Summary of International Marketing
5th Edition (ISBN: 9781526848598)
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maartjeariel
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Chapter 1: The Scope and Challenge of International Marketing
Controllables are things such as: price, product, promotion and place.
Domestic environment uncontrollables are political/legal forces, economic climate and
competitive structure within the country.
Foreign environment uncontrollables are political and cultural forces, geography, distribution,
level of technology, competitive forces and economic forces.
The country analysis considers only relevant external factors: Political, Economic, Social,
Technological, Environmental & Legal factors (PESTEL).
The competitive analysis is the Porter’s 5 forces model: bargaining power (buyers & suppliers),
threat (from substitutes & new entrants) & rivalry: 4Ps.
The SWOT analysis can be used to develop a marketing strategy and consists of:
- External Opportunities & Threats
- Internal Strengths & Weaknesses
Avoid basing marketing strategies and decisions on your own culture and experience.
EPRG Framework: classifies firms by their orientation, depending on the international
commitment of the firm.
- Ethnocentric: home country orientation - domestic market extension
- Harley Davidson: an all American brand with multinational appeal.
- Its foreign market is similar to home and shares the same values, therefore it
doesn’t need to adapt the 4Ps and its priority still lies on the domestic market.
Markets with demand similar to the home market are pursued
- Polycentrism: host country orientation - multi-domestic market
- Mr.Proper: product brands differ across country markets. For example, in Mexico
it’s called Maestro Limpio whereas in Germany it’s Meister Proper.
- Country markets are vastly different, warranting a tailored program for each.
Here, subsidiaries operate independently and control is decentralized. Separate
marketing mixes and 4 Ps decisions are localized.
- Regiocentrism: a regional orientation - global marketing. Similar to geocentrism.
- Geocentrism: a world orientation - global marketing
- McDonald’s: McVeggie in the Netherlands and a McCurry Pan in India, for
example. Here a firm’s marketing activity is global with international market
coverage.
- Standardized product and a similar price to a global market. Some 4 Ps
adaptations in different markets, for example the local dishes. Market segments
with similar demands for the same basic product. NIKE and IKEA.
Marketing internationally means:
1. Finding new market segments for the same or similar product
2. Standardizing the marketing mix (4 Ps) if possible
3. Adapting certain 4 Ps components to suit the local market
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Professional qualities are required: objectivity is key - avoid self-reference criterion. Understand
cultural differences and have a knowledge of cultures, history, world market potential and
trends.
Marketing concepts are largely universally applicable. The goal of a business is to generate
profit by promoting, pricing and distributing products for which there is a market. As a result, the
difference between domestic and international marketing lies not with different concepts of
marketing, but with the environment within which marketing plans must be implemented.
Alien status is the increased difficulty of properly assessing and forecasting the dynamic
international business climate. 2 dimensions to the alien status of a business:
1. Alien in that the business is controlled by foreigners
2. Alien in that the culture of the host country is alien to the foreign country
Environmental adaptation: to adapt business and marketing strategies to dynamic international
markets. The process of environmental adaptation entails modification and alignment of
controllable variables, such as the marketing mix, to each international market. This serves to
reduce and absorb the impact of the various uncontrollable elements.
According to Levitt, the company of the future will be a global company that views the world as 1
market to which it sells a global product, a high-quality, reasonably priced, standardized product.
- Levitt argues that segmenting international markets on political boundaries and
customizing products and marketing strategies for country markets or on national or
regional preferences are not cost effective. As a result of mass communication, many of
the regional differences that once existed have now been eliminated in the EU.
- To some extent, people in other cultures exposed to the same influences will
react similarly and there’s a converging commonality of the world’s needs and
desires: for example, the number of languages is decreasing.
Marketing internationally should mean: looking for market segments that can be satisfied with
the same product, standardizing certain components of the marketing mix if possible and
adapting the marketing mix to suit the country’s culture in which one is operating.
There are 5 global trends affecting business today:
1. Globalization of production and consumption
2. Growth of free-trade areas like the EU & NAFTA
3. Enhanced purchasing power throughout the world
4. Evolution of large emerging markets (BRIC)
5. Advanced methods of communication and transportation
With the increasing globalization, companies find they are unavoidably enmeshed with foreign
customers, competitors and suppliers, even within their own borders; Lidl is German.
Marketing relativism is marketing strategies and judgements are based on experience, and
experience is interpreted by each marketer in terms of his or her own culture and experience.
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The primary obstacle to success in international marketing is a person’s self-reference criterion
(SRC): a reference to one’s own cultural values, experiences and knowledge as a basis for
decisions.
- Your SRC can prevent you from being aware that there are cultural differences or from
recognising the importance of those differences. If you evaluate every situation through
your SRC then you are ethnocentric. The best way to combat the SRC is to recognize it.
International marketing management recognizes 3 orientations:
1. Domestic market extension orientation
2. Multi-domestic market orientation
3. Global marketing orientation
For some products, adaptation is not necessary, but for other products it still is.
- Marketing internationally should mean looking for market segments with similar demands
that can be satisfied with the same product, standardizing the components of the
marketing mix that can be standardized, and where necessary, adapted.
To be globally aware is to have: objectivity, tolerance and knowledge.
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Chapter 6: Researching International Markets
International marketing research has to do with collecting and assessing information on:
economic conditions, sociological and political climate, technological environment, market size,
conditions, segmentation and target groups, market demand, consumer behavior & competitors.
The marketing research process is as follows:
1. Topic and research problem:
2. Research design and plan
3. Data collection and measurement
4. Data analysis and interpretation
5. Presentation of the findings and reports
Marketing research: systematic gathering, recording and analyzing of data to provide
information useful in marketing decision-making.
- Operating in foreign markets, the need for thorough information as a substitute for
uninformed opinion is even more important than in domestic marketing.
Challenges facing international marketers are:
- Differing emphasis on the kinds of information needed, limited availability of tools and
techniques, difficulty in implementing the research process.
There are 3 types of research, based on information needs.
1. General information about the country, area or market.
2. Information necessary to forecast future marketing requirements, by;
3. Specific market information used to make product and related decisions and to develop
marketing plans.
Defining problems during the marketing research process can be difficult, as an unfamiliar
environment clouds problem definition: researchers either fail to anticipate the influence of local
culture on the problem, or fail to identify the SRC.
- Therefore: treat problem definition as if it were in the home environment.
Multicultural research: studies performed in different cultures need to determine whether
standardization or adaptation of the marketing mix is appropriate.
Comparability and equivalence: information that is comparable and is understood in the way
intended.
Once data is collected, analysis and interpretation of findings is done. Researchers have to:
- Consider many limitations of primary and secondary data, still producing meaningful
guides for management.
- Possess high degree of cultural understandings of the market.
- Have creative talent for adapting research findings.
- Show skepticism in handling primary and secondary data.
A company in need of foreign market research ideally: employs local researchers in each
country, coordinates between the client company and the local research companies.
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Research design: overall plan for relating a research problem to practical empirical
research.
Historical data: information over a period of time.
Analogy: reasoning from parallel/similar cases/examples.
Income elasticity: higher or lower income influences demand for a product.
As abundance of information increases, it requires some systematic method of storing,
interpreting and analyzing data.
A multinational marketing information system (MMIS):
- Generates an orderly flow of relevant information and brings all the flow of recorded
information into a unified whole for decision making.
Differences from a domestic marketing information are:
1. Scope: MMIS covers more than one country.
2. Levels of information: MMIS operates at each country level, with perhaps substantial
differences among country systems, and at a worldwide level encompassing an entire
international operation.
Information is the key component in developing successful marketing strategies.
A basic difference between domestic and international marketing research is the broader scope
needed for foreign research. Research can be divided into 3 types based on information needs:
1. General information about the country, area and/or market
2. Information necessary to forecast future marketing requirements
3. Specific market information used to make product, promotion, distribution and price
decisions and to develop marketing plans
A marketing research study is always a compromise dictated by limits of time, cost and the
present state of the art. The researcher has to strive for the most accurate and reliable
information within existing constraints. Key to successful research is a systematic approach.
1. Define the research problem and establish research objectives
2. Develop a research plan; how are you going to do the research
3. Gather the relevant data from secondary and/or primary sources
4. Analyze and interpret the collected data
5. Draw findings and present the results
Difficulties in foreign research stem from a failure to establish problem limits broad enough to
include all relevant variables.
Consumption patterns are how consumers buy and consume a particular product.
- In the UK: hot milk-based drinks are consumed prior to bedtime to relax
- In Thailand: hot milk-based drinks are consumed in the morning to energize
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To judge the reliability (whether information of a study are trustworthy), the following questions
can be asked:
1. Who collected the data?
2. For what purposes were the data collected?
3. How was the data collected?
4. Are the data internally consistent and logical in light of known data sources or market
factors?
Checking the consistency of one set of secondary data with another data is a way of judging
validity (whether the measures are reasonable to measure what it is supposed to measure).
Primary data is data that has been collected for the research at hand. Problems of gathering
primary data are:
- Ability to communicate problems: someone who’s never seen an iPad can’t provide
feedback on that product.
- Willingness to respond: if the wife controls the spending, she should be questioned and
not the husband.
- Sampling (selection of potential respondents): the greatest problem of sampling stems
from the lack of adequate demographic data and available lists from which to draw
samples. If lists aren’t available, sampling becomes more complex.
- Language and comprehension: the most universal survey sampling problem is the
language barrier.
- Back translation: text translated into another language, then translated back to
the original language by another party.
- Parallel translation: when more than 2 translators are used for a back translation.
- Decentring: a successive iteration process of translation and retranslation of a
questionnaire, each time by a different translator.
Many problems in collecting primary data in international market research stem from cultural
differences.
Census data is a record of population and its breakdown in a country.
Comparability and equivalence means information that’s comparable and understood in the
same way as intended.
Once the data has been collected, the final steps are analysis and interpretation. The market
researcher has to have 3 talents to generate meaningful marketing information:
1. Cultural understanding
2. Creative talent for adapting research findings
3. A skeptical attitude in handling primary and secondary data
Research design is the overall plan for relating a research problem to practical empirical
research.
A semantic differential scale can be used to find out the
difference between brands.
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Measuring the changes in the relationship between personal or family income and demand for a
product can be used in forecasting market demand. In income-elasticity ratios, the sensitivity of
demand for a product to income changes is measured.
- Determined by = the % change in quantity of demand / % change in income
- Result < 1, then the income-demand relationship is inelastic
- Result > 1, then the income-demand relationship is elastic
In short, the objective of market research is providing management with information for decision
making. Furthermore, 3 generalizations can be made about the direction and rate of growth of
marketing research in foreign marketing:
1. Home-based and foreign management are increasingly aware of and accept the
importance of marketing research’s role in decision making.
2. There is a current trend towards the decentralization of the research function to put
control closer to the area being studied.
3. The most sophisticated tools and techniques are being adapted to foreign information
gathering with increasing success.
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Chapter 10: International Market Entry Strategies
Portfolio analysis encourages assessment of each product in 2 dimensions:
1. Its market position.
2. Attractiveness of the market.
This analysis allows for more efficient resource allocation within the firm: the idea is to invest
more in products that are expected to generate more profit and less in products that have
reached maturity and are in the decline stage of the product life cycle (PLC).
A market can be best analyzed through its growth rate. An integrated market growth and market
share analysis for each product can provide a good picture of its healthy profit generation.
- Market growth dimension: reveals that the product is still attracting new customers.
- Market share dimension: shows that a particular product is doing better than the
competitors.
Being in a growth market is better for a firm for now and for the future, but having a good market
position (high market share) in a growth market is even better.
The image to the right represents the growth-share matrix.
There are several phases of international marketing involvement:
1. No direct foreign marketing
a. No active cultivation of customers outside national
boundaries takes place. The produce may reach
foreign markets via domestic distributors though.
2. Infrequent foreign marketing
a. Temporary surpluses result in infrequent overseas
marketing. Sales to foreign markets are made as
goods are available. Little change in company
organization.
3. Regular foreign marketing
a. A firm has a permanent productive capacity to produce goods to be marketed on
a continuing basis in foreign markets. The primary focus for products being
produced is to meet domestic market needs still.
4. International marketing
a. Firm becomes an international or multinational marketing firm dependent on
foreign revenues and seeks markets throughout the world.
5. Global marketing
a. Companies treat the world incl. their home market as their market. Firm develops
a strategy and image to maximize returns through global standardization.
Change in international orientation of a firm occurs when
- A company relies on foreign markets to absorb permanent production surpluses.
- A company becomes dependent on foreign profits.
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For market entry, the marketer needs to carry out a competition analysis to establish whether it
will be possible to achieve the desired market share or not.
The market opportunity assessment helps the company to screen the market in relation to its
objective overall strategy, to assess whether the market is economically attractive and to make
an advanced in-depth analysis of market opportunity for its particular product.
- Depends on the proactive vs. reactive approaches of a company.
Proactive market selection: actively and systematically selecting a market.
- Marketer makes visits and does research to assess the potential.
Reactive market selection: selecting a market at random or without a systematic analysis.
- Firms not actively collecting information or analyzing markets to assess the potential.
- Firms wait for initiative taken by importers from a potential market.
When choosing a strategy when going abroad, the establishment chain model can be used. A
stepwise internationalization to foreign markets. It goes from no regular export to manufacturing
subsidiaries. Obstacles to internationalization: lack of knowledge, resources & psychic distance.
Stages of going abroad:
1. No regular export
2. Export via representatives
3. Joint ventures
4. Sales subsidiary
5. Production/manufacturing subsidiary
Company resources and psychic distance (psychological barriers) are not the only reasons why
a company enters a particular market. 3 objectives when entering a foreign market:
1. Market seeking: companies that venture into new countries because they’re looking for
new markets: actively seeking customers worldwide. For example, due to a saturated
market at home.
2. Efficiency seeking: firms want to enter countries where they can achieve efficiency in
different ways. For example R&D and other infrastructural effects. E.g: Silicon Valley.
3. Resource seeking: firms try to enter countries to get access to raw materials or other
crucial inputs for cost reduction. Example: garment companies in India.
The BCG analyzes the country's attractiveness with the competitive
strength of the company.
- Country attractiveness: market size, market growth, competitive
conditions and uncontrollable elements (cultural, legal and political
environments).
- Competitive strength: strength of a product compared to
competitors.
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Invest: a country that is attractive because of its market size and potential for growth.
Divest/license: a market where the company shouldn’t invest, if a firm is already present it
should leave.
Joint venture: a market that is quite attractive but difficult. Demands investments.
Export: a company can achieve quick market share and matches market demand, but the
market isn’t very attractive.
Selective strategy: fierce competition, difficult to maintain a market share.
When a company decides to go international, it has to choose an entry strategy.
- Minimal investment: infrequent exporting with little thought given to market development.
- Large investments: capture and maintain a permanent share of world markets.
Both of these approaches can be profitable.
A company might decide to enter the international market by exporting from the home country.
- This is the easiest and most common approach employed by companies taking their first
international step because the risk of financial loss can be minimized.
Piggybacking is when a company sells its products abroad using another company’s distribution
facilities, which is used when companies have complementary, non-competitive products. It’s a
way to test the market, as a first step towards a company’s international activities.
- The benefit for the exporting company is that they can broaden their product lines that
they offer to their foreign customers, they believe that having a broader range of
products will help them in boosting the sales of their own products.
Licensing is to let a local company use a firm’s trademark or patent against a fee. It’s a means
of establishing a foothold in foreign markets without large capital layouts. Patent rights refer to
only the owner of the rights can use the particular product technology - granted in foreign
licensing. It’s a supplement to exporting or manufacturing.
- When import restrictions forbid other means of entry or a country is sensitive to foreign
ownership, etc. The least profitable way of entering a market.
Franchising is a form of licensing and vertical market integration. It allows flexibility in dealing
with local market conditions and provides the parent firm with some degree of control. Types:
master franchise, joint venture and licensing. Fastest growing market entry strategy.
- The franchisor provides products, systems and management systems and the franchisee
provides market knowledge, capital and personal involvement.
- Skill centralisation and operational decentralization.
Strategic international alliances (SIAs): business relationship, 2 or more companies out of
mutual need and to share risk. Opportunities for rapid extension into new markets, access to
new technology and more efficient production and marketing costs. Synergy.
- A company strong in research and development skills and weak in the ability or capital to
successfully market a product will seek an alliance to offset its weakness, 1 partner to
provide marketing skills and capital and the other to provide technology & a product.
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Example: joint ventures. Easy to get around tariffs.
Consortia: a large number of participants who frequently operate in a market in which none of
the participants are currently active. It was developed for pooling resources and lessening risks.
- Similar to a joint venture but involve more participants and they frequently operate in a
country where none of the participants are currently active.
Manufacturing: also called a wholly owned subsidiary within a foreign country. A company may
manufacture locally to capitalize on low-cost labor, avoid taxes, etc.
- 3 types: market seeking, resource seeking, efficiency seeking.
Countertrade: also called counter-purchase, buyback, compensation and offset, barter. It ties
the export to an undertaking from the seller to purchase products from the buyer or a third party
in buyer’s country. Reasons: promotion of local exports, balancing trade flows.
- Trading, literally.
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Chapter 11: International Segmentation & Positioning
Market segmentation: identify bases for segmentation and determine important characteristics
of each market → market targeting: evaluate potential and commercial attractiveness of each
segment and select 1 or more segments → product positioning: develop detailed product
positioning for selected segments and develop a marketing mix for each selected segment.
Some of the factors influencing international segmentation are:
- Cultural: culture, subculture, social class
- Social: reference groups, family, roles and status
- Personal: age and lifecycle stage, occupation, economic situation, lifestyle, personality
and self-concept
- Psychological: motivation, perception, learning, beliefs and attitudes
The criteria for effective segments is: measurability, accessibility, substantiality, actionability.
- Measurability: can segments be measured?
- Accessibility: are there available communication and selling channels?
- Substantiality: is the market segment profitable and large enough?
- Actionability: does the firm have sufficient resources?
Positioning is the location of a product in the consumers’ mind. Product attributes are benefits,
usage occasion and users. 2 aspects for a unique position:
- What is the product and its benefit - value proposition
- How is it different - competitive advantage
Positioning map of cars: ranging from conservative to sporty and from classy to practical.
Firm’s choices and strategies in marketing can be evaluated by the segmentation, targeting and
positioning (STP) process.
- Segmentation: to identify homogeneous groups of consumers with similar consumption
patterns.
- Targeting: evaluating segments and focusing marketing efforts on a country, region or
groups of people that have a significant potential to respond to the firm’s products.
- Positioning: implementing appropriate marketing strategy for the targeted segment, to
create a planned image of a company’s offering in the consumer’s mind.
Positioning can’t be done unless it’s clear which segment is the target group.
A market segment must be: identifiable, economically reachable, more homogeneous in its
characteristics than the market as a whole and large enough to be profitable. Advantages:
- Firms can offer products which better meet the needs of the identified group.
- Increase brand equity and loyalty.
- Decrease marketing expenditure by creating segment specific marketing plans.
Criteria in identifying effective segments
- Measurability: ability to find information regarding the segment, such as demographics or
income level.
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Accessibility: the need to identify segments that can be accessed by the company.
Substantiality: the need to find segments that can be sizable and profitable for the
company.
- Actionability: necessity of identifying segments for which the company can design
effective, attractive marketing programmes.
Through segmentation, marketers can reap the benefits of standardization if they can find a
global segment.
Difficulties in the implementation of market segmentation are:
- Difficulties in measuring proceeds, identifying segments, and contraction in sales volume
stemming from specialized focus on a segment.
Markets are more dynamic in parallel consumer need and preferences continually change; this
causes inconsistencies in segmentation.
Segment’s structure and content is influenced by: changes in customer behavior and needs.
Basis for international segmentation is:
- Geographic characteristics: religion, population, climate
- When marketers consider factors such as countries, cities, neighborhoods,
regions, population density or climate and economic status.
- May allow companies to take advantage of cultural differences.
- Demographic characteristics: age, income, population, gender, education
- Marketers need to select variables carefully.
- Psychographic characteristics: social class, life style, personality
- Deeper understanding of consumer - marketing plans are better suited to
identified segments. Reliant on detailed data, costly to obtain and open to
interpretation.
- Behavioral characteristics: benefits expected, attitude, usage rate, loyalty, purchase
behavior
- Consumer’s brand loyalty is also considered, marketers examine buyer
readiness such as consumer awareness.
Firms evaluate and choose suitable segments for the firm by considering:
- Growth potential and stability, and present size of the segment or market.
- Cultural influences, institutional structures and regulations (international targeting)
- Structural attractiveness - industry conditions and competitors within the segment.
- Compatibility with the segment.
Target markets can be identified as:
1. All consumers within the borders of a country
2. Different segments in each country market
3. Global market segments
International market targeting strategies are:
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Undifferentiated mass-marketing: same marketing plan, differences among segments
are ignored (for example commodity products such as grain, corn, coal, etc.)
- Approach all markets with the same marketing plan and focus on product
features likely to appeal to most buyers.
Differentiated segmented marketing: separate marketing strategies for different
segments
- Separate marketing strategies for different segments. Beneficial for markets that
consist of identifiable segments with different preferences.
Global segment marketing: concentrating on a specific segment across markets: cost
efficiency.
- Pursue concentrated targeted strategies - firms choose the specific segment
among consumers. Target a single segment with a specific marketing plan.
Product characteristics or attributes: focus on a particular feature of the product, such as its
price, reliability, durability or benefits to the consumer.
Price-quality: relationship between the price and the quality of the product.
Product users: associating a product with a specific user or user group, to correlate it with the
user image or characteristics.
Some international positioning strategies are:
- Local consumer-culture positioning: product, brand or the company itself are associated
with local cultural values.
- Foreign consumer-culture positioning: brand, product or the firm itself is associated with
a foreign culture.
- Global consumer-culture positioning: relevance of the firm or its product to a global
culture or segment is emphasized.
A market segment has 4 components:
1. It must be identifiable
2. It must be reachable
3. It is more homogeneous than the market as a whole
4. It is large enough to be profitable
Global market segmentation is the process of identifying segments, whether they are country
groups or across countries comprising potential customers with homogeneous attributes who
are likely to respond to a company’s product or brand in a similar manner.
Recently, behavioral and lifestyle factors are gaining importance.
Most international marketers have traditionally viewed each country as a single market segment
unique to that country. In international marketing, segmenting solely on the basis of countries
can be inappropriate as markets within a given country are often not homogeneous.
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When a company does business in more than 1 country there are 3 approaches to the market:
1. All consumers within the borders of a country
2. Different segments in each country market: companies find the group of customers who
are most suitable for their product and then adopt their strategies to that group’s
behavior
3. Global market segments: all consumers with the same needs and wants in groups of
country markets
If a company has limited resources, a global marketing strategy may be necessary to minimize
product adaptation and marketing costs as it targets a specific segment across markets.
Positioning is the firm’s strategy in creating a unique perception of their product in the
customers’ minds. There are different approaches to positioning.
- Product characteristics or attributes: focus on a particular feature of the product.
- Price-quality: focus on the relationship between the price and the quality of the product.
- Product users: associating the product with a specific user group.
- Use or application: focus on how the product is used.
- Competition: compared to that of the competitors to highlight advantages.
In international marketing it needs to be examined if the same features are valued in all cultures.
Some positioning strategies are:
- Local consumer-culture positioning: highlighting the local culture’s values and meaning
in marketing the product.
- Foreign-consumer culture positioning: the brand itself is associated with a foreign
culture. National origin of the product is highlighted. Perfume association with France.
- Global consumer-culture positioning: emphasizes a product’s attractiveness to a global
culture. Not always effective as different cultures have different lives, tastes and values.
- Technologically intensive products.
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Chapter 13: Exporting and Logistics
Advertising is moving away from traditional means and towards digital media: when
communication is delivered through digital technology such as web, Internet, mobile phones and
other devices with digital signals.
Marketers today need to be alert to innovations and advancements in digital technologies,
gauge which of these new solutions are relevant for their company and incorporate these into
their marketing strategies, plans and communications.
The digital marketing strategy is as follows:
1. Define clear objectives: what online contribution is expected towards sales and impact.
2. Be consistent: with normal marketing strategy in terms of vision, priorities and
communication.
3. Have a clear understanding of the customers that are to be targeted.
4. In the case of new target customers: decide what value proposition is communicated.
5. In the case of existing customers: decide what additional value is communicated.
6. Design a convincing system: to follow the customers from their visit to your media
channel.
7. Design a compelling system: for converting visitors to customers and for retention.
Some benefits of digital marketing are that digital marketing can help companies to:
- Expand the market. It helps sell their products in new geographic markets and groups.
- Diversify and develop. New products can be sold over the internet easily.
- Maintain. Deeper sustainable relationship with new and existing customers as it is easier
to stay in touch. Also easy direct targeted marketing through digital means.
There are several different types of digital media channels.
- Search engines: such as Google. This encourages users to click on a company’s link.
There’s paid presence and sponsored presence using pay-per-click.
- Online PR: mentioning a brand, product or website on somebody else’s blog, or website
visited by target customers. PR can be done through social media.
- Online collaborations: arrangements with other parties, to include the presence of their
logo or brand on their websites or blogs.
- Opt-in emailing: placing ads in another party’s emails. Buy email addresses to direct
future advertising.
- Display advertising: displaying ads on marketing material online to raise brand
awareness or encourage click-through (links hypertext to a particular website).
- Social media channels: social networks and worth of mouth (WOM): advertise and
interact with customers.
A framework for digital marketing:
1. Decide about the promotion/communication mix: how much communication should be
traditional vs. digital.
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2. Define objectives with digital marketing: decide what should be achieved through digital
marketing: the objectives should align with the overall marketing objectives.
3. Develop a digital marketing strategy: consider the mix of digital tools and preferred
channels.
4. Implement the digital marketing strategy: allocate resources and choose platforms.
5. Evaluate and measure the impact of the digital marketing strategy: how to measure
performance of the implemented strategy.
Social media marketing are all activities by companies to communicate offerings that have value
for customers, through social media platforms, channels and tools.
- Traditional and digital marketing is based on the principle of imposing communication to
customers, whether they are interested or not.
In social media marketing: marketers do not just interrupt customers, they also invite them to
interact and contribute their opinion to marketers and other customers.
Companies need to plan and execute social
media marketing systematically:
1. Clarifying objectives to be achieved
through social media marketing.
2. Awareness of target customers and
audiences.
3. Decide on social media channels
and networks.
4. Execute the plan.
5. Method to evaluate and measure.
Export regulations can be designed to
conserve scarce goods for home
consumption or to control the flow of
strategic goods to actual or potential
enemies.
Import regulations may be imposed to protect health, conserve foreign exchange, serve as
economic reprisals, protect home country industry or provide revenue in the form of tariffs.
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Tariffs are the taxes or customs duties levied against goods imported from another country. All
countries have tariffs to raise revenue and protect home industries from competition.
A Common Commercial Policy are rules for exports and imports whose aim is to liberalize world
trade. The key element is the common external tariff (CET), which all members have to apply.
To exporters, exchange restrictions are placed on the flow of currency by some foreign
countries. Exchange restrictions are obstacles to the exchange of money.
Receiving an import license (= exchange permit) is not a guarantee that a seller can exchange
local currency for the currency of the seller. If local currency is in short supply, other methods of
acquiring home-country currency are necessary.
The difference between quotas and import licenses as a means of controlling imports is the
greater flexibility of import licenses over quotas.
- Quotas permit importing until the quota is filled.
- Licenses limit quantities on a case-by-case basis.
Boycotts are an absolute restriction against trade with a country, or trade of specific goods.
Voluntary agreements occur when for example the US arranged voluntary agreements with the
Japanese steel and car industries to limit sales to the USA.
While sanitation certificates, content labeling and other regulations serve a legitimate purpose,
countries can also limit imports by using these restrictions as additional trade barriers.
To facilitate export trade, countries designate areas within their borders as customs-private
areas: areas where goods can be imported for storage with tariffs and quota limits postponed
until the products leave the areas.
Cartel arrangements = competitors or would-be competitors join together to create false
competition.
Foreign-trade zones (FTZs) are zones where products are produced for exporting purposes.
Benefits of companies utilizing a foreign-trade zone include:
1. Lower insurance costs due to greater security required in FTZs
2. More working capital since duties are deferred until goods leave the zone
3. The opportunity to stockpile products when quotas are filled
4. Savings on goods rejected, damages or scrapped for which no duties are assessed
5. Exemption from paying duties on labor and overhead costs incurred in an FTZs
Each export shipments requires various documents to satisfy government regulations:
- Export declaration: to maintain a measure of the quantity of goods shipped abroad.
- Bill of lading: most important, is a contract for shipment between the carrier and shipper,
serves as a receipt from the carrier for shipment and a certificate of ownership.
- Commercial invoice: a statement for the goods sold.
- Insurance policy or certificate: possibility of damage from conditions.
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-
Licenses: additional documents frequently required in export trade.
The most commonly used international trade terms are:
- CIF (cost, insurance, freight): includes the cost of goods, insurance and transportation.
- C&F (cost and freight): cost of goods and transportation costs.
- FAS (free alongside): cost of goods and charges for delivery alongside the shipping
vessel.
- FOB (free on board): cost of goods and delivery to the place named.
- EX (named port of origin): the price quoted covers costs only at the point of origin.
Currently most import and export is done through letters of credit (LC), which shift the buyer’s
credit risk to the bank issuing the LC.
For commodities of high unit value and low weight and volume, air freight is important.
When a foreign marketer begins producing and selling in more than one country and goes
global, implementing logistics management becomes important. It’s the total systems approach
to management of the distribution process that includes all activities involved in physically
moving raw material, in-process inventory and finished goods inventory from the point of origin
to the point of use.
A foreign-freight forwarder (a company that helps other companies in transportation and import
or export matters) provides complete shipping documentation, it gives information and advice on
routing and scheduling, rates and charges, requirements, restrictions, etc. It arranges for the
shipment of goods as the agent for an exporter. It also offers insurance, storage, packaging,
ocean cargo or air freight space.
- An important addition to in-house specialists.
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Chapter 17: International Distribution and Retailing
The distribution network is how the product moves from the producer to the customer.
- An efficient & reliable distribution channel may be the most critical task for a marketer.
A supplier-oriented distribution structure:
- Importer controls a fixed supply of goods which results in a seller’s market: market
penetration and mass distribution aren’t necessary because demand exceeds supply.
- A limited supply of goods are sold at high prices to a small number of customers.
- A limited number of middlemen (businessman, other than producer and consumer who is
involved in the exchange of goods).
- Distribution systems are local and not national in scope.
- The idea of a channel as a chain of intermediaries concluding at the ultimate consumer
isn’t common.
A European distribution structure:
- Transit documents are simplified and there are no custom formalities.
- Firms are using centralized warehouses and distribution centers.
- JIT production and purchasing methods are becoming more popular.
- Elimination of trade barriers has increased Pan-European franchising.
An American distribution structure:
- Huge size of the market leads to large retailers who buy directly from manufacturers.
- Many manufacturers have their own distribution channels or retail stores.
A Japanese distribution structure:
- High density of middlemen, retailers and wholesalers.
- A traditional structure serves consumers who make small & frequent purchases.
A German distribution channel:
- Manufacturers depend on wholesalers to provide various services to other distributors.
- Wholesalers and middlemen are tied to manufacturers by practices, to ensure marketing
support for their products and to exclude competitors from the channel.
- Emphasis on loyalty: value system supports long-term dealer-supplier relationships that
are resistant to change, when each party perceives economic advantage.
Recent trends show that traditional distribution systems are being replaced with more efficient
alternatives.
E-commerce means buying and selling through the internet or comparable systems.
- A distinct form of direct marketing.
- Involves direct marketing from the manufacturer, retailer, service provider or other
intermediary to the final user.
- Placing and processing online orders is cheaper and faster.
E-commerce facilitates cost savings by reducing procurement and processing costs, enabling
better supply-chain management and enabling tighter inventory control.
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Some factors influencing marketing through the internet are: culture, adaptation, local contact,
payment, delivery & promotion
Internet advertising is advertising on and through websites.
- Interactive and customizable but can’t replace mass advertising in other media.
There are different groups of online shoppers:
- Shopping avoiders: dislike regular grocery shopping.
- Necessity users: limited in their ability to go shopping.
- New technologists: younger customers who embrace new technologies.
- Time-starved: don’t worry about the price and pay extra to save time.
- Responsibles: have a lot of free time and enjoy shopping.
- Traditional customers: old people who avoid new technologies and enjoy shipping irl.
Channel length is shorter for industrial goods and high-priced consumer goods than for
low-priced products. Inverse relationship between channel length and size of the purchase.
Non-existent channels: often appropriate channels don’t exist, but several distinct channels are
necessary to reach different segments so companies have to invest heavily in distribution.
Blocked channels: a channel of choice may be blocked because of competitors, trade
associations or cartels, associations of middlemen, etc.
Stocking: middlemen limit inventories owing to the high costs and risks involved. To encourage
middlemen, manufacturers must provide local warehousing and assistance.
Power and competition: when large wholesalers distribute to a mass of middlemen, distribution
power tends to concentrate.
Once the marketer has defined the company objectives, the next step is the selection of
intermediaries needed to develop a channel. Middlemen are differentiated on whether or not
they take title to the goods.
Agent middlemen - representatives
-
Work on commission
Arrange for sales in the foreign
country
Don’t take title to the merchandise
Manufacturers retains the right to
establish guidelines and prices
Merchant middlemen - take title
-
Take title to manufacturer’s goods and
assume trading risks
Less controllable than agent
middlemen
Provide import and export wholesaling
functions
Primarily concerned with sales and
profit margins
Criticized for not representing the best
interests of a manufacturer
Some home-country middlemen are:
Home-country (domestic) middlemen are located in the producing firm’s country.
- They are used when the marketer is uncertain or inexperienced with foreign markets and
wants to minimize investment and commitment.
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Export management company (EMC) is an important middleman for firms with small
international volume who are unwilling to involve personnel in the international function.
- Minimum investment and no company personnel is required.
Trading companies accumulate, transport and distribute goods from many countries. They
operate as both importers and exporters.
Complementary marketers (piggybacking) have excess marketing or desire for a broader
product line and so take on additional lines for international distribution (also piggybacking).
Manufacturer’s export agent (MEA) is an individual agent middleman providing a selling service
for manufacturers. Unlike the EMC, the MEA does not serve as the producer's export
department but has a short-term relationship.
Brokers are any middlemen performing low-cost agent services.
Export merchants are essentially domestic merchants operating in foreign markets. They
purchase goods from manufacturers, ship them to foreign countries and take full responsibility
for their marketing. They sometimes utilize their own organizations but usually use middlemen.
Some foreign-country middlemen are used for greater control over the distribution process, and
so international marketers may elect to deal directly with middlemen in the foreign market.
- Advantages are: shorter channels and middlemen in constant contact with the market.
Manufacturer’s representatives have a variety of titles and take no credit, exchange or market
risk but deal strictly as field sales representatives.
Distributors: have exclusive sales rights in a country and are dependent on supplier companies.
Here manufacturers retain control over prices, promotion, inventory, etc.
Managing agent: conducts business with a foreign nation under contract to the parent company.
They sometimes invest in the operation as well.
Dealer: anyone who has a continuing, close working relationship with a supplier in buying and
selling goods. This is the last step in the channel of distribution.
Wholesalers and retailers facilitate the exchange between manufacturer and consumer.
Prior to selecting a middleman, several things have to be taken into account:
1. Identify specific target markets within and across countries.
2. Specify marketing goals in terms of volume, market share and profit margin
requirements.
3. Specify financial and personnel commitments to develop international distribution.
4. Identify control, length of channels, terms of sale and channel ownership.
There are 2 types of channel cost: capital/investment cost of developing the channel and the
cost of maintaining it.
- Marketing cost = the entire difference between the factory price and the price the
customer ultimately pays for it.
Another major factor in affecting the choice of the channel is the amount of market coverage to:
1. Gain the optimum volume of sales obtainable in each market
2. Secure a reasonable market share
3. Attain satisfactory market penetration
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Many companies don’t attempt full-market coverage but seek significant penetration in major
population centers.
Locating channel members should begin with the study of market and criteria for evaluating
middlemen servicing said market. Factors to consider are productivity or volume, financial
strength, managerial stability and capability and a reputation of the business.
- The screening process is as follows:
1. Letter including product information and requirements to prospective middleman
2. Follow-up to the best respondents for more information
3. Credit check and references from other clients
4. Personal check of most promising firms
Selecting the middleman who can perform satisfactorily:
- Agreements must specify the responsibilities and annual sales minimum.
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Chapter 15: Developing International Marketing Strategies
Consumer goods are goods that consumers buy to consume.
Because of the diversity in international markets the appropriate strategy for a specific market is
determined by the company’s resources, the product and the target market.
In mature markets of the industrialized world, consumers’ tastes become more sophisticated
and complex, which increases in purchasing power.
3 strategies:
1. Domestic-market-extension orientation: selling the same product that is sold in the home
country internationally.
2. Multidomestic-market orientation: developing different products to fit the uniqueness of
each country market.
3. Global orientation: seeking commonalities in needs among sets of country markets and
responding with a global product.
In a competitive struggle, quality products that meet the needs and wants of a market at an
affordable price should be the goal of any marketing firm. Sometimes, this could mean:
- Differentiated products: products that are different from other similar products. Or:
- Global products: standardized products that can be sold all over the world without
adaptation.
Advocates of standardization (when the sa ko me products are produced for many markets)
believe that product standardization leads to production economies and other savings.
- Only makes sense when there is adequate demand for the product.
Customized products are products that are modified for each customer.
Hand in hand with global products are global brands: the worldwide use of a name, term, sign,
etc. to identify goods or services of 1 seller: Coca Cola, Kodak, Nike, Apple, etc.
Physical attributes (physical characteristics) generally are required to create the primary function
of a product. The primary function of a cat is to move people from A to B.
Non-physical features (perceptual characteristics) sometimes need to be adapted.
- When Coca Cola changed Diet Coke to Coke Light when it was introduced in Japan
because Japanese women don’t like to admit dieting.
The greater the cultural differences between 2 markets, the greater the adaptation necessary.
The first step in adapting a product to a foreign market is to determine the degree of newness.
Some products in Western countries may be perceived as new in other countries, in that case
they have to be treated as innovations.
The goal of a foreign marketer is to gain product acceptance by the largest number of people in
the shortest time span. 3 variables affect the rate of diffusion (rate at which a product spreads):
1. Congruent innovation: no newness whatsoever. Introduces more variety and quality, or
functional features or style.
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a. Cane sugar vs. beet sugar
2. Continuous innovation: least influence on established consumption patterns. Usually an
alteration of a product rather than a new one.
a. Different coffee flavors or fluoride toothpaste.
3. Dynamically continuous innovation: the creation of a new product as a result of new
consumption patterns. Sometimes also considerable alteration.
a. Electric toothbrushes, electric hair-curlers, air-conditioning, frozen dinners.
4. Discontinuous innovation: the creation of previously unknown products.
a. The television, the computer, fax machine, etc.
A product may also have to change to meet mandatory requirements: requirements a company
must meet. This can range from package changes to total redesign of the core product.
An important approach in analyzing products for foreign markets is determining the stage of the
product’s life cycle.
Evaluating a product for marketing in another country requires a systematic method of
screening to determine if there are cultural resistances to overcome or mandatory changes.
- Only when the psychological and physical dimensions of the product are known can the
decision for adaptation be made. Products can be screened on 2 different bases:
1. Analysis of characteristics of innovations: to determine if there are cultural reasons why
a product will be better accepted if adapted. Attributes of a product that cause market
resistance to its acceptance and affect the rate of acceptance can be determined if a
product is analyzed by the 5 characteristics of innovation.
a. Relative advantage: the perceived value of the new product relative to the old
b. Compatibility: its compatibility with acceptable behavior, norms, values, etc.
c. Complexity: the degree of complexity when using the product
d. Trialability: the degree of economic or social risk associated with product use
e. Observability: the ease with which the product benefits can be communicated
2. Analysis of product components: to determine if there are mandatory or physical reasons
why a product must be adapted.
a. The core component: the physical product, its design and functional features, etc.
b. The marketing component: style features, packaging, labeling, trademarks, etc.
i.
Labeling laws indicate what should be mentioned on the package.
c. The support services component: repair and maintenance, instructions, etc.
A quality product is one that satisfies customer needs, has minimum defects and is priced
competitively, as the power in the marketplace is shifting from a seller’s market to a customers’.
- Customers have more choices because there are more companies competing.
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Chapter 18: Pricing for International Markets
Setting the right price is the key to success. Prices are established by expediency rather than
design. Pricing activity is affected by the country in which business is being conducted, the type
of product, variations in competitive conditions and other strategic factors.
Parallel imports occur when products are imported to a country without the consent of the brand
owner. Also called the gray market. Parallel imports develop when importers buy products from
distributors in one country and sell them in another to distributors who aren’t part of the
manufacturer’s distribution system.
- A British pharmaceutical company sells drugs in a developing country at a lower price
only to discover that the discounted drugs are exported to a third country where they’re
in competition with the same product sold for higher prices by the same firm.
Price differentials between country markets is another condition conducive to the creation of
parallel markets.
Diverters are enterprising people who for example legally buy Levi’s 501s at retail prices, during
sales, and then resell them to foreign buyers.
Firms have to decide when to follow a skimming or penetration-pricing.
- Skimming: charging a high price to maximize profit in the early stages of production.
- When a market is price-insensitive and willing to pay a premium price.
- Markets where there’s 2 income levels: rich and poor.
- Penetration-pricing: charging lower prices to gain market share.
- More profitable than skimming if it maximizes revenues and builds market share
as a base for the competition that is sure to come.
Leasing means borrowing, renting or paying in installments.
Price decisions are viewed 2 ways:
1. Pricing as an active instrument of accomplishing marketing objectives
2. Pricing as a static element in a business decision
Profit is the most important pricing objective.
Price escalation is an increase in price when products move from one country to another. It
especially relates to costs incurred as a result of exporting products from one country to
another: shipping costs, insurance, packing, tariffs, duties, etc.
- Specific duties: flat charge per unit imported: 15 cents per loaf of bread
- Ad valorem: a %of the value of the goods imported: 20% of the value, most used
- Combination tariffs: both specific and ad valorem
In countries with rapid inflation (= exchange variation = variation in the exchange rate of 2
currencies) the selling price must be related to the COGS and the cost of replacing the items.
Hedging is insuring against a negative currency rate.
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Channel length and marketing patterns vary widely. In some countries, channels are longer and
middleman margins higher than its customary.
Price control occurs when prices are regulated by an authority.
Retailer mark-ups are the profit margin of the retailer.
There are several approaches to lessening price escalation:
1. Lower the cost of goods: if the manufacturer’s price is lowered, the effect is felt
throughout the chain: reduce manufacturing costs.
2. Lower the tariffs: reclassify products, consider local content.
3. Lower the distribution costs: shorten channels, fewer middlemen, lower taxes.
4. Use foreign-trade zones: ship goods unassembled to lower costs.
A company can also use competitors’ prices as a landmark for positioning its products as
compared to those of competitors.
Demand elasticity is when demand for a product changes due to minor changes in the price.
- Demand = elastic if demand is increased by lowering the price.
- Demand = inelastic if demand isn’t significantly increased by lowering the price.
Price freezes occur when the price of a product can’t be increased.
Administered pricing relates to attempts to fix prices for an entire market.
Price fixing is when competing companies agree to set a price for their products.
- Cartels, arrangements, etc.
Cartels exist when multiple companies producing similar products work together to control
markets for the types of goods they produce.
Trade associations are similar, they are associations of companies belonging to the same
industry.
Transfer pricing is when a company uses selective prices for internal transactions, for example
between two subsidiaries.
Predatory pricing is exercised when a stronger competitor sets its prices very low with the
purpose of forcing out an equally efficient competitor who can’t match these prices.
Dumping is when a product is sold for a lesser price than its actual cost.
- Prices are maintained in the home-country and reduced in foreign markets.
Countertrade = when products are exchanged for other products instead of cash. 4 types:
1. Barter: direct exchange of goods between 2 parties: no money changes hands.
2. Compensation deals: payment is involved: 70% in currency and 30% in materials.
3. Counter-purchase: offset-trade: 2 contracts for different periods of time.
4. Product-buy-back: when a company buys back some of the products produced in its
subsidiaries.
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Chapter 12: International Branding Strategies
A successful brand is an identifiable product, service, person or place, augmented in such a
way that the buyer or user perceives relevant, unique added values which match their needs
most closely.
Brand loyalty is when a customer always buys the same brand.
Customer loyalty is when a customer always buys one company’s products.
Branding is the developing and building the reputation of a brand name.
Companies that already have successful country-specific brand names have to balance the
benefits of a global brand against the risk of losing the benefits of an established brand.
Many factors affect brand image, and one factor is country-of-origin effect (COE) on the
market’s perception of the product. COE is the influence of country of manufacture on a
consumer’s positive or negative perception of a product.
- English tea, French fashion, Italian leather.
There’s a tendency to favor foreign-made products (made in a different country from the one
they’re being sold in) over domestic-made products (sold in the country in which they were
made) in less-developed countries.
Country stereotyping can be overcome with good marketing.
Pioneering brands (brands that were first in the market) are often more positively perceived than
follower brands (brands that came later to the market). For example, Apple’s iPod.
Own brands are retailers’ own brands.
Brands satisfy both buyers and sellers. For buyers, brands reduce search costs by helping them
identify specific products, perceived risk by assuring a buyer of a level of quality. For sellers,
brands facilitate repeat purchases, promotional efforts, premium pricing, etc.
Brands always have several characteristics:
1. Attributes: the high level of safety features within an Audi car
2. Benefits: what the customer is interested in, more secure in an Audi
3. Image: the consumer expresses themselves through their car
4. Personality: if the care were a person it would be …, …, …
5. Consistency: the customer can be sure of the quality every time they buy the product
6. Differentiation: convinces the customer that the offer is different to other offers
7. Equity: the value it provides to the firm and its stakeholders
There are 3 dimensions of brand value:
1. Functional: the performance of the product: a meal to satisfy hunger
2. Expressive: says something about the self-image of the consumer
3. Central: combination of the previous 2
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Brand equity refers to the incremental utility or value added to a product by its brand name. It’s
based on the idea that a brand is an important asset that can be calculated in financial terms.
To create a strong international brand, a marketer needs to develop and implement a consistent
and informed marketing strategy, which will help the firm to achieve the most benefits of
developing brands. It should follow these 7 steps:
1. Analyze the competition
2. Identify the target customer
3. Decide on the positioning in the particular market
4. Develop a consistent marketing communication strategy
5. Decide on a global vs. local content mix
6. Create a balance between brand elements
7. Establish an international brand equity measurement system
There are several ways a firm can structure its brand portfolio:
- Monolithic: 1 name and visual → BMW
- Endorsed: corporate identify in association w/ subsidiary names → Marriott Hotel
- Branded: under totally different names → Unilever’s brand portfolio
Another way to structure a brand portfolio is based on 6 levels that represent a certain role for
the particular brand, its status and its relationship with the products the brand encompasses.
1. Product brand: 1 brand, 1 product, 1 promise
2. Line brand: builds on an extension of a specific concept over several product categories
3. Range brand: similar to line brand but holds a more long-term perspective
4. Single brand name: promoted through a single promise over a range of products
5. Umbrella brand: builds on overarching - Toyota & Honda
6. Endorsing brand: builds on a strategy where the master brand inly acts as a guarantor
concerning a specific aspect: Rainforest Alliance
Branding shouldn’t be confused with advertising. Advertising is one of the many vehicles for
building or maintaining a brand but is not the only element necessary to build a brand.
Brand adoption model:
- Awareness → i have heard of the brand
- Consideration → i will think about using the brand
- Trial → i will use the brand
- Retrial → i will use the brand again
- Adoption → i love this brand this is the only brand i will use
- Recommendation → i love the brand so much i tell many others about it
A favorable corporate identity is considered one of an organization’s most important assets and
deserves management’s constant attention.
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Chapter 14: Ethics and Social Responsibility in International Marketing
Green marketing: marketing decisions that take the environment into consideration.
Green dot programme: a logo that shows that the product adheres to Green marketing
Anti-trust laws: prevent businesses from creating unjust monopolies
Social responsibility: when a company is concerned about the implications of its decisions on
society in general
Stakeholders are parties that have an interest in the company’s activities.
Green movement is a political/consumer movement favoring environmentally-friendly
approaches.
Eco-labelling is a label or logo to show that a company is socially responsible.
There’s a simple ethical test for a business decision:
- Transparency: do I mind others knowing what I have done?
- Effect: who does my decision affect or hurt?
- Fairness: would my decision be considered fair by others?
- Check: should I check the consequences of my decision for the public?
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Chapter 19: International Promotion and Advertising
Intense competition for world markets and the increasing sophistication of foreign consumers
have led to a need for more sophisticated advertising strategies.
Local responsiveness refers to when a company adapts its products and strategies according to
local needs and requirements.
Pattern advertising is a global advertising strategy with a standardized basic message allowing
some degree of modification to meet local situations. Plan globally, act locally.
A company should first identify market segments.
In the communications process, each of the 7 identifiable segments can ultimately affect the
accuracy of the process:
1. An information source: a marketing executive with a product message to communicate
2. Econding: the message from the source is converted into effective symbolism
3. A message channel: the advertising media that conveys the message to the receiver
4. Decoding: the interpretation by the receiver of the symbolism transmitted
5. Receivers: consumer action by those who receive the message
6. Feedback: information about the effectiveness of the message
7. Noise: uncontrollable and unpredictable influences
Comparative advertising compares you with your competitors.
Mock Exam
Firms with a multidomestic market orientation would be classified in the EPRG schema as
ethnocentric
The promotion of a product influences a marketer’s decision
The 2 determining factors by the BCG portfolio analysis are country attractiveness and
competitive strength of the company
The first stage in the internationalization of a firm as suggested by the establishment chain
model is exporting products via representatives to foreign markets
Exporting is the easiest and most common approach employed by companies taking their first
international step
In international segmentation, measurability is a major criterion in identifying effective
segments, refers to the ability to find information such as demographics or income level
regarding the segments
Age-based segmentation is an example of demographic segmentation
The second step in the segmentation targeting and positioning process is distinguishing the
segments to which a company can appeal, given consumer needs, preferences, company
resources and the competitive landscape
If a company first began with the production of tomato ketchup and then moved on to produce
baked beans, this is an example of brand extension
The first step a company is most likely to carry out while developing a brand strategy is
analyzing the competition
A commercial invoice, an export document, is a bill or statement of the goods sold
A foreign-freight forwarder arranges for the shipment of goods as the agent for an exporter
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Foreign-trade zones are areas where products are produced mostly for exporting purposes
Trialability of an innovation refers to the degree of economic risk associated with use
Major adjustments in the platform aspect of the core component can affect product
processes
Unlike an export management company, a manufacturer’s export agent has a short-term
relationship with manufacturers
Piggybacking refers to the practice of a company using another company’s channels to export
its products
When a product is sold for a lesser price than its actual cost, it’s known as dumping
A cartel is used to describe a group of companies which produce similar goods and work
together to control markets for the types of goods they produce
After determining the promotional mix, the next step in the international promotion process is
developing the message
Multinational advertising agencies with local branches are able to provide a well-coordinated
worldwide advertising campaign
Comparative advertising directly likens you with your competitors
A survey is a collection of information acquired through a list of questions from a large number
of respondents
The income-elasticity coefficient is determined by dividing the percentage change in the
quantity of a product demanded by the percentage change in income
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