COMM211 Quiz 1 Flashcards
Marketing mix decisions (2)
- Adaptation
- Standardization
Standardization
Same marking mix
Adaptation
Adjustment of marketing program to each market
Ways products can be sold (3)
- Same form as the home market
- With some adaptation
- As a totally new product
Global marketing Pros (4)
- Economies of scale in production and distribution
- Lower marketing costs
- Consistency in brand image
- Uniformity of marketing practices
Global Marking Cons (3)
- Diff. in consumer needs
- Diff. in consumer response to marketing mix elements
- Diff. in brand and product development and the competitive environment
Product extension (standardization) (2)
- Cost saving (no additional R&D expense)
- When consumers share the same desires/needs
Product adaptation
- Alter product to appeal local culture
Levels of adaptation (3)
- Regional version
- Country version
- City version
Product extension - Communication adaptation (3)
- Same product, different communication
- Different functions outside the home-country market (ex: bicycle and motor scooter)
- Different positioning for the product (ex: Perrier)
Product invention (2)
- Backward invention (reintroducing earlier products to well-adapted country)
- Forward invention (creating new product for country’s needs)
Communication (5)
- Interpretation of message (language, name colors)
- Same theme but adapt the copy to each local country
- Use of media (availability varies)
- Change in sales-promotions
- Change in personal selling tactics
Price (3)
- Price escalation problem
- Can be charged with dumping
- Gray market problem
Timing of entry (2)
- Waterfall model
- Sprinkler strategy
Waterfall model (3)
- Introduce product in home market
- Innovation launched in other advanced markets
- Market product in less advanced countries
Sprinkler strategy (2)
- Worldwide entry within 1-2 years
- Major factors: Prominence of universal segment and concern of competition in foreign markets
When is the waterfall model better than the sprinkler strategy? (2)
- Lifecycle of product in relatively long
- Weak competitive climate in foreign market
Coca-Cola trick to global expansion (3)
- Advertising
- Sponsorship
- Direct Sales
McDonald trick to global expansion (3)
- Local adaptation
- Competition “user”
- Attraction power from leader
4Ps decisions (4)
- Price
- Product
- Place
- Promotion
Marketing mix influences (5)
- Demographic
- Economic
- Technological
- Political
- Cultural
Demographic environment (2)
- Different advertising strategy for each target market
- Major interest to marketers
Economic environment
Affects buying power and spending patters (change in income, cost of living, interest rate, inflation…)
Technological environment (2)
- Create new markets and opportunities
- Need to keep up with technological change
Political environment (2)
- Legislation Regulating Business (encourage competition and ensure fair market goods/services
- Increased legislation (laws for competition, fair trade, environmental protection
Reason for business legislation (2)
- Protect companies from each other and unfair competition
- Protect consumers from unfair business practices
Cultural environment (3)
- Cultures greatly differs and impact how business is conducted
- Be aware of connotation of words, signs, symbol and expressions
- Careful with logo advertisement
Why do companies make mistakes when expanding into foreign country?
A lack of knowledge of country local culture
Element of culture for international marketers (2)
- Material life
- Language
Material life
Difference in level and type of consumption of goods (ex: soft-drink industry, Coca-Cola in China/India)
Language (4)
- Translating doesn’t always work
- Names may carry different association
- Inappropriate translation
- Body language
Response to marketing environment (2)
- Passively accept the environment
- Change in environment (ex: Cathay Pacific Airlines)
Globalization
Shift to more integrated/interdependent world economy
Globalization of markets (3)
- Merging of distinct market into 1 huge one
- Fall of trade barrier -> easy to sell internationally
- Consumer taste converge to global norm
Global institutions (4)
- World trade organization (WTO)
- International Monetary Fund (IMF)
- World Bank
- United nation (UN)
World trade organization (4)
- Police world trading system
- Ensure nation adhere to rules
- Facilitate international agreements
- Help manage/regulate global market
International Monetary Funds (IMF) (2)
- Maintain order of int. monetary system
- Lender of last resort
World Bank
Promote economic development
United nation
Preserve peace through int. cooperation and collective security
Globalization of production (3)
- Sourcing good/services from around the world to take advantage of national difference
- Compete more effectively
- Optimal dispersion still difficult
Drivers of globalization (2)
- Decline in barrier to the free flow of goods, service, capital, since WW2
- Technological change in comm., info processing and transportation
U.N basic purposes (4)
- Maintain int. peace
- Develp. friendly relation among nations
- Coop in solving int. problems and promoting respect for human right
- Center for harmonizing actions of nations
Collectivism
Primacy of collective goals
Individualism
Economic freedom (econ.. self-interest)
Type of totalitarianism (4)
- Communist
- Theocratic
- Tribal
- Right-wing
Economic systems (3)
- Market
- Command
- Mixed
Legal systems (3)
- Common law
- Civil law
- Theocratic law
Gross Nation Income (GNI)
Total income of all people
Purchasing Power Parity (PPP)
Measure of price in different countries
Human Development Index (HDI)
Quality of human life in different countries
Criteria of HDI (3)
- Life expectancy at birth
- Education
- Average income
State in transition
Wave or democratic revolution around the world (1980-1990)
Cause of spread of democracy (2)
- Communication technologies
- Prosperous middle class that push for democratic reforms
Huntington theory
Non-western countries may return to traditional societies
Nature of economic transformation (2)
- Deregulation (removing restrictions)
- Privatization (transfer of state property to private ind.)
The need of legal system
Prevent organized crime / Protect property rights
Implication of changing political economy (5)
- Moves slowly
- Supported by governments
- Money losing
- Ballooning budgets deficit -> hyperinflation
- Shock therapy = best
Cultures (2)
- Rooted in values/norms
- Evolves over time
Folkway
Routine conventions of everyday life
Mores
Norms central to functioning society and social life (No crime, incest, cannibalism)
Can society have more than one culture?
Yes
Is there a strict one-to-one correspondence between society and nation-state?
No
Determinants of culture (5)
- Religion
- Political / Economic philosophy
- Education
- Language
- Social structure
Social culture (2)
- Individual = basic unit of social org. (not group)
- Society stratified into classes
Individuals (social culture)
Emphasis on ind. performance
Group (social culture)
Primary unit in non-western culture
Social Strata
Hierarchical social categories based on family background, occupation and income
Caste system
Social position determined by family
Class system
Open stratification (can change position through achievements)
Major religions (5)
- Christianity (Catholic/Protestant)
- Islam (free entreprise)
- Hinduism (spiritual achievements)
- Confucianism (loyalty/honesty)
- Buddhism (no wealth creation, entrepreunial acceptance)
Language (2)
- Spoken language
- Unspoken language (non-verbal comm.)
Education (2)
- Determinant of national competitive advantage
- econ success from skilled/educated workforce
Culture workplace (5)
- Power distance
- Ind. vs. Collec.
- Uncertainty avoidance
- Masculinity vs. femininity
- Long-term vs. short-term orientation
Critics of Hofstede (3)
- Countries have more than one culture
- Research culturally bound
- Research focused on 1 industry
Economic advancement = societal change?
Yes
Tarrifs (3)
- Tax levied on import
- 2 types: Speciffic (fixed charge on unit of good) and Ad valorem (proportion of the value of the imported good)
- Used to protect domestic produced from foreign competition
Who suffer/gain from tariffs (3)
- Govn. Gain
- Domestic Producer gain
- Consumer lose
Conclusion on tariffs (2)
- Pro-producer, anticonsumer
- Reduce overall efficiency of world economy
Subsidies
- Govn. payment to domestic producer
- Helps producer in 2 ways: compete against foreign import and gain export markets
Import quota
Restriction to quantity of good imported
Tariff rate quota
Lower tariff rate is applied to imports within a quota than those over quota
Voluntary export restraint (VER)
Quota imposed by exporting country
Export tariffs
Tax on exported goods to ensure sufficient supply within country
Export ban
Policy that partially or entirely restrict export of a good
Local content requirement (LCR)
Requirement that a fraction of good be produced domestically
Administrative trade policies
Bureaucratic rules designed to make it difficult for import to enter a country
Japan = master
Anti-dumping policies
Policies designed to punish form that engage in dumping (predatory behavior)
Also named countervailing duties
Euro benefit (4)
- More saving with 1 currency
- Easier to compare price
- Lower prod. cost
- Support develp. of pan-European capital market
Euro cost (3)
- National autorities lost control over monetary policy
- Establishment of independent European central bank
- Set interest rate and determine monetary policies for euro zone
How many countries in EU
27 after Brexit
NAFTA
North America Free Trade Agreement
Firms will move prof to Mexico
CUSMA
Canada United States Mexico Agreement
Compel automaker to outsource less part from car assembled in NA
Andean community
Bolivia, Chile, Ecuador, Colombia, and Peru after Venezuela left
custom union
Mercosur
Argentina, Brazil, Paraguay, Uruguay (Venezuela later)
Negotiate as a bloc
BRICS
Brazil, Russia, India, China, South Africa
Largest economies outside of OECD
Central American Common Market
Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua
1960-1969 War
CAFTA
Central American Common Market + Dominican Republic
Trade freely with US
CARICOM
Caribbean state attempting to establish custom union
2006: Caribbean single market and economy (CSME)
ASEAN
Association of Southeast Asian Nation
Attempt to establish free trade area
