Globalization - International Marketing

Flashcards about Globalization and International Marketing

What is Globalization?

Globalization refers to the worldwide phenomenon of technological, economic, political, and cultural exchanges, brought about by modern communication, transportation, and legal infrastructure as well as the political choice to consciously open cross-border links in international trade and finance.

Why do companies go international?

Companies go international because they want to grow or expand operations, generate more revenue, compete for new sales, gain investment opportunities, diversify the business, reduce costs, recruit new talent, gain competitive advantage, and build brand image.

What is the Ansoff model market development strategy?

Selling current products to new markets and locations.

What are some reasons to go overseas?

Expand/grow business, gain new customers/revenue, foreign exchange earnings, underutilized capacity, spreading risks, reputation/brand recognition, access to new technologies/industry ecosystems, larger talent pool, competitive edge, investment opportunities

What does SCAG stand for in the context of international markets?

Spreading risks across national boundaries, Capitalize on core competences and build brand image, Achieve lower cost and increase profitability due to economies of scale and learning curve effects, and Gain access to new customers, technology, diversified talent pool

What is the marketing equation for local and international markets?

APIC + 4Ps = CS (everything gets amplified in international markets)

What does Demographic mean in international marketing?

Studying people in terms of size, density, location, age, gender, race occupation, and other statistics

How is a country's size estimated demographically?

By counting the population or the number of people in that country

What is politics in the context of international marketing?

The policies that are used to influence and affect the operations of companies and countries.

What is the impact of nationalism on international marketing?

Nationalism can negatively affect international marketing thrusts, as countries promote buying and consuming local products.

What are Preferential Trade Areas (PTAs)?

PTAs exist when countries within a geographical region agree to reduce or eliminate tariff barriers on selected goods imported from other members of the area.

What is the characteristics of free trade areas?

Where two or more countries in a region agree to reduce or eliminate barriers to trade on all goods while maintaining trade barriers with nonmember countries.

What are the characteristics of customs unions?

Involves the removal of tariff barriers between members, plus the acceptance of a common (unified) external tariff and rate against non-members countries.

What is a common market?

Occurs when member countries trade freely in all economic resources – not just tangible goods. This means that all barriers to trade in goods, services, capital, and labor are removed

What are the advantages of trading blocs?

Provide free access to members’ markets; provide easier access to each other’s markets such that trade between members is likely to increase; application of scale economies for producers; jobs creation, due to increased trade between member economies and firms inside the bloc are protected from cheaper imports from outside.

What are the disadvantages of trading blocs?

Possible benefits of free trade between countries in different blocs is lost; trading blocs encourage trade amongst member countries to the detriment of global trade. Inefficient producers within the bloc can be protected from more efficient ones outside the bloc resulting in domestic and local market paying higher prices.

What are the three groups that countries can be divided into based on the economic growth?

(a) industrialized, (b) developing, and (c) less-developed nations.

What are barriers to trade?

Anything that restricts, hinders, or prevents international trade

What are tariff barriers?

Monetary hindrance such as taxes or duties

What are non-tariff barriers?

Non-monetary hindrance such as import restrictions, embargos and exchange controls.

What are buy-national regulations?

Government rules that give special privileges to domestic manufacturers and retailers

What is dumping in the context of international trade?

Foreign products may be sold in the domestic economy at a price actually below of its actual cost as a result of foreign governments subsidize their producers

What are the disadvantages of trade protectionism?

Weakens the industry in the long term. Without competition, companies within the industry have no need to innovate. Eventually, the domestic product will decline in quality and be more expensive than what foreign competitors produce.

What is tariff?

A tax imposed by a country on imported goods.

What are some examples of non-tariff barriers to trade?

Import licenses, Export licenses, Import quotas, Embargo, Subsidies, Voluntary Export Restraints, Local content requirements, Currency devaluation, Trade restriction

What are the main features of GATT?

Tariffs: All the signatories agreed not to increase tariffs beyond their existing levels, Quotas: The signatories agreed to work towards the abolition of quotas, Most favoured nation: Every signatory was a “most favoured nation”, i.e. trading privileges could not be extended by one member to another without extending them to all, Trading blocs: The establishment of common-market type agreements such as the EC and CARICOM (CSME) were allowed to continue, but were encouraged to be more outward looking rather than insular.

What is culture in the context of international marketing?

The systems of knowledge, beliefs, and values shared by a relatively large group of people.

What does cultural environment consist of?

The influence of religious, family, educational, and social systems in the marketing system. These include: (a) language, (b) color, (c) customs and taboos, (d) values, (e) aesthetics, (f) time, (g) business norms, (h) religion, and (i) social structures.

What is ethnocentrism in international marketing?

Favouring one’s own culture.

What is technology in the context of international markets?

The collection of techniques, skills, methods, and processes used in the production of goods or services or in the accomplishment of objectives. Basically, anything that helps us produce things faster, better or cheaper is technology.

What internal factors does the Strength and Weaknesses of the SWOT analysis focus on?

Structure, Management processes, and Resources

What is multicountry or multidomestic competition?

The market conditions are such that each country market is self contained. The market conditions in one country differ from that in other countries. Thus, each country market in which the enterprise operates is distinct and requires a unique marketing mix.

What is global competition?

The world is seen as one big market and the marketing mix is integrated and applied to all countries.

What serious questions does international marketing require a firm to ask itself?

Looking at the global marketing environment, Deciding whether to go global, Deciding which markets to enter, Deciding how to enter the market, Deciding on the global marketing plan, Deciding on the global marketing organization

What are the three entry methods to a new market?

Exporting, Joint Ventures, and Direct Investment

What are the types of joint ventures?

Licensing, Franchising, Contract Manufacturing, Management contracting, Joint ownership

What is exporting?

Entering a foreign market by selling goods produced in the company’s home country, often with little modification

What is a strategic alliance?

Involves a contractual agreement between two or more enterprises stipulating that the involved parties will cooperate in a certain way for a certain time to achieve a common purpose.

What is an acquisition?

A transaction in which a firm gains control of another firm by purchasing its stock, exchanging the stock for its own, or, in the case of a private firm, paying the owners a purchase price.

What is a greenfield venture?

Establishing of a new, wholly owned subsidiary