Chapter 7 INternational Marketing
Economic considerations by marketers:
-the stage of economic development in different countries -economic infrastructure in these countries -consumer income of different countries -currency exchange rates in different countries.
Competitive advantage of Natiosn
1) Factor conditions 2) Demand conditions Related and supporting industries company strategy, structure, and rivalry
4 trends have changed global marketing
1) the decline of economic protectionism 2) the rise of economic integration 3) global competition among global companies for global customers 4) the development of a networked global marketspace
Licensing
3 main licensing variations: contract manufacturing contract assembly franchising
counsuer income of different countris
AS income grows in the developing countris, world trade will benefit.
Communication adaptation strategy
Advertising the same product in multiple countries in different ways.
Cultural ethnocentricity
Believe that your culture is superior to any other culture.
Dual adaptation strategy
Both the products and the promotion messages are changed from country to country.
Promotion strategies:
Communication adaptation strategy dual adaptation strategy
pure non-standardization
Company does everything differently
Global Scan
Cross-cultural study of consumers measured more than 250 beliefs and values and more than 1000 brand preferences. 5 key segments: strivers achievers pressureds adapters traditionals
Stage of economic development:
Developed countries- have somewaht mixed economies developing countries: moving from an agricultural to industrial economy
Global Companies (3 kinds)
Internation firms multinational firms transnational firms
Franchising
McDonalds en otro pais
Gross Domestic Product (GDP)
Monetary value of all goods and services produced in a country during a year.
Traditionals
OLDEST group, embody the oldest values of their country and culture, they want confortable routines and familiar products, they dont want to change.
Adapters
Older consumers they do not lose sight of their old ideas, they recognize and respect new ones. Prepared to try anything new.
Global marketing strategy
Practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
Quota
Restriction placed on the amount of a product allowed to enter or leave a country.
Semiotics
Seeks to understand the correspondence between symbols and their assigned meanings. Marketers want to avoid symbols taht might be wrong to use in different situations.
Transnational firms / Global marketing
Views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences. Use global marketing strategy.
Strategic alliances
agreements among two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation.
Direct investment
bigges commitment, which entails a domestic firm actually investing in and owning a foreign subsidiary or division.
Global brand
brands marketed under the same name in multiple counries with similar and centrally coordinated marketing programs.
Mixed approach (glocalization)
company goes into ach market and decdes which aspects of the company can be kept and which ones to change
Pure standardization
company uses the same busines model everywehre it operates. CHeapest an easiet ay to expand from coutnry to country
Company strategy,structure,and rivalry
conditions governing the way a nation's business are organized and managed, along with the intensity of domestic competition.
3 uncontrollable environmental factors:
cultural, economic, and political-regulatory climate factors.
Balance of Trade
difference between the monetary value of a nation's exports and imports
contract manufacturing
domestic company contracts with a foreign firm to make products according to specifications.
contract asembly
domestic company contrats with a foreign firm to assemble parts manufactured domestically that have been shipped to the foreign country.
International firm
engages in trade and marketing in different countries as an extension of the marketing strategy in its home country. They do not change their domestic marketing approach when introducing their products to aother countries.
global competition
exists when firms originate, produce, and market their products and services worldwide.
Global Market-Entry Strategies
exporting licensing joint venture direct investment
Joint Venture
foreing compnay and local firm invest together to create a local business.
Tariffs
government tax on goods or services entering a country, primarily service to raise prices on imports
Trade feedback effect
imports affect exports and viceversa
General Agreement on Tariffs and rade (GATT)
intended to limit trade barriers and promote world trade through the reduction of tariffs.
Cross cultural analysis
invovles the study of similarities and differences among consumers in two or more nations or societies. Invovles understanding values, customs, symbols, and language
Economic Espionage Act (1996)
makes it a federal crime in US
Multidomestic / Multinational marketing strategy
many different product variations , brand names, and advertising programs as countries in which they do business.
Political stability
marketers should study the national governments orientation toward foreign companies, investment, and trade.
Pressureds
mostly women, find it difficult to manage all the parts of their lives. They contend with constant economic, family, and work pressures, leaving little room for leisure and enjoyment.
Factor conditions
natural resources, education and skill levels, and wage rates
NAFTA
north american free trade agreement
Strivers
people who are farily young and lead extremly active lives.Their top priority is convenience. THey prefer products taht are instantly gratifying
achievers
people who are the same age as the strivers but who have already found succes the strivers are pursuing. The value status and quality and tend to set consumer trends
World trade organization (WTO)
permanent institution that sets rules governing trade between its member through panels of trade experts who decide on trade disputes between members and issue binding decisions
Protectionism
practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quotas
Countertrade
practice of using barter rather than money for making global sales
Foreign corrupt practices act (1977)
prohibits Bribing in US
Standardization:
pure standardization mied approach (glocalization) pure non standardization
Global consumers
refers to consumer groups living in many countries or regions of the world which have similar needs or seek similar features and benefits from products or ser`vices.
Economic Infrastructure
refers to the communication, transportation, financial, and distribution systems in a country which can affect the level of economic development. ex. bicycle is the preferred transpotation method in china, which ahs few navigable roads outtside major cities.
Bottom of the pyramid
refers to the largest but poorest socioeconomic group in the world
Trade regulations
rules that govern domestic business practices can serve as trade barriers.
Economic espionage
secret collection of trade secrets or proprietary information about competitors. Clandestine gathering of competitors trade secrets.
product adaptation strtegy
seeling the product w/ some adaptations that make it more approrpiate for the customer preferences, culture, or climate in a particular country.
product invention strategy
selling a totally new product to satisfy common needs across countries.
product extension strategy
selling virtually the same product in other countries.
Gray market (Paralllel Importing)
situation where products are sold through unauthorized channels of distribution. people will buy products in low price countries, and import them to high-price countries to make a profit. This is legal in US, but ilegal in Europe.
Consumer ethnocentrism
tendency to believe that it is inappropriate or immoral to purchase foreign-made products. "DONT buy products from China"
related and supporting industries
the existence of supplier clusters that can accelerate innovation. Firms and industries seek leadership in global markets need clusters of wood-class supliers that accelrate innovation.
microfinance
the practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necesary to begin small businesses or other income generating activities.
Demand Conditions
the size and sophistication of the market and the media exposure of products
Multinational firms
views the world as consisting of unique parts and markets to each part differently
Dumping
when a firm sells a product in a foreign country below its domestic price or below its actual cost.
Back translation
Translated word or phrase is re translated into the original language by a different translation to avoid unintended meanings
CAFTA-DR
US-central america -DR
Exporting
INdirect exporting involves an intermediary Direct exporting needs no intermediary, more profits.
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Currency exchange rate
-price of one country's currency expressed in terms of another country's currency, such as the US dollar expressed Japanese yen.
Product strategies
-product extension strategy -product adaptation strategy -product invention strategy