ADL 81 International Marketing V2

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ADL 81 International Marketing V2

Assignment – A
Question 1. What do you understand by the term globalization? What are the
factors behind the globalization of the automobile Industry?
Question 2. What is culture? What are the different components of culture?
Explain why culture of a country might influence the cost of doing business in
that country. Illustrate your answer with suitable examples.
Question 3. Critically evaluate the various alternatives available to an
organization to enter the foreign market. Give suitable examples to support your
Question 4. What is PEST analysis? How is it used to evaluate the attractiveness
of a foreign market? Explain with the help of relevant examples.
Question 5. Write short notes on :
(a) Dumping
(b) Role of WTO in promoting international trade
(c) EPRG Framework
(d) International, Global, Multinational and Transnational Corporations
(e) Difference between International and domestic Marketing
Assignment – B
Question 1. By 2020 we will see emergence of enormous global markets for
standardize consumer products. Do you agree with this statement? Justify your
Question 2. (a)Explain different types of pricing strategies used in
international marketing.
(b)What is counter trade. Explain different types of counter trade
Question 3. Write short notes on :
(a) International Product Life Cycle
(b) Channel selection for Overseas market
(c) Role and importance of internet in International marketing
(d) Letter of Credit
(e) Segmentation for International Marketing
Case Study
McDonald’s and Hindu culture
In many ways, McDonald’s Corporation has written the book on global expansion.
Every day, on an average, somewhere around the world 4.2 new McDonald’s
restaurants are opened. By, 2003, the company had 30,000 restaurants in 121
countries that collectively served 46 million customers each day.
One of the latest additions to McDonald’s list of countries entered by famous
golden arches had been India, where McDonald’s started to establish restaurants
in the late 1990s. Although India is a poor nation, the large and relatively
prosperous middle class, estimated to number 150 to 200 million, attracted
McDonald’s. India, however, offered McDonald’s unique challenges. For thousand
of years, India’s Hindu culture has revered cows. Hindu scriptures state that
cow is a gift of the god to the human race. The cow represents the Divine mother
that sustains all human beings. Cows gives birth to bulls that are harnessed to
pull the ploughs, cows milk is highly valued and used to produce yogurt and ghee
(a form of butter), cow urine has a unique place in traditional Hindu medicine
and cow dung is used as fuel. Some 300 million of these animals roam India
untethered, revered as scared providers. They are everywhere, ambling around
roads, grazing in rubbish dumps and resting in temples – everywhere, that is
except on your plate, for Hindus do not eat meat of scared cow.
McDonald’s is the world’s largest user of beef. Since its founding in 1955,
countless animals have died to produce Big Macs. How can a company whose
fortunes are built on beef enter a country where consumption of beef is grave
sin? Use pork instead? But there are around 140 million Muslims in India and
Muslims don’t eat pork. This leaves chicken and mutton. McDonald’s responded to
this cultural dilemma by creating its Indian version of its Big Mac – the
Maharaja Mac – which is made from mutton. Other additions to the menu conform to
local sensibilities such as the McAloo Tikki Burger. All foods are strictly
segregated into vegetarian and nonvegetarian lines to conform with the
preferences in a country where many Hindus are vegetarian. According to the head
of the McDonald’s Indian operations, “We had to reinvent ourselves for the
Indian palate.
For a while, this seemed to work. Then in 2001 McDonalds’s was blindsided by a
class action lawsuit brought against in United State by three Indian Businessmen
living in Seattle. The businessmen, all vegetarians and two of whom Hindus ,
sued McDonald’s for ‘fraudulently concealing’ the existence of beef in
McDonald’s French Fries! McDonald’s has said it used ony 100 percent vegetable
oil to make Frennch Fries, but the company soon admitted that is used a
“miniscule” amount of beef extract in the oil. McDonald’s settled the suit for
$10 million and issued an apology, which read, “McDonald’s sincerely apologise
to Hindus, vegetarians, and others for failing to provide the kind of
information they needed to make informed dietary decisions at our U.S.
restaurant”. Going forward, the company pledged to do a better job of labeling
the ingredients of its food and to find a substitute for the beef extract used
in its oil.
However, news travel fast in the global society of the 21st century, and the
revelation that McDonald’s used beef extract in its oil was enough to bring
hindu nationalists onto the streets in Delhi, where they vandalized one of the
McDonald’s restaurant causing $45,000 of damage; shouted slogans outside of
another; picketed the company’s headquarters; and called on India’s prime
Minister to close McDonald’s 27 stores in the country. McDonald’s Indian
franchise holders quickly issued denials that they used oil that contained beef
extract, and Hindu extremists responded by stating they would submit McDonald’s
oil to laboratory tests to see if they could detect the beef extract.
The negative publicity seemed to have little impact on McDonald’s long-term
plans in India, however. The company continued to open restaurants, and by 2003
had 38 in the country and announced plans to open another 80 by 2005. When asked
why they frequently McDonald’s restaurants, Indian customers noted that their
children enjoyed the “American” experience, the food was of consistent quality,
and the toilets were always clean!
Question 1. Why is it essential for MNC to have a thorough understanding of the
culture of the host country? What implications it can have on its long term
business plans?
Question 2. What strategies McDonald’s adopted to respond to the taste and
preferences of the Indian consumers?
Question 3. Should a MNC go in for localizing its products to account for
cultural differences? If yes, don’t you think that it might lose an advantage by
doing so?
Assignment – C
1. A strong orientation toward the home country is an indication of
(a) ethnocentricity
(b) polycentricity
(c) geocentricity
2. According to Adam Smith’s Theory of absolute advantage, a country should.
…. a commodity that can be produced at a lower cost than can other nations.
(a) export
(b) import
(c) both export and import d) neither export nor import
3. The evidence that the United States exports constitutes of labor-intensive
goods and imports comprises of capital-intensive goods is known as
(a) principle of absolute advantage
(b) principle of relative advantage
(c) Leontief Paradox
(d) factor endowment
4. This export strategy involves selling a product from a home base, usually
without any product modification.
(a) exporting
(b) licensing
(c) joint venture
(d) manufacturing
5. This entry strategy involves granting permits to a foreign company to use
industry property, technical knowhow, or engineering design in a foreign market.

(a) exporting
(b) licensing
(c) joint venture
(d) manufacturing
6. ICICI and Prudential joined together to market Insurance products in India.
This strategy is
(a) exporting
(b) licensing
(c) joint venture
(d) assembly operations
7. Indian firms were asked to build the biggest oil refinery in the world in
Egypt and to train local personnel. This is known as
(a) licensing
(b) manufacturing
(c) joint venture
(d) turnkey
8. Which of the following product is most likely to require adaptation for
overseas markets.
(a) musical recordings
(b) films
(c) automobiles
(d) watches
9 Which of the following cannot be used as a trademark?
(a) a word
(b) a name
(c) a symbol
(d) a device
(e) all of them can be used as a trademark
10. Which marketing component is most likely to be standardized.
(a) brand
(b) advertising
(c) price
(d) distribution
11. The promotion mix does not include
(a) advertising
(b) personal selling
(c) pricing
(d) publicity
12. This term of payment is the one most desired by importers.
(a) bill of exchange
(b) letter of credit
(c) open account
(d) cash in advance
13. This method of payment presents the least risk to an exporter.
(a) sight draft
(b) time draft
(c) open account
(d) letter of credit
14. This financial instrument is a document, issued by a bank at a buyer’s
request in favor of a seller, promising that the bank will pay an agreed amount
of money upon its receipt of certain documents.
(a) sight draft
(b) time draft
(c) bill of exchange
(d) letter of credit
15. Import duty to offset a subsidy is
(a) protective tariff
(b) revenue tariff
(c) tariff surcharge
(d) countervailing duty
(e) variable duties
16. This is not a form of subsidy.
(a) cash
(b) interest rate
(c) tax
(d) freight and infrastructure
(e) all of them are subsidies
17. This international organization wants to achieve a broad, multilateral, and
free worldwide system of trading.
(a) WTO
(b) GSP
(d) MFN
18. According to the international product life cycle theory, a country that
developed an innovation will eventually become
(a) a net importer
(b) a net exporter
(c) an absolute exporter
(d) a relative producer
(e) a monopolist
19. Innovations are most likely to be first introduced in
(a) least developed countries
(b) less developed countries
(c) growing economies
(d) highly developed countries
20. Which of the following is not a brand’s function?
(a) creating identification
(b) guaranteeing quality level
(c) helping with promotion
(d) lowering production cost
21. The most important packaging criterion is
(a) promotional
(b) functional
(c) attractive
(d) versatile
22. “Noise” does not affect this stage of the communication process.
(a) sender
(b) encoding
(c) decoding
(d) receiver
(e) all of them can be affected
23. Which of the following is not an example of indirect export?
(a) Export house in home country
(b) Cooperatives marketing organizations in home country
(c) State trading Corporations in home country
(d) Agent in overseas market
24. Which of the following is not an example of Countertrade Arrangement?
(a) Barter Trade
(b) Compensation Arrangement
(c) Buy Back Arrangement
(d) Counterfeiting
25. Trade in services is covered under which agreement?
(a) GATS
(b) GATT
26. EXIM Bank of India provide following services to the Indian Exporter?
(a) Export financing
(b) Advisory Services for Export
(c) Sector and Market specific Research for export
(d) Export Agent
27. ECGC helps exporters by providing
(a) insurance protection against payment risks.
(b) information on different countries with its own credit ratings.
(c) information on credit-worthiness of overseas buyers
(d) extending line of credit to overseas entities
28. Which of the following is not an export incentive given by Government of
India as per the provisions in the FTP 2004-2009?
(a) DEPB
(b) Duty Drawback
(c) Advance License
(d) Direct Export Subsidies
29. Which of the following is not an export promotion measure in the FTP
(a) Towns of Export Excellence
(b) Served from India
(c) Working Capital Management for Export
(d) Focus Market Scheme
30. This is not a characteristic of “centrally planned economies.”
(a) a communist philosophy
(b) an active government role in economic planning
(c) bureaucratic political/economic systems
(d) market-oriented economy
31. The market-oriented system is also known as
(a) capitalism
(b) socialism
(c) communism
(d) modified communism
32. Which of the following is not a strategic alliance?
(a) mergers
(b) joint ventures
(c) licensing agreements
(d) sole ventures
33. These firms allocate corporate resources without taking into consideration
national frontiers and also make direct investment abroad.
(a) ethnocentric firms
(b) polycentric firms
(c) geocentric firms
34. Trade is a
(a) zero sum game
(b) positive sum game
(c) negative sum game
(d) all of the above
35. The theory of factor endowment focus on which factor of production.
(a) labor
(b) land
(c) capital
(d) all of them are considered
36. China do not have comparative advantage in which factor of production?
(a) labor
(b) land
(c) capital
(d) technology
37. According to the international product life cycle theory, a country that
invented a product will eventually become
(a) a net importer
(b) a net exporter
(c) an absolute exporter
(d) a monopolist
38. The most important factor which makes product modification mandatory is
(a) country’s regulations
(b) electrical current standards
(c) measurement standards
(d) product standards
39. To sell to their subsidiaries in countries with lower corporate tax rates
than that in the United States, American firms should make their transfer prices

(a) low
(b) high
(c) moderate
(d) no change
40. When compared to a trading company, an EMC
(a) has more diverse product lines
(b) is more likely to take ownership to merchandise
(c) offers less services
(d) is larger and better financed
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