Marketing 6: Global markets

protectionism
the practice of shielding one or more industries within a country’s economy from foreign competition through tariffs or quotas
tariff
a government tax on goods or services entering a country, primarily serving to raise prices on imports
quota
a restriction placed on the amount of a product allowed to enter or leave a country
4 trends affecting world trade/ global marketing
1. decline of economic protectionism by individual countries
2. rise of economic integration and free trade among nations
3. global competition among global companies for global consumers
4. emergence of a networked global marketplace
WTO
institution that sets rules governing trade between its members through a panel of trade experts
global competition
exists when firms originate, produce, and market their products and services worldwide
international firm
a firm that engages in trade and marketing in different countries as an extension of the marketing strategy in its home country …. employs the same market strategy internationally
multinational firm
views the world as consisting of unique parts and markets to each part differently
multidomestic marketing strategy
a multinational firm’s strategy of offering as many different product variations, brand names, and advertising programs as countries in which it does business
transnational firm
views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences
global marketing strategy
the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ (used by transnational firm)
global brand
a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs
global consumers
consumer groups living around the world who have similar needs or seek similar benefits from products or services
networked global marketspace
A marketspace that enables the exchange of goods, services, and information from companies anywhere to customers anywhere at any time at a lower cost
3 environmental factors affecting global marketing different than domestic
1. cultural
2. economic
3. regulatory
cross-cultural analysis
the study of similarities and differences among consumers in two or more nations or societies
values
a society’s personally or socially preferable modes of conduct or states of existence that tend to persist over tim
customs
norms and expectations about the way people do things in a specific country
Foreign Corrupt Practices Act
a law that makes it a crime for US corps to bribe an official of a foreign govnt or political party to obtain/retain business
cultural symbols
things that represent ideas or concepts in a specific culture
back translation
retranslating a word or phrase back into the original language using a different interpreter to catch errors
economic infrastructure
a country’s communications, transportation, financial, and distribution systems
microfinance
the practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small business or other income-generating activities
currency exchange rate
the price of one country’s currency expressed in terms of another country’s currency
4 global market entry strategies
1. exporting
2. licensing
3. joint venture
4. direct investment
exporting
producing goods in one country and selling them in another country
indirect exporting
when a firm sells its domestically produced goods in a foreign country thru an intermediary

least amount of risk but least profit

direct exporting
when a firm sells its domestically produced goods in a foreign country without intermediaries
licensing
a company offers the right to a trademark, patent, trade secret, or other similarly valued item of intellectual property in return for a royalty or a fee
joint venture
when a foreign company and a local firm invest together to create a local business, sharing ownership, control, and the profits of the new company
direct investment
a domestic firm actually invests in and owns a foreign subsidiary or division
product extension
selling virtually the same product in other countries
Product adaptation
changing a product in some way to make it more appropriate for a country’s climate or consumer preferences
product invention
totally inventing new products designed to satisfy common needs across countries
communication adaptation strategy
stressing different product attributes across different cultures/countries
dual adaptation strategy
modifying both the product and promotional message
dumping
when a firm sells a product in a foreign country below its domestic price or below its actual cost