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Marketing 477 Exam
1. What is ethnocentrism? Does it aide or impede global business success? What is a
self reference criterion? Does it aide or impede global business success? Use a real
world example to explain your answer. How are the self-reference criterion and
ethnocentrism related?
Ethnocentrism refers to the tendency of judging other cultures by the values and
standards of one’s own culture (Cateora, 16). An ethnocentric person therefore believes that
his/her own culture is superior to other cultures. Ethnocentrism is based on the notion that one’s
own culture, country or even business organization knows best how to do things. On the other
hand, self reference criterion (SRC) refers to the unconscious reliance on one’s own cultural
values, experiences and knowledge as a basis of decision making (Cateora, 16). Self-reference
criterion and ethnocentrism are closely related in the sense that they both value one’s cultural
preoccupations above those of other people or country. Both ethnocentrism and self-reference
criterion impede global business success. In fact, most of the decisions made on the basis of
ethnocentrism and self-reference criterion are incorrect or flawed since meanings, values and
other cultural elements differ from one country to another (Cateora, 17). A good real world
example of where ethnocentrism and SRC proved to be a barrier in global business success is the
case of Starbucks in Beijing, China. In America having a great cup of tea handy at a major tourist
attraction is viewed to be a brilliant idea. With this in mind, Starbucks decided to open a store in

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the Forbidden City in Beijing. While this idea received a positive response from American
tourists, Chinese people greatly boycotted the tactic. In this case Starbucks had evaluated the
marketing mix on the basis of the American experience and failed to appreciate the cultural
differences that it was required to adapt in Beijing, China.
2. Every American Company is international. Explain.
The statement that every American company is international means that American
companies are affected by international market dynamics. Therefore, the companies can be
viewed as international because their performance is at least affected by the events that occur in
the global market (abroad). As an example, when the oil prices in major producing countries
change, such a change affect the performance of even by the smallest American company in the
United States.
3. What are the major barriers to international trade? Use real world examples to
explain your answer.
The major barriers to international trade include tariffs, quotas and import licenses,
voluntary export restraints, boycotts and embargoes, monetary restrictions, standards,
antidumping penalties, and domestic and economic stimuli (Cateora, 44). Real world examples
of trade barriers include the Chinese import tariffs, the 50% tariff on imports of washing
machines in the United States, custom duties post-Brexit in the United Kingdom, quotas on lowtariff food in the European Union, the U.S voluntary export restraints, the European Union
subsidies on farming and the U.S trade embargo on Cuba during the time of Fidel Castro. To
provide an illustration of these real world examples, the United States Trade body recently
recommended 50% tariffs on imp...