Marketing Chp. 6

Countertrade

the practice of using barter rather than money for making global sales

globalization

the process by which businesses or other organizations develop international influence or start operating on an international scale.

trade feedback effect

imports affect exports and vice versa

Gross Domestic Product (GDP)

The monetary value of all the finished goods and services produced within a country's borders in a specific time period

balance of trade

the difference between the monetary value of a nations exports and imports

5 developments that influenced global marketing

1. economic protectionism by individual countries2. economic integration among countries3. global competition among global companies for global consumers4. the presence of a networked global marketspace5. growing prevalence of economic espionage

protectionism

the practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quotas

tariffs

government taxes on products or services entering a country that primarily serve to raise prices on imports

quota

a restriction placed on the amount of a product allowed to enter or leave a country

economic integration

-transnational group formation to promote free trade and enhance economics-created on the bases of having similar goals -European union-north American free trade agreement

World Trade Organization (WTO)

a permanent global institution to promote international trade and to settle international trade disputes

trade war

a situation in which countries try to damage each other's trade, typically by the imposition of tariffs or quota restrictions.

global competition

exists when firms originate, produce, and market their products and services worldwide

global companies

1. international firms2. multinational firms3. transnational firms

international firm

engages in trade and marketing in different countries, like an extension of the marketing strategy in its home country-no investment outside home country

Multinational Firm

views the world as unique markets, have investments in other countries but do not have coordinated product offerings in each country

multidomestic marketing strategy

have as many different product variations, brand names, and advertising programs as countries in which they do business

transnational firm

views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants rather than differences

global marketing strategy

the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ

Networked Global Marketplace

enables the exchange of goods, services, and information from sellers Anywhere to buyers Anywhere at Any time and at a lower cost.

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

economic espionage

the clandestine collection of trade secrets or proprietary information about a company's competitors

cross-cultural analysis

involves the study of similarities and differences among consumers in two or more nations or societies

values

represent 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 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

cultural symbols

things that represent ideas or concepts in a specific culture

back translation

where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors

cultural ethnocentricity

the belief that aspects of one's culture are superior to another's

consumer ethnocentrism

the tendency to believe that it is inappropriate, indeed immoral, to purchase foreign-made products

economic considerations

1. an assessment of the economic infrastructure in these countries2. measurement of consumer income in different countries3. recognition of a country's currency exchange rates

economic infrastructure

a country's communications, transportation, financial, and distribution systems

currency exchange rate

the price of one country's currency expressed in terms of another country's currency

exporting

producing products in one country and selling them in another country

indirect exporting

when a firm sells its domestically produced products in a foreign country through an intermediary

direct exporting

when a firm sells its domestically produced products in a foreign country without intermediaries

licensing

a company offers the right to a trademark, patent, trade secret, or other similarly valued item of intellectual property in return for a royalty or a fee

Franchising

variation of licensing

joint venture

when a foreign company and a local firm invest together to create a local business

direct investment

entails a domestic firm actually investing in and owning a foreign subsidiary or division

5 product and promotion strategies

Product ExtensionProduct AdaptationProduct InventionCommunication AdaptationDual Adaptation

product extension

selling virtually the same product in other countries

product adaptation

changing a product in some way to make it more appropriate for a country's climate or consumer preferences

product invention

companies can invent totally new products designed to satisfy common needs across countries

communication adaptation

a global communication strategy of fully adapting advertising messages to local markets

dual adaptation strategy

modifying both their products and promotion messages

standardization

all elements of marketing program are same across counties and cultures

customization

one or more elements of the marketing program are adapted to meet the needs or preferences of consumers in a particular country or culture.

4 global assessments

1. economic analysis2. infrastructure and technology3. government actions 4. sociocultural analysis

product

-product extension-product adaptation-product invention

price

-tariffs-quotas-anti-dumping laws-currency exchange policies-competitive factors

place

-global distribution networks-consumers shop small-suppliers must be creative in delivering

promotion

-literacy levels vary by country-firms choose whether to adapt language differences-cultural and religious differences matter

economic analysis

economic environment, market size and population growth, real income

infrastructure and technology

transportation, channels, communication, commerce

government actions

tariff, quota, exchange control, trade agreement

sociocultural analysis

-individualism/collectivistic: how personal needs and goals are prioritized vs. the needs and goals of the group-masculinity/feminine: masculine societies have different rules for men and woman, so less feminine cultures-time orientation: long-term perspective, planning for future vs. short time past and present oriented-power distance: the degree people are comfy with influencing upwards. accept inequality in distribution of poweruncertainty avoidance: how comfy people are with changing the way they work or live -indulgence/ restraint: allowing gratification of basic drives related to enjoying life and having fun vs. regulating thorough strict social norms