Intl Mknt Exam 3

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4. Discuss the four phases of international marketing involvement

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1. Passive exporting with no direct foreign marketing
2. Infrequent foreign marketing
3. Regular foreign marketing
4. International marketing
5. Global Marketing

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5. Discuss the conditions that have led to the development of global markets.

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-globalization of markets for developed firms

-growing interdependence of worlds economies

-more well capitalized enterprises

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6. Differentiate between a global company and a multinational company

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7. Differentiate among the three international marketing concepts.

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Domestic Market extension concept: domestic company seeking sales outside of domestic products and into foreign land; international is secondary, ethnocentric mindset

Multi-domestic Market Concept: products are adapted for each market, recognizes important differences in overseas markets, polycentric

Global Marketing concept: marketing activity is global and covers world, and seen as a whole/single market

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9. Discuss the three factors necessary to achieve global awareness

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10. Define and discuss the idea of global orientation

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Corporate planning

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long term incorporating generalized goals of company

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strategic planning

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conducted at highest levels of management and deals with products, capital, research, and long/short term goals

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tactical planing

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known as market planing, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in certain markets; made at local and addresses marketing/advertising

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direct exporting

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company sells to customer in anoter country; method is most used when companies are taking first step into international business; low risks and financial losses

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indirect exporting

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company sells to buyer in home country who exports product like large retailers, wholesale supply houses and trading companies

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licensing

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establishing foothold in foreign markets without large capital; patent rights, trademark, rights to foreign licensing

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franchising

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form of licensing where franchisor provides products, systems and franchisee gives market knowledge, capital and personal involvement in mmgt

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SIA (strategic international alliance)

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business relationship by two or more companies to cooperate out of mutual need and to share risks in achieving a common objective

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Join venture

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partnership of two or more companies that have joined forces to create a separate legal entity

1. they are established legal entities
2. they acknowledge intent by partners to share in mgt of JV
3. partnerships b/w legally incorporated entities
4. equity positions are held by each of the partners

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2. Define strategic planning. How does strategic planning for international marketing differ from domestic?

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-it is at the highest level of management and deals with products, capital and research and also long and short term firm goals

-international planning requires long term commitment an at a higher level of commitment

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5. What is importance of collaborative relationships in competition?

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firms with different strengths create beneficial alliance, where both sides contributes a desired aspect that continues to improve their competencies

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11. Formulate general rule for deciding where international business decisions should be made

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12. Explain the popularity of joint ventures

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allows company to utilize skills of local partner, allows access to partner's local distribution system, allows firm to enter market where certain activities are prohibited, and access to markets protected by tariffs or quotas

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Quality

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two dimensions; market perceived quality and performance quality

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Product Homologation

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used to describe changes mandated by local product and service standards

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green marketing

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used to identify concern with environmental consequences of a variety of marketing activities

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innovation

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any idea perceived as new by a group of people

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Diffusion

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process by which innovation spreads

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Product Component Model

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Global Brand

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gives a company uniformly positively worldwide brand associations that enhance efficiency and cost savings when introducing other products with brand name

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2. Debate the issue of global versus adopted products for the international marketer.

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3. Define the country-of-origin effect on product perception. Explain each and give an example.

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country of origin effect: any influence that the country of manufacturer or design has on consumer's perception on a product quality level

*when customer becomes aware of country of origin there is a chance that the place of design will affect product image

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5. Discuss product alternatives and the three marketing strategies; domestic market extension, multidomestic markets and global market strategies

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domestic market extension: the domestic company is seeking sales outside and into foreign, they see international as secondary and have an ethnocentric mentality

multi domestic market concept: products are adapted for each market and recognizes the differences in the oversea market with polycentric mentality

global marketing concept: the marketing acitivity is global and coverts the world, which is seen as a single market

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8. Products can be adapted physically and culturally for foreign markets. Discuss.

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-the greater the differences between each country will determine the degree of product adaptation needed

-there are mandatory adaptions needed based on legal, economic, political and technolog requirements

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9. What are the three major components of a product? Discuss their importance to product adaptation

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-Core product: product platform, features, design, functional features

- Packaging Component: labeling, packaging, trademarks, brand name, quality, price, style, recyclable

-Support services: repair, maintance, instructions, install, warranty delivery, repair parts

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10. How can knowledge of the diffusion of innovations help a product manager plan international investments?

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-discover resistance, minimize resistance, facilitate acceptance

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16. Discuss “environmentally friendly” products and product development.

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-green marketing is an example of theneed to adapt products for global marketing

-consumers are demanding green products and there is more control in packaging component of solid waste

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Derived demand

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a demand that is dependent on another source

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price quality relationship

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*product whose design exceeds the wants of buyer's intended use has higher price that reflects extra capacity

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ISO 9000

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-five quality system models that gives guidelines for using international standards in quality control systems and define quality concepts

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client followers

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relationship marketing

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-make relationship important aspect of transaction

-to shift focus away from price and more on service and long term benefits

-differentiate the enterprise from competition

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10) What ISO 9000 legal requirements are imposed on products sold in the EU?

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-EU Product Liability Directive: all manufacturers will be liable if a faulty component harms a person

-Assessment for re certification is done every four years with monthly and yearly audits

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11) Discuss the competitive consequences of being ISO 9000 certified.

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-if two companies are competing the one that is ISO900 will have the edge
-it is a mean for differentiating suppliers and in high tech sectors where reliability is critical

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12) Discuss how characteristics that define the uniqueness of industrial products lead naturally to relationship marketing. Give examples

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13) Discuss some of the more pertinent problems in pricing industrial goods.

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Distribution Process

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includes all physical handling and distribution of goods, passage of ownership/standpoint of marketing strategy

-also the buying and selling negotiations b/w producers and middlemen

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Distribution Structure

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where goods pass from producer to user;

-different middlemen whose functions and activities reflect competition and econ development

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Large-scale Retail Store Law

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designed to protect small retailers from large intruders into their markets; any store larger than 5382 feet approval from prefecture gov and new proposals are first judged by the MITI

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Agent Middlemen

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work on commission and arrange for sales in foreign country but do take on title

* they represent principal and match sellers to buyers

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merchant middlemen

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*take title to the goods and buy and sell on their own account

-less controllable than agent midd, and are criticized for not representing the best interest of manufacturer

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Home country Middlemen

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-domestic and located in firms country and provide marketing services from home base

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EMC-Export Management Company

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important middleman for firms with small international volume or unwilling to involve own personnel in international business; 1-100 peeps who handle 10% of manufactured exports

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Trading Companies

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accumulate, transport and distribute goods from many countries; important intermediaries in development of trade b/w nations

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ETC Export trading Company

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allows producers of similar products to form export trading companies; increase US exports by encouraging more efficient export trade services to producers and suppliers to improve availability of trade finance and remove anti trust disincentives

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Complementary Marketing

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piggybacking, when companies with marketing facilities and contacts in other countries with excess distribution capacity or desire for broader product line sometimes take on additional lines for international distribution

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2) Discuss the distinguishing features of Japanese distribution system

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-consists of many middlemen dealing with small retailers
-manufacturers control channel
-philosophy shaped by unique culture and laws protect the small retailers

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3) Discuss ways Jap manufacturers control the distribution process from manuft to retailer

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-inventory financing
-cumulative rebates
-merchandise returns
-promotional support

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4) Describe Japans large scale retail store act and discuss how the Structural Impediments Initiative (SII) is bringing change in Japan

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-competition from large retail stores were controlled by large scale act
-Retail store location act replaced it and put restrictions on opening of large retailers near small ones were relaxed and restrictions on opening hours were abolished
-Structural Impediment Initative (SII): series of talks designed to control domestic structural problems and to limit trade on both sides

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5) “Japanese retailing may be going through change similar to US after WWII- Discuss:

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8) Why is EMC sometimes called an independent export dept?

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11) In what circumstances is the use of EMC logical?

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-when firms are relatively small international volume
-when companies are unwilling to involve their own personnel in international function

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14) Review key variables that affect the marketer’s choice of distribution channels

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1. Cost
2. Capital
3. Control
4. Coverage
5. Character
6. Continuity

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17) Discuss various methods of overcoming blocked channels.

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20) Discuss why Jap distribution channels can be the epitome of blocked channels

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21) What are the two most important provisions of Export Trading Company Act?

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-allows producers of similar products to form ETC
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dumping

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1) classifies international shipments as dumped if goods are sold below cost of production 2) characterizes as selling goods in foreign market below price of same goods in home

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Parallel Imports:

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develop when importers buy products from distr. in one country and sell them to another to dist. who are not part of the manufact regular dist system

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exclusive distribution

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practice used by countries to maintain high retail margins in order to encourage retailers to provide extra service to customers/ maintain exclusive-quality image of product

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Buy-Back Agreement

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when sale involves goods/services that produce other goods/services; sellers agrees to accept goods as partial payment for goods sold

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Administered Pricing

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Attempt to establish prices for entire market; can be arranged through cooperation of competitors, governments or by international agreement

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countervailing duty

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restricts amount a country will import and maybe be imposed on foreign goods benefiting fro sbusidies

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comepnsation deal

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payment in goods and cash for transaction

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subsidy

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gove money provided to manufacturers

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cartel

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exist when various companies producing similar products or services work together to control marketys for they types of goods and services they produce

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variable cost pricing

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firm is concerned only when marginal/icremental cost of producing goods to be sold in overseas; has high fixed costs and unused production capacity

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full cost pricing

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company insists that no unit of similar product is different from any other unit in terms of cost and each unit must bear full share of total cost

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skimming

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used when objective is to reach a segment of market that is relatively price insensitive and willing to pay a premium price for value received

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price escalation

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add cost incurred as result of exporting product from one country to anotehr

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barter

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direct exchange of goods b/w two parties in transaction

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counter purchase

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seller agrees to sell product at set price to buyer and recieves payment in cash; seller also buys goods from original buyer for total monetary amount involved in first transaction or set %

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transfer pricing

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prices of goods transferred from company's operation/sales in one country to units elsewhere may be used to enhance ultimate profits for company as whole

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advanced pricing agreement

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agreement b/w IRs and taxpayer on transfer pricing methods that will be applied to some of taxpayer's transaction with affiliates in order to avoid stiff penalties

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countertrade

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important pricing tool dealing with deals that take something other than cash: barter, compensation deal, counter purchase and buy back

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Discuss causes of and solutions for parallel imports and their effect in price

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Explain concept of price escalation and tell why it can mislead an international marketer.

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-price escalation: occurs when transportaion costs drive up price of product

*midleading to marketer who believes product is overpriced;

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Price escalation is a major pricing problem for international marketer. How can this be counteracted?

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-it is hard to cheaply export products, so lowering cost of goods, lowering tarifs and lowering distribution costs can help
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Suggest an approach a marketer may follow in adjusting process to accommodate exchange rate fluctuations.

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transactions should be written in terms of the vendor companys national currency; forward hedging

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Why has dumping become such an issue in recent years?

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production in many countries exceed the demand and causes them to dump excess into foreign markets a lower price

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Cartels seem to rise, phoenix-like, after they have been destroyed. Why are they so appealing to business?

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guarantees companies will not overproduce, gurantees market share, and a certain profit margin by fixed prices

-may promote technical progress by eliminating cutthroat competition

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Discuss why countertrading is on the increase.

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countries are beggining to engage in more trade and more countries have low currencies but have raw goods; good way or global companies to trade with poor countries and way to expand markets

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Of the four types of countertrades discussed, which is the most beneficial to the seller? Explain..

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counterpurchase provides seller with more flexibility with time to complete the second contract;