MKTG20009 Global Marketing
What are the two factors that determine priority across country markets?
1 Ability to exploit market 2 Strategic importance
What are the three different types of brand architectures?
1 Branded House - one master brand 2 House of Brands - multiple, seperate product/service brands 3 Hybrid Structure - strong master brand and sub-brands - strong individual brand sand master brand endorsement
What are the two key goals of a globalised brand?
1 Clarity 2 Synergy Coherence of branding → consistency of branding across countries → requires managers/teams with clear authority to monitor brand positioning and to approve brand extensions worldwide
What are 7 factors influencing pricing?
1 Competition 2 Customers 3 General market environment - e.g. GDP, growth 4 Supplies 5 Distribution channels & sales force 6 Product portfolio 7 R&D, production, service & support, marketing, people
What are the three different levels of a product?
1 Core component - product platform - design features - functional features 2 Packaging component 3 Support/services component
What are the three broad factors that influence pricing in an international context?
1 Cost implications • Unit cost • Documentation, insurance, transport • Other distribution costs 2 Economic/legal factors • Tariffs and taxes (GST, VAT) • Purchasing power difference • Exchange rate fluctuations 3 Perceived value • Drives willingness to pay • Foreignness liability • State of product life cycle
What are the four sections of the CAGE framework?
1 Cultural distance 2 Administrative and political distance 3 Geographic distance 4 Economic distance
What are the four over-arching criteria for choice of country markets?
1 Demand 2 Supply 3 Competition 4 Other
What are the three common criteria used to segment the population?
1 Demographic → measurable characteristrics → e.g. age, gender, etc. 2 Behavioural → purchase behaviour → willingness to pay → benefits sought → usage 3 Psychographic → consumer traits, values, lifestyles, attitudes
What are the three steps for target pricing?
1 Estimate a target price for the product 2 Estimate volume of sales (range: high, low, expected) 3 Determine target profit
What are the seven steps for international pricing?
1 Estimate price of product landed 2 Estimate price intermediaries will charge after tariffs 3 Estimate target price for end users 4 Assess sales potential at that price and corporate goals 5 Select suitable pricing strategy and approach 6 Check consistency with current prices across product and markets 7 Monitor performance and adjust as necessary
What are the six different strategies for global expansion?
1 Exporting 2 Licensing 3 Strategic alliances 4 Joint venture or equity participation 5 Greenfield startup 6 Acquisitions
What are the three broad categories of strategies for global expansion?
1 Exporting 2 Partner based strategies 3 100% ownership
What are the four aspects of Porter's National Diamond Framework?
1 Factor Conditions - resource endowment - e.g. human resources, physical resources, capital, infrastructure, etc. 2 Demand Conditions - buyer sophistication - size & growth of national market 3 Related and Supporting Industries - world-class suppliers - opportunities to share/coordinate value chain activities 4 Firm Strategy, Structure, and Rivalry - competitor quantity and quality - entry barriers (e.g., cost advantages, government policies, etc.
What are the three steps to standardising advertising?
1 Generate creative ideas from worldwide pool of agencies & subsidiaries - local level 2 Transformation from idea to fully fledged campaign; idea needs to work universally (big idea) - global level 3 Local adaptations to be responsive to local market, while keeping the core idea - local level
What are the four tiers of a product market?
1 Global 2 Glocal 3 Local 4 Bottom-of-the-pyramid
How does cultural authenticity and global vs local scope determine the strategy for glocalization?
1 Global/cosmopolitan - global - no cultural authenticity 2 Creolisation - local - cultural authenticity 3 Expatriate (authentic other) - global - cultural authenticity 4 Nostalgia (authentic selfhood) - local - cultural authenticity
What are the four aspects of becoming a global company?
1 Globalisation of Capital base 2 Globalisation of Market Presence 3 Globalisation of Value Chain These all contribute to the globalisation of organisation and mindset.
What are the three partner-based strategies?
1 Licensing 2 Strategic alliance 3 Joint venture or equity participation
What are the two factors that determine the priority of a business unit?
1 Local adaption needs 2 Expected payoffs from globalisation
What are the two factors that determine approach to glocalisation?
1 Local vs Global scope 2 Cultural Authenticity
What are the five key factors that need to be taken into consideration when deciding what strategy for expansion?
1 Multinational experience 2 Distance (CAGE framework) 3 Assets/capabilities 4 Industry 5 Regulation
What are the four limitations of secondary data?
1 Often a proxy measure 2 Comparability between countries and within country data might be difficult - quality of data - differences in measurement - differences over time 3 Age of data 4 Often data lumped into broader categories
What are the three overarching risks when choosing a country market?
1 Political 2 Economic 3 Legal
What are the three different orientations of an organisational mindset?
1 Polycentric - each market is unique (multi-domestic MNC) - subsidiaries operate independently - complete value-adding chains in each market 2 Regiocentric - regional integration of marketing activities and other value-adding activities 3 Geocentric - global integration of all activities
What are the three broad challenges for primary data?
1 Preparation →correct translation → verbose language or long survey length → adaption of response categories e.g. income → interpretation of stimuli → research permits, visa for staff 2 Execution → difficult to obtain truly random samples → literacy/education differences → interviewer safety → respondent access → potential disruption due to instability → budget → research coordination 3 Interpretation → comparability issues → response bias → knowledge
What are six risks of a globally networked firm?
1 Supplier lock-in 2 Climate effects 3 Capability loss → e.g. quality loss 4 Complexity 5 Disruption 6 Scandal
What does foreign consumer culture positioning look like?
Language - Employing spoken or written words from the foreign culture in ads and/or brand name Aesthetic styles - spokesperson with characteristics that reflect the foreign culture - brand logos that are symbolic for culture Story themes - e.g. how French wine is traditionally made
What does global consumer culture positioning look like?
Language - English has come to signal internationalism to many consumers Aesthetic styles - Brand logos that are universal - use of globally known stars as spokesperson Story themes - conveying idea that people all over the world use the brand - appealing to certain human universals
What does global consumer culture positioning look like?
Language - Local language Aesthetic styles - local spokesperson - brand logos and overall advertising/package design that is symbolic for local culture Story themes - historic events of importance to nation, shared values
What is the law of one price?
Law of One Price: All customers in the market could get the best product available for the best price • in a true global market, this would prevail
What are the three different partner-based strategies?
Licensing: A contractual arrangement whereby one company (the licensor) makes a legally protected asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation. Strategic Alliance: Linkages among companies from different countries to jointly pursue a common goal. Joint Venture: An entry strategy for a single target country in which the partners share ownership of a newly created business entity.
What is the difference between a local, international, and global brand?
Local Brand: One that has achieved success in a single market. → some global companies create local products and brands to cater to the preferences of a particular market International Brand: Brands or products offered in several markets in a particular region Global Brand: A product or brand that meets the wants and needs of a global market and offered in all world regions
How does expected payoff and local adaption needs determine the priority given to a business unit?
Low payoff & high adoption = low priority High payoff & low adoption = high priority High payoff & high adoption or low pay off & low adoption = moderate priority Higher payoff = higher priority Lower adoption needs = higher priority
What is the difference between high and low context cultures?
Low-Context Culture: Messages are specific and explicit therefore words carry most of the communicating power High-Context Culture: Less information is contained in the verbal part of the message, more information resides in the context of communication.
What are the two forms of product standardisation?
Modularisation: Modular product architecture breaks down the product into standardised components known as modules - maximise the number of standardised modules (economies of scale Postponement: Reduce speculation by delaying product finalisation until orders are received - assemble components for all product options in earlier stages - allows more flexibility
What are nontariff barriers (NTB)?
Nontariff Barrier (NTB): A measure other than a tariff that deters sale of products in a foreign market. - Quotas - Discriminatory Procurement Policies - e.g. government rules that goods or services need to be purchased domestically - Restrictive Customs Procedures - Arbitrary Monetary Policies - Restrictive Regulations
What is the difference between offshoring and outsourcing as forms of value chain dispersion?
Offshoring: Geographic separation of value creation and value delivery and using location-specific advantage → separation to increase efficient production → location-specific advantage Outsourcing: Shifting value creation and delivery steps to the most productive provider. → ownership vs access to resources and capabilities
How does perceived value change through the product life cycle?
Peaks at rapid growth before competitive turbulance
What is power distance and the difference between high and low as a cultural dimension?
Power Distance: The extent to which the less powerful members of a society accept or expect power to be distributed unequally. High Power Distance: Accepts wide differences in power; great deal of respect for those in authority Low Power Distance: Plays down inequalities; employees are not afraid to approach nor in awe of their boss
What are different types of qualitative and quantitate primary data sources?
Qualitative - focus groups - in-depth interviews - observation Quantitative - surveys - experiments
How does ability to exploit the market and strategic importance determine the priority of a country market?
Rapid entry → high strategic & exploit Ignore → low strategic & exploit Phased-in entry → high strategic importance → low ability to exploit Opportunistic entry → low strategic importance → high ability to exploit
What is the self-reference criterion and how can you counteract it?
Self-Reference Criterion (SRC): Unconsciously referring to one's own values, beliefs, experiences and knowledge. Counteract SRC: 1. Define problem or goals in terms of home-country cultural traits, habits and norms 2. Define the problem in terms of host-country cultural traits, habits, and norms 3. Isolate the SRC influence and examine it 4. Redefine the problem without the SRC influence - solve for the host country market situation
What is the difference between product adaption, standardisation and invention?
Standardisation/Extension: Offering a product virtually unchanged (i.e. extending it) in markets outside the home country. → reflects ethnocentric orientation - assumes all markets are alike Adaption: Changing elements of design, function, or packaging in response to needs or conditions in particular country markets. → reflects global company and polycentric orientation - assumes all markets are different Invention: Developing products from the ground up with the world market in mind → reflects geocentric orientation
What is ethnocentrism?
The belief that one's own culture or company is superior (and knows best how to do things)
What is the means-end chain and its four layers?
The layers of a product that underpins the idea that consumers buy products in part to reflect their values and enact their lifestyles 1 Product attribute 2 Functional befit 3 Emotional benefit 4 Underlying personal value
What is channel length?
The number of layers in the distribution channel - short channels involve direct sales from manufacturer to end customers - long channels involve several intermediaries
What is transfer pricing?
Transfer Pricing: The pricing of goods, services, and intangible property bought and sold by operating units or divisions of the same company → at actual cost or market price → targets to reduce tax expenses → support new subsidiaries
What is uncertainty avoidance and the difference between high and low as a cultural dimension?
Uncertainty Avoidance: The extent to which members of a society are uncomfortable with unclear, ambiguous or structured situations High Uncertainty Avoidance: threatened with ambiguity and experience high levels of anxiety. Low Uncertainty Avoidance: Comfortable with risks; tolerant of different behaviour and opinions
What are the aspects of the value-adding chain?
Value creation activities - suppliers - input logistics - production Value delivery activities - distribution - sales - customers
What are the three overarching steps for primary data?
What do we need to know? • Defining the problem Where do we conduct the research? • Region • Country • City How do we design the research? • Research methods • Challenges
Creolization
When foreign influences integrate with local meanings; a process of borrowing and lending different aspects of culture according to the region almost creating a hybrid of different cultures. → local scope → no cultural authenticity
What are four limitations of partner-based market expansion strategies?
• Ongoing co-ordination costs • Split loyalties • Risk to proprietary assets • Under estimation of costs/ overestimation of synergies
What are three other/miscellaneous criteria for choosing a country market?
• Political risks (e.g., currency exchange restrictions, trade barriers) • Potential for social unrest • Economic risks
When is exporting an appropriate market entry strategy?
• Product does not need adaption • Low "border issues" and transport costs • Low nontariff barriers (NTB)
What are six political risks when choosing a country market?
• Trade policies including tariffs, import quotas • Forced ownership change • Discriminatory fiscal policies • Price controls • Currency exchange controls • Political volatility, terrorism, war, social upheaval etc.
What is administrative and political distance?
→ Absence of shared monetary or political association → Political hostilities → Weak legal and financial institutions
What are the prerequisites for effective advertising standardisation?
→ Brand leadership - brand manual - global brand management team/manager → Communication platform → Content management → Culture (sharing, interdependence)
What is economic distance?
→ Different consumer incomes → Different costs and quality of natural, financial, and human resources → Different information or knowledge
Why are markets becoming more globalised?
→ Different forces driving the convergence of markets → Result: Emergence of global markets for products that can be marketed in a standardised way → Companies can benefit from economies of scale → Beat competitors with high-quality products at comparatively low prices
What is cultural distance?
→ Different languages, ethnicities, religions, or social norms → Lack of connective ethnic or social networks
When is an 100% ownership strategy for market entry preferable?
→ If regulations permit full foreign ownership - most important factor →Need access to assets/skills such as distribution system, brands, local management talent, etc. → Need for speed → "Crowded" market → Have assets/skills that can be employed in the host market → If no suitable acquisition candidate exists
What is geographic distance?
→ Lack of common border, waterway access, adequate transportation or communication links → Physical remoteness → Different climates
When are partner-based strategies for market entry preferable?
→ Local market characteristics differ significantly from home market → Regulations require local equity participation → Government tends to favour local companies in contract bids → Potential for synergies
How do you segment the population from the means-end chain?
→ determine attributes of product → determine benefits from product → determine connection to personal values Find segment that matches these values.
What does ability to strategic importance mean for determining priority across country markets?
→ market size → growth rate → learning value ---- e.g. leading edge customers, products, and/or technology
What does ability to exploit market mean for determining priority across country markets?
→ similarity to current market → potential to leverage existing assets & infrastructure → intensity of competition - lower is better → non-market entry barriers - lower is better
Expatriate (Authentic Other)
A foreign, authentic item that still retains its foreign cultural authenticity. → cultural authenticity → global scope
What is the CAGE framework?
A framework to compare the distance between two countries when considering global expansion. The distance can be measured from - Cultural distance - Administrative and political distance - Geographic distance - Economic distance
What is Porter's National Diamond framework?
A framework to help managers understand a nation's comparative advantage 1 Factor Conditions - resource endowment - e.g. human resources, physical resources, capital, infrastructure, etc. 2 Demand Conditions - buyer sophistication - size & growth of national market 3 Related and Supporting Industries - world-class suppliers - opportunities to share/coordinate value chain activities 4 Firm Strategy, Structure, and Rivalry - competitor quantity and quality - entry barriers (e.g., cost advantages, government policies, etc.
What is value chain dispersion?
A strategy to add value for globally networked firms (GNF) where markets are located where demand occurs/develops, and production is located where productivity can be maximised. GNF organises value creation and delivery activities - may not own them or locate all of them in the home or host market - coordination and communication become central to holding network together
What is the difference between acquisition and greenfield start-up as 100% ownership market entry strategies?
Acquisition: Acquisition of an existing local company; sometimes stepwise acquisition of equity stakes → faster than market entry or expansion → potentially less expensive than greenfield Greenfield Start-up: Establishment of new operations from scratch. → can be expensive → require managerial time and energy
What are the pros and cons of licensing?
Advantages • Circumvent export barriers • Licensees have autonomy and can adapt licensed goods to local tastes Disadvantages • Limited market control • May have a short life if the licensee develops its own know-how
What are the pros and cons of a strategic alliance?
Advantages • Globalisation requires inter-corporate coordination • Benefit from shared production costs • Synergy Disadvantages • Partners share control over tasks, therefore management challenges • May need one or more partners • Race to leverage learning opportunities between partners
What are the pros and cons of joint ventures?
Advantages • Partners can share risk • Use the joint venture to learn about a new market • Synergy from combining value chain strengths • May be only way to enter country Disadvantages • Shared rewards between two companies • Control and coordination costs and issues may arise • Potential for conflict between partners • Joint venture partner could evolve into a stronger competitor
What is the difference between culture, attitudes, values, and beliefs?
Culture: Ways of living built up by a group of human beings that are transmitted from one generation to another. Attitude: A learned tendency to respond in a consistent way to a given object or entity. Belief: An organised pattern of knowledge that an individual hold to be true about the world. Values: An enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another
What is pricing based on perceived value?
Depends on - product-life cycle - increased competition
Whats the difference between direct and indirect exporting?
Direct Exporting: Most companies handle export operations within their own in-house export organisation. Indirect Exporting: Companies that do not handle exports in-house can export with the help of a variety of external organisations
What is distribution coverage and the three levels of it?
Distribution Coverage: Degree of market coverage i.e. availability of the product in geographic terms and/or across different retail outlets. 1 Intensive Coverage → aims to saturate the market → largely aims to saturate the market → long channels 2 Selective Coverage → a number of specific retail outlets → specific selling or service requirements 3 Exclusive Coverage → only one type of retail outlet/distribution partner
Nostalgia (Authentic Selfhood)
Domestic/local authentic influences that maintain local cultural authenticity. → cultural authenticity → local scope
What is the difference in pricing with a ethnocentric, polycentric or geocentric orientation?
Extension or Ethnocentric Pricing: The per-unit price of an item is the same no matter where the buyer is located Adaption or Polycentric Pricing: Allows subsidiaries, affiliate managers or indepdendent distributors to establish whatever price they feel is the most appropriate. Geocentric Pricing: Neither fixes a single price nor allwos subsidiaries or local distributors to make independent pricing decisions. Takes into account local factors when determining pricing
What is a globally networked firm (GNF)?
Firms where markets are located where demand occurs/develops, and production is located where productivity can be maximised - markets are located where demand occurs/develops - production located where productivity can be maximised - micro-separation of production activities
What is the difference between global, foreign and local consumer culture positioning?
Global Consumer Culture Positioning: A strategy that identifies a brand as a symbol of a particular global culture or segment Foreign Consumer Culture Positioning: Associates the brand's users, use occasions, or production origins with a foreign country or culture. Local Consumer Culture Positioning: Associates the brand with local cultural meanings, reflects the local culture's norms, and portrays the brand as consumed by local people in national culture, or depicts the product as locally produced for local consumers.
What is a parallel importing and grey markets?
Gray market goods are trademarked products that are exported from one country to another and sold by unauthorized persons or organizations. The act of importing goods from one country to another without authorization from the trademark owner. Parallel import schemes exploit price differentials among country markets.
What are the two 100% ownership strategies for global expansion?
Greenfield startups Acqusitions
What is the difference between individualistic and collectivistic as a cultural dimension?
Individualistic: People look after their own family and interests Collectivistic: People expect the group to look after and protect them
What are five competitive criteria for choosing a country market?
• Number & type of competitors (local-global) • Differentiation advantage • Marketing expenses • Number of products • Price positioning
What are the five dimensions of Hofstede's cultural dimensions?
1. Individualistic vs Collectivistic 2. Power Distance 3. Uncertainty Avoidance 4. Achievement vs Nurturing 5. Long-Term vs Short-Term Orientation
What are the 3/4 different strategies to add value in multi-national corporations?
1. International Integration Strategy - primary value creation is in a central location - value delivery is through exports from its central location. 2. Locally Responsive Strategy - value is created on a local for local basis - delivered through subsidiaries - for multi-domestic MNCs 3. Value Chain Dispersion - markets are located where demand occurs/develops - production is located where productivity can be maximised. - GNF organises value creation and delivery activities - Offshoring vs Outsourcing
Global/Cosmopolitanism
A citizen of the world, completely global, with no regional/separate culture attached. → no cultural authenticity → global scope
Glocalization
A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market
What is the country of origin effect?
COO serves as a cue from which consumers make inferences about a product, such as the product's quality and/or individual product attributes → Based on country stereotypes and experiences with products from these countries
What is countertrade?
Countertrade: Alternative finance methods where full or partial payment is taken in a form that is not money → generally involves seller from the west and buyer from developing country → higher the priority, less likely countrade required → higher value, greater likelihood of countertrade → if company is sole supplier, can demand money
What are five demand criteria for choosing a country market?
• Average income (e.g., GDP per capita) • Economic growth • Population • Product-market fit • Industry sales
What are two legal risks when choosing a country market?
• Changes in/compliance with relevant laws • Enforcement of intellectual property rights Examples of laws - product liability - marketing laws - anti-trust - environmental - data protection - anti-bribery
What are four supply criteria for choosing a country market?
• Costs & quality of local production • Distribution channels • Transport costs • Tariffs/quotas
What are three economic risks when choosing a country market?
• Exchange rate fluctuations • Inflation • Government credit worthiness
What are four ways to manage partner risk with partner-based market expansion strategies?
• Minimise likelihood of strategic conflict • Reduce over-dependence on one partner • Build visibility & partial management control • Control the eco-system around the venture
