Imm unit-01 (framework of global marketing management)
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This document discusses the framework of global marketing management. It begins by explaining how international marketing has become important for business schools to develop global strategies. It then outlines the aims and importance of the course on global marketing management. The document provides details on key topics that will be covered in the course, including frameworks for global marketing, research, decision making, market entry strategies, and more. It emphasizes that global marketing management provides skills for operating in today's expanded and competitive global business environment.
Imm unit-01 (framework of global marketing management)
- 1. 07/06/10 1 By : Prof. Amit Kumar
- 2. 07/06/10 2 International marketing has become a major concern for business schools to develop global strategies to lead and sustain in the much expanded and competitive arena. Liberalization thus catalyzing market competition, poses challenge for the managers in handling the rigors of expanding global marketplace. Syllabus aims at providing contemporary knowledge & skills on issues of global marketing management. IILM-GSM Importance of this course Global Marketing Management
- 3. 07/06/10 3 Course: International Marketing Management 1. Framework of Global Marketing Management 2. Global Marketing Research 3. Decision Making in International Marketing 4. Foreign Market Entry & Export Marketing 5. Product Planning & Development 6. Global Pricing Strategies 7. Global Distribution System 8. Promoting Product Internationally IILM-GSM Global Marketing Management
- 4. 07/06/10 4 IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 5. 07/05/10 5 Contents • Growing Importance of International Marketing • Drivers of International Marketing • International Marketing Vs Domestic Marketing • Motives for Entering International Market • Towards GLOCAL Marketing • Orientations Towards International Marketing Case study: Geocentric approach- The Boeing Way • Process of International Marketing • Internationalization of Firm’s Value Chain IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 6. 07/05/10 6 Global Marketing Management International marketing (IM) or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm. It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 7. 07/05/10 7 International Marketing Management ‘International marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.’ - American Marketing Association (AMA) IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 8. 07/05/10 8 Growing Importance of Global Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management • In the 21st century, international marketing is proving to be of ever-increasing importance to companies of all sizes and to national economies. • Consumers worldwide are familiar with international brands and additionally are using locally produced goods that include materials or components supplied from abroad. • The increasing importance of international markets over the past 20 years has been the result of a number of interrelated factors i.e. known as DRIVERS OF INTERNATIONAL MARKETING.
- 9. 07/03/15 9 “The term ‘drivers’ refers to the global forces that have fueled the process of globalization. These global factors have acted as catalyst that have contributed to the growth of international marketing”. 1. Declining Trade and Investment Barriers 2. Technological Change 3. Emergence of Global Institutions 4. Increasing Competition Drivers of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 10. 07/03/15 10 1. Declining Trade and Investment Barriers • The economic liberalization in India-1991, refers to ongoing reforms in India. After Independence in 1947, India adhered to socialist policies. The extensive regulation was sarcastically dubbed as the "License Raj"; the slow growth rate was named the "Hindu rate of growth". In the 1980s, the Prime Minister Rajiv Gandhi initiated some reforms. His government was blocked by politics. In 1991, the government of P. V. Narasimha Rao and his finance minister Manmohan Singh started breakthrough reforms (proposed LPG). • Declining trade and investment barriers (by government) have vastly contributed to globalization. Drivers of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 11. 07/03/15 11 2. Technological Change • Most powerful instrument that triggered globalization is technology. Technology is expanding, especially in: • Microprocessors and Telecommunication • Internet and World Wide Web • Transportation Technology • Thus we find that telecommunications is creating a global audience and transport is creating a global village. From Delhi to Beijing to Boston ordinary people watching MTV, wearing Levi’s jeans and listening to i-pods as they commute to work. Drivers of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 12. 07/03/15 12 2. Technological Change (cont’) Microprocessors and Telecommunication • Single most important innovation of this century has been the microchip enabling the explosive growth of high-power, low-cost computing, enabling huge amounts of information to be processes by individual and firms. • This has been accompanied by developments in satellite, optical fiber and wireless technologies resulting in communication revolution. Drivers of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 13. 07/03/15 13 2. Technological Change (cont’) Internet and World Wide Web • In 1990 there were less than 1 million users of internet. The number had gone up to 655 million by 2002 and 1.12 billion users by 2005. • The internet and world wide web are the information backbone of the global economy. • The value of web-based transaction rose to $657 billion in 2000 from virtually nothing in 1994, to $6.8 trillion by 2004. These transactions include both business to business and B2C or e-commerce. Drivers of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 14. 07/03/15 14 2. Technological Change (cont’) Transportation Technology • Several major innovation in transportation technology since World War-II, are development of commercial jet aircraft and super-freighter, and • Introduction of containerization, which simplifies transshipment from one mode of transport to another and lowering the cost of shipping goods over long distances. • There has also been an increase in the share of cargo traveling by air as a result of improvements in air travel. Drivers of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 15. 07/03/15 15 3. Emergence of Global Institutions • Trading block, WTO (and its predecessor the GATT) seeks to promote international business by removing trade and investment barriers. • The United Nations, along with its associated financial institutions (World Bank, IMF), is committed to preserving world peace through international cooperation and collective security. • Regional trading blocks (EU, NAFTA, ASEAN) are adding to the pace of globalization Drivers of International Marketing North American Free Trade Agreement IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 16. 07/03/15 16 4. Increasing Competition • Competition has become more global. • Developing markets have huge markets. Many MNCs are locating their subsidiaries in low wage and low cost countries to take advantage of low cost production. • Four countries from developing world- Brazil, Russia, India and China (BRIC)- are seen as future global leaders in the world economy. Drivers of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 17. 07/03/15 17 • Large MNCs such as Toyota, Honda and Mitsubishi started operations in the domestic market before expanding into the international market. Indian Ranbaxy, Satyam, Asian Paints, Wipro, Infosys, NIIT also started operations domestically before entering into international market. • Although international marketing is often an extension of domestic marketing, there are significant differences between the two. 1. Diverse Business Environment 2. Enhanced Risk and Uncertainty 3. Operational Complexities International Versus Domestic Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 18. 07/03/15 18 1. Diverse Business Environment • International marketing/business operates in a diverse business environment (PEST), since it is located in different countries. • Differences are primarily in the areas of Currency, Interest rates, Inflation, Taxation systems, Government regulation, Language, Cultural and Economic barriers, which gives rise to complexities for the business firms. International Versus Domestic Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management http://www.worldwide-tax.com/
- 19. 07/03/15 19 1. Diverse Business Environment McDonald’s, which has a presence in almost all countries of the world, adapts its menu according to local taste and religious learning. In India it has replaced beef products with chicken and in the Muslim countries of the Middle- East it does not serve any pork products. International Versus Domestic Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 20. 07/03/15 20 2. Enhanced Risk and Uncertainty • Business firms face risks (PEST Related) on account of the unpredictability of operational and financial outcomes. • More diverse business environment means more risks. Also risks related to payments in different currencies, supply and demand conditions etc. • Uncertainty refers to the unpredictability of the environmental or organizational conditions that affect firm performance. International Versus Domestic Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management www.allaboutrisk.com/ www.eurasiagroup.net
- 21. 07/03/15 21 3. Operational Complexities • Operationally, international business is often more difficult and costly to manage than activities in the domestic market alone. Example, local employees and expatriates (employees from foreign country) may have trouble getting along with each other because of cultural and language differences. • Cultural diversity encountered when operating in several countries may create problems of communication, coordination and motivation in employees of the organization. • Organizational principles and managerial philosophies differ widely across nations, increasing complexity of operation and management of international business. International Versus Domestic Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management Daimler Chrysler Merger Failed
- 22. 07/03/15 22 Motives behind International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 23. 07/03/15 23 1. Increased Profits • The basic raison de etre of a business is to maximize profits through increased revenues and/or reduced costs. • The rapid growth of outsourcing industry is an example of the ability of firms in developed parts of the world being able to take advantage of the low cost skilled labor force in countries such as India, Ireland and Philippines, to lower costs and maximize profits Motives behind International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 24. 07/03/15 24 2. Optimum Capacity Utilization • Maximization of profits possible only when it can minimize costs. • This requires production at a scale which may be constrained due to lack of demand in the domestic market. • A firm can increase its scale of operation if it is able to tap into demand in foreign markets. Motives behind International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 25. 07/03/15 25 3. Market Motives • Firms often need to protect and hold their market power or competitive position in the face of threats from domestic rivals or changes in government policy. Dell, a leading personal computer company, invested in Europe, Asia, Latin America and Africa due to strong competitions in the US domestic market. • A firm may decide to seek international market opportunities in foreign countries through trade or investment. Companies such as Avon and Amway have entered India in early 1990s in search of opportunities in its direct marketing business. Motives behind International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 26. 07/03/15 26 4. Strategic Motives • Firms often participate in international business for strategic reasons and able to take advantage of vertical integration in different countries. • This leads the firm to advantages of technological leadership, brand image, customer loyalty, competitive position and ‘first mover’. • MNEs with this intension often establish global strategic alliances or acquire local firms. Motives behind International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 27. 1-27 Philosophy of Marketing The Production Concept The Product Concept The Selling Concept The Marketing Concept The Holistic Marketing Concept IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 28. 1-28 Philosophy of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 29. 07/05/10 29 Orientations Towards International Marketing An increasing number of companies are operating on a global or regional rather than a national scale. International marketing managers are asking themselves how they should cope with the new scope of operations and whether they can apply domestic strategies to international markets. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 30. 07/05/10 30 Orientations Towards International Marketing Some guidelines for developing international marketing strategies and other issues may be provided by EPRG Framework. A key assumption in EPRG framework is that the degree to which management is committed (or willing to move towards) affects the specific international strategies and decision rules of the firm. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 31. 07/05/10 31 Orientations Towards International Marketing • The degree and nature of involvement in international business, or International orientations of MNEs, vary very widely. • Four types of attitudes or orientations towards internationalization are: • Ethnocentrism (Home country orientation) • Polycentric (Host country orientation) • Regiocentrism (Regional orientation) • Geocentrism (World orientation) IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 32. 07/05/10 32 Ethnocentrism (Home country orientation) • An MNE with an ethnocentric orientation relies on the values and interests of the parent company in formulating and implementing its internationalization plans. • In the ethnocentric company, overseas operations are viewed as secondary to domestic operations and primarily as a means of disposing of ‘surplus’ domestic production. • Firms trying to sell the same product abroad that they sell at home use. Even if consumer needs or wants differ from those in the home country, those differenced are ignored at headquarters. • This orientation appears to be appropriate for a small company just entering international operations and looks for minimum risk & commitment to overseas markets. IILM-GSM Orientations Towards International Marketing Global Marketing Management Framework of Global Marketing Management
- 33. 07/05/10 33 Ethnocentrism (Home country orientation) Nissan’s ethnocentric orientation was quite apparent during its first few years of exporting cars and trucks to the United States. Designed for mild Japanese winters, the vehicles were difficult to start in many parts of the United States during the cold winter cars. Until the 1980s, activity outside the United States was tightly controlled by headquarters at Japan and focused on selling products originally developed for the US market. Today, however, ethnocentrism is one of the biggest internal threats a company faces. IILM-GSM Orientations Towards International Marketing Global Marketing Management Framework of Global Marketing Management
- 34. 07/05/10 34 Polycentric (Host country orientation) • The polycentric orientation is the opposite of ethnocentrism. • The term polycentric describes management’s belief that each country in which a company does business is unique. This assumption lays the groundwork for each subsidiary to develop its own unique business and marketing strategies in order to succeed. • The term multinational company is often used to describe such a company. • The important merit of polycentrism is the adaptation of the marketing strategies to the local conditions. IILM-GSM Orientations Towards International Marketing Global Marketing Management Framework of Global Marketing Management
- 35. 07/05/10 35 Regiocentrism (Regional orientation) • A regiocentric company views different regions as different markets. A particular region with certain important common marketing characteristics is regarded as a single market, ignoring national boundaries. • Categorization of regions may be based on cultural traits e.g. the Asia-Pacific or on economic and political characteristics such as European Union. • For example, a US company that focuses on the countries included in the NAFTA is a regiocentric orientation. Similarly, a European company that focuses its attention on the Europe is regiocentric. IILM-GSM Orientations Towards International Marketing Global Marketing Management Framework of Global Marketing Management
- 36. 07/05/10 36 Geocentrism (World orientation) Geocentric approach is an orientation whereby executives believe that a global view (entire world as a single market & develops a standardized marketing mix) is needed in both headquarters of the parent company and its various subsidiaries. The best individuals, regardless of home or host country origin, should be utilized to solve company problems anywhere in world. IILM-GSM Orientations Towards International Marketing Global Marketing Management Framework of Global Marketing Management
- 37. 07/05/10 37 Geocentrism (World orientation) Geocentric approach is the most difficult to achieve because it requires that managers acquire both local and global knowledge. IILM-GSM Orientations Towards International Marketing Global Marketing Management Framework of Global Marketing Management
- 38. 07/05/10 38 The Boeing Company is a major aerospace and defense corporation, founded by William E. Boeing in Seattle, Washington on July 15, 1916. In the beginning of the 1970s, Boeing faced a new crisis. Sales began to slow down in the early 1970s because of several reasons. Managing Diversity-The Boeing Way IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 39. 07/05/10 39 The Apollo program (NASA's Apollo Program ran from 1961 until 1975 ), in which Boeing had participated significantly during the preceding decade, was almost entirely canceled. Once more, Boeing hoped to compensate with sales of its commercial airliners. At that time, however, there was a heavy recession in the airlines industry so that Boeing did not receive any orders for more than a year. Another problem was that in 1971, the U.S. Congress decided to stop the financial support for the development of the supersonic 2707. Boeing's answer to the British- French Concorde, forcing the company to discontinue the project. The company had to reduce the number of employees from over 80,000 to almost half, only in the Seattle area. Problem Analysis-The Boeing Way IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 40. 07/05/10 40 ‘When sales began to slow down in the early 1970s, a group of Boeing engineers began to recognize that they had not given enough attention to a major potential market, the developing regions of the world’. Through visits abroad, the engineers found that runways in developing countries were generally too short for the 737 and were mainly asphalt, a softer material than concrete. Problem Analysis-The Boeing Way IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 41. 07/05/10 41 “A geocentric approach helped Boeing save its 737 airplane”. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 42. 07/05/10 42 •Consequently they redesigned the wings to allow shorter landings on soft pavement and changed the engine so that take-offs would be quicker. •They also developed a new landing gear and installed low-pressure tires. •Boeing soon began to get small orders for the 737 from a number of developing countries, which later bought larger Boeing planes because of their satisfaction with the 737. The Boeing 737 ultimately became the best selling commercial jet in aviation history and is still selling well. Geocentric approach in Managing Diversity-The Boeing Way IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 43. 07/05/10 43 Empirical Support for EPRG An exploratory study was recently conducted to provide some initial insight into the validity of this framework. The perceptions and preferences of international executives towards the current and future appropriateness of each of these alternative orientations and associated strategies were assessed. The sample consisted of 40 key international executives of one large US firm whose product lines are composed of frequently purchased household items. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 44. 07/05/10 44 Empirical Support for EPRG Each respondent was presented with a set of 4 alternative strategies (one for each orientation) for each of 15 marketing decisions areas. For example for the brand name decision, the set was as follows: A) Branding policy in overseas companies stresses the parent country as a unifying feature but not necessarily the origin of the parent country (ethnocentric). IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 45. 07/05/10 45 Empirical Support for EPRG B) Each local company brands products on an independent basis and consistent with local country criteria (polycentric). C) Overseas companies brand products uniformly within the region (regiocentric). D) A world wide branding policy exists only for those brands, which are acceptable world wide (geocentric). IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 46. 07/05/10 46 Result of Empirical Support for EPRG Studies suggested that the polycentric orientation is the dominant approach in the case of price, customer service, market research, channel of distribution and least marked in the case of brand name and product quality. In both (brand name and product quality) areas ethnocentric approaches were used by one-fifth and geocentric approaches by one-third of sample. IILM-GSM Global Marketing Management Framework of Global Marketing Management
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- 51. 07/05/10 51 Exploratory Research: EPRG A second exploratory study was undertaken to examine the conditions under which different EPRG marketing strategies are appropriate. The study was based on unstructured in-depth interviews with senior international marketing executives from 10 US corporations. Respondents were asked to describe their company’s current strategies, their planned strategies and their opinion concerning EPRG strategies. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 52. 07/05/10 52 Exploratory Research EPRG: The result of these interviews suggest that the: • Ethnocentric position appears most appropriate when the absolute or relative volume of overseas sales is insignificant. In these situations product modifications are generally viewed as uneconomic. “We simply can’t afford to produce different products for foreign buyers, …may not be justified by low anticipated revenue…and appropriate to export to countries with similar characteristics”. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 53. 07/05/10 53 Exploratory Research EPRG: Polycentric The result of these interviews suggest that the: • Most executives interviewed tended to regard the polycentric position as currently most desirable one. • Several executives felt that local nationals has a better understanding and awareness of national market conditions than home office personnel. “I don’t presume to tell the Germans how to sell to the German”. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 54. 07/05/10 54 Exploratory Research EPRG: Regiocentric The result of these interviews suggest that the: • Geocentric was viewed as entailing high costs in collecting information and administering policies on a worldwide basis. In this respect, the regiocentric appeal was generally viewed as more economical and manageable. • Because of the national huge differences, geocentric position may be more advantageous for production and research development than for marketing. IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 55. 07/05/10 55 Exploratory Research EPRG: Regiocentric In brief, the desirability of a particular international Orientation – E, P, R or G - seems to depend on several factors: • Size of the firm • Experience in overseas market • The size and degree of heterogeneity of the potential market • The nature of the product . IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 56. 07/03/15 56 Towards GLOCAL Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management Time Marketing Complexity Global Marketing GLOCAL Marketing International Marketing Exporting Domestic
- 57. 07/03/15 57 Companies in this case seek markets all over the world and sell products that are a result of planned production for markets in various countries. This generally entails not only the marketing but also the production of goods outside the home market. At this point company becomes an international or multinational firm. International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 58. 07/03/15 58 The experience of Fedders, largest manufacturer of air conditioners in the US, the firm faced constraints in the domestic market. • Its sales were growing steadily, but sales of air conditioners (the company’s only product) are seasonal and thus domestic sales at times do not even cover fixed costs. • Furthermore, US market is mature, with most customers buying only replacement units. Any growth would have to come from a rival’s market share, and the rivals, Whirlpool and Matsushita, are formidable. Fedders decided that only way to grow was to venture abroad. Fedders Experience in International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 59. 07/03/15 59 Fedders decided that Asia, with its steamy climate and expanding middle class, offered the best opportunity. China, India and Indonesia were seen as the best prospects. • China was selected because sales of room air conditioners had grown from 500,000 to over 4 million in five years, which still accounted for only 12% of the homes in cities like Beijing, Shanghai. • Finally, Fedders entered a joint venture with a small Chinese air conditioner company that was looking for a partner; new company, Fedders Xinle, was formed. Fedders Experience in International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 60. 07/03/15 60 The company immediately found that it needed to redesign its product for its market. • In China, air conditioners are a major purchase seen as a status symbol, not as a box to keep a room cool, as in US. • The Chinese also prefer a split-type air conditioner. • Since Fedders did not manufacture split models, it designed a new product that is lightweight, energy efficient, and packed with features such as remote control and automatic air- sweeping mechanism. Fedders expands into other markets and makes other commitments internationally. Fedders Experience in International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 61. 07/03/15 61 At this stage, companies treat the world, including their home market, as one market, offering a single standard product. • Market segmentation decisions are no longer focused on national borders. Instead, market segments are defined by income levels, usage patterns, or other factors that often span countries and regions. • In this case, more than half of its revenues coming from abroad. • The best people in the company begin to seek international assignments, and the entire operation- organization structure, sources of finance, production in low-cost location, marketing and so forth- begin to take on a global perspective. Ford Motor, Intel, IBM, Nestle are the best example. Global Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management
- 62. 07/03/15 62 Process of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management Motivation for International Marketing SWOT Analysis International Marketing Decisions Growth Profitability Risk Spread Access to Imported Inputs Uniqueness of Product/ Services Spreading R & D Costs
- 63. 07/03/15 63 Process of International Marketing IILM-GSM Global Marketing Management Framework of Global Marketing Management Enter International Markets International Marketing Decisions Market Identification & targeting Entry Mode Selection Product Decisions Distribution Channels Decisions Market Promotion Decisions Review Performance & Marketing Efforts
- 64. 07/05/10 64 Each value-adding activity is subject to internationalization; that is, it can be performed abroad instead of at home. The most typical reasons for locating value-chain activities in particular countries are to reduce the costs of R&D and production or to gain closer access to customers. IILM-GSM Internationalization of Firm’s Value Chain Stages in the Firm’s Value Chain R&D Procurement (Sourcing) Manufacturing Marketing Distribution Sales & Services Global Business Management Globalization
- 65. 07/05/10 65 The pharmaceutical firm Pfizer conducts R&D in Singapore, Japan and other countries to gain access to scientific talent or collaborate with local partner firms. IILM-GSM Internationalization of Firm’s Value Chain Stages in the Firm’s Value Chain R&D Procurement (Sourcing) Manufacturing Marketing Distribution Sales & Services Global Business Management Globalization
- 66. 07/05/10 66 Office furniture manufacturer Steelcase sources low-cost parts from suppliers in China and Mexico. Dell has business processes such as data entry, call centers and payroll processing performed in India. IILM-GSM Internationalization of Firm’s Value Chain Stages in the Firm’s Value Chain R&D Procurement (Sourcing) Manufacturing Marketing Distribution Sales & Services Global Business Management Globalization
- 67. 07/05/10 67 Genzyme Crop. Does much of the manufacturing and testing of its surgical and diagnostic products in Germany, Switzerland and the UK. Renault produces cars via low-cost factories in eastern Europe. IILM-GSM Internationalization of Firm’s Value Chain Stages in the Firm’s Value Chain R&D Procurement (Sourcing) Manufacturing Marketing Distribution Sales & Services Global Business Management Globalization
- 68. 07/05/10 68 BMW and Honda locate marketing subsidiaries in the US to more effectively target their vehicles to the huge US market. Carrefour and Barclays Bank establish worldwide networks of stores and offices to be near their customers. IILM-GSM Internationalization of Firm’s Value Chain Stages in the Firm’s Value Chain R&D Procurement (Sourcing) Manufacturing Marketing Distribution Sales & Services Global Business Management Globalization
- 69. 07/05/10 69 Wolverine World Wide, marketers of popular shoe brands ( e.g. Hush Puppies, Bates), contracts with independent retail stores abroad to reach its customers. IILM-GSM Internationalization of Firm’s Value Chain Stages in the Firm’s Value Chain R&D Procurement (Sourcing) Manufacturing Marketing Distribution Sales & Services Global Business Management Globalization
- 70. 07/05/10 70 Direct sales company such as Amway and Avon employ their own independent sales office in China, Mexico and elsewhere, in order to reach end-users. Toyota maintains sales & customer service operations abroad in order to meet customer requirements more effectively. IILM-GSM Internationalization of Firm’s Value Chain Stages in the Firm’s Value Chain R&D Procurement (Sourcing) Manufacturing Marketing Distribution Sales & Services Global Business Management Globalization
Editor's Notes
- #3: To arm or prepare in advance of a conflict The part of the arm between the wrist and the elbow.
- #7: Extension of techniques: In domestci mkting we make the strategy related to all the 4 mkting mix (CEO of Yahoo..his staement..we are working on only one P of marketing and succeed till now..no promotion, no placing –in sense of segmentation and no distribution) All we do environmental analysis like external and internal analysis external environment analysis tools are porter’s 5 force model, PEST or PESTEL analysis (environmental and legal) internal analysis tool are SWOT, BCG matrix, porter’s value chain etc 3. We alsoi do the SWOT analysis where SW are internal factor and OT are the external factors 4. Also take the STP related desion in the domestic market In Internaltioanl mking..we just expanding these techniques in the international competitive environment.
- #8: Conception, or a concept, is an abstract idea or a mental symbol…. In contrast to the definition of marketing only the word multinational has been added.[3] In simple words international marketing is the application of marketing principles to across national boundaries. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term.
- #9: Go to the makt..u will see thousand of chocolate brands…..thousand of brand s in textile and clothing….20 yaers back people move outside and brings few imporant goods while returing back but bn now a days…they almost come back with empthy hand ..reason is everything is available in this indian market
- #11: Before 1980..India situation were vey different from now…smugglers…bcz of high import duty almost 300% tax on imported goods My uncle were in dubai and while returing….they made the gold into the shape of coil ain order to put in the packet along with the coin…. But now 10..5 or almost 0 % ..means no need to do smuggling..in DUBAI special; FTZ is thesee with thopusand so f warehousing..there is no import duties
- #12: Almost all the imformation are available for everyone..and accessable from anywhere in the world..20 yaers back..the research scholar or PHD scholar were pputting the statement like,..lack of info available..now now they say huge amot of info avaliable which is again vey difficult to analyze..that the reason the corporate now a days looking for some one who is very sound in analyrtic skilss and data interpretsioan etc.
- #13: Single most important innovation of this century has been the microchip enabling the explosive growth of high-power, low-cost computing, enabling huge amounts of information to be processes by individual and firms. This has been accompanied by developments in satellite, optical fiber and wireless technologies resulting in communication revolution. In 1990 there were less than 1 million users of internet. The number had gone up to 655 million by 2002 and 1.12 billion users by 2005. The internet and world wide web are the information backbone of the global economy. The value of web-based transaction rose to $657 billion in 2000 from virtually nothing in 1994, to $6.8 trillion by 2004. These transactions include both business to business and B2C or e-commerce. Major innovation in transporation technology since world war II are development of commercial jet aircraft and super-freighter, and introduction of containerization, which simplifies transshipment from one mode of transport to another and lowering the cost of shipping goods over long distances.There has also been an increase in the share of cargo travelling by air as a result of improvements in air travel..
- #14: Single most important innovation of this century has been the microchip enabling the explosive growth of high-power, low-cost computing, enabling huge amounts of information to be processes by individual and firms. This has been accompanied by developments in satellite, optical fiber and wireless technologies resulting in communication revolution. In 1990 there were less than 1 million users of internet. The number had gone up to 655 million by 2002 and 1.12 billion users by 2005. The internet and world wide web are the information backbone of the global economy. The value of web-based transaction rose to $657 billion in 2000 from virtually nothing in 1994, to $6.8 trillion by 2004. These transactions include both business to business and B2C or e-commerce. Major innovation in transporation technology since world war II are development of commercial jet aircraft and super-freighter, and introduction of containerization, which simplifies transshipment from one mode of transport to another and lowering the cost of shipping goods over long distances.There has also been an increase in the share of cargo travelling by air as a result of improvements in air travel..
- #15: Single most important innovation of this century has been the microchip enabling the explosive growth of high-power, low-cost computing, enabling huge amounts of information to be processes by individual and firms. This has been accompanied by developments in satellite, optical fiber and wireless technologies resulting in communication revolution. In 1990 there were less than 1 million users of internet. The number had gone up to 655 million by 2002 and 1.12 billion users by 2005. The internet and world wide web are the information backbone of the global economy. The value of web-based transaction rose to $657 billion in 2000 from virtually nothing in 1994, to $6.8 trillion by 2004. These transactions include both business to business and B2C or e-commerce. Major innovation in transporation technology since world war II are development of commercial jet aircraft and super-freighter, and introduction of containerization, which simplifies transshipment from one mode of transport to another and lowering the cost of shipping goods over long distances.There has also been an increase in the share of cargo travelling by air as a result of improvements in air travel..
- #17: The company who is have very very big assets like..technology know how, intellectuals assets, good CG ect wants to be ahed in this gloobal market…they want to be ahed of the competition so they are trying to take part in international marketing ..in order to become no 1 in the world.
- #18: Talking abt asian paints.. Four persons (H. Choksey, C. Choski, S.C.Dani and A.Vakil) started this company way back in 1942 as a partnership firm. In 1945 it was converted into a private limited company under the name of Asian Oil and Paint Company Private Limited. In 1965 the name was changed to Asian paints (India) Private Limited (APIL). In 1973 it was converted into a public limited company. In 1957 it set up its first plant in Bhandup.maharastra and..kasna…compnay started exporting to near by countries after (1962-1942)..after 20 years ..just a guess. Even the tata consulnatcy..statred getting the foreign assignbments and projects after the 6 years of initial operations in india
- #19: Different interest rate,..in swisss..bank charging money..instead of giving interest rate in asaving account In taxation..custom union have different taxation system in comapre to free rtrade zone..remember tax system for outside member… Cultural barriers..shaking heads, exchanging cards, eating habits, singapore..electronic city (some part of that area they named as flag city who specailly the asian lives..asian have their residence they named as flag city..why? Ask to students, dry colth outside..indian or asian cultural mindsets..they do have other electronic options of drying )
- #21: Political risk…micro and macro..macro..inflation or loss of IPRS….micro is increased taxation Eurasia Group, a political and economic risk analysis firm, has composed Global Political Risk Index (GPRI). Technologu stolen risk in licencing…firm prefer FDI if good innovation…also in joint venture or strategic allainces..risk are high if right partner not selected..from intel top 10 technology risks.one of them is 7. Using illegal, unauthorized, pirated, or shared software…if u r working in india..its ok..but inbetween u went for onsite project for 2 weeks in US..ur company will be going to face legal issues and u will be in bad situations..be sure..even IT risk management can be considered a component of a wider Enterprise risk management system Social cultural risk..risk of loosing the values and ethics…(discuss daimler case this in next slide..corporate culture..case of failure of daimler and chrysler in 2007...formed in 1998..known as a marriage of equals..read the articles also....chryser from USA and daimler from germany (Daimler preferring to operate a classic bureaucracy and Chrysler traditionally giving decision-making ability to managers lower in the ranks”. )).many negotioans fails because of cultural values differences…many feels westernatzation is not good for our indian culture..i was shocked at many instances in europe..but one major one..i remember…father mother and daughter enjoyed their evening in one restaurant and when we gave a single bill they requested us to give separate bills..i was shocked..infact I may conclued that..europen they do not have any culture..and they are trying to learn the culture from asian and indians..shahruk khan is very famous in europe ..and the CD of movie DDLG…is available in almost all 14 europen languages.. Legal…law ..like Islamic law, also called theocratic law, is derived from the interpretation of the Quran and teaching of Prophet Mohammed. The word Islam translates into English as ‘submission’ or ‘surrender’. Among the unique aspects of Islamic law is the prohibition of paying or receiving interest. “Followers of Islam and their financial institutions have had to develop alternative financial arrangements to source and finance capital. Businesses often rely on leasing arrangements, rather than borrowing money, in order to obtain fixed assets. In Iran, banks often charge up-front fees that act as a substitute for interest payments, and depositors receive shares of bank instead of interest payments”. Economic risk…like inflation or hyper inflation…The possibility that an economic downturn will negatively impact an investment. For example, launching a luxury product immediately before or during a recession carries a great deal of economic risk. Economic risk is closely related to political risk as government decisions impacting the economy may also affect an investment. For example, a central bank may raise interest rates or the legislature may raise taxes, and this may result in economic conditions impacting an investment. In economics, hyperinflation is inflation that is very high or "out of control“.. International Accounting Standards Board, which describes it as "a cumulative inflation rate over three years approaching 100% (26% per annum compounded for three years in a row)", to Cagan's (1956) "inflation exceeding 50% a month." [2] As a rule of thumb, normal monthly and annual low inflation and deflation are reported per month, while under hyperinflation the general price level could rise by 5 or 10% or even much more every day…case in Zimbambe See the content of http://www.allaboutrisk.com/
- #22: Case of failure of daimler and chrysler read the article …impeccable means unexceptionable. Their english were very good..according the article Any organization consists of its structures,polices,and corporate Culture. “the shared experiences,stories,beliefs and norms that characterize an organization” What happens when companies with clashing cultures enter a joint venture or merger in ineternatioanl business? Daimler-Benz AG (Germany makes mercedies benz) and Chrysler Corp (US). merged in 1998 to form DaimlerChrysler. Executives from both companies thought a host of synergies would enable DaimlerChrysler to swiftly build global automotive empire.Fundamental differences in the way the two corporations did business, however, contributed to early departures by executives, a stock price slide, management restructuring, and even considerable losses by the American manufacturer. The two companies had contrasting management styles, Daimler preferring to operate a classic bureaucracy and Chrysler traditionally giving decision-making ability to managers lower in the ranks”.
- #24: raison de etre means reason for existance Drives for MBA or PHD program is the avability of necessary support like Good financial condition, reratives support, family members are in good educational background But the final motiv of Mba is to become a good manager in corporate with good income and social status or recognation etc
- #25: Optimum utli..results in econimc of scale ..as we seen the case of matsushita first they came with VHS video home system format and…
- #26: Many large US companies have done very well because of other overseas customers..IBM and Compaq..sell more computers abroad than at home. Coca cola always emphasize the importance of overseas markets…international sales account for more than 80% of the firm’s operating profits..like infosys also 98% revenure generated from foreign assingments and projects Market motives take two different forms…… Case of IKEA..since sweedish market was very small..they stareted fiart in all europe then north american market then some asia pacific and middle east like dubai and still..not enterde to indian market..
- #27: vertical integration (Backward & Forward) Strategy is all about long term planning for the sustainable profit and growth of a company Case of toyota..campany got huge market in late mover advantage…. In forward or back.integration..acquring means getteing the decision making power in own hand…not necessary complete acquision or merger Horizontal integration acquring the competitors…is not the case in strategic motives..
- #32: Just like we studied different levels of regional economic integration strating with pta..ftz..and…
- #33: For a manufacturing firm..might be the case of disposing the additional unit outside..a case of dumping…(selling in foreign at a price lower than the home market)..strategy somewhat neraer to the international strategies…but polycentric is multidomestic..regio & geo is similar to global strategy… Check for nissan..i found in whole europe 60-70 % market share acquired by the nissan. Nissan Motor Company, Ltd.Website www.nissan-global.com Nissan Motor Company, Ltd. (Japanese: 日産自動車株式会社, Nissan Jidōsha Kabushiki-gaisha?) (TYO: 7201), shortened to Nissan, is a multinational automaker headquartered in Japan. It was formerly a core member of the Nissan Group, but has become more independent after its restructuring under Carlos Ghosn (CEO). It formerly marketed vehicles under the "Datsun" brand name and is one of the largest car manufacturers in the world. As of August 2009, the company's global headquarters is located in Nishi-ku, Yokohama. In 1999, Nissan entered a two way alliance with Renault S.A. of France, which owns 43.4% of Nissan while Nissan holds 15% of Renault shares, as of 2008. The current market share of Nissan, along with Honda and Toyota, in American auto sales represent the largest of the automotive firms based in Asia that have been increasingly encroaching on the historically dominant US-based "Big Three" consisting of GM, Ford and Chrysler. In its home market, Nissan is the third largest car manufacturer, with Honda being second by a small margin and Toyota in a very dominant first. Along with its normal range of models, Nissan also produces a range of luxury models branded as Infiniti. The Nissan VQ engines, of V6 configuration, have been featured among Ward's 10 Best Engines for 14 straight years. The pronunciation of its name is different in different markets. In the U.S., the brand is pronounced /ˈniːsɑːn/, while in the UK it is /ˈnɪsæn/. In Japanese, it is [nisːaɴ].
- #35: Use the business function of the value chain …in order to expain decision making related to the strategy.all the s/w company or indian mnc..customize the user interface of the s/w according to the local need and preferences Big real estate gaint if make the infrastucte or housing in dubai ..it will be different from india…they will be having centarlized AC …no house without the AC In europe no house without the room heater or boiler
- #36: Few cosmatic products from P & G…few fmcg food products will come under this… Example..regiocentric approach of hiring..selects the candidates from a particluar region like asian ..european .. The theory behind this selection process is that nationals of the region in which operations actually take place are better able to deal with language and cultural problems than are managers from outside the region. Company used to develop..unique integrated regional strategy… Cosmetic companies do the customeization according to the region wise bcz of the same kind of climate and weathe situation…. Fair and lovely in india…lookd beautiful But in africa Dark and Lovly …makes them otr african women beautiful NAFTA 3 and EU 27 countries till 31 dec 2010
- #37: Map thsees four philosophy with the strategirs..if they alreay taugnt in IBM. Multidomestic…is ploycentric… International is close to ethenocentric Global is geocentric and little bit regiocentric
- #40: Economic Recession ... 1970′s Oil Crisis ... In October of 1973 OPEC (oil producing and exporting countries) stopped exports to the US and other western nations to The first human-made object to reach the surface of the Moon was the Soviet Union's Luna 2 mission on 13 September 1959.[3] The United States's Apollo 11 was the first manned mission to land on the Moon on 20 July 1969. National Aeronautics and Space Administration The goal of the program was accomplished with only two major setbacks. The first was the Apollo 1 launchpad fire that resulted in the deaths of astronauts Gus Grissom, Ed White and Roger Chaffee. The second was an in-space explosion on Apollo 13, which badly damaged the spacecraft on the moonward leg of its journey. The three astronauts aboard narrowly escaped with their lives, thanks to the efforts of flight controllers, project engineers, backup crew members and the skills of the astronauts themselves. NASA's Apollo Program landed the first humans on Earth's moon. US President John F. Kennedy announced his support for a manned moon landing on May 25, 1961 (in his speech in congress he announced the mission of moon landing on May 1961, but apollo 11 , Apollo 11 was the spaceflight which landed the first humans, Neil Armstrong and Edwin "Buzz" Aldrin, Jr, on Earth's Moon on July 20, 1969, at 20:17:39 UTC. The United States mission is considered the major accomplishment in the history of space exploration.) , as part of a special address to a joint session of Congress: ... I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth. No single space project in this period will be more impressive to mankind, or more important in the long-range exploration of space; and none will be so difficult or expensive to accomplish.[1] Kennedy's goal was accomplished during the Apollo 11 mission on July 20, 1969 with the landing of astronauts Neil Armstrong and Buzz Aldrin, while Michael Collins orbited above. Five subsequent Apollo missions also landed astronauts on the Moon, the last one in December 1972. In these six Apollo spaceflights twelve men walked on the Moon. These are the only times humans have landed on another celestial body.[2] The Apollo program, specifically the lunar landings, has been called the greatest technological achievement in human history.[3][4] The Aérospatiale-BAC Concorde aircraft was a turbojet-powered supersonic passenger airliner, a supersonic transport (SST). It was a product of an Anglo-French government treaty, combining the manufacturing efforts of Aérospatiale and the British Aircraft Corporation. First flown in 1969, Concorde entered service in 1976 and continued for 27 years.
- #41: This is for selling of commercial jet airlines
- #44: Empirical research is a way of gaining knowledge by means of direct observation or experience. It is used to answer empirical questions, which must be precisely defined and answerable with data (e.g., "Does listening to vocal music during learning a word list have an effect on later memory for these words?"). Usually, a researcher has a certain theory regarding the topic under investigation. Based on this theory some statements, or hypotheses, will be proposed (e.g., "Listening to vocal music has a negative effect on learning a word list."). From these hypotheses predictions about specific events are derived (e.g., "People who study a word list while listening to vocal music will remember fewer words on a later memory test than people who study a word list in silence."). These predictions can then be tested with a suitable experiment. Depending on the outcomes of the experiment, the theory on which the hypotheses and predictions were based will be supported or not.
- #45: Branding..pricing..promotion..segmentaion..market research…product design, research and development, distribution etc
- #47: The result of the analysis suggest that….each orientation does appera to be perceived as a distinct orienattion
- #53: One executive states that… Similar characteritics like home country.
- #54: One executive at head office said that..
- #55: In breif, the desirability of a particular international orientation..E or P or R or G.---seems to depend to several factors: Size of the firm Experience in overseas market The size and degree of heterogeniety of the potential market The nature of the prodycut..product embedded in the life style or cultural patterns of the consumers may less susceptable to the develoment or global policies..like personal grooming prodcut or food may heve to modofied to suit differences in tastes.
- #56: In breif, the desirability of a particular international orientation..E or P or R or G.---seems to depend to several factors: Size of the firm Experience in overseas market The size and degree of heterogeniety of the potential market The nature of the prodycut..product embedded in the life style or cultural patterns of the consumers may less susceptable to the develoment or global policies..like personal grooming prodcut or food may heve to modofied to suit differences in tastes.
- #57: GLOCAL is global marketing with local focus Others are multidomestic and transnational strategy with high pressure of local customization….with low global integartion pressure GLOCAL is like transnational strategy Nestle is in Gloobal marketing.. Coca cola…pepsi are in international marketing P&G is in GLOCAL marketing…also GM, Volksvagen in GLOCAL With a global strategy, a standardized product is manufactured at a few low-cost location and then offered to the global market. As with international strategy, only limited customizing to suit the tastes of individual markets is allowed. Product standardization allows a firm to achieve huge global economies of scale which translates to lower costs and lower prices. When low price is accompanied by is quality, the firm has a very strong competitive advantage. AT&T is a typical company which pursues global strategy. Semiconductor industries often adopt Global Strategy. International strategy replicates certain features of the multi- domestic approach. As with multi-domestic strategy, the firm transfers its core competences to the foreign subsidiary so that it can reap the differentiation advantage. But certain core competencies in R&D, marketing and product development are centralized at home. All other operating decisions are decentralized (like multi-domestic strategy). The need for coordination is moderate. Limit customization of product offering and market strategy. Coco-Cola, Pepsi-Cola, pursue and international strategy. These firms follow worldwide product division structure. There is limited local responsiveness. \\\GLOCAL Firms pursuing transnational strategy yield to both the pressures – global integration and local responsiveness. The need for global integration creates pressures for centralizing some operating decisions (particularly production and R&D). At the same time, the need to be locally responsive creates pressures for decentralizing other operating decisions to subsidiaries (particularly marketing). Consequently, these companies tend to mix relatively high degrees of centralization for some operating decisions with relatively high degree of decentralization for others. These firms tend to operate with matrix type structures in which both product division and areas have significant influence.
- #58: Market motives take two different forms…… Strategy is all about long term planning for the sustainable profit and growth of a company
- #59: Market motives take two different forms…… Strategy is all about long term planning for the sustainable profit and growth of a company Formidable.. Arousing fear, dread, or alarm : the formidable prospect of major surgery. 2. Inspiring awe, admiration
- #60: Market motives take two different forms…… Strategy is all about long term planning for the sustainable profit and growth of a company
- #61: Split..with the unit containing the fan inside the room and the heat exchanger mounted on the walloutside.
- #62: McDonalds ..also global with local customization somewhere GLOCAL concept.
- #63: Ask to students to suggest the process involved in IM…imagine urself as a CMO chief marketing office of a domestic company..working from last 5 years successfully in indian market..suddendly you start thniking of ur business expansion outside the domestic market….
- #64: International mkiting decsion are STp and 4 Ps decsions