International Marketing - Exam 3-
Questions Well Answered.
Strategies for Global Market Entry - Answer - Licensing
- Franchising
- Contract Manufacturing (Outsourcing)
Licencing - Answer One company (the licensor) makes an asset (brand) available to another
company (the licensee) in exchange for royalties, license fees, or some other form of
compensation
Contract Manufacturing (Outsourcing) - Answer Company provides technical specifications to
a subcontractor of local manufacturer
- Allows company to specialize in product design while contractors accept responsibility for
manufacturing facilities
Franchising - Answer Contract between a parent company - franchisor and a franchisee that
allows the franchisee to operate a business
- Developed by the franchisor in return for a fee and adherence to franchise-wide policies
Foreign Direct Investment - Answer Partial or full ownership of operations outside of home
country
Forms of Foreign Direct Investment - Answer - Joint Ventures
- Consortia
Joint Ventures - Answer Entry strategy for a single target country in which the partners share
ownership of a newly created business entity
e.g. Caterpillar taking control of Japanese joint venture
Consortia - Answer Consortia are developed to pool financial managerial resources and to
lessen risks
Like JV; two unique characteristics
1. ) Involve large number of participants
2.) Frequently operate in a country or market in which none of the participants is currently
active
, Product Invention - Answer Important for reaching mass markets in less industrialized nations
and certain segments of industrialized countries
Diffusion of Innovation (5 Characteristics) - Answer 1.) Relative Advantage - How valuable is it
compared to what is used now?
2.) Compatibility - How well does it fit in with existing culture, values, norms, believes, etc.?
3.) Complexity - How hard is it to understand and use?
Trialability - How much does it cost or what social risk does it involve?
4.) Observability - How easy is it to understand how it works through the communication
channels available?
Continous Innovation - Answer -No new learning
-Improved existing product
-Gain awareness & wide distribution
Dynamically continuous innovation - Answer -Disrupts routine, not totally new learning
-Improved product with a new twist
-Promote difference & benefits
Discontinuous Innovation - Answer -Requires new learning consumption pattern
-Totally new product space
-Educate through product trial & experience
Three Product Levels - Answer All products have many dimensions
They are the sum of all 3 areas:
1. Core platform
2. Packaging
3. Support
*Every aspect must be considered from a cultural perspective BEFORE marketing and ask if
there are any adaptations needed.
Core - Answer Physical product
- Design
- Functional Features
Questions Well Answered.
Strategies for Global Market Entry - Answer - Licensing
- Franchising
- Contract Manufacturing (Outsourcing)
Licencing - Answer One company (the licensor) makes an asset (brand) available to another
company (the licensee) in exchange for royalties, license fees, or some other form of
compensation
Contract Manufacturing (Outsourcing) - Answer Company provides technical specifications to
a subcontractor of local manufacturer
- Allows company to specialize in product design while contractors accept responsibility for
manufacturing facilities
Franchising - Answer Contract between a parent company - franchisor and a franchisee that
allows the franchisee to operate a business
- Developed by the franchisor in return for a fee and adherence to franchise-wide policies
Foreign Direct Investment - Answer Partial or full ownership of operations outside of home
country
Forms of Foreign Direct Investment - Answer - Joint Ventures
- Consortia
Joint Ventures - Answer Entry strategy for a single target country in which the partners share
ownership of a newly created business entity
e.g. Caterpillar taking control of Japanese joint venture
Consortia - Answer Consortia are developed to pool financial managerial resources and to
lessen risks
Like JV; two unique characteristics
1. ) Involve large number of participants
2.) Frequently operate in a country or market in which none of the participants is currently
active
, Product Invention - Answer Important for reaching mass markets in less industrialized nations
and certain segments of industrialized countries
Diffusion of Innovation (5 Characteristics) - Answer 1.) Relative Advantage - How valuable is it
compared to what is used now?
2.) Compatibility - How well does it fit in with existing culture, values, norms, believes, etc.?
3.) Complexity - How hard is it to understand and use?
Trialability - How much does it cost or what social risk does it involve?
4.) Observability - How easy is it to understand how it works through the communication
channels available?
Continous Innovation - Answer -No new learning
-Improved existing product
-Gain awareness & wide distribution
Dynamically continuous innovation - Answer -Disrupts routine, not totally new learning
-Improved product with a new twist
-Promote difference & benefits
Discontinuous Innovation - Answer -Requires new learning consumption pattern
-Totally new product space
-Educate through product trial & experience
Three Product Levels - Answer All products have many dimensions
They are the sum of all 3 areas:
1. Core platform
2. Packaging
3. Support
*Every aspect must be considered from a cultural perspective BEFORE marketing and ask if
there are any adaptations needed.
Core - Answer Physical product
- Design
- Functional Features
