Download Domestic Market Orientation

International Marketing
ATM Semester 2
Lecture 10
By Sanemkhan Nurillaeva
Agenda
• Definition
• Good and Bad Examples
• Deciding which markets to enter
• Market Entry Mode and Risk
• 3 Strategic Market Orientation
Definition: International Marketing
• “Multinational process of planning and
executing the conception, pricing,
promotion, and distribution of ideas, goods,
and services and to create exchanges that
satisfy individual and organizational
objectives” (John Shaw, 2008)
Good Example: at&t
Bad Example: KFC
• In Chinese, the Kentucky Fried Chicken slogan “finger-lickin’ good” came out
as “eat your fingers off.”
Deciding whether to go international
Reasons
Saturated domestic markets
Small domestic markets
Low growth domestic markets
Customer drivers
Competitive forces
Cost factor
Portfolio balance
Barriers
Insufficient Knowledge
Lack of Capital
Market Uncertainty
Commercial & Political Risks
Deciding which markets to enter
Macroenvironmental issues
Socio-cultural
Technological
Economic
Political/legal
Foreign
Market
selection
Microenvironmental issues
 Market attractiveness
 Company capability profile
Market attractiveness
Microenvironmental issues
• Market size and growth rate
• Competition
• Cost of serving the market
• Profit potential
• Market access
Company capability profile
Microenvironmental issues
• Skills
• Resources
• Product adaptation
• Competitive advantage
Market Entry Mode and Risk
Deciding how to enter the market
Indirect
exporting
Direct
exporting
Licensing
Joint
ventures
Commitment, Risk, Control, and Profit Potential
Direct
investment
Foreign market entry strategies
Cooperative
Licensing
Joint ventures
Direct investment
New facilities
Acquisitions
Foreign
Market
Entry
Exporting
Indirect
Direct
 Domestic-based export merchants
 Domestic based export agents
 Piggybacking
 Cooperative organisation
 Foreign-based agents or
distributors
 Domestic-based sales
representatives
 Overseas sales/marketing office
or subsidiary
Which strategy should be used?
It depends on:
• Vision
• Attitude toward risk
• How much investment capital is available
• How much control is desired
3 Strategic Orientation
1. Domestic market extension orientation
2. Multidomestic market orientation
3. Global market orientation
Domestic Market Orientation
• International operations viewed as
secondary
• Prime motive is to market excess
domestic production
• Firm’s orientation remains basically
domestic
• Minimal efforts are made to adapt product
or marketing mix to foreign markets
• Firms with this approach are classified as
ethnocentric
Multidomestic Market Orientation
• Companies have a strong sense that foreign country markets are vastly
different
• Market success requires an almost independent program for each country
• Separate marketing strategies (mostly polycentric)
• Subsidiaries operate independently of one another in establishing marketing objectives and
plans
• Products are adapted for each market
• Control is decentralized
Global Market Orientation
• Company guided by global marketing
orientation
– Marketing activity is global
– Market coverage is the world
• Firm develops a standardized marketing mix
applicable across national boundaries
– Markets are still segmented
– Each country or region is considered side by side
with a variety of other segmentation variables
– Fits the regiocentric or geocentric classifications
Global Market Orientation: Example
• McDonald’s:
•
•
•
•
Process is standardized in every country
Logo is same
Most of the advertisements are similar
Store decoration and layout almost alike
• BUT
• Wine in France and Beer in Germany
• A Filipino Style spicy burger in Manila
• Pork burgers in Thailand
• P&G pursue a global strategy for disposable diapers, but a multidomestic strategy in Asian
markets for detergents. (The strategy differs product to product)
Reading
• P. Kotler, K.Keller, 2006, Marketing Management, 12 ed, Prentice Hall
• D.Jobber, Principles and Practice of Marketing, 3ed, 2001, McGrawHill
• Isobele and Lowe, (2008). International Marketing Strategy [Online]. Available
from:
https://www.cengagebrain.co.uk/content/doole07630_1844807630_02.01_chap
ter01.pdf
• International Marketing Strategy and Theory (2008) by John Shaw