Chapter 15 Marketing Export Flashcards
What moves products from their market entry points to final consumers?
Channels within nations
What moves company products from points of production to the border of countries within which they are sold?
Channels between nations
What must a company do to compete well internationally?
The company must effectively design and manage an entire global value delivery network
What considers the entire global supply chain and marketing channel?
Whole-channel view
How do companies mitigate price escalation from foreign pricing?
Companies can make simpler or smaller versions of their products at a lower price
What causes companies’ foreign prices to be higher than their domestic prices for comparable products?
Companies going through price escalation due to the cost of transportation, tariffs, margins
Through what method fully adapts advertising messages to local markets?
Communication adaption
What is a strategy companies do to avoid taboo in other countries?
Avoid taboos
What strategies are companies limited to in promotion?
Adopt the same communication strategy in home markets or change it for each local market
What consists of creating something new for a specific country market?
Product invention
Changing the product to meet local conditions or wants is?
Product adaption
How would you market a product in a foreign market without any change?
Straight product extension
What are the three main strategies used for adapting product and marketing communication strategies to a global market?
Product extension, production adaption, product invention
What is the fourth reason firms prefer direct investment approach?
The firm keeps full control over the investment
What is the third reason firms prefer direct investment as an approach?
Development of a deeper relationship with government, customers, local suppliers, and distributors
What is the second reason firms prefer the direct investment approach?
The firm may improve its image in the host country
What is the first reason some firms may rely on Direct Investment?
Lower costs in the form of cheaper labor or raw materials, foreign government investment incentives, and freight savings
What are the disadvantages of joint ownership?
Partners may disagree over policies, whereas US firms emphasize the role of marketing, local investors may rely on selling
What are the advantages of joint ownership?
A company can join forces with foreign investors to create a local business that shares joint ownership and control
What makes the conditions not necessary for management contracting?
If the company can put its management talent to better uses or if it can make greater profits by undertaking the whole venture
What is the benefit of management contracting?
It’s a low risk method of getting into a foreign market, and it yields income from the beginning
What are the benefits of contract manufacturing?
The chance to start faster, with less risk, and the opportunity to either form a partnership with or to buy out the local manufacturer
What are the disadvantages of contract manufacturing?
Decreased control and loss of potential profits over the manufacturing process
What is contract manufacturing?
When the company contracts with manufacturers in the foreign market to produce its product or provide its service
What is the profitability in licensing?
The licensee buys the right to use the company’s manufacturing process, trademark, patent, trade secret, for a fee or royalty
What are the advantages of licensing?
It’s a simple way for a manufacturer to enter international marketing
What are the advantages of direct exporting?
Higher potential return
What is direct exporting?
Where the company handles its own exports
What are the advantages of indirect exporting?
Involves less investment and less risk
What is indirect exporting?
Working through independent international marketing intermediaries
What are advantages to exporting?
It is the simplest way to enter a foreign market
Global markets should be ranked on several factors.
Market size, market growth, cost of doing business, competitive advantage
What is the fifth step a company should do before going abroad?
Evaluate each selected country
What is the fourth step a company should do before going abroad?
Decide on the types of countries to enter
What is the third step a company should do before going abroad?
Decide how many countries it wants to market
What is the second step a company should do before going abroad?
Decide what volume of foreign sales it wants
What is the first step a company should do before going abroad?
Define its international marketing objectives and policies
What is a nontariff trade barrier?
Biases against certain kinds of bids for business contracts, restrictive product standards, and excessive or selective host-country regulations or enforcement
What is a currency restriction?
A country may insist that sellers take payment in its own or a less widely accepted world currency
What is the United States-Mexico-Canada Agreement (USMCA)?
Replaced the North American Free Trade Agreement
What are free trade zones/economic communities?
Groups of nations organized to work toward common goals in regulation of international trade
What are nontariff trade barriers?
Biases against U.S. company bids, restrictive product standards, or excessive regulations
What is an exchange control?
Limits on the amount of foreign exchange and the exchange rate against other currencies
Why would a country impose a quota?
To limit imports that it will accept in certain product categories
Why are tariffs imposed on certain imported products?
To tax them to raise revenue or to protect domestic firms
What are the three technological advances energized by global marketing?
Electronic networks, smart devices, digital commerce platforms
How do societies that are high indulgence act?
Are open to individuals seeking goods, services and experiences that go beyond needs
How do societies that are low indulgence act?
Have rigid norms that govern behavior, emphasize the fulfillment of basic needs, dislike flashy consumption
How do short term orientation societies value the past and future?
Society isn’t ready for future changes and refuses to break from the past
How do long term orientation societies value the past and future?
Societies are ready for future change, even when it requires them to break from the past
How do societies who are low on the Uncertainty Avoidance Index fare?
Society is comfortable with uncertainty
How do societies that are high on the Uncertainty Avoidance Index operate?
They dislike uncertainty, work in line with well-established belief and value system and try to control the future to reduce uncertainty
What are core values for tender societies?
Cooperation, modesty, empathy for less fortunate or weak society members, quality of life
What are core values for tougher societies?
Achievement, heroism, assertiveness, and material rewards
How does individualism compare to collectivism?
Individualism is focused on themselves and family members, collectivism is focused on strong social networks
What is beneficial to highly collectivistic society?
People are embedded in strong social networks and expect that the large social group will take care of their needs
What is most important in individualistic societies?
People are more focused on the needs and well-being of themselves and their immediate family members
How is Power Distance Index measured?
It deals with the extent to which less powerful members of society are comfortable with an unequal distribution of power across its members
What does a developing economy experience?
Rapid economic growth and industrialization
What actions and identity do developing economies play in improving both businesses and consumer goods and services?
Large middle classes and their varied manufacturing activities
What are examples of developed economies?
United States, Japan, South Korea
What role in action do Subsistence economies play?
They consume most of their output and barter the rest for simple goods and services. They offer few market opportunities.
What does a company’s industrial structure define as a whole?
Products and service needs, income levels, and employment levels
What are the two economic factors that reflect the country’s attractiveness as a market?
Industrial structure and Income distribution
What can a company do if there are serious political concerns?
It may decide to enter in a way that its commitment can be reversed quickly and efficiently
What must a company do before committing to entering a country?
It must evaluate both the nature and the certainty of the political climate
What does PESTLE stand for?
Political, Economic, Sociocultural, Technological, Legal/Institutional, Environmental/Ecological
How does PESTLE aid global companies?
The framework analyzes the forces that impact marketing decisions in various global environments
What are the benefits of being a global company?
It minimizes the importance of national boundaries and develops global brands through seeing the world as one market
How do firms make direct investments?
By developing assembly or manufacturing facilities
What are the means into joint venture?
Licensing, contract manufacturing, management contracting, and joint ownership
What are two forms of exporting?
Indirect and direct
What are the top two factors that draw a company into international areas?
Global competitors might offer products or lower prices, The company might discover foreign markets that present higher profit opportunities than the domestic market does
What are the three models on how to go global?
Exporting, joint venture, direct investment
How does global marketing work?
The process of marketing products and services within and across multiple countries.
