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International marketing Ch. 15,16,18,12

Terms in this set (36)

What is Materials management?
the inflow of raw material, parts, and supplies through the firm
What is Physical distribution?
the movement of the firm's finished products to its customers, consisting of transportation, warehousing, inventory, customer service/order entry, and administration
What factors contribute to the increased complexity and cost of global logistics?
Distance
Exchange rate fluctuations
Foreign intermediaries
Regulation
Security
What are some issues with modes of transportation?
Value-to Volume Ratio
Perishability
Cost of Transportation
What are the methods of modes of transportation?
Ocean Shipping
-Liner Service
-Bulk Shipping
Air Freight
Intermodal Transportation
Warehousing and Inventory Management
Hedging Against Inflation and Exchange Rate Fluctuations
Benefiting from Tax Differences
Logistic Integration and Rationalization
E-Commerce and Logistics
What is Third-Party Logistic (3PL) Management?
The largest 3PL sector is the value-added warehousing and distribution industry.
Logistical Revolution with the Internet
The trend toward third-party logistics is a result of the Internet and the intranet as well as concentrating on core competencies.
What drivers affect global pricing?
Company Goals
Company costs
Customer demand
Competition
Distribution channels
Government policies
Three kinds of company goals
Satisfactory ROI
Market share (low price to penetrate market)
Meet specified profit goal
Three kinds of company costs
Cost-Plus pricing
Dynamic Incremental pricing
Incremental costs
Two kinds of Competition drivers
Cross-border price differentials (different price in diferent countries)
Nonprice competition (improving quality, delivery, and aftersale
service)
Three kinds of distribution channels
Variations in Trade Margins and Length of Margins
Issues of Everyday Low Prices (EDLP)
Parallel Imports (Gray Market)
Sales transactions between related entities of the same companies are called...
transfer prices
5 options to lower the export price
1. Rearrange the distribution channel
2. Eliminate costly features (or make them optional)
3. Downsize the product
4. Assemble or manufacture the product in foreign markets
5. Adapt the product to escape tariffs or tax levies
7 ways to safeguard against inflation
1. Modify components, ingredients, parts and/or packaging materials
2. Source materials from low-cost suppliers
3. Shorten credit terms
4. Include escalator clauses in long-term contracts
5. Quote prices in a stable currency
6. Pursue rapid inventory turnovers
7. Draw lessons from other countries
Alternatives to price controls
1. Adapt the product line
2. Shift target segments or markets.
3. Launch new products or variants of existing products.
4. Negotiate with the government.
5. Predict incidence of price controls.
Criteria for making transfer pricing decisions
Tax regimes
Local market conditions
Market imperfections
Joint venture partner
Morale of local country managers
Dumping occurs when...
imports are sold at an unfair price
To minimize risk exposure to antidumping actions, exporters might pursue any of the following marketing strategies
Trading up
Service enhancement
Distribution and communication
Necessary conditions when developing a global pricing strategy
1. Nature of customers
2. Amount of product differentiation
3. Nature of channels
4. Nature of competition
5. Market integration
6. Internal organization
7. Government regulation
What is a Pricing Corridor?
to find the middle ground by upping prices in low-price countries and cutting them in high-price countries.
Step 1. Determine optimal price for each country.
Step 2. Find out whether parallel imports ("gray markets") are likely to occur at these prices.
Step 3. Set a pricing corridor.
Implementing Price Coordination. What four alternatives can global marketers choose from to promote price coordination within their organizations?
Economic measures
Centralization
Formalization
Informal coordination
On-Time Retail Information Management
Reduced Inventory
Market Information at the Retail Level
Strong logistics capabilities can be used as an offensive weapon to help a firm gain competitive advantage in the marketplace.
Retailing Differences Across the World
Industrialized countries tend to have a lower distribution outlet density than the emerging markets.
The identification of an appropriate overseas market involves the following 4 criteria:
Socioeconomic characteristics
Political and legal characteristics
Consumer variables (lifestyle, preferences, culture, taste, purchase behavior)
Financial conditions
Two kinds of Export Market Segments
Homogeneous market segments and clusters
Geographical and psychographic segments
(Issues of standardization vs. adaptation)
Indirect exporting involves the use of independent middlemen to market the firm's products overseas.
Name different kinds of indirect exporting:
Combination Export Manager (CEM): small overseas sales.
Export Merchants: buy and sell on their own accounts and
assume all responsibilities of exporting.
Export Broker: brings together an overseas buyer and a domestic manufacturer.
Export Commission House: places orders only on behalf of its foreign client.
Trading Companies
Piggyback Exporting: assume responsibility under a cooperative agreement of exporting
Direct exporting...
occurs when a manufacturer or exporter sells directly to an importer or buyer located in a foreign market
Name 3 types of direct exporting:
Export Department (operates independently of domestic
operations)
Export Sales Subsidiary (seperate legal entity)
Foreign Sales Branch (not a separate legal entity)
Facts about indirect exporting
-Low set up costs
-Exporter tend not to gain good knowledge of
export markets
-Credit risk lies mostly with the middlemen
-Since it is not in the interest of the middlemen
doing the exporting, customer loyally
rarely develops
Facts about direct exporting
-High set up costs
-Leads to better knowledge of export markets and international expertise due to direct contact
-Credit risks are higher especially in the early years
-Customer loyalty can be developed for the exporter's brands more easily
Characteristics of Emerging Markets
Low per capita income and rapid economic growth
High income inequalities
Chronic shortage of resources
Huge diversity within market
Weak, highly variable infrastructure
Unbranded competition
Technology is underdeveloped
Weak distribution channels and media infrastructure
What makes emerging market firms successful?
Create customized offerings
Develop business models to surmount problems
Deploy latest technologies
Cheap labor and in-house training
Rapid scale-up
Invest in talent to sustain growth
Positioning for emerging-market companies (Matrix)
1. Dodger (focuses on a locally oriented link in the value chainm enters a joint venture, or sells out to a multinational)
2. Defender (focuses on leveraging local assets in market segments where multinationals are weak)
3. Contender (focuses on upgrading capabilities and resources to match multinationals globally. often by keeping to niche markets)
4. Extender (focuses on expanding into markets similar to those of the home base, using competencies developed at home)
How do MNCs deal with the newcomers?
Go beyond low-cost sourcing in emerging markets
Develop products in emerging markets and bring them home
Copy branding tactics from emerging markets
Team up with emerging market giants
Invest in growing mass markets in developing countries
Products should be:
Affordable
Functional
Durable
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