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International Marketing

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International Marketing WHAT INTERNATIONAL MARKETING IS: International marketing is the process of planning and conducting transactions across national borders to ... – PowerPoint PPT presentation

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Title: International Marketing


1
  • International Marketing

2
Understand the importance of international
marketing Appreciate the opportunities and
challenges offered by international
marketing Recognize the effect of the global
environment on international marketing
activities Understand the process of market
selection
3
Recognize the process of internationalization. App
reciate the different forms of market
entry Comprehend the international adjustment of
the marketing mix Understand the steps necessary
for the implementation of an international
marketing strategy
4
WHAT INTERNATIONAL MARKETING IS
  • International marketing is the process of
    planning and conducting transactions across
    national borders to create exchanges that satisfy
    the objectives of individuals and organizations.

5
PLANNING FOR INTERNATIONAL MARKETING
  • How will my product fit into the international
    market?
  • What marketing adjustments are or will be
    necessary?
  • What threats from global competition should I
    expect?
  • How can these threats be turned into
    opportunities?

6
Top 25 Multinational Firms
  • TABLE 3.1

7
Opportunities
  • Integrate global knowledge
  • Expand long-run production
  • Lengthen and rejuvenate product life cycles
  • TABLE 3.1

8
THE INTERNATIONAL MARKETING ENVIRONMENT
  • Cultural Environment
  • Socioeconomic Environment
  • Legal and Political Environment

9
THE INTERNATIONAL MARKETING ENVIRONMENT
  • International marketer surveys
  • Depth of traditional beliefs and attitudes and
    dominant cultural elements
  • Power of opinion leaders and change agents
  • Communication from different media

Cultural Environment
Socioeconomic Environment
Political/Legal
10
Cultural Environment
  • Four Dimensions of Culture
  • Degree of Individualism
  • Level of Equality
  • Uncertainty Avoidance
  • Material Achievement

11
Four Dimensions of Culture
Cultural Environment
12
Socioeconomic Environment
  • Population
  • Age Distribution
  • Income
  • Infrastructure

13
Socioeconomic Environment
  • Population and its characteristics
  • Aging of world populations for example
  • Economic Integration
  • NAFTA, EU, MERCOSUR

Cultural Environment
Socioeconomic Environment
Political/Legal
14
Socioeconomic Environment
Cultural Environment
  • Elderly population boom changes U.S. market
    characteristics

Socioeconomic Environment
Growth Rate
Political/Legal
Decades
Source http//www.census.gov/
15
Legal and Political Environment
  • Legal and Political Issues Facing Marketers
  • Intellectual Property Rights
  • World Trade Organization (WTO)
  • Common Law
  • Code Law
  • Antidumping Laws

16
Legal and Political Environment
  • Host country
  • Minimum wage legislation
  • Regulatory measures
  • Lack of enforcement
  • Home country
  • Import/Export restrictions, etc.

Cultural Environment
Socio-Economic Environment
Political/Legal
17
Legal and Political Environment
  • Intellectual property rights
  • Common law Vs Code law
  • Tradition/
  • precedence vs comprehensive written statutes
  • Often a mixture of two systems

Cultural Environment
Socio-Economic Environment
Political/Legal
18
Legal and Political Environment
Cultural Environment
  • International Law
  • World Trade Organization
  • Defines economically acceptable practices for its
    member nations
  • Intent is to provide stable markets

Socio-Economic Environment
Political/Legal
19
INTERNATIONAL MARKET SELECTION
  • Identification of Potential Markets
  • Selectively expanding

20
Screening Process in Target Market Choice
  • Figure 3.3

21
Market potential
Level of sales that might be available to all
marketers in an industry in a given market.
22
Sales potential
Share of the market potential that a particular
marketer may hope to gain over the long run.
23
Expansion Concentration versus Diversification
  • Concentration market development strategy that
    involves focusing on a smaller number of markets
  • Diversification marketing development strategy
    that involves expansion to a relatively large
    number of markets.

24
THE INTERNATIONALIZATION PROCESS
Major Motivations to Internationalize
Profit advantage Unique products Technological
advantage Exclusive information Tax
benefit Economies of scale
Proactive
25
THE INTERNATIONALIZATION PROCESS
Major Motivations to Internationalize
Competitive pressures Overproduction Declining
domestic sales Excess capacity Saturated domestic
markets Proximity to customers/ports
Reactive
26
ALTERNATIVE ENTRY STRATEGIES
  • Indirect Exporting and Importing
  • Direct Exporting and Importing
  • Licensing (Franchising)
  • Foreign Direct Investment

27
ALTERNATIVE ENTRY STRATEGIES
  • First Tier
  • Direct exporting/importing
  • Indirect exporting/importing
  • Licensing and franchising
  • Second Tier
  • Foreign Direct Investment
  • Joint ventures
  • Contract manufacturing

28
ALTERNATIVE ENTRY STRATEGIES
  • Indirect Exporting and Importing
  • Intermediary used to deal with foreign customers
    or firms
  • Low management commitment
  • Often unintended or unaware

29
ALTERNATIVE ENTRY STRATEGIES
  • Direct Exporting and Importing
  • Control international activities better
  • Can lead to further growth with trading partners
  • Must find customers, markets

30
ALTERNATIVE ENTRY STRATEGIES
  • Intermediaries
  • Importers/Exporters frequently use them
  • Export Management Companies (EMC)
  • Trading Company

31
ALTERNATIVE ENTRY STRATEGIES
  • Licensing
  • Use of intellectual property for compensation
  • Low capital investment and involvement
  • Capitalize on RD
  • Can create competition

32
ALTERNATIVE ENTRY STRATEGIES
  • Franchising
  • Grant by parent company to independent entity to
    do business in a prescribed manner
  • Sell franchisers products using name and
    marketing techniques or business approach
  • Franchise must offer high uniqueness with high
    standardization

33
ALTERNATIVE ENTRY STRATEGIES
  • Foreign Direct Investment
  • Generally large MNC due to capital and risk
    factors
  • Need for wide market access remedied by
    acquisition
  • Circumvent barriers to trade
  • Government incentives

34
ALTERNATIVE ENTRY STRATEGIES
  • Full Ownership - often desirable and often
    impossible
  • Joint Venture - collaboration between 2
    organizations
  • Share assets, risks, profits
  • Partner brings local expertise, influence

35
ALTERNATIVE ENTRY STRATEGIES
  • Strategic Alliances - Informal or formal
    arrangements between 2 companies with common
    objective
  • Flexible to environmental conditions
  • Pooling of expertise

36
ALTERNATIVE ENTRY STRATEGIES
  • Contractual Arrangements
  • Cross-marketing
  • Outsourcing
  • Contract manufacturing

37
Complementary Strengths Create Value
  • Figure 3.4

38
COMPREHENSIVE VIEW OF INTERNATIONAL EXPANSION
  • Figure 3.5

39
International Expansion
  • 3 Factors to Market Approach

Market Characteristics
Government regulations Customer characteristics,
expectations, and preferences Purchase
patterns State of economic development Competitive
offerings Climate and geography
40
International Expansion
  • 3 Factors to Market Approach

Market Characteristics
Product Characteristics
Product constituents Brand Positioning Packaging
Country of origin
Government regulations Customer characteristics,
expectations, and preferences Purchase
patterns State of economic development Competitive
offerings Climate and geography
41
International Expansion
  • 3 Factors to Market Approach

Market Characteristics
Product Characteristics
Company Considerations
Product constituents Brand Positioning Packaging
Country of origin
Government regulations Customer characteristics,
expectations, and preferences Purchase
patterns State of economic development Competitive
offerings Climate and geography
Profitability Market opportunity Policies
42
International Expansion
43
International Expansion
  • Mandates most marketing-mix adjustments
  • Government regulations are most prevalent
  • Standards (language, ISO 9000, etc.)
  • Product positioning changes

44
International Expansion
  • Global products
  • Only changes possible are to positioning
  • Product timing based on economic growth
  • Price competition
  • Foreign exchange factor
  • Extra costs incurred (shipping, etc.)

45
International Expansion
  • Climate and geography
  • Food product distribution is different in many
    countries

46
International Expansion
  • Cannot contain features/ingredients in violation
    of law/custom
  • Standardization applied most successfully in
    culturally similar markets
  • Promotional features and packaging often varied

47
International Expansion
  • Is it worth it?
  • Can the company justify internationalization?

48
Adjusting the Marketing Mix
  • Standardized Approach
  • Multi-domestic Approach
  • Globalization Approach

49
Factors Affecting Marketing-Mix Adjustments
  • Figure 3.6

50
Product Decisions
  • Design
  • Branding
  • Packaging
  • Labeling

51
Promotion Decisions
  • Positioning
  • Copy

52
Promotion Decisions
  • Figure 3.7

53
Distribution Decisions
  • Tactical and Market-by-market

54
Pricing Decisions
  • Price Escalation Due to Costs
  • Foreign-exchange Rates

55
IMPLEMENTING MARKETING PROGRAMS WORLDWIDE
  • Management Process
  • Organization Structure

56
IMPLEMENTING MARKETING PROGRAMS WORLDWIDE
Headquarters
Division C
Division B
Division A
57
IMPLEMENTING MARKETING PROGRAMS WORLDWIDE
  • Management Process
  • Information flows between headquarters and
    country organizations
  • Information flows between country organizations

58
IMPLEMENTING MARKETING PROGRAMS WORLDWIDE
  • Management Process
  • Personnel exchange
  • Headquarters coordinates and leverages combined
    resources
  • Centralized marketing strategy with local
    marketing augmentations
  • Certain marketing-mix aspects are left localized
    (distribution channels, etc.)

59
IMPLEMENTING MARKETING PROGRAMS WORLDWIDE
  • Organization Structure
  • Matrix style has replaced the country division
    model
  • Product groups coordinate efforts at headquarters

60
Supplemental Material
61
International Expansion
  • 3 Ways to Approach International Markets

Make no special provisions
62
International Expansion
  • 3 Ways to Approach International Markets

Make no special provisions
Adapt to local conditions in each target market
(multi-domestic approach)
63
International Expansion
  • 3 Ways to Approach International Markets

Make no special provisions
Adapt to local conditions in each target market
(multi-domestic approach
Incorporate differences into a regional/global
strategy to allow for local implementation
(globalization approach)
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