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International Marketing

International Marketing

by hrq532, Jun. 2016

Subjects: International Marketing

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99 Cards in this Set

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	The International Marketing Environment	SLEPTS: Social & Cultural, Legal Economic, Political, Technological, Sustainability Issues.
	Absolute Advantage	Adam Smith . In economics, the principle of absolute advantage refers to the ability of a party (an individual, or firm, or country) to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.
	Comparative Advantage	David Ricardo. Comparative advantage is the ability of a firm or individual to produce goods and/or services at a lower opportunity cost than other firms or individuals.
	Competitive Advantage	Michael Porter. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.
	Marketing According to Kotler	Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.
	Aspects why it's difficult to do primary research in an international setting and explain how you would cope?	Sampling(try a similar country), Willingness to respond(get locals to help), Access to target(local partners), Ability to communicate opinions to strangers(local partners), language & comprehension(local partners)... research on all aspects of culture...
	The aspects of culture that could be a part of your analytical framework?	Language, religion, values & attitudes, aesthetics, education law & politics, technology & material culture, consumer behavior, social organisations.
	What will happen when the power distance is high to a country?	Only senior people can be involved and make decisions. The problem is making sure that all equally senior people are together.
	What will happen when the Individualism is low to a country?	IDV is low meaning that a group consensus would have to be reached before a decision is made. It could take a long time.
	A cultural framework	Language Religion Values and attitudes Aesthetics Education Law and politics Technology and material culture Social organisations
	The nature of consumer behavior
	CrossCultural Analysis: Hofstede’s Criteria	Individualism - IDV– Therelationship between the individual & other members of society Power distance - PDI–Dealingwith human inequality Uncertainty avoidance - UA –Managing future uncertainty Masculinity - MAS –Societies subscribing to typical stereotyping
	Language & Communication	Forms of address Context of language - low-context cultures - High-context cultures Showing emotion - Affective cultures - Neutral cultures
	Silent Languages in International Business Silent Language Implications For Marketing & Business	•Time - Appointment scheduling - The importance of being ‘on time’ - The importance of deadlines • Space - Sizesof offices - Conversational differences betweenpeople •Things - The relevance of material possessions - The interest in the latest technology •Friendship - Friendship’srole in business •Agreements - Rules of negotiations based on laws, moral practices or informal customs
	Themes of Political Risk & Regulatory Environments	Host country political climate Host government actions Home country political forces Legal environments National regulatory environments Managing political risk Global marketing and terrorism
	Political Motivations of Host Countries	Self-preservation Security Prosperity Prestige Ideology Cultural identity
	Political Motivations to Policy Actions	"Buy local": Self-preservation, Security, Prosperity Nontariff barriers: Self-preservation, Prosperity Subsidies: Self-preservation, Prosperity, Prestige Operating restrictions: Self-preservation, Security, Cultural identity Local content: Prosperity Ownership conditions: Security, Ideology, Cultural identity Boycotts: Ideology Takeovers: Self-preservation, Security, Prosperity, Ideology
	Host Country Pressure Groups Things Host Countries Can Do to Make Life Difficult for International Firms	Host country Pressure Groups Labor unions Political parties Environmental groups Local business community 2. Things host countries can do to make life difficult for international firms Government subsidies Ownership restrictions Operating conditions - Work permit - Local content requirements
	The Legal Framework	Common law: English law found in UK, USA, Canada, other British Commonwealth nations Civil(or code) law: Most of Europe, Latin America Islamic law: Derived from the Koran, 4 majors schools, sometimes not applied to commercial law Socialist law: Marxist ideology
	Attitudes Toward Rules	HNO Positive Societies: People can be trusted to obey rules HNO Negative Societies: People are not to be trusted to obey rules
	Managing Regulatory Change	Alter: Bargain to get government to change regulations Avoid: Move to bypass the impact of the regulation Accede: Comply Ally: Avoid some risks by seeking strategic alliances
	National Differences	Ability to buy Consumer needs Consumer behavior
	Consumer Markets Consumer Needs	From low to high: Biological and Physiological needs--Safety needs--Belongingness and Love needs--Esteem needs--Self-actualization(personal growth and fulfillment)
	Customer Segmentation What makes a segment viable?	Homogeneous characteristics Profit potential Ability to measure group Ability to communicate to group
	3-Step Segmentation Process	Define: - Take a look at existing customer list; look for common traits. - Analyze competitors' customer profiles Profile: - Full definition of who the segment is, their buyer behavior, attitudes/values, lifestyle. Rank: - Order of importance for business goals - Highest profitability, least competition, most in need of product/service.
	Business Markets DMU's decision maker units	Decision Maker: Initiator Other Influencers Buyer Gatekeeper User
	Cross-Cultural Negotiation	Non-task discussion Task-related exchange of information Persuasion Concession and agreement
	Global Firm vs. Global Firm Competitive Strategies	Cross Country Subsidization: Using profits from one country to subsidize competitive position in another. Counter parry: Counterattacking a competitor in one country after being attacked in another country. Globally coordinated moves: Mounting a coordinated assault across all countries. Targeting global competitors: Identifying actual & potential competitors and deciding on attack, avoidance or cooperation
	Global Firm vs. Local Firm Local Firm Competitive Strategies	Defender: Leveraging local assets Extender: Moving into foreign markets by leveraging local assets Contender: Upgrading abilities to take on global firms Dodger: Choosing to cooperate by being a link in the value chain
	Competition in Emerging Markets	Traditionally wary of competition Pressure to liberalize markets is external(WTO) and internal (consumers)
	The Scope Marketing Mix Decision and their Types of Research	1. Product policy decisions: Focus groups and qualitative research to generate ideas for new products Survey research to evaluate new product ideas Concept testing, test marketing Product benefit and attitude research Product formulation and feature testing Price sensitivity studies 2. Pricing decisions Survey of shopping patterns and behavior 3. Distribution decisions Survey of shopping patterns and behavior Consumer attitudes toward different store types Survey of distributor attitudes and policies 4. Advertising decisions Advertising pretesting Advertising post-testing/recall scores Surveys of media habits 5. Sales promotion decisions Surveys of response to alternative types of promotion 6. Sales force decisions Tests of alternative sales presentations
	•Challenges in planning international research	The global marketplace is complex - Differences from country to countries exist at many levels - Companies frequently lack familiarity with foreign markets Comparing studies across countries can be difficult International research is a relatively costly endeavor
	Market Research Process	Research Question or Problem Theme(1...2...3...) Literature Review Framework(1...2...3...) Now you have the key themes to design your questions around
	The Tasks of Research Design	Define the information needed Decide whether the design is exploratory or conclusive Design the sequence of method to understand and/or measure the phenomena Construct and pretest an appropriate means to capture data Specify qualitative and/or quantitative sampling process and sample size Develop a plan of qualitative and/or quantitative data analysis
	Research Design Classifications
	Where do research design errors come from?
	The Most Important Step The Research Question	Etic approach -Assumes that a research question in one culture can be used in another culture. This approach allows for comparison across countries, but could miss culture differences. Emic approach -Assume cultures are so different that each requires separate research study to capture the local context relative to each countries frame of reference.
	The Sources of Information	Primary Data - Data collected specifically for a research assignment Secondary data - Refers to previously collected and available data Both present challenges to global marketing research
	Data Collection Qualitative Quantitative	1. Qualitative Interviews Focus Group Other Fieldwork 2. Quantitative Questionnaires Surveys Online Databases
	International Marketing Research Problems of Gathering Primary Data	Sampling Ability to Communicate Problems of Multicultural Research Language & Comprehension Willingness to Resond
	International Marketing Research Problems of Gathering Secondary Data	Availability Access ability Timelines Reliability Accuracy
	Research Instruments	Focus groups help capture appropriate variables to investigate Creating a cross-cultural questionnaire requires -Back translation -Parallel translation Take care with idiomatic expressions - "Computers" in Taiwanese may become "calculators" to Singaporeans Be careful about using English in countries with high knowledge of English
	Types of Samples	1. Probabilistic Samples Simple Random Sampling Systematic Sampling Stratified Sampling 2. Non-Probabilistic Samples Convenience Sampling Judgment Sampling Snowball Sampling Quota Sampling
	Focus Groups	Selection and "Sample Size" 1. How focus groups should be used: Learning how your product is used Understanding customers' experience with product Acquiring descriptive consumer brand perceptions Exploratory testing of new product, positioning, and promotion strategies 2. How focus groups should not be used: Estimate size or dollar value of market Definitively identify segments Make go/no-go decisions on new products, brand positioning, or promotion strategies
	Internationalization	A firm's expansion from its domestic market to foreign markets Why? Opportunistic Expansion Pursuing Potential Abroad & Diversifying Risk Exploiting Different Market Growth Rates Following Customers Abroad Defensive Reasons
	Evaluating National Markets	1. Stand-alone Market Attractiveness Factors - Market and target segment size - Growth rate - Strength of competition - Market share potential Low taxes Incentives Globally Strategic Markets 1. German Firms & Eastern Europe in the 1990's 2. China Today
	First Mover Advantage	Gain access to key resources like the distribution system or the best retail locations Build relationships with large buyers, difficult for followers to win due to switching costs Disadvantage is that the first mover makes major investments, while the follower can learn from your successes and failures
	Screening Foreign Markets	1. Macro indicators of Country Attractiveness: Economic environment Cultural fit with product or service Macro political risk Business climate (Reject Unattractive Countries) 2. Identify countries for further analysis 3. Micro indicators of Market Attractiveness Market size Market growth Global competition Local competition Micro political risk Psychic distance (Reject Unattractive Countries) 4. Identify attractive markets 5. Assess value of lead markets and must-win markets 6. Rank Markets
	Macro & Micro Indicators for ScreeningMarket Size	Macro 1. Geographic Indicators Size of country, in terms of geographic area Climatic conditions Topographical characteristics 2. Demographic Characteristics Total population Population growth rate Age distribution of the population Degree of population density 3. Economic Characteristics Total gross national product Per-capita income Income growth rate Personal or household disposable income Income distribution Micro Radios Televisions Hospitals Physicians Alcohol consumption Gasoline consumption
	Global Market Entry Strategies	Exporting as an entry strategy - Indirect exporting, direct exporting Foreign production as an entry strategy - Licensing, franchising, local manufacturing Ownership strategies - Wholly owned subsidiaries, JVs, alliances Entering markets through mergers and acquisitions Portal or e-business entry strategies Entry strategy configuration Exit strategies
	Foreign Market Entry Modes
	Market Entry Strategies	1. Exporting Indirect exporting Direct exporting 2. Foreign Production Licensing Franchising Contract manufacturing Assembly Fully integrated production 3. Ownership Strategies Wholly owned subsidiaries Joint ventures Alliances Acquisitions 4. Entry Analysis Sales Costs Assets Profitability Risk factors
	Exporting as an Entry Strategy Indirect vs. Direct	Indirect-Intermediary is in home country Direct-Intermediary is in foreign market
	Appropriateness of Market EntryStrategies
	The Trade-OffRisk vs. Control
	Traditional Internationalization Stages	Domestic sales Stage 1: Indirect Exporting, Licensing, or Franchising Stage 2: Direct Exporting Stage 3: Direct Exporting, with Foreign Sales Subsidiary Stage 4: Local Assembly Stage 5: Full-Scale Foreign Production But born globals are on the rise@
	A product	1. Core customer value 2. Actual product: Brand name Quality Packaging Features Design 3. Augmented product: Delivery and credit Product support Warranty After sale service
	Product design in a global environment Strategy Benefits of Standardization & Adaptation	1. Benefits of Standardization Lower costs of manufacturing may be achieved through economies of scale Lower input costs may be achieved through volume purchasing Cost savings may be achieved by eliminating efforts--Market research, design, and engineering--to adapt products Fast global product roll outs are possible because no time is needed to make product adaptations International customers may prefer the same product to be available worldwide Standardized products may enhance consumer perceptions of a global brand 2. Benefits of Adaptation Mandatory adaptations allow products to be sold in otherwise closed markets Products can be sold for use in different climates and with different infrastructures Modified products may perform better under different use conditions Product costs may be decreased by varying local inputs Product costs may be decreased by eliminating unnecessary product features Greater sales may be attained by better meeting industry norms or cultural preferences
	Product design in a global environment Strategy Product Adaptation Categories	Discretionary vs. Mandatory Climatic, Infrastructure & Use Conditions Adapting products to Cultural Preferences Product Size & Dimensions Cost & Price Considerations Adapting to Performance & Quality Expectations Global Standards
	Packaging & Labeling Strategy	1. Size, Shape, Materials Product packaging norms Existing standards Economic development Environmental concerns 2. Color and text Promotional strategy Cultural meaning and implications Government regulations Language issues
	Global Warranty & Service Policies Strategy	1. Standardization versus Adaptation Domestic warranty valid worldwide Tailoring warranties to countries/markets 2. Issues to consider Actual product use Local competition Spillover effects to other markets
	Managing a Global Product Line	Not all product are suitable for ALL markets! Lines in overseas markets typically are narrower than in home market Lack of sufficient market size Niche target segments at home may be smaller or absent Lack of market sophistication New product introductions tend to begin at home
	New Product Development in Global Markets	Concept Tests Test Marketing Timing of Introduction
	Products Vs. Services	Services are: Intangible - They cannot be stored or readily displayed or communicated Simultaneous - Production and consumption happen at same time Heterogeneous - Production lines do not exist to deliver standardized products of consistent quality Perishable - Cannot be stored
	Internationalizing Services	Guaranteeing quality worldwide = hard Fewer opportunities for economies of scale Back-stage elements(planning and implementation) are easier to standardize than front-stage elements (aspects of service encounters)
	Cultural Variations in Service Expectations	Customer Expectations The Waiting Experience Service Personnel
	Branding	More than a name -- Also the intangible associations with the name User Imagery Usage Imagery Type of personality the brand portrays Type of relationship brand seeks to build with customers
	Branding Decisions	Selecting a Brand Name Selecting a Global Name Changing Brand Name
	Developing a Global Branding Strategy	Identify common customer needs and determine how brand can deliver Functional and Emotional benefits. Establish process to communicate brand's identity to consumers, channels, and firm's own employees. Establish tracking system to chronicle global brand identity. Determine whether company will employ a top-down or bottom-up global brand strategy approach.
	Consumer Evaluation of Global Brands	Consumer Segments from Global Brands Study Global citizens Global dreamers Anti globals Global agnostics
	Global vs. Local Brands	P&G tried to replace Dash, a local brand in Belgium, with the Euro brand Ariel and sales plummeted Study of European consumers found local brands were the same quality as global brands, but were more reliable and better value for money Nostalgia for local brand has caused multinational firms to resurrect old local brands Consumers like local brands for food and household items, but global brands for electronics In China Danone and Carlsberg have both decided to continue with the local brands of companies they have purchased.
	Global Brand Threats	Brand Name Preemptions -- Local individual or business registers a famous international trademark in their country before the real owner of the brand does. Brand Imitations -- Employing packaging and/or marking that closely resembles those of brand. Counterfeit Production -- Illegal use of registered trademark. Piracy -- Counterfeit production of copyrighted material.
	Pricing Methods	Cost Based Competitive Based Value Based
	Global Pricing Strategies	Analysis: 1. Company Internal Factors Profitability Transportation costs Tariffs Taxes Production costs Channel cost 2. Market Factors Income level Buyer power Competition 3. Environmental Factors Foreign exchange rate Inflation rate Price controls Dumping regulations Global Pricing Strategies Decision Making: 1. Market-by-Market Pricing 2. Uniform Pricing 3. Managerial Issues Transfer pricing Foreign currencies Parallel imports/ Gray markets Export price escalation Global pricing
	Advantages of Price Standardization	Simple planning and budgeting Develop global brand image Serve global customer with one price Meet local buyers price expectations created by - Travel - Global media - Internet - International operations(organizational buyers) Prevent gray trade
	Pressures for Price Adaptation	Competition and corporate strategy Local production and operation costs Economic development Government regulations Transportation costs Taxes, tariffs Distribution middlemen Exchange rate fluctuations
	Factors Influencing Price A Framework	Company & Product Factors Market Factors Environmental Factors
	Company & Product Factors Profit& Cost Factors that Affect Pricing	Fixed costs -- Do not change over a given range of output Variable costs -- Vary directly with output Marginal profit -- Amount in excess of variable costs
	Profit & Cost Factors	Transportation Costs - Variation in pricing among transportation methods - Sensitivity of transportation costs to price of oil Tariffs Taxes Local Production Costs Channel Costs
	Framework for Calculating Export Costs	Manufacture's FOB price Sea freight and insurance Landed cost (CIF) Import tariff: / percents on CIF value CIF plus tariff 17.5 percent VAT Distributor purchase price Distributor mark-up (15 percents) Retailer purchase price Retail margin 40 percents Consumer purchase price
	Market Factors	Income Level Culture & Consumer Behavior Buyer Power COmpetition
	Environmental Factors	Exchange Rate Fluctuations Inflation Rates Price Controls Dumping Regulations Credit & Collection Infrastructure
	Managerial Issues in Global Pricing	Managing Export Price Escalation Determining Transfer Pricing Quoting Prices in a Foreign Currency Dealing with Parallel Imports/Gray Markets Non-cash Pricing: Countertrade
	Currency Fluctuation Tactics Domestic Currency is WEAK	Compete on price Introduce new products & Features Source/manufacture in the domestic country Fully exploit export opportunities Obtain payment in cash Repatriate foreign earned income quickly Reduce costs and buy local services No overseas borrowing
	Currency Fluctuation Tactics Domestic Currency is STRONG	Compete on non-price factors Improve productivity and reduce costs Focus on strong currency countries for exports Use counter-trade for weak currency countries Reduce profit margins Keep the foreign earned income in the local country Maximize expenditures in local country currency Buy services abroad in local currencies Borrow money for expansion in local markets
	Foreign Market Channel Members	Import Intermediaries Local Wholesalers or Agents Retailers B2B Channels
	International Marketing Alternatives	1. Players: Home-Market Channel Members - Export management company - Direct exporting - Internet Foreign-Market Channel Members - Import intermediaries - Local wholesalers - Retailers 2. Process: Developing a Global Distribution Strategy - Factors affecting selection of channel members - Locating and selecting channel members - Managing the distribution channels ------ - Gaining access to the distribution channels ------ - Global supply chain management ------ - Trends in global distribution
	Analyzing distribution Policies A Framework	1. Product Strategy 2. Pricing Strategy 3. Promotions Strategy 4. Distribution Strategy: Distribution Density Channel Length Channel Alignment Distribution Logistics
	Factors Influencing the Selection of Channel Members	Costs: - Initial - Maintenance - Logistics Product & Product Line: - Perishable? - Technical? - Size of Product Line Control, Coverage & Synergy: - Price, Promotion - Type of Retail - Coverage
	Locating & Selective Channel Partners	Distribution Strategy Criteria for Selection Locate the partners Solicit their interest Screen & Select distribution partners Negotiate agreements
	ManagingGlobal Distribution	Motivation & Control & Win/Win
	Gaining Access to Distribution Channels	The Locked Up Channel Alternative Entry Approaches - Piggybacking - Joint Ventures - Acquisitions
	Global Logistics Decisions	Traffic or Transportation Management Inventory Control Order Processing Materials Handling & Warehousing Fixed Facilities Location Management
	Why do we engage in marketing communication?	Identify New Customers Changing Existing Customer Perceptions Communicate the Distinctive Brand Image, Unique Positioning Communicate the corporate identity Coordinate Staff Around Mission, Values, Objectives, Priorities & Procedures Coordinate Channel Members Communicate with all stakeholders: government, sponsors, watch dog groups
	What CONTROLLABLE challenges are there in an International Context?	Inconsistency in the message conveyed by staff at different levels, in different countries, and in different cultures. Different styles of corporate identity, brand & product image from different departments and country business units. Lack of coordination of messages across country markets. Failure to appreciate the <noise> that can occur and the misinterpretation. The decision to standardize the message & media or to adapt
	What UNCONTROLLABLE challenges are there in an International Context?	Counterfeiting or other infringements of patents or copyrights Parallel Importing versus official channels Competitors Governments Pressure Groups Note: Consumers believe reviews on websites more than rigorous, independent assessments. They create your business reality.
	Push vs. Pull Strategy	Push: by personal selling, discounts and deals. Pull: by mass advertising, sales promotion, point of sales.
	Personal Selling	International Selling - Purchasing Behavior - Buying Criteria - Language - Business Etiquette International Sales Negotiations Local Selling
	Other Forms of Promotion	Sales Promotion Sports Promotions & Sponsorships Telemarketing, Direct Mail & Spam Product placement Word of Mouth Public Relations

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