Chapter 7 Global Marketing o Globalization processes by which goods services capital and people information and ideas flow across national borders o Globalization of production offshoring manufacturers procurement of goods and services from around the globe to take advantage of national differences in the cost and quality of various factors of production o General Agreement on Tariffs and Trade GATT lower trade barriers one of the most important organizations o International Monetary Fund IMF original GATT included the founding of IMF o World Trade Organization WTO an establish institution based in Geneva Switzerland instead of simply an agreement Main function is to ensure that trade flows as smoothly predictably and freely as possible World Bank Group 0 dedicated to fighting poverty and improving the living standards of people in the developing world o Trade deficit country imports more goods than it exports o Trade surplus higher level of exports than imports o GDP defined as the market value of the goods and services produced by a country in a year o GNI GDP net income earned from investments abroad o Purchasing power parity PPP theory that states that if the exchange rates of two countries are in equilibrium a product purchased in one will cost the same in the other if express in the same currency o HDI composite metric of three indicators of the quality of line in different countries life expectancy at birth educational attainment and whether the average incomes according to PP estimates are sufficient to meet the basic needs of life in that country o Infrastructure basic facilities services and installations needed for a community or society to function such as transportation and communication systems water and power lines and public institutions o Tariff or duty tax levied on a good imported into a country o Dumping foreign producer sells its offering in a foreign market at a price less than its o Quota designates the maximum quantity of a product that may be brought into a o Boycott pertains to a groups refusal to deal commercially with some organization to production costs to gain market share country during a specified time period protest against its policies o Exchange control regulation of a country s currency exchange rate o Exchange rate the measure of how much one currency is worth in relation to another o Countertrade trade between two countries where goods are traded for other goods and not for hard currency o Trade agreements intergovernmental agreement designed to manage and promote trade activities for a specific region o Trading bloc costs of those countries that have assigned the particular trade agreement o Exporting producing goods in one country and selling them in another o Franchising contractual agreement between a firm the franchisor and another firm or individual the franchisee Allows the franchisee to operate a business using the name and business format developed and supported by the franchisor o Strategic alliances collaborative relationships between independent firms through the partnering firms do not create an equity partnership o Joint venture firm entering a new market pools its resources with those of a local firm to form a new company in which ownership control and profits are shared o Direct investment requires a firm to maintain 100 percent ownership of its plants operation facilities and offices in a foreign country often through the formation of wholly owned subsidiaries o Environmental Concerns amount of waste being generated o Global Labor issues working conditions and wages paid to factory workers in developing countries o Cultural imperialism belief that one s own culture is superior to that of other nations
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