MKT Exam 3

convenience store

a small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods

department store

a store housing several departments under one roof

superstore

a store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, nonfood items, and services

agent

a wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods

warranty policies

a written guarantee that assures the buyer is getting what they paid for.

benefits of product adaptivity

able to use products in different climates and infrastructures better product performance penetrate otherwise closed markets better meeting industry norms or cultural preferences decrease cost due to varying local inputs Decrease costs due to feature elimination

performance managers

acquire existing retailers and develop as independent entities

physical distribution

activities used to move products from producers to consumers and other end users

dual adaptation

adapt product, adapt communications

product adaptation

adapting a product to meet local conditions or wants in foreign markets

product line extension

adding additional products to an existing product line in order to compete more broadly in the industry

Promotion Mix Elements

advertising, sales promotion, personal selling, public relations

product mix

all products that an organization sells

price fixing

an agreement among firms to charge one price for the same good

terms of sales

an agreement between a buyer and a seller about payment for merchandise

joint venture

an agreement between two or more companies to share a business project

captive pricing

Pricing the basic product in a product line low, while pricing related items higher

geocentric pricing

Intermediate course of action Recognizes that several factors are relevant to pricing decision Local costs Income levels Competition Local marketing strategy

Specialty Retailers

Store that combines carefully defined product lines, services, and reputation to persuade shoppers to spend considerable shopping effort there.

hypermarkets

Stores that combine supermarket and discount store shopping in one location

discount retailers

a category of retail operations that emphasizes low merchandise prices

product line

a group of closely related product items

peer-to-peer marketing

a marketing model whereby individual consumers market products to other individuals

brand

a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products

distributor

a person or organization that helps another organization sell its goods and services to customers

chain aquisition

A market entry strategy that entails purchasing a company with multiple existing outlets in a foreign country

polycentric pricing

A pricing strategy where the local partners set the prices for the product in each global market.

ethnocentric pricing

a pricing strategy where the firm sets a single price for a product around the globe

global product and brand

global products meet the wants and needs of a global market and are offered in all world regions

price ceiling

A legal maximum on the price at which a good can be sold

price floor

A legal minimum on the price at which a good can be sold

David Arnolds 7 rules of selecting and working with channel intermediaries

(1) select distributors, and do not let the distributors 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 temporary market-entry vehicles; (4) support market entry by committing money, managers, and proven marketing ideas; (5) from the start, maintain control over marketing strategy; (6) make sure distributors provide you with detailed market and financial performance data; and (7) build links among national distributors at the earliest opportunity.

Waterfall Model

- introduce a new product first in its home market and later in other advanced markets

Local Products and Brands

-Brands that have achieved success in a single national market -Represent the lifeblood of domestic companies -Entrenched local products/brands can be a significant competitive hurdle to global companies

Global Brand Development

1) Create a compelling value proposition 2) Think about all elements of brand identity and select names, marks, and symbols that have the potential for globalization 3) Research the alternatives of extending a national brand versus adopting a new brand identity globally 4) Develop a company-wide communication system 5) Develop a consistent planning process ---Assign specific responsibility for managing branding issues 6) Execute brand-building strategies ---Harmonize, unravel confusion, and eliminate complexity

Franchise

A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area

Category killers

A specialist that offers an extensive assortment in a particular category, so overwhelming the category that other retailers have difficulty competing.

Benefits of strong branding

Added value Ability to charge premium prices Reduced price elasticity of demand

distribution density

Amount of exposure or coverage desired for a product, particularly the number of sales outlets necessary to provide for adequate coverage of the entire market

innovation

An improvement of an existing technological product, system, or method of doing something.

Factors that drive product adaptation

Climate Cost & price considerations culture preference global standard infrastructure performance & quality expectations product size and dimensions use conditions

Processing

Changing and improving the form of another product.

Target Costing Process

Determine the segment(s) to be targeted, as well as the prices that customers in the segment will be willing to pay. Compute overall target costs with the aim of ensuring the company's future profitability. Allocate the target costs to the product's various functions. Calculate the gap between the target cost and the estimated actual production cost. Obey the cardinal rule: If the design team can't meet the targets, the product should not be launched.

Inventory Management

Developing and maintaining adequate assortments of products to meet customers' needs

Modularity

Development of standard modules that can easily be connected with other standard modules to increase the variety of products

distribution (logistics)

Efficiently managing the acquisition of raw materials by the factory and the movement of products from the producer to industrial users and consumers.

Supercenters

Large stores combining full-line discount stores with supermarkets in one place.

benefits of product standardization

Lower manufacturing costs Lower input costs Cost savings due to elimination of product adaptation efforts Fast global roll-outs are possible Product available for global customers Enhance consumer perceptions of global brand

communication extension

Marketing a product in other countries virtually the same way you have marketed in the original country

Extension Pricing

Per-unit price of an item is the same no matter where in the world the buyer is located

country of origin

Perceptions about and attitudes toward particular countries often extend to products and brands known to originate in those countries

global segmentation

Segmentation that is used when a firm can identify a group of consumers with common needs and wants that spans the entire globe.

Dumping

Selling goods in another country below market prices

brand leadership

The concept of Tellis and Golder where an entity's brand dominates its product category.

brand image

The consumers' beliefs about the company and/or its goods or services often in terms of quality, price, and value

Channel Length

The number of intermediaries that a product has to go through before it reaches the final consumer.

adaptation pricing

The practice of setting different price levels for a given product in different country markets (also known as polycentric pricing)

transportation

The process by which passengers or goods are moved or delivered from one place to another.

Incoterms

Universally accepted terms of sale that specify how the buyer and the seller share the cost of freight and insurance in an international transaction and at which point the buyer takes title to the goods.

big box retailers

discount stores that offer a narrow but deep assortment of merchandise

5 strategic alternatives for global product planning

dual extension product extension product adaptation communication extension dual adaptation innovation

re-inventors

employ standardized back-end systems and processes while creating tailored retail format

replicators

export model virtually unchanged

brand extension

extending an existing brand name to new product categories

sales force

group of employees involved in the selling process

gray market goods

items manufactured outside a country and then imported without the consent of the trademark holder

supermarkets

large stores specializing in groceries with self-service and wide assortments

hard discounters

limited assortment, rock bottom prices

sales promotion

marketing activities - other than personal selling, advertising, and public relations - that stimulate consumer buying and dealer effectiveness

third-country nationals

natives of a country other than the home country or the host country of an overseas subsidiary

host-country nationals

natives of the country where an overseas subsidiary is located

outlet store

off-price retailer owned by a manufacturer or a department or specialty store chain

international product and brands

offered in several markets in a particular region

transfer pricing

prices charged in sales between an organization's units

reasons for price variation

product position stage in the product's life cycle external considerations country-specific competitive situation

Labeling

providing identifying, promotional, or other information on package labels

Global Brand Characteristics

quality signal, global myth, social responsibility

Dual Extension

same promotion, same product

product extension

selling virtually the same product in other countries

distribution channel

set of people and organizations responsible for the flow of products and services from the producer to the ultimate user

market skimming

setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand

penetration pricing

setting a low initial price on a new product to appeal immediately to the mass market

cost-based pricing

setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk

Sprinkler Model

simultaneously launch the product worldwide

packaging

the activities of designing and producing the container or wrapper for a product

price escalation

the added costs incurred as a result of exporting products from one country to another

channel alignment

the coordination of various channel members to the end of providing a unified approach to the marketing of a product or service

Warehousing

the design and operation of facilities for storing and moving goods

brand equity

the differential effect that knowing the brand name has on customer response to the product or its marketing

Global Supply Chain

the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized

optimum price

the highest price that will produce your desired level of sales in your intended market

Licensing

the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge

test marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation

Public Relations

the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance

promotion mix (marketing communications mix)

the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships

Role Scope

who, what, where, when, why, how