Mkt 4443 Test 2

Front 1

The 3 criteria financial institutions such as ING & Morgan Stanley use to distinguish between emerging markets (EM) & developed markets (DM). To be characterized as a developed country:

Back 1

1. The country's income per capita has to exceed $10,000
2. The country has to follow a stable & responsible macroeconomic policy
3. The market capitalization of publicly traded companies & the volume of shares traded on the stock exchange have to be "sufficient."

Front 2

If one or more of the 3 criteria that financial institutions such as ING & Morgan Stanley use to categorize a country as a developed country is not met, then that country is considered a(n) ___.

Back 2

EM

Front 3

Countries such as ___ & ___ pass the income criterion that financial institutions such as ING & Morgan Stanley use categorize a country as a developed country, but nevertheless belong to EMs.

Back 3

Israel; South Korea

Front 4

composed from data on life expectancy, education, & per-capita GDP (as an indicator of standard of living) collected at the national level

Back 4

United Nations Human Development Index (UN HDI)

Front 5

5 aspects of the Main Street (business) view of EMs vs. DMs

Back 5

1. purchasing power parity (PPP)
2. total market size
3. growth
4. current customers
5. potential customers

Front 6

2 aspects of PPP in the Main Street (business) view of EMs vs. DMs

Back 6

1. GDP vs. PPP
2. Penn Effect

Front 7

An important aspect of current customers in the Main Street (business) view of EMs vs. DMs

Back 7

individual purchasing power

Front 8

2 important aspects of potential customers in the Main Street (business) view of EMs vs. DMs

Back 8

1. total market size
2. growth

Front 9

Why is classification between EMs & DMs important?

Back 9

Because of the rise of EMs

Front 10

A deep financial crisis & continuing high commodity prices have led to quickly deteriorating ___.

Back 10

global growth

Front 11

This country has medium growth & medium individual purchasing power.

Back 11

China

Front 12

This country has low growth & low individual purchasing power.

Back 12

Argentina

Front 13

This country has medium growth & high individual purchasing power.

Back 13

USA

Front 14

This country has low growth & medium individual purchasing power.

Back 14

Belgium

Front 15

4 bigger EMs

Back 15

1. Brazil
2. Russia
3. India
4. China

Front 16

3 smaller EMs

Back 16

1. Asia
2. Latin America
3. Middle East

Front 17

3 bigger DMs

Back 17

1. U.S.
2. Japan
3. Germany

Front 18

3 smaller DMs

Back 18

1. Canada
2. Australia
3. New Zealand

Front 19

3 ways that EMs are different from DMs

Back 19

1. cross sectional (heterogeneity)
2. Gini Index (individual consumers)
3. longitudinal (rapidly changing)

Front 20

3 aspects of urban vs. rural areas (business customers) in terms of cross sectional (heterogeneity) differences between DMs & EMs

Back 20

1. business concentrations
2. labor pools
3. infrastructure development

Front 21

- population: 1.332 billion
- PPP/capita: $6,000

Back 21

China

Front 22

- population: 1.168 billion
- PPP/capita: $2,800

Back 22

India

Front 23

- population: 127 million
- PPP/capita: $34,200

Back 23

Japan

Front 24

- population: 1.295 billion
- PPP/capita: $5,879

Back 24

India & Japan

Front 25

4 longitudinal (rapidly changing) aspects of how EMs are different from DMs

Back 25

1. economics
2. culture
3. politics
4. environments

Front 26

5 components of Goldman Sachs' Growth Environment Score

Back 26

1. macroeconomic stability
2. macroeconomic conditions
3. human capital
4. political conditions
5. technology

Front 27

4 Little Tigers/Dragons in Asia

Back 27

1. Hong Kong
2. Singapore
3. Taiwan
4. South Korea

Front 28

The 4 Little Tigers/Dragons' PPP is between ___ & ___.

Back 28

$30,000; $50,000

Front 29

The size of the 4 Little Tigers/Dragons is between ___ & ___.

Back 29

5 million; 45 million

Front 30

4 important countries in Southeast Asia

Back 30

1. Malaysia
2. Philippines
3. Indonesia
4. Vietnam

Front 31

2 regional trade agreements in Asia (a source of CSA)

Back 31

1. ASEAN
2. APEC

Front 32

established in 2010; China Free Trade Area

Back 32

Association of South East Nations (ASEAN)

Front 33

10 ASEAN members

Back 33

1. Brunei Darussalam
2. Cambodia
3. Indonesia
4. Laos
5. Malaysia
6. Myanmar
7. Philippines
8. Singapore
9. Thailand
10. Vietnam

Front 34

- 21 members/countries
- 2.6 billion people
- 57% of world GDP
- 45.8% of world trade

Back 34

Asia-Pacific Economic Cooperation (APEC)

Front 35

market summary:
- country demographics
- size: from Indonesia's 240 million people to Singapore's 4.5 million
- PPP: from Indonesia's $3K to Singapore's $50K
- political risks
- love-hate relationship with Japan: WWII vs. FDI
- nuclear crisis in DPRK (North Korea)
- environmental issues
- annual growth rates between 5% & 10%
- Vietnam's joining of WTO in 2006
- ethnic Chinese with economic leadership
- output from raw materials & apparel to technology products

Back 35

ASEAN

Front 36

size: 880 million (13% of world's population)
basic demographics:
- size: between 10 million & 76 million
- PPP: between $7,000 & $20,000
N-11:
- Turkey
Political risks:
- NATO vs. Russia
Environment issues:
- transition economy
- EU expansion
- solid education system
- multiple languages

Back 36

Central/Eastern Europe

Front 37

27 member countries as of 2008

Back 37

EU

Front 38

population: 557 million (9% of world's population)
basic demographics:
- size: between 15 million & 102 million
- PPP: between $8,000 & $14,000
N-11:
- Mexico
Political risks:
- growth fueled by regional trading blocs, a political shift toward increased democracy
- Latin America vs. North America
- expropriation still possible

Back 38

Latin America

Front 39

2 regional trade agreement in Latin America (source of CSA)

Back 39

1. NAFTA
2. MERCOSUR

Front 40

- regional trade agreement in Latin America
- between Mexico, U.S., & Canada

Back 40

NAFTA

Front 41

- regional trade agreement in Latin America
- Southern Cone Common Market
- between Argentina, Brazil, Paraguay, Uruguay, & Venezuela
- 220 million consumers, GDP of $1 trillion
- 2nd largest in America (after NAFTA)

Back 41

MERCOSUR

Front 42

Latin America has a ___ culture: large geographical area, Indian background with Spanish, Portuguese, & Catholic influences, varied ethnicities, monetary & price instability, political upheavals

Back 42

colonized

Front 43

Latin America's language is Spanish, except for Brazil's ___.

Back 43

Portuguese

Front 44

Latin America's total population is 537 million people, with ___ largest at 188 million followed by ___ at 102 million.

Back 44

Brazil; Mexico

Front 45

3 things Latin America's growth is fueled by

Back 45

1. regional trading blocs
2. political shift toward increased democracy
3. gradual emergence from a large debt burden in several of the countries

Front 46

In Latin America, ___ is surging.

Back 46

free trade

Front 47

In Latin America, there is a movement toward ___ marketing.

Back 47

pan-regional

Front 48

- Total population: 370 million (5% of world's population)
- Basic demographics:
- size: between 4 million & 76 million
- PPP: between $12,000 & $40,000
- N-11
- Iran, Egypt
- Rich in natural resources. As fuel becomes less, & demand from EMs increases, this is an important market to be in.
- Muslim influences
- Regional instability

Back 48

Middle East

Front 49

- Considered a CSA of the Middle East
- Includes UAE, Kuwait, Bahrain, Saudia Arabia, Oman, & Qatar

Back 49

Gulf Cooperation Council (GCC or CCASG)

Front 50

3 economical integrations of the Middle East

Back 50

1. customs union in 2003
2. common market in 2008
3. moving towards monetary union in 2010

Front 51

- high heterogeneity in individual purchasing power
- low heterogeneity in market size

Back 51

Middle East

Front 52

- high heterogeneity in individual purchasing power
- high heterogeneity in market size

Back 52

Asia

Front 53

- low heterogeneity in individual purchasing power
- low heterogeneity in market size

Back 53

Central/Eastern Europe

Front 54

- low heterogeneity in individual purchasing power
- high heterogeneity in market size

Back 54

Latin America

Front 55

Characteristics of the local culture of ___ include:
- primarily high context culture
- different regional influences
- religion
- colonization
- language

Back 55

smaller EMs

Front 56

- Some smaller EMs that are rich in ___ have had problems with its people suffering under authoritarian political regimes & colonial domination
- ex: Latin America, Middle East, South Africa

Back 56

natural raw materials

Front 57

- Some smaller EMs are rich in a ___ have turned to Western-style capitalism recently, with the help of FDI
- ex: Asian countries, Central/Eastern European countries, Israel

Back 57

skillful labor pool

Front 58

- membership in these makes countries in smaller EMs more attractive to foreign investors
- ex: Malaysia & Thailand through ASEAN
- enlarge market potential for members
- ex: Argentina & Brazil through MERCOSUR
- increase economy dependences & risk within trade regions

Back 58

trade blocs

Front 59

An example of economic instability in Asia was a ___ in Thailand in 1997.

Back 59

currency crisis (devaluation)

Front 60

An example of economic instability in Central/Eastern Europe was ___ in the early 1990s.

Back 60

consumer price inflation

Front 61

An example of economic instability in Latin America was a ___ in Mexico in 1994 & in Argentina in 1989 & 2002.

Back 61

currency crisis (devaluation)

Front 62

An example of economic instability in the Middle East is ___.

Back 62

political conflict

Front 63

The major global competitor for Latin America is ___.

Back 63

the United States

Front 64

The major global competitor for Asia is ___.

Back 64

Japan

Front 65

The major global competitors for Central/Eastern Europe are ___, ___, & ___.

Back 65

Germany; the UK; France

Front 66

The major global competitors for the Middle East are ___.

Back 66

everyone else

Front 67

2 implications on competitive strategy for smaller EMs

Back 67

1. major global competitors
2. some local competitors

Front 68

3 basic implications on segmentation in smaller EMs

Back 68

1. cultural
2. ethnic
3. religious roots

Front 69

5 other implications on segmentation in smaller EMs

Back 69

1. significant middle class
2. large metropolitan areas
3. poor rural areas
4. demographics, specifically age & marital status
5. pan-regional marketing via trading blocs

Front 70

Market:
- 0-14 years: 27%
- 15-64 years: 66.8%
- 65 years & over: 6.3%
Literacy rate (2004 estimates):
- male: 88.4%
- female: 88.8%
Industry (2008 estimates):
- agriculture: 5.5%
- industry: 28.5%
- services: 66%
Trade partners:
- exporting (2007 estimates): 16.1% to the U.S., 9.2% to Argentina, 6.8% to China, 5.6% to the Netherlands, 4.6% to Germany
- importing (2007 estimates): 15.7% from the U.S., 10.5% from China, 8.6% from Argentina, 7.2% from Germany, 4.4% from Nigeria
- largest Latin American country, population = 188 million
- PPP per capita = $8,400. The 10th largest economy in the world ($2.03 trillion), growing at 5.2% in 2008
- Gini Index = 59.7 (in 2004)
- Generates 1/3 of South America's economic output, & is a major consumer of its exports
- highly attractive to foreign investors
- 10% of exports are manufactured goods
- Portuguese, not Spanish

Back 70

Brazil

Front 71

2 natural resource CSAs of Brazil

Back 71

1. Companhia Vale do Rio Doce (CVRD)
2. Sadia & Perdigao

Front 72

- considered a natural resource CSA of Brazil
- low cost iron-ore reserves in which Shanghai Baosteel owned 50% of its Agua Limpa iron-mining complex as of 2001

Back 72

Companhia Vale do Rio Doce (CVRD)

Front 73

- considered a natural resource CSA of Brazil
- food processors, $2.2 billion & $1.8 billion respectively; sold in over 100 countries; nearly 1/2 its revenue is from foreign markets
- abundant production resources for pork, poultry, & grain which are complemented by ideal growing conditions for animal feed & by low labor costs

Back 73

Sadia & Perdigao

Front 74

- considered a manufacturing CSA of Brazil
- 4th largest aircraft maker in the world
- Boeing in the U.S. is largest, followed by Airbus in France, & Bombardier from Canada

Back 74

Embraer

Front 75

___ of Brazil's population is urban, while ___ is rural.

Back 75

80%; 20%

Front 76

In Brazil, ___ younger segments reside in urban areas.

Back 76

Western-oriented

Front 77

How many Federal Subjects does Russia have?

Back 77

83

Front 78

Market (2008 estimates):
- 0-14 years: 14.6%
- 15-64 years: 71.2%
- 65 years & over: 14.1%
Literacy rate (2002 census)
- male: 99.7%
- female: 99.2%
Industry (2007 estimates):
- agriculture: 10.2%
- industry: 27.4%
- service: 62.4%
Trade partners (2007 estimates)
- exporting: 12.2% to the Netherlands, 7.8% to Italy, 7.5% to Germany, 5.2% to Turkey, 5% to Belarus, 4.7% to the Ukraine, 4.5% to China
- imports: 13.3% from Germany, 12.2% from China, 6.7% from the Ukraine, 6.4% from Japan, 4.8% from the U.S., 4.4% from Belarus, 4.4% from South Korea, 4.3% from Italy
- population = 143 million
- PPP per capita = $12,100. The 9th largest economy in the world ($2.2 trillion), growing at 7% in the past 10 years
- Gini Index = 40 (as of 2002)
- a large geographical country surrounded by previous Soviet member states, now independent but still economically linked, including Belarus, Ukraine, & Kazakhstan

Back 78

Russia

Front 79

The economy of Russia & its role in the global economy is very dependent on its ___.

Back 79

hard currency oil export revenues

Front 80

Russia's population was 145 million in 2003, but is estimated to be decreasing by about ___ each year, which is unusual among countries.

Back 80

half a percent

Front 81

Russia as a market has great potential, but ___ makes it a difficult market to operate in.

Back 81

political uncertainty

Front 82

___ plays an important role in Russia's economic progress, but the government's policies have made it difficult to render.

Back 82

Assistance from international agencies

Front 83

In Russia, it is necessary to treat ___ & ___ political & legal forces as integral parts of the economic landscape & obstacles to exploiting the large market potential.

Back 83

centralizing; authoritarian

Front 84

In Russia, ___ at home can also be a problem area for the Western marketer.

Back 84

export controls

Front 85

In Russia, ___ influences people's attitudes towards the free market system.

Back 85

politics

Front 86

3 reasons why progress is slow in Russia despite an abundance of natural resources & a highly educated labor force

Back 86

1. corruption
2. mismanagement
3. centralization

Front 87

In Russia, development is skewed, prioritizing ___ over ___ & ___.

Back 87

heavy industry; consumer goods; agriculture

Front 88

In Russia, large disparities in ___ make people doubt democracy.

Back 88

income

Front 89

In Russia, the prospect of ___ membership in 2006 was questionable.

Back 89

WTO

Front 90

In Russia, the Ruble is devalued; a ___ economy is prevalent in some parts of the country.

Back 90

barter-style

Front 91

In Russia, there are internal political problems, including ___.

Back 91

terrorism

Front 92

In Russia, segmentation is based on ___.

Back 92

ethnicity

Front 93

When it comes to segmentation in Russia, ___ can be less important than ethnicity.

Back 93

national borders

Front 94

In Russia, there are ___ younger segments.

Back 94

Western-oriented

Front 95

5 segmentation categories in Russia

Back 95

1. Kuptsi (merchants)
2. Cossacks
3. Students
4. Business executives
5. "Russian souls"

Front 96

- 1 of the segmentation categories in Russia
- 30% men
- 45% women
- dominant traits include reliant, nationalistic, practical, & value seeking
- likely preferences include Volkswagen cars, Chesterfield cigarettes, & Stolichnaya liquor

Back 96

Kuptsi (merchants)

Front 97

- 1 of the segmentation categories in Russia
- 10% men
- 10% women
- dominant traits include ambitious, independent, nationalistic, & status seeking
- likely preferences include BMW cars, Dunhill cigarettes, & Remy Martin liquor

Back 97

Cossacks

Front 98

- 1 of the segmentation categories in Russia
- 10% of the men
- 5% of the women
- dominant traits include passive, scraping by, idealistic, & practical
- likely preferences include 2CV cars, Marlboro cigarettes, & local vodka in Smirnoff bottles

Back 98

Students

Front 99

- 1 of the segmentation categories in Russia
- 25% of the men
- 10% of the women
- dominant traits include ambitious, Western oriented, busy, & concerned with status
- likely preferences include Mercedes cars, Winston cigarettes, & Johnnie Walker liquor

Back 99

Business executives

Front 100

- 1 of the segmentation categories in Russia
- 25% of the men
- 30% of the women
- dominant traits include passive, follows others, fears choices, & hopeful
- likely preferences include Lada cars, Marlboro cigarettes, & Smirnoff liquor

Back 100

"Russian souls"

Front 101

Market (2008 estimates)
- 0-14 years: 31.5%
- 15-64 years: 63.3%
- 65 years & over: 5.2%
Literacy rate (2001 census)
- male: 73.4%
- female: 47.8%
Industry (2003 estimates)
- agriculture: 60%
- industry: 12%
- services: 28%
Trade partners (2007 estimates)
- exporting: 15% to U.S., 8.7% to China, 8.7% to UAE, 4.4% to UK
- importing: 10.6% from China, 7.8% from U.S., 4.4% from Germany, 4.4% from Singapore
- population = 1 billion. British colony until 1947
- PPP per capita = $3,700. The 4th largest economy in the world ($3.32 trillion), growing at 7%
- Gini Index = 32.5 (as of 2000)
- Religious & ethnic violence. High political risk, witih religious rifts & Pakistani problem
- 80.5% Hindu, 13.4% Muslim, 2.3% Christian, 1.9% Sikh, 1.8% other, .1% unspecified (as of 2001 census)

Back 101

India

Front 102

During the 1990s in India, socialist policies & government controls are gradually giving way to ___ & ___.

Back 102

privatization; free markets

Front 103

In India, there is an excellent educational system that was introduced by ___.

Back 103

the British

Front 104

In India, with liberalization, foreign firms enter via ___, usually as a joint venture with local partners who better understand the marketplace

Back 104

FDI

Front 105

In India, domestic firms are forced to become more ___, & can draw upon a large & well educated pool of workers.

Back 105

efficient

Front 106

4 forms of CSA in India

Back 106

1. IT (software)
2. pharmaceutical industry
3. services
4. special economic zones

Front 107

- considered a CSA in India
- has global competitors (ex: Infosys)

Back 107

IT (software)

Front 108

- considered a CSA in India
- mainly generic medicine

Back 108

pharmaceutical industry

Front 109

- considered a CSA in India
- western outsourcing FDI very strong

Back 109

services

Front 110

- considered a CSA in India
- aim to replicate the success China has had with them (the FDI model)
- began to implement in 2006
- Units within them will be 100% exempt from corporate income tax for the 1st 5 years, 50% exempt for the next 5, & 50% of the profits ploughed back will be exempt from tax for the final 5 years
- 267 of them were approved in the 1st 8 months, but the avg. size is small at 1.6 square miles. The largest is in Mumbai with 46 square miles, compared to Shenzen in China with 126 square miles.

Back 110

Special Economic Zones (SEZs)

Front 111

2 large segments in India

Back 111

1. impoverished rural population
2. increasingly well-off urban middle class

Front 112

4 aspects of segmentation in India

Back 112

1. huge metropolitan markets
2. increased purchasing power
3. family planning
4. women working

Front 113

In India, traditional habits are changing as the middle class becomes more ___.

Back 113

Westernized

Front 114

- prominent in China
- 1 country, 2 systems
- 2 of them: Hong Kong & Macau
- set up as a political model for the return of Taiwan

Back 114

Special Administration Region (SAR)

Front 115

In China, the ___ has had little effect on economic policy - so far.

Back 115

handover of Hong Kong

Front 116

Many western firms enter China through ___, where sophisticated trading companies are familiar with western business practices.

Back 116

Hong Kong

Front 117

___ with Chinese partners are usually done through Hong Kong intermediaries.

Back 117

Joint ventures

Front 118

Gradually, as more experience is gained, western companies are moving beyond Hong Kong and are dealing with ___ directly.

Back 118

mainland China

Front 119

Market
- 0-14 years: 20.1%
- 15-64 years: 71.9%
- 65 years & over: 8%
Literacy rate (2000 census)
- male: 95.1%
- female: 86.5%
Industry (2008 estimates)
- agriculture: 10.6%
- industry: 49.2%
- services: 40.2%
Trade Partners (2007 estimates)
- exports: 19.1% to U.S., 15.1% to Hong Kong, 8.4% to Japan, 4.6% to South Korea, 4% to Germany
- imports: 14% from Japan, 10.9% to South Korea, 10.5% to Taiwan, 7.3% to U.S., 4.7% to Germany
- PPP per capita = $6,600. 2nd largest economy in the world ($7.8 trillion), growing at 10% the past 25 years
- Gini index = 41 (2007 estimate)
- has become the new economic superpower in Asia, challenging the preeminence of Japan

Back 119

China

Front 120

Although it is the largest country in the world with 1.3 billion people, the ___ may lead to a decline in the population.

Back 120

one-baby policy

Front 121

China became a WTO member in ___, accelerating trade between it & other major economies

Back 121

2001

Front 122

China took over Hong Kong in ___, & it is still one of the most important trading platforms for China, although the center position started to shift fo Beijing, Shanghai, Shenzhen, etc.

Back 122

1997

Front 123

China's takeover of Hong Kong has been relatively ___.

Back 123

"hands-off"

Front 124

Because China is changing fast in every fundamental dimension (economically, politically, culturally, etc.), you must adopt a ___ view to look at China.

Back 124

dynamic

Front 125

4 CSAs in China because of a big market & growing purchasing power

Back 125

1. cell phone
2. auto
3. internet
4. banking

Front 126

- considered a CSA in China because of a big market & growing purchasing power
- the largest market since 2006

Back 126

cell phone

Front 127

- considered a CSA in China because of a big market & growing purchasing power
- the 2nd largest since 2006 at 7.3 million. Behind the U.S. at 16.5 million, & ahead of Japan at 5.7 million
- the largest in January 2009

Back 127

auto

Front 128

- considered a CSA in China because of a big market & growing purchasing power
- the largest market

Back 128

internet

Front 129

- considered a CSA in China because of a big market & growing purchasing power
- home to the top 3 largest in the capitalization (word) in 2009

Back 129

banking

Front 130

- considered a CSA in China
- moving from the state sector to the private sector
- "socialist" market economy

Back 130

Transition Economy I

Front 131

4 different Trade Zones that make up China's SEZs

Back 131

1. Free Trade Zone
2. Export Processing Zone
3. Economic & Technological Development Zone
4. Special Administration Region

Front 132

2 sectors where China boasts a top-notch infrastructure as part of its SEZs

Back 132

1. hardware
2. software

Front 133

The China-Singapore Suzhou Industrial Park is an example of a ___.

Back 133

SEZ

Front 134

- considered a CSA of China
- moving from world workers to world players
- moving from manufacturing to service
- moving from OEM to branding/channel
- industry structure
- currently, Chinese brands make up <20% of GDP
- the aim is for Chinese brands to make up >20% of exports

Back 134

Transition Economy II

Front 135

How many brands from China were ranked in the Top 100 global brands by Businessweek in 2010?

Back 135

0

Front 136

What percentage of Chinese brands are exported?

Back 136

<20%

Front 137

(time period) in China:
Low tech economy with high intensiy labor and mostly manufacturing jobs (e.g., toys). Exporting for foreign reserve.

Back 137

1980s & 1990s

Front 138

(time period) in China:
high tech economy with low intensity labor and mostly manufacturing jobs (e.g., computers). Market access for tech transfer.

Back 138

present day

Front 139

(time period) in China:
R&D based economy, jobs made up of service & products (e.g., innovation). Chinese brands produced for global markets

Back 139

near future

Front 140

3 other CSAs of China

Back 140

1. Business sector
2. Financial sector
3. Knowledge assets

Front 141

4 aspects China's business sector CSA is broken up into

Back 141

1. R&D
2. technology transfer
3. merger & acquisition
4. Greenfield

Front 142

2 aspects China's financial sector CSA is broken up into

Back 142

1. external
2. internal

Front 143

one of the 5 geographic regions of China with Shanghai as the center

Back 143

Eastern China

Front 144

one of the 5 geographic regions of China with Beijing as the center

Back 144

Northern China

Front 145

one of the 5 geographic regions of China with Guangzhou & Shenzhen as the center

Back 145

Southern China

Front 146

one of the 5 geographic regions of China with Chengdu & Chong Qing as the center

Back 146

Western China

Front 147

one of the 5 geographic regions of China with Changsha & Wuhan as the center

Back 147

Central China

Front 148

One long-term benefit of BRIC is that they are considered ___ markets.
- Their per capita PPP is still low, but any segment is big enough to sustain entry

Back 148

heterogeneous

Front 149

One of the long-term benefits of ___ is that they are big in size of land, population, & economy

Back 149

BRIC

Front 150

One of the long-term benefits of BRIC is that they have big ___ markets, suggesting less dependence on trading & higher economic stability

Back 150

local

Front 151

One strategic importance of BRIC is that they are harder to ___ as a result of high competition.
- well-established culture powerhouse, with multiple diversified subcultures
- solid education systems; skillful labor forces; strong social control; a secure life
- everybody wants to be there

Back 151

penetrate

Front 152

One strategic importance of BRIC is their high ___ as a result of high competition.
- technology transfer rather than product exchange

Back 152

bargaining power

Front 153

- considered a strategic importance of BRIC
- rapidly developing economy
- domestic competition with their new global challengers

Back 153

proactive mentality

Front 154

In 1994, this country's transition involved battling inflation & privatization

Back 154

Brazil

Front 155

In 1991, this country's transition involved Gorbachev's Big-Bang Theory

Back 155

Russia

Front 156

In 1990, this country's transition involved the sentiment of, "If China can, so can we!" and economic reform.

Back 156

India

Front 157

In 1980, this country's transition involved Deng's crossing the river by feeling for stones

Back 157

China

Front 158

- top-down implication
- CSA is that it is a major supplier of raw materials

Back 158

Russia

Front 159

- top-down implication
- CSA is that is a major supplier of products & services

Back 159

China

Front 160

- bottom-up implication
- CSA is that it is rich in natural resources

Back 160

Brazil

Front 161

- bottom-up implication
- CSA is that it is rich in labor

Back 161

India

Front 162

___ averages an inflation rate of 8% and a government deficit of 2.3% of GDP

Back 162

China

Front 163

Through the 1990s, ___ averaged an inflation rate of 548% & had a government deficit of 21.2% of GDP

Back 163

Brazil

Front 164

In BRIC, competition not only comes from ___, but more likely from ___.

Back 164

foreign MNCs; domestic firms

Front 165

In BRIC, large heterogeneity & big size of the market renders particular importance on a ___ marketing approach.

Back 165

segment-based

Front 166

In BRIC, high-end positioning may yield ___.

Back 166

first mover advantage

Front 167

In BRIC, low-end positioning places the firm in direct competition with strong ___.

Back 167

domestic brands

Front 168

- heterogeneity may make some markets attractive
- more dependent on international trading
- regional trading blocs are important for economic stability
- Mercosur currency
- can be penetrated fast & saturated fast as well
- short-term consideration for domestic market
- a middle ground to serve other markets

Back 168

smaller emerging markets

Front 169

- heterogeneity may make all markets attractive
- less dependent on international trading
- serve as a source of regional economic stability because of its local market size
- can be sustained for a long-term growth
- strategic
- patient
- high risk & high return

Back 169

bigger emerging markets

Front 170

- in retailing shopping behavior of OECD countries with different cultures
- the order of priorities of signals in assessment of quality are unanimously the same

Back 170

Dawar & Parker (1994)

Front 171

the typical way of analyzing global customers is similar to the so-called ___ framework
- essential to understand the customers because customers are heterogeneous
- raises business/marketing efficiency

Back 171

S-T-P

Front 172

- component of the S-T-P framework
- the splitting up of the total market into segments of more homogeneous subgroups

Back 172

segmentation

Front 173

- component of the S-T-P framework
- the selection of which one(s) of the segments the company should market its product

Back 173

targeting

Front 174

- component of the S-T-P framework
- exactly how the company should present the product to the target market(s) so its perception is most advantageous relative to competition

Back 174

positioning

Front 175

2 things that global marketing can easily lead to

Back 175

1. mis-positioned products
2. local resistance & animosity

Front 176

- 1 thing that global marketing can easily lead to
- leads to inappropriate promotional appeals

Back 176

mis-positioned products

Front 177

- 1 thing that global marketing can easily lead to
- not good, considering anti-globalization & anti-American sentiments

Back 177

local resistance & animosity

Front 178

The typical context for globalized marketing is not the usual ___ mindset.

Back 178

"close to customer"

Front 179

The point of globalized marketing is usually to coordinate ___ across a wide variety of markets where the firm does business.

Back 179

marketing activities

Front 180

A ___ approach easily leads to insensitivity towards local customers & local requirements, & conflicts with local subsidiaries.

Back 180

top-down

Front 181

When conducting STP, it is important to maintain a ___ orientation - sell what we make, the product line is given.

Back 181

selling

Front 182

When conducting STP, it is important to ___ products as much as possible.

Back 182

standardize

Front 183

When conducting STP, it is important to ___ via new reporting lines to make sure everyone is on board.

Back 183

coordinate

Front 184

When conducting STP, ___ of the marketing effort makes sure all people speak the same language.

Back 184

centralization

Front 185

2 aspects in the scope of marketing

Back 185

1. multidomestic
2. global

Front 186

in micro-segmentation, the 5 characteristics that useful markets possess

Back 186

1. identifiable
2. willing to buy
3. able to buy
4. measurable
5. reachable

Front 187

- one of the characteristics that useful markets possess in micro-segmentation
- what distinguishes them?

Back 187

identifiable

Front 188

- one of the characteristics that useful markets possess in micro-segmentation
- do they want it?

Back 188

willing to buy

Front 189

- one of the characteristics that useful markets possess in micro-segmentation
- can they afford it?

Back 189

able to buy

Front 190

- one of the characteristics that useful markets possess in micro-segmentation
- how many belong to each segment?

Back 190

measurable

Front 191

- one of the characteristics that useful markets possess in micro-segmentation
- how to distribute to, communicate to, each segment?

Back 191

reachable

Front 192

2 typical segmentation criteria when it comes to micro-segmentation

Back 192

1. generic attributes (marketers often do)
2. benefits oriented attributes (marketers should do)

Front 193

- a generic attribute of micro-segmentation
- the most basic micro segmentation is still ___

Back 193

economic development

Front 194

- a generic attribute of micro-segmentation
- the age & family structure in different countries play an important role in determining global segments

Back 194

demographic

Front 195

2 generic attributes of micro-segmentation

Back 195

1. economic
2. demographic

Front 196

2 benefits oriented attributes of micro-segmentation

Back 196

1. culture
2. lifestyle

Front 197

- one of the benefits oriented attributes of micro-segmentation
- people care about their identity even though a lot has been said in the media about the emergence of global segments of people

Back 197

culture

Front 198

- one of the benefits oriented attributes of micro-segmentation
- consumers start developing one of their own with buying behavior involving more than simple necessities

Back 198

lifestyle

Front 199

- characteristics that help us find & reach segments
- may be interchangeably used with bases in practice, but they are conceptually different
- using these instead of bases as segmentation criteria is the major problem

Back 199

descriptors

Front 200

- characteristics that tell us why segments differ (eg., needs, preferences, decision processes)
- may be interchangeably used with descriptors in practice, but they are conceptually different

Back 200

bases

Front 201

clustering of country markets on the basis of common characteristics deemed to be important for marketing purposes, e.g. data on generic attributes & benefit oriented attributes

Back 201

macro-segmentation

Front 202

9 generic attributes of macro-segmentation when it comes to country characteristics

Back 202

1. population size
2. population character
3. disposable income levels
4. educational background
5. primary languages
6. level of developoment
7. rate of growth in GDP
8. infrastructure
9. political affiliation

Front 203

2 benefit oriented attributes of macro-economic segmentation when it comes to country characteristics

Back 203

1. lifestyle
2. think & feel

Front 204

macro-level country characteristics is widely used in ___ because of its simplicity

Back 204

industry

Front 205

The ___ is often adopted in global segmentation to achieve the balance of practicality & relevance

Back 205

two-step process

Front 206

the choice of which countries & which segment(s) to target invovles an analysis of ___ over the planning horizon

Back 206

projected profitability

Front 207

the basic computation of projected profitability invovles ___ in a segment & the market share that the firm can expect to achieve

Back 207

forecasting sales

Front 208

___ is also necessary when analyzing projected profitability, especially if the target segment is likely to be brand loyal.

Back 208

Predicting competitive reactions

Front 209

To be a player in different countries & different market segments. Difficulties in one market segment or country can be offset by gains elsewhere.

Back 209

diversification strategy

Front 210

Markets & segments can be given more attention & market positions fortified. This is particularly advantageous when the country or segment compeititive rivalry is intense (ex: hyper-competition)

Back 210

focus strategy

Front 211

all about "differentiation" or "uniqueness" of your marketing offer to the targeted segment

Back 211

positioning

Front 212

To identify the optimal position, global marketing draws on the same techniques as domestic marketers in mapping out a visual representation of how the customers view the competing brands on the market, which is commonly called ___ or, more commonly, the ___.

Back 212

"perceptual space;" "product space"

Front 213

For positioning, marketers should use the marketing mix (the 4 Ps) to present the product to the selected target market(s) so that it is ___ in the most favorable way relative to preferences & competition.

Back 213

perceived

Front 214

the same 4 sets of data in positioning, but may have different implications in different country markets (e.g., culture, competitors, PLC)

Back 214

1. salient attributes
2. evoked set
3. attribute rankings
4. preferences

Front 215

- one of the same 4 sets of data in positioning, but may have different implications in different country markets
- data on what attributes a customer looks for in a product

Back 215

salient attributes

Front 216

- one of the same 4 sets of data in positioning, but may have different implications in different country markets
- identifying what brands are considered by the buyer

Back 216

evoked set

Front 217

- one of the same 4 sets of data in positioning, but may have different implications in different country markets
- how the individual rates the brands in the evoked set on salient attributes

Back 217

attribute ratings

Front 218

- one of the same 4 sets of data in positioning, but may have different implications in different country markets
- how the brands rank in terms of overall preferences

Back 218

preferences

Front 219

3 different effects on buyers when a globally standardized product or brand is introduced on a local market (in practice, all 3 processes are often at work simultaneously)

Back 219

1. new perception
2. perception change
3. preference change

Front 220

- one of the effectson buyers when a globally standardized product or brand is introduced on a local market
- new brand simply targets one untapped segment

Back 220

new perception

Front 221

- one of the effectson buyers when a globally standardized product or brand is introduced on a local market
- the product space is altered, by adding dimensions or extending endpoints

Back 221

perception change

Front 222

- one of the effectson buyers when a globally standardized product or brand is introduced on a local market
- buyer preferences are changed

Back 222

preference change

Front 223

2 aspects of perception change in positioning

Back 223

1. extended product space
2. added dimensions

Front 224

- an aspect of perception change in positioning
- occurs when globally standardized products offer more of the salient features desired. The new features tend to enlarge the space which defines the product (ex: more memory in PCs)

Back 224

extended product space

Front 225

- an aspect of perception change in positioning
- occurs when the globally standardized product offers important new features (ex: camera on a cell phone)

Back 225

added dimensions

Front 226

When standardized products are marketed in global markets, they are often ___ (not hitting the target bullseye).

Back 226

"mispositioned"

Front 227

3 reasons why consumers might still buy mispositioned products
- causes marketers to not see the problem right away

Back 227

1. brand image
2. country of origin
3. lower price

Front 228

What is the essential damage for mispositioning?

Back 228

sustainability in global competition

Front 229

2 global STP approaches on market segmentation/targeting

Back 229

1. similar segment
2. different segment

Front 230

2 global STP approahces on product positioning

Back 230

1. similar positioning
2. different positioning

Front 231

3 economic rationales

Back 231

1. permanent income
2. relative income hypothesis
3. conspicuous consumption

Front 232

- economic rationale developed by Milton Friedman
- the regularly expected income is what determines an individual's consumption

Back 232

permanent income

Front 233

- economic rationale developed by James Duesenberry
- consumer's well-being is a function of how much income they have relative to their peer groups, not the actual income

Back 233

relative income hypothesis

Front 234

- economic rationale developed by Thorstein Veblen
- the notion that people make purchases of expensive brands & products in order to display their ability to afford them

Back 234

conspicuous consumption

Front 235

The gap between a new & used car in China is much (bigger/smaller) than in the U.S.

Back 235

bigger

Front 236

psychological bias that states that we tend to be willing to gather facts that support certain conclusions but disregard other facts that support different conclusions

Back 236

selective search for evidence

Front 237

psychological bias that states that we tend to accept the 1st alternative that looks like it might work

Back 237

premature termination of search for evidence

Front 238

psychological bias that suggests there is unwillingness to change thought patterns that we have used in the past in the face of new circumstances

Back 238

conservatism & inertia

Front 239

psychological bias that suggests there is unwillingness or inability to look beyond the scope of our past experiences; rejection of the unfamiliar

Back 239

experiential limitations

Front 240

psychological bias that states that we actively screen out information that we do not think is salient

Back 240

selective perception

Front 241

psychological bias that states that we tend to want to see things in a positive light & this can distort our perception & thinking

Back 241

wishful thinking or optimism

Front 242

psychological bias that states that we tend to place more attention on more recent information & either ignore or forget more distant information

Back 242

recency

Front 243

psychological bias that suggests there is a willingness to believe what we have been told most often and by the greatest number of different of sources

Back 243

repetition bias

Front 244

psychological bias that states that decisions are unduly influenced by initial informatoin that shapes our view of subsequent informatoin

Back 244

anchoring

Front 245

psychological bias that suggests there is peer pressure to conform to the opinions held by the group

Back 245

group think

Front 246

psychological bias that states that we reject something if we have a bias against the person, organization, or group to which the person belongs: we are inclined to accept a statement by someone we like

Back 246

source credibility bias

Front 247

psychological bias that states that we look at a decision as a small step in a process & this tends to perpetuate a series of similar decisions. This can be contrasted with zero-based decision making.

Back 247

incremental decision making & escalating commitment

Front 248

psychological bias that suggests there is an unwillingness to apply the same decision criteria in similar situations

Back 248

inconsistency

Front 249

psychological bias that states that we tend to attribute our success to our abilities & talents, but we attribute our failures to bad luck & external factors. We attribute others' success to good luck, & their failures to their mistakes.

Back 249

attribution asymmetry

Front 250

psychological bias that states that we conform to the decision making expectations that others have of someone in our position

Back 250

role fulfillment

Front 251

psychological bias that states that we tend to underestimate future uncertainty because we tend to believe that we have more control over events than we really do

Back 251

underestimating uncertainty & the illusion of control

Front 252

psychological bias that states that in order to simplify an extreme complex world, we tend to group things & people. These simplifying generalizations can bias decision making processes

Back 252

faulty overgeneralizations

Front 253

psychological bias that states that we tend to ascribe causation even when the evidence only suggests correlation. Just because birds fly to the equatorial regions when the trees lose their leaves does not mean that the birds migrate BECAUSE the trees lose their leaves

Back 253

ascription of causality

Front 254

5 external influences of a "combined" customer

Back 254

1. environment
2. economics
3. technology
4. culture
5. psychology

Front 255

2 "models of man" when it comes to a "combined" customer

Back 255

1. buyer characteristics
2. buyer decision process

Front 256

4 buyer choices of a "combined" customer

Back 256

1. product choice
2. brand choice
3. store choice
4. supplier choice

Front 257

the "models of man" of a "combined" customer represent a ___ marketing effort.

Back 257

local

Front 258

Buyers are ___-oriented - they buy for a reason (motivation).
- what does the product/service do for the buyer?
- how does it fit into the consumption & use pattern of the buyer?
- what is the perceived risk & how high is it?

Back 258

goal

Front 259

The ___ often differs between local markets because they have different perception & preference.

Back 259

core benefit

Front 260

5 steps in the buyer decision process

Back 260

1. problem recognition
2. search
3. evaluation of alternatives
4. choice
5. outcomes

Front 261

- part of the buyer decision process
- a ___ is when an individual perceives a difference between an ideal & an actual state of affaris

Back 261

problem

Front 262

___ often lead to tension & a recognized "problem"

Back 262

new products

Front 263

For the local marketer, it is important to recognize that education about the ___ might be necessary in order to create a demand for the product

Back 263

core benefits

Front 264

A consumer's search for alternative ways to solve the problem is closely related to his/her level of ___ with the product category

Back 264

involvement

Front 265

for products with which involvement is ___, search tends to be more comprehensive & time consuming

Back 265

high

Front 266

for convenience & habit purchases, the decision process is ___, with little need for extensive searches or alternative evaluations

Back 266

shorter

Front 267

___ is dependent on the perceived availability of the alternative

Back 267

search intensity

Front 268

one advantage for a product with high global brand awareness is that initial ___ is easier to overcome

Back 268

distrust

Front 269

the evaluation of alternatives step of the buyer decision process is for when a new product or service is in the ___.

Back 269

"consideration set"

Front 270

A ___ individual will process the available information matching the pros & cons of the alternatives against preferences

Back 270

highly involved

Front 271

2 ways consumers can deal with multi-attribute evaluations

Back 271

1. "hierarchical" decision rule
2. "compensatory" rule

Front 272

- one way consumers can deal with multi-attribute evaluations
- use gradually less-important features to successively screen out alternatives

Back 272

"hierarchical" decisoin rule

Front 273

- one way consumers can deal with multi-attribute evaluations
- consider all features simultaneously
- hard to do

Back 273

"compensatory" rule

Front 274

2 things that the final choice in the buyer decision process of which alternative to select or try is typically influenced by

Back 274

1. social norms
2. situational factors

Front 275

- strong where there are group pressures to comply; influence is expected to override multiattributed evaluation
- can be usefully analyzed by the Fishbein model
- involves 2 aspects: (1) social forces, & (2) motivation to comply

Back 275

social norms

Front 276

a hypothesis that people value a product more once their property right to it has been established. In other words, people place a higher value on objects they own relative to objects they do not

Back 276

endowment effect

Front 277

The Mug Experiment: people demanded a (higher/lower) price for a coffee mug that had been given to them, but a (higher/lower) price on one they did not own yet
- example of the endowment effect

Back 277

higher/lower

Front 278

In the China housing market, buying is much (more/less) expensive than renting
- what do people choose to do?

Back 278

- more
- buy

Front 279

In the China auto market, ___ is popular, while ___ is not.

Back 279

buying; leasing

Front 280

In the buyer decision process, the main question about the outcomes revolves around the degree of ___.

Back 280

customer satisfaction

Front 281

particularly important in mature markets where choices are many & the needs are already well met

Back 281

customer satisfaction

Front 282

satisfaction engenders ___ to the brand & to the company

Back 282

loyalty

Front 283

because buying is typically a risky choice between different brands, the marketer has to make sure that the customer does not encounter ___, a sense of possibility making the wrong choices

Back 283

cognitive dissonance

Front 284

The marketing implications of the ___ theory is to get satisfied customers to endorse the product - a common strategy in advertising

Back 284

prospect

Front 285

The business-to-business (B2B) marketing task states that:

Back 285

the marketer should help the buying organization succeed

Front 286

- Industrial buyers are influenced by the same forces as individual consumers, but also conditioned by the ___ in which they operate.
- It reflects company policies & ways of making decisions

Back 286

organizational culture

Front 287

The ___ process involves several stages from problem recognition to performance review.

Back 287

industrial buying

Front 288

The key to success in industrial buying is ___.

Back 288

relationship building

Front 289

3 different perspectives in determinants of inter-organizational trust

Back 289

1. relationship-based
2. process-based
3. economic hostage-based

Front 290

- a perspective in determinants of inter-organizational trust
- social relations, length & intensity
- works in Japan only

Back 290

relationship-based perspective

Front 291

- a perspective in determinants of inter-organizational trust
- institutional arrangements, selection process, buyer assistance routines
- supported by the U.S., Japan & Korea

Back 291

process-based perspective

Front 292

- a perspective in determinants of inter-organizational trust
- economically credible commitments, stock ownership
- not supported in U.S., Japan, or Korea

Back 292

economic hostage-based perspective

Front 293

- applied to a marketing effort involving:
- various personalized services
- creation of new & additional services
- customizing a company's offering to the needs of a special buyer
- takes a long-term view
- since without it, the effort required to build a relationship is not worth it
- it is particularly important for countries which hold value in long-term view

Back 293

customer relationship

Front 294

4 things a marketer can do to create a workable relationship

Back 294

1. adopt the buyer's viewpoint
2. accept & demand transparency
3. grow with the relationship
4. be proactive

Front 295

Marketers should always consider how the culture of the ___ & the culture of the ___ affect customer relationships.

Back 295

nation; organization

Front 296

The ___ approach of micro level research is characterized by having a lower cost & being fast

Back 296

secondary

Front 297

The ___ approach of micro level research is characterized by having a higher relevance.

Back 297

primary

Front 298

- As companies become global marketers & seek to standardize various parts of the marketing mix across several countries, ___ becomes more important
- involves dealing with countries that have different languages, economies, social structures, behavior, & attitude patterns
- in some cases the entire research design may have to be different between 2 countries to maximize the comparability of the results

Back 298

multicultural research

Front 299

- ___ have become standard for initial exploratory research
- in foreign markets, they have the advantage of being relatively inexpensive, can be completed quickly, & can reach local pockets of the market
- unfortunately, they can also constitute an unrepresentative sample because typical screening criteria are incorrect in the new environment or are not implemented correctly

Back 299

focus groups

Front 300

- ___ of large (n = 500+) random samples drawn from a sampling frame of representative product users are of central importance in marketing research

Back 300

consumer surveys

Front 301

In ___ cultures especially, one cannot fully understand consumers from their responses to standard survey questions. This is a cultural problem invovlved in the typical consumer survey

Back 301

high context

Front 302

Informal ___ are prone to bias because of demand characteristics. This is a cultural problem involved in the typical consumer survey

Back 302

face-to-face interviews

Front 303

- ___ of distribution channels & trade associations can provide a good starting point for further data gathering & analysis
- In the U.S., the use of middlemen for information about consumers is usually limited to the sales & scanner records of retailers & wholesalers
- In countries with less social mobility & less diversity than the U.S., key informants in the trade are good sources of information about buyers

Back 303

trade surveys

Front 304

- experiment
- lab
- field
- its value depends on the stage of presence (new or long-established) & area (e.g., advertising)

Back 304

causal research

Front 305

- In attitude ___, very basic factors can create difficulties
- the cognitive & emotional concepts measured may not be equivalent across cultures
- this means ___ is questionable

Back 305

- scaling
- measurement equivalence

Front 306

The ___ employed in the typical consumer survey needs to be carefully pre-tested & translated into the foreign language

Back 306

questionnaire

Front 307

The questionnaire employed in the typical consumer survey should be ___ for verification & adjustment.

Back 307

back-translated

Front 308

In ___ cultures, the questionnaires employed in the typical consumer survey are typically much longer because of the need to establish the proper context for the questions.

Back 308

high-context

Front 309

- lack of comprehensive & reliable sampling frames has long been a problem for marketing researchers in many countries
- emergence of firms that specialize in developing lists for direct marketing & survey research is gradually resolving the problem
- still, ___ can be questionable because the appropriate profiles differ (e.g., "high" income in one country might not be "high" in another)

Back 309

sampling equivalence