M.B.A. (Part II) (Semester IV) (New-CBCS) Examination, 2017
INTERNATIONAL MARKETING (Paper
Group-A Marketing Management
Day and Date Friday, 26-5-2017 Max. Marks 70
Time 10.30 a.m. to 1.00 p.m.
Instructions Q. No. 1 is compulsory.
Answer any two questions from Q. No. 3 and 4.
Answer any two questions from Q. No. 6 and 7.
1. Case Study
A decade ago with the aim to create pollution free roads the US Government
adopted a regulation mandating specific standards for the quality of gasoline
sold in the United States. Oil producing countries protested, Venezuela in particular.
According to them this regulation was unfair as 2/3 of Venezuela oil export was
dependents on US markets. The dispute created controversy and tension between
the two countries.
The aim of the Environment Protection Agency under the Clean Air Act
was to improve quality of air, which was deteriorated due to gasoline
emissions. The regulation imposed different standards on domestic and imported
gasoline. It was challenged by Venezuela in the WTO citing it as a violation of
the principle of national treatment. Venezuela argued that imported goods once
in the domestic market of the member country cannot receive treatment less
favorably than the internally produced goods. Venezuelan gasoline imported in
the US was subject to test standards much more rigorous than those imposed on
gasoline produced in the United States.
The US argued that this discrimination was devoid under Article 20 of the GATT,
which states that under certain conditions, countries can take measures that
would be normally outlawed in order to conserve exhaustible natural resources,
protect human, animal or plant life. One of the major conditions is that these
measures should not be protectionism in disguise.
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Venezuela refuted the argument saying if US wanted very clean gasoline, they
should submit both domestic and imported gasoline to same high standards. The
new regulation had important economic impact for Venezuela as producing gasoline
as requested by US represented an expense of 40 million dollars in the first three
years. The US market was extremely important for Venezuela and its export
earnings.
The WTO panel consisting of three independent experts chosen by both sides on
a dispute ruled that imported gasoline was indeed discriminated against and this
could not be justified even under Article 20. A month later US appealed the
panels conclusions. The appeals were heard by appellate body of WTO. It is a
permanent group of seven persons of recognized authority with demonstrated
expertise in law and International Trade. The appellate body in two months
confirmed the panels ruling that discrimination against imported gasoline was
not justified under Article 20, but it ordered a broad interpretation of this provision.
Although the US was not satisfied with the outcome no further recourse was
available. The Appellate body report and modified panel report were adopted by
the Dispute Settlement Body in 1996 i.e. just in a year when panel was appointed.
The complaining countries were satisfied with the outcome and the way the
dispute was handled. The resolution confirmed that the dispute settlement system
was working in a neutral way in which countries could trust. The European Union
had substantial interest in this case and was the third party.
The US had to implement the ruling; it had to change its legislation. It took US 15
months to implement necessary changes in the legislation from the day the
dispute was resolved.
Questions
Analyze the case. 4
Why did US agree to the dispute settlement decision taken by WTO 5
Discuss the implications of WTO decision on the international marketing
prospects of gasoline from Venezuela. 5
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2. Write short notes on (any two) 14
Challenges and opportunities in global marketing.
Global market segmentation.
International product life cycle.
3. Write short note on (any two) 14
Trade strategy in India.
Channel objectives and constraints.
Documents related to goods.
4. Answer in short (any two) 14
Deciding on marketing organization.
Indo Sri Lanka free trade agreement.
Global targeting.
5. Discuss the market entry strategies for global marketing. 14
6. Explain the important steps in export procedure. 14
7. Describe in brief the constituents of Global marketing environment. 14