International Marketing Exam
3 Review: Questions and
Answers
Strategies for Global Market Entry - ANSWER- Licensing
- Franchising
- Contract Manufacturing (Outsourcing)
Licencing - ANSWEROne 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) - ANSWERCompany provides technical
specifications to a subcontractor of local manufacturer
- Allows company to specialize in product design while contractors accept
responsibility for manufacturing facilities
Franchising - ANSWERContract 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 - ANSWERPartial or full ownership of operations
outside of home country
, Forms of Foreign Direct Investment - ANSWER- Joint Ventures
- Consortia
Joint Ventures - ANSWEREntry 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 - ANSWERConsortia 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 - ANSWERImportant for reaching mass markets in less
industrialized nations and certain segments of industrialized countries
Diffusion of Innovation (5 Characteristics) - ANSWER1.) 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?
3 Review: Questions and
Answers
Strategies for Global Market Entry - ANSWER- Licensing
- Franchising
- Contract Manufacturing (Outsourcing)
Licencing - ANSWEROne 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) - ANSWERCompany provides technical
specifications to a subcontractor of local manufacturer
- Allows company to specialize in product design while contractors accept
responsibility for manufacturing facilities
Franchising - ANSWERContract 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 - ANSWERPartial or full ownership of operations
outside of home country
, Forms of Foreign Direct Investment - ANSWER- Joint Ventures
- Consortia
Joint Ventures - ANSWEREntry 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 - ANSWERConsortia 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 - ANSWERImportant for reaching mass markets in less
industrialized nations and certain segments of industrialized countries
Diffusion of Innovation (5 Characteristics) - ANSWER1.) 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?
