Exam 2 Flashcards
What are the steps of the product life cycle?
Research and development Introduction Growth Maturity Decline
What can a company do during the introductory phase?
Influence consumer’s cognitive system and the purchase decision du to limited availability of information related product benefits.
What is characteristics of the maturity phase?
Demand slowdown that settles on steady growth rate
Marketing: shift from information to persuasionp
How is the PLC different from country to country?
Differences in: Shape of the curve Product phase in the life cycle The starting point The take off point Acceptance rate
How does word-of-mouth affect the PLC?
The increase of the adoption rate after the take-off point is mainly due to the interpersonal communication development i.e. word-of-mouth among the members of the foreign target segment, which can vary from country to country
What is significant about the PLC in regards to different countries?
The product can be in decline in the domestic market, in the maturity stage in country X and in the introduction stage in country Y
Companies need to manage the PLC across different countries to guarantee a constant level of profits
What is standardization?
Existence of global or regional markets
Development of similar marketing activities across national boundaries
What is adaptation?
Opting for a differentiated strategy that allows for adopting to the specific characteristics of foreign markets and to competition
Advantages and disadvantages of standardization?
Advantages: Environment: homogenous Costs: cost reduction Image: global image Planning and control: easier Innovation: diffusion of innovation Consumers: homogenous Legal issues: no differences Distribution: low costs Competition: global Customers: global
Disadvantages:
Customer satisfaction low because of lack to meet local needs
Advantages and disadvantages of adaptation?
Advantages: Consumer satisfaction high Environment: non-homogenous Image: local image Motivation: motivation of local managers Consumers: benefits for local consumers Competition: local Customers: local
Disadvantages:
Higher costs of manufacturing
Legal issues: many differences
Distribution: high costs, but can be reduced
What is the optimal level of standardization and adaptation?
When the combined costs of manufacturing and lost sales are at a minimum
Product use in a foreign market means to consider?
Use function
Use situation
Use conditions
Product utilization level
What’s the use situation of a product?
Considering all factors that define a “time” and a “place” that have a systematic effect on the consumer’s behavior
A different use situation can modify?
The importance consumers give to the product’s characteristics
The number and the type of brands taken into consideration in the purchase process
The acceptable price threshold
The time dedicated to information search
The information resources used
What are the 4 elements to packaging analysis?
Labeling
Packaging style and design
Packaging dimensions
Functional characteristics
What are the most important branding decisions in an international context?
Brand strategy (global v. local) Brand positioning Brand selection (name, logo)
What can be critical for the success of global brands?
Recognition Consistency Emotion Uniqueness Adaptability Management
What’s consistency?
A brand is able to deliver a consistent customer experience worldwide, e.g. McDonalds
What’s the emotional dimension?
Human values and aspirations
Common appeal despite cultural differences
e.g. Nike
What’s uniqueness?
Product features and communication (e.g. Apple, concept of innovation)
What’s adaptability?
A global brand demonstrates that it is able to respect local factors while fulfilling a global mission e.g. HSBC
Why are the brand name and logo significant?
They are part of the communication strategy
What do brands have to think about internationally when deciding on a name / logo?
Can we use the same brand name in all our potential markets?
Can we standardize our logo on an international level?
When would it be necessary to change the brand name in a foreign country?
When the brand name has a different meaning
What is the significance of the country-of-origin / made-in effect?
Attitudes are linked more specifically to the general perception on the quality of the products manufactured in that country
What’s the ethnocentrism phenomenon?
The believe that locally made products are more valuable then imported products.
How can the product nationality perception be influenced?
National product image vs. imported / international products
Generic products perceived country of origin
The manufacturing company’s national image
The image diffused by the brand name
The label’s “made in” image
What are the ideal tools to win over consumers about a foreign product and to strengthen brand image?
Products are guaranteed by independent manufacturers
Products have been examined by external labs
Warranties are offered
Partner with a prestigious distributor
Setting global prices …
Price must be in line with purchasing power
Pricing strategies need to be coordinated across countries and geographic areas to avoid ruining the image / brand
What factors influence international pricing decision?
Competitive factors
Consumer factors
Product factors and distribution channels
Country factors
What is monetary price?
The idea that a consumer has regarding a product’s price (e.g. expensive / cheap)
What is non-monetary price?
Represents the sacrifice that a consumer must face when purchasing a product (e.g. time, effort, risk)
What are choice strategies consumers may use under uncertainty?
Best value
Price-seeking
Price-averse
What is a price-seeking strategy?
Choosing quality over price
What is a price-averse strategy?
Choosing the cheapest product
What’s a skimming strategy?
A company can charge some consumer segments higher prices for a product
What are the risks of a skimming strategy?
High prices should be justified by distinctive product features
Possibility of favoring parallel imports (gray market)
What’s a penetration strategy?
Sets a low price for the new product in order to enter a foreign market
What does penetration pricing allow?
Quickly penetrate the market
Obtain significant market share
Gain economies of scale
How must penetration pricing be evaluated?
As a strategy to gain market share
Effects on the company’s overall business strategy
What are the internal factors that influence distribution decisions?
Product complexity
Size and development of the company’s marketing and sales function
Distribution strategy influenced by objectives of market penetration, competitive structure and financial strength
International marketing strategy influenced by entry strategy and desired control
What are the external factors that influence distribution decisions?
Characteristics of the distribution system Local regulations Stage of the product life cycle Consumer shopping habits and market size Competitive climate
What’s an intensive distribution strategy?
Occurs when producers use as many outlets as possible
When is an intensive distribution strategy most common?
Fast-moving goods manufactured by large multi-nationals that aim to penetrate all segments of the population
What’s a selective distribution strategy?
Fewer but selective intermediaries (e.g. Armani)
What’s an exclusive distribution strategy?
Limited number of retailers get the right to sell the product in specific territories (e.g. Zara)
An intensive strategy requires?
High penetration objectives necessarily require an intensive strategy that requires strong financial investment
What are direct distribution channels?
Absence of intermediaries
Manufacturer sells directly to customers
What are indirect distribution channels?
One or more intermediaries (i.e. agent, wholesaler, retailer) are involved in the transaction
What’s the length of a distribution channel?
Determined by the number of levels and types of intermediaries
What’s the width of a distribution channel?
Can be evaluated for each type of intermediary / channel member
Defined by the number of intermediaries of the same typology operating in the channel
What’s an agent?
Operates in the name of the company but does not take title to the goods
What’s a wholesaler?
Takes title to the goods and sells them to customers buying for reselling or business use
What’s a retailer?
Manage the final link between the provider and consumer
What are the tasks of agents?
Sell supplier-owned products primarily to retailers and wholesalers
Don’t take title to the goods
Don’t act in the name of the company they represent
Offer limited service
Work for a commission or fee
Generally used for textiles, clothing, footwear
What are the tasks of wholesalers?
Sell goods supplied by other firms to retailers or directly to industrial, commercial and other end users
Take title to the goods
Also sort, assemble, warehouse goods
Provide services such as packaging, labeling, negotiating and selling
What are the tasks of retailers?
Ordering Storing Creating assortments Presenting goods Packaging Financing After-sales services
Promotional activities can be divided into 4 main categories?
Advertising
Sales promotion
Public relations
Personal selling
What’s an integrated marketing communications strategy?
Various elements of a company’s communication strategy must be carefully coordinated
Impact as a whole on the market needs to be considered
What is standardized advertising?
Nothing changes in a given advertisement except the language translation
What are the advantages of standardized advertising?
Savings Consistency Control Stronger brand recognition Leverage products across multiple markets
Products suitable for standardized advertising?
Industrial brands (e.g. Intel) Prestige brands Master brands Luxury High-tech Fashion Automotive
Why are prestige and master brands better suited for standardized advertising?
Appeal to their customers’ ambitions and desire for exclusivity (more universal feelings)
What is adapted / localized advertising?
Communications reflect each market’s cultural and social conditions
What is the goal of adapted advertising?
Increase recognition
Acceptance of the brand and product
What is the theory behind adapted advertising?
Presenting a brand in the context of local cultural values and tastes will allow more people to identify with the brand
Advertising style in China?
Educational Quality Tradition Status Respect
Advertising style in France?
Humor
Sensuality
Symbolism
Advertising style in Germany?
Logic Tradition Value Authority Testimonials
Advertising style in Italy?
Emotional
Lifestyle
Celebrities
Theatrical
Advertising style in Japan?
Indirect appeals Soft-sell Entertaining Mood Symbolism
Advertising style in Spain?
Indirect appeals
Idealistic
Pleasant
Advertising style in The Netherlands?
Entertaining
Realistic
Modesty
Advertising style in the United Kingdom?
Presentational
Humor
Subtle
Testimonials
Advertising style in the United States?
Lecture
Direct appeals
Hard-sell
argumentative
What was the name of the speaker who presented the Puzzle of Motivation?
Dan Pink
What was the name of the speaker who presented How schools kill creativity?
Sir Ken Robinson
