Download MARKETING - Aaron Lee

INTERNATIONAL
MARKETING
By
Dr. HJH. ZAINON HJ. MAT SHARIF
[email protected]
03-87694497
International Marketing
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Content
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What is International Marketing?
Definition of International Marketing
What is Global Marketing?
International Marketing Environment
International Marketing Culture
International Market Entry Evaluation Process
International Marketing Communication
International Marketing and Price
International Marketing and Products
Advantages and Disadvantages of Standardization
International Marketing Issues and Challenges
What is International
Marketing?

International marketing is simply
the application of marketing principles
to more than one country. However,
there is a crossover between what is
commonly expressed as international
marketing and global marketing, which
is a similar term.
Definition International
Marketing

At its simplest level, international marketing
involves the firm in making one or more
marketing mix decisions across national
boundaries. At its most complex level, it
involves the firm in establishing
manufacturing facilities overseas and
coordinating marketing strategies across the
globe.
Doole and Lowe (2001).
Definition International
Marketing

International Marketing is the
performance of business activities that
direct the flow of a company's goods
and services to consumers or users in
more than one nation for a profit.
Cateora and Ghauri (1999)
Definition International
Marketing

International marketing is the
application of marketing orientation
and marketing capabilities to
international business.
Muhlbacher, Helmuth, and Dahringer
(2006)
Definition International
Marketing

The international market goes beyond
the export marketer and becomes
more involved in the marketing
environment in the countries in which
it is doing business.
Keegan (2002)
What is Global
Marketing?
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Global marketing refers to marketing
activities coordinated and integrated
across multiple country markets.
Johansson (2000)
What is Global
Marketing?
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The result is a global approach to international
marketing. Rather than focusing on country
markets, that is, the differences due to the physical
location of customers groups, managers
concentrate on product markets, that is, groups of
customers seeking shared benefits or to be served
with the same technology, emphasizing their
similarities regardless of geographic areas in which
they are located.
Muhlbacher, Helmuth, and Dahringer (2006
What is Global
Marketing?
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Global/transnational marketing focuses
upon leveraging a company's assets,
experience and products globally and
upon adapting to what is truly unique
and different in each country.
Keegan (2002)
International Marketing
Environment
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PEST Analysis
International Marketing
Environment
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PEST
– Political Factors
– Economic Factors
– Socio cultural Factors
– Technological Factors
– + Environment Factors, Legal Factors,
Security Factors
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PESTELS
10Ps
Processes
Principles
Policies
Pricing
Promotion
Buyers
Suppliers
Media
Positioning
Place
Physical
Evidence
Product
People
Consumers
Investors
Regulations
Legislators
International Marketing
Environment
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An International PEST Analysis
– International PEST Analysis would consider:
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How easy will it be to move from purely domestic to
international marketing?
Would your business benefit from inward foreign
investment?
What is the nature of competition within each
individual market, and how will companies from other
nations compete when you meet with them head-tohead in unfamiliar countries?
Many other factors that are specific to your
organization or industry.
International Marketing
Environment
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Political
– Is there any historical relationship between
countries that would benefit or hinder
international marketing?
– What is the influence of communities or unions
for trading? E.g. The European Union and its
authority over European laws and regulation.
– What kind of international and domestic laws will
your business encounter?
– What is the nature of politics in the country that
you are targeting, and what is their view on
encouraging foreign competition from overseas?
International Marketing
Environment
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Economic
– What is the level of new industrial growth?
– What is the impact of currency fluctuations on
exchange rates, and do your home market and
your new international market - share a common
currency?
– There are of course the usual economic
indicators that one needs to be aware of such as
inflation, Gross Domestic Product (GDP), levels
of employment, national income, the
predisposition of consumers to spend savings or
to use credit, as well as many others.
International Marketing
Environment
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Socio-cultural
– Culture, religion and society are of huge
importance.
– What are the cultural norms for doing
business?
– Will cultural norms impact upon your
ability to trade overseas?
International Marketing
Environment
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Technology
– Do copyright, intellectual property laws or
patents protect technology in other countries?
E.g. China and Jordan do not always respect
international patents.
– Does your technology conform to local laws?
E.g. electrical items that run on non-domestic
currents could be dangerous.
– Are technologies at different stages in the
Product Life Cycle (PLC) in various countries?
E.g. versions/releases of software.
International Marketing
Environment
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Tariff and Non-Tariff Barriers
– Tariff barriers are charges imposed upon
imports - so they are a form of import
taxation. This could mean that your
margins are reduced so much that
trading overseas becomes too
unprofitable. However they are normally
transparent and you can plan to take
them into account.
International Marketing
Environment
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Non-tariff barriers are trickier to spot.
Governments sometimes act in favour of
their own domestic industries rather than
allow competition from overseas.
Bureaucracy is a hurdle often encountered
by exporting companies - it takes many
forms and includes unnecessary hold-ups
and red tape. Quotas are another form of
non-tariff barrier i.e. restricting the quantity
of a product that can be imported into a
particular country.
International Marketing
Environment
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SWOT Analysis
International Marketing
Environment
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SWOT analysis is a tool for auditing an
organization and its environment. It is the
first stage of planning and helps marketers
to focus on key issues. SWOT stands for
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strengths,
weaknesses,
opportunities, and
threats.
Strengths and weaknesses are internal
factors. Opportunities and threats are
external factors.
International Marketing
Environment
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Five Force Analysis
International Marketing
Environment
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Five Forces Analysis helps the
marketer to contrast a competitive
environment. It has similarities with
other tools for environmental audit,
such as PEST analysis, but tends to
focus on the single, stand alone,
business or SBU (Strategic Business
Unit) rather than a single product or
range of products.
International Marketing
Environment
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Five forces analysis looks at five key
areas namely:– the threat of entry,
– the power of buyers,
– the power of suppliers,
– the threat of substitutes,
– and competitive rivalry.
International Marketing
Culture
International Marketing
Culture
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Culture is the way that we do things
around here. Culture could relate to a
country (national culture), a distinct
section of the community (subculture), or an organization (corporate
culture).
International Marketing
Culture
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The Terpstra and Sarathy Cultural
Framework helps marketing
managers to assess the cultural nature
of an international market. It is very
straight-forward, and uses eight
categories in its analysis.
International Marketing
Culture
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The Eight categories are
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Language,
Religion,
Values and Attitudes,
Education,
Social Organizations,
Technology and Material Culture,
Law and Politics and
Aesthetics.
International Market
Entry Evaluation Process
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How to Enter a Foreign Market.
– The International Marketing Entry
Evaluation Process is a five stage process,
and its purpose is to gauge which
international market or markets offer the
best opportunities for our products or
services to succeed.
International Market
Entry Evaluation Process
– The five steps are Country Identification,
Preliminary Screening, In-Depth
Screening, Final Selection and Direct
Experience.
International Market
Entry Evaluation Process
International Market
Entry Evaluation Process
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Step
Step
Step
Step
Step
One - Country Identification
Two - Preliminary Screening
Three - In-Depth Screening
Four - Final Selection
Five - Direct Experience
Modes of Entry
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How does an organization enter an
overseas market?
– Here you will be consider modes of entry into
international markets such as the Internet,
Exporting, Licensing, International Agents,
International Distributors, Strategic Alliances,
Joint Ventures, Overseas Manufacture and
International Sales Subsidiaries. Finally we
consider the Stages of Internationalization.
Modes of Entry
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The Internet
Exporting
Licensing
International Agents and International
Distributors
Strategic Alliances (SA)
Joint Ventures (JV)
Overseas Manufacture or International Sales
Subsidiary
International Marketing
Communication
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Media Choices for International Marketing
– Influences upon International Media Choice.
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There are a number of factors that will impact upon
choice and availability of media such as:
The nature and level of competition for marcoms
channels in your target market.
Whether or not there is a rich variety of media in your
target market.
The level of economic development in your target
market (for example, in remote regions of Africa there
would be no mains electricity on which to run TVs or
radios).
International Marketing
Communication
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The availability of other local resources to assist you
with your campaign will also need to be investigated
(for example, sales people or local advertising
expertise).
Local laws may not allow specific content or references
to be made in adverts (for example, it is not
acceptable to show naked legs in adverts displayed in
Muslim countries).
And of course a lot depends upon the purpose of the
international campaign in the first place. What are your
international marketing communications objectives?
International Marketing
Communication
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Issues
– Language
– Design, symbolism and aesthetics sometimes do
not transcend international boundaries
– Culture
– The manner in which people present themselves
in terms of dress and appearance changes from
culture to culture.
International Marketing
Communication
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Other factors that need to be considered
include:
– The work ethic of employees and customers to
be targeted by media.
– Levels of literacy and the availability of
education for the national population.
– The similarity or diversity of beliefs, religion,
morality and values in the target nation.
– The similarity or diversity of beliefs, religion,
morality and values in the target nation.
– The family and the roles of those within it are
factors to take into account.
Media Choices in
International Marketing
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Personal selling
Advertising
Other potential media would include
– Web-based marketing
– International tradeshows, trade missions,
sponsorship
International Marketing
and Price
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Influences on pricing for
international marketing.
– The cost of manufacturing, distributing
and marketing your product.
– The physical location of production plants
might influence price.
International Marketing
and Price
– Of course fluctuations in foreign currencies
affect pricing. Many companies are benefiting
from a relatively low US Dollar price during the
2010s. This make imports to the United States
expensive, but exports relatively cheap to other
nations. However fluctuations make it very
difficult for companies to make long-term
decisions - such as building large factories in
global markets i.e. costs of production are cheap
today, but could be expensive in the future,
impacting upon the price that your business is
forced to charge.
International Marketing
and Price
– The price that the international consumer
is willing to pay for your product.
– Your own business objectives will
influence price. For example, large
international companies such as
Starbucks may operate at a loss in some
locations but still need a local presence in
order to maintain their economies of
scale, as well as their reputation as a
global player.
International Marketing
and Price
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The price that competitors in
international markets are already
charging.
Business environment factors such as
government policy and taxation.
International Marketing
and Price
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Grey Markets
– A business can expect problems with grey markets where
it trades across national boundaries. So if Company Y is
English it will trade in Stirling or Pound notes. If it trades
in the United States during the 2010s, to be competitive it
will need to sell at a reduced price in the US. However,
there is little to stop an entrepreneur from traveling to the
US, filling up a transport container with products, which
have been exported from Company Y in England, then
returning them back to England and marketing the same
product at a lower price than Company Y is willing to
trade. This is an example of parallel trade, which is legal just. Therefore it is known as grey marketing.
International Marketing
and Price
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International Pricing Approaches
– Export Pricing - a price is set for by the
home-based marketing managers for the
international market. The pricing
approach is based upon a whole series of
factors which are driven by the influences
on pricing listed above. Then mainstream
approaches to pricing may be
implemented
International Marketing
and Price
– Non-cash payments - less and less
popular these days, non-cash payments
include counter-trade where goods are
exchanged for goods between companies
from different parts of the World.
International Marketing
and Price
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Transfer Pricing - prices are set in
the home market, and goods are
effectively sold to the international
subsidiary which then attaches its own
margin based upon the best price that
local managers decide that they could
achieve.
International Marketing
and Price
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Standardization versus
adaptation - do you use a standard,
common approach to pricing in each
market, or do you decide to adapt the
price to local conditions?
International Marketing
and Products
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Product is a focal element of the
marketing mix.
Marketing Mix
Marketing Mix
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The marketing mix is probably the
most famous marketing term. Its
elements are the basic, tactical
components of a marketing plan. Also
known as the Four P's, the marketing
mix elements are price, place,
product, and promotion.
Marketing Mix
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Price
– There are many ways to price a product.
Let's have a look at some of them and try
to understand the best policy/strategy in
various situations.
Marketing Mix
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Place is also known as channel,
distribution, or intermediary. It is the
mechanism through which goods
and/or services are moved from the
manufacturer/ service provider to the
user or consumer.
Marketing Mix
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Product
– For many a product is simply the
tangible, physical entity that they may be
buying or selling.
Marketing Mix
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Promotion
– Another one of the 4P's is promotion.
This includes all of the tools available to
the marketer for 'marketing
communication'.
Marketing Mix
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Physical Evidence is the material
part of a service. Strictly speaking
there are no physical attributes to a
service, so a consumer tends to rely
on material cues.
Marketing Mix
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People
– People are the most important element
of any service or experience. Services
tend to be produced and consumed at
the same moment, and aspects of the
customer experience are altered to meet
the 'individual needs' of the person
consuming it.
Marketing Mix
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Process
– Process is another element of the
extended marketing mix, or 7P's.There
are a number of perceptions of the
concept of process within the business
and marketing literature. Some see
processes as a means to achieve an
outcome.
International Marketing
and Products
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When considering the nature of
products and services in international
marketing, the same models apply
such as:
– Product Life Cycle (PLC) - products could
be at different points in the PLC in
various nations, possibly creating new
opportunities.
International Marketing
and Products
– Ansoff's Matrix - market development
could mean that an existing product is
marketed in a new international market.
– Three Levels of a Product - marketers
would consider the local market's need
for core, actual and augmented products.
– Internet Marketing and Product - how do
eMarketers make product decisions?
Product Life Cycle (PLC)
Product Life Cycle (PLC)
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Introduction.
– The need for immediate profit is not a
pressure. The product is promoted to
create awareness. If the product has no
or few competitors, a skimming price
strategy is employed. Limited numbers of
product are available in few channels of
distribution.
Product Life Cycle (PLC)
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Growth.
– Competitors are attracted into the market
with very similar offerings. Products
become more profitable and companies
form alliances, joint ventures and take
each other over. Advertising spend is high
and focuses upon building brand. Market
share tends to stabilize.
Product Life Cycle (PLC)
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Maturity.
– Those products that survive the earlier stages
tend to spend longest in this phase. Sales grow
at a decreasing rate and then stabilize.
Producers attempt to differentiate products and
brands are key to this. Price wars and intense
competition occur. At this point the market
reaches saturation. Producers begin to leave the
market due to poor margins. Promotion becomes
more widespread and use a greater variety of
media.
Product Life Cycle (PLC)
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Decline.
– At this point there is a downturn in the
market. For example more innovative
products are introduced or consumer
tastes have changed. There is intense
price-cutting and many more products
are withdrawn from the market. Profits
can be improved by reducing marketing
spend and cost cutting.
Issues and Challenges
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Problems with Product Life Cycle.
– In reality very few products follow such a
prescriptive cycle. The length of each stage
varies enormously. The decisions of marketers
can change the stage, for example from maturity
to decline by price-cutting. Not all products go
through each stage. Some go from introduction
to decline. It is not easy to tell which stage the
product is in. Remember that PLC is like all other
tools. Use it to inform your gut feeling.
Ansoff’s Matrix
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Ansoff’s Matrix
Ansoff’s Matrix
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Market Penetration
– Here we market our existing products to
our existing customers. This means
increasing our revenue by, for example,
promoting the product, repositioning the
brand, and so on.
Ansoff’s Matrix
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Market Development
– Here we market our existing product
range in a new market. This means that
the product remains the same, but it is
marketed to a new audience. Exporting
the product, or marketing it in a new
region.
Ansoff’s Matrix
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Product Development
– This is a new product to be marketed to
our existing customers. Here we develop
and innovate new product offerings to
replace existing ones. Such products are
then marketed to our existing customers.
Ansoff’s Matrix
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Diversification
– This is where we market completely new
products to new customers. There are
two types of diversification, namely
related and unrelated diversification.
Related diversification means that we
remain in a market or industry with which
we are familiar.
The Three Levels of
a Product
The Three Levels of
a Product
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In order to actively explore the nature
of a product further, lets consider it as
three different products - the CORE
product, the ACTUAL product, and
finally the AUGMENTED product.
The Three Levels of
a Product
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The CORE product is NOT the tangible,
physical product. You can't touch it. That's
because the core product is the BENEFIT of
the product that makes it valuable to you.
So with the car example, the benefit is
convenience i.e. the ease at which you can
go where you like, when you want to.
Another core benefit is speed since you can
travel around relatively quickly.
The Three Levels of
a Product
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The ACTUAL product is the tangible,
physical product. You can get some
use out of it. Again with the car
example, it is the vehicle that you test
drive, buy and then collect.
The Three Levels of
a Product
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The AUGMENTED product is the nonphysical part of the product. It usually
consists of lots of added value, for which
you may or may not pay a premium. So
when you buy a car, part of the augmented
product would be the warranty, the
customer service support offered by the
car's manufacture, and any after-sales
service.
eMarketing Product
eMarketing Product
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A - Online Extender
– An Online Extender is an existing
business that has a strategy whereby it
extends its marketing activities to the
Internet. It could be any traditional,
terrestrial organization that has
historically grown through using
traditional channels of distribution to get
existing products, brands, services or
solutions to market.
eMarketing Product
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B - Online Alternative
– The Online Alternative is a new start-up
that uses the Internet as an original
channel of distribution to get products,
brands, services or solutions, currently
available elsewhere, to market. Some
segments may be better targeted with
this online alternative, for example
remote or fragmented markets.
eMarketing Product
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C and D - Online Innovators
– Online Innovators come in two forms:
– C - Online Innovators are existing businesses
that see a benefit to launching new and
innovative products, brands, services or
solutions online by leveraging new technology.
Existing businesses have a wealth of knowledge
and learning that underpin their moves onto the
Web. Remember, the Internet is not a business
paradigm shift (at least not yet) and so current
business approaches are often adapted for the
Internet. Existing businesses have experience.
eMarketing Product
– D - Online Innovators are start-ups that
seize the opportunity to launch new and
innovative products, brands, services or
solutions online. Despite not having as
much knowledge and learning as some of
their competitors, they are flexible and
can move much more quickly. Start-ups
often lack experience.
Advantages of
Standardization
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International uniformity has its own
advantages. As people travel the World,
they can be assured that wherever they go
the product that they buy from you will be
same and that it will have the same,
standard benefits. This could mean the
components that they buy from you in
different local markets as they themselves
become global.
Advantages of
Standardization
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Standardization reinforces positive
consumer perceptions of your
product. One of the payoffs of great
quality for a single product category is
that the reputation of your product will
help you sell more of it. Positive wordof-mouth pays dividends for brand
owners.
Advantages of
Standardization
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Cost reduction will give economies of scale. Since
you are making large quantities or the same, nonadapted product - you benefit from the advantages
associated with manufacturing in bulk. For
example, components can be bought in large
quantities, which reduces the cost-per-unit. There
are other benefits relating to economies of scale,
including improved research and development,
marketing operational costs, lower costs of
investment, and in an age where trade barriers are
coming down - standardization is a plausible
product strategy.
Advantages of
Standardization
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Quality is improved since efforts are
concentrated upon the single product.
Staff can be trained to enhance the
quality of the product and
manufacturers will invest in technology
and equipment that can safeguard the
quality of the standardized product
offering.
Disadvantages of
Standardization
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Since the product is the same wherever you buy it,
it is wholly undifferentiated. It is not unique in
anyway. This leaves the obvious opportunity for a
competitor to design a tailor-made, differentiated or
branded product that meets the needs of local
segments. Of course products have different uses
in different countries (for example cycling is a
leisure activity in some nations, and a form of
transport in others). Local markets have local needs
and tastes. Therefore by standardizing, you could
leave yourself vulnerable.
Disadvantages of
Standardization
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Another problem with standardization is that
it depends largely upon economies of
scale. With global businesses, your
business will manufacture in a number of
nations. However, some countries
implement trade barriers (and yes - this
includes the USA and the European Union).
If this is the case, then localization and the
resultant adaptation is inevitable.
Disadvantages of
Standardization
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What exactly do you intend to
standardize? Is your whole product
'experience' to be standardized? Do
you standardize customer service and
product support, marketing
communications, pricing, and channels
of distribution? Then you have a
standardized marketing mix - surely
this cannot benefit your business
Aligning the ‘7S’s is
Essential for Success
Strategy
Structure
Systems
VISION
MISSION
Shared
Values
Style
Skills
Staffing
Dynamic 7S
Issues and Challenges
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PEST = PESTELS
SWOT
PORTER FIVE FORCE
CULTURE – language, manner,
symbol, culture
4 P’s = 10P’s
4 M’s = 10M’s
7 S’s