475 exam 2
What are some factors you need to consider regardless of which entry strategy your company chooses?
- Cultural and linguistic differences: These affect all relationships and interactions inside the company, with customers, and with the government. Understanding the local business culture is critical to success. Quality and training of local contacts and/or employees: Evaluating skill sets and then determining if the local staff is qualified is a key factor for success. Political and economic issues: Policy can change frequently, and companies need to determine what level of investment they're willing to make, what's required to make this investment, and how much of their earnings they can repatriate. Experience of the partner company: Assessing the experience of the partner company in the market—with the product and in dealing with foreign companies—is essential in selecting the right local partner.
What is an international distribution agreement and what kinds of things should it include?
- This document should cover regional exclusivity, purchase orders, product pricing, payment terms, warranty/liability, MAP (Minimum Advertised Price) policy, governing law and much more. - Have a lawyer draft the agreement. - If the distributor pushes for exclusivity, consider adding a clause to the agreement that measures performance quarterly and annually with minimum quotas for the distributor to continue holding exclusivity in that region. ex: you can make their annual minimum order amount $500,000 with each quarter broken down to a smaller amount of that total. Some companies opt to just have a minimum order quantity (MOQ) to gain exclusivity. Doing this depends on how quickly you are growing.
What impacts global pricing of a product?
- manufacturing cost, - market place, - competition, - market condition, -quality of product, - distribution channels, - country factors - company factors international pricing decisions also need to take account of tariffs, quotas, local taxes, subsidies, grants, currency exchange, rates, local purchasing power, local business and consumer characteristics
What does Unilever do to help managers adopt a rural mindset?
- requires managers to spend a month during their first year living in a village. - They see how rural consumers live, and get a firsthand perspective on their needs and aspirations. - That personal experience gives them insights that they could never gain from reading reports or conventional market visits.
What are the things that Unilever has done that have been successful to tap the rural consumer?
- tap woman to power sales - find grassroot distribution startegies - offer services rural customers need - create new channels for advertising - design products and set prices for rural customers - help managers adopt a rural mindset
what is the role of distributor for global companies?
-the distributor is essentially operating as your arm in that nation. - They are handling marketing, sales, PR, customer service and more. - Make sure they are set up to succeed and stay in touch with them monthly and quarterly to ensure they are updated on your product updates, promotions and any other changes they should be aware of.
partnering and strategic allience
A strategic alliance involves a contractual agreement between two or more enterprises stipulating that the involved parties will cooperate in a certain way for a certain time to achieve a common purpose adv: Shared costs reduce investment needed, reduced risk, seen as local entity dis: Higher cost than exporting, licensing, or franchising; integration problems between two corporate cultures
What does it mean that a quote is direct versus indirect?
Additionally, there are two methods—the American terms and the European terms—for noting the base and quoted currency. These two methods, which are also known as direct and indirect quotes, are opposite based on each reference point. direct quote = In this approach, foreign exchange rates are expressed in terms of how many US dollars can be exchanged for one unit of another currency (the non-US currency is the base currency). For example, a dollar-pound quote in American terms is USD/GP (US$/£) equals 1.56. This is read as "1.56 US dollars are required to buy 1 pound sterling." -> the domestic currency price of one unit of foreign currency. If you think about this logically, a business that needs to buy a foreign currency needs to know how many US dollars must be sold in order to buy one unit of the foreign currency. In a direct quote, the domestic currency is a variable amount and the foreign currency is fixed at one unit. An indirect quote = foreign exchange rates are expressed in terms of how many currency units can be exchanged for a US dollar (the US dollar is the base currency). For example, the pound-dollar quote in European terms is £0.64/US$1 (£/US$1). While this is a direct quote for someone in Europe, it is an indirect quote in the United States -> indirect quote states the price of the domestic currency in foreign currency terms. In an indirect quote, the foreign currency is a variable amount and the domestic currency is fixed at one unit. A direct and an indirect quote are simply reverse quotes of each other. If you have either one, you can easily calculate the other using this simple formula:
acquisition
An acquisition is a transaction in which a firm gains control of another firm by purchasing its stock, exchanging the stock for its own, or, in the case of a private firm, paying the owners a purchase price Acquisition is a good entry strategy to choose when scale is needed, which is particularly the case in certain industries (e.g., wireless telecommunications). Acquisition is also a good strategy when an industry is consolidating. adv: Fast entry; known, established operations dis: High cost, integration issues with home office
What are the multiple benefits/ purposes of an alliance? Who are strategic alliances beneficial for?
An alliance can serve a number of purposes: Enhancing marketing efforts Building sales and market share Improving products Reducing production and distribution costs Sharing technology Strategic alliances are also advantageous for small entrepreneurial firms that may be too small to make the needed investments to enter the new market themselves. In addition, some countries require foreign-owned companies to partner with a local firm if they want to enter the market.
What is a licensor versus licensee?
An international licensing agreement allows a foreign company (the licensee) to sell the products of a producer (the licensor)
Why is understanding consumer trust important for marketers?
Chinese consumers have a long history of being cheated by counterfeit merchandise. Many say they trust online celebrities, who largely portray themselves as regular people, instead of websites or brands. "For many, Chinese KOLs are the most trustworthy and authentic source of information, particularly as there are relatively few other ways to get information with the state controlling the media."
Stage 1: Preliminary analysis & screening: matching company/ country needs
Consider home-country AND host-country constraints (political, legal, economic, cultural differences, structures of distribution, competition, etc.) o Focusing on constrains we might have § political situations § culture -> how different is culture and what adaptations may I have to make § how much competition: are you better going off where there is no competition or is it better to have more competitors with an established demand § does this country make sense -> you may find a different country makes more sense o planning is crucial o evaluation of potential markets o thinking about company's strengths and weaknesses o develop screening criteria o what doesn't make sense, what does make sense ◦Evaluation of potential markets is first step! ◦ ◦Does your company's strengths & weaknesses, products, philosophies, modes of operations and objective match w/a country's constraining factors and market potential? Are there potential distribution channels? Are there marketing infrastructures? ◦Develop screening criteria to evaluate prospective countries! ◦ ◦Analyze countries and screen to eliminate those that don't offer sufficient potential for future consideration
What is GDPR? What are the 2 main principles of GDPR?
General Data Protection Regulation, is a European privacy law approved by the European Commission in April 2016. The GDPR regulates, amongst other things, how organizations may obtain, use, and store the personal data of EU residents
To what extent do these steps apply to a digital product or service?
If you have a product or service that is digital in nature and has endless inventory, then most of these required steps won't apply to you.
What is a base currency versus a quoted currency?
In general, when we quote currencies, we are indicating how much of one currency it takes to buy another currency. The quoted currency = the currency with which another currency is to be purchased. In an exchange rate quote, the quoted currency is typically the numerator. The base currency = the currency that is to be purchased with another currency, and it is noted in the denominator. For example, if we are quoting the number of Hong Kong dollars required to purchase 1 US dollar, then we note HKD 8 / USD 1. We read this quote as "8 Hong Kong dollars are required to purchase 1 US dollar."
How large should your customer base be before you begin establishing distribution abroad?
International customers should make up at least 25 percent of your customer base before you start establishing distribution abroad.
Why do Chinese brands favor acronyms? What are some pros and cons of using acronyms for this market?
It is a common type of alphabetic name used in global market. The most well-known acronym brand is IBM, which stands for International Business Machines. advantage: being short and easy for communication. con: But it lacks brand attributes and messages. Therefore, acronym always feels rational and technical without emotion, like a code.
What is the "upfront season" in TV advertising?
It's the advance-selling season in the spring when marketers can buy television commercial airtime (and digital ads) several months before the fall season begins.
Asia is not one homogeneous market. Why is that important?
Just because a marketing campaign is successful in one country, it does not mean that its success is guaranteed in another. Asia is a continent comprising multiple countries, each with its own unique culture — and brands looking to enter Asian markets should treat them as such.
How is a brand lifecycle different for smaller versus larger/ global firms?
LARGE = "Build brand equity for the long term With huge up-front investments, these organizations have developed brands that have lasted decades and continue to be relevant. However, such an orientation also leads to extensive research, obsessive testing, long innovation cycles, and huge investments to build awareness and distribution. It leads to product launch processes that take 18 -24 months. And it breeds a culture of risk avoidance, to the extent that some big companies haven't launched a new brand in years. SMALL = local companies that get to market faster, correct their mix as they get real consumer feedback, and invest in line with the revenues they generate.
How do local competitors compete w/global ones on price?
Local competition puts pressure on the global firms' pricing strategies. Many local-made products are high in quality and compete in global markets on the basis of lower price for good value. Local competitors often try to gain market share by reducing their prices. The price reduction is intended to increase demand from customers who are judged to be sensitive to changes in price.
- What are some benefits of standardization versus adaptation?
Lower costs of manufacturing possible (economies of scale!) Lower input costs (volume purchasing) Cost savings by eliminating efforts (marketing research, design, engineering) for product adaption Fast global product rollouts possible (don't need time to adapt) International customers may prefer same product worldwide Enhanced consumer perceptions of global brand
Stage 3: Developing the marketing plan
Situation analysis Strategy/ tactics Selecting mode of entry Budgets ◦Situation analysis ◦Select entry mode and specific action programs for the market(s) ◦Establish what is to be done, by whom and how and when ◦Include budgets, sales and profit expectations ◦Can still determine not to enter specific market if marketing objectives can't be met/ not a good fit! o Bringing in stage 1 and 2 and putting them together o Deciding how to enter the market o Not every country will allow you to enter o Understand how tariffs change over time o Budgets - Who is going to do it and where and when - At this point I still have not entered the market but I am trying to make that decision
Why are small brands succeeding in emerging markets? What are they doing better than large, global firms?
Small consumer brands are better built to create hyper-targeted products and distribute them locally. Global supply chains, built to make and move large volumes of more broadly attractive products, are inflexible by comparison. - Small companies are casting narrow research nets, and gaining real-time, direct insight into (and feedback from) niche consumer groups. -> They quickly use this information to develop and refine hyper-relevant products. - Big R&D processes, built to assess mass need, are cumbersome by comparison. And smaller companies are using social media and consumer engagement on the ground to great effect. They don't need the "stamp of quality" that comes with the backing of a long-established global company; consumers themselves are building brand trust in real time with their reviews, creating a new competitive arena in which smaller offerings can flourish through word of mouth.
What is the "terms of trade"?
The effect on the foreign price the price of a country's export goods divided by the price of its import goods. Here, since the importing country's import good will fall in price, the country's terms of trade will rise. Thus a tariff implemented by a large country will cause an improvement in the country's terms of trade.
How are sourcing and billing impacted when home country currency is stronger versus weaker?
When the home currency of the global marketer weakens, the exchange rates are supposed be favorable to the global marketer, because the home currency will fetch lesser in terms of the foreign currency, and hence the prices of the exported product in the foreign country's currency will come down. Therefore, the global marketer can cut prices in the foreign country, and hence, increase market share. When the domestic (home) currency of the US global marketer strengthens (e.g. U.S.$1 to 1.8315 euros and U.S.$1 to INR 70), where the US dollar will fetch more money in terms of the foreign currency, then this price situation is said to be bad for global marketers who manufacture their products in the US and sell them in the foreign (host) country, priced in the foreign currency. A weaker exchange rate (e.g. U.S.$1 to 0.8499 euros and U.S.$1 to INR 50) will fetch lesser money in terms of the foreign currency, while a stronger exchange rate will fetch more money in terms of the foreign currency.
What does digital ad span in Asia look like? What are Google and Facebook doing?
advertising money is flowing to in-app ads, which accounts for 98 per cent of mobile ads in the country. Consequently, Google and Facebook now account for more than 50 per cent of digital ad spent in the region and this percentage is growing every year. The big players have no plans to relinquish their power in Asia-Pacific either, which is evident through their continuous expansion in this part of the world. Facebook has ramped up operations in Asia with its first data centre in the region. This follows in the footsteps of Google who last year announced plans for its third data centre in Singapor
What is Pepsi's "for the love of it" tagline trying to achieve?
celebrate the pop and fizz of the cola like never before". the campaign is a move at "celebrating" what the brand stands for - an icon rooted in entertainment "For the love of it is our rallying cry, proudly saying to go all in for the things you love - from passions and interests like football and music, to unabashedly enjoying one of life's favorite treats - Pepsi,"
What is consent and what information do consumers need to know re: how their data is being used?
explicit permission first to use it. Users must be told how and why you are using the data, including: What: Explain what type of data will be collected/shared. It must be specific to distinct purposes (i.e., getting consent to track IP addresses doesn't mean you can later track e-mails too) With whom: You have to detail the specific vendors with whom you're sharing data Why: Purpose of why you're collecting and/or sharing the data Retention period: How long this data will be saved for Specificity: All of the above have to be explicit and clear; vague statements like "for marketing purposes" or "future research" aren't likely to be specific enough Changes: If you add in a new vendor or want to collect different data, you need new consent
is pricing harder in global markets?
global marketing adds a thicker layer of complexity, you need to be able to understand exchange rates, inflation rates
What are "sweeps"?
happen during set times during the year, when shows will suddenly start having special guests or huge must-see events (think, Cam and Mitchell's wedding on the ABC sitcom, "Modern Family" or the much hyped death of a major character on the drama, "The Good Wife"). n turn, Nielsen Holdings N.V. (NLSN) data and ratings from that period are used to determine advertising rates for local stations.
licensing
licensing = An international licensing agreement allows a foreign company (the licensee) to sell the products of a producer (the licensor) or to use its intellectual property (such as patents, trademarks, copyrights) in exchange for royalty fees. ex: you're sure that your product would be a big hit in Japan, but you don't have the resources to set up a factory or sales office in that country. You can't make the popcorn here and ship it to Japan because it would get stale. So you enter into a licensing agreement with a Japanese company that allows your licensee to manufacture coffee-flavored popcorn using your special process and to sell it in Japan under your brand name. In exchange, the Japanese licensee would pay you a royalty fee. Licensing essentially permits a company in the target country to use the property of the licensor. Such property is usually intangible, such as trademarks, patents, and production techniques. The licensee pays a fee in exchange for the rights to use the intangible property and possibly for technical assistance as well. adv: Fast entry, low cost, low risk dis: Less control, licensee may become a competitor, legal and regulatory environment (IP and contract law) must be sound
What is livestreaming? How is this tactic used in China?
lifestreaming = where social-media influencers largely promote products via posts and short videos online This year, 67% of advertisers said internet celebrities and influencers have become their preferred method of advertising in China Consumers in China are more receptive to brand recommendations by online celebrities than in any other country surveyed
What's typically the biggest cost of exporting?
marketing
In class, we talked about airlines and strategic alliances à how do they work?
o A group of airlines come together to form a strategic alliance o They are working together to come up with a program to make it easy for you as a consumer o Flying any of the airlines can give you benefits on the other one as well o Work together to create economies of scale o All separate entities working together
What impacts actual performance quality versus market‐perceived quality?
o Actual performance quality = if the plane takes off on time and get you to your place safety - from a performance quality standpoint, plane did its job o Market perceived quality = what do we perceive as consumers as quality -> what makes us satisfied or dissatisfied. we make assumption place will get us there safely - there are other factors to consider § Check in person was rude § Flight attendant was ride § Impacts perception of products o Another example: if I am a consumer in US I care how large fridge is, if it looks nice o In some countries people use small fridges -> focus on if fridge focuses in on style of the room o Not enough to just have good quality in US when you sell overseas i.e. candy company going to Russia -> gave non fancy products to Russia and they hated the quality ◦Important facets of quality depend on consumer needs ◦Global quality & maintenance of quality just as important
- Who controls the ad markets?
o America o China o japan
How does Boeing mode of entry differ from Airbus (both being airplane manufacturers)?
o Boeing = exporter - largest US exporter § Make their planes in US and exports them out o Airbus = consortia - huge number of companies that have joined together to create this product i.e. wings in one country, seats in another, ect. § Not buying from other people, but working together as individual companies to create this product and bring it to market
What is a brand, and what are some benefits of having a strong brand?
o Brand differentiates a company o Why is it that you are willing to buy north face over old navy o Why are we willing to pay more money? o Having strong brand name lets us charge price premiums o Acts as a barrier against competing brands because you already know about it ◦Help consumers identify and differentiate company's product offerings from competitors ◦Most valuable, intangible asset that companies possess ◦Enable companies to appeal to consumers, charge price premiums & command loyalty ◦Barrier against competing brands
- What is product homologation?
o Changes that are mandated by local product and service standards § i.e. changing voltage system, multilingual labels
- What is a joint venture and what are some common characteristics of joint ventures?
o Creating a separate legal entity o Companies working together o Sharing equity o If I'm in US and I have bracelet making skill and someone in china has cool technology so we are going to come together and create an entity o It is not about individual, its companies ◦Partnership of 2 or more participating companies that have joined forces to create a separate legal entity 4 core characteristics: ◦Establishes, separate, legal entities ◦Acknowledge intent by partners to share in the management of the JV ◦Partnerships between legally incorporated entities (companies, organizations, governments, NOT individuals) ◦Equity positions held by each of the parties ◦Common objectives: ◦Market entry ◦Risk/reward sharing ◦Technology sharing & joint product development ◦Conforming to government regulations oPartners want to maximize advantage for joint venture AND maximize own competitive position oJoint venture à developing shared resources; each firm wants to develop and protect its own proprietary resources Approx. 40% of Fortune 500 countries involved in 1+ International Joint Ventures!
exporting
o Direct: I am making bracelets and selling them to people in france o indirect: sell them to shops in france and the shops will sell them to end consumers - marketing and direct sales of our product to another country - do not need to invest in any foreign production facilities - not building plant somewhere - tariffs - easiest ◦Marketing & direct sales of domestically-produced goods in another country ◦Does not require good to be produced in target country (no investment in foreign production facilities required) ◦Most costs associating w/exporting = Marketing! ◦Exporting requires coordination amongst: ◦Exporter ◦Importer ◦Transport provider ◦Government
- When do we have to adapt products & communications, and when might one or the other stay the same globally? (refer to matrix in discussion slides).
o Duel extension = Same product and same communication i.e. apple o Product extension, communication adaption = same product, different communication i.e. why do people drink jager? Is it for a good time, after dinner drink -> varies by country so the communication strategies vary by country o Product adaptation, communication extension = different product, same communication i.e. ford focus positions itself the same regardless of where it is being sold but it adapts the product i.e. filters, bumpers o Duel adaptation = different product, different message
when is exporting a good idea and what are some pros and cons?
o Good idea: § Limited sales potential in target country: i.e. if you only are going to sell a small amount, no need to build a plant or partner - just export § Little product adaptation required § Distribution channels close to where you are making them § High target country production costs i.e. if cost of labor is high in another country so it wouldn't make sense to make them there § Liberal import policies - excepting of imports § High political risk - easy to say I am not going to go to that country anymore - no legal agreement Pros: o Quick speed of entry o Minimizes risk o Maximizes scale/use existing facilities o Easiest way Cons: o Outsider o Not a lot of access to what is happening in that country o Transport cost may be high o Trade barriers and tariffs -> maybe there was no tariff and now it has increased o Not a lot of control
- What are common adaptations marketers have to make when going abroad?
o How many items to place in a pack i.e. 4 or 10 o Changing the voltage system o Cars -> country is hot and dusty we may need to put different filter systems on the car o Selling chocolate in different country and they do not refrigerate - may need to take out dairy component to make sure product is shelf stable
- Why should global marketers care about product packaging?
o If im exporting, what should packaging be like - how will it ship: make sure it wont be damaged o Make sure way we package decreases shipping cost o Labeling requirements are different everywhere: what language to put it in - countries have different rules and you have to follow them o What do the consumers want the package to be like ◦International shipping must be considered ◦Packages create an experience (beyond functional) for a consumer
- How is global advertising spend (approx.) distributed across various mediums?
o Internet is highest o Tv o Outdoor o Newpapers o Radio o Magaiznes o Cinema
What does it mean that a brand is local? International? Global?
o Local = brand that achieves success in single national market i.e. single local brand in china -> present hurdles when trying to enter other countries that have a local brand because it is hard to compete with them o International = offered in several markets in particular region i.e. something sold in just US and Canda o Global = meets wants and needs of global market - all over the world § Typically use same brand name § i.e. BMW ◦Local product/ brand: achieved success in a single national market ◦Represent significant hurdles to global companies entering new country markets ◦In developing countries, global brands might be seen as overpowering local ones (resulting in backlash) ◦ ◦International product/ brand: offered in several markets in a particular region ◦Global product/ brand: meets the wants and needs of a global market; true global brand offered in all world regions ◦Global brands typically use same name, and sometimes similar image and positioning through out the world ◦E.g., BMW, Gillette, Nestle
- What kind of decisions have brands like McDonalds and KraftHeinz had to make with respect to products and brands globally?
o McDonalds changes what food they serve in every country i.e. no beef on the menu in India o They want to adapt to local culture but at the same time want to create that distinct flavor for their brand o It is too hard to compete with local brand on price - need to do something different o Kraftheinz: § baked bean pizza in UK § American style manonise in France § They make baby food but only in Canada - thre are products that are an American company but I don't sell certain products in US · See this a lot with drugs
- What has happened to global advertising spend overall?
o Over the last 20 years o Dipped in 2009 and 2020 o Internet will be at top o Stable from 2009 to 2019 then dropped o Digital advertising spend has gone up
strategic alliance
o Relationships established by 2 or more companies o Working together o Common in airline industry o Come up with program that reduces marketing cost and gives access to additional sources of products o Ex: star alliance and one world ◦Business relationship established by 2 or more companies ◦Cooperate out of mutual needs & share risk to achieve common objective ◦Why? ◦Opportunities for rapid expansion ◦Reduced marketing costs ◦Efficient production and innovation ◦Access to additional sources of products ◦Common in airline industry
- What is a consortia? How does it work?
o Similar to joint venture but usually there is a much larger number of participants and not a set number Ex: airbus ◦Frequently operate in a country or market where none of the participants are currently active
What is a greenfield venture?
o Specific type of foreign direct investment o Literally saying I am going to come into country and start construction from scratch o Highest degree of control o High degree of investment -> starting from the ground up ◦Country (usually multinational) launches venture from the "ground up" ◦Highest degree of control! ◦Same risks & costs with building new factories and manufacturing plants ◦BUT plant construction done to company's specs, employees trained to company standards, manufacturing processes ◦Greater risk & investment than other FDI (e.g., acquisition)
- What is the country‐of‐origin effect and why do we care?
o We have certain perceptions about things that come from certain countries o i.e. leather from Italy, cheese from France, cars from Germany are considered high quality o it is difficult if you do not have these associations to get people to try you product ◦Perceptions about and attitudes toward particular countries often extend to products and brands known to originate in those countries ◦E.g.., automobiles, electronics, fashion, beer, recorded music, certain food products ◦Perceptions & attitudes about product's origins can be positive or negative ◦Manufacturing reputation of a particular country can change over time
What is advertising in general? What do we mean by "global advertising"?
o advertising = any sponsored, paid message communicated in a non personal way o global advertising = consistent images, taglines, ect -> create consistent message § i.e. McDonalds im loving it is global ◦messages whose art, copy, headlines, photographs, taglines and other elements developed for worldwide suitability ◦E.g., McDonalds "I'm Lovin' It" , De Beers ("A Diamond is Forever") ◦Global campaigns w/unified themes à long-term brand & product identities à reduces costs associated w/producing ads
What is considered personally identifiable information per GDPR?
t includes, but isn't limited to: name, SSN, IP address, l at/long coordinates, cookie IDs, user agents, RFID numbers, mobile identifiers (IDFA/GAID/etc), e-mail, physical address, biometric/financial/behavioral/demographic data. It's also important to note that even "pseudonymised" data is PII if the pseudonym can be linked to an individual
Why do the prices of domestically produced goods rise when a tariff is implemented?
tariff will cause local producers of the product to raise their prices. Why? - When the price of imported goods rises due to the tariff, consumers will shift their demand from foreign to domestic suppliers. The extra demand will allow domestic producers an opportunity to raise output and prices to clear the market. In so doing, they will also raise their profit. Thus as long as domestic goods are substitutable for imports and as long as the domestic firms are profit seekers, the price of the domestically produced goods will rise along with the import price. For example, suppose the United States places a tariff on imported automobiles. Consumers of U.S.-made automobiles may fail to realize that they are likely to be affected. After all, they might reason, the tax is placed only on imported automobiles. Surely this would raise the imports' prices and hurt consumers of foreign cars, but why would that affect the price of U.S. cars? The reason, of course, is that the import car market and the domestic car market are interconnected. Indeed, the only way U.S.-made car prices would not be affected by the tariff is if consumers were completely unwilling to substitute U.S. cars for imported cars or if U.S. automakers were unwilling to take advantage of a profit-raising possibility.
Why is ensuring the right time of showing an ad on TV less important nowadays versus ensuring you are reaching the right audience?
technology changes how and when people watch programs. - If advertisers start to focus on targeting very select types of audiences, they can stop focusing on the exact time a show airs.
What does the author call "rural DNA"?
the ability to recognize the rural opportunity and to develop innovations to tap those markets along with their urban markets.
pricing
the amount of money a seller requires to provide products or services to a customer
What IS a price?
the value of a product offering that can be created through the different marketing mix elements, such as through product, distribution and communication decisions. Therefore, global pricing decisions are related to other marketing mix variables. pricing is the process of determining what a company will receive in exchange for its products pricing is the only revenue generating element.
glocal
◦(also known as pattern advertising)à "think global and act local" ◦Middle ground between standardization and adaption ◦Developing pan-regional or global communication concept where copy, artwork or other elements adapted as required for individual country markets o We think globally and act globally - but make necessary adjustments o Middle ground between standardization and adaptation o Where do we need to be closer to? o Developing communication where things are consistent and only adapt as necessary
Foreign direct investment
◦Direct ownership of facilities in the target country ◦Can be achieved by investing in or buying local companies or establishing new operational facilities ◦Can be made by acquiring existing entity or establishing new enterprise ◦Provides high degree of control in the operations and ability to better know the consumers and competitive requirement ◦Requires high resources and high degree of commitment ◦Capitalize on low-cost labor, avoid high-import taxes, reduce high costs of transportation - I'm putting myself fin the ground in that country - I may go purchase a facility - i.e. go into India and create plant in India and grow beans and open a shop - pro: don't have to pay taxes, tariffs - con: what if India changes laws and says we don't allow US people here - I may acquire an existing company there or establish something from the beginning - Highest degree of control because you are not outsourcing - you are on the ground
franchise
◦Franchiser provides standard package or products, systems, management services ◦Franchisee provides marketing knowledge, capital, and personal involvement in management ◦Vertical market integration ◦Common in many product categories including soft drinks, hotels, retailers, fast foods, car rentals, etc. o working on economies of scale o if I am a franchise, McDonalds itself has a lot of control, they do a lot of marketing, they do supply chain, own a lot of farms, o franchisor provides a lot of the systems i.e. registers, menus, help you get set up o franchisee - comes up with the capital, managing it o franchisor: risk is reputation could be ruined
contractual agreement
◦Long-term, non-equity (no money)associations between a company and another in foreign market ◦Transfer of knowledge (rather than equity) à transfer of technology, processes, trademarks, or human skills licensing and franchise
- What are sales promotions? What do we have to consider when designing sales promotions for international markets?
◦Marketing activities meant to stimulate consumer purchases ◦Cents-off, in-store demonstrations, samples, coupons, gifts, contests, sweepstakes, point-of-purchase displays ◦Used more internationally where consumer is hard to reach due to media limitations ◦E.g., Latin America -> Pepsi and Coca-Cola spend money on carnival trucks, frequent trips to outlying villages to promote products think about: ◦Are coupons considered to be embarrassing? Are they even legal? Are they on the package or distributed in the mail? ◦Can sweepstakes work, or is gambling discouraged? ◦What is the regulation for "standard" retail price and how frequently prices can be reduced for promotions?
licensing
◦Permits a company in target country to use property of licensor (e.g., trademarks, patents, production techniques) ◦Useful when capital is scarce, import restrictions forbid other means of entry, country is sensitive for foreign ownership, ◦Licensee pays a fee in exchange for rights (and technical assistance) ◦Little investment on part of licensor ◦Licensee produces and markets product ◦Common in pharmaceuticals ◦Risks: choosing wrong partner, quality & other problems, payment problems, contract enforcement, loss of marketing control. - I am going to let a company in a target country create my product or some version of my product o i.e. im working WITH a company in france and I am currently selling soda and I am making my product in the US and its 99% water and 1% chemical and I am paying huge fees to get my product overseas o on the other hand what I could be doing is have other country license my product (give them access to formula) and I don't need to ship water - they can either make formula there or im only shipping the small 1% o thus avoiding tariffs and shipping o this is something where my product is unique and not a lot of people make it and I have a proprietary recipe o little investment for me, but what if I chose the wrong partner
What are some pros and cons of using same brand name in U.S. and abroad?
o Pro: already known o Con: brand may not translate , product flops in a country, will that hurt brand name in US
What are perceived (versus actual) costs & benefits, and why are they important?
. Ideally, the customer would like to pay as little as possible to satisfy these needs. Therefore, for the business to increase value (i.e. create the competitive advantage), it can either increase the perceived benefits or reduce the perceived costs. percieved benefits: - status, - convenience, - the deal - brand, - quality, - choice Many of these benefits tend to overlap. Thus, providing value-added elements to the product has become a popular strategic alternative. Perceived costs include the actual dollar amount printed on the product, plus a host of additional factors. - inconvenience, - limited choice, - poor service - risk of making a mistake, - related costs - lost opportunity - unexpected consequences,
Why is foreign currency/ understanding foreign exchange rate important for international marketing?
- Any company operating globally must deal in foreign currencies. - It has to pay suppliers in other countries with a currency different from its home country's currency. The home country is where a company is headquartered. The firm is likely to be paid or have profits in a different currency and will want to exchange it for its home currency. - Even if a company expects to be paid in its own currency, it must assess the risk that the buyer may not be able to pay the full amount due to currency fluctuations.
Why is Asia‐Pacific an important market to understand?
- Asia Pacific is one of the largest regions worldwide based on its advertising spending
What are the various modes of entry
- exporting - licensing - franchising - partnering/ strategic alliance - acquisition - greenfield venture - new subsidiary
Why does the rural market have great potential?
- size
What are the three key ways that large, long‐established companies can compete w/the small brands? What are some risks/ downsides for the global firms?
1) Include smaller, local brands in your product mix and accept the increased complexity that comes with them 2) Adjust expectations about brand lifecycles and failure. 3) Put ideas at the center again
What are the 2 main principles of GDPR?
1. Consumers own their data: The GDPR enables EU citizens, not online vendors, to have the final say on how their data will be used. Thus, consumer consent is required for PII collection, sharing, and usage. The GDPR also introduces the idea of "data rights", whereby individuals have the right to see, edit, and delete data a 3rd-party has on them. 2. Companies need to protect this data: The GDPR imposes tighter restrictions on how companies handle PII. This includes limiting what they collect, adding better security protocols, hiring Data Protection Officers, having data breach notification plans, and more.
what are the 7 steps to take before distributing your product internationally?
1. consider setting up domestic distribution first 2. find target regions and create a go to market strategy 3. research and prepare to complete legal and trade certifications 4. consider language translation and product market fit 5. create an international distribution agreement 6. keep inventory in fufilment centers within nations you expand to 7. stay in touch with your distributors monthly and quarterly
What is a foreign subsidiary? What does it mean to be a "parent" in that domain?
A common form of FDI is the foreign subsidiary: an independent company owned by a foreign firm (called the parent). This approach to going international not only gives the parent company full access to local markets but also exempts it from any laws or regulations that may hamper the activities of foreign firms. The parent company has tight control over the operations of a subsidiary, but while senior managers from the parent company often oversee operations, many managers and employees are citizens of the host country.
Who is (or who should we consider) as the "customer" when we set prices?
A customer can be either the ultimate user of the finished product or a business that purchases components of the finished product. It is the customer that seeks to satisfy a need or set of needs through the purchase of a particular product or set of products.
What is pinyin? What are some advantages of a pinyin name?
And can be perceived as the "globalization" of Mandarin/Chinese language. adv: these names are simple and easy for foreigners to pronounce. So they are well accepted in the global market. The advantage of Pinyin name is keeping the consistency with the Chinese name in pronunciation. Pinyin also conveys a strong sense of Chinese culture. It is a good naming strategy for brands that want to emphasize or promote Chinese culture. Even some international brands adapt such a strategy. The key is to make sure the pronunciation fits the foreign language habit and the meaning or connotation fits the brand tonality.
Why do Chinese brands matter/ why do we talk about them and care about them?
China's economy achieved an incredible growth. From 1952 to 1970, China's GDP increased by 3 times; from 1970 to 1990, 8 times; from 1990 to 2010, 22 times Meanwhile, some Chinese brands start to take important shares in global market
exporting
Exporting is the marketing and direct sale of domestically produced goods in another country. advantages: Fast entry, low risk, easiest disadvantages: Low control, low local knowledge, potential negative environmental impact of transportation
How do customers make decisions re: price?
From a customer's point of view, value is the sole justification for price. Many times customers lack an understanding of the cost of materials and other costs that go into the making of a product. But those customers can understand what that product does for them in the way of providing value. It is on this basis that customers make decisions about the purchase of a product. It is the customer that seeks to satisfy a need or set of needs through the purchase of a particular product or set of products
Stage 4: Implementation & Control
Measure performance Correct for error ◦Planning process is dynamic! ◦Continuous marketing crucial o How are you doing there o Correct for errors o Constantly making changes o How are we doing o Who is buying the product o What is happening with shipping rates and tariffs
Stage 2: Define target market and adapt marketing mix accordingly
Product (adaptation, brand name, features, packaging, service, warranty, etc.) Price Promotion (advertising, personal selling, sales promotions, media, message) Place (logistics, channels) o 4 P o who am I going to reach in that specific country o whole country or specific segment in that country o how do I adapt product? Do I need to? § May need to adapt a food product o Do we need to change brand name to make it easier for consumers to grasp it? o What features should we have o How to package? Small or large bottles o Is warranty common? o How to price it? -> exchange rate and inflation are important § If pesos get weaker then I might lose money on product o Ex: global manager nestle coffee and we are thinking about expanding into Europe o What questions should we ask o Are there identifiable market segments o what adaptations do we need to make in terms of pricing, how much to sell 1. Are there identifiable market segments that allow for common marketing mix tactics across countries? 2. Which cultural/ environmental adaptations are necessary for successful acceptance of the marketing mix? 3. Will adaptation costs allow profitable market entry?
What are the 4 typical stages of global market entry?
Stage 1: Preliminary analysis & screening: matching company/ country needs Stage 2: Define target market and adapt marketing mix accordingly Stage 3: Developing the marketing plan Stage 4: Implementation & Control
What is a "product"? How are products classified?
product = o Good, service or idea with tangible and intangible attributes that collectively create value for buyer/user o Commonly classified into consumer and industrial/B2B (selling to other organizations) ◦Products typically are associated w/various brands
Why are in‐app ads a good idea for this market?
The Asia-Pacific region is a hotbed of mobile advertising, set to outgrow the Americas and EMEA within a few years. - In-app ads should be considered due to their potential in engagement levels. In Southeast Asia, particularly Indonesia, apps are a growing prominence due to the ubiquity of smartphone usage and gaming. Thus, it serves as a promising market for advertisers who can then utilise rewarded ads. - Reason being, people who watch these ads are essentially "opting in" to watch the ads, making them more open to discovery and less annoyed with traditional mobile ads
What is a "spread" in exchange rates?
This chart tells us that when you land in Thailand, you can use 1 US dollar to buy 31.67 Thai baht. However, when you leave Thailand and decide that you do not need to take all your baht back to the United States, you then convert baht back to US dollars. We then have to use more baht—32.32 according to the preceding figure—to buy 1 US dollar. The spread between these numbers, 0.65 baht, is the profit that the bank makes for each US dollar bought and sold. The bank charges a fee because it performed a service—facilitating the currency exchange.
How have large U.S. publishers revised their content strategies?
U.S. publishers taking a more extreme approach and either blocking pages entirely in Europe or pulling advertising altogether. U.S. publishers in revising their consent strategies," said Kane. "Similar to what we saw in the U.K., there are many publishers who had a 'day one' solution for GDPR and are now wanting to run more robust processes for the long term, both for GDPR as well as the U.S. privacy laws."
Franchisor versus franchisee?
Under an international franchise agreement, a company (the franchiser) grants a foreign company (the franchisee) the right to use its brand name and to sell its products or services. The franchisee is responsible for all operations but agrees to operate according to a business model established by the franchiser. the franchiser usually provides advertising, training, and new-product assistance.
- What is the international communications process? How does it differ from the communications process within the U.S.?
o Encoding: message to convey - how to we translate it into appropriate meaning o Message chanel: how to convey it o Decode: how does consumer make sense of message o Noise: what else is happening o A lot of these processes are similar in US but noise is significantly lower than global
franchising
Under an international franchise agreement, a company (the franchiser) grants a foreign company (the franchisee) the right to use its brand name and to sell its products or services. The franchisee is responsible for all operations but agrees to operate according to a business model established by the franchiser. In turn, the franchiser usually provides advertising, training, and new-product assistance. ex: mcdonalds adv: Fast entry, low cost, low risk dis: Less control, licensee may become a competitor, legal and regulatory environment (IP and contract law) must be sound
greenfield venture
adv: Gain local market knowledge; can be seen as insider who employs locals; maximum control dis: High cost, high risk due to unknowns, slow entry due to setup time
What is a tariff?
any tax or fee collected by a government
How has GDPR impacted NYT and advertising?
blocked all open-exchange ad buying on its European pages, followed swiftly by behavioral targeting. Instead, NYT International focused on contextual and geographical targeting for programmatic guaranteed and private marketplace deals and has not seen ad revenues drop as a result, all the ads running on European pages are direct-sold. digital advertising revenue has increased significantly since last May
What is the impact of a large, importing country placing a tariff on an imported product for the foreign country (where it's imported from)?
cause the foreign price to fall. The reason? - The tariff will reduce imports into the domestic country, and since its imports represent a sizeable proportion of the world market, world demand for the product will fall. The reduction in demand will force profit-seeking firms in the rest of the world to lower output and price in order to clear the market.
What is happening to global CPG brands in emerging markets?
facing a competitive wake-up call. Executives of well-established companies in this space know that the alarm bell has been ringing for some time as they lose ground to smaller, more local brands — but responding effectively has proven difficult.
what is the easiest P to change?
price
