Lecture 1 - Defining Global Markets Flashcards
What are the formal institutions in international business?
Economic
Political
Legal
What are the informal institutions in international business?
Culture
Religion
Languages
Explain a local market
Low barriers to entry
Homogeneity among formal and informal institutions
Governance through normative behaviour, and through consistent legal environment
What is an example of normative behaviour?
When someone overprices products, and someone shouts loudly that they are doing it
Explain a global market
High barriers to entry
Heterogeneity among formal and informal instutions
Lower normative governance (different norms exist)
Higher legal uncertainty as different legal frameworks cover the geographic market
What do the terms ‘subdivide’ and ‘improve’ refer to?
The process of specialisation
What are the 2 market options?
1) Choose a country market
2) Choose a demographic market
At what level do we define culture?
At the level of group characteristics that are relevant to us
e.g. urban multicultural metropolis, national language, trading area
What are the layers of culture?
From centre to outside:
Individual, Company culture, Industry culture, National culture
What are sub-cultures?
market segments that may be concentrated in various locations
either they provide supply side of customer side opportunities
What does Florida’s (2002) Bohemian Index show?
that segments do not exist in isolation but in and among other segments
What do subcultures offer?
the prospect of homegeneity in a geographic area
How do multiculturalists culturally assimilate?
Sensitivity to ones own and other cultures
Cultural awareness and curiosity
Cultural empathy
Multilingual skills
Contextual understanding and sensitivity
Semantic awareness
Ability to switch among cultural frames of reference and communication modes
Howhas L’Oreal managed its global-local tensions?
Deploying professionals with multicultural backgrounds in new product development, the companys most critical source of competitive advantage
they do this to reduce friction in the system and facilitate organisational performance
Describe the dematerialisation of marketing in terms of goods and services?
Goods used to rule and still do in local markets, as you get what you see
In supermarkets, those goods come with a lot of service, adding hedonistic advantages for the consumer
The service proposition is a key differentiator and moves the focus away from the physical goods
Explain the difference between goods and services
it is not always easy to identify and can be considered as a continuum
Explain Vargo and Lusch (2004) ‘service dominant logic’
they suggest thst the customer is value co creator rather than a passive recipient
