Chapter 7 INternational Marketing

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Trade feedback effect
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imports affect exports and viceversa
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Countertrade
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practice of using barter rather than money for making global sales
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Gross Domestic Product (GDP)
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Monetary value of all goods and services produced in a country during a year.
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Balance of Trade
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difference between the monetary value of a nation’s exports and imports
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Competitive advantage of Natiosn
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1) Factor conditions 2) Demand conditions Related and supporting industries company strategy, structure, and rivalry
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Factor conditions
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natural resources, education and skill levels, and wage rates
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Demand Conditions
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the size and sophistication of the market and the media exposure of products
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related and supporting industries
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the existence of supplier clusters that can accelerate innovation. Firms and industries seek leadership in global markets need clusters of wood-class supliers that accelrate innovation.
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Company strategy,structure,and rivalry
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conditions governing the way a nation’s business are organized and managed, along with the intensity of domestic competition.
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Economic espionage
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secret collection of trade secrets or proprietary information about competitors. Clandestine gathering of competitors trade secrets.
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Economic Espionage Act (1996)
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makes it a federal crime in US
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4 trends have changed global marketing
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1) the decline of economic protectionism 2) the rise of economic integration 3) global competition among global companies for global customers 4) the development of a networked global marketspace
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Protectionism
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practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas
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Tariffs
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government tax on goods or services entering a country, primarily service to raise prices on imports
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Quota
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Restriction placed on the amount of a product allowed to enter or leave a country.
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General Agreement on Tariffs and rade (GATT)
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intended to limit trade barriers and promote world trade through the reduction of tariffs.
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World trade organization (WTO)
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permanent institution that sets rules governing trade between its member through panels of trade experts who decide on trade disputes between members and issue binding decisions
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NAFTA
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north american free trade agreement
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CAFTA-DR
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US-central america -DR
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global competition
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exists when firms originate, produce, and market their products and services worldwide.
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Strategic alliances
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agreements among two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation.
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Global Companies (3 kinds)
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Internation firms multinational firms transnational firms
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International firm
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engages in trade and marketing in different countries as an extension of the marketing strategy in its home country. They do not change their domestic marketing approach when introducing their products to aother countries.
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Multinational firms
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views the world as consisting of unique parts and markets to each part differently
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Multidomestic / Multinational marketing strategy
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many different product variations , brand names, and advertising programs as countries in which they do business.
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Transnational firms / Global marketing
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Views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences. Use global marketing strategy.
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Global marketing strategy
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Practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
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Global brand
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brands marketed under the same name in multiple counries with similar and centrally coordinated marketing programs.
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Global consumers
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refers to consumer groups living in many countries or regions of the world which have similar needs or seek similar features and benefits from products or ser`vices.
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3 uncontrollable environmental factors:
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cultural, economic, and political-regulatory climate factors.
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Cross cultural analysis
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invovles the study of similarities and differences among consumers in two or more nations or societies. Invovles understanding values, customs, symbols, and language
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Foreign corrupt practices act (1977)
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prohibits Bribing in US
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Semiotics
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Seeks to understand the correspondence between symbols and their assigned meanings. Marketers want to avoid symbols taht might be wrong to use in different situations.
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Back translation
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Translated word or phrase is re translated into the original language by a different translation to avoid unintended meanings
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Cultural ethnocentricity
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Believe that your culture is superior to any other culture.
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Consumer ethnocentrism
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tendency to believe that it is inappropriate or immoral to purchase foreign-made products. “DONT buy products from China”
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Economic considerations by marketers:
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-the stage of economic development in different countries -economic infrastructure in these countries -consumer income of different countries -currency exchange rates in different countries.
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Stage of economic development:
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Developed countries- have somewaht mixed economies developing countries: moving from an agricultural to industrial economy
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Bottom of the pyramid
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refers to the largest but poorest socioeconomic group in the world
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Economic Infrastructure
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refers to the communication, transportation, financial, and distribution systems in a country which can affect the level of economic development. ex. bicycle is the preferred transpotation method in china, which ahs few navigable roads outtside major cities.
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counsuer income of different countris
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AS income grows in the developing countris, world trade will benefit.
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microfinance
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the practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necesary to begin small businesses or other income generating activities.
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Currency exchange rate
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-price of one country’s currency expressed in terms of another country’s currency, such as the US dollar expressed Japanese yen.
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Political stability
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marketers should study the national governments orientation toward foreign companies, investment, and trade.
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Trade regulations
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rules that govern domestic business practices can serve as trade barriers.
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Global Market-Entry Strategies
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exporting licensing joint venture direct investment
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Exporting
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INdirect exporting involves an intermediary Direct exporting needs no intermediary, more profits.
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Licensing
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3 main licensing variations: contract manufacturing contract assembly franchising
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contract manufacturing
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domestic company contracts with a foreign firm to make products according to specifications.
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contract asembly
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domestic company contrats with a foreign firm to assemble parts manufactured domestically that have been shipped to the foreign country.
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Franchising
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McDonalds en otro pais
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Joint Venture
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foreing compnay and local firm invest together to create a local business.
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Direct investment
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bigges commitment, which entails a domestic firm actually investing in and owning a foreign subsidiary or division.
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Product strategies
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-product extension strategy -product adaptation strategy -product invention strategy
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product extension strategy
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selling virtually the same product in other countries.
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product adaptation strtegy
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seeling the product w/ some adaptations that make it more approrpiate for the customer preferences, culture, or climate in a particular country.
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product invention strategy
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selling a totally new product to satisfy common needs across countries.
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Promotion strategies:
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Communication adaptation strategy dual adaptation strategy
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Communication adaptation strategy
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Advertising the same product in multiple countries in different ways.
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Dual adaptation strategy
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Both the products and the promotion messages are changed from country to country.
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Dumping
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when a firm sells a product in a foreign country below its domestic price or below its actual cost.
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Gray market (Paralllel Importing)
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situation where products are sold through unauthorized channels of distribution. people will buy products in low price countries, and import them to high-price countries to make a profit. This is legal in US, but ilegal in Europe.
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Standardization:
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pure standardization mied approach (glocalization) pure non standardization
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Pure standardization
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company uses the same busines model everywehre it operates. CHeapest an easiet ay to expand from coutnry to country
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Mixed approach (glocalization)
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company goes into ach market and decdes which aspects of the company can be kept and which ones to change
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pure non-standardization
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Company does everything differently
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Global Scan
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Cross-cultural study of consumers measured more than 250 beliefs and values and more than 1000 brand preferences. 5 key segments: strivers achievers pressureds adapters traditionals
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Strivers
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people who are farily young and lead extremly active lives.Their top priority is convenience. THey prefer products taht are instantly gratifying
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achievers
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people who are the same age as the strivers but who have already found succes the strivers are pursuing. The value status and quality and tend to set consumer trends
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Pressureds
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mostly women, find it difficult to manage all the parts of their lives. They contend with constant economic, family, and work pressures, leaving little room for leisure and enjoyment.
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Adapters
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Older consumers they do not lose sight of their old ideas, they recognize and respect new ones. Prepared to try anything new.
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Traditionals
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OLDEST group, embody the oldest values of their country and culture, they want confortable routines and familiar products, they dont want to change.

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