Exam 2

Question 1

International segmentation

Answer 1

The process of identifying countries and/or consumers that are similar with regard to key traits, such as product-related needs and wants, and who would respond to the marketing mix in a similar way.

Question 2

Market size/potential measures

Answer 2

GDP
Population
Imports
Energy consumption

Question 3

Market segment

Answer 3

A group of customers that share similar characteristics and respond to marketing offerings in a similar fashion

Question 4

Benefit Segmentation

Answer 4

Involves understanding the motivation behind consumer purchases, in order to be able to send the appropriate message to the relevant market segments.

Question 5

Differentiated Market

Answer 5

Companies identify or create market segments that want different benefits from a product and target them with different brands using the appropriate marketing strategies.

Example: Procter & Gamble’s brands – Dreft, Tide, Ariel are targeted at different segments who want different types of performance from their laundry detergent.

Question 6

Concentrated Market

Answer 6

Select only one market segment and target it with a single brand.
Example: Mont Blanc pens aimed at consumers who want a high-performing pen with status cachet.
Note: Niching (targeting a niche market) is an example of a concentrated strategy

Question 7

Undifferentiated Market

Answer 7

Product is aimed at the market using a single strategy regardless of number of countries targeted, and regardless of the locations where it is marketed and the number of market segments.

Example: powder milk, beans

Question 8

Positioning

Answer 8

Locating a brand in consumers’ minds over and against competitors in terms of attributes and benefits that the brand does and does not offer.

Question 9

Steps involved in positioning a brand

Answer 9

Identify and analyze customers
Identify competitors
Determine how they are perceived by consumers
Determine brands’ positioning in consumer’s minds
Select positioning
Monitor position

Question 10

Attribute/benefit positioning

Answer 10

Uses product attributes and benefits to position it in consumers’ mind relative to competitors’ products (P&G’s Cheer detergent—protects against fading and fabric wear).

Question 11

Price/Quality positioning

Answer 11

Products are positioned as either offering the best value for the money (especially useful when marketing in developing countries) or as being the best product that money can buy, stressing its high price and quality (Toyota, Hyundia, Wal-Mart).

Question 12

Use or Applications positioning

Answer 12

Positioning a product as having a precise application, thus differentiating it in the consumers’ minds from similar products with a more general use (Dove moisturizing soap).

Question 13

Product user positioning

Answer 13

Focuses on the product user, rather than on the product, thus associating the product with a certain segment of the market (Mont Blanc for cosmopolitans).

Question 14

Product class positioning

Answer 14

Differentiating the company as a leader in a particular product category (Apple’s iphone).

Question 15

Competitor positioning

Answer 15

Comparing the firm’s brand with that of competitors (Coke and Pepsi)

Question 16

Global consumer culture positioning

Answer 16

Identifies the brand as a symbol of a particular global culture or segment
High-touch and high-tech products

Question 17

foreign consumer culture positioning

Answer 17

Associates the brand’s users, use occasions, or product origins with a foreign country or culture

Question 18

Local Consumer culture positioning

Answer 18

Identifies with local cultural meanings
Consumed by local people
Locally produced for local people
Used frequently for food, personal, and household nondurables

Question 19

Product standardization

Answer 19

Same product across all country markets

Question 20

Product Customization

Answer 20

Tailored products to meet specific needs and wants of each country

Question 21

Standardization

Answer 21

Advantages of standardization
Economies of scale
Marketing knowledge can be shared across countries
Create uniform and consistent images worldwide

Disadvantages of standardization
Missing market opportunities in niches with potential
May not encourage customer loyalty

Question 22

Global Localization

Answer 22

Global branding with localized marketing adaptation to differences in local culture, production capabilities, governmental restrictions, etc.

Types
Modular Adaptation:
Offer parts (modules) that can be assembled worldwide in different configurations, depending on market needs.
Core Product Strategy:
Involves using a standardized strategy for the core product worldwide, but varying certain aspects of the offering (product ingredients, advertising, for example) from market to market.

Question 23

Mandatory Adaption

Answer 23

Involves adapting products to local requirements so that they can legally and physically operate in the respective countries.

Question 24

Non-Mandatory Adaption

Answer 24

Adapting a product to better meet the needs of the local market, or developing new brands for individual local markets, even though such adaptation is not required

Question 25

Brand

Answer 25

Brand is a name, sign, symbol, word, or some combination of these to distinguish a company’s product

Question 26

Brand Image

Answer 26

the sum of impressions about a brand

Question 27

Brand Equity

Answer 27

the added value that accrues to a product as a result of investments in the marketing of the brand

Question 28

Extend strategy

Answer 28

offering product virtually unchanged in markets outside of home country

Question 29

Adapt strategy

Answer 29

changing elements of design, function, and packaging according to needs of different country markets

Question 30

Create strategy

Answer 30

developing new products for the world market Important for reaching mass markets in less industrialized nations and certain segments in industrialized countries Hand-cranked radios for areas with no electricity Total toothpaste by Colgate uses global benefit segmentation

Question 31

design counterfeit

Answer 31

Copying designs or scents, which is very common and risk free since companies cannot be prosecuted.

Question 32

Brand-name counterfeit

Answer 32

Selling counterfeit products as original products bearing the respective brand name

Question 33

ISO 9000

Answer 33

quality in product features that are required by the customer

Question 34

ISO 14000

Answer 34

Environmental management system standards that help business reduce its environmental impact, facilitate sustainable development, and foster international trade

Question 35

Pricing strategy

Answer 35

Setting price that enhances perceived value and elicits favorable consumer response and provides favorable rate of returns on investments

Question 36

Penetration Pricing

Answer 36

Charging a low price in order to penetrate market quickly Discourage competitors from entering the market by lowering margin Increase volume to lower cost and increase profit

Question 37

Market Skimming

Answer 37

``` Charging a high price Linking price with quality Promoting exclusiveness Promoting augmented value Example: luxury goods LVMH, Mercedes-Benz, Mont Blanc ```

Question 38

Japan Vs. China

Answer 38

Japan Middle price products not appealing Local designers’ building local and global reputation Traditional Consumers - prefer high quality products Teen Consumers - prefer low price and european products China Luxury market growing Domestic luxury products emerging Demand for pirated goods increasing Tradition consumers - Price sensitive and money savers Youth consumers - prefer western and luxury brands

Question 39

Ethnocentric/Extensive Pricing

Answer 39

Per-unit price of an item is the same no matter where in the world the buyer is located Appropriate for industrial goods Appropriate for well established brands Importer must absorb freight and import duties

Question 40

Polycentric/Localized Pricing

Answer 40

Permits affiliate managers or independent distributors to establish price that they feel is most desirable in their circumstances Drawback—sensitive to local market conditions but can lead to gray marketing

Question 41

Geocentric/Strategic Pricing

Answer 41

``` Intermediate course of action Feedback from local managers to set the price for each market Recognizes that several factors are relevant to pricing decision Local costs Income levels Competition Local marketing strategy Prices set within a range ```

Question 42

Price Escalation

Answer 42

when products are exported from one country to another | The longer the channel the greater the increase in price

Question 43

Gray Marketing

Answer 43

buying in low-price countries, selling in high-price countries

Question 44

Dumping

Answer 44

Sale of an imported product at a price lower than that normally charged in a domestic market or country of origin Sporadic: to reduce surplus inventory Predatory: to drive out competitors, to gain market control Persistent: high prices in protected markets, low in competitive markets

Question 45

Transfer Pricing

Answer 45

Pricing of goods, services, and intangible property bought and sold by operating units or divisions of a company doing business with an affiliate in another jurisdiction

Question 46

International Retail Framework

Answer 46

Organic--Company uses its own resources to open a store on a greenfield site or acquire one or more existing retail facilities Franchising--When barriers to entry are low yet the market is culturally distant in terms of consumer behavior or retailing structures Chain Acquisition--A market entry strategy that entails purchasing a company with multiple existing outlets in a foreign country JV, Licensing--When culturally distant, difficult-to-enter markets are targeted

Question 47

Globally integrated marketing

Answer 47

Leveraging different mediums to interact with consistency and efficiency with target markets across national borders.

Question 48

4 M's

Answer 48

Messenger, Message, Medium, Market