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Chapter 1: international marketing bases

What’s marketing: marketing is the activity, set of institutions and processes for creating,
communicating, delivering and exchanging offerings that have value for customers, clients,
partners and society at large.

Philip Kotler: the art and science of choosing target markets and building profitable
relationships with customers.

Global strategy: operating in one or several activities (diversification, vertical integration),


geographical extension.

Business strategy: you will see if you develop, maintain, downsize, or abandon.

Strategic planning: Corporate level

- defining the company’s mission


- setting the company’s objectives and goals
- defining the business portfolio
- Planning marketing and other functional strategies.

Strategic marketing:

Art and science, this specify works on targeting markets and people.

Segmentation: 3 categories of countries: developed, developing and emergent countries.

Developed countries if gdp: pib>25000$/inhabitant

Emergent countries: growing by powers and needs

Segmentation for people consumers: demographic, physiographic (lifestyle activities,


interests and opinions), behavioral (consumption patterns, loyalty to brand).

Targeting means identify a set of potential buyers who share a common need or common set
of characteristics.

A segment is a group of potential buyers whose we think will going to react to our offering.
Positioning the offering: arranging my offering in order to occupy a special (clear, distinctive
and desirable) place in the mind of people and Customer, in relation with competitors and in
the mind of the target consumers.
Marketing: the art and science of building a profitable relationship.

What are the differences between domestic marketing and international marketing??

- Culture, politics, governments, economy, business, market fragmentation, finance,


stakeholders, data difficult to obtain, Control and coordinate across foreign markets.

Study case: Primark

Second study case:

- What are the reasons that make a company successful in international business?
- Consequently, what are the best practices that a company must implement to be
successful in international business?
1- According to HAMEL AND PRAHALAD, the firms that succeed internationally are those
who perceive the changes in the international environment and that are able to
develop strategies which enable them to respond accordingly. The firms that will do
well will base their success largely on the early identification of the changes and the
boundaries of markets and industries.

The increasing globalization of business driven by information technology has led many firms
to reexamine what contributes to their competitive advantage. They have recognize the fact
that it is the pool of personal knowledge skills and competencies of the firm’s staff that provide
its development. Consequently, they have redefined themselves as knowledge based
organizations.

2- Best practices for success:

Doole defined three major components and practices to the strategies of firms successfully
competing in international markets:

- A clear international competitive focus achieved through a deep knowledge of the


international market, a strong competitive positioning and a strategic perspective
which was truly international.
- An effective relationship strategy achieved through strong customer relations,
commitment to quality products and services and dedication to customer service
throughout international market.
- Well managed organization with a culture of learning: firms were innovative and
willing to learn, they showed high levels of energy and commitment to international
markets and they had effective monitoring and control procedures for all their
international markets.

Chapter 2: international marketing activities

Section 1: international product and service management

Success in international marketing depends to a large extent upon the value proposition, this
means satisfying the demands of the market and be sure that the product or service offered
is suitable and acceptable. More and more markets are reaching maturity and fewer products
can be differentiated by their core benefits and so they become commodities. However, when
we talk now about the product, we include additional elements such as packaging, warranties,
after sale services and branding. All these elements make up the total product and a complete
arrangement of tangible and intangible benefits for the customer.

Services are taking an increasing share of international trade but managing services
internationally poses particular challenges.

In many business sectors, product and service strategies are being affected by the increased
globalization of consumer taste, communications, technological advances and the
concentration of business activities. In the same time, however, given the level of competition
and the choice available, there is an increasing expectation among customers that their
individual needs will be met.

The three elements of the product or service:

1- the core product or service or benefits (the elements that consumers perceive as
meeting their needs and providing satisfaction through performance and image -
kotler), performance,
2- Attributes: the elements most closely associated with the core product such as
features, specifications, brading, packaging or design, size, color…
3- Marketing support elements: additional elements to the core product which
contribute to providing satisfaction: they include delivery, installation, guaranties,
after sale services…
Standardization and adaptation: products managers are balancing the efficiency benefits of
standardization in terms of economies of scale and experience effect with the need and cost
of adapting products and services to meet the needs of local customers, regulations and usage
conditions.

What determine the degree of adaptation to a foreign market?

- cultural factors
- product liability
- usage factors
- Legal standards.

What are the expectations of customers today regarding the products and services that they
intend to buy? Consequently what are the challenges that brands must face? What are the
new ground rules for branding?

Section 2: pricing for international markets

In international markets, pricing decisions are much more complex because they affected by
a number of additional external factors such as fluctuations in exchange rates, accelerating
inflation in certain countries and the use of alternative payment methods such as leasing or
counter trade.

Many factors and problems contribute to making effective pricing management one of the
most difficult aspects of international marketing to achieve as well as the market factors
associated with pricing decisions in each country, it’s necessary to deal with the complexities
of financing deals based in different currencies and trying to maintain cross border consistency
of pricing.

Exercise: Objectives of a strategy of pricing?

- Rate of return: cost oriented companies set prices to achieve a specific level of return
on investment and they may quote the same exworks price for both domestic and
international market.
- Market stabilization: a firm may choose not to provoke retaliation from the leader of
the market so that market shares are not significantly changed.
- Demand-led pricing: prices are adjusted according to an assessment of demand so that
high prices are charged when demand is strong and low prices are charged when
demand is weak.
- Competition-led pricing: in commodity markets, such as coffee, iron, wheat, cotton,
corn, world market prices are established through continual interaction between
buyers and sellers selling outside the narrow bend of prices that have been mutually
agreed will either reduce sales or unnecessarily.
- Pricing to reflect product differentiations: individual products are used to emphasize
differences between products targeted at various market segments. For example car
makers charge prices for the top of the range models which are far higher than it’s
justified by the cost of the additional features which distinguish them from the basic
models.
- Market skimming: the objective is to enter the market at high price and then to lower
the price regularly or even abandon the market.
- Market penetration: low prices can be used in order to rapidly increase sales and
market share discouraging competition at the same time.
- Early cash recovery: when a firm aims at generating cash rapidly, mechanisms such as
special offers, discounts, rigorous credit controls are used.
- Prevent new entry: low prices are establish on the market, this will indicate to potential
competitors that return will be low and price war will take place.

Setting the price is strategic in addition to this, a number of issues relate to the management
of transactions and particularly to the reduction of risk when trading in high risk countries.

What becomes quite clear, in international pricing is that there is a need not only to use pricing
for financial objectives but also as part of an integrated strategy along with other marketing
mix elements to respond positively to the opportunities and threats of foreign markets.