Ch. 8 Global Marketing Flashcards
Trade Deficit
Country imports more than it exports
Globalization
Goods, services, capital, people, info, and ideas flow across national borders
Trade Surplus
Higher level of exports than imports
Gross Domestic Product (GDP)
Defines market value of goods and services produced by a country in a year
Gross National Product (GNP)
GDP + Net Income earned from investments abroad
Purchasing Power Parity (PPP)
Theory states if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, if expressed in same currency
Evaluating Real Income
Firms make adjustments to existing product or change price to meet unique needs of a particular country market
Infrastructure
Basic facilities, services, and installations needed for a community or society to function
EX:
Transportation and communications systems - water and power lines - public institutions, like schools, post offices, prisons
Tariffs (or duty)
Tax levied on a good imported into a country
Quota
Maximum quantity a product that may be brought into a country during specific time period
Exchange Control
Regulation of a country’s currency exchange rate
Exchange Rate
Measure how much one currency is worth in relation to another
Trade Agreements
Intergovernmental agreement to manage and promote trade activities for specific region
Trading Bloc
Countries that have signed particular trade agreement
Exporting
Producing goods in one country and selling them in another
Franchising
Contractural agreement between a firm, franchiser, and another firm or individual, the franchisee
Strategic Alliances
Collaborative relationships between independent firms, the partnering firms don’t create an equity partnership (they don’t invest in one another)
Joint Venture
Formed when firm entering a market pools its resources w/ a local firm
Direct Investment
Requires firm to maintain 100% ownership if it’s plants, operation facilities, and offices in foreign country, through formation of wholly owned subsidiaries
Glocalization
Firms standardize their products globally but use different promotional campaigns to sell them
Reverse Innovation
Global expansion can move in various directions
EX:
Companies initially develop products for a niche or undeveloped markets, and then expand them into their original or home markets
Global Pricing Strategies
Determine selling price in global marketplace
Global Distribution Startegies
Form complex value chains that involve middlemen, exporters, importers, and different transportation systems
Global Communication Startegies
Major challenge is identifying elements that need to be adapted to be effective in global marketplace
