Lecture 9

Question 1

What are the main marketing mix decisions that international companies need to make?

Answer 1

Adaptation or standardization

Question 2

What are the three ways in which a product may be sold globally?

Answer 2

• In the same form as the home market
• With some adaptations
• As a totally new product

Question 3

What are the pros of standardization?

Answer 3

• Economies of scale
• Lower cost
• Consistency in brand image
• Uniformity of marketing practice

Question 4

What are the cons of standardization?

Answer 4

• Differences in consumer needs, wants, and usage patterns for products
• Differences in consumer response to marketing mix elements
• Differences in brand and product development and the competitive environment

Question 5

What is product extension?

Answer 5

• Selling virtually the same product in other countries
  
  • It works well because it has enormous appeal to global companies because of cost saving

Question 6

What is product adaptation?

Answer 6

Involve altering the product to meet local condition or preferences in order to appeal to the local culture

Question 7

What is product extension - communication adaptation?

Answer 7

• In some instances, a product fills a different need, appeals to a different segment or serves a different function outside the home-country market
  
  • Whatever the reason, it may be possible to effectively market the identical product by adapting the marketing communications program
• In some instances, the product extension - communication adaptation strategy - can result in a different positioning for the product
  
  • The same physical product ends up serving a different function or use than that for which it was originally designed or created

Question 8

What is product invention?

Answer 8

• Product invention consists of creating something new. It can take two forms:
  
  • Backward invention which is reintroducing earlier products forms that are well adapted to a foreign country’s needs
  • Forward invention which is when we create a new product to meet a need in another country

Question 9

What is communications?

Answer 9

• Companies can run the same marketing communications programs as used in the home market or change them for each local market, a process classed communication adaptation
  
  • If it adopts both the product and the communication, the company engages in dual adaptation

Question 10

What is price?

Answer 10

When companies sell their goods abroad, they face a price escalation problem

Question 11

What is the grey market?

Answer 11

A grey market, also called parallel importing, is a situation where products are sold through unauthorized channels of distribution

Question 12

What is the waterfall model?

Answer 12

• Typical pattern is to introduce the new product first in the company’s home market
• Next innovation is launched in other advanced markets
• In the final phase, the multinational firm markets the product in less advanced countries

Question 13

What is the sprinkler strategy?

Answer 13

• Simultaneously worldwide entry
• The global rollout takes place within a period of one to two years
• The growing prominence of universal segments and concerns about competition in the foreign markets are the two major factors behind this expansion approach