Exam 1 International Flashcards
International Trade
Trading item with other item, w/o money involved
Domestic Market
Marketing using the 4Ps
International Marketing
Same as domestic marketing but more
197 countries involved.
3 things to keep in mind when dealing international
- Finanical concern
- Cultural concern
- Legal/political concern
Screws up cultural concern the most
3 business strategies/incentives
- Growth(most Important)
- Divestiture (get rid of something)
- Maintenance/hold
3 components of International Marketing
- Value (Both real and perceived)
- Competitive (Differentiation) Better than the competitors
- Focus (Core confidence)
Focus is like Disney focusing on entertainment than toys
Real value: finanical value
Perceived value: how much more the customer is willing to pay
Saturated Market
Everyone has product but no growth
4 Competitive Advantage
- Brand loyalty
- Brand name
- Customer service
- Global support
Global Support: Leaving to another company in the country
Management orientatoins
Ethnocentrism
What works domestically, will work globally
This does not work. DO NOT USE
Management orientations
Acculturation
Change/modify to the culture market
Management orientations
Polycentrism
Treat each country on as its own country
Use it but go into segmentation
Management orientations
Regiocentrism
Some of the product you market have to meet region requirement
Product that makes sense and cross borders
Management orientations
Geocentrism
World market as one market
1 set of ps for the whole world, Ex Cola
Difficult to imply
Driving Forces
Trade agreement
Open border within the union similar to the crossing the states (w/o passport)
Most favored nation clause ( European unit)
Driving forces
Economy scale
more you do, less it’ll cost you
spreading fixed cost over many product
countries inviting you to sell product( Singapore)
Driving Forces
Multinational companies
company that’s based out of a country but operates all around the world
Big companies with a lot of resource. Anything they need they control
Driving Forces
International organization
World Bank
UN
World trade organization
Example: WTO reduce tariffs to single digits.
Driving forces
World Peace
if world is at peace, we can do business
1) Western hemisphere
2) European Union
3) Asian Purific and china
Driving Force
Converging customer needs
making things that the customer’s needs
Clothes, music, entertainment
Driving Force
Distribution
Products put in contianers
US has the most efffective distribution in the world
Communications
Talk to anyone in the world very fast
Finanical Sercuity
Future Rates
Call the bank to lock in the rates for a fee
Letter of credit
Letter ensures you get paid, between two banks
Counter trade
international trade with goods rather than currency power
Restricting forces
Company Culture
Doesn’t want to go global, was a domestic company, always a domestic company
Restriciting Forces
Political/Nationalism
Government prevent competition with domestic company
Force company to buy within the country, Confisate/nationalise companies
Restriction Forces
Expropriate
Government/state buy the company for whatever they want
Restircting forces
Non-tariff barries
Restrict trade other than tarrifs
Quotas, embargoes, sanctions,
Restricting forces
Global social opposition
Society pressure
People talk abut why going global is bad
Restricting forces
International conflict
War
Containers are not in ensure if there’s an act of war
Restricting Forces
Ignorance
Not enough experiences
Restricting Forces
Failure
Not enough money to retry if product fails
Economic systems
Capitalism
Privately owned productions, allocated resource based on demand
Very few rules, European Union, US
Centrally Planned Capitalism
States controls and own factro of production, Business are market driven
Must go trhough government, China
Economic System
Market Socialism(NORDIC)
Privately owned factors of productions, Government decides allocate resources
Highest tax, Sweden
Centrally planned socialism
Government own everything and decides where things go
North Koera, Cuba,
Index of economical Freedom
how attractive the country is to do business
Singpore, Switzerland, Ireland, Can do business with
Russia, cuba, north korea, Don’t do business with
Stages of Market development
Low income
(<$0125)
Least devloped countries
No consumer products, focus on what they need, concentrate selling to government
Lower middle income
($1026 - $4035)
Developing/expanding countries
Upper middle incomes
( $4036 - $12475)
Devloping/industralizing countries
High income
($12476 >)
Industrialized Countries
Market Niches
Specific segment who share characteristics that are likely to buy products
Preferential Trade agreement
Free Trade agreement
A
Eliminates barries between countries
North America,
Customs Union
A, B
Common external tarrifs
Unify Front
Common Market
A, B, C
Share factors of production, eliminates duplication
Move production to less expensive countries or move tech to high tech countries
Economical Union
A, B, C, D
Environmental Concerns, Shut you out of market, cuts their cost
Escalation Cost
Price increases in foregin countries, domestic price are going down.
Cultures
Long term(Muligenerational) learned buying behavior of a society that dicates how people think
Attitude/Beliefs
Entrenched prespective on what society believes to be true
Diffcult to change
Subcultures
Help identify market niche
Religion
Buying behavior is influenced by religion, market product along with the religion laws
Regligious law take over the civil law int he middle east.
Culture is reflected in
Aesthetics
Impact of number and color
Different culture views color and number differently
Color: White and number 4
Culture reflected in
Music
jingles and background selections
Different tones/ music mean different things
Culture is reflected in
Dietary preferences
Product and entertainment
Some products aren’t even shown in some countries due to the fear of social backlash
3 types of Language and communications
1.Verbal
2.Non-verbal (body language)
3.Listening(Most important)
Decision Maker
Respect generated by everyone( generally the oldest)
Look how the behavior to each other
Culture is reflected in
Relationship
Importance of relationship with the costumer
High Contextual countries
Relationship based countries, words aren’t that important. Background, assoicates, relationship are important. Trust, doesn’t need lawyer
Low contextual countries
Words and definiation based countries. Everything must be written down. Responsibility passed down to the lowest person, Must need lawyer.
Hofstede’s cultural typology( how to market, communicate, time frame)
Individualism vs Collectivism
Worry about self vs worry about society
Hofstede’s cultural typology
Power distance
Show respect to society/family
Pecking order
Don’t challenege your senior(high)
Calling senior’s name (low)
Hofstede’s cultural typology
Uncertanity Avoidance
Risk taker vs risk avoidance
Risk tolarance
How willingly customers are to take the risk
Hofstede’s cultural typology
Gender roles
Culture of country aggressive or nuturing
Achievement and success(Male)
Nuturing and relationship(female)
Hofstede’s cultural typology
Long term vs short term
Short term - Want result now, how are we getting paid
Long term - Not worry about getting paid
Diffusion Theory
How quickly products intergrates into country
Adoption process
- Awareness (Introduce yourself to the market)
- Interest (Access via social event/social media)
- Evaluation (Reinforce the positive decision habits via spokeperson)
- Trial (Samples, Trial offer)
- Adoption (Customer buys product, after sale support)
Characteristics of innovations
- Relative advantage( How is it better)
- Compatability (How does this product fit me, lifestyle, culture)
- Complexity (How hard is it to make change)
- Divisability (Break down the product, piece by piece)
- Communicable (Can it be communicated in a different language)
Adopter Catergories
- Innvoators (Early gatekeepers, Market follows them, usually 2nd buyers, 2.5%)
- Early Adopters (“2nd Innovators, 13.5%)
- Early Majoirty(First major push into the market, money start, 34%)
- Late Majority(After the fact, 35%)
- Laggards( Buys after new product comes out, product dies, 15%)
growth Strategies
Existing Market and Product/service
Market Penetration(short term)
Growth strategies
Existing Market, New product/service
New product development
Growth Strategies
New Market, Existing product/service
Market Development
Global market start, new market segement
Growth Strategies
New Market, New Product/Service
Diversification
Most difficult, however you can just buy another existing company in that market.
High profit, high ease of access
Priority
High profit, Low ease of access
Joint venture with existing company, or buy a company that’s in the country
Low profit, high ease of access
Put products into someone’s company, Indirect export
Low profit, Low ease of access
Avoid the company, or walk away
