The driving forces for international marketing include all of the following . Market needs – technology – cost – government – communications A transnational or multinational firm is typically defined as: those that produce goods in more than one country and blend the market specific approach with the standardized production methods There are five stages of the product life cycle: Introduction, Growths, Maturity, Saturation, Decline The product trade cycle suggests: that the original exporter will eventually become importers It is often the case that products which are at maturity stage (of the product life cycle) n Australia will be at what stage in overseas markets?
Introduction of Growth International Marketing By bickering 23 – price – place and distribution – promotion – product Based on the explanation of the product trade cycle model, a high technology and expensive consumer product is more likely to be first produced and consumed in a developed country. The theory of comparative advantage suggests a country can gain from international trade even if it has a disadvantage in all goods. The restraining forces of international marketing include: differences between various national markets e. G. Lattice systems, legal requirements, cultural and societal values, economic developments, controls over entry and access to markets, actual or perceived risks. ) In terms of creating a positive relationship, when selecting a suitable agent or Joint- venture partner, firms should study the party’s:
Networks with which it is involved
The term holistic marketing refers to:
– Social responsibility marketing
– Internal marketing
– Integrated marketing
– Relationship marketing
Country risk is when a firm faces the risk of social/political instability in another country
Cross-cultural risk is when firms face the risk of cultural distance, negotiation patterns, decision-making systems, ethical practices, in another country. Commercial risk is when firms face the risk of weak partner, operational problem, timing of entry, competitive intensity, poor execution of strategy. Currency/financial risk is when a firm faces the risk of currency exposure, asset valuation, inflationary and transfer pricing.
A ethnocentric management orientation is one that favors the approach of home hint: Ethan for white people are racists A polytechnic management orientation is one that allows each overseas subsidiary to evolve its own unique business/marketing approach hint :poly for many A recognition orientation is one that views the region as the market and develops region-based strategies hint :r for regional A geocentric orientation is one that views the world as the market with the flexibility to respond to local needs and wants hint :g for global On the “wheel” of international marketing, the controllable elements are: the firm’s marketing mix (up’s)
There are four states of economic development
1 . Low-income
2. Low-middle income
4. High-income Low Income Countries (Africa, India – High birth rates, low literacy rates, limited industrialization)
Low-Middle Income Countries (Singapore, Taiwan, Korea – Expanding consumer markets, labor intensive industries)
Upper-Middle Income Countries (Croatia, Russia – Industrialization, high literacy rates, increasing arbitration)
High-Income Countries (Australia – Post-industrialized, sustained economic growth)
Income is measure by annual gross national income (IN) per head
The country’s balance of payments is a record of transactions between the residents of one country and those of all other countries
The Australian exchange rate is independently floating Purchasing power parity refers to the comparison of the purchase ability of currencies within different countries the most famous is the ‘Big Max Index’ Common barriers to entering an international market – economies of scale – capital costs – switching costs of buyers – Tariffs – Non-tariff barriers The three forms of foreign exchange risk faced by a firm include – transaction exposure – economic exposure – translation exposure
The classification of countries based on ‘economic structure’ is determined by factors that include: agriculture, industry and service Eight strategies for coping with recession in international markets.
They include all of the following except for:
1. Pull out
2. Emphasis a product’s value
3. Change the product mix
4. Repackage the goods
5. Maintain stricter inventory
6. Look outside the region for expansion opportunities
7. Increase advertising in the region
8. Increase local procurement
A high level of indebtedness in developing countries encourages them to engage in barter and countertenor. An economic union is defined as the free movement of products and factors of production across borders. Culture is dynamic, learned, prescriptive, subjective, and shared.
Culture is express in a number of ways, particularly through: – symbols, words, gestures, objects or pictures – heroes who possess qualities that are highly prized in the culture – rituals and ceremonies. Read also “Does marketing create or satisfy needs“
The two broad dimensions of culture are: culture is learned and shared.
The follow are the levels at which culture operates: – Global level – National level – Industry level – Language/Organizational level
The iceberg principle: Non-verbal communication includes – facial expressions, – random gestures, – body posture signals High Context culture emphasize background, societal status. Information is implicit meaning needs to be interpreted in relation to how things are said and body language. Low Context culture rules are explicit and specific.
Information is explicit meaning precise terms to how things are said and body language. Self-reference criteria (ISRC) refers to the tendency to evaluate the overseas situations in terms of your own local experiences Hefted Five Cultural Dimensions
1 . Power Distance (the degree to which inequality is accepted)
2. Individualism vs. Collectivism (achievement is value vs.. Group equality)
3. Masculinity vs.. Femininity (strong-minded, assertive vs. Modest, concerned with quality of life)
4. Uncertainty Avoidance (places premium on Job security, career patterns rules, trust vs.
Greater willingness to accept risk and less emotional resistance to change) 5. Long vs..
Short- term orientation (thrift, perseverance, trust vs.. Chase immediate returns, competitive, opportunism, price focus) Trampers’ Dimensions of Culture
1. Universalism vs. Particularistic (believe what is good and right can be applied everywhere vs.. Obligations imposed on relationships are more important)
2. Individualism vs.. Collectivism
3. Neutral vs.. Affective (In neutral expressions of emotions are repressed vs.. Affective cultures expressions of emotions are regarded as being natural)
4. Specific vs.. Diffuse trying to form a relationship first)
5. Achievement vs.. Ascription (status derives from achievement vs.. Status is based on age, gender, kinship, education, connections, etc.
**Etc approach: based on the notion that underlying cultural differences between nations are a set of variables that can be applied uniformly and which cover all dimensions of difference.
**Mimic approach: values and differences are culturally specific and not able to be reduced to common dimensions For example, Chinese mimic values are: Guiana, Maize, Reneging, ABA The major stages in international negotiations include: Pre-negotiation Opening Bargaining Concession (including agreement) Post-negotiation Effective international negotiation is summarized as the ‘five Up’s of international negotiation: – Preparation – Persuasiveness – Poise – Persistence – Patience
Chapter 5: Technology and Change Technology Adoption Paradigms 1st. Early Mechanization (sass – sass) 2nd.
Steam power and rail way (sass – sass) 3rd. Electrical and heavy engineering (sass – sass) 4th. Forbids mass production (sass – sass) 5th. Information technology and communication (sass – 201 5) 6th. Information rural networks (sass +) **A typical cycle length of new paradigm is 60-70 years plus 10 years of overlap The diffusion of key technologies and resources can have the impact of creating new economic and technological leaders
3. Customer Support
The ‘rule of three’ proposes: three firms, from the three economic regions of the world will dominate global industries. They are commonly known as, ‘Triad’. These regions are: Europe, North America, Asia.
In international marketing, the following are considered a traditional source of risk:
In international marketing, the stages of the innovation adoption process are –
Awareness: potential adopters are unaware of the product
– Interest: potential adopters are aware the product exists but don’t understand how it applies to them and their lifestyle
– Evaluation: potential adopters compare the product with existing products that satisfy the same needs using key comparative criteria