international marketing by dr. hjh. zainon hj. mat sharif [email protected] 03-87694497

INTERNATIONAL INTERNATIONAL MARKETINGMARKETING

ByBy

Dr. HJH. ZAINON HJ. MAT SHARIFDr. HJH. ZAINON HJ. MAT [email protected]

03-8769449703-87694497

International International MarketingMarketing

ContentContent– What is International Marketing? What is International Marketing? – Definition of International MarketingDefinition of International Marketing– What is Global Marketing?What is Global Marketing?– International Marketing EnvironmentInternational Marketing Environment– International Marketing CultureInternational Marketing Culture– International Market Entry Evaluation ProcessInternational Market Entry Evaluation Process– International Marketing CommunicationInternational Marketing Communication– International Marketing and PriceInternational Marketing and Price– International Marketing and ProductsInternational Marketing and Products– Advantages and Disadvantages of StandardizationAdvantages and Disadvantages of Standardization– International Marketing Issues and ChallengesInternational Marketing Issues and Challenges

What is International What is International Marketing?Marketing?

International marketingInternational marketing is is simply the application of marketing simply the application of marketing principles to more than one principles to more than one country. However, there is a country. However, there is a crossover between what is crossover between what is commonly expressed as commonly expressed as international marketinginternational marketing and and global global marketingmarketing, which is a similar term. , which is a similar term.

Definition Definition International International

MarketingMarketing At its simplest level, international At its simplest level, international

marketing involves the firm in making marketing involves the firm in making one or more marketing mix decisions one or more marketing mix decisions across national boundaries. At its most across national boundaries. At its most complex level, it involves the firm in complex level, it involves the firm in establishing manufacturing facilities establishing manufacturing facilities overseas and coordinating marketing overseas and coordinating marketing strategies across the globe. strategies across the globe.

Doole and Lowe (2001).Doole and Lowe (2001).


MarketingMarketing International Marketing is the International Marketing is the

performance of business activities performance of business activities that direct the flow of a that direct the flow of a company's goods and services to company's goods and services to consumers or users in more than consumers or users in more than one nation for a profit. one nation for a profit.

Cateora and Ghauri (1999) Cateora and Ghauri (1999)


MarketingMarketing International marketing is the International marketing is the

application of marketing application of marketing orientation and marketing orientation and marketing capabilities to international capabilities to international business. business.

Muhlbacher, Helmuth, and Muhlbacher, Helmuth, and Dahringer (2006)Dahringer (2006)


MarketingMarketing The international market goes The international market goes

beyond the export marketer and beyond the export marketer and becomes more involved in the becomes more involved in the marketing environment in the marketing environment in the countries in which it is doing countries in which it is doing business. business.

Keegan (2002) Keegan (2002)

What is Global What is Global Marketing?Marketing?

Global marketing refers to Global marketing refers to marketing activities coordinated marketing activities coordinated and integrated across multiple and integrated across multiple country markets. country markets.

Johansson (2000) Johansson (2000)


The result is a global approach to The result is a global approach to international marketing. Rather than focusing international marketing. Rather than focusing on country markets, that is, the differences on country markets, that is, the differences due to the physical location of customers due to the physical location of customers groups, managers concentrate on product groups, managers concentrate on product markets, that is, groups of customers seeking markets, that is, groups of customers seeking shared benefits or to be served with the shared benefits or to be served with the same technology, emphasizing their same technology, emphasizing their similarities regardless of geographic areas in similarities regardless of geographic areas in which they are located. which they are located.

Muhlbacher, Helmuth, and Dahringer (2006 Muhlbacher, Helmuth, and Dahringer (2006


Global/transnational marketing Global/transnational marketing focuses upon leveraging a focuses upon leveraging a company's assets, experience company's assets, experience and products globally and upon and products globally and upon adapting to what is truly unique adapting to what is truly unique and different in each country. and different in each country.

Keegan (2002)Keegan (2002)

International International Marketing Marketing

EnvironmentEnvironment PEST AnalysisPEST Analysis


EnvironmentEnvironment PESTPEST

– Political FactorsPolitical Factors– Economic FactorsEconomic Factors– Socio cultural FactorsSocio cultural Factors– Technological FactorsTechnological Factors– + Environment Factors, Legal + Environment Factors, Legal

Factors, Security Factors Factors, Security Factors PESTELSPESTELS

Processes

Principles

Pricing

Place

Physical Evidence

Policies

Positioning

People

Promotion

Product

Buyers Suppliers

Media

Consumers Investors

Regulations Legislators

10Ps10Ps


EnvironmentEnvironment An International PEST Analysis An International PEST Analysis

– International PEST Analysis would International PEST Analysis would consider:consider:

How easy will it be to move from purely How easy will it be to move from purely domestic to international marketing? domestic to international marketing?

Would your business benefit from inward Would your business benefit from inward foreign investment? foreign investment?

What is the nature of competition within each What is the nature of competition within each individual market, and how will companies from individual market, and how will companies from other nations compete when you meet with other nations compete when you meet with them head-to-head in unfamiliar countries? them head-to-head in unfamiliar countries?

Many other factors that are specific to your Many other factors that are specific to your organization or industry. organization or industry.


EnvironmentEnvironment PoliticalPolitical

– Is there any historical relationship between Is there any historical relationship between countries that would benefit or hinder countries that would benefit or hinder international marketing? international marketing?

– What is the influence of communities or What is the influence of communities or unions for trading? E.g. The European Union unions for trading? E.g. The European Union and its authority over European laws and and its authority over European laws and regulation. regulation.

– What kind of international and domestic laws What kind of international and domestic laws will your business encounter? will your business encounter?

– What is the nature of politics in the country What is the nature of politics in the country that you are targeting, and what is their view that you are targeting, and what is their view on encouraging foreign competition from on encouraging foreign competition from overseas? overseas?


EnvironmentEnvironment EconomicEconomic

– What is the level of new industrial growth? What is the level of new industrial growth? – What is the impact of currency fluctuations What is the impact of currency fluctuations

on exchange rates, and do your home on exchange rates, and do your home market and your new international market market and your new international market - share a common currency? - share a common currency?

– There are of course the usual economic There are of course the usual economic indicators that one needs to be aware of indicators that one needs to be aware of such as inflation, Gross Domestic Product such as inflation, Gross Domestic Product (GDP), levels of employment, national (GDP), levels of employment, national income, the predisposition of consumers to income, the predisposition of consumers to spend savings or to use credit, as well as spend savings or to use credit, as well as many others. many others.


EnvironmentEnvironment Socio-culturalSocio-cultural

– Culture, religion and society are of Culture, religion and society are of huge importance. huge importance.

– What are the cultural norms for What are the cultural norms for doing business? doing business?

– Will cultural norms impact upon your Will cultural norms impact upon your ability to trade overseas? ability to trade overseas?


EnvironmentEnvironment TechnologyTechnology

– Do copyright, intellectual property laws or Do copyright, intellectual property laws or patents protect technology in other patents protect technology in other countries? E.g. China and Jordan do not countries? E.g. China and Jordan do not always respect international patents. always respect international patents.

– Does your technology conform to local Does your technology conform to local laws? E.g. electrical items that run on non-laws? E.g. electrical items that run on non-domestic currents could be dangerous. domestic currents could be dangerous.

– Are technologies at different stages in the Are technologies at different stages in the Product Life Cycle (PLC) in various Product Life Cycle (PLC) in various countries? E.g. versions/releases of countries? E.g. versions/releases of software. software.


EnvironmentEnvironment Tariff and Non-Tariff Barriers Tariff and Non-Tariff Barriers

– Tariff barriersTariff barriers are charges imposed are charges imposed upon imports - so they are a form of upon imports - so they are a form of import taxation. This could mean import taxation. This could mean that your margins are reduced so that your margins are reduced so much that trading overseas becomes much that trading overseas becomes too unprofitable. However they are too unprofitable. However they are normally transparent and you can normally transparent and you can plan to take them into account.plan to take them into account.


EnvironmentEnvironment Non-tariff barriersNon-tariff barriers are trickier to spot. are trickier to spot.

Governments sometimes act in favour Governments sometimes act in favour of their own domestic industries rather of their own domestic industries rather than allow competition from overseas. than allow competition from overseas. Bureaucracy is a hurdle often Bureaucracy is a hurdle often encountered by exporting companies - encountered by exporting companies - it takes many forms and includes it takes many forms and includes unnecessary hold-ups and red tape. unnecessary hold-ups and red tape. Quotas are another form of non-tariff Quotas are another form of non-tariff barrier i.e. restricting the quantity of a barrier i.e. restricting the quantity of a product that can be imported into a product that can be imported into a particular country.particular country.


EnvironmentEnvironment SWOT AnalysisSWOT Analysis


EnvironmentEnvironment SWOTSWOT analysis is a tool for auditing an analysis is a tool for auditing an

organization and its environment. It is organization and its environment. It is the first stage of planning and helps the first stage of planning and helps marketers to focus on key issues. SWOT marketers to focus on key issues. SWOT stands for stands for – strengths, strengths, – weaknesses, weaknesses, – opportunities, and opportunities, and – threats. threats.

Strengths and weaknesses are Strengths and weaknesses are internal internal factors. Opportunities and threats are factors. Opportunities and threats are external external factors.factors.


EnvironmentEnvironment Five Force AnalysisFive Force Analysis


EnvironmentEnvironment Five Forces AnalysisFive Forces Analysis helps the helps the

marketer to contrast a competitive marketer to contrast a competitive environment. It has similarities environment. It has similarities with other tools for environmental with other tools for environmental audit, such as PEST analysis, but audit, such as PEST analysis, but tends to focus on the single, stand tends to focus on the single, stand alone, business or SBU (Strategic alone, business or SBU (Strategic Business Unit) rather than a single Business Unit) rather than a single product or range of products. product or range of products.


EnvironmentEnvironment Five forces analysis looks at five Five forces analysis looks at five

key areas namely:-key areas namely:-– the threat of entry, the threat of entry, – the power of buyers, the power of buyers, – the power of suppliers, the power of suppliers, – the threat of substitutes, the threat of substitutes, – and competitive rivalry.and competitive rivalry.

International International Marketing CultureMarketing Culture


CultureCulture is the way that we do is the way that we do things around here. Culture could things around here. Culture could relate to a country (national relate to a country (national culture), a distinct section of the culture), a distinct section of the community (sub-culture), or an community (sub-culture), or an organization (corporate culture). organization (corporate culture).


The The Terpstra and Sarathy Terpstra and Sarathy Cultural FrameworkCultural Framework helps helps marketing managers to assess marketing managers to assess the cultural nature of an the cultural nature of an international market. It is very international market. It is very straight-forward, and uses eight straight-forward, and uses eight categories in its analysis. categories in its analysis.


The Eight categories are The Eight categories are – Language, Language, – Religion, Religion, – Values and Attitudes, Values and Attitudes, – Education, Education, – Social Organizations, Social Organizations, – Technology and Material Culture, Technology and Material Culture, – Law and Politics and Law and Politics and – Aesthetics.Aesthetics.

International Market International Market Entry Evaluation Entry Evaluation

ProcessProcess How to Enter a Foreign Market.How to Enter a Foreign Market.

– The International Marketing Entry The International Marketing Entry Evaluation Process is a five stage Evaluation Process is a five stage process, and its purpose is to gauge process, and its purpose is to gauge which international market or which international market or markets offer the best opportunities markets offer the best opportunities for our products or services to for our products or services to succeed. succeed.


ProcessProcess– The five steps are Country The five steps are Country

Identification, Preliminary Screening, Identification, Preliminary Screening, In-Depth Screening, Final Selection In-Depth Screening, Final Selection and Direct Experience. and Direct Experience.


ProcessProcess


ProcessProcess Step One - Country IdentificationStep One - Country Identification Step Two - Preliminary Screening Step Two - Preliminary Screening Step Three - In-Depth Screening Step Three - In-Depth Screening Step Four - Final SelectionStep Four - Final Selection Step Five - Direct Experience Step Five - Direct Experience

Modes of EntryModes of Entry

How does an organization enter How does an organization enter an overseas market?an overseas market?– Here you will be consider modes of entry Here you will be consider modes of entry

into international markets such as the into international markets such as the Internet, Exporting, Licensing, Internet, Exporting, Licensing, International Agents, International International Agents, International Distributors, Strategic Alliances, Joint Distributors, Strategic Alliances, Joint Ventures, Overseas Manufacture and Ventures, Overseas Manufacture and International Sales Subsidiaries. Finally we International Sales Subsidiaries. Finally we consider the Stages of Internationalization. consider the Stages of Internationalization.

Modes of EntryModes of Entry

The InternetThe Internet ExportingExporting LicensingLicensing International Agents and International International Agents and International

DistributorsDistributors Strategic Alliances (SA)Strategic Alliances (SA) Joint Ventures (JV)Joint Ventures (JV) Overseas Manufacture or International Overseas Manufacture or International

Sales Subsidiary Sales Subsidiary


CommunicationCommunication Media Choices for International Marketing Media Choices for International Marketing

– Influences upon International Media Choice.Influences upon International Media Choice. There are a number of factors that will impact upon There are a number of factors that will impact upon

choice and availability of media such as:choice and availability of media such as: The nature and level of competition for marcoms The nature and level of competition for marcoms

channels in your target market. channels in your target market. Whether or not there is a rich variety of media in Whether or not there is a rich variety of media in

your target market. your target market. The level of economic development in your target The level of economic development in your target

market (for example, in remote regions of Africa market (for example, in remote regions of Africa there would be no mains electricity on which to run there would be no mains electricity on which to run TVs or radios). TVs or radios).


CommunicationCommunication The availability of other local resources to assist The availability of other local resources to assist

you with your campaign will also need to be you with your campaign will also need to be investigated (for example, sales people or local investigated (for example, sales people or local advertising expertise). advertising expertise).

Local laws may not allow specific content or Local laws may not allow specific content or references to be made in adverts (for example, references to be made in adverts (for example, it is not acceptable to show naked legs in it is not acceptable to show naked legs in adverts displayed in Muslim countries). adverts displayed in Muslim countries).

And of course a lot depends upon the purpose And of course a lot depends upon the purpose of the international campaign in the first place. of the international campaign in the first place. What are your international marketing What are your international marketing communications objectives? communications objectives?


CommunicationCommunication IssuesIssues

– LanguageLanguage– Design, symbolism and aesthetics Design, symbolism and aesthetics

sometimes do not transcend international sometimes do not transcend international boundaries boundaries

– CultureCulture– The manner in which people present The manner in which people present

themselves in terms of dress and themselves in terms of dress and appearance changes from culture to appearance changes from culture to culture. culture.


CommunicationCommunication Other factors that need to be Other factors that need to be

considered include:considered include:– The work ethic of employees and customers The work ethic of employees and customers

to be targeted by media. to be targeted by media. – Levels of literacy and the availability of Levels of literacy and the availability of

education for the national population. education for the national population. – The similarity or diversity of beliefs, religion, The similarity or diversity of beliefs, religion,

morality and values in the target nation. morality and values in the target nation. – The similarity or diversity of beliefs, religion, The similarity or diversity of beliefs, religion,

morality and values in the target nation. morality and values in the target nation. – The family and the roles of those within it The family and the roles of those within it

are factors to take into account. are factors to take into account.

Media Choices in Media Choices in International International Marketing Marketing

Personal selling Personal selling Advertising Advertising Other potential media would Other potential media would

include include – Web-based marketing Web-based marketing – International tradeshows, trade International tradeshows, trade

missions, sponsorship missions, sponsorship

International International Marketing and PriceMarketing and Price

Influences on pricing for Influences on pricing for international marketing.international marketing.– The cost of manufacturing, The cost of manufacturing,

distributing and marketing your distributing and marketing your product. product.

– The physical location of production The physical location of production plants might influence price. plants might influence price.

International International Marketing and PriceMarketing and Price– Of course fluctuations in foreign currencies Of course fluctuations in foreign currencies

affect pricing. Many companies are affect pricing. Many companies are benefiting from a relatively low US Dollar benefiting from a relatively low US Dollar price during the 2010s. This make imports price during the 2010s. This make imports to the United States expensive, but exports to the United States expensive, but exports relatively cheap to other nations. However relatively cheap to other nations. However fluctuations make it very difficult for fluctuations make it very difficult for companies to make long-term decisions - companies to make long-term decisions - such as building large factories in global such as building large factories in global markets i.e. costs of production are cheap markets i.e. costs of production are cheap today, but could be expensive in the future, today, but could be expensive in the future, impacting upon the price that your business impacting upon the price that your business is forced to charge. is forced to charge.

International International Marketing and PriceMarketing and Price– The price that the international The price that the international

consumer is willing to pay for your consumer is willing to pay for your product. product.

– Your own business objectives will Your own business objectives will influence price. For example, large influence price. For example, large international companies such as international companies such as Starbucks may operate at a loss in Starbucks may operate at a loss in some locations but still need a local some locations but still need a local presence in order to maintain their presence in order to maintain their economies of scale, as well as their economies of scale, as well as their reputation as a global player. reputation as a global player.


The price that competitors in The price that competitors in international markets are already international markets are already charging. charging.

Business environment factors Business environment factors such as government policy and such as government policy and taxation. taxation.


Grey MarketsGrey Markets– A business can expect problems with A business can expect problems with grey marketsgrey markets

where it trades across national boundaries. So if where it trades across national boundaries. So if Company Y is English it will trade in Stirling or Pound Company Y is English it will trade in Stirling or Pound notes. If it trades in the United States during the notes. If it trades in the United States during the 2010s, to be competitive it will need to sell at a 2010s, to be competitive it will need to sell at a reduced price in the US. However, there is little to reduced price in the US. However, there is little to stop an entrepreneur from traveling to the US, filling stop an entrepreneur from traveling to the US, filling up a transport container with products, which have up a transport container with products, which have been exported from Company Y in England, then been exported from Company Y in England, then returning them back to England and marketing the returning them back to England and marketing the same product at a lower price than Company Y is same product at a lower price than Company Y is willing to trade. This is an example of parallel trade, willing to trade. This is an example of parallel trade, which is legal - just. Therefore it is known as which is legal - just. Therefore it is known as grey grey marketingmarketing..


International Pricing ApproachesInternational Pricing Approaches– Export PricingExport Pricing - a price is set for by the - a price is set for by the

home-based marketing managers for the home-based marketing managers for the international market. The pricing international market. The pricing approach is based upon a whole series of approach is based upon a whole series of factors which are driven by the factors which are driven by the influences on pricing listed above. Then influences on pricing listed above. Then mainstream approaches to pricing may mainstream approaches to pricing may be implemented be implemented

International International Marketing and PriceMarketing and Price– Non-cash paymentsNon-cash payments - less and less - less and less

popular these days, non-cash popular these days, non-cash payments include counter-trade payments include counter-trade where goods are exchanged for where goods are exchanged for goods between companies from goods between companies from different parts of the World. different parts of the World.


Transfer PricingTransfer Pricing - prices are set - prices are set in the home market, and goods in the home market, and goods are effectively sold to the are effectively sold to the international subsidiary which international subsidiary which then attaches its own margin then attaches its own margin based upon the best price that based upon the best price that local managers decide that they local managers decide that they could achieve. could achieve.


Standardization versus Standardization versus adaptationadaptation - do you use a - do you use a standard, common approach to standard, common approach to pricing in each market, or do you pricing in each market, or do you decide to adapt the price to local decide to adapt the price to local conditions? conditions?

International International Marketing and Marketing and

ProductsProducts ProductProduct is a focal element of the is a focal element of the

marketing mix. marketing mix.

Marketing MixMarketing Mix


The The marketing mixmarketing mix is probably is probably the most famous marketing term. the most famous marketing term. Its elements are the basic, Its elements are the basic, tactical components of a tactical components of a marketing plan. Also known as marketing plan. Also known as the the Four P'sFour P's, the , the marketing mixmarketing mix elements are elements are price, place, product, and and promotion.


PricePrice– There are many ways to There are many ways to priceprice a a

product. Let's have a look at some of product. Let's have a look at some of them and try to understand the best them and try to understand the best policy/strategy in various situations.policy/strategy in various situations.


PlacePlace is also known as channel, is also known as channel, distribution, or intermediary. It is distribution, or intermediary. It is the mechanism through which the mechanism through which goods and/or services are moved goods and/or services are moved from the manufacturer/ service from the manufacturer/ service provider to the user or consumer. provider to the user or consumer.


ProductProduct– For many a For many a productproduct is simply the is simply the

tangible, physical entity that they tangible, physical entity that they may be buying or selling.may be buying or selling.


PromotionPromotion– Another one of the 4P's is Another one of the 4P's is

promotionpromotion. This includes all of the . This includes all of the tools available to the marketer for tools available to the marketer for 'marketing communication'. 'marketing communication'.


Physical EvidencePhysical Evidence is the is the material part of a service. Strictly material part of a service. Strictly speaking there are no physical speaking there are no physical attributes to a service, so a attributes to a service, so a consumer tends to rely on consumer tends to rely on material cues. material cues.


PeoplePeople– PeoplePeople are the most important are the most important

element of any service or element of any service or experience. Services tend to be experience. Services tend to be produced and consumed at the produced and consumed at the same moment, and aspects of the same moment, and aspects of the customer experience are altered to customer experience are altered to meet the 'individual needs' of the meet the 'individual needs' of the person consuming it.person consuming it.


ProcessProcess– ProcessProcess is another element of the is another element of the

extended marketing mix, or extended marketing mix, or 7P's.There are a number of 7P's.There are a number of perceptions of the concept of perceptions of the concept of process within the business and process within the business and marketing literature. Some see marketing literature. Some see processes as a means to achieve an processes as a means to achieve an outcome. outcome.


ProductsProducts When considering the nature of When considering the nature of

products and services in products and services in international marketinginternational marketing, the same , the same models apply such as: models apply such as: – Product Life Cycle (PLC) - products - products

could be at different points in the could be at different points in the PLC in various nations, possibly PLC in various nations, possibly creating new opportunities. creating new opportunities.


ProductsProducts– Ansoff's Matrix - market development - market development

could mean that an existing product is could mean that an existing product is marketed in a new international market. marketed in a new international market.

– Three Levels of a Product - marketers - marketers would consider the local market's need would consider the local market's need for core, actual and augmented for core, actual and augmented products. products.

– Internet Marketing and Product - how do - how do eMarketers make product decisions? eMarketers make product decisions?

Product Life Cycle Product Life Cycle (PLC)(PLC)


Introduction.Introduction.– The need for immediate profit is not The need for immediate profit is not

a pressure. The product is promoted a pressure. The product is promoted to create awareness. If the product to create awareness. If the product has no or few competitors, a has no or few competitors, a skimming price strategy is skimming price strategy is employed. Limited numbers of employed. Limited numbers of product are available in few product are available in few channels of distribution.channels of distribution.


Growth.Growth.– Competitors are attracted into the Competitors are attracted into the

market with very similar offerings. market with very similar offerings. Products become more profitable Products become more profitable and companies form alliances, joint and companies form alliances, joint ventures and take each other over. ventures and take each other over. Advertising spend is high and Advertising spend is high and focuses upon building brand. Market focuses upon building brand. Market share tends to stabilize.share tends to stabilize.


Maturity.Maturity.– Those products that survive the earlier Those products that survive the earlier

stages tend to spend longest in this phase. stages tend to spend longest in this phase. Sales grow at a decreasing rate and then Sales grow at a decreasing rate and then stabilize. Producers attempt to stabilize. Producers attempt to differentiate products and brands are key differentiate products and brands are key to this. Price wars and intense competition to this. Price wars and intense competition occur. At this point the market reaches occur. At this point the market reaches saturation. Producers begin to leave the saturation. Producers begin to leave the market due to poor margins. Promotion market due to poor margins. Promotion becomes more widespread and use a becomes more widespread and use a greater variety of media.greater variety of media.


Decline.Decline.– At this point there is a downturn in the At this point there is a downturn in the

market. For example more innovative market. For example more innovative products are introduced or consumer products are introduced or consumer tastes have changed. There is intense tastes have changed. There is intense price-cutting and many more products price-cutting and many more products are withdrawn from the market. Profits are withdrawn from the market. Profits can be improved by reducing can be improved by reducing marketing spend and cost cutting.marketing spend and cost cutting.

Issues and ChallengesIssues and Challenges

Problems with Product Life Cycle.Problems with Product Life Cycle.– In reality very few products follow such a In reality very few products follow such a

prescriptive cycle. The length of each stage prescriptive cycle. The length of each stage varies enormously. The decisions of varies enormously. The decisions of marketers can change the stage, for marketers can change the stage, for example from maturity to decline by price-example from maturity to decline by price-cutting. Not all products go through each cutting. Not all products go through each stage. Some go from introduction to decline. stage. Some go from introduction to decline. It is not easy to tell which stage the product It is not easy to tell which stage the product is in. Remember that PLC is like all other is in. Remember that PLC is like all other tools. Use it to inform your gut feeling.tools. Use it to inform your gut feeling.

Ansoff’s MatrixAnsoff’s Matrix



Market PenetrationMarket Penetration– Here we market our existing Here we market our existing

products to our existing customers. products to our existing customers. This means increasing our revenue This means increasing our revenue by, for example, promoting the by, for example, promoting the product, repositioning the brand, product, repositioning the brand, and so on. and so on.


Market DevelopmentMarket Development– Here we market our existing product Here we market our existing product

range in a new market. This means range in a new market. This means that the product remains the same, that the product remains the same, but it is marketed to a new but it is marketed to a new audience. Exporting the product, or audience. Exporting the product, or marketing it in a new region.marketing it in a new region.


Product DevelopmentProduct Development– This is a new product to be This is a new product to be

marketed to our existing customers. marketed to our existing customers. Here we develop and innovate new Here we develop and innovate new product offerings to replace existing product offerings to replace existing ones. Such products are then ones. Such products are then marketed to our existing customers. marketed to our existing customers.


DiversificationDiversification– This is where we market completely This is where we market completely

new products to new customers. new products to new customers. There are two types of There are two types of diversification, namely related and diversification, namely related and unrelated diversification. Related unrelated diversification. Related diversification means that we diversification means that we remain in a market or industry with remain in a market or industry with which we are familiar. which we are familiar.

The Three Levels of The Three Levels of a Producta Product


In order to actively explore the In order to actively explore the nature of a product further, lets nature of a product further, lets consider it as three different consider it as three different products - the products - the CORECORE product, the product, the ACTUAL ACTUAL product, and finally the product, and finally the AUGMENTEDAUGMENTED product. product.


The The CORECORE product is NOT the tangible, product is NOT the tangible, physical product. You can't touch it. physical product. You can't touch it. That's because the core product is the That's because the core product is the BENEFIT of the product that makes it BENEFIT of the product that makes it valuable to you. So with the car valuable to you. So with the car example, the benefit is convenience i.e. example, the benefit is convenience i.e. the ease at which you can go where you the ease at which you can go where you like, when you want to. Another core like, when you want to. Another core benefit is speed since you can travel benefit is speed since you can travel around relatively quickly.around relatively quickly.


The The ACTUALACTUAL product is the product is the tangible, physical product. You tangible, physical product. You can get some use out of it. Again can get some use out of it. Again with the car example, it is the with the car example, it is the vehicle that you test drive, buy vehicle that you test drive, buy and then collect.and then collect.


The The AUGMENTEDAUGMENTED product is the non- product is the non-physical part of the product. It usually physical part of the product. It usually consists of lots of added value, for consists of lots of added value, for which you may or may not pay a which you may or may not pay a premium. So when you buy a car, part premium. So when you buy a car, part of the augmented product would be the of the augmented product would be the warranty, the customer service support warranty, the customer service support offered by the car's manufacture, and offered by the car's manufacture, and any after-sales service.any after-sales service.

eMarketing ProducteMarketing Product


A - Online Extender A - Online Extender – An An Online ExtenderOnline Extender is an is an existing existing

businessbusiness that has a strategy whereby that has a strategy whereby it extends its marketing activities to it extends its marketing activities to the Internet. It could be any the Internet. It could be any traditional, terrestrial organization traditional, terrestrial organization that has historically grown through that has historically grown through using traditional channels of using traditional channels of distribution to get existing products, distribution to get existing products, brands, services or solutions to brands, services or solutions to market.market.


B - Online AlternativeB - Online Alternative– The The Online AlternativeOnline Alternative is a new is a new start-start-

upup that uses the Internet as an original that uses the Internet as an original channel of distribution to get products, channel of distribution to get products, brands, services or solutions, currently brands, services or solutions, currently available elsewhere, to market. Some available elsewhere, to market. Some segments may be better targeted with segments may be better targeted with this online alternative, for example this online alternative, for example remote or fragmented markets.remote or fragmented markets.


C and D - Online InnovatorsC and D - Online Innovators– Online Innovators come in two forms: Online Innovators come in two forms: – C - C - Online InnovatorsOnline Innovators are are existing existing

businessesbusinesses that see a benefit to launching that see a benefit to launching new and innovative products, brands, new and innovative products, brands, services or solutions online by leveraging services or solutions online by leveraging new technology. Existing businesses have a new technology. Existing businesses have a wealth of knowledge and learning that wealth of knowledge and learning that underpin their moves onto the Web. underpin their moves onto the Web. Remember, the Internet is not a business Remember, the Internet is not a business paradigm shift (at least not yet) and so paradigm shift (at least not yet) and so current business approaches are often current business approaches are often adapted for the Internet. Existing adapted for the Internet. Existing businesses have experience. businesses have experience.


– D - D - Online InnovatorsOnline Innovators are are start-upsstart-ups that seize the opportunity to launch that seize the opportunity to launch new and innovative products, new and innovative products, brands, services or solutions online. brands, services or solutions online. Despite not having as much Despite not having as much knowledge and learning as some of knowledge and learning as some of their competitors, they are flexible their competitors, they are flexible and can move much more quickly. and can move much more quickly. Start-ups often lack experience. Start-ups often lack experience.

Advantages of Advantages of Standardization Standardization

International uniformityInternational uniformity has its own has its own advantages. As people travel the World, advantages. As people travel the World, they can be assured that wherever they they can be assured that wherever they go the product that they buy from you go the product that they buy from you will be same and that it will have the will be same and that it will have the same, standard benefits. This could same, standard benefits. This could mean the components that they buy mean the components that they buy from you in different local markets as from you in different local markets as they themselves become global.they themselves become global.

Advantages of Advantages of StandardizationStandardization

Standardization Standardization reinforces reinforces positive consumer perceptionspositive consumer perceptions of your product. One of the payoffs of your product. One of the payoffs of great quality for a single product of great quality for a single product category is that the reputation of category is that the reputation of your product will help you sell more your product will help you sell more of it. Positive word-of-mouth pays of it. Positive word-of-mouth pays dividends for brand owners.dividends for brand owners.


Cost reduction will give Cost reduction will give economies of scaleeconomies of scale. . Since you are making large quantities or the Since you are making large quantities or the same, non-adapted product - you benefit from same, non-adapted product - you benefit from the advantages associated with manufacturing the advantages associated with manufacturing in bulk. For example, components can be in bulk. For example, components can be bought in large quantities, which reduces the bought in large quantities, which reduces the cost-per-unit. There are other benefits relating cost-per-unit. There are other benefits relating to economies of scale, including improved to economies of scale, including improved research and development, marketing research and development, marketing operational costs, lower costs of investment, operational costs, lower costs of investment, and in an age where trade barriers are coming and in an age where trade barriers are coming down - standardization is a plausible product down - standardization is a plausible product strategy.strategy.


Quality is improvedQuality is improved since efforts since efforts are concentrated upon the single are concentrated upon the single product. Staff can be trained to product. Staff can be trained to enhance the quality of the product enhance the quality of the product and manufacturers will invest in and manufacturers will invest in technology and equipment that can technology and equipment that can safeguard the quality of the safeguard the quality of the standardized product offering.standardized product offering.

Disadvantages of Disadvantages of StandardizationStandardization

Since the product is the same wherever you Since the product is the same wherever you buy it, buy it, it is wholly undifferentiatedit is wholly undifferentiated. It is not . It is not unique in anyway. This leaves the obvious unique in anyway. This leaves the obvious opportunity for a competitor to design a tailor-opportunity for a competitor to design a tailor-made, differentiated or branded product that made, differentiated or branded product that meets the needs of local segments. Of course meets the needs of local segments. Of course products have different uses in different products have different uses in different countries (for example cycling is a leisure countries (for example cycling is a leisure activity in some nations, and a form of activity in some nations, and a form of transport in others). Local markets have local transport in others). Local markets have local needs and tastes. Therefore by standardizing, needs and tastes. Therefore by standardizing, you could leave yourself vulnerable.you could leave yourself vulnerable.


Another problem with standardization is Another problem with standardization is that that it depends largely upon it depends largely upon economies of scaleeconomies of scale. With global . With global businesses, your business will businesses, your business will manufacture in a number of nations. manufacture in a number of nations. However, some countries implement However, some countries implement trade barriers (and yes - this includes trade barriers (and yes - this includes the USA and the European Union). If this the USA and the European Union). If this is the case, then localization and the is the case, then localization and the resultant adaptation is inevitable.resultant adaptation is inevitable.


What exactly do you intend to What exactly do you intend to standardize?standardize? Is your whole product Is your whole product 'experience' to be standardized? Do 'experience' to be standardized? Do you standardize customer service you standardize customer service and product support, marketing and product support, marketing communications, pricing, and communications, pricing, and channels of distribution? Then you channels of distribution? Then you have a standardized marketing mix - have a standardized marketing mix - surely this cannot benefit your surely this cannot benefit your businessbusiness

Strategy

Shared Values

Staffing

Systems

Skills

Structure

Style

VISION MISSION

Aligning the ‘7S’s is Aligning the ‘7S’s is Essential for Success Essential for Success

Dynamic 7S

Issues and ChallengesIssues and Challenges

PEST = PESTELSPEST = PESTELS SWOTSWOT PORTER FIVE FORCEPORTER FIVE FORCE CULTURE – language, manner, CULTURE – language, manner,

symbol, culturesymbol, culture 4 P’s = 10P’s4 P’s = 10P’s 4 M’s = 10M’s4 M’s = 10M’s 7 S’s7 S’s

international marketing by dr. hjh. zainon hj. mat sharif [email protected] 03-87694497

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