Principles of Marketing Chapter 8 Quiz

4 Ps of Marketing
Product, Price, Place, Promotion
Marketing Mix
also known as the 4 Ps of marketing
Alternative strategies for entering a foreign market
importing/exporting, franchising, foreign licensing, subcontracting, and direct investment (in order of least to most involvement by a firm)
Exporting/importing
quick and easy way for a company to make money; surface-level
Contractual agreements
franchising, foreign licensing, subcontracting, stocking distribution
International direct investment
acquisitions, joint ventures, overseas divisions
1980-1990
influx of immigrants from Central America; demanded that brands communicate to them in Spanish if they wanted them to buy products
related party trade
trade by U.S. companies with their subsidiaries overseas as well as trade by U.S. subsidiaries of foreign-owned firms with their parent companies
infrastructure
a nation’s basic system of transportation networks, communication systems, and energy facilities
exchange rate
price of one nation’s currency in terms of another country’s currency
political risk assessment (PRA)
units within a firm that evaluate the political risks of the marketplaces in which they operate as well as proposed new markets
friendship, commerce and navigation (FCN) treaties
international agreements that deal with many aspects of commercial relations among nations
ISO (international organization for standardization) certification
internationally recognized standards that ensure a company’s goods, service, and operations meet established quality levels and its operations minimize harm to the environment
tariff
tax levied against imported goods
revenue tariffs
taxes designed to raise funds for the importing government
protective tariffs
taxes designed to raise the retail price of an imported product to match or exceed that of a domestic product
import quota
trade restrictions limiting the number of units of certain goods that can enter a country for resale
embargo
complete ban on the import of specific products
subsidies
government financial support of a private industry
exchange control
method used to regulate international trade among importing organizations by controlling access to foreign currencies
dumping
controversial practice of selling a product in a foreign market at a price lower than what it receives in the producer’s domestic market
free-trade area
region in which participating nations agree to the free trade of goods among themselves, abolishing tariffs and trade restrictions
customs union
establishment of free-trade area plus a uniform tariff for trade with nonmember unions
common market
extension of customs union by seeking to reconcile all government regulations affecting trade
general agreement on tariffs and trade (GATT)
international trade accord that has helped reduce world tariffs
world trade organization (WTO)
organization that replaces GATT, overseeing GATT agreements, making binding decisions in mediating disputes, and reducing trade barriers
European Union (EU)
customs union that is moving in the direction of an economic union by adopting a common currency, removing trade restrictions, and permitting free flow of goods and workers throughout the member nations
franchise
contractual arrangement in which a wholesaler or retailer agrees to meet the operating requirements of a manufacturer or other franchiser
foreign licensing
agreement that grants foreign marketers the right to distribute a firm’s merchandise of to use its trademark, patent, or process in a specified geographical area
subcontracting
contractual agreements that assign the production of goods and services to local or smaller firms
global marketing strategy
standardized marketing mix with minimal modifications that a firm uses in all of its domestic and foreign markets
multi domestic marketing strategy
application of market segmentation to foreign markets by tailoring the firm’s marketing mix to match specific target markets in each nation
countertrade
form of exporting whereby good and services are bartered rather than sold for cash
why is the United States attractive as a target market for foreign marketers?
large population, high level of disposable income per consumer, low risk due to political stability, favorable attitude toward foreign investment, and growing economy
Identify the major components of the environment for global marketing
economic, socio-cultural, technological, political-legal, and competitive
Differentiate between a global marketing strategy and a multi domestic marketing strategy
global marketing strategy: defines a standard marketing mix and implements it with minimal modifications in all foreign markets (Dominos’s first strategy)

multi domestic marketing strategy: requires firms to customize their marketing decisions to reach individual marketplaces (Dominos’s second strategy)

Describe the alternative marketing mix strategies used in global marketing
Product & promotional strategies: straight extension, promotion adaptation, product adaptation, dual adaptation, product invention

alternate options: distribution, pricing, and countertrade strategies

straight extension strategy
one product, one message worldwide. Permits economies of scale in production and marketing and universal recognition of a product
product, promotion & dual adaptation
changing a product or promotion strategy (or both) to better fit a foreign market
product invention
inventing a new product as part of a preexisting line or group of products to better suit a foreign market (ex: a hand-powered device rather than one that requires a power outlet)
pricing strategy
companies must adapt their pricing strategies to local markets and alter them when conditions change to continue to be successful in a given market
undifferentiated marketing
one marketing strategy is used across all demographics
micro marketing
targeting individuals rather than groups
concentrated marketing
selecting specific segments to which you’ll market your brand