Revision sheet: Global Market Strategies and Analysis

📋 Course Outline

1. PESTEL macro-environment analysis
2. STP segmentation targeting positioning
3. Ansoff matrix growth strategies
4. International market entry modes
5. Trade barriers and dumping
6. Purchasing power parity and living standards
7. Brand equity and marketing communications
8. Standardization vs adaptation and pattern advertising
9. Incoterms and international trade responsibilities

📖 1. PESTEL macro-environment analysis

🔑 Key Concepts & Definitions

• PESTEL analysis : A tool used to assess the macro-environment of a country or market by breaking it into six external categories.
• Political factors : Political factors are government-related influences on business such as policies, stability, and trade rules.
• Economic factors : Economic factors describe a country’s economic conditions that affect demand, costs, and consumer purchasing power.
• Social factors : Social factors cover society and consumer behavior such as demographics, culture, and lifestyle patterns.
• Technological factors : Technological factors reflect innovation and adoption levels such as R&D, digitalization, automation, and internet access.

📝 Essential Points

• PESTEL uses six letters: Political, Economic, Social, Technological, Environmental, Legal.
• Political factors can include taxation, political stability, trade policies, subsidies, and tariffs.
• Economic factors can include inflation, exchange rates, GDP, unemployment, and purchasing power.
• When analyzing a country, link each factor to a business opportunity or threat and its business impact.
• Environmental factors include sustainability, climate change, and pollution-related laws.
• Legal factors include labor law, consumer protection, and intellectual property rules.

💡 Memory Hook

PESTEL = Politics, Economy, Society, Tech, Environment, Law (scan external forces).

📖 2. STP segmentation targeting positioning

🔑 Key Concepts & Definitions

• STP process : A framework for building a marketing strategy by moving from market segmentation to targeting and then positioning.
• Segmentation : Segmentation is the process of dividing a market into groups with similar characteristics.
• Targeting : Targeting is the selection of the most attractive segment(s) for the firm to pursue.
• Positioning : Positioning is the creation of a distinct image of the brand in consumers’ minds.
• Benefit segmentation : Benefit segmentation groups consumers by the benefits they want from a product.

📝 Essential Points

• STP stands for Segmentation, Targeting, Positioning.
• Segmentation types include demographic, psychographic, behavioral, and benefit segmentation.
• Demographic segmentation uses variables such as age, gender, income, and education.
• Behavioral segmentation uses loyalty, usage rate, and buying habits.
• Targeting evaluation considers market size, profitability, competition, and growth potential.
• Positioning should explain who the target is, why it was chosen, and how the brand wants to be perceived.

💡 Memory Hook

STP = Split (Segmentation) → Pick (Targeting) → Own a spot in minds (Positioning).

📖 3. Ansoff matrix growth strategies

🔑 Key Concepts & Definitions

• Ansoff matrix : A growth-strategy framework that maps options based on whether products and markets are existing or new.
• Market penetration : Market penetration is growth by selling existing products into existing markets to increase market share.
• Market development : Market development is growth by taking existing products into new markets.
• Product development : Product development is growth by creating new products for existing customers.
• Diversification : Diversification is growth by launching new products into new markets.

📝 Essential Points

• Market penetration uses existing products + existing markets and aims to increase market share.
• Market penetration methods include promotions, lower prices, and advertising.
• Market development uses existing products + new markets and can include entering a new country.
• Product development uses new products + existing customers and can include launching a new product model.
• Diversification uses new products + new markets and is the highest-risk option.
• Risk increases in the order: market penetration → diversification.

💡 Memory Hook

Ansoff risk ladder: Penetration (lowest) → Diversification (highest).

📖 4. International market entry modes

🔑 Key Concepts & Definitions

• Exporting : Exporting is an entry mode where a firm sells abroad with low investment and typically low risk and control.
• Licensing : Licensing is an entry mode where a foreign party pays to use a firm’s patent, technology, or brand.
• Franchising : Franchising is an entry mode where a firm transfers its business model, brand, and know-how.
• Joint venture : A joint venture is an entry mode where a local and a foreign firm partner to operate together.
• Wholly-Owned Subsidiary : A wholly-owned subsidiary is an entry mode where the firm fully owns its operations abroad.

📝 Essential Points

• Exporting is characterized by low investment, low risk, and low control, and it suits testing foreign markets.
• Licensing enables fast international expansion but reduces control because the licensee uses the assets.
• Franchising transfers the business model, brand, and know-how, and it is exemplified by McDonald’s and Starbucks.
• Joint ventures combine local knowledge with shared risk, but can create conflicts and shared control.
• Wholly-owned subsidiaries provide maximum control and keep all profits, but are very expensive and very risky.
• General exam logic: more control usually means more risk and investment.

💡 Memory Hook

Control trade-off: Exporting/License/Franchise = less control; Subsidiary = most control (and risk).

📖 5. Trade barriers and dumping

🔑 Key Concepts & Definitions

• Trade barriers : Trade barriers are obstacles that limit international trade between countries.
• Tariff barriers : Tariff barriers are taxes imposed on imported goods that raise their cost in the importing country.
• Non-tariff barriers : Non-tariff barriers are restrictions other than taxes, such as quotas, licenses, and standards.
• Anti-dumping measures : Anti-dumping measures are protections used to counter unfairly low prices in export markets.
• Dumping : Dumping is selling abroad at below production cost or below the domestic price to gain market share.

📝 Essential Points

• Tariff barriers (tariffs) make imported products more expensive and can protect local companies.
• Non-tariff barriers include quotas that limit import quantities.
• Non-tariff barriers include import licenses requiring government authorization.
• Non-tariff barriers include standards that impose technical or safety requirements.
• Anti-dumping measures are used to protect against unfair low prices and can trigger trade conflicts.
• Dumping is not just low prices; it requires prices that are unfairly low by the dumping definition.

💡 Memory Hook

Dumping = unfairly low price (not merely cheap).

📖 6. Purchasing power parity and living standards

🔑 Key Concepts & Definitions

• Purchasing power parity (PPP) : Purchasing power parity measures what consumers can actually buy in a country using their income.
• Nominal income : Nominal income is the face-value income figure that can mislead comparisons across countries.
• Living standards comparison : Living standards comparison uses PPP to judge how much consumption is possible in different countries.
• Market potential : Market potential refers to the size of demand a country can support based on consumers’ effective purchasing power.

📝 Essential Points

• PPP helps compare living standards more realistically than nominal income alone.
• PPP shows that $1 can buy more products in India than in France (example given).
• PPP is useful for comparing consumer purchasing power across countries.
• PPP supports better comparisons of market potential.
• PPP is often more useful than GDP per capita alone for exam-style comparisons.

💡 Memory Hook

PPP = “what you can buy,” not “what you earn.”

📖 7. Brand equity and marketing communications

🔑 Key Concepts & Definitions

• Brand equity : Brand equity is the value created by a strong brand in the minds and behavior of consumers.
• Customer loyalty : Customer loyalty is the tendency of consumers to repeatedly choose the same brand over time.
• Integrated marketing communications (IMC) : IMC is the coordination of all communication tools to deliver one consistent message.
• Consistent communication : Consistent communication is the repeated alignment of brand messages across channels to strengthen brand meaning.
• Emotional attachment : Emotional attachment is the personal feeling a consumer develops toward a brand.

📝 Essential Points

• Strong brand equity can produce customer loyalty, higher prices, and stronger brand image.
• Strong brand equity can increase resistance to crises.
• Strong brand equity can make marketing more effective.
• Sources of brand equity include positive reputation, quality, and emotional attachment.
• Sources of brand equity include consistent communication.
• Brand equity examples include Apple, Nike, and Coca-Cola.

💡 Memory Hook

Brand equity pays in 4 ways: loyalty, price premium, image strength, crisis resistance.

📖 8. Standardization vs adaptation and pattern advertising

🔑 Key Concepts & Definitions

• Standardization : Standardization is using the same marketing strategy worldwide across markets.
• Adaptation : Adaptation is adjusting marketing to fit local markets and consumer needs.
• Pattern advertising : Pattern advertising is a middle approach that keeps a global idea while adapting it locally.

📝 Essential Points

• Standardization lowers costs, supports a consistent image, and enables economies of scale.
• Standardization can ignore cultural differences.
• Adaptation improves local fit and can create stronger customer connection.
• Adaptation is more expensive and can reduce consistency.
• Pattern advertising keeps the same global idea but adapts locally.
• Exam logic: whether to standardize or adapt depends on culture, language, laws, and consumer habits.

💡 Memory Hook

Standardize = same everywhere; Adapt = tailor locally; Pattern = global core + local tweaks.

📖 9. Incoterms and international trade responsibilities

🔑 Key Concepts & Definitions

• Incoterms : Incoterms define responsibilities between seller and buyer in international trade.
• EXW (Ex Works) : EXW is an Incoterm where the seller’s responsibility is minimal and the buyer handles most costs and logistics.
• FOB (Free on Board) : FOB is an Incoterm where the seller transports goods to the port and loads them onto the ship.
• CIF (Cost Insurance Freight) : CIF is an Incoterm where the seller pays transport, insurance, and freight to the destination port.
• DDP (Delivered Duty Paid) : DDP is an Incoterm where the seller pays everything until the goods reach the final destination.

📝 Essential Points

• Incoterms are very important because they specify trade responsibilities.
• EXW: the seller provides only product availability at the factory; the buyer pays almost everything.
• EXW corresponds to minimum seller responsibility.
• FOB: the seller transports goods to the port and loads them onto the ship.
• FOB shifts maritime transport payment to the buyer.
• CIF: the seller pays transport, insurance, and freight, while the buyer handles later steps after arrival at the port described by the term.

💡 Memory Hook

EXW = minimum seller; DDP = maximum seller (responsibility ladder).

📊 Synthesis Tables

Standardization vs adaptation

⚠️ Common Pitfalls & Confusions

1. Confusing dumping with any low price; dumping requires unfairly low pricing by the dumping definition.
2. Mixing up STP roles: segmentation divides the market, targeting selects segments, and positioning creates the brand image.
3. Assuming PPP equals GDP per capita; PPP focuses on what consumers can actually buy.
4. Thinking Incoterms are about product quality; they define who pays and who is responsible for logistics steps.
5. Forgetting the risk order in the Ansoff matrix; risk increases from market penetration to diversification.

✅ Exam Checklist

1. For PESTEL, list the six categories and give one business impact for each (opportunity or threat).
2. For STP, define segmentation, targeting, and positioning and name at least three segmentation types.
3. For STP targeting, state the evaluation criteria: market size, profitability, competition, and growth potential.
4. For STP positioning, explain what must be covered: target, why selected, and desired brand perception.
5. For the Ansoff matrix, match each strategy to the correct product/market combination and its risk level.
6. For Ansoff, recall the example actions: promotions/lower prices/advertising for market penetration and entering a new country for market development.
7. For entry modes, distinguish exporting, licensing, franchising, joint venture, and wholly-owned subsidiary by control, risk, and investment logic.
8. For trade barriers, differentiate tariff barriers from non-tariff barriers and list at least two non-tariff examples.
9. For dumping, state the definition conditions and the key distinction from “low prices alone.”
10. For PPP, explain what it measures, why nominal income can mislead, and what PPP improves compared with GDP per capita alone.
11. For brand equity, list at least three benefits of strong brand equity and at least three sources.
12. For standardization vs adaptation, state advantages and disadvantages of each and the dependence factors for choosing.
13. For pattern advertising, describe it as a middle approach (global idea + local adaptation).
14. For Incoterms, match EXW, FOB, CIF, and DDP to seller vs buyer responsibilities and the minimum-to-maximum seller responsibility logic.