BMGT 454

Hofstede's Five Dimensions of National Culture

- individualist vs. collectivist - High vs. low power distance - High vs. low uncertainty avoidance - Achievement vs. nurturing - Long term vs. short term orientation

long-term orientation

-The dimension assesses the sense of immediacy within a culture; that is, whether gratification should be immediate or deferred. -Long-term values include persistence (perseverance), defined as a general tenacity in the pursuit of a goal. -Ordering relationships by status reflects the presence of societal hierarchies, and observing this order indicates the acceptance of complementary relations. Thrift manifests itself in high savings rates. Finally, a sense of shame leads to sensitivity in social contacts.

Achievement

-describes a society in which men are expected to be assertive, competitive, and concerned with material success and women fulfill the role of -Nurturing, by contrast, describes a society in which the social roles of men and women overlap, with neither gender exhibiting overly ambitious or competitive behavior. -Japan and Austria highest masculinity; -Spain, Taiwan, the Netherlands, and the Scandinavian countries are lowest.

power distance

-is the extent to which the less powerful members of a society accept—even expect—power to be distributed unequally. -High power: you defer to higher power without questions -Hong Kong and France are both high power distance cultures -low power distance characterizes Germany, Austria, the Netherlands, and Scandinavia. -The higher the power distance index (PDI), the lower the level of trust.

Uncertainty avoidance

-is the extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured situations. -uncertainty-avoiding cultures may resort to aggressive, emotional, intolerant behavior; they are characterized by a belief in absolute truth. -uncertainty-accepting cultures (e.g., Denmark, Sweden, Ireland, and the United States) are more tolerant of persons whose opinions differ from their own.

In a common-law country

-many disputes are decided by reliance on the authority of past judicial decisions (cases). A common-law legal system is based on the concept of precedent, sometimes called stare decisis. -Precedent is the notion that past judicial decisions on a particular issue are binding on a court when that same issue is presented later.

Important communication issues

-sequencing: which concerns whether the discussion goes directly from point A to point B or seems to go off on tangents. -phasing: which pertains to whether certain important agenda items are discussed immediately or after the parties have taken some time to establish rapport.

Mistaken Assumption

1. The poor have no money 2. The poor are too concerned with fulfilling basic needs that they don't spend money on non essential things 3. The goods sold in developing countries are so inexpensive that there is no room for a market entrant to make a profit 4. People in BOP markets cannot used advanced technology 5. Global companies that target BOP markets will be criticized for exploiting the poor

Importance of global marketing

75 percent of world market potential is outside their home country. Management

Customs Union

A customs union represents the logical evolution of an FTA. In addition to eliminating internal barriers to trade, members of a customs union agree to the establishment of common external tariffs (CETs). Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 75). Pearson Education. Kindle Edition.

FTA

A free trade area (FTA) is formed when two or more countries agree to eliminate tariffs and other barriers that restrict trade. Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 75). Pearson Education. Kindle Edition.

ethnocentric orientation

A person who assumes that his or her home country is superior to the rest of the world is said to have an ethnocentric orientation.

Attitude

An attitude is a learned tendency to respond in a consistent way to a given object or entity. Attitudes are clusters of interrelated beliefs.

centrally planned capitalism.

An economic system in which command resource allocation is utilized extensively in an overall environment of private resource ownership

Economic Union

An economic union builds upon the elimination of internal tariff barriers, the establishment of common external barriers, and the free flow of factors. It seeks to coordinate and harmonize economic and social policies within the union to facilitate the free flow of capital, labor, and goods and services from country to country. Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 75). Pearson Education. Kindle Edition.

domestic companies

At some companies, the ethnocentric orientation means that opportunities outside the home country are largely ignored. Such companies are sometimes called domestic companies.

Diversification

Diversification: In 2011, Starbucks dropped the word "Coffee" in its logo. It recently acquired a juice maker, Evolution Fresh; the Bay Bread bakery, and tea retailer Teavana Holdings. Next up: Revamping stores so they can serve as wine bars and attract new customers in the evening.

international companies

Ethnocentric companies that conduct business outside the home country can be described as international companies

Marketing Mix

The marketing mix (the four Ps of product, price, place, and promotion) comprises a contemporary marketer's primary tools.

GATT

General Agreement on Tariffs and Trade (GATT), a treaty among nations whose governments agreed, at least in principle, to promote trade among members. GATT was intended to be a multilateral, global initiative, and GATT negotiators did succeed in liberalizing world merchandise trade. Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 73). Pearson Education. Kindle Edition.

GNI

Gross National Income. Countries within a given category generally have a number of characteristics in common.

High-income countries

High-income countries, also known as advanced, developed, industrialized, or postindustrial countries, are those with a GNI per capita of $12,746 or higher. With the exception of a few oilrich nations, the countries in this category reached their present income level through a process of sustained economic growth.

North American Free Trade Agreement (NAFTA).

In 1992, representatives from the United States, Canada, and Mexico concluded negotiations for the North American Free Trade Agreement (NAFTA). Resulted in free trade area with a combined population of more than 470 million people and a total gross domestic product (GDP) of almost $20 trillion (Figure 3-3). No CTES and still have restrictions on labor and other factors

market socialism

In such a system, market-allocation policies are permitted within an overall environment of state ownership.

centrally planned socialism.

In this type of economic system, the state has broad powers to serve the public interest as it sees fit.

Study of language divisions

Linguists have divided the study of spoken or verbal language into four main areas: -syntax (rules of sentence formation), -semantics (system of meaning), -phonology (system of sound patterns), -morphology (word formation). Unspoken or nonverbal communication includes gestures, touching, and other forms of body language that supplement spoken communication.

Low income countries

Low-income countries have a GNI per capita of $1,045 or less. The general characteristics shared by countries at this income level are: 1. Limited industrialization and a high percentage of the population engaged in agriculture and subsistence farming 2. High birth rates, short life expectancy 3. Low literacy rates 4. Heavy reliance on foreign aid 5. Political instability and unrest 6. Concentration in Africa south of the Sahara Garments

Lower-middle-income countries

Lower-middle-income countries are thosewith a GNI per capita between $1,046 and $4,125. Footwear, textiles and toys India

Market Development

Market development: Starbucks is entering India via an alliance with the Tata Group. Phase 1 calls for sourcing coffee beans in India and marketing them at Starbucks stores throughout the world. The next phase will likely involve opening Starbucks outlets in Tata's upscale Taj hotels in India.

Market Penetration

Market penetration: Starbucks is building on its loyalty card and rewards program in the United States with a smartphone app that enables customers to pay for purchases electronically. The app displays a bar code that the barista can scan.

OECD

Organisation for Economic Co-operation and Development (OECD; www.oecd.org). The 34 nations that belong to the OECD believe in market-allocation economic systems and pluralistic democracy. Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 59). Pearson Education. Kindle Edition.

Product Development

Product development: Starbucks created a new instant coffee brand, Via, to enable its customers to enjoy coffee at the office and other locations where brewed coffee is not

Product Market Matrix

Table from textbook

Upper-middle-income countries

Upper-middle-income countries, also known as industrializing or developing countries, are those with GNI per capita ranging from $4,126 to $12,745. In these countries, the percentage of the population engaged in agriculture drops sharply as people move to the industrial sector and the degree of urbanization increases. Mexico, Chile, Brazil, China Lower-middle- and upper-income countries that achieve the highest sustained rates of economic growth are sometimes referred to collectively as newly industrializing economies (NIEs). Overall,

aesthetics.

Within every culture, there is an overall sense of what is beautiful and what is not beautiful, what represents good taste as opposed to tastelessness or even obscenity, and so on.

WTO

World Trade Organization (WTO), came into existence on January 1, 1995. From its base in Geneva, Switzerland, the WTO provides a forum for traderelated negotiations among its 160 members. Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 73). Pearson Education. Kindle Edition.

collectivistic cultures

all of society's members are integrated into cohesive in-groups. -Japan etc.

A value

can be defined as an enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct.

Sovereignty

can be defined as supreme and independent political authority.

Marketing

can be defined as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

culture

can be understood as "ways of living, built up by a group of human beings, that are transmitted from one generation to another." A culture acts out its ways of living in the context of social institutions, including family, educational, religious, governmental, and business institutions. Non material and material (physical things) culture

common market

common market is the next level of economic integration. In addition to the removal of internal barriers to trade and the establishment of common external tariffs, the common market allows for free movement of factors of production, including labor and capital. Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 75). Pearson Education. Kindle Edition.

individualistic cultures

each member of society is primarily concerned with his or her own interests and those of his or her immediate family. -US, Europe

copyright

establishes ownership of a written, recorded, performed, or filmed creative work.

free trade agreement

free trade agreement (also abbreviated FTA), the ultimate goal of which is to have zero duties on goods that cross borders between the partners, it creates a free trade area. Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 75). Pearson Education. Kindle Edition.

geocentric orientation

geocentric orientation views the entire world as a potential market and strives to develop integrated global strategies.

Global Industry

global industry is one in which competitive advantage can be achieved by integrating and leveraging operations on a worldwide scale.

global localization

global localization really mean? In a nutshell, it means that a successful global marketer must have the ability to "think globally and act locally."

Global Marketing

global marketing focuses its resources and competencies on global market opportunities and threats. A fundamental difference between regular marketing and global marketing is the scope of activities.

GMS

global marketing strategy (GMS). In single-country marketing, strategy development addresses two fundamental issues: choosing a target market and developing a marketing mix. 1. First, concentration of marketing activities is the extent to which activities related to the marketing mix (e.g., promotional campaigns or pricing decisions) are performed in one or a few country locations. 2. Coordination of marketing activities refers to the extent to which marketing activities related to the marketing mix are planned and executed interdependently around the globe. 3. Finally, integration of competitive moves is the extent to which a firm's competitive marketing tactics in different parts of the world are interdependent.

Antitrust laws

in the United States and other countries are designed to combat restrictive business practices and to encourage competition.

Licensing

is a contractual agreement in which a licensor allows a licensee to use patents, trademarks, trade secrets, technology, or other intangible assets in return for royalty payments or other forms of compensation.

A patent

is a formal legal document that gives an inventor the exclusive right to make, use, and sell an invention for a specified period of time.

A cartel

is a group of individual companies that collectively set prices, control output, or take other actions to maximize profits. For example, the group of oil-producing countries known as OPEC is a cartel.

the Foreign Corrupt Practices Act (FCPA)

is a legacy of the Watergate scandal during Richard Nixon's presidency. In the course of his investigation, the Watergate special prosecutor discovered that more than 300 American companies had made undisclosed payments to foreign officials, totaling hundreds of millions of dollars. Congress unanimously passed the act, and President Jimmy Carter signed the act into law on December 17, 1977. Administered by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), the act was concerned with disclosure and prohibition. The disclosure part of the act required publicly held companies to institute internal accounting controls that would record all transactions. The prohibition part made it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business. Payments to third parties were also prohibited when the company had reason to believe that part or all of the money would be channeled to foreign officials.

belief

is an organized pattern of knowledge that an individual holds to be true about the world. Attitudes and beliefs, in turn, are closely related to values.

trademark

is defined as a distinctive mark, motto, device, or emblem that a manufacturer affixes to a particular product or package to distinguish it from goods produced by other manufacturers

Nationalization

is generally broader in scope than expropriation; it occurs when the government takes control of some or all of the enterprises in a particular industry.

civil-law country

is one in which the legal system reflects the structural concepts and principles of the Roman Empire in the sixth century.

Private international law

is the body of law that applies to disputes arising from commercial transactions between companies of different nations.

Bribery

is the corrupt business practice of demanding or offering some type of consideration—typically a cash payment—when negotiating a cross-border deal. Employees of U.S. companies in particular are constrained by U.S. government policies of the post-Watergate age.

Political risk

is the possibility of a change in a country's political environment or government policy that would adversely affect a company's ability to operate effectively and profitably.

Counterfeiting

is the unauthorized copying and production of a product. -Associative counterfeiting(product name that differs slightly from a well-known brand but is close enough that consumers will mistake it for the genuine product) -piracy (the unauthorized publication or reproduction of copyrighted work)

LDCs (least developed countries)

least-developed countries (LDCs); the term is sometimes used to indicate a contrast with developing (i.e., upper ranks of low-income plus lower-middle- and upper-middle-income) countries and developed (high-income) countries.

high-context culture

less information is contained in the verbal part of a message. -less legal paperwork -person's values and position or place in society. -Japan, Arbia

localized or adaptation approach

localized or adaptation approach that assumes that products must be adapted in response to different market conditions.

International law

may be defined as the rules and principles that nation-states consider binding upon themselves. International law pertains to property, trade, immigration, and other areas that have traditionally been under the jurisdiction of individual nations. International law applies only to the extent that countries are willing to assume all rights and obligations in these areas.

low-context culture

messages are explicit and specific; words carry most of the communication power. -reliance is placed on the words and numbers in the loan application. -US, Switzerland, Germany

Jurisdiction

pertains to global marketing insofar as it concerns a court's authority to rule on particular types of issues arising outside of a nation's borders or to exercise power over individuals or entities from different countries.

polycentric orientation

polycentric orientation is the opposite of ethnocentrism. The term polycentric describes management's belief or assumption that each country in which a company does business is unique.

PTA

preferential trade agreement (PTA) is a mechanism that confers special treatment on select trading partners. Keegan, Warren J.; Green, Mark C.. Global Marketing (Page 74). Pearson Education. Kindle Edition.

Expropriation

refers to governmental action to dispossess a foreign company or investor. Compensation is generally provided, although often not in the "prompt, effective, and adequate" manner provided for by international standards. If no compensation is provided, the action is referred to as confiscation.

regiocentric orientation

regiocentric orientation, a region becomes the relevant geographic unit; management's goal is to develop an integrated regional strategy.

subcultures

smaller groups of people with their own shared subset of attitudes, beliefs, and values.

standardized or extension approach

standardized or extension approach to marketing based on the premise that products can be sold everywhere without adaptation.

Islamic law,

the sharia is a comprehensive code governing Muslim conduct in all areas of life, including business. The code is derived from two sources. -Koran (holy book) -Hadith (products and practices of Muhammad)

1996 Madrid Protocol

the system allows trademark owners to seek protection in as many as 74 countries with a single application and fee

self-reference criterion (SRC).

unconscious reference to one's own cultural values 1. Define the problem or goal in terms of home-country cultural traits, habits, and norms. 2. Define the problem or goal in terms of host-country cultural traits, habits, and norms. Make no value judgments. 3. Isolate the SRC influence and examine it carefully to see how it complicates the problem. 4. Redefine the problem without the SRC influence and solve for the host-country market situation.

Value equation

value equation is a guide to this task: Value = Benefits/Price (money, time, effort, etc.)

semiotics

which is the study of signs and their meanings.