IB395ch_10_13T
Grey Markets can impose several costs/consequences on global marketers, including: *Competition from grey market products can lead to channel conflict as authorized distributors attempt to cut costs, complain to manufacturers, and file lawsuits against the grey marketers*
Damage to Channel Relationships
1 of 4 Incoterms: *"D-terms"*
Delivered Duty Paid (DDP)
1 of 4 Incoterms: *The seller has agreed to deliver the goods to the buyer at the place the buyer names in the country of import, with all costs, including duties, paid*
Delivered Duty Paid (DDP)
1 of 4 Incoterms: *Under this contract the seller is also resposnsible for obtaining the import license if one is required*
Delivered Duty Paid (DDP)
Order process the process by which products are made available to the customer
Delivery
Stores that literally have several departments under one roof, each department representing a distinct merchandise line and staffed with a limited number of salespeople
Department Store(s)
Considerations for advertising agencies: *Does the agency have in-house computer engineering and coding talent with a proven ability to work with staff from traditional functions such as creative services and account services?*
Digital Expertise
Grey Markets can impose several costs/consequences on global marketers, including: *Authorized dealers are no longer the sole distributors. The product is often available from multiple sources and margins are threatened*
Dilution Exclusivity
The company establishes its own sales force or operates its own retail stores
Direct Involvement
Products that belong to this category of "new and different" represent a dramatic break with the past. In short they are *game changers*
Discontinuous Innovation(s)
Requires new consumption patterns and creation of previously unknown products
Discontinuous Innovation(s)
Limited discounts on products to 3% of the list price
Discount Law
Rabattgesetz is also
Discount Law
A form of warehousing wherein it is designed to efficiently receive goods from suppliers and then fill orders for individual stores or customers
Distribution
A global company expanding across national boundaries must either utilize existing _s or build its own
Distribution Channel
A wholesale intermediary that typically carries product lines or brands on a selective basis
Distributor
An alternative method to dealing with the cherry picking problem would be when a company decides to rely on a _s *own sales force by subsidizing the cost of the sales representatives the _ assigned to the company's products*
Distributor
Discount retailer that *sell a select assortment of products at one more more low prices*
Dollar Store(s)
Strategy where both the product and 1+ promotional elements are adapted for a particular country or region
Dual Adaptation (Product Communication Adaptation)
*Congress* defines it as an unfair trade practice that results in "injury, destruction, or prevention of the establishment of American industry"
Dumping
The *GATT* defines it as the sale of imported products at a price lower than that normally charged in the domestic market or country of origin
Dumping
_ and _ are important product characteristics that must be appropriate for the proposed market
Durability, Quality
Products, besides from buyer orientation, can be categorized by their lifespan which is composed of 3 things
Durable, Nondurable, Disposable
An intermediate category of newness is less disruptive and requires less learning on the part of consumers; such products are called _
Dynamically Continuous Innovation(s)
Product that embody this level of innovation share certain features with earlier generations while incorporating new, or breakthrough features that offer added value, such as substantial improvement in performance consumption patterns
Dynamically Continuous Innovation(s)
Some disrupting influence on established consumption patterns
Dynamically Continuous Innovation(s)
Ads that may tug at the heartstrings or tickle the funny bone of the the intended audience and evoke an emotional response that will reinforce brand attitudes and direct purchase behavior
Emotional Appeal
Order process in which the order is actually submitted into the company's info systems
Entry
Order processing includes: Order _, Order _, Order _
Entry, Handling, Delivery
Maslow's Hierarchy of social needs
Esteem
*Flexible cost plus pricing* sometimes incorporates the _ to establish the future cost for all component elements
Estimated Future Cost Method
The _ continues to set product standards that force many non-EU companies to adapt their product or service offerings to satisfy domestic market regulations
European Commission
1 of 4 Incoterms: *"E-Terms"*
Ex Works (EXW)
1 of 4 Incoterms: *In principle, it affords the buyer maximum control over cost of transporting works, can be contrasted with several "D-terms" (post main carriage or arrival terms)*
Ex Works (EXW)
1 of 4 Incoterms: *Refers to the transaction in which the buyer takes delivery at the premises of the seller; the buyer bears all risks and expenses from that point on*
Ex Works (EXW)
Incoterms 4 classifications
Ex Works, Delivered Duty Paid, Free Carrier, Free Alongside Ship Name Port
The increase in the final selling price of goods traded across borders that reflects these factors
Export Price Escalation
Strategies concerned with: *Are the firm's prices likely to be viewed by the host-country government as reasonable or exploitative?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Do the foreign country's dumping laws pose a problem?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Does the price reflect the product quality?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Is demand in the international market elastic or inelastic?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Is the price competitive given the local market conditions?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Should prices differ with market segment?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Should the firm pursue the market penetration, market skimming, or some other pricing objective?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Which pricing options are available if the firm's costs increase or decrease? Is demand in the international market elastic or inelastic?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Which pricing options are available if the firm's costs increase or decrease?*
Export Price Escalation; Cost Plus
Strategies concerned with: *Which type discount (trade, cash, quantity) and allowance (advertising, trade-off) should the firm offer its international customers?*
Export Price Escalation; Cost Plus
A written guarantee that assures the buyer that s/he is getting what s/he has paid for or that provides recourse in case a product's performance falls short of expectations
Express Warranty
*Product Communication Strategy* that sells the same product with essentially no adaptation, using same advertising and promo appeals used domestically in 2+ markets or segments. It is very *straightforward marketing strategy, can be* the *most profitable* approach as well.
Extension
A company that has developed a successful local product/brand can implement an _ strategy that calls for offering a product virtually unchanged in markets outside of the home country
Extension
Companies in the international, global, and transitional stages of development all employ _ strategies
Extension
Pricing strategy that calls for the per unit price of an item to be the same no mater where in the world the buyer is located. In such instances, the importer must absorb freight and import duties
Extension/Ethnocentric
This main pricing strategy's advantage is its extreme simplicity because it does not require information on competitive or market conditions for implementation
Extension/Ethnocentric
T || F: *A global brand is the same as a global product*
F
T || F: *As a general rule, extension/standardization strategies are utilized more frequently with consumer products than industrial or B2B products*
F
T || F: *In a truly global market the Law of One Price would not prevail*
F
T || F: *Japanese car buyers expect numerous face to face meetings with a sales representative during which trust is established. The relationship does not continue after the deal is close; sales reps send cards and continually seek to ensure the buyer's satisfaction*
F
T || F: *Testing a new product in "actual market conditions" does necessarily require a full scale test marketing effort, and also involves observing the actual use of the product in the target market*
F
T || F: *The cherry picker is interested in developing a market for a new product, which is a problem for an expanding international company*
F
Nokia's country of origin
Finland
Is used by companies to ensure that prices are competitive in the context of the particular market environment
Flexible Cost Plus Pricing
Managers who utilize _ are acknowledging the importance of the 8 criteria of *cost plus pricing vs. export price escalation*
Flexible Cost Plus Pricing
In global marketing, _ complicate the task of setting prices
Fluctuating Exchange Rates
The utility based on the *availability of a product processed, prepared, in proper condition, and/or ready to use*
Form
Is the appropriate entry strategy when barriers to entry are low, yet the market is culturally distant in terms of consumer behavior or retailing structures
Franchising
1 of 4 Incoterms: *Used for a transaction which seller places the shipment alongside, or available to, the vessel upon which goods will be transported out of the country.*
Free Alongside Ship (FAS) Named Port
Is the Incoterm for a transaction in which the seller places the shipment alongside, or available to, the vessel upon which the goods will be transported out of the country.
Free Alongside Ship (FAS) Named Port
The seller pays all charges up to that point. The seller's legal responsibility ends once the goods have been cleared for export; the buyer pays the cost of actually loading the shipment
Free Alongside Ship (FAS) Named Port
_ is used with *break bulk cargo* which is noncontainerized, general cargo such as iron, steel, or machinery (often stowed in the hold of a vessel rather than in containers on the deck)
Free Alongside Ship (FAS) Named Port
1 of 4 Incoterms: *Delivery is widely used in global sales*
Free Carrier (FCA)
1 of 4 Incoterms: *F-terms*
Free Carrier (FCA)
1 of 4 Incoterms: *Transfer from seller to buyer occurs when goods are delivered to a specified carrier at a specified destination*
Free Carrier (FCA)
Banned companies from giving away free merchandise such as shopping bags
Free Gift Act
Zugabeverordung is also known as
Free Gift Act
CIF named port can be similar to _ named port
Free On Board (FOB) Named Port
The responsibility and liability of the seller do not end until the goods -typically housed in containers- have cleared the ship's rail. As a practical matter, access to the terminal and harbor areas in many modern ports may be restricted; in such an instance *FCA* should be used
Free On Board (FOB) Named Port
Grey Markets can impose several costs/consequences on global marketers, including: *If the manufacturer ignores complaints from authorized channel members, those members may engage in this practice of channel members opting to take various actions to offset the downward pressure on margins, such as cutting back on presale service, customer education, and salesperson training*
Free Riding
As a starting point, this strategy is used by firms that comply with Western cost-accounting principles typically use the _
Full Absorption Cost Method
Chinese-made solar panel exports follow what type of pricing strategy
Full Absorption Cost Method
Defines the per unit product cost as the sum of all past or current and indirect manufacturing and overhead costs
Full Absorption Cost Method
Discount retailer that *typically offer a wide range of merch including non-food items and nonperishable food, in a limited service*
Full Line Discounter(s)
Walmart is an example of what type of discount retailer(s)
Full Line Discounter(s), Warehouse Club(s)
Discount retailers can be divided into what several categories
Full Line Discounter(s), Warehouse Club(s), Dollar Store(s)
A company uses _ pricing neither fixes a single price worldwide, nor allows subsidiaries or local distributors to make independent pricing decisions. Represent an intermediate course of action
Geocentric
Pricing strategy that is more dynamic and proactive than the Ethnocentric/Extension and Polycentric/Adaptation pricing strategies
Geocentric
Messages whose art, copy, headlines, photographs, taglines, and other elements have been developed expressly for their worldwide suitability
Global Advertising
Has the same name, and in some instances, a similar image and positioning throughout the world
Global Brand
The following 6 guidelines can assist marketing managers in their efforts to establish _ 1. Create a compelling value proposition for customers in every market entered, beginning with home-country market 2. Think about all elements of brand identity and select names, marks, symbols that have potential for globalization 3. Develop a company-wide communication system to share and leverage knowledge and information about marketing programs 4. Develop consistent planning processes across markets and products 5. Assign specific responsibility for managing branding issues to ensure local bran managers accept global best practices 6. Execute brand building strategies that leverage global strengths and respond to relevant local differences
Global Brand Leadership
1 of 3 characteristics of global brands: *Global brands symbols of cultural ideals. Marketers can use GCCP to communicate a brand's global identity and link that identity to aspirations in any part of the world*
Global Myth
Meets the wants/needs of global market
Global Product
Any retailing activity that crosses national boundaries
Global Retailing
As a practical matter, marketing managers may choose to run both _ and _ ads rather than adopt an "either/or" stance
Global, Local
Markets that can flourish when a product is in short supply, when producers employ skimming strategies in certain markets, or when the goods are subject to substantial markups
Grey Markets
Order process which involves locating, assembling, and moving products into distribution
Handling
These discounters offer a limited assortment of goods (1k - 3k of products) at rock bottom prices
Hard Discounter(s)
Competitors within an industry that make and market the same product to conspire to keep prices high
Horizontal Price Fixing
A hybrid retailing format combining the discounter, supermarket , and warehouse club approaches under single roof. Size-wise they are huge ranging from 200k - 300k sq. Ft
Hypermarket(s)
The *Big Idea* is easier to _ than define... It is not a _ (although the place a product occupies in the consumer's mind may be part of it). It is not a _ (although the writing or graphic style of an ad may be part of it)... It is not an _ (although the tagline may encapsulate it). -Randall Rothenberg
Illustrate; Position/Execution/Slogan
Advertising that enhances the public's perception of a company, creates goodwill, or announces a major change, e.g. a merger, acquisition, or divestiture
Image
Suppliers that are upstream in the value chain
Inbound Logistic(s)
These activities are associated with what strategy: *Arranging for ocean freight and preparation*
Incoterms
These activities are associated with what strategy: *Completing necessary customs export papers*
Incoterms
These activities are associated with what strategy: *Obtaining a currency permit, if required*
Incoterms
These activities are associated with what strategy: *Obtaining export license *
Incoterms
These activities are associated with what strategy: *Obtaining marine insurance and certificate of policy*
Incoterms
These activities are associated with what strategy: *Packing the goods for export*
Incoterms
These activities are associated with what strategy: *Preparing a land bill of lading*
Incoterms
These activities are associated with what strategy: *Preparing customs or consular invoices as required by country of destination*
Incoterms
These activities are associated with what strategy: *Transporting the goods to the place of departure*
Incoterms
When the company entails utilizing independent agents, distributors, and retailers
Indirect Involvement
A persistent upward chang ein price levels
Inflation
The utility based on the *availability of answers to questions and general communication*
Info
An extremely low cost *water mode of transportation* generally used to move agricultural commodities, petroleum, fertilizers, and other goods that , by their nature lend themselves to bulk shipping via barge
Inland
2 main types of mode of transportation related to water
Inland, Ocean
The process of endowing resources with a new capacity to create value, is a demanding but potentially rewarding product strategy for reaching mass markets in less developed countries as well as important market segments in industrialized countries
Innovation
A product's _ attributes include the status associated with the product ownership, a manufacturer's service commitment, and a brand's overall reputation or mystique, are also important
Intangible
The approach explicitly recognize that the various elements of a company's communication strategy must be carefully coordinated
Integrated Marketing Communications (IMC)
The challenge of effectively communicating across borders is one reason that global companies and their advertising agencies are embracing a concept known as _
Integrated Marketing Communications (IMC)
Scotland's 4 key values discovered by "Project Galore"
Integrity, Tenacity, Inventiveness, Spirit
Transportation of goods involves a combination of land and water shipping from the producer to the customer
Intermodal
The internationally accepted terms (*INCO Terms*) are also known as
International Commercial Terms
Offered in several market in a particular region
International Product/Brand
Ensures that a company neither runs out of manufacturing components or finished goods nor incurs the expense and risk of carrying excessive stocks of these items
Inventory Management
Global retailers frequently use these strategies to limit their risk when targeting unfamiliar, difficult to enter markets
Joint Venture, Licensing
The close longterm relationships between auto salespersons and Japanese people can be thought of as a consumer version of _ system
Keiretsu
All customers in the market could get the best product available for the best price
Law of One Price
_ and _ in different countries frequently lead to obligatory product design adaptations
Laws, Regulations
Consumer packaged goods companies and food marketer rely heavily on *continuous innovations* when rolling out new products. These often take the form of _s such as new sizes, flavors, and low fat version
Line Extension(s)
In some instances a _ retailer breaks new ground by transforming the shopping the experience
Local
One that has achieved success in a single national market
Local Product/Brand
Describes the integration of activities necessary to ensure the efficient flow of raw materials, in process inventory, and finished goods from producer to suctomers
Logistics Management
_ cost *mass* market products and certain services can be sold on a door to door basis via direct sales force
Low
A behavior known as *conspicuous consumption* or _ happens when consumers flaunt their wealth by buying expensive products and brands that others will notice
Luxury Badging
These stores are designed to provide an interactive shopping experience and build brand loyalty. Such channels supplement, rather than replace distribution through independent retail stores
Manufacture Owned Store/Independent Franchise
What type of Transfer Pricing Method: *Achieves goal congruence when markets are competitive*
Market
What type of Transfer Pricing Method: *Markets may not exist or may be imperfect*
Market
What type of Transfer Pricing Method: *Preserves subunit autonomy when markets are competitive*
Market
What type of Transfer Pricing Method: *Useful for evaluating subunit performance when markets are competitive*
Market
Derived from the price required to be competitive in the global marketplace. It represents an approximation of an arm's length transaction
Market Based Transfer Price
The use of flexible cost plus method to reduce prices in response to unfavorable currency swings is an example of a _ and is adopted by companies that do not want to lose market share
Market Holding Strategy
A first time exporter is unlikely to use what type of pricing strategy
Market Penetration
A pricing strategy where setting price levels that are low enough to quickly build market share
Market Penetration
Companies that seek competitive advantage by pursuing differentiation strategies or positioning their product in the *premium segment* frequently use _
Market Skimming
Pricing strategy that is often part of a deliberate attempt to reach a market segment that is willing to pay a premium price for a particular bran or for a specialized or unique product
Market Skimming
Target marketing begins with _ and _
Market mapping, Product definition
What type of Transfer Pricing Method: *Motivates managerial effort yes*
Market, Negotiated
Provides a useful framework for understanding how and why local products and brands can be extended beyond home-country borders
Maslow's (needs) Hierarchy
Door to door, and house party selling are considered to be a _ channel in the US
Mature
Word that implies a "choice"
Mode
Managers who behave in this way are essentially abandoning any effort to leverage product communication policies outside the home country
NIH (Not invented here) Syndrome
What happens when managers ignore decisions made by subsidiary or affiliate managers
NIH (Not invented here) Syndrome
Considerations for advertising agencies: *Is the global agency familiar with the local culture and buying habits in a particular country, or should a local agency be hired?*
National Responsiveness
What type of Transfer Pricing Method: *Bargaining and negotiations take time and may need to be reviewed as conditions change*
Negotiated
What type of Transfer Pricing Method: *Preserves subunit autonomy because it is based on negotiations between subunits*
Negotiated
What type of Transfer Pricing Method: *Useful for evaluating subunit performance but transfer prices are affected by the negotiating skills of the buyer and the seller*
Negotiated
An alternative to allow organization's affiliates to determine transfer prices among themselves. This method may be employed when market conditions are subject to frequent changes
Negotiated Transfer Price
An external influence or confusion at the receiving end that can detract from the ultimate effective of the communication
Noise
A *water mode of transportation* where the world's deepwater ports can receive a variety of of types of vessels e.g. bulk and break bulk vessels, and roll on roll off (ro-ro) vessels
Ocean
Is a reciprocal arrangement whereby government in the importing country seeks to recover large sums of hard currency spent on expensive purchases such as military aircraft or telecommunications systems
Offset
These have become controversial aspect of today's trade environment, as to win sales in important markets e.g. China, global companies can face demands for _s even when transactions do not involve military procurement
Offset
Activities related to order processing provide info inputs that are critical in fulfilling a customer's order
Order Processing
Occurs when a company uses its own resources to open a store on a greenfield site or to acquire one or more existing retail facilities from another company
Organic Growth
Stores that are downstream in IKEA's value chain
Outbound Logistic(s)
To attract large numbers of shoppers, outlet stores are often grouped together in _
Outlet Mall(s)
A variation on the traditional shopping mall: retail operations that allow companies with well known consumer brands to dispose of excess inventory, out of date merch, or factory seconds
Outlet Store(s)
Whereby individual consumers market products to other individuals. eBay pioneered it, as well as the Internet and related forms of new media which dramatically altered the distribution landscape
P2P
A strategic communication process that builds mutually beneficial relationships between organizations and their publics
PR (Public Relations)
Personnel who are responsible for fostering goodwill, understanding, and acceptance among a company's various constituents and stakeholders
PR (Public Relations)
Serves as important communication functions offering communication cues that can influence consumers when making a purchase decision
Packaging
Occurs when companies employ a polycentric multinational pricing policy that calls for setting different prices in different country markets
Parallel Importing
An advertising strategy that calls for developing a basic pan-regional or global communication concept for which copy, artwork, or other elements can be adapted as required for individual country markets
Pattern
An advertising technique which is analogous to the concept of global product platforms representing a middle ground between standardization and adaptation
Pattern
Maslow's Hierarchy of physical needs
Physiological, Safety, Social (belonging)
Maslow's Hierarchy of needs from bottom to top
Physiological, Safety, Social (belonging), Esteem, Self Actualization
Coca-Cola's ability put coke "within arm's reach of desire" would be _ utility
Place
The utility based on the *availability of a product/service in a location that is convenient to a potential customer*
Place
The major categories of marketing channels utility are
Place, Time, Form, Info
Core product design element or component, that can be quickly and cheaply adapted to various country markets
Platform
The practice that is generally held to be an anticompetitive act. Companies that collude in this manner are usually trying to ensure higher prices for their products than would generally be available if markets were functioning freely
Price Fixing
Means that buyers are able to comparison shop easily bc goods will be priced in euros as opposed to marks, francs, or liras
Price Transparency
_ is always an independent variable; as a marketing tactic, managers can raise, lower, or maintain _s as part of the overall marketing strategy
Price(s)
A refrigerator can fulfill both _ and _ purpose given the type of country it is in
Primary; Secondary
The higher priority, less the likely it is that countertrade will be required
Priority Attached to the Import
Characteristics such as degree of standardization, perishability, bulk, service requirements, and unit price that have an impact on channels
Product
Is a good, service, or idea consisting of both tangible and intangible attributes that collectively create value for a buyer || user
Product
_ strategy in global marketing 3 key factors: 1. Product itself, defined in terms of the function or need it serves 2. The market defined in terms of the conditions under which the product is used the preferences potential customers, and customers' ability and willingness to buy 3. The adaptation and manufacturing costs to the company considering these products
Product Communication
The appeal of this strategy is that is a relatively low cost implementation, bc the product itself is unchanged, the company avoids additional big costs associated with this approach
Product Extension (Communication Adaptation)
A strategy that entails developing new products "from the ground up" with the world market in mind
Product Invention
Strategy where the same physical product ends up serving a different function or use than that for which it originally designed or created. In some cases, a particular country || regional environment will allows local managers a greater degree of creativity and risk taking when approaching communication task
Product Transformation
A frequently used framework for classifying products distinguishes between consumer and industrial goods
Product Type
A study in Scotland that identified Scotland's 4 key values
Project Galore
Communication about a company or product for which the company does not pay
Publicity
In the PR world it is sometimes referred to as "earned media"
Publicity
1 of 3 characteristics of global brands: *A global brand name differentiating itself and product offerings and allowing marketing to charge premium prices*
Quality Signal
1 of 3 characteristics of global brands: *Global brands competing fiercely with each other to provide world-class quality*
Quality Signal
Global Brands 3 Characteristics
Quality Signal, Global Myth, Social Responsibility
The major transportation mode choices are (Hint: 6)
Rail, Truck, Air, Water, Pipeline, Internet
Ads based on a _ depend on logic and speak to the audience's intellect. Based on consumers' needs for info, and typically contains a great deal of copy
Rational Appeal
Target costing was used in the development of _ a car that retails for less than $10,000 in to Luc-Alexander Menard
Renault's Logan
Grey Markets can impose several costs/consequences on global marketers, including: *Even though grey market goods carry the same trademarks as goods sold through authorized channels they may differ in quality, ingredients, or some other way. Grey market products can compromise manufacturer's reputation and dilute brand equity, as when prescription drugs are sold past their expiration dates or electronics equipment is sold in markets where it is approved for use or where manufacturers do not honor warranties*
Reputation and Legal Liability
Experienced exporters realize _ cost plus pricing approach can result in severe price escalation with the unintended result that the exports are priced at levels above what customers are wiling or able to pay
Rigid Cost Plus Pricing
Strategy used by companies to set prices without regard to the 8 considerations of *cost plus based pricing vs. export price escalation*
Rigid Cost Plus Pricing
Strategy where companies make no adjustment to reflect market conditions outside of the home-country
Rigid Cost Plus Pricing
The promise or claim that captures the reason for buying the product or the benefit that ownership confers
Selling Proposition
A grouping of stores in one place
Shopping Mall(s)
Where developers assemble an assortment of retailers that will create an appealing leisure destination; typically one or more large department stores serve as anchors
Shopping Mall(s)
Maslow's Hierarchy of personal needs
Social (belonging), Self Actualization
1 of 3 characteristics of global brands: *Customers evaluating companies and brand in terms of how they address social problems and how they conduct business*
Social Responsibility
Offers less variety than department stores, they are narrowly focused and offer a relatively narrow merchandising mix aimed at a particular targe market
Specialty Retailer(s)
Stores that offer a great deal of merchandise depth, high levels of customer service from knowledgeable staff, and a value proposition that is both clear and appealing to consumers
Specialty Retailer(s)
The key question for global marketers is whether the _ advertising message and media strategy must be changed from region to region or from country to country because of the environmental requirements
Specific
At the top of the Asian hierarchy is ) or the esteem of society as a whole
Status
Offer a wide range of aggressively priced grocery items plus general merch in a space that occupies half the size of hypermarket
Supercenter(s)
Are departmentalized, single story retail establishments that offer a variety of food and non-food items mostly on a self serve basis
Supermarket
Also known as "category killers"
Superstore(s)
The label many in the retailing industry use when talking about stores such as Home Depot, Ikea. Refers to the fact that such stores specialize in selling vast assortments of specific product categories in high volumes at low prices
Superstore(s)
Value creating activities within a company
Supply Chain
The _ in switch trading, provides a secondary market for countertrade or bartered goods and reduces the inflexibility inherent in barter and countertrade
Switch
A mechanism that can be applied to barter or countertrade. An arr. where a third party steps into a simple barter/other countertrade arrangement when one of the parties is not willing to accept all the goods received in a transaction
Switch Trading
Also called "triangular trade" and "swap"
Switch Trading
Knowledge of cultural diversity especially the _ associated with cultural traits, is essential for creating advertising
Symbolism
T || F: *A true global product is offered in all world regions, including the Triad and in countries at every stage of development*
T
T || F: *Almost every new product faces potential and surprising unexpected incompatibility it is important to test a product under "actual market conditions" before proceeding with full scale introduction*
T
T || F: *Communication experts generally agree that the overall requirements of effective communication and persuasion are fixed and do not vary from country to country*
T
T || F: *Generally speaking, channels tend to be longer (requiring more intermediaries) as the number of customers to be served to increases and the price per unit decreases*
T
T || F: *The issues of global pricing can be fully integrated in the Product Design process, and approach widely used by Japanese companies*
T
T || F: *The winners in a global competition are the companies that can develop products offering the most benefits and, in turn, creating the greatest value for buyers anywhere in the world*
T
A product's _ attributes can be assessed in physical terms, e.g. weight, dimension, or materials used
Tangible
Allocates costs to the product's various functions
Target Costing
Obeys the cardinal rule: If the design team can't meet the firm's goals the product should not be launched
Target Costing
Strategy that computes overall goal costs with the aim of ensuring the company's future profitability
Target Costing
Strategy that determines segments to be targeted as well as the prices that customers in the segment will be willing to pay
Target Costing
Japanese companies have traditionally approached cost issues in a way that *results in substantial production savings and products that are competitively priced in the global marketplace. This is an example of* _
Targeting Costing
In the United States gray market goods are subject to the _ of 1930
Tariff Act (1930) Sect. 526
The utility based on the *availability of a product/service when desired by a customer*
Time
Concerns *intracorporate exchanges* which are transactions between buyers and sellers that have the same corporate parent
Transfer Pricing
Refers to the pricing of goods/services and intangible property bought and sold by operating units or divisions of the same company
Transfer Pricing
Decision that concern the method, or "mode" a company should utilize when moving products through domestic and global channels
Transportation
An excellent mode for both long haul transcontinental transport and local delivery of goods
Truck(s)
Grey Markets can impose several costs/consequences on global marketers, including: *When grey markets emerge bc of price differentials that result from multinational pricing policies. However a variety of forces - including falling trading barriers - hamper a company's ability to pursue local pricing strategies*
Undermining Segmented Pricing Schemes
Marketing channel exist to create _ for customers
Utility
The higher the value, the greater the likelihood that countertrade will be involved
Value of Transaction
Occurs when a manufacturer conspires with wholesaler or retailers (i.e. channel members at different levels from the manufacturer) to ensure certain retail prices are maintained
Vertical Price Fixing
Discount retailer that *typically offers discount retailing through shoppers "joining" the club to take advantage of low prices on a limited range of products (3k - 5k products) many of which are displayed in their shipping cartons in a "no frills" atmosphere*
Warehouse Club(s)
Used to store goods until they are sold
Warehouse(s)
A _ of the home country can choose to cut export prices to increase market share, or maintain its prices and reap healthier profit margins
Weakening
A brand's components consist of
Word mark, Brand Symbol (Nonword Mark Logo)
The major lessons of new product introduction outside the home market has been that whenever a product interacts with human, mechanical, or chemical elements, there is the potential for a surprising and unexpected _.
incompatibility
New Product Continuum
(1) Continuous Innovation, (2) Dynamically Continuous Innovation, (3) Discontinuous Innovation
Global product planning strategy that adapts the product to local use or preference conditions while extending ,with minimal change, the basic home market communications strategy or brand name
(Product Adaptation Communication) Extension
In *convenience stores* products may be priced _-_% higher than supermarket prices
15, 20
Is a market entry strategy that entails purchasing a company with multiple retail locations in a foreign country
Acquisition
This strategy can provide the buyer with quick growth as well as access to existing brand suppliers, distributors, and customers
Acquisition
A strategy that involves changing elements of design, function, or packaging in response to needs or conditions in particular country markets
Adaptation
Pricing strategy that permits subsidiary or affiliate managers or independent distributors to establish whatever price they believe is most appropriate in their market environment
Adaptation/Polycentric
Any sponsored paid messages that is communicated in a nonpersonal way, often through mass media
Advertising
_ is a fast paced business and the _ agency world is fluid and dynamic
Advertising
The _ immediately hailed management's new attitude for transforming Mercedes "a staid and smug purveyor into an aggressive, market driven company that will go bumper to bumper with its luxury car rivals -even on price"
Advertising Age
The communications approach that relates to the motives of the target audience
Advertising Appeal
The key to understanding the word _ is that most of the firms identified are umbrella corporations or holding companies that include one or more "core" advertising agencies, as well as units specializing in direct marketing, marketing services, public relations, or research
Advertising Organizations
In the PR world it is sometimes referred to as "unearned media"
Advertising/Promotion
A company uses this advertising to present its point of view on a particular social, environmental, or cultural issue
Advocacy
A global campaign will result in the substantial benefits of cost savings, increased control, ad the potential creative leverage of a global _
Appeal
Considerations for advertising agencies: *Does the candidate agency cover all relevant markets*
Area Coverage
The visual presentation of an advertisement -the body language- is a matter of _
Art Direction
Te individual with general responsibility for the overall look of an ad is the _
Art Director
If a company is the sole supplier of a differentiated product, it can demand monetary payment
Availability of Products from other Suppliers
Involves industrial channels that deliver products to manufacturers or other organizations that then use them as inputs in the production process or in day to day operations
B2B
Consumer channels are designed to put products in the hand of people for their own use
B2C (consumer)
German chemical gian that has contingency plan to accept coutertrade deals with Greek buyers in teh agricultural sector
BASF
Describes the least complex and oldes form of bilateral, nonmonetized countertrade. Is the direct exchange of goods/services between two parties. Although no money is involved, both partners construct an approximate shadow price for products flowing in each direction
Barter
Two categories of countertrade
Barter, Mixed Forms
"That flash of insight that synthesizes the purpose of the strategy, joins the product benefit with consumer desire in a fresh, involving way, brings the subject to life, and makes the reader or audience stop, look, listen" -John O'Toole
Big Idea
Advertising agencies can be thought of as *"idea factories"* the Holy Grail in creative strategy development is something known as the _
Big Idea
Is the bridge between an advertising strategy, temporal worldly, and an image, powerful and lasting. The theory assumes that average consumers are at best bored and more likely irrational when it comes to deciding what to buy
Big Idea
A complex bundle of images and experiences in the customer's mind
Brand
Represents the total value that accrues to a product as a result of the company's cumulative investments in marketing of the brand
Brand Equity
Strategy that entails using an established brand name as an umbrella when entering new businesses or developing new product lines to represent new categories to the company
Brand Extension
Perceptions about a brand as reflected by brand associations that consumers hold in their *memories*
Brand Image
Considerations for advertising agencies: *Which kind of brand awareness does the company want to project? If the product needs a strong local identification it would be best to select a national agency*
Buyer Perception
The characteristics of both _s and _s have an important influence on channel design
Buyer/Product
This law calls for antidumping revenues to be paid to US companies harmed by imported goods sold at or below market prices
Byrd Amendment
Applies to a wide variety of products whose packaging is designed to protect or contain the product during shipping, at retail locations, and at the point of use or consumption
CPG (Consumer Packaged Goods)
The bad news of the internet's mode of transportation
Capability is low
Involves an analysis of each shipping mode to determine which mode or combination of modes, will be both effective and efficient in a given situation
Channel Strategy
The practice of accepting orders only from manufacturers with established demand for certain products and brands. Also take the form of selecting only a few choice items from a vendor's product lines
Cherry Picking
A variation of combination/tiered branding, in which 2+ different company or product brands are featured prominently on product packaging or in advertising
CoBranding
Whereby a corporate name is combined with a product brand name
Combination/Tiered Branding
A pricing strategy where the company will make significant profits from selling packages that are complementary to the main products in order for them be useful
Companion Product(s)
Video games, razor blades, dvd players are all examples of what type of pricing strategy
Companion Product(s)
Considerations for advertising agencies: *Companies that are decentralized typically allow managers at the local subsidiary to make ad agency selection decisions*
Company Organization
A form of countertrade that involves two separate and parallel contracts. In one contract, the supplier agrees to build a plant or provide plant equipment, patents or licenses, or technical, managerial, or distribution expertise for a hard currency down payment at the time of delivery. In the other contract the supplier company agrees to take payment in the form of the plant's output equal to its investment (minus interest) for a period up to 20yrs
Compensation Trading
Also called buyback
Compensation Trading
Essentially the success of _ rests on the willingness of each firm to both a buyer and a seller. China uses it extensively, Egypt also used this approach to develop an aluminum plant. Swiss co. Aluswiss the plant and takes back a percentage of the of the finished aluminum produced at the plant as partial payment for building the plant
Compensation Trading
Channel obstacles are often encountered when a company enters a _ market where brands and supply relationships are already established
Competitive
Refers to the practice of loading oceangoing freight into steel boxes measuring 20 x 40ft or longer. Offers many advantages, including flexibility in the products that can be shipped via container, as well as flexibility in shipping modes
Containerization
Because they represent incremental improvement, these products cause minimal disruption in existing consumption patterns and require the least amount of learning on the part of buyers
Continuous Innovation(s)
Least disrupting influence on established consumption patterns
Continuous Innovation(s)
Most new products fall into this category, typically the products are "new and improved" versions of existing ones and require less R&D expenditure to develop than dynamically continuous innovations
Continuous Innovation(s)
Offer some of the same products as supermarkets, but the merchandise is limited to high turnover convenience and impulse products
Convenience Store(s)
The *buyer orientation* framework includes
Convenience, Preference, Shopping, Specialty goods
The words that are the spoken in broadcast advertising or that constitute the written communication elements in advertisements are known as _
Copy
Language specialists who develop the headlines, subheads, and body copy used in print advertising and the scripts containing the words that are delivered by spokespeople, actors, or hired voice talents in broadcast ads
Copywriter(s)
Unlike regular advertising the object of it is not to generate demand by informing persuading, entertaining, or reminding customers. Instead in the context of IMC, it is often used to call attention to the company's other communications efforts
Corporate (Advertising)
What type of Transfer Pricing Method: *Achieves goal congruence often, but not always*
Cost
What type of Transfer Pricing Method: *Does not preserve subunit autonomy because it is rule based*
Cost
What type of Transfer Pricing Method: *Motivates managerial when based on budgeted costs*
Cost
What type of Transfer Pricing Method: *Useful for determining the full cost of products; easy to implement*
Cost
What type of Transfer Pricing Method: *Useful for evaluating subunit performance but is difficult unless transfer price exceeds full cost*
Cost
Strategy based on an analysis of internal and external costs
Cost Based Pricing
Uses an internal cost as the starting point in determining price. The way costs are defined may have an impact on tariffs and duties of sales to affiliates and subsidiaries
Cost Based Transfer Pricing
If the terms of the sale are _ and _ the seller is not responsible for risk or loss at any point outside the factory
Cost and Freight (CFR)
When goods are shipped _, _, _ named port
Cost, Insurance Freight (CIF named port)
A form of countertrade, also termed parallel trading/parallel barter
Counterpurchase
Is distinguished from other forms of countertrade in that each delivery in an exchange is paid for in cash
Counterpurchase
Generally involves a seller from the West historically relied heavily on _. This approach, which reached a peak in popularity in the mid-1980s is now used in some 100 countries. Within former Soviet Union, flourished in the 1990s, following the collapse of the central planning system
Countertrade
In this transaction a sale results in product flowing in one direction to a buyer; a separate stream of products and services, often flowing in the opposite direction, is also created
Countertrade
When perceptions of and attitudes toward particular countries often extend to products and brands known to originate in those countries; they become a part of a brand's image and contribute to brand equity
Country of Origin Effect
The way an appeal or proposition is presented. In other words, there can be differences between *what* one says and *how* one says it
Creative Execution
Simply a statement or concept of what a particular message or campaign will say
Creative Strategy
Consumer and industrial goods can be classified on the basis of _ such as *buyer orientation* with subcategories: convenience, preference, shopping, and specialty goods
Criteria
