quiz 4 chaps 15 and 16

creating competitive advantage: building layers of advantage

- a company faces less risk if it has a wide portfolio of advantages - successful companies build portfolios by establishing layers of advantage on top of one another (evolutionary process) - illustrates how a company can move along the value chain to strengthen competitive advantage

global retailing strategies: chain acquisition

- a market entry strategy that emails purchasing a company with multiple existing outlets in a foreign country

the competitive advantage

- achieved when there is a match between a firms distinctive competencies and the factors critical for success within its industry

foreign consumer culture positioning

- associates the brand's users, use occasions, or product origins with a foreign country or culture

hedging

- balancing the risk of loss in one country with a corresponding gain in another country

brand extension

- brands that act as an umbrella for new products - example: the virgin group

private command

- centrally planned capitalism

adaptation

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

physical culture

- clothing - tools - decorative art - body adornment - homes

global strategic partnerships

- collaborative agreements - strategic alliances - strategic international alliances - global strategic partnerships

confiscation

- form of expropriation but with no compensation given

skeptics

- globalization is nothing more than an overblown aspect of our economic, cultural, and political economy - trends have come and gone as before, and so will globalization

local consumer culture positioning

- identifies with local cultural meanings - locally produced for local people

common market

- includes elimination of internal barriers (free trade area) - establishes common external barriers to trade (customs union) - allows for the free movement of factors of production, such as labour, capital, and information

arbitration

- involves selecting a disinterested and informed third party as a referee to determine the merits of the case

low income countries

- limited industrialization - high % of population in farming - high birth rates - low literacy rates - heavy reliance on foreign aid - sub-Saharan Africa

disadvantages of licensing

- limited participation/control - licensee may become competitor - licensee may exploit company resources

factors that affect sourcing

- management vision - factor costs and conditions - customer needs - logistics - country infrastructure - political risk - exchange rate - availability of money

preferential trade agreements

- many countries seek to lower barriers to trade within their regions - gives partners special treatment and may discriminate against others

countertrade

- occurs when payment is made in some from other than money - barter, offset, switch trading, etc

extension

- offering product virtually unchanged in markets outside of home country

lessening price escalation effects

- reduce the manufacturing cost per unit - reduce the quality or accessories - classify products into different and lower classifications - lower distribution costs by designing a channel that has fewer intermediaries, which reduces or eliminates mark ups, could potentially lower overall taxes - varying trade zone duty rates: tariffs may be lower because duties are typically assessed at a lower rate for un-assembled vs assembled goods

segmentation

- represents an effort to identify and categorize groups of customers and countries according to common characteristics

economic union

- same as free trade area, customs union, common market, AND coordinates and harmonizes economic and social policy within the union - creation of unified single bank - use of single currency - would lead to a central government in time

creating competitive advantage: searching for loose bricks

- searching for opportunities in the defensive walls of a competitor whose attention is narrowly focuses - focused on a market segment or focused on a geographic area to the exclusion of others

transformationalists

- seek a deeper meaning about the how and why, the consequences in order to better understand globalization to eliminate negative aspects - do not fear a world dominated by elites - globalization is a change in the existing social order

exchange rate fluctuations

- since currencies are floating freely relative to one another, no one is quite sure of the future value of any currency

affluent materialists

- status conscious - many of whom are business professionals, up and comers - use conspicuous consumption to communicate their success to others - example: buying a BMW to show others how well you've done

product saturation levels

- the % of homes who own a product

targeting

- the process of evaluation segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond

global retailing strategies: joint venture

- this strategy is advisable when culturally distant, difficult to enter markets are targeted

positioning

- to differentiate the product or brand in the target market

visible comparisons within economic freedom

- trade/tax policies - foreign investment - banking policy - wage and price controls - property rights

emotional approach strategy for advertising

- tugs at the heart strings or uses humour

Personal Selling and Managing Customer Relationship

-Personal Selling is transaction-oriented to close a specific sale with a specific customer -long term goal= to develop mutually profitable relationships

Chapter 10

Chapter 10

Enculturation

Process by which individuals learn the beliefs and behaviors endorsed by one's own culture.

Creating or Partcipating in Social networks

Social Networks: allow members to congregate online and exchange views on issues of common interest (ex: Facebook) -engage by participating in exhisting communities or creating their own -to avoid mysteries and challenges of building online presence many companies have created their own target online communities

become authorized virtual brand agents for the product manufacturers.

Social media such as blogs and social networking permits consumers to:

True

The Export Trading Company Act allows producers of similar products to form export trading companies in the U.S.

False

The Japanese distribution structure is similar to the one found in the U.S. or in Europe.

true

Wal-Mart and Tesco products sold under the respective company's umbrella name are known as private-label brands.

2007

When did Bulgaria become a member of the EU?

When the price of Product A is raised by 1 percent, its sales drop by 0.06 percent. When the price of Product B is raised by 1 percent, its sales drop by 1.5 percent. This means that demand for Product A is _______, while demand for Product B is ________. a. partially elastic, inelastic b. unelastic, inelastic c. inelastic, elastic d. elastic, partially elastic e. elastic, inelastic

c. inelastic, elastic

To forecast sales for your firm's new product, you want to use a forecasting technique that is based solely on input from sources internal to the firm. Which of the following groups of techniques meets your criterion? a. survey of buyer intentions, sales force composite, and trend analysis b. test markets, survey of buyer intentions, and sales force composite c. jury of executive opinion, sales force composite, and trend analysis d. Delphi technique, jury of executive opinion, and test markets

c. jury of executive opinion, sales force composite, and trend analysis

television shopping networks

cable channels that sell products to a television audience.

The emergence of pan-European communications media will most likely cause companies to:

choose more standardized promotional efforts.

Most toy manufacturers would agree that toys cannot be marketed profitably in countries without commercial television advertising directed toward children. In this scenario, commercial television advertising exemplifies the availability of appropriate ________.

communication channels

laggards

consumers who are the last to adopt new products and do so only in late maturity because they are risk averse and conservative in their spending; they account for 16% of the total market

early majority

consumers who enjoy the status of being among the first in their peer group to purchase a popular product; they account for 34% of the total market

In the context of international advertising, it has been observed that advertising expenditures are generally ________.

cyclical

developing and evaluating concepts

determining how consumers will perceive and use a new product;a step in the new product development process

greenfielding

developing a brand new subsidiary

Of the seven steps involved in international advertising, ________ almost always represents the most daunting task for international marketing managers.

developing messages

In the context of the use of the Internet in international marketing channels, technically, e-commerce is a form of ________ selling

direct

Economic Environment Factors

economic factors reflect a country's attractiveness as a market 1. Industry structure 2. income distribution

Free Trade agreement

eliminates all tariff and non-tariff barriers to trade

economic risk factors

failing GDP, high inflation, capital flight, decline in productivity

The ________ step in the international communications process refers to the information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process.

feedback

Which of the following steps of the international communications process is important as a check on the effectiveness of the other steps?

feedback

complementary export agents

firms that export other firms' products that are complementary to their offerings, along with their own products, for a fee/ commission.

Knockoff

good that imitate the overall look of designer originals, but don't use the words or symbols of a designer brand label to deceive consumers. Much of the legitimate fashion industry consists of knockoffs of designer styles

vending machines

interactive modes of retailing convenience goods.

foreign- country intermediaries

intermediaries who help distribute products in a target foreign market.

media restrictions

legal or self-imposed restrictions on the types and the number of advertisements aired or published.

Using newspapers or magazine ads as a channel of communication when the majority of the intended users are illiterate is an example of ineffective ________ in the communications process.

media channel selection

operational risks

medium risk, govt policies that constrain management

combination stores

medium-sized retail stores that combine food and drug retailing.

paris convention covers what

patents

_____ spend more time on social media sites than any users in any other country. A. Mexicans B. Americans C. Israelis D. Spaniards E. Italians

C. Israelis

International Marketing

The performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit.

International Marketing

The performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for profit

Current Account

The portion of a balance of payments statement that shows a record of all merchandise exports, imports, and services, plus unilateral transfers of funds

executive-judgment method

a budgeting process that allocates the company's advertising budget based on the opinions of executives.

comprador

a foreign agent with an exclusive arrangement with a company, representing its operations in a particular country; also referred to as a managing agent.

print medium

a nonpersonal channel of communication such as a newspaper, magazine, billboard, pamphlet, or point of-purchase display.

interactive medium

a nonpersonal channel of communication such as a web page or a computer terminal on the retailer's premises.

broadcast medium

a nonpersonal channel of communication such as television or radio.

with high literacy rates

In the context of media planning and analysis, billboards are especially useful in countries:

decoding

In the international communications process, _____ is defined as the interpretation by the receiver of the symbolism transmitted from the information source.

information source

In the international communications process, an international marketing executive with a product message to communicate acts as a(n) _____.

Which of the following is true of the newspaper industry around the world?

Most U.S. cities have just one or two major daily newspapers

percent-of-sales method

an advertising budgeting method that determines the total budget allocated to advertising on the basis of past or projected sales.

While developing an international advertisement campaign, which of the following is the first step of the process?

perform marketing research

Complementary marketing is commonly known as ________.

piggybacking

adaptation of the advertising strategy

the act of changing a company's promotional mix to each country or market or creating local campaigns.

produch length

total number of brands in the product mix- all the brands sold by a company

belief

- an organized pattern of knowledge that an individual holds to be true about the world

global retailing strategies: organic growth

- company uses its own resources to open a store on a greenfield site or acquire one or more existing retail facilities

private market

- market capitalism

The CAGE model

-Cultural Distance -Administrative and Political Distance -Geographic Distance -Economic Distance

Cultural Exclusive

A business custom in which an outsider must not participate

Meta Garbon, a manufacturer of sports bicycles, in a bid to tap the enormous market for bicycles in China promote their cycles as premium sporting and leisure bicycles. They use various cycling legends and sports celebrities as brand ambassadors, and use television, radio, and newspapers as media. Bicycles in China are used mainly by the working class for commutation, and the main users of bicycles did not relate to Meta Garbon's products and the promotional campaign was a failure. During which of the following steps of the IMC process did Meta Garbon go wrong?

A. Information source selection

_____ is one of the major barriers to effective communication through advertising.

A. Language

Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the _____ of television commercials permitted when their programs are classified as advertisements.

A. Length and number

6 major segmentation variables

1.Geographic Segmentation 2. Demographic Segmentation (the most popular!) 3.Psychographic Segmentation 4.behavioral Segmentation 5. Usage Rate 6. Loyalty Status

With regard to consumer products, which of the following is the major limitation of the Internet?

B. Coverage of the Internet

a

Anne Klein II is an example of a a. line extension b. product mix c. product length d. none of the above

Early maturity

At what stage of the International Product Life Cycle (IPLC) do multinational companies (MNCs) move their production to developing countries? Why do they move production?

Companies with marketing facilities or contacts in different countries with excess distribution capacity or a desire for a broader product line sometimes take on additional lines for international distribution. The formal name for such activities is _____. A. skimming B. backhauling C. complementary marketing D. export marketing E. demand shifting

C. complementary marketing

In the international communications process, _____ is defined as the interpretation by the receiver of the symbolism transmitted from an information source. A. encoding B. message selection C. decoding D. message channel selection E. feedback evaluation

C. decoding

In the context of international advertising, companies are moving from the commission system to a _____ system. A. tactical B. standardized C. reward-by-results D. self-regulation E. business-to-business

C. reward-by-results

Blogs, virtual worlds, and video sharing are examples of media commonly known as _____. A. global media B. local media C. social media D. Texas Visual Imaging E. widespread media

C. social media

Case 4-1

Case 4-1

Closing

Define: is the process where salesperson should recognize signals from the buy- including physical actions, comments, and questions to close the sale

True

Different cultures often seek the same value or benefits from the primary function of a product.

True

Domestic middlemen are most likely to be used when the marketer desires to minimize financial and management investment.

true

Factory outlet shops are an example of off-price retailers.

T or F? Feedback channels must be carefully selected if an encoded message is to reach the consumer.

False

False

Feedback channels must be carefully selected if an encoded message is to reach the consumer.

Regular foreign marketing

Firm has committed permanent resources towards international marketing and engages in it regularly on a proactive basis May use intermediaries to engage in international marketing

Global Marketing

Firms start viewing the world, including home market as one market

D

Food retailers include which of the following? A. superstores. B. convenience stores. C. warehouse clubs. D. all of the above.

A joint venture consists of 2 companies who share equity, labor, and capital a Consortia is 3 or more companies.

How is a consortia different from a joint venture?

False

In the context of the distribution structure in Japan, it has been observed that Japanese consumers favor cheaper prices over personal service.

Israel

In which of the following countries is the time spent on social media sites the highest?

Sales promotion

In-store demonstrations, samples, coupons, contests, and sweepstakes are examples of _____ devices.

Mobile Phone Marketing

Includes: 1. ring tone giveaways 2. mobile games 3.ad-suported content 4. contests and sweepstakes

Political and Social Activists (PSAs)

Individuals who participate in efforts to change practices and behaviors of corporations and governments with tactics that can range from peaceful protest to terrorism

Which of the following statements is true regarding an export management company (EMC)?

It calls for minimum investment from the parent firm to get into international markets.

Study questions

Study questions

Trading companies provide the best means for intensive coverage of the market in Japan

TRUE For companies seeking entrance into the complicated Japanese distribution system, the Japanese trading company offers one of the easiest routes to success. Because trading companies may control many of the distributors and maintain broad distribution channels, they provide the best means for intensive coverage of the market.

Balance of Payments

The system of accounts that records a nation's international financial transactions

1. General agreements: Bilateral and multilateral forums and agreements 2. Free trade agreements 3. Customs unions 4. Common markets 5. Monetary unions 6. Political unions

What are the six levels of regional economic and political integration?

new line

a new product category offered by the company

associative counterfeit/limitation

- product name differs slightly from a well-known brand

current issues in competitive advantage

- short product life cycles - short product design cycles - new technologies - globalization - competition unfolds in a series of dynamic strategic interactions in four areas: cost vs. quality, timing and know-how, and barriers to entry - the role of marketing is innovation and the creation of new markets

government programs that support exports

- tax incentives - subsidies - governmental assistance - free trade zones ***

problems w/ primary data

-language diversity -ability to communicate opinions -biases (non-response, yea or nay saying, social desirability bias, income & gender related questions) -willingness to respond -personal referrals needed

Income Distribution

1. Low-income households 2. Middle-income households 3. High-income households ex: effort to boost its presence in Asia;s third largest auto market and Ford introduced the Figo a hatchback

Researching Foreign Markets: A 3 Step Approach

1. Preliminary screening 2. analysis of industry potential 3. analysis of company sales potential

Trends in Wholesaling

1. need for greater efficiency: consumers want even lower prices 2. Added-value customer relationships: need to add value by increasing efficiency and effectiveness of the entire marketing channel 3. Increase in customer demand for more services 4. Increase use of technology to boost productivity

Cultural Imperative

A business custom that must be recognized and accommodated

False

A physical distribution system involves only the physical movement of goods.

Texas Visual Imaging

Blogs, social networking, and video sharing are examples of media commonly known as _____.

True

Channels of distribution often pose longevity problems.

Chapter 11

Chapter 11

Chapter 7

Chapter 7

True

Competitive advertising is a source of noise in the international communications process.

1. Power Distance 2. Uncertainty Avoidance 3. Masculinity 4. Individualism

Define the four Hofstede dimensions of cultural variability.

In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment?

Direct sales force.

In the international communications process, during _____, the message from the source is converted into effective symbolism for transmission to a receiver.

E. Encoding

Contests, sweepstakes, sponsorship of special events such as concerts are techniques used for maintaining and improving public relations.

False

true

Glamor, Cosmopolitan, and Mademoiselle are all examples of global media

cultural change

In the context of international advertising, global mass media advertising is a powerful tool for _____.

Segmenting International Markets

Intermarket segmentation: forming segments of consumers who have similar needs and buying behaviors even through they are located in different countries International Segment by: 1. geographical location 2. economic factors 4.political and legal factors 5.cultural factors

________ spend more time on social media sites than any users in any other country.

Israelis

category specialists/ category killers

Large general merchandise discount stores that carry a narrow variety of merchandise and a wide assortment.

-A common culture -A shared history -Regional proximity -A similar level of economic development.

List four factors that prompt countries to engage in economic and political integration

Requirements for Effective Segmentation

Measurable, Accessible, substantial, differentiable, actionable

false

Product trialability interferes with the diffusion process.

Tokyo-Nagoya-Osaka

Sixty percent of the Japanese population lives in the _____ market area, which essentially functions as one massive city.

Controllable Elements

The aspects of trade over which a company has control and influence; they include marketing decisions covering product, price, promotion, distribution, research, and advertising

Linguistic Distance

The measure of difference between languages; an important factor in determining the amount of trade between nations

false

Trade shows are an example of consumer sales promotion.

True

Traditional channels in developing countries evolved from economies with a strong dependence on imported manufactured goods.

Dual Adaptation

Using this, the company must adapt the product as well as the marketing communication to the foreign market

joint venture

a corporate entity created with the participation of two companies that share equity, capital, and labor.

D

a manufacturer may charge different prices in different markets for the same product. A. to meet target market needs. B. due to changes in the exchange rate. C. due to differences in wholesale prices. D. all of the above.

transfer pricing

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

Which of the following statements about cross-promotion is inaccurate? a. Its effectiveness is limited to complementary products. b. It may utilize a mix of promotional tools. c. Its importance in the marketing world is likely to increase over time. d. The partners share promotional costs.

a. Its effectiveness is limited to complementary products.

You work for a multinational food corporation that specializes in breakfast foods. For the last ten years, your breakfast bars have dominated the market and been found on the tables of 65 percent of the families in the United States. In the last three quarters, however, your product has not been performing as well; you think the younger generation of parents perceives your bars, incorrectly, as high in sugar and fat and is unaware of their healthy ingredients. Your company develops a series of buy-one-get-one-free promotions and arranges for retailers to hand out samples at their stores. Despite all the resources you invest in this promotional campaign, the product's performance does not improve over time. Why is the approach to marketing described in the scenario ineffective? a. The company's promotional objective was inappropriate given its marketing needs. b. The prices for the product were too high for young families. c. The company chose the wrong target market. d. The goals for the promotional campaign were too broad.

a. The company's promotional objective was inappropriate given its marketing needs.

In the fall of 2014, Coca-Cola brought back Surge, its answer to PepsiCo's Mountain Dew. It had first offered Surge for sale in 1996 but had stopped production in 2002. Surge was marketed as a novelty, a revival of the brand for nostalgic consumers. Assuming that buyers would want this specialty, limited-production item quickly in order to show it off to friends, the company also featured next-day delivery, exclusively from Amazon. Which of the following price levels was most likely associated with the Surge revival? a. a prestige item level b. a value pricing level c. a parity level d. a reentry level e. a volume discount level

a. a prestige item level

The promotional mix must be tailored not only to a product's characteristics but also to its stage in the product lifecycle. Fill in the blanks with the terms from the drop-down list that would best complete each sentence. a. As a new product grows and matures, __________ gains in importance relative to other promotional tools. A product in early decline will typically experience reductions in ____. When newly introduced, a product can benefit from both personal selling and _____ types of promotion.

a. advertising b. advertising and sales promotionals c. nonpersonal

Sue runs a high-end jewelry boutique. In the past, she provided complementary gift wrapping, but there has been so much demand for this service that she has decided to start charging for it and limiting it to only one wrapped item per customer. Which of the following elements of retailing strategy is Sue about to change? a. customer service b. customer amenities c. pricing d. merchandising e. store atmospherics

a. customer service

Which of the following is not among the three foundations of pricing strategy? a. margin b. competition c. potential demand d. costs

a. margin

Selena is embarrassed. After explaining to her boss how the company's CVP (cost-volume-profit) relationship affects its pricing strategy, she realizes that she left out a key variable. Reviewing her notes, she sees that she included price, sales volume, and profit margin. What did Selena leave out? a. price sensitivity of consumers b. breakeven margin c. past pricing history d. pricing regulations

a. price sensitivity of consumers

trialability

ability of the consumer to experience a product with minimal effort

host country nationals

advantages - economical - superior market knowledge - language skills - superior cultural knowledge fast implementation disadvantages - needs product training - may be held in low esteem - language skills may not be important - difficult to ensure loyalty

product line

all the brands the company offers in the same product category

You are the marketing manager of a small start-up retail company. You are aware that your company's pricing strategies are an important way to communicate your firm's image to consumers. You also realize that as a start-up your company must make every effort to attract customers. After thoroughly analyzing your competitors' offerings, you decide to set the prices of your company's merchandise at odd, unusual numbers slightly below a round number. For example, instead of pricing an item at $10.00 you price it at $9.95. What is the most likely reason to employ this odd pricing strategy? a. This allows the retailer to inconspicuously change the prices at any time. b. This makes the price seem like $9.00 plus change rather than a full $10.00. c. This allows the retailer to emphasize important characteristics that differentiate product lines at different price points. d. Odd-numbered pricing adds to the perceived prestige of the company on the part of consumers.

b. This makes the price seem like $9.00 plus change rather than a full $10.00.

The director of marketing at your company has asked you to evaluate the cost-cutting potential of using marketing intermediaries. You point out to his or her that intermediaries will save money in some, but not all, of your marketing activities. In which of the following activities would marketing intermediaries be ineffective in saving money? a. delivering product b. manufacturing product c. warehousing product d. selling to multiple customers e. maintaining inventory

b. manufacturing product

You are the head of sales for an industrial machinery company. The approach you use to organizing your sales force is similar to that of many other B2B firms. This approach is: a. territory specialization b. channel specialization c. product category specialization d. geographic specialization

c. product category specialization

public appearances

company representatives' public involvement, speaking on behalf of the international firm and its products.

All of the following are categories used to classify retailers except: a. shopping effort b. services provided c. product lines d. form of financing e. form of ownership

d. form of financing

countervailing duties

duties imposed on subsidized products imported into a country.

Unlike wholesalers and manufacturers, retailers represent the distribution channel to most consumers. Which of the following is not a reason for this consumer perception? a. Consumers rely on retailers to obtain a wide array of merchandise. b. Retailers determine merchandise selections. c. Retailers determine shopping hours and locations. d. Consumers have little contact with wholesalers and manufacturers. e. Retailers have little contact with wholesalers and manufacturers.

e. Retailers have little contact with wholesalers and manufacturers.

Weights of Political Risk Service (PRS)

economic (33 points) Politics (50 points) Society (17 Points)

Counterfeit

goods that pretend to be the real thing, bearing a designer brand's label or signature symbol

what institutional void

lack of knowledge/ information, especially in underdeveloped countries

A ________ provides a selling service for a manufacturer, has a short-term relationship, and operates on a straight commission basis.

manufacturer's export agent

Integrated marketing communications are composed of all of the following EXCEPT:

political rallying

continuous innovation

product innovation where there is no disruption in consumption patterns; such innovations involve product alterations such as new flavors or new products that are improvements over the old offerings

________ are considered to be major communications media in most countries due to their inherent entertainment value.

radio and television

configuration

refers to where and how activities will be located (e.g. R&D, design, manufacturing) -concentrated in 1 or many countries

global marketing approach

requires the firm to focus its efforts world-wide rather than developing marketing strategies on a country by country basis Objective- coordination and integration of production, marketing, and other functional activities across countries

In the context of cultural reactions when engaging in e-commerce, the color red is associated with socialism in ________.

spain

incoterms

terms of sale used in transactions.

globalization

the practice of global branding and localized marketing adaptation to differences in local culture, legislation, and even production capabilities

media reliability

the probability of the media to air advertising messages on time, at an acceptable quality, and with the agreed on frequency.

all-you-can-afford method

the process of allocating the maximum amount possible to advertising; the method is used by small and medium-sized corporations.

franchisee

the recipient party to a franchise who pays royalties in return for the right to use the franchisor's brand name and related trademarks.

madrid arrangement covers what

trademarks

Product Adaptation-Communications Extension

Adapt the product to local use but the message stays the same

their ability to span a wide geographical region.

One of the drawbacks of satellites is:

true

Outsourcing involves the strategic use of outside resources to preform activities that are usually handled by internal staff and resources.

Assumes a viable economic integration and involves the establishment of viable common governing bodies, legislative bodies, and enforcement powers.

Political Union

contract manufacturing

Relationship between 2 companies wherein one company contracts with another to manufacture products according to the contracting company's specifications and for a specified amount of time

Non-Tariff Barriers

Restrictions other than tariffs, placed by countries on imported products; they may include quality standards sanitary and health standards, quotas, embargoes, boycotts, and anti-dumping penalties

B

Retailers that offer a narrow product line and a wide assortment- for example, office supply stores- are examples of A. specialized markets. B. specialty stores. C. department stores D. all-purpose discount stores.

Domestic middlemen are most likely to be used when the marketer desires to minimize financial and management investment.

TRUE A major trade-off when using home-country middlemen is limited control over the entire process. Domestic middlemen are most likely to be used when the marketer is uncertain or desires to minimize financial and management investment.

Agent middlemen work on commission and do not take title to the merchandise

TRUE Agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise. By using agents, the manufacturer assumes trading risk but maintains the right to establish policy guidelines and prices and to require its agents to provide sales records and customer information.

tobacco

The assault on advertising of _____ is escalating internationally, as evidenced by the World Health Organization launching a global campaign against it.

Common Law

The body of law based on tradition, past practices, and legal precedents set by courts through interpretations of statues, legal legislation, and past rulings. Common law which used in all states in the United States except Louisiana, uses past decisions to interpret statues and apply them to present situations. Also known as English Law.

D

The budgeting decision that is mostly used by small medium-sized corporations' campaigns is the A. percent-of-sales method. B. executive-judgment method. C. competitive-parity method. D. all-you-can-afford method.

Which of the following is true of advertising agencies for international advertising?

The cross-cultural communication between a foreign client and a local agency can be problematic.

in-country testing with the target consumer group.

The only way to avoid linguistic problems in advertising communication is by:

World Trade Organization (WTO)

The organization formed in 1994 that encompasses the GATT structure and extends it to new areas that had not been adequately covered previously. The WTO adjudicates trade disputes. All member countries have equal representation.

self-reliance criterion

The unconscious reference to one's own cultural values, experiences, and knowledge

Oculesics

The use/avoidance of eye contact during communication.

Designing a Message-forms

Three types of appeals 1. Rational: relates to audiences self-interest, show product will produce desired benefits (ex: weight watchers) 2. Emotional: attempt to sure up positive or negative emotions to motivate purchase, like love/joy/humor, humor is the most effective in getting people to talk and rewatch 3. Moral: directed at the audience's sense of right and proper, try and get people to support social causes Format -needs a strong format for the message -one study suggests that color increases brand recognition by up to 80% (ex: target, mcdonalds, UPS)

T or F? In the context of advertising, a marketer's self-reference criterion (SRC) affects the ultimate success of the communication.

True

T or F? In the context of international advertising, search engines have now become crucial directors of Internet users' attention.

True

Opium Wars

Two wars fought between China and Britain over the British run Opium trade in China during the middle 1800s. The British navy attacked Chinese ports in retribution for a Chinese ban on the drug, and the Treaty of Nanjing signed in 1842 allowed greater European access to Chines ports generally, a resumption of the opium trade and a ceding of Hong Kong to British control

False

Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process of communication are called feedback.

True

While developing an international advertisement campaign, the last step of the process is evaluating the campaign relative to the goals specified.

because it segments Age Occupation Education Income Ethnicity Race Nationality Life-cycle stage Social class

Why is demographic segmentation so popular in micro-segmentation of markets?

creativity

With respect to advertising, _____ is especially important when a budget is small or where there are severe production limitations.

Princeton Video Imaging

_____ allows ESPN to fill visual real estate—blank walls, streets, stadium sidings—with computer-generated visuals that look like they belong in the scene.

nonpersonal medium

a channel of communication such as a print medium, a broadcast medium, or an interactive medium that does not involve contact between the seller and the consumer.

cost-based transfer pricing

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

Setting Advertising Objectives

advertising objective: specific communication task to be accomplished with a specific target audience during a specific time -objectives based on past decisions about target market, positioning, and the marketing mix. Overall objective is to help building consumer relationships by communicating customer value -objectives classified by their objectives; to inform, persuade, or remind

manufacturer's export agents

agents in the firm's home country handling the exporting function of a certain manufacturer on a commission, per deal, basis.

true

aggressive export pricing involves pricing products below market price to penetrate new markets.

swing credits

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

geographical dimension

as distance increases, transportation cost increases, the greater the distance the less likely countries are to invest overseas

One approach to defining the pricing policy of dumping is to say that it is a case where a product is sold in the international market:

at a price below the cost of production.

What is a promotion mix (marketing communications mix)

blend of advertising, public relations, personal selling, and direct marketing tools that the company uses to persuasively communicate customer value and build customer relationships

private labels

brands sold under the brand name of a retailer or some other distributor

Which of the following countries has the largest number of retailers?

china

Japan/ china intellectual property

code law "first to register" for patents patent application public -social sharing - 3 R's (register, record, remedies) -register before product enters china

Companies with marketing facilities or contacts in different countries with excess distribution capacity or a desire for a broader product line sometimes take on additional lines for international distribution. The formal name for such activities is ________.

complementary marketing

Sales promotions are short-term efforts directed to the consumer or retailer to achieve specific objectives such as:

consumer product trial or immediate purchase.

false

countries with a shortage of soft currency reserves are more likely to engage in countertrade

merchant middlemen

different intermediaries who carry the manufacturer's product line in a particular country; they both carry title to and have physical possession of the products they distribute.

The channel process includes all activities, beginning with the manufacturer and ending with the ________.

final consumer

One of the reasons that channels of distribution often pose longevity problems is that most middlemen ________.

have little loyalty to their vendors

ownership control risks

high risk, govt policies that prohibit ownership

brokers and agents

intermediaries who bring international buyers and sellers together; they do not carry title to the product.

export merchants

intermediaries who take title to and possession of the products they carry; they are responsible for shipping and marketing the products to the target market.

transfer risk

least risky, govt policies that limit transfer in and out of the country

A wine company had to market its products with a different name in a foreign market as it was mandatory to translate the name in the local language. The factor that is influencing product adaptation in the above scenario is _____.

legal requirements

institutional voids

legal systems, social and political systems, product market systems, and financial systems

export trading company (ETC) act

legislation, passed in 1982, that encourages the formation of export trading companies by competing firms to promote U.S. exports without violating antitrust regulation.

Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the ________ of television commercials permitted when their programs are classified as advertisements.

length and number

The advantages of ____, a market-entry strategy, are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse.

licensing

modular adaptation

localization across markets of the product by offering parts that can be assembled worldwide in different configurations depending on the needs of the market

location advantage

locate activities based on abroad resources

Which of the following characterizes the business philosophy of the Japanese distribution channels?

loyalty

internationalisation advantage

maybe more advantage to go overseas than stay local

In the context of the communication process in advertising, using the Internet as a medium when only a small percentage of an intended market has access to it is an example of an error related to:

message channel selection

Creating the Advertising Message

need to break through the clutter: 1. Gain attention 2. Communicate Well * today average household receives about 135 channels *consumers are exposed to as many as 3000-5000 commercial messages every day *TV advertisers pay an average of $324,000 to produce a single 30-sec commercial then each time they show it its $122,000 for 30 secs - consumers only watch about 40% of all advertisements -Advertisers need to be better planned, more imaginative, more entertaining, and more rewarding to consumers -Merging Advertising and Entertainment: many marketers have subscribed to a new merging of advertising and entertainment called "Madison & Vine" -Branded Entertainment: involves making the brand an inseparable part of some other form of entertainment. Most common form of branded entertainment is product placements- embedding brands as probs within other programming

product depth

number of different offerings for a particular brand (all the detergent brands offered by a single mother corporation)

Economic Freedom

people have the right to work, produce, consume, save, and invest the way they prefer

ethnocentrism

people in one's own company, culture or country now best how to do things

value proposition

perceived value to the customer the firms promise to the customer

A company uses _____ when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received.

price skimming

dynamic incremental pricing

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

diffusion process

process by which a product is adopted by consumers worldwide

An especially effective promotional tool when a product concept is new or has a very small market share is ________.

product sampling

Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of _____.

public relations

company publications

public relations publications that describe the products of a company to potential customers and summarize financial achievements.

Certain advertising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent in:

radio and television broadcasting.

coordination

refers to the governance of the activities, how they are linked together throughout a chain which is dispersed geographically among many countries

POWER DISTANCE

refers to the manner in which interpersonal relationships are formed when differences in power are perceived

A major goal of the Export Trading Company (ETC) Act was to:

remove antitrust disincentives to export activities.

catalog retailers

retailers selling products through mail catalogs.

general merchandise discount stores

retailers that sell high volumes of merchandise, offer limited service, and charge lower prices

off-price retailers

retailers who sell brand name products and designer merchandise below regular retail prices.

television home shopping

retailing through cable channels selling to consumers in their homes, through infomercials, and through direct response advertising shown on broadcast and cable television.

direct mail retailing

retailing using catalogs and other direct mail, instead of brick-and-mortar stores.

In the context of international advertising, companies are moving from the commission system to a ________ system.

reward-by-results

In the context of controlling middlemen, parallel importing is also known as ________.

secondary wholesaling

direct selling

selling that involves a salesperson, typically an independent distributor, contacting a consumer at a convenient location- at his or her home or workplace, demonstrating product use and benefits, taking orders, and delivering the merchandise.

internet retailing

selling through the internet using web sites to increase market penetration and market diversification; also called interactive home shopping and electronic retailing.

electronic retailing

selling through the internet using web sites to increase market penetration and market diversification; also called interactive home shopping and internet retailing.

catalog showrooms

showrooms displaying the products of catalog retailers, offering high turnover, brand name goods at discount prices.

mother henning

sing the distribution system of exporter with established systems of selling abroad who agree to handle the export function of a noncompeting (but not necessarily unrelated company on a contractual basis; also called piggybacking and cooperative exporting.

convenience stores

small retailers located in residential areas, open long hours, and carrying limited lines of high-turnover necessities.

Blogs, virtual worlds, and video sharing are examples of media commonly known as ________.

social media

press releases

statements issued to the press to communicate news about a company and its products.

news releases

statements issued to the public to introduce a new product, touting its advantages; any other information shared with the media.

simulated test marketing

test marketing simulating purchase environments where samples of target consumers are obsevred in their product related decision making process

controlled test marketing

test marketing that involves offering a new product to a group of stores and evaluating the markets reaction to it

test marketing

testing new product performance in a limited area of a national or regional target market to estimate product performance in the respective country or region

entry mode

the approach to international expansion a company chooses based on desired control and on the risk it can afford.

Direct mail is an unpopular medium in Chile because:

the letter carrier must collect additional postage for every item delivered.

licensor

the owner of a product license who agrees to share know-how, technology, and brand name with the licensee in return for royalties

franchisor

the owner of the franchise who gives the franchisee the right to use its brand name and all related trademarks and its business know- how, such as secret recipes and customers interfacing techniques, in return for royalties.

compensation

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

growth stage

the stage of the IPLC characterized by increasing competition and rapid product adoption by the target market

globalization

to standardize: - develop standardized products marketed worldwide - essence of mass marketing

product width

total number of product lines that a company offers to its target international consumers (culinary products, ice cream, detergents, shampoos, cheeses, teas, etc...)

3 types of political risks

transfer, operational, ownership

standardized pricing

uniform price worldwide.

outsourcing

use of outside resources to perform activities that are usually handles by internal staff and rsources

what happens when you lose right to trademark

you pay royalties

PRS Economic Factors

-falling GDP/ per capita -high inflation -raw materials as a percentage of exports

attitude

-learned tendency to respond in a consistent way to a given object or entity

Marketing Impact on Other Businesses

1. Acquisition of Competitors 2. Creating barriers to entry 3. unfair competitive marketing practices

Benefits of Direct Marketing to Buyers

1. Convenience 2. Ready access to many products 3. access to comparative information about companies, products, and competitors 4. interactive and immediate (buyers can interact with sellers by phone, website, etc and gives consumers a great measure of control)

Price Changes

1. Initiating Price Cuts reasons: excess capacity, falling demand because of competition or weakened economy, dominate market through lower costs 2, Initiating Price Increases Reasons: greatly improve profits, cost inflation, over demand A price increase or drop can effect how consumers view the brand

Steps in Developing Effective Marketing Communication-Choosing a Media Personal Communication

1. Opinion Leaders: people within a reference group who, because of their special skills, knowledge, personality, or other characteristics, exerts social influence on others 2. Buzz Marketing: involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities -personal influence is very persuasive for expensive, risky, or highly visible -50% of consumers=friends and family are #1 influence on purchase

Factors Contribute to Rapid Growth of Sales Promotions

1. Product managers under pressure to increase current sales 2. Companies face more competition 3. Competing brands offer less differentiation 4. advertising efficiency has declined due to rising costs, clutter, and legal constraints 5. Consumers are more deal-oriented

false

A product line is defined as the complete assortment of products that a company offers to its target international consumers.

Cremics, a multinational drug manufacturing company, used a saffron trident in a promotional campaign for one of its drugs in India. The saffron trident, a religious symbol in India, was meant to indicate the three levels of efficacy of the drug but mistakenly conveyed a religious message to Indians. This miscommunication indicates a problem associated with which of the following steps of an international communications process? A. Encoding B. Noise cancellation C. Media channel selection D. Message transmission E. Information source selection

A. Encoding

_____ take title to manufacturers' goods and assume the trading risks. A. Merchant middlemen B. Brokers C. Buying offices D. Export agent E. Agent middlemen

A. Merchant middlemen Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen. Merchant middlemen provide a variety of import and export wholesaling functions involved in purchasing for their own account and selling in other countries.

_____ are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

A. Sales promotion

Which of the following is one of the six Cs of distribution channel strategy?

Continuity

Political Risk

The probability that a set of unwanted events may occur

While developing an international advertisement campaign, the last step of the process is evaluating the campaign relative to the goals specified.

True

Toy, tobacco, and liquor advertising is restricted in numerous countries.

Which of the following statements about advertising laws around the world is correct?

The Japanese distribution structure supports long-term dealer-supplier relationships.

Which of the following statements is true of the Japanese market?

Perform marketing research

While developing an international advertisement campaign, which of the following is the first step of the process?

innovation

a product new to the world

radical innovation

creation of new industries or new standards of management, manufacturing, and servicing that represent fundamental changes for consumers, entailing departures from established consumption

Building Equity

*brands=powerful assets!!! 1. Brand Equity: differential effect that knowing the brand name has on customer response a. Positive Brand equity: consumers react more favorable to it then generic or unbranded products b. Negative brand equity: consumers react less favorably than to an unbranded version

attribute or benefit

- economy - reliability - durability

piracy

- unauthorized publication or reproduction of copyrighted work

Sustainable Marketing Principles

1. Consumer Oriented marketing 2. Customer Value Marketing 3. Innovative Marketing 4. Sense-of-missio marketing 5. Societal marketing this is for best long-run performance

False

A distinguishing characteristic of the Japanese distribution channel system is that it is controlled by a few small retailers found in the country.

In the context of controlling middlemen, parallel importing is also known as _____. A. secondary wholesaling B. black marketing C. backwashing D. industrial piracy E. smuggling

A. secondary wholesaling

Spain Tunisia Greece

According to Marketing Illustration 9-2 about Italian olive oil (p. 271), where does most of the olive oil found in the famous Italian brand of olive oil called Filippo Berio actually come from?

Which of the following statements about advertising laws around the world is correct?

B. Toy, tobacco, and liquor advertising is restricted in numerous countries.

_____ in advertising is a thorny issue, because most member countries of the European Commission have different interpretations of what constitutes a misleading advertisement.

C. Deception

Chapter quiz

Chapter quiz

In the context of the communications process in advertising, problems of literacy, media availability, and types of media create challenges in the communications process at the _____ step. A. feedback B. decoding C. amplification D. encoding E. message selection

D. encoding

The only way to avoid linguistic problems in advertising communication is by: A. creating an entirely new advertisement for the new market. B. using only English in all media promotions. C. developing a new version of the product for the new market. D. in-country testing with the target consumer group. E. using facial expressions and physical gestures in the advertisement.

D. in-country testing with the target consumer group.

Dunken vs. Starbucks

Dunkin: targets the everyday people, middle class Starbucks: people willing to pay a little extra, want the atmosphere, more upper/business class/people

Which of the following steps of a communications process is important as a check on the effectiveness of the other steps?

E. Feedback

While developing an international advertisement campaign, which of the following is the first step of the process?

E. Perform marketing research

_____ suffer(s) from issues such as difficulty in assessing taxes, unfair competition, import duties, and privacy.

E. The Internet

Integrated marketing communications are composed of all of the following EXCEPT:

E. political rallying

Minako works for a media agency based in Japan. Minako is helping the IMC manager of Siljure, a French cosmetics company, with the design and language to be used in an upcoming promotional campaign in Japan. The IMC manager knows what to convey but wants to advertise it in a culturally relevant manner. Which step of the IMC process is Minako helping Siljure with?

Encoding of the message.

True

Errors at the receiver end of the international communications process do not occur if the message is encoded properly.

General Motors, ________, and DaimlerChrysler have created a single online site called Covisint for purchasing automotive parts from suppliers.

Ford Motor Company

c

Franchising constitutes a primary entry mode for the ___ industry. a. automobile b. technology c. service d. machine-tools

Assimilation

Full adoption and maintenance of the new culture, and resistance to one's old culture.

true

Homeowners worldwide often agree to display advertising on the walls of their homes

Ethnocentric consumers believe that purchasing imported products hurts the economy, causes loss of jobs, and is unpatriotic, and consumers purchasing foreign products are worthy of contempt

How can ethnocentrism related to country of origin affect consumer perceptions of imported products?

Competitive Marketing Strategies

How companies analyze their competitors and develop value-based strategies for profitable customer relationships

Market Segmentation (Define)

How companies divide large heterogenous markets in segments that can be reached more efficiently

Which of the following distribution structures is also known as a traditional distribution structure?

Import-oriented

Internal Internet-based system.

In the international business arena, which of the following is considered to be one of Walmart's strengths?

true

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

Which of the following makes Walmart's transactions with suppliers highly efficient and lowers its cost of operations?

Internal Internet-based system

The service Profit Chain

Internal Service Qualities ---> Satisified and Productive Service Employees--> Greater Service Value--> Satisfied and Loyal Customer--> Healthy Service Profits and Growth

False

International advertisers use foreign national consumer magazines extensively because they have dependable circulation figures.

Encoding of the message

Janet works for a media agency based in Japan. Janet is helping the IMC manager of Siljure, a French cosmetics company, with the design and language to be used in an upcoming promotional campaign in Japan. The IMC manager knows what to convey but wants to advertise it in a culturally relevant manner. Which step of the IMC process is Janet helping Siljure with?

Kinesics

Movements of parts of the body to facilitate communication, such as gesturing.

Which of the following modes of entry is a company most likely to use if it would "just like to get its feet wet" in the international marketing arena?

Exporting

False

In the context of international advertising, an advertiser must consider local variations when choosing an appropriate medium.

Loyalty

Which of the following characterizes the business philosophy of the Japanese distribution channels?

It includes transportation mode, inventory quantities, and packing.

Which of the following is true of a physical distribution system?

Cross-cultural communication between a foreign client and a local agency can be problematic.

Which of the following is true of advertising agencies for international advertising?

They can function as a principal or a commissioned agent.

Which of the following is true of foreign sales corporations?

C

Which of the following refers to interference in the communication process attributed to cultural differences, competing messages, and degree of consumer interest? A. encoding. B. decoding. C. noise. D. none of the above.

They work on commission and arrange for sales in the foreign country.

Which of the following statements is true regarding agent middlemen?

It calls for a minimum investment from the parent firm to get into international markets.

Which of the following statements is true regarding an export management company (EMC)?

billboards

advertisements in public areas appearing on large posters or electronic panels.

In the international communications process, during ________, the message from the source is converted into effective symbolism for transmission to a receiver.

encoding

A disadvantage when using home-country middlemen as intermediaries in the distribution process is the:

limited control over the distribution process

value chain

marketing along with all other functional business areas that create value for the customer

single country marketing strategy

marketing mix: - product - price - place - promotion

specialized markets

markets that contain specialty stores specializing in a particular product category.

event sponsorship

the financial support of cultural or sports-related events; companies use these events to get positive publicity.

encoding

the process whereby the advertiser puts the company's message about the product into words and images that are aimed at the target consumer.

licensee

the purchaser of the license who pays royalties to the licensor for the rights to use the licensor's technology, know- how, and brand name.

How much money on average is it per sales call?

$350

Cultural (CAGE)

(attributes of a society sustained by interactions among people) Greater cultural differences = lower amount of international trade Examples: Language Ethnicity Religion Different values, norms and dispositions

global localization

(same thing as Glocalization)

Personal Selling Extra facts

- 63% of all companies pay combo of commission and base salary (33% of salary is their commission) -personal selling is the most important part of the process -follow-up is the most overlooked step

the product

- a good, service, or idea - consumer or industrial goods - warranty, labelling, aesthetics

gray market goods

- trademarked products that are exported from one country to another where they are sold by a third party - issues: dilution of exclusivity, free riding, damage to channel relationships, undermining segmented pricing schemes, reputation and legal liability

five attributes of true global strategic partnerships

- two or more companies develop a joint long-term strategy - relationship is reciprocal - partners' vision and efforts are global - relationship is organized along horizontal lines - when competing in markets not covered by alliance, participants retain national and ideological identities

Product Invention

-Demanding but potentially rewarding strategy for reaching mass markets in underdeveloped markets -Product quality is essential but must be supported with imaginative, value-creating advertising and marketing communication

The Uppsala Internationalization Model [WHERE]

-Distinguishes 4 stages on international expansion (the establishment chain): --Weak export activity --Permanent exporting activity through representatives --Establishment of sales divisions abroad --Production abroad -Host countries are selected primarily according to their proximity with regard to "psychic distance"

Copyrights

-Gives ownership to "original works of authorship", such as literary works, painting, and video games -in the Us and EU, copyrights registered for the life of the author, plus 70 years -copyrights extend to other countries if they are part of an international copyright treaty, convention or organization

False Wants and Too much Materialism

-accused the marketing system urges too much interest in material possessions Response: - people do have strong defenses and against advertising. Marketers are most powerful when they appeal to exhisiting wants rather than creating new ones

The Internationalization Model (Transactional Costs) [HOW]

-arises through the cost-efficient coordination of transactions of the MNC across borders -If transaction costs are estimated to be low, then arms-length arrangements (contractual agreements; licencing, franchising, joint ventures) are more preferable (trade-off between risks and returns) -High transaction costs=FDI

PRS: Political factors

-bad neighbors -authoritarianism -staleness -generals in power

Balencing Customer and Compeitor Orientations

-companies need to continuously adapt strategies to changes in the competitive environment 1. Competitor-centered company: spends most of its time tracking competitors movies . Advantages= company is a fighter Disadvatages=bases moves on competitors moves not customers 2.customer-centered company: spends most of its time focusing on customer needs -better than competitor centered company 3.market-centered company: spends most of its time focusing on both competitor and customer developing (customer centerered) NO Yes NO Product orientation customer orien Yes competitor orient market orientat (competitor centered)

Deceptive Practices

-complain that companies use deceptive practices that lead customers to believe they will get more value than they actually do 1. Deceptive Pricing:false advertising "factory" or "wholesale" prices 2. Deceptive Promotion: misrepresenting the products features or performance 3. Deceptive Packaging: exaggerating package contents through design, labeling, or describing misleading size Response: 1. Support legislation to protect consumers from deceptive practices ex: Wheeler-Lee CAt: gave Federal Trade commission power to regulate unfair or deceptive acts or practices

examples of ownership risks

-confiscation -expropriation -nationalization -repeal or abolition of a law, right, or agreement regarding proprietary rights (ownership rights)

4 responses to institutional voids

-exploit what your good at/ already have in your favor (global brand) -acquire new capabilities to neutralize institutional voids -change market context -emphasize opportunities elsewhere

types of market entry strategies

-exporting -contractual partnerships -joint venture -foreign direct investment

Selling and the Internet

-fastest growing sales tool is the internet -68% of people are investing more in Social media -Internet can help with training, sales meetings, live sales presentations, and servicing accounts -drawbacks: expensive, intimidate low-tech salespeople or clients, some things you simply can't present or teach via internet

protecting intellectual property

-international convention for the protection of industrial property (honours by 100 countries) - patent cooperation treaty - European patent convention

Steps in Developing Effective Marketing Communication-collecting feedback

-involves the communicator understanding the effect on the target audience by measuring behavior resulting from the behavior

Different Types of Institutional Voids

-legal systems -social and political systems -product market systems -financial systems

Direct Marketing

-no intermediaries -fastest growing form of marketing

Kiosk Marketing and other Digital Direct marketing technologies

-placing these in stores, airports, hotels, colleges, etc -ex: Kodak, Redbox -Zoomshop Kiosk: small, free standing kiosk for retailers like Apple, Sephora, the Body Shop, etc and consumers can purchase these items right at the kiosk Other technologies include: mobile phone marketing, podcasts, vodcasts, interactive TV

Characteristics of Global Companies

-playing big in major markets -standardization of core products (manufacturing efficiencies) -concentrating the value chain in a few key countries (mainly the upper value chain activities) [manufacturing efficiencies] -adopting a uniform marketing positioning and marketing mix (global segments of customers) [marketing efficiencies]

examples of operational risks

-price controls -export commitments -taxes -local sourcing requirements

Formulating and Implementing Responses to Political Risk

-relative bargaining power analysis -integrative, protective, and defensive techniques -proactive political strategies

Michael Treacy and Fred Wiersema

-suggest that company can gain leadership positions be delivering superior value to their customers in their strategies or value disciplines 1. operational excellence: refers to a company providing value by leading its industry in price and convenience by reducing costs and creating a lean and efficient value delivery system 2. customer intimacy: company providing superior value by segmenting marketing and tailoring products or services to match the needs of targeted customers 3. product leadership: offering continuous stream of leading-edge products or services, product leaders open to new ideas and solutions and bring them quickly to the market

Creating the Advertising Message- Consumer Generated Messages

-taking advantage of today's interactive technologies, many companies now tapping consumers for message ideas or actual ads 1. Youtube Videos 2. Brand Website Contests Positives: a. low expense b. New creative ideas c. Fresh perspective on brand d. Boost consumer involvement

Intellectual Property Issues

-territoriality -prior use vs. registration -copyright

Invasion of Privacy

-the concern is that marketers may know too much about consumers and use this info ration to take unfair advantages a. sale of databases b. microtargeting

PRS: Societal factors

-urbanization -islamic fundamentalism -corruption -youth population

The Personal Selling Process

1. Prospecting and qualifying 2. Pre-aproach 3. Aproach 4. Presentation 5. Demonstration 6. Handling objections 7. closing 8. follow-up

Cultural Elective

A business custom to which adaptation is helpful but not necessary

infrequent foreign marketing

A company with temporary surpluses caused by variations in production levels or demand may send their products for marketing overseas

Which of the following is an example of the primary attribute of a product?

A. The ability of a camera to take a picture.

...

According to your text, how much does Samsung spend per year on "cultural training" for its employees that go abroad?

True

Agent middlemen work on commission and do not take title to the merchandise.

Which of the following are considered to be major communications media in most countries due to their inherent entertainment value?

B. Radio and television

Which of the following arrangements is undertaken when a firm wants to keep its seasonal distribution channels functioning throughout the year?

Complementary marketing

false

Culture is essential in the marketing of industrial products.

Of all the elements of the marketing mix, decisions involving _____ are those most often affected by cultural differences among country markets.

D. Advertising

In the context of the different types of middlemen, which of the following is an example of a manufacturer's retail store? A. Toys "R" Us B. Walmart C. Costco D. Benetton E. IKEA

D. Benetton

With respect to advertising, _____ is especially important when a budget is small or where there are severe production limitations.

D. Creativity

In the context of the communications process in advertising, problems of literacy, media availability, and types of media create challenges in the communications process at the _____ step.

D. Encoding

All of the following are specific objectives of sales promotion EXCEPT: A. immediate purchase. B. consumer introduction to the store. C. gaining retail point-of-purchase displays. D. building brand loyalty. E. encouraging stores to stock the product.

D. building brand loyalty.

b

DVD players are most likely in which stage of the international product life cycle? a. growth stage b. maturity stage c. decline stage d. product introduction

Define Advertising

Define: any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor

Geographical Segmenetation

Dividing the market into different geographical units, like countries, regions, states, and cities

Usage Rate

Dividing the market into light, medium, and heavy users of the product

Social media such as blogs and social networking permits consumers to:

E. become authorized virtual brand agents for the product manufacturers.

The emergence of pan-European communications media will most likely cause companies to:

E. choose more standardized promotional efforts.

Which of the following is the last step in an international advertising campaign?

Evaluating the campaign relative to the goals specified

Which of the following is a type of domestic middleman?

Export management companies

In the context of international advertising, an advertiser should ideally exclude availability, cost, and coverage of media.

FALSE In international advertising, an advertiser must consider the availability, cost, coverage, and appropriateness of the media. Local variations and lack of market data require added attention.

For most companies, trade shows and direct selling are the major components in the marketing communications mix.

False

Ministry of International Trade and Industry

In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores are first judged by the _____.

private cars that are painted with advertisements.

In Spain, a new medium for advertising called Publicoche includes:

political rallying

Integrated marketing communications are composed of all of the following EXCEPT:

lag: consumers learn from the experiences of the adopters in the lead countries.

Is a new product's diffusion rate generally faster in lead countries or lag countries? Why?

Vertical vs. Horizontal conflicts

Marketing channel: consists of firms that have partnered for their common good with each member playing a specialized role Channel Conflict: refers to disagree over goals, roles, and rewards by channel members a. Horizontal conflict: occurs among firms at the same level of the channel ex: ford dealers in chicago might complain that other dealers in the city are stealing sales from them by pricing too low b. Vertical Conflict: conflict between different levels of the same channel ex: KFC and its franchises came into conflict over the company's decision to emphasize grilled chicken

False

Merchant middlemen tend to be more controllable than agent middlemen because they take title to manufacturers' goods.

developing messages

Of the seven steps involved in international advertising, _____ almost always represents the most daunting task for international marketing managers.

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

Price escalation

Distribution Channels -Whole Channel View

Seller's headquarters organization: supervises the channel and is also a part of the channel Channels between nations: move the product to the borders of the foreign nations Channels with nations: move the products from their foreign point of entry to the final customers

Ideally, a website should be translated into the languages of the target market.

TRUE Ideally, a website should be translated into the languages of the target markets. This translation may not be financially feasible for some companies, but at least the most important pages of the site should be translated.

Which of the following is true of a company that views prices as an active instrument of accomplishing marketing objectives?

The company sets prices to achieve specific objectives.

Protectionism

The use by nations of legal barriers, exchange barriers, and psychological barriers to restrain entry of goods from other countries

Lubrication

The use of funds to expedite actions of public employees and government officials. The payments made to minor officials may or may not be illegal and are usually of inconsequential amounts

Haptics

The use of touch while conversing.

false

Truck transportation handles larger shipments over longer distances.

European monetary union ( also known as Euroland)

What group is the only existing example of "successful voluntary political integration" in the world today?

France

What is the home country of Groupe Danone SA? In what country did Groupe Danone enter into a joint venture with Wahaha? What percentage of the joint venture was owned by Groupe Danone?

A

What percent of Europeans and U.S. consumers make their purchase decisions at the point of sale? A. 50 B. 60 C. 30 D. none of the above

Cash-flow patterns

Which of the following is a critical element associated with using a particular type of middleman?

Export Management Companies

Which of the following is a type of domestic middleman?

new item in an existing product line

a new brand that the company offers to the market in an existing product line

new product to existing company

a new product that the company offers to the market. The product competes with similar competitor offerings

manufacturing alliance

a nonequity relationship between 2 firms in which one firm handles the others manufacturing or some aspect of the manufacturing process

marketing alliance

a nonequity relationship between 2 firms in which one firm handles the others marketing or some aspect of the marketing process

Fill in the blanks with the word or phrase from the drop-down list that best completes each passage. a. Many online retailers, such as Amazon, use ______ distribution centers that accept large, consolidated shipments to be divided into smaller ones. b. Logistics managers must control the movement of goods _____ plants, warehouses, and transportation terminals. c. _______ involves combining as many packages as possible into each load moved within a facility. d. ______ is the process of combining several unitized loads into a single well-protected load for shipment.

a. break-bulk b. inside c. unitizing d. containerizing

Of all the elements of the marketing mix, decisions involving ________ are those most often affected by cultural differences among country markets.

advertising

As an industry, retail accounts for how much private-sector employment in the United States? a. more than the US government b. more than any other industry c. less than the advertising industry d. less than the direct selling industry

b. more than any other industry

Ethnocentrism

belief related to the self-reference criterion, that are particular culture is superior to another and that strategies used in the home country will work just as well abroad.

In the context of the different types of middlemen, which of the following is an example of a manufacturer's retail store?

benetton

All of the following are specific objectives of sales promotion EXCEPT:

building brand loyalty.

trade shows and exhibitions

business-to-business promotions that usually are held annually in formats where companies purchase exhibit space to display and demonstrate their offerings to the target market.

performing a product business analysis

calculating projected costs such as return on investment and cash flow and determining the fixed and variable costs for the long term

ISO 14000 certification

certification that a company follows guidelines that discourage firms from engaging in hazardous environmental practices, and ensures that corporate polices promoting environmentally sound, efficiency-embracing, innovative technologies and processes will contribute to establishing twenty-first century production and distribution systems that are far less environmentally degrading

In the context of integrated marketing communications, in many markets, the availability of appropriate _____ to customers can determine entry decisions.

communication channels

uncontrollable elements of marketing

competition, politics, laws, consumer behaviours, level of technology, marketer must evaluate and adapt

With respect to advertising, ________ is especially important when a budget is small or where there are severe production limitations.

creativity

As a restaurant marketer, you are responsible for setting prices on each menu item. Your new appetizer is a fruit-and-nut salad, with a total ingredient cost of $5. The industry's standard markup is 25 percent. What should you charge for this appetizer? a. $6.50 b. $5.25 c. $6.00 d. $6.25 e. $5.75

d. $6.25

In 2014, the Golden Gate Bridge toll fee rose from $6 to $7. Beginning in 2015, the toll fee will go up by a quarter for each of the next four years. Administrators explained that fees were not keeping up with inflation because "toll revenues have remained flat." What situation are administrators counting on? Choose the correct answer. a. Crossing the bridge will remain an elastic demand. b. Crossing the bridge will change to an elastic demand. c. Crossing the bridge will change to an inelastic demand. d. Crossing the bridge will remain an inelastic demand.

d. Crossing the bridge will remain an inelastic demand.

In the international communications process, ________ is defined as the interpretation by the receiver of the symbolism transmitted from an information source.

decoding

Protective and Defensive Techniques for Political Risk

discouraged the host government from interfering in operations; -Doing as little local manufacturing as possible and conducting all research and development outside the country -Limiting the responsibility of local personnel and hiring only those who are vital to the operation -Raising capital from local banks and the host government as well as outside sources -Diversifying production of the product among a number of countries

Home-country middlemen are also known as ________ middlemen.

domestic

In the context of the communications process in advertising, problems of literacy, media availability, and types of media create challenges in the communications process at the ________ step.

encoding

false

global branding creates different images for the product in the different regions where the product is sold.

Monochronic

individuals who usually do one thing at a time in sequence. These individuals tend to be prompt tend to adhere strictly to agendas.

feedback

information regarding the effectiveness of a company's message.

home- country intermediaries

intermediaries in the home country.

utility patent

inventions -ex: IPod, chemical fertilizer -protection lasts for 20 years from the date of filing regular patent application

aggressive export pricing

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

In Spain, a new medium for advertising called Publicoche includes:

private cars that are painted with advertisements.

cross-border shopping

purchasing products from a neighboring country where the consumers may be charged lower duties.

In the communications process in advertising, during the ________ stage, a consumer takes certain actions to respond to a decoded message.

receiver

UNCERTAINTY AVOIDANCE

refers to the extent to which individuals feel threatened by uncertainty, risk, and ambiguous situations

economic dimension

rich-poor differences, natural resources, financial resources, human resources

In-store demonstrations, samples, coupons, contests, and sweepstakes are examples of ________ devices.

sales promotions

In the context of distribution patterns, the rate of change in retailing around the world appears to be directly related to the ________.

speed of economic development

E-commerce is more developed in ________ than the rest of the world, partly because of the lower cost of access to the Internet than found elsewhere.

the United States

ethnocentrism

the belief that ones culture is superior to another and that strategies used in ones home country will work just as well internationally

product mix

the complete assortment of products that a company offers to its target international consumers

country of manufacture

the country in which a particular product is manufactured

country of origin

the country with which a particular product or service is associated

MASCULINITY

the degree to which a national culture is characterized by assertiveness rather than nurturing

INDIVIDUALISM

the degree to which people in a country prefer to act as individuals, in their self-interest, rather than as members of a group

receiver

the target market that receives the advertising message from a sender

society risk factor

urbanisation, corruption, ethnic tension, youth population

regional standardization

use of a uniform marketing strategy within a particular region

multilevel marketing/ network marketing

using acquaintance networks through an alternative distribution structure for the purpose of distribution.

network marketing

using acquaintance networks through an alternative distribution structure for the purpose of distribution; also called multilevel marketing.

piggybacking

using the distribution system of exporter with established systems of selling abroad who agree to handle the export function of a noncompeting (but not necessarily unrelated company on a contractual basis; also called mother henning and cooperative exporting.

configuration

where and how activities will be located (design, manufacturing)

80/20 rule or law of disproportionality (Pareto's law)

- 80% of a company's revenue are accounted for by 20% of the customers

the triad

- US, Western Europe, and Japan - represents 75% of the worlds income - extended triad includes all of North America and most of Eastern Europe - global economies should be equally strong in each part

sponsorship

- 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

incipient market

- a market that will exist when certain economic, demographic, political, or socio-cultural trends continue - example: autos in China

conciliation

- a nonbinding agreement to resolve disputes by asking a third party to mediate differences

regiocentric orientation

- a region is the relevant geographic unit - some companies serve markets throughout the world but on a regional basis - example being general motors having four regions

buyer orientation

- amount of export expended, level of risk and involvement - framework: convenience, preference, shopping, specialty

global retailing strategies: franchise

- appropriate strategy when barriers to entry are low yet the market is culturally distant in terms of consumer behaviour or retailing structures

branding country image questions

- are we competitive? - are we dealing internationally? - are we educated for the task? - do we have the global savvy?

unconventional wisdom

- assumes emergence of segments that transcend national boundaries - recognizes within country differences - emphasized micro level cultural differences

conventional wisdom

- assumes heterogeneity between countries - assumes homogeneity within a country - focuses on macro level of cultural differences - relies on clustering of national markets

form utility

- availability of a product processed, prepared, in proper condition and ready to use

information utility

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

threat of substitute products

- availability of substitute products places limits on the prices market leaders can charge - high prices induce buyers to switch to the substitute

cultural exclusives

- behaviour patterns reserved exclusively for the loavs and from which the foreigner is barred - issue usually focuses on politics or religion

polychronic time and people

- being involved with many things at once - allows interruptions - considers time value - committed to people - easily alters plans - emphasizes promptness bases on relationships - long-term business relationships

bargaining power of buyers

- buyers are manufactures and retailers, not just consumer - buyers seek to pay the lowest possible price - buyers have leverage over suppliers when: - they purchase in large quantities - buyer forces, and the supplier accepts backward integration

state command

- centrally planned socialism

marketing opportunities

- characterized by a shortage of goods and services - look beyond GDP per capita - find a solution to the fix the problem - consider the first move advantage when entering a new market - set realistic deadlines

market penetration (non financial objective)

- charging a low price in order to penetrate market quickly - appropriate to saturate market prior to imitation by competitors

market skimming (financial objective)

- charging a premium price at introduction stage of product life cycle - luxury goods marketers use price to differentiate products

website design

- choosing domain names - cybersquatting - arrangement payment - credit card usage rate, fraud, postal money order or bank cheque - localizing sites will reflect local culture, language, aesthetics - addressing privacy issues - EU laws more stringent - setting up distribution - local sales tax issues

bases for legal systems

- common law: tradition, best practices, and legal precedents where reasons decided by a judge become common law - civil/code law: all inclusive system based on rules that have been codified, that is, written into text by designated jurists - Islamic law: encompasses religious duties and obligations as well as the secular aspect of law regulating human acts (basis of the Koran) *** laws governing intellectual property: - by user under common law - by registration under code law

corporate taxation

- companies attempt to limit tax liability by shifting location of income/profits (Ireland example = low tax rate)

comfortable belongers

- conservative - most comfortable with the familiar - content with the comfort of home, family, friends, community, etc

successful idealists

- consists of persons who have achieved professional and material success while maintaining commitment to abstract or socially responsible ideals

quality and price

- continuum from high price/quality and high price to good value

franchising

- contract between a parent company-franchisor and a franchisee that allows the franchisee to operate a business developed by the franchisor in return for a free and adherence to franchise-wide policies - example in class where the Quebec dog food isn't worth anything in Winnipeg so franchising isn't the best idea

narrow market strategies

- cost focus: low price - focused differentiation: premium price

broad market strategies

- cost leadership: low price - product differentiation: premium price

how to reduce cultural myopia

- define the problem or goal in terms of the home country's cultural traits - make no value judgment when doing so - isolate the self-reference criterion (SRC) influence and examine it - redfine the problem without the SRC

full cost pricing

- each unit must bear its full share of the total fixed and variable cost

value

- enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct

flexible cost plus pricing

- ensures that prices are competitive in the contest of the particular market environment

geocentric orientation

- entire world is a potential market - strives for integrated global strategies - known as global/transnational company - retains an association with the headquarters country - leads to combination of extension and adaption elements

joint ventures

- entry strategy for a single target country in which the partners share ownership of a newly-created business entity - builds upon each partners strengths (no point in doing it if you both have similar abilities)

leveraging

- experience transfers - scale economies - resource utilization - global strategy - global brand equity

litigation

- final step if all else fails to settle a dispute

benefit segmentation

- focuses on the value equation: value=benefits/price - based on understanding the problem a product solves, the benefit it offers, and/or the issue it addresses

key export participants

- foreign purchasing agents - export brokers - export merchants - export management companies - cooperative exporter - manufacturers export representatives

the world trade organization

- forum for trade related negotiations among 153 members - based in Geneva - dispute mediator through trade - can impose sanctions - not mandatory to join

value network

- found in every industry - defined as the cost structure that dictates the margins needed to achieve profitability - boundaries are defined by the unique rank ordering of the importance of various product attributes - each network has its own metrics of value

economic freedom

- free - mostly free - mostly un-free - repressed

GATT

- general agreement on tariffs and trade - handled trade disputes - replaced by the world trade organization in 1995

door to door selling

- going door to door to market products

expropriation

- governmental action to dispossess a foreign company or investor - compensation should be provided in prompt, effective, and an adequate manner - the issue being, who defines the asset value?

ethnocentric orientation

- home country is viewed as superior to others - sees only similarities in other countries (not the same exactly) - assumes products and practices that work at home will work elsewhere (not true) - leads to standardized/extension approach

disaffected survivors

- lack power and affluence - have little hope for upward mobility - tend to be either resentful or resigned - concentrated in high-crime urban inner city areas - attitudes tend to affect the rest of the society (think Detroit?)

creeping expropriation, or domestication

- limits economic activities of a foreign firm - may include: - limits on profits, dividends, or royalties - technical assistance fees - increased local content laws - price controls - quotas for hiring local nationals - discriminatory tariff and nontariff barriers - discriminatory laws on patents and trademarks

newly industrializing economies (NIEs)

- lower middle and upper income economies with the highest sustained rates of economic growth - greater industrial output than developing economies - exports of manufactured and refined products - Egypt, Indonesia, the Philippines, Mexico, Turkey

global pricing objectives and strategies

- managers should determine the unit sales, market share, the return on investment - they should determine which strategy to use: penetration pricing or market skimming

standardized global marketing

- mass marketing on a global scale - standardized marketing mix - minimal product adaptation - intensive distribution - lower production/marketing costs

low context culture

- messages are explicit and specific - words carry all information - reliance on legal paperwork - focus on non-personal documentation of credibility - example: Switzerland, the US, Germany

concentrated global marketing

- niche marketing - single segment of global market - look for global depth rather than national breadth - example: Chanel, Estee Lauder

licensing

- patent - trade secret - brand name - production formulations

monochronic time and people

- paying attention to and doing only one thing at a time - concentrate on one job - never alters plans - emphasizes promptness based on schedules - short term business relationships

extension or ethnocentric

- per unit price of an item is the same no matter where in the world the buyer is located - fails to respond to each national market

country of origin as a brand element

- perceptions about and attitudes toward particular counters often extend to products and brands known to originate in those countries

adaptation or polycentric

- permits affiliate managers or independent distributors to establish price as they feel is most desirable in their circumstances

peer to peer marketing

- person to person marketing, word of mouth in a sense - the internet and related media dramatically alter distribution

global consumer cultures

- persons who share meaningful sets of consumption related symbols - pub culture, coffee culture, fast food culture, credit card culture

customer relationship management

- philosophy that values two-way communication between company and customer - every point of contact with a consumer is an opportunity to collect data - can make employees more productive and enhance corporate profitability

positioning

- placing a brand in consumers minds that is superior against competitors in terms of attributes and benefits - quality and price, use or user, competition

the globalization of products

- products such as beer and coffee - Starbucks in the coffee culture, Irish pubs in the US, German style beer halls in Japan

disruptive technologies

- proven innovation that redefines performance - often are new entrants to an industry - they enable something to be done that was previously deemed impossible - they enable new markets to emerge

rivalry among competitors

- refers to all actions taken by firms in the industry to improve their positions and gain advantage over each other: - price competition - advertising battles - product positioning - differentiation

creating competitive advantage: changing the rules of engagement

- refuse to play the rules set by industry leaders - example: xerox and canon

selling model

- relationship strategy: a long term plan for establishing and maintaining high quality relationships - product strategy: a plan that selects and positions products to satisfy customer needs - customer strategy: a plan that ensures maximum responsive to customer needs - presentation strategy: to design a presentation plan that meets the objectives of each sales call

characteristics of innovations (think consumer behaviour)

- relative advantage - compatibility - complexity - divisibility - communicability

joint venture disadvantages

- requires more investment than a licensing agreement - must share rewards as well as risks - requires strong coordination - potential for conflict among partners - partner may become a competitor

dumping

- sale of an imported product at a price lower than what was charged normally in a domestic market or country of origin - to prove this, price discrimination and injury must be shown

environmental factors of global retailing

- saturation in the home country market - recession or other economic factors - strict regulation on store development - high operating costs

direct sensory perception

- sensory experience: using the senses to find out firsthand what is going on in a particular country

innovators dilemma

- staying committed to a current, profitable, technology - still being responsive to the needs of established customers - but to avoid...failing to provide adequate levels of investment to new and possibly risky technologies

task of global marketers

- study and understand the cultures of countries in which they will be doing business - understand that their own personal beliefs in reference to their own cultural values may influence their perception of the new market - incorporate this understanding into the marketing process

export marketing

- tailors the marketing mix to international consumers - must have an understanding of the target market environment - the use of market research and identification of the market potential - decisions regarding product design, packaging, pricing, distribution channels, advertising, promoting, etc.

assessing market potential

- tendency to overstate the size and short-term attractiveness of individual country markets - the company does not want to 'miss out' on a strategic opportunity - management's network of contacts will emerge as a primary criterion for targeting

brand equity

- the added value to the product as a result of investments in the marketing of the brand, which results in: - greater loyalty - less vulnerability to market actions - larger margins - more inelastic/elastic response to price change

political risk

- the change in political environment or government policy that would adversely affect a company's ability to operate effectively and profitably - if political risk is high in a country, they will have trouble finding foreign investment from other countries

ethnic segmentation

- the population of many countries includes includes ethnic groups of significant size

bargain power of suppliers

- when suppliers have leverage, they can raise prices high enough to affect the profitability of their customers - leverage accrues when: - suppliers are large and few in number - suppliers products are critical inputs, or are highly differentiated, or carry switching costs - few substitutes exist

nationalization

- where the government takes control of some or all of the enterprises in an entire industry - acceptable if: satisfied public purpose, includes compensation

General Agreements on Tariffs and Trade (GATT)

-61 year old treaty -designed to promote world trade -reduces tariffs and other inter nation trade barriers -World Trade Organization (WTO) replaced GATT now oversees GATT rules, mediates disputes, and imposes trade sanctions

Prior Use vs. Registration

-In the United States, a common-law country, ownership of intellectual property rights is established by prior use -In many code-law countries, ownership is established by registration rather than by prior use

Company capabilities and characteristics [internal]

-Market knowledge -Marketing involvement -Management commitment

What is PRIZM?

-PRIZM: leading segmentation systems -classifies every American household based on a host of demographic factors (ex: age, education,, etc). Organizes them into 14 different social groups and like-minded groups. Helps companies identify and better understand key customer segments.

major problems w/ secondary data

-availability -comparability (lack of current data/ historical data) -reliability (who, what, how, consistenency) -validation

Administrative and Political Distance

-colonial ties -shared regional trading bloc -political hostility -closed economy -membership in international organizations -corruption

High Pressure Selling

-complaint that salespeople use high pressure selling that persuade people to buy goods they had no intention of buying Response: most salespeople are trained to build good relationships not to pressure buyers.

design pattent

-not functional designs -ex: unique shape of electric guitar -protection lasts for 14 years

examples transfer risks

-tariffs on exports & imports -restrictions on imports -capital repatriation (exchange of $ in/out)

Building Strong Brands

1. brand positioning 2. Brand name selection 3. Brand sponsorship 4. Brand development

Integrated Marketing Communications - The New Marketing Communications Model

1. consumers are better informed: digital age, internet, connect more easily 2. more communication 3. Less mass marketing: developing focused marketing programs designed to build closer relationships with customers 4. Changing communications technology: changing the way companies and customers communicate with each other - companies are doing less broadcasting and more narrowcasting (narrow, targeted, more effective) -Although TV is more dominant form of advertising ad spending on major TV networks has stagnated and ad spending on Internet/other digital media has surged

the large amount of commission charged by the home-country middlemen.

A major trade-off when using home-country middlemen is:

False

A majority of the population of less developed countries can be reached readily through the traditional mass medium of advertising.

Planned Change

A marketing strategy in which a company deliberately sets out to change those aspects of a foreign culture resistant to predetermined marketing goals

Cultural Congruence

A marketing strategy in which products are marketed in a way similar to the marketing of products already in the market in a manner as congruent as possible with existing cultural norms

_____ in countries can distort media choice by changing the cost ratios of various media. A. Advertising taxation B. Language C. Power distance D. Cultural traits E. Dialect

A. Advertising taxation

Which of the following is true of advertising agencies for international advertising?

A. Cross-cultural communication between a foreign client and a local agency can be problematic.

Of the seven steps involved in international advertising, _____ almost always represents the most daunting task for international marketing managers.

A. Developing messages

building brand loyalty

All of the following are specific objectives of sales promotion EXCEPT:

True

An export management company functions as a low-cost, independent marketing department with direct responsibility to the parent firm.

With respect to advertising, _____ is especially important when a budget is small or where there are severe production limitations. A. class distinction B. politicization C. inventory analysis D. creativity E. following a formula

D. creativity

Behavior Segmentation

Define: Divides buyers into segments based on their knowledge, attitudes, uses, and responses concerning a product a. Occasion Segmentation: Dividing the market into segments according to when buyers get the idea to buy and when they actually make the purchase ex:Cambells advertises more heavily in the winter b. User Status: dividing the market into non-users, ex-users, potential users, first-time users, and regular users of a product ex:Pampers are provided and used at most hospitals c. Benefit Segmentation: Dividing the market into different segmentation based on the different benefits customers seek from a product ex: Venus razors designed a razor for each important segment for women shavers

Sales Force Structure

Define: Each salesperson sells along product lines. Ex: GE employs different sales forces for aviation, energy, transportation,and water processing products, etc. -Improves product knowledge -can lead to territorial conflicts

a different advertising appeal

Due to differences in culture in different markets, standardized products that are marketed globally will require:

False

Due to their inherent entertainment value, satellite TV and the Internet have become major communications media in almost all nations.

Integrated marketing communications are composed of all of the following EXCEPT: A. advertising. B. sales promotions. C. trade shows. D. public relations. E. political rallying.

E. political rallying. Integrated marketing communications (IMC) are composed of advertising, sales promotions, trade shows, personal selling, direct selling, and public relations.

A proper encoding system allows a company to correct errors before substantial damage occurs.

FALSE A proper feedback system allows a company to correct errors before substantial damage occurs.

A majority of the population of less developed countries can be reached readily through the traditional mass medium of advertising.

False

Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process of communication are called feedback.

False

When a marketing executive advertises his product in a newspaper, the newspaper acts as a feedback channel.

False

When a message from the source is converted into effective symbolism for transmission to a receiver, the message is said to have been decoded.

False

GATT

General Agreement on Tariffs and Trade; a trade agreement signed by the US and 22 other countries shortly after WWII. The original agreement provided a process to reduce tariffs and created an agency to patrol world trade; the treaty and subsequent meetings have produced agreements significantly reducing tariffs

false

Internet purchasing is experience driven in developed countries.

Which of the following is true of the distribution process?

It includes buying and selling negotiations.

Administrative refers to (CAGE)

Laws, policies, gov. run organization, international organizations, treaties the other country either supported or has created

Silent Languages

Term used by Edward T. Hall for the non-spoken and symbolic meanings of time, space, things, friendships, and agreements, and how they vary across cultures; from Hall's seminal article "the Silent language of business"

Islamic Law

The Shari'ah; the legal system based on interpretation of the Koran. Islamic Law encompasses religious duties and obligations as well as the secular aspect of law regulating human acts. Among its provisions is a prohibition of the payment of interest.

The Sherman Antitrust Act

The Webb-Pomerene Act of 1918 made it possible for American business firms to join forces in export activities without being subject to which of the following acts?

Final Consumer

The distribution channel process includes all activities, beginning with the manufacturer and ending with the _____.

False

The distribution process includes promotion of goods and services by sellers and resellers.

choose more standardized promotional efforts

The emergence of pan-European communications media will most likely cause companies to:

True

The feedback step of the international communications process is important as a check on the effectiveness of the other steps.

Subornation

The giving of large sums of money, frequently not fully accounted for designed to entice an official to commit an illegal act on behalf of the one offering the money

Taiping Rebellion

The most costly civil war in human history in China during 1851-1864. Some estimates have the death toll at between 20-40 million

Cultural Borrowing

The phenomenon by which societies learn from other cultures' ways and borrow ideas to solve problems or improve conditions

Sovereignty

The powers exercised by a state in relation to other countries, as well as the supreme powers or a state as exercised over its own inahabitants

Prior Use

The principle, observed in the United States and other common law nations, that ownership of intellectual property rights usually goes to who can establish first use

Registration

The principle, observed in the United States and other common law nations, that ownership of intellectual property rights usually goes to who can establish first use

Litigation

The process in which a dispute between parties is contested in a formal judicial setting; commonly instigated by a lawsuit asserting one party's version of the facts

Proxemics

The relationship between physical space and the process of communication.

True

The role of public relations is to create good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators.

Marxist-Socialist Tenets

The set of views in which law is subordinate to prevailing economic conditions. Marxist-Socialist tenets influenced the legal systems of Russia and other republics of the former Soviet Union as well as China, forcing these nations to revamp their commercial legal code as they become involved with non-Marxist countries

Cultural Values

The system of beliefs and customs held by a population in a given culture. A book by Geert Hofstede describes a study of 66 nations and divides the cultural values of those nations into four primary dimensions: the Individualized/Collectivism Index, the Power Distance Index, The Uncertainty Avoidance Index, and the Masculinity/femininity Index (which is not considered as useful as the other three)

Greenhouse Gas Emissions

These are gases resulting primarily from the use of fossil fuels that tend to trap heat in the Earth's atmosphere and are causal factors in global climate change. The main problem compounds are carbon dioxide, methane, nitrous oxide, and flourinated gas

Which of the following is the reason why global retailers like IKEA, Costco, Sears Roebuck, and Walmart are becoming major domestic middlemen for international markets?

They maintain their core marketing approaches while localizing the array of products, promotions, and other peripheral aspects of their operations.

True

Trading companies provide the best means for intensive coverage of the market.

In the context of advertising, a marketer's self-reference criterion (SRC) affects the ultimate success of the communication.

True

Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

True

One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different cultures

True

C

What city hosted World Fair Expo 2010? A. San Francisco B. London C. Shanghai D. Munich

China

Which of the following countries has the largest number of retailers?

Due to differences in culture in different markets, standardized products that are marketed globally will most likely require:

a different advertising appeal.

For what main reason is personal selling the single biggest promotion expense in many firms? a. Personal selling depends on direct contact with customers, which is costly as well as time consuming. b. Personal selling is only effective as a follow-up to expensive advertising. c. Advertising has become cheaper than personal selling over time. d. The new technologies of personal selling require big investments in software.

a. Personal selling depends on direct contact with customers, which is costly as well as time consuming.

A retailer is facing difficult times: Sales are down and there has been a decrease in the number of customers visiting the store. The retailer decides to lower the prices on a few items, hoping this strategy will draw more customers who will not only purchase the discounted items but will also linger in the store and buy additional items. Which type of pricing policy is the retailer using? a. Promotional pricing b. Product line pricing c. Psychological pricing d. Price flexibility

a. Promotional pricing

Company X is enjoying a spurt in sales of the stuffed animals it manufactures. To meet demand, the firm is spending more than ever before on cotton stuffing. However, its marketers note that they are spending less for stuffing per toy than in the past. Based on this information, what is the most likely explanation for the difference between overall spending and per-toy spending? a. The factory is operating more efficiently. b. Competition has decreased. c. Competition has increased. d. The factory is operating less efficiently. e. The firm is importing cotton stuffing from abroad

a. The factory is operating more efficiently.

As a member of the marketing team for a manufacturing company, you need to be familiar with methods that are available to your company to facilitate communication about and movement of your products and goods. Your company is facing some logistics and supply chain challenges and you have been asked to help find solutions for them. Choose the statement that does not accurately identify the best management approach to deal with each management challenge. a. The manufacturing company for which you work wants to consolidate the data from among all the firm's business units. RFID is the best approach. b. The business is growing so quickly that your company needs to reduce the human effort and error involved in tracking inventory and assets. Radio Frequency Identification (RFID) is the best approach. c. The manufacturing company for which you work wants to consolidate the data from among all the firm's business units. An Enterprise Resource Planning (ERP) system is the best approach. d. Your company wants to improve and streamline transportation and warehousing functions, but does not yet possess the specialized knowledge and expertise needed to do that. It should consider outsourcing some of these functions to a specialist firm.

a. The manufacturing company for which you work wants to consolidate the data from among all the firm's business units. RFID is the best approach.

You are reviewing the various factors that will affect your company's choice between advertising and personal selling as a primary promotional tool. Fill in the blanks with the terms from the drop-down list that would best complete each sentence. a. Personal selling would be the better choice if the company decides to pursue ________ markets. b. Advertising would be the better choice if the company's products are ___________ standardized and ________ in unit value. c. Personal selling would be the better choice if the company's products are ________ or _________ .

a. business b. highly, low c.customized, complex

Fill in the blanks with the word from the drop-down list that best completes each passage. a. A marketing channel also called a ________is one critical component of a distribution strategy. b. Marketing channels provide the means by which goods and services flow from the ______ to the consumer or business user. c. Most marketing channels involve at least one ____ or middleman, but the simplest marketing channel is a direct channel. d. Reverse channels involve the return of goods to their producers, for example, by ______ or recall

a. distribution channel b. producer c. intermediary d. recycling

As a sales manager, you drive the overall direction of the personal selling effort for your firm. You wear multiple hats as a salesperson yourself and also as an administrator. Fill in the blanks with the word or phrase from the drop-down list that best completes each passage about your basic managerial functions. Each word or phrase may be used more than once. a. You have reviewed quarterly sales figures and are preparing a report on performance. This involves _______ b. You are involved in the decision to make payouts based on the combination of salary and commission. This involves ______ c. As part of your ______ function, you are determining specified sales or profit targets that the firm expects your division salespeople to achieve. d. As part of your ____ function, you are speaking to a group of college graduates about the opportunity for advancement, personal satisfaction, and independence afforded by sales. e. You are part of a managerial meeting to decide the number of retail account representatives who report to first-level sales managers. This involves _____ f. You are assigning sales teams to the company's major accounts, one of the tasks you perform as part of your _______ function. g. u are allowing a new salesperson to shadow you daily for one week, fulfilling your SelectorganizationtrainingsupervisionItem 7 function. h. You are careful to create a positive work environment for your sales team and inspire confidence in them. This involves _______ . i. You are a part of the interview team that follows the application screening process. This involves __________ .

a. evaluation and control b. compensation c. evaluation and control d. recruitment and selection e. supervision f. organization g. training h. motivation i. recruitment and selection

As you try to familiarize yourself with the many different types of retailers, you come across some unfamiliar concepts. Your study partner informs you that these are among the generally accepted bases on which retailers can be categorized. Fill in the blanks with the word or phrase from the drop-down list that would best complete each passage. a. There are _____generally accepted bases for categorizing retailers. b. Chain stores are differentiated from independent stores on the basis of __________ c. Specialty and convenience retailers differ based on ________ d. Supermarkets fit into a unique retail category that combines _____ and ______ merchandise.

a. four b. form of ownership c. shopping effort d. specialty, general

Your uncle is a highly successful Ford dealer. Unlike some other dealers, he trains his salespeople to strongly encourage prospects to test drive his cars. In terms of the AIDA concept, your uncle emphasizes: a. generating interest and desire b. securing attention and interest c. handling objections d. initiating action

a. generating interest and desire

You are employed as a marketing assistant at a major retail firm. You are asked to review how various factors are likely to influence the elasticity of demand for the firm's products. Fill in the blanks with the word from the drop-down list that best completes each sentence. Words may be used more than once. a. The availability of substitutes is likely to _____ elasticity of demand for your products. b. The availability of complements is likely to _____ elasticity of demand for your products. c. The more buyers purchase retail goods online, the _____ the elasticity of demand for your products is likely to be. d. Demand for your line of luxury evening wraps is likely to be ____ elastic than for your line of budget raincoats.

a. increase b. increase c. higher d. more

You are trying to determine the best retail strategy for your family firm, a manufacturer of value-priced furniture. Fill in the blanks with the terms from the drop-down list that would best complete the passage. The best retailer would have pricing _____ that are a good fit for your firm's value image. b. The best retailer would offer a homey-looking interior, soft lights, and comfortable customer seating. These ______ elements would complement the brand. c. The availability of home delivery is important to your customers. Any retailer must offer this element as a part of its ______ strategy.

a. objectives b. atmospheric c. customer service

Fill in the blanks with the word or phrase from the drop-down list that best completes the sentence. a. Warehousing is the location of stock and the number of warehouses the firm maintains, while inventory control is the quantity of stock the firm maintains at each _____ b. using _____is a component of handling materials appropriately in the factory, in the warehouse, and in the transport terminals. c. Activities for moving products within plants, warehouses, and transportation terminals comprise the ______ system

a. site b. protective packaging c. materials handling

Companies have many forms of sales promotion to choose from, depending on their target audience and marketing goals. Fill in the blanks with the word or phrase from the drop-down list that best completes each passage about these forms of sales promotion. Each word or phrase may be used more than once. a. The typical firm spends more on _______ sales promotion than on advertising and other sales promotion combined. b. Local businesses, such as realtors or coffee shops, often give away T-shirts or mugs with their logo at community events. This is known as ________, a type of _______ sales promotion. The focus of sales promotion was originally on ____ incentives but has now shifted to _____ objectives.

a. trade-oriented b. specialty advertising; consumer-oriented c. short-term, long-term

Fill in the blanks with the word or phrase from the drop-down list that best completes each passage. a. _______ trade laws require sellers to maintain ______ prices for ______ merchandise. b. Deceptive business practices, including deceptive pricing schemes, are prevented by the _____

a. unfair, minimum, comparable b. federal trade commission

KFC sells Youtiao, a kind of Chinese doughnut, at its outlets in China. The Youtiao is considered an important part of a Chinese breakfast menu. In marketing terms, KFC is practicing a(n) _____ strategy.

adaptation

expatriates

advantages - superior product knowledge - demonstrates commitment to service standards - train for promotion - greater HQ control disadvantages - higher cost - higher turnover - cost for language and cross-cultural training

third country nationals

advantages - cultural sensitivity - language skills - economical - allows regional sales coverage disadvantages - may face identification problems - may be blocked for promotions - income gaps - needs product/company training - loyalty not assured

________ in countries can distort media choice by changing the cost ratios of various media.

advertising taxation

cooperative export arrangements

agreements that involve the use of distribution system of exporters with established system of selling abroad, who agree to handle the export function of a noncompeting (but not necessarily unrelated) company on a contractual basis; also called mother henning or piggybacking

The vice president of marketing of a large grocery chain has determined to deemphasize the prices of the company's products and to concentrate marketing efforts on other factors such as the products' benefits and features. Which strategy is the vice president most likely to use? a. Market-minus pricing b. Competitive pricing strategy c. Penetration pricing d. Market-plus pricing e. Skimming

b. Competitive pricing strategy

You work for a small tech company that has recently introduced a new mobile application called "Streamline" into the market. The mobile application is aimed at helping individuals keep track of all their social media accounts in one place and streamlining the flow of information from one program to the next. For instance, if you update your Facebook page, your Twitter and Instagram accounts will also update. After identifying the target market and conducting market research, the marketing team decides that its first set of ad campaigns should be Web-based in order to draw appropriate audiences. When Alexa signs into her Facebook page, a banner pops up in the center of her browser advertising Streamline, the new mobile application. After clicking on the ad, Alexa learns that she can control all of her 11 social media accounts from one place. Which of the marketing communications steps is next? a. Channeling b. Feedback c. Encoding d. Decoding

b. Feedback

The seven steps in the personal selling process should be aligned with the AIDA concept, which describes the consumer's buying decision process. Which of the following steps is misaligned with this concept? a. The presentation step generates interest and desire. b. Getting a prospect's attention is the goal of handling objections. c. The closing of a sale brings action. d. The demonstration step generates interest and desire.

b. Getting a prospect's attention is the goal of handling objections.

Integrated marketing communication (IMC) requires a big-picture view of promotional planning; a total strategy that includes all marketing messages. You work for a multinational beverage company headquartered in Singapore. You have been put in charge of developing comprehensive marketing communication packages and want to ensure that you maximize the benefits for your company. To reach this goal, you work with department heads around the world to ensure that marketing and communications objectives support the corporate mission and strategies, and keep all staff informed about new developments. You also work with external partners, including advertising and PR agencies, to achieve a cohesive message for your brand and products. Which of the following statements is most likely to be true about your IMC effort? a. Developing multinational integrated marketing communication is likely to contribute to the duplication of communication efforts. b. IMC challenges the notion that your advertising, personal selling, direct marketing, and other components of the worldwide promotion mix must stand alone. c. Your target market will be identified after the company has established an IMC strategy. d. Sending a unified positive message about your company is often not a priority.

b. IMC challenges the notion that your advertising, personal selling, direct marketing, and other components of the worldwide promotion mix must stand alone.

According to the Ad Age article "PennWell acquires Oil & Gas Pipeline Conference" (March 21, 2013), "The pipeline and transportation sectors of the industry are experiencing phenomenal growth due to the resurgence of exploration and drilling in North America" (retrieved from http://adage.com/article/btob/pennwell-acquires-oil-gas-pipeline-conference/288678/). Pipelines rank third after railroads and motor carriers in ton-miles transported, but most people do not recognize pipelines as a major mode of transportation. Nevertheless, pipelines are the preferred method used for transporting crude oil, diesel fuel, kerosene, and gasoline in the United States. Why are pipelines an advantageous method of transport? a. Pipelines provide jobs for consumers because of the resurgence of exploration and drilling in North America. b. Pipelines offer low maintenance and dependable transportation for a narrow but important range of products. c. Pipelines have more locations than water carriers. d. Pipelines are versatile, carrying more ton-miles than any other mode of transport over more than 2 million miles of pipeline.

b. Pipelines offer low maintenance and dependable transportation for a narrow but important range of products.

Ads based on fear, humor, or sex can be effective, but also face distinctive challenges. All of the following accurately describe these challenges except: a. People may tune out fear-based ads that seem implausible. b. Selective perception may be a problem for humorous ads. c. Humor in an ad may distract consumers' attention from the brand. d. Sex-based ads are tricky when used in culturally diverse markets.

b. Selective perception may be a problem for humorous ads.

You work for an organization that wants to use a celebrity spokesperson to advertise its new smoking cessation programs. The company enlists the support of a local music celebrity who is well known and well liked. The celebrity has previously endorsed a local restaurant, is supporting the campaign of a local politician, and is known to partner with a local music program that works with blind children. This celebrity also is known to support awareness for lung cancer initiatives because his or her brother was a pack-a-day smoker for three decades and died of Stage IV lung cancer. Which of the following might be a drawback of working with this particular celebrity on promoting your organization's cause? a. The celebrity's body of professional work is not impressive. b. There is marketplace confusion surrounding this celebrity. c. The celebrity is not a credible source of information. d. This celebrity spokesperson is expensive and probably behaves badly.

b. There is marketplace confusion surrounding this celebrity.

The Ash brothers operate an online retailer that specializes in herbal teas from remote villages across the globe. A direct-response retailer, the Ash brothers' company allows customers to purchase their teas by phone, mail, or via the company's website, and then they ship the order directly to the client. The Ash brothers serve as an intermediary between product manufacturers and customers. Which of the following is an advantage that the Ash brothers have in running this online direct-response retailer? a. They sell the teas to customers at prices that are marked down. b. They are able to reach a wide base of customers and special niche markets because of the Internet. c. They completely bypass retailers and wholesalers. d. Most of their purchase orders come directly through the company's website. e. They generate a large number of inquiries from customers making purchase decisions.

b. They are able to reach a wide base of customers and special niche markets because of the Internet.

You work in the marketing department of a household cleaning products manufacturer. When the CEO found that online purchase of consumer-packaged goods had reached only 1 percent of the $666 billion in sales in 2013, he or she charged your team with devising a plan to change that picture. Your research has shown that home delivery of cleaning supplies becomes economically feasible only when the total price hits $20 to $30. Which of the following pricing objectives should the team use for its action plan? a. Profitability objectives b. Volume objectives c. Prestige objectives d. Meeting competition objectives

b. Volume objectives

You are the brand manager of a major grocery store chain and have a meeting planned with your boss. You want to convince him or her to allow you to run a coupon campaign to drive sales across the soup brands you manage. Your boss is not enthusiastic about coupon campaigns, but is willing to listen to a formal presentation from you explaining how and why your coupon campaign should be approved. Select the talking point that you will use in your presentation. a. High-value coupons can overcome the poor image of some of your soup brands. b. Your coupons will encourage short-term purchases of larger quantities of soup. c. As a form of trade promotion, your campaign will help build your relationships with soup wholesalers. d. Your coupons will encourage long-term purchases of larger quantities of soup.

b. Your coupons will encourage short-term purchases of larger quantities of soup.

Mr. Cohen wants to open a hair salon and has to decide on the geographic location of the shop. He is targeting girls and young women aged 13 and older who get their hair done frequently. What sets his shop apart from other beauty salons is that all his beauticians have been trained to employ the most modern techniques and were all in the top 5 percent of their classes in their respective cosmetology schools. He wants to locate the salon within a group of similarly distinctive, upscale retailers, service providers, and department stores with high visibility in the same region. Mr. Cohen's location will be in which of the following types of shopping center? a. designed b. planned c. regional d. multiple e. showroom

b. planned

threat of new entrants

barriers of entry - economies of scale: refers to the decline in per unit product costs as the absolute volume of production per period increases - production differentiation: the extent of a product's perceived uniqueness - capital requirements: required investment for manufacturing, R&D, advertising, field sales and service - switching costs: the costs of changing suppliers or products - distribution channels: are there current distribution channels available with capacity? - government policy: are there regulations in place that restrict competitive entry - cost advantages independent of scale economies: is there access to raw materials, large pool of low-cost labour, favourable locations, and government subsidies - competitor response: how will the market react in anticipation of increased competition within a given market

Consumer ethnocentrism

belief that purchasing foreign products is wrong because it hurts the domestic economy, causes loss of jobs, and is unpatriotic.

buying offices

buyers representing different firms located abroad.

You work for a local politician who has allegedly been linked to a local scandal. As the head of the politician's communications team, you are strategizing ways to address this issue, especially since it is an election year, and he or she wants to run for national office. You think that the best approach in addressing this problem is employing media marketing, but you still have to figure out which medium is best. You want to use a medium that is credible, flexible, and reaches wide audiences. You are not particularly concerned about cost because you believe that the expense is worth it. Which of the following media can best help you accomplish your goal? a. Billboards b. Newspaper c. Television d. Magazines e. Radio

c. Television

You work for a young grassroots art organization that does not have a lot of funds to invest in marketing efforts but wants to create a name for the company. As a muralist, you have considerable experience beautifying schoolyards and alleys with your paintings, and suggest to your executives that you use graffiti to spread the company's name in certain neighborhoods. Because your company specializes in art, you think this would be the perfect way to market the company and its long-term social mission to fill abandoned park walls with community art and develop community gardens. Your company agrees with the idea, so you partner with other muralists and paint the company's logo in creative ways on abandoned city walls. At first, your company receives bad publicity for the stunt, but it generates a lot of inquiries about your artwork because potential customers are intrigued by your company's level of creativity and innovation. Which of the following statements is true about the scenario described above? a. Buzz marketing like the type described in the scenario is a cheap way to promote a company, but it is usually ineffective because it can offend some people. b. Guerilla marketing enhanced the credibility of the organization and increased its sales. c. This marketing strategy is usually effective because competitors are less likely to be using the same approach. d. This form of advertising is likely to cost about the same as more traditional advertising.

c. This marketing strategy is usually effective because competitors are less likely to be using the same approach.

ISO 9000 certification

certification that specifies that the organization must meet customer and regulatory requirements and follow its policies and procedures while advancing quality through continous improvement

us/ Canada Intellectual property

common-law (USA, Canada) "first to invent" for patents patent application secret

international marketing

companies are fully committed to and involved in international marketing, seek markets all over the world

export management companies

companies specializing in the export function for client companies in a particular industry.

ownership advantage

competitive advantages over other companies

food retailers

conventional supermarkets, superstores, warehouse clubs (wholesale clubs), convenience stores.

You and a coworker, Liam, are discussing the merits of different media options for placement of your firm's advertising. The options include TV, radio, direct mail, magazines, and outdoor. "I'm concerned about people's limited attention spans," says Liam. "However, its low cost is a big advantage because of our tight budget." "The short lead time for placing ads will be especially helpful, since we often change prices on short notice," you comment. "And it's great for targeting our local market." Which of the following media options are you and Liam discussing? a. TV b. direct mail c. magazines d. radio e. outdoor

d. radio

You want the salespeople on your staff to perform at their best, thus you want to make sure they are properly supervised. In determining span of control—the optimal ratio of sales representatives to sales managers—you will consider all of the following factors except: a. complexity of work b. extent of training c. each manager's ability d. size of bonuses

d. size of bonuses

________ in advertising is a thorny issue, because most member countries of the European Commission have different interpretations of what constitutes a misleading advertisement.

deception

global industries

determined by: - ratio of cross border investment to total capital investment - ratio of cross border trade to worldwide production - proportion of industry revenue generated by all companies that compete in key world regions

________ is often the approach of choice in markets with insufficient or underdeveloped distribution systems.

direct marketing

established channels

distribution channels that already exist in a particular market

antidumping duties

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

screening new product ideas

eliminating product ideas that do not fit with the target consumers and the overall mission of the organization

trade secret

formulas, methods, devices, or compilations of information which is confidential & gives a business an advantage - coca cola formula - new invention for patent which hasn't been registered -protection lasts as long as information remains confidential and functions as a trade secret

true

hard currency that is accepted for payment by any international seller

One of the reasons that channels of distribution often pose longevity problems is that most middlemen _____.

have little loyalty to their vendors

In the international communications process, an international marketing executive with a product message to communicate specifically acts as a(n) ________.

information source

Meta Garbon, a manufacturer of sports bicycles, in a bid to tap the enormous market for bicycles in China promote their cycles as premium sporting and leisure bicycles. They use various cycling legends and sports celebrities as brand ambassadors and use television, radio, and newspapers as media. Bicycles in China are used mainly by the working class for commutation, and the main users of bicycles did not relate to Meta Garbon's products, and the promotional campaign was a failure. During which of the following steps of the international communications process did Meta Garbon most likely go wrong?

information source selection

dynamically continuous innovation

innovation that does not alter significantly consumer behavior but still entails a change in the consumption pattern

Which of the following is especially vulnerable as EU member states decide which area of regulation should apply to these services?

internet services

launching the product internationally

introducing a new product to the international market as the last step in the new product development process

According to Everett Rogers, the goals of the diffusion researcher and the marketer are to shorten the time lag between:

introduction of an idea or product and its widespread adoption.

infomercials

long television advertisements (one-half to one full hour in length) that are positioned as programming.

In the international communications process, the sales force of a company that conveys the encoded content to the intended receiver acts as a(n) ________.

message channel

Pirate

movies, music, books, or other copyrighted works that have been reproduced without permission from the company, composer, or author that owns the copyright. Pirate products cost legitimate businesses billions in lost profit and drive up prices

Which of the following elements of the international communications process comprises of external influences such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication?

noise

Administrative examples (CAGE)

o Colonial ties o Shared regional trading bloc o Political hostility o Closed economy o Membership in international organizations o Corruption

Geographic (CAGE)

o Physical remoteness o Lack of a common border o Lack of sea or river access o Size of country o Time zone differences o Weak transportation or communication links o Differences in climates o Number of paved roads o Urban/rural dichotomy o Logistics Performance Index

Martin has opened a new, trendy restaurant in the downtown section of a large city. There are, however, many competing restaurants in the neighborhood, and Martin knows that many of them have large customer followings. In order to obtain a relatively fast rate of market acceptance, Martin decides to offer two-for-one coupons to all patrons during the restaurant's opening weeks. After that limited time, Martin plans to withdraw the two-for-one offers and begin charging regular market prices. Fill in the blank with the word from the drop-down list that best completes the sentence. Martin is using a ______ pricing strategy.

penetration

penetration pricing

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

skimming strategy

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

sales promotion

sponsored communications to the target consumer or trade segment that stimulate purchases or improve relationships with intermediaries.

warehouse clubs/ wholesale clubs

stores that require members to pay an annual fee operating in low-overhead, warehouse type facilities, offering limited lines of brand name and dealer-brand groceries, apparel, appliances, and other goods at a substantial discount.

mandatory adaptation

the adaptation of products to local requirements so that the products can legally and physically function in the specific country environment

clearing currency

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

modification

the alteration of an existing company product

the presentation plan

the approach - initial contact with the customer - must completely understand the role of the participant - do your research the presentation - the prospects needs have been assess and are then matched to the coimpanys products - the style and message of the presentation must be tailored to the audience (cultural consideration) the demonstration - to prove that the product can meet the customers needs the negotiation - ensures that the customer and the salesperson come away from the presentation winners (emphasis on the customer winning) the close - ask for the sale; cultural research tells you when to do this servicing the sale - provide what was offered and agreed to - establish a customer-service program

medium/ media

the channels(s) of communication that a company uses to send to the target consumer a message about its product or service.

international communication process

the communication process that takes place between the product sponsor and the international target market.

New Product Development Define

the development of original products, product improvements, product modifications, and new brands through the firms own product development

High-context -East Asia -Middle East -North Africa

the entire context of the message- the message source, his or her standing in society or in the negotiation group, level of expertise, tone of voice, and body language is meaningful.

media availability

the extent to which media are available to communicate with target consumers.

product consistency

the extents to which a companies different product lines are related, use the same distribution channels, and have the final consumers

regular foreign marketing

the firm has permanent productive capacity devoted to the production of goods and services to be marketed in foreign markets, products may be adapted to meet needs of foreign markets

introduction stage

the first stage of the IPLC when products are developed and marketed in industrialized countries

________ suffer(s) from issues such as difficulty in assessing taxes, unfair competition, import duties, and privacy.

the internet

media infrastructure

the media vehicles and their structure in an international target market.

channel of communication

the medium used to communicate a message about a product to the consumer.

adaptation

the strategy of altering a product to better meet the needs of a local market

The assault on advertising of ________ is escalating, as evidenced by the World Health Organization launching a global campaign against it.

tobacco

For companies seeking entrance into the complicated Japanese distribution system, ________ offer one of the easiest routes to success because they virtually control distribution through all levels of channels in Japan.

trading companies

global marketing

treat the world as one market, market segmentation is no longer focused on counts but on income level, usage patterns, etc..

Economic (CAGE)

· Rich-poor differences · Natural resources, financial resources, human resources, infrastructure, information or knowledge · Economic size · Low per-capita income · Rising GDP · Economic freedom

Setting the Total Promotion Budget and Mix- Shapping the Overall Promotion Mix , The Nature of Each Promotion Tool

1. Advertising: reaches masses of geographically dispersed buyers at a low cost exposure, enables seller to repeat a message many times, but is impersonal and one-way communication, can be costly 2. Personal Selling: most effective method at certain stages of the buying process, particularly in building buyers' preferences, convictions, actions, and developing customer relationships. However it is the most costly tool. 3. Sales Promotion: includes coupons, contests, cents-off-deals, and premiums that attract consumer attention and offer strong incentives to purchase, and can be used to dramatize products offers and to boost sagging sales. Not as effective as building relationships and brand preference. 4. Public Relations: very believable form of promotion that includes news stories, features, sponsorships, and events, can reach many prospects who avoid salespeople and advertisements, get to customers as "news" rather than sales-directed communication. Can help dramatize a product or company. 5. Direct Marketing: less public, message directed at specific person, immediate and customized. its interactive and is well suited when building one-to-one customer relationships.

False

Export management companies work under their own names.

Place decisions and types of store

1. Central Business districts: located in cities and include department and specialty stores, banks, and movie theaters 2. Shopping centers: group of retail businesses planned, developed, owner, and managed as a unit

What are the 3 levels of products

1. Core Customer value: address what the buyer is really buying 2. Actual Product:have to develop product and service features. design, quality level, brand name, and packaging 3. Augmented Product: benefits of actual owning this product, do this by offering additional consumer services and features, create customer value and the most satisfying brand experience

market leader

1. Market leader strategies (40%): expand total demand, protect their current market, expand market share -competition can come along, leaders might become complacent about competition, old fashioned about rivals A. Expand Total Demand by developing: a. new users b. new uses c. more usage of its products B. Protect Current Market by: a. fixing or preventing weekeness b. maintain consistent prices that provide value c. strong customer relations d. continuous innovation C. Expand Market Share by: a. increasing profitability with increasing market share b. produce high quality products c.creating good service experiences d. building close relationships

Competitive positions

1. Market leader strategies (40%): expand total demand, protect their current market, expand market share -competition can come along, leaders might become complacent about competition, old fashioned about rivals 2. market challenger strategies (30%) 3. market follow strategies (20%) 4. market nicher strategies (10%)

Product and Service Decisions (Individual product decisions)

1. Product Quality a. total quality management (TQM): approach in which all of the company's people are involved in constantly improving the quality of products, services, and business processes 2, Product Features: product can be offered with varying features, more value by offering more features 3. Product Style and Design: distinct product style and design -different than style: only describes the appearance of the product -Design goes to heart of the product, contributes to the products usefulness as well as to its looks

9 questions for creating a product-market profile

1. who buys our product 2. who does not buy it 3. what need or function does it serve 4. is there a market need that is not being met by current product/brand offerings 5. what problem does our product solve 6. what are customers buying to satisfy the need for which our product is targeted 7. what price are they paying 8. when is the product purchased 9. where is it purchased

strategic alliance

ANY type of relationship between one or more companies attempting to reach joint corporate and market related goals; term used to refer to most nonequity alliances

Sixty percent of the Japanese population lives in the _____ market area, which essentially functions as one massive city. A. Tokyo-Nagoya-Osaka B. Komaki-Tokoname-Kariya C. Nagoya-Handa-Seto D. Nishio-Okazaki-Inazawa E. Inuyama-Nisshin-Takahama

A. Tokyo-Nagoya-Osaka

Due to differences in culture in different markets, standardized products that are marketed globally will require:

A. a different advertising appeal.

Of the seven steps involved in international advertising, _____ almost always represents the most daunting task for international marketing managers. A. developing messages B. selecting effective media C. executing the campaign D. composing and securing a budget E. specifying the goals of the communication

A. developing messages Of the seven steps in developing international advertising, developing messages almost always represents the most daunting task for international marketing managers.

1. the diffusion of entertainment from the US to the rest of the world 2. the dominance of English in both business and entertainment.

According to your text, the rise of a "global consumer culture" is often attributed to what two factors?

True

As traditional channel structures are changing, importers and retailers are also becoming involved in new product development.

late maturity

At what stage of the International Product Life Cycle (IPLC) do manufacturers in industrialized countries begin to export their product to developing countries? Why does exporting become more important at this stage?

Which of the following factors affects the choice of distribution channels?

Available distribution intermediaries

Which of the following is one of the six Cs of distribution channel strategy? A. Communication B. Continuity C. Capacity D. Commission E. Contribution

B. Continuity cost, capital, control, coverage, character, and continuity.

In the international communications process, an international marketing executive with a product message to communicate acts as a(n) _____.

B. Information source

Using newspapers or magazine ads as a channel of communication when the majority of the intended users are illiterate, is an example of ineffective _____ in the communications process.

B. Media channel selection

In the communications process in advertising, during the _____ stage, a consumer takes certain actions to respond to a decoded message.

B. Receiver

Using newspapers or magazine ads as a channel of communication when the majority of the intended users are illiterate is an example of ineffective _____ in the communications process. A. feedback B. media channel selection C. noise D. market selection E. message selection

B. media channel selection

In Spain, a new medium for advertising called Publicoche includes:

B. private cars that are painted with advertisements.

In which of the following countries is the time spent on social media sites the highest?

C. Israel

Case 9-1

Case 9-1

All of the following are specific objectives of sales promotion EXCEPT:

D. Building brand loyalty

Home-country middlemen are also known as _____ middlemen. A. area B. local C. merchant D. domestic E. regional

D. domestic

Consumerism

Define: organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers

Monochronic Time (M-Time)

Describes a view of time typical to most North Americans, Swiss, Germans, and Scandinavians, as something that is linear and can be saved, wasted, spent, and lost. M-Cultures tend to concentrate on one thing at a time and value promptness

Pizza Hearth is in the process of deciding on the mode of entry into the Eastern European countries. Which phase of the international planning process is Pizza Hearth currently in?

Developing the marketing plan.

d

Direct international involvement has as a result which of the following? a. the company is exposed to less risk than if it used middlemen b. the company has greater control over marketing strategies. c. the company faces greater risk in the market d. b and c only

Which of the following modes of distribution affords the most control over the distribution channels but often at a cost that is not practical?

Direct sales force

Which of the following has proved to be an important way to break the trade barrier imposed by the Japanese distribution system?

Direct sales through catalogs

Which of the following is true of foreign sales corporations? A. They are commonly called piggybackers. B. They can only be related to a manufacturing parent and not an independent broker. C. They virtually control distribution through all levels of channels in Japan. D. They accumulate, transport, and distribute goods from many countries. E. They can function as principal or commissioned agents.

E. They can function as principal or commissioned agents. A foreign sales corporation can function as a principal, buying and selling for its own account, or a commissioned agent. It can be related to a manufacturing parent or can be an independent merchant or broker.

In the context of integrated marketing communications, in many markets, the availability of appropriate _____ to customers can determine entry decisions.

E. communication channels

One of the drawbacks of satellites is:

E. their ability to span a wide geographical region.

Contests, sweepstakes, and sponsorship of special events such as concerts are techniques used for maintaining and improving public relations.

FALSE Cents-off, in-store demonstrations, samples, coupons, gifts, product tie-ins, contests, sweepstakes, sponsorship of special events such as concerts, the Olympics, fairs, and point-of-purchase displays are types of sales promotion devices.

In the context of the different kinds of middlemen, the WTO in 2003 ruled export management companies to be in violation of international trade rules.

FALSE The WTO in 2003 ruled foreign sales corporations to be in violation of international trade rules, thus starting a major trade dispute with the European Union that still simmers and occasionally boils over.

Ford Motor Company

General Motors, _____, and DaimlerChrysler have created a single online site called Covisint for purchasing automotive parts from suppliers.

true

General merchandise discount store retailers sell high volumes of merchandise and offer limited services; they also charge lower prices.

D

Harrods of London exemplifies which of the following retail formats? A. specialized markets B. all-purpose discount stores. C. specialty stores. D. department stores.

true

Home-country intermediaries are instrumental in providing all international marketing services for firms that otherwise would not be able to enter a foreign market.

domestic

Home-country middlemen are also known as _____ middlemen.

In the context of international advertising, ________ is the neon capital of the world.

Hong Kong

Spain

In the context of cultural reactions when engaging in e-commerce, the color red is associated with socialism in _____.

An export management company

James Barker is the marketing manager of a firm with small international sales volume. He is looking for a middleman who can take responsibility for promotion of the company's products, credit arrangements, physical handling, and market research. Also, the middleman must be able to provide information on financial, patent, and licensing matters. In addition, the middleman should agree to work under the name of the firm. Which of the following types of middlemen would be the best choice for Mr. Barker if he wants to meet his objectives?

Non-Governmental Organizations (NGOs)

Large advocacy organization, usually not for profit, often multinational and run by citizens rather than companies or governments. Prominent examples are Green Peace, Amnesty International, and the Red Cross

False

Legal advice is not necessary when entering distribution contracts with middlemen.

false

Licensing is an international entry mode that presents less risk to the company by offers more control than exporting.

Wholly Owned Subsidiary

What entry mode affords the highest level of control but also presents the highest level of risk to the international firm?

C

Local newspaper that are unable to produce high enough quality in a print ad for a global brand are example of what media challenge? A. media availability. B. media costs. C. media reliability. D. media restrictions.

Who are frequently criticized for not representing the best interests of a manufacturer?

Merchant middlemen

________ take title to manufacturers' goods and assume the trading risks.

Merchant middlemen

Information source selection

Meta Garbon, a manufacturer of sports bicycles, in a bid to tap the enormous market for bicycles in China promote their cycles as premium sporting and leisure bicycles. They use various cycling legends and sports celebrities as brand ambassadors, and use television, radio, and newspapers as media. Bicycles in China are used mainly by the working class for commutation, and the main users of bicycles did not relate to Meta Garbon's products and the promotional campaign was a failure. During which of the following steps of the IMC process did Meta Garbon go wrong?

Setting the Total Promotion Budget and Mix-Objevtive-and-task method

Objective-and-task-method: sets the budget based on what the firm wants to accomplish with promotion and includes -defining the promotion objectives -determining tasks to achieve the objectives -estimating costs -advantages: forces management to spell out assumptions -most difficult method because often hard to figure out which specific tasks will achieve the stated objectives

true

Overlapping media among countries makes it easier to create awareness of a product

Apex Corp. is a wholesaler for Global Electronics in the French market. Global Electronics discovered that Apex Corp. was diverting some of its goods to the English market. Apex Corp. could get a greater profit in the English market because the goods were bought by the firm at a cheaper price in France. In the context of the above scenario, which of the following forms of business is Apex engaged in?

Parallel importing

Aesthetics

Philosophically, the creation and appreciation of beauty; collectively, the arts, including folklore, music, drama, and dance

________ allows ESPN to fill visual real estate-blank walls, streets, stadium sidings-with computer-generated visuals that look like they belong in the scene

Princeton Video Imaging

Different cultures often seek the same value or benefits from the primary function of a product.

TRUE Different cultures often seek the same value or benefits from the primary function of a product—for example, the ability of an automobile to get from point A to point B, a camera to take a picture, or a wristwatch to tell time.

Which of the following, according to experienced exporters, is the only way to select a middleman?

Talk personally to ultimate consumers to find whom they consider to be the best distributors

False

Television is an advertising medium where there are no restrictions in most countries.

In the context of international advertising, search engines have now become crucial directors of Internet users' attention.

True

C

Vending machines constitute a primary mode of retailing in A. the United States. B. the Netherlands. C. Japan. D. Canada.

d

Which of the following constitutes a possible strategy to combat parallel imports? a. charging similar prices worldwide b. complicating the repair process for parallel imports c. informing customers of problems when buying gray market products d. all of the above

Small retailers

_____ are considered to be the foundation of the Japanese distribution system.

international product life cycle (IPLC)

a product life cycle theory, which states that firms from developed countries engage in domestic production in the early stage of the product life cycle, marketing the product to industrialized countries; as the product reaches maturity, product specifications and the manufacturing process stabilize, price competition becomes intense, and markets in developing countries become essential to the firms success

infant industry argument

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

What is a target market

a set of buyers sharing common needs of characteristics that the company decides to serve

barter

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

buyback agreements

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

noise

all the potential interference in the communication process.

linguistic equivalence

all translations should be the same from country to country

local campaign

an advertising campaign that is tailored to local needs; especially used in markets that media cannot easily reach.

Which of the following is not typically a fixed cost? a. Wi-Fi access b. raw materials c. equipment leases d. rent e. insurance policies

b. raw materials

Your sales work is more of a lifestyle than a job. It often involves complex customer situations and weeks of preparation and problem solving to help find workable solutions for those situations. You enjoy it because it enables you to travel to many places and interact with people continuously. However, much of your work involves careful follow-up after your customer visits. Which personal sales channel have you chosen as a career? a. Telemarketing b. Over-the-counter selling c. Inside selling d. Field selling

d. Field selling

During which step of the international communications process does the receiver of the message interpret symbolism transmitted from an information source?

decoding

designing and developing the product

developing product prototypes and giving the product a name, brand identity, and a marketing mix. A step in the new product development cycle

logistics alliances

distribution alliance between two firms involving product transportation and warehousing.

Janet works for a media agency based in Japan. Janet is helping the integrated marketing communications (IMC) manager of Siljure, a French cosmetics company, with the design and content to be used in an upcoming promotional campaign in Japan. The IMC manager knows what to convey but wants to advertise it in a culturally relevant manner. Which step of the international communications process is Janet helping Siljure with?

encoding of the message

Interactive Techniques for Political Risk

helps the overseas operation become a part of the host country's infrastructure; -Developing good relations with the host government and other local political groups -Producing as much of the product locally as possible with the use of in-country suppliers and subcontractors -Creating joint ventures and hiring local people to manage and run the operation -Doing as much local research and development as possible -Developing effective labor-management relations

controllable elements of marketing

product, price, promotion, can be altered in long run and short run to adjust to changing market

U.S. Foreign Corrupt Practices Act (FCPA)

prohibits American companies from making improper payments to foreign officials for the purpose of obtaining or retaining business

generating new product ideas

seeking ideas using different strategies as the first step in the new product development process

conventional supermarkets

self-service food retailers with annual sales of more than $2 million and with an area less than 20,000 square feet.

brand name counterfeiting

selling counterfeit products as brand name originals

dumping

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

________ are considered to be the foundation of the Japanese distribution system.

smaller retailers

6 Cs of Channel Strategy

1.Cost - developing channel and maintaining it 2.Capital Requirements - max investment required when org develops own channels or internal sales force 3.Control - the more involved a company is with distribution, the more control they exert 4.Coverage - assessed by geographic segments, market segments or both 5.Character - channel of dist. selected must fit with character of company and market its doing business in 6.Continuity - channels of dist. often pose longevity problems

_____ is often the approach of choice in markets with insufficient or underdeveloped distribution systems. A. Direct marketing B. A big wholesale store C. Internet selling D. A discount house E. Television advertising

A. Direct marketing Sometimes called direct marketing, selling directly to the consumer through mail, by telephone, or door-to-door is often the approach of choice in markets with insufficient or underdeveloped distribution systems. The approach, of course, also works well in the most affluent markets.

Which of the following characterizes the business philosophy of the Japanese distribution channels? A. Loyalty B. Direct sales C. Fast delivery D. Variety E. Price competition

A. Loyalty Coupled with the close economic ties and dependency created by trade customs and the long structure of Japanese distribution channels is a relationship-oriented business philosophy that emphasizes loyalty, harmony, and friendship. The value system supports long-term dealer-supplier relationships that are difficult to change as long as each party perceives economic advantage.

Which of the following is a type of domestic middleman? A. Sole proprietors B. Export management companies C. Foreign distributors D. Lessors E. Joint ventures

B. Export management companies

Which of the following factors affects the choice of distribution channels? A. Distance from manufacturer B. Language spoken in the target market C. Available distribution intermediaries D. Consumer literacy levels E. Country's per capita income

C. Available distribution intermediaries

Which of the following countries has the largest number of retailers? A. United States B. Argentina C. China D. Brazil E. Japan

C. China has the largest number of retailers. Refer to Exhibit 15.2-Retail Structure in Selected Countries.

General Motors, _____, and DaimlerChrysler have created a single online site called Covisint for purchasing automotive parts from suppliers. A. Toyota Motor Corporation B. Honda Motor Company C. Ford Motor Company D. Nissan Motor Company E. Tata Motors

C. Ford Motor Company General Motors, Ford Motor Company, and DaimlerChrysler have created a single online site called Covisint (www.covisint.com) for purchasing automotive parts from suppliers, which is expected to save the companies millions of dollars.

One of the reasons that channels of distribution often pose longevity problems is that most middlemen _____. A. do not maintain sufficient inventory to serve customers B. lack product knowledge resulting in low sales volume C. have little loyalty to their vendors D. tend to slow down distribution to extract higher commissions E. do not have sufficient knowledge of the target market

C. have little loyalty to their vendors

In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment? A. Export management companies B. Trading companies C. Export associations D. Direct sales force E. Complementary marketers

D. Direct sales force Maximum investment is usually required when a company establishes its own internal channels, that is, its own sales force. Use of distributors or dealers may lessen the capital investment, but manufacturers often have to provide initial inventories on consignment, loans, floor plans, or other arrangements.

Factors Influencing channel Distribution Decisions (External)

External: Consumer shopping habits and market size Competitive climate Local regulations

Marketing Channels Create Utility for Customers

Place utility - availability of a product or service in a location that is convenient to a potential customer Time utility - availability of a product or service when desired by a customer Form utility - availability of the product processed, prepared, in proper condition and/or ready to use Information utility - availability of answers to questions and general communication about useful product features and benefits

Channels of distribution often pose longevity problems.

TRUE Channels of distribution often pose longevity problems. Most agent middlemen firms tend to be small institutions. When one individual retires or moves out of a line of business, the company may find it has lost its distribution in that area.

In the traditional distribution structure, independent agencies that provide facilitating functions are nonexistent or underdeveloped.

TRUE In a traditional distribution structure, the importer-wholesaler performs most of the marketing functions. Hence, independent agencies that provide advertising, marketing research, warehousing and storage, transportation, financing, and other facilitating functions found in a developed, mature marketing infrastructure are nonexistent or underdeveloped.

Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

TRUE Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

In the context of retail patterns, direct marketing works well in affluent markets as well as in markets with underdeveloped distribution systems.

TRUE Selling directly to the consumer through mail, by telephone, or door-to-door is often the approach of choice in markets with insufficient or underdeveloped distribution systems. The approach, of course, also works well in the most affluent markets.

The Export Trading Company Act allows producers of similar products to form export trading companies.

TRUE The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies. A major goal of the ETC Act was to increase U.S. exports by encouraging more efficient export trade services to producers and suppliers to improve the availability of trade finance and to remove antitrust disincentives to export activities.

The behavior of channel members in the distribution process is the result of the interactions between the cultural environment and the marketing process.

TRUE The behavior of channel members is the result of the interactions between the cultural environment and the marketing process. Channel structures range from those with little developed marketing infrastructure, such as those found in many emerging markets, to the highly complex, multilayered system found in Japan.

How channel members add value

- Economic view point, intermediaries transform the assortment of products into assortments wanted by consumers -Channel members add value by bridging the major time, place,and possession gaps that separate goods and services from users -intermediaries offer the more than it can achieve Offer: information,promotion, contact, matching,negotiation, physical distribution, financing, risk taking

competitive influences and the cartels

- a cartel exists when various companies producing similar products or services work together to control their markets - the cartel association may use formal agreements to set prices, establish levels of production and sales for the participating companies, allocate market territories, and even redistribute profits - the legality of cartels is not clearly defined - domestic: illegal in North America and the EU

joint venture advantages

- allows for risk sharing, financial and political - provides opportunity to learn new environment - provides opportunity to achieve synergy by combining strengths of partners - may by the only way to enter market given barriers to entry

high income countries

- also known as advanced, developed, and industrialized countries - sustained economic growth through disciplined innovation - intellectual over machine technology, scientists and professionals overs engineers and semiskilled workers

administered pricing

- an attempt to establish prices for an entire market through the cooperation of competitors, or by national, provincial, or state, or local governments; or by international agreement

latent market

- an undiscovered segment that will emerge when a product is introduced - first mover advantage is key - example: minivans in the US

cultural electives

- areas of behaviour or customs that one may wish to conform to or participate in but are not required - a symbolic attempt to participate in electives may help to establish rapport - a cultural elective in one country may be an imperative in another

place utility

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

time utility

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

local products and brands

- brands that have achieved success in a single national market - represent the lifeblood of domestic companies

Too Few Social Goods

- business oversell private goods at the expense of public goods and require more public goods to support them=lots of social costs Response: needs to be balance between private and public goods. Producers should bear full social costs of their operations and pay social costs of their purchases.

rigid cost plus pricing

- companies set prices without regard to the eight pricing considerations

sources of market information: personal sources

- company executives based abroad who have contact with the distributors, consumers, suppliers, and government officials - friends, acquaintances, professional colleagues, consultants, and prospective employees

contract manufacturing

- company provides technical specifications to a subcontractor or local manufacturer - allows company to specialize in product design while contractors accept responsibility for manufacturing facilities

international dispute resolution

- conciliation - arbitration - litigation

sustaining technologies

- defined as incremental or radical innovations that improve product performance - most new technologies developed by established companies are sustaining in nature - the vast majority of innovations are sustaining in nature

creative execution

- defined as the way an appeal or proposition is presented - straight sell - scientific evidence - demonstration - comparison - slice of life - animation - fantasy - dramatization

global retailing

- department stores - specialty retailers - supermarkets - convenience stores - discount stores and warehouse clubs

rational approach strategy for advertising

- depend on logic, and speak to the consumer's intellect; based on the consumers need for information

product packaging

- designed to protect the product during shipping, at retail, or point of use - communicates information that promotes the purchase

creation

- developing new products for the world market

establishing channels

- direct involvement: the company establishes its own sales force or operates its own retail stores - indirect involvement: the company utilizes independent agents, distributors, and wholesalers

trade financing and methods of payment

- documentary credits - documentary collections (bill of exchange) - cash in advance - sales on an open account

global brand development

- does the move fit the company and its markets? - will anticipated scale economies materialize? - how difficult will it be to develop a global brand team? - can a single brand be imposed on all markets successfully?

domestic rivalry

- domestic rivalry in a single national market is a powerful influence on competitive advantage - absence of rivalry can lead to complacency in the home firms and eventually cause them to become noncompetitive in the world markets

polycentric orientation

- each country is unique - each subsidiary develops its own unique business and marketing strategies - multinational - leads to localized/adaption approach, where assumption is made that products must be adapted to local market conditions

visual aesthetics

- embodied in the colour of shape of a product, label, or package

customs union

- evolution of free trade area - includes elimination of internal barriers to trade - establishes common external barriers - examples: the EU, Turkey

government influences

- governments may establish margins, set price floors and ceilings, restrict price changes, compete in the market, grant subsidies, and act as its own purchasing or selling monopoly - may also influence prices by permitting, or even encouraging business to collude in setting manipulative prices

Overall Advertising Objective

- help move consumers through the buying process -building or strengthening long-term customer relationships

government taxation policies

- high taxation can lead to black market growth and cross-border shopping

global consumer culture positioning

- identifies the brand as a symbol of a particular global culture or segment

cultural considerations

- images of male/female intimacy - wedding rings are worn on the right hand in some countries - European men kiss the hands of married women, not single women - in some countries, a man enters a door before a woman

innovation

- important for reaching mass markets in less industrialized nations and certain segments in industrialized countries - example: hand cranked radios for areas with no electricity

inflation and deflation

- in countries with rapid inflation goods are often sold below their cost of replacement - deflation results in decreasing prices and creates a positive result for consumers, but it puts pressure on everyone in the supply chain to lower costs

Latin America: SICA, Andean community, Mercosur, CARICOM

- includes the Caribbean, Central, and south America - history of: no growth, debt, protectionism, open economies, and deregulation - concern for further growth in the eye of North America

demographic segmentation

- income - population - age distribution - gender - education

high context cultures

- information resides in context - emphasis on background, basic values, societal status - less emphasis on legal paperwork - focus on personal reputation - example: Saudi Arabia and Japan

five principles of disruptive innovations

- innovations are both customer-driven and prospect-sourced. - small markets don't solve the growth needs of large companies - markets that don't exist can't be analyzed - an organizations capabilities defines its disabilities - technology supply may not equal market demand

export selling

- involves selling the same product, at the same price, with the same promotional tools in a different place

foreign direct investment (FDI)

- joint ventures - minority or majority equity stakes - outright acquisition

strategies for reducing political vulnerability

- joint ventures: to minimize anti-foreign feelings, allows you to operate under a respected name - expanding the investment base: include investors and banks from the host country - licensing: eliminates most risk to conduct business in a foreign country (also helps to have host nationals work there) - planned domestication: when host countries demand local participation - political contribution: to pay those in power to lessen political risks - insurance

state market

- market socialism

success factors of alliances

- mission: create win-win situations, where participants pursue objectives on the basis of mutual need or advantage - strategy: must be thought out up front to avoid conflicts - governance: partners must be viewed as equals where rules are established upfront (50/50 or 49/51) - culture: personal chemistry with corporate culture is important - organization: innovative structure will be needed to address multi-country management (who makes the decisions), clear lines of authority will need to be established and accepted by both parties

pro-globalists

- modern world is experiencing rapid change in preferences and tastes and we should embrace this - global business have evolved into integrated supply-demand chains that satisfy customer needs better than ever before

differential global marketing

- multi segment targeting - two or more distinct markets - wider market coverage - Old Spice, Hugo Boss, etc

forces affecting global integration and global marketing

- multilateral trade agreements - converging markets needs and wants (information revolution) - transportation and communication improvements - world economic trends, such as movement to free markets

anti-globalists

- multinational corporations supported by government act only for their own benefit and do not truly reflect the will of the governed - globalization only serves the interests of the powerful and wealthy, and in turn should be stopped

sourcing

- must emphasize the benefit of sourcing from another country instead of using what the home country has - must assess vision and values of company leadership - advantages can be gained by: concentrating some of the marketing activities in a single location, leveraging companies knowledge and experience, and tapping opportunities for research and product development

advantages of licensing

- provides additional profitability with little initial investment - provides method of circumventing tariffs, quotas, and other export barriers - low costs to implement - license agreements should have cross-technology agreements to share developments and create competitive advantage for each party

low-middle income countries

- rapidly expanding consumer markets - cheap labour - mature, standardized, labour-intensive industries like footwear, textiles, and toys

upper-middle income countries

- rapidly industrializing - less agriculture - increasing urbanization - rising wages - high literacy rates and advanced education - lower wage costs - called industrializing or developing companies - Brazil, China, Russia, South Africa, Mexico, Malaysia

balance of payments

- record of all economic transactions between the residents of a country and the rest of the world - current account: record of all recurring trade in merchandise and services - capital account: record of all long-term direct investment, portfolio investment, and capital flows

abstract culture (think deep level of the ice berg)

- religion - perceptions - attitude - beliefs - values

global products and brands

- same products are offered in all world regions - global brands have the same name and similar image and positioning throughout the world - example: BMW, GE, Harley-Davidson

market expansion strategies

- seeking new markets in existing countries - seeking new country markets for already identified and served market segments

government actions to discourage imports and block market access

- tariffs - import controls - nontariff barriers: - quotas, restrictive custom procedures, arbitrary monetary policies - restrictive regulations

cultural imperatives

- the business customs and expectations that must be met and conformed to or avoided if relationships are to be successful - example: the Chinese guanxi, the Japanese ningen kankei which both emphasize the significance of establishing friendship, human relations, or attaining a level of trust to be successful

economic dualism

- the coexistence of modern and traditional sectors within the economy - although two sectors may be close geographically, they are centuries apart in production and consumption - the dual economy greats two distinct economies and marketing levels

variable cost pricing

- the firm is concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets - such firms assume that any return over their variable cost makes a contribution to net profit - could be subject to charges of dumping

economic exposure

- the impact of currency fluctuations on the present value of the company's financial performance - occurs when sales are in a foreign country (Nestle generates 98% of sales outside home country)

quality defined

- the market perceived quality of the product or service - what is the product or service capable of - quality perceptions vary across markets - consumer perception of a quality product had more to do with market perceived quality - a product that exceeds expectations is also of 'poor' quality, since by definition, its does not deliver what is being asked

adoption process

- the mental stages through which an individual passes from the time of his or her knowledge of an innovation to the time of product adoption or purchase - awareness, interest, evaluation, trial, adoption

difficulty of global advertising

- the message may not get through - the message reaches the target audience but is not understood - the message is received and understood, by may not cause for the recipient to take action like the sender wants - effectiveness of the message can be impaired by noise

mistaken assumptions

- the poor have no money - the poor will not waste money on non-essential goods - entering developing markets is fruitless because goods in that market are too cheap to make a profit - people in the bottom of the pyramid cannot use technology - would be seen as exploiting the poor if doing business in these countries who are under developed

transfer pricing

- the pricing of goods, services, or any intangible property bought and sold by operating units or divisions of a company doing business with an affiliate in another jurisdiction - cost based transfer pricing - market based transfer pricing - negotiated transfer pricing

selling proposition

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

aesthetics

- the sense of what is beautiful and not beautiful - what represents good taste as opposed to tastelessness or even obscenity

forward contracts

- to set the price of the exchange rate at some point in the future to eliminate some risk

free trade area

- two or more countries agree to abolish tariffs and other barriers to trade amongst themselves - rules of origin: restrict transshipment of good from the country with the lowest tariff to another

counterfeiting

- unauthorized copying and production of a product

zeroing in on economic systems

- understand the type of economy: industrial state, emerging, developing, etc - understand the type of government: monarchy, dictatorship, democracy, etc. - understand the trade flow: tree trade, part of trading, currency exchange, etc. - understand the institutions: standards, absence of corruption, etc - understand the market: entrepreneurial high risk/high reward, socialized market, government dominated, etc

creating competitive advantage: collaborating

- use the knowledge developed by other companies - utilize licensing agreements, joint ventures, or partnerships

ASEAN

- variety of countries including Cambodia, Indonesia, Thailand, etc. - trading partners with the US, Japan, EU, and China - geographically close but historically divided - China/ASEAN FTA established in 2010 removed 90% of tariffs on traded goods

style aesthetics

- various degrees of complexity, for example, are perceived differently around the world

causes for political risk

- war - social unrest, fractionalized by language, ethnic/religious groups - politically motivated violence - corruption, nepotism - labour costs - tax discrimination, exchange controls, tariff barriers

critical questions regarding global retailing

- what advantages do we have relative to the local competition

price fixing

- when representatives of two or more competitors secretly set similar prices for their products - horizontal price fixing: competitors within in an industry - vertical price fixing: manufacturer and wholesalers ensuring certain retail prices

Direct Response Television

-60-120 secs advertisements that describe products or give customers a toll-free number or website to purchase -30 min info commercials -less expensive than other forms and easier to track results -DRTV: more associated with somewhat questionable pitches for cleaners, stain removers, etc (sham wow, as seen on TV, etc) -Interactive TV (iTV): lets viewers interact with TV programming and advertising

Territoriality

-All intellectual property law is passed on the principle of this -Each state or country determines for its own territory, what is to be protected, who should benefit from such protection and for how long, and how the protection should be enforced

The Eclectic Paradigm [WHY, WHERE, HOW]

-Attempts to interpret all stages of international expansion, from exporting till FDI -Different combinations of the three variables determine the models, industries and geographical distribution of MNC's international ownership

Recruiting and Selecting Salespeople Issues in Recruiting and Selecting

-Careful selection and training increases sales performance -Poor selection increases recruiting and training costs, lost sales and disrupts customer relationships -top 30% of the company brings in about 60% of their sales -Consulting Gallup: interviewed thousands of salespeople and found that the best salespeople possess 4 key talents: intrinsic motivation, disciplined work style, ability to close a sale, and ability to build relationships with customers

Benefits of Standardization

-Cost Reduction: Economies of scale in R&D, production, marketing, managerial and organizational processes -Global Image: Strong corporate image -Easier Planning and Control: Development and implementation of strategies -Diffusion of Innovation: Quick ROI favors spread of product innovation

Political-Legal Environment

-Countries attitude toward international buying: some have more limitations -government bureaucracy -political stability -monetary regulations: sellers want to take profits in the form of currency. Sellers might except a blocked currency which is when their profit is restricted so they have to buy good in the country that they need or can elsewhere for needed currency. Barter involves the direct exchange for goods and services.

Major Decisions Regarding Internationalization

-Deciding to go abroad -Deciding which markets -Deciding how to enter markets -Deciding on marketing programs -Deciding on marketing organizations

Deciding which Markets to Enter

-Define international marketing objectives and policies -foreign sales volume -how many countries to market to -types of countries to market to based on a. geography b. income and population c. political climate -Rank potential global markets based on a. market size b. market growth c. cost of doing business d. competitive advantage e. risk level

Company Objective and Resources

-Defining objectives clarifies the orientation of the domestic and international divisions, permitting consistent policies -Foreign market opportunities do not always parallel corporate objectives and resources

Operational Risks

-Government policies and procedures that directly constrain management and performance of local operations -poses medium level of risk

Ownership Control Risks

-Government policies or actions that inhibit ownership or control of local operations -most risky

Transfer Risks

-Government policies that limit the transfer of capital, payments, production, people, and technology in and out of country -considered the least risky

OLI Paradigm: Internationalization Advantages

-It might be more profitable for MNCs to exploit their O&L advantages through internalization rather than by using arm's-length market arrangements (occasional transactions often without a long-term orientation; licensing, franchising, joint venture) -On the other hand, if transaction costs are estimated to be low, then arm's-length arrangement may prove more promising

OLI Paradigm: Location Advantages

-It might be more profitable for MNCs to exploit their ownership advantages by combining them with others pertaining to the exploitation of resources located outside the home country. This provides the incentive to locate some part of their activities abroad -Otherwise, MNCs could either import or outsource these inputs locally, and then serve overseas markets via exports -Location possible assets: low cost and high quality of transportation, favorable host government policy, access to raw materials, technology and human capital

Micro Distribution Centers (MDC's) in Africa

-MDCs are mainly independently owned, low-cost businesses -The MDC model identifies and engages independent entrepreneurs, who receive business training and in some situations financing, to become an MDC owner. -The majority of MDC owners have a minimum of primary school education and have previously been employed or were in school before becoming an owner. -Have the potential to grow a business, employ others, raise productivity, and increase incomes on a sustained basis.

OLI Paradigm: Ownership Advantages

-MNCs have to possess some firm-specific competitive advantages over local firms in serving particular national markets -Ownership, or firm-specific advantages, arise from the monopoly control of tangible and intangible assets by MNCs -Examples: core competencies, patents and trademarks, technology, brand names

Dual Extension: Product-Communication Extension

-May be very profitable -Almost no adaptation -Same advertising and promotional appeals -Used with B2B or industrial products

Benefits of Adaptation

-Motivation of Local Managers: Stimulates creativity -Higher satisfaction of local consumers: Increases company's competitive potential -Legal issues and differences in technical standards: E.g. video game standards

Planned Obsolescence

-Planned Obsolescense: causing their products to become obsolete before they actually need replacement -Perceieved Obsolescnce: changing consumer concepts of acceptable styles to encourage more or earlier buying Response: 1. Planned Obs. is really the result of competitive market forces leading to always improving goods and services 2. Customer like style changes and war the latest innovations

Market characteristics (the host country) [external] country and industry data

-Potential sales -Strategic importance -Strengths of local competitors -Cultural differences -Country restrictions -L-T regional expansion

Product Extension-Communications Adaptation

-Products may serve the same or different needs in different markets (ref: functional equivalence) -No product changes reduce expense -Costs in market research advertising, sales promotion, point-of-sale material

Economic Distance

-Rich-Poor differences -Natural resources, financial resources, human resources, -infrastructure or knowledge -Economic size -Low per-capita income -Rising GDP -Economic Freedom

Steps in Developing Effective Marketing Communication-Selecting the Message Source

-The message's impact on the target audience is affected by how the audience views the communicator 1. Celebrities (athletes,entertainers) 2. Professionals (health care providers) - highly credible sources=more persuasive -have to be careful when selecting celebrities to represent brand because can result in embarrassment and tarnished image

The Integrated Marketing Communications (IMC) Process

-first identity the target audience (because customers differ), determine communication objectives, design the message, choose the media, and select message source -Many times marketing communication focus on immediate awareness, image, or preference goals in the target market but this is too shortsighted today marketers are viewing communications as managing customer relations over time 1. Sender: party sending message to other party 2. Encoding: process of putting thought into symbolic form 3. Message: set of symbols the sender transmits 4. Media: communications channels through which the message moves 5. Decoding: process which the receiver assigns meaning to symbols 6. Receiver: parting receiving the message 7. Response: reaction of the receiver after being exposed to message 8. Feedback: part of the receivers response communicated back to the sender 9. Noise: unplanned static or distortion during the communication process which results in the receiver's getting a different message than the one the sender sent

Additional Product and Service Consideration

-government can prevent companies from adding products if the event threatens to lessen competitors -companies dropping products must be aware that they have legal obligations, written or implied, to their suppliers, dealers, and customers -Manufacturers must comply with specific laws regarding product quality and safety-- The Federal Food Drug and Cosmetic Act: protects consumers from unsafe and adulterer food, drugs, and cosmetics -Consumer Product Safety Act: established the consumer product safety commission which has the authority to ban or seize potentially harmful products and set severe penalties for violation of law -International Product and services: figure out what products and service to introduce and in which countries. They must decide how much to standardize or adapt their products and services for world markets.

4 institutional voids

-legal systems -social and political systems -product market systems -financial systems

The Role and Impact of Public Relations

-lower cost than advertising -stronger impact on public awareness than advertising -has power to engage consumers and make them part of the brand story

Using Email

-marketers are developing enriched messages that include animation, interactivity, and personal messages with streaming audio and video to compete with the cluttered email environment -lets marketers send highly targeted, personalized relationship building messages -downsides: spam, unwanted commercialized messages, and permission-based marketing allows users to opt in or out of email marketing

Cultural Pollution

-marketing and advertising create cultural pollution response: -planned to reach only target audience and advertising makes radio and TV free to users and helps keep down costs. people also have alternatives to advertising.

International Marketing Involvement

-no direct foreign marketing -infrequent foreign marketing -regular foreign marketing

Geographic Distance

-physical remoteness -lack of a common border -lack of sea or river access -size of country -time zone differences -weak transportation or communication links -differences in climates -number pf paved roads -urban/rural dichotomy -Logistics Performance Index

Cultural Environment

-the need to adapt to local cultural values and traditions rather than imposing their own -ex: IKEA captures about 7% of the China home-furnishing market, sales increased 20% last year -ex: in China nearly half of all children identify Mcdonalds as a domestic brand

Promotion Mix (stuff included)

1. Advertising: any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor (ex: broadcast, print, internet, outdoor) 2. Sales Promotion: short term incentive to encourage the purchase or sale of a product or service (ex: discounts, coupons, displays, demonstrations) 3. Personal Selling: personal presentation by the firm's sales force for the purpose of making sales and building customer relationships (ex: sales presentations, trade shows, incentive programs) 4. Public Relations: involves building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events (ex: press releases, sponsorships, special events, web pages) 5. Direct Marketing: involves making direct connections with carefully targeting individual consumers to both obtain an immediate response and cultivate lasting customer relationships- through the use of direct mail, telephone, direct-response T.V, email, and the internet to communicate directly with specific consumers (ex: catalog, telemarketing, kiosks)

Setting the Total Promotion Budget and Mix -Affordable Budget Method

1. Affordable Budget Method: sets the budget at an affordable level and ignores the effects of promotion on sales. Small business often use this method. This method tends to place promotion last among spending priorities. Most of the time results in underspending.

Product and Service decisions (continued)

1. Branding : is a name, term, sign, symbol, or design, or combination of these that identifies the maker or seller of a product or service -helps consumers identify products that might benefit them, say something about product quality and consistency 2. Packaging: involves designing and producing the container or wrapper for a product 3. Labeling: ranges from simple tags attached to products to complex graphics that are part of the packaging -identify the product/brand, might describe the product, help to promote the brand 4. Product Support Services: customer service is another element or product strategy -ex: email, internet, and interactive voice and data technologies is used to provide support services 5. Product Line: A group of products that are closely related because they function in a similar manner or sold to same customer groups a. Product line length: number items in the product line b. line filling: adding more items within the present range of the line c. Product Line stretching: company lengthens its product line beyond its current range downward, upward, or both ways 6. Product Mix: The set of all product lines and items that a particular seller offers -important dimensions: width, length, depth, and consistency

Online Marketing Domains

1. Business to Consumer (B2C): involves selling goods and services online to final consumers 2. Business to Business (B2B): involves selling goods and services,providing information online to businesses, and building customer relationships 3. Consumer to Consumer (C2C): occurs on the web between interested parties over a wide range of products and subjects -Blogs: offer fresh, original, and inexpensive ways to reach audiences but they are difficult to control) 4. Consumer to Business (C2B): involves consumers communicating with companies to send suggestions ad questions via company websites

A need for Action

1. Can Spam: government agencies are investigating do not call, email, lists and Can Spam legislation. government has considered numerous legislative actions how marketers obtain information. -have agreed to let consumers know when their information is being tracked by the symbol of a little "i" inside a triangle 2. California Online Privacy Protection Act (OPPA) 3. Children's Online Privacy Protection Act (COPPA): requires online operators targeting children to post privacy policies on their website and must notify parents if they are gathering any information about the child. 4. TRUSTe: nonprofit, self-regultary organization works with many large corporate sponsors to audit privacy and security measures and help consumers navigate the internet safely

Socially Responsible Marketing Communication

1. Communicate openly and honestly with consumers and resellers 2. Avoid false advertising 3. Avoid bait-and-switch advertising: advertise lower price but then with certain conditions they are at higher price or convinced to buy another higher prices product 4. Conform to all state and federal regulations -ex: under Robinson-Patman Act: sellers can't favor certain customers through their use of trade promotions. They must make their promotions available to all resellers on equal terms. -Federal Trade Commision (FTC) adopted the "three day cooling off rule": customers who agree in their own homes, workplace, dormitory, etc to buy something costs more than $25 they have 72 hours to cancel or return item and get money back 5.Follow rules of "fair competition" 6. Don't offer bribes 7. Don't attempt to get competitors trade secrets 8. dont disparate competitors of their products

Product and Service Classifications

1. Consumer Products: Products and services bought by final consumers for personal consumption a. Convenience Product: product consumers buy frequently, immediately, minimal comparison b. Shopping Product: when shopping consumers usually compare on such attributes such as suitability, quality, price, and style c. Specialty Products: product with unique characteristics and brand indentifaction , willing to make special purchase effort d. Unsought Product: product that the consumer doesnt know about or doesnt normally consider buying 2. Industrial Product: bought by individuals and organizations for further processing or for use in conducting a business a. Materials and Parts: include raw materials, manufactured materials and parts b. Capital Items: products that aid in the production or operations c. Supplies and Services: operating supplies,repair and maintenance items

Types of Websites

1. Corporate website: designed to build customer goodwill and to supplement other channels, rather than to sell the company's products directly to: -provide information -create excitement -build relationships 2. Marketing Website:designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome

What are the major pricing strategies?

1. Customer Value-based pricing: uses buyers' perceptions of value as the key to pricing. Price is considered along with all other marketing mix variables before the marketing program is set. a. Good-Value Pricing: offering the right combination of quality and good service at a fair price b. Value-added Pricing: attaching value-added features and services and charging higher prices 2. Cost-based pricing: involves setting prices based on the costs of producing, distributing, and selling the product plus fair rate of return for its effort and risk a. Cost-Plus Pricing: adding a standard markup to the cost of a product (ex: construction companies submit job bids by estimated the total project cost and adding standard markup for profit) b. Break-Even analysis and target profit pricing: firm tries to determine the price at which it will break even or make the target return it its seeking (total revenue=total costs) 3. Competition-Based pricing: involves setting prices based on competitors' strategies, costs, prices, and market offerings

Managing New Product Development

1. Customer-centered new product development: new- product development that focuses on finding new ways to solve customer problems and create more customer satisfying experience 2. Team- Based new-product development: development in which various company department work closely together, overlapping the steps in the product development process to save time and increase effectiveness (departments like marketing, finance, design, manufacturing, legal departments, etc.). Assemble a team from various departments that stays with new product from start to finish. If bottleneck happens then the team can go on except that one specific problem will only be focused on by that specific team member) 3. Systemic Approach: new product development should be holistic and systemic rather than compartmentalized and haphazard 4. Turbulent: when tough economic times hit, or when company faces financial difficulties, management may want to reduce spending on new-product development. Such thinking is not good because by making less products the company makes itself less competitive .Tough times call for even greater new product development and innovation helps rather than hurts!

Product Life Cycle (PLC) Strategy

1. Development Stages: begins when company finds and develops a new-product idea. Sales are zero and companies investment costs mount. 2. Introduction stage: period of slow sales growth as the product is introduced in the market. Profits are non-exhistant because of heavy expenses of product introduction 3. Growth Stage:period of rapid market acceptance and increasing profits 4. Maturity Stage: period of slowdown in sales growth because product has achieved its acceptance. Profit levels off or declines 5. Decline Stage: period when sales fall off and profits drop PLC can describe: 1. Style: basic and distinctive mode of expression 2. Fashion: currently accepted or popular style in given field 3. Fad: temporary periods of unusually high sales driven by consumers

Number of channel levels

1. Direct marketing channel: marketing channel that has no intermediary levels 2. Indirect Marketing channel: a marketing channel containing one or more intermediary levels

Forms of online advertising

1. Display ads: appear anywhere on website and might relate to information being used 2. Search-related ads: ads in which text-based ads and links appear alongside search engine results on sites such as Google and Yahoo and are effective in linking consumers to other forms of online promotion. Largest form of online advertising which account for 46.5% of all online advertising spending each year. 3. Online Classified 4. Banners: banner shaped ads found on website 5. Interstitials: ads that appear between screen changes 6. Rich Media Ads: incorporate animation, video, sound, and interactivity 7. Content Sponsorship: provides companies with name exposure through sponsorship of special content such as news or financial information 8. Viral Marketing: internet version of word-of-mouth marketing and involves the creation of a website, email message, or other marketing event that customers pass along to friends

What are the types of costs?

1. Fixed (overhead): costs that do not vary with production or sales levels (ex: rent, heat, salaries, etc.) 2. Variable: costs that vary directly with the level of production 3. Total Costs: sum of the fixed costs+variable costs

Salesperson Compensation Based On

1. Fixed income 2. Variable Amounts 3. Expenses 4. Fringe Benefits - more companies are moving away from high commission plans that many drive salespeople to make short term grabs for business. Pushing too hard to close the deal many ruin the customer relationship. -Instead companies are designing compensation plans that reward sales people for building customer relationships and growing the long-run value of each customer -Companies are looking for ways to shorten administrative duties, using phone, email, and internet instead of traveling, and developing better sales-call and routing plans to save time and work more

Marketing Impact on individual consumers

1. High prices: high costs of distribution, high advertising, promotion costs, and excessive markups 2. Deceptive practices 3. high-pressure selling 4. harmful, unsafe products 5. planned obsolescence 6. poor service to disadvantaged consumers

Positioning Strategies

1. Identify possible value differences and competitive advantages a. Competitive advantage: important, distinctive, superior, communicable, affordable, profitable 2. Selecting an overall positioning strategy a. Value Proosition: the full mix of benefits on which a brand is differentiated and positioning 3. Develop a positioning Statement: sum of the company and brand positioning Form: To (target segment and need) our (brand) is (concept) that (point of difference)

Service Marketing

1. Internal Marketing: service firm must orient and motivate customer-contact employees and supporting service people to work as a team to provide customer satisfaction 2. Interactive Marketing: training service employees in the fine art of interacting with customers to satisfy their needs

Brand Development

1. Line Extensions: occurs when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors (ex: Cheerios lines) 2. Brand Extensions: extends current brand name to new modified products in a new category (ex: kellogs extended from cereal to breakfast bars, shakes, protein waters, etc) 3. Multibrands: companies often market many different brands in a given product category (ex: pepsico) 4. New Brands: companies create new brand when they believe that the power of its exhisting brand name is waning ex: Toyota created Lexus for more luxury consumers

Market Niche

1. Market Niche Strategies -big enough to be profitable with high goeth potential and has little interest from compeitors -key is specialization; market, customer,product,marketing mix

Marketer Challenger

1. Market challenger Strategies: -challenge the leader with an aggressive bid for more market share -Second mover Advantage: challenger observes what has made the leader successful and improves on it. It may launch full frontal attach, matching the competitors product, advertising, pricing, etc and attacks their strengths instead of their weaknesses. -play along with competitors don't rock the boat (ex: Kmart launched "blue light special" campaign against walmart but walmart easily beat them -copy or improve on leaders products and programs with less investment -bring distinctive advantages -must keep prices low or quality and service high

Other Pricing Considerations

1. Marketing Mix a. Target Costing: pricing that starts with ideal selling price and then targets costs that will ensure that the price is met 2. Organizational considerations: must decide who within the organization will set the prices a. small companies= top management sets price b. large companies= divisional or product line managers, pricing departments, or sales people set prices 3. The Market and Demand a. Pure competition: many buyers and sellers, non with an effect on the market b. monopolistic competition: several buyers and sellers, price differentiation c. Oligopolistic competition: a few sellers who are sensitive to the other sellers' pricing d. Pure monopoly" one seller, controls price, often regulated 4. The economy a. Market Recession: lower prices b. Market expansion:

Types of wholesalers

1. Merchant Wholesalers: -largers group of wholesalers includes; a. full service wholesalers: provide full set of services b.limited service wholesalers: few services and specialized functions 2. Brokers and agents: a. Brokers: bring buyers and sellers together and assist in negotiations b. agents: represent buyers or sellers 3. Manufacturers' sales branches and offices: wholesaling by sellers or buyers themselves rather than through independent wholesalers

Brand Sponsorship

1. National Brands/Manufacturers Brands: set output under their own brand names 2. Private Name/store brand: sell products to reseller who give product a private name 3, Licensed Brand 4. Co-brand: when two companies join forces to create one brand

Retailing trends - New retailing forms - The Wheel of Retailing - Megaretailers - Direct and online - Retail technology - Green retailing

1. New Retailing forms 2. The Wheel of Retailing:states that many new types of retailing forms begin as low margin, low price, low status operating, and challenge established retailers. As they succeed they upgrade their facilities and offer more services and increasing their price. 3.Megaretailers: involves rise of mass merchandisers and specialty superstores, formation of vertical marketing systems. Have superior information systems, buying power, and large selection 4. Direct and Online: shoppers have much more availability to shop online 5. Retail Technology: provides better forecasts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems, and ability to connect with customers 6. Green retailing: stores are have greener store designs, contraction, operation, product assortment, recycling made easier, and greener packaging and distribution

Developing and Advertising Programs Other Advertising Considerations

1. Organizing for advertising a. Agency: largest U.S agency is BBDO Worldwide b. In-house= might include departments, advertising departments 2. International Advertising Decisions a. Standardization: face many challenges adapting the advertising to the culture, with the increased popularity of online social networks and video sharing boosted need for advertising standardization. Produces many benefits include lower advertising costs, greater global advertising coordination, and more consistent worldwide image. Drawbacks include the fact that country markets differ greatly in their culture, demographics, and economic conditions

Basic Competitive Strategies (Michael Porters)

1. Overal Cost Leadership: a company achieves the lowest product and distribution costs and allows it to lower its prices and gain market share 2. Differentiation: company concentrates on creating a highly differentiated product line and marketing program so it comes across as an industry class leader 3. Focus: company focuses its efforts on serving a few market segments well rather than going after the whole market 4. Middle of the Road: companies with out a clear strategy would not succeed

New-Product Pricing Strategies

1. Price Skimming: pricing strategy in which a marketer sets a relatively high price for a product or service at first, and then lowers the price over time -products image and quality must support its higher price, demand must be high enough 2. Market-Penetration Pricing: Pricing strategy of setting a low initial entry price for a new product in order to attract a large number of buyers and a large market share -conditions must be met: market is highly price sensitive,production and distribution costs must decrease as sales volume increases, low price must help keep out competition, penetration pricer must maintain its low-price position

Product Mix Pricing

1. Product Line Pricing: management must determine the price steps to set between the various product in a line 2. Optional Product Pricing: offering to sell optional or accessory products along with the main product 3. Captive Product Pricing: companies that make products that must be used along with the main product. ex: razer blades, video games, printer cartridges 4. By-Product Pricing: setting a price for by-products in order to make the main product's price more competitive ex: animal poo at the Zoo can be excellent source of extra revenue but turning it into compost and sells it 5. Product Bundle Pricing: sellers combine several products and offer bundle at a reduced price ex: big mac bundle

Shaping the Overall Promotion Mix-Promotion Mix Strategies

1. Push Strategy: involves "pushing" the product though marketing channels to final consumers. The produced directs its marketing activities toward channel members to induce them to carry the product and promote to final consumers. ex: John Deere does very little advertising and instead sells the product to Lowe's, Home Depot, etc and they push their products to consumers 2. Pull Strategy: producer directs its marketing actives toward final consumers to induce them to buy the product. ex: Unilever promotes its Axe grooming products to its young male target market using TV ads, print ads, and a brand website. If strategy is successful then consumers will go to retailers to buy the product. -Business-to-consumers companies usually pull more, putting more of their funds into advertising, following by sales promotion, personal selling, then PR -Business-to-Business marketers tend to push more, putting more of their funds into personal selling

Evaluating Salespeople and Sales Force Performance

1. Sales Reports 2. Call Reports 3. Expense Reports

Major Sales Promotion Tools and Consumer Tools

1. Samples: most effective and most expensive 2. Coupons:promote early trial of a new brand or stimulate sales, however they are issuing few coupons and targeting them more carefully 3. Rebates: price reduction occurs after the purchase 4. Price Packs: also called " cents-off deals", offer consumers savings off the regular price of a product, are even more effective than coupons in stimulating short-term sales 5. Premiums: goods offered for free or at a low price 6. Advertising Specialties: usually articles imprinted with the advertising name, logo, or message that are given as gifts to consumers 7. Point-of-Purchase Promotions: include displays and demonstrations that take place at the point of sales 8. Contests: contests requires an entry by each consumer 9.Sweepstakes:require consumers submit their names for a drawing 10.Games: present consumers with something that may or may not help them with a prize 11. Event Marketing: links events and sponsorships to a brands value proposition 12. Discount 13. Allowance: percent off each case in return for the retailers agreement to feature the manufacturer's products in some way 14. Free Goods: extra cases of merchandise to resellers who buy a certain quantity or feature certain flavor or size 15. Specialty Advertising: manufacturers may give retailers specialty advertising items that carry the company's name such as pens, calendars, memos pads, etc 16. Conventions and Trade Shows: effective to reach many customers not reached with regular sales force 17. Sales Contests: effective in motivating salespeople or dealers to increase performance over a given period of time

Types of retailers

1. Service a. self-service: serve customers willing to perform on their own b. limited service: provide a little more sales assistance because they care more shopping goods c. Full-service: assist customers in every phase of shopping 2. Product Line a.specialty store: carries narrow product line with deep assortment within that line b. Department store: wide variety of product lines c.Convenience stores: limited line of high-turnover goods d. Superstores: food and non-food goods e. Category Killer: giant specialty store that carries deep assortment of a particular line 3. Types of retailers relative prices a. discount stores b.off-price retailers c.factory outlets d.warehouse clubs 4. Types of retailers organizational approach a. corporate chains: two or more outlets that are commonly owned and controlled b.voluntary chains: whole-sale sponsored groups of independent retailers that engage in group buying and common merchandising c. retailers cooperatives: independent retailers that band together to set up a joint-owned, central wholesale operation and conduct join merchandising and promotion d.franchise organizations e. merchandising conglomerates

The characteristics of a service

1. Service Intangibility: service can't be seen, tasted, felt, heard, or smelled before they're bought 2. Service Inseperability: service can't separated from its providers 3. Service Variability: quality of the services depends on who provides them as well as when and how they are provided 4. Service Perishability: services can't be stored for later use or sale

Creating the Advertising Message: execution styles

1. Slice of Life: style shoes one more "typical" people using the product in a normal setting (coffee) 2. Lifestyle: style shows how a product fits in with a particular lifestyle (yoga pose) 3. Fantasy: style creates a fantasy around the product 4. Mood or Image: style builds a mood or image around the product or service, such as beauty,love, intrigue, or serenity 5. Musical: style shows people or cartoon characters singing about the product 6. Personality symbol: style creates a character that represents the product (ex: Flo, Mr. Clean) 7.Technical expertise: this style shows the company's expertise in making the product 8.Scientific Evidence: style presents survey or scientific evidence that the brand is better or better liked (ex: crest) 9. Testimonial Evidence or Endorsement: style features a highly believable or likable source endorsing the product

Setting the Advertising Budget: Factors

1. Stage in product life cycle: new products =more money 2. Market Share: building or taking market share from competitors requires more money. Low-share brands usually need more advertising spending as a percentage of their sales. 3. Competition: more competition= more money on advertising -so many factors effect advertising effectiveness= advertising is usually easiest budget item to cut but that doesn't actually harm sales in the short run

Brand Name selection

1. Suggests something about products benefits and qualities (lean cuisine) 2. Easy to pronounce (tide, jelly belly) 3. Distinctive (panera) 4. Extendable (going into other markets, abroad, ex: amazon)

Designing the Sales Force Structure

1. Territorial Sales force structure: if they only sell one product line to one industry with customers in many locations 2. product sales force structure:sells many products to many types of customers 3. customer sales force structure: Same situation as two 4. complex sales force structure: might need a combination

Selecting Target Market Segments

1. Undifferentitated Marketing: strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. Hard to find a product that appeals to all customers. 2. Differentiated Marketing: strategy which a firm decides to target several market segments and designs separate offers for each (ex: many different types of laundry detergent but can also by many different kinds of tide). Becomes very costly 3. Concentrated Marketing: market-strategy which a firm goes after a large share of one or a few segments or niches ex: whole foods 4. Micromarketing: tailoring products and marketing programs to suit the tastes of specific individuals and locations a. Local marketing: tailoring products to the needs and wants of local customer groups-cities, neighborhoods, and even specific stores b.individual marketing: tailoring products to the needs and preferences of individual customers (Nikes ID program shoes)

Supply Chains and the Value Delivery Network

1. Upstream Partners: Include raw material,component parts, information, finances, and expertise to create a product a service 2. Downstream Partners: include the marketing channel or distribution channels that look toward the customer, including retailers and wholesalers 3. Supply Chain: "make and sell" view includes the firms raw materials, productive inputs, and factory capacity 4. Demand Chain: "Sense and respond" view suggests that planning starts with the needs of the target customers, and the firm responds to these needs by organizing a chain of resources and activities with the goal of creating customer value 5. Value delivery network: the firms suppliers, distributors, and customers who partner with each other to improve the performance of the entire system

Major Logistic Functions

1. Warehousing: how many, what types of warehouses it needs, where they need to be located, whether to use warehouses or distribution centers (designed to move goods rather than just store) 2. Inventory Management: just-in-time systems (carry only small inventories for a few days), RFID (know at anytime where a product is located), Smart Shelves (not only tell when its time to order but automatically order) 3.Transportation: affects the pricing of the products, delivery performance, condition of the goods when they arrive 4. Logistics information management: management of the flow of information including customer orders, billing, inventory levels, and customer data a. EDI: electronic data inerchange b. VMI: vendor-managed inventory

assessing market potential: three basic criteria

1. current size of the segment and anticipated growth potential 2. potential competition 3. compatibility with company's overall objectives and the feasibility of successfully reaching the target audience

Price Adjustment Strategies

1. discount and allowance pricing: Discounts: a. Cash discount: price reduction to buyers who pay their bills promptly b. quantity discount: given to people who buy in bulk c. functional discount/trade discount: manufacturer reduces the retail price of a product when it sells to a reseller d. Seasonal discount: price reduction to buyers who buy products out of season Allowances: promotional money paid by manufacturers to retailers who agree to feature the product in some way a. Trade-In allowances: price reduction given for turning in an old item when buying a new one 2. Segmented Pricing: selling a product or service at two or more prices a. Customer-segment: Different customers pay different prices (ex: senior citizens at movies) b. Product-Form Pricing: different versions of the product are priced differently (ex: airline tickets for seats) c. Location-based pricing: company charges different prices for different locations (ex: public universities charge out-of -state people more money) d. Time-based pricing: firm varies its price by season 3. Psychological Pricing: prices that considers the psychology of prices and not simply the economics a. reference pricing: prices that buyers carry in their minds and refer to when they look at a given product 4. Promotional Pricing: temporary pricing products below the list price, and sometimes even blow cost,to increase short-run sales -to create buying excitement and urgency 5. Geographical Pricing: setting prices for customers located in different parts of the country or world 6. Dynamic Pricing: adjusting prices continually to meet the characteristics and needs of individual customers and situations (ex: online shopping) 7. International Pricing: companies that market their product internationally must decide what prices to charge in different countries

Describing a Competitive Intelligence System

1. identifies competitive information and the best sources of this information 2. continually collects information 3.checks information for validity and reliability 4. interprets information 5. organizes information 6. sends key information to relevant decision makers ("in house expert: smaller companies that can't afford set up formal competitive intelligence offices can assign specific executives to watch particular competitors) 7.responds to inquires about competitors

steps in the research process

1. identify the information requirement: what and why do I need this 2. define the problem 3. choose a unit to analyze (region): global, country, province, state, city 4. examine readily available data: company records, trade journals 5. assess value of research: worth vs. cost 6. research design, how are you going to collect the data and how will it be measured: consumer panels, observations, focus groups... Likert scale, scalar equivalence 7. analyze the data 8. interpret the data and present

3 political strategies to formulate & implement responses to political risk

1. relative bargaining power analysis 2. integrative, protective, and defensive techniques 3. proactive political strategies

working with intermediaries

1. select distributors 2. look for ones capable of developing markets rather than those with a few good customer contacts 3. treat local distributors as long term partners 4. support market for entry with commitment 5. control the marketing strategy 6. ensure distributors provide detailed market and financial performance data 7. build links among national distributors

Major Advertising Decisions

1. setting advertising objectives 2. setting the budget 3. developing advertising strategy (message decisions and media decisions) 4. evaluate advertising campaigns

porters five forces on competition

1. threat of new entrants 2. threat of substitute products 3. bargaining power of buyers 4. bargaining power of suppliers 5. rivalry among competitors

Benefits of Direct Marketing to Sellers

1. tool to build customer relationships 2. low cost, efficient, fast alternative to reach markets 3. flexible 4. access to buyers not reachable through other channels

Vertical and Horizontal channels

1. vertical marketing systems: channel structure which producers, wholesalers, and retailers act as a unified system, one channel member owns the others a. Corporate Vertical marketing systems: integrates successive stages of production and distribution under single ownership b. contractual marketing systems: consists of independent firms at different levels of production and distribution join together through contracts c. Administered Marketing System: coordinates stages of production and distribution through the size and power of one of the parties 2. Horizontal channel: two or more companies at one level join together to follow a new marketing opportunity

franchising questions

1. will local consumers buy your product 2. how tough is the local competition 3. can your profits be easily repatriated 4. can you buy all the supplies you need locally 5. is commercial space available and are rents affordable 6. are your local partners financially sound and do they understand the basics of franchising

Forms of Direct Marketing

1.Personal Selling direct marketing 2. Direct-mail direct marketing 3. catalog direct marketing 4. telephone marketing 5. direct-response TV marketing 6. Kiosk Marketing 7. Digital direct marketing 8. online marketing

Setting the Total Promotion Budget and Mix -Percentage of Sales Method

2. Percentage of Sales Method: sets the budget at a certain percentage of current or forecasted sales or unit sales price, easy to use and helps management think about the relationship between promotion, selling price, and profit per unit, however it wrongly views sales as the cause of the promotion rather than as the result, long-range planning difficult, and no method for picking specific percentage just picked whats done in the past

manufacturer's export agent

A _____ provides a selling service for a manufacturer, has a short-term relationship, and operates on a straight commission basis.

no direct foreign marketing

A company in this stage does not actively cultivate customers outside national boundaries; however, this company's products may reach foreign markets.

Monroe Doctrine

A cornerstone of US foreign policy as enunciated by president James Monroe, it proclaimed three basic dicta: no further European colonization in the New World, abstention of the United States from European political affairs, and non-intervention of European governments of the western hemisphere.

the limited control over the distribution process

A disadvantage when using home-country middlemen as intermediaries in the distribution process is:

Tariff

A fee or tax that countries impose on imported goods, often to protect a country's markets from intrusion from foreign countries

Global Awareness

A frame of references, important to the success of a businessperson, that embodies tolerance of cultural differences and knowledge of cultures, history, world market potential, and global economic, social, and political trends

International Monetary Fund (IMF)

A global institution that along with the world ban group, was created to assist nations in becoming and remaining economically viable

Code Law

A legal system based on an all inclusive system of written rules, or codes, of law; generally divided into three separate codes: commercial, civil, and criminal. In the United States, Louisiana is the one state to use code law.

export management companies

A major disadvantage of _____ is that they can seldom afford to make the kind of market investment needed to establish deep distribution for products.

Conciliation

A nonbinding agreement between parties to resolve disputed by asking a third party to mediate differences. Also known as mediation

Arbitration

A procedure, used as an alternative to litigation, in which parties may select a disinterested third party or parties as referee to determine the merits of the case and make a judgment that both parties agree to honor

Domestication

A process by which a host country gradually transfers foreign investments to national control and ownership through a series of government decrees mandating local ownership and greater national involvement in company management

False

A proper encoding system allows a company to correct errors before substantial damage occurs.

True

A reason for the failure of marketing communications is that the message received by the intended audience is not understood because of different cultural interpretations.

Polychronic Time (P-Time)

A view of time, as held in "high-context" cultures in which the completion of human transaction is more important than holding to schedules. P-Time is characterized by the simultaneous occurrence of many things

Complex Sales Force Structure:

A wide variety of products is sold to many types of customers over a broad geographic area and combines several types of sales force structures

foreign sales corporation

A(n) _____ is a domestic middleman set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property.

manufacturer's export agent

A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that covers only one or two markets.

________ in countries can distort media choice by changing the cost ratios of various media.

A. Advertising taxation

Cremics, a multinational drug manufacturing company, used a saffron trident in a promotional campaign for one of their drugs in India. The saffron trident, a religious symbol in India was meant to indicate the three levels of efficacy of the drug, but mistakenly conveyed a religious message to Indians. This miscommunication indicates a problem associated with which of the following steps of an international communications process?

A. Encoding

Janet works for a media agency based in Japan. Janet is helping the IMC manager of Siljure, a French cosmetics company, with the design and language to be used in an upcoming promotional campaign in Japan. The IMC manager knows what to convey but wants to advertise it in a culturally relevant manner. Which step of the IMC process is Janet helping Siljure with?

A. Encoding of the message

Janet works for a media agency based in Japan. Janet is helping the integrated marketing communications (IMC) manager of Siljure, a French cosmetics company, with the design and content to be used in an upcoming promotional campaign in Japan. The IMC manager knows what to convey but wants to advertise it in a culturally relevant manner. Which step of the international communications process is Janet helping Siljure with? A. Encoding of the message B. Choosing an appropriate channel for the message C. Decoding of the message D. Providing feedback from customers E. Reducing noise from competing ad campaigns

A. Encoding of the message

Janet works for a media agency based in Japan. Janet is helping the integrated marketing communications (IMC) manager of Siljure, a French cosmetics company, with the design and content to be used in an upcoming promotional campaign in Japan. The IMC manager knows what to convey but wants to advertise it in a culturally relevant manner. Which step of the international communications process is Janet helping Siljure with? A. Encoding of the message B. Choosing an appropriate channel for the message C. Decoding of the message D. Providing feedback from customers E. Reducing noise from competing ad campaigns

A. Encoding of the message

Meta Garbon, a manufacturer of sports bicycles, in a bid to tap the enormous market for bicycles in China promote their cycles as premium sporting and leisure bicycles. They use various cycling legends and sports celebrities as brand ambassadors and use television, radio, and newspapers as media. Bicycles in China are used mainly by the working class for commutation, and the main users of bicycles did not relate to Meta Garbon's products, and the promotional campaign was a failure. During which of the following steps of the international communications process did Meta Garbon most likely go wrong? A. Information source selection B. Selection of message channel C. Encoding D. Decoding E. Noise cancellation

A. Information source selection

Meta Garbon, a manufacturer of sports bicycles, in a bid to tap the enormous market for bicycles in China promote their cycles as premium sporting and leisure bicycles. They use various cycling legends and sports celebrities as brand ambassadors and use television, radio, and newspapers as media. Bicycles in China are used mainly by the working class for commutation, and the main users of bicycles did not relate to Meta Garbon's products, and the promotional campaign was a failure. During which of the following steps of the international communications process did Meta Garbon most likely go wrong? A. Information source selection B. Selection of message channel C. Encoding D. Decoding E. Noise cancellation

A. Information source selection

Which of the following elements of integrated marketing communications is related to encouraging the press to cover positive stories about companies and managing unfavorable rumors, stories, and events?

A. Public relations

Which of the following elements of integrated marketing communications is related to encouraging the press to cover positive stories about companies and managing unfavorable rumors, stories, and events? A. Public relations B. Direct selling C. Trade shows D. Personal selling E. Sales promotion

A. Public relations A public relations job consists of not only encouraging the press to cover positive stories about companies but also managing unfavorable rumors, stories, and events.

_____ are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase.

A. Sales promotion

The Webb-Pomerene Act of 1918 made it possible for American business firms to join forces in export activities without being subject to the _____. A. Sherman Antitrust Act B. Federal Communications Act C. Trade Commission Act D. Food, Drug, and Cosmetics Act E. Robinson-Patman Act

A. Sherman Antitrust Act

Which of the following is an example of the primary function of a product? A. The ability of a camera to take a picture B. The design and form factor of a phone C. The color of a laptop D. The prestige associated with driving a car E. The shape of speakers

A. The ability of a camera to take a picture A market offering really is a bundle of satisfactions the buyer receives. This package of satisfactions, or utilities, includes the primary function of the product or service, along with many other benefits imputed by the values and customs of the culture.

Which of the following is true of advertising agencies for international advertising? A. The cross-cultural communication between a foreign client and a local agency can be problematic. B. A multinational agency always has the best feel for a market. C. Only a multinational agency can provide the best cultural interpretation in a situation in which local modification is required. D. Only a local domestic agency can provide a company with a high level of sophistication. E. Agency commission patterns are consistent throughout the world.

A. The cross-cultural communication between a foreign client and a local agency can be problematic.

Which of the following statements is true of sales promotions? A. They are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation. B. C. They are long-term efforts directed to a manufacturer or supplier. D. They primarily involve activities that encourage the press to cover positive stories about companies. E. They are ineffective in markets where consumers are hard to reach. F. They are the only element of the marketing mix that are affected by cultural differences among country markets.

A. They are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

Due to differences in culture in different markets, standardized products that are marketed globally will most likely require: A. a different advertising appeal. B. a different primary function. C. consistent promotional messages. D. a standardized marketing strategy. E. standardized secondary attributes.

A. a different advertising appeal.

Due to differences in culture in different markets, standardized products that are marketed globally will most likely require: A. a different advertising appeal. B. a different primary function. C. consistent promotional messages. D. a standardized marketing strategy. E. standardized secondary attributes.

A. a different advertising appeal. In many cases, standardized products may be marketed globally. But because of differences in cultures, they still require a different advertising appeal in different markets.

Sales promotions are short-term efforts directed to the consumer or retailer to achieve specific objectives such as: A. consumer product trial or immediate purchase. B. reducing promotional expenses. C. discouraging stores to stock a product. D. eliminating the need for retail point-of-purchase displays. E. long-term performance of a product.

A. consumer product trial or immediate purchase. Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase, consumer introduction to the store or brand, gaining retail point-of-purchase displays, encouraging stores to stock the product, and supporting and augmenting advertising and personal sales efforts.

Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the _____ of television commercials permitted when their programs are classified as advertisements. A. length and number B. religious content C. subliminal messaging D. superlative description E. ethnic derision

A. length and number

Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the _____ of television commercials permitted when their programs are classified as advertisements. A. length and number B. religious content C. subliminal messaging D. superlative description E. ethnic derision

A. length and number

When choosing a pricing strategy, marketers must consider the foundational elements of costs, potential demand, and competition. Many factors can affect these elements. Fill in the blanks with the word or phrase from the drop-down list that best completes the passage. The relationship between price and demand _______ overtime. Some companies choose to sell a product below its production price. This strategy is ________. Competition _______ affects a firm's pricing strategy more than cost.

A. varies B. unsustainable C. sometimes

Steps in Developing Effective Marketing Communication- Designing a Message

AIDA MODEL 1. Get Attention 2. Hold Interest 3. Arouse Desire 4. Obtain Action

Franchises stress the local origin of the products they sell, the local labor they employ, and their stature as local citizens. They even make fun of their U.S. origins to appeal to the local consumers.

According to International Marketing Illustration 8-1: Successful U.S. Franchises in a Hostile World (p. 246), what can the survival of U.S. franchises in countries that are hostile to the United States be attributed to?

1. China 2. Italy

According to Table 9-1 in your book (p. 278), what country has the most ISO 9001 certifications? According to Table 9-2, which world region has the most ISO 9001 certifications? Which world region is second in number of ISO 9001 certifications?

40%

According to the "Television in India" vignette on page 291, what percent of U.S. households have a television set? What percent of Indian households have a television set? Accordingly, what stage of the life cycle is the U.S. television market considered to be in? What stage is India considered to be in?

B

According to the text, what international organization often uses advocacy advertising A. McDonald's B. Benetton C. Visa D. Adidas

High service quality On-time shipment Adequate product availability Quality sales force Enough sales effort and sales support Quality of promotion Amount of promotion

According to your book, what seven factors determine, in order, an international product's "goodness of launch"?

false

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

Voluntary Export Restraints (VERs)

Agreements, similar to quotas, between an importing country and an exporting country for a restriction on the volume of exports.

Which of the following is an example of comparative advertising?

An ad showing a dog choosing one brand of dog food over another

Which of the following is an example of comparative advertising?

An ad showing a dog choosing one brand of dog food over another.

Sustainable Development

An approach toward economic growth that has been described as a cooperative effort among businesses, environmentalists, another to seek growth with "wise resource management, equitable distribution of benefits, and reduction of negative efforts on people and the environment form the process of economic growth"

Cultural Sensitivity

An awareness of the nuances of culture so that a culture can be viewed objectively, evaluated, and appreciated; an important part of foreign marketing

True

An e-vendor in a foreign market can generally ignore culture as an important variable because the commerce is being done via the Internet that is culturally insensitive.

product sampling

An especially effective promotional tool when a product concept is new or has a very small market share is known as _____.

James Barker is the marketing manager of a firm with small international sales volume. He is looking for a middleman who can take responsibility for promotion of the company's products, credit arrangements, physical handling, and market research. Also, the middleman must be able to provide information on financial, patent, and licensing matters. In addition, the middleman should agree to work under the name of the firm. Which of the following types of middlemen would be the best choice for Mr. Barker if he wants to meet his objectives?

An export management company

Roosevelt Corollary

An extension of the US policy applied to the Monroe Doctrine by President Theodore Roosevelt, stating that the United States would not only prohibit non-American intervention in Latin American affairs but would also police Latin America and guarantee that all Latin Americans would meet their international obligations

Nationalism

An intense feeling of national pride and unity; an awakening of a nation's people to pride in their county. Nationalism can take on anti foreign business bias

Self-Reference Criterion (SRC)

An unconscious reference to one's own cultural values, experiences, and knowledge as a basis for a decision

Parallel Importing

Apex Corporation is a wholesaler for Global Electronics in the French market. Global Electronics discovered that Apex Corp. was diverting some of their goods to the English market. Apex Corp. could get a greater profit in the English market because the goods were bought by the firm at a cheaper price in France. In the context of the above scenario, which of the following forms of business is Apex engaged in?

Designed Effective Websites

Attract visitors companies must: 1. promote an offline promotion and online link 2. create value and excitement 3. constantly update the site 4. make the site useful

Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period. This is an example of problems associated with which of the following six Cs of distribution channel strategy? A. Character B. Continuity C. Control D. Cost E. Capital requirement

B. Continuity Channels of distribution often pose longevity problems. Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period.

In the context of consumer products, which of the following is the major limitation of the Internet? A. Knowledge of how to use the Internet B. Coverage of the Internet C. Government regulations on the use of the Internet D. Difficulty in tracking the effectiveness of advertisements on the Internet E. Cost of using the Internet

B. Coverage of the Internet

Which of the following modes of distribution affords the most control over the distribution channels but often at a cost that is not practical? A. Complementary marketers B. Direct sales force C. Export associations D. Trading companies E. Export management companies

B. Direct sales force

In the context of international advertising, _____ is the neon capital of the world.

B. Hong Kong

In the context of international advertising, _____ is the neon capital of the world. A. Paris B. Hong Kong C. London D. Sydney E. Brasília

B. Hong Kong

Which of the following is true of the newspaper industry around the world? A. In many countries, newspapers hardly have any trouble achieving complete market coverage. B. Most U.S. cities have just one or two major daily newspapers. C. In many countries, advertisements can be run in a newspaper without any time lag. D. Since there is an indication that the space for advertising is paid for, it is easy to tell exactly how much advertising appears in a given newspaper. E. Japan has more than 15 national daily newspapers, but the circulation numbers are the lowest.

B. Most U.S. cities have just one or two major daily newspapers.

_____ allows ESPN to fill visual real estate—blank walls, streets, stadium sidings—with computer-generated visuals that look like they belong in the scene.

B. Princeton Video Imaging

_____ allows ESPN to fill visual real estate—blank walls, streets, stadium sidings—with computer-generated visuals that look like they belong in the scene. A. Self-extracting archive B. Princeton Video Imaging C. High Definition Television D. HighMAT (High Performance Media Access Technologies) E. Conditional Access System

B. Princeton Video Imaging

_____ are considered to be major communications media in most countries due to their inherent entertainment value. A. Newspapers and magazines B. Radio and television C. Newspapers and billboards D. Billboards and television E. Radio and newspapers

B. Radio and television

In-store demonstrations, samples, coupons, contests, and sweepstakes are examples of _____ devices.

B. Sales promotions

Which of the following statements about advertising laws around the world is correct? A. Advertising of pharmaceuticals is unrestricted in most countries. B. Toy, tobacco, and liquor advertising is restricted in numerous countries. C. Advertising on television is unregulated in most countries. D. The Internet is the only medium where no restrictions exist in any country. E. Television ads are exempted from tax in all countries.

B. Toy, tobacco, and liquor advertising is restricted in numerous countries.

One of the reasons for the notably low use of foreign national consumer magazines by international advertisers is that:

B. few magazines provide reliable circulation data.

In the international communications process, an international marketing executive with a product message to communicate specifically acts as a(n) _____. A. decoder B. information source C. receiver D. encoder E. noise source

B. information source

In Spain, a new medium for advertising called Publicoche includes: A. lasers projected onto clouds. B. private cars that are painted with advertisements. C. buses fitted with television sets showing promotional messages. D. financing of popular sporting and entertainment events. E. hot air balloons printed with promotional messages.

B. private cars that are painted with advertisements.

In the communications process in advertising, during the _____ stage, a consumer takes certain actions to respond to a decoded message. A. feedback B. receiver C. message channel selection D. encoding E. source identification

B. receiver

A major goal of the Export Trading Company (ETC) Act was to: A. allow U.S. companies to bypass tax laws with respect to international trading. B. remove antitrust disincentives to export activities. C. bypass trade barriers in foreign countries. D. earn the highest possible profits in foreign countries. E. combine export shipments within single containers.

B. remove antitrust disincentives to export activities. The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies. A major goal of the ETC Act was to increase U.S. exports by encouraging more efficient export trade services to producers and suppliers to improve the availability of trade finance and to remove antitrust disincentives to export activities

In-store demonstrations, samples, coupons, contests, and sweepstakes are examples of _____ devices. A. personal selling B. sales promotions C. content marketing D. direct selling E. public relations

B. sales promotions Cents-off, in-store demonstrations, samples, coupons, gifts, product tie-ins, contests, sweepstakes, sponsorship of special events such as concerts, the Olympics, fairs, and point-of-purchase displays are types of sales promotion devices.

Direct mail is an unpopular medium in Chile because:

B. the letter carrier must collect additional postage for every item delivered.

Direct mail is an unpopular medium in Chile because: A. the literacy level in Chile is extremely low. B. the letter carrier must collect additional postage for every item delivered. C. it uses paper; hence, it is considered as a threat to the environment. D. its reach is extremely limited. E. it is subject to complicated government regulations.

B. the letter carrier must collect additional postage for every item delivered. In Chile, direct mail is virtually eliminated as an effective medium because the sender pays only part of the mailing fee; the letter carrier must collect additional postage for every item delivered. Obviously, advertisers cannot afford to alienate customers by forcing them to pay for unsolicited advertisements.

For companies seeking entrance into the complicated Japanese distribution system, _____ offer one of the easiest routes to success because they virtually control distribution through all levels of channels in Japan. A. trade representatives B. trading companies C. brokers D. export management companies E. complementary marketers

B. trading companies The omnipresent trading companies virtually control distribution through all levels of channels in Japan. Because trading companies may control many of the distributors and maintain broad distribution channels, they provide the best means for intensive coverage of the market.

false

Buying offices are located in the target market country and carry title to the product.

For most companies, which of the following are the major components in the marketing communications mix?

C. Advertising and personal selling

_____ are the major components in the marketing communications mix for most companies. A. Public relations and advertising B. Direct selling and trade shows C. Advertising and personal selling D. Public relations and sales promotions E. Direct selling and sales promotions

C. Advertising and personal selling

Which of the following is an example of comparative advertising? A. An ad using a scantily clad model to promote a soft drink B. An ad showing a celebrity smoking his preferred brand of cigarettes C. An ad showing a dog choosing one brand of dog food over another D. An ad showing the superiority of synthetic materials used in its products as compared to cotton E. An ad using shocking or taboo material to promote a product

C. An ad showing a dog choosing one brand of dog food over another

Which of the following is an example of comparative advertising?

C. An ad showing a dog choosing one brand of dog food over another.

_____ in advertising is a thorny issue, because most member countries of the European Commission have different interpretations of what constitutes a misleading advertisement. A. Discrimination B. Endorsement C. Deception D. Plagiarism E. Fear mongering

C. Deception

_____ in advertising is a thorny issue, because most member countries of the European Commission have different interpretations of what constitutes a misleading advertisement. A. Discrimination B. Endorsement C. Deception D. Plagiarism E. Fear mongering

C. Deception

In the international communications process, _____ is defined as the interpretation by the receiver of the symbolism transmitted from the information source.

C. Decoding

In the context of integrated marketing communications, which of the following best defines public relations? A. It is the usage of funds collected from the common public for manufacturing a product in the inaccessible regions of a market. B. It is the direct sale of goods at discount rates to the public at trade fairs. C. It the creation of good relationships with popular press to help communicate messages to their customers, the general public, and governmental regulators. D. It is the distribution of samples and coupons directly to the public in the inaccessible regions of a market. E. It is the sale of goods to the public based on their credit ratings.

C. It the creation of good relationships with popular press to help communicate messages to their customers, the general public, and governmental regulators. Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of public relations.

With reference to the communication process in advertising, using the Internet as a medium when only a small percentage of an intended market has access to it, is an example of an error related to:

C. Message channel selection

Which of the following countries has the most egregious control over advertising, where each medium has its own censorship board that passes judgment on any advertising even before it is submitted for approval by the Ministry of Information. A. Germany B. France C. Myanmar D. Australia E. Argentina

C. Myanmar

Which of the following countries has the most egregious control over advertising, where each medium has its own censorship board that passes judgment on any advertising even before it is submitted for approval by the Ministry of Information. A. Germany B. France C. Myanmar D. Australia E. Argentina

C. Myanmar

An especially effective promotional tool when a product concept is new or has a very small market share is known as _____.

C. Product Sampling

Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of _____.

C. Public relations

Certain advertising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent in:

C. Radio and television broadcasting

_____ might be classified as an aspect of sales promotions or public relations, though their connections to advertising are also manifest.

C. Road Shows

The assault on advertising of _____ is escalating internationally, as evidenced by the World Health Organization launching a global campaign against it.

C. Tobacco

In the context of media planning and analysis, billboards are especially useful in countries:

C. With high illiteracy rates

In the context of the communication process in advertising, using the Internet as a medium when only a small percentage of an intended market has access to it is an example of an error related to: A. feedback. B. decoding. C. message channel selection. D. encoding. E. message selection.

C. message channel selection.

In the context of the communication process in advertising, using the Internet as a medium when only a small percentage of an intended market has access to it is an example of an error related to: A. feedback. B. decoding. C. message channel selection. D. encoding. E. message selection.

C. message channel selection.

An especially effective promotional tool when a product concept is new or has a very small market share is _____. A. sponsorship B. sweepstakes C. product sampling D. contests E. product tie-ins

C. product sampling An especially effective promotional tool when the product concept is new or has a very small market share is product sampling.

Certain advertising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent in: A. the Internet forums. B. personal selling initiatives. C. radio and television broadcasting. D. trade shows and exhibitions. E. direct selling and sales prootions.

C. radio and television broadcasting.

Certain advertising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent in: A. the Internet forums. B. personal selling initiatives. C. radio and television broadcasting. D. trade shows and exhibitions. E. direct selling and sales promotions.

C. radio and television broadcasting.

In the context of international advertising, companies are moving from the commission system to a _____ system. A. tactical B. standardized C. reward-by-results D. self-regulation E. business-to-business

C. reward-by-results

The assault on advertising of _____ is escalating, as evidenced by the World Health Organization launching a global campaign against it. A. trans fat B. alcohol C. tobacco D. pharmaceuticals E. animal-derived products

C. tobacco

In the context of media planning and analysis, billboards are especially useful in countries: A. with high income levels. B. where the laws governing the Internet are very complicated. C. with high illiteracy rates. D. where sales promotions are ineffective. E. where people prefer buying in small quantities.

C. with high illiteracy rates.

In the context of media planning and analysis, billboards are especially useful in countries: A. with high income levels. B. where the laws governing the Internet are very complicated. C. with high illiteracy rates. D. where sales promotions are ineffective. E. where people prefer buying in small quantities.

C. with high illiteracy rates.

Which of the following is one of the highest costs of doing business in China?

Capital required to maintain effective distribution

Case 8-1

Case 8-1

Which of the following is a critical element associated with using a particular type of middleman?

Cash-flow patterns

radio and television broadcasting

Certain advertising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent in:

Channel organization and design.

Channel Organization 1. Disintermediation: occurs when product or service cuts out intermediaries and go directly to final buyers, or radically new types of channel intermediaries displace traditional ones (ex: southwest and Jetblue sell tickets directly to final buyers cutting out travel agents) 2.Channel Design Decision: a. analyzing consumer needs b. setting channel objectives c. Identify major channel alternatives: types of intermediaries, number of intermediaries, responsibilities of each channel member. 1. Intensive distribution: stocking product in as many outlets as possible 2. Exclusive distribution: giving a limited number of dealers the exclusive right to distribute the company's products 3.selective distribution: use of more than one but fewer than all of the intermediaries who are willing to carry the company's products d. responsibilities of channel members 3. Evaluating the major alternatives: a. needs to be evaluated against; economic criteria, control, and adaptability criteria 4. Designing International Distribution Channels: channel systems must adapt their strategies to the existing structure of that country

Chapter 12

Chapter 12

Chapter 13

Chapter 13

Chapter 14

Chapter 14

Chapter 16

Chapter 16

Chapter 4

Chapter 4

Chapter 5

Chapter 5

Chapter 8

Chapter 8

Chapter 9

Chapter 9

A European chocolate manufacturer received several complaints from customers about the quality of its product when it began selling them in a tropical country. The firm had to re-package its chocolate bars in an extra plastic wrapper to protect it from the heat and dust. Which of the following factors in the local market dictated product adaptation in the current scenario?

Climatic requirements

Communication Effects

Communication Effects: indicate whether the ad and media are communicating the ad message well and can be tested before or after the ad runs (conduct pre and post evaluations)

true

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

d

Companies may choose direct exporting because it allows them to a. monitor retailers b. control suggested sale prices. c. observe the handling of customer complaints. d. all of the above

true

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

true

Companies need to examine the fit between the cost of international involvement, company resources, and market potential.

length and number

Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the _____ of television commercials permitted when their programs are classified as advertisements.

complementary marketing

Companies with marketing facilities in different countries with excess marketing capacity sometimes take on additional product lines for international distribution. The formal name for this type of marketing is:

no direct foreign marketing

Company does NOT send its products overseas directly, but may become available in other countries through intermediaries or middlemen such as trading companies - product reach foreign markets via wholesalers & distributors who sell abroad w/o producer's knowledge - legit sales done through trading companies or direct contact from firm -product popularity through websites

true

Competing companies are allowed to work in consortia in industry sectors where the government can control their monopolistic activity.

Setting the Total Promotion Budget and Mix-Competitive-Parity Method

Competitive-Parity Method: 1. Sets the budget to math competitor outlay, average 2. represents industry standards= argument not valid 3. avoids promotion wars=argument not valid -arguments not valid because there are no grounds for believing that the competition has a better ideas of what a company should be spending on promotion than the company itself

Identify Competitors

Competitors include: -all firms making the same product or class of products -all firms making products that supply same service -all firms competing for same consumer dollars -companies must avoid "competitor myopia": company is more likely to be "buried" by its latent competitors than its current ones Competitors Objectives: company wants to know the importance competitor places on profitability, market share growth, cash flow, technological leadership, and service leadership Competitors Strategies: -Strategic group: group of firms in an industry following the same or similar strategy in a given target market=offers stingiest competition Competitors Strengths and Weeknesses -what can competitors do? -benchmarking: comparing the company's products and processes to those of competitors or leading firms Estimating Competitors Reactions: -what will competitors do?

Shoddy, Harmful, or Unsafe Products

Complaint- products have poor quality, provide little benefit, can be harmful Response: marketers realize this is stupid

Poor Service to Disadvantaged Consumers

Complaint: american marketers serve disadvantaged customers poorly. "redlining": drawing a red line around disadvantaged neighborhoods and avoiding placing stores there. Response: 1. some marketers profitability target these customers and FTC has taken action against marketers tat advertise false values, deny service, or charge disadvantaged customer too much

piggybacking

Complementary marketing is commonly known as _____.

False

Contests, sweepstakes, sponsorship of special events such as concerts are techniques used for maintaining and improving public relations.

marketing Ethics

Corporate Marketing Ethics: are broad guidelines that everyone in the organization must follow that cover distributor relations, advertising standards, customer service, pricing, product development, and general ethical standards

________ might be classified as an aspect of sales promotions or public relations, though their connections to advertising are also manifest.

Corporate sponsorship

Setting up an Online Presence

Creating a website requires designing an attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site

public relations

Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of _____.

Creating the Advertising Message: Creative Concept

Creative Concept: is the idea, "big idea", that will bring the message strategy to life and guide specific appeals to be used in an advertising campaign. At this stage the simple message becomes great ad campaigns. Characteristics of the appeal include: 1. Meaningful: pointing out benefits that make the product more desirable or interesting to consumers 2. Believable: consumers must believe that the product or service will deliver promised benefits 3. Distinctive: tell how the product is better than competing brands

Encoding

Cremics, a multinational drug manufacturing company, used a saffron trident in a promotional campaign for one of their drugs in India. The saffron trident, a religious symbol in India was meant to indicate the three levels of efficacy of the drug, but mistakenly conveyed a religious message to Indians. This miscommunication indicates a problem associated with which of the following steps of an international communications process?

Selecting Competitors to Attack and Avoid

Customer Value Analysis: determines the benefits that target customers' value and how customers rate the relative value of various competitors offers 1. First identifies major attributes that customers value 2. Importance customers place on these attributes 3.assess performance against competitors -Compete against week competitors because easier but may gain little -compete against strong companies to sharpen its abilities -avoid trying to "destroy" a close competitor (ex: market leader Bausch & Lomb moved aggressively against other contact lens companies but forced smaller companies to sell out to larger companies like Johnson & Johnson and in result faced much larger competition) -Good competitors help share costs of market and product develop, help legitimize new technologies, increase total demand -finding uncontested market spaces: create products and services which there are no competitors called a "blue ocean strategy"=make competition irrelevant

Which of the following is one of the highest costs of doing business in China? A. Money required for the transportation of goods B. Money required for obtaining appropriate permits C. Cost of local advertising D. Capital required to maintain effective distribution E. Cost of customizing products for the Chinese market

D. Capital required to maintain effective distribution

In the context of international advertising, it has been observed that advertising expenditures are generally _____.

D. Cyclical

During which step of the international communications process does the receiver of the message interpret symbolism transmitted from the information source?

D. Decoding

During which step of the international communications process does the receiver of the message interpret symbolism transmitted from an information source? A. Selecting a message B. Encoding C. Selecting a message channel D. Decoding E. Identifying the sources of noise

D. Decoding The interpretation by the receiver of the symbolism transmitted from an information source is known as decoding.

In the international communications process, the sales force of a company that conveys the encoded content to the intended receiver acts as a _____.

D. Message channel

Blogs, social networking, and video sharing are examples of media commonly known as _____.

D. Texas Visual Imaging

Of all the elements of the marketing mix, decisions involving _____ are those most often affected by cultural differences among country markets. A. direct selling B. public relations C. trade shows D. advertising E. sales promotion

D. advertising Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

In the context of international advertising, it has been observed that advertising expenditures are generally _____. A. linear B. supplemental C. mutually reinforcing D. cyclical E. constrained

D. cyclical

The only way to avoid linguistic problems in advertising communication is by:

D. in-country testing with the target consumer group.

In the international communications process, the sales force of a company that conveys the encoded content to the intended receiver acts as a(n) _____. A. decoder B. interpreter C. receiver D. message channel E. noise

D. message channel In the international communications process, the sales force and/or advertising media convey the encoded message to the intended receiver and thus it acts as a message channel.

In the context of distribution patterns, the rate of change in retailing around the world appears to be directly related to the _____. A. literacy rate B. rate of inflation C. population growth D. speed of economic development E. currency exchange rate

D. speed of economic development Retailing around the world has been in a state of active ferment for several years and the rate of change appears to be directly related to the stage and speed of economic development, and even the least developed countries are experiencing dramatic changes. Supermarkets of one variety or another are blossoming in developed and underdeveloped countries alike

b

DHL usses hubs that hold products it delivers regularly so it always has them on hand. This is an example of what international distribution and logistics facilitator? a. freight forwarders b. distribution centers c. transportation firms d. government agencies

Autocratic Leadership

Decline in democracies, limit press freedom and weaken the independence of the judiciary

Podcasts and Vodcasts, Interactive TV, Internet

Define (Podcasts/Vodcasts): involve downloading of audio and video files via the internet to a handheld device such as an iPod or PDA and listening to them at the consumers convenience Interactive TV: lets viewers interact with TV programming and advertising using their remote controls and provides marketers with an interactive and involving means to reach targeted audiences Internet: vast public Web of computer networks that connects users of all types around the world to each other and to a large information repository -"Click-only companies: operate on the internet only. -success of dot.coms have causes brick-and-morter manufacturers to reexamine their business to become "Click and Morter Companies" -Benefits: builds deeper more personalized relationships with customers , reduces ordering costs, speeds up ordering -internet influences 48% of sales

Demographic Segmentation

Define: Dividing the market into segments based on age, gender, income, occupation, ethnicity, and religion a. Age and Life Cycle Segmentation: companies offer different products and marketing strategies to meet customers needs and wants as they change with age (ex: jello for kids is playful and jello for adults is low in calorie) b. Income segmentation: Dividing a market into segments based on income level (ex: putting dollar stores in middle/low class areas) c. Gender Segmentation: Dividing a market into segments based gender (ex: axe, women/mens cosmetics)

Customer Sales Force Structure

Define: Each salesperson sells along customer or industry lines. Separate sales forces may be set up for different industries, serving current customers vs. finding new ones. Ex: Whirlpool assigns individual teams of salespeople to big retail customers such as Lowe's, Best Buy, Home Depot -Improves customer relationships

Territorial Sales Force Structure

Define: each salesperson is assigned an exclusive geographic area and sells the company's full line of products and services to all customers in that territory -Organization clearly defines each salesperson's job and fixes accountability -Increases the salesperson desire to build local customer relationships that in turn will improve selling effectiveness -travel expenses are small because travel limited geographic area -improves relationship building (talk to managers) and selling effectiveness

Prospecting

Define: identifies qualified potential customers through referrals from: -customers -suppliers -dealers -internet -last resort= "cold calling"which is dropping in unannounced

Qualifying

Define: identifying good customers and screening out poor ones by looking at -financial ability -volume of business -needs -location -growth potential

Persuasive Advertising

Define: important when increased competition to build selective demand -some persuasive advertising has become comparative (attacking) advertising: company directly or indirectly compares its brands w/ one or more brands Ex: "Weiner War"; Sara Lee sued Kraft, challenging adverting claims that Oscar Meyer Franks had won a national taste test over other brands, Kraft in turn sued Sara Lee of making similar advertising misstatements a bouts their own hotdog. At the end all it did was question the taste of both hotdogs.

Reminder Advertising

Define: important with mature products to help maintain customer relationships and keep customers thinking about the product ex: Coca-Cola TV do this a lot

Direct Mail Marketing

Define: involves an offer, announcement, reminder, or other item to a person at a particular address -personalized -easy to measure results -costs more than mass media -provides better results than mass media -by far the largest direct market media -still using despite internet technology

Catalog Direct Marketing

Define: involves printed and web-based catalogs benefits of Web Based catalogs: -lower cost than printed catalogs -unlimited amount of merchandise -real-time merchandising -interactive content -promotional features Challenges of Web Based Catalogs: -requires marketing -difficulties in attracting new customers

Telephone Direct Marketing

Define: involves using the telephone to sell directly to consumers and business customers -outbound telephone marketing sells directly to consumers and business' -inbound telephone marketing uses toll-free numbers to receive orders from TV and print ads, direct mail, and catalogs Benefits: -purchasing convenience -increased product service and information Challenges: -unsolicited outbound telephone marketing -Do-Not-Call Registry: bans telemarketers from calling these numbers registered on the list. Have created "opt-in" calling systems which they provide useful information and offers to customers who have invited the company to contact them.

Customer Databases

Define: is an organized collection of comprehensive data about customer prospects, including geographic, demographic, psychographic, and behavioral data Benefits: locate good and potential customers, generate sales leads, learn about customers, and develop long-term relationships

Follow-Up

Define: is the last step in which the salesperson follows up after the sale to ensure customer satisfaction and repeat business

Competitor Analysis

Define: is the process of identifying, assessing, and selecting key competitors 2nd step: Developing competitive marketing strategies that strongly position the company against competitors

Pre-Approach

Define: is the process of learning as much as possible about a prospect, including needs, who is involved in the buying, and the characteristics and styles of the buyers -Salesperson should set objectives: to qualify the prospect, gather information, or make an immediate sale -Sales person should determine best approach: personal visit, phone call, letter, or an e-mail -determine best time for approach

Handling Objections

Define: is the process where salesperson resolves problems that are logical, psychological, or unspoken

Approach

Define: is the process where the salesperson meets and greets the buyer and gets the relationship off to a good start and involves the salesperson: -appearance -opening lines -follow-up remarks (listening is crucial)

Developing the Advertising Strategy

Define: is the strategy by which the company accomplishes its advertising objectives and consists of 1. Creating advertising messages 2. Selecting Advertising media

Presentation

Define: is when the salesperson tells the product story to the buyer, presenting customer benefits and showing how the product solves the customer's problems Need-Satisfaction Approach: buyers want solutions and salesperson should listen and respond with the right products and services to solve customer problems

Posistioning Maps

Define: maps that show consumer perceptions of their brands versus competing products on important buying dimensions

Sustainable Marketing

Define: meeting the needs of consumers whole preserving the ability of future generation to their needs Ex: Mcdonalds "Plan to Win" favorite under 400 calories and are featured in its advertising and on menu boards in its restaurants.sales have increased by almost 60% and profits have more than tripled.

Sales Promotion

Define: refers to the short time incentives to encourage purchases or sales of a product or service now -different types of promotion target different channel members -Today sales promotion accounts for 77% of all marketing expenditures

What are the buyer-readiness stages

Define: stages consumers normally pass through on their way to making a purchase Awareness--> knowledge--> liking--> preference-->conviction---> purchase (influence this step by offering discounts, promotional prices, samples,etc) ex: Procter & Gamble used $150 mil. marketing campaign to introduce consumers to its innovative new laundry product, Tide Pods

Informative Advertising

Define: used when introducing a new product category to primary demand

firm level government level consumer level

Describe three types of service barriers that service providers may face when they expand internationally.

Which of the following modes of foreign market entry offers the most control and the highest potential return for a company?

Direct foreign investment

the letter carrier must collect additional postage for every item delivered.

Direct mail is an unpopular medium in Chile because:

In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment?

Direct sales force

Corporate level focuses on long term goals and which countries to focus on as well as objectives for the whole enterprise. Business Unit Level focuses on which consumer segments to focus on in a particular country

Distinguish between the target market decisions made at the corporate versus business unit level of planning (i.e. how do the targeting decisions differ at these two levels?).

________ has long been considered the most effective nontariff barrier to the Japanese market.

Distribution in Japan

Distribution Channels

Distribution is the physical flow of goods through channels. Channels are made up of a coordinated group of individuals or firms that perform functions that add utility to a product or service

Psychographic Segmentation

Dividing buyers into different segments based on social class, lifestyle, or personality characteristics (ex: mountain-dew targeted towards youthful, adventurous but coke targets to the more mature) ex: W hotel

Loyalty Status

Dividing the market by consumer loyalty to brands, stores, companies,and further by the degree of loyalty

False

Domestic middlemen offer many advantages for companies with large international sales volume.

Decoding

During which step of the international communications process does the receiver of the message interpret symbolism transmitted from the information source?

the United States

E-commerce is more developed in _____ than the rest of the world, partly because of the lower cost of access to the Internet than found elsewhere.

Of all the elements of the marketing mix, decisions involving which of the following are those most often affected by cultural differences among country markets?

E. Advertisement of the product

Of all the elements of the marketing mix, decisions involving which of the following is most often affected by cultural differences among country markets? A. Price of the product B. Benefits offered by the product C. Services offered along with the product D. The place of offering the product E. Advertisement of the product

E. Advertisement of the product Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

Which of the following is a critical element associated with using a particular type of middleman? A. Knowledge of the culture of the target market B. Number of employees C. Mode of transportation for moving goods D. Influence over the target market E. Cash-flow patterns

E. Cash-flow patterns Capital requirement and cash-flow patterns are critical elements associated with using a particular type of middleman.

_____ might be classified as an aspect of sales promotions or public relations, though their connections to advertising are also manifest. A. Corporate entrepreneurship B. Corporate sustainability C. Corporate governance D. Corporate espionage E. Corporate sponsorship

E. Corporate sponsorship Corporate sponsorships might be classified as an aspect of sales promotions or public relations, though their connections to advertising are also manifest.

In the context of international advertising, global mass media advertising is a powerful tool for _____.

E. Cultural Change

Which of the following is the last step in an international advertising campaign? A. Developing the most effective message(s) for the market segments selected B. Specifying the goals of the communication C. Selecting effective media D. Executing the campaign E. Evaluating the campaign relative to the goals specified

E. Evaluating the campaign relative to the goals specified An international advertising campaign usually ends with evaluating the campaign relative to the goals specified.

Which of the following steps of the international communications process is important as a check on the effectiveness of the other steps? A. Selecting a proper message B. Encoding the message C. Selecting an appropriate channel of communication D. Decoding the message E. Feedback

E. Feedback

Which of the following steps of the international communications process is important as a check on the effectiveness of the other steps? A. Selecting a proper message B. Encoding the message C. Selecting an appropriate channel of communication D. Decoding the message E. Feedback

E. Feedback The feedback step of the communications process is important as a check on the effectiveness of the other steps. Companies that do not measure their communications efforts are likely to allow errors of source, encoding, media selection, decoding, or receiver to continue longer than necessary.

Which of the following are especially vulnerable as EU member states decide which area of regulation should apply to these services?

E. Internet services

Which of the following is especially vulnerable as EU member states decide which area of regulation should apply to these services? A. Newspaper advertising B. Radio advertising C. Outdoor services D. Personal selling E. Internet services

E. Internet services

Which of the following is especially vulnerable as EU member states decide which area of regulation should apply to these services? A. Newspaper advertising B. Radio advertising C. Outdoor services D. Personal selling E. Internet services

E. Internet services Internet services are especially vulnerable as EU member states decide which area of regulation should apply to these services.

Which of the following elements of the international communications process comprises external influences, such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication?

E. Noise

56. Which of the following elements of the international communications process comprises of external influences such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication? A. Selecting a message source B. Encoding C. Selecting a message channel D. Decoding E. Noise

E. Noise Noise comprises various external influences such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication.

While developing an international advertisement campaign, which of the following is the first step of the process? A. Compose and secure a budget based on what is required to meet goals. B. Specify the goals of the communication. C. Select effective media. D. Execute the campaign. E. Perform marketing research.

E. Perform marketing research. The steps to be performed for developing an international advertisement campaign are: perform marketing research; specify the goals of the communication; develop the most effective message(s) for the market segments selected; select effective media; compose and secure a budget based on what is required to meet goals; execute the campaign; and evaluate the campaign relative to the goals specified.

_____ suffer(s) from issues such as difficulty in assessing taxes, unfair competition, import duties, and privacy. A. The radio B. Direct mail C. Magazines D. Newspapers E. The Internet

E. The Internet As the Internet continues to grow and countries begin to assert control over what is now a medium with few restrictions, increasing limitations will be set. Beyond the control of undesirable information, issues such as pay-per-view, taxes, unfair competition, import duties, and privacy are being addressed all over the world.

The emergence of pan-European communications media will most likely cause companies to: A. opt for localized promotional campaigns. B. opt for greater customization of promotional efforts. C. promote their products only in English. D. use only the Internet as their message channel. E. choose more standardized promotional efforts.

E. choose more standardized promotional efforts. The emergence of pan-European communications media is enticing many companies to push the balance toward more standardized promotional efforts. As media coverage across Europe expands, it will become more common for markets to be exposed to multiple messages and brands of the same product.

Most toy manufacturers would agree that toys cannot be marketed profitably in countries without commercial television advertising directed toward children. In this scenario, commercial television advertising exemplifies the availability of appropriate _____. A. demonstrations B. personal selling services C. direct mailing services D. financial aid E. communication channels

E. communication channels In many markets, the availability of appropriate communication channels to customers can determine entry decisions. For example, most toy manufacturers would agree that toys cannot be marketed profitably in countries without commercial television advertising directed toward children.

In the international communications process, during _____, the message from the source is converted into effective symbolism for transmission to a receiver. A. interpretation B. scrambling C. standardizing D. decoding E. encoding

E. encoding

The _____ step in the international communications process refers to the information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process. A. message channel selection B. interpretation C. encoding D. decoding E. feedback

E. feedback

The _____ step in the international communications process refers to the information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process. A. message channel selection B. interpretation C. encoding D. decoding E. feedback

E. feedback The feedback step in the international communications process refers to the information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process.

A(n) _____ is a domestic middleman set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property. A. Webb-Pomerene export association B. manufacturer's export agent C. export management company D. complementary marketer E. foreign sales corporation

E. foreign sales corporation A foreign sales corporation (FSC) is a sales corporation set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property. Manufacturers and export groups can form FSCs. An FSC can function as a principal, buying and selling for its own account, or a commissioned agent.

A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that covers only one or two markets. A. manufacturer's retail store B. export management company C. Webb-Pomerene export association D. global retailer E. manufacturer's export agent

E. manufacturer's export agent The manufacturer's export agent (MEA) is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers. Unlike the EMC, the MEA does not serve as the producer's export department but has a short-term relationship, covers only one or two markets, and operates on a straight commission basis.

E-commerce is more developed in _____ than the rest of the world, partly because of the lower cost of access to the Internet than found elsewhere. A. China B. Brazil C. Switzerland D. South Africa E. the United States

E. the United States E-commerce is more developed in the United States than the rest of the world, partly because of the vast number of people who own personal computers and partly because of the much lower cost of access to the Internet than found elsewhere.

One of the drawbacks of satellites, which is also their strength, is: A. the cost of creating a high quality ad for satellite television. B. the limited market penetration of satellite television. C. the number of intermediaries required for satellite service transmission. D. the government regulations placed on satellite advertising. E. their ability to span a wide geographical region.

E. their ability to span a wide geographical region. One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different country markets. That means a single message is broadcast throughout a wide area. This span may not be desirable for some products.

Approaches to Marketing Strategy

Entrepreneurial Marketing: Involves visualizing an opportunity and constructing and implementing flexible strategies Formulated Marketing: involves developing formal marketing strategies and following them closely Intreprenurial Marketing: involves the attempt to reestablish an internal entrepreneurial spirit and refresh marketing strategies and approaches

Environmentalism

Environmentlism: is an organized movement of concerned citizens, businesses, and government agencies to protect and improve people's living environment Environment Sustainability: is getting profits while helping to save the planer Pollution Prevention: involves not just cleaning up waste but eliminating or minimizing waste before it creates Product Stewardship: involves minimizing the pollution from production and all environmental impact throughout the full product life cycle Design for Environement (DFE): involves thinking ahead to design products that are easier to recover, reuse, or recycle New Clean Technologies: involves looking ahead and planning new technologies for competitive advantage Sustainabilty vision: guide to the future that shows the company that the company's products, process, and policies must evolve and what is needed to get there

to personally talk to ultimate consumers to find whom they consider to be the best distributors.

Experienced exporters suggest that the only way to select a middleman is:

With some exceptions, usually a majority of the population of less developed countries can be reached readily through the traditional mass medium of advertising.

FALSE A majority of the population of less developed countries cannot be reached readily through the traditional mass medium of advertising.

Television is an advertising medium with no restrictions in most countries.

FALSE Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the length and number of television commercials permitted when their programs are classified as advertisements.

When a message from a source is converted into effective symbolism for transmission to a receiver, the message is said to have been decoded.

FALSE If the message from a source is converted into effective symbolism for transmission to a receiver, the message is encoded. Decoding occurs when the receiver interprets the symbolism transmitted from the information source.

When a marketing executive advertises his product in a newspaper, the newspaper acts as a feedback channel.

FALSE In this case, since the marketer is sending his message to his target audience through a newspaper, the newspaper acts as a message channel.

Industrial advertisers rarely use direct mail for advertising

FALSE Industrial advertisers are heavy mail users and rely on catalogs and sales sheets to generate large volumes of international business.

In the context of international advertising, advertisers prefer global television (satellite broadcasts) due to the availability of accurate market data in most countries.

FALSE Lack of available market data seems to characterize most international markets; advertisers need information on income, age, and geographic distribution, but such basic data seem chronically elusive except in the largest markets. Even the attractiveness of global television (satellite broadcasts) is diminished somewhat because of the lack of media research available

Feedback channels must be carefully selected if an encoded message is to reach the consumer.

FALSE Message channels must be carefully selected if an encoded message is to reach the consumer.

Due to their inherent entertainment value, satellite TV and the Internet have become major communications media in almost all nations.

FALSE Possibly because of their inherent entertainment value, radio and television have become major communications media in almost all nations.

Sales promotions are long-term IMC efforts directed to the consumer or retailer.

FALSE Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase, consumer introduction to the store or brand, gaining retail point-of-purchase displays, encouraging stores to stock the product, and supporting and augmenting advertising and personal sales efforts.

In the context of the distribution structure in Japan, it has been observed that Japanese consumers favor cheaper prices over personal service.

FALSE The Japanese consumer contributes to the continuation of the traditional nature of the distribution system through frequent buying trips, small purchases, favoring personal service over price, and a proclivity for loyalty to brands perceived to be of high quality. Additionally, Japanese law gives the small retailer enormous advantage over the development of larger stores and competition.

International advertisers use foreign national consumer magazines extensively because they have dependable circulation figures.

FALSE The use of foreign national consumer magazines by international advertisers has been notably low for many reasons. Few magazines have a large circulation or provide dependable circulation figures.

Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process of communication are called feedback.

FALSE Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process of communication are called noise.

Domestic Environment Uncontrollable

Factors in a company's home country over which the company has little or no control or influence. They include political and legal forces, the economic climate, level of technology, competitive forces, and economic forces

Uncontrollable Elements

Factors in the business environment over which the international marketer has no control or influence; may include competition, legal restraints, government controls, weather, consumer preferences and behavior, political events

Foreign Environment Uncontrollable

Factors in the foreign market which a business operating in its home country has little or no control or influence. May include political and legal forces, economic climate, geography and infrastructure, level of technology, and structure of distribution

A proper encoding system allows a company to correct errors before substantial damage occurs.

False

Due to their inherent entertainment value, satellite TV and the Internet have become major communications media in almost all nations.

False

Feedback channels must be carefully selected if an encoded message is to reach the consumer.

False

In the context of international advertising, advertisers prefer global television (satellite broadcasts) due to the availability of accurate market data in most countries.

False

In the context of international advertising, an advertiser must consider local variations when choosing an appropriate medium.

False

Industrial advertisers rarely use direct mail for advertising.

False

International advertisers use foreign national consumer magazines extensively because they have dependable circulation figures.

False

Products from developing countries have the highest quality image.

False

Sales promotions are long-term IMC efforts directed to the consumer or retailer.

False

T or F? Contests, sweepstakes, and sponsorship of special events such as concerts are techniques used for maintaining and improving public relations.

False

T or F? For most companies, trade shows and direct selling are the major components in the marketing communications mix.

False

T or F? In the context of international advertising, an advertiser should ideally exclude availability, cost, and coverage of media.

False

T or F? Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process of communication are called feedback.

False

T or F? When a marketing executive advertises his product in a newspaper, the newspaper acts as a feedback channel.

False

T or F? When a message from a source is converted into effective symbolism for transmission to a receiver, the message is said to have been decoded.

False

T or F? With some exceptions, usually a majority of the population of less developed countries can be reached readily through the traditional mass medium of advertising.

False

Television is an advertising medium where there are no restrictions in most countries.

False

trading companies

For companies seeking entrance into the complicated Japanese distribution system, _____ offer one of the easiest routes to success because they virtually control distribution through all levels of channels in Japan.

False

For most companies, trade shows and direct selling are the major components in the marketing communications mix.

Advertising and personal selling

For most companies, which of the following are the major components in the marketing communications mix?

c

Ford's success in promoting " world cars" like the ford focus is a successful example of a. international positioning b. international travel c. satisfying consumer preferences. d. all of the above

In the context of factors affecting choice of channels, which of the following is one of the key elements in distribution decisions?

Functions performed by middlemen

department stores

General retailers that offer a broad variety of goods and wide assortments

b

Girls around the world participating in similar pastimes such as inline skating or playing with barbie dolls are in illustration of a. differentiated consumer preferences b. global consumers c. international production d. none of the above.

consumer factors technology factors distribution factors local government

Give examples of each of four factors that contribute to counterfeiters' success.

Good traits vs. Bad traits for personal selling

Good Traits: good listener, empathetic, honest, dependable, thorough, follow-up types Bad Traits: Pushy, late, deceitful, disorganized, unprepared

Whoever receives the right to use the brand name, certain technology, or an industry know-how (licensee) must in turn pay royalties to the licensor

How does a licensor (the owner of a product license who agrees to share such knowhow or technology with a licensee) earn money under this type of foreign marketing setup?

Africa: women in business, particularly in running a business and sales, is crucial and more important than the role of men South America: it may be extremely difficult to undertake business transactions with women, because they are not readily accepted in certain business settings.

How does the role of women in business differ in Africa versus South America?

New Product Development Strategy

Idea Generation: the systemic search for new product ideas 1. Internal: Find new ideas through research and development (R&D) 2. External: find new ideas from distributers and suppliers. Distributers can pass along information about consumer problems and new product possibilities and suppliers can tell company about ne concepts, techniques, and materials that can used to develop new products. Most importantly is customers: analyze customer questions and complaints. ex: LEGO group: invite users to submit ideas for new lego products and to vote for other users' ideas, ideas supported by 10,000 votes are reviewed internally and if chosen that person will receive 1 percent of their total sales. 3. Crowdsourcing: invites broad communities of people-- customers, employees, independent scientists, and researchers, into the new innovation process. ex: Procter & Gamble: developed its connect+develop crowdsourcing process, company uncovers promising innovations from entrepreneurs, scientists, engineers, and other researchers

New Product Development Process

Idea Screening: help spot good ideas and drop the bad ones as soon as possible Product Concept: detailed version of the idea Product Image: Way the consumer perceives the product Concept Testing: actually testing the product with the target market

True

Ideally, a website should be translated into the languages of the target market.

A

If a firm's objectives are centered on generating high profit and recovering product development costs quickly, it is likely to use which one of the following international pricing strategies? A. skimming B. penetration pricing C. standardized pricing D. competitive pricing

Traditional

In a _____ distribution structure, an importer controls a fixed supply of goods and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

False

In a traditional distribution structure, distribution systems are national rather than local in scope.

False

In an import-oriented distribution structure, supply often exceeds demand.

local company (state- owned enterprise) 50%

In developing countries, joint ventures typically take place between an international firm and a __________________, and the local government typically limits the ownership of the international firm to less than ___ percent.

False

In the U.S., if a middleman is terminated, the company is required to pay one percent of the middleman's average annual compensation, multiplied by the number of years the middleman served, as a final settlement.

receiver

In the communications process in advertising, during the _____ stage, a consumer takes certain actions to respond to a decoded message.

True

In the context of advertising, a marketer's self-reference criterion (SRC) affects the ultimate success of the communication.

secondary wholesaling

In the context of controlling middlemen, parallel importing is also known as _____.

speed of economic development

In the context of distribution patterns, the rate of change in retailing around the world appears to be directly related to the _____.

False

In the context of distribution patterns, wholesaling shows a greater diversity in its structure than does retailing.

False

In the context of distribution structures, one of Walmart's strengths is its ability to influence foreign governments.

the functions performed by middlemen

In the context of factors affecting choice of channels, one of the key elements in distribution decisions includes _____.

communication channels

In the context of integrated marketing communications, in many markets, the availability of appropriate _____ to customers can determine entry decisions.

Hong Kong

In the context of international advertising, _____ is the neon capital of the world.

False

In the context of international advertising, advertisers prefer global television (satellite broadcasts) due to the availability of accurate market data in most countries.

reward-by-results

In the context of international advertising, companies are moving from the commission system to a _____ system.

cyclical

In the context of international advertising, it has been observed that advertising expenditures are generally _____.

True

In the context of international advertising, search engines have now become crucial directors of Internet users' attention.

True

In the context of retail patterns, direct marketing works well in affluent markets as well as in markets with underdeveloped distribution systems.

Direct

In the context of the Internet in international marketing channels, technically, e-commerce is a form of _____ selling.

encoding

In the context of the communications process in advertising, problems of literacy, media availability, and types of media create challenges in the communications process at the _____ step.

False

In the context of the different kinds of middlemen, in 2003, the WTO ruled export management companies to be in violation of international trade rules.

Benetton

In the context of the different types of middlemen, which of the following is an example of a manufacturer's retail store?

foreign sales corporations

In the context of types of domestic middlemen, the WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union.

Encoding

In the international communications process, during _____, the message from the source is converted into effective symbolism for transmission to a receiver.

message channel

In the international communications process, the sales force of a company that conveys the encoded content to the intended receiver acts as a _____.

True

In the traditional distribution structure, independent agencies that provide facilitating functions are nonexistent or underdeveloped.

Direct sales force

In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment?

False

Industrial advertisers rarely use direct mail for advertising.

The Need for Integrated Marketing Communication

Integrated Marketing Communications: is the integration by the company of its communication channels to deliver a clear, consistent, and compelling message about the organization and its brands -shift toward a richer mix of media and communication approaches is a problem for marketers. Consumers bombard by many commercials and they don't distinguish. This can result in confused company images, brand positions, and customer relationships -Digital marketing is good because better access to its customers but can be very complex and its a challenge to make it come together in an organized way

Factors Influencing channel Distribution Decisions (Internal)

Internal Factors: •International market strategy- entry mode and degree of control •Distribution strategy Intensive - distribution in all possible outlets Selective - fewer, selective intermediaries Exclusive - limited number of intermediaries •Product complexity

Irritation, Unfairness, Deception, and Fraud

Irritation: include annoying and offending customers Unfairness: includes taking unfair advantages of impulsive or less-sophisticated buyers Deception: includes "heat merchants" who design mailers and write copy design to mislead consumers Fraud: included identity theft and financial scams a. phishing: type of identity theft that uses deceptive emails and fraud online sites to fool users into giving their personal information

Which of the following is true of a physical distribution system?

It includes transportation mode, inventory quantities, and packing.

Which of the following is true about international corporate planning?

It incorporates generalized goals for the enterprise as a whole.

Which of the following is true about tactical planning?

It refers to the plans that are made at the local level.

In the context of integrated marketing communications, which of the following best defines public relations?

It the creation of good relationships with popular press to help communicate messages to their customers, the general public, and governmental regulators.

Acculturation

Learning a new culture.

Innovators: Risk takers who can afford to pay a higher price during the introduction stage (2.5% of the total market). Primarily consumers in developed countries. Early adopters: Consumers who purchase the product early in the lifecycle stage and who tend to be opinion leaders in their community (13.5% of the total market). Primarily consumers in developed countries. Early majority: Consumers who enjoy status of being among the first to purchase a popular product (34% of the total market). Consumers are primarily from developed countries. Late majority: Consumers who adopt popular products when the risk associated with them is minimal (34% of the total market). Consumers are from both developed and developing countries. Laggards: The last consumers to adopt a product; they are risk averse and conservative in their spending (16% of the total population). Consumers are primarily from developing countries.

List and briefly describe the five categories of consumer adopters?

1. Purchase motivation 2. Consumption preferences and patterns 3. Customs and business practices 4. attitudes toward authority, family, peers, and foreigners 5. Material possession, cultural values, and norms

List five consumer behaviors or attitudes affected by religious beliefs.

1. Gross domestic product(GDP) 2. Industrial and agricultural sector statistics 3. Market size and potential 4. Consumer buying power 5. Investment figures (FDI)

List five criteria marketers use to evaluate country attractiveness in the macrosegmentation process.

consumers competitors channel members employees top management inventors consultants researchers

List four general sources for new product ideas.

product quality performance reliability prestige

List four product characteristics or qualities that perceived country of origin affects.

Manufacturing alliances Marketing alliances Distribution alliances Outsourcing

List four types of strategic alliances.

1. Germany 2. Switzerland 3. Scandinavian counties of Benelux

List three countries in Europe that follow monochronic time

1. Italy 2. France 3. Spain

List three countries in Europe that follow polychronic time.

1. Ethnic conflict. 2. History of war engagement. 3. Antiforeigner sentiment. 4. Recent nationalization activities. 6. Legal ambiguity. 7. Trade barriers. 8. Exchange rate controls.

List three criteria that can be used to evaluate the political/legal environment of a country.

global standardization regional standardization mandatory adaptation nonmandatory adaptation

List two types of standardization and two types of adaptation.

Proactive Political Strategies for Political Risk

Lobbying, campaign financing, advocacy and other political interventions designed to shape and influence the political decisions prior to their impact on the firm; -Formal lobbying -Campaign financing -Seeking advocacy through the embassy and consulates of the home country -Formal public relations and public affairs activities such as grassroots campaigning and advertising

PR: Lobbying, Investor Relations, and Development

Lobbying: involves building and maintaing relations with legislators and government officials to influence legislation and regulation Investor Relations: involves maintaing relationships with shareholders and others in the financial community Development: involves PR with donors or members of nonprofit organizations to gain financial or volunteer support

Evaluating Market Segments

Look at three factors: 1. Segment Size & growth (big or small depending on the power of the company) 2. Segment structural attractiveness (look at competitors, ease for new entrants, substitute products, power of buyers) 3. Company objectives and resources

Which of the following characterizes the business philosophy of the Japanese distribution channels?

Loyalty

International Distribution Channel Alternatives

Manufacturer-> Local-> Wholesaler -> retailer-> consumer

Less: Greece= $22.19 Israel= $20.12 Singapore= $19.10 Argentina= $12.66 Slovakia= $10.72 Brazil= $10.08 Hungary= $8.40 Taiwan= $8.36 Mexico= $6.23 Philippines= $1.90 Spain= $26.60 United Kingdom= $29.44 Japan= $31.99 Italy= $33.41 United States $34.74 More: Canada= $35.67 Ireland= $36.30 France= $40.55 Australia= $40.60 Netherlands= 40.92 Finland= $42.30 Germany= $43.76 Denmark= $45.48 Belgium= $50.70 Switzerland= $53.20 Norway= $57.53

Many companies cross borders in search of lower labor costs. Using Table 8-1 based on 2010 figures, list five countries that pay hourly wages for manufacturing less than those wages paid in the United States and five countries with hourly wages more than those paid in the United States.

Marketing Logistics and Supply Chain Management

Marketing Logistics: (physical distribution) invokes planning, implementing, and controlling the physical flow of goods, services, and related information from points or origin to points of consumption to meet consumer requirement at a profit Supply Chain management: is the process of managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers,and final consumers

New Product Development Process (continued)

Marketing Strategy Development: designing the initial marketing strategy for a new product based on the product concept Part 1: first describes the target market, value proposition, sales market plan, and profit goals Part 2: Products planned price, distribution, and marketing budget Part 3: long-run sales, profit goals, and marketing mix strategy Business Analysis: a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objective. To do this management looks at the sales of similar products in the market and analyze costs and profits Product Development: Developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering a. R&D department makes multiple prototypes b. Products tested for safety and effectively c. Tested by actual consumers Test Marketing: The stage of a new-product development in which the product and its proposed marketing program are tested in realistic settings -Used to determine advertising, distribution, pricing, branding, packaging etc. a. Controlled Test markets: new products and tactics are testing among controlled panels of shoppers b. Simulated test markets: researchers measure consumer responses to new products and marketing tactics in laboratory stores or simulated online shopping environments Commercialization: introducing a new product to the market -Marketers must decide on amount of money to spend, when to release product, where to launch the product

C

Marlboro was one of the official sponsors of Ferrari's Formula 1 team, endorsing Michael Schumacher. This is an example of A. press release. B. company publications. C. event sponsorship. D. advocacy advertising.

Creating the Advertising Message: Execution

Message Execution: is when the advertiser turns the big idea into an actual ad execution that will the target market's attention and interest -the creative team must find the best approach, style, tone, words, and format for executing the message

Creating the Advertising Message: Message Strategy

Message Strategy: is the general message that will be communicated to consumers 1. identifies consumer benefits 2. follows from company's broader positioning and customer value creation strategies

In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the ________.

Ministry of International Trade and Industry

Continuous innovations

Most innovation taking place today is of what type?

Continuity

Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period. This is an example of problems associated with which of the following six Cs of channel strategy?

Continuity

Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period. This is an example of problems associated with which of the following six Cs of distribution channel strategy?

true

Multinational companies often try to combat counterfeiting by differentiating their products with signature traits.

Which of the following countries has the most egregious control over advertising, where each medium has its own censorship board that passes judgment on any advertising even before it is submitted for approval by the Ministry of Information?

Myanmar

1. standard of living 2. economic performance

Name two measures to which ethnocentric attitudes are related.

Selecting Advertising Media: Narrowcasting

Narrowcasting: focuses the message on selected market segments 1. Lowers cost 2. targets more effectively 3. engages customers better

true

Neither merchant middlemen nor agents and brokers carry title to products

d

New product ideas can be found through a. competitive analyses b. international employees c. international customers d. all of the above

Major Public Relations Tools

News, Speeches, special events, written materials, corporate identity materials, public service activities, buzz marketing, social networking, internet

Steps in Developing Effective Marketing Communication-Non-Personal Communication Channels

Non-Personal Communication: is the media that carry messages without personal contact or feedback, including major media, atmosphere, and events that effect the buyer directly 1. Major Media: include print (newspapers, magazines), broadcast, display, and online media ( company website, email, billboards, signs, posters) 2. Atmospheres: are designed environments that create or reinforce the buyer's leanings toward buying a product (lawyer's offices, banks,etc) -Events are staged occurrences that communicate messages to target audiences 1. press conferences 2. grand openings 3. exhibits 4. public tours

Sales Promotion Objectives

Objectives Include -consumer promotions (urge short term customer buying and build relationships) -trade promotions -business promotions -sales force promotions

advertising

Of all the elements of the marketing mix, decisions involving _____ are those most often affected by cultural differences among country markets.

True

Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

Advertisement of the product

Of all the elements of the marketing mix, decisions involving which of the following are those most often affected by cultural differences among country markets?

false

One of the benefits of franchising is that it keeps out new competitors.

True

One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different cultures.

few magazines provide reliable circulation data

One of the reasons for the notably low use of foreign national consumer magazines by international advertisers is that:

have little loyalty to their vendors

One of the reasons that channels of distribution often pose longevity problems is that most middlemen _____.

Other Sales Force Strategy and Structure Issues

Outside Salespeople: call on customers in the field, travel Inside Salespeople: conduct business from their offices and often provide support for the outside salespeople, via telephone, internet, visits from buyers -on average about $350 per sales call Team Selling: products become more complex and as customers grow larger and more demanding, a single salesperson can't handle demand. Used to service large, complex accounts. Teams can unearth problems. solution, and sales opportunities that a single person can't do.

Apple Computer had difficulties when it first entered the Japanese market with its Macintosh computers. Some of the computers were returned unused after customers found the wrapping on the instruction manual damaged. Though this would probably be no big deal in the U.S., it was certainly a cause for concern in quality-conscious Japan. To fix the problem, Apple needed to concentrate on which of the following components of the product component model?

Packaging component.

define international marketing

Performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit

Dr. Mark Townes is a dentist practicing in Denver. During a four-day stretch in March, it snowed so heavily that not a single patient was able to visit him. Since all the appointments were missed, he did not make any money for those four days, even though his normal expenses remained. Which of the following characteristics of services is affecting Dr. Townes' business

Perishability

Steps in Developing Effective Marketing Communication-Choosng Media (Personal Communication)

Personal Communication: involves two or more people communicating directly with each other (ex: face to face, phone, mail, email, internet chat) -good b/c allow for personal addressing, feedback Control of Personal Communication 1. Company 2. Independent Experts 3. Word of Mouth

Personal Selling

Personal Selling: is the interpersonal part of the promotion mix and can include: -Face to face communication -telephone communication -video or web conferencing

Cyber Squatters (CSQs)

Persons or businesses that buy, usually for a nominal fee, and register as website names descriptive nouns, celebrity names, variations on company trademarks, geographic and ethnic group names, and pharmaceutical and other descriptors and them hold them until they can be sold at an inflated price.

a

Philips is headquartered in the Netherlands, but many of its appliances are manufactured in Asia. The country of origin of Philips a. is the Netherlands d. is the country in Asia where the product is manufactured c. depends on the perception of the consumer. d. none of the above

Selecting Advertising Media: Media Timing

Planner must consider 1. Seasonality 2. Pattern of the advertising a. continuity: scheduling evenly within a given period b. pulsing: scheduling unevenly within a given period: feel that this pattern can have same effect as stead advertising but at much lower cost, can sacrifice depth of advertising communications

c

Porsche helping Harley-Davidson to produce its water-cooled revolution engine is an example of which type of strategic alliance? a. distribution b. marketing c. manufacturing d. none of the above

Press Relations or Press Agency, Product Publicity, Public Affairs

Press Relations or Press Agency: involves the creation and placing of newsworthy information to attract attention to a person, product, or service Product Publicity: involves publicizing specific products Public Affairs: involves building and maintaing national or local community relations

High Cost of Distribution

Prices are too high because ; 1. distribution 2. advertising and promotion 3. excessive mark-ups Response; 1. intermediates are important 2. advertising informs buyers of availability and merits of brand 3. Consumers dont understand the cost of doing business

Public Policy and Pricing

Pricing within channel levels: 1. Price fixing: the agreement between competitors on a price, Sellers must set prices without talking to competitors. 2. Predatory Pricing: selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business Pricing across channel levels: 3.Price Discrimination: the Robinson-Patman Act, Sherman Act, and Clayton ACt seeks to prevent this by ensuring that sellers offer the same terms to customers at a given level of trade. Acts help to curb formation of monopolies and regulate business practices. a. retail (or resale) price maintenance: a manufacturer can't require dealers to charge a specified (fixed) retail price for its products 4. Deceptive Pricing: occurs when a seller states prices or price saving that mislead consumers or are not actually available to consumers

True

Problems of literacy, media availability and types of media create problems in the international communications process at the encoding step.

Define Differentitation and Positioning

Product PosistionL the way a product is defined by consumers on important attributes

Product assortment decisions

Product assortments and service decisions: product assortment, services mix, and store atmosphere

Undifferentiated

Product is aimed at the market using a single strategy regardless of number of countries targeted, and regardless of the locations where it is marketed and the number of market segments.

false

Product length is defined as the total number of brands in the product mix- all the brands sold by the company worldwide.

________ is a subject area that should be on the checklist of criteria for evaluating middlemen servicing a market

Productivity

c

Promoting its products globally and altering parts of their promotion based on specific areas is common of a company focused on a. nonmandatory adaption b. global standards c. globalization or global localization d. none of the above

Public Relations

Public Relations: involves building good relations with the company's various public by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events -PR used to promote product, people, ideas, and activities

Which of the following elements of integrated marketing communications is related to encouraging the press to cover positive stories about companies and managing unfavorable rumors, stories, and events?

Public relations

Reach, Frequency, and Impact

Reach: is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time (ex: marketers trying to reach 70% of targeted audience) Frequency: is a measure of how many times the average person in the target market is exposed to the message (ex:example marketer might want average exposure of 3) Impact: is the qualitative value of a message exposure through a given medium

specialty stores

Retailers that offer a narrow product line and wide assortment

Evaluating the Effectiveness and Return on Advertising Investment

Return on Advertising Investment: the net return on advertising investment divided by the costs of the advertising investment Advertisers should regularly evaluate 1. Communication effects 2. Sales and Profit Effects

In the context of international advertising, companies are moving from the commission system to a _____ system.

Reward by results

Sales and Profit Effects

Sales and Profit Effects: compare past sales and profits with past expenditures or through experiments -harder to measure -one way is to compare past sales and profits with past advertising expenditures -another way is through experiments

Supervising and Motivating Salespeople

Sales moral and performance can be increased by: 1. Organizational Climate: describes the feeling that salesperson have about their opportunities, value, and rewards for a good performance 2. Sales Quotas: standards stating the amount they should sell 3. Positive incentives: bonus', sales meetings, sales contests

_____ are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase.

Sales promotion

False

Sales promotions are long-term IMC efforts directed to the consumer or retailer.

True

Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

True

Sales promotions constitute the major portion of the promotional effort in rural and less accessible parts of a market.

The Nature of Personal Selling

Salespeople: are an effective link between the company and its customers to produce customer value and company profits by: -representing the company to customers -representing customers to the company -working closely with marketing (arranging joint meetings, spelling out communication channels,etc)

Sales Force Size

Salespeople: one of the company's most productive and expensive assets -increase in sales force size can increase sales and costs Workload Approach to sales force size: refers to grouping accounts into different classes to determine the number of salespeople needed. Company first groups according to size, account status, or other factors related to amount of effort required to maintain the account. Then determines the number of salespeople needed to call on each class of accounts the desired number of times.

Concentrated

Select only one market segment and target it with a single brand

Selecting Advertising Media: Selecting Media Vehicles

Selecting Media Vehicles: involves decisions presenting the message effectively and efficiently to the target customer and must consider the message's: 1. Impact 2. Effectiveness 3. Cost -Planner must consider the cost of the media as compared to its effectiveness by evaluating: 1. audience quality 2. audience engagement 3. editorial quality -media multi-taskers: people who absorb more than one medium at a time (ex: watching TV while on computer)

The Webb-Pomerene Act of 1918 made it possible for American business firms to join forces in export activities without being subject to the ________.

Sherman Antitrust Act

Societal Marketing

Societal Marketing: company makes decisions by considering consumers wants, companies requirements, and consumers long run interests, and societies long run interests Deficent products: bad-tasting, ineffective Pleasing products high immediate satisfaction but may hurt in long run Salutary Product: having low immediate appeal but may benefit consumers in long run Desirable Product: high immediate satisfaction and high long run benefits IMEDIATE SATISFACTION Low High Low Salutary Desirable High Deficient Pleasing (Long -Run Consumer Benefit)

Standardized Marketing Mix vs. Adapated Marketing Mix

Standard:involves selling the same products and using the same marketing approaches worldwide Adapted: involves adjusting the marketing mix elements in each target market, bearing more costs but hoping for a larger market share and ROI

global standardization

Standardization of products across markets and, ultimately, the standarization of the marketing mix worldwide

Selecting Advertising Media Steps

Steps include: 1. Deciding on,reach,frequency, and impact 2. selecting media vehicles 3. deciding on media timing

Deciding on the Global Marketing Program- Product

Straight Product Extension: means marketing a product in a foreign market with out any change Product Adaption: involves changing the product to meet local conditions or wants Product Invention: consist of creating something new for a specific country market -maintain or reintroduce earlier products -create new products

Industry Structure

Structure A. Subsistence Economies: majority people engage in simple agriculture, consume most of their output and have rest for simple goods and services. Offer few market opportunities . (ex: african communities) B. Raw Material Exporting Economies: economies are rich in one or more natural resource but poor in other ways. Revenue comes from exporting these resources. Good for large equipment, tools and supplies, and trucks. C. Emerging Economies: fast growth in manufacturing results in a rapid overall economic growth, examples include BRIC countries (Brazil, Russia, India, China) D. Industrial Economies: major exporters of manufactured goods, services, and investment funds

Which of the following actions should be taken to begin the search for prospective middlemen?

Studying the target market

The role of public relations is to create good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators.

TRUE Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of public relations (PR).

Errors at the receiver end of the international communications process can be avoided if the message is encoded properly.

TRUE Errors at the receiver end of the process generally result from a combination of factors: an improper message resulting from incorrect knowledge of use patterns, poor encoding producing a meaningless message, poor media selection that does not get the message to the receiver, or inaccurate decoding by the receiver so that the message is garbled or incorrect

Sales promotions constitute the major portion of the promotional effort in rural and less accessible parts of a market.

TRUE In markets in which the consumer is hard to reach because of media limitations, the percentage of the promotional budget allocated to sales promotions may have to be increased. In some less developed countries, sales promotions constitute the major portion of the promotional effort in rural and less accessible parts of the market.

A reason for the failure of marketing communications is that the message received by the intended audience is not understood because of different cultural interpretations.

TRUE International communications may fail for a variety of reasons: A message may not get through because of media inadequacy, the message may be received by the intended audience but not be understood because of different cultural interpretations, or the message may reach the intended audience and be understood but have no effect because the marketer did not correctly assess the needs and wants or even the thinking processes of the target market.

Competitive advertising is a source of noise in the international communications process.

TRUE Noise comprises external influences such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication.

Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

TRUE Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.

One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different cultures.

TRUE One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different country markets. That means a single message is broadcast throughout a wide area. This span may not be desirable for some products

Problems of literacy, media availability, and types of media create problems in the international communications process at the encoding step.

TRUE Problems of literacy, media availability, and types of media create challenges in the communications process at the encoding step.

The feedback step of the international communications process is important as a check on the effectiveness of the other steps.

TRUE The feedback step of the communications process is important as a check on the effectiveness of the other steps.

In the context of advertising, a marketer's self-reference criterion (SRC) affects the ultimate success of the communication.

TRUE The international communications model's significance is that one or all steps in the process, cultural factors, or the marketer's self-reference criterion (SRC) can affect the ultimate success of the communication.

In the context of international advertising, search engines have now become crucial directors of Internet users' attention.

TRUE The sheer proliferation of the number of websites makes it increasingly difficult for a customer to stumble across a particular page. Search engines have now become crucial directors of Internet users' attention.

While developing an international advertisement campaign, the last step of the process is evaluating the campaign relative to the goals specified.

TRUE The steps to be performed for developing an international advertisement campaign are: perform marketing research; specify the goals of the communication; develop the most effective message(s) for the market segments selected; select effective media; compose and secure a budget based on what is required to meet goals; execute the campaign; and evaluate the campaign relative to the goals specified.

As traditional channel structures are changing, importers and retailers are also becoming involved in new product development.

TRUE Traditional channel structures are giving way to new forms, new alliances, and new processes—some more slowly than others, but all are changing. Multinational marketers are seeking ways to profitably tap market segments that currently are served by costly, traditional distribution systems. Direct marketing, door-to-door selling, hypermarkets, discount houses, shopping malls, catalog selling, the Internet, and other distribution methods are being introduced in an attempt to provide efficient distribution channels. Importers and retailers also are becoming more involved in new product development.

Traditional channels in developing countries evolved from economies with a strong dependence on imported manufactured goods.

TRUE Traditional channels in developing countries evolved from economies with a strong dependence on imported manufactured goods. In an import-oriented or traditional distribution structure, an importer controls a fixed supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

Tariffs and Quotas

Tariffs: taxes on certain imported products designed to raise revenue or to protect domestic firms Quotas: limits on the amount of foreign imports a country will accept in certain product categories to conserve foreign exchange and protect domestic industry and employment

infrequent foreign marketing

Temporary surpluses in inventory caused by variations in production level or demand may cause companies to sell their excess product in overseas markets Sales to foreign markets are made as goods become available - uncommon

true

Test marketing has a number of disadvantages: it is expensive, time consuming, and subjects the company to competitive sabotage.

Confucian Philosophy

The 2,500 year old teachings of Chinese philosopher Confucius, still strongly influences cultures in East Asia today. Primary among his teachings were a deep respect for elders, rulers, and husbands.

false

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

Which of the following statements is true of the Japanese market?

The Japanese distribution structure supports long-term dealer-supplier relationships

Which of the following is an example of the primary function of a product?

The ability of a camera to take a picture

With India, anything outside the major cities would require several different translators for the several different language barriers. In China, there is still a large portion of the population that has a very limited access to technology

The ability to communicate with a target market determines its accessibility. What are two problems that make it difficult for marketers to communicate with people in big emerging markets such as India and China?

True

The behavior of channel members in the distribution process is the result of the interactions between the cultural environment and the marketing process.

False

The distribution channel process includes all activities, beginning with the manufacturer and ending with the retailer.

d

The following is an example of mandatory adaption for the United States market: a. U.S. automobile emission standards b. 110 volts c. NTSC television d. all of the above

Culture

The human made part of human environment- the sum total of knowledge, beliefs, arts, morals, laws, customs, and other capabilities and habits acquired by humans as members of society

b

The iPhone is relatively expensive. Companies are presently selling them to consumers in industrialized countries. In which stage of the international product life cycle is the iPhone? a. product introduction b. growth stage c. maturity stage d. decline stage

Which of the following statements is true regarding an import-oriented distribution structure?

The importer-wholesaler traditionally performs most of the marketing functions.

true

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

c

The many different flavors of the Unilever's Ben & Jerry's a. product length b. product width c. product depth d. all of the above

Which of the following statements is true of a traditional distribution structure?

The marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

Social Institutions

The methods and systems, including family, religion, school, the media, government and corporations, that affect the ways in which people relate to one another, teach acceptable behavior to succeeding generations and govern themselves

Manifest Destiny

The notion that Americans were a chosen people ordained by God to create a model society; it was accepted as the basis for U.S. policy during much of the 19th and 20th centuries as the nation expanded its territory

Expropriation

The seizure of an investment by a government in which some reimbursement is made to the investment owner; often the seized investment becomes nationalized.

Confiscation

The sizing of a company's assets without payment. Prominent examples involving US companies occurred in Cuba and Iran

A

The three main retail formats are A. general merchandise, food, and nonstore. B. automotive, food, and nonstore. C. general merchandise, automotive, and luxury. D. none of the above

Chronemics

The timing of verbal exchanges in a conversation with others.

Bribery

The use of funds, usually illegally, to influence decisions made by public employees and government officials. Such payments often range into the millions of dollars in international commerce.

Which of the following statements is true of sales promotions?

They are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

Which of the following statements is true regarding merchant middlemen?

They assume trading risks.

Which of the following is true of foreign sales corporations?

They can function as principal or commissioned agents.

Which of the following statements is true regarding agent middlemen?

They work on commission and arrange for sales in the foreign country.

Sixty percent of the Japanese population lives in the ________ market area, which essentially functions as one massive city.

Tokyo-Nagoya-Osaka

Creating the Advertising Message: Tone

Tone: -positive or negative -attention-getting words -Format a.illustration b. headline c. copy: simple but strong and convincing

Which of the following statements about advertising laws around the world is correct?

Toy, tobacco, and liquor advertising is restricted in numerous countries.

A reason for the failure of marketing communications is that the message received by the intended audience is not understood because of different cultural interpretations.

True

Competitive advertising is a source of noise in the international communications process.

True

Different cultures often seek the same value or benefits from the primary function of a product.

True

Errors at the receiver end of the international communications process do not occur if the message is encoded properly.

True

Problems of literacy, media availability and types of media create problems in the international communications process at the encoding step.

True

Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

True

Sales promotions constitute the major portion of the promotional effort in rural and less accessible parts of a market.

True

T or F? A reason for the failure of marketing communications is that the message received by the intended audience is not understood because of different cultural interpretations.

True

T or F? Errors at the receiver end of the international communications process can be avoided if the message is encoded properly.

True

T or F? One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different cultures.

True

T or F? Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

True

T or F? Sales promotions constitute the major portion of the promotional effort in rural and less accessible parts of a market

True

T or F? The role of public relations is to create good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators.

True

T or F? While developing an international advertisement campaign, the last step of the process is evaluating the campaign relative to the goals specified

True

The feedback step of the international communications process is important as a check on the effectiveness of the other steps.

True

The role of public relations is to create good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators.

True

Deciding on the Global Marketing Program- Price

Uniform Pricing: is the same price in all markets but does not consider income or wealth where the price may be too high in some not high enough in other markets Standard Markup Pricing: price based on a percentage of cost but can cause problems in countries with high costs Price Escalation Problem: Apple faces this, must add the transportation, tariff, importer margin, etc and so its products are more expensive in some areas

true

Using established channels can be costly for multinational firms, but paying the high price may also erect barriers to entry for competitors

False

Using foreign-country middlemen moves the manufacturer away from the market and the company becomes less involved with problems of language, physical distribution, communications, and financing.

media channel selection

Using newspapers or magazine ads as a channel of communication when the majority of the intended users are illiterate, is an example of ineffective _____ in the communications process.

...

Using the examples of the products available for your international marketing plan (see iLearn 'Content'), explain how each would be positioned using local consumer culture positioning versus foreign consumer culture positioning.

C

Walmart and Target are all examples of A. category specialists B. specialized markets C. all-purpose discount stores. D. specialty stores.

produce quality art books at a much lower prices than Western European presses

What advantage will Damian have over German art-book publishers?

homogeneous consumer group worldwide sharing similar interests and product/brand preferences.

What are "global consumers"? What are two reasons why today's global consumers share common product/brand preferences?

Economic development measures, employment data, level of foreign direct investment, and trends in consumer spending

What are some "surrogate statistics" that can be used to measure a segment's growth potential?

They are able to purchase equipment awarded the Eco-label, which guarantees its environmental efficiency

What are some of the advantages and safeguards that Damianov Press will derive from Bulgaria's membership in the EU in re-equipping the business?

antidiscrimination equal opportunities labor law occupational saftey

What are some of the costs Damian will incur directly due to European Union regulations in the printing industry?

Population and economic statistics may be inaccurate. The consumers may also be unwilling to participate in data collection

What are some problems associated with determining the measurability of market segments in developing countries?

generating new product ideas screening new product ideas

What are the first two stages of the new product development process?

1. Language 2. Religion 3. Cultural values 4. Cultural norms

What are the five major elements of culture?

merchant middlemen agents and brokers

What are the two broad categories of foreign-country (host-country) middlemen? What is the main difference between the two?

design counterfeiting *brand-name counterfeiting

What are the two types of counterfeiting? Which type of counterfeiting do you consider to be more serious? Why?

1. develop its own subsidiary (greenfielding) 2. it can purchase an existing company through acquisition or mergers.

What are the two ways a company can develop a wholly owned subsidiary?

c

What aspect of international distribution and logistics is facilitated by containerization? a. distribution research b. freight forwarding c. intermodal transportation d. government agencies

Measure the potential per capita income for the next 10 years as well as measure the potential market growth

What can the marketer do if it is determined that a local market segment lacks substantiality, i.e. is not large enough to be profitable?

B

What company was responsible for initiation a countertrade relationship with the Soviet Union in the late 1960s? A. McDonald's B. Pepsi C. Philip Morris D. none of the above

IOS 9000: specifies that the organization must meet customer and regulatory requirements and follow its policies and procedures while advancing quality through continuous improvement IOS 14000: certification that a company follows guidelines that discourage firms from engaging in hazardous environmental practices.

What do ISO 900o standards pertain to? What do ISO 14000 standards pertain to?

What an outsider may or may not do Customs that a foreign representative may engage in, but conformity is this respect is not required. 1. Eating with chopsticks in East Asia 2. Greeting a woman by kissing her hand in Hungary or Romania

What is a cultural adiaphora? Give one or two examples of cultural adiaphoras?

require a unified monetary policy for member countries. -creation of a unified, parastatal central bank -the use of a single currency, or currencies that are in a fixed relationship to each other.

What is a monetary union?

Subcultures are components of the broad culture. Subcultures are groups of individuals with shared value systems based on: 1. ethnicity 2. religion 3. regional differences. 1. southern hospitality 2. religion

What is a subculture? List three variables subcultures may be based on. List two examples of subcultures in the United States or in your home country.

threat of losing national identity and sovereignty as part of the larger regional structure.

What is considered the most important obstacle or deterrent to regional economic and political integration?

entails placing the brand in the consumer's mind in relation to other competing products, based on product traits and benefits that are relevant to the consumer. 1. Identify competitors 2. Determine how they are perceived by consumers 3. Determine positioning in consumer's minds 4. Analyze customers 5. Select positioning 6. Monitor position

What is positioning? List the six different positioning strategies generally available to marketers.

the use of an uniform marketing strategy within a particular region

What is regional standardization and why has it become more preferable to companies in recent years?

With Direct exporting, companies handle their own exports. With Indirect exporting, companies sell their product to someone else who then ships it overseas

What is the biggest difference in indirect and direct exporting?

country of origin is where the product is associated and the country of manufacture is where it is manufactured

What is the difference between "country of origin" and "country of manufacture"? Can these ever be one and the same?

simulated test: simulate purchase environment where samples of target consumers are observed in their product related decision-making process. controlled test: offering a new product to a group of stores and evaluating the markets reaction to it.

What is the difference between a simulated test market, controlled test market, and actual test market?

length is the total number of brands in the mix width is the total number of product lines the company offers to its target international consumers and depth is the total number of different offerings in a product line.

What is the difference between product length, product width, and product depth?

A Common market is a Customs union that eliminates all tariff and non-tariff barriers to trade, adopts common external tariffs, and allowing for free movement of capital and labor within the common market.

What is the difference in a customs union and a common market?

A Customs union is a Free trade agreement that adopts common external tariffs on products imported from outside the area.

What is the difference in a free trade agreement and a customs union?

Subsidiaries are separate entities, whereas branch offices are entities that are part of the international company wholly owned subsidiary because a nationalization attempt on the part of the local government could leave the company with just a tax write-off.

What is the difference in a wholly owned subsidiary and a branch office? Which is considered riskier? Why?

contract manufacturing is when two companies pair up to manufacture and sell a product; whereas outsourcing is the strategic use of outside companies to preform a service. Asia: financial services, telecom, software, retailers. India is popular for the low-cost, educated, and English-speaking labor force of about 159 million

What is the difference in contract manufacturing and outsourcing? List four types of service jobs that have been outsourced to Asia. Why is India a popular country for the outsourcing of U.S. service-sector jobs?

1. General agreements: Bilateral and multilateral forums and agreements 6. Political unions

What is the lowest level of regional economic and political integration? What is the highest level of regional economic and political integration?

Bilateral is limited to two countries while Multilateral is a general agreement between multiple countries. Typically, they are industry specific.

What is the main difference in a bilateral and multilateral agreement?

it is cheaper to have the same product and the same integrated marketing communication strategy worldwide. and standardization is possible because consumers increasingly have the same product preferences.

What is the main reason firms favor global standardization over adaptation?

abandoned printing press with quality equipment in the outskirts of Sofia. recently abandoned by its previous owner because it was considered an environmental hazard by the state.

What kind of business did Damian Damianov recently purchase in Sofia, Bulgaria? Why had the business and its equipment been abandoned? What does Damian plan to do with the business?

International firms: expertise, know-how, most of the capital, the brand name reputation, and physical infrastructure (such as the factory and access to the factory) Local partner: labor, the physical infrastructure (such as the factory and access to the factory), local market expertise and relationships, as well as connections to government decision- making bodies.

What manner of resources are usually contributes to a joint venture by an international firm and what resources are typically provided by the local partner?

d

What services do Japanese trading companies offer their supplier? a. risk reduction b. specialization in intermediary services c. financial assistance d. all of the above

B

What type of countertrade involves buying a party's position in a countertrade in exchange for hard currency and selling it to another customer? A. compensation B. switch trading C. counter purchase D. offset purchase

d

When a company screens new product ideas, what are the most important factors to consider? a. unique benefits to users b. product requirements versus resource c. narrowly specified target markets d. a and b

False

When a marketing executive advertises his product in a newspaper, the newspaper acts as a feedback channel.

False

When a message from the source is converted into effective symbolism for transmission to a receiver, the message is said to have been decoded.

When quality cannot be guaranteed, either because the licensee doe not allow the licensor sufficient control and scrutiny or because the licensee cannot guarantee quality.

When is it preferable for products produced under license NOT to carry the licensor's brand name?

Usage Equivalence

Whether the conditions of product use are the same in a new market?

Purchasing Power Equivalence

Whether the consumers in the new market have the ability to buy the product?

Functional Equivalence

Whether the product function or the need satisfied is the same or different in a new market?

Croatia 1. Albania 2. Iceland 3. Montenegro 4. Serbia 5. Former Yugoslavia 6. Republic of Macedonia 7. Turkey 1. Bosnia 2. Herzegovina 3. Kosovoprodu

Which country listed in the text as a "candidate country" to the EU is now a full-fledged EU member. What 5 countries are now "on the road to membership" as candidate countries? What three countries are considered "potential candidates" as of 2015?

d

Which government agency offers export assistance to international firms and, in particular, to small to medium- sized businesses a. U.S. department of state b. bureau of export administration c. U.S. trade and development agency d. international trade administration

Studying the target market

Which of the following actions should be taken to begin with the search for prospective middlemen?

Radio and television

Which of the following are considered to be major communications media in most countries due to their inherent entertainment value?

Internet services

Which of the following are especially vulnerable as EU member states decide which area of regulation should apply to these services?

d

Which of the following are examples of products that businesses purchase? a. major equipment, buildings, land b. accessory equipment and fabricated and component parts c. process material and maintenance and repair parts d. all of the above

Complementary marketing

Which of the following arrangements are undertaken when a firm wants to keep its seasonal distribution channels functioning throughout the year?

Import-oriented

Which of the following distribution structures is also known as a traditional distribution structure?

Public relations

Which of the following elements of integrated marketing communications is related to encouraging the press to cover positive stories about companies and managing unfavorable rumors, stories, and events?

Noise

Which of the following elements of the international communications process comprises external influences, such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication?

Available distribution intermediaries

Which of the following factors affects the choice of distribution channels?

Direct sales through catalogs

Which of the following has proved to be an important way to break the trade barrier imposed by the Japanese distribution system?

Merchant middlemen

Which of the following has proved to be an important way to break the trade barrier imposed by the Japanese distribution system?

C

Which of the following is a nonpersonal medium of the International Communication Process? A. personal selling. B. trade shows. C. television. D. telemarketing.

d

Which of the following is a reason for the failure of joint ventures? a. natural disasters b. poor performance by a partner c. partners becoming competitors d. all of the above

An ad showing a dog choosing one brand of dog food over another.

Which of the following is an example of comparative advertising?

B

Which of the following is an example of sales promotion can be varied from one market to another? A. local campaigns. B. modular campaigns. C. global campaigns. D. none of the above.

D

Which of the following is an example of sales promotion? A. product tie-ins. B. free samples C. cents-off D. all of the above

The ability of a camera to take a picture

Which of the following is an example of the primary attribute of a product?

b

Which of the following is correct about using international middlemen? a. they increase company control over marketing strategy. b. they subject the company to less risk than direct international involvement. c. they maximize control for the company in the target market. d. all of the above

D

Which of the following is not an example of media restriction? A. prohibiting advertising to children. B. prohibiting the advertising the vice products. C. keeping the local language pure. D. all of the above.

Capital required to maintain effective distribution

Which of the following is one of the highest costs of doing business in China?

Continuity

Which of the following is one of the six Cs of distribution channel strategy?

It includes buying and selling negotiations.

Which of the following is true of the distribution process?

Direct sales force

Which of the following modes of distribution affords the most control over the distribution channels but often at a cost that is not practical?

The marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

Which of the following statements is true of a traditional distribution structure?

The importer-wholesaler traditionally performs most of the marketing functions.

Which of the following statements is true regarding an import-oriented distribution structure?

They assume trading risks

Which of the following statements is true regarding merchant middlemen?

Feedback

Which of the following steps of a communications process is important as a check on the effectiveness of the other steps?

To remove antitrust disincentives to export activities.

Which of the following was a goal of the Export Trading Company Act?

Products/quality are positioned as either offering the best value for the money (especially useful when marketing in developing countries) or as being the best product that money can buy, stressing its high price and quality.

Which positioning strategy is considered "especially useful for companies marketing in developing countries?" Why?

message channel selection

With reference to the communication process in advertising, using the Internet as a medium when only a small percentage of an intended market has access to it, is an example of an error related to:

Coverage of the Internet

With regard to consumer products, which of the following is the major limitation of the Internet?

Sales promotion

_____ are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.

Sales promotion

_____ are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase.

The Japanese distribution structure

_____ has long been considered the most effective nontariff barrier to the Japanese market.

Deception

_____ in advertising is a thorny issue, because most member countries of the European Commission have different interpretations of what constitutes a misleading advertisement.

Productivity

_____ is an area that should be on a checklist of criteria for evaluating middlemen servicing a market.

Direct marketing

_____ is often the approach of choice in markets with insufficient or underdeveloped distribution systems.

Language

_____ is one of the major barriers to effective communication through advertising.

Road shows

_____ might be classified as an aspect of sales promotions or public relations, though their connections to advertising are also manifest.

The Internet

_____ suffer(s) from issues such as difficulty in assessing taxes, unfair competition, import duties, and privacy.

Merchant middlemen

_____ take title to manufacturers' goods and assume the trading risks.

Advertising taxation

________ in countries can distort media choice by changing the cost ratios of various media.

keiretsu

a Japanese trading firm that consists of families of firms with interlocking stakes in one another

personal medium

a communication channel of communication that involves a salesperson calling on consumers.

consortia

a company created with the participation of three or more companies; allowed in undeserved markets or in domains where the government and the marketplace can control its monopolistic activity.

clearing account/ clearing agreement

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

international public relations

a concerted effort on the part of a company to generate goodwill among international publics that are essential to the company; its main purpose is to generate positive publicity about the company.

Due to differences in culture in different markets, standardized products that are marketed globally will require:

a different advertising appeal.

parallel imports

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

parallel imports/ gray market

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

managing agent

a foreign agent who has an exclusive arrangement with a company, representing its operations in a particular country.

parallel barter/ counterpurchase

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

countertrade

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

sogo- shosha

a large Japanese trading company that specializes i providing intermediary services, risk reduction through extensive information channels, and significant financial assistance to manufacturing firms.

offset purchase

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

import jobber

a merchant intermediary who purchases commodity goods from the manufacturer to sell to the trade(wholesaler, retailer, business-to-business client) in the target market.

distribution alliance

a nonequity relationship between two firms in which one firm handles the others distribution or some aspect of the distribution process

telemarketing

a personal channel of communication that involves a sales person calling on consumers.

local pricing

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

market-based transfer pricing

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

new product to existing market

a product never before offered to the market

false

a product's country of origin is always the country where the product was manufactured.

maturity stage

a stage of the IPCL characterized by a slowdown in sales growth as the product is adopted by most target consumers and by a leveling or decline in profits primarily due to intense price competition

corporate advertising

a type of advertising that is used to promote the company behind the different brands.

interactive home shopping

a venue for selling through the internet using web sites to increase market penetration and market diversification; also called electronic retailing and internet retailing.

global campaign

a worldwide standardized advertising campaign that is not adjusted to different target markets.

Janice works as a consultant for a tech company. In the past, the company has relied heavily on its toll-free line to sell new products, as well as its numerous distribution channels. When customers are polled via a customer satisfaction survey, 93 percent of them report that one of the primary reasons they have continued to support the company is because of its quality customer service. Janice has been asked to brainstorm strategies to increase company sales. She suggests that the company employs automatic merchandising to cut costs and boost profits. Why might automatic merchandising be a bad idea for this company? a. Automatic merchandising sales are impersonal. b. It is difficult to develop effective marketing strategies for automatic merchandising. c. Distribution for automatic merchandising is limited. d. Automatic merchandising is archaic. e. It is too costly to maintain automatic merchandising around the clock.

a. Automatic merchandising sales are impersonal.

You work for a food-processing plant that manufactures corn tortillas. You have been asked to review the activities of upstream management to determine if costs can be cut in that area. Which activities listed below will be your concern? a. Contacting the farming cooperative to negotiate the price of corn for your upcoming contract. b. Investigating the possibility of diversifying into producing not only corn tortillas but flour tortillas as well. c. Decreasing the cost resulting from returns due to improper handling and packaging of corn tortillas. d. Checking the feasibility of raising the price at which corn tortillas are sold to your business customers.

a. Contacting the farming cooperative to negotiate the price of corn for your upcoming contract.

You are one member of the marketing team for a wine distributor who sells exclusively through your own chain of high-volume shops. Your team wants to explore other available marketing channels, including sales over the Internet and product placement in specialty retailers. In order to come to a consensus, you want to outline some basic questions regarding distribution channels and present them to the team for discussion. The discussion should include all of the following questions except which one? a. How will exploring new distribution channels affect relationships with current intermediaries? b. What restrictions exist for shipping to communities that ban the sale of alcohol? c. How many intermediaries are necessary for adequate market coverage? d. Will selling at other retail outlets diminish control over marketing the product?

a. How will exploring new distribution channels affect relationships with current intermediaries?

Paul Lindsay is a logistics manager for a farm equipment manufacturer; he needs to move several tractor-trailers of farm equipment from the Midwest manufacturing plant to the East Coast distribution centers. This heavy equipment must travel a long distance—across country—and then over land to the various wholesalers that distribute them. What intermodal operation will allow Paul to combine long-hauling capacity with overland flexibility? a. Piggyback b. Fishyback c. Birdyback d. Run-through

a. Piggyback

Read the following excerpt from the article, "Lines separating sales channels blur: Manufacturers, direct sellers, retailers, invade each other's turf" by Tom Collinger in Ad Age (March 30, 1998) and then choose the best answer to the question posed below. Conflict in the channels has produced a total blurring of the lines that once separated them. First, there's the blur between manufacturers and retailers. Then, there's the explosion of discount outlet malls, which proudly expose the highest image-oriented brand names to the consumer—direct from the manufacturers.... In addition, because of the proliferation of these malls as legitimate channels, sales for the brands in this channel are in the multimillion-dollar range. Finally, there is the manufacturer and direct-seller blur caused by those manufacturers that recognize the need to gain back some of the control they have lost to retailers.... Some manufacturers have mined niches in the market where they believe direct selling is somehow less objectionable to their retail partners.... Access to the consumer through the Internet will only continue to blur the manufacturer/direct-seller lines, altering the fundamental selling proposition for manufacturers forever (retrieved from http://adage.com/article/news/lines-separating-sales-channels-blur-manufacturers-direct-sellers-retailers-invade-s-turf/66410/). What type of marketing channel conflict is being discussed in the above excerpt? a. Vertical conflict b. Strategic conflict c. Channel cooperation d. Horizontal conflict

a. Vertical conflict

A cowboy hat manufacturer was interested in knowing how to price his or her work based on data rather than "gut feelings." He or she found that pricing concepts involve a language of special terms. Fill in the blanks with the word or phrase from the drop-down list that is among these special terms and would best complete each sentence. Words may be used more than once. a. ______ refers to the portion of sales revenue left over after paying the product costs of cowboy hats. b. Target ________ are often based on norms in the hat industry. c. Cost-based pricing for cowboy hats uses the _______ plus a ______ to calculate the sales price. d. Another term for margin is _______.

a. margin b. markup percentages c. product cost, markup percentage d. gross profit

Of all the elements of the marketing mix, decisions involving which of the following is most often affected by cultural differences among country markets?

advertisement of the product

advocacy advertising

advertising a particular position or point of view.

________ are the major components in the marketing communications mix for most companies.

advertising and personal selling

objective-and-task method

an advertising budgeting method in which the company first identifies advertising goals, conducts research to determine the cost of achieving the respective goals, and allocates the necessary sum for the purpose.

image advertising

an advertising campaign that enhances perceptions of a company in a given market by creating a positive impression on the target consumers.

modular campaign

an advertising campaign that provides a template that is varied and customized from market to market.

manufacturer's representative

an agent who represents the manufacturer exclusively in the foreign target market.

historical method

an approach to budgeting that is based on past expenditures, usually giving more weight to more recent expenditures.

Norazi agent

an export agent dealing in illegal and gray market products.

indirect exporting

an export entry mode whereby a company sells its products in the company's home country to intermediaries who, in turn, sell the product overseas.

direct exporting

an export entry mode whereby a firm handles its own exports, usually with the help of an in- house exporting department.

licensing

an international entry mode that involves a licensor, who share the brand name technology, and know- how with a licensee in return for royalties.

publicity

any communication about a company and the company's products that the company does not pay for; may be positive or negative.

product- country stereotypes

associate the country of origin as a certification of quality Example: Swiss chocolate, German automotive engineering

Webb- Phomerene Associations

associations of competing companies that are granted immunity from antitrust prosecution and that join resources and efforts to export internationally.

Cultural Distance

attributes of a society sustained by interactions among people

cultural dimension

attributes of society sustained by interactions among people, greater cultural differences leads to lower amount of international trade (diff languages, ethnicities, religions, values, norms)

Sal is currently in the market for a new car. He considers various factors before making his purchase; for example, he considers gas mileage, power-train warranty, safety records, status, price, and convenience. He then makes a final list of six possible vehicles to purchase. However, after thinking about all these things, he dismisses them and decides instead to purchase the highest price vehicle. Based on this information, what is the most likely reason for Sal's decision? a. The list of important features to consider was too long and therefore there were too many comparisons to make easily. b. He assumed that the highest price car must also be the most prestigious and he would like to project a high-status image. c. The highest price vehicle was more effectively promoted than the alternatives. d. He neglected to set prices limits before making his decision.

b. He assumed that the highest price car must also be the most prestigious and he would like to project a high-status image.

For the last ten years, you have been the leading sales representative in your firm. Most of the other sales reps are in awe of you because they say you make personal selling look so easy. You know better, however, because it has not always been easy nor have you always been so successful. You have learned over the years that there are some key rules of personal selling that must be followed consistently for success. One of the rookie sales reps just asked you for some tips on success in personal selling. You told him or her to give you a list of his or her thoughts on what it takes to be successful in personal selling and you will start the discussion there. Select the true statement made by the rookie sales rep about successful personal selling tactics and approaches. a. It's impossible to anticipate a prospect's objections, so you should expect to address them on the fly. b. It's important to make sales presentations relevant and meaningful for the prospect. c. All this talk about pre-call planning is misguided. It's pointless to spend much time on it because it doesn't contribute much to sales success. d. Instead of wasting time trying to get referrals, you should work on becoming a cold calling expert.

b. It's important to make sales presentations relevant and meaningful for the prospect.

According to the Ad Age article "PennWell acquires Oil & Gas Pipeline Conference" (March 21, 2013), "The pipeline and transportation sectors of the industry are experiencing phenomenal growth due to the resurgence of exploration and drilling in North America" (retrieved from http://adage.com/article/btob/pennwell-acquires-oil-gas-pipeline-conference/288678/). Pipelines rank third after railroads and motor carriers in ton-miles transported, but most people do not recognize pipelines as a major mode of transportation. Nevertheless, pipelines are the preferred method used for transporting crude oil, diesel fuel, kerosene, and gasoline in the United States. What are some drawbacks to transporting via pipeline? a. Pipelines move products quickly through a long network. b. Pipelines can only carry liquids. c. Pipelines cannot be carried across the entire United States. d. Pipelines are undependable methods of transportation over time.

b. Pipelines can only carry liquids.

political risk factor

bad neighbours, authoritarianism, staleness, illegitimacy

service barriers

barriers encountered by services in different markets, such as requirements for local certification, local producers, and other requirements that favor local over international services providers

copyright

books, photos, music, fine art, graphic images, videos, films, architecture, computer programs -ex: Michael Jackson's thriller, windows operating system -protection: life of author + 70 years

You have noticed that the most profitable diners at your restaurant are repeat customers, so you've developed a program to reward their loyalty. On every fifth visit, they will receive a free dessert and specialty coffee. Which of the following statements about this reward program is accurate? a. It is likely to stimulate primary demand. b. Its promotional objective is to create awareness of your restaurant. c. Advertising could be used to further the same promotional objective. d. Advertising could not be used to further the same promotional objective.

c. Advertising could be used to further the same promotional objective.

A customer comes into your rental/retail outlet because he or she wants to purchase a 26-ton hydraulic log splitter. You have some models available for daily rental but they are not the latest model that your customer is looking for. There is a 26-ton model on the floor, but it would be most beneficial to show him or her firsthand the difference between your product and other cheaper models that are on the market. What demonstration options can you consider for your customer? Select the viable demonstration option. a. Describe the splitter's major features and give the customer printed specs to take home with him or her. b. Let the customer know that there is no delivery charge on the log splitter. c. Allow the customer to rent a comparable unit for a day and waive the rental fee upon the return of the splitter on time and in good condition. d. Tell the customer about your in-house financing option, whereby he or she can complete payment in six months with no interest.

c. Allow the customer to rent a comparable unit for a day and waive the rental fee upon the return of the splitter on time and in good condition.

Company A and Company B both raised their prices by 30 percent. While A enjoyed a substantial increase in profits, B's profits plunged downward. Based on this information, which of the following is the most likely explanation for the companies' different outcomes? a. A's product offers better value than B's. b. A's product is higher quality than B's. c. B's customers are more price sensitive than A's customers. d. A has more customers than B. e. A has a history of high prices, while B has only charged low prices.

c. B's customers are more price sensitive than A's customers.

You planned to use trend analysis to forecast sales of the new yogurt being introduced by your dairy products firm. However, the marketing director just informed you that trend analysis is inappropriate for this purpose. Assuming he or she is correct, what is his or her most likely reason? a. Because the product is new, historical data is too expensive to obtain. b. Trend analysis is an outdated forecasting technique. c. Because the product is new, historical data is not available. d. Trend analysis cannot be applied to the dairy products market.

c. Because the product is new, historical data is not available.

Marketers are concerned with distribution intensity, which is how many intermediaries will distribute the goods in a particular market. Select the description of the general categories of market coverage that is incorrect. a. In intensive distribution, items with wide appeal are distributed through as many channels as are available in a trade area. b. In selective distribution, the manufacturer will often provide training and assistance to the limited number of dealers it chooses to distribute its product. c. In controlled distribution, the manufacturer is forced by law to sell its own products. d. In exclusive distribution, a single wholesaler or retailer is granted the right to sell a product in a given area.

c. In controlled distribution, the manufacturer is forced by law to sell its own products.

A new boss just took over the marketing department where you work for a women's swimwear manufacturer. You hope to impress him or her with your knowledge of an important topic in your industry: How prices affect consumer perceptions of quality. You should make all of the following points except: a. Perceptions of quality may be affected by the eco-friendliness of a product. b. Perceptions of quality may be affected by both high and low prices. c. Supply and demand play no role in purchasing patterns when perceptions of quality are driven by price. d. It is common for consumers to define both upper and lower limits within which their quality perceptions vary.

c. Supply and demand play no role in purchasing patterns when perceptions of quality are driven by price.

A banana supplier sells to both supermarket chains and independent food stores in the same region. The supermarket chains always generate more revenue than the independent food stores, because the supermarket chains order bananas more frequently and in bigger volume. To increase his or her profits from the independent food stores, the supplier wants to charge them more per bushel than he or she charges the chains. However, the supplier's director of marketing advises against it. Which of the following is the most likely reason for this advice? a. This pricing policy might violate unfair trade laws. b. This pricing policy could cause a price war. c. This pricing policy might violate the Robinson-Patman Act. d. This pricing policy must be approved by the Federal Trade Commission.

c. This pricing policy might violate the Robinson-Patman Act.

Your sister recently opened a swanky three-floor cheese market, Fromagerie, which is quickly gaining attention from locals, the press, and restaurateurs in the area. Located near a college town, Fromagerie specializes in rare international cheeses; and on the top floor, there is a bistro where patrons can take cooking lessons, meet new people, dine, and sample some of the world's most savory cheeses before they make a purchase decision. The bistro element of the Fromagerie is primarily an example of your sister's retail strategy in the area of: a. merchandising b. atmospherics c. customer service d. promotion e. location

c. customer service

You own a mattress store called "Dream Better." Since people routinely compare your products to those offered by Sleepy's and other major competitors before making a purchase, you invest heavily in skilled salespeople and attractive displays. "Dream Better" is best classified as a: a. showroom store b. convenience retailer c. shopping store d. self-service retailer e. sales store

c. shopping store

Great Britain has epitomized distribution through specialty-type middlemen, distributors, wholesalers, and retailers. In recent years, however, there has been a trend toward broader lines, conglomerate merchandising, and mass marketing. This suggests that a firm that neglects the growth of self-service, scrambled merchandising, or discounting may find that it has lost large segments of its market only because its channels no longer reflect the ________ of the market

character

Mark Harmon has found that using his new digital camera is a snap. He did not even have to read the instruction manual to determine how to turn the camera on, snap a digital picture, and export the picture to his computer. The signs (symbols) on the camera body made it very clear what he was to do to achieve digital photography success. Which of the following characteristics of Mark's "new product" made it easy for him to begin his digital experience?

complexity

early adopters

consumers who purchase a product early in its product life cycle and who tend to be opinion leaders in their communities who take risks, but with greater discernment than innovators. They account for 13.5% of the total market

Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period. This is an example of problems associated with which of the following six Cs of distribution channel strategy?

continuity

design counterfeiting

copying designs or scents of another company

Berne convention covers what

copyrights

lag countries

countries where a product or services is adopted after already being introduced in lead countries

In the context of consumer products, which of the following is the major limitation of the Internet?

coverage of the internet

building channels

creating new distribution channels, especially necessary in situations where there are no channels at all, or there are no channels that conform to the needs of the company.

hard currency

currency that is accepted for payment by any international seller.

soft currency

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

Your temporary placement service needs to place personal selling personnel who use different communication channels according to the products they are contracted to sell. You presently have several positions to fill that require personnel experienced in various communication channels. You want to categorize the type of experience needed before you start calling your employees. Choose the statement that inaccurately categorizes its job description to the type of personal selling communication channel it utilizes. a. An insurance company needs sales representatives to place phone calls to prospective clients to sell renters' insurance over the phone. These sales representatives will use telemarketing. b. A retail outlet needs someone to sell auto repair supplies and parts to businesses and directly to customers. This outlet uses over-the-counter selling. c. Sales representatives are needed to support technicians and purchasers on a continuous basis by phone, mail, and e-mail. They will utilize inside selling. d. A soft drink distributor needs bilingual representatives to take product orders when customers call. This involves field selling.

d. A soft drink distributor needs bilingual representatives to take product orders when customers call. This involves field selling.

Public relations refers to a firm's communications and relationships with its various publics, including customers, suppliers, the government, employees, and stakeholders. The publicity that a company garners involves unpaid placement of significant news about the company in a published medium or through favorable presentations on the radio, Internet, or television. Why are consumers more likely to believe information that stems from the marketing aspect of public relations than they are to believe claims in advertising? a. Because many consumers appreciate when news comes directly from marketers instead of being filtered through a media organization. b. Because published information typically reflects bad news about companies, products, executives, and ideas. c. Because this information tends to be nonelectronic. d. Because many consumers consider news more credible when it comes from a media organization than when it comes directly from a marketer.

d. Because many consumers consider news more credible when it comes from a media organization than when it comes directly from a marketer.

You are a sales manager for a luxury automobile dealership where you have been employed since graduating from college. Your neighbor, who teaches a community college course on marketing, has asked you to make a presentation to his or her class as a guest speaker. After your lively presentation, you ask the students what they think is the main focus of personal selling. Which of the student answers below demonstrates an understanding of the goals of this promotional tool relative to others? a. Providing entry-level jobs to college graduates who will move on to other marketing jobs. b. Being the face of the company's brand. c. Making a profit for the company. d. Building relationships with customers that encourage them to come back.

d. Building relationships with customers that encourage them to come back.

You work for a weight loss company that is advertising a new weight loss smoothie. Here is a transcript of the first commercial to be aired on a local food network channel: "Do you have tenor more pounds of excess weight to shed? If so, you should be drinking Blast Berry before every meal! Blast Berry is a weight-loss supplement, and the first of its kind to be approved by the Food and Drug Administration. In a random controlled study, 75 percent of the research participants who used Blast Berry along with exercise dropped an average of 23 pounds within two months of following the program. Blast Berry costs $19.99 for a month's supply and works for those who stick to the plan. Drink one serving before each of the three major meals of the day, and see the weight come off!" Which of the following basic tasks of effective messaging does this message fail to accomplish? a. Achieving understanding by both the receiver and sender b. Stimulating the receiver's needs and suggesting an appropriate way to satisfy those needs c. Gaining the receiver's attention d. Communicating competitive advantage and positioning

d. Communicating competitive advantage and positioning

Ellie's media company will be introducing a new series of films on nutrition and exercise for adolescent health. Prior to introducing the films into the market, her company executives want to generate a buzz about the new products. So far, two of the five films have won prestigious awards at national film festivals. Ellie's superiors want to target youth-serving organizations in the Pacific Northwestern region of the United States as potential consumers of these films. They are searching for a quick way to distribute information about the products to potential customers, yet they do not want to sacrifice the personalized experiences that customers have come to associate with the company. Ellie's superiors would also like to be able to measure the performance response of whichever marketing strategy they implement. Which of the following should Ellie suggest that her superiors use to market their new products? a. Direct marketing b. Direct retailing c. Direct-response retailing d. Direct mail

d. Direct mail

You are contemplating adding direct selling activities to your existing bricks-and-mortar retail business to increase sales. You are concerned, however, that the negative aspects of direct selling outweigh the positive. Which of the following is a negative aspect of direct selling that you must mitigate in some way to be successful? a. Products are presented at convenient locations for customers. b. Customers get personal attention. c. Products are presented at convenient times for customers. d. It may be more expensive and time-consuming than using an intermediary. e. Direct selling is a less expensive form of retailing.

d. It may be more expensive and time-consuming than using an intermediary.

Luca's company is a manufacturer of desk calendars and other office supplies. In the past, he has sold only through his own website; however, as his business has grown, he has decided to add a retail partner. Which of the following is not among the questions Luca should ask when he chooses a partner? a. Which retailers attract buyers for home and commercial offices? b. Which retailers offer the most appropriate atmospherics for selling office supplies? c. Should his products be sold in an office supply specialty store? d. Should his products be sold via direct mail that provides tips about how to run an office?

d. Should his products be sold via direct mail that provides tips about how to run an office?

You have a colleague who swears by using breakeven analyses. He or she has not been on the job long enough to be able to understand the reasons why this tool isn't always reliable. Which of the following reasons should you share with him or her? a. Breakeven analysis is hard to calculate; and it is difficult to explain how the results are derived. b. Not everyone in the company understands or uses breakeven analyses. c. Breakeven analysis is outdated. d. The company's accounting system does not clearly distinguish between fixed and variable costs.

d. The company's accounting system does not clearly distinguish between fixed and variable costs.

The consumer sales promotions your company is offering has increased demand slightly, but you have come to realize that another way of putting your products in front of consumers is to incentivize resellers. You decide to investigate types of trade-oriented promotions to appeal to resellers and other market intermediaries. While these promotions will cost your company money, you believe the additional incentives to resellers will convince them to continue pushing your products. Choose the trade-oriented promotion technique below with the incorrect description. a. You believe that retailers will stock more of your products if you offer them one free case for every dozen cases they order. This is a type of trade allowance. b. You believe that you can showcase your new product line by displaying it and demonstrating it to industry associates, so you plan to use trade shows. c. You believe that if resellers are willing to feature your products prominently at the ends of shopping aisles, they would have a better chance of reaching their target market. You decide to provide resellers with special displays to stimulate sales of the promoted items. This illustrates POP advertising. d. You believe that offering free samples to consumers in the flagship stores of your major resellers will convince these resellers to give your products extra shelf space.

d. You believe that offering free samples to consumers in the flagship stores of your major resellers will convince these resellers to give your products extra shelf space.

Your family owns a commercial bakery that has always partnered with large food distributors that sell and deliver to supermarkets around the United States. You and your sister have recently taken over from the older generation and may consider other distribution options. Your sister is especially interested in shortening the distribution channel. Having more channel strategy experience than her, you explain that moving in this direction could involve all of the following actions except: a. buying delivery trucks with cooling systems to retard spoilage b. hiring a sales force experienced in selling baked goods c. planning a direct selling program to demonstrate the special characteristics of your packaging d. choosing a logistics company experienced in cross-country shipping

d. choosing a logistics company experienced in cross-country shipping

Marisol's online jewelry store originally sold only earrings and necklaces for women. After adding men's rings and cuff links, profits doubled. Given that success, Marisol may soon expand her product line to include unisex watches. Which of the following is a dimension of merchandising strategy that Marisol should consider? a. what type of repair service to offer b. when to open a brick-and-mortar outlet c. how to advertise the store d. the profitability of unisex watches

d. the profitability of unisex watches

Brand Positioning

define: marketers need to position their brands clearly in target customers' minds Lowest= product attributes Second=benefit Best= strong beliefs and values

Global Firm

define: operates in more than one country, gains marketing, production, R&D, and financial advantages not available to domestic competitors, sees the world as one market

The Price Elasticity of demand

define: sensitivity of demand to price inelastic: demand hardly changes with a small change in price elastic: demand changes greatly when price changes

Deciding how to Enter the Market

determine best mode of entry 1. Exporting: when company produces its goods in the home country and sells them in foreign market. A. Indirect exporting: usually start with this, working through independent international marketing intermediaries. Less risk. B. Direct Exporting: handle their own exports. Risk are somewhat greater. Advantage: simplest means and involves least change in the companies product lines, organization, investment, or mission 2. Joint Venturing: when a firm joins with a foreign company to produce or market products or services A. Licensing: enters market by coming up with an agreement with a licensee in the foreign market. Less control over the licensee and if very successful they give up some profits and potential competitor. B. Contract Manufacturing: when a firm contracts with manufactures in the foreign market to produce its product or provide its service. Faster startup, less risk, opportunity to form partnership or buy out local manufacturer. Drawbacks include decreased control over manufacturing process and loss of potential profits and manufacturing. C. Management contracting: when the domestic firm supplies management skills to a foreign company that supplies capital. Firm is exporting management services rather than products. (ex: Hilton hotels) D. Joint Ownership: when one company joins forces with foreign investors to create a local business in which they share joint ownership and control. 3. Direct Investment: development of foreign-based assembly or manufacturing facilities and offers a number of advantages including labor, logistics, control, government incentives, lower costs, raw material. Disadvantages is it is risky, lower currencies, falling economy,etc.

true

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

true

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

After working in retail for about a decade, Lynette decided to open her own shop. For years, she had been interested in learning about handbags and collected vintage purses. Naturally, Lynette was going to open a handbag shop. Because she knows just how expensive designer bags could be, she also decided to find ways to cut the costs associated with running a store so she could increase customer bargains. Lynette's store is open five days a week from 12 noon to 6 p.m. Which of the following types of retailers accurately reflect Lynette's store? a. Department store b. Chain store c. Convenience retailer d. Mass merchandiser e. Specialty store

e. Specialty store

The following statements link various changing circumstances (causes) with effects on the breakeven point. Which of these statements is inaccurate? a. A price increase results in a breakeven point decrease. b. Hiring extra staff causes breakeven point to increase. c. When a price war forces a price cut, breakeven point increases. d. When automation replaces workers, fixed cost increases while variable cost decreases; the effect on breakeven point varies. e. When a recession cuts demand, breakeven point increases.

e. When a recession cuts demand, breakeven point increases.

The International trade systems- regional free trade zones

economic communities: groups of nations organized to work toward a common goals in regulating international trade, free trade zones European Union (EU):economic community, set out to create single european market, currently has 27 members -adoptions of common currency has caused problems as European economic powers such as Germany and France have had to step in recently to prop up weaker economies such as Greece and Portugal North American Free Trade Agreement (NAFTA): established free trade zone among the united states, mexico, and canada Central American Free Trade Association (CAFTA): established free trade zone between the U.S, Costa Rica, Dominican Republic, El Salvador, Guatamala, Honduras, and Nicaragua

Cremics, a multinational drug manufacturing company, used a saffron trident in a promotional campaign for one of its drugs in India. The saffron trident, a religious symbol in India, was meant to indicate the three levels of efficacy of the drug but mistakenly conveyed a religious message to Indians. This miscommunication indicates a problem associated with which of the following steps of an international communications process?

encoding

Whats the percentage of new products that fail for established companies? Start-up companies?

established companies: 67% start-up companies: 90%

Exchange Controls and Nontariff trade barriers

exhange controls: are a limit on the amount of foreign exchange and the exchange rate against other currencies nontariff barriers: are biases against bids or restrictive product standards that go against American product features (ex: business in China receive scrutiny and harsh treatment from authors aimed at boosting the fortunes of local competitors)

Cost as a function of production experience

experience curve (learning curve): the drop in the average cost with accumulated production experience a. downward-sloping experience curve: unit production falls. Price products low so sales will increase.

A major disadvantage of ________ is that they can seldom afford to make the kind of market investment needed to establish deep distribution for products.

export management companies

degree of product/ service newness

extent to which a product is new to the market in general or to a group on consumers

A(n) ________ is a domestic middleman set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property

foreign sales corporation

In the context of the types of domestic middlemen, the WTO in 2003 ruled ________ to be in violation of international trade rules, thus starting a major trade dispute with the European Union.

foreign sales corporations

all-purpose discount stores

general merchandise discount stores that offer a wide variety of merchandise and limited depth

global consumers

homogeneous consumer group worldwide sharing similar interests and product/brand prefernces

Operational equivalence

how constructs are operationalised to make measurements (HH income is difficult to compare across countries because differences in tax structure)

conceptual equivalence

how the same concept is treated/reacted to in different countries (tan skin in china vs. US)

scalar equivalence

if other types of equivalences have been obtained, two people with the same values should have the same answers if tested

category equivalence

if products that are essentially the same can be used in two countries (coke vs other beverages, Mecca Cola)

functional equivalence

if the same product has the same function in two countries (warm milk before bed vs at breakfast)

The only way to avoid linguistic problems in advertising communication is by:

in-country testing with the target consumer group.

late majority

individuals of limited means who are likely to adopt products only if the products are widely popular and the risk associated with buying them is minimal. They account for 34% of the total market

Polychronic

individuals who tend to perform multiple tasks at once; for these individuals, time is not linear but fluid. They are less likely to adhere to schedules, and the consider business as an opportunity for socializing

International marketing involvement: the last 3 types

involve strategic planning & decisions about international marketing -Regular foreign marketing -International marketing -global marketing

trading companies

large companies that specialize providing intermediary services, risk reduction through extensive information channels, and significant financial assistance to manufacturing firms.

hypermarkets

large retail stores that combine supermarket, discount, and warehouse retailing principles.

superstores

large retailers such as combination stores or hypermarkets that sell food, drugs, and other products.

administrative dimension

laws, policies, government run institutions, international organisations, treaties

A(n) ________ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that covers only one or two markets.

manufacturer's export agent

International marketing involvement first 2 types

more reactive in nature & don't involve careful strategic marketing -no direct foreign marketing -infrequent foreign marketing

international promotional mix

the different modes of communication with international consumers about products and services, using international avbertising, international sales force management, international sales promotion, public relations, and publicity.

wholly owned subsidiary

the entry mode that affords the highest level of control and presents the highest level of risk to a company; it involv

Psychic Distance

the factors preventing or disturbing firms from learning about and understanding of a foreign market

franchising

the main international entry mode for the service industry, whereby the franchisor gives the franchisee the right to use its brand name and all related trademarks in return for royalties.

switch trading

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

standardization of the advertising strategy

the process of globalizing a company's promotional strategy so that it is uniform in all its target markets.

decoding

the process whereby the target consumer receives the message from the advertiser and translates it into meaningful information.

sender

the sponsor of an advertisement, usually represented by an advertising agency, who encodes the message into words and images and communicates it to the target market.

decline stage

the stage of the IPLC in which products are rapidly losing ground to new technologies or product alternatives, casing a decrease in sales and profits

offshoring

the strategic use of outside resources to perform activities that are usually handled by internal staff and resources

nonmandatory adaptation

the strategy of adapting a product to better meet the needs of the local market, without being required to do so

product placement

the strategy of placing brands in movies with the purpose of promoting the products to viewers.

competitive-parity method

the strategy of using competitors' level of advertising spending as a benchmark for the company's own advertising expenditures.

core product strategy

the strategy of using the same standard core product/services worldwide, but varying certain aspects of the offering (product ingredients, advertising) from market to market

One of the drawbacks of satellites, which is also their strength, is:

their ability to span a wide geographical region.

global localization

to adapt: - minimize standardization and customization - minimize cost while maximizing satisfaction - think globally, act locally - essence of segmentation

customer perceived value

to create value for customers by improving benefits or reduce the cost of the product - improve the product - find new distribution channels - create better communications - cut monetary and non monetary costs

In a ________ distribution structure, an importer controls a fixed supply of goods and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

traditional

cooperative exporting

using the distribution system of exporters with established systems of selling abroad who agree to handle the export function of a noncompeting (but not necessarily unrelated) company on a contractual basis; also called mother henning and piggy backing

Because a service is individually produced and is virtually unique, the service is said to have _____.

variability

In _____ pricing, the firm is concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets.

variable-cost

Low-context -United States -Canada -Germany -Switzerland

what is said is precisely what is meant.

C

which of the following is NOT an external economic or financial factor affecting pricing decisions? A. inflation pressure on price. B. shortage of hard currency. C. transfer pricing. D. fluctuation exchange rates.

In the context of media planning and analysis, billboards are especially useful in countries:

with high illiteracy rates

trademark

words, symbols, logos, designs, slogans -protection lasts as long as trademark is in use

Which of the following has proved to be an important way to break the trade barrier imposed by the Japanese distribution system? A. Direct sales through catalogs B. Large wholesale stores C. Street corner kiosks D. Internet shopping E. Television advertising

A. Direct sales through catalogs Direct sales through catalogs have proved to be a successful way to enter foreign markets. In Japan, it has been an important way to break the trade barrier imposed by the Japanese distribution system.

Which of the following statements is true regarding an import-oriented distribution structure? A. The importer-wholesaler traditionally performs most of the marketing functions. B. The relationship between the importer and any middleman is similar to that found in a mass-marketing system. C. Several independent agencies providing functions such as advertising, marketing research, financing are part of this distribution structure. D. The idea of a channel as a chain of intermediaries performing specific activities is common. E. This distribution system is national in scope.

A. The importer-wholesaler traditionally performs most of the marketing functions. An import-oriented distribution structure is considered as a traditional distribution structure. The import-oriented distribution systems are local rather than national in scope, and the relationship between the importer and any middleman in the marketplace is considerably different from that found in a mass-marketing system. Since the importer-wholesaler traditionally performs most marketing functions, independent agencies that provide advertising, marketing research, warehousing, and storage are nonexistent or underdeveloped.

Which of the following is the reason why global retailers like IKEA, Costco, Sears Roebuck, and Walmart are becoming major domestic middlemen for international markets? A. They maintain their core marketing approaches while localizing the array of products, promotions, and other peripheral aspects of their operations. B. They work under the names of the manufacturers and function as low-cost, independent marketing departments with direct responsibility to the parent firms. C. They have minimum investment costs as they do not commit to investing in company personnel. D. They serve as the producer's export department but have a short-term relationship, cover only one or two markets, and operate on a straight commission basis. E. They offer reduction of export costs, demand expansion through promotion, trade barrier reduction, and improvement of trade terms through bilateral bargaining.

A. They maintain their core marketing approaches while localizing the array of products, promotions, and other peripheral aspects of their operations. As global retailers like IKEA, Costco, Sears Roebuck, Toys "R" Us, and Walmart expand their global coverage, they are becoming major domestic middlemen for international markets. Their successes seem to result from maintaining their core marketing approaches while localizing the array of products, promotions, and other peripheral aspects of their operations.

Great Britain has epitomized distribution through specialty-type middlemen, distributors, wholesalers, and retailers. In recent years, however, there has been a trend toward broader lines, conglomerate merchandising, and mass marketing. This suggests that a firm that neglects the growth of self-service, scrambled merchandising, or discounting may find that it has lost large segments of its market only because its channels no longer reflect the _____ of the market. A. character B. continuity C. control D. cost E. capital requirement

A. character Channel captains must be aware that channel patterns change; they cannot assume that once a channel has been developed to fit the character of both company and market, no more need be done. Great Britain, for example, has epitomized distribution through specialty-type middlemen, distributors, wholesalers, and retailers; in fact, all middlemen have traditionally worked within narrow product specialty areas. In recent years, however, there has been a trend toward broader lines, conglomerate merchandising, and mass marketing.

In the context of the use of the Internet in international marketing channels, technically, e-commerce is a form of _____ selling. A. direct B. parallel C. dual D. mass E. targeted

A. direct Technically, e-commerce is a form of direct selling; however, because of its newness and the unique issues associated with this form of distribution, it is important to differentiate it from other types of direct marketing. E-commerce is used to market B2B services, consumer services, and consumer and industrial products via the World Wide Web. It involves the direct marketing from a manufacturer, retailer, service provider, or some other intermediary to a final user.

A major disadvantage of _____ is that they can seldom afford to make the kind of market investment needed to establish deep distribution for products. A. export management companies B. trading companies C. import associations D. global retailers E. complementary marketers

A. export management companies A major disadvantage of export management companies is that they seldom can afford to make the kind of market investment needed to establish deep distribution for products because they must have immediate sales payout to survive.

In the context of the types of domestic middlemen, the WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union. A. foreign sales corporations B. direct marketing partnerships C. trading companies D. export promotion companies E. Webb-Pomerene export associations

A. foreign sales corporations

_____ has long been considered the most effective nontariff barrier to the Japanese market. A. Population in Japan B. Distribution in Japan C. Culture in Japan D. Import and export procedures in Japan E. Intense competition in Japan

B. Distribution in Japan Distribution in Japan has historically been considered the most effective nontariff barrier to the Japanese market. However, the market is becoming more open as many traditional modes of operation are eroding in the face of competition from foreign marketers and as Japanese consumers continue to focus on lower prices.

Which of the following distribution structures is also known as a traditional distribution structure? A. Export-oriented B. Import-oriented C. Manufacturer-oriented D. Service-oriented E. Customer-oriented

B. Import-oriented An import-oriented distribution structures is also known as a traditional distribution structure.

In a _____ distribution structure, an importer controls a fixed supply of goods and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. A. domestic B. traditional C. manufacturer-oriented D. service E. customer-oriented

B. In an import-oriented or traditional distribution structure, an importer controls a fixed supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. In the resulting seller's market, market penetration and mass distribution are not necessary because demand exceeds supply, and in most cases, the customer seeks the supply from a limited number of middlemen.

Which of the following makes Walmart's transactions with suppliers highly efficient and lowers its cost of operations? A. Clean business reputation B. Internal Internet-based system C. Ability to beat competitors D. Outreach programs to placate small retailers E. Ability to influence foreign governments

B. Internal Internet-based system One of Walmart's strengths is its internal Internet-based system, which makes its transactions with suppliers highly efficient and lowers its cost of operations.

Apex Corp. is a wholesaler for Global Electronics in the French market. Global Electronics discovered that Apex Corp. was diverting some of its goods to the English market. Apex Corp. could get a greater profit in the English market because the goods were bought by the firm at a cheaper price in France. In the context of the above scenario, which of the following forms of business is Apex engaged in? A. Black marketing B. Parallel importing C. Backwashing D. Industrial piracy E. Smuggling

B. Parallel importing A company's goods intended for one country are sometimes diverted through distributors to another country, where they compete with existing retail or wholesale organizations. This is known as parallel importing or secondary wholesaling.

Which of the following actions should be taken to begin the search for prospective middlemen? A. Short-listing the middlemen B. Studying the target market C. Evaluating the available financial resources D. Designing the sales force required E. Understanding the mission of the manufacturing firm

B. Studying the target market The search for prospective middlemen should begin with study of the market and determination of criteria for evaluating middlemen servicing that market.

Which of the following statements is true regarding agent middlemen? A. They take title to the merchandise. B. They work on commission and arrange for sales in the foreign country. C. Manufacturers cannot control them as much as they control merchant middlemen. D. They do not represent the best interests of the manufacturer. E. They assume trading risks.

B. They work on commission and arrange for sales in the foreign country. Agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise.

A disadvantage when using home-country middlemen as intermediaries in the distribution process is the: A. large financial investment required. B. limited control over the distribution process. C. large managerial investments required. D. limited number of retailers in the foreign country who can be reached. E. large amount of commission.

B. limited control over the distribution process. A major trade-off when using home-country middlemen is limited control over the entire process. Domestic middlemen are most likely to be used when the marketer is uncertain or desires to minimize financial and management investment.

In the context of factors affecting choice of channels, which of the following is one of the key elements in distribution decisions? A. Selection of optimum container sizes B. Volume discounts and rebates C. Functions performed by middlemen D. Local advertising modes E. Target market culture

C. Functions performed by middlemen Distribution channels vary depending on target market size, competition, and available distribution intermediaries. Key elements in distribution decisions include the functions performed by middlemen (and the effectiveness with which each is performed), the cost of their services, their availability, and the extent of control that the manufacturer can exert over middlemen activities.

In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the _____. A. Transport and Tourism Department B. Internal Affairs and Business Council C. Ministry of International Trade and Industry D. Health and Welfare Committee E. Local Retailers Union

C. Ministry of International Trade and Industry In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the Ministry of International Trade and Industry.

Which of the following statements is true of the Japanese market? A. The costs of Japanese consumer goods are among the lowest in the world. B. Manufacturers are independent of wholesalers for a multitude of services to other members of the distribution network. C. The Japanese distribution structure supports long-term dealer-supplier relationships. D. Japanese law favors the establishment of large retail stores. E. Japanese consumers favor price over personal service.

C. The Japanese distribution structure supports long-term dealer-supplier relationships. Coupled with the close economic ties and dependency created by trade customs and the long structure of Japanese distribution channels is a relationship-oriented business philosophy that emphasizes loyalty, harmony, and friendship. The value system supports long-term dealer-supplier relationships that are difficult to change as long as each party perceives economic advantage.

Which of the following statements is true regarding merchant middlemen? A. They represent the best interests of a manufacturer. B. They can be controlled better than agent middlemen. C. They assume trading risks. D. They work on commission and arrange for sales in the foreign country. E. They do not take title to manufacturers' goods.

C. They assume trading risks.

Complementary marketing is commonly known as _____. A. backhauling B. demand shifting C. piggybacking D. shape shifting E. skimming

C. piggybacking

James Barker is the marketing manager of a firm with small international sales volume. He is looking for a middleman who can take responsibility for promotion of the company's products, credit arrangements, physical handling, and market research. Also, the middleman must be able to provide information on financial, patent, and licensing matters. In addition, the middleman should agree to work under the name of the firm. Which of the following types of middlemen would be the best choice for Mr. Barker if he wants to meet his objectives? A. A manufacturer's export agent B. An export merchant C. A trade representative D. An export management company E. A complementary marketer

D. An export management company The EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm. The export management company may take full or partial responsibility for promotion of the goods, credit arrangements, physical handling, market research, and information on financial, patent, and licensing matters.

Which of the following is true of the distribution process? A. It does not involve the physical handling and distribution of goods. B. It includes activities related to the promotion of goods and services. C. The ownership title remains with the distributor even on completion of the transaction. D. It includes buying and selling negotiations. E. The behavior of channel members is not affected by the cultural environment.

D. It includes buying and selling negotiations. In every country and in every market, urban or rural, rich or poor, all consumer and industrial products eventually go through a distribution process. The distribution process includes the physical handling and distribution of goods, the passage of ownership (title), and—most important from the standpoint of marketing strategy—the buying and selling negotiations between producers and middlemen and between middlemen and customers.

Who are frequently criticized for not representing the best interests of a manufacturer? A. Global wholesalers B. Trading companies C. Consumers D. Merchant middlemen E. Brokers

D. Merchant middlemen Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen. Because merchant middlemen primarily are concerned with sales and profit margins on their merchandise, they are frequently criticized for not representing the best interests of a manufacturer.

_____ is a subject area that should be on the checklist of criteria for evaluating middlemen servicing a market. A. Flexibility B. Hypersensitivity C. Cultural empathy D. Productivity E. Breadth of knowledge

D. Productivity The checklist of criteria differs according to the type of middlemen being used and the nature of their relationship with the company. Basically, such lists are built around four subject areas: productivity or volume, financial strength, managerial stability and capability, and the nature and reputation of the business.

_____ are considered to be the foundation of the Japanese distribution system. A. Consumers B. Brokers C. Manufacturers D. Small retailers E. Wholesalers

D. Small retailers The Japanese system has four distinguishing features: (1) a structure dominated by many small middlemen dealing with many small retailers, (2) channel control by manufacturers, (3) a business philosophy shaped by a unique culture, and (4) laws that protect the foundation of the system—the small retailer.

A _____ provides a selling service for a manufacturer, has a short-term relationship, and operates on a straight commission basis. A. manufacturers' retail store B. trading company C. global retailer D. manufacturer's export agent E. complementary marketer

D. manufacturer's export agent

Which of the following arrangements is undertaken when a firm wants to keep its seasonal distribution channels functioning throughout the year? A. Price skimming B. Using the services of a trading company C. Establishing a retail store D. Using the services of an export management company E. Complementary marketing

E. Complementary marketing Most complementary marketing arrangements are undertaken when a firm wants to fill out its product line or keep its seasonal distribution channels functioning throughout the year. Companies may work either on an agency or merchant basis, but the greatest volume of piggyback business is handled on an ownership (merchant) purchase-and-resale arrangement.

Which of the following statements is true regarding an export management company (EMC)? A. It acts as a middleman for firms with relatively large international sales volume. B. It operates under its own name while providing services to another firm. C. It does not have direct responsibility to the parent firm. D. It acts as a middleman for firms willing to involve their own personnel in international functions. E. It calls for minimum investment from the parent firm to get into international markets.

E. It calls for minimum investment from the parent firm to get into international markets. The export management company (EMC) is an important middleman for firms with relatively small international volume or those unwilling to involve their own personnel in the international function. Two of the chief advantages of EMCs are minimum investment on the part of the company to get into international markets, and no commitment of company personnel or major expenditure of managerial effort.

Which of the following is true of a physical distribution system? A. It involves only the physical movement of goods. B. It is a total systems approach to the management of the distribution process. C. It includes decisions involving an activity that has no impact on the cost and efficiency of one or all others. D. It excludes the interdependence of the costs of each activity. E. It includes transportation mode, inventory quantities, and packing.

E. It includes transportation mode, inventory quantities, and packing. A physical distribution system involves more than the physical movement of goods. It includes the location of plants and warehousing (storage), transportation mode, inventory quantities, and packing. The concept of physical distribution takes into account the interdependence of the costs of each activity; a decision involving one activity affects the cost and efficiency of one or all others. In fact, because of their interdependence, the sum of each of the different activity costs entails an infinite number of "total costs."

In the context of cultural reactions when engaging in e-commerce, the color red is associated with socialism in _____. A. the United States B. China C. Brazil D. Uruguay E. Spain

E. Spain The different cultural reactions to color can be a potential problem for websites designed for global markets. While red may be highly regarded in China or associated with love in the United States, in Spain it is associated with socialism.

Which of the following, according to experienced exporters, is the only way to select a middleman? A. Conduct a background check on all the distributors available in the target market B. Issue a request-for-proposal to all distributors in the target market and evaluate their responses C. Consult other manufacturers of similar products and select the distributor recommended by them D. Consult trade organizations and select the distributor recommended by them E. Talk personally to ultimate consumers to find whom they consider to be the best distributors

E. Talk personally to ultimate consumers to find whom they consider to be the best distributors Experienced exporters suggest that the only way to select a middleman is to go personally to the country and talk to ultimate users of your product to find whom they consider to be the best distributors. Visit each possible middleman once before selecting the one to represent you; look for one with a key person who will take the new product to his or her heart and make it a personal objective to make the sale of that line a success.

Which of the following statements is true of a traditional distribution structure? A. The distribution system is national in scope. B. The relationship between the importer and any middleman is similar to that found in a mass-marketing system. C. The idea of a channel as a chain of intermediaries performing specific activities and each selling to a smaller unit beneath it until the chain reaches the ultimate consumer is common. D. Independent agencies providing functions such as advertising, marketing research, and financing are part of this distribution structure. E. The marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

E. The marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. In an import-oriented or traditional distribution structure, an importer controls a fixed supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. In the resulting seller's market, market penetration and mass distribution are not necessary because demand exceeds supply, and in most cases, the customer seeks the supply from a limited number of middlemen.

A physical distribution system involves only the physical movement of goods.

FALSE A physical distribution system involves more than the physical movement of goods. It includes the location of plants and warehousing (storage), transportation mode, inventory quantities, and packing.

Merchant middlemen tend to be more controllable than agent middlemen because they take title to manufacturers' goods.

FALSE Agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise. Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen.

Legal advice is not necessary when entering distribution contracts with middlemen.

FALSE Competent legal advice is vital when entering distribution contracts with middlemen. But as many experienced international marketers know, the best rule is to avoid the need to terminate distributors by screening all prospective middlemen carefully.

Domestic middlemen offer many advantages for companies with large international sales volume.

FALSE Domestic middlemen offer many advantages for companies with small international sales volume, those inexperienced with foreign markets, those not wanting to become immediately involved with the complexities of international marketing, and those wanting to sell abroad with minimal financial and management commitment.

For most companies, trade shows and direct selling are the major components in the marketing communications mix.

FALSE For most companies, advertising and personal selling are the major components in the marketing communications mix.

In an import-oriented distribution structure, supply often exceeds demand.

FALSE In an import-oriented or traditional distribution structure, an importer controls a fixed supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. In the resulting seller's market, market penetration and mass distribution are not necessary because demand exceeds supply, and in most cases, the customer seeks the supply from a limited number of middlemen.

In the United States, if a middleman is terminated, the company is required to pay 1 percent of the middleman's average annual compensation multiplied by the number of years the middleman served as a final settlement.

FALSE In the United States, termination is usually a simple action regardless of the type of middlemen; they are simply dismissed. However, in other parts of the world, the middleman often has some legal protection that makes termination difficult.

In a traditional distribution structure, distribution systems are national rather than local in scope.

FALSE In the traditional distribution structure, distribution systems are local rather than national in scope, and the relationship between the importer and any middleman in the marketplace is considerably different from that found in a mass-marketing system. The idea of a channel as a chain of intermediaries performing specific activities and each selling to a smaller unit beneath it until the chain reaches the ultimate consumer is not common in an import-oriented system.

In the context of distribution structures, one of Walmart's strengths is its ability to influence foreign governments.

FALSE One of Walmart's strengths in distribution is its internal Internet-based system, which makes its transactions with suppliers more efficient and lowers its cost of operations.

In the context of distribution patterns, wholesaling shows a greater diversity in its structure than does retailing.

FALSE Retailing shows even greater diversity in its structure than does wholesaling.

The Japanese distribution structure is similar to the one found in the United States or in Europe.

FALSE The Japanese distribution structure is different enough from its U.S. or European counterparts that it should be carefully studied by anyone contemplating entry. The Japanese system has four distinguishing features: (1) a structure dominated by many small middlemen dealing with many small retailers, (2) channel control by manufacturers, (3) a business philosophy shaped by a unique culture, and (4) laws that protect the foundation of the system—the small retailer.

A distinguishing characteristic of the Japanese distribution channel system is that it is controlled by a few small retailers found in the country.

FALSE The Japanese system has four distinguishing features: (1) a structure dominated by many small middlemen dealing with many small retailers, (2) channel control by manufacturers, (3) a business philosophy shaped by a unique culture, and (4) laws that protect the foundation of the system—the small retailer.

The distribution channel process includes all activities, beginning with the manufacturer and ending with the retailer.

FALSE The distribution channel process includes all activities, beginning with the manufacturer and ending with the final consumer. This inclusion means the seller must exert influence over two sets of channels: one in the home country and one in the foreign-market country.

The distribution process includes promotion of goods and services by sellers and resellers.

FALSE The distribution process includes the physical handling and distribution of goods, the passage of ownership (title), and—most important from the standpoint of marketing strategy—the buying and selling negotiations between producers and middlemen and between middlemen and customers.

An e-vendor in a foreign market can generally ignore culture as an important variable because the commerce is being done via the Internet, which is culturally insensitive.

FALSE The website and the product must be culturally neutral or adapted to fit the uniqueness of a market, because culture does matter.

Export management companies work under their own names

FALSE Typically, the EMC becomes an integral part of the marketing operations of its client companies. The export management companies work under the names of the manufacturers. An export management company functions as a low-cost, independent marketing department with direct responsibility to the parent firm.

Using foreign-country middlemen moves the manufacturer away from the market and the company becomes less involved with problems of language, physical distribution, communications, and financing.

FALSE Using foreign-country middlemen moves the manufacturer closer to the market and involves the company more closely with problems of language, physical distribution, communications, and financing. Foreign middlemen may be agents or merchants, they may be associated with the parent company to varying degrees, or they may be hired temporarily for special purposes

An export management company functions as a low-cost, independent marketing department with direct responsibility to the parent firm.

TRUE Typically, the export management company (EMC) becomes an integral part of the marketing operations of its client companies. Working under the names of the manufacturers, the EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm. The working relationship is so close that customers are often unaware they are not dealing directly with the export department of the company.

Defining Rural Distribution

•Depending upon the product, customer and operating environment, a rural distribution channel must demonstrate one or more of the following nine capabilities: 1.) Physical Distribution •Transportation, storage, etc 2.) Promotion •Capability to develop powerful messages 3.) Credit and Financing •Access to alternative source of capital 4.) Post Sales Service •Ability to execute repair/fulfillment 5.) Information •Access to primary and secondary information 6.) Contact •Regular outreach with target customers 7.) Matching •Ability to understand different needs of various customer segments 8.) Negotiation •Knowledge of end customers product alts. 9.) Risk-Taking •Ability to understand PLCs and customer purchasing patterns