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Mktg Management > CH20: Tapping into Global Markets > Flashcards

CH20: Tapping into Global Markets Flashcards

1
Q

reasons to enter international markets

A
  • better profit opportunities
  • economies of scale
  • reduce dependence on a single market
  • counterattack global competitors
  • serve customers who require international service
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2
Q

headwinds faced when going international

A
  • new languages and laws
  • volatility of currencies
  • political and legal uncertainties
  • different customer needs and expectations
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3
Q

2 major types of risks associated with going abroad

A
  • general risks
  • specific risks (specific to that country)
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4
Q

the 5 stages of decisions in international marketing

A
  • whether to go abroad
  • which markets to enter
  • how to enter those markets
  • what marketing program to use
  • how to structure marketing organization
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5
Q

waterfall approach to international marketing

A

gradually entering countries in sequence; allows firms to carefully plan expansion and is less likely to strain resources

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6
Q

sprinkler approach to international marketing

A

entering many countries simultaneously; for use when first-mover advantage is crucial and there is a high degree of competitive intensity

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7
Q

the main drawbacks to the sprinkler method

A
  • substantial resources needed
  • difficult to plan entry strategies for multiple diverse markets
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8
Q

the 2 types of proximity

A
  • physical proximity
  • cultural proximity
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9
Q

considerations when marketing to emerging economies

A
  • smaller packaging and lower prices
  • vast majority of customers buy from very small local shops
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10
Q

the 5 modes of entry into foreign markets

A
  • indirect exporting
  • direct exporting
  • licensing
  • joint venture
  • direct investment
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11
Q

indirect exporting

A

the use of independent intermediaries to sell a company’s offerings in other countries

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12
Q

the types of indirect exporters

A
  • domestic-based export merchants
  • domestic-based export agents
  • cooperative organizations
  • export-management companies
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13
Q

domestic-based export merchants

A

buy the manufacturer’s products and sell them abroad

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14
Q

domestic-based export agents

A

include trading companies; seek and negotiate foreign purchases for a commission

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15
Q

cooperative organizations

A

conduct exporting activities for several producers, often of primary products like fruits and nuts; are partly under the administrative control of the producers

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16
Q

export-management companies

A

agree to manage a company’s export activities for a fee

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17
Q

the 2 advantages of indirect export

A
  • less investment (no need to develop export department, sales force, etc.)
  • less risk (intermediaries bring expertise, lowering chance of mistakes)
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18
Q

direct exporting

A

the sale of a company’s offering in other countries by the company itself

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19
Q

the main ways to perform direct exporting

A
  • domestic-based export department or division (may become an independent profit center)
  • overseas sales branch or subsidiary
  • home-country-based traveling export sales reps
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20
Q

licensing

A

granting permission to manufacture and sell a company’s offering in a specific market for a fee or royalty

21
Q

main advantages of licensing

A
  • licensor gains market entry at little risk
  • licensee gains production expertise and a well known product/brand
22
Q

main drawback of licensing

A

licensor has less control over the licensee than over its own facilities

23
Q

contract manufacturing

A

the firm hires local manufacturers to produce the product

24
Q

main advantage of contract manufacturing

A

offers a chance to start faster, with the opportunity to buy out the local manu later

25
Q

main drawback of contract manufacturing

A

less company control over the process; risk for loss of potential profits

26
Q

joint venture

A

a business enterprise engaged in by two or more otherwise separate entities; historically done by foreign investors who join with local investors

27
Q

reasons to enter a joint venture

A
  • foreign firm may lack resources to undertake the venture alone
  • foreign government may require joint ownership as a condition for market entry
28
Q

drawbacks of joint ventures

A
  • disagreements over investment, marketing, other policies
  • may prevent a multinational company from carrying out specific mfg or mktg policies on a worldwide basis
29
Q

direct investment

A

a foreign company buys part or full interest in a local company, or builds its own manufacturing or service facilities

30
Q

advantages of direct investment

A
  • cost economies
  • job creation
  • deeper relationships with host country
31
Q

main disadvantages of direct investment

A
  • opens company to economic risk like blocked/devalued currencies, worsening markets, or expropriation
  • company may be unable to adapt offerings to needs and preferences of local customers
32
Q

drawbacks of acquiring a local firm

A
  • cash investment
  • cultural mismatch
  • long-term commitment no matter what
33
Q

standardized marketing program

A

a strategy that uses the same strategic and tactical approach across different markets and countries

34
Q

localized marketing program

A

an approach that tailors its marketing activities to individual target markets

35
Q

advantages of standardized marketing program

A
  • economies of scale
  • lower marketing costs
  • brand image consistency
  • uniformity of marketing practices
  • leverage good ideas across markets
36
Q

what does a standardized marketing program not account for?

A
  • differences in wants, needs, usage patterns
  • customer response to mktg
  • competitive differences
  • legal, cultural, political contexts
37
Q

straight extension product strategy

A

introducing the product to a foreign market without any changes (common with high-end or luxury goods)

38
Q

product adaptation product strategy

A

positioning products differently in different markets due to differences in consumer behavior, as well as historical market factors
- changes should add more revenue than cost

39
Q

the 4 main types of localized product versioning

A
  • regional version
  • country version
  • city version
  • retailer version
40
Q

product invention product strategy

A

developing new products for global markets

41
Q

counterfeit products

A

sophisticated overseas factories reproduce fakes of products; gray/black market goods

42
Q

brand adaptation

A

changing certain elements of a brand to the specifics of each particular market

43
Q

country-of-origin effects

A

perceptions that are the mental associations and beliefs triggered by a country (e.g. Italians are stylish); marketers want to use positive country-of-origin perceptions to their advantage

44
Q

the 2 main international pricing strategies

A
  • uniform pricing
  • market-based pricing
45
Q

drawback of uniform pricing

A

price may be too low in richer countries, and too high in poorer countries

46
Q

the main considerations in adapting marketing comms for a market

A
  • the comms must be legally and culturally acceptable
  • the comms must be considered appropriate (e.g. comparative ads are unacceptable in some countries)
  • the appeals of the comms may need to be varied per market
47
Q

gray market

A

the diversification of branded products from authorized distribution channels; e.g. a distributor sells to a different country to take advantage of pricing differences; create a free rider problem

48
Q

the 2 main ways to deter gray market activities

A
  • severe penalties
  • timely detection of violations and meting out of punishments

Mktg Management (21 decks)

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