Term Test Flashcards
what are the two main barriers to globalization?
- SRC
- Ethnocentrism
What is SRC?
it means self reference criterion: one’s own cultural values, experiences, and knowledge as a basis for decisions
What does ethnocentrism mean?
ones own culture or company knows best how to do things
why do src and ethnocentrism affect globalization?
they impede the ability to assess a foreign market in its true light
What obstacles does SRC product?
- meanings, values, symbols and behaviour that are relevant to our own culture are different from those of foreign cultures
- relying on Src could produced inadequately adapted marketing
How do we avoid obstacles of globalization?
- define the goal in foreign-country cultural traits, habits, or norms
- isolate the src influence on the goal
- redefine the goal without the src influence
what is key to developing a global mindset?
- being tolerant of other cultures
- understanding such differences and accepting and working with others?
What kind of knowledge is good for globalization?
- cultures
- history
- market potential
- economic, social, and political trends
what is a pack shot?
it is a still or moving image of a product
- includes its packaging and labeling, used to portray the products reputation in advertising on TV or other media
what are the 5 stages of internationalization?
- no international marketing
- infrequent marketing
- frequent marketing
- international marketing
- global marketing
what is the EPRG strategy?
E: ethnocentric
P: polycentric
R: regional
G: global
what is the “no international marketing” stage
- not interested in going abroad
- doing so can be very risky
- can be the case if you are already making money in your own market
- cost of expansion into other markets is costly
- # 1 reason, your home market is not saturated
what is the infrequent marketing stage?
- start to receive orders or demand from abroad
- even though sales can have “low seasons” production can not decrease
- when there is less local demand, that is when you would export
what is the frequent marketing stage
- demand abroad has increased since you have begun infrequent marketing
- you begin to sell abroad on a regular basis
- focus is still local
- covers 1 to 2 foreign countries
what is the international marketing stage?
- starting to expand to >5 countries
- have to make product changes for different markets
- export or manufacture abroad
- license, franchise
what is the global marketing stage?
- treat markets in all countries the same
- no changes to products “universal appeal”
- iphone, coca-cola
what kind of product needs to change in many markets?
food offerings (mcdonalds)
what product needs seldom change, if not any
electronics (iPhone)
what stages would use an ethnocentric strategy ?
none or infrequent
what stages would use a polycentric strategy?
infrequent or frequent
- means more than one, many markets
what stages would use a regional strategy?
international
- can be thought of as a continent, region of countries
what stages would use a global strategy
global stage, global brands
- apple, samsung, coca-cola, nike, bmw
what are the parts of the international product life cycle?
- export
- foreign production
- foreign competition
- import
what is a one-way export?
- exporting a product
- not importing anything in return
- not simultaneous
what is a two-way export?
- simultaneous
- exporting something
- importing something back
why would we import and export at the same time?
- for natural production as an example
- growing produce, when it is out of season we will need to import it
- when it is in seasons, we can export it
product-differentiation as a two-way export
- a good example is US car manufacturers.
- Jeep, Dodge, etc.
- However, they choose to import cars as well
What is a parallel import?
- distributors in one country sell in another country
- due to overstocking
- luxury product retailers do this
international product strategy examples
- language, packaging
- for sale in specific countries only
- product may not be suitable for another country
- warranty/repair is not transferable between countries
- close relationship with distributors
- retail price
- wholesale price
what is the retail coefficient?
the factor the production price, or acquisiton price, is multiplied by to create the retail price.
ex. $1 for pen production, retail coefficient is 2.8, retail cost in $2.80
how is the percentage of profit calculated?
selling price minus cost of acquisiton/selling price
ex. (2.80 - 1)/2.8
what are examples of promotions?
- 10% off
- BOGO
what is the contribution margin?
the amount of money made after cogs
- sell a product for 10, cogs is 3, so contribution margin is 7
what is a good idea for a logo?
- a universally understood term
- a stop sign, when we see a red octagon, without the word stop we think of stop sign
- female symbol, upside down cross with a circle on top
what does the “brand” serve the function of?
- years of advertising
- good will
- quality evalutation
- product experience
- other attributes the market associates with the product
- increase in travel by consumers
what do you need to attach a meaning, personality or brand?
you need to have a LOGO!
what is Saussure’s Theory
there is a signifier
- logo, Mcdonalds M
and there is the signified
- the message, the personality you can attach
- the meaning attached to it and the meaning underneath
in order to have a signified message there is 3 components of a brand you need
- symbol
- logo, we need to know if arbitraty - icon
- gives us a feeling, positive or negative - index
- lamborghini logo is a bull, what does that index?
- fast strong
what is a traditional store?
- over the counter
- think protected drugs you need to ask for
what is a modern store?
- can be online
- can be self serving
- think grocery stores (except for deli) etc
what are branded stores?
- stores like safeway or walmart
what is the biggest difference between traditional stores and modern stores?
- modern stores and branded stores have an overlap!
what are the 5 c’s of distribution?
- Character
- the physical properties of product (shape, size) - cost
- cost of distribution - coverage
- what percentage of the country do you want your product to be available in - continuity
- seriuos issue if family-owned. coca cola lured pepsi distributor in brazil, may not carry the line with less margin - control
- is it family owned? megastore?
what is the CALVO doctrine?
- if there is a dispute between the manufacturer and distributor then the dispute will be settled in the country of the distributor
how do we recruit and motivate distributors?
- locate them
go to the country and see, tradeshow, governments, third party recommendations - select them
go and see, trustworty, references, size of firm - motivate them
financial, psychological rewards (trips) - control them
measurable performance indicators, sales volume, market share - termination
easy in US, not in international markets
what are two other kind of stores?
-concession stores
- stores in stores (p.o. at shoppers)
what is a “counter” store?
a store that will do everything for you
what is a “corner” store
2 wall,
obviously to have a corner you need at least 2 walls
what is a “store in a store”
canada post inside shoppers, can also be called a concession store
what are common terms for fake products?
- counterfeit
- pirated
- imitation
- replica
what are the 5 stages decision making in international marketing?
- decision to go abroad
- select TME (shift-share, trade off)
- method of entry
- equity (IJV or FDI)
-non-equity (export or franchising) - overall strategy
- fall (pour all resources into one or selected markets)
- sprinkler (entering in many countries, in order to gain small footholds)
- sequence (able to integrate and optimize international operations between countries vs within a trading block - marketing strategy
what are the 7 P’s of the marketing strategy?
- product
- promotion
- place
- price
- people
- process
- physical evidence
what are the components of domestic market extension orientation (no international marketing, infrequent)?
- extension of domestic products into foreign markets
- international markets are secondary
- prime focus, market excess domestic products abroad
- firms orientation is domestic
what are the components of a multi-domestic market orientation (infrequent, frequent)
- realizes the difference b/w/ domestic and foreign markets
- different countries need different products
- seperate marketing strategies for each country
- subsidiaries operate independent of one another
- products are adapted, advertising is localized
- might not standardize products
what are the components of a regional/global orientation (stages regional and global)?
- truly global, single market
- emphasis on standardization, of both product and process
- strive for efficiencies of scale by standardizing market mix across national borders
- pursue a global strategy for major brands or multi-domestic strategy for other brands
what are the product components for adaptation?
- core component (intrinsic)
- Augmented product component (features)
- support services component (increase life)
what are examples of a core component?
- LHS driving in different countries
- different electrical outlers because of voltage
- metric or imperial system
what are examples of augmented product components
- packages
fight the elements (high humidity), reuse containers, language on packing, font size, country of origin requirements, color compatible with culture, retail price mus tbe shown
what are examples of support services components
- repair and maintenance
- instruction manuals
- installation instructions
what are consumer goods/services?
- offered from large and small firms
- durable goods (cars, fridge, computer)
- non-durables (foods, drugs, toys_
what are industrial goods or services?
- offered by large firms
- few buyers
- driven demand swing market
- high volatility
how can we reduce volatility of a product?
- broad product line
- spread risks across several markets
- predicting demand, however this is difficult
what are factors driving international demand?
- tech
demand lateset tech to exapnd industrial base (build/upgrade infrastructure), ATMs, tel. Firms) - industrial products
raise the GDP, help industrialization - product quality
value (quality or cost), better quality for good price, roaming feature on phones - definition of quality
market perceived quality (tourist, emotion), performance quality, price-quality relationship, specification - universal standards
FPS/MKS metric system, different size in shoes or clothing, standard industrial classification (SIC) 4 digit
what is green marketing?
- a factor driving international demand
- demand for environmentally safe products
- follows guidelines for eco labeling (bio-degradable and non polluting
what are some characteristics of services?
- intangibility
- inseparability
- heterogeneity
- perishability
what are some service quality dimensions?
- reliability
- responsiveness
- assurance
- empathy
- tangibles
where are the sources of value for services?
from process
what is protectionism?
a barrier to internationalization, requires a professional pass certification exam in local language, recognition of foreign credential, restricted movement of people, and intellectual property (think of knock offs in china and india, loose laws there)
besides protectionism, what are other barriers to internationalization?
- data transfer across borders (individual data, insurance)
- cultural barriers (smile in service, talking with class, tip amount, superstitions)
-ex. vacation packages in japan are shorter than us - no tips in china, japan or turkey
what are some opportunities for international services overseas?
- insurance
-atm - cable tv
- sports events
- higher education demand in india
- call centerse
- fashion, luxury, beauty related products
- service after sales
what are the two kinds of service failures?
- core service failure
service mistakes, billing error, service catastrophe - service encounter failure
uncaring, impolite, unresponsive, unknowledgable (think of poor service at Sdm)
what would make someone switch a service?
poor response to service failure
- competiton
- ethical issues (unsafe, conflict of interest)
- inconvienience ( location, hours of operation, wait time)
what are some customer service failure responses?
- complain to store or manufacturer
- stop buying brand or from the store
- warn friends, word of mouth
- complain to private or government agencies
- intiate legal action
what does a brand explain?
- explains a product and what it stands for
4 branding strategies
- private brands
- multiple national brands
- global brands
- luxury brands
what is a private brand?
- typically not exported
- are a threat to foreign brands
higher margin, higher quality, lower price, receive preferential shelf space, strong in store promotion, appeal to consumers - to maintain market share, they do competitive pricing and provide real value to customers
what are components of multiple national brands
- global branding is difficult
obscene, inappropriate
unappealing patriotic consumers
local brand has more market share - needs adjustment for diversity, type of products, market needs
- country image effect
english tea, french perfume, italian leather - country of origin effect
- made in canada
what are the components of global brands
- same positioning worldwide
- focus strategy to target specific consumers (market is large, eoncomies of scale in mareketing , producing and distributing, standardization, transportation, storage, etc)
-centralize the concept - dencentralize the execution (market information from lcoal team)
branded house example
- all sub brands use the same master
google - google books
- google groups
- google images
- google maps
what is a house of brands
- consist of various brands, each sub-brand operates independently and obtain seperate market share and profits
- P&G
- tide
- folgers
- pampers
what is a Hybrid brand house?
- some companies combine the two types, such as coca cola and Ge. this type enjoys the advantages of both
- Coca Cola
- Minute Maid
- Sprite
- Fruitopia
what are the components of luxury brands
- highly differeneitated products and services
- brands acts as communication tool
(message, aspirational, true luxury brands) - ex. armani, burberry, gucci
Marketing strategy (personality)
- some traits are more desirable than others
- personality should match most closely with the product
how to measure a brand personality?
- 42 item construct !!!
Dimensions of brand personality
- sincerity
- excitement
- competence
- sophistication
- ruggedness
components of international distribution
- distribution structure
(traditional, modern, concession) - factors affecting choice of channel (character, coverage, continuity)
- locating and managing channel members (locating, selecting, motivating, etc.)
Traditional appraoch to international distribution
- import otiented structure (prevent in emerging markets)
- high price, small number of affluent customers
- sellers market, demand exceeds supply
- absense of cars and telephones
- local monopoly of smalll stores
- buy daily vs, b-weekly in canada
modern or online appraoch to distribution
- hypermarkets, shopping malls, catalogues, internat
- discount, self-service, etc.
different pricing methods
- penetration
- parity
- skimming
- prestige
- cost plus
- cost minus
ec.
what are the 5 factors affecting international pricing?
- parallel imports
- inflation
- exchange rate
- price escalation
- government influence
inflation components
- eliminates consumers purchasing power
- must be careful with price quotations and supply contracts
- increase brand value
- retain and win trust of consumers
exchange rate components
weak currency –> export and vice-vera
- govt may intervene if too many fluctuations
- review entire operation system
- adjust cost structure
- increase the brand value
- check mode of operation in foreign markets
price escalation components
- selling overseas naturally = increase in price, operating, transportation, insurance costs)
- import duties as well
what to do? - move to low cost manufacturing countries
- lower distribution costs(internet)
-lower features
lower qualtity - change classification fo product to save on duty
- adjust dimensions (shoes less thick)
government influences components
- keep retail margins below exorbitant level
- correlation between car-owners and superstores visits
- MSRP (manufacturers suggested retail price)
- adjust interest rate
monitor market to prevent abuses (canada competition bureau)
5 strategic decisions in international expansion
- expand or not
- international market evaluation (IME)
- Mode of entry (MOE)
- overall strategy
- marketing mix
factors of the expand or not decisions
- market saturation
- slow population growth
- obsolescence, short lifecycle (phones)
- new market can have untapped demand, production can be easier
- unfavourable or favourable trading blocks (diplomatic relations)
factors of evaluating international markets
- emerging markets pose a special problem, inadequate marketing infrastructure, income levels
- segmentation variables (culture determines customer behaviour, interests, opinions)
- what countries? market size? growth? competitors?
components of mode of entry
- market characteristics (potential sales, strategic importance, cultural differences)
- company capability
(company characteristics, the market knowledge)
ex. exporting, contractual agreements, international alliances, foreign direct investment
what are some examples exporting?
- indirect via domestic distributors
- direct to consumer
what are some examples of contractual agreements?
- contract manufacturing
- licensing
- franchising
what are some examples of international alliances?
- strategic international alliances
- consortia
- international join ventures
what are some examples of foreign direct investment?
- sales office
- mergers and acquisitions
- greenfield
what is the decision behind overall strategy?
- waterfall (pour all resources that are available into one or a selected few markets)
- sprinkler (a firm spreads its resources in order to gain even small footholds across as many markets as possible
- sequencing
(able to integrate and optimize international operations between countries vs within a trading block)
what are the components of a marketing mix?
- 7 p’s!
- coffee example
per capita consumption
bean, ground, powder? - dark raost, blonde?
- lunch, breakfast?
- ## drink black, milk, cream?
