countertrade
the practice of using barter rather than money for making global sales. popular with many eastern European nations, Russia, and asian countries.
gross domestic product (GDP)
the money value of all goods and services produced in a country during 1 year.
balance of trade
the difference between the monetary value of a nation's exports and imports
Competitive advantage of nations
1. factor conditions - natural resources, education and skill levels, wage rates
2. demand conditions - size of market, sophistication of consumers, media exposure of products
3. related and supporting industries - existence of supplier clusters
4. compan
Economic Espionage Act (1996)
makes the theft of trade secrets by foreign entities a federal crime in the United States
prescribes prison sentences of up to 15 yrs and fines up to $500,000 for individuals
Protectionism
the practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quotas
4 trends in the past decade have significantly influenced the landscape of global marketing
trend 1: Gradual decline of economic protectionism by individual countries
trend 2: Formal economic integration and free trade among nations
trend 3: Global competition among global companies for global customers
trend 4: Emergence of a networked global m
Tariffs
a government's tax on goods and services entering a country, primarily serve to raise prices on imports
quota
a restriction placed on the amount of a product allowed to enter or leave a country. can be mandated or voluntary and may be legislated or negotiated by govts
World Trade Organization (WTO)
formed by the major industrialized nations of the world in 1995 to address an array of world trade issues. 153 WTO member countries, including the United States, which account for 90% of world trade
Global competition
exists when firms originate, produce, and market their products and services worldwide.
strategic alliances
agreements w/ 2 or more independent firms to coordinate for the purpose of achieving common goals such as a competitive advantage or customer value satisfaction
multidomestic marketing strategy
they have as many different product variations, brand names, and advertising programs as countries in which they do business
global marketing strategy
the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
global brand
a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs
Global consumers
consist of consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services
cross-cultural analysis
involves the study of similarities and differences among consumers in 2 or more nations or societies
values
personally or socially preferable modes of conduct or states of existence that tend to persist over time
customs
what is considered normal and expected about the way people do things in a specific country
Foreign Corrupt Practices Act (1977)
a law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country
Cultural Symbols
things that represent ideas and concepts
semiotics
a field of study that emerged that examines the correspondence between symbols and their role in the assignment of meaning for people
back translation
where a translated word or phrase is retranslated in the original language by a different interpreter to catch errors
Consumer ethnocentrism
the tendency to believe that it is inappropriate, indeed immoral to purchase foreign-made products
bottom of the pyramid
the largest, but poorest socioeconomic group of people in the world
economic infrastructure
a country's communications, transportation, financial, and distribution systems-is a critical consideration in determining whether to try to market to a country's consumers and organizations
Economic considerations
A scan of the global marketplace should include: 1) comparative analysis of the economic development in different countries, 2) an assessment of the economic infrastructure in these countries, 3) measurement of consumer income in different countries, and
developed vs. developing countries
developed countries have somewhat mixed economies. Private enterprise dominates, although they have substantial public sectors as well. ex. United States, Canada, Japan, and most of Western Europe
developing countries are in the process of moving from an
micro-finance
the practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small business or other income-generating activities
currency exchange rate
the price of one country's currency expressed in terms of another country's currency
exporting
producing goods in one country and selling them in another country. allows a company to make the least number of changes in terms of its product, its organization, and even its corporate goals. Host countries usually don't like this practice bc it provide
licensing
a company offers the right to a trademark, patent, trade secret, or other similarly valued items of intellectual property in return for a royalty or a fee.
indirect vs. direct exporting
indirect exporting- when a firm sells its domestically produced goods in a foreign country through an intermediary. least amount of commitment and risk but will probably return the least profit
direct exporting- when a firm sells its domestically produced
contract manufacturing and contract assembling
two variations of licensing, represent alternative ways to produce a product within the foreign country
joint venture
when a foreign company and a local firm invest together to create a local business
direct investment
biggest commitment a company can make when entering the global market which entails a domestic firm actually investing in and owning a foreign subsidiary or division.
product and promotion strategies
1) Product Extension -selling the same product in other countries
2) Product Adaptation -with some adaptations, changing a product in some way to make it more appropriate for a country's climate or consumer preferences is a product adaptation strategy
3)
dumping
when a firm sells a product in a foreign country below its domestic price or below its actual cost
gray market
also called parallel importing, is a situation where products are sold through unauthorized channels of distribution
3 types of companies populate and compete in the global marketplace:
1) international firms - engages in trade & marketing in different countries as an extension of the marketing strategy in its home country
2) multinational firms - views the world as consisting of unique parts and markets to each part differently. use a m