Chapter 1

Define the following?

International marketing: The process of expanding and operating within a global markets using specific marketing
tools.
Marketing mix: choosing and adjusting certain marketing tools and then deciding how to use them to meet
marketing objectives.
Information demand: information is often needed as domestic market is different compared to foreign markets,
information needed could be legal system, geography, culture, competitive environment.
Business risk: with limited information, companies face greater risk and uncertainty operating in foreign market.
Insufficient information=outcome can’t be predicted.
Complexity: entering new market has great complexity and differentiation in both management responsibilities and
marketing task.
Uncertainty: entering new market is high risk and require high demand of information.
 Effective response- designing measures to reduce uncertainty by procuring necessary information.
 Modeling different scenarios and analyzing consequences.
Arbitrage: occurs when consumers try to take advantage of price differences in different markets, purchasing from
one market and selling in another for profit.

What are some issue of international marketing?

Information demand
Business risk
Complexity
Uncertainty

What are the task of international marketing?

Accessing or managing relevant feedback (supplier, consumer, and competitors feedback)
Coordinating marketing activities.
Optimizing profits across all market.

What are some feedbacks in international marketing and how does it help?
Supplier feedback: information from producers (company goals, financial position)
Consumer feedback: information from consumers (preferences and buying behavior)
Competitor feedback: information about competing companies (strategies and operations). E.g. Start Alliance,
different airlines became affiliates.
-Getting feedback helps make better decisions to direct the cope of marketing activities.

Explain competitor feedback with the help of an example. Can competitors become allies?

= Information about the strategy and operations of companies providing similar products.

 Airlines compete normally with each other, but need to be aware of each other’s strategies.
 As alliances, they complement each other: Quality standards of the group, share advertising budgets, central
reservation system etc.
 Individual airlines can market themselves better due to shared costs.

What is supplier feedback and why is it important in international marketing?

= Information from producers of products and services, such as company goals and financial position
Company goals etc. focus on the company as a whole, not the individual markets.

Describe company goals that they focus on?

Market position (market share, sales, market coverage)
Cost (efficiency, productivity)
Profitability (profit, return on capital)
Financial goals (liquidity)
Social goals (security, job satisfaction)
Prestige goals (image)
Why are company goals important in the internationalization process of organizations?
Transnational objectives allow a company to create a common language that connects across different cultures and
mentalities and create a common identity.
=basis of a transnational corporate culture.

How does consumer feedback occur in regards to international markets?

Consumer preferences
Spread of consumers
Buying behavior
Cross-border exchange of information and goods is essential source of consumer feedback required for national
marketing activities.

How does consumer feedback influence the globalization markets?

Globalization of markets is a result of standardizing consumer needs and also a standardization of information that
marketing handles.

Describe the environmental factors in international market development?

Technological factors (voltage, cell phone frequency)
 Advance in communication and transport technology (freight), have led the distribution of labor,
management and production.
 Reduced costs associated with sourcing materials, producing goods and services and selling them in multiple
locations.

Political-legal factors (sanctions, type of government)

 Asses the political stability as well as the development and implementation of their legal system.
 Qualitative method- determine risk factors, currency risk and security.
 Quantitative method- using BERI (business environment risk index, evaluates risk for each country using
data from interview with managers and researchers) and ICRG international country risk guide (evaluates
risk for each country)
 Cross-national trade barriers (free trade agreements reducing cross national barriers)
o ASEAN
o NAFTA
o GAFTA

Socio-Cultural factors (culture, custom, habits)

Hofstede can be used to illustrate the culture of a country
Power distance- extent to which less powerful members of organization and institutions accept and expect that
power is distributed unequally
Individualism- ties b/w member are loose (expected to look after themselves). Collectivism: people integrated into
groups.
Masculinity-men’s values are assertive and competitive (gap b/w male and female). Femininity: men’s values are
modest and caring and similar to women’s values (no gap b/w male and female values)
Uncertainty avoidance- people feel threatened by certain or unknown situations and strive for security. Low-take
risk , high-minimize risks.
Long-term orientation-focus on future, value thrift and perseverance. Short term value respect for tradition, fulfilling
social obligations and protecting one’s “face”.

Describe the two buying behavior?

Individual buying behavior
 Socio-economic structures and values
Organizational buying behavior
 Centralization of procurement process is important to companies and crucial to their buying behavior.
 Bundling demand and strengthening competitive position is the motivation for companies to centralize
procurement process.
 Country –specific
  Standardization

Describe levitt’s key points?

There is an increase of homogenous markets as well as the development of cross culture with converging needs.
 Similar sociodemographic development in many industrial nations
 Societies increasingly experiencing and integrating foreign cultures.
 Improvements in transport (quicker and less expensive flights) and communication technology (internet and
wireless technology)

Chapter 2

Describe the two different market segmentation?

Multinational market segmentation
 Focuses on difference between countries
 Multi-stage process: choose a market that has potential development, after that consumers are segmented.
 Strategy is ideal for differentiated products

Global market segmentation

 Focuses on similarities between countries
 One step approach across countries
 Views world as homogenous market and identifies worldwide target groups
 Used for global brands such as fashion brands and technology products.

How is multinational market segmentation evaluated?

Evaluates countries based on attractiveness and accessibility.
Criteria variables:
Economic variables: income of population, GDP
Sociodemographic variables: age, birth rate, education level
Political-legal variables: country stability, investment security
Geographic variables: quality of transportation routes, climate
Technological variables: technological infrastructure to design communication policies.
Cultural variables: power distance, masculinity, individualism vs collectivism.

How is attractiveness and accessibility evaluated?

Attractiveness
Market growth
Population growth
Price level
Political stability
Establish own production site (subsidiary/joint venture)

Accessibility
Norms and standards
Language difficulties
Customer loyalty
Economies of scale
Competition within market
State regulations

How is global market segmentation evaluated?

Sociodemographic variables
Psychological variables
Behavioral variables
Lifestyle and values
Studies: GfK Romper consumer styles (worldwide), Gfk Euro Socio Style (in Europe), VALS (values and lifestyle)
Gfk in Germany lists which segmentations?
Dreamers
Adventures
Open-minds
Homebodies
Rational-realists
Organics
Settlers
Discerners

VALS list which segmentations?

Achievers
Thinkers
Innovators
Believers
Strivers
Experiencers
Makers
Survivors

Describe the market segmentation for B2B sector?

 Easier then consumer markets
 Client are already international –facilitates segmentation of markets
 Customer have been analyzed according to qualitative and quantitative criteria.

 Producers that use standardized product rage- use customer segmentation

 Producers that have differentiated product range- segment across borders by using customer contact
 Producers with less fixed customer don’t have to segment at all- use “follow customer” strategy.

Describe the different modes of market entry?

Direct export (also indirect)
Licensing (or franchising)
Contract manufacturing
Joint venture
Subsidiary

List the evaluation for market entry strategies?

Realizing the advantages of standardization and differentiation
Risk
Opportunity to exercise control
Dependency
Resources needed
Requirements concerning replication
Requirements concerning configuration

Explain the two timing market strategies

Cross-national timing strategy
 Waterfall strategy: gradual market entry
o Advantages
 Requires less resources resulting in low risk and creation of bridgehead strategy
o Disadvantage
 Potential competitors introduce imitation product on market not yet developed
 Risk of premature decisions
 Sprinkler strategy: simultaneous market entry
o Advantage
  Entering before competitors
 Protection against outdated products
 Establish barriers for market entry and balance risk
o Disadvantage
 Need high financial and personnel resources as well as level of coordination

Country-specific timing strategy
 Pioneer strategy: ahead of its competitor, first in the market
o Disadvantage
 High cost
 Competitors can later enter market at low cost “first riders”
 Risk associated being first in the market

 Follower strategy: companies wait for competitor to “test the water” before entering
o Advantages
 Low cost
 Knowing consumers’ needs on foreign market
o Disadvantages
 Dealing with barriers to entry established by pioneers

What is market exit strategy and what are the barriers?

There are two consequences
Internal effect: company’s economic results, structure and ongoing process
External effect: industry as a whole, stakeholder and shareholders.

3 barriers
Economic barriers- assed durability, bonding ties
Vertical barriers- vertical integration, customer and supply power
Management related barriers- management being personally effected, compensation claims.
Sunk costs- money spent that is not recoverable
 Exogenous cost (tangible)- discrete investments e.g. infrastructure
 Endogenous cost (intangible)- cost for strategies to stimulate demand e.g market research.

Chapter 3
What is primary and secondary research?
Primary research: that is collected and is tailored to individual needs of a company. It’s a new data that is collected.
 Focus group
 Surveys
 Field tests
 Interview
 Observation of consumer behavior
Secondary research: existing data (external or internal) sources by businesses, institutions and other organizations. It
can replace primary research data completely when sufficient data has been collected and not outdated.

What is the use of market research?

 Analyze the segment of market development
 Analyze the behavior of the players
 Analyze the effect of marketing tools
 Monitor company specific market factors

What are the functions of market research?

Stimulating function
Predictive function
Evaluative function
Controlling function
Affirmative function
Describe the different types of research approaches?
Quantitative
Pre-determined and instrument based questions
Statistical analysis and interpretation
Survey
Large sample
General insight
Numerical, representation result
Often used as a descriptive research

Qualitative
Open ended questions
Emerging method
Patterns, themes, interpretation
Case studies
Focus group
Small sample
Deep insight
No representative
Often used as exploratory

What are typical forms of primary research?

Non-experimental survey
Most widely used
Close ended questions
Quantitative
Representative sample
Bias minimized

Observational
Observing participants
Quantitative or qualitative
Natural or stage environment
Use of stimuli
Human or technical administration

Your marketing research department suggests using observation as technique. You’re not sure and would prefer
surveys. Name three possible reasons why?
 Surveys can be used more extensively- used in various scenarios, cost efficiently, used online, on phone, or in
person.
 Reasons for observed behavior are not obvious- not knowing why people behave the way they do, with a
survey, you can ask them about it.
 Observer bias- the person watching can bias in a certain way or they might be distracted. In a survey its
minimized.
 Interpretation of observations can be difficult
 Observations are time consuming

Your colleague insists on observation. What could their argument be?

 Behavior of consumer is studied directly rather than asking them to recall their behavior later.
 Behavior that the consumer are not aware of can be recorded.
 Not dependent on consumer’s willingness to ability to provide information (consumer don’t have to
verbalize, rather their reaction is interpreted and recorded)

Discuss advantages of written surveys vs. in person survey?

Written
Easy to conduct
Limited range of issues
Anonymous
More honest answers

In-person
Controlled situation
Additional explanation
Control course of survey

One location of your business has a very low turnover. Which market research tools would you use to shed light
on the situation?
Internal secondary data: since when did the sales decline?
External secondary data: development of the industry in general?
Primary data: survey or observation- the service provided or other failures of that specific location.

What is secondary research? List 2 internal and 2 external sources. List 2 advantages and 2 disadvantages?
Secondary research is based on existing data that can be used.
Internal resources: company’s own business statistic, research conducted previously, sales data.
External resources: federal or state or municipal statistics, results and reports from market research institutions and
universities, public information available.

Advantage: cheap and fast

Disadvantage: fit, accuracy

Chapter 4
Explain the industrial good sector?
 B2B- mostly organizations
 Complex buying process- involves multiple people, often different departments
 International business activities

Types of producers
Product
Pre-fabricated products purchased by consumer
Product specifity is low

Investment
Products are purchased before manufacturing
Customized components are assembles at customer site
“Follow the customer strategy.”

System
Supply products to unknown consumer or market specific segment
Products are interlinked and purchased in gradual series
“follow the customer” and customer segmentation are crucial in this type of producer

Supply
Supplying specific products
Aim for establishing long term relationship for ongoing supply
Relationship plays a major role in this type of producer

Explain the consumer goods sector?

 No direct relationship with customer
 Distributor sells the products
 Main challenge- specific distribution policies
 Relationship between distributors is important

Vertical Marketing System

  Where member of channel distribution work together to meet customer needs.
 One member is the owner of other members or independent firms are joined by contract.
 Administered VMS- one large powerful member coordinates the activities of other members without
ownership stake.
2 types of VMS contract- retailers cooperative (when retailers buy from joint wholesalers) and franchise organization
(producer licenses the wholesaler distribute its products)

Position Power
Trade sector dominates many sectors.
Information advantage as the trade sector has direct contact with customer.
Establish POS system, loyal cards which enables trade sector to collect detailed information about customer.

Control-led distribution
Controlled distribution also known as contract distribution
Advantages
 Securing company’s brand and customer trust
 Reduce time to market
 Quality of POS and congruence of target groups
 Independence partner of distribution partners and physical flow of goods

Explain the whole sale and retail sector?

 Influence by local market conditions
 Influences different strategies to distribute products internationally

Global/home country orientation (IKEA)

 Products and business concept is standardized.
 Establish economy of scale, spillover effect and synergy effect.

Multinational Orientation strategy (REWE)

 Products and business concept are differentiated.
 Country-specific- difference in price, communication and distribution.
 Makes sense for trade sector companies taking over local companies.
 Different products means closer to customer.
 Influence retail brand on local market.

Global orientation strategies (Carrefour)

 Mix strategies- providing differentiated product meeting the local market needs
 Cost advantage of standardized business concept

Explain the service sector?

- Provides great diversity of products.
- Non-material
- External factors
- Confidence building
- 4ps- product, price, promotion, placement
- 3 additional P’s people, process, physical evidence

People/personnel
- Company’s personnel are important
- Should have expertise and portray friendliness
- Employee nationality- employee from home country, respective national market or other countries.
- Different in culture and interaction between staff and customer
Process/physical evidence
- Process management is crucial
- Customer’s process should be transparent
- Physical environment should be based on customer’s preference (provides good image to company)
- Management capacity- having adequate number of employees to provide the service
- Communication image of company – fosters customer trust

A theme park is looking for a new sound system for one of their rides. They visit several other locations to
compare different systems. The ride will be redesigned for the new sound system and the sound system will have
to be synched to the overall theme park software grid. Which sector and business type does this describe?
Customer strategy?
B2B
Investment type
Follow the customer

Why are relationships so important in the industrial goods sector (B2B)? Why are these difficult to build and to
maintain?
Typically ongoing and long term (contrast to other sectors!)
Geographical distances
Language, culture, codes of conduct and behavioral patterns
Conflict and withdrawing from business relationships is therefore a common occurrence.

Describe the difference between the product and the systems business types in the industrial goods sector (B2B)?

Product: prefabricated, standardized products, low specificity, anonymous: select national markets and employ
typical exporting strategies.
Systems: unknown consumer or a specific market segment, interlinked products bought in gradual succession,
‘follow the customer’ and customer segmentation, market expansion is often connected to national markets
selected by the respective consumer

Describe the difference between the systems and the investment business types in the industrial goods sector
(B2B)?
Systems: unknown consumer or a specific market segment, interlinked products bought in gradual succession,
‘follow the customer’ and customer segmentation, market expansion is often connected to national markets
selected by the respective consumer
Investment: sold prior to manufacture, customized components are assembled at the location of the consumer, high
level of specificity, previous projects or process of tendering, ‘follow the customer strategy’.

Explain the term "capacity management" when it comes to service organizations?

Provision of staff and resources: adequate number of employees for securing service provision at an optimal level of
quality while considering cost effects

Which possible starting points to improve the service quality do you see for the personnel of a service
organization? Describe three improvement measures?
Granted adequate decision-making (empowerment)
Motivation: incentive and target systems
Management can set an example of service-orientation
Desirable corporate culture

Global segmentation of clients in B2B markets is different from consumer markets. There are qualitative and
quantitative criteria used. Name two criteria each?
Qualitative criteria: values, policies, etc.
Quantitative criteria: procurement potential, market power, ordering patterns

Chapter 5
What is product policy?
It’s essential for international marketing and contains all decisions about what products to offer and how to offer
them.

Explain the 3 product benefit- core, tangible and augmented?

Core benefits: a product’s benefit that makes it valuable to a customer (can be transferred to target market)

Tangible benefits: refers to aesthetic and prestige benefits.

Aesthetic benefit: the satisfaction of one’s needs through aesthetic product (design, color, quality)
Prestige: refers to social appeal (status symbol and social recognition)

Augmented benefits: refers to the customer service included with the product. (Assembling, maintenance and
repair..etc)

What is product mix policy?

Refers to all decisions on innovation, modification, differentiation and elimination

Explain the four dimension of product innovation with an example?

Subject dimension: distinguish a product that is new to a customer and product that is only new to supplier.
Intensity dimension: how innovative is the product.
Time dimension: product life cycle showing the period in which a product is considered innovative varies from
country to country.
Spatial dimension: where is the product new? Product sold in domestic market may be considered new in another.

What is reverse innovation?

Process of developing a product tailored to the needs of a developing or emerging country and then offering in
industrialized country.

What is a trademark?
It refers to the typographic design (logo) and or visual design of the brand name. the trademark is strongly linked to
the brand name.

What are the phases of consumer adoption?

Product awareness: consumer notices that a product is available.
Product interest: consumer in interested in product and wants more information.
Product evaluation: consumer evaluates, examines and compares the product.
Product trial: consumer tests the product.
Product adaptation: consumer buys the product.

What is international product mix and what are some strategies of it?
International product mix is determining the product mix width and depth for each market.

Transfer: transfer existing product range to the foreign market.

Reducing: reducing product range to offer a limited range of products (offer only “star” products)
Expanding: expanding product range by adding country specific products to the existing product range.

Transferring existing product mix from one market to a foreign one results in standardization. Can only be done if
domestic market and target market are very similar, especially in legal norms and consumer preferences. This
approach is possible for companies that:
Are only active in homogenous national markets.
Offer products that are strongly connected to cultural features.
Who product mix is relatively low.

Product standardization and adaptation?

Companies will standardize as much as possible, unless external obstacles prevent them from doing so.
 Legal restriction
 Cultural and sociodemographic factors- to maximize the tangible benefits of a product.
 Technological restrictions

What are the 3 brand policies?

Brand range: extent of geographic region that the brand is design for.
Parts of a country (regional brand)
Entire country (national brand)
Several national markets (international brand)

Brand positioning: consumer actual perception of the brand.

Factual/functional features
Emotional feature

Types of positioning
Point of different positioning (focuses on the differences)
Point of parity positioning (focuses on the similarities)

Brand architecture: refers to the relationship between a company’s products.

What is a single brand strategy? Name 3 pros and cons each.

A distinct brand is created for each product, each brand targets specific market segments and the company name
plays a less significant role (Ferrero rocher)

Pro:
Specific positioning
Potential for a global/regional brand
Market share and economies of scale effects

Con:
One product bears costs for the brand,
Greater need for coordination between countries
Low flexibility of country specific product life cycles

What is a multi-brand strategy? Name 3 pros and cons each.

One product sector has several brands operating within them and all of them are on the market simultaneously.
Each brand addresses a specific market segment

Pro:
High market exploitation
Covering a lot of shelf space
Weak negative spillover effects

Con:
Risk of over segmentation
Cannibalization
Low market share and economies of scale effects

What is an umbrella brand strategy? Name 3 pros and cons each.

All company products are bundled under one brand
Pro:
Risk of failure is decreased,
Strong acceptance in trade sector
Products share costs for the brand

Con:
More difficult to achieve unambiguous brand recognition,
Negative spillover effects between brands/national markets
Risk of substitutions

What is a family brand strategy? Name 3 pros and cons each.

Several products are offered under a consistent brand, hybrid of single brand and family brand.

Pro:
High brand exploitation
Lower risk of failure
Strong acceptance in trade sector

Con:
Negative spillover effects
Coordination needs,
More difficult to achieve unambiguous brand recognition

What does "made in" and "made by" mean?

 Made in: country of origin effects more important for companies with a global orientation than home
country orientation strategies (original image is blurred)
 Positive or negative connotations
 Shift to made by: strong brands, connected to a certain image of the respective home country

Why might products have to be adapted in order to sell them in other countries?
Legal regulations
Safety regulations
Standards

What does product differentiation mean? What are the respective levels?
The process of changing the features of a product to develop it for a specific target group.
 Product variants for each country segment

 Country-specific product variants in every target country

 Limited number of product variants for comparatively homogeneous country groups

 Several product variants for cross-country target groups that have similar needs regardless of where
consumers live

Chapter 6

What are additional costs in international pricing?

 Overcoming trade barriers- additional procurement and distribution cost (licensing, country specific quality
standards, accompanying export documents)
 Processing international orders- requires skilled employees in which requires high compensation.
 Logistics and contractual requirements (logistics, liability, packaging, or warranty claims)
 Production modification.
 Foreign trade risk (transportation or warehouse insurance)
 Exchange rate or hedging activities- inflation.
What is "cost based pricing?”
 Prices based on cost accounting information
 Cost of production + fixed amount or percentage profit.
 Used to determine lower price limit.
 Easy to apply, inexpensive, used for simple export business.

What is “demand based pricing”?

 Prices are based on observing customers.
 Models: jacob’s price threshold approach, price corridor approach by Simon and Fassnacht, Sander’s
microeconomic approach.

What is “competition base pricing”?

 Prices are based on pricing strategies of competitors.
 Adjust prices based on competitor’s behavior-defensive pricing strategy.
 Alternate strategy to competitors-aggressive market development strategy.

What environmental factors influence international pricing strategies?

 Inflation and currency effect
 Tax differences
 Sales channel differences

What are consumer related factors related to international price discrimination?

 Image
 Level of buying power in target country
 Similarity of buying preferences
 Arbitrage tendency

Explain price discrimination in an international context.

 Strategy that charges different prices in different in different market for the same product and services
based on what the seller thinks they can get the customer to agree to.
 Based on demand of product
 Can be done using expert evaluation, surveys such as conjoint analysis and historical market data.
 Can only be done if there is no interdependencies between established national market and consumer-
related factors.

What is price dumping?

 Action of exporting products at a price lower than standard pricing or price lower than cost of production.
 Penetration dumping, defensive dumping, cyclical dumping, unintentional dumping.
Chapter 7

Explain the following categories of promotional policy tools: "direct“, "indirect“, "unilateral" and "bilateral”?
Direct: customer contact is directly e.g. direct mail
Indirect: customer contact via intermediary e.g. advertisement in a magazine

Unilateral: one way e.g. company to customer

Bilateral: both way, company to customer and customer to company (e.g. telemarketing, e-mail communication)

How do you show contribution of promotion to value creation?

Complex and difficult
 Level of standardization/effect is difficult to determine
 Impact of effect on sales is difficult to determine
 Not to create a short term increase in revenue –sustained value creation
Define long-term strategic performance parameters
Include pre-economic success (e.g customer interest, website views)

Which performance parameters can be used to show contribution of promotion to value creation?
Consumer related performance parameter (measure the effect of promotional activities of consumer perspective of
brand value)
 Brand awareness, image, customer satisfaction, trust, commitment.
Company related performance parameters
 Customer loyalty (repeated purchases, recommendations, and willingness to pay increased prices)
Economic performance parameters
 Sales, profitability, market share, shareholder value

What are the disadvantages of standardizing promotion?

Country specific factors need to be considered.
Consumers feel that they are not being addressed.
Loss of effectiveness

Why is it difficult to determine the optimal level of standardization?

No option to view historical data to compare the effect of standardization/differentiation promotional approach.
Only a hypothetical “optimal level of standardization” which leads to plausible differentiation/standardization level.

What is international PR and what objectives are associated with it?

Communication that aims at cultivating a specific favorable company image and minimizes the potential conflict
between the company and the target countries.
 Identify with the interest of the target country
 Contribute to market development with the target country
 Establish a good relationship with the government offices
 Respects cultural and social differences
 Promotes a company image
 Emphasize the independence of foreign branch office relation to the headquarters.

What could be goals of direct marketing? What are possible tactics?

Loyal customer
Target: reinforce behavior, increase purchase, change purchase timing
Tactic: loyalty marketing (bonus pack
Competitor’s customer
Target: break loyalty, purchase more often
Tactic: sampling, contests, sweepstakes
Brand switchers
Target: persuade to buy more
Tactic: low price promotion
Price buyers
Target: appeal with low prices
Tactic: coupons, low price packages, refund, trade deal
What is direct marketing and what objectives are associated with it?
-Passive direct marketing- send something to the customer without their address in it, medium not established (e.g.
catalogues, generic mail material)
-Direct marketing-consumer has the opportunity to react (e.g. reply card, direct response advertising)
-Interactive direct marketing-direct dialogue with customer (e.g. telemarketing, e-mail communication)

Objectives: formation brokerage, increase customer interest, acquire new customers

A company has entered a new market and sells its products there. To make the consumers more aware of the
brand, the company with a multinational orientation uses sponsoring and public relations as communication tools.
What cultural influences does the company have to take into consideration and what consequences does this
have for it?

Sponsoring can build brand awareness in a new market.

What could be sponsored that matches the company’s product range?

Cultural influences:
-What is popular in the country?
-Sponsor visible events
-Sponsoring might also be financial -be very sensitive about possible interest conflicts and ensure corruption
prevention

Consequences:
-No positive spillover effects from e.g. neighboring countries
-Sponsoring might not be very effective marketing measure.

Public relations create visibility of the company, mitigate possible conflicts between the company and the target
country, create positive image of the company, create and sustain relations to the governmental authorities and civil
society, solve emerging image problems.

Cultural influences:
-PR practices in the country?
-What is the image of governmental representatives or other figures -> would they help or hurt?

Consequences:
-PR offers a wide range of different measures to create positive image of the company.
-Take cultural sensitivities into account to avoid possible conflicts.

Chapter 8

What is the role of the internet?

 Accessibility
 Cultural differences
 Negative feedback
 Market transparency
 Mobile applications
 Costs

Potential for standardization?

 Consistent brand image across touch point
 Distribution structure should be standardized
 Direct distribution, e-commerce, and authorized dealer
 Limit-evolution of national distribution network, cultural differences.

What is a joint venture and what are the pros/cons for it as market entry mode?
When two or more partner join together to contribute funds, expertise and often already existing company shares.
  Pro: share business risk, complementary resources
 Con: high investment capital, hard to find a good partner, loss of competitive in the market due to
knowledge sharing, cost for integration and coordination.

What is direct export and what are the pros/cons for it as market entry mode?
Sale without intermediaries (sole agencies, representative office, permanent establishment)
 Pro: low capital investment, economies of scale, internet as means of communication
 Con: no dependence on partners, no won market knowledge, transport cost and trade barriers.

What criteria determine the choice of market entry mode?

 Control: to what extent can we have control or to what extent do we give up control?
 Transfer and contribution capital: to what extent do we transfer capital to the national markets?
 Focus of values added: when the organization of distribution is transferred abroad, do we transfer focus of
value added as well?
 Transaction cost: to what extent do we associate cost with transaction?

What is a subsidiary and what are the pros/cons for it as market entry mode?
A direct investment in the national market without partners.
 Pro: full control, quick market entry and flexible adjustments, existing network of relationship leads to
efficient and effective market development, establish a presence.
 Con: high capital investment, risk

What are the pros/cons of vertical integration in international marketing?

 Guarantee a certain image
 Works for products and services that need explanation
 Avoids knowledge drain and intent to locally realize specific services
 Combination benefits of direct and indirect distribution:
 Influence on final customer and cost advantages, Strengthening business relationship, synergy effect on
supply chain, increase customer loyalty

When designing distribution channels, which steps should be followed?

 Vertical selection: to selection institutions to be used (direct sale, wholesaler, retailers, importer) direct vs.
indirect distribution.
 Horizontal selection: the number of institutions to be used for each stage. Single channel vs. multi-channel
distribution.
 Contractual agreement: organization and intensity of the cooperation with the institution.

What are the pros/cons for direct and indirect distribution channels?
Direct distribution
Pro: direct contact with customer increases customer service, identity requests and problems
Con: small clients, product range might have to be expanded, responsible for advertising

Indirect distribution
Pro: intermediaries market knowledge and advertising, fewer clients.
Con: not aware of relevant changes in the market, exclusive licenses.

What are the steps for an exemplary market entry strategy?

 Sporadic export: weak relationship with foreign market.
 Direct, active export with intermediaries, licensing and franchising, national business is separate from
international business, export division
 Joint venture, export division is replaced with international division, different markets not fully coordinated.
 Many foreign market, network of worldwide goods and service units are managed by national and
international activities, domestic market loses importance, re-organization-structure oriented towards
regional or national product matters replace international division.

Why is market transparency as a critical success factor when using the Internet for international distribution?
  Challenge: taking advantage of regional or national different of interdependent markets.
 Internet can cause problems due to universal access of information – market transparency
 Market transparency- pressure to differentiate prices.

Chapter 9

Describe the following market orientations?

Home Country Orientation = ethnocentric approach. Domestic market as starting point for standardization;
marketing concepts are transferred and adjusted only if necessary.
Global Orientation = geocentric approach. Global market as starting point for standardization; marketing concepts
are based on the commonalities between markets.
Multinational Orientation = polycentric approach. Differentiated concepts are adjusted to each market.

Describe the 4p’s and their market orientation?

Discuss advantages and disadvantages of multinational orientation?

Advantages:
 Better understanding of local market and market requirement
 Increasing market share and sale through intense market development
 Local customer feel more connected, “local image”

Disadvantage
 High cost for market research
 Product development
 Manufacturing
 Promotion
 Potential of process duplication
 Neglecting global growth
 No leverage of home country expertise

What is the “modular design approach” when selling products in other markets?
Used when customers in different countries have the same requirement for a given product.
Specific product components are altered only due to technical and legal requirements.
Core product can be adjust by separately assembling specific components.
Explain "ethnocentric standardization“, "ex works" and "ethnocentric promotion“. What market orientation do
they belong to?
Home orientation
Ethnocentric standardization- the product is unmodified when transferred to the target market.
Ex works- international trade term, all costs associated with transport is at buyer’s expense.
Ethnocentric promotion-based on the domestic market.

What is “built-in-flexibility”?
Relevant in global orientation
Product standardization-no adjustments planned
Design needs to accommodate the range of use, especially in regards to specific technical or legal regulations.

A French salad shop wants to expand to the Chinese market. Which market orientation and marketing mix do you
recommend?

I would recommend the multi-national orientation

Product: adapt to local market
Price- different prices taking into account local factors.
Promotion- message and media are adapted.
Place- customized strategies.