International Marketing Exam Questions Flashcards
1
Q
What is competitor feedback?
A
- Information about the strategy and operations of companies providing similar products.
- What competitors are on the market?
- What do they offer on the market?
2
Q
Explain competitor feedback. Can competitors ever become allies?
A
- Information about the strategy and operations of companies providing similar products.
- What competitors are on the market?
- What do they offer on the market?
- Yes, they can become allies:
o Form alliance to complement each other (Airline example)
o Provide complementary services, quality, etc. (bundle ressources)
o Other markets integration (equity or assets)
3
Q
What is supplier feedback and why is it important in international marketing?
A
- Information from producers of products and services, such as company goals and financial position
- Company goals etc. focus on the company as a whole, not the individual markets
- Market position (sales, market share); Cost (productivity, efficiency); profitability (turnover-profit relation)
4
Q
Describe three company goals.
A
- Market position (sales, market share)
- Cost (productivity, efficiency)
- profitability (turnover-profit relation)
- Financial goals (liquidity)
- Social goals (satisfaction, job security)
- Prestige goals (image)
5
Q
Why are company goals important in the internationalization process of organizations?
A
- Transnational objectives allow a company to create a common language that connects across different cultures and mentalities and create a common identity.
- Transnational corporate culture
6
Q
How does consumer feedback occur regarding international markets?
A
- Consumer preferences
- Spread of consumers
- Buying behavior
- Cross-border exchange of information and goods (cooperation-related dimension)
7
Q
How does consumer feedback influence the globalization of markets?
A
- Globalization of markets is a result of standardizing consumer needs (convergence) – Levitt
- Reasons:
o Increasing socio-demographic characteristics in industrial countries
o Increasing integration of cultures
o Technology (communication & transportation)
8
Q
Explain three factors from an international business’ environment with the help of examples.
A
- Technological: voltage of power outlets is different
- Political-legal: sanctions, type of government
- Socio-economic: culture, customs, habits of consumers
9
Q
What are the tasks of international marketing?
A
- Accessing or managing relevant feedback (supplier, consumer, competitor)
- Coordinating national marketing activities
- Optimizing profits across national markets
10
Q
What is the BERI Index?
A
- BERI = Business Environment Risk Index
- Evaluates risks for each country using data from interviews with managers and researchers
- political, operative and investment risk
- Focuses on political-legal environmental factors on international business
11
Q
What are relevant factors for the BERI?
A
- investment risk
- political risk
- operational risk
12
Q
Can you rank the market entry of those countries based on the following information?
- Market attractiveness o BG: 4x medium; 3x high o MA: 2x low; 1x medium; 2x high - Barriers to enter o BG: 4x low; 2x medium o MA: 2x low; 4x high
A
- Procedure:
- Multiply (low 1x, medium 2x, high 3x)
- Barriers: lower is better
- Attractiveness: higher is better
- Subtract Attractiveness – Barriers
- Highest Result is the best
13
Q
Your marketing research department suggest using observation as technique. You’re not sure and would prefer surveys. Name three possible reasons why.
A
- Surveys can be used more extensively (scaled up)
- Reasons for observed behaviors are not obvious
- Observer bias
- Interpretation of observations can be difficult
- Observations are time intensive
14
Q
What are pros of observations compared to surveys?
A
- Behavior is studied directly (not recalled later – no memory needed)
- Behavior the consumers are not aware of can be captured
- Not dependent on consumers’ willingness or ability to provide information
15
Q
What are advantages of written surveys vs. in-person surveys?
A
Written survey: - Easy to conduct - Limited range of issues - Anonymous - More honest answers In-person: - Controlled situation - Additional explanations - Control of course (contextual depth)
16
Q
One Location of your business has a very low turnover. Which market research tools would you use to shed light on the situation?
A
- Internal secondary research/data: Sales figures (since when did sales decline)
- External secondary research/data: Development of the industry (Industry in general down?)
- Primary research/data: If answer from secondary research not enough
- Survey or observation to figure out the problem (with customers)
17
Q
What is secondary research? List two internal and two external sources. List two advantages and two disadvantages.
A
-Secondary research draws on existing data Internal sources: - Business statistic (sales data) - Customer feedback (complaints) External sources: - Information about competition (media, annual reports) - Statistics from the market (research institutes) Pros of secondary research? - Cheap - Fast to do Cons of secondary research? - Up to date? - Fit for relevant purpose
18
Q
What is “non-experimental observation”?
A
- Qualitative form of primary research
- Watching an analyzing the actions of research subjects in nature or staged condition
- Respond to stimuli
- Example: cookie tracking, customer loyalty programs
19
Q
A theme park is looking for a new sound system for one of their rides. They visit several other locations to compare different systems. The ride will be redesigned for then new sound system and the sound system will have to be synched to the overall theme park software grid. Which sector and business type does this describe? What is the appropriate consumer strategy?
A
- Business-To-Business
- Investment type (synched with software grid; integrated in ride, etc.)
- Needs to be installed on site
- Follow the customer strategy (customized 1:1 experience)
20
Q
Why are relationships so important in the industrial goods sector (B2B)?
Why are these difficult to build and to maintain?
A
- Typically, ongoing and long-term (contrast to other sectors)
- Geographical distances
- Language, culture, codes of conduct and behavior patterns
- Conflict and withdrawing from business relationships is common
21
Q
Describe the difference between the product and the system business type in the industrial goods sector (B2B)?
A
Product:
- prefabricated, standardized mass product
- Low to no individualism
- Typical export strategy can be applied (very comparable to private consumer)
System:
- Unknown consumer or specific market systems
- Products are interlinked and bought in gradual succession
- “Follow the customer” or customer segmentation strategy
- Market expansion connected with consumer
22
Q
Describe the difference between the system and the investment business types in the industrial goods sector (B2B)?
A
System:
- Unknown consumer or specific market systems
- Products are interlinked and bought in gradual succession
- “Follow the customer” or customer segmentation strategy
- Market expansion connected with consumer
Investment:
- Sold prior to manufacturing
- Assembled at the location of the consumer
- Very specific and customized (every product is customized)
- “Follow the customers”
- Project or process-based customer acquisition
23
Q
Explain the term “capacity management” when it comes to service organizations.
A
- Provision of staff and resources
- Adequate number of employees for securing the service provision
- Optimal level of quality while considering cost effects
24
Q
Which possible starting points to improve the service quality do you see for the personnel of a service organization? Describe three improvement measures.
A
- Granted adequate decision-making (empowerment)
- Motivation through incentive or target systems
- Management can set an example (leadership)
- Corporate culture
25
What is specific for the service provider compared to other industries?
Service providers must expand the marketing mix with additional 3 P’s:
- People
- Process
- Physical evidence
Product is intangible and therefore the perceived quality is based on the customer
26
Global segmentation of clients in B2B markets is different from consumer markets. There are qualitative and quantitative criteria used. Name two criteria each.
- Qualitative criteria:
- Values
- Policies
- Industries
- Quantitative criteria:
- Procurement potential
- Market power
- Ordering patterns
27
Explain the four dimensions of product innovation with an example.
- Subject dimension: Which consumers will find it innovative?
- The internet was new to everyone in the 90s.
- Intensity dimensions: How innovative is it?
- The internet is a completely new thing that has never existed before.
- Time dimension: When does it begin and end?
- The internet was recent and brand new for about 5-10 years.
- Spatial dimension: Where is the product new?
- The internet was new to everyone around the world (industrialized and developing countries)
28
What is a reverse innovation? Give an example.
- Developing a product tailored to the needs of a emerging or developing country and then offering it to industrialized nations.
- Water filtration systems can be developed for African countries where there’s no supply of fresh drinking water. This system can be sold for campers in industrialized countries or for markets with bad water quality.
29
What is a trademark?
- Trademark refers to a typographic design (logo) and/or visual design of the brand name.
- The trademark is strongly linked to the brand name.
30
What is a multiband strategy? Name 3 pros and 3 cons.
- One product sector has several brands operating within them and all of them are on the market simultaneously.
- Pro:
- High market exploitation
- Possibility to keep customers who may consider changing
- Cover a lot of shelve space
- Weak negative spillover
- Cons:
- Risk of oversegmenting
- Cannibalization
- Low market share
- Low economy of scale effects
31
What is a family brand strategy? Name 3 pros and 3 cons.
- Several products are offered under a consistent brand, hybrid form of single brand and umbrella brand
- Pro:
- High brand exploitation
- Lower risk of failure
- Strong acceptance in trade sector (lower risk in stocking)
- Transfer of brand affinity
- Cons:
- Negative spillover effects
- Coordination needs
- More difficult to achieve unambiguous brand recognition
32
What is a single brand strategy? Name 3 pros and 3 cons.
- A distinct brand created for each product
- Each brand targets a specific market segment
- Company name plays a less significant role (Ferrero)
- Pros:
- Specific positioning
- Potential for global/reginal brand
- Few negative spillover effects
- Few coordination efforts required
- Cons:
- One product bears cost
- Greater need for coordination between countries
- Lower flexibility of country specifics
- Amortization problem when life cycles are short
33
What is an umbrella brand strategy? Name 3 pros and 3 cons.
- All company products are sold under one brand
- Pros:
- New target groups are addressed by market expansion
- Country specific differentiation
- Risk of failure is decreased
- Strong acceptance
- Products share cost of brand
- Cons:
- Negative spillover effects
- Many brand-specific coordination needs
- Risk of substitutions
34
Explain the core, tangible and augmented product benefit with the help of an example.
- Core: concrete benefit, that is expected by consumers, purpose of purchase
- Tangible: additional benefit extends beyond core. Prestige and aesthetic benefit (like design, features and appeal)
- Augmented: related services (customer service, financing options, consulting, shipping option, etc.)
35
What types of benefits does a product have? Describe them.
- Core: concrete benefit, that is expected by consumers, purpose of purchase
- Tangible: additional benefit extends beyond core. Prestige and aesthetic benefit (like design, features and appeal)
- Augmented: related services (customer service, financing options, consulting, shipping option, etc.)
36
What does “made-in” and “made-by” mean?
- Made-in:
- Country of origin effects – more important for companies with global orientation than home country orientation (original image is blurred)
- Positive or negative connections possible
- Shift to made-by:
- Strong brands
- Connected to brand image of the home country (Ralph Lauren, Ikea)
- Building a strong image
37
Why might products have to be adapted in order to sell them in other countries?
- Legal regulations
- Safety regulations
- Standards (cultural, region specific, etc.)
38
What does product differentiation mean?
| What are the respective levels?
- The process of changing the features of a product to develop it for a specific target group
- Different levels:
- Product variants for each country segment
- Country-specific product variant in every target country
- Limited number of product variants for comparatively homogenous country groups
- Several product variants for cross-country target groups that have similar needs regardless of where they live
39
You sell milk. Consumers in one market prefer low fat, another whole milk. Which measures would you take regarding the product portfolio of your company?
- Reducing the product range: offer only stars in each market
- Reducing the width or depth of the product range: eliminate unnecessary “in-between” products
- Differentiated products: High degree of country-specific adaptation
40
What is competition-based pricing?
- Prices are based on competitions pricing strategy
- Either adjust prices according to competitor (defensive strategy)
- Alter strategy to its competitors (aggressive market development strategy)
41
What is demand-based pricing?
- Determining prices based on observing consumers
- Markets buying power, willingness to pay, etc.
- Price threshold approach, Price corridor approach, Microeconomic approach
42
What is cost-based pricing?
- Prices are based on cost accounting information: cost of production + fixed amount of percentage profit
- Used for determining lower price limits
- Easy to apply, inexpensive and used for simple export businesses
43
What environmental factors influence international pricing strategy?
- Inflation and currency effects
- Tax differences
- Sales channel differences
44
What are consumer-related factors related to international price discrimination?
- Image
- Levels of buying power (economics in countries)
- Similarity in willingness to pay (buyers’ preference)
- Arbitrage tendency
45
Explain price discrimination in an international context.
- Strategy that acknowledges differences in national markets and adjusts prices accordingly
- Determining the approximate national demand for each product (expert evaluations, surveys etc.)
- Only when no strong interdependencies between established national markets and consumer-related factors
46
What are additional costs in international pricing?
- Overcoming trade barriers (additional procurement and distribution costs)
- Higher costs for order fulfillment
- Logistics or contractual requirements
- Product modifications
- Foreign trade risks (insurances to avoid them)
- Exchange rate and inflation
47
What is price dumping? What forms are possible?
- Act of exporting products to a country at very low prices (below the standard price or below the production cost)
- Penetration dumping, defensive dumping, cyclical dumping, unintentional dumping
- Might be forbidden is countries
48
What is a joint venture and what are the pros/cons for it as market entry mode?
- Two or more partners contribute funds, expertise and often shares (companies having a baby – separate companies)
- Pros:
- Shared risk
- Complementary resources
- Cons:
- Higher capital investment
- Hard to find good knowledge transfer
- Cost for integration and coordination
49
What is direct export and what are the pros/cons for it as a market entry mode?
- Sales without intermediaries (representative offices, branch offices, sales offices)
- Exporter selling directly to importer
- Agencies or permanent establishment
- Pros:
- Lower capital investment
- Economies of scale
- Internet as means of communication
- Cons:
- Dependency on partners (Importers)
- No own market knowledge (Knowledge with Importers)
- Transport cost and trade barriers
50
What are the criteria determining the choice of market entry mode?
- Control: To what extent can we influence the market?
- Transfer and contribution of capital: To what extent is capital transferred?
- Focus on value added: When distribution is transferred, is the value added transferred as well?
- Transaction cost: What are the costs with transactions?
51
What is a subsidiary and what are the pros/cons as a market entry mode?
- Direct investment in the market without any partners (starting your own company in the foreign market)
- Pros:
- Full control
- Direct access to market
- Quick market entry with flexible adjustments
- Existing networks and relationships can be used
- Cons:
- High capital investment
- High risk
52
What is vertical integration in international marketing?
- Vertical integration = Manufacturer owns the whole distribution system and is operating without intermediaries
- Guarantee a certain brand image
- Avoids knowledge drain
- Combines the benefit of direct and indirect distribution (influence on customer and cost advantages, business relationships, synergy effects, customer loyalty)
53
When designing distribution channels, which steps should be followed?
- Vertical selection: institutions to be used should be selected (e.g., direct sales, wholesale, retail, importer) Direct vs. indirect
- Horizontal selection: Number of distribution institutions for each stage should be selected (e.g., single channel vs. multi-channel)
- Contractual agreements: Organization and intensity of the cooperation
54
What are the pros/cons for direct and indirect distribution channels?
- Pros direct:
- Direct customer contact = better service
- Identify problems and requests early on
- Cons direct:
- Many small clients
- Low sales volume per customer
- Product range might need to be expanded
- Responsible for advertising
- Pros Indirect:
- Intermediaries have market knowledge
- Advertising mostly done by intermediaries
- Few big clients with high volume
- Cons indirect:
- Not aware of market changes
- Distance to customer (no market access)
- Exclusive contracts (distribution channel issues)
55
What are the steps for an exemplary market entry strategy?
1. Sporadic export, week relationships to the foreign market
2. Direct, active exports with intermediaries, licensing or franchise agreements; national and international business remain separate
3. Joint ventures, export division is replaced by an international division; different markets not fully coordinated
4. Many foreign markets, network of worldwide goods and services to manage international and national activities; domestic market loses importance; reorganization towards international structures
56
Why is market transparency a critical success factor when using the internet for international distribution?
- Challenge: taking advantage of regional or national differences on interdependent markets
- Internet can cause problems due to universal access to information market transparency
- Market transparency pressure to differentiate prices
57
Describe the design of the 4 Ps for a company with a home country orientation.
- Product: transfer largely unmodified products from domestic markets = ethnocentric approach
- Price: international standardized prices (ex-works)
- Promotion: same message and media (provided they are understood)
- Distribution: transfer domestic distribution strategy; aim for international standardization
58
Describe the design of the 4 Ps for a company with a multinational orientation.
- Product: Adapting products and services to the condition and demands of local markets
- Price: affected by different factors in each of the national market high price discrimination
- Promotion: adjusted and suited to the local conditions
- Distribution completely customized to the country
59
Discuss advantages and disadvantages of multinational orientation.
Pros:
- Better understanding the local markets + requirements (higher market development)
- Increased market share and sales
- Local customers feel more connected (local image)
Cons:
- High cost for market research
- Product development, manufacturing costs are high
- Potential duplication of efforts (cost and processes)
- Neglecting growth potential due to intensive resource use
- No leverage of local expertise
60
What is the “modular design approach” when selling products in other markets?
- Used when consumers in different countries have the same requirements for a given product
- Specific product components are alerted only due to technical or legal requirements
- Core product can be adjusted by separately assembling specific component
61
Explain “ethnocentric standardization”, “ex works” and “ethnocentric promotion”. What market orientation do they belong to?
- Home country orientation
- Ethnocentric standardization: transfer largely unmodified products from the domestic (home country) to the foreign market
- Ex-works international trade term that defines all costs associated with transport are at the buyers’ expense (net price for production + all other cost)
- Ethnocentric promotion: promotion strategy based on the domestic market, but the marketing message needs to be applicable for the foreign market
62
What is built in flexibility?
- Relevant in global orientation
- Product standardization no adjustment planned design needs to accommodate a range of uses
- Regards to technical or legal regulations
- E.g., Hairdryer
63
A French salad shop wants to expand to the Chinese market. Which market orientation and marketing mix do you recommend?
- Multinational orientation
- Product: adapt products to local markets
- Price: adjustments are necessary
- Communication: adapt message and media
- Distribution: customized strategies
64
List four different types of trade agreements that resolve political-legal issues in international marketing.
- Common trade free markets (EU, Mercosur)
- NAFTA (North American Free Trade Agreement)
- GAFTA (Greater Arab Free Trade Agreement)
- ASEAN (Association of South East Asian Nations)
65
What market segmentation strategies can be applied?
Multinational market segmentation: Multi step process that focuses on the differences of countries. First select the country with potential to develop; second customers are segmented.
Global segmentation: One-step approach without choosing national markets. Focus on cross-national sociodemographic, psychographic and behavioural characteristics and uses those to segment. E.g. Lifestyle (values, behaviour)
66
In a multinational market segmentation, which market-segmentation criteria can be used? Name at least 4.
Economic variable: GDP, income per capita
Sociodemographic: Age, birth rate
Political/Legal: Stability of government, investment security
Geographic: Quality of transportation routes
Technological: existence of broadband networks; infrastructure network
Cultural: Hosted (power distance, masculinity, etc.)
67
What are criteria for evaluating market attractiveness?
```
Market growth
Political stability
Population growth
Market volume
Price level
```
68
What are criteria for the evaluation of barriers to enter a market?
```
Norms and standards
Language
Customer loyalty
Economies of scale (competitors)
Regulations
```
69
How can B2B markets be segmented?
Fewer potential customers to analyse.
Three options can be differentiated:
1. Producers offer standardised product ranges and have comparatively large customer groups --> Approach similar to customer segmentation
2. Producers offer rather differentiated product ranges with only few customers --> Target group across border by concrete customer contracts
3. Producers with less fixed customers --> Not segmented at all ("follow the customer")
70
What are different types of market entries?
```
Direct Export
Indirect Export
Licensing
Francising
Contractual manufacturing
Joint venture
Subsidiary
```
71
How do you evaluate a market entry strategy?
1. Consider pros/cons of differentiation and standardisation
2. Gather information (market research) and combine with competences and resources
3. Evaluate degree of control in foreign market
4. Evaluate market entry type with corresponding risk
72
What are evaluation criteria for market entry strategies?
```
Advantages through standardisation
Advantages through differentiation
Risk
Control
Dependency
Resources
```
73
What is a "cross-national-timing-strategy"? Which types are there? Name two pros and cons each.
Decides on the market entry strategy concerning time (coordination of different market entries).
Which sequential order to we use to enter? Do we enter all at the same time?
- Waterfall: Gradually go into one market and establish before going into the next.
Pro: low risk; low cost
Con: Loss of market share elsewhere; copycats
- Sprinkler: Go into several different countries at the same time.
Pro: Build market entry barrier for competitors; gain market share fast
Cons: High risk, cost; High coordination effort
74
What is a "country-specific-timing-strategy"? Which types are there? Name two pros and cons each.
Decides which strategy to apply when acting on a national market.
Pioneer: Be the first type of company to expand to a market
Pro: Innovative, strong brand/image
Cons: high risk if failure, high cost; limited knowledge
Follower: Follow an established competitor into a market
Pro: Market knowledge of competitor; lower market development
Cons: entry barriers of pioneers
75
What are "barriers to exit"?
Economic barriers: asset durability and intensity of capital activities; binding contracts; sunk cost
Strategic barriers: close vertical integration; customer and supplier power
Management-related barriers: personal and company image
76
What is "sunk cost"?
Cost to enter a market by establishing infrastructure and start up business activities.
When exiting a market sunk cost cannot be fully recovered by selling assets.
Exogenous (tangible) sunk cost: External cost for startup and building infrastructure
Endogenous (intangible) sunk cost: Internal cost related to strategies to stimulate demand. (fixed capital, production expertise, market research)
77
What are the functions of market research? List at least 3.
Stimulating function: Stimulus for new marketing decisions
Predictive function: Estimate changes in market-relevant factors and their potential impact.
Evaluative function: Support for decision-making process (choose alternative market approaches)
Controlling function: Collect information about the position in the market and effectiveness of marketing measures.
Affirmative function: Provide insight into what has led to specific results.
78
What kind of industrial goods producers can be classified? How do you market to them?
Product: standardised products are purchased (very little to no adaption) --> typical exporting strategy (potential of market and market attractiveness)
Investment: complex products which are installed on site and sold prior to manufacture --> "Follow the customer"
Systems: supply products to unknown customer or market segments. Products are interlinked and designed to be bought in gradual succession. --> select markets with growth potential or follow market expansion with respective customers
Supply: supply specific individually developed products to customer. --> customer/market potential or "follow the customer"; long-term business relationships very important
79
What is a vertical marketing system?
Members of a distribution channel (producer, wholesale, retail) work together to meet the consumers needs.
In contrast to conventional marketing systems, where they focus on maximising their individual profit.
80
What is referred to when using "position of power" in marketing?
Position of power classifies the dominant role in many business relationships. Usually it is characterised by information advantages due to customer contact (direct relationship with consumers e.g. POS, Loyalty card)
81
What is "controlled distribution"?
Tightly controlled and coordinated sales activities.
Increased verticalization of business activities.
Strengthen the image of the producers.
82
What are the advantages of controlled distribution?
```
Securing the brand image
increasing the customer trust
securing POS quality
time to market reduction
independence of distribution partners
securing target group congruence between product and POS
faster, efficient flow of physical goods
```
83
In the service sector, what are measures to improve service quality?
People:
- decision making power (empowerment)
- Motivation through incentive systems
- Desirable corporate culture
Process:
- Clear responsibilities of staff to take on tasks
- Documentation/standardization of tasks
- Flexibility (customer orientation)
Physical evidence:
- physical location can be improved (appearance)
- lack of transportation (regular setup of transfers)
- Company image (clothing of staff)
84
List the phases a products can be in. How can you figure out in which phase a customer is in?
Awareness: Knowledge about product
Interest: interested; more info is required (price, quality, features)
Evaluation: compare and evaluate competitive products
Trail: testing phase
Adoption: purchasing decision
Market research to gain infos about customers (e.g. demographic, socio-economic and psychological)
85
What does the term "diffusion of innovation" refer to?
Pattern of product adoption for innovations.
Focus on so-called "innovators" and "early-adopters" to accelerate the diffusion of innovation in the market as these groups are opinion leaders and experts and will promote the product through word of mouth.
86
What are the requirements for products to be transferred as measure of standardisation?
Company needs to be active in few, homogeneous markets.
Products cannot be strongly connected to cultural features.
Product mix is relatively limited.
87
What types of product standardisation can be applied? Provide an example for each.
Built-in flexibility: Designed for different technological environments (e.g. Hairdryer switch for 110, 220V power outlets)
Modular design: Different assembly processes and steps for specific countries (e.g. Cars for different safety regulations)
Standardised: Completely identical products in all markets (e.g. Webcam, Mouse)
Differentiated profits: High degree of country-specific adaptation (e.g. Washing detergent for specific washing behaviours)
88
What is referred to as "brand range"?
Refers to extent of the geographic region of a brand. Brands can be designed for specific regions (e.g. regional brand; local brand; national brand; international brand)
89
What is the "brand positioning"?
How can it be influenced?
List two types of positioning strategies.
Refers to brands position on the relative market in terms of the customers perception of the brand.
Through functional (durability, functionality) and emotional (exclusiveness, fun) features.
- Point of difference positioning (differentiation strategy) --> Focus on distinguishing brand from competition by standing out
- Point of parity positioning (similarity strategy) --> Focus on being the same or similar to competitive brands with the goal of using spillover effects.
90
Which aspects need to be considered in international branding?
Branding = Brand name and trademark (logo).
1 Branding should contribute to the desired position on the market
2 Brand name and trademark should follow good design principle (easy to understand and memorise)
3 Brand name and trademark should contribute to differentiation from competitors (avoid confusion)
4 Brand name should be easily pronounceable
5 Brand name and trademark should be interpreted correctly, understood and accepted in all languages and cultures.
91
How are prices defined in international marketing?
Based on target price positioning in the respective markets. After that individual prices can be defined.
Price-performance (cost-benefit) aspects consider price in relation to service. Both are analysed in relation to the competition.
92
What is a "customer preference strategy"?
Premium Price position which focuses on customers paying more for high-quality services.
93
What is a "price lining policy" and why is it important?
Price lining policy defines products within a product line are being set at different price level. (e.g. economy, standard and premium/limited edition)
It is important as prices need to be evaluated based on the reletive perceived price/preceived service (competition) as well as the overall product range of a company (economies of scale effects).
94
What are the international basic pricing approaches?
Cost-based: Prices are set based on the corresponding cost of production plus a specific percentage amount of profit. --> easy and fast to do
Demand-based: Prices are set based on customer observation methods. This factors in different willingnesses to pay a specific price. (price threshold, price corridor approach or microeconomic approach) --> Extensive market research required
Competition-based: Prices are based on the strategies of competitors (cross-country or national). Adjust price to competitor (=defensive pricing strategy) or aggressively undercut competitor (=aggressive market development)
95
What is the purpose of credit policies? Name three examples in international trade.
Goal is to lower the financial burden when a customer purchases a product. Payment upon order completion is uncommon therefore financing options are much more relevant and are part of a augmented product benefit.
Short term foreign trade financing:
- Export: Pre-Payment, bank credit, export factoring
- Import: down payment, draft credit
Medium- and long-term foreign trade financing:
- Export leasing, credits from export credit companies
96
How can promotion policy be standardised?
- using transnational competences (in-house creative know-how of staff)
- bundling of financial resources (marketing budget does not have to be split)
- using international media
- spillover effects: ads are easily visible by neighbouring countries
97
What are the tasks of international public relations? What kind of objectives can be identified?
Minimise potential for conflict between country and company.
Promote the company image as a whole.
- identification of the interest of the countries of the potential customers
- development in those countries
- good contacts with government offices
- respecting cultural and social differences
- promoting the company image
- emphasizing on the independence of foreign branch offices to their HQ
98
What is international sales promotion? Name three examples.
short-term, temporal instrument designed for a local context.
- direct sales assistance (leaflets, catalogues)
- personal incentive schemes (sales competitions)
- maintaining contact on individual level (visits, gifts)
99
What is the goal of international direct marketing? List three different examples.
Dynamically, individually address marketing to customers.
Goal: information brokerage, increasing customer interest and eventual acquisition of new customers.
- Passive direct marketing: attention of customers is drawn to service (e.g. ad letter, catalogues)
- direct response marketing: after approach, possibility to respond (e.g. reply cards)
- interactive direct marketing: direct dialogue with customer (e.g. telemarketing, e-mail)
100
What is the optimal standardisation in international promotional mix?
What is the problem?
Point at which marginal cost savings of standardisation intersects with loss of effectiveness (decrease in revenues).
Optimal standardisation most of the time not possible (cost = easily measurable; effect = very hard to measure). Companies hypothetically assure optimal level. Effectiveness of promotional activities and relation to economic parameters are not easily defined --> empirical research
101
How can companies figure out the relation of promotional activities and economic success?
All promotional activities (short and long term; pre-economic variables) need to be taken in to account.
Long-term strategic performance parameter:
- Consumer-related pp: measures the effect of promotional activities of the consumers perspective of brand value (e.g. brand awareness, image, satisfaction, trust)
- Company-related pp: based on the consumer-related pp but includes factors indicating customer loyalty (e.g. repeated purchases, recommendations, willingness to pay increased prices) with direct connection to economic success parameters (sales, profit contribution, market share)
102
What are the functions of the internet in distribution policy?
Marketing tool with constantly evolving means for communication (interactive).
virtual marketplace for goods that can be delivered directly through the internet.
103
What are the critical success factors of the internet as an internatonal distribution method?
- Accessibility: effectively navigate through it
- Cultural influences: acceptability to buy online (behaviour); historical preferences
- Negative feedback within the distribution system: fear of replacement of distribution partners (intermediaries) - exclusive contracts
- market transparency: taking advantage of information availability (comparable with competitor)
- mobile applications: more interactive; customer reviews; info from other customers rather than company itself
- cost: revenue-related effects of maintaining a website
104
What are potentials for standardising international distribution?
Design of the distribution channel.
Mostly reliant on positioning on cross-markets.
Potential if markets are homogenous otherwise very hard.
Authorised dealer system:
- Great potential for standardisation
- contractually obliged to design distribution policy as defined by the producer
- sell in their own name with own design
- purchase minimum quantities (contract)
E-Commerce:
- B2B; B2C; C2C
- standardised extensively across market with use of internet
- functionality, design, product presentation is standardised
- catered for country-specifics: e.g. language, detail, payment options
- Problem: price discrimination
105
Can personal sales as distribution policy be standardised?
No, must be viewed very critically. Personal sales is closely connected with countries culture and market characteristics.
Silent language plays a significant role:
- Spacial factor: status symbols; hierarchie
- temporal factor: punctuality
106
Why are international business activities increasing? List at least 3 reasons.
Result of increased interconnectedness of national economies.
- creation of economic and monetary unions
- decrease in. trade tariffs and establishment of free trade zones
- companies are becoming more mobile
- barrier-free communication across national borders (technology)
107
What is "economy of scale"?
Main target of company goal to gain advantageous financial positions on markets.
Infrastructure cost spread on higher sales volumes = greater distribution of fixed cost = lower marginal cost per unit
108
What is the Hofsted Model and why is it relevant in international marketing?
Used to characterise the different cultures of a country:
- Power distance (high power = uneven power distribution / low power=egalitarianism)
- Individualism (high = bonds between members are lose / low =collectivism)
- Masculinity (high = firm line / low = modest and care taking)
- Uncertainty avoidance (high = easily threatened by change / low = risk taking)
- Long-term orientation (high = future orientated / short-term = past/present)
Very integral part of the socio-cultural environmental factors in international marketing.
109
What is a buying centre and which roles can people acting within it take?
Buying centre = centralised procurement of products
Pro: Bundle resources; negotiate internationally; price benefit trough higher volume
Roles: user, buyer, influencer, gatekeeper, decision-maker
110
How can individual buying behaviour be classified?
Different buying behaviours are a result of differences of socio-economic structures and values.
Classifiable through Sinus-Milleus that defines different buying behaviours of groups (e.g. middle-class, traditional milieu)
111
What is the purpose of discounting policies?
Leverage psychological effects (better treatment)
Make customer feel special
Increase loyalty, percentage of sales and image
Eliminate arbitrage tendencies
May be subject to regulations.
112
How are distribution policies defined in the multinational orientation?
- Highly customised strategies tailored to the market.
- Decisions about "horizontal and vertical distribution.
Following factors influence it:
- Product-related: Explanation, storage
- Consumer-related: market volumes, geographic, buying habits
- Competition-related: type and number, distribution channels
- Intermediary-related: financial power, size, strategic importance
- Societal and legal factor: opinions, moral concepts
113
When standardising the international product mix, special importance lies on the benefits of the product. Why?
Benefits must fit to the national market.
Core: basis for positioning in market and developing of other benefits (regulations legal, safety or technological)
Tangible: cultural and socio-demographic adaptation (e.g. kosher food); prestige benefit (differences in socio-cultural aspects - masculinity, etc.)
Augmented: completely country specific (direct contact)
114
What are the main objectives of international promotional strategies?
Influence knowledge levels
Expectations
and consequently the behaviour of target audience
115
What are typical tools in the international promotion mix?
Direct (face-to-face)
- unilateral: direct ads, sales promotion, POS ad
- bilateral: fairs, events, PR
Indirect (mediated)
- unilateral: sponsoring, product placements, media ads
- bilateral: call centres, Web 2.0, direct response measures
116
Which kind of marketing communication measures are available? Which one should be preferred nowadays and why?
Above the line (no target group - broadcast to everyone)
Below the line (targeted towards potential customers group)
Nowadays preferred below the line due to information overload.
Targeted through internet (mobile games, mobile marketing, Facebook, Google etc.
117
What are important aspects when designing advertising messages?
Clear message, easy to understand
Supported by technical components (images, tones, colours)
Appeal to consumer
Different cultures = different levels of info
- detailed vs. simple
- type of expected info varies: quality, price, features
!! Texts and slogans should not be used in their original form (language)
118
What are different ad media types? What vehicles can be utilised?
Choosing the right ad media type within a medium.
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Conventional vs. new media (integrated and interactive)
Multimedia ads:
- online platforms
- mobile storage media
- kiosk systems
- mobile communication media
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119
Explain price discrimination in an international context.
Price discrimination is a strategy that acknowledges differences in national markets and adjusts the prices accordingly in order to benefit from the fact that customers on the different markets are willing to pay different prices .
120
What is the price discrimination approach based on?
| Which information is required?
This approach is based on determining the approximate national demand for each product.
With the help of expert evaluations, customer surveys using conjoint analysis, and analyses of historical market data.
121
Under which circumstances can price discrimination strategies be pursuit?
This type of price determination can only be implemented when there are no strong interdependencies between established national markets and consumer-related factors.
122
What factors influence price discrimination and standardisation?
- Consumer-related factors (image, levels of buying power, similarity of buyers preferences: willingness to pay, arbitrage tendencies)
- Company related factors (cost)
- Competitor related factors (competitive situation, re-import)
- Environmental factors: (inflation and currency effects, tax differences, sales channel differences-margin)
123
What are factors for price differences in a multi national orientation?
- economic development and buying power
- political and currency risk
- rate of inflation
- legal framework (e.g. maximum price by state)
- role of prices and money in society (money taboo)
- role of prices as key stimulus (price sensitivity)
- perception and assessment of prices (according to culture)
- willingness to pay (product correspond to values)
124
What are grey markets?
How are they created?
What different forms of grey markets are there?
Goods are legally sold outside of the company's distribution channel.
They are a result of national price differences of traders or consumers.
Forms:
- Parallel imports = non-authorized exports: price in home country is lower as on foreign markets
- Re-imports = non-authorized imports: price in foreign market is lower than on national markets
- Lateral grey markets = home country exports to second then to third country - hardest to control and manage
