W2: Short & Toffel (2021). Manage the Suppliers That Could Harm Your Brand

Question 1

Pandemic

Answer 1

Has placed a new spotlight on working conditions in factories that supply global companies

Question 2

Locational differences

Answer 2

Countries and cities vary in terms of production costs, labour availability, general working conditions, and propensity for strikes and other disruptions

Question 3

Certified compliance with management system standards

Answer 3

E.g. ISO 9001. Third parties are hired to test compliance. This system drives improvement in quality and environmental protections, as well as working conditions

Question 4

Lean management

Answer 4

Standardising procedures, team-based problem-solving and quality control, continuous improvement to eliminate waste, and production planning to minimise peaks and troughs in the use of labour and equipment. It requires training workers to identify quality problems and managers to schedule workloads more efficiently to avoid excessive overtime

Question 5

Unions

Answer 5

Unionised suppliers improved working conditions more than nonunionised suppliers did. Although unions in developing countries cannot always increase workers’ political power, they promote dialogue between managers and workers in ways that can be helpful

Question 6

Avoidance of piece-rate compensation

Answer 6

Factories that pay workers by the units they produce tend to exhibit less improvement in working conditions than factories with other compensation systems. It incentivises workers to focus on short-term production goals

Question 7

Serving once-tarnished buyers

Answer 7

One study found greater improvements in working conditions among suppliers serving brands that had experienced negative publicity related to other suppliers’ labour practices

Question 8

Announcing audits in advance

Answer 8

Can foster teamwork and trust between the auditor and the supplier, which promotes learning. It can speed up improvement

Question 9

Marketing mix

Answer 9

A set of choices the firm offers to its targeted markets. Many firms differ in their marketing mix from country to country, depending on differences in national culture, economic development, product standards, etc

Question 10

Technology (Theodore Levitt)

Answer 10

A powerful force drives the world toward a converging commonality. It has proletarianised communication, transport, and travel. The result is a new commercial reality

Question 11

New commercial reality (Theodore Levitt)

Answer 11

The emergence of global markets for standardised consumer products on a previously unimagined scale of magnitude. National/regional differences are disappearing

Question 12

Multinational commercial world (Theodore Levitt)

Answer 12

Nearing its end with the new commercial reality

Question 13

Multinational corporation (Theodore Levitt)

Answer 13

Also is nearing its end. It operates in a number of countries and adjusts its products and practices to each at high relative costs

Question 14

Global corporation (Theodore Levitt)

Answer 14

Operates with resolute consistency at low relative cost as if the entire world were a single entity; it sells the same thing in the same way everywhere. This is confirmed by e.g. McDonald’s

Question 15

Commonality of preference (Theodore Levitt)

Answer 15

Leads inescapably to the standardisation of products, manufacturing, and the institutions of trade and commerce

Question 16

Market segmentation

Answer 16

Refers to identifying distinct groups of consumers whose needs, wants, and purchasing behaviour differ from others in important ways. Markets can be segmented based on geography, demography, sociocultural factors, and psychological factors. The goal is to optimise sales. When managers in an international business consider it in foreign countries, they need to be cognisant of two main issues; the differences between countries in the structure of market segements and the existence of segments that transcend borders

Question 17

Intermarket segment

Answer 17

A segment that spans multiple countries transcending national borders. Historically rare in consumer markets. Targeting one country and its potential market segments allows a company to focus on the cultural characteristics of one country. Targeting many countries and the intermarket segment allows a company to focus on the cultural characteristics that are universal for certain customers across countries

Question 18

Business analytics

Answer 18

Can be defined as the knowledge, skills, and technology that allow for the exploration as well as deeper investigation of a company’s international business strategies and activities to gain insight and drive future strategy development and implementation

Question 19

Big data

Answer 19

Larger data that includes a massive volume of both structured and unstructured data and is most often stored on large-scale servers, e.g. computer clouds, data warehousing. It can be divided into three core applications; descriptive, predictive, and prescriptive analytics

Question 20

Descriptive analytics

Answer 20

Refers to the use of relatively simple statistical techniques to describe what is contained in a dataset. Its purpose is to get a rough picture of what the data look like in the most general sense

Question 21

Predictive analytics

Answer 21

Can be defined as the use of advanced statistical techniques (and software) to identify and build predictive models that can help to identify trends and relationships not readily observed in descriptive analyses

Question 22

Prescriptive analyses

Answer 22

Can be defined as the use of management science methodologies (i.e. applied mathematical techniques) to guide a company in its endeavors to best use allocable resources

Question 23

International market research

Answer 23

Defined as the systematic collection, recording, analysis, and interpretation of data to provide knowledge that is useful for decision-making in a global company. It differs from domestic market research because it involves issues such as the translation of questionnaires and reports and accounts for cultural and environmental differences in data collection. It is one of the most critical aspects of understanding the global marketplace

Question 24

Defining the research objectives (1)

Answer 24

Includes both defining the research problem and setting objectives for the international market research

Question 25

Determining the data sources (2)

Answer 25

They will address specific research problems and ultimately achieve the objectives. In market research, there are two forms of data that can be used; primary and secondary data. Overall, the data should be evaluated based on (a) availability, (b) comparability across countries and potential market segments, (c) reliability, and (d) validity

Question 26

Primary data

Answer 26

Refers to data collected by the global company and/or its recruited international market research agency for the purpose of addressing the research problem and its objectives defined by the company

Question 27

Secondary data

Answer 27

Refers to data that have been collected previously by organisations, people, or agencies for purposes other than specifically addressing the research problem and objectives at hand

Question 28

Assessing the costs and benefits of research (3)

Answer 28

Often relates to the cost of collecting primary data that can address the research problem and objectives directly versus using available secondary data. The costs that drive up the spending in primary data collections broadly include survey development and sampling frame issues

Question 29

Collecting the data (4)

Answer 29

Refers to gathering data via primary or secondary methods that address the research problem and objectives. The two mechanisms to collect data are quantitative and qualitative data collection

Question 30

Quantitative methods

Answer 30

The goal is to systematically gain an understanding of consumers' needs, wants, and purchase behaviour via numerical data and computational techniques

Question 31

Qualitative methods

Answer 31

Focused on broad-based questions aimed at gaining an in-depth understanding of customers' needs, wants, and purchase behaviours

Question 32

Analysing and interpreting the research (5)

Answer 32

Begins when the data have been collected

Question 33

Reporting the research findings (6)

Answer 33

A way to communicate the overall results of the international market research project. Such reports often include information about customers, competitors, countries, the industry, and the environment that affect how the global company develops an appropriate marketing mix for the targeted international market segment. Ultimately, the focus will be on how best to reach customers by addressing their needs, wants, and purchasing behaviours

Question 34

Product

Answer 34

Can be viewed as a bundle of attributes. They vary among aspects; cultural differences, economic development, and product and technical standards

Question 35

Cultural differences

Answer 35

Countries differ in dimensions like social structure, language, religion, and education. The most important aspect is probably the impact of tradition. Even scent preferences can be different. Some of Levitt's evidence of tastes and preferences converging is found here; however, still on a very small scale

Question 36

Economic development

Answer 36

Consumer behaviour is influenced by the level of economic development of a country. Developed countries tend to demand extra performance attributes. Contrary to Levitt's suggestions, consumers in the most developed countries are often not willing to sacrifice their preferred attributes for lower prices

Question 37

Product and technical standards

Answer 37

Even with the forces that are creating some convergence of tastes and preferences among advanced, industrialised nations, Levitt's vision may still be a long way off due to national differences in product and technological standards. However, as he suggested, the increased development and implementation of regional trade agreements may influence certain regional markets to become more globalised

Question 38

Distribution strategy

Answer 38

A critical element of a firm's marketing mix. The four main differences between distribution systems worldwide; retail concentration, channel length, channel exclusivity, and channel quality

Question 39

Retail concentration

Answer 39

Concentrated or fragmented retail system. Many of the differences are rooted in history and tradition. There is a tendency for greater retail concentration in developed countries. Three factors contribute to this; (a) Increases in car ownership, (b) Number of households with refridgerators and freezers, and (c) Number of two-income households

Question 40

Concentrated retail system

Answer 40

A few retailers supply most of the market

Question 41

Fragmented retail system

Answer 41

There are many retailers; none have a major market share

Question 42

Channel length

Answer 42

Refers to the number of intermediaries between the producer and the consumer. Selling directly to the customer means a very short channel. The degree to which the retail system is fragmented determines the channel length. The more fragmented, the more expensive it is for a firm to contact each individual retailer, and the longer the channel length. When fragmented, it makes more sense to sell directly with retailers, cutting out wholesalers. A small sales force is needed, and transactions are bigger. Another factor that is shortening length is the entry of large discount superstores

Question 43

Channel exclusivity

Answer 43

An exclusive distribution channel is one that is difficult for outsiders to access. In Japan, e.g., relationships among manufacturers, wholesalers, and retailers go back decades. However, modern Japan is more willing to violate old norms of exclusivity

Question 44

Channel quality

Answer 44

Refers to the expertise, competencies, and skills of established retailers in a nation and their ability to sell and support the products of international businesses. The lack of a high-quality channel may impede market entry. An international business may have to devote considerable attention to upgrading the channel

Question 45

Market access

Answer 45

The ability to enter an exclusive channel

Question 46

Communication channels

Answer 46

Include direct selling, sales promotion, direct marketing, and advertising. It is partly defined by the choice of channel

Question 47

Cultural barriers

Answer 47

A message in one country can mean something totally different in another. Developing cross-cultural literacy is the best way to overcome those barriers. In addition, a company should use local input, such as local advertising agency, in developing its marketing message

Question 48

Source effects

Answer 48

Occur when the receiver of the message evaluates the message on the basis of the status or image of the sender. These can be damaging for an international business when potential customers have a bias against foreign firms. Countering these negative effects can be done by deemphasising their foreign origins

Question 49

Country of origin effects

Answer 49

The extent to which the place of manufacturing influences product evaluations. Japanese consumers tend to evaluate Japanese products more favourably, even if they are inferior

Question 50

Noise

Answer 50

Refers to the number of other messages competing for a potential customer's attention. It can reduce the profitability of effective communication, mostly seen in highly developed countries

Question 51

Push strategy

Answer 51

Emphasises personal selling rather than mass media advertising. Tend to be emphasised; (a) For industrial products or complex new products, (b) When distribution channels are short, and (c) When few print or electronic media are available

Question 52

Pull strategy

Answer 52

Depends on mass media advertising. Tend to be emphasised; (a) For consumer goods, (b) When distribution channels are long, and (c) When sufficient print and electronic media are available to carry the marketing message

Question 53

Media availability

Answer 53

Is limited by law in some cases, e.g. tobacco advertisements

Question 54

Standardised advertising

Answer 54

Lowers the costs of value creation