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131 Cards in this Set

  • Front
  • Back
International Marketing definition
The performance of business activities to plan, price, promote and direct the flow of a company's good's and services to consumers or users in more than one nation for profit
Lead-lag analysis
An assumption for demand forecast. Market penetration curve in a region will have the same parameters of demand and rate of diffusion as another similar region, being time the only difference between them.
Phases in internationalization
1. Internationalize?
2. Target markets
3. How to enter them
4. Program design
5. Implementation of of the global marketing programme
Advantages and disavantages of primary data
Advantages: timelessness
Disavantages: money and time costs
Advantages and disavantages of secondary data
Advantages:Money and time costs
Disavantages: possibly outdated, frame used may not fit the marketing situation properly, possibly intentional bias, impossiblity of verifiying the experiment
Methods of market estimation
-Lead-lag analysis
-Expert opinion
A comparison with a similar market is used for estimation. The factor used for analogy is called correlation factor, which is believed to be proportional in relation to a variable in both markets
Market is estimated by:
Production + Imports -Exports - Current inventory levels = Consumption
Political Risks
-Expropriation (Confiscation + partial refund)
-Domestication (Statization)
Lessening political vulnerability
The relationship with the government must be positive. Some ways to do this:
- Use national manpower
- Improve exports/ Reduce imports (import substitution)
- Use locally produced resources
- Transfer capital, technology, skills
- Make tax contributions
Which is the best way to contract an agency to do the research?
Contract an international agency in your home country which has subsidiaries in the target country. This way, all studies will be conducted by the same institution, assuring comparability, prices can be reduced and controlled, due to the contract for many studies at once, and there's assurance of quality, once one knows the agencies in his or her home country.
Trade Barriers
Exchange rate
Voluntary export restraints
Import restrictions (raw materials for foreign enterprises)
Boycotts and embargoes
Monetary barriers
Local-content laws (a portion of products sold in the country must have local content)
Price controls
Antidumping penalties
Monetary barriers
Blocked currency
Differential exchange
Government approval
Current dynamic of population trends in most markets
Population decline in more-developed countries
Population aging
Rural/urban migration
The sum of the values, rituals, symbols, beliefs, and thought processes that are learned, shared by a group of people,from generation to generation.
Ways by which individuals learn culture
-Socialization (growing up and having social contact)
-Acculturation (adjusting to a new culture)
Consequences of culture
-Management style
-Consumption behavior
Origins of culture
-Techonology and political economy
-Social institutions
Elements of culture
-Cultural values
-Though processes
Hofstede's 5 cultural dimensions
-Long-term orientation
-Power distance
-Uncertainity avoidance
Key to sucessful international marketing
Adaptation to the environmental differences from one country to another
Primary obstacles in international marketing
-Self-reference criterion
Factual knowledge vs interpretive knowledge
Factual: raw facts and data
Interpretive : meaning of such facts within each culture, peculiarities and nuances
Cultural imperatives, electives, and exclusives
Concepts regarding behaviors in relation to a cultural alien

Imperatives: must adopt
Electives: has the possibility to adopt
Exclusives: must not adopt
Three typical authority patterns
-Comitee or group decisions
Monochronic and polychronic use of time
Monychronic - One thing at a time
Layer of culture (EDIT)
Determinants in the firm of the firm's choice of foreign markets
Degree of internationalization
Size/amount of resources
Type of industry/nature of business
Internationalization goals
Existing networks of relationships
Determinants in the market of the firm's choice of foreign markets
International industry structure
Degree of internationalization of the market
Host country:Market potential/Competition/Distance/Market similarity
International Marketing segmentation
1- Segmentation criteria
2-development of segments
3-Screeening of segmenta
criteria for an effective segmentation
Relationship between relevance and Measuribility, Acessibility and actionability in market segmentation
The greater the relevance, the lower the Measuribility, Acessibility and Actionability
actionability expresses the notion that the segment targeted must be of an appropriate size for the company's resources to handle
Segment screening process
1-Preliminary screening - Environmental risks/ (BERI)
2-Fine-grain screening - market Attractiveness
BERI and its criteria
Business Environmental Risk Intelligence

Political stability
Economic growth
Currency convertibility
Labour cost/ productivity
Short-term credit
Long-term loans/venture capital
Monetary inflation
Balance of payments
Enforceability of contracts
Bureaucratic delays
Local management
Professional services
Dimensions of market/country attractiveness
Market size
Market growth
Buying power of customers
Market seasons
Average industry margin
Competitive conditions
Market prohibitive conditions
Government regulations
Economic and political stability
Psychic distance
Criteria for developing subsegments
Life style/Psychographics
Consumer motivations
Buyer behavior
Regions which bring a similar response to any marketing-mix strategy
Balance of payments
Nation's history of financial transactions
Importance of the GATT
Paved the way for the first effective worldwide tariff agreement
World Trade Organization
An institution, not an agreement as was GATT (153 members)
Provides a panel of experts to hear and rule on trade disputes between members
All member countries will have equal representation
For the first time, member countries undertake obligations to open their markets and to be bound by the rules of the multilateral trading system
Areas which provide opportunities in International Marketing
Multinational Market regions
Emerging Markets and Developing countries
Multinational market region
A group of countries
that seek mutual economic benefitfrom reducing trade and tariff barriers
Free trade areas
Reduce or eliminate customs duties and nontariff trade barriers among partner countries
Customs union
Free trade area + a common external tariff
Levels of mutinational cooperation
Regional Cooperation Group (RCD)
Free Trade Area (FTA)
Customs union
Common market (mobility of labour, capital and technology)
Political union
Market potentials should be viewed in the context of
regions of the world rather than country by country.Why?
Globalization of markets
Worldwide trend toward economic cooperation
Enhanced global competition
Stages of economic development, according to Roston
The traditional society
The preconditions for takeoff
The takeoff
The drive to maturity
The age of high mass consumption
Stages of economic development, according to the United Nations
MDCs (more-developed countries)
LDCs (less-developed countries)
LLDCs (least-developed countries)
Countries that are experiencing rapid economic expansion
and industrialization and do not exactly fit as LDCs or MDCs
Factors that comprehend the concept of Global Awareness
Tolerance of cultural differences
Cultural adjustments
Be able to interpret effectively the influence and impact of the culture in which you hope to do business
Avoid measuring and assessing markets against the fixed values and assumptions of your own culture
Proactive motives for internationalization
Profit and growth goals
Managerial urge
Technology competence
Foreign market opportunities
Economies of scale
Tax benefits
Reactive motives for internationalization
Competitive pressures
Domestic market saturated
Unsolicited foreign orders (foreign market becomes aware of the product and shows interest on it)
Extend sales of seasonal products
Proximity to international customers
Internal triggers for Internationalization
Internal triggers
Perceptive management
Specific internal event
Importing as inward internationalization
External triggers for internationalization
External triggers
Market demand
Competing firms
Trade associations
Outside experts(Banks, Governments, Export agents, Chambers of commerce)
Barriers hindering export initiation
Insufficient finances
Insufficient knowledge
Lack of foreign market connections
Lack of export commitment
Lack of capital
Lack of productive capacity
Lack of foreign channels of distribution
Management emphasis on developing domestic markets
Cost escalation
General Market risks
Competition from other firms, Differences in product usage , Language and cultural differences, Difficulties in finding the right distributor, Differences in product specifications, Complexity of shipping services
Commercial risks
Exchange rate fluctuations ; Failure of export customers to pay due to contract disputes, bankruptcy, refusal to accept product, or fraud; Delays and/or damage in the export shipment and distribution process ; Difficulties in obtaining export financing
Political risks
Foreign government restrictions ; National export policy ; Foreign exchange controls imposed by host governments ; Lack of governmental assistance in overcoming export barriers Lack of tax incentives ; High value of domestic currency relative to export markets ; High foreign tariffs on imported products ; Confusing foreign import regulations and procedures ; Complexity of trade documentation ; Enforcement of national legal codes regulating exports ; Civil strife, revolution, and wars disrupting foreign markets
Risk-management strategies
Avoid exporting to high-risk markets
Diversify overseas markets
Insure risks when possible
Structure export business so that buyer bears more risk
The Competitive Triangle
Consists of a customer, the firm, and a competitor. The winning of the customer’s favour depends upon the perceived value offered compared to the relative costs between the firm and the competitor.
Levels of analysis in international competitiveness and recommended methods for each level
Macro: national competitiveness - Porter's diamond
Meso: competitiveness inside an industry - Porter's five forces
Mirco: value chain analysis - value chain analysis
Multicultural research
Research dealing with cultures with different:
social structures,
attitude patterns
Alternative market-entry strategies, from the most externalized to the most internalized
Contractual agreements
Strategic Alliances
Direct Investment
Direct and indirect exporting
Direct exporting: the company sells to a customer in another country (particularly for high technology and big ticket industrial products).
Indirect exporting: the company sells to a buyer (importer or distributor) in the home country, who in turn exports the product.
Contractual agreements and their types
Long-term, nonequity associations
between a company and another in a foreign market
To establish a foothold in foreign markets without large capital outlays.
A favorite strategy for small and medium-sized companies.
Legitimate means of capitalizing on intellectual property in a foreign market.
-Franchising:Expected to be the fastest-growing market-entry strategy.
Franchiser provides a standard package of products, systems, and management services,
Franchisee provides market knowledge, capital, and personal involvement in management.
Strategic International Alliances and their types
A business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective
A way to increase competitive strengths:
Opportunities for rapid expansion into new markets
Access to new technology
More efficient production and innovation
Reduced marketing costs
Strategic competitive moves
Access to additional sources of products and capital
-International Joint Ventures:A partnership of two or more companies that have joined forces to create a separate legal entity.
-Consortia:Similar to joint ventures and could be classified as such except for two unique characteristics: large number of participants and the fact that none of the participants in active in the target market. They are used to pool financial and managerial resources and lessen risks
Types of world markets

“global integration versus local responsiveness”
Strategic Orientations of International firms
Domestic market extension orientation: “Ethnocentric”; seeking markets where demand is similar to home market

Multidomestic market orientation:Separate marketing strategies on a country-by-country basis

Global market orientation:Strive for efficiencies of scale (standardized marketing mix applicable across national boundaries)
Types of marketing strategies
Standardization (global)
Adaptation (local)
Adaptative standardization (glocal)
Advantages of standardization
Economies of scale (purchasing, R&D, production, logistics)
Communication economies(creation and media)
Easier to manage
Brand image coherence
Similarites in consumption habits
Advantages of adaptation
Clear differences in the Consumptionhabits, needs & desires of consumers
Differences in receptiveness ofcustomers to marketing operations
Adaptation to local competition
Adaptation to local distribution systems, often heterogeneous depending on country
Many media channels strictly national
Differences in regulations & administrative procedures
Alternatives for organizing for global competition
Global product divisions - responsible for product sales all around the world
Geographical divisions - responsable for all products and functions within a given geographical area
Matrix organization - a combination of global operations and global product management (think global, act local)
Levels to consider in a decision to standardize the product
-support services
-product attributes
-core product benefits
Factors influencing the acceptance of an innovation
-Relative advantage
Concerns and opportunities in global brands
The Internet and other technologies accelerate the pace of the globalization of brands
Ideally gives the company a uniform worldwide image
Concerns:Balance the risk of losing the benefits of well established country-specific brands
Ability to translate
Global brand
the worldwide use of a name, term, sign, symbol, design, or combination thereof
intended to identify goods or services of one seller
and to differentiate them from those of competitors.
Private brands' competitive advantages
Provide the retailer with high margins
Receive preferential shelf space and in-store promotion
Are quality products at low prices
Product/Communication modes
Straight Extension Strategy (Roll-out) :Introduce the product internationally in the same form and in the same way as in the national market. No additional R&D or manufacturing costs required
Product Adaptation Strategy
:Adapt the product to local preferences, without necessarily changing the promotional support.
Grey Marketing
Unauthorized channels
Pricing strategies
Skimming: Short-term profit, product reaches only the top segments
Market Pricing: Customer price is based on competitive prices
Penetration: Low prices to get high sales
Tactics for countering price escalation
Lowering cost of goods
Lowering the export price from the factory
Lowering tariffs (customs re-classification)
Lowering distribution costs (shorter channel)
Establishing local production of the product
Pressurizing channel members to accept lower profit margins
Using foreign trade zones to lessen price escalation
Types of countertrade
-Compensation deals (goods vs good+ money)
Counter purchase ( 2 contracts: in the first, one company buys products in exchange for money, in the other, it sells afterwards the same amount of products or a rate of that amount)
Approaches to transfer pricing
Transfer at cost (rarely used)
Transfer at arm’s length: same prices as quoted to independent customers
Transfer at cost plus: local manufacturing cost plus a standard markup
Structural factors of standardized versus differentiated pricing
Industry prices
Importance of own brands
Strengths of local competitors
Consumer preferences
Sensitivity to price
Price awareness
-Standardization:Internationalization of competition
Internationalization of large retailing organizations
Major decisions on a channel
Management and control of distribution channels
Structure of a channel subdecisions
Types of intermediary (alternative distribution channels)
Coverage (intensive, selective or exclusive)
Length (number of levels)
Control resources
Degree of integration
Managing & Controlling
distribution channels subdecisions
Screening and selecting intermediaries
Contracting (distributor agreement)
Motivating (rewards to assure they will pursue your objectives as well)
Termination (legal issues)
Logistics subdecisions
Physical movement of goods through the channel systems:
Order handling
Storage / Warehousing
External determinants of a channel
Final customer's characteristics
Nature of a product
Nature of demand
Legal regulations/local business practices
Factors affecting product perception
Customer's income
Product experience
Product's end use
Product's life-cycle position
Country's stage of economic development
Final customer characteristics
Geographical distribution
Shopping habits
Outlet preferences
Usage patterns
Factors affecting the structure of a channel
Market coverage
Channel length
Degree of integration
Types of market coverage
Intensive coverage: many intermediaries
Extensive coverage: few intermediaries
Exclusive coverage: only 1 intermediary
Factors influencing channel width
Product type
Life cycle stage
Brand Loyalty
Purchase frequency
Product uniqueness
Selling requirement
Technical complexity
Service requirements
Vertical vs conventional marketing systems
Vertical = integration of each successive stage of the channel (i.e. manufacturer acquires wholesaler)
Channel lenght
Number of levels or different types of intermediaries
Logistics management
All activities involved in:

Physically moving raw material
In-process inventory
Finished goods inventory from the point of origin to the point of use or consumption
Criteria for evaluating foreign distributors
Financial and company strengths
Product factors
Marketing skills
Facilitating factors
A physical distribution system involves
Physical movement of goods
Location of plants and warehousing
Inventory quantities
Transportation mode
Order cycle time
Time between the placement of order and the receipt of goods
Factors affecting transportation mode and warehousing decisions
Where the firm’s customers are geographically located
The pattern of existing and future demands
The customer service level required
How one should storage products needing to be delivered quicky?
Near the customer
Factors affecting transportation mode decision
Cost of different transport alternatives
Distance to the location
Nature of the product
Frequency of the shipment
Value of the shipment
Availability of transport
Factors to consider in export packaging
Protection against rough handling, climate, pilferage
Effect of gross weight on import fees
Which export document protects the seller the most?
The letter of credit
Letter of credit
Financial document issued by a bank at the request of the importer, guaranteeing payment to the exporter if certain terms & conditions surrounding the transaction are met. Usually, the payment is done after the seller presents its bank the bill of lading, which is used for the seller's bank to get the money from the buyer's bank. This, in its turn, gets money from the buyer.
Why the letter of credit is not a guarantee of payment to the seller?
Because the payment happens only the seller complies exactly with the term in the letter
Role of the public relations
The role of public relations (PR) is
creating good relationships with the media
to help companies communicate messages
and build an international profile.
Possible targets of the public relations
General public
Financial markets
Goal of communication, in international marketing
Although the primary function of a product seldom differs from culture to culture, the same cannot be said of the other features or psychological attributes. One must communicate, thus, these features/attributes to each market
Challenges in message creating
Language differences
Economic differences
Sociocultural differences
Legal/regulatory differences
Competitive differences
Linguistic limitations in messages
Low literacy in some countries
Different nuances for the same word in two different regions
Translation issues
Multiples languages and dialects within a country
Legal constraints in communication
Laws that control comparative advertising vary from country to country in Europe.
Advertising of specific products
Control of advertising on television
Accessibility to broadcast media
Limitations on length and number of commercials
Special taxes that apply to advertising
The enablement of a business vision
supported by advanced information technology to increase the effectiveness
of the business relationships
between trading partners
E-marketing markets
Why does Internet increases customers' power?
Capability to gather information & purchase more easily than through traditional channels
Pre-purchase & post-sale use of the net is exploding, regardless of where the product is bought
Internet: higher repeat-purchase behaviour
Increasing consumer disposition to buy on line
E-marketing issues in the consumer purchasing decision process
Problem recognition (marketing problem - customers' needs)
Information search
Evaluation of alternatives
Choice/Purchase (easy ordering/ payment conditions)
Post-purchase behavior
Product delivery in B2C
Drop Shipping
In-store pickup
Vertical market places vs horizontal market places
Vertical: products used in a specific industry sector
Horizontal: products used in many industry sectors
Consumers offering products to businesses such as:
Advertising links
Stock photos
Infra-structure such as cars
Internet effects on the Global Marketing Strategy
Global competitive moves
Global market participation
Global activity location
Global products and services
Global market communication
Waterfall vs shower approach
Waterfall -enter marckets incrementally, one at at time, starting by the ones with highest GDP
Shower approach - enter all markets at once
Disintermediation and reintermediation in e-marketing context
In e-marketing, one does not need anymore wholesales, retailers, etc..., so a disinstermediation occurs.
However, if the manufacturer can't sell the products by itself, then a reintermediation occurs, with an e-retailer, such as Amazon.com
Types of dynamic global e-marketing
One-to-many - Information goes only from the business to the customers
Direct targeting - customers communicate their need to sellers
One-to-one direct targeting- Highest degree of interaction - example - Amazon.com
mobile marketing

Use of mobile phones to reach targeted consumers and make them react
at any time, wherever they are
Means of delivering information and communication in M-Marketing
Vortals (voice activated portals)
Text applications (SMS)
Web-mediated delivery (3G spectrum)
Characteristics of M-Marketing vs E-Marketing
Convenience and accessibility
Personalization (PC often shared)
Localization (GPS)
Benefits of M-Marketing for Merchants
Impulse buying
Drive traffic
Consumer education
Perishable products (plane seats)
Drive efficiency
Target market
Benefits of M-Marketing for customers
Comparison shopping
Bridge gap between bricks and clicks
Opt-in searches (alert when product becomes available)
Travel (flexibility)