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ê.². â²È²´Ú²Ü Global Marketing ²Ü¶ÈºðºÜÆ àôêàôØÜ²Î²Ü ÒºèÜ²ðÎ Ø²ðøºÂÆÜ¶Æ Ø²êÜ²¶ÆîàôÂÚ²Ü àôê²ÜàÔÜºðÆ Ð²Ø²ð ºðºì²Ü 2015 Ðñ³ï³ñ³ÏíáõÙ ¿ ÐäîÐ ·Çï³Ï³Ý ËáñÑñ¹Ç áñáßÙ³Ùµ ¶ñ³ËáëÝ»ñ` º. ºñ½ÝÏÛ³Ý µ.·.¹., åñáý»ëáñ È. øáÉÛ³Ý ï.·.Ã., ¹áó»Ýï È. ¸³¹³Û³Ý ï.·.Ã., ¹áó»Ýï ². Ê³ã³ïñÛ³Ý µ.·.Ã., ¹³ë³Ëáë è. ²ëÉ³ÝÛ³Ý Ù.·.Ã., ¹áó»Ýï È. Ð³ñáõÃÛáõÝÛ³Ý µ.·.Ã., ¹áó»Ýï Չ 150 â³É³µÛ³Ý ê.². Global Marketing. ²Ý·É»ñ»ÝÇ áõëáõÙÝ³Ï³Ý Ó»éÝ³ñÏ §Ø³ñù»ÃÇÝ·¦ Ù³ëÝ³·ÇïáõÃÛ³Ý áõë³ÝáÕÝ»ñÇ Ñ³Ù³ñ, ê. â³É³µÛ³Ý.- ºñ.: 2015,- 332 ¿ç: Ò»éÝ³ñÏÁ Ý³Ë³ï»ëí³Í ¿ ïÝï»ë³·»ï áõë³ÝáÕÝ»ñÇ, Ù³ñù»ÃÇÝ·Ç áÉáñïáõÙ ³ßË³ïáÕ Ù³ëÝ³·»ïÝ»ñÇ, ÇÝãå»ë Ý³¨ ³Ý·É»ñ»Ýáí Ññ³ï³ñ³Ïí³Í Ù³ëÝ³·Çï³Ï³Ý ·ñ³Ï³ÝáõÃÛáõÝÇó û·ïí»É ó³ÝÏ³óáÕÝ»ñÇ Ñ³Ù³ñ: ISBN 978-9939-61-111-2  §îÝï»ë³·»ï¦ Ññ³ï³ñ³ÏãáõÃÛáõÝ, 2015 2 CONTENTS Նախաբան.................................................................................... 5 UNIT 1. WHY GLOBAL MARKETING IS IMPERATIVE ............ 7 UNIT 2. THE DEVELOPMENT OF GLOBAL MARKETING ...... 17 UNIT 3. THE BASIC THEORIES OF WORLD TRADE: ABSOLUTE, COMPARATIVE, AND COMPETITIVE ADVANTAGE ...................................... 26 UNIT 4. BALANCE OF PAYMENTS .......................................... 37 UNIT 5. EXCHANGE RATES ..................................................... 45 UNIT 6. INTERNATIONAL AGENCIES FOR PROMOTING ECONOMIC AND MONETARY STABILITY ................. 55 UNIT 7. PROTECTIONISM AND TRADE RESTRICTIONS ...... 66 UNIT 8. ECONOMIC INTEGRATION AS A MEANS OF PROMOTING TRADE .................................................. 80 UNIT 9. GLOBAL MARKETING ENVIRONMENT TODAY ........ 86 UNIT 10. DECIDING WHETHER TO GO GLOBAL ..................... 98 UNIT 11. DECIDING HOW TO ENTER THE MARKET ............... 105 UNIT 12. DECIDING ON THE GLOBAL MARKETING PROGRAM ................................................................... 113 UNIT 13. UNDERSTANDING MARKETS AND BUYERS ........... 133 UNIT 14. SEGMENTING MARKETS ........................................... 143 UNIT 15. GLOBAL COMPETITORS ............................................ 151 UNIT 16. GLOBAL MARKETING RESEARCH ............................ 159 UNIT 17. THE RESEARCH PROCESS ....................................... 167 UNIT 18. MARKETING SERVICES GLOBALLY ......................... 177 UNIT 19. BRANDING DECISIONS .............................................. 187 UNIT 20. ORGANIZING FOR GLOBAL MARKETING ................ 197 3 CASE STUDIES 1. FLYING TO ARMENIA ............................................................. 208 2. BANANA WARS ....................................................................... 113 3. BANNING BARBIE ................................................................... 217 4. WORK VERSUS LEISURE ...................................................... 220 5. CUBA: REENTERING THE WORLD ....................................... 223 6.COKE UNDER FIRE.................................................................. 226 7. WHAT TEENS WANT............................................................... 229 8. QUESTIONABLE PAYMENTS ................................................. 231 9. PROCTER & GAMBLE TARGETS EMERGING MARKETS ... 234 10. UNHAPPY MARRIAGE .......................................................... 238 11. DEJA VU? ............................................................................... 241 12. LAUNCHING INTUITION........................................................ 244 13. CHASING PIRATES ............................................................... 246 14. THE PRICE OF COFFEE IN CHINA ...................................... 250 15. WHO'S TO BLAME? ............................................................... 252 16. ADVERTISING TO KIDS ........................................................ 255 TOPICS FOR DISCUSSION .................................................... 259 ABBRIVIATIONS ...................................................................... 268 GLOSSARY ............................................................................... 271 4 ՆԱԽԱԲԱՆ 5 6 UNIT 1. WHY GLOBAL MARKETING IS IMPERATIVE Marketing products and services around the world, transcending national and political boundaries, is a fascinating phenomenon. However, this phenomenon isn’t completely new. Products have been traded across borders throughout recorded civilization, extending back beyond the Silk Road that once connected East with West, and the recently excavated sea trade route between the Roman Empire and India that existed 2000 years ago. However, since the end of World War II, the world economy has experienced a spectacular growth rate never witnessed before in human history, primarily led by large U.S. companies in the 1950s and 1960s, then by European and Japanese companies in the 1970s and 1980s and most recently by new emerging market firms, such as Lenovo, Mittal Steel, and Cemex. In particular, competition coming recently from the so-called BRICS countries (Brazil, Russia, India, China, South Africa) has given the notion of global competition a touch of extra urgency and significance, that you see daily in print media such as the Wall Street Journal, Financial Times, as well as in TV media such as BBC, NBC, and CNN. Global marketing refers to the strategy for achieving one or more of four major categories of potential globalization benefits: cost reduction, improved quality of products and programs, enhanced customer preferences, and increased competitive advantage on a global basis. 7 The objective is to make you think beyond exporting and importing, as they constitute a relatively small proportion of international business. It doesn’t mean, however, that exporting and importing are not important. In 2006, the volume of world merchandise trade grew by 8%, while world gross domestic product recorded a 3.5% increase, which confirms that the trend in world merchandise trade grows by twice the annual growth rate of output since 2000. Total merchandise trade volume reached 16.3 trillion dollars, compared to 6 trillion dollars in 2000. We frequently hear terms such as global markets, global competition, global technologies, global competitiveness. In the past, we heard similar words with international or multinational instead of global attached to them. What has happened since the 1980s? Are these terms just fashionable concepts of the time without some deep meanings? Or has something inherently changed in our society? Saturation of Domestic Markets. First, and at the most fundamental level, the saturation of domestic markets in the industrialized parts of the world forced many companies to look for marketing opportunities beyond their national boundaries. The economic and population growths in developing countries also gave those companies an additional incentive to venture abroad. Now companies from emerging economies, such as Korea’s Samsung and Hyundai and Mexico’s Cemex and GrupoModelo, have made inroads into the developed markets around the world. The same logic applies equally 8 to companies from developed countries, such as Australia and New Zealand, geographically isolated from the other major industrialized parts of the world. Dome Coffees Australia is building a multinational coffee shop empire by expanding into Asia and the Middle East. Inevitably, the day will come when Starbucks from the U.S. and Dome Coffees from Australia will compete head-on for global dominance. Emerging Markets. During the twentieth century, the large economies and large trading partners were mostly located in the Triad Regions of the world (North America, Western Europe, and Japan), collectively producing over 80% of world gross domestic product (GDP) with only 20% of the World’s population. However, in the next 10 to 20 years, the greatest commercial opportunities are expected to be found increasingly in ten Big Emerging Markets (BEMs) – the Chinese Economic Area, India, Commonwealth of Independent States (Russia, Central Asia and Caucasus states), South Korea, Mexico, Brazil, Argentina, South Africa, Central European countries, Turkey, and the Association of Southeast Asian Nations (Indonesia, Brunei, Malaysia, Singapore, Thailand, the Philippines and Vietnam). Accordingly, an increasing number of competitors are expected to originate from those ten emerging economies. In the past 20 years, China’s real annual GDP growth rate has averaged 9.5% a year; while India’s has been 5.7%, compared to the average 3% GDP growth in the U.S.A. Clearly the milieu of the world economy has changed significantly and over the next two decades the markets that hold the greatest 9 potential for increases in U.S. exports are not the traditional trading partners in Europe, Canada and Japan, which now account for the overwhelming bulk of the international trade of the U.S.A. But they will be those BEMs and other developing countries that constitute some 80% of the “bottom of the pyramid”. As the traditional developed markets have become increasingly competitive, such emerging markets promise to offer better growth opportunities to many firms. Global Competition. We believe something profound has indeed happened in our view of competition around the world. About thirty years ago, the world’s greatest automobile manufacturers were General Motors, Ford, and Chrysler. Today, companies like Toyota, Honda, BMW, Renault, and Hyundai among others, stand out as competitive names in the global automobile market. Now with a 15% market share in the U.S.A., Toyota’s market share is larger than Ford’s 14%. In early 2008, Toyota surpassed General Motors to become the world’s largest automaker in terms of worldwide output. Similarly, while personal computers had been almost synonymous with IBM, which had previously dominated the PC business around the world, today, the computer market is crowded with Dell and Hewlett-Packard (HP) from the United States, Sony and Toshiba from Japan, Samsung from Korea, Acer from Taiwan and so on. Indeed, Lenovo, a personal computer company from China, acquired the IBM PC division in 2005, and now sells the ThinkPad series under the Lenovo brand. The deal not only puts Lenovo into third place in the industry, it also challenges 10 the world top players, Dell and HP. Nike is a US company with truly all-American shoe brand, but all its shoes are made in foreign countries and exported to many countries. Global Cooperation. Global competition also brings about global cooperation. This is most obvious in the information technology industry. IBM and Japan’s Fujitsu used to be archrivals. Beginning in 1982, they battled each other for fifteen years in such areas as software copying. But in October 2001, they developed a joint advance of software and mutual use of computer technology. IBM would share its PC server technology with Fujitsu and the Japanese company would supply routers to IBM. Japan’s Sony and Toshiba, and U.S. computer maker IBM are jointly developing advanced semiconductor processing technologies for nextgeneration chips. As part of the project, IBM transfers its latest technologies to Sony and Toshiba, and the partner companies each send engineers to IBM’s research centre in New York to work on the joint project. Similarly, in the automotive industry, in 1999 French carmaker Renault took a 36.8% stake in Japanese carmaker Nissan Motor Corp. The two companies began producing cars on joint platform in 2005. To help pave the way for that, in March, 2001 the two carmakers decided that they would combine their procurement operations in a joint-venture company that would eventually handle 70% of the company’s global purchasing. The joint venture is headquartered in Paris, with offices in Japan and the U.S.A. 11 Internet Revolution. The proliferation of the Internet and e-commerce is expanding. The number of Internet users in the world reached over 3 billion by December 2014, which amounts to almost six times that of 2000. Who could have anticipated the expansion of today’s ecommerce companies, including Amazon, eBay, and Yahoo in the U.S.A.; QXL Ricardo and Kelkoo in Europe; Rakuten and 7dream in Japan, and Baidu in China? The Internet opened the gates for companies to sell direct-toconsumers easily across national boundaries. Many argue that e-commerce is less intimate than face-to-face retail; however, it actually provides more targeted information. The Internet builds a platform for a two-way dialogue between manufacturers and consumers, allowing consumers to design and order their own products from the manufacturers. QUESTIONS FOR DISCUSSION 1. Why is international business much more complex today than it was twenty years ago? 2. What is the nature of global competition? 3. How is the Internet reshaping the nature of global marketing? 4. How is global marketing as a field related to your future career? 5. How would you expect to come into contact with global marketing activities? 12 VOCABULARY NOTES imperative անհետաձգելի, հրատապ, հրամայական transcend 1.սահմանն անցնել 2. գերազանցել, առաջ անցնել fascinating գրավիչ, հրապուրիչ phenomenon (հոգ. phenomena) երևույթ excavate փորել, փորել-հանել, բացահայտել spectacular տպավորիչ, գրավիչ, հրապուրիչ emerge երևան գալ, հայտնվել, առաջանալ in particular մասնավորապես, հատկապես significance կարևորություն, նշանակություն significant կարևոր, էական, նշանակալից significantly էականորեն, նկատելիորեն medium (հոգ. media) միջոց enhance մեծացնել, բարձրացնել, ուժեղացնել, բարելավել constitute կազմել, հիմնել, հաստատել, բաղադրիչ մաս լինել relative հարաբերական, համեմատական relatively համեմատաբար, հարաբերականորեն merchandise 1.ապրանք 2.վաճառավորում confirm 1.հաստատել, հավաստել 2.վավերացնել (պայմանագիրը) trend միտում, ընդհանուր ուղղություն, տենդենց annual տարեկան 13 fashionable նորաձև, նորատիպ, ժամանակի պահանջներին համապատասխան concept հասկացություն, գաղափար inherent(ly) հատուկ, ներհատուկ (ձևով) saturation հագեցում, հագեցվածություն incentive դրդապատճառ, շարժառիթ, խթան venture խիզախել, համարձակվել, փորձ անել, վտանգի /ռիսկի ենթարկել inroad 1.ներխուժում, հարձակում 2.(փոխաբերական) ոտնձգություն inevitable անխուսափելի inevitably անխուսափելիորեն head on գլխով, ուղիղ, զինված, ճակատային dominance տիրապետություն, գերիշխանոություն, ազդեցություն dominate իշխել, տիրել, triad եռյակ, երեք հոգուց (առարկայից) բաղկացած խումբ average միջին average միջինում լինել/կազմել, հավասարապես բաշխվել milieu (հոգ. milieu կամ milieus) միջավայր, շրջապատ account (for) կազմել (թիվ, քանակ) overwhelming անհամար, անհաշիվ, ճնշող bulk հիմնական մաս, մեծ մասը /չափը/ ծավալը/ զանգվածը 14 profound խորը, խորիմաստ, լրիվ, լիակատար, բացարձակ stand out առանձնանալ surpass գերազանցել, սպասածից ավելի լինել in terms of առումով, միջոցով be crowded 1.խռնվել, խմբվել 2.լեփ լեցուն լինել acquire ձեռք բերել, ստանալ, տիրանալ challenge 1.մարտահրավեր 2.բարդ խնդիր challenge հրավիրել մրցման, հավակնել, առարկել, վիճելի համարել archrival գերմրցակից, հակառակորդ battle մարտ, ճակատամարտ battle կռվել, պայքարել, մարտնչել joint միացյալ, համատեղ, ընդհանուր advance առաջխաղացում, առաջընթաց, զարգացում software (համակարգչի) ծրագրակազմ hardware (համակարգչի) սարքակազմ mutual փոխադարձ, երկկողմանի router (համակարգչի) երթուղղիչ semiconductor կիսահաղորդիչ process մշակել, մշակման ենթարկել chip չիփ/չիպ, մանրաշրջույթ stake 1.որևէ ձեռնարկության մեջ ներդրված կապիտալ 2.խաղագումար pave the way պայմաններ/ հող նախապատրաստել 15 procure հայթայթել, գտնել, ճարել procurement 1.հայթայթելը, ճարելը 2.գնում, մատակարարում eventual 1.վերջնական 2.հնարավոր eventually վերջիվերջո, վերջին հաշվով handle վարել, գործածել headquarter որպես կենտրոնական գրասենյակ ծառայել headquarters կենտրոնական գրասենյակ, գլխավոր վարչություն proliferation տարածում, արագ բազմացում/աճ anticipate ակնկալել, սպասել, նախատեսել expand ընդարձակ(վ)ել, ծավալ(վ)ել, ընդլայն(վ)ել expansion ընդարձակում, ծավալում, ընդլայնում intimate մոտիկ, մտերիմ, սերտ, ջերմ retail մանրածախ առևտուր wholesale մեծածախ առևտուր reshape ձևափոխել,հարմարեցնել 16 UNIT 2. THE DEVELOPMENT OF GLOBAL MARKETING The term global marketing has been in use only since the 1980s. Before that decade, international marketing was the term used most often to describe marketing activities outside one’s domestic market. Global marketing is not just a new label for an old phenomenon, however. Global marketing provides a new vision for international marketing. In order to understand global marketing, let us first look at the historical development of international marketing as a field in order to gain a better understanding of the phases through which it has passed. Domestic Marketing. Marketing that is aimed at a single market, the firm’s domestic market, is known as domestic marketing. In domestic marketing, the firm faces only one set of competitive, economic, and market issues. It essentially deals with only one set of national customers, although a company may serve several segments in this one market. Export Marketing. Export marketing covers activities that are involved when a firm sells its products outside its domestic base of operation and when products are physically shipped from one country to another. The major challenges of export marketing are the selection of appropriate markets or countries through marketing research, the determination of appropriate product modifications to meet the demand requirements of export 17 markets, and the development of export channels through which the company can market its products abroad. Although export marketing probably represents the most traditional and least complicated form of nondomestic marketing, it remains an important feature for many firms. International Marketing. A company that practices international marketing goes beyond exporting and becomes much more directly involved in the local marketing environment within a given country. The firm is likely to have its own sales subsidiaries and will participate and develop entire marketing strategies for foreign markets. Companies need to decide how to adjust an entire marketing strategy, including how they sell, advertise, and distribute products, in order to fit new market demands. Understanding different cultural, economic, and political environments becomes increasingly necessary for success. Table 1. ADAPTING TO NATIONAL DIFFERENCES Brazil: In Latin America, 25% of the population lives on less than $2 a day. Consumers often require smaller packages at lower prices. Sales of Nestle’s Bono cookies increased 40% in a single year when the company decreased the package size in Brazil from 200 grams to 149 grams. 18 China: Cadillacs sold in China provide more legroom for rearseat passengers because many wealthy Chinese ride in chauffeur-driven cars. Finland: Finland wants more vitamin D added to foods because Finns are exposed to less sunlight. This is one reason why cereal manufacturer Kellogg has to produce variations of its cornflakes and other cereals for the European market. France: Apples and pears require different labels across the EU. For example, in France labels on fruit must specify chemical treatments, preservation methods, and wax treatment – all in French of course! India: Disney sells school bags in India that are larger than those sold in the United States because Indian schools don’t have student lockers. Japan: The Japanese are said to be in love with the ephemeral. They like products that are here today but gone tomorrow. To tap into this cultural trait, Nestle offers limited edition candy for each season of the year. Mexico: To foster loyalty within its distribution system, Coca-Cola has offered life insurance to small retailers in Mexico. 19 Middle East: When Coty Inc. ran an ad aimed at the Middle East market for its Jennifer Lopez perfume, it placed the ad in the newly launched Middle East edition of Elle. But the ad only showed the singer’s face instead of her signature curvy silhouette that ran in the original ad. Multidomestic Marketing. The focus on multidomestic marketing came as a result of the development of the multinational corporation (MNC). These companies are characterized by extensive investments in assets abroad, and operate in a number of foreign countries as though they were local companies. For many years multinationals pursued a multidomestic strategy, wherein the multinational firm competes by applying many different strategies, each one tailored to a particular local market. The major challenge confronting the multidomestic marketer is to find the best possible adaptation of a complete marketing strategy to each individual country. Pan-Regional Marketing. Having tailored to a specific local environment, many countries have begun to emphasize strategies for larger regions. These regional strategies encompass a number of markets, such as panEuropean strategies for Europe, and have come about as a result of regional economic and political integration. 20 Such integration is also apparent in North America, where the United States, Canada, and Mexico have committed themselves to the far-reaching NAFTA trade pact. Global Marketing. Over the years, academics and international companies have become aware that opportunities are greater if firms can manage to integrate and create marketing strategies on a global scale. A multinational or a global marketing strategy involves the creation of a single strategy for a product, service, or company for the entire global market. It encompasses many countries simultaneously and is aimed at leveraging the commonalities across many markets. Instead of tailoring a strategy perfectly to any individual market, a firm that pursues global marketing settles on a basic strategy that can be applied throughout the world market, meanwhile maintaining flexibility to adapt to local market requirements where necessary. Thinking globally has its advantage. Global marketing can allow firms to offer better products and services at a lower cost, even when adapting for local market conditions. These lower costs can be passed on to customers in the form of lower prices. Thus, global marketers can use their increased profits to invest in product development or increase promotion. Global marketers can often move quicker than international marketers, introducing new products rapidly into many foreign markets. But firms that pursue global strategies must be adept at international marketing as well because designing a global strategy does not mean ignoring national differences. Instead, a global strategy 21 must reflect a sound understanding of the cultural, economic, and political environment of many countries. Few global marketing strategies can exist without tailoring, which is the hallmark of international and multidomestic marketing. Managing global marketing is the last in a series of skills that managers must acquire to be successful in the global marketing. QUESTIONS FOR DISCUSSION 1. How long has the term “global marketing” been in use and why did it come to substitute the term “international marketing”? 2. List all the stages marketing has gone through? 3. How is global marketing different from international marketing? 4. What does a global marketing strategy involve nowadays? 5. What do you think are the essential skills of a successful “global marketer”? 22 VOCABULARY NOTES vision 1.տեսլական 2.տեսադաշտ 3.մտահորիզոն phase փուլ ship փոխադրել, ուղարկել appropriate հարմար, պատեհ, պատշաճ, համապատասխան modification փոփոխություն, ձևափոխություն complicated բարդ, խճճված subsidiary մասնաճյուղ adjust կարգի բերել, կարգավորումներ անել, հարմարեցնել legroom ոտքերի տեղը մեքենայում rear seat ետևի նստատեղ մեքենայում chauffeur վարորդ cereal հացահատիկ, հացաբույս, հացազգի expose ազդեցության ենթարկել (լույսի, արևի) variation փոփոխություն, շեղում treat 1.վարվել, վերաբերմունք ցուցաբերել 2.համարել 3.բուժել 4.(այստեղ) մշակել մի բան treatment 1.վերաբերմունք 2.բուժում 3.մշակում, վերամշակում (քիմիական նյութերով) wax մոմ, մեղրամոմ preserve պահել, պաշտպանել, պահպանել preservation պահպանում, պահպանվածություն locker կողպվող պահարան 23 ephemeral մեկօրյա, անցողիկ tap (into) 1.(այստեղ) մուտք գործել 2.թեթև բախել trait նկարագիր, դիմագիծ, հատկանիշ edition 1.տարբերակ 2.հրատարակություն, տպաքանակ launch 1.հրապարակել 2.արձակել (հրթիռ) 3.ձեռնարկել, ծավալել curvy 1.ոլորապտույտ 2.շքեղ, հմայիչ (կնոջ կազմվածքի մասին) silhouette ստվերապատկեր, ուրվագիծ multidomestic marketing բազմազգ մարքեթինգ as though կարծես pursue 1.հետապնդել, հետամուտ լինել 2.վարել confront դեմ առ դեմ կանգնել, դիմակայել, դիմադրել (դժվարություններին) adapt 1.հարմարեցնել, համապատասխանեցնել 2.համակերպվել 3.փոփոխել adaptation 1.հարմարեցում 2.փոփոխվելը emphasis ընդգծում, շեշտ, շեշտադրություն emphasize շեշտել, ընդգծել, կարևորել encompass 1.շրջապատել 2.պարունակել, պարփակել 3.գործադրել apparent ակնհայտ, բացահայտ, երևացող integration միավորում, միացում commit 1.հանձնարարել 2.կատարել 24 commit oneself (to) իրեն վարկաբեկել, իր ուժերից վեր պարտավորություն վերցնել academic համալսարանում դասավանդող անձ, դասախոս, գիտությամբ զբաղվող scale 1.մասշտաբ, չափագիծ 2.սանդղակ simultaneously միաժամանակ commonality ընդհանրություն, ընդհանուր հատկանիշ maintain պահել, պահպանել flexible ճկուն, առաձգական flexibility 1.ճկունություն, առաձգականություն 2.զիջողականություն pass (on to) առաջ անցնել, հաջորդին հանձնել promote 1.առաջ մղել 2.գովազդել 3.պաշտոնը բարձրացնել promotion 1.առաջանցում, առաջմղում 2.խթան 3.առաջ քաշում (ծառայության մեջ) 4.առաջխաղացում rapid (ly) արագ/արագընթաց(որեն) adept (at) գիտակ, հմուտ, մասնագետ hallmark հարգ, հարգադրոշմ substitute փոխարինել essence էություն, գոյություն essential էական, հիմնական, կարևորագույն 25 UNIT 3. THE BASIC THEORIES OF WORLD TRADE: ABSOLUTE, COMPARATIVE, AND COMPETITIVE ADVANTAGE The past 25 years have witnessed not only a dramatic rise in the volume of trade but also numerous changes in its patterns. Countries that once exported vast amounts of steel, such as the United States, are now net importers of the metal. Other nations, such as India, once known for producing inexpensive handicrafts now compete globally in high-tech products. What caused these changes in trade patterns? Why do countries that are able to produce virtually any product choose to specialize in certain goods? Where do international cost advantages originate? As the 21st century continues, shall we still think of Indonesia and China as having the greatest advantage in handmade goods, or will they come to be like Japan and Taiwan are today? The early work of Adam Smith provides the foundation for understanding trade today. Smith saw trade as a way to promote efficiency because it fostered competition, led to specialization, and resulted in economies of scale. Specialization supports the concept of absolute advantage, that is, sell to other countries the goods that utilize your special skills and resources, and buy the rest from those who have some other advantage. This theory of selling what you are best at producing is known as absolute advantage. But what if you have no advantages? Will all your manufacturers be driven out of 26 business? David Ricardo in his 1817 work Principles of Political Economy, offered his theory of comparative advantage. This theory maintains that it is still possible to produce profitably what one is best at producing, even if someone else is better. The following passages develop the concepts of absolute and comparative advantage, the economic basis of free trade and hence of all global trade. Absolute Advantage. Productivity differences are the primary determinant of international trade. Take, for example, two countries – Vietnam and Germany. Suppose the average Vietnamese worker can produce either 400 machines or 1600 tons of tomatoes in one year. Over the same time period, the average German worker can produce either 500 machines or 500 tons of tomatoes (See Example 1 in Table 2). In this case, German workers can produce more machinery than Vietnamese workers can, whereas Vietnamese workers can produce more tomatoes than can their German counterparts. Having these figures, Vietnam is the obvious low-cost producer of tomatoes and should export them to Germany. Similarly, Germany is the low-cost producer of machines and should export them to Vietnam. Currently China has an absolute advantage in garlic production. Chinese farm labor receives $1 per day versus $5 in Mexico and $8.50 an hour in California. Garlic has a shelf life of up to 9 months and can be easily shipped. Not unexpectedly, the Californian producers have been devastated. 27 Table 2. ABSOLUTE VERSUS COMPARATIVE ADVANTAGE: WORKER PRODUCTIVITY EXAMPLES Example 1 VIETNAM GERMANY Yearly output per worker Machinery Tomatoes Absolute advantage 400 1600 tons Tomatoes 500 500 tons Machinery Example 2 Yearly output per worker Machinery 200 Tomatoes 800 tons Opportunity costs of 1 machine costs production 4 tons of tomatoes or 1 ton of tomatoes costs 0.25 machine Absolute advantage None Comparative advantage Tomatoes 500 1,000 tons 1 machine costs 2 tons of tomatoes or 1 ton of tomatoes costs 0.50 machine Tomatoes Machinery Machinery Comparative Advantage. We should not conclude from the previous examples that absolute differences in production capabilities are necessary for trade to occur. Consider the same two countries in the first example – Vietnam and Germany. Now assume that the average Vietnamese worker can produce either 200 machines or 28 800 tons of tomatoes each year, whereas the average German worker can produce either 500 machines or 1000 tons of tomatoes (See Example 2 in Table 2). Germany has an absolute advantage in both goods, and it appears that Vietnam will benefit from trade because it can buy from Germany cheaper goods than Vietnam can make for itself. Even here, however, the basis for mutually advantageous trade is present. The reason lies in the concept of comparative advantage. Comparative advantage measures a product’s cost of production not in monetary terms but in terms of the forgone opportunity to produce something else. It focuses on tradeoffs. To illustrate, the production of machines means that resources cannot be devoted to the production of tomatoes. In Germany, the worker who produces 500 machines will not be able to grow 1000 tons of tomatoes. The cost can be started as follows: each ton of tomatoes costs 0.5 machines, or 1 machine costs 2 tons of tomatoes. In Vietnam, producing 200 machines forces the sacrifice of 800 tons of tomatoes. Alternatively, this means that 1 ton of tomatoes costs 0.25 machines, or 1 machine costs 4 tons of tomatoes. From this example, we see that even though Vietnam has an absolute disadvantage in both commodities, it still has a comparative advantage in tomatoes. For Vietnam the cost of producing 1 ton of tomatoes is 0.25 machines, whereas for Germany the cost is 0.5 machine. Similarly, even though Germany has an advantage in both products, it has a comparative cost advantage only in machines. It costs Germany only 2 tons of tomatoes to produce a 29 single machine, whereas in Vietnam the cost is 4 tons of tomatoes. The last step in examining the concept of comparative advantage is to choose a mutually advantageous trading ratio and show how it can benefit both countries. Any trading ratio between 1 machine = 2 tons of tomatoes (Germany’s domestic trading ratio) and 1 machine = 4 tons of tomatoes (Vietnam’s domestic trading ratio) will benefit both nations. Table 3. MUTUALLY ADVANTAGEOUS TRADING RATIOS Tomatoes Germany, 1 ton of tomatoes=0.50 machines Germany, 1 machine=2 tons of tomatoes Machines Vietnam, 1 machine=4 tons of tomatoes Vietnam, 1 ton of tomatoes=0.25 machines Suppose we choose 1 machine = 3 tons of tomatoes. Because Germany will be exporting machinery, it gains by getting 3 tons of tomatoes rather than the 2 tons it would have produced domestically. Likewise, because Vietnam will be exporting tomatoes, it gains because 1 machine can be imported for the sacrifice of only 3 tons of tomatoes, rather than the 4 tons it would have to sacrifice if it made the machine in Vietnam. Our discussion of comparative advantage illustrates that 30 relative rather than absolute differences in productivity can form a determining basis for international trade. Although the concept of comparative advantage provides a powerful tool for explaining the rationale for mutually advantageous trade, it gives little insight into the source of the differences in relative productivity. Specifically, why does a country find its comparative advantage in one good or service rather than in another? Is it by chance that the United States is a net exporter of aircraft, machinery, and chemicals but a net importer of steel, textiles, and consumer electronic products? Or can we find some systematic explanations for this pattern? The notion of comparative advantage requires that nations make intensive use of those factors they possess in abundance – in particular, land, labor, natural resources, and capital. Thus Hungary, with its low labor cost of U.S. $1 per hour, will export labor-intensive goods, such as unsophisticated chest freezers and table linen, whereas Sweden, with its high-quality iron ore deposits, will export high-grade steel. Competitive Advantage. Some economists argue that even though the theory of comparative advantage has appeal, it is limited by its traditional focus on land, labor, natural resources, and capital. The study of ten trading nations that account for 50% of world exports and one hundred industries resulted in a new and expanded theory. This theory postulates that whether a country will have a significant impact on the competitive advantage of an industry depends on the following factors:  The elements of production 31  The nature of domestic demand  The presence of appropriate suppliers or related industries  The conditions in the country that govern how companies are created, organized, and managed, as well as the nature of domestic rivalry. Strong local competition often benefits a national industry in the global marketplace. Firms in a competitive environment are forced to produce quality products efficiently. Demanding consumers in the home market and pressing local needs can also stimulate firms to solve problems and develop proprietary knowledge before foreign competitors do. A good example of a country that enjoys a competitive advantage in digital products is South Korea. South Koreans are among the most “wired” people on earth. More than half of Korea’s households have broadband service, and more than 60% of Koreans own cell phones. 70% of share trades in the Korean securities are done online. Korean companies can use entire urban population in their home market as test markets for their latest digital ideas. This in turn gives these Korean companies an advantage when they want to export new products or know-how abroad. Similarly, Japan has a competitive advantage in energy conservation. With few domestic sources of energy, Japan has been at the forefront of designing manufacturing processes that consume the least amount of energy. When price of oil 32 rises, this gives Japan an advantage - especially compared with other Asian countries. According to famous American entrepreneur William Davidson, “Competitive advantage is achieved whenever you do something better than competitors. If that something is important to consumers, or if a number of small advantages can be combined, you have an exploitable competitive advantage. One or more competitive advantages are necessary too, in order to develop a winning strategy”. A nation’s competitive advantage can change over time. China was once known for ultra-cheap labor and a business environment relatively free of government regulation. Many believe those days are now over. Manufacturing costs are increasing in China, threatening the country’s previously successful export model that was based on low export prices. QUESTIONS FOR DISCUSSION 1. Suppose that Brazil can produce, with an equal amount of resources, either 100 units of steel or 10 computers. At the same time, Germany can produce either 150 units of steel or 10 computers. Explain which nation has a comparative advantage in the production of computers. Choose a mutually advantageous trading ratio and explain why this ratio increases the welfare of both nations. 33 2. Which are the main factors influencing a nation’s competitive advantage? 34 VOCABULARY NOTES dramatic 1.դրամատիկ, թատերական 2.շեշտակի, կտրուկ 3.հուզիչ, տպավորիչ pattern 1.օրինակ, նմուշ, ձև, մոդել 2.նկար vast 1.լայնարձակ, անսահման 2. մեծաթիվ, մեծաքանակ net 1.զուտ, մաքուր (ապրանքի քաշի, եկամտի մասին) 2.վերջնական, ամփոփիչ handicraft ձեռքի աշխատանք, արհեստ virtual փաստացի, իրական, իսկական virtually փաստորեն, իրապես, ըստ էության foster 1.խնամել, մեծացնել 2.նպաստել, խթանել, զարգացնել economy of scale մասշտաբային տնտեսություն utilize օգտագործել, գործածել, կիրառել, բանեցնել skill հմտություն, կարողություն, պատրաստության աստիճան counterpart 1.հակառակ կողմ, հակառակորդ 2.կրկնորդ, կրկնօրինակ labor 1.ֆիզիկական աշխատանք 2.բանվորական ուժ devastate 1.ավերել, ամայացնել 2.խորտակել, ջախջախել occur տեղի ունենալ, պատահել, կատարվել forgo 1.հրաժարվել, ետ կանգնել 2.խուսափել, զգուշանալ tradeoff փոխհատուցում 35 ratio benefit benefit rather հարաբերություն, հարաբերակցություն 1.օգուտ, շահ 2.նպաստ օգուտ քաղել, օգուտ բերել / տալ 1.ավելի շուտ, նախապատվորեն 2.բավականաչափ 3.որոշ չափով, փոքր ինչ 4. քան թե, քան rationale հիմունք, հիմնավորում, պատճառ insight խորաթափանցություն, ըմբռնում, բացահայտում possess տիրել, ունենալ possession սեփականություն, ունեցվածք, տիրելը abundance առատություն, լիություն sophisticated կատարելագործված, բարդ, նրբին (մեքենայի մասին) unsophisticated պարզ, հասարակ chest freezer փոքրիկ, վերևից բացվող սառնարան linen 1.քաթան, կտավ 2.սպիտակեղեն high-grade բարձրորակ appeal 1.դիմում, կոչ 2.խնդրանք, աղաչանք 3.գրավչություն, հմայք postulate առաջադրել impact 1.ազդեցություն, ներգործություն 2.հարված, զարկ rival մրցակից, ախոյան rivalry մրցակցություն, մրցապայքար proprietary սեփականություն կազմող, սեփականատիրական broadband լայնաշերտ, broadband servicesբազմաթիվ ծառայություններ digital թվային 36 urban rural know-how քաղաքային գյուղական ձեռնահասություն, փորձառություն, հմտություն conserve պահել, պահպանել, խնայողաբար օգտագործել conservation պահպանում, պահում forefront առջևի մաս, առաջավոր գիծ, գործունեության կենտրոն exploit շահագործել, օգտագործել exploitable օգտագործելի, շահագործելի ultra-cheap չափազանց էժան, չափից դուրս էժան threat սպառնալիք, վտանգ threaten սպառնալ, վախեցնել equal հավասար welfare բարեկեցություն, ապահովվածություն 37 UNIT 4. BALANCE OF PAYMENTS Newspapers, magazines, and TV news programs are filled with stories related to aspects of international business. Often media coverage centers on the implications of a nation’s trade deficit or surplus or on the economic consequences of an undervalued or overvalued currency. What are trade deficits? What factors will cause a currency’s international value to change? The first step in answering these questions is to gain a clear understanding of the contents and meaning of a nation’s balance of payments. The balance of payments (BOP) is an accounting record of the transactions between residents of one country and the residents of the rest of the world over a given period of time. Transactions in which domestic residents either purchase assets (goods or services) from abroad or reduce foreign liabilities are considered outflows of funds, because payments abroad must be made. Similarly, transactions in which domestic residents either sell assets to foreign residents or increase their liabilities to foreigners are inflows of funds, because payments from abroad are received. Listed in Table 4 are the principle parts of the balance-of-payments statement: the current account, the capital account, and the official transactions account. 38 Table 4. BALANCE OF PAYMENTS USES OF FUNDS SOURCES OF FUNDS Current Account 1. Goods Imports Exports 2. Services Imports Exports 3. Unilateral transfers Paid abroad From abroad 1. Short-term nvestments Made abroad From abroad 2. Long-term investments Made abroad From abroad Capital Account a. Portfolio investment b. Direct investment Official Transactions Account Official reserve changes Gained Lost There are three items under the current account. The goods category states the monetary values of a nation’s international transactions in physical goods. The services category shows the values of a wide range of transactions, such as transportation services, consulting, travel, passenger fares, fees, royalties, rent, and investment income. Finally, unilateral transfers include all transactions for which there is no quid pro quo. Private remittances, personal gifts, philanthropic donations, relief, and aid are included within this account. Unilateral transfers have less impact on the U.S. market but are important to markets elsewhere. For example, remittances from workers from abroad have fueled 39 demand for consumer products in many developing countries, such as Egypt, Mexico, and the Philippines. The capital account is divided into two parts on the basis of time. Short-term transactions refer to maturities less than or equal to one year, and long-term transactions refer to maturities longer than one year. Purchases of treasury bills, certificates of deposit, foreign exchange, and commercial paper are typical short-term investments. Long-term investments are separated further into investments and direct investments. In general, the purchaser of a portfolio investment holds no management control over the foreign investment. Debt securities, such as notes and bonds, are included under this heading. Foreign direct investments are long-term ownership interests, such as business capital outlays in foreign subsidiaries and branches. Stock purchases are included as well, but only if such ownership entails substantial control over the foreign company. Countries differ in the percentage of total outstanding stock an individual must hold in order for an investment to be considered a direct investment in the balance-of-payment statements. These values range from 10% to 25%. Because it is recorded in double-entry bookkeeping form, the balance of payments as a whole must always have its inflows (sources of funds) equal its outflows (uses of funds). Therefore, the concept of a deficit or surplus refers only to selected parts of the entire statement. A deficit occurs when the particular outflows (uses of funds) exceed the particular inflows (sources of 40 funds). A surplus occurs when the inflows considered exceed the corresponding outflows. In this sense, a nation’s surplus or deficit is similar to that of individuals or businesses. If we spend more than we earn, we are in a deficit position. If we earn more than we spend, we are running a surplus. The most widely used measure of a nation’s international payments position is the statement of balance on current account. It shows whether a nation is living within or beyond its means. Because this statement includes unilateral transfers, deficits (in the absence of government intervention) must be financed by international borrowing or by selling foreign investments. Therefore, the measure is considered to be a reflection of a nation’s financial claims on other countries. QUESTIONS FOR DISCUSSION How can you define: 1. a nation’s balance of payments, 2. a current account, 3. a capital account, 4. a portfolio investment 5. foreign direct investments? 41 VOCABULARY NOTES balance of payments վճարումների հաշվեկշիռ relate (to) վերաբերել, կապ/առնչություն ունենալ, կապված լինել (մի բանի հետ) aspect 1.տեսանկյուն, տեսակետ 2.մոտեցում 3. կողմ coverage 1.շրջանակներ, մասշտաբ, գործունեության ոլորտ 2.լուսաբանում 3.ապահովագրում, ապահովագրության չափ imply 1.ենթադրել, ակնարկել 2.նշանակել, բովանդակել implication 1.ենթադրություն 2.առնչություն 3.եզրակացություն, հետևանք 4.ներիմաստ, ենթատեքստ consequence հետևանք undervalue թերագնահատել overvalue գերագնահատել contents 1.ծավալ, տարողություն 2.բովանդակություն resident բնակիչ, մշտական բնակիչ transaction գործարք liability 1.պատասխանատվություն 2.liabilities պարտավորություններ, պարտք, պասիվներ outflow արտահոսք inflow ներհոսք 42 principle 1.սկզբունք, դրույթ 2.հիմք principle հիմնական, սկզբունքային statement 1.հաշվետվություն, զեկույց 2.հայտարարություն, պնդում, կարծիք unilateral միակողմանի portfolio investment փաթեթի/պորտֆելի ներդրում item 1.առարկա, միավոր (ցուցակի մեջ) 2.կետ, հոդված 3.հարց (օրակարգի) 4.նորություն, լուր (թերթում) range 1.սահման 2.շարք, քանակություն 3.դիապազոն, դիտահորիզոն fare տոմսի արժեք, ուղեվարձ fee վարձատրություն, հոնորար, հատուցում, վճարում royalty 1.հեղինակային պարտավճար/հոնորար, արտոնագրային իրավունքի վճար 2.երկրի ընդերքի մշակման համար տրվող վճար transfer 1.փոխադրություն, տեղափոխություն 2.փոխադրում, փոխանցում (փուլի) quid pro quo մեկ այլ բանի փոխարեն remit remittance 1.ուղարկել, առաքել, փոխադրել (փոստով) 2.նվազեցնել, թուլացնել (ջանքերը , լարվածությունը) 1.փոխադրում, առաքում (փողի) 2.փոխադրված փող, դրամական փոխանցում 43 philanthropic բարեգործական, մարդասիրական donate նվիրել, նվիրաբերել, շնորհել donation նվեր, նվիրատվություն, նվիրաբերում relief 1.թեթևացում, մեղմացում (ցավի) 2.օգնություն, նպաստ, օժանդակություն relieve 1.թեթևացնել, մեղմացնել, թուլացնել, նվազեցնել 2.օգնության հասնել, փրկել fuel վառելանյութ, վառելիք fuel 1.վառելիքով ապահովել 2.բորբոքել maturity 1.հասունություն 2.մուրհակի վճարման ժամկետ 3.ավարտվածություն treasury bill գանձապետական պարտատոմս debt securities պարտքային արժեթղթեր note մուրհակ bond պարտատոմս capital outlays հիմնական ծախսեր entail հետևանք ունենալ, հանգեցնել substantial էական, հիմնական, կարևոր, զգալի percentage տոկոս, տոկոսային հարաբերություն outstanding stock թողարկված և շրջանառության մեջ գտնվող արժեթուղթ, չվճարված բաժնետոմս double- entry երկակի գրանցում bookkeeping հաշվետարություն, հաշվապահություն exceed գերազանցել, գերակշռել within ներսում, ներսը, սահմաններում 44 beyond վեր, դուրս, այն կողմ means միջոց, միջոցներ intervene միջամտել intervention 1.միջամտություն 2.ներխուժում, զավթում reflect արտացոլել, անդրադարձնել reflection (նաև reflexion) արտացոլում, անդրադարձում claim 1.պահանջ, իրավապահանջ, հայց 2.պնդում 45 UNIT 5. EXCHANGE RATES The purchase of a foreign good or service can be thought of as involving two sequential transactions: the purchase of the foreign currency, followed by the purchase of the foreign item itself. If the cost of buying either the foreign currency or the foreign item rises, the price to the importer increases. A ratio that measures the value of one currency in terms of another currency is called an exchange rate. An exchange rate makes it possible to compare domestic and foreign prices. When a currency rises in value against another currency, it is said to appreciate. When it falls in value, it is said to depreciate. Therefore, a change in the value of the U.S. dollar exchange rate from 0.50 British pound to 0.65 British pound is an appreciation of the dollar and a depreciation of the pound. The dollar now buys more pounds, whereas a greater number of pounds must be spent to purchase 1 dollar. The Foreign Exchange Market. Foreign exchange transactions are handled on an over-the-counter market, largely by phone or on e-mail. Private and commercial customers as well as banks, brokers, and central banks conduct millions of transactions on the worldwide market daily. The foreign exchange market has a hierarchical structure. Private customers deal mainly with banks in the retail market, and banks stand ready either to buy or to sell foreign exchange as long as a free and active market for the currency exists. Banks that have foreign exchange 46 departments trade with private commercial customers on the retail market, but they also deal with other banks (domestic and foreign) and brokers on the wholesale market. Generally, these wholesale transactions are for amounts of U.S. $41 million or more. Not all banks participate directly in the foreign exchange market. Smaller banks may handle customers’ business through correspondent banks. Central banks play a key role in the foreign exchange markets because they are the ultimate controllers of domestic money supplies. When they enter the market to influence the exchange rate directly, they deal mainly with brokers and large money market banks. Their trading is done not to make a profit but to attain some macroeconomic goal, such as altering the exchange rate value, reducing inflation, or changing domestic interest rates. In general, even if central banks do not intervene in the foreign exchange markets, their actions influence exchange rate values because large increases in a nation’s money supply increase its inflation rate and lower the international value of the currency. Causes of Exchange Rate Movements. Exchange rates are the most closely watched and politically sensitive economic variables. Regardless of which way the rates move, some groups are hurt and other groups are helped. When a currency’s value rises, domestic businesses find it more difficult to compete internationally, and the domestic unemployment rate may rise. When the value of a currency falls, foreign goods become more expensive, the cost of living increases, and domestically 47 produced goods become cheaper to foreign buyers. What are the causes of these exchange rate movements, and to what extent can governments influence them? Most major currencies are freely floating. Their exchange rates are determined by the forces of supply and demand. Consumers in different countries can affect the supply and demand for these national currencies. An increase in a nation’s GDP gives consumers in that country the wherewithal to purchase more goods and services. Because many of the newly purchased goods are likely to be foreign, increases in GDP will raise their demand for foreign products and therefore raise the demand for foreign currency. Similarly, a relatively high inflation rate can shift consumer demand and weaken a currency. If the U.S. inflation rate exceeds that of Japan, then U.S. goods will become progressively more expensive than Japanese goods. Consequently, U.S. consumers will begin to demand more Japanese goods, thereby increasing the supply of dollars to the foreign exchange market while increasing the demand for Japanese yen. For the same reason, Japanese consumers will reduce their demand for dollars (that is, reduce their supply of yen) as they purchase fewer U.S. goods. Therefore, inflation in the United States will cause the international value of the dollar to fall and the value of other currencies to rise. Supply and demand for currencies are also affected by investors and speculators. If, for example, Japanese interest rates were greater than U.S. interest rates, then 48 investors would have an incentive to sell dollars and purchase yen in order to place their funds where they earned the highest return – in Japan. Speculators buy and sell currencies in anticipation of changing future values. If there were a widespread expectation that the Japanese yen would rise in value relative to the dollar, speculators would try to purchase yen now (that is, sell dollars) in anticipation of that change. Finally, governments affect foreign exchange markets in a variety of ways. Because governments exercise strong and direct control over domestic money supplies, their activities affect inflation rates and interest rates, which in turn, affect the exchange rates of their currencies. Managed Currencies. The foreign exchange market just described is not applicable to all currencies. Small, less developed countries often have currencies that attract global demand. No effective international markets develop for these soft currencies. Also, until recently, most foreign exchange rates in developing countries were set by the government. This is still true in many countries today. Managed currencies are usually pegged to the currency of a developed country that is a major trading partner. Many are pegged to the U.S. dollar. Some are pegged to a combination, or basket, of major currencies. The value of the local currency relative to the major currency is sometimes kept stable and sometimes allowed to fluctuate a few percentage points based on market demand. Pegged currencies are not immune to 49 the forces of supply and demand. Defending a peg from devaluation requires keeping a relatively strong demand for the local currency. Trying to defend a peg too long can result in sudden large devaluation in developing countries. For example, Venezuela experienced several years of depressed export earnings because of continued low prices on oil, its major export. The Venezuelan bolivar plunged against the U.S. dollar after the Venezuelan government relinquished a six-year-old system to keep the bolivar steady with the dollar. Even with the collapse of the bolivar, Venezuela experienced capital flight as people hurried to exchange bolivar for dollars. Although few currencies today are nonconvertible, Venezuela was forced to establish currency controls to restrict access to foreign exchange. This caused problems for foreign firms in the country such as General Motors, Ford, and Procter & Gamble. These firms waited months for the government to approve requests to change currency into U.S. dollars for purposes of paying foreign suppliers. Although it has evolved into a major currency in world trade, the Chinese yuan doesn’t trade freely but has been pegged primarily to the U.S. dollar by the Chinese government. Neighboring Asian countries have sometimes seen their currencies appreciate against weakening U.S. dollar. When this occurs, manufacturers in Korea, Thailand, and Taiwan have to decide whether to raise prices in the United States or cut into their already thin margins at home. This puts manufacturers in these 50 countries at a disadvantage compared with manufacturers in China, where the yuan remains more aligned to the dollar. For example, 30% to 40% of Korean exports compete directly with Chinese exports. Consequently, a major debate has emerged regarding managed and floating currencies. Is an exchange rate system in which currencies such as the Chinese yuan are pegged, but the euro and the yen float freely, the best way to balance the world’s trade and capital flows? QUESTIONS FOR DISCUSSION 1. Where are foreign exchange transactions handled? 2. Explain the structure of the foreign exchange market. 3. Why do central banks play a key role in the foreign exchange markets? 4. What can bring to changes in exchange rates? 5. What is a pegged currency? 51 VOCABULARY NOTES sequential 1.հաջորդական 2.որևէ բանից հետևող/բխող exchange rate փոխարժեք appreciate 1.գնահատել 2.բարձրացնել գինը 3.շնորհակալ /երախտապարտ լինել appreciation 1.գնահատում 2.գնի բարձրացում 3.արժևորում (դրամի) 4.երախտագիտություն depreciate 1.արժեզրկել, գինը գցել 2.թերագնահատել, նսեմացնել depreciation 1.արժեզրկում 2.մաշվածություն, մաշվածք 3.նսեմացում over-the-counter market արտաբորսայական շուկա worldwide համաշխարհային hierarchical ստորակարգային, աստիճանակարգային hierarchy ստորակարգություն, աստիճանականություն, հիերարխիա deal (with) գործ ունենալ, զբաղվել participate (in) մասնակցել, մասնակցություն ունենալ key գլխավոր, հիմնական ultimate 1.վերջին, վերջնական 2.առավելագույն, ծայրահեղ supplies 1.պաշար 2.մթերք supply 1.մատակարարում 2.առաջարկ 52 attain 1.հասնել, գալ 2.նվաճել, հաջողել, ձեռք բերել alter փոխ(վ)ել, փոփոխ(վ)ել sensitive զգայուն variable փոփոխական regardless ուշադրություն չդարձնելով, հաշվի չառնելով, անկախ to some extent ինչ-որ չափով float լողալ, տատանվել (արժույթի, փոխարժեքի մասին) affect ազդել, ներգործել, ներազդել wherewhital միջոցներ, փող shift 1.տեղաշարժել 2.փոխել, փոփոխել progressive առաջադիմական, առաջընթաց progressively աստիճանաբար thereby դրա շնորհիվ, դրա հետևանքով, այդ կապակցությամբ reduce 1.նվազեցնել, պակասեցնել 2.կրճատել (ծախսերը) reduction 1.նվազում, նվազեցում 2.կրճատում, իջեցում (գների) speculator վերավաճառող, շահախաղով զբաղվող return (n) 1.վերադարձ 2.եկամուտ, հասույթ, շահույթ anticipate 1.ակնկալել, սպասել, նախատեսել 2.կանխել, նախորդ լինել, առաջ անցնել 53 anticipation 1.ակնկալում, կանխազգացում 2.կանխում widespread լայնատարած, տարածված variety 1.բազմազանություն, զանազանություն 2.մի շարք, մեծ քանակություն exercise control վերահսկողություն սահմանել applicable հարմար, տեղին, կիրառելի, համապատասխան application 1.դիմում 2.կիրառություն, գործածում apply 1.դիմել, հայցել 2.կիրառել 3. ջանք գործադրել 4.մակերեսի վրա տարածել peg որոշակի մակարդակի վրա պահել (գինը , տոկոսադրույքը) fluctuate տատանվել, անկայուն լինել fluctuation տատանում, անկայունություն immune (to) անընկալունակ, պաշտպանված devaluation արժեզրկում depress 1.ճնշել, ընկճվել 2.թուլացնել, նվազեցնել 3.իջեցնել գները plunge 1.ընկնել, սուզվել 2.տհաճ դրության մեջ ընկնել /հայտնվել relinguish 1.թողնել, լքել, հրաժարվել 2.զիջել collapse փլուզում, կործանում, խորտակում, անկում flight թռիչք nonconvertible անփոխակերպելի 54 restrict 1.սահմանափակել 2.թույլ չտալ, արգելել restriction սահմանափակում access մուտք, մուտքի թույլտվություն approval հավանություն approve հավանություն տալ, հաստատել, համաձայնել request խնդրանք, պահանջ, պատվեր, հարցում evolve զարգանալ, ծավալվել, զարգացնել, հանգեցնել margin 1.տարբերություն (գնի և հաշվի) 2.նվազագույն քանակություն, ստորին սահման 3. շահույթի գնանցք 4. ավելցուկ (փողի, ժամանակի) 5.լուսանցք align 1.մի գծի վրա շարել 2.հավասարվել 3.համաձայնվել, համագործակցել 4.հարել, աջակցել debate քննարկում, բանավեճ 55 UNIT 6. INTERNATIONAL AGENCIES FOR PROMOTING ECONOMIC AND MONETARY STABILITY Stability in the international economy is a prerequisite for worldwide peace and prosperity. It was for this reason that at the end of World War II, representatives from several countries met at Bretton Woods, New Hampshire, and formed both the International Monetary Fund and the World Bank (the International Bank for Reconstruction and Development). With headquarters in Washington, DC, these two agencies continue to play major roles on the international scene. International Monetary Fund (IMF). The core mission of the International Monetary Fund (IMF) is to help stabilize an increasingly global economy. The IMF’s original goals were to promote orderly and stable foreign exchange markets, restore free convertibility among the currencies of member nations, reduce international impediments to trade, and provide assistance to countries that experienced temporary balance-of-payments deficits. Over the years, the IMF has shifted its focus from exchange rate relations among industrialized countries to the prevention of economic instability in developing countries and countries from the former Eastern European bloc. The Mexican economic crisis in 1994 prompted an unprecedented bailout of $47 billion and launched the recent trend of providing rescue packages to major economies in the developing world. In the past several years, the IMF approved a $19 billion rescue 56 package for Turkey and led a $17.2 billion rescue for Thailand, a $42 billion package for Indonesia, and a $41.5 billion deal for Brazil. South Korea got a whopping $58.4 billion when it was on the verge of bankruptcy. These rescue packages helped stabilize the respective economies and avoid total economic collapse of the countries involved. To qualify for assistance, the IMF may require that countries take drastic economic steps, such as reducing tariff barriers, privatizing state-owned enterprises, curbing domestic inflation, and cutting government expenditures. Although many nations have resented such intervention, banks worldwide have used the IMF as a screening device for their private loans to many developing countries. If countries qualify for IMF loans, they are considered for private credit. A growing world economy in the early 21st century resulted in fewer crises for the IMF to manage. Its loan portfolio fell to the lowest level since the 1980s, and its influence over countries and their economies diminished. Today the IMF has 186 members. Its accomplishments include sustaining a rapidly increasing volume of trade and investment and displaying flexibility in adapting to changes in international trade. To an extent, the IMF served as an international central bank to help countries during periods of temporary balance of payments difficulties, by protecting their rates of exchange. This helped countries avoid the placement of foreign exchange controls and other trade barriers. As time passed, it became evident that the IMF’s resources 57 for providing short-term accommodation to countries in monetary difficulties were not sufficient. To resolve the situation, and to reduce pressure on the U.S. dollar by countries holding dollar reserves, the fund created special drawing rights in 1969. Special drawing rights (SDRs) are special account entries on the IMF books designed to provide additional liquidity to support growing world trade. The value of SDRs is determined by a weighted average of a basket of four currencies: the U.S. dollar, the Japanese yen, the European Union’s euro, and the British pound. Although SDRs are a form of fiat money and not convertible to gold, their gold value is guaranteed, which helps to ensure their acceptability. World Bank. The World Bank (International Bank for Reconstruction and Development) acts as an intermediary between the private capital markets and the developing nations. It makes long-term loans (usually 15 or 25 years) carrying rates that reflect prevailing market conditions. The bank is able to borrow private funds at relatively low market rates and pass the savings along to the developing nations. However, because it must borrow to obtain capital and is not funded by members’ contributions, the World Bank must raise lending rates when its costs (that is, market interest rates) rise. When private funds were pouring into developing economies, some critics questioned the future role of the World Bank. However, a pan-Asian economic crisis caused the flow of private funds to developing countries to drop by more than $100 billion in 1998. The World Bank has expanded its role from mostly loans to partial 58 guarantees of government bonds for investment projects. In Thailand, the World Bank partially guaranteed the Electricity Generating Authority of Thailand. The guarantee attracted investors and spawned interest in similar programs in South Korea and the Philippines. In addition, the bank is encouraging governments to improve financial supervision and reduce red tape. Group of Seven. The world’s leading industrial nations have established a Group of Seven, which meets regularly to discuss the world economy. Finance ministers and central bank governors from the United States, Japan, Germany, France, Britain, Italy and Canada make up this group, which is often referred to as the G7. (When Russia joints the talks, the group calls itself the G8.) The members work together informally to help stabilize the world economy and reduce extreme disruptions. For example, the G7 developed proposals to reduce the debt of 33 impoverished nations, mostly in Africa, by 70%. The G8 agreed to help rebuild the Balkans, including Serbia if it continued to demonstrate a full commitment to economic and democratic reforms. European Monetary System. The European Union (EU) single currency, the euro, has replaced 16 national currencies in Europe. The countries comprising the euro zone are Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The European Central Bank (ECB) has control over the euro and is obliged to maintain price stability and avoid inflation and deflation. The changeover to the euro was 59 not easy, however. One study showed that a vending machine in France that dispensed coffee for two French francs could not charge the equivalent in euros. The conversion rate turned out to be 0.3049. The coffee could be repriced at 0.30 euro, causing the vendor to lose 1.5% of gross revenue. Alternatively, the vending machine could be expensively reconfigured to dribble out slightly less coffee. Nonetheless, supporters of the euro believed it would reduce transaction costs and foreign exchange risk within Europe and provide a strong viable currency alternative to the dollar. A report by 11 economists estimates that trade among the euro-zone members increased by 30% in the first years alone. Britain didn’t adopt the euro, and U.K. trade with the euro zone rose by only 13%. QUESTIONS FOR DISCUSSION 1. Which were the IMF’s original goals? 2. What may the IMF require to qualify a country for assistance? 3. How does the IMF help its 186 members? 4. What is the World Bank’s main function? 5. What other international agencies support the monetary stability in the world? 60 VOCABULARY NOTES prerequisite նախադրյալ, անհրաժեշտ պայման prosperity ծաղկում, բարգավաճում scene 1.գործողության վայր, ասպարեզ 2.տեսարան core ամենաէական orderly 1.կանոնավոր, կարգին 2.ճշտապահ, պարտաճանաչ restore վերականգնել, վերահաստատել, վերակառուցել convert փոխել, փոխարկել, փոփոխել, փոխակերպել convertibility փոփոխելիություն, փոխարկելիություն impediment խոչընդոտ, արգելք temporary ժամանակավոր shift 1.տեղափոխել 2.փոխել, փոփոխել prevent կանխել, առաջն առնել, խանգարել prevention կանխում, կանխելը bloc քաղաքական դաշինք prompt 1.դրդել, հրահրել, մղել 2.հուշել unprecendented աննախադեպ bailout ֆինանսական օգնություն ցուցաբերելը rescue փրկություն, ազատում package փաթեթ deal գործարք, համաձայնություն verge 1.ծայր 2.եզր, սահման 61 bankruptcy սնանկացում, սնանկություն, անվճարունակություն whopping հսկայական respective համապատասխան, յուրաքանչյուրը barrier 1.արգելք, խոչընդոտ 2.ուղեկալ, ուղեփակոց curb սանձել , սանձահարել expenditure ծախս(եր) resent վրդովվել, զայրանալ, բարկանալ, վիրավորվել screening device ցուցադրող սարք /հարմարանք/ միջոց qualify 1.որոշել, սահմանել, գնահատել 2.սահմանափակել qualify for որակվել, համարվել, բավարար համարվել consider 1.կշռադատել, խորհել 2.համարել, կարծել 3.քննարկել 4.հաշվի առնել consideration 1.քննարկում 2.նկատառում, կարծիք 3.ուշադրություն considerable զգալի, բավականաչափ, կարևոր, աչքի ընկնող considerably զգալիորեն loan փոխառություն diminish պակասե(ցնե)լ, նվազե(ցնե)լ accomplish 1.կատարել, իրագործել, վերջացնել 2.հաջողացնել, կարողանալ 62 accomplishment 1.կատարում, իրագործում 2.հաջողություն, ձեռքբերում volume ծավալ display ցուցադրել, ցուցաբերել, դրսևորել adapt հարմարեցնել, համապատասխանեցնել placement տեղադրում, տեղավորում evidence վկայություն, փաստ, ապացույց evident ակնհայտ, ակներև, հայտնի accommodation 1.փոխատվություն, պարտքի տրամադրում 2.բնակարան, սենյակ, 3.սենյակների տրամադրում sufficiency բավարար լինելը, բավարար քանակությամբ sufficient բավականաչափ, բավարար resolve վճռել, որոշել, որոշում ընդունել special drawing right հատուկ փոխառության իրավունք liquidity իրացվելիություն weighted average միջին թվաբանական fiat money չփոխարկվող թղթադրամ guarantee 1.երաշխավորել 2.ապահովել, 3.հաստատել ensure ապահովել, երաշխավորել acceptability մատչելիություն, ըմբռնելիություն, հեշտություն intermediary միջնորդ 63 prevail 1.գերակշռել, գերազանցել 2.տիրել, տարածված լինել pour թափել, ծորալ, լցնել pan-Asian համա-ասիական flow հոսք, հոսանք drop ընկնել, ցած ընկնել, կաթել, իջնել, պակասել expand 1.ընդարձակ(վ)ել, ծավալ(վ)ել, ընդլայն(վ)ել 2.զարգացնել (միտքը) expansion ընդարձակում, ծավալում, սփռում, տարածում partial մասնակի, ոչ լրիվ authority 1.իշխանություն 2.~ies իշխանություններ, իշխանական մարմիններ spawn 1.սերել, բազմանալ 2.առաջացնել 3.մեծ քանակությամբ աճել encourage 1.քաջալերել, խրախուսել 2.աջակցել, օգնել 3.դրդել, հրահրել supervision վերահսկում, վերահսկողություն red tape քաշքշուկ, ձևամոլություն, բյուրոկրատություն governor 1.կառավարիչ 2.նահանգապետ refer (to) հղել, վկայակոչել, հիշատակել, վերաբերել disruption տապալում, պառակտում 64 propose 1.առաջարկել, առաջարկություն անել 2.առաջադրել proposal առաջարկ, առաջարկություն impoverish 1.աղքատացնել 2.քայքայել, հյուծել impoverishment աղքատացում, թշվառացում commitment 1.հավատարմություն 2.պարտավորություն 3.խանդավառություն comprise 1. ընդգրկել 2.բովանդակել, պարունակել 3.կազմել obliged պարտավորված changeover փոփոխություն, անցում (մի համակարգից /իրավիճակից մյուսին) vend վաճառել, առևտուր անել vending machine ավտոմատ վաճառող սարք vendor վաճառող dispense բաշխել, բաժանել, հատկացնել equivalent համարժեք, համազոր conversion 1.փոխարկում, փոփոխում 2.պարտամուրհակի փոխանցում, վերահաշվարկ reprice վերագնահատել, նոր գին սահմանել reconfigure վերաձևավորել, նոր ձև տալ (հաղորդել) dribble կաթել, կաթկթել, ծորալ slight թույլ, աննշան, չնչին 65 nonetheless այնուամենայնիվ, այնուհանդերձ, բայց և այնպես support 1.պահել, հոգալ 2.քաջալերել, օժանդակել, աջակցել 3.ապացուցել, հաստատել supporter կողմնակից, հետևորդ, պաշտպան viable գործող, աշխատող, արդյունավետ estimate 1.գնահատել, գինը որոշել 2.մոտավոր հաշվարկել adopt 1.ընդունել, ճանաչել 2.որդեգրել original 1.նախնական, սկզբնական, բնօրինակ 2.ինքնատիպ, յուրօրինակ 66 UNIT 7. PROTECTIONISM AND TRADE RESTRICTIONS It is a fact of life that like virtually all changes, free trade creates both beneficiaries and victims. By increasing competition, free trade lowers the price of imported goods and raises the overseas demand for efficiently produced domestic goods. In these newly stimulated export industries, sales will increase, profits will rise, and stock prices will climb. Clearly, consumers of the imported good and producers of the exported good benefit from these new conditions. However, it is equally clear that other groups are harmed. Domestic producers of the import-competing goods are one of the most visible of such groups. They experience noticeable declines in market share, falling profits, and deteriorating stock prices. Herein lies the major reason for protectionist legislation. The victims of free trade are highly visible and their losses quantifiable. Governments use protectionism as a means of lessening the harm done to these easily identified groups. Conversely, the individuals who are helped by free trade tend to be dispersed throughout the nation rather than concentrated in a specific region. However, when too many citizens face economic hardship, governments reconsider protectionist measures. Despite an overall trend toward trade liberalization, protectionism rose in 2009 in response to a worldwide economic crisis. Large and small countries alike raised 67 taxes on imports, and national economic stimulus packages unabashedly favored national suppliers. Protectionist legislation tends to take the form of tariffs, quotas, or qualitative trade restrictions. Tariffs are taxes on goods moving across an economic or political boundary. They can be imposed on imports, exports, or goods in transit through a country on their way to some other destination. In the United States, export tariffs are constitutionally prohibited, but in other parts of the world they are quite common. Brazil taxes agricultural exports such as soybeans, and revenues from these export tariffs fund various social programs. Export tariffs may also be employed to assure that the local population has adequate supply at reasonable prices. Argentina temporarily banned beef exports to keep foreign demand from pushing up price within the country. The most common type of tariff is the import tariff. Import tariffs have a dual economic effect. First, they tend to raise the price of imported goods and thereby protect domestic industries from foreign competition. Second, they generate tax revenues for the governments imposing them. Regardless of what the goals are, tariffs may not be the most direct or effective means of attaining them. For example, foreign sellers may lower their prices to offset any tariff increase. The net effect is for the consumer-paid price to differ only slightly from the price before tariff was imposed. Consequently, the nation has greater tariff revenues but little additional protection for the domestic producers. 68 When tariffs do raise the price of an imported good, consumers are put at a disadvantage, whereas the import-competing industries are helped. However, tariffs can have wider implications. For example, when the U.S. Department of Commerce imposed a high duty on advanced flat screens used on laptop computers, the duty helped some small U.S. screen manufacturers. But it hurt computer companies such as Apple, Compaq, and IBM, who argued that the high duty inflated the cost of their products, undermined their ability to compete abroad, and would force them to shift production to other countries. Quotas are physical limits on the amount of goods that can be imported into a country. Unlike tariffs, which restrict trade by directly increasing prices, quotas increase prices by directly restricting trade. Naturally, to have such an effect, imports must be restricted to levels below the free-trade level. For domestic producers, quotas are a much surer means of protection. Once the limit has been reached, imports cease to enter the domestic market, regardless of whether foreign exporters lower their prices. Consumers have the most to lose with the imposition of quotas. Not only are their product choices limited and the prices increased, but the goods that foreign exporters choose to ship, often carry the highest profit margins. Restrictions on imported automobiles, for instance, result in the import of more luxury models with high-cost accessories. Because foreign producers are restricted in the number of cars they can sell, they seek the highest margin per car. 69 An orderly marketing arrangement or voluntary export restriction (VER) is an agreement between countries to share markets by limiting foreign export sales. As a rule, these arrangements have set duration and provide for some annual increase in foreign sales to the domestic market. The euphemistic terms are intended to give the impression of fairness. After all, who can be against anything that is orderly or voluntary? In fact they are really neither orderly nor voluntary. They are quotas in the guise of negotiated agreements. For example, the U.S. commerce Department reached an agreement whereby Russia would voluntarily limit its steel imports into the United States to 750,000 tons per year, compared with 3.5 million tons in the prior year. If Russia had not agreed to the limits, the Commerce Department was prepared to announce duties of 71 to 218% on Russian steel. At one time there were approximately 300 VERs worldwide, most protecting the United States and Europe. Today countries agree not to enact such agreements. However, exceptions can be granted to protect a single sector of a national economy. The final category of trade restrictions is perhaps the most problematic and certainly the least quantifiable. Nontariff barriers include a wide range of charges, requirements, and restrictions, such as surcharges at border crossing, licensing regulations, performance requirements, government subsidies, health and safety regulations, packaging and labeling regulations, and size 70 and weight requirements. Not all these barriers are discriminatory and protectionist. Restrictions dealing with public health and safety are certainly legitimate, but the line between social well-being and protection is a fine one. Sometimes, nontariff barriers can have considerable impact on foreign competition. For decades, West German authorities forbade the sale of beer in Germany unless it was brewed from barley malt, hops, yeast, and water. If any other additives were used – common practice elsewhere – German authorities denied foreign brewers the right to label their products as beer. The law was eventually struck down by the European Court of Justice. Because of the harmful effects of protectionism, which were most painfully felt during the Great Depression of the 1930s, 23 nations banded together in 1947 to form the General Agreement on Tariff and Trade (GATT). Over its life, GATT has been a major forum for the liberalization and promotion of nondiscriminatory international trade between participating nations. The principles of a world economy embodied in the articles of GATT are reciprocity, nondiscrimination, and transparency. The idea of reciprocity is simple. If one country lowers its tariffs against another’s exports, then it should expect the other country to do the same. Nondiscrimination means that one country should not give one member or group of members preferential treatment over other members of the group. This principle 71 is embodied in the most favored nation (MFN) status. MFN does not mean that one country is most favored, but rather that it receives no less favorable treatment than any other. Transparency refers to the GATT policy that nations make any trade restrictions overt, such as replacing nontariff barriers with tariffs. Through these principles, trade restrictions have been effectively reduced. Although its most notable gains have been in considerably reducing tariff and quota barriers on many goods, GATT has also helped to simplify and homogenize trade documentation procedures, discourage government subsidies, and curtail dumping (that is, selling abroad at a cost lower than the cost of production). The final act of GATT was to replace itself with the World Trade Organization (WTO) in 1996. The WTO continues to pursue reductions in tariffs on manufactured goods as well as liberalization of trade in agriculture and services. With 160 member countries in 2014, the WTO is the global watchdog for free trade. Even China became part of the WTO in 2001 after 14 years of negotiations concerning its vast semiplanned economy, with its formidable array of import quotas, trade licenses, and import inspections. Since its inception the WTO has established an agreement on tariff-free trade in information technology among 40 countries, as well as a financial services agreement that covers 95% of trade in banking and insurance. An agreement on intellectual property covering patents, trademarks, and copyrights has also been negotiated. 72 A major advantage that the WTO offers over GATT involves the resolution of disputes. Under GATT, any member could veto the outcome of a panel ruling on a dispute. WTO panels are stricter. They must report their decisions in nine months and can be overturned only by consensus. Countries that break the rules must pay compensation, mend their ways, or face trade sanctions. The use of quotas and voluntary export restrictions is declining with the strengthening of the WTO and with increased compliance by its member countries. Whereas GATT presided over 300 disputes over its lifetime (1947 1994), the WTO dealt with over 300 complaints in its first eight years. The WTO has not been used by the big countries solely to control the smaller ones, as some feared. Costa Rica, for example, asked the WTO to rule against American barriers to its export of men’s underwear. It won the case, and the United States was forced to change its import rules. QUESTIONS FOR DISCUSSION 1. How can you define a) tariffs, b) quotas, c) voluntary export restrictions? 2. What do nontariff barriers include? 3. What was GATT’s main objective? 4. What did the final act of GATT refer to? 5. Which is the WTO’s main advantage over GATT? 73 VOCABULARY NOTES protectionism հովանավորչություն, պաշտպանություն beneficiary շահառու, օգտվող անձ/կողմ victim զոհ overseas արտասահմանյան , արտաքին stimulate 1.խթանել 2.խրախուսել, քաջալերել, ոգևորել harm 1.վնասել, վնաս հասցնել 2.վատ անդրադառնալ, վատ ազդեցություն թողնել visible տեսանելի, նկատելի, նշմարելի experience կրել, տանել, ճաշակել, զգալ, ապրել experience փորձառություն, կյանքի փորձ, կենսափորձ noticeable 1.ակնառու, նկատելի 2.նշանակալից, ուշագրավ decline 1.պակասել, նվազել 2.հրաժարվել, մերժել deteriorate 1.վատանալ, վատթարանալ 2.վատացնել, վատթարացնել legislation օրենսդրություն quantifiable չափորոշելի identify 1.ճանաչել, ինքնությունը հաստատել 2.նույնացնել, նույնականացնել conversely ընդհակառակը, հակառակը overall 1.ընդհանուր, համընդհանուր 2.գումարային 74 response պատասխան, արձագանք, in response to ի պատասխան stimulus (հոգ. stimuli) խթան, շարժառիթ, դրդապատճառ, ազդակ unabashed(ly) չշփոթված, չվախեցած, անպատկառ (ձևով) favor 1.հավանություն տալ, նախընտրել 2.հովանավորել, օգնել , աջակցել tariff սակագին boundary սահման, սահմանագիծ impose 1.հարկել, հարկադրել, կիրարկել 2.հսկողություն սահմանել 3.օգուտ քաղել prohibit արգելել, թույլ չտալ soybean սոյա revenue եկամուտ, եկամտի աղբյուր fund 1.դրամավորել, ֆինանսավորել 2. արժեթղթերի վերածել assure հավաստիացնել, երաշխավորել, համոզել adequate բավարար, պատշաճ, համապատասխան temporarily ժամանակավորապես to ban(ned) արգելել, արգելք դնել dual երկակի, կրկնակի generate առաջացնել attain 1.հասնել, գալ 2.նվաճել, հաջողել, ձեռք բերել 1.փոխհատուցել 2.հավասարակշռել, հակակշռել offset 75 duty 1.մաքս, հարկ, տուրք 2.պարտք, պարտականություն inflate 1.գնաճ առաջացնել 2.գները բարձրացնել 3.ուռեցնել, մեծացնել, խոշորացնել undermine 1.վնասել, աստիճանաբար փչացնել/թուլացնել 2.քայքայել cease դադարել, դադարեցնել imposition 1.հարկ դնելը, հարկադրում 2.բեռ, հարկ quota մաս, բաժին, չափաբաժին, քվոտա luxury 1.շքեղություն, պերճանք 2.պերճանքի առարկա 3.մեծ բավականություն accessories պիտույք, լրապիտույք, լրացուցիչ հարմարանք seek 1.փնտրել 2.ջանալ, աշխատել, փորձել arrange 1.դասավորել 2.պայմանավորվել,նախապատրաստել 3.կարգավորել,հարթել arrangement 1.կարգի բերելը 2. նախապատրաստական աշխատանքներ, 3.պայմանավորվածություն 4.կարգավորում voluntary կամավոր, կամավորական, հոժարակամ duration տևողություն, ժամանակ, ընթացք euphemistic մեղմախոսական, մեղմասական guise արտաքին տեսք, կերպարանք prior նախորդող, նախորդ approximate մոտավոր 76 approximately մոտավորապես enact 1.սահմանել, հաստատել (օրենք) 2.իրագործել, գործածության մեջ դնել grant 1.դոտացիա վճարել 2.պարգևել, շնորհել 3.համաձայնվել 4.հնարավոր համարել surcharge 1.լրացուցիչ վճար, վերադիր ծախս 2.տույժ, տուգանք 3.գերածախս 4. գերբեռնվածություն subsidy նպաստ, դրամական օժանդակություն, լրավճար discriminatory 1.խտրական 2.կանխակալ, միտումնավոր 3.ընտրողական legitimate 1.օրինական, օրինականցված 2.ճիշտ, տրամաբանական well-being բարեկեցություն, բարօրություն forbid (forbade, forbidden) 1.արգելել, թույլ չտալ 2.խոչընդոտել brew 1.գարեջուր եփել 2.հասունանալ barley գարի malt ածիկ, մաստ (հացաբույսերի ծլեցրած, չորացրած հատիկներ) hop (բուսաբ) գայլուկ, հմուլ yeast թթխմոր, խմորիչ additive հավելանյութ, հավելում deny 1. հերքել, ժխտել 2.մերժել ինչ-որ բան, հրաժարվել ինչ-որ բանից 77 label պիտակավորել , պիտակել strike (struck, struck/stricken) down կասեցնել, ետ մղել painful(ly) ցավոտ (ձևով), ծանր(որեն), ճնշող(ձևով) band միավորվել, համախմբվել forum համաժողով, լայն ներկայացուցչական ժողով embody 1.մարմնավորել 2.իրականացնել, արտահայտել 3.ներառել, պարունակել transparancy թափանցիկություն preferential 1.գերադասելի 2.արտոնյալ (մաքսատուրքի մասին) overt բաց, բացահայտ notable նշանավոր, ականավոր, կարևոր, հիշարժան gain 1.շահույթ, օգուտ 2.աճ, ավելացում 3.gains եկամուտ homogenize համասեռ/միատարր դարձնել curtail 1.կրճատել, նվազեցնել, պակասեցնել 2.համառոտել, կարճացնել dumping 1.գնագցում, դեմփինգ 2.բեռնաթափում, դատարկում, թափում watchdog 1.պահապան շուն 2.դիտորդ, դիտորդական խումբ formidable 1.ահագին, հսկայական, ահռելի 2.դժվարին array շարք, խումբ 78 inception սկիզբ, սկզբնակետ trademark 1. առևտրանիշ, առևտրանշան 2.առանձնահատկություն patent արտոնագիր, վկայական copyright հեղինակային իրավունք veto վետո/արգելք դնել/կիրառել outcome արդյունք, հետևանք, ելք, վախճան panel 1.խորհուրդ, մասնագիտական խումբ 2.տախտակ 3. մեծ լուսանկար rule 1.ղեկավարել, կառավարել 2.իշխել, գերիշխել strict 1.խիստ, խստապահանջ 2.ճշգրիտ, ստույգ overturn 1.տապալում, կործանում, վայր գլորելը, պարտություն 2.հեղաշրջում consensus միաձայնություն, համաձայնություն, համերաշխություն compensation 1.փոխհատուցում, հատուցում 2.վարձատրություն mend the way բարելավել compliance 1.պատրաստակամություն 2.զիջողություն preside նախագահել, ղեկավարել complain գանգատվել, դժգոհություն արտահայտել, դժգոհել complaint գանգատ, դժգոհություն, բողոք 79 solely միմիայն, լոկ, սոսկ, բացարձակապես fear 1.վախենալ 2.մտահոգվել, անհանգստանալ 3.հրաժարվել, ետ կանգնել, 4.ափսոսալ, ցավել objective նպատակ, ձգտում 80 UNIT 8. ECONOMIC INTEGRATION AS A MEANS OF PROMOTING TRADE Another important issue facing the WTO is the spread of regional trading agreements. The WTO exempts members of regional trade agreements from the most MFN principle. In other words, the United States could extend Israel a lower tariff rate under a free-trade agreement that it would not have to extend to other countries under the MFN principle expected by WTO membership. Recently there has been a significant increase in the number of such agreements. There are nearly 250 regional agreements between countries granting preferential access to each other’s markets. Nearly all the members of the WTO belong to at least one regional pact. Some believe that the increase in these bilateral agreements will undermine the multilateral vision of the WTO. Although the degree of economic integration can vary considerably from one organization to another, four major types of integration can be identified : free- trade areas, custom unions, common markets, and monetary unions. Free-Trade Areas. The simplest form of integration is a free-trade area. The most famous is the North American Free Trade Association (NAFTA), which includes the United States, Canada, and Mexico. Within a free-trade area, nations agree to drop trade barriers among themselves, but each nation is permitted to maintain independent trade relations with countries 81 outside the group. Generally such areas do not permit resources (that is, labor and capital) to flow freely across national borders. Moreover, because each country has autonomy over its money supply, exchange rates can fluctuate relative to both member and nonmember countries. Despite the apparent simplicity of this form of economic integration, unexpected complications can arise. When NAFTA was being negotiated, U.S. business groups demanded that foreign investors be protected, noting that the Mexican government had a history of nationalizing U.S. assets. Consequently, arbitration procedures established by the World Bank ensure that governments in the United States, Mexico, and Canada will pay compensation to any foreign investor whose property is seized. Free-trade areas have been less successful among many developed countries. A case is the Asian Free Trade Area (AFTA). AFTA was envisaged to create a regional free-trade zone by slashing tariffs. However, the actual free trade has fallen. For example, Malaysia refused to remove protective tariffs for its auto industry. Furthermore, the association’s member countries represent widely disparate development levels, political institutions, and economic philosophies. Some countries are democracies, others military dictatorships. While trade within NAFTA grew by 17% in its first seven years, interregional trade in AFTA dropped 19% in the same amount of time. Some of the key problems that persist 82 are different product standards across countries and unpredictable policy implementation. Custom Unions, a more advanced form of economic integration, possess the characteristics of a free trade area but with the added feature of a common external tariff/trade barrier for the member nations. Individual countries relinquish the right to see trade agreements outside the group independently. Instead, a supranational policy-making committee makes these decisions. Common Market is the third level of economic integration. This arrangement has all the characteristics of a customs union, but the organization also encourages the free flow of resources (labor and capital) among the member nations. For example, if jobs are plentiful in Germany but scarce in Italy, workers can move from Italy to Germany without having to worry about severe immigration restrictions. In a common market, there is usually an attempt to coordinate tax codes, social welfare systems, and other legislation that influences resource allocation. Finally, although each nation still has the right to print and coin its own money, exchange rates among nations often are fixed or are permitted to fluctuate only within a narrow range. The most notable example of a common market is the European Union. The EU has been an active organization for trade liberalization and continues to increase its membership size. Monetary Union is the highest form of economic integration. A monetary union is a common market in 83 which member countries no longer regulate their own currencies. Rather, member-country currencies are replaced by a common currency regulated by a supranational central bank. With the passage of the Maastricht Treaty by EU members, the European Monetary System became the first monetary union in January 1999. QUESTIONS FOR DISCUSSION 1. Which are the four major types of integration that can be identified? 2. What complications may arise within NAFTA? 3. How can you define a) a custom union, b) common market, c) monetary union? 4. Will free trade widen the gap between rich and poor nations? Why or why not? 5. What makes regional integration more difficult for developing countries? 84 VOCABULARY NOTES issue 1. խնդիր, վիճելի հարց 2.հրատարակում 3.թողարկում 4.արդյունք, հետևանք face 1. դեմ առ դեմ կանգնել 2.համարձակություն ունենալ, զբաղվել 3.նայել, ուղղված լինել exempt ազատել հարկերից, պարտականություններից extend 1.երկարացնել, տարածել, ընդլայնել 2.տրամադրել, տալ, առաջարկել pact պայմանագիր, դաշինք, դաշնագիր, համաձայնագիր bilateral երկկողմանի multilateral բազմակողմանի moreover դեռ ավելին, բացի այդ autonomy 1.ինքնավարություն 2. անկախություն, ինքնուրույնություն complication բարդացում, բարդություն, խճճում arbitration իրավարարություն, միջնորդ դատարան procedure ընթացակարգ, արարողակարգ, գործելակերպ seize 1.բռնել, ճանկել 2.նվաճել, գրավել envisage 1.խորհել, մտորել 2.կանխատեսել 3.պատկերացնել, երևակայել slash 1.թրատել, շերտատել 2.կտրել, հնձել remove 1.հեռացնել 2.վերացնել 3.մաքրել 85 furthermore բացի այդ, ավելին disparate անհամեմատելի, անհամատեղելի, անհարիր dictatorship բռնապետություն persist 1.համառել 2.դիմանալ, պահպանվել unpredictable անկանխատեսելի supranational վերազգային plentiful առատ, լիուլի, հարուստ severe խիստ, դաժան, անողոք attempt փորձ, ձեռնարկում liberalization ազատականացում, սահմանափակումների վերացում membership 1.անդամություն, անդամակցություն 2.անդամների թիվը passage 1.անցում 2.հաստատում, հաստատելը 3.միջանցք 4.հատված (գրքից) treaty միջազգային պայմանագիր, դաշնագիր gap 1.բացվածք, ճեղք 2.բաց, պակասություն, թերություն 86 UNIT 9. GLOBAL MARKETING ENVIRONMENT TODAY The world is shrinking rapidly with the advent of faster communication, transportation, and financial flows. Products developed in one country – Gucci purses, Sony electronics, McDonald’s hamburgers, Japanese sushi, German BMWs – have found enthusiastic acceptance in other countries. It would not be surprising to hear about a German businessman wearing an Italian suit, meeting an English friend at a Japanese restaurant who later returns home to drink Russian vodka and watch Dancing with the Stars on TV. International trade has boomed over the past three decades. Since 1990, the number of multinational corporations in the world has grown from 30,000 to more than 63,000. Some of these multinationals are true giants. In fact, of the largest 150 “economies” in the world, only 81 are countries. The remaining 69 are multinational corporations. Walmart, the world’s largest company, has annual revenues greater than the GDP of all but the world’s 21 largest countries. Many U.S. companies have long been successful at international marketing: McDonald’s, Coca-Cola, IBM, Colgate, Boeing, and dozens of other American firms have made the world their market. In the United States, such names as Sony, Toyota, Nestle`, IKEA, Canon, and Nokia have become household words. But as global trade grows, global competition is also intensifying. Foreign 87 firms are expanding aggressively into new international markets, and home markets are no longer as rich in opportunity. Few industries are now safe from foreign competition. If companies delay taking steps toward internationalizing, they risk being shut out of growing markets in Western and Eastern Europe, China and the Pacific Rim, Russia, India, and elsewhere. Ironically, although the need for companies to go abroad is greater today than in the past, so are the risks. Companies that go global may face highly unstable governments and currencies, restrictive government policies and regulations, and high trade barriers. The recently dampened global economic environment has also created big global challenges. And corruption is an increasing problem; officials in several countries often award business not to the best bidder but to the highest briber. Before deciding whether to operate internationally, a company must understand the international marketing environment. That environment has changed a great deal in the past two decades, creating both new opportunities and new problems as each nation has unique features that must be understood. A nation’s readiness for different products and services and its attractiveness as a market to foreign firms depend on its economic, politicallegal, and cultural environments. Economic Environment. The international marketer must study each country’s economy. Two economic factors reflect the country’s attractiveness as a market: its industrial structure and its income distribution. The country’s industrial structure shapes its product and 88 service needs, income levels, and unemployment levels. The four types of industrial structures are as follows:  Subsistence economies: In a subsistence economy, the vast majority of people engage in simple agriculture. They consume most of their output and barter the rest for simple goods and services. They offer few market opportunities.  Raw material exporting economies: These economies are rich in one or more natural resources but poor in other ways. Much of their revenue comes from exporting these resources. Some examples are Chile (tin and copper), Congo (copper, cobalt, and coffee), and Saudi Arabia (oil). These countries are good markets for large equipment, tools, and trucks. If there are many foreign residents and a wealthy upper class, they are also a good market for luxury goods.  Emerging economies (industrializing economies): In an emerging economy, fast growth in manufacturing results in rapid overall economic growth. Examples include the BRIC countries – Brazil, Russia, India, and China. As manufacturing increases, the country needs more imports of raw textile materials, steel, and heavy machinery, and fewer imports of finished textiles, paper products, and automobiles. Industrialization typically creates a new rich class and a small but growing middle class, both demanding new types of imported goods. 89  Industrial economies: Industrial economies are major exporters of manufactured goods, services, and investment funds. They trade goods among themselves and also export them to other types of economies for raw materials and semifinished goods. The varied manufacturing activities of these industrial nations and their large middle class make them rich markets for all sorts of goods. Examples are the USA, Japan, and Norway. The second economic factor is the country’s income distribution. Industrialized nations may have low-, medium-, and high-income households. In contrast, countries with subsistence economies consist mostly of households with very low family incomes. Still other countries may have households with only either very low or very high incomes. Even poor or emerging economies may be attractive markets for all kinds of goods. These days, companies in a wide range of industries – from cars to computers, to candy – are increasingly targeting even low- and middle-income consumers in emerging economies. For example, in India, Ford recently introduced a new model targeted to consumers who are only now able to afford their first car. Political-Legal Environment. Nations differ greatly in their political-legal environments. In considering whether to do business in a given country, a company should consider factors such as the country’s attitudes toward international buying, government bureaucracy, political stability, and monetary regulations. Some nations are 90 very receptive to foreign firms; others are less accommodating. For example, India has tended to bother foreign businesses with import quotas, currency restrictions, and other limitations that make operating there a challenge. In contrast, neighboring Asian countries, such as Singapore and Thailand, court foreign investors and shower them with incentives and favorable operating conditions. Political and regulatory stability is another issue. For example, Venezuela’s government is notoriously volatile – due to economic factors such as inflation and steep public spending – which increases the risk of doing business there. Although most international marketers still find the Venezuelan market attractive, the unstable political and regulatory situation will affect how they handle business and financial matters. Companies must also consider a country’s monetary regulations. Sellers want to take their profit in a currency of value to them. Ideally, the buyer can pay in the seller’s currency or in other world currency. Sellers even might accept a blocked currency – one whose removal from the country is restricted by the buyer’s government – if they can buy other goods in that country that they need themselves or can sell elsewhere for a needed currency. In addition to currency limits, a changing exchange rate also creates high risk for the seller. Cultural Environment. Each country has its own folkways, norms, and taboos. When designing global marketing strategies, companies must understand how culture affects customer reactions in each of its world 91 markets. In turn, they must also understand how their strategies affect local cultures. Sellers must understand the ways that consumers in different countries think about and use certain products before planning a marketing program. There are often surprises. For example, the average French man uses almost twice as many cosmetics and grooming aids as his wife. The Germans and the French eat more packaged, branded spaghetti than Italians do. Some 49% of Chinese eat on the way to work. Most American women let down their hair and take off makeup at bedtime, whereas 15% of Chinese women style their hair at bedtime and 11% put on makeup. Companies that ignore cultural norms and differences can make some very expensive and embarrassing mistakes. For example, Burger King made a mistake when it created in-store ads in Spain showing Hindi goddess Lakshmi atop a ham sandwich with the caption “a snack that is sacred”. Cultural and religious groups worldwide objected strenuously – Hindus are vegetarian. Burger King apologized and pulled the ads. Business norms and behavior also vary from country to country. For example, American executives like to get right down to business and engage in fast and tough face-to-face bargaining. However, Japanese and other Asian businesspeople often find this behavior offensive. They prefer to start with polite conversation, and they rarely say no in face-to-face conversations. As another example, South Americans like to sit or stand very close to each other when they talk business – in fact, nose-to-nose. An American business executive tends to 92 keep backing away as the South American moves closer. Both may end up being offended. American business executives need to understand these kinds of cultural nuances before conducting business in another country. Thus, understanding cultural traditions, preferences, and behaviors can help companies not only avoid embarrassing mistakes but also take advantage of crosscultural opportunities. The Impact of Marketing Strategy on Cultures. Whereas marketers worry about the impact of culture on their global marketing strategies, others may worry about the impact of marketing strategies on global cultures. There are now as many people studying English in China as there are people in the United States. Seven of the most watched TV shows around the world are American, Avatar is the top-grossing film of all time in China, and the world is as fixated on U.S. brands as ever. For example social critics contend that large American multinationals, such as McDonald’s, Coca-Cola, Starbucks, Nike, Microsoft, Disney, and MTV, aren’t just “globalizing” their brands; they are “Americanizing” the world’s cultures. “Today, globalization often wears Mickey Mouse ears, eats Big Macs, drinks Coke or Pepsi, and does its computing with Windows,” says Thomas Friedman, in his book The Lexus and the Olive Tree: Understanding Globalization. Critics worry that, under such “McDomination”, countries around the globe are losing their individual cultural identities. Teens in India watch MTV and ask their parents for more westernized clothes and other symbols of American pop culture and values. 93 Similarly, in China, where McDonald’s operates more than 80 restaurants in Beijing alone, nearly half of all children identify the chain as a domestic brand. Thus, globalization is a two-way street. If globalization has Mickey Mouse ears, it is also wearing a French beret, talking on a Nokia cell phone, buying furniture at IKEA, driving a Toyota Camry, and watching a Samsung plasma TV. QUESTIONS FOR DISCUSSION 1. What difficulties may companies going global face? 2. Which are the two economic factors reflecting the country’s attractiveness as a market? 3. How can you define the four types of industrial structures: a) subsistence economies, b) raw material exporting economies, c) emerging economies, d)industrial economies? 4. What factors shape the political-legal environment in a given country? 5. How can cultural environment affect customer reactions? 6. What impact does marketing strategy have on culture? 94 VOCABULARY NOTES environment շրջապատ, միջավայր, շրջակա միջավայր shrink կարճանալ, նեղանալ, կծկվել advent մուտք, ժամանում, գալը, գալուստ enthusiastic խանդավառ, եռանդուն, ոգևորված acceptance ընդունում, ընդունելիություն boom մեծ հաջողություն/պահանջարկ ունենալ giant հսկա, վիթխարի household տնային, կենցաղային intensify 1.ուժեղացնել, սաստկացնել 2.ուժեղանալ, սաստկանալ aggressively 1.վճռականորեն 2.նախահարձակ կերպով delay 1.դանդաղեցնել, կասեցնել, հետաձգել, ուշացնել 2.դանդաղել, ուշանալ shut out արգելել, թույլ չտալ Pacific Rim Խաղաղ օվկիանոսյան ավազանի երկրներ ironically հեգնաբար, հեգնորեն dampen 1.մարել, մեղմել 2.խոնավացնել, խոնավանալ corruption 1.կաշառակերություն 2.անբարոյականություն, այլասերվածություն official պաշտոնյա, ծառայող (պետական) briber կաշառք տվող, կաշառող 95 unique եզակի, միակ, անզուգական, յուրահատուկ feature առանձնահատկություն, հատկություն readiness պատրաստակամություն, սիրահոժարություն attractiveness գրավչություն, հմայք, ձգող ուժ subsistence economies բնատնտեսությամբ երկրներ barter ապրանքափոխանակություն barter ապրանքափոխանակում կատարել vast 1.հսկայական, շատ մեծ, անսահման 2.լայն, ընդարձակ majority մեծամասնություն tin 1.անագ 2.թիթեղ copper պղինձ emerging economies զարգացող տնտեսություններ varied տարբեր, զանազան, բազմազան target 1.թիրախ դարձնել, նշան բռնել, նպատակակետ դարձնել 2. ուղղել (ինչոր) նպատակի afford 1.ի վիճակի լինել, իրեն թույլ տալ 2.հնարավորություն ընձեռել, տրամադրել receptive ընկալունակ, ըմբռնելու ընդունակ accommodating 1.նպաստող, օգնող 2.օթևան տվող 3. հարմարվող 96 court 1.սիրատածել, մեկի բարեհաճությանը ձգտել 2.հրապուրել shower 1.վրան տեղալ/լցնել 2.հորդառատ անձրևել notorious(ly) վատահամբավ, տխրահռչակ, անուղղելի (ձևով) volatile փոփոխամիտ, անկայուն steep 1.չափազանց բարձր 2.շեշտակի, ուղղաձիգ, զառիթափ handle վարել, գործ ունենալ removal 1.հեռացում, հեռացնելը 2.վերացում folkways ժողովրդական ավանդույթ/կենսակերպ taboo տաբու, հպարգելք design 1.նախագծել, ծրագրել 2. մտադրվել, նախատեսել average 1.միջին 2.սովորական grooming aids խնամքի պարագաներ branded դրոշմված, ապրանքանիշ դրված, բրենդավորված makeup շպար, գրիմ ignore 1.անտեսել, հաշվի չառնել 2.մերժել, չընդունել (հարցը, բողոքը) embarrass շփոթեցնել, շփոթության մեջ գցել in-store խանութի ներսի atop դեպի վեր, վերևում goddess աստվածուհի 97 caption ենթագիր/տիտր sacred 1.սուրբ, սրբազան 2.հոգևոր, ոչ աշխարհիկ 3.անձեռնմխելի object 1.առարկել, դեմ լինել, ընդդիմախոսել 2.չկարողանալ հանդուրժել strenuously եռանդուն կերպով, աշխուժորեն, ջերմեռանդորեն vegetarian բուսակեր executive 1.ղեկավար 2.գործադիր իշխանություն/մարմին tough 1.հաստատակամ,ինքնավստահ 2.դժվար, դժվարին, ծանր 3.դիմացկուն, ամուր bargaining սակարկելը, համաձայնության գալը offensive 1.վիրավորական 2.տհաճ, անհաջող nuance երանգ, նրբերանգ cross-cultural միջմշակութային top-grossing ամենաեկամտաբեր fixated սևեռված, կլանված, համակված contend 1.պնդել, հաստատել 2.վիճել, առարկել 3.պայքարել, մրցել identity 1.նույնություն 2.իսկություն 3.ինքնություն, անհատականություն 98 UNIT 10. DECIDING WHETHER TO GO GLOBAL Not all companies need to venture into international markets to survive. For example, most local businesses need to market well only in their local market. Operating domestically is easier and safer. Managers don’t need to learn another country’s language and laws. They don’t have to deal with unstable currencies, face political and legal uncertainties, or redesign their products to suit different customer expectations. However, companies that operate in global industries, where their strategic positions in specific markets are affected strongly by their overall global positions, must compete on a regional or worldwide basis to succeed. Any of several factors might draw a company into the international arena. Global competitors might attack the company’s home market by offering better products or lower prices. The company might want to counterattack these competitors in their home markets to tie up their resources. The company’s customers might be expanding abroad and require international servicing. Or, most likely, international markets might simply provide better opportunities for growth. For example, Coca-Cola has emphasized international growth in recent years to offset stagnant or declining U.S. soft drink sales. “It’s been apparent that Coke’s signature cola can’t grow much on its home turf anymore,” states an industry analyst. Today, about 80% of Coke’s profits come from outside North America. 99 Before going abroad, the company must weigh several risks and answer many questions about its ability to operate globally. Can the company learn to understand the preferences and buyer behavior of consumers in other countries? Can it offer competitively attractive products? Will it be able to adapt to other countries’ business cultures and deal effectively with foreign nationals? Do the company’s managers have the necessary international experience? Has management considered the impact of regulations and the political environments of other countries? Before going abroad, the company should try to define its international marketing objectives and policies. It should decide what volume of foreign sales it wants. Most companies start small when they go abroad. Some plan to stay small, seeing international sales as a small part of their business. The company also needs to choose in how many countries it wants to market. Companies must be careful not to spread themselves too thin or expand beyond their capabilities by operating in too many countries too soon. Next, the company needs to decide on the types of countries to enter. A company’s attractiveness depends on the product, geographical factors, income and population, political climate, and other factors. The seller may prefer certain country groups or parts of the world. In recent years many major new markets have emerged, offering both substantial opportunities and daunting challenges. After listing possible international markets, the company must carefully evaluate each one. It must 100 consider many factors. For example, P&G’s decision to enter the Chinese toothpaste market with its Crest is nobrainer: China’s huge population makes it the world’s largest toothpaste market. And given that only 20% of China’s rural dwellers now brush daily, this already huge market can grow even larger. Yet P&G must still question whether market size alone is reason enough for investing heavily in China. P&G should ask some important questions. Can Crest compete effectively with dozens of local competitors, Colgate, and a state-owned brand managed by Unilever? Will the Chinese government remain stable and supportive? Does China provide for the needed production and distribution technologies? Can the company master China’s vastly different cultural and buying differences? Crest’s current success in China suggests that it can answer yes to every question. “Just ten years ago, P&G’s Crest brand was unknown to China’s population, most of whom seldom – if ever – brushed their teeth”, says one analyst. “Now P&G sells more tubes of toothpaste there than it does in America, where Crest has been on store shelves for 52 years”. P&G achieved this by sending researchers to get a feel for what urban and rural Chinese were willing to spend and what flavors they preferred. These researchers discovered that urban Chinese are happy to pay more than $1 for tubes of Crest with exotic flavors such as Icy Mountain Spring and Morning Lotus Fragrance. But Chinese living in the countryside prefer the 50-cent Crest Salt White because many rural Chinese 101 believe that salt whitens teeth. Armed with such insights, Crest now leads all competitors in China with a 25% market share. Some users even believe it’s a Chinese brand. P&G hopes to find similar success in other emerging markets across its entire product mix. Such markets now account for 30% of the company’s total sales. Table 5. INDICATORS OF MARKET POTENTIAL Demographic Characteristics Education Population size and growth Population age composition Geographic Characteristics Climate Country size Population density – urban Transportation structure and market accessibility Socio-cultural Factors Consumer lifestyles,beliefs, values Business norms and approaches Cultural and social norms Languages Political and Legal Factors National priorities Political stability Government attitudes toward global trade Government bureaucracy Monetary and trade regulations Economic Factors GDP size and growth Income distribution Industrial infrastructure Natural resources Financial and human resources 102 Possible global markets should be ranked on several factors, including market size, market growth, the cost of doing business, competitive advantage, and risk level. The goal is to determine the potential of each market, using indicators such as those shown in Table 5. Then the marketer must decide which markets offer the greatest long-run return on investment. QUESTIONS FOR DISCUSSION 1. Why is operating domestically easier and safer? 2. When can a company be drawn into the international arena? 3. What issues must a company consider before going global? 4. What questions should P&G answer before investing in China? 5. Which indicators determine the potential of each market? 103 VOCABULARY NOTES venture 1.խիզախել 2. համարձակվել 3.վտանգի/ռիսկի ենթարկվել survival 1.կենդանի մնալը, գոյատևում 2.մնացորդ, վերապրուկ survive կենդանի մնալ, ապրել, գոյատևել, փրկվել market 1.շուկայավարել, գովազդել 2.շուկայահանել, վաճառքի դնել 3.առևտուր անել uncertainty 1.անհամոզվածություն, տարակուսանք 2.անորոշություն counterattack հակագրոհել, հակահարձակման անցնել tie up միանալ, համախմբվել most likely ամենահավանական emphasize շեշտել, ընդգծել, կարևորել, առանձնացնել offset 1.փոխհատուցել 2.հավասարակշռել, հակակշռել stagnant 1.կանգնած, լճացած 2.իներտ, անգործունյա, անշարժ turf 1.գործունեության ոլորտ 2.բնակավայր 3.տորֆ, ճիմահող weigh 1.կշռել, չափել 2.կշռադատել spread too thin անբավարար չափով տարած(վ)ել daunt 1.վախեցնել, ահաբեկել 2.վհատեցնել 104 challenge 1.մարտահրավեր 2.բարդ խնդիր 3.կոչ, կանչ evaluate գնահատել no-brainer բարբաջանք, անմտություն, տափակություն heavily մեծապես, ուժեղ, սաստիկ, ծանրորեն supportive աջակցող master 1.տիրապետել, հմտանալ, յուրացնել 2.հաղթահարել (դժվարությունները) suggest 1.առաջարկել 2.ենթադրել get a feel զգալ, հասկանալ, ըմբռնել flavor համ, հոտ, բուրմունք fragnance 1.բույր, բուրմունք, անուշահոտություն 2.օծանելիք believe 1.կարծել, մտածել 2.հավատալ product mix արտադրանքի համալիր rank 1.դասակարգել 2.շարք կանգնեցնել density խտություն accessibility մատչելիություն long-run երկարաժամկետ 105 UNIT 11. DECIDING HOW TO ENTER THE MARKET Once the company has decided to sell in a foreign country, it must determine the best mode of entry. Table 6. shows three market entry strategies, along with the options each one offers. As the figure shows, each succeeding strategy involves more commitment and risk but also more control and potential profits. Table 6. MARKET ENTRY STRATEGIES Exporting Joint venturing Licensing Indirect Assembly facilities Contract manufacturing Management contracting Joint ownership Direct Direct investment Manufacturing facilities Exporting. The simplest way to enter a foreign market is through exporting. The company may passively export its surpluses from time to time, or it may make an active commitment to expand exports to a particular market. In either case, the company produces all its goods in its home country. It may or may not modify them for the export market. Exporting involves the least change in the company’s product lines, organization, investments, 106 or mission. Companies typically start with indirect exporting, working through independent international marketing intermediaries. Indirect exporting involves less investment because the firm does not require an overseas marketing organization or network. It also involves less risk. International marketing intermediaries bring know-how and services to the relationship, so the seller normally makes fewer mistakes. Sellers may eventually move into direct exporting, whereby they handle their own exports. The investment and risk are somewhat greater in this strategy, but so is the potential return. Joint Venturing. A second method of entering a foreign market is by joint venturing – joining with foreign companies to produce or market products or services. Joint venturing differs from exporting in that the company joins a host country partner to sell or market abroad. It differs from direct investment in that an association is formed with someone in the foreign country. There are four types of joint ventures: licensing, contract manufacturing, management contracting, and joint ownership. Licensing is a simple way for a manufacturer to enter international marketing. The company enters into an agreement with a licensee in the foreign market. For a fee or royalty payments, the licensee buys the right to use the company’s manufacturing process, trademark, patent, trade secret, or other items of value. The company thus gains entry into a foreign market at little risk; the licensee gains production expertise or a well-known product or 107 name without having to start from scratch. Licensing has potential disadvantages, however. The firm has less control over the licensee than it would over its own operations. Furthermore, if the licensee is very successful, and if/when the contract ends, the firm may find it has created a competitor. Contract Manufacturing. Another option is contract manufacturing – the company contracts with manufacturers in the foreign market to produce its product or provide its service. Sears (a very large group of U.S. department stores selling a wide range of products for the family) used this method in opening up department stores in Mexico and Spain, where it found qualified local manufacturers to produce many of the products it sells. The drawbacks of contract manufacturing are decreased control over the manufacturing process and loss of potential profits on manufacturing. The benefits are the chance to start faster, with less risk, and the later opportunity either to form a partnership with or buy out the local manufacturer. Management Contracting. Under management contracting, the domestic firm supplies management know-how to a foreign company that supplies the capital. The domestic firm exports management services rather than products. Hilton uses this arrangement in managing hotels around the world. For example, the hotel chain recently opened a Doubletree by Hilton in the United Arab Emirates. The property is locally owned, but Hilton manages the hotel with its world-renowned hospitality 108 expertise. Management contracting is a low-risk method of getting into a foreign market, and it yields income from the beginning. The arrangement is even more attractive if the contracting firm has an option to buy some share in the managed company later on. The arrangement is not sensible, however, if the company can put its scarce management talent to better uses or if it can make greater profits by undertaking the whole venture. Management contracting also prevents the company from setting up its own operations for a period of time. Joint ownership ventures consist of one company joining forces with foreign investors to create a local business in which they share joint ownership and control. A company may buy an interest in a local firm, or the two parties may form a new business venture. Joint ownership may be needed for economic or political reasons. The firm may lack the financial, physical, or managerial resources to undertake the venture alone. Or a foreign government may require joint ownership as a condition for entry. Best Buy recently formed a 50/50 joint venture with UK-based Carphone Warehouse to open its first European Best Buy stores, starting in Britain. A new Best Buy store in Britain is exactly like its American Counterpart. Even the carpets and the fittings have been imported from the U.S.A. But the management team and senior employees are from the United Kingdom. To learn the Best Buy way of retailing, the locals receive nine weeks of training at Best Buy’s “Blue Shirt Academy” in the United States. Best Buy promises that this 109 combination of its superstore concept with Carphone’s local market savvy will differentiate Best Buy from the largely price-driven U.K. competition. Whereas other U.S. retail chains, such as Walmart, have struggled in the United Kingdom, partnering with Carphone will help. “Best Buy has a much better chance of being successful in Europe by partnering with Carphone than it would open stores there by itself,” says a retailing analyst. “Having a management team that already has experience and connections in Europe is a huge, huge benefit”. Joint ownership has certain drawbacks, however. The partners may disagree over investment, marketing, or other policies. Whereas many U.S. firms like to reinvest earnings for growth, local firms often prefer to take out these earnings; whereas U.S. firms emphasize the role of marketing, local investors may rely on selling. Direct Investment. The biggest involvement in a foreign market comes through direct investment – the development of foreign-based assembly or manufacturing facilities. For example, HP has made direct investments in several major markets abroad, including India. It has opened two factories that make PCs for the Indian market, along with HP-owned retail outlets in 150 Indian cities. Thanks to such commitments, HP is a market leader in India and now controls more than 16% of the market in India. If a company has gained experience in exporting and if the foreign market is large enough, foreign 110 production facilities offer many advantages. The firm may have lower costs in the form of cheaper labor or raw materials, foreign government investment incentives, and freight savings. The firm may improve its image in the host country because it creates jobs. Generally, a firm develops a deeper relationship with the government, customers, local suppliers, and distributors, which allows it to adapt its products to the local market better. Finally, the firm keeps full control over the investment and therefore can develop manufacturing and marketing policies that serve its long-term international objectives. The main disadvantage of direct investment is that the firm faces many risks, such as restricted or devalued currencies, falling markets, or government changes. In some cases, a firm has no choice but to accept these risks if it wants to operate in the host country. QUESTIONS FOR DISCUSSION 1. How can you define the three market entry strategies: a) exporting, b) joint venturing, c) direct investment? 2. What can a company do if it has gained experience in exporting and if the foreign market is large enough? 3. Which are the main disadvantages of investing directly? 111 VOCABULARY NOTES entry մուտք, մտնելը option ընտրություն, ընտրելու հնարավորություն modify փոփոխել, ձևափոխել mission ներկայացուցչություն, առաքելություն host հյուրընկալ, տանտեր, կազմակերպիչ hospitality հյուրընկալություն, հյուրասիրություն association միություն, ընկերակցություն, ասոցիացիա expertise 1.փորձառություն, հմտություն, ձեռնահասություն 2.փորձագիտություն, փորձաքննություն from scratch հենց սկզբից, ոչնչից, դատարկ տեղից drawback 1.թերություն, պակասություն, բացասական կողմ 2.մաքսի վերադարձ renowned հռչակավոր, փառաբանված, ականավոր yield 1.տալ, բերել (եկամուտ) 2.արտադրել 3.զիջել, տեղի տալ sensible խելացի, խելամիտ, բանական, գիտակցող party 1.խումբ 2.մասնակից 3.երեկույթ, հավաքույթ 4.կողմ 5.կուսակցություն lack 1.պակասություն զգալ, չունենալ, կարիք ունենալ 2.չբավարարել fitting 1. մասեր, լրամասեր (կահույքի) 2.պիտույքակազմ 3.սարքավորում 112 savvy հնարամտություն, ճարպկություն price-driven գնային assembly 1.հավաքակցում 2.հավաք, ժողով, համաժողով facilities 1.հնարավորություններ 2.շինություն (գործարանի) freight 1.բեռ 2.փոխադրավճար, փոխադրավարձ 3. բեռնափոխադրում 113 UNIT 12. DECIDING ON THE GLOBAL MARKETING PROGRAM Companies that operate in one or more foreign markets must decide how much, if at all, to adapt their marketing strategies and programs to local conditions. At one extreme are global companies that use standardized global marketing, essentially using the same marketing strategy approaches and marketing mix worldwide. At the other extreme is adapted global marketing. In this case, the producer adjusts the marketing strategy and mix elements to each target market, bearing more costs but hoping for a larger market share and return. The question of whether to adapt or standardize the marketing strategy and program has been much debated over the years. On the one hand, some global marketers believe that technology is making the world a smaller place, and consumer needs around the world are becoming more similar. This paves the way for “global brands” and standardized global marketing. Global branding and standardization, in turn, result in greater brand power and reduced costs from economies of scale (i.e. a fall in average costs resulting from an increase in the scale of production). On the other hand, the marketing concept holds that marketing programs will be more effective if tailored to the unique needs of each targeted customer group. If this concept applies within a country, it should apply even more across international markets. Despite global convergence, consumers in different countries still have widely varied cultural 114 backgrounds. They still differ significantly in their needs and wants, spending power, product preferences, and shopping patterns. Because these differences are hard to change, most marketers today adapt their products, prices, channels, and promotions to fit consumer desires in each country. However, global standardization is not an all-ornothing proposition. It’s a matter of degree. Most international marketers suggest that companies should “think globally but act locally” – that they should seek a balance between standardization and adaptation. The company’s overall strategy should provide global strategic direction. Then regional or local units should focus on adapting the strategy to specific local markets. Collectively, local brands still account for the overwhelming majority of consumers’ purchases. “The vast majority of people still lead very local lives,” says a global analyst. “By all means go global, but the first thing you do is win on the ground. You have to go local”. Another analyst agrees: “You need to respect local culture and become part of it. A global brand must engage with consumers in a way that feels local to them”. Simon Clift, head of marketing for global consumer goods giant Unilever, puts it this way: “We’re trying to strike a balance between being mindlessly global and hopelessly local”. McDonald’s operates this way. It uses the same basic fast-food look, layout, and operating model in its restaurants around the world but adapts its menu to local tastes. In Japan, it offers EbiFiIlet-O-Shrimp burgers. In 115 Korea it sells the Bulgogi Burger, a grilled pork patty on a bun with a garlicky soy sauce. In India, where cows are considered sacred, McDonald’s serves McChicken, FiletO-Fish, McVeggie (a vegetable burger), etc. In all McDonald’s serves local markets with a global brand. Product. Five strategies allow for adapting product and marketing communication strategies to a global market. Table 7. PRODUCT Don’t change product Adapt Develop new product product Don’t change communication Straight extension Product adaptation Adapt Communication adaptation adaptation Dual adaptation communication Product invention Straight product extension means marketing a product in a foreign market without any change. Top management tells its marketing people, “Take the product as it is and find customers for it”. The first step, however, should be to find out whether foreign consumers use that product and what form they prefer. Straight extension has been successful in some cases and disastrous in others. Apple iPads, Gillette 116 razors, Black & Decker tools are all sold successfully in about the same form around the world. But when General Foods introduced its standard powdered JELL-O pudding in the British market, it discovered that British consumers prefer a solid wafer or cake form. Likewise, Philips began to make profit in Japan only after it reduced the size of its coffee makers to fit into small Japanese kitchens and its shavers to fit smaller Japanese hands. Straight extension is tempting because it involves no additional product development costs, manufacturing changes, or new promotion. But it can be costly in the long run if products fail to satisfy consumers in specific global markets. Product adaptation involves changing the product to meet local conditions or wants. For example, Finnish cell phone maker Nokia customizes its cell phones for every major market. To meet the needs of less-affluent consumers in large developing countries such as India, China, and Kenya, the company has created full-featured but rugged and low-cost phones especially designed for harsher living conditions. For instance, it developed dustproof keypads – crucial in dry, hot countries with many unpaved roads. Some phones have built-in radio antennas for areas where radio is the main source of entertainment. Thanks to such adaptation, Nokia commands a whopping 62.3% share of the market in Africa and the Middle East, 48.5% in Eastern Europe, and 41.8% in Asia. In its first foray into China in the early 1990s, Campbell essentially slapped a Chinese label on its 117 classic U.S. condensed soups. They sold well for a while, but when the novelty wore off, sales fell and Campbell withdrew. The company returned to China in 2007, but only after two years of thorough research with Chinese consumers. It found that in China, as well as Russia, there’s a cultural disposition to cooking soup from scratch. In both countries, about 98% of soup is homemade. So, in both countries, Campbell has now introduced products that reduce the time to make homemade soup from 2.5 hours to about 45 minutes. Getting the product right is important. Consumers in each country typically eat soup four to five times per week, compared with once a week in the United States. Campbell estimates that if it could capture just 3% of the soup market in the two countries combined, it would create a business as big as the entire U.S. soup market. Product invention consists of creating something new to meet the needs of consumers in a given country. For example, companies ranging from computer and car makers to candy producers have developed products that meet the special purchasing needs of low-income consumers in developing economies such as India and China. Ford developed the economical, low-priced Figo model especially for entry-level consumers in India. And Cadbury, long known for its premium chocolates, is now developing products for less affluent consumers in India and other developing economies. As more Indians begin to treat themselves to little luxuries, Cadbury hopes to capture millions of new 118 customers with chocolates that sell for only a few pennies. The candy maker has been in India for more than 60 years and dominates the chocolate market there with a 70% market share. For years, however, Cadbury was considered a luxury brand purchased only by the elite. But now Cadbury is taking aim at India’s huge population of lower-income consumers by offering cheaper products. India constitutes a vast untapped market – less than half of India’s 1.1 billion people have never tasted chocolate. The premium candy maker’s latest product for the low end of the Indian market is Cadbury Dairy Milk Shots – pea-sized chocolate balls sold for just two rupees, or about four U.S. cents, for a packet of two. In 2012, emerging markets accounted for 35% of Cadbury’s sales and about 60% of its sales growth. Promotion. Companies can either adopt the same communication strategy they use in the home market or change it for each local market. Consider advertising messages. Some global companies use a standardized advertising theme around the world. For example, Apple sold millions of iPads with a single global campaign featuring silhouetted figures dancing against a colorful background. And concerning the language, the Apple web site looks about the same for any of the more than 70 countries in which Apple markets its products, from Australia to Senegal to Czech Republic. Of course, even in highly standardized communications campaigns, some adjustments might be required for language and cultural 119 differences. For example, in Western markets, Dove’s high-impact campaign for Real Beauty featured images of everyday women in their underwear. In the Middle East, however, where attitudes toward nudity are more conservative, the campaign was modified to simply reveal the face behind a woman’s veil. Global companies often have difficulty crossing the language barrier, with results ranging from mild embarrassment to outright failure. Seemingly innocuous brand names and advertising phrases can take unintended or hidden meanings when translated into other languages. For example, an Italian company’s Traficante mineral water received an interesting reception in Spain, where the name is translated as “drug dealer”. Motorola’s Hellomoto ring tone sounds like “Hello, Fatty” in India. Rolls-Royce avoided the name Silver Mist in German markets, where mist means “manure”. IKEA marketed a children’s workbench named Fartfull (the word means “speedy” in Swedish); it soon discontinued the product.Travelers often encounter well-intentioned advice from service firms that takes on meanings very different from those intended. The menu in one Swiss restaurant proudly stated, “Our wines leave you nothing to hope for”. At a laundry in Rome, it was, “Ladies, leave your clothes here and spend the afternoon having a good time.” Advertising themes often lose something in the translation. Coca-Cola’s “Coke adds life” theme in Japanese is translated into “Coke brings your ancestors 120 back from the dead.” And In Chinese, the KFC slogan “finger-licking’s good” came out as “eat your fingers off.” So, crossing the language barrier involves much more than simply translating names and slogans into another language. Beyond just word meanings and nuances, international marketers must also consider things such as phonetic appeal and even associations with historical figures, legends, and other factors. “You can’t uproot a concept and just translate it and put it into another market,” says one translation consultant. “It’s not really about translating word for word, but actually adapting a certain meaning, and if you fail to review what your brand is saying to a foreign market, you may wish you stayed home,” says another. Other companies follow a strategy of communication adaptation, fully adapting their advertising messages to local markets. Kellogg ads in the United States promote the taste and nutrition of Kellogg’s cereals versus competitors’ brands. In France, where consumers drink little milk and eat little for breakfast, Kellogg’s ads must convince consumers that cereals are a tasty and healthful breakfast. In India, where many consumers eat heavy, fried breakfasts, Kellogg’s advertising convinces buyers to switch to a lighter, more nutritious breakfast diet. Media also need to be adapted internationally because media availability and regulations vary from country to country. TV advertising time is very limited in 121 Europe, for example, ranging, from four hours a day in France to none in Scandinavian countries. Advertisers must buy time months in advance, and they have little control over airtimes. However, cell phone ads are much more widely accepted in Europe and Asia than in the United States. Magazines also vary in effectiveness. For example, magazines are a major medium in Italy but a minor one in Austria. Newspapers are national in the United Kingdom but only local in Spain. Price. Companies also face many considerations in setting their international prices. For example, how might Stanley Black & Decker price its tools globally? It could set a uniform price globally, but this amount would be too high in poor countries and not high enough in rich ones. It could charge what consumers in each country would bear, but this strategy ignores differences in the actual costs from country to country. Finally, the company could use a standard markup of its costs everywhere, but this approach might price Stanly Black & Decker out of the market in some countries where costs are high. Regardless of how companies go about pricing their products, their foreign prices probably will be higher than their domestic prices for comparable products. An Apple iPad that sells for $600 in the United States goes for $750 in the United Kingdom. Why? Apple faces a price escalation problem. It must add the cost of transportation, tariffs, importer margin, wholesaler margin, and retailer margin to its factory price. Depending on these added costs, the product may have to sell for two to 122 five times as much in another country to make the same profit. To overcome this problem when selling to lessaffluent consumers in developing countries, many companies make simpler or smaller versions of their products that can be sold at lower prices. For example, in China and other emerging markets, Dell sells its simplified Vostro PC for $399, and Unilever and P&G sell consumer goods – everything from shampoo to toothpaste – in less costly formulations and smaller packages at more affordable prices. Another problem involves setting a price for goods that a company ships to its foreign subsidiaries. If the company charges its foreign subsidiary too much, it may end up paying higher tariff duties even while paying lower income taxes in that country. If the company charges its subsidiary too little, it can be charged with dumping. Dumping occurs when a company either charges less than its costs or less than it charges in its home market. For example, The United States has been slapping duties on a growing list of Chinese products – from tires to chickens – found to be unfairly priced. One such product is pipes used in oil and gas wells. It might not sound glamorous, but it’s an $11 billion market, with Chinese imports accounting for about 10%. When a group of American companies complained that Chinese firms were pricing these goods below market value, the U.S. Commerce Department agreed and imposed duties as high as 99% on oil field pipe imports from China. Various 123 governments are always watching for dumping abuses, and they often force companies to set the price charged by other competitors for the same or similar products. Recent economic and technological forces have had an impact on global pricing. For example, the Internet is making global price differences more obvious. When firms sell their wares over the Internet, customers can see how much products sell for indifferent countries. They can even order a given product directly from the company location or dealer offering the lowest price. This is forcing companies toward more standardized international pricing. Distribution Channels. An international company must take a whole-channel view of the problem of distributing products to final consumers. Table 8 shows the two major links between the seller and the final buyer. Table 8. WHOLE-CHANNEL CONCEPT FOR INTERNATIONAL MARKETING International seller Channels between nations Channels within nations Global value delivery network 124 Final user or buyer The first link, channels between nations, moves company products from points of production to the borders of countries within which they are sold. The second link, channels within nations, moves products from their market entry points to the final consumers. The whole-channel view takes into account the entire global supply chain and marketing channel. It recognizes that to compete well internationally, the company must effectively design and manage an entire global value delivery network. Channels of distribution within countries vary greatly from nation to nation. There are large differences in the numbers and types of intermediaries serving each country market and in the transportation infrastructure serving these intermediaries. For example, whereas large-scale retail chains dominate the U.S. scene, most of the retailing in other countries is done by small, independent retailers. In India, millions of retailers operate tiny shops or sell in open markets. Thus, in its efforts to sell those rugged, affordable phones discussed earlier to Indian consumers, Nokia has had to forge its own distribution structure. In India, Nokia has a presence in almost 50% of retail outlets selling mobile phones. “You have to understand where people live, what the shopping patterns are. You have to work with local means to reach people – even bicycles or rickshaws”, says a Nokia executive. To reach rural India, Nokia has outfitted its own fleet of distinctive blue Nokia-branded vans that prowl the rutted country roads. Staffers park these 125 advertisements-on-wheels in villages, often on market or festival days. There, with crowds clustering around, Nokia reps explain the basics of how the phones work and how to buy them. Nokia has extended the concept to minivans, which can reach even more remote places. Thanks to smart product development and innovative channels, Nokia now owns a 50% share of India’s mobile device market. Similarly, Coca-Cola adapts its distribution methods to meet local challenges in global markets. For example, in Montevideo, Uruguay, where large vehicles are challenged by traffic and parking difficulties, Coca-Cola purchased 30 small, efficient three-wheeled ZAP alternative transportation trucks. The little trucks average about one-fifth the fuel consumption and scoot around congested city streets with greater ease. In China, an army of more than 10,000 Coca-Cola sales reps make regular visits to small retailers, often on foot or bicycle. To reach the most isolated spots, the company even relies on teams of delivery donkeys. In Tanzania, 93% of CocaCola’s products are manually delivered via pushcarts and bicycles. QUESTIONS FOR DISCUSSION 1. How do companies adapt their marketing strategies and programs to local conditions? 2. What does “think globally but act locally” mean? 126 3. How does McDonald’s operate in adapting to local preferences? 4. How can you define the strategies of: a) straight product extension, b) product adaptation, c) product invention, d) promotion, when companies go global? 5. What difficulties may companies face when crossing language barriers? 6. Why must media be adapted internationally? 7. What should companies consider when setting their prices globally? 8. What is “dumping”? 9. What methods of distribution does an international company use to deliver its products to the final consumer? 10. Do channels of distribution vary within countries? VOCABULARY NOTES marketing mix մարքեթինգային համալիր adjust 1.կարգավորել 2.հարմարեցնել 3.հարմարվել pave the way for պայմաններ, հող նախապատրաստել, ճանապարհ հարթել hold 1.բնորոշվել մի բանով 2.ունենալ,տիրել 3.կարծել,գտնել,համարել 4.բռնել, պահել 127 apply 1.վերաբերել, առնչություն ունենալ 2.կիրառել 3.դիմել, հայցել convergence 1.միացում, համընկնում 2.համեմատություն, զուգամիտում background 1.ետևի պլան 2.անցյալ, նախապատմություն, նախադրյալ significance 1.կարևորություն 2.նշանակություն, իմաստ significant կարևոր, էական, նշանակալից significantly 1.էականորեն, նշանակալիորեն 2.բազմանշանակ proposition 1.ձեռնարկում,գործ 2.խնդիր 3.պնդում, հաստատում 4.առաջարկություն put 1.արտահայտել 2.դնել, տեղավորել grilled pork petty խոզի խորոված միս/մսակտոր layout 1.նախագիծ, ուրվագիծ 2.դասավորություն 3.սարքավորում bun քաղցրաբլիթ garlicky սխտորով straight product extension առանց հարմարեցման արտադրանք disaster աղետ, արհավիրք disastrous աղետալի, կործանարար, կորստաբեր shaver սափրվելու սարք tempting գայթակղիչ, հրապուրիչ costly թանկ, թանկագին, արժեքավոր 128 fail 1.անհաջողություն ունենալ, ձախողվել 2.չկարողանալ 3.չբավարարել, չգոհացնել product adaptation արտադրանքի հարմարեցում customize հարմարեցնել, համապատասխանեցնել affluent 1.հարուստ, առատ 2.ապահովված full-featured լրիվ ներկայանալիք, բոլոր անհրաժեշտ հատկանիշներով rugged 1.ամուր, դիմացկուն 2.անհարթ, խորդուբորդ 3.ծանր, դժվար(կյանքի մասին) harsh 1.դաժան 2.կոպիտ, տհաճ, ցավալի (իրականության, փաստերի մասին) dustproof փոշուց պաշտպանված, փոշի չանցկացնող keypad ստեղնախումբ crucial վճռական, բախտորոշ unpaved անհարթ built-in ներկառուցված foray 1.մտնելու փորձ 2.արշավանք, ավերում slap 1.ապտակել 2.շպրտել 3. այստեղ՝ կպցնել condensed խտացրած novelty նորություն, նորույթ wear off (wore, worn) ջնջել, սրբելով/տրորելով անցկացնել withdraw (withdrew,withdrawn) 1.ետ վերցնել/քաշել 2.հրաժարվել 3.ետ կանչել 129 thorough կատարյալ, լիակատար, հիմնավոր disposition 1.հակվածություն,տրամադրվածություն 2. խառնվածք 3.դասավորություն, տեղաբաշխում 4.իշխանություն capture վերցնել, գերի վերցնել product invention նոր ապրանքի ստեղծում economical 1.տնտեսող, խնայող, խնայողական 2.տնտեսագիտական entry-level consumers սկսնակ սպառողներ premium բարձրակարգ, առաջնակարգ elite ընտրախավ, վերնախավ untapped չմտած, մուտք չգործած pea-sized սիսեռի/ոլոռի չափ adjustment 1.կարգավորում, համաձայնեցում 2.հարմարեցում campaign քարոզարշավ underwear սպիտակեղեն, ներքնազգեստ nudity մերկություն conservative 1.պահպանողական 2.ավանդական 3.չափավոր reveal 1.բացահայտել, մերկացնել 2 ցույց տալ veil 1.քող, ծածկոց 2.վարագույր, դիմակ failure 1.անհաջողություն, տապալում, ձախողում 2.ձախողակ մարդ outright կատարյալ, լիակատար, բացաձակ seemingly արտաքինից դատելով, ըստ երևույթին 130 innocuous անվնաս, անվտանգ unintended չմտադրված mist մշուշ, մառախուղ manure գոմաղբ, պարարտանյութ speedy արագընթաց, արագ, սրընթաց discontinue ընդհատել, դադարեցնել encounter 1.ընդհարվել, բախվել 2.անսպասելի հանդիպել, դեմ առնել laundry 1.լվացքատուն 2.լվացք ancestor 1.նախնի, նախահայր 2.նախատիպ finger-licking համեղ, ախորժելի, “մատներդ կլիզես” (սննդի մասին) appeal 1.գրավչություն, հմայք 2.դիմում, կոչ, աղաչանք uproot արմատախիլ անել, վերացնել review 1.վերանայել 2.նորից դիտել, զննել, ստուգել nutrition 1.սնուցում, կերակրելը 2.սնունդ, կերակուր versus 1.դեմ, ընդդեմ, հակառակ 2.ի հակադրություն diet 1.կերակուր, սնունդ 2.սննդակարգ in advance նախօրոք airtime եթերաժամանակ charge 1.գին նշանակել 2.հագեցնել 3.մեկի հաշվին գրել 4.լիցքավորել 131 markup վրադիր overcome հաղթահարել escalation 1.ընդարձակում, տարածում 2.սրում formulation ձևակերպում affordable էժան, մատչելի subsidiary բաժանմունք, մասնաճյուղ dumping շուկայական գնից շատ ավելի ցածր գնով վաճառք tire դող, անվադող infairly 1.անարդարաբար 2.անազնվորեն pipe խողովակ, խողովակաշար well 1.հորոտանցք 2.նավթահոր glamorous հմայիչ, հրապուրիչ complain բողոքել, գանգատվել complaint բողոք, գանգատ ware 1.արտադրանք վաճառքի համար 2.կավեղեն, կերամիկա distribution channel կապուղի view 1.տեսադաշտ 2.տեսարան 3.դիտում, զննում, քննում 4.հեռանկարներ infrastructure ենթակառուցվածք operate 1.աշխատեցնել 2.ղեկավարել 3.գործել 4.ազդել tiny շատ փոքր, մանր, մանրիկ forge 1.հորինել 2.ստեղծել, հիմնել (հարաբերություն և այլն) 132 outlet 1.վաճառքի/բաշխման կետ 2.մասնագիտացված խանութ rickshaw ռիկշա (մարդատար երկանիվ սայլակ հեռավոր արևելքի մի շարք երկրներում) fleet 1.շարժակազմ,պարկ 2.նավատորմ distinctive բնորոշ, հատկանշական, առանձնահատուկ van 1.վագոն 2.բեռնասայլ, ֆուրգոն prowl գաղտագողի մոտենալ (որսին) rutted ակոսապատ staffer հաստիքային աշխատակից cluster խմբվել, խռնվել rep =representative ներկայացուցիչ remote 1.հեռավոր, հեռու 2.քիչ հավանական, աննշան, փոքր vehicle փոխադրամիջոց three-wheeled եռանիվ truck բեռնատար, բեռնատար ավտոմեքենա average 1.միջինում լինել 2.միջինը հանել scoot 1.վարել, քշել 2.տեղից պոկվել congested 1.լեփ-լեցուն 2.գերբնակեցված isolate մեկուսացնել, առանձնացնել isolation մեկուսացում, առանձնացում, անջատում spot 1.տեղ 2.բիծ, բծիկ via 1.միջոցով, օգնությամբ 2.ճանապարհով, վրայով, օգնությամբ 133 pushcart ձեռնասայլակ UNIT 13. UNDERSTANDING MARKETS AND BUYERS In every marketing situation, it is important to understand potential buyers and the process they use to select one product over another. Most elements of a marketing program are designed to influence the buyer to choose one’s product over competitors’ products. The marketer must be able to identify who the buyers are and how they make a purchase decision. When launching disposable diapers worldwide, Procter & Gamble established a global marketing team in Cincinnati, believing that babies’ diaper needs would be the same around the globe. They later found out that, whereas mothers in most countries are concerned about keeping their babies’ bottoms dry, Japanese mothers are not. In Japan, babies are changed so frequently that thick, ultra-absorbent diapers were not necessary and could be replaced by thin diapers that take up less space in the small Japanese home. Similarly, many firms have discovered that CEOs in developing countries make purchase decisions that are usually delegated to purchasing managers in developed countries. The Consumer Market. Consumers around the world have many similar needs. There is even some evidence that global consumption patterns are conver134 ging. The traditionally wine-drinking French are drinking more beer, and beer-drinking Germans are drinking more wine. Japan, traditionally a fish-eating country, is consuming more beef, and many Swiss now prefer French cheese to their traditional Swiss varieties. Buyers can differ in terms of who decides to buy, what they buy, why they buy, how they buy, when they buy, and where they buy. All people must eat, drink, and be sheltered. Once these basic needs are met, consumers then seek to improve their standard of living with a more comfortable environment, more leisure time, and increased social status. Still, consumption patterns vary greatly from one country to another, because consumers vary widely in their ability and motivation to buy. For example, consumption patterns for wine vary tremendously from country to country. In France, the average annual consumption is 25.7 liters per person, compared with 6.5 liters in the United States, 4.5 liters in Japan, and only 4 liters in Turkey. Basic needs and the desire for an improved standard of living are universal throughout the world, but unfortunately not everyone can achieve these objectives. The economic, political, and social structure of the country in which consumers live, affects their ability to fulfill their needs and the methods they use to do so. To understand the consumer market, we must examine the following three aspects: . The consumer’s ability to buy . Consumer needs 135 . Consumer behavior Ability to Buy. To purchase a product, consumers must have the ability to buy. The ability to buy a product may be affected by the amount of wealth a country possesses. A country accumulates wealth by the production and sale of goods within the country and the sale of goods to other countries (exports). The inflows of money from the latter are offset by the outflows of money to pay for necessary imports. A very important indicator of total consumer potential is gross national product (GNP) because it reflects the generation of wealth in a country, which is an indicator of overall market size. The GNP per capita expresses this value per person, so it is a crude indicator of potential per consumer. GNP and per-capita income (PCI) can vary significantly from country to country. With a PCI of $38,095 in Japan and $54,499 in Sweden, one can expect the demand for automobiles to be greater in those countries than in Kenya or Vietnam, each with a PCI below $1,000. One of the main reasons why Starbucks was attracted to Mexico was its increasing income per capita. Despite some cultural differences among markets, Starbucks noticed a strong correlation between PCI and coffee consumption. It is important to note, however, that PCI statistics have an inherent flaw that can undermine their comparability across all markets. The IMF recognizes that converting income denominated in local currencies into U.S. dollars at market rates can underestimate the true 136 purchasing power of consumers in poor countries relative to those in rich countries. Because of this, the IMF suggests using statistics pertaining to purchasing-power parity, which take into account national differences in product prices. Distribution of wealth also has implications for market potential. Income distribution across the population of a country can distort the market potential in a country. For example, over 80% of India’s population and nearly 35% of China’s population live on less than $2 a day. If a few people possess nearly all the wealth and the rest are poor, there will be few people in the middle. As a result, many products that depend on a middle-class market may fare poorly. Consumer Needs. Products and services are purchased to fulfill basic human needs. Abraham Maslow’s hierarchy of needs divides human needs into four levels and proposes that humans will satisfy lowerlevel needs before seeking to satisfy higher-level needs. The lowest level of needs is physiological needs. These include the need for safety, food, and shelter. The second level encompasses the social needs of friendship and love. The third level consists of the need to receive respect from others, and the highest level of needs is related to self-actualization or developing one’s personality. The structure of consumption for each country varies depending on the income per capita. A developing country, such as China, spends over 50% of the national income on food, whereas consumers in 137 developed countries, such as France and the United States, spend less than 20% on food. Although it is possible to generalize about the order of consumer purchases on the basis of Maslow’s hierarchy of needs, there is some debate about its cross-cultural applicability. Hindu cultures emphasize self-actualization before materialism. In developing countries, consumers may deprive themselves of food in order to buy refrigerators to establish their social status and fulfill their need for esteem. Asian consumers often purchase luxury goods to enhance or maintain face even when their income is relatively low. Consumers from more individualistic countries such as the United States may attach less importance to purchases related to belonging to a group or enhancing face and more importance to hobby-related products that may enhance self-actualization. In Japan, on the other hand, great attention and expenses are devoted to ritual gift-giving even among business associates, and Japanese children are socially obliged to hold lavish funerals for their parents. Consumer Behavior. The ability to buy is influenced by a variety of economic elements, which are much easier to identify than elements related to consumers’ motivations to buy. In fact, all consumers exhibit some similarities as members of the human race. However, buyer behavior is not uniform among all humans. Buyer behavior is learned, primarily from the culture, and so it differs from one culture to another. 138 To begin with, culture can directly affect product usage. For example, selling insurance in Muslim countries may prove more difficult because some religious leaders consider buying insurance gambling, which is prohibited under Islam. However, marketers of luxury goods find the Japanese to be excellent customers. Cramped living conditions in Japan combined with a heritage of aesthetic sensibility result in a desire for luxury designer items. All global marketers involved with product or packaging design should be aware of the impact of aesthetics on consumer purchasing decisions. One example of cross-cultural similarities and differences in this regard involves color preferences. A study of consumers in eight countries revealed that some universal color preferences do exist. Blue was either the first or the second favorite color in every country, and there was no difference in liking in respect to black, green, red, or white. However, there were differences in preferences for brown, gold, orange, purple, and yellow. Black and red signify happiness to the Chinese and are commonly chosen for wedding invitations. In India, Hindus consider orange the most sacred color. Purple is associated with expensive products in Japan, China, and South Korea, but with inexpensive products in the United States. The structure of the family and the roles assigned to each member also play an important part in determining what products are purchased and how the decision to purchase is made. Therefore, international 139 marketers should be aware that variations in family purchasing roles may exist in foreign markets as a result of social and cultural differences. Marketing strategy may need to change to take into account the respective roles of family members. In Saudi Arabia, housewives primarily make decisions as to what packaged foods to buy even if a male servant or member of the family does the actual shopping. QUESTIONS FOR DISCUSSION 1. Why is understanding potential buyers important? 2. How is the idea that “global consumption patterns are converging” proved? 3. What considerations help us understand the consumer market? 4. What does the GNP indicator reflect? 5. How is Maslow’s hierarchy of needs defined? 6. How does the structure of consumption for each country vary? 7. What can lead to changes in consumer behavior? 8. Will the buying process be more similar from country to country for deodorant or delivery vans? Why? 140 VOCABULARY NOTES launch 1.ներկայացնել հասարակությանը 2.սկսել, ձեռնարկել 3.արձակել (հրթիռ) disposable 1.մեկանգամյա 2.մատչելի (դրամական միջոցների մասին) diaper խանձարուր, բարուր bottom 1.նստատեղ 2. հատակ ultra-absorbent խիստ ներծծող/քաշող delegate 1.հանձնարարել 2.լիազորել converge 1.մոտենալ, մերձենալ 2.միանալ, զուգամիտել 3.համատեղել variety 1.տարատեսակ 2.զանազանություն 3.շարք, մեծ քանակություն shelter 1.պատսպարել, պաշտպանել 2.ապաստարան տալ leisure time ազատ ժամանակ motivation դրդապատճառ, շահադրդում, շահագրգռվածություն universal 1.համընդհանուր 2.բազմակողմանի 3.տիեզերական, համաշխարհային accumulate կուտակել, հավաքել per capita մեկ չնչին ընկնող correlation հարաբերակցություն inherent հատուկ, ներհատուկ flaw արատ, թերություն, թույլ կողմ comparability համեմատելիություն 141 convert փոխել, փոփոխել, փոխարկել denominate արտահայտել (որոշակի դրամական միավորով) 2.անվանել underestimate թերագնահատել purchasing power գնողունակություն pertain 1.վերաբերել, կապ ունենալ 2.պատվիրել parity 1.հավասարություն 2.համարժեքություն distort 1.աղավաղել, խեղաթյուրել 2.այլանդակել, ծռմռել fare 1.դրսևորվել, ներկայանալ, հանդես գալ 2.լինել, պատահել, կատարվել encompass 1.շրջապատել 2.պարունակել 3. իրագործել self-actualization ինքնահաստատում applicability կիրառելիություն deprive զրկել esteem հարգանք, ակնածանք enhance 1.մեծացնել, բարձրացնել, ուժեղացնել, բարելավել 2.թանկացնել maintain 1.պահել, պահպանել 2.օժանդակել individualistic անհատապաշտական attach կցել, միացնել, ամրացնել ritual 1.ծիսական, ծիսակարգային 2.սովորությունից եկող associate գործընկեր lavish շքեղ, ճոխ 142 prove 1.պարզվել 2.ապացուցել gambling մոլեխաղով/վտանգավոր գործով զբաղվելը cramped նեղացած, սեղմված, կաշկանդված heritage ժառանգություն aesthetic գեղագիտական, էսթետիկական sensibility 1.զգայունություն, զգայունակություն 2.նրբազգացություն respective համապատասխան, յուրաքանչյուրը delivery առաքում, փոխանցում 143 UNIT 14. SEGMENTING MARKETS It should be noted that market segmentation is the aggregation of prospective buyers into group (segments) that have common needs and will respond similarly to a particular marketing strategy, and once global marketers identify possible national markets to enter, they must remember that further market segmentation is possible for three reasons:  All residents of a country are not alike. Consequently, marketers can’t develop one marketing strategy that will adequately address the needs of everyone in a country. UPS discovered this when it surveyed Chinese consumers. Its research concluded that China could not be viewed as a single market because Chinese consumers had countless personal preferences.  You do not need every consumer in a country to buy your product in order to be successful in the market – you just need a large enough segment of the market to be willing and able to buy your product.  How and how much you adapt your marketing mix (product, price promotion, distribution) in a national market will depend on the segment you target in that market. Most segmentation is done within a country. Should a Japanese cosmetics firm target French housewives or French working women? Should a U.S. soft-drink 144 company develop a different marketing mix for Brazilian teens than the one it developed for Brazilian adults? Should a Bolivian furniture company enter the U.S. market targeting the East Coast or the West Coast? Segmenting by Region. There are several reasons why global firms may decide to target a geographical region within a national market. It should be noted that some countries have multiple cultures that can vary by region. Certain regions may be richer or poorer than others. This can be particularly evident when comparing urban and rural populations in developing countries. Regions may even vary by their acceptance of foreign products. For many years Midwesterners in the United States resisted imported beer. Recently, imports have been making inroads there – but sales are still lower than along the coasts. Some firms even choose to target by municipality. The Belgium beer Stella Artois entered the U.S. market by targeting key trend-setter cities. Segmenting by Demographics. Although we often think of culture as a geographic phenomenon, culture can vary to a certain degree by class and generation as well. Men and women are often socialized differently, resulting in certain cultural differences between the genders. Therefore, segmentation by demographics, such as income, gender, or age, is common domestically and useful in international markets as well. Often marketers segment by more than one demographic variable, such as age and gender. Targeting a market segment determined by the right combination of demographic 145 considerations can result in an attractive marketing strategy. In India, young people, especially women make up a small segment of the competitive automobile market. But with a growing middle class and rising salaries for young people, Suzuki has been successful in designing an attractive car for young, middle-class women – the Zen Estilo. It comes in eight fashion colors and sells for less than $8,000. When the car was first launched, consumers faced a six-week wait to purchase one in Mumbai. Segmenting by income is particularly salient in developing countries. Some companies target wealthy elites. A Dior phone, priced from $5,000, was created in response to the new luxury markets in China and Russia. On the other hand, poorer segments are receiving increasing attention from global marketers. Cell-phone giant Nokia claims a 66% market share in Africa, where sales are strong among poorer consumers. As noted above, there has been increasing interest in lower-income markets in developing countries. However, the definition of this segment varies. Definition can range from consumers who make less than $6,000 a year to those who make $2 a day. Therefore, marketers must be clear as to what income level they are actually envisaging when they target the segment. Choosing between rich and poor is not always necessary. Many companies target both rich and poor segments in the same market, adapting their market strategies accordingly. L’Oreal sells its global brand 146 Excellence Cream hair color in India for $11 a bottle. It has also introduced another hair dye priced below $3 targeted at the lower-income Indian consumer. Similarly, Wal-Mart in Mexico targets different income segments with different store chains. Its flagship Wal-Mart Supercenter chain targets Mexicans ranging from the lower middle class to the elite, whereas its Sam’s Club chain targets the upper middle class and elites only, and its Bodega Aurrera chain targets lower-income Mexicans. Segmenting by World View. Within any country there may be segments that are more open to the idea of buying foreign products as well as possessing the means to do so. Certain segments within a national market may be inclined to purchase global brands because they enhance their self-image of being cosmopolitan, sophisticated, and modern. Such cosmopolitans make easier targets for global marketers. Cosmopolitans have often been associated with younger, urban consumers. Urban populations in emerging markets have long been thought to be more accessible (physically and psychologically) than rural population. Moreover, they tend to be richer. Economists at the World Bank were startled to find out that the average family of four living in Hanoi spent the equivalent of $20,000 when calculated as purchasing-power parity – even though Vietnam is considered one of the poorest countries in the world. Global Segments. The cosmopolitan phenomenon has motivated some global marketers to think in terms of global segments, transnational consumer segments 147 based on age, social class, and lifestyle rather than on national culture. For example, social class is a grouping of consumers based on income, education, and occupation. Within a culture, consumers in the same social class tend to have similar purchase patters. Even across cultures this may be the case, especially among young, affluent professionals. A study of young consumers with college education living in Romania, Ukraine, Russia, and the United states revealed that these consumers possessed a strong preference for global brands. A study of MBA students representing 38 nationalities revealed cross-cultural similarities in how these students evaluated product quality. The students were young, affluent, mobile, well educated, and fluent in English. Across nationalities and cultural groups, all rated brand names the highest as a cue to product quality. Similarly, all rated retailer reputation the lowest and placed price between the other two cues. The importance of physical appearance of the product did vary some among cultures, however. As this study shows, some – but not all – aspects of buyer behavior may converge across cultures when examining a transnational segment. Technological changes in telecommunications have brought different nationalities in contact with one another – sometimes on a daily basis. Blogs, instant messaging, smart phones, and social networking sites, such as YouTube, allow young people to share ideas and can drive demand for fashion, food, consumer electronics, and entertainment. However, for most products and segmentation schemes, persistent national differences continue to limit the usefulness of global segmentation. 148 QUESTIONS FOR DISCUSSION 1. What should global marketers remember when segmenting the possible markets to enter? 2. What does segmenting a) by region, b) by demographics, c) by world view mean? 3. What are global segments based on? 4. How have technological changes contributed to the communication between different nationalities? 5. How might segmenting by country be useful to global marketers of cosmetics? What could limit the usefulness of such segmentation? VOCABULARY NOTES segment հատվածավորել segmentation հատվածավորում aggregation կուտակում, զանգված, համախմբում, միացում, կենտրոնացում prospective ապագա, գալիք, սպասվող, ենթադրվող respond 1.պատասխանել 2.արձագանքել adequately բավարար չափով, պատշաճորեն address 1.դիմել, խոսքն ուղղել 2.հասցեագրել 3.միջոցներ ձեռքնարկել survey 1.դիտել, զննել, ստուգել, քննել, ուսումնասիրել 2.հարցում անել 149 conclude 1.եզրափակել, ամփոփել, վերջացնել 2.եզրակացնել 3.կնքել (պայմանագիր) conclusion եզրափակում, ամփոփում, եզրակացություն marketing mix մարքեթինգային համալիր multiple բազմաթիվ, բազմաքանակ, բազմազան resist 1.դիմադրել, դիմադրություն ցույց տալ 2.պայքարել municipality համայնք, տեղական ինքնակառավարման մարմին trend- setter նորաձևության առաջատար socialize հանրայնացնել, համայնացնել, սոցիալականացնել gender սեռ salient աչքի ընկնող, ուշագրավ, ակնառու claim 1.պահանջել, պահանջ ներկայացնել 2.պնդել, հաստատել 3.հայց հարուցել envisage 1.խորհել 2.նախատեսել 3.պատկերացնել, երևակայել hair dye մազի ներկ flagship 1.ամենաորակյալ արտադրանք 2.հրամանատարի/ֆլագմանի incline self- image 1.հակված լինել, հակում ունենալ 2.թեքվել, խոնարհվել ինքնագնահատական cosmopolitan աշխարհաքաղաքացիական, կոսմոպոլիտական 150 sophisticated 1.փորձառու, փորձված 2.կատարելագործված, բարդ accessible 1.մատչելի, դյուրահաս 2.ըմբռնելի psychologically հոգեբանորեն startle 1.ապշեցնել, ցնցել 2.վախեցնել purchasing-power parity գնողունակության համարժեքություն lifestyle կենսաոճ occupation գործ, զբաղմունք, աշխատանք, մասնագիտություն evaluate գնահատել, համարժեքը գտնել mobile շարժուն, ճկուն cue պատասխան, ռեպլիկ, ակնարկ entertainment զվարճություն, զվարճանք scheme 1.նախագիծ, պլան, գործունեության ծրագիր 2.համակարգ 3.սխեմա persistent 1.մշտական, մնայուն, հարատև 2.կայուն 3.համառ, հաստատակամ 151 UNIT 15. GLOBAL COMPETITORS To begin to develop an effective strategy for global markets, a firm must consider not only buyers but competitors as well. Understanding global buyers is only half the job. Global marketers must compete for those buyers. Potential competitors include both global competitors and local competitors. Each presents unique challenges. Furthermore, the national origin and cultural heritage of firms can determine their organization, their sources of competitive advantage, and the tactics they employ to compete. To be successful in global markets, firms must not only understand their potential buyers but also learn to compete effectively against other firms from many different countries. International firms have both advantages and disadvantages when they encounter local competition in foreign markets. Multinational corporations may be larger than local firms and may have better access to sources of finance. They may enjoy greater experience worldwide in product development and marketing. This experience can be brought to play in the new market. However, local competitors may better understand the local culture and hence operate more effectively not only in addressing consumer needs but in dealing with local distributors and governments as well. Today many local competitors, even those in less developed markets, have built up popular brands that a foreign newcomer can find difficult to dislodge. Global Firm versus Global Firm. Some industries are becoming increasingly global. In these industries, the 152 same global competitors hold significant global market share and face each other in virtually every key market. Major global competitors such as Kodak and Fuji Film consider each other carefully on a worldwide basis. They watch each other’s moves in various markets around the world in order to respond to, or even preempt, any actions that will give the competitor a market advantage. Unilever, a European-based firm, and Procter & Gamble of the United States clash in many markets, particularly in laundry products. The two firms compete with each other in most world markets, and action in one market easily spills over into others. The same phenomenon occurs in the aerospace industry. Buyers are global, and research and development (R&D) costs are high. In fact, competitors are few and the industry is largely defined by just two firms – Airbus and Boeing. George Yip in his Total Global Strategy (New York: Prentice-Hall, 2002) suggests several ways in which one global competitor can address another. - Cross-country subsidization. Using profits from one country in which a business operates to subsidize competitive actions in another country. Bic was one of the first companies to do this effectively. Bic used profits made in France to attack competitor Scripto’s pen business in Britain. Then Bic used profits made in Europe to attack Scripto in its U.S. home market. As Scripto’s national subsidiaries were largely independent of each other, the firm didn’t see Bic coming. 153 - Counterparty means defending against a competitive attack in one country by counterattacking in another country.Fuji successfully entered the United States, gaining 25% of the film market. Kodac counterattacked in Japan, exerting great efforts to strike back at Fuji in its home market. - Globally coordinated moves means employing simultaneous actions across countries to gain competitive advantage over global or local rivals. For example, some multinational firms now choose global rollouts for products. By introducing new products in all major national markets simultaneously, a firm ensures that its global competitors have no time to learn from one market in order to respond in another. - Targeting of global competitors means identifying actual and potential global competitors and selecting an overall posture – attack, avoidance, cooperation, or acquisition. One of the longest-running battles in global competition has been the fight for market dominance between Coca-Cola and PepsiCo, the world’s largest softdrink companies. Traditionally, the two firms have been relatively close in the U.S. market, but Coca-Cola has long been the leader in international markets. In terms of worldwide market share, Coke leads Pepsi by better than a two-to-one margin. However, the battle for global market share is an ongoing one that erupts simultane154 ously on several fronts. Key battleground markets are the emerging markets of Russia, China, and India. Despite entering the Russian market over 30 years after Pepsi did, Coke was able to pull ahead of its global rival in that market. However, the market shares of the two brands are very close in China, where in an attempt to overtake Pepsi, Coke paid $80 million for four-year sponsorship rights for the Beijing Olympics. In India, Coke had previously relinquished its market position when the Indian government passed a law that would require the company to share its secret cola formula with local partners. Although the law was later repealed, Coke delayed returning to India whereas rival Pepsi made India a priority market. When Coke finally returned, it found Pepsi well established in the market. The Coke brand still trails Pepsi, but the competition between the two brands is fierce. Pepsi accused Coke of hoarding over five million returnable Pepsi bottles collected from recyclers in order to disrupt Pepsi production. Pepsi called the police, and a court ordered Coke to return the bottles. The two companies subsequently agreed to a regular exchange of bottles. Global Firm versus Local Firm. Local firms can compete effectively against much larger international companies if they act wisely. When Wal-Mart entered Britain, many expected it to dominate the market despite the presence of Tesco, a local retail giant. However, Tesco held its own while Wal-Mart struggled. Tesco’s secret was information on its consumers. Tesco signed 155 up 12 million customers for its Clubcard program. In exchange for offering consumer discounts, Tesco gained access to tracking consumer purchases. By knowing its consumers well and developing a relationship with them, Tesco captured a local advantage. In other markets, local competitors have also kept global competitors at bay. In Brazil, Grupo Positivo commands a larger market share of personal computers than does Dell or Hewlett-Packard, and in Russia a local producer of dairy products is larger than multinational Danone. Although global firms may have superior resources, they often become inflexible after several successful market entries and tend to stay with standard approaches when flexibility is needed. Often the global firm’s strongest local competitors are those who watch global firms carefully and learn from their moves in other countries. Recently several top Indian retailers decided to invest over $1 billion each to upgrade their operations to world-class standards before global competitors like WalMart entered the Indian market. The local competitors don’t simply respond to the entry of global competitors into their markets. They prepare to it. 156 QUESTIONS FOR DISCUSSION 1. Which are the advantages and disadvantages of international firms facing local competition in foreign markets? 2. How do global firms compete with other global firms? 3. What strategies does George Yip suggest to global competitors? 4. Comment on the Coke and Pepsi “war”. 5. How do local firms operate against global firms? VOCABULARY NOTES present 1.ներկայացնել 2.հանդիսանալ 3.նվիրել, ընծայել disadvantage 1.անհարմարություն, անբարենպաստ վիճակ 2.վնաս hence հետևաբար, ուստի, այդ պատճառով build up 1.ստեղծել 2.ուժեղացնել dislodge 1.դուրս քշել, դուրս մղել 2.տեղահան անել virtually փաստորեն, իսկապես, ըստ էության preempt 1.կանխել 2.նախապես տիրել ինչ-որ բանի clash բախվել, ընդհարվել laundry products լվացքի պարագաներ/նյութեր 157 spill 1.թափել, շաղ տալ 2.ցրել phenomenon (հոգն. phenomena) երեևույթ(ներ) aerospace օդատիեզերական cross-country subsidization երկրով մեկ ֆինանսավորում counterparty գործընկեր counterattack հակագրոհել, հակահարձակում կատարել film ֆոտոժապավեն, կինոժապավեն exert efforts ջանք գործադրել move տեղաշարժ, շարժում, դիրքի փոփոխություն rollout (n) զանգվածային արտադրություն simultaneously միաժամանակ posture դիրք, դրություն, վիճակ avoidance acquisition 1.խուսափում, շրջանցում 2.վերացում, անվավեր դարձնելը ձեռքբերում, գնում, գնելը soft-drink ոչ ոգելից ըմպելիք ongoing շարունակվող, ընթացքի մեջ գտնվող erupt պայթել, դուրս գալ, ժայթքել front ռազմաճակատ, ճակատ battleground մարտադաշտ, ռազմադաշտ pull ahead off առաջ անցնել overtake հասնել, հասնել-անցնել sponsorship հովանավորություն relinguish 1.թողնել,հրաժարվել 2.զիջել 158 repeal չեղյալ հայտարարել, ուժը կորցրած ճանաչել priority առաջնություն, նախապատվություն trail հետքով գնալ fierce կատաղի, դաժան accuse մեղադրել, ամբաստանել hoard կիտել, դիզել, պաշարանել returnable վերադարձվելիք recycler վերամշակող disrupt 1.ընդհատել, ձախողել, տապալել 2.վնասել, քայքայել subsequently արդյունքում, այնուհետև, հետագայում wise(ly) իմաստուն, խոհեմ, ողջամիտ (ձևով) clubcard ակումբային քարտ discount զեղչ, զեղչում tracking հետևելը at bay հալածական, գազանի նման superior 1.գերազանցող 2.ավագ, վերադաս inflexible 1.անճկուն 2.անհողդողդ, չզիջող flexibility 1.ճկունություն, զիջողականություն upgrade 1.բարձրացնել 2. բարելավել 159 UNIT 16. GLOBAL MARKETING RESEARCH Global marketing research is meant to provide adequate data and cogent analysis for effective decision making on a global scale. The analytic research techniques practiced by domestic businesses can be applied to international marketing projects. The key difference is in the complexity of assignments because of the additional variables that international researchers must take into account. Global marketers have to judge the comparability of their data across a number of markets and are frequently faced with making decisions based on the basis of limited data. Because of this, the researcher must approach the research task with flexibility, and ingenuity. Traditionally, marketing research has been charged with the following three broad areas of responsibility: - Environmental studies. Given the added environmental complexity of global marketing, managers need timely input on various national environments. - Market studies. One of the tasks that researchers most frequently face is to determine the size of the market and the needs of potential consumers. - Competitive studies. Another important task for the international marketing researcher is to provide insights about competitors, both domestic and foreign. In earlier units we have covered many issues involved in an environmental study. Of particular interest 160 are the economic, socio-cultural, and political environments of a market. Studies focusing on a national market are frequently undertaken when a major decision regarding that market has to be made. This could include a move to enter the country or an effort to increase significantly the firm’s presence in the market through large new investments. As a company gains experience in any given country, its staff and local organization accumulate considerable data on the social and cultural situation, and this store of information can be tapped whenever needed. Therefore, a full study of these environmental variables is most useful when the company does not have a base in the country and its relevant experience is limited. Nonetheless, managers should carefully monitor changes in their markets. They may also find it useful to keep informed about the latest regulations governing their industry in other countries, even if they do not conduct any business there. Policies in one country often spread to others. This is particularly true within regional blocs. Global marketing research is also used to make both strategic and tactical decisions. Strategic decisions include deciding what markets to enter, how to enter them (exporting, licensing, joint venture), where to locate production facilities, and how to position products vis-avis competitors. Tactical decisions are decisions about the specific marketing mix to be used in a country and are made on an ongoing basis. Decisions about advertising, sales promotions, and sales forces all require data derived from testing in the local market. The type of the information required is often the same as that required in 161 domestic marketing research, but the process is more complex because of the variety of cultures and environments. Table 9. shows the various types of tactical marketing decisions needed and the kinds of research used to collect the necessary data. The complexity of the international marketplace, the extreme differences that exist from country to country, and the company’s frequent lack of familiarity with foreign markets accentuate the importance of international marketing research. Before making a market entry, product positioning, or marketing mix decisions, a marketer must have accurate information about the market size, customer needs, competition, and relevant government regulations. Marketing research provides the information the firm needs to avoid the costly mistakes of poor strategies or lost opportunities. The lack of proper marketing research can sabotage product development for a foreign market. On the strength of a research study conducted in the United States, one U.S. firm introduced a new cake mix in England. Believing that homemakers wanted to feel that they participate in the preparation of the cake, the U.S. marketers devised a mix that required homemakers to add an egg. Having its success in the U.S. market, the marketers confidently introduced the product in England. The product failed, however, because the British did not like fancy American cakes. They preferred cakes that were tough and spongy and could accompany afternoon tea. The ploy of having homemakers add an egg to the mix did not eliminate basic differences in taste and style. 162 Table 9. INTERNATIONAL MARKETING DECISIONS REQUIRING MARKETING RESEARCH Marketing Mix Decisions Type of Research Product policy decisions Focus groups and qualitative research to generate ideas for new products Survey research to evaluate new product ideas Concept testing, test marketing Product benefit and attitude research Product formulation and feature testing Price sensitivity studies Survey of shopping patterns and behavior Survey of shopping patterns and behavior Consumer attitudes toward different store types Survey of distributor attitudes and policies Advertising pretesting Advertising post-testing Survey of media habits Survey of response to alternative types of promotion Tests of alternative sales presentations Pricing decision Distribution decisions Advertising decisions Sales promotion decisions Sales force decisions 163 One the other hand, well-conceived market research can provide insights that promote success. To better their services at Hong Kong Disneyland, Disney employed researchers with stopwatches to time how long Chinese guests took to eat. They discovered that the Chinese took an average of ten minutes longer than Americans. As a result, Disney added 700 extra seats to the park’s dining areas. After determining what key variables to investigate, international marketers still face a number of challenges. Whereas domestic research is limited to one country, international research includes many. The international market researcher must choose which countries and market segments to investigate. For many countries, secondary information may be limited or expensive. Primary research can prove culturally challenging. In addition, the comparison of research results from one national study to another is hindered by the general difficulty of establishing comparability and equivalence among various research data. Definitions of socioeconomic status, income, and education can vary widely among countries, which makes even the simplest demographic comparisons between markets challenging. 164 QUESTIONS FOR DISCUSSION 1. Why is global marketing research necessary? 2. What considerations should global marketers take into account? 3. Which are the three broad areas of responsibility in a marketing research? 4. How does global marketing research contribute to making strategic and tactical decisions? 5. What types of tactical marketing decisions can you mention that require certain kinds of research? 6. What factors accentuate the importance of international marketing research? 7. What can the lack of proper marketing research bring to? 8. How did Disney improve the service in the dining areas in China? 165 VOCABULARY NOTES cogent scale frequent frequently ingenuity timely input insight համոզիչ, անժխտելի 1.մասշտաբ 2.սանդղակ հաճախակի հաճախ, հաճախակիորեն հնարամտություն, սրամտություն ժամանակին արված, ճիշտ ժամանակին 1.մուտք 2.ներդրում 1. ըմբռնում, բացահայտում 2.խորաթափանցություն major գլխավոր, նշանակալից regarding վերաբերյալ, առնչվող relevant տեղին, հարմար, պատշաճ nonetheless այնուամենայնիվ, այնուհանդերձ monitor մշտադիտարկել, վերահսկել vis-a-vis 1.ի տարբերություն 2.կապված, վերաբերյալ testing փորձելը, ստուգելը response պատասխան , արձագանք familiarity 1.գործիմացություն, բանիմացություն 2.ծանոթություն accentuate շեշտել, ընդգծել, նկատելի դարձնել positioning դիրքավորում accurate ճշգրիտ, ստույգ, հավաստի sabotage նենգադուլել, վնասարարությամբ զբաղվել on the strength հիման վրա, պատճառով, հետևանքով devise հորինել, հնարել, գյուտ անել confident(ly) համարձակ(որեն), վստահ(որեն) 166 fancy 1.բարձրակարգ 2.տպավորիչ 3.գույնզգույն tough 1.կոշտ (սննդի մասին) 2.ամուր 3.հաստ spongy սպունգանման, ծակոտկեն ploy խորամանկություն, խորամանկ քայլ eliminate 1.ոչնչացնել, վերացնել 2.բացառել 3.հեռացնել well-conceived լավ մտածված stopwatch վայրկենաչափ investigate 1.քննել 2.հետազոտել, ուսումնասիրել hinder խանգարել, արգելք հանդիսանալ, խոչընդոտել 167 UNIT 17. THE RESEARCH PROCESS Although conducting marketing research internationally adds to the complexity of the research task, the basic approach remains the same for domestic and international assignments. Either type of research is a four-step process: 1. Problem definition and development of research objectives 2. Determination of the sources of information 3. Collection and analysis of the data from primary and secondary sources 4. Analysis of the data These four steps may be the same for both international and domestic research, but problems in implementation may occur because of cultural and economic differences from country to country. Problem Definition and Development of Research Objectives. In any market research project, the most important tasks are to define the problem and, subsequently, to determine what information is needed. This process can take weeks or months. It eventually determines the choice of methodologies, the types of people to survey, and the appropriate time frame in which to conduct the research. In determining the research question, managers must decide on an etic or an emic approach. The etic 168 approach assumes that a research question developed in one culture can be more or less translated for use in another cultural context. Etic research is useful in that it allows comparisons across countries but can miss important differences between countries. In contrast to the etic approach, the emic approach focuses on understanding each local context from its own cultural frame of reference. The emic approach assumes that cultures are so different that mere translation of a concept across cultures is dangerous to truly insightful research. For example, bicycles in a developed country may be competing with other recreational goods, such as skis, baseball gloves, and exercise equipment. In a developing country, however, they provide basic transportation and hence compete with small cars, mopeds, and scooters. A global firm could fail to understand why growth in bicycles was declining in Malaysia if it asked questions only about the consumer’s purchase and use of other recreational products. Data Collection. For each assignment, researchers may choose to base their analyses on primary data (data collected specifically for this assignment), secondary data (previously collected and available data), or a combination of both secondary and primary sources. Because costs tend to be higher for research based on primary data, researchers usually exhaust secondary data first. Often called desk research or library research, this approach depends on the availability and reliability of material. Secondary sources may include government 169 publications, trade journals, and data from international agencies or service establishments such as banks, ad agencies, and marketing research companies. Secondary Data. For any marketing research problem, the location and analysis of secondary data should be the first step. Although secondary data are not available for all variables, data can often be obtained from public and private sources.Increasingly, these sources are disseminating or selling their data over the Internet. Sources of secondary data for international markets include Web search engines, banks, consulates, embassies, foreign chambers of commerce, libraries with foreign information sections, foreign magazines, public accounting firms, security brokers, and state development offices in foreign countries. Marketers can also “eavesdrop” on the Internet. Every day customers comment online concerning products and services. By monitoring chat rooms and newsgroups, marketers can analyze comments to learn what their customers and their competitors are thinking. Many governments collect and disseminate information concerning foreign markets to encourage their national firms to export. To make access to information easier and more streamlined, the U.S. government combined the foreign market research of its various embassies, departments, and bureaus into a single export portal located at http://www.export.gov. Although designed for exporters, the site is useful to foreign investors as well. However, there are problems associated with the use of secondary data. They include 170 1) the fact that not all the necessary data may be available, 2) uncertainty about the accuracy of the data, 3) the lack of comparability of the data, and 4) the questionable timeliness of some data. In some cases, no data may have been collected. Primary Data. Often, in addition to secondary data or when secondary data are not available or usable, the marketer will need to collect primary data. Researchers can design studies to collect primary data that will meet the information requirements for making a specific marketing decision. Primary sources frequently reveal data that are simply not available from secondary sources. For example, Siar Research International undertook a survey on shaving habits in Central Asia and discovered that over 50% of Kazakhstan men shave every day, whereas most Azerbaijan men shave only once a week. For a global marketer, collecting primary data involves developing a research instrument, selecting a sample, collecting the data, and (often) comparing results across cultures. Observation is a valued methodology in international market research and increasingly attracts top management participation. For example, the new head of Wal-Mart International spent a few days in India in order to better understand Indian consumers. He looked in kitchens and bathrooms and noted that one family had three TV sets but no refrigerator. Similarly, the new chief marketing officer for McDonald’s in China began his job with a ten-day trip, living with families 171 across China, in order to become familiar with their eating and spending habits. Observation is particularly useful for revealing new ideas about consumer behavior that are free from the biases that researchers may bring to a study. Carefully crafted observational studies designed to understand subtle nuances in consumer behavior are sometimes referred to as consumer ethnographies and can prove useful in an increasingly complex global marketplace. Another technique that can be used for collecting marketing research data is focus groups. The focus group can be particularly useful at an early stage in the development of a new product to gain valuable insights from potential consumers. The researcher assembles a small group of carefully selected respondents to discuss a product. The number may vary by culture. The norm is 7 in Europe and 8 to 10 in the United States. A focus group of 6 or less may be more appropriate in Asia, where respondents may have more difficulty opening up in front of others. Focus groups may face government regulation in certain countries, for example in China and Vietnam the government restricts what can be asked in these groups and bans topics it considers too sensitive. Survey research is extensively used in international marketing research. It contributes to the etic approach but is also useful for testing emic insights developed via observation or focus groups. Survey research involves developing a research instrument, developing a sampling methodology, and then collecting the data. Each of these 172 tasks is more complex in the global context. The process of developing a research instrument such as a survey questionnaire must often be done with multiple markets in mind, and every effort should be made to capture the appropriate environmental variables. Even research aimed at a single market might be compared, at a later date, with the results of research in another country. Nonetheless translation of a questionnaire is prone to difficulties. Indeed, a major challenge of instrument design involves translation from one language to another. Accurate translation equivalence is important, first to ensure that the respondents understand the question and second to ensure that the researcher understands the response. After developing the instrument and translating it into the appropriate language, the researcher must determine the appropriate sample design. What population is under investigation? Is it housewives between 20 and 40 years old or manufacturing directors at textile plants? When investigating buyer behavior, researchers must remember that the purchase decision maker can vary by country. Researchers prefer using a probability sample in order to have greater assurance that sample results can be extrapolated to the population under investigation. The next task of the international market researcher is data collecting. An immediate problem may involve finding the right people to undertake the data collection. Finding the proper personnel in developing countries can be particularly challenging because most people may not even understand the concept of marketing research. Another problem in 173 developing countries can be the fact that many data collectors are poorly paid and are often paid by the response which can lead to collectors’ simply filling out questionnaires themselves. To ensure quality, supervisors can call back respondents on a random basis to confirm their responses. QUESTIONS FOR DISCUSSION 1. Identify the four steps of conducting a marketing research? 2. What does the etic approach assume? 3. What does the emic approach focus on? 4. How can you define: a) primary data collection, b) secondary data collection? 5. What techniques and instruments can be used for collecting marketing research data? 6. What are the challenges of using a marketing research questionnaire that is developed in the United States but will be used in Japan and Mexico as well? 174 VOCABULARY NOTES conduct 1.վարել 2.տանել 3.ղեկավարել implement կատարել, իրագործել, իրականացնել implementation իրագործում, կատարում time frame ժամանակահատված, ժամանակամիջոց etic approach էթիկ մոտեցում (երբ մի երկրի մշակույթի վրա հիմնված ուսումնասիրությունը կարող է տարածվել մյուսների վրա) emic approach էմիկ մոտեցում (երբ հետազոտությունը հիմնված է մեկ երկրի մշակութային համատեքստի վրա) reference 1.մեջբերում, հիշատակում, ակնարկ 2.առնչություն assume 1.ընդունել, ենթադրել 2.ստանձնել mere զուտ, սոսկ, միայն insightful խորաթափանց recreational թարմացնող, ուժերը վերականգնող moped մոպեդ, մոտորավոր հեծանիվ scooter 1.հրվող երկանիվ 2.մոտորասայլակ datum (հոգն. data) տվյալ(ներ), նախնական փաստ(եր) exhaust 1.սպառել, վատնել 2.ուժասպառ անել reliable հուսալի, վստահելի, արժանահավատ, ստույգ reliability հուսալիություն, արժանահավատություն, ստույգություն 175 disseminate ցանել, շաղ տալ, տարածել consulate հյուպատոսություն, հյուպատոսարան embassy դեսպանություն, դեսպանատուն chamber of commerce առևտրի պալատ eavesdrop ականջ դնել, թաքուն լսել accuracy ճշգրտություն, ճշտություն questionable կասկածելի, վիճելի, անվստահելի timeliness պատեհաժամություն usable գործածելի, օգտագործելի meet 1.բավարարել 2.հանդիպել, դիմավորել undertake 1.ձեռնարկել, նախաձեռնել 2.պարտավորվել, ստանձնել sample նմուշ, օրինակ, կաղապար observe 1.նկատել, ուշադրություն դարձնել 2.ուսումնասիրել, դիտել, զննել, հետևել observation 1.դիտում, զննում 2.դատողություն, դիտողություն bias 1. կանխակալություն 2.հակում 3.շեղում craft պատրաստել, սարքել subtle նուրբ, աննկատ consumer ethnography սպառողական ազգագրություն focus group ֆոկուս խումբ respondent պատասխանող appropriate հարմար, պատեհ, համապատասխան open up մուտքը բաց անել, մուտք գործելու հնարավորություն տալ 176 ban արգելել contribute to աջակցել, նպաստել, օժանդակել develop 1.զարգանալ, զարգացնել 2.մշակել questionnaire հարցաթերթիկ, անկետա prone to հակված, հակամետ, ենթակա equivalence համարժեքություն assurance երաշխիք, հավաստիացում 2.վստահություն assure հավաստիացնել, երաշխավորել, համոզել extrapolated արտարկված, արտամիջարկված personnel անձնակազմ supervise 1.հսկել, վերահսկել 2.կառավարել, տնօրինել supervisor 1.վերահսկող 2.ղեկավար, կառավարիչ, տնօրեն random պատահական confirm հաստատել, հավաստել, վավերացնել 177 UNIT 18. MARKETING SERVICES GLOBALLY The value of services produced in the world today now exceeds that of manufactured physical products, and international trade in services represents about 25% of total world trade. One of the largest categories of service exports is business services. These services are provided to firms, governments, or other organizations and include communication services, financial services, software development, database management, construction, computer support, accounting, advertising, consulting, and legal services. Many services are now aimed at multinational companies themselves. For example, IBM’s Global Services supplies multinational firms with a variety of information technology services, from running a customer’s information technology department to consulting on system upgrades and building global supply-chain management applications. Services aimed at business buyers that are most likely to be exported are those that have already met with success domestically. The experience of U.S.-based service companies can be used as an example. Some of the services that have been most successfully marketed abroad are financial services. Commercial banks such as Citibank, Chase, and Bank of America have built such extensive branch networks around the world that foreign deposits and profits make up nearly half of business volume. Advertising agencies have also expanded 178 overseas either by building branch networks or by merging with local agencies. Similarly, many U.S.-based marketing research firms have expanded into foreign countries. International accounting services have experienced tremendous growth as well. Overseas expansion is important to U.S.-based accounting firms for several reasons. Among the leading accounting firms, international revenue typically exceeds domestic revenue. Revenue is growing more rapidly abroad, and margins are also better for international operations. Many of the firms’ accounting clients have gone through globalization themselves and demand that their accountants have a global presence as well. Also, the liberalization of trade in Europe and elsewhere has boosted cross-national business, increasing demand for international accountants. The legal profession is also finding numerous opportunities overseas. Many U.S. law firms have opened up overseas branches, primarily in London, to capture business from investment banks and other financial services firms that must have a presence in both New York and London, major capital market centers. U.S. and British law firms have targeted the Japanese market since 2005, when Japan first allowed foreign law firms to hire Japanese lawyers, merge with Japanese firms and practice Japanese law. Trade in business services has traditionally taken place primarily among developed economies such as the United States, the Netherlands, France, Japan, the 179 United Kingdom, Germany, and Italy. However, service providers from developing countries are increasingly visible on the global stage. Forty-three of the top 225 international construction companies are now Chinese. These firms operate projects in 180 countries and account for 17.5% of construction projects in Asia, 9.5% in the Middle East, and 7.4% in Africa. China’s largest construction company, China State, has even entered developed markets, winning a contract to build a Marriot Hotel in New York and three schools in South Carolina. Marketing services to consumers abroad – such as gyms, cleaning services, restaurant chains, and insurance policies – has also expanded. Even healthcare has internationalized. Johns Hopkins, a premier American healthcare research hospital, has opened medical facilities in Dubai and Singapore. However, marketing services to consumers may turn out to be more difficult than selling to businesses. Since consumer behavior and usage patterns usually differ more between countries than business usage patterns do, many services have to be adapted even more to local conditions to make them successful. Because services have commonly been considered more culture bound than physical products, they have usually been located close to the consumer. Services differ from physical products in four key ways. They are intangible. They cannot be stored or readily displayed or communicated. Production and 180 consumption of serviced are simultaneous. Services cannot be inventoried, and production lines do not exist to deliver standardized products of consistent quality. Therefore, delivered services are heterogeneous in nature. Finally, because services cannot be stored, they assume a perishable nature. These unique qualities of services affect their international marketing. Guaranteeing service quality worldwide is more difficult, and there are fewer opportunities to realize economies of scale with services than with physical products. Back-stage elements of services (planning and implementation aspects of services invisible to the customer) are easier to standardize cross-culturally than front-stage elements of services (aspects of service encounters visible to the customer). For example, a fast-food provider such as McDonald’s might standardize purchasing and inventory procedures, but its counter personnel in Saudi Arabia would still need to speak Arabic, and its seating design would need to accommodate separate areas for men and women. Culture affects a number of aspects of the service experience, including customer expectations, customer satisfaction and loyalty, the waiting experience, and the recruitment of service personnel. Customer Expectations. Customers may exhibit different expectations concerning service levels. Department stores in Japan still employ women in kimonos to bow and greet customers as they arrive at the store. Service personnel are available and solicitous. In 181 the United States customers tend to be willing to forgo high levels of service in favor of low prices. They are more accustomed to self-service and may even feel nervous in the presence of hovering salespeople. Asian cultures traditionally expect and deliver high levels of service. Whereas an American saying purports that “the consumer is always right,” a similar saying in Japan states that “the customer is God.” Despite higher expectations of service, Asian business customers complain less when they receive poor service than customers in the West do. The Waiting Experience. Time is always an aspect of service, and attitudes toward the time it takes to be served vary across cultures. For example, eating a meal in European restaurants is supposed to be an enjoyable experience most often shared with friends. Diners may wish to sit for hours, while Americans would wonder what had happened to their waiter. Americans expect fast service at restaurants and like the bill to be dropped promptly on the table. What would be a good experience for a European diner would be a bad one for an American. Attitudes toward waiting in line vary as well. The English are famous for their orderly and patient waits in lines, or queues. In the French-speaking part of Switzerland, members of this otherwise polite population are likely to become a jostling mob when caused to wait at an entrance. In certain parts of the world, social norms may require that men and women stand in different lines. This can be observed at metro stops in Mexico City 182 during rush hours. In Egypt the imported design of having an “in” line leading to a service point and an exit leading away from it was reinterpreted as one line for men and one for women, with each line alternatively taking its turn at the service point. Service Personnel. When the local manager of a U.S.-based hotel chain was preparing to open a new hotel in Egypt, he was faced with a dilemma. American tourists would expect waitresses who could take their order in English. Egyptian women who spoke English almost invariably came from the upper classes. No young lady from those classes would be seen in public serving food to strangers. In a panic, the manager called friends and family and finally “borrowed” enough sisters, daughters, and nieces to staff the restaurant in time for opening day. Within a week, one waitress met and married a Saudi multimillionaire who came to eat at the restaurant. Whether apocryphal or not, the story spread like wildfire, and the manager never again had trouble recruiting waitresses! In many cultures, such as the Middle East, working in a service occupation is commonly considered akin to being a servant. This social stigma can make it hard to recruit qualified personnel for some positions, especially those that require higher levels of education as well as technical and interpersonal skills. Until recently, flight attendants for many airlines from the Middle East had to be imported from Europe, and nursing has never 183 achieved the status in the Middle East as it has in the West. Service personnel are critical for the delivery of services. As properly trained professionals may be difficult to find in some countries, multinational service firms may need to exert greater effort to recruit and train employees. However, many multinationals gain a recruiting advantage by offering salaries in excess of local competition. QUESTIONS FOR DISCUSSION 1. What types of services do business services include? 2. Why marketing services to consumers may turn out to be more difficult than selling to businesses? 3. How do business services differ from physical products? 4. Which are the a) back-stage, b) front-stage elements of services? 5. How do customer expectations vary in different countries? 6. How does the attitude toward the time vary across cultures? 7. What should be taken into consideration when recruiting service personnel? 184 VOCABULARY NOTES exceed անցնել, գերազանցել, գերակշռել database տվյալների շտեմարան, գրապահոց run այստեղ՝ ղեկավարել upgrade բարելավում merge միաձուլվել, միախառնվել elsewhere որևէ այլ տեղում, այլուր boost 1.աջակցել, պաշտպանել 2.նպաստել, խթանել 3.հրել hire վարձել premier առաջին, գլխավոր culture bound մշակույթով կապված, պայմանավորված intangible անշոշափելի store կուտակել, ամբարել, մատակարարել inventory գույքագրել, գույքացուցակ կազմել consistent 1.կայուն, հաստատուն 2.հետևողական heterogeneous տարասեռ, այլասեռ nature 1.բնույթ 2.բնություն 3.բնավորություն perishable շուտ փչացող, անցավոր guarantee երաշխավորել, վստահեցնել back-stage 1.կուլիսների ետևում, ետնաբեմում 2.չերևացող front-stage 1.բեմի առջևի մասում 2.երևացող counter վաճառասեղան accommodate 1.հարմարեցնել 2.բավարարել 3.տեղավորել 185 loyalty հավատարմություն, օրինապահություն recruit 1.հավաքագրել 2.կազմավորել 3.ներգրավել recruitment հավաքագրում, շարքերի համալրում bow խոնարհվել, գլուխ տալ solicitous հոգատար, հոգ տանող forgo 1.հրաժարվել, հետ կանգնել 2.խուսափել, զգուշանալ hovering շուրջը պտտվող purport 1.ասել 2.նշանակել, իմաստ ունենալ 3.ներկայացնել be supposed to do sth պարտավոր լինել մի բան անելու enjoyable դուրեկան, հաճելի experience 1.փորձառություն, կյանքի փորձ 2.դեպք, իրադարձություն promptly 1.արագորեն 2.ճշտորեն, ճիշտ patient համբերատար, հանդուրժող line 1.գիծ 2.շարք, շարան 3.հերթ queue հերթ otherwise 1.այլապես 2.մնացած առումներով jostle 1.հրել, հրմշտել 2.կռվել mob խաժամուժ, հուզված ամբոխ reinterpret վերամեկնաբանել, վերաբացատրել dilemma երկընտրանք, դիլեմա invariably անփոփոխ կերպով, մշտապես, անընդհատ 186 niece քրոջ/եղբոր աղջիկ staff հաստիքները համալրել, անձնակազմով ապահովել apocryphal անհավաստի, կասկածելի wildfire կայծակ akin 1.հարազատ, ազգակից 2.նման stigma խարան, խայտառակություն interpersonal միջանձնային skill 1.հմտություն, վարպետություն, կարողություն 2.որակ critical բեկումնային, վճռական, շրջադարձային exert գործադրել, կիրառել in excess of 1.ավելի քան 2.շռայլություն 187 UNIT 19. BRANDING DECISIONS Whether marketing products or services, global firms must manage and defend the value of their brands. Brands provide a name or symbol that gives a product (or service) credibility and helps the consumer identify the product. A brand that consumers know and trust helps them make choices faster and more easily. A globally recognized brand name can be a huge asset even when a firm enters new markets. For example, when McDonald’s opened its doors in Johannesburg, South Africa, thousands of people stood in line. When Coke entered Poland, its red and white delivery trucks drew applause at traffic lights. Business Week ranks the top global brands using a methodology developed by Interbrand Corporation. This methodology estimates the net present value of future sales of the brand taking into consideration factors such as market leadership, stability, and global reach - the brand’s ability to cross geographical and cultural borders. Furthermore, all brands must be global in nature – at least a third of brand revenues must be derived outside the firm’s domestic market. It should be mentioned that the top global brands are U.S. brands (Coca-Cola, IBM, Microsoft, Intel, Disney, Google, McDonald’s, Gillette, Apple, Nike, Pepsi, Marlboro, American Express), followed by European brands (Nokia, Mercedes-Benz, BMW, Louis Vuitton, H&M, HSBC, Nescafe), although a 188 number of Asian companies, such as Toyota, Honda, Sony, and Samsung, have built strong global brands. Selecting Brand Names. Selecting appropriate brand names on an international basis is substantially more complex than deciding on a brand name for just one country. Typically, a brand name is rooted in a given language and, if used elsewhere, may have either a different meaning or none at all. Ideally, marketers look for brand names that evoke similar images or emotions around the world. Brand name and symbol selection is critical. International marketers must carefully evaluate the meanings and word references in the languages of their target audiences. Can the name be pronounced easily, or will it be distorted in the local language? A good example of brand adaptation is the name choice for Coca-Cola, which means “tasty and happy” in Chinese. Mercedes-Benz’s Chinese name means “striving forward fast,” and Sharp’s means “the treasure of sound”. However, branding in Asia, and especially in China, may rely even more on the visual appeal of logos than on brand names. The simple graphical logos of Volkswagen, Mercedes-Benz, and Lexus are rated high, whereas the icons of Cadillac, General Motors, and Fiat are less appealing. Global marketers are constantly confronted with the decision of whether the brand name needs to be universal. Brands such as Coca-Cola and Kodak have universal use and an integrated international marketing strategy. Of course, using the same name elsewhere is 189 not always possible. In such cases different names have to be found. Procter & Gamble had successfully marketed its household cleaner, Mr.Clean, in the United States for some time. This name had no meaning except in countries using the English language, and it prompted the company to make several adaptations abroad, such as Monsieur Propre in France and Meister Proper in Germany. In all cases, however, the symbol of the genie with gleaming eyes retained because it evoked similar responses abroad and in the United States. Google also opted for a local name for the Chinese market. Its new name, Gu Ge, means “Harvest Song” in Chinese. Before the change, some Chinese citizens had dubbed the company Gougou (“doggy”) or Gugou (“old hound”). As noted above, a good brand name should be easy to read and pronounce while suggesting product benefits. However, it should not convey negative images in any market where it might be sold. There are dozens of stories about companies using a global name with negative or offensive meanings in another language. For example, a global construction equipment company marketed one piece of equipment as the “Grab Bucket” to describe its use in English. The company was surprised to discover that in Germany the name was interpreted to mean the sale of cemetery flowers because grab was interpreted as “grave” and bucket as “bouquet”. Given the almost unlimited possibilities for names and the restricted opportunities to find and register a desirable one, international companies devote consi190 derable effort to the selection process. Some consulting companies specialize in finding brand names with worldwide application. These companies bring citizens of many countries together and, under the guidance of a specialist, they are asked to state names in their particular languages that would combine well with the product to be named. Speakers of other languages can immediately react if a name sounds unpleasant or has distasteful connotations in their language. After some sessions, the consultants may accumulate as many as 1,000 names that will later be reduced to 500 by a company linguist. The client company then is asked to select 50 to 100 names for further consideration. At this point the names are subjected to a search procedure to determine which have not been registered in any of the countries under consideration. In the end, only about 10 names may survive this process. From these, the company will have to make the final selection. Although this process may be expensive, the cost is generally considered negligible compared with the advertising expenditures invested in the brand name over many years. When confronted with the need to search for a brand name with global applications, a company can consider the following: An arbitrary or invented word not to be found in any dictionary of standard English (or other language), such as Toyota’s Lexus. A recognizable English (or other language) word, but one totally unrelated to the product in question, such as the detergent Cheer. 191 An English (or other language) word that merely suggests some characteristic or purpose of the product, such as Mr.Clean. A word that is evidently descriptive of the product, although the word may have no meaning to people unacquainted with English (or the other language), such as the diaper brand Pampers. A geographic place or a common surname, such as Kentucky Fried Chicken. A device, design, number, or some other element that is not a word or a combination of words, such as the 3M Company. At times, firms may choose to change the name of a brand in local markets or even worldwide. This is not an easy choice. If a product has substantial market share in one or more markets, changing its name can confuse or even alienate consumers. Colgate-Palmolive, the large U.S.-based toiletries manufacturer, purchased the leading toothpaste brand in Southeast Asia, “Darkie”. With a minstrel in blackface as its logo, the product had been marketed by a local company since 1920. After the acquisition, however, Colgate-Palmolive came under pressure from many groups in the United States to use a less offensive brand name. The company sponsored a large amount of research to find both a brand name and a logo that were racially inoffensive and yet close enough to the original to be recognized quickly by consumers. The company changed the name to “Darlie” after an 192 exhaustive search. Still, in some markets where the “Darkie” brand had as much as 50% market share, it was a substantial marketing challenge to convert brand loyalty from the old to the new name. The concept of global branding goes beyond simply establishing a global brand name. Yet experts disagree on what exactly makes a global brand. Is it global presence or global name recognition? There are certainly brand names such as Coca-Cola that are well known in most countries of the world. Does the name connote similar attitudes worldwide? Is the product the same? Is the brand a powerful player in all major markets? Heineken qualifies on the first two conditions, but not on the third. It has positioned itself as a quality imported beer in its many export markets. The beer and the bottle remain the same across markets. However its lack of adaptation has kept it a well-known but minor player in the various national markets. Firms that develop global brands are said to follow a global brand strategy which means that a firm must identify common customer needs worldwide and determine how the global brand can deliver both functional and emotional benefits to these customers. For many multinational firms, global branding offers a way to cut costs and present a consistent consumer communication about the brand. Global branding became popular as a strategy among transnational companies as early as the mid-1980s. Today, however, multinational firms have responded with more hybrid global strategies, 193 through which they attempt to combine the quality improvements and cost savings of backstage activities such as technology, production, and organization, with elements more tailored to local tastes, such as adapting product features, distribution, and promotion. QUESTIONS FOR DISCUSSION 1. Why do you think Poles already recognized the Coke name and logo when the product was first introduced in Poland? 2. How does Business Week rank top global brands? 3. How are brand names selected? 4. When can a brand name be universal and when should it be adapted? 5. What associations should a brand name carry? 6. How are new brand names found? 7. What can a company consider when confronted with the need to search for a brand name? 8. What does a global brand strategy mean? 194 VOCABULARY NOTES whether 1.թե, արդյոք 2.անկախ այն բանից թե… credibility վստահելիություն, հավաստիություն applause ծափահարություն rank 1.դասել, դասակարգել 2.շարք կանգնել/կանգնեցնել border սահման substantially 1.ըստ էության, էապես 2.զգալիորն 3. ամուր կերպով be rooted in ծագել, առաջանալ, սկիզբ առնել evoke առաջացնել, հարուցել, զարթեցնել logo լոգո, պատկերանիշ icon 1.պատկեր 2.սրբապատկեր genie ջին (արաբական հեքիաթներում) gleaming շողացող, փայլող, փայլուն retain պահել, պահպանել, հիշողության մեջ պահել opt ընտրել, ընտրություն կատարել harvest բերք, բերքահավաք dub 1.փոխակերպել 2.կրկնօրինակել, պատճենել doggy շնիկ hound որսկան շուն convey 1.փոխանցել, հաղորդել 2.հայտնել 3.արտահայտել offend վիրավորել, անպատվել, նեղացնել 195 offensive 1.վիրավորական 2.տհաճ, անախորժ grab շերեփաթիակ, էքսկավատոր cemetery գերեզմանատուն grave գերեզման bouquet ծաղկեփունջ register գրանցել, արձանագրել guidance 1.ղեկավարություն 2.ցուցում 3.խորհուրդ distasteful զզվելի, անախորժ, տհաճ, վիրավորական connotation լրացուցիչ իմաստ session նիստ, նստաշրջան under consideration քննարկվող, քննարկման մեջ negligible աննշան, չնչին, անարժեք confront 1.դեմ առ դեմ կանգնել 2.դիմակայել 3.դիմադրել (դժվարություններին) arbitrary 1.պատահական, կամայական 2.քմահաճ detergent մաքրող միջոց, լվացող նյութ cheer 1.հավանության բացականչություն 2.ողջույն merely միայն, պարզապես unacquainted անծանոթ confuse 1. խառնել, խճճել 2.շփոթության մեջ գցել, շփոթեցնել alienate 1.օտարացնել, հեռացնել 2.խորթացնել, թշնամացնել toiletries հիգիենայի պարագաներ bucket 1.շերեփ 2.դույլ 196 minstrel գուսան, աշուղ, երգիչ racially ռասայականորեն inoffensive անվնաս, անմեղ, անվնասակար exhaustive 1.սպառիչ, համակողմանի 2.ուժասպառ անող connote լրացուցիչ իմաստ ունենալ hybrid հիբրիդ, խառնածին 197 UNIT 20. ORGANIZING FOR GLOBAL MARKETING An important aspect of global marketing is the establishment of an appropriate organization. The organization must be able to formulate and implement strategies for each local market and for the global market as well. The objective is to develop a structure and control system that will enable the firm to respond to distinct variations in each market while applying the relevant experience that the company has gained in other markets and with other products. The success of a global strategy will be acutely influenced by the selection of an appropriate organization to implement that strategy. The structure of an international organization should be congruent with the tasks to be performed, the need for product knowledge, and the need for market knowledge. The ideal structure of such an organization should be a function of the products or services to be sold in the marketplace, as well as of the external and internal environments. Theoretically, the way to develop a global marketing organization is to analyze the specific tasks to be accomplished within an environment and then to design a structure that will support these tasks most effectively. As the internal and external environments change, companies will need to reevaluate that structure. The search for an appropriate organizational structure must balance local responsiveness against global integration. It is important that 198 global managers understand the strengths and weaknesses of different organizational structures as well as the factors that usually lead to changes in the structure. Corporate Goals. Every company needs a mission. The mission is business’s framework – the values that drive the company and the vision it has for itself. The mission statement is the glue that holds the company together. Yahoo asserts that its mission is “to connect people to their passions, their communities, and the world’s knowledge.” Reconsidering a firm’s mission can result in organizational change. When Bayer introduced a new mission statement emphasizing innovation and sustained growth, the company also announced a structural realignment to better attain these goals. Three global product divisions – health care, nutrition, and hightech materials – were established. After declaring its mission, no company should begin establishing an international organization until it has reviewed and established its goals and strategies. Some global firms even include strategy statements in their missions. Corporate leaders have, at times, developed strategic visions with slogans such as “Beat Xerox” for Canon. If the head of the company can instill this sense of winning throughout the firm, it will inspire the organization to excel and achieve far greater goals. Corporate Worldview. Corporate management can adopt one of several worldviews concerning global 199 markets. These worldviews, or orientations, will significantly affect the choice of organizational structure. Some firms adopt an ethnocentric orientation. Management is centered on the home market. Ideas that emanate from there are considered superior to those that arise from the foreign subsidiaries. Headquarters tells its subsidiaries what to do and solicits little or no input from the subsidiaries themselves. Top managers in foreign subsidiaries are most often managers sent from headquarters on relatively short-term assignments. Alternatively, corporate management can take a polycentric orientation, wherein each market is considered unique. This is at the heart of the multidomestic strategies discussed in UNIT 2. Local subsidiaries are given great leeway to develop and implement their own strategies. Little or no interdependencies arise among subsidiaries. Management positions in local subsidiaries are usually filled by local nationals. Some polycentric firms evolve a focus that is regional rather than national. Geographic regions such as Europe and Latin America, are seen as possessing unique features that require separate marketing strategies. Decision making becomes centralized at the regional level, but regions still remain relatively independent of headquarters and of one another. A geocentric orientation returns power to global headquarters, but this orientation is very distinct from an ethnocentric orientation. A geocentric firm focuses on global markets as a whole rather than on its domestic market. Good ideas can come from any country, and the firm strives to keep communication lines open among its various units. 200 Even top management at corporate headquarters is likely to come from many nations. Most important, all national units, including the domestic one, must consider what is best for the whole organization and act accordingly. Other internal factors can also affect the international marketing firm. These factors include the volume and diversity of the firm’s international business, its economic commitment to international business, the available human resources, flexibility within the company, and home-country culture. The size and importance of a firm’s international sales affect its organizational structure. If only a small percentage of sales (1-10%) is international, a company will tend to have a simple organization such as an export department. As the proportion of international sales increases relative to total sales, a company is likely to evolve from having an export department to having an international division and then to having a worldwide organization. Companies may even consider moving global headquarters out of the home country as overseas sales become increasingly important. Oil services company Halliburton moved its global headquarters from Houston to Dubai to be closer to its growing business in the Middle East and Asia. As the number and diversity of international markets increase, it becomes necessary to have a more complex organization to manage the marketing effort, and it requires a larger number of people to understand the markets and implement the strategies. The level of economic commitment is decisive. A company that is 201 unable and unwilling to allocate adequate financial resources to its international efforts will not be able to sustain a complex or costly international structure. The less expensive organizational approaches to international marketing usually result in less control by the company at the local level. It is extremely important to build an organization that will provide the flexibility and resources to achieve the corporation’s long-term goal for international markets. Available and capable human resources are just as vital to a firm as financial resources. Hiring local executives is also difficult, as competition for such people can be extremely intense. Motorola considers hundreds of executives to try to identify the best candidates with the necessary international management skills to run a global business. Since people are such an important resource in international organizations, a lack of appropriate personnel can constrain a firm’s organizational growth. When a company devises an organizational structure, it must build in some flexibility, especiallyto be prepared in case reorganization becomes necessary in the future. The structure must be flexible enough to respond to the needs of consumers and the challenges of global competitors. Even companies that establish a perfect design for the present find themselves in trouble later on when the firm grows or its market changes. A number of external factors can affect how global organizations are structured and managed. The most important of these are geographic distance, time zone differences, types of customers, and government 202 regulations. In the international environment each issue should be examined to determine its effect on the organization. Technological innovations have somewhat eased the problems associated with geographic distance. Companies, in the United States and other developed countries, enjoy such conveniences as e-mail, fax machines, the Internet, videoconferences, mobile data transmissions, rapid transportation. However, these benefits cannot be taken for granted in international operations. Distance becomes a distinct barrier when operations are established in less developed countries where the telecommunications infrastructure may be more primitive. Moreover, companies invariably find it necessary to have key personnel make trips to engage in face-to-face conversations. Organizations in the same region are often grouped together to help minimize travel costs and the travel time of senior executives. Technology has shortened, but not eliminated the distance gap. One problem even high technology cannot solve is time differences. Managers in New York who reach an agreement over lunch will find it hard to finalize the deal with their headquarters in London until the following day because, by that time, most executives in England will be on their way home. The five-hour time difference results in lost communication time and impedes rapid results. Email has contributed substantially to the interaction among far-flung units, but adaptations still need to be made. Brady Corporation of Milwaukee produces printing 203 equipment. About 45% of its sales are outside the United States. Managers in Milwaukee commonly take calls at 6 a.m. and make calls late at night to catch the company’s Asian managers during their workdays. Companies may need to take their “types of customers” into account in structuring their global marketing organizations. Companies that serve very few, geographically concentrated global customers will organize their global marketing efforts differently from firms that serve a large number of small customers in different countries. For example, if a firm has key global customers, it may adjust its organization and select its office locations according to where its customers are located. Many companies that sell equipment or parts to automotive firms maintain marketing units near major concentrations of automotive activity, such as Detroit in the United States and Stuttgart in Germany. On the other hand, companies that sell to large numbers of consumers tend to maintain more regional, or even country-specific organizations, with less concentration. Similarly, if customer needs or competition varies greatly from country to country, there is less impetus to centralize. Government regulations are a decisive factor when establishing the structure of the global organization. Laws involving imports, exports, taxes, and hiring differ from country to country. Local taxes, statutory holidays, and political risk can deter a company from establishing a subsidiary or management center in a country. Some countries require a firm that establishes plants on their 204 territory to hire, train, and develop local employees and to share ownership with the government or local citizens. These requirements for local investment and ownership may dictate an organization that allows greater local decision making. QUESTIONS FOR DISCUSSION 1. What is a company’s mission? 2. How can you define a company’s worldviews concerning global markets? 3. What other internal factors affect an international marketing firm? 4. List some external factors affecting the structure and management of global organizations. 5. How do government regulations affect the structure of the global organizations? 205 VOCABULARY NOTES distinct 1.տարբեր, առանձնահատուկ 2.պարզ, հստակ, պարզորոշ variation 1.փոփոխություն 2.շեղում relevant տեղին, հարմար, պատշաճ, համապատասխան gain 1.վաստակել, ձեռք բերել, ստանալ 2.շահել 3. օգուտ ստանալ acutely 1.ուժգնորեն 2.սուր, սրընթաց ձևով congruent 1.համապատասխան 2.ներդաշնակ accomplish 1.կատարել, իրագործել, վերջացնել 2.հաջողվել, կարողանալ reevaluate վերագնահատել responsiveness 1.զգայունակություն, նրբանկատություն, 2.պատրաստակամություն framework կմախք, հենք, շրջանակ vision 1.տեսլական 2. տեսադաշտ 3.մտահորիզոն mission statement առաքելության հայտարարագիր glue սոսինձ assert պնդել, հաստատել, հայտարարել passion 1.բուռն զգացմունք 2.կիրք, խանդավառություն community 1.համայնք 2.ընդհանրություն sustained growth կայուն աճ 206 realignment դիրքը փոխելը/վերականգնելը at times երբեմն, մեկ-մեկ slogan կարգախոս instill աստիճանաբար ներշնչել sense 1.զգացում 2.առողջ դատողություն, բանականություն inspire ներշնչել, ոգևորել, ոգեշնչել excel 1.գերազանցել 2.աչքի ընկնել corporate worldview կորպորատիվ աշխարհայացք ethnocentric ազգայնական, ազգայնակենտրոն emanate 1.արձակվել, տարածվել 2.սկիզբ առնել solicit 1.պահանջել 2.դիմել, խնդրել alternatively 1.այլընտրապես 2.փոխբացառող ձևով 3.ոչ ավանդաբար polycentric բազմակենտրոն wherein 1.որտեղ 2.ինչ առումով unique եզակի, միակ, անզուգական, յուրահատուկ leeway գործողությունների ազատություն interdependency փոխադարձ կախվածություն evolve զարգանալ, ծավալվել, զարգացնել geocentric երկրակենտրոն strive ջանալ, աշխատել, ջանք գործադրել internal ներքին diversity 1.բազմազանություն 2.շարք, բազմություն worldwide համաշխարհային, աշխարհով մեկ 207 decisive 1.վճռական, որոշիչ 2.վերջնական sustain 1.պահել 2.պահպանել 3.տանել, դիմանալ capable ընդունակ, շնորհալի vital էական, անհրաժեշտ, կենսական constrain 1.հարկադրել, սահմանափակել 2.ճնշել, զսպել external արտաքին transmission հաղորդում, փոխանցում benefit 1.օգուտ, շահ 2.նպաստ, բարեգործական միջոցառում take for granted 1.ինքնին ենթադրվող համարել, սովորական համարել 2.ապացուցված/հնարավոր համարել invariably անփոփոխ կերպով, մշտապես, անընդհատ finalize 1.ավարտել, վերջնական տեսք տալ 2.համաձայնեցնել impede խանգարել, խոչընդոտել, դժվարացնել far-flung 1.հեռավոր, հեռահաս 2.լայնածավալ, մեծածավալ impetus շարժիչ ուժ, խթան, ազդակ, դրդապատճառ statutory օրենքով սահմանված/նախատեսված deter 1.ետ պահել, ետ կանգնեցնել, համոզել 2.կասեցնել, արգելել 208 CASE STUDIES 1. FLYING TO ARMENIA British Airways (BA) is one of the world's largest international airlines, flying passengers to 143 destinations in 69 countries. One such destination was the Republic of Armenia, a small country at the crossroads of Europe and Asia. The whole territory of Armenia is only 11,506 square miles with a population of three million. However, an additional seven million ethnic Armenians live outside Armenia. This Armenian diaspora remains intimately tied to its homeland across generations. Armenian communities around the world attend Armenian churches, teach their children the Armenian language, and celebrate Armenian national and cultural days with great passion. Many Armenians live in various countries of the Middle East and Europe, and one of the largest Armenian communities resides in the United States. During the past 20 years, Armenia has been undergoing a rapid but difficult transition from a Soviet, centrally planned economy to a democratic society with a market economy. The 1990s were particularly difficult for the country. Armenia shared all the economic problems that resulted from the breakup of established economic relations among what had been the Soviet republics. In addition, it faced an electricity crisis combined with a 209 military territorial conflict with neighboring Azerbaijan. These problems led to a marked lowering of the standard of living of the population in the country and to overall economic difficulties. However, with foreign aid from the International Monetary Fund, the World Bank, the European Union, and the U.S. government, as well as substantial assistance from the diaspora, the economy began to stabilize. By the end of the decade, a legal and regulatory framework for the private sector was being created, and an increasing number of multinational corporations, including Coca-Cola, Adidas, Samsung Electronics. Mercedes-Benz, and Kodak, had established a presence in the country. Armenia had attracted several international airlines that competed alongside its national carrier, Armenian Airlines. These carriers included BA, Swiss Air, Austrian Air, Russian Aeroflot, and Syrian Air. Although traveling was not something many Armenians could afford, it remained the only viable way to travel in and out of the country. Armenia was landlocked, and traveling through neighboring countries was not practical because of poor transportation infrastructure and intermittent political tensions. Most air travelers were employees of international aid organizations operating in Armenia, business travelers, or diaspora Armenians visiting their homeland. British Airways first entered the Armenian market with twice-weekly service from London to Yerevan, the capital of Armenia. Along with Swiss Air and Austrian Air, 210 BA charged higher prices than Armenian Airlines, Aeroflot, or Syrian Air. BA embarked on several successful promotions to attract customers, to establish brand recognition in the market, and to enhance its international reputation as a caring company. To mark the second anniversary of its instituting flights between London and Yerevan, BA put together a program of events designed to support cultural and humanitarian programs in Armenia. For example, it supported the Third International Chamber Music Festival, which took place in Yerevan, by bringing two leading Armenian musicians cellist Alexander Chaoshian and pianist Seda Danyel from London to Yerevan to participate in the event. The company also announced a special discount rate to about a dozen destinations, substantially increasing the number of tickets sold. During this campaign, BA contributed $10 from the price of each economy-class ticket and $50 from the price of each business-class ticket to one of Armenia's largest orphanages. (For comparison, per-capita spending for a child in such institutions was around $700 per year.) A special ceremony was held to bestow the funds on the orphanage. For that ceremony, the BA hot-air balloon, a familiar ambassador around the world, was brought to Armenia for the first time. The balloon was set to spend a day in Opera Square, the foremost center for cultural activities in Yerevan. Prior to that, BA ran a competition in which questions about BA were posed in the local media. People who phoned with the right answers could meet the crew of the balloon and go for a short ride. This event 211 was widely covered in the Armenian press and on the television news. British Airways also introduced the Executive Club, BA's frequent-flyer program, to the Armenian market. As with other frequent-flyer programs, members of the Executive Club could earn free flight miles by traveling via BA as well as using certain hotels and car rentals. Club membership also offered a variety of other benefits, such as priority on flight waiting lists and a special agent to handle inquiries. British Airways ran a special promotion of the Executive Club at the elite Wheel Club, a favorite dining place of expatriates working in Armenia, especially English speakers. Any member of the Executive Club who ate at the Wheel received an entry into a prize drawing. Anyone who was not a member of the Executive Club could join at the Wheel. The top prize was a pair of tickets to any destination. British Airways also ran a "Where in the Worlds" competition. People were invited to write and say where in the world they dreamed of spending Valentine's Day with the person they loved and why they wanted to go there. The three most creative, funny, or touching entries won a pair of tickets to the dream destination. The event was announced on Hay FM, one of Armenia's most popular radio channels among young people. The event enjoyed a high response rate and engendered considerable word of mouth among Hay FM listeners, as well as publicity in the local press. 212 Discussion Questions 1. For each of the five promotions discussed in the case, identify the target market, explain the motivation behind the promotion, and suggest ways in which to measure the success of the promotion. 2. Why do you think each of these promotions worked well in the Armenian market? 3. Would these promotions be as successful in other countries? Why or why not? 213 2. BANANA WARS For nearly a decade, the EU and the United States were engaged in a heated trade dispute over bananas. The EU had introduced tariffs and quotas that discriminated in favor of bananas grown in former European colonies and dependencies located in the Caribbean and Africa. The new rules were favorable to the European-based banana companies, whose production was heavily located in these preferred regions. However, the new rules were disadvantageous to the U.S.-based companies, such as Chiquita and Dole, that owned banana plantations in Latin America. Dole responded to the crisis by shifting more banana production to West Africa. Over the next few years, Dole's market share in European bananas actually increased. Chiquita, however, asked the U.S. government to bring a complaint against the EU under GATT. The United States won two subsequent suits, but the EU used its veto power under GATT to avoid compliance. However, these veto rights were rescinded under the WTO. The WTO then ruled on the case again in favor of the United States, calling Europe's quota system blatantly discriminatory. This time the United States was allowed to employ sanctions against the EU if it failed to comply. The EU proceeded to make what most observers believed to be cosmetic, ineffectual changes to its banana importation rules. In retaliation, the United States announced that it would levy 100 percent tariffs on 17 214 categories of European goods, including printed cards, cashmere clothing, coral jewelry, and chandeliers. EU officials objected, claiming that the United States was not authorized to determine whether the EU's actions were insufficient and thus was required to take the case back to the WTO. The U.S. government believed this was a delaying tactic that the EU could employ again and again. The WTO supported the U.S. position and approved the retaliatory actions. In Europe, the U.S. sanctions were called "silly" and a "return to the Middle Ages." Many, EU manufacturers were angry that they were made to suffer over a trade issue that did not concern them. For example, thousands of jobs were at risk in the Belgian biscuit industry, where some companies exported 20% of their production to the United States. The sanctions also threatened Asian investors in Europe such as the British battery subsidiary of the Japanese Yuasa Corporation, which had only recently developed export sales to the United States. Now that effort would be for nothing. Only products from Denmark and the Netherlands escaped sanctions because these countries had lobbied the EU for compliance with the banana decision. Some questioned why the United States was pursuing the banana case so vehemently. After all, no jobs were at risk in the United States. Still, Chiquita's lobbying efforts paid off. The head of Chiquita was a major donor to both the Republican and Democratic parties in the United States. A lobbyist for Greek feta cheese was less successful in his efforts to keep feta off 215 the sanction list, despite his argument that the pain would be borne by Greek Americans, for whom feta was a dietary staple. The United States insisted that the issue at stake in the banana wars was nothing less than the credibility of the WTO. Europe could not flaunt a WTO decision. Ironically, the U.S. trade representative had angered Europeans five years earlier by stating that WTO membership would not obligate America to obey its rules. The United States could defy WTO rules and accept retaliation from an injured party. After all, few countries would wish to initiate a trade war with the United States. Despite this rhetoric, the United States had complied with WTO rulings against it, such as one concerning U.S. restrictions affecting the import of oil from Brazil and Venezuela. The United States was not alone in its attempts to receive redress for losses in the EU banana market. The WTO arbitration panel allowed Ecuador to impose over $200 million in sanctions, an amount equivalent to its banana exports shut out of EU markets. However, Ecuador annually imported products worth only $62 million from the EU, and these imports were mainly medicines. Consequently, the WTO authorized Ecuador to impose punitive tariffs on service providers and copyrighted material, including compact discs, from the EU. The EU trade ambassador announced that the EU would monitor Ecuador's penalties and challenge them if they were excessive. 216 Discussion Questions 1. Who are the winners and the losers in the banana wars? 2. Is the U.S. response silly? 3. What potential threats to the WTO are illustrated by the banana wars? 217 3. BANNING BARBIE T he Institute for Intellectual Development of Children and Young Adults has declared Barbie a cultural threat to Iran. The tall, blond, blue-eyed doll represents the American woman who never wants to get old or pregnant. She wears makeup and indecent clothes. She drinks champagne in the company of boyfriend doll Ken. To replace Barbie, the Institute designed Sara. Sara has darker skin and black hair, and she wears the traditional floor-length chador. Sara has no boyfriend doll. The idea of having a boyfriend is a concept not acceptable to most Middle Eastern families. Sara's brother, Dara, is dressed in the coat and turban of a Muslim cleric or mullah. Since its Islamic Revolution over 30 years ago, Iran has been particularly wary of Western influences. A Coca-Cola factory was shut down for "promoting American culture." A call to ban Barbie is not popular with all Iranians, however. Some toy-store owners think Barbie is about business, not culture, and many moderate Iranians oppose attempts to protect national culture by force and prohibitions. Barbie's continued popularity results in the doll being smuggled into Iran. For many years, Barbie remained the most popular doll among affluent consumers in the neighboring Arab world. In an attempt to give Arab girls a feeling of pride in belonging to their own culture, the Arab League sponsored feasibility studies to interest private-sector investors in producing the Leila doll. Leila was envisioned to be about ten years old with black eyes and hair. Her 218 wardrobe options would include Western outfits as well as traditional dresses from the various Arab regions, such as Egypt, Syria, and the Gulf states. Similar to Sara, Leila would enjoy government subsidies and sell at about $10, whereas Barbie can sell for between $30 and $150 in various capitals of the Middle East. Nonetheless, Leila was never launched. In the United States, competition to Barbie has also emerged. A manufacturer in Livonia, Michigan, introduced a Razanne doll for Muslim Americans. The doll's creator claimed that the main message of the doll was that what matters is what's inside you, not how you look. Razanne has the body of a preteen and comes in three types: fairskinned blond, olive-skinned with black hair, and black skin with black hair. Her clothing is modest but her aspirations are those of "a modem Muslim woman." For example, there is a Girl Scout Razanne and a Teacher Razanne. However, it would be a doll designed and sold by Newboy Studios from the Arab private sector who would finally dethrone Barbie among Muslim consumers in Arab countries. Brown-haired Fulla has a beautiful face and is shaped similarly to Barbie but with a more modest bosom. Her outside wear keeps her fully covered. The skirts of her inside clothes fall just below her knee. Similar to Sara, Fulla doesn't have a boyfriend. Though more expensive than Sara, Fulla sells for half the price of Barbie. Fulla is supported by television commercials that show her praying, reading a book, and baking a cake for a friend. In addition the remarkably successful doll has 219 dozens of related products, such as bicycles, cereal, chewing gum, and stationary. As Fulla prepared to make her Western debut at the Toy Fair in New York, one NewBoy manager declared Fulla to be a global doll not a Muslim doll. He noted that Fulla is sold in India wearing the traditional sari. Everyone doesn't agree, however. There have been calls to ban Fulla in France where some see Fulla as an Islamist plot to reach children in their homes and divide the nation between a majority who play with Barbie and a Muslim minority who play with Fulla. Discussion Questions 1. Why was Barbie popular in both France and the Middle East? 2. Should Muslim countries ban Barbie? Should France ban Fulla? Why or why not? 3. Why do you think Fulla was far more successful than Sara or Razanne? 220 4. WORK VERSUS LEISURE Unlike their counterparts in many countries, employers in the United States are not required by law to provide paid vacations for their employees. In fact, American culture in general appears suspicious of leisure. Some attribute this to the Protestant work ethic. Many Americans fill their free time with intellectually or physically demanding hobbies or volunteer work. Even on vacation, Americans stay in touch with the workplace via their cellular phones and laptop computers. Europeans, on the other hand, hold leisure in high regard. By law, France has the shortest work week in Europe. In addition, the French spend the most time sleeping of all industrial nations. They also spend over two hours a day eating, twice the time Americans spend eating. In Germany, however, longer work weeks may soon be the norm. To Germans, prosperity once meant less work and more leisure time. However, a low birthrate has resulted in fewer workers supporting more and more retired Germans in the generous state pension system. Germans in the workforce may soon have to work longer hours to support the retirees. The restful German Sunday is also under attack. Sunday is designated "a day for spiritual reflection" in the German constitution. This custom results in a ban on Sunday shopping. Since the reunification of Germany, former East Germans who grew up in a largely atheistic society have waged war on Sunday closings. East German cities routinely exploit loopholes in the law to 221 allow stores to stay open; one loophole that is commonly invoked allows sales to tourists. Department stores in Berlin now welcome tens of thousands of Sunday shoppers, using the argument that their products could be of interest to tourists. Union leaders, bent on protecting leisure time for their members, have joined churches in denouncing this trend. If Germans may soon work longer hours, Japanese are considering working less. Japanese workers take an average of only nine vacation days a year. However, many have been reconsidering the value of leisure since their prime minister suffered a stroke brought on by overwork. Japan has seen a sharp increase in suicides or death caused by overwork. Japan has also introduced "Happy Mondays," creating longer weekends by switching certain public holidays from Saturdays to Mondays. The government hopes that more holidays will deliver the added bonus of encouraging Japanese to spend more money in pursuit of leisure and thus boost the economy. In fact, as many Asian countries have become more prosperous, employees now work less for the same salaries. As a result, the five-day work week is becoming the norm across much of Asia with controversial results. The Korean Culture and Tourism Policy Institute provide leisure counselors to help workers learn how to adapt to time off, since many Koreans don't know what to do with their extra time. Other Koreans are finding that fewer hours at work add stress to the family as housewives complain that their husbands are around home too much. 222 Still others have discovered that leisure can be expensive. Visits to museums, meals at restaurants, and sports lessons all add up. A survey of Koreans revealed that 63 % of respondents worried about the economic burden resulting from their leisure-time spending. Discussion Questions 1. What cultural factors influence a society's attitudes toward work and leisure? 2. How can different attitudes toward leisure affect the marketing of products? 223 5. CUBA: REENTERING THE WORLD In 2009, the United States government indicated its willingness to reconsider a nearly 50-year embargo on Cuba. In the 1950s, the economy of Cuba was dominated by Spanish landowning families and U.S. corporations. A communist revolution led by Fidel Castro resulted in thousands of confiscations of foreign and local properties. These confiscations included factories, plantations, mines, and real estate. The U.S. government responded to the confiscations by placing an embargo on Cuba in 1962. The embargo disallowed U.S. exports to or imports from Cuba. In addition, U.S. foreign investment in Cuba was forbidden. Castro originally offered to pay claimants with money from sugar sales to the United States, but the U.S. government refused to negotiate with the dictator. Today the United States recognizes nearly 6,000 claims against Cuba, totaling nearly $7 billion in today's prices. For years Cuba remained a satellite of the Soviet Union. Virtually all its trade was with Russia or the Soviet bloc. With the dissolution of the Soviet Union, Cuba was left one of the few remaining communist states in the world. It lost its traditional trading partners and found itself financially destitute. Though wary of capitalism, the island nation began tentatively to encourage foreign investment in the mid-1990s. Investments, primarily from Canada and the EU, quickly grew to several hundred in number. 224 The United States, never having lifted its embargo on Cuba, was quick to respond. The Helms-Burton law was passed allowing U.S. citizens to sue foreign companies that used property that had been previously confiscated by the Cuban government. In addition, the U.S. government would deny visas to corporate officers of such companies. Some foreign companies quickly complied by checking for claims against their new Cuban investments. Many more ignored the U.S. threat. President Clinton eventually waived the right to sue under the Helms-Burton law in response to an EU initiative to ask for a WTO ruling against the American law. Then, after nearly 40 years, the United States partially lifted its embargo against Cuba. The embargo had failed in its primary mission to remove Fidel Castro. Supported by a politically powerful farm lobby, the embargo was amended to allow sales of agricultural products and medicine to Cuba. Still the Cuban government remains wary of closer economic ties with the United States. Although the Cuban economy has improved somewhat, the country remains a tightly controlled society with eleven million people living at subsistence level. Cuba has suggested that it is ready to meet its claims obligations under international law, but it is unclear where Cuba would find the money. Cuba has stated that it plans to seek redress from the United States for the economic cost inflicted by the U.S. embargo, a cost estimated at over $60 billion. Another option could be the sale of government-owned properties. Some suggest that 225 the U.S. government should offer Cuba a bailout plan to welcome the nation back into the fold. In the meantime, a Miami financier has proposed pooling corporate and personal claims against Cuba into a fund that would issue shares to claim holders. These shares would then be speculatively bought and sold. Discussion Questions 1. Should claim holders be compensated? If so, who should pay? Why? 2. If you were considering investing in the proposed claims fund, what discount rate would you apply? In other words, how many cents on the dollar do you think these claims are worth? Why? 226 6. COKE UNDER FIRE For over two years. Coca-Cola struggled to acquire the soda brands of Cadbury Schweppes, which included Dr.Pepper and 7-Up. The proposed purchase originally encompassed all of Cadbury Schweppes's international markets except those in the United States, France, and South Africa. A successful purchase would increase Coca-Cola's market share in soda in over 150 countries. For example, Coca-Cola's share in Canada was expected to rise from 39.4 % to 49.1%. In Mexico, its share would rise from 68.4 % to 72.6%. Not everyone was pleased with the proposed purchase. Pepsi, Coke's major rival, sent letters to legislators in Canada asking the Canadian government to disallow the purchase of the Canadian operations, maintaining that it would result in weaker competition, higher prices, and the loss of three hundred jobs in Pepsi's Canadian operations. Smaller independent bottlers joined Pepsi in opposition. Canada's Federal Competition Bureau agreed to undertake a costly investigation that resulted in Coke canceling its plans in Canada. In the meantime, Australia, Belgium, and Mexico rejected the purchase. A number of European countries and the Chilean government also put it under review. As a result, Coke scaled back on its attempts to buy the brands in Europe. Instead, South Africa was added to the deal. The Cadbury Schweppes purchase is not the only encounter Coke has had with competition regulators in 227 Europe and elsewhere. The offices of Coca-Cola Enterprises were raided in London and Brussels. EU regulators were seeking incriminating documents related to Coke's allegedly having given German, Austrian, and Danish supermarkets illegal incentives to stock fewer rival products. A similar investigation the year before in Italy had resulted in a S16 million fine being levied on the company. If found guilty, the company could be fined as much as $14.4 billion. The new head of Coca-Cola, Mr.Daft, had visited Europe and personally met with top antitrust officials at the EU and various European countries. He wanted to present Coke's case personally and to achieve a better understanding of the concerns of the officials. He stated that Coke was committed to playing by the house rules wherever they did business. However, what Coke called aggressive yet honest competition, Europe viewed as abrasive, domineering, and unacceptable American behavior. Problems had cropped up back home in North America as well. A jury in Daingerfield, Texas, found the company guilty of breaking Texas antitrust laws and assessed a $15.6 million fine. Coke was accused of demanding exclusive advertising, displays, and vending machines from retailers. In addition, a U.S. Federal Trade Commission report concluded that acquisitions of other soft-drink brands by industry leaders resulted in higher prices to American consumers. In Mexico, Pepsi had accused Coca-Cola of forbidding its many small shopkeepers to sell rival soft drinks. After battling these 228 allegations in the Mexican courts for several years, Coke lost the first of 70 similar cases brought against it for anticompetitive actions. Mexican antitrust authorities also rejected the plans for Coca-Cola and its Mexican bottler to purchase Mexico's second largest juice company. Discussion Questions 1. Why do you think some countries disallowed the Cadbury Schweppes acquisition whereas others did not? 2. Given Mr. Daft's statement that Coca-Cola was committed to playing by the rules, why was the firm in trouble in so many countries? 3. What advice would you give Coca-Cola concerning its handling of government relations? 229 7. WHAT TEENS WANT Increasingly, consumer product companies and retailers are targeting teens. In the United States alone, the teen market comprises nearly 60 million consumers, and their purchases total $170 billion a year. Some teen-specific sites, such as Delias.com, have proved successful. Delia's sells clothes that appeal to teens while providing chatrooms and links to other teen sites. Two of the most popular teen sites are Amazon.com and Gap.com. Wal-Mart.com is also popular, despite the fact that it does nothing in particular to attract teens to its site. Teens like it for its good prices. Marketers in Europe also are trying to understand the teen market better. European teens were once seen as being closer to their parents but more irreverent than American teens. They also watched television less and were more influenced by European music trends. However, a study of German teens - thought to be indicative of most Europeans - showed the teens spending more of their leisure time watching television, talking on the phone, and listening to music. At the top of the shopping list for buyers 10 to 17 years old was a computer connected to the Internet. Blogs, instant messaging, and social networking sites such as MySpace allow teens to instantly know what's happening to other teens around the world. But does a global teen segment really exist? Some cosmetic marketers believe in a global youth culture that is experimental by nature and open to niche brands. Clinique, a division of the cosmetics company Estee Lauder, undertook a multinational survey to determine 230 what teens found "cool." However, early results from the United States and the United Kingdom revealed no clear product preferences that set teens apart from older consumers. Mothers and daughters appeared surprisingly similar in what they wanted in cosmetics and fragrances, although teens seemed to appreciate advertising geared to them. Teens also shopped for upscale fragrances at mass markets where prices were cheaper. Whether it is possible to extrapolate teen consumer behavior from the developed to the developing world is even more problematic. A study comparing Asian teens to their parents discovered that the teens ranked values such as individualism, freedom, and ambition significantly higher than their parents did. However, at a United Nations convention on youth, one girl from Bangladesh described her 15-year-old sister as pregnant and working in a textile factory all day. To her, luxury products and the Internet had little meaning. However, a study of homeless street kids in Brazil revealed that the desire to own global brands was a major impetus for their leaving home for life on the streets. Those who were able to find work would usually spend their first earnings on a pair of Reebok or Nike shoes. Discussion Questions 1. Would it be useful for global marketers to think of teens as a global segment? Why or why not? 2. Suggest ways in which teen consumer behavior is likely to differ between developed and developing countries. 3. Why do you think street kids in Brazil are attracted to global brand names? 231 8. QUESTIONABLE PAYMENTS Scenario 1: Thomas Karel is a Swiss national who works as the export manager for a major U.S. producer of machinery and software systems for petroleum exploration. His company is bidding on a $25 million contract that could produce $5 million in profit for his firm. The potential customer is the state-owned oil company in a Latin American country. Thomas has recently heard from his company's agent in that country. The agent suggests that he can "nail down" the contract if Thomas gives him $1 million to pass on to an influential cabinet member in charge of awarding the contract. The competition, a French multinational firm, is also bidding on the contract. What should Thomas do? Scenario 2: David Yang has been sent to a country in Southeast Asia to negotiate the possible sale of a large-scale traffic control system to be adopted across the country. The contract involves not only traffic lights but also their installation and servicing, as well as computer software to monitor traffic flows. Another American in the country has suggested to David that he retain the public relations firm owned by the wife of the country's prime minister. The prime minister is not directly involved with the negotiations for the traffic control system. What should David do? Scenario3: Michael Avila is the general manager of a subsidiary in the Middle East of an American shipping company. His company specializes in moving the household belongings of expatriates working for multinational companies. Michael is about to authorize 232 the monthly slush fund for payments to customs officials to expedite the movement of his clients' goods through customs when he catches sight of an article in the local newspaper. The government has announced a crackdown on corruption. What should Michael do? Scenario 4: Ana Weiss is the new general manager of DeluxDye in Taiwan. DeluxDye produces high-quality industrial paints and dyes that are used in the manufacture of such products as toys and housewares. Compared to competitors' products, DeluxDye products are relatively expensive to purchase. However, they save costs over the long run. Their higher quality ensures more consistent color and performance and less manufacturing downtime. The money customers save can more than make up for the higher initial price of the product. Corporate guidelines, established in the United States, forbid the paying of any bribes, however small. In Taiwan, Ana's sales force is complaining that their inability to offer "tea money" is discouraging sales growth in the market. Tea money consists of small cash payments or gifts, such as tickets to rock concerts or sports events. These payments are often given to lowerlevel employees who act as gatekeepers to the higherlevel manager - often the head of one of Taiwan's many family-owned manufacturing firms - who in turn makes the buying decision. DeluxDye believes its products are superior to those of its competitors and insists that its sales forces around the world promote the product on its merits alone. Bribery is immoral, and it casts doubts on the integrity of the briber. What should Ana do? 233 Discussion Questions 1. Explain and defend a course of action for each of the managers above. 2. When considering questionable payments, should marketers emphasize ethical concerns, legal considerations, or making the sale? Explain your answer. 234 9. PROCTER & GAMBLE TARGETS EMERGING MARKETS At the beginning of the millenium, Procter and Gamble was the world’s largest consumer goods company, specializing in household products and personal care. Among its well-known brands are Tide detergent, Crest toothpaste, Olay skin care, Pantene shampoo, and Pampers disposable diapers. However, with six billion consumers worldwide, the company was focused only on the richest one billion. Less than a quarter of company sales came from emerging markets, and those sales were mainly to the wealthier segments of those societies. All that changed when a new CEO decided that P&G would seriously target developing countries and transitional economies. After all, it was estimated that each week 40.000 Asians used a washing machine for the first time. Long known for its product innovation in the United States, P&G now designated 30% of its research and development funds to the needs of these lowerincome markets. Its engineers sought new ways to make products more cheaply, and P&G researchers visited homes in developing countries to better understand consumer needs. After just six years, company sales in emerging markets reached 50% of total sales. China was a market of particular interest to Procter & Gamble. In just 20 years the company had established an extensive distribution system and had seen sales rise to $2.5 billion. China had become P&G's second largest market, and P&G had become China's largest consumer 235 goods company. With a wide variety of brands and products, the company aimed at various target markets across different price ranges. Still, China often appeared to be two very distinct markets - urban China and rural China. Urban Chinese would pay $1 for toothpaste in exotic flavors. Rural Chinese might prefer to pay half as much and want salt added because they believe salt whitened teeth. Despite its success in the Chinese market, Procter & Gamble experienced a major product crisis there involving P&G's elite SK-II line of skin care products. Chinese authorities announced that banned chemicals were found in the products sold in China. P&G denied the allegation. Almost immediately articles concerning the safety of SK-II appeared on thousands of Chinese Internet sites. Many experts believed that the banned chemicals were safe in small amounts and noted that these chemicals were not banned in the European market or Japan. Instead, they noted that SK-II products sold in China were imported from Japan and the Chinese government could be retaliating for Japan's recent adoption of stricter standards for Chinese agricultural imports. When P&G voluntarily offered refunds to consumers for SK-II products, a number of problems arose. Some consumers tried to return counterfeit products. In some cases violence broke out. Salesclerks were attacked and sales counters robbed. Later the Chinese authorities announced that the banned substances did not pose a health hazard. However, the loss in sales and consumer trust was especially painful to P&G because beauty 236 products accounted for 60-70% of the company's sales in China. P&G's acquisition of the Gillette Company was also seen as a way to expand more quickly into emerging markets. The acquisition was P&G's largest to date. One of Gillette's major markets was Russia, another market of particular interest to P&G. However, this market had proven problematic. When a financial crisis caused the Russian ruble to plummet, Russian wholesalers could not afford to buy Gillette products. These products disappeared from retail stores, and Gillette's Russian sales plummeted 80% in a single month. Gillette found it could not meet its projected global profit growth of 15-20% that year. To save money, Gillette planned to close 14 factories and lay off 10% of its workforce worldwide. Procter & Gamble believed that Gillette's brands, including its line of razors, would benefit from P&G's distribution throughout the developing world. However, in certain countries, such as India, Gillette's distribution was already very strong, and when the two companies merged there was considerable overlap. Therefore, in the years following the merger, P&G had to restructure distribution in developing countries leading to many distributors being abandoned. This resulted in a disruption of sales. Unilever, with a much longer history of marketing in developing countries, was a formidable challenger to Procter & Gamble's aspirations in emerging markets. More Unilever sales came from developing countries than from the company's home base in Western Europe. The company also possessed a broader product line than did 237 P&G. About half its products competed against those of P&G. The other half of its product lines were in packaged foods where Unilever competed against major multinational packaged-food companies, such as Kraft and Nestle. Similar to Procter & Gamble, nearly half of Unilever's total sales were in emerging markets. With sales stalling in its home market, Unilever announced that it would shift even more resources to the developing world and would consider selling off some of its current brands to support this move. One of Unilever's traditional strengths was its positioning strategy of offering different brands at different price points, successfully targeting both the poor and the rich in emerging markets. In India, Unilever had access to many small villages, where most multinational firms had no distribution. The company worked with a consortium of industry, academic, and non-governmental organizations to better understand the needs of low-income consumers. However, the company was also focused on expanding its position among the wealthier segments of developing countries, including offering more convenience foods. Discussion Questions 1. Why do companies such as Procter & Gamble target emerging markets? Do you agree with this strategy? 2. What are the dangers of targeting emerging markets? 3. What advice would you give P&G for engaging competitor Unilever? What advice would you give Unilever? 238 10. UNHAPPY MARRIAGE Anheuser-Busch purchased 17.7% of Grupo Modelo for $477 million in 1993, with an option of increasing its shares to 50.2%. At the time of the purchase, Anheuser held 45% of the U.S. beer market. Modelo was the world's tenth-largest beer producer. It held 50% of the Mexican beer market and exported to 124 countries in every continent of the world. However, with the passing of NAFTA (North American Free Trade Agreement), Mexico's 20% tariffs on imported beer were to be phased out. Modelo feared that U.S. breweries would invade its market. Anheuser viewed its stake in Modelo as a profitable acquisition of brands such as Corona, as well as a way to increase Anheuser's distribution network in Mexico quickly. Anheuser told its U.S. distributors that they would soon have access to a major imported beer. Distributors assumed this meant Corona, which was fast growing in popularity in the United States. However, in late 1996, management at Modelo renewed the firm's ten-year contract with its existing U.S. distributors, dashing Anheuser's hopes of gaining Modelo brands for its own U.S. distribution system. In December 1996, Anheuser announced that it would exercise its option to increase its stake in Modelo. A six-month dispute over price ensued, and the parties settled for $605 million. Then in June 1997, Anheuser opted to further increase its stake, this time to the full 50.2% allowed under the joint venture contract. 239 Discussions became so contentious that the two parties went into international arbitration, and the price was eventually set at $556 million. By 1998, the price of Anheuser's stake in Modelo, as valued on the Mexican stock exchange, was twice what it had paid for the stock. However, its 50.2% stake in Modelo did not give Anheuser a controlling share of board votes. It held only 10 of the 21 seats on the board of directors. Despite trade liberalization, Modelo's brands soon increased their share of the Mexican market to 55%. In the United States, where beer imports accounted for 14% of the market, Corona had pulled ahead of Heineken to become the best-selling import. Corona was enjoying 40% growth per year in the United States and had already become the tenth best-selling beer in that market. It was particularly successful among college students and consumers in their 20ies. Anheuser's major brand, Budweiser, found itself competing against Corona. Anheuser began a campaign to disparage the freshness of Corona. It distributed display cards to thousands of bars and restaurants, noting that Corona didn't put the manufacturing date on its bottles. Anheuser also introduced three Corona clones - Azteca, Tequiza, and Rio Cristal - all produced in the United States. The relationship between the parent companies became more confused in 2008 when Belgium-based InBev SA announced that it had arranged to acquire Anheuser-Busch. Anheuser had originally resisted the unsolicited acquisition, even attempting to convince Modelo to sell them their remaining share in the Mexican 240 joint venture. With the Modelo share, some analysts believed that Anheuser would become too expensive for InBev to purchase. However, when the acquisition proceeded, the Modelo Group claimed that they could choose to opt out. The Modelo Group asserted that under Mexican law a carefully crafted clause in the original joint venture agreement permitted the company to buy back the Anheuser share should the acquisition take place. Then the company could operate independently or seek a new international partner such as InBev's archrival SABMiller. The InBev acquisition of Anheuser went through in 2009, but the legal status of the Mexican joint venture remained unresolved. Discussion Questions 1. Why did Anheuser purchase its stake in Grupo Modelo? 2. Why was Grupo Modelo willing to sell the stake? 3. What went wrong? Why? 4. What lessons about choosing international partners can be learned from this case? 241 11. DEJA VU? Coca-Cola, the world's largest soft-drinks company, and Nestle, the world's largest packaged-foods company, announced that they were forming a joint venture to develop and market ready-to-drink coffee and tea products. Each would contribute $50 million to the new venture. Nestle possessed well-known trademarks in coffee and tea. It sold iced coffee in Europe and had recently test-marketed a mocha cooler in the United States. Still, it was not very active in the ready-to-drink category overall. For its part Coke offered a global distribution system for soft drinks. The newly formed company, Coca-Cola Nestle Refreshment, had its headquarters in Tampa, Florida. (Coca-Cola was headquartered in Atlanta, Georgia, and Nestle in Vevey, Switzerland.) The only market excluded from the venture was Japan, where Coke already had a position in ready-to-drink coffee. Nestle came to the venture with prior experience with an alliance partner: it distributed General Mills cereals through its international distribution system. Coke, on the other hand, had no such alliance experience. Two years later, the venture launched its first product, Nestea Iced Tea, a single-serve tea drink. In the following two and a half years, more than a dozen tea and coffee drinks were developed. However, after only four years, the two companies announced that they were dissolving the equity joint venture and were closing the Tampa office. Some 242 believed the venture had moved too slowly and had been beaten to the market by an alliance between Pepsi and Lipton. Under new terms, Coke received a 100-year license to use the Nestea trademark anywhere in the world and would pay Nestle an undisclosed royalty for Nestea sales. Nestle would continue to try to sell Nescafe products through the Coke distribution system. Nestle then embarked on an aggressive acquisition strategy. But after several years, it slowed down this activity to concentrate more on the 7.000 brands it already had. In the meantime, Coca-Cola continued to dominate in worldwide soda sales but saw Pepsi dramatically expand its noncarbonated lines, including a variety of coffee and teas. To help its ailing juice business, Coca-Cola entered a joint venture with France's Groupe Danone to expand the distribution of Minute Maid refrigerated orange juice in supermarkets throughout Europe and Latin America. Seven years after abandoning their first venture, Coke and Nestle announced that they were resurrecting their earlier alliance and renaming the venture Beverage Partners Worldwide (BPW). The new headquarters were to be located in Zurich, Switzerland, and the revived venture would operate in 40 countries. Nestle would develop the products, and Coke would distribute them. However, Coke would contribute the teas it developed for the Chinese market, along with its line of Planet Java coffees. Nestle would add its Belte tea line. This time around, the parents envisioned that the venture would 243 operate with the "speed and culture of a start-up company." Five years into the new venture, Nestle reported that the venture was going well. However, the two partners decided to scale it back. Under a restructuring in which no cash changed hands, BPW was limited to producing and selling only ready-to-drink black tea products and Enviga, a new ready-to-drink green tea beverage that purported to bum calories. Coke would develop and market its own coffee products in the future that would likely compete with Nestle's own ready-to-drink coffees. In the meantime, BPW accrued some successes. Canadians began to drink more iced tea, making Canada the third largest iced tea market in the world and boosting sales of bottled Nestea. However, Enviga was struck a blow when U.S. courts fined BPW and its two parents $650,000 for making false claims regarding the product. Apparently, Enviga didn't really bum calories. Discussion Questions 1. Why were Coca-Cola and Nestle interested in forming a joint venture? 2. What do you think went wrong the first time? 3. What do you think went wrong the second time? 244 12. LAUNCHING INTUITION Estee Lauder is among the world's largest manufacturers and marketers of makeup, skincare, and fragrance products. Based in the United States, the company's overseas sales now account for nearly 60% of total sales. Its global reach is significant. Its Clinique brand is sold in 130 countries. When Estee Lauder launched Intuition, its biggest new fragrance in five years, the new fragrance was allotted a record-breaking $30 million advertising budget. Lauder aimed at $100 million in sales in the first year, more than double the sales of most other new fragrances. A typical launch of a Lauder fragrance began with its introduction in the United States. The product would then be introduced to overseas markets in six months to a year. In an unprecedented move, the launch of Intuition bypassed the United States. Instead, it was introduced in France and Britain in September, with a rollout to the rest of Europe, Asia, and Latin America in October. Approximately 40% of sales of prestige fragrances take place in November and December. Only later would Intuition be introduced in the United States. Estee Lauder owned five of the top ten women's fragrances sold at department stores across the United States. However, only one Lauder perfume, Pleasures, made the top ten in Europe. The U.S. fragrance market, especially for the premier lines sold in department stores, remained in a slump. 245 For the past five years, sales had been flat or down each year. In Europe, the market had grown about 8% the previous year. Lauder had established creative divisions in Paris and Tokyo to develop products for local consumer needs. Intuition was the first collaborative effort between Lauder's U.S. and European development centers. Intuition's formula was lighter than the traditionally heavy European fragrances and was targeted at the younger woman (starting in her mid twenties). It was marketed as Lauder's first fragrance with a European sensibility, although the company wanted Intuition eventually to be seen as a global fragrance. Some managers believed that future U.S. sales might even be improved if Intuition could be billed as previously "available only in Europe." Discussion Questions 1. What are possible reasons for the unconventional development and launch of Intuition? 2. What difficulties might the company face with such a launch? 246 13. CHASING PIRATES Pirated software is a major challenge to Microsoft, which loses hundreds of millions of dollars a year. Piracy also costs governments in lost tax revenues. Mexico, for instance, is estimated to lose $200 million a year to pirated software. Piracy rates vary by country, the rates in developing countries being significantly higher than those in developed countries. China – 80% India - 68% Russia – 68% Egypt – 59% Mexico – 59% Turkey – 64% European Union – 35% Nigeria – 83% United States – 20% To combat piracy, Microsoft added an edge-to-edge hologram on its CD-ROMs to ensure buyers of the product's authenticity. Still, an estimated two million websites sell pirated software. As a result, the company aggressively monitors the Internet to uncover sites for illegal downloading. Closing down pirates overseas has taken several forms. In Bulgaria, Microsoft launched a campaign to eradicate pirated software by offering full packages discounted 60% off their previous price. Buyers were also entitled to the next version at no extra charge. In Pakistan, Microsoft offered to provide a training program for software instructors and to install laboratories in the top fifty universities and colleges in the country. This $150 million package would be in exchange for better govern247 ment enforcement of antipiracy laws. In Malaysia, Microsoft installed a toll-free phone number and offered substantial rewards for evidence against companies using pirated software. In Singapore, a country of only four million people, Microsoft still loses millions of dollars a year to pirates. Microsoft began a campaign in the Singapore schools to educate students concerning the illegality of piracy. Despite Singapore's excellent reputation for law enforcement in general, U.S. officials had put it on their list of countries to watch for poor enforcement of copyrights. Under similar pressure from the United States, Taiwan has been cracking down more on piracy. A firm caught exporting pirated software was fined $7.9 million, and its owner was sentenced to two years in jail. Over a period of five years, the piracy rate dropped from 42% to 36% in Singapore and from 43% to 29% in Taiwan. The Chinese market is also of concern. Bill Gates, chairman and CEO of Microsoft, himself traveled to China to sign an agreement with the government there to promote the authentic use of software. Under the agreement, several key government entities pledged to buy Microsoft and to avoid pirated products. In exchange, Microsoft agreed to provide technical training and consulting. Later the same year, Microsoft brought its first piracy case to the Chinese courts. Engineers were found to be using pirated Microsoft products in the office building of the Yadu Group. The Yadu Group argued that they were innocent because the engineers worked not directly for them but for a sister company. The Chinese court 248 found in favor of Yadu and ordered Microsoft to pay $60 in court costs. Despite this setback, Microsoft appeared to be making some headway in its attempt to gain support from the Chinese government for piracy protection. The firm considerably expanded its research and development effort in China, raising it to world-class status and offering fellowships to doctoral students in China. Some industry observers believed that when the product was "made in China" the government was more motivated to support protection. However, Microsoft's rollout of an anti-piracy program called Windows Genuine Advantage angered Chinese software users. The automatically installed system update turned desktops using pirated versions of Windows completely black every hour until the software was validated. This earned the product the nickname "Black Screen of Death" by critics. Within months of the product's introduction, a Chinese lawyer filed multiple complaints against Microsoft, claiming the program violated privacy and antimonopoly statutes in the country. After pursuing various antipiracy policies, Microsoft decided to introduce a version of Windows software especially for consumers in developing countries. A multicountry launch included Malaysia, Indonesia, India, and Russia. The new software offered fewer features for a lower price. It was installed in low-cost personal computers and not sold separately. The price Microsoft charged computer manufacturers for the product was not made public, but the low-end PCs are estimated to retail 249 for about $300. The company also decided to test market an aggressive pricing strategy in China, offering their Microsoft Office software for only $29. Discussion Questions 1. What do you think accounts for the different piracy rates across countries? 2. Identify the different strategies Microsoft uses to combat counterfeits. 3. Why does Microsoft expect each of these efforts to be useful? What is your opinion? 250 14. THE PRICE OF COFFEE IN CHINA When Starbucks, the Seattle-based coffee shop chain, first entered China, it faced a country of tea drinkers. Still, Japan too had been a country of tea drinkers but had evolved into a major coffee market. Starbucks itself had recently entered Japan and was already the top-ranked restaurant chain, according to a prestigious industry study. Top management at Starbucks was astounded at the firm's brand recognition across Asia, an awareness that had come about with virtually no investment in advertising. The company soon promoted China to a priority market. In considering China, Starbucks noted that coffee consumption in a country is directly related to income. The firm sought to take advantage of growing disposable income in China, where per-capita income had reached $750 a year. In particular, Starbucks believed there would be substantial demand among younger urbanites in China. Confident in their decision, the firm entered the Chinese market with plans to open ten shops in Beijing in 18 months. The first Starbucks in Beijing was located in a shopping center across the street from a five-star hotel. Still, some were skeptical about the Starbucks move. Coffee sales had been growing between 5 and 8 % a year in China. However, in the wake of the Asian financial crisis many foreign expatriates left the country. Consequently, coffee sales growth had tapered off. When Starbucks opened in Beijing, the store offered the same coffee products and other merchandise as was 251 available in its U.S. shops. Starbucks's stated strategy was to set prices lower than those of comparable coffee shops already opened in China. These other coffee shops targeted expatriates, tourists, and elite Chinese. China's luxury market was among the fastest growing in the world. Luxury shoppers were largely young professionals, many of whom enjoyed trying new foreign brands. Starbucks hoped to target a larger segment of Chinese society. Therefore, prices were set similar to those charged in New York City, with a grande latte priced at $4.50. A local coffee shop in the same complex that charged prices even higher than those at Starbucks announced that it would lower prices to below those of the new U.S. competitor. Starbucks imported all its coffee beans into China, despite the fact that China was attempting to improve both the quality and the size of its own coffee harvests. Other nations, such as Vietnam, had expanded coffee production. This had resulted in a world supply of coffee beans that exceeded demand by 10%. Furthermore, a devaluation of Brazil's currency provided this major coffee exporter with an increased competitive edge over new entrants into the coffee market. Discussion Questions 1. What are the possible arguments for pricing a grande latte at $4.50 in Beijing? 2. What are the possible arguments for pricing lower? For pricing higher? 3. Could purchasing Chinese coffee beans in the future affect Starbucks's pricing strategy in China? Explain. 252 15. WHO IS TO BLAME? Several European countries, including Germany, Italy, France, Belgium, and Finland, filed suits against U.S. tobacco giants Philip Morris and R.J. Reynolds alleging that the two firms had cooperated with smugglers of cigarettes. The countries sought compensation for unpaid custom duties as well as unpaid value-added taxes. The European Union estimated that these losses came to billions of dollars. European governments weren't the only losers. An estimated third of all cigarettes sold in the world are smuggled. Malaysia has estimated that its losses in taxes due to smuggled cigarettes amounted to $1.3 billion in one year alone. These cigarettes arrived mainly from Indonesia and Thailand and were brought in under the aegis of crime syndicates. Malaysia, like most other countries, taxed cigarettes heavily not only as a source of revenue but also as a proven method for discouraging smoking. At the same time in India, British American Tobacco (BAT) was facing an expose resulting from the public examination of its internal communiques. For example, BAT products were legally restricted in India to duty-free shops and hotels but were in fact smuggled into India on an extensive scale from the United Arab Emirates. A memorandum issued by a top BAT executive discussed how the firm could advertise its brands without calling attention to the fact that most of the cigarettes were smuggled into the country. The memorandum went on to discuss contingency plans if any of the normal smuggling 253 channels were shut down. When the Business Standard called BAT for comment, the company sent the following reply: Where governments are not prepared to address the underlying causes of the smuggling problem (excessive tax on tobacco), businesses such as ours are faced with a dilemma. If the demand for our products is not met, consumers will either switch to our competitor brands or there will be the kind of dramatic growth in counterfeit products that we have seen in Asian markets ...Where any government is unwilling to act or their efforts are unsuccessful, we act, completely within the law, on the basis that our brands will be available alongside those of our competitors in the smuggled as well as the legitimate market. Despite the attempts by government to stem smuggling, it continued to grow. Nearly 300 million contraband cigarettes, mostly from China, were seized at British ports in a single year. Factories in Eastern Europe and Russia were also the source of many cigarettes smuggled into Western Europe. The lost tax revenues to governments from contraband cigarettes worldwide were estimated at $50 billion annually. And cigarettes were not the only consumer product fueling the growth in smuggling. Pakistan complained to the Kenyan government that tea smuggled in from Kenya, thus avoiding a 36% tariff, cost the Pakistani government millions of dollars a year. Next door in India, smuggled 254 mobile phones not only avoided tariffs but hefty valueadded taxes as well. The Chinese government had introduced severe penalties for smuggling consumer goods into China, including life sentences and even the death penalty. China's smuggling law not only targets smugglers but also encompasses anyone who buys from smugglers. They, too, can be charged with smuggling. Vietnam is another country that has taken serious steps against smugglers. The head of a private company and the chief of the smuggling investigation bureau of Ho Chi Minh City's customs department were sentenced to death for smuggling. The case involved 74 people who were charged with smuggling $71.3 million worth of electrical goods and home appliances into Vietnam. Discussion Questions 1. Why would BAT, or any other multinational firm, cooperate with smugglers? 2. How could smuggling hurt a multinational company? 3. Why do you think some countries are introducing stiff penalties for smuggling? 4. Who do you think should be held responsible for smuggling—the manufacturer, the smugglers themselves, the retailers, or the final consumer? 255 16. ADVERTISING TO KIDS Children in the United States see an estimated 20,000 commercials a year. Marketers spend $5 billion a year directly targeting children. And much more advertising reaches children when they are not even the target audience. An investigation by the U.S. Federal Trade Commission (FTC) discovered internal memos detailing how companies commonly target their marketing of violent games, music, and movies to children. This prompted lawmakers to reconsider tightening laws on advertising to children. In a follow-up study the next year, the FTC discovered that the movie and video-game industries had improved their practices but that the recording industry continued to show total disdain for public concerns about marketing violent and sexually explicit products to underage children. This encouraged the call for laws that would restrict advertisements - whether targeted directly to children or not - that reached large audiences under the age of 17 years. A number of industries already set their own standards for advertising to children. The beer industry discourages placing ads on programs where half or more of the audience is under the age of 18. Several movie studios set their cutoff standard at 35%. Still, the Association of National Advertisers continues to lobby against any legislation that would restrict advertising for violent movies, video games, or music; it contends that such restrictions would curtail free speech, a fundamental 256 American freedom enshrined in the American Bill of Rights. Ironically, a study conducted by the National Institute on Media and the Family discovered that 99 % of students in grades 7 through 12 could identify Budweiser as a brand of beer - significantly more students than could identify the purpose of the Bill of Rights. Nonetheless, advertisers won a legal victory when the Supreme Court struck down the state of Massachusetts's restrictions on billboard advertising of cigars and smokeless tobacco products. The law, aimed at protecting children, was deemed to violate the advertisers' freedom of speech. The controversy over advertising to children is not restricted to the United States. In Britain, advertisements that provoke children to behave improperly are taboo. Regulators have no direct authority to ban advertisements, but they enjoy powerful influence with the nation's media. A television ad created by the Publicis Group for Hewlett-Packard featured children throwing snowballs at a passing train. Regulators considered this an incitement to antisocial behavior, and the spot was removed. Greece bans toy advertising on television between 7:00 a.m. and 10:00 p.m. In Norway and Sweden, television advertising aimed at children has been illegal since the 1990s. Critics of the Swedish advertising ban are quick to point out that Swedish children have access to international channels that allow them to see ads from other countries. TV3, a Swedish channel that broadcasts from the United Kingdom, is free to advertise to children because of its British location. Even so, a number of 257 European countries, including Greece, Belgium, Italy, and Poland, are debating tightening their restrictions. Advertisers argue that increased regulation across Europe could greatly curtail children's programming on the many private channels not subsidized by governments. Across the world, in Indonesia, a cigaretteadvertising campaign came under attack by educators and politicians. The campaign featured animated characters, including ants, roosters, and snails, dancing to music. Critics believed that the ad encouraged children, who make up the majority of cartoon lovers, to think that smoking was a good thing. The company quickly removed the offending ad. In Indonesia, the penalty for marketers who target children is a hefty fine and a jail sentence of up to five years. Many countries are now considering restricting advertising to children by firms in the food, beverage, and fast-food industries because their products do not promote a healthy diet. A number of food companies in South Africa have voluntarily agreed not to advertise to children younger than 12 years unless the products being promoted represent healthy dietary choices. However, new online promotional options increase the chance for reaching children even when companies do not particularly target them. For example, Coca-Cola launched a campaign on Facebook that allowed users to create a "Sprite Sips" character and share it with their friends. However, the company could not control the age of the recipients when the ad went viral. Similarly, Kraft's NabiscoWorld.com, one of the world's most popular food 258 websites, created a game around the concept of rapidly twisting, licking, and dunking an oversized Oreo cookie in a glass of milk. The site is designed for kids older than the age of 12 years, but its games appeal to children much younger. Discussion Questions 1. Why is advertising directed at children regulated in so many cultures? Why is there so much variation in these regulations? 2. Should the EU develop a common policy toward advertising that targets children? Why or why not? What barriers to such a policy might exist? 3. What restrictions on advertising directed at children would you favor? Why? 259 TOPICS FOR DISCUSSION I. You’ll Never Hear Successful People Say These 15 Phrases If you want to become more successful as an entrepreneur or in your career, you can start by making a habit of talking and thinking more like the people you know or read about who are already successful. Here are some phrases you’ll never hear a successful person say: 1. “We can’t do that.” One thing that makes people and companies successful is the ability to make solving their customers’ problems and demands their main priority. If a need arises repeatedly, the most successful people learn how to solve it as quickly as they can. 2. “I don’t know how.” Instead of automatically shutting down solution-finding, successful people learn what they can in order to succeed in a project or in their career. For example, you would never see a truly successful international business consultant who travels to Italy multiple times per year refusing to learn Italian. 3. “I don’t know what that is.” 260 Pleading ignorance doesn’t make the problem go away. It just makes the asker find someone who is able to work with them to solve the problem. It’s always good to be honest with those you interact with, finishing this phrase with “but I’ll find out” is a surefire way to become more successful. 4. “I did everything on my own.” The best people know how to surround themselves with others who are smart, savvy and as dedicated as they are. What makes this work is always giving credit where it’s due, as due credit to you will always come back in hand. Recognize those that have helped you or made an impact and you’ll continue to earn success and recognition yourself. 5. “That’s too early.” You would never hear someone such as Steve Jobs say, “that is too early for me to be there.” If there is a networking meeting, project launch or interview opportunity at the very beginning of the day, the most successful people do what it takes to be there. Part of being successful is being at the right place at the right time, no matter if you’re a morning bird or night owl. 6. “That’s too late.” If you’re asked to a 9 p.m. dinner by a potential business partner, and you can make it, definitely go. You may be tired the next day, but the connections you will make during a small dinner or after-hours meeting can 261 make all the difference when it comes to your career or next project. 7. “It’s too bad we couldn’t work together.” Truly hitting it off with someone can be a rare occurrence, but if you truly connect with someone and want to work with them, find a way to make it work. Finding people that you really enjoy communicating with doesn’t come along too often, so whether it’s a case study or a new business, successful people know that working with those who truly align with your personality and interests are the path to true success. 8. “Let’s catch up sometime.” Many times, this phrase is said as filler, without any true follow up. Successful people know that if they really want to catch up with someone, they follow up to make it happen. This also builds on the idea that the most successful people have worked hard to build genuine connections and relationships within their network, without any hidden agenda. Nurturing your network means being thoughtful of others, while keeping your relationships with them on top of your mind. 9. “I’m sorry, I’m too busy.” If an opportunity comes their way, successful people do what it takes to make it happen. Sure, this might mean longer hours occasionally, but if you want something to work, that is what it takes. After all, according to Lao-Tzu, the philosopher and poet of ancient China: “Time is a 262 created thing. To say “I don’t have time,” is like saying, “I don’t want to.” 10. “That was all my idea.” Again, as mentioned in number four, the most successful people spread the wealth when it comes to doling out praise from a successful project. No idea is truly one’s own – it’s a sum of their experiences from interacting and building collaborative ideas with a team. Doling out praise and encouragement is a crucial part of building a successful company and culture. 11. “I never read books.” Tom Corley, a bestselling author, speaker, media contributor of Rich Habits Institute, found that rich people read (and listen to) books at a much higher rate than poor people: “63% of wealthy parents make their children read two or more non-fiction books a month vs. 3% of poor.” Also, “63% of wealthy listen to audio books during commute to work vs. 5% of poor people.” Reading nonfiction (as well as fiction) can help reduce stress, enhance creativity and boost your memory. 12. “I’m not good enough.” Part of being successful is having a high sense of selfworth. Being yourself is one trait that promises success in business and your personal life. Follow your true interests. What would you do in your life if you didn’t need money? 263 13. “It’s OK.” (over and over) Successful people know when to walk away and stop taking excuses from others. If there is a bottleneck and something (or someone) is preventing you from completing a project on time, build up your business, or move you forward in your goals, then it’s time to set boundaries and decide to limit your involvement. 14. “If our competitors don’t have it, then we don’t need it.” Copying competitors is one of the many possible deaths for most companies. True innovation comes from the flip side: figure out what competitors aren’t doing and fill that niche to answer a need in the industry. 15. “Time off is for suckers.” True success should be seen as a well-rounded approach, one with vacations, weekends with friends and family and hours of downtime on the weekdays. While workload varies for everyone at times, taking vacation can make you better at your job. Sometimes to get to where you want to be, the best and easiest thing to do is to simply follow the examples that others set for you. What phrases are you going to eliminate from your day-to-day conversation and thinking? 264 II. Success Will Never Come to Entrepreneurs Who Do These 10 Things Whether we are talking about a football game, an election or an entrepreneurial journey, one thing is certain – there are going to be winners and there are going to be loser. Do you want to stack the odds of being a successful entrepreneur in your favor? You can start by taking note of the following 10 things that you should never do. 1. Be jealous or envious Seeing other people around you succeed, should motivate you, even if they are your competitors. You should understand that every single person has the ability to become successful, and wasting time focusing on other people’s success or achievements will just sidetrack your own progress. 2. Look back You are going to face hard times, difficult decisions and possibly even failure at some point. Don’t let small bumps in the road stop your progress. Find ways to maneuver around obstacles and continue to push forward, never looking back. 3. Make excuses If you make a bad decision and screw up, own it. If something doesn’t work out as planned, don’t look for 265 excuses. Search for the cause of the problem and turn it into a valuable business lesson. If you identify and own the problem you will not make the same mistake again. If you are constantly making excuses for your mistakes, you will continue to make them because you haven’t properly identified the root of the problem. 4. Stop learning Your age, years of experience or level of success should never prevent you from learning. There isn’t a single person on this planet who knows everything. We can all continue to learn and be inspired from other entrepreneurs, whether they are billionaire household names or those just starting his or her entrepreneurial journey. 5. Associate with negative individuals People who constantly make excuses, complain and have a negative outlook should be avoided like the plague. We all know people like this. No matter what you say or what the situation is, they always chime in with negativity. People like this are a cancer and their negative aura can rub off on you. Surround yourself with likeminded individuals that are as focused and determined as you are. 6. Wake up without a plan 266 Time management is a crucial part of being an entrepreneur. There are only so many hours in a day , so to be efficient you need to know what your goals are and what tasks you need to get down prior to starting your day. If you are scrambling to create a plan of attack every day you are going to be in trouble. End each day by mapping out the following day’s to-do list. 7. Be scared to make changes and adapt You need to be willing and able to adjust your plan and overall strategy, because there is a very good chance that you will need to adapt to maintain success in the future. Imagine if Apple never adapted and just stuck to making computers? After releasing the iPod it started manufacturing smartphones, tablets and is releasing its first wearable technology, the Apple Watch. Once just a computer company, it is now a consumer-electronics powerhouse. 8. Let your bark be bigger than your bite Successful entrepreneurs don’t sit back and talk about what they are going to do. They plan, follow through and conquer. Nothing is going to get accomplished just by talking about it, and nobody is going to be impressed with words alone. 9. Focus solely on dollar signs and decimal points  The expression “there are so many hours in a day” means “there aren’t so many hours in a day”. 267 Instead of chasing the money, focus on creating products and services that make a difference and provide value. If you do this, the money will come. I would be lying if I said the goal of my company wasn’t to make money, but focusing on providing a great service paves the path for the money to follow. 10. Let failure stop you Most statistics state that 8 out of every 10 new businesses fail. Successful entrepreneurs go into everything knowing that there is a chance of failure. If in fact they fail it is viewed as part of their growth and they keep plugging along. James Dyson is a perfect example, as his first 5,126 prototypes were failures, but the 5,127th one worked and went on to become the top-selling vacuum in the U.S. He is now worth $4.5 billion because he never once let failure stop him. What are some other things that successful entrepreneurs should never do? Share your own comments. 268 269 ABBRIVIATIONS AFTA Asian Free Trade Area BA British Airways BAT British American Tobacco BBC British Broadcasting Corporation BEMs Big Emerging Markets BMW Bayerische Motoren Werke (Բավարիայի Շարժիչների Գործարան) BOP Balance Of Payments BPW Beverage Partners Worldwide BRIC Brazil, Russia, India, China BRICS Brazil, Russia, India, China, South Africa CEO Chief Executive Officer CNN Cable News Network ECB European Central Bank EU European Union FTC Federal Trade Commission G7 Great Seven (United States, Japan, Germany, France, Britain, Italy, Canada) G8 G7 + Russia GATT General Agreement on Tariff and Trade 270 GDP Gross Domestic Product GNP Gross National Product H&M Hennes & Mauritz (Swedish company) HP Hewlett-Packard HSBC Hong Kong – Shanghai Bank Corporation IBM International Business Machines IMF International Monetary Fund Inc Incorporated MBA Master of Business Administration MFN Most Favored Nation MNC Multinational Corporation MTV Music Television NAFTA North American Free Trade Association NBC National Broadcasting Corporation P&G Procter & Gamble PC Personal Computer PCI Per Capita Income R&D Research and Development SAB Miller South African Breweries - Miller SDRs Special Drawing Rights U.K. United Kingdom of Great Britain and Northern Ireland 271 U.S. United States of America UPS United Parcel Service VER Voluntary Export Restriction Washington, DC Washington District of Columbia WTO World Trade Organization 272 GLOSSARY abundance առատություն, լիություն academic համալսարանում դասավանդող անձ, դասախոս, գիտությամբ զբաղվող accentuate շեշտել, ընդգծել, նկատելի դարձնել acceptability մատչելիություն, ըմբռնելիություն, հեշտություն acceptance ընդունում, ընդունելիություն access մուտք, մուտքի թույլտվություն accessibility մատչելիություն accessible 1.մատչելի, դյուրահաս 2.ըմբռնելի accessories պիտույք, լրապիտույք, լրացուցիչ հարմարանք accommodate 1.հարմարեցնել 2.բավարարել 3.տեղավորել accommodating 1.նպաստող, օգնող 2.օթևան տվող 3. հարմարվող accommodation 1.փոխատվություն, պարտքի տրամադրում 2.բնակարան, սենյակ, 3.սենյակների տրամադրում accomplish 1.կատարել, իրագործել, վերջացնել 2.հաջողացնել, կարողանալ accomplishment 1.կատարում, իրագործում 2.հաջողություն, ձեռքբերում account (for) կազմել (թիվ, քանակ) 273 accumulate կուտակել, հավաքել accuracy ճշգրտություն, ճշտություն accurate ճշգրիտ, ստույգ, հավաստի accuse մեղադրել, ամբաստանել acquire ձեռք բերել, ստանալ, տիրանալ acquisition ձեռքբերում, գնում, գնելը acutely 1.ուժգնորեն 2.սուր, սրընթաց ձևով adapt 1.հարմարեցնել, համապատասխանեցնել 2.համակերպվել 3.փոփոխել adaptation 1.հարմարեցում 2.փոփոխվելը additive հավելանյութ, հավելում address 1.դիմել, խոսքն ուղղել 2.հասցեագրել 3.միջոցներ ձեռքնարկել adept (at) գիտակ, հմուտ, մասնագետ adequate բավարար, պատշաճ, համապատասխան adequately բավարարչափով, պատշաճորեն adjust 1.կարգավորել 2.հարմարեցնել 3.հարմարվել adjustment 1.կարգավորում, համաձայնեցում 2.հարմարեցում adopt 1.ընդունել, ճանաչել 2.որդեգրել advance առաջխաղացում, առաջընթաց, զարգացում advent մուտք, ժամանում, գալը, գալուստ aerospace օդատիեզերական 274 aesthetic գեղագիտական, էսթետիկական affect ազդել, ներգործել, ներազդել affluent 1.հարուստ, առատ 2.ապահովված afford 1.ի վիճակի լինել, իրեն թույլ տալ 2.հնարավորություն ընձեռել, տրամադրել affordable էժան, մատչելի aggregation կուտակում, զանգված, համախմբում, միացում, կենտրոնացում aggressively 1.վճռականորեն 2.նախահարձակ կերպով airtime եթերաժամանակ akin 1.հարազատ, ազգակից 2.նման alienate 1.օտարացնել, հեռացնել 2.խորթացնել, թշնամացնել align 1.մի գծի վրա շարել 2.հավասարվել 3.համաձայնվել, համագործակցել 4.հարել, աջակցել alter փոխ(վ)ել, փոփոխ(վ)ել alternatively 1.այլընտրապես 2.փոխբացառող ձևով 3.ոչ ավանդաբար ancestor 1.նախնի, նախահայր 2.նախատիպ annual տարեկան anticipate 1.ակնկալել, սպասել, նախատեսել 2.նախորդ լինել, առաջ անցնել anticipation ակնկալում, կանխազգացում 275 apocryphal անհավաստի, կասկածելի apparent ակնհայտ, բացահայտ, երևացող appeal 1.դիմում, կոչ 2.խնդրանք, աղաչանք 3.գրավչություն, հմայք applause ծափահարություն applicability կիրառելիություն applicable հարմար, տեղին, կիրառելի, համապատասխան application 1.դիմում 2.կիրառություն, գործածում apply 1.դիմել, հայցել 2.կիրառել 3.ջանք գործադրել 4.մակերեսի վրա տարածել appreciate 1.գնահատել 2.բարձրացնել գինը 3.շնորհակալ /երախտապարտ լինել appreciation 1.գնահատում 2.գնի բարձրացում 3.արժևորում (դրամի) 4.երախտագիտություն appropriate հարմար, պատեհ, համապատասխան approval հավանություն approve հավանություն տալ, հաստատել, համաձայնել approximate մոտավոր approximately մոտավորապես arbitrary 1.պատահական, կամայական 2.քմահաճ arbitration իրավարարություն, միջնորդ դատարան archrival գերմրցակից, հակառակորդ 276 arrange 1.դասավորել 2.պայմանավորվել, նախապատրաստել 3.կարգավորել, հարթել arrangement 1.կարգի բերելը 2. նախապատրաստական աշխատանքներ, 3.պայմանավորվածություն 4.կարգավորում array շարք, խումբ as though կարծես aspect 1.տեսանկյուն, տեսակետ 2.մոտեցում 3. կողմ assembly 1.հավաքակցում 2.հավաք, ժողով, համաժողով assert պնդել, հաստատել, հայտարարել associate գործընկեր association միություն, ընկերակցություն, ասոցիացիա assume 1.ընդունել, ենթադրել 2.ստանձնել assurance 1. երաշխիք, հավաստիացում 2.վստահություն assure at bay հավաստիացնել, երաշխավորել, համոզել հալածական, գազանի նման at times երբեմն, մեկ-մեկ atop դեպի վեր, վերևում attach կցել, միացնել, ամրացնել attain 1.հասնել, գալ 2.նվաճել, հաջողել, ձեռք բերել 277 attempt փորձ, ձեռնարկում attractiveness գրավչություն, հմայք, ձգող ուժ authority 1.իշխանություն 2.~ies իշխանություններ, իշխանական մարմիններ autonomy 1.ինքնավարություն 2. անկախություն, ինքնուրույնություն average (adj) 1.միջին 2.սովորական average (v) 1.միջինում լինել 2.միջինը հանել avoidance 1.խուսափում, շրջանցում 2.վերացում, անվավեր դարձնելը background 1.ետևի պլան 2.անցյալ, նախապատմություն, նախադրյալ back-stage 1.կուլիսների ետևում, ետնաբեմում 2.չերևացող bailout ֆինանսական օգնություն ցուցաբերելը balance of payments վճարումների հաշվեկշիռ ban արգելել band միավորվել, համախմբվել bankruptcy սնանկացում, սնանկություն, անվճարունակություն bargaining սակարկելը, համաձայնության գալը barley գարի barrier 1.արգելք, խոչընդոտ 2.ուղեկալ, ուղեփակոց barter (n) ապրանքափոխանակություն 278 barter (v) ապրանքափոխանակում կատարել battle (v) կռվել, պայքարել, մարտնչել battle (n) մարտ, ճակատամարտ battleground մարտադաշտ, ռազմադաշտ be crowded լեփ լեցուն լինել be rooted in ծագել, առաջանալ, սկիզբ առնել be supposed to do sth պարտավոր լինել մի բան անելու believe 1.կարծել, մտածել 2.հավատալ beneficiary շահառու, օգտվող անձ/կողմ benefit (n) 1.օգուտ, շահ 2.նպաստ benefit (v) օգուտ քաղել, օգուտ բերել / տալ beyond վեր, դուրս, այն կողմ bias 1. կանխակալություն 2.հակում 3.շեղում bilateral երկկողմանի bloc քաղաքական դաշինք bond պարտատոմս bookkeeping հաշվետարություն, հաշվապահություն boom մեծ հաջողություն/պահանջարկ ունենալ boost 1.աջակցել, պաշտպանել 2.նպաստել, խթանել 3.հրել border սահման bottom 1.նստատեղ 2. հատակ boundary սահման, սահմանագիծ bouquet ծաղկեփունջ 279 bow խոնարհվել, գլուխ տալ branded դրոշմված, ապրանքանիշ դրված, բրենդավորված brew 1.գարեջուր եփել 2.հասունանալ briber կաշառք տվող, կաշառող broadband լայնաշերտ, broadband services-բազմաթիվ ծառայություններ bucket 1.շերեփ 2.դույլ build up 1.ստեղծել 2.ուժեղացնել built-in ներկառուցված bulk հիմնական մաս, մեծ մասը /չափը/ ծավալը/ զանգվածը bun քաղցրաբլիթ campaign քարոզարշավ capable ընդունակ, շնորհալի capital outlays հիմնական ծախսեր caption ենթագիր/տիտր capture վերցնել, գերի վերցնել cease դադարել, դադարեցնել cemetery գերեզմանատուն cereal հացահատիկ, հացաբույս, հացազգի challenge (n) 1.մարտահրավեր 2.բարդ խնդիր 3.կոչ, կանչ challenge (v) հրավիրել մրցման, հավակնել, առարկել, վիճելի համարել chamber of commerce առևտրի պալատ 280 changeover փոփոխություն, անցում (մի համակարգից /իրավիճակից մյուսին) charge 1.գին նշանակել 2.հագեցնել 3.մեկի հաշվին գրել 4. լիցքավորել chauffeur վարորդ cheer 1.հավանության բացականչություն 2.ողջույն chest freezer փոքրիկ, վերևից բացվող սառնարան chip չիփ/չիպ, մանրաշրջույթ claim (n) 1.պահանջ, իրավապահանջ, հայց 2.պնդում claim (v) 1.պահանջել, պահանջ ներկայացնել 2.պնդել, հաստատել 3.հայց հարուցել clash բախվել, ընդհարվել clubcard ակումբային քարտ cluster խմբվել, խռնվել cogent համոզիչ, անժխտելի collapse փլուզում, կործանում, խորտակում, անկում commit 1.հանձնարարել 2.կատարել commit oneself (to) իրեն վարկաբեկել, իր ուժերից վեր պարտավորություն վերցնել commitment 1.հավատարմություն 2.պարտավորություն 3.խանդավառություն commonality ընդհանրություն, ընդհանուր հատկանիշ 281 community 1.համայնք 2.ընդհանրություն comparability համեմատելիություն compensation 1.փոխհատուցում, հատուցում 2.վարձատրություն complain գանգատվել, դժգոհություն արտահայտել, դժգոհել complaint գանգատ, դժգոհություն, բողոք compliance 1.պատրաստակամություն 2.զիջողություն complicated բարդ, խճճված complication բարդացում, բարդություն, խճճում comprise 1. ընդգրկել 2.բովանդակել, պարունակել 3.կազմել concept հասկացություն, գաղափար conclude 1.եզրափակել, ամփոփել, վերջացնել 2.եզրակացնել 3.կնքել(պայմանագիր) conclusion եզրափակում, ամփոփում, եզրակացություն condensed խտացրած conduct 1.վարել 2.տանել 3.ղեկավարել confident(ly) համարձակ(որեն), վստահ(որեն) confirm 1.հաստատել, հավաստել 2.վավերացնել (պայմանագիրը) confront confuse 1.դեմ առ դեմ կանգնել 2.դիմակայել 3.դիմադրել (դժվարություններին) 1. խառնել, խճճել 2.շփոթության մեջ գցել, շփոթեցնել 282 congested 1.լեփ-լեցուն 2.գերբնակեցված congruent 1.համապատասխան 2.ներդաշնակ connotation լրացուցիչ իմաստ connote լրացուցիչ իմաստ ունենալ consensus միաձայնություն, համաձայնություն, համերաշխություն consequence հետևանք conservation պահպանում, պահում conservative 1.պահպանողական 2.ավանդական 3.չափավոր conserve պահել, պահպանել, խնայողաբար օգտագործել consider 1.կշռադատել, խորհել 2.համարել, կարծել 3.քննարկել 4.հաշվի առնել considerable զգալի, բավականաչափ, կարևոր, աչքի ընկնող considerably զգալիորեն consideration 1.քննարկում 2.նկատառում, կարծիք 3.ուշադրություն consistent 1.կայուն, հաստատուն 2.հետևողական constitute կազմել, հիմնել, հաստատել, բաղադրիչ մաս լինել constrain 1.հարկադրել, սահմանափակել 2.ճնշել, զսպել consulate հյուպատոսություն, հյուպատոսարան consumer ethnography սպառողական ազգագրություն 283 contend 1.պնդել, հաստատել 2.վիճել, առարկել 3.պայքարել, մրցել contents 1.ծավալ, տարողություն 2.բովանդակություն contribute to աջակցել, նպաստել, օժանդակել converge 1.մոտենալ, մերձենալ 2.միանալ, զուգամիտել 3.համատեղել convergence 1.միացում, համընկնում 2.համեմատություն, զուգամիտում conversely ընդհակառակը, հակառակը conversion 1.փոխարկում, փոփոխում 2.պարտամուրհակի փոխանցում, վերահաշվարկ convert փոխել, փոփոխել, փոխարկել convertibility փոփոխելիություն, փոխարկելիություն convey 1.փոխանցել, հաղորդել 2.հայտնել 3.արտահայտել copper պղինձ copyright հեղինակային իրավունք core ամենաէական corporate worldview կորպորատիվ աշխարհայացք correlation հարաբերակցություն corruption 1.կաշառակերություն 2.անբարոյականություն, այլասերվածություն cosmopolitan աշխարհաքաղաքացիական, կոսմոպոլիտական costly թանկ, թանկագին, արժեքավոր 284 counter վաճառասեղան counterattack հակագրոհել, հակահարձակման անցնել counterpart 1.հակառակ կողմ, հակառակորդ 2.կրկնորդ, կրկնօրինակ counterparty գործընկեր court 1.սիրատածել, մեկի բարեհաճությանը ձգտել 2.հրապուրել coverage 1.շրջանակներ, մասշտաբ, գործունեության ոլորտ 2.լուսաբանում 3.ապահովագրում, ապահովագրության չափ craft պատրաստել, սարքել cramped նեղացած, սեղմված, կաշկանդված credibility վստահելիություն, հավաստիություն critical բեկումնային, վճռական, շրջադարձային cross-country subsidization երկրով մեկ ֆինանսավորում cross-cultural միջմշակութային crucial վճռական, բախտորոշ cue պատասխան, ռեպլիկ, ակնարկ culture bound մշակույթով կապված, պայմանավորված curb սանձել, սանձահարել curtail 1.կրճատել, նվազեցնել, պակասեցնել 2.համառոտել, կարճացնել 1.ոլորապտույտ 2.շքեղ, հմայիչ (կնոջ կազմվածքի մասին) curvy 285 customize հարմարեցնել, համապատասխանեցնել dampen 1.մարել, մեղմել 2.խոնավացնել, խոնավանալ database տվյալների շտեմարան, գրապահոց datum (հոգն. data) տվյալ(ներ), նախնականփաստ(եր) daunt 1.վախեցնել, ահաբեկել 2.վհատեցնել deal (n) գործարք, համաձայնություն deal (with)(v) գործ ունենալ, զբաղվել debate քննարկում, բանավեճ debt securities պարտքային արժեթղթեր decisive 1.վճռական, որոշիչ 2.վերջնական decline 1.պակասել, նվազել 2.հրաժարվել, մերժել delay 1.դանդաղեցնել, կասեցնել, հետաձգել, ուշացնել 2.դանդաղել, ուշանալ delegate 1.հանձնարարել 2.լիազորել delivery առաքում, փոխանցում denominate արտահայտել (որոշակի դրամական միավորով) 2.անվանել density խտություն deny 1. հերքել, ժխտել 2.մերժել ինչ-որ բան, հրաժարվել ինչ-որ բանից depreciate depreciation 1.արժեզրկել, գինը գցել 2.թերագնահատել, նսեմացնել 1.արժեզրկում 2.մաշվածություն, մաշվածք 3.նսեմացում 286 depress 1.ճնշել, ընկճվել 2.թուլացնել, նվազեցնել 3.իջեցնել գները deprive զրկել design 1.նախագծել, ծրագրել 2. մտադրվել, նախատեսել deter 1.ետ պահել, ետ կանգնեցնել, համոզել 2.կասեցնել, արգելել detergent մաքրող միջոց, լվացող նյութ deteriorate 1.վատանալ, վատթարանալ 2.վատացնել, վատթարացնել devaluation արժեզրկում devastate 1.ավերել, ամայացնել 2.խորտակել, ջախջախել develop 1.զարգանալ, զարգացնել 2.մշակել devise հորինել, հնարել, գյուտ անել diaper խանձարուր, բարուր dictatorship բռնապետություն diet 1.կերակուր, սնունդ 2.սննդակարգ digital թվային dilemma երկընտրանք, դիլեմա diminish պակասե(ցն)լ, նվազե(ցն)լ disadvantage 1.անհարմարություն, անբարենպաստ վիճակ 2.վնաս disaster աղետ, արհավիրք disastrous աղետալի, կործանարար, կորստաբեր discontinue ընդհատել, դադարեցնել 287 discount զեղչ, զեղչում discriminatory 1.խտրական 2.կանխակալ, միտումնավոր 3.ընտրողական dislodge 1.դուրս քշել, դուրս մղել 2.տեղահան անել disparate անհամեմատելի, անհամատեղելի, անհարիր dispense բաշխել, բաժանել, հատկացնել display ցուցադրել, ցուցաբերել, դրսևորել disposable 1.մեկանգամյա 2.մատչելի (դրամական միջոցների մասին) disposition 1.հակվածություն, տրամադրվածություն 2. խառնվածք 3.դասավորություն, տեղաբաշխում 4. իշխանություն disrupt 1.ընդհատել, ձախողել, տապալել 2.վնասել, քայքայել disruption տապալում, պառակտում disseminate ցանել, շաղտալ, տարածել distasteful զզվելի, անախորժ, տհաճ, վիրավորական distinct 1.տարբեր, առանձնահատուկ 2.պարզ, հստակ, պարզորոշ distinctive բնորոշ, հատկանշական, առանձնահատուկ distort 1.աղավաղել, խեղաթյուրել 2.այլանդակել, ծռմռել 288 distribution channel կապուղի diversity 1.բազմազանություն 2.շարք, բազմություն doggy շնիկ dominance տիրապետություն, գերիշխանոություն, ազդեցություն dominate իշխել, տիրել, donate նվիրել, նվիրաբերել, շնորհել donation նվեր, նվիրատվություն, նվիրաբերում double- entry երկակի գրանցում dramatic 1.դրամատիկ, թատերական 2.շեշտակի, կտրուկ 3.հուզիչ, տպավորիչ drawback 1.թերություն, պակասություն, բացասական կողմ 2.մաքսի վերադարձ dribble կաթել, կաթկթել, ծորալ drop ընկնել, ցած ընկնել, կաթել, իջնել, պակասել dual երկակի, կրկնակի dub 1.փոխակերպել 2.կրկնօրինակել, պատճենել dumping duration dustproof գնագցում, շուկայական գնից շատ ավելի ցածր գնով վաճառք, դատարկում, թափում տևողություն, ժամանակ, ընթացք փոշուց պաշտպանված, փոշի չանցկացնող 289 duty 1.մաքս, հարկ, տուրք 2. պարտք, պարտականություն eavesdrop ականջ դնել, թաքուն լսել economical 1.տնտեսող, խնայող, խնայողական 2.տնտեսագիտական economy of scale մասշտաբային տնտեսություն edition 1.տարբերակ 2.հրատարակություն, տպաքանակ eliminate 1.ոչնչացնել, վերացնել 2.բացառել 3.հեռացնել elite ընտրախավ, վերնախավ elsewhere որևէ այլ տեղում, այլուր emanate 1.արձակվել, տարածվել 2.սկիզբ առնել embarrass շփոթեցնել, շփոթության մեջ գցել embassy դեսպանություն, դեսպանատուն embody 1.մարմնավորել 2.իրականացնել, արտահայտել 3.ներառել, պարունակել emerge երևան գալ, հայտնվել, առաջանալ emerging economies զարգացող տնտեսություններ emic approach էմիկ մոտեցում (երբ ուսումնասիրությունը հիմնված է մեկ երկրի մշակութային համատեքստի վրա) emphasis ընդգծում, շեշտ, շեշտադրություն emphasize շեշտել, ընդգծել, կարևորել enact 1.սահմանել, հաստատել (օրենք) 2.իրագործել, գործածության մեջ դնել 290 encompass 1.շրջապատել 2.պարունակել, պարփակել 3.գործադրել encounter 1.ընդհարվել, բախվել 2.անսպասելի հանդիպել, դեմ առնել encourage 1.քաջալերել, խրախուսել 2.աջակցել, օգնել 3.դրդել, հրահրել enhance մեծացնել, բարձրացնել, ուժեղացնել, բարելավել enjoyable դուրեկան, հաճելի ensure ապահովել, երաշխավորել entail հետևանք ունենալ, հանգեցնել entertainment զվարճություն, զվարճանք enthusiastic խանդավառություն, ոգևորվածություն entry մուտք, մտնելը entry-level consumers սկսնակ սպառողներ environment շրջապատ, միջավայր, շրջակա միջավայր envisage 1.խորհել 2.նախատեսել 3.պատկերացնել, երևակայել ephemeral մեկօրյա, անցողիկ equal հավասար equivalence համարժեքություն equivalent համարժեք, համազոր erupt պայթել, դուրս գալ, ժայթքել escalation 1.ընդարձակում, տարածում 2.սրում essence էություն, գոյություն 291 essential էական, հիմնական, կարևորագույն esteem հարգանք, ակնածանք estimate 1.գնահատել, գինը որոշել 2.մոտավոր հաշվարկել ethnocentric ազգայնական, ազգայնակենտրոն etic approach էթիկ մոտեցում (երբ մի երկրի մշակույթի վրա հիմնված ուսումնասիրությունը կարող է տարածվել մյուսների վրա) euphemistic մեղմախոսական, մեղմասական evaluate գնահատել, համարժեքը գտնել eventual 1.վերջնական 2.հնարավոր eventually վերջիվերջո, վերջին հաշվով evidence վկայություն, փաստ, ապացույց evident ակնհայտ, ակներև, հայտնի evoke առաջացնել, հարուցել, զարթեցնել evolve զարգանալ, ծավալվել, զարգացնել, հանգեցնել excavate փորել, փորել-հանել, բացահայտել exceed անցնել, գերազանցել, գերակշռել excel 1.գերազանցել 2.աչքի ընկնել exchange rate փոխարժեք executive 1.ղեկավար 2.գործադիր իշխանություն/մարմին exempt ազատել հարկերից, պարտականություններից 292 exercise control վերահսկողություն սահմանել exert գործադրել, կիրառել exert efforts ջանք գործադրել exhaust 1.սպառել, վատնել 2.ուժասպառանել exhaustive 1.սպառիչ, համակողմանի 2.ուժասպառ անող expand 1.ընդարձակ(վ)ել, ծավալ(վ)ել, ընդլայն(վ)ել 2.զարգացնել (միտքը) expansion ընդարձակում, ծավալում, ընդլայնում expenditure ծախս(եր) experience (v) կրել, տանել, ճաշակել, զգալ, ապրել experience (n) փորձառություն, կյանքի փորձ, կենսափորձ expertise 1.փորձառություն, հմտություն, ձեռնահասություն 2.փորձագիտություն, փորձաքննություն exploit շահագործել, օգտագործել exploitable օգտագործելի, շահագործելի expose ազդեցության ենթարկել (լույսի, արևի) extend external 1.երկարացնել, տարածել, ընդլայնել 2.տրամադրել, տալ, առաջարկել արտաքին extrapolated արտարկված, արտամիջարկված face 1. դեմ առ դեմ կանգնել 2.համարձակություն ունենալ, զբաղվել 3.նայել, ուղղված լինել 1.հնարավորություններ 2.շինություն (գործարանի) facilities 293 fail 1.անհաջողություն ունենալ, ձախողվել 2.չկարողանալ 3.չբավարարել, չգոհացնել failure 1.անհաջողություն, տապալում, ձախողում 2.ձախողակ մարդ familiarity 1.գործիմացություն, բանիմացություն 2.ծանոթություն fancy 1.բարձրակարգ 2.տպավորիչ 3.գույնզգույն fare (v) 1.դրսևորվել, ներկայանալ, հանդես գալ 2.լինել, պատահել, կատարվել fare (n) տոմսի արժեք, ուղեվարձ far-flung 1.հեռավոր, հեռահաս 2.լայնածավալ, մեծածավալ fascinating գրավիչ, հրապուրիչ fashionable նորաձև, նորատիպ, ժամանակի պահանջներին համապատասխան favor 1.հավանություն տալ, նախընտրել 2.հովանավորել, օգնել , աջակցել fear 1.վախենալ 2.մտահոգվել, անհանգստանալ 3.հրաժարվել, ետ կանգնել, 4.ափսոսալ, ցավել feature առանձնահատկություն, հատկություն fee վարձատրություն, հոնորար, հատուցում, վճարում fiat money չփոխարկվող թղթադրամ 294 fierce կատաղի, դաժան film ֆոտոժապավեն, կինոժապավեն finalize 1.ավարտել, վերջնական տեսք տալ 2.համաձայնեցնել finger-licking համեղ, ախորժելի, «մատներդ կլիզես (սննդի մասին) fitting 1. մասեր, լրամասեր (կահույքի) 2.պիտույքակազմ 3.սարքավորում fixated սևեռված, կլանված, համակված flagship 1.ամենաորակյալ արտադրանք 2.հրամանատարի/ֆլագմանի նավ flavor համ, հոտ, բուրմունք flaw արատ, թերություն, թույլ կողմ fleet 1.շարժակազմ, պարկ 2.նավատորմ flexibility 1.ճկունություն, առաձգականություն 2.զիջողականություն flexible ճկուն, առաձգական flight թռիչք float լողալ, տատանվել (արժույթի, փոխարժեքի մասին) flow հոսք, հոսանք fluctuate տատանվել, անկայուն լինել fluctuation տատանում, անկայունություն focus group ֆոկուս խումբ folkways ժողովրդական ավանդույթ/կենսակերպ foray 1.մտնելու փորձ 2.արշավանք, ավերում 295 forbid (forbade, forbidden) 1.արգելել, թույլ չտալ 2.խոչընդոտել forefront առջևի մաս, առաջավոր գիծ, գործունեության կենտրոն forge 1.հորինել 2.ստեղծել, հիմնել (հարաբերություն և այլն) forgo 1.հրաժարվել, ետ կանգնել 2.խուսափել, զգուշանալ formidable 1.ահագին, հսկայական, ահռելի 2.դժվարին formulation ձևակերպում forum համաժողով, լայն ներկայացուցչական ժողով foster 1.խնամել, մեծացնել 2.նպաստել, խթանել, զարգացնել fraction 1.մաս, բաժին 2.կոտորակ fragnance 1.բույր, բուրմունք, անուշահոտություն 2.օծանելիք framework կմախք, հենք, շրջանակ freight 1.բեռ 2.փոխադրավճար, փոխադրավարձ 3. բեռնափոխադրում frequent հաճախակի frequently հաճախ, հաճախակիորեն from scratch հենց սկզբից, ոչնչից, դատարկ տեղից front ռազմաճակատ, ճակատ front-stage 1.բեմի առջևի մաս 2.երևացող 296 fuel (v) 1.վառելիքով ապահովել 2.բորբոքել fuel (n) վառելանյութ, վառելիք full-featured լրիվ ներկայանալիք, բոլոր անհրաժեշտ հատկանիշներով fund (v) 1.դրամավորել, ֆինանսավորել 2. արժեթղթերի վերածել furthermore բացի այդ, ավելին gain (n) 1.շահույթ, օգուտ 2.աճ, ավելացում 3.gains եկամուտ gain (v) 1.վաստակել, ձեռք բերել, ստանալ 2.շահել 3. օգուտ ստանալ gambling մոլեխաղով/վտանգավոր գործով զբաղվելը gap 1.բացվածք, ճեղք 2.բաց, պակասություն, թերություն garlicky սխտորով gender սեռ generate առաջացնել genie ջին (արաբական հեքիաթներում) geocentric երկրակենտրոն get a feel զգալ, հասկանալ, ըմբռնել giant հսկա/վիթխարի (մարդ) glamorous հմայիչ, հրապուրիչ gleaming շողացող, փայլող, փայլուն glue սոսինձ goddess աստվածուհի 297 governor 1.կառավարիչ 2.նահանգապետ grab շերեփաթիակ, էքսկավատոր grant (v) 1.դոտացիա վճարել 2.պարգևել, շնորհել 3.համաձայնվել 4.հնարավոր համարել grave գերեզման grilled pork petty խոզի խորոված միս/մսակտոր grooming aids խնամքի պարագաներ guarantee երաշխավորել, վստահեցնել guidance 1.ղեկավարություն 2.ցուցում 3.խորհուրդ guise արտաքին տեսք, կերպարանք hair dye մազի ներկ hallmark հարգ, հարգադրոշմ handicraft ձեռքի աշխատանք, արհեստ handle վարել, գործածել hardware (համակարգչի) սարքակազմ harm 1.վնասել, վնաս հասցնել 2.վատ անդրադառնալ, վատ ազդեցություն թողնել harsh 1.դաժան 2.կոպիտ,,տհաճ, ցավալի (իրականության, փաստերի մասին) harvest բերք, բերքահավաք head on գլխով, ուղիղ, զինված, ճակատային headquarter(v) որպես կենտրոնական գրասենյակ ծառայել 298 headquarters(n) կենտրոնական գրասենյակ, գլխավոր վարչություն heavily մեծապես, ուժեղ, սաստիկ, ծանրորեն hence հետևաբար, ուստի, այդ պատճառով heritage ժառանգություն heterogeneous տարասեռ, այլասեռ hierarchical ստորակարգային, աստիճանակարգային hierarchy ստորակարգություն, աստիճանականություն, հիերարխիա high-grade բարձրորակ hinder խանգարել, արգելք հանդիսանալ, խոչընդոտել hire վարձել hoard կիտել, դիզել, պաշար անել hold 1.բնորոշվել մի բանով 2.ունենալ, տիրել 3.կարծել, գտնել, համարել 4.բռնել, պահել homogenize համասեռ/միատարր դարձնել hop (բուսաբ.) գայլուկ, հմուլ hospitality հյուրընկալություն, հյուրասիրություն host հյուրընկալ, տանտեր, կազմակերպիչ hound որսկան շուն household (adj) տնային, կենցաղային hovering շուրջը պտտվող hybrid հիբրիդ, խառնածին 299 icon 1.պատկեր 2.սրբապատկեր identify 1.ճանաչել, ինքնությունը հաստատել 2.նույնացնել, նույնականացնել identity 1.նույնություն 2.իսկություն 3.ինքնություն, անհատականություն ignore 1.անտեսել, հաշվի չառնել 2.մերժել, չընդունել (հարցը, բողոքը) immune (to) անընկալունակ, պաշտպանված impact 1.ազդեցություն, ներգործություն 2.հարված, զարկ impede խանգարել, խոչընդոտել, դժվարացնել impediment խոչընդոտ, արգելք imperative անհետաձգելի, հրատապ, հրամայական impetus շարժիչ ուժ, խթան, ազդակ, դրդապատճառ implement կատարել, իրագործել, իրականացնել implementation իրագործում, կատարում implication 1.ենթադրություն 2.առնչություն 3.եզրակացություն, հետևանք 4.ներիմաստ, ենթատեքստ imply 1.ենթադրել, ակնարկել 2.նշանակել, բովանդակել impose 1.հարկել, հարկադրել, կիրարկել 2.հսկողություն սահմանել 3.օգուտ քաղել 300 imposition 1.հարկ դնելը, հարկադրում 2.բեռ, հարկ impoverish impoverishment 1.աղքատացնել 2.քայքայել, հյուծել աղքատացում, թշվառացում in advance նախօրոք incentive դրդապատճառ, շարժառիթ, խթան inception սկիզբ, սկզբնակետ incline 1.հակված լինել, հակում ունենալ 2.թեքվել, խոնարհվել individualistic անհատապաշտական inevitable անխուսափելի inevitably անխուսափելիորեն in excess of 1.ավելի քան 2.շռայլություն infairly 1.անարդարաբար 2.անազնվորեն inflate 1.գնաճ առաջացնել 2.գները բարձրացնել 3.ուռեցնել, մեծացնել, խոշորացնել inflexible 1.անճկուն 2.անհողդողդ, չզիջող inflow ներհոսք infrastructure ենթակառուցվածք ingenuity հնարամտություն, սրամտություն inherent հատուկ, ներհատուկ inherent(ly) հատուկ, ներհատուկ (ձևով) innocuous անվնաս, անվտանգ inoffensive անվնաս, անմեղ, անվնասակար in particular մասնավորապես, հատկապես 301 input 1.մուտք 2.ներդրում inroad 1.ներխուժում, հարձակում 2.(փոխաբերական) ոտնձգություն insight 1.ըմբռնում, բացահայտում 2.խորաթափանցություն insightful խորաթափանց inspire ներշնչել, ոգևորել, ոգեշնչել instill աստիճանաբար ներշնչել in-store խանութի ներսի intact անվթար, անձեռնմխելի, անարատ intangible անշոշափելի integration միավորում, միացում intensify 1.ուժեղացնել, սաստկացնել 2.ուժեղանալ, սաստկանալ interdependency փոխադարձ կախվածություն intermediary միջնորդ in terms of առումով, միջոցով internal ներքին interpersonal միջանձնային intervene միջամտել intervention 1.միջամտություն 2.ներխուժում, զավթում intimate մոտիկ, մտերիմ, սերտ, ջերմ invariably անփոփոխ կերպով, մշտապես, անընդհատ inventory գույքագրել, գույքացուցակ կազմել 302 investigate 1.քննել 2.հետազոտել, ուսումնասիրել ironically հեգնաբար, հեգնորեն isolate մեկուսացնել, առանձնացնել isolation մեկուսացում, առանձնացում, անջատում issue 1. խնդիր, վիճելի հարց 2.հրատարակում 3.թողարկում 4.արդյունք, հետևանք item 1.առարկա, միավոր (ցուցակի մեջ) 2.կետ, հոդված 3.հարց (օրակարգի) 4.նորություն, լուր (թերթում) joint միացյալ, համատեղ, ընդհանուր jostle 1.հրարհրել, հրմշտել 2.կռվել key գլխավոր, հիմնական keypad ստեղնախումբ know-how ձեռնահասություն, փորձառություն, հմտություն label պիտակավորել, պիտակել labor 1.ֆիզիկական աշխատանք 2.բանվորական ուժ lack 1.պակասություն զգալ, չունենալ, կարիք ունենալ 2.չբավարարել launch 1.ներկայացնել հասարակությանը 2.սկսել, ձեռնարկել 3.արձակել (հրթիռ) laundry 1.լվացքատուն 2.լվացք laundry products լվացքի պարագաներ/նյութեր 303 lavish շքեղ, ճոխ layout 1.նախագիծ, ուրվագիծ 2.դասավորություն 3.սարքավորում leeway գործողությունների ազատություն legislation օրենսդրություն legitimate 1.օրինական, օրինականցված 2.ճիշտ, տրամաբանական legroom ոտքերի տեղը մեքենայում leisure time ազատ ժամանակ liability 1.պատասխանատվություն 2.liabilities պարտավորություններ, պարտք, պասիվներ liberalization ազատականացում, սահմանափակումների վերացում lifestyle կենսաոճ line 1.գիծ 2.շարք, շարան 3.հերթ linen 1.քաթան, կտավ 2.սպիտակեղեն liquidity իրացվելիություն loan փոխառություն locker կողպվող պահարան logo լոգո, պատկերանիշ long-run երկարաժամկետ loyalty հավատարմություն, օրինապահություն luxury 1.շքեղություն, պերճանք 2.պերճանքի առարկա 3.մեծ բավականություն maintain 1.պահել, պահպանել 2.օժանդակել 304 major գլխավոր, նշանակալից majority մեծամասնություն makeup շպար, գրիմ malt ածիկ, մաստ (հացաբույսերի ծլեցրաց, չորացրած հատիկներ) manure գոմաղբ, պարարտանյութ margin 1.տարբերություն (գնի և հաշվի) 2.նվազագույն քանակություն, ստորին սահման 3. շահույթի գնանցք 4.ավելցուկ (փողի, ժամանակի) 5.լուսանցք market 1.շուկայավարել, գովազդել 2.շուկայահանել, վաճառքի դնել 3.առևտուր անել marketing mix մարքեթինգային համալիր markup վրադիր master 1.տիրապետել, հմտանալ, յուրացնել 2.հաղթահարել (դժվարությունները) maturity 1.հասունություն 2.մուրհակի վճարման ժամկետ 3.ավարտվածություն means միջոց, միջոցներ medium (հոգ. media) միջոց meet 1.բավարարել 2.հանդիպել, դիմավորել membership 1.անդամություն, անդամակցություն 2.անդամների թիվը mend the way բարելավել merchandise 1.ապրանք 2.վաճառավորում mere զուտ, սոսկ, միայն 305 merely միայն, պարզապես merge միաձուլվել, միախառնվել milieu (հոգ. milieu կամ milieus) միջավայր, շրջապատ minstrel գուսան, աշուղ, երգիչ mission ներկայացուցչություն, առաքելություն mission statement առաքելության հայտարարագիր mist մշուշ, մառախուղ mob խաժամուժ, հուզված ամբոխ mobile շարժուն, ճկուն modification փոփոխություն, ձևափոխություն modify փոփոխել, ձևափոխել monitor մշտադիտարկել, վերահսկել moped մոպեդ, մոտորավոր հեծանիվ moreover դեռ ավելին, բացի այդ most likely ամենահավանական motivation դրդապատճառ, շահադրդում, շահագրգռվածություն move տեղաշարժ, շարժում, դիրքի փոփոխություն multidomestic marketing բազմազգ մարքեթինգ multilateral բազմակողմանի multiple բազմաթիվ, բազմաքանակ, բազմազան municipality համայնք, տեղական ինքնակառավարման մարմին mutual փոխադարձ, երկկողմանի nature 1.բնույթ 2.բնություն 3.բնավորություն 306 negligible աննշան, չնչին, անարժեք net 1.զուտ, մաքուր (ապրանքի քաշի եկամտի մասին) 2.վերջնական, ամփոփիչ niece քրոջ/եղբոր աղջիկ no-brainer բարբաջանք, անմտություն, տափակություն nonconvertible անփոխակերպելի nonetheless այնուամենայնիվ, այնուհանդերձ, բայց և այնպես notable նշանավոր, ականավոր, կարևոր, հիշարժան note մուրհակ noticeable 1.ակնառու, նկատելի 2.նշանակալից, ուշագրավ notorious(ly) վատահամբավ, տխրահռչակ, անուղղելի (ձևով) novelty նորություն, նորույթ nuance երանգ, նրբերանգ nudity մերկություն nutrition 1.սնուցում, կերակրելը 2.սնունդ, կերակուր object 1.առարկել, դեմ լինել, ընդդիմախոսել 2.չկարողանալ հանդուրժել objective նպատակ, ձգտում obliged պարտավորված 307 observation 1.դիտում, զննում 2.դատողություն, դիտողություն observe 1.նկատել, ուշադրություն դարձնել 2.ուսումնասիրել, դիտել, զննել, հետևել occupation գործ, զբաղմունք, աշխատանք, մասնագիտություն occur տեղի ունենալ, պատահել, կատարվել offend վիրավորել, անպատվել, նեղացնել offensive 1.վիրավորական 2.տհաճ, անհաջող official պաշտոնյա, ծառայող (պետական) offset 1.փոխհատուցել 2.հավասարակշռել, հակակշռել on the strength հիման վրա, պատճառով, հետևանքով ongoing շարունակվող, ընթացքի մեջ գտնվող open up մուտքը բաց անել, մուտք գործելու հնարավորություն տալ operate 1.աշխատեցնել 2.ղեկավարել 3.գործել 4.ազդել opt ընտրել, ընտրություն կատարել option ընտրություն, ընտրելու հնարավորություն orderly 1.կանոնավոր, կարգին 2.ճշտապահ, պարտաճանաչ original 1.նախնական, սկզբնական, բնօրինակ 2.ինքնատիպ, յուրօրինակ otherwise 1.այլապես 2.մնացած առումներով 308 outcome արդյունք, հետևանք, ելք, վախճան outflow արտահոսք outlet 1.վաճառքի/բաշխման կետ 2.մասնագիտացված խանութ outright կատարյալ, լիակատար, բացաձակ outstanding stock թողարկված և շրջանառության մեջ գտնվող արժեթուղթ, չվճարված բաժնետոմս overall 1.ընդհանուր, համընդհանուր 2.գումարային overcome հաղթահարել overseas արտասահմանյան , արտաքին overt բաց, բացահայտ overtake հասնել, հասնել-անցնել over-the-counter market արտաբորսայական շուկա overturn 1.տապալում, կործանում, վայր գլորելը, պարտություն 2.հեղաշրջում overvalue գերագնահատել overwhelming անհամար, անհաշիվ, ճնշող Pacific Rim Խաղաղ օվկիանոսյան ավազանի երկրներ package փաթեթ pact պայմանագիր, դաշինք, դաշնագիր, համաձայնագիր painful(ly) ցավոտ (ձևով), ծանր(որեն), ճնշող(ձևով) 309 pan-Asian համա-ասիական panel 1.խորհուրդ, մասնագիտական խումբ 2.տախտակ 3. մեծ լուսանկար parity 1.հավասարություն 2.համարժեքություն partial մասնակի, ոչ լրիվ participate (in) մասնակցել, մասնակցություն ունենալ party 1.խումբ 2.մասնակից 3.երեկույթ, հավաքույթ 4.կողմ 5.կուսակցություն pass (on to) առաջ անցնել, հաջորդին հանձնել passage 1.անցում 2.հաստատում, հաստատելը 3.միջանցք 4.հատված (գրքից) passion 1.բուռն զգացմունք 2.կիրք, խանդավառություն patent արտոնագիր, վկայական patient համբերատար, հանդուրժող pattern 1.օրինակ, նմուշ, ձև, մոդել 2.նկար pave the way (for) պայմաններ, հող նախապատրաստել, ճանապարհ հարթել pea-sized սիսեռի/ոլոռի չափ peg per capita որոշակի մակարդակի վրա պահել (գինը, տոկոսադրույքը) մեկ չնչին ընկնող percentage տոկոս, տոկոսային հարաբերություն perishable շուտ փչացող persist 1.համառել 2.դիմանալ, պահպանվել persistent 1.մշտական, մնայուն, հարատև 2.կայուն 3.համառ, հաստատակամ 310 personnel անձնակազմ pertain 1.վերաբերել, կապ ունենալ 2.պատվիրել phase փուլ phenomenon (հոգն. phenomena) երեևույթ(ներ) philanthropic բարեգործական, մարդասիրական pipe խողովակ, խողովակաշար placement տեղադրում, տեղավորում plentiful առատ, լիուլի, հարուստ ploy խորամանկություն, խորամանկ քայլ plunge 1.ընկնել, սուզվել 2.տհաճ դրության մեջ ընկնել /հայտնվել polycentric բազմակենտրոն portfolio investment փաթեթի/պորտֆելի ներդրում positioning դիրքավորում possess տիրել, ունենալ possession սեփականություն, ունեցվածք, տիրելը postulate առաջադրել posture դիրք, դրություն, վիճակ pour թափել, ծորալ, լցնել preempt premier 1.կանխել 2.նախապես տիրել ինչ-որ բանի 1.գերադասելի 2.արտոնյալ (մաքսատուրքի մասին) առաջին, գլխավոր premium բարձրակարգ, առաջնակարգ prerequisite նախադրյալ, անհրաժեշտ պայման preferential 311 present 1.ներկայացնել 2.հանդիսանալ 3.նվիրել, ընծայել preservation պահպանում, պահպանվածություն preserve պահել, պաշտպանել, պահպանել preside նախագահել, ղեկավարել prevail 1.գերակշռել, գերազանցել 2.տիրել, տարածված լինել prevent կանխել, առաջն առնել, խանգարել prevention կանխում, կանխելը price-driven գնային principle 1.սկզբունք, դրույթ 2.հիմք principle հիմնական, սկզբունքային prior նախորդող, նախորդ priority առաջնություն, նախապատվություն procedure ընթացակարգ, արարողակարգ, գործելակերպ process մշակել, մշակման ենթարկել procure հայթայթել, գտնել, ճարել procurement 1.հայթայթելը, ճարելը 2.գնում, մատակարարում product adaptation արտադրանքի հարմարեցում product invention նոր ապրանքի ստեղծում product mix արտադրանքի համալիր profound խորը, խորիմաստ, լրիվ, լիակատար, բացարձակ progressive առաջադիմական, առաջընթաց 312 progressively աստիճանաբար prohibit արգելել, թույլ չտալ proliferation տարածում, արագ բազմացում/աճ promote 1.առաջ մղել 2.գովազդել 3.պաշտոնը բարձրացնել promotion 1.առաջանցում, առաջմղում 2.խթան 3.առաջ քաշում (ծառայության մեջ) 4.առաջխաղացում prompt 1.դրդել, հրահրել, մղել 2.հուշել promptly 1.արագորեն 2.ճշտորեն, ճիշտ prone to հակված, հակամետ, ենթակա proposal առաջարկ, առաջարկություն propose 1.առաջարկել, առաջարկություն անել 2.առաջադրել proposition 1.ձեռնարկում, գործ 2.խնդիր 3.պնդում, հաստատում 4.առաջարկություն proprietary սեփականություն կազմող, սեփականատիրական prospective ապագա, գալիք, սպասվող, ենթադրվող prosperity ծաղկում, բարգավաճում protectionism հովանավորչություն, պաշտպանություն prove 1.պարզվել 2.ապացուցել prowl գաղտագողի մոտենալ (որսին) psychologically pull ahead off հոգեբանորեն առաջ անցնել purchasing -power գնողունակություն 313 purchasing power parity գնողունակության համարժեքություն purport 1.ասել 2.նշանակել, իմաստ ունենալ 3.ներկայացնել pursue 1.հետապնդել, հետամուտ լինել 2.վարել pushcart ձեռնասայլակ put 1.արտահայտել 2.դնել, տեղավորել qualify 1.որոշել, սահմանել, գնահատել 2.սահմանափակել qualify for որակվել, համարվել, բավարար համարվել quantifiable չափորոշելի questionable կասկածելի, վիճելի, անվստահելի questionnaire հարցաթերթիկ, անկետա queue հերթ quid pro quo մեկ այլ բանի փոխարեն quota մաս, բաժին, չափաբաժին, քվոտա racially ռասայականորեն random պատահական range rank 1.սահման 2.շարք, քանակություն 3.դիապազոն, դիտահորիզոն 1.դասակարգել 2.շարք կանգնեցնել rapid (ly) արագ/արագընթաց(որեն) rather 1.ավելի շուտ, նախապատվորեն 2.բավականաչափ 3.որոշ չափով, փոքր ինչ 4. քան թե, քան 314 ratio հարաբերություն, հարաբերակցություն rationale հիմունք, հիմնավորում, պատճառ readiness պատրաստակամություն, սիրահոժարություն realignment դիրքը փոխելը/վերականգնելը rear seat ետևի նստատեղ մեքենայում receptive ընկալունակ, ըմբռնելու ընդունակ reconfigure վերաձևավորել, նոր ձև տալ (հաղորդել) recreational թարմացնող, ուժերը վերականգնող recruit 1.հավաքագրել 2.կազմավորել 3.ներգրավել recruitment հավաքագրում, շարքերի համալրում recycler վերամշակող red tape քաշքշուկ, ձևամոլություն, բյուրոկրատություն reduce 1.նվազեցնել, պակասեցնել 2.կրճատել (ծախսերը) reduction 1.նվազում, նվազեցում 2.կրճատում, իջեցում (գների) reevaluate վերագնահատել refer (to) հղել, վկայակոչել, հիշատակել, վերաբերել reference 1.մեջբերում, հիշատակում, ակնարկ 2.առնչություն reflect արտացոլել, անդրադարձնել reflection (նաև reflexion) արտացոլում, անդրադարձում 315 regarding վերաբերյալ, առնչվող regardless ուշադրություն չդարձնելով, հաշվի չառնելով, անկախ register գրանցել, արձանագրել reinterpret վերամեկնաբանել, վերաբացատրել relate (to) վերաբերել, կապ/առնչություն ունենալ, կապված լինել (մի բանի հետ) relative հարաբերական, համեմատական relatively համեմատաբար, հարաբերականորեն relevant տեղին, հարմար, պատշաճ, համապատասխան reliability reliable relief հուսալիություն, արժանահավատություն, ստույգություն հուսալի, վստահելի, արժանահավատ, ստույգ 1.թեթևացում, մեղմացում (ցավի) 2.օգնություն, նպաստ, օժանդակություն relieve relinguish remit remittance remote 1.թեթևացնել, մեղմացնել, թուլացնել, նվազեցնել 2.օգնության հասնել, փրկել 1.թողնել, լքել, հրաժարվել 2.զիջել 1.ուղարկել, առաքել, փոխադրել(փոստով) 2.նվազեցնել, թուլացնել (ջանքերը, լարվածությունը) 1.փոխադրում, առաքում (փողի) 2.փոխադրված փող, դրամական փոխանցում 1. հեռավոր, հեռու 2.քիչ հավանական, աննշան, փոքր 316 remove 1.հեռացնել, մաքրել 2.վերացնել 3.մաքրել renowned հռչակավոր, փառաբանված, ականավոր rep =representative ներկայացուցիչ repeal չեղյալ հայտարարել, ուժը կորցրած ճանաչել reprice վերագնահատել, նոր գին սահմանել request խնդրանք, պահանջ, պատվեր, հարցում rescue փրկություն, ազատում resent վրդովվել, զայրանալ, բարկանալ, վիրավորվել reshape ձևափոխել, հարմարեցնել resident բնակիչ, մշտական բնակիչ resist resolve 1.դիմադրել, դիմադրություն ցույց տալ 2.պայքարել վճռել , որոշել, որոշում ընդունել respective համապատասխան, յուրաքանչյուրը respond 1.պատասխանել 2.արձագանքել respondent պատասխանող response պատասխան, արձագանք, in response to ի պատասխան responsiveness 1.զգայունակություն, նրբանկատություն, 2.պատրաստակամություն restore վերականգնել, վերահաստատել, վերակառուցել 317 restrict 1.սահմանափակել 2.թույլ չտալ, արգելել restriction սահմանափակում retail մանրածախ առևտուր retain պահել, պահպանել, հիշողության մեջ պահել return (n) 1.վերադարձ 2.եկամուտ, հասույթ, շահույթ returnable վերադարձվելիք reveal 1.բացահայտել, մերկացնել 2 ցույց տալ revenue եկամուտ, եկամտի աղբյուր review 1.վերանայել 2.նորից դիտել, զննել, ստուգել rickshaw ռիկշա (մարդատար երկանիվ սայլակ հեռավոր արևելքի մի շարք երկրներում) ritual 1.ծիսական, ծիսակարգային 2.սովորությունից եկող rival մրցակից, ախոյան rivalry մրցակցություն, մրցապայքար rollout (n) զանգվածային արտադրություն router (համակարգչի) երթուղղիչ royalty 1.հեղինակային պարտավճար/հոնորար, արտոնագրային իրավունքի վճար 2.երկրի ընդերքի մշակման համար տրվող վճար 318 rugged 1.ամուր, դիմացկուն 2.անհարթ, խորդուբորդ 3.ծանր, դժվար (կյանքի մասին) rule 1.ղեկավարել, կառավարել 2.իշխել, գերիշխել run այստեղ՝ ղեկավարել rural գյուղական rutted ակոսապատ sabotage նենգադուլել, վնասարարությամբ զբաղվել sacred 1.սուրբ, սրբազան 2.հոգևոր, ոչ աշխարհիկ 3.անձեռնմխելի salient աչքի ընկնող, ուշագրավ, ակնառու sample նմուշ, օրինակ, կաղապար saturation հագեցում, հագեցվածություն savvy հնարամտություն, ճարպկություն scale 1.մասշտաբ, չափագիծ 2.սանդղակ scene 1.գործողության վայր, ասպարեզ 2.տեսարան scheme 1.նախագիծ, պլան, գործունեության ծրագիր 2.համակարգ 3.կառուցակարգ, սխեմա scoot 1.վարել, քշել 2.տեղից պոկվել scooter 1.հրվող երկանիվ 2.մոտորասայլակ screening device ցուցադրող սարք/հարմարանք/միջոց seek 1.փնտրել 2.ջանալ, աշխատել, փորձել 319 seemingly արտաքինից դատելով, ըստ երևույթին segment հատվածավորել segmentation հատվածավորում seize 1.բռնել, ճանկել 2.նվաճել, գրավել self- image ինքնագնահատական self-actualization ինքնահաստատում semiconductor sense կիսահաղորդիչ 1.զգացում 2.առողջ դատողություն, բանականություն sensibility 1.զգայունություն, զգայունակություն 2.նրբազգացություն sensible խելացի, խելամիտ, բանական, գիտակցող sensitive զգայուն sequential 1.հաջորդական 2.որևէ բանից հետևող/բխող session նիստ, նստաշրջան severe խիստ, դաժան, անողոք shaver սափրվելու սարք shelter 1.պատսպարել, պաշտպանել 2.ապաստարան տալ shift 1.տեղաշարժել 2.փոխել, փոփոխել ship փոխադրել, ուղարկել shower 1.վրան տեղալ/լցնել 2.հորդառատ անձրևել shrink կարճանալ, նեղանալ, կծկվել 320 shut out արգելել, թույլ չտալ significance կարևորություն, նշանակություն significant կարևոր, էական, նշանակալից significantly էականորեն, նկատելիորեն silhouette ստվերապատկեր, ուրվագիծ simultaneously միաժամանակ skill հմտություն, կարողություն, պատրաստության աստիճան slap 1.ապտակել 2.շպրտել 3. այստեղ՝ կպցնել slash 1.թրատել, շերտատել 2.կտրել, հնձել slight թույլ, աննշան, չնչին slogan կարգախոս socialize հանրայնացնել, համայնացնել, սոցիալականացնել soft-drink ոչ ոգելից ըմպելիք software (համակարգչի) ծրագրակազմ solely միմիայն, լոկ, սոսկ, բացարձակապես solicit 1.պահանջել 2.դիմել, խնդրել solicitous հոգատար, հոգ տանող sophisticated կատարելագործված, բարդ, նրբին (մեքենայի մասին) soybean սոյա spawn 1.սերել, բազմանալ 2.առաջացնել 3.մեծ քանակությամբ աճել special drawing rights հատուկ փոխառության իրավունք 321 spectacular տպավորիչ, գրավիչ, հրապուրիչ speculator վերավաճառող, շահախաղով զբաղվող speedy արագընթաց, արագ, սրընթաց spill 1.թափել, շաղ տալ 2.ցրել spongy սպունգանման, ծակոտկեն sponsorship հովանավորություն spot 1.տեղ 2.բիծ, բծիկ spread too thin անբավարար չափով տարած(վ)ել staff հաստիքները համալրել, անձնակազմով ապահովել staffer հաստիքային աշխատակից stagnant 1.կանգնած, լճացած 2.իներտ, անգործունյա, անշարժ stake 1.որևէ ձեռնարկության մեջ ներդրված կապիտալ 2.խաղագումար stand out առանձնանալ startle 1.ապշեցնել, ցնցել 2.վախեցնել statement 1.հաշվետվություն, զեկույց 2.հայտարարություն, պնդում, կարծիք statutory օրենքով սահմանված/նախատեսված steep 1.չափազանց բարձր 2.շեշտակի, ուղղաձիգ, զառիթափ stigma խարան, խայտառակություն stimulate 1.խթանել 2.խրախուսել, քաջալերել, ոգևորել stimulus (հոգ. stimuli) խթան, շարժառիթ, դրդապատճառ, ազդակ 322 stopwatch վայրկենաչափ store կուտակել, ամբարել, մատակարարել straight product extension առանց հարմարեցման strenuously եռանդուն կերպով, աշխուժորեն, ջերմեռանդորեն strict 1.խիստ, խստապահանջ 2.ճշգրիտ, ստույգ strike (struck, struck/stricken) down կասեցնել, ետ մղել strive ջանալ, աշխատել, ջանք գործադրել subsequently արդյունքում, այնուհետև, հետագայում subsidiary բաժանմունք, մասնաճյուղ subsidy նպաստ, դրամական օժանդակություն, լրավճար subsistence economies բնատնտեսությամբ երկրներ substantial էական, հիմնական, կարևոր, զգալի substantially 1.ըստ էության, էապես 2.զգալիորն 3.ամուր կերպով substitute փոխարինել subtle նուրբ, աննկատ sufficiency բավարար լինելը, բավարար քանակությամբ sufficient բավականաչափ, բավարար suggest 1.առաջարկել 2.ենթադրել superior 1.գերազանցող 2.ավագ, վերադաս supervise 1.հսկել, վերահսկել 2.կառավարել, տնօրինել 323 supervision վերահսկում, վերահսկողություն supervisor 1.վերահսկող 2.ղեկավար, կառավարիչ, տնօրեն supplies 1.պաշար 2.մթերք supply 1.մատակարարում 2.առաջարկ support 1.պահել, հոգալ 2.քաջալերել, օժանդակել, աջակցել 3.ապացուցել, հաստատել supporter կողմնակից, հետևորդ, պաշտպան supportive աջակցող supranational վերազգային surcharge 1.լրացուցիչ վճար, վերադիր ծախս 2.տույժ, տուգանք 3.գերածախս 4.գերբեռնվածություն surpass գերազանցել, սպասածից ավելի լինել survey 1.դիտել, զննել, ստուգել, քննել, ուսումնասիրել 2.հարցում անել survival 1.կենդանի մնալը, գոյատևում 2.մնացորդ, վերապրուկ survive կենդանի մնալ, ապրել, գոյատևել, փրկվել sustain 1.պահել 2.պահպանել 3.տանել, դիմանալ sustained growth կայուն աճ taboo տաբու, հպարգելք take for granted 1.ինքնին ենթադրվող համարել, սովորական համարել, թերագնահատել 2.ապացուցված/հնարավոր համարել 324 tap (into) 1.(այստեղ) մուտք գործել 2.թեթև բախել target 1.թիրախ դարձնել, նշան բռնել, նպատակակետ դարձնել 2.ուղղել (ինչոր) նպատակի tariff սակագին temporarily ժամանակավորապես temporary ժամանակավոր tempting գայթակղիչ, հրապուրիչ testing փորձելը, ստուգելը thereby դրա շնորհիվ, դրա հետևանքով, այդ կապակցությամբ thorough կատարյալ, լիակատար, հիմնավոր threat սպառնալիք, վտանգ threaten սպառնալ, վախեցնել three-wheeled եռանիվ tie up միանալ, համախմբվել time frame ժամանակահատված, ժամանակամիջոց timeliness պատեհաժամություն timely ժամանակին արված, ճիշտ ժամանակին tin 1.անագ 2.թիթեղ tiny շատ փոքր, մանր, մանրիկ tire դող, անվադող to ban(ned) արգելել, արգելք դնել to some extent ինչ-որ չափով 325 toiletries հիգիենայի պարագաներ top-grossing ամենաեկամտաբեր tough 1.կոշտ (սննդի մասին) 2.ամուր 3.հաստ tough 1.հաստատակամ,ինքնավստահ 2.դժվար, դժվարին, ծանր 3.դիմացկուն, ամուր tracking հետևելը trademark 1.առևտրանիշ, առևտրանշան 2.առանձնահատկություն tradeoff փոխհատուցում trail հետքով գնալ trait նկարագիր, դիմագիծ, հատկանիշ transaction գործարք transfer 1.փոխադրություն, տեղափոխություն 2.փոխադրում, փոխանցում (փուլի) transmission հաղորդում, փոխանցում transparancy թափանցիկություն treasury bill գանձապետական պարտատոմս treat 1.վարվել, վերաբերմունք ցուցաբերել 2.համարել 3.բուժել 4.(այստեղ) մշակել մի բան treatment 1.վերաբերմունք 2.բուժում 3.մշակում, վերամշակում (քիմիական նյութերով) treaty միջազգային պայմանագիր, դաշնագիր trend միտում, ընդհանուր ուղղություն, տենդենց 326 trend- setter նորաձևության առաջատար triad եռյակ, երեք հոգուց (առարկայից) բաղկացած խումբ truck բեռնատար, բեռնատար ավտոմեքենա turf 1.գործունեության ոլորտ 2.բնակավայր 3.տորֆ, ճիմահող ultimate 1.վերջին, վերջնական 2.առավելագույն, ծայրահեղ ultra-absorbent խիստ ներծծող/քաշող ultra-cheap չափազանց էժան, չափից դուրս էժան unabashed(ly) չշփոթված, չվախեցած, անպատկառ (ձևով) unacquainted անծանոթ uncertainty 1.անհամոզվածություն, տարակուսանք 2.անորոշություն under consideration քննարկվող, քննարկման մեջ underestimate թերագնահատել undermine 1.վնասել, աստիճանաբար փչացնել/թուլացնել 2.քայքայել undertake undervalue 1.ձեռնարկել, նախաձեռնել 2.պարտավորվել, ստանձնել թերագնահատել underwear սպիտակեղեն, ներքնազգեստ unilateral միակողմանի unintended չմտադրված unique եզակի, միակ, անզուգական, յուրահատուկ 327 universal 1.համընդհանուր 2.բազմակողմանի 3.տիեզերական, համաշխարհային unpaved անհարթ unprecendented աննախադեպ unpredictable անկանխատեսելի unsophisticated պարզ, հասարակ untapped չմտած, մուտք չգործած upgrade 1.բարձրացնել 2.բարելավել upgrade բարելավում uproot արմատախիլ անել, վերացնել urban քաղաքային usable գործածելի, օգտագործելի utilize օգտագործել, գործածել, կիրառել, բանեցնել van 1.վագոն 2.բեռնասայլ, ֆուրգոն variable փոփոխական variation 1.փոփոխություն 2.շեղում varied տարբեր, զանազան, բազմազան variety vegetarian 1.տարատեսակ 2.զանազանություն 3.շարք, մեծ քանակություն 1.հսկայական, անսահման 2. մեծաթիվ, մեծաքանակ բուսակեր vehicle փոխադրամիջոց veil 1.քող, ծածկոց 2.վարագույր, դիմակ vend վաճառել, առևտուր անել vast vending machine ավտոմատ վաճառող սարք 328 vendor վաճառող venture 1.խիզախել 2. համարձակվել 3.վտանգի/ռիսկի ենթարկվել verge 1.ծայր 2.եզր, սահման versus veto 1.դեմ, ընդդեմ, հակառակ 2.ի հակադրություն վետո /արգելք դնել/ կիրառել via 1.միջոցով, օգնությամբ 2.ճանապարհով, վրայով viable գործող, աշխատող, արդյունավետ victim զոհ view virtual 1.տեսադաշտ 2.տեսարան 3.դիտում, զննում, քննում 4.հեռանկարներ փաստացի, իրական, իսկական virtually փաստորեն, իսկապես, ըստ էության vis-a-vis 1.ի տարբերություն 2.կապված, վերաբերյալ visible տեսանելի, նկատելի, նշմարելի vision vital 1.տեսլական 2.տեսադաշտ 3.մտահորիզոն էական, անհրաժեշտ, կենսական volatile փոփոխամիտ, անկայուն volume ծավալ voluntary կամավոր, կամավորական, հոժարակամ 1.արտադրանք վաճառքի համար 2.կավեղեն, կերամիկա ware 329 watchdog 1.պահապան շուն 2.դիտորդ, դիտորդական խումբ wax մոմ, մեղրամոմ wear off (wore, worn) ջնջել, սրբելով/տրորելով անցկացնել weigh 1.կշռել, չափել 2.կշռադատել weighted average միջին թվաբանական welfare բարեկեցություն, ապահովվածություն well 1.հորոտանցք 2.նավթահոր well-being բարեկեցություն, բարօրություն well-conceived լավ մտածված wherein 1.որտեղ 2.ինչ առումով wherewhital միջոցներ, փող whether 1.թե, արդյոք 2.անկախ այն բանից թե… wholesale մեծածախ առևտուր whopping հսկայական widespread լայնատարած, տարածված wildfire կայծակ wise(ly) իմաստուն, խոհեմ, ողջամիտ (ձևով) withdraw (withdrew,withdrawn) 1.ետ վերցնել/քաշել 2.հրաժարվել 3.ետ կանչել within ներսում, ներսը, սահմաններում worldwide համաշխարհային, աշխարհով մեկ yeast թթխմոր, խմորիչ yield 1.տալ, բերել (եկամուտ) 2.արտադրել 3.զիջել, տեղի տալ 330 BIBLIOGRAPHY 1.Kate Gillespie, H.David Hennessey, “Global Marketing”, South-Western Cengage Learning, Canada, 2009. 2.Masaaki Kotabe, Kristiaan Helsen, “Global Marketing Management”, 5th edition, Wiley, USA, 2010. 3.Philip Kotler, Gary Armstrong, “Principles of Marketing”, 14th edition, Pearson, 2013. 4.E.Jerome McCarthy, William D. Perreault Jr., “Basic – Marketing – A Global Management Approach”, Irwin, Sydney, Australia, 2012. Dictionaries 5.Խաչիկ Գրիգորյան, Զարուհի Գրիգորյան, “ԱնգլերենՀայերեն Արդի Բառարան”, Անկյունաքար, 2010. 6.A.S.Hornby, “Oxford Advanced Learner’s Dictionary of Current English”, 5th edition, Oxford University Press, 2000. Electronic sources 7.http://www.kellogg.northwestern.edu/Faculty/Directory/C orse Phillip.aspx 8.http://www.entrepreneur.com/article/238773 9.http://www.entrepreneur.com/article/238537 10.http://www.entrepreneur.com/article/239999 331 ê.². â²È²´Ú²Ü Global Marketing ²Ü¶ÈºðºÜÆ àôêàôØÜ²Î²Ü ÒºèÜ²ðÎ Ø²ðøºÂÆÜ¶Æ Ø²êÜ²¶ÆîàôÂÚ²Ü àôê²ÜàÔÜºðÆ Ð²Ø²ð 332

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