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86 Cards in this Set
- Front
- Back
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Sovereignty
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The powers exercised by a state in relation to other countries, as well as the supreme powers of a state as exercised over its own inhabitants.
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Stability
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The ideal political climate for a multinational firm is a stable, friendly government.
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Nationalism
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An intense feeling of national pride and unity; an awakening of a nation's people to pride in their country. Nationalism can take on an anti foreign business bias.
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Confiscation
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The seizing of a company's assets without payment. Prominent examples involving U.S. companies occurred in Cuba and Iran.
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Expropriation
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The seizure of an investment by a government in which some reimbursement is made to the investment owner; often the seized investment becomes rationalized.
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Domestication
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A process by which a host country gradually transfers foreign investments to national control and ownership through a series of government decrees mandating local ownership and greater national involvement in company management.
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Green Marketing
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Consideration and concern for the environmental consequences of product formulation, marketing, manufacturing, and packaging.
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Foreign Corrupt Practices Act
FCPA |
The act prohibits U.S. businesses from paying bribes openly or using middlemen as conduits for a bribe when the U.S. official knows that the middleman's payment will be used for a bribe.
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Research Process
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The process of obtaining of obtaining information; it should begin with a definition of the research problem and establishment of objectives, and proceed with an orderly approach to the collection and analysis of data.
1. Define the research problem 2. Develop a research design 3. Determine information needs 4. Collect the Data (Secondary and Primary) 5. Analyze the data and interpret the results 6. Report and present the findings of the study |
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Primary Data
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Data collected, as in market research, specifically for a particular research project.
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Secondary Data
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Data collected by an agency or individual other than the one conducting research; often useful in market research.
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Back Translation
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The process in which a document, such as a questionnaire, or phrase is translated from one language to another and then translated by a second party into the original language. Back translations can be used to verify that the first translation, as of a marketing slogan, has the intended meeting for the targeted audience.
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Parallel Translation
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A method of translation in which two translators are used to make a back translation; the results are compared, differences are discussed, and the most appropriate translation is used. The method addresses the use of common idioms in the languages being translated.
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Infrastructure
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The collective assortment of capital goods that serve the activities of many industries and support production and marketing.
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Big Emerging Markets
(BEM's) |
Used to describe the core group of populous nations that will account for much of the growth in world trade among developing and newly industrialized countries.
1. Are all physically large 2. Have significant populations 3. Represent considerable markets for a wide range of products 4. Have strong rates of growth or the potential for significant growth 5. Have undertaken significant programs of economic reform 6. Are of major political importance within their regions 7. Are “regional economic drivers” 8. Will engender further expansion in neighboring markets as they grow |
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Economic Dualism
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The coexistence of modern and traditional sectors within an economy, especially as found in less-developed countries.
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Free Trade Area
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A type of regional cooperation that involves an agreement between two or more countries to reduce or eliminate customs duties and non tariff trade barriers among partner countries while members maintain individual tariff schedules for external countries. An FTA requires more cooperation than the arrangement known as the regional cooperation for development.
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Customs Union
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A stage in economic cooperation that benefits from a free trade area's reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the union.
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Common Market
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An agreement that eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.
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Political Union
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A fully integrated form of regional cooperation that involves complete political and economic integration, either voluntary or enforced; the most notable example was the now disbanded Council for Mutual Economic Assistance (COMECON), a centrally controlled group of countries organized by the Soviet Union.
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The Economic and Monetary Union
EMU |
Formed by the Masstricht Treaty, which also formed the European Union.
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Mercosur
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An evolving South African union, also called the Southern Cone Free Trade Area, formed in 1991 with the goal of creating a common market and customer union month the participating countries. The original signers were Argentina, Brazil, Paraguay, and Uruguay; Bolivia and Chile later signed agreements with Mercosur.
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North American Free Trade Agreement
NAFTA |
A comprehensive trade agreement that addresses, and in many cases improves all aspects of doing business within North America. By eliminating trade and investment barriers among Canada, the United States, and Mexico, it created one of the largest and richest markets in the world.
Cooperative Market Group |
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ASEAN Free Trade Area
AFTA |
A multinational trade group that evolved from ASEAN
Cooperative Market Group |
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ASEAN
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Association of Southeast Asian Nations
Cooperative Market Group |
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The Asian-Pacific Economic Cooperation
APEC |
A forum that meets annually to discuss regional economic development.
Cooperative Market Group |
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Comparative Advantage
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Relatively better
Ex: Logistics (resources) Patents, Capital, Knowledge, Labor, Component Parts, Suppliers, PP&E, Natural Resources, Processes, Trade Secrets |
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Competitive Advantage
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Ex: Price Advantage
Manipulation of Inputs, Value added Outputs |
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Absolute Advantage
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Everything is better
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International disputes can be resolved by:
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Conciliation (mediation), arbitration, Litigations, lawsuits (should be avoided)
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Conciliation (Mediation)
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NON-BINDING agreement between parties to resolve disputes by asking a third party to mediate differences.
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Arbitration
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Calls for the parties involved to select a disinterested and informed party or parties as referee to determine the merits of the case and make a judgment that both parties agree to honor.
In most countries, decisions reached in formal arbitration are enforceable under the law Cheaper than going to court |
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Lawsuits
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Should be avoided for many reasons including cost, frustrating delays, and extended aggravation, and fear of creating a poor image, damaging public relations, fear of unfair treatment in a foreign court.
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Legal disputes can arise in three situations:
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1. Between governments
2. Between a company and a government 3. Between two companies |
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Determining whose legal system has jurisdiction
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The World Court at The Hague and the International Court of Justice resolve international disputes between sovereign nations of the world rather than between private citizens.
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Legal Systems
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1. Common Law
2. Civil or Code Law 3. Islamic Law 4. Commercial Legal System |
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Common Law
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Derived from English law and found in England, the United States, Canada, and other countries once under English influence.
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Islamic Law
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Derived from the interpretation of the Koran and found in Pakistan, Iran, Saudi arabia, and other iIslamic states.
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Civil or Code Law
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Derived from Roman law and found in Germany, Japan, France, and in non-islamic and non-Marxist countries.
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Intellectual Property Rights
(U.S.) |
In the U.S., a common-law country, ownership of intellectual property rights is established by prior use.
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Intellectual Property Rights
(Code-Law) |
In many code-law countries, ownership is established by registration rather than by prior use.
For example, a trademark in Jordan belongs to whoever registers is first in Jordan. So, there are "McDonalds" restaurants, "Microsoft" software and "Safeway" groceries all legally belonging to a Jordanian. |
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Marketing Laws
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When doing business in more than one country, a firm must comply with different marketing laws.
In Austria, premium offers, free gifts, or coupons are considered as cash discount and are prohibited. Premium offers in Finland are allowed as long as the word free is NOT used. French law permits sales only twice a year, in January and August. |
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Research Problem Formulation
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Any research starts off with a precise definition of the research problem
Once the research issues have been stated management needs to determine the information needs. Ex: Estimate the dollar potential for a prescription weight-loss product in the U.K., Spain, Italy, and Germany. |
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Stages of Economic Development
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Stage 1: The traditional society
Stage 2: The preconditions for take-off Stage 3: The take-off Stage 4: The drive to maturity Stage 5: The age of high mass consumption |
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Economic Development
(Different Classifications) |
Craft
Mechanical Electrical Technological |
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Levels of Development
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MDCs (More-developed Countries) Canada, England, France, German, Japan, and the U.S.
LDCs (Less-developed Countries) Asia and Latin America LLDCs (Least-developed countries) Countries in Central Africa |
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NIC Growth Factors
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1. Political stability in policies affecting their development
2. Economic and legal reforms 3. Entrepreneurship 4. Planning 5. Outward orientation 6. Factors of production 7. Privatization of state-owned enterprises (SOEs) |
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Infrastructure
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Represents those types of capital goods that serve the activities of many industries.
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Infrastructure Impacts
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Included in a country’s infrastructure are paved roads, railroads, seaports, communications networks, and energy supplies—all necessary to support production and marketing
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Strategic Implications
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As a country develops, incomes change, population concentrations shift, expectations for a better life adjust to higher standards, new infrastructures evolve, and social capital investments are made
Market behavior changes and eventually groups of consumers with common tastes and needs (i.e., market segments) arise When incomes rise, new demand is generated at all income levels for everything from soap to automobiles This means that knowledge of stage of market development is important in helping to develop marketing strategies that are tailored to the level of economic development. |
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Regional Cooperation Groups
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A group of countries that have agreed to participate in basic industries beneficial to each or jointly develop joint ventures that benefit both countries, e.g., Colombia and Venezuela built a hydroelectric dam on the Orinico river which both share
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Types of Groupings
(Multinational Cooperation) |
Regional Cooperation Groups
Free Trade Areas Customs Unions Common Markets and Economic Unions Political Unions |
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Planning Process
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Phase 1: Preliminary Analysis and Screening – Matching Company and Country Needs
Phase 2: Adapting the Marketing Mix to Target Markets Phase 3: Developing the Marketing Plan Phase 4: Implementation and Control |
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Alternative Market Entry Strategies
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A company has four different modes of foreign market entry from which to select:
exporting contractual agreements strategic alliances, and direct foreign investment |
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SWOT Analysis
(Strengths, Weaknesses, Opportunities, and threats) |
A SWOT analysis divides the information into two main categories: internal and external factors.
Based on SWOT analysis, marketing executives can construct alternative strategies. The aim of any SWOT analysis should be to isolate the key issues that will be important to the future of the firm and that will be addressed by subsequent marketing strategy. |
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Exporting
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Exporting can be either direct or indirect
In direct exporting the company sells to a customer in another country In contrast, indirect exporting usually means that the company sells to a buyer (importer or distributor) in the home country who in turn exports the product The Internet is becoming increasingly important as a foreign market entry method |
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Licensing
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A means of establishing a foothold in foreign markets without large capital outlays is licensing of patent rights, trademark rights, and the rights to use technological.
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Franchising
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In licensing the franchisor provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management.
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Strategic International Alliance (SIA)
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A business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective.
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Joint Venture
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A partnership of two or more participating companies that have joined forces to create a separate legal entity.
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Consortia
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Consortia are similar to joint ventures and could be classified as such except for two unique characteristics:
1. They typically involve a large number of participants, and 2. They frequently operate in a country or market in which none of the participants is currently active |
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Hyper Competition
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A rapid escalation of competitive tactics used among direct business competitors. Techniques used may include pricing adjustments, increased marketing efforts and product improvements.
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Interdependency
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Dependence of entities such as people or countries on each other. Over the year, the United States' interdependence on other countries for imports has grown to record levels.
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Cross-Subsidization
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A strategy where support for a product comes from the profits generated by another product. This is usually done to attract customers to a newly introduced product by giving them a lower price. The low price is sustained by the earnings of another product sold by the same company.
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Factor Endowments
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Amount of labor, land, money and entrepreneurship that could be exploited for manufacturing within a country. Countries with large factor endowments are often financially better off than countries with less factor endowment.
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Product Differentiation
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Development or incorporation of attributes (such as benefits, price, quality, styling, service, etc.) that A product's intended customers perceive to be different and desirable. Advertising and promotion of a product is based on its differentiating characteristics.
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Porter's 5 Forces
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A model introduced in 1979 by Michael Porter and used by companies for industry analysis and corporate strategy development. The five forces include competition, supplier strength, customer power, the potential for new companies joining the industry, and the threat of substitute products.
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Market Disruption
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Decline in sales to the extent major economic hardships occur, such as one created by surge in imports at the expense of domestic industry.
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Niche Strategy
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A marketing approach for a good or service with features that appeal to a particular minority market subgroup. A typical product marketed using a niche strategy will be easily distinguished from other products, and it will also be produced and sold for specialized uses within its corresponding niche market.
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Political Parties
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In countries where two strong political parties typically succeed on another, it is important to know the direction each arty is likely to take.
Great Britain - The labour party (restrictive trade policies) vs. the Conservative Party (Liberal Trade Policies) Unpredictable and drastic shifts in government policies deter investments, whatever the cause of the shift. |
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Economic Risks
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Exchange controls, Local-Content Laws, Import Restrictions, Tax Controls, Price Controls, Labor Problems.
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Governments can impose restraints on business activity to:
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Protect National Security
Protect an infant industry To conserve scarce foreign exchange Raise revenue Retaliate against unfair trade practices |
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Methods for reducing economic & political risk
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Joint Venture
Expanding the Investment Base Licensing/Franchising Planned Domestication Political Payoffs |
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Piracy
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Unauthorized reproduction of an intellectual property in infringement of copyright law.
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Conceptual Equivalence
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The similarity of linguistic terms and meanings across cultures.
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Scaler Equivalence
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1- Strongly Disagree
2 - Disagree 3 - Somewhat Disagree 4 - Neither Agree nor disagree 5 - Somewhat Agree 6 - Agree 7 - Strongly Agree |
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Non-governmental Organizations
NGOs |
Increasingly affecting policy decisions made by governments
Red cross Habitat for Humanity |
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PSAs
Political and Social Activists |
Individuals who participate in efforts to change the practices and behaviors of corporations and governments, with tactics that can range from peaceful protest to terrorism.
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Marxist-socialist Tenets
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The set of views in which law is subordinate to prevailing economic conditions.
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Prior use versus registration
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The principle, as observed in the U.S. and other common-law nations, that ownership of intellectual property rights goes to whoever can establish first use.
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Analogy
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A method of market estimation that assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country.
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Cybersquatters
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Persons or businesses that buy, usually for a nominal fee, and register as Web site names descriptive nouns, and ethic group names and sell them at an inflated price.
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Marketing Research
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The systematic gather, recording, and analyzing of data to provide information useful in marketing decision making.
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International Marketing Research
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Marketing research plus: The need to communicate info across national boundaries, and the challenge of applying established marketing techniques in the different environments of foreign markets, some of which may be strange or vexing milieus for marketer.
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Expert Opinion
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A method of marketing estimation in which experts are polled for their opinions about market size and growth rates; used particularly in foreign countries that are new to the marketer.
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Decentering
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A method of translation, a variation on back translation, that is a successive process of translation and retranslation.
2 are compared until they are the same. (Different people) |
