International Marketing: Why Famous Translation Blunders Are Myths
How firms pick foreign markets, enter them, adapt products and prices, move goods and speak to audiences across cultures.
Try 3 questions
1. According to the Uppsala model, which foreign markets do firms usually enter first?
- Those offering the lowest labor costs
- Those culturally and geographically closest
- Those with the largest total populations
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Answer: Those culturally and geographically closest
Firms expand gradually, starting where 'psychic distance' is small and learning from experience before tackling more unfamiliar markets.
2. Why does a large, wealthy but distant market often generate less trade than a smaller neighbor?
- Cultural, legal and physical distance cut trade
- Large markets always shut out foreign firms
- Wealthy consumers buy only local products
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Answer: Cultural, legal and physical distance cut trade
Research on 'distance' shows shared language, borders, legal ties and similar income levels all strongly increase trade between countries.
3. Why do analysts often compare countries' incomes using purchasing power parity instead of market exchange rates?
- It counts only the richest households
- Exchange rates are not publicly available
- It adjusts for differences in local prices
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Answer: It adjusts for differences in local prices
The same income buys much more in a country with low local prices, so PPP gives a truer picture of what consumers can actually afford.
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