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International Business Gr.12 > Unit 4 > Flashcards

Unit 4 Flashcards

1
Q

What is corporate social responsibility

A

is the duty of a company to work in the best interest of the society through its policies.

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2
Q

Corprate social responsibility

A
  • Making charitable donations
  • Treating employees ethically
  • Being environmentally conscious
  • Ensuring safe working conditions
  • Sponsoring local sports teams
  • Creating and promoting diverse workplaces
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3
Q

Benefits of C.S.R.

A
  1. Used as a marketing tool
  2. Dissuades governments from implementing regulations that interfere with business
  3. Companies can attract and retain excellent employees.
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4
Q

Criticisms of C.S.R.

A
  1. Costs companies’ money which affects profits
  2. Companies spend a lot of time and employee energy on CSR
  3. Good practice could be used to distract customers from problems (Ex.Tobacco labels)
  4. Companies may use CSR to enhance their reputation with domestic consumers but act differently in other countries.
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5
Q

What is Stakeholder Analysis?

A
  • Stakeholders: individuals or groups affected by the organization that have a stake in the success and profitability of the business
  • Primary Stakeholders: Including customers, suppliers, competitors, and employees directly affects the company and its profitability.
  • Secondary stakeholder: Include the media, political parties, trade association, special interest groups, etc.
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6
Q

What are Business Ethics?

A
  • A set of rules or guidelines that management or individuals follow to make decisions for their company.
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7
Q

What are Ethical Dilemma?

A
  • A situation in which an individual, government, or business must make a choice between two alternatives, either of which provides a completely satisfactory solution.
  • Business examples:
    Paying bribes
    Using child labour
    Corporate corruption
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8
Q

What is Test of Disclosure?

A
  • Companies can use the “test of disclosure” method to solve an ethical dilemma.
  • Companies can ask themselves, “How would we feel if everyone knew about the decision we made?”
  • If they are concerned, they have likely made an ethical
  • If there is a concern, they most likely made the wrong choice
  • Example: Rogers firing Don Cherry
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9
Q

Global Ethical Reasoning

A

For companies with a global focus, ethical decision making is more complex and less clear
Two methods of global ethical issues:
1. Ethical Imperialism
2. Cultural Relativism

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10
Q

Ethical Imperialism

A
  • Also known as ethical absolutism
  • One set of values for all cultures
  • Right and wrong are the same in all cultures
  • Example:
  • In Canada, it is law to study in school until the age of 16. Therefore, a Canadian company should not hire anyone full-time under the age of 16 in any of their global locations.
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11
Q

Cultural Relativism

A
  • Values are dependent on the culture.
  • Ethics of one culture are not seen as better than those of another.
  • Right and wrong depend on local values.
  • Example:
  • If laws in a country permit the hiring of a 16 year old person on full time basis, them Canadian companies may decide to hire him/her
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12
Q

Five Ethical Issues

A
  1. Environmental issues
  2. Sweatshops
  3. Corporate corruption
  4. Dumping and subsidizing
  5. Poverty
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13
Q

Environmental Issues

A
  • Sustainable development: the ability to meet human consumption while maintaining the environment
  • Two main categories of environmental damage:
  • Pollution
  • The contamination of the environment caused by the manufacture or use of commodities
  • Resource depletion
  • Resource depletion is the consumption of scarce or non-renewable resources
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14
Q

Sweatshops

A

Sweatshops are factories in underdeveloped and developing countries where the employees work in unsafe environments, are treated unfairly, and have no chance to address these conditions.

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15
Q

Corporate corruption

A

Corporate corruption refers to involvement in illegal activities to further one’s business interests
Example include:
* Enron
* Brex
* FIFA
* Nortel
* Volkswagen
* Bernard L. Madoff

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16
Q

Dumping and subsidizing

A

Dumping is the selling of products in a foreign country below the cost of production or below the price in the home country.
A company will do this to get rid of excess stock without affecting the price in the local market

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17
Q

Predatory dumping

A

is when a foreign company sells a product to increase sales and force domestic competition out of business, then raise prices.

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18
Q

Subsidizing

A

occurs when the importing of a good is helped through assistance from the foreign government
Examples:
* Loans with preferential interest rates
* Grants
* Tax incentives

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19
Q

Poverty

A
  • 800 million people live in poverty
  • Less people live in poverty today than a decade ago as a result of the economic conditions in India, China and Indonesia
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20
Q

Non government organizations

A

Non-Governmental organizations (NGOs) are non-profit organizations that are made up of paid professionals, staff and unpaid volunteers and have a service and development focus.

21
Q

What is the Fair trade Label Organization International (FLO)

A

works to secure improve trade relationships for producers around the world

22
Q

What is Fairtrade?

A
  • guarantees the prices paid for products are adequate to cover the costs of sustainable production
  • Workers are treated fairly- safe working conditions, right to join a union, adequate housing, and decent wages
23
Q

What is Marketing

A
  • Marketing is the sum of all activities involved in getting goods and services from the original producer

Activities Include:
* Market research
* Product Development
* Pricing
* Advertising and promotion
* Sales
* Logistics

24
Q

4 P’s and the 2 C’s of marketing

A

4 P’s
* Product
* Place
* Price
* Promotions
2 C’s
* Consumers
* Competition

25
Q

Aspesct of product (4P’s)

A
  • Package weight
  • Package colors
  • Legal requirements
  • Language requirements
  • Labeling Requirements
  • Ingredients
  • Style
26
Q

What is Place (4P’s)

A
  • Place is also known as channels of distribution
    Includes where the product is made, how it gets to consumers, and where it is sold.
27
Q

Types of places (4P’s)

A
  • Business to consumer (B2C):
  • Business-to-consumer (B2B)
    Traditional Channels of Distribution:
  • Producer: Creator of the goods or services
  • Importer: A company that helps bring in foreign goods
  • Wholesaler: A company that purchased products in bulk then resells them to other businesses
  • Retailer: A company that purchases from producers, importers or wholesalers then resells them to consumers.
  • Speciality channels
28
Q

Price strategies

A
  • Markup pricing
    When a business adds a percentage to the cost to determine the price.
  • Penetration pricing
    Entering a new market with a lower price, then raising the price once there is a demand
  • Price skimming
    Entering a new market with a higher price to attract early adopters and offset initial costs of entering this new market. Price is eventually lowered.
  • Premium pricing
    Setting the price higher than competition to evoke the illusion that the products are high quality. The price is never lowered.
  • Discount pricing
    Usually for B2B situations where the producer attempts to sell higher volume.
    Examples: Early payment discounts and volume discounts.
  • Psychological pricing
    Setting prices slightly lower than the rounded numbers, causing customers to think the prices are lower than they are
29
Q

What is Promotion

A

Promotion refers to any type of marketing communication used to inform or persuade target audiences of a product, service, brand, or issue

30
Q

How to promote products when going international

A
  • Use existing ads: easy to do when cultures are similar, such as USA and Canada
  • Translate ads: This can lead to embarrassing mistakes such as KFC and Pepsi
  • Create new ads: Especially true for fashion and food as they differ significantly from culture to culture
31
Q

How business use Social Media

A
  • Some international businesses align themselves with bloggers or Youtubes who have a large following.
  • Could also be athletes or entertainers
  • They are known as influencers and can help businesses reach even more consumers.
32
Q

Consumers

A
  • Canadian businesses wishing to sell abroad must be very careful to avoid ethnocentrism
  • Ethnocentrism is a belief that your own culture, values, beliefs, and customs represent the right way of doing things, and that value systems of other countries are not important
33
Q

what are 3 ways to differentiate consumers

A
  • Demographic
  • Motivation
  • Economics
34
Q

What are Demographics

A

Demographics are statistical data about various characteristics of a population such as age, gender, education, marital status, lifestyle, etc.
Examples:
Mexico: 27% of population is under 15 years of age, in Canada its 15%
Chinda now has 33.5 million more men than women

35
Q

What are motications

A
  • Businesses use various theories to determine why people buy certain items
  • Thordike’s law of effect says that people buy either to gain satisfaction or to avoid punishment
  • Maslow’s Hierarchy of needs states that humans experience five levels of need physiological , safety, belonging, esteem, and self- actualization.
36
Q

What are economics

A
  • Disposable income: Is the amount of income a person has after their taxes are paid.
  • Discretionary income: is the income left after taxes and the necessities of life (food, shelter, etc.) have been paid
  • Products in underdeveloped countries will be more successful if they are a necessity.
37
Q

What are the types of Competition

A
  • Direct competition: When two or more companies sell products and/or services that are identical
  • Example: Coke and Pepsi
  • Indirect competition: any company that competes for customers money
  • Example: Canada’s wonderland and Toronto Blue Jays
38
Q

What is Competitive advantage

A
  • In marketing, competitive advantage refers to the ability of one company to produce a product cheaper than another, or when it has an edge over companies that make it similar products
    Examples include
  • Lower costs of production
  • Lower distribution costs
  • Product differentiation
  • Brand equity
39
Q

What is Brand equity

A

is the value of a product’s brand in the market, or the number of consumers that can identity with the brand, especially with consumers who name the brands as top in the category

40
Q

What is Product differentiation

A
  • different flavors, quality, packaging, color, scent, etc could be the reason consumers purchase various goods
  • Examples
  • Green Tea Coke in Japan
  • Coca-Cola Light Sango (blood orange in France)
  • Coca-Cola Raspberry (New zealand)
41
Q

What is market research

A

Market Research finds and collects information needed to successfully sell a product or service and make marketing decisions

42
Q

What is Market Research is Used to

A
  • Understand consumers
  • Identify growth and profit opportunities
  • Detect changes and trends in the market
  • Observe competition
  • For international business it also includes researching:
  • Culture
  • Language
  • Government regulations
  • Economics
43
Q

What is primary research

A
  • Primary research is the research data a company collects itself or hires a market research company to do so.
  • Examples: surveys, questionnaires, observations, focus groups, and interviews.
  • Advantages
  • Information is specific to the company
  • Target Customers
  • Disadvantages
  • Costly
  • Time consuming
  • Not available immediately
44
Q

What is Secondary Research

A
  • Secondary research is data that has been collected by other sources.
  • Examples of secondary research:
  • Global Affairs Canada
  • Export development Canada
  • Trade Organizations
  • Individual country websites
  • Advantages
  • Readily available
  • Less expensive
  • Disadvantages
  • Data may not be specific to the company needs.
45
Q

What are Marketing Strategies

A
  • Three marketing strategies when expanding internationally:
  • Acquisition Strategy
  • Centralized marketing strategy
  • Decentralized marketing strategy
46
Q

What are Aquisition Strategies

A
  • This is when a company purchase another company in a foreign country
  • Advatges: It buys the employees, management, reputation, and culture expertise.
  • Example: coca cola bought thumbs up in India.
47
Q

What are Centralized Marketing Strategy

A
  • This strategy uses the domestic marketing mix throughout the world
  • Advantage; cost savings and ability to grow a global brand
  • Disadvantage: cultural mistakes
  • Example: Starbucks is the same worldwide.
48
Q

What is Decentralized Marketing Strategy

A

This strategy tailors the marketing elements specifically to the target country
Usually hire local advertising agencies, market research firms, and salespeople.
Example: McDonald’s

International Business Gr.12 (4 decks)

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