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MKTG 440 > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

Culture

A
  • Ways of living, built up by a group of human beings, that are transmitted from one generation to another
  • Conscious and unconscious values, ideas, attitudes and symbols
  • Acted out in social institutions
  • factual/interpretive
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2
Q

Cultural Influences on Buyer Behavior

A

Cultural forces > Cultural Messages > Consumer Decision Process > Behavior

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3
Q

Attitudes

A

learned tendency to respond in a consistent way to a given object or entity

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4
Q

Belief

A

an organized pattern of knowledge that an individual holds to be true about the world

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5
Q

Value

A

enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct

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6
Q

Determinants of Culture

A
  1. Religion (community’s set of beliefs relating to a reality that cannot be verified empirically)
  2. History (past events as well as the memory, discovery, collection, organization, presentation, and interpretation of information about these events)
  3. Social Institutions (social interactions among people; nuclear family, extended family; reference groups, business, government
  4. Language (language has two parts: the spoken and the silent language)
  5. Aesthetics/Art/Entertainment (ideas and perceptions that a culture upholds in terms of beauty and good taste)
  6. Education (One of the major vehicles to channel from one generation to the next or to introduce change)
  7. Material life (technologies that are used to produce, distribute, and consume goods and services)
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7
Q

Religion

A
  • The world’s major religions include Buddhism, Christianity, Hinduism, Islam, and Judaism and are an important source of beliefs, attitudes, and values.
  • Religious tenets, practices, holidays, and history impact global marketing activities.
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8
Q

Christmas as a Global Phenomenon

A

China
Bars charge $25 for entrance on Christmas Eve, hotels charge $180 for a Christmas function.

Turkey
Children stand in line in shopping centers, waiting to sit on Santa’s lap and ask him for gifts.
Stores sell Santa suits and statues.

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9
Q

History

A
  • Understanding a country’s history is critical in gaining knowledge of the culture.
  • History is subjective:
  • — Mexico and Los Ninos Heroes
  • — Japan and Admiral Perry
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10
Q

Social Institutions

A
  • Family size, composition
  • – Kinship may be a tribe or clan and so segmentation may have to be based on this.
  • Decision making
  • High trust vs low trust cultures
  • Reference groups
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11
Q

Reference Groups

A
  • Role Models

- Country Image

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12
Q

Language and Communication

A
  • Verbal & nonverbal (Silent Language)
  • Context of communication
    — Low-context cultures
    — High-context cultures
  • Showing emotion
    Affective cultures
    Neutral cultures
  • Forms of address
    — Herr/Frau (Mr/Ms) + title + last name
    — Herr Doktor Meier
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13
Q

Aesthetics

A
  • The sense of what is beautiful and what is not beautiful
  • What represents good taste as opposed to tastelessness or even obscenity
  • What is art?
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14
Q

Visual

A

embodied in the color or shape of a product, label, or package

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15
Q

Styles

A

various degrees of complexity are perceived differently around the world

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16
Q

Material Culture and Aesthetics

A

Material culture is the aggregate of physical objects and technologies used by a society:

  • Transportation and communication systems
  • Energy supplies
  • Clothing
  • Tools
  • Decorative art
  • Body adornment
  • Homes
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17
Q

Education

A
  • Levels of participation
  • Impact on consumers and employees
  • Impact on economic performance

For marketing

  • advertising programs and labelling
  • conducting market research
  • complex products with instructions
  • relations with distributors and support sources
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18
Q

Measuring Cultural Differences

A
  • Hall’s Silent Language
  • Hofstede’s Five Dimensions
  • World Value Survey
  • International VALS
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19
Q

Hall’s Silent Language

A 
Space
Material possessions
Friendship patterns
--- sharing one’s personal thoughts and feelings
Agreements across cultures
Time
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20
Q

High-Context Cultures

A
  • Information resides in context
  • Emphasis on background, basic values
  • Less emphasis on legal paperwork
  • Focus on personal reputation
  • Saudi Arabia, Japan
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21
Q

Low-Context Cultures

A
  • Messages are explicit and specific
  • Words carry all information
  • Reliance on legal paperwork
  • Focus on non-personal documentation of credibility
  • Switzerland, US, Germany
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22
Q

Monochromic Time

A
  • Monochronic time typifies most North Americans, Swiss, Germans, and Scandinavians
  • Most low-context cultures concentrating on one thing at a time
  • Meetings are focused, uninterrupted, timed.
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23
Q

Polychromic Time

A
  • Polychromic time is characterized by multi-tasking and by “a great involvement with people”
  • Polychronic time, is more dominant in high-context cultures
  • Meetings are finished before leaving, interruptions are common
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24
Q

Hofstede’s Dimensions of Cultural Values

A 
Power Distance
Individualism versus Collectivism
Masculinity versus femininity
Uncertainty Avoidance
Long-term Orientation
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25
Q

World Trade Organization

A
  • Umbrella organization that oversees global trade
  • Formed Jan. 1, 1995 to mediate trade disputes and provide a forum for trade-related negotiations among members
  • Members agree to WTO policies promoting free trade
  • Has enforcement power and can impose sanctions
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26
Q

International Trade Organizations

A

entities that set the rules of trade among countries

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27
Q

Preferential Free Trade Agreements

A
  • Many countries seek to lower barriers to trade within their regions
  • P T A s give partners special treatment and may discriminate against others
  • Over 300 P T A s have been notified to the W T O
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28
Q

Levels of PTAs

A

Level 1: Economic Union Abolish Tariffs + CET + Factor Movement + Economist and Political Harmonization
Level 2: Common Market Abolish Tariffs + CET + Factor Movement
Level 3: Customs Union Abolish Tariffs + CET
Level 4: FTA Abolish Tariff Barriers

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29
Q

sensitivity

A

the ability to detect real equity changes

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30
Q

stability

A

the absence of spurious or short-term fluctuations

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31
Q

Recognition

A

How broad and deep is a brand’s awareness?

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32
Q

Regard

A

How do people feel about the brand?

33
Q

3 tasks of the global marketer

A
  1. Foreign entry: Identifying attractive markets, selecting market entry strategy
  2. Local Marketing: Marketing planning and management in a different (host market) environment
  3. Global Management: Capturing the scale advantages and synergies created by coordinating marketing activities across several markets
34
Q

Globalization

A

the spread of products, technology, information, and jobs across national borders and cultures

35
Q

Four management orientations

A
  1. Ethnocentric: Home country is superior, sees similarities in foreign countries
  2. Polycentric: Each host country is unique, sees differences in foreign countries
  3. Regiocentric: sees similarities and differences in a world region; is ethnocentric or polycentric in its view of the rest of the world
  4. Geocentric: World view, sees similarities and differences in home and host countries
36
Q

Four stages of economic development

A
  1. Low-Income countries
  2. Lower-Middle-Income countries
  3. Upper-Middle-Income countries
    a. Newly Industrializing Economies (NIEs)
  4. High-Income countries
37
Q

macro-level measures of an economy

A

• Economic size, growth, rate of change
o Population: numbers, age distribution, life expectancy, household size, literacy
o GDP/capita, Gini, HDI, PPP, unemployment
• Type of economic system (market allocation, command, mixed)
• Government’s fiscal and monetary policies
• Degree of protectionism/liberalism
• Currency and exchange rate changes
• Uncertainty in the market, inflation

38
Q

micro-level factors affecting buyers

A

• Product Saturation Level
• Product demand curve
• Price of related products
o Complements and substitutes, Cost of switching
• Personal/HH Disposable Income
• Tastes or preferences
• Consumer expectations about future prices, income and availability
o Postponement of consumption, demand timing
• Nature of the product
o Number of uses, Luxury vs necessity

39
Q

Balance of Trade

A

• Record of all economic transactions between the residents of a country and the rest of the world
o Current account -record of all recurring trade in merchandise and services, and humanitarian aid
 trade deficit -negative current account
 trade surplus -positive current account
o Capital account -record of all long-term direct investment, portfolio investment, and capital flows

40
Q

Impact on Marketing: Impact of Trade Deficit

A 
•	Positives & Negatives 
o	Loss of jobs
o	Currency value
o	Inflation 
o	Interest rates
o	Foreign Direct Investment
o	Cost of goods & services
41
Q

Exchange Rates

A
  • More than 150 currencies are in use worldwide.
  • Exchange rate: Price of one currency in terms of another
  • Hard & Soft currencies
  • Float: free/clean vs managed vs fixed
42
Q

Transaction risk

A
  • the exchange rate risk associated with the time delay between entering into a contract and settling it.
  • The greater the time differential between the entrance and settlement of the contract, the greater the transaction risk, because there is more time for the two exchange rates to fluctuate
43
Q

Translation risk

A

• The currency risk that results when a firm translates financial statements denominated in a foreign currency into the functional currency of the parent firm.
o Assets
o Sales
o Profits

44
Q

Purchasing Power Parity, importance to the global marketer

A

• an economic theory that compares different countries’ currencies through a market “basket of goods” approach. According to this concept, two currencies are in equilibrium or at par when a market basket of goods (taking into account the exchange rate) is priced the same in both countries.
o Requires a wide range of goods and services (1,000+)
o Relatively stable over time.
o Includes nontraded goods and services
o some accounts of GDP are adjusted for relative purchasing power parity or PPP

45
Q

WTO

A
  • Umbrella organization that oversees global trade
  • Formed Jan. 1, 1995 to mediate trade disputes and provide a forum for trade-related negotiations among members
  • Members agree to WTO policies promoting free trade
  • Has enforcement power and can impose sanctions
46
Q

How do PTAs work

A
  • Many countries seek to lower barriers to trade within their regions
  • P T A s give partners special treatment and may discriminate against others
  • Over 300 P T A s have been notified to the W T O
47
Q

what is culture and why is it important to marketing

A
  • Ways of living, built up by a group of human beings, that are transmitted from one generation to another
  • Since culture shapes values, beliefs and attitudes and these guide behavior, marketers need to understand culture in order to understand values, beliefs and attitudes, and the consumer’s consequent behaviors, including decisions about acquisition and disposal of products
48
Q

Attitudes

A

learned tendency to respond in a consistent way to a given object or entity

49
Q

Belief

A

an organized pattern of knowledge that an individual holds to be true about the world

50
Q

Value

A

enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct

51
Q

Hofstede’s cultural dimensions

A
  • Power Distance
  • Individualism versus Collectivism
  • Masculinity versus femininity
  • Uncertainty Avoidance
  • Long-term Orientation
52
Q

Self-Reference Criterion

A

• Unconscious reference to one’s own cultural values; creates cultural myopia
• Lee’s four-step analysis (designed to avoid Self-Reference Criterion)
1 Define problem in terms of executive’s home cultural traits, habits, or norms
2 Define the problem in terms of foreign cultural traits, habits, or norms
3 Isolate the personal biases relating to the problem; determine if or how they complicate the problem
4 Redefine problem without the self-reference criterion influence in search for the optimum solution

53
Q

Culture & Diffusion of Innovation

A

• The typical diffusion of innovation that we are used to is the normal curve over the product life cycle, but this changes as culture impacts it. The curve may shift over so that it is unevenly heavy to one side

  • Product Characteristics
    • Relative advantage
    • Compatibility
    • Complexity
    • Trialability
    • Observability
  • Personal Influences
    • Cosmopolitanism
    • Mobility
    • Proportion of working women
54
Q

Culture’s impact on consumer behavior

A

• What to buy, who buys, how it is bought, when it is bought, new product diffusion
• Each person has implicit cultural knowledge and explicit personal knowledge
o People use cultural knowledge when making quick judgments
o People use personal knowledge when making deliberate, thoughtful judgments

55
Q

Culture and B2B Marketing

A

• What an organization buys is influenced by their industry and the level of economic development of their marketplace.
• How they buy is influenced by the same forces as individual consumers, but also conditioned by the organizational culture in which they operate.
o The organizational culture also reflects company policies and ways of making decisions.

56
Q

Culture and Negotiation

A

• The process of negotiation in most markets differs from that in the United States.
• Be aware that cultural differences in values and communication styles can cause serious misunderstandings between business partners.
o language
o nonverbal behavior
o values
o patterns of thought

57
Q

Culture and Management

A

• General culture defines a set of acceptable and unacceptable behaviors
• Acceptable behavior in the business firm is usually a reflection of acceptable behavior in society
The managers successful in one culture will often NOT be successful in very different cultures

58
Q

political motivations of host & home countries

A
  • National sovereignty: Great Britain leaving the EU; wanted to set their own rules
  • National security
  • National prosperity: creating jobs = favorable treatment by gov
  • National prestige: what does the gov think about the company (at the gut level) – will it make us look dependent?
  • Cultural identity: France has regulation on movies and protecting it
  • Special interest groups: farmers in France activists about keeping foreigners out; need to understand these groups to be accepted
59
Q

how governments can influence trade and marketing

A 
•	Protectionism
o	Tariffs, taxes, quotas
o	Subsidies
o	Valuation of imports and exports 
o	Local content requirements
o	Administrative trade policies (bureaucratic hurdles)
o	Government participation in the markets
•	Monetary and fiscal policies
•	Structural adjustments
•	Internal commerce restrictions
o	Product standards, packaging, labeling
o	Distribution requirements
o	Food and drug regulations & testing
o	Price controls
o	Promotional restrictions 
o	Competitive practices 
o	Management, employment & operating conditions
60
Q

how a country’s level of economic development influences possible actions

A

• Developing
o Concerns: political freedom, autonomy and independence, sovereignty
o Actions: intervene directly in MNC operations in host market
• Developed
o Concerns: employment, inflation, income distribution, health, environment
o Actions: establish/strengthen existing companies to challenge incoming MNCs

61
Q

Foreign Corrupt Practices Act

A

• prohibits the payment of bribes by U.S. companies and the employees of those companies
o Covers bribes to high government officials
o Covers anything of value
o Covers intent as well as actual payments
o Contains record keeping provisions
• Exceptions for grease payments or facilitating payments, if such payments are permitted by the local government

62
Q

4 types of risk and factors that affect each type of risk

A
  1. Commercial Risk
    a. Weak Partner
    b. Operational Problems
    c. Timing of entry
    d. Competitive intensity
    e. Poor execution of strategy
  2. Currency/Financial Risk
    a. Currency exposure
    b. Asset valuation
    c. Foreign taxation
    d. Inflationary and transfer pricing
    e. Global sourcing
  3. Political and Legal Risk
    a. Social/political unrest and instability
    b. Economic mismanagement; inflation
    c. Distribution of income; size of middle class
    d. Government intervention, bureaucracy, red tape
    e. Market access; barriers; profit repatriation
    f. Legal safeguards for intellectual property right
  4. Cross-Cultural Risk
    a. Cultural distance
    b. Negotiation patterns
    c. Decision-making styles
    d. Ethical practices
63
Q

risk reduction techniques

A
  • Chose local partners (joint ventures)
  • Invaluable status (major investment)
  • Local borrowing
  • vertical integration
  • diversifying sourcing
  • Minimize (fixed) assets at risk (licensing)
  • Buy risk insurance
64
Q

Formal market research process

A
  1. information requirement
  2. Problem definition & SRC
  3. Unit of analysis
  4. Secondary data availability
  5. Cost-benefit analysis of primary research
  6. Research design: problems particular to host mkt research
  7. Data analysis particular to host mkt research’
  8. Interpretation and presentation
65
Q

product/market growth matrix

A

Compares product orientation to market orientation; the existing products and new products & the existing markets and new markets

66
Q

Global marketing

A

focuses its resources and competencies on global market opportunities and threats; the scope is outside of its home country

67
Q

The Firm’s Value Chain

A

An individual firm’s value chain is the “internalized” sequence of operations undertaken by the firm to best leverage its resources

  • Maintaining control of critical activities
  • identifying sources of competitive advantage
  • identify areas of possible cost reduction
68
Q

The Link Between Value Chain and Customer Perceived Value

A

Create value for customers by improving benefits or reducing price
- Improve the product
- Find new distribution channels
- Create better communications
- Cut monetary and non-monetary costs and prices
Value = Benefits/Price

69
Q

Competitive advantage

A

an advantage over competitors gained by offering consumers greater value

  • Usually measured by above-average profits
  • Embedded in the firm’s value chain
70
Q

Industry Globalization Drivers

A
  • Market Drivers
  • Competitive Drivers
  • Cost Drivers
  • Government Drivers
  • Technological Drivers
71
Q

Market Drivers

A

o Common customer needs
o Global customers
o Global channels
o Transferable marketing

72
Q

Competitive Drivers

A

o Global competition

o Global distribution

73
Q

Cost Drivers

A

o Economies of scale
o Economies of scope
o Sourcing advantages

74
Q

Technological Drivers

A

o Product/Production technology
o Telecommunications
o Internet

75
Q

Technological Drivers

A

o Product/Production technology
o Telecommunications
o Internet

76
Q

3 environments of global marketing

A
  1. Cultural: all learned ideas, norms and values that are transmitted to an individual living within a society through shared experience
  2. Economic/Financial: world trade, macroeconomic and microeconomic environments of home and host countries
  3. Political/Legal: the host governments, the home government, the transnational agencies, REAs, regulations or laws that affect global marketing business transactions
77
Q

Important Business Issues

A

Jurisdiction (of contracts), intellectual property, antitrust issues, licensing and trade secrets, bribery and corruption (FCPA, Corruption Rankings)

78
Q

Formal market research process

A
  1. information requirement
  2. Problem definition & SRC
  3. Unit of analysis
  4. Secondary data availability
  5. Cost-benefit analysis of primary research
  6. Research design: problems particular to host mkt research
  7. Data analysis particular to host mkt research’
  8. Interpretation and presentation

MKTG 440 (3 decks)

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