Ch.19-- The Global Marketplace Flashcards
What is the key difference between the International Monetary Fund (IMF) and the World Bank?
IMF lends $ to pay debt
World bank lends $ for development
What was the General Agreement on Tariffs and Trade (GATT) and what was its
purpose?
Designed to promote world trade
Reduces tariffs and other international trade barriers
aka promote free trade through lower tarriffs
How did the GATT operate to achieve its purpose?
Multilateral negotiations
What is the successor organization to the GATT?
World Trade Organization
What is the Gross Domestic Product (GDP) of a country and how does it differ from its Gross National Income (GNI)?
GDP is domestic
GNI is global
What is Purchasing Power Parity (PPP)?
An economic theory that states that if the exchange rates of 2 countries are in equilibrium(=), a product purchased in one will cost the same in the other
What is the “infrastructure” of a country and what are the key elements that marketers are especially concerned about it?
- Networks that connect the country
* to mkt: roads, communication networks, mkt networks (channel of distribution networks)
What is a tariff?
taxes on certain imported products designed to raise revenue or to protect domestic firms
What constitutes “dumping” in international trade?
When a company sells a product in another country @ a price below its cost
What is a quota?
limits on the amount of foreign imports a country will accept in certain product categories
( to conserve on foreign exchange and protect domestic industry and employment.)
What is a boycott? How does it differ from an embargo?
Boycott– refusal to buy something
Embargo– Refusal to sell something
What are Geert Hofstede’s 5 cultural dimensions?
- Individualism/collectivism Index
- Power Distance index
- Uncertainty avoidance index
- Masculinity/femininity index
Time orientation index
What method of entering a foreign market is the least risky? The most risky?
Least- exporting
Most- direct investment
What method of entering a foreign market gives the marketer the most control over his/her marketing strategy? The least control?
Most- direct investment
Least- exporting
Focuses on self-orientation, initiative. Cultures high in this index tend to reward individual initiative, whereas cultures low in this index place more importance in group loyalty, group action.
INDIVIDUALISM/COLLECTIVISM INDEX
focuses on authority orientation, hierarchy. Cultures high in this index tend to be hierarchical, whereas cultures low in this index tend to value equality more.
POWER DISTANCE INDEX
focuses on risk orientation, rules. Cultures high in this index depend more on rigid rules and regulations, distrust new ideas or behavior, and are more traditional, in order to avoid risk. Cultures low in this index are more willing to take risks in return for higher rewards.
UNCERTAINTY AVOIDANCE INDEX
focuses on male achievement orientation, sex roles. Cultures high in this index are more assertive, emphasize more making money, not caring for others, more rigid male/female roles. Cultures low in this index emphasize equality between the sexes, and interdependence.
MASCULINITY/FEMININITY INDEX
focuses on long-term versus short-term orientation. Cultures high in this index make plans for the long-term, whereas cultures low in this index plan for much shorter time periods
TIME ORIENTATION INDEX
