International Marketing Strategies and Brand Equity

World Trade Organization Functions

The WTO is an organization for trade opening which works as a forum for governments to negotiate trade agreements, settle trade disputes, and more. It acts as a system of trade rules. Its primary functions include:

• Manages trade agreements
• Acts as a forum for trade negotiations
• Settles trade disputes
• Reviews national trade policies

Communication Barriers in Global Trade

Effective communication is hindered by several barriers: physical, language, cross-cultural, socio-psychological, and organizational.

International Market Entry Strategies

• Exporting: Usually involves low investment and low risk, but often results in poor control of foreign operations and poor customization to the foreign market.
• Licensing: The home country leases the right of intellectual properties. This offers low investment for the licensor and low investment in R&D by the licensee, but carries risks of misunderstanding, poor alignment, and trade secret leakage.
• Franchising: Low investment and risk for the franchiser, allowing for mutual learning from foreign market operations, while maintaining quality, brand, and governance.
• Turnkey Project: The originating firm is in charge of designing, creating, and equipping the foreign production facility. It shifts the project over to the purchaser for operation once it is functional, allowing for good control over certain variables depending on contracting conditions.
• Mergers & Acquisitions: The originating firm could either merge with or buy a foreign company, providing immediate ownership and operation, along with good local knowledge, though it carries risks during the integration process.
• Joint Venture: Shared ownership among two or more firms, providing funding capacity but carrying risks regarding governance and competitor reactions.

Reference: 20 International Marketing - 1st Midterm - Ignacio Pascale - April 2019

• Foreign Direct Investment (FDI): An owned subsidiary representing a strong international commitment, potential tax advantages, and strong localization.

Market Segmentation, Targeting, and Positioning

Segmentation must be: measurable, substantial, accessible, differentiable, and actionable.

Targeting and Positioning are also critical components of the marketing strategy.

Brand Definition and Characteristics

A Brand is a name, term, sign, symbol, design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Effective brands are important, distinctive, superior, preemptive, affordable, and profitable.

Components of Brand Equity

• Brand Loyalty: Encourages customers to buy a particular brand time after time and remain insensitive to competitors’ offerings.
• Brand Awareness: Brand names attract attention and convey images of familiarity. This may be translated into the percentage of customers who know the brand name.
• Perceived Quality: “Perceived” means that the customers decide upon the level of quality, not the company.
• Brand Associations: The values and the personality linked to the brand.
• Other Proprietary Brand Assets: Include trademarks, patents, and marketing channel relationships.