IMM1 flashcards

Part I: The decision whether to internationalize
Part II: Deciding which markets to enter
Part III: Market entry strategies
Part IV: Designing the global marketing programme
Part V: Implementing and coordinating the global marketing programme

Definition 1: Finding and satisfying global consumer needs better than the competition and coordinating marketing activities across national boundaries.

Definition 2: Global marketing focuses on global market opportunities and threats.

Key Elements:

• 1. Carrying out international marketing research
2. Analyzing market segments
3. Understanding similarities and differences in customer groups across countries
4. Adapting products & services

Simple Level: International marketing involves the firm in making one or more marketing mix decisions across national boundaries.
 
Complex Level: It involves the firm in establishing manufacturing facilities overseas and coordinating marketing strategies across the globe.

• 1. Marketing mix development
1. 4 Ps: adapt or standardize?
 
2. Coordination of marketing activities
 
3. Integration of competitive moves




  

 
 

Glocal refers to a marketing approach that combines both global strategies and local adaptations to cater to specific markets.

Scale: Accumulated volume in production, resulting in lower cost price per unit.

Scope: Reusing a resource from one business/country in additional businesses/countries, which generates cost savings.

 

• 1. Deregulation
2. Market responsiveness
3. Global Accounts
4. Network Relationships
5. Worldwide Technology & Communication
6. Worldwide Markets
7. Global Village
8. Global Cost Drivers

Barriers of internationalization refer to the challenges and obstacles faced by companies when entering foreign markets. These barriers may include cultural differences, language barriers, regulatory hurdles, and logistical challenges.

The Penrosian Approach is based on the resource-based view of the firm. It emphasizes the role of a firm's unique resources and capabilities as the foundation for international expansion.

Vernon's Life Cycle Concept suggests that a product goes through distinct stages in its life cycle, from innovation to maturity. A firm's internationalization strategy is influenced by the product's stage in its life cycle, which determines the most appropriate markets and production locations.

The Uppsala Internationalization Model posits that firms gradually expand their international presence by incrementally increasing their commitment to foreign markets. Firms initially enter markets with lower psychic distance, then expand to more distant markets as they gain experience and knowledge.

The Transaction Cost Approach to internationalization emphasizes the importance of minimizing the costs associated with cross-border transactions. Firms choose their entry mode and market strategies based on factors such as market uncertainty, asset specificity, and frequency of transactions.

Dunning's Eclectic Paradigm, also known as the OLI framework, suggests that a firm's internationalization strategy is determined by the interplay of ownership, location, and internalization advantages. Firms expand internationally when they possess unique assets, can exploit location-specific advantages, and can internalize transactions more efficiently.

The Network Approach to internationalization emphasizes the role of relationships and networks in facilitating a firm's international expansion. Firms leverage their connections with suppliers, customers, and other stakeholders to overcome the challenges and risks associated with entering foreign markets.

Born Globals are firms that pursue internationalization from or near their inception. These firms often have a global vision from the start and are characterized by rapid international expansion, innovative products, and a strong focus on niche markets.

The Three-Stage Model is a framework for analyzing international marketing and business environments. It consists of three levels of analysis: Macro, Meso, and Micro. Each level focuses on different aspects of the environment that influence a firm's internationalization strategy.

The Macro Level examines the broad, external factors that impact a firm's internationalization strategy. These factors include political, economic, social, technological, environmental, and legal aspects (PESTEL analysis). By understanding the macro environment, companies can identify opportunities and threats in foreign markets.

The Meso Level focuses on the industry-specific factors that influence a firm's internationalization strategy. These factors include competition, market structure, market size, and growth potential. Analyzing the meso environment helps companies determine their competitive position and identify attractive markets for entry or expansion.

The Micro Level examines the internal factors of a firm that shape its internationalization strategy. These factors include the firm's resources, capabilities, organizational structure, and management. Analyzing the micro environment helps companies identify their strengths and weaknesses, and develop strategies to leverage their competitive advantages in foreign markets.

The Blue Ocean Strategy Framework is a business and marketing approach that emphasizes creating uncontested market spaces, or "blue oceans," by offering unique value propositions to customers. It focuses on innovation, differentiation, and value creation, rather than competing in overcrowded markets or "red oceans." The framework involves the following key components:

• 1. Value Innovation: Combining differentiation and low cost to create unique value for customers.
2. Strategy Canvas: Visualizing the current competitive landscape and identifying opportunities for creating blue oceans.
3. Four Actions Framework: Eliminating, reducing, raising, and creating factors to redefine the industry's value curve.
4. Buyer Utility Map: Identifying the key stages in the buyer's experience cycle and uncovering areas for innovation.
5. Three Tiers of Non-Customers: Targeting untapped potential customers by understanding and addressing their needs and preferences.
6. Six Paths Framework: Challenging industry assumptions and exploring alternative ways to create value.

Corporate Social Responsibility (CSR) refers to a company's commitment to conducting business in a socially, economically, and environmentally responsible manner. CSR involves balancing the interests of various stakeholders, including shareholders, employees, customers, suppliers, and the wider community. Key aspects of CSR include:
 

• 1. Ethical Conduct: Ensuring that business practices adhere to legal, ethical, and social standards.
 
2. Environmental Sustainability: Minimizing the company's environmental footprint by implementing eco-friendly practices, such as reducing waste, conserving resources, and promoting energy efficiency.
 
3. Social Impact: Supporting community development through philanthropic activities, volunteerism, and fair labor practices.
 
4. Economic Development: Contributing to the economic well-being of local communities by creating jobs, investing in infrastructure, and supporting small businesses.
 
5. Transparency and Accountability: Communicating the company's CSR activities to stakeholders and demonstrating a commitment to continuous improvement in CSR performance.

Primary Data
- Experimental: Field & Laboratory
- Non-Experimental: Qualitative & Quantitative

Secondary Data
- Internal
- External

Purpose: holistic understanding, rich, in-depth insights
Method Example: focus group, depth interview, etc.
Sampling: Small samples
Setting: natural
Operation: high flexibility in data collection
Data Capture: emergent, post coding
Data Focus: verbal
Analysis: content analysis
Reporting: Underlying themes illustrated by quotes from respondents

Purpose: Broad generalization
Method Example: survey, experiment
Sampling: Large samples
Setting controlled
Operation: low flexibility in data collection
Data capture: pre-figured, pro coding
Data focus: numerical
Analysis: statistical analysis
Reporting: statistical

- often used to assess thoughts, opinions and feelings
- collecting data from a predefined group of respondents to gain information and insights
- standardized procedure to avoid biases
- is a list of questions aimed for extracting specific data from a particular group of people
- done via phone, mail, internet and face2face

Manipulation of the values (or levels) of one or more (independent) variables and observation of the corresponding change in the values of one or more (dependent) variables under controlled conditions to test a hypothesis of a relationship of the variables.

Most experiments try to establish cause-effect relationship and the claim of an experiment is always expressed as a causal statement.

Experimental Groups:
Compare the differences between the groups, which then can be attributed merely to the independent stimulus.

Control Group:
The control group does not receive the independent variable stimulus.

- A/B Testing is a user experience research methodology
- A/B tests consist of a randomized experiment with two (sometimes more) variants, A and B
- compare two versions of a single variable, typically by testing a subject‘s response to variant A against variant B, and determining which of the two variants is more effective

- Political
- Economic
- Sociocultural
- Technological

These factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:

- Political stability (e.g., bureaucracy, corruption)
- Import restrictions (serves to protect the local industry)
- Local-content laws (serves to promote domestic manufacturing and local employment)
- Price controls (e.g., on food, cars, petrol, etc.)
- Tax policy (e.g., unreasonable taxation)
- Employment laws (e.g., the strength of labor unions)

structures and processes by which a nation-state is governed.

Government types:
- Authorian (concentration of power in an individual or small group, often military or ideology-based)
- Democratic (system based on accountability of governments to the people, through free election)

Many political systems fall on a continuum between democracy and authoritarianism:
The market-oriented authoritarian or semi-authoritarian system characterizes numerous emerging economies, where the state guides economic development.

• vary from country to country

often result from government action
- import restrictions (e.g., the import of raw materials, machines and spare parts)
- local-content laws (i.e., products with locally made parts)
- price controls (on essential products, e.g. pharmaceuticals, food, petrol, cars)
- tax controls (used as a means of controlling foreign investment)
- labor restrictions (e.g. labor union)

trade laws that favor local firms and discriminate against foreign ones

Tariffs:
- specific
- ad valorem
- discriminatory

Non-tariff trade barriers:
- quotas
- embargoes
- admin. delays
- local-content requirements

Economic factors affect the purchasing power of potential customers and the firm's cost of capital. Some examples include:
- Economic growth (e.g., GNP, GDP)
- Economic integration (e.g., in a trading block)
- Exchange rates (affect demand for products)
- Inflation rate
- Interest rate
- Unemployment and labor supply
- Levels of disposable income and income distribution

GNP = Gross National Product
GNP per capita = GNP/population
the value of all goods and services produced by a country during a one-year period (domestic production + international activitie

GDP = Gross Domestic Product
GDP per capita = GDP/population
the value of all goods and services produced by the domestic economy over a one-year period

• PPP theory states that the exchange rate between one currency and another is in equilibrium when their domestic purchasing powers at that rate of exchange are equivalent.
• For example, the Euro should buy the same amount in each country (once you take the exchange rate into account).

Socil factors include the demographic and cultural aspects of the external macro environment. These factors affect customer needs and the size of potential markets. Some social factors include:
- Population growth rate and age profile
- Population health and education
- Career attitudes
- Lifestyle trends
- Social attitudes and social taboos
- Cultural orientation (high-context vs low-context cultures)

- The learned ways in which a society understands, decides and communicates.
- "the collective programming of the mind which distinguishes the members of one group or category of people from another“ (Hofstede, 1991)
- includes both verbal & non-verbal language
- can be thought of as having three levels

refers to an interdependent world economy in which people in one part of the world interact with people in another part as buyers, sellers or intermediaries

For:
- consumers have more choices
- creates economic growth
- creates new jobs
- rising living standards

Against:
- countries diminish their sovereignty
- culture becomes diluted
- governments have fewer ways to monitor companies
- increased income inequalities, workes‘ exploitation

• Low geographic distance (entering a nearby country)
• Low cultural distance (low cultural differences)
- Refers to the degree to which cultural values in one country are different from those in another country.
• Low psychic distance (perceived low differences between the home country and “foreign” country)

  

- Captures the manager’s individual perception of the differences
- An interpretation of reality, highly subjective/emotional
- Important determinant of international marketing strategy

The consequences of psychic distance may be addressed by the firm, but this is not the case with cultural distance, which is outside of the firm’s control (psychic distance paradox).

1) Power Distance
2) Uncertainty Avoidance
3) Performance Orientation
4) Assertiveness Orientation
5) Future Orientation
6) Humane Orientation
7) Institutional Collectivism
8) In-group Collectivism
9) Gender Egalitarianism

Markets/countries are screened primarily according to some external screening criteria
- Population size
- GDP/GNP (buying power)
- Political stability
- Trade barriers
- Technological aspects (e.g. access to Internet, smartphones owned)
- Etc.

Useful indices
Business Environment Risk Index (BERI) Business Monitor International Economist Intelligence Unit Euromoney’s Country Risk Index