Chapter 13: Global Marketing

Question 1

Diamond of National Advantage

Answer 1

Developed by Michael Porter, an explanation of a nation’s competitive advantage and why some companies and industries become global business leaders.

Question 2

Direct Ownership

Answer 2

An organization’s strategy for entering and growing in global markets either through the establishment of a wholly owned subsidiary or through acquisition where it owns 100 percent of the stock.

Question 3

Exporting

Answer 3

A strategy for entering global markets where a firm produces the product outside the final destination and the ships its there for sale. It is the easiest and most common approach to entering a foreign market.

Question 4

Franchising

Answer 4

A market entry strategy that is similar to licensing but usually involves longer-term commitments. The franchisor sells limited rights to use its brand name in return for a lump sum and share of the franchisee’s future profits. It is more commonly employed by service organizations than manufacturers.

Question 5

Global Company

Answer 5

A company that views the world as one market and employs its resources against the competition in an integrated fashion. It emphasizes cultural similarities across countries and universal consumer needs and wants rather than differences. It standardizes marketing activities where there are cultural similarities and adapts them when the cultures are different.

Question 6

Joint Venture

Answer 6

An organization’s entry into a foreign market by sharing management with one or more collaborating foreign firms. Decision making may be shared equally or controlled by one party.

Question 7

Licensing

Answer 7

Organization’s granting of patent rights, trademark rights, and the right to use technological processes to foreign markets. By licensing, an organization does not have to bear the costs and risks associated with actually locating in a foreign market.

Question 8

Multidomestic Company

Answer 8

A company that pursues different strategies in each of its foreign markets. It could have as many different product variations, brand names, and advertising campaigns as countries in which it operates.

Question 9

Strategic Alliance

Answer 9

Partnerships where two or more firms invest in each other to gain competitive advantages on a worldwide versus local level. They are usually of a much longer-term nature than a joint venture.