Course: International Marketing Semester: Autumn 2010Level: MBA Code: 574

ASSIGNMENT No. 1

Q. 1 “The basic of world trade can be simply stated as the result of equalizing an imbalance in the needs and wants of society on one hand and its supply of goods on other hand.” Explain.

Solution:

Supply and Demand Relationship The concept of supply and demand is one of the most fundamental and important concepts of economics. It is an economic model based on the price and availability of a product in a market. Theoretically, the model suggests that in a perfectly competitive environment, price will function to maintain equilibrium with the quantity demanded by consumers and the quantity supplied by producers.

In order to understand thing better, it is essential to know what supply and demand means. Supply is the quantified measure of a product or service that is made available in the market by sellers whereas demand is the quantified measure of a product or service that is required by buyers in the market. The relationship between supply and demand has a great deal of influence on the price of goods and services.

The law of demand states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa. The law of supply states that, all other factors being equal, the higher the price of a service or good, the more it will be supplied. As people expect more profits from a product, they naturally produce more of that product.

However, there is a lot of disparity between theory and real life. There are a lot of shift factors which might influence the laws of supply and demand. Such shift factors include the income of people, general market sentiment, and ever-changing preference of some goods over the others etc… This can be suitably explained by the dynamic law of supply and demand which states the following:

• If quantity demanded is greater than quantity supplied (excess demand), prices tend to rise; if quantity supplied is greater than quantity demanded (excess supply), prices tend to fall. • The larger the difference between quantity demanded and quantity supplied, the greater the pressure for prices to rise (if there is excess demand) or fall (if there is excess supply.

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• When quantity demanded equals quantity supplied, prices have no tendency to change.

Equilibrium When supply and demand are equal (i.e. when the supply function and demand function intersect) the economy is said to be at equilibrium. At this point, the allocation of goods is at its most efficient because the amount of goods being supplied is exactly the same as the amount of goods being demanded. Thus, everyone (individuals, firms, or countries) is satisfied with the current economic condition. At the given price, suppliers are selling all the goods that they have produced and consumers are getting all the goods that they are demanding.

Q. 2 Discuss the breadth and scope of international marketing research. Why is the international marketing research generally broader in scope that domestic marketing research?

Solution:Breadth and scope of international marketing research

Breadth and scope of international marketing research:

A basic difference between domestic and international marketing research is the broader scope needed for foreign research. Research can be divided into three types based on information needs:

general information about the country area and or marketinformation necessary to forecast future marketing requirements by anticipating social, economic and consumer trends within specific markets or countries, andSpecific market information used to make product, promotion, distribution and price decisions and develop marketing plans.

In domestic operations, most emphasis is placed on the third type, gathering specific market information, because the other data are often available from secondary sources.

A country’s political stability, cultural attributes and geographical characteristics are some of the kinds of information not ordinarily gathered by domestic company marketing research departments but which are required for a sound assessment of a foreign country market. This broader scope of international marketing research entails collecting and assessing information that includes the following:

 

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Economic: general data on growth of the economy, inflation, business cycle trends and the like, profitability analysis for the division’s products, specific industry economic studies, analysis of overseas economies and key economic indicators for the home country and foreign countries.Sociological and political climate: a general non-economic review of conditions affecting the division’s business. In addition to the more obvious subjects such as cultural differences, it also covers ecology, safety, leisure time and their potential impact on the division’s business.Overview of market conditions: a detailed analysis of market conditions the division faces, by market segment, including international.Summary of the technological environment: a summary of the state-of-the-art technology as it relates to the division’s business, carefully broken down by product segments.Competitors: a review of competitors market shares, methods of market segmentation, products and apparent strategies on an international scale.(Samuel and Craig, 1997)

The role of marketing research in managerial decision making is explained further using the framework of the "DECIDE" model:DDefine the marketing problemEEnumerate the controllable and uncontrollable decision factorsCCollect relevant informationIIdentify the best alternativeDDevelop and implement a marketing planEEvaluate the decision and the decision processThe DECIDE model conceptualizes managerial decision making as a series of six steps. The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints.[4] Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes is collected. The next step is to select the best alternative based on chosen criteria or measures of success. Then a detailed plan to implement the alternative selected is developed and put into effect. Last, the outcome of the decision and the decision process itself are evaluated.Due to some following advantages the scope of international marketing research is broader than local marketing research.First, marketing research is systematic. Thus systematic planning is required at all

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the stages of the marketing research process. The procedures followed at each stage are methodologically sound, well documented, and, as much as possible, planned in advance. Marketing research uses the scientific method in that data are collected and analyzed to test prior notions or hypotheses.Marketing research is objective. It attempts to provide accurate information that reflects a true state of affairs. It should be conducted impartially. While research is always influenced by the researcher's research philosophy, it should be free from the personal or political biases of the researcher or the management. Research which is motivated by personal or political gain involves a breach of professional standards. Such research is deliberately biased so as to result in predetermined findings. The motto of every researcher should be, "Find it and tell it like it is." The objective nature of marketing research underscores the importance of ethical considerations.

Q. 3 What is the difference among international marketing, multinational and global marketing?

Solution:International Marketing:International marketing (IM) or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm. It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets. According to the American Marketing Association (AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives." In contrast to the definition of marketing only the word multinational has been added. In simple words international marketing is the application of marketing principles to across national boundaries. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term.The intersection is the result of the process of internationalization. Many American and European authors see international marketing as a simple extension of exporting, whereby the marketing mix 4P's is simply adapted in some way to take into account differences in consumers and segments. It then follows that global marketing takes a more standardised approach to world markets and focuses upon sameness, in other words the similarities in consumers and segments.

International marketing takes place when a business directs its products and services toward consumers in a country other than the one in which it is located.. International marketing involves recognising that people all over the world have different needs. Companies like Gillette,Coca-Cola, BIC, and Cadbury

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Schweppes have brands that are recognised across the globe. While many of the products that these businesses sell are targeted at a global audience using a consistent marketing mix. Global marketing, however, is the worldwide economic marketplace in which business operates selling a particular product globally using the 4Ps (product, place,price, promotion) according to that country's preferences.Global Marketing:The Oxford University Press defines global marketing as “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.” Oxford University Press’ Glossary of Marketing Terms.Here are three reasons for the shift from domestic to global marketing as given by the authors of the textbook, Global Marketing Management—3rd Edition by Masaaki Kotabe and Kristiaan Helsen, 2004.Multi national Marketing:A company must do more to define its market in a multi-national marketing environment than to decide to be a multi-national company. Defining its market as domestic on the one hand and foreign on the other is insufficient and ignores the real differences that exist between countries. Within the U.S., a company defines its market both broadly and narrowly, considering first a national perspective and then regional issues when they apply to a product. Similarly, a company needs to have a sense of itself as being in a multi-national marketing environment and also address regional and national issues when they apply. The company needs to account for the changes taking place in the world market environment and to develop a global strategy which entails on the one hand an overall strategy and on the other the flexibility to adapt to the requirements of specific regions or countries. If the company defines its market too narrowly, it will miss the opportunity provided by a broader view. The broader view opens the company to a consideration of the wide variety of market opportunities in different countries, and sometimes to the fact that a regional view might better serve the needs of a product than would a concentration on one country. There are certain economies of scale possible for marketing to a larger market, and too narrow a definition can be very costly with both excessive costs up front and limited returns in the end.

Q. 4 Discuss some of the reasons why it is probably best to seek an out of court settlement in internal commercial dispute rather than to sue.

Solution:Due to some following disadvanatages external settlement is better than to make a sue.You can go to small claims court if you’ve unsuccessfully tried to get compensation for your damages through other means. If negotiations haven’t worked, mediation hasn’t been an option, and arbitration is is impractical for some reason, small claims court offers you another option.

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Small claims court does have its benefits: it’s easy for just about anyone to handle, you don’t need a lawyer to argue your case for you, and you don’t need to know a lot about court protocols or how to impress a jury. Your case will be heard before a judge who knows that those not normally involved in legal proceedings are presenting their cases.It’s a pretty quick process to get your case heard through small claims court. You file your case and will have a hearing within a few weeks (a couple of months at the longest). You may spend as little as 10 minutes before a judge.What does the judge need to know? He or she needs the facts of the case, laid out clearly. He or she will want to see what evidence you have to back up your case. Then the defendant will present their side of the story. After that, the judge will make a decision. It’s that simple. Unlike a more involved civil case, small claims court cases are inexpensive to file and process.Small claims court does have its drawbacks though. Most limiting is that there are state caps imposed on most court awards. For example, most states don’t let you sue for more than $1500 in small claims court. Other states will let you go as high as $15,000. If the damages you seek exceed your state limits, it’s likely that you can’t have your case heard here.You may also want to file in small claims court simply because this may push an adjuster into settling your case. However again, if your case exceeds state imposed limits, this can be impossible.If an insurance adjuster is offering you a settlement that’s almost as high as the small claims court limit for your state, then threatening to sue them won’t do much. They have no reason to increase their offer if they know a judge can’t force them to pay much more than they already are.

Q. 5 Define the following terms: Jumping

Solution:Jumping or leaping is a form of locomotion or movement in which an organism or non-living (e.g., robotic) mechanical system propels itself through the air along a ballistic trajectory. Jumping can be distinguished from running, galloping, and other gaits where the entire body is temporarily airborne by the relatively long duration of the aerial phase and high angle of initial launch.Some animals, such as the kangaroo, employ jumping (commonly called hopping in this instance) as their primary form of locomotion, while others, such as frogs, use it only as a means to escape predators. Jumping is also a key feature of various activities and sports, including the long jump, high jump, and show

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jumping.

Licensing

Solution:A License or a Certificate is the basic regulatory tool to ensure that a person involved with the operation of an aircraft has met the required knowledge, training, experience and skill requirement for the assigned job. Director General Civil Aviation Authority has designated the Deputy Director General as the Licensing Authority.

Personnel Licensing Office functioning under the Licensing Authority is authorized to implement the CAA Licensing Policy and discharge functions related to the personnel licensing in accordance with the CAA Regulations.

The Licensing Authority is responsible for all matters dealing with Personnel Licensing. In the meanings of ICAO Annex 1, its functions include assessment of an applicant's qualification to hold a License/Certificate or a Rating, issue and endorsements of licenses, certificates & ratings, designations & authorization of Approved persons, a Approval of Training Course, approval for the use of training devices and authorization for their use in gaining experience and demonstration of skill required for the issue of a license or a rating and validation of licenses issued by other contracting states.

Legal weight

Solution:Weight of an article and its immediate wrapping or packaging sold with the article as a unit. For example, the legal weight of a can of sardines is the weight of sardines plus the weight of can. Commonly also called gross weight.

I.SO.

Solution:The International Organization for Standardization (French: Organisation internationale de normalisation, Russian: Mezhdunarodnaya organizaciya po standartizacii), widely known as ISO, is an international standard-setting body composed of representatives from various national standards organizations. Founded on February 23, 1947, the organization promulgates worldwide proprietary industrial and commercial standards. It has its headquarters in Geneva, Switzerland. While ISO defines itself as a non-governmental organization, its ability to set standards that often become law, either through treaties or national standards, makes it more powerful than most non-governmental organizations.[citation needed] In practice, ISO acts as a consortium with strong links to governments.

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