Exam 3 Review – MTKG 4312 Global Marketing Strategy Fall 2025

These flashcards cover key concepts and definitions from the lecture notes on global marketing strategies, helping to prepare for the exam.

Product adaptation

Changing a product to fit cultural, legal, economic, technological, or climatic differences.

Why do companies adapt products?

To meet cultural norms, legal requirements, economic conditions, technology levels, and climate.

Diffusion of innovation

How quickly a new product is accepted in a market.

Factors influencing acceptance of innovation

Relative advantage, compatibility, trialability, complexity, observability.

Relative advantage

How much better the new product is than existing alternatives.

Compatibility with values/norms/beliefs

How well the product fits cultural expectations.

Compatibility with previous ideas

Whether it fits what consumers already believe or know.

Compatibility with felt needs

Whether it solves a problem the consumer already feels.

Trialability

How easy it is to try the product before commitment.

Complexity

How difficult the product is to understand or use.

Observability

How visible and noticeable the benefits are.

Product + communication extension strategy

Same product + same message worldwide.

Product extension + communication adaptation

Same product, different message.

Product adaptation + communication extension

Adapt product, keep same message.

Product + communication adaptation

Both product and message are adapted locally.

Global brand definition

Brand with consistent identity, benefits, and positioning worldwide.

Benefits of global branding

Economies of scale, awareness, media overlap, prestige, country associations.

Country-of-origin effect

How a product’s home country affects consumer perception.

Ethnocentrism

Belief that one’s own country/culture is superior.

Positioning definition

Designing a product’s image to hold a distinct place in consumers’ minds.

Steps to develop positioning strategy

Analyze competitors
ightarrow offer advantage
ightarrow match marketing mix
ightarrow evaluate & reposition.

Differentiation

Meaningful differences that separate a product from competitors.

Intermediary functions (general)

Market coverage, sales contacts, inventory holding, order processing, customer support.

Intermediary functions for customers

Availability, customer service, credit, assortment, breaking bulk, technical support.

Distribution patterns

Intermediary services, product mix breadth, stocking, channel length, nonexistent channels, blocked channels.

Intermediary services

Storage, transportation, promotion, selling, financing, after-sales service.

Product mix breadth

How wide/narrow product categories offered are.

Stocking

Amount of inventory intermediaries hold.

Short vs. long channel length

Short = fewer intermediaries; long = multiple layers like wholesalers/distributors.

Nonexistent channels

Channels that do not exist in a foreign market.

Blocked channels

Market access restricted by exclusive agreements or relationships.

Factors in channel choice

Target market, objectives, financial/personnel commitment, firm/market requirements.

Government-affiliated middlemen

Government purchasing offices for national procurement.

Agent middlemen

Representatives/brokers who do not take title to goods.

Merchant middlemen

Distributors/dealers who own the product.

Selecting middlemen

Screening based on finance, performance, coverage, attitude, reputation.

Motivating middlemen

Monetary incentives + psychological incentives.

Terminating middlemen

May involve indemnity payments due to protection laws.

Controlling middlemen

Monitoring volume, turnover, coverage, service, and attitude.

Channel margin formula

Selling Price = Manufacturer Cost \div (1 – Margin).

6 C’s of channels

Cost, Capital, Coverage, Character, Continuity, Control.

Gross margin formula

MSP – (MSRP \times allowance) – COGS – shipping/tariffs.

Adoption pyramid stages

Awareness → Interest → Evaluation → Trial → Adoption → Confirmation.

Awareness stage (Adoption Pyramid)

80% exposure; media blitz.

Interest stage (Adoption Pyramid)

60% exposure; teaser ads.

Evaluation stage (Adoption Pyramid)

40% exposure; product info.

Trial stage (Adoption Pyramid)

20% exposure; samples/demos.

Adoption stage (Adoption Pyramid)

Consumer buys product.

Confirmation stage (Adoption Pyramid)

Reinforces the decision.

Comparative advertising

Directly compares brand to competitors.

When comparative advertising works

Individualistic + masculine cultures.

When comparative ads do NOT work

Collectivist + feminine cultures.

Hofstede: Power distance

High = authority respected; low = equality valued.

Hofstede: Individualism vs Collectivism

Ind = personal achievement; Col = group harmony.

Hofstede: Masculinity vs Femininity

Masc = competition; Fem = relationships.

Hofstede: Uncertainty Avoidance

High = needs proof; Low = accepts bold claims.

Budget method: Percentage of sales

Set budget as % of sales.

Budget method: Competitive parity

Match competitors’ spending.

Budget method: Objective-and-task

Set budget based on goals and tasks needed.

Budget method: Affordable method

Spend what you can afford.

Share of voice

Brand’s ad spend \div total industry spend.

Sales promotion objectives

Consumer promotions = pull; trade promotions = push.

Consumer promotion tools

Samples, coupons, refunds, price packs, premiums, POP displays, contests.

Trade promotion tools

Discounts, allowances, free goods, specialty advertising.

Factors affecting pricing

Company goals, costs, demand.

Cost-plus pricing

Fixed + variable costs + profit.

Variable cost pricing

Variable cost + profit.

Skimming pricing

High initial price for early adopters.

Penetration pricing

Low price to quickly gain market share.

Price escalation

Higher foreign prices due to exporting costs and channels.

Ways to reduce price escalation

Lower COGS, change distribution, alter product, assemble in foreign market, use FTZ.

Share of wallet

% of consumer spending captured by a brand.

Foreign Trade Zone (FTZ)

Area where imported goods avoid duties until domestic entry.

Benefits of FTZ

Lower tariffs, cheaper labor, deferred duties, reduced shipping costs.