International Marketing Strategies
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Questions and Answers

What is international marketing?

The process of marketing goods and services in more than one country.

Successful international marketing can lead to massive sales revenues.

True (A)

Mistakes in international marketing can damage brands and increase costs.

True (A)

What are some factors that have contributed to the growth of international markets?

<p>Fortunate economics, stable political conditions, removal of trade barriers by national governments, improved technology in transport and communication, and more unified laws across countries</p> Signup and view all the answers

When a business decides to operate in other countries, what three fundamental questions should it consider?

<p>Can we bear the costs of such activities? (A), What level of control do we want to have over our marketing activities abroad? (B), What level of risk are we willing to take? (C)</p> Signup and view all the answers

Which of the following is NOT a common way for businesses to enter international markets?

<p>Social Media Marketing (B)</p> Signup and view all the answers

Indirect exporting occurs when a business or an exporting agency purchases products from a country with the purpose of trading those products overseas.

<p>True (A)</p> Signup and view all the answers

Direct exporting is the most common approach for companies that want to directly manage their sales in a foreign market and establish a long-term presence.

<p>True (A)</p> Signup and view all the answers

Exporting is the lowest risk strategy of entry into international markets and requires few resources.

<p>True (A)</p> Signup and view all the answers

What is franchising?

<p>A form of external growth where a franchisee buys the rights to use the name and business model of a franchisor.</p> Signup and view all the answers

Franchising is a quick, relatively easy and cost-efficient route into foreign markets.

<p>True (A)</p> Signup and view all the answers

Franchisors retain a high degree of control over the marketing of their products in a franchise agreement.

<p>True (A)</p> Signup and view all the answers

What does licensing involve?

<p>One company producing another company's products and using its brand name, patents, and expertise under license.</p> Signup and view all the answers

The film, television, and sports industries have used licensing as a strategy to enter international markets successfully.

<p>True (A)</p> Signup and view all the answers

What is direct investment?

<p>A long-term investment in a foreign country by a multinational company (MNC) that involves setting up factories and distribution facilities in the foreign country.</p> Signup and view all the answers

Direct investment can involve establishing assembly operations in a foreign country to assemble components that are produced domestically.

<p>True (A)</p> Signup and view all the answers

Another example of direct investment is when a business decides to develop its own foreign subsidiary, known as a wholly owned subsidiary.

<p>True (A)</p> Signup and view all the answers

What is a joint venture?

<p>A collaboration between companies from two different countries that combines their resources to create a new, larger company with the purpose of launching a product into a new market.</p> Signup and view all the answers

Each partner in a joint venture will hold an equity stake in the newly formed company and provide expertise to enable the company's development and operation.

<p>True (A)</p> Signup and view all the answers

International joint ventures are sometimes used to enter markets where the government restricts foreign ownership or speed of market entry is crucial.

<p>True (A)</p> Signup and view all the answers

What is a merger?

<p>When two companies legally consolidate into one company.</p> Signup and view all the answers

What is an acquisition?

<p>When one company purchases the shares of another company.</p> Signup and view all the answers

International mergers and acquisitions provide a fast route of entry into international markets and have been used recently by businesses from emerging markets.

<p>True (A)</p> Signup and view all the answers

When 50% of the shares of a company are acquired, the acquirer becomes the main shareholder and has decision-making control in the business.

<p>True (A)</p> Signup and view all the answers

Once a company has decided to operate internationally, the fundamental question it needs to answer to determine its marketing approach concerns whether its offerings should be standardized or adapted to local markets.

<p>True (A)</p> Signup and view all the answers

What does a global marketing strategy that aims to standardize everything in its marketing activities for all markets seek to achieve?

<p>To achieve greater efficiency and cost savings by using a single, consistent marketing message and approach across all markets.</p> Signup and view all the answers

Companies that successfully standardize their marketing activities often offer their customers high added value by providing them with better benefits than those of competitors, especially local competitors.

<p>True (A)</p> Signup and view all the answers

Most businesses choose to adapt their marketing activities to meet the local needs of consumers when entering new markets.

<p>True (A)</p> Signup and view all the answers

What does adaptation in marketing mean?

<p>Adjusting some or all elements of the marketing mix to meet the needs of local consumers.</p> Signup and view all the answers

Which of the following are benefits of entering and operating internationally?

<p>Spreading risks across a wider range of markets (A), Lower costs of production and economies of scale (B), Improved brand reputation through global reach (C), Larger pool of customers and greater sales revenue (D)</p> Signup and view all the answers

Which of the following are factors that threaten entry into international markets?

<p>Sociocultural factors (A), Environmental factors (B), Technological and economic factors (C), Economic factors (D), Political factors (E), Legal factors (F)</p> Signup and view all the answers

Flashcards

International Marketing

The process of marketing goods and services in more than one country.

Benefits of International Marketing

Global opportunities for companies that can lead to massive sales if done well.

Risks of International Marketing

Mistakes can damage brands and increase costs.

Globalization in International Marketing

The merging of cultures and the trend towards worldwide markets for goods and services.

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Control in International Market Entry

The level of control a company wants over its marketing activities abroad.

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Risk in International Market Entry

The level of risk a company is willing to take when entering a foreign market.

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Cost Considerations in International Market Entry

The ability of a company to bear the costs of international market entry and withdrawal.

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Direct Exporting

A company selling its products directly to overseas customers.

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Indirect Exporting

A company selling its products to an exporting agency who then sells to overseas customers.

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Franchising

A business model where a franchisor grants the right to use its brand and business model to a franchisee.

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Licensing

A company granting another company the right to use its brand, patents, and expertise under license.

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Direct Investment

A long-term investment in a foreign country by a multinational company (MNC), involving setting up factories and distribution facilities.

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Joint Ventures

A strategic partnership between two or more companies from different countries to launch a product into a new market.

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Standardization in International Marketing

A company selling its products and services in a standardized manner across different overseas markets.

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Adaptation in International Marketing

A company adapting its marketing mix to meet the needs of local consumers in different markets.

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Opportunity: Larger Customer Pool

The potential to reach a larger pool of customers and increase sales revenue.

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Opportunity: Lower Costs

The potential to reduce costs through economies of scale and lower production costs.

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Opportunity: Spreading Risks

The ability to spread risks across multiple markets, reducing reliance on a single market.

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Opportunity: Improved Brand Reputation

The potential to improve brand reputation and global reach.

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Threat: Sociocultural Factors

Cultural factors that influence consumer preferences and buying behaviour.

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Threat: Technological, Economic, and Political Factors

Technological, economic, and political factors that can affect business operations.

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Threat: Environmental Factors

Environmental considerations that can influence business operations, such as pollution and resource scarcity.

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Threat: Political Factors

Political factors that can affect business operations, such as government policies and regulations.

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Threat: Legal Factors

Legal factors that can affect business operations, such as laws and regulations related to product safety, consumer protection, and intellectual property.

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Merger

When two companies merge into one single company.

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Acquisition

When one company purchases the shares of another company.

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Takeover

When one company purchases a majority or all of the shares of another company to gain control.

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Study Notes

International Marketing

  • International marketing involves marketing goods and services in more than one country.
  • It creates global opportunities, potentially leading to significant sales revenue.
  • However, mistakes can damage brands and increase costs.

International Markets

  • Successful businesses often generate revenue from markets outside their home country.
  • Entry into international markets is driven by globalization, cultural merging, and the trend toward worldwide markets.
  • Important factors include favorable economic conditions, stable politics, reduced trade barriers, and advanced transportation/communication technologies.

International Market Entry Strategies

  • Businesses entering foreign markets must consider:
    • Desired level of control over marketing activities abroad.
    • Acceptable level of risk.
    • Ability to bear costs associated with the activities.
  • Various entry methods exist, each differing in risk, control, and cost.

Exporting

  • Exporting, a common entry method, can be direct or indirect.
  • Indirect exporting involves an exporting agency purchasing products for overseas trade.
  • Direct exporting allows companies to build expertise and long-term relationships with foreign customers.
  • Direct exporting methods can include agents, distributors, or direct marketing/online sales.
  • Exporting is a relatively low-risk strategy requiring few resources.

Franchising

  • Franchising is an external growth method where a franchisee gains the right to use a franchisor's name and business model.
  • Franchisors typically are companies with successful models seeking expansion.
  • Franchising is a fast, relatively easy, and cost-effective way to enter foreign markets.
  • Franchises maintain high control over product marketing.

Licensing

  • Licensing involves one company allowing another to produce and use its brand, patents, and expertise.
  • Film, television, and sports industries commonly use licensing to enter international markets.

Direct Investment

  • Direct investment (FDI) is a long-term investment, often by multinational corporations, in foreign factories/distribution facilities.
  • It involves setting up foreign subsidiaries or assembling components produced domestically in the foreign country.
  • Direct investment signifies significant commitment to a foreign market.

Joint Ventures

  • Joint ventures involve companies from different countries combining resources to create a larger company.
  • Partners share equity stakes and provide expertise for company development & operation.
  • Joint ventures are often helpful for market entry when government restrictions on ownership are present.

Mergers and Acquisitions

  • Mergers legally consolidate two companies into one.
  • Acquisitions involve one company purchasing another.
  • International mergers/acquisitions are common entry methods in international markets, especially for those in emerging markets.

Takeovers

  • A takeover occurs when a company purchases a majority/all shares in another company, gaining control.
  • A 50% share purchase grants the purchasing party primary decision-making authority.

International Marketing Strategies

  • After deciding to operate internationally, an essential question is whether to standardize products, services, and communications across markets.

Standardization

  • Companies with global strategies aim to standardize marketing efforts for all markets.
  • This approach allows companies to offer high added value compared to their local competitors.

Adaptation

  • Many companies adapt their marketing strategies when entering foreign market segments to cater to local consumers' preferences.
  • Adaptation approaches cater to specific consumer needs.

International Market Entry Opportunities

  • Entering international markets offers larger customer pools, higher sales revenue, lower production costs, spread risk, and improved brand reputation.

International Market Entry Threats

  • Potential threats to market entry include sociocultural factors, technological and economic factors, environmental factors, political factors, and legal factors.

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International Marketing Strategies PDF

Description

Explore the key concepts of international marketing, including strategies for entering foreign markets and the factors that influence successful global business. Understand the risks, costs, and controls associated with various market entry methods. This quiz is essential for anyone looking to expand their business internationally.

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