MKT363 Exam 1 Study Set - Creighton University - Wachner 2025

Starbucks is building on its loyalty card and rewards program in the United States with a smartphone app that enables customers to pay for purchases electronically. The app displays a bar code that the barista can scan.

This is called: _____?

Market Penetration.

This is because Starbucks is already in the coffee space, but is trying to capture/retain new and existing consumers through a new method

Starbucks is entering India via an alliance with the Tata Group. Phase 1 calls for sourcing coffee beans in India and marketing them at Starbucks stores throughout the world. The next phase will likely involve opening Starbucks outlets in Tata's upscale Taj hotels in India.

This is called: _____?

Market Development.

Starbucks created a new instant coffee brand, Via, to enable its customers to enjoy coffee at the office and other locations where brewed coffee is not available. After a successful launch in the United States, Starbucks rolled out Via in Great Britain, Japan, South Korea, and several other Asian countries. Starbucks also recently introduced its first coffee machine. The Versimo allows Starbucks' customers to "prepare their favorite beverages at home."

This is called: _____?

Product Development

In 2011, Starbucks dropped the word "Coffee" in its logo. It recently acquired a juice maker, Evolution Fresh; the Bay Bread bakery, and tea retailer Teavana Holdings. Next up: Revamping stores so they can serve as wine bars and attract new customers in the evening.

This is called: _______?

Diversification

What is the Value Equation

Value = Perceived Benefits / Price

What is ethnocentrism?

The belief that one's own group or culture is superior to all other groups or cultures

What is polycentrism?

Each country in which a company does business is unique; a localized/adaptation approach

What is geocentrism?

A view that the entire world is a potential market and integrated global strategies should be developed

What are general characteristics of low-income countries?

1. Limited industrialization and a high percentage of the population engaged in agriculture and subsistence farming

2. High birth rates, short life expectancy

3. Low literacy rates

4. Heavy reliance on foreign aid

5. Political instability and unrest

6. Concentration in Africa south of the Sahara

Who is a part of the Triad?

Western Europe, Japan, and the United States.

What is the GATT?

A treaty to promote trade among members.

(T/F) GATT (General Agreement on Tariffs and Trade) itself had no enforcement power, and the losing party in a dispute was entitled to ignore the ruling.

True

What is a free-trade agreement?

When two or more countries agree to eliminate tariffs and other barriers that restrict trade.

What is a customs union?

Free trade areas that impose a standard tariff on non-members.

Members of a customs union agree to the establishment of common external tariffs (CETs), but eliminate internal barriers to trade.

What is a common market?

Allows for free movement of factors of production, including labor and capital, in addition to the removal of internal trade barriers and adding CETs

What is an economic union?

Groups of countries that not only allow free trade between member countries and the free movement of people and capital, but also require member countries to have common policies on sectors such as agriculture, industry, and others.

Eliminate internal tariff barriers, establish CETs, and has free flow of factors, while harmonizing economic social policies.

What is the hierarchy of preferential trade agreements from lowest to highest?

Free Trade Agreements, Customs Union, Common Market, and Economic Union.

What's an example of a free trade agreement?

NAFTA

What's an example of a customs union?

Andean Community

What's an example of a common market?

Mercosur

What's an example of an economic union?

The European Union

What are some marketing issues in the EU that were addressed?

Product Harmonization, establishment of a single currency, common guidelines for broadcasting, and simplification of transit documents

What did the Maastricht Treaty achieve?

It set the stage for the creation of an economic, monetary union including a European central bank and European currency.

What are some marketing issues in the Middle East?

Connection is key in ME. Establishment of trust and respect take time. Women do not usually take part in business scene.

What are the four main areas of verbal language?

Syntax, Semantics, Phonology, and Morphology.

Rules of sentence formation, system of meaning, system of sound patterns, and word formation.

How are messages received in a low-context culture?

Received explicitly and specific.

How are messages received in a high-context culture?

Less information is contained in the verbal part of a message. More information is in the context of communication, such as background, associations, etc.

In what kind of culture is a person's word their bond?

A high-context culture.

A low-context culture would typically require documents signed in writing for an agreement.

What are some examples of low context cultures?

The United States and Northern Europe

What are some examples of high context cultures?

Japan, Middle East

How is time perceived in high-context culture?

Polychronic - everything in life must be dealt with in terms of its own time

How is time perceived in low-context culture?

Monochronic - time is money, linear, 'one thing at a time'

How important are lawyers in each context culture?

High Context: Less important

Low Context: Very important

Where are individualism and collectivism most notable?

Individualism: USA, Canada,

Collectivistic: Mexico Thailand

Pacific countries are closer to collectivism

What does it mean to have a higher power distance?

Accepting of wide differences in power, great deal of respect for those in authority.

Mexico, France, Singapore

What does it mean to have a lower power distance?

Plays down inequalities, employees are not afraid to approach a boss.

USA, Sweden

What does it mean to have a high uncertainty avoidance?

Threatened with ambiguity and experience high levels of anxiety.

Italy, Mexico, France

What does it mean to have a low uncertainty avoidance?

Comfortable with risks, tolerant of different behavior and opinions.

Canda, USA, Singapore

What's the difference between achievement and nurturing?

Achievement focuses on acquiring money, competition, and assertiveness.

Nurturing focuses on relationships and concern for others.

What does it mean to have a long-term orientation?

People look to the future and value thrift and persistence.

China, Taiwan, Japan. Mainly all Asia-pacific countries

What does it mean to have a short term-orientation?

People value tradition and the past.

USA, Germany, and Australia

What are the five stages of the adoption process?

Awareness, Interest, Evaluation, Trial, and Adoption

What is political risk?

The possibility of a change in a country's political environment or government policy that would adversely affect a company's ability to operate profitably and effectively.

What is expropriation?

A government-sponsored seizure of assets where compensation is provided.

What is confiscation?

Seizure of assets, but no compensation.

What is nationalization?

When the government takes control of some or all enterprises in a particular industry.

What is international law?

The rules and principles that nation-states consider binding upon themselves. Applies only to the extent that countries are willing to assume rights and obligations within these areas.

What is civil law?

The legal system reflects the structural concepts and principles of Roman society- law is codified

What is common law?

Disputes are decided on the authority of past judicial decisions- this is called case law, the law is not codified and precedent exists.

What is Irslamic/Sharia law?

A comprehensive code governing Muslim conduct, derived from the Quran (Holy Book) and the Hadith (practices of Muhammad).

What is good and bad in Islam?

Halal = Good

Haram = Bad

What is a patent?

Sole legal right to an invention and its profits.

Lasts for 20 years

What is a trademark?

A symbol, word, or words legally registered or established by use as representing a company or product.

Lasts forever

What is a copyright?

An establishment of ownership of an artistic creation.

Lasts for the author's life + 70 years.

What is counterfeiting?

Unauthorized copying and production of a product.

Typically done against a patent or trademark.

Example: Fake Rolexes/LV bags.

What is piracy?

Unauthorized use of copyrighted work.

Example: YouTube audio issues

What do antitrust laws combat?

Combat restrictive business practices and to encourage competition.

What is licensing?

A contractual agreement where a licensor allows a licensee to use patents, trademarks, or other assets in return for compensation.

Why are trade secrets important?

Because if a company were to patent an invention, then it would be free to use after 20 years. With trade secrets, no one but trusted people may know. Typically done by NDAs or other confidentiality contracts.

What is arbitration?

A negotiation process that two parties have and one that they are committed to using.