JMU Marketing380 Exam Two

International marketing

set of marketing activities that support a brand's expansion outside of its home country

Global market opportunities

conditions that are favorable for a company to expand outside its home country market

Advantages of International Trade

- increase in revenue

- decreased competition

- faster growth

- Diversification of Risk

- Disposal of Surplus Goods

Market Saturation

Slow or no growth

Risk

any situation or condition that exposes a company to possible decreased profits or even failure

ethnocentrism

involves evaluating other cultures according to assumptions based on standards and customs of your own culture

Challenges to International Trade

- ethnocentrism

- politics

- differences in regulations & marketing

- cultural differences

business landscape

all internal and external factors of the business, its industry, and its environment

cultural sensitivity

the awareness and appreciation of and the ability to adapt to a cultural, ethnic, racial, or other group other than one's own

7 ways to be successful in International Expansion

1. Attitude: A company must prioritize global expansion at a strategic level.

2. Aptitude: Having the right skills and knowledge

3. Magnitude: aligning the scope of the expansion with the company’s capabilities

4. Latitude: ability to adapt to different cultures, market conditions, and business practices is key

5. Rectitude: Legal and ethical flexibility means understanding and adhering to the laws and ethical standards of different countries

6. Exactitude: aligning corporate culture with the flexibility and ambiguity of expansion

7. Fortitude: commitment to long-term expansion, even in the face of setbacks, is necessary

Economic Infrastructure

the building blocks within an economy that benefit the production and distribution of goods and services

Infrastructure

anything that would be required to produce and/or transport goods and services

Example: roads, railways, and high-speed Internet.

Consumer Income

the amount of money a household or individual earns. Consumer income is often defined as the amount of money a household has to spend

Disposable Income

the income available after taxes are paid

Discretionary income

the money available once consumers have paid taxes and living expenses such as, rent, food, heat, groceries, etc.

This income is the predominant type of income that interests marketers because it's the money consumers typically have the most flexibility with

Purchasing Power

how many goods can be purchased with one unit of currency

Example: a country where consumers have very little income and poor purchasing power, it would be difficult to sell expensive, luxury goods

Exchange Rate

the rate at which one country's currency can be exchanged for that of another country

Culture

the social norms, beliefs, behaviors, and accomplishments that characterize a particular set of individuals.

Culture also encompasses shared customs, arts, language, foods, and knowledge.

Tangible Culture

aspects of culture that can be observed, such as traditions, music, languages, and clothing. These are considered "external" as they are readily visible. They are the conscious part of culture.

Intangible Culture

the underlying beliefs, thought processes, assumptions, and worldviews that often remain unseen. These are considered "internal", as they happen out of sight, making them the subconscious part of culture.

sociocultural factors

include values, behaviors, culture, lifestyle, and language that shape a person's or group's way of living

Lifestyle

The way a person or group lives

stereotype

oversimplified perceptions, images, or ideas of a person or groups

Sociocultural Factors

- lifestyle

- stereotype

- law and politics

- education

- technology

More Sociocultural Factors

- cultural values

- customs and cultural symbols

- language, idioms and nuances

Customs

consist of mannerisms or behaviors that are considered characteristics within a social system

Cultural symbols

physical representations of a culture's language, values, and traditions.

Examples: flags, gestures, holiday decorations, and many others.

Nuances

words, phrases, or beliefs that vary slightly from one culture to another and can cause miscommunication in translation

Idioms

phrases used in a culture that mean something completely different in another culture

Symbols

essential expressions of culture that represent a group's ideologies, values, and actions

Examples: objects, ceremonial artifacts, designs, colors, and ideas

Language

communicates personal identity and shapes how people perceive the world around them

Hofstede's Cultural Dimensions

- Individualism versus Collectivism

- High versus Low Power Distance

- Masculinity versus Femininity

- Uncertainty Avoidance

- Long-Term versus Short-Term Orientation

- Indulgence versus Restraint

Strategies in International Markets

- standardized strategy

- adaptation strategy

Standardization

the process of purposefully applying identical or consistent guidelines to achieve uniformity

standardized strategy

expressed through the sameness of an offering's features, packaging, pricing, messaging, or advertising to consumers in the marketplace

Adaptation

the process of adjusting a company's work efforts, goods, or services in response to specific needs, tastes, or expectations from different groups of consumers

Adaptation Strategy

1. Identifying the modifications required to increase an offering's appeal among a targeted audience

2. Implementing the changes based on the organization's abilities and resources

standardized global marketing strategy

one in which a company uses the same marketing strategy in all markets.

adapted global marketing strategy

one where different marketing strategies are used in different global markets

4Ps of Marketing in Global Environment

PRODUCT

PRICE

PLACE

PROMOTION

straight product extension

strategy that involves maintaining the same product for both home and foreign markets

Product Adaptation

when companies modify products to align with the local culture

Product Invention

consists of creating entirely new products for a global market

whole channel

the design of the international channels that incorporates all members, including the manufacturing, retailer, and wholesaler sites as well as transportation

Marketing Research

work of gathering information and data about customers and markets

In House Market Research

conducting research activities using a company's internal resources, such as its own staff, expertise, and tools.

Outsourced Research

offers a level of customization and cost control, outsourcing can be more efficient, especially when seeking specific insights or dealing with resource constraints

Focus Groups

A small group within a consumer market brought together for discussion about a product or brand

Stakeholder Interviews

1:1 interviews with potential consumers in a target market

Market Surveys

Questionnaires regarding a brand or product are distributed online, in person, or by phone in market

Economic Research

Primary or secondary research into economic factors in a market, such GDP, consumer spending, or inflation

Competitive Analysis

in-depth review and analysis of the competitive landscape and performance of competitive products

Non-Verbal Communication

when information is conveyed from one person to another without the use of words or spoken language

Communication in International Marketing

- symbols

- non verbal communication

- space

- time

- touch

- body movement and gestures

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Product

anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

Goods

can be seen, touched, owned, and stored.

For example, the computer or mobile device you're using to read this textbook is a good or tangible product.

Services

intangible products that can also be exchanged between buyer and seller. Unlike goods, services cannot be touched, owned, or stored for later use.

For example, a college course on marketing is a service.

Customer Experience (CX)

overarching impression that customers have of a brand

Convenience Products

products that consumers can purchase easily, quickly, and without a lot of thoughtful decision-making

Examples: Frozen waffles, bar soap, milk, and bathroom cleaners

Shopping Products

require more thought from the consumer. Consumers may research and shop around for shopping products, seeking the best quality or price. Shopping products are typically available at a few retail stores and online, and they may be priced higher than convenience products

Specialty Products

have unique qualities that consumers will make an extra effort to seek out

Example: luxury cars, rare breeds of saltwater fish, fine art, and jewelry

Unsought Products

consumer goods that a buyer doesn't anticipate purchasing

Raw Materials

products that a business needs to purchase in order to make a consumer good.

Examples: flour, sugar, and yeast are raw materials for a bakery

Manufactured Materials and Parts

products used to create another product.

Examples: large baking sheets which are specific to commercial kitchen

Capital Items

assets that are valuable to the business and have tangible value

Ex: bakery's large ovens would be a capital item

Supplies and services

goods and services that are typically disposed of and do not contain a tangible value

Ex: bakery's boxes are part of its supplies to package doughnuts

Three Levels of Product

Core, Actual, Augmented

Core Product

fundamental benefit or solution that a customer seeks when purchasing a product.

Actual Product

tangible physical item or the delivered service that includes features, design, brand name, and packaging that together deliver the core benefits.

Augmented Product

includes additional services or benefits that accompany the actual product to enhance its value.

Product Line

set of products that are similar or complementary

Product Mix

contains all the products that a company sells

Product Line Depth

number of products in the line

Product Mix Width

number of product lines a brand carries

Product Line Filling

adding more items within the present range of a product line to address further segmentation and capture more market share.

Product Line Filling Strategy

when they add products to the product line to ensure that competitors do not enter their market.

Product Line Stretching

expanding the product line beyond its current range, either upward or downward, to target more premium or budget markets, respectively.

Stretching Downward

brand introduces a product line that is less expensive than its current offering

Stretching Upward

a brand introduces a product line that is more expensive than its current offering

Stretching Up and Down

a brand can stretch up and down simultaneously

Benefit of Product Line Filling

Protection against competitors

Product Life Cycle

maps the stages a product goes through, tracking its sales and profitability

Introduction Stage

when consumer awareness is building and sales are starting to grow. The marketing investment is high as brands invest heavily in advertising and sales promotion to encourage trial. Profitability is low due to costs to launch and scale a new product.

Growth Stage

characterized by increasing sales and the potential for copycat brands to enter the market once they see revenue and profitability. In addition, products require less marketing and distribution investments during the growth stage, making them more profitable.

Maturity Stage

sales growth slows and profitability levels taper off. The maturity stage is typically the longest stage of the product life cycle, with products remaining in this stage for years or even decades. Profitability may remain if the brand has a solid competitive advantage or decline if too many competitors enter the market. Marketing investment can increase at this stage if the brand has a rival, and product modification can alter the product to meet consumers' needs.

Decline Stage

characterized by a significant decrease in sales and profitability. Sometimes the decline occurs because the market has changed: technology has evolved, consumer tastes have shifted, or the need that the product satisfies is no longer relevant. Other times, the product is pushed out by rising costs or competitors

Rapid Skimming Strategy

sets a high price along with extensive advertising and sales promotion to establish the product in the marketplace

Slow Skimming Strategy

sets high prices with low advertising and sales promotion investment

Rapid Penetration Pricing Strategy

market approach where a company introduces a new product at a low initial price to quickly attract a large number of customers and gain a significant market share.

Slow Penetration Pricing Strategy

establishes low prices and low promotion to capture share more slowly in a market that typically does not readily react to promotion.

Market Modification

strategy where a company tries to expand its market for an existing product by methods such as targeting new segments, altering product use, or increasing usage rate among current customers.

Product Modification

process of altering an existing product's features, design, or attributes to make it more attractive, functional, or competitive in the market.

Divest

product sells off or eliminates a product, product line, or business segment that is underperforming or no longer aligns with a company's strategic objectives

Harvest

reducing all unnecessary expenses to retain any remaining revenue.

Brand

distinctive identity that represents a company or product, distinguished by its name, logo, design, and the overall experience it promises to its customers

Disney Brand

Family-friendly entertainment: Disney is known for its family-friendly movies, TV shows, and theme parks.

Magic and wonder: Disney creates a sense of magic and wonder through its products and experiences.

Nostalgia: Disney often draws on nostalgia for classic characters and stories.

Happiness: Disney is associated with happiness and joy.

Branding

the process of developing a brand

Logos

colors used in logos have meaning

Brand Value

the financial asset associated with a brand

Brand Equity

the additional value that a brand has over a substitute