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promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational objectives”
- External analysis:
Customer
Competitor
Market/submarket analysis → Porter’s diamond and Porter’s Five Forces model
Environmental analysis via DEPEST
The external analysis can make you come up with opportunities (O) and threats (T)
- Internal analysis
Performance analysis
Marketing strategy
Marketing mix
The internal analysis can make you come up with strengths (S) and weaknesses (W)
Porter came up with a market/submarket analysis, which are the basis for competitive advantage. A three
stage model for CA;
3. Competitors:
- Competitive triangle
- Benchmarking
Chapters 6+7
- Uncertain economy
- Rapid globalisation
- Social networks; competitive disadvantage if you as a company do not join a social network
- Demand side;
- Supply side;
E-business
Mondialisation
Markets more transparent, more data
Products/services more and more similar
Product life cycles shorter and shorter
More competition
- Economic forces; level of development “Big Mac Index” > See Global Marketing, Hollensen ch. 6
- Political forces; unrest, laws, corruption, trade marks, patents > See Global Marketing, Hollensen ch. 6
Food/Eating Habits
Time consciousness
Family and friends
Values and norms
Beliefs and attitudes
Business/Work Habits
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Lecture 3
“Chapter 8” > Emphasis on INTERNAL analysis
Recap:
- Internal analysis
Performance analysis
Marketing strategy
Marketing mix
The internal analysis can make you come up with strengths (S) and weaknesses (W)
You should build a Global Marketing Plan (Global Marketing, Hollensen, fig 2.1)
1. The decision whether to internationalize > Framework discussed in lecture 1, Global Marketing, Hollensen
figure 1.6
Need recognition
Information search (“Where??”)
Evaluation alternatives (“How am I in the eyes of my consumer??”)
Purchase decision
Post purchase behaviour (“Is my consumer satisfied??”)
Figure 8.2
Step 1: “Segmentation is the process of dividing the world market into distinct subsets of customers
that have similar needs”
Preliminary
Fine-grained > ABC countries > Global Marketing, Hollensen
Step 4: Micro-segmentation
“Targeting aims at evaluating and comparing the identified segments in order to select the one (or more than
one) segment with the highest potential.”
Finally: We segmented and targeted; how to enter the market? In other words… What market expansion
strategy to choose? Incremental VS Simultaneous and Concentration VS Diversification. See Global Marketing,
Hollensen for in depth theory and definitions
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Lecture 4
“Chapter 9+11+12” > How can I serve my customer best?
So, I have segmented the market in a meaningful way (Lecture 2+3), how to be remembered? (= Positioning)
And how to enter the international markets?
Positioning = “the location of a product in the consumers’ mind”. Visualised by a positioning map. Positioning
maps show consumer perceptions of brands vs competing products on important buying dimensions.
… You want to achieve the best location in your consumer’s mind in order to achieve the greatest customer
equity. Strategies;
- By Product Attribute(s)
- By its Benefits
Effective statements: what is the benefit of the product and how is it different
- By Usage Occasion
- By Users
- vs Competitors
- As a Substitute
Emotional positioning = Positioning is based on higher level emotional needs, with more emphasis on image
Entry strategies… ;
- Indirect strategies VS Foreign Direct Investment (FDI) strategies
- Export modes (ch.10), intermediate modes (ch. 11) and hierarchical modes (ch. 12)
Export Modes
‘Production in home or third countries, products transferred directly or indirectly to host market. The central
question: Which functions controlled by external agents, which by company itself?’ > Partner Mindshare
Partner mindshare = The measurement of the strength of a relationship between manufacturer and export-
partner in terms of trust, commitment and cooperation. Keep in mind that partner mindshare affects your
brand image, so be selective!! → Use framework, See Global Marketing, Hollensen, figure 10.4
- Indirect export
- Direct export
- Cooperative export
Chapter 11
Intermediate modes = ‘No full ownership by the parent firm! It can be shared (Joint Venture) or contracted
(Licences, Franchises). Done to share knowledge and skills.’
Chapter 12
Hierarchical modes = ‘Firm completely owns and controls the entry mode. Requires huge investment and risk,
but greater influence and control over (local) marketing’
- Level of responsibility over value chain functions to local management, depending on orientation:
Ethnocentric
Polycentric
Regiocentric
Geocentric
Advantages
Disadvantages
Franchising
Advantages:
Disadvantages:
- Cultural problems
Joint Venture
Advantages:
- Sharing of resources
Disadvantages:
- Sharing of profit
- Loss of control
Local Manufacturing
Advantages:
- Higher profit
Disadvantages:
- Expropriation risk
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Lecture 5
“Chapter 14” > What should I think about when aiming my strategy at product?
Marketing programme:
Strategy
Marketing Mix
Recap lecture 1: When developing a product you should think in solutions and benefits for your consumer.
The ‘P’ of product is defined by: core product benefits, product attributes and support services. See Global
Marketing, Hollensen figure 14.1. Ability to standardise goes from high in core product benefits to low in
support services.
Brand equity = the premium a customer / consumer would pay for the branded product or service compared
to an identical unbranded version of the same product / service. In other words: Strong, relevant and unique
associations that consumers have with the brand
Effect of branding on buyer decision process (Recap: lecture 3; Need recognition, Information search
(“Where??”), Evaluation alternatives (“How am I in the eyes of my consumer??”), Purchase decision, Post
purchase behaviour (“Is my consumer satisfied??”). With good branding and high brand equity; consumers skip
step 2+3!!
So, you have a branded product and you keep your brand for yourself (manufacturer’s brand); you can then
serve a single market or multiple markets.
- Single Brand
- Multiple Brands
Market segmentation
Mased on assumption of market heterogeneity
- Local brands
- Global brands
- Standardized Product
- Localized Product
- Global Product
Product modification may be necessary due to local use conditions (Netherlands: yoghurt is a dessert, USA:
yoghurt is breakfast), local customs and culture (No porc for Islamics), etc.
Another important thing to keep in mind: Country of Origin effect = The effect on quality perceptions caused
by knowledge of the production country location for the product
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Lecture 6
Chapter 15
Price = The amount of money charged for a product or service, or the sum of the values that consumers
exchange for the benefits of having or using the product or service > Price says something about the product
Pricing strategies:
Note: this is all about new products entering the market. Which price level should you as a firm maintain?
- Market-skimming = Setting a high price for a new product to skim maximum revenues layer by layer from
segments willing to pay the high price
See graph in slides; has to do with the market equilibrium > setting a price above equilibrium. In time
price will drop to equilibrium
- Market-pricing
- Market-penetration = Setting a low price for a new product in order to attract a large number of buyers and a
large market share.
Take the refrigerator as an example. Once it was found, people started buying refrigerators and profits were
huge. After a while, everyone has a refrigerator (market is at maturity) and as a refrigerator is a durable good
(you buy one and assume you do not have to buy another in the next 5-10 years) the profits start declining
fast.
> In order to save yourself as a company: add features to the product once the market is at maturity.
Most critical thing to global marketing!! Think back to the Big Mac Index at lecture two and Global Marketing,
Hollensen. It would be crazy to ask the same price for a Big Mac in a developing country as in a developed
country.
For example: Pharmaceuticals > once an American pharmaceutical firm entered the African market with a
medicine against HIV. As they had huge R&D costs for developing the medicine, they asked a very high price.
The African government intervened and made sure the price dropped, as the medicine was a necessity.
> See Global Marketing, Hollensen figure 15.6 for an international pricing framework!!
- Operational decisions:
Cost-based pricing
Value-based pricing → Chanel n.5 VS Davidoff
Competition-based pricing
Other
Psychological pricing
Price discrimination / price differentiation
Promotional pricing
Currency in which price is stated
International issues:
- Transfer pricing (MNC’s!) = Pricing transactions between buyers and sellers that
Companies use them to: Shift profits from high-tax to low-tax countries, Create and maintain barriers to entry,
Manage levels of market involvement
- Price escalation = the added costs incurred as a result of exporting products from one country to another
(shipping costs, trade barriers, taxes, etc.)
from one country to another where they are sold by unauthorized persons or organizations”
Causes
Negative effects
Chapter 16
‘Availability’; people want their products at the right place on the right time.
- Managing logistics
!! However, also: channel objective = availability (number of resellers, size of resellers, size of sales share with
retailers)
Building strong brands through products that are bundles of benefits, for which the
perceived price fits the perceived value. Building strong brands with international
coverage through channels that fit the product and the country
Notes on tutorial 6, as the tutorial case in week six is a practice exam and it is important you know how to
answer the exam question correctly. You will get something similar at your final!
The Philips iron for men case is very important!! Exam will be similar.
Notes on Q1:
P of Product; don’t only come up with product features, but also services, branding, CoO-effect, et cetera
P of Promotion; you should also come up with what message you want to share: objective of promotion? Not
only name the media via which you do your promotion but also name cognitive/affective/conative!!
P of Price; pricing strategy (skimming/penetration?) > relation of price to competitor’s price (PLC?) > base of
price (cost/value/competition?)
Learn characteristics of each marketing mix instrument by heart, as you have to come up with several
characteristics per marketing mix instrument.
Notes on Q2:
UAI = willingness of people to take risk.
High > Make sure you offer people guarantees, service, trials and explanations
Low > Make sure you put the emphasis on the newness of the product, so that people are eager to try it out
High > Put the emphasis on the status the product offers you
As you can see, Hofstede’s dimensions force you to adapt your marketing mix to each and every single country
you enter!!
Even the packaging of a product could be communication and promotion > Walking with say a cup of Douwe
Egberts coffee is advertising for Douwe Egberts.
‘Break through the clutter’ ; getting your message across and getting a positive response from the audience
Communication takes place only when meaning is transferred and it is only effective if the meaning is
understood in the way you meant it.
Context of home country (the sender sends a message to the foreign country) = coding ; Context of foreign
country (the message from the sender is sent via a medium and is received by a receiver or the audience) =
decoding.
> Due to cultural differences coding and decoding might differ in meaning. For example: using an owl in your
logo might be interpreted as wisdom in western countries, which is meant by the firm; in other countries it
might be interpreted completely different and as something negative. That would have a negative impact on
your brand equity.
Also, noise might have a negative impact of the coding > decoding process. Noise might also be the extent of
humour in an advertisement; Centraal Beheer Achmea had really funny advertisements on the television,
‘Even Apeldoorn bellen’, but due to the extremely high level of humour, people had no clue the campaign was
about Centraal Beheer Achmea (insurance), they just saw how funny it was.
1. Objective setting
You want people to be aware of your product (Awareness); You want people to know your product
(Knowledge); You want to people to have a positive attitude towards your product (Liking); You want people to
prefer your product over other products (Preference); Convincing people should buy (Conviction); You want
people to purchase your product (Purchase)
2. Budget decisions
Percentage of sales/affordable approach; competitive parity approach; objective and task approach >
Definitions see Global Marketing
3. Media decisions
- AIDA (Awareness, Interest, Desire, Action) framework guides message design (Objective = guide)
- Message format : Design, layout, copy, colour, shape, movement, words, sounds, voice,
The highest possible extent of one-way communication is advertising via newspaper, magazines, radio, TV. The
highest possible extent of two-way communication is personal selling via sales presentations for example.
- Media decisions: Where and When? ; Reach, Momentum, Media Mix, Gross Rating Points, Frequency
- Drivers:
- Constraints
Cultural diversity
o Language
o Perception
Media limitations
o Availability
o Cost effectiveness
Regulation
Management and control
- Benefits of Standardization
Cost savings
o Economies of scale in production and marketing
o Minimizes product/advertising development costs
- Barriers to Standardization
So shall you adapt you product or promotion? See framework offered in Global Marketing, Figure 11.3
You should ask yourself: Does the specific advertising message & media strategy need be changed because of
environmental or cultural requirements?
From there you can take two positions: ‘One world, One voice approach’ or the Localized Approach
Use coupons
Giving a discount and saying 1 for €X or say 4 for €X; 4 for €X increases sales more than 1 for €X
Functional attributes
Design
Brand name
Package
Label
Country-of-Origin effect
Services/guarantees
- Promotion: awareness, image, sales [new/existing customers]
Place: Availability
Channel structure
o Types of intermediaries
o Coverage (intensive, selective, exclusive)
o Length
o Types of channels
o Multichanneling
Managing and controlling channels
Logistics