Ch 12 Global Marketing Management: Planning and Organization Flashcards
What are the characteristics of Global Companies?
Market: the world
Look for: similarities (needs)
Mkt strategy: Standardization
Satisfactory goal: lowest common denominator
Satisfactory level: low
Pricing: low
Costs: low (Econ. of scale)
Image: Global
Advantages: integration of operations (optimization of the value chain)
What are the characteristics of international companies?
Market: individual country
Look for: differences (needs)
Mkt strategy: adaptation
satisfactory goal: all needs/ wants
Satisfactory level: high
Pricing: high
Costs: High (mfg/inv/mkt)
Image: local
Advantages: Customization
What are the benefits of a Global orientation?
Economies of scale in production + marketing
transfer of experience and know-how across countries
Uniform global image
Control and coordination of operations
What is direct exporting?
Company sells to a customer in another country
What is indirect exporting?
Company sells to a buyer ( importer or distribution) in the home country, who in turn exports the product
What is licensing?
It is a form of contract
What is the difference between a licensor and a licensee?
Licensor has something of value that the licensee wants to BORROW.
Licensor gives permission to use something of value. Licensee asks for permission.
What are some of the types of assets that can be licensed?
patent trade secret or company name
2 advantages of licensing to the licensor?
little initial investment required
attractive return for the life of the contract
2 DISadvantages of licensors
limited form of participating in foreign market
licensees can turn into competitors in time
What is the difference between a license and a franchise?
License: only makes one thing available not the whole package
Franchise: FORM of licensing were the franchisor provides a PACKAGE of products, systems, and management services, market support, and the franchisee provides market knowledge, capital, and personal involvement in management
What is a joint venture?
Partnership of two or more participating companies that have joined forces to create a SEPARATE LEGAL ENTITY
What are advantages of joint ventures
Shared risk
combined strengths of partners
open doors to counties that favor local companies or prohibit foreign control
avoid tariff and quota barriers
What are disadvantages of of joint ventures
difference in culture and management philosophies can lead to disagreements among partners and to divorce
control and coordination of the center can be very costly for the foreign partner
local parties can evolve into strong competitiors
What are consortia?
Similar to joint venture EXCEPT:
1. Typically involve a large number of participants
2. Frequently operate in a country or market in which none of the participants is currently active
Developed to pool financial + managerial resources and lessen risks
