Aesthetics What is meant by good taste in art, music, folklore and drama may vary a lot from culture to culture.
Agent Independent company, who sells on to customers on behalf of the manufacturer (exporter). Usually he will not see or stock the product. He is living from a commission (typically 5-10%) paid by the manufacturer on a pre-agreed basis.
Bandwidth Indicates the speed at which data are transferred using a particular network medium. It is measured in bits per second (bps).
BATNA The abbreviation of Best Alternative To a Negotiated Agreement. The negotiator cannot make a wise decision about whether to accept a negotiated agreement unless he knows what his alternatives are. If the proposed agreement is better than the negotiator's BATNA, then he should accept it. Having a good BATNA increases negotiation power.
Behavioural control Regular monitoring of behaviour, like sales people's ability to interact with customers (typically based on non-financial measures).
BERI The abbreviation of Business Environment Risk Index. A useful tool in the coarse-grained, macro-oriented screening of international markets.
Blue oceans The unserved market, where competitors are not yet structured and the market is relatively unknown. Here it is about avoiding the head-to-head competition.
Born global A firm that from its 'birth' globalize rapidly without any preceding long term internationalization period.
Brand equity A set of brand assets and liabilities, which can be clustered into five categories: Brand loyalty, Brand awareness, Perceived quality, Brand associations and other proprietary brand assets. Brand equity is the premium a customer / consumer would pay for the branded product or service compared to an identical unbranded version of the same product/service.
Bribery Involving a company from an industrialized country offering an illicit payment to a developing country's public official with perceived or real influence over contract awards. Bribery may range from gifts to large amounts of money.
Bricks-and-mortar Physical retail stores.
Bundle pricing Bundling product and services together in a system solution product. If the customer thinks that entry price is a key barrier, service contracts can be priced higher, which allows for lower entry product pricing; the practice in many software businesses.
Business network Actors are autonomous and linked to each other through relationships, which are flexible and may change accordingly to rapid changes in the environment. The 'glue' that keeps the relationships together are based on technical, economic, legal and especially personal ties.
Celebrity branding Type of advertising in which a celebrity uses his/her status in the society to promote a product, service or charity.
Channel length Number of levels (middlemen) in the distribution channel.
Channel power Ability of a channel member to control marketing variables of any other member in a channel at a different level of distribution.
Co-branding Form of cooperation between two or more brands, which can create synergies that create value for both participants, above the value they would expect to generate on their own.
Competences Combination of different resources into capabilities and later competences; being something that the firm is really good at.
Competitive benchmarking A technique for assessing relative marketplace performance, compared with main competitors.
Competitive parity approach Duplicating the amounts spent on advertising by major rivals.
Competitive triangle Consists of a customer, the firm and a competitor (the 'triangle'). If the firm or the competitor will 'win' the customers favour depends on perceived value offered to the customer (compared to the price) compared to the relative costs between the firm and the customer.
Contract manufacturing Manufacturing is out-sourced to an external partner, specialized in production and production technology.
Convergence Getting closer to each other.
Core competences Value chain activities in which the firm is regarded as better than its competitors.
Deglobalization Moving away from the globalization trends and regard each market as special, with its own economy, culture and religion.
Direct export modes Manufacturer sells directly to an importer, agent or distributor located in the foreign target market.
Disintermediation The removal of intermediaries such as distributors or brokers that formerly linked a company to its customer. In particular, disintermediation enables a company to sell direct to the customer by cutting out the middle man.
Dissolution phase 'Divorce': Termination of the relationship. It can make the assets dedicated to the relationship obsolete.
Distributor (importer) Independent company, who stock the manufacturer's product. He will have substantial freedom to choose own customers and price. He is living from the difference between his selling price and his buying price from the manufacturer.
Divergence Moving apart from each other.
Domestic-based sales representatives The sales representative resides in the home country of the manufacturer and travels abroad to perform the sales function.
Economies of scale Accumulated volume in production, resulting in lower cost price per unit.
Economies of scope Reusing a resource from one business / country in additional business / countries.
Electronic data interchange (EDI) The exchange, using digital media, of standardized business documents such as purchase orders and invoices between buyers and sellers.
Entry mode An institutional arrangement necessary for the entry of a company's products and services into a new foreign market. The main types are: Export, Intermediate and Hierarchical modes.
Equity Some investment of a defined financial value.
Estimation by analogy A correlation value (between a factor and the demand for the product) for one market is used in another international market.
Expatriates Employees sent out from the HQ to work for the company in the foreign markets, often in its subsidiaries.
Experience curve pricing Combination of the experience curve (lowering costs per unit with accumulated production of the product) with typical market price development within an industry.
Externalization Doing business through an external partner (importer, agent, distributor).
Feedforward control Monitors variables other than performance; variables that may change before performance itself. In this way deviations can be controlled proactively before their full impact has been felt.
Five sources model Corresponding to Porter's five competitive forces there are also five potential sources for building collaborative advantages together with the firm's surrounding actors.
Foreign branch An extension of and a legal part of the manufacturer (often called a sales office). Taxation of profits is taking place in the manufacturer country.
Franchising The franchisor gives a right to the franchisee against payment, e.g. a right to use a total business concept/system, including use of trade marks (brands), against some agreed royalty.
Frequency Average number of times within a given time that each potential customer is exposed to the same ad.
Functional structure Here the next level after the top-management is divided into functional departments, e.g. R&D, sales & marketing, production and finance.
Geographical structure The next level after the top-management is divided into international divisions, e.g. Europe, North America, Latin America, Asia/Pacific and Africa / Middle East.
Global Account Management A relationship-oriented marketing management approach focusing on dealing with the needs of an important global customer (= account) with a global organization (foreign subsidiaries all over the world).
Global integration Recognize the similarities between international markets and integrate them into the overall global strategy.
Global Pricing Contracts A customer requiring one global price (per product) from the supplier for all its foreign SBUs and subsidiaries.
Globalization Reflects the trend of firms buying, selling and distributing products and services in most countries and regions of the world.
Glocalization Think globally, act locally.
GNP per capita Total GNP divided by its population.
Green marketing Integrating business practices and products that are friendly to the environment while also meeting the needs of the consumers.
Grey marketing (parallel importing) Importing and selling of products through market distribution channels that are not authorized by the manufacturer. It occurs when the manufacturer use significantly different market prices for the same product in different countries. It mainly exits for high-priced, high-end products, like fashion- and luxury apparel, watches, perfume etc.
Gross National Product (GNP) The value of all goods and services produced by the domestic economy over a one-year period, including income generated by the country's international activities.
GRPs The abbreviation of Gross Rating Points. Reach multiplied with frequency. GRPs may be estimated for individual media vehicles. Media planning is often based on 'Cost per 1000 GRPs'.
Hierarchical modes The firm owns and controls the foreign entry mode/organization.
High context cultures Use more elements surrounding the message. The cultural context in where the message is communicated has a lot to say. High degree of complexity in communication.
Horizontal integration Seeking control of channel members at the same level of the channel, e.g. the manufacturer's acquisition of the competitor.
Impact Depends on the compatibility between the medium used and the message (the 'impact' on the consumer's brain).
Indirect export modes Manufacturer uses independent export organizations located in his own country (or third country).
Ingredient branding The supplier deliver an important key component to the final OEM-product, e.g. Intel delivers its processor to the major PC-manufacturers.
Intermediate modes Somewhat between using export modes (external partners) and hierarchical modes (internal modes).
Internalization Doing business through own internal system (own subsidiaries).
International divisional structure As international sales grow, at some point the international division may emerge at the same level as the functional departments.
International Marketing Information System An interacting organization of people, systems, and processes devised to create a regular, continuous flow in information essential to the international marketer's problem-solving and decision-making activities around the world.
International retailing Worldwide tendency towards concentration in retailing, create huge buying power in the big international retail chains.
Internationalization Doing business in many countries of the world, but often limited to a certain region, e.g. Europe.
Internationalization motives Fundamental reasons; proactive and reactive; for internationalization.
Internationalization triggers Internal or external events taking place to initiate internationalization.
Inward/outward internationalization Imports as preceding activity for the later market entries in foreign markets.
Joint Venture (JV) An equity partnership typically between two partners. It involves two 'parents' creating the 'child' (the 'joint venture' acting in the market).
Lead-lag analysis Determinants of demand and the rate of diffusion are the same in two countries, but time separates the two countries.
Licensing The licensor gives a right to the licensee against payment, e.g. a right to manufacture a certain product based on a patent against some agreed royalty.
Logistics A term used to describe the movement of goods and services between suppliers and end users.
Low context cultures Rely only on spoken and written language ('get everything down in the written contract'). Low degree of complexity in communication.
LSEs The abbreviation of Large Scale Enterprises.
Managerial urge Managers' motivation that reflect the desire and enthusiasm to drive internationalization forward.
Market coverage Coverage can relate to geographical areas or number of retail outlets. Three approaches are available: Intensive, Selective or Exclusive coverage.
Market responsiveness Respond to each market's need and wants.
Market space A virtual marketplace such as the Internet in which no direct contract occurs between buyers and sellers.
Matrix structure The next level after the top-management consists of two organizational structures (product and geographical areas) intersecting with each other. Results in dual reporting relationships.
M-marketing Mobile marketing represents 'mobile' business and refers to the new communications and information delivery model created when telecommunications and the Internet converge. M-marketing combines the power and speed of the Internet with the geographic freedom of mobile telephony in terms of receiving and transmitting data and, importantly, the ability to conduct transactions.
Nationalization Take-over of foreign companies by the host government.
Negotiation process A process in which two or more entities come together to discuss common and conflicting interests in order to reach an agreement of mutual benefit.
Network model The relationships of a firm in a domestic network can be used as bridges to other networks in other countries.
Non-verbal language More important in high-context cultures: Time, space (conversational distance between people), material possessions, friendship patterns and business agreements.
Objective and task approach Determining the advertising objectives and then ascertaining the tasks needed to attain these objectives.
OEM The abbreviation of Original Equipment Manufacturer; the customer of a subsupplier, e.g. Autoliv (case III.3) is a subsupplier of air-bags for their OEMs; the auto manufacturers like VW or BMW.
Opportunistic behaviour Self-interest with guile; misleading, distortion, disguise, and confusion.
OTS The abbreviation of Opportunity To See. Total number of people in the target market exposed to at least one ad in a given time period ('reach').
Output control Regular monitoring of output, like profits, sales figures and expenditures (typically based on financial measures).
Partner mindshare The level of mindshare that the manufacturer's product occupies in the mind of the export-partner (e.g. agent or distributor).
Perceived value The customer's overall evaluation of the product/service offered by a firm.
Percentage of sales method The firm will automatically allocate a fixed percentage of sales to the advertising budget.
PLC The abbreviation of Product Life Cycle.
Portal A website that acts as a gateway to the information on the Internet by providing search engines, directories and other services such as personalized news or free e-mail.
Porter Diamond The characteristics of the 'home base' play a central role in explaining the international competitiveness of the firm; the explaining elements consist of factor conditions, demand conditions, related and supporting industries, firm strategy; structure and rivalry, chance and government.
Price escalation All cost factors (e.g. firms net ex works price, shipping costs, tariffs, distributor mark-up) in the distribution channel add up and lead to price escalation. The longer the distribution channel, the higher the final price in the foreign market.
Primary data Information that is collected first-hand, generated by original research tailor-made to answer specific research questions.
Private label Retailers own brand, e.g. Marks & Spencer's St Michael.
Product structure The next level after the top-management is divided into product division, e.g. Product A, B, C and D.
Project export Combination of hardware (e.g. buildings and infrastructure) and software (technology and project know-how), e.g. if form of a factory for ice cream production.
Psychic distance Differences in language, culture and political system, which disturb the flow between the firm and the market.
Qualitative research Provides a holistic view of a research problem by integrating a larger number of variables, but asking only a few respondents.
Quantitative research Data analysis based on questionnaires from a large group of respondents.
Red oceans Tough head-to-head competition in mature industries often results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool.
Regions centres The regional HQ ('lead country') will usually play the role of coordinating and stimulating sales in the whole region.
Relative cost advantage A firm's cost position depends on the configuration of the activities in its value chain versus that of the competitors.
Reliability If the same phenomenon is measured repeatedly with the same measurement device and the results are similar then the method is reliable (the 'how' dimension).
Resources Basic units of analysis; financial, technological, human and organizational resources; found in the firm's different departments.
Reverse auction (C-t-B) A type of auction in which sellers bid prices for which they are willing to sell items or services.
Reverse marketing The buyer (and not the seller like in traditional marketing) takes the initiatives for searching a supplier that is able to fulfil its needs .
Scenarios Stories about plausible alternative futures.
Secondary data Information that has already been collected for other purposes and thus readily available.
Sensory branding Normally brand communication involves just two senses; sight and hearing. Sensory branding involves all five senses: Sight, hearing (sound), smell, touch and taste.
SMEs The abbreviation of Small and Medium-sized Enterprises.
Social Marketing Planning, execution, and evaluation of programs to influence the voluntary behaviour of target audiences in order to improve their personal welfare, e.g. encouraging people to give up smoke.
Subsidiary A local company owned and operated by a foreign company under the laws and taxation of the host country.
Tacit Difficult to articulate and express in words. Tacit knowledge has often to do with complex products and services, where functionality is very hard to express .
Tariffs A tool that is used by governments to protect local companies from outside competition. The most common forms are: Quotas, ad valorem and discriminatory.
The 'Marriage metaphor' The process of reducing the psychic distance + increasing dependence between buyer and seller = Shared values and joint investments in the relation.
Trade barriers Trade laws (often tariffs) that is favouring local firms and discriminating against foreign ones.
Transaction Cost Analysis (TCA) TCA concludes that if the 'friction' between buyer and seller is higher than through an internal hierarchical system, then the firm should rather internalize.
Transaction costs The 'friction' between buyer and seller, which is explained by opportunistic behaviour.
Transfer Pricing Prices charged for intra-company movement of goods and services. While transfer prices are internal to the company, they are important externally for cross-border taxations purposes.
Transnational organization Integration and coordination of operations (R&D, production, marketing and sales & services) across national boundaries in order to achieve synergies on a global scale.
Uppsala School model Additional market commitments should be made in small incremental steps: Choosing additional geographic markets with small psychic distances, combined with choosing entry modes with few additional risks.
USP The abbreviation of Unique Selling Proposition. The USP is the decisive sales argument for customers to buy the product.
Validity If the measurement method measures what it is supposed to measure, then it has high validity (the 'what' dimension). There are three types of validity: Construct, internal and external.
Value chain A categorization of the firm's activities providing value for the customers and profit for the company.
Value network The formation of several firms' value chains into a network, where each company contributes with a small part to the total value chain.
Value shops (service value chain) A model for solving problems in a service environment. Similar to workshops. Value is created by mobilizing resources and deploying them for to solve a specific problem.
Vertical integration Seeking control of channel members at different levels of the channel, e.g. the manufacturer's acquisition of the distributor.
Viral marketing Online word-of-mouth. It is a marketing technique that seeks to exploits existing social networks to produce exponential increases in brand awareness.
Virtual value chain An extension of the conventional value chain, where the information-processing itself can create value for customers.
X-coalitions The partners in the value chain divide the value chain activities between them, e.g. the manufacturer (exporter) specializes in up-stream activities, whereas the local partner takes care of the down-stream activities.
Y-coalitions Each partner in the alliance/JV contributes with complementary product lines or services. Each partner takes care of all value chain activities within their product line.
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