Marketing Strategy Final

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Product
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The sum of physical, psychological and sociological satisfactions that the buyer derives from purchase, ownership and consumption.
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Tangible Product
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The physical entity or service offered to the buyer
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Extended Product
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The tangible product along with the whole cluster of services that accompany it
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Generic Product
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The essential benefits the buyer expects to receive from the product. For example, many personal care items bring the user a sense of self-enhancement and security in addition to the tangible benefits they offer.
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Agricultural Products and raw materials
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These goods are grown or extracted from land of sea, such as iron ore, wheat, and sand. In general, these products are generally homogeneous, sold in large volumes, and low value per unit
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Organizational Good
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Such products are purchased by business firms for the purpose of producing other goods or for running the business. This category includes the following: a) raw materials and semi finished goods b) Major and minor equipment, such as basic machinery, tools, and other processing facilities. c) Parts or components, which become an integral element of some other finished goods. d) Supplies or items used to operate the business but that do not become part of the final product.
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Consumer Goods
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Can be divided into three classes a) Convenience Goods, such s fast foods, which are purchased frequently without much effort (impulse goods too) b) Shopping Goods, including appliances, purchased with some time and energy c) Specialty Goods, unique and require a special purchase effort
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Multi-Branding
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A company uses competing brand names to sell products of different uses and benefits. (EX: Proctor & Gamble)
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Family Branding
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Multiple products marketed under the same company name. (EX: Apple)
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Line Extensinon
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Brand name used to facilitate entry into a new market segment (EX: Tide Pods, Diet Dr. Pepper)
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Brand Extension
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current brand is used to enter completely different product class (EX: Special K Cereal Drinks, Coach Perfume)
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CoBranding
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two or more brands are used or integrated into a product (EX: Betty Crocker Hershey Turtle Brownies)
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Brand Equity
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the differential effect that knowing the brand name has on customer response to the product or its marketing
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Process of Developing And nurturing a brand
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1) Product quality when the product does fairly well 2)Consistent advertising and other marketing communications in which the brand tells their story and tells it well 3) Distribution intensity whereby customers see the brand wherever they shop 4) Brand personality whereby the brand stands for somthing
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Elements of Brand Equity
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Brand Loyalty Name Awareness Perceived Loyalty Brand Associations Other Proprietary Brand Assets
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increasing value to customers Provides value to firms by enhancing
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-Efficiency and effectiveness of marketing programs -Brand Loyalty -Prices/margins -Brand Extensions -Trade Leverage -Competitive Advantage
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Product Life Cycle Strategy Dimensions
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Basic Objectives Product Pricing Channels Promotion
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Decision Factors after Product Decline
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New Product Features New Uses New Markets Reaching Status Quo
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Facts about new products
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• New product sales increase faster than current products • How long can an existing product be a competitive advantage? • 3M derives 30% of its revenues from products less than four years old. • 33-90% of new products are failures
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Five Categories of New Products
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-New to the World -New Category Entries -Additions to Product Lines -Product Improvements -Repositioning
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New to the world
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Products that are inventions (EX: Polaroid Camera, First Car, In-Line Skates)
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New Category Enteries
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Products that take a firm into a category new to it, but that are not new to the world. (EX: PG Liquid Shampoo, Hallmark Gift Items)
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Additions to Product Lines
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Products that are line extensions, flankers, and so on, to the firm’s current markets. (EX: Tide Liquid Detergent, Bud Light, Apple’s Power Mac)
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Product Improvements
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Current products made better; virtually every product on the market has been improved, often many times.
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Repositioning
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Products that are re-targeted for a new use or application A classic case is arm and hammer baking soda, which has been re-positioned several times (baking, toothpaste, cat litter, refrigerator freshener)
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Time to Market
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The elapsed time between product definition and product availability
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Importance of Time to Market
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-First product to market = competitive advantage in profits and market share -Successful time based innovations can be attributed to the use of short -Give managers to product class and brand family levels – Favoring national launches over regional tests – Take into consideration the quality level, production features, product design, product features, product design, and product safety levels
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New Product Sales Forcast
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Why do products fail
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Lack of differentiation, poor positioning, poor quality, over promising, lack of support, no value, misread market, misread costs, poor distribution, timing, changes in the market…
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New Product Sales/Development Process
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Idea Generation Idea Screening Project Planning Product Development Test Marketing Commercialization
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New Product Adoption/Sales
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• Market Size • Awareness • Trial • Availability • Repeat purchase
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Strategic Goals of Marketing Communication
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Create Awareness Build Positive Awareness Identify Prospects Build Channel Relationships Retain Customers
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IMC addresses consumer processes of….
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• Awareness of the product • Comprehension of what it can do • Conviction that is has value • Purchasing/Ordering
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Promotion/Communication Mix
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Advertising Sales Promotion PR Personal Selling Direct/Interactive Marketing
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Advertising
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Strength: Awareness & Conviction Weakness: Ordering
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Sales Promotion
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Strength: Comprehension Weakness: Conviction & Ordering
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PR
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Strength: Awareness Weakness: Comprehension, Conviction, ordering
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Personal Selling
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Strength: Ordering Weakness: Awareness
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Factors influencing advertising decisions
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The Expenditure Question The Allocation Question
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The Allocation Question
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Deciding the most effective way of spending advertising dollars
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Message Strategy
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Saying the Right Things in the ads themselves
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Media Mix
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use the appropriate media in the right amounts at the right time to reach the target market
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Expenditure Question
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How much to spend on advertising
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Percent of Sales
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Most Popular* Takes a percentage figure and applies it to past or future sales
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Per-Unit Expenditure
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Fixed monetary amount is spent on advertising for each unit
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All you can afford
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The availability of current revenues sets the upper limit of the ad budget
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Competitive Parity
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Advertising is defensive, the budgets are based on those of competitors or other members of the industry
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Research Approach
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Advertising media are researched in terms of their productivity by the use of media reports and research studies.
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Task Approach
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Formulates tasks and finds what it takes to accomplish Management then determines how much it takes to accomplish the tasks
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Push Marketing
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Aiming promotional efforts at distributors, retailers, sales personnel to gain their cooperation
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Pull Marketing
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Involve aiming promotional efforts to directly at customers to encourage them to ask the retailer for the product.
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What Promotion CAN do
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-Inducing the customer to try the product -Rewarding the consumer loyalty for brand loyalty – Encouraging the consumer to trade up or purchase larger sizes -Stimulating the consumer to make repeat purchases for products -reacting to competitor efforts -reinforcing and serving as a complement to advertising and personal selling efforts
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What Promotion CANT do
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-Generate Long-term buyer commitment to a brand in many cases -to change, except on a temporary basis, declining sales of product -to convince buyers to purchase an otherwise unacceptable prodcut -to make up for lack of advertising or sales support for a product
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Objectives of sales force
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Information provision Persuasion After Sale Service
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Sales Relationship-Building Process
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-Prospecting -Planning the sales call -Presenting -Responding -Obtaining Commitment -Building a long-term relationship
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Ways to Organize Sales force
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-Geographic -Product -Customer
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Geographic Sales force Structure
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provides practical benefits of limiting the distance each salesperson must travel to see customers and prospects (Worldwide)
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Product Sales force Structure
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Useful when sales force must have specific technical knowledge of the product (Worldwide)
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Customer Sales force Structure
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When different sets of buyers have large or significantly different needs (national)
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Types of Sales Force Compensation
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-Salary -Commission
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Why Intermediaries are important in channels
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• Perform functions more cheaply and efficiently • Access to consumers • Economies of scale and scope • Bring supply and demand together
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Major Types of Marketing Intermediaries
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Middleman Merchant Middleman Agent Wholesaler Retailer Broker Manufacturer agent Distributor Jobber Facilitating Agent
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Middleman
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an independent business concern that operates as a link between producers and ultimate consumers or organizational buyers
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Merchant Middleman
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a middleman who buys the goods outright and takes title to them
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Agent
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A business unit that negotiates purchases, sales, or both but does not take title to the goods in which it deals
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Wholesaler
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a merchant establishment operated by a concern that is primarily engaging in buying, taking title to, usually storing and physically handling goods in large quantities
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Retailer
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A merchant middleman who is engaged primarily in selling to ultimate consumers
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Brokers
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Serves as go between, assumes risks, but no physical custody of products, and is not looked upon as a permanent representitive
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Manufacturer’s agent
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Agent that generally operates on an extended contractual basis, handles noncompeting but related goods
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Distributor
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a wholesale middleman, especially in lines where selective or exclusive distribution is common at the wholesaler level
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Jobber
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buys from manufacturers and sells to retailers
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Facilitating agent
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a business firm that assists in the performance of distribution tasks other than buying, selling, or transferring title (transportation company, warehouses)
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Functions of Channel Distribution
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Buying Selling Risk-taking assorting storing sorting transporting financing grading marketing information and research
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Relationship Marketing
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marketing with the conscious aim to develop and manage long-term and/or trusting relationships throughout the channel often lead to higher-quality products with lower costs. These benefits may account for the increased use of vertical marketing systems.
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Pricing Objectives and Related Strategies
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-Penetration Pricing -Price Skimming
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Price Skimming
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– Initial high price indicates a strong pricequality relationship – Used by firms with first-mover advantage with high level of panache and exclusivity • Electronics • Pharmaceuticals – Used effectively in niche markets with few competitors
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Penetration Pricing
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– Used to gain maximum market share – Price sensitive customers – Firm’s internal efficiencies lead to cost advantages which allows lower price – Sometimes used for new product introduction • Be careful with penetration pricing
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Cost Consideration
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• Markup pricing • Cost-plus pricing • Rate-of-return pricing
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offensive Goals for going global
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1) increase long term growth and profit prospects 2) maximize total sales revenue 3) take advantage of economies of scale 4) improve overall market position
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Defensive Goals for Going Global
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1) compete with foreign companies on their own turf 2) gain access to technological improvements made in other countries 3) take advantage of significant operating cost differences 4) preempt competitors global moves 5) avoid being locked out of future markets by arriving to late
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Multi-Domestic Strategy
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Pursues different strategies in each of its foreign markets
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Global Strategy
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sees the world as one market and pits its resources against the competition in an integrated fashion
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Problems with international expansion
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Cultural Misunderstanding Political Uncertainty Import Restrictions Exchange Controls and Ownership Restrictions Economic Conditions
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Global Growth Strategies
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Exporting Licensing Franchising Joint Ventures Strategic Alliance Direct Ownership

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