A trend towards greater economical, cultural, political and technological interdependence.
What happens when denationalization occurs?
National boundaries become less important.
What is the difference between denationalization and internationalization?
The nature of interdependent relations. Denationalization = outgrowing national borders. They cooperate for their well being. Internationalization = source of interdependence comes from pressure.
What is meant by the Globalization of Markets?
The convergence of buyer preferences, emergences of global producers, new market opportunities.
Globalization of Markets helps in…
Marketing and Production
What is the Globalization of Production?
Producing at locations where it is low cost of quality maximizing. (Access to low cost workers, access expertise)
Globalization of production efficiency lowers…
Costs of production
Name 3 factors causing Globalization.
(1) Falling barriers to investment and trade
(2) Technological innovations
(3) Increase in Global Competition
What is the WTO?
A contract between member nations to maintain fair and open trade policies.
What are the 3 goals of the WTO?
(1) Help free flow of trade
(2) Help negotiate further opening of markets
(3) Settle trade disputes between members
Name 4 impacts of technology innovation
(1) Accelerate Data
(2) Accelerate Good
Globalization impacts countries through….(5)
(1) Jobs and Wages
(2) Income inequality
(3) Labor and environment
(4) National sovereignty
3 points to support “Globalization costs Jobs and lowers wages”
(1) Eliminates Jobs in developed nations
(2) Wages lower in developed nations
(3) Exploits workers in developing nations
3 points to support “Globalization creates jobs and boosts wages”
(1) Increases wealth and efficiency
(2) Generates labor market flexibility
(3) Creates jobs in developing nations
Name 3 types of inequality as an effect of Globalization.
(1) Inequality within nations
(2) between nations
(3) Global inequality
Name 2 key players in International Business
International corporations, entrepreneurs and small businesses
Multinational corporations are important in Globalization because…
They employ many people
Entrepreneurs are important in Globalization because…
They are more active in international business (because of technology)
What is culture?
Backgrounds, assumptions, expectation, ways of communication, values beliefs, rules.
The belief that one’s culture is superior to anothers.
Define Cultural Literacy.
Knowledge and understanding of anothers culture which helps improve collaborative work.
What is National Culture?
Mostly linked to national territory. Governments try to promote this.
What is subculture?
Groups of people who share unique ways of life within a larger, dominant culture. Sometimes exists across national borders.
Set of values, beliefs, rules and institutions help by a specific group of people.
What are 4 aspects in creating a Global-Mind-Set?
(1) Cultural Adaptibility
(2) Bridging the gap
(3)Building global mentaility
Name 5 aspects of culture to consider when launching a product.
(2) Social structure
(3) Values and attitudes
(4) Manners and customs
(5) Physical environments
Name 2 components of Aesthetics.
Symbols and colours, and wording.
Name 3 types of attitudes towards…….that can affect business (cultural aspects)
(3) Cultural change
Manners are appropriate ways of behaving, speaking, dressing.
Customs are habits or ways of behaving which are passed down through generations.
Name 3 important elements that differ across cultures. (Social ____(1,2,3)_____.
Social Group, Social Status, Social Mobility.
Name 2 types of communication that can be misinterpreted
(1) Spoken language
(2) Body Language
Name 6 aspects of the Kluckhohn-Strodtbeck Framework.
(1) Relation to Nature
(2) Material or spiritual
(3) Time orientation
(4) Responsibility to others
(5) Trust and Control
(6) VIew of personal space
Name the 4 points of examining culture for the Hofstede Framework.
(1) Individualism vs. Collectivism
(2) Power Distance
(3) Uncertainty avoidance
(4) Achievement vs. Nurturing
Define Political Systems
Structure, Processes, and Activities by which a nation governs itself.
What are the extreme right, middle and left political ideologies?
How are leaders selected in a Democracy?
Elected by people or by representatives.
Name 4 Freedoms that should be provided with Democracy.
(2) Periodic Elections
(3) Minority Rights
(4) Property Rights
How are leaders chosen in a Totalitarian System?
Not by the people.
What are 3 features of a Totalitarian government?
(1) Imposed authority
(2) Lack of constitutional guarantees
(3) Restricted participation
Name 3 types of secular Totalitarian Systems?
Communist, Tribal, Right-Wing
What is the difference between Communism and Socialism?
Communism: Social and economic equality for all.
Socialism: Government owns and controls all types of economic activity. Ownerships of Factors of Production and government decides what to produce.
What is considered as Political Risk?
The likelihood that a government or society will undergo political change that negatively affects business.
List 5 examples of Political Risk.
(1) Corrupt/Poor political leadership
(2) Frequent changes in the form of government
(3) Unstable political system
(4) Conflict among race, religion
(5) Poor relations with other countries
Name 5 events that can cause political risk.
(3) Property Seizure
(4) Policy Change
(5) Local Content Requirements
List 3 methods to help manage political risk for a business.
(2) Information Gathering
(3) Influencing Local parties.
List 5 ways for a company to completely adapt to political risk?
(2) Development assistance
(5) Local Equity and debt
What is a legal system?
Consists of laws and regulations, processes by which those are enforced.
What are legal systems influenced by?
Cultural variables like religion, social structure.
Name 3 types of legal systems.
(1) Common Law
(2) Civil Law
(3) Theocratic Law
What is Common Law based on?
What is Civil Law based on?
What is Theocratic Law based on?
What are 5 global legal and ethical ways to help protect businesses?
(2) Intellectual Property
(3) Product safety and liability
(5) Antitrust Policies
What can legal differences cause for businesses?
Problems in ethical issues.
What is ethical behavior?
A personal behavior in accordance with rules and standards for high conduct and morality.
What is Social Responsibility?
The practice of going beyond legal obligation as a company.
Give 5 examples of social responsibility.
(1) Respect for CONSUMER rights
(2) Guard WORKERS rights
(3) Protect the ENVIRONMENT
(4) Improve HEALTH
(5) Support EDUCATION
Name 3 Economic Systems
(1) Market Economy
(2) Mixed Economy
(3) Centrally Planned Economy
What are the features of a centrally planned economy?
Factors of production owned by the government.
Name 3 reasons why Centrally planned economy is declining? (It fails to…)
(1) Create economic Value
(2) Achieve rapid growth
(3) Satisfy consumer needs
Who owns factors of production in a mixed economy?
Equal split between private sector and the government.
Name 2 problems with Mixed economy.
(1) Government control results in lack of responsibility, accountability, rising costs…
(2) Move towards privatization to increase efficiency and productivity.
Who owns factors of production in a market economy?
Privately owned firms.
What is the governments role in a market economy? (4)
(1) Enforcing Antitrust Law
(2) Political Stability
(3) Protecting Property rights
(4) Fiscal and Monetary policy
High economic development reflects…
High economic well-being
How do you measure economic well-being?
output, infrastructure, health, education.
Name 2 key economical figures.
GDP and GNP
What are 4 different classifications of countries in development?
Name 3 characteristics of developed countries.
High quality of life
Describe characteristics of newly industrialized countries.
Increased national production and exports from industrial operations.
Characteristics of emerging markets…
Those with the the potential to be newly industrialized.
Characteristics of developing countries
Extremely low personal income (Low GDP/Capita)
Define economic transition.
The process of changing a nation’s economic fundamentals.
What are 4 obstacles in economic transition?
(1) Lack of managerial expertise
(2) shortage of capital
(3) Cultural differences
(4) Economic degregation
Define International trade
The purchase, sale, exchange of goods/services across national borders.
What is Mercantilism?
What is absolute advantage
Advantage in efficiency in producing a good over another country.
What are 3 assumptions of absolute advantage?
(1) 2 Countries
(2) 2 products
(3) No transportation costs.
What is Comparative Advantage?
When costs are lower for one country to produce a good than another country.
4 Assumptions of Comparative Advantage?
(1) 2 Countries
(2) 2 products
(3) No transportation costs.
(4) Companies are driven by maximization of production and consumption.
What is the Factor Proportions theory?
The cost of any resource is simply the result of Supply and demand.
Why is the Factor Proportions theory different from other theories?
Countries producing and exporting goods use cheapest factors of production, not the most efficient.
What is the Leontief Paradox?
Says that the proportions theory is not empirically valid.
What is national competitive advantage the cause of?
Why certain countries are leaders for certain products.
What are 5 aspects of National Competitive Advantage?
(1) Factor conditions
(2) Demand conditions
(3) Related and supporting industries
(4) FIrm strategy, structure, rivalry
(5) Government and chance
Define Free Trade
The Pattern of imports and exports that could result in the absence of trade barriers.
What are 3 types of motives for governments to intervene in trade?
Political, Economic, Cultural
What are some political motives for governments to intervene in trade?
Preserve National Security
Respond to unfair trade
Gain influence over smaller nations
What are some economical motives for governments to intervene in trade?
Protect infant industries
Pursue strategic trade policy
What are some Cultural motives for governments to intervene in trade?
Harmful to unique culture
Preservation of Language (France)
Name 4 methods governments can use to promote trade.
(2) Export Financing
(3) Foreign Trade Zones (FTZ)
(4) Special gov’t agencies
What are 6 methods governments can use to restrict trade?
(4) Local content requirements
(5) Admin. Delays
(6) Currency controls
What is the GATT?
A treaty to promote trade by reducing barriers to international trade.
What does GATT stand for?
General Agreement on Tariffs and Trade
What is a Golden Share?
A share that gives the shareholders veto power over any changes in the company charter.
Purchase of Foreign Assets (>10%) of ownership of another company to gain some measurement of control.
What is portfolio Investment?
It does not involve obtaining any degree of control in a company.
What are 4 possible motives of wanting to form alliances?
(1) Minimizes risks
(2) R & D
(3) New markets
(4) Increase global compeitiveness
List 3 reasons for FDI Growth?
(1) Increased globalization
(2) International Mergers and acquisitions
(3) Entrepreneurship’s and small firms.
Which place holds 40% of global GDP?
Explain the international product life cycle in terms of FDI.
Company begins by exporting its product and later undertakes FDI as the product moves through its life cycle.
Explanations for FDI Market Imperfections (Internalization)
Company undertakes FDI to internalize transactions that are being made inefficient by a market imperfection.
(1) Trade barriers
(2) Specialized Knowledge
What is the Eclectic Theory?
A firm undertakes FDI when location, ownership and internalization advantage combine to make location appealing.
Greater market power = Greater….
Define vertical integration.
Extends company’s activities into stages of production that provides it inputs or absorb its outputs.
What are 6 management issues with FDI?
(2) Production Costs
(3) Following Clients
(4) Following Rivals
(5) Customer Knowledge
(6) Purchase-or-Build decision
Define Balance of Payments
A national accounting system that records all payments to entities in other countries and all receipts coming into the nation.
Define Current account.
Records transactions involving import and export of goods & services, income receipts on assets abroad and income payments on foreign assets inside the country.
Define Capital Account
Records transactions involving the purchase or sales of assets abroad.
3 reasons why host countries intervene in FDI for balance of payments.
(1) Initial FDI boosts economy
(2) FDI may decrease import demand
(3) FDI may generate exports
Why hosts encourage FDI? (3)
Access to knowledge
Access to management skills
Why is FDI bad for the home country? (3)
Can eliminate an export market
Might eliminate domestic jobs
2 benefits of FDI for home countries…
May improve national competitiveness
Can offshore “sunset” industries
Name 2 main ways for host countries to encourage FDI?
What are 2 main ways for host countries to restrict FDI?
What are 4 methods for home countries to promote FDI?
Insurance on assets abroad
What are 2 ways for home countries to restrict FDI?
Higher tax rates on foreign income
Sanctions on specific nations
Define Regional Economic Integration
Process where countries of a region cooperate with one another to reduce or eliminate barriers to the international flow of products, people, or capital.
What is the goal of economic integration?
To increase gross border trade and investment as well as living standard.
What are the 5 degrees of integration?
1. Political Union
3. Common Market
4. Customs Union
5. Free-trade area
Describe Customs Union a a level of regional integration.
Establish common trade policy against non-members.
Explain common market as a level of integration.
Movement of labour and capital between members.
3 Benefits of economic integration.
(1) Trade creation
(2) Political cooperation
(3) Economic power
Drawbacks of Regional Integration (3)
(1) Trade diversion
(2) Shift in Employment
(3) Loss of national sovereignty
How many EU members are there?
What does EFTA stand for?
European Free Trade Agreement.
NAFTA stand for?
North American Free Trade Agreement.
Number of NAFTA members?
Andean community consists of 5 members… who are….
5. South American Countries
What does FTAA stand for
Free Trade Area of the Americas
What is TEP?
A partnership between the USA and EU.
What does TEP stand for?
Transatlantic Economic Partnership
Name 2 integration trade organizations in Asia.
ASEAN – Association of South-East Asian Nations
APEC – Asia Pacific Economic Cooperation
GCC stands for….
Gulf Cooperation Council
Why are financial markets important?
They are an essential element of the international business environment
Why is it important to understand financial markets?
To understand how exchange rates affect business
International capital market.
What is a Capital Market?
A system of allocating financial resources in form of debts and equity.
What do Capital Markets do?
Borrow or invest money such as individuals, companies, governments, pension funds…
2 purposes of national capital markets.
1. external financing
2. types of banks (commercial & investment)
What are the purposes of international capital markets?
1. Invest and borrow across national borders
2. Expand money supply for borrowers
3. Reduce cost of money for borrowers
4. Reduce risk for lenders.
Name 3 forces that are expanding the international capital market.
1. Info technology
3. Financial Instruments
Name the top 4 most important financial centers
Define International Bond Market
Bonds sold by issuing entities outside their own country.
What are Eurobonds?
Bonds issued outside the country, another currency.
What are foreign bonds?
Bonds sold outside the country but in the currency of country in which is sold.
What does the international equity market consist of?
All stocks bought & sold outside the issuers home country.
What is a euro currency?
A currency that is deposited outside of its origin. Yen deposited in USA.
Name 4 functions of the exchange market.
2. currency hedging
3. currency arbitrage
4. currency speculation
Define quoted currency.
Currency with which another currency is to be purchased
Define Base currency.
Currency that is to be purchased with another
Define spot rates
Exchange rates that require delivery within 2 days
Forward rates definition
Exchange rate at which 2 parties agree to exchange currencies on a specific future date.
Define Forward Market:
Markets for currency transaction at forward rates.
Define Forward Contracts
Agreement about amount of currency on a specific date at a specific exchange rate
Define Forward exchange rate
Can be higher or lower than spot rate
Simultaneous purchase and sale of foreign exchange for 2 different rates
Right or option to exchange a specific amount of a currency on a specific date at a specific time.
Currency Future Contracts
A contract requiring the exchange of a specific amount of a currency on a specific date at a specific rate
Exchange rates affect _____ & ______ business.
International and Domestic
Exchange rates affect 2 things…
1. Demand for company’s products
2. Amount of profit a company earns from international subsidiaries in home currency
2 Reasons why companies derive a stable and predictable exchange rate.
1. Stability can improve financial planning
2. Predictable rates reduce the change of surprising changes and reduce need for insurance
Law of one price
An identical product must have an identical prive in all countries when the price is expressed in a common currency
What is the Big Mac Index?
Uses the law of one price to determine the exchange rate that should exist between the USA and other countries
Define Purchasing Power Parity (PPP)
Measures the ability of 2 countries currencies to buy the same basket of goods
What causes inflation? (2)
Demand and Supply of money – interest rates
Why do exchange rate adjust to inflation?
To maintain PPP between nations.
Nominal interest rates include…
are adjusted for inflation
2 reasons why PPP fails to predict exchange rates…
1. forgotten added costs (transp. costs)
2. forgotten trade barriers
Name 2 types of techniques used to forecast exchange rates.
1. Fundamental Analysis
2. Technical Analysis
Mission statement vs. Vision statement
Mission – What the company does now
Vision – What it hopes to do in the future
Define Mission Statement
A general declaration of the purpose of the organization and the very long term objective that its leader wants to achieve.
3 stages of international strategy
1. Identify Company Mission and goals
2. Identify Core competency
3. Formulate stategies
When forming a strategy a company should do ___(3)____ analysis.
Name the 2 international strategies
Multinational and Global
4 Options for corporate level strategy
3 Strategies for business
Low cost leadership
Focus (narrow market)
2 Strategies for department level
Name 3 international organizational structures
4 types of organizational structure
3 ways to enter a new market
Export, import, countrtrade
3 reasons to export
1. expand sales
2. diversify sales
3. gain experience
4 steps in developing an export strategy
1. Identify potential market
2. Match needs and abilities
3. Initiate Meetings
4. Commit Resources
What is Direct Export?
Sell directly abroad to consumer or sales rep. or distributors
What is indirect export?
Sell to intermediary who then sells abroad…
Reasons for countertrade (2)
1. Lack of hard currency
2. Restricted currency conversion
4 Types of countertrade
2. Counter purchase
Risks for importer
Risk of non-shipment
Risks for Exporter
Risk of non-payment
4 ways to reduce import/export risks…
1. Advanced payment
2. Documentary collection
3. letter of credit
4. Open account
Name 2 contractual entry modes
Facts of Licensing
Licensor grants licensee right to use property for production
– patents, copyrights
– compensation: royalty payments
– could be a future competitor
Facts of Franchising
Supplied with intangible assets
– brandname, trademark
– compensation: flatfee, royalty payments
– low risk
Name 3 Investment Entry Modes
2. Owned Subsidiaries
3. Direct investment in plant and equipment
5 strategic factors in selecting entry modes
1. culture environment
2. political, legal environment
3. market size
4. prod and shipping costs
5. international experience
3 Global product strategies
1. product extension
2. product adaptation
3. develop new product
What can you adapt if you want to adapt your product?
Tangible and intangible
4 reasons to standardize products when going international
2. Production costs
3. Lower marketing costs
4. Allows central control of marketing
4 reasons to adapt a product when going international
1. Diff lang. and culture
2. diff consumer preferences
3. maximize profits
4. laws and regulations
3 Promotional strategies
Physical flow from original to destination
2 things to consider when designing distribution channels
1. degree of exposure
2. channel length and costs
2 Distribution problems
Lack of market understanding
Theft and corruption
2 Pricing strategies
1. world wide price
2. dual pricing
Name 5 deficits of legal rules/framework
1. Deficit of control
2. Time lag
3. Deficit of enforcement
5. Moral function
Firms have responsibilities to society including economic, legal and philanthropic
What is social contract?
A tacit social contract between a firm and society
Stake holder theory (ethics)
It is in the company’s strategic interest to respect the interests of its stakeholders
4 Key issues in CSR
1. Labour rights
2. Environment conditions
3. Human rights
4. Poverty Alleviation
3 key drivers of CSR around the world
– NGO activism
– Responsible investment
– Government and IGO
4 Key drivers of CSR in developing countries
1. foreign countries
2. domestic countries
Drivers in NGO activism
internet, meia, low cost of travel
4 key drivers of responsible investment
– size (big)
– rules of CSR
– shareholder activism
– influence corporate reporting and disclosure requirements
5 principles of responsible investment
1. incorporate ESG
2. be active owners
3. seek appropriate disclosure
4. promote acceptance and implementation
5. work to enhance effectiveness
7 things investors look for
1. respect human rights
2. good corporate governance
3. transparencies on social practices
4. environmental policy
5. quality of consumer relations
6. work conditions
7. training policy for employees
What must enterprises do because of CSR? (3)
1. new social and product liability patterns
2. development of code of conflict
3. expand sphere of influence
How do companies address environmental and legal compliance issues?
8 principles of social responsibility
1. ethical behavior
2. respect for law
3. respect for international norms
4. respect for shareholders
7. human rights
8. precautionary approach
What are the 4 categories of the BCG matrix?
Describe the market share and what kind of industry a cow has.
Large market share.
Slow growing industry
Describe a stars market share.
Large market share
Fast growing industry
Describe a Qmark’s market share and industry.
Small market share
Fast growing industry
Describe a dog’s market share and industry.
Small market share
The BCG Matrix helps businesses decide how to
Name the 3 Cs in the Thornton leadership model
What is value chain analysis
A systematic approach in examining the development of competitive advantage
Name 5 primary activities in the value chain analysis model
Marketing and Sales
Name 4 support activities in the Value chain analysis model
Human Resource Management
Name the 4 Ps in marketing mix
The 4 Ps of the marketing mix hep managers to
satisfy customers in a target market
What dos the product diffusion cycle help managers do
Group customers according to how quickly they adopt to anew product
What are the 5 types of groups in the product diffusion curve
What does SWOT analysis stand for
What is internal analysis in the SWOT analysis
A comprehensive evaluation of the internal strengths and weaknesses of a company
What is external analysis in the SWOT analysis
Analysis of customers, competitors, market trends, supplies,partners, technolog, economy,political,legal
What are the 4 different growth strategies in the Ansofts matrix
Market development in Ansotts matrix is
has limits-once approaches saturation another strategy must be pursues
Market development in Ansotts Matrix
the pursuit of market segments
development of new markets
more risky than penetration strategy
Product differentiation in Ansott’s
Strategy is appropriate if the firms strengths are related to specific customers than customers
the product more risky than mkt development
Diversification in the Ansott matrix
Requires product and market development
Usually suicidal unless high chance of high rate of return
Name the 4 mechanisms of Foreign entry modes
Define the marketing process
Identifying customer needs and bringing products that satisfy needs in the market
What are the 4 steps in the markting process
Marketing mix decisions
Implementation and control
From step 1 of the marketing process, define situation analysis
identifying needs and opportunities to satisfy those needs and understand its own capabilities and analise its external and internal environment
From the marketing process define step 2, marketing strategy
The strategic plan for pursuing the oportunity can be developed. it invloves market research and
-positioning the product
-value proposition to target market
Define step 3 of the marketing process, marketing mix decisions
Detailed tactical decisions that are nade for the controllable parameters of the marketing mix. including product development, pricing, promotional development, distribution contacs
Define implement and control(step 4 )
Implementation, monitoring and adaptation
What is break even analysis?
A technique widely used by production management and management accountants. It involves identifying fixed and variable costs to find break even point
Define fixed costs
Business costs that are not directly relate to the level o production or output
Define variable costs
Costs which vary directly with the level of output
Define direct variable costs
Those costs which can be attributable to the production of a particular product and allocated to a particular cost centre
Define indirect variable cost
Costs which cannot be directly attributable to production of a product
Define Concentration ratio
The percentage of market share owned by the largest firms int he industry
If CR is close to zero or less than 40%
this indicates an extremely competitive industry
If CR is more than 90
it indicates the market is a monopoly
What is the Herfindahl Hirschmann Index
HHI uses the market share of all firms in the industry. it provides a more complex picture than CR
What can the HHI be useful in evaluating
Mergers(used by US Justice)
What does HHI less than 1000 represent
a relatively unconcentrated market
What does a HHI between 1000 and 1800 represent
moderately concentrated market
What does HHI above 1800 represent
highly concentrated market
What is the Net Present Value? What does it measure?
NPV measure the net benefit of a project in todays dolar terms
What are the 2 financial concepts (n NPV) that evaluate a set of costs and benefits over time?
1. Net diff between all costs and benefits
2.Present value takes into account the time value of money
The 3 steps in calculating NPV?
1. Determine expected cash flows
2. Establish the discount rate for the project
3. estimate the present value of cash flows
What are the 4 main stages of the product life cycle?
What are the 4 business strategies that can be used to gain a competitive advantage?
1. Differentiation focs
Describe the differentiation strategy
Involves selecting one or more criteria used by buyers in a market then positioning the business uniquely to meet those criteria
Describe cost leadership strategy
Objective is to become the lowest cost producer in the industry
What are Porters 5 forces that determine industry attractiveness and industry profitability?
1. Threat of new entants
2,Threat of new substitutes
3. Bargaining power of buyers
4.INtensity of rivalry
Define market segmentation
The identification of portions of a market that aare different from one another. Segmentation allows the firm to better satisfy the needs of the customers.
What are the 4 requirements of market segmentation
Name 3 customer characteristics that consumer markets can be segmented into
What are 2 important factors to consider when making market selection
1. the attractiveness of the segment
2. the fit between the segment and the firms objectives, resources, and capabilities
Name 5 target market stategies
1. single segment strategy
2. selective specialization
3. product specialization
4. market specialization
5. full market coverage
Describe the single segment strategy
One market segment is served with one marketing choice (usually a choice a smaller firms with few resources)
Describe the selective specialization strategy
Different marketing mixes are offered to different segments. The product itself may or may not be different.
Describe the product specialization strategy
The firm specializaes in a particular product and tailors it to different market segments
Describe market specialization
The firm specializes in service a particular market segment and offers that segment an array of different products
Describe full market coverage strategy
The firm attempts to serve the entire market. Can be achieved by means of either a mass market strategy or by a differentiated strategy
Define premium pricing
Use a high price where there is a uniqueness about the product or service
Define penetration pricing
The price charged for products and services is set artificially low in order to gain market share.
Define economy pricing
No Frills Low price. The cost of marketing and manufacture are kept at a minimum
Define price skimming
Charge a high price because you have a substantial competitive advantage
Define Psychological Pricing
Customers respond to an emotional, rather than rational basis ($0.99)
Define Product line Pricing
Where there is a range of products or services the pricing reflects the benefits of parts of the range
Define Optimal Product Pricing
Companies will attempt to increase the amount customer spends once they start to buy
Define Product Bundle Pricing
Sellers combine several products in the same package
Define Promotional Pricing
Pricing to promote a product is a very common application (buy one get one free)
Name 4 key analyses/guidelines of market data and preparation that are needed for a good country profile
1. cultural analysis
2. economic analysis
3. market and competitor analysis
4. preliminary market plan
Name the 2 different types of exporting
Direct exporting has…(control?)
High, direct control,
Direct contact with consumer,
High investment needed
Indirect exporting has…(control?)
No contact with consumer,
Low investment needed
What does the PEST analysis stand for?
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