Unit one notes
Popular in International Marketing
Popular in Marketing
This 7 page Study Guide was uploaded by Hannah Hicks on Monday October 5, 2015. The Study Guide belongs to MKT 371 at a university taught by Dr. Uday Tate in Summer 2015. Since its upload, it has received 46 views.
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Date Created: 10/05/15
MKT 371 Exam 1 Chapter 1 Marketing can be defined as the activity, set of institutions , and taught in an introductory and process for creating, communicating, delivering, and exchanging offerings that have an value for customers, clients, partners, and large society at large. Marketing Mix (product, place, and promotion) comprises a contemporary marketers primary tools. Global marketing focuses its resources and competencies on global marketing and global market opportunities. A company that engages in global marketing conducts important business activities outside the home country market. Global marketing can also take form of a diversification strategy in which a company creates new product or service offerings targeting a new segment, a new country, or a new region. Companies doing business there must take extra care to protect their intellectual property and deal with knockoffs. The best global brands are also the best local brands Marketing is one of the functional areas of business, distinct from finance and operations Value = Benefits/Price (money, time, effort, etc.) Value equation benefits are a combination of the product, the promotion, and the distribution. In order to achieve market success, a product or brand must measure up to a threshold of acceptable quality and be consistent with buyer behavior, expectations and preferences. Achieving success in global marketing often requires persistence and patience When a company succeeds in creating more value for customers than its competitors do that company is said to enjoy competitive advantage in an industry. Global industry is one in which competitive advantage can be achieved by integrating and leveraging operations on a worldwide scale. The differences of people from country to country mean that a marketing approach that has proven successful in one country can fail in another. the way a company addresses this task is a reflection of its global marketing strategy (GMS) In single country marketing, strategy development addresses two fundamental issues: choosing a target market and developing a marketing mix. Think globally, act locally global expansion is key to companys growth strategy the worldwide view of a company can be ethnocentric, polycentric, regiocentric, or geocentric A persson who assumes that his or her home country is superior = ethnocentric orientation extension approach / standardization Polycentric orientation = opposite ^ / describes mgts belief or assumption that each country in which a company does business is unique. l ocalized / adaptation approach regiocentric orientation = view that similarities as well as differences characterize specific regions of the world. MKT 371 Exam 1 Geocentric = views entire world as potential market and strives to develop integrated global strategies. Forces affecting global integration and global marketing Multilateral trade agreements The General Agreement on Tariffs and Trade (GATT) World Trade Organization (WTO) Converging market needs and wants and the info revolution democratization of information fueled by technology, products, and services Transportation and communication improvements product development cost quality world economic trends leverage enables a company to expend less time, less effort,& less mooney 1) experience transfers 2) scale economies 3) resource utilization 4) global strategy — identify opportunities,trends,threats, &resources global comp adheres to the 3 principle /leverages skills & focuses its resources to create superior perceived value for customers & achieve competitive advtge. restraining forces mgt myopia & organizational culture national controls opposition to globalization MKT 371 Exam 1 Chapter 2 Economic Systems Four main types: 1) mrk capitalism 2)centrally planned socialism 3)centrally planned capitalism 4)mkt socialism Gross Domestic Product (GDP)— measure of nations econ activity Consumer spending + Investment spending + Gov purch + Net eXports =GDP Mkt Capitalism — economic system individuals & firms allocate resources & production resources are privately owned // consumers decide what goods they desire & firms determine what goods to produce Centrally Planned Socialism —Command resource allocation & private resource ownership / serve public as sees fit / “top down” Eco sys in command resource allocation is utilized overall environmnt of private resource ownership > centrally planned capitalism. A fourth variant, mkt socialism, in such a system, mkt allocation policies are permitted within an overall environment st ownership. Gross National Income (GNI) BRICS= Brazil, Russia, India, China, S Africa / todays focus & predicted key players in global trade. Low income countries , characteristics shared by countries at this income 1. limited ind & high % of the pop engaged in agriculture & sub farming 2. high birth rates, short life expectancy 3. low literacy rates 4. heavy reliance on foreign aid 5. Political instability and unrest 6. concentration in africa south of the sahara 13 % of the worlds pop LowerMiddleIncome Countries UN designated 50 cntries in bottom as leastdeveloped countries (LDCs) developed countries = high income Lower middle income countries GNI between $1026$4035 / Thailand, Indnes Upper Middle Income Countries — also known as industrializing or developing countries GNI $403612475 / Chile, Malaysia, MEX, Venezuela, BRICS New Industrializing Economies (NIEs) —lowermid & upper countries that achieve the highest sustained rates of econ growth Bottom of the pyramid (BOP) —mistaken assumption no money, focused on basic needs, no room for new mkt, cannot use advance tech, companies will be criticized for exploiting the poor High Income Countries — advanced, developed, industrialized / GNI $12,476+ / US,SWE, JAP heavily dependent on new products & innovations Group of Seven (G7) — US,JAP,GER,FRA,UK,Can, Italy / high income Group of Eight (G8) — 1998 Russia added MKT 371 Exam 1 Group of Twenty (G20) — 1999 / 19 countries+ European Union / BRA,India, Indonesia, Turk Organization for Econ Cooperation&Development (OECD) —another institution 4 high inco. The Triad —Japan,Western Eur,US. Represent the dom econ centers of the world (Ohmae) / expanded Triad — pacific region, CAN&MEX 7% Eurasia&Afr / 13% Eur / 11% Lat Am/ Pacific 14%/ N Am 31% Balance of payments record of all econ transactions between residents of a country & world product saturation levels — % of potential buyers or households that own Current account is a broad measure that includes merch trade( man goods) & srvc trade( intangible, experencebased econ output) Country with negative current account bal = trade deficit / outflow of $ to pay for imports exceeds $ from sales of exports Trade surplus: positive current account balance Capital account : record of long term direct investment, portfolio invest, & short/long term capital flows devaluation : gov action or econ crisis Economic exposure reflects the impact of currency fluctuations on a comp FIN performance / occurs when comp biz transactions result in sales or punch denominated in foreign currency. Hedging exchange rate exposure involves establishing an offsetting currency position such that the loss or gain of one currency position is offset by corresponding gain/loss in some other currency. (Porche) Put option : buyer right (not obligation) to sell specified # of foreign currency units at fixed price, up to expiration date. Call Option: right not ob, to buy foreign currency MKT 371 Exam 1 Chapter 3 General Agreement on Tariffs and Trade (GATT): treaty govs agreed on World Trade Organization (WTO): successor to^ / 1995 / neutral trade experts serve as mediators in global trade disputes / promotes free trade within regions Preferential trade agreement (PTA): mechanism that confers special treatment on select trading partners / favoring countries Free Trade Area (FTA) : 2 + countries agree to eliminate tariffs & other barriers that restrict trade. Ultimate goal= Zero duties on goods that cross borders Rules of origin: verifies the country of origin of shipment Customs Union: represents logic / eliminating internal barriers, est Common External Tariffs (CETs) Common Market: next level econ integration removal of internal barriers, est common external tariffs, common mkt allows for free movement of factors or prod, labor, capital. Econ Union : builds upon the elimination of internal tariff barriers, the best of comm ext barriers, & free flow of factors / coordinate and harmonize econ & social policies in the union to facilitate free flow of cap, labor, G&S from country to country / common mkt place 4 srvc, capital & goods. A true econ union requires extensive political unity (similar to a nation) North American Free Trade Agreement (NAFTA): free trade area with combined pop of more than 460m ppl & total gross domestic prod (GPD) is almost $18t // 1992 ; 1994 Central American Integration System — El Sav, Honduras, Guatemala, Nicag, C Rica, Panama. Andean Community —Bolivia, Chile, Colomb, Ecuador, Peru, Venez. Chile quit 1976. Common Mkt of the South (Mercosur): Asucion treaty signified agreement by gov of Argentina, Braz, Paraguay, Uruguay. Goods, srvc,& factors of prod move freely thru countries; until goal, Mercosur operates as customs union. Caribbean Community and Common Market (CARICOM) Free Trade Area of the Americas — biggest traderelated issue in West hemi Association of Southeast Asian Nations (ASEAN) : econ, polit, social, cultural coop / Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand (ASEAN6) + Vietnam, Cambodia, Loas, Burma, Japan, China, Korea, Aust, New Z, India European Union (EU) Belgium, France, Holland, Italy, Lexembourg, W Germany, GB, Denmark, Ireland, Greece, Spain, Portugal Maastricht (Netherlands) Treaty set stage for creation of econ& monetary union including euro. Euro Zone (16 total) Austria, Belg, Fin, Ireland, Netherlands, france, germ, italy, luxembourg, port, spain (11 charter members) +Greece, Slovenia, Cyrus, Malta, Slovakia, Estonia, Latvia… 24? Harmonization : content & other prod standards that varied now in alignment Transparency: Openness in biz dealings, fin disclosures, pricing, or other where goal is to remove layers of secrecy or other to clear way for decision making/understanding Gulf Cooperation Council(GCC): key regional org / Bahrain, Kuwait, Oman, qatar, Saudi arabia, united arab emirates. 45% of worlds oil // connection is key. MKT 371 Exam 1 Econ Comm of West Africa States (ECOWAS) : 16 states / promote trade, coop, self reliance Southern African Development Community (SADC) MKT 371 Exam 1 Chapter 4 Global consumer culture positioning (GCCP): mkt tool /differentiate prod culture is programming of the mine. attitude learned tendency to respond // belief organized pattern of knowledge about world // value enduring belief or feeling that specific mode of conduct personally, socially preferable to mode of conduct Subcultures: smaller groups with shared subset of Att, Bel, val. Aesthetics: sense of what is beautiful & not, what represents good taste not obscene low context culture explicit& specific/ words carry communication power high context culture less info contained in verbal message —Hofstede’s Cultural Typology Power Distance first dimension/ less powerful members expect power to be distributed unequally. Individualist cultures: 2nd dim / primarily concerned with imm Fam/ integrated groups Collectivist Cultures: cohesive ingroups/ high individualism in US&EU / Low Jap&Asia Achievement: 3rd dim / Men expected to be assertive, competitive, concerned with material success, women = nurturer & children Uncertainty advoidance : members are uncomfortable with unclear, ambiguous, or unstructured situations. Resort to aggressive, emotional, intolerant behavior, absolute truth Long Term Orientation (LTO): in Chinese Value Survey / social behavior dimensions of culture: pwr distance, individualism/collectivism, and masculinity/femininity. ^ vs —Short Term Orientation: SelfReference Criterion (SRC): unconscious reference to ones own cultural values // 4 step (disney example) 1 define prob or goal 2 same + no judgements 3Isolate the SRC influence 4 redfine the prob without SRC and solve for host country Diffusion of Innovation : 5 stage framework to explain the way new prod are adopted by culture over time. Awareness, interest, evaluation, trail, adoption. (Rogers) Characteristics of innovations : relative advantage, compatibility, complexity, divisibility, communicability. <— rate in which innovations are adopted Adopter Categories are classifications of individuals within a mkt on the basis of the categories innovativeness. Environmental sensitivity reflects the extent to which prod must be adapted to the culture specific needs of different national mkts. environmental sensitivity.
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