International Business PGDBM 4th Sem.ppt
- 2. I. THE NATURE OF INTERNATIONAL MARKETING 1. INTRODUCTION TO INTERNATIONAL MARKETING « INTERNATIONAL MARKETING CONSISTS IN IDENTIFYING AND SATISFYING CONSUMER NEEDS ABROAD; BETTER THAN THE NATIONAL AND INTERNATIONAL COMPETITORS, UNDER THE CONSTRAINTS OF THE INTERNATIONALIZATION STAGE OF THE FIRM AND THE GLOBAL ENVIRONMENT. » (NATHALIE PRIME)
- 3. KEY ELEMENTS OF THE INTERNATIONAL MARKETING MIX Product Price Place Promotion -Product adaptation packaging and labeling translation of technical literature -Quality management -Licensing and contract manufacturing -choice of pricing strategy -Competitor analysis -Discount structures -Credit management -Delivery terms -costing and budgeting -International distribution -Control of agents -Export documentation -cargo insurance -Joint-ventures and subsidiaries -Advertising, public relations and sales promotion -Direct marketing -Control of salespeople -Translation of sales literature -Exhibiting -Marketing research
- 4. DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL MARKETING Domestic International Research data is available in a single language and is usually easily accessed Research data is generally in foreign languages and may be extremely difficult to obtain and interpret Business is transacted in a single currency Many currencies are involved, with wide exchange rate fluctuations Head office employees will normally possess detailed knowledge of the home market Head office employees might only possess and outline knowledge of the characteristic foreign markets Promotional messages need to consider just a single national culture Numerous cultural differences must be taken into account Market segmentation occurs within a single country Market segments might be defined across the same type of consumer in many different countries.
- 5. DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL MARKETING (CONTINUED) Domestic International Communication and control are immediate and direct International communication and control might be difficult Business laws and regulations are clearly understood Foreign laws and regulations might not be clear Business is conducted in a single language Multilingual communication is requires Business risks can usually identified and assessed Environments may be so unstable that it is extremely difficult to identify and assess risks Planning and organizational control systems can be simple and direct The complexity of international trade often necessitates the adoption of complex and sophisticated planning, organization and control systems
- 6. DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL MARKETING (CONTINUED) Domestic International Functional specialization within a marketing department is possible International marketing managers require a wide range of marketing skills Distribution and credit control are straightforward Distribution and credit control may be extremely complex Selling and delivery documentation is routine and easy to understand Documentation is often diverse and complicated due to meeting different border regulations Distribution channels are easy to monitor and control Distribution is often carried out by intermediaries, so is much harder to monitor Competitors’ behavior is easily predicted Competitors’ behavior is harder to observe, therefore less predictable New product development can be geared to the needs of the home New product development must take account of all the markets the product is
- 7. THEORY OF COMPARARATIVE COSTS. SUPPOSE THERE ARE TWO COUNTRIES A AND B AND THERE ARE TWO COMMODITIES WHEAT AND RICE. SUPPOSE A UNIT OF LABOUR PRODUCES 10 TONS OF WHEAT OR 20 TONS OF RICE IN COUNTRY A. THE SAME UNIT CAN PRODUCE 6 TONS OF WHEAT AND 18 TONS OF RICE IN COUNTRY B. ACCORDING TO THIS SITUATION COUNTRY A IS HAVING AN ABSOLUTE ADVANTAGE IN THE PRODUCTION OF BOTH COMMODITIES OVER B. BUT SHE IS AT A GREATER COMPARATIVE ADVANTAGE IN THE PRODUCTION OF WHEAT COUNTRY B IS AT A DISADVANTAGE IN BOTH. COMMODITIES THE COMPARATIVE DISADVANTAGE IS LESS THAN CASE OF RICE. HENCE THE RATIO WOULD BE IN A IT IS 10 : 20 I.E. 1 : 2 IN B IT IS 06 : 18 I.E. 1 : 3 THEREFORE, A WILL SPECIALIZE IN WHEAT AND B IN RICE AND INTERNATIONAL TRADE WILL BECOME POSSIBLE AND PROFITABLE. THIS IS THE LAW OF COMPARATIVE ADVANTAGE OR COSTS. 7
- 8. THEORY OF COUNTRY SIZE 8 The theory of country size holds that because countries with large land areas are more apt to have varied climates and natural resources, they are generally more nearly self- sufficient than smaller countries. Transport Costs Although the theory of absolute advantage ignored transport costs, these costs affect large and small countries differently. countries also may be compared on the basis of their economic size.
- 9. COUNTRY SIMILARITY THEORY(STEFFAN LINDER) • DEVELOPED COUNTRIES TRADE MORE WITH DEVELOPED COUNTRIES: • COUNTRIES IN SAME CULTURAL MILIEU TRADE MORE AMONGST THEMSELVES: • COUNTRIES IN SIMILAR GEO-FEATURES TRADE INTER SE MORE: • COUNTRIES WITH SIMILAR POLITICAL AND ECONOMIC INTERESTS TRADE MORE INTER SE: • INTRA-INDUSTRY TRADE ABETTED BY SIMILARITY FACTOR 9
- 10. PRODUCT LIFE CYCLE THEORY 10
- 11. PHASES OF INETRNATIONAL MARKETING INTERNATIONAL MARKET INTERNATIONAL MODE OF SEGMENTATION TARGETING ENTRY SELECTION MACROENVIRONMENT INTERNATIONAL MARKET INTERNATIONAL RESEARCH 4PS MICROENVIRONMENT ORGANISATIONAL MOTIVATORS OBSTACLES FRAMEWORK COMPANY
- 12. PROCESS OF INT. MARKET SEGMENTATION IDENTIFICATION OF THE LEVEL OF THE MARKET TO BE SEGMENTED DETERMINATION OF THE VARIABLES USED FOR SEGM. CHOICE OF THE METHOD OF INT. MARKET SEGMENTATION IMPLEMENTATION OF INT. MARKET SEGMENTATION CHECKING THE VALIDITY OF RESULTS
- 13. GLOBAL SEGMENTS AGRARIAN HEARTLANDS BLUE COLLAR SELF SUFFICIENCY CAREER FOCUSED MATERIALISTS DE-INDUSTRIAL LEGACY EDUCATED COSMOPOLITANS FARMING TOWN COMMUNITIES GREYS, BLUES SEA, MOUNTAIN HARDENED DEPENDENCY INNER CITY MELTING POINT LOWER INCOME ELDERLY MIDSCALE METRO OFFICE WORKERS NON-PRIVATE RESIDENCES OLD WEALTH SHACK AND SHANTY
- 14. PSYCHOGRAPHIC SEGMENTATION FOR THE BEER MARKET • SPORTIVE • MASCULINE • TAKES NO RESPONSIBILITY • NO CONSERVATISM
- 15. INTERMARKETING SEGMENTATION • REGARDS THE WHOLE WORLD AS ONE MARKET • BASED ON (A) WELL SELECTED VARIBLE(S) WE CAN FIND GROUPS OF PEOPLE WHO HAVE SIMILAR BEHAVIOUR
- 16. IV. FACTORS THAT AFFECT CHOICE OF CHANNELS • THE “6 C’S” NEED TO BE CONSIDERED: • 1. COST • INVESTMENT COST OF DEVELOPING CHANNEL; AND COST OF MAINTAINING CHANNEL • 2. CAPITAL REQUIREMENTS • HOW MUCH CAPITAL IS REQUIRED • 3. CONTROL • HOW MUCH CONTROL IS DESIRED • EXAMPLE: COMPANY’S OWN SALES FORCE EXERTS MOST CONTROL VS. USING MIDDLEMEN
- 17. IV. FACTORS THAT AFFECT CHOICE OF CHANNELS (CONT.) • THE “6 C’S” NEED TO BE CONSIDERED (CONT): • 4. COVERAGE • FULL MARKET COVERAGE, OR TARGETED COVERAGE TO DENSELY POPULATED AREAS… • 5. CHARACTER • CHANNEL OF THE DISTRIBUTIONS SYSTEM MUST MEET THE “CHARACTER OF THE COMPANY” SEEKING TO DO BUSINESS • 6. CONTINUITY • WILL THERE BE LONGEVITY ISSUES • HOW TO BUILD LOYALTY WITH MIDDLEMEN IS MUCH MORE DIFFICULT THAN A COMPANY’S OWN SALES FORCE
- 18. CHALLENGES IN GLOBAL PROMOTION OVERCOMING THE LANGUAGE BARRIER IBM SLOGAN “SOLUTIONS FOR A SMALL PLANET” BECAME ▪ “SOLUTIONS FOR A SMALL WORLD ” IN ARGENTINA ENGLISH SLOGAN USED WORLDWIDE YOU AND US UBS ▪ OVERCOMING THE CULTURAL BARRIER IN SAUDI ARABIA ONLY VEILED WOMEN CAN BE SHOWN INTV COMMERCIALS POLITICAL SENSITIVENESS CADBURY KASHMIR ▪ ADVERTISEMENT “TOO GOOD TO SHARE”
- 19. SELECTING A GLOBAL ADVERTISING THEME STANDARDIZATION VERSUS CUSTOMIZATION(ADAPTATION) MERITS OF STANDARDIZATION – ECONOMIES OF SCALE, CONSISTENT IMAGE, GLOBALIZATION OF MEDIA, GLOBAL CONSUMER SEGMENTS. BARRIERS TO STANDARDIZATION – CULTURAL DIFFERENCES, ADVERTISING REGULATIONS, MARKET MATURITY, NIH(NOT INVENTED HERE)SYNDROME
- 20. INTERNATIONAL MARKETING AND EXPORTING INTERNATIONAL MARKETING IS MORE THAN EXPORTING, BECAUSE IT INVOLVES: • MARKETING PRODUCTS THAT HAVE BEEN MANUFACTURED OR ASSEMBLED IN THE TARGET COUNTRY • ESTABLISHING A PERMANENTS PRESENCE IN THE FOREIGN COUNTRY • LICENSING AND FRANCHISING • SOURCING COMPONENTS FROM FOREIGN STATES.
- 21. INTERNATIONAL AND MULTINATIONAL MARKETING INTERNATIONAL MARKETING MEANS MARKETING ACROSS NATIONAL FRONTIERS. MULTINATIONAL MARKETING MEANS THE INTEGRATED COORDINATION OF THE FIRM’S MARKETING ACTIVITIES THROUGHOUT THE WORLD.
- 22. 2. REASONS FOR MARKETING ABROAD ECONOMIES OF SCALE AND SCOPE EXISTENCE OF LUCRATIVE MARKETS IN FOREIGN COUNTRIES SATURATED MARKETS IN THE HOME COUNTRY HIGH R&D COSTS INTERNATIONAL OPPORTUNITIES LESS COMPETITION NEW TRADE AGREEMENTS …
- 23. 3. EXPORTING EXPORTING MEANS THE SALE IN A FOREIGN MARKET OF AN ITEM PRODUCED, STORED OR PROCESSED IN THE SUPPLYING FIRM’S HOME COUNTRY. TWO KINDS OF EXPORTING: PASSIVE AND ACTIVE
- 24. 3. EXPORTING (CONTINUED) SOURCES OF FOREIGN DEMAND (PASSIVE EXPORTING): • NON-AVAILABILITY OF APPROPRIATE PRODUCTS FROM DOMESTIC PRODUCERS • PRICE DIFFERENTIALS BETWEEN IMPORTED AND LOCALLY SUPPLIED ITEMS; • EXOTIC IMAGES ATTACHING TO FOREIGN PRODUCTS; • INEFFICIENCY OF LOCAL DISTRIBUTION SYSTEMS, POLITICAL DISRUPTIONS, INDUSTRIAL ACTION, OR OTHER FACTORS THAT PREVENT LOCAL FIRMS FROM SUPPLYING GOODS.
- 25. EXPORTING (CONTINUED) REASONS FOR ACTIVE EXPORTING: • THE PRODUCT HAS REACHED THE END OF ITS LIFE CYCLE AT HOME • LESS COMPETITION • EASY ACCESS TO MAJOR CUSTOMERS • EXPORT INCREASES TURNOVER.
- 26. EXAMPLE: MANCHESTER UNITED MUFC HAS MORE FANS ABROAD THAN AT HOME MERCHANDISING: CLOTHING, SHOES, SPORTS EQUIPMENT MANCHESTER UNITED MAGAZINE, MANCHESTER UNITED ON VIDEO TV CHANNEL - MUTV …
- 27. II. STRATEGIC CONSIDERATIONS IN INTERNATIONAL MARKETING STRATEGY MEANS CHOOSING A GENERAL DIRECTION FOR THE FIRM, TOGETHER WITH ORGANIZATIONAL DESIGNS, POLICIES, SYSTEMS AND A STYLE OF MANAGEMENT BEST SUITED FOR BEATING THE COMPETITION IN THE FIELD. TACTICS CONCERN PRACTICAL METHODS FOR IMPLEMENTING STRATEGIC DECISIONS.
- 28. 1. COMPETITIVE ADVANTAGE THE ELEMENTS OF COMPETITIVE ADVANTAGE ARE THE CRITICAL OFFER, THE SIGNIFICANT OPERATING FACTORS AND THE FIRM’S STRATEGIC RESOURCES. CRITICAL OFFER FEATURES STRATEGIC RESOURCES COMPETITIVE ADVANTAGE SIGNIFICANT OPERATING FACTORS
- 29. PORTER’S MODEL OF COMPETITIVE ADVANTAGE COST LEADERSHIP DIFFERENTIATION SPECIALIZATION
- 30. 2. THE COMPETITIVE ENVIRONMENT FACTORS: EASE OF ENTRY BY COMPETITORS INTO THE MARKET THE BARGAINING POWER OF CUSTOMERS THE BARGAINING POWER OF SUPPLIERS AVAILABILITY OF SUBSTITUTES LEVEL OF EXISTING COMPETITIVE PRESSURE
- 31. THE PORTER MODEL The Porter Model Availability of substitutes Bargaining power of Customers and suppliers Ease of entry Extent of inter-firm competition Competitive situation Profitability Market power Nature of competitive advantage
- 32. COMPETITION BETWEEN NATIONS The national diamond (Porter, 1990) QuickTime™ et un décompresseur sont requis pour visionner cette image. F i r m St ra t eg y , S t ruc t ure a n d R i v a l r y QuickTime™ et un décompresseur sont requis pour visionner cette image. De m a n d c o n d i t i o n s QuickTime™ et un décompresseur sont requis pour visionner cette image. F ac to r c o n d i t i o n s QuickTime™ et un décompresseur sont requis pour visionner cette image. Re l a t ed a n d supp o r t i n g i n dus t r i es C h a n ce G o v er n m e n t
- 33. 4. THE VALUE CHAIN PRIMARY ACTIVITIES: INBOUND LOGISTICS OPERATIONS - THE CONVERSION OF INPUTS INTO PRODUCTS OUTBOUND LOGISTICS - WHICH CONCERN DISTRIBUTION MARKETING AND SALES SERVICE ACTIVITIES
- 34. III. INTERNATIONAL MARKETING STRATEGY 1. THE FIVE STAGE MODEL STAGE 1: DECISION TO INTERNATIONALIZE STAGE 2: ANALYSIS OF INTERNATIONAL MARKETING ENVIRONMENT STAGE 3: ENTERING INTERNATIONAL MARKETS STAGE 4: INTERNATIONAL MARKETING PROGRAMME STAGE 5: IMPLEMENTING THE INTERNATIONAL MARKETING PROGRAMME
- 35. 2. INTERNATIONAL MARKETING PLANNING PLANNING MEANS LOOKING INTO THE FUTURE AND DECIDING TODAY WHAT TO DO IN THE FUTURE GIVEN PREDICTED OR INTENDED CIRCUMSTANCES.
- 36. ‘WHAT IF’ ANALYSIS MANAGEMENT ASKS THE QUESTION ‘WHAT WILL WE NEED TO DO IF IT HAPPENS?’ AND MAKES SURE THAT THE FIRM IS ADEQUATELY PREPARED FOR THE ENVIRONMENTAL CHANGE. ‘WHAT IF’ ANALYSIS RECOGNIZES COMPLEXITIES, DISCONTINUITIES AND UNCERTAINTIES OF THE REAL WORLD.
- 37. 4.CONTROL AND COORDINATION CONTROL: ESTABLISHING STANDARDS AND TARGETS MONITORING ACTIVITIES AND COMPARING ACTUAL WITH TARGET PERFORMANCE IMPLEMENTING MEASURES TO REMEDY DIFFERENCES
- 38. 4. COORDINATION AND CONTROL COORDINATION MEANS THE UNIFICATION OF EFFORT, I.E. ENSURING THAT EVERYONE WITHIN THE ENTERPRISE IS WORKING TOWARDS A COMMON GOAL. EFFECTIVE COORDINATION REQUIRES EFFICIENT CONTROL.
- 39. MECHANISTIC SYSTEMS OF CONTROL STANDARDIZATION OF ADMINISTRATIVE PROCEDURES FEEDBACK SYSTEMS (REPORTS) FACE-TO-FACE MEETINGS APPOINTMENT OF A FULL-TIME LIAISON MANAGER
- 40. CULTURAL SYSTEMS OF CONTROL CLEAR CORPORATE VISION AND MISSION; FREE-FOLLOWING COMMUNICATION BETWEEN THE WORKFORCE AND MANAGEMENT GOOD INTERNAL PR AND INTERNAL MARKETING GOOD INDUCTION PROCEDURES FOR NEW STAFF TO ADOPT THE CORPORATE CULTURE AT AN EARLY STAGE