International Marketing

1
International Marketing

• Tim Beal
• Lecture 4
• 1 August 2007

2
TODAY

• Where were at
• International Services marketing
• Video interviews with agents in India
• Marketing of Educational services
• Roger Armstrong, Victoria International

3
Where were at

• Been looking at aspects of the international
  marketing environment
• Dont forget that diagram
• Economic, political and social aspects
• Keep you eyes on the news IM is always there
• Whats this about?
• No more forbidden fruit

4
Next week look at culture

• DVD on Iran
• Country study Japan
• Following week internet
• Guest speaker Dr Mustafa on Islam
• This weekgtgtservices prepare for research
  project

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INTERNATIONAL SERVICES MARKETING

• Increasingly important because
• Services fastest growing part of most economies
• Liberalisation of international trade in services
• Behind goods

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Services in international economy

• Share of services grown over last40 years
• 72 GDP in developed countries
• 52 in developing
• More stats in a moment
• But services only 20 of world trade
• Output gtgtinternational trade
• Goods over 50
• Services 10

7
Why the difference?

• Tradability
• Many services are non-tradable
• Non-storable
• Must be produced when and where consumed
• Examples?

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Next global shift?

• The offshoring of corporate service functions
  the next global shift?
• Why?
• ICT makes it possible
• However there is a backlash

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Backlash

• Call centres to job loss

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WTO and GATS

• WTO services gateway

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Importance of services

• Sectoral composition
• Services more important in developed countries
• Balance of trade in GS
• Varies between countries
• Developed countries tend to have surplus in
  services

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Sectoral composition of selected economies
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Exports2004, USb
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Imports2004, USb
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Balance2004, USb
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Tourism

• Tourism is 1
• China big growth market
• 6 of exports of GS in 2003
• Two aspects
• Arrivals
• Receipts

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Top tourism destinations2005 Arrivals
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Top tourism destinations2005 - Receipts
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Education

• Education is becoming major industry
• Internationally mobile students
• 1999 1.75 million
• 2004 2.5 million
• 41 increase
• Recent data on links page
• Financial services, consultancy, etc

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Who is this? What service industry is he in?
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International marketing of sports

• Sport is a big services industry
• Increasingly internationalised
• coaching in Britain, and Japan
• Japan what is the quintessential Japanese sport?

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Sumo
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Sumo changing

• Women sumo
• Foreigners!
• Foreigner players now dominate sumo

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Services and the top 100 companies

• US leads in both GS
• But interesting variations across countries
• Top 100 on links page under services

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The Nature of Services

• One definition
• Services are different from products and have a
  number of distinguishing characteristics that are
  critical in the marketing overseas. Services can
  be anything that can be bought or sold but cannot
  be dropped on your foot!

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The Marketing Paradigm for Services

• Intangibility
• Inseparability
• Heterogeneity
• Perishability

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Intangibility

• The fact that services often cannot be touched
  or felt can be compensated for by stressing
  tangible cues associated with the service.

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Inseparability

• Because production and consumption of many
  services occur at the same time and the consumer
  becomes part of the service, selection and
  training of personnel becomes very important.

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Heterogeneity

• Because of the high labour content in the
  provision of most services, output can vary in
  quality.

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Perishability

• Because services cannot be saved or stored, it
  is necessary to devise strategies to cope with
  fluctuating demand.

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Prosumption

• Customers become part of the production process
  that becomes simultaneous with consumption.
• eg Students are key component in the productions
  of learning outcomes
• Not passive consumers

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7 Ps Services paradigm

• Figure 14.2, p 514

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Process
Personnel
Physical facilities
Product
Place
Product
Place
Promotion
Promo
Price
Price
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4 Ps to 7

• Personnel
• Eg lecturers, service staff
• Problems of consistency, training, attitudebeing
  human, and interacting with customers
• Process
• Eg enrolment, teaching, graduation..
• Physical facilities
• Lecture theatres, libraries, campus, facilities
  (eating, religion, accommodation, sport)

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Goods versus services

• G S dichotomy may be misleading
• Pure services
• Hairdressing, surgery
• Pure goods
• Pens and pencils
• But often distinction is difficult

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Definitions and difficulties

• Restaurant is defined as a service
• But from customers perspective the main product
  is a good (ie meal)
• Buying a car good
• Renting a car service
• But for the customer it is still a car

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Services may have goods component

• To varying degrees
• Restaurants.airlines
• Both might provide meals but importance differs
• airlines differentiate themselves in other ways

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Goods may have service component

• More complicated good, more important services
• Aircraft.cars

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Statistics

• Important part of statistics on international
  trade in services is travel
• Goods bought by travellers are included in the
  definition of travel

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Education services project

• Need to link practical exercise with theory in
  textbook
• Need to get moving as soon as possible
• Set up research teams in tutorials
• Make sure you can contact each other
• Be ready to roll as soon as wine assignment is
  out of the way, utilise the teaching break.

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Educational services marketing

• The Practitioners
• Roger Armstrong
• Director of Victoria International
• DVD Indian education agents
• Copies in Commerce Library
• Frequently mention Tim Fowler (Rogers
  predecessor) as the best

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Programme

• Today
• Services in general
• Marketing of educational services
• Next week
• Culture (DVD on Iran)
• Country study Japan