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GMS723
International Trade
| Term | Definition |
|---|---|
| Marketing | is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. |
| Cost Driver | spread costs over larger number of units and find low cost suppliers |
| Competitive Driver | follow competitor to new foreign market or expand market share |
| Market Driver | increased uniformity of consumers's tastes and preferences |
| Technology Driver | increase access to information and easy access to new customers over the internet |
| Absolute advantage | when a nation can produce a certain good more efficiently than other countries, it will trade for other products |
| Comparative advantage | nations will trade as long as they can produce some goods relatively more efficiently |
| Factor Endowment | a country will enjoy comparative advantages if it is naturally gifted with many factors of economic production |
| Cluster | It is critical to have similar firms concentrated in one geographic area. It is formed when companies in the same industry, as well as their suppliers, concentrate in one geographic area. |
| Logistics | Is the part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services. |
| Supply Chain Management | Involves the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Integrates supply and demand management within and across companies. |
| International Logistics | Is the process of planning, implementing, and controlling the flow and storage of goods, services, and related information from a point of origin to a point of consumption located in a different country. |
| Just-In-time | Is a process that plans for parts to arrive on the assembly line just before they are needed. This technique is to reduce or eliminate the need for inventory. |
| International Logistics Infrastructure | To the elements that allow goods, documents, money and information to move between businesses. Includes: transportation, communication etc. |
| Agents and distributors | A strong network of agents and distributors allows an exporter to enter new markets and expand abroad. |
| Retail distribution | Efficient access to consumers is important to a manufacturer of consumer goods, and is not available in all countries. |
| Differentiation | Requires marketing managers to differentiate the firm's products or services from those of its competitors. |
| Cost leadership | Can be pursued and achieved through systematic reductions in production and manufacturing costs, reductions in sales costs, acceptance of lower profit margins, use of less expensive materials and component parts, or other means. |
| Focus strategy | Marketers will concentrate their efforts on particular segments of the consumer market or on a particular areas or regions within a market. |
| Ethnocentric Approach | The firm simply marekts its goods internationally by using the same marketing mix it uses domestically. Avoids the expense of developing new marketing techniques to serve foreign customers. |
| Polycentric Approach | International marketers attempt to customize the firm's marketing mix to meet the needs of customers in each market. |
| Geocentric Approach | Allows the firm to provide essentially the same product or service in different markets and to use essentially the same marketing approach to sell that product or service globally. |
| Standardization | Focus is on the profit equation: by driving down costs, the firm's profits are enhanced. |
| What are the advantages of Standardization? | Reduces marketing costs,facilitating centralized control of marketing, promoting efficient research and development and resulting in economies of scale in production. |
| What are the disadvantages of Standardization? | Ignoring different conditions of product use, ignoring local legal differences and ignoring difference in the behavior patterns of buyers. |
| Customization | Focuses on the revenue side of the profit equation. |
| Advantages of customization? | Reflecting different conditions of product use, acknowledging local legal differences and accounting for differences in buyer behavior patters. |
| Disadvantage of customization? | Increasing marketing costs, inhibiting centralized control of marketing and creating inefficiencies in research and development. |
| Product | Represent both the set of tangible factors that the consumer can see or touch and numerous intangible factors such as image, installation, warranties, and credit terms. |
| Price | Serves as an important strategic weapon by allowing the firm to shape the competitive environment in which it does business. |
| Standard price policy | The firm will charge the same price for its products and services regardless of where they are sold.(Geocentric approach) |
| Two-tiered pricing policy | The firm will set one price for all its domestic sales and second price to account for the the marginal costs of its international sales. (Ethnocentric) |
| Dumping | Damage to its brand name, development of a gray market for its product, and consumer resentment against discriminatory prices. |
| Gray market (Parallel Importing) | When products are imported into a country legally, but outside the normal channels of distribution authorized by the manufacturer. |
| Message | The facts or impressions the advertiser wants to convey to potential customers. Reflects the way the firm sees its product and service, and the way it wants them to be seen by customers. |
| Medium | The communication channel used by the advertiser to convey a message. |
| Global vs local advertising techniques? | Whether its product or service can be advertised the same everywhere or must be tailored to each local market the firm serves. |
| Direct Sales | A firm that sells directly to its customers bypasses wholesalers and retailers. |
| Retailers | A slightly longer channel of distribution. Easier in a given market are heavily concentrated. |
| Wholesalers | Longest distribution channel. Are separate business that buy from manufacturers and then resell to retailers. |
| Materials Requirement Planning and Manufacturing Resources Planning. | Are tools that allow manufacturing firms to determine what to produce (or order from suppliers), and in which quantity, in function of their sales forecasts and pending customers orders. |
| Distribution Resources Planning | Is a tool that allows a retail firm to determine what to order from its suppliers, in which quantity, and when, in function of what it sells to retail customers. |
| What is Infrastructure? | Refers to the elements that allow goods, documents, money and information to move between businesses. |
| Communication Infrastructure | Allows businesses to communicate clearly and quickly. This requires reliable phone lines, cell phone networks, internet services, and mail delivery. |
| Utilities Infrastructure | Allows businesses to sustain their daily operations. This requires reliable electricity, energy,water and sewer services. |
| Banking Infrastructure | allows businesses to move funds and documents quickly and reliably, both within a country and between countries. This requires a network of bank branches and well-trained bank employees. |
| Business Services Infrastructure | allows businesses to find additional competent logistics help quickly. This includes freight forwarders, couriers, carriers, delivery services, packing services, and so on. |
| Distribution Infrastructure | allows businesses to find agents and distributors, to develop wholesale and retail channels, and promote their products. |
| Court Infrastructure | allows businesses to settle disputes quickly and fairly. This includes not only an efficient court system, but also a network of mediators and arbitrators, and the existence of clear jurisprudence. |
| Intellectual Property Infrastructure | allows businesses to protect their intellectual property (copyrights, patents, and trademarks) with law enforcement services intent on enforcing intellectual property laws. |
| Standard Infrastructure | allows businesses to determine the requirements that their products and operations must meet. This includes safety, design, and performance standards |
Created by:
rafi.sultani
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