Chapter 16: Global Marketing Flashcards
Globalization
refers to the increased flow of goods, services, people, technology, capital, information, and idea around the world
Assessing Global Markets - PEST
- political environment
Trade Sanction
penalties or restrictions imposed by one country over another country for importing and exporting goods, services, and investments
Tariffs (duty) -
a tax levied on a good imported into a country - intended to make imported goods more expensive and thus less competitive with domestic products, which in turn protects domestic industries from foreign competition
Dumping
the practice of selling a good in a foreign market at a price that is lower than its domestic price or below its cost
Quota
- designates the maximum quantity of a product that may be brought into a country during a specific time period
Boycott
- pertains to a group’s refusal to deal commercially with an organization to protest against its politics
Exchange control -
refers to the regulation of a country’s currency exchange rate, the measure of how much one currency is worth in relation to another
Exchange rate
the measure of how much ones currency is worth in relation to another
Trade agreement -
- an intergovernmental agreement designed to manage and promote trade activities for a specific region, and a trading bloc
Trading bloc
consists of those countries that have signed the particular trade agreement
Political risk analysis
assessing the level of political, socio-economic, and security risks of doing business with a country
- Involves weighing the likelihood for certain events (change in government, violence, and the imposition of restrictive trade policies) taking place over a specified period of time
Evaluating the General Economic Environment
- trade deficit
the country imports more goods than it exports
Trade surplus -
results when a country exports more goods than it imports - signals a greater opportunity to export products to more markets
- Common ways to gauge the size and market potential of an economy - use standardized measures of output
Gross domestic product (GDP) -
- defined as the market value of the goods and services produced by a country in a year
Purchasing power parity (PPP)
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, expressed in the same currency
Human development index
- a composite measure of three indicators of the quality of life in different countries: life expectancy at birth, educational attainment, and whether the average incomes, according to PPP estimates, are sufficient to meet the basic needs of life in that country
Evaluating Market Size and Population Growth Rate
Countries with the highest purchasing power today may become less attractive in the future for many products and services because of stagnated growth
Evaluating Real Income -
Firms can make adjustments to an existing product or change the price to meet the unique needs of a particular country’s market - common for low priced consumer goods
Analyzing Socio-cultural Factors
Understanding another country’s culture is crucial to the success of any global marketing initiative
Culture
- the set of values, guiding beliefs, understandings, and doing things shared by members of a society
- Exists on 2 levels
Visible artifacts - behaviour, dress, symbols, physical settings, ceremonies
Underlying values - thought processes, beliefs, assumptions
To avoid cultural issues -
an important cultural classification scheme is Hofstede’s cultural dimensions concept
Power distance
willingness to accept social inequality as natural
Uncertainty avoidance
the extent to which the society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life
Individualism
- perceived obligation to and dependence on groups
Masculinity
the extent to which dominant values are male oriented. A lower masculinity ranking indicates that men and women are treated equally in all aspects of society; a higher masculinity ranking suggests that men dominate in positions of power
Time orientation
short versus long term orientation. A country that tends to have long-term orientation values long-term commitments and is willing to accept a longer time horizon
Indulgence
the extent to which society allows for the gratification of fun and enjoyment needs or else suppresses and regulates such pursuits
Communication
non-verbal and verbal cues
Analyzing Technology and Infrastructure Capabilities
Infrastructure - defined as basic facilities, services, and installations needed for a community or society to function, such as transportation and communication systems, water, and power lines, and public institutions such as schools, post offices, and prisons
- Four key elements for a country’s infrastructure - transportation, distribution channels, communications, and commerce
Target Market: Segmentation, Targeting, and Positioning
STP is more complicated globally, firms have more difficulty understanding cultural nuances, subcultures within each country must also be considered, consumers often view products and their role as consumers differently in different countries
Global Marketing Mix
- Global Product or Service Strategies
sell the same product or service in both the home country market and the host country, sell a product or service similar to that sold in the home country but include minor adaptations, sell totally new products or services
Glocalization
when firms standardize products globally and change promotional campaigns geared to local markets
Global Pricing Strategies
many countries have rules governing the competitive marketplace, including those that affect pricing. Competitive factors influence global pricing in the same way they do home country pricing, but because a firm’s product or services may not have the same positioning in the global marketplace as they do in its home country, market prices must be adjusted to reflect the local pricing structure
Global distribution strategies
- global distribution networks form complex value chains that involve intermediaries, exporters, importers, and different transportation systems - these additional intermediaries typically add cost and ultimately increase the final selling price of a product
Global Communication Strategies -
major challenge in developing a global communication strategy is identifying the elements that need to be adapted to be effective in the global marketplace
- Difference in language, customs, and culture also complicate marketers ability to communicate with customers in various countries
Ethical Marketing in Global Marketing
Environmental concerns
The excessive use of natural resources and energy, refuse from manufacturing processes, excess trash created by consumer goods packages, and hard-to-dispose-of products such as tires, cellphones, and computer monitors
Global Labour issues
Concerns about working conditions and wage paid to factory workers in developing countries have become increasingly prominent
- High prices offer no guarantee of a supply chain free of sweatshops
Impact on Host Country Culture
Cultural imperialism - or the belief that one’s own culture is superior to that of other nations, can take the form of an active, formal policy, or more subtle general attitude
