chapter 18

Question 1

global industry

Answer 1

competitors’ strategic positions in major geographic or national markets are affected by their overall global positions.

Question 2

global firm

Answer 2

operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages not available to purely domestic competitors.

Question 3

factors that draw companies to the international arena

Answer 3

1. international markets can present better profit opportunities
2. a firm may need a larger customer base to achieve economies of scale
3. wants to reduce its dependence on one market

Question 4

typical entry strategies

Answer 4

1. the waterfall approach
2. the sprinkler approach

Question 5

the waterfall approach

Answer 5

gradually entering countries in sequence.

Question 6

the sprinkler approach

Answer 6

entering many countries simultaneously.

Question 7

born global

Answer 7

firms that market to the entire world from the start. increasing amount of especially technology intensive firms or online ventures do this.

Question 8

risks of going abroad

Answer 8

1. the company might not understand foreign preferences and could fail to offer a competitively attractive product
2. the company might not understand the foreign country’s business culture or how to deal effectively with foreign regulations.
3. the company might lack managers with international experience
4. the other country might change its commercial laws, devalue its currency, or undergo a political revolution and expropriate foreign property.

Question 9

cultural distance

Answer 9

companies often choose neighbouring countries because they understand them better and can control costs more effectively. however, it may lead to overlooking potentially better markets and only superficially analysing differences that could put them at a disadvantage.

Question 10

regional economic integration

Answer 10

the creation of trading agreements between blocs of countries. this has intensified in recent years and means that companies are more likely to enter entire regions at the same time.

Question 11

broad choices in entering a market

Answer 11

1. indirect and direct export
2. licensing
3. joint ventures
4. direct investments

Question 12

indirect and direct export

Answer 12

companies often start in indirect export, work through independent intermediaries, and may move into direct export later. this order of entry requires less investment and risk.

Question 13

licensing

Answer 13

the licensor issues a license to a foreign company to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty. the licensor gains entry at little risk; the licensee gains production expertise or a well-known product name.

Question 14

joint ventures

Answer 14

foreign investors may join local investors in a joint venture company in which they share ownership and control, sometimes desirable for political or economic reasons.

Question 15

direct investment

Answer 15

the foreign company can buy part or full interest in a local company or build its own manufacturing or service facilities.

Question 16

standardised marketing program

Answer 16

using the same marketing program worldwide. this promises the lowest costs. standardised and adapted marketing programs form the two extremes.

Question 17

adapted marketing program

Answer 17

the company, consistent with the marketing concept, believes consumer needs vary and tailor marketing to each target group.

Question 18

standardised marketing program advantages

Answer 18

1. economies of scale in production and distribution
2. lower marketing costs
3. power and scope
4. consistency in brand image
5. ability to leverage good ideas quickly and efficiently
6. uniformity of marketing practices

Question 19

standardised marketing program disadvantages

Answer 19

ignores differences in…
1. consumer needs, wants, and usage patterns
2. consumer response to marketing programs and activities
3. brand and product development and the competitive environment
4. legal environment
5. marketing institutions
6. administrative procedures

Question 20

straight extension

Answer 20

introduces the product in foreign market without any change, a successful strategy for eg. consumer electronics.

Question 21

product adaptation

Answer 21

alters the product to meet local conditions or preferences, developing a regional version of its product, a country version, a city version, or different retailer versions.

Question 22

product invention

Answer 22

creates something new. it has two forms:
1. backward invention: reintroducing earlier product forms well adapted to a foreign country’s needs
2. forward invention: creating a new product to meet a need in another country

Question 23

communication adaptation

Answer 23

the process of changing marketing communications for each local market.

Question 24

dual adaptation

Answer 24

both adapting the product and the communications.

Question 25

price escalation

Answer 25

raising the price to cover the added cost of transportation, tariffs, middleman margins, and the risk of currency fluctuations so it can earn the same profit.

Question 26

gray market

Answer 26

diverts branded products from authorised distribution channels either in-country or across international borders. dealers in the low-price country buy and ship the goods to another country to take advantage of price differences.

Question 27

internal marketing

Answer 27

requires that everyone in the organisation accepts the concept and goals of marketing and engages in identifying and communicating customer value. all employees need to realise their job is to create, serve, and satisfy customers, because due to the networked enterprise, every functional area in the firm can interact with customers. so, only when this is the case, the firm is an effective marketer.

Question 28

country-of-origin perceptions

Answer 28

the mental associations and beliefs triggered by a country.

Question 29

breaking bulk

Answer 29

the process of dividing a large shipment of goods into smaller units or lots for distribution or further transportation. remains an important function of intermediaries and helps perpetuate long channels of distribution, a major obstacle to the expansion of large-scale retailing in developing countries.

Question 30

organisation of modern marketing departments

Answer 30

1. functional organisation
2. geographic organisation
3. product- or brand-management organisation
4. market-management organisation
5. matrix-management organisation

Question 31

functional organisation

Answer 31

functional specialists report to a marketing vice president who coordinates the activities.

Question 32

geographic organisation

Answer 32

a company selling in a national market often organises its sales force along geographic lines. the national sales manager may supervise sales managers, who supervise district sales managers, who supervise salespeople.

Question 33

product- or brand-management organisation

Answer 33

companies producing a variety of products and brands often establish a product-management organisation. this does not replace functional organisations but serves as another layer of management. other alternatives are product teams, assigning two or more minor products to one manager, and category management.

Question 34

category management

Answer 34

focusing on product categories to build the firm’s brands.

Question 35

market-management organisation

Answer 35

when customers fall into different groups, a market management organisation is desirable. 1. market-centred organisation 2. customer-management organisation

Question 36

market-centred organisation

Answer 36

when a company reorganises along market lines.

Question 37

customer-management organisation

Answer 37

deals with individual customers rather than the mass market or even market segments.

Question 38

matrix-management organisation

Answer 38

companies that produce many products for many markets may adopt a matrix-management organisation employing both product and market managers. however, this is costly and can create conflict about authority and responsibility.

Question 39

true market-driven company requirements

Answer 39

under the marketing concept, all departments need to “think customer” and work together to satisfy customer needs and expectations.
1. developing a company-wide passion for customers
2. organising around customer segments instead of products
3. understanding customers through qualitative and quantitative research

Question 40

three-pronged attack for raising the level of socially responsible marketing

Answer 40

1. legal behaviour
2. ethical behaviour
3. socially responsible behaviour

Question 41

legal behaviour

Answer 41

organisations must ensure that every employee knows and observes relevant laws.

Question 42

sustainability

Answer 42

the ability to meet humanity’s need without harming future generations. major corporations outline in great detail how they are trying to improve the long-term impact of their actions on communities and environment.

Question 43

cause-related marketing

Answer 43

links the firm’s contributions toward a designated cause to customers’ engaging directly or indirectly in revenue-producing transactions with the firm. cause marketing is part of corporate societal marketing (CSM). it can:
1. build brand awareness
2. enhance brand image
3. establish brand equity
4. evoke brand feelings
5. create a sense of brand community
6. elicit brand engagement

Question 44

social marketing

Answer 44

furthers a cause such as “say no to drugs”. planning process:
1. where are we?
2. where do we want to go?
3. how will we get there?
4. how will we stay on course?