4.7 international marketing Flashcards
Methods of entry to international markets?
Internet- e-commerce
Export
Direct investment
Joint venture
Franchising
Direct exporting?
With own resources and high commitment
Limitation of direct export vs indirect export?
Lack of knowledge on the local market (legal constraints, segments etc)
Issues with distribution channels
Direct investment?
Setting up a new plant or merger/equisition of existing
Commitment of Export vs direct investment?
Direct investment involves more commitment
Disadvantage of direct investment?
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
Which type of entry into international markets involves sharing resources?
Joint Venture
Disadvantages of Joint Venture?
- Divergent ideas of management and
- resulting ineffectiveness
- Loss of comparative advantage to the partner and potential competitor
What is the term to describe the remuneration paid to franchisor for their know-how?
Royalty
2 main forms of remuneration payed to franchisor for their know-how?
Franchise fee
% of sales
The term to describe one of the methods of indirect export when the producer uses the distribution channels of a local business
Piggybacking
Advantages of entering international markets
Larger market
Diversification and lowering of risks
Enhanced brand image
Economies of scale
Limitations of entering international markets
Poor STEEPLE analysis, involving
Economical challenges (low gdp per capita)
legal challenges
Social etc
International marketing/globalisation vs strategy developments
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
Changes in strategies vs globalization vs culture?
Globalisation means more stakeholders involved with differing cultures. Agreement on decisions about strategy changes becomes therefore harder.
Doole’s 3 aspects of strategies if you want to succeed on international market?
- Thorough knowledge of international market and strong positioning
- Effective communication with customers and commitment to quality
- Nurturing the culture of continuous learning
Advantage of globalization and international marketing for local communities?
Less monopolies, bigger competition resulting in:
better prices
improved quality and customer service
Advantage of direct investment (abroad)?
Lower input costs, particularly of property and labour in developing locations
Possibly more favourable tax treatment
Possibly other favourable regulations from the local government
Disadvantage of globalization and international marketing for local communities?
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
Globalisation
The process by which businesses or other organizations:
Develop international influence or
Start operating on an international scale.
Obligations of a franchisee
- Following a prescribed system: the standards, methods, procedures, techniques, and practices outlined by the franchisor.
- 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. - 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.
- Often pay also for the trainings provided by franchisors
- Protect the brand value, by strictly following prescribed rules (to preserve quality and image/brand).
- Cooperating and communicating with the franchisor.
Obligations of franchisor?
- Providing cost-effective business processes in daily operation that contribute to the growth of their business and eliminates guesswork, wastage, and inefficiencies
- Quality franchisors work hard to evolve the franchise system through perpetual research and development processes.
- Building the brand with national/international marketing efforts, also typically give franchisees assistance with their own local promotional efforts.
- Protect the brand and trademarks, ensuring maintenance of the brand value and consistency between locations, upholding quality standards throughout the franchise system.
- Provide initial training and ongoing support/consultancies.
How many franchisors do companies have?
Usually 1
How many franchisees do companies have?
Not limited, depending on brand name, resources to operate through other options etc
