Unit 10: Global & Entrepreneurial Marketing Flashcards
___________ describes a company’s effort in applying the principles learned from its domestic marketing to create an integrated _________ strategy
global marketing
not on a country-by-country basis but with a global perspective on all aspects of the marketing mix
When deciding whether or not to venture into international markets with an offering, organizations need to consider the forces operating within three basic categories:
company influences, industry influences, and market influences.
When deciding whether or not to venture into international markets with an offering, organizations need to consider:
Company Influences –>
Industry Influences
Market Influences
organization’s growth strategy, benefits of globalization, drawbacks of globalization
When deciding whether or not to venture into international markets with an offering, organizations need to consider:
Company Influences
Industry Influences –>
Market Influences
competitive advantage in global arena vs. local and global competitors
When deciding whether or not to venture into international markets with an offering, organizations need to consider:
Company Influences
Industry Influences
Market Influences –>
consumer preferences, differences in consumer behavior (Hofstede’s Cultural Dimensions - you should just recognize that this is the name of a framework we can use to understand individual and cultural differences)
Company Delta would like to enter an international market, but they want to only take on the least amount of risk and commitment the fewest amount of resources.
indirect export
Company Beta has created a very strong brand, business model, and set of operational practices in their home country and would like to duplicate the formula in international markets. They are not interested in direct ownership of entities in international regions, but they want total control of their trade names, trademarks, marketing plans, quality standards, and training, through contractual relationships with other entities, and expect to receive upfront fees and future royalty payments for the benefits they provide to these contracted entities.
franchising
Company Alpha is interested in making a significant investment of resources in an international region by partnering with a local company in that region, so that they may learn about the new market and share the risk of ownership, including financial and political risk.
joint venture
Company Gamma is interested in entering a foreign market by wholly acquiring a business entity that is already operating in the region and they are willing to commit significant resources and take on all of the associated risk so that they can have total control over the operations and benefit fully from the profits produced.
foreign direct investment
To cover the added incremental costs of shipping, distribution, tariffs, and so on, companies often have to charge a higher price in the foreign market than they do domestically. Faced with this price escalation, companies must choose from what most academics agree are three basic global pricing strategies:
Extension or Ethnocentric Pricing (“once price fits all”)
Adaptation or Polycentric Pricing (complete decentralized pricing)
Geocentric Pricing (coordinated approach to leveraging global pricing experiences that take local issues into account)
As a part of this section, be sure to understand the key terms: transfer pricing, dumping, and gray markets.
While the packaging of a product is often an integral part of branding, it serves dual purposes since it is both functional and promotional. When considering global markets, several factors come into play including:
shipping, functionality, aesthetics, modifications/labeling, local customs, and other costs.
Running an international marketing program entails careful consideration of choices in
branding, product adaptation, packaging, promotion/advertising/selling, pricing, and placement/distribution.
A customer is comparing two similar products online. One is made in the United States, one in a foreign country to her. She opts for the choice made in the United States, judging it to be better quality despite favorable online reviews for each. This instinctual bias is known as:
provenance paradox
Which of the answer choices correctly ranks, from lowest risk to highest risk, the following methods of foreign market entry?
- Foreign direct Investment
- Franchising
- Indirect export
- Product joint venture
3, 2, 4, 1
If a brand is truly global, what brand variables is typically the same across geographies?
Positioning
Product name and features
Promotion
Assume Levi Strauss & Company sells its jeans in a wide variety of global markets. Physical environmental factors such as climate (e.g., heat, humidity) have influenced the types of jeans demanded and sold. For example, colder climates are well-suited for traditional length and weight jeans, while hotter climates prefer shorter and lighter weights. Likewise, differences in competitive landscapes (i.e., amount of competition, type of competition, and intensity of competition) have influenced brand positioning: Levis is positioned as relatively expensive and prestigious in Russia yet positioned as more casual and relatively inexpensive in the United States. For Levi’s, which adaptation strategy is likely most appropriate across its global markets?
dual adaptation
______________ is a powerful tool for entrepreneurs who want to create new markets instead of competing within established markets.
Blue Ocean Strategy
Value innovation occurs when companies create value propositions that “align innovation with utility, price, and cost positions.” This is accomplished by both increasing the ________________ to a customer market segment(s) and increasing the ______________ of the business’s value propositions to the business.
value proposition’s value, absolute economic value
The cornerstone of Blue Ocean Strategy is creating _______________ – creating a leap in value for both the business and its customers, thereby opening up ______________________.
value innovation, new and uncontested market space
Microsoft XBOX
Red ocean
Nintendo Wii
Blue ocean
Peloton
Blue ocean
LA Fitness
Red ocean
Starbucks
Blue ocean
Mike’s Jersey Subs
Red ocean
Apple iPod + Music
Blue ocean
Uber
Blue ocean
Austin Cab Company
Red ocean
AirBnB
Blue ocean
aloft Hotels by W
Red ocean
Red Ocean Strategy
Compete in existing market space
Beat the competition
Exploit existing demand
Make the value-cost trade off
Align the whole system of a company’s activities with its strategic choice of differentiation OR low cost
Blue Ocean Strategy
Create uncontested market space
Make the competition irrelevant
Create and capture new demand
Break the value-cost trade-off
Align the whole system of a company’s activities in pursuit of differentiation AND low cost
The article, “Designing Breakthrough Products,” introduces a term to describe an approach to innovation that contrasts with conventional product development. The author suggests that if companies want to create breakthrough products, “they should seek to understand how those technologies could be used to address needs that customers may not realize they have.” These realizations are termed:
technology epiphanies
To achieve the realizations described in the question above, companies should turn to expert “___________” from far-flung fields with a novel perspective on users, rather than rely solely on users themselves.
interpreters
Markets appear as if from nowhere, creating massive new sources of wealth. It tends to have its roots in technological discontinuities, such as the one that enabled Motorola’s rise to prominence with the first generation of cell phones, or in fast-spreading fads like the collector card game Pokémon.
Disruptive Innovation
Takes existing technologies into new markets to serve new purposes, as when Tandem applied its fault-tolerant computers to the banking market to create ATMs and when OnStar took Global Positioning Systems into the automobile market for roadside assistance.
Application Innovation
Takes established offers in established markets to the next level, as when Intel releases a new processor or Toyota a new car. The focus can be on performance increase (Titleist Pro V1 golf balls), cost reduction (HP inkjet printers), usability improvement (Palm handhelds), or any other product enhancement.
Product Innovation
Makes processes for established offers in established markets more effective or efficient. Examples include Dell’s streamlining of its PC supply chain and order fulfillment systems, Charles Schwab’s migration to online trading, and Wal-Mart’s refinement of vendor-managed inventory processes.
Process Innovation
Makes surface modifications that improve customers’ experience of established products or processes. These can take the form of delighters (“You’ve got mail!”), satisfiers (superior line management at Disneyland), or reassurers (package tracking from FedEx).
Experiential Innovation
Improves customer-touching processes, be they marketing communications (use of the Web and trailers for viral marketing of The Lord of the Rings movie trilogy) or consumer transactions (Amazon’s e-commerce mechanisms and eBay’s online auctions).
Marketing Innovation
Reframes an established value proposition to the customer or a company’s established role in the value chain or both. Examples include chestnuts like Gillette’s move from razors to razor blades, IBM’s shift to on-demand computing, and Apple’s expansion into consumer retailing.
Business Model Innovation
Capitalizes on disruption to restructure industry relationships. Innovators like Fidelity and Citigroup, for example, have used the deregulation of financial services to offer broader arrays of products and services to consumers under one umbrella. Nearly overnight, those companies became sophisticated competitors to old-guard banks and insurance companies.
Structural Innovation
Which term below is used to describe the time in the Market Development Life Cycle when a technology has passed the test of usefulness and is now perceived as necessary and standard for many applications. All the pragmatists who were hanging back from committing are rushing into the market to make sure they don’t get left behind. Customers of many types from many fields are making their first purchases of the technology, and revenues are growing at double or even triple-digit rates. Competition is fierce, with investors bidding up the stock of every company that can participate in the category.
tornado
Forces Affecting Global Market Entry
Company Influences –>
Market Influences
Industry Influences
Regional Influences
growth strategies, risk tolerance, company/brand capabilities/transferability
Forces Affecting Global Market Entry
Company Influences
Market Influences –>
Industry Influences
Regional Influences
global market growth
consumer behavior differences & similarities
Forces Affecting Global Market Entry
Company Influences
Market Influences
Industry Influences –>
Regional Influences
competitive advantages
supply chain & market channel structures
Forces Affecting Global Market Entry
Company Influences
Market Influences
Industry Influences
Regional Influences –>
economic & political systems
trade policies, agreements, & economic controls
legal & regulatory hurdles
intellectual property laws & enforcement; counterfeiting
A __________ is created when unauthorized sellers purchase products at a lower price in one country and illegally resell them at a higher price in another country
gray market
the price charged within a company’s international business units or how raw materials, components, or finished goods are transferred and accounted for within companies
transfer pricing
Companies can also be tempted to charge too little when entering a new foreign market, a practice referred to as ____________.
dumping
