Marketing Essentials Chapter 4

International Trade

Exchange of goods and services among nations

Imports

Goods and services purchased from other countries

Exports

Goods and services sold to other countries

Balance of Trade

The difference in value between exports and imports of a nation

Free Trade

Commercial exchange between nations that is conducted on free market principles, without restrictive regulations

Tariff

A tax on imports, sometimes called a duty

Quota

Limits either the quantity or the monetary value of a product that may be imported

Embargo

Total ban on a specific good coming into and leaving a country

Protectionism

Government's establishment of economic policies that systematically restrict imports in order to protect domestic industries

World Trade Organization (WTO)

Coalition of nations that makes rules governing international trade

North American Free Trade Agreement (NAFTA)

International trade agreement among the US, Canada, and Mexico

European Union (EU)

Europe's trading bloc

Licensing

Involves letting another company (licensee) use a trademark, patent, special formula, company name, or some other intellectual property for a fee or royalty

Contract Manufacturing

Involves hiring a foreign manufacturer to make your products, according to your specification

Joint Venture

Business enterprise that companies set up together

Foreign Direct Investment (FDI)

Establishment of a business in a foreign country

Multinationals

Large corporations that have operations in several countries

Mini-nationals

Midsize or smaller companies that have operations in foreign countries

Globalization

Selling the same product and using the same promotion methods in all countries

Adaptation

A company's use of an existing product and/or promotion to which changes are made to better suit the characteristics of a country or region

Customization

Involves creating specially designed products or promotions for certain countries or regions

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