63. 8 questions associated with target costing: Does the price reflect the product's quality?Is the price competitive given local market conditions?Should the firm pursue market penetration, market skimming, osome other pricing objective?What type of discount (trade, cash, quantity) and allowance (advertising, trade-off) should the firm offer its international customers?Should prices differ with market segment?What pricing options are available if the firm's costs increase or decrease? Is demand in the international market elastic or inelastic?Are the firm's prices likely to be viewed by the host-country government as reasonable or exploitative?Do the foreign country's dumping laws pose a problem?

88. additional considerations for exporting: Governmental policiesMarketing concernsLogistical considerationsDistribution issues

91. advantages and disadvantages international licensing: AdvantagesLow financial risksLow-cost way to assess market potential Avoid tariffs, NTBs, restrictions on foreign investmentLicensee provides knowledge of local marketsDisadvantagesLimited market opportunities/profitsDependence on licenseePotential conflicts with licenseePossibility of creating future competitor

96. advantages and disadvantages of international contract manufacturing: AdvantagesLow financial risksMinimize resources devoted to manufacturingFocus firm's resources on other elements of the value chainDisadvantagesReduced control (may affect quality, delivery schedules, etc.)Reduce learning potentialPotential public relations problems

93. advantages and disadvantages of international franchising: AdvantagesLow financial risksLow-cost way to assess market potentialAvoid tariffs, NTBs, restrictions on foreign investmentMaintain more control than with licensingFranchisee provides knowledge of local marketDisadvantagesLimited market opportunities/profitsDependence on franchiseePotential conflicts with franchiseePossibility of creating future competitor

98. advantages and disadvantages of international management contracts, turnkey projects and foreign direct investment:AdvantagesFocus firm's resources on its area of expertiseMinimal financial exposureDisadvantagesPotential returns limited by contract expertiseMay unintentionally transfer proprietary knowledge and techniques to contractee

54. advantages of regional trade agreements: More people to trade with, small population markets become more favorable

14. arbitrage: resale in a second market in order to profit from a price discrepancy

15. arbitrage of goods and arbitrage of money: Arbitrage of Goods, people buy the good in the market offering the lower price and resell itin the market offering the higher priceArbitrage of Money, seek to profit from small differences in the price of foreign exchange in different markets

International MarketingStudy online at quizlet.com/_34klw

73. assessing pricing environment: Currency fluctuationsInflationary environmentGovernment controls, subsidies, regulationsCompetitive behaviorSourcing

83. assessing the new market opportunities: Product-market dimensionsMajor product-market differencesStructural characteristics of national marketCompetitor analysisPotential target marketsRelevant trendsExplanation of changeSuccess factorsStrategic options

66. Be able to list and explain the various incoterms.: Ex-works—seller places goods at the disposal of the buyer at the time specified inthe contract; buyer takes delivery at the premises of the seller and bears all risks and expenses from that point on.Delivery duty paid—seller agrees to deliver the goods to the buyer at the place he or she names in the country of import with all costs,including duties, paid. FAS (free alongside ship) named port of destination—seller places goods alongside the vessel or other mode of transport and pays allcharges up to that pointFOB (free on board)—seller's responsibility does not end until goods have actually been placed aboard shipCIF (cost, insurance, freight) named port of destination—risk of loss or damage of goods is transferred to buyer once goods have passed theship's railCFR (cost and freight)—seller is not responsible at any point outside of factory

112. broad based media, horizontal media and vertical media: Broad-based mediabusiness Week, The Wall Street JournalHorizontal mediafocus on a particular marketing task(Purchasing World)Vertical mediafocus on a particular market or industry (Trucker World)

23. causes of Asian financial crisis: Interest rates in the United States went up. People took their money from Asia to put it in the UnitedStates (Previously rates were low). Poor regulations in Asian markets. Instability and over interconnectedness within the Asian financialmarkets.

61. companion products: Products whose sale is dependent upon the sale of primary product

114. components of personal selling: Salesperson' has the ability to adapt to the customer and the selling situation.Salesperson must have athorough knowledge of the product or service

109. components of the promotional mix: AdvertisingAny form of non-personal communicationPersonal SellingThe use of person-to-person communicationPublicityNon-paid, commercially significant newsSales PromotionDirect inducements of extra value or incentivesSponsorshipPromoting interests of company by association

95. contract manufacturing: used by firms, both large and small, that outsource most or all of their manufacturing needs to othercompanies. This strategy reduces the financial and human resources firms need to devote to the physical production of their products.

41. controling for unfair trade practices: The Department of Commerce transfers confirmed cases of unfair trading to the U.S.International Trade Commission, If a majority of the six ITC commissioners decide that U.S. producers have suffered "material injury," theITC will impose duties on the offending imports to counteract the unfair trade practice

43. Controlling unfair trad: Countervailing dutiesAnti-dumping regulation

100. the core, tangible and augmented products: The Core Producta product or services that is essentially the same as that of competitors.The Tangible Producta product or service that is differentiated composition, origin, or tangible features from competing products.The Augmented Producta product or service which is serviced after the sale and carries a warrantee from the producer, producing a continuing relationship with theseller.

24. countries involved in the currency crisis: Indonesia, South Korea, Taiwan, Singapore, Malaysia

105. country of origin considerations: Organizational capabilitiesIs it worth itCan we afford not to do itCan a specific return-on-investment (ROI) be attainedQuality, price, and user perceptonsWarrantiesManagerial talent?

104. country of origin effects: a product may have a strong effect on consumer perceptions and biases about foreign products

2. demand for Yen: derived from foreigners' demand for Japanese products

86. direct and indirect forms of exporting?: Indirect exporting occurs when a firm sells its product to a domestic customer, which in turnexports the product, in either its original form or a modified formDirect exporting occurs through sales to customers—either distributors or end-users—located outside the firm's home country

116. direct marketing: Is intended to elicit immediate and measurable responses to direct-response advertising, telemarketing, and directselling.

4. Direct quote: Price of the foreign currency in terms of the home currency

55. disadvantages of regional trade agreements: Kills small suppliers

80. dumping: Sale of an imported product at a price lower than that normally charged in a domestic market or country of origin

44. dumping: Selling at a price in a foreign market that is below production costs

30. Economic development programs: diversify economies to reduce the impact of, a bad harvest or falling prices for the dominant exportthrough export promotion or import substitution

51. economic integration: A free trade areaA customs union = external trade policies toward nonmembers. common market = eliminate barriers that inhibit the movement of factors of productioneconomic union= coordinate economic policies political union = the complete political as well as economic integration of two or more countries

67. environmental influences on pricing: Currency fluctuationsInflationary environmentGovernment controls, subsidies, regulationsCompetitive behaviorSourcing

19. Eurocurrency market: currency on deposit outside in banks worldwide

26. example of a grey market: RCA in Canada

68. examples of government regulations, controls and subsidies: Dumping legislationResale price maintenance legislationPrice ceilingsGeneral reviews of price levels

47. exceptions to mfn: developing countries and regional arrangements

78. exporter strategies when there is a weak or strong currency position: Go naked Buy currency forwardBuy currency futureBuy currency optionAcquire offsetting asset

101. factors encouraging standardization and adaptation: FACTORS ENCOURAGING STANDARDIZATIONEconomies of scale in productionEconomies in product R&DEconomies in marketing"Shrinking" of the world marketplace/economic integrationGlobal competitionsFACTORS ENCOURAGING ADAPTATIONDiffering use conditionsGovernment and regulatory influencesDiffering consumer behavior patternsLocal competitionTrue to the marketing concept

1. foreign exchange: a commodity that consists of currencies issued by countries other than one's own

82. foreign market analysis: Assess alternative marketsEvaluate the respective costs, benefits, and risks of entering eachSelect those that hold the most potential for entry or expansion

85. forms of exporting?: Indirect exportsDirect exportsIntracorperate transfers

64. forms of target costing: Cost based pricingFull absorption methodRigid cost-plus pricingFlexible cost plus pricing.

53. fortress Europe: A large movement to have one immigration policy across the Europe Union

9. Forward discount: Depreciation

7. forward market: Consists of foreign exchange transactions that are to occur sometime in the future

8. Forward premium: Appreciation

27. free and fair trade: Free trade implies that the national government exerts minimal influence on the exporting and importing decisionsof private firms and individualsFair trade suggests that the national government should ensure exports receive an equitable share of foreign markets and that imports arecontrolled to minimize losses of jobs and market share

45. GATT: Developed as part of the Havana, Cuba, conference in 1947Provided forum for trade ministers to discuss barriers to international trade, goal was to promote a free and competitive internationaltrading environment benefiting efficient producers by sponsoring multilateral negotiations to reduce tariffs, quotas, and other nontariffbarriers

71. gray market issues: Dilution of exclusivityFree riding Damage to channel relationshipsUndermining segmented pricing schemes

99. Greenfield strategy: Best siteModern facilitiesEconomic development incentivesClean slate

25. grey market: Buying/selling a products legally, but through unauthorized channels of distribution

11. hard and soft currency: Hard currency is easily convertible anywhere in the worldSoft currency is not easily exchangeable

18. how international banks establish themselves overseas: subsidiary bank- separately incorporated from the parentbranch bank- not separately incorporatedaffiliated bank- overseas operation with part ownership in conjunction with a local or foreign partner.

76. incoterms: Ex-works—seller places goods at the disposal of the buyer at the time specified in the contract; buyer takes delivery at thepremises of the seller and bears all risks and expenses from that point onDelivery duty paid—seller agrees to deliver the goods to the buyer at the place he or she names in the country of import with all costs,including duties, paidFAS (free alongside ship) named port of destination—seller places goods alongside the vessel or other mode of transport and pays allcharges up to that pointFOB (free on board)—seller's responsibility does not end until goods have actually been placed aboard shipCIF (cost, insurance, freight) named port of destination—risk of loss or damage of goods is transferred to buyer once goods have passed theship's railCFR (cost and freight)—seller is not responsible at any point outside of factory

5. Indirect quote: Price of the home currency in terms of the foreign currency

28. industry level arguments: National defenseInfant industryMaintenance of existing jobsStrategic trade

31. Industry policy: The national government identifies key domestic industries critical to the country's future economic growth and thenformulates programs that promote their competitiveness

20. international bond market: Major source of debt financing for governments, International organizations, and Larger firms

92. international franchising: the franchisee, to operate a business under the name of another, called the franchisor, in return for a fee.Basic Issues:Does a differential advantage exist in the domestic market?Are these success factors transferable to foreign locations?Has franchising been a successful domestic strategy?

90. international licensing: Licensing is when a firm, called the licensor, leases the right to use its intellectual property to another firm,called the licensee, in return for a feeBasic IssuesSet the boundaries of the agreementEstablish compensation ratesAgree on the rights, privileges, and constraints conveyed in the agreementSpecify the duration of the agreement

97. international management contract,: an agreement whereby one firm provides managerial assistance, technical expertise, orspecialized services to a second firm for some agreed-upon time in return for monetary compensation

39. international trade barriers: TariffsQuantitative restrictionsNon-tariff barriers

87. intracorporate transfer: The sale of goods by a firm in one country to an affiliated firm in another

33. Jones Act: 1920 Act, the United States restricts foreign ships from providing transportation services between U.S. ports. This restriction issupported by owners of U.S. oceangoing vessels, but, the Jones Act is also estimated to increase the transportation costs that consumers payand had unintended consequences

115. levels of exporter involvement in international sales: Indirect exportsDirect exportsIntegrated exports

10. major currencies involved in the foreign exchange: USDEUROJAPANESE YENPOUND STERLINGAUSTRALIAN DOLLARCANADIAN DOLLAR

13. major foreign exchange clients for the banks: Commercial customersSpeculatorsArbitrageurs

52. major regional trade associations: AFTAANCOM APEC CACMCARICOM CEMAC CER ECOWAS EU EFTA GCC MERCOSUR NAFTA SADC

17. major world banks: ING GroupFortisCitigroupDexia GroupHSBC HoldingBNP ParibasCredit AgricoleDeutsche BankBank of America Corp.HBOS

106. marketing communications: The Marketing Communication ProcessBe sure to note the field of reference (The culture/context of the receiver)Sender (encodes message) -> Message -> Message Channel -> Receiver (Decodes Message) -> Communication Outcome -> Feedback -------><<------NOISE ----->> NoiseAnything that stops the message from being receivedPolitical affiliation etc.

103. method of operation, quality of service, packaging and appearance and method of operation/usage: Product Constituentsand BrandingCare must be taken that the brand in name, symbol, sign, or design does not offend the local customer. Trademarks are especiallyvulnerable to counterfeiters.Selecting the global brand nameTranslationTransliterationTransparencyTransculturePackaging and AppearancePackaging serves three major functions:ProtectionImproper handling and pilferagePromotionLanguage and symbolsUser conveniencePackaging aesthetics- color and shape, overall size, and purchase quantityAdaptations in styling, color, size, and other appearance features play an importance role in how a consumer perceives a product.Method of Operation or UsageThe product that is operable in in the domestic market may not be operable in the foreign market.Electrical voltages and connectors vary around the world. English and metric standards are not comparable.Software may have to be translated into the local language.Quality and ServiceQuality is essential to marketing products internationally, especially in markets where price is an important competitive factor.ISO compliance may be required by buyers.Servicing products in international markets requires producers to develop local repair staffs.

75. methods for combating price escalation: use flexible cost-plus pricing

84. modes of entry: ExportingIndirect exportsDirect exportsIntracorperate transfersInternational LicensingSpecialized ModesContract manufacturingManagement contractsTurnkey projectsForeign Direct InvestmentGreenfield strategyAcquisition strategyJoint venture

46. most favored nation principle: any preferential treatment granted to one country must be extended to all countries

29. national trade policies: Country must be self-sufficient in critical raw materials, machinery, and technology or else be vulnerable toforeign threats

108. negotiating internationally: Team assistanceTraditions and customsLanguage capabilityDetermination of authority limitsPatienceNegotiation ethicsSilencePersistenceHolistic viewThe meaning of agreements

77. negotiating terms of payment: Which currency to use for the transactionWhen and how to check creditWhich form of payment to useHow to arrange financing

107. negotiations process: The offerassess each parties' needs and commitmentInformal meetingstrust-building among deal makersStrategy formulationreview and assess factors to be negotiatedNegotiationsform, informal, short or longImplementation

37. nontariff barriers: Any policy that has the effect of impeding international trade

22. offshore banking centers and locations: Focus on offering banking and other financial services to nonresident customersLocated in Bahamas, Bahrain, the Cayman Islands, Bermuda, the Netherlands Antilles, Singapore, Luxembourg, Switzerland

59. penetration pricing: Charging a low price in order to penetrate market quicklyAppropriate to saturate market prior to imitation by competitors

81. Porter's generic Strategies: Cost leadership and Market Differentiation

72. price fixing vs. transfer pricing: Price fixingRepresentatives of two or more companies secretly set similar prices for their productsHorizontal price fixing Vertical price fixing Transfer PricingPricing of goods, services, and intangible property bought and sold by operating units or divisions of a company doing business with anaffiliate in another jurisdictionIntra-corporate exchangesCost-based transfer pricingMarket-based transfer pricingNegotiated transfer pricing

60. price skimming: Charging a premium priceMay occur at the introduction stage of product life cycle

58. pricing objectives-: Unit salesMarket shareReturn on investment

69. pricing strategy: If competitors do not adjust their prices in response to rising costs, it is difficult to adjust your pricing to maintainoperating marginsIf competitors are manufacturing or sourcing in a lower-cost country, it may be necessary to cut prices to stay competitive.Using Sourcing as a Strategic Pricing ToolMarketers of domestically manufactured finished products may move to offshore sourcing of certain components to keep costs down andprices competitive

56. pricing vs. marketing mix: Most flexible of the four Ps

102. product decisions affected by the decision to standardize or adapt: The fundamental international product decision after thedecision to internationalize.International market approach alternatives to adaptation.Sell the product as it is internationally.Modify product for different countries or regions.Design new products for foreign markets.Incorporate all differences into one product and introduce it globally.

40. promoting international trade: Subsidies to local companiesForeign trade zonesExport financingExport promotion

32. Public choice analysis: Special interest groups are willing to work harder for the passage of laws favorable to their interests than thegeneral public is willing to work for the defeat of laws unfavorable to its interests

111. pull strategies: Depend on mass communications (advertising of consumer-oriented goods) to reach target audiences over longdistribution channels.

74. purchase and pricing factors: Price floorPrice ceilingOptimum prices: function of demand

110. push strategies: Focus on personal selling, considered essential in international marketing of industrial goods.

38. quantitative trade barriers: barriers to trade in the form of numerical limits on the amount of a good it will export

113. reasons for trade show participation and reasons not to participate: Reasons for participationCustomer can examine the product.Goodwill and contact cultivation.Locating a trade intermediary.Opportunity to meet government officials and decision makers.Opportunity for market research and collecting competitive intelligence.Exporters able to reach sales prospects in brief time period at reasonable cost per contact.Reasons for not participatingHigh cost.Identifying the "right" trade shows to participate in.Coordination.

12. role of the bank in the foreign exchange process: Work between central banks and individual consumers and charge fee forconverting currencies

57. Setting prices internationally: Whether or not it should be a different price than domestically, cost-plus etc

79. sources of export financing: Export import bankPayment in advanceOpen accountDocumentary collectionLetter of creditCredit cardCountertrade

94. specialized entry modes: Contract ManufacturingManagement ContractTurnkey Project

6. spot market: Consists of foreign transactions that can be consummated immediately

3. supply for Yen: derived from Japanese demand for foreign products

62. target costing process: Cost-based pricing is based on an analysis of internal and external cost

34. tariffs: tax placed on a good that is traded internationally to raise revenues for national governments or act as a barrier to trade

16. three point arbitrage: Step 1: Convert £1 into $2.Step 2: Convert the $2 into ¥240.Step 3: Convert the ¥240 into £1.2.

70. three pricing policy options: Ethnocentric/ExtensionPer-unit price of an item is the same no matter where in the world the buyer is locatedImporter must absorb freight and import dutiesPolycentric/AdaptionPermits affiliate managers or independent distributors to establish price as they feel is most desirableSensitive to market conditions but creates potential for gray marketingGeocentricRecognized that several factors are relevant to pricing decisionLocal costsIncome levelsCompetitionLocal marketing strategy

36. three types of import tariffs: An ad valorem tariff is assessed as a percentage of the market value of the imported goodA specific tariff is assessed as a specific dollar amount per unit of weight or other standard measureA compound tariff has both an ad valorem component and a specific component

21. Two types of bonds: Foreign bonds and Eurobonds

35. two types of tariffs: Export and import

89. types of export intermediaries: Management CompanyWebb-Pomerene AssociationInternational Trading CompanyOther Intermediaries

42. Types of unfair trade: Government subsidiesUnfair pricing practices

65. various terms of the sale: Obtain export license if requiredObtain currency permitPack goods for exportTransport goods to place of departurePrepare a land bill of ladingComplete necessary customs export papersPrepare customs or consular invoicesArrange for ocean freight and preparationObtain marine insurance and certificate of the policy

48. WTO: Promote trade flows by encouraging nations to adopt nondiscriminatory, predictable trade policiesReduce remaining trade barriers through multilateral negotiationsEstablish impartial procedures for resolving trade disputes among members

49. WTO and GATT: GATT focused on promoting trade in goods; WTO's mandate includes: trade in goods trade in services international intellectual property protectiontrade-related investmentWTO's enforcement powers are stronger

50. WTO enforcement: WTO panel evaluates complaints and if found in violation, the country may be asked to eliminate the trade barrier