Chapter 12:

Question 1

What is the global marketing management trend today?

Answer 1

Trend towards localizations!

This is because the efficiency of customization is make possible by the internet

AND

The increase in flexible manufacturing processes

Question 2

What is the marketing perspective on market segmentation?

Answer 2

They say that customization is always best, one has to be flexible, tractable

But, the best companies avoid just using country borders, but more so carefully selecting segments

Question 3

Explain the trends and development in global marketing

Answer 3

We are moving away from “global” campaigns towards more localized ones.

Consumers are picker, money wise and nationalistic.

Question 4

What was Nestlé’s way? What was their strategy?

Answer 4

1. think and plan long ter
2. decentralize
3. Stick to what you know
4. Adapt to local taste

Question 5

What are the benefits of global marketing?

Answer 5

1. Knowledge helps scale production and marketing efforts for multinational businesses
2. Global diversity in marketing talent leads to new approaches across markets
3. Improved coordination and integration of marketing allows for transfer of knowledge across countries
4. Gives marketers access to toughest customers
5. Financial benefits from diversity of markets

Question 6

What is meant by “planning for global markets”?

Answer 6

Planning is a systematized way of relating to the future.

It is an attempt to manage the effects of external, uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end.

Question 7

Corporate planning

Answer 7

Long term, generalized goals for the enterprise as a whole

Question 8

Strategic planning

Answer 8

Conducted at the highest levels of managment

Short term and long term goals of products, capital, research

Question 9

Tactical planning

Answer 9

Conducted locally, addresses marketing and advertising

Actions and allocation of resources to implement the strategic planning goals in specific markets

Question 10

Company objectives and resources in planning for global markets

Answer 10

Important to define the objectives, without companies normally fail

Company must clarify orientation of domestic and international divisions

Foreign markets might not match, and the company has to redefine its objectives, alter scale or abandon the market

Question 11

International commitment in planning for global markets

Answer 11

Strong commitment is required for successful international operations. There needs to be enough determination to stay in the market long enough to make profit (could take some time)

Often hard with management, therefore they must invest enough finances and personnel for management

Question 12

What is the systematic international planning process:

Answer 12

1. preliminary analysis and screening
2. Defining market segments and adapting to the marketing mix accordingly
3. Developing the marketing plan
4. Implementing and controlling

Question 13

Explain phase 1 of the planning process:

Answer 13

1. preliminary analysis and screening

Evaluate potential of the foreign market, does it match the company?

Analyse environment in which company plans to operate

Question 14

Explain phase 2 of the planning process:

Answer 14

2. Defining market segments and adapting to the marketing mix accordingly

The potential markets must be identified and analyzed furthers

Analyze questions about adaptation:
- are there cultural/environmental adaptations that must occur?
- will adaptation costs allow profitable market entry?

Question 15

Explain phase 3 of the planning process:

Answer 15

Developing the market plan

Occurs when target market is specified, entry mode, budget, timeline, ect are made.

After, company may decide to not enter market

Question 16

Explain phase 4 of the planning process:

Answer 16

Implementation and control:

Planning process continues even after implementation’

Question 17

What are the four broad modes of foreign market entry?

Answer 17

Exporting

Contractual agreements

Strategic alliances

FDI

Question 18

Exporting accounts for ___ % of global economic activity

Answer 18

10

Question 19

What kinds of exporting are there?

Answer 19

Direct exporting
Indirect exporting
Internet
Direct sales

Question 20

Difference between direct and indirect exporting?

Answer 20

Direct: company sells to a customer in another country

Indirect: company sells to a buyer (importer) in the home country, who then exports the product

Question 21

Is exporting good for mature MNC?

Answer 21

Yes, if they have strong marketing and relational capabilities. Ex: Boeing

Question 22

The internet as exporting:

Answer 22

The Internet is becoming increasingly important as a foreign market entry method.

This was unexpected, at first it was only used for domestic sales.

The rise of the internet led to massive markets, multilingual sites and dedicates sites for foreign markets

Question 23

Direct sales as exporting

Answer 23

Used by high-tech and industrial products, may involve establishing office in foreign country

Question 24

Contractual agreements as market entry strategy

Answer 24

Contractual agreements are long-term associations between a company and another in a foreign market.

Contractual agreements generally involve the transfer of technology, processes, trademarks, and/or human skills

Two main categories:
- Licensing
- Franchising

Question 25

What is licensing?

Answer 25

Patent rights, trademark rights, and the rights to use technological processes are granted in foreign licensing.

It establishes a foothold in a foreign market, low risk

Used by small and medium-sized companies

Question 26

What is franchising?

Answer 26

The franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management.

Ex: fast-food chains

Fosters local ownership and employment

Question 27

Strategic international alliances (SIA’s) as market entry strategy

Answer 27

Relationship established by two or more companies where they cooperate on mutual need, and share risks.

Ex: Star Alliance

Question 28

Why do firms enter into SIA’s?

Answer 28

Rapid expansion into new markets

Access to new tech

More effective production and innovation

Reduced marketing costs

Access to additional products and capital

Question 29

Joint ventures as market entry strategy

Answer 29

It is when two or more companies create a separate legal entity, with shared management

Equity positions held by both partners

Question 30

What is a consortia?

Answer 30

Similar to joint venture, but difference is that they typically involve a large number of participants AND they frequently operate in a country or market in which none of the participants are active

It helps lessen risks of JV, and are developed to pool financial and managerial resources

Question 31

FDI as market entry strategy

Answer 31

Companies may invest locally to capitalize on low cost labor,

to avoid high import taxes,

to reduce the high costs of transportation to market,

to gain access to raw materials and technology

to gain market entry.

Question 32

Organizing for global competition

Answer 32

There is no clear organizational structure that successfully integrated both domestic and foreign market needs perfectly, there are so many variables.

There are usually 3 structure are
1. Global product division
2. Geographical divisions
3. A matrix organization

Question 33

Locus of Decision

Answer 33

Where decisions will be made, by whom, and by which method constitute a major element of organizational strategy

Management needs to be clear on the international, regional and local levels

Question 34

Centralized organizations

Answer 34

They are experts in one location

High degree of control on planning and implementation phase

Question 35

Decentralized organization

Answer 35

delegate responsibility to regional managers

direct day-to-day contact with the market

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