International Marketing

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Definition of International Marketing

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Marketing

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1

Definition of International Marketing

Consists of the activity, institutions and processes across national borders. - Czinkota and Ronkainen

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2

Export and trade

Selling goods or services to other nations and importing from them.

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3

Licensing

Right to use a technical solution.

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4

Joint ventures

Two existing companies merge into a new one.

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5

Wholly owned subsidiaries

You own 100% of a company (all the control and all the risks).

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6

Turnkey operations

On my behalf, do my production and I’ll pay you everything! (no risk taken)

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7

Management contracts

Sign contracts with pros who know what they are doing. You control the hotel strategically, not as a manager.

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8

Why is international marketing a key agent of societal change?

It influences what we buy so it can change our society.

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9

Why is international marketing a key instrument that responds to business strategy?

The decisions are based on international issues.

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10

Dates of Booming Growth

2015-2019 and then CoVid

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11

Situation in 2023

Post-COVID-trade recovers but there are dramatic shifts.

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12

Definition of Trading Blocs

Two or more countries who agree on trade policies.

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13

Name the different trading blocs

NAFTA, MERCOSUR, ASEAN, (EU)

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14

What’s the world’s largest trading bloc?

RCEP with 1/3 of all economic activity

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15

What does RCEP stand for?

Regional Comprehensive Economic Partnership, it’s made of the Asia-Pacific nations

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16

What does FDI stand for?

Foreign Direct Investment

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17

How do FDIs lead to the end of international cooperation?

FDI → Global interdependence → Deglobalisation → Protectionism → Every man for himself

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18

Who has more power between domestic & global economic activity?

Global economic activity: Global Market Forces impose increasing tight limits on national economic regulation.

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19

How do currency flows affect trade?

Currency flows → Exchange rates more or less expensive → Higher or lower levels of trade

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20

What are 4 policy makers?

Tariffs, quotas, trade barriers, import regulations

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21

What are 2 consequences of global linkages?

🙂 Closer economic relations but interdependence

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22

Why should countries trade with each other?

More global business activities = More opportunities

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23

What’s the difference between efficiency and effectiveness?

Efficiency is about using less resources and time in the production process, while effectiveness is about the quality of the outcome.

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24

Is WTO for or against protectionism?

Against

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25

What does WTO stand for?

World Trade Organisation

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26

What does the WTO do?

It regulates trade restrictions.

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27

What are the 8 market characteristics?

(P P U D I I I C): Population, Purchasing Power Parties, Urbanisation, Data on product saturation/diffusion, Inflation, Income, Infrastructure, Consumption patterns

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28

Definition Emerging Market

Country that tries to change and improve its economy.

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29

What does economic integration create for the international marketer?

Opportunities and potential problems

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30

Give 4 examples of natural resources

Minerals, land, water and energy

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31

Why are natural resources important?

They are attractive for PRODUCTION and they determine the ECONOMIC STRUCTURE of a country.

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32

What are the 4 physical characteristics added to natural resources?

TICU: Topography, Infrastructure, Climate, Urbanisation

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33

What are the 6 socio-cultural elements?

Ramole: Religion, Aesthetics, Material culture, Organisation, Language, Education

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34

2 things to know about the political environment in international marketing

1) Stability of government policy and 2) Risks of harrassment from political policies

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35

What are the 3 ways to reduce political risks?

Identifying vulnerability, establishing positive interactions and regulating international transfers of resources.

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36

What are 4 foreign market entry strategies?

Indirect export, direct export, foreign production and cooperative export

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37

What is indirect export?

R&D, production marketing and S&S in home country

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38

What is direct export?

S&S are abroad

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39

What is foreign production about?

Licensing, franchising and contract manufacture

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40

What is cooperative export?

Marketing and S&S abroad

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41

What are 4 proactive stimulis?

Unique products, profit advantage, technological advantages and exclusive information

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42

What are 3 reactive stimulis? = reaction that leads to internationalisation of exports

Not competitive enough home, overproduction and saturated domestic market

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43

What are 2 internal change agents in the internationalisation process?

New management and significant internal event

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44

What are 3 external change agents in the internationalisation process?

Demand, government and proximity to ports

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45

Definition of licencing agreement

The licensor permits the licensee to use its intellectual property in exchange for compensation designated as a royalty.

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46

What are 3 advantages of licensing?

Benefits from new development, reduced risk of failures and not many skills required

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47

What are two disadvantages of licensing?

Limited expertise and the licensor creates its own competitor

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48

Definition of franchising

The franchiser grants the franchisee the right to do business in a specified manner. = How to do business

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49

What’s the difference between a retailer system and a wholesaler system?

Retailer = small quantity / Wholesaler = big quantity

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50

What are the 3 types of franchising?

  • manufacturer-retailer system

  • manufacturer-wholesaler system

  • service-firm-retailer system

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51

Definition of FDI

Investment in which an investor resident in one economy establishes a lasting interest in an enterprise resident in another economy

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52

Definition of portfolio investment

Focus on the purchase of stocks and bonds internationally

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53

What are 3 advantages of FDI?

More employment, competitiveness, managerial skills

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54

What are 2 disadvantages of FDI?

Dependence and competition for local firms

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55

Definition of strategic alliances

Arrangement between 2 or more companies with a common business objective

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56

Definition of government consortia

A collaborative partnership between multiple government entities.

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57

Definition of standardised global marketing

Same marketing strategy and mix in all of the company’s international markets

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58

Definition of adapted global marketing

Adjust the strategy to each target market

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59

What is it called when: neither the product nor the communication change?

Straight extension

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60

What is it called when: the product is adapted but the communication doesn’t change?

Product adaptation

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61

What is it called when: the product doesn’t change but the communication adapts?

Communication adaptation

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62

What is it called when: the product and the communication adapt?

Dual adaptation

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63

What is it called when: a new product is developed?

Product invention

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64

What would examples of ‘core product benefits’ be? (2)

Performance, functional features

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65

What would examples of ‘product attributes’ be? (3)

Brand name, price, staff behaviour

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66

What is predictive maintenance?

Maintenance before the product breaks

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67

What’s the main marketing difference between linear and circular economy?

In the circular economy, the after-sales service is more important than the actual product sale

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68

What does noise do?

It prevents the message from being heard and that people remember and act

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69

What would an example of noise be?

Lack of authenticity in an influencer’s words

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70

What 4 types of differences can prevent communiation?

SELL: Sociocultural, Economic, Language and Legal differences

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71

What is the main indicator of a firm’s sales?

The price

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72

Definition of usury

To lend money at unreasonably high rates of interest

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73

What are 2 external factors of price?

The environment & the market

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74

What are the 4 pricing strategies?

Price-level (1st time), price changes, pricing across products and pricing across countries

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75

Definition of goods

Fixed in form and require physical distribution

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76

Definition of services

Intangible, personalised and perishable

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77

What is the most product-dominant entity?

Salt

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78

What is the most service-dominant entity?

Teaching

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79

What are the 6 unique characteristics of services?

PQCHTS: Perishable, Quality perception, Custom-made, Heterogen, Transparent and Sensitive culture

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80

What are the 3 types of services?

People processing, Possession-possessing and Information-based

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81

What are 3 examples of people-processing services?

Education, healthcare, lodging

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82

What are 3 examples of possession-processing services?

Car repair, equipment installation, laundry

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83

What are 3 examples of information-based services?

Telecommunication, banking, internet

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84

What is the most standardised type of service?

Information-based services

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85

What is the least standardised type of service?

People-processing services

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86

What does ITO stand for?

International Trade Organisation

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87

What is the International Trade Organisation?

An organization that promotes global trade and economic cooperation by setting a series of agreements

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88

When was the ITO founded?

1948

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89

What does GATT stand for?

General Agreement on Tariffs and Trade

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90

When was the GATT founded?

1947

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91

What was the GATT’s main role?

Settlement of disputes

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92

When did the GATT become WTO?

In January 1995

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93

What does IMF stand for?

International Monetary Fund

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94

When was the IMF founded?

1944

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95

What does the IMF do?

It provides fixed exchange rates between countries to create stability

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96

What is the Doha Round?

Round of trade negotiations among the WTO membership

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97

What is the World Bank?

Founded in 1944, it provides economic assistance for the reconstruction of war-torn countries

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98

What is the European Coal and Steel Community?

Regional organization established in 1951 to promote economic cooperation among 6 European countries → Create a common market for coal and steel = essential for post-war reconstruction

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99

What are customs unions?

Trade agreements between countries that eliminate tariffs on goods traded within the union and establish a common external tariff for goods from outside the union.

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100

European Union, values

Free movement of capital, services and people + development of common international policies

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