Download International marketing

International marketing
Ing. Jiří Šnajdar
Mgr. Evžen Staněk
2013
• Main mistakes
• Innovation strategies
- Formal principles of marketing – methodical processes,
techniques – are is case of domestic and international
marketing identical (formal structure of marketing planning,
methodical process of creation of marketing strategy,
technique of market research, tools of marketing mix are
identical in national and international marketing).
In the game enter such factors, as are :
• public power in given country, which usually does not play
neither passive, not neutral role
• political risks bound with countries where wants a company
new operate.
Task of international marketing is also among others :
• to identify possible jeopardy and advantageous conditions
and integrate them
• international strategy of company´s development
• innovation behaviour of company is integral part of total
strategy and politics of a company.
New products and technologies can be base for future
growths of the company and for keeping of balanced product
portfolio.
But creation of new products is very demanding for
financial means and time and very risky.
Expenses for failure of new products are permanently
increasing. Innovation effort must be aimed oriented, it means
adapted to aims, which were marked out by the company as
general targets and marketing strategies.
To firms, that are not engaged in export, can the sale in
international scale seem as very complex activity,
demanding extensive sources and large and expensive
marketing team with large amount of products, that is sold.
But in fact it is not so.
But if the company is able to export much depends on
product´s price, quality and provided services.
Firm strategy - with consideration to way of trade and
provided services, endurance to develop export markets - is
really pivotal in this question, more than size a placement of
the firm.
• Technical details of trade with foreign countries differ
from those that are connected with domestic trade. Are
standardised and at disposal to everybody who are in the
interests.
• If you once get these knowledge, export is not more
complicated than sale on “domestic ground”.
• But researches show that many companies do at the
beginning of their activities on international market
many mistakes, that defend them to succeed.
Main mistakes in international marketing
1. Failure or intentional rejection of qualified export
counselling and processing of
main international marketing plan before starting the
export.
Management of non-exporting firms has big knowledge about
“his” industry branch and manufacturing process. When these
managers think over a possible export, bank on their
knowledge of industry characteristics and their company,
without fully comprehending and understanding of target
export markets.
Lack of knowledge leads inescapably to failure or to less
than optimal penetration on a market.
• From this reason it is necessary, that the company seeks
out qualified counselling and works out main marketing
before start of export.
• Qualified consultant can be expensive, but costs are
smaller than potential lost in case of failure.
Besides the firm should have, before start of trade on
international markets, worked out a good international
marketing plan.
• This plan provides tendency and direction and secures,
that export efforts will lead to the
market or market segments, that open up for the company
the biggest potential.
2) Insufficient effort of top management to get over the
initial difficulties and financial requirements of export.
Managers of almost each company will claim, that they are
resolute to develop export markets, so the company would
have benefit of it. But in practice are many managers
disappointed because they recognise that export operations
require more time and money than they expected.
- Before a success appears, the top management must
invest necessary time and funds to long-term activity.
3) Inconvenient mediator or distributor
Many firms starting with export think, that everything what is
necessary to successful export is agent or distributor on given
market.
Here the managers make a critical mistake when establish
with first agent, who “falls them into the hands”.
Choice of responsible agent or distributor it the most important
part of yours export efforts.
Agent of distributor should be chosen by firm on the base how
competent he is to satisfy the companies´ needs and not only
on the base of first contact.
4) Scramble for orders on the world instead of building
bases for profitable operations and proper growth.
• Many firms start to export so, that simply perform
requirements of customers, who contact the firm. After
some time this cycle of demands and reactions on it
becomes on side of the producer the only one activity, that
he will do in scope of export.
• Demand or order “from outside” is usually hard price
competitive and disadvantages exporters. Better approach
is market analysis and elaboration of marketing plan of
export.
• It enables to establish a place on the market and usually
this leads to accomplishment of higher profit range. This
process of acquaintance and planned growth should be
target of firm with starting export.
5) Failure of export when the market is expanding.
• Some managers are interested in exporting only when
domestic markets stagnate of are affect by recession.
Then they look for foreign markets, where they could place
production and increase utilisation of capacity. When
domestic market growths, these workers immediately forget
export until next decrease in domestic economic comes.
• To be successful, you must view the export markets the
same way like domestic markets.
Nothing destroys export markets so fast as reputation, that
you enter into and pull out without any evident reason.
6) Uneven approach to agents and distributors abroad
and to domestic business partners.
• It is necessary to negotiate with all distributors equally.
Many incipient firms think that they can make different
prices of their products on different markets.
• But this leads to small confidence of business partners and
in many cases also to direct
competition between individual distributors on export markets.
• If agent has a feeling that it is not negotiated with him
correctly, starts to represent someone else.
7) Unwillingness to change a product to conform to
regulations and preferences of other country.
Some managers deal with production process and prices at
the expense of understanding of market, where they deliver
goods.
Before starting export you must carefully analyse the market
and get acquainted with regulations and cultural differences of
the country.
Necessary modifications are often small, but can signify
difference between success and fail in export.
8) Forgetting of printing of usage instructions, sale and
guarantee conditions in local language.
•
Some companies do not understand how important is that
all written materials are understandable in language of
export market.
• If customers have possibilities, they choose certainly the
product, which looks it is produced for them.
9) Forgetting of cooperation possibilities with export
trade companies or other marketing mediator.
• When we thing over the possibilities of export you can get
to conclusion that you have insufficient sources as
personnel so financial to start export.
• Such a company should think over employ of one of
trade companies that would work for it as export
department.
• These mediators, even if they are usually not fully
effective, provide you with opportunities to start export and
take hold on the market.
10) Forgetting of possibility to provide a licence and
establish a joint-venture company.
•
If a company decides that export on given market is not
required, the management should find out whether the
company could assign a licence or production process to
given market.
•
It is also possible to establish joint-venture with other
company on given market.
Example :
• Firms McDonald´s and Coca-Cola unknowingly insulted the
whole Muslim world when used on their products symbols
from South Arabia flag. The flag contained also quotation
from Koran. Muslims hold an opinion that their sacred
writing must not be used at any business activities.
• - Firm Nike landed itself in Arabian countries in similar
situation. Muslims protested that its new trade mark, used
in stylised form on sport footwear, remarks in Arabian
writing the word Allah. Firm apologised and footwear was
withdrawn from distribution.
Innovation strategy
- Innovation strategy of a company is inseparable part of
total strategy and company´s politics. New
products and technologies can be the base for future
growth of the company and for holding of balanced
production portfolio.
- On the other hand, the creation of new products very
demanding on resources and time, and very risky.
• Innovation behaviour of companies should be oriented
to satisfy customers needs with appropriate products
• in required quality
• in exactly set time,
• with adequate expenses, prices.
On the other side must be directly oriented, it means adapted
to targets, that were marked out by the company as total
targets or marketing strategies.
When we accept as basic resource of creation of innovation
strategies and programmes the marketing concept of the
company, than it is necessary to define new products from
this view. To define new products in accordance with
marketing concept of the company means to consider as new
such products, that are new not only from view of the
company, but primarily from view of the market.
From view of the company and market can be consumable
and industrial products considered as new, if belonging to
some of following categories.
New technologies – absolute innovation
New technologies can be considered as the highest level
of invention and innovation changes forasmuch as require
the biggest change in consumer´s or user´s behaviour and
often join in replacement of existing products, also
products of company, which brings out the technologies.
(Thanks to technology Bluetooth arisen completely new
markets using cordless connection between two divides).
2. Following innovation
• Many completely new ideas, inventions bringing out
require following innovations, that enable that
products or technologies will better adjust to the
market and its requirements.
• These following innovations proceed also during life
cycle of product with aim of its improvement of
modification so, that could again catch the more
advantageous position on the market or in its segment.
(Thanks to today already known technology Bluetooth
thought out Indian Bluetooth researchers device for heart
monitoring. In case of heart attack is sent SMS to nearest
hospital).
3. New for the market
• Products in some cases must not be new for
consumer, bur can be new from marketing view, it
means new for some market or distribution
channels.
(For example sale of dishes that were designated only for
retail shops and end customers, in the hospitals etc.)
4. New for certain country
• Products or thoughts can be transformed also from
geographical view, it means from country of origin
to other country, territory etc.
(Delivery of hot pizza home broke through in our country in
the time when it was quite known in the world).
5. New category of products for company
• From marketing view it is necessary to take as new
also products, that company adds to its existing
production programme. Also here must products
present on the market with different marketing mix
than existing products.
(Famous car producer of trade mark Ferrari together with
the company Acer participated on development of new
monitors and LCD televisions).
6. New brand
• As new can be considered also products, that enter
the market with new mark also in case that it
concerns expansion or increasing of product line.
• Also such products must have its marketing plan, that
would situate them in correspondence with companies´
targets.
(Company Mittal Steel Ostrava Plc., as other firms from the
biggest steel group of the world, changes its logo and
introduces new mark Arcelon Mittal. Name of Ostrava´s
company Mittal Steel Ostrava Plc. stays the same for the
present, but its change is planned).
7. New situation, modification of product
• During life cycles are products often new situated
considering to competition and certain market
segment :
their characters, shape, colour, size, material
are so modified to get ahead on the same
market again, eventually in different market
segment, what brings also necessary
modification of marketing mix.
(Producer of vacuum cleaners of mark Dyson modified
vacuum cleaner without bags DC20 Animal Pro, that will
appreciate especially people who have allergy or for pets.
New filter suffice to wash up with warm water every three
months.)
8. New package
• Even change of packaging can cause that product is
understood by consumer as new without changing
any characters of product. Together with appropriate
advertising or other distribution and placement of
product in a shop can the packaging bring new
increase of sale.
(In correspondence with new packaging of ink patrons mark
Epson is changing also packaging of papers mark Epson.
On the front side of packaging will be in the future for
different qualities pictured the same motive, so it will be
facilitated the right choice of required product. Customer,
who needs for example new photo paper Premium Glossy,
will only look for packaging with tropical fish).
9. Products expanding or increasing product line
Expansion or increasing of product lines, for example
addition of new shape, size or colour means from
marketing and market view also presenting of new
product on the market, even if the marketing effort is
incomparably less than at presentation of new technologies,
also new innovations of existing products.
(At models of personal cars SX4 from production Magyar
Suzuki Corporation changed offered colours :
existing colour ZEE Ocean Light Blue Met. Will not be used
any more and will be replaced by new colour ZKC Lagoon
Turquoise).
- In conditions of competition is the base assumption for
keeping of firm position on the market methodical care
about introducing of new products on the market.
• In marketing strategy we understand product
innovations as processes of changing in company,
that are connected with product development.
We differentiate :
• subjective dimensions (new, for whom ?)
• dimensions of intensity (how much new ?)
• time dimensions (how long new ?)
Product variations are considered for the easiest and often
the most available elements of product marketing strategy.
They include for example changes of physical, function,
aesthetic and also symbolic characteristics of product,
pertinently changes of supplementary functions.
The target is the most attractive approach the reality of
product to customer´s vision, pertinently as appropriately as
possible to adapt the product to needs of appropriate
market segment.
Introducing of new products on the market
In contemporary practice of prosperous world firms are
used at management of production innovation process
“methods made-to-measure.” Effort to generalise them
leads to categorisation of these methods into following
stages :
1. Elaborating of innovation strategy
The target of innovation strategy is to define the most
presumptive ways of technical development in sphere of firm
activities and steps, that lead the firm to technical and
economical mastery of potential innovation themes.
2. Research and creation of themes
• Each product produces in form of idea. In this stage it
is initiation of formation of new themes for future
concentration of production programme of the company,
their selection and evaluation, leading to decision about
perspective development ways of product innovations.
• Effective system for searching of themes is in usage of
available information sources, following the development
in sphere of technique and technology, competition,
requirements of our customers, trends on world markets
etc.
3. Analysis of use of chosen themes on the market
“Business Analysis” represents the most important step at
evaluation of suitability of chosen innovation themes. A part
of evaluation is :
• preliminary evaluation of production and sales
opportunities (identification of market, the intended
product is allocated for, market tendencies, appraisal of
presumptive reaction of competition, detail market
analysis to appoint expected share on market, sales
ways etc.)
• evaluation of appraisal of expected returns
The target is to have continuously actualised overview about
expected returns (profit, profitability, available share on
market etc.)
This overview is necessary especially at decision about
releasing or not-releasing additional sources for product
development, for its market testing or advertisement before
introduction on market.
Actual data can lead also to decision to stop further
financing of the project at markedly disadvantageous
development.
4. Development
Proposals for products, that were evaluated as technically
practicable and commercial interesting, are handed over to
research and development department. It is an important step
from following reasons :
• It is first try to develop a product in actual form. Still
existed only an idea, thought, pertinently drawing or simple
model. Development stage means for a firm expenditure of
large cost, that probably exceed costs connected with
evaluation of proposal in previous stages.
• It this stage first appears if in the scope of given
limitations is possible to remodel chosen draft in real
product. If this is not possible to manage, than all still
expended costs are for the firm lost (with exception of
information obtained in previous innovation process).
5. Market testing
• Result of previous stage (Development) is a drawn up
manufacturing documentation, pertinently technically
sworn prototype.
• Also the producer already knows resultant technical
parameters of the product, knows usage of material and time
for its making, has relatively clear vision about costs on its
production.
•
Successful product must connect technological and
construction solutions with wishes and requirements of
consumers.
6. Commercialism
• In this stage it is fully introduction on the market – product
enters into competition conditions, where fully appears
how the producer accommodates the customers not only
with technical parameters of product, but also with its
design, price, packaging etc.
• Before product introducing on the market it is necessary
to do appropriate modifications of the product, of which
warned results of market testing and to think over what
elements of marketing mix and in what combination will
be used. (in consideration come different combinations of
price level, propagation costs, ways of distribution, sales
subvention etc.)
- Stage of commercialism belongs to financial more
demanding phases of complex conceived product
innovation. The producer must secure financial means for
performing of advertisement campaign, equipment by
necessary technique, material, must train workers and sales
personnel.
Samples :
Through system at Bosh production System, initiated
according to Japanese sample by the group BOSH in the
Czech Republic, in branches were discovered other reserves
allowing savings. Are developed also new products for “low
cost” cars, that are important especially in developing
countries. In next ten years in the whole world will
exceptionally grow car production, which price will not
exceed 7000 Euro.
Table telephone
From the moment of invention of telephone apparatus
passed more than one century. During this time went the
table telephone through many innovations.
Questions to think over:
1. Characterise mistakes, that make managers on
international markets.
2. Specify specialities of international marketing.
3. Specify and characterise components of international
ambience.
4. What is the role of information in international
marketing ?
5. What way proceeds according to you choice of
international markets ?
6. Characterise forms on entering into international market.
7. Deal with distribution problems on international markets.
8. Characterise international marketing plan.
9. Describe individual categories of classification of new
products.
10. Explain marketing conception of the product.
11. Characterise group of new products.
12. Describe stages of introducing of new products on the
market.
13. What role plays in the company research and
development department ?
14. What is market testing used for ? How is it providing ?
15. What is the purpose of commercialism ?
16. What aspects of development should contain innovation
strategy ?