Chapter 14 Developing & Marketing Products

Front 1

1.reduce production & marketingcosts by standardizing

2.Other companies may find that standardization is not always the best strategy to use.

3. Consumers worldwide content with standardized product in certain product categories

4.National business environments affect the preferences standardization more likely levels of economic development are similar.

Back 1

Impact of globalization in international marketing activities

Front 2

1. Laws and regulations

2. cultural differences - preferences

3. brand and product names

4. natl image- influence of country it is from

5. counterfeit goods & black market - buyer's perception of low quality

6. Shortened Product Life Cycles - some countries product is well known others, not

Back 2

factors that influence the standardize-versus-adapt decision

Front 3

brand name

Back 3

Name of one or more items in a product line that identifies the source or character of the items.

Front 4

counterfeit goods

Back 4

imitation products passed off as legitimate trademarks, patents, or copyrighted work

Front 5

promotion mix

Back 5

Efforts by a company to reach distribution channels and to target customers through communications, such as personal selling, advertising, public relations, and direct marketing.

Front 6

pull strategy

Back 6

Promotional strategy designed to create buyer demand that will encourage distribution channel members to stock a company’s product.

demand is generated in order to “pull” products through distribution channels to end users.

Front 7

push strategy

Back 7

Promotional strategy designed to pressure distribution channel members to carry a product and to promote it to final users of the product.

Front 8

1. Distribution system - power & length of channel

2. access to mass media - consumer awareness

3. type of product - brand loyalty

Back 8

Factors that determine whether strategy is push or pull

Front 9

advertising that occurs in any nation is produced solely for that domestic audience due to differences in culture and laws

determine the aspects of the advertising campaign that can be standardized across markets and those that cannot to contain costs

Firms that standardize advertising often control campaigns from the home office to maintain consistent brand image

Back 9

Issues in international advetising

Front 10

marketing communication

Back 10

Process of sending promotional messages about products to target markets.

Marketers must be knowledgeable of the many cultural nuances that can affect how buyers interpret a promotional message.

Front 11

1. Product/ Communications extension(dual ext)

2. Product extension/communication adaptation

3. product adaptation/communication extension

4. Product/ Communications adaptation(dual adaptation)

5. product invention

Back 11

Methods of Marketing Communications

Front 12

Product/ Communications extension

(dual extension)

Back 12

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

Front 13

Product extension/communication adaptation

Back 13

company extends the same product into target markets but alters its promotion to satisfy a different need, serves a different function, or appeals to a different type of buyer

Front 14

product adaptation/communication extension

Back 14

company adapts its product to the requirements of the international market while retaining the product’s original marketing communication.

to meet legal requirements in the local market such as certain amount of local materials, labor etc in the production process.

Front 15

Product/communIcatIons adaptatIon

(dual adaPtatIon

Back 15

adapts both the product and its marketing communication to suit the target market

expensive on production and promotion

Front 16

Product invention

Back 16

entirely new product be developed for the target market.

often necessary when many important differences exist between the home and target markets.

Front 17

(1) the amount of market exposure a product needs

(2) the cost of distributing a product.

Back 17

two overriding concerns in establishing distribution channels:

Front 18

distribution

Back 18

Planning, implementing, and controlling the physical flow of a product from its point of origin to its point of consumption.

Front 19

channel members or intermediaries

Back 19

Companies along a channel that work together in delivering products to customers

Front 20

extensive channel

intensive channel

Back 20

degree of exposure in distribution

Front 21

exclusive channel

Back 21

Distribution channel in which a manufacturer grants the right to sell its product to only one or a limited number of resellers.

Front 22

intensive channel

Back 22

Distribution channel in which a producer grants the right to sell its product to many resellers.

Front 23

Channel length

zero-level channel/direct marketing

— producers sell directly to final buyers.

one-level channel

- one intermediary between producer & buyer

Back 23

refers to the number of intermediaries between the producer and the buyer.

Front 24

value density

the lower a product’s value density, the more localized the distribution system.

Back 24

Value of a product relative to weight & volume.

i.e cement, iron ore, and crude oil, have low value-density ratios—they’re heavy but not particularly “valuable” but the cost of transporting these goods is high, they can be processed or manufactured in the optimal location and then shipped to market.

Front 25

1. lack of market understanding

2. Theft and corruption problems

Back 25

Special Distribution Problems

Front 26

worldwide pricing

dual pricing

Back 26

two pricing policies that companies use in international markets

*The pricing strategy that a company adopts must match its overall international strategy

Front 27

worldwide pricing

- difficult to achieve bec of :

1. production costs differ bet nations

2. cost of exporting is different hence different selling price

3. purchasing power of local buyers

4. fluctuating currency values

Back 27

Policy in which one selling price is established for all international markets

Front 28

dual pricing

Back 28

Policy in which a product has a different selling price (typically higher) in export markets than it has in the home market.

Front 29

price escalation

Back 29

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)

Front 30

Some companies determine that domestic market sales are intended to cover all product costs (R&D, administration & overhead expense). They then require exports to cover only the additional costs associated with exporting and selling in a target market (such as tariffs). In this sense, exports are considered a sort of “bonus.”

Back 30

Circumstance where export price is lower than home market price

Front 31

1. Transfer pricing

2. arms length pricing

3. price controls

4. dumping

Back 31

Factors Affecting Price Decisions

Front 32

transfer price

Back 32

Price charged for a good or service transferred among a company and its subsidiaries.

Front 33

arm’s length price

Back 33

Free-market price that unrelated parties charge one another for a specific product

Front 34

price controls

Back 34

Upper or lower limits placed on the prices of products sold within a country.

Front 35

dumping

Back 35

occurs when the price of a good is lower in export markets than it is in the domestic market.