Chapter 2 Flashcards
What are the strategic approaches in competitive pricing?
-Short-term sales success (temporary price reduction)
-Profit maximization (price choice that gives max. profit/
ROI in line with competitive prices.
-Market share expansion (low price strategy compared to
competition)
-Quality leadership establishment (high price strategy
compared to competition
How can the budgeting of marketing communication measures be determined?
-All you can afford method (on basis of available
resources
-Percentage of sales method
-Competitive parity method (comparison with
competition
-Objective & task method
What is cost-based pricing?
Analysis between relationship of fixed (independent of units produced) and variable costs (dependent of units produced)
Approach 1: Market penetration through high production
volume, then ROI calculation to determine break-even
point.
Approach 2: Price premium to existing cost factors to reflect profit target.
What are communication goals in international marketing communication?
-Awareness
-Knowledge (brand/product)
-Sympathy (positive feelings, moods, opinions)
-Preference
-Conviction (product best in the market)
-Purchase (creating conditions for purchase e.g. special
offers)
How does internet- based marketing communication measure success?
-Click rates
-Page views
-Feed back
What are steps to establish efficient communication?
-identify target group
-define goals
-design content
-select media
-measure success
What is the goal of international marketing?
-send clear, consistent & compelling message about company, performance & brand in effective & efficient way
prerequisite:
-company knows all points of customer contact
-provides relevant, reliable, up-to-date, targeted
information via channels
What are the tasks of internationally integrated marketing communication?
-coordination & integration of messages about companies & products across all channels
-coordination of instruments of communication mix (content & formal design)
What are the advantages of homogenous worldwide standardization?
-simplification of production & logistical processes of supply chain management
-avoidance of multiple warehouses & different distribution channels
-standardized global pricing structures
-no risk of softening of global brand policy
What are the 2 different strategic approaches implying different product policy requirements during product launch?
-Market skimming strategy: aim- achieve max. price and profit to implement price reductions depending on market dynamics.
prerequisite: high quality unique product
risk: initial lower production volumes (production related cost will offset increased volume)
-Market penetration strategy: lowest prices is set at market launch -> rapid market penetration & exclude competitions.
prerequisite: highly price-sensitive market to increase volume (through low prices) & lower production costs
What does pricing policy deal with?
-decisions that serve to shape the price performance ratio in a target-oriented manner
the initial fixing & subsequent modification of prices
- price differentiation
-design of payment conditions (rebates, discounts,
bonuses, payment terms)
-financing (loans/leasing)
What are the different scenarios in brand policy?
Scenario 1: Brand standardized worldwide & deliberately not adopted due to local factors
Scenario 2: Brand is supplemented by national product brands according to local conditions (e.g. claims translated in local language)
Scenario 3: Co-branding between global umbrella brand & local brand adoption results in a local private label.
Scenario 4: Brand is replaced with strong national brand (acquisition)
What are the 3 factors that play a role in pricing?
- perceived value by customer (price cap); if price is high
= no demand - cost of product (lower price limit): losses made if price is
below lower price limit - other internal & external factors: competitive situation
(excess supply/ demand), marketing strategy position in
life cycle, stage of market maturity, regulations
What is supplier market?
Market in which a narrowly limited number of manufacturers face a large number of distributors & sales agents
What are the factors that may make adaptation of product undesirable from marketing pov?
-different national regulations & legal provisions
(prohibition of certain ingredients, freedom of
advertising)
-OTC sales or restrictive distribution
- insights from market research (preferences &
expectations) are different in another country
-customs, practices, values are different (alcohol ban in
UAE, left hand drive)
-language barriers & need for adaptation of product
names, description etc.
-different power relations between manufacturer/ dealer
(dealers with strong buyer power will push for product
adaptation)
-varying ability of distribution channels
Problem areas/challenges of international market research?
- less willingness of potential buyers to answer market
research questions - lack of access to current & verifiable secondary data
- language barriers & translation problems, increasing
error rates & potential additional costs
-field research is time & cost consuming
-difficulty in forming representative samples for survey
What are the different survey designs available to market researchers for data collection?
-cross sectional surveys: look at market condition in a
defined time frame
-longitudinal surveys: look into changes in market over
continuous period of time
-experiments (field research)
What are the processes of international market research?
-definition of information needs for a specific action
-development of research design for data collection
-management & implementation for data collection
analysis & preparation of results
-deduction of recommendations for action on basis of
knowledge gained
What are the 2 primary methods to generate knowledge & data for market research?
- primary source: info developed through personal
research (field research) (e.g. interview with target
group, visit to congresses)
-secondary source: indirect source of info that can be
researched & evaluated in literature, databases or on
internet
What are the 3 different types of research/objective in market research?
- exploratory research: gather basic info about market.
aim: derive hypothesis which can be verified or falsified\
-descriptive research: has high degree of preliminary info
aim: description & clarification of quantitative &
qualitative details
-casual research: applied retrospectively to explain
observations & test hypothesis
What are the 6 cultural dimensions of Hofstede?
-power distance
-individualism vs collectivism
-masculinity vs femininity
-uncertain vs avoidance
-long term vs short term orientation
-indulgence vs restraint
What are individualism & collectivism?
describes relationship between individuals & social groups, the resulting self-image & demands for self-realization
What are collectivist culture?
influence of social group (family) predominates
What are individualistic cultures?
-desire for self- determination & self-realization goals prevail
