MK 3350 Final Exam

Why is maintaining quality essential in today's competitive global market? 

Quality is essential for success in today’s competitive global market

 What are the factors affecting the rate of diffusion of an object? 

Degree of perceived newness, perceived attributes of the innovation, and method used to communicate the idea

What are the five characteristics of innovation diffusion?

Relative advantage, compatibility, complexity, trialability, and observability

What are the three distinct components of a product, and why is it necessary to analyze them for adaptation? 

Core, packaging, and support services; product = multidimensional, sum of its features determines the bundle of satisfactions utilities received by the consumer 

What are the characteristics of consumer services, and how can they be marketed globally? 

Intangibility, inseparability, heterogeneity, perishability; can be marketed - as an industrial (B2B) or consumer service

What are the different types of brands in international markets?

Global, national, country-of-origin effects and global brands, and private brands 

 What is the country-of-origin effect, and how does it influence consumer perception of a product? 

Influences that the country of manufacture assembly, or design - has on a consumer’s positive or negative perception of a product

What is a private label, and how does it impact the competition between private labels and manufacturers' brands? 

Private labels provide the retailer with margins, receive preferential shelf space and in-store promotion, and are quality products at low prices

Manufacturers' brands must be competitively priced and provide real consumer value

What is the difference between a global brand and a national brand? 

Global brands: ideally gives the company a uniform worldwide image and the ability to translate

National brands: acquiring national brand names, using global brand names, nationalistic pride impact on brands 

Use global brands where possible and national brands where necessary

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How can a company determine the degree of newness of its product and gain the largest number of consumers in the shortest span of time?

Can determine the degree of newness as perceived by the intended market by using **innovative products and adaptation**

**Foreign marketing goal:** gain the largest number of consumers in the market, in the shortest span of time

Why is affordability important in international marketing?

So a product can be made accessible to the target market at an affordable price

What is the issue of getting the target market for a product in international marketing?

Can be a costly process

What is the most critical and challenging task facing the international marketer?

Forging an aggressive and reliable channel of distribution 

What is a distribution process?

Physical handling and distribution of goods, passage of ownership, buying and selling negotiations b/t producers and middlemen, and buying and selling negotiations between middlemen and customers

What is an import-oriented distribution structure?

Demand exceeds supply, the customer seeks the supply from a limited number of middlemen, and distribution systems are local

What must be done in an important-oriented or tradition distribution structure?

Importer controls a fixed supply of goods and marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers

What are the trends in traditional to modern channel structures?

European retailers merging with former competitors and other countries to form Europe-wide enterprises, and foreign retailers attracted by high margins and prices

What is the most important distribution trend?

The Internet 

What is the importance of small stores in Japan?

Small stores account for 59.1% of retail food sales

Which country has a high density of middlemen?

Japan

How many intermediaries can consumer goods go through before reaching the consumer in Japan?

Not unusual for consumer goods to go through 3-4 intermediaries before reaching the consumer

What is Tanpin Kanri?

A practice focused on satisfying customer demand through a store-by-store approach to shelf management that employs store-level human knowledge and information sharing about products, for the purpose of better understanding how certain conditions affect demand on a product-by-product basis, and then pursuing a cycle of product procurement, production, development, and delivery that suits the demand 

What are the requirements of Tanpin Kanri?

Store employees use local data to optimize product offerings

Employees are trained to predict

Slow-moving items are removed quickly and fast-moving items are retained and enhanced

Store employees observe consumer activities and reactions

Enhance experience

Provide information

Recommendations to consumers

Suggestions to management

What were the benefits to Mcdonald's from using local fries?

30 lower cost structure and no exposure to the fluctuating exchange rate

Inventory levels were reduced from an average holding of 15 days for imported fries to 6 days for local

Reduction in shipping time (60 - less than a day) = significant benefit for risk management and contingency planning

What were the challenges McDonald's faced in producing high-quality French fries in India, and how did they overcome them? 

In India, ideal potato growing and storage conditions = did not exist & storage was an issue

McDonald’s petitioned the Indian government to allow imports of fries into India (were limited to 800 metric tons of French fries) => growing the right potato was key

Started to work locally, after a few yrs, McCain was able to produce fries that met expectations

What were the reasons for Wal-Mart's struggles in replicating its successful EDLP model in Japan, and how did Japanese consumers perceive low prices? 

Japanese consumers linked low prices to low quality

Didn’t like Walmart’s principal value proposition

High competitive market 

Difficult to manage highly fragmented and relation-driven supplier base in Japan

What additional elements local stores accommodate? What were the effects of weather of the day on product promotion in Japan, using 7-eleven Japan as an example? 

Time: weather, holidays, different times of a day

One example is before the monthly payday of Japanese workers, 7-Eleven discounts its price until the payday

How did weather and climate changes impact product promotion in India, citing the McDonald's French fries supply chain as an example? 

The Indian climate allows growth only in the winter versus the long summers in parts of the U.S. and Europe. 

The growing season in India is between 90 to 100 days as opposed to 120 to 140 days during the summers in the U.S. and Europe. 

Outdated farming and irrigation practices limited yields as well.

Typical Indian potatoes have high sugars, low solids, and are small―not a good fit for long french fries

What were the reasons for Wal-Mart's unsuccessful model in South Korea, and what were the factors that contributed to their exit from the market?

Was a poor fit due to consumers valued a luxurious, service-oriented shopping experience more than low prices

Local consumers were attracted by the diversity in food and beverages

What are the types of channel control?

Inventory financing, cumulative rebates, merchandise returns, and promotional support

What are some of the business philosophy?

Relationship, goal congruency, emphasizes loyalty, harmony, and friendship, supports long-term dealer-supplier relationships

What are the factors affecting the selection of alternative middlemen in global business? 

Seller must exert influence over two sets of channels (one in the home country, one in the foreign-market country)

What are the benefits of using physical distribution?

Cost advantages

Optimal inventory levels

Optimal production capacity 

More dependable delivery survive to the market 

Can render natural obstructions created by geography less economically critical for multinational marketer 

What are the common shipping modes and services used in international trade?

Common shipping modes (ocean shipping, airfreight, air express, and parcel post), containerization, intermodal services, intermodal marketing companies (IMCs), rail transportation, complete logistics management services (UPS, FedEx), Merge-in-transit

How can companies locate, select, and motivate channel members in different countries? 

Locating middlemen 

Selecting middlemen – Screening – The agreement 

Motivating middlemen – Financial rewards, psychological rewards, communications, company support, and corporate rapport 

Terminating middlemen 

Controlling middlemen – Sales volume objective, inventory turnover ratio, number of accounts per area, growth objective, price stability objective, and quality of publicity 

What does CIF, C&F, and FOB stand for?

CIF (cost, insurance, freight) , C&F (cost & freight), and FOB (free on board) 

What is integrated marketing communication?

Composed of advertising, sales promotions, trade shows, personal selling, direct selling, and public relations

What are the major components of the marketing communications mix for most companies?

Advertising and personal selling

What can the availability of approriate communication channels determine?

Entry decisions

What are sales promotions?

Marketing activities that stimulate consumer purchases and improve retailers' effectiveness and cooperation

What do short-term efforts directed to the consumer or retailer achieve?

Specific objectives

What is PR creating?

Good relationships with the popular press and other media, help companies communicate messages to customers, the general public, and governmental regulators 

What are some examples of international public relations efforts

Bridgestone/Firestone safety recall

What does international advertisting do?

Perform marketing research, specify the goals of communication, develop the most effective messages for the market segments selected, select effective media, and compose and secure a budget

What do marketing problems require?

Require careful marketing research and thoughtful and creative advertising campaigns 

What has there been an increased need for?

Increased need for more sophisitcated advertising strategies

There is a balance between what?

Standardization of advertising themes and customization

What does effective communication consist of?

Demands the existence of a psychological overlap between the sender and receiver

Can never be assumed that if it sells well in one country, it will sell well in another

What are some of the legal constraints that can affect advertising in different countries?

Comparative advertising, advertising of specific products, control of advertising on TV, accessibility to broadcast media, limitations on length and number of commercials, and special taxes that apply to advertising 

What is the one major barrier to effective communication through advertising?

Language

What can help avoid problems by linguistic differences?

In-country testing

What must encompass the total advertising project?

Knowledge of cultural diversity

What is often hard to overcome?

Existing perceptions based on tradition and heritage

What are some examples of production limitations that can impact advertising?

Poor quality printing, lack of high-grade paper, and low-cost reproduction in small markets

What tactical considerations should be taken into account when planning media?

Availability, cost, coverage, lack of market data, and more

How are advertising campaigns typically managed?

Local domestic agency, company-owned agency, multinational agency with local branches

What are the type of advertising agencies?

Local domestic, company-owned, and multinational agency with local branches

What are some ways personal selling can help a firm?

Oral/direct conversation between salesperson and prospective customer; introduce products, promote corporate image, generating sales in a more predictable way, timely feedback, and more

What are some factors to consider when designing a sales force for global marketing?

Must be made regarding the numbers, characteristics, and assignments of sales personnel

What are the prime requisiteis that management must define when selecting sales and marketing personnel?

Maturity, emotional stability, positive outlook, flexibility, and more 

What factors determine the nature of training programs for international marketing?

The home culture of the sales person, culture of the business system and foreign market 

According to Sun Microsystems, how much can the use of the internet shorted training cycles for sales?

75%

What are some personal selling tips for doing business in Belgium, China, Colombia, Germany, India, Russia, and South Korea?

Belgium - be able to identify the decision makers

China - expect to continue negotiations after a deal is signed

Colombia - Business counterparts want to get to know you personally and form friendship with you

German - be prepared with data and empirical evidence 

India - schedule remains flexible

Russia - First meeting will be formality, be warm and approachable

South Korea - Business card indicate title, do not send a rep to meet with a Korean executive 

What must be considered when motivating the marketing force across different nationalities and cultures?

National differences

What role do communications play in maintaining high levels of motivation among sales personnel?

Foreign managers need to know that the home office is interested in operations

Want to know what is happening in the parent country 

What are some common causes of expatriate failures?

Lack of an understanding of cultural differences and their effect on management skills

Can cultural skills be learned and developed? How do they help individuals in business?

Can be learned and developed, providing the individual with the ability to relate to a different culture even when the individual is unfamiliar with the details of that particular culture

Why are foreign language skills important in the business community?

Improves cultural understanding and business relationship

How are companies making efforts to recruit bilingual or multilingual employees?

Recruiting people who are bilingual or multilingual

What is the marketing manager’s responsibility when it comes to pricing goods in different markets?

To set and control the actual price of goods in different markets in which different sets of variables are to be found

What are parallel imports?

Develop when importers buy products from distributors in one country and sell them in another to distributors who are not part of the manufacturer’s regular distribution system

Explain the difference between skimming and penetration pricing

Skimming: used by a company when the objective is to reach a segment of the market that is relatively price is insensitive

Penetration pricing policy: used to stimulate market and sales growth by deliberately offering products at low prices 

Why do goods sometimes have higher prices in foreign countries than in their home country?

Higher prices = higher costs of exporting

How does inflation and deflation affect pricing strategy?

Inflation: In countries with rapid inflation or exchange variation, the selling price must be related to the cost of goods sold and the cost of replacing the items

Deflation: In a deflationary market, it is essential for a company to keep prices low and raise brand value to win the trust of consumers

What is countertrade & why is it important for international marketers to be familiar with it?

A tool every international marketer must be ready to employ; often gives company a competitive advantage

What is dumping?

Use of marginal variable cost pricing, selling goods in foreign country below the price of the same goods in the home market