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FOUNDATION IN ARTS
FOUNDATION IN BUSINESS
Introduction
to
marketing
Objectives
• Definitions of marketing
• Implications of marketing
• The marketing concept
• The marketing management process
Marketing
• Definition of marketing:
– Marketing is about understanding
customers and finding ways to
provide products or services which
customers demand
– Understand customers needs and
wants in order to satisfy their
satisfaction
Marketing
Goals:
1. Attract new customers by promising
superior value.
2. Keep and grow current customers by
delivering satisfaction.
3. To make customers aware of the
products and services
Marketing Defined
• Marketing is the activity, set of instructions, and
processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and
society at large.
8
Needs, Wants, and Demands
Needs:
• The most basic concept underlying marketing is that of human needs.
• Human needs are states of felt deprivation.
• Human have many complex needs:
– Physical needs for food, clothing, warmth, and safety
– Social needs or belonging and affection
– Individual needs for knowledge and self – expression
Wants:
• Want are the form taken by human needs as they are shaped by culture and
individual personality.
• People have almost unlimited wants but limited resources.
• They want to choose products that provide the most value and satisfaction for
their money.
Demands:
• When backed by buying power, wants become demands.
• Consumers view products as bundles of benefits and choose products that give
them the best bundle for their money.
9
Products and Services
Product:
• Anything that can be offered to a market to satisfy a
need or want.
• The concept of product is not limited to physical objects
– anything capable of satisfying a need can be called a
product.
Services:
• In addition to tangible goods, products also include
services, which are activities or benefits offered for sale
that are essentially intangible and do not result in the
ownership of anything.
10
Values, Satisfaction, and Quality
Values:
• Customer value is the difference between the values the customer gains from owning
and using a product and the costs of obtaining the products.
• Customers often do not judge product value and costs accurately or objectively. They
act on perceived value.
Satisfaction:
• Customer satisfaction depends on a product’s perceived performance in delivering
value relative to a buyer’s expectation.
• If the product’s performance falls short of the customer’s expectations, the buyer is
dissatisfied.
Quality:
• Customer satisfaction is closely linked to quality.
• Quality has a direct impact on product performance.
• Quality can be defined as “freedom from defects”.
• TQM programs designed to constantly improve the quality of products, services, and
marketing processes.
11
Exchange, Transactions, and
Relationships
Exchange :
• The act of obtaining a desired object from someone by
offering something in return
Transaction :
• A trade between two parties that involves at least two
things of value, agreed – upon conditions a time of
agreement, and a place of agreement.
Relationship marketing :
• The process of creating, maintaining, and enhancing
strong, value – laden relationships with customers and
other stakeholders
12
Markets
The set of all actual and potential buyers of a
product or service
Communication
Products / Services
Industry Market (a
(a collection collection of
of sellers) buyers)
Money
Information
Competitors
Marketing
intermediaries End user market
Suppliers
Company
(marketer)
14
Marketing Management
The analysis, planning, implementation,
and control of programs designed to
create, build, and maintain beneficial
exchanges with target buyers for the
purpose of achieving organizational
objectives.
15
The Marketing Process
A simple model of the marketing process:
• Understand the marketplace and customer
needs and wants.
• Design a customer-driven marketing strategy.
• Construct an integrated marketing program that
delivers superior value.
• Build profitable relationships and create
customer delight.
• Capture value from customers to create profits
and customer quality.
A Simple Model of the
Marketing
18
Production Concept
The philosophy that consumers will favour
products that are available and highly
affordable and that management should
therefore focus on improving production
and distribution efficiency.
19
Product Concept
The philosophy that consumers will favour
products that offer the most quality,
performance, and innovative features.
20
Selling Concept
The idea that consumers will not buy
enough of the organization’s products
unless the organization undertakes a large
– scale selling and promotion effort.
21
Marketing Concept
The marketing management philosophy
that holds that achieving organizational
goals depends on determining the needs
and wants of target markets and delivering
the desired satisfactions more effectively
and efficiently than competitors do.
22
Societal Marketing Concept
The idea that the organization should
determine the needs, wants, and interests
of target markets and deliver the desired
satisfactions more effectively and
efficiently than competitors in a way that
maintains or improves the consumer’s and
society’s well – being.
23
Three Considerations Underlying The Societal Marketing
Society
(Human welfare)
Societal
marketing
concept
Consumers Company
(Want satisfaction) (Profits)
24
MARKETING CHALLENGES
INTO THE NEW CENTURY
• GROWTH OF NON-PROFIT MARKETING
• THE INFORMANTION TECHNOLOGY BOOM
• RAPID GLOBALIZATION
• THE CHANGING WORLD ECONOMY
• THE CALL FOR MORE ETHICS AND SOCIAL
RESPONSIBILITY
25
THE NEW MARKETING LANDSCAPE
26
Topic 2
The Marketing
Planning
Today’s discussion
• Overview of Marketing
Planning
–Marketing Planning Defined
–Contents of a marketing Plan
Marketing plan - Def
• A marketing plan is a business document
written for the purpose of describing the
current market position of a business and
its marketing strategy for the period
covered by the marketing plan.
• Marketing planning is the process to
identify or analyze current situation and
information in the market.
Purpose Of A Marketing Plan
• Acts as a roadmap
• assist in management control and
monitoring the implementation of strategy
• informs new participants in the plan of
their role and function
• to stimulate thinking and make better use
of resources
Content Marketing Plan
• Executive Summary
• Situation Analysis
• Marketing Objectives
• Strategy and Tactics
• Monitors and Controls
• Financial Documents
Executive Summary
A one to two page statement of the key
actions to be taken, the major reasons for
those actions, the anticipated results and
the associated risks. The executive
summary presents an abbreviated
overview of the marketing plan.
Situation Analysis
• Review of Status and Future
Outlook
– Not just data, but implications
– Brevity, prioritization of information
– Diagnostic, not descriptive
– Contains:
• Category Analysis and Forecast Trends
• Sales Analysis
• 3 C Analysis
• Planning Assumptions
• Summary (Problems and Opportunities)
Situation Analysis - Market
Analysis- 3C(Company)
An intensive evaluation of the businesses’
objectives, capabilities, vulnerabilities, and
status.
DEFINING
RESEARCH
OBJECTIVES
DEVELOPING
RESEARCH PLAN
Primary Secondary
Research Research
59 business studies
Primary research
• Primary research involves finding out
new, first-hand information.
ALWAYS
USE THIS FIRST
Secondary research
Benefits Drawbacks
Often quick and easy Data may not be
to collect reliable or up-to-
date
71
Sample size and sampling methods-
Introduction
73 business studies
Reasons for Drawing a Sample
75
Relationship between population
and sample
Sampling
• Sampling involves selecting a
relatively small number of elements
(sample) from a larger defined group
(population) and expecting the
information gathered from the small
group will enable judgments about the
larger group.
Sample Design
• Sample design covers the method of
selection, the sample structure and plans
for analysing and interpreting the results.
• Two different type of sampling method:
A. Probability sampling
B. Non-Probability sampling
Types of Samples Used
Samples
The Marketing
Environment
Learning Objectives
• After studying this chapter, you should be able to:
– Understand the nature of the marketing
environment and why it is important to
marketers.
– Describe the major components of the social
environment and how trends in the social
environment affect marketing.
– Understand how the economic environment
affects marketing.
– See how the political/legal environment offers
opportunities and threats to marketers.
– Appreciate the importance of the
technological environment to marketers.
The Marketing Environment
•The marketing environment
consists of all factors external
to an organization that can
affect the organization’s
marketing activities.
External Marketing
Environment
External Environment
is not controllable Social
Change
Demographics Ever-Changing
Marketplace
Economic
Product Conditions
Distribution
Promotion
Price
Competition
Target Market
Political &
Legal Factors
Technology
Environmental
Scanning
PESTLE Analysis
• Political
• Economical
• Social Culture
• Technology
• Legal
• Environmental
Environmental Scanning
• Economic constraints
– Economic growth
– The Business cycle
– Inflation and Deflation
– Unemployment
– Exchange Rates
ECONOMIC GROWTH
SLUMP Recession
Time
The Business cycle
• BOOM:
–The economy is at its peak
The Business cycle
• SLUMP:
–This is the bottom of the trade cycle
The Business cycle
• GROWTH (RECOVERY):
–A period when the economy moves
between recession and a boom.
The Business cycle
• Recession
–This refers to a situation where the
G.D.P. of an economy has fallen for
two successive quarters (6
months).
Is a recession all bad?
Inflation
P
Inflation
• Inflation:
– DEMAND PULL INFLATION
– COST PUSH INFLATION
DEMAND PULL INFLATION
• Currency – stronger
APPRECIATION
• currency - weaker
DEPRECIATION
Exchange Rates
Strong
Pound
Imports
Cheap
Exports
Dear
WHAT HAPPENS WHEN THE £
CHANGES IN VALUE?
• CONCLUSION
– A strong RM or an increase in the value of the
RM makes it more difficult for exporters to sell
their goods abroad. This is because
foreigners have to pay more in order to buy
our goods.
• The Malaysia exporter could lower the
price but then will lose some profit and
may make a loss.
Advantages of a strong pound
• Import cheap –
– it is cheaper to import raw materials,
components and capital inputs
– Business more competitive
Advantages of a strong pound
• Cheaper imports
– Leads to rising import penetration and larger
trade deficit
– E.g. the £28bn trade deficit in goods in 2000
Disadvantages of a strong pound
• Product-Related Regulation
Company Protection
• Patent Law
-for ideas and inventions
• Copyright Law
-for written works
The Political/Legal Environment
• Product-Related Regulation
Consumer Protection
• Nutritional Labeling & Education Act
Disadvantages
Incresea cost of production
The Technological Environment
• Communication:
– Faster…………..
– More efficient…………..
– helps speed up the movement of
information
– improves the analysis of information
• Communication is improved through
the use of the intranet and Internet.
Technology and marketing
Number of
People
Behavior
The Social Environment
Demographics
5-4
Why do we need to
study
Consumer Behaviour?
– Need to understand:
• why consumers make the purchases that they
make?
• what factors influence consumer purchases?
• the changing factors in our society.
Why should Consumer Behavior be Studied
Maslow’s
Hierarchy
of Needs
A method of classifying human
needs and motivations into five
categories in ascending order of
importance.
Motivation
Self-
Maslow’s
Hierarchy of Actualization
Needs Esteem
Social
Safety
Physiological
Motivation (Maslow’s
SelfModel)
Actualization
“Be All That You Can Be”
Social Needs
“Friendship, Love, Belonging”
Safety Needs
“Freedom from Harm, Financial Security”
Physiological Needs
“Food, Water, Shelter”
Motivation
Maslow’s
Hierarchy
of Needs
A method of classifying human
needs and motivations into five
categories in ascending order of
importance.
Two Consumer Entities
Personal The
Organizational
organizational
Consumer Consumer
consumer
• The individual • A business,
who buys goods government
and services for agency, or other
his or her own institution (profit
use, for or nonprofit) that
household use, buys the goods,
for the use of a services, and/or
family member, or equipment
for a friend. necessary for the
organization to
function.
Topic 6:
Brand management
Brand Elements
Consumers
Firms
Consumers
• Encompass all types of customers,
including individuals as well as
organizations
• Functions provided by brands to
consumers
– Identify the source or maker of the product
– Simplify product decisions
– Lower the search costs for products internally
and externally
– Helps set reasonable expectations about
what consumers may not know about the
brand
Consumers
– Signal product and attributes
• On the basis of attributes products can be
classified as:
– Search goods
– Experience goods
– Credence goods
– Reduce risks in product decision
• These risk can be categorised as
– Functional ,physical, financial, social psychological, and
time
Firms
• Brands provide valuable functions
– Simplify product handling and tracing
– Offer the firm legal protection for unique
features or aspects of the product
– Provide predictability and security of demand
for the firm and creates barriers of entry for
competitors
– Provide a powerful means to secure
competitive advantage (CA)
Roles that Brands Play
Can Anything Be Branded
Physical Goods
Services
Physical Goods
Business-to-Business
Products
High-tech Products
Services
Professional Services
Can Anything Be Branded
Product Branded
Consumer
business studies 191
Advantages of brands
• The advantages of having a strong brand
are:
– Inspires customer loyalty (repeat sales)
– charge higher prices
– Retailers or service sellers want to stock top
selling brands.
Product Positioning
business studies 193
Product Positioning
• Positioning is the consumers
perception of a product in relation
to others.
Presence
+
Personality
What is Brand Equity?
Brand equity is the added value endowed
on products and services, which may be
reflected in the way consumers, think, feel,
and act with respect to the brand.
What is Brand Equity?
• A brand's power derived from the goodwill
and name recognition that it has earned
over time, which translates into higher
sales volume and higher profit margins
against competing brands.
• Good
Can you think of
• Service an example for
• Place each category?
• Person
Goods
Place
Services
Person
PRODUCT
What is the
difference between
TANGIBLE &
INTANGIBLE?
Tangible & Intangible Products
Tangible Intangible
Is more quantitative…
Is more qualitative…
Can be measured
specifically & see the Cannot be scientifically
actual results measured.
No of
sales
Maturity
Decline
Growth
Introduction
Time line
Where would you place these products on
the life cycle?
No of
sales
Time
Product Strategy and
the Product Life Cycle
Introduction Growth Maturity Decline
Launch the new Enhance product (new Add brand or Reposition,
product. features, improved line extensions. reformulate, or
quality, added cut struggling
Support launch services, new Defend market products.
with marketing mix packaging). share through
programs to build competitive Manage
customer Support rising sales pricing, channel profitability
awareness, make with expanded channel expansion, through careful
product available, coverage, pricing for communicating pricing, pruning
and encourage trial. market penetration, differentiation, channel outlets,
and communications and promotion and minimal or
to start and reinforce to reinforce highly targeted
customer customer communications.
relationships. loyalty.
6-
The Boston Matrix
• The Boston Matrix:
– A means of analysing the product
portfolio and informing decision making
about possible marketing strategies
– Links growth rate and market share
Market Share
Low High
10/10/2022 business studies 237
The Boston Matrix
• Implications:
• Dogs:
– Low market share in low growth markets,
likely to be draining organisation of cash
and using up too much management time,
sometimes a previous cash cow that has
had its day (end of life cycle)
– Divesting- this involves selling off the
product
Price
P2
P1
P3
D
Q2 Q1 Q3 Q
PED
• This measures the responsiveness of
demand to changes in price
• Firms must consider this because it will
have an effect upon total revenue
• It is calculated using the
Original
Price Quantity
X
PED = Original Price
Quantity
Interpreting PEd
• Since there is an inverse relationship
between price and quantity the result of
any PEd calculation will be negative
• As such the NEGATIVE SIGN IS
IGNORED
Pricing
decision
Legal
Customers and
Regulatory
Issues
Other
Marketing Mix
Variables
Pricing strategy
• Destroyer Pricing
– Used to eliminate competition by setting very
low prices
– When a firm initially sells a product or service
at unsustainably low prices to eliminate
competition and establish a monopoly.
Skimming Start with a high price Allows extra Only lasts while
For a unique product profits to be made there is no
competition
Promotional Special price for a limited Useful to get rid of Only useful for a
time old stock limited time
business studies 309
Principles of Marketing;
Topic 10
(Promotion)
310
Chapter Objectives
• After reading this chapter, you should be
able to:
– Promotion - Above vs below the line
– Factors – promotion startegy
– Importance of packaging
311
What is
promotion ??????
312
Promotion- definition
313
What is the purpose of
promotion?
The purpose of Promotion
• Introduces new products and
businesses.
• Creates new markets.
• To reach a target audience
• To show the product is better than a
competitors (Differentiation)
• To develop or improve the image of
firm (brand image)
What are the types of
promotion?
Promotion Method
• Promotion:
– Above the line
– Below the line
Corporate
logos
showing
football
team
sponsors
Corporate
logos
showing
Football
team
sponsor
Images ©
thinkstockphotos.co.uk
Sales Promotion
• rebate
– a return of part of the purchase price of a product
used as an incentive for customers to purchase the
product
– Ex: New cell phone purchase
Below the line promotion
Publicity
• Taking advantage of publicity means
calling attention to yourself and your
business.
• Publicity: placement in the media of
newsworthy items about a company, product, or
person
Below the line promotion
Publicity
• A news release should answer these
questions:
Who? What? Where? When? Why?
• news release
• a brief newsworthy story that is sent to the media
• Publicity is both free & not free
• Ex:
– If Derek Rose comes to your store, you will have to pay for that,
– However, It’s free because you don’t pay for the news story that
you sent a news release for
The promotional mix - Factors that
determine the type of promotional tools
used
• The competitiveness of the market –
– Where there are no alternatives available
the consumer will have less choice.
– There will be less need to persuade the
consumer to buy.
n Nature of Product
– Highly standardised products with minimal
servicing requirements usually need less
personal selling than custom products with
complex features and/or frequent
maintenance needs
– Consumer products are more likely to rely
heavily on advertising than are business
products
Question
• Aim of Promotions (above and below
the line)
– Increase profits
– Increase sales
– businesses will try to build up customer
loyalty (that is where consumers are happy
with their purchase of a particular product,
and will return to purchase it again in the
future).
Place
Topic 9
Chapter Objectives
• After reading this chapter, you should be
able to:
– Place
– Distribution chanels
Market
• Market
– A market is a group of consumers, who could
be individuals, businesses or governments
who might buy this type of product
Where to sell your company
product
Niche
Marketing
Product market
Mass
Marketing
Niche Marketing
• niche market is a focused, targetable
portion of a market.
Advantages - Niche Market
• Advantages
– Able to concentrate on company strengths –
product can be developed from what the
business is good at, and then a niche
targeted.
Disadvantages
• Market niches can disappear as a result of
changes in economic conditions, fashion
or taste - having all your eggs in one
basket.
Mass Marketing
• Broad-brush, unfocussed attempt to
appeal to an entire market with one
basic marketing strategy utilising mass
distribution and mass media. Also
called undifferentiated marketing
Mass Marketing- Advantages
• Advantages
– Allows reduction in average costs through
economies of scale
Mass Marketing- Disadvantages
• Disadvantages
– Competition is often fierce.
question
Yes
Products
or
No
question
Different
need Market
and segmentation
want
customer
Segmentation – introduction
• Def:
– Market segmentation is the process of
dividing a market up into different groups of
customers, in order to create difference
products to meet their specific needs
Market segmentation
• Segmentation can divided to:
– Geographic
• Region of the country
• Urban or rural
– Demographic
• Age, sex, family size
• Income, occupation, education
• Religion, race, nationality
– Psychographic
• Social class
• Lifestyle type
• Personality type
Advantages - segmentation
–Improved profits for business
• Diff Customers = different disposable
income (YED)
• By segmenting markets, = offer diff
products to diff customers or diff
prices businesses
• More sales, more profits
Advantages - segmentation
–Retain more customers
• Customer circumstances change:
– they grow older,
– form families,
– change their buying patterns.
• different stages of their life ("life-cycle") =
demand for diff products
• Business must offer diff products during diff
life-cycle
Advantages - segmentation
–Target marketing
communications
• deliver their marketing message -
customer audience.
Disadvantages
• Generally there is an increase in costs
with segmentation stemming from
increased;
– Research and development - the need
to produce different products for the
different market segments.
Disadvantages
– Production costs - the need for
different products for different market
segments.
– Administrative costs-the need for
separate marketing plans for the
different segments.
– Inventory costs-the need for additional
stock to cover variations in demand plus
additional stock holding and control
business studies 370
systems.
Disadvantages
– Distribution costs-the need for
different distribution channels for
different market segments.
– Advertising and sales costs -
separate plans have to be developed
and implemented for each segment.
Distribution / Place
The marketing mix -
Place
Distribution-activities that make
products available to customers
when and where they need them.
Place or distribution
• Place
Manufacturer Consumer
Channel of
distribution
business studies 374
Channel of Distribution
• A channel of distribution or marketing
channel is a group of individuals and
organizations that directs the flow of
products from producers and
customers.
Channel of Distribution
• Channel of Distribution: The path
a product takes from producer or
manufacturer to final user.
• All the organisations through
which a product must pass
between its point of production
and consumption
Who is involved in a basic
channel of distributer
• Types of channels
– Producer---consumer (most services, and
industrial products)
– Producer---retailer---consumer (bulky
products)
– Producer---wholesaler---retailer---consumer
(tobacco, appliances, convenience goods)
– Producer---agent/broker---wholesaler---
retailer---consumer (gum, candy bars)
Intermediaries
• Marketing Intermediaries link producers to
other intermediaries or to the ultimate
users of the product. Operate between the
producer and the final buyer.
• Middle man
Intermediaries
• Intermediary
– Individual or firm that helps to distribute
a product
Intermediaries
• Wholesaler
– Intermediary that sells products to other
businesses for resale to final consumers
• Retailer
– an intermediary that sells products
directly to consumers
There are 3 basic 'channel'
decisions
Do we use direct or indirect channels?
Number of intermediaries at each level
Types of intermediary
Channel 1
• In the direct channel, the product travels
from the producer to the consumer without
intermediaries
• An example of a direct marketing channel :
– Mail order (or catalog marketing)
– Telemarketing
– Direct selling
– Electronic Retailing
Channel 2
• In channel 2, manufacturers distribute
products though retailers
• They sell products to ultimate users and
buy products from manufacturers.
• Types of retail stores:
– department store
– discount store
– specialty store
– convenience store
Channel 3
• In channel 3, manufacturers
distribute products though
retailers and wholesale
• They buy from producers and
resell to retailers.
Channel 3
• They break down 'bulk' into smaller
packages for resale by a retailer.
• They provide storage facilities. For
example, banana manufacturers
seldom wait for their product to mature.
They sell on to a wholesaler that will
store it and eventually resell to a
retailer.
Types of Channels of Distribution
• How widely a product will be distributed.
– Intensive Distribution:
• Involves the use of all suitable outlets
for a product.
• Readily available in the marketplace
(candy bars)
Types of Channels of Distribution
• How widely a product will be distributed.
– Selective Distribution:
• use of a limited number of
intermediaries in a market area
(hand tools)
• A limited number of outlets in a given
geographic area used to sell the
product.
Types of Channels of Distribution
• How widely a product will be distributed.
– Exclusive Distribution:
• Involves protected territories for
distribution of a product in a given
geographic area.
• use of only one intermediary in a
market area (Jaguar cars)
Principles
Of
marketing
Topic 11
Digital Marketing
E-Marketing &
E-commerce
Marketing in the
Digital Age
Digital Marketing
What is digital marketing?
1. Internet marketing
2. Mobile marketing
3. Social marketing
4. Viral marketing
Digital Marketing
How are marketers adjusting?
1. Blogs
2. Message boards and forums
3. Social media
4. Discussions and forums on large
email portals (Yahoo!,Google, MSN)
Digital Marketing Strategies
Mobile Marketing
Social Media
Google+ YouTube
Twitter Digg
Flickr MiniClip
Facebook foursquare
Digital Marketing
Strategies
Viral Marketing
Nike launched a video as a way to tie in with
the 2012 Euro Cup (named “My Time is Now”
featuring some of the biggest names in soccer)
that racked up nearly 10 million views in just
three days
E-Business and E-
Commerce
What is E-Commerce?
Formal definition:
The buying and selling, marketing and servicing, and
delivery and payment of products, services, and
information over the Internet, intranets, extranets,
and other networks, between an inter-networked
enterprise and its prospects, customers, suppliers,
and other business partners.
411
Types of e-commerce
• B2C Commerce
– commerce between companies and
consumers
– involves customers gathering information;
purchasing physical goods or information
goods
– online retailing companies such as
Amazon.com, Drugstore.com, Beyond.com,
Flipkart.com, Lenskart.com
– reduces transactions costs
– increasing consumer412access to information
• B2G e-commerce
– commerce between companies and the public
sector
– use of the Internet for public procurement
– licensing procedures
• C2C e-commerce
– commerce between private individuals or
consumers
– online auctions
– auctions facilitated at a portal, such as eBay,
which allows online real-time bidding on items
being sold in the Web;413
Advantages of Digital
marketing
• Availability of Information
• Expansion
• Low Cost
• Efficiency of Advertising
Advantages of Digital marketing
• Low Cost
–a properly planned and
effectively targeted e-marketing
campaign can reach the right
customers at a much lower cost
than traditional marketing
methods.
Advantages of Digital marketing
• Expansion
– Global access, global reach and archive
economic of scales
– Global reach – a website can reach anyone in
the world who has internet access. This allows
you to find new markets and compete globally
for only a small investment.
Advantages of Digital marketing
• Availability of Information
– if your customer database is linked
to your website, then whenever
someone visits the site, you can greet
them with targeted offers. The more
they buy from you, the more you can
refine your customer profile and
market effectively to them.
Advantages of Digital marketing
• Efficiency of Advertising
– Viral: Online, using social media
share buttons on your website, email
and social media channels enables
your message to be shared incredibly
quickly,
Limitations / Disadvantages
• Security, privacy issues
– One of the major disadvantages may be the lack
of trust of the users because of the constant
virtual promotions that appear to be frauds.
This is an aspect that deteriorates the image
and reputation of quality and honest
companies.
– Other factor is the payment: many users still
don’t trust in the electronic methods of paying
and give up buying online because of this.
Limitations / Disadvantages
• Low connection speed
– Slow internet connections can cause difficulties. If
the companies build too complex or too large
websites, it will take too long for users to check
them or download them and they will get bored
eventually
Limitations / Disadvantages
• Low connection speed
– Slow internet connections can cause difficulties. If
the companies build too complex or too large
websites, it will take too long for users to check
them or download them and they will get bored
eventually
Factors affecting Digital marketing /e business /e-
commerce
International Marketing
Topic 12
Objectives
• The international trade system
• Economic environment
• Political and legal environment
• Cultural environment
Introduction
• Global trade accounts for 65 percent of the
Malaysia . gross domestic product
• Exporting - Marketing domestically
produced goods and services in foreign
countries
• Importing - Purchasing foreign goods and
services
- Top Malaysia Trading Partners—
Total Trade Including Exports and
Imports
426
World’s Ten Largest Marketers
(Ranked by Annual Sales)
Nature and scope of
international marketing
• DEFINITION OF INTERNATIONAL
MARKETING
– International Marketing can be defined as
exchange of goods and services between
different national markets involving buyers
and sellers.
Nature and scope of international
marketing
Nature and scope of international
marketing
Malaysia England
Sell
Nature and scope of international
marketing
Malaysia England
Buy
Nature and scope of international marketing
25
20
Advanced countries
15
Developing countries
10
0
1990 1997 2000 2007
International Marketing
• International marketing occurs when a
business directs its products and services
toward consumers in more than one
country.
Questions
Thailand
Malaysia
Bolivia China
Luxembourg Panama
Advantages
• Reduce costs
– By selling the standardised products
• Marketing strategy needs not be
duplicated
• The lower cost of production – reduce
selling price, more competitive
advantages
Advantages
• Exploiting Product life cycle
differences:
– When the market for a company’s
product becomes mature in one country
– it may expand to another country where
the product’s market is either in its
infancy or growth stage
Advantages
• Economies of scale
– Global market are large enough to
create the output level
• costs per unit are decreased to
provide the supplier with a competitive
advantage
• spreading the cost of advertising and
promotion
Advantages
• Increase the potential size of the target
market
– Expanding markets
– Higher growth rate, than domestic
market
• They are growing very fast and,
hence, have immense potential.
• Domestic market (Malaysia)
• Foreign Market (China)
Factors affecting international marketing
Political Legal
FACTORS
Economic Social
Disadvantages
• Cultural differences
– language, spoken and silent
– values and norms
– E.g.
• A Roman laundry innocently
suggests:‘ Ladies, leave your clothes
here and spend the afternoon having
a good time’
• Japanese hotel notice to guests: You
are invited to take advantage of the
chambermaid’
Example
China
Austria
USA Ghana
Malaysia
Singapore
Italy
Iceland
Government regulation
Government regulation
?
Government regulation
• However some countries need to protect
their domestic industries (and jobs) from
foreign competitors.
• They do this by using trade barriers
Government regulation
• Trade barrier is the term that refers to a
government’s policies of protecting its
domestic business from more competitive
foreign imported goods
• Variety of trade controls can be
introduced:
– Tariff
– Quotas
– Embargo
– Voluntary export limit
Trade barriers
• Tariff:
– Tax on imports
– Used to restrict imports and raise revenue for
the government
– Tariff will make the imported good more
expensive and making domestically produced
good more appealing and competitive
Trade barriers
• Quotas
– Limitations on importation of a product class
– Reduces the quantity of a product that is
imported
Other Trade Barriers
• Import quotas - Limit the number of units of
products in certain categories that can cross
a country’s border for resale
• Embargo - Complete ban on the import of
specified products
• Subsidies - Government financial support of
a private industry
• Exchange control - Method used to regulate
international trade among importing
organizations by controlling access to foreign
currencies
452
Dumping
• Controversial practice of selling a product
in a foreign market at a price lower than
what it receives in the producer’s domestic
market
453
Going Global
• Reasons for marketers to go global
– Saturation of the target market
– Strong domestic market share
– Globalization of customers
– New customers in emerging markets
– Globalization of competitors
– Reduced trade barriers
– Advances in technology
– Enhanced customer responsiveness
454
Strategies for Entering Foreign
Markets
• Three basic choices
– Importing and exporting
– Contractual agreements such as franchising,
licensing, and subcontracting
– International direct investment
455
Importing and Exporting
• Decision to import, or bring in foreign
goods to sell domestically or use as
component parts, depends on:
– Ability of supplier to maintain quality
– Flexibility in filling orders that vary
– Response time in filling orders
– Total costs
456
Importing and Exporting
• First-time exporters can reach foreign
customers through:
– Export-trading companies
– Export-management companies
– Offset agreement
457
Franchising
• Contractual arrangement in which a
wholesaler or retailer agrees to meet the
operating requirements of a manufacturer
or other franchiser
• Benefits are risk reduction, standardized
operations, and greater recognizability
• Success depends on ability to adapt to
local customer preferences
458
Foreign Licensing
• Agreement that grants foreign marketers
the right to distribute a firm’s merchandise
or to use its trademark, patent, or process
in a specified geographic area
• Gives access to local partner’s marketing
information and distribution channels, and
protection from legal barriers
• Allows quick entry into a foreign market
with a known product
459
Subcontracting
• Contractual agreements that assign the
production of goods or services to local or
smaller firms
• Can prevent mistakes involving local
culture and regulations
• Can provide protection from import duties
460
International Direct Investment
• High involvement and high risk are the
major characteristics
• Firms choosing this method often have a
competitive advantage
• Several forms
– Acquisition
– Joint venture
461
From Multinational Corporation to
Global Marketer
• Multinational corporation - Significant
operations and marketing activities outside
its home country
– Examples: General Electric, Siemens,
Mitsubishi
462
From Multinational Corporation to
Global Marketer
• Reflect interdependence of world
economies, growth of international
competition, and globalization of world
markets
463
Developing an International
Marketing Strategy
• Global marketing strategy -
Standardized marketing mix with minimal
modifications that a firm uses in all of its
domestic and foreign markets
– Can effectively market some goods and
services to segments in many nations that
share cultures and languages
– Can be highly effective for luxury products
that target upscale consumers everywhere
– Major benefit is its low cost to implement
464
Developing an International
Marketing Strategy
• Multidomestic marketing strategy -
Application of market segmentation to
foreign markets by tailoring the firm’s
marketing mix to match specific target
markets in each nation
465