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International Marketing Concept
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External Marketing
Comparative Marketing

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Global Marketing

International Trade
Exporting

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International Marketing takes place when an


organization markets its products in two or more
countries .

Global Marketing is concerned with planning and


conducting transactions across national borders to satisfy
the objectives of individuals and organizations . Global
Marketing ranges from export-import trade to licensing
and comprises multinational activities such as joint
ventures , wholly owned subsidiaries , turnkey
operations, and management contracts . Global Marketing
also involves a wide variety of players .

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Mass


production

A firm moves beyond domestic markets into international


trade for several reasons :

* Potential demand in foreign markets .


* Saturation of domestic markets .
* Comparative advantage : some Countries possess unique
natural or human resources .
* Technological advantage : For example the U.S.
dominated the Computer industry for many years because
of technology developed by companies such as IBM and
Hewlett- Packard .

Major Motivations to Internationalize

Proactive
Motivations

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Reactive
Motivations

* Competitive Pressures.
* Overproduction.
* Stable or declining
domestic sales .
* Excess Capacity .
* Saturated domestic
market .
* Proximity to
customers and ports .

* Profit advantage .
* Unique Products .
* Technological advantage .
* Exclusive market information .
* Managerial urge .
* Tax benefits .
* Economies of scale .

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Evolution of Global Marketing



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* Globalization



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* : Glocalization

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Internet Marketing
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Electronic Marketing , Home Marketing ,

Cyber Marketing .
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Economic Approach
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Behavioral Approach
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Functional Approach

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Managerial Approach

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Decision Making Approach

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Strategic Approach

* .

Political Approach

* .
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Cases Study Approach


Integrated Approach

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Systems Approach

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Comparative Approach

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Theories of International Trade
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Classical Theory

Theory of Absolute Advantage

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Theory of Comparative Advantage
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New Classical Theory

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- Technological Gap Model





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The fundamentals of marketing apply internationally in
the same way they apply domestically .
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Challenges in International Marketing :
Corruption .
Technological pirating.
High cost of product and
communication
adaptation .
Shifting borders .

Huge foreign
indebtedness

Unstable governments.

Foreign-exchange
problems .
Foreign-government entry
requirements and
bureaucracy
Tariffs and other trade
barriers .

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Organization's Internal Environment

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Stake Holders


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External Environment




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- External Microenvironment

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External Macro environment

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Economic Environment


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Political Environment

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Cultural Environment


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Social Environment

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- Technological Environment


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Biotechnology


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Legal Environment


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Competitive Environment

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Natural Environment

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Organizational Analysis
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External Environmental Scanning
Opportunities
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Threats
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Internal
Capability
assessment

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)SWOT Matrix : (
SWOT

. SWOT
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) Internal Factors Evaluation Matrix ( IFEM


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) External Factors Evaluation Matrix ( EFEM

). Competitive Profile Matrix (CPM


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Market Size
Market Growth
Market Intensity

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Diversification
Strategy

Large number of
Markets

Concentration
Strategy

Small number of
Markets

: ()
Expansion Strategy is determined by market -, mix-,
and company-related factors .

.
Factors Affecting Choice between : ()
Concentration and Diversification Strategies
.
Diversification Concentration
Factor
Low
High
Market growth rate
High
Low
Sales Stability
Increasing
Sales response function
Decreasing
Competitive Lead time
Short
Long
High
Low
Spillover effects

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High

Low

High

Low

High
High
High

Low
Low
Low

Need for Product adaptation .

Need for Communication


adaptation
Economies of Scale in
distribution
Extent of Constraints
Program Control requirements


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Secondary Market
Primary Market

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Tertiary Market

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Bases for
International Market
Segmentation

Marketing
Management Bases

Environmental
Bases

Geographic
Variables

Political
Variables

Product-Related
Variables

Economic
Variables

Promotion Related Variables

Cultural
Variables

Price -Related
Variables

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Distribution Related Variables

Bass for Global Market Segmentation : ()

James M. Livingstone
.

. -
Western Developed Nations Group .
. -
Western Developing Nations Group .
. -
Developing / undeveloped Nations Group .
. -
Marxist / Communist / Socialist Nations Group .

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Internationalization Decision of Marketing
International Market to be served

Products or Services to be Marketed

Mode of Market Entry

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. Philip Kotler
Politics
. Public Opinion


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Marketing Mix is the set of marketing tools that the firm
uses to pursue its marketing objectives in the target market

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4C 'S

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4 Ps
Product

Price

Place

Promotion

4Cs
Customer Value / Solution
Customer Cost

Convenience

Communication

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4Cs
. 4Ps

Promotion Mix

Sales Promotion

Offering Mix

Advertising

product
Company Services
Prices

Sales Force

Distribution
Channels

Public relations

Direct mail ,
telemarketing ,
and Internet

Marketing Mix Strategy

Target
Customers

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Standardization Strategy

VS.

Customization Strategy

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) Globalization of the Marketing Mix : (
Standardization
Partial
Full
C
N
C
C
C/N
C
C
C

Adaptation
Full Partial
N
N
N
N
C
C
C

N
N
N
N

Marketing Mix Elements


Product design
Brand name
Product Positioning
Packaging
Advertising theme
Pricing
Advertising Copy
Distribution
Sales Promotion
Customer Service

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Major Decisions in International Marketing
Deciding on
the
marketing
organization

Deciding on
the
marketing
Program

Deciding
how to
enter the
market

Deciding
which
markets
to enter

Deciding
whether
to go
abroad

) : (

:
C

MM

STP

Feedback

) : (
Research = R .
Segmentation , Targeting , and Positioning = STP

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Marketing Mix = MM .
) (.

Implementation = I .

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Control = C
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:
Core Product
.

Actual Product
.
Augmented Product
.

Augmented
Product
Installation
Tangible
Product

Packaging
Features

Core
Product

AfterSale
Service

Brand
Name

Delivery
and
Credit

Core
Benefit
or
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Service

)Elements of a Product : (

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In deciding the form in which the product is to be


marketed abroad , the firm should Consider three sets of
factors :
the market (s) that have been targeted ,
the product and its characteristics ,and
Company characteristics , such as resources and
policy .


International product life Cycle Theory

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)New Product Stage ( Product Orientation Phase

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Ethnocentric Approach


. Home Country mentality


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Mature Product Stage ( Market Orientation Phase or
) Maturity Phase

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) Standardized Product Stage ( Price Orientation Phase

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. ( Competitive Advantage

Globalization Stage

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Geocentric Approach Super national

Mentality



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:
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Intra-Industry Cycle
:
Inter-Industry Cycle



.
To say that a product has a life cycle is to assert four
things :
products have a limited life .
product sales pass through distinct stages ,each
posing different challenges , opportunities , and
problems to the seller .

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Profits rise and fall at different stages of the product


life cycle .
Products require different marketing ,financial ,
manufacturing , purchasing and human resource
strategies in each stage of their life cycle .
Most product life - cycle curves are portrayed as bellshaped . This curve is typically divided into four stages :
introduction , growth , maturity , and decline .

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Not all Products exhibit a bell-shaped PLC. Researchers
have identified from six to seventeen different PLC patterns .
Scalloped
Pattern

Cycle-recycle
pattern

Primary
Cycle

Recycle

Time

Fad

Growth -slumpmaturity pattern

Time

Time

Style

Fashion


Time

Time

Time

Product Positioning

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A firm has four basic alternatives in approaching
global markets :
1- Selling the product as is in the global marketplace ,
2- modifying product for different countries and / or regions ,

3- designing new products for foreign markets , and


4- incorporating all the differences into one product design
and introducing a global product .
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Standardization Strategy

.
CentoCentric Approach or Classical global mentality .

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Adaptation / Customization Strategy



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Polycentric Approach or Host Country mentality

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High
Need of
Adaptation
Degree of
Cultural
Grounding

Low
Consumer

Industrial / Technology Intensive


Nature of Product
) (

Strategic Adaptation to Foreign Markets

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Adaptation /
Customization
Strategy

Standardization
Strategy

VS.

The need to customize Products

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Physical Characteristics of goods
.
Product Quality .
.
Design .

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. Variety Strategy

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.( Variety Seeking Strategy



Product
Develop New
Product

Adapt
Product

)(2) Product adaptation (5


(4) Dual adaptation Product
invention .
.

Do Not change
Product
(1) Straight extension.

)(3
Communication
adaptation .

Do Not change
Promotion
Adapt
Promotion

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Five international Product and Promotion Strategies
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Price is the only element of the marketing mix that is


revenue-generating ; all of the others are costs .

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Uncontrolable Factors
Controlable Factors

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Uncontrolable Factors
Controlable Factors

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The Firm has to consider many Factors in setting its
pricing policy .

Target Market Analysis

)(1

(2) Mix Composition


Market

)(2

Pricing Policy Selection

)(3

Pricing Strategy Determination

)(4

Specific Price

)(5

)Stages in Setting of Prices : (

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SELECT PRICING OBJECTIVE

SELECT METHOD OF DETERMINING THE BASE PRICE :


Cost - Plus
Price based on
Price Set in
pricing
both demand
relation to
and costs
market alone

DESINGN APPROPRIATE STRATEGIES


Price VS. nonPrice
Freight Payments
Leader Pricing
Competition
One Price VS. Flexible Price
Everyday low VS. high- low
Skimming VS. Penetration
Psychological Pricing
Pricing
Discounts and Allowances
Resale Price Maintenance

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The Price - determination Process : ()

(1) Selecting the pricing objective


(2) Determining demand

(3) Estimating Costs

(4) Analyzing Competitors' Costs,


Prices , and offers
(5) Selecting a Pricing method
(6) Selecting a the Final Price

Setting Pricing Policy : ( )

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:
.
International Involvement
Exporting Intra company Foreign -Market
Pricing

Pricing
Situation

Pricing

First-Time
Pricing
Changing
Pricing
MultipleProduct Pricing
)International Pricing Situations : (
-

Export Pricing


. :

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Ex-Factory

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1. Market conditions in the foreign country .
2. Completion in the foreign country .
3. Reasonable profit for the foreign affiliate .
4. Income taxes in the home country .
5. Economic conditions in the foreign country .
6. Import restrictions .
7. Customs duties .
8. Price controls .
9. Taxation in the foreign country .
10. Exchange controls .

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Competitiveness in the international marketplace .
Reduction of taxes and tariffs .
Management of Cash Flows .
Minimization of Foreign exchange risks.
Avoidance of Conflicts with home and host governments .
Internal Concerns Such as goal Congruence and motivation
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The term channel design refers to the length and the
width of the channel employed . Length is determined by
the number of levels , or different types , of intermediaries.
Customer

Retailer

Wholesaler

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But this traditional channel will vary by product type
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In general , companies use one or a mixture of the


following distribution systems :
1- the firm sells directly to customers through its own field
sales force ;
2- the company operates through independent intermediaries
,usually at the local level ; or

3- the business depends on an outside distribution system


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SELECTIVE

Distribution
through every
reasonable
outlets in a
market

Convenience goods

EXCLUSIVE

Distribution
through multiple,
but not all
reasonable
outlets in a
market

Distribution
through a single
wholesaling
middleman
and / or retailer
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shopping goods

specialty products

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External
Internal

Customer
Company objectives
Characteristics
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Cost
Coverage
Control
Continuity
Communication

Culture
Competition


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Channel Intermediary Types: ( )

Foreign ( Direct )
Brokers
Manufacturer's
Representatives
Factors
Managing agents
Purchasing agents

Agents
Domestic ( Indirect )
Brokers
Export agents
EMCs
Webb-Pomere associations
Commission agents

Distributors
Distributors / dealers
Domestic wholesalers
Import jobbers
EMCs
Wholesalers / retailers
ETCs
Complementary marketing

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Sources for Finding Intermediaries :


Governmental Agencies .
Private Sources .

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Data Sources for Locating Foreign Intermediaries
1. Distributor inquiries .
2. U.S. Department of Commerce :
New Product Information Service
Trade Opportunities Program
Foreign Traders Index
Agent / Distributor Service
World Traders Data Report
3- Trade Sources :
Magazines , journals
Directories
Associations
Banks , advertising agencies , carriers
4-Field Sales Organizations .
5- Customers .
6- Direct- mail solicitation / contact of previous applicants.
7- Trade Fairs
8- Independent Consultants

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Selection Criteria for Choosing an International
Distributor

Characteristics
Goals and Strategies
Size of the Firm
Financial Strength
Reputation
Trading areas covered
Compatibility
Experience
Sales Organization
Physical Facilities
Willingness to carry inventories
After-Sales Service Capability
Use of Promotion
Sales Performance

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Weight Rating

Relations with local government


Communications
Overall attitude

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Demand goal
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Promotion

Price

Demand goal
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Promotion

Price

Demand
without
promotio
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Quality

Demand
without
promotio
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Quality

Changing the shape (or


elasticity) of the demand Curve

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Push Strategy

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PUSH STRATEGY
Consumer

Retailer

Wholesaler

Producer

PULL STRATEGY
Consumer

Retailer

Promotion effort

Wholesaler

Producer

Product Flow

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Communication is the verbal or nonverbal transmission of
information between someone wanting to express an idea and
someone else expected or expecting to get that idea .

Message

RECEVER

Encoding

Decoding

SENDER

Media

Noise

Response

Feedback

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Elements in the Communication Process

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ENCODING
THE
MESSAGE
Create an ad ,
display, or Sales
Presentation

DECODING THE
MESSAGE
Receiver
Compares
message to frame
of reference

MESSAGE
CHANNEL
Select the media
or other vehicle
to carry the
message

MESSAGE As
INTENDED
A promotional
idea in
marketer's mind

FEEDBACK
Impact measured
using research,
Sales, or another
measure

MESSAGE As
RECEIVED
Knowledge,
beliefs, or
feelings of
receiver changed

NOISE
Competing
ads, other
distractions

RESPONSE
Ranges from
simple
awareness to
purchase

: ( )
The Communication Process in Promotion

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Advertising is any paid from of non personal
presentation and promotion of ideas , goods , or services by
an identified sponsor .

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THE END
The global environmental changes affecting international
marketers and alternative managerial responses to these
changes . Global marketing is a complex and difficult

activity , yet it affords many challenges and opportunities .


If the global environment were constant , there would
be no challenge . To benefit from the opportunities and
deal with the adversities of international trade , business
needs to adopt the global marketing concept .

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:
- Michael J.Etzel et al., Marketing , N.Y.:
McGraw-Hill Companies , Inc ., 1997 .
- Michael R. Czinkota and Llkka A . Ronkainen ,
Global Marketing , N.Y.: Harcourt Brace&
Co.1995.
- Philip Kotler, Marketing Management , The
Millennium Edition ; N.J.: Prentice Hall
International , Inc. , 2000 .

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MISSION
* Sales goals .
* Advertising
objectives .

MONEY
Factors to consider :
* Stage in PLC .
* Market share and
consumer base .
*Competition and
clutter .
* Advertising
Frequency .
* Product
substitutability

MESSAGE
* Message generation .
* Message evaluation
and selection .
*Message execution.
* Social - responsibility
review.

MEASUREMENT
*Communication
impact .
* Sales impact .

MEDIA
* Reach , frequency,
impact.
*Major media types.
*Specific media
vehicles .
* Media timing .
* Geographical
media allocation .

The Five Ms of Advertising : ( )


Sales Force
Objectives

Sales Force
Strategy

Sales Force
Structure

Designing a sales force

Recruiting and
selecting sales
representatives

Training sales
representatives

Sales Force
Size

: ( )

Supervising
sales
representative
s

Managing the sales force

Sales Force
Compensation

Motivating
sales
representatives

: ()

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Evaluating
sales
representatives

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