Final Exam International Marketing

What are the factors that inhibit globalization?

1. Barrier of entry ex. Tarriffs 2. War/ Conflict 3. Organizational Culture ex. For example, Home Depot has not made it global because some countries do not have a DIY culture. 4. Opposed to Globalization

Penetration Pricing

Charging a low price in order to penetrate market quickly Appropriate to saturate market prior to imitation by competitors Packaged food product makers, with products that do not merit patents, may use this strategy to get market saturation before competitors copy the product

Market Skimming

Charging a premium price May occur at the introduction stage of product life cycle Luxury good marketers use price to differentiate products (Mercedes-Benz

CAP

Common Agricultural Policy is the reason why Europeans have cheaper prices on wine because there is a subsidy.

Focus Groups

Focus groups help capture appropriate variable to investigate Good for emic approach

James Henry is an awkwardly mobile executive with fast growing Atlanta firm. He has to travel to Paris to meet with the subsidiary on an important offer in Europe. Henry only has five days to go. He's interested in learning about the French culture. James has learned that French and Culture goes better together. He wants advice on what to do?

Focus on studying the cultural comparatives.

Push Strategy

Focuses on the distributors of a product Incentives offered to wholesalers or retailers to carry and promote a product May resort to push when there is a lack of advertising media or difficulty transferring firm's pull strategy in foreign markets push marketing is more concerned with short-term sales. Common sales tactics include trying to sell merchandise directly to customers via company showrooms and negotiating with retailers to sell their products for them, or set up point-of-sale displays

Pull Strategy

Focuses on the end-user or the buyer Dependence on sales promotions and advertising Advisable when product is widely used by consumers, channel is long, product is not complex, and when self-service is predominant shopping behavior The goal of pull marketing is to get the customers to come to you, hence the term pull, where marketers are attempting to pull customers in. Common sales tactics used for pull marketing include mass media promotions, word-of-mouth referrals and advertised sales promotions

Regiocentric Orientation

For example, Toyota has made the Camry model for US region only. The same goes for the E.U. for their joint diplomacy. This can when a product/service is offered for a certain region only but can be considered a global approach because it can be between more than 1 country.

Price escalation

For example, the price in Singapore vs USA is going to be different for Honda Accords. Because the US makes Honda's, the price is going to be lower since it has to be exported to Singapore. Tariffs, distributors margins, exchange rates, inflation, and etc. makes export prices higher.

The World Trade Organization

Forum for trade-related negotiations among 160 members Based in Geneva Serves as dispute mediator through DSB Has enforcement power and can impose sanctions

Public Relations

Fosters goodwill and understanding Generated favorable publicity

As a general rule, the Chinese government allows foreign companies to participate in its market only if those companies agree to establish operations with the local Chinese enterprises. Which market entry mode would be the appropriate choice under these circumstances?

Franchising

Penetration Pricing

Goal is to raise the rate of adoption and the Japanese are not interested in the short term, they are interested in the long term goals. They want a large market share right from the beginning. If you have a large market share, then you have a long production run (LPR). This means you have efficiency and leads to increased experience effects.

When Tag Heuer, a marketer of luxury watches, takes out newspaper ads urging consumers to purchase Tag Heuer products from authorized dealers only, the company most likely attempting to combat the _______ problem.

Gray market

Techniques and strategies have been developed to reduce exchange rate risk

Hedging involves balancing the risk of loss in one currency with a corresponding gain in another currency Forward Contracts set the price of the exchange rate at some point in the future to eliminate some risk

A firm without much export experience uses the rigid cost-based pricing method. Which of the following considerations is the exporter ignoring?

Is the price is competitive in view of local market conditions? Does the price reflect the product's quality? Will authorities in export markets view the price as reasonable o exploitative? Does the price take anti-dumping laws into consideration? ALL OF THE ABOVE

Cost plus pricing

It has advantages because it helps cover your cost but subsidiary manager in a small country with competition will tie their hands. It forces them to do flexible cost plus pricing. It allows them to respond to competition and try and sell to customers

Remedies to dumping and subsidies in exporting

to offset the impact of dumping and to penalize guilty companies, most countries have introduced legislation providing for the imposition of antidumping duties if injury is caused to domestic producers. Such duties take the form of special additional import charges equal to the dumping margin. Antidumping duties are almost invariably applied to products that are also manufactured or grown in the importing country.

Couponing

Printed certificates entitle the bearer to a price reduction or some other special consideration for purchasing a particular product, Couponing accounts for 70% of consumer of sales in the U.S.

Celeste Atkinson is a lifestyle and entertainment manager for Audi, and her job is to create buzz by ensuring that vehicles such as the Audi A8L and the S8 sports sedan figure in paparazzi photos. This is referred to as:

Product placement

Marketing Mix

Product, Price, Place, Promotion

Globalization and Product Cultures

Products such as coffee and beer have emerged as true global products • Starbucks and the coffee culture • Irish pubs in the US • German style beer halls in Japan

Sampling

Provides consumer with opportunity to try product at no cost May be distributed in stores, in the mail, through print media, at events, or door-to-door Kikkoman soy sauce launched a sampling program in supermarkets in the U.S.; today the U.S. contributed 85% of profit from international operations.

One task of the _______ department is to generate non-paid forms of communication to foster goodwill among customer and others.

Public Relations

Gray Marketing

also known as parallel importing, is profiting from differences in price by buying low and selling high by selling them in a different geographic location. Example, buy low priced cameras in Hong Kong and sell them for a high price in the US.

Latent market

an undiscovered segment; it is a market in which demand would materialize IF an appropriate product were made available.. The demand is zero before the product is introduced. In the case of existing market, the main research challenge is to understand the extent to which competition fully meets customer needs.

Virtual Expatriates

are not physically in the other country for work. Ex. Three Marriott hotels in the Caribbean being managed by someone in Miami

Host-county nationals

are the most used in international customers. The trend is to use host-country nationals.

Gray market goods

are trademarked products that are exported from one country to another and sold by unauthorized persons or organizations. Gray markets impose several costs or consequences on global marketers, including the following. Dilution of exclusivity Free riding Damage to channel relationships Undermining segmented pricing schemes Reputation and legal liability

Emic Approach

assumes cultures are so different that each requires a separate research study to capture the local context relate to each countries frame of reference.

Etic Approach

assumes that a research questions in one culture can be used in another culture. This approach allows for comparison across countries, but could miss culture differences.

For years, ads for Volvo automobiles stressed safety, features and protection in the event of a crash. Thus, Volvo, automobiles developed a reputation based on which positioning strategy?

attribute/benefit

Maslow's hierarchy is applicable to global marketing because it can help explain how

basic human needs can drive the development of global products

Diageo PLC, V&S Vin & Spirit AB, and Seagram and other marketers known that Russians consume a great deal o vodka. This type of market of segmentation can be classified as:

behavioral

Product-Communication Adaption (Dual Adaptation)

both the product and one or more promotional elements are adapted for a particular country or region, Sometimes marketers discover that environmental conditions or consumer preferences differ from country to country; the same may be true of the function a product serves or consumer receptivity to advertising appeals.

Big Mac Index

calculation using the cost of a McDonald's restaurant sandwich to assess the relative values of currencies

Extension Strategy

calls for offering a product virtually unchanged in markets outside the home country

Role of FTZs

geographic entities that offer manufacturers simplified customs procedures, operational flexibility, and a general environment of relaxed regulations

Nationalization

government seizing all or some assets

Fixed/ Pegged

government will lock currency in relation to baskets of currencies Ex. Chinese currency

Need for market segmentation

helps the marketers to understand the needs of the target audience and adopt specific marketing plans accordingly

Expanded Triad

includes all of North America and the Pacific Rim and most of Eastern Europe

Generally speaking, which of the following product categories represents the best potential for extension into international markets without adaptation?

intangible products

Discretionary Adaption

involve choice; thus, they are more relevant to the selection of an international marketing strategy.

Direct exporting

involves an organization selling goods directly to a consumer in international market (importers, wholesalers, distributors, retailers, government, procurement departments and consumers)

Indirect exporting

involves an organization that sells to an intermediary in its own country. This intermediary then sells the goods to the international market and takes on the responsibility of organizing paperwork and permits organizing and shipping and arranging marketing.

Adaption Strategy

involves changing elements of design, function, or packaging in response to needs or conditions in particular country markets

Country analysis

involves the examination and interpretation of a nation's economic, social and political environment. The analysis offers a comprehensive overview of a country.

NA

is Netherlands Antiles is an island that companies use to avoid taxes. It is a tax haven. Taxes are higher in US than tax havens. They register their companies there and arbitraging. Profiting from differences in price in county A and country B.

Crisis Management

is a coordinated effort to handle the effects of unfavorable publicity or an unexpected unfavorable event.

Joint venture

is a strategy is advisable when culturally distant difficult to enter markets are targeted.

Push Money

is an incentive to retailer's sales person, for example, a suit and they promote a certain brand. Training is part of sales promotion to encourage retail staff.

Door-to-door selling

is done with cars in Japan. The bring catalogs, videos, and other promotional information.

Administrative Arbitrage

is exploits legal, institutional, and political differences across countries.

Intermodal transportation

is freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (e.g., rail, ship, and truck), without any handling of the freight itself when changing modes.

Chain Acquisition

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

Bill of Exchange

is negotiable instrument that is easily transferable from one party to another. It is a written order from one party (the drawer) directing a second party ( the drawee) to pay to the order of a third party (the payee.)

Equity Stake

is simply an investment, if the investor owns fewer than 50 percent of the shares, its a minority stake; ownership of more than half the share makes it a majority.

Carrefour

is the world's most international retailer. (Walmart is bigger than Carrefour, but Carrefour is more international. They are French.) Amazon, Zara, Alibaba, are more examples.

Switching costs

is what really costs you to switch. For example, the Japanese would question switching to a different supplier because they want to know how established and dependable they are. There are unknown costs to switching.

Free Merchandise

is when it is before the season.

Black Markets

is when the government sets the price below equilibrium and that raises the prices because there is a shortage. It is an illegal traffic or trade in officially controlled or scarce commodities.

Store Demonstration

is when you go to the store, for example, and promote a new brand of soy sauce so people can sample the product.

Piggy back

is when you rely on an existing distribution center. You piggy back on the buyer who has already established connections and channels to sell overseas. You can use an existing channel to an existing buyer, especially if it is complimentary. (i.e. beef and chicken buyers)

Social Couponing

is where deals are made with local retailers with Groupon taking a percentage of proceeds

For Starbucks and other companies whose business models include a service component, it is not recommended that they use this method for going global.

joint ventures

Potential markets

latent market and incipient market

_______ represent(s) a market entry strategy whereby one company permits a foreign country to make use of it's patents, know-how, technology, company name, or other intangible assets in return for a royalty payment.

licensing

Global Marketing

marketing that targets markets throughout the world

Global myth

markets can use global consumer culture position to link the brand identity to any part of the world

Non Price Promotion

may take the form of free samples, premiums, "buy one get one free" offers, sweepstakes, and contests.

AIDA Concept (attention, interest, desire, action)

model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message.

CIF (cost, insurance, freight)

named port of destination - risk of loss or damage of goods is transferred to buyer once goods have passed the ship's rail

FAS (free alongside ship)

named port of destination - seller places goods alongside the vessel or other mode of transport and pays all charges up to that point

Which of the following could hinder the success of products labeled "Made in Bangladesh" or "Made in Venezuela" in export markets?

negative country-of-origin bias

A marketer of breakfast cereals might send researchers to preselected households at 6 AM to watch families go about their morning routines. The client could also assign a researcher to accompany family members to the grocery store to record their behavior under actual shopping conditions. This type of research method is considered as:

observation

Vertical price fixing:

occurs when a manufacturer conspires with wholesalers/retailers to ensure certain retail prices are maintained.

Horizontal price fixing

occurs when competitors within an industry that make and market the same product conspire to keep prices high.

Countertrade and its forms

occurs when payment is made in some form other than money. Options: Barter Counterpurchase or parallel trading Offset Compensation trading or buyback Switch trading

Extension

offering product virtuall unchanged in markets outside of home country

Countervailing

offset subsidies granted in the exporting country

Which of the following correctly states the role of banks in import/export transactions involving a letter of credit (L/C)?

the exporters bank is the advising and/or confirming bank; the importer's bank is the issuing bank

Hypermarche

the goal is one stop shop.

P-to-P Distribution (marketing)

the internet and other related media are dramatically altering distribution. Interactive TV may become a viable direct marketing channel in the future. eBay pioneered P2P by helping Disney and IBM set up auction sites for B2C auctions. Interactive TV is coming when homes are wired for 2-way.

Psychographic segmentation

the process of assigning people to market segments on the basis of their attitudes, interests, opinions, and lifestyles

Demographic segmentation

the process of segmenting markets on the basis of measurable characteristics such as county, income, population, age, or some other measure

Benefit segmentation

the process of segmenting markets on the basis of the benefits sought by buyers

Jurisdiction

the right or authority to adjudicate disputes

Product transformation

the same physical products ends up serving a different function or use that for what it was originally designed for

Ethnographic research

the study of human behavior in its natural context; involves observation of behavior and physical setting.

Concentrated Strategy

the target market strategy that calls for creating a marketing mix to reach a niche segment of global consumers

Courtesy bias

the tendency for individuals participating in a survey to report what they think the researchers want to hear rather than their true opinions or behaviors. Ex. Young participants hesitant to criticize or disagree with older participants in traditional cultures like Japanese and Chinese

Scalar Equivalence

two respondents in different countries with the same value for a given variable receive equivalent scores on the same survey item

Parellel translations

two versions by different translators; can be used as input to the back translation; the same techniques can ensure that advertising copy is accurately translated into different languages.

Triangulation in forecasting

use multiple indicators rather than a single measure; this approach will decrease the level of uncertainty for the decision makers and is equally useful in global market research

Jurisdictional clause

when you do business with each other, there is a clause in the contract between the companies that determines the local jurisdiction. If there is no clause, then it is determined by: 1. Where the contract was signed 2. Where the contract was implemented

What are the considerations that go into price

• Cost of Distribution • Supply and Demand • Competition • Demand

Tools for Consumer Sales Promotion

• Coupons and rebates • Premiums • Loyalty Marketing Programs • Contests and Sweepstakes • Sampling • Point of Purchase promotion • Online Sales Promotions

Stakeholder partners include:

• Employees • Suppliers • Distributors • Stock holders

What are some objectives in pricing?

• Revenue • Profit margin, cover your cost

Pattern advertising

•A middle ground between 100% standardization and 100% adaptation •A basic pan-regional or global communication concept for which copy, artwork, or other elements can be adapted as required for individual countries (similar layouts)

Marketing Communication Tools

▪ Sponsor ▪ Coupons, Ad ▪ Prelaunch opening ▪ Sampling, door prizes, more coupons

Local Consumer Culture Positioning

Positioning the product so that it is associated with local cultural meanings.

A global segment is referred to as a "global elite" which includes:

affluent, well traveled persons

Quality signal

allows a company to charge premium price in highly competitive market

Relationship strategy

game plan for establishing and maintaining high-quality relationship with prospects/customers

Time utility

the availability of a product or service when desired by a customer

Global Consumer Culture Positioning

Positioning the product to appeal to individuals who want to be part of a global consumer culture.

Information utility

the availability of answers to questions and general communication about useful product features and benefits

Form utility

the availability of the product processed, prepared, in proper condition, and/or ready to use

Floating Currencies

the dollar, euro, yang which are always changing because of demand and supply.

Export Price Escalation

"the increase in the final selling price of goods traded across borders."

Ethnocentric (extension) pricing

- the per-unit price of an item to be the same no matter where in the world the buyer is located. The importer must absorb freight and import duties. Advantage: extreme simplicity because it does not require information on competitive or market conditions for implementation. Disadvantage: does not respond to the competitive and market conditions of each national market and therefore, does not maximize the company's profits in each national market or globally.

Steps in the market research process

1. Firm objective 2. Information requirement 3. Problem definition 4. Choose unit of analysis 5. Examine data availability (can secondary research data be used? 6. Asses value of research 7. Research design 8. Data analysis 9. Interpretation and presentation

Advantages of Trade Show:

1. Gather intelligence and find out what competition is doing 2. Train your sales people (selling to the trade) 3. Finding buyers for product (B2B) 4. Find distributors to represent you in other countries

What are leading or lead markets?

1. Have knowledgeable and discerning consumers 2. Have intense competition - only the strong will survive 3. Have advances research and innovative products

Reasons why emerging economies:

1. High consumption 2. High investment (ports, power generators, road) 3. High infrastructure spending

Impact of a Strong Dollar on Global Economy

1. Negative impact of international investment returns 2. Impact on companies with large doreign operations 3. Cut on import prices which means low inflation 4. Rising U.S. demand for imports - absorb extra demand without inflation 5. Impact of International Asset purchases & outbound Tourism

Services marketing mix requires 7 P's.

1. Offerings 2. Price 3. Marketing Communication 4. Distribution 5. Physical Evidence 6. People 7. Process

Political Risk Reduction

1. Reduce asset exposure 2. Insurance 3. Local partners

Maslow's Hierarchy of Needs

1. Self Actualization (Personal) 2. External and internal esteem (Social) 3. Social 4. Safety (Physical) 5. Physiological

Nature of market segmentation

1. Systematic process: Segmentation of market demands a systematic process. The process consists of the following steps: a. Defining the market. b. Data collection to analyze the characteristics of the potential customers. c. Identifying the bases of segmentation. d. Defining the market segments. e. Evaluating the market segments. f. Selecting the appropriate market segments. 2. Serves many benefits: Market segmentation brings many benefits to the marketer for selecting target market and using an appropriate combination of the four P's. 3. Subject to certain limitations: Market segmentation is subject to limitations such as: (a) Difficulties in data collection, (b) It is a time-consuming process, and (c) It is expensive. 4. Facilitates customer satisfaction: Through market segmentation the customers get goods and services of their choice, which helps in satisfying their needs and wants. 5. Operates as promising marketing strategy: Market segmentation is better than market aggregation, as the current marketing trend is shifting from mass marketing strategy to target marketing strategy.

Driving Forces of Global Marketing

1. Technology 2. Similar Market Demand 3. Government

Requirement for export marketing

1. an understanding of the target market environment 2. the use of marketing research and identification of market potential 3. decisions concerning product design, pricing, distribution channels, advertising and communications - the marketing mix

Role of export management companies

1. as a part time activity preformed by domestic employees 2. through an export partner affiliated with the domestic marketing structure that takes possession of the goods before they leave the country 3. through an export document that is independent of the domestic marketing structure 4. through an export department within an international division 5. for multidivisional companies, each of the preceding options is available

Sponsorships

A company pays a fee to be associated with an event, team, athletic association or sports facility Combines elements of PR and sales promotion Draws media attention

Behavioral Targeting (BT)

A form of observation marketing research that uses data mining coupled with identifying Web surfers by the IP address.

Strategic alliance

A long-term partnership between two or more companies established to help each company build competitive market advantages.

Country and Market Concentration

A market expansion strategy that involves targeting a limited number of customer segments in a few countries.

Foreign Culture Consumer Positioning

A positioning strategy that seeks to differentiate a product, brand or company by associating it with its country or culture of origin.

Sourcing decisions

A strategic decision that determines whether a company makes a product itself or buys products from other manufacturers as well as where it makes or buys its products.

Ethnocentric Orientation

A strategy that can occur when you think that a product or service can be accepted by all consumers of certain ethnicity. Home country vs host country, host country is the one you are trying to introduce product/service. This can be called extension global standardization.

Global Advertising

Advertising is any sponsored, paid message that is communicated in a non-personal way • Single country • Regional • Global

Cross-Functional Integration

All employees must understand the value of the customer. This includes Chief Executive to Production workers.

Which of the following is true about etic and emic approaches to country analysis?

An emic approach studies a culture from within, etic anaylsis is "from the outside.

Global Industry

An industry is global to the extent that a company's industry position in one country is interdependent with its industry position in another country

Six Step Presentation

Approach Presentation Demonstration Negotiation Close Servicing the sale

Sales representatives in which Japanese industry cultivate close, long term relations with customers by selling door-to-door?

Automobiles

Nature of arbitrage

Benefitting from deficiencies and differences. One example is medical tourism. It takes advantage of differences in price of medical services around the world.

Dual Adaptation

Both many need to change for legal, cultural or other environment reasons

The world's most global retailer today in the hypermarket segment is:

Carrefour

A manufacturer attempting to set prices for its products in export markets must realize that CIF, VAT, and distributor markup all lead to:

Price dumping

Supply and Demand interaction

Country sells more goods/services than it buys There is a greater demand for the currency The currency will appreciate in value

Customer Perceived Value

Create value for customers by improving benefits or reducing price Improve the product Find new distribution channels Create better communications Cut monetary and non-monetary costs and prices

When Walmart stores first expanded into Mexico, management established a joint venture with the country's largest retailer. Judging by the approach Walmart used, management must have viewed Mexico as:

Culturally distant and difficult to enter

Primary Data

Data collected specifically for a research assignment

How do you divide up markets?

Demographics Psychographics Geography

Which of the following is no one of the steps in the Strategic/Consultative Selling Model?

Develop ethnocentric policy

Globalization (Standardization)

Developing standardized products marketed worldwide with a standardized marketing mix Essence of mass marketing

Which of the following does not contribute to price escalation in global marketing?

Different incoterms as incentives

If company managers decide to set the export price for a particular product at an amount equivalent to the home-country price, they would be using which approach to pricing?

Ethnographic

Managing Economic Exposure

Economic exposure refers to the impact of currency fluctuations on the present value of the company's financial performance. Occurs when sales are in a foreign currency

Globalization

Economic globalization constitutes integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short-term capital flows, international flows of workers and humanity generally, and flows of technology.

Efficiencies of Mass Production

Economies of scale Experience

A company adopting a(n) _______ approach to worldwide PR activities gives the host country practitioner maximum leeway to incorporate local customs and practices into the PR effort.

Ethnocentric

Which type of salesperson is best suited to selling technologically-sophisticated products in developed countries?

Expatriates

Freight forward

If the dollar rises in value and the euro decreases in favor, importers favor in this trade.

Razor and Blade

If you buy a razor, you have to buy blades for that particular razor. You basically discount the blade but make money on the blades. Another example is printers and cartridges and airplanes.

Cultural Consideration

Images of male/female intimacy are in bad taste in Japan; illegal in Saudi Arabia Wedding rings are worn on the right hand in Spain, Denmark, Holland, and Germany European men kiss the hands of married women only, but not single women In Germany, France and Japan, a man enters a door before a woman ; no ladies first! Cultural mirror is considered language.

Primary Research Challenges

In-person interviewing difficulty among Japanese managers Mail surveys virtually impossible in India Mail surveys very successful in Germany Telemarketing is popular in France Observation is particularly useful in the Middle East

Common Market

Includes the elimination of internal barriers to trade (as in free trade area) AND establishes common external barriers to trade (as in customs union) AND allows for the free movement of factors of production, such as labor, capital, and information

Economic Union

Includes the elimination of internal barriers to trade (as in free trade area) AND establishes common external barriers to trade (as in customs union) AND allows for the free movement of factors of production, such as labor, capital, and information (as in common market) AND coordinates and harmonizes economic and social policy within the union

As companies recognize and embrace new concepts such as globalization of coffee culture, the potential for effective global advertising:

Increases

Market Capitalism

Individuals and firms allocate resources Production resources are privately owned Driven by consumers Government's role is to promote competition among firms and ensure consumer protection

A freight loaded with 40-foot shipping containers leaves a port in Europe and sails to New York, where the containers are transferred to railroad cars and transported to the West Coast. At the port of San Francisco, the containers are loaded onto another freighter bound for Japan. The term that best describes this situation is:

Intermodal Transportation

Mandatory Adaption

Involves adapting products to local requirements so that they can legally and physically operate in the respective countries.

Market skimming

Is frequently used in the US and Western Europe For example, iPhone prices drop after the first couple months. Start with skimming and end with penetration

Overcoming SRC

It is best to have "eyes wide open." Marketers must be aware of the impact that SRC and other cross cultural assumptions can have. 1. Enhance management's willingness to conduct market research in the first place 2. An awareness of SRC can help ensure that the research effort is design with minimal home-country or second-country basis. 3. It can enhance management's receptiveness to research findings, even if they contradict "tried-and-true" markering experience in other markets.

Overcoming "blocked channels"

Japanese market is locked up or blocked. You overcome this by disintermediation. Do not go to the intermediaries, go to the customer directly. That is how Eddie Bauer go into Japan. They got through online sales and catalogs and then they established in Japan through customer interest in retail stores.

Born Global Firms: (according to professor)

Launching a company on the web, launching company due to global visibility and easy access to a global market.

Which of the following is an appropriate guideline for companies selecting independent distributors in international markets?

Look for distributors capable of developing markets, select distributors don't let them select you, maintain control over market strategy from day one, and treat local distributors as long-term partners.

Among the Danes, experimental decision making is common. The culture is willing to try knew things. Which of the following is a characteristic of Danish culture?

Low uncertainty avoidance

Globalization of Pro Sports

Major league sports like the NBA, NFL, and MLS are finding new fans abroad. Soccer is a global sport. The National Football League is focusing on Canada, China, Germany, Japan, Mexico, and the UK.

Coupons are not a favorite promotion tool for us in:

Malaysia

Restraining Forces Affecting Global Integration and Global Marketing

Management myopia Organizational culture National controls Opposition to globalization

Consumer Distribution Channels

Manufacturer-owned stores Walt Disney opening 600 new stores globally Nike, Levi Strauss, Apple - Independent franchise - Independent retailers - Walmart - Flagship retail stores for Apple, Sony, well-known fashion houses, Nokia, Nike to build brand loyalty, showcase products, and help gather marketing intelligence

Challenges of data

Marketers must be able to determine what matters and what doesn't. This means separating the signal from the noise. Much of data is redundant or irrelevant; the research is too narrow and needs to be adapted to certain products to local tastes to assess local demand and profit potential

Value Chain

Marketing, along with all other functional business areas, create value for the customer

Door-to-door Distribution

Mature form in the U.S. Growing popularity in China with AIG insurance, Mary Kay, Tupperware, Avon, and Amway ½ of cars are sold door-to-door in Japan with 100,000 salespeople

Product Communication Extension

May be very profitable, simple Almost no adaption Same advertising and promotional appeals Used with B2b or industrial

Global localization (Adaptation)

Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction Essence of segmentation Think globally, act locally

Polycentric Orientation

Poly means many so that means there is different strategies for different countries. For example, McDonalds went to India and realized they needed more vegetarian items on the menu for their large population of Hindu consumers. This can be called adaptation or localization. You can't control what they like but adjust to their likes/dislikes.

Competitive Intelligence

Need to know what your competitor is doing

Terms of sale

Or Incorterms, for example, you're shipping chickens from the US to Amsterdam. The shipping terms could be $15750 CIF Amsterdam. It means that you're charging the buyer for cost, insurance, and freight.

In the language of global marketing, ________ is the phrase used to describe advertising that represents a middle ground between 100% standardization and 100% localization.

Pattern advertising

Value Proposition

Perceived value to the customer; The firm's promise to the customer

Country of Origin as Brand Element

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

Personal Selling

Person to person communication between a company representative and prospective buyer Focus is to inform and persuade prospect Short term goal: make a sale Long term goal: build a relationship

Economic Freedom

Rankings of economic freedom among countries "free" "mostly free" "mostly unfree" "repressed"

Indicators of Globalization

Ratio of cross-border investment to total capital investment Proportion of industry revenue generated by all companies that compete in key world regions Ratio of cross-border trade to worldwide production

Advertising Appeal

Rational approach goes for brain by using logic and reasoning. Based on the need for information. Emotional Approach targets at user's heart.

Balance of Payments

Record of all economic transactions between the residents of a country and the rest of the world

Secondary Data

Refers to previously collected and available data (Both present challenges to global marketing research) Collections and analysis of secondary data should be done before primary data collection Secondary data is usually available at a fraction of the cost of obtaining primary data

You've been hired to advice German exporter of watches to the US. There is a high tariffs on watches in the Us and shipping costs are unique and expensive. What would you advise them to do in selling the product in the US?

Reposition the product as something more luxurious and high end product. Positioning by quality/ price.

Mystery Shoppers

Researchers posing as customers who gather observational data about a store.

Sales Promotion

Sales promotion refers to any paid consumer or trade communication program of limited duration that adds tangible value to a product or brand

Which promotional technique is best suited to a situation in which a company wants consumers to actually try its products or service at no cost?

Sampling

Price Fixing

Secret agreements between representatives of two or more companies to set prices. This is an illegal act because it is anticompetitive.

Global Market Segmentation

Segmentation is breaking up the market by sub segments based on demographics like income, gender, location, etc. The process of dividing them by similarities.

Criteria for selecting distributors in exporting

Select distributors. Don't let them select you. Look for distributors capable of developing markets, rather than those with a few good customer contacts. Treat local distributors as long-term partners, not temporary market-entry vehicles. Support market entry by committing money, managers, and proven marketing ideas. From the start, maintain control over marketing strategy. Make sure distributors provide you with detailed market and financial performance data. Build links among national distribution at the earliest opportunity.

Customer is interested in novelty items, what product pricing should they use?

Skimming

You want to charge a high price at first when the product is first released to capture the high income and demand inelastic innovators and early adopters. If they have inelastic demand, what would you recommend?

Skimming

The Triad

U.S., Western Europe, and Japan Represents 75% of world income Expanded Triad includes all of North America and the Pacific Rim and most of Eastern Europe Global companies should be equally strong in each part

Competitive Advantage

When a company succeeds in creating more value for customers than its competitors do measured relative to industry rivals

Product-Adaption-Communication-Extension

adapt the product to local use or preference conditions while extending, with minimal change, the basic home-market communications strategy or brand name

Government programs that support exports

Tax incentives Subsidies Governmental assistance Free trade zones

Direct representation

a system of choosing delegates to a representative assembly in which citizens vote directly for the delegates who will represent them

Japanese Distribution System

The channel tends to be longer. The US uses traditional channels like producer, retailer, wholesale, or directly to customers. This is called Omni Channel, which you sell through multiple avenues. With the Japanese Distribution System it include manufacturer, producer, major wholesaler, regional wholesaler, retailer then customer. The key is a they normally deal with small retailers.

Diversification Theory

The prime motivation of FDI is to diversify the risk of earning fluctuation (variance), not necessarily to maximize the profit.

Unique Selling Proposition

The promise or claim that captures the reason for buying the product or the benefit that ownership confers Since products are at differing stages of the product life cycle in different national markets and because of cultural, social and economic differences, the most effective appeal or selling proposition may vary.

The advertising promise that captures the reason that people buy products is known as:

The selling proposition

Standardized Strategy

a target market strategy that calls for creating the same marketing mix for a broad mass market of potential buyers

Thing to Consider whether to enter in international market

a. Demand b. Competition c. Political risk

Thing to Consider which countries to enter

a. Demand size b. Competition c. Political risk

Honda has invest $550 million in building an assembly plant in Greensburg, Indiana; IKEA spent nearly $2 billion to open stores in Russia; and South Korea'sLG Electronics purchased a 58% stake in Zenith Electronics. All of these are examples of:

acquisition

Geocentric Orientation

This is for a global region, and is considered a standardization. Elements of standardization but you may also have adaptation. For example, Louis Vuitton may offer a certain bag in certain colors depending on the region.

Trade Sales Promotion

Trade allowances is when you give the distributors or retailer an allowance, for example, for the size of purchase.

When you encounter phenomenon that is not clear or understood in the course of marketing, you have to do marketing research.

True

Free Trade Area

Two or more countries agree to abolish tariffs and other barriers to trade amongst themselves Countries continue independent trade policies with countries outside agreement Rules of origin requirements restrict transshipment of goods from the country with the lowest tariff to another

G-7, the Group of Seven

U.S. Japan Germany France Britain Canada Italy

Political Risk

actions of the government that can impact an international company For example, location, tariffs, control of quotas

Hedging

You can sell products/services by selling something in the forward market but there is a risk by not knowing if the market will go up/down

Target costing

You have to make sure you cover your cost or you will not be in business for long. It is a big factor in determining your cost.

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 feeds, or some other form of compensation.

Marketing Development Strategy

a growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international

Product Development Strategy

a growth strategy that offers a new product or service to a firm's current target market

Incipient market

a market that will emerge if a particular economic, demographic, political, or sociocultural tend continues. A company is not likely to succeed if it offers a product in an incipient market before the trends have taken root. After the trends have had a chance to gain traction, the incipient market will become latent, and later, existing.

Positioning by competition

a positioning strategy that seeks to differentiate a company, product, or brand by comparing it to the competition

Positioning by attribute/benefit

a positioning strategy that seeks to differentiate a company, products, or brand in terms of one or more specific benefits (e.g. reliability) offered to buyers.

Positioning by use/user

a positioning strategy that seeks to differentiate a product by associating it with users whose expertise or accomplishments potential buyers admire

Positioning by Price/Quality

a positioning strategy that seeks to differentiate a product, brand, or company in terms of expensiveness/exclusivity, acceptable quality/good value etc.

Market holding strategy:

a pricing strategy that allows management to maintain market share; prices are adjusted up or down as comprehensive or economic conditions change

Creative strategy

a statement or concept of what a particular message or campaign will say

Differentiation Strategy

a strategy that calls for targeting two or more distinct market segments with multiple marketing mix offerings

Translation issues in survey research

a survey designed and administered in the US may be inappropriate in non-Western cultures even if it is carefully translated. This can be avoided by using back translation and parallel translation.

Currency Fluctuations Effects

can create significant challenges and opportunities for any company that exports. A weakening of the home-country currency swings exchange rates in a favorable direction: a producer in a weak-country can choose to cut export prices to increase market share, or maintain its prices and reap healthier profit margins. When a home country's currency strengthens, this is an unfavorable turn of events for the typical exporter because overseas revenues are reduced when translated into the home-country currency.

Back translation

can help increase comprehension and validity; the technique requires that, after a questionnaire, or survey instruments is translated into a particular target language

Adaption

changing elements of design, function, and packaging according to the needs of different country markets

Marketing communications/promotional mix

combination of promotion tools used to reach the target market and fulfill the organization's overall goals. Advertising Public relations Sales promotion Personal selling Social media

Branding Strategies

combination or tiered branding allows marketers to leverage a company's reputation while developing a distinctive identity for a line of products

Personal selling philosophy

commitment to the marketing concept and willingness to adopt the role of problem solver/partner

Mass communication

communicating a concept or message to larger audiences, usually through a mass medium such as television or newspapers

Country Diversification and Market Concentration

company seeks out the world market for a product

Country and Market Diversification

corporate strategy of a global, multi-business company

Scale Economies

cost advantages due to a retailer's size

Scope Economies

cost of producing two products together is lower than the cost of producing them separately

Product invention

developing new products for the world market

3 target market strategies

differentiation, concentrated and standardized

Interpersonal communication

direct, face-to-face communication between two or more people

Piggyback

distribution mostly through land; refers to the transportation of goods where one transportation unit is carried on the back of something else. It is a specialised form of intermodal transportation and combined transport.

Birdyback

distribution mostly through the air; it is a combination of road and airways and is generally used in International shipments.

Fishyback

distribution mostly through the sea; concepts load a truck trailer, railcar, or container on to ship for transportation.

Independent intermediaries

do business with many different manufacturers and many different customer firms and thus help the flow of goods throughout the marketplace

Sequential market entry

do one after the other so you improve the execution, less risk

Product Invention

entails developing new products "from the ground up" with the world market in mind

Simultaneous market entry

enter all quickly to get early bid advantage

Price transparency

euro-denominated prices for goods and services that enable consumers and organizational buyers to comparison shop across Europe

Price transparency:

euro-denominated prices for goods and services that enable consumers and organizational buyers to comparison shop across Europe

_______ is a/an independent marketing intermediary that acts as the export department for two or more manufacturers whose product lines do not compete with each other.

export management company

Export marketing

exporting using the product offered in the home market as a starting point and modifying it as needed to meet the preferences of international target markets

Export selling

exporting without tailoring the products, the price or the promotional material to suit individual country requirements

Foreign Direct Investment

figures reflect investment flows out of the home country as companies invest in or acquire plants, equipment, or other assets. FDI allows companies to produce, sell and compete locally in key markets.

Polycentric (adaptation) pricing

permits subsidiary or affiliate managers or independent distributors to establish whatever price they feel is most appropriate in their market environment. There is no requirement that prices be coordinated from one country to the next. This gives companies the chance to establish prices on a regional or country-by-country basis using per capita income and economic conditions as a guide. Sensitive to market conditions but creates potential for gray marketing.

Product strategy

plan that can assist the sales representative in selecting and positioning products to satisfy customer needs.

The process of global market segmentation beings with the choice of one ore more variables to use as a basis for grouping customers. All of the following are variables that are commonly used except:

polycentrics

When the Coca Cola company convened focus groups in Europe and Asia to assess potential market acceptance of a contoured aluminum soft drink can, it was attempting to collect

primary

Colgate's Total is a new toothpaste brand whose formulation, imagery, and consumer appeal were designed from the beginning to translate across national boundaries. Which strategy did Colgate use with Total?

product communication extension

Contract Manufacturing

provide technical specifications to a subcontractor or local manufacturer

General Agreement on Tariffs and Trade (GATT)

reaty among nations to promote trade among members established in 1947 Handled trade disputes Lacked enforcement power; nicknamed the General Agreement to Talk and Talk Disputes lasted for years Replaced by World Trade Organization in 1995

Expatriates

s the main reason if they are moving to the host country. It can be the reason for failure, aka quit their job, because of the poor adjustment of the family, especially the spouse.

FCA (free carrier)

sale occurs when goods are delivered to the carrier

Dumping

sale of an imported product at a price lower than normally charged in a domestic market or country of origin. Occurs when imports sold in the U.S. market are priced at either levels that represent less than the cost of production plus an 8% profit margin or at levels below those prevailing in the producing countries. U.S. law, the Byrd Amendment provides for payment to companies harmed by dumping if they can prove both price discrimination and injury.

Identification

seeking increased sales by introducing new products in a new market.

Product Development

seeking increased sales by introducing new products into new market. 1. For example, introducing curry into Chile.

Marketing Penetration Strategy

seeking increased sales by selling existing products in existing markets. 1. Promotion 2. Lower prices 3. Increase distribution

Expropriation

seizing of assets with compensation

Confiscation

seizing your assets without paying you

Delivery duty paid

seller agrees to deliver the goods to the buyer at the place he or she names in the country of import with all costs, including duties, paid

CFR (cost and freight)

seller is not responsible at any point outside of factory

Ex-works

seller places goods at the disposal of the buyer at the time specified in the contract; buyer takes delivery at the premises of the seller and bears all risks and expenses from that point on.

FOB (free on board)

seller's responsibility does not end until goods have actually been placed aboard ship

Country Concentration and Market Diversification Strategy

serves many markets in few countries

Social responsibility

shows how a company addresses social problems.

Product-Extension-Communication Adaption

strategy is its relatively low cost of implementation because of the product itself is unchanged, expenditures for research and development, manufacturing setup and inventory are avoided.

Product-Communication Extensions

strategy when pursuing global market opportunities; very straightforward marketing strategy and can be the most profitable one as well

Law of One Price

suggests that all commodities exist in the global market and there is one price that determines their value across the globe. The market for commodities is a great example for this.

Price Promotion

tangible value may take the form of a price reduction, coupon, or mail-in-refund.

When Mattel first introduced Barbie in Japan, managers assumed that Japanese girls would find the doll's design just as appealing as American girls did. This may be due to:

the SRC tendency on the part of American managers

Place utility

the availability of a product or service in a location that is convenient to a potential customer