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International Marketing Exam 2 (Part 2)

Terms in this set (16)

What are the implications of such a law, and how does it affect international business?
Antitrust laws in the United States and other countries are designed to combat restrictive business practices and to encourage competition. Agencies such as the U.S. Federal Trade Commission, Japan's Fair Trade Commission, and the European Commission enforce antitrust laws. According to some legal experts, the pressures of global competition have resulted in an increased incidence of price-fixing and collusion among companies.
Why are trade secrets so important and what happens if a licensee or a government gains access to the licensor's trade secret?
Trade secrets, like the formula of Coke, are confidential information or knowledge that has commercial value and is not in the public or government domain. Trade secrets include manufacturing processes, formulas, designs, and customer lists. To prevent disclosure, the licensing of unpatented trade secrets should be linked to a confidentiality contract with everyone who has access to the protected information
What is this law concerned with, and why is it a subject of criticism by many?
The act concerns disclosure and prohibition. The disclosure part of the act required publicly held companies to institute internal accounting controls that would record all transactions. The prohibition part makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business. Some critics of the FCPA feel strongly that this act is a sort of regrettable display of moral imperialism.

A second criticism of the FCPA is that it puts U.S. companies in a difficult position visas foreign competitors. It is perceived that the act adversely affects U.S. businesses overseas.
What should a U.S. company do if competitors are willing to offer a bribe for business in a foreign country?
One is to ignore bribery and act as if it does not exist. The other is to recognize the existence of bribery and evaluate its effect on the customer's purchase decision, in other words, treating it as just another element of the marketing mix. If possible, a lower price, a better product, or better advertisement/promotion can be undertaken to beat the competition.
In December 2012, U.S. President Barack Obama signed the Russia and Moldova Jackson-Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act. What does this law entail and how does it affect Russia-U.S. relations?
The first part of the law normalizes trade relations with Russia and Moldova by repealing Jackson-Vanik, a law dating back to mid-1970s. At that time, the Soviet Union was a non-market economy and restricted the right of its citizens to emigrate abroad. Jackson-Vanik denied most-favored-nation trading status to any country that blocked emigration rights.

The second part of the law is concerned with civil rights issues in Russia at the present time. Sergei Magnitsky was a Russian lawyer who uncovered evidence that Russian government officials had stolen $230 million in tax payments made by the Heritage Capital Management investment firm. When Magnitsky went public with his allegations in 2008, he was arrested. The law calls for the U.S. government to identify by name Russian officials believed to be complicit in Magnitsky's death; those persons will not be allowed to enter the United States and any assets held in the United States have been frozen.
In most of the European Union countries, the influence of regulatory agencies is pervasive. What steps will be necessary of a corporation to protect business interest and advance new programs?
Executives of companies who would like to go global should realize that the influence of regulatory agencies worldwide is getting very pervasive. One way to understand the operation and legal aspects related to business environment is to have permanent representation of the company in the country. Companies hire several lobbyists to represent their interests as well as to influence the direction of the regulatory process.
Demographic changes can create opportunities for marketing innovation. Justify this statement using examples.
For example, demographic change has been a driving force behind a renaissance of shopping malls in the United States. The first enclosed mall opened in 1956. After over 50 years retail experts were using terms like "dying culture" to describe American shopping malls. Similarly in France, two entrepreneurs began rewriting the rules of retailing years before Sam Walton founded the Walmart chain.
Considering these facts, highlight the ethnic segmentation and its importance.
For example, in the United States there are three major ethnic segments-African/Black Americans; Asian Americans; and Hispanic Americans. In other countries there are different combinations of ethnic population. Each segment shows great diversity and can be further subdivided. Even those coming from one country may have differences in language, culture, religion, and other attitudinal aspects. Their purchasing behavior is different within groups and sub-groups. From a marketing standpoint these groups offer great opportunity.
What are some of the pitfalls in assessing market potential and choosing target markets or segments?
After segmenting a market, the next important step is to assess the attractiveness of the identified segments. This is an important part when assessing emerging country markets as potential targets. Several potential pitfalls in assessment should be taken into account. In general, there is a tendency to overstate the size and short-term attractiveness of individual country markets. This can happen if estimates are based primarily on demographic data such as income and population. Persistence and long-term outlook often pays off in new markets. A second pitfall may originate from pressures placed on marketers by shareholders or competitors. The possibility of missing out on entering a condition is in itself a stress-causing factor.
Discuss the basics of a framework for selecting target markets highlighting the salient features of David Arnold's framework.
Instead of a "top-down" segmentation analysis beginning with, for example, income or population data from a particular country, Arnold's framework is based on a "bottom-up" analysis that begins at the product-market level.

The product-market refers to a market defined by a product category. Arnold's framework incorporates two core concepts: marketing model drivers and enabling conditions. Marketing model drivers are key elements or factors required for a business to take root and grow in a particular country market environment. The drivers may differ depending on whether a company serves consumer or industrial markets.
What important lessons did Virgin chief executive Richard Branson learn in the mid-1990s when he launched Virgin Cola, directly targeting Coca-Cola's core market?
However, taking on Coke taught them two lessons: how to make a great cola with a different taste; and how to antagonize a global business that brought in $28 billion in 2007, with profits of $5 billion. They underestimated the power and the influence of a global brand that epitomizes the strength and reach of American capitalism.
Assume that the market segment is judged to be large enough, and the strong competitors are either absent or deemed to be vulnerable, then is it safe to enter the country?
If the market segment is judged to be large enough, and there are no strong existing or potential competitors, one should not assume that it is safe to enter the country. There are several other factors that can negatively impact a business. For example, significant regulatory hurdles may be present that limit market access. The company may also encounter cultural barriers or religious restrictions.
Explain the basic categories of target marketing strategies and how they can be implemented.
Standardized global marketing is analogous to mass marketing in a single country. It involves creating the same marketing mix for a broad mass market of potential buyers.

Product adaptation is minimized, and a strategy of intensive distribution ensures that the product is available in the maximum number of retail outlets

Concentrated targeting is also the strategy employed by the hidden champions of global marketing-companies unknown to most people that have succeeded by serving a niche market that exists in many countries.

The third category differentiated global marketing, represents a more ambitious approach than concentrated target marketing aka Multi-segment targeting. This entails targeting two or more distinct market segments with multiple marketing mix offerings.
What is psychographic segmentation, and how do marketers use it in targeting different world markets?
Psychographic segmentation involves grouping people in terms of their attitudes, values, and lifestyles.

Different groups are given names based on the attributes which describe their attitudes, values, and lifestyles. Automakers rely on this segmentation since the purchase behavior of a considerable size of consumers is dependent on psychographic values. A psychographic study showed that Porsche buyers could be divided into several distinct categories. One of the categories, "Top Gun" was found to buy Porsches and expect to be noticed. Proud Patrons and Fantasists, on the other hand, found such conspicuous consumption as irrelevant.
How does positioning help in deciding on a marketing strategy? What are the differences between using "attribute or benefit" and "quality and price" as positioning strategy?
Positioning refers to the act of differentiating a brand in customers minds in relation to competitors in terms of attributes and benefits that the brand does and does not offer.

"Attribute or benefit" strategies are used to expose a particular product attribute, benefit, or other special feature. For example, Visa's advertising theme "It's Everywhere You Want to Be" exposes its benefit of being useful at any place in the world.

A similar strategy that is used is related to "Quality and Price." This strategy can be considered in light of a continuum from high fashion/quality and high price to good value. Swatch watches advertise their quality, Swiss origin, as well as affordable price.
What are the major differences between global, foreign, and local consumer culture positioning? Why are these differences significant? Give examples of how companies are trying to lure customers using these positioning strategies.
Global consumer culture positioning (GCCP) is defined as a strategy that identifies the brand as a symbol of a particular global culture or segment. For example, Sony's slogan "My First Sony" is positioned as the electronics brand for youngsters around the globe with discerning parents. Benetton uses the slogan "United Colors of Benetton" to position itself as a brand concerned with the unity of humankind.

Foreign consumer culture positioning (FCCP) associates the brand's users, use occasions, or production origins with a foreign country or culture. Local consumer culture positioning (LCCP) strategy associates the brand with local cultural meanings, reflects the local culture's norms, portrays the brand as consumed by local people in the national culture, or depicts the product as locally produced for local consumers.
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