Global Marketing Final Exam (Other (Not Listed) Sample)

Global Marketing Final Exam
Question 1: Components of Culture.
When it comes to organizations transacting business at the international and global level, understanding the host culture is critical in the success of their goals. Doole et al. (2019) note that “[in fact], culture and strategy are intertwined” (p. 73). Misunderstanding the host culture often occurs when companies try to understand foreign culture through the lens of their home culture, and further apply their home culture on foreign markets under the assumption that operations will go on as usual. The authors caution against such a presumption and underscore that “for a company to succeed in that (foreign) market they often have to change ingrained attitudes about the way they do business” (Doole et al., 2019, p.73). To this end, companies must consider three components of culture, namely, beliefs, values, and customs. From my Chinese culture’s perspective, these are the takeaways that a company might find useful.
The first component of culture is belief, which refers to a range of numerous mental and verbal dynamics that influence a target market’s knowledge, perception, and appraisal of a product or service. Beliefs in China are a fundamental influence in buying decisions – they are evident in the way people operate, how architecture is set up, and even branding of merchandise. For example, there is a deep belief about the balance of energy in the universe, which must always ensure harmony. Consequently, the location of one’s business might affect the traffic if people perceive the location as opposed to natural flow of energy.
The second component of culture is values, a term that refers to ingrained guidelines regarding appropriate behavior. Dating all the way back from the Confucian era, as my grandparents educated me, there is a strong desire in the Chinese culture to embody benevolence, embrace harmony, and always be honest and loyal. These values guide most interactions of the Chinese and are even evident in its diplomatic interactions. In the Chinese culture, for instance, it would be unwise to argue with a customer. Firstly, the culture values benevolence, and treating a customer kindly is a daily expectation. Secondly, while bargains are allowed, arguments appear to deviate from the value of harmony. One is not, however, expected to blindly follow a customer’s demand, but to try and meet them to the best of their ability so as to foster harmony. Values in China are very critical in successful business operations and international firms should be aware of this fact.
Finally, culture also features the component of customs, a term that refers to explicit behaviors that epitomize culturally-acceptable ways of responding to specific situations. When it comes to customs, organizations must be very keen on what people do on specific days or seasons that are dear to the Chinese culture. For instance, it is against Chinese culture’s custom to swear, speak about negativity, or even discuss sad news on the New Year. This is seen as an attraction of bad energy that may follow you throughout the year. On the other hand, it is customary to decorate houses and workplaces in red color, exchange red-themed gifts, or even display red-branded merchandise to customers. Following these customs is a sure way of keeping the Chinese optimistic about your business and ensuring that the company blends into this unique and special day for the Chinese people.
Question 2
Part A: Proactive and reactive motives for going international
The essence of a firm going international is because of the expansion of the production level, expansion of its research, and development of certain activities that a company undertakes to introduce the newly innovated services and products into a global market. The two reasons/motives for a corporate to go international are reactive and proactive reasons The level of customers and market demand makes the demand for the products of certain corporates grow, hence pushing the producers of the products to enter into internationalization. Restrictions and regulations of the state are another reason a company goes international because of certain restrictions from the local government, which makes the company seek international markets that are a bit cheaper to operate from. For instance, when a country's economy becomes expensive, companies decide to go to less expensive companies (Cheng and Yu, 2008). Outside experts also trigger the company to go international. Some of the reasons could be the government influence which tries to welcome trade expertise who offer trade seminars and export assistance programs. Besides the government, export agents encourage the corporate to go international because export agents and management deal with international products; hence, they have contacts with the overseas and help deal with other exportable products.
Part B: Explain any THREE motives under each of these.
In brief, some of the reactive reasons for a company to go international are as follows. A concept from (Pg.45-46)
* Competitive pressures: The fear for a company to lose its local market due to the competing corporates that gain influence from a global activity makes them join internationalization. For instance, the case of Pepsi into internationalization is because of competitive pressure from Coca-Cola (Cheng and Yu, 2008). The reason is that even though Coca-Cola was the first in the international market, Pepsi started moving in that same direction.
* Small and saturated domestic market: the potential for a company to start exposing its products is because of the limited market within its reach. Some firms do not have enough domestic market to sustain the economies of scale and scope. To further explain this concept, the saturation of home markets proposes that unused products like managerial and production slack provides the knowledge of the resources needed to collect, interpret and use market information.
* Overproduction and excess capacity: companies may produce goods too excessive for the local market to consume hence being forced to go for the global market. The firm's domestic sales of the products might be below the producer's expectations (Cheng and Yu, 2008). Such situations make the company start short term prices of the export sales. Consequently, too much production capacity is a powerful motivation for market penetration because of the fixed costs for local production.