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EXAM 1: Globalization Chapter 1 Pearson reading

Terms in this set (35)

REDUCES MARKETING COSTS: companies that sell global products can reduce costs by standardizing certain marketing activities (e.g. a company selling a global consumer good, such as shampoo, can make an identical product for the global market and then simply design different packaging to account for the language spoken in each market. Companies can further achieve cost savings by keeping an ad's visual component that same for all markets but dubbing TV ads and translating print ads into local languages).

CREATES NEW MARKET OPPORTUNITIES: A company that sells a global product can explore opportunities abroad if the home market is small or becomes saturated (e.g. if not enough internet users in one's own country, can target internet users abroad)

LEVELS UNEVEN INCOME STREAMS: a company that sells a product with universal, but seasonal, appeal can use international sales to level its income stream. By supplementing domestic sales with international sales, the company can reduce or eliminate wide variations in sales between seasons and steady its cash flow (e.g. a company that produces suntan and sunblock lotions can match product distribution with the summer seasons in the northern and southern hemispheres in alternating fashion -- thereby steadying is income from these global, yet highly seasonal, products)

LOCAL NEEDS ARE IMPORTANT: Despite the potential benefits of global markets, managers must constantly monitor the match between the firm's products and markets to not overlook the needs of buyers. The benefit of serving customers with an adapted product may outweigh the benefits of a standardized one. (e.g. soft drinks, fast food, and other customer goods are global products that continue to penetrate markets around the world. But sometimes these products require small modifications to better suit local tastes. In India, where cows are sacred and the consumption of beef is taboo, McDonald's markets the "Maharaja Mac" -- two all-mutton patties on a sesame seed bun with all the usual toppings).