Chapters 1-15

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Please describe the lessons you have learned about local marketing in mature markets with attention to prioritizing the issues. (Chapter 8)

In Mature Markets, the adage "Customer is King" is especially apt. • Customer Satisfaction (Potentially Most Important) o Only way to guarantee lifelong and repeat customers o High levels of CS come not from functional quality, or how well a product does its job, but in emotional experience. Which can be created through services outside functionality. • Segmentation and Positioning o Segmentation is vital. Customers have well-developed preferences. Companies must differentiate. o Positioning: Brand of utmost importance due to homogeneity of products. Country-of-Origin effects accentuated, since customers' choices all meet core functionality. • 4 P's: • Product: o 3rd-World countries introduce "me-too" products into mature markets. Products that offer many of the same features and quality for a lower price point than other products in the market. o Brand name always matters in mature markets. • Pricing: o Usually products select either high-end or low-end pricing strategies o Price is important because competition is so fierce • Distribution: o No problem with development of channels, however, gaining access to those channels can be difficult (if not impossible) and expensive • Promotion: o Market share is how success is determined, and type of promotion will vary based on market and culture.

Competitive Drivers (Chapter 1)

Incentive to expand due to rivals expansion internationally. Or to counterattack into international rivals expansion into their their home market.

Under what conditions do joint ventures make sense? (Chapter 6)

Joint ventures should be entered into, according to the 'Optimal Entry Mode Matrix,' when a firm wants to expand into an emerging market, and it has some trade secret or secrets that it wants to keep some control over, but lacks the know-how and familiarity of a local market. The firm may also have financial restraints, and be unable to expand as quickly or completely as it wants without a partner. There will also be times when the legal system of a country will require a local partner. If a company decides to or is compelled to enter into a JV, it needs to be sure that it is very careful in the negotiation process to try and get three key items: 1. 51% of the company 2. Managing director job 3. Control & Responsibility of cash

Does the entry model vary from services? (Chapter 12)

- Entry models are generally similar, but challenges are greater. - Consumption and production of the service are inseparable and culture factors play an even more prominent role in quality and satisfaction levels - Must be concerned with counterfeit services as well (software, music, and movie piracy) - Can the total service delivery system be successfully transplanted?

What is the traditional export expansion model? (Chapter 5)

Direct or Indirect Exporting. Direct - companies make international contacts directly and contract for the shipment and sale of goods with them. Indirect - companies 'piggyback' on a domestic company that usually specializes in export trading who will establish all distribution and transportation for company.

What types of services are more easily exportable, and which ones are difficult to transfer? (Chapter 12)

Easy: Hotels, fast-food Difficult: Sophisticated services (like a brokerage) that works within a certain regulatory and economic environment might not have any relevance in other markets (derivatives, futures markets) Supermarkets: work well in suburban America but not so much in areas that do not have a lot of parking or people with access to cars.

Cost Drivers (Chapter 1)

Economies of Scope and Scale can be incentives for firms to expand into other markets. Sourcing advantages like cost-savings via supply or labor from a low-cost country

What circumstances would affect how a firm determines its path to internationalization? (Chapter 5)

Entry barriers will directly effect how a firm will decide to internationalize.

Technology Drivers (Chapter 1)

Global revolution of media and telecommunications have contributed to homogeneity of preferences. The internet was also a huge driver, since companies websites can be accessed from anywhere in the world

What are the advantages and disadvantages of Strategic Alliances? (Chapter 6)

+ Reduces risk for each individual firm by pooling resources for project +Increases reach for each partner +Can increase value of each partner's offerings (ie. code sharing airlines or frequent flier programs ) +Allow 2 companies to undertake a mission that would be impossible to accomplish alone - Can at times require transfer of FSAs - Lose ability to expand lines or markets - Loss of total control over product

What are the advantages and disadvantages of Licensing? (Chapter 6)

+: Local Market research decreases, since you are working with a local that theoretically understands their own market, +Avoidance of tariffs and levies encountered in exporting, +Licensee more likely to strongly support product in new market than distributor. - Can Lose control over operations, - Licensee can (or most likely will) eventually become a competitor to the firm. They will at that time possess the information given to them(information is power).

What are the advantages and disadvantages of Franchising? (Chapter 6)

+A way to enter a foreign market and still maintain some control over marketing and brand image +Gain local knowledge of franchisee Cheaper way of entry, putting requirement of capital on franchisee - Can be difficult and costly to develop supply lines in foreign markets that provide same quality - Harder to control brand than a WOS - Need for careful and continuous quality control.

What are the pros and cons of the two-step global segmentation model? (Chapter 11)

+This two step strategy increases the effectiveness of marketing campaigns and new product introductions. +Data is important to forecasting the potential profitability of each segment and country +Helps determine whether diversification or focus strategy is appropriate (profitability, risk, etc.). This is a very strategic decision. -Segmentation isn't static, it changes quickly and is really just a snap-shot in time. -indicators used in macro-segmentation can be too general to predict buyer behavior and market response

How does price affect positioning in international markets? (Chapter 14)

1. Price-Quality Relationships o Customers will attribute high quality to a product with a high price. It would cost more to produce a high-quality product, and thus its price will be higher. o Price-quality relationship varies in strength by products, standardized products being less affected. Also, a strong brand name or a strongly positive country-of-origin image can nullify the negative quality effect from a low price. o In markets with high trade barriers, all imports, regardless of quality, will have higher prices. This will lead consumers to ignore the price-quality relationship. 2. The PLC Impact o Generally, in the introductory stage of the product life cycle (PLC) customers are relatively insensitive to price levels. The innovators and pioneers who venture to try the new product are not very much concerned with price but act out of a desire to experience new things. Thus, the firm entering a market in the early growth stage could possibly maintain a relatively high skimming price, charging what the market will bear. o In global markets PLC more complicated. New in one market might already be mature in another, so prices will not be able to go as high. PLC may go faster due to people's exposure to product via television and media o Consequently, the best entry pricing strategy in many markets will be a relatively low-priced penetration price approach. The competitive rivalry is potentially intense, the buyers in the global village already know much about the product, and the producers use the experience curve argument to justify very low prices based on marginal costs. If the competitors consider the new entrant to be in the potential "Star" category, they will price aggressively for global strategic reasons. All in all, the role of skimming strategy in the introductory stage in the PLC is severely limited, although in the mature stage of the cycle a well-protected position can possibly still be used to generate cash in the short term.

What are the two types of New Growth Markets? (Chapter 9)

1. Rich in natural resources, suffered under authoritarian political regimes and colonial oppression. Growth fueled by more even distribution of wealth from natural resources. Cautiously optimistic about the future. 2. Markets that have recently turned to western-style capitalism. Not many natural resources, wealth creation spurred by low labor costs. Optimistic about future.

Types of Political Risk (Chapter 4)

In Descending order of risk (from most to least) 1. General Instability: Revolution, External Aggression 2. Expropriation: Nationalization, Contract Revocation 3. Operations: Import Restrictions, Local Content Rules, Taxes, Export Requirements. Political risk is typically analyzed by contracting out to one of the major firms that specialize in analyzing it.

How does the new product development process vary in the international environment? (Chapter 12)

1. idea generation: • ideas need to come from customers and potential customers. • reduce risk by focusing on modifications and upgrades to existing products • more and more products are "born global", particularly in high-tech 2. Preliminary screening • is the idea compatible with the company's objectives, strategy, and resources? • team with representation from major markets • uncover factors which will require localization to remove obstacles to use 3. Concept research • focus groups and other standard market research techniques (at the local level) • scope of research is significantly increased 4. Sales forecast (this should be done at each step, not just at this point but according to the book...) • use the proper forecasting techniques, take into consideration the PLC 5. Test Marketing • research is more complicated and scope should include multiple country markets • additional scope of research can slow global roll-out • if a slow roll-out is followed, first mover advantage can be lost • pros and cons of this must be weighed in terms of profitability and loss alternative strategy: target positioning, watch the competitors, develop me-too products, and add new features to provide differentiation and a superior product Must also consider the speed of diffusion which will vary between countries. Enter countries with faster diffusion rates first in order to gain first mover advantage and recoup investment more quickly.

What are the drivers of globalization? (Chapter 1)

1.Market Drivers 2. Competitive Drivers 3. Cost Drivers 4. Technology Drivers 5. Government Drivers

Country Specific Advantages (CSA's) (Chapter 2)

Any company can take advantage of this 1. Comparative and Absolutes Advantages: The principle of comparative provides the fundamental rationale 2. Location-specific Advantages 3. Country specific advantages can become FSAs (Levi's the "real"American jeans) 4. CSA's can be a double edged sword, as country image can vary across markets and can limit the transferability of the effect. A firm's strategy must change accordingly

Discuss the buyer decision making process in the international market. (Chapter 7)

At their core, buyers are the same in any market. They are always goal-oriented. Difference is in how to market to the market. Steps in Decision Making Process: 1. Problem Recognition: In International markets, products may not have same core benefits, and therefore will not address same problems. Marketers must understand core benefit in order to properly position product. 2. Search: In many emerging markets, buyers are used to having very limited options. In cases like this, marketers must raise awareness to increase desire to search. Strong global brands reduce perceived risk, and eliminate need for buyer to seek out more information on a product. 3. Evaluation of Alternatives: In sophisticated markets, buyers are more likely to evaluate products based on all attributes (compensatory evaluation), in unsophisticated markets, more likely to make decision on one or two attributes, like brand name or status (hierarchical). Important: Brands still selected in different markets for different reasons! ex. Levi's: US - practical Germany - Status 4. Choice: Final Choice usually motivated by Social Norms and Societal Factors. Social Norms - pressures placed upon a buyer to act in a manner according to their place in culture and society. Societal Factors - Factors such as in-store promotions that might change how a buyer would normally behave. 5. Outcomes: Satisfaction is based on expectations for a given product. Expectation based on products currently in market and previous experience. Lack of a product can create mythical expectations when product is eventually introduced.

Firm Specific Advantages (FSA's) (Chapter 2)

Cannot be duplicated by other firms, benefits are better than what competitors can provide and are not available to competitors 1. Differential Advantages 2. Ownership-specific Advantages 3. examples are: patents, trademarks, brand name, control of raw materials, knowledge essential to the development of a product or service, control of distribution 4. FSAs are either Knowledge Based or Resource Based 5. FSAs are not always transferable to other markets (advertising FSAs may not apply in countries who lack commercial television). Marketing skills may not transfer if the marketer doesn't know and understand the environement.

What are the non-traditional paths to internationalization? (Chapter 5)

Licensing, Strategic Alliances, Wholly Owned Subsidiary, Born International. Licensing - Offers a firm the right to use a parent's proprietary technology and know-how, often for a fee plus a royalty on revenues. Types are franchising, technical licensing, OEM, Management contracts. Strategic Alliances - Collaborations between companies that will allow each to accomplish something they would be unable to accomplish alone. ex: JV, Joint R&D, distribution alliance, shared manufacturing. Wholly Owned Subsidiary - Creation of a plant or factory in a foreign country. Typical FDI. Can either be through greenfield or acquisition. Other type can be sales subsidiary that doesn't create, simply exists as an outlet for goods produced elsewhere. Born International - Many new firms are born international, and their business plan from the very beginning involves them being in many markets, and not starting in a home market and expanding into international markets over time.

What are some of the problems with global product positioning? (Chapter 11)

Problems with Global Product Positioning: global positioning is difficult • perceptions can vary greatly from country to country (US Beef: mad-cow, negative perceptions in Asia, advertised as USDA Prime Beef at home) • identical positioning across all countries is very difficult (successful examples: coke & Sony) • depending on the global strategy, the product can be in different stages of the PLC in different countries which necessitates different messaging • different usage conditions require different positioning (example the Suburban: an American tradition in the US, bullet-proof models used to safely transport in war zones and by diplomats in the US and south America) • preferences often vary from country to country • like products, marketing message may also need to be localized or even adapated • even within segments that appear the same from country to country (teenagers) products may be positioned differently (Levi's) • need to consider if competition is similar across countries, if not positioning may different • sometimes products positions

What are the pros and cons of product standardization? (Chapter 12)

Pros: • cost reductions (economies of scale: spread out product development costs, marketing costs, and sales costs) • improved quality (more thoroughly tested and enhanced) • enhanced customer preference (positive experiences in one country can spill-over and purchases in other countries, reinforces the customer's purchase decision) • global customers (growth of international travel and standardization of requirements in B2B) • global segments (particularly for technology products such as computers, cameras, TVs) • brand name recognition • spill-over benefits of marketing and reputation. Cons: • the product could be off-target (doesn't satisfy needs and wants of the local market) • lack uniqueness (if exclusivity is a selling consideration, affluent markets, luxury products) • reduced customer satisfaction due to local preferences • face strong local competition (competition is capable of a strong defense, good relationships with local channel members, offer specialized products & services to better meet customer needs) • vulnerable to trade barriers (open trade is ideal, otherwise it is difficult to realize economies of scale) In practice it is hard to balance the cost reductions gained through efficiencies and the need to adapt a product to best meet customer needs.

How do companies deal with counterfeiting? (Chapter 13)

Search and Destroy: • hire private investigation agencies to track down fake in stores and locate counterfeit factories (most effective to stop this at the factory level) Coding Devices • products have unique country specific codes/signatures (MS Windows Tracking codes, levi's micro-weave patterns) Strong Contractual Controls - Impose strong penalties on partners that allow information to be leaked, or proprietary information to wander.

Describe the Entry Evaluation Process (Chapter 4)

Stage 1: Country Identification: Statistical analysis comparing countries. Usually based in a region the company wants to expand into. Involves things like per capita income and cultural similarity. Stage 2: Preliminary Screening: After potential candidate countries have been established, macro-level analysis is done for each country. These include things like political and regulatory systems, stability, geographic distance, and economic development. Countries will be eliminated that do not match financial and other resource constraints. Stage 3: In-Depth Screening: Core of attractiveness evaluation. Analysis of specific industry and product markets, potentially individual segments. Analysis will assess actual and potential market size and growth rate, level of competition, and trade barriers and regulations.

What are some of the pitfalls of global standardization? (Chapter 12)

Standardization Pitfalls: • the lazy, fat, dumb, & happy approach • similarities among customers are often assumed and not proven (good market research helps correctly identify commonalities and helps win the support of local organizations involved in the research) • standardization isn't appropriate for all products and markets • over-standardization compromises a successful positioning strategy • poor follow-up (effort must be taken to follow-up a product introduction) • the vision is often to narrow and inflexible • rigid implementation: there needs to be some flexibility at the local level (a product could be standard, but the service wrapper that supports it may be very different depending on the market)

What are the steps in the two-stage global segmentation model? (Chapter 11)

Step 1 Macro-segmentation: division of a number of countries into subgroups of similar clusters. • done using powerful statistical tools • uses characteristics important for marketing: population size & character, disposable income levels, education, primary language(s), level of development, infrastructure, politics • useful for a diversification strategy • identifying generally similar markets • helps narrow your focus, get to a smaller list of attractive countries to target, from many different markets to those that look the most attractive and require more in-depth research (micro-segmentation) • indicators used in macro-segmentation can be too general to predict buyer behavior and market response Step 2 Micro-segmentation: identification of local segments which are similar across the countries in a cluster • helps gain economies of scale in the marketing research and the identifying the marketing mix (uniformity of packaging, simplifying logistics, and promotions) • use segmenting techniques to determine whether a coordinated campaign would succeed across all countries • intense segmentation: micro-segmentation techniques are the same as those used for local segmentation o problem definition o research design: exploratory (secondary data & qualitative research), descriptive (consumer surveys, trade surveys, observation), causal (experiments & causal models) ex: measurement/scaling, questionnaire construction, sampling, fieldwork, data analysis

Market Drivers (Chapter 1)

Strongest force pushing global marketing. Includes: Common Customer Needs, Global Customers, Global Channels, Transferable Marketing

How do we access the globalization potential for services? (Chapter 12)

Success Factors for Global Services • distilling exactly what the key features of the product/service concept are • reasonable similarity to the home country situation • localization, there is a lot of potential tied to FSAs (think about McDonalds, Hilton, Marriott). o Must be able to localize the services to another market while maintaining the firms FSAs. (everything revolves around FSAs) Must ask question: does the infrastructure through which the service is offered exist in the foreign market? Does the problem this service is designed to address exist in the foreign market?

Analyze Hofstede's cultural dimensions. (Chapter 3)

Systematic approach to assess cultures across countries. Culture is a fundamental dimension of any society and is a very visible force that affects market demand as well as customer behavior. Culture affects strategy implementation and execution, "how" things are done, more than strategy formulation. Countries can be classified along four basic cultural dimensions. Individualism vs. collectivism • Collective society o identity and worth of the individual is rooted in the social system, less in individual achievement High vs. low power distance • high power distance societies tend to be less egalitarian, while democratic countries exhibit low power distance Masculine vs. feminine • the degree to which culture is dominated by assertive males rather than nurturing females Uncertainty Avoidance • weak vs strong uncertainty avoidance rates nations according to the level of risk tolerance or risk aversion among the people

Political Risk (Chapter 4)

The danger that political and military upheaval will change the nation's economic rules and regulations overnight. There are many ways of analyzing the risk and of assessing the level of exposure, and the sources of information vary from very detailed statistical reports on the history of the country's political development to impressionistic tales by recent visitors of the country.

Country of Origin Effects (Chapter 2)

The effect refers to the impact on customers of a product's "made-in" label or the home country of a brand. Products or services from countries with a positive image tend to be favorably evaluated. Products from less positively countries tend to be downgraded. Counry of origin effects are less pronounced for products using technology that is widely diffused across countries. It also matters less when it comes to most apparel, made in china vs. made in vietname, etc... doesn't really have an effect on consumer preferences. Country of origin affect matters more for things such as advanced medical equipment, cosmetics, and wine.

Does the traditional buyer decision model function both domestically as well as internationally? (Chapter 7)

The traditional buyer decision model functions both domestically and internationally because buyers in all markets operate on the same core set of motivations, to satisfy a need. However, it is very important to recognize the differences in the way they satisfy this need, and how they evaluate products, make their buying decision, and judge the outcome of that decision.

Please describe the lessons you have learned about local marketing in emerging markets with attention to prioritizing the issues. (Chapter 10)

Two types of Emerging Markets: 1. Newly Democratized Countries (NDC): China, Russia, Vietnam, Eastern Europe 2. Developing Countries (DC): Nigeria, Zambia, Pakistan, Sri Lanka, Bangladesh, Nicaragua, Guatemala). Have lower per capita income levels and & severe lack of marketing infrastructure) 3 features of NDCs: basic needs are satisfied, good education and social control, no or developing free market In DC basic needs often are not satisfied, populations tends to be less educated, and there is less social control Marketing in Developing Countries Market segmentation • income level is basic segmentation criterion • market for status products can be lucrative due to wide income disparities • effective income is defined in terms of access to foreign or convertible currency • most promising markets are in urban areas/larger cities Product Positioning • customer needs are basic • domestic alternatives are weak • upscale positioning can play an important role Marketing in emerging markets • emerging markets, particularly NDCs lack an effective marketing structure • Channels of distribution, transportation, and infrastructure are often poorly developed. • There is often a lack of emphasis on consumer goods • products may need to be localized or adapted for local preference • FSAs may not apply, a firm will often need to create FSAs specific to the local market, the Value Chain may need to be altered o Many services not known. Must create service network and train. • Buyer Decision Problems o lack of cash, credit o lack of knowledge, not used to alternatives and choices o buyers know what they don't want but not necessarily what they want o a new business or business concept could face suspicion o consumers may doubt advertising claims o consumers are unaccustomed to free choice, this is a cognitive dissonance

What are some of the key issues in global pricing from the perspective of U.S. companies? (Chapter 14)

a. Exchange Rates i. Fluctuating exchange rates will routinely create problems with revenues and prices in a foreign market and can powerfully affect the performance of local subsidiaries. A particularly potent threat is the chance of a government devaluation. ii. To avoid the risk of wide fluctuations in short term profits, the global company will often turn to hedging. b. Hedging i. Hedging involves the purchase of insurance against losses because of currency fluctuations. Such insurance usually takes the form of buying and selling "forward contracts" or engaging in "currency swaps" with the help of financial intermediaries. ii. A forward contract refers to the sale of specified amount of a foreign currency at a fixed exchange rate for delivery or settlement on an agreed date in the future or under an options contract, between agreed upon dates in the future. iii. A swap may be defined as the exchange of one currency for another for a fixed period of time. At the expiration of the swap each party returns the currency initially received. c. Government Intervention i. Inflation rates iii. Price Controls will limit whether a seller can change their prices iv. In such a case, the company has to resort to the kind of currency management, for example, Swaps and forward contracts. d. Transfer Pricing i. The price that a parent "sells" goods to its subsidiary. If the price is set artificially high, the profits of that subsidiary will be reduced, decreasing the amount of taxes that they have to pay. ii. Many countries use "arms-length" pricing requirements for determining tax burdens. Companies can either sell at "market-based", which is the price they could buy the goods for in their market, or "cost-based" pricing, which involves setting the price at the cost of the goods, then adding some amount for cost-plus. e. Systems Pricing i. Selling a whole system, including parts, setup, service. iii. When the complete system is handled, the firm is in a position to guarantee its performance - a guarantee customarily not offered when unbundling has taken place (to accept responsibility the firm needs to be in complete control of the project). f. Whether tariff and nontariff barrier pricing should be passed on to customers? g. Skimming Vs. Penetration strategy - As for positioning strategy, a high skimming price and an "import" status image necessitate niche targeting but also slow down market growth and leave windows of opportunity for the competition. On the other hand, choosing a low penetration price, the firm runs a risk of being accused of dumping that is, selling its products below cost.

Please describe the lessons you have learned about local marketing in new growth markets with attention to prioritizing the issues. (Chapter 9)

a. Importance of culture (religious and ethnic heritage) - affects communication strategy in particular b. Uneven Income distribution - Strongly affects segmentation c. Drive toward pan-regional marketing d. Role of trade bloc - it makes the country more attractive to foreign investors, since manufacturing plants can be located there and receive preferential treatment for exports to other member countries. B. Enlarged market potential e. Market Segmentation o Emergence of core middle class in Newly Industrialized Economies with spending power. Demand variety. o demographics, incomes, location - can be unreliable because of large but hidden extended families, a desire to avoid taxes, and increased mobility of populace. o with continued growth, markets move to spending more on "wants," not just on "needs." f. Product Positioning o Well-known brand names given attention o Foreign entrants can often get advantages just by being foreign, a form of COE effect. o Domestic goods seen as less desirable. Marketing Tactics - 4 P's (The marketing mix in new growth markets can often be handled with a minimum of adaptation from more mature markets. g. Product o Basic localization o Brand names and foreign products may be able to utilize 'no adaptation' policies. h. Pricing o Important, but largely the same as in the advanced markets - demand, costs and competitive conditions. o If status positioning - high price These markets are growing and people are ready to spend money. However building brand franchise with large and loyal following is goal i. Distribution o usually involves spending money to increase outlets, coverage segments, and the response to competitive threats. o Except for the upper niche of luxury consumption, markets will not really produce a large net cash flow until later. j. Promotion o Creating a strong brand image for a brand is important. Sharing information and building trust among customers for industrial products is similarly important. o The NIEs have often shown themselves impervious to international copyright laws and patent enforcement, although under the influence of the WTO this is now changing.

Government Drivers (Chapter 1)

favorable trade policies, acceptance of foreign investment, compatible technical standards, and common marketing regulations

What are the lessons about marketing in mature US market? (Chapter 8)

o Ethnic Diversity in a melting pot style (ethnicities that come here are expected to assimilate to American culture) o Market Segmentation is a must because of maturity and diversity of markets o Americans are price sensitive o Less agreement on fundamental values than anywhere else. o Large-scale stores and nationwide chains. o Distribution very efficient

What are the lessons about marketing in mature European markets? (Chapter 8)

o Largest Mature Market in the world with 450 million consumers o Formation of EU led to increases in pan-European strategies and rationalizations o Allowed for harmonization of distribution networks across all of Europe and reduced hindrances to moving goods between nations. o While many operations were centralized and became pan-European, there remains differing regulations about promotions in each country o Elimination of protectionist laws (like Germany's Beer Purity Act) has increased competition in countries, driving out lower quality products that had been able to survive because of the laws in place.

What are the lessons about marketing in mature Japanese market? (Chapter 8)

o With deregulation and economic slowdown, the Japanese are becoming more similar to Westerners o Advertising seen more as an art form: unfocused and nonsensical o Consumers are value-conscious, but are unwilling to compromise on quality. o Even though tariffs have been reduced, non-tariff barriers to entry remain high)

Johansson Bad!

• Big Business • Definition based, less focused on actual implementation • Consumer product focused • Weak on the financial aspects • Too much focus on specific countries • Weak on how to develop an actual international marketing entry development plan • Exit strategy development? • Gets caught up in entry barriers as opposed to looking at it from an FSA point of view

Johansson Good!

• Divides sections based on type of markets • Lots of examples (even if they are unhelpfully large business) • Explaining how differing political backgrounds can effect marketing in country. • Highlights importance of infrastructure and effective distribution systems • Intangible cultural effects on marketing • Importance of cultural sensitivity

What are the Advantages of Global Brands? (Chapter 13)

• Global brands can command higher brand equity: assets that add value to the product or service (brand name awareness, brand loyalty, perceived quality, brand associations). • Demand spillover: sales in one market generate demand in another. • Global customers: reduced perceived risk for the global consumer, global customers look to brands that they recognize and trust no matter what country • Scale economies: spending on product improvements and marketing programs can be leveraged across more markets. • judged differently in emerging markets where a global brand is often an aspirational • The perception of global brands can add to their strength: perceived quality, esteem and privilege, power and social responsibility • FSAs • consumers often choose between products and services on the basis of brand alone • Global brands have superior "Hard Brand Equity" which directly translates into the financial value

What are the Disadvantages of Global Brands? (Chapter 13)

• not adapted to local conditions and preferences • perceived as dominating local brands and threatening local culture • less unique than local brands • natural targets for anti-globalization campaigns/activists; local brands are seen as the underdog and elicit public sympathy • Negative spillover: bad news travels fast across the various country markets (Intel inside, issues with Pentium chip) • product line spillover: negative effects can spillover to other products lines under the same brand (one bad apple spoils the bunch) • brand loyalty: local brand loyalties can be strong and hard to overcome

What do global brands do from the perspective of the consumer? (Chapter 13)

• reduce perceived risks for the consumer • command a premium price (due to positive brand reputation) • provide a sense of confidence and comfort that the product will meet expectations • consumer soft brand equity: the value of the positive associations consumers have with the brand name, often an emotional attachment, can be driven by social factors (status, peer groups) • calculated social value and status


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