Marketing Chapter 7: Understanding and Reaching Global Consumers and Markets

Vocabulary practice flashcards covering world trade dynamics, global market-entry approaches, environmental scanning, and global marketing strategies from Chapter 7.

Countertrade

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

Gross Domestic Product (GDP)

The monetary value of all products and services produced in a country during one year.

Balance of Trade

The difference between the monetary value of a nation’s exports and imports.

Trade Feedback Effect

The economic dynamic where a country's imports affect its exports and vice versa.

Protectionism

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

Tariffs

Government taxes on products or services entering a country that primarily serve to raise prices on imports.

Quota

A restriction placed on the amount of a product allowed to enter or leave a country.

World Trade Organization (WTO)

A permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.

European Union (EU)

A regional trade group consisting of 27 countries with about 445 million consumers that has eliminated trade barriers across borders.

Regional Comprehensive Economic Partnership (RCEP)

A trade agreement established in 2020 among 15 countries encompassing 2.2 billion consumers, covering roughly one-third of the world’s population and international trade.

Globalization

The focus on creating economic, cultural, political, and technological interdependence among individual national institutions and economies.

Global Competition

A condition that exists when firms originate, produce, and market their products and services worldwide.

Strategic Alliances

Agreements among two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation.

International Firm

A global company that engages in trade and marketing in different countries as an extension of the marketing strategy developed for its home market.

Multinational Firm

A global company that views the world as consisting of unique components and markets to each differently, utilizing different products, brands, and advertising.

Multidomestic Marketing Strategy

A strategy employed by multinational firms that involves having as many different product variations, brand names, and advertising programs as countries in which they do business.

Transnational Firm

A global company that views the world as one market and standardizes marketing activities when cultural similarities exist while adapting them when cultures differ.

Global Marketing Strategy

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

Global Brand

A brand marketed 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 or seek similar features and benefits from products or services.

Global Marketspace

An information- and communication-based electronic exchange environment enabling trade anywhere, anytime, and at a lower cost across continents.

Economic Espionage

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

Cross-Cultural Analysis

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

Values

A 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 U.S. law, amended by the International Anti-Dumping and Fair Competition Act (1998), 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 in a foreign country.

Cultural Symbols

Things that represent ideas and concepts in a specific culture and evoke deep feelings.

Back Translation

The practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.

Cultural Ethnocentricity

The belief that one's own culture is superior to another culture.

Consumer Ethnocentrism

The tendency to believe that it is inappropriate, indeed immoral, to purchase foreign-made products.

Economic Infrastructure

A country's communications, transportation, financial, and distribution systems.

Currency Exchange Rate

The price of one country’s currency expressed in terms of another country’s currency.

Exporting

A global market-entry strategy in which a company produces products in one country and sells them in another country.

Indirect Exporting

A market-entry strategy where a company sells its domestically produced products in a foreign country through an intermediary.

Direct Exporting

A market-entry strategy where a company sells its domestically produced products in a foreign country on its own without intermediaries.

Licensing

A global market-entry strategy in which a firm offers the right to a trademark, patent, trade secret, or other intellectual property in exchange for a royalty or fee.

Franchising

The fastest-growing market-entry strategy, representing a specialized form of licensing where a firm contracts with an entity to operate under its business system.

Joint Venture

A global market-entry strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits.

Direct Investment

A global market-entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division.

Product Extension Strategy

A global marketing approach where virtually the same product is sold in different countries using the same promotion strategy.

Product Adaptation Strategy

A global marketing approach that involves adapting or modifying a product for different countries while keeping promotional messaging the same.

Product Invention Strategy

A global marketing approach of creating entirely new products specifically designed to satisfy common customer needs across different countries.

Communication Adaptation Strategy

A global marketing approach where the same physical product is sold abroad, but the advertising and promotional message is adapted for each country.

Dual Adaptation Strategy

A global marketing approach that involves modifying both the product and the promotional messaging for different international markets.

Dumping

The pricing practice that occurs when a firm sells a product in a foreign country below its domestic price or below its actual cost.

Gray Market (Parallel Importing)

A situation where branded products are sold through unauthorized channels of distribution.