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Global Marketing Chapters 1-4 (Gillespie 3rd edition)

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Why Go International?
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1. Expand Sales Profit 2. Acquire Resources 3. Minimize Risk 4. Gain Geopolitical Influence 5. React to Inquires from Abroad 6. Respond to Domestic Competitive Shock 7. Follow Major Customers Abroad 8. Leverage economies scale and scope
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Global Firm
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Company that Gains advantages in its cost and reputation not available domestically
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Standardization
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Similar Tastes Strong Country of Origin Image Reduce Cost
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Adaptation
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Variations in consumer needs and conditions of use variation in consumer income cultural differences different technical style regulations
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Development of Global Marketing
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Domestic Marketing Export Marketing International Marketing (local investments, modification of 4 P’s) Multinational Marketing (multidomestic) Pan-Regional Marketing (NAFTA, EU)
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Skills needed
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Adaptable Overcome obstacles Teamwork negotiation work with different personalities
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Environmental Factors
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1. Social 2. Economic 3. Technology 4. Competition 5. Regulatory 6. Political 7. Natural
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Gross National Income (GNI)
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The market value of final goods and services newly produced by domestically owned factors of production
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Gross Domestic Product (GDP)
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Values of production that takes place within a nations border, without regard to whether the production is done by domestic or foreign factors of production
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Basic Theories of World Trade
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1. Absolute Advantage -Trade is based on each country selling what it is best at producing 2. Comparative Advantage -Trade can occur between two countries even if one of the countries has no absolute advantage 3. Competitive Advantage -Land/Natural resources, labor, technology, capital make world power
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Balance of Payment (BOP)
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Record of International Transactions -Imports, Exports, and capital in one year – Current Account Goods & services sold and purchased (BOT)
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Exchange Rate
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Measures the value of one currency in terms of another currency
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How Do Governments change value of the dollar/Exchange rate?
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-Increase or remove dollars from the market in the federal reserve -sell bonds, build things, issue products
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Agencies Promoting Economic and Monetary Stability
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IMF -International Monetary Fund, Control Currency World Bank -Gives Loans WTO -World Trade Organization, Facilitate Trade
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Which organization helps with currency issues?
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IMF
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Non-Tariff Barriers
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Licensing Safety Standard Weight Limit
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Identification of Cultures
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-points of reference: national, geographic, language, region, race, attire, food, laws, customs, values
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Marketing and Islam
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forbids interest encourages modest dress requires food to be halal (no alcohol or pork)
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High Trust vs. Low Trust
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High Trust- easily trust others Low Trust-gives jobs to relatives because there is low trust among others
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Attitudes Toward Time
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Monochronic- one task at a time Polychronic
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Temporal Orientation
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Value of past, present, or future past-Europe and Middle East present-Mexico future-USA
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Company Attitude to Culture
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-ethnocentric: belief your country is superior -polycentric: emphasis on individual country cultures -Geocentric: Mixture
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Context of Language
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low-context: communication is clear high-context: meanings are more implicit, interpreted
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Showing emotion
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affective culture- show emotions neutral cultures- no emotion
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How to select a country to invest in
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1. Policy Uncertainty 2. Macro Stability 3. Tax Rates 4. Regulation and Tax Administration 5. Finance, Skills, Crime
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Host Country
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a country that contains an operational unit (marketing, sales, manufacturing, R&D) of an international company
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Motivations of Politicains
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1. Self Preservation 2. Security 3. Prosperity 4. Prestige 5. Idology 6. Cultural Identity
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Host Country Pressure Groups
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-labor unions -political parties -environmental groups -local business community
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Host Country Actions
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-Government Subsidies -Ownership Restrictions -Operating Conditions (work permits, local content requirement, political motives, lack of security)
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Takeovers
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1. Expropriation-Formal seizure of operation (with or without compensation) 2. Confiscation- expropriation with no compensation 3. Domestication/Nationalization- local run, owners retain title but not involved in operation. Compensated
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International Legal Tradition
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1. Common Law- English Law 2. Civil (or code) law- written law in the past 3. Islamic law- Islamic common law 4. Socialist Law- Marxist Ideology
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Regulatory Forces
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1. Product Liability 2. Bankruptcy 3. Regulation cyberspace 4. Patents 5. Trademarks
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Legal Issues
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1. Worker Relations (health and safety) 2. employment practices 3. Antitrust prohibitions 4. Contractual relationships 5. Environmental Practices 6. Patents, trademarks, intellectual Property 7. Taxes/regulations 8. Advertising regulations
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Managing Regulatory Change
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Alter-bargain to get govt. to change regulations Avoid-move to bypass the impact of the regulation Accede-Comply Ally- Avoid some risks by seeking strategic alliances
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Risk Reduction Strategies
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Sharing Risks (Joint ventures, alliances, licensing, franchising) Miniminzing Assets at Risk Insuring Againsts Risks (Govt., Private firms)