International Marketing & Global Trade Environment Vocabulary

Vocabulary flashcards covering key concepts, trade barriers, cultural indices, political risk factors, and market entry controls from the lecture notes.

Controllable Elements (International Marketing Task)

The firm's own marketing mix consisting of product, price, place, and promotion.

Domestic Environment Uncontrollable

Home-country political, economic, and competitive forces that shape strategy.

Foreign Environment Uncontrollable

Host-country political, economic, cultural, technological, and competitive forces the firm must adapt to.

Self-Reference Criterion (SRC)

An unconscious reference to one's own cultural values, experiences, and knowledge.

Ethnocentrism

The belief that one's own country, culture, or country is the best.

Tariffs

A tax imposed on goods as they cross a national customer's border; it is the oldest and most visible trade barrier.

Ad Valorem Tariff

A tariff calculated as a percentage of the goods' declared value.

Specific Tariff

A tariff calculated as a fixed fee per physical unit.

Compound Tariff

A tariff combination of both a percentage of declared value and a per-unit fee.

Absolute Quota

A hard cap where imports stop completely once the quantitative limit is reached.

Tariff-Rate Quota

A trade restriction featuring a lower tariff up to a threshold, and a much higher tariff beyond it.

Import License

Government permission required before goods may be imported at all.

Exchange Barriers

Anything that makes it difficult for buyers and sellers in different countries to trade goods, services, or money.

Psychological Barriers

Differences in attitudes, beliefs, values, and perceptions that make it difficult for people from different cultures to understand or communicate with each other.

Boycotts

Bottom-up trade restrictions driven by public opinion, activism, or protest.

Embargoes

Top-down legal prohibitions on trade enforced by a government.

Monetary Barriers

Using currency and exchange-rate policy to restrict trade indirectly.

Exchange Controls

Monetary restrictions where importers must apply for scarce foreign currency to pay suppliers.

Multiple Exchange Rate

Unfavorable exchange rates applied specifically to imported goods.

Currency Undervaluation

Maintaining a weak currency to make a country's exports cheap and imports costly.

Antidumping Penalties

Duties imposed when a foreign firm sells products below fair value.

Dumping

When a company exports a product at a price lower than it charges in its home market (or below cost).

Countervailing Duties

A penalty imposed to offset foreign government subsidies.

Domestic Subsidies and Economic Stimuli

Government support through cash grants, tax breaks, cheap loans, or price supports that lets domestic firms compete without a border tax.

World Trade Organization (WTO)

An international organization that sets and enforces rules for trade between countries and helps resolve trade disputes.

Power Distance Index (PDI)

A measure of how much a culture accepts unequal levels of power and authority between people.

Uncertainty Avoidance Index (UAI)

A measure of how comfortable a culture is with uncertainty, risk, and unknown situations.

Masculinity/Femininity Index (MAS)

A measure of how much culture values competition, achievement, success, and traditional gender roles versus cooperation and relationships.

Indulgence

A measure of how much a culture allows people to enjoy life, have fun, and satisfy their desires.

Linguistic Distance

The differences between two languages and how difficult it is for speakers of one language to understand or learn the other.

Bilingualism

The ability to speak and understand two languages.

Biculturalism

The ability to understand and participate in two different cultures.

Sovereignty

A nation's supreme, independent authority to govern its own territory, resources, and people free from outside interference.

Nationalism

A strong sense of national identity and pride that can favor domestic interests over foreign ones.

Targeted Animosity

When a government or group has negative feelings toward a specific foreign company, country, or industry.

Confiscation

Abrupt seizure of property by a government with no compensation.

Expropriation

Government takeover of property where compensation is offered, sometimes below fair value.

Domestication

When a whole industry (such as oil or utilities) is taken into state control.

Local-Content Laws

Mandates to use a set share of domestic labor, parts, or suppliers.

Planned Domestication

Intentionally giving some ownership or control of the company to local people or the government to reduce the risk of government takeover.

Political Payoffs

Giving financial or other benefits to government officials or groups in exchange for favorable treatment.

Exchange Barriers

Anything that makes it difficult for buyers and sellers in different countries to trade gods, services or money.

Psychological Barriers

 Differences in attitudes, beliefs, values, and perceptions that make it difficult for people from different cultures to understand or communicate with each other. 

Reasons to maintain government restrictions

National Security, Infant Industry, Protect Domestic Jobs, Fair Competition, retaliation/Leverage, Revenue Generation

National Security

Preserve domestic capacity in defense-critical industries (steel, semiconductors, energy

Infant Industry

Shield new, developing industries until they reach competitive scale.

Protect Domestic Jobs

Slow job losses to lower-costs foreign producers in politically sensitive sectors.

Fair Competition

Offset foreign subsidies or dumping that distort a level playing field.

Retaliation / Leverage

Pressure trading partners to open their own markets or change practices.

Revenue Generation

Tariffs provide government revenue, especially in developing economies.

Standards

Protect consumers; but they can also be written or applied in ways that are far easier for domestic producers to meet than foreign competitors, making them a form of disguised protectionism. 

Product Standards

Size, composition, or performance specifications.

Health & Safety Standards

Inspection and certification requirements at the border.

Packaging & Labeling Standards

Language, content disclosure, and origin-marketing rules.

Fair-Value Test

Export price is compared to the home-market or cost-based price.

Injury Requirement

Regulators must show domestic industry harm, not just a price gap.

Direct Subsidies

Cash payments or grants tied to production or exports.

Tax Incentives

Reduced tax burdens for targeted domestic industries.

Agricultural Support

Price floors and stimuli common in farm sectors worldwide.

Causes of Instability

Government Stability, Attitude towards foreign investments, Bureaucracy & regulation, Public opinion & Media, Corruption Level

Government Stability

How often leadership or policy direction changes hands

Attitudes Toward Foreign Investment

How open or restrictive officials are toward outside firms.

Bureaucracy & Regulation

Complexity of permits, red tape, and compliance costs.

Public Opinion & Media

How citizens and the press portray foreign business.

Corruption Level

Extent of bribery and favoritism in dealings with officials

Democracy

Power held by elected representatives under rule of law. Property rights and predictable policy generally favor foreign business.

Authoritarian / Totalitarian

Power concentrated in one leader or party with few checks> Limited transparency raises unpredictability and regulatory risk.

Constitutional Monarchy

A monarch serves as head of state within a constitutional framework; elected officials typically run day-to-day governance.

Theocracy

Religious law and leaders govern the state. Products, marketing, and practices must align with religious norms

Exchange Controls & Currency Inconvertibility

Restrictions on converting local currency or repatriating profits abroad

Import Restrictions

Legal restrictions or outright bans on trade with a specific country or entity.

Tax Controls

Added costs and quotas that limit access to a market

Price Controls

Government limits on pricing, margins, or repatriation of earnings.

Labor Problems

Issues involving employees, such as strikes, low wages, unsafe working conditions, or disagreements between workers and management, that can disrupt a company’s operations.

Political Sanctions

Punishments or restrictions placed by a government on another country, company, or person to influence their behavior

Joint Ventures & Local Partners

Share ownership and risk with local firms who understand the environment

Expanding the investment base

Spreading investments across different countries or locations so the company is not too dependent on one place.

Licensing and Franchising

Allowing a local company to use your brand, products, or business model instead of owning and operating everything yourself

Political Bargaining

Negotiating with the government to reach agreements that protect the company’s interests.

Reasons to encourage foreign investments

Job Creation, Technology Transfer, Tax Revenue, Infrastructure Growth, GDP Growth, Access to Global Markets

Job Creation

New employment opportunities help reduce unemployment.

Technology Transfer

Exposure to new skills, processes, and innovation.

Tax Revenue

Corporate and payroll taxes help fund public services

Infrastructure Growth

Investment often builds roads, utilities, and facilities

GDP Growth

Foreign investment contributes directly to economic expansion

Access to Global Markets

Local firms gain export capacity and supply-chain links