chapter 7 world market

Question 1

Countertrade

Answer 1

the practice using barter trade rather than paying for traded goods.

Question 2

Trade Feedback Effect

Answer 2

refers to imports impacting exports and vice versa

Question 3

Balance of Trade

Answer 3

the difference between the value of exports and imports

Question 4

What variables influence why some companies and industries in a country succeed globally while others lose ground or fail?

Answer 4

Answer:
According to Michael Porter, they include:
• Factor conditions, such as natural resources
• Demand conditions
• Related and supporting industries
• Company strategy, structure and rivalry

Question 5

Four Trends in the past decade have had significant impact on global marketing

Answer 5

1. Decline of Economic Protectionism
2. The Rise of Economic Integration
3. A New Reality: Global Competition among Global Companies for Global Customers
4. Emergence of Networked Global Marketplace

Question 6

WTO

Answer 6

world trade organization:
an institution that sets rules governing trade between its members through a panel of experts who (a) decide on trade disputes between members and (b) issue binding decisions.

1995, Jan 1
it accounted for 90% world trade in 1995, CA is a member

Question 7

Protectionism

Answer 7

shielding one or more industries from foreign competition through the use of quota and tariffs

Question 8

Tariffs

Answer 8

An entry tax on goods and services serving to raise prices of imported goods and services

Question 9

Quota

Answer 9

A restriction placed on the amount of products allowed to enter a country

Question 10

three examples of economic integration

Answer 10

the European Union (or simply, EU), the North American Free Trade Agreement (NAFTA), and Asian free trade areas

other examples: ASEAN
APEC
MERCOSUR
Golf Cooperation Treaty

Question 11

Strategic alliances

Answer 11

agreements amongst two or more firms to cooperate for the purpose of achieving common goals such as competitive advantage or customer valve creation

Question 12

In Global Companies marketing competition takes the forms of (2)

Answer 12

• Multi-domestic Strategy

- Global marketing strategy

Question 13

Global marketing strategy

Answer 13

the practice of standardizing marketing activities when there are cultural similarities and adapting when they are dissimilar.

Question 14

Multi-domestic Strategy

Answer 14

firm’s marketing strategy adapted for each country-market

Question 15

Once a company has decided to enter the global marketplace, it must select a means of market entry. Four options exist

Answer 15

: (1) exporting, (2) licensing, (3) joint venture, and (4) direct investment.

Question 16

indirect exporting

Answer 16

no overseas contacts but wants to market abroad (very quick, low profit, low info).

Question 17

what is joint venture

Answer 17

an arrangement
a foreign company and a local firm invest jointly together to create a local business
sharing ownership, control, and profits of the new company

Question 18

what is direct investment

Answer 18

A domestic firm invests and owns a foreign subsidiary or division in a another country

Question 19

Global Brand

Answer 19

a brand marketed under the same name in multiple country-markets
with similar and centrally coordinated marketing program

Question 20

Global Consumers

Answer 20

to groups of consumers living
in different markets
with similar needs
wants and seeking similar benefits

Question 21

Among which countries was the North American Free Trade Agreement was designed to promote free trade?

Answer 21

effective since 1994, lifted many trade barriers between Canada, the United States, and Mexico.

Question 22

When foreign currencies can buy more Canadian dollars, are Canadian products more or less expensive for a foreign consumer?

Answer 22

Canadian products are less expensive for a foreign consumer when foreign currencies can buy more Canadian dollars.

Question 23

What mode of entry could a company follow if it has no previous experience in global marketing?

Answer 23

Indirect exporting is ideal for the company that has no overseas contacts but wants to market abroad.

Question 24

3 Product and Promotion Strategies for global market

Answer 24

1. product extension (the same product in other countries)
2. product adaptation ( changing the product in some ways to make them more appropriate to the other country- market)
3. product invention: design a new product to satisfy the unmet common customer needs or needs of speical groups
4. dual adaptation
   5 communication adaptation (adapt promotion only)

Question 25

Communication requires 6 steps (elements)

Answer 25

a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.

Question 26

Examining only three Product Characteristics for Global Expansion Strategies

Answer 26

1. needs
2. condition of use
3. buying ability

Question 27

2 Pricing Strategy in global market

Answer 27

1. Dumping: when a firm sells a product in a foreign country below its domestic price or below it actual cost
2. Grey market: called parallel importing, is when price disparities lead to unauthorized channels of distribution imports

Question 28

distribution strategy often determined by ?

Answer 28

a country’s stage of economic development

Question 29

Distribution include

Answer 29

availability and quality of retailers and wholesalers as well as transportation, communication, and warehousing

Question 30

Products may be sold globally in three ways

Answer 30

Product extension,
Product adaptation, and
Product invention.