Marketing Chapter 5: Developing a Global Vision

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Global Marketing
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marketing that targets markets throughout the world
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Global Vision
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recognizing and reacting to international marketing opportunities, using effecting global marketing strategies, and being aware of threats from foreign competition in all markets
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Gross Domestic Product (GDP)
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the total market value of all final goods and services produced in a country for a given time
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Job Outsourcing
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sending U.S. jobs abroad
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Multinational Corporation
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a company that is heavily engaged in international trade, beyond exporting and importing
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Capital Intensive
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using more capital than labor in the production process
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Global Marketing Standardization
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production of uniform products that can be sold the same way all over the world
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Multidomestic strategy
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when multinational firms enable individual subsidiaries to compete independently in domestic markets
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Mercosur
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the largest Latin American trade agreement; includes Argentina, Boliva, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela
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Uruguay Round
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an agreement to dramatically lower trade barriers worldwide; created the WTO
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World Trade Organization
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a trade organization that replaced the old General Tariff Agreement on Tariffs and Trade (GATT)
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General Agreement on Tariffs and Trade
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a trade agreement that contained loopholes enabling countries to avoid trade-barrier reduction agreements
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NAFTA
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an agreement between Canada, America, and Mexico that created the world’s then largest free trade agreement. Largest Economy in the world
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Central America Free Trade Agreement
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a trade agreement instituted in 2005, that includes Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States
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European Union
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a free trade zone, encompassing 27 European countries
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World Bank
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an international bank that offers low-interest loans, advice, and information to developing nations
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International Monetary Fund
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an international organization that acts as a lender of last resort, providing loans to troubled nations, and also works to promote trade through financial cooperation
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Group of 20 (G-20)
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a forum for international economic development that promotes discussion between industrial and emerging market countries on key issues related to global economic stability
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Exporting
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selling domestically produced products to buyers in other countries
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Buyer for Export
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an intermediary in the global market who assumes all ownership risks and sells globally for its own account
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Export Broker
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an intermediary who plays the traditional broker’s role by bringing buyer and seller together
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Export Agent
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an intermediary who acts like a manufacturer’s agent for the exporter; the export agent lives in a foreign market
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Licensing
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the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets or other proprietary knowledge
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Contract Manufacturing
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private label manufacturing by a foreign company
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Joint Venture
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when a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity
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Direct Foreign Investment
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active ownership of a foreign company or of overseas manufacturing or marketing facilities
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Floating Exchange Rates
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a system in which prices of different currencies moves up and down based on the demand for and the supply of each currency
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Dumping
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the sale of an exported product at a price lower than that charged for the same or like product in the “home” market of the exporter
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Countertrade
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a form of trade in which all or part of the payment for goods or services is in the form of other goods or services
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Blog
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a publicly accessible web page that functions as an interactive journal, where readers can post comments on the author’s entries
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US Trade
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-Exports 20% of industrial production and 25% of economic growth
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Trade Restrictions
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1. Tariff – Revenue and protective 2. Quota – Limit 3. Embargo (boycott) -Ban 4. Exchange control – amount and rate 5.Discrimination – bids and standards
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Joint Venturing
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1. Licensing 2. Contract Manufacturing 3. Joint Ownership 4. Management Contracting
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Contract Manufacturing
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Sell on your own risk- fear of foreign producer learning and stealing
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Direct Ownership
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1.High risk. 2. Own and operate in Foreign Country 3.Local Incentives 4.Deepend foreign Relationships 5.Control 6.High risk
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Global Organizational Forms (multinational Firms)
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1.Ethnocentric 2.Polycentric 3.Geocentric
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Ethnocentric
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-Home country oriented -Managers from foreign country -Glass ceiling -Extension Strategy
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Polycentric
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-Multi domestic Marketing Strategy -Specifically home country oriented -Look and act like other companies -Leave it to the locals
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Geocentric
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-Mostly US based companies -No allegiance to specific country -World orientation -Global Marketing Strategy
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Theory of Comparative Advantage
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Nation should export those items which it produces most efficiently (lowest relative cost) and import those items which it produces less efficiently
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US Comparative Advantages
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-Advanced Technology -Large area of fertile land and temperate zone -Large Domestic Market -Complex Management
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US Comparative Disadvantages
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-Low Tech -Shortage of basic materials -High wages
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How much of US corporate profits comes from foreign trade and investments?
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33.5%
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Emargo
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Trade restriction which identifies a ban on the importation of a product or service
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Management Contracting
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The most common form of joint venturing in the US
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Direct Ownership advantages
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-Local Incentive -Image enhancement -Deeper local relationship
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NAICS
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A detailed numbering system developed by the U.S., Canada, and Mexico to classify North American business establishments by their main production processes.
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Forms of International Trade
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Licensing, Exporting, Franchising, Contract Manufacturing, Joint Ventures/Strategic Alliances, Foreign Direct Investment
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Societal Classification of Offerings
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Gideon Sjoberg’s theory that says cities changed over time

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