COLLEGE OF COMMERCE

BS IN BUSINESS ADMINISTRATION

BA 412: INTERNATIONAL BUSINESS AND TRADE

Dear Augustinian Students,

Welcome the BA 412 – INTERNATIONAL BUSINESS & TRADE….Today marks

the beginning of the 1st Semester of the School year 2021 – 2022… Another year of
challenge in the trying times of Pandemic…. However, with the help of Technology,
Global Marketing is possible.

In this course, there will be a 60–90 minute online chat session which will be
held twice a week of either odd or even schedule.

As we embrace the new normal way of life. This gives you students a much
greater time to learn at your own pace at the convenience of your homes or any
other space at your comfort, provided you will be responsible enough to be time
bound as to the readiness for engagement in scheduled Teaching Learning
Activities.

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Course Description:

This course focuses on marketing strategy and management within the context of
global an international markets. It evaluates cultural differences and aims to enhance your
skills in developing and implementing marketing strategies and decision making in
international context. This course was developed to provide international business
students with an opportunity to study interesting aspects of the international business
environment and to improve their capacity to assess and solve international business
problems. Through discussion, research and practical activity students will develop the
ability to prepare marketing programs that effectively reduce risk and take advantage of
opportunities in the
marketplaces of the world.

Course Credit: 3 units

Prerequisites: Principles of Marketing
Course Duration: Nine (9) Weeks
Course Outcomes: At the end of the course, students will be able:

a. Understand the global marketing environment.

b. Synthesize and apply universal marketing concepts, principles, and processes
honed through written analysis of selected cases, as well as through the design and
composition of a strategic Business Plan for a selected product or service for
international marketing.
c. To develop and design global Participation and marketing strategies

PROFESSOR: SHIANNY JEN C. GAYANILO, MBA

Email address: [email protected]
Messages: FB class group chat; LMS class account
LMS:Google Classroom Other portal: Zoom

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MODULE 1 PACKET
BA 412: INTERNATIONAL BUSINESS AND TRADE

MODULE 1 OVERVIEW:

Welcome to Module 1 – Globalization and International Business

In this module, we will discuss the introduction and overview of global marketing.
We will be discussing the importance of global marketing and why we need to study
international and global marketing activities.

Over the last two centuries trade has grown remarkably, completely transforming
the global economy. Today about one fourth of total global production is exported.
Understanding this transformative process is important because trade has generated
gains, but it has also had important distributional consequences.

Over the past two decades, we have witnessed

the globalization of markets and production.
2. The globalization of markets implies that
national markets are merging into one huge
marketplace. However, it is important not to
push this view too far.
3. The globalization of production implies that
firms are basing individual productive activities
at the
optimal world locations for the particular
activities. As a consequence, it is increasingly
irrelevant
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to talk about American products, Japanese

products, or German products, since these are
being
replaced by "global" products.
Over the past two decades, we have witnessed
the globalization of markets and production.
2. The globalization of markets implies that
national markets are merging into one huge
marketplace. However, it is important not to
push this view too far.
3. The globalization of production implies that
firms are basing individual productive activities
at the
optimal world locations for the particular
activities. As a consequence, it is increasingly
irrelevant
to talk about American products, Japanese
products, or German products, since these are
being
replaced by "global" products.
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Over the past two decades, we have witnessed

the globalization of markets and production.
2. The globalization of markets implies that
national markets are merging into one huge
marketplace. However, it is important not to
push this view too far.
3. The globalization of production implies that
firms are basing individual productive activities
at the
optimal world locations for the particular
activities. As a consequence, it is increasingly
irrelevant
to talk about American products, Japanese
products, or German products, since these are
being
replaced by "global" products.
At the end of this module, you are going to submit output specifying how you apply
the lessons you learned from this module in reality as a global marketing most especially in
the current global scenario.

CONSULTATION HOURS:
Phone or Messenger: 3 – 5:00 PM Wednesdays
Virtual time: 11:00 – 12:00 Monday, Tuesday, Thursday & Friday

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MODULE 1 LEARNING OBJECTIVES:

By the end of this module, the students will be able to:
1. To define globalization and international business and show how they affect each other
2. To understand why companies engage in international business and why international
business growth has accelerated
3. To discuss globalization’s future and the major criticisms of globalization
4. To become familiar with different ways in which a company can accomplish its global
objectives
5. To apply social science disciplines to understanding the differences between
international and domestic business
6.

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COURSE CONTENT FOR MODULE1: Introduction to Global Marketing

ACTIVITY DESCRIPTION TIME TO
COMPLETE
Introduce and Familiarized one another,
Introduction 30 minutes
Discuss House Rules and set expectation
Define globalization and international
Lecture discussion 15 minutes
business

Why companies engage in international

Lecture discussion business and why international business 30 minutes
growth has accelerated
Review Quick review 10 minutes
Globalization’s future and the major criticisms
Lecture discussion of globalization. 30 minutes

Activity Giving instructions for the activity 15 minutes

Social science disciplines to understanding
Lecture discussion the differences between international and 30 minutes
domestic business
Quiz Summative quiz for module 1 20 minutes

LECTURE DISCUSSIONS
Module I - Globalization and International Business
1.1 Globalization is the ongoing process that deepens and broadens the relationships
and interdependence among countries. International Business is a mechanism to bring
about globalization.

International business refers to the trade of goods, services, technology, capital and/or
knowledge across national borders and at a global or transnational scale. It involves cross-
border transactions of goods and services between two or more countries. ... International
business is also known as globalization.

International Marketing is defined as 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.

Difference Between Global & International Marketing

International marketing involves the marketing tactics adopted by knowledgeable

marketers in different countries specific to the markets of those countries. Global

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marketing, on the other hand is a marketing concept which involves the marketing efforts
put in for the unique worldwide market.

"International" has a smaller scope encompassing only two or more countries while

"global" has a much larger scope which includes the whole world. ... Although they are
sometimes used interchangeably, "global" means "all-encompassing and worldwide"
while "international" means "foreign or multinational."

The importance of Global Markets

Global markets are expanding rapidly. The combine value of merchandise exports
has exceeded $15 trillion annually. In addition, exports of commercial services has
account for more than $3 trillion. For many years, international trade has grown faster than
domestic economies, further contributing to the ever increasing pace of globalization.

International business - consists of all commercial transactions—including sales,

investments, and transportation—that take place between two or more countries
Increasingly foreign countries are a source of both production and sales for domestic
companies

Importance of International Marketing

1. Important to expand target market – Target market of a marketing organisation will be
limited if it just concentrate on domestic market. When an organisation thinks globally, it
looks for overseas opportunities to increase its market share and customer base.

2. Important to boost brand reputation – International marketing may give boost to a

brand’s reputation. Brand that sold internationally is perceived to be better than the brand

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that sold locally. People like to purchase products that are widely available. Hence,
international marketing is important to boost brand reputation.

3. Important to connect business with the world – Expanding business into an

international market gives a business an advantage to connect with new customers and
new business partners. Apple - the tech giant designs its iPhone in California; outsources
its manufacturing jobs to different countries like - Mongolia, China, Korea, and Taiwan; and
markets them across the world. Apple have not restricted its business to a nation, rather
expanded it to throughout the world. The opportunities for networking internationally are
limitless. The more "places" a business is, the more connections it can make with the
world.

4. Important to open door for future opportunities – International marketing can also

open door for future business opportunities. International marketing not only increases
market share and customer base, it also helps the business to connect to new vendors, a
larger workforce and new technologies and ways of doing business.
(https://www.enotesmba.com/2016/04/importance-of-international-marketing.html)

1.2 Why companies engage in international business

1. To Expand Sales: pursuing international sales increases the potential market and
potential profits
2. To Acquire Resources: may give companies lower costs, new and better products,
additional operating knowledge
3. To Diversify or Reduce Risks: international operations may reduce operating risk by
smoothing sales and profits, preventing competitors from gaining advantage

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Factors Contributing to Rapid Growth of International Business

1. Increase in and expansion of technology
2. Liberalization of cross-border trade and resource movements
3. Development of services that support international business

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4. Growing consumer pressures

5. Increased global competition
6. Changing political situations
7. Expanded cross-national cooperation

Modes of Operation in International Business

• Merchandise exports and imports
• Service exports and imports
 Tourism and Transportation
 Service Performance
 Asset Use
• Investments
 Foreign Direct Investment (FDI)
Portfolio Investment

Multinational Enterprises
Multinational Enterprises (MNEs) take a global approach to markets and production.
Sometimes they are referred to as multinational corporations or companies (MNCs) or
transnational companies (TNCs).
Development of Global Marketing
- The term Global Marketing has been in use only since the 1980’s. Before that
decade, international marketing was the term used most often to describe marketing
activities outside one’s domestic market. Global Marketing is just a new label for an old
phenomenon, however provides a new vision.
 Domestic marketing – Marketing activities aimed at a firms domestic market.
 Export marketing – marketing activities undertaken when a firm sells its products
abroad and when those products are shipped from one country to another.
 International marketing – Marketing activities undertake when a company becomes
significantly involved in local marketing environment in foreign countries.
 Multi-domestic marketing – A company that possesses extensive investment in
assets abroad and operates in a number of foreign countries as thought it were a
local company.
 Pan-regional marketing – A regional strategies encompass a number of markets
such as Pan-European, NAFTA (North American Federal Trade Agreement).
 Global marketing - A global marketing strategy involves the creation of a single
strategy for a product, service, or company for the entire global market nonetheless
incorporates flexibility for local adaptation.

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1.3 Criticisms of Globalization: Growing Income Inequality

 More Losers than Winners

The previous articles in this module covered the topic of globalization in depth. Some of
the points of discussion were about how globalization has succeeded in lifting millions of
people out of poverty. While accepting this fact, it is also the case that globalization has
created income inequality which when coupled with inflation and falling living standards
has resulted in a class of people who are losing out more than gaining from the process of
globalization. If we take each of these factors into consideration, it becomes clear that
globalization leads to worsening income gaps and the transfer of wealth from the bottom to
the top.

 Increase in Social Tensions

Globalization by virtue of being a process that benefits elites and the educated more has
contributed to social tensions where the native populace without the benefit of English
speaking skills or the necessary attributes to partake of the fruits of globalization end up
resenting the success of the class that benefits from globalization. This has resulted in
social tensions wherein those left out of the process of globalization envy those who have
benefited from it and this leads to periods of unrest and fights at the slightest provocation.
Indeed, as one of the experts on globalization.

 Lack of Class Mobility

The ongoing global economic crisis has brought home the fact that youth born into a
certain class are likely to remain in that socio-economic class without hopes of social
mobility or progress. This is because globalization has skewed the game in favor of those
with the required skills and attributes and has restricted the upward movement of people
along the social ladder. Though this is just one reason, the other reason of class
stratification and lack of opportunities are equally pernicious as far as the limitation of
social mobility is concerned. Therefore, it is high time for the elites to address these
problems because ultimately the rising tide should lift all boats and not only those that
belong to the privileged class.
Future of International Business and Globalization
• Further globalization is inevitable.
• International business will grow primarily along regional rather than global lines.
• Forces working against further globalization and international business will slow
down both trends.

1.4 Difference Between International and Domestic Operations

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When operating abroad companies may have to adjust their usual methods of
carrying out business. Foreign conditions often dictate a more suitable method, and the
operating modes used for international business differ from those used on a domestic
level.
Physical and Social Factors Affecting International Business Operations

To operate within a company’s external environment, its managers must have

knowledge of business operations and a working knowledge of social sciences, and how
they affect all functional business fields. It includes

 the political, social, economic and cultural relationships within the international
system
 foreign policy, diplomacy and other modes of interaction between the countries
of the world
 the significance of foreign societies, cultures, and systems of government
 the international movement of people as immigrants, refugees, workers,
students, tourists and investors
 the role of international organizations
 the globalization of the world economy
 foreign languages
 history

Sources:
 John D. Daniels, International Business, 16th Edition, Pearson, 2018
 Kate Gillespie and H. David Hennessey. Global Marketing, 3rd (2013) ed.Singapore,
Cengage Learning
 Vern Terpstra; James Foley; Ravi Sarathy, International Marketing, Naper
Publishing Group; 10th edition (2012)
 (https://www.enotesmba.com/2016/04/importance-of-international-marketing.html)

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MODULE 1, ACTIVITY 1: ACTIVITY OUTPUT

Instructions: In Easy format, please submit your assignment as on or before the start of
the 2nd Module.

0QUESTIONS FOR DISCUSSION

00. How is global marketing as a field related to your future career? How would you
expect to come into contact with global marketing activities?
This question parallels the chapter sections on “Why Study Global Marketing” and “A
Need for Global Mindsets.” Answers are personal but may include:
o A desire to work in international marketing
o Working in domestic marketing but dealing with foreign competitors
o Entering other professions but with an international orientation
00. What do you think are the essential skills of a successful “global marketer”?
Again, this calls for a personal response, but suggestions at this introductory stage
might include:
o A knowledge of and sensitivity to other cultures
o Foreign language knowledge
o An understanding of the global economy as well as national politics and laws
o A good knowledge of your domestic business
o The ability to identify market opportunities internationally
o An understanding of how to manage within a multinational firm
00. Which important skills make up an effective “global mindset”?
A global mindset involves an ability to predict what foreign competitors will do next.
Skills might include being able to think like your competitors: understanding their
background and culture as well as speaking their language; knowing how to integrate
actions among national markets; and synthesizing experiences across national
markets.

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RUBRIC FOR ACTIVITY 1

GRADING RUBRIC FOR WRITTEN ASSIGNMENTS
LEVELS OF ASSESSMENT
BELOW STANDARD – 2 MEETS STANDARD – EXCEEDS STANDARD EXEMPLARY – 5 PTS. SCORE
PTS. 3 PTS. – 4 PTS.
ORGANIZATIO Writing lacks logical Writing is coherent and Writing is coherent and Writing shows high
N organization. It shows logically organized. logically organized with degree of attention to
some coherence but Some points remain transitions used logic and reasoning of
ideas lack unity. Serious misplaced and stray between ideas and points. Unity clearly leads
errors. from the topic. paragraphs to create the reader to the
Transitions evident but coherence. Overall unity conclusion and stirs
not used throughout of ideas is present. thought regarding the
essay. topic.
LEVEL OF Shows some thinking Content indicates Content indicates Content indicates
CONTENT and reasoning but most thinking and reasoning original thinking and synthesis of ideas, in-
ideas are applied with original develops ideas with depth analysis and
underdeveloped and thought on a few ideas. sufficient and firm evidences original
unoriginal. evidence. thought and support for
the topic.
DEVELOPMENT Main points lack detailed Main points are present Main points well Main points well
development. Ideas are with limited detail and developed with quality developed with high
vague with little evidence development. Some supporting details and quality and quantity
of critical thinking. critical thinking is quantity. Critical thinking support. Reveals high
present. is weaved into points degree of critical thinking.
STYLE Mostly in elementary Approaches college Attains college level Shows outstanding style
form with little or no level usage of some style; tone is going beyond usual
variety in sentence variety in sentence appropriate and college level; rhetorical
structure, diction, patterns, diction, and rhetorical devices used devices and tone used
rhetorical devices or rhetorical devices. to enhance content; effectively; creative use
emphasis sentence variety used of sentence structure and
effectively. coordination
FORMAT Fails to follow format and Meets format and Meets format and Meets all formal and
assignment assignment assignment assignment requirements
requirements; incorrect requirements; generally requirements; margins, and evidences attention
margins, spacing and correct margins, spacing, and to detail; all margins,
indentation; neatness of spacing, and indentations are correct; spacing and indentations
essay needs attention. indentations; essay is essay is neat and are correct; essay is neat TOTAL:
neat but may have some correctly assembled. and correctly assembled
assembly errors. with professional look.

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MODULE 2 PACKET
BA 412: INTERNATIONAL BUSINESS AND TRADE

MODULE 2 OVERVIEW:

Welcome to Module 2 – The Global Economy

In the past fifty years the global economy has changed rapidly. Particularly marked has
been the development of world economic integration and standardized products. Coca
Cola, Nissan and Marlboro cigarettes are examples of products which serve nearly every
market. Generally there have been four major changes: capital movements rather than
trade have become the driving force of the global economy, production has become
"uncoupled" from employment, primary products have become "uncoupled" from the
industrial economy and, the world economy is in control - individual nations are not,
despite the large world economic share of the USA and Japan.

You are set for an incredible journey starting from the legacy of mercantilism 1500-1750!
Have fun in the world of marketing!

CONSULTATION HOURS:
Phone or Messenger: 3 – 5:00 PM Wednesdays
Virtual time: 11:00 – 12:00 Monday, Tuesday, Thursday & Friday

MODULE 2 LEARNING OBJECTIVES:

By the end of this module, the students will be able to:
1. Distinguish among the basic theories of world trade: absolute advantage,
comparative advantage, and competitive advantage.
2. Discuss the pros and cons of global outsourcing.
3. List and explain the principal parts of the balance-of-payments statement.
4. Describe how and why exchange rates fluctuate.
5. List and describe the major agencies that promote world trade, as well as those that
promote economic and monetary stability.
6. Describe common trade restrictions and explain their impact on international
marketers.
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7. Compare the four different forms of economic integration.

COURSE CONTENT FOR MODULE 2: The Global Economy
ACTIVITY DESCRIPTION TIME TO
COMPLETE
Lecture discussion International Dependence of Nations 30 minutes
Video Presentation Basic Theories of World Trade 10 minutes
Lecture discussion Global Outsourcing 30 minutes
Activity Instruction Grouping & Giving Instruction for the Activity 20 minutes
Lecture discussion Balance of Payment 30 minutes
Lecture discussion
with Video Exchange Rates 30 minutes
Presentation
Group International Agencies for Promoting
1 ½ hours
Presentation Economic and Monetary Stability
Protectionism and Trade Restrictions and
Lecture discussion 30 mins
Entry Modes to International Marketing
Quiz Summative quiz for module 2 30 minutes

LECTURE DISCUSSIONS

2.1 International Dependence of Nations

Foreign goods are central to the living standards of all nations. Countries vary
widely in their reliance on foreign trade. China became the top exporter while United
States of America becomes the top dependent country in the world.
Thus, both China and USA supports the creation of an average of 11,500 jobs for these.

The Growth of Word Trade(WTO)

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An international organization designed by its founders to supervise and liberalize

international capital trade. The organization officially commenced on January 1, 1995
under the Marrakesh Agreement, replacing the General Agreement on Tariffs and Trade
(GATT), which commenced in 1947. The World Trade Organization deals with regulation of
trade between participating countries; it provides a framework for negotiating and
formalizing trade agreements, and a dispute resolution process aimed at enforcing
participants' adherence to WTO agreements which are signed by representatives of
member governments and ratified by their parliaments.
The WTO has 153 members representing more than 95% of total world trade and 30
observers, most seeking membership. The WTO is governed by a ministerial conference,
meeting every two years; a general council, which implements the conference's policy
decisions and is responsible for day-to-day administration; and a director-general, who is
appointed by the ministerial conference. The WTO's headquarters is at the Centre William
Rappard, Geneva, Switzerland.

History of WTO

ITO and GATT 1947

The WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), was
established after World War II in the wake of other new multilateral institutions dedicated to
international economic cooperation - notably the Bretton Woods institutions known as the
World Bank and the International Monetary Fund. A comparable international institution for
trade, named the International Trade Organization was successfully negotiated.
(https://www.wto.org/)

The On GATT to WTO agreements fall into a structure with six main parts:
 The Agreement Establishing the WTO
 Goods and investment — the Multilateral Agreements on Trade in Goods including
the GATT 1994 and the Trade Related Investment Measures
 Services — the General Agreement on Trade in Services
 Intellectual property — the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS)
 Dispute settlement (DSU)
 Reviews of governments' trade policies

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FUNCTIONS OF THE WTO

Among the various functions of the WTO, these are regarded by analysts as the most
important:
 It oversees the implementation, administration and operation of the covered
agreements.
 It provides a forum for negotiations and for settling disputes. (issue in export and
import)

Principles of the trading system

The WTO establishes a framework for trade policies; it does not define or specify
outcomes. That is, it is concerned with setting the rules of the trade policy games. Five
principles are of particular importance in understanding both the pre-1994 GATT and the
WTO:

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Principle One: Creating Opportunities for Economically Disadvantaged Producers

Poverty reduction through trade forms a key part of the organization’s aims. The
organization supports marginalized small producers, whether these are independent family
businesses, or grouped in associations or co-operatives. It seeks to enable them to move
from income insecurity and poverty to economic self-sufficiency and ownership. The
organization has a plan of action to carry this out.
Principle Two: Transparency and Accountability
The organization is transparent in its management and commercial relations. It is
accountable to all its stakeholders and respects the sensitivity and confidentiality of
commercial information supplied. The organization finds appropriate, participatory ways to
involve employees, members and producers in its decision-making processes. It ensures
that relevant information is provided to all its trading partners. The communication
channels are good and open at all levels of the supply chain.

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Principle Three: Fair Trading Practices

The organization trades with concern for the social, economic and environmental well-
being of marginalized small producers and does not maximize profit at their expense. It is
responsible and professional in meeting its commitments in a timely manner. Suppliers
respect contracts and deliver products on time and to the desired quality and
specifications.
Fair Trade buyers, recognizing the financial disadvantages producers and suppliers face,
ensure orders are paid on receipt of documents and according to the attached guidelines.
For Handicraft FT products, an interest free pre-payment of at least 50 % is made on
request. For Food FT products, pre-payment of at least 50% at a reasonable interest is
made if requested. Interest rates that the suppliers pay must not be higher than the buyers’
cost of borrowing from third parties. Charging interest is not required.
Where southern Fair Trade suppliers receive a pre payment from buyers, they ensure that
this payment is passed on to the producers or farmers who make or grow their Fair Trade
products.
Buyers consult with suppliers before canceling or rejecting orders. Where orders are
cancelled through no fault of producers or suppliers, adequate compensation is
guaranteed for work already done. Suppliers and producers consult with buyers if there is
a problem with delivery, and ensure compensation is provided when delivered quantities
and qualities do not match those invoiced.
The organization maintains long term relationships based on solidarity, trust and mutual
respect that contribute to the promotion and growth of Fair Trade. It maintains effective
communication with its trading partners. Parties involved in a trading relationship seek to
increase the volume of the trade between them and the value and diversity of their product
offer as a means of growing Fair Trade for the producers in order to increase their
incomes. The organization works cooperatively with the other Fair Trade Organizations in
country and avoids unfair competition. It avoids duplicating the designs of patterns of other
organizations without permission.
Fair Trade recognizes, promotes and protects the cultural identity and traditional skills of
small producers as reflected in their craft designs, food products and other related
services.
Principle Four:   Payment of a Fair Price
A fair price is one that has been mutually agreed by all through dialogue and participation,
which provides fair pay to the producers and can also be sustained by the market. Where
Fair Trade pricing structures exist, these are used as a minimum. Fair pay means provision
of socially acceptable remuneration (in the local context) considered by producers
themselves to be fair and which takes into account the principle of equal pay for equal

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work by women and men. Fair Trade marketing and importing organizations support
capacity building as required to producers, to enable them to set a fair price.
Principle Five:  Ensuring no Child Labor and Forced Labor
The organization adheres to the UN Convention on the Rights of the Child, and national /
local law on the employment of children. The organization ensures that there is no forced
labor in its workforce and / or members or homeworkers.
Organizations who buy Fair Trade products from producer groups either directly or through
intermediaries ensure that no forced labor is used in production and the producer complies
with the UN Convention on the Rights of the Child, and national / local law on the
employment of children. Any involvement of children in the production of Fair Trade
products (including learning a traditional art or craft) is always disclosed and monitored and
does not adversely affect the children’s well-being, security, educational requirements and
need for play.
Principle Six:  Commitment to Non Discrimination, Gender Equity and Women’s
Economic Empowerment and Freedom of Association
The organization does not discriminate in hiring, remuneration, access to training,
promotion, termination or retirement based on race, caste, national origin, religion,
disability, gender, sexual orientation, union membership, political affiliation, HIV/Aids status
or age.
The organization has a clear policy and plan to promote gender equality that ensures that
women as well as men have the ability to gain access to the resources that they need to
be productive and also the ability to influence the wider policy, regulatory, and institutional
environment that shapes their livelihoods and lives. Organizational constitutions and by-
laws allow for and enable women  to become active members of the organization in their
own right (where it is a membership based organization),  and to take up leadership
positions in the governance structure regardless of women’s status in relation to ownership
of assets such as land and property.  Where women are employed within the organization,
even where it is an informal employment situation, they receive equal pay for equal work. 
The organization recognizes women’s full employment rights and is committed to ensuring
that women receive their full statutory employment benefits. The organization takes into
account the special health and safety needs of pregnant women and breast-feeding
mothers.
The organization respects the right of all employees to form and join trade unions of their
choice and to bargain collectively. Where the right to join trade unions and bargain
collectively are restricted by law and/or political environment, the organization will enable
means of independent and free association and bargaining for employees. The
organization ensures that representatives of employees are not subject to discrimination in
the workplace.
Principle Seven:  Ensuring Good Working Conditions

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The organization provides a safe and healthy working environment for employees and / or
members. It complies, at a minimum, with national and local laws and ILO conventions on
health and safety.
Working hours and conditions for employees and / or members (and any homeworkers)
comply with conditions established by national and local laws and ILO conventions.
Fair Trade Organizations are aware of the health and safety conditions in the producer
groups they buy from. They seek, on an ongoing basis, to raise awareness of health and
safety issues and improve health and safety practices in producer groups.
Principle Eight:  Providing Capacity Building
The organization seeks to increase positive developmental impacts for small, marginalized
producers through Fair Trade.
The organization develops the skills and capabilities of its own employees or members.
Organizations working directly with small producers develop specific activities to help these
producers improve their management skills, production capabilities and access to markets
– local / regional / international / Fair Trade and mainstream as appropriate. Organizations
which buy Fair Trade products through Fair Trade intermediaries in the South assist these
organizations to develop their capacity to support the marginalized producer groups that
they work with.
Principle Nine:  Promoting Fair Trade
The organization raises awareness of the aim of Fair Trade and of the need for greater
justice in world trade through Fair Trade. It advocates for the objectives and activities of
Fair Trade according to the scope of the organization. The organization provides its
customers with information about itself, the products it markets, and the producer
organizations or members that make or harvest the products. Honest advertising and
marketing techniques are always used.
Principle Ten: Respect for the Environment
Organizations which produce Fair Trade products maximize the use of raw materials from
sustainably managed sources in their ranges, buying locally when possible. They use
production technologies that seek to reduce energy consumption and where possible use
renewable energy technologies that minimize greenhouse gas emissions. They seek to
minimize the impact of their waste stream on the environment. Fair Trade agricultural
commodity producers minimize their environmental impacts, by using organic or low
pesticide use production methods wherever possible.(https://www.wto.org/)
2.2 Basic Theories of World Trade
1. Absolute advantage - Trade is based on each country selling what it is best at
producing

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2. Comparative advantage - Trade can occur between two countries even if one of the
countries has no absolute advantage in any product
3. Competitive Advantage - Michael Porter argues that the theory of comparative
advantage is limited by its focus on the elements of production:
i. –Land
ii. –Labor
iii. –Natural resources
iv. –Capital
Theory of Competitive Advantage  Nature of domestic
 Elements of production rivalry
 Nature of domestic demand
 Presence of appropriate suppliers or related
industries
 The conditions in the country that govern how
companies are created, organized, and managed

2.3 Global Outsourcing - procurement strategy in which a business seeks to find the

most cost efficient location for manufacturing a product, even if the location is in a
foreign country. For example, if a toy manufacturer finds that manufacturing
and delivery costs are lower in a foreign country due to lower wages of foreign employees,
the company might close the domestic factory and use a foreign manufacturer.

The most commonly outsourced streams of business include:

 IT outsourcing
 Legal outsourcing
 Content Development

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 Web Design and Maintenance

 Recruitment
 Logistics
 Manufacturing
 Technical/Customer Support

Source: Boeing 787 Dreamliner Assembly 

WHY DO ORGANIZATIONS OUTSOURCE THEIR BUSINESS PROCESS?

THE KEY FACTORS WHICH HAVE LED TO A GROWING TREND OF

OUTSOURCING ARE

 Lack of expert-labor in some portions of the business process

 Availability of cheaper labor, whilst not comprising on the quality of output
 Ability and feasibility to concentrate on the other crucial business process

These factors have specifically contributed to most of the outsourced partners across
different locations in the world. Expertise in communication capabilities, technical
expertise and favorable financial packages are the most important advantages of
outsourcing to India.

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Outsourcing most commonly known as off-shoring has pros and cons to it. Most of
the time, the advantages of outsourcing overshadow the disadvantages of
outsourcing.
The Advantages of Outsourcing

 Swiftness and Expertise: Most of the times tasks are outsourced to vendors who
specialize in their field. The outsourced vendors also have specific equipment and
technical expertise, most of the times better than the ones at the outsourcing
organization. Effectively the tasks can be completed faster and with better quality output
 Concentrating on core process rather than the supporting ones: Outsourcing
the supporting processes gives the organization more time to strengthen their core
business process
 Risk-sharing: one of the most crucial factors determining the outcome of a
campaign is risk-analysis. Outsourcing certain components of your business process
helps the organization to shift certain responsibilities to the outsourced vendor. Since the
outsourced vendor is a specialist, they plan your risk-mitigating factors better
 Reduced Operational and Recruitment costs: Outsourcing eludes the need to
hire individuals in-house; hence recruitment and operational costs can be minimized to a
great extent. This is one of the prime advantages of offshore outsourcing

The Disadvantages of Outsourcing

 Risk of exposing confidential data: When an organization outsources HR, Payroll

and Recruitment services, it involves a risk if exposing confidential company information
to a third-party
 Synchronizing the deliverables: In case you do not choose a right partner for
outsourcing, some of the common problem areas include stretched delivery time frames,
sub-standard quality output and inappropriate categorization of responsibilities. At times it
is easier to regulate these factors inside an organization rather than with an outsourced
partner
 Hidden costs: Although outsourcing most of the times is cost-effective at times the
hidden costs involved in signing a contract while signing a contract across international
boundaries may pose a serious threat
 Lack of customer focus: An outsourced vendor may be catering to the expertise-
needs of multiple organizations at a time. In such situations vendors may lack complete
focus on your organization’s task (K. Gillespie and H. Hennessey,2013)

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2.4 Balance of Payments - (BOP): an accounting record of the transactions between

the residents of one country and the residents of the rest of the world over a given period
of time.
Balance of payments accounts are an accounting record of all monetary
transactions between a country and the rest of the world. These transactions include
payments for the country's exports and imports of goods, services, financial capital,
and financial transfers. The BOP accounts summarize international transactions for a
specific period, usually a year, and are prepared in a single currency, typically the
domestic currency for the country concerned. Sources of funds for a nation, such as
exports or the receipts of loans and investments, are recorded as positive or surplus items.
Uses of funds, such as for imports or to invest in foreign countries, are recorded as
negative or deficit items.
2.5 Exchange Rate - The price of a nation’s currency in terms of another currency. An
exchange rate thus has two components, the domestic currency and a foreign currency,
and can be quoted either directly or indirectly. In a direct quotation, the price of a unit of
foreign currency is expressed in terms of the domestic currency. In an indirect quotation,
the price of a unit of domestic currency is expressed in terms of the foreign currency. An
exchange rate that does not have the domestic currency as one of the two currency
components is known as a cross currency, or cross rate.

The Exchange Rate is determined by Supply and Demand

1. Imports/exports
2. Inflation rate
3. Investors and speculators
4. Government actions

Kinds Exchange rates

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1. Floating exchange rates – in which currency rates are determined by market force
– are the norm for most major nations,
2. Peg Exchange Rate - some nations prefer to fix or peg their domestic currencies
to a widely accepted currency like the US dollar.
3. Spot rate – which is the current rate – or a forward rate, which is the spot rate
adjusted for interest rate differentials.
4. Soft Currencies - Currencies of smaller, less developed countries. Rates can be
determined by the governments of these countries. Governments must eventually
respect supply and demand; currencies often face significant devaluations.
Zimbabwean dollar is a classic example of soft currency.

Currency Fluctuations: Impact on Export Markets

When the currency of a foreign market devalues against an exporter’s home currency,
marketers must consider 2 options:

1. Raise prices in the export market in order to preserve margins - Can your brand
command a higher price?
2. Keep prices steady in hopes of sustaining or increasing market share
- Cost containment might help to maintain margins somewhat

2.6 Agencies Promoting Economic and Monetary Stability

1. WTO – World Trade
2. GATT – General Agreement on Tariffs and Trade
3. IMF - International Monetary Fund
4. WB – World Bank
5. Group of 7
6. European Monetary System

International Monetary Fund (IMF)- is the intergovernmental organization that oversees

the global financial system by following the macroeconomic policies of its member
countries, in particular those with an impact on exchange rate and the balance of
payments. It is an organization formed with a stated objective of stabilizing international
exchange rates and facilitating development through the enforcement of liberalizing
economic policies.

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Organization and purpose

The International Monetary Fund was conceived in July 1944 originally with 45
members and came into existence in December 1945 when 29 countries signed the
agreement, with a goal to stabilize exchange rates and assist the reconstruction of the
world's international payment system. Countries contributed to a pool which could be
borrowed from, on a temporary basis, by countries with payment imbalances (Condon,
2007). The IMF was important when it was first created because it helped the world
stabilize the economic system. The IMF works to improve the economies of its member
countries. The IMF describes itself as "an organization of 187 countries (as of July 2010),
working to foster global monetary cooperation, secure financial stability, facilitate
international trade, promote high employment and sustainable economic growth, and
reduce poverty".

IMF Activities
1. Surveillance – This refers to the monitoring of economic and financial development
and policies in member countries at the global level.
2. Technical Assistance – The IMF provides the governments and central banks its
member countries with technical assistance and training in the area of expertise.
3. Lending – The IMF lends to member countries with balance of payment problems.
This pursues the two-pronged goal of providing temporary financing and supporting
financial system.

IMF Accomplishments
1. Increasing volume of trade and investment
2. Adapting to changes in international commerce
3. Allowing more international cooperation (https://www.imf.org/external/index.htm)

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Entry Modes to International Marketing
There are different modes by which a company can inter foreign markets.
 Franchising - is the practice of using another firm's successful business model.
For the franchisor, the franchise is an alternative to building 'chain stores' to
distribute goods and avoid investment and liability over a chain. The franchisor's
success is the success of the franchisees. The franchisee is said to have a greater
incentive than a direct employee because he or she has a direct stake in the
business.Ex. Mc Donalds Enter the Philippines because of franchising.
 Licensing - may be granted by a party ("licensor") to another party ("licensee") as
an element of an agreement between those parties. A shorthand definition of a
license is "an authorization (by the licensor) to use the licensed material (by the
licensee)."

 Manufacturing - takes turns under all types of economic systems. In a free market
economy, manufacturing is usually directed toward the mass production of products
for sale to consumers at a profit. In a collectivist economy, manufacturing is more
frequently directed by the state to supply a centrally planned economy. In free
market economies, manufacturing occurs under some degree of government
regulation.

Forms of Manufacturing
 Assembly plant
 Contract manufacturing
 Joint Venture
 Wholly-owned Plant
 Exporting - refers to selling goods and services produced in home country to other
markets.

World Bank is an international financial institution that provides loans[2] to developing

countries for capital programs. It comprises two institutions: the International Bank for
Reconstruction and Development (IBRD) and the International Development
Association (IDA). The World Bank is a component of the World Bank Group, and a
member of the United Nations Development Group.

The World Bank's official goal is the reduction of poverty. According to its Articles of
Agreement, all its decisions must be guided by a commitment to the promotion of foreign
investment and international trade and to the facilitation of capital investment.

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THE WORLD BANK

1818 H Street, NW Washington, DC 20433 USA

Goals of World Bank

1. Eradicate Extreme Poverty and Hunger: From 1990 through 2004, the proportion
of people living in extreme poverty fell from almost a third to less than a fifth.
Although results vary widely within regions and countries, the trend indicates that
the world as a whole can meet the goal of halving the percentage of people living in
poverty. Africa's poverty, however, is expected to rise, and most of the 36 countries
where 90% of the world's undernourished children live are in Africa. Less than a
quarter of countries are on track for achieving the goal of halving under-nutrition.
2. Achieve Universal Primary Education: The percentage of children in school in
developing countries increased from 80% in 1991 to 88% in 2005. Still, about 72
million children of primary school age, 57% of them girls, were not being educated
as of 2005.
3. Promote Gender Equality: The tide is turning slowly for women in the labor
market, yet far more women than men- worldwide more than 60% – are
contributing but unpaid family workers. The World Bank Group Gender Action Plan
was created to advance women's economic empowerment and promote shared
growth.
4. Reduce Child Mortality: There is some improvement in survival rates globally;
accelerated improvements are needed most urgently in South Asia and Sub-
Saharan Africa. An estimated 10 million-plus children under five died in 2005; most
of their deaths were from preventable causes.
5. Improve Maternal Health: Almost all of the half million women who die during
pregnancy or childbirth every year live in Sub-Saharan Africa and Asia. There are
numerous causes of maternal death that require a variety of health care
interventions to be made widely accessible.

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6. Combat HIV/AIDS, Malaria, and Other Diseases: Annual numbers of new HIV
infections and AIDS deaths have fallen, but the number of people living with HIV
continues to grow. In the eight worst-hit southern African countries, prevalence is
above 15 percent. Treatment has increased globally, but still meets only 30 percent
of needs (with wide variations across countries). AIDS remains the leading cause of
death in Sub-Saharan Africa (1.6 million deaths in 2007). There are 300 to 500
million cases of malaria each year, leading to more than 1 million deaths. Nearly all
the cases and more than 95 percent of the deaths occur in Sub-Saharan Africa.
7. Ensure Environmental Sustainability: Deforestation remains a critical problem,
particularly in regions of biological diversity, which continues to decline.
Greenhouse gas emissions are increasing faster than energy technology
advancement.
8. Develop a Global Partnership for Development: Donor countries have renewed
their commitment. Donors have to fulfill their pledges to match the current rate of
core program development. Emphasis is being placed on the Bank Group's
collaboration with multilateral and local partners to quicken progress toward the
MDGs' realization. (https://www.worldbank.org/)

Different Types of Regional Economic Integration

 Free Trade Area - Two or more countries agree to eliminate trade barriers and
tariffs between their countries. Countries continue to have individual agreements
with other countries. The North American Free Trade Agreement is between
Mexico, Canada, and the U.S.
 Customs Union - A trade agreement between 2 or more countries. Elimination of
the internal barriers and tariffs. Establishment of common external barriers and
tariffs to other countries. Mercosur, referred to as the Southern Common Market,
includes the countries of Argentina, Brazil, Paraguay and Uruguay
 Common Market - Elimination of the internal barriers and tariffs between 2 or more
countries. Establishment of common external barriers to trade. Free movement of
the factors of production, including labor, capital and information The European
Union is a common market.

2.7 Protectionism

The reality of world trade is that countries protect its markets from foreign companies
by setting up tariffs, quotas, and nontariff barriers.

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• Barriers to trade can take any of the following forms:
– Legal (tariffs and quotas)
– Exchange
– Psychological (nontariffs)
– Private market

• Arguments for protectionism:

– Protection of infant industry
– Protection of the home market
– Need to keep money at home
– Encouragement of capital accumulation
– Maintenance of the standard of living and real wages
– Conservation of natural resources
– Industrialization of a low-wage nation
– Maintenance of employment and reduction of unemployment
– National defense
– Increase of business size
– Retaliation and bargaining

Trade Barriers

• Tariffs
• Quotas and Import Licenses
• Voluntary Export Restraints (VER)
• Boycotts and embargoes
• Monetary barriers
– Blocked currency
– Government approval
– Differential Exchange rates
• Standards
• Antidumping penalties
• Domestic subsidies and economic stimuli

Sources:

 Kate Gillespie and H. David Hennessey. Global Marketing, 3 rd (2013) ed.Singapore,

Cengage Learning
 (https://www.wto.org/)

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 (https://www.imf.org/external/index.htm)
 (https://www.worldbank.org/)

MODULE 2, ACTIVITY 1: GROUP PRESENTATION

Instructions:
1. The class will be divided into teams
2. Each team will be assign topic for simple research task
3. Each team will then do a video presentation based on the given requirements for a
certain topic

Note: The teams/pairs must use the official template that will be sent in doing this output.

RUBRIC FOR ACTIVITY 1: Group Video Presentation

Trait Criteria Points
Points 1 2 3 4
Content Presentation Presentation Presentation had Presentation had
contained little had moments a good amount of an exceptional
Did the to no valuable where valuable material and amount of
presentation material material was benefited the valuable material
have valuable present but as a class. and was
material? whole content extremely
was lacking. beneficial to the
class.
Collaboration The teammates The teammates The teammates The teammates
Did everyone never worked sometimes worked from always worked
contribute to the from others’ worked from others’ ideas from others’
presentation? ideas. It seems others’ ideas. most of the time. ideas. It was
Did everyone as though only However it And it seems like evident that all of
seem well a few people seems as every did some the group
versed in the worked on the though certain work, but some members
material? presentation. people did not people are contributed
do as much carrying the equally to the
work as others. presentation. presentation.
Organization The There were The presentation The presentation
Was the presentation minimal signs of had organizing was well
presentation lacked organization or ideas but could organized, well
well organized organization preparation. have been much prepared and
and easy to and had little stronger with easy to follow
follow? evidence of better
preparation. preparation.
Presentation Presenters Presenters Presenters were Presenters were
Did the were were not occasionally all very confident

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presenters unconfident and consistent with confident with in delivery and
Speak clearly? demonstrated the level of their presentation they did an
Did the engage little evidence of confidence/ however the excellent job of
the audience? planning prior to preparedness presentation was engaging the
Was it obvious presentation. they showed not as engaging class.
the material had the classroom as it could have Preparation is
been but had some been for the very evident.
rehearsed? strong class.
moments.

MODULE 3 PACKET
BA 412: INTERNATIONAL BUSINESS AND TRADE
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MODULE 3 OVERVIEW:

Welcome to Module 3 – CULTURE, MANAGEMENT STYLE AND BUSINESS

SYSTEMS!

Many of the additional complexities and problems faced by international marketers stem
from differences in the cultural and social environment which the marketer faces when
marketing internationally. Influences of cultural differences when marketing across national
boundaries take on a heightened importance.
We know how people consume, their needs and wants, and the ways in which these wants
are satisfied are determined by culture. Culture is the human-made part of environment
that includes knowledge, beliefs, morals, laws, customs and other elements acquired by
humans in society. Because cultures are so different between countries, cultural forces
and factors take on a particular significance for the international marketer. In this Module,
we will highlight some of the possible areas or aspects of culture where there may be
important differences when marketing in foreign markets.

You are set for an incredible journey! Have fun in the world of marketing!

CONSULTATION HOURS:
Phone or Messenger: 3 – 5:00 PM Wednesdays
Virtual time: 11:00 – 12:00 Monday, Tuesday, Thursday & Friday

MODULE 3 LEARNING OBJECTIVES:

By the end of this module, the students will be able to:
1. The necessity for adapting to cultural differences
2. How and why management styles vary around the world
3. The extent and implications of gender bias in other countries
4. The importance of cultural differences in business ethics
5. The differences between relationship oriented and information oriented cultures

COURSE CONTENT FOR MODULE 3: CULTURE, MANAGEMENT STYLE AND

BUSINESS SYSTEMS
ACTIVITY DESCRIPTION TIME TO

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COMPLETE
The necessity for adapting to cultural
Lecture discussion 20 minutes
differences
How and why management styles vary
Lecture discussion 10 minutes
around the world
Film Showing Film Title: GungHo (Cultural Differences) 2 hours
The extent and implications of gender bias in
Lecture discussion 10 minutes
other countries
The importance of cultural differences in
Lecture discussion 10 minutes
business ethics
The differences between relationship
Lecture discussion 10 minutes
oriented and information oriented cultures
Activity Case Study 2 hours
Quiz Summative quiz 30 minutes

LECTURE DISCUSSIONS

3.1 Culture - refer first to the betterment or refinement of the individual, especially
through education, and then to the fulfillment of national aspirations or ideals. (Early 19th
century)
- To refer to a universal human capacity. ( Mid 19 th century)
- In the 20th century, "culture" emerged as a central concept in anthropology,
encompassing the range of human phenomena that cannot be attributed to
genetic inheritance. Specifically, the term "culture" in American anthropology
had two meanings:
o (1) the evolved human capacity to classify and represent experiences
with symbols, and to act imaginatively and creatively; and
o (2) the distinct ways that people living in different parts of the world
classified and represented their experiences, and acted creatively.

Adaptation - is a key concept in international marketing and willingness to adapt is a

crucial attitude. It as an accommodation required on small matters as well as large ones.
10 Basic Criteria as guide to Adaptation
1. open tolerance
2. flexibility
3. humility
4. justice/fairness
5. ability to adjust to varying tempos

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6. curiosity/interest
7. knowledge of the country
8. liking for others
9. ability to command respect
10. ability to integrate oneself into the environment

Business Customs
1. Cultural imperatives -are the business customs and expectations that must be
met, conformed, recognized and accommodated if relationships are to be
successful.
Sample words known by successful business people
Chinese – Guanxi
Japanese – NingenKankei
Latin American - Comapdere
2. Cultural electives - relate to areas of behavior or to customs that cultural aliens
may wish to conform to or participate in but that are not required.
Sample Customs: Greet another man with a Kiss (some countries)
Eat food that are disagree with the digestive system
Drink alcoholic beverages (cheers for good health….)
Japanese Symbolic bow
Czech Republic aperitif (drinking liqueur at the beginning
of the meeting
Arab business associates will offer coffee as part of
important ritual of establishing a level of friendship
3. Cultural exclusives - are those customs or behavior patterns reserved exclusively
for the locals and from which the foreigner is barred and must not participate.

The Impact of American Culture

Ways in which U.S. culture has influenced management style include, but are not limited
to, the following:
1. “Master of destiny” viewpoint – people can substantially influence future
2. Independent enterprise as the instrument of social action – as an entity that has
rules and continuity of existence
3. Personnel selection and reward based on merit
4. Decisions based on objective analysis – that the management strived to be
scientific towards objectivity in decision making and accuracy of data.
5. Wide sharing in decision making

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6. Never-ending quest for improvement – the ability to innovate to provide quality life
for people in the future
7. Competition yielding efficiency– improvement and regeneration

3.2 Management Styles Around the World

Because of the diverse structures, management values and behavior encountered
in international business, there is considerable variation in the business is conducted.
Cross-cultural differences influence management styles in the following areas:

1. Authority and Decision Making – Business size, ownership, public accountability and
cultural values that determine the prominence of status and position (PDI – Power
Distance Index) combine to influence the authority structure of business.
2. Management Objectives and Aspirations – The training and background of
managers significantly affect their personal and business outlooks. Society as a whole
establishes the social rank, status of management and cultural background dictates
patterns of aspirations and objectives among businesspeople. Example includes:
Security & mobility, personal life & affiliation and social acceptance and power and
achievement.
3. Communication Styles – The ability to communicate, understand and translate in the
different language face-to-face or using technology.
4. Formality and Tempo - The breezy informality and haste that seen to characterize
American business relationships appear to be American exclusives that business
people form other countries not only fail to share but also fail to appreciate. A German
executive commented that he was taken aback when employees of his Indiana client
called him by his first name. He noted in Germany you don’t do that until you know
someone for 10 years – and never if you are at a lower rank. This apparent informality
however does not indicate a lack of commitment to the job. Comparing British and
American business managers, an English executive commented about the American
manager’s compelling involvement in business. At a cocktail party or a dinner, the
American is still on duty.

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https://www.statista.com/chart/12868/the-worlds-most-spoken-languages/

5. P-Time versus M-Time - TheMonochronic orientation (or "M-Time") views time as

sequential and linear. Time is seen as being a limited resource which is constantly
being used up, and thus scheduling tends to be "tighter," more rigid, with great
importance placed on promptness.

From the Monochronic perspective, late arrival for a meeting is viewed as rudeness,
and events and activities are scheduled sequentially, one after another, to avoid
overlapping. This perspective is oriented to the future.

The Polychronic orientation (or "P-Time") views time in a more "circular" fashion, as
the turning of the seasons, and time is seen as renewing itself each year. Scheduling
tends to be "loose" and flexible, with many last-minute changes to even highly
significant events and activities. Often many activities are juggled simultaneously, and
promptness is not considered important. This perspective is oriented to the past and/or
present.

Monochronic people are more likely to be task-oriented than relationship-oriented, and

may be viewed bypolychronic observers as "valuing things over people."
In contrast, polychronic people are more relationship-oriented than task-oriented and
thus may be viewed by monochronic observers as not taking their work and goals
seriously.

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Monochronic people are likely to feel insulted when a polychronic acquaintance or
colleague is late for a meeting;
polychronic people are likely to be offended when a monochronic acquaintance or
colleague seems too focused on their work to swap stories about their families or what
is going on in the world around them. "

6. Negotiations Emphasis - A core leadership and management skill is the ability to

negotiate effectively in a wide range of business contexts, including deal-making,
employment discussions, corporate team building, labor/management talks, contracts,
and handling disputes.But it is important to remember that negotiation process is
complicated and the risk of understanding increases when negotiating with someone
from another culture.

3.3 Gender Bias in International Business

The gender bias against women managers exists in some countries, coupled with
myths harbored by male managers, creates hesitancy among US multinational companies
to offer women international assignments.
Women are not accepted in upper level management roles in Asian, Middle
Eastern, and Latin American – women are not typically found in upper levels of
management and men and women are treated very differently. Gender bias poses
significant challenges in cross-cultural negotiations.

Hofstede Measures of Culture

• Power distance - The extent to which less powerful members within a society
accept that power is unevenly distributed
o High power distance societies
o Children expected to be obedient to parents
o Subordinates are less likely to contradict bosses

• Individualism-collectivism - The world is viewed as in-groups and out-groups

o Individuals are identified by group allegiance and role
o Groups are established, strong, and cohesive – You don’t just choose which
group to join!
o Non-group members may eventually become “trusted” outsiders
o Individualistic cultures are more open to outsiders and foreign ideas

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• Masculinity-feminity
o Masculinity is associated with assertiveness
o Masculine societies value ambition, competitiveness, and high earnings
o Femininity is associated with modesty and nurturing
o Feminine societies are concerned with public welfare and caring for the
underdog
• Uncertainty avoidance - The state of being uneasy or worried about what may
happen in the future.
o Anxious in general
o Uncertainty avoidant societies
o Don’t like ambiguity
o Consider the different to be threatening
o Tend to be better implementers than innovators

Hofstede Scores

Business ethics - is complex in the international

marketplace because value judgments differ widely
among culturally diverse groups. It is a form of applied ethics or professional ethics that
examines ethical principles and moral or ethical problems that arise in a business
environment. It applies to all aspects of business conduct and is relevant to the conduct of
individuals and entire organizations.

Generally Condemn Practices (Unethical)

1. Corruption - varyingly defined from culture to culture. In philosophical, theological, or
moral discussions, corruption is spiritual or moral impurity or deviation from an ideal.

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Corruption may include many activities including bribery, fraud and embezzlement.
Government, or 'political', corruption occurs when an office-holder or other
governmental employee acts in an official capacity for his or her own personal gain.

Methods of Corruption
a) Bribery - is the improper use of gifts and favours in exchange for personal gain.
This is also known as kickbacks or, in the Middle East, baksheesh. It is the most
common form of corruption. The types of favours given are diverse and include
money, gifts, sexual favours, company shares, entertainment, employment and
political benefits. The personal gain that is given can be anything from actively
giving preferential treatment to having an indiscretion or crime overlooked.
b) Embezzlement and theft- involve someone with access to funds or assets
illegally taking control of them.
c) Fraud - involves using deception to convince the owner of funds or assets to
give them up to an unauthorized party. Examples include the misdirection of
company funds into "shadow companies" (and then into the pockets of corrupt
employees), the skimming of foreign aid money, scams and other corrupt
activity.
d) Extortion and blackmail -centers around the use of threats.
e) Abuse of discretion -refers to the misuse of one's powers and decision-making
facilities. Examples include a judge improperly dismissing a criminal case or a
customs official using their discretion to allow a banned substance through a
port.
f) Favouritism, nepotism and clientelism - involve the favouring of not the
perpetrator of corruption but someone related to them, such as a friend, family
member or member of an association. Examples would include hiring a family
member to a role they are not qualified for or promoting a staff member who
belongs to the same political party as you, regardless of merit.Some states do
not forbid these forms of corruption.
g) Improper political contributions - This is the use of contributions to political
parties to secure illicit power, not because one favours their policies. An
example would be tobacco or alcohol companies funding major political parties
as a means of influencing the policing of their industry.

The Corruption Perceptions Index ranks countries and territories based on how corrupt
their public sector is perceived to be. A country or territory’s score indicates the perceived
level of public sector corruption on a scale of 0 - 100, where 0 means that a country is
perceived as highly corrupt and 100 means it is perceived as very clean. A country's rank

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indicates its position relative to the other countries and territories included in the index.
This year's index includes 180 countries and territories.

https://vajiramias.com/current-affairs/corruption-perceptions-index-cpi-
2019/5e2a74d21d5def517fec7a83/

3.4 Ethical and Socially Responsible Decisions

Areas of decision making where ethical issues arise:

1. employment practices and policies,

2. consumer protection,
3. environmental protection,
4. political payments and involvement in political affairs of the country, and
5. basic human rights and fundamental freedoms

Three Ethical Principles

Utilitarian Ethics Does the action optimize the "common good" or benefits of all
constituencies?

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Rights of the Parties Does the action respect the rights of the individuals involved?
Justice or Fairness Does the action respect the canons of justice or fairness to all parties
involved?

MODULE 3, ACTIVITY: ACTIVITY OUTPUT

1. Simple Case Scenario

You have been asked to attend a meeting with Belgian, Turkish, and Japanese colleagues to
develop a global plan for a new Deodorant.
a. Using the Hofstede scores for these countries, discuss the challenges you would face in
the meeting. Assume your native culture. (Note: Different countries may be substituted.)
b. Give at least 2 Strategies using 4P’s that you think will be applicable for these
countries based on the cultural differences you have seen in the movie.
For purposes of discussion, I will assume a U.S. culture:
  United States Belgiu Turkey Japan
m
Power Distance 40 65 66 54
Individualism 91 75 37 46
Masculinity 62 54 45 95
Uncertainty Avoidance 46 94 85 92

2. Based on the Movie Gung-ho, Identify cultural differences based on the 6

Management Styles Around the World

RUBRIC FOR ACTIVITY

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GRADING RUBRIC FOR WRITTEN ASSIGNMENTS
LEVELS OF ASSESSMENT
BELOW STANDARD – 2 MEETS STANDARD – 3 EXCEEDS STANDARD – EXEMPLARY – 5 PTS. SCORE
PTS. PTS. 4 PTS.
ORGANIZATION Writing lacks logical Writing is coherent and Writing is coherent and Writing shows high
organization. It shows some logically organized. Some logically organized with degree of attention to
coherence but ideas lack points remain misplaced transitions used between logic and reasoning of
unity. Serious errors. and stray from the topic. ideas and paragraphs to points. Unity clearly
Transitions evident but not create coherence. Overall leads the reader to the
used throughout essay. unity of ideas is present. conclusion and stirs
thought regarding the
topic.
LEVEL OF Shows some thinking and Content indicates thinking Content indicates original Content indicates
CONTENT reasoning but most ideas and reasoning applied with thinking and develops ideas synthesis of ideas, in-
are underdeveloped and original thought on a few with sufficient and firm depth analysis and
unoriginal. ideas. evidence. evidences original
thought and support for
the topic.
DEVELOPMENT Main points lack detailed Main points are present Main points well developed Main points well
development. Ideas are with limited detail and with quality supporting developed with high
vague with little evidence development. Some critical details and quantity. Critical quality and quantity
of critical thinking. thinking is present. thinking is weaved into support. Reveals high
points degree of critical
thinking.
GRAMMAR AND Spelling, punctuation, and Most spelling, punctuation, Essay has few spelling, Essay is free of
MECHANICS grammatical errors create and grammar correct punctuation, and grammatical distracting spelling,
distraction, making reading allowing reader to progress errors allowing reader to punctuation, and
difficult; fragments, comma though essay. Some errors follow ideas clearly. Very grammatical errors;
splices, run-ons evident. remain. few fragments or run-ons. absent of fragments,
Errors are frequent. comma splices, and run-
ons.
FORMAT Fails to follow format and Meets format and Meets format and assignment Meets all formal and
assignment requirements; assignment requirements; requirements; margins, assignment requirements
incorrect margins, spacing generally correct margins, spacing, and indentations are and evidences attention
and indentation; neatness of spacing, and indentations; correct; essay is neat and to detail; essay is neat
essay needs attention. essay is neat but may have correctly assembled. and correctly assembled
some assembly errors. with professional look. TOTAL:

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MODULE 4 PACKET
BA 412: INTERNATIONAL BUSINESS AND TRADE

MODULE 4 OVERVIEW:

Welcome to Module 4 – POLITICAL AND REGULATORY CLIMATE

In this module, the legal/political aspect is very important in global marketing. "International
law" can be defined as rules and principles that states and nations consider binding upon
themselves. This raises two interesting characteristics of international law. The first is that
"law" belongs to individual nations and international law only exists to the degree that
individual nations are willing to relinquish their rights. The second is the lack of an adequate
international judicial and administrative framework or a body of law which would form the basis
of a truly comprehensive international legal system.
The international business is also subject to political decrees made by governments both in
"home" and "host" countries. Home governments can apply pressure not to deal with
disapproved parties. These measures may take the refusal to grant an export licence, or
withdrawal of export guarantee cover. The host government may take measures like taxation,
ownership controls, operating restrictions or expropriation.

You are set for an incredible journey! Have fun in the world of marketing!

CONSULTATION HOURS:
Phone or Messenger: 3 – 5:00 PM Wednesdays
Virtual time: 11:00 – 12:00 Monday, Tuesday, Thursday & Friday

MODULE 4 LEARNING OBJECTIVES:

By the end of this module, the students will be able to:
1. List and explain the political motivations behind government actions that promote or restrict
international marketing. Identify pressure groups that affect international marketing.
2. Discuss specific government actions salient to international marketing, such as boycotts
and takeovers.
3. List and compare the four basic legal traditions that marketers encounter worldwide.
4. Cite examples illustrating how national laws can vary and change.
5. Differentiate between the steps involved in managing political risk and those involved in
planning for regulatory change.

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COURSE CONTENT FOR MODULE 4: POLITICAL AND REGULATORY

CLIMATE
ACTIVITY DESCRIPTION TIME TO COMPLETE
Lecture discussion Host country political climate 30 minutes
Lecture discussion Home country political forces 30 minutes
Activity Group Research Task Instruction 15 minutes
Group Presentation Legal Environments 1 hour
Group Presentation National Regulatory Environments 30 minutes
Political Risk, Peace Corps, Repatriation,
Movie Presentation 2 hour
Global Marketing and Terrorism
Quiz Summative quiz for module 4 30 minutes
Reaction Paper (With Guide Questions in Deadline: September
Task
Relation to the Movie Presentation) 7, 2020

LECTURE DISCUSSIONS

POLITICAL AND REGULATORY CLIMATE

4.1 Host country political climate

A host country is any country that contains an operational unit (marketing, sales,
manufacturing, R&D) of an international company.

So let us look at a more technical definition of an MNC. A multinational corporation is a

company incorporated in its home country (country of origin) but it carries out business
operations beyond that country in many other foreign countries, we call the host countries.
Its head office will be in the home country. (https://www.toppr.com/guides/business-
environment/scales-of-business/multinational-corporations-mnc/)

Political Motivations of Host Countries

• Self-preservation
• Security
• Prosperity
• Prestige
• Ideology
• Cultural identity

Host Country Pressure Groups

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• Labor unions
• Political parties
• Environmental groups
• Local business community

4.2 Home country political forces

Host Country Actions

• Government subsidies
• Ownership restrictions
• Operating conditions
– Work permits
– Local content requirements

Operating Conditions
• Operating conditions can also be affected by what governments fail to do
– Kidnappings!

Boycott - an act of voluntary and intentional abstention from using, buying, or dealing with a
person, organization, or country as an expression of protest, usually for moral, social, political,
or environmental reasons.
• Government boycotts (Arab Boycott of Israel Products)
• Ad-hoc consumer boycotts (The new Arab Boycott of USA Products)

Takeovers - Host-government actions that result in a firm’s loss of ownership or direct control
• An expropriation is a formal seizure of an operation
• A confiscation is an expropriation without compensation

Example of Expropriation
In January 2010, Hugo Chavez expropriated 6 hypermarkets and 35 supermarkets owned by
French Casino, because they raised prices after the Venezuelan currency devaluated. Later
Chavez said he would consider a partnership with Casino.
The Venezuelan government forced Banco Santander to sell their its stake in Banco de
Venezuela for $1.05 billion in mid 2009.

4.3 Legal Environments (International Legal Traditions)

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There are generally considered to be five legal systems in the world today: civil law, common
law, customary law, religious law, and mixed legal systems.
1. Civil law systems have their origin in the Roman legal tradition.  Civil systems vary
widely, both in procedure and substantive law, so conducting research on a particular
nation's civil law system should include looking at that nation's specific system of law,
but they do have some trademark characteristics.  Nations with civil law systems have
comprehensive, frequently updated legal codes.  Most importantly, case law is a
secondary source in these jurisdictions.  France and Germany are two examples of
countries with a civil law system.
2. Common law systems, while they often have statutes, rely more on precedent, judicial
decisions that have already been made.  Common law systems are adversarial, rather
than investigatory, with the judge moderating between two opposing parties.  The legal
system in the United States is a common law system (with the exception of Louisiana,
which has a mix of civil and common law).
3. Customary law systems are based on patterns of behavior (or customs) that have
come to be accepted as legal requirements or rules of conduct within a particular
country.  The laws of customary legal systems are usually unwritten and are often
dispensed by elders, passed down through generations.  As such, customary law
research depends greatly on the use of secondary sources.  Oftentimes, customary law
practices can be found in mixed legal system jurisdictions, where they've combined with
civil or common law.
4. Religious legal systems are systems where the law emanates from texts or traditions
within a given religious tradition.  Many Islamic nations have legal systems based in
whole or in part on the Quran.
5. Mixed legal systems refer to legal systems where two or more of the above legal
systems work together. https://guides.law.sc.edu/c.php?g=315476&p=2108388

Legal Evolution
• Product liability
• Bankruptcy
• Regulating cyberspace

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Heavy Regulation in Japan

• Steps to Qualify as an Official University
– Own your own building
– Have your own sports field and gym
– Operate on <25% debt-equity ratio
– Get government approval for new programs

Human Nature Orientation (HNO)

• Positive HNO – assume people can be trusted to obey the rules

• Negative HNO – assume people cannot be trusted to obey the rules

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(https://www.researchgate.net/figure/Cultural-value-orientations-and-examples-of-their-
specii-c-features_fig1_233337573)

Attitudes toward rules are affected by two criteria:

1. Level of power distance
2. Type of human nature orientation

Power distance refers to the way in which power is distributed and the extent to which the
less powerful accept that power is distributed unequally. Put simply, people in some cultures
accept a higher degree of unequally distributed power than do people in other cultures.

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(Show Video)

https://www.researchgate.net/figure/Countries-according-to-
the-Power-Distance-Index_tbl1_282924794

Another Perspective on Attitudes Toward Rules

• Tight cultures – many rules, norms and standards for correct behavior.
– Criticize and punish rule breakers severely.
– More isolated and less influenced by other cultures
– Examples of countries with tight cultures include China, France, India, Japan and
Singapore.
• Loose cultures – few rules, norms and standards for correct behavior
– Countries with loose cultures include Australia, Belgium, Israel, New Zealand
and the United States

4.4 Political Risk

It is the possibility that an unexpected and drastic change due to political forces will
result in adverse circumstance for business operations.
• Regulatory Change
– More moderate and predictable changes in the business environment
• Political risk
– More unexpected and drastic changes

Managing Political Risk

• Fighting the battle on two fronts:
1. Perfect intelligence systems to avoid being caught unaware when changes
disrupt operations

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2. Develop risk-reducing strategies that help limit their exposure, or the losses they
would sustain, should a sudden change occur
• Political Risk Index
1. Measures (Examples)
• Internal Causes of Political Risk
• Fractionalization of political spectrum and power of factions
• Mentality, including xenophobia, nationalism, corruption, nepotism,
willingness to compromise
• Fractionalization of language, ethnic, or religious groups
• Social conditions, e.g., population density and wealth distribution
• Restrictive (coercive) measures required to retain power
• Organization and strength of forces for a radical government
• External Causes of Political Risk
• Dependence on and/or importance to a major hostile power
• Negative influence of regional political forces
• Symptoms of Political Risk
• Societal conflict involving demonstrations, strikes and street
violence
• Instability as perceived by non-constitutional changes,
assassinations, and guerilla wars
2. Method
• 100 experts rate 0-7; sum to 70
• Prohibitive risk (0-39 points), high risk (40-54 points), moderate risk (55-60
points), low risk (70-100 points)

Risk Reduction Strategies

• Sharing Risks
– Joint ventures, alliances, licensing, franchising, management contracts,
countertrade
– Project finance
• Minimizing Assets at Risk
• Insuring Against Risks
– Governments (e.g., OPIC)
– Private firms

Sources:
 Kate Gillespie and H. David Hennessey. Global Marketing, 3rd (2013) ed. Singapore:
Cengage Learning

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 https://www.toppr.com/guides/business-environment/scales-of-business/multinational-
corporations-mnc/
 https://guides.law.sc.edu/c.php?g=315476&p=2108388
 https://www.researchgate.net/figure/Cultural-value-orientations-and-examples-of-their-
specii-c-features_fig1_233337573
 https://www.researchgate.net/figure/Countries-according-to-the-Power-Distance-
Index_tbl1_282924794

MODULE 4, ACTIVITY: VIDEO PRESENTATION OUTPUT

Instructions:
1. The class will be divided into teams/pairs
2. Each team will do a simple research on legal and regulatory environment of the different
countries and do a dramatized analysis on its impact on business if this country will
become a host country.
3. Each team will be given a week to prepare a 10 minutes for the video presentation
regarding the assign topic.

Note: The teams/pairs must follow the sets of criteria given for the said activity.

RUBRIC FOR ACTIVITY

RUBRIC FOR ACTIVITY: Group Video Presentation

Trait Criteria Points
Points 4 6 8 10
Content Presentation Presentation Presentation had a Presentation had
contained little had moments good amount of an exceptional
Did the to no valuable where valuable material and amount of
presentation material material was benefited the valuable material
have valuable present but as a class. and was
material? whole content extremely
was lacking. beneficial to the
class.
Collaboration The teammates The teammates The teammates The teammates
Did everyone never worked sometimes worked from always worked
contribute to the from others’ worked from others’ ideas most from others’
presentation? ideas. It seems others’ ideas. of the time. And it ideas. It was
Did everyone as though only a However it seems like every evident that all of
seem well few people seems as did some work, but the group
versed in the worked on the though certain some people are members
material? presentation. people did not carrying the contributed
do as much presentation. equally to the
work as others. presentation.

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Organization The There were The presentation The presentation
Was the presentation minimal signs of had organizing was well
presentation lacked organization or ideas but could organized, well
well organized organization and preparation. have been much prepared and
and easy to had little stronger with easy to follow
follow? evidence of better preparation.
preparation.
Presentation Presenters were Presenters were Presenters were Presenters were
Did the unconfident and not consistent occasionally all very confident
presenters demonstrated with the level of confident with their in delivery and
Speak clearly? little evidence of confidence/ presentation they did an
Did the engage planning prior to preparedness however the excellent job of
the audience? presentation. they showed the presentation was engaging the
Was it obvious classroom but not as engaging as class. Preparation
the material had had some strong it could have been is very evident.
been moments. for the class.
rehearsed?

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MODULE 5 PACKET
BA 412: INTERNATIONAL BUSINESS AND TRADE

MODULE 5 OVERVIEW:

Welcome to Module 5 – GLOBAL MARKET!

1. In this module, we will identify the factors that influence consumers’ abilities to buy and
explain how these affect various national markets and describe Maslow’s hierarchy-of-
needs model and apply it to consumers in different cultures. Explain why business-to-
business markets vary in buyer needs and behavior from one country to another.
Familiarized with the special qualities of national and multinational global buyers.

You are set for an incredible journey! Have fun in the world of marketing!

CONSULTATION HOURS:
Phone or Messenger: 3 – 5:00 PM Wednesdays
Virtual time: 11:00 – 12:00 Monday, Tuesday, Thursday & Friday

MODULE 5 LEARNING OBJECTIVES:

By the end of this module, the students will be able to:
2. Identify the factors that influence consumers’ abilities to buy and explain how these
affect various national markets and describe Maslow’s hierarchy-of-needs model and
apply it to consumers in different cultures.
3. Give examples of how consumer behavior is similar across cultures and examples of
how it may differ from one culture to another.
4. Describe segmentation options for consumer markets abroad.
5. Explain why business-to-business markets vary in buyer needs and behavior from one
country to another.
6. List the special qualities of national and multinational global buyers.
7. Explain the role of bribery in international contracts

COURSE CONTENT FOR MODULE 5: THE GLOBAL MARKET

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ACTIVITY DESCRIPTION TIME TO COMPLETE
Video Presentation Understanding Markets and Buyers 15 minutes
Lecture discussion The Consumer Market 30 minutes
Review Quick review 15 minutes
Lecture discussion Business Markets 1 hour
Lecture discussion Government Markets 30 minutes
Lecture discussion Bribery and Government Markets 15 minutes
Quiz Summative quiz for module 1 30 minutes
Presentation Presentation of selected outputs 30 minutes

LECTURE DISCUSSIONS

5.1.1Consumer Markets
The consumer market pertains to buyers who purchase goods and services for
consumption rather than resale. However, not all consumers are alike in their tastes,
preferences and buying habits due to different characteristics that can distinguish certain
consumers from others. These particular consumer characteristics include various
demographic, psychographic, behaviorialistic and geographic traits. Marketers usually
define these consumer characteristics through market segmentation, the process of
separating and identifying key customer groups.

Are consumption patterns converging such as:

The French drink more beer
The Germans drink more wine
The Japanese eat more beef
The Swiss prefer French cheese

National Differences
• Global marketers must consider national differences in:
– Ability to buy
• Per capita income -  is a measure of the amount of money earned per
person in a nation or geographic region. Per capita income can be used to
determine the average per-person income for an area and to evaluate the
standard of living and quality of life of the population. Per capita income
for a nation is calculated by dividing the country's national income by its
population.
• Purchasing power parity - the value of a currency expressed in terms of
the amount of goods or services that one unit of money can buy.
Purchasing power is important because, all else being

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equal, inflation decreases the amount of goods or services you would be
able to purchase. (https://www.investopedia.com/)
– Consumer needs
– Consumer behavior

The Hidden Economy

• Informal sector = Income not reported to authorities
• Peru’s informal sector =
– 42% construction
– 45% transportation
– 16% manufacturing

Reasons for Growth of Informal Sector

• Globalization
– Loss of employment in formal sector
• Uncompetitive firms fold following liberalization
• Uncompetitive firms fold during currency crises and other global economic
shocks
– Cost pressures of increased competition
• Core of wage employees and periphery of informal workers
– Information and communications technology
• Makes global coordination of informal firms possible
– Institutions
• Lack of enforcement institutions and laws against
• Corruption
• Tax evasion
• Labor and health violations
• Red tape of bureaucratic institutions
• Role of human nature orientation
• Tax-related institutions
• Complex, unfair tax codes
• Lack of effective tax auditing
• Lack of political will to change institutions

Consumers Needs
• Is Maslow’s hierarchy of needs applicable cross-culturally?
• Self-actualization
• Friendship, Love
• Safety, Food, Shelter
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• Physiological Needs

Consumer Behavior
• Cultural differences revisited
– Insurance in Muslim countries
– Who makes the purchase decision?
• More joint husband-wife decisions in the U.S. than in Venezuela

Global Colors
• The world’s favorite color?
– Blue
• But many colors elicit different responses
– Purple = Expensive (in Japan, China, South Korea)
– Purple = Cheap in USA

Segmentation
- is the process of dividing a market of potential customers into groups, or segments,
based on different characteristics. 

Four Characteristics of a Segment

1. Homogeneous characteristics
2. Profit potential
3. Ability to measure group
4. Ability to communicate to group

Three-Step Segmentation Process

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DEFINE:
– Take a look at existing customer list; look for common traits.
– Analyze competitors’ customer profiles
PROFILE:
– Full definition of who the segment is, their buyer behavior, attitudes/values,
lifestyle etc.
RANK:
– Order of importance for business goals
Highest profitability, least competition, most in need of product/service

Segmentation is important for two reasons:

1. You don’t need everyone in a country to buy your product – you just need a large
enough segment to purchase your product or service
2. How and how much you adapt your marketing mix depends on the segment that
you are targeting in a market

Global segment – transnational consumer segment based on age, social class, lifestyle
– Convergence of some aspects of buyer behavior
– Cosmopolitans
– But for most products and segmentation schemes, national differences persist
• Just-like-us-segment – segments in international markets that resemble a firm’s
domestic buyers
– Easier because does not require marketing mix adaptation
– But may result in few consumers worldwide and limits a firm’s global profit
potential
– EXAMPLE – If toy manufacturer only targeted children in China they would miss
out on a large segment – adults buying for themselves!
5.2 Business Markets
  The selling of products and services to other businesses to be resold or used to make
other items or services for sale. 

Factors Affecting Organizational Buyer Choice

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Decision
Initiator
InitiatorMaker User
User
Other
Other Gatekeeper
Gatekeeper
Buyer
InfluencersBuyer
Influencers
First Meetings (For Business Clients)
- Should you present a prospective client with a gift?
o Yes – China and Japan
o No! – Latin America and the Arab world

Business Buyers’ Needs

• The cost-performance criterion is a key consideration for business buyers
• Business buyers in developed countries choose capital intensive technologies
• Capital is cheaper/ labor is more expensive
• Business buyers in developing countries usually choose labor intensive technologies
• Labor is cheaper/ capital is more expensive

Developing Business Relationships

• Cross-cultural negotiations are a particular challenge
• Russian tactics:
– Emotional outburst, falling asleep, unreasonable requests
• Americans like to negotiate clear contracts while Chinese prefer to establish personal
trust relationships

Types of Global Buyers

• National global buyers
– Search the world for products used in a single market
• Multinational global buyers
– Search the world for products used throughout their global operations
• Global account management
– Marketers assign special executive or teams to address demanding global
buyers

5.3 Government Markets

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A government market is one which includes purchases by governmental units—
federal, state, and local—that procure or rent goods and services in carrying out the main
functions of the government.

• The buying process

– Procurement processes vary by country
– Some contracts go to the lowest bidder
– More sophisticated projects demand more complicated bidding processes

5.4 Bribery and Government Markets

• Bribery is giving something of value to an individual in a position of trust to influence
judgment or behavior
• Government employees are trusted to do what’s best for the public good
• Government corruption is more prevalent in emerging markets

Transparency International
- Corruption - is operationally defined as the misuse of entrusted power for private
gain.
- Transparency - can be defined as a principle that allows those affected by
administrative decisions, business transactions or charitable work to know not only
the basic facts and figures but also the mechanisms and processes. It is the duty of
civil servants, managers and trustees to act visibly, predictably and understandably.
(TI web site)
Which Countries are the Least Corrupt?

Which Country Pays the Least Amount of Bribes?

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Institutions most Affected by Corruption

• 29% Political Parties
• 26% Public officials/Civil Servants
• 16% Parliament/Legislature
• 14% Business/Private Sector
• 9% Judiciary
• 6% Media

U.S. Foreign Corrupt Practices Act

• Forbids U.S. citizens to bribe foreign government employees or politicians – or to give
money to agents that is subsequently used to bribe
• Citizens must report bribery in their organization
• Records must be transparent and well kept
• Failure to comply can result in fines and jail time !

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MODULE 6 PACKET
BA 412: INTERNATIONAL BUSINESS AND TRADE

MODULE 6 OVERVIEW:

Welcome to Module 6 – GLOBAL COMPETITORS!

The module opens with a discussion on the nature of competition and then looks at a number
of competitive analyses, including the seminal work by Michael Porter on industry analysis.
Examples are given to reinforce the theory and the chapter finishes by looking at "outsourcing"
as an important competitive strategy.

You are set for an incredible journey! Have fun in the world of marketing!

CONSULTATION HOURS:
Phone or Messenger: 3 – 5:00 PM Wednesdays
Virtual time: 11:00 – 12:00 Monday, Tuesday, Thursday & Friday

MODULE 6 LEARNING OBJECTIVES:

By the end of this module, the students will be able to:
1. To describe and give an understanding of the different ways of analysing global
competition.
2. To show how to develop strategies based on competitive analysis
3. To give examples to ensure understanding of the techniques to compete in the global
scenario.

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COURSE CONTENT FOR MODULE 6: GLOBAL COMPETITORS

ACTIVITY DESCRIPTION TIME TO COMPLETE

Lecture discussion The Globalization of Competition 40 minutes
 Coke and Pepsi Globalization of
Competition
Short video 10 minutes
 P & G battles Kao, L’Oreal, Unilever for
an emerging market
Activity Oral Analysis on Globalization of Competition 10 minutes
Lecture discussion Competitive strategy 1 hour
Review Quick review 15 minutes
Lecture discussion Market Liberalization 15 minutes
Lecture discussion Product Country of Origin 30 minutes
Giving instructions for the activity on Products
Activity 20 minutes
of Philippine Origin to go International
Quiz Summative quiz for module 7 30 minutes

Deadline for module 6output: September 18, 2020, at strictly 5:00 in the afternoon

LECTURE DISCUSSIONS

6.1 Competition is the rivalry between companies selling similar products and services with
the goal of achieving revenue, profit, and market share growth. Market competition motivates
companies to increase sales volume by utilizing the four components of the marketing mix,
also referred to as the four P's.

Global competition is the services or products provided by competing companies that serve

international customers. There are challenges that are faced in competing globally, and to be
successful, companies have to pay attention to cultural differences

Figure 6.1 Forces influencing competition in the industry

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In this analysis, the Malawian and Ugandan Birds Eye chili example is a good case. Uganda
was a world supplier of chilies. Uganda, devastated by the war, saw Malawi, (a new entrant)
take over its position. Now Uganda is hitting back by resurrecting its shattered industry and
strongly marketing its product to Malawi's detriment.

In 1990, Porter hypothesised in his text "The Competitive Advantage of Nations", why some
nations were more competitive than others. As well as being able to successfully manoeuvre
through the environment he identified that the foundation of success lay in the "diamond" of
"home" advantage. To successfully launch an international challenge he identified four "home"
prerequisites - the maximum use of endowed resources (natural and human) the forming of
domestic networks to fully exploit these resources, domestic demand (which may involve the
invitation to world class players to help develop these resources in country) and finally, an
industry and environmental structure (the latter provided by Government) in order that these
forces can thrive. Unfortunately, in many developing nations, the first stage only has been
reached and even then much of the added value is exported. Thankfully this is not the case in
other LDC's. We can examine this further by looking at the application of the above theory in
the food industry.

Figure 6.2 Elements of industry structure

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A food system, to be competitive, must have two requisites. Firstly it must be competitive with
other agricultural systems or any other system for that matter (say wildlife management) in
attracting resources, and secondly it must be absolutely competitive against similar commodity
systems or industries in other countries. The commodity system may have to compete against
those industries in international markets or be threatened by them in its domestic markets.
Porter would refer to this as "competitive advantage" or "international competitiveness". Whilst

Porter concentrates on two factors in the control of manufacturing industries i.e.:

1. lower cost of production and delivery - leading to underpricing over competition

2. differentiation of product - quality, image, services,
3. in export oriented agriculture it is essential to recognise a third potential source of
competitive advantage that of:
4. complementary supply - "off season", meeting production shortfalls because of
weather, disease and so on.

However, complementary supply may not be a competitive strategy per-se, in the long term,
because a supplier must still look at itself as a low cost or product differentiated supplier.
As in industrial products, many factors go into making up the comparative or competitive
advantage of a supplier. Similarly in food systems, many technological, market or natural
resource endowment factors go towards making up competitive advantage. Many of these
factors have actually been discussed, and these are summarised in table 6.1. These factors
are primarily related to the size and patterns of food demand (shaped by incomes, tastes,
technological developments etc.), microeconomics and sector policies (rate of inflation,
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investment policies, natural resources and human capital endowments (weather, soils, labour),
physical and social infrastructure (roads, ports, telephones, power system) and micro-
marketing relationship (quality/price relationships, management).

Table 6.1 Factors affecting international competitiveness for products/commodities

Factor Vector
Market research Income, tastes, resources and strengths of competing, suppliers,
work patterns, population clusters, price, elasticities
Macroeconomics and Terms of access and trade, price policies, fiscal and monetary
sector policies policies, tariff and non tariff barriers
Natural resources and Geological resources, labour, climate, experience
human capital
Physical, technical, and Transport, credit, market information, extension, communications,
social infrastructure marketing extension, post harvest facilities
Micro marketing Quality control, efficiencies of management- buying, selling,
relationships handling, production, marketing, promotion, credit coordination,
market research, risk analysis, relationship building.

Table 6.2 Sources of competitive advantage for selected commodity systems

Commodity Low cost Product Off season Shift in source/strategy of
advantage differentiation competitive advantage
Kenya vegetables Production Broad range Historically,
not low
Thailand tuna Processing
Taiwan food Tailor made, high Low cost to differentiated
processing quality supplier
Israel fresh and Broad range, brand Important Commodity supplier to
processed citrus name, tailor made niche and technology
supported product
Brazil frozen Production Bulk transport,
concentrated tank, farm
orange juice distribution

One of the remarkable success stories, against nearly all the odds, has been that of Argentina
beef. It is an example of how, through low cost of production and product differentiation it has
been able to maintain its international competitiveness.

Competition analysis

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In order to know how best to compete, as well as the analysis given above, one needs to
know the way competitors measure themselves, their strategy to date, their major strengths
and weaknesses and likely future strategy. In the first of these - knowing the way competitors
see themselves - much can be learned from public accounts, interviews and the trade press.
Other ways are to have competitive personnel, take part in trade fairs, purchase the
competitor's product and take it apart, or indulge in "espionage". In identifying the competitor's
strategy to date, it is not enough to believe what they say but to reconstruct their strategy.

6.2 Competitive strategy

Value chain analysis espouses three roles for marketing in a global competitive strategy.
1. The first relates to the configuration of marketing. It may be advantageous to concentrate
some marketing activities in one or a few countries.
2. A second role relates to the coordination of activities across countries to gain leverage say,
of know how.
3. A third critical role of marketing is its role in tapping opportunities for upstream advantage in
the value chain.

Local Competitors Watch Global Competitors

• Today, many local competitors are acutely aware of the challenges posed by global
competition
• When Wal-Mart entered Mexico, it quickly became dominant in the market
• This lesson was learned by retailers across the globe
– No foreign market entry was ever as easy for Wal-Mart
– Local retail chairs upgraded processes, focused on consumer relations,
consolidated and expanded in order to be better prepared for Wal-Mart

Strategies for Local Firms

1. Defender Strategy
• Leverage
– Knowledge of local tastes/ customs
– Good relationships with local distributors and/or suppliers
• Turkish fast food focuses on local cuisine
• Chilean banks outsource check processing
• Chinese online retailer Dangdang exploits knowledge of local payment norms

2. Extender Strategy
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Assets that work for defenders may also work in similar markets abroad
o South African Breweries -- now SABMiller PLC
o Televisa moves north
o Bimbo-Mexican packaged food

3. Contender Strategy
o Firms must upgrade capabilities to compete
- R&D
- Manufacturing
o Private firms may have to go public
o Contenders may seek out underserved niches
o Arcelik (Turkish Appliances into U.K.)

4. Dodger Strategy
o For firms that can’t or won’t be contenders
o Cooperate with global competitors
- Contract Manufacturing
- Local Distributor
o Sell the company the a large global firm

Techniques to compete in the Global scenario

Global Firm Buys Local Firm

o This can upset the local competitive environment
• Heinz dominated soy sauce in Indonesia with its ABC brand
• Then Unilever bought rival Bango brand
• Bango sales surged due to Unilever’s vast distribution system in Indonesia

Global Firms from Emerging Markets

Strategies for foreign market entry

1. Subcontracting or being an original equipment manufacturer (OEM), for an
existing foreign or even local brand is the way many manufacturing companies get
their feet wet in international markets. Then later they develop their own brands for
the foreign market.
2. Some companies make a niche product (smaller, larger, special features, etc.)
and others target a niche segment (e.g., Jollibees targeting Phillipinos and Asians in

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California first before mass market; Vakko selling to Turks in Germany first before
mass market).
3. Governments, industry associations, or company cooperatives may create
advertising campaigns to strengthen a country’s association with a particular
product category. Colombia is a great example of this – they even went so far as to
“brand” Colombian coffee with the Juan Valdez character and logo (use link to show
1980s commercial “in the supermarket.” Recently, the Chilean agricultural
exporters’ association created a television campaign that ran on CNN to promote
Chilean fruit products.
4. Increasingly, however, firms from outside the emerging markets are taking the bull
by the horns and directly entering into foreign markets!

Government Barriers to Competition

• Tariffs and restrictions on imports
• Restrictions on foreign ownership and investment
• Government control of inputs such as land, power, or water
• Permits to start a business

6.4 Market Liberalization - The encouraging of competition where prior monopolies or

strict controls existed.
• External pressures
– USA
– WTO
• Internal pressures
– Consumer pressure
- Government export goals

6.5 Country of Origin is often product specific and can enhance the capability of
competitors in product groups for which their country is well known
+ Iran - Persian carpets
+ France - Wines, perfumes
+ Russia – Vodka
+ Russia – Automobiles
• In a few cases, certain countries connote more general product attributes
+ Germany - engineering
+ Italy - design
• In general, consumers believe products from developed countries are better than those
from developing countries
+ Many people think Samsung is Japanese not South Korean
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• But country of origin perception can change rapidly
• Increasingly complicated by the fact that multinational companies produce products in
various countries
+ Country of manufacture
+ Country of parts
• In some cases, a strong brand can offset the negative connotations associated with
where a product is produced….BUT NOT ALWAYS!

MODULE 6, ACTIVITY:

Individualized Simple Product Research

RUBRIC FOR ACTIVITY

LEVELS OF ASSESSMENT
BELOW MEETS EXCEEDS EXEMPLARY – 5 SCORE
STANDARD – 2 STANDARD – 3 STANDARD – 4 PTS.
PTS. PTS. PTS.
ORGANIZATIO Writing lacks logical Writing is coherent Writing is coherent Writing shows
N organization. It and logically and logically high degree of
shows some organized. Some organized with attention to logic
coherence but ideas points remain transitions used and reasoning of
lack unity. Serious misplaced and between ideas and points. Unity
errors. stray from the topic. paragraphs to create clearly leads the
Transitions evident coherence. Overall reader to the
but not used unity of ideas is conclusion and
throughout essay. present. stirs thought
regarding the
topic.
LEVEL OF Shows some Content indicates Content indicates Content indicates
CONTENT thinking and thinking and original thinking and synthesis of ideas,
reasoning but most reasoning applied develops ideas with in-depth analysis
ideas are with original sufficient and firm and evidences
underdeveloped and thought on a few evidence. original thought
unoriginal. ideas. and support for
the topic.
DEVELOPMENT Main points lack Main points are Main points well Main points well
detailed present with limited developed with developed with
development. Ideas detail and quality supporting high quality and
are vague with little development. details and quantity. quantity support.
evidence of critical Some critical Critical thinking is Reveals high
thinking. thinking is present. weaved into points degree of critical
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thinking.
GRAMMAR Spelling, Most spelling, Essay has few Essay is free of
AND punctuation, and punctuation, and spelling, punctuation, distracting
MECHANICS grammatical errors grammar correct and grammatical spelling,
create distraction, allowing reader to errors allowing reader punctuation, and
making reading progress though to follow ideas grammatical
difficult; fragments, essay. Some errors clearly. Very few errors; absent of
comma splices, run- remain. fragments or run-ons. fragments, comma
ons evident. Errors splices, and run-
are frequent. ons.
STYLE Mostly in elementary Approaches college Attains college level Shows
form with little or no level usage of style; tone is outstanding style
variety in sentence some variety in appropriate and going beyond
structure, diction, sentence patterns, rhetorical devices usual college
rhetorical devices or diction, and used to enhance level; rhetorical
emphasis rhetorical devices. content; sentence devices and tone
variety used used effectively;
effectively. creative use of
sentence structure
and coordination
FORMAT Fails to follow format Meets format and Meets format and Meets all formal
and assignment assignment assignment and assignment
requirements; requirements; requirements; requirements and
incorrect margins, generally correct margins, spacing, evidences
spacing and margins, spacing, and indentations are attention to detail;
indentation; and indentations; correct; essay is neat all margins,
neatness of essay essay is neat but and correctly spacing and
needs attention. may have some assembled. indentations are
assembly errors. correct; essay is
neat and correctly
assembled with
professional look.

MODULE 7 PACKET
BA 412: INTERNATIONAL BUSINESS AND TRADE

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MODULE 7 OVERVIEW:

Welcome to Module 7 –GLOBAL MARKET PARTICIPATION!

In this module, we will discuss the reasons why firms go International/Global. You are going to
differentiate between born-global firms and other companies . At the end of this module, you
are going to explain the pros and cons of choosing markets on the basis of market similarities.
You are now going to identify country in which your locally produced product will be sold.

You are set for an incredible journey! Have fun in the world of marketing!

CONSULTATION HOURS:
Phone or Messenger: 3 – 5:00 PM Wednesdays
Virtual time: 11:00 – 12:00 Monday, Tuesday, Thursday & Friday

MODULE 7 LEARNING OBJECTIVES:

By the end of this module, the students will be able to:
1. List and describe the five reasons why firms internationalize.
2. Differentiate between born-global firms and other companies.
3. Explain the difference between a standalone attractive market and a globally strategic one.
4. Cite the advantages and disadvantages of targeting developed countries, developing
countries, or transitional economies.
5. List and describe the filters used for screening national markets.
6. Explain the pros and cons of choosing markets on the basis of market similarity.
7.

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COURSE CONTENT FOR MODULE 7:
INTRODUCTION TO MARKETING FOR HOSPITALITY AND TOURISM
ACTIVITY DESCRIPTION TIME TO COMPLETE
Lecture discussion Types of Internationalization 30 minutes
Lecture discussion Evaluating National Market 15 minutes
Video Presentation Quick review 15 minutes
Lecture discussion Geographic Market Choices 30 minutes
Lecture discussion Country Selection 30 minutes
Giving instructions for the activity: For Final
Activity 30 minutes
Output
Quiz Summative quiz for module 7 30 minutes

LECTURE DISCUSSIONS

7.1 Internationalization – The term use for a firm’s expansion from its domestic market into
foreign markets. Whether to internationalize is a strategic decision that will fundamentally
affect any firm, including its operation and management.

Types of Internationalization
1. Opportunistic expansion- is an internationalization strategy that is adopted in
response to unsolicited orders from overseas customers.
2. Pursuing Potential Abroad and Diversifying risk – Perhaps is the most common
reason for a company to expand internationally is the lure of increasing sales and profit
from entering new market or maybe avoiding risk inherent to operating in only one
country.
3. Exploiting Different Market Growth Rate – Companies seeking growth abroad often
pay particular attention to market growth rate, which are subject to wide variations
among countries. A company based in low-growth country may wish to expand into
faster-growing countries to take advantage of growth opportunities.
4. Following Customers Abroad – For companies, the decision to internationalize may
occur when one of its key customers moves abroad to pursue international
opportunities.
5. Born Global – it refers to firms that establishes marketing and other business
operations abroad upon formation of firms or immediately thereafter. These companies
develop their domestic markets and then tentatively enter international markets, usually
by exporting.
6. First-mover Advantage–A market advantage relating to brand awareness, sales and
profit that accrues to the first significant competitor to enter a new market.

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7.2 Evaluating National Market

1. Standalone Attractive Market – A national market can appear attractive in a number of
ways. First, the potential primary market needs to be assessed. Two key
considerations are the size of market and its growth rate. Then the firm must consider
its possible competitive position.
2. Globally Strategic Market – Are the current and the future battlegrounds where global
competitors engage one another.
3. Lead market Countries – those that possess major research and development sites for
an industry or recognized for being trend setter. Ex. (What becomes “cool” in Japan
often spread to Korea, China and other Asian Countries. (Italy is recognized lead
market for high-end textiles and clothing.

7:3 Geographic Market Choices

1. Targeting Develop Economies – A developed country is defined as a sovereign state
that has a developed economy and technologically advanced infrastructure when
compared to other nations. Several factors that determine whether or not a country is
developed, such as the Human Development Index, political stability, gross domestic
product (GDP), industrialization and freedom.

The Human Development Index was developed by the United Nations to measure human

development in a country. HDI is quantified by looking at a country’s human development
such as education, health and life expectancy. HDI is set on a scale from 0 to 1 and most
developed countries have a score above .80.

Developed countries have post-industrial economies with service sectors contributing more
to the nation than the industrial sector. Because there are so many factors to consider,
actually defining what countries are developed can be a challenge.

The United Nations Development Report 2019 Statistical Update ranks each country in the
world based on its HDI ranking. The following list is the top 10 countries on that list:
1. Norway
2. Switzerland
3. Ireland
4. Germany
5. Hong Kong, China
6. Australia
7. Iceland
8. Sweden
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9. Singapore
10. The Netherlands
https://www.investopedia.com/updates/top-developing-countries/

2. Targeting Developing Countries - developing country, also called a less developed

country or underdeveloped country, is a nation with an underdeveloped industrial base,
and a low Human Development Index (HDI) relative to other countries. On the other hand,
since the late 1990s developing countries tended to demonstrate higher growth rates than
the developed ones. There is no universal, agreed-upon criterion for what makes a country
developing versus developed and which countries fit these two categories, although there
are general reference points such as a nation's GDP per capita compared to other nations.
Also, the general term less-developed country should not be confused with the specific
least developed country.
  Afghanistan   Burundi   Equatorial
  Albania   Cambodia Guinea
  Algeria   Cameroon   Eritrea
  Angola   Cape Verde   Ethiopia
  Antigua and   Central African   Fiji
Barbuda Republic   Philippines
  Argentina   Chad   Poland
  Armenia   Chile
  Azerbaijan   China
  Bahamas   Colombia
  Bahrain   Comoros
  Bangladesh   Democratic
  Barbados Republic of the
  Belarus Congo
  Belize   Costa Rica
  Benin   Côte d'Ivoire
  Bhutan   Croatia
  Bolivia   Djibouti
  Bosnia and   Dominica
Herzegovina   Dominican
  Brazil Republic
  Brunei   Ecuador
  Bulgaria   Egypt
  Burkina Faso   El Salvador
  Burma

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3. Targeting Transnational Economy- While most of the top emerging markets are tradition
developing countries, Russia and Poland are intermediate economies from the former Soviet
Bloc.

4. Targeting BRIC – (Brazil, Russian, India and China), These four countries represent very
large emerging market. The growth rate of their economies increase by 3% in early 1990’s
and 7% in 2009. These are countries believed to be the future dominant suppliers of manufactured
goods, services, and raw materials by 2050. China and India will become the world's dominant
suppliers of manufactured goods and services, respectively, while Brazil and Russia will become
similarly dominant as suppliers of raw materials. As of 2010, South Africa joined the group, which is
now referred to as BRICS.

7.4 Country Selection

1. The screening Process
Macro indicators – a data is useful in estimating the total market size of a country or region.
Criteria for Selecting Target Country
1. Market Size and Growth
2. Political Condition
3. Competition
4. Market Similarity (Psychic distance – the perceived degree of similarity between
countries.

2. Listing Selection – A good way to screen countries is to develop a set of criteria that
serve as minimum standard that a country must meet in order to order or move through
the screening processes.
3. Group international Market

MODULE 7, ACTIVITY OUTPUT

Instructions:
1. The class will be divided into pairs
2. Based on the Individual Research in Module 6 every team must come up with ma Marketing Plan
of the local product to be able to participate in the international/global market
3. Each team will follow the outline prepared before.
4. You will be given 2 weeks to accomplished the plan and present it thru a video presentation as
your requirement for the final examination
5. A soft copy of the document will also be submitted.
a. A 4 sheet format with 1 inch margin in all sides
b. Font sized 12 in Times new romans or courier format
Marketing Plan Outline

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For your Philippine Origin Product to International Market

Executive Summary
The executive summary is a small, summarized version of your marketing plan. The main
objective is it to briefly list and describe all relevant components. Keep in mind that most
executives who’ll read your marketing plan won’t have the time to read the full document.
Therefore, you need to make sure that they’re immediately getting the full picture.

Mission Statement
Your mission statement should describe your marketing activities on a meta level. Hence, you
need to answer these basic business questions:
 What do you want to do?
 Why do you want to do it?
 Who do you do it for?
All of your business activities should be based on your mission statement. When you start
wondering if you’re still heading in the right direction, use this statement to double-check your
approach.

Situation Analysis

This analysis covers these elements:

 Product/Service: What are you selling?
 Unique Selling Proposition: What is your unique selling proposition? And what separates
you from your competitors?
 Best Practices: What are best practices at your company? They could be well-performing
marketing channels, buyer personas with a large amount of purchase intent, or
campaigns that have generated a lot of leads.
 Challenges: What are the current challenges that your company (especially your
marketing team) is facing?
 Competitor Analysis: Who are your competitors? How are your competitors performing?
 SWOT Analysis: What are the strengths, weaknesses, opportunities, and threats that your
company (especially your marketing team) is facing?

Target Market
What market is your product or service trying to target? Is it a B2B market or a consumer
market?
The target market includes the industries that you sell your product or service to. It should be as
detailed as possible, and it’s the foundation for any marketing activities. Without properly
targeting, you won’t be able to successfully run a marketing campaign.

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So what do you need to know about your target market? Get started by answering these
questions:
 Which companies are in your target market?
 How can you reach them?
 Why would companies in these industries buy your product/service?
 Why would companies from these industries refuse to buy your product or service
 What are these companies’ current needs?

Buyer Personas
You’ve defined your target market. That’s great, but now we need to dive deeper into this
market, to find out who will actually buy your product or service. So now is the time to create
your buyer personas. This process involves pinpointing which people work in your target
markets, and which ones represent segments of your customer base.
You’ll need to define these customer archetypes in a very detailed way. That way, you’ll be able
to make informed marketing decisions. But what attributes should you describe? You can easily
use our buyer persona template to pinpoint your first personas.
In general, a buyer persona should cover these points:
 The country of your choice
 Background Information: Define general information, such:
Land Area: Population: Languages:
Life Expectancy: People: Religions: Currency: (Value convert to Philippine Peso)
Government: Climate: Tourism: Transportation:
Head of State: Prime Minister: Minister of Foreign Affairs:
Key export commodities: Vital Import Commodities: Trading Partners
(Export & Import)
 Statement: Create one quote that contains the values, objectives, and challenges of your
buyer persona.
 Goals: What does your buyer want to achieve?
 Challenges and Problems: List the most important challenges that your buyer persona
faces.
 Values: What are your buyer persona’s most relevant values and beliefs?
 Buying Decisions: Why and when does your buyer persona buy?
 Solution: How can your product or service help your buyer persona overcome his or her
challenges?

Marketing Objectives and Performance

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This part of the marketing plan is about setting ambitious but achievable goals, and defining
how you’ll track your performance during the described period. You can use our SMART goals
template to make sure that you’re setting the right objectives.

Pricing Strategy
Set your prices, and align them with your marketing strategies. This strategy is key to generating
profits; it will decide the success or failure of your products or services.
 Penetrate It: If you want to enter a competitive market, use the penetration strategy: Set a
low price, in order to quickly gain a market share. Then after you’ve established your
company, raise your prices step-by-step.
 Bundle It: If you’re offering multiple products or services, you can consider this option as
well. It involves bundling different products or services to increase the provided value
while setting a higher price.

Distribution Plan
The distribution plan explains how you’ll deliver your product or service. If you’re offering online
software, your product could be distributed through your website. If you’re running a local clothes
shop, you distribute your products through your shop. So you see, the distribution channel needs
to be aligned with your product. Hence, you need to answer the following questions:
1. What is your preferred distribution channel?
2. Why are you choosing it over others?
3. What are the costs related to distributing your products or services?
4. What’s the impact of your distribution channel on your delivery times?

For example, our software Filestage can be only accessed through our website (e. g. by starting
a free trial). This is our only and most important distribution channel.

Promotional Plan
After defining your distribution channel(s), it’s time to make sure that you really need to deliver
your product or service. First of all, you need to define the message that should be conveyed to
your buyer personas. Afterwards, let’s look at suitable promotion channels that can be used to
acquire new customers. Obviously, they should be channels you can find your buyer personas
in. But the range of possibilities still seems to be endless.

Conclusion

Marketing Plan Rubrics

Category 100% 90% 80% 70% 60%

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Objectives Measurable Measurable Measurable Measurable Measurable

Achievable and Achievable and Achievable and
Profitable Profitable Profitable
Opportunities Growth and Strategic Growth Have seen Have seen Have seen
before before before
Target Market Well Segmented Well Segmented Simply Not Not
Segmented Segmented Segmented
Strategy Very New New Have seen Inconsistent Wrong
Before
Product New Interesting Have seen Not thought Inconsistent
Before through
Place/ Objectives consistent Objectives consistent Objectives No No objectives
Distribution with strategy and with strategy and consistent with Objectives and poor
completely thought completely thought strategy strategy
through through
Promotion Objectives consistent Objectives consistent Objectives No No objectives
with strategy and with strategy and consistent with Objectives and poor
completely thought completely thought strategy strategy
through, including through,
ads from CAS
Price Objectives consistent Objectives consistent Objectives No No objectives
with strategy and with strategy and consistent with Objectives and poor
completely thought completely thought strategy strategy
through, based on through,
competition

References :
John D. Daniels, International Business, 16th Edition, Pearson, 2018
Cateora, Gilly, and Graham, International Marketing 16 th edition, McGraw-Hill Higher
Education 2016.
Kate Gillespie, Global Marketing 4th edition, Routledge; (July 28, 2015)
Coughlan, Anne T., et al.(2006). A Comprehensive Study of Marketing Channels, Pearson
Education South Asia Pte Ltd.
Lascu, Dana (2013), International Marketing, Atomic Dog,2013
Vern Terpstra; James Foley; Ravi Sarathy, International Marketing, Naper Publishing Group;
10th edition (2012)
Online Sources:

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 IMF -- International Monetary Fund Home Page

 https://www.imf.org/
 https://europa.eu/european-union/index_en
 Cooperation
 Association of Southeast Asian Nations
 World Trade Organization
 NATO
 United Nations
 European
 Free Trade
 Association
 European Union
 Asia-Pacific Economic Cooperation
 https://www.apec.org/
 https://www.enotesmba.com/2016/04/importance-of-international-marketing.html)
 https://vajiramias.com/current-affairs/corruption-perceptions-index-cpi-
2019/5e2a74d21d5def517fec7a83/
 (https://www.researchgate.net/figure/Cultural-value-orientations-and-examples-of-their-specii-c-
features_fig1_233337573)
 (https://www.investopedia.com/)

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