Final Exam International Marketing

7 Steps of International Communications and Challenges

1. An information source: Marketing executive with a product message to communicate. 2. Encoding: Message from the source converted into effective symbolism for transmission to a receiver. (problems of illiteracy, media availability, types of media) 3. Message Channel: Sales force and/or advertising media that convey the encoded message to the intended receiver. 4. Decoding: the interpretation by the receiver of the symbolism transmitted from the info source. (problems of decoding different meaning) 5. Receiver: Consumer action by those who receive the message and are the target for the thought transmitted. (combination of factors such as incorrect knowledge of use patterns, poor encoding, poor media, inaccurate decoding, etc) 6. Feedback: Info about the effectiveness of the message that flows form the receiver (the intended target) back to the info source for evaluation of the effectiveness of the process. 7. Noice: Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process and affect any or all of the other six steps. EXTERNAL influences.

International Advertising Process

1. Perform marketing research 2. Specify the goals fo the communication. 3. Develop the most effective messages for the market segments selected. 4. select effective media 5. compose and secure a budget based on what is required to meet goals 6. execute the campaign 7. evaluate the campaign relative to the goals specified. *Developing messages almost always represents the MOST DAUNTING TASK for international marketing managers.

Reducing the effect of Price Escalation

1. The exporter can attempt to shorten the distribution channel. It can bypass some intermediaries in the channel. 2. The product can be redesigned to remove costly features. 3. The firm can ship its products unassembled as parts and components, qualifying for lower import tariffs (by shipping unassembled goods 4. The firm may decide to move production sourcing to another country to take advantage of lower production costs or favorable currency rates.

Foreign Exchange Fluctuation on Pricing

A country's currency value changes vis-a-vis other currencies which could effect the price of its imports and exports.

Japanese Distribution Structure (Many and small) tight

A structure dominated by many small middlemen dealing with many small retailers. Channel is controlled by manufacturers Business philosophy is shaped by a unique culture. Laws that protect the small retailer from the dominance of large - scale retailers Has long been considered the most effective non tariff barrier to the Japanese market. Have the largest distribution system Logo Hausha is largest trading company in world. Trading Co = middle men

Active Pricing

Active instrument of accomplishing marketing objectives.

Channels of Distribution Structures

All consumer and industrial products eventually go thru a distribution process. A physical handling and distribution of goods. Promotion and display = TITLE: transfer of ownership. Buying and selling negotiations between producers and middlemen and between middlemen and customers. (This is most important from the standpoint of mktg strategy) Each country market may have a different distribution structure and often multiple structures. 1) Import Oriented Distribution Structure (Traditional) 2) Tight Distribution (such as Japan) 3) Traditional to Modern Channel Structures (small to large)

Integrated Marketing Communications

Coordinated use of a broad range of promotional tools to reach a target market. Advertising Sales Promotions Personal Selling Direct Selling Trade Shows Public Relations Social Media Blogs Sponsorship

Trade Show Participation

Customer can examine product, goodwill and contact cultivation, opportunities to meet govt officials, opportunities for market research and collecting competitive intel, Exporters are able to reach sales prospects in brief time period.

International Advertising

Decisions involving advertising are this most often affected by cultural differences among country markets. International consumers respond to advertising differently in terms of their culture, values, attitudes, beliefs, and perceptions.

Diffusion

Goal of diffusion researcher and marketer are to SHORTEN the time lag between introduction of an idea or product and its widespread adoption. Researcher = Evert Rodgers

diffusion characteristics

How fast info travels and is adopted Product lifecycle is shorter due to technology Products usually have to change due to mandatory/necessary requirements in a country 1. Relative Advantage: perceived marginal value of the new product relative to the old. (Higher RA = Higher diffusion) 2. Compatibility: with acceptable behavioral norms, values and so forth. (THIS ONE IS MOST INFLUENCED BY CULTURE) 3. Complexity: Degree of associated with product use. 4. Trial-ability: Degree of economic and low social risk associated with the product use. 5. Observability: ease with which the product benefits can be communicated effect the degree of its acceptance/or resistance.

Import Oriented Distribution Structures or Traditional Distribution Structure

Importer controls a fixed supply of goods. Selling a limited supply at high prices to a small number of affluent cx. Results in seller's market, market penetration and mass distribution ARE NOT NECESSARY. Demand exceeds supply. Local systems

Four distinctive characteristics of service

Intangibility Heterogeneity (variability) Inseparability (of production and consumption) Perishability A service can be marketed as an industrial or B2B service or B2C. Products are often classified as tangible whereas services are intangible. It cannot be separated from its consumption in creation. Individually produced and thus unique. Once created, it cannot be stored but must be consumed simultaneously with its creation.

Quality

Intense global competition is placing more emphasis on manufacturing quality products. Product life cycles are becoming shorter focusing on: quality products, competitive prices, and innovative products. Power is shifting from SELLER to BUYER. Customers have more choices with more companies competing for their attention. More competition and more choices means more power in the hands of the customer, driving the NEED for quality. Durability of the product is VERY important. High quality for value paid.

Brands in International Markets

It is the most valuable company resource. Brand image is at the very core of business ID/Strategy. Consumers in developing countries are more sensitive to brands.

Legal and Linguistic Constraints

Legal: In Germany is it is illegal to use COMPARATIVE terminology. Competitors can sue you. The directive covering comparative advertising allows implicit comparisons that do not name competitors but bans explicit comparisons between named products. Language is one of the major barriers to effective communication thru advertising. Different languages of different countries, different languages or dialects within one country, and the subtler problems of linguistic nuance, argument style, vernacular, and even accent. legal; fda regulations. must have 50-50 parter such as joint venture

What are the Two Dimensions of Quality?

Market-Perceived Quality and Performance Quality Both concepts are important but consumer's perception of a quality product often has to do more with market perceived quality than performance.

Complimentary Marketing

PIGGYBACKING Companies with marketing facilities or contacts in different countries with excess distribution capacity or a desire for a broader product line sometimes take on additional lines for international distribution; though the formal name for such activities is complementary marketing, it is commonly called piggybacking.

Market Perceived Quality

Perceived quality can be defined as the customer's perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives. And Consumption Experience. IMAGE ISSUE. - Ex: airlines, shoes, sports cars

Place of origin

Place of manufacture may affect product or brand IMAGE! Ethnocentrism can also have country of origin effects. National pride. Buy local effect. Countries are stereotyped on the basis of whether they are industrialized, in the process of industrializing, in the process of developing.

Leasing

Reduces the amount of investment required to place the product in service especially in less developed markets higher net income

Price Escalation

Refers to the added costs incurred as a result of exporting products from one country to another. Examples: Shipping costs, insurance, packing, tariffs, longer channels of distribution, addition of middleman margins, special taxes, admin costs. EXCHANGE RATE FLUCTUATIONS. H

Alternative Middlemen Choices

Seller must exert influence over two sets of channels: one in the home country and one in the foreign-market country Agent Middlemen: represent the principal rather than themselves. DO NOT TAKE TITLE to goods. Merchant Middlemen: Take title to the goods and buy and sell on their own goods.

Sales Promotion

Short Term efforts directed to the consumer or retailer to achieve such a specific objective as consumer product trial or immediate purchase.

Traditional to Modern Channel Structures

Still exist in MOST PLACES. Slowly giving way to NEW FORMS new alliances and new processes. Direct marketing, door to door, hypermarkets, discount houses, shopping malls, catalog selling, the internet, and other methods are bing introduced in an attempt to provide efficient distribution channels.

Product component model

Support Services Component Packaging Component Core Component

T or F: Customization is fueled by the internet.

T!

T or F: Due to the internet, cx have knowledge of products.

T!

T or F: Global performance is important but must be backed by quality performance in the long-run.

T!

Major communication media

TV AND RADIO

A global brand

The worldwide use of a name, term, sign, symbol, design, or combination.

Merchent Middlemen

They are MORE CONTROLLABLE than agent middlemen because they take the title (ownership) to manufacturer's good. Agent middlemen work on commission and do NOT take title to next place.

Skimming Pricing

This is used to reach a segment of the market that is relatively prices insensitive and thus willing to pay a premium price for the product (for value received). Companies use this when the objective is to reach the segment of a market that is relatively price sensitive.

Penetration pricing:

This is used to stimulate market growth and capture market share by deliberately offering products at LOW PRICES. Likely to lead to dumping charges.

Homologation

Used to describe the change MANDATED by local product and service standards. Such as packaging, safety, technical requirements. Mandatory adaption were more frequently the reason for product adaption.

Performance Quality

Viewed internally from the firm's perspective because consumers expect perfect quality to be given. It is a given for consumers most basic expectation that the product has to perform as specified.

Core components

product platform, design features, functional features, aesthetic appeal

Support Services Component

repair and maintenance, instructions, installation, warranties, deliveries, and the availability of spare parts, other related service

Packaging Components

trademark, brand name, price, quality, package, styling