Chapter 9

Question 1

International Marketing

Answer 1

Developing and performing marketing activities across national boundaries.

Question 2

Gross Domestic Product (GDP)

Answer 2

The market value of a nation’s total outputs of goods and services for a given period; an overall measure of economic standing.

Question 3

Import Tariff

Answer 3

A duty levied by a nation on goods bought outside its borders and brought into the country.

Question 4

Quota

Answer 4

A limit on the amount of goods an importing country will accept for a certain product categories in a specified period of time.

Question 5

Embargo

Answer 5

A government’s suspension of trade in a particular product of with a given country.

Question 6

Exchange Controls

Answer 6

Government restrictions on the amount of a particular currency that can be bought or sold.

Question 7

Balance of Trade

Answer 7

The difference in value between a nation’s exports and its imports.

Question 8

Cultural Relativism

Answer 8

The concept that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures.

Question 9

North American Free Trade Agreement (NAFTA)

Answer 9

An alliance that merges Canada, Mexico, and the United States into a single market.

Question 10

European Union (EU)

Answer 10

An alliance that promotes trade among its member countries in Europe.

Question 11

Common Market of the Southern Cone (MERCOSUR)

Answer 11

An alliance that promotes the free circulation of goods, services, and production factors, and has a common external tariff and commercial policy among member nations in South America.

Question 12

Asia-Pacific Economic Cooperation (APEC)

Answer 12

An alliance that promotes open trade and economic and technical cooperation among member nations throughout the world.

Question 13

World Trade Organization (WTO)

Answer 13

An entity that promotes free trade among member nations by eliminating trade barriers and educating individuals, companies, and governments about trade rules around the world.

Question 14

General Agreement on Tariffs and Trade (GATT)

Answer 14

An agreement among nations to reduce worldwide tariffs and increase international trade.

Question 15

Dumping

Answer 15

Selling products at unfairly low prices.

Question 16

Importing

Answer 16

The purchase of products from a foreign source.

Question 17

Exporting

Answer 17

The sale of products to foreign markets.

Question 18

Trading Company

Answer 18

A company that links buyers and sellers in different countries.

Question 19

Licensing

Answer 19

An alternative to direct investment that requires a licensee to pay commissions or royalties on sales or supplies used in manufacturing.

Question 20

Franchising

Answer 20

A form of licensing in which a franchiser, in exchange for a financial commitment, grants a franchisee the right to market its product in accordance with the franchiser’s standards.

Question 21

Contract Manufacturing

Answer 21

The practice of hiring a foreign firm to produce a designated volume of the domestic firm’s product or a component of it to specification; the final product carries the domestic firm’s name.

Question 22

Outsourcing

Answer 22

The practice of contracting non-core operations with an organization that specializes in that operation.

Question 23

Offshoring

Answer 23

The practice of moving a business process that was done domestically at the local factory to a foreign country, regardless of whether the production accomplished in the foreign country is performed by the local company (e.g. in a wholly owned subsidiary) or a third party (e.g. subcontractor).

Question 24

Offshore Outsourcing

Answer 24

The practice of contracting with an organization to perform some or all business functions in a country other than the country in which the product or service will be sold.

Question 25

Joint Venture

Answer 25

A partnership between a domestic firm and a foreign firm or government.

Question 26

Strategic Alliance

Answer 26

A partnership that is formed to create a competitive advantage on a worldwide basis.

Question 27

Direct Ownership

Answer 27

A situation in which a company owns subsidiaries or other facilities overseas.

Question 28

Multinational Enterprise

Answer 28

A firm that has operations or subsidiaries in many countries.

Question 29

Gloabilization

Answer 29

The development of marketing strategies that treat the entire world (or its major regions) as a single entity.