Chapter 5 Flashcards
Gross Domestic Product
Total Market Value of all final goods and services produced in a country for a given time period
Multinational Corporation
A company is heavily engaged in international trade, beyond exporting and importing. A multinational corporation moves resources, goods, services, and skills across national boundaries without regard to the country in which its headquarters is located.
Capital Intensive
Using more capital than labor in the production process. Does not increase employment.
Global Marketing Standardization
Production of uniform products that can be sold the same way all over the world. (Think McDonalds)
Multi domestic Strategy
When Multinational firms enable individual subsidiaries to compete independently in domestic markets. Think same brand releases two of the same products, one for developing country and one for a higher end market.
Tariff
tax levied on the goods entering a country
Quota
limit on the amount of a specific product that can enter a country
Boycott
exclusion of all products from certain countries or companies.
Exchange Control
law competing a company earning foreign exchange from its exports to sell it to a control agency
Market Grouping
occurs when several countries agree to work together to form a common trade area that enhances trade opportunities.
World Trade Organization (WTO)
a trade organization that replaced the old General Agreement on Tariffs and Trade
General Agreement on Tariffs and Trade (GATT)
A trade agreement that contained loopholes enabling countries to avoid trade-barrier reduction agreements
Trade Agreement
an agreement to stimulate international trade. not all government efforts are meant to stifle imports or investments by foreign corporations.
North American Free Trade Agreement (NAFTA)
Ratified Agreement between North America, Canada and Mexico, it created the world’s largest free trade zone.
The European Union (EU)
A free trade zone encompassing 28 European countries
World Bank
An international bank that offers low interest loans, advice, and information to developing nations
International Monetary Fund (IMF)
founded in 1945, 1 year after the world bank, to promote trade through financial cooperation and eliminate trade barriers in the process. Its a last resort for troubled nations, think Greece.
Group of 20 (G-20)
A forum for international economic development that promotes discussion between industrial and emerging market countries on key issues related to global economic stability
Exporting
Selling domestically produced products to buyers in other countries.
Buyer for Export
An intermediary in the global market that assumes all ownership risks and sell globally for its own account. The buyer for export assumes all risks and sells internationally.
Export Broker
A second type of intermediary who plays the traditional broker’s role by bringing buyer and seller together. The manufacturer still retains title and assumes all the risks.
Export Agents
Third type of intermediary are foreign sales agents/distributors who live in the foreign country and perform the same functions as domestic manufacturers agents, helping with international financing, shipping, etc
Contract Manufacturing
Its for firms that don’t want to become involved in licensing or to become heavily involved global marketing may engage in this, which is a private labeling company.
Joint Venture
When domestic firm buys part of a foreign company or joins with a foreign company to create a new entity.
Direct Foreign Investment
Active ownership of a foreign of a foreign manufacturing or marketing facilities.
Product Invention
Can either mean creating a new product for a market or drastically changing an existing product
Product Adaptation
Alter a basic product slightly to meet local conditions. Single use packets of deodorant in low income areas.
Exchange Rate
The price of one country’s currency in terms of another COUNTRY’S CURRENCY.
Floating Exchange Rate
A system in which prices of different currencies move up and down based on the demand for and the supply of each currency
Dumping
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 explorer
Countertrade
All or part of the payment for goods and services is in the form of other goods or services. Basically a type of barter system.
Consumer Behavior
Describes how consumers make purchase decisions and how they use and dispose of the purchased goods and services.
