Chapter 1: The Scope and Challenge of International Marketing

Vocabulary flashcards covering key concepts from the notes.

Global commerce

Trade between nations that connects economies and tends to promote peace and cooperation.

End of the Cold War

Event that led to the opening of former communist countries to the world trading system.

Opening former communist countries to world trading system

Process by which former communist nations integrated into global trade after the Cold War.

Lack of consistent and predictable trade policies

Inconsistent policies can lead to tension and disrupt international trade.

Four Trends Affecting Global Business

Growth of the WTO and open trade; developing countries moving toward free trade; Internet/cellular networks; a mandate to manage the global environment.

World Trade Organization (WTO)

International body that promotes open trade and resolves trade disputes.

Developing countries moving toward free trade

Developing nations embracing liberalized trade to integrate with world markets.

Internet, cellular, and networked communication

Digital technologies that enable rapid global communication and business operations.

A mandate to manage the global environment for the future

Guiding objective to address global environmental and sustainability issues in international business.

Globalization of markets

Process by which national markets become more interconnected and interdependent.

Foreign Direct Investment (FDI)

Investment by a foreign entity that establishes control or significant influence in a host country.

Foreign-owned companies

Companies in a country that are owned by foreign investors.

Revenues from international sales

Income earned from selling goods and services outside the home country when exporting or operating abroad.

International Marketing Defined

The planning, pricing, promotion, and distribution of goods and services across national borders for profit.

Uncontrollable uncertainty

Elements in foreign markets outside the marketer's control that affect performance.

Controllable elements

Marketing-mix elements (product, price, promotion, place) that a firm can adjust.

Domestic environment uncontrollables

Political/legal forces; economic climate; competition; technology level; structure of distribution; geography/infrastructure; cultural forces.

Foreign environment uncontrollables

Political/legal forces; economic forces; competition; technology level; structure of distribution; geography/infrastructure; cultural forces abroad.

Cultural adjustment

Interpreting uncontrollable elements and adapting marketing to foreign cultures; avoid relying on your own frame of reference.

Self-Reference Criterion (SRC)

Unconscious reference to one’s own cultural values that can bias decisions in foreign markets.

Ethnocentrism

Belief that one’s own country or culture is best; problematic when dealing with less affluent countries.

Global awareness

Tolerance of and willingness to learn about cultural differences; knowledge of cultures, world market potential, and global trends.

Stages of International Marketing Involvement

Progressive levels of commitment to foreign markets: no direct foreign marketing; infrequent foreign marketing; regular foreign marketing; multidomestic/international marketing; global marketing.

No direct foreign marketing

Stage 1 where a firm has no active foreign marketing activities.

Infrequent foreign marketing

Stage 2 with occasional international marketing efforts.

Regular foreign marketing

Stage 3 with consistent international marketing activities.

Multidomestic or international marketing

Stage 4 with strategies tailored to each country or market.

Global marketing

Stage 5 with an integrated, worldwide marketing strategy.