Chapter 21: Tapping Into Global Markets Flashcards
Deciding whether to go. Deciding which markets to enter. Deciding how to enter. Deciding on the marketing program. Deciding on the marketing organization.
Major Decisions in International Marketing
Better profit opportunities.
Larger customer base to achieve economies of scale.
Less dependence on any one market.
Desire to counterattack global competitors in their home markets.
Customers require international service.
Reasons for Pursuing Global Markets
Lack of knowledge of foreign culture.
Lack of understanding of foreign needs.
Lack of understanding of foreign regulations.
Lack of managers with international expertise.
Changes in the country environment.
Risks to Going Abroad
Stage 1: No regular export activities.
Stage 2: Export via independent agents.
Stage 3: Establish sales subsidiaries.
Stage 4: Establish production facilities abroad.
Stages of Internationalization
Entry into global market strategies.
Waterfall Approach
Sprinkler Approach
Born Global
Gradually entering countries in sequence.
Waterfall Approach
Entering may countries simultaneously.
Sprinkler Approach
Modes of entry into foreign markets.
Indirect Exporting Direct Exporting Licensing Joint Ventures Direct investment
Economies of scale. Lower marketing costs. Power and scope. Consistency in brand image. Ability to leverage. Uniformity of marketing practices.
Advantages of Global Marketing
Differences in consumer needs, wants, usage patterns.
Differences in consumer response to marketing mix.
Differences in brand development process.
Differences in environment.
Disadvantages of Global Marketing
Cultural dimensions that differentiate countries.
Individualism vs. Collectivism
Masculine vs. Feminine
High vs. Low Power Distance
Weak vs. Strong Uncertainty Avoidance
The self-worth of an individual is rooted more in the social system than in individual achievement.
Japan: Low
US: High
Collectivist Societies
Cultures tend to be less egalitarian.
Russia: High
Nordic: Low
High Power Distance
Measures how much the culture is dominated by assertive males versus nurturing females.
Japan: Highly masculine
Nordic Countries: low
Masculine vs. Feminine
Indicates how risk-aversive people are.
Greece: High
Jamaica: Low
Weak vs. Strong Uncertainty Avoidance
Product Features Labeling Colors Materials Sales Promotion Advertising Media Brand Name Packaging Advertising Execution Prices Advertising Themes
Adapted Aspects for International Marketing
Understand similarities and differences in the global branding landscape.
Do not take shortcuts in brand building.
Establish a marketing infrastructure.
Embrace integrated marketing communications.
Establish brand partnerships.
Balance standardization and customization.
Balance global and local control.
Establish operable guidelines.
Implement a global brand-equity measurement system.
Leverage brand elements.
Commandments of Global Branding
Communication and adaption strategies.
Straight Extension Product Adaption Communication Adaption Dual Adaption Product Invention
Introduces the product in the foreign market without any changes.
Straight Extension
Alters the product to meet local conditions or preferences.
Product Adaption
Produce a regional version of the product.
Produce a country version.
Produce a city version.
Produce different retailer versions.
Levels of Production Adaption
Company’s choices for setting prices in different countries.
Uniform Price Everywhere
Market-Based Price in Each Country
Cost-Based Price in Each Country
Consists of branded products diverted from normal or authorized distributions channels in the country of product origin or cross international borders; dealers in lower priced counties sell products in higher priced countries.
Gray Market
How companies manage their international marketing activities.
Export Departments
International Divisions
Global Organization
Firm that operates in more than one country and captures R&D, production, logistical, and financial advantages in its costs and reputation that are not available to purely domestic competitors.
Global Firm
