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International Marketing
Notes for the first exam
119
Marketing
Undergraduate 3
05/04/2010

Additional Marketing Flashcards

 


 

Cards

Term
What countries are classified as developed countries?
Definition

 

OECD (Organization for Economic Cooperation and Development) countries.

Include U.S., Canada, Mexico, most of Europe, Japan, Australia, New Zealand, Singapore, Turkey, etc.

Term
What does OECD stand for?
Definition
Organization for economic cooperation and development
Term
Who are some of the upper middle/middle income countries?
Definition
Korea, Taiwan, Malaysia, Mexico, South Africa, Brazil, Israel, Chile, several Eastern/Southern European countries, Mexico, Turkey, Russia, etc.
Term
Who are the major oil exporters?
Definition
11 OPEC members like Saudi Arabia, Kuwait, Iran, Iraq, Indonesia, Nigeria, Venezuela, etc. Plus non-members like Mexico, Russia, U.K., and Norway.
Term
Who are the developing countries?
Definition
Most Asian and African countries (A majority of the world’s countries belong here).
Term
Who are the rapidly developing large countries? Hint* BRICs
Definition
Brazil, Russia, India and China
Term
Who are some of the poor countries?
Definition
Countries stagnant at very low levels of development, e.g., Burma, Bangladesh, Afghanistan, Haiti, Nepal, most sub-Saharan African countries
Term
What does BEM stand for?
Definition
Big Emmerging Markets
Term

Who are apart of the CEA?

China Economic Area

Definition
China, HK, Taiwan
Term

Who are apart of ASEAN?

Association of Southeast Asian Nations

Definition
Indonesia, Brunei, Malaysia, Thailand, the Philippines, and Vietnam
Term
In the next 10-20 years BEMs will ________ in global business
Definition
provide major/dominant opportunities
Term
Some of the world's largest countries
Definition

 

World   6.72 billion people

1.China  1.3billion
2.India   1.1b
3.U.S.   305million
4.Indonesia   232m
5.Brazil   188m
6.Pakistan   164m
7.Bangladesh   159m
8.Nigeria   148m
9.Russia   142m
10.Japan   128
Term
What is International Marketing?
Definition
Activity, institutions, and processes across national borders that create, communicate, deliver, and exchange offerings that have value for stakeholders and society
Term
What are some of the Global Marketing Imparatives?
Definition
  • Saturation for domestic markets
  • Global competition
  • Need for global cooperation
  • The internet
  • Expanding market opportunites
Term
Some advantages of International Trade for Consumers
Definition

 

More quantity

Better quality
Greater variety within product categories
More customized products/Services
Lower prices
Choice of products not available without international trade
Term
What are some of the advantages for international trade for firms?
Definition
  • More trade
  • Access to bigger markets, forgein resources, talent, new managment knowledge, new technologies
  • Experience with selling to diverse markets
  • Chance to deal with different forms of government
  • Chance to work in competitive environments
  • Enhanced ability to compete in home market
Term
What are some arguements against free trade?
Definition

 

Infant industry argument
Strategic industry argument
Protection of world species (CITES: Convention on International Trade in Endangered Species)
Protection of local species, crops, etc.
Domestic environment & culture protection
Domestic politics, jobs etc.
Health & safety of domestic residents
Term
What is the infant industry argument?
Definition
  • When a nonindustrialized industry develops, it has specific disadvantages
  • They can't trade or be competitive in a world market
  • The government takes "control" of it until it can get on their own feet
  • The government then imposes tariffs
  • They lack economies of scale
Term
What is the strategic industry argument?
Definition
The view that an industry serves a special 'strategic' purpose in an economy and needs to be protected by a tariff to prevent it from disappearing
Term
What are the 5 stages of global marketing?
Definition
  1. domestic marketing
  2. export marketing
  3. international marketing
  4. multinational marketing
  5. global marketing
Term
international marketing
Definition
markets in many countries; polycentric orientation
Term
multinational marketing
Definition
many markets; consolidation on a regional basis
Term
global marketing
Definition
global perspective; global products with  local variations - Standardized efforts, Coordination across markets, Global integration
Term
The level of global investment leads to......
Definition

 

buildup of international debt by governments.
Affect on the international value of currencies.
Provision of foreign capital for firms.
Influx of major foreign direct-investment activities
Term
world trade
Definition
global reorientation of corporate processes, which opens up entirely new horizons
Term
Comparative advantage
Definition
the ability of a firm, country or region to produce a particular good or service at a lower opportunity cost than another party, i.e. produce it most efficiently given all the other products that could be produced
Term
Absolute advantage
Definition
refers to the ability of a party to produce a particular good at a lower absolute cost than another
Term
Comparative advantage explains....
Definition
how trade can create value for both parties even when one can produce all goods with fewer resources than the other
Term
 trade can create value for both parties even when one can produce all goods with fewer resources than the other. The net benefits of such an outcome are called
Definition
gains from trade
Term

gains from trade is the main concept of

 

Definition
the pure theory of international trade
Term
Sources of Comparative Advantage (Resource Endowment).
Definition

 

(A)  Natural Resources (climate, size, location, topography, flora & Fauna, minerals, etc.).

(B)Man-made Resources (technology, infrastructure, Education & Training, etc.)
(C)Human Resources (number, age distribution, health, size, etc.)
(D)Managerial Know-how
(E)Traditions
Term
The Smoot-Hawley Act
Definition
(1930) raised import duties on 20,000 products to reduce the volume of imports into the United States to help restore domestic employment in raising of duties and imposition of imports barriers by other nations worldwide depression and the collapse of the world financial system
Term
Western world led by the United States
Definition
: Pax Americana fostered international trade as a key to worldwide prosperity. Emphasis on market economies and balanced consumer/industrial goods sectors
Term
GATT
Definition
(General Agreement on Tariffs and Trade): A set of rules for non discrimination, transparent procedures and settlement of disputes in international trade. Adopted by 23 countries in1947
Term
What was GATT's purpose?
Definition
provide an international forum to encourage free trade among member states
Term
GATT's name was changed to what?
Definition
World Trade Organization (WTO) on January 1, 1995 (by Uruguay Round)
Term
WTO currently has________ member countries
Definition
153
Term
Acculturation
Definition
Adjusting and adapting to a specific culture other than one’s own
Term
What are some of the functions of the WTO?
Definition

 

• Administer WTO trade agreements
• Forum for trade negotiations
• Handle trade disputes (empowered to enforce rulings)

  • Monitor national trade policies (countries found in violation of   WTO rules are expected to change policies or else face sanctions)

Also responsible for General Agreement on Trade in Services (GATS), Trade related aspects of intellectual property rights (TRIPS), and Trade related investment measures (TRIMS).
Its 9th round of negotiations (Doha Round) was launched in 2001 in Doha,
 Qatar. It facilitated the way for China and Taiwan to get full membership in the WTO.
As of now, the Doha Round is completely stalled because of unresolved subsidy issues
Term
IMF?
Definition

Internatinal Monetary Fund

 

Established in 1944.
Designed to provide stability for the international monetary framework.
Provided for fixed exchange rates between countries.
Term
What are the 5 major components of the world banking group?
Definition

 

-  International Bank for Reconstruction and   Development (IBRD) 

  -  International Development Association (IDA)

  -  International Finance Corporation (IFC)

  -  Multilateral Investment Guarantee Agency                  (MIGA)

  -  International Center for Settlement of   Investment Disputes (ICSID)

Term
What are some of the current areas of focus for the world bank?
Definition

 

-Sustainable growth and development.
-Clean technologies.

-   Agricultural assistance for combating inflation in food.

-   Liberalization of world trade.

-   Greater participation of rising economic powers and   developing nations in the bank’s governance.

-Reconstruction of war-torn countries.
-Assists fledging economies to participate in modern economic trade.
-Resolving debt problems of developing nations.
Term
What are some of the factors behind the decline in U.S. international competitiveness?
Definition

 

Attitude of the US policy makers - Ignoring domestic firms in an attempt to boost the development of foreign economies (OK during Marshall Plan but disastrous when facing strong foreign competitors)
Perception amongst US manufacturers about international marketing being risky and complicated.
Lack of global interest (Technological arrogance, NIH syndrome, etc).
Unfamiliarity with international market conditions.

Complicated trade regulations

Term

 

Restrictions on investment may
Definition

 

Permit more domestic control over industries.
Deny access to foreign capital and often innovation.
Tightening up credit markets higher interest rates, and a decrease in willingness to adapt to changing world market conditions
Term
Mainly ad hoc political reactions (over time) (change to)
Definition
protectionism (protectionism OK as a bargaining tool but not when passed into laws).
Term
Import-related policy responses with the voluntary import restrictions
Definition
aid domestic industries to reorganize, restructure, and recapture their trade prominence of years past
Term
Export restrictions
Definition
are limitations on the quantity of goods exported to a specific country or countries by a government
Term
Import-related policy responses with the Export restrictions
Definition
to keep scarce or critical resources from overseer competitors or to encourage inward FDI, e.g. rare earths in China
Term
Import-related Policy Responses to Non-tariff barriers
Definition
Providing preferential treatment to domestic bidders, using national standards, placing emphasis on design rather than performance, and preventing the market entry of foreign products
Term
Enculturation
Definition
Absorbing one’s own culture
Term
Cultural universals
Definition
Manifestations of the total way of life that are common to all cultures (elements such as body adornments, courtship, etiquette, family, gestures, humor, mealtimes, music, personal names, status differentiation, trade etc.)
Term
What are some of the elements of a culture?
Definition

 

Language
Religion
Values & Attitudes
Manners & Customs
Aesthetics
Education
Social Institutions
Material Elements
Etc.
Term
Christianity
Definition
Lays stress on frugality and accumulation of wealth from hard work; consists of two significant groups Catholicism and Protestantism
Term
Islam
Definition
Plays a pervasive role in the life of its followers; it supports entrepreneurship and discourages exploitation
Term
Hinduism
Definition
Family is an important element in Hindu society; the extended family structure has an impact on the purchasing power and consumption of Hindu families
Term
Buddhism
Definition
Views life as an existence of suffering; emphasizes on spiritual achievement rather than worldly goods
Term
Confucianism
Definition
Characterized by a code of conduct; stresses on loyalty and relationships
Term
Shinto
Definition
Nature-centric, polytheistic religion of Japan (tradition & family, love of nature, cleanliness)
Term
Values
Definition
shared beliefs or group norms that have been internalized by individuals
Term
Attitudes
Definition
evaluations of alternatives based on values (attitudes towards change is positive in industrialized countries, but change is viewed with suspicion in tradition bound societies).
Term
Aesthetics
Definition

 

a culture’s concept of good taste,

as expressed in the arts and in the particular

symbolism of colors, form, music, etc

Term

 

Color is often used as a mechanism for..........

Definition

brand

identification, feature reinforcement, and

differentiation

Term
Social organization
Definition
determines the way people relate to one another including the roles of managers and subordinates
Term
Reference groups
Definition
Provide the values and attitudes that become influential in shaping behavior; can be primary or secondary.
Term
Social stratification
Definition
Differences in the division of a particular population into classes (higher strata control most of the buying power and decision-making positions).
Term
Material culture results from technology and is manifested in the availability and adequacy of these what infrastructures?
Definition
  • economic
  • social
  • financial
  • technological
Term
Hofstede’s dimensions of culture
Definition

 

Individualism
Power distance
Uncertainty avoidance
Masculinity/Famininity
Long-term versus short-term orientation
Term
Self-reference criterion
Definition
The unconscious reference to one’s own cultural values
Term
Influence of one’s own cultural values can be reduced by
Definition

 

Define the problem in terms of domestic and foreign cultural traits, habits, or norms.
Pinpoint the complicating influence of the self-reference criterion.

Redefine the problem without the self-reference criterion

Term
The training challenges is to aim......
Definition

 

foster preparedness, sensitivity, patience, and

flexibility in managers and other personnel

Term
Sensitivity training
Definition
Focuses on enhancing a manager’s flexibility in situations that are quite different from those at home
Term
Field experience
Definition
Exposes managers to different cultural environments for a limited amount of time
Term
Area studies
Definition
Provide factual preparation for a manager to operate in, or work with people from, a particular country
Term
Some marketing characteristics are???
Definition
population
income
consumption patterns
infrastructure
Term
The degree of urbanization dictates the nature of the.....
Definition
marketing task in terms of distribution, market potential, and buying habits
Term
Per capita GDP - often used as a primary indicator for
Definition
purchasing power
Term
The lack of income in a market may preclude the marketing of a standardized product but may provide an opportunity for an adjusted product
Definition
The lack of income in a market may preclude the marketing of a standardized product but may provide an opportunity for an adjusted product
Term
in product-specific cases income.....
Definition
may not play a major role
Term
Engel’s law
Definition
As a family’s income increases, the percentage spent on food will decrease, the percentage spent on housing and household operations will be roughly constant, and the amount saved or spent on other purchases will increase
Term
Product saturation or diffusion
Definition
provides information on the percentage of households in a market that own a particular product
Term

 

Infrastructure
Definition

 

Transportation networks by land, rail, waterway, or air are essential for distribution.
Communication systems for marketing include telephones, computers, broadcast media, print media, internet, and wireless technology.

The more extensive the firm’s international involvement, the more it can rely on its already existing support network of banks, advertising agencies, and distributors to assess new markets

Term
Implications of Economic Integration for Marketing
Definition

 

1. Increased growth for the region

2. Growth in income within the region increased exports for

    both member and nonmember countries

3. Trade creation and trade diversion

4. Opportunity for direct investments

5. Increased competition within the region

6. New standards of fair competition

7. Support for local industries

8. Greater market segmentation

Term
EU Membership History
Definition

 

1952: Belgium, Netherlands Luxemburg, Germany,

          France & Italy

1973: Denmark, Ireland, UK

1981: Greece

1986: Portugal, Spain

1995: Austria, Finland, Sweden

2004: Cyprus, the Czech Republic, Estonia, Hungary,

          Latvia, Lithuania, Malta, Poland, the Slovak

          Republic and Slovenia

2007: Romania, Bulgaria  (27 countries)

Term
Council of European Union
Definition
- Main decision-making body. One minister from each member country
Term
European Parliament is the
Definition
(Legislative body)
Term
European Commission is
Definition
(Bureaucracy)
Term
Court of Justice
Definition
Ensures that Community laws are uniformly interpreted and applied
Term
Court of Auditors
Definition
Checks EU’s receipts and expenses and manages the budget
Term
North America: NAFTA
Definition
1994. Includes two side agreements to correct perceived abuses in labor and the environment in Mexico. Introduction of maquiladoras
Term
Europe: EFTA (European Free Trade Association):
Definition
Iceland, Norway, Switzerland and Liechtenstein
Term
Africa
Definition
  • ECOWAS (Economic Community of West African States),
  • SACU (South African Customs Union): Botswana, Lesotho, Namibia, South Africa, Swaziland
Term
MERCOSUR
Definition
(Southern Common Market – founded in 1991): Argentina, Brazil, Paraguay, Uruguay + 5 Associate members, Mexico is an observer
Term
 LAIA
Definition
Latin American Integration Association
Term
CENCOM
Definition
Central American Common Market
Term
ANCOM
Definition
Andean Common Market
Term
CARICOM
Definition
Caribbean Community and Common Market
Term
SAARC
Definition
South Asian Association for Regional Cooperation
Term
Strategies for Regional Markets in Europe
Definition
Fill gaps in product/market portfolios; Create alliances with strong European firms; Rationalize European organization, production, distribution; Hire senior-level European talent; Establish region-wide government relations
Term
Strategies for Regional Markets in emerging markets
Definition
 Adjust entry strategy; Manage affordability; Invest in distribution; Build strong brands
Term
Developing Markets
Definition
Research customers; Create buying power; Tailor local solutions; Improve access; Shape aspirations
Term
Consequences Of Political Actions
Definition

 

Indigenization/Domestication
Nationalization (Acceptable according to international law if it satisfies public purpose & includes compensation)
Expropriation/Confiscation (no compensation)
Local content laws
Local hiring laws
Discriminatory taxes
Discriminatory pricing of resources
Joint-venture pressure
Import/Export controls, embargos, sanctions, etc.
Selective boycotts
Price controls

Terrorism,  etc

Term
Determinants for export controls
Definition
  • national security
  • forgein policy
  • short supply
  • nuclear nonprofeliation
Term
Problems faced while administering import controls
Definition

 

They exact a huge price from domestic consumers.
The social cost of these controls may be damaging to the economy.
They bring about downstream change in import composition.
They often do not to work.

Supply may respond to artificial stimulation and grow far beyond demand

Term
Other Political “Risks”
Definition

 

Shortage of foreign currency.
Difficulty dealing with exchange controls.
Prolonged negotiations with government officials.
Increase in tax rates or stricter applications of the host country’s tax codes.
Government control on the prices of imported products or services.
Other government controls (e.g., censorship)
Term
Common law
Definition
Based on tradition and depends less on written statutes and codes than on precedent and custom
Term
Code law
Definition
Based on a comprehensive set of written statutes that spell out legal rules explicitly; based on Roman law. (Islamic Law: Based on Sharia, direct impact on dietary and financial aspects)
Term
International law
Definition

 

No enforceable body of international law exists;
Treaties and agreements respected by a number of countries influence international business operations.
Firms are restricted by both home and host country laws.
Term
Litigation is
Definition
the most expensive and time-consuming alternative
Term
Conflicts with foreign commercial and government entities may be resolved by
Definition
mediation, arbitration or litigation
Term
Direct effects of international terrorism
Definition
the immediate cost levied on individual firms. Physical damage to infrastructure and disruption of public services and supply of inputs, resources and services
Term
Indirect effects of international terrorism
Definition
decline in per capita income, purchasing activity, and stock market values. Deterioration of international relations. Onerous counter terrorism regulations
Term
chill effect of international terrorism
Definition
Uncertainty about the state of a nation’s economy can sharply reduce domestic business activity as well as FDI. Curtailment of travel by foreign executives, etc
Term
The ethical obligations faced by multinational enterprises include
Definition

 

Corporate governance and responsibility
Intellectual property rights
Bribery and corruption
Term
Intellectual Property Rights
Definition

 

Many countries propose a balance between IP protection and availability of essential information in various areas of public policy such as
Health (access to affordable medicines)
Biotechnology (use of genetic research tools)
Education (access to scientific materials)
Food & agriculture (food security & preservation of biodiversity)
Term
The Foreign Corrupt Practices Act (FCPA):
Definition
1977: prohibits U.S. firms to bribe foreign officials for business purposes. Similar laws in Europe and other countries
Term
Functional lubrication/Enabling payments
Definition
the amount is small, it is standardized, and is passed on to others involved in the processing of documents
Term
International research involves
Definition

 

New parameters like information availability, respondent access, laws governing information gathering, survey familiarity, communication infrastructures, research suppliers, etc.

New environment: cultures, demographics, political systems, stability, different societal structures, language, etc

Term
Secondary Information Caveats
Definition

 

Consider the quality of the data source, with primary focus on the purpose and method of original data collection.
Assess the quality of actual data in terms of accuracy, reliability, and recency.

Assess the comparability and compatibility of the data

Term
The international information system should have the following attributes...
Definition

 

Relevant
Timely
Flexible
Accurate
Exhaustive
Convenient
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