Ch. 3 & 4 – Glencoe Marketing Essentials

Economy
The organized way a nation provides for the needs and wants of its people.
Resources
All the things used in producing goods and services.
Factors of Production
Economic term for the four categories of resources: land, labor, capital, and entrepreneurship.
Infrastructure
The physical development of a country, including its roads, ports, sanitation facilities, and utilities.
Entrepreneurship
The process of starting and operating your own business ownership.
Scarcity
The difference between what consumers want and need and what the available resources are.
Traditional Economy
Traditions and rituals that answer basic questions of what, how, and for whom.
Market Economy
An economic system in which individuals and companies decide what will be produced, when, and how it will be distributed.
Command Economy
An economic system in which the government decides what, when, and how much will be produced and distributed.
Productivity
The output per worker hour that is measured over a defined period of time, such as a week, month, or year.
GDP
The output of goods and services produced by labor and property located within a nation.
GNP
The total dollar value of goods and services produced by a nation.
CPI
Measurement of the change in price over a period of time of approximately 400 retail goods and services used by the average urban household.
PPI
Measurement of wholesale price levels in the economy.
Business Cycle
Recurring changes in economic activity, such as the expansion and contraction of an economy.
Expansion
A time when the economy is flourishing; also called prosperity.
Recession
A period of economic slowdown that lasts for two quarters, or six months.
Depression
A period of prolonged recession.
Recovery
A period of renewed economic growth followed by a recession or depression.
International Trade
The exchange of goods and services among nations.
Imports
Goods and services purchased from other countries.
Exports
Goods and services sold to other countries.
Balance of Trade
The difference in value between a nation’s exports and its imports.
Free trade
Commercial exchange between nations that is conducted on free market principles, without tariffs, import quotas, or other restrictive regulations.
Tariff
A tax on imports; also know as a duty.
Quota
A limit on either the quantity or monetary value of a product that may be imported.
Embargo
A total ban on specific goods coming into and leaving a country.
Protectionism
A government’s establishment of economic policies that restrict imports to protect domestic industries.
WTO
A global coalition of more than 140 governments that makes rules governing international trade.
NAFTA
An international trade agreement among the U.S.A., Canada, and Mexico.
EU
European trading bloc.
Licensing
The process of letting another company (licensee) use a trademark, patent, special formula, company name, or some other intellectual property for a fee or royalty.
Contract manufacturing
The process of hiring a foreign manufacturer to make products according to certain specifications.
Joint Venture
A business enterprise that different companies set up together; often, the venture involves a domestic company and a foreign company.
FDI
Investments in factories, offices, and other facilities in another country that are used for a business’ operations.
Multinationals
Large corporations that have operations in multiple countries.
Mini-Nationals
Mid-size or smaller companies that have operations in multiple countries.
Globalization
The process of selling the same product and using the same promotion methods in all countries.
Adaptation
Changing an existing product and/or promotion to better suit the characteristics of a targeted country or region.
Customization
The process of creating a products or promotions for certain countries or regions.