Question

1. Outline the basic steps of the market research process and provide a brief description of each step.

1. (Explain each of Hofstede’s five dimensions of national culture. Identify a country outside of North America and evaluate it according to the five dimensions. Justify your reasoning.

2. Describe the five characteristics of innovations. How do these characteristics affect the rate at which innovations are adopted? Describe an example of each characteristic.

3. What is expropriation? Compare and contrast confiscation, nationalization, and creeping expropriation

Answer 1

Outline the basic steps of the market research process and provide a brief description of each step.

1. Identifying the information requirement- existing market or potential markets
2. Problem definition and overcoming the SRC- SRC occurs when a person’s values and beliefs intrude on the assessment of a foreign culture.
3. Choose a unit of analysis- global, region, country, province, state, city.
4. Examine data availability- company records or secondary sources.
5. Assess value of research- what is the information worth vs what it will cost to collect.
6. Research Design- multiple indicators, develop customized indicators specific to the industry, product market or business model. Issues in data collection in existing markets may be inconsistent.

(Explain each of Hofstede’s five dimensions of national culture. Identify a country outside of North America and evaluate it according to the five dimensions. Justify your reasoning.

1)Power Distance- the extent to which the less powerful members of a society accept power to be distributed unequally. EX: Mexico accepts wide differences in power

2) Individualist cultures- each member of society is primarily concerned with his or her own interest and those of the immediate family. Collectivist cultures- all society members are integrated into cohesive groups. EX: In the U.S. people look after their own and family interests.

3) Masculinity- Men are expected to be assertive, competitive, and concerned with material success, and women fulfill the role of nurturer and welfare of children. EX: Japan values such as assertiveness, acquiring money and goods.

4) Uncertainty avoidance- is the extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured situations. EX: Italy threatened with ambiguity and experience high levels of anxiety.

5) LTO- concerning a society search of virtue, rather than a search for the truth. Assesses the sense of immediacy with in a culture. EX: Germany looks to the future and value thrift and persistence.

Describe the five characteristics of innovations. How do these characteristics affect the rate at which innovations are adopted? Describe an example of each characteristic.

1. Relative advantage- how a new product compares with existing products or methods in the eyes of customers. If a product has relative advantage over its competition it is likely to gain quick acceptance. EX: compact discs vs. vinyl records.
2. Compatibility- The extent to which a product is consistent with existing values and past experiences of adopters. The lack of compatibility of new products in the target market. EX: VCR’s vs. Betamax and VHS.
3. Complexity- The degree to which an innovation or product is difficult to understand or use. This can slow down rate of adoption particularly in developing country. In 1990 global companies developed new interactive multimedia products.
4. Divisibility- The ability of a product to be tried and used on a limited basis without great expense. There are wide discrepancies in income levels around the globe that result in major differences in purchase quantities. U.S. jars of mayonnaise did not sell in south America.
5. Communicability- The degree to which benefits of an innovation or the value of a product may be communicated to a potential market. A digital cassette recorder from Philips was a market failure because advertisements did not communicate the product could make CD- quality recordings using new technology.

What is expropriation? Compare and contrast confiscation, nationalization, and creeping expropriation

Expropriation- Governmental action to dispossess a foreign company or investor. EX: In 1959 Castro Cuban government nationalized U.S. sugar companies and paid in Cuban government bonds. A nontariff barrier is a way to restrict trade using trade barriers in a form other than a tariff. EX: quotas, embargoes, sanctions, levies.

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