Buad475 exam 1 notes PDF

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Take Notes CHAPTER 1 o There are controllable and uncontrollable marketing decision factors o We can CONTROL a firm’s characteristics, Research and 4P’s o We can NOT control a firm’s domestic environment and foreign environment o There are 3 CONCENTRIC CIRCLES o 4Ps – domestic controllable o Domestic uncontrollable o Foreign uncontrollable  You must be able to understand both the foreign and domestic environments as-well as the design of the 4Ps in order for your business to be successful both domestically and foreign o There are Impediments to International Marketing o Self-Referencing Criteria (SRC) – an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions o Ethnocentrism – The notion that people in one’s own company, culture, or country know best how to do things  Both SRC and Ethnocentrism impede the ability to assess a foreign market in its true light o How to cope with the challenge? – Design of the 4 P’s o Knowledge: culture, history, potential, trends

o Adjustment: culture tolerance, get rid of self-referencing o Stages of International Marketing Involvement/Meaning of “international” o No direct foreign marketing o Infrequent foreign marketing o Regular foreign marketing o International Marketing o Multinational Marketing o Global Marketing  Example: Coca-Cola, Unilever, nestle, Samsung, Toyota o International Marketing Concepts: EPRG Schema o Domestic market extension concept – ethnocentric o Multi-domestic market concept – polycentric o Global Marketing concept – region/geocentric – has nothing to do with the number of countries but the approach to international marketing

CHAPTER 2 THE DYNAMIC ENVIRONMENT OF INTERNATIONAL TRADE o World trade and U.S. multinationals in the 20th century o U.S. industrial corporations gained size and revenue from 1963  2014 o Some major events in the 21st century and beyond o 9/11 o US financial Crisis  led to global recession (2008) o Green government debt crisis (2010)

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o Syrian Civil War (2011) o Fighting in Ukraine (2014) o Islamic state of Iraq and Syria – ISIS (2014) o Chinese Financial Crisis (2015) o Consequences of international trade (2016) o Trump reverses position on “one china” policy in a phone call with Xi Jinping (2017) o Trumps meeting with Shinzo Abe – Abe was a big supporter of TPP but trump threatened Toyota with a “big border tax” (2017) o North Korea tested nuclear capable ballistic missiles (2017) o Trump on Angela Merkel “made Catastrophic mistake with refugee policy” (2017) o Trump vows to make mexico pay for border wall 20% border tax on Mexican imports (2017) o Balance of trade and balance of payment (VERY DIFFERENT CONCEPTS) o Balance of trade – Merchandise Trade o Balance of payment – all international financial transactions  the difference between receipts and payments  if balance of payment is negative, the value of our dollar goes down o U.S. used to be the world leaders but now china is leading o Value of dollar o Protectionism: Logic/illogic o Protectionism is Operationalization of trade barriers – the reality of trade that this is a world of tariffs, quotas, and non-tariff

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barriers designed to protect a country’s markets from foreign competition  Although the World Trade organization has been effective to some extent in reducing tariffs countries must still resort to measures of protectionism  Countries use legal barriers, and exchange barriers, to restrict the entry of unwanted goods  Example: Coca-cola in india o 11 arguments for protectionism: o protection of an infant industry o protection of the home market o need to keep money at home o encouragement of capital accumulation o maintenance of the standard of living and real wages conservation of natural resources o conservation of natural resources o industrialization of a low-wage nation (underdeveloped countries) maintenance of employment and reduction of unemployment o national defense o enhancement of business size o retaliation and bargaining o industrialization of underdeveloped countries  Three most recognized reasons:  Protection of an infant industry  National defense  Industrialization of underdeveloped countries

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o Non-tariff barriers o Limitations on trade o Customs, standards o Government participation in trade o Charges on imports o Others o Easing trade restrictions (Know BASIC INFO OF EACH) o OCTA (Omnibus trade and competitiveness Act) 1988  Deals with correcting perceived injustice in trade practices  Three areas for improving US trade: market access, export expansion, import relief o GATT (General Agreement on Tariffs and Trade)  Formed shortly after WW2, 117 member nations in 1994  Eight rounds of intergovernmental negotiations  Addressed both tariff and nontariff barriers  No enforcement powers, only advisory capacity o WTO (World Trade Organization)  Successor to GATT, formed at the signing of Uruguay round  An institution of foreign exchange rates and establishment of freely convertible currency  Invented SDR (Special Drawing rights) – sometimes referred to as “paper gold” – which represents an average base of value of several major currencies

CHAPTER 3 THE FOUNDATIONS OF CULTURE

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o Geographic Concerns o Geography is the mother of culture –basis for culture o History is the father – shapes culture over time o Climate and topography  Climate – effects use and function of products  Ex: adaptation of basch –Siemens washing machines for Europe  Topography – Mountainous region influences transportation cost  Ex: less expensive to ship by air from pacific to Atlantic in brazil o Geography nature and economic growth  Landlocked countries have LOW economic growth  Hostile Climate Countries – Economic stagnation o Social Responsibility and environmental management  Pollution o Resources – natural, human, other  Natural – energy, forests, water, minerals, flora &fauna  Human – population demographics  In the underdeveloped world, human labor provides the preponderance of energy. The principal supplements to human energy are:  Animals, wood, fossil fuel, nuclear power, the sun, ocean tides, geothermal power o Demographic Concerns o Developed vs developing countries population o Rural vs. urban areas pop

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o Controlling population growth o Population declines and aging  Not again uniformly leading to worker shortage in highly developed countries but much slower aging in less developed countries  Birth rates are decreasing globally – again populations o Worker shortage and immigration  Free flow of immigrants will help ameliorate the dual problems of explosive population expansion in less developed countries and worker shortage in industrialized regions. But will not help ameliorate the problem if political and cultural opposition about immigration cannot be overcome.  To keep the worker-to-retiree ratio from falling:  Europe needs 1.4 billion immigrants over the next 50 years  Japan and US will need 600 million immigrants by 2050 o Age, literacy, and unemployment  English is the national business language of India now o Historical Concerns o Historical events between nations influence business and history, any nations business and political culture is shaped by history o History is subjective – subjective perception of its history is crucial in understanding a nations business and political culture o History and contemporary behavior  Example: Japan

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 Confucian philosophy taught throughout japans history  Example: cold war between USSR and America  Manifest destiny and Monroe doctrine CHAPTER 4 CULTURAL DYNAMICS IN ASSESSING GLOBAL MARKETS (HOFSTEDE, HALL, HERSKOVITS) o Definitions of Culture o Most scholars – “Culture is the sum of the values, riturals, symbols, beliefs, and the thought processes that are learned, shared by a group of people and transmitted from generation to generation” o Herskovits –“culture includes: material culture, social institutions, humans and the universe, aesthetics, and language” more down to earth than the other 2 o Hofstede – “Software of the mind, problem-solving tool” o Hall – “An invisible barrier….completely different way of organizing life, of thinking, and conceiving the underlying assumptions about the family and the state, the economic system and even man himself.” o Culture is the way of life o Origins of culture o Georgraphy: gives birth to culture o History – shapes culture over time o Political Economy: communism, dictatorship, democracy, free market o Technology: television, computers, the internet, etc

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o Social Institutions: Family, religion, government, businesses, education o Elements of Culture (most scholars) o Cultural values o Beliefs  Feng shui in China, Vastu in India, lucky/ unlucky colors and numbers o Rituals  Birth, marriage, funeral o Thought process  Geography of thought – focus (western) vs. big picture (eastern) o Symbols  Art/aesthetics, language o Elements of Culture – Anthropology perspective (Herskovits) o Material culture o Social institutions o Humans and the universe o Aesthetics o Language o Cultural values ( Hofstede) o Individualism  collectivism  Focuses on self-orientation (I vs. We orientation) o Power distance  Focuses on authority orientation (subordinates expect to be told what to do)

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 Low vs high power distance  low—okay to address your boss by first name  high – proper, professional greeting – shows respect  Very high power distance – FRANCE o Uncertainty avoidance  Focuses on risk orientation (High stress and anxiety, concern for security and rules)  Americans are risk takers o Masculinity vs. feminity  Masculines – focuses on assertiveness and achievement (admiration of strength)  Feminine – more nurturing society o Long term vs. short term orientation – Confucian values  Focuses on immediate gratification (perception of control on life

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