Global Marketing

Oligopoly

: a market structure characterized by a small number of sellers who control the market

Price skimming

: a strategy of high price is charged to 'skim the cream' from the top end of the market with the objective of achieving the highest possible contribution in a short time. As competition rises, the price is gradually lowered or as segments are targeted, the price lowers to attract them. Must be a unique product. Has problems such as being vulnerable to competition, has to be high quality and have local presence, black market if the product is made cheaply in one country.

Price-escalation

: all cost factors (e.g. firms' net ex-works price, shipping costs, tariffs, distributor mark-up) in the distribution channel ad up and lead to price escalation. The longer the distribution channel, the higher the final price in the foreign market.

Methodology of picking top global brands. 3 key elements:

Financial analysis (economic profit) Role of brand (portion of the purchase decision attributable to the brand only) Brand strength (ability of brand to create loyalty and create sustainable demand in the future)

Trends up to the 90's for Global Brands

Local brand launches/no international verification Mergers-acquisitions between companies and their brands

A typology (classification) of subcontracting

Low to high task complexity and degree of coordination

Customer perceived value

Value they get (product benefits + service benefits) / What they give or pay (direct costs and indirect costs)

Forward and backward integration systems help develop...

Vertical marketing systems - channel acts as one. Vertical integration. -pricing and promotion decisions are decided together and agree on 1 plan

Small and large firms are more likely to be on an equal footings as far as global competition is concerned

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E-services:

a business activity of value exchanges that is accessible through electronic networks, which include the internet and mobile networks. It involves distributing and personalizing resources in real-time over the internet.

Sponsorship

a business relationship between a provider of funds, resources, or services and an individual, event or organization which offers in return some rights and association that may be used for commercial advantage.

Crowd-sourcing:

a company or institution that takes a function once performed by employees and outsources it to an undefined and large community of people in the form of an open call. Asking the customers for ideas on products or services etc.

Shared value

a company's strategies and operating practices that globally enhance the competitiveness of the company, while simultaneously advancing the social conditions in the international communities in which it operates.

Value net

a company's value creation in collaboration with suppliers and customers (vertical network partners) and complimentors (add value to mutual competitor, McAfee, and intel for PC's) and competitors (horizontal network partners)

Embargoes

a complete ban on trade in one or more products with a particular country (imports and exports)

Analogy

a correlation value (between a factor and the demand for the product) for one market is sued in another international market. Ex: Nearly all households are equipped in both countries -> correlation: number of households (or population size) France: population 66.9 million. Sales of fridges: 2.7 million units. Germany: Population: 82.7 million, sales of fridgers (82.7/66.9) X 2.7 = 3.3 million units.

Agent

an independent company that sells on to customers on behalf of the manufacturer (exporter). Usually it will not see or stock the product. It profits from a commission (typically 5-10%) paid by the manufacturer on a pre-agreed basis.

Traditional marketing approach

marketing focus on the firm's core competences combined with opportunities in the foreign environment. Firm must have a competitive advantage that overcomes the cost of foreignness

Dual marketing

marketing the same product to two different customer groups, typically both consumers (B2C) and business customers (B2B), through two different distribution channels.

What to do for...low-priced high turnover convenience products

maximize the geographic coverage

Feed forward control

monitors variables other than performance - variables that may change before performance itself. In this way, deviations can be controlled proactively before their full impact has been felt.

Non-verbal language

more important in high-context cultures: time, space, (conversational distance between people), material possessions, friendship patters and business agreements

Expanded subcontracting

mutual specialization between the two parties and exit costs are higher for both parties. Since sourcing (one supplier for a product/component) may replace multi-sourcing (more suppliers for a product/component)

Negotiated price mechanism

negotiation back and forth on price. Starts from a fixed price.

Fixed price mechanism

negotiation is not allowed, 1 price no matter what and customer decides to buy or not

BRIC

new growth markets of the world Brazil, Russia, India, and China

Sensory branding

normally brand communication involves just two senses- sight and hearing. Sensory branding involves all five senses: sight, hearing (sound), smell, touch and taste.

Channel length

number of levels (middlemen) in the distribution channel

Partnership based subcontracting

relationship based on a strong mutual strategic value and dependency. Subcontractor is highly involved in the R&D activities of the contractor

Organizational perspective

relationship between buyer and seller influenced by... -characteristics of each firm's technology -complexity of products sold -relationship characteristics (one time sale or stable relationship)

Low-context cultures

rely only on spoken language (get everything down in the written contract) Low degrees of complexity in communication. Direct and explicit (Western Europe, US), Swiss, German Scandinavians.

Regiocentric orientation

represented by a region of the world

Additional costs when selling on international markets

taxes, tariffs, and administrative costs, inflation, exchange rate fluctuations, middleman and transportation costs.

Monochronic time (M-Time)

tend to concentrate on one thing at a time, divide time into small units and are concerned with promptness

Transaction costs

the 'friction' between buyer and seller, which is explained by opportunistic behavior

Channel power

the ability of a channel member to control marketing variables of any other member in a channel at a different level of distribution.

Reverse marketing

the buyer (and not the seller as in traditional marketing) takes the initiative in searching for a supplier that is able to fulfil their needs.

Atmosphere of the relationship

the climate that has developed between the two firms... interdependence and time-frame (long or short term) makes it a relationship or transaction

OEM - Original equipment manufacturer

the customer of a subsupplier (e.g. Autoliv in Case Study lll.3 is a subsupplier of airbags for their OEMs, the car manufacturers such as VW or BMW). The contractor = OEM or sourcer Manufacturers of OEM products = subcontractors, subsuppliers, parts suppliers

Perceived value

the customers overall evaluation of the product/ service offered Depends upon the people (consumers and sellers), physical aspects (appearance), process (delivery customer service, etc.)

Native rule

the decision-maker uses the same entry mode for all foreign markets, ignores the differences between individual markets.

The firms factors for market selection

the degree of international experience, type of industry or nature of business, goals, existing networks and relationships

Cultural approach

the degree to which factual cultural values in one country are different from those in another country

Disintermediation

the elimination of a layer of intermediaries from a marketing channel or the displacement of traditional resellers by radically new types of intermediaries.

E-Marketing

the enablement of a business vision supported by advanced information technology to increase the effectiveness of business relationships between trading partners

EDI (electronic data interchange)

the exchange of standardized business documents such as purchase orders and invoices between buyers and sellers using digital exchange

Free on board (FOB):

the exporter's price quote includes coverage of all charges up to the point when goods have been loaded on to the designated transport vehicle. Buyer assumes all responsibility the moment they pass over the ship's rail.

Variable-cost pricing

the firm in concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets. More competitive on foreign markets,

Hierarchical mode

the firm owns and controls the foreign entry mode/organization

Reactive motives

the firm reacts to pressures or threats in its home market or in foreign markets Competitive pressures Domestic market: small and saturated

Franchising

the franchisor gives a right to the franchisee against payment ex: a right to use a total business concept/system, including use of trademarks (brands), against some agreed royalty.

Product placement

the inclusion of a branded product in media, usually without explicit reference to the product. Most commonly, branded products are featured in movies, television shows and video games.

Psychic distance

the individual manager's perception of the difference between home and foreign market... very subjective.

Double diamond

the international competitiveness of an industry in a country is not only dependent on its home country diamond conditions but also on those of trading partners. (limitation of Porter's diamond, only focuses on home country conditions)

Reintermediation

the introduction of new intermediaries within the channel structure. has given rise to a new class of intermediaries: aggregators Manufacturer -> e-retailer (aggregator of information) -> consumer

Expert opinion

the key in using expert opinion to help in forecasting demand is triangulation, compare estimates form different sources - maybe 3?

Culture definition

the learned ways in which a society understands, decides and communicates.

Partner mindshare

the level of mindshare that the manufacturer's product occupies in the mind of the export partner (ex. Agent or distributor). Measure of a strength of relationship in terms of trust, commitment, and cooperation. Better mindshare = better business compared to competitors/importer wont defect.

Licensing

the licensor gives a right to the licensee against payment ex. A right to manufacture a certain product based on a patent against some agreed royalty.

Licensing plus licensing agreement

the licensor uses the license not only to get royalties, but also to support the longer-term relationship with the licensee. Supplement aspects such as R&D or equity exchange.

PLC- Product life cycle

the life of a product in the market with respect to business/commercial costs and sales measures. Simply explained, it is a theory in which products or brands follow a sequence of stages, including introduction, growth, maturity, and sales decline

Direct export modes

the manufacturer sells directly to an importer, agent or distributor located in the foreign target market.

Key accounts

the most important customers for the manufacturer, as they contribute to a large portion of the company's sales. Creating and maintaining long-term relationships to key accounts is the most important role of key account managers.

Matrix structure

the next level after top management consists of two organizational structures (product and geographical areas) intersecting with each other. This results in dual reporting relationships. Product A in Europe, NA, Asia Pacific. Product B in same countries, report to manager of Product B and manager of Europe.

Geographical structure

the next level after top management is divided into international divisions. E.g. Europe, North America, Latin America

Product divisional structure Geographical structure

the next level after top management is divided into product division, e.g. product A, B, C and D

Reach

the number of people exposed to an advertisement carried by a given medium

X coalition

the partners in the value chain divide the value chain activities between them, ex. The manufacturer (exporter) specializes in upstream activities whereas the local partner takes care of the downstream activities.

Global 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.

The marriage metaphor

the process of reducing the psychic distance and increasing dependence between buyer and seller (shared values and joint investments in the relationship)

Dunning's eclectic approach

the propensity of a firm to engage in international activity increases if these conditions are satisfied Ownership advantages, locational advantages (profitable to produce abroad vs exporting), internationalization advantages (more profitable to use advantages rather than selling the right to use them)

Region centers

the regional HQ (lead country) will usually play the role of coordinating and stimulating sales in the whole region

Network model

the relationships of a firm in a domestic network can be used as bridges to other networks in other countries.

Domestic-based sales representative

the sales representative resides in the home country of the manufacturer and travels abroad to perform the sales function

Cost and freight (CFR):

the seller's liability ends when the goods are loaded on board a carrier or are in the custody of the carrier at the export dock. Seller pays all the transport charges required to deliver goods by sea to a named destination. Seller doesn't provide insurance

Word-of-mouth (WoM):

the sharing of information about a product, promotion, etc., between a consumer and a friend, colleague, or other acquaintance

disintermediation

the situation in which manufacturers sell directly to consumers, rather than through stores, thanks to the internet. Companies now have to transport, store, invoice, new activities they have to perform. Sometimes can result in being less profitable. Disintermediation pushed middlemen out of the value chain (buyers have to visit different merchant websites to decide on the best price & offer)

Integrated Marketing Communications (IMC)... Objective

the successful sale of a product or service Mix of Advertising, sales promotions, trade shows, public relations, personal selling, direct selling Question: should we standardize worldwide or adapt to each country?

Ingredient branding

the supplier delivers an important key component to the final OEM (original equipment manufacturer) product, e.g. Intel delivers its processor to the major PC manufacturers

Time to market

the time it takes from the conception of an idea until it is available for sale. TTM is important in those industries where products become quickly outmoded.

Blue oceans

the unserved market where competitors are not yet structured and the market is relatively unknown. Here it is about avoiding head-to-head competition

Omnichannel retailing

the use of a variety of channels in a customer's shopping experience, including research before a purchase. Such channels include: retail stores, online stores, mobile stores, mobile app stores, telephone sales, and any other method of transacting with a customer. Transacting includes browsing, buying, returning as well as presale and after-sale service.

Celebrity endorsement

the use of famous spokespersons or celebrities in marketing communications

International Mobile Marketing (m-marketing)

the use of mobile phones to reach targeted consumers and make them react at any time, wherever they are

Brand associations

the values and personality linked to the brand.

Global Brand

the worldwide use of a name, term, sign, symbol, design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors. Most valuable resource a company has.

Price changes

they are called for when a new product has been launched or when changes occur in overall market conditions such as fluctuating exchange rates)

Sales subsidiary

this curve is based on the assumption that the sales force in the sales subsidiary will have a fixed salary per annum (independent of the annual sales) but will be paid an extra bonus if they fulfil certain sales objectives.

Cultural exclusives

those customs or behavior patterns reserved exclusively for the locals and form with the foreigner is barred Ex: joking about a country's politics or talking about religion

Private-label products

those manufactured by one company for offer under a retailer's brand. Often positioned as lower-cost alternatives to regional, national, or international brands although some private label brands have been positioned as 'premium' brands to compete with existing manufacturer brands.

Critical success factors

those value chain functions where the customer demand/expects the supplier to have a strong competence.

Basic functions/purposes of branding

to distinguish, to create identification, to guarantee a certain level of quality or satisfaction, to help with promotion of the product.

Push strategy

to entice distributors to purchase and promote a product, lower brand awareness

Contribution margin in %

total contribution/total revenue * 100

Marketing contribution margin %

total marketing contribution/ total revenue

GDP

total value of all goods and services produced by capital and workers in a country.

Red oceans

tough head-to-head competition in mature industries often results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool

Trade barriers

trade laws (often tariffs) that favor local firms and discriminate against foreign ones

3 basic approaches to transfer pricing

transfer at cost, transfer at arm's length (price under perfect competition), transfer at cost plus (profits are split between production and international divisions)

nature of product for for industrial goods

transportation & warehousing costs

IPLC - international product life cycle

typical IPLCs can be found in the textile industry and computer software industry. Demand first grows in innovating country then advanced countries then less developed countries

Buy-in/follow-on strategy

typically, the case where two products are linked together. The original product item is priced very low in order to get customers 'in' and try the product. The follow-on product is then sold at a significantly higher price. The classic case is the Gillette razor (buy in) and blades (follow-on)

Product Factors of pricing

unique and innovative features of the product and the availability of substitutes. The required service for the product and how adapted the product is make a difference too. Price escalation

High-context cultures

use more elements surrounding the message. The cultural context in where the message is communicated has a lot to say. High degree of complexity in communication (Japan, China etc.) Implicit

Proxy indicators

used when direct measures are hard to obtain. Indirect variables serve as surrogate or proxy, example consumption of fridges as a proxy for washing machines

Short-term forecasts

usually for periods of up to three months ahead and used for tactical matters such as production planning.

Core competences

value chain activities in which the firm is regarded as better than its competitors

Evaluation of alternatives (e-marketing activities)

virtual communities and user groups endorsements, simulation (including augmented reality) and testing opportunities

E-marketplaces

websites where firms can exchange information and do business (Alibaba)

Aesthetics

what is meant by good taste in art, music, folklore, and drama may vary a lot from culture to culture.

Primary data

what we collect ourselves and research gathered data to solve a specific problem Adv. - targeted issues are addressed. Disadv. - cost, time involved in collecting the data

Approximation

when reliable historical data are not available, a close approx. can be made. (local production + imports-exports- current inventory levels)

Retrograde calculation

when the firm uses a 'reversed' price escalation to calculate backwards (from market price) to the necessary (ex factor) net price.

Concentration in retailing

worldwide tendency towards concentration in retailing, creating huge buying power in the big international retail chains. Fewer retail chains dominate more of the retail market

Dissolution phase (of a relationship)

'divorce' or termination of the relationship. It can make the assets dedicated to the relationship obsolete Can be caused by... operational and cultural differences, people in other positions don't have the same connection as CEO's, company may not be ready to work with a company abroad of a different culture, people may oppose the relationship, termination of personal relationships (managers leaving company)

Perceived quality

'perceived' means that the customers decide upon the level of quality, not the company

Regional Cooperation Group

(RCD) (sharing a power-plant on a common river) (lowest level of cooperation) Panama canal

Escapism

(a break from reality (high involvement and intensity)

Distributors

(importers) independent companies that stock the manufacturer's product. They will have substantial freedom to choose their own customers and price. They profit from the difference between their selling price and the buying price from the manufacturer.

Aesthetic

(passive involvement and low intensity) more relaxing

Upstream/downstream based collaboration

- A and B have different but complementary competences at each end of the value chain

In the future BRIC economies will face challenges from:

- A slow growing global economy - particularly in Europe - A reversal of investor risk appetite moving capital from the BRICs to safe havens - A loss of confidence in the BRICs

Reasons for international sourcing

- Concentration on in-house core competences - Lower product/production costs -economies of scale -lower wage costs - General cost efficiency -Increased potential for innovation -Fluctuating demand

Why countries levy trade barriers...

- to protect domestic producers, and to generate revenue

4 key elements to thrive in the low-income market

-Creating buying power -Shaping aspirations through product innovation and consumer education -Improving access through better distribution and communication systems -Tailoring local solutions

7 rules of international business

-Select distributors, do not let them select you -look for distributors capable of developing markets -treat the local distributors as long-term partners -support market entry by committing money, managers, and proven marketing ideas -maintain control over marketing strategy -make sure distributors provide you with detailed market and financial performance data -Build links among national distributors at the earliest opportunity

Selection for SMEs could be better if companies look for 3 key criteria

-Self-analysis- do you know yourself and the industry? -Chemistry - how they get along and the creation and maintenance of a comfortable personal relationship -Compatibility - shared vision between two companies top executives, financial viability, relationship has to be balanced between personal and the institutional (when so many actors are involved and it's all business)

In designing a strategy, firms have to answer two underlying questions

-Will they enter markets incrementally (waterfall approach = trickle down) or simultaneously (the shower approach? -Will entry be concentrated or diversified across international markets?

3 critical aspects that should be fulfilled in order to serve the BOP market to create successful BOP entrepreneurs

-access to credit (microfinance) -establishment of alliances -other orgs and private companies, need multiple players -adaptation of the marketing mix

Factors for a firm to produce in foreign markets

-desirability of being close to foreign customers. Allows for better interaction with local customer needs about product design, delivery and service -foreign production costs (labor) are low -transportation costs may render heavy or bulky products non-competitive -tariffs or quotas can prevent entry of an exporter's products -in some countries there is government preference for national suppliers

4 factors influencing the entry mode decision

-internal factors -external factors -desired mode characteristics -transaction-specific behavior

International markets could be defined in two ways

-international market as a country or a group of countries -the international market as a group of customers with nearly the same characteristics

Culture

-it's learned, acquired by people over time with their membership of a group. -it is interrelated, one part of culture is deeply connected with another part (ex: religion and marriage) -It is shared, values are passed on to other members of the culture group, parents, adults, family...

4 basic elements of interaction model

-the interaction process, participants and characteristics of them, atmosphere affecting and being affected by the interaction, the environment within which interaction takes place.

Choice of lead country is influenced by

-the marketing competences of the foreign subsidiaries -the quality of human resources in the countries represented -the strategic importance of the countries represented -location of production -legal restrictions of host countries

3 levels of culture

-the visible daily behavior -body language, clothing, lifestyle, eating and drinking habits -Values and social morals -family values, sex roles, friendship patterns -basic cultural assumptions -national identity, ethnic culture, religion

Main reasons for establishing some kind of local production

-to defend existing business -to gain new business -to save costs -to avoid government restrictions

Packaged transferred by the franchisor contains

-trademarks/trade names, copyright, designs, patents, trade secrets, business know- how, geographic exclusivity, design of the store, market research for the area, location selection

Long tail in business

: a concept referring to the distribution between products and sales 10% of most popular products (sold in traditional markets) generate 2/3 of the total profit 90% of long tail products (not sold in traditional markets) generate 1/3 of total profit. A few products make up most of sales, and many products (x axis) stretch out the tail of sales.

Two main reasons for the existence of regional management centers (RMCs)

-when sales volume in a particular region becomes substantial, there need to be some specialized staff to focus on that region, to realize more fully the potential of an already growing market -Homogeneity within regions and heterogeneity between them necessitate treating each important region separately. Therefore, a regional management center becomes an appropriate organizational feature

3 different organization models of GAM

1. Central HQ-HQ negotiation model 2. Balanced negotiation model (mix of two) 3. Decentralized local-local negotiation model

The coordination role consists of ensuring 3 things

1. Country and business strategies are mutually coherent 2. One subsidiary does not harm another 3. Adequate synergies are fully identified and exploited across business and countries

Cultural aspects

1. Cultural values - Geert Hofstede - a wide variety of business behavior are associated with 5 dimensions (individualism, power distance (hierarchy or amount or respect for bosses in positions or age above you... big power distance for looking up to your boss and seeing a big distance between you two), uncertainty avoidance, long-term orientation, masculinity) 2. Rituals - marriage/funerals, lunch times, grooming, waiting. 3. Symbols - language, aesthetic as symbols (ex: McDonalds to dress servers with skirt that men wear in Scotland, Kilts, each design is specific to each clan, Used Tartan, a design not used by McDonald's clan) 4. Beliefs - to make light of superstitions in other cultures when doing business there can be an expensive mistake - no row 13, layouts in China have to be checked with a Feng Shui master 5. Thought Processes - difference in perception (focus vs. Big - Picture)

Market entry modes classified into 3 groups

1. Export modes: low control, low risk, high flexibility 2. Intermediate modes (contractual modes): shared control and risk, split ownership 3. Hierarchical modes (investment modes): high control, high risk, low flexibility

Porter's five forces model

1. Internal rivalry 2. Bargaining power of suppliers 3. Bargaining power of buyers 4. Threat of new entrants 5. Threat of substitutes (Internal rivalry in circle in the middle, suppliers power on the outside connecting to it, power of buyers connected, threat of new entrants, and threat of substitutes as other connections.

Retailer's perspective of private label or own-label business:

1. Own labels provide better profit margins 2. Own label strengthen the retailer's image with its customers

Levels of cooperation between countries

1. Regional cooperation group (RCD) (sharing a power-plant on a common river) (lowest level of cooperation) 2. Free Trade Area (FTA) 3. Customs Union 4. Common market (highest level of cooperation, easiest to work and globalize in)

Subsidiary growth strategies

1. Seizing the initiative and growing the subsidiary autonomy 2. Building information networks to external partners 3. Creating a climate for entrepreneurship 4. Promoting subsidiary strategy development

Why a government imposes import quotas

1. Wants to protect domestic producers 2. to force companies from other nations to compete against one another for the limited amount of imports allowed usually lowering the price.

Why impose export quotas

1. a wish to maintain adequate supply of a product in the home market 2. to limit supply on world markets and increasing the international price of the good.

The internet offers two major benefits to companies that use the tool as a gateway to global marketing:

1. cost/efficiency savings 2. Access to customers around the world

Gollakota two-stage model to reach BOP customers

1. deep cost management- reduce all costs where possible 2. Deep benefit management - needs and wants of BOP are very different. See what they want and don't want, as well as how they are able to obtain it.

Guidlines for scenario planning

1. establish a core planning team, 2. Get a cross-section of expertise. 3. Include outside information and outside people.

Implementing of GAM

1. identifying the selling firm's global accounts sales volume, age of relationship, profitability of customer, share of customer's purchase 2. analyzing the global accounts basic characteristics, relationship history, level and development of commitment to relationship, goal congruence, switching costs, 3. selecting suitable strategies for the global accounts 4. developing, operational level capabilities to build, grow and maintain profitable and long-lasting relationships with global accounts Product/service development and performance, organizational structure, individuals (HR), information exchange, company and individual level benefits

More books and studies in global marketing have attempted to segment the world market because....

1. international data are more easily available on a nation-by-nation basis 2. distribution management and media have also been organized on a nation-by- nation basis

When to introduce products on foreign markets? Two possible strategies:

1. introduce products on different markets at the same time: markets should be at the same stage in their life cycle 2. introduce products on foreign markets gradually, waiting for these markets to be in a stage of the life cycle compatible with the product. (more common) Extend potential of sales and profits through time.

Hofstede's work on national cultures (4+1 dimensions model)

1. power distance - the degree of inequality between people in physical and educational terms 2. Uncertainty avoidance - the degree to which people in a country prefer formal rules and fixed patterns of life 3. Individualism - the degree to which people in a country learn to act as individuals rather than as members of groups. 4. Masculinity- the degree to which "masculine" values, (money, success, achievement) prevail over feminine values such as quality of life, warm personal relationships, service, care) 5. Time perspective - the way members in an organization exhibit pragmatic future - oriented perspective rather than a conventional history or short-term point of view. Do they think long term or short term.

When combining the product and geographic dimensions, it is possible to analyze the global corporate portfolio at the following levels

1. product categories by regions (or vice versa) 2. Product categories by countries (or vice versa) 3. Regions by brands (or vice versa) 4. Countries by brands (or vice versa)

3-D Printing

: an additive manufacturing process that turns a computer- aided design (CAD) file created on a computer or with a 3-D scanner into a physical object. It enables firms to economically build custom products in small quantities, which also allow firms to profitably serve small market segments

Upstream based collaboration

A & B collaborate on R&D and/or production

Downstream based collaboration

A & B collaborate on marketing, distribution, sales and/or service

Subsidiary

A local company owned and opened by a foreign company under the laws and taxation of the host country

Ways to find an intermediary

Asking potential customers to suggest an agent, obtaining recommendations, using commercial agencies, poaching a competitor's agent, advertising in suitable trade papers.

Ways for the supplier to get around disruptive problems of using multiple channels

Avoiding direct price comparisons, learning to sell niche products, establishing switching costs.

Internet in figures

Asia dominates internet users, but Asia has lower than average penetration rate. North America has highest penetration rate. 2021: 4.47 billion dollars in e-commerce, 2017 is 2.3 billion USD 10.1 of global retail sales is from e-commerce

Other relevant marketing metrics (more digital metrics)

Awareness (percentage of the potential customer group knows about the brand), conversion rate (% of website visitors that are being converted into paying customers), advocates (number of social media participants who actively write positively about the brand)

Approaches to international pricing

Cost related (full-cost, variable cost), Price related (skimming, market, penetration, premium)

What can a manufacturer do about grey marketing?

Backorder and push back deliveries to the wholesaler increasing sales and that can be disruptive to the supply chain, reduce gap by raising low-price markets and reducing high-price markets, re-differentiate the product and sell different products to each market.

More likely to be standardized if:

Culture-free products, international standards, ethnic or exotic products, mobile consumers, the image of the company, brand or country of origin is positive

Political risks

Confiscation (seizing of a company's assets without payment) Expropriation (the government seizes an investment but some reimbursement for the assets is made) Domestication (host countries gradually cause the transfer of foreign investments to national control and ownership through a series of government decrees) - Panama Canal

Terms of payment

Cash in advance, letter of credit, documents against payment and acceptance, open account (paid after delivery with no confirmation), consignment (exporter retains title of goods until importer sells them)

Structure of a channel, different aspects

Channel width (relates to geographical area and number of retail outlets.... intensive, selective or exclusive)

Control vs cost

Control of one member in the channel -its ability to influence the decisions and actions of other channel members critical to establish international brands and a consistent image more intermediaries involved, the less control financial resources needed

-a theory of selling that suggests that in the internet era, selling fewer copies to more people is a new strategy that can be successfully pursued.

Demand curve for online sales is different than stores. Long x axis and low demand but overall higher revenue. Stores have higher demand per product but less products

Channel length

Determined by the number of levels or different types of intermediaries Longer channels: convenience goods & mass distribution Implication: prices increase considerably for the final consumer

The economic environment

Economic development results from one of three types of economic activity 1. Primary: activities concerned with agriculture and extractive processes (iron, ore, gold) 2. Secondary: manufacturing activities 3. Tertiary: service activities - tourism, insurance, health care.

Educational

Educational (more actively involved but low intensity)

Entry mode

Entry mode- an institutional arrangement for the entry of a company's products and services into a new foreign market. The main types are export, intermediate, and hierarchical modes.

4 International orientations

Ethnocentric Polycentric Regiocentric Geocentric

Example of Long Tail

Example Amazon.com (online book) More than 2,000,000 books vs 130,000 books in traditional stores. Traditional stores focus on fast movers. Amazon sells fast movers, 130,000 of the books make up 43% of sales but 57% of sales come from the rest of books (over a million)

Low-context cultures

Explicit, verbally expressed communications, Direct (Swiss, German, Scandinavian), straight-forward.

Criteria for evaluating foreign distributors:

Financial and company strengths, product factors (type of products they are distributing, are they the same/experience), marketing skills (thinking of targets, competitive advantage), commitment (do they help out any competitors or the dedication to customer), facilitating factors (do they help out with more than just moving product, do they make it simpler/easier?)

Internal factors influencing entry mode decision

Firm size, international experience, product/service (value/weight ratio).

International Advertising Process

First establish objectives for each country -> budget decisions -> Message decisions/media decisions (USP, Standardization vs adaptation...Type such as radio, magazine, etc.... availability/cost/coverage, reach/frequency/impact) -> Agency selection -> advertising evaluation

The exporter has 4 options for what currency to say the price in:

Foreign currency of the buyer's country, currency of the exporter's country, currency of a third country (usually USD), or a currency unit such as the euro.

Free Trade Area

Free Trade Areas (Remember*) Reduce or eliminate customs duties and nontariff trade barriers among partner countries (members maintain individual tariff schedules for external countries) (NAFTA, CEFTA- central European, others) Latest one is ASEAN - China Free Trade Area (ACFTA) - effective from Jan. 2010 -the largest free trade area in terms of population -the third largest in terms of nominal GDP -between China and Asian countries around it

GNI =

GDP + net income from assets abroad

Barriers hindering the further process of internationalization

General market risks -Comparative market distance, competition in foreign market Commercial risks -exchange rate, failure to export customers to pay Political risks -foreign government restrictions, national export policy, high value of domestic currency relative to export markets

3 different marketing strategies

Global, Global, or Local

Geocentric

Glocal- offer global product concepts but with local adaptation.

GNP - Gross National Product

Gross national product- the value of all goods and services produced by the domestic economy over a one-year period, including income generated by the country's international activities

A campaign should be adapted if...

If cultural values are different If the communication objectives vary by country In the case of humoristic or legal restrictions

Value chain

Inbound logistics, operations, outbound logistics, marketing and sales, service (left of outbound log is upstream value activities, and right is downstream. (Simplified value chain is R&D -> Production -> Marketing -> Sales and Service)

3 major types of export channels

Indirect export, direct export, cooperative export

Message: the Communication process:

Info source-> Encoding -> message channel -> decoding -> receiver -> feedback (NOISE) -Must be careful of the decoding and that the local people understand the message the way that you intend. -The Message- Creative challenges: language differences, economic differences, sociocultural differences, legal/regulatory differences, competitive differences.

Barriers to internationalization initiation

Insufficient finances -Insufficient knowledge -Lack of foreign market connections -Lack of export commitment -Cost escalation due to high export manufacturing, distribution and financing expenditures -Lack of foreign channel distribution -Management emphasis on developing domestic markets

Internationalization Triggers

Internal and external Internal -Perceptive management managers staying aware of foreign markets -Specific internal event -Importing as inward internationalization -Inward/outward internationalization (import first, learn and become aware and create foreign network, then export) External -Market demand (new demand in growing economies) -Network partners -Competing firms -Trade associations and outside experts (export agents, governments, banks) -Financing

Elements of culture

Language, verbal language, non verbal language ,social institutions (business, political family or class related), education, values and attitudes, aesthetics, religion

LSE

Large scale enterprises

Sales promotions are...

Marketing activities that: stimulate consumer purchases, improve retailer or middlemen effectiveness and cooperation Short-term efforts: to achieve specific objectives In markets with media limitations, the percentage of the promotional budget allocated to sales promotions may have to be increased. Ex: catalogues/brochures, price discounts, competitions, samples, coupons, gifts. In markets with media limitations, the percentage of the promotional budget allocated to sales promotions may have to be increased.

Downstream activities

Marketing, distribution, sales and/or service

Limitations of the product life cycle

Misleading strategy prescriptions- depends on marketing mix Fads: fads are fashions that are adopted very quickly by the public, peak early and decline very quickly, hard to predict. Unpredictability Levels of product life cycle

Marketing research based on Web 2.0

Mobile data - GPS and geographic information User generated content and text mining - social networking sites. Web browsing Social networks and online communities Customer decision making data Consumer usage data Neuromarketing - use of neuroscience for marketing

Ex Post costs

Monitoring and enforcement (of contracts/agreements) (after or during production or first unit produced)

A standardized campaign... (characteristics)

More efficient, reinforces the value perceived by customers, more adapted if a consistent customer segment is targeted worldwide, easier to achieve if most of the message is visual and the message is simple and accepted by all targets

Effects of culture on ethical decision making

Most ethical; - spirit of morality - high commitment to ethics Practical standard - adherence to the law - some commitment to ethical decisions - common sense Least ethical - just adherence to the law Not ethical: unacceptable - not following the law.

E-commerce trends

Multichannel retailing Responsive e-commerce (mobile and desktop website) Subscription based e-commerce Content marketing (advertising that provides additional value to target) Ultra-fast delivery (Amazon Prime) Chat-commerce (online web chat for buyer or chat with friends on shopping website)

Layers of a culture

National culture - overall framework of cultural concepts and legislation for business Business/industry culture - certain competitive frameworks, rules of the game, similar Across borders Company culture (organizational culture) - total organization often contains subcultures of various functions. Individual behavior/decision maker- affected by other cultural levels, interaction environment, learned individual differences

Return on assets (ROA)

Net profit (before taxes)/Assets

Profit margin %

Net profit (before taxes)/total revenue * 100

The information and fulfillment matrix consists of 2 questions: information delivery (offline or online) and transaction fulfillment (pick-up or delivery)

Offline- Pick up: traditional retail, IKEA Offline-Delivery: Inventory only showrooms, Crate & Barrel Online-Pick up: Buy online, pick up in store, Toys R Us Online- Delivery: Pure-play, Amazon

What are opportunities and concerns when having a Global Brand?

Opportunities: the internet and other technologies accelerate the pace of the globalization of brands Ideally gives the company a uniform worldwide image Concerns: balance the risk of losing the benefits of well-established country-specific brands Ability to translate

6 major issues that a most ethical company should address

Organization relations (competition, local sourcing) -Economic relations (financing, taxation, local reinvestment) -Employee relations (compensation, safety, human rights) -customer relations (pricing, quality, and advertising) -industrial relations (technology transfer, R&D, org stability/longevity) -Political relations (legal compliance, bribery, corrupt activities, tax incentives)

Design of a control system (2 parts)

Output control: regular monitoring of output, such as profits, sales figures and expenditures (typically based on financial measures) Behavioral controls: regular monitoring of behavior, such as sales people's ability to interact with customers (typically based on non-financial measures)

Host country environment

Political risks-ownership risk, operating risk, transfer risk, Import restrictions, local-content laws, exchange controls, market control, price controls, tax controls, labor restrictions, change of government party, Nationalization (seizure of property), domestication.

Pricing across countries

Price standardization and price differentiation

Motives to go international

Proactive - pull factors (profit and growth goals, managerial urge, technology competence, foreign market opportunities, economies of scale, tax benefits) -Reactive -Push factors (competitive pressures, saturated domestic market, overproduction, unsolicited foreign orders, extend sales of seasonal products) -Often a combination of both

Internationalization motives

Proactive motives Reactive motives

Proactive motives

Proactive motives - based on firms interest in exploiting unique competences Profit and growth goals

Primary research

Qualitative research vs quantitative research. Qualitative- gives a holistic view and have a large number of variables and few respondents. Quantitative- getting data from a large representative group of respondents Qualitative is done first to get ideas or possible solutions and answers and quantitative confirms it.

Non-tariff barriers

Quotas - a restriction on the amount (units or weight) of a good that can enter or leave a country during a certain period of time

Upstream activities

R&D and/or production.

Management options to country price escalation:

Rationalizing the distribution process (reduce the number of links in the distribution process) Lowering the export price from the factor (firm's net price) Establishing local production of the product Pressurizing channel members to accept lower profit margins

How can increased sales & profits be explained thanks to internet

Reduced costs of distribution Larger offer Higher demand (increased exposure)

Since the end of the 90's for Global Brands

Reduction in Portfolio Size Environment more difficult: Increase in R&D and advertising costs Competition stronger (powerful global groups) Increased distribution power (international and local concentration) Consumers: globalization of expectations, lifestyles and maturity Impossible to provide effective support for all brands Economies of scale required to increase profitability

The rate of acceptance of a new product on a foreign market depends on:

Relative advantage: Perceived marginal value fo the new product relative to existing ones Compatibility: With acceptable behavior, norms, values Complexity: Associated with the product use Trialability: Degree of economic and/or social risk associated with the product use Observability: Ease with which the product benefits can be communicated

Desired mode characteristics

Risk-averse, control, flexibility

Andersen et al (1995) introduced 4 basic routes of internationalization for subcontractors

Route 1: following domestic customers Route 2: internationalization through the supply chain of a multinational corporation Route 3: internationalization in cooperation with domestic or foreign system suppliers Route 4: Independent internationalization

Typical characteristics of Born Global companies

SMEs with fewer than 500 employees, annual sales under $100 million Rely on cutting-edge technology Tend to be managed by entrepreneurial visionaries, high tech, view world as a single marketplace Operate in international markets and focus on narrow global market segments Usually more B2B companies

Guidelines Arnold proposes in order to anticipate and correct potential problems with international distributors:

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

Global Brands: Naming Guidelines

Short and simple, easy to recognize, easy to pronounce and only pronounced one way in all languages, suggests product benefits, no negative connotation, legally available to use.

International pricing strategies

Skimming, market pricing, penetration pricing, price changes, experience curve pricing, product line pricing, freemium, product-service bundle pricing, pricing across countries (standardization and differentiation)

External factors influencing entry mode decision

Sociocultural distance between home and host country risk/demand uncertainty, market size and growth, direct (quotas and tariffs) and indirect (connections and not directly a barrier but can be) trade barriers, intensity of competition, small number of relevant intermediaries available.

Process of international marketing information system

Stage 1- locating information Stage 2 - gathering information Stage 3 - processing information Stage 4 - presenting and using information Output: Leads to international marketing planning and budgeting -> implementation/execution -> control

Structural evolution of international operations (5 stages)

Stage 1: Ad hoc exporting, exporting when it is needed, not on a regular basis. Stage 2: Functional structure Stage 3: International division structure Stage 4: Geographical structure (customer structure) Product Structure Stage 5: Matrix structure

Assessment of Market's Attractiveness and Local Competitive Strengths A 3-stage process

Stage 1: Macro level Analysis of national competitiveness Stage 2: Meso Level Competition analysis in an industry (worldwide/globally) -Objective: find a position in industry where the company can best defend itself against 5 forces Stage 3: Micro level Competition analysis in an industry

Uppsala Internationalization model- The stage model

Stage 1: no regular export activities, only sporadic Stage 2: export via independent representatives Stage 3: establishment of a foreign sales subsidiary Stage 4: foreign production/manufacturing units

Two approaches to licensing

Stand-alone licensing agreement Licensing plus licensing agreement

Stages in join-venture formation

Step 1: Joint-venture objectives Step 2: Cost - benefit analysis Step 3: Selecting partner(s) Step 4: Develop a business plan Step 5: negotiation of joint-venture agreement Step 6: Contract writing Step 7: Performance evaluation

The strategy process for development of core competences

Step 1: analysis of situation (identification of competence gaps) Step 2: Scenarios (future situations) Step 3: Objectives (future goals) Step 4: strategy and implementation (how do we reach our goals and objectives)

Political risk analysis procedure

Step 1: issues of relevance to the firm Step 2: Potential political events Step 3: Probable impacts and responses

Transaction-specific factors

Tacit nature of know-how

Tariff Barriers

Tariffs- a tool used by governments to protect local companies from outside competition. The most common forms are specific, ad valorem, and discriminatory. Specific- charges are imposed on particular products either by weight or volume Ad valorem - straight percentage of the value of the goods. Discriminatory - charged against goods coming from a particular country.

International market selection process

The Process: Step 1: selection of segmentation criteria Step 2: development of segments Step 3: screening of segments (by attractiveness-size, trends, access, and capability of firm to satisfy segment- each segment may require new marketing plan) Step 4: Micro segmentation (target, offer and USP/comp. adv.) -market entry

International market segmentation

The firm and environment together... Step 1: selection of the relevant segmentation criteria Measurability, accessibility, substantial/profitable, actionability. PEST - political/legal, economic, social/cultural, technological. Step 2: development of appropriate segments Characteristics: geographic, language, political factors, demography (demographics), economy, industrial structure, technology, social organization, religion, education, and more specific characteristics: cultural characteristics, lifestyle, personality, attitudes and taste. Step 3: Screening of segments to narrow down the list of markets/countries. Choice of target markets/countries Preliminary screening - screened based on external screening criteria (state of the market) as well as internal screening (ex: financial resources). Fine-grained screening - the firm's competitive power and special competences in the different markets can be taken into account. Want a country that you can invest in and grow with high market attractiveness and competitive strength BERI! Step 4: Micro-segmentation: develop segments in each qualified country or across countries Finally market entry, How many? When? Sequence? Segment markets within countries using: demographics, lifestyles, consumer motivations, geography, economic factors, buyer behavior, psychographics.

Different strategic prototypes of international pricing practice taxonomies

The local price follower firm The global price follower firm The multi-local price setter firm The global price leader firm

Linguistic limitations

Translation challenges, low literacy in many countries, multiple languages & dialects within a country, different nuances (for the same word between 2 countries speaking the same language) Language is one of the major barriers to effective communication through advertising 1 French word means different things between Canadian French, France, Belgium

Estimation by analogy

a correlation value (between a factor and the demand for the product) for one market is used in another international market. MUST be established between the demand to be estimated and the factor. Looking for relationship/correlation between two variables.

Global-pricing contract

a customer requiring one global price (per product) from the supplier for all its foreign strategic business units (SBUs) and subsidiaries.

Currency issues

a difficult aspect of export pricing is the decision about what currency the price should be quoted in.

Born Global

a firm that from its inception pursues a vision of becoming global and globalizes rapidly without any preceding long-term domestic or internationalization period Ex: Skype

Born Global

a firm that from the birth globalizes rapidly without any preceding long term internationalization period

Born-again global

a firm that previously focused on its domestic markets but that suddenly embraces rapid and dedication internationalization. Can be a result of critical events, such as change in ownership and management, or takeover by another company. In this way, the acquired firm can gain access to more financial resources, managerial capability and international market knowledge.

Born regional

a firm that starts international activities early and with significant international shares, but its international activities are only in its home region (Europe, Asia, not across seas)

Relative cost advantage

a firm's cost position depends on the configuration of the activities in its value chain versus that of its competitors

Cloud computing

a general term for anything that involves delivering hosted services over the internet. In cloud computing, the word cloud is used as a metaphor for 'the internet'.

Long tail

a graph showing fewer products selling in large quantities versus many more products selling in low quantities. The low-quantity items (the very broad product range) stretch out on the x-axis of the graph, creating a very long tail that generates more revenue overall. Even though smaller quantity of each item is sold, there is a much greater variety of these items to sell, and these 'rare' items are very easy to find via today's online search tools

Strategic group

a group of firms or business units operating within an industry where the firms within the group compete for the same group of customers using similar market related strategies

Social media

a group of internet-based applications that allow the creation and exchange of user-generated content.

Quality deployment function (QDF

a main tool for 'listening to the voice of the customer' in the NPD (new product development) process. IDs opportunities for product improvement or differentiation. Translates customer needs into new product attributes and responds to customers

Indirect export modes

a manufacturer uses independent export organizations located in its own country (or third country)

Advertising agency

a marketing services firm that assists companies in planning, preparing, implementing and evaluating all or portions of their advertising programs

Chain ratio method

a method of calculating total market demand for a product by using several percentages in order to reduce a base population to the relevant target group and the final realistic demand. Derives demand. Multiply all percentages that are needed for demand/ownership and multiply by population

Keiretsu:

a network of businesses that own stakes in one another as a means of mutual security, especially in Japan, and usually including large manufacturers and their suppliers of raw materials and components. The original keiretsu were each centered around one bank, which lent money to the keiretsu's member companies and held equity positions in the companies

Corporate social responsibility (CSR)

a number of corporate activities that focus on the welfare of stakeholder groups other than investors, such as charitable and community organizations, employees, suppliers, customers, and future generations.

Price escalation

a price-related phenomenon caused by the summation of all cost factors in the distribution channel

Loss leader

a product priced below cost to attract consumers, who may then make additional purchases

Multiple channel strategy

a product/service is available to the market through two (dual distribution) or more channels of distribution. Multiple channels may include the internet, sales force, distributors, call centers, retail stores, and direct mail.

Economies of scope

a proportionate saving gained by producing two or more distinct goods, when the cost of doing so is less than that of producing each separately. The theory of economies of scope states that the average total cost of a company's production decreases when there is an increasing variety of goods produced.

Global account management (GAM)

a relationship-oriented marketing management approach focusing on dealing with the needs of an important global customer (an account) with a global organization (foreign subsidiaries all over the world).

Export buying agent

a representative of foreign buyers who is located in the exporter's home country. The agent offers services to the foreign buyers, such as identifying potential sellers and negotiating prices.

Omnibus studies

a research agency will target specified segments in a particular foreign market and companies will buy questions in the survey.

Continuous research (longitudinal studies)

a sample or panel remains the same over time. Shows developments taking place

Sampling plan

a scheme outlining the group (or groups) to be surveyed in a marketing research study, how many individuals are to be chosen for the survey and on what basis this choice is made.

Brand equity

a set of brand assets and liabilities that can be clustered into 5 categories: brand loyalty, brand awareness, perceived quality, brand associations and other proprietary brand assets. Brand equity is the premium a customer/consumer would pay for the branded product or service compared with an identical unbranded version of the same product/service

Advertising objective

a specific communication task to be accomplished with a specific target audience during a specific period of time

Competitive benchmarking

a technique for assessing relative marketplace performance compared with main competitors

Unique selling proposition (USP)

a unique characteristic of a product or brand identified by the marketer as the one on which to base a promotional campaign. It is often used in a product-differentiation approach to promotion

Competitive Advantage

a unique characteristic that cannot be easily replicated or copied by competitors which makes you better than competitors and seen as higher value than competitors.

BERI

a useful tool in the course-grained, macro-oriented screening of international markets, Business Environment Risk Index. Focuses on political risk.

Indirect export

manufacturing firm does not take direct care of exporting activities, instead, another domestic company performs these activities without manufacturer.

Contract manufacturing

manufacturing is outsourced to an external partner, specialized in production and production technology.

Product line pricing

across product pricing, the various items in the line may be differentiated by pricing them appropriately to indicate, for example, an economy version, a standard version and a high-end version.

Business networks

actors are autonomous and linked to each other through relationships, which are flexible and may alter accordingly to rapid changes in the environment. The glue that keeps the relationships together is based on technical, economic, legal, and in particular, personal ties.

Product adaptation strategy:

adapt the product to local preferences, without necessarily changing the promotional support, Ex: Coke and Diet Coke vs Coca-Cola Light. Diet has a negative meaning in many countries, same problem with Coke in French. Ex: Laughing cow cheese, same packaging and consistent design but different product.

Mobile value-added services

added services (MVAS): service for users in a co-production process that works in an integrative and interactive manner via mobile services and offers additional value to the core services or product that it supports (supporting services that create sales ex: L'Oreal Makeup genius)

Shower Approach

advanced countries, developing countries, and less developed countries at the same time. Used with the internet

Advantages and disadvantages for a rider

advantages - export conveniently without having to establish their own distribution systems. Learn from carriers experience. -disadvantages - giving up control over the marketing of its product. Lack of commitment by carrier and loss of lucrative sales opportunities not covered by the carrier

Advantages and disadvantages for a carrier

advantages: low-cost way to get the product that complements or fills its exporting capacity, doesn't require an investment in R&D, production facilities, or market testing. -disadvantages- quality control and warranty. Continuity of supply? There is some risk and unknowns that exist. If the carrier develops a substantial market abroad, will the rider firm develop its product capacity on its own?

Information search (e-marketing activities)

advertising in the marketplace media, links from other sites, quality of information, push technologies, SEO

6 main ingredients of international communication

advertising, public relations, sales promotion, direct marketing, personal selling, social media marketing.

Broker

agent based in the home country. Doesn't handle the products sold or bought but only the contractual part.

Delphi studies

aims at qualitative research. Aggregates the info of a group of experts. Seeks to gain answers form those who possess particular in=depth expertise instead of the average responses of many with only limited knowledge.

Strategy rules

all alternative entry modes are systematically compared and evaluated before any choice is made.

Piggyback

an abbreviation of 'pick-a-back', i.e. choosing a back to ride on. It is about the rider's use of the carrier's international distribution organization. Typically used for products from unrelated/non-competitive companies and complementary. Uses a rider deal with a larger company already exporting and working in the foreign markets and uses their export facilities and distribution. Either commission or buys the product outright and could brand it as its own.

Joint Venture

an equity partnership typically between two partners. It involves two 'parents' creating the 'child' (the joint venture acting in the market)

Foreign branch

an extension of and a legal part of the manufacturer (often called a sales office). Taxation of profits takes place in the manufacturer's country

Law of one price

an identical product must have an identical price in all countries when price is expressed in a common-denominator currency.

Pricing strategies:

market pricing, penetration strategy, premium price strategy, price skimming

International marketing information system

an interacting organization of people, systems, and processes devised to create a regular continuous flow in information essential to the international marketer's problem-solving and decision-making activities around the world.

Country of Origin Effect (COE)

any influence that the country of manufacture, assembly, or design has on a consumer's positive or negative perception of a product. Ex: Swiss Watches, Tea, Pasta, etc.

Incoterms (international commercial terms)

are the internationally accepted standard definitions for terms of sale set by the International Chamber of Commerce.

International divisional structure

as international sales grow, at some point the international division may emerge at the same level as the functional departments

Lead-lag analysis

assumption: determinants of demand and the rate of diffusion are the same in 2 countries but time separates the two. Markets are similar. Same market patterns, different time.

Frequency

average number of times within a given timeframe that each potential customer is exposed to the same ad

Types of counter-trade

barter (straight exchange of goods), compensation deal (part payment in cash and exporter buys some of the buyer's goods), buy-back agreement (long term agreements, financed partly by the exporter's purchase of some of the resultant output)

Sales Agent

based on a contract where the agents get a minimum annual commission independent of annual sales. The agents will get the same percentage in commission no matter how much they generate in annual sales

Price standardization

based on setting a price for the product as it leaves the factory. Fixed price at the headquarters of the firm. Consistent price. Low risk strategy, does not maximize profits.

Custom-designed studies

based on the specific needs of the client, research design is based on the research brief given.

Benefits of CSR

better branch value, customer attraction and retention, employed attractiveness, employee motivation and retention

Internal linkages

between activities within the same value chain but on different planning levels within the firm

External linkages

between different value chains 'owned' by the different actors in the total value system.

Brand awareness

brand names attract attention and convey images of familiarity; may be translated as what percentage of customers know the brand name.

Bundles:

building products can make it difficult to directly compare the value with those of competitors as long as the same bundle is not available through other distribution channels.

Product-service bundle pricing

bundling product and services together in a system-solution product. If the customer thinks that entry price is a key barrier, service contracts can be priced higher, which allows for lower entry product pricing- the practice in many software businesses.

Auction mechanism

buyers bid on price, goes to who values it the most. Buyers compete to obtain the product by offering the highest price

Cost per thousand (CPM):

calculated by dividing the cost of an ad placed in a particular advertising vehicle by the number of people (in thousands) who are exposed to that vehicle

B2B marketplaces

can be managed by... the supplier (Dell) the buyer (Carrefour.net or Retail Link...Walmart) intermediary (Liquidity Services)

Delivered at terminal (DAT)

can be used for any transport mode or where there is more than one transport mode. The seller is responsible for arranging carriage and for delivering the goods, unloaded from the arriving conveyance at the named place. Buyer is responsible for import clearance and local taxes/import duties.

Independent research studies

carried out by totally independently by research companies. And offered for sale

When to use selective distribution

cars, furniture (products that consumer is willing to travel long distance and all competitors are compacted in one area

Polychronic time (P-Time)

characterized by the simultaneous occurrence of many things, allows for relationships to build Most cultures offer a mix of P-Time and M-time behavior, but have a tendency to be either more P-time or M-time in regard to the role time plays.

Selective coverage

choosing a number of intermediaries for each area to be penetrated

Exclusive coverage

choosing only one intermediary in a market

Competences

combination of different resources into capabilities and later competences - being something that the firm is really good at

Project export (turnkey contracts) Turnkey= of or involving the provision of a complete product or service that is ready for immediate use

combination of hardware (buildings and infrastructure) and software (technology and project know-how) e.g. in the form of a factory for ice-cream production.

Experience curve pricing

combination of the experience curve (lowering costs per unit with accumulated production of the product) with typical market price development within an industry.

Export financing

commercial banks, export credit insurance, factoring (selling export debts for immediate cash), forfeiting (medium term financing), bonding (guarantees compliance of obligations), leasing, counter-trade (seller provides a buyer with products and agrees to a reciprocal purchasing obligation)

Customs Union

common external trade policy Establishes a common trade policy among non-members FTA+ a common external tariff on products imported from countries outside the union .

High-context cultures

communication depends heavily on the contextual or nonverbal aspects of communication (Japan, Arabian, Latin American, Spanish, Italian). Tone and look and attitude that means more than the words

Full-cost pricing

companies insist that no unit of a similar product is different from any other unit in terms of cost and that each unit in terms of cost and that each unit must bear its full share of the total fixed and variable cost. Suitable when a company has high variable costs vs fixed costs. Prices set as total cost + profit margin

6C model of social media marketing

company, content, control, community, customers, online conversation.

Benefits of m-marketing for consumers

comparison shopping, bridge the gap between bricks and clicks (window shop), opt-in searches, travel.

External validity

concerned with the possible generalization of research results to other populations. Ex: exists if research results obtained for a marketing problem in one country will be applicable to a similar marketing problem in another country. Could use analogy method for estimating market demand. Estimating by analogy assumes that the demand for a product develops in much the same way in countries that are similar.

Competitive triangle

consists of a customer, the firm, and a competitor. The firm or competitor winning the customer's favor depends on perceived value offered to the customer compared with the relative costs between the firm and competitor.

Potentially disruptive problems that can occur when going through multiple channels:

consumer confusion, conflicts with intermediaries, conflicts with internal distribution units, increased costs, loss of distinctiveness, increased organizational complexity, differences in price

Backward integration

consumer to manufacturer or level lower than manufacturer to another level

What to do for prestigious products

control the marketing strategy/brand image

3 unique characteristics of m-marketing vs e-marketing

convenience and accessibility, personalization (PC often shared), localization (GPS)

Firm level factors

corporate and marketing objectives, competitive strategy, firm positioning, product development, production location, market entry modes

Five sources model

corresponding to Porter's five competitive forces, there are also five potential sources for building collaborative advantages together with the firms surrounding actors.

Market coverage

coverage can relate to geographical areas or number of retail outlets. 3 approaches are intensive, selective or exclusive coverage

The role of public relations (PR)

creating good relationships with the media to help companies communicate messages and build an international profile. May be very useful in case of a crisis, such as a global recall Possible targets: employees, shareholders, suppliers, customers, general public, gov't Possible methods: event sponsorship, prizes at events, press releases, announcements, lobbying

More likely to be adapted if

culture-bound products, local standards (hygiene, security), the image of the company, brand or country of origin is negative, when the product psychological attributes are incompatible with norms, values and behavior.

External determinants

customer characteristics nature of product and critical point nature of demand competition legal regulations local business practices

External determinants of channel decisions

customer characteristics, nature of product, nature of demand/location, competition, legal regulations/local business practices

Aspects of nature of demand

customer's income product experience/life cycle position

Market Factors

customers' perceptions, customers' ability to pay, nature of competition, competitors' objectives, strategies, strengths and weaknesses, grey market appeal.

Cultural imperatives

customs that must be recognized and accommodated Ex: in some countries, establishing friendship before business negotiations can begin

Medium-term forecasts

implications for planners, most important for budgeting, and starting point sales forecast

Trading company

important trading forces in Africa and the Far East. Play a role in shipping, warehousing, finance, planning, insurance, consulting, and deal making in general. Manage bartering. Overall distribution. And large range of financial services

E-marketing activities in B2C Problem recognition:

database to know customer better, anticipate needs/wants, response to problems

Pragmatic rule

decision-maker uses a workable entry mode for each foreign market. Starts with exporting and low risk mode. If it isn't workable or profitable is the only way they will change entry modes

Environmental market factors for market selection

degree of internationalization of the market, market potential, competition, psychic/geographic distance, market simplicity

Impact

depends on the compatibility between the medium used and the message (the 'impact' on the consumer's brain)

Lead-lag analysis

determinants of demand and the rate of diffusion are the same in two countries but time separates the two

Objective and task approach

developing the promotion budget by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.

Country characteristics distance

difference in level of economic development and more country infrastructure things. Laws.

Tacit

difficult to articulate and express in words, - tacit knowledge has often to do with complex products and services, where functionality is very hard to express.

Social system perspective

dimensions such as culture, language and values that will limit or encourage collaboration

Channel conflict

disagreement among marketing channel members on goals and roles - who should do what and for what rewards. A significant threat arising from the introduction of an internet channel is that, while disintermediation gives the opportunity for a company to sell direct and increase the profitability of products, it also threatens distribution arrangements with existing partners.

3 ways to avoid direct price comparisons

distinctive features, exclusivity, bundles.

Intensive coverage

distributing the product through the largest number of different types of intermediary and the largest number of individual intermediaries of each type.

Internationalization

doing business in many countries of the world but often limited to a certain region

Externalization

doing business through an external partner (importer, agent, distributor) Internalization- integration of an external partner into one's own organization

B2C and product delivery options after payment accepted

download shipping drop shipping (shipped by the manufacturer or distributor) in-store pickup

Adapted promotion-adapted product:

dual adaptation

Polycentric

each country is unique and should be targeted in a different way

Y coalition

each partner in the alliance/join venture contributes with complementary product lines or services. Each partner takes care of all value chain activities within its product line.

Regiocentric

each region (Europe, Middle East, Asia) should be treated separate. Coordinate programs within regions but not across them

Choice/Purchase (e-marketing activities)

ease of ordering & delivery, payment conditions and security

Attractiveness of current operations depends upon

economic performance and growth

Standard subcontracting

economies of scale often operate in the global market with standardized products, no adaptation to specific customers

Sales forecasting

either by forecasting market sales and determining what share of this will accrue to the company or by forecasting the company's sales directly.

Product Creation Strategy:

either developing products with simplified technology or creating completely new products. Ex: Renault car specific to China

Brand loyalty

encourages customers to buy a particular brand time after time and remain insensitive to competitors' offerings.

Entertainment

entertainment (low involvement and low intensity)

Penetration strategy

establish price at lower level and gain market share, can create price wars and profit comes from low profit but lots of sales which is dangerous/risky

Internal validity

establishes a causal relationship, where by certain conditions are shown to lead to other conditions

Construct validity

establishes correct operational measures for the concepts being studied. If it lacks this then it is not measuring what it's supposed to.

Monopoly

exists if there is one seller in the market such as a state-owned company (e.g. a local electricity supplier, postal service). The seller has the control over the market and can solely determine the price of its product.

5 main entry modes for indirect exporting

export buying agent, broker, export management company/export house (only does sales and services), trading company piggyback (carrier/3rd party does marketing and sales and services).

Delivered duty paid (DDP):

export price quote includes the costs of delivery to the importer's premises. Imply maximum exporter obligations. Seller assumes all risk involved delivering to buyer and all costs in insuring and shipping the goods including import duties and unloading costs.

Advantages of using multiple channels

extended market coverage, increased sales volume, lower absolute or relative costs, better accommodation of customers evolving needs, more and better information.

Environmental factors on price

external to the firm and uncontrollable variables in the foreign market. Tariffs - vary from country to country. Same with government regulations and exchange rate.

Common Market

factor mobility- same as customs union and factors of production (labor, capital, and technology) are mobile among members) Customs Union + free flow of capital and labor among member nations A push for EEA and Mercosur (southern and eastern South America, mostly Brazil) to create a trade agreement requires highest level of cooperation, easiest to work and globalize in

Convergent forces/factors

factors driving developments in the same direction High degree of macro economic stability in key international markets Increasing standardization of products across borders

When to use intensive distribution

fast moving consumer goods

B2B market differs from customer markets in many ways

fewer and larger buyers (geographically concentrated), a derived, fluctuating and relatively inelastic demand, many participants in buying process, professional buyers, a closer relationship, absence of intermediaries, technological links

The network approach

firm has to be viewed and analyzed in relation to other actors in the international environment. Firm must create network internationally to gain relationships.

Uppsala internationalization model

firms tend to intensify their commitment to foreign markets as their experience grows

Internationalization/transaction cost approach

firms usually want to internalize transactions and not use a license or 3rd party. They will use the least expensive form. For smaller it's cheaper to outsource, but eventually internalizing is best. There is also transaction costs too and friction.

Waterfall approach

first to advanced countries, then developing countries, then less developed countries. Kept expanding Used by traditional companies, not with the internet

Waterfall approach

first to advanced countries, then to developing countreis then to less developed countries

Divergent forces

forces driving developments apart from each other Cultural diversity among target markets.

Co-Branding

form of cooperation between two or more brands, which can create synergies that create value for both participants, above the value they would expect to generate on their own.

Freemium (free + premium = Freemium

freemium is a pricing strategy by which a product or service is provided free of charge, but money is then charged afterwards for more advanced features or functionality. Like buy ins in mobile games or Spotify.

Cooperative export modes/export marketing groups

frequently found among SMEs attempting to enter export markets for the first time. Say multiple products complement each other like bedroom furniture company, dining room furniture, and living room furniture so together they can form a group that is attractive to a buyer in a furniture retail chain and using economies of scale, it's cheaper to export.

Retailer panels

gaining the cooperation of retail outlets sales of brands can be measured by laser scanning the barcodes on goods as they pass through the checkout

Secondary data

gathered originally for another purpose Advantages - low cost, speed of access Disadvantages - availability, reliability, can be out of date, comparability. -need to check consistency of secondary data with other data of known validity

Global Strategy (corporate management)

global product divisions responsible for product sales throughout the world, You have CEO and then CMO and all other chiefs responsible for entire world -HQ -Worldwide production group or Division A then areas, same for B and C

Global Matrix structure (corporate management)

glocal strategy - matrix of location and product, same level. X manager is product division B and area 2. Or could have product divisions and geographic division managers separate but on the same level.

Shower approach

go to all countries at once simultaneously

Market pricing

going right around, staying competitive on price

Export facilitating activities

government activities stimulating export: trade development offices abroad, government sponsored trade fairs and exhibitions, sponsoring trade missions of business people, operating permanent trade centers in foreign market areas

Environmental factors

government influences and constraints, inflation, currency fluctuations, business cycle stage

Economic union

harmonization of economic policies free movement of goods and services across borders and harmonize monetary policies, taxation, and government spending. Ex: European union

Functional structure

here, the next level after top management is divided into functional departments. E.g. R&D, sales and marketing, production and finance

Ethnocentric

home country is superior and business ways are extended to all other countries. Same abroad as home

Market pricing

if similar products exist in the target market, final customer price based on competitive prices. Competitive situation taken into account but some aspects of demand function are ignored. Can increase risk of price war

Order-making or order-taking

if the firm finds that the type of sales job it needs done in a foreign market tends towards order-taking it will probably choose a travelling domestic-based sales representative and vice versa.

Validity

if the measurement method measures what it is supposed to measure, then it has high validity. Three types: construct, internal, and external.

The nature of the product

if the product is technical and complex in nature and a lot of servicing/supply of parts is required, the travelling salesperson is not an efficient entry method. A more permanent foreign base is needed.

Reliability

if the same phenomenon is measured repeatedly with the same measurement device and the results are similar then the method is reliable. If the data can be replicated.

Grey marketing (parallel importing):

importing and selling of products through market distribution channels that are not authorized by the manufacturer. Means that a contract could be signed between a wholesaler in a low-price market and a retailer in a high price market and it's a win-win Creates two losers, the manufacturer, and wholesaler of high price market

Grey marketing (parallel importing)

importing and selling of products through market distribution channels that are not authorized by the manufacturer. It occurs when the manufacturer uses significantly different market prices for the same product in different countries and mainly exists for high-priced, high-end products, such as fashion and luxury apparel.

Benefits of m-marketing for merchants

impulse buying, drive traffic, education of consumers, perishable products, drive efficiency, target market

Point-of-sale displays

includes all signage and a variety of other visual materials that are designed to influence buying decisions at the point of sale.

Individual perspective

individual's characteristics, objectives, and experience will influence the way social exchanges and contacts take place and affect the interaction.

Price differentiation if differences in

industry prices, importance of own brands, strengths of local competitors, consumer preferences, sensitivity to price, price awareness.

Simple subcontracting

information exchange is simple because the contractor specifies criteria for contribution. Contractor's in-house capacity is often a major competitor

2 ways consumers create value which is consumed by companies

innovative concepts, reverse auctions

Characteristics of services

intangibility (can't be touched or tested), perishability (cannot be stored for future use), heterogeneity (rarely the same person to person), inseparability (time of production is very close with time of consumption)

Transnational organization

integration and coordination of operations (R&D, production, marketing and sales and services) across national boundaries in order to achieve synergies on a global scale.

Pull strategy

intensive distribution): to market to end customers to create demand Pull customers to product, customers asking for product

Factors influencing pricing decisions

internal (firm level factors, product factors), external (environmental factors, market factors)

Price standardization if

internationalization of competition and internationalization of large retailing organizations.

Straight extension strategy (roll-out):

introduce the product internationally int eh same form and in the same way as in the national market. No additional R&D or manufacturing costs required. Functional product that customers have the same needs. Ex: Venus razor (doesn't need to be changed as it's a functional product, the needs are the same across the world/needs don't change)

Straight Extension:

introducing a standardized product with the same promotion strategy throughout the world market (one product, one message worldwide). Major savings can be made on market research and product development.

Customer experience

involvement/participation and intensity/connection

Cooperative export

involves collaborative agreements with other firms concerning the performance of exporting functions.

Two key success factors of franchising

it's the interdependence of the franchisee and the franchisor: -integrity of the whole business system -capacity for renewal of the business system

Factors affecting the communication situation

language differences, economic differences, sociocultural differences, legal/regulatory differences, competitive differences

Local-content requirements

law stipulating that a specified amount of a good or service be supplied by producers in the domestic market

Stand-alone licensing agreement

license agreement serves primarily to specify the legal basis for the transfer of rights and enable the licensor to earn royalties.

Geographical divisions (corporate management)

local strategy (local) responsible for all products and functions within a given geographical area. You have President or CEO then regional presidents -Rarely used due to it being very expensive and hard to create

Price differentiation

local subsidiary or partner (agent, distributor, etc) sets a price that is considered to be the most appropriate for local conditions and no attempt is made to coordinate prices from country to country. Can risk the image of the firm or create black markets. Can increase and maximize sales and profit. High risk strategy

Multi-client studies

low cost way for a company to answer specific questions without embarking on its own primary research. 2 types: Independent and Omnibus

Tactics for countering price escalation

lowering cost of goods, lowering the export price from the factory, lowering distribution channels (shorter channel) establishing local production, pressurizing channel members to accept lower profit margins, using foreign trade zones

Porter diamond

macro level - analysis of national competitiveness the characteristics of the ''home base' play a role in explaining the international competitiveness of the firm - the explaining elements consist of factor conditions, demand conditions, related and supporting industries, firm strategy - structure and rivalry, government and chance.

How to avoid direct price comparisons

make direct price comparisons difficult can protect suppliers from poaching by competitors and mitigate the effects of price competition.

Forward integration

manufacturer to consumer

4 Market entry modes

o exporting internet, exporter, importer, distributor, direct sales o contractual agreements licensing, franchising o strategic alliances joint venture, consortia (association) o direct foreign investments ownership, channels

Exclusivity

offering products (values) that are not available to competitors. May include distinctive versions of products, as opposed to cost-focused brands.

Life cycle concept

often producers start in advance countries, then demand rises and economies of scale occurs. After a standard product is had, Less developed countries may offer a competitive advantage of cheaper costs.

Costs of CSR

one time donations (such as for tsunami or hurricanes, some safety or benefit beyond what is required), continuous costs include donations to always support a certain cause or fees such as license fees to use certain labels or patents

Post-purchase behavior (e-marketing activities)

online support, relationship building with consumers...user groups & virtual communities

Viral marketing

online word-of-mouth is a marketing technique that seeks to exploit existing social networks to produce exponential increases in brand awareness.

Areas affected by internet

participation, location, products & services, communication, competitive moves global market participation global activity location global products and services global marketing communication Global competitive moves

Firm level factors of pricing

past and current corporate philosophy, organization and managerial policies. Country of origin is also a major factor consumers take into account when deciding how much to pay for a product.

Categories of service:

people processing (education, health care, lodging), possession processing (car repair, equipment installation, laundry service), information-based services (telecommunication services, banking, news) - best chance of worldwide standardization from one central location.

People characteristics distance

per capita income, purchasing power, lifestyles, preferences, etc.

Long-term forecasts

periods of 3 years or more, worked out from macro environmental factors such as government policy and economic trends. Needed mostly by financial accountants for long-term implications. And used by board of directors.

Managing logistics

physical movement of goods through the channel systems -order handling, transportation, inventory, storage and warehousing

Market selection process

picking the right market is the determinant of success or failure, influences the nature of foreign marketing programs, and the geographic location affects the firm's ability to coordinate foreign operations

Country risks

political risks and risks outside the firm's scope of control.

Transaction cost analysis model (TCA)

predicts that a firm will perform internally those activities it can undertake at a lower cost through establishing an internal (hierarchical) management control and implementation system while relying on the market for activities in which independent outsiders have a cost advantage.

When to use exclusive distribution

premium, high-end product, luxury

Ex-works (EXW)

price is quoted by the seller applies at a specified point of origin and buyer is responsible for all charges from this point. Represents the minimum obligation for the exporter.

Transfer pricing

prices charged for intracompany movement of goods and services. While transfer prices are internal to the company, they are important externally for cross-border taxation purposes.

Purchasing process

problem recognition, information search, evaluation of alternatives, choice/purchase, post-purchase behavior.

Direct export

producing firm takes care of exporting activities and is in direct contact with the first intermediary in the foreign target market.

Unchanged promotion- adapted product

product adaptation

Unchanged promotion- new product:

product creation

Learning to sell niche products

products that are unique, middle of tail products, not the one with the most competition but not the one with no sales or no competition

Adapted promotion- unchanged product:

promotion adaptation

Promotion by private organizations

promotion by on governmental orgs: industry and trade associations, chambers of commerce, other orgs concerned with trade promotion - export researchers, promotion orgs, world trade centers, export associations and clubs, banks, transport companies

Consumer panels

provide information on their purchases over time.

Market factors

purchasing power of the customer, pressure of competitors.

Mobile commerce

push service/product sales. Core service product or app that sells products or services.

Gross rating points (GRPs)

reach multiplied by frequency, GRPs may be estimated for individual media vehicles. Media planning is often based on cost per 1000 GRPs

Implications of the internet for pricing across borders:

reduction of asymmetric information between sellers and buyers (lock-in effects) buyers can affect price), dual-channel pricing (online and in-store price), dynamic and time-based pricing,

Administrative delays

regulatory controls or bureaucratic rules designed to impair the rapid flow of imports into a country

Cultural electives

relate to areas of behavior or to customs that cultural aliens may wish to conform to but that are not required A cultural elective in one country may be an imperative in another

Polycentric orientation

represented by country subsidiaries. This orientation is based on the assumption that markets/countries around the world are so different that the only way to succeed internationally is to manage each country as a separate market with its own subsidiary and adapted marketing mix.

Ethnocentric orientation

represented by the domestic-based sales representatives. This orientation represents an extension of the marketing methods used in the home country to foreign markets

Geocentric orientation

represented by the transnational organization. Based on the assumption that the markets around the world consist of similarities and differences that it is possible to create a transnational strategy which takes advantage of the similarities between the markets by using synergy effects to leverage learning on a worldwide basis

Cost, insurance and freight (CIF):

same as CFR except the seller must also provide the necessary insurance.

Ex ante costs

search costs and contracting costs (before anything is produced)

Distinctive features

see less price competition. Basic strategy for manufacturers is to make minor modifications for each distribution channel and thus have different target segments. However, unless the changes add value, the risk is that the manufacturer will annoy distributors and customers. With continually falling search costs and rich information resources, achieving differentiation can be difficult.

Possible strategies to reduce grey marketing

seek legal redress, change the marketing mix (product strategy, pricing strategy, warranty strategy)

Vertical integration

seeking control of channel members at different levels of the channel (ex: the manufacturer's acquisition of the distributor)

Horizontal integration

seeking control of channel members at the same level of the channel (ex: the manufacturer's acquisition of the competitor)

Opportunistic behavior

self interest with guile - misleading, distortion, disguise, and confusion.

Free alongside ship (FAS):

seller must provide for delivery of the goods free alongside, but not on board the transportation carrier. Buyer pays for loading of goods onto the ship.

Reverse Auctions

sellers bid prices for which they are willing to sell items or services

Reverse Auction

sellers compete in deciding whether to accept (or not) the price set by the buyer. Example: Name Your Price for Priceline.

Cross-selling

selling an additional product or service to an existing customer

Premium pricing

set prices high level and remain at high level to show quality

Affordable approach

setting the promotion budget at the level management thinks the company can afford

Competitive parity approach

setting the promotion budget to match competitors' outlays

SME's

small and medium enterprices

Equity

some investment of a defined financial value

Intermediate modes

somewhere between using export modes (external partners) and hierarchical modes (internal modes)

Export management company/export house

specialist companies set up to act as the 'export department' for a range of non-competing companies. Conducts business in the name of each manufacturer. May specialize and paid by commission. May carry competing products too.

Product factors:

stage in PLC, place in product line, most important product features, product positioning, product cost structure

Brand portfolio audit

start with list of brands, differentiate between strategic and non-strategic brands (sell or withdraw), break down Global, glocal and local strategic brands then are they status quo or extensions and finally get to final portfolio

Price Skimming

starting high price and lowering to attract segment by segment, first getting the customers worth paying high price then decrease price as competition grows.

Penetration pricing

stimulates market growth and captures market shares by deliberately offering products at low prices. Reduce prices through economies of scale. Assumption is that lower prices will increase sales will fail if the main competitors reduce their price to a correspondingly low level. Low price could lead to low confidence of consumer. Motives include intensive competition and lower income levels of local consumers.

Unchanged product-unchanged promotion

straight extension or rollout

Distribution decisions

structure of the channel, managing and controlling distribution channels, managing logistics

Ad hoc research

study focuses on a specific marketing problem and collects data at one point in time from one sample of respondents.

Strategic development subcontracting

subcontractors possess a critical competence of value to the contractor. Involved in contractor's long-term planning and activities are coordinated)

Interaction environment

supplier & customer relationships evolve in a general macro- environment that can influence their very nature. Considers culture, political and economic context, social, market structure and market dynamism

Establishing switching costs

suppliers can reduce the amount of competition among the channel members they face by creating switching costs.

Dimensions of the international product offer

support services, product attributes, core product benefits

Nationalization

takeover of foreign companies by the host government