Sample Assignment MS-64 JAN JUNE 2016

Course Code MS - 64 Course Title International Marketing Assignment Code MS-64/TMA/SEM - I/2016 Assignment Coverage All Blocks

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1. Distinguish between the following: (a) Free Trade Area and Customs Union

While a customs union and a ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ level of economic integration than a free trade area does.

A free trade area is simply -------------------------------------------------------------------------------------------- (or at least not many) tariffs or other trade barriers that impede the flow of goods and services from one country to another. An example of this is the ---------------------------------------------------------------------------------------------- no trade barriers between the NAFTA countries.

A customs union is a free trade --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------therefore they are not a customs union.

A free trade area eliminates tariffs and measures having equivalent effect for goods and services traded between the member states. However, the member states -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------importing goods into the member having the lowest tariffs and from there into the target country. For example, Canada will not ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------from Japan imported into the USA cannot be freely imported to Canada. A customs union is a free -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, once goods have entered the customs union, they can move freely within the union. For example, goods from ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- into any EU member state without paying any import duties. Please note that neither harmonizes ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------don't have to deal with VAT when buying goods from another EU Member State.

The major difference between a customs --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------brings the issue of diminished customer choice because the products available may just be from the member countries.

============================================================================================

(b) Polycentric and Ethnocentric Orientations

Polycentric is the ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. Communication is smooth within the operation. Businesses with a polycentric --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------orientation contrasts with ethnocentric orientation, in which a company uses the same products and marketing strategy in each country as it does in its home country. The polycentric orientation -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the product, marketing and sales process, literature, messaging and packaging to their particular country. Operating under a polycentric -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------can greatly increase sales and profitability locally.

Polycentric Orientation

--------------------------------------------------------------: Focuses on ------------------------------------------- uniqueness

o of ------------------------------------- market May ------------------------------------------ each target country Fully decentralized, ----------------------------------- with headquarters ------------------------------ = specific to each country Result:

o No ---------------------------------f scale, o duplicated ----------------------------, o higher final product costs

Ethnocentric is a staffing --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------from home country abroad is that employees may gain experiences worldwide in order to become higher level in management of their headquarters because international managers require broad perspective and international exposure. Ethnocentrism is the conscious or unconscious belief that one's own culture is the one that matters most. For example, many children's --------------------------------------------------------------------------------------- to consider diversity.

The general attitude --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------home country, creates a unified corporate culture and helps transfer core competences more easily by deploying nationals throughout the organization. The main disadvantages are that an ethnocentric mindset can lead to cultural short-sightedness and to not promoting the best and brightest in a firm.

domestic market extension concept: Domestic --------------------------------------- are perceived as superior ------------------------------------------------, considered secondary International -------------------------------------- as

o outlets for ---------------------------------------- production International marketing plans

o developed ------------------------------------------ division

2. Explain the various products – communications strategies available to an international marketer, giving suitable examples. Marketing communications in -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------themselves – personal selling, advertising, and others. A product can be -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, international marketers can chose from to convey the message to customers in different foreign markets. Companies can pursue three ----------------------------------------------------------------- the same product or communication strategy used in their home market. This is extension. Other companies prefer to adapt their strategy to the local marketplace.

This strategy of adaptation enables ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------marketplace. These three basic strategies can be extended into five strategic options which are as follows:

Strategic Option 1: Product and Communications Extension – Dual Extension: At ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- the international arena will often opt for this approach. Also, small companies with few resources typically prefer it.

For them, the potential pay---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------brand strategy, with each brand similarly positioned in each market, including near-identical advertising and packaging.

Generally speaking, a standardized product policy coupled with a uniform communication strategy offers substantial savings because of economies of scale. This strategy is basically product-driven rather than market-driven. The downside is that it is likely to alienate foreign customers, who might switch to a local or other foreign competing brand that is more in tune with their needs.

In many industries, --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------itself and become an international success using the dual product and communication extension strategy.

Strategic Option 2: Product Extension – Communications Adaptation: -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------same product using customized advertising campaigns.

Although it retains the -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------relatively uniformly, there are wide differences in its communication strategies within different markets.

As a consequence, Levi’s produces both global brand positioning ads and localized ads that appeal to specific markets.

For example, for the British market, -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, while for the French market, ads stress the perceived individual nature of French youth.

In Japan Levi’s are positioned as an --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------recently communications strategies have been adapted to fit the aspirations of young women.

Strategic Option 3: Product Adaptation – Communications Extension: -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------often favour the case of product adaptation. Another source for product adaptation is the company’s expansion strategy.

Many companies add brands to their product -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------might present an opening for a harmonized communications strategy.

Within such a context, clever --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. The logo and most visible aspects of BP are markedly consistent in most countries.

Strategic Option 4: Product and Communications Adaptation – Dual Adaptation: -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the most viable option for international expansion is adaptation of the company’s product and communication strategy.

Slim-Fast adapts both product and -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------flavour is not sold in continental Europe.

Strategic Option 5: Product Invention: Genuinely global marketers try to figure---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------cater to common needs and opportunities around the world to manage its global product development process. Black & Decker set up a worldwide household board.

This steering committee --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to be major hit around the world.

Other factors that need to be considered in relation to international marketing communications (Promotion) include:

The work ethic of ------------------------------------------------- be targeted by media. Levels of literacy and the -------------------------------------------------------population. The similarity --------------------------------------------------------------------------- in the target nation. The similarity or ----------------------------------------------------------------------- in the target nation. The family -------------------------------------------------------------------- take into account.

There are a whole range of cultural issues that international marketers need to consider when communicating with target audiences in different cultures.

Language will always be a challenge. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------tricky to convey. Famous examples include the --------------------------------------------------------------- – of course No Va! Would not be an acceptable name in Spanish. A similar problem was left unaddressed by Toyota, with their MR2 in France (think about it!).

Design, symbolism and aesthetics sometimes do not transcend international boundaries. For example Japanese aesthetics ----------------------------------------------------------- at Japanese cars from the front – they have a smiling face.

The manner in which people present themselves in terms of dress and appearance changes from culture to culture. For example in Maori culture-------------------------------------------------------------------- costume. Whereas in Western business-culture the standard ‘uniform’ tends to be a conservative collar and tie. Maintain your business and product introductory strategies using PR and advertising in other countries, but recognize that implementation may be vastly different, depending on the country. For example, -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ten expect meals and even payment in return for attending a press conference, for example. You may also find reporters in some European ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------PR strategy if your product is unfamiliar, as well. Advertising laws also vary greatly among different countries; in some nations it’s government-regulated and you need government approval before airing or distributing ads. Use a sales force familiar with a --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. In many developing countries, consumers

rely on word-of-mouth referrals or guidance from influential individuals, such as community leaders, so reaching out to those individuals is a viable marketing communication strategy.

3. Briefly explain the components of international advertising strategy. What are the relative advantages of standardization and adaptation of an international advertising programme. International advertising --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------placed in the hands of local subsidiaries, resulting in greater use of local advertising agencies. International advertising can, therefore, ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------advertising is also a major force that both reflects social values, and propagates certain values worldwide. Components of international advertising strategy-

Advertising must only be -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------dominate advertising strategy. These are: (a) Creative strategy and (b) Media strategy. These two strategies are -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and media considerations have to be adapted to these conditions.

CREATIVE STRATEGY

Versatility and -------------------------------------------------------------------------------------------- advertising campaign. In formulating creative content of foreign advertising, the main factors to be considered include:

• ------------------------------ • Legal ---------------------------------- • -------------------------------- factors • Production ------------------------------- factors

Language Factors Language is one of the most formidable barriers to effective advertising communication. The problem involves not merely the different countries or even different languages in the same country, it also involves linguistic nuances and semantics, literacy rate, prevalence of idioms and dialects etc. Illiteracy for example, ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------in a country creates serious problems for economic and effective advertising communication.

Language translation can also create innumerable barriers to effective communication. A dictionary translation is not the same as an idiomatic interpretation and in advertising communication dictionary translations hardly suffice. For example, two popular ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------: Legal Factors

In many countries, --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and the like.

The German ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, France, Sweden, Austria, Belgium, Italy, D6nmark, Finland, Australia, Argentina and Mexico.

One of the main objectives of statutory regulations of advertising is to promote the interest of the consuming public against factually misleading and unfair advertising. Consumer movements and consumer organisations have become stronger and better organised. It is felt, this movement has had profound impact on the advertising industry and consumer legislation.

Apart from legislative --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of Advertising Practice'

The ICC code is designed primarily as an instrument for self-discipline but it is also for use by the Courts as a reference document within the framework of the appropriate laws. The basic principles of 1CC Code are: All advertising should be legal, decent, honest and truthful. Every ------------------------------------------------ should conform to the principles of fair competition, as generally accepted in

business. No advertisement should be such as to impair public confidence in advertising.

Cultural Factors The advertising --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and the like. People perceive and interpret advertising message in the light of their cultural background. For example, the customer benefits featured in the advertising may be appropriate in one country but may not be so in another country. The artwork may be visually unacceptable. The colour scheme or the copy theme may convey different meaning ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------markets.

Production and Cost Factors The facilities for and cost of production of advertisement substantially vary from country to country causing severe production limitations. Poor quality of printing and reproduction or non-availability of high grade paper, for example, are genuine handicaps for creative work. -----------------------------------------------------------------------------------------------------. Production an 'cost limitations exist nearly in all advertising media.

Message Selection

Message selection is probably --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the image, not the product, which is commercialised. Products do not project images, products fill the images which the communication campaign projects. Coke's "Life" theme is a classic in this regard.

In illustrations and artwork, some ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------original copy. Care has to be taken that the meaning does not get lost in translation.

Campaign Scheduling Scheduling international campaigns is -----------------------------------------------------------------------------------------------------------------------------------------------------------------, the use of media solely or in combination, and the specific dates and times for advertisements to appear in the media.

Evaluation Advertising campaign -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of the media. Measures include message recall tests, diary completion, and brand recall.

Guidelines for Creative Strategy The preceding description of limitations cause various creative problems in international advertising. It is therefore important to develop certain guidelines to deal with these problems and limitations internationally. An international advertising executive suggests five guidelines for international creative strategy. They are as follows:

Establish ----------------------------------- best suited to the company needs. Look for ---------------------------------------------------, not differences. Make maximum use -------------------------------------------- talents. Do not inhibit creative people. Develop a criterion for ------------------------------------- of advertising.

Other Components-

An International -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------budget, schedule and other elements of the strategy.

Strategy An advertising strategy provides an -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------encourage retailers to stock the product.

Review The client team and the -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------is like a road map that helps a team get quickly to the right solution.

Plan The advertising plan describes how to put that strategy into practice. To build brand awareness, for example, the plan might include a recommendation for a series ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------through advertising to retailers and a sales promotion campaign to encourage consumers to sample the products.

Media The advertising plan sets out --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------appear and the time span for the complete campaign.

Creative The creative proposals in ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- plan will describe any response mechanism, such as a reply coupon or website address, so that the advertiser can make arrangements to handle the response.

Budget The plan should include a detailed ------------------------------------------------------------------------------------ will fall. The campaign is designed to meet measurable objectives, so the plan should indicate how the agency will measure the campaign.

Standardization and adaptation of an international advertising programme-

As discussed above, a major --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------should be implemented seems to have been found.

The argument over which --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------by such strategy. These include-

Economies -------------------------------- distribution Lower ------------------------------------------- costs A consistent ----------------------------------------- image Transfer and sharing of good ideas Brings ---------------------------------------------------- countries

However, opponents of ----------------------------------------------------- of drawbacks like

Problems of language, culture and-lifestyle Difference in ------------------------------------------------------ needs, media availability etc. Local resistance Consumer usage patterns -------------------------------------------- one country to another

The question of when to use ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------worldwide appeals.

Brands that can be adopted for ---------------------------------------------------------------- into dozens of languages

High-tech ------------------------------------------------------------------ steeped in the cultural heritage of the country

Products with --------------------------------------------------------------------- in the field

Products that appeal ----------------------------------------------------------, interests, needs and values.

4. What do you understand by the term ‘Political Risk’? Explain the strategies available to international marketers for management of political risk.

Political Risk-

For multinational companies, political risk refers to the risk that a host country will make political decisions that will prove to have adverse effects on the multinational's profits and/or goals. Adverse political actions can range from very detrimental, such as

widespread destruction due to revolution, to those of a more financial nature, such as the creation of laws that prevent the movement of capital.

In general, there are two types of political risk-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------usually will end up losing a lot of money if they are unprepared for these adverse situations. For example, --------------------------------------------------------------------------------------------------------------------------------------------------------------------- and companies were expropriated. Unfortunately, most, if not all, of these American companies had no recourse for getting any of that money back.

Political risk analysis is rooted in the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------outcome and value of a given economic action by changing the probability of achieving business objectives”.

Political risk faced by --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------in their ability to execute diplomatic, military or other initiatives as a result of political risk.

A low level of political risk in a ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------control is maintained and citizens prevented from a free exchange of ideas and goods with the outside world.

Understanding risk partly as -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------occurring may reduce the desirability of that investment by reducing its anticipated returns.

Strategies available to international marketers for management of political risk-

The different ways in which -------------------------------------------- are as follows:

1) Avoiding Investment: The simplest way to ----------------------------------------------------------------------------------. Where investment has already been made, plants may be wound up or transferred to some other country which is considered to be relatively safe.

This may be a poor -------------------------------------------------------- do business in a country will be lost.

2) Adaptation: Another way of managing -----------------------------------------------------------------------------------------------------. MNCs incorporate risk by means of the following three strategies: local equity and debt, development assistance, and insurance.

i) Local Equity and Debt: This involves financing subsidiaries with -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------in India, it ensured that sandwiches did not contain any beef.

ii) Developmental Assistance: Offering development -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, medical care, and other improvements.

iii) Insurance: This is the last -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------parent country currency. Others insure against losses created by violent events, including war and terrorism.

3) Threat: Political risk can also be -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, technology, and distribution channels in the host country. The firm may threaten the host country that the supply of materials, products, or technology would be stopped if its functioning is disrupted.

4) Lobbying: Influencing local politics -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------on local political matters. Lobbyists meet with local public officials and try to influence their position on issues relevant to the firm. Their ultimate goal is getting favourable legislation passed and unfavourable ones rejected.

5) Terrorism Consultants: To manage terrorism risk, MNCs hire consultants in counterterrorism to train employees to cope with the threat of terrorism.

6) Invaluable Status: Achieving a status of ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------overnments by emphasizing their contributions to the economy.

When Texas Instruments wanted to open an operation in Japan more than a decade ago, the company was able to resist pressures to take on a local partner because of its unique advanced technology. This situation occurred at a time when many other foreign companies were forced to accept local partners. The appearance of being irreplaceable obviously helps reduce political risk.

7) Vertical Integration: Companies that maintain -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and independent plants in each country. A firm practicing this form of distributed sourcing can offer economies of scale to a local operation. This strategy can become crucial for success in many industries.

If a host ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------down almost completely if only one of its plants were affected negatively.

8) Local Borrowing: One of the reasons why Cabot ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------actions were taken.

Typically, host governments do not expropriate themselves, and they are reluctant to cause problems for their local financial institutions. Local borrowing is not always possible, however, because of restrictions placed on foreign companies, which otherwise crowd local companies out of the credit markets.

9) Minimizing Fixed Investments: Political risk, of course, is ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------exist. In any case, companies should keep exposed assets to a minimum to limit the damage posed by political risk.

10) Political Risk Insurance: As a final recourse, global companies can purchase insurance to cover their political risk. With the political developments in Iran and Nicaragua and the assassinations of President Park of Korea and President Sadat of Egypt all taking place between 1979 and 1981, many companies began to change their attitudes on risk insurance. Political risk insurance can offset large potential losses. For example, as a result of the UN -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and billions from government-owned insurers.

5. A manufacturer of handloom products is planning to enter international markets. He has a well established domestic business and wants to go overseas. Discuss: (a) The ways in which he can go international. Here are five tips to help prepare Handloom business to enter the international market:

1) Educate --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------them in the expected way within their society — e.g: with the appropriate salutation.

2) Gather historical data -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------into the offering. Lock in currency rates and delivery dates in advance whenever possible. The less speculation, the better.

3) Become an expert on the ---------------------------------------------------------------------------- if possible, someone who can

help you navigate any unforeseen obstacles and explain all contract provisions and terminology. Know and understand the laws and legalese of the jurisdiction that governs your contract before it becomes legally binding.

4) Conduct focus ----------------------------------------------------------------------- Understanding each country’s culture means

you have to find ways to reach what would otherwise be the same demographic but in a different location.

A new ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------customers in the new market that you know their protocol and you’ve take the time to adapt to it. 5) Find out what your competition ------------------------------------------------------------------------------- market before? What

obstacles did they face? How did they approach the new market? And most importantly, what would you do differently?

When working on ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------that you know how to acclimate yourself and your company to their culture.

Handloom manufacturer for various options available to reach foreign markets

When the executives in -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------a firm has over its operation, how much risk is involved, and what share of the operation’s profits the firm gets to keep.

1. Exporting - Exporting involves -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------manufacturer, for example, first ------------------------------------------------------------------------------------------------. Small firms may rely on exporting because it is a low-cost option.

2. Creating a Wholly Owned Subsidiary - A wholly owned subsidiary is a business operation in a foreign country that a firm fully owns. The Handlooms Manufacturer can ---------------------------------------------------------------, meaning that the firm creates the entire operation itself. Another possibility is purchasing an existing operation from a local company or another foreign operator.

3. Franchising - Franchising has been used -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------franchise fee) and a percentage of franchisees’ revenues (a royalty fee). Franchising is an attractive way to enter foreign markets because it requires little financial investment by the franchisor.

4. Licensing - While franchising is --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------loses some control over how its technology is used. For example, Readymade clothes provider ---------------------------------------------------------------------------------------------- for Indian markets.

5. Joint Ventures - Parties to --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------company to have some control over the state and sale of your brand in a location where you may have little if any influence.

For example, Madura Fashion & Lifestyle ---------------------------------------------------------------------------- British men’s luxury clothing and accessories brand. This move comes as part of Hackett continuing its global expansion plans and marks MFL’s foray into the luxury mono brand business. ==========================================================================================

(b) What environmental analysis he has to undertake to understand the overseas markets? The analysis of the global environment --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Manufacturer Company is influenced by its environment. Many environmental factors, especially economical or social factors, play a big role in a company’s decisions, because the analysis and the monitoring of those factors reveal chances and risks for the company’s business. This environmental framework also gives information about location issues.

Preparing a marketing --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------stands for the Political, Economic, Social, Technological, Legal and Environmental factors you need to consider.

Political Political factors ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------certain districts or the kinds of services available might impact your ability to run your business in these areas.

Economic Economic ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------financial strategy for your business.

Social The way society changes and adapts over time, and the differences in communities across the country and the world, are all important considerations when ------------------------------------------------------------------------------------------ expectations, housing standards and population demographics such as age, gender and ethnic origin.

Technological Technological change has wiped out old --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------your business could be more efficient and productive by using new technologies in production or distribution, for example.

Legal Every business ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------regulatory obligations, environmental restrictions, import/export limitations and basic health and safety laws.

Environmental Economies across the world --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------tourism and farming. Showing that you are a "green" business might attract new customers.

Opportunities and Threats Your PESTLE analysis should provide you with a useful tool to establish the major opportunities and threats facing your business as you plan for its future growth. When taken together with an internal review of your business' strengths and weaknesses, you should be in a strong position to develop a robust strategy and business plan based on well-balanced research.

=========================================================================================== (c) The organizations he can approach which can guide him and facilitate his export efforts. The way your company chooses to export its products can have a significant effect on its export plan and specific marketing strategies. The basic ----------------------------------------------------------------------------------------------- level of involvement in the export process. There are at least four approaches, which may be used alone or in combination:

I. Passively filling orders from domestic buyers who then --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------interest in exporting when they discover that their product is already being sold over-seas.)

II. Seeking out domestic buyers who --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, but it is still the buyer who assumes the risk and handles the details of exporting.

III. Exporting indirectly through --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------other market opportunities.

IV. Exporting directly. This approach is the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, international banks, and other service groups, even small or medium-sized firms can export directly if they are able to commit enough staff time to the effort. For those who cannot make that commitment, the services of an EMC, ETC, trade consultant, or other qualified intermediary are indispensable.

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