global marketing exam 3

law of one price

all customers in market get best product for best price

global market products

diamonds, crude oil, commercial aircrafts, integrated circuits

pricing objectives/considerations

market share, roi, profit, rapid recovery of development costs

market skimming

charging a premium price

penetration pricing

charging low price to penetrate market quickly

companion products/captive pricing

products whose sale is dependent on sale of primary product

target costing (design to cost)

used by japanese companies to control costs, save on prod expense, and create competitively priced global products

target costing process

det segment to be targeted

compute overall target costs

allocate costs to products various functions

obey cardinal rule (if design team cant meet targets, dont launch product)

cost plus pricing

total cost depends on destination, transport, tariffs, fees, handling charges, documentation costs

export price escalation

increase in final selling price traded across borderes

full absorption cost method

per unit product costs are sum of all past or current direct and indirect manufac and overhead costs

rigid cost plus pricing

companies set prices without regard to eight pricing considerations

fliexible cost plus pricing

ensures prices are competitive in contest of particular market environment

ex-works (EXW)

seller places goods as disposal of buyer at time specificed in contract; buyer takes delivery at premises of seller and bears risks and expenses from that point on

free carrier sale (FCA)

sale occurs when goods are delivered to carrier

free alongside ship (FAS)

seller places goods alongside vessel or other mode of transport and pays all charges up to that point

free on board (FOB)

sellers responsibility does not end until goods have been placed aboard ship

cost, insurance, freight (CIF)

risk of loss or damage of goods is transferred to buyer once goods have passed ships rail

cost and freight (CRF)

seller is not responsible at any point outside of factory

delivery duty paid (d term)

seller agrees to deliver goods to buyer at place they name in the country of import with all costs, including duties, paid

currency fluctuations

complicate setting prices

weak home country curr makes exch favorable

strong home country curr makes exch unfavorable

inflation caused by

increase in money supply

currency devaluation

maintenance of operating margins

gov policies that affect pricing

dumping legislation

resale price maintenance

price ceilings

general reviews of price levels

restrict price competition

restrict profits taken out of conutry and limit funds paid for imports

require funds to be non interest bearing for a long time

extension/ethnocentric pricing

per unit prices are name no matter where buyer is

importer absorbs freight and import

adaptation/polycentric pricing

permits affiliate mgrs or independent distro to est price as they feel most desireable

geocentric pricing

intermediate course of action, recognizes that local costs/income/competition/local mktg strats are relevant to pricing

gray market goods

trademarked goods are exported from on country to another where theyre sold by unauthorized ppl

occurs when product is in short supplu

grey markt issues

dilution of exclusivity

free riding

damage to channel relat

undermining segmented pricing schemes

repuation and legality

dumping

sale of an imported product at price lower than that normally charged in country of origin

occurs when imports sold in US are prices at costs less than production

price fixing

representiatives of two or more companies secretly set similar prices for their products

horizontal price fixing

competitors within an industry that make and market same product conspire to keep prices high

vertical price fixing

manufac conspires w wholesalers to ensure certain retail prices are maintained

transfer pricing

pricing of goods/services/property bought and sold by operating units or divisions of company doing business with an affiliate in another jurisdiction

counter trade

payment is made in other form than money

counter trade options

barter, counterpurchase, offset, compensation trading/buyback, switch trading

barter

exch goods/services for goods/services

counterpurchase/parellel trading

cash is used for each good or service

offset

gov in importing country recovers cash spend on expensive goods

compensation trading/buyback

2 separate and parellel contracts

switch trading (triangular trade/trade and swap)

3rd party steps into simple barter or other agreement when one party doesnt want the goods in the transaction

4 standard/adaptation difficulties that compromise orgs comm efforts

message may not reach intended recipient

message is misunderstood

message may not induce recipient to take action

effectiveness is impaired by noise

pattern advertising

middle ground bt standardization and adaptation

basic comm concept where artwork/copy/etc are adapted as required for indiv countries

impact of digital revolution on advertising

agencies asked to leverage big data

big agencies buying digital marketing agencies

creative strategy

stmt or concept of what a message or campaign will say

rational appeal (ads)

depends on logic and speaks to consumers iintellect

emotional appeal (ads)

tugs at heartstrings or uses humor

selling proposition

reason for buying

creative execution

the way an appeal or proposition is presented

art directors

ad professional who oversees look of an ad

art direction

visual presentation of an ad

copy

written or spoken comm elements

copywriters

language specialists who develop headlines, subheads, and body copy

advertising cultural considerations

intimacy not good look in japan and illegal in saudi arabia

humor is dif in every country

some american celebs are good in japanese ads but not american

american ads rely on comparisons and spokespeople

japan ads rely on implied sentiment

global ad expenditures

US spends most money

TV has been #1 outlet

digital ads are surpassing traditional spending

PR and publicity

fosters goodwill and understanding, generated earned media

use news releases, media kits, press conferences, etc

corporate advertising

compensates for lack of control over publicity

image advertising

enhances publics perception, creates good will

advocacy advertising

presents companys pov on particular social, environ, cultural issue

PRs growth

builds consensus and understanding

creates harmony and trust

articulates and influences public opinion

anticipates conflicts and resolves disputes

4 trends of the 3rd wave of digital revolution

capital for all

reemergence of partnerships

social enterprise

rise of the rest

who controls the internet

Internet Governance Forum

Internet Corporation for Assigned Names and Numbers (ICANN)

maintains database of web addresses, approves suffixes for web addresses

convergence

coming together of previously separate industries and product categories

the innovators dilemma

staying committed to current profitable tech, focus on est customers