4.7 international marketing

Question 1

Methods of entry to international markets?

Answer 1

Internet- e-commerce
Export
Direct investment
Joint venture
Franchising

Question 2

Direct exporting?

Answer 2

With own resources and high commitment

Question 3

Limitation of direct export vs indirect export?

Answer 3

Lack of knowledge on the local market (legal constraints, segments etc)
Issues with distribution channels

Question 4

Direct investment?

Answer 4

Setting up a new plant or merger/equisition of existing

Question 5

Commitment of Export vs direct investment?

Answer 5

Direct investment involves more commitment

Question 6

Disadvantage of direct investment?

Answer 6

If capital intensive, it may be very hard to take out investments without huge losses

May result in loss of focus of top management - because of high commitment and heavy investment abroad, main and well established markets may have less attention

Question 7

Which type of entry into international markets involves sharing resources?

Answer 7

Joint Venture

Question 8

Disadvantages of Joint Venture?

Answer 8

1. Divergent ideas of management and
2. resulting ineffectiveness
3. Loss of comparative advantage to the partner and potential competitor

Question 9

What is the term to describe the remuneration paid to franchisor for their know-how?

Answer 9

Royalty

Question 10

2 main forms of remuneration payed to franchisor for their know-how?

Answer 10

Franchise fee
% of sales

Question 11

The term to describe one of the methods of indirect export when the producer uses the distribution channels of a local business

Answer 11

Piggybacking

Question 12

Advantages of entering international markets

Answer 12

Larger market
Diversification and lowering of risks
Enhanced brand image
Economies of scale

Question 13

Limitations of entering international markets

Answer 13

Poor STEEPLE analysis, involving
Economical challenges (low gdp per capita)
legal challenges
Social etc

Question 14

International marketing/globalisation vs strategy developments

Answer 14

Markets are dynamic and change all the time, even more on the international level.
So the strategies need to recognize and adapt to changes

note the authors - Hamel &Prahalad

Question 15

Changes in strategies vs globalization vs culture?

Answer 15

Globalisation means more stakeholders involved with differing cultures. Agreement on decisions about strategy changes becomes therefore harder.

Question 16

Doole’s 3 aspects of strategies if you want to succeed on international market?

Answer 16

1. Thorough knowledge of international market and strong positioning
2. Effective communication with customers and commitment to quality
3. Nurturing the culture of continuous learning

Question 17

Advantage of globalization and international marketing for local communities?

Answer 17

Less monopolies, bigger competition resulting in:
better prices
improved quality and customer service

Question 18

Advantage of direct investment (abroad)?

Answer 18

Lower input costs, particularly of property and labour in developing locations

Possibly more favourable tax treatment

Possibly other favourable regulations from the local government

Question 19

Disadvantage of globalization and international marketing for local communities?

Answer 19

Cultures become less diverse, this may not be acceptable for older generations in particular

International brands with economies of scale and stronger bargaining power (with suppliers, e.g.) may take the profits away from he local brands

Question 20

Globalisation

Answer 20

The process by which businesses or other organizations:

         Develop international influence or 
        Start operating on an international scale.

Question 21

Obligations of a franchisee

Answer 21

1. Following a prescribed system: the standards, methods, procedures, techniques, and practices outlined by the franchisor.
2. Paying your dues.
   2.1 Mostly a one-time
   “franchise fee” up front, then -
   2.2 ongoing fees as a kind of
   “rental fee” for the right to use
   the system.
3. Handling local-level finances and marketing. Franchisors will push the brand name on a international scale, but it’s usually up to the franchisee to promote their site locally.
4. Often pay also for the trainings provided by franchisors
5. Protect the brand value, by strictly following prescribed rules (to preserve quality and image/brand).
6. Cooperating and communicating with the franchisor.

Question 22

Obligations of franchisor?

Answer 22

1. Providing cost-effective business processes in daily operation that contribute to the growth of their business and eliminates guesswork, wastage, and inefficiencies
2. Quality franchisors work hard to evolve the franchise system through perpetual research and development processes.
3. Building the brand with national/international marketing efforts, also typically give franchisees assistance with their own local promotional efforts.
4. Protect the brand and trademarks, ensuring maintenance of the brand value and consistency between locations, upholding quality standards throughout the franchise system.
5. Provide initial training and ongoing support/consultancies.

Question 23

How many franchisors do companies have?

Answer 23

Usually 1

Question 24

How many franchisees do companies have?

Answer 24

Not limited, depending on brand name, resources to operate through other options etc