Global - (1.2) Theoretical Foundations Of International Marketing

Question 1

Which model can be used to explain internationalization?

Answer 1

EPRG
= Ethnocentric + Polycentric + Regiocentric + Geocentric
All international management theories

Question 2

Explain “Ethnocentric” in EPRG

Answer 2

Domestic and export marketing.
Product development for home country customers.
Marketing decisions at headquarters.
Ex. Nissan (when other than Japanese countries started buying Nissan cars, they didn’t work optimally as they were set on the weather in Japan)

Question 3

Explain “Polycentric” in EPRG

Answer 3

International marketing.
Local product development based on local needs.
Marketing decisions made at each country.
Ex. Unilever

Question 4

Explain “Regiocentric” in EPRG

Answer 4

Multinational marketing.
Product development standardized over regions but not across them.
Marketing decisions made regionally.
Ex. General Motors

Question 5

Explain “Geocentric” in EPRG

Answer 5

Global + glocal marketing
Global products with local variations.
Marketing decisions made jointly with mutual consultation.
Ex. Nestlé, AB Inbev
> Almost every country does it this way today

Question 6

What does glocalization means?

Answer 6

Differentiated globalization: balance between global marketing (standardized) and local marketing.
>Think globaly, act locally
>Transfer global knowhow and best practices between countries
>Combine the advantages of global and local

Question 7

Explain the glocal strategy of McDonalds

Answer 7

• Locally relevant customer experiences > franchising helps. Headquarter doesn’t have to be busy with local preferences.
• Global brand is needed for a strond brand and for financial reasons.

Question 8

What is the born global concept?

Answer 8

A firm that starts globally and has its reason for it.
> Taking on larger rivals.
> Chase global opportunities.
> Use the distance for creation of new products.
Challenges? Distance, cultural differences and scarcity of resources.
Ex= AirBnb, Facebook

Question 9

Explain the coordination perspective in global marketing

Answer 9

Cross national coordination of market development activities. Their are interdependencies (feedback effects) between individual international markets.
- Demand based
- Institutional based
- Competition based
- Compant based

Question 10

Demand based feedback =

Answer 10

Marketing activities in one country impact the behavior of buyers in other countries.
* Cross border exchange info
* International availability of product and price info

Question 11

Institutional feedback =

Answer 11

About political and legal market conditions.
Problems arise when a country trades or conducts business with 2 hostile countries.

Question 12

Competition based feedback =

Answer 12

Reactions of competitors in one country, that are the result of the local firm in another country. Ex. Price attacks

Question 13

Company based feedback =

Answer 13

Devlopment of national market influences the opportunities for developing another national market (ex. with scarce resources)

Question 14

Explain international arbitrage (demand based feedback)

Answer 14

When price differences between national markets are greater than the arbitrage cost to transfer, re-import, parallel import and lateral grey import occur.

Question 15

What are drivers of international arbitrage?

Answer 15

EU = currency union
> increases exchange of pricing information as prices are very easy to compare
> trade liberalization
> lower cost as there is no exchange in currency

In general
> persistent price differences
> declining shipping costs
> improvements in international communication and information systems
> penetration of international and global brands
> increasing acceptance of global goods

Question 16

How to adress feedback effects?

Answer 16

• Coordination of national marketing strategies
  > Like price setting in pharma
• Management of interdependencies
  > Ongoing monitoring of extent of feedback effects
  > Controlled manipulation of feedback effects