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MKTG3310 International Marketing > 9 Logistical Challenges: Avoiding Price Escalation & Piracy > Flashcards

9 Logistical Challenges: Avoiding Price Escalation & Piracy Flashcards

1
Q

List the role of intermediaries.

A
  1. Coordinating - demand with product availability & facilitating negotiation
  2. Protecting - buyer/seller from opportunism
  3. Reducing - transaction costs by smoothing bargaining process
  4. Matching - buyers with sellers + facilitating exchange between parties
  5. Providing - necessary physical distribution/logistical support
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2
Q

Recap of market entry options.

A
  1. Export intermediaries
  2. Direct export
  3. Exporting intellectual content
    - Licensing
    - Franchising
  4. Manufacturing
    - Assembly
    - Contract manufacture
    - Joint Venture
    - Acquisition
  5. Strategic Alliances
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3
Q

List the different distribution criterias.

A
  1. Structural Dimensions
  2. Channel Availability
  3. Cultural Issues
  4. Commercial Environmental
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4
Q

List the structural dimensions.

A
  1. Length: how many intermediaries required to reach end consumer?
  2. Width: how many intermediaries at each level?
  3. Density: what level of market coverage is required?
  4. Alignment: how closely will each level coordinate?
  5. Logistics: who handles the physical transfer?
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5
Q

Channel availability?

A
  • Does it exist?
  • Does it reach the target market?
  • Do competitors occupy/control key channels?
  • Can you identify complementary channels?
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6
Q

Cultural Issues?

A
  1. Psychic distance – attitude and perception

2. Affects trust, risk, knowledge

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7
Q

Government/Legal Constraints?

A
  1. Trade barriers & Protective regulation

2. Retail price maintenance, turnover tax, liability, contracts, territory restrictions etc.

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8
Q

Commercial/Environmental Constraints?

A
  1. Intermediary role

2. Competitive stance

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9
Q

Channel Configuration Decisions.

A
  1. Cost
  2. Control
  3. Commitment
  4. Nature of Product
  5. Nature of Market
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10
Q

Cost?

A
  1. Time and financial
  2. Inventory
  3. Order-handling
  4. Transportation
  5. Margins, mark-ups, commissions
  6. Sales, inventory, credit, advertising
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11
Q

Control?

A
  1. Influence over key marketing decisions
  2. Where and how it is being sold
  3. Can increase risk exposure
  4. Can trade off for greater local knowledge and access
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12
Q

Commitment?

A
  1. Sole (exclusive) distributor or open network of intermediaries
  2. Will influence market coverage, coordination of roles, entry/withdrawal expenses etc.
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13
Q

Nature of Market?

A

Gov control, buying preferences, demand cycles

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14
Q

Nature of Product?

A

Bulk, perishability, install/service requirements

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15
Q

Firm Objectives?

A

Profitability/market share

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16
Q

Factors to consider for Modes of Transport?

A
  1. Cost of alternatives
  2. Nature of the product
  3. Frequency of shipment
  4. Distance to location
  5. Value of shipment
  6. Availability of shipment
17
Q

Shipping terms?

A

The exporter, importer and logistics provider all have responsibilities to one another (outlined in the export contract)

18
Q

What are the risks that come with Payment Terms?

A
  1. credit risk
  2. foreign exchange risk
  3. transfer risk
  4. political risk
19
Q

Why does Dropshipping work?

A
  1. Internet is too big
  2. Language/Knowledge barriers
  3. Marketing! positioning, targeting, value-add
20
Q

What are the benefits of Dropshipping?

A
  1. Easy to start – low investment, experience
  2. No inventory management
  3. Control customer interface
  4. Easy to scale
21
Q

What is the Gray Market?

A

Legal export/import transactions involving the importation of genuine products into a country by intermediaries other than the authorised distributors

22
Q

What are the 3 forms of the Gray Market?

A
  1. Parallel importation
    Export of the product to one of the product’s existing export markets by a party other than the manufacturer
  2. Re-importation
    Importing the product back into the home market
  3. Lateral importation
    Moving the product from one international market to another
23
Q

What causes a Gray Market?

A
  1. Currency fluctuations
    difference in prices is produced by movements in currency
    allows the parallel importer to take an ‘arbitrage’ advantage
  2. Differences in market demand
    a product is in great demand in country A but not in country B. parallel importer brings (now discounted) product from country B to country A
  3. Segmentation strategy
    a product is priced differently in different countries to cater for different segments. Presents the parallel importer with an arbitrage opportunity
24
Q

Customer Perspective of Gray Market?

A

+ Cheaper
+ In stock (Availability)
+ Range

  • No warranty
  • No protection under local law
25
Q

Manufacturer Perspective of Gray Market?

A
  • Brand reputation risks
  • Loss of profits
  • Contract/License complications
  • Lose potential after sales service

+May possibly increase market share and brand awareness

MKTG3310 International Marketing (8 decks)

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