Marketing Test 3
17) Why are packaging aesthetics an important consideration in global product marketing? (10.1.3)
"Eco-packaging" is a key issue today, and package designers must address environmental issues such as recycling, biodegradability, and sustainable forestry. important communication functions: Packages (and the labels attached to them) offer communication cues that can influence consumers when making a purchase decision. experts agree that packaging must engage the senses, make an emotional connection, and enhance a consumer's brand experience "Packages are creating an experience for the customer that goes beyond the functional benefits of displaying and protecting the object. Ex. Coca-Cola's distinctive (and trademarked) contour bottle comes in both glass and plastic versions and helps consumers seek out the "real thing."
4) What are customs duties? How do they work in controlling imported goods?
(8.4) divided into categories based on how they are calculated: as a percentage of the value of the goods (ad valorem duty), as a specific amount per unit (specific duty), or as a combination of both of these methods. ad valorem duty is expressed as a percentage of the value of goods. In countries adhering to GATT conventions on customs valuation, the customs value is the value of cost, insurance, and freight (CIF) at the port of importation. A specific duty is expressed as a specific amount of currency per unit of weight, volume, length, or other unit of measurement
18) Describe the guidelines that can assist marketing managers in their efforts to establish global brand leadership. (10.2.3)
1) Create a compelling value proposition for customers in every market entered, beginning with the home-country market. 2)Before taking a brand across borders, think about all elements of brand identity and select names, marks, and symbols that have the potential for globalization. 3)Develop a company-wide communication system to share and leverage knowledge and information about marketing programs and customers in different countries. 4)Develop a consistent planning process across markets and products. Make a process template available to all managers in all markets. 5)Assign specific responsibility for managing branding issues to ensure that local brand managers accept global best practices. 6) Execute brand-building strategies that leverage global strengths and respond to relevant local differences.
13) A true global strategic partnership is unique and different. Using the example of Sony's strategic alliance with Samsung, discuss attributes that are needed for a productive working partnership.
1) Two or more companies develop a joint long-term strategy aimed at achieving world leadership by pursuing cost leadership, differentiation, or a combination of the two. 2)The relationship is reciprocal. Each partner possesses specific strengths that it shares with the other; learning must take place on both sides. 3)The partners' vision and efforts are truly global, extending beyond their home countries and home regions to the rest of the world. 4)The relationship is organized along horizontal, not vertical, lines. Continual transfer of resources laterally between partners is required, with technology sharing and resource pooling representing norms. 5)When competing in markets excluded from the partnership, the participants retain their national and ideological identities. (See doc for Samsung comparison)
14) What Factors are necessary for a proposed global strategic partnership to be successful (9.3.2)
1) mission 2) strategy 3) governance 4) culture 5)organization 6)management (see doc for more info)
21) Describe the factors that should be considered in developing new products for international markets with particular emphasis on the consequences for not adequately testing new products. (10.6.3)
1)How big is the market for this product at various prices? 2)What are our competitors' likely moves in response to our activity with this product? 3)Can we market the product through our existing structure? If not, which changes will be required, and what costs will be incurred to make the changes? 4)Given estimates of potential demand for this product at the specified prices and estimated levels of competition, can we source the product at a cost that will yield an adequate profit? 5)Does this product fit our strategic development plan? whenever a product interacts with human, mechanical, or chemical elements, there is the potential for a surprising and unexpected incompatibility. Because almost everyproduct matches this description, it is important to test a product under actual market conditions before proceeding with full-scale introduction. A test does not necessarily require a full-scale test-marketing effort, but may simply involve observing the actual use of the product in the target market.
6) What are the differences between antidumping and countervailing duties? Under what conditions are these duties imposed?
Anti-Dumping Duties is a trade levy imposed by any government on imported products whose prices government officials deem too low In the United States, antidumping duties are assessed after the commerce department finds a foreign company guilty of dumping and the International Trade Commission (ITC) rules that the dumped products injured American companies. Countervailing duties, on the other hand, are additional duties levied to offset subsidies granted in the exporting country. Ex. The CVDs were intended to offset subsidies to Canadian sawmills in the form of low fees for cutting trees in forests owned by the Canadian government. The antidumping duties on imports of softwood lumber, flooring, and siding were applied in response to complaints by U.S. producers that the Canadians were exporting lumber at prices below their production costs
1) Export marketing is the integrated marketing of goods and services that are destined for customers in international markets. What does the marketing require?
Export marketing targets the customer in the context of the total market environment Product offered in home market is a starting point Product is modified as needed to meet the preferences of international target markets Requirements: 1) Understanding of target market environment 2) The use of marketing research and identification of a market potential 3) Decisions concerning product design, pricing, distribution channels, advertising and communications (the marketing mix) Post research on potential markets, there should be a personal visit to size up the markets first hand Confirm (or contradict) assumptions and research about market potential Gather additional data necessary to reach final go/no go decision Enable the company representative to develop a marketing plan in cooperation with the local agent or distributor
7) What are some of the entities that an exporter should be familiar with? Describe and explain the role played by each of these entities, separating those that have responsibilities from exporters from those that have no responsibilities from the exporters. (8.5)
Foreign Purchasing Agent: Purchasing agents who operate on behalf of, and are compensated by, an overseas customer Export brokers receives a fee for bringing together the seller and the overseas buyer Export merchants: Merchants who seek out needs in foreign markets and make purchases in world markets to fill these needs. Formally assigned responsibilities by the exporter: Export management companies: Term used to designate an independent export firm that acts as the export department for more than one manufacturer whose product lines do not compete with each other Manufacturers' export representatives One who can act as an export distributor or as an export commission representative. MEA does not perform the functions of an export department, and the scope of its market activities is usually limited to a few countries. Export distributors An individual or organization that has the exclusive right to sell a manufacturer's products in all or some markets outside the country of origin. Freight forwarders licensed specialists in traffic operations, customs clearance, and shipping tariffs and schedules; simply put, they can be thought of as travel agents for freight.
25) What are global retail categories? Describe these categories giving examples.
Global retailing, speciality retailers, supermarkets, convenience stores, discount retailers, hard discounters, hypermarkets, super centers, super stores, shopping malls, outlet stores, outlet malls (See doc for expanded notes)
10) McDonald's and other fast food restaurants have benefitted by using franchising as a mode of entry into different countries. What are the benefits of franchising and how does it differ from other modes of entry? (9.1)
Franchising: A contract between a parent company-franchisor and franchisee that allows the franchisee to operate a business developed by the franchisor in return for a fee and adherence to franchise-wide policies and practices. This is an appropriate entry strategy when barriers to entry are low yet the market is culturally distant in terms of consumer behavior or retailing structures. Appeal to local entrepreneurs who are anxious to learn and apply Western-style marketing techniques. McDonald's reliance on franchising to expand globally is a case in point. The fast-food giant has a well-known global brand name and a business system that can be easily replicated in multiple country markets. McDonald's headquarters has learned the wisdom of leveraging local market knowledge by granting franchisees considerable leeway to tailor restaurant interior designs and menu offerings to suit country-specific preferences and tastes Similar to Licensing because they both involve sharing of protected assets
20) What is the significance of innovation in global marketing? Describe different categories of innovation with examples. (10.5.5)
Innovation, the process of endowing resources with a new capacity to create value, is a demanding but potentially rewarding product strategy for reaching mass markets in less-developed countries as well as important market segments in industrialized countries. Ex. consider two entrepreneurs, working independently, who recognized that millions of people around the globe need low-cost eyeglasses. Robert J. Morrison, an American optometrist, created Instant Eyeglasses. These glasses utilize conventional lenses, can be assembled in minutes, and sell for approximately $20 per pair. Joshua Silva, a physics professor at Oxford University, took a more high-tech approach and came up with glasses with transparent membrane lenses filled with clear silicone fluid. Using two manual adjusters, users can increase or decrease the power of the lenses by regulating the amount of fluid in them. Professor Silva is currently CEO of the Centre for Vision in the Developing World, whose mission is to sell low-cost, self-adjusting glasses in developing countries
28) How can political turmoil and other adverse environmental conditions affect global marketing? (not my answer)
Look at doc for not my answer
16) Companies are faced with the decision whether to expand by seeking new markets in existing countries or seeking new country markets for already identified and served market segments. Faced with these situations, what are the strategies that can be followed? (9.7)
Strategy 1, country and market concentration, involves targeting a limited number of customer segments in a few countries. In strategy 2, country concentration and market diversification, a company serves many markets in a few countries. Strategy 3, country diversification and market concentration, is the classic global strategy whereby a company seeks out the world market for a product. Strategy 4, country and market diversification, is the corporate strategy of a global, multibusiness company such as Panasonic Corporation.
27) An export administrator, Beth Dorrell, notes, "A commodity raw material from Africa can be refined in Asia, then shipped to South America to be incorporated into a component of a final product that is produced in the Middle East and then sold around the world." In light of this statement, describe supply chain, value chain, and logistics. List and briefly describe the most important distribution activities. (12.4)
concept of the value chain is much broader: It is a useful tool for assessing an organization's competence as it performs value-creating activities within a broader supply chain. The latter includes all the firms that perform support activities by generating raw materials, converting them into components or finished products, and facilitating their delivery to customers. The specific activities an individual firm performs help define its position in the value chain. A company or activity that is somewhat removed from the final customer is said to be upstream in the value chain. A company or activity that is relatively close to customers—a retailer, for example—is said to be downstream in the value chain. Logistics, in turn, is the management process that integrates the activities of all companies—both upstream and downstream—to ensure an efficient flow of goods through the supply chain.
29) What does the term "logistic management" describe? What are some changes taking place in this type of management?
logistics management describes the integration of activities necessary to ensure the efficient flow of raw materials, in-process inventory, and finished goods from producers to customers. JCPenney provides a case study in the changing face of logistics, physical distribution, and retail supply chains in the twenty-first century. Several years ago, Penney's management team made a key decision to outsource most elements of its private-label shirt supply chain to TAL Apparel Ltd. of Hong Kong. Penney's North American stores carry almost no extra inventory of house-brand shirts; when an individual shirt is sold, EPOS scanner data are transmitted directly to Hong Kong. TAL's proprietary computer model then determines whether to replenish the store with the same size, color, and style. Replacement shirts are sent directly to stores without passing through Penney's warehouse system; sometimes the shirts are sent via air, sometimes by ship. (see doc for more)
22) Nestlé in Brazil is using door-to-door selling to reach low-income neighborhoods; Dell computers provides home delivery for its products; Avon is using sales representatives and other companies are using other methods to reach consumers. Describe different channels that can be used for reaching the customers. (12.1)
place utility (the availability of a product or service in a location that is convenient to a potential customer) time utility (the availability of a product or service when desired by a customer) form utility (the availability of the product processed, prepared, in proper condition, and/or ready to use) information utility (the availability of answers to questions and general communication about useful product features and benefits) utilities can be a basic source of competitive advantage and represent an important element of a firm's overall value proposition, choosing a channel strategy is one of the key policy decisions that management must make. What is appropriate in one country may not always br effective in another.
2) Exporting is considered as essentially a developmental process. What are the stages in which this process can be divided?
1. If the firm is unwilling to export; it will not even fill an unsolicited export order. This may be due to perceived lack of time or to apathy or ignorance. 2. The firm fills unsolicited export orders but does not pursue unsolicited orders. Such a firm is an export seller. 3. The firm explores the feasibility of exporting. 4. The firm exports to one or more markets on a trial basis. 5. The firm is an experienced exporter to one or more markets. 6. After this success, the firm pursues country- or region-focused marketing based on selected criteria. 7. The firm evaluates global market potential before screening for the "best" target markets to include in its marketing strategy and plan. All domestic and international markets are given equal consideration
24) Companies entering emerging markets for the first time must exercise particular care in choosing a channel intermediary. Generally, a local distributor is required. What are some of the guidelines that should be considered in selecting a distributor in order to avoid any problems? (12.2)
1. Select distributors. Don't let them select you. 2. Look for distributors capable of developing markets, rather than those with a few good customer contacts. 3.Treat local distributors as long-term partners, not as temporary market-entry vehicles 4.Support market entry by committing money, managers, and proven marketing ideas. 5.From the start, maintain control over the marketing strategy. 6.Make sure distributors provide the company with detailed market and financial performance data. 7.Build links among national distributors at the earliest opportunity. A manufacturer should attempt to establish links between its networks of national distributors.
26) What are the market entry expansion strategies which are available to retailers that wish to cross borders? Describe these strategies in detail. (12.3.3)
A) , acquisition is a market-entry strategy that entails purchasing a company with multiple retail locations in a foreign country. This strategy can provide the buyer with quick growth as well as access to existing brand suppliers, distributors, and customers B) Joint ventures and licensing Global retailers frequently use these strategies to limit their risk when targeting unfamiliar, difficult-to-enter markets. C) Franchising, is the appropriate entry strategy when barriers to entry are low, yet the market is culturally distant in terms of consumer behavior or retailing structures. D) Organic growth occurs when a company uses its own resources to open a store on a greenfield site or to acquire one or more existing retail facilities from another company. The success of this strategy hinges on the availability of company resources to sustain the high cost of the initial investment.
23) Dell's rise to a leading position in the global PC industry was based on Michael Dell's decision to bypass conventional channels by selling direct and by customizing computers. Discuss the importance of channel innovation, giving examples of piggyback marketing in emerging markets. (12.1.2)
Channel innovation can be an essential element of a successful marketing strategy. Michael Dell's decision to bypass conventional channels and instead sell direct and build computers to customers' specifications. Dell began life as a b-to-b marketer; its business model proved so successful that the company then began marketing directly to the home PC market. (12.2) cherry picking, the practice of accepting orders only from manufacturers with established demand for certain products and brands. Cherry picking can also take the form of selecting only a few choice items from a vendor's product lines. The cherry picker is not interested in developing a market for a new product, which is a problem for an expanding international company.
11) Companies like Anheuser-Busch, Corning Glass, and GM have learned a lot by using joint venture as a mode of entry into a foreign market. Some of their experiences are not very positive. What are the disadvantages of joint venturing? (9.2)
Cons: a company incurs very significant control and coordination cost issues when working with a partner. potential for conflict between partners (These disagreements often arise out of cultural differences) conflicts can multiply when the venture is formed among several different partners. Disagreements about third-country markets where partners view each other as actual or potential competitors can lead to "divorce." a dynamic joint-venture partner can evolve into a stronger competitor. "In an alliance you have to learn skills of the partner, rather than just see it as a way to get a product to sell while avoiding a big investment (see doc for more info)
9) Nike provides technical specifications to a subcontractor or local manufacturer for its products. What is this arrangement called and what are its major benefits and drawbacks? (9.1)
Contract manufacturing: provide technical specifications to a subcontractor or local manufacturer.The subcontractor then oversees production. Advantages: First, the licensing firm can specialize in product design and marketing, while transferring responsibility for ownership of manufacturing facilities to contractors and subcontractors. limited commitment of financial and managerial resources and quick entry into target countries, especially when the target market is too small to justify significant investment Disadvantage companies may open themselves to public scrutiny and criticism if workers in contract factories are poorly paid or labor in inhumane circumstances.
8) Recently "call centers" have mushroomed in countries like India, China, and the Philippines due to the outsourcing by many Western countries. What are some of the benefits and disadvantages to this method to the company that is outsourcing? What factors should be taken into account when deciding to outsource? (8.9)
Outsourcing: means shifting production jobs or work assignments to another company to cut costs. Factors to consider: management vision: factor costs and conditions customer needs public opinion Logistics country infrastructure the political environment exchange rates. Pro: Lower costs, greater flexibility Neg: fears and concerns over a "jobless" economic recovery
5) How can restrictive administrative and technical regulations create barriers to trade?
Restrictive administrative and technical regulations can create barriers to trade. These may take the form of antidumping regulations (Duties imposed on products whose prices government officials deem too low), product size regulations, and safety and health regulations. Some of these regulations are intended to keep out foreign goods; others are directed toward legitimate domestic objectives. For example, the safety and pollution regulations being developed in the United States for automobiles are motivated almost entirely by legitimate concerns about highway safety and pollution.
3) Governmental actions at times are designed to discourage imports and block market access. Why do governments want to curtail imports? Explain some of the barriers that are placed to discourage imports.
Tariffs: rules, rate schedule, and regulations (3 Rs) of individual countries affecting goods that are imported Duties: individual products/services that are taxed. "taxes that punish individuals for making choices of which their governments disapprove." Nontariff Barrier (NTB): measure other than a tariff that is a deterrent or obstacle to the sale of products in a foreign market. This includes quotas, discriminatory procurement policies, restrictive customs procedures, arbitrary monetary policies, and restrictive regulations. A quota is a government-imposed limit or restriction on the number of units or the total value of a particular product or product category that can be imported. discriminatory procurement policies can take the form of government rules, laws, or administrative regulations requiring that goods or services be purchased from domestic companies. Customs procedures are also considered restrictive if they are administered in a way that makes compliance difficult and expensive Discriminatory exchange rate policies are imposed to distort trade in much the same way as selective import duties and export subsidies. restrictive administrative and technical regulations can create barriers to trade. These may take the form of antidumping regulations, product size regulations, and safety and health regulations. Some of these regulations are intended to keep out foreign goods; others are directed toward legitimate domestic objectives.
19) Laws and regulations in different countries frequently lead to obligatory design. Giving examples, show how this can have an impact in global marketing (10.5)
This mandate may be seen most clearly in Europe, where one impetus for the creation of the single market was the desire to dismantle regulatory and legal barriers that prevented pan-European sales of standardized products. In particular, technical standards and health and safety standards created obstacles to marketing of such products. In the food industry, for example, there were 200 legal and regulatory barriers to cross-border trade within the European Union in 10 food categories. Among these were prohibitions or taxes on products with certain ingredients and different packaging and labeling laws. As these barriers are dismantled, there will be less need to adapt product designs, and many companies will be able to create standardized "Euro-products." Not complying with regulations can cause companies to be shut out of certain markets Moreover, the European Commission continues to set product standards that force many non-EU companies to adapt their product or service offerings to satisfy domestic market regulations. For example, consumer safety regulations mean that McDonald's cannot include soft plastic toys in its Happy Meals in Europe.
12) Why would any firm, whether global or otherwise, seek to collaborate with another firm, be it local or foreign? (9.3)
Today's competitive environment is characterized by unprecedented degrees of turbulence, dynamism, and unpredictability; thus global firms must respond and adapt to changing market conditions very quickly. To succeed in global markets, firms can no longer rely exclusively on the technological superiority or core competence that brought them past success. The disruption that is evident across a variety of industry sectors—from transportation to retailing to media to telecommunications—requires new vision and new approaches. In the twenty-first century, firms must look toward new strategies that will enhance environmental responsiveness. In particular, they must pursue "entrepreneurial globalization" by developing flexible organizational capabilities, innovating continuously, and revising global strategies accordingly
