Where in the World is my Shoe?
0425 Marketing Applications
TOPIC OR UNIT OF STUDY
Marketing Economics
CONTENT STANDARD(S) AND OBJECTIVE(S)
 Explain the nature of global trade. (Activity 1)
 Describe the determinates of exchange rates and their effects.
(Activity 2)
 Discuss the impact of culture and social issues on global trade.
(Activity 2)
INTRODUCTION
In today’s global economy it is important to understand the nature of doing business today. You need to
know who your client is, and what type of currency they use. These purchasers have different beliefs,
cultures, and interests. It is important to keep these concepts in mind when designing your product and
marketing it. In this project you will be given the opportunity to create a product, then review and
revise based on new information.
ESSENTIAL QUESTION
How do company’s do business with the global market, with respect to cultural and social issues, as well
as volatile exchange rates?
INTEGRATION OF ACADEMICS, TECHNOLOGY, ENTREPRENEURSHIP
To complete this project, students will use basic terms and concepts, to complete the following
academic, technology, and entrepreneurship activities:
1. Academic activities – concept analysis, and critical thinking and writing skills;
2. Technology activities –use of MOS Word;
3. Entrepreneurship activities – creation of a product will mimic a true entrepreneur as students
create and revise their products.
STUDENT INVOLVEMENT IN PLANNING PROCESS
Students will take ownership of creating a product, then making their own revision decisions. Although
work is individual, students will help classmates stay on task through group discussions.
TASK(S)
 Identify terms and concepts through discussion and Activity 1a worksheet
45 min
 Illustrate product creation through Activity 1b worksheet
45 min
 Revise your product through Activity 1c reading, product revision and poster
210 min
 Demonstrate understanding of exchange rates with Activity 2 reading & worksheet
60 min
RESOURCES
http://www1.umn.edu/humanrts/edumat/sustecon/activities/8-2.htm
TECHNOLOGY USE
Computers used for word processing and research
EVALUATION
# 1 – Activity 1a – Discussion and Worksheet
n/a
#2 – Activity 1b – Worksheet and product creation
n/a
#3 – Activity 1c – Revising project reading, product revision and poster
50 pts
#4 – Activity 2 – Exchange rates reading & worksheet exercise
35 pts
Total points for these activities
85 pts
Authentic assessments will be evaluated with the rubrics that are located on each activity
TIMELINE
Block scheduling-4 days, periods-8 days. This includes time for lecture, textbook readings, and
discussions. Depending on student’s ability, extended time may be needed on some projects.
Day 1 Discussion Activity 1a Worksheet and
45 min
Activity 1b worksheet and product creation
45 min
Day 2 Activity 1c reading, product revision and poster
90 min
Day 3 Activity 1c continue product revision and poster
90 min
Day 4
Activity 1c finish poster on revision project
30 min
Activity 2 reading & worksheet on exchange rates
60 min
CONCLUSION
At the conclusion of this project students will have a good understanding of the global environment and
how it affects business and marketing decisions.
The Global Shoe
Look at your clothing labels. Help each other out. Write down where some of your clothes are made:.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
This will be added to a class list.
Why do you think your clothes are made in these countries and not the US?
How do you feel about your clothes being made in the countries and not the US?
______________________________________________________________________________
Discuss why we trade. (specialization, exports and imports). List 4 reasons
1.______________________________________________
2.______________________________________________
3.______________________________________________
4.______________________________________________
The Global Athletic Shoe
Directions: Try to create the story of how a typical Nike athletic shoe is made. First, determine
how the different phases of production and materials fit together. Create a diagram. Use 1 color
pen only. Then based on any knowledge you may have of the different places listed, try to
determine which phase of production corresponds to that location. You may use each location up
to 2 times. After completing this process, discuss with your group or partner what you feel are
the positives and negatives of producing shoes this way.
Parts of Final Product
Upper
Midsole (foam)
Outer sole
Tissue Paper
Box
Input Materials/Process
petroleum (oil) (2 times)
natural gas
coal
cowhide
tanning chemicals
benzene (made from coal; when mixed with oil makes synthetic rubber)
vinyl acetate (made from natural gas and CO)
ethylene (made from oil)
EVA (ethylene vinyl acetate: foam substance)
polyurethane bag filled with a gas ("air")
100% recycled, unbleached corrugated cardboard
paper pulp
super container ship
assembly of shoes
design of shoes
control of operations
Places
Oregon,
Texas,
Los Angeles
Taiwan,
S. Korea
Tangerang,
Indonesia,
Sumatran rainforest,
Indonesia
GOOD LUCK!!
(Activity based on "Shoes" from Stuff: The Secret Lives of Everyday Things by Alan Durning
and John Ryan, 1997)
Revised Plan
After you and your partner have completed your story of how a NIKE show is made, read the story. Go
back with a different color pen and create a new production line according to the story.
NEWSPAPER
I put down my coffee to find the morning paper somewhere in my front yard. It was in the bushes
again. I pulled the paper out of the plastic bag and the rubber band it came in.
The paper was a half-pound (220 grams) of newsprint covered with two grams of petroleum- and
soybean-based inks. Two-thirds of the pages, and two-thirds of the ink, were devoted to advertising. I
mostly read the comics. Two-thirds of American adults read a newspaper on an average weekday; threefourths do on a Sunday.
Trees The paper was half recycled and half made from trees. Most of the trees (those that provided
45 percent of the newsprint) were 150-year-old Engelmann spruce and subalpine fir trees in the Cariboo
Mountains of central British Columbia. Canada is the world’s leading newsprint producer; B.C. alone
produces 5 percent of the world total. Loggers, earning Can$20 (US$15) an hour and wielding Husqvarna
chainsaws, felled the trees from a steep slope above Penfold Creek. They were lucky to have jobs: many
of their friends were laid off in the 1980s as machines did more of the cutting and processing of trees.
From 1980 to 1990, the number of timber industry jobs in B.C. fell by a third even as the volume of wood
cut in the province increased 16 percent.
Except for a 160-foot-wide strip of selective logging along the creek, loggers and their machines
removed every tree for 100 acres. Clear-cutting of wild lands accounts for 90 percent of logging in British
Columbia. Some clear-cuts in the Cariboo Mountains are so large they can be seen from space. (I took a
rafting trip in B.C. last summer and heard a joke about the local definition of selective logging: select a
mountain, then log it!)
Logging Roads After the branches and treetops were sawed off, a choker-setter in a hard hat
attached cables to the trees, and a diesel-powered yarder dragged them up the hillside to a muddy
landing area, leaving a “skid trail” on the slope. Mud and rocks tumbled toward the creek. The logs were
loaded on an 18-wheel flatbed truck. The driver found his way through a dozen gears and steered his load
over dirt logging roads that twisted and turned through the mountains like so much spaghetti. He made
his way to a sawmill in Quesnel, a town beside the Fraser River. The Fraser is the world’s greatest
producer of salmon, but logging, road building, and other disturbance of the watershed have contributed
to an 80 percent decline in salmon over the past century.
With the next rain, more mud and rocks spilled from the road and the skid trails into Penfold
Creek, smothering sockeye salmon eggs in the gravel bed of the stream. British Columbia has roughly
150,000 miles of logging roads – enough to circle the planet six times. The B.c. Ministry of Forests plans to
remove 3,000 miles annually to reduce the damage to fish and wildlife. It also plans to build twice as
many miles of new logging roads each year.
Pulp The Quesnel mill sawed the logs. About half of each log was converted into lumber; the rest
became chips and sawdust. These residues were trucked to a nearby pulp mill, where they were mixed
with Fraser River water and cooked to make a pulp of weak, yellow fibers. Hydroelectricity from a dam on
the Peace River (which runs from northeastern B.C. toward the Arctic Ocean) powered both mills. This
“mechanical pulping” managed to convert 95 percent of the wood residues into pulp. It made a low-grade
pulp that would quickly yellow with age or exposure to sunlight. The pulp was lightly bleached with
hydrogen peroxide.
Five percent of the newsprint in my morning paper came from another forest and was
processed in a “Kraft” pulp mill in Crofton, on British Columbia’s Vancouver Island. Newsprint makers add
Kraft pulp to mechanical pulp to make their product stronger. (Kraft is German for strength; Kraft pulping
yields longer and stronger fibers than other pulping processes. The Kraft pulp began as 300-year-ol
western red cedar and hemlock trees. They were logged in a temperate rain forest in the Paradise
watershed on the mainland coast of British Columbia. (I’ve always wanted to see this coast by taking the
ferry up the Inside Passage to Alaska. I guess I should go soon, before much more of it is clear-cut.)
Trucks carried the logs over a muddy logging road to the shore. A tugboat hauled them to a sawmill
on Vancouver Island, and the resulting chips and dust were trucked to Crofton. Then the chips cooked in a
soup of caustic soda and sodium sulfide. These chemicals are not especially toxic, but they combine to
give Crofton the rotten-egg aroma of a mill town.
After nearly 12 hours in a giant cooker, the tightly bound wood fibers had separated from one
another. The pulp was then washed to remove undigested knots of wood and chemicals (for reuse). The
mill converted about 50 percent of the incoming wood to pulp; the rest it burned for energy.
Bleaching the Kraft pulp – brown like a paper grocery bag – was then bleached with chlorine
dioxide. A tiny fraction of the chlorine reacted with organic chemicals in the pulp to form various dioxins
and furans, among them TCDD and TCDF – two of the most carcinogenic substances known. Beyond
causing cancer, dioxins can also suppress the immune system and produce severe birth defects and
reproductive disorders in humans and other animals. Pulp mills in B.C. have dramatically reduced their
toxic emissions since the late 1980s; average discharges of TCDD dropped by 85 percent from 1990 to
1993.
Your Choices Matter
European consumers’ demands for totally chlorine-free (TCF) paper, along with increasingly strict
regulations in Canada on mill emissions, have led many mills to switch partially to making CF pulp.
Canada’s export-oriented paper industry is extremely sensitive to shifting tastes in foreign markets. Some
mills simultaneously produce chlorine-free paper for the European market and chlorine-bleached paper
for the U.S. market.
Similarly, California’s legislation requiring newsprint to have at least 35 percent recycled content by
1996 and 50 percent by the 2000 has sent papers mills in the U.S. and Canada scurrying to boost their
recycling capacity.
Pulping the virgin fibers in Crofton and Quesnel required nearly a third of a kilowatt-hour of energy,
enough to power the refrigerator in my kitchen for two hours. Some of the energy came from wood waste
burned at the mills. Burning wood generated heat and smoke and released carbon dioxide, the principal
climate-altering greenhouse gas. The seedlings planted in the Paradise clear-cut will absorb carbon
dioxide as they grow. But these seedlings are to be logged again in 60 years – long before they can
recapture the CO2 emitted in turning 300-year-old trees into newsprint. Logging of coastal rain forests is
responsible for one-fourth of British Columbia’s greenhouse gas emission.
Overall, virgin newsprint (which is mostly mechanical pulp) has lower environmental impacts than
most virgin paper: making mechanical pulp requires less energy and water and fewer chemical additives
than making draft pulp. Mechanical pulp is not chlorine bleached. It is also easier to de-ink and recycle
than other papers. That is why curbside recycling programs, including the one in my neighborhood, collect
newsprint separately.
Recycling from the mills in Quesnel and Crofton, the pulp was trucked to a paper mill in Spokane,
Washington. Canada provides more than half the virgin pulp in U.S. newsprint. The paper mill combined
the virgin pulp with recycled pulp – 80 percent old newspapers and 20 percent old magazine. A truck had
collected the papers curbside at homes in Spokane; the magazines were unsold copies returned from
newsstands. Magazine publishers routinely print far more magazines than they sell; most go to landfills.
To make the recycled pulp, blades churned old papers and magazines together in a tank of warm
water and detergent. Clay fillers from the magazine paper and the detergent combined to clean the ink
off the paper. The ink adhered to air bubbles nt he tank and rose to the surface, where machinery
skimmed it off like cream. Most of the waste paper turned back to pulp, but 15 percent of it (including
both fibers and ink) became sludge, which truckers hauled to a landfill. Because the recycling process
weakens paper fibers, newsprint can be recycled only three or four times; it is then re placed with virgin
fibers.
Printing The mill in Spokane formed the paper and spun it into massive rolls, each four and a half
feet wide and four feet across and weighing about a ton. An 18-wheeler hauled the rolls across the
Cascades to a printing plant near downtown Seattle. High-speed pressed printed the day’s edition with
black and color inks. The black ink was a mixture of petroleum-based resins and oils from California and a
small amount of carbon black made from oil drilled in the Gulf of Mexico. The colored inks were about
one-third soybean oil from Illinois, with small amounts of petrochemical pigments added. The inks were
produced in Kent and Tukwila, industrial suburbs south of Seattle.
The newspaper came to my neighborhood in a gasoline-fueled station wagon. The driver lobbed
the paper toward my front door but hit the bushes instead. The paper was bound in a rubber band (made
in Hong Kong fro petroleum) and wrapped in a clear sheath of low-density polyethylene plastic from New
Jersey. I saved the rubber band threw out the bag.
I scanned the front section, read “Dilbert” and a few other comics, and dropped the paper in my
recycling bin. It was one of 38 million newspapers recycled daily in the United States; 22 million others are
thrown away each day. Later, a diesel recycling truck hauled the paper to a warehouse. Depending on
fluctuating market prices, my paper would either become newsprint again, go into cardboard, or be
exported to Asia.
Create a poster showing the global production of an athletic shoe.
Points Content
Students created a line of production for a Nike Athletic show based on
5
prior knowledge.
Students created a second line of production after reading the story
5
10
10
5
3
2
5
5
Points Earned
Students created one paragraph based on the questions and answers from
the introduction of this lesson. (To be placed on the lower left hand corner
of the poster.)
Have students write a paragraph on the pros and cons of the practice of this
global production of Nike Athletic shoes. (To be placed on the lower right
hand corner of the poster)
Poster is creative and neat
Title of poster is clearly stated
Summary of this project is placed in the lower center portion of the poster
Students will write a paragraph about how this production impacts the
countries that produce parts of the shoe. (attach to back of poster)
Students will write a paragraph about how this production affects the
US.(also attached to back of poster)
Total Points
____ of 50 pts
Exchange Rates: The Falling Dollar or the rising Pound?
http://www.bized.co.uk/educators/16-19/economics/international/activity/trade.htm
Since 2003, the value of the UK currency (£ sterling) has risen quite sharply against the United States
dollar (US$). For those involved with international trade, this can have a significant impact on their
activities and indeed their profitability. If, for example, a UK company conducts a large amount of its
business in the US, its profit levels will be hit fairly badly after it converts its dollar revenues back into
pounds.
This happened with the publishing and exams based company Pearson. Pearson owns the Financial
Times, Penguin publishers and Dorling Kindersley as well as having bought into the Edexcel examination
board. Pearson generates some 60% of its revenues from publishing, a high proportion of which is
carried out in the US.
For companies trading in many countries, the issue of exchange rates is always a major issue in
considering its planning and its performance. Small movements in exchange rates can have significant
effects on costs and potential revenues and this can be complicated by the contradictory effects of
exchange rate movements in different countries. For example, a depreciation of the pound against the
euro may well benefit a business if it sells products to the eurozone; a fall in the exchange rate with
China, however, may be damaging if it buys its raw materials or semi-finished and finished goods from
that country to then sell in Europe. The overall effect will depend on the proportion of its costs and
revenues linked to each country it trades with. If trading with a dozen countries, it is easy to see how
complex the picture can become!
The chart below shows the exchange rate between the UK pound, the dollar and the euro. Under the
chart there is a range of questions guiding you in developing your thinking and understanding about
various aspects of international trade, the balance of payments and exchange rates.
The exchange rate between the UK pound and the dollar
Source of data: Bank of England
(http://213.225.136.206/mfsd/iadb/Index.asp?first=yes&SectionRequired=I&H...)
1. Describe the trends in the movement of the £ against the $ and the € since January 2003. (1 pt)
______________________________________________________________________________
______________________________________________________________________________
2. Using your knowledge of economics, explain TWO factors that may have caused the trends you
have identified. (1 pt)
a. _______________________________________________________________________
b. _______________________________________________________________________
3. Explain the impact on both importers and exporters of the trends in the sterling exchange
rate.(2 pts)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
4. Given the trends identified, what would you predict would be happening to the UK current
account of the balance of payments? (2 pts)
______________________________________________________________________________
______________________________________________________________________________
5. Examine the impact of these trends on a business if it sells 45% of its output in the United
States, 35% in Europe and the remainder in the domestic market. Assume its annual turnover is
£5 million. (5 pts)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
6. Examine the impact of these trends on a business with a turnover of £10 million buying 60% of
its raw materials from the US and selling 30% to the EU and the remainder in the domestic
market.(5 pts)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
7. Distinguish between the volume of trade and the value of payments and receipts involved in
trade. (5 pts)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
8. Explain what you would expect to happen to the balance of payments given the following:
a. The value of sterling appreciates against all other currencies. (2 pts)
________________________________________________________________________
________________________________________________________________________
b. The value of sterling depreciates against all other currencies. (2 pts)
________________________________________________________________________
________________________________________________________________________
9. The fall in the value of the dollar is causing concerns in the US that inflation may begin to
accelerate. Explain why this might be a concern. (2 pts)
______________________________________________________________________________
______________________________________________________________________________
10. Look at the following article: 'How Far Will the Dollar Fall?' by Richard W. Rahn.
(http://www.cato.org/dailys/01-02-04.html)
a. Explain how the fall in the dollar might help to reduce the US trade deficit.(4 pts)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________________
b. Assess Dr Rahn's argument that taxation and regulation are the principle causes of the
potential for the limits to growth in the world economy. (4 pts)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Total Points _____________/ 35