Chapter 9

Front 1

Know what the chapter says about the importance of the economic level of a country when it comes to a foreign marketer adjusting its marketing tasks. pp. 258-9

Back 1

single most important environmental element to which the foreign marketer must adjust the marketing task

Front 2

Know and be able to briefly describe each of the three categories of the United Nations classification of a country’s stage of economic development. Also, know what the UN’s classification scheme is based on. pp. 259-61

Back 2

MDCs - more - developed countries. Industrialized countries with high per capita incomes such as Canada, England, France, Germany, Japan, and the US.

LDCs - less developed countries. Industrially developing countries just entering world trade, many of which are in Asia and Latin America, with relatively low per capita incomes.

LLDCs - least - developed countries.

Industrially underdeveloped, agrarian, subsistence societies with rural populations, extremely low per capita income levels, and little world trade involvement.

Front 3

Know what NICs are and be able to characterize them. Also, know whether they attract or repel trade and foreign direct investment. p. 260

Back 3

Newly Industrialized Countries. They have shown rapid industrization of targeted industries and have per capita incomes that exceed other developing countries. They have moved away from restrictive trade practices and instituted significant free market reforms; as a result, they ATTRACT both trade and foreign direct investment.

Front 4

Know the economic growth factors and why they are useful to marketers. pp. 261-3

Back 4

- Political stability in policies affecting their development

- economic and legal reforms. Poorly defined and/or weakly enforced contract and property rights re features the poorest countries have in common

- Entrepreneurship. In all of these nations, free enterprise in the hands of the self employed was the seed of the new economic growth

- Planning. A central plan with observable and measurable development goals linked to specific policies was in place.

- Outward orientation. Production for the domestic market and export markets with increases in efficiencies and continual differentiation of exports from competition was the focus

- Factors of production. If deficient in the factors of production land (raw materials) labor, capital, management , and technology - an environment existed where these factors could easily come from outside the country and be directed to development objectives

- industries targeted for growth. Strategically directed industrial and international trade policies were created to identify those sectors where opportunity existed. Key industries were encouraged to achieve better positions in world markets by directing resources into promising target sectors.

- Incentives to force a high domestic rate of saving and direct capital to update the infrastructure, transportation, housing, education, and training

- Privatization of state owned enterprises (SOEs) that had placed a drain on national budgets. Privatization released immediate capital to invest in strategic areas and gave budgets. Privatization released immediate capital to invest in strategic areas and gave relief from a continuing drain on future national resources. Often when industries are privatized, the new investors modernize, thus creating new economic growth.

Front 5

Know how a country’s investment in information technology relates to its economic growth. p. 263

Back 5

an important key to economic growth
new innovative electronic technologies can be the key to a sustainable future for developed and developing nations alike
smaller firms in emerging economies can now sell into a global market

Front 6

Know what the fundamental objective of most developing countries is. p 263

Back 6

industrialization

Front 7

know what the term “infrastructure” refers to and be able to give examples of it. 264

Back 7

Infrastructure represents those types of capital goods that serve the actives of many industries. e.g.. Paved roads, railroads, seaports, communication networks, financial networks, and energy supplies and distribution - all necessary to support production and marketing.

Front 8

Know why infrastructure is a crucial component of the uncontrollable elements facing marketers. 264-5

Back 8

Without adequate transportation facilities, for example, distribution costs can increase substantially, and the ability to reach certain segments of the market is impaired.

Front 9

Be able to explain what business function serves as an arbitrator between productive capacity and consumer demand. 265

Back 9

Marketing

Front 10

Know and be able to explain what it means to say that the level of market development roughly parallels the stages of economic development. 265-7

Back 10

the more developed a country's economy, the greater variety of marketing functions demanded and more sophisticated institutions become to perform them

Front 11

Know and be able to explain what BEMs are, their important traits, and be able to explain what occurs in them (and how they are similar to the situation after World War II). 270-1

Back 11

big emerging markets

geographically large, large pop, sizable market with wide range, strong growth rate, economic reform, major political importance, regional economic driver, further expansion into neighboring markets

Front 12

Know which countries are involved in DR-CAFTA (and what the letters stand for). 276

Back 12

United States-Central American Free Trade Agreement-Dominican Republic Free Trade Agreement

Front 13

Know and be able to explain the key provisions of NAFTA (see Exhibit 9.6). 275-78

Back 13

market access, nontariff barriers, rules of origin (62.5%), customs administration, investment, services, intellectual property, government procurement, standards

Front 14

Be able to explain what Mercosur is 276

Back 14

a customs union between uruguay, brazil, venezula, paraguay, argentina, bolivia

Front 15

Be able to explain the chapter’s “strategic implications for marketing.” 279/80

Back 15

When incomes rise, new demand is generated at all income levels for everything from soap to automobiles; As incomes rise to middle-class range, demand for more costly goods increases for everything. People have more money to spend on food, then appliances and other durable goods. The new rich spends on luxury items

Front 16

Know what the “$10,000 club” ” issue is about. 280

Back 16

At $10,000, they join those with similar incomes who are exposed to the same global information sources. They join the "$10,000 club" of consumers with homogeneous demands who share a common knowledge of products & brands. They become global consumers

If company fails to appreciate it, it will miss the opportunity to participate in the world's fastest growing global consumer segment