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global marketing sem 1 > lecture 4 - deciding which markets to enter > Flashcards

lecture 4 - deciding which markets to enter Flashcards

1
Q

what varibles within which company conducts business globally need to take into account

A

most uncontrollable variables
- isolating and priotising the most important variables
- reducing the risks of failure
- an ability to interpret the environmental factors and take appropraite actions is key to success

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2
Q

analysis of international market environment

A
  • reduction of risk
  • aid to decision making
  • market risk assessment
  • choice of market and marketing mix
  • priotises variables
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3
Q

factors within global marketing environment

A
  • phyiscal environment - outershell - no control
  • the macro environment - business have little control
  • the immediate environment - customers and suppliers
  • organisation
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4
Q

immediate environment; typical key stakeholders of a company

A
  • stakeholder; any constituent body having in/direct interest in and impact on an organisation
  • suppliers; providers of goods and services used by a company to add value
  • distributors; logistical and institutional providers of transport, warehousing and other services
  • partners; providers of different service eg financial, research
  • communities; associted with the company, interest groups and govt (less controllable)
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5
Q

models of macro marketing environmental analysis

A

PEST - politcal,eco,social,tech
SLEPT - social,legal,eco,political,tech

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6
Q

global political environment

analysis of the effects of political globalisation

A

any inter/national political factors that may affect organisations business operations;
1. HOME country political environment
2. HOST country political environment
+ general international political and regulatory environment

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7
Q

home country
political environment
main influences

A
  1. export promotion and facilitation - to increase motivation for costly and risky international actitvites eg govt subsidies, chamber of commerce support, 2020 export drive
  2. financial support - eg export credit insurance this is valuable- you have to take thatrisk eg if sending goods abroad then waiting for money to come in - use letter of credit eg
  3. information provision services - govt as the main sources of basic marketing info about other countries great.gov.uk(dept. of trade)
  4. state trading - former communist countries eg cuba, china
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8
Q

host country

politcal environement

marketers have to work within the politcal framework of the host country

A
  1. attitude towards the role of govt
  2. political stability and risk
  3. actions of the host country
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9
Q

understanding of the role of govt

A

participatory (supreme political authority) or regulatory (facilitating) role
- dependant of economic development and political and economic system
- transition from participartory to regulatory role is supported through structural adjustments programmes of the world bank
- road to economic prosperity (eu accession)

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10
Q

politico - economic system

A
  • the west is used to open democratic govt with input from/ to business
  • other systems eg centrally planned/ authoritarian have less opportunity for input
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11
Q

economic freedom; washingtton DC heritage foundation

A
  • ranking of economic freedom among countries ; free, mostly free, moderately free, mostly unfree, repressed
  • variables considered include;
  • trade policy
  • taxation policy
  • capitial flow and foriegn investment
  • banking policy
  • wage and price controls
  • property rights
  • black market
  • high correlation between degree of economic freedom and extent to which a nations economy is market orientated
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12
Q

political stability and risk

A
  • personal risk- Habis Corpus - life and liberty, business executives are murdered or imprisioned some in syria. managing this risk is your first duty
  • ownership risk - property, both personal and corporate, can be confiscated, this risk significantly reduces the viability of a project
  • operating risk - political activites that interfere with business eg arbitrary laws consider public affairs as a skill
  • transfer risk - transferring profit/ capital - this generally will be managed by your treeasury team within financa at head office
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13
Q

3 step process for assessing the political risk

A
  • determine relevant issues
  • determine political events (chances of occurrence)
  • determine impacts and responses
    an example BERI - business environment risk index
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14
Q

what is our moral compass
social license

A
  • license metaphorical concept
  • indicates companies cant operate sustainability without the support of society
  • that lisence depends on trust, this is what makes people buy our products, apply for our vacancies, invest in our shares or accept our presense in their communities
  • use maslow needs - operate in the country because the real people approve of you
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15
Q

in order to understand political risk, managers use relevant reeports and publications

A
  • some examples of political risk
  • civil war- politically-motivatd violence and social unrest
  • transparanceey (societal conflict involving demonstrations and strikes eg g20/ capitalism
  • corruption, nepotism- missue of public power for private benefit, transparency international - corruption perceptions index
  • crime eg intellctual property therf
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16
Q

when poltical risk high country find it difficult

A

when perceived politcal risk is high a country will have difficulties attracting FDI

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17
Q

what do companies do to protect against political risk

A

companies can buy insurance to protect against poltical risk - the us international development fiance corporattion

18
Q

potential actions of the host country

A
  • price controls - controlling cost of living eg food petrol
  • tax control - taxing of FDIs as a source of funds in developing countries
  • labour restrictions - eg insisting on representation in boards of directors
  • govt (party) change - suspension of agreements, negotiations
  • nationalisation - seizure of foriegn property (domestication-gradual version)
19
Q

aims of trade barriers

A
  • protect domestic producers-achieving price advantage
  • to generate rev for govt - typcial for developing countires
20
Q

types of trade barriers

A

tarrifs
- specific - product related eg duties on dairy products based on weight of lactic matter
- ad valoreem - %of value (the import price) eg eu car tariff of 10% is addedd to the import price third countires eg japan
- discriminatory - country related eg 22% tax prevent cheaper chinese and american truck models from entering the marketplace

21
Q

types of trade barriers

A

non tariff barriers
- quotas - resticting amount of export/import of goods
- embargo - banning trade of product with a particular country due to political reasons eg russia - EU
- administrative delays - eg by requiring license that take long time to obtain
- local content requirments - specified amount supplied by domestic producers eg 45% in the eu

22
Q

international political environment

A
  • political relationships of two or more countries (bi/multi-lateral agreements)
  • international company becomes involved in these relationships, regardless its idea to stay neutral
23
Q

international political environment

influential factors

A
  • memberships in regional blocks -legal system eg EU phytosanitary law
  • membership in international organisations eg WTO, NATO
  • international agreements eg about trasnportation, communication, patents
24
Q

the EU single market

A
  • eu is a customs union- member states removed customs barriers between themselves and introduced common customs policy towards other countries
  • the Maastricht treaty prohibts quotas and ‘measures having equivalent effect’ on intra-eu trade
  • customs duties; member states cant charge dutoes on goods crossing a border, both goods produced within the EU and those produced outside - once a good has been imported into eu for thrid party country and the appropriate customs duty paid it be considered to be in fre circulation between member states
  • on its accession to EEC 1973 the uk negiotated quotas on new zeland butter and lamb - to help its traditional supplier
25
Q

an aspect of political globalisation

international legal environment
legal environment

A
  1. local domestic law- influences eexports/ import, advertising
  2. international law - on copyrights, patent, trademarks, bribery, trade secrets
  • differences in conflict resolution, dispute settlement - UNCITRAL (un conference on international law)
  • EU tends to create common legal system by harmonising local laws
  • new challenges ICT; data protection, intellectual property rights
26
Q
  1. local domestic law; legal systems of the world
A

civil vs common law

27
Q

civil law

A
  • pre-eminence of written law
  • laws moree encompassing and precise
  • judges play a far more important role and juries play less
  • continental european countires and their former colonies + indonesia, russia, china, vietnam
28
Q

common law

A
  • pre-eminence of social norms ie customary practice; what society considers right and acceptable
  • lawyers research previous similar case decisions in order to argue their own cases
  • law passed frequently in the courtroom, where a citizens jury determines the outcome
  • UK, USA, canada less quebec and other states previously part of the british empire
29
Q

example of civil vs common law on trademark protection

A
  • civil law; first to register owns the trademark
  • common law; first who had used the trademark
30
Q

business practices and legal systems
businesees face a myriad of legal issues everyday;

A
  • many countries have higher taxes on cars with large engines or with high emission; diesel tax
  • in countires tthat follow islamic law its illegal to charge interest; in indonesia visa and mastercard receive collateral assets such as jewellery to sell instead of charging interest
  • in many countires eg eu members and candidates untruthful, confusing and misleading advertising is banned
31
Q

examples of influences of different domestic laws on tobacco industry

A
  • smoking bans in public places in uk and most of eu
  • china ; state owned manufacturer enjoys a virtual monopoly - state tobacco monpoly administration and china national tobacco corportation - responsible for tobacco regulation and manufacturing
  • regulations related to cigarette packaging
32
Q

international law; international intellctual property example

A
  • software piracy problems; 37% of software installed on personal computers is unlicensed (business software alliance 2018)
  • 70k jobs a year are lost in us due to music piracy
  • annual global rev losses from digital piracy 40-97.1bill in movie industry
  • illegal downloading of copyrighted materials takes up 24% of the global bandwidth
33
Q

intellectual property can be protected by

A
  • patents
  • copyrights
  • trademarks
  • trade secrets
34
Q

patent protection

A
  • legal monopoly on the tech or process for usually 15-21 years
35
Q

patent protection
two contrasting principles

A
  • first - to -invent; light bulb invnted by thomas edison 1870
  • first -to-file ; light bulb invented by joseph swan 1878
36
Q

patent protection
marketing implications

A
  • use companies must ensure that their inventions are protected abroad through formal patent applications
  • foreign companies operating in the US must be extremely careful in introducing any technologies that have been invented in US
37
Q

copyright protection

A
  • protection of orginal intellectual works
  • the exculsive right of owner to reproduce, distribtue, perform or display their work
  • lasts for 50years in eu and japan compared with 95years in US
  • can be brought and sold
  • computer programmes are also considered a literacy work and are protected by copyright
38
Q

trademarks

A
  • symbol that identifies the source of a product and service
  • use of confusingle similar mark is banned by law
  • in the us regstration is not mandatory but highly recommended
  • in most other countries trademark registration is mandatory
39
Q

trade secrets

A
  • protection is sought without registration
  • it can still be protected in the courts if the company can prove it took all precautions to protect the idea
  • eg - coke recipe
    -paypal vs google 2011
40
Q

legislation in eu

A
  • harmonization of the legal systems of member states
  • example of regulations that affect doing business in the eu;
  • eu directive 2006/114/EC (12/12/2006) concering misleading and comparative advertising ; against deceptive info and misleading comparisons
  • eu consumer rights directive; increase price transparency and provide greater rights to consumers over return, refund etc
41
Q

additonal aspect of political globalisation

A

influence of pressure groups

global marketing sem 1 (6 decks)

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