MKT 291 Study Guide - Midterm Guide: Swot Analysis, Crowdsourcing, Neuromarketing
Chapter 6
Manufactured products and commodities account for 75% of world trade. Service
industries, including telecommunications, transportation, insurance, education, banking,
and tourism, represent the other 25% of world trade.
Four Trends affecting World Trade:
1. Decline of economic protectionism by individual countries
2. Rise of economic integration and free trade among nations
3. Global competition among global companies for global consumers
4. Emergence of a networked global marketplace
Protectionism: the practice of shielding one or more industries within a country’s
economic from foreign competition, usually through the use of tariffs or quotas.
oThe argument for protectionism is that is preserves jobs, protects a nation’s
political security, discourages economic dependency on other countries, and
encourages the development of domestic industries
Tariff: A tax on goods or services entering a country
oRaises the price of the imported good, so tariffs give a price advantage to
domestic products competing in the same market
Quota: Restriction placed on the amount of a product allowed to enter or leave a country
oBy limiting the supply of foreign products, an import quota helps domestic
industries retain a certain percentage of the domestic market
World Trade Organization (WTO): was created in 1995 to address a broad array of
world trade issues
oThere are 153 members and they set rules governing trade between its members
through panels of trade experts who decide on trade disputes between members
through trading decisions.
North America Free Trade Agreement (NAFTA): lifted many trade barriers between
Canada, Mexico and the US and created a marketplace with more than 450 million
consumers
oHas stimulated trade flows among members nations as well as cross-border
retailing, manufacturing, and investment.
Global Competition: exists when firms originate, produce, and market their products
and services worldwide
oBroadens the competitive landscape for marketers.
Global Companies:
oInternational firms - Engages in trade and marketing in different countries and as
extension of the marketing strategy in its home country
Market their existing products and services in other countries the same
way they do in their home country
oMultinational firms - views the world as consisting of unique parts and markets to
each part differently
Uses a multi domestic marketing strategy
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oTransnational firms - views the world as one market and emphasizes cultural
similarities across countries or universal consumer needs and wants more than
differences
Employs a global marketing strategy.
Multi-domestic Marketing Strategy: having many different product variations, brand
names, and advertising programs as countries in which they do business.
Global Marketing Strategy: The practice of standardizing marketing activities where
there are cultural similarities and adapting them when cultures differ
oBenefits marketers by allowing them to realize economies of scale from their
production and marketing activities.
Global Brand: a brand marketed under the same name in multiple countries with similar
and centrally coordinated marketing programs.
oThese brands have the same product formulation or service concept, deliver the
same benefits to consumers, and use consistent advertising across multiple
countries and cultures.
Global Consumers: consist of consumer groups living in many countries or regions of
the world that have similar needs or seek similar features and benefits from products or
services
oEvidence suggests the presence of a global middle-income class, a youth
market, and an elite segment, each consuming or using a common assortment of
products and services, regardless of geographic location.
“Global Teenager”: consists of 2 billion 13-19 year-olds in Europe, North and South
America, and industrialized nations of Asia and the Pacific Rim who have experienced
intense exposure to television, movies, travel, the internet, and global advertising by
companies such as Apple, Sony, Nike and Coca-Cola (
Cultural Symbols: things that represent ideas and concepts
oSymbols and symbolism play an important role in cross-cultural analysis because
different cultures attach different meanings to things
oThese can evoke deep feelings.
Language: English, French and Spanish are the principal languages used in global
diplomacy and commerce, but the best language to communicate with consumers is
their own.
Back Translation: A translated word or phrase is retranslated into the original language
by a different interpreter to catch errors.
Exporting: producing goods in one country and selling them in another country.
oAllows a company to make the least number of changes in terms of its product,
its organization, and even its corporate goals.
Indirect Exporting: when a firm sells its domestically produced goods in a foreign
country through an intermediary.
oHas the least amount of commitment and risk but will return the least profit. Fran
Wilson Creative Cosmetics did this in Japan.
Direct Exporting: when a firm sells its domestically produced goods in a foreign country
through intermediates
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oMost companies will do direct exporting when they believe that their volume of
sales will be sufficiently large and easy to obtain so that they do not require
intermediates.
Licensing: A company offers the right to a trademark, patent trade secret, or other
similarly valued items of intellectual property in return for a royalty or a fee.
oAdvantages are low risk and a capital-free entry into a foreign country.
Franchising: A variation of licensing
oOne of the fastest growing market-entry strategies.
Joint venture: When a foreign company and a local firm invest together to create a local
business, sharing ownership, control and the profits of the new company.
Direct Investment: Entails a domestic firm actually investing in and owning foreign
subsidiary or division
oMany U.S. based companies use this mode of entry; this is a big investment
oAdvantages- cost savings, better understanding of local market conditions, and
fewer local restrictions.
Product can be sold globally in 3 ways:
oProduct Extension - Selling virtually the same product in other countries. Works
best when the consumer target market for the product is alike across countries
and cultures- that is consumers share the same desires, needs, and uses for the
product.
oProduct Adaption - Changing a product in some way to make it more appropriate
for a country’s climate or consumer preferences.
oProduct Invention - Companies can invent totally new products designed to
satisfy common needs across countries.
Communication Adaptation Strategy: selling the same product, but adapting their
promotion message depending on the country.
Dual Adaptation Strategy: modifying both their products and promotion messages.
Chapter 7
Marketing Research- the process of defining a marketing problem and opportunity,
systematically collecting and analyzing information, and recommending actions
Decision- a conscious choice from among two or more alternatives
Decision Making- the act of consciously choosing from among alternatives
5 steps to Market Research:
1. Define the problem- Set research objectives, and identify possible marketing
actions
2. Develop the research- Specify constraints, identify data needed for marketing
actions and determine how to collect data
3. Collect relevant information- Obtain secondary data and obtain primary data
4. Develop findings- analyze data and present findings
5. Take marketing actions- make action recommendations, implement action
recommendation and evaluate results
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Document Summary
Manufactured products and commodities account for 75% of world trade. Service industries, including telecommunications, transportation, insurance, education, banking, and tourism, represent the other 25% of world trade. Four trends affecting world trade: decline of economic protectionism by individual countries, rise of economic integration and free trade among nations, global competition among global companies for global consumers, emergence of a networked global marketplace. Tariff: a tax on goods or services entering a country: raises the price of the imported good, so tariffs give a price advantage to domestic products competing in the same market. Quota: restriction placed on the amount of a product allowed to enter or leave a country: by limiting the supply of foreign products, an import quota helps domestic industries retain a certain percentage of the domestic market. North america free trade agreement (nafta): lifted many trade barriers between.
