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309 Cards in this Set
- Front
- Back
The 3 criteria financial institutions such as ING & Morgan Stanley use to distinguish between emerging markets (EM) & developed markets (DM). To be characterized as a developed country:
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1. The country's income per capita has to exceed $10,000
2. The country has to follow a stable & responsible macroeconomic policy 3. The market capitalization of publicly traded companies & the volume of shares traded on the stock exchange have to be "sufficient." |
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If one or more of the 3 criteria that financial institutions such as ING & Morgan Stanley use to categorize a country as a developed country is not met, then that country is considered a(n) ___.
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EM
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Countries such as ___ & ___ pass the income criterion that financial institutions such as ING & Morgan Stanley use categorize a country as a developed country, but nevertheless belong to EMs.
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Israel; South Korea
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composed from data on life expectancy, education, & per-capita GDP (as an indicator of standard of living) collected at the national level
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United Nations Human Development Index (UN HDI)
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5 aspects of the Main Street (business) view of EMs vs. DMs
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1. purchasing power parity (PPP)
2. total market size 3. growth 4. current customers 5. potential customers |
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2 aspects of PPP in the Main Street (business) view of EMs vs. DMs
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1. GDP vs. PPP
2. Penn Effect |
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An important aspect of current customers in the Main Street (business) view of EMs vs. DMs
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individual purchasing power
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2 important aspects of potential customers in the Main Street (business) view of EMs vs. DMs
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1. total market size
2. growth |
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Why is classification between EMs & DMs important?
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Because of the rise of EMs
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A deep financial crisis & continuing high commodity prices have led to quickly deteriorating ___.
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global growth
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This country has medium growth & medium individual purchasing power.
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China
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This country has low growth & low individual purchasing power.
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Argentina
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This country has medium growth & high individual purchasing power.
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USA
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This country has low growth & medium individual purchasing power.
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Belgium
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4 bigger EMs
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1. Brazil
2. Russia 3. India 4. China |
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3 smaller EMs
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1. Asia
2. Latin America 3. Middle East |
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3 bigger DMs
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1. U.S.
2. Japan 3. Germany |
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3 smaller DMs
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1. Canada
2. Australia 3. New Zealand |
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3 ways that EMs are different from DMs
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1. cross sectional (heterogeneity)
2. Gini Index (individual consumers) 3. longitudinal (rapidly changing) |
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3 aspects of urban vs. rural areas (business customers) in terms of cross sectional (heterogeneity) differences between DMs & EMs
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1. business concentrations
2. labor pools 3. infrastructure development |
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- population: 1.332 billion
- PPP/capita: $6,000 |
China
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- population: 1.168 billion
- PPP/capita: $2,800 |
India
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- population: 127 million
- PPP/capita: $34,200 |
Japan
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- population: 1.295 billion
- PPP/capita: $5,879 |
India & Japan
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4 longitudinal (rapidly changing) aspects of how EMs are different from DMs
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1. economics
2. culture 3. politics 4. environments |
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5 components of Goldman Sachs' Growth Environment Score
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1. macroeconomic stability
2. macroeconomic conditions 3. human capital 4. political conditions 5. technology |
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4 Little Tigers/Dragons in Asia
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1. Hong Kong
2. Singapore 3. Taiwan 4. South Korea |
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The 4 Little Tigers/Dragons' PPP is between ___ & ___.
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$30,000; $50,000
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The size of the 4 Little Tigers/Dragons is between ___ & ___.
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5 million; 45 million
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4 important countries in Southeast Asia
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1. Malaysia
2. Philippines 3. Indonesia 4. Vietnam |
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2 regional trade agreements in Asia (a source of CSA)
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1. ASEAN
2. APEC |
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established in 2010; China Free Trade Area
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Association of South East Nations (ASEAN)
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10 ASEAN members
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1. Brunei Darussalam
2. Cambodia 3. Indonesia 4. Laos 5. Malaysia 6. Myanmar 7. Philippines 8. Singapore 9. Thailand 10. Vietnam |
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- 21 members/countries
- 2.6 billion people - 57% of world GDP - 45.8% of world trade |
Asia-Pacific Economic Cooperation (APEC)
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market summary:
- country demographics - size: from Indonesia's 240 million people to Singapore's 4.5 million - PPP: from Indonesia's $3K to Singapore's $50K - political risks - love-hate relationship with Japan: WWII vs. FDI - nuclear crisis in DPRK (North Korea) - environmental issues - annual growth rates between 5% & 10% - Vietnam's joining of WTO in 2006 - ethnic Chinese with economic leadership - output from raw materials & apparel to technology products |
ASEAN
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size: 880 million (13% of world's population)
basic demographics: - size: between 10 million & 76 million - PPP: between $7,000 & $20,000 N-11: - Turkey Political risks: - NATO vs. Russia Environment issues: - transition economy - EU expansion - solid education system - multiple languages |
Central/Eastern Europe
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27 member countries as of 2008
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EU
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population: 557 million (9% of world's population)
basic demographics: - size: between 15 million & 102 million - PPP: between $8,000 & $14,000 N-11: - Mexico Political risks: - growth fueled by regional trading blocs, a political shift toward increased democracy - Latin America vs. North America - expropriation still possible |
Latin America
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2 regional trade agreement in Latin America (source of CSA)
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1. NAFTA
2. MERCOSUR |
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- regional trade agreement in Latin America
- between Mexico, U.S., & Canada |
NAFTA
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- regional trade agreement in Latin America
- Southern Cone Common Market - between Argentina, Brazil, Paraguay, Uruguay, & Venezuela - 220 million consumers, GDP of $1 trillion - 2nd largest in America (after NAFTA) |
MERCOSUR
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Latin America has a ___ culture: large geographical area, Indian background with Spanish, Portuguese, & Catholic influences, varied ethnicities, monetary & price instability, political upheavals
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colonized
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Latin America's language is Spanish, except for Brazil's ___.
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Portuguese
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Latin America's total population is 537 million people, with ___ largest at 188 million followed by ___ at 102 million.
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Brazil; Mexico
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3 things Latin America's growth is fueled by
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1. regional trading blocs
2. political shift toward increased democracy 3. gradual emergence from a large debt burden in several of the countries |
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In Latin America, ___ is surging.
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free trade
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In Latin America, there is a movement toward ___ marketing.
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pan-regional
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- Total population: 370 million (5% of world's population)
- Basic demographics: - size: between 4 million & 76 million - PPP: between $12,000 & $40,000 - N-11 - Iran, Egypt - Rich in natural resources. As fuel becomes less, & demand from EMs increases, this is an important market to be in. - Muslim influences - Regional instability |
Middle East
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- Considered a CSA of the Middle East
- Includes UAE, Kuwait, Bahrain, Saudia Arabia, Oman, & Qatar |
Gulf Cooperation Council (GCC or CCASG)
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3 economical integrations of the Middle East
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1. customs union in 2003
2. common market in 2008 3. moving towards monetary union in 2010 |
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- high heterogeneity in individual purchasing power
- low heterogeneity in market size |
Middle East
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- high heterogeneity in individual purchasing power
- high heterogeneity in market size |
Asia
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- low heterogeneity in individual purchasing power
- low heterogeneity in market size |
Central/Eastern Europe
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- low heterogeneity in individual purchasing power
- high heterogeneity in market size |
Latin America
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Characteristics of the local culture of ___ include:
- primarily high context culture - different regional influences - religion - colonization - language |
smaller EMs
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- Some smaller EMs that are rich in ___ have had problems with its people suffering under authoritarian political regimes & colonial domination
- ex: Latin America, Middle East, South Africa |
natural raw materials
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- Some smaller EMs are rich in a ___ have turned to Western-style capitalism recently, with the help of FDI
- ex: Asian countries, Central/Eastern European countries, Israel |
skillful labor pool
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- membership in these makes countries in smaller EMs more attractive to foreign investors
- ex: Malaysia & Thailand through ASEAN - enlarge market potential for members - ex: Argentina & Brazil through MERCOSUR - increase economy dependences & risk within trade regions |
trade blocs
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An example of economic instability in Asia was a ___ in Thailand in 1997.
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currency crisis (devaluation)
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An example of economic instability in Central/Eastern Europe was ___ in the early 1990s.
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consumer price inflation
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An example of economic instability in Latin America was a ___ in Mexico in 1994 & in Argentina in 1989 & 2002.
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currency crisis (devaluation)
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An example of economic instability in the Middle East is ___.
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political conflict
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The major global competitor for Latin America is ___.
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the United States
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The major global competitor for Asia is ___.
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Japan
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The major global competitors for Central/Eastern Europe are ___, ___, & ___.
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Germany; the UK; France
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The major global competitors for the Middle East are ___.
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everyone else
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2 implications on competitive strategy for smaller EMs
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1. major global competitors
2. some local competitors |
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3 basic implications on segmentation in smaller EMs
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1. cultural
2. ethnic 3. religious roots |
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5 other implications on segmentation in smaller EMs
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1. significant middle class
2. large metropolitan areas 3. poor rural areas 4. demographics, specifically age & marital status 5. pan-regional marketing via trading blocs |
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Market:
- 0-14 years: 27% - 15-64 years: 66.8% - 65 years & over: 6.3% Literacy rate (2004 estimates): - male: 88.4% - female: 88.8% Industry (2008 estimates): - agriculture: 5.5% - industry: 28.5% - services: 66% Trade partners: - exporting (2007 estimates): 16.1% to the U.S., 9.2% to Argentina, 6.8% to China, 5.6% to the Netherlands, 4.6% to Germany - importing (2007 estimates): 15.7% from the U.S., 10.5% from China, 8.6% from Argentina, 7.2% from Germany, 4.4% from Nigeria - largest Latin American country, population = 188 million - PPP per capita = $8,400. The 10th largest economy in the world ($2.03 trillion), growing at 5.2% in 2008 - Gini Index = 59.7 (in 2004) - Generates 1/3 of South America's economic output, & is a major consumer of its exports - highly attractive to foreign investors - 10% of exports are manufactured goods - Portuguese, not Spanish |
Brazil
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2 natural resource CSAs of Brazil
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1. Companhia Vale do Rio Doce (CVRD)
2. Sadia & Perdigao |
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- considered a natural resource CSA of Brazil
- low cost iron-ore reserves in which Shanghai Baosteel owned 50% of its Agua Limpa iron-mining complex as of 2001 |
Companhia Vale do Rio Doce (CVRD)
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- considered a natural resource CSA of Brazil
- food processors, $2.2 billion & $1.8 billion respectively; sold in over 100 countries; nearly 1/2 its revenue is from foreign markets - abundant production resources for pork, poultry, & grain which are complemented by ideal growing conditions for animal feed & by low labor costs |
Sadia & Perdigao
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- considered a manufacturing CSA of Brazil
- 4th largest aircraft maker in the world - Boeing in the U.S. is largest, followed by Airbus in France, & Bombardier from Canada |
Embraer
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___ of Brazil's population is urban, while ___ is rural.
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80%; 20%
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In Brazil, ___ younger segments reside in urban areas.
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Western-oriented
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How many Federal Subjects does Russia have?
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83
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Market (2008 estimates):
- 0-14 years: 14.6% - 15-64 years: 71.2% - 65 years & over: 14.1% Literacy rate (2002 census) - male: 99.7% - female: 99.2% Industry (2007 estimates): - agriculture: 10.2% - industry: 27.4% - service: 62.4% Trade partners (2007 estimates) - exporting: 12.2% to the Netherlands, 7.8% to Italy, 7.5% to Germany, 5.2% to Turkey, 5% to Belarus, 4.7% to the Ukraine, 4.5% to China - imports: 13.3% from Germany, 12.2% from China, 6.7% from the Ukraine, 6.4% from Japan, 4.8% from the U.S., 4.4% from Belarus, 4.4% from South Korea, 4.3% from Italy - population = 143 million - PPP per capita = $12,100. The 9th largest economy in the world ($2.2 trillion), growing at 7% in the past 10 years - Gini Index = 40 (as of 2002) - a large geographical country surrounded by previous Soviet member states, now independent but still economically linked, including Belarus, Ukraine, & Kazakhstan |
Russia
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The economy of Russia & its role in the global economy is very dependent on its ___.
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hard currency oil export revenues
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Russia's population was 145 million in 2003, but is estimated to be decreasing by about ___ each year, which is unusual among countries.
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half a percent
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Russia as a market has great potential, but ___ makes it a difficult market to operate in.
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political uncertainty
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___ plays an important role in Russia's economic progress, but the government's policies have made it difficult to render.
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Assistance from international agencies
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In Russia, it is necessary to treat ___ & ___ political & legal forces as integral parts of the economic landscape & obstacles to exploiting the large market potential.
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centralizing; authoritarian
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In Russia, ___ at home can also be a problem area for the Western marketer.
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export controls
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In Russia, ___ influences people's attitudes towards the free market system.
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politics
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3 reasons why progress is slow in Russia despite an abundance of natural resources & a highly educated labor force
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1. corruption
2. mismanagement 3. centralization |
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In Russia, development is skewed, prioritizing ___ over ___ & ___.
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heavy industry; consumer goods; agriculture
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In Russia, large disparities in ___ make people doubt democracy.
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income
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In Russia, the prospect of ___ membership in 2006 was questionable.
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WTO
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In Russia, the Ruble is devalued; a ___ economy is prevalent in some parts of the country.
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barter-style
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In Russia, there are internal political problems, including ___.
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terrorism
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In Russia, segmentation is based on ___.
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ethnicity
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When it comes to segmentation in Russia, ___ can be less important than ethnicity.
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national borders
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In Russia, there are ___ younger segments.
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Western-oriented
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5 segmentation categories in Russia
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1. Kuptsi (merchants)
2. Cossacks 3. Students 4. Business executives 5. "Russian souls" |
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- 1 of the segmentation categories in Russia
- 30% men - 45% women - dominant traits include reliant, nationalistic, practical, & value seeking - likely preferences include Volkswagen cars, Chesterfield cigarettes, & Stolichnaya liquor |
Kuptsi (merchants)
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- 1 of the segmentation categories in Russia
- 10% men - 10% women - dominant traits include ambitious, independent, nationalistic, & status seeking - likely preferences include BMW cars, Dunhill cigarettes, & Remy Martin liquor |
Cossacks
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- 1 of the segmentation categories in Russia
- 10% of the men - 5% of the women - dominant traits include passive, scraping by, idealistic, & practical - likely preferences include 2CV cars, Marlboro cigarettes, & local vodka in Smirnoff bottles |
Students
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- 1 of the segmentation categories in Russia
- 25% of the men - 10% of the women - dominant traits include ambitious, Western oriented, busy, & concerned with status - likely preferences include Mercedes cars, Winston cigarettes, & Johnnie Walker liquor |
Business executives
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- 1 of the segmentation categories in Russia
- 25% of the men - 30% of the women - dominant traits include passive, follows others, fears choices, & hopeful - likely preferences include Lada cars, Marlboro cigarettes, & Smirnoff liquor |
"Russian souls"
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Market (2008 estimates)
- 0-14 years: 31.5% - 15-64 years: 63.3% - 65 years & over: 5.2% Literacy rate (2001 census) - male: 73.4% - female: 47.8% Industry (2003 estimates) - agriculture: 60% - industry: 12% - services: 28% Trade partners (2007 estimates) - exporting: 15% to U.S., 8.7% to China, 8.7% to UAE, 4.4% to UK - importing: 10.6% from China, 7.8% from U.S., 4.4% from Germany, 4.4% from Singapore - population = 1 billion. British colony until 1947 - PPP per capita = $3,700. The 4th largest economy in the world ($3.32 trillion), growing at 7% - Gini Index = 32.5 (as of 2000) - Religious & ethnic violence. High political risk, witih religious rifts & Pakistani problem - 80.5% Hindu, 13.4% Muslim, 2.3% Christian, 1.9% Sikh, 1.8% other, .1% unspecified (as of 2001 census) |
India
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During the 1990s in India, socialist policies & government controls are gradually giving way to ___ & ___.
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privatization; free markets
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In India, there is an excellent educational system that was introduced by ___.
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the British
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In India, with liberalization, foreign firms enter via ___, usually as a joint venture with local partners who better understand the marketplace
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FDI
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In India, domestic firms are forced to become more ___, & can draw upon a large & well educated pool of workers.
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efficient
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4 forms of CSA in India
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1. IT (software)
2. pharmaceutical industry 3. services 4. special economic zones |
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- considered a CSA in India
- has global competitors (ex: Infosys) |
IT (software)
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- considered a CSA in India
- mainly generic medicine |
pharmaceutical industry
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- considered a CSA in India
- western outsourcing FDI very strong |
services
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- considered a CSA in India
- aim to replicate the success China has had with them (the FDI model) - began to implement in 2006 - Units within them will be 100% exempt from corporate income tax for the 1st 5 years, 50% exempt for the next 5, & 50% of the profits ploughed back will be exempt from tax for the final 5 years - 267 of them were approved in the 1st 8 months, but the avg. size is small at 1.6 square miles. The largest is in Mumbai with 46 square miles, compared to Shenzen in China with 126 square miles. |
Special Economic Zones (SEZs)
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2 large segments in India
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1. impoverished rural population
2. increasingly well-off urban middle class |
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4 aspects of segmentation in India
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1. huge metropolitan markets
2. increased purchasing power 3. family planning 4. women working |
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In India, traditional habits are changing as the middle class becomes more ___.
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Westernized
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- prominent in China
- 1 country, 2 systems - 2 of them: Hong Kong & Macau - set up as a political model for the return of Taiwan |
Special Administration Region (SAR)
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In China, the ___ has had little effect on economic policy - so far.
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handover of Hong Kong
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Many western firms enter China through ___, where sophisticated trading companies are familiar with western business practices.
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Hong Kong
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___ with Chinese partners are usually done through Hong Kong intermediaries.
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Joint ventures
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Gradually, as more experience is gained, western companies are moving beyond Hong Kong and are dealing with ___ directly.
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mainland China
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Market
- 0-14 years: 20.1% - 15-64 years: 71.9% - 65 years & over: 8% Literacy rate (2000 census) - male: 95.1% - female: 86.5% Industry (2008 estimates) - agriculture: 10.6% - industry: 49.2% - services: 40.2% Trade Partners (2007 estimates) - exports: 19.1% to U.S., 15.1% to Hong Kong, 8.4% to Japan, 4.6% to South Korea, 4% to Germany - imports: 14% from Japan, 10.9% to South Korea, 10.5% to Taiwan, 7.3% to U.S., 4.7% to Germany - PPP per capita = $6,600. 2nd largest economy in the world ($7.8 trillion), growing at 10% the past 25 years - Gini index = 41 (2007 estimate) - has become the new economic superpower in Asia, challenging the preeminence of Japan |
China
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Although it is the largest country in the world with 1.3 billion people, the ___ may lead to a decline in the population.
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one-baby policy
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China became a WTO member in ___, accelerating trade between it & other major economies
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2001
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China took over Hong Kong in ___, & it is still one of the most important trading platforms for China, although the center position started to shift fo Beijing, Shanghai, Shenzhen, etc.
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1997
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China's takeover of Hong Kong has been relatively ___.
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"hands-off"
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Because China is changing fast in every fundamental dimension (economically, politically, culturally, etc.), you must adopt a ___ view to look at China.
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dynamic
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4 CSAs in China because of a big market & growing purchasing power
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1. cell phone
2. auto 3. internet 4. banking |
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- considered a CSA in China because of a big market & growing purchasing power
- the largest market since 2006 |
cell phone
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- considered a CSA in China because of a big market & growing purchasing power
- the 2nd largest since 2006 at 7.3 million. Behind the U.S. at 16.5 million, & ahead of Japan at 5.7 million - the largest in January 2009 |
auto
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- considered a CSA in China because of a big market & growing purchasing power
- the largest market |
internet
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- considered a CSA in China because of a big market & growing purchasing power
- home to the top 3 largest in the capitalization (word) in 2009 |
banking
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- considered a CSA in China
- moving from the state sector to the private sector - "socialist" market economy |
Transition Economy I
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4 different Trade Zones that make up China's SEZs
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1. Free Trade Zone
2. Export Processing Zone 3. Economic & Technological Development Zone 4. Special Administration Region |
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2 sectors where China boasts a top-notch infrastructure as part of its SEZs
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1. hardware
2. software |
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The China-Singapore Suzhou Industrial Park is an example of a ___.
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SEZ
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- considered a CSA of China
- moving from world workers to world players - moving from manufacturing to service - moving from OEM to branding/channel - industry structure - currently, Chinese brands make up <20% of GDP - the aim is for Chinese brands to make up >20% of exports |
Transition Economy II
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How many brands from China were ranked in the Top 100 global brands by Businessweek in 2010?
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0
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What percentage of Chinese brands are exported?
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<20%
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(time period) in China:
Low tech economy with high intensiy labor and mostly manufacturing jobs (e.g., toys). Exporting for foreign reserve. |
1980s & 1990s
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(time period) in China:
high tech economy with low intensity labor and mostly manufacturing jobs (e.g., computers). Market access for tech transfer. |
present day
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(time period) in China:
R&D based economy, jobs made up of service & products (e.g., innovation). Chinese brands produced for global markets |
near future
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3 other CSAs of China
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1. Business sector
2. Financial sector 3. Knowledge assets |
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4 aspects China's business sector CSA is broken up into
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1. R&D
2. technology transfer 3. merger & acquisition 4. Greenfield |
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2 aspects China's financial sector CSA is broken up into
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1. external
2. internal |
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one of the 5 geographic regions of China with Shanghai as the center
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Eastern China
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one of the 5 geographic regions of China with Beijing as the center
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Northern China
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one of the 5 geographic regions of China with Guangzhou & Shenzhen as the center
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Southern China
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one of the 5 geographic regions of China with Chengdu & Chong Qing as the center
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Western China
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one of the 5 geographic regions of China with Changsha & Wuhan as the center
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Central China
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One long-term benefit of BRIC is that they are considered ___ markets.
- Their per capita PPP is still low, but any segment is big enough to sustain entry |
heterogeneous
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One of the long-term benefits of ___ is that they are big in size of land, population, & economy
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BRIC
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One of the long-term benefits of BRIC is that they have big ___ markets, suggesting less dependence on trading & higher economic stability
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local
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One strategic importance of BRIC is that they are harder to ___ as a result of high competition.
- well-established culture powerhouse, with multiple diversified subcultures - solid education systems; skillful labor forces; strong social control; a secure life - everybody wants to be there |
penetrate
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One strategic importance of BRIC is their high ___ as a result of high competition.
- technology transfer rather than product exchange |
bargaining power
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- considered a strategic importance of BRIC
- rapidly developing economy - domestic competition with their new global challengers |
proactive mentality
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In 1994, this country's transition involved battling inflation & privatization
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Brazil
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In 1991, this country's transition involved Gorbachev's Big-Bang Theory
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Russia
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In 1990, this country's transition involved the sentiment of, "If China can, so can we!" and economic reform.
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India
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In 1980, this country's transition involved Deng's crossing the river by feeling for stones
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China
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- top-down implication
- CSA is that it is a major supplier of raw materials |
Russia
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- top-down implication
- CSA is that is a major supplier of products & services |
China
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- bottom-up implication
- CSA is that it is rich in natural resources |
Brazil
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- bottom-up implication
- CSA is that it is rich in labor |
India
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___ averages an inflation rate of 8% and a government deficit of 2.3% of GDP
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China
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Through the 1990s, ___ averaged an inflation rate of 548% & had a government deficit of 21.2% of GDP
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Brazil
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In BRIC, competition not only comes from ___, but more likely from ___.
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foreign MNCs; domestic firms
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In BRIC, large heterogeneity & big size of the market renders particular importance on a ___ marketing approach.
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segment-based
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In BRIC, high-end positioning may yield ___.
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first mover advantage
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In BRIC, low-end positioning places the firm in direct competition with strong ___.
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domestic brands
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- heterogeneity may make some markets attractive
- more dependent on international trading - regional trading blocs are important for economic stability - Mercosur currency - can be penetrated fast & saturated fast as well - short-term consideration for domestic market - a middle ground to serve other markets |
smaller emerging markets
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- heterogeneity may make all markets attractive
- less dependent on international trading - serve as a source of regional economic stability because of its local market size - can be sustained for a long-term growth - strategic - patient - high risk & high return |
bigger emerging markets
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- in retailing shopping behavior of OECD countries with different cultures
- the order of priorities of signals in assessment of quality are unanimously the same |
Dawar & Parker (1994)
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the typical way of analyzing global customers is similar to the so-called ___ framework
- essential to understand the customers because customers are heterogeneous - raises business/marketing efficiency |
S-T-P
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- component of the S-T-P framework
- the splitting up of the total market into segments of more homogeneous subgroups |
segmentation
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- component of the S-T-P framework
- the selection of which one(s) of the segments the company should market its product |
targeting
|
|
- component of the S-T-P framework
- exactly how the company should present the product to the target market(s) so its perception is most advantageous relative to competition |
positioning
|
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2 things that global marketing can easily lead to
|
1. mis-positioned products
2. local resistance & animosity |
|
- 1 thing that global marketing can easily lead to
- leads to inappropriate promotional appeals |
mis-positioned products
|
|
- 1 thing that global marketing can easily lead to
- not good, considering anti-globalization & anti-American sentiments |
local resistance & animosity
|
|
The typical context for globalized marketing is not the usual ___ mindset.
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"close to customer"
|
|
The point of globalized marketing is usually to coordinate ___ across a wide variety of markets where the firm does business.
|
marketing activities
|
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A ___ approach easily leads to insensitivity towards local customers & local requirements, & conflicts with local subsidiaries.
|
top-down
|
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When conducting STP, it is important to maintain a ___ orientation - sell what we make, the product line is given.
|
selling
|
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When conducting STP, it is important to ___ products as much as possible.
|
standardize
|
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When conducting STP, it is important to ___ via new reporting lines to make sure everyone is on board.
|
coordinate
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When conducting STP, ___ of the marketing effort makes sure all people speak the same language.
|
centralization
|
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2 aspects in the scope of marketing
|
1. multidomestic
2. global |
|
in micro-segmentation, the 5 characteristics that useful markets possess
|
1. identifiable
2. willing to buy 3. able to buy 4. measurable 5. reachable |
|
- one of the characteristics that useful markets possess in micro-segmentation
- what distinguishes them? |
identifiable
|
|
- one of the characteristics that useful markets possess in micro-segmentation
- do they want it? |
willing to buy
|
|
- one of the characteristics that useful markets possess in micro-segmentation
- can they afford it? |
able to buy
|
|
- one of the characteristics that useful markets possess in micro-segmentation
- how many belong to each segment? |
measurable
|
|
- one of the characteristics that useful markets possess in micro-segmentation
- how to distribute to, communicate to, each segment? |
reachable
|
|
2 typical segmentation criteria when it comes to micro-segmentation
|
1. generic attributes (marketers often do)
2. benefits oriented attributes (marketers should do) |
|
- a generic attribute of micro-segmentation
- the most basic micro segmentation is still ___ |
economic development
|
|
- a generic attribute of micro-segmentation
- the age & family structure in different countries play an important role in determining global segments |
demographic
|
|
2 generic attributes of micro-segmentation
|
1. economic
2. demographic |
|
2 benefits oriented attributes of micro-segmentation
|
1. culture
2. lifestyle |
|
- one of the benefits oriented attributes of micro-segmentation
- people care about their identity even though a lot has been said in the media about the emergence of global segments of people |
culture
|
|
- one of the benefits oriented attributes of micro-segmentation
- consumers start developing one of their own with buying behavior involving more than simple necessities |
lifestyle
|
|
- characteristics that help us find & reach segments
- may be interchangeably used with bases in practice, but they are conceptually different - using these instead of bases as segmentation criteria is the major problem |
descriptors
|
|
- characteristics that tell us why segments differ (eg., needs, preferences, decision processes)
- may be interchangeably used with descriptors in practice, but they are conceptually different |
bases
|
|
clustering of country markets on the basis of common characteristics deemed to be important for marketing purposes, e.g. data on generic attributes & benefit oriented attributes
|
macro-segmentation
|
|
9 generic attributes of macro-segmentation when it comes to country characteristics
|
1. population size
2. population character 3. disposable income levels 4. educational background 5. primary languages 6. level of developoment 7. rate of growth in GDP 8. infrastructure 9. political affiliation |
|
2 benefit oriented attributes of macro-economic segmentation when it comes to country characteristics
|
1. lifestyle
2. think & feel |
|
macro-level country characteristics is widely used in ___ because of its simplicity
|
industry
|
|
The ___ is often adopted in global segmentation to achieve the balance of practicality & relevance
|
two-step process
|
|
the choice of which countries & which segment(s) to target invovles an analysis of ___ over the planning horizon
|
projected profitability
|
|
the basic computation of projected profitability invovles ___ in a segment & the market share that the firm can expect to achieve
|
forecasting sales
|
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___ is also necessary when analyzing projected profitability, especially if the target segment is likely to be brand loyal.
|
Predicting competitive reactions
|
|
To be a player in different countries & different market segments. Difficulties in one market segment or country can be offset by gains elsewhere.
|
diversification strategy
|
|
Markets & segments can be given more attention & market positions fortified. This is particularly advantageous when the country or segment compeititive rivalry is intense (ex: hyper-competition)
|
focus strategy
|
|
all about "differentiation" or "uniqueness" of your marketing offer to the targeted segment
|
positioning
|
|
To identify the optimal position, global marketing draws on the same techniques as domestic marketers in mapping out a visual representation of how the customers view the competing brands on the market, which is commonly called ___ or, more commonly, the ___.
|
"perceptual space;" "product space"
|
|
For positioning, marketers should use the marketing mix (the 4 Ps) to present the product to the selected target market(s) so that it is ___ in the most favorable way relative to preferences & competition.
|
perceived
|
|
the same 4 sets of data in positioning, but may have different implications in different country markets (e.g., culture, competitors, PLC)
|
1. salient attributes
2. evoked set 3. attribute rankings 4. preferences |
|
- one of the same 4 sets of data in positioning, but may have different implications in different country markets
- data on what attributes a customer looks for in a product |
salient attributes
|
|
- one of the same 4 sets of data in positioning, but may have different implications in different country markets
- identifying what brands are considered by the buyer |
evoked set
|
|
- one of the same 4 sets of data in positioning, but may have different implications in different country markets
- how the individual rates the brands in the evoked set on salient attributes |
attribute ratings
|
|
- one of the same 4 sets of data in positioning, but may have different implications in different country markets
- how the brands rank in terms of overall preferences |
preferences
|
|
3 different effects on buyers when a globally standardized product or brand is introduced on a local market (in practice, all 3 processes are often at work simultaneously)
|
1. new perception
2. perception change 3. preference change |
|
- one of the effectson buyers when a globally standardized product or brand is introduced on a local market
- new brand simply targets one untapped segment |
new perception
|
|
- one of the effectson buyers when a globally standardized product or brand is introduced on a local market
- the product space is altered, by adding dimensions or extending endpoints |
perception change
|
|
- one of the effectson buyers when a globally standardized product or brand is introduced on a local market
- buyer preferences are changed |
preference change
|
|
2 aspects of perception change in positioning
|
1. extended product space
2. added dimensions |
|
- an aspect of perception change in positioning
- occurs when globally standardized products offer more of the salient features desired. The new features tend to enlarge the space which defines the product (ex: more memory in PCs) |
extended product space
|
|
- an aspect of perception change in positioning
- occurs when the globally standardized product offers important new features (ex: camera on a cell phone) |
added dimensions
|
|
When standardized products are marketed in global markets, they are often ___ (not hitting the target bullseye).
|
"mispositioned"
|
|
3 reasons why consumers might still buy mispositioned products
- causes marketers to not see the problem right away |
1. brand image
2. country of origin 3. lower price |
|
What is the essential damage for mispositioning?
|
sustainability in global competition
|
|
2 global STP approaches on market segmentation/targeting
|
1. similar segment
2. different segment |
|
2 global STP approahces on product positioning
|
1. similar positioning
2. different positioning |
|
3 economic rationales
|
1. permanent income
2. relative income hypothesis 3. conspicuous consumption |
|
- economic rationale developed by Milton Friedman
- the regularly expected income is what determines an individual's consumption |
permanent income
|
|
- economic rationale developed by James Duesenberry
- consumer's well-being is a function of how much income they have relative to their peer groups, not the actual income |
relative income hypothesis
|
|
- economic rationale developed by Thorstein Veblen
- the notion that people make purchases of expensive brands & products in order to display their ability to afford them |
conspicuous consumption
|
|
The gap between a new & used car in China is much (bigger/smaller) than in the U.S.
|
bigger
|
|
psychological bias that states that we tend to be willing to gather facts that support certain conclusions but disregard other facts that support different conclusions
|
selective search for evidence
|
|
psychological bias that states that we tend to accept the 1st alternative that looks like it might work
|
premature termination of search for evidence
|
|
psychological bias that suggests there is unwillingness to change thought patterns that we have used in the past in the face of new circumstances
|
conservatism & inertia
|
|
psychological bias that suggests there is unwillingness or inability to look beyond the scope of our past experiences; rejection of the unfamiliar
|
experiential limitations
|
|
psychological bias that states that we actively screen out information that we do not think is salient
|
selective perception
|
|
psychological bias that states that we tend to want to see things in a positive light & this can distort our perception & thinking
|
wishful thinking or optimism
|
|
psychological bias that states that we tend to place more attention on more recent information & either ignore or forget more distant information
|
recency
|
|
psychological bias that suggests there is a willingness to believe what we have been told most often and by the greatest number of different of sources
|
repetition bias
|
|
psychological bias that states that decisions are unduly influenced by initial informatoin that shapes our view of subsequent informatoin
|
anchoring
|
|
psychological bias that suggests there is peer pressure to conform to the opinions held by the group
|
group think
|
|
psychological bias that states that we reject something if we have a bias against the person, organization, or group to which the person belongs: we are inclined to accept a statement by someone we like
|
source credibility bias
|
|
psychological bias that states that we look at a decision as a small step in a process & this tends to perpetuate a series of similar decisions. This can be contrasted with zero-based decision making.
|
incremental decision making & escalating commitment
|
|
psychological bias that suggests there is an unwillingness to apply the same decision criteria in similar situations
|
inconsistency
|
|
psychological bias that states that we tend to attribute our success to our abilities & talents, but we attribute our failures to bad luck & external factors. We attribute others' success to good luck, & their failures to their mistakes.
|
attribution asymmetry
|
|
psychological bias that states that we conform to the decision making expectations that others have of someone in our position
|
role fulfillment
|
|
psychological bias that states that we tend to underestimate future uncertainty because we tend to believe that we have more control over events than we really do
|
underestimating uncertainty & the illusion of control
|
|
psychological bias that states that in order to simplify an extreme complex world, we tend to group things & people. These simplifying generalizations can bias decision making processes
|
faulty overgeneralizations
|
|
psychological bias that states that we tend to ascribe causation even when the evidence only suggests correlation. Just because birds fly to the equatorial regions when the trees lose their leaves does not mean that the birds migrate BECAUSE the trees lose their leaves
|
ascription of causality
|
|
5 external influences of a "combined" customer
|
1. environment
2. economics 3. technology 4. culture 5. psychology |
|
2 "models of man" when it comes to a "combined" customer
|
1. buyer characteristics
2. buyer decision process |
|
4 buyer choices of a "combined" customer
|
1. product choice
2. brand choice 3. store choice 4. supplier choice |
|
the "models of man" of a "combined" customer represent a ___ marketing effort.
|
local
|
|
Buyers are ___-oriented - they buy for a reason (motivation).
- what does the product/service do for the buyer? - how does it fit into the consumption & use pattern of the buyer? - what is the perceived risk & how high is it? |
goal
|
|
The ___ often differs between local markets because they have different perception & preference.
|
core benefit
|
|
5 steps in the buyer decision process
|
1. problem recognition
2. search 3. evaluation of alternatives 4. choice 5. outcomes |
|
- part of the buyer decision process
- a ___ is when an individual perceives a difference between an ideal & an actual state of affaris |
problem
|
|
___ often lead to tension & a recognized "problem"
|
new products
|
|
For the local marketer, it is important to recognize that education about the ___ might be necessary in order to create a demand for the product
|
core benefits
|
|
A consumer's search for alternative ways to solve the problem is closely related to his/her level of ___ with the product category
|
involvement
|
|
for products with which involvement is ___, search tends to be more comprehensive & time consuming
|
high
|
|
for convenience & habit purchases, the decision process is ___, with little need for extensive searches or alternative evaluations
|
shorter
|
|
___ is dependent on the perceived availability of the alternative
|
search intensity
|
|
one advantage for a product with high global brand awareness is that initial ___ is easier to overcome
|
distrust
|
|
the evaluation of alternatives step of the buyer decision process is for when a new product or service is in the ___.
|
"consideration set"
|
|
A ___ individual will process the available information matching the pros & cons of the alternatives against preferences
|
highly involved
|
|
2 ways consumers can deal with multi-attribute evaluations
|
1. "hierarchical" decision rule
2. "compensatory" rule |
|
- one way consumers can deal with multi-attribute evaluations
- use gradually less-important features to successively screen out alternatives |
"hierarchical" decisoin rule
|
|
- one way consumers can deal with multi-attribute evaluations
- consider all features simultaneously - hard to do |
"compensatory" rule
|
|
2 things that the final choice in the buyer decision process of which alternative to select or try is typically influenced by
|
1. social norms
2. situational factors |
|
- strong where there are group pressures to comply; influence is expected to override multiattributed evaluation
- can be usefully analyzed by the Fishbein model - involves 2 aspects: (1) social forces, & (2) motivation to comply |
social norms
|
|
a hypothesis that people value a product more once their property right to it has been established. In other words, people place a higher value on objects they own relative to objects they do not
|
endowment effect
|
|
The Mug Experiment: people demanded a (higher/lower) price for a coffee mug that had been given to them, but a (higher/lower) price on one they did not own yet
- example of the endowment effect |
higher/lower
|
|
In the China housing market, buying is much (more/less) expensive than renting
- what do people choose to do? |
- more
- buy |
|
In the China auto market, ___ is popular, while ___ is not.
|
buying; leasing
|
|
In the buyer decision process, the main question about the outcomes revolves around the degree of ___.
|
customer satisfaction
|
|
particularly important in mature markets where choices are many & the needs are already well met
|
customer satisfaction
|
|
satisfaction engenders ___ to the brand & to the company
|
loyalty
|
|
because buying is typically a risky choice between different brands, the marketer has to make sure that the customer does not encounter ___, a sense of possibility making the wrong choices
|
cognitive dissonance
|
|
The marketing implications of the ___ theory is to get satisfied customers to endorse the product - a common strategy in advertising
|
prospect
|
|
The business-to-business (B2B) marketing task states that:
|
the marketer should help the buying organization succeed
|
|
- Industrial buyers are influenced by the same forces as individual consumers, but also conditioned by the ___ in which they operate.
- It reflects company policies & ways of making decisions |
organizational culture
|
|
The ___ process involves several stages from problem recognition to performance review.
|
industrial buying
|
|
The key to success in industrial buying is ___.
|
relationship building
|
|
3 different perspectives in determinants of inter-organizational trust
|
1. relationship-based
2. process-based 3. economic hostage-based |
|
- a perspective in determinants of inter-organizational trust
- social relations, length & intensity - works in Japan only |
relationship-based perspective
|
|
- a perspective in determinants of inter-organizational trust
- institutional arrangements, selection process, buyer assistance routines - supported by the U.S., Japan & Korea |
process-based perspective
|
|
- a perspective in determinants of inter-organizational trust
- economically credible commitments, stock ownership - not supported in U.S., Japan, or Korea |
economic hostage-based perspective
|
|
- applied to a marketing effort involving:
- various personalized services - creation of new & additional services - customizing a company's offering to the needs of a special buyer - takes a long-term view - since without it, the effort required to build a relationship is not worth it - it is particularly important for countries which hold value in long-term view |
customer relationship
|
|
4 things a marketer can do to create a workable relationship
|
1. adopt the buyer's viewpoint
2. accept & demand transparency 3. grow with the relationship 4. be proactive |
|
Marketers should always consider how the culture of the ___ & the culture of the ___ affect customer relationships.
|
nation; organization
|
|
The ___ approach of micro level research is characterized by having a lower cost & being fast
|
secondary
|
|
The ___ approach of micro level research is characterized by having a higher relevance.
|
primary
|
|
- As companies become global marketers & seek to standardize various parts of the marketing mix across several countries, ___ becomes more important
- involves dealing with countries that have different languages, economies, social structures, behavior, & attitude patterns - in some cases the entire research design may have to be different between 2 countries to maximize the comparability of the results |
multicultural research
|
|
- ___ have become standard for initial exploratory research
- in foreign markets, they have the advantage of being relatively inexpensive, can be completed quickly, & can reach local pockets of the market - unfortunately, they can also constitute an unrepresentative sample because typical screening criteria are incorrect in the new environment or are not implemented correctly |
focus groups
|
|
- ___ of large (n = 500+) random samples drawn from a sampling frame of representative product users are of central importance in marketing research
|
consumer surveys
|
|
In ___ cultures especially, one cannot fully understand consumers from their responses to standard survey questions. This is a cultural problem invovlved in the typical consumer survey
|
high context
|
|
Informal ___ are prone to bias because of demand characteristics. This is a cultural problem involved in the typical consumer survey
|
face-to-face interviews
|
|
- ___ of distribution channels & trade associations can provide a good starting point for further data gathering & analysis
- In the U.S., the use of middlemen for information about consumers is usually limited to the sales & scanner records of retailers & wholesalers - In countries with less social mobility & less diversity than the U.S., key informants in the trade are good sources of information about buyers |
trade surveys
|
|
- experiment
- lab - field - its value depends on the stage of presence (new or long-established) & area (e.g., advertising) |
causal research
|
|
- In attitude ___, very basic factors can create difficulties
- the cognitive & emotional concepts measured may not be equivalent across cultures - this means ___ is questionable |
- scaling
- measurement equivalence |
|
The ___ employed in the typical consumer survey needs to be carefully pre-tested & translated into the foreign language
|
questionnaire
|
|
The questionnaire employed in the typical consumer survey should be ___ for verification & adjustment.
|
back-translated
|
|
In ___ cultures, the questionnaires employed in the typical consumer survey are typically much longer because of the need to establish the proper context for the questions.
|
high-context
|
|
- lack of comprehensive & reliable sampling frames has long been a problem for marketing researchers in many countries
- emergence of firms that specialize in developing lists for direct marketing & survey research is gradually resolving the problem - still, ___ can be questionable because the appropriate profiles differ (e.g., "high" income in one country might not be "high" in another) |
sampling equivalence
|