Marketing Chapter 4 - International Trade

International Trade

The exchange of goods and services among nations.

Absolute Advantage

A country’s ability to produce at a lower cost than any other nation gives the country an absolute advantage.

Comparative Advantage

The ability to produce a good at a lower opportunity cost

Trade Deficit

Happens when a country imports more goods and services by dollar value than in exports

Trade Surplus

When exports exceed imports

Balance of Trade

The difference in value between all exports and imports

Tariffs

Tax on imports

Embargos

A total ban on trade with another country

Quotas

Limits either the quantity or the monetary value of imported products

Licensing

Involves letting another company use a trademark, patent, or special formula, company name for a fee.

Imports

Purchasing goods from a foreign country

Exports

Goods and services sold to other countries

Joint Venture

A business enterprise that a domestic company and foreign company undertake together.

Globalization

Selling the same product and suing the same promotion methods in all countries. It is mass marketing on a global scale

Customization

Creating a totally new product and promotion for a specific country

Product Adaptation

The company keeps the brand name, but changes the product to meet local needs and tastes.

Promotion Adaptation

Changing some part of the promotional message or visuals used in the promotional campaigns.