Ch.19-- The Global Marketplace

Question 1

What is the key difference between the International Monetary Fund (IMF) and the World Bank?

Answer 1

IMF lends $ to pay debt

World bank lends $ for development

Question 2

What was the General Agreement on Tariffs and Trade (GATT) and what was its
purpose?

Answer 2

Designed to promote world trade
Reduces tariffs and other international trade barriers
aka promote free trade through lower tarriffs

Question 3

How did the GATT operate to achieve its purpose?

Answer 3

Multilateral negotiations

Question 4

What is the successor organization to the GATT?

Answer 4

World Trade Organization

Question 5

What is the Gross Domestic Product (GDP) of a country and how does it differ from its Gross National Income (GNI)?

Answer 5

GDP is domestic

GNI is global

Question 6

What is Purchasing Power Parity (PPP)?

Answer 6

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

Question 7

What is the “infrastructure” of a country and what are the key elements that marketers are especially concerned about it?

Answer 7

• Networks that connect the country

* to mkt: roads, communication networks, mkt networks (channel of distribution networks)

Question 8

What is a tariff?

Answer 8

taxes on certain imported products designed to raise revenue or to protect domestic firms

Question 9

What constitutes “dumping” in international trade?

Answer 9

When a company sells a product in another country @ a price below its cost

Question 10

What is a quota?

Answer 10

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.)

Question 11

What is a boycott? How does it differ from an embargo?

Answer 11

Boycott– refusal to buy something

Embargo– Refusal to sell something

Question 12

What are Geert Hofstede’s 5 cultural dimensions?

Answer 12

• Individualism/collectivism Index
• Power Distance index
• Uncertainty avoidance index
• Masculinity/femininity index
  Time orientation index

Question 13

What method of entering a foreign market is the least risky? The most risky?

Answer 13

Least- exporting

Most- direct investment

Question 14

What method of entering a foreign market gives the marketer the most control over his/her marketing strategy? The least control?

Answer 14

Most- direct investment

Least- exporting

Question 15

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.

Answer 15

INDIVIDUALISM/COLLECTIVISM INDEX

Question 16

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.

Answer 16

POWER DISTANCE INDEX

Question 17

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.

Answer 17

UNCERTAINTY AVOIDANCE INDEX

Question 18

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.

Answer 18

MASCULINITY/FEMININITY INDEX

Question 19

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

Answer 19

TIME ORIENTATION INDEX