Stetson Global Marketing - Chapter 1, 2, 9, 10

What are the advantages of Economic Paradox of globalization?

1) "...the industrial revolution going to the rest of the world" 2) infrastructural blank spots of the globe—roads, communications, human capital, etc. are filling in... 3) increasing efficiency 4) Closing gap between the haves and the have-nots

What are the advantages of Americanization Paradox of globalization?

1) "McDonaldization" or "Americanization" of the world...

What are three types of European Union (EU) Institutions?

1) European Commission 2) Council of Ministers 3) European Parliament 4) Court of Justice

Name three indicators to use for measuring economic health?

1) GDP growth rate 2) Unemployment rate 3) Inflation

What are the advantages of Intimacy Paradox of globalization?

1) Globalization means an increasingly interconnected people are increasingly identifying with e-based interest groups spread across the globe, via internet affiliations, list serves, chat rooms, etc

What are the main paradoxes of globalization?

1) Logic Paradox 2) Economic Paradox 3) Intimacy Paradox 4) Americanization Paradox 5) Media Americanization Paradox

Name the three International Market Task.

1) Market Decision 2) Domestic Environment 3) Foreign Environment

What are the different international marketing involvement/stages or strategies?

1) No Direct Foreign Marketing 2) Infrequent Foreign Marketing 3) Regular Foreign Marketing 4) International Marketing 4) Global Marketing

Why study international marketing?

1) No longer enough to look at domestic market 2) Markets across the world being sought after by more competitors 3) Explosion of international trade 4) Global linkages become important

What are the disadvantages of Americanization Paradox of globalization?

1) Paradoxically, American media, firms, their products and symbols are now getting stiff competition from all over the world

What are the disadvantages of Logical Paradox of globalization?

1) Paradoxically, nationalism is stronger throughout the world than it has been since the 1930s 2) Sharp rise in the number of nation states •104 in 1945 •214 + today

What are the components of foreign environment?

1) Political Forces 2) Legal Forces 3) Economic Forces 4) Competition 5) Level of Technology 6) Geography 7) Culture

What are the components of domestic environment?

1) Political forces 2) Legal forces 3) Economic forces 4) Competition

Order the following based on the level of integration from low too high. a) Common Market b) Free Trade area c) Regional Cooperation group d) Customs union e) Political union

1) Regional Cooperation group 2) Free Trade area 3) Customs union 4) Common Market 5) Political union

What are the advantages of Media Americanization Paradox of globalization?

1) The US has had a first mover's advantage with global media 2) because American media, firms, their products and symbols have gained a ubiquitous presence since WWII

What are the disadvantages of Media Americanization Paradox of globalization?

1) US culture industries will find it increasingly difficult to sell their wares 2) Europeans are turning away from American TV programming 3) Movies produced in Britain, Honk Kong are increased hits

What are the tree types of tariffs?

1) Valorem duties 2) Specific duties 3) Compound duties

What are the advantages of Logical Paradox of globalization?

1) World markets, cultures and governmental institutions are increasingly becoming integrated... 2) ...suggesting smaller national units of organization are becoming less important

Balance of Payment - Current Account

1) exports 2) imports 3) services 4) funds

Balance of Payment - Reserve Account

1) gold 2) foreign exchange 3) liabilities

What are the disadvantages of Economic Paradox of globalization?

1) in many cases, the gap between the rich and the poor is widening

Balance of Payment - Capital Account

1) investments 2) short-term capital

What are the disadvantages of Intimacy Paradox of globalization?

1) nationalism (and other localizing "isms") are on the rise 2) This would suggest that people are finding their affiliations, identifications and friendships in their own neighborhoods

What are the obstacles of environmental adaptation?

1) self-reference criterion (SRC) 2) ethnocentrism

Major turnaround events in the 21st Century?

1) technological bubble bust of 2001 (where dot-com companies and their effervescent models did not live up to the standards of customers and cost a lot of money for venture capitalists) 2) the terrorism on 9/11 (which almost destroyed the airline industry; the disaster was ameliorated by the injection of funds from the government), the resulting Afghanistan and Iraq wars (which cost taxpayers a lot of money and pretty much divided the country politically, although President Bush won a second term despite the decision to go to war) 3) the 2003 SARS outbreak in Asia (which affected tourism in Asia and send the stock market plummeting) 4) the Indian ocean Tsunami in December 2004 (that affected the economies of India, Indonesia, and Sumatra), price of oil at $100 a barrel (that sent gas prices skyrocketing in the U. S.) 5) the NASA budget cuts that threatened the demise of the space shuttle program (which also threatens discovery into the frontiers of space).

European Union institutes are:

1- The European Commission (supervises executions of laws and policies) 2- The Council of Ministers (decision making body) 3- The European Parliament (amend and adopt legislation; also has extensive budgetary powers) 4- The European Court of Justice (judicial - passing judgments on the interpretation of points on the EU law)

Name three reasons for countries want to adopt protectionism?

1. protection of an infant industry 2. protection of the home market 3. need to keep money at home 4. encouragement of capital accumulation 5. maintenance of the standard living 6. conversation of natural resources 7. industrialization of a low-wage nation 8. maintenance of employment and reduction of unemployment 9. national defense/national security 10. enhancement of business size 11. retaliation and bargaining

The Euro Costs

1.Countries lose monetary policy control. 2.European Central Bank controls policy for the "Euro zone" 3.Country economies are different 4.Euro puts the economic cart before the political horse 5.Strong Euro (2004) makes it harder for Euro zone exporters to sell their goods

What are the advantages of globalization?

1.Cross-national cooperation 2.Lower prices, higher quality 3.Efficient use of resources 4.Continuous quest for research & development 5.Innovation and creative thought

What are the criticisms of globalization?

1.Threats to national sovereignty 2.Growth and environmental stress 3.Growing income inequality 4.Exploitation of labor in poor countries 5.Decrease of diversity 6.surge of cultural heritage- cultural extinction

No Direct Foreign Marketing

A company in this stage does not actively cultivate customers outside national boundaries; however, this company's products may reach foreign markets.

Global awareness

A frame of reference, important to the success of a businessperson, that embodies tolerance of cultural differ- ences and knowledge of cultures, history, world market potential, and global economic, social, and political trends.

Boycott

A group's refusal to have commercial dealings with some organization in protest against its policies

Regional Economic Integration

Agreements to participate jointly to develop basic industries beneficial to each economy. Joint venture / cooperation

NAFTA (North American Free Trade Agreement)

Allows open trade between the US, Mexico, and Canada.

Self-reference criterion (SRC)

An unconscious reference to one's own cultural values, experience, and knowledge as a basis for a decision.

Level of Technology

Application of knowledge and tools to solve problems and perform tasks more efficiently.

What do Trade Barriers weaken?

Balance-of-payments positions. Supply-and-demand patterns. International relations (they can start trade wars).

______ is accomplished by refusing to allow importers to exchange its national currency for the seller's currency. a) Boycotted currency b) Embargoed capital c) Blocked currency d) Quotas e) voluntary export restrictions

Blocked currency

What are the three components of the Balance of Payment?

Capital Account Current Account Reserve Account

Which of the following is NOT TRUE of the impact of globalization on domestic markets? a) Study of manufacturing companies found that multinationals of all sizes and in all industries. outperformed their strictly domestic U.S. counterparts. b) Profit levels from international ventures exceed those from domestic operations from many multinational firms. c) On average, firm value is increased by global diversification. d) Companies with foreign operations find that foreign earnings are making an important overall contribution to total corporate profits. e) Companies with only domestic markets have found it relatively easy to sustain their customary rates of growth.

Companies with only domestic markets have found it relatively easy to sustain their customary rates of growth.

Geography Forces

Demographic elements influence different market segments including country, region, age, lifestyle etc.

Domestic Environment Uncontrollables

Factors in a company's home country over which the company has little or no control or influence. They include political and legal forces, the economic climate, level of technology, competitive forces, and economic forces.

Uncontrollable elements

Factors in the business environment over which the international marketer has no control or influence; may include competition, legal restraints, government controls, weather, consumer preferences and behavior, and political events.

Foreign Environment Uncontrollables

Factors in the foreign market over which a business operating in its home country has little or no control or influence. They include political and legal forces, economic climate, geography and infrastructure, level of technol- ogy, structure of distribution, and level of technology.

True or False: The difference between domestic and international marketing lies in the different concepts of marketing.

False

Government approval

In countries where there is a severe shortage of foreign exchange, an exchange permit to import foreign goods is required from the government

Competition Forces

In particular, they need to monitor the activities of two groups of competitors: the makers of competing brands and the makers of substitute products.

Regular Foreign Marketing

In this stage a firm has committed permanent resources towards international marketing and engages in it regularly on a proactive basis. The firm may use intermediaries to engage in international marketing.

What do Trade Barriers increase?

Inflationary pressures. Special interests' privileges. Government control and political considerations in economic matters. The number of tariffs (they beget other tariffs via reciprocity).

James Bright's company seeks markets all over the world and attempts to sell products that are a result of planned production for markets in various countries. Which of the following stages BEST characterizes the stage of international marketing involvement for Mr. Bright's company? a) Infrequent foreign marketing b) Regular foreign marketing c) No direct foreign marketing d) International marketing e) Global marketing

International marketing

differential exchange rates

It encourages the importation of goods the government deems desirable and discourages importation of goods the government does not want by adjusting the exchange rate. The exchange rate for importation of a desirable product is favorable and vice-versa

What do Trade Barriers restrict?

Manufacturers' supply sources. Choices available to consumers. Competition.

Globalization shows that the U.S. had the first mover's advantage with the media, yet Europeans are turning away fro American programming. This can be described as the __________ paradox. a) Media Americanization b) Americanization c) Logical d) Intimacy e) Economic

Media Americanization

GATT (General Agreement on Tariffs and Trade)

On 1 January 1948, GATT entered into force. The 23 founding members were: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom and the United States.

What is International Marketing?

Organizational efforts to stimulate & increase demand by: i.Identifying, creating and maintaining ii.mutually beneficial exchanges iii.In the presence of competitors iv.In an ever changingworld •in more than one nation for a profit. •The difference is the __________? • "The Environment"

What are the five fundamental groupings for regional economic integration?

Regional Free Trade areas Custom union Common Market Political Union

The European Community uses several forms of legal instruments. Which of the following has the effect of binding member AND having the same strength as national laws. a) Regulations b) Decisions c) Codes d) Directies e) Specificatinos

Regulations

nontarrif barriers

Restrictions, other than tariffs, placed by countries on imported products; they may include quality stan- dards, sanitary and health standards, quotas, embargoes, boycotts, and antidumping penalties.

_______ is an unconscious reference to one's own cultural values, experience, and knowledge as a basis for decisions. a) Regionalism b) Holism c) Self-reference criterion d) Segregation 3) Xenophobia

Self-reference criterion

Quotas

Specific unit or dollar limits applied to a particular type of good by the country into which the good is imported.

Which of the following is an uncontrollable element for an international marketer? a) Structure of distribution b) Promotion c) Price d) Research e) Firm characteristics

Structure of distribution

Infrequent Foreign Marketing

Temporary surpluses in inventory may cause companies to sell their excess product in overseas markets. Note that in the first two stages of International Marketing Involvement, the strategies are reactive rather than proactive.

Controllable Elements

The aspects of trade over which a company has control and influence; they include marketing decisions cover- ing product, price, promotion, distribution, research, and advertis- ing

Global marketing

The most profound change is the orientation of the company toward markets and associated planning activities. At this stage, companies treat the world, including their home market, as one market.

International Marketing

The performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit.

What is globalization?

The processes by which the economic, political, cultural and social systems of nations are integrating into World Systems

Which of the following is one of the primary objective of the International Monetary Fund (IMF)? a) The abolishment of unfavorable exchange rates for any nation. b) The abolishment of debt for impoverished nations. c) The stabilization of foreign exchange rates. d) The waiver of all debts from World War II. e) The establishment of global nondiscriminatory prices.

The stabilization of foreign exchange rates.

Which of the following is the most critical difference between domestic marketing and international marketing? a) The uncontrollable factors in the environment in which marketing plan must be implemented b) The different concepts of marketing c) The change in marketing goals d) the difference in technological standards e) The change in corporate objectives

The uncontrollable factors in the environment in which marketing plan must be implemented

What is the concept behind BOP (Bottom-of-the-Pyramid Markets?

These consist of the4 billion people around the world with annual incomes of $1,200 or less per capita. They are not necessarily defined by national borders, but are rather pockets of poverty

World Bank services?

These support a wide array of investments in such areas as education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management.

International marketing

This planning generally entails not only the marketing but also the production of goods outside the home market. At this point, a company becomes an international or multinational marketing firm.

What is environmental adaptation?

To adjust and adapt a marketing program to foreign markets, marketers must be able to interpret effectively the influence and impact of each of the uncontrollable environmental elements on the marketing plan for each foreign market in which they hope to do business.

What are big emerging markets?

Used to describe the core groupof populous nations that will account for much of the growth in

What are the anti-globalization protest?

WTO meeting in Seattle (November 2009) World Bank and IMF meetings in Washington D.C. (April 2010) World Economic Forummeetingin Australia (September 2010) IMF meeting in Prague (September 2010) Terrorism in London (2005)

WTO (World Trade Organization) Loopholes?

allowing a country to head off a sudden wave of imports without having to wait for the slow, cumbersome trade dispute resolution process to do its work.

World Bank

an international bank that offers low-interest loans, advice, and information to developing nations. With 189 member countries, staff from more than 170 countries,

In general, tariffs weaken: a) inflationary pressures. b) special interests' privileges. c) balance-of-payments positions. d) government control in economic matters. e) reciprocal tariffs by other countries.

balance-of-payments positions

Monetary Barriers

blocked currency, differential exchange rates, government approval

A _______ is an agreement between two or more countries to eliminate all tariffs and adopt external trade barriers and removes all restrictions on the free flow of capital. and labor amoung member nations. a) political union b) common market c) regional cooperation for development t (RCD) d) customs union e) free trade area (FTD)

common market

Economic Forces

consist of the general economic conditions and trends - unemployment, inflation, interest rates, economic growth - that may affect an organization's performance

Legal Forces

impact every aspect of marketing mix and pollution, consumer protection & operator safety

Political Forces

influence of political and legal institutions on people and organizations

Tariff

is a tax imposed by a government on goods entering at its borders

IMF (International Monetary Fund)

part of the UN makes loans to countries to finance development. is an organization of 189 countries, working ... accountable to the 189 countries that make up its near-global membership.

The commonwealth of Independent States that had 12 members that agreed to a loose economic and political alliance with open borders but no central government is and example of: a) political union b) common market c) regional cooperation for development (RCD) d) customs union e) free trade area (FTD)

political union

What are nontarriff barriers?

quotas, boycotts, monetary barriers, market barriers

Cultural Forces

the forces that affect a society's basic values, perceptions, preferences, and behavior

Gross National Income (GNI)

the income generated both by total domestic production as well as the international production activities of national companies

WTO (World Trade Organization)

the only international body dealing with the rules of trade between nations. The WTO has 164 members and 23 observer governments.

Gross National Product (GNP)

the value of all final goods and services produced within a nation in a given year, plus the income earned by its citizens abroad, minus the income earned by foreigners from domestic production.

Free Trade Area

§No custom duties or non tariffbarriers to trade among member countries §Each member has its own trade policies with nonmember countries §Examples: NAFTA, ALADI (Latin American Integration Association)

Common Market

§Same as Customs Union, plus §Free movement of all factors of production (not just physical products) among member countries §Key additions are people, investments and technologies (e.g. standards) §Economic coordinationa problem §Examples: §European Union in 1997 §Central American Common Market §Caribbean Community

Political Union

§Same as Economic Union, plus §Common foreign policy (e.g. embassies and treaties, and defense policy (e.g. unified command of all armed forces) §Example, the USSR; the United States §Common wealthof Independent States (CIS)

Customs Union

§Same as Free Trade Area plus §Common trade policy (external tariff) with nonmembers §Trade diversiona problem §Examples: German States prior to 1870s; Andean Pact; Central America Common Market

Big emerging market share a number of important traits, what are they?

·Are all geographically large ·Have significant populations ·Represent sizable markets for a wide range of products. · Have strong rates of growth or the potential for significant growth. · Have undertaken significant programs of economic reform. · Are of major political importance within their regions. · Are "regional economic drivers." Will engender further expansion in neighboring markets as they grow.

Balance of Payments - Payments (-)

•Cost of goods imported •Spending by American tourists overseas •New overseas investments •Cost of foreign military •Economic aid

Balance of Payments - Receipts (+)

•Export sales •Money spent by foreign tourists •Transportation •Insurance to the U.S. government •Dividend and interest on investments abroad •Foreign government payments to the U.S.

European Union - legal instruments

•Regulationsbinding the member states directly and having the same strength as national laws •Directives also binding the member states but allowing them to choose the means of execution, and •Decisionsaddressed to a government, an enterprise, or an individual binding the parties

Integration Issues

•Trade CreationIntegration promotes efficiency by allowing the reallocation of production form high to lower cost locations within bloc •Trade DiversionOccurs when integration shifts production toward higher-cost member producers from lower-cost nonmember producers