8. Discuss the major problems facing a company that is countertrading.
36666
Cases
a) Gillette Co.: is price standardization possible for razor blades?
b) Texas Instruments: Global Pricing in the Semiconductor Industry
Tests
1. When importers buy products from distributors in one country and

sell them in another to distributors who are not part of the
manufacturer's regular distribution system, _______________ has
occurred.
A) indirect marketing
B) parallel importing
C) black marketing
D) multi-channel exporting
E) multi-channel importing
2. Which of the following pricing strategies is known to stimulate

market growth and capture market share by deliberately offering
products at low prices?
A) skimming pricing
B) penetration pricing
C) demand-based pricing
D) predatory pricing
E) competition-based pricing
37
Підписано до друку 11.05.2016. Формат 60 х 84/16. Папір
офсет. №1.
Гарнітура Times New Roman. Друк офсет. Умов. друк. арк. 3,7.
Малий видавничий центр економічного факультету
Львівського національного університету імені Івана
Франка
79008 Львів, просп. Свободи,
38666
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Internatioanl marketing - методичка готова

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Ministry of Education and Science of Ukraine

Ivan Franko National University of Lviv

1. The importance of history and geography in understanding

1. Why study geography in international marketing?

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2. Why is the marketing of industrial products and services a natural

1. General Electric has been distributing merchandise from other

1. Sales promotions in International markets

1. Which of the following terms is considered to be the general catch-

1. When importers buy products from distributors in one country and

2. Which of the following pricing strategies is known to stimulate

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