Chapter 1 Scope and Challenges of International Marketing Flashcards
Why was Global Commerce booming during the 1990s?
Economic boom in North America
Opening of post-soviet countries
End of Cold War
Explain the relation between global peace and international business?
World events directly affect business in many ways:
- Company scandals and layoffs
- Natural disasters
- War and political tension can affect and business for the better and for worse
Global commerce thrives better in times of peace, and it can also contribute to peace
What are the 4 trends affecting global business?
- Growth of WTO and open trade agreements
- Developing countries moving toward free trade
- Internet and communication
- A mandate to manage the global environment in the future
What is the FDI in the US?
$4.6 billion
What is the current trend of internationalization of US businesses
more and more businesses are becoming foreign owned (7eleven, BMW, Wall Street Journal)
Other foreign business are entering the US market through exports and buying manufacturing plants in the US
What two political events affected global trade in 2016?
Brexit and election of Trump - marked a political and economic turn towards nationalism
Which countries are the main investors in the US?
UK, Japan, Netherlands, Canada and France (in that order)
What is a new trend for multinationals in the US
US multinationals have destroyed the world since WW2, but the development of new markets has led to new multinational competing with the American ones on US soil
ex: Mexican store Gigantes which is present in Cali
Why has Gigantes and Bimbo entered into the American market?
Mainly due to NAFTA (now USMCA)
What are the US companies with the most revenue outside of the US (as a result of foreign trade)
Amazon
Apple
Exxon
Intel
Why has focus shifted from domestic to international markets?
What is the definition of international marketing?
International marketing is the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.
What makes international marketing different from domestic marketing?
Unfamiliar problems and the variety of strategies necessary to cope with different levels of uncertainty encountered in foreign markets
What is the difference between controllable elements and uncontrollable elements in marketing?
controllable are the things that the brand have control over: price, design, product, ect.
uncontrollable: political climate, economic climate, government restrictions, competition, ect.
both can be domestic and international
What is the key to successful international marketing?
adaptation to environmental differences from one market to another
What are the main obstacles to successful international marketing?
The primary obstacles to success in international marketing are a person’s self-reference criterion (SRC) and an associated ethnocentrism
What is self-reference criterion (SRC)?
unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions
self-reference criterion can prevent you from being aware of cultural differences or
from recognizing the importance of those differences.
What is ethnocentrism?
the notion that people in one’s own company, culture, or country know best how to do things.
Ethnocentrism was particularly a problem for American managers at the beginning of the 21st century because of America’s dominance in the world economy during the late 1990s
In international marketing it is important to have global awareness, what is it any why does it matter?
Global awareness is the knowledge of the world markets, political and economic trends and well as social and cultural understanding.
To be globally aware is to have (1) tolerance of and a willingness to learn about cultural differences and (2) knowledge of cultures, history, world market potential, and global economic, social, and political trends.
Closely akin to global awareness is what others have called “cultural intelligence” or CQ.
Main characteristics of companies that
internationalize quickly:
- high-tech and marketing-based resources
- smaller home markets and large production capacities
- managers who are well-connected internationally
What are the aspects of domestic markets?
Political and legal forces
economic environment
competition
technology
structure of distribution
infrastructure
culture
What are the stages of international marketing involvement?
1: no direct foreign marketing
2. infrequent foreign marketing
3. regular foreign marketing
4. multidomestic foreign marketing
5. global marketing
