IM Final Flashcards
Who is involved in negotiations?
foreign governments, distributors,
franchisors, customers, advertising
services et
What kind of problems do cultural differences cause in international negotiations?
Language, Nonverbal behaviors, Values, Thinking and decision-making processes
Some dimension of cultural variations in negotiations
goal, attitudes, personal styles, time, emotion, risk taking
Ex of nonverbal communication and language
yes, no, nodding, silence, facial gazing, touching
Verbal negotiation tactics
promise, threat, recommendation, reward, punishment, question, command
Differences in cultural values that can affect negotiations
Objectivity, time, competitiveness and equality
Four steps to have efficient negotiations
appropriate negotiation team; management of preliminaries, including
training, preparations, and manipulation of
negotiation settings; management of the process of negotiations; Appropriate follow-up procedures and practice
Components of negotiation preliminaries
Assessment of the situation and the people; Facts to confirm during the negotiation; Agenda; Best alternative to a negotiated agreement (BATNA); Concession strategies; Team assignment
Four stages of the negotiation itself
Nontask sounding (relationship building);Task-related exchange of information; Persuasion; Concessions and agreement
What is nontask sounding?
used to determine mood, communication styles, background, type of people
What to do during persuasion?
avoid threats or emotional outbursts, ask questions, use third parties
Definition of pricing
amount a person, gov, or company charges for a good or service
Active pricing
set prices to meet marketing objectives, such as share or return on profits
Static pricing
follow market prices, low focus on foreign business
Parallel Imports
Grey markets= importers buy products from distributors in one country and sell it in another to different distributors who are not part of the distribution system
When do parallel imports occur
whenever price differences are greater than cost of transportation between two market
Effects of grey trade
erosion of brand equity, strained relationship with authorized channel members, legal liabilites, complication of global marketing strategies
Variable cost pricing
Marginal or incremental cost of producing goods to be sold in overseas market
Full cost pricing
No unit of a similar product is different from any other unit in terms of cost
Skimming vs penetration pricing
Reach a segment of the market that is relatively price insensitive (low number of sales but higher profit); vs stimulate market and sales growth by deliberately offering products at low price and increase the number of sales but takes longer for profit
Regional cooperation groups
Two countries that agree to develop industries that can help each other
free trade area
two or more countries to reduce custom duties and nontrade barriers but maintain tariffs for external countries
Customs union
reduce/eliminated tariffs and common external tariff on products imported (used to be EU)
Common market
eliminates all tariffs and restrictions on internal trade, common external tariffs, allows for free flow of capital and labor
political union
political and economic integration
Trends in Eastern Europe for international marketers
privitazation, free market pricing systems, relaxing import controls, inflations; bureaucracy, corruption, organized crime
Emerging Eastern European states
Czech, Hungary, Poland, Romania, Estonia, Latvia, Lithuania
Emerging Africa and Middle East states
Ethiopia, Angola, Malawi; political instability, unstable economically and little intergration
Definition of Emerging Markets
low income, rapid growth, economic liberalization with a free-market system = 64
Challenges in emerging markets
macroeconomic instability, political shocks, lack of institutional features and defined property rights or legal frameworks
How has China’s economy been impacted
Admission to the WTO and US granting normal trade relations
How has India’s economy evolved
Privatization; demolishing monopolies; trade agreement; more foreign direct investment
Bottom of the Pyramid Markets
4 billion people with less than $1200
What is global marketing
Marketing activities coordinated and integrated across multiple country markets
Benefits of global marketing
economies of scale in production and marketing, competitive advantages; transfer of experience and know-how; access to customers
Types of planning for global markets
corporate planning, strategic planning, tactical planning
Corporate planning
long term, general goals
strategic planning
products, capital, research, long and short term goals
tactical planning
specific actions, market planning
Steps in the international planning process
analysis and screen to match company and country needs; adapt marketing mix to targets; develop plan; implement and control
How are companies structured
global product, geographical divisions\, matrix
What is global segmentation
process of subdividing a large homogenous market into clearly identifiable groups having similar attributes, responding similarly to a companies marketing mix
What characteristics are needed for segmentation
identifiable, measurable, accessible, able to buy,willing to buy
Two stages of global segmentation
macro = division of a number of countries; micro - local segments which are similar across the countries (lifestyle, demographics)
Three segmentation scenarios
universal/global; regional; unique/diverse
What is positioning
present the product to the selected markets to that is is perceived in the most favorable way relative to preferences and competition
Three reasons why consumers buy mispositioned products?
brand image, country of origin, low price
What are global products?
standarized with some uniform features in all countries (Gillete, TV sets)
Regional products
unique to a trading region (PG soap)
Localization
changes required for a product or service to function in a new country
Adaptation
changes made to match consumer tastes or preferences
product homologation
changes mandated by local product and service standards
Characteristics of innovation
relative advantage, compatibiliity, complexity, trialability, observability
Levels of adaptation for products
core, packaging, support
global logistics
design and management of a system that directs and controls the flow of materials into, through and out of the firm
What factors impact distribution
distance, exchange rate fluctuations, foreign intermediaries, regulation,security
What must be considered when determing channels
product requirements, logistic feasibility, demand factors, competitive factors, middlemen resources, own resources
What are middlemen good for
inventory financing, cumulative rebates, merchandise returns, promotional support
Distribution patterns for retail
size patterns, direct marketing, resistance to change
Types of home country middle men
manufacturer’s retail stores, global retailers, export management companies, trading companies, complementary marketers
Levels of channel management of middlemen
locating, selecting, motivating, controlling, terminating
Concerns for e-vendors
culture, adaptation, localcontact, payment, delivery, promotion
Components of IMC
advertising, direct selling, sales promotions, trade shows, personal selling, public relations, customer service
Hierarchy of effects
brand awareness, knowledge, attitude, liking, trial, adoption
how to do international advertising
perform market research, specify goals, determine message, select media, have a budget, execute and evaluate
Legal constraints with international advertising
comparative advertising, accessibility to media, limitations on commercials, taxes
When are expats good for
highly technical products, high cost, cultural and legal barriers
Virtual expats
manage operations in other countries but don’t live there; stay in hotels
Factors that affect global personal selling transferability
differing human relations, degree of market development, differing regulatory environments, geographic and physical dimensions
How to have successful expat repatriation
mentor programs, keep in touch with headquarters, offer them a job
What causes price escalation
costs of exporting, taxes, tariffs, admin costs, inflation, deflation, exchange rate fluctuations
How to lessen price escalation
lowering costs of goods, lowering tariffs, lowering distributoin costs, dumping
Countertrade types
barter, compensation deals, counterpurchases, product buy-backs, offset deals
