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Transcript
International Marketing
14th Edition
P h i l i p R. C a t e o r a
M a r y C. G i l l y
John L. Graham
Global Marketing
Management:
Planning and
Organization
Chapter 11
McGraw-Hill/Irwin
International Marketing 14/e
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
What Should You Learn?
• How global marketing management differs from
international marketing management
• The increasing importance of international
strategic alliances
• The need for planning to achieve company goals
• The important factors for each alternative
market-entry strategy
11-2
Global Perspective
Global Gateways
• Multinational companies
– Confronted with increasing global competition for expanding
markets
– Changing their marketing strategies and altering their
organizational structure
– Nearly 75% of North American and European corporations
are revamping their business processes
• Smaller companies
– More flexible
– May enable them to reflect the demands of global markets and
redefine programs more quickly
11-3
Global Marketing Management
• 1970s – “standardization versus adaptation”
• 1980s – “global integration versus local
responsiveness”
• 1990s – “global integration versus local
responsiveness”
11-4
Global Marketing Management
• The trend back toward localization
– Caused by the new efficiencies of customization
– Made possible by the Internet
– Increasingly flexible manufacturing processes
• From the marketing perspective
customization is always best
• Global markets continue to homogenize and
diversify simultaneously
– Best companies will avoid trap of focusing on country as the
primary segmentation variable
11-5
The Nestle Way –
Evolution Not Revolution
• Nestle – world’s biggest marketer of infant
formula, powdered milk, instant coffee,
chocolate, soups, and mineral water
• Nestle strategy
–
–
–
–
Think and plan long term
Decentralize
Stick to what you know
Adapt to local tastes
• Long-term strategy works for Nestle
– Because the company relies on local ingredients
– Markets products that consumers can afford
11-6
Benefits of Global Marketing
• When large market segments can be identified
– Economies of scale in production and marketing
– Important competitive advantages for global companies
• Transfer of experience and know-how
– Across countries through improved coordination and
integration of marketing activities
• Marketing globally
– Ensures that marketers have access to the toughest customers
– Market diversity carries with it additional financial benefits
– Firms are able to take advantage of changing financial
circumstances
11-7
Planning for Global Markets
• Planning is the job of making things happen that
might not otherwise occur
• Planning allows for:
–
–
–
–
Rapid growth of the international function
Changing markets
Increasing competition, and the
Turbulent challenges of different national markets
11-8
Planning for Global Markets
• Planning is both a process and philosophy
– Relates to the formulation of goals and methods of
accomplishing them
►
►
►
Corporate planning
Strategic planning
Tactical planning
• Company objectives and resources
– Each new market requires
►
A complete evaluation, including existing commitments, relative to the parent
company’s objectives and resources
– Defining objectives clarifies the orientation of the domestic and
international divisions, permitting consistent policies
11-9
Planning for Global Markets
• International commitment
– Commitment in terms of
►
►
►
Dollars to be invested
Personnel for managing the international organization
Determination to stay in the market long enough to realize a return in
investments.
– The degree of commitment to an international marketing cause
reflects the extend to a company’s involvement
11-10
International Planning Process
Exhibit 11.1
11-11
The Planning Process
• Phase 1 – Preliminary analysis and screening
– Matching Company and Country Needs.
• Phase 2 – Adapting marketing mix to target
markets
• Phase 3 – Developing the marketing plan
• Phase 4 – Implementation and control
11-12
Alternative Market-Entry Strategies
• An entry strategy into international market
should reflect on analysis
– Market characteristics
►
►
►
►
►
Potential sales
Strategic importance
Strengths of local resources
Cultural differences
Country restrictions
– Company capabilities and characteristics
►
►
►
Degree of near-market knowledge
Marketing involvement
Management commitment
11-13
Alternative Market-Entry Strategies
Exhibit 11.2
11-14
Alternative Market-Entry Strategies
• Companies most often begin with modest export
involvement
• A company has four different modes of foreign
market entry
–
–
–
–
Exporting
Contractual agreements
Strategic alliances
Direct foreign investments
11-15
Exporting
• Exporting accounts for some 10% of global
activity
• Direct exporting – the company sells to a
customer in another country
• Indirect exporting – the company sells to a buyer
(importer or distribution) in the home country,
who in turn exports the product
11-16
Exporting
• The Internet
– Initially, Internet marketing focused on domestic sales
– A surprisingly large number of companies started receiving
orders from customers in other countries,
►
Resulting in the concept of international Internet marketing (IIM)
• Direct sales
– Particularly for high technology and big ticket industrial products
11-17
Contractual Agreement
• Contractual agreements
– Long-term,
– Nonequity association between a company and another in a
foreign market
• Licensing
– A means of establishing a foothold in foreign markets without
large capital outlays
– A favorite strategy for small and medium-sized companies
– Legitimate means of capitalizing on intellectual property in a
foreign market
11-18
Contractual Agreement
• Franchising
– Franchiser provides a standard package of products, systems,
and management services
– Franchise provides market knowledge, capital, and personal
involvement in management
– Expected to be the fastest-growing market-entry strategy
• Two types of franchise agreements
– Master franchise
►
Gives the franchisee the rights to a specific area with the authority to sell or
establish subfranchises
– Licensing
11-19
Strategic International Alliances
• A strategic international alliance (SIA)
– A business relationship established by two or more companies to
cooperate out of mutual need
– To share risk in achieving a common objective
• SIAs are sought as a way to shore up weaknesses and
increase competitive strengths
• Firms enter SIAs for several reasons
–
–
–
–
–
–
Opportunities for rapid expansion into new markets
Access to new technology
More efficient production and innovation
Reduced marketing costs
Strategic competitive moves
Access to additional sources of products and capital
11-20
Building Strategic Alliances
Exhibit 11.3
11-21
Strategic International Alliances
• Many companies entering SIAs
– To be in strategic position to be competitive
– To benefit from the expected growth in the single European market
• International joint ventures (IJVs)
– A partnership of two or more participating companies that have joined
forces to create a separate legal entity
– Four characteristics define joint ventures
►
JVs are established, separate, legal entities
►
The acknowledged intent by the partners to share in the management
of the JV
►
There are partnerships between legally incorporated entities such as companies,
chartered organizations, or governments, and not between individuals
►
Equity positions are held by each of the partners
11-22
Strategic International Alliances
• Consortia
– Similar to joint ventures and could be classified as such except
for two unique characteristics
►
►
Typically involve a large number of participants
Frequently operate in a country or market in which none of the participants
is currently active
– Consortia are developed to pool financial and managerial
resources and to lessen risks
11-23
Direct Foreign Investment
• Factors that influence the structure and
performance of direct investments
–
–
–
–
–
–
–
Timing
The growing complexity and contingencies of contracts
Transaction cost structures
Technology transfer
Degree of product differentiation
The previous experiences and cultural diversity of acquired firms
Advertising and reputation barriers
11-24
Organizing for Global Competition
• Devising a standard organizational structure is
difficult
– Because organizations need to reflect a wide range of company-specific
characteristics
• Companies are usually structured around one of
three alternatives
– Global product divisions responsible for product sales throughout world
– Geographical divisions responsible for all products and functions within
a given geographical area
– A matrix organization consisting of either of these arrangements
►
With centralized sales and marketing run by a centralized functional staff, or
a combination of area operations and global product management
11-25
Schematic Marketing Organization Plan
Combining Product, Geographic,
and Functional Approaches
Exhibit 11.4
11-26
Locus of decision
• Considerations of where decisions will be made,
by whom, and by which method constitute a
major element of organizational strategy
–
–
–
–
–
Corporate headquarters
International headquarters
Regional levels
National levels
Local levels
• Tactical decisions normally should be made at
lowest possible level
11-27
Centralized Versus
Decentralized Organizations
• Most organizational patterns of multinational
firms fit into one of three categories
– Centralized
– Regionalized
– Decentralized
• No single traditional organizational plan is
adequate for today’s global enterprise
– Seeking to combine the economies of scale of a global company
with the flexibility and marketing knowledge of a local company
11-28
Summary
• To keep abreast of the competition and
maintain a viable position for increasingly
competitive markets, a global perspective is
necessary
• Cost containment, customer satisfaction, and a
greater number of players mean that every
opportunity to refine international business
practices must be examined in light of
company goals
11-29
Summary
• Important avenues to global marketing that
must be implemented in the planning and
organization of global marketing management
–
–
–
–
Collaborative relationships
Strategic international alliances
Strategic planning
Alternative market-entry strategies
11-30