mktg 409 exam 3

Methods of international market entry 

exporting, licensing, franchising, joint ventures, direct ownership

exporting

• selling domestic goods abroad

• Most basic method of international market entry

• Companies sell their goods abroad 

  • Allows companies to test international demand with low capital

• Exporting firm works with intermediaries (distributors, agents) 

licensing

• is an agreement where a firm grants another company the right to use its brand name, technology, patent, or trademark for a fee or royalty.

  • allowing foreign firms to use your IP for a fee

  • Less control than direct ownership 

franchising

• a specialized form of licensing in which a franchisor grants a franchisee the right to operate a business using the franchisor's brand, systems, and business model.

  • a type of licensing for business models

    • Common in food service, retail, and hospitality

    • Initial feels & ongoing royalties 

joint ventures

between a domestic firm and a foreign firm to co-own and operate a business in a foreign market

direct ownership

• full investment in a foreign operation with no partner 

  • Also called Foreign Direct Investment

regional trade agreements

reduce tariffs and trade barriers and encourage trade

european union (EU)

integrates 27 european nations

USMCA (formerly NAFTA)

• agreement btwn US, Mexico, & Canada

ASEAN

• includes 10 southeast asian nations 

• making the region attractive for firms looking to access diverse, growing markets with lower tariffs.

• regional economic bloc of 10 member nations in Southeast Asia, including Vietnam, Thailand, Singapore, Indonesia, Malaysia, etc.

RCEP

• Regional Comprehensive Economic Partnership

• It is a major free trade agreement between 15 countries in the Asia-Pacific region

product components

core product, supplemental feature, symbolic/experimental component

core product

• the fundamental benefit or primary function that a customer receives

  • Ex: car = transportation, phone = communication, hotel = accommodation

supplemental feature

• add-ons or extras that enhance the core product's value beyond the basic function.

  • Added value 

  • Airline = in-flight wi-fi, priority boarding, premium meals 

  • Increase customer satisfaction and justify premium pricing 

symbolic/experiential component

• intangible value customers derive from brand prestige, status, identity, or emotional connection.

  • Carries symbolic weight — customers buy partly for the status signal and lifestyle association, not just functionality.

  • Brand prestige, experience (e.g., luxury appeal)

    • Rolex, Ferrari, LV bag 

types of brands

generic brand, manufacturer brand, private distributor brand, licensed brand

generic brand

Simple medicines or basic groceries sold without a brand label

manufacturer brand

• brand that is owned and promoted by the producer/manufacturer of the product.

• The company is responsible for branding, quality, and marketing. 

private distributor brand

• created and owned by a retailer, not a manufacturer.

  • These brands are typically simpler, lower-priced, and sold exclusively at that retailer.

  • They allow retailers to compete on price while building brand loyalty

  • Kirkland at Costco, great value at walmart 

licensed brand

company is given permission to use another company’s brand name, logo, or characters for a fee or royalty

brand mark

• visual or symbolic element of a brand — the logo, symbol, color, or design that customers recognize

  • Nike swish, Apple Logo 

brand name

• spoken part

  • ex: coca-cola

adopter categories

innovators, early adopters, early majority

innovators

first to adopt new products, products, driven by a desire to be first and willingness to accept risk

early adopters

purchase soon after launch but with more deliberation than innovators

early majority

• These consumers adopt before the average person, but only after the product has proven itself in the market. They are cautious and prefer reliability over risk. 

  • Seek evidence of product quality and reliability 

  • Reads reviews, compares options 

product modifications

quality, design, functional

quality modifications

• improve the performance, durability, or reliability of a product

• ex: A phone upgraded with a stronger water-resistant rating

design

• change the appearance or style of the product without changing how it works.

  • ex: A smartphone released in new colors or redesigned body

functional

• adding new features or changing how the product works.

• ex: A smartphone with a better camera system or foldable screen

service characteristics

Intangibility, Inseparability, Perishability, Heterogeneity

Intangibility

• services cannot be touched, held, or inventoried like physical products 

  • Haircut, legal advice 

  • customers can feel the effects but not physically hold the service.

Inseparability

• means a service is produced and consumed at the same time, often with the customer present.

  • Flight can’t happen without crew and customers

Perishability

• services cannot be stored or inventoried  for later sale

  • Once the day passes the revenue is lost 

  • Creates pressure to use dynamic pricing and promotion to maximize occupancy 

Heterogeneity/variability

means service quality can differ based on the provider, the time, or the circumstances

new product development process

1. Idea Generation

2. Screening

3. Concept Testing

4. Business Analysis

5. Product Development

6. Test Marketing

7. Commercialization

business analysis

firm formally evaluates the product concept by estimating market size, sales projections, costs, profit potential, and break-even points.

product manager

• oversees a specific product line, managing all decisions across multiple brands within that line

  • oversees category

brand manager

• focuses on a single brand, ensuring consistency in positioning, messaging, and identity across all product variants.

  • Oversees one brand 

venture team

internal team formed to work on new business opportunities or innovations

trademark

legal protection granted to a brand name, brand mark, or slogan, preventing other firms from using the same or similar identifier

line extension

• not an update to an existing product, but rather the addition of a new variant in the same product family. 

  • Ex: Gatorade Zero

product modification

improvement or change made to an existing product