International marketing - Introduction

Overview of course

1. Competing in International Markets

Company – Pros and Cons

Industry – Competitive Advantage

Market – Consumer behavior

How to enter new Markets

Overview of course

2. Market Assessment and Development

International market research – Differences between domestic and international market research. Market segmentation and product positioning.

3

Overview of course

3. Managing International Marketing Programs

International branding and advertising

Product Adaptation – 4ps

International supply chain

4

• Global – Most of the world, presence on almost all continents.

• International – More than 1 country.• Domestic – Only home country.

Definitions

• International trade – Importing or exporting goods

• International Business – A company has international operations and production and becomes a Multinational Enterprise (MNE)

Definitions

Definition

• International marketing - the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.

Discussion

• How is the international marketing task different to domestic marketing?

8

The International Marketing Task

Exhibit 1.3

International Marketing Involvement - Stages

No Direct international Marketing

No Direct international Marketing

Infrequent internationalMarketing

Infrequent internationalMarketing

Regular internationalMarketing

Regular internationalMarketing

International Marketing

International Marketing

Global Marketing

Global Marketing

No Direct international Marketing – Reactive

• Products “indirectly” reach international markets

•Trading companies• International customers who contact firm

•Domestic distributors• Internet orders

Infrequent international Marketing – Reactive

• Caused by temporary surpluses so sales to international markets are made as goods become available

• Firm does not want to maintain continuous market representation

Regular international Marketing – Proactive

• Dedicated production capacity for international markets

• Strategy:–Firm employs domestic or

international intermediaries–Uses its own sales force or

sales subsidiaries

Regular international Marketing – Proactive

• Products are adapted for international markets as domestic demand grows

• Firms depend on profits from international markets

14

International Marketing – Proactive

• Fully committed and involved in international markets and international activities

• Production takes place on international land.

• E.g. Fedders - After lower U.S. sales they designed new types of air conditioner units for the Chinese market

Global Marketing – Proactive

• A global view on all aspects of the marketing mix

• Marketing mix - product, price, placement, and promotion (the 4 Ps)

• Market segmentation is now defined by income levels, usage patterns, or other factors that span the globe

• Features – How the product looks physically e.g. The chair is black and 1metre high.

• Benefits – What the product helps us with. E.g. The chair allows us to sit comfortably.

Definitions

• Standardized - more or less similar features and benefits of the product or service.

• Customized – A product made or adapted specifically for one person, group or country

Definitions

• Economies of scale - A cost advantage. The more of a good produced, the lower the per-unit fixed cost (e.g. the cost of building a factory) because these costs are shared over a larger number of goods

Definitions

• Product – Something which a person or company makes which I can touch. E.g. A pencil

• Service – Something which a person or company provides which I cannot touch. E.g. A night’s stay in a hotel.

Definitions

• What kind of standardized products or services can be sold all over the world?

• What features and benefits do these products or services have?

Discussion

• What technologies have helped to share similar ideas across the world?

• Do you think consumers tastes are becoming more similar or more different?

Discussion

International Business has grown since WW2

• Growth of the World Trade Organization.

• Growth of free trade agreements E.g. NAFTA, the EU, Korea-US FTA.

• The free market system has conquered – 3 billion new consumers E.g. China, India

• The growing impact of the Internet and TV.

Economies of Simplicity

• Theodore Levitt – 1983• Companies should grow by selling

standardized products all over the world

• “Gone are accustomed differences in national and regional preferences.”

• This idea lasted for a decade but consumers had trouble relating to homogeneous products.

25

Deciding on strategy

• Depending on the product and market, firms may pursue a global market strategy for one product but a local strategy for another product. E.g. P&G diapers- Global, detergents - Local.

Glocal

“Glocal” strategy  - A hybrid strategy combining both global and local aspects of business.

27

• What is the advantage of a global strategy?

• What is the advantage of a local strategy?

• Why does the lady from Pepsi like a Glocal strategy?

Video Discussion