Exam 2 - Chapter 9 Flashcards
International Marketing
developing and performing marketing activities across national boundaries
ex: growth opportunities; internet
Born Globals
firms that are international from their inception
ex: internet based companies
6 Environmental Forces in Global Markets
a. sociocultural
b. economic
c. political/legal/regulatory
d. ethical/social responsibility
e. competitive
f. technological
7 Sociocultural Forces in Global Markets
family religion education health care recreation language country of origin
Cultural Similarity Rule
the closer your culture is to the culture of the country you want to export to , the faster the product is generally accepted
4 Economic Forces in Global Markets
a. international trade systems
b. economic stability/instability
c. trade barriers
d. economic disparities between nations
Gross Domestic Product (GDP)
the market value of a nation’s total output of goods and services for a given period
an overall measure of economic standing
Import Taiff
a duty (tax) levied by a nation on goods bought outside its borders and brought into the country
Quota
a limit on the amount of goods an importing country will accept for certain product categories in a specific period of time
Embargo
a government’s suspension of trade in a particular product or with a given country
can inhibit trade
Balance of Trade
the difference in value between a nation’s exports and its imports
Ethical/Social Responsibility Forces
a. accepted business practices vary from country to country
b. bribery
c. intellectual property protection
Competitive Forces
staple of global marketplace
firms define their competitors when they establish target markets on a global basis
each country has unique competitive aspects
technology and interconnectedness are key factors
ex: global consumer
Technological Forces
make international marketing easier, faster, and more affordable
vary by country
Regional Trade Alliances
create opportunities and impose constraints on international trade
ex: EU or NAFTA
European Union (EU)
an alliance that promotes trade among its member countries in Europe
World Trade Organization
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 (founded in 1995)
Dumping
selling products at unfairly low prices (below cost)
Modes of Entry into International Markets
a. Stage 1 (no regular export activities – focus is domestic)
b. Stage 2 (Export via independent representatives – agents)
c. Stage 3 (establishment of one or more sales subsidiaries internationally)
d. Stage 4 (establishment of international production/ manufacturing facilities)
Trading Company
a company that links buyers and sellers in different countries
does not own assets related to manufacturing
acts like a wholesaler - purchases products in one country for a low price and sells them to buyers in another country
Licensing
an alternative to direct investment that requires a licensee to pay commissions or royalties on sales or supplies used in manufacturing
ex: publishing and printing and distributing Harry Potter books
Franchising
a form of licensing in which a franchiser, in exchange for a financial commitment, grants a franchisee the right to market its precuts in accordance with the franchiser’s standards
ex: opening a Jimmy Johns or a Subway
Benefits of International Franchising
a. minimizes risks
b. smaller initial capital investment
c. fairly consistent revenue stream
d. retains control of name;global penetration
e. ensure standard of conduct
Outsourcing
the practice of contracting noncore operations with an organization that specializes in that operation anywhere in the world
ex: Apple parts
Offshoring
the practice of moving a business process that was done domestically at the local factory to a foreign country (either a wholly owned subsidiary or a subcontractor)
Offshore Outsourcing
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
Joint Venture
a partnership between a domestic firm and a foreign firm or government
ex: Aramco – began as joint venture with Standard Oil and Saudi Gov.
Strategic Alliances
a parnership that is formed to create a competitive advantage on a worldwide basis
ex: airlines working together
Direct Ownership
a situation in which a company owns subsidiaries or other facilities overseas
ex: Target’s large losses
Multination Enterprise
Multination Corporation or MNC
a firm that has operations or subsidiaries in many countries
ex: BP or Walmart
Export Departments
a subunit of the marketing department focusing on international development/ maketing
International Divisions
centralizes all of the responsibility and communication related to international operations
Internationally Integrated Structures (global)
firms with internationally integrated structures are most likely to engage in direct ownership internationally
Product Division Structure
the form used by most multinational enterprises
good for firms that are diversified yet driven by domestic operations
each unit is self-contained-product marketed/branded by itself
ex: Avon
Geographic Area Structure
good for firms with low diversification, divides the world into logistical areas based on operations and customers’ characteristics
ex: Kimberly Clark
Global Matrix Structure
designed to achieve global integration, cost, efficiencies, knowledge transfers, and local responsiveness
**uncommon – difficult to manage
Customization
adapting marketing strategy and marketing mixes according to cultural, regional, and national differences
Globalization
the development of marketing strategies that treat the entire world (or its major regions) as a single entity
ex: Coke or Ford
