Global Business Exam 1

What is Multi-National Marketing

The marketing of brands sold in multiple countries, encompassing advertising or other related activity in those countries

Ethnocentric Orientation

home country is superior to others, sees only similarities in other countries, assumes products and practices that succeed at home will be successful everywhere, often referred to as domestic or international, leads to a standardized or extension approach. 

Polycentric Orientation

each country is unique, each subsidiary develops its own unique business and marketing strategies, often referred to as multinational, leads to a localized or adaptation approach, cons: no economies of scale, duplicated functions, higher final product costs. 

Regiocentric Orientation

a region is the relevant geographic unit; regional offices coordinate marketing activities. 

Geocentric Orientation

the entire world is a potential market, strives for integrated global strategies, maximizes efficiencies worldwide, fully responsive to the local needs, also known as a global or transnational company, leads to a combination of standardization and adaptation elements. 

Market Capitalism

production resources are privately owned, individuals and firms allocate resources, government’s role is to promote competition among firms and ensure consumer protection, ex: U.S.A, Canada, European Union. 

Centrally Planned Socialism

government owns entire industries and controls distribution, government holds powers to decide what goods and services are produced and in what quantities, demand typically exceeds supply, little reilance on product differentiation, advertising, pricing strategy, ex: North Korea. 

Market Socialism

economic system in which market allocation policies are permitted within an overall environment of state ownership, ex: China, India, Vietnam. 

Centrally Planned Capitalism

economic system in which command resource allocation us used extensively in an environment of private resource ownership, ex: Swedish government 2/3s of all spending. 

Push factors

negative aspects of the domestic market

Pull factors

attractive aspects of the foreign markets

Standardization

Developing standardized products marketed worldwide with standardized marketing mix

Adaptation

customization: special products for every region

Preferential trade agreements (PTA)

is a mechanism that confers special treatment (ex: lower barriers) on select trading partners

Free trade area (FTA)

two or more countries agree to abolish tariffs and other barriers to trade amongst themselves

Customs union

evolution of free trade area, includes the elimination of internal barriers to trade, and establishes common external tariffs to trade

Common market

includes the elimination of internal barriers to trade, establishes common external tariffs to trade, and allows for the free movement of factors of production, such as labor, capital, and information

Economic union

includes the elimination of internal barriers to trade, establishes common external tariffs to trade, allows for the free movement of factors of production, such as labor, capital, and information, and coordinates and harmonizes economic and social policy within the union

Culture

ways of living, built up by a group of human beings, that are transmitted from one generation to another, the collective programming of the mind that distinguishes the members of one category of people from those of another

Values

enduring the belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct

Belief

an organized pattern of knowledge that an individual holds to be true about the world

Attitude

learned tendency to respond in a consistent way to a given object or entity

Religion

major one’s are Buddhism, Hinduism, Islam, Judaism, and Christianity are important source of beliefs, attitudes, and values

Language

countries differ in terms of language or means of communication, two forms are spoken/verbal and unspoken/nonverbal and is one of the defining characteristics of culture

Low context

messages are explicit and specific, words carry all information, reliance on legal paperwork, focus on non-personal documentation of credibility. Switzerland, U.S., Germany 

High context

information resides in context, emphasis on background, basic values, societal status, less emphasis on legal paperwork, focus on personal reputation. Saudi Arabia Japan

Individualism

indicates the degree to which individuals in a society are integrated into groups (it refers to the preference for behavior that promotes one’s self-interest)

Power Distance (PDI)

is the extent to which the less powerful members of society accept power to be distributed unequally

Masculinity

men are expected to be assertive, competitive, and concerned with material success, and women fulfill the role of nurturer and are concerned with issues such as the welfare of children. Men and women overlap, with neither gender exhibiting overly ambitious or competitive behavior

Uncertainty Avoidance (UA)

the extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured situations

Long-term Orientation (LTO)

whether gratification should be immediate or deferred

What is the political system

is the means by which people in a society make the rules that control and influence their lives

Exportation

governmental action to dispossess a foreign company or investor

Confiscation

occurs when no compensation is provided

Nationalization

a government takes control of some or all the enterprises in an entire industry 
◦ Public purpose 
◦ Adequate payment. 
◦ General Motor in 2009

Creeping Exportation

limits economic activities of foreign firms

International law

may be defined as the rules and principles that nation-states consider binding upon themselves

Common law

Disputes are decided by reliance on the authority of past judicial decisions, Code law is used in only a few areas; the U.S. Uniform Commercial Code, Countries: US, UK, former 
UK colonies

Civil Law

Legal system reflects the structural concepts and principles of the Roman Empire, Ruling based on an all-inclusive system of written rules of law, most countries have legal systems based on civil-law tradition

Islamic law

Legal system in many Middle Eastern countries and Malaysia

How to protect Intellectual Property

• Intellectual property must be registered in each country where business is conducted

• In the U.S., registration is with the Federal Patent Office, In Europe, applicants use the European Patent Office or register country-by-country, Soon the Community Patent Convention will cover 27 countries.