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International Marketing > Chapters 7,8,9 > Flashcards

Chapters 7,8,9 Flashcards

1
Q

What is the definition of global market segmentation?

A

The process of dividing the world market into distinct subsets of customers that behave in the same way or have similar needs.

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2
Q

What are the 6 segmentation criteria that can be used?

A

Geography, demographics, pyschographics, behavior, benefit, and ethnicity

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3
Q

What are the pros and cons of the geographic segmentation?

A

Pro: Proximity
Con: countries differences may overwhelm their similarities

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4
Q

What are the measurable characteristics of populations in the demographic segmentation?

A

Income, population, age, gender, education, and occupation

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5
Q

What is necessary to determine for income?

A

The purchasing power of the local currency

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6
Q

What demographic segmentation’s variable involves low per-unit costs and economy of scale?

A

Population

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7
Q

Which segmentation is based on attitudes, values, and lifestyles?

A

Psychographics

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8
Q

What does the VALS framework consist of?

A

Innovators at the top with high innovation and resources, survivors at the bottom with low innovation and resources

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9
Q

What are the 4 euroconsumer segments from idealists to survivors?

A

Successful idealists, Affluent materialists, comfortable belongers, disaffected survivors

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10
Q

What are the 5 segments of Porsche buyers?

A

Top Guns, Elitists, Proud Patrons, Bon Vivants, Fantastics

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11
Q

What are the 3 focuses of behavior segmentation?

A

Whether people buy and use (User status: potential users, nonusers, ex-users), How often used (user occasions: regulars, first-timers), How much use (usage rates: heavy, medium, light)

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12
Q

Which segmentation focuses on the value equation?

A

Benefit Segmentation

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13
Q

What is the value equation?

A

Value= Benefits/Price

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14
Q

What is the process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond?

A

Targeting

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15
Q

What are the 3 criteria in assessing marketing potential?

A

1) Size and Growth, 2) competition, 3) feasibility and compatibility

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16
Q

What questions should you ask in evaluating the current size and potential growth?

A

Is the country large enough to make profit? Does it have high potential growth so in the long run the company can make profit.

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17
Q

What questions should a company ask in terms of feasibility and compatibility?

A

Does the company have the resources? Is the company able to sell to the country (luxury car in a poor market)

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18
Q

What are the two framework options in selecting target markets?

A

Top-Down Approach (country-market level)

Bottom-up Approach (Product-market level)

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19
Q

What is the top-down approach?

A

Market potential= market size*competitive advantage

Take the product and multiply by terms of access=market potential

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20
Q

What are some key drivers and enabling conditions in the bottom-up approach?

A

Drivers: brand sensitivity, intensive distribution, qualified salesperson
Enabling Conditions: structural characteristics of the market (refrigerators not in India so can’t sell dairy)

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21
Q

What are the three global target market strategies?

A

Standardized (mass), concentrated(niche), and differentiated(multiple)

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22
Q

What is the act of differentiating a brand in consumers’ minds in relation to competitors?

A

Positioning

23
Q

What are the 5 positioning strategies?

A

1) Attribute or benefit, 2)Quality and price, 3)use or user, 4)competition, 5) Global/foreign/local consumer culture

24
Q

What is the difference between high-tech and high-touch products?

A

High-tech products are evaluated on performance (cars phones)
High-touch products are evaluated on feeling

25
Q

What do you want to encourage and discourage between imports and exports?

A

Encourage Exports and discourage imports

26
Q

What are characteristics of export selling?

A

Only Place is the subject, price promotion and product are same, Unique products for companies with little international experience

27
Q

What is the organizational export activities?

A

Unwilling to export, export seller, explore feasibility of exporting, trial, experienced exporter, country-focused marketing, global marketing strategy for exporting

28
Q

What are some national policies that support exports?

A

Tax incentives, subsidies, governmental assistance (trade shows, help in finding market), Free trade zones

29
Q

What are some national policies governing import restrictions?

A

Tariffs, Quotas, discriminatory procurement policies, restrictive customs procedures, discriminatory exchange rate policies, restrictive administration and technical regulations (anti-dumping, product size, safety and health)

30
Q

What does the discriminatory procurement policy do?

A

Makes every US company buy from another US company

31
Q

What is the purpose of restrictive customs procedures?

A

If it becomes to difficult to comply, people will give up (customs clearance)

32
Q

What is the difference between Schedule B and Harmonized Tariff System?

A

Schedule B is for USA to export, Harmonized is a uniform 6 digits around the world to export

33
Q

What are the 3R’s in tariffs?

A

Rule+rate+regulations

34
Q

What are the ways to calculate tariffs?

A

Custom value: transaction value (CIF), customs duties+taxes (VAT)+Others

35
Q

What is included in the transaction value (CIF)?

A

cost of product, insurance, and freight

36
Q

What are countervailing duties?

A

Offset subsidies by governments

37
Q

What are Ad valorem duties?

A

% of transaction value

38
Q

What is the difference between in-house and external export service providers?

A

External export service providers have agents (charge on commission) and merchants (own it; take and sell product)

39
Q

What is the different between direct market representative and independent intermediaries?

A

Direct market reps control and communicate (you hire them)

Ind. Intermediaries work for their own interest and have low sales volumes

40
Q

What are the 5 methods of payment when exporting?

A

Consignment, open account, documentary collections (Drafts), documentary credits, cash in advance

41
Q

When does a consignment contract pay?

A

after goods are actually sold

42
Q

When does an open account contract pay?

A

after goods are delivered

43
Q

What is the initial export order form called?

A

Proforma invoice

44
Q

What questions should a company ask themselves when deciding to source?

A

Should they make or buy, and where if sourcing?

45
Q

What are the 7 factors that affect sourcing decisions?

A

Management vision, factor costs and conditions, customer needs, logistics, country infrastructure, political risk, foreign exchange rates

46
Q

What are the 3 modes of entry and what increases as you move to full ownership?

A

Export based, contract-based, equity-based; commitment/control/risk increase

47
Q

What are the pros and cons of using export-based?

A

Pros: Lowest risk, easy market entry or exit
Cons: Tariffs and quotas, high transportation costs

48
Q

Deciding which mode of entry strategy to use depends on?

A

Vision

49
Q

What are the 3 contract-based options?

A

Licensing, franchising, and contract manufacturing

50
Q

What are the pros and cons of Licensing?

A

Pros: Fast market access, bypass regulations and tariffs
Cons: Less control over market and revenues, create potential competitors

51
Q

What are the 3 equity based options?

A

Joint ventures, minority or majority equity stakes, and full ownership by: acquisition, merger, or start-up

52
Q

What is the entry strategy for a single target country in which the partners share ownership of a newly created business entity?

A

Joint Venture

53
Q

What are the pros and cons to a joint venture?

A

Pros: Gain Knowledge of local markets from partners, shared risks, synergy from combing strengths of partners
Cons: Cost associated w/ control and coordination between partners, potential for conflicts between partners, and partner can evolve into a competitor

54
Q

What are the 4 market expansion strategies?

A

Narrow focus, country focus, country diversification, and global diversification

International Marketing (3 decks)

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