International Marketing

problems for international advetiser

-Cultural contexts = misunderstandings -Language barrier and translation issues (swiz has 4 languages) -Lack of market data and coverage

marxist-socialist

-Had to develop a commercial legal system that allowed engagement in active international commerce -Law is subordinate to prevailing econ conditions -Fundamental propositions like private ownership and contracts have had to be developed -Pattern for development varies: economies at different stages

Price escalation

-Ultimate prices are raised by shipping costs, -insurance, packing, -tariffs, -longer channels of distribution, -larger middleman margins, -special taxes, -admin costs, and -exchange rate fluctuations -Inflation/deflation -Middleman and transportation -Underdeveloped infrastructures

back translation

-bilingual speaker translates into their native language then translated back by bilingual speaker who's native language is the original -Repeat translations and back helps identify errors but is time consuming

four heritages that form the basis for the majority of the legal systems of the world

-common law -civil or code law -islamic law -marxist-socialist principles

4. What are the three major components of a product?

-core -packaging -support services

public relations

-create goodwill for the company -get coverage in editorial space -press relations -market offering publcity -corporate communication -lobbying -counselling -manage brand crisis/launch new product

common law

-english law o Interpretation through past decisions of higher couts o Customary law principles to similar set of facts o Ownership by use o Not all-inclusive

arbitration

-formal conciliation -Tribunal assigns conciliators to mediate -Clauses: according to rules and procedures or some arbitration tribunal and obey decisions resulting from

5. What are the three major branding strategies for global companies?

-global -national -private

Personal selling/sales force

-group in company directly involved in selling product or service -prospect, target, communicate, selling, servicing, info gathering, allocating

elements in the communication process

-information source -encoding -message channel -decoding -receiver -feedback -noise

integrated marketing communications

-interactive marketing -sales promotions -word of mouth -advertising -public relations -personal selling -events and experiences -direct marketing

Conciliation

-mediation -non-obligatory -private/confidential

patterns of distribution

-middlemen services -line breadth -costs and margins -channel length -non-existent channels -block channels -stocking -power and competition

five phases of international marketing involvement.

-no direct foreign marketing -Infrequent foreign marketing -regular foreign marketing -international marketing -global marketing

Sales promotions

-offers incentive to buy (not reasons) -samples -coupons -free trials

advertising

-paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor -target by market segment rather than national boundaries

6 steps of selling

-prospect -pre-approach -presentation -overcome objections -closing -follow up

Direct Marketing

-reach consumers without marketing intermediaries -direct mail/catalogues -telemarketing -kiosks -websites -direct feedback -target specific customers

word of mouth

-receiver regards communicator as impartial -create brand ambassadors -loyalty when rec from friend -buzz marketing generates publicity

International advertising

-same primary function across nations -psychological attributes have significant differences

Parallel imports examples

-textbooks -pharmaceuticals

Interactive Marketing

-websites -search ads/banner ads -personal

Skimming Pricing examples

Apple

Penetration Pricing examples

KFC and McDonalds

Transfer Pricing Example

Red Bull

global marketing example

apple

nonexistent channels

appropriate channels do not exist

Marketing communications

are the means by which firms attempt to inform, persuade, and remind consumers about the products and the brands they sell.

Regular foreign marketing example

chipotle

Parallel translation

committee of translators who are fluent in at least two languages of the survey discuss alternative versions and make modifications

Multicultural research:

dealing with countries that have different languages, economics, social structures, behavior, and attitude patterns

cost and margins

depends on level of competition, services, efficiencies of scale, geographic and turnover factors related to market size, purchasing power, tradition

Infrequent foreign marketing example

flowers in holand sold in spain if they have surplus

• World Court can only handle disputes between...

governments

stocking

high cost of credit, danger or loss through inflation, lack of capital cause foreign middlemen to limit inventories

blocked channels

international marketers may be blocked by competitors already established lines, trade associations, or cartels

channel length

inverse relationship between channel length and size of purchase

no direct foreign marketing example

la casera

national

o Acquiring national brand names o Nationalistic pride impact on brands o Use global brands where possible and national where necessary

private

o Challengers to manufacturer's brands o Retailer with higher margin o Quality products at low prices

civil or code law

o Derived from roman law o 3 codes: commercial, civil, and criminal o ownership by registration o complete because catchall provisions

islamic law

o Interpretation of Koran o Commercial legal system in socialist economies o Complete system of social and economic behavior for all o No payment of interest o Ethical, moral, social, religious dimensions

Penetration Pricing

o Low initial entry price o Attracts new customers o Quickly gain market share or increase sales volume o Demand is elastic or price sensitive o Mass market/standardization

Regular foreign marketing

o Production capacity devoted to foreign market o Firm depends of profit from foreign markets o Products adapted to foreign markets as demand grows o Domestic or foreign intermediaries

-no direct foreign marketing

o Products reach foreign markets indirectly (wholesale/website/distributors/contact firms) o Do not actively cultivate international customers

Skimming Pricing

o Recover investment costs quickly before competition steps in o Reach price insensitive market o Limited supply available o Innovative = premium price

Infrequent foreign marketing

o Temporary surpluses caused by variations in product levels/demand o No intention of maintaining continuous foreign market rep

Global marketing

o Treat world including home market as one market o Market segmentation not focused on national borders o More than half revenue from abroad o Organization= global perspective

global

o Worldwide use of a name, term, sign, symbol, design intended to identify goods aor services of one seller and to differentiate from competitors

3. How will entry into a developed foreign market differ from entry into a relatively untapped market?

o developed channels of distribution o government may be restrictive towards business, foreigners and industry o developed communication and transportation o high amount of capital, banks and exchange rate systems o high competition

core

o product platform, design features, functional features o product variations to satisfy local differences

support services

o repair, maintenance, installation, instructions, deliveries, warranty, spare parts

packaging

o trademark, brand name, price, quality, package, styling o some countries have label requirements o size and price is important relationship in different countries

power and competition

power concentrates in countries where a few large wholesalers distribute to a mass of small middlemen. Strong customer loyalty blocks existing channels

advertising

reason to buy

line breadth

some get everything and others have narrow lines

SRC

unconscious reference to ones own cultural values as basis for decisions

Joint venture

• A partnership of two or more companies that have joined forces to create a separate legal entity • Established separate legal entities • Intent by partners to share in management • Partnerships between legally incorporated entities • Equity positions held by each of the partners

How can we overcome ethnocentrism?

• Acknowledge distinctions • Avoid assumptions • Avoid judgments

5. Why is the formulation of the research problem difficult in foreign market research?

• Ambiguous business problems into achievable research objectives • Unfamiliar environment clouds problem definition • Must establish problem limits broad enough to include all relevant variables

conditions in phase 2 that may exist in a country that would lead a marketer to exclude a country

• Are too many cultural adaptions necessary • Will adaption costs allow for profit

1. Define strategic planning

• Attempt to manage the effects of external, uncontrollable factors on the firm's strengths, weaknesses, objectives, and goals • Commitment of resources to a country market for specific goals • Formulation of goals and methods of accomplishing them

h. Why is international marketing research generally broader in scope than domestic marketing research?

• Because higher levels of uncertainty • For comparability

legal restrictions of advertising

• Comparative advertising • Specific products like pharmaceuticals • Advertising control on television • Length and quantity limit • Special advertising taxes

factors affecting choice of distribution channels

• Cost • Capital requirements • Control • Coverage • Character • continuity

global versus adapted products

• Cultural influences are connected with perceived value • Cultural adaptation is often necessary • Must meet requirements of new market • Adaptions: legal, economic, political, technological, climate

3 main types of distribution channels

• Direct to consumer • Via retailers • Retailers and wholesalers: cheaper delivery but buy at trade prices

conditions in phase 1 that may exist in a country that would lead a marketer to exclude a country

• Economic • Political/legal • Competitive • Level of technology • Culture • Structures of distribution • Geography • Competition

4. Why do companies change their organizations when they go from being an international to a global company?

• Experiencing rapid growth and have diverse product lines

1. What is the importance of feedback in the communications process?

• Feedback: info about the effectiveness of the message that flows from the receiver or intended target back to the info source for evaluation of the effectiveness of the process

5. To what extent, and in what ways, do the functions of domestic middlemen differ from their foreign counterparts?

• Foreign middlemen often have to limit inventories due to high cost of credit, danger of loss through inflation, and lack of capital -Domestic agent usually takes possession of the goods, while foreign agents do not -Domestic agent has authority to set prices, foreign agent does not -Domestic agent does some promotion and selling -Domestic agent occasionally extends credits

conditions that have led to the development of global markets

• Growth of World Trade Organization • Regional free trade areas • Acceptance of free market system (developing) • Internet and global media (know more about other cultures and fast com) • Globalization of markets • Difficult for domestic markets to maintain rates of growth

Parallel imports

• Importers buy products from distributors in one country and sell them in another to distributors not part of manufacturers regular distribution system • Price differences > transportation costs

country-of-origin effect

• Influences that the country of manufacture, assembly or design has on a consumers positive or negative perception of the product • Stereotypes • Industrialized or developing

trends in modern channel structures

• Merging with competitors • Foreign retailers attracted by high margins and prices • Internet • Conduct transactions online for retailers and suppliers • E-commerce • Diversification of business activities • Specialization • Private brands

probably best to seek an out-of-court settlement in international commercial legal disputes

• Money • Quicker • Privacy/publicity no confidentiality • Sueing in high court can be biased • May not know foreign laws as well (unfair)

Increased interest in int marketing

• New customers • Saturated dom market • Have a product that could be adapted to foreign markets • Tech makes it easier to increase consumer awareness • Must become international to compete • Limited local market • Economies of scale

the state of international commercial law

• No single uniform international commercial law for foreign bus transactions • No judicial body for legal commercial problems between citizens of different countries • Difficult to decide who has jurisdiction

Noise?

• Noise: uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process

licensing

• Non-equity association • Transfer of knowledge rather than equity • Protects trademarks against nonuse

Transfer Pricing

• Prices of goods transferred from a company's operations or sales units in one country to its units elsewhere can be adjusted to enhance the ultimate profit of the company as a whole

adapted physically and culturally

• Product is physical primary function and psychological satisfactions/attributes • Can change tangible and intangible features • Want to gain acceptance by consumers

3. What are some of the problems created by language and the ability to comprehend in collecting primary data?

• Questionnaire translation • Inability or unwillingness of respondents to share opinions • Differences among countries

4. What are intellectual property rights?

• Right to use specific symbols, names, product features • First to use or first to register

How is strategic planning different for international marketing than domestic marketing?

• The difference is the specifics of each of the operating environments of the multinational corporation (home country, host country, corporate environment) -glocalization

problems of gathering secondary data in foreign markets

• US and European gov provide comprehensive statistics but other countries don't have the same quality and quantity • Comparability • Out of date • Infrequent and unpredictable schedule • Data reported in different categories or too broad categories

4. Discuss when qualitative research may be more effective than quantitative research.

• Uncover underlying motivations, beliefs, attitudes, and feelings • Develop an initial understanding • Deeper consumer insight into thoughts and emotions • Want to make personal observations/analyze body language • Need to ask follow up questions • Find things you didn't know you were looking for

factors necessary to achieve global awareness.

• Understand the culture of foreign market • Tolerance of cultural differences • Knowledge of cultures, history, world market potential, global economic, social and political trends

Why should a company in international marketing take special steps to protect them?

• Unique=separate from competitor • Spend money to establish brand names and trademarks • Money on research • Intellectual or industrial properties are some of the most valuable assets • Legal loss of rights in potentially profitable markets • May legally lose rights to trademarks and have to pay to use

how can a foreign market researcher overcome these difficulties

•Bak and Parallel translation • Translate into language of each respondent subgroup • Translate nonverbal stimuli as well such as pictures and advertisements • Multicultural research: • May need to alter research design