Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
24 Cards in this Set
- Front
- Back
|
__ % of world trade is goods |
75% goods 25% services |
|
|
What is countertrade? |
A bartering system common for trade in the 3W (third world) * 70% of world doesn't have convertible currencies * gov. owned businesses lack sufficient funds * 15-20% of world uses counter trade for global sales |
|
|
What is the trade feedback effect? |
Imports of one country affect exports of another country.
Major argument for free trade.
* exports increase, income rises, demand for imports increases, exports of other country rises, their income rises, then they demand more imports |
|
|
What is GDP? |
Gross domestic product: total monetary value of goods/services produced in one country in one year
Canada exports 35% of GDP USA imports 80% of canada's exports Then EU Then Japan
These 4 countries account for 2/3 of world trade |
|
|
What is balance of trade? |
Difference between monetary value of country's imports and exports
Imports < exports = surplus Imports > exports = deficit |
|
|
Describe porter's diamond of national competitive advantage |
The 4 reasons why some nations become prominent in world trade and others fail
1) factor conditions (ability to turn your resources into exports) 2) demand conditions (sophistication of consumer demand quality; size of market; media exposure of products) 3) related supporting industries (clusters of world class suppliers in a given area that accelerate innovation) 4) company strategy, structure, rivalry (governing how a nation's business is organized; public/private ownership; # of companies in industry; intensity of domestic comeptition |
|
|
What are 4 trends that have influenced the landscape of global marketing in the past decade? |
1) Gradual decline of economic protectionism by countries 2) Formal economic integration & free trade amongst nations 3) Global competition among global companies for global consumers 4) Development of networked global market place |
|
|
Define protectionism, tariffs, and quotas. |
Protectionism: protecting certain industries within the countries from foreign competition through tariffs and quotas.
Tariffs: government taxes on goods/services entering a country, raising the price for locals (average tariff is 4)
Quotas: restriction on the amount of product allowed to enter/leave the country (guarantees the domestic industry access to a certain part of the domestic market) |
|
|
What are the effects of protectionism and why is it declining? |
Protectionism limits the outsourcing of jobs, protects a nation's political security, discourages economic dependency on other countries, and encourages development of domestic industries.
It is declining because of the GATT (General Agreement on Tariffs and Trade) designed to limit trade barriers. |
|
|
Describe formal economic integration / free trade as a trend influencing the landscape of global marketing. |
Economic integration is when countries with similar economic goals form trade groups or trade agreements such as NAFTA in order to promote free trade and benefit the economy |
|
|
Define global competition and strategic alliance |
Global competition: when firms originate/product/market their products/services worldwide
Strategic alliance: agreements amongst 2+ independent firms to cooperate in order to achieve a common goal |
|
|
What are the 3 main types of global companies that compete in the global marketplace?
Differentiate between multidomestic marketing strategy and global marketing strategy. |
1) International - show up in foreign country as an extension of what they do in home country - same marketing strategy
2) Multinational - markets differently to each part of the world - multidomestic marketing strategy (have as many products/brands as they do countries in which they do business)
3) Transnational - focuses on universal wants/needs more than on differences - use global marketing strategy (standardizing marketing activities in similar cultures and adapting them when cultures differ) |
|
|
What is a global consumer? |
Group of consumers living in different parts of the world that have similar needs/wants/values. |
|
|
What does the 4th trend of global marketing mean by developing a networked global marketplace? |
The use of internet as a tool for exchanging goods/services/information on a global scale. |
|
|
What is semiotics? |
The field of study examining the relationship between people symbols and their meaning to people |
|
|
What are some environmental factors that shape global marketing efforts? |
Cultural - language - customs - ethnocentricity
Economic - currency exchange rates - consumer income - developing/developed economic state/infrastructure
Regulatory - political stability - trade regulations |
|
|
What are 4 ways companies enter global markets? |
1) Exporting 2) Licensing 3) Joint venture 4) Direct investment |
|
|
Explain exporting |
Producing goods in one country and selling them in another Requires least amount of changes in product/goals Host countries don't like this because it provides less local employment
2 types: direct exporting: no intermediary so more profit but more risk indirect exporting: domestically produced goods are sold through an intermediary that knows the country well, less risk so less profit
|
|
|
Explain licensing |
Company offers the rights to trademark/patent in exchange for a fee Pros: low risk, no capital required Cons: give up control, reduce profits, reputation at stake
2 types: contract manufacturing: that country makes the parts contract assembly: that country puts together the parts you make in your home country
(Franchising is a variation of licensing) |
|
|
Explain joint venturing |
When foreign company and local firm invest together to create local business They share ownership, control, and profits Pros; more resources Cons: more disagreements
|
|
|
Explain direct investment |
a domestic firm actually investing in and owning a foreign subsidiary/division huge commitment pros: fewer restrictions & better understanding of local market cons: financial commitment, risk |
|
|
Products in global markets can be sold in 3 ways... |
1) Product extension: selling virtually the same product in other countries (cocacola)
2) Product adaptation: changing the product to make it more appropriate for the climate/culture (rabbit meat baby food in Poland)
3) product invention: creating a totally new product |
|
|
What is dumping? |
When a firm sells a product in a foreign country below its domestic price either to a) build market share at competitive price or b) get rid of a product that isn't selling in the domestic market |
|
|
What is the grey market? |
When products are sold through unauthorized channels of distribution. |
