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WHAT IS MARKETING?
Marketing Involves:
• Focusing on the needs and wants of
customers
• Identifying the best method of satisfying
those needs and wants
• Orienting the company towards the
process of providing that satisfaction
• Meeting organisational objectives
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ch1_3
WHAT IS INTERNATIONAL
MARKETING?
Different Levels of International Marketing
• Export marketing
• International marketing
• Global marketing management
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ch1_4
ENVIRONMENTAL INFLUENCES ON
INTERNATIONAL MARKETING
Socio/Cultural
Language
Religion
Aesthetics
Values and attributes
Social organisation
Material culture
Economic
Developed economies
Emerging economies
Less developed economies
Currency movements
Legal
Local domestic laws
International law
Home domestic law
Environmental
Influences on
International
Marketing
Political
Operational restrictions
Discriminatory restrictions
Physical actions
Technological
Satellite Communications
ISDN
Internet
WWW
The Electronic
Superhighway
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ch1_12
THE CHALLENGES OF THE INTERNATIONAL
MARKETING ENVIRONMENT #1

Culture


Markets


Widespread and sometimes fragmented
Data


Often diverse and multicultural
Difficult to obtain and sometimes expensive
Politics

Regimes vary in stability, political risk becomes an
important variable
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ch1_13
THE CHALLENGES OF THE INTERNATIONAL
MARKETING ENVIRONMENT #2

Governments


Competition


Can be a strong influence in regulating importers
and foreign business ventures
Multinationals can distort competitive structure of
markets
Economies

Varying levels of development
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ch1_14
THE CHALLENGES OF THE INTERNATIONAL
MARKETING ENVIRONMENT #3
Finance
Many
differing finance systems and regulatory
bodies
Currency
Varying
and unstable, strong likelihood of
transaction risk
Business
Diverse
rules, culturally influenced
Control
Difficult
to control and co-ordinate across markets
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ch1_16
THE INTERNATIONAL
MARKETING STRATEGY PROCESS
Feedback &
reassess
continually
Understand the environmental influences
on a firm’s international markets
Chapter
Part One:
Analysis
1,2,3
Segment international markets, identify &
analyse opportunities
4.
Develop appropriate international marketing
strategies, planning & processes
Part Two:
Strategy
Development
5,6,7
Decide marketing entry strategies
8.
Build added value through effective
marketing mix strategies
Part Three:
Implementation
9,10,11,12
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ch2_6
COMPARATIVE ADVANTAGE

Achieving Comparative
Advantage





sustained period of
investment
lower labour cost
proximity to raw
materials
subsidies to help native
industries
building expertise in
certain key areas

Building national
advantage (Porter, 1990)

factor conditions
 demand conditions
 related and supporting
industries
 firm strategy, structure
and rivalry
Source: Porter (1990) The Competitive Advantage of Nations
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ch2_7
Tariff and Non-Tariff Barriers to Trade
Specific country
Purpose
Time length
Tariffs
Import restraints
Tariff rates
Market
entry
barriers
Production, distribution and consumption
Government participation in trade
Customs and entry procedures
Product requirements
Nontariff
barriers
Quotas
Financial control
Other policies and requirements
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ch2_9
MAIN TYPES OF TRADE ASSOCIATIONS
Type
Common
external tariff
Free movement of
capital and people
Example
Economic co-operation
No
No
Canada - EC framework agreement, APEC
Bi-lateral or multi-lateral
trade treaty
No
No
The Peru, Chile accord
Sectoral free trade
agreement
No
No
The multi-fibre agreement
Trade preference
agreement
No
No
South African Development Cone (SADC)
Free trade area (or
agreement)
No
No
ASEAN NAFTA Mercosur
Customs union
Yes
Possibly
Common market
Yes
Yes
European Single Market
Economic union
Yes
Yes
European Monetary Union
Political
Yes
Yes
Would resemble federal states (e.g. US,
Canada, Germany)
Economic Community of West African States
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ch2_10
Political
harmony
& monetary
policy
Common fiscal
production
Free flow of
factors of
Common
external tariffs
No internal
tariffs
FORMS OF MARKET AGREEMENT
Free trade area
Customs union
Common market
Economic union
Political union
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ch2_11
REGIONAL TRADING AREAS OF THE
WORLD 1998
APEC
NAFTA
Australia
Brunei
Canada
Chile
China
Hong Kong
Indonesia
Japan
Malaysia
Canada
Mexico
United States
Mexico
New Zealand
P.N.G.
Philippines
Singapore
South Korea
Taiwan
Thailand
United States
EU
FTAA
An agreement to
create a free-trade
area among 34
countries in North
and South America
Mercosur
Argentina
Brazil
Paraguay
Uruguay
Austria
Belgium
Britain
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Netherlands
Portugal
Spain
Sweden
ASEAN
Brunei
Indonesia
Malaysia
Philippines
Singapore
Thailand
Vietnam
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ch2_18
DEVELOPING TRADE AREAS

NAFTA: free trade area


Mercosur: customs union



Brazil, Paraguay, Uruguay and Argentina
APEC: forum of 23 Asia-Pacific nations
ASEAN: free trade area (beginning 2008)


US, Canada, Mexico
Thailand, Indonesia, Singapore, Brunei, Malaysia &
Philippines
CEA: economic area

China, Hong Kong & Taiwan
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ch3_2
CULTURE DEFINED
The sum total of learned beliefs, values
and customs that serve to direct
customer behaviour in a particular
country market
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ch3_9
A CULTURAL FRAMEWORK
Religion
Values &
Attitudes
Language
Aesthetics
Cultures
Social
Organisations
Law & Politics
Adapted from Terpstra & Sarathy (1999)
Education
Technology &
Material Culture
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ch3_13
Assumptions to Be Questioned by
International Marketing Managers
1. That Maslow’s Hierarchy of Needs is consistent across cultures
2. That the buying process in all countries is an individualistic activity
3. That social institutions and local conventions are similar across
cultures
4. The consumer buying process is consistent across cultures
- consumer involvement
- perceived risk
- cognitive style
5. Self reference criterion
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ch3_18
INTERRELATIONSHIP BETWEEN CONTEXT
& PRODUCT DIFFUSION
High Context/Fast Diffusion
High Context/Slow Diffusion
South East Asia
Japan
India
Asia
Low Context/Fast Diffusion
Low Context/Slow Diffusion
Scandinavia
USA, Canada
UK
Eastern Europe
Source: Will, Samli and Jacobs (1991)
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ch3_19
LINEAR MODEL OF THE NEGOTIATION
PROCESS
Non-task sounding
Task-related exchange of
information
Persuasion
Concession and agreement
Source: Graham (1986)
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ch4_2
3 AREAS OF INTERNATIONAL MARKET
ANALYSIS
Scanning international markets to
identify and segment markets
 Building marketing information
systems to monitor environmental
trends
 Carrying out primary marketing for
input into the development of
marketing strategies

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ch4_5
THE FOUR RISK MATRIX
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ch4_6
BUSINESS PORTFOLIO MATRIX
Source: Harrell G D and Kiefer R O (1993) Multinational
market portfolios in global strategy development,
International Marketing Review, Vol 1- No 1
Country Attractiveness
High
Medium
Low
High
Company’s
Compatibility
Medium
With Each
Country
Low
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ch4_8
TRANSNATIONAL SEGMENTATION &
METHODS
Demographic: sex, age, income level,
social class and educational achievement
Psychographic: lifestyle factors - activities,
interests and opinions
Behavioural: patterns of consumption,
loyalty to product category and brand
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ch4_14
12C FRAMEWORK
Culture/consumer
Behaviour
Country
Channels
Concentration
Choices
Commitment
12c
Currency
Communication
Consumption
Contractual
Obligations
Capacity
to Pay
Caveats
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ch4_15
Pricing
Mix
Distribution
Mix
Promotion
Mix
Product
Mix
Market
Entry
MARKET PROFILE ANALYSIS
Social
Cultural
Legal
Factors
Economic
Factors
Political
Factors
Technological
Factors
Competition
Trading
Practices
Tariff
Barriers
Financial
Source: Majaro (1992)
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ch4_16
SOURCES OF INFORMATION








Business libraries
University libraries
International chambers of
commerce
International Market
Intelligence Centre (DTI)
Business Links
Embassies
Banks
Trade associations





Export councils
Overseas distributors
Overseas sales
subsidiaries
Foreign brokerage
houses
Foreign trade
organisations such as
JETRO

(Japanese Export Trade
and Research
Organisation)
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ch4_20
USEFULNESS OF PERSONALLY COLLECTED DATA
IN THE ASIA-PACIFIC REGION
0
Not at all
1
2
A little Substantial
3
4
A lot
Heavily
Customers
Personal contacts
In-house surveys
Businessmen
Governments
Competitors
Trade associations
Newspapers
Political contacts
External surveys
International survey
Magazines
Bankers
Local surveys
Source: Lassere , P (1993)
Computer databases
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ch4_21
ORGANISING THE RESEARCH
STUDY #1

Questions the International Marketing
Manager should address:
 Should
the research be carried out by
foreign local subsidiaries or should all
marketing research be centralised at
headquarters?
 Should the fieldwork be carried out in
house or by an agency?
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ch4_24
EVALUATION OF SURVEY METHODS
+ = advantage
- = disadvantage
Malhotra et al (1997)
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ch5_7
ASPECTS OF THE INTERNATIONAL
MARKETING PLAN
Stakeholder Expectations
Shareholders, customers, host government, employees
in each country, pressure groups
Situation Analysis
Evaluation of the environment & individual markets
Resource & Capabilities
Individual SBU strengths & weaknesses analysis
Capability to deal with threats and opportunities
Corporate Aims & Objectives
Financial, market, area, brand & mix objectives
Marketing Strategies
Growth strategies
Standardisation & adaptation
Implementation of the Plan
Individual SBU & marketing mix plans
Regional, global or multidomestic integration
Control & Feedback
Setting standards, measuring performance, correcting deviations
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ch5_8
SOME TYPICAL STAKEHOLDERS OF
MULTINATIONAL ENTERPRISES
Shareholders
Expatriate staff
Individual politicians and
civil servants
Suppliers
Distributors &
retailers
Customers
Local competitors
Home country
government
The Firm
Host country
government
Local workers and
their organisations
Pressure groups
Competitor MNEs
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ch5_10
ANSOFF GROWTH MATRIX
Products
Old
New
Old
Penetration
Product
development
Market
development
Diversification
Markets
New
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ch5_12
MARKETING PLAN CHECKLIST #1
The
world economy and environmental trends
Historical performance (sales, costs, profitability)
Forecast future performance
An extrapolation of the past
Alternative scenarios
Opportunities and threats
Company strengths, weaknesses and capabilities
compared to competition
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ch5_13
MARKETING PLAN CHECKLIST #2
Long
term aims, objectives and strategies
One-year marketing objectives and individual
SBU strategies
Country-by-country forecasts and targets
Country-by country marketing plans for all
activities
Plan for regional and global integration
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ch5_14
MARKETING PLAN CHECKLIST #3
Critical factors for success
 Likely competitor response
 A contingency plan
 A control process for feedback,
evaluation and corrective action

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