Unit 20 - Global Marketing

Question 1

What are the major components of the Global Marketing system?

Answer 1

International Trade System Economic Environment Political-Legal Environment Cultural Environment

Question 2

What does the international trade system do?

Answer 2

Restrictions on Trade Tariffs Quotas Exchange controls Nontariff trade barriers General Agreement on Trade and Tariffs (GATT) and the World Trade Organization (WTO) Regional Free Trade Zones

Question 3

What is a Tariff?

Answer 3

Taxes on certain imported products designed to raise revenue or to protect domestic firms

Question 4

What are Quotas?

Answer 4

Limits on the amount of foreign imports a country will accept in certain product categories to conserve on foreign exchange and protect domestic industry and employment

Question 5

What are Exchange Controls?

Answer 5

A limit on the amount of foreign exchange and the exchange rate against other currencies

Question 6

What are Nontariff trade Barriers?

Answer 6

Biases or restrictive product standards that go against products from certain countries

Question 7

What is a Subsistence economy?

Answer 7

Economies that have a large majority of people engaged in agriculture, consume most of their output and barter the rest for simple goods and services. They offer few market opportunities.

Question 8

What is a Raw material exporting economy?

Answer 8

Economies that are rich in one or more natural resources. They are good markets for large equipment, tools, supplies, and trucks. If there is a wealthy upper class, then they are also a market for luxury goods.

Question 9

What is an Industrializing economy?

Answer 9

Economies that have manufacturing that represents 10 percent to 20 percent of the economy and need more imports of raw textile materials, steel, and heavy machinery and fewer imports of finished textiles, paper products, and automobiles. These economies create a rich upper class and a small but growing middle class that demand new types of imported goods.

Question 10

What is an Industrial economy?

Answer 10

Economies that are major exporters of manufactured goods, services, and investment funds. They trade among themselves and export to other economies. They represent an attractive market for all types of goods and services.

Question 11

What are the 3 Market entry strategies?

Answer 11

Exporting Joint Venturing Direct Investment

Question 12

Explain global Exporting.

Answer 12

A company produces its goods in the home country and sells them in a foreign market

Question 13

Explain global Joint venturing.

Answer 13

A firm joins with foreign companies to produce or market products or services

Question 14

Explain global Direct investment

Answer 14

A development of foreign-based assembly or manufacturing facilities and offers a number of advantages: Lower costs for raw materials and labor Government incentives Logistics Control

Question 15

Explain Indirect exporting.

Answer 15

When the firm works through an independent international marketing intermediary. This requires less investment and risk since the firm does not require an overseas organization or network.

Question 16

Explain Direct exporting.

Answer 16

When the firm handles its own exports. This requires a greater investment and risk.

Question 17

What is Licensing?

Answer 17

When a firm enters into an agreement with a licensee in a foreign market. For a fee or royalty, the licensee buys the right to sue the company’s process, trademark, patent, trade secret, or other item of value.

Question 18

What is Contract manufacturing?

Answer 18

When a firm contracts with manufacturers in the foreign market to product its product or provide its service. Benefits include faster startup, less risk, and the opportunity to form a partnership or to buy out the local manufacturer.

Question 19

What is Management contracting?

Answer 19

When the domestic firm supplies management skill to a foreign company that supplies capital. The domestic firm is exporting management services rather than products.

Question 20

What is joint ownership?

Answer 20

When one company joins forces with foreign investors to create a local business in which they share joint ownership and control. Joint ownership is sometimes required for economic or political reasons.

Question 21

Understand the 5 international product and promotion strategies.

Answer 21