Glosario de Conceptos Fundamentales
1. Arbitrage - Is the practice of taking advantage of a state of imbalance between two or more markets: a combination of matching deals are struck that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic ortemporal state and a positive cash flow in at least one state.
For example in Internet Marketing you may want to buy cheap traffic to send visitors to a page that contains ADS from different sources and you’d be pocketing the difference.
2. Arm’s Length prices - From a theoretical point of view says that the transfer prices set should reflect the prices the subsidiary might encounter in the openmarket. It is the international standard that the organization for Economic Corporation and Development (OEDC) member countries and the United States have agreed should be used for determining the transfer price for tax purposes.
Example: Consider a profitable UK computer group that buys micro-chips from its own subsidiary in Korea: how much the UK parent pays its subsidiary – the transferprice – will determine how much profit the Korean unit reports and how much local tax it pays. If the parent pays below normal local market prices, the Korean unit may appear to be in financial difficulty, even if the group as a whole shows a decent profit margin when the completed computer is sold.
3. Back translation: this situation usually happens when language barriers exist in the process ofquestionnaires constructions. The global market researcher should first translate the original questionnaire into the foreign language and then have someone else “back translate” it into the original language. In other words is the process of translating the questionnaire back to the language it where it will be reviewed.
Example: Colloquialisms or slogans may translate badly from onelanguage to another. For example, note the following message from a Copenhagen airline ticket office: "We take your bags and send them in all directions". Although this statement may be functionally equivalent to the original Danish, it would not be particularly reassuring to a native English speaker.
4. Barter - It is the oldest form of Counter trade. It is the direct exchange of goods between twotrading partners.
Example: In Spain (particularly the Catalonia region) there is a growing number of exchange markets. These barter markets or swap meets work without money. Participants bring things they do not need and exchange them for the unwanted goods of another participant. Swapping among three parties often helps satisfy tastes when trying to get around the rule that money is notallowed.
5. Brand equity - It is typically define as the set of assets linked to a brand name and symbol that adds to the customer value provided by a firm’s product or service.
Example: In the early 2000s in North America, the Ford Motor Company made a strategic decision to brand all new or redesigned cars with names starting with "F". This aligned with the previous tradition of naming all sportutility vehicles since the Ford Explorer with the letter "E". The Toronto Star quoted an analyst who warned that changing the name of the well known Windstar to the Freestar would cause confusion and discard brand equity built up, while a marketing manager believed that a name change would highlight the new redesign. The aging Taurus, which became one of the most significant cars in American autohistory would be abandoned in favor of three entirely new names, all starting with "F", the Five Hundred, Freestar and Fusion. By 2007, the Freestar was discontinued without a replacement. The Five Hundred name was thrown out and Taurus was brought back for the next generation of that car in a surprise move by Alan Mulally. "Five Hundred" was recognized by less than half of most people, but an...
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