External constraints

Environmental uncertainty

Change x Complexity
Change = stable VS unstable
Complexity = amount of factors

- Simple + stable: low uncertainty

- Simple + unstable: moderate-high uncertainty
- Complex + stable: low-moderate uncertainty
- Complex + unstable: high uncertainty

Reasons for entering international markets:

- Profit improvement
- Profit retention

4 international business approaches:

- Ethnocentric: belief that the best work approaches and practices are those of the home
country
o key positions filled with employees of the home country
o Decisions made by the headquarters
o No language barrier
- Polycentric: is the view that employees and managers in the host country know the best work
approaches and practices for running their business
o Products and promotion are adapted depending on the region
o Hiring in host countries is less expensive
o Better morale and gov support
- Regiocentric: people (especially those in leadership positions) serve throughout a particular
region, rather than just one specific country
o Differentiation by region, not by country
o Managers from the region
- Geocentric: a world-oriented view that focuses on using the best approaches and people
from around the globe
o Hires from all over the world to find talents
o Reduces the sense of unfair treatment
o Multicultural teams

To handle multiculturality:

Cultural awareness:

- Knowledge of culture as a concept

- Self-awareness
- Mindfulness
- Behavioural skills
Emotional intelligence:

- Self-awareness
- Self-management
- Self-motivation
- Empathy
- Social skills

Hofstede’s cultural onion:

Symbols ; rituals ; heroes ; values

\---------- Practices --------/

Symbols = visible elements that have a meaning known by those who belong to the same culture
Rituals = collective activities that are superfluous to the achievement of the desired goals (ex:
greetings)

Low Context: good communication is precise, simple, and clear. Messages are expressed and
understood at face value. Repetition is appreciated if it helps clarify the communication
VS High Context: good communication is sophisticated, nuanced, and layered. Messages are both
spoken and read between the lines. Messages are often implied but not plainly expressed

Indirect VS direct feedback

Egalitarian: flat organisational structure, low distance btw employees and boss
VS hierarchical: multilayered and fixed organisational structure, high distance btw employees and
boss, importance of status

Consensual decision-making VS top-down decision making

Task-based trust VS relationship-based trust

CSR: corporate social responsibility = attention to go beyond its obligations to do the right things
 integrates social and environmental concerns into business operations and interactions with
stakeholders
 environmental sustainability
 ethical labour practices
 community engagement

Benefits:
- enhanced reputation, risk mitigation (legal and ethical issues + negative impacts on society),
employee morale and productivity
- supply chain transparency, innovation and product development, stakeholder engagement

Washings:
greenwashing
whitewashing (downplaying negative aspects of a person, org or history while emphasising only
positive aspects
pridewashing (LGBTQ+)
sportwashing (using sports events to divert attention from negative political or social issues)
 credibility damages
 undermines genuine effort of other org
 hinders positive change
 Internal constraints

Organisational structure: hierarchy, reporting relationships, distribution of tasks and responsibilities

Impacts: communication, decision-making, efficiency

 Work specialisation:
o Divides activities into separate job tasks
o Employees specialise in a part of the activity instead of the entire activity = division of
labour
 Departmentalisation:
o Employees who do the same task are grouped together to coordinate and integrate
work
o Different types of departmentalisations:
 Functional (marketing, finance, production, etc)
 Product (cosmetics, clothing, appliances, etc)
 Geographical (central, north, south, etc)
 Process (receiving, sewing, shipping, etc)
 Customer (gov, industrial, consumer)
 Chain of command:
o From higher to lower levels  clarity of reporting relationships
o Importance of authority, responsibility, unity of command
o 1 person should report to 1 manager
 Span of control: number of employees one manager can effectively manage
 Centralisation:
o Decisions mostly made at the upper level
 Decentralisation:
o Lower-level employees can provide more input or make decisions
 Formalisation:
o Degree of standardisation of jobs and level of importance of rules and procedures
 Highly formalised = explicit job descriptions, rules, procedures, etc
 Lower formalised = employees have more discretion on how they do their job
 Mechanistic VS organic:
o Mechanistic:
 Specialisation and rigid departmentalisation
 Clear chain of command + centralisation
 Narrow span of control
 High formalisation
o Organic:
 Cross-functional and cross hierarchical teams
 Free flow of information + decentralisation
 Low formalisation

Organisational culture
= collective values, beliefs, and norms defining the organisation’s identity
 positive = employee engagement, job satisfaction, loyalty and innovation
 negative = low morale, high turnover, reduced productivity

Strong culture:

- Clear core values, embraced by all employees

- Consistent behaviour (norms and practices in the org)
- High-employee engagement
- Low turnover
- Clear direction (mission and vision)
- Adaptability
- Team cohesion (collab and support among employees)

Weak culture:

- Lack of core values

- Inconsistent behaviour throughout the org
- Low employee engagement
- High turnover
- Lack of direction
- Resistance to change
- Potential conflicts from different interpretations of values
- Limited impact on employee behaviour and performance
 Corporate identity

Definition: visual, verbal, and experiential elements that define a company’s unique personality and
presence
ex: logo, colours, typography, imagery, tone of voice, etc

Important for:

- Consistency: unified and professional image on every channel

- Recognition
- Trust: credibility and reliability

Vision = long-term aspirations and goals

Mission = defines the company’s purpose, core values and primary objectives

Brand equity = the intangible value that a brand adds to the products and services, often resulting in
higher customer loyalty and stronger market presence
It’s determined by the consumer’s perception of its quality and desirability
Key elements:

- Brand awareness (recognition and recalling of the brand)

- Perceived quality
- Brand loyalty
- Brand association (positive attributes and emotions associated to a brand)

Advantages:

- Competitive advantage
- Customer trust and loyalty
- Pricing power
- Expansion opportunities

How to build brand equity:

- Consistent branding
- Customer-centric approach
- Quality assurance
- Emotional connection (create emotional resonance through storytelling and experiences)
 Consistent and positive customer experiences
 Marketing practices

Marketing process:
- mission
- situation analysis (PESTEL, Porter, SWOT)
- marketing strategy
- marketing mix
- implementation and control

Market definition:

- Total population
- Potential market (who have interest in the product)
- Available market (who have the means to buy the product)
- Qualified available market (who are legally allowed to buy the product)
- Target market
- Penetrated market (who have bought the product)

Customer behaviour:
study of the processes used by consumers to select, secure, use and dispose of products, services,
experiences, or ideas to satisfy their needs, and the impacts these processes have on the consumer
and society
 will impact companies’ strategies

Consumer decision-making process:

- problem recognition (identifying a need or a want)
- information search (about potential solutions)
- evaluation of alternatives (comparison)
- purchase decision
- post-purchase behaviour (assessing satisfaction and potential repeat purchases)

Influences on consumer behaviour:

- psychological and personal

o motivation
o perception
o learning
o beliefs and attitudes
- External (social and cultural factors)
o Reference group
o Family
o Social media and advertising
o Culture, subculture, and social class

Segmentation: division of a broad market into smaller and more manageable groups of consumers
who share similar characteristics, needs, and/or behaviours, to produce more relevant and
compelling promotional messages
 - Demographic segmentation
- Psychographic
- Behavioural
- Geographic

Targeting = selecting the segments of the market on which to focus

Targeting strategies: https://www.econposts.com/marketing/market-targeting-strategies/

- Undifferentiated / mass targeting

- Differentiated / segmented targeting
- Concentrated / niche targeting
- Micro targeting

Positioning = occupying a unique place in the minds of the consumers within the selected target
segments
Depends on:

- Unique selling proposition

- Value proposition
- Brand personality
- Competitive advantage

 STP strategy (Segmentation, Targeting, Positioning)

- Segmentation: identify and analyse potential segments based on relevant criteria

- Targeting: select the most attractive segments based on factors like size, growth potential and
alignment with company resources
- Positioning: craft a compelling and differentiated positioning strategy for the chosen
segments
o  customised messaging, improved customer satisfaction, enhanced marketing
efficiency, greater business growth, enhanced resource allocation

For the STP strategy to be successful:

- consumer behaviour research
- clear communication to resonate well with the chosen segment
- flexibility: revaluation and adjustment of the strategy when needed
- metrics to track success

Consumer behaviour research methods:

- Quantitative research:
o Methods: surveys, experiments, observations, data mining
o Advantages: large sample sizes, statistical rigor, generalisability
o Limitations: limited insights into underlying motivations

Ex: identifying peak visit times, popular products, trends in purchasing behaviour…

- Qualitative research:
o Methods: interviews, focus groups, ethnographic studies, content analysis
o Advantages: rich insights, understanding complex motivations, context awareness
o Limitations: small sample sizes, potential subjectivity in interpretation
Ex: focus group to gather consumer’s insights on their experiences  user satisfaction, things to
improve, etc

- Observational research: studying behaviour in natural settings

o Methods: in-store observations, online-tracking, eye-tracking studies, etc
o Advantages: real-world insights, behaviour unaffected by survey bias
o Limitations: limited context, challenges in interpretation, ethical considerations

Ex: observing how consumers navigate a store, what catches their attention, etc / Google analyses
user’s behaviour vis-à-vis search results, ads, etc, to adjust algorithms and ad placements

- Experimental research: manipulating variables to observe effects on consumer methods

o Methods: controlled experiments, A/B testing, field experiments
o Advantages: causality inference, controlled conditions
o Limitations: artificial environment, demand characteristics, ethical concerns

Ex: changing a website’s layout elements to see what works better to optimize conversion rate

- Surveys and questionnaires:

o Methods: online surveys, telephone interviews, face-to-face questionnaires
o Advantages: efficient data collection, standardized responses
o Limitations: potential response bias, limited depth of insights
- Neuromarketing techniques: using neuroscience to understand consumer responses
o Methods: EEG (electroencephalogram), fMRI (to map brain activity), eye-tracking,
facial coding (watching facial expressions)
o Advantages: unconscious insights, physiological reactions
o Limitations: expensive equipment, complex data interpretation

Ex: using EEG when using a product to know the reactions to certain features and what resonates
with consumers ; eye-tracking on packaging to know what catches the eye

- Big data and analytics: processing large datasets for patterns and trends
o Methods: social media analysis, comprehensive view of consumer behaviour
o Advantages: real-time insights, comprehensive view of consumer behaviour
o Limitations: privacy concerns, data accuracy, data overload

Ex: Netflix analyses viewer’s streaming habits, watch history and interactions with content to
personalise content recommendations  increases satisfaction and retention

- Ethnographic research: immersion in consumer’s natural environment

o Methods: participant observation, in-depth interviews
o Advantages: cultural context, deep understanding
o Limitations: time-consuming, potential researcher bias

Ex: Nike: immersion in the life of athletes to design better products for them

- Case studies: in-depth analysis, consumer behaviour instances

o Methods: longitudinal studies (gathering data on some variables without influencing
the variables), multiple data sources
o Advantages: rich contextual insights, holistic understanding
o Limitations: limited generalisability, potential bias in selecting cases
Ex: Tesla: longitudinal study on electric car users to gather insights into driving patterns, and
satisfaction levels to improve customer retention and satisfaction
Strategic marketing from the information gathered

SMART goals

Specific: what, who, why, when?

Measurable: need to have methods to measure success
Attainable: realistic and reasonable, can be achieved in a specific amount of time
Relevant: aligned with current objectives, a specific area; what is the expected result? Why this goal?
Time: precise timeframe

KPI: Key Performance Indicators

- Metrics
- Measure the performances of different functions of the org

Operational marketing: translating broader marketing strategy into actionable steps that resonate
with the target audience

 Turns strategy into action

 Execution of the marketing mix (product, price, place, promotion [, people, process, physical
evidence])
 Coordinate cross-functional teams: collaboration btw different departments (sales,
advertising, customer service, production, etc)
 Allow reaction to changes and to competition

= transforms strategic plans into concrete actions, coordinates the marketing efforts, makes them
customer-centric and adaptable to the evolving landscape

The 7 Ps of Marketing

 Product
o What products
o Dev and innovation
 Price
o Pricing strategy
 Cost-based = based on the costs of production, manufacturing and
distribution of a product
 Value-based = based on a consumer’s perceived value of the product
 Competition-based = based on the prices of the main competitors
o Discounts and promotions
 Place
o Distribution channels
o Location decisions and global distribution considerations
 Promotion
o Advertising, personal selling, public relations
o Digital marketing and social media promotion
 People
o Importance of customer service
o Employee training and customer interaction
 Process
o Designing efficient process for delivering value
 o Customer journey mapping and process optimisation
 Physical evidence
o Tangible clues and touchpoints that influence perception
o Store atmosphere, packaging, branding

The 7 Ps need to be aligned with the business objectives

+ 7 Cs of Marketing

 Customer wants and needs

o Understanding target audience preferences
o Conducting market research to identify customer desires
 Cost to consumer
o Monetary + time and effort
o Providing value that exceeds perceived costs
 Convenience
o Ensuring easy access to products or services
o Streamlining the customer journey
 Clarity
o Clear and effective communication
o Transparent information about products and policies
 Communication
o Two-way interaction with customers
o Building relationships through effective communication
 Consistency
o Delivering a consistent brand experience
o Maintaining uniformity across various touchpoints
 Sales

Sales =/= marketing

- One-to-one approach
- Push instead of pull
- Short-term
- Target = individual or small crowd
- End goal = selling a product

Process:

- Creation of sales plan: organisation’s resources, tools, actions and goals

- Directly interacts with customers to provide them a deeper understanding of the product or
service

Strategy:

- Connecting with potential customers and converting them

- Salesperson contacts potential customer to pitch the product or service

Goals:

- Based on volume and targets

- Focus on short-term
- Sell enough to generate profit

MUST BE ETHICAL

 Serve don’t sell method

o Fit: define Perfect Fit Client
o Discovery: understand pain point, goals, motivations
o Offer: address pain points, share solutions, Q&A section
o Agreement: proposals, contracts, addressing needs
o Transition: onboard and prepare the client, establish points of contact and send
supporting materials and documentation to make the products more successful
 International market entry methods

Reasons for entering international markets:

- Profit improvement
- Profit retention

Degree of ownership and control = extent of investment risk:

Exporting – Licencing – Franchising – Strategic alliance – Joint Venture – Wholly Owned Subsidiary

Direct VS indirect selling / export:

Direct selling

- PROS:
o More control over sales process and easier adaptation to market conditions +
competition
o Ability to establish direct relationships  trust and loyalty building
o Potential to save money  no need to pay intermediaries (agents and distributors)
o Greater potential for profits
o Scope to tailor-made marketing and sales efforts (by knowing the customers better)
- CONS:
o Complexity: working with foreign customers and competitors + regulations and
logistics
o Limited knowledge of foreign markets
o Limited resources: must have staff and infrastructures there
o Language and cultural barriers
o Lack of support and expertise from intermediaries

When?
When a business has a unique or high-demand product
When a business has experience in international trade
When a business is looking to establish long-term relationships with foreign customers and
distributors
When a business is looking to save money (from paying intermediaries)
When a business has resources (staff and infrastructure)

Indirect selling

- PROS:
o Reduced risk: can get expertise and create a network with domestic intermediaries
o Reduced costs: no need to set up infrastructures there
o Access to expertise
- CONS:
o Limited control over the marketing and distribution
o Reduced profits: sharing the profits with the intermediaries
 o Dependence on the intermediaries for access to the foreign market
o Potential for conflict if the interests of the company and of the intermediaries don’t
align

When?
When a business is just starting to enter the international market
When a business has limited resources
When a business is looking to reduce risks
When a business is looking for support (expertise and infrastructures)

Licence agreements:
Allows a company to enter new markets without direct investment, by granting permission to a
foreign entity to use it in exchange for royalties or fees  no need for significant capital investment

Patent licensing = science and innovation

Trademark licensing = brand names and logos / slogans
Copyright licensing = art and characters (ex: Mickey Mouse)
Trade secret licensing = patents, trademarks and copyrights that are not registered with the
government

Exclusivity of the license:

Unilateral licensing agreement: btw one licensor and one licensee

Bilateral Licensing agreement: btw two licensors and two licensees
Multilateral licensing agreement: 3 or more licensors and / or licensees

Franchising: expanding by replicating a business model in different

markets
Franchisor grants the rights to operate their business under their brand and business model to a
franchisee, who pays starting fees and royalties
Franchisor must offer the brand, the systems and support

Investment franchise:

- Large-scale significant capital expenditure

- Franchisee often not involved in the business
- Need for a significant management team
o Hotel and large restaurant franchises

Distribution franchise:

- Franchisor grants the franchisee the right to distribute or sell their products
o Car dealership, electrical appliance retailers

Business format franchise:

- Franchisor provides the franchisee with everything needed to set up and operate the
business (equipment, premises, training, operational systems, supplier contracts, marketing
tools, support, etc)
o Fast-food restaurants, coffee shops, personal care

Conversion franchise:
 - The franchisee joins the franchisor’s network when already owning an independent business
within the franchisor’s industry (= domain of activity). The existing entity is converted into a
franchisee branch
o Real estate industry, dental / medical clinics, hairdressing…

Strategic alliance
Collaborating with a local entity can offer a strong local presence and market expertise

- Gives access to their network, knowledge of market conditions and culture

- Assist with market research, finding potential customers, with regulations and business
practices
- Can help establish trust and relationships with other local stakeholders

Equity strategic alliance = when a firm purchases equity (= capital) in another firm, thus sharing a
partial ownership of the firm

Non-equity strategic alliance = organisations create an agreement to share resources without creating
a separate entity or sharing equity

(equity = capital raised by a company ; investor’s stake in a company)

Joint ventures
Conditions:

- Agreement btw the parties

- Mutual contribution
- Joint control or right to control over the project
- Mechanism to share profits or losses

Types:

- Project joint venture:

o One specific goal set by both entities
o The agreement ends when the project is completed and/or the goal is achieved
- Functional joint venture:
o Companies complete each other’s capabilities, resources and expertise to create a
synergy  allows to save resources
- Vertical joint venture:
o Done by companies in the same supply chain to dominate a bigger part of it
o Reduces costs and offers a better position on the market
- Horizontal joint venture:
o Two companies at the same level in the supply chain partner up
o Allows to enter new markets and share expenses

PROS:

- share risks and costs

- benefit from the partner’s knowledge of the foreign market

CONS:

- less control
 - potential conflicts and disagreements

Exporting:

- Logistics
- Incoterms
- Freight forwarders
- Customs

Payment terms and conditions in distribution contracts

Upfront payments:

 Payments made by the distributor to the seller, covering initial inventory purchases,
marketing costs or marketing rights for example

Commissions:

 The distributor receives a percentage of the sales revenue from the distribution of the
products

Royalties:

 Payments made to the seller based on the usage or sale of intellectual properties associated
with the products

Incentives:

 May be offered to the distributors as a way to motivate and reward from achieving targets or
milestones

Incoterms

Ex Works (EXW)

 Maximum obligation on the buyer and minimum responsibility on the seller

 Only the export packaging expenses are covered by the seller

Free Carrier (FCA)

 The seller must deliver the goods to a loading point requested by the buyer (ex: train station,
port)
 Then, seller is responsible for the rest of the costs

Free Alongside Ship (FAS)

 Seller must deliver the goods to the port where the ship is
  Then, all obligations are on the buyer
 Shipping method: sea and inland waterway transport

Free On Board (FOB)

 The seller must deliver the goods to the port chosen by the buyer and load the foods on the
ship
 Shipping method: sea and inland waterway transport

Cost and Freight (CFR)

 The seller assumes all the risk for the shipment until the consignee collects the cargo at the
final destination
 The buyer takes on the expenses at the port of arrival
 Shipping method: sea and inland waterway transport

Of Carriage Paid To (CPT)

 The seller is responsible for the overseas shipment, including the insurance and destination
terminal fees

Delivered at place unloaded (DPU)

 The seller bears all the risks involved in bringing the goods and unloading them at the place
of destination

Payment methods

Cash in advance (CIA)

 = advance payment / pre-payment

 Most secure method for the seller
 The buyer sends the full amount of the invoice before the goods are shipped

Letter of credit (L/C)

 Issued by a bank
 Guarantees that the buyer will make the payment to the seller if the seller meets all the
requirements specified in the letter
 Seller is not paid until they have met these requirements  risky for them

Cash against documents (CAD)

 Buyer pays the seller after they have received the documents proving their ownership of the
goods (bill f lading, bill of exchange)
 Often used when buyer and seller don’t know eo very well
 Protects the buyer from the risk of non-delivery

Acceptance credit

 Buyer takes a loan from a bank to pay for the goods

  The loan is repaid over time, with interest
 Popular bc it allows to spread out the cost over time

Consignment

 The seller doesn’t receive the payment until after the buyer resells the goods
 If the buyer doesn’t resell the goods, the seller isn’t paid

Factors to consider when choosing the method of payment:

- Value of the goods

- Type of goods
- Level of risk that each party is comfortable with
- Cost and time of shipping