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X International Marketing Tentamen > Part II > Flashcards

Part II Flashcards

1
Q

Which 3 political and legal environments are there?

A
  • the home country environment
  • the host country environment
  • the general environment
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2
Q

How do you define the home country’s environment?

A

the environment of the country the company originates from

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3
Q

What aim do promotional activities promoted by governmental organization have?

A

Direct government attempts to make a country’s products more competitive in the world market

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4
Q

Which internal barriers do government export promotion programs and programs for global marketing activities deal with? (3)

A
  • lack of motivation
  • lack of adequate information
  • operational/resource-based limitations
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5
Q

How is the home country’s government involved with financial activities?

A

Through the membership of international financial organizations such as IMF and the World Bank, the national government can assume its role as an international banker

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6
Q

How is the home country’s government involved with information services?

A

For smaller firms that cannot do own research or hire outside researchers national government is the major source of basic marketing information

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7
Q

Which national government activities stimulate export? (4)

A
  • Trade development offices
  • Government-sponsored trade fairs and exhibitions
  • Sponsoring trade missions of business people who go abroad for the puprose of making sales
  • Operating permanent trade centers in foreign market ares
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8
Q

How do non-governmental organizations play a role in the promotion of global marketing? (6)

A
  • Industry and trade associations, national, regional and sectoral industry associations
  • Chambers of commerce
  • Other organizations concerned with trade promotion
  • Export service organization
  • Banks
  • Transport and trading companies
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9
Q

What is state trading?

A

Many former communist countries are now allowing some private trading activities, either through joint ventures or as a result of pivatization of state-owned enterprises

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10
Q

What is the host country environment?

A

the environment of the country the business wants to expand to

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11
Q

What are the three major types of political risks for the host country environment?

A
  • Ownership risk
  • Operating risk
  • Transfer risk
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12
Q

What does ownership risk expose?

A

property and life

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13
Q

What does operating risk refer to?

A

the interference with the ongoing operations of a firm

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14
Q

When is transfer risk mainly encountered?

A

when companies want to transfer capital between countries

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15
Q

What are import restrictions?

A

selective restrictions on the important materials, machines, and parts

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16
Q

What are local-content laws?

A

countries require a portion of a product sold to have local content

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17
Q

What are exchange controls?

A

shortage of foreign exchange /controls to conserve the supply

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18
Q

What is market control?

A

controls to prevent foreign companies from competing in certain markets

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19
Q

What is price control?

A

price control over products that command considerable public interest

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20
Q

What are tax controls used for?

A

used as a means of controlling foreign investments

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21
Q

What are labor restrictions?

A

When labor unions persuade the government to pass laws that support labor for nationals

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22
Q

What can be the effect of a change of government on businesses?

A

This new government may not continue the agreement of previous deals

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23
Q

What is domestication?

A

Continual restrictions placed on foreign firms gradually over time

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24
Q

What are trade barriers?

A

Trade laws (often tariffs) that favor local firms and discriminate against foreign ones

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25
Q

What are the two main reasons that countries levy tariffs?

A
  • To protect domestic producers

* To generate revenue

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26
Q

What are tariffs?

A

A tool used by governments to protect local companies from outside competition.

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27
Q

What are non-tariff barriers?

A

non-monetary barriers to foreign products

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28
Q

What are the 3 most common forms of tariffs?

A
  • specific
  • ad valorem
  • discriminatory
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29
Q

What are specific tariffs?

A

Charges imposed on a particular product by weight or volume, this is charged in local currency

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30
Q

What are ad valorem tariffs?

A

straight percentage of the value of the goods is charged

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31
Q

What are discriminatory tariffs?

A

tariffs charged against goods coming from a particular country

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32
Q

What are quotas?

A

A restriction on the amount (units or weight) of a good that can enter or leave a country during a certain period of time

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33
Q

What is an embargo?

A

A complete ban on trade on one or more products with a particular country

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34
Q

What is an administrative delay?

A

Regulatory controls or bureaucratic rules designed to impair the rapid flow of imports into a country

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35
Q

Why do countries impose import quotas? (2)

A
  • to protect domestic producers, having them maintain market share
  • force foreign countries to compete against each other for the limited amount of imports
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36
Q

Why do countries impose export quotas? (2)

A
  • maintain adequate supplies of products in the home country
  • limit supply on world markets
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37
Q

What are local-content requirements?

A

a law stipulating that a specified amount of a good or service be supplied by producers in the domestic market

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38
Q

What are the three steps of political risk analysis?

A
  1. Issues of relevance to the firm
  2. Potential political events
  3. Probable impacts and responses
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39
Q

What do you do in step 1 of the political risk analysis? (issues of relevance to the firm) (2)

A
  • Determine critical economic/business issues relevant to the firm
  • Assess the relative importance of these issues
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40
Q

What do you do in step 2 of the political risk analysis? (potential political events) (4)

A
  • Determine the relevant political events
  • Determine their probability of occurring
  • Determine the cause and effect relationships
  • Determine the government’s ability and willingness to respond
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41
Q

What do you do in step 3 of the political risk analysis? (probable impacts and responses) (3)

A
  • Determine the initial impact of probable scenarios
  • Determine possible responses to initial impacts
  • Determine initial and ultimate political risk
42
Q

What are the stakeholders of a company? (4)

A
  • Government
  • Customers
  • Employees
  • Local community
43
Q

What are the three types of economic development?

A

Primary
Secondary
Tertiary

44
Q

What is the Primary economic activity?

A

Activities concerned with agriculture and extractive processes

45
Q

What are the secondary economic activities?

A

Manufacturing activities

46
Q

What are the tertiary economic activities?

A

Activities based upon services

47
Q

What is devaluation?

A

International lowering of the value of a currency by the nation’s government, increase the price of imports

48
Q

What is revaluation?

A

International rising of the value of a currency by the nation’s government, reduce the price of imports

49
Q

What is the law of one price?

A

Stipulates that an identical product must have an identical price in all countries

50
Q

What does GNP stand for?

A

Gross National Product

51
Q

What is the GNP?

A

The value of all goods and services produced by the domestic country over a one year period including the income generated by the country’s international activities

52
Q

GNP per capita formula

A

GNP / population of country

53
Q

What does GDP stand for?

A

Gross domestic product

54
Q

What is the GDP?

A

The value of all goods and services produced by the domestic economy over a one-year period

55
Q

What does LDC stand for?

A

Less Developed Country

56
Q

What is are the characteristics of an LDC? (7)

A
  • Low GDP per capita
  • Limited amount of manufacturing activity
  • Poor infrastructure
  • Slow moving bureaucratic public sector
  • Heavily reliant on one product
  • Often have one trading partner
  • Reliance on agricultural crop or mining
57
Q

What does NIC stand for?

A

Newly Industrialized Countries

58
Q

What are the characteristics of a NIC? (3)

A
  • Countries with an emerging industrial base
  • A country that is capable of exporting
  • Infrastructure shows considerable development
59
Q

What are the characteristics of advanced industrialized countries? (4)

A
  • Considerable GDP per capita
  • Wide industrial base
  • Development in the service sector
  • Investment in infrastructure
60
Q

What is a free trade area?

A

All trade barriers among member countries of this area are removed here

61
Q

What is a customs union?

A

Free trade area but with a common trade policy to non-members

62
Q

What is a common market?

A

Customers union but factors of production are mobile among member states.

63
Q

What is an Economic Union?

A

Common Market, but with the integration of economic policies. Member states harmonize monetary policies, taxation, and government spending. A common currency is used by member states.

64
Q

Which countries are BRIC countries?

A

Brazil, Russia, India, China (and South Africa)

65
Q

What do you know about the BRIC countries? (3)

A
  • These countries have emerging markets and future growth is expected
  • These countries form 44% of the world’s population and 25% of the GDP
  • China is the country that is leading
66
Q

BRIC countries will face a challenge from? (3)

A
  • Slow-growing global economy
  • Reversal of investor risk appetite moving their capital from BRICs to safe countries
  • A loss of confidence in the BRICs
67
Q

What is culture?

A

the learned ways in which society understands, decides, and communicates

68
Q

What are the 3 characteristics of culture

A
  • It is learned
  • It is interrelated
  • It is shared
69
Q

What are the 4 different layers of culture

A
  • National Culture
  • Industry culture
  • Company culture
  • Individual behavior
70
Q

What is the national culture?

A

Gives an overall framework of cultural concepts and legislation for business activities of a country

71
Q

What is industry culture?

A

The culture within an industry. Every business is conducted within a certain competitive framework and within a specific industry. It is related to the culture of business behavior and ethics of industry across borders.

72
Q

What is company culture?

A

The culture within a company. A total organization often contains subcultures of various functions.

73
Q

Two potential determinants for a firm’s choice of a foreign market.

A
  • Environmental characteristics

* Firm characteristics

74
Q

What are examples of environmental characteristics? (3)

A
  • International industry structure
  • Degree of internationalization of the market
  • Host country’s market potential, competition, psychic/geographic distance, market similarity
75
Q

What are examples of firm characteristics? (5)

A
  • Degree of internationalization and overseas experience
  • Amount of resources
  • Type of nature of the business
  • internationalization goals
  • Existing networks of relationships
76
Q

The international market can be defined in two ways, which two ways?

A
  • the international market as a country or group of countries
  • the international market as a group of customers with nearly the same characteristics
77
Q

What are the 4 international market segmentation steps?

A
  1. Selection of the relevant segmentation criteria
  2. Development of appropriate segments
  3. Screening of segments to narrow down list
  4. Microsegmentation, develop segments in each qualified country
78
Q

What are the 4 criteria for effective segmentation?

A
  • Measurability
  • Accessibility
  • Substantiality/ profitability
  • Actionability
79
Q

What does the criteria for effective segmentation measurability encapture?

A

the degree to which the size and purchasing power of resulting segments can be measured

80
Q

What does the criteria for effective segmentation accessibility encapture?

A

the degree to which the resulting segments can be effectively reached and served

81
Q

What does the criteria for effective segmentation substantiality/ profitability encapture?

A

the degree to which segments are sufficiently large and/or profitable

82
Q

What does the criteria for effective segmentation actionability encapture?

A

the degree to which the organization has sufficient resources to formulate effective marketing programs and ‘make things happen’

83
Q

What is a preliminary screening?

A

markets/countries are screened primarily according to external screening criteria

84
Q

What is a fine-grained screening?

A

the firm’s competitive power in the different markets can be taken into account

85
Q

What does country responsiveness mean?

A

‘Income elasticity’ of a specific product and industry consumer-related expenditures in a country. It reflects the tendency of consumers to spend, in a specific product or category, in response to a rise in their income.

86
Q

What does Knock-out criteria mean?

A

these are criteria that are used to exclude countries in advance as potential future markets

87
Q

What does BERI stand for?

A

Business Environment Risk Index

88
Q

What is BERI?

A

a tool used in the coarse-grained, macro-oriented screening of international markets

89
Q

What are countries divided into in the fine-grained screening?

A

A B C countries

90
Q

What are the characteristics of A countries?

A

Primary markets, key markets which offer the best opportunities for long-term strategic development. Companies may want to establish a permanent presence

91
Q

What are the characteristics of B countries?

A

Secondary markets, where opportunities are identified but the political or economical risk is perceived as being too high to make long-term commitments

92
Q

What are the characteristics of C countries?

A

Tertiary markets, are perceived as high risk and so the allocation of resources will be minimal. Objectives are short-term and no real commitment of companies

93
Q

What can cluster analysis be used for?

A

used to identify meaningful cross-national segments

94
Q

When is the transnational approach used?

A

when a company is trying to achieve a consistent and controlled marketing strategy across all its markets

95
Q

What does the micro-segmentation process decide?

A

which products or services the company wishes to become active in the individual countries

96
Q

What is the waterfall approach?

A

Here firms firstly enter a single key market to build up experience and after that start to enter other markets. This method may be preferred when a firm lacks experience

97
Q

What is the shower approach?

A

Used when companies prefer a rapid entry method. Many markets are entered at once this comes with high financial risk and many resources will be needed. This is mostly done with products that have technical advances or are innovative and economies of scale can be created this way.

98
Q

What does concentration mean?

A

Focussed on a smaller amount of customer groups/ countries

99
Q

What does diversification mean?

A

Focussed on a bigger amount of customer groups/ countries

100
Q

At which levels can the global corporate portfolio be analyzed? (4)

A
  • Product categories by regions
  • Product categories by countries
  • Regions by brands
  • Countries by brands

X International Marketing Tentamen (5 decks)

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