Download Chapter 16 International marketing

Chapter 16
Analysis of the International
Marketing Environment
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–1
What is international marketing?
• Various definitions exist—the simplest definition is:
• Taking the marketing mix to one or more
foreign countries.
•
International marketing is the process of
planning and conducting transactions across
national borders to create exchanges that
satisfy the objectives of individuals and
organisations.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–2
International marketing key points
• International marketing is a planned activity.
• Transactions conducted across international
borders.
• Involves mutually satisfying exchanges.
• Each activity has a predetermined objective.
• Conducted between organisation's and/or people.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–3
Rationale for going international
• Different organisations have different reasons for
expanding their marketing operations into overseas
markets. Some of the reasons include:
• Organisation’s experience.
• Demand for product.
• Excess capacity.
•
Many others can be found in the text: Ch 16, page 7.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–4
Differences between domestic and
international markets
• Insert Fig 16.1 page 9 (Grigoriou, N)
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–5
International environmental analysis
• Political and legal environment.
• Cultural environment.
• Financial environment.
• Economic environment.
• Competitive environment.
• Trade barriers.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–6
The legal environment
• Marketers will be concerned with:
• Contracts for supply and delivery of
•
•
•
•
•
goods/services.
Registrations and enforcement of trademarks,
brand names and labelling.
Patents.
Marketing communications.
Pricing.
Product safety, acceptability and
environmental issues.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–7
Legal considerations
and the marketing mix
• Product
–
Performance, safety, packaging and warranty.
• Price
–
Regulated by laws similar to the Trade Practices Act
1974.
• Placement
–
Relates to contractual agreements between parties.
• Promotion
–
Censorship in the media.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–8
Legal considerations
and the marketing mix
• Common law
–
Based on tradition and common practice and relies on
precedent.
• Code law (civil law)
– Based on a comprehensive set of written rules
divided into commercial, civil and criminal (sub-categories).
• Islamic law
–
Rules by which the Muslim world is governed, forming a
relationship between ‘Man’ and ‘God’.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–9
The political environment
• An assessment of a nation’s political environment
should include and analysis of:
• Type of government
–
Parliamentary, absolutist, other (between extremes of
democracy and dictatorship).
• Political interference
–
Domestication, expropriation or confiscation.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–10
The political environment
• Government regulations
–
The boundaries within which international marketers
operate overseas, which are subject to change.
• Managing the overseas political environment:
–
–
–
Risk avoidance and retention.
Political risk insurance.
Diversification or risk spreading.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–11
The cultural environment
• Considerations include:
• Language
–
Verbal, body and written.
• Religion
–
Value systems and consumers’ behaviour.
• Education
–
Formal education, social skills and communication skills.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–12
The cultural environment
• Aesthetics
–
The shape, form, size, number and colour of a product are
its aesthetics.
• Context
–
–
Low-context cultures (explicit communication style).
High-context cultures (implicit communication style).
• Business customs
–
Knowledge of a nations customs (e.g. does one kiss, bow
or shake hands?).
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–13
Financial environment
• Currency exchange controls
–
Limits on legal uses of a currency and transactions.
• Convertibility of currency
–
Currency that is freely convertible.
• Exchange rates
–
The rate at which one currency can be converted into
another.
• Interest rates
–
Determine the cost of borrowing money and income from
money invested in a foreign country.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–14
The economic environment
•
A nation’s economy is a strong indication of not just the
wealth of that nation but also the wealth of its citizens (a very
important point for international marketers).
•
Measurement of economic performance:
Unemployment.
Gross national product (GNP).
Living standards.
Population.
Infrastructure.
Resources.
•
•
•
•
•
•
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–15
The economic environment
• Types of economic systems
–
–
–
Market allocation.
Command allocation.
Mixed allocation.
• Types of economic structures
–
–
–
Agricultural economies.
Industrial economies.
Service economies.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–16
The competitive environment
• Competition in an overseas market should be
looked at from two perspectives, macro and micro.
• Three types of competitive structures:
1 Monopoly.
2 Oligopoly.
3 Monopolistic.
• Types of competition
–
Brand, industry, form and generic competition.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–17
International trade barriers
• Why governments impose trade barriers:
• Protection of local industries.
• Preservation of foreign currencies.
• Revenue-raising to fund domestic infrastructure.
• Advancement of political ideologies.
• Reduction of unemployment.
• Protection of infant industries.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–18
Types of international barriers
• Tariff barriers (two broad types)
1 Protective tariff.
2 Revenue tariff.
• Product level trade barriers
–
–
–
Specific tariff.
Ad valorem tariff.
Composite tariff.
• Non-tariff barriers are government measures other
than tariffs that restrict imports.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Nicholas Grigoriou
Slides prepared by: Joe Rosagrata
16–19