Exam 2 Ch 7

Front 1

• Global Competition

Back 1

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

Front 2

three types of global companies

Back 2

o (1) international firms (2) multinational firms (3) transnational firms

Front 3

o international firms

Back 3

o international firms- engages in trade and mareting in different countires as an extension of the marketing strategy in its home country
 these firms market their existing products and services in other countries the same way they do in their home country
• Avon

Front 4

o Multinational firm

Back 4

views the world as consisting of unique parts and markets to each part differently

Front 5

 Multidomestic marketing strategy

Back 5

a multinational firm’s strategy of offering as many different product variations, brand names, and advertising programs as countries in which it does business

Front 6

o Transnational firm

Back 6

- views the world as one market and emphasizes universal consumer needs and wants more than difference among cultures

Front 7

 Global marketing strategy

Back 7

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

Front 8

 global brand

Back 8

a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs

Front 9

• Global Consumers

Back 9

consumer groups living around the world who have similar needs or seek similar benefits from products or services

Front 10

Emergency of Networked Global Marketspace

Back 10

 The use of Internet technology as a tool for exchanging goods, services, and information on a global scale is the fourth trend affecting world trade
 1.7 billion businesses, educational institutions, government agencies, and households worldwide are expected to have Internet access by 2012.
 Companies anywhere to customers anywhere at any time and at a lower cost

Front 11

o Cross-cultural analysis

Back 11

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

Front 12

 Values

Back 12

a society’s personally or socially preferable modes of conduct or states of existence that tend to persist of existence that tend to persist over time

Front 13

 Customs

Back 13

norms and expectations about the way people do things in a specific country

Front 14

• Foreign Corrupt Practices Act (1977)-

Back 14

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

Front 15

 Cultural symbols

Back 15

things that represent ideas or concepts in a specific culture

Front 16

 Language

Back 16

the native tongue of countries in which they market their products and services but also the nuances and idioms of a language

Front 17

• Back translation

Back 17

retranslating a word or phrase back into the original language using a different interpreter to catch errors

Front 18

3  Economic Considerations

Back 18

(1) an assessment of the economic infrastructure in different countries
(2) Measurement of consumer income in different countries
(3) Recognition of a country’s currency exchange rates

Front 19

• Economic infrastructure

Back 19

a country’s communications, transportation, financial, and distribution systems--- is a critical consideration in determining whether to try to market a country’s consumers and organizations

Front 20

 Consumer Income and Purchasing Power

Back 20

o a global marketer selling consumer goods must also consider what the average per capita or household income is among a country’s consumers and how the income is distributed to determine a nation’s purchasing power

Front 21

 Currency Exchange Rates

Back 21

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

Front 22

 Political Stability

Back 22

trade among nations or regions depends on political stability. Billions of dollars have been lost in the Middle East and Africa as a result of internal political strife, terrorism, and war.
o Political stability in a country is affected by numerous factors- government’s orientation toward foreign companies and trade with other countries

Front 23

 Trade Regulations

Back 23

countries have rules that govern business practices within their borders- rules often serve as trade barriers

Front 24

four options for global market entry strategies

Back 24

(1) exporting, (2) licensing, (3) joint venture, (4) direct investment

Front 25

 Exporting-

Back 25

producing goods in one country and selling them in another country

Front 26

o Indirect exporting

Back 26

is 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

Front 27

o Direct Exporting

Back 27

when a firm sells its domestically produced goods in a foreign country without intermediaries
 Most companies become involved in direct exporting when they believe their volume of sales will be sufficiently large and easy to obtain so that they do not require intermediaries

Front 28

 Licensing

Back 28

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 fee

Front 29

Advantages of licensing

Back 29

low risk and the chance to enter a foreign market at little cost (competitive advantage)

Front 30

 Franchising

Back 30

one of the fastest-growing market entry strategies
• (soft-drink, motel, retailing, fast-food, etc.)

Front 31

 Joint Venture

Back 31

when a foreign company and a local firm invest together to create a local business, sharing ownership, control, and the profits of the new company

Front 32

 Direct Investment

Back 32

when a domestic firm actually invests in and owns a foreign subsidiary or division