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MKT Test 2 Study Guide.docx - MKT 340 EXAM#2 Review Chapter...

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MKT 340 EXAM #2 Review Chapter 8 Global Marketing Globalization- The process by which goods, services, capital, people, info, and ideas flow across national borders Why is “globalization” important in the world? Expands economic freedom; Spurs competition, Raises living standards in countries that are open to the global marketplace; Creation of vibrant middle class in many developing countries Reduces poverty, encourages democratization, higher labor, and environmental standards; Developing countries get access to foreign capital, export markets, advanced technology Why is “globalization” important in the U.S.? US exports 1/5 of its industrial production; Millions of Americans hold jobs supported by exports; exports represent 15% of GDP; Every state has net employment gains due to foreign trade; US exports $1.7 trillion+ in goods and services each year Significant trade partners with the U.S. Reasons for entering international markets Stagnant domestic markets; Gov regulations at home; Benefits from introducing new technologies; Decreasing trade barriers abroad (GATT, WTO, NAFTA, CAFTA, EU); Globalization of the marketplace; Defensive strategy against foreign competition; Extending the brand’s life cycle; Escape adverse trends in US Trade Agreements GATT- General Agreement on Tariffs and Trade o Legal agreement between many countries made to promote international trade by reducing or eliminating trade barriers such as tariffs and quotas WTO- World Trade Organization o Deals with the global rules of trade between nations NAFTA- North American Free Trade Agreement o US, Canada, Mexico CAFTA- Central America Free Trade Agreement o US, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua EU- European Union (28 countries) o Includes Austria, Belgium, Greece, Germany, France, Italy, Ireland, Poland, Spain, UK, etc 5 official candidate countries to join ASEAN- Association of Southeast Asian Nations o Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam Mercosur- Argentina, Brazil, Paraguay, Uruguay, Venezuela GDP versus GNI GDP (Gross Domestic Product)- The market value of the goods and services produced by a country in a year; the most widely used standardized measure of output GNI (Gross National Income)- Consists of GDP plus net income earned from investments abroad, minus any payments made to nonresidents who contribute to the domestic economy Human Development Index- A composite statistic/index of life expectancy, education, and per capita income indicators, which are used to rank countries into 4 tiers of human development Difference between a quota and a tariff Tariff - A tax levied on a good imported into a country; also called a duty Quota - Designates the maximum quantity of a product that may be brought into a country during a specified time period Hofstede’s cultural dimensions- Concept that proposed that cultures differed on 6 dimensions
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