International Business Chapter 18

When a large change in price produces only a small change in demand. (18.5)

inelastic

A segment of customer that spans multiple countries, transcending national borders. (intro)

intermarket segment

The systematic collection, recording, analysis, and interpretation of data to provide knowledge that is useful for decision making in a global company. It has (1) translation of questionaries and reports into appropriate foreign language (2) accounting for cultural and environmental differences in data collection. (18.1)

international market research

What are the two main regulatory influences on pricing? (18.5)

1) Antidumping regulations 2) Competition policy (such as those that control monopolies)

What is marketing the best function to communicate with R&D? (Intro)

1) Closeness to understanding market needs and wants 2) know whether to standardized or locally customized,

What are methods of overcoming cultural barriers? (18.4)

1) Cross-cultural literacy 2) Local inputs such as local advertising agency 3) develop a local sales force.

What are the three variables that can potentially jeopardized international communications? (18.4)

1) Cultural barriers 2) Source effects 3) Noise level

What are examples of basic data the companies want to collect in international market research? (18.1)

1) Date on the country and potential market segments (such as geodemographics) 2) Data to forecast customer demands within a specific country or world region (such as social, economic, consumer and industry trends) 3) data to make marketing decisions (such as product, distribution, communications, and price)

What are the six basic steps in international market research? (18.1)

1) Defining research objectives 2) Determining the data sources 3) Assessing the cost and benefits of the research 4) collect data 5) Analyzing and interpreting the research 6) reporting the research findings

What does defining the research objectives address? (18.1)

1) Defining the research problem 2) setting objectives for the international market research

What are the three core applications for applying business analytics? (18.1)

1) Descriptive 2) Predictive 3) Prescriptive

What is the augment for standardized advertising? (18.4)

1) Economic advantages (less cost per exposure) 2) Concerns that creative talent is scare so one large effort to develop a campaign will produce better results than 40 or 50 smaller efforts 3) Many brands are already global.

When does pull strategies work best? (18.4)

1) For consumer goods 2) When distribution channels are long 3) When sufficient print and social media are available to carry the marketing message

When does push strategies work best? (18.4)

1) For industrial products or complex new products 2) When distribution channels are short 3) When few print or social media are available

The rate of new product develop is typically higher in countries with what attributes? (18.7)

1) More money is spent on basic and applied research and development 2) Underlying demand is strong 3) Consumers are affluent 4) Competition is intense

What are examples of prominent international market research firms? (18.1)

1) Nielsen 2) Kantar 3) Ipsos 4) NPD

What are the two forms of research data that are used? (18.1)

1) Primary data: data collected by the global company and/or its recruited international market research agency for the purpose of addressing the research problem and objectives dined by the company 2) Secondary data: Collect by previous organizations, people, or agencies for the purpose other than specifically addressing the research problem and objectives at hand

What are the benefits of tight-cross functional integration among R&D, production, and marketing? (18.7)

1) Product development projects are driven by customer needs 2) New products are designed for ease of manufacture 3) Development costs are kept in check 4) Time to market is minimized.

What are the two aspects of analysis that interpreting the research? (18.1)

1) Statics 2) Cultural knowledge

What are the two conditions necessary for profitable price discrimination? (18.4)

1) The firm must be able to keep its national markets separate (Can engaged in arbitrage) 2) Different prices elasticity of demand in different countries.

What are factors that determine the relative attractiveness of push or pull strategies? (18.4)

1) The product type relative to consumer sophistication (how much do consumer know about a product) 2) Channel length (more length = more difficult to sell products) 3) Media availability (push is used when there is fewer mass media available or due to government strictions)

Why are there differences in consumer taste? (Intro)

1) culture and economic differences 2) conflicting viewpoints 3) local product alternatives

What are factors that determine the price elasticity of demand? (18.5)

1) income level (greater when income is lo) 2) Competitive factors. (Greater when competition is higher)

What is the augment against standardized advertising? (18.4)

1) one message might work in a country better than another 2) advertising may block implementation of standardized advertising.

What are the four main differences between distribution systems worldwide? (18.3)

1) retail concentration, 2) channel length 3) Channel exclusivity 4) Channel quality

When manager in an international business consider market segmentation what are two issues they need to address? (intro)

1) the differences between countries in the structure of market segments 2) Existence of segments that transcend national borders.

A retail system in which a few retailers supply most of the market. Usually found in developed countries with cars, refrigerators, freezers, and dual income. Has a short distribution length. (18.3)

Concentrated retail systems

How does economic develop effect the product attribute? (18.2)

Consumer behavior is influenced by the level of economic development of a country. Firms based in highly developed countries such as the United States tend to build a lot of extra performance attributes into their products. These extra attributes are not usually demanded by consumers in less developed nations, where the preference is for more basic products.

aggressive pricing designed to increase volume and help realized experience curve economies. (18.5)

Experience curve pricing

Choices about product attributes, distribution strategy, communication strategy, and pricing strategy that a firm offers its targeted markets. Known as the 4Ps (price, promotion, place, product). (Intro)

Marketing Mix

Can be defined as the use of advanced statistical technique (and software) to identify and build predictive models that can help identify trends and relationships not readily observed in descriptive analyses. (18.1)

Predictive analytics

can be defined as the use of management science methodologies (e.g. applied) mathematical techniques to guide a company in its endeavors to best use allocable resources. Basically an budget optimization tool (18.1)

Prescriptive analytics.

These includes experiments, clinical trials, observing and recording events and administering surveys with closed-end questions. Gains understanding of customer needs, wants, and purchase behavior via numerical data and computational techniques. (18.1)

Quantitative methods

Technology that facilities the sharing of information and buildings of virtual global networks and communi9ties. (18.4)

Social media

The concept containing the three aspects: Predatory pricing, multipoint pricing, and experience curve pricing. (18.5)

Strategic pricing

What is the advantage of dispersing R&D activities? (18.7)

allows a firm to stay close to the center of leading-edge activity to gather scientific and competitive information. and to draw on local scientific resources.

Sets a floor under export prices and limits firms' ability to pursue strategic pricing. (18.5)

antidumping regulations

A massive volume of structured and/or unstructured data that area so large they may be difficult to process using traditional database and software techniques. (18.1)

big data

a retail system in which there are many retailers, none of which has a major share of the market. Usually found in less developed countries. Has a longer distribution length. (18.3)

fragmented retail systems

The knowledge, skills, and technology that allow for the exploration as well as deeper investigation of a company's international business strategies and activities to gain insights and drive future strategy development and implementation. (18.1)

business analytics

The number of intermediaries that a product has to go through before it reaches the final consumer. IT is shorter if directly selling to the consumer and longer if selling through an import agent, wholesaler, or retailer. It is the longest if the countries distribution system is fragmented. (18.3)

channel length

The expertise, competencies, and skills of established retailers in a nation their ability to sell and support the products of international businesses. This can be difficult for sophisticated products that require significant POS assistance. (18.3)

channel quality

a subset of source effects, that extent to which the place of manufacturing influences products evaluations. (18.4)

country of organ effect

refers to the use of relatively simple statistical techniques to describe what is contained in the dataset. Such as an age bar chart that is used to depict Starbucks customers in New York. Get a rough picture of what the data looks like. (18.1)

descriptive

What are the functions of a global marketing function? (Intro)

determine when product standardization is appropriate, how to standardize it can be, and when it is not in the businesses best interest to standardize a product too much.

The means a firm chooses for delivering the product to the consumer. Usually determined by a firm's entry strategy. (18.3)

distribution strategy

Occurs whenever firms sell a product for a price that is less than the cost of producing it. (18.5)

dumping

A small change in price produces a large change in demand. (18.5)

elastic

A distribution channel that outsiders find difficult to access. Such as when retailer prefer to carry the products of established manufacturers with a national reputation. (18.3)

exclusive distribution channel

What is a method for creating cross-functional teams? (18.7)

is to establish cross-functional product development teams composed of representatives from R&D, marketing, and production. 1) Should be led by a high-power project manager with high status 2) The team should be composed of at least one member from each key function 3) The team should physically be in location, if possible, to create a sense of camaraderie and facilities communication 4) The team should have a clear plan and goal 5) Each team needs to develop its own processes for communication and conflict resolution.

Identifying groups of consumers whose purchasing behavior differs from others in important ways. such as geography, demography, social cultural factors, psychological factors, etc. Firms needs to differ their products for different segments. (intro)

market segmentation

Occurs when a pricing strategy in one market may have an impact on a rivals' pricing strategy in another market. An aggressive pricing in one market may elicit a response from rivals in another market. Can create price wars. (18.5)

multipoint pricing

The number of other messages competing for a potential consumer. Higher in developed countries. (18.4)

noise

What is the commercial success rate of R&D project? (18.7)

only about 11%

Reducing the price below fair market value as a competitive weapon to drive weaker competitors out of the market ("fair" being cost + some reasonable profit margin). Must have a favorable condition. (18.5)

predatory pricing

Exist whenever consumers in different countries are charged different prices for the same product or for slightly different variations of the product. prices may be low when there is competition. (18.5)

price discrimination

A measure of how responsive demand for a product is to changes in price. (18.5)

price elasticity of demand

A marketing strategy emphasizing mass media advertising as opposed to personal selling. (18.4)

pull strategy.

A marketing strategy emphasizing personal selling rather than mass media advertising. Cost and use of sales force. (18.4)

push strategy

These include in-depth interviews, observation methods, document reviews. Here the focus is broad-based questions aimed at gaining an in-depth understanding of the customer needs, wants, and purchase behaviors. (18.1)

qualitative methods

Effects that occur when the receivers of the messages (i.e. a potential consumers) evaluates the message on the basis of statue or image of the sender. (18.4)

source effects

What are the costs that drives up the spending on the primary data? (18.1)

survey development and sampling frame issues

How should a firm determine a distribution strategy? (18.3)

this is determined by the relative costs and benefits of each alternative, which vary from country to country and depends on the four factors (Retail concentration, channel length, channel exclusivity, and channel quality)