Shared Flashcard Set

Details

Final exam
mktg 445
53
Marketing
Undergraduate 4
07/01/2013

Additional Marketing Flashcards

 


 

Cards

Term
Types of Strategic Alliances
Definition
-Licensing - Global Licensing Interview

-Franchising -

-Joint Venture - Staples-UPS China JV
OEM

-Distribution Alliance

-Manufacturing Alliance
Term
Strategic considerations for manufacturing in country
Definition
-FSAs

-Resources

-Market Conditions

-Appetite for Risk/Strategic posturing
Term
Trade-offs that help guide entry modes
Definition
Control Posture – global expansion in the context of jeopardizing firm-specific advantages.
-Incremental
-Protected
-Control
Term
Stages of Internationalization
Definition
-Indirect Exporting/ Licensing*

-Direct Exporting

-Establishing foreign sales subsidiary

-Joint Venture/Licensing/Strategic Partnerships

-Local Assembly

-Foreign Production through Aquisition

-Foreign Production (FDI) through “Greenfield”
Term
Overall Globalization Strategy
Definition
Waterfall – after success in its home market, firm moves gradually into culturally close markets and high growth markets, then eventually into less-developed markets.
-Orderly expansion
-Allows time for learning and adjustment
-Lessens impact on resources required for expansion
-Requires great discipline

Sprinkler – exposes a company to the maximum number of markets as rapidly as possible.
-Faster market penetration across the globe, first mover advantage
-Requires large investment in managerial, financial and other resources to manage growth and risk


What types of industries/firms would be suitable for above strategies?
Term
Local Marketing
Definition
-Environmental factors and cultural factors result in needs and preferences that vary considerably

-Local marketing manager, i.e. "country manager" or subsidiary CMO
-Applies same marketing concepts - adjusting for the unique characteristics of the market
Term
Buyer Behavior
Definition
-How information is processed

-How external forces shape decision making

-Individual's perception of value

-Individual's perception of risk
Term
Buyer Behavior model aka the decision making process
Definition
-Problem Recognition

-Information Search

-Evaluations of alternatives

-Choice

-Outcomes
Term
Buyer Behavior model assumption
Definition
Assumes that buyers are goal oriented - meaning there is a link between behavior and desired results
Term
Applying Marketing efforts to shape behavior
Definition
External influences
-Culture
-Economic
-Technology
-Politics

|

Model's of Man
-Buyer characteristics
-Buyer decision process

|

(Local marketing effort squeezes in here)


-Buyer Choices
-Product choice
-Brand choice
-Store choice
-Supplier choice
Term

Fishbein model 

 

Evaluation of alternatives

Definition
[image]
Term
New Growth Markets
Definition
Newly Industrialized Economies (NIE)

-Latin America
-Asian countries (ASEAN in particular)
-India
Term
General Characteristics of new growth markets
Definition
Emergence of a middle class – more even wealth distribution

Economic strength is enhanced through participation in regional trading blocks
-Incentivizes foreign direct investment (FDI); by providing market access to a region as opposed to a stand-alone country
Term
Marketing in Latin America
Definition
560 million people

Predominantly Spanish speaking

Relatively low income - Per capital GDP $5K to $13K (PPP)
-PPP is the exchange rate that equates the price of a basket of identical traded goods and services in two countries.
-In practice PPP take into account national differences in product and service prices (input costs, rents and other local costs are major factors)

Economically stratified society

Affluent consumers range between 10 to 20% of population
Term
Latin American Trade Agreements
Definition
ANCOM – Andean Common Market – Bolivia, Colombia, Ecuador, and Venezuela

Mercosur – Argentina, Brazil, Paraguay, Uruguay

NAFTA – Canada, U.S. and Mexico
-Reduced or zero tariffs for movement of goods between markets, common external trade policies
Term
Market Segmentation in Latin America
Definition
Pay attention to
-Physical distance – bogota is a long way from Sao Paulo
-Cultural Distance – San Salvador has a much different population than Santa Catarina, although in the same country
-Old rivalries – particularly soccer

Contrast between urban and rural
-80% of purchasing power is in urban vs. 20% in rural
-Urbanites tend to be style conscious with large population under 25; living with parents and degree of disposable income
-Rural customers are more traditional with a generally “fatalistic” view of the world.
Term
Marketing Mix for Latin America
Definition
-Product localization – beyond language, localization need is limited

-Pricing – foreign products should focus on high end (and mid range) in urban markets and leave low end for domestic producers

-Distribution- weak infrastructure, locked down channels – suggest joint ventures and other strategic distribution arrangements

-Promotion – consumers/buyers want detailed product information; traditional themes, in rural areas – issues with illiteracy. Common language, religion and emphasis on traditional values provide a platform for Pan-Regional marketing efforts.
Term
New Asian Growth Markets
Definition
Southeast Asia, Taiwan and Korea

700 million people

High degree of acceptance of global brands, welcome foreign investment (Japan, Europe and U.S.)
-“China +1” Strategy
-“Asian Pivot”
-Diversified industries – electronics, mining, agribusiness, travel & tourism
Term
Asian Foreign Trade Agreements
Definition
ASEAN – Association of South East Asian Nations
-Tariff rates of 0-5% between member nations
-Reduction of non-tariff barriers
-Common external tariff rate
-Common market by 2015 – that more fully standardizes regulations and other issues across the whole region.
Term
Market Segmentation in Asia
Definition
Affluent + Sizeable middle class “have somes”

Most of these countries are ethnically diverse

Urban centers are prime market areas – Bangkok, Seoul, Manila, Jakarta

THAILAND
-Thailand GDP per capita is $10,000, with an unemployment rate of less than 2% upward pressure on wages and price
-One of the largest tourism markets in the world, with a diverse economy (food, electronics, raw materials, banking and professional services)
-Large regional differences – Bangkok, the center of commerce, Phuket and Chiang Mai – centers of tourism
-Different ethnic groups: Malays, Mon (border with Burma), Karen (northern border), Chinese Thais (centered in BKK), Khmer (along Cambodian border), Muslim (particularly in the South)
Term
Product Positioning in Asia
Definition
Established premium/luxury market

Introduction of branded “global products” is followed localization to leverage branding at lower end of market
Term
Marketing Mix for Asia
Definition
Product – design issues to accommodate for lifestyle issues.

-Pricing – skimming strategy, followed by a penetration pricing strategy is common, concern for “grey trade”

-Distribution – Infrastructure in urban areas well developed – rural areas underdeveloped (islands, and other geologic/geographic barriers add to distribution costs/effort)

-Promotion – efforts minimally adapted, advertising is increasingly localized, underground economy, extended family relationships across multiple and diverse businesses present significant leveraging opportunities
Term
Pan Regional Marketing
Definition
Proximity of markets –

Chinese, Korean, Japanese and Indian Diaspora are present throughout Asia and SE Asia – these “bamboo financing networks” and extended family businesses provide a platform that can span several markets simultaneously.

ASEAN trade agreement underpinnings
Term
Emerging Markets
Definition
-Newly Democratized

-Developing Countries

-Chin & Hong Kong
Term
Newly Democratized Countries (NDCs)
Definition
Characteristics

Previous Communist Countries – Soviet Union, Eastern Europe
-Basic needs satisfied
-Strong education & social control
-Moving from limited choice to plethora of choice – a perplexing shift for many consumers

Market Segments
-Income, rural/urban
-Importance of ethnic minority segments – former Soviet Union satellite countries; Balkans, etc.

Product Positioning and Tactics
-Imported products carry cache
-Penetration pricing is becoming increasingly popular as product categories are more and more crowded
-Promotional Strategies – Importance of training “middlemen” to facilitate educating buyers and providing sales support services
Term
Developing Countries
Definition
Low –income

Much of Africa, Central and South Asia, Central America

Lack of macro economic infrastructure and considerable market risk
-Lack of consumer and business credit
-Instable or weak institutions
-Transportation and communications infrastructure is poor or less developed

Distortion of Markets: Presence of NGOs (non-governmental organizations) and MDB – multilateral development banks- “the Aid”

Marketing infrastructure is poor
-Lack of secondary market data increases costs of market assessment
-Distribution channels, communication and media is not well developed or accessible
-“Bankable” population is relatively small
-Lack of cold storage lines
Term
Market Segmentation in Developing countries
Definition
Income level is main segmentation criterion, because of uneven income distribution

Profiting from serving the poor – Bottom of the Pyramid

Government, NGO and multilateral development bank segments
-OPIC – Overseas private investment corporation www.opic.gov
-ADB – Asian Development Bank
World Bank
-IADB – InterAmerican Development Bank
-African Development Bank
-USAID
-United Nations
Term
Marketing Mix in developing countries
Definition
Product Positioning:
-Basic and standardized products are a good initial fit to be able to sell through low-service outlets

Pricing
-Premium (skimming price) for the upper echelon
-Value and economy pricing for the broader population and other segments
-Innovative financing methods – Mohamed Younus

Distribution
-Weak infrastructure and lack of multi-modal make national distribution and access difficult (theft, loss and damage are endemic)

Promotion
-Sales force, location and number of selling points are keys to success for initial branding and market access (adjusted for product/service)
Term
Marketing in China
Definition
Large regional differences – three main economic centers are Guangdong, Shanghai, and Beijing (with SEZs in Shenzhen, Zhuhai, Pudong and others)

Imports tend to be factors of production – to feed export oriented sectors

Rapidly growing per capita income – on PPP basis quickly approaching western standard of living in large urban areas
Term
Hong Kong
Definition
Over 150 years as the gateway to greater China

First major investors in China – the Hong’s of HKG – Hutchison Whampoa, Swire, Jardine Matheson, etc.

Provide access to global capital markets to fund Chinese businesses and operations

Bridge between East and West
Term
Market Segmentation in China/Hong Kong
Definition
By region

Urban/ rural – huge income differences

Global youth
Term
Marketing Mix China/Hong Kong
Definition
Products – western goods are status symbol, but for most consumers; localization is critical

Pricing – depends on product positioning – for luxury products low price elasticity, for everyday products – plethora of choice and competition drive down prices

Distribution – urban infrastructure has drastically improved – major rail, new airports and surface transportation has had huge investments – foreign entities – FedEX, DHL, and UPS now have extensive operations in China.

Promotion – Outdoor print is ubiquitous, TV and radio are state controlled – high population density provides for more personal selling and location based promotion.
Term
Macrosegmentation
Definition
Grouping of countries with similarities in socio-economic and cultural characteristics, hence the “cluster”

Clustering Analysis – use of broad indicators

-Two dimensional, or multidimensional

-Market oriented clustering

--Dependent, seekers, climbers, luxury & leisure, rocking chairs

-Think (left-brain reasoning) and feel (right-brain – emotional/excitement) clustering
Term
Microsegmentation
Definition
focuses on potential customers in each of the countries belonging to the cluster

Behavioral & benefits segmentation – each element can be broken down into individual segments

-usage rates - heavy, regular, and occasional and non-users

-shopping patterns – place (department store, convenience store, kiosk, internet, MLM), amount, payment method

-price sensitivity

-Communication channels and modes
Term
Global Marketing Orientation
Definition
marketing activities coordinated and integrated across multiple country markets.

-“selling orientation” vs. “customer orientation”

-Market Planning and resource allocation

--Different stages in product life cycle, competitiveness and other factors (BCG Growth Share Matrix)

--Resources required for various marketing mix elements

---Percentage of previous sales (sound familiar?)

---Samsung’s M-Net system – projecting sales, estimating costs, then calculating marketing profit = challenges with spillover effects
Term
Diversification
Definition
designing a portfolio of addressing different clusters in different markets.

An advantage of this strategy would be provides protection against the risk of large losses

harder to identify and track cost effectiveness

a disadvantage could be the potential for a firm o overextend itself.
Term
Focus
Definition
designing a portfolio that addresses a few similar markets in the same cluster(s)

Advantage of this strategy would be that markets can be given more attention and market positions fortified

Disadvantage is becoming too dependent on a few single markets

easier to identify and track cost effectiveness
Term
Global product positioning
Definition
Uniform – product ranges, brand names, market communications, distribution are similar across markets to take advantage of spillover and cost efficiencies

Keegan’s Positioning Strategies

-Product –communications extension – applying the same product line and advertising

-Product-extension communication adaptation – repositioning of a global product to fit local conditions and perceptions

-Product adaptation communications extension – same marketing message, slightly different product

-Dual adaptation – product localization and communications adaptation
Term
Global products
Definition
standardized with uniform features in all markets, either core, and
Term
Regional products
Definition
designed to meet local needs, but “latently” global – Ford Focus…Pan-European standardization or Pan Asian standardization
Term
Advantages of standardization
Definition
cost reduction through scale economies and cope economies

Improved functional quality of the product or service

Enhanced customer preference

Global customers

Global segments
Term
Disadvantages of standardization
Definition
likely to miss the exact target in terms of customer preferences in any one country, unless needs and wants across countries are homogeneous and we determine this through global segmentation.

Also some segments of the market are not targeted correctly

There's a lack of uniqueness in the product or service

Vulnerability to trade barriers . Open trade regimes are necessary to reap the benefits of standardization

Some local competitors may be stronger than you, offering customization or some sort of special service

may be difficult to figure out which features to standardize, as, in practice, 100% standardization is rare
Term
Core product
Definition
the foundation of a product, especially in regards to standardization
Features are added to the core product to complete the marketed product

Ex. for an automobiles
-it would be the "platform" chassis
Term
Modular design
Definition
Standardization technique where various features are prepackaged as modules that can then be assembled in different combinations to target different markets.

Flexibility created by this also means companies can offer slightly different models in different countries without losing standardization advantages
ex. nondigital cameras assembled from a few modular components
-lenses
-film winder
-body casing
-flash unit
-telescope motor
-etc.
Term
Localization
Definition
changes required for a product or service to function in a new country.

*adaptation is the change or changes made to a product made to match customer tastes or preferences.

localization may be necessary whereas adaptation is usually aimed to target some special segment or segments

Localization avoids having potential customers reject the product out of hand, whereas adaptation gives customers a positive reason for choosing it.

*You wouldn't buy a TV that didn't use the same wattage as the country you live in. The TV is localized with a power adapter or transformer so it will function in your country.
Term
Diffusion
Definition
The rate at which a new product gains acceptance in the marketplace. (production/introduction framework)

-Relative advantage: is it better?

-Compatibility: does it work with our system/in our country?

-Complexity: Is it easy to use?

-Trialability/Ability to sample: how easy it to try out the product and know what I'm buying into before actually making the purchase?

-Observability: what really gives the product its credibility? What indicates that it can be trusted as a high quality product/service
Term
Trading services instead of just products
Definition
U.S. maintains a surplus in services trade as opposed to large deficit in merchandise trade, and it is growing.

-Major services traded include:

-Transportation

-Telecommunications

-Financial services

-Education & training

-Royalty and licensing

-Management services

-Engineering, Architecture and Design

-Real Estate

-Legal
Term
Characteristics of a service in contrast to those of a product
Definition
Intangibility - You cannot easily touch a service

Heterogeneity: difficult to standardize because they are not exactly the same each time

Inseperability: Services are produced at the same time they are consumed

Perishability: You cannot store a service
Term
Front stage elements
Definition
What the customer sees, and how they "experience" the service (critical incident)

-Assessment: identification of customer desires and needs

-Delivery: provision of the service

-Environment: the surroundings or place

-Responsiveness: troubleshooting and resolving service failures

-Perceived service performance: desired; expected, adequate, unacceptable (zone of tolerance and performance gap)
Term
Back stage elements
Definition
The back office operations and processes that make the service possible to offer at a specific location at a specific price
Term
Advantages and disadvantages of a global brand
Definition
Advantages

-Demand spillover

-Global Cusomters

-Scale Economies

Disadvantages

(in the marketplace)
1. global brands are not adapted to local conditions and preferences
2. global brands are perceived as dominating local brands and threatening local culture
3. global brands are less unique than local brands

(for the firm)
1. capturing scale economies require skillful to-down coordination
2. local subsidiary managers lose motivation
3. a global brand is an easy target for antiglobalizers and other activists
Term
Advantages of Local brands
Definition
Advantages

1. Customization
2. Iconic status
3. Differing regulations
4. Trust
Term
Functions of brands
Definition
1. Risk avoidance and trust : When a brand like Mcdonald's becomes a cue to the quality of the brand and the consumers learn what to expect from the brand

2. Longevity and Familiarity: Consumers understanding that if the brand is able to remain in the market, it cannot be all bad because clever advertising is good in the short run, but the actual product/service will win out in the long run

3. Iconic and Experiential: brands provide a unique experience for the user and offer more than just the physical product
-i.e. Harley Davidson brand signifies more a lifestyle than the just the motorcycle.

Emotional drivers: Since functional product differentiation is hard to sustain as a competitive advantage due to benchmarking and "me too" products, brands can offer emotional satisfaction over and above the functional requirements of a product or service. A strong brand can offer peer group approval, heightened self-esteem, and possibly status and prestige.
-This varies by hedonic versus utiliatarian products
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