International Marketing Exam Questions Flashcards
What is competitor feedback?
- Information about the strategy and operations of companies providing similar products.
- What competitors are on the market?
- What do they offer on the market?
Explain competitor feedback. Can competitors ever become allies?
- 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)
What is supplier feedback and why is it important in international marketing?
- 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)
Describe three company goals.
- Market position (sales, market share)
- Cost (productivity, efficiency)
- profitability (turnover-profit relation)
- Financial goals (liquidity)
- Social goals (satisfaction, job security)
- Prestige goals (image)
Why are company goals important in the internationalization process of organizations?
- 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
How does consumer feedback occur regarding international markets?
- Consumer preferences
- Spread of consumers
- Buying behavior
- Cross-border exchange of information and goods (cooperation-related dimension)
How does consumer feedback influence the globalization of markets?
- 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)
Explain three factors from an international business’ environment with the help of examples.
- Technological: voltage of power outlets is different
- Political-legal: sanctions, type of government
- Socio-economic: culture, customs, habits of consumers
What are the tasks of international marketing?
- Accessing or managing relevant feedback (supplier, consumer, competitor)
- Coordinating national marketing activities
- Optimizing profits across national markets
What is the BERI Index?
- 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
What are relevant factors for the BERI?
- investment risk
- political risk
- operational risk
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
- Procedure:
- Multiply (low 1x, medium 2x, high 3x)
- Barriers: lower is better
- Attractiveness: higher is better
- Subtract Attractiveness – Barriers
- Highest Result is the best
Your marketing research department suggest using observation as technique. You’re not sure and would prefer surveys. Name three possible reasons why.
- 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
What are pros of observations compared to surveys?
- 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
What are advantages of written surveys vs. in-person surveys?
Written survey: - Easy to conduct - Limited range of issues - Anonymous - More honest answers In-person: - Controlled situation - Additional explanations - Control of course (contextual depth)
One Location of your business has a very low turnover. Which market research tools would you use to shed light on the situation?
- 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)
What is secondary research? List two internal and two external sources. List two advantages and two disadvantages.
-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
What is “non-experimental observation”?
- 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
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?
- 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)
Why are relationships so important in the industrial goods sector (B2B)?
Why are these difficult to build and to maintain?
- 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
Describe the difference between the product and the system business type in the industrial goods sector (B2B)?
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
Describe the difference between the system and the investment business types in the industrial goods sector (B2B)?
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
Explain the term “capacity management” when it comes to service organizations.
- Provision of staff and resources
- Adequate number of employees for securing the service provision
- Optimal level of quality while considering cost effects
Which possible starting points to improve the service quality do you see for the personnel of a service organization? Describe three improvement measures.
- Granted adequate decision-making (empowerment)
- Motivation through incentive or target systems
- Management can set an example (leadership)
- Corporate culture
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
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
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)
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.
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.
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
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
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
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
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.)
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.)
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
Why might products have to be adapted in order to sell them in other countries?
- Legal regulations
- Safety regulations
- Standards (cultural, region specific, etc.)
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
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
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)
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
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
What environmental factors influence international pricing strategy?
- Inflation and currency effects
- Tax differences
- Sales channel differences
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
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
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
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
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
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
