International Marketing – Key Concepts Flashcards

60 Q&A flashcards covering the main theories, models, and examples from the IU International Marketing course book. Suitable for rapid revision before exams.

What is meant by “internationalization” in marketing?

The cross-border business activities of a company, ranging from importing and exporting to establishing overseas sales and production facilities.

Name three main motives for a firm’s internationalization.

1) Exploit domestic competitive advantages abroad; 2) Create new advantages by raising customer benefits or cutting costs; 3) Strengthen position by weakening rivals’ value creation.

According to Dunning’s eclectic (OLI) paradigm, which three advantages must exist to justify foreign direct investment?

Ownership-specific advantages, Location-specific advantages, and Internalization advantages.

What are the two broad categories of export?

Direct export (goods shipped straight to a foreign customer/intermediary) and indirect export (goods sold to a domestic intermediary who then exports).

Define a joint venture.

A partnership in which two or more firms create a legally independent company while retaining their distinct identities.

Differentiate between a merger and an acquisition.

A merger blends two firms into one legal entity; an acquisition involves one firm purchasing a controlling stake in another while each remains a separate legal entity.

What is ‘flexible replication’ as practiced by IKEA?

Standardizing a global core concept while allowing local subsidiaries to adapt peripheral elements (e.g., sizes, menus, layouts) to local needs.

Give two features of IKEA’s international communication strategy.

Heavy use of a standardized catalog (about 70 % of the marketing budget) and localized advertising that adapts imagery and messages to cultural tastes.

What defines a 'born-global' company?

A firm that targets multiple international markets from inception, leveraging technology, niche focus, and globally-minded leadership.

Why did Home Depot fail in China according to the CELM framework?

Its U.S. DIY model ignored Chinese culture (preference for DIFM), environment (store locations), lifestyle (young urban buyers), and mentality (brand awareness & labor views).

State four ‘P’s of the international marketing mix.

Product, Price, Promotion (communication), and Place (distribution).

What are three goals of international product management?

Expand profit/market share globally, exploit cost advantages via scale, and diversify risk across countries.

When should a firm pursue product standardization?

When customer needs are homogeneous, cultural influence on the product is low, and a universal brand is recognized.

Explain product differentiation in an international context.

Modifying core, packaging, labeling or service elements to meet specific needs of each country or region.

List the five phases of Six Sigma’s DMAIC cycle.

Define, Measure, Analyze, Improve, Control.

What is Six Sigma’s primary objective?

To satisfy customer needs profitably by reducing defects and process variation to roughly 3.4 defects per million opportunities.

Why is exchange-rate fluctuation critical to international pricing?

Currency swings alter revenue and cost bases, affecting price competitiveness, margins, and potential gray-market flows.

Name two internal factors influencing international price management.

Company objectives (e.g., market share vs. profit) and cost structure (production, R&D, logistics, marketing).

Give two external factors influencing international price management.

Government regulations/taxes and competitive market structure (monopoly, oligopoly, etc.).

What is a ‘price corridor’ strategy?

Headquarters sets upper–lower price limits; subsidiaries may adjust within that range to local conditions.

Define ‘gray market’.

Unofficial cross-border resale of genuine products outside the manufacturer’s authorized channels, often driven by price differentials.

What does ‘viral marketing’ rely on?

Word-of-mouth spread of engaging content through social networks, multiplying exposure without proportional budget.

List two standardization barriers for international communication.

Language differences and country-specific legal restrictions on advertising.

How can cultural dimensions affect sales negotiations (e.g., Germany vs. Italy)?

Linear-active cultures (Germany) prefer strict agendas and punctuality; multi-active cultures (Italy) favor relationship building and flexible timing.

What is business ethics?

The application of moral principles to business behavior, balancing profit goals with responsibilities toward stakeholders and society.

Why do multinational firms adopt ethics management systems?

To set internal standards, avoid scandals, satisfy stakeholders, and build long-term competitive advantage through trust.

State one pillar of Wyndham Hotels’ CSR program.

Examples: Diversity & inclusion, Human rights, Environmental sustainability, or Philanthropy.

Differentiate international primary and secondary research.

Primary: new data collected for a specific purpose abroad. Secondary: analysis of already-existing data (reports, statistics) about foreign markets.

Give two challenges unique to international primary research.

Cultural/language barriers in survey design and limited research infrastructure or sampling frames in some countries.

What quality criteria should international market-research data meet?

Relevance, completeness, timeliness, high quality/reliability, and comparability across countries.

Explain Kotler’s four-step marketing control process.

Set goals, measure performance, evaluate performance vs. goals, take corrective action.

What is the Comprehensive Decision Model (CDM) used for?

Aligning information supply with decision-maker needs by integrating actor, organization, and application dimensions.

Give two system-related planning problems in international firms.

Strategic planning centered only at HQ and inadequate integration of operational with strategic plans across subsidiaries.

What is ‘brand equity’?

The added value a brand name imparts to a product, reflected in consumer loyalty, price premiums, and competitive insulation.

List four options for brand development.

Line extension, Brand extension, Multi-brand strategy, and New-brand creation.

What is rebranding?

Replacing or significantly altering an existing brand name, logo, or identity to signal strategic change, escape negatives, or unify portfolios.

Provide one risk of rebranding.

Customer confusion or rejection leading to loss of brand equity and sales (e.g., Fairy → Dawn reversal in Germany).

Why might mergers prompt rebranding?

To create a unified identity reflecting the new entity’s combined scope (e.g., Bell Atlantic + GTE → Verizon).

How can Six Sigma create competitive advantage?

By lowering defects and waste, improving customer satisfaction, and reinforcing a culture of continuous measurable improvement that rivals find hard to copy.

What statistical goal does 'Six Sigma' numerically represent?

Process variation limited to ±6 standard deviations from the mean, equating to 3.4 defects per million opportunities.

Describe the ‘Measure’ phase in DMAIC.

Document current process performance, select metrics, collect data, and establish baselines and sigma level.

In Six Sigma, what is FMEA used for?

Failure Mode & Effects Analysis identifies potential failure points, their causes, and prioritizes corrective actions.

What is a control chart?

A statistical tool plotting process data over time against upper and lower control limits to detect variation.

Give an example of a cause–effect (fishbone) diagram category.

Typical categories: Man, Machine, Material, Method, Measurement, or Environment.

What is ‘DIFM’ and how did it relate to Home Depot’s China failure?

‘Do-It-For-Me’: Chinese consumers prefer hiring labor for home projects; Home Depot promoted DIY and missed this preference.

Why are multi-channel strategies important in international distribution?

They blend stores, online platforms, and intermediaries to reach diverse customers despite varying infrastructure and shopping habits.

Name one advantage of direct investment over exporting.

Greater control over production/marketing and ability to exploit location advantages such as lower labor or proximity to markets.

What is an ‘equity joint venture’?

A new legally independent company jointly owned by two or more parent firms who share equity and control.

Define ‘market penetration pricing’.

Entering a market with low initial prices to quickly gain volume and market share before potentially raising prices later.

How does Hofstede define ‘power distance’?

The degree to which less powerful members expect and accept that power is distributed unequally in institutions and organizations.

What does a high Individualism Index score indicate?

A culture where people prioritize personal goals and individual achievements over group goals and collectivist ties.

Describe Trompenaars’ ‘universalism vs. particularism’.

Universalist cultures apply rules uniformly; particularist cultures adapt rules based on relationships and context.

Explain the term ‘economies of scale’.

Cost advantages achieved when increased output lowers average unit cost through fixed cost dispersion and operational efficiencies.

Why is local adaptation sometimes necessary despite economies of scale?

To meet diverse consumer needs, legal requirements, or cultural preferences that a standardized product cannot satisfy.

Give an example of a product-related factor affecting standardization decisions.

Cultural specificity of consumption (e.g., halal food requirements) or technological compatibility (e.g., left- vs. right-hand-drive cars).

What is ‘standardization of communication’ in international marketing?

Using the same advertising theme, message, and creative execution across multiple countries to convey a unified brand identity.

Name two objective pre-test methods for advertising.

Tachistoscope tests (flash exposure) and psychogalvanometer tests (measuring skin conductance).

How does corporate social responsibility (CSR) enhance hotel competitiveness?

Reduces costs (e.g., energy savings), improves image, attracts ethically minded guests, and increases stakeholder trust.

State one benefit of an ethics code inside a company.

Provides clear behavioral guidelines, reducing ambiguity and aligning employee conduct with corporate values.

What is the main purpose of international market segmentation?

To group customers across or within countries who exhibit similar needs and can be targeted with tailored marketing mixes.

Why must secondary data be assessed for comparability in international research?

Differences in definitions, collection methods, and time periods across countries can distort cross-national analyses.

What is a ‘multi-brand’ strategy?

Marketing two or more brands in the same product category, often to capture different segments or increase shelf space.

Give one reason why a company may prefer indirect exporting.

Requires less international expertise and lower commitment, utilizing domestic intermediaries to handle foreign distribution.