Questions and Answers
What is one method to avoid ethnocentric thinking in international marketing?
What should a business assess before entering a foreign market?
Which of the following is a suggested approach to research potential demand for a product in a foreign market?
What constitutes discretionary income?
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Which of the following is NOT recommended for avoiding ethnocentric thinking?
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Why is it important to consider discretionary income in international marketing?
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How can reading country profiles assist marketers?
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What is a potential risk of not assessing consumer's discretionary income?
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Which action may reinforce ethnocentric thinking in marketing strategies?
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What is a major benefit of assigning resources to visit foreign markets?
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Study Notes
Marketing Activities
- Key marketing activities include market research, product development, pricing, advertising, sales, and logistics.
- Market research helps solve marketing problems through data collection; secondary data is gathered by others, while primary data is specific to the business’s needs.
Product Development
- Market research plays a crucial role in product development by evaluating consumer reactions, minimizing risks associated with product launches.
Pricing
- Pricing must consider labor costs, material expenses, and overhead.
- Retailers apply markups to products to ensure profitability.
Advertising and Promotion
- Effective advertising and promotion strategies are essential for convincing customers to purchase products.
- Companies must analyze costs across advertising methods, noting that digital ads are often more affordable than print or television ads.
Sales Strategies
- Businesses explore various sales methods, including:
- Selling to retailers
- Opening their own stores
- Online selling platforms
Logistics
- Logistics involves managing the flow of goods and services, encompassing transportation, inventory management, warehousing, and packaging.
The Four Ps of International Marketing
- The Four Ps are Product, Place, Price, and Promotion, crucial for international marketing strategies.
Product Adaptation
- Canadian products often require modifications for international markets, including adjustments in:
- Packaging (weights, colors, language)
- Ingredients
- Product style
Place Strategy
- Centralized strategy involves all manufacturing and marketing in one location; decentralized strategy utilizes local manufacturing or sales forces.
- E-commerce expands market reach using online platforms for international sales.
Sales Agents and Trade Shows
- Sales agents receive commissions for marketing products in foreign countries.
- Trade shows allow manufacturers and distributors to showcase products to buyers.
Branch Plants
- Establishing branch plants is a costly but potentially effective market entry strategy.
Price Considerations
- Companies using a centralized strategy may face increased prices in foreign markets, impacting competitiveness.
- Price increases can stem from:
- Higher labor costs in foreign production
- Shipping expenses for long-distance transport
- Duties and tariffs levied on imports
- Legal compliance costs for market standards
Promotion Strategies in Foreign Markets
- Three promotional approaches include:
- Utilizing existing ads for similar markets
- Translating ads which can be challenging
- Creating new ads, which may be costly but are simplified by the Internet.
Consumer Affordability and Discretionary Income
- Assessing consumer affordability is critical for new market entries.
- Discretionary income refers to funds remaining after essential expenses (e.g., rent, groceries) are paid, influencing potential customers' purchasing power.
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Description
This quiz covers key concepts in Chapter 7 of International Business, focusing on various marketing activities such as market research, product development, pricing, and promotion. Understanding these fundamentals is crucial for effective international marketing strategies.
