MARK 4360 Test 4 (Chp 13-16)

Rational Approach

Depend on logic and speak to consumer's intellect; based on the consumer's need for information

What are the issues and problems that may arise in sales promotions?

- Fraud - Regulations vary by country - Cultural dispositions to coupons and other sales promotions.

What are the components of the international promotional mix?

- International advertising - International sales force management - International sales promotion - Public Relations and publicity

What are the 2 approaches when considering advertising appeal?

- Rational Approach - Emotional Approach

Local Campaigns

- Tailored to local needs. - Retailer cooperation is of particular importance. - Gain in importance and impact in markets not reached by other media. Bounty paper towels in Holland: point of sale displays and mailed sample paper towels to households Give free samples of Coke light in major grocery stores in Holland

Global media decisions include

- preparing a new copy for foreign market sin host country's language - Translating the original copy into target language - Leave some or all copy elements in home country language

Trade Promotions

- promotions aimed at other businesses and not at the final consumer -Includes: trade shows and exhibitions, usually once a year to display and demonstrate their offerings to the target market

Online sales promotions

- quickly becoming a pervasive mode of communication with potential consumers. EX: sweepstakes, coupons, promotional pricing

One of the most important decisions of firms designing their international promotional mix is whether to

- standardize (globalize) their promotional strategy (standardization of the advertising strategy) - to adapt their promotional mix to each country or market (adaption of the advertising strategy) - or to create local campaigns

Sampling

-a promotional program that allows the consumer the opportunity to try a product or service for free -May be distributed in stores, in the mail, through print media, at events, or door-to-door

What percent of Europeans and U.S. consumers make their purchase decision at the point of sale?

50%

Marlboro is one of the official sponsors of Ferrari's Formula 1 team. This is an example of

Event sponsorship -Marlboro's sponsorship of the Ferrari team at Formula 1 is an example of event sponsorship public relations.

A third-country national is also known as a local

False -A third-country national is an expatriate working in a country other than his/her home country or the home country of the company.

Adaptation of the promotional strategy refers to changing a company's promotional mix so that it is uniform in most of its target market

False -Adaptation of the promotional strategy entails changing the promotional mix for optimal appeal to each individual country or market.

Couponing

A sales promotion activity that involves the use of printed certificates which entitle the holder to a reduced purchase price Coupons are valued for similar reason by: - 52% Canadians - 50% of Brits - 48% of Germans - 47% of India - 31% of Chinese

Adaption of the promotional strategy refers to changing a company's promotional mix so that it is uniform in most of its target markets

False -Adaption of the promotional strategy entails changing the promotional mix for optimal appeal to each individual country or market.

Countries with a shortage of soft currency reserves are more likely to engage in counter-trade.

False -Countries with a shortage of hard currency reserves are more likely to engage in countertrade.

Expatriates working in a particular foreign country are either home-country nationals or host-country nationals.

False -Expatriates working in a particular foreign country belong to two categories: one category is the home-country national, and the other is the third-country national.

An advantage of hiring home-country nationals for international operations is that they are less expensive for the company

False -Home-country nationals are the most expensive expatriates the company can send on an international assignment. They are preferred by companies whose products are at the forefront of technology and when the selling function relies on extensive training and highly specialized information.

Organizational culture refers to personality traits shared at the national level

False -Organizational culture refers to shared norms and values that guide collective behavior in organizations.

The European Union Directive Concerning Television Broadcasting limits all advertising of tobacco and prescription drug products in all media.

False -The European Union Directive Concerning Television Broadcasting prohibits only tobacco and prescription drug advertisements on television.

Trade shows are an example of consumer sales promotion

False -Trade shows and exhibitions belong to the category of business-to-business promotion. They are also referred to as international trade promotion — sales promotion aimed at the trade.

a protectionist strategy aimed at protecting a national industry in its infancy from powerful international competitors.

Infant industry argument

a pricing strategy in which different prices are charged in different markets, reflecting different markets, reflecting differences in consumer purchase power, distribution costs, tax systems, or other market traits.

Local pricing

Porsche helping Harley-Davidson to produce its water-cooled Revolution engine is an example of which type of strategic alliance?

Manufacturing

a pricing strategy used intra-firm sales for commercial transactions between units of the same corporation, within or beyond the national borders of the parent company, whereby products are priced at market cost, rather than at the cost incurred by the company.

Market-based transfer pricing

Local newspapers that are unable to produce high enough quality in a print ad for a global brand are an example of what media challenge?

Media Reliability -Media reliability refers to the extent to which the existing media reliably reach the target consumer in the intended format and within the intended time frame.

In Asian countries, what approach to selling would work best?

Modest, exhibiting a humble attitude -A hard sell is not likely to be successful in most Asian countries, where modesty, a humble attitude, and respect are seen as valuable traits.

Which of the following types of sales promotion can be varied from one market to another?

Modular Campaigns -Modular campaigns provide a template that can be varied from market to market. Multinational companies often launch worldwide a promotional campaign centered on one theme and then use advertising to customize the message for each individual market.

Which of the following refers to interference in the communication process attributed to cultural differences, competing messages, and degree of consumer interest?

Noise -Noise refers to all the potential interference in the communication process, particularly noise attributed to cultural differences, which may interfere with proper message reception.

What company was responsible for initiation a countertrade relationship with the Soviet Union in the late 1960s?

Pepsi

What company was responsible for initiating a countertrade relationship with the Soviet Union in the late 1960s?

Pepsi -Pepsi initiated countertrade with the Soviet Union, agreeing to an exchange of Pepsi syrup and bottling equipment in return for international distribution rights to Stolichnaya vodka.

What are non-personal mediums?

Print mediums, Broadcast mediums, Interactive mediums (websites)

What are personal mediums?

Salesperson going door-to-door, Telemarketer, Trade show

What city hosted World Fair Expo 2010?

Shanghai

What city hosted the World Fair Expo 2010?

Shanghai

If a firm's objectives are centered on generating high profit and recovering product development costs quickly, it is likely to use which one of the following international pricing strategies?

Skimming -A skimming strategy is used when competition is limited. This allows the firm to price the product higher than competitors, allowing for a higher profit margin.

pricing strategy in which a product is priced above that of competitor's products, when competition is minimal; consumers responding to skimming strategies are more concerned with quality, uniqueness, and status, rather than pricing

Skimming strategy

currency that is kept at a high artificial exchange rate, overvalued, and controlled by the national central bank.

Soft currency

uniform price worldwide.

Standardized pricing

What type of countertrade involves buying a party's position in a countertrade in exchange for hard currency and selling it to another customer?

Switch trading

the process of buying a party's position in a countertrade in exchange for hard currency and selling it to another customer.

Switch trading

What type of countertrade involves buying a party's position in a countertrade in exchange for hard currency and selling it to another custom

Switch trading -Switch trading involves buying a party's position in a countertrade in exchange for hard currency and selling it to another customer. Professional switch trading firms typically purchase products that are not accepted by the seller as payment for products and, for a commission, sell them on the market at a discount.

Which of the following is a non personal medium of the international communication process?

Television

Which of the following is a non-personal medium of the International Communication Process

Television

Selling proposition

The promise or claim that captures the reason for buying the product or the benefit that ownership confers

a pricing strategy used in intra-firm sales for commercial transactions between units of the same corporation, within or beyond the national borders of the parent company.

Transfer pricing

Which of the following is NOT an external economic or financial factor affecting pricing decisions

Transfer pricing -Inflationary pressures, shortage of hard currency, and fluctuating exchange rates constitute external economic and financial factors that the company does not control. Transfer pricing is a pricing strategy that the firm can use for intrafirm sales.

Billboards are used in captive environment such as bus and metro stations

True

According to the text, what international organization often uses advocacy advertising?

Benetton -Benetton's advertising is an example of advocacy advertising, used by a company to stress a particular point of view. Its current advocacy topic is global warming.

In the international communication process, the sender can evaluate the effectiveness of the message with appropriate feedback from the target market

True

a complex form of countertrade whereby countries trade products up to a certain amount stated in a particular, mutually agreed-on hard currency and within a given time frame, and, when an imbalance occurs and one country owes money to the other, swing credits are paid in an greed-on hard currency.

Clearing account / clearing agreement

Companies use the promotional mix to

Communicate with international consumers about their products and services.

In the international communication process, the sender can evaluate the effectiveness of the message with appropriate feedback from the target market.

True

dumping is defined as selling products at cost to get rid of excess inventory and to undermine competition.

True

dumping represents a problem if it threatens to cause injury to an established industry in a particular market and if it delays the establishment of a viable domestic industry.

True

hard currency that is accepted for payment by any international seller

True

Billboards are used in captive environments such as bus and metro stations.

True - Billboards are used in captive environments such as bus and metro stations. They tend to be smaller than typical outdoor billboards

Which of the following is an example of sales promotion?

D. All of the Above -product tie-ins -free samples -cents-off -These three promotions are offered to stimulate purchases or improve relationships to intermediaries and retailers in the short term. They fall in the category of sales promotion

Which of the following is not an example of media restriction?

D. All of the above -prohibiting advertising to children -prohibiting the advertising of vice products -keeping the local language pure

currency that is accepted for payment by any international seller.

hard currency

terms of sale used in transactions.

incoterms

International advertising formats:

kiosks, Fences, billboards, and bus stops rather than TV

The medium may be a ______ medium or a ______ medium.

non-personal; personal

a large, hard-currency purchase, such as the purchase of defense equipment, airplanes, telecommunications networks, railway or road building, and other expensive civil engineering projects whereby the seller agrees, in return, to purchase products that are valued at a certain percentage of sale.

offset purchase

a form of trade that involves two exchanges that are paid for in cash; it involves two parallel contracts whereby the seller agrees to purchase products that are usually unrelated to its business from the buyer and sell them on international markets.

parallel barter / counter purchase

a distribution system not authorized by the manufacturer whereby the products purchased in a low-price market are diverted to other markets.

parallel imports / gray market

pricing strategy in which a product is first priced below the price of competitors' products to quickly penetrate the market at the competitors expense and then raised to target levels.

penetration pricing

amounts paid within the framework of a clearing agreement by the country that owes money to the other when an imbalance occurs.

swing credits

Creative Execution

the way an appeal or proposition is presented

How do companies motivate expatriates?

All of the above -Guaranteed promotion -Travel and other allowances -Finding spouses employment in the country of assignment -The intrinsic aspects of motivation for an international assignment are addressed in the recruiting process, which ensures that only those candidates who have the appropriate traits are sent overseas. The company controls the extrinsic aspects of motivation, such as compensation, leave and family policies, and career incentives.

To relieve reverse culture shock, companies can

All of the above -keep an employee updated with office e-mails. -offer promotion on return to the home country. -fly an expatriate back regularly for meeting -In addition to keeping in close contact with the expatriate throughout the assignment period, companies use certain strategies to prepare him or her for repatriation, such as updating the employee on changes in the organization, flying the expatriate back to the home country often, and offering a promotion on return.

A manufacturer may charge different prices in different markets for the same product

All of the above -to meet target market needs. -due to changes in the exchange rate. -due to differences in wholesale prices. -A manufacturer can charge different prices in different markets for the same product to meet the needs of target consumers who have a limited purchasing power, to keep the product price competitive in markets that are actively targeted by competition, to meet the needs of consumers in the countries with the weakest currency, and to address differences in wholesale prices in different markets.

What are some preferred traits of expatriates?

All of the above. -Sensitivity to others -Willingness to gain international knowledge -High level of resiliency -In the process of recruiting expatriates, companies should select individuals who have cultural sensitivity and awareness, the ability to change their behavior in cross-national settings, a high level of resiliency, extensive international knowledge or willingness to gain it, and a desire to go overseas

The budgeting decision that is mostly used by small and medium-sized corporations' campaigns is the

All-you-can-afford method

Dumping represents a problem if it threatens to cause injury to an established industry in a particular market and if it delays the establishment of a viable domestic industry.

True -According to the World Trade Organization, dumping should be condemned if it threatens to cause injury to an established industry in a particular market and if it delays the establishment of a viable domestic industry.

Aggressive export pricing involves pricing products below market price to penetrate new markets

True -Aggressive export pricing is defined as pricing below market to penetrate new markets; a downside of exports priced well below fair market value is that they might place the company at risk for dumping challenges.

Companies must consider legal and ethical issues with consumer sales promotions. In Germany, "buy one, get one free" offers are illegal

True -Companies need to adapt their sales promotions to local markets to conform to legal requirements, which could vary from country to country even in markets where there is regional political and economic integration.

Dumping is defined as selling products at or below cost to get rid of excess inventory and to undermine competition.

True -Dumping is defined as selling products at or below cost says at cost aboveto get rid of excess inventory and to undermine competition.

Hard currency is currency that is accepted for payment by any international seller

True -Hard currency is currency that is accepted for payment by any international seller, and soft currency is currency that is kept at a high artificial exchange rate, overvalued, and controlled by the national government.

In low-context cultures, what is said is precisely what is meant

True -In low-context cultures, what is said is precisely what is meant. In high-context cultures, the context of the message, including the characteristics and role of the sender, is equally meaningful.

Glamour, Cosmopolitan, and Mademoiselle are all examples of global media.

True -Magazines such as Glamour, Cosmopolitan, and Mademoiselle are published in languages ranging from Mandarin and Italian to Polish and Japanese. These magazines are vehicles for global, regional, and local advertising campaigns of multinational companies.

The main purpose of public relations is to generate positive publicity about a company.

True -Public relations is defined as a concerted effort on the part of a company to generate goodwill among its publics (community, government, consumers, employees, among others).

Communication about a company that the company does not pay for is defined as publicity

True -Publicity is defined as a communication about a company and the company's products that the company does not pay for. The communication can be either positive or negative.

Reverse culture shock is a feeling of anxiety experienced after returning to the home country.

True -Reverse culture shock is a general feeling of anxiety associated with a longing for the international environment left behind or fear of not adapting in the new environment and losing one's job due to lack of fit.

Emotional Approach

Tugs at the heartstrings or uses humor

International Advertising

a non personal communication by an identified sponsor across international borders, using broadcast, print, or interactive media.

pricing strategy that prices products below market price to penetrate new markets.

aggressive export pricing

a manufacturer may charge different prices in different markets for the same product.

all of the above - to meet target market needs - due to changes in the exchange rte - due to differences in wholesale prices

duties that must be paid by firms as a punishment for engaging in unfair price competition.

antidumping duties

Sales Promotion

any paid consumer or trade communication program of limited duration that adds tangible value to a product or brand - Price vs. non-price promotions - Consumer vs. trade promotions EX: Discounts are banned in Germany, Middle east sweepstakes is gambling.

a simple, nonmonetized exchange of goods and services between two parties.

barter

agreements whereby the seller builds and provides a turnkey plant and is paid up front part of the cost of the plant in an agreed-on convertible currency; in return, the seller agrees to purchase specific quantities of the plant's output over an extended period of time.

buyback agreements

the agreed-on currency used to pay swing credits in a clearing account or agreement.

clearing currency

the payment in products and cash, usually in a mutually agreed-on convertible currency.

compensation

a pricing strategy used in intera-firm sales for commercial transactions between units of the same corporation, within or beyond the national borders of the parent company, where the costs reflect the estimated opportunity costs of the product.

cost-based transfer pricing

a form of trade whereby a company sells a product to a buyer and agrees to accept, in return for payment, products from the buyer's firm or from the trade agency/institution of the buyer.

countertrade

duties imposed on subsidized products imported into a country.

countervailing duties

selling products below cost to get rid of excess inventory and to undermine competition.

dumping

pricing strategy whereby a company assumes that it will have certain fixed costs whether or not it exports its products over

dynamic incremental pricing