International Business Ch 14
Degree of exposure
In promoting its product to the greatest number of potential customers, a marketer must determine the amount of exposure needed.
Distribution channel
The physical path that a product follows on its way to customers Companies develop their international distribution strategies based on two related decisions: (1) how to get goods into a country and (2) how to distribute goods within a country
Price escalation
When a product has a higher selling price in the target market than it does in the home market (or the country where production takes place
Promotion Mix
comprises a company's efforts to reach distribution channels and target customers through communications, such as personal selling, advertising, public relations, and direct marketing.
Transfer price
is a product's selling price when it is sold among a company and its subsidiaries _______ pricing can be used to manage global tax burdens by having subsidiaries in high-tax countries charge low prices for their output exported to affiliated parties
Push strategy
is a promotional strategy designed to pressure distribution channel members to carry a product and promote it to final users. -Implementing a push strategy can be difficult when distribution channel members (such as distributors) wield a great deal of power relative to that of producers. It can also be ineffective when distribution channels are lengthy -push strategies tend to be appropriate for inexpensive consumer goods characterized by buyers who are not brand loyal. A push strategy is also suited to industrial products because potential buyers usually need to be informed about a product's special features and benefits.
Price control
is an upper or lower limit placed on the price of a product within a country. Upper-limit price controls provide price stability when inflation is driving up prices. Lower-limit price controls can be used to help local companies compete against the less expensive imports of foreign companies or be used to ward off price wars.
Exclusive channel
is one in which a manufacturer grants the right to sell its product to only one or a limited number of resellers.
Arms length price
is the free-market price that unrelated parties charge one another. Governments may assign _________ prices on intra-company transfers to reduce tax evasion with the use of transfer prices.
Dumping
occurs when the price of a good is lower in export markets than in the domestic market
Intensive channel
one in which a producer grants the right to sell its product to many resellers When a producer wants its product to be made available through as many distribution outlets as possible
Worldwide pricing
one selling price established for international markets
One level channel
places only one intermediary between the producer and the buyer
Channel length
refers to the number of intermediaries between the producer and the buyer
Brand Name
the name of one or more items in a product line that identifies the source or character of the items
Two level channel
two intermediaries between producer and seller
Zero level channel (direct marketing)
producers sell directly to final buyers
Product/Communications Extension (Dual Extension)
-This method extends the same home-market product and marketing promotion into target markets. Under certain conditions, it can be the simplest and most profitable strategy. -The strategy also tends to be better suited for companies that use a global strategy with their products. -It can also be appropriate for global brands that have mass appeal and that cut across all age groups and social classes. -The strategy also is useful to companies that are the low-cost leaders in their industries: One product and one promotional message keep costs down.
Dual pricing
A pricing policy in which a product has a different selling price in export markets than it has in the home market
Pull strategy
A promotional strategy designed to create buyer demand that will encourage distribution channel members to stock a company's product -Developing and emerging markets typically have fewer available forms of mass media for use in implementing a pull strategy. Accordingly, it is difficult to increase consumer awareness of a product and to generate product demand -is most appropriate when buyers display a great deal of brand loyalty toward one particular brand name.
Distribution
Planning, implementing, and controlling the physical flow of a product from its point of origin to its point of consumption
Marketing communication
Process of sending promotional messages about products to target markets.
Value density
The value of a product relative to its weight and volume the lower a product's value density, the more localized the distribution system. Products with high value-density ratios include emeralds, semiconductors, and premium perfumes. These products can be processed or made practically anywhere and then shipped to markets because their transportation costs are small relative to their end values.
Product/Communications Adaptation (Dual Adaptation)
This method adapts both the product and its marketing communication to suit the target market. The product itself is adapted to match the needs or preferences of local buyers. The promotional message is adapted to explain how the product meets those needs and preferences. -very expensive
Product Invention
This method requires that an entirely new product be developed for the target market
Product Extension/Communications Adaptation
Under this method, a company extends the same product into target markets but alters its promotion. This approach helps companies contain costs because the good itself requires no alteration.
Product Adaptation/Communications Extension
Using this method, a company adapts its product to the requirements of the international market while retaining the product's original marketing communication.