INT MARKETING - CHAPTER 1

What are some of the trade preference programs that the U.S. government uses to assist countries?

Generalized System of Preferences (GSP): preferential duty-free treatment for up to 5000 products from designated beneficiary countries and territories throughout the world.

Caribbean Basic Economic Recovery Act: Duty-free trade of Central American products with USA; prevent spread of communism

Andean Trade Promotion & Drug Eradication Act: Duty-free access for many products from 4 countries (Bolivia, Colombia, Ecuador, Peru); also their attempt to stop major cocaine producers

African Growth and Opportunity Act: Duty-free entry for all products from 40 countries in Sub-Saharan Africa till 2025

What is “Most-Favored Nation (MFN)” treatment in international trade?

A country has been granted the most favorable trading terms available by another country (i.e., lowest tariffs on imported goods); typically used for political reasons.

What are some of the reactive reasons that drive companies to market their products internationally? What are some of the proactive reasons?

Reactive:

• Responding to unsolicited offers from abroad

• Loss of domestic competitiveness

• Defensive purposes (foreign competition)

Proactive:

• Expanded market potential and growth

• Geographic diversification to spread risk

• Economies of scale and optimal productivity

• Product at the end of its life cycle

• Overseas markets as source of new products, way of doing business

What are the uncontrollable environments in international marketing? How do they differ from domestic marketing?

Foreign Environment Uncontrollables: Political & legal forces, economic forces, competitive forces, level of technology, structure of distribution, geography and infrastructure, cultural forces.

They difference is in the environments.

What is the self-reference criterion (SRC)? What are the dangers of the SRC?

SRC: an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions

Dangers: (1) Failing to recognize the need to take action (2) Discounting the cultural differences that exist among countries (3) Reacting to a situation in a way offensive to your hosts

What is Ethnocentrism?

The notion that one’s own culture or company knows best how to do things

What are the 5 stages of international marketing involvement and what do companies do at each stage? ***

No direct foreign marketing

Infrequent foreign marketing

Regular foreign marketing

Multidomestic - International marketing

Global marketing

What are the 3 different strategic orientations in international marketing and the firm classifications they represent?

Domestic Market Extension → Ethnocentric

Multi-Domestic Market → Polycentric

Global Marketing → Regiocentric or Geocentric

What is the Value Chain and how do global companies optimize it?

Value Chain: The series of activities that create a product or service, from start to finish. It includes the design, production, marketing, and distribution of a product. Global companies optimize the value chain by assigning each element of the value chain to the subsidiary that does it best