Key Definitions for International Trade and Global Marketing Strategy

Core Marketing Concepts: The 4 Ps

Product

Design, development, branding, and packaging.

Place

The distribution channels used in moving products from the manufacturer to the consumer.

Price

Determining the monetary value charged for the product or service.

Promotion

Advertising, personal Word of Mouth (WOM) selling, sales promotions, direct marketing, and publicity.

International Marketing Strategies

Globalize/Localize

Differentiating your campaign based on the specific local context.

Standardize

Keeping the same core message and approach regardless of the market.

Product Standardization

Selling the exact same product abroad as sold at home. This strategy depends heavily on the product category. Note: Nondurable goods (consumed quickly) usually require greater customization.

Product Adaptation

Mandatory when local infrastructure is different or when government policies mandate specific changes.

Reverse Engineering

Developing a new product when an existing idea or product does not successfully transfer to the target market, requiring a fresh approach.

Market Entry and Trade Mechanisms

Export

The function of international trade whereby goods produced in one country are shipped to another country for future sale or trade.

Export Methods

• Indirect Export: Firms lacking the capital to build or acquire factories in foreign countries often use this method. They work with middlemen, such as Export Management Companies (EMCs), who are responsible for distribution.
• Direct Export: Identifying the market yourself, contacting customers, hiring your own translators, setting prices, and handling all logistics (shipping costs, insurance costs, and labor costs) without middlemen.
• Manufacture Abroad: Entry methods including licensing and franchising.

Franchise

When an owner (franchisor) grants the trademark and licensing rights to a franchisee, who in turn operates a unit of the business.

Licensing

Another method of entry, where a company offers someone the chance to sell its trademarked brand in exchange for a licensing fee.

Branding and Intellectual Property

Trademark

Any name, term, sign, symbol, or design adopted and used by a manufacturer or merchant intended to differentiate their goods and services from those of competitors.

Brand Building

Enhancing brand equity using targeted advertising campaigns and promotional strategies.

COO Effect (Country of Origin Effect)

The respect or perception associated with where a product originates.

Preemption

When the law permits the wholesale registration of brand names, often before market entry.

Imitation

Producing a virtually identical copy of an existing product.