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Basics of International Marketing
The international Marketing Environment
International Marketing Strategies
International Marketing Mix
Implementation of the international Marketing


Basics of International Marketing
 Importance
 Concepts
 Drivers

g.Importance of IM International expansion helps firm:  Keep pace with competition  Reach a larger market (e. US with 25% of worldwide products/services)  Reap higher profits  Prolong the lifecycle of their products Also an option for small and medium sized companies .

Internationalization Philosophies Domestic Marketing Low or no international commitment Focus on domestic consumers and home country environment Export Multinatio Global Marketing nalMarket Marketing ing Limited international commitment Substantial international commitment Extensive international commitment Involves direct or indirect export Focus on different international countries Focus on regions market segments rather than countries Ethnocentric Polycentric Regiocentric Geocentric DomesticRaising commitment/ involvement to international marke focus .

E.Ethnocentric Orientation      Guided by domestic market extension concept Domestic strategies. . and personnel are perceived as superior. techniques. Disney resort in France: Disneyland Resort Paris had to adapt it to local preferences: European fairy tales. regarded primarily as outlets for surplus domestic production. food.g. International marketing plans are developed in-house by the international division. International markets are secondary. and dress code for staff.

minimal coordination with headquarters Marketing strategies are specific to each country. Outcomes:  No economies of scale  Duplicated functions  Higher final product costs .Polycentric Orientation       Guided by the multidomestic marketing concept Focuses on the importance and uniqueness of each international market Firms establish independent businesses in each target country. Fully decentralized.

and/or cultural traits are perceived as distinct markets. (e. political. NAFTA*) Divisions are organized based on location. EU.g. *North American free trade agreement .Regiocentric Orientation     Guided by the global marketing concept World regions that share economic. Regional offices coordinate marketing activities.

g.Geocentric Orientation     Guided by the global marketing concept Marketing strategies aimed at market segments. rather than geographic locations Maximizes efficiencies worldwide and provides standardized product or service throughout the world E. McDonalds .

International Expansion Drivers Business Environment Drivers Firm specific Drivers Competition Regional Economic and Political Integration Technology Improvements in Transportation and Telecommunication Economic Growth Transition to Market Economy   Product Life Cycle High New Product Development Costs Standardization Economies of Scale Cheap Labor Experience Transfers .

International Expansion Drivers: Business Environment (contd. Coca Cola. to all countries where Coke is present. Nevertheless Coca-Cola moved the management of its dedicated Red Lounge China marketing unit from McCann Erickson to Leo Burnett. At the same time Leo Burnett lost some international accounts of its longtime client. Inc. McDonald's. follows longtime client.) Competition  Example: McCann Erickson has been handling the Coca-Cola account in 129 countries since 1942. a competing advertising agency (2007).. Therefore the advertising agency. .

Subsidiaries can be established in these markets to take advantage of free trade within the region.International Expansion Drivers: Business Environment (contd. . and the European Union (EU) lower and eliminate barriers and promote trade within these markets.) Regional Economic and Political Integration • • Example: Regional agreements such as NAFTA.

and marketing communications. The Web and the Internet have revolutionized the way companies conduct business. .) Technology Examples:   Consumers worldwide are exposed to similar products. services. and entertainment.International Expansion Drivers: Business Environment (contd.

International Expansion Drivers: Business Environment (contd. and email Efficient transportation due to containerization and just-in-time technology .) Transportation and Telecommunications • • Lower cost and higher quality communication due to satellite technology. teleconferencing.

Opening of new markets previously closed.) Economic Growth • • Emerging middle class with increasing buying power in big emerging markets such as Brazil and India. such as the markets of China and Vietnam. .International Expansion Drivers: Business Environment (contd.

. Created opportunities to transform inefficient government-owned companies into successful enterprises.International Expansion Drivers: Business Environment (contd.) Transition to a Market Economy • • Transition of the Eastern Bloc to a market economy created important new markets.

Levi’s. MTV. Ralph Lauren. TV shows) . Heineken. Coca-Cola.International Expansion Drivers: Business Environment Converging Consumer Needs Uniform consumer segments emerging worldwide:  Global teenagers  Global elite Loyal to international brands (Nike.

Bagel shop in Berlin (Potsdamer Platz) .International Expansion Drivers: Business Environment Converging Consumer Needs Consumers traveling abroad bring with them product experiences and demand brands that may not be available in the home-country market.

Firm-Specific Drivers (contd.g.) Product Life Cycle Considerations: prolonging product lifecycle by entering growth markets e. Cigarette industr in emerging markets Intro Sales Growth Maturity Decline Sales Profits .

Firm-Specific Drivers (contd) High New Product Development Costs  Firm must look beyond home-country market to recover investment costs.  E. Nike: one year to develop a new product.g. that last only half a year on the shelves in the US .

Firm-Specific Drivers Standardization. Experience Transfers Experience in one country serves as basis for strategies in new international markets. Economies of scale. The firm lowers costs—thus prices—due to economies of scale and saving from standardization processes. Cheap Labor Price competition during the maturity of the product life cycle drives firm to new international markets in search of cheap labor. .

Obstacles to Internationalization within the company Finances Psychological: unknown environment Self-Reference Criterion outside Government Barriers Barriers imposed by International Competition .

g. (e. eye contact US-Japan)  To counter the impact of the self-reference criterion. the corporation must select appropriate personnel for international assignments and engage in sensitivity training.Obstacles to Internationalization Self-Reference Criterion  Conscious and unconscious reference to own national culture while operating in the host country. .

Obstacles to Internationalization Government Barriers  Restriction placed on foreign corporations by imposing tariffs. . such as restrictive import license awards. import quotas and other limitations.

Obstacles Internationalization to Barriers imposed by International Competition  Blocked channels of distribution  Exclusive retailer agreements  Cutting prices  Advertising blitzes .

Content      Basics of International Marketing The international Marketing Environment International Marketing Strategies International Marketing Mix Implementation of the international Marketing Strategies .

Content  The international Marketing Environment     World economy International Trade Regional Economic and Political integration Cultural Influence on IM .

national economies have become interdependent and respond to the same environmental forces The international economy performs as a single unit.g. (e. Finance/ Banking crises 2008/2009) .The World Economy Rather than rising and falling separately.

Categories of countries

First World (Developed countries), Second World
(Socialist countries), Third world (Developing countries)
United Nation: LLDCs Least developed countries and
lowest income) LDCs (less developed and lower income)
NICs (newly industrialized countries e.g. Singapore,
South Korea, Hong Kong)
World Bank (and here): Developed Countries, Emerging
Countries, Developing Countries

Big Emerging Markets

Present the greatest potential for international trade and
Set the pace for the economy in the region.
Examples: China, India, Argentina, Brazil, Mexico

Characteristics of Emerging Markets

High political stability
Sound currency, low inflation
Pro business, fiscally-conservative, transparent
government policies
Guarantees for the repatriation of dividends and capital
Sound corporate law
Markets reflecting fair prices
Work ethics and a culture of integrity

Content  The international Marketing Environment     World economy International Trade Regional Economic and Political integration Cultural Influence on IM .

Facilitators of International Trade    International Trade and Economic Development Organizations Government Organizations Other Institutions and Procedures Facilitating International Trade .

Promotes regional trade agreements and economic cooperation.World Trade Organization  Largest and most influential international trade organization (153  members on 23 July 2008 from 197 countries worldwide)   Ensures free flow of trade Functions:  Provides assistance to developing and transition economies  Offers help for export promotion.  Reviews members’ trade policies and engages in routine notification of new trade measures. .

Agreements:  General Agreement on Tariffs and Trade (GATT)  General Agreement on Trade in Services (GATS)  Trade-Related Aspects of Intellectual Property Rights (TRIPS)  .World Trade Organization WTO agreements represent trade rules and regulations and act as contracts guaranteeing countries trade rights and binding governments to free trade policies.

disarmament.G8  Members from the most industrialized countries: Canada. food safety. directors of central banks Addresses: biotechnology. government ministers. organized crime. economic development. Italy. arms control. Japan.Group of Eight . terrorism. France. United Kingdom. Germany. environmental issues and trade . drug trafficking. United States and Russia   Yearly meetings involve heads of state.

communication.United Nations Organizations      16 different United Nations Organizations Maintain international peace and security develop relations among countries achieve international cooperation encourage respect for human rights and freedom   Promote the economic and financial welfare of developing countries. agricultural and transportation infrastructures. Focus on developing industrial. .

a body instituting appropriate development strategies. Mediator between debtors and creditors Provides training and technical assistance for monetary and financial strategies . Member voting power linked to amount they contribute.International Monetary Fund (IMF)       Specialized agency of the United Nations (UN). 185 member countries Encourages unrestricted conversion of currencies through clear values.

sectoral development  Focus on health and information technology . works with IMF  Largest international bank that sponsors economic development  Employs international specialists in economics. finance.Facilitators of International Trade: The Development Banks  The World Bank  Specialized agency of the UN.

Facilitators of International Trade: The Development Banks (contd.)  African Development Bank (poverty reduction)  Asian Development Bank (Private sector)  European Bank for Reconstruction and Development (focused on markets of transition in Central and Eastern Europe)  Inter-American Development Bank (private sector projects) .

Facilitators of International Trade: Government Agencies • Ministry of Trade. such as the U. Ministry of Foreign Affairs • USA: • US Department of Commerce. Chamber of Commerce • US Agency for International Development (USAID) .S. Export-Import Bank of the United States • State and Local Government Agencies.

products. .Foreign Trade Zones (FTZs) Free Trade Zones    Tax-free area not considered part of the country in terms of import regulations and restrictions—site is considered an international area. Host country benefits:   Creates demand for local services. Increases trade balance—re-exports add to total number of exports from the respective country. Merchandise in FTZ is outside the jurisdiction of the host country’s customs services. and raw materials—hence local jobs.

 Payment is delayed until goods are sold. thus deferring tariffs until that time.  Firm can use the FTZ for breaking bulk.  Lowers prices for goods sold in the importing country .  Goods are imported when demand is high.Foreign Trade Zones (FTZs)  Firm benefits from using an FTZ:  Foreign goods are exempt from duties as long as they do not enter the country.

 E.Foreign Trade Zones (FTZs)  Firm benefits from using an FTZ.g.  Safer than most ports of entry—bonded warehouse. if products from that country have a positive country-of-origin (country image).  Products can be labeled as manufactured in the foreign trade zone country. Port of Rotterdam (NL) . cont.:  Helps importing country impose local content regulations on products from abroad.

assembled). • • Low tariffs assessed only on value-added processing that took place in the zone. manipulated (processed. Limits on products imported to encourage re-exporting.Other Customs-Privileged Facilities   Variations of FTZ Products are brought into an in-bond area. repackaged. . and re-exported to country where products originated.

Content  The international Marketing Environment     World economy International Trade Regional Economic and Political integration Cultural Influence on IM .

norms. religion) and history Physical distance/ not the same borders Differences in level of economic development Political considerations:  Concerns regarding loss of sovereignty/ national identity  A history of conflict .Obstacles to Economic and Political Integration     Differences in culture (language. traditions.

they are industry specific OPEC (Organization for Petroleum Exporting Countries)/ Oil and Gas NATO (North Atlantic Treaty Organization)/ Military OECD (Organization for Economic Cooperation and Development) APEC (Asia-Pacific Economic Cooperation) CIS (Commonwealth of Independent States) non-Baltic successors to the Union of the Soviet Union . Typically.General Agreements: Bilateral and Multilateral Forums and Agreements  Bilateral Agreements   Regional trade cooperation between two countries Multilateral Forums and Agreements:        General agreements between multiple countries.

Content  The international Marketing Environment     World economy International Trade Regional Economic and Political integration Cultural Influence on IM .

and traditions among the members of an organization or society. Culture is also defined as a society’s personality. Culture  Has a general influence on consumption  Has an influence on the stakeholders  Determines the manner in which individuals respond to Marketing strategies . rituals. norms.Culture    Culture is defined as a continuously changing totality of learned and shared meanings.

His secretary always claims he is not in. over lunch. and he does not return your calls. You come back to your home country and find that you cannot reach your Turkish client.  What went wrong? . You go to the self-service buffet and pile on your plate some tasty pork chops from a serving dish clearly marked "pork." You ask the waiter to bring a bottle of wine and offer some to your potential Turkish client. the potential client invites you to his home for coffee. and your client seems receptive to your price quote. Your products are known for their quality in Turkey and elsewhere in the world. at the Conrad Hilton Hotel. After lunch. you decline and state that you need to stay at the hotel to get some work done and bid him good-bye.Example The Turkish Client You are in the middle of negotiations with a potential Turkish client in Istanbul. he declines.

Could he have been offended by your not going to his house for Turkish coffee? Could the hotel staff have told him that you spent the evening next door. and Islam bans the consumption of pork and alcohol. a former palace. at another air-conditioned hotel. having yet another bottle of wine? .Example The Turkish Client in Turkey. the dominant religion is Islam.

Constituents of Culture

Ecology—The manner in which society adapts to
its habitat.
Social Structure—The organization of society.
Ideology—The manner in which individuals relate
to the environment and to others.

Elements of Culture

Cultural Values
Cultural Norms

Cultural Values

Enduring beliefs about a specific mode of conduct or desirable

Guide the selection or evaluation of behavior.

Ordered by importance in relation to one another to form a
system of value priorities.
Ultimately affecting product preferences
and perception of products

Learning New Cultures  Enculturation   Acculturation   Process by which individuals learn the beliefs and behaviors endorsed by one’s own culture Learning a new culture. Assimilation  Full adoption and maintenance of the new culture. and resistance to one’s old culture. .

Exclusive  What locals may do but an outsider cannot do. Adiaphora  What an outsider may or may not do. acceptable or unacceptable. .Cultural Norms  Norms are derived from values and defined as rules that dictate what is right or wrong.  Imperative   Minimum requirement for a  “survival” in a new country What an outsider must or must not do.

It has to stay on the table. don’t put it in the back pants pocket In Saudi Arabic woman are not allowed to drive or walk in public without a man. don’t write on the card. .Cultural Norms Imperatives Exclusives Business cards: Wearing a sticker Asia: presentation from a political and receiving with party both hands. Adiaphorous Eating with chopsticks in Asia. Drinking banana beer in East Africa.

Cultural Variability  Term used to differentiate between cultures on the Geert Hofstede Dimensions.S. which are:  Power Distance  The manner in which interpersonal relationships are formed when there are perceived differences in power. U. Low Germany Eastern Europe Latin America China High .

)  Uncertainty Avoidance  The extent to which individuals are threatened by uncertainty and risk and thus adopt beliefs and behaviors that help them to avoid the uncertainty.S. Low Germany Japan Central/ Eastern Europe China High .Cultural Variability  Term used to differentiate between cultures (contd. U.

China Sweden Low Masculinity Canada Argentina United Australia States High Masculinity .Cultural Variability  Terms used to differentiate between cultures (contd. rather than nurturing.)  Masculinity/Femininity  The extent to which a culture is characterized by assertiveness / selfconfidence.

Thailand Latin America China Low Individualism Australia United States GB High Individualism .)  Individualism/Collectivism  The extent to which individuals prefer to act in the interest of the group rather than in their own selfinterest.Cultural Variability  Terms used to differentiate between cultures (contd.

tone of voice.High vs. Low Context Cultures  Low-Context Cultures   What is said is precisely what is meant. Context:    Message source The source’s standing in society or in the negotiating group The source’s level of expertise. High-Context Cultures:   The context of the message is meaningful. body language .

Cultural Change and Marketing Marketers need to integrate culture when designing a marketing strategy by going through the following process: Researching symbolic elements and cultural meanings in consumers’ lives Identifying cultural meanings of the product Designing the product accordingly Designing the marketing campaign using symbolic cultural elements .

etc.    Entertainment (MTV.The Global Consumer Culture   Shared consumption-related symbols and activities that are meaningful to market segments A global consumer culture is attributed to the diffusion of products from the United States to the rest of the world. . CD’s) Hamburgers and pizza Jeans and running shoes. movies.

Global Consumer Culture Trends  Proliferation of transnational firms and the related globalized capitalism  Globalized consumerism and the desire for material possessions  Homogenization of global consumption  Referred to as McDonaldization or Cocacolonization .

Foreign consumer culture positioning  Positioning the product as symbolic of a desired foreign culture.Positioning Based on Culture  Global consumer culture positioning   Local consumer culture positioning   Positioning the product to appeal to individuals who want to be part of a global consumer culture. Positioning the product so that it is associated with local cultural meanings. .

Content       Basics of International Marketing The international Marketing Environment International Marketing Strategies International Marketing Mix Implementation of the international Marketing Strategies Case studies .

Content  International Marketing Strategies    International Marketing Research International Marketing Planning Expansion Strategies and Entry .

International Marketing Research: Definition International marketing research is the systematic •design. . •interpretation. •collection. •recording. •and reporting of information for a particular marketing decision facing a company operating internationally. •analysis.

International marketing research is especially complex.   Cultural differences Consumers remain sometimes suspicious of research .International Marketing Research   International marketing managers need to constantly monitor the different forces affecting their international operations.

Types of International Marketing Research .

and Trends     Acquisition analyses Diversification analyses Market-share analyses Export research . Market Characteristics.Research of Industry.

g. they are more likely to avoid social risk than Westerners .International Buyer Behavior Research      Brand preferences Brand attitudes Brands awareness studies Purchase behavior studies Consumer segmentation studies  e. Consumers in China tend to go for established luxury brands.

International Product Research       Concept development and testing studies Brand name generation and testing Product testing Competitive product studies Packaging design studies Test marketing .

International Pricing Research            International market potential studies Sales potential studies Sales forecast Cost analysis Profit analysis Price elasticity studies Competitive pricing analyses Studies projecting demand Currency and countertrade studies Studies of inflation rates and pricing Studies of negotiation tactics .

generate hypotheses)  Descriptive (observe and describe the problem)  Causal research (cause-and-effect relationships)  STEP 2 Develop the Research Plan (sources. methods. costs) .The International Marketing Research Process  STEP 1 Define the International Marketing Research Problem and Research Objectives  Exploratory (define the relevant dimensions. instruments. procedures.

The International Marketing Research Process  STEP 3 Decide on the Information Sources Secondary Data:  Collected to address a problem other than the specific international marketing problem that the company is currently facing  Internal and external secondary Data  Collected before primary data Primary Data:  Collected to address the specific international marketing problem .

and Validity:   Published statistics may be unavailable—in many markets. . Data may not be reliable and valid—data may be underreported or exaggerated.Secondary Data  Availability. relevant market data has not been collected. the most accurate secondary data is available on industrialized countries. Reliability.

Time consuming . Expensive: The costs of collecting primary data in international markets are likely to be much higher.Primary Data    Used in international marketing research far less than it should be: Temptation is to use secondary data to serve all research functions. especially if an adequate marketing research infrastructure is lacking.

 Examples:     Focus Groups Depth interviews Observation Constraints:   Responses can be affected by culture. .Qualitative Research  Qualitative research has been useful as a first step in studying international marketing phenomena. Individuals may act differently if they know they are being observed.

involving either descriptive research approaches. (survey research).g.  Examples:     Content analysis.Quantitative Research  Quantitative research are more structured. e. advertising research Survey research Experimental research Constraints:  Respondent factors  Infrastructure factors . or causal research approaches (experiments).

The International Marketing Research Process  STEP 5 Design Data Collection Instrument  Emic instruments   Etic instruments   Measure phenomena specific to each culture. Constraints:  Translation costs and accuracy  Instrument reliability  Reluctance to answer certain questions . Measure the same phenomenon in different cultures.

The International Marketing Research Process  STEP 6 Decide on the Sampling Plan  Sample Unit (Who)  Sample Size (How many)  Sampling Procedure (Selection)  STEP 7 Collect. Analyze. and Interpret Data .

complemented by supporting software and hardware designed for the gathering and interpretation of business and environmental data.  Computerized  Interactive  Flexible  Discovery oriented .Decision Support Systems for Global Marketing  A coordinated collection of data. tools. systems. and techniques.

and experts are queried again with the purpose of arriving at a consensus . findings are aggregated.Sales Forecasting  Sales Force Composite Estimates Personal observations and expectations of the local sales force and the international sales manager Jury of Expert Opinion   Opinions of different experts about future demand The Delphi Method    Experts to estimate market performance.

Sales Forecasting  Time Series and Econometric Models Use data of past performance to predict future market demand. or In markets which share similar cultural characteristics . or Where the product is in the same market development stage. Analogy Methods    Estimation method that relies on developments and findings in markets …    With similar levels of economic development.

in markets where they are available • Involve comprehensive store audits. .Sales Forecasting Point of Sale Research • Made with the help of store scanners.

Content  International Marketing Strategies    International Marketing Research International Strategic Marketing Planning Expansion Strategies and Entry .

Developing an International Marketing Strategy  Requirements:  Strategic fit between the company’s objectives.  The strategic planning process must be systematic and continuous Company’s commitment to its international markets. international environment. .  Link between the company’s resources and its international objectives in a complex. and resources and the challenges of its international market or markets. competencies.

. or at brand level. or divest. Has shorter-term focus Involves the marketing department   Corporate   Strategic plan allocates resources and establishes objectives for the whole enterprise worldwide. product line level. Has longer-term focus A marketing plan is developed at product level.The International Strategic Plan on different levels       Strategic plan allocates resources to each business unit based on division goals and objectives. invest in. Has long-term focus Involves the highest levels of management Involves international target market selection Division Business Unit Product Level  Planning involves decisions on which consumer segments to target in each country and how to target them. Portfolio analysis is used to decide which brands to harvest.

Developing the International Marketing Plan    Develop strategies for the target market:  Product mix. Pricing Plan international marketing programs Manage the international marketing effort  Organize  Implement  Control . Distribution. Promotion mix.

and marketing programs with these segments in mind. services.International Target Marketing The process of identifying and focusing on those international market segments that the company can serve most effectively and designing products. .

. Select segments company can serve efficiently. communicating through the marketing mix.International Target Marketing  Is Used by Companies to:    Identify consumer segments with similar traits (International market segmentation). Develop products tailored to each segment (International market targeting). product traits and benefits that differentiate it in the consumer’s mind (Positioning). Offer products to the target market.

International Segmentation The process of identifying countries and/or consumers that are similar with regard to key traits. such as product-related needs and wants. . Must be performed at country (macro segmentation) level AND at the consumer level (micro segmentation). that would respond to a product and related marketing mix.

Requirements for International Segmentation The extent to which international market segments respond differently to marketing strategies The extent to which the international target market is responsive to the marketing strategies used The ability to communicate with the international target market The ability to estimate the size of the market The extent to which the international market is large enough to warrant investment The extent to which internationa consumer preferences are stable over time .

other trade statistics) .International Macro-Segmentation Country Attractiveness Analysis  Market potential–indicators:      Gross domestic product (GDP) per capita Industrial and agricultural sector statistics Market size and potential Consumer buying power Investment figures (Foreign direct investment data.

legal and financial environment of country:  Ethnic conflict  History of war engagement  Antiforeigner sentiment  Recent nationalization activities  Legal ambiguity  Trade barriers  Exchange rate controls .International MacroSegmentation  Political.

Quality of telecommunication and transportation infrastructure.International MacroSegmentation  Marketing support infrastructure:     Availability and reliability of distribution and logistics providers Availability of competent partners for strategic alliances. Availability of other service providers: - Marketing research firms Financial firms Management consulting firms .

International MacroSegmentation   Strength of own Brand — brand franchise  Lead country (where products are first adopted)  Lag country (where products are last adopted) Degree of Market Fit with Company Policies. Goals. and Resources. .

g. Labor costs Brand management Working hours New markets Machine running times Taxes Environmental standards Administrative barriers Import barriers Structure (natural) barriers Strategic (competition) barrie .Typology of international target market Market attractiveness: e.

Bases for Micro-Segmentation   Clusters of consumers that respond in a similar way to the marketing strategies Demographic (descriptive statistics):  Age  Occupation  Education  Income  Ethnicity  Race  Nationality  Life-cycle stage  Social class .

Bases for Segmentation   Benefit Segmentation  Example: Cooking oil markets can be segmented based on benefits sought—olive oil is targeted to consumers who seek health benefits. . Geographic Segmentation  Example: Avon segments its market geographically.

Bases for Segmentation Usage Nonusers Occasional users Medium users Heavy users Ideal consumer User Status User of competitors products Potential users First time users Regular users .

 Calculate country attractiveness score.  Evaluate country performance on each of the screening criteria.Country Screening and Selection Three stages:  Assign importance score to each country screening criteria. .

regardless of the number of markets and countries targeted. Example: Coca Cola                                             . or even create. market segments that want different benefits from a product and target them with different brands. Companies that cannot afford to compete in a mature market with an oligopoly may choose to pursue a small segment–a niche. using different marketing strategies. Example: Mont Blanc pens Undifferentiated targeting strategies The product is aimed at all markets using a single strategy. Example: Procter & Gamble with different laundry detergents Concentrated targeting strategy Companies select only one market segment and target it with a single brand.Target Market Decisions Strategy Purpose Differentiated targeting strategy Differentiated targeting strategies identify.

2. 6. 4. Attribute/Benefit Positioning Price/Quality Positioning Use or Application Positioning Product User Positioning Product class Positioning Competitor Positioning .Positioning the Brand Definition: Placing the brand in the consumers mind in relation to other competing products Six possible positioning strategies to reach a unique selling proposition 1. 5. 3.

Positioning the Brand Attribute/Benefit Positioning:  Positioning that communicates product attributes/ benefits.g. Mercedes-Benz. Wal-Mart)  Or a strategy that offers the best product that money can buy (e. Kempinsky) .g.g. Procter & Gamble) Price/Quality Positioning  A strategy whereby products and services are positioned as offering the best value for the money (e. differentiating each brand from the other company brands and those of competitors (e.

g. bikes in Asia or in the USA) Product User Positioning  A positioning strategy that focuses on the product user. (e.g. Mont Blanc for business executives) . rather than on the product.Positioning the Brand Use or Applications Positioning  The process of marketing a precise product application that differentiates it in the consumers’ minds from other products that have a more general use e.

E. Disney sells magic. directly or indirectly.Positioning the Brand Product Class Positioning  A strategy used to differentiate a company as a leader in a product category.g. Harley sells excitement Competitor Positioning  The process of comparing the firms’ brand with those of competitors. .

Content      Basics of International Marketing The international Marketing Environment International Marketing Strategies International Marketing Mix Implementation of the international Marketing Strategies .

Content  International Marketing Strategies    International Marketing Research International Marketing Planning Expansion Strategies and Entry .

Going International: Evaluating Opportunities  Consider drivers of international expansion in the environment:       Competition Regional economic and political integration Economic growth Technology Converging consumer needs Consider firm-related international expansion drivers:     Product life-cycle considerations New product development costs Experience transfers Labor costs .

. Primary international entry mode in the service industry. trademarks and business know-how in return for royalties. Franchisee:    Pays royalties for the right to use the know-how.  Franchisor: Gives franchisee right to use brand name. trademarks. and brand name.International Entry Mode: Franchising Franchising refers to the methods of practicing and using another person's philosophy of business.

and political instability  Higher level of control  Very rapid market penetration Disadvantages:     Can be problematic if franchisee cannot guarantee quality Can produce a new competitor: the franchisee Problematic if the concept can be easily copied . financial.Franchising  Advantages:  Lower-risk entry mode  Limits exposure to economic.

  International firm provides expertise. the infrastructure. capital. local expertise and relationships. among others.International Entry Mode: Joint Venture Joint Venture: A corporate entity created with the participation of two companies that share equity. trademark Local partner provides the labor. and labor.  Preferred entry mode in developing countries. know-how. where they contribute to developing local expertise and to the country’s balance of trade if production is exported. and connections to the government . most of the capital. brand name reputation.

Costs and risks shared with joint-venture partner. potentially resulting in higher profits.5 years .Joint Venture Advantages:    Higher control entry mode. relationships. Local partner shares local market expertise. Disadvantages:    Repatriation of profits may be difficult if local government has contro over/stake in the local joint-venture partner. Can produce a new competitor: the joint-venture partner 70% of all joint ventures break up within 3. as well as connections to government decision-making bodies.

rather than a new company (as in the case of the subsidiary). Involves substantial investment  Sales office  Showroom Engage in a full spectrum of marketing activity High level of control .International Entry Mode: Branch Offices  Branch Offices:     Entities are part of the international company.

International Entry Mode: Wholly Owned Subsidiaries  Wholly Owned Subsidiaries:      Involve long-term market commitment High cost High control of operations Greatest level of risk Can be developed by the company (greenfielding) or can be purchased (acquisition or merger) .

International Strategic Alliances Sometimes licensing. franchising and joint ventures are called Strategic Alliances. . Typically. Strategic Alliance: a relationship between two or more companies attempting to reach joint corporate and market related goals .while remaining independent organizations. But in general the Strategic Alliances are more short term and have not the same level of international commitment than the named entry modes. the term refers to nonequity alliances.

 Contract manufacturing (manufacture of products) Engineering alliances.  Distribution:  One firm handles the distribution or some aspect of the distribution process for another firm. in which one firm handles the others manufacturing (or some aspects of it).  . R&D alliances  Marketing:  A non equity relationship. Technological alliances. in which one firm handles marketing (or some aspects) for another firm.International Strategic Alliances Examples of Strategic Alliances Manufacturing:  Manufacturing alliance (A non equity relationship.


Basics of International Marketing
The international Marketing
International Marketing Strategies
Implementation of the international
Marketing Strategies

Organizing for International Marketing

Companies often need to reorganize to more effectively meet
the international challenges
Organizational designs have to fit with their external
environment and with company characteristics and goals.
Organizational design is determined by factors:

In the firm’s environment

competition, (quick decisions->more flexibility>decentralized)
 environmental stability,

similarity with the home country,

common regional integration,
 availability of qualified labor.

Factors within the firm

Factors Within the Firm

Internationalization as a priority:

Organizational structure with worldwide regional
divisions in charge of particular countries.
Involvement in international business

an international division that oversees international
Minimal involvement in international business

small international department.
Companies usually maintain their organizational structure
when they go international.

Concerning hierarchy and centralization.

Concerning product lines

International Organizational Designs International International divisions divisions The The matrix matrix structure structure Organizational Organizational designs designs Product Product Divisions Divisions Worldwide Worldwide regional regional divisions divisions .

Worldwide Regional Division Structure     Operations are organizes by geographical region or by country. Subsidiaries report directly to the single division responsible for operations in the country or geographic region. Creates competitive advantage for firms  Example: It is better equipped to immediately process and respond to country-specific information and conditions because of its strong regional focus. . Allows for some duplication of activities and thus might increase costs.

F .Worldwide Regional Division Structure W o r l d w i d e R e g i o n a l D i v i s i o n S t r u c t u r e : Worldwide Regional Division Structure: Frito-Lay.

Product Division Structure    Subsidiaries report to the product division (strategic business unit) with responsibility for the particular products. In the past. this format is replaced by the matrix structure. . this structure was common for high-tech companies or multinational companies with diversified portfolios increasingly.

.International Division Structure    Firms with an international division have two main divisions:  The domestic division  The international division export department structure: division has responsibility for all international operations international division structure: all foreign subsidiaries report directly to a single division responsible for international operations.

two dimensions are integrated so that each operational unit reports to both region/country managers and product managers. product. E.g. In a matrix structure.Matrix Structure    Takes into account the multiple dimensions involved in doing business internationally— functional areas. and region/country. Unilever with global and local brands .

Europe Chemicals Plastics Performance Products Functional Solutions Agricultural Solutions Oil & Gas North South America. Asia Pacific America Africa. Middle East .Example of Matrix Structure: BASF Corp.

communication.Controlling Marketing Operations Challenges  Local units and a regional focus add levels that complicate management.  Tendency to resist influence in both directions:  Headquarters involvement  Subsidiary Input .  External environment changing at different rates. and evaluation processes.

 Rotate managers to different assignments.  Training employees .Controls Formal Controls  Establishing performance standards  Measuring performance  Addressing discrepancies Informal Controls  Frequent contact between home-country headquarters and regional/local office.  Hire third-country managers to oversee new or problematic operations.

Future Perspectives in International Marketing  Internet:  expanded the area of international marketing  increased access to new markets  Research conducted by Nielsen found that more than 491 million people are using the internet (one third in the US) .

7 28 hrs 45 min 33 United States 61.0 39 hrs 49 min 44 Germany 32.6 14 hrs 57 min 25 Spain 12.2 25 hrs 27 min 30 Japan 36.0 82 hrs 32 min 67 .8 34 hrs 36 Italy 18.Internet use in selected international markets Country Active Users (in millions) PC Time per Person per Month Sessions/Visits per Person per Month Australia 10.9 35 hrs 53 min 31 France 23.8 34 hrs 28 min 63 Brazil 17.

beauty 23.70 Kitchen and home 4.00 2004 544.70 c.6 28.1 26.60 Jewelry 4.50 b.10 2005 656. Retail Segments' Share Product Category % Share Drugs. Geographic Segmentation . health.50 Computer and related materials 17. Online Retail Sector Growth (in billions) Year $ Billion % Growth 2003 425.50 Clothing and shoes 11.4 20.00 Other 38." April 2006: Datamonitor a.Internet retail industry profile Source: Internet Retail Industry Profile: “Global Internet Retail.

adding to the company’s risk. .Challenges for the Internet  Companies can’t handle the amount of sales:  46 percent of companies with e-commerce capabilities turn away international orders because they do not have the processes in place to fill them. Difficulty in handling cumbersome payment mechanisms. Difficulty handling the destination country’s import and tax regulations or export controls in the home country.  About $10 million are turned away annually by companies due to:     Language and cultural barriers that hinder basic communications. High rate of credit card theft.

there will be significant changes in the consumption process. The battle for market share for market leaders will increasingly take place in developing countries. (Environmental concern) .Product Challenges  Product life cycles will become shorter:    International firms must be prepared for rapid new product introductions simultaneously in world markets. As the world population grows. regardless of the markets’ levels of development.

.Promotion Challenges    Firms will compete on their ability to resonate themes that appeal to world consumers. Consumers will expect extensive information on the websites of companies with which they do business. Integrated marketing communications are going to be standard for both international consumer product companies and for business-to-business communications.

Global advertising campaigns will continue to be developed for global market segments. services and issues.National and Global Appeals National advertising campaigns will continue to be used for local brands. The global elite continues to be the target market for the Jaguar automobile. .

2001. Entertainment will be especially important when communicating with consumers in all retailing environments. . Companies will have to abide by post September 11. which will further reduce merchandise theft.Distribution     Companies will continue to pursue measures to reduce distribution costs by adopting just-in-time inventory systems and creating product flows rather than stocks. security measures. Companies will coordinate their inventory systems with suppliers and clients through electronic data interchange.