Chapter 6: Understanding and Reaching Global Consumers and Markets

Flashcards covering key vocabulary terms related to understanding and reaching global consumers and markets, extracted from lecture notes on Chapter 6.

Global Perspective (World Trade)

Describes the composition of world trade, with 80% attributed to products and commodities and 20% to services.

Trade Feedback Effect

A complementary economic flow where a nation's exports and imports influence each other.

Countertrade

The practice of using barter rather than money for making global sales.

Economic Protectionism

The practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quotas.

Economic Integration

Agreements among countries to reduce or eliminate trade barriers and coordinate monetary and fiscal policies, examples include NAFTA, EU, MERCOSUR, and ASEAN.

Global Competition

Strategic marketing between firms that originate, produce, and market their products and services worldwide.

Networked Global Marketspace

The digital environment facilitating global marketing and commerce.

Economic Espionage

The clandestine collection of trade secrets or proprietary information about a company's competitors.

Protectionism

Government policies to restrict imports to protect domestic industries.

Tariffs

Government taxes on goods or services entering a country, which raise prices and limit supply.

Quota

A restriction placed on the amount of a product allowed to enter or leave a country, limiting supply and decreasing world trade.

World Trade Organization (WTO)

An institution that sets rules governing trade between its members through negotiations and provides a forum for resolving trade disputes.

Strategic Alliances

Agreements between two or more firms to cooperate on a specific business venture or for other strategic goals, often in the global market.

International Firms

Companies that extend their domestic marketing strategies to international markets without significant adaptation for local conditions.

Multinational Firms

Companies that view the world as consisting of unique parts and market to each part differently, often using a multidomestic marketing strategy.

Multidomestic Marketing Strategy

Approaching a global market by offering different product variations, brand names, or advertising programs unique to each country or region.

Transnational Firms

Companies that view the world as one market and emphasize cultural similarities across countries, using a global marketing strategy and promoting a global brand.

Global Marketing Strategy

The practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.

Global Brand

A brand sold under the same name in multiple countries, with similar and centrally coordinated marketing programs.

Global Consumers

Consumer groups living in many countries or regions of the world who have similar needs, desires, and consumption behaviors.

Cultural Diversity

The existence of a variety of cultural or ethnic groups within a society or global market.

Cross-Cultural Analysis

The study of similarities and differences among consumers in two or more nations or societies.

Values

Society's personally or socially preferable modes of conduct or states of existence that tend to persist over time.

Customs

What is considered normal and expected about the way people do things in a specific country.

Foreign Corrupt Practices Act (1977)

A law that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business.

Hofstede's Dimensions of Culture

A framework for understanding cultural differences across countries, including individualism/collectivism, masculinity/femininity, uncertainty avoidance, power distance, and time perspective.

Cultural Symbols

Things that represent ideas and concepts in a specific culture, evoking deep feelings and influencing consumer response.

Back Translation

The practice of translating a message from the original language to a target language, then back into the original language by a different interpreter to catch errors.

Currency Exchange Rate

The price of one country's currency expressed in terms of another country's currency; fluctuations affect sales and profits of global companies.

Political Stability

The durability and consistency of political systems within a country, impacting foreign trade and investment.

Trade Regulations

Rules and policies imposed by governments that impact how trade is conducted and how products/services are sold to consumers.

Exporting

A global market-entry strategy where a firm produces goods in one country and sells them in another, representing the least financial commitment, risk, and marketing control.

Licensing

A global market-entry strategy where a company offers the right to a trademark, patent, trade secret, or other similarly valued item of intellectual property in return for a royalty or fee.

Joint Venture

A global market-entry strategy where a foreign company and a local firm invest together to create a new business entity in the host country.

Direct Investment

A global market-entry strategy where a domestic firm actually invests in and owns a foreign subsidiary or division, representing the highest financial commitment, risk, and marketing control.

Product Extension Strategy

Selling the same product in another country without adaptation.

Product Adaptation Strategy

Changing a product in some way to make it more appropriate for a country's climate or consumer preferences.

Product Invention Strategy

Creating a totally new product to satisfy common needs across countries or for a specific country.

Communication Adaptation Strategy

Adapting the promotional message for a product in another country while keeping the product itself the same.

Dual Adaptation Strategy

Adapting both the product and the promotional communication strategy for a specific country or culture.

Dumping

A pricing strategy where a company sells products in a foreign country below their cost of production or below the prices in their home market.

Gray Market (Parallel Importing)

A situation where products are sold through unauthorized channels in a country, often at prices lower than those offered by authorized distributors.