International Marketing CH. 1,2,3,4,5,6,7

Power distance index (PDI)

focuses on authority orientation

Uncertainty avoidance Index (UAI)

focuses on risk orientation

Individualism/collective index (IDV)

focuses on self-orientation

Masculinity/femininity index (MAS)

focusses on assertiveness and achievement

non-tariff trade barriers

mandates on the quality or the content of imported goods, most prevalent barrier today

Business ethics

is complex in the international marketplace because value judgments differ widely among culturally diverse groups Corruption varyingly defined from culture to culture

sovereign state

is independent and free from all external control enjoys full legal equality with other states governs its own territory selects its own political, economic, and social systems and has the power to enter into agreements with other nations.

Culture

is the sum of the "values, rituals, symbols, beliefs, and thought processes that are learned, shared by a group of people, and transmitted from generation to generation"

International marketing

is the type of marketing that involves pricing and promoting the goods and services of a company to customers in more than one country

Common law

is tradition, past practices, and legal precedents set by the courts through interpretations of statutes, legal legislation, and past rulings. Not All-Inclusive Agreements may not be enforceable unless properly notarized or registered Agreements may be binding so long as proof of the agreement can be established. Impossibility of performance does not excuse non-compliance with the provisions of the contract, unless it was an act of God Common Law countries are codifying Commercial Law.

Expropriation

is where the government seizes an investment, but some reimbursement for the assets is made; often the expropriated investment is nationalized to become a government run entity

Quotas

limits on the quantity on imports

Economic climate, political and legal forces, competition

list 3 elements in international marketing that are uncontrollable in the domestic environment.

Common Law Civil or Code Law Islamic Law Commercial Legal System in Marxist-Socialist economies or states

list the bases for legal systems

values, rituals, symbols, beliefs, thought processes

list the five elements of culture

*No direct foreign marketing *Infrequent foreign marketing *regular foreign marketing *International marketing *Global Marketing

list the five stages of International marketing involvement

Confiscation Exportation Domestication

list three political risk of global business

Ethnocentrism

nation that people in one's own company, culture, or country know best how to do things, that their culture is better than anyone else's *may impede on ability to assess foreign markets

Domestication

occurs when the government mandates local ownership and greater national involvement in a foreign company's management

Extortion

Payments are extracted under duress by someone in authority from a person seeking only what they are lawfully entitled

An opposing political party ascends to power Pressure from nationalist and self-interest groups Weakened economic conditions Bias against foreign investment or conflicts between governments

Radical shifts in government philosophy can occur when:

Internationalization

a company with high levels of technology are more likely to achieve what faster? Has been defined as the process of adapting a firms operations ( strategy, structure, resources) to international environments

Arbitration

a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts. The parties to a dispute refer it to arbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts . Parties select a disinterested and informed party as a referee to determine the merits of the case and make a judgment both parties agree to honor.

Blocked currency

accomplished by refusing to allow importers to exchange its national currency for the sellers' currency.

Tariffs

taxes on imports

Current account

a record of all merchandise exports, imports, and services plus unilateral transfers of funds

Capital account

a record of direct investment, portfolio investment, and short-term capital movements to and from countries;

Reserves Account

a record of exports and imports of gold, increases or decreases in foreign exchange, and increases or decreases in liabilities to foreign central banks.

Negotiation emphasis

Differences with respect to the product, its price and terms, services associated with the product, and finally, friendship between vendors and customers

Utilitarian ethics

Does the action optimize the "common good" or benefits of all constituencies? And, who are the pertinent constituencies?

(3) Justice or fairness

Does the action respect the canons of justice or fairness to all parties involved?

(2) Rights of the parties

Does the action respect the rights of the individuals involved?

Companies with either high technology and/or marketing-based resources are better equipped to internationalize than more traditional manufacturing companies (Tseng et. al., 2007) Smaller home markets and larger production capacities favor internationalization (Fan & Phan, 2007) and Firms with key managers well networked internationally are able to accelerate the internationalization process (Freeman and Cavusgil, 2007)

Factors Favoring Faster Internationalization

*fascism *Communism *Democracy

For most of the 20th century three approaches to governance competed for world dominance

global awareness

Being tolerant of other cultures and having a strong understanding of another cultures history and differences

Protectionism

*The reality of trade is this is a world of tariffs, quotas, and nontariff barriers and nontariff barriers designed to protect a country's markets from foreign investment *Countries use legal barriers, exchange barriers, and psychological barriers to restrict the entry of unwanted goods

islamic law

, derived from the interpretation of the Koran and found in Pakistan, Iran, Saudi Arabia, and other Islamic states

*current account *capital account *reserves account ***Of the three, the current account is of primary interest to international business***

A balance-of-payments statement includes three accounts what are they?

Commercial Law in Marxist Economies

A commercial legal system in the Marxist-socialist economies of Russia and the republics of the former Soviet Union, Eastern Europe, China, and other Marxist-socialist states Legal system centered on the economic, political, and social policies of the state As each country moves toward its own version of a free market system and enters the global market, a commercial legal system is also evolving from Marxist-socialist tenets

Litigation

A lawsuit (or suit in law) is "a vernacular term for a suit, action, or cause instituted or depending between two private persons in the courts of law." The term refers to any proceeding by a party or parties against another in a court of law.

*maintain employment and reduce unemployment *increase of business size, and *retaliation and bargaining *protection of the home market *need to keep money at home *encouragement of capital accumulation *maintenance of the standard of living and real wages *conservation of natural resources *protection of an infant industry *industrialization of a low-wage nation *national defense

Arguments for protectionism

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

lubrication

Involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law

subordination

Involves giving large sums of money—frequently not properly accounted for—designed to entice an official to commit an illegal act on behalf of the one offering the bribe; involves breaking the law

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

World Trade Organization (WTO)

It sets many rules governing trade between its 132 members WTO provides a panel of experts to hear and rule on trade disputes between members, and, unlike GATT, issues binding decisions

*Blocked currency *Differential exchange rates *Government approval

List the three types of monetary barriers

The Omnibus Trade and Competitiveness Act (OTCA) 1988

Many countries are allowed to trade freely with the United States but do not grant equal access to U.S. products in their countries. To ease trade restrictions, the OTCA focused on correcting perceived injustice in trade practices. It dealt with trade deficits, protectionism, and the overall fairness of our trading partners

Origins of culture

Social institutions including family, religion, school, the media, government, and corporations all affect culture The family, social classes, group behavior, age groups, and how societies define decency and civility are interpreted differently within every culture Family behavior varies across the world, e.g., extended families living together to Dad washing dishes Religious value systems differ across the world, e.g., Muslims not allowed to eat pork to Hindus not allowed to consume beef School and education, and literacy rates affect culture and economic growth Media (magazines, TV, the Internet) influences culture and behavior Government policies influence the thinking and behaviors citizens of adult citizens, e.g., the French government offers new "birth bonuses" of $800 given to women as an incentive to increase family size Corporations influence culture via the products they market, e.g., MTV

what is an accurate statement about U.S. companies that only operate domestically

The companies in manufacturing are out-preformed by their multinational competitiors

Confiscation

The most severe political risk, is the seizing of a company's assets without payment

Cybersquatting

The practice of registering a domain name that is the trademark of another person or company

Multi-National Marketing Firm

When a company begins producing goods in countries beyond its home market.

International Monetary Fund (IMF) World Bank Group

are two global institutions created to assist nations in becoming and remaining economically viable. These organizations play important roles in international trade: by helping maintain stability in the financial markets and by assisting countries that are seeking economic development and restructuring

Cultural electives

areas of behavior or to customs that cultural aliens may wish to conform to or participate in but that are not required

Cultural sensitivity

being familiar with nuances A new culture can be viewed objectively, evaluated, and appreciated.

Cultural Imperatives

business customs and expectations that must be met, conformed, recognized and accommodated if relationships are to be successful

Banana Wars

conflict between the U.S. and Europe started out as a simple tariff dispute between France and U.S. companies exporting bananas from Latin American countries to France France gave preferential treatment for bananas coming from its former colonies in the Caribbean and Africa

Cultural exclusives

customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred and must not participate

jurisdiction clauses included in contracts Where the contract was entered into where the provisions of the contract where performed

how is jurisdiction determined?

Conciliation arbitration litigation

international dispute resolution

Conciliation

is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences.

Self reference criterion (SCR)

is an unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions *may impede on ability to assess foreign markets

Code law

is based on an all-inclusive system of written rules (codes) of law. Based on an all-inclusive system of written rules (codes) of law. Legal system is divided into 3 codes: commercial, civil & criminal. Considered complete "catchall provisions" Some broad interpretations are possible. Based on an all-inclusive Ownership is determined by registration Agreements may not be enforceable unless properly notarized or registered Acts of God are not necessarily limited to acts of nature but include "unforeseeable human acts" such as labor strikes or riots.

Sovereignty

refers to both the powers exercised by a state in relation to other countries and the supreme powers exercised over its own members

Nationalism

refers to feelings of national pride and unity

Hofstede

studies over 90,000 people in 66 different countries, found that cultures differed along four primary dimensions

Bribery

voluntarily offered payment be someone seeking unlawful advantage

some of thier produsts may reach forieng markets may make forieng sales to customers that sontact them directly may make sales to trading companies

which of the following are accurate statements about companies with no direct foreign marketing