Chapter 4 Global Marketing

International companies may come under attack from home country pressure groups because of their

1. Choice of markets 2. Methods of doing business

o support the local apparel industry, the Bulgarian government pays each Bulgarian apparel company US$1 for each piece of clothing that they export. This is an example of a(n) _____.

Direct Government Subsidy

The Nigerian government decided to host the All-Africa Games in 2003, despite the fact that building costs for a new stadium exceeded $340 million, twice what the government planned to spend on health care for one year. This action was motivated by the Nigerian government's interest in _____.

Enhancing Prestige

A major goal of the European Union government is to provide full employment and increasing standard of living for its citizens by encouraging foreign investment in the EU and promoting EU exports in foreign markets. These actions are motivated by the EU government's interest in _____.

Fostering National Prosperity

An American company sets up a subsidiary in Thailand, including a production facility and marketing/sales office. In this example, the USA is a(n) _____ country.

Home

Most U.S. companies do not do business in Cuba due to _____.

Home Country Action (embargo)

An American company sets up a subsidiary in Thailand, including a production facility and marketing/sales office. In this example, Thailand is a(n) _____ country.

Host

Product liability laws

If a product is sold in a defective condition such that it becomes unreasonably dangerous to use, then both the manufacturer and the distributor can be held accountable in US law

Ecuador provides electricity to several large exporting companies in Quito, the capital city. This is an example of a(n) _____.

Indirect Government Subsidy

In Germany, rules are strictly applied because of its

Low power distance and low human nature orientation

In Australia, foreign ownership of television stations is limited to no more than 20 percent. It is feared that if a foreign country controlled the media, it could influence public opinion and national sovereignty. This regulation is motivated by the Australian government's interest in _____.

National Sovereignty and the goal of self-preservation

Coke decided to abandon its Indian operations in the late seventies because of _____.

Ownership Restrictions

The Iraqi government limits foreign ownership of businesses in Iraq to 49 percent. This is an example of a(n) _____.

Ownership restriction

In the past, Iran and Venezuela have attempted to outlaw foreign brand names, requiring international marketers to establish names for their products in Persian and Spanish. These governments were interested in _____.

Protecting Cultural Identity

In Vietnam, foreign electric component manufacturers are required by the Vietnamese government to prove that a minimum of 20 percent of the components must be made with local input products. This is an example of _____.

fostering national prosperity / operating conditions

Friends of the Earth Indonesia and other non-governmental organizations complained that Mobil Oil was complicit in human rights abuses that had occurred during the construction of its pipeline in the Ache province of Indonesia. They tried to pursue the Indonesian government to end their joint venture with Mobil Oil. These organizations are examples of _____ groups.

pressure

Sovereignty is defined as _____.

the complete control exercised within a geographical area, including the ability to pass laws and regulations and the power to enforce them.

Government subsidies are most likely to be given to firms that _____.

will be major exporters

Under socialist law

• Economic power centralized • Market economies virtually unknown • Liberalize economies • Lack of legal sophistication

Common law is based on

• What has commonly been done and accepted • English Law