Module 1 Lecture

7/21/2019 Module 1 Lecture

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The Scope and Challenges of

International Marketing

Module 1



Learning Outcome:

The student will understand:

•What is a Global Firm/Company

•Global Marketing Eolution

•Meaning o! Global Marketing

•Features o! Global Marketing

•Why !irms go Global"•#$ope o! Global Marketing

•Challenges o! Global Marketing

•E%&G Framework



AMA’s Defnition :

MarketingPlanningand

Executing

To createexchanges thatsatisfy individualand

organizationalObjectives



• Distinguishing Features of AMA’s Definition

1' (n$ludes nonpro!it and !or pro!it a$tiities

)' (n$ludes produ$ts* ideas* and seri$es

+' (n$ludes a$tiities that pre$ede and !ollow

the produ$tion pro$ess

,' (n$ludes the !our %-s and regards them ea$h

as e.ually important



Example Discussion

• Boeing Company: meri$a-s largest e0porter*is the most prominent e0ample'

Customers in more than 2 $ountries* and its

134*222 employees work in 52 $ountries'• Secret Recipe: #e$ret &e$ipe has established

its brand name in Malaysia6157* #ingapore*

%hilippines* ustralia* (ndonesia* Thailand*8runei* %akistan and Cambodia'



What is a

lo!al Compan"#$irm%

• (t is a business that operates all oer the worldand9

• Treats the world as one $ountry*

• o$ates in low wage $ountries*

• %ur$hases raw materials !rom $heapest $ountry*

• 8orrows !rom $heapest $ountry*

• Moes managers around*



Operates in more than one

country & captures R&D ,Production, Marketing,Financial advantages &

Reputation than theCompetitors

lo!al Compan"



Core Business StrategyCore Business Strategy

CountryCountry

AA

CountryCountry

BB

CountryCountry

CC

CountryCountry

DD

Develop CoreBusiness Strategy

nternationali!ethe Strategy

"lo#ali!e

the Strategy

lo!al Marketing E&olution



Deciding to goa#road

$hich marketto enter

%o to enter market

Decide marketing

program

Decide marketingorgani!ation

Major Decisions



Overview: Global Marketing

• Global marketers $onsider the world as their

market and di!!erent $ountry markets as

$omponents o! this world market

• Global mareting is simply mareting to

the entire !orl" an" "estroy the "ifferences

bet!een barriers an" meet the e#pectationsof $arieties of consumers all o$er the !orl"%



Introduction

• Marketing ; %ro$ess o! planning and

e0e$uting the $on$eption pri$ing* promotion anddistribution o! ideas*goods and seri$es to$reate e0$hanges that

satis!y indiidual andorgani<ation goals

• Global Marketing ; Fo$uses resour$es on

global marketopportunities and threats9the main di!!eren$e is thes$ope o! a$tiities be$auseglobal marketing o$$urs in

markets outside theorgani<ation-s home$ountry



lo!al Marketing: What It Is and

What It Isn't

Single Countr"

Marketing Strateg"

• Target market strategy• Marketing mi0

; %rodu$t

; %ri$e

; %romotion ; %la$e

lo!al Marketing

Strateg"

• Global market parti$ipation• Marketing mi0 deelopment

; , %-s: adapt or standardi<e"

• Con$entration o! marketing

a$tiities

• Coordination o! marketing

a$tiities

• (ntegration o! $ompetitie

moes



&he coor"inate" performance of mareting acti$ities to

create e#changes across countries that satisfy in"i$i"ual'

organi(ational ' an" societal objecti$es

Global Mareting is con"ucte" across countries )not

"omestic or foreign*

Global Mareting coor"inates acti$ities across "ifferent

country marets

Global Mareting shoul" be moti$ate" by in"i$i"ual'

organi(ational an" societal goals

Global Mareting



Standari(ation &ersus )daptation

• Globali(ation )Stan"ar"i(ation*

; =eeloping standardi<ed produ$ts marketed worldwide

with a standardi<ed marketing mi0 ; Essen$e o! mass marketing

• Global locali(ation )A"aptation*

; Mi0ing standardi<ation and $ustomi<ation in a way that

minimi<es $osts while ma0imi<ing satis!a$tion

; Essen$e o! segmentation

; Think globally* a$t lo$ally



Standardi(ation &ersus )daptation

Arabic

read rightto left

Chinese

“delicious/happiness”

The aces o Coca-Cola around the world



Defining lo!al Marketing

• > the $oordinated per!orman$e o! marketing a$tiities

to $reate e0$hanges a$ross $ountries that satis!y

indiidual* organi<ational * and so$ietal ob?e$ties• The @0!ord Aniersity %ress de!ines Global

Mareting as Bmarketing on a worldwide s$ale

re$on$iling or taking $ommer$ial adantage o! globaloperational di!!eren$es* similarities and opportunities

in order to meet global ob?e$ties'



lo!al Marketing* features+

Global Marketing is $ondu$ted a$ross

$ountries 6not domesti$ or !oreign7

Global Marketing $oordinates a$tiities

a$ross di!!erent $ountry markets

Global Marketing should be motiated by

indiidual* organi<ational* and so$ietal goals

Companies treat the world as one market



lo!al Marketing

• #ome o! the most su$$ess!ul $ompanies to

a$hiee global marketing in$lude auto

manu!a$turers su$h as Toyota* Ford* Donda*General Motors* and olkswagen'

• These $ompanies all started as small

entities in their own $ountries andeentually a$hieed su$$ess!ul global

implementation'



lo!al Marketing

• Global Marketing is more than ?ust e0porting goods to

another $ountry9 it is successful implementation of a

pro"uct into a foreign tra"e maret%• Marketing de$isions are made at the home !ront and sent

oerseas and e0pe$ted to sink or swim'

• The !oreign $ustomer is ery di!!erent !rom the domesti$

$ustomer' anguage barriers* $ustoms* paperwork* and

shipping $osts deter many $ompanies !rom be$oming

global entities'



Why consider going Internationalization/Global ?

• s the pro$ess o! in$reasing inolement in international

operations'

+hy consi"er going ,nternational-Global.

• To in$rease oerall $ustomer base'

• To o!!set seasonal !lu$tuations in lo$al markets

• To minimi<e risk o! losing market share to $lients who

themseles use internet to !ind goods / seri$es in

oerseas markets

• To o!!set in$reasing $osts o! doing business at home

• To gain prestige with $ustomers at home '



Wh" o lo!al%

• For A#based $ompanies* 53 o! sales

potential is outside the A#'

; bout 2 o! Co$aCola-s operating in$ome is

generated outside the A#'

• For Hapanese $ompanies* 43 o! potential is

outside Hapan'• For German and EA $ompanies*, o!

potential is outside Germany



Examples of lo!al Marketers• Co$aCola

• =aimlerChrysler

• M$=onald-s

• Toyota

• Ford

• Anileer

• Gillette

• (8M

• A#

• Germany

• A#

• Hapan

• A#

• AI/ Jetherlands

• A#

• A#

M D ld’ Gl b l M k ti



McDonald’s Global Marketing

Marketing Mix Standardization Localized

Product

Promotion

Place

Big Mac

Brand name

'dvertisingslogan ()m*oving t+

Freestanding

Bi Mac is

Mc'loo 3ikka potato#urger 4ndia5

Slang )Macca)s4'ustralia5

MakDo 4Philippines5

McJoy maga!ine,(%aaii Sur6ing %ula+promotion 47apan5

%ome delivery 4ndia5

Siss rail system diningcars

-8/90 Sit!erland



5

The International Marketing Task

Political/legalforces

Economicforces

1

2

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountry

market B

Environmentaluncontrollablescountrymarket C

Competitivestructure Competitive

Forces

Level ofTecnology

Price Pro!uct

Promotion Cannels of

!istribution

"eograpyan!

#nfrastructure

Foreign environment$uncontrollable%

&tructure of!istribution

Economic climate

Cultural

forces

'

()

*

+Political/

legalforces

,omestic environment$uncontrollable%

$controllable%



Wh" Should $irms Engage in

lo!al Marketing%• &o Sur$i$e an" Gro!

1' earn to satis!y $onsumers in dierse $onditions

)' Manage marketing tasks more e!!i$iently and

e!!e$tiely

+' %reent or $ounter $ompetitie atta$ks in more than

one market ,' E0pand $ustomer base to in$lude deeloped and

deeloping nations




lo!al Marketing%• &o Di$ersify /ro"uct an" Maret

/ortfolios an" ,mpro$e competiti$eness

1' E!!e$ts o! seasonal and $y$li$al

!lu$tuations in one market o!!set by others

)' =iersi!i$ation in$reases market si<e

and enhan$es e$onomies o! s$ale




lo!al Marketing%• &o Capitali(e on the Attracti$eness of A""itional

Country Marets

• E0pand market si<e by e0panding into other $ountries• Take adantage o! growing opportunities in Europe and

the %a$i!i$




lo!al Marketing%• &o 0perate +ithin a Global Maretplace

1' Goods* seri$es* $apital* te$hnology* and

labor are going global

)' &edu$ed goernment restri$tions are

a!!e$ting global marketing

+' 8ilateral and multilateral negotiations are

redu$ing restri$tions





Scope of lo!al Marketing

6$7 Establishing ?oint entures in !oreign $ountries

!or manu!a$turing and/or marketing9

6d7 @!!ering $onsultan$y seri$es and undertakingturnkey6type o! pro?e$t that is $onstru$ted by a

deeloper and sold or turned oer to a buyer in a

readytouse $ondition7 pro?e$ts abroad96e7 #ub $ontra$ting and $ounter trade9 and

6!7 (mportant !or e0port produ$tion9



Domestic and lo!al Marketing

Similarities:

#u$$ess depends upon satis!ying the basi$

re.uirements o! the $onsumers

(t is ne$essary to build goodwill in both the

market

&L= !or produ$t improement and

adaptation is ne$essary !or both the market'



Domestic and lo!al Marketing

Differences:

#oereign politi$al entities

=i!!erent legal system

=i!!erent monetary system

ower mobility o! !a$tors o! produ$tion

=i!!eren$es in market $hara$teristi$s

=i!!eren$es in pro$urement and do$umentation



Challenges of lo!al Marketing

• Market resear$h'

• Con$ept L idea generation'

• %rodu$t design'

• %rototype deelopment L test marketing

• %ositioning

• Choi$e o! brand name

• #ele$tion o! pa$kaging material* si<e and labelling



Challenges of lo!al Marketing

• Choi$e o! adertising agen$y

• =eelopment o! adertisement $opy

• E0e$ution o! adertisements

• &e$ruitment and posting o! sales !or$e

• %ri$ing

• #ales %romotion

• #ele$tion and management o! distribution $hannels'

• Consumer 8ehaiour



Management Orientations, E-.

frame/ork• Ethno$entri$

• %oly$entri$

• &egio$entri$

• Geo$entri$



Ethnocentric Orientation

• ssumes home $ountry is superior to the

rest o! the world9 asso$iated with attitudes

o! national arrogan$e and suprema$y

• Management !o$us is to do in host $ountries

what is done in the home $ountry

; #ometimes $alled an international compan"

; %rodu$ts and pro$esses used at home are used

abroad without adaptation



-ol"centric Orientation

• Management operates under the assumption

that eery $ountry is di!!erent9 the $ompany

deelops $ountryspe$i!i$ strategies ; #ometimes $alled a multinational compan"

; Company operates di!!erently in ea$h host

$ountry based on that situation• @pposite o! ethno$entrism



.egiocentric Orientation

• &egion be$omes the releant geographi$

unit 6rather than by $ountry7

• Management orientation is geared to

deeloping an integrated regional strategy

; European Anion

; JFT6Jorth meri$an Free Trade

greement7



eocentric Orientation

• Entire world is a potential market

• Managerial goal is to deelop integrated world

market strategies• lo!al companies sere world markets !rom a

single $ountry and tend to retain asso$iation

with a head.uarters $ountry

• Transnational companies sere global markets

and a$.uire resour$es globally9 blurring o!

national identity



Conclusion

• (nternational marketing is hard work'

• (nternational marketing is important work'

• (t $an enri$h you* your !amily* your $ompany*

and your $ountry'

• nd ultimately* when international marketing

is done well* by large $ompanies or small* the

needs and wants o! $ustomers in other landsare well understood* and prosperity and pea$e

are promoted along the way'



Thank ou

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Module 1 Lecture

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