bus 303 midterm 2

111 terms by gscaglio 

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total product

What the customer buys, including the physical product, brand name, accessories, after-sales service, warranty, instructions for use, company image, and package.

Promotion

Any form of communication between a firm and its publics

Advertising

Paid, nonpersonal presentation of ideas, goods, or services by an identified sponsor

programmed management approach

A middle-ground advertising strategy between globally standardized and entirely local programs

sales promotion

Any of various selling aids, including displays, premiums, contests, and gifts.

public relations

Various methods of communicating with the firm's publics to secure a favorable impression

foreign national pricing

Local pricing in another country

International pricing

Setting prices of goods for export for both unrelated and related firms

transfer price

Intracorporate price, or the price of a good or service sold by one affiliate to another, the home office to an affiliate, or vice versa

market screening

A version of environmental scanning in which the firm identifies desirable markets by using the environmental forces to eliminate the less desirable markets

Environmental scanning

A procedure in which a firm scans the world for changes in the environmental forces that might affect it

country screening

using countries as the basis for market selection

segment screening

Using market segments as the basis for market selection

Market indicators

Economic data used to measure relative market strengths of countries or geographic areas

market factors

Economic data that correlate highly with market demand for a product

estimation analogy

Process of using a market factor that is successful in one market to estimate demand in a similar market

trend analysis

Statistical technique by which successive observations of a variable at regular time intervals are analyzed to establish regular patterns that are used for establishing future values

cluster analysis

Statistical technique that divides objects into groups so that te objects within each group are similar

trade mission

A group of business people and/or government officials (state or federal) that visits a market in search of business opportunities

Trade fair

A large exhibition, generally held at the same place and time periodically, at which companies maintain booths to promote the sale of their products

social desirability bias

The custom of politeness toward everyone that can cause respondents to give answers calculated to please the interviewer rather than to reflect the respondent's true beliefs or feelings

global mind-set

combines an openness to and an awareness of diversity across markets and cultures with a propensity and ability to synthesize across this diversity

ethnocentric

related to hiring and promoting employees on the basis of the parent company's home-country frame of reference

Polycentric

related to hiring and promoting employees on the basis of the specific local context in which the subsidiary operates

Regiocentric

related to hiring and promoting employees on the basis of the specific regional context in which the subsidiary operates

Geocentric

related to hiring and promoting employees on the basis of ability and experience without considering race or citizenship

home-country nationals

sane as parent-country national

parent-country national (PCN)

Employee who is a citizen of the nation in which the parent company is headquartered; also called home-country national

Host-country national (HCN)

Employee who is a citizen of the nation in which the subsidiary is operating, which is different from the parent company's home nation

Third-country national (TCN)

Employee who is a citizen of neither the parent company nor the host country

expatriates

A person living outside his or her country of citizenship

culture shock

The anxiety people often experience when they move from a culture that they are familiar with to one that is entirely different

Allowances

Employee compensation payments added to the base salaries because of higher expenses encountered when living abroad

bonuses

Expatriate employee compensation payments in addition to base salaries and allowances because of hardship, inconvenience, or danger

compensation packages

For expatriate employees, packages that can incorporate many types of payments or reimbursements and must take into consideration exchange rates and inflation

International status

Entitles the expatriate employee to all the allowances and bonuses applicable to the place of residence and employment

consolidation

process of translating subsidiary results and aggregating them into 1 financial report

current rate method

an approach in foreign currency translation in which assets and liabilities are valued at current spot rates

temporal method

an approach in foreign currency translation in which monetary acts are valued at the spot rate and accounts carried at historical costs are translated at their historic exchange rates

functional currency

primary currency of a business

triple bottom line (3bl)

a result or impact report on the environmental, social and financial impacts of the bus

american depository receipts (adrs)

foreign shares held by a custodian, usually a US bank, in the issuers home market and traded in dollars on the US exchange

off shore financial center

location that specializes in financing nonresidents, with low taxes and few banking regulations

fronting loan

a loan made thru an intermediary from parent company to subsidiary

transfer pricing

bookkeeping cost of goods transferred from one unit of a bus to another in another country

multilateral netting

strategy in which subsidiaries transfer net intracompany cash flows thru a centralized clearing center

leading and lagging

timing pmts early (lead) or late (lag) deepening on anticipated currency movements so that they have the most favorable impact for company

transaction exposure

change in the value of a financial position created by foreign currency changes between the establishment and settlement of a contract

hedging

a process to reduce or eliminate financial risk

forward market hedge

foreign currency contract sold or bought forward in order to protect against foreign currency movement

currency option hedge

a method to hedge foreign currency exposure by borrowing and lending in the domestic and foreign money market

swapping

a spot sale/purchase of an asset against a future purchase/sale of an equal amount in order to hedge a financial position

translation exposure

potential changes in the value of a company's financial position due to exposure created during the consolidation process

economic exposure

the potential for the value of future cash flows to be affected by unanticipated exchange rate movements

income tax

direct tax levied on earnings

value added tax (vat)

indirect tax collected from the parties as they add value to the product

withholding tax

indirect tax paid by the payor; usually on passive income

branch

legal extension of the parent company

subsidiary

separate legal entity owned by the parent company

Gold Standard

The use of gold at an established number of units per currency

Bretton Woods System

Monetary system from 1945 to 1971
Used a par value based on gold and the U.S. dollar. Supported huge international trade growth

Fixed Exchange Rate

Specific currency exchange equivalence upheld by government

par value

stated value

floating currency exchange rates

rates that are allowed to float against other currencies and are determine by market forces

jamaica agreement

1976 IMF agreement that allows flexible exchange rates among members

banks for international settlements

institution for central bankers, operates as their bank

central reserve asset

asset, usually current, held by a govts central bank

vehicle currency

a currency used as a vehicle for international trade/inv

intervention currency

currency used by a country to intervene in the foreign currency exchange markets, often to buy its own currency

spot rate

the exchange rates between two currencies for delivery within 2 bus days

forward urgency market

trading market for currency contracts deliverable for 30, 60, 90 or 180 days in the future

forward rate

the exchange rate between two currencies for delivery in the future, usually 30, 60, 90 or 180 days

monetary policies

govt policies that control the amount of money in circulation and its growth rate

fiscal policies

policies that address the collecting and spending of money by the govt

law of one price

concept that in an efficient market like products will have like prices

arbitrage

the process of buying and selling instatneously to make profit with no risk

fisher effect

the relationship between real and nominal interest rates: the real interest rate will be the nominal interest rate minus the expected rate of inflation

international fisher effect

concept that the interest rate differentials for any 2 currencies will reflect the expected change in their exchange rates

purchasing power parity (ppp)

shows that the number of units of a currency required to buy the same basket of goods/services in the foreign market that one dollar would buy in the US or home market

efficient market approach

assumption that current market prices fully reflect all available relevant info

random walk hypothesis

assumption that the unpredictability of factors suggests that the best predictor of tomorrow's prices is todays prices

fundamental approach

exchange rate prediction based on econometric models that attempt to capture the variables and their correct relationships

technical analysis

an approach that analyzes data for trends and then projects these trends forward

balance of payments (bop)

record of a country's transactions with the rest of the world

What is the importance of the international monetary system's evolution to IB

-simplicity of the gold standard was its appeal
-trade imbalances were corrected by flow of gold toward the surplus
-money only created if backed by gold

Causes of exchange rate movement

-market forces establish floating currency values and ease of convertibility
-monetary policies: govt decisions that control amt of money in circulation and growth rate
-fiscal policies: address govt's collecting/spending of money

BOP shows glodemand for country's currency

-global demand for country's currency
-used to predict economic changes in a target country

periodic updating

changes in market data/other related events demand that bus./ marketing plans be updated to reflect the impact of these changes

entry barriers

import restrictions, local participation requirements, local content restrictions, govt owned competition

profit remittance barriers

undue restrictions on the repatriation of earnings, limits to FDI, inability to provide foreign exchange

policy stability

political climate, govt stability, public unrest -sociocultural factors
-competitive forces

Field trip

spend enough time in the market to learn, experience, & "get a feel" for it

trade mission

a group of businessppl and/or govt official (state/federal) that visits a market in search of business opps

trade fair

a large exhibition, generally held at the same place / same time periodically, @ which companies maintain booths to promote the sale of their products.

The international marketing manager's question

Can we standardize worldwide, should we make some changes, or should we formulate a completely different marketing mix?"

marketing mix

a set of strategy decisions about: product, price, promotion, distribution

Sociocultural Forces

different cultural patterns often require changes in brand name, color, label translations, package size & price

Legal Forces

impact every aspect of marketing mix - such as pollution, consumer protection & operator safety legislation

Economic Forces

income differences impact consumer's ability to pay, requiring quantity and price changes

Physical Forces

climate, terrain, altitude, etc., may demand product alteration

Promotion

Communication that secures understanding between a firm and its publics to bring favorable buying action and long-term confidence in the firm and its products or services

Glocal advertising

neither purely global nor purely local
Best way to handle international advertising

Personal selling

importance depends on
relative cost of advertising
funds available for advertising
available media
type of product

international standardization

overseas saels force, sales presentations, training similar to home country

pricing strategies

affect other corporate functions
directly determine gross revenue
are a major determinant of profits

international human resource management( IHRM)

home country national or parent country national
host country national
third country national

Inpatriates

Employees hired in the host country

Flexpatriates

home or third-country employees on short term assignments

Work Context

job clarity, role conflict, discretion in job completion

Adjustment to General Environment

Differences in housing, food, education, health, safety, transportation

Interaction with Local Nationals

Differences with behavioral norms, communication patterns

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