World Trade Dynamics & Competitive Advantage

• World trade dynamics involve the trade feedback effect, where a country's exports influence its national income and demand for imports, thereby affecting other countries' exports and incomes and countertrade, which is exchanging goods or services rather than currency.
• From a U.S. perspective, key indicators are GDP, which is the monetary value of all products and services produced in a country during one year, and the balance of trade, which is the difference between a country's monetary value of exports and imports.
• A trade surplus happens when a country exports more than it imports, while a trade deficit occurs when a country imports more than it exports.

Porter’s Diamond of National Competitive Advantage

• Factor conditions are a nation's ability to turn its natural resources, education, skill levels, and wage rates into a competitive advantage.
• Company strategy, structure, and rivalry refer to the intensity of competition, the number of companies in an industry, and whether these companies are publicly or privately owned.
• Demand conditions relate to the size of the market, consumer sophistication, and media exposure of products.
• Related and supporting industries involve the existence of supplier clusters that can foster innovation and efficiency.

Marketing in a Borderless World

• Protectionism involves tariffs, which are taxes on imported goods, and quotas, which are limitations on the quantity of specific goods that can be imported.
• GATT (General Agreement on Tariffs and Trade) was an agreement to lower tariffs and trade barriers.
• The WTO (World Trade Organization) is an organization that mediates trade disputes.

Rise of Economic Integration

• The EU (European Union), USMCA (United States-Mexico-Canada Agreement), and Regional Comprehensive Economic Partnership are examples of economic integration.

Marketing in a Borderless World

• Global competition is increasing, and strategic alliances are becoming more common.

Global Strategies

• International firms extend their home marketing strategy globally while multinational firms adopt multidomestic marketing strategies tailored to each specific country. Transnational firms use a global marketing strategy, attempting to standardize where possible and adapt where necessary.
• The growth of global consumers, particularly the homogeneity of global teens, has created a significant market. There are approximately 2 billion global teens with $820 billion to spend.
• The network global marketplace facilitates economic espionage, which involves collecting trade secrets about competitors.

Global Environmental Scan

• Cross-cultural analysis includes understanding values, customs, cultural symbols (semiotics), language, and avoiding cultural ethnocentricity (the belief that one's own culture is superior).
• Economic considerations involve assessing the stage of development (developed vs. developing), economic infrastructure, consumer income and purchasing power (including microfinance), and currency exchange rates.
• The political and regulatory climate includes considerations of political stability and trade regulations.

Global Market Entry Strategies

• Entry strategies include exporting, licensing, joint ventures, and direct investment.

Product Strategies

• Product strategies consist of product extension, product adaptation, and product invention.

Promotion Strategies

• Promotion strategies include identical messages, communication adaptation, and dual adaptation.

Distribution Strategies

• Distribution strategies must account for the availability of retailers and wholesalers and address disparities in infrastructure, transportation, communication, and warehousing.

Pricing Strategies

• Pricing strategies are affected by country-specific pricing restrictions.
• Dumping, which is selling products below cost in a foreign market, and gray markets (parallel importing) are key considerations.

Chapter 8

• Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions, which reduces risk and improves decision-making.

5-Step Research Process

• Step 1: Define the Problem. This step includes exploratory research (investigating a research question), descriptive research (describing something), and causal research (cause-and-effect experiments), then identify marketing actions and measures of success.
• Step 2: Develop the Research Plan. This includes specifying constraints, identifying necessary data, determining data collection methods, testing concepts, and devising sampling and statistical inference.
• A sample is a segment of the population selected for marketing research to represent the population as a whole, determined by who, how many, and how to get them.

Probability Samples

• Simple Random Sample: everyone in the population has an equal chance of selection.
• Stratified Random Sample: the population is divided into exclusive groups, and random samples are drawn from each group.
• Cluster Sample: the population is divided into exclusive groups, and the researcher samples entire groups.

Non-Probability Samples

• Convenience Sample: the researcher selects the easiest population members.

• Judgment Sample: the researcher uses their judgment to select the population.

• Quota Sample: the researcher finds and interviews a prescribed number of people in each of several categories.

• Step 3: Collect Relevant Information, using secondary data (commercial online databases) and primary data.

• Primary data collection methodologies: observing people, personal methods (mystery shoppers, ethnographic research, neuromarketing), mechanical methods (scanner data), and asking people (qualitative focus groups, interviews and quantitative surveys).

• Association Technique: participants respond to a stimulus with the first word or image that comes to mind; the response, its frequency, and speed all factor in.

• Construction Techniques: participants construct a story or picture from a stimulus; this could include collages or thought bubbles.

• Developing questionnaires requires precise question development.

• Primary data can be gathered through social media.

• Panels and experiments, information technology, and data mining can also provide relevant information.

• Step 4: Develop Findings through data analysis and present the findings.

• Step 5: Take Marketing Actions by making actionable recommendations, implementing them, and evaluating the results.

• Data often only tells part of the story, requiring additional understanding to fill gaps and disseminate findings to stakeholders.

• Judgments of the decision-maker will usually include Lost horse forecast, survey knowledgeable groups, and statistical methods.

Chapter 9

• The sequence of market segmentation follows: MARKET SEGMENTATION -> TARGETING -> POSITIONING.

• Segmentation involves identifying groups of people with shared characteristics within a broad product market, including common needs and similar responses to marketing.

• Segmentation can be done via demographics (gender, income, age, life-cycle stage, ethnicity), geographic (nations, regions, counties, cities, PRIZM clusters), behavioral (occasions, benefits sought, user status, usage rate, and loyalty status), and psychographics (values, personality, lifestyle, and cultural and ethnicity).

• Primary sources for market segmentation include company research, while secondary sources include BDI/CDI data, SMRB Simmons, MRI Mediamark, SRDS, and census data.

• Targeting is focusing marketing activities toward a previously identified, profitable segment of a market.

• Market attractiveness is determined by size (sales potential), growth, level of competition, ability to compete, cost to reach segment, and compatibility with organizational objectives and resources.

• Three approaches to going to market: undifferentiated, differentiated, and concentrated.

• Positioning is meaningfully setting a product apart from the competition, focusing on either the consumer or the competition by defining where the product stands in the mind of the consumer.

• A perceptual map visualizes how different brands are perceived along different attributes.

• Two approaches to product positioning: head-to-head positioning and differentiation positioning.

• An example positioning statement: To (target segment and need), our (brand) is (concept) that (point of difference).

• What is a Product?

• A product is anything offered in a market that satisfies a need or want.

• A service is an intangible activity or benefit offered by one party to another, not resulting in ownership.

• Experiences are what buying a product or service will do for a customer.

Product and Service Classifications

• Consumer products are classified by how consumers and business buy them.
• Convenience products are frequently purchased with minimal effort (e.g., newspapers, candy, and fast food).
• Shopping products are compared carefully on suitability, quality, price, and style (e.g., furniture, cars, and appliances).
• Specialty products have unique characteristics or brand identification, with buyers willing to make a special purchase effort (e.g., medical services, designer clothes, and high-end electronics).
• Unsought products are either not known to the consumer or not normally considered for purchase (e.g., life insurance and funeral services).
• Business products are purchased for further processing or business use.
• Organization marketing aims to create, maintain, or change attitudes and behavior toward an organization.
• Place marketing aims to create, maintain, or change attitudes and behavior toward places.
• Social marketing uses commercial marketing concepts to influence individuals’ behavior to improve well-being.
• The product mix is all products and items a seller offers.
• A product line is a group of closely related products marketed through the same outlets or falling within given price ranges.

New Products

• Product line length indicates the number of items in the product line, and can experience line filling, which means the product line increases.
• A product item is a specific product with a unique brand, size, or price represented by a stock-keeping unit (SKU).
• New products could fail due to an insignificant point of difference, no economical access to buyers, incomplete market and product protocol, not satisfying needs, bad timing, poor quality, low attractiveness, or poor marketing mix.

Product Development Process

• New-product strategy development involves deciding where to invest resources.
• Idea generation systematically searches for new product ideas from employees, customers, research and development, competitive products, or smaller firms.
• Screening and evaluation identifies good ideas and drops poor ones internally and externally (RWW framework, is it real, can we win, is it worth doing?).
• Business analysis reviews sales, costs, and profit projections.
• Development turns the idea into a prototype.
• Market testing tests new product concepts with target consumers under realistic conditions.
• Types of test markets include standard, controlled, and simulated.
• Whether firms test new product depends on investment size and uncertainty.
• Commercialization is the new product introduction, deciding when and where to launch.
• Commercializing grocery products involves slotting fees and failure fees etc.

Chapter 11

• Product Life Cycle and Strategy
• Introduction stage: slow sales, little profit, high expense.
• Growth stage: sales, profit increase, new competitors enter, consumer eduction.
• Maturity stage: increased promotion, slowdown in sales, substitute products.
• Decline stage: maintain, harvest, or drop the product.
• Four aspects of PLC: length, different graph shapes, multiple life cycles, and adoption at different PLC times.
• Diffusion of innovation: innovators, early adopters, early majority, late majority, laggards.
• Barriers to adoption: usage, risk or value barriers.
• Managing the PLC through a product or brand manager.
• Repositioning the brand can involve reacting to competitors, reaching a new market, catching a trend, or changing the value offered (trade up or down).
• Other strategies involve product or market modification.
• Market modification involves finding new customers or increasing product use.
• BDI (Brand Development Index) and CDI (Category Development Index) help in brand strategy.
• A brand represents the consumer's perceptions and feelings about a product, promising consistent features, benefits, services, and experiences.

Branding Strategy

• Product attributes are benefits, quality, features, style, and design.
• Quality includes level (supporting positioning) and consistency, or conformance quality (freedom from defects).
• Product features differentiate products, assessed by value to the customer vs. the cost.
• Style is aesthetics, while design contributes to usefulness.
• Brand name selection suggests benefits, is memorable, distinctive, fits image, is simple, and is legally protectable.
• Brand sponsorship includes manufacturers, private, licensed, and co-brands.
• Brand development strategies: line extensions, brand extensions, multi-brand, and new brands.
• Packaging involves designing the container or wrapper, labeling identifies the product, provides promotion, offers functional and perceptual benefits.
• Package challenges include connecting with customers, environmental concerns, cost reduction, health, safety, and security.