Principles of Marketing Chapter 8 Quiz – Flashcards
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4 Ps of Marketing
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Product, Price, Place, Promotion
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Marketing Mix
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also known as the 4 Ps of marketing
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Alternative strategies for entering a foreign market
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importing/exporting, franchising, foreign licensing, subcontracting, and direct investment (in order of least to most involvement by a firm)
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Exporting/importing
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quick and easy way for a company to make money; surface-level
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Contractual agreements
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franchising, foreign licensing, subcontracting, stocking distribution
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International direct investment
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acquisitions, joint ventures, overseas divisions
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1980-1990
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influx of immigrants from Central America; demanded that brands communicate to them in Spanish if they wanted them to buy products
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related party trade
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trade by U.S. companies with their subsidiaries overseas as well as trade by U.S. subsidiaries of foreign-owned firms with their parent companies
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infrastructure
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a nation's basic system of transportation networks, communication systems, and energy facilities
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exchange rate
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price of one nation's currency in terms of another country's currency
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political risk assessment (PRA)
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units within a firm that evaluate the political risks of the marketplaces in which they operate as well as proposed new markets
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friendship, commerce and navigation (FCN) treaties
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international agreements that deal with many aspects of commercial relations among nations
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ISO (international organization for standardization) certification
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internationally recognized standards that ensure a company's goods, service, and operations meet established quality levels and its operations minimize harm to the environment
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tariff
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tax levied against imported goods
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revenue tariffs
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taxes designed to raise funds for the importing government
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protective tariffs
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taxes designed to raise the retail price of an imported product to match or exceed that of a domestic product
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import quota
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trade restrictions limiting the number of units of certain goods that can enter a country for resale
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embargo
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complete ban on the import of specific products
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subsidies
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government financial support of a private industry
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exchange control
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method used to regulate international trade among importing organizations by controlling access to foreign currencies
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dumping
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controversial practice of selling a product in a foreign market at a price lower than what it receives in the producer's domestic market
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free-trade area
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region in which participating nations agree to the free trade of goods among themselves, abolishing tariffs and trade restrictions
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customs union
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establishment of free-trade area plus a uniform tariff for trade with nonmember unions
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common market
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extension of customs union by seeking to reconcile all government regulations affecting trade
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general agreement on tariffs and trade (GATT)
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international trade accord that has helped reduce world tariffs
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world trade organization (WTO)
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organization that replaces GATT, overseeing GATT agreements, making binding decisions in mediating disputes, and reducing trade barriers
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European Union (EU)
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customs union that is moving in the direction of an economic union by adopting a common currency, removing trade restrictions, and permitting free flow of goods and workers throughout the member nations
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franchise
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contractual arrangement in which a wholesaler or retailer agrees to meet the operating requirements of a manufacturer or other franchiser
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foreign licensing
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agreement that grants foreign marketers the right to distribute a firm's merchandise of to use its trademark, patent, or process in a specified geographical area
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subcontracting
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contractual agreements that assign the production of goods and services to local or smaller firms
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global marketing strategy
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standardized marketing mix with minimal modifications that a firm uses in all of its domestic and foreign markets
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multi domestic marketing strategy
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application of market segmentation to foreign markets by tailoring the firm's marketing mix to match specific target markets in each nation
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countertrade
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form of exporting whereby good and services are bartered rather than sold for cash
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why is the United States attractive as a target market for foreign marketers?
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large population, high level of disposable income per consumer, low risk due to political stability, favorable attitude toward foreign investment, and growing economy
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Identify the major components of the environment for global marketing
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economic, socio-cultural, technological, political-legal, and competitive
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Differentiate between a global marketing strategy and a multi domestic marketing strategy
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global marketing strategy: defines a standard marketing mix and implements it with minimal modifications in all foreign markets (Dominos's first strategy) multi domestic marketing strategy: requires firms to customize their marketing decisions to reach individual marketplaces (Dominos's second strategy)
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Describe the alternative marketing mix strategies used in global marketing
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Product & promotional strategies: straight extension, promotion adaptation, product adaptation, dual adaptation, product invention alternate options: distribution, pricing, and countertrade strategies
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straight extension strategy
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one product, one message worldwide. Permits economies of scale in production and marketing and universal recognition of a product
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product, promotion & dual adaptation
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changing a product or promotion strategy (or both) to better fit a foreign market
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product invention
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inventing a new product as part of a preexisting line or group of products to better suit a foreign market (ex: a hand-powered device rather than one that requires a power outlet)
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pricing strategy
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companies must adapt their pricing strategies to local markets and alter them when conditions change to continue to be successful in a given market
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undifferentiated marketing
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one marketing strategy is used across all demographics
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micro marketing
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targeting individuals rather than groups
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concentrated marketing
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selecting specific segments to which you'll market your brand
