MKTG 4840 Exam 1

Marketing Mix

Product, Price, Place, Promotion

Value

= Benefits / price

Globalization

Integration and interdependency of nation-state world economies

Standardization

Developing standard products marketed worldwide with same standard marketing mix

Adaptation

Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction

Ethnocentric orientation

Home country is superior to others, sees only similarities in other countries, leads to standardized or extension approach, assume products will succeed anywhere

Polycentric

opposite of ethnocentric. Adaptation strategy, each country is unique, referred to as multinational, leads to localized approach

Regiocentric

region that becomes relevant geographic unit. Ex: US focusing on countries in NAFTA

Geocentric

Entire world is potential market, combination of standardization and adaptation, integrated global strategies. Transnational company, world markets from single country

Political and Economic Systems

• Economic systems start as state planned and move to "Free" market

Political Systems

Totalitarian-------> Communist-------> Democratic--------> Anarchy

Economic Systems

State planned -------> "free market" (the ideal state of a nation, there are always regulations and no state can ever fully by "free"

1. International

Between one or more countries

2. Multinational

Have operations in more than one country: sales office, employees

Global

Everywhere?

Gross Domestic Product

the market value of currently produced, final goods and services produced annually within a country's borders.

GMS

Global marketing strategies - can enhance a firm's worldwide performance

Leverage

some type of advantage that a company enjoys by virtue of the fact that it has experience in more than one country.

Restraining forces of a company's engagement in global marketing

Management myopia, orgazational culture, national controls, opposition to globalization

Economic systems criteria

Type of economy, Type of government, Trade and capital flows, The commanding heights, Services provided by the state and through taxes, Institutions, Markets

Super bowl ads

Local - 20-40k National - 4.5m

The triad

US/western europe/japan: 75% of world income

GATT

General agreement on tariffs and trade. Treaty to agree upon trade with signed countries, replaced by WTO

Purpose of WTO

to protect and promote free trade

Types of economic integration

Free trade area, customs union, common market, economic union

Balance of payments

record of all economic transactions between the residents of a country and the rest of the world

Hedging

exchange rate exposure that involves establishing an offsetting currency position such that the loss or gain of one currency position is offset by a corresponding gain or loss in some other currency

Hierarchy of preferential trade agreements

FTA ----> Customs union ----> common market ----> economic union -----> political union

Culture

is a way of living, built up by a group of human beings, that are transmitted from one generation to another

Aesthetics

overall sense of what is beautiful and what isn't beautiful

Low context culture

messages are explicit and specific, words carry most of communication power

High Context culture

less information is contained in the verbal part of a message. More information resides in the context of communication, including the back ground associations, and basic values of communications

Power distance

the extent to which the less powerful members of society accept power to be distributed unequally

Self reference Criteria

SRC. Tendency of individuals to use one's own cultural values to evaluate others

How to reduce cultural myopia

Define the problem of home country, define problem in terms of host-country, isolate the SRC influence and examine it, redefine the problem without the SRC influence and solve for the host country situation

Remarkably successful product adaptation

movies and animation

Environmental Sensitivity

reflects the extent in which products must be adapted to the culture specific needs of different national markets

Cultural intelligence

captures the extent to which an outsider is able to interpret someone's unfamiliar and ambiguous gestures

Individualist cultures

each member of society is primarily concerned with his or her own interest and those of his or her immediate family

Collectivist cultures

all of society's members are integrated into cohesive in-groups

Adoption process

Mental stages an individual passes through as they learn about a new product 1. Awareness 2.Interest 3. Evaluation 4. Trial 5. Adoption

Political environment

made up of governmental institutions, political parties, and organizations that rulers and people use to wield power

Political risk

change in a political environment or government policy that would adversely affect a company's ability to operate effectively

OPIC

Overseas private investment corp, provides insurance to US companies doing business abroad

Common law vs civil law

Common is handed down by word of mouth, civil is a formal law written with judges, etc

Patent vs trademark

Patent is for use with invention for specific period of time, trademark is for distinguishing character or mark on product or service

WIPO

world intellectual property organization, specialized agency of the united nations, allows trademark owners to seek protection in as many as 185 countries with a single application and fee

Antitrust laws

Designed to combat restrictive business practices including fixing prices, limiting production

Foreign Corrupt practices act

Requires publicly held companies to institute internal accounting controls that would record all transactions, makes it a crime for a US corporation to bribe an official of a foreign government or political party to obtain or retain business

Seizure of assets

Expropriation: government action to disposes a foreign company or investor
Confiscation: no compensation is provided in seizure.
Nationalization: gov takes control of entire industry, must satisfy public purpose

MIS

Management information systems - provides managers and other decision makers with a continuous flow of information about company operations

Intranet

private network that allows authorized company personnel or outsiders to share information electronically in a secure fashion without generating paper loads

CRM

Customer relationship management - helps companies collect, store and analyze customer data

Personal source market info

info that comes from relationships with people

Market research

1. Problem ID 2. Methodology 3. Collect Data 4. Analyze data 5. Report

Recession

negative economic growth for two quarters in a row

Full recovery

After recession, bounce back to where left off

Causes of recession

Deregulation, Miscalculation of risk, Failure of diversified portfolio strategy, Highly leveraged borrowing

When will china overtake US?

As soon as 2012 for PPP, or 2020. Analysts keep moving their predictions closer. 2019 most accurate if exchange rate rises and GDP outgrows working population

Writing for translation

Translation is a team effort, it takes time and coordination. Direct translation do not equal real meaning. A translation glossary of terms is critical for success. Changes, once translation begins, increase costs and result in delays. Avoid slang, idioms, use prepositions Cleary, and provide unit conversions, use standard and consistent terminology, include one thought or action per sentence.

Market Research checklist

Does market have 10 years of established research? Is translation done properly, front to back? Are all units converted appropriately? Have you accounted for current events and holidays that country? Have you prepared different forms of question for different dialects or languages? Are your moderators culturally prepared? Is your interviewing setting appropriate for the culture?

What are factors which influenced the expansion of coke distribution in the 1950s?

The Wars and promoting solders drinking, so foreign people saw US soft drinks and wanted them. Technology helped too: radio, television. Relationships made during war formed after with distributors in other, new countries.

Is "pattern" advertising a standardized or localized approach?

Standardized, across all countries coke logo is virtually the same.

What product strategies do you think coke uses worldwide?

Different packaging and formulas used in different countries

Coke communicates a standard of living in the US, therefor, the brand has become a _______ of American lifestyle.

Staple, Icon, Standard