BUS 337 INTERNATIONAL MARKETING
MAKE UP EXAM KEY
SEPTEMBER, 2013
DURATION OF EXAM: 60 MIN
Name and Surname: Mersid Poturak
Student’s ID :
I. Provide the explanations for the questions 1-10 (each question - 10 points)
1. What are two important functions that brands perform and what is a brand image?
A brand is a complex bundle of images and experiences in the customer’s mind.
Brands perform two important functions:
1. A brand represents a promise by a particular company about a particular product.
2. Brands enable customers to better organize their shopping experience by helping them seek out
and find a particular product.
The sum of a consumer’s impressions is a brand image, defined as perceptions about a brand as reflected
by brand associations that consumers hold in their memories
2. Explain the differences between extension and adaptation strategies?
An extension strategy that calls for offering a product virtually unchanged (i.e., “extending” it) in
markets outside the home country.
An adaptation strategy involves changing elements of design, function, or packaging in response to needs
or conditions in particular country markets.
3.
Describe three policy alternatives in global pricing (ethnocentric, polycentric and geocentric).
An extension or ethnocentric pricing policy calls for the per-unit price of an item to be the same
no matter where in the world the buyer is located.
The second policy, adaptation or polycentric pricing, permits subsidiary or affiliate managers or
independent distributors to establish whatever price they feel is most appropriate in their market
environment. There is no requirement that prices be coordinated from one country to the next.
IKEA takes a polycentric approach to pricing.
The third approach, geocentric pricing, is more dynamic and proactive than the other two. A
company using geocentric pricing neither fixes a single price worldwide, nor allows subsidiaries
or local distributors to make independent pricing decisions. Instead, the geocentric approach
represents an intermediate course of action. Geocentric pricing is based on the realization that
unique local market factors should be recognized in arriving at pricing decisions. These factors
include local costs, income levels, competition, and the local marketing strategy. Price must also
be integrated with other elements of the marketing program.
4. Explain the major categories of channel utility.
The major categories of channel utility are:
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place utility (the availability of a product or service in a location that is convenient to a potential
customer),
time utility (the availability of a product or service when desired by a customer),
form utility (the availability of the product processed, prepared, in proper condition and/or ready
to use), and
information utility (the availability of answers to questions and general communication about
useful product features and benefits).
5.
Describe the global advertising content: The “standardization” versus “adaptation” debate.
The key question for global marketers is whether the specific advertising message and media strategy
must be changed from region to region or country to country because of environmental requirements.
Proponents of the “one world, one voice” approach to global advertising believe that the era of the
global village has arrived and that tastes and preferences are converging worldwide.
According to the standardization argument, people everywhere want the same products for the same
reasons.
Advertisers who prefer the localized approach are skeptical of the global village argument.
They assert that consumers still differ from country to country and must be reached by advertising
tailored to their respective countries.
Global companies have embraced pattern advertising—the development of a basic pan-regional or
global communication concept for which copy, artwork, or other elements can be adapted as required for
individual country markets.
6. Briefly describe global marketing communications decisions: sales promotion, personal selling and
direct marketing.
Sales promotion refers to any paid consumer or trade communication program of limited duration that
adds tangible value to a product or brand.
Personal selling is person-to-person communication between a company representative and a
prospective buyer
The Direct Marketing Association defines direct marketing as any communication with a consumer or
business recipient that is designed to generate a response in the form of an order, a request for further
information, and/or a visit to a store or other place of business.
7.
Define Industry Convergence.
The digital revolution is causing dramatic in industry structure. Convergence is a term that refers to the
coming together of previously separate industries and product categories
8.
Identify current trends in global e-commerce.
The term e-commerce refers to the general exchange of goods and services using the Internet as a
marketing channel.
An important trend is paid search advertising, whereby companies pay to have their ads appear when
users type certain search terms. Yahoo! recently paid $1.6 billion to acquire Overture, a company
specializing in paid search advertising.
Although creative possibilities are limited with banner ads and clickthrough rates—the percentage of
users who click on an advertisement that has been presented—are typically low, the number of companies
that use the Web as a medium for global advertising is expected to increase dramatically over the next
few years.
9. Explain the term “global competition”
Global competition occurs when a firm takes a global view of competition and sets about maximizing
profits worldwide, rather than on a country-by-country basis. If, when expanding abroad, a company
encounters the same rival in market after market, then it is engaged in global competition.
10.
Identify four generic strategies for creating competitive advantage
Four generic strategies are: cost leadership, product differentiation, cost focus, and focused
differentiation.