International Business Study Guide

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IBM 414 Study Guide
Ch:12 Global Marketing Management: Planning and Organization

Global Marketing -
•The trend back toward localization
–Caused by the new efficiencies of customization
–Made possible by the Internet
–Increasingly flexible manufacturing processes
•From the marketing perspective customization is always best •Global markets continue to homogenize and diversify simultaneously –Best companies will avoid trap of focusing on country as the primary segmentation variable International Marketing- is the performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit. •An entry strategy into international market should reflect on analysis –Market characteristics

•Potential sales
•Strategic importance
•Strengths of local resources
•Cultural differences
•Country restrictions
–Company capabilities and characteristics
•Degree of near-market knowledge
•Marketing involvement
•Management commitment

Exporting
Indirect Exporting-requires no equity investment and thus has a low risk, low rate of return, and little control. Licensing
–A means of establishing a foothold in foreign markets without large capital outlays –A favorite strategy for small and medium-sized companies
–Legitimate means of capitalizing on intellectual property in a foreign market

Joint Venures-When two or more participating companies join forces to create a separate legal entity to facilitate doing business in the international arena

Direct Investment
•Factors that influence the structure and performance of direct investments –Timing
–The growing complexity and contingencies of contracts
–Transaction cost structures
–Technology transfer
–Degree of product differentiation
–The previous experiences and cultural diversity of acquired firms –Advertising and reputation barriers
Example:When a company sells to a customer in another country, the company is into Direct exporting. Strategic International Allicance
Consortia
–Similar to joint ventures and could be classified as such except for two unique characteristics •Typically involve a large number of participants
•Frequently operate in a country or market in which none of the participants is currently active –Consortia are developed to pool financial and managerial resources and to lessen risks Joint Ventures

–JVs are established, separate, legal entities
–The acknowledged intent by the partners to share in the management of the JV
–There are partnerships between legally incorporated entities such as companies, chartered organizations, or governments, and not between individuals –Equity positions are held by each of the partners

Franchise
–Franchiser provides a standard package of products, systems, and management services –Franchise provides market knowledge, capital, and personal involvement in management –Expected to be the fastest-growing market-entry strategy

•Two types of franchise agreements
–Master franchise
•Gives the franchisee the rights to a specific area with the authority to sell or establish subfranchises –Licensing

Contract Manufacturing-is a manufacturer that contracts with a firm for components or products. It is a form of outsourcing. Contracting Management- is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution.

CH:8 Developing a global vision though marketing research
Challeneges and problems
•The major difficulty is converting a series of often ambiguous business problems into tightly drawn and achievable research objectives •The first, most crucial step in research is more critical in foreign markets because an unfamiliar environment...
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