Download Opportunities and benefits of International marketing

International marketing
Marketing of a firm’s product in foreign
countries
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Global Marketing
* An extension of international marketing
* It refers to selling the same product using the
same marketing approach throughout the world.
Opportunities and benefits of International
marketing
• Capture a wider customer base
• Economies of scales
• Increase brand recognition
• Spread risks (recession or changes in fashion
in other countries)
• Extend the product life cycle
• Gain more
profits
Cultures
Ethics
“What is acceptable in one country may not
acceptable in another”
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Language
“We do chicken right” is literally
translated as a bad word in Chinese
International business etiquette
Numbers
13 is an unlucky number in China
14 is an unlucky number in Taiwan and Japan
Spoken language
Japanese people prefer not to use the word no
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Greetings
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Physical contact
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Dress code
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Body Language
In Japan, talking using your
hands is not done and is
regarded as distracting
Legal issues
Some countries will have very strict laws on
what and cannot advertised. Ex: UK, China
and Cuba
Barrier to
enter the
country
Political issues
Governments can have a huge impact on the
economics of international trade. They may
set up international trade barriers.
1)
2)
3)
4)
Quotas.- Quantitative restrictions on
imported goods
Tariffs.- Import taxes
Administrative barriers.- Safety regulations,
licences and employment visas
Subsidies.- It helps local firms to lower their
cost of production
Social and demographic issues
* With growing prosperity and income, marketers
an business can target different customers with
different products.
• Product and price differ in more prosperous
areas
• Ex: Japan and Italy have the world’s oldest
average of population (Marketers will take a
different approach in pricing, product, place and
promotion)
Pressure groups
Treatment of Animals (PETA) is the world’s
largest animal rights group.
It has represented many problems for those
companies.
Economic issues
It is important to consider when marketing
products overseas
1) Transportation costs
2) Exchange rate fluctuations
3) Interest rates
4) Communication costs.
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Once a business has decided to market overseas,
there are various strategies that can use
Internal methods
1) Exporting
2) Direct investment
Honda, Toyota and
Nissan all have manufacturing plants in UK.
3) E-commerce.- It reduces costs and risks of
international marketing. You can get access to
foreign markets without having to physically
set up retail stores.
External methods.
1)
Joint ventures.- This occurs when two or
more companies invest in a shared business
project pooling their resources to form a
separate business. The companies retain their
separate legal identities.
2) Strategic alliance
• Businesses pool their human, capital and
financial resources in a shared project.
• They do not form a new business with a
separate legal identity
Nissan (Japan’s second largest car manufacturer)
and Renault (a leading French vehicles
producers) formed an alliance in 1999, giving
both firms to access to each other markets
3) Franchising.- This involves a business
allowing others to trade under its name in
return for a fee and a share of the profits.
4) Mergers.- When two businesses agree to integrate
as a single organization. Merging with a foreign
company can help businesses to gain access to
overseas markets.
5) Acquisitions.- Also known as takeovers, occur
when one business buys out another by purchasing
a majority stake in the target company.
VODAFONE BOUGHT ESSAR (India mobile operator)
IN 2007. IT GAINED ACCESS TO THE HUGE
POTENTIAL MARKET IN THE WORLD’S SECOND
MOST POPOLOUS COUNTRY