Studied by 1 person
Why is understanding cultural differences so important in marketing?
So that companies can understand how to break into a certain market and cater towards certain consumers
International firm (global companies)
Marketing products in another country in the same way that the products are marketing in their home country
Multinational firm - Multidomestic marketing strategy (global companies)
Develop different marketing programs (different product variations, brand names, and advertisements) across countries and manage each country separately. Local branches have autonomy.
Transnational firm - Global marketing strategy (Global companies)
Views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants rather than differences. They use standardized marketing practices, but they adapt them when cultures differ. (ex. mr clean has the same face in many countries, but different names)
Individualistic culture
Mostly western cultures, flexible ties to social groups, behaviors are guided by self interest, Choice is used to express uniqueness
Collectivistic culture
Mostly eastern cultures, strong ties to the collective such as family, country and so forth, behaviors are regulated by group norms, choice is used to express connectedness
Global Marketing program
same promotion, same product - Product extension strategy
adapt promotion, same product - Communication adaptation strategy
same promotion, adapt product - Product adaptation strategy
Adapt promotion, adapt product - Dual adaptation strategy
create new product - product invention strategy
Product extension strategy
Same promotion, same product
Communication adaptation strategy
Adapt promotion, same product
Product adaptation strategy
Same promotion, adapt product
Dual adaptation strategy
Adapt promotion, adapt product
Product invention strategy
Create a new product
Exporting
A company produces goods in one country and sells them in another
Low risk with low profit potential
Licensing
A company offers the right to a trademark, patent, trade secret other valued items of an intellectual property in return for a royality.
risk with a little profit potential
Franchising (variation of licensing)
A company contracts with an individual to set up an operation to provide products or services under the company’s established brand name.
Joint venture
A foreign company and a local firm invest together to create a local business
Medium risk some profit potential
Direct investment
A domestic firm actually investing in and owning a foreign subsidiary or division.
High risk but high profit potential
Global market entry strategy
Exporting - Low risk, low profit potential
Licensing - some risk, slight profit potential
Joint venture - Medium risk, profit potential
Direct investment - High risk with high profit potential
