Theme 3, 3.3 Impact of Globalisation on Global Companies

Question 1

Define Global marketing

Answer 1

Marketing strategies that firms use in global markets.

Question 2

Define Glocalisation (& “localisation”)

Answer 2

Idea that product is more likely to succeed if it is adapted to the local requirements and cultural expectations.

Question 3

Define Ethnocentric model

Answer 3

Where a firm approaches foreign markets and does it from its own culture. No adaptation is made to another market.

Question 4

Define Polycentric model

Answer 4

An approach that considers each host country to be unique. Subsiduary businesses develop their own individual businesses and marketing strategies to suit these particular needs.

Question 5

Define Geocentric model

Answer 5

Sees the whole world as a potential market but with both similarities and differences in domestic and foreign markets. An effort is made to develop integrated world market strategies to gain the best from both of these strands.

Question 6

Define reverse innovation?

Answer 6

Re-designing a product that exists and simplifying it so it can be sold in mass markets: where incomes are lower.

Question 7

Define global market niches

Answer 7

Smaller, specialised parts of global markets. The customer’s needs in a number of countries aren’t met in the global economy.

Question 8

Define Global Marketing

Answer 8

Marketing strategies that firms use in global markets.

Question 9

Define Globalisation

Answer 9

The interdependence of other countries. More economic integration

Question 10

Define Social and Cultural differences

Answer 10

Idea that societies have distinctive ways of life, affecting the type of products brought through the patterns of consumption and also the way business is done.

Question 11

Define Subcultures

Answer 11

Groups of people that have shared interests or values. e.g. religion, race, hobbies, etc.

Question 12

Briefly Describe the idea of ‘glocalisation’

Answer 12

This is when businesses have the intention of distributing their goods/services on a global scale, but also ensure they meet the demands of their local cosnumers

Question 13

What is ethnocentrism?

Answer 13

The idea of comparing other cultures with the qualities of the domestic culture.

Question 14

Which market is likely to have a higher profit market? and why?

Answer 14

Niche markets because these products are specialised to a specific consumer group, and so firms will demand a higher price to compensate for this.

Question 15

How would ethnocentric consumers be beneficial to domestic firms?

Answer 15

These types of consumers favour their domestic culture over any other, meaning they are less likely to buy from foreign firms, thus reducing competition for domestic firms

Question 16

What is a polycentric approach to business?

Answer 16

This is when global firms employ people from the host country in order to get a better understanding of the needs.

Question 17

Give one cost benefit of advocating a polycentric approach

Answer 17

It is cheaper to recruit an employee from the host country, due to low labour costs ( especially if the host country is a developing one)

Question 18

Give one disadvantage of a firm operating in a different country with a different native language.

Answer 18

This increases the chances of inaccurate
translation, which can lower the quality of the firm’s products and therefore adversely affect revenue.

Question 19

Describe the difference between mass markets and niche markets?

Answer 19

Mass markets address all consumers, whereas niche markets focus on small group consumers and a specific product.

Question 20

Define Joint ventures?

Answer 20

Involve business in a collaborative relationship with a local producer. They are of particular value to business that want to produce or sell in an unfamiliar market. They can be used as a way to spread risks. The Chinese government usually requires foreign investors to work with a Chinese Company in a joint venture.

Question 21

Define global market niches?

Answer 21

Are smaller, specialised parts of a global market where customers in more than one country have particular needs that are not fully met by the global mass market. The product or services is likely to be differentiated from that of the mass market.

Question 22

Define corporate culture

Answer 22

The shared values, beliefs, and behaviours of people in a company that shape how they work and interact

Question 23

Define the long tail

Answer 23

A business strategy that focuses on selling small amounts of many different products, rather than just a few popular ones.