Term
| Global Marketing Strategy: |
|
Definition
plan of action that guides the firm in:
1. How to position itself and its offerings in foreign markets and which customer segments to target, and
2. The degree to which its’ marketing program elements should be standardized and adapted. |
|
|
Term
|
Definition
| : within each segment, customer’s exhibit similar characteristics regarding income level, lifestyle, demographic profile or desired product benefits. I.e. Caterpillar targets farmers, military and construction firms. |
|
|
Term
|
Definition
| represents group of customers that share common characteristics across many national markets. |
|
|
Term
|
Definition
| youth market that exists across most of the world. This segment follows global media, is quick to embrace new trends, and has disposable income. |
|
|
Term
| o Jet-setting business executives = |
|
Definition
| another global segment. They have much disposable income and are eager consumers of products rep. luxury and sophisticated style. |
|
|
Term
|
Definition
firm develops both the product and it’s marketing to evoke a distinct impression in the customer’s mind, emphasizing differences from competitors.
o I.e. Bechtel position’s itself as providing sophisticated technical solutions for major infrastructures worldwide. |
|
|
Term
|
Definition
| Make marketing uniform, with similar product across globe. |
|
|
Term
|
Definition
| Modifying elements to accommodate specific customer requirements in a particular market. May rely on decision-support systems |
|
|
Term
|
Definition
| exemplifies global integration and is more appropriate in global industries. |
|
|
Term
|
Definition
-“shrinking” of world market
1. similar market segments exist across countries
2. customers seek similar features
3. products have universal specifications
4. customers have converging expectations
-economies of scale in business activities |
|
|
Term
| Advantages of Standardization |
|
Definition
1. cost reduction → increased profit due to efficiency
2. improved planning and control
3. global brand/brand recognition
4. better quality, economies of scale, consistency, no dom. comm. barriers |
|
|
Term
|
Definition
| exemplifies local responsiveness and more appropriate in multi-domestic industries. |
|
|
Term
|
Definition
1. Differences in National preferences – use conditions/ buyer behavior patterns
2. Differences in Laws and regulations
3. Differences in Living standards and economic conditions
4. Differences in National Infrastructure |
|
|
Term
|
Definition
1. Meet needs of customers more precisely
2. Enjoy unique appeal
3. Comply with government regulations
4. Achieve greater success in combating customer resistance |
|
|
Term
| *Standardization and 4 international strategies |
|
Definition
Standardization
high Global
More standardized b/c not just domestic Transnational
More adapted due to integration
Low International
Only think domestically Multi-domestic
More adapted due to integration Adaptation
Low High |
|
|
Term
| Factors affecting Product Adaptation |
|
Definition
1. Marketing environment
2. Product Constituents and Branding
3. Packaging and Appearance
4. Method of Operations or Usage
5. Quality & Service
6. Product Variables
7. Country of Origin effects
8. Company considerations |
|
|
Term
| 1. Marketing environment (characteristics |
|
Definition
| a. Government regulations; nontariff barriers; customer characteristics, expectations and preferences; economic development; competitive offerings; climate and geography |
|
|
Term
| 2. Product Constituents and Branding |
|
Definition
a. Product ingredients must not violate local legal regulations and social or religious customs.
b. Brand in name, term, symbol, sign, or design can not offend the local customer. Trademarks are especially vulnerable to counterfeiters. |
|
|
Term
| 3. Packaging and Appearance |
|
Definition
a. Packaging serves three major functions:
i. Protection – improper handling
ii. Promotion – language and symbols
iii. User convenience – packaging aesthetics – color, shape, size, etc.
b. Adaptation in styling, color, size, and other appearance features plays an important role in how a consumer perceives a product. |
|
|
Term
| 4. Method of Operations or Usage |
|
Definition
2 variations, frequency and voltage
a. Product that is operable in domestic market may not be operable in foreign
i. I.e. DVD player
b. Electrical voltages and connecters vary around the world.
c. Software may have to be translated into local language |
|
|
Term
|
Definition
a. Quality is essential to marketing product internationally, esp. when price is an important competitive factor
b. Servicing products in international market = must develop local repair staffs |
|
|
Term
|
Definition
a. 3. Augmented Products → i.e. 10 yr. warranty (most adapted)
b. 2. Tangible products → i.e. DVD player (middle standardization/adaptation)
c. 1. Core Products → Car (most standardized) |
|
|
Term
| 7. Country of Origin effects |
|
Definition
| a. Origin of a product may have strong effect on consumer perceptions/biases about foreign products |
|
|
Term
| 8. Company considerations |
|
Definition
a. Organizational capabilities? Managerial talent?
b. Is it worth it? Can we afford not to do it? Can a specific ROI be attained?
c. Quality, price, and user perceptions? |
|
|
Term
|
Definition
o Only revenue generating element of marketing mix
o Means of attracting & communicating offer to potential buyer
o Competitive tool
o Can be used to position the product or service in the marketplace
o Higher price says “better quality” |
|
|
Term
| Export pricing strategies |
|
Definition
1. Cost oriented pricing:
2. Market differentiated pricing |
|
|
Term
| Export pricing strategies |
|
Definition
1. Cost oriented pricing:
2. Market differentiated pricing |
|
|
Term
1. Cost oriented pricing:
a. Standard worldwide price |
|
Definition
| one price regardless of buyer’s location in the market(s); aka rigid cost plus pricing |
|
|
Term
1. Cost oriented pricing:
b.i. Dual pricing |
|
Definition
| differentiates between domestic and export prices |
|
|
Term
|
Definition
| allocates domestic & foreign costs to product (includes fixed costs) |
|
|
Term
|
Definition
| considers direct costs of producing and selling for exports as floor (lowest) price; biggest difference from (i) = fixed costs disregarded; aka incremental pricing |
|
|
Term
| 2. Market differentiated pricing |
|
Definition
| aka “flexible cost plus” method; based on the dynamics of the marketplace; i.e. competition, exchange rates, local purchasing power, etc. |
|
|
Term
| Western approach to pricing issues |
|
Definition
• Based on how well you can minimize price in a market
• If cost too high, return to design stage
• See additional graph |
|
|
Term
| Japanese approach to Pricing issues = “Target costing” |
|
Definition
• Find target cost before you manufacture product
• Target cost will determine manufacturing
• Target costs for each component force Departments and suppliers to struggle and negotiate trade-offs |
|
|
Term
| Additional pricing factors |
|
Definition
• Internal factors
• External factors |
|
|
Term
|
Definition
o Firm strategy and goals; i.e. profits vs. market share
o Production costs |
|
|
Term
|
Definition
| o Consumer expectations & buying power; competitor price; economic conditions; adaptation costs; export and transportation costs; tariffs; and exchange rates |
|
|
Term
Price Escalation
• Price escalation from export-related costs |
|
Definition
o Cost of modifying product for foreign market
o Operational cost of exporting
o Cost incurred in entering the foreign market |
|
|
Term
| Strategies to combat price escalation |
|
Definition
1. Shortening distribution channel to bypass some intermediaries in the channel
2. redesigning the product to remove costly features
3. shipping its products unassembled
a. parts and components may quality for lower tariff rates and locally available low-cost labor can assemble in free trade zones
4. Reclassifying or using different tariff classification to quality for lower tariffs
a. Often imported products fit more than one product category
5. moving production or sourcing to another country to take advantage of lower production costs or favorable currency rates |
|
|
Term
Foreign Market Pricing Policy
• this is determined by: |
|
Definition
| o corporate objectives; costs; customer behavior & market conditions; market structure; and environmental constraints |
|
|
Term
| The Gray Market (parallel imports) |
|
Definition
o Legal importation of genuine products into a country by intermediaries outside the authorized distribution network.
• i.e. eBay and drug import video on Lipitor distribution from Canada |
|
|
Term
|
Definition
| the practice of charging a lower price for exported products |
|
|
Term
|
Definition
1. predatory dumping: is intentional selling at a loss to increase market share
2. unintentional dumping: occurs when market factors cause the import’s selling price to drop below prices in the exporter’s home market |
|
|
Term
|
Definition
1. antidumping duties: levied on imported goods sold @ less than fair market value
2. countervailing duties: imposed on imports which are subsidized in the exporter’s home country |
|
|
Term
|
Definition
| practice of pricing intermediate or finished products exchanged among the subsidiaries and affiliates of the same corporate family located in different countries. |
|
|
Term
|
Definition
taxes; import duties; inflationary tendencies; unstable governments and other regulations
• Routinely used by companies to minimize global tax exposure or to maximize profitability |
|
|
Term
| Place (Distribution) Policy |
|
Definition
• Channels of distribution
• Physical distribution logistics |
|
|
Term
| Channel Design Considerations |
|
Definition
• Coverage: the # of areas a product is represented & quality of that representation
• Types:
1. Intensive: gum, maximum exposure b/c want to sell as much as possible
2. selective: electronics
3. exclusive: car dealerships in Tallahassee = Chevy, Ford, etc |
|
|
Term
|
Definition
• coordinating 2 independent entities w/ shared goals
• relationship to be managed for the long term
• factors complicating channel management
o ownership; geographic, cultural & economic distance; diff. rules of law |
|
|
Term
| Promotional Policy: The Promotion Mix |
|
Definition
• personal selling: the use of person-to-person communication
• advertising: any form of non-personal communication
• publicity: non-paid; commercially significant news
• sales promotion: direct inducements of extra value or incentives
-All for domestic market activity |
|
|
Term
| Promotional Mix – Advertising |
|
Definition
1. Media Strategy: selection of media vehicles
2. Creative strategy: promotional message
3. Advertising Checklist:
a. Identify the context of the country
b. Identify the significance of color and music
c. Translate ads from English carefully
d. Is your target audience ad literate? |
|
|
Term
|
Definition
|
|
