INTERNATIONAL MARKETING Definitions: Marketing is the process of planning and executing the conception, pricing promotion and distribution

of ideas, goods, services to create exchanges that satisfy individual and organizational goals (American Marketing Association) International marketing is the performance of business activities designed to plan, price, promote and direct the flow of a company’s goods and services to costumers or users in more than one country So, the 2 definitions are very similar; the only difference is that if I’m talking about international marketing I’m referring to a company that operates in different countries, thus has to consider this fact in planning its marketing activities International orientations There are 4 different international orientations that a company could adopt when decide to become international: -ETNOCENTRIC ORIENTATION: for the company the needs of the home country are more relevant and prevail over all the others, thus when decisions are made only these needs are taken into account -POLYCENTRIC/MULTIDOMESTIC ORIENTATION: under this view each country is unique and different from the others, so every nation has to be targeted in a different way  geographic divisional structure -REGIOCENTRIC ORIENTATION: the world is divided in different regions (Europe, Asia, etc.) and each region is targeted different -GEOCENTRIC/ GLOBAL ORIENTATION: the needs of the customers in the world are becoming very similar with each other, thus the entire world could be targeted as a unique entity  product divisional structure TRANSNATIONAL STRATEGY: it s a international strategy through which the firm seeks to achieve both the global efficiency and the local responsiveness; it is very difficult to realize  consists of an integrated network of distributed and interdependent resources and capabilities Internationalize the Value Chain We know that the Porter’s Value Chain is composed by: - primary activities: inbound logistics; operations; outbound logistics; marketing&sales; service - support activities: Firm infrastructure, Human Resources Management, Procurement, technological development.

lack of knowledge of the foreign country . centralizes upstream activities and decentralize downstream activities. usually.the possibility to exploit foreign market opportunities .the competitive pressure in the home country . the lack or the presence of the right factors can determine the success or the failure of a particular industry in that nation . Internationalization motives The choice to become international could be due to several reasons. the home country.impossibility to access to distribution system . analysing these motive we can distinguish between proactive motives and reactive motives.a small and satured domestic country .lack of financial resources . in the production direct labor or direct material less expansive than that used in the home country Reactive motives. when a company decides to operate internationally. capital and infrastructure.lack of capital . Examples of proactive motives are: .When we talk about Internationalization of the Value Chain first of all we have to say that the primary activities could be divided into Upstream activities. natural resources. or the level of the technology competence . capital and infrastructure. land. marketing and services.the possibility of tax benefits . are: . developed by the author in 1990. to make this is useful the Porter’s Diamond model. like skilled labour. Can be divided in basic factors and specialized excess in the production compared with the home sales Anyway.the nature of the product ( may be is an unique product). and Downstream activities. related to R&D and the barriers How a firm creates and develops its competitive advantage Porter’s diamond In this analysis the fist step is to study the environment in which the firm exists. for example.the presence of profit and growth goals inside the company . instead. there is the existence of different barriers that could affect the entry in a new market: .lack of productive capacity to dedicate to the foreign market .the possibility to exploit economies of scale using. In his book Porter aimed to explain why there are some nations that present a competitive advantage in some industries and he identified 4 dimensions to make the analysis: 1) FACTOR CONDITIONS: refers to inputs used as factors of production such as labour.

2) BARGAINING POWER OF SUPPLIER: their power derives by the possibility of raising prices or reducing the quality. Intangible. drive innovation. numerous competitors. CAPABILITIES: refer to the company’s ability to make use of its resources in a highly productive manner COMPETITIVE ADVANGE: is a particular capability of the company that presents the following characteristic: . if he has full information or if buyers are concentrated 4) THREAT OF SUBSTITUTE PRODUCT: products with similar functions limit the prices firm can charge. there is the threat of cutthroat competition Value Chain analysis-Competitive Triangle The competitive triangle studies the links existing between resources. These clusters are geographic concentrations of interconnected companies. product differentiation.valuable . limited access to distribution channel. as Reputation or technology and Human. the buyer is not important for the supplier. lack of differentiation. etc. high fixed costs. with this model Porter aimed to identify all the actors present in an industry and look at the forces that they exert: 1) THREAT OF NEW ENTRANTS: the level of the threat depends on the presence and consistency of Barriers of entry. STRUCTURE. the power is high if there are few suppliers in that industry. as for example the financial and physical resources. like for example economies of scale. as workers and motivation. switching cost are high. service providers. stimulate new businesses 3) STRATEGY. and associated institutions in a particular field: they can increase the productivity. government policy. the threat exists if the trade-off price/performance is improved by the substitute product 5) RIVALRY AMONG EXISTING COMPETITORS: in presence of slow growth of the industry. could be distinguished in Tangible.RELATING AND SUPPORTING INDUSTRIES: the existence of “industry clusters” could be a key factor for the success of the industry. exist power if buyer’s purchases are a relevant part of seller’s sales. RIVARLY: the presence of a strong rivalry in the country could be a very strong driver for innovation 4) DEMAND CONDITIONS: the level of pressure imposed by the demand could be an indicator of how in that country there is a research for the quality and the innovation 2) Porter’s 5 forces model To study the situation in term of competition inside an industry we refer now to the 5 forces model. 3) BARGANING POWER OF BUYERS: the buyers can bargain down prices and forcing higher quality. capabilities and competitive advantages: RESOURCES: are the firm specific assets. specialized suppliers.

etc.Language  we can distinguish between: Verbal language: very important in low-context cultures. The goal was to find an explanation for the fact that some concepts did not work in the same way in all countries.Manners and customs .Social institutions . in high IDV societies task prevails over relationship. cost. in 2001 Shiraev & Levy gave this definition: “Culture is a set of attitudes.Values and attitudes . rare. subordinates expect to be consulted and power is based on formal position. 1) POWER DISTANCE: extent to which less powerful members of institutions and organizations expect and accept that the power is distributed unequally.Aesthetics . friendship patterns. Time. the opposite situation in countries with high PDI 2) INDIVIDUALISM: the degree to which people in a country learn to act as individuals rather than as members of groups. so in countries with a low PDI. behaviours and symbols shared by a large group of people usually communicated from one generation to the next. space.Education .” Culture presents different elements: . decentralization is frequent. importance to identify the potential for sustainable competitive advantage 4) develop the strategy looking at the strengths (how can I exploit them?) and at the weaknesses ( how can I correct them using my capabilities?) Culture The concept of culture evolved during the years.Religion . self actualization by every individual is an ultimate goal . that use and interpret more of the elements surrounding the message to develop their understanding of the message ( ex.- rare costly to imitate non-substitutable So to analyse the value chain is necessary: 1) identify the resources and capabilities of the firm 2) explore the links existing between them 3) evaluate the capabilities in term of value. Non-verbal language: very important in high-context cultures.) Hofstede’s Cultural dimensions Hofstede identified 4 cultural differentiators (they became 5 after the introduction of another one few years later) to provide useful guidance for corporate strategy. that rely on spoken or written language for meaning.

money and competition. such as quality of life. resolution of conflicts by negotiation. funds are available for investment and there is perseverance towards slow results International market selection process MARKET SEGMENTATION: the process of dividing the market into distinct subsets(segments) of consumers with common needs or characteristic There are different types of segmentation: Descriptive segmentation in which we distinguish Geographic segmentation and Demographic segmentation Behavioural segmentation in which we distinguish Benefit segmentation and Psychographic segmentation To decide if a segment is valuable I must to look at: -MEASURABILITY: the degree to which the size. such as achievement.3) MASCULINITY: the degree to which masculine values. purchasing power of a market segment can be measured -ACCESSIBILITY: the degree to which a market segment could be reached and served -PROFITABILITY: the degree to which a market segment is large or profitable -ACTIONABILITY: the degree to which effective programmes can be designed for attracting and servicing a given market segment Market targeting strategies: -Undifferentiated: my target is all the market and I don’t make distinction between different segments -Multisegment (differentiated): my target is more than a segment and I differentiate my strategy for each segment -Concentration (niche): I focus only on a small portion of the market . care for the weak. preserving the environment. 4) UNCERTAINTY AVOIDANCE: extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these situations. stress on equality and quality of work life. there is resistance to innovation 5) LONG-TERM ORIENTATION: the way members in an organization exhibit a pragmatic future oriented perspective rather than a short-term point of view. service. performance success. In low MAS societies people work in order to live.  degree to which people in a country prefer formal rules and fixed patterns of life. prevail over the feminine values. in high LTO societies there is the adaptation of traditions to a modern context. In high UAI societies there is the acceptance only of familiar risk and fear of ambiguous situations and unfamiliar risks.

etc. Waterfall approach: I decide to enter markets incrementally. Life style) 2) Make a preliminary screening of the market. identifying where is convenient. 3) Once the prime markets have been identified. accessibility and actionability) and “specific characteristics(low measurability accessibility and actionability. commercial restrictions. etc. but high relevance.). starting from advanced countries. a good solution is to look at its competitive strengths and at the market attractiveness and classify in this way the different countries. this is basically a geographical selection in which the countries must to be screened looking at different measures (ex. for example Invest. then must be used the standard techniques of segmentation to segment markets within countries. GDP per capita. the choice has to be done between the “general characteristics” (with high degree of measurability. or make joint ventures.STEPS FOR INTERNATIONAL MARKET SEGMENTATION 1) Identify the segmentation criteria and develop the segments. then developing countries and finally less developed countries Shower approach: I decide to enter simultaneously the markets . ex.

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