Dani this is the 2nd and 3rd assignment on international marketing.

Assignment ll

1. Explain some of the unfair competition forms that takes place in business organization.

*Some of the most common forms of unfair competition include:

*Bait-and-switch selling technique, such as substituting a lower-cost product from a different brand for a
more expensive, higher-quality product.

*False advertising or making false claims about a product to promote it.

*Misappropriation or use of confidential information, such as stealing a competitor's special formulation

or other trade secrets.

*Trade dress violation, or copying the physical appearance of a product and/or packaging in the attempt
to fool a customer into buying it.

*Trademark infringement.

*Breach of a restrictive covenant, such as a non-compete clause.

*False representation of services or products, such as exaggerating the capabilities of a product.

*Reverse passing off, or misrepresenting the source of a product by failing to inform the public who
created it.

This often happens when a company removes the mark from a product and then sells it.

*Unauthorized substitution of one brand of goods or products for another.

*Trade libel/slander or rumormongering, such as written or verbal communications that would ruin or
harm a company's reputation in the industry.

In order to qualify as trade libel /slander, the false communication must decrease the confidence,
respect, or regard in which your business or product is held. Trade defamation is typically a civil matter,
although in serious cases, it can become a criminal matter.

*Imitation or counterfeiting.

*Below-cost selling.

https://www.upcounsel.com/unfair-competition

2. Explain how the culture is society affect the international marketing activity of business
organization.

Culture refers to the influence of religious, family, educational, and social systems on people, how they
live their lives, and the choices they make. Marketing always exists in an environment shaped by culture.
Organizations that intend to market products in different countries must be sensitive to the cultural
factors at work in their target markets. Even cultural differences between different countries–or
between different regions in the same country–seem small, marketers who ignore them risk failure in
implementing their programs.

Several dimensions of culture that require particular attention from global marketers are listed below.

Language

There are nearly three thousand languages in the world. Language differences can be a challenge for
marketers designing IMC campaigns, product labels, brand and product names, tag lines, and so on.
Finding a single brand name that works universally in terms of pronunciation, meaning, and “ownability”
is a monumental challenge. Of course, correct and grammatical use of language in marketing
communication is essential for a product, brand, or company to be viewed as credible, trustworthy, and
of high-quality.

Customs and Taboos

All cultures have their own unique sets of customs and taboos. It is important for marketers to learn
about these customs and taboos so that they will know what is acceptable and unacceptable for their
marketing programs. Marketers should seek guidance from native experts familiar with local culture and
customers. Marketing research can also help marketers understand and navigate these complex issues.

Values

The role of values in society is to dictate what is acceptable or unacceptable. Values are part of the
societal fabric of a culture, and they can also be expressed individually, arising from the influence of
family, education, moral, and religious beliefs. Values are also learned through experiences. Not
surprisingly, values can influence consumer perceptions and purchasing behavior.

Time and Punctuality

Different cultures have different sensitivities around time and punctuality. In some countries, being
slightly late to a meeting is acceptable, whereas in other countries it is very insulting. For cultures that
highly value punctuality, being on time is a sign of good planning, organization, and respect. In cultures
where precise punctuality is less important, there is often a greater emphasis on relationships. The fact
that a meeting happens is more important than when it happens.

Business Norms

Business norms vary from one country to the next and may present challenges to foreigners not used to
operating according to the particular norms of the host country. Always seek guidance from a trusted
colleague or friend who has experience in the local customs and can offer coaching on proper etiquette.

Religious Beliefs and Celebrations

Religious beliefs and practice can strongly influence what consumers buy (or don’t buy), when they
shop, and how they conduct business. It is important for marketers to understand the influence of
religion on consumer culture in the markets where they operate, so that their marketing activities can
be appropriately sensitive. Failing to respect religious beliefs or cultures can seriously undermine the
reputation of a company or brand. At the same time, marketers who are attuned to the impact of
religion on local culture can find great advantage in aligning marketing messages and promotional
opportunities to religious practice.

https://courses.lumenlearning.com/marketing-spring2016/chapter/reading-cultural-factors-shaping-
the-global-marketing-environment/

3. From the trade theory, explain a) the principle of absolute advantage. b)the principle of
comparative advantage. c)the factor's endowment theory.

a) the principle of absolute advantage.

the principle of absolute advantage refers to the ability of a party (an individual, a firm, or a country) to
produce more of a good or service than competitors while using the same amount of resources. Since
absolute advantage is determined by a simple comparison of labor productivities, it is possible for a
party to have no absolute advantage in anything; in that case, according to the theory of absolute
advantage, no trade will occur with the other party. It can be contrasted with the concept of
comparative advantage, which refers to the ability to produce a particular good at a lower opportunity
cost.

b) the principle of comparative advantage.

comparative advantage refers to the ability of a person or nation to produce a good or service at a lower
opportunity cost than another person (or nation). This is why trade can create value for both parties—
because each person can concentrate on the activity for which they have the lower opportunity cost. a
country has a comparative advantage when a good can be produced at a lower cost in terms of other
goods. The question each country or company should be asking when it trades is this: “What do we give
up to produce this good?”

c) the factor's endowment theory.

A factor endowment is commonly understood to be the amount of land , labor, capital , and
entrepreneurship that a country possesses and can exploit for manufacturing . Countries with a large
endowment of resources tend to be more prosperous than those with a small endowment if all other
things are equal. The development of sound institutions to access and equitably distribute these
resources, however, is necessary in order for a country to obtain the greatest benefit from its factor
endowment.

https://courses.lumenlearning.com/suny-internationalbusiness/chapter/reading-absolute-advantage/

https://opentextbc.ca/principlesofeconomics/chapter/33-1-absolute-and-comparative-advantage/

https://fs.blog/2009/08/should-tiger-woods-mow-his-own-lawn-the-principles-of-comparative-
advantage/

https://en.m.wikipedia.org/wiki/Factor_endowment
 4. To protect local industries, the government will take trade barriers. Explain a)tariff barrier,
b)non-tariff barriers.
a) tariff barrier,

When goods are traded between countries, there is typically a fee charged for a good entering a
different territory. These fees serve two functions: first, they provide governments with a (relatively
small) amount of income; and second they make foreign goods more expensive – as the cost of a foreign
good includes the tariff – helping domestic producers to compete with foreign goods.

Although this might seem like a good thing to do from a domestic perspective, charging tariffs most
often causes reciprocal action against domestic goods entering foreign markets, making it more difficult
for domestic producers to sell abroad.

Because of this, tariffs are generally seen as a barrier to trade, as they increase the price of goods for
everyone, which makes them less attractive to consumers and reduces the volume of trade.

https://ukandeu.ac.uk/fact-figures/what-are-tariff-barriers

b) non-tariff barriers.

A nontariff barrier is a trade restriction, such as a quota, embargo or sanction, that countries use to
further their political and economic goals. Countries commonly use nontariff barriers in international
trade. Nontariff barriers have a common basis on the availability of goods and services and political
alliances with trading countries.

Nontariff barriers often release countries from paying added tax on imported goods and create other
barriers that have a meaningful yet different monetary impact. Countries can use nontariff barriers in
place of, or in conjunction with, standard tariff barriers.

https://www.investopedia.com/terms/n/nontariff-barrier.asp

5. Explain the classification of tariff.

Classification of Tariff:

Direction: Import and Export

Tariff are often imposed on the basis of the direction of product movement ,that is ,on imports or
exports, with the latter being the less common one. When export Tariff are levied, they usually apply to
an exporting country’s scarce resources or raw materials (rather than finished manufactured materials.)

Purpose: Protective and Revenue

The purpose of protective Tariff is to protect home industry, agriculture, and labor against foreign
competitors by trying to keep foreign goods out of country. The purpose of revenue tariff, in contrast is
to generate tax revenues for the Government. Compared to a protective tariff, a revenue tariff is
relatively low.
Length: Tariff surcharge and countervailing duties

Protective Tariff: can be further classified according to length of time. A tariff surcharge is a temporary
action, whereas a countervailing duty is a permanent surcharge.

Countervailing duty: is charged on certain imports when foreign Governments subsidize products. These
duties are thus assessed to offset a special advantage or discount allowed by an exporter Government.
Usually, a government provides an export subsidy by rebating certain taxes of goods are exported.

Import Restraints: Special duties and Variable duties

Protective tariff can also be classified as either import charges or import restraint. These tariffs include
special duties and variable levies, which are imposed in addition to import tariff. Special duties are extra
duties for certain items. The purpose is to make it difficult to import and to sell those products. Variable
duties means different rates for different product categories, depending on how much the products
have been processed and how much more processing they will undergo. Variable duties can also be
used for exports as well, except that in this case rates are reversed. That is, a country may encourage
imports of raw materials or resources by taxing them less than finished or value added products.

Rates: - Specific, Advalorem, and Combined

Specific duties: are a fixed or specified amount of money per unit of weight gauge, or other measure of
quantity based on a standard physical unit of a product. They are a specific rates of so many dollars or
cents for a given unit of measure. E.g., $1/gallon, $0.25 /square yard, $2/ton etc.

Advalorem duties: are duties according to value. They are stated as fixed percentage of the invoice value
and are applied as a percentage to the duty able value of the imported goods. Compound rates or
Compound duty: are a combination of the specific and Advalorem duties on a single product. They are
duties based on both the specific rate and advalorem rate that are applied to an imported product.

Distribution Point:-Distribution and Consumption taxes

Single stage sales tax: is a tax collected only at one point in the manufacturing and distribution chain.
This tax is perhaps most common in the united states, where retailers and wholesalers make purchases
without paying any taxes simply by showing a sales tax permit. The single stage sales tax is not collected
until products are purchased by final consumers.

A value added tax (VAT) is a multi-stage, non-cumulative tax on consumption. It is a national sales tax
levied at each stage of the production and distribution system through only on the value added at that
stage. E.g.:- A manufacturer initially pay tax of raw materials worth $100.By transforming this raw
material in to finished products, the manufacturer adds another $50 to the product value. If the product
is then sold to a wholesaler, the wholesaler pays tax on the $50 (i.e. the value added) and not on the
total value of $150.Mostly used in Europe, Korea in hotels, tourist facilities, and major restaurants as a
standard rate of 10%. Cascade Taxes: are collected at each point in the manufacturing and distribution
chain and are levied on the total value of the product, including tax borne by the producer at the earlier
1. Explain the different strategies the government use as financial regulation to restrict international
trade.

2. Explain the different forms of economic cooperation made within countries to improve trade.

3. Explain the black box model of consumers behaviour.

4. Explain what social is and its different forms used in the marketing strategy.

5. Explain what cultural anthropology is.

Both assignments should be submitted separately. Submission date Ginbot 27, 2012 E.C.