MOD 7 - CH 8 Flashcards
What are the four sets of criteria necessary to assess a country’s market?
Economic analysis, infrastructure and technological analysis, governmental actions or inactions, and sociocultural analysis.
What are the key metrics used in economic analysis when assessing a country market?
General economic environment, market size and population growth rate, and real income.
What is Gross Domestic Product (GDP) and how is it used in market assessments?
GDP is the market value of the goods and services produced by a country in a year. It helps gauge the size and market potential of an economy.
What does Gross National Income (GNI) consist of?
GNI is the sum of GDP plus net income earned from investments abroad, minus payments made to nonresidents contributing to the domestic economy.
What is Purchasing Power Parity (PPP) and how is it relevant to market assessments?
PPP is the theory that exchange rates should adjust so that a product purchased in one country costs the same in another country when expressed in the same currency. It helps assess the relative economic buying power among nations.
What is the bottom of the pyramid in terms of market analysis?
It refers to economic settings where consumers earn very low wages but still require consumer goods, requiring price adjustments to make products affordable.
What factors must be considered when evaluating a country’s infrastructure?
Transportation systems, distribution channels, communication systems, and commercial infrastructure (e.g., legal, banking, and regulatory systems).
What is a tariff and how does it affect market entry?
A tariff is a tax levied on imported goods. It can make foreign products more expensive and less competitive compared to domestic products.
How do quotas affect international trade?
Quotas limit the amount of a product that may be imported into a country during a specified period, potentially reducing foreign competition.
What are exchange controls and how can they affect global business?
Exchange control is the regulation of a country’s currency exchange rates. It can influence how easily firms can convert currencies and conduct business internationally.
Why is culture a critical component in assessing a country’s market potential?
Understanding cultural differences (values, behaviors, customs) is essential for adapting marketing strategies and ensuring successful product acceptance.
What are Hofstede’s cultural dimensions and how are they used in market analysis?
Hofstede’s cultural dimensions include factors such as power distance, individualism, masculinity, uncertainty avoidance, time orientation, and indulgence. They help businesses understand cultural preferences and behaviors.
What are the BRIC countries?
The BRIC countries are Brazil, Russia, India, and China, which are seen as emerging global markets with significant growth potential.
Why are the BRIC countries important for global marketing?
The BRIC countries represent large and rapidly growing markets with expanding middle classes, improved infrastructure, and increasing consumer demand, making them key opportunities for businesses.
What is Brazil’s current economic status and how has it changed?
Brazil is the world’s ninth-largest economy, having experienced significant growth in the early 2000s. While it faced a recession around 2015, its government has implemented reforms to stimulate economic recovery.
What challenges does Russia face in terms of marketing opportunities?
Russia faces challenges such as a declining population due to low birth rates, widespread corruption, and international sanctions that have affected its economy, despite its growing middle class and consumer market.
What is the significance of China’s e-commerce market?
China leads the world in e-commerce, accounting for 55.8% of global online retail sales, which makes it a crucial market for global businesses to consider.
What challenges does China face despite its rapid economic growth?
China faces challenges like unequal economic distribution, a declining birthrate due to its one-child policy, and an aging population, which impacts consumer behavior and market growth.
What are the demographic trends impacting China’s future market?
China’s population growth is expected to peak by 2029, with a significant aging population, which will affect demand for products and services in the future.
What are the benefits of entering BRIC countries for foreign investors?
Foreign investors can benefit from the growing consumer markets, increasing middle-class populations, and expanding retail and e-commerce sectors in the BRIC countries.
What factors make Russia’s consumer market attractive despite challenges?
Despite political and economic challenges, Russia’s growing middle class, educated population, and demand for foreign products make it an appealing market for many global businesses.
How have the BRIC countries transformed since the 1990s?
Since the 1990s, these countries have undergone significant economic, political, and social changes, leading to rapid growth, expanding consumer markets, and increasing importance in global trade.
What is the first step a firm takes before choosing a global market entry strategy?
A firm first conducts an internal assessment of its capabilities, including access to capital, markets served, manufacturing capacity, proprietary assets, and management commitment.
What is exporting in the context of market entry?
Exporting is when a firm produces goods in one country and sells them in another, with low financial risk and limited returns, but without investment in local infrastructure.
