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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
Expropriation
governmental action to dispossess a foreign company or investor
26
Confiscation
occurs when no compensation is provided
27
Nationalization
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
28
Creeping expropriation
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
29
Intellectual property
``` Intellectual property refers to creations of the mind Literary and artistic works Designs Symbols Names Images ```
30
Patent
Protection of the rights of the inventor or of the firm to use and sell the invention for a specified period of time
31
Copyright
Rights of owner of original work of art to reproduce, sell, perform, or film the work.
32
Trademark
Brand name, mark, symbol, motto, or slogan that identifies a brand and distinguishes it from competitors’ brands
33
Trade secret
Know-how, formulas, and special blends that are not registered and are thus not protected by law
34
counterfeiting
unauthorized copying and production of a product
35
Associative Counterfeit/imitation
product name differs slightly from a well-known brand
36
Piracy
unauthorized publication or reproduction of copyrighted work
37
Factors influencing property violations
``` 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
TRIPS (Trade-Related Aspects of Intellectual Property Rights)
member countries of the World Trade Organization, must sign the TRIPS agreement.
39
World intellectual property organization
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
Foreign corrupt practices act
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
Omnibus Trade and Competitiveness Act
Allows for “grease” payments to cut red tape; i.e., getting shipments through customs, getting permits
42
Culture
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
Main elements to culture
Language Religion Cultural values Cultural norms
44
Proxemics
The relationship between physical space and the process of communication.
45
Chronemics
The timing of verbal exchanges in a conversation with others
46
Haptics
The use of touch while conversing. | Kinesics: Movements of parts of the body to facilitate communication, such as gesturing.
47
Paralinguistics
Non-verbal aspects of speech, including emotional intonation, accents, and the quality of voice
48
Olfactions
Use of odors to convey messages, whether religious or personal.
49
Imperative norms
What an outsider must or must not do
50
Exclusive norms
What locals may do but an outside cannot
51
Adiaphora Norms
What an outsider may or may not do
52
Monochronic culture (time)
Process information in a direct, linear way Focus on one action or thing at a time Operate on rigid schedules
53
Polychronic culture (time)
Nonlinear time frame Work on several tasks at a time Place emphasis on completing human transactions rather than holding strict schedules (Hall & Hall)
54
Power distance
The manner in which interpersonal relationships are formed when there are perceived differences in power. (US low, China High)
55
Uncertainty avoidance
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
Self-reference criterion
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
Enculturation
Process by which individuals learn the beliefs and behaviors endorsed by one’s own culture.
58
Acculturation
Learning a new culture.
59
Assimilation
Full adoption and maintenance of the new culture, and resistance to one’s old culture.
60
Global consumer culture positioning
Positioning the product to appeal to individuals who want to be part of a global consumer culture.
61
Local Consumer culture positioning
Positioning the product so that it is associated with local cultural meanings
62
Foreign consumer culture positioning
Positioning a products as symbolic of a desired foreign culture
63
Scale Economies
result when the average cost of production declines with the increased scale of production
64
Scope Economies
achieved when the cost of producing two products using shared resources is less than the costs of producing them separately
65
Brand Equity
Strength of consumers attachment to a brand
66
Government actions that support exports
Tax incentives Subsidies Governmental assistance Free trade zones
67
Export selling vs export marketing
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
Indirect vs direct exporting
When firms use intermediaries to export it is called indirect exporting When firms export themselves it is called direct exporting
69
Sprinkler Approach
``` Enter different markets all at once Low value added products Significant threat of competitive attacks Globally experienced management High resource availability ```
70
Waterfall approach
Enter advanced countries first, then developing, then less developed countries High value added products Lack of significant competitive threats Infrastructural problems across markets
71
Ad valorem duty
Duty based on value of goods
72
Specific Duty
Expressed as specific amount of currency per unit of weight, volume, length, or other unit of measurement
73
Licensing
``` 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
Franchising
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
Foreign direct investment
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
Joint venture
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
Wholly owned subsidiaries
``` 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
Global strategic Alliance
``` Generally non-equity collaboration between firms for specific purposes Manufacturing alliances Marketing alliances Distribution alliances Outsourcing ```
79
Keiretsu (Japan)
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
Chaebol
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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