International Marketing final

Why economic environment matters? (wk3 )

1. shows market potential

2. helps decide market entry strat, pricing, product adaptations

economic indicators for markets (wk 3)

1. GDP (not good indicator)

2. GDP per cap - gdp/ total pop

3. Purchase power parity (ppp): actual buying power ; compares cost of a standard basket of good

4. income distribution : how country’s money is spread across population

5. employment levels

rising middle class (wk 3 )

• expanding middle class= opportunity for growth

  • more people have disposable income

• growing fastest in asia

BRICS(wk 3 )

• brazil, russia, india, china, south africa

• combined GDP: us$30 trillion

• untapped/ growth markets; opportunity point

Social costs of fast growth (wk3 )

• infrastructure limits

• labor shortages

• demand for political freedom

• environmental degradation

• urban congestion

free trade area (wk 3)

• countries coming together and free trading

• \gets rid of tarrifs and quota barriers

  • set against non members tho

custom union (wk 3)

• no trade barriers for members

• establish common trade policy w respect to non-mmebers

common market (wk 3)

• no trade barriers for members

• Abolished restrictions on immigration and border investment

economic union ((wk 3)

• everything open; no boarders

• common currency/ fixed exchange rate

• surrender of sovereignty

dimensions of political environment (wk 4)

• political system type

• government stability

• regulatory philosophy

• legal and institutional strength

dimensions may affect (wk 4)

• market entry decisions '

• operational strategy

• marketing mix adaptations'

• risk management

sources of political risk (wk 4)

• competing political philosophies

• competing religious groups

• social unrest/ disorder

• recent/ impending political independence

types of political risks ((wk 4)

• ownership risk: exposes property and life

• operating risk: interfering with ongoing operations of a firm

• transfer risk: when moving funds between countries : “ you made money her, money will stay here”

how to reduce political risks (wk 4)

• get info before making decisions

• watch political developments

• 'joint venture with a local partner

• expand investment base

• insurance

international organizations affecting world trade (wk 4)

• world trade organization (wto): funds for currency stabilization

• world bank( micro level): aims to improve trade

• International monetary firm( macro level): economic assistance to war torn countries/developing nations

types of international market research (wk 5)

• exploratory research : understand unfamiliar markets

• Descriptive research; maket size , demographics , behaviors, etc

• casual research: testing market actions across countries

• comparative research: cross-country benchmarking

Whats the point of IMR in business Decisions? (wk 5)

supports decisions on:

• market selection

• product adaptations

• marketing mix design

• entry method

• growth and exit strategy

Benefits of International market research (wk 5)

• avoid mistakes

• reduce uncertainty

• identify growth opportunities

• support product development

• strengthen competitive advantage

market entry strategy (wk 7)

• ownership→ international contracts (licensing , franchising, etc)

• ownership +internationalization → export

• Ownership +internationalization + location → FDI

Lower commitment/ investment (wk 7)

• exporting

• franchising

• licensing

Higher commitment/ investment (wk 7)

FDI

• joint venture

• full ownership

• strategic alliance

Distribution: direct distribution system (wk 9)

• pros: dont have to pay anyone

• cons: set up costs, maintenance, etc

Distribution: intermediaries based distribution system (wk 9)

• Pros: already established there

• cons: pay the intermediaries

channel design: the 11 c’s (wk 9)

culture, cost, customer characteristics, competition, control, continuity, company objectives, charcter, capital, coverage, communication

pricing strategy (wk 10)

1. primary markets

2. secondary markets

Primary markets ( (wk 10)

• established markets: cash cow!

• challenger markets: strong competition with a market leader

• investment market: Star!! long term objective

secondary markets (wk 10)

• opportunity markets : build experience and look out for growth

• accordian markets : sales vary every year

• peripheral market: has an agent/ distributor

• pull out market: DOG! wants to leave

Market entry and pricing decisions (wk 10)

• Mostly secondary markets →lower commitment/ investment (licensing, franchising, exporting )

• mostly primary markets → higher commitment/ investment (FDI)

International pricing policy (wk 10)

1. objectives: what are you trying to do

2. cost factors: the cost of it all

3. approaches to pricing : how do i want to go about it

4. market factors