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MARK 3000 Chp 8- Global

Terms in this set (30)

Globalization
Process by which goods, services, capital, people, information, and ideas flow across national borders.
4 Globalization Subcategories
Economics
Infrastructure and technology
Government actions
Sociocultural Factors
Economics
General economic environment
Market size and population growth
Real income
Infrastructure and technology
Transportation
Channels
Communication
Commerce
Government actions
Tariff
Quota
Exchange control
Trade agreement
Ease in doing business
Sociocultural factors
Power distance
Uncertainty avoidance
Individualism
Masculinity
Time orientation
Culture
Purchasing power parity (PPP)
theory that holds if exchange rates are in equilibrium, products should cost the same in each country. In that case, the Big Mac Index (an index comparing the cost of a Big Mac wherever it is sold throughout the world) would be identical for each country.
Gross Domestic Product (GDP)
measures the market value of goods and services produced by a country in a year, and is the most widely used of all the various economic metrics.
Gross National Income (GNI)
a measure of the countries economic output

GDP + Net Investment income earned from abroad
Market Potential
to find, use as many metrics as you can
Transportation
"How will we get it there?"
Communication
including telephony, Bill gates helps with this in countries because communication systems are weak in developing nations
Distribution channels
tend to be longer and more complex within global contexts then domestic markets. For this reason, distribution channel efficiency is a critical factor in keeping costs down in global marketing
Commmerce
legal, banking, and regulatory systems of infrastructure.
Quota
maximum limit
reduces availability of imported goods
Tariff
Tax
Artificially raises prices
lowers demand

benefits domestically made products because they reduce foreign competition
Trade agreement
European Union
NAFTA
European Union
There are 28 member countries of the EU
Standardized currency, regulations, trade practices
NAFTA
United states, Canada, and Mexico
item produced in any is treated as domestic in all
Ease of doing things
ownership policies
political stability
desire for foreign business
Hofstede's cultural dimensions
Power distance
Uncertainty avoidance
Individualism
Masculinity
Time orientation
Business culture
The common set of practices considered acceptable in a business setting

Significant differences in values, behaviors across countries, regions

Language problems
Export
least risky strategy because the firm does not own or establish anything in the country
Franchising
is a contractual agreement b/w two companies in which one pays for the right to use the brand and concept developed by the others
Strategic alliance
is a relationship in which two firms collaborate on a business opportunity, but do not invest in eachother
Joint venture
is a business formed when two or more firms pool their resources
Direct investment
Market entry strategy in which the firm directly owns property and equipment in the foreign market.
A firm maintains total ownership of its plants, operation facilities, and offices in a foreign country.
Owns 100%
Global Product and Promotion strategies
Pringle flavors in Japan compared in US
Global pricing strategies
Global distribution strategies
Some global channels are very long and complex.
Some consumers shop at local small local stores.
Infrastructure issues can impact channel
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