Chapter 15 - The Global Marketplace

Question 1

Tariffs or Duties

Answer 1

Taxes on certain imported products designed to raise revenue or protect domestic firms; used to force favorable trade behaviors from other nations

Question 2

Quotas

Answer 2

Limits on the amount of foreign imports that they will accept in certain product categories; to conserve on foreign exchange and protect local industry and employment

Question 3

Exchange Controls

Answer 3

Limit the amount of foreign exchange and the exchange rate against other currencies

Question 4

World Trade Organization (WTO)

Answer 4

Established by the General Agreement on Tariffs and Trade (GATT) in 1995; promotes world trade by reducing tariffs and other international trade barriers; negotiates to reassess trade barriers and establish new rules for international trade; imposes international trade sanctions and mediates global trade disputes

Question 5

Economic Community

Answer 5

Group of nations organized to work toward common goals in the regulation of international trade; ie EU, NAFTA, CAFTA-DR, UNASUR

Question 6

Subsistence Economy

Answer 6

Vast majority of people engage in simple agriculture; they consume most of their output and and barter the rest for simple goods and sevices

Question 7

Raw Material Exporting Economy

Answer 7

Rich in one or more natural resources but poor in other ways; much of their revenue comes from exporting these resources

Question 8

Emerging Economy

Answer 8

Fast growth in manufacturing results in rapid overall economic growth. As manufacturing increases, the country needs more imports of raw materials and fewer imports of finished products

Question 9

Industrial Economy

Answer 9

Major exporters of manufactured goods, services, and investment funds. They trade goods among themselves and export them to other types of economies for raw materials and semifinished goods

Question 10

Joint Venturing

Answer 10

Entering foreign markets by joining with foreign companies to produce or market a product or service

Question 11

Licensing

Answer 11

Entering foreign markets through developing an agreement with a licensee in the foreign market

Question 12

Contract Manufacturing

Answer 12

When a company contracts with manufacturers in a foreign market to produce its product or provide its service

Question 13

Management Contracting

Answer 13

A domestic firm that supplies know-how to a foreign company that supplies the capital

Question 14

Joint Ownership

Answer 14

A cooperative venture in which a company creates a local business with investors in a foreign market, who share ownership and control

Question 15

Direct Investment

Answer 15

Entering a foreign market by developing foreign-based assembly or manufacturing facilities

Question 16

Standardized Global Marketing

Answer 16

Using the same marketing strategy and mix in all of the company’s international markets

Question 17

Adapted Global Marketing

Answer 17

Adjusting the marketing strategy and mix elements to each international target market; creates more costs; produces a larger market share and return

Question 18

Straight Extension

Answer 18

Marketing a product in a foreign market without making any changes to the product

Question 19

Product Adaptation

Answer 19

Adapting a product to meet local conditions or wants in foreign markets

Question 20

Product Invention

Answer 20

Creating something new to meet the needs of consumers in a given country

Question 21

Communication Adaptation

Answer 21

A global communication strategy of fully adapting advertising messages to local markets