international marketing

R. Ravi NairR. Ravi Nair

Part 1

COLONIZATION

GLOBALISATION

GLOCALISATION

Globalisation

Global Perspective

7

3. Economy

1. Competition

1. Competition

2. TechnologyPrice Product

Promotion Place orDistribution

6. Geography andInfrastructure

Foreign Environment(Uncontrollables)

7. Structure ofDistribution

3. Economy

5. Political-Legal

Domestic environment(Uncontrollables)

(Controllables)

2 .Technology

4. Culture

5. Political-Legal

4. Culture

Target Market

External Perspective

Anticipated barrier reduction

– regulatory and non-regulatoryWTO/Standards

/Quotas/Documentation

Growing integration of

economies/ societiesASEAN,NAFTA,EU,

Free Market Play

External External EnvironmentEnvironment

Results in potential for Wealth CreationResults in potential for Wealth Creation

Internal Perspective

Use of Technology & Hubs

First Mover Advantage

Market Saturation

InternalInternalEnvironmentEnvironment

Impetus to seek avenuesImpetus to seek avenues / potential for Wealth Creation potential for Wealth Creation

Emerging Market Scenarios

•Drivers

•Restrainers

•Emerging Trends

Drivers

• Disposable incomes increasing

• Demographics• Gen X & Y making their presence

across the globe• Accessability – TV, Internet• Convergence – western lifestyle

aspirations• More education/ western education• Emergence of middle/ rich class• Competition in market-niche• Global strategy/action. • Open vs Closed trade

Restrainers….

• Culture

• National controls

• Nationalism

• Trade blocks

• Open vs Closed

Economy

Emerging Trends….

Emergence of :

•technologies/ industries

•new markets

•new competitors

•goodwill

•importers turning exporters

Leveraging expertise….

Company Strategy,Structure,

and Rivalry

DemandConditions

Relatedand Supporting

Industries

FactorConditions

GovernmentGovernment

Source: Michael Porter, Source: Michael Porter, The Competitive Advantage of NationsThe Competitive Advantage of Nations

ChanceChance

Value Equation….

V =BP

Where:• V = Value• B = Perceived Benefits - Perceived Costs*• P = Price

* For example, switching costs

The Value Equation

Value for Customer

Maximising benefits for Company through value addition to the customer….

One’s One’s own cultureown culture

SocialSocialNormsNorms

Commn. Commn. stylesstyles

Background Background InformationInformation

BusinessBusiness PracticesPractices

AdaptabilityAdaptability Building Building RelationsRelations Commun.Commun.

Analysis Analysis of of

InformationInformation TeamworkTeamwork ListeningListening LeadershipLeadership

EmotionalEmotionalIntelligenceIntelligence

PersonalPersonal MotivationMotivation HumilityHumility Cultural Cultural

SensitivitySensitivityRiskRisk

TakerTaker

Knowledge

Skills Set

Attitude

Interlinkages - PersonnelEffective Global Manager

Interlinkages - Legal…

Legal Framework – laws impacting

on the transaction :

•Domestic laws (e.g. export laws,

foreign corrupt practices etc) and

•International laws (international

agreements, bilateral and

multilateral agreements, arbitration

etc.)

Interlinkages………financial

Financial….

Contractual

Typical issues in contractsTypical issues in contracts

•Incomplete clauses

•Misunderstanding

•Improper translation

•Differences in interpretation

•Failure to provide an arbitration

clause

•Using inappropriate forms

•Change orders/ variation clauses

Part 2

Can we go global??

Yes, if …

• Long term global commitment-purpose, vision

• Global market/ marketing information/ systems in place

• Critical mass of skill, resources, contacts, lines of finance

• Marketing culture-value• Handle change management,

chaos and innovation-for profitability

• Flexibility, responsiveness, ability to move quickly

Achieving Globality….

Strategic Focus

Do we compete?• PLC

• Overall size decreases or increases

• Increased share of existing market ???

• Enlarged customer size

• Grab share from competitors

• Selection of markets

Segmentation

• Segmentation basis

• Market size – rate of

growth

• Geography

• Economic and political

integration

• Language/ culture

• Competitive Position/

opportunity/ challenge

The organisation should be able to manage its market to be

SUCCESSFUL

Segmentation Issues

Where to go…

Right time to adapt

glocalisation strategy!!!

Identification of new global

segments

Geographic scope

Size and number of

segments

Global standard versus

nationally adapted products?

Competition Analysis

Differential advantage

•Superior position•Superior skills•Superior resources

Whatever the source of differential advantage, it must offer real value to the customer in that it meets his/her needs in a distinctive way, and is in some way better than the competition. It is the meeting point of the three C's of customer, competition and company resources.

Wage costs

Quality

Scale

Speed

Time

Variety

????

1960 1970 1980 1990 2000

Marketing Mix

Product Dimension

•Primary functions

•Secondary functions

•Quality characteristics

•Operation/

maintenance

•Image (for global

corporation)

•Compatibility

•Complements and

substitutes

Pricing

Types of Pricing

• Cost plus

• Market pricing

• Competitors

• Price skimming

• Market penetration

• Psychological pricing

• Differential pricing

• ‘Package’ pricing

Objectives

• Quick profits

• Market share

• Middleman

support

• Image

• What Else??

Investing in the Enablers of Growth

Product

Price/ Cost

Place

Promotion

ProcessesPeople/ Climate

“Sales over night” “Brand over time”

... Keeping the engine running

... Tactical

... Share of the market

... While changing the fan belt

... Putting the pitch before the product (Strategic)... Share of mind... Making the latent blatant

Positioning

Cultural Lens – Difference in International and National promotions

Promotions

Distribution Basics

On-time, In-place is a

vision of global

distribution

•Distribution is a process

•Channels are the

pathways

•Logistics is the

integrated management

of distribution

Retailing MarketEntry Strategy Framework

D

Organic

A

Chain Acquisition

C

Franchise

D

Joint Venture

Culturally CloseCulturally Close

Culturally DistantCulturally Distant

Difficult Difficult

to Enterto Enter

Easy Easy

to Enterto Enter

Market Entry Strategy

•Exporting

•Licencing

•Contract manufacturing

•Management contracting

•Joint ventures

•Subsidiaries

•Company acquisition

Typical Organization Structures

Typical textbook structure

Asia Division

US Division

EuropeDivision

• Centralization

• > Complexity

• Building in > flexibility

• Super national

marketing structures

The 7 S Framework

•Strategy itself - supported by

•Skills - what distinctive core tasks is the company good at

performing?

•Shared values - what is the culture of the company? What

behaviour or achievements are rewarded?

•Style - what is the management style?

•Staff - what are the people like? What is their educational or

business background? What is likely to motivate them? How is

their morale?

•Systems - what formal systems are in place that may help (or

hinder) implementation?

•Structure - what structures are in place that may help (or hinder)

implementation? Is there a flat management structure?

Evolution of a Global Enterprise

Stage 1: Global market assessment

Stage 2: Target market strategy,

strategy partnership and marketing

investment

Stage 3 : Marketing investment,

exporting, licensing

Stage 4: Investment in foreign

manufacturing and R&D

Stage 5: Integrated global

enterprise; serve global markets

with global resources PerformancePerformance

REVIEW ….REVIEW ….

RESTRATEGISE…RESTRATEGISE…

REIMPLEMENT……..REIMPLEMENT……..

Organizations should continuously evaluate, be sensitized and focus on international business by Extension, Adaptation and Creation

The RRR Concept

Assess products

and foreign

markets: choose

products and target markets

Setting objectives and goals

Choosing the entry mode: export,

contractual agreement

s, licensing,

joint ventures, strategic

partnership or

investment

Designing the

marketing plan:

productprice,

promotion, place and

probe

1 2 3 4

Targetmarket

Control system: monitor operations, revise or

fine tune entry strategy, and penetrate the

market

Entry operations

The RRR concept….a Continuous The RRR concept….a Continuous ProcessProcess

Once the organization evolves to a Once the organization evolves to a

global level, one can call the company a global level, one can call the company a

truly global company because by them, truly global company because by them,

they would ask where in the world do they would ask where in the world do

we:we:

•Locate manufacturing•Sell products•Hire skilled managers•Raise Capital•Procure our inputs•Conduct R&D for product development•Locate customer service, data entry and other labor intensive activities

Key Imperatives….

Key Success Factors

• Continuous commitment to the global market

• Cultural Quotient

• K.I.S.S

• Economies of scale

• Adaptability, flexibility and extension

• Legitimizing diversity

• Integrating coordinating independence

• Innovate new competitive but workable strategies

• CAGE

• Branding – Glocalisation

Takeaways

•Think Globally – Act Locally

•Collaborative Competition

•Barriers to Entry for new

entrants

•Know product

•Know market – the

battlefield

•Know Competition (the

enemy) and yourself

•Mega-marketing (Power &

Politics)

Thank You