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International Marketing > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

Domestic Marketing

A

Low or no international commitment

Domestic focus

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2
Q

Export marketing

A

Limited international commitment

Direct or indirect exporting

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3
Q

International Marketing

A

substantial international commitment

Focus on country or regions

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4
Q

External drivers of international expansion

A

Competition - Pressre from international companies will force the company to expand into new markets, even less profitable ones

Transportation and Information technology - Lower cost and higher quality communication due to satellite technology, teleconferencing, and e-mail enable firms to manage worldwide operations.

Transition to a market economy - Transition to a market economy created important new markets and opportunities to transform inefficient government-owned companies into successful enterprises

Economic growth - Economic growth created markets of high potential for international brands, while also opening previously closed markets.

Regional Economic and political integration - Integration facilitates international trade for companies in member countries, and for companies from countries outside of the area

Converging consumer needs - Consumers’ exposure (through media, travel) to global brands created demand for global products and worldwide loyalty to international brands.

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5
Q

Firm specific drivers of international marketing

A 
Product life cycle
high new product development costs
Standardization
Economies of scale
Cheap labor
Experience transfers
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6
Q

Obstacles to internationalization

A

Psychological barrier
Government Barriers
Barriers imposed by international competition

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7
Q

Ethnocentric Orientation

A

Home country is considered superior to others
Sees only similarities in other countries
Assumes products and practices that succeed at home will be successful everywhere
Leads to a standardized or extension approach

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8
Q

Polycentric Orientation

A

Each country is considered unique
Each subsidiary develops its own unique business and marketing strategies
Often referred to as multinational
Leads to a localized or adaptation approach that assumes products must be adapted to local market conditions

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9
Q

Regiocentric orientation

A

Region is the relevant geographic unit

Some companies serve markets throughout the world but on a regional basis

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10
Q

Geocentric Orientation

A

Entire world is a potential market
Strives for integrated global strategies
Also known as a global or transnational company
Retains an association with the headquarters country
Pursues serving world markets from a single country or sources globally to focus on select country markets
Leads to a combination of extension and adaptation elements

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11
Q

Country market analysis

A 
Determine Opportunities
Matching market and competency
Synergy
Growth potential
Profit potential
Evaluate Risks
Competitive response
Consumer response
New business model
Political intervention
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12
Q

The Global Economy

A

World divided into high income, low income, and emerging economies
Increasing gap between high-income and low-income countries
Emerging economies catching up with high income economies

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13
Q

Regional Economies

A

Regional trade and investment agreement to manage commercial relations

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14
Q

Country Market Analysis (3 c’s)

A

Consumers
Competitors
Country

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15
Q

4 categories of development

A

Low-income countries
Lower-middle income countries
Upper-middle income countries
High-income countries

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16
Q

Low - income countries

A 
GNI per capita of $1,045 or less
Characteristics:
Limited industrialization
High percentage of population in farming
High birth rates
Low literacy rates
Heavy reliance on foreign aid
Political instability and unrest
Afghanistan, Ethiopia, Uganda, Mali
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17
Q

Lower - middle income countries

A 
GNI per capita: $1,045 to $4,125
Characteristics
Rapidly expanding consumer markets
Cheap labor
Mature, standardized, labor-intensive industries like footwear, textiles and toys
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18
Q

Upper-middle-income countries

A

GNI per capita: $4,126 to $12,735
Characteristics:
Rapidly industrializing, less agricultural employment
Increasing urbanization
Rising wages
High literacy rates and advanced education
Lower wage costs than advanced countries
Also called newly industrializing economies (NIEs)
Examples: Brazil, Malaysia, Mexico, Turkey

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19
Q

High Income countries

A

GNI per capita: $12,736 or more
Characteristics:
Sustained economic growth through disciplined innovation
Service sector is more than 50% of GNI
Households have high ownership levels of basic products
Importance of information processing and exchange
Ascendancy of knowledge over capital, intellectual over machine technology, scientists and professionals over engineers and semiskilled workers

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20
Q

Concentration ratio

A

Ratio of sales to total sales in a product market

Relative market positions result from the growth rate of sales of each competitor.

A high market share over a long period suggests that the firm has been able to achieve a good fit between what it offers and what the market expects

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21
Q

Political-Regulatory Environment

A

Governments play a major role in regulating marketing activities
Can open or close a market
Force companies to adopt product standards
Make companies to change price
Make companies to pull offensive ads
Stop companies from developing a monopoly position

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22
Q

Why governments regulate

A

National interest
National sovereignty - provide reasons to maintain control over strategic industries like transportation, utilities and defense
National Identity - encourage regulations that are perceived to protect local cultures
National reciprocity - retaliate against perceived unfair practices of others

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23
Q

Political risk signals

A

Poor economic performance.
Repression of ethnic groups and/or general repression by the elite.
Internal diversity and incongruent interests.
Radically changing government structures.
Fierce nationalist sentiment

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24
Q

Political risk and firm related signals

A

High ratios of international to domestic revenues
Significant amount of foreign direct investments
Dependence on global supply chain
Key operations in volatile countries
Dependence on global economy

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25
Q

Expropriation

A

governmental action to dispossess a foreign company or investor

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26
Q

Confiscation

A

occurs when no compensation is provided

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27
Q

Nationalization

A

a government takes control of some or all of the enterprises in an entire industry
Acceptable according to international law if:
satisfies public purpose
includes compensation

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28
Q

Creeping expropriation

A

limits economic activities of foreign firms
May include:
Limits on repatriation of profits, dividends, or royalties
Technical assistance fees
Increased local content laws
Quotas for hiring local nationals
Price controls
Discriminatory tariff and nontariff barriers
Discriminatory laws on patents and trademarks

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29
Q

Intellectual property

A 
Intellectual property refers to creations of the mind
Literary and artistic works
Designs
Symbols
Names
Images
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30
Q

Patent

A

Protection of the rights of the inventor or of the firm to use and sell the invention for a specified period of time

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31
Q

Copyright

A

Rights of owner of original work of art to reproduce, sell, perform, or film the work.

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32
Q

Trademark

A

Brand name, mark, symbol, motto, or slogan that identifies a brand and distinguishes it from competitors’ brands

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33
Q

Trade secret

A

Know-how, formulas, and special blends that are not registered and are thus not protected by law

34
Q

counterfeiting

A

unauthorized copying and production of a product

35
Q

Associative Counterfeit/imitation

A

product name differs slightly from a well-known brand

36
Q

Piracy

A

unauthorized publication or reproduction of copyrighted work

37
Q

Factors influencing property violations

A 
Lack of appropriate legislation. 
Lax enforcement. 
Unavailability of authentic products.
High prices for authentic products that limit their accessibility to local consumers.
Cultural Factors
38
Q

TRIPS (Trade-Related Aspects of Intellectual Property Rights)

A

member countries of the World Trade Organization, must sign the TRIPS agreement.

39
Q

World intellectual property organization

A

Governed by the Madrid Agreement and the Madrid Protocol

Allows trademark owners to seek protection in as many as 74 countries with a single application and fee

40
Q

Foreign corrupt practices act

A

Requires publicly held companies to institute internal accounting controls that would record all transactions
Makes it a crime for a U.S. corporation to bribe an official of a foreign government or political party to obtain or retain business
Prohibits payments to third parties when there is reason to believe it may be channeled to foreign officials

41
Q

Omnibus Trade and Competitiveness Act

A

Allows for “grease” payments to cut red tape; i.e., getting shipments through customs, getting permits

42
Q

Culture

A

continuously changing totality of learned and shared meanings, rituals, norms, and traditions among the members of an organization or society.

a society’s personality

43
Q

Main elements to culture

A

Language
Religion
Cultural values
Cultural norms

44
Q

Proxemics

A

The relationship between physical space and the process of communication.

45
Q

Chronemics

A

The timing of verbal exchanges in a conversation with others

46
Q

Haptics

A

The use of touch while conversing.

Kinesics: Movements of parts of the body to facilitate communication, such as gesturing.

47
Q

Paralinguistics

A

Non-verbal aspects of speech, including emotional intonation, accents, and the quality of voice

48
Q

Olfactions

A

Use of odors to convey messages, whether religious or personal.

49
Q

Imperative norms

A

What an outsider must or must not do

50
Q

Exclusive norms

A

What locals may do but an outside cannot

51
Q

Adiaphora Norms

A

What an outsider may or may not do

52
Q

Monochronic culture (time)

A

Process information in a direct, linear way
Focus on one action or thing at a time
Operate on rigid schedules

53
Q

Polychronic culture (time)

A

Nonlinear time frame
Work on several tasks at a time
Place emphasis on completing human transactions rather than holding strict schedules (Hall & Hall)

54
Q

Power distance

A

The manner in which interpersonal relationships are formed when there are perceived differences in power.
(US low, China High)

55
Q

Uncertainty avoidance

A

The extent to which individuals are threatened by uncertainty and risk and thus adopt beliefs and behaviors that help them to avoid the uncertainty
(US low, China High)

56
Q

Self-reference criterion

A

The unconscious reference to one’s own national culture, to home-country norms and values, and to their knowledge and experience in the process of making decisions in the home country.

57
Q

Enculturation

A

Process by which individuals learn the beliefs and behaviors endorsed by one’s own culture.

58
Q

Acculturation

A

Learning a new culture.

59
Q

Assimilation

A

Full adoption and maintenance of the new culture, and resistance to one’s old culture.

60
Q

Global consumer culture positioning

A

Positioning the product to appeal to individuals who want to be part of a global consumer culture.

61
Q

Local Consumer culture positioning

A

Positioning the product so that it is associated with local cultural meanings

62
Q

Foreign consumer culture positioning

A

Positioning a products as symbolic of a desired foreign culture

63
Q

Scale Economies

A

result when the average cost of production declines with the increased scale of production

64
Q

Scope Economies

A

achieved when the cost of producing two products using shared resources is less than the costs of producing them separately

65
Q

Brand Equity

A

Strength of consumers attachment to a brand

66
Q

Government actions that support exports

A

Tax incentives
Subsidies
Governmental assistance
Free trade zones

67
Q

Export selling vs export marketing

A

Export selling involves selling the same product, at the same price, with the same promotional tools in a different place
Export marketing tailors the marketing mix to international customers

68
Q

Indirect vs direct exporting

A

When firms use intermediaries to export it is called indirect exporting
When firms export themselves it is called direct exporting

69
Q

Sprinkler Approach

A 
Enter different markets all at once
Low value added products
Significant threat of competitive attacks
Globally experienced management
High resource availability
70
Q

Waterfall approach

A

Enter advanced countries first, then developing, then less developed countries
High value added products
Lack of significant competitive threats
Infrastructural problems across markets

71
Q

Ad valorem duty

A

Duty based on value of goods

72
Q

Specific Duty

A

Expressed as specific amount of currency per unit of weight, volume, length, or other unit of measurement

73
Q

Licensing

A 
A contractual agreement whereby one company (the licensor) makes an asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation
Patent
Cartoon characters
Brand name
Product formulations
Famous names
74
Q

Franchising

A

Contract between a parent company-franchisor and a franchisee that allows the franchisee to operate a business developed by the franchisor in return for a fee and adherence to franchise-wide policies

75
Q

Foreign direct investment

A

Investment flows out of a country to acquire plants, equipment, or other assets
Indicator of the resource position of the host country
Indicator of market potential of the host country

76
Q

Joint venture

A

Entry strategy for a single target country in which the partners share ownership of a newly-created business entity
Builds upon each partner’s strengths

77
Q

Wholly owned subsidiaries

A 
Start-up of a new operation or an acquisition of an existing enterprise
Advantages of WOS
Control over marketing activities
Enjoy tax benefits
Avoid tariffs
78
Q

Global strategic Alliance

A 
Generally non-equity collaboration between firms for specific purposes
Manufacturing alliances
Marketing alliances
Distribution alliances
Outsourcing
79
Q

Keiretsu (Japan)

A

Inter-business alliance or enterprise groups in which business families join together to fight for market share
Often cemented by bank ownership of large blocks of stock and by cross-ownership of stock between a company and its buyers and non-financial suppliers
Keiretsu executives can legally sit on each other’s boards, share information, and coordinate prices

80
Q

Chaebol

A

Composed of dozens of companies, centered around a bank or holding company, and dominated by a founding family
Cooperative Alliance in South Korea

International Marketing (2 decks)

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