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MKT 300 Chapter 8

Global Marketing

QuestionAnswer
Globalization Refers to the processes by which goods, services, capital, people, information, and ideas flow across national borders.
BRIC Countries Brazil, Russia, India, & China
Four sets of criteria necessary to assess a country's market? Economic Analysis, Infrastructure and Technological Analysis, Government Actions or Inactions, & Sociocultural Analysis.
Economic Analysis A firm conducting an economic analysis must look at three major economic factors using well established metrics: the general economic environment, the market size and population growth rate, & real income.
Evaluating the general economic environment Trade Deficit, Trade Surplus, Gross Domestic Product (GDP), Gross National Income (GNI), & Purchasing Party Power (PPP).
Trade Deficit Results when a country imports more goods than it exports.
Trade Surplus Occurs when a country has a higher level of exports than imports.
Gross Domestic Product (GDP) Defined as the market value of the goods and services produced by a country in a year; the most widely used standardized measure of output.
Gross National Income (GNI) Consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy)
Purchasing Party Power (PPP) A theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in on will cost the same in the other, expressed in the same currency.
Evaluating market size and population growth Examining the countries with the highest purchasing power and assessing the population growth. While this may be lucrative today it may not be in the future for many products and services because of stagnated growth.
Evaluating real income Firms can make adjustments to an existing product or change the price to meet the unique needs of a particular country market. Such shifts are particularly common for low-priced consumer goods. Economic factors of the wealth of the people.
Analyzing infrastructure and technological capabilities: Infrastructure The basic facilities, services, and installations needed for a community or society to function such as transportation and communication systems, water and power lines, and public institution such as schools, post offices, and prisons.
Marketers are concerned with four key elements of a countries infrastructure Transportation, Distribution Channels, Communications, & Commerce.
Transportation There must be a system to transport goods throughout the various markets and to consumers in geographically disbursed marketplaces. - Trains, Roads, & Refrigeration.
Distribution Channels Must exist to deliver products in a timely manner and at a reasonable cost.
Communications System Particularly media access must be sufficiently developed to allow consumers to find information about the products and services available in the marketplace.
Commercial Infrastructure Consists of legal, banking, and regulatory systems which allows markets to function.
Analyzing government actions Government actions, as well as the non-governmental political groups, can significantly influence the firms ability to sell goods and services because they often result in laws or other regulations.
Four government actions include Tariffs, Quotas, Exchange Control, & Trade Agreements
Tariffs Also called a duty, is a tax levied on a good imported into a country. In most cases Tariffs are intended to make imported goods more expensive and thus less competitive with domestic products.
Quota Designates the maximum quantity of a product that may be brought into a country during a specified period of time.
Exchange Control Refers to the regulation of a country's currency exchange rate, the measure of how much one currency is worth in relation to another.
Exchange Rate The measure of how much one currency is worth in relation to another.
Trade Agreements Marketers must consider the trade agreements to which a particular country is a signatory or the Trading Bloc to which it belongs. An intergovernmental agreement designed to manage and promote trade activities for a specific region.
Trade Bloc Those countries which have signed a particular trade agreement.
Analyzing sociocultural factors Understanding another country's culture is crucial to the success of any global marketing initiative. Culture, or the shared meanings, beliefs, morals, values, and customs of a group of people.
Geert Hofstede's cultural dimensions concept Power Distance, Uncertainty Avoidance, Individualism, Masculinity, & Time Orientation.
Power Distance Willingness to accept social inequality as natural.
Uncertainty Avoidance The extent to which the society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life.
Individualism Perceived obligation to and dependence on groups.
Masculinity The extent to which dominant values are male oriented. A lower masculinity ranking indicates that men and women are treated equally in all aspects of society; a higher masculinity ranking suggest that men dominate in positions of power.
Time Orientation Short-versus long-term orientation. A country that tends to have long-term orientation values long-term commitments and is willing to accept a longer time horizon for, say, the success of a new product introduction.
Exporting Producing goods in one country and selling them in another. Lowest Risk Factor.
Global Entry Strategies Export, Franchising, Strategic Alliance, Joint Venture, & Direct Investment.
Franchising A contractual agreement between a firm, the franchisor, and another firm or individual, the franchisee.
Strategic Alliance Refer to the collaborative relationships between independent firms, though the partnering firms do not create an equity partnership; that is, they do not invest in one another.
Joint Venture Formed when a firm entering a market pools its resources with those of a local firm. As a consequence ownership, control, and profits are shared.
Direct Investment Requires a firm to maintain 100% ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries. Highest Risk Factor
Two components in determining a Global Marketing Strategy Determining the target markets to pursue and Developing a marketing mix that will sustain a competitive advantage over time.
Three Global Product Strategies 1. Sell the same product or service in both the home country market and the host country. 2. Sell a product or service similar that sold in home country but include minor adaptations. 3. Sell totally new products or services.
Glocalization The process of firms standardizing their products globally, but using different promotional campaigns to sell them.
Reverse Innovation When companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets.
Global Pricing Strategies Determining the selling price in the global marketplace.
Global Distribution Strategies Global distribution networks form complex value chains that involve middlemen, exporters, importers, and different transportation systems. These additional middlemen typically add cost and ultimately increase the final selling price of a product.
Global Communication Strategies The major challenge in developing a global communication strategy is identifying the elements that need to be adapted to be effective in the global marketplace.
Created by: towilliamsjr
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