Chapter 4: Developing a Global Vision

Question 1

Global marketing

Answer 1

Marketing that targets markets throughout the world.

Question 2

Global vision

Answer 2

A recognition of and reaction to international marketing opportunities using effective global marketing strategies and being aware of threats from foreign competitors in all markets.

Question 3

Gross domestic product (GDP)

Answer 3

The total market value of all goods and services produced in a country for a given period.

Question 4

Outsourcing

Answer 4

The practice of using an outside supplier, generally where the production costs are lower, to complete the work.

Question 5

Inshoring

Answer 5

Returning jobs to Canada.

Question 6

Multinational corporations

Answer 6

Companies that are heavily engaged in international trade, beyond exporting and importing.

Question 7

Capital intensive

Answer 7

Using more capital than labour in the production process.

Question 8

Global marketing standardization

Answer 8

Production of uniform products that can be sold the same way all over the world.

Question 9

Gross national income (GNI) per capita

Answer 9

One measure of the ability of a country’s citizens to buy various goods and services.

Question 10

Mercosur

Answer 10

The largest Latin American trade agreement, made up of Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela.

Question 11

Uruguay Round

Answer 11

An agreement created by the World Trade Organization to dramatically lower trade barriers worldwide.

Question 12

World Trade Organization (WTO)

Answer 12

A trade organization that replaced the old General Agreement on Tariffs and Trade (GATT).

Question 13

General Agreement on Tariffs and Trade (GATT)

Answer 13

A trade agreement that contained loopholes that enabled countries to avoid trade-barrier reduction agreements.

Question 14

North American Free Trade Agreement (NAFTA)

Answer 14

An agreement among Canada, the United States, and Mexico that created the world’s largest free trade zone at that time.

Question 15

Canadian-European Union Comprehensive Economic and Trade Agreement (CETA)

Answer 15

A progressive free trade agreement, which overs almost all sectors and aspects of Canada-EU trade in order to eliminate or reduce barriers.

Question 16

European Union (EU)

Answer 16

A free trade zone encompassing 28 European countries.

Question 17

6 Factors Global Marketers Must Address

Answer 17

Natural resources, Cultural values, economic development, technological development, political structure (tariffs, quotas, boycotts, etc.), demography (race, gender, age).

Question 18

World Bank

Answer 18

An international bank that offers low-interest loans, advice, and information to developing nations.

Question 19

International Monetary Fund (IMF)

Answer 19

An international organization that acts as a lender of last resort, providing loans to troubled nations, and also works to promote trade through financial cooperation.

Question 20

Group of Twenty

Answer 20

A forum for international economic development that promotes discussion between industrial and emerging-market countries on key issues related to global economic stability.

Question 21

High-net-worth individuals (HNWI)

Answer 21

Individuals who have $1 million in liquid financial assets.

Question 22

Exporting (lowest risk)

Answer 22

Selling domestically produced products to buyers in another country.

Question 23

Buyer for export

Answer 23

An intermediary in the global market that assumes all ownerships risks and sells globally for its own account.

Question 24

Export broker

Answer 24

An intermediary who plays the traditional broker’s role by bringing buyer and seller together.

Question 25

Export agents

Answer 25

Intermediaries who act like manufacturers’ agents for exporters; the export agents live in the foreign market.

Question 26

Licensing

Answer 26

The legal process whereby a licensor agrees to let another firm use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge.

Question 27

Contract manufacturing

Answer 27

Private-label manufacturing by a foreign company.

Question 28

Joint venture

Answer 28

A domestic firm’s purchase of part of a foreign company or a domestic firm joining with a foreign company to create a new entity.

Question 29

Direct foreign investment (highest risk)

Answer 29

Active ownership of a foreign company or of overseas manufacturing or marketing facilities.

Question 30

Floating exchange rates

Answer 30

Prices of different currencies move up and down based on the demand for and the supply of each currency.

Question 31

Dumping

Answer 31

The sale of an exported product at a price lower than that charged for the same or a like product in the home market of the exporter.

Question 32

Countertrade

Answer 32

A form of trade in which all or part of the payment for goods and services is in the form of other goods or services.