marketing ch.7 Flashcards
how do imports/exports affect eachother
more exports–>more GDP–> more imports
Countertrade
using barter rather than money for global sales. 15-20% of world uses
US leader in what measure
GDP
Balance of Trade
the difference between monetary value of exports and imports
Deficit
imports>exports
4 elements of Competitive Advantage
factor conditiosn, demand conditions, related and supporting industries, company strategy structure and rivalry
Factor Conditions
the ability to turn natural resources/edu/infurstructure into competitive advantage
Demand Conditions
the number and sophistication of domestic customer. Ex. Japan demand high quality
Related and Supporting industries
need world class suppliers to accelerate innovation
Company Strategy, structure and rivalry
conditions governing business, intensity of competition domestically.
Economic Espionage Act (1996)
theft of trade secrets by foreign entities a federal crime in US
4 trends influencing global market
Trend 1: Gradual decline of economic protectionism by individual countries.
Trend 2: Formal economic integration and free trade among nations.
Trend 3: Global competition among global companies for global customers.
Trend 4: Emergence of a networked global market space.
Protectionism
shielding industries within a country’s economy through tariffs/quotas
Tariffs
government tax on goods/services entering a country
Quotas
restriction on amount of product allowed to enter/leave
World Trade Organization
sets rules governing trade between members
EU
European Union. Eliminated barriers to free flow of goods. Adopt Euro. Universal standards/regulations across Europe
NAFTA
North American Free Trade Agreement. Limit trade barriers between Canada Mexico US
Asian Free Trade Agreements
less formal attempt at EU and NAFTA
Strategic Alliances
agreements among firms to cooperate for the purpose of achieving common goals
Three types of global companies
international multinational transnational
International
Engages in trade and marketing in diff countries as extension of marketing strategy at home. Same product, Same marketing
Multinational
Markets to each part of the world differently. Different Product variations, brand names and ad programs in different countries. (Multidomestic marketing strategy)
Multidomestic marketing strategy
they have different product variations, brand names and ad programs in different countries
Transnational
views world as one giant market. Capitalizes on cultural similarities
uses global marketing strategy
markets global brand
Global Marketing Strategy
standardizing marketing activities where there are cultural similarities. Adapting where the differ
Global Brand
marketed under same name in multiple countries using same/coordinating marketing programs
Cross cultural Analyisis
study of similarities and differences among consumers in nations
Values
personally or socially preferable modes of conduct or states of existence. (ex. McDonalds dosnt sell beef in india, cow sacred)
Customs
what is considered normal and expected about the way people do things in a specific country
Semiotics
study of symbols
Back translation
translated word/phrase is re translated by a different interpreter.
Ethnocentricity
belief that one’s culture is superior to another
Consumer Ethnocentrism
tendency to believe that it is inappropriate/immoral to purchase foreign made products
Developed Economy
Mixed economies. Private enterprises dominate with substantial public sector
Developing Economy
in the process of moving from agricultural to industrial.
Two groups:
those who made the move
those who remain locked in preindustrial
Bottom of the pyramid
largest, poorest socioeconomic group
Economic Infastructure
a country’s communications transportation, financial and distribution systems
Microfinance
practice of offering small, collateral free loans to individuals who otherwise couldnt buy product
Currency exhchange rate
the price of one country’s currency in terms of another currency
Global Market Entry Strategies (4)
Exporting, Licensing, Joint Venture, Direct Investment
Exporting as entry strategy
Producing good in one country, selling to antoher
allows least number of changes
indirect/direct
Indirect exporting
firm sells products internationally through intermediary. Least Commitment, least profit
Direct Exporting
sells domesically produced good without intermediaries
Licensing as entry strategy
company offer right to trademark/patent/trademark in return for a royalty/fee
low risk, capital free…less profit and control
Franchising , Contract Manufacturing and Contract Assembly
Contract Manufacturing
US company contracts a foreignfirm to manufacture acocrding to spec
Contract Assembly
Firm assembles parts that have been shipped
Joint Venture as entry strategy
when a foreign firm and local firm invest together to create business. Share ownership.control/profit
Direct Investment as entry strategy
biggest commitment- firm investing in and owning a foreign subsidiary/division
Product Extension
Selling same product, new countries
Product Adaption
changing product to sell it to new country
Product Invention
Companies create new product for new countries
Product Adaptation strategy-
adpating promotion messages
communication adaptation strategy
modifying both products and promotion
Dumping
When a firm sells a product in a foregin country below its domestic price or below cost. Can be illegal
Grey Market
when products are sold through unauthorized channels of distribution.
