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Marketing > Tapping into Global Markets > Flashcards

Tapping into Global Markets Flashcards

1
Q

Competing on a Global Basis

A
  • Global industry

* Global firm

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2
Q

Global Industry

A

Competitors’ strategic positions in major geographic or national markets are affected by their overall global positions

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3
Q

Global Firm

A

Operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages not available to purely domestic competitors

If you have different functions in different countries (e.g.: R&D in Japan, Marketing Department in Austria, …)

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4
Q

Decisions in International Marketing - Deciding how to enter the market

A

The 4 Ps (MM) turn into 4 Cs:

• Product turns into a Customer solution
(You adapt the packaging, size, language > it is not the same product anymore)

• Place turns into a Customer convenience
(distribution differs from country to country)

• Price turns into Customer willingness to pay
(there is no world price on this planet, it adapts as well)

• Promotion turns into Customer communication
(what attracts customers differs from country to country as well)

!!!! There is no final marketing organization, it changes over time and never stays the same !!!

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5
Q

Decisions in International Marketing - Deciding wether to go abroad

A
  • Factors that draw companies into the international arena

* Before deciding to go abroad, the company must also weigh several risks

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6
Q

Factors that draw companies into the international arena

A

o Some intern. markets present better profit opportunities than domestic market

o Firm needs larger customer base to achieve economies of scale

o Firm wants to reduce dependence on any one market

o Firm counterattacks global competitors in home markets

o Customers going abroad require international service

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7
Q

Before deciding to go abroad, the company must also weigh several risks

A

o Firm might not understand foreign preferences, failing to offer competitively attractive product

o Firm might not understand foreign country’s culture

o Firm might underestimate foreign regulations and incur unexpected costs

o Firm might lack managers with international experience

o Foreign country might change commercial laws, devalue currency, or expropriate foreign property

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8
Q

Internationalization Process

A

Stage 1: No export activities

Stage 2: Export via independent representatives

Stage 3: Establishment of sales subsidiaries

Stage 4: Establishment of production facilities abroad

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9
Q

Influence Factor Digitalization

A

Digitalization is disruptive.

Companies realized you need to be a big player within your industry. Success means to be big, quick, dominant, e.g. Facebook bought schülervz because they wanted to be the only player in their industry

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10
Q

Decisions in International Marketing - Deciding Which Markets to Enter

A

How many markets to enter:
• Waterfall Approach
• Sprinkler Approach
• Born Global

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11
Q

Waterfall Approach

A

Expanding to one country after another

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12
Q

Sprinkler Approach

A

Realizing you have a great business idea, you quickly buy all companies in this area to be dominant

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13
Q

Born Global

A

You have a great idea and you find a big investor and as you start the idea, you go in a lot of countries instantly (mostly in gaming industry). Aim: to be very fast and dominant

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14
Q

Evaluating Potential Markets

A
  • Neighbouring countries
  • Psychic proximity/cultural distance
  • Fewer countries
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15
Q

Succeeding in Developing Markets

A

• BRICS (Brazil, Russia, India, China, and South Africa)
Huge countries with high population, everyone needs own marketing strategy

• CIVETS (Columbia, Indonesia, Vietnam, Egypt, Turkey, and South Africa)

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16
Q

Market Profile Brazil

A
  • Biggest economy in Latin America
  • Sixth largest economy in the world
  • Fifth-largest country of digital users
  • High cost of transporting products
  • Crime and corruption exist
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17
Q

Market Profile Russia

A
  • Largest exporter of natural gas
  • Second-largest exporter of oil
  • Third-largest exporter of steel/aluminium
  • Make heavy use of social media
  • Dwindling workforce/poor infrastructure
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18
Q

Market Profile China

A
  • Largest auto market in the world
  • Emerging urban middle class
  • World’s top consumer of luxury goods
  • Fierce competition among foreign firms
  • Opaque and arbitrary bureaucracy
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19
Q

Market Profile India

A
  • Lively democracy/youthful population
  • World’s second most populous nation
  • One of the youngest large economies
  • Has fully embraced mobile technology
  • Poor infrastructure/public services
20
Q

Market Profile South Africa

A
  • Access point to the African region
  • Increasing discretionary income
  • Consumers are brand conscious
  • Increasing reliance on mobile phones
  • Logistical/infrastructure problems
21
Q

Market Profile Indonesia

A
  • Increasing political stability
  • Increasing economic growth
  • Largest Muslim country
  • Consumers are brand conscious
  • Distribution/infrastructure limitations
22
Q

Modes of Foreign Market Entry

A
  1. Direct investment:
    in the past, not all foreign direct investments were seen as good (bad working conditions, low salaries)
  2. Joint ventures:
    start a factory together (e.g.: in China, foreign companies must have a joint venture)
  3. Licensing
  4. Direct exporting:
    you start to go abroad and sell abroad
  5. Indirect exporting:
    you don’t actually export

Increasing from 1 to 5: Commitment, risk, control, profit potential

23
Q

Decisions in International Marketing - Deciding How to Enter the Market

A
  • Indirect exporting

* Direct exporting

24
Q

Indirect exporting

A

Working through independent intermediaries

o Domestic-based export merchants
o Cooperative organizations
o Domestic-based export agents
o Export-management companies

25
Q

Direct exporting

A

Handling one’s own exports

o Domestic-based export department
o Traveling export sales representatives
o Overseas sales branch
o Foreign-based distributors

26
Q

Licensing

A

Licensor issues a license to a foreign company to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty

27
Q

Joint ventures

A

Foreign investors have often joined local investors in a joint venture company in which they share ownership and control

28
Q

Direct Investment

A

The foreign company can buy part or full interest in a local company or build its own manufacturing or service facilities

29
Q

Acquisition

A

Acquiring local brands for their brand portfolio

30
Q

Deciding on the Marketing Program - Advantages

A
  • Economies of scale
  • Lower marketing costs
  • Power and scope
  • Consistency in brand image
  • Ability to leverage good ideas
  • Uniformity of marketing practices
31
Q

Deciding on the Marketing Program - Disadvantages

A
  • Differences in consumer needs, wants, usage patterns
  • Differences in consumer response to marketing programs
  • Differences in brand development process
  • Differences in legal environment
32
Q

Deciding on the Marketing Program

A
  • Global similarities and differences

* Hofstede, four cultural dimensions

33
Q

Global similarities and differences

A

The Internet, cable and satellite TV, and global linking of telecommunications networks have led to a convergence of lifestyles

34
Q

Hofstede, four cultural dimensions

A

o Individualism versus collectivism
o High versus low power distance
o Masculine versus feminine
o Weak vs. strong uncertainty avoidance

35
Q

Marketing Adaptation

A
  • Product features
  • Labeling
  • Colors
  • Materials
  • Sales promotion
  • Prices
  • Advertising media
  • Brand name
  • Packaging
  • Advertising execution & themes
36
Q

Global product strategies

A

Product standardization. Amazon is nearly the same everywhere all over the world

37
Q

Product & Communication Strategies

A

-

38
Q

Global product strategies

A
  • Product invention
  • Backward invention
  • Forward invention
39
Q

Backward invention

A

reintroduces earlier product forms well adapted to a foreign country’s needs

40
Q

Forward invention

A

creates a new product to meet a need in another country

41
Q

Three choices for setting prices in different countries

A

• Uniform price everywhere
• Market-based price
• Cost-based price
you introduce cost-covering prices. Then you increase them to market-based prices

42
Q

Global Pricing Strategies

A
  • Transfer price
  • Dumping
  • Arm’s-length price
  • Grey markets
  • Counterfeit products
43
Q

Dumping

A

enter a market and sell below current market prices so that competitors are killed

44
Q

Arm’s-length price

A

try to be different than competition

45
Q

Counterfeit products

A

(e.g. furniture market) price depending on the opinion on the product (e.g.: coconut chair is considered art in Germany -> cost: 4000-5000 €. Coconut chair is considered furniture in Italy -> cost: 200-300€)

46
Q

Global Distribution Strategies

A

• Channel entry

• Channel differences
Various distribution systems + Size and character of retail units

47
Q

Country-of-Origin Effects

A

Mental associations and beliefs triggered by a country

Marketing (13 decks)

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