Exam 1 Flashcards
What is globalization?
A process of interaction and integration among people, companies, and governments of many nations, is driven by international trade and investment and has resulted in wha some call a global economy
Social networking …
Websites have information about their subscribers’ interests, hobbies, and consumption habits Valuable information to global advertisers
What’s global marketing?
Attain worldwide coordination, rationalization, and integration of all marketing activities including target market selection, marketing-mix decisions, and organizational design and control mechanisms Includes the development of global products and global communication and distribution strategies
CAGE Framework …
Distance between two or more countries
Cultural,
Administrative,
Geographic,
Economic
Cultural differences:
language
ethnicities
religion
values
norms measurements: power distance masculinity individualism
Administrative differences:
laws
political risk
government structure
measurements: colonizer-colonized link legal system
Geographic distance:
country size
infrastructure
climate
remoteness from neighboring countries
Economic distance:
national income
costs of doing business
prices
availability of human and natural resources
measurements: inflation imports exports
What are emerging markets?
Provide new opportunities for investment and marketing
EPRG Framework …
Ethnocentric orientation
Polycentric orientation
Regiocentric orientation
Geocentric orientation
What’s ethnocentric orientation?
Focus on the home market
Domestic strategies are superior to foreign ones
Domestic strategies are applied in foreign markets and overseas operations
No systematic marketing screening to search for foreign markets
What is polycentric orientation?
Decentralized management
Affiliates develop their own marketing strategy
Mindset of management is focused on host country
Marketing strategies must be adapted to the specific needs of the market
Little room for standardized marketing
Overseas markets are screened individually
Marketing activities are organized and carried out country by country (e.g. Ford Escort)
What is regiocentric orientation?
A particular region is viewed as comprising a single market
Regional trade areas are the focus of marketing activities (e.g. EU, NAFTA, Mercosur)
Attempt to develop and implement marketing strategy for all countries in a region
Standardization wherever possible (e.g. Toyota)
What is geocentric orientation?
Attempt to implement global marketing by integrating worldwide operations
Products and brands are produced in large volumes to achieve economies of scale
Standardized product, brand, image, positioning with minimal adaptations
Acquire and share knowledge among the various components of the global network to sustain competitive advantage
What is standardization?
Gaining economies of scale in production and marketing Lowering costs (R&D)
What is mass customization?
Creates value by company-customer interaction at assembly stage of operations level to create customized products with production cost and monetary price similar to those of mass-produced products
Standardization vs. mass customization …
Drawbacks: longer waiting times longer searching times higher prices “Customized consumer” separate niche segment
What is a global marketing strategy?
Organization-wide plan designed to enable the firm to develop a strong global presence
Internal drivers: global vision firm capabilities financing international experience
external drivers: global economy culture political legal system technology
PESTEL Framework …
Audit a company’s external environment
Strategic marketing planning
Political
Economic
Social
Technological
Environmental
Legal
Political factor:
Local and national government structure
Government stability
Internal politics
International relations
Terrorist activity
Political risk
Economic factors:
Economic growth indicators
Exchange rates
Trade
Trade policy
Government intervention in the economy
Taxation
Consumption
Employment
Inflation
Social factors:
Demographics
Lifestyle
Education
Living standards
Immigration
Technological factors:
Technological infrastructure
High tech markets
Bio-technology
Information technology
Clean technology
Environmental factors:
Environmental regulations
Global warming
Pollution
Green marketing
Legal factors:
Legal system
Business legislation
Consumer protection
Intellectual property issues
What is balance of trade?
Difference between exports and imports Excess imports creates a net outflow of monetary payments Outflow of payments weakens the value
What is culture?
Shared meaning system
Collective programming of the mind that distinguishes the members of one group of people from another
Encompasses all value systems of a nation
Defines a human community
What is non-verbal communication?
Deep culture
Facial expressions and posture
Hidden meanings
Role of subcultures …
Develop around a shared characteristic that is different and unique within the predominant national culture
Can be anything from language, religion, shared interest
Corporate culture = subculture
Subcultures often transcend national borders and cultures
Does a product appeal to national, subculture or both?
Hofstede’s framework …
Five dimensions:
individualism
masculinity
power distance
uncertainty avoidance
long-term vs. short-term orientation
Individualism vs. collectivism
Relationship between an individual and the group
Masculinity vs. femininity
Assertiveness and personal achievement vs. caring for others, nurturing roles, emphasizing quality of life
Uncertainty avoidance
Tendency to avoid risks vs. risk-prone attitude
Power distance
Hierarchy is strong, power centralized at top vs. power is more equally disitributed
Long-term vs. short-term orientation
Thrift and perseverance vs. tradition, social obligations
GLOBE Framework
Measure national culture
Result of Hofstede
Breaks down Hofstede further
Breaks down collectivism into social and in-group
Adds assertiveness, performance and humane orientation
GLOBE vs. Hofstede
Respondents included middle managers
GLOBE: 825 organizations in 61 countries
Hofstede: 1 organization
Monochronic vs. polychronic
Doing one thing at a time vs. doing a number of things at a time
Time is important and regulates how things are done vs. less time-oriented, less organized
Civil law vs. common law
Civila law: Roman based, comprehensive system of rules that are applied and interpreted by judges
Common law: Court adjudications primary source of law
Each new case becomes a precedent for future cases
Muslim Law
Inconsistencies
Variations between Sunnis and Shiites
Example rather than principle
What is marketing research?
Information used to discover marketing opportunities, and problems
Give directions to marketing actions
Track performance
Contribute to a better marketing process
What is market research?
Part of marketing research
Studies market sizes and trends
Encompasses competitive research
Price or product research
Marketing mix
Customer
What is international marketing research?
Marketing research with the purpose of informing marketing decisions that have to be made in more than one country
Why do you perform marketing research?
Risk management
Competitive advantage
Strategic decision making
Tactical decision making
Performance tracking and reporting
What is quantitative research?
Collection and analysis of numerical data
What is qualitative research?
Subjective Free-form format (e.g. interviews, focus groups)
Primary vs. secondary research …
Primary research: collecting original first-hand responses from research participants
Secondary research: Collecting and analyzing existing data
Steps of the marketing research process:
- Define the research purpose and objective
- Decide on the research methodology
- Design research
- Collect data
- Analyze data
- Report data
What is internationalization?
When a firm makes a strategic decision to enter foreign markets and adapts its operations to international environments by committing tangible and intangible assets, knowledge and human resoruces
Ansoff model:
Reactive motivation to internationalize:
Unsolicited triger to follow up and investigate foreign markets
Response to unfavorable conditions in their current markets (e.g. competitive pressures, excess capacity, declining domestic market)
Proactive motives to internationalize:
Desire of management to become global players
Indirect exporting:
Intermediaries who specialize in exporting sell the product from home
Direct exporting:
Distribute products directly through agents or distributors in the target country
Export-based modes of entry?
Indirect exporting
Direct exporting
Contract-based entry modes:
Contract Manufacturing
Turnkey operations
Management contracts
Licensing
Franchising
Licensing:
Tansferring rights to a firm’s products to an overseas company for the purpose of producing or selling
Franchising:
More control to franchisor, but also provide more materials, training and other forms of support
Contract Manufacturing:
Using cheaper overseas labor for production
Equity-based entry modes:
Wholly owned subsidiaries
International joint-venture
Equity-based modes:
STP framework:
Segmenting
Targeting
Positioning
Criteria for segmentation:
- Measurable
- Different enough to warrant changes in marketing mix
- Accessible
- Large enough
- Stable
Which tools are used for segmentation:
Psychographics (values, lifestyles)
Demographics (age, gender, race)
Criteria for targeting:
Market size
Growth rate
Competitive position
Market accessibility
Customer fit
SMART acronym
Specific
Measurable
Attainable
Relevant
Time-based
When is the SMART framework used?
Step 1 in the marketing research process: purpose and objectives
How’s segmentation accomplished?
Establish homogenous groups of people that share similar demographics and psychographics
What’s used in poistioning?
4P’s
What is perceptual mapping used for?
Used to evaluate your current position in the market relative to your competiton on an individual basis
What can NGOs learn from Coke?
Use real time data
Use local talent
Marketing (needs vs. wants, stimulating demand)
Consumer Decision Making Process:
- Identify need / Problem recognition
- Information search
- Evaluation of alternatives
- Purchase
- Post-purchase (minimize cognitive dissonance)
