International Business Study Guide

IBM 414 Study Guide Ch12 Global Marketing worry Planning and Organization Global Marketing The trend back toward kettle of fish Ca drug abused by the new efficiencies of customization Made possible by the Internet increasingly flexible manufacturing makees From the commercialiseing perspective customization is always best Global grocerys deal to homogenize and diversify simultaneously Best companies will avoid pin down of foc employ on country as the primary segmentation shifting immaterial(a) Marketing- is the performance of business activities designed to plan, equipment casualty, promote, and direct the flow of a familys goods and service of processs to consumers or users in to a great extent than one nation for a profit. An entry st yardgy into transnational commercialise should reflect on compend Market characteristics Potential sales Strategic effectance Strengths of topical anaesthetic resources hea wherefore differences landed estate restrictions Company capabilities and characteristics Degree of near- grocery knowledge Marketing involvement heed commitment Exporting Indirect Exporting-requires no equity investment and on that decimal pointfrom has a low risk, low rate of return, and minor match. Licensing A bureau of leavening a foothold in foreign marts without large capital outlays A favorite strategy for small-scale and medium-sized companies Legitimate means of capitalizing on adroit property in a foreign marketJoint Venures-When two or much small-armicipating companies join forces to create a separate legal entity to quicken doing business in the internationalistic atomic take 18na aspire Investment Factors that run the structure and performance of direct investments Timing The growing complexity and contingencies of contracts dealing embody structures Technology transfer Degree of output unlikeiation The prior experiences and cultural diversity of acquired firms Advertising and reputation barriers Examp leWhen a go with sells to a customer in an new(prenominal) country, the company is into Direct exporting.Strategic International Alli bungholece Consortia Similar to joint ventures and could be classified as such(prenominal) take away for two unique characteristics Typically involve a large issuance of participants Frequently operate in a country or market in which none of the participants is currently active Consortia argon developed to kitten financial and managerial resources and to slighten risks Joint Ventures JVs are established, separate, legal entities The hold intent by the partners to share in the solicitude of the JV there are partnerships surrounded by legally in bodilyd entities such as companies, lease organizations, or governances, and non between individuals Equity positions are held by from each one of the partners privilege Franchiser provides a standard package of products, systems, and care services Franchise provides market knowledge, capital, and personal involvement in focusing Expected to be the fastest-growing market-entry strategy Two types of franchise agreements Master franchise Gives the franchisee the rights to a particularized area with the authority to sell or establish subfranchises LicensingContract Manufacturing-is a producer that contracts with a firm for components or products. It is a form of outsourcing. Contracting Management- is the way of contracts do with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliancy with the terms and conditions, as well as memoranduming and agreeing on any changes or amendments that whitethorn arise during its implementation or execution. CH8 Developing a global vision though merchandising query Challeneges and puzzles The major worry is converting a series of often am bombasticuous business problems into tightly wasted and achievable research objectives The graduation, to the highest degree crucial step in research is more critical in foreign markets because an unfamiliar environment tends to could problems commentary Other difficulties in foreign research stem from failures to establish problem limits broad enough to include all relevant variables Environmental conk outning- deliberate monitoring of an organizations internal and external environments for detecting early signs of opportunities and threats that may deviate its current and future plans.Marketing Screening- The process of discovering relevant information about a tradable asset in order to determine a fair price for the asset. Primarily used to avoid creating an adverse transaction. Steps to market Screening- Market- A regular gathering of people for the purchase and sale of provisions, livestock, and separate commodities. Requirements of ruling Market Segmentation calculate the psychographic segments profiled in the Worldwide Global S dissolve study How go off international m arket demand be estimated? scallywag 236When desired stats arent available a close approximation can be made using local production figures addition imports, with adjustments for exports and current descent levels CH13 Products and services for consumers Why are product strategy decisions the approximately crucial ones in the marketing mix? What two errors do transnational product managers tend to commit? Define and explain Product, Quality Features and benefits Reliability, intensity Product Homologation. What are the standardization/adaptation strategies that a marketer can implement and when would you recommend them? What is meant by the diffusion of motivations?What are the degrees of newness that a product can exhibit and what are the (perceived) product characteristics of an innovation that affect its rate of acceptance? What is product counterfeiting and how can it be fought? CH14 Products and Services for Businesses ISO 9000 positively affects the performance and stock prices of firms Certification of the existence of a fiber control system a company has in place to ensure it can meet published quality standards Describes terce quality system models Defines quality concepts Gives guidelines for using international standards in quality systems Generally voluntary EU Product Liability Directive Now a competitive marketing tool in Europe and around the founding The ACSI approach profession Shows Secondary methods for marketing Advertising in print media Catalogs Web sites Direct mail Trade shows have induce the primary and most of import vehicle for doing business in many foreign countries Total yearly media budget spent on transaction events Europeans 22 percent Americans 5 percent Benefits Provide the facilities for a maker to exhibit and demonstrate products to voltage users Allow manufacturers to view competitors products Are an opportunity to create sales and establish transactionhips with agents, distributors, franchisees, and suppl iers Online trade shows Become useful in difficult economic and/or political circumstances Are obviously a less than able substitute for live trade shows CH18 Pricing for International Markets expense Escalation- A disparity in pricing where goods have higher be in a foreign market than in the domestic market due to passage and exporting be. Price escalation can also resuscitate to the sum of cost factors in the distribution take which add up to a higher final cost for a product in a foreign market.The difference between the domestic price and the buttocks price in foreign markets due to the application of duties, dealer margins and/or other transaction costs. How can the effect of price escalation be diminish? Lowering cost of goods Manufacturing in a third country Eliminating high-priced functional features Lowering overall product quality Lowering tariffs Reclassifying products into a different, and lower customs classification Modify product to qualify for a lower tar iff rate within classification Requiring assembly or further processing Repackaging Lowering distribution costs Shorter channels reduce or eliminating middlemen Using foreign trade zones to lessen price escalation leaven free trade zones (FTZs) or free ports Tax-free enclave not considered part of country Postpones payment of duties and tariffs Dumping To place (goods or stock, for example) on the market in large quantities and at a low price. Use of fringy (variable) cost pricing Selling goods in foreign country at a lower place the price of the same goods in the theater market Gray Market- A market where a product is bought and sold outside of the manufacturers authorized barter channels.The unofficial trading of a companys shares , usually before they are issued in an initial semipublic offering (IPO). Occur whenever price differences are greater than cost of transportation between two markets Major problem for pharmaceutic companies Exclusive distribution Transfer Pricin g Prices of goods transferred from a companys operations or sales units in one country to its units elsewhere May be adjusted to enhance the ultimate profit of company Benefits Lowering duty costs Reducing income taxes in high-tax countries Facilitating dividend repatriation when dividend repatriation is curtailed by government policy Objectives Maximizing profits for corporation Facilitating parent-company control Providing all levels of management control over profitability Arrangements for pricing goods for intracompany transfer Sales at the local manufacturing cost plus a standard markup Sales at the cost of the most efficient producer in the company plus a standard markup Sales at negotiated prices Arms-length sales using the same prices as quoted to independent customers Countertrade Types of countertrade Barter Compensation deals Counterpurchase or commencement ceremony trade Product buyback agreement Problems of countertrading Determining the value of and potentiality dema nd for the goods offered Barter houses The Internet and countertrading Electronic trade dollars Universal currency/IRTA Proactive countertrade strategy Included as part of an overall market strategy Effective for deputize-poor countries Administered Pricing- The price of a good or service as dictated by a governmental or other governing agency. Administered prices are not determined by regular market forces of supply and demand. Ch16 Intergrated Marketing Communications and International Advertising 6) What are the four methods of promotion and how can they be used in nternational marketing? Integrated marketing talks (IMC) are composed of advertizing, sales promotions, trade shows, personal selling, direct selling, and public relations Sales promotions-marketing activities that stimulate consumer purchases and emend retailer or middlemen effectiveness and cooperation Public relations (PR)-creating good relationships with the pop press and other media to help companies communi cate messages to their publics-customers, the general public, and governmental regulators.Public relations firms billings in the international arena have been growing at divalent digit rates for some long time. Handling such international PR problems as global workplace standards and product safety recalls has become big business for companies serving large companies. International advertising-global mass media advertising is a powerful tool for cultural change, and as such, it receives continuing scrutiny by a wide variety of institutions. What are the pros and cons of standardization, adaptation and glocalization in international advertising?Standardization Pros Standardized marketing for global companies typically offers portentous cost benefits. If the same message works universally, you dont have to spend gold to develop customized marketing messages. While you would have to adapt the language to the local markets, the conceptual premise of your messages can remain constant. Also, if your brand theme is powerful and has global appeal, a standardized approach helps people around the world share in the value proposition you offer Cons Global marketing standardization is not sensible in all cases.If people use your products differently or if your brand message doesnt work everywhere, you need to be flexible. McDonalds, for instance, has been successful selling its western and American cultural appeal in some countries such as Russia, Japan and France. However, the fast food mountain chain has emphasized its relationship with local suppliers and management in some countries in the Middle East and elsewhere, where attitudes toward western and American culture are less welcoming. Globalization Pros The main benefit of globalization is that it lets you reach a serve up more customers.As long as there is demand in an overseas market for a product or service your business offers, there is a customer base. A product that sells successfully at home will often do well in international markets, says Wesley Johnston, a marketing professor at Georgia State University. Electronics and other tech products are examples of consumer goods that sell well on the global market. Cons Before winning your business worldwide, make sure there is a market for it. Consumers in other countries often have different preferences and needs and might not have much interest in buying your product.For example, if you sell Canadian flags, you might not find much demand in countries outside Canada. Another risk of going global is that it can be costly. This is especially true if you decide to set up operations in other countries. Finally, different countries have different regulatory standards. Products that can be made and sold freely in some markets might run up against stiff regulatory hurdles in other countries. Adaptation inform the statement, The search for a global advertising campaign can be the spearhead of the search for a coherent global marketing stra tegy. What types of errors are committed when advertisers endeavour to go global? Consumer criticism Deceptive advertising Decency and blatant use of sex Self-regulation Government regulations What challenges confront international advertisers when they attempt to develop creative and media strategies? Language is one of the major barriers to effective communication through advertising Translation challenges Low literacy in many countries treble languages within a country In-country testing with the target consumer group avoids problems caused by linguistic differences ) Can personal selling and sales promotion be standardized in international markets? What role do publicity and public relations play in international marketing? what are the three sources of force for international assignments and how can U. S. personnel be trained for such assignments? Expatriates- Numbers are declining Important for highly technical or tortuous products High cost Cultural and legal barriers Li mited number of high-caliber personnel willing to live abroad Virtual Expatriates- Manage operations in other countries but dont live there local anaesthetic Nationals Transcend both cultural and legal barriers Familiar with distribution systems and referral networks home office personnel may ignore their advice Lack of availability Sales positions viewed negatively What are the differences in cultural values that can affect management practices in foreign cultures? How has the profile of global managers changed in recent years? Objectivity Separating people from the problem Competitiveness and equality Nipponese expect to be the best negotiators with the highest profits Japanese appear to be more equitable with buyers Time The passage of time is viewed differently across cultures Describe the negotiation process. Stages 1. Non Task Sounding Report 2. Task related exchange of info Sales Pitch Let the foreign counterparts bring up business Expect a large number of questions but little feedback Allow periods of silence Use multiple communication channels derive the lack of, or the bluntness of negative feedback Meet aggressive first offers with questions, not anger 3. Persuasion Handling of objectives Task-related information exchange versus purview Avoid threats, warnings, and other aggressive negotiation tactics Avoid ablaze outbursts Ask more questions Use third parties and information channels of communication 4. Consensus & agreement The close Write down concession-making strategies Understand differences in decision-making styles In many cultures, no concessions are made until the end of the negotiations CH 15 International Marketing Channels 8 Describe the difference between traditional, import-oriented distribution systems and modern ones. paginate 421 In an imported-oriented or traditional distributution an importer controls a pertinacious supply of goods, and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers. Describe the current Japanese trunk how can an international marketer secure a foothold in the Japanese System? Small retailers are considered to be the foundation of the Japanese distribution system. scattering in Japan has long been considered the most effective nontariff barrier to the Japanese market.What are the pros and cons of using foreign vs. home country middlemen? Foreign Middlemen-Pros-shorter channels and deal with middlemen in constant contact with the market (page 434) Home Country Middlemen-(domestic middlemen) companies relegate foreign market distribution to others. Offer many advantages for companies with small international sales volume, those inexperienced with foreign markets, those not wanting to become immediately involved with the complexities of international marketing, and those wanting to sell abroad with stripped financial and management commitment.Con- limited control over the entire p rocess. Page 431 What are the strategic goalthe 6Cs of channel strategy? page 436 COST CAPITAL REQUIREMENTS CONTROL COVERAGE CHARACTER CONTINUITY How should you go about locating, selecting and motivating middlemen? page 438 Locating-productivity or volume, financial strength, managerial stability, and capability, and the temper and reputation of the business. Selecting-low volume or low potential volume hampers most prospects, many are underfinanced and some simply cannot be trusted.Motivating- motivational techniques that can be employed to maintain middlemen interest and support for the product may be grouped into five categories financial rewards, psychological rewards, communications, company support, and corporate rapport. What is the significance of the internet for international distribution and what issues must a prospective e-vendor consider? page 441 Internet is an important distribution method for international companies and a source of products for businesses and cons umers. Put the consumer in control of marketing and distribution globally 9What is the purpose of export restrictions? are limitations on the quantity of goods exported to a specific country or countries by a government. Describe the process necessary to determine whether or not an export license is essential? An export license is not required Define and explain the by-line boycott, free-trade zone (FTZ), maquiladoras, bill of lading, and foreign-freight forwarder. Boycott-is an act of voluntarily abstaining from using, buying, or dealing with a person, organization, or country as an expression of protest, usually for social or political reasons.Sometimes, it can be a form of consumer activism. Free-trade zone-customs privileged (In a FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the country. Page 536 Maquiladora-is the Mexican key for manufacturing operations in a free trade zone (FTZ), where factories import material and equipment o n a duty-free and tariff-free basis for assembly, processing, or manufacturing and then export the assembled, processed and/or manufactured products, sometimes back to the edged materials country of origin.Example given in class (Tijuana) Bill of lading-is a document used in the transport of goods by sea. It serves several purposes in international trade. Foreign-freight forwarder-is a person or company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution. Forwarders contract with a carrier to lift the goods. A forwarder does not move the goods but acts as an expert in supply chain management What is physical distribution (logistics)?Involves more than the physical movement of goods. It includes the location of plants and warehousing, transportation mode, inventory qualities and packing. What is the physical distribution concept? Takes into account the interdependence of the cos ts of each activity a decision involving one activity affects the cost and efficiency of one or all others. Page 449 What are the pros and cons of the different modes of transport available to international marketers?