International Business Ch 14

Degree of exposure

In promoting its product to the greatest number of potential customers, a marketer must determine the amount of exposure needed.

Distribution channel

The physical path that a product follows on its way to customers Companies develop their international distribution strategies based on two related decisions: (1) how to get goods into a country and (2) how to distribute goods within a country

Price escalation

When a product has a higher selling price in the target market than it does in the home market (or the country where production takes place

Promotion Mix

comprises a company's efforts to reach distribution channels and target customers through communications, such as personal selling, advertising, public relations, and direct marketing.

Transfer price

is a product's selling price when it is sold among a company and its subsidiaries _______ pricing can be used to manage global tax burdens by having subsidiaries in high-tax countries charge low prices for their output exported to affiliated parties

Push strategy

is a promotional strategy designed to pressure distribution channel members to carry a product and promote it to final users. -Implementing a push strategy can be difficult when distribution channel members (such as distributors) wield a great deal of power relative to that of producers. It can also be ineffective when distribution channels are lengthy -push strategies tend to be appropriate for inexpensive consumer goods characterized by buyers who are not brand loyal. A push strategy is also suited to industrial products because potential buyers usually need to be informed about a product's special features and benefits.

Price control

is an upper or lower limit placed on the price of a product within a country. Upper-limit price controls provide price stability when inflation is driving up prices. Lower-limit price controls can be used to help local companies compete against the less expensive imports of foreign companies or be used to ward off price wars.

Exclusive channel

is one in which a manufacturer grants the right to sell its product to only one or a limited number of resellers.

Arms length price

is the free-market price that unrelated parties charge one another. Governments may assign _________ prices on intra-company transfers to reduce tax evasion with the use of transfer prices.

Dumping

occurs when the price of a good is lower in export markets than in the domestic market

Intensive channel

one in which a producer grants the right to sell its product to many resellers When a producer wants its product to be made available through as many distribution outlets as possible

Worldwide pricing

one selling price established for international markets

One level channel

places only one intermediary between the producer and the buyer

Channel length

refers to the number of intermediaries between the producer and the buyer

Brand Name

the name of one or more items in a product line that identifies the source or character of the items

Two level channel

two intermediaries between producer and seller

Zero level channel (direct marketing)

producers sell directly to final buyers

Product/Communications Extension (Dual Extension)

-This method extends the same home-market product and marketing promotion into target markets. Under certain conditions, it can be the simplest and most profitable strategy. -The strategy also tends to be better suited for companies that use a global strategy with their products. -It can also be appropriate for global brands that have mass appeal and that cut across all age groups and social classes. -The strategy also is useful to companies that are the low-cost leaders in their industries: One product and one promotional message keep costs down.

Dual pricing

A pricing policy in which a product has a different selling price in export markets than it has in the home market

Pull strategy

A promotional strategy designed to create buyer demand that will encourage distribution channel members to stock a company's product -Developing and emerging markets typically have fewer available forms of mass media for use in implementing a pull strategy. Accordingly, it is difficult to increase consumer awareness of a product and to generate product demand -is most appropriate when buyers display a great deal of brand loyalty toward one particular brand name.

Distribution

Planning, implementing, and controlling the physical flow of a product from its point of origin to its point of consumption

Marketing communication

Process of sending promotional messages about products to target markets.

Value density

The value of a product relative to its weight and volume the lower a product's value density, the more localized the distribution system. Products with high value-density ratios include emeralds, semiconductors, and premium perfumes. These products can be processed or made practically anywhere and then shipped to markets because their transportation costs are small relative to their end values.

Product/Communications Adaptation (Dual Adaptation)

This method adapts both the product and its marketing communication to suit the target market. The product itself is adapted to match the needs or preferences of local buyers. The promotional message is adapted to explain how the product meets those needs and preferences. -very expensive

Product Invention

This method requires that an entirely new product be developed for the target market

Product Extension/Communications Adaptation

Under this method, a company extends the same product into target markets but alters its promotion. This approach helps companies contain costs because the good itself requires no alteration.

Product Adaptation/Communications Extension

Using this method, a company adapts its product to the requirements of the international market while retaining the product's original marketing communication.