Marketing Quiz Chapter 8

Traditional approach
Companies entered the global marketplace as they gained knowledge about various markets and opportunities
Born global
Small technology-based firms that export their products after establishing in market niches in which they compete with larger established firms
Sociocultural Factors
Extent to which a product’s brand image and country of origin influence purchases is subject to variation based on national culture characteristics
Cultural differences have implications for
Product development
Advertising
Packaging
Pricing
Floating exchange rate
Allows the currencies to fluctuate, or float, according to the foreign exchange market
Global marketers must understand
International trade systems
Economic stability of nations
Trade barriers
Instability
Constant in the global business environment
Gross domestic product (GDP)
Overall measure of a nation’s economic standing
Import tariff
Duty levied by a nation on goods bought outside its borders and brought into the country
Quota
Limit on the amount of goods an importing country will accept for certain product categories in a specific time period
Embargo
Governments supervision of trade in a particular product ro with a given country
Exchange controls
Government restrictions on the amount of a particular currency that can be bought or sold
Balance of trade
Difference in value between a nation’s exports and its imports
Self-reference criterion (SRC)
Unconscious reference to one’s own cultural values, experiences, and knowledge
Cultural relativism
Morality varies from one culture to another
Business practices are differentially defined as right or wrong by particular cultures
Importing
Purchase of products from a foreign source
Exporting
Sale of products to foreign markets
Licensing
Alternative to direct investment, pays commissions or royalties on sales or supplies used in manufacturing, may also pay an initial down payment or fee when the licensing agreement is signed
Franchising
Form of licensing, Company grants a franchisee the right to market its product, In return for a financial commitment and an agreement to conduct business in accordance with the franchiser’s standard of operations, minimize the risks of international marketing
Outsourcing
Contracting of noncore operations from internal production within a business to an external entity that specializes in that operation
Offshoring
Moving a business process that was done domestically at the local factory to a foreign country, regardless of whether the production accomplished in the foreign country is performed by the local company or a third party
Offshore outsourcing
Contracting with an organization to perform some or all business functions in a country other than the country in which the product will be sold
Joint Venture
Partnership between a domestic firm and a foreign firm or government
Strategic alliances
Partnerships formed to create a competitive advantage on a worldwide basis
Multinational enterprise
Firm that has operations or subsidiaries in many countries