Chapter 16: Global Marketing

Question 1

Globalization

Answer 1

refers to the increased flow of goods, services, people, technology, capital, information, and idea around the world

Question 2

Assessing Global Markets - PEST
- political environment
Trade Sanction

Answer 2

penalties or restrictions imposed by one country over another country for importing and exporting goods, services, and investments

Question 3

Tariffs (duty) -

Answer 3

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

Question 4

Dumping

Answer 4

the practice of selling a good in a foreign market at a price that is lower than its domestic price or below its cost

Question 5

Quota

Answer 5

• designates the maximum quantity of a product that may be brought into a country during a specific time period

Question 6

Boycott

Answer 6

• pertains to a group’s refusal to deal commercially with an organization to protest against its politics

Question 7

Exchange control -

Answer 7

refers to the regulation of a country’s currency exchange rate, the measure of how much one currency is worth in relation to another

Question 8

Exchange rate

Answer 8

the measure of how much ones currency is worth in relation to another

Question 9

Trade agreement -

Answer 9

• an intergovernmental agreement designed to manage and promote trade activities for a specific region, and a trading bloc

Question 10

Trading bloc

Answer 10

consists of those countries that have signed the particular trade agreement

Question 11

Political risk analysis

Answer 11

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

Question 12

Evaluating the General Economic Environment
- trade deficit

Answer 12

the country imports more goods than it exports

Question 13

Trade surplus -

Answer 13

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

Question 14

Gross domestic product (GDP) -

Answer 14

• defined as the market value of the goods and services produced by a country in a year

Question 15

Purchasing power parity (PPP)

Answer 15

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

Question 16

Human development index

Answer 16

• 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

Question 17

Evaluating Market Size and Population Growth Rate

Answer 17

Countries with the highest purchasing power today may become less attractive in the future for many products and services because of stagnated growth

Question 18

Evaluating Real Income -

Answer 18

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

Question 19

Analyzing Socio-cultural Factors

Answer 19

Understanding another country’s culture is crucial to the success of any global marketing initiative

Question 20

Culture

Answer 20

• 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

Question 21

To avoid cultural issues -

Answer 21

an important cultural classification scheme is Hofstede’s cultural dimensions concept

Question 22

Power distance

Answer 22

willingness to accept social inequality as natural

Question 23

Uncertainty avoidance

Answer 23

the extent to which the society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life

Question 24

Individualism

Answer 24

• perceived obligation to and dependence on groups

Question 25

Masculinity

Answer 25

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

Question 26

Time orientation

Answer 26

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

Question 27

Indulgence

Answer 27

the extent to which society allows for the gratification of fun and enjoyment needs or else suppresses and regulates such pursuits

Question 28

Communication

Answer 28

non-verbal and verbal cues

Question 29

Analyzing Technology and Infrastructure Capabilities

Answer 29

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

Question 30

Target Market: Segmentation, Targeting, and Positioning

Answer 30

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

Question 31

Global Marketing Mix - Global Product or Service Strategies

Answer 31

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

Question 32

Glocalization

Answer 32

when firms standardize products globally and change promotional campaigns geared to local markets

Question 33

Global Pricing Strategies

Answer 33

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

Question 34

Global distribution strategies

Answer 34

- 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

Question 35

Global Communication Strategies -

Answer 35

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

Question 36

Ethical Marketing in Global Marketing Environmental concerns

Answer 36

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

Question 37

Global Labour issues

Answer 37

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

Question 38

Impact on Host Country Culture

Answer 38

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