Chapter 21: Tapping into global market

Group members:
Nasirah Binti Salleh BBo8110126
Khong Kar Yan BB08110016
Siti Noor Sadilah Binti Abd BB08160495
Rahman
Yuliza Binti Josef BB08160522
Norindah Binti Yusoff BB08110233
Siti Noor Azlinah Binti Halim BB08110305
Introduction

What is F1 racing?
 The highest class of single seater auto racing.
 F1 performance higher automobile engine –
depends on electronics, aerodynamics,
suspension and tyres.
 Countries -17
 Teams -12
 Drivers – 24
 Bernie Ecclestone was introduce the F1 to sport
world and Europe is the first place F1 is started.

 St Peter South Elmham, Bungay.

 born 28 October 1930 and is a British sports
entrepreneur.
 F1 have the same ways in manage their
product to all the racing.
 The event usually begins on Friday but except
in Monaco where it begins on Thursday, with
two free practice sessions.
 The purpose is to make the drivers know
about the circuit and the team to experiment
with their cars.
Deciding whether To Go Abroad
 factors into international arena:
1. foreign markets present higher profit .
2. needs a larger customer.
3. reduce its dependence on any one market.
4. global company offering better products.
5. increase its home image.
 Target market- all over the world
 capaian- television (ESPN, BBC, dll)
 4 stages for international process:
1. no regular export activities
2. export via independent representatives.
3. establishment of one or more sales
subsidiaries.
4. establishment of production facilities
abroad.
DECIDING WHICH MARKETS TO ENTER
How many markets to enter?

Waterfall approach
SprInkler Approach

Sprinkler Approach
Belgium Italy UK monaco spain Hungary
Germany
China

turkey

Bahrain

Abu Dhabi
Developed vs developing markets
Sources : World Development Indicators database, World Bank, 27 September 2010 &
International Trade Centre

Developed countries GNI per capita Developing countries GNI per capita
(US dollars), 2009 (US dollars), 2009

 
Monaco (Eur) 203,900 Singapore (Asia) 37,220

Belgium (Eur) 45,310 Korea Republic (Asia) 19,830

Australia (Aus) 43,770 Hungary (Asia) 12,980

Germany (Eur) 42,560 Turkey (Asia) 8,730

Canada (N.Amr) 42,170 Brazil (S.Amr) 8,040

Great Britain (Eur) 41,520 Malaysia (Asia) 7,230

Japan (Asia) 37,870 China (Asia) 3,590

Italy (Eur) 35,080

Spain (Eur) 31,870

Bahrain (Asia) 25,420

Target market
High Education

High education

F1 Fans

High income

F1 fans
DECIDING TO ENTER NEW MARKET

 Direct export and indirect export

 Using a global web strategy
 Licensing
 Joint Venture
 Direct investment
Direct and Indirect Export

 Direct Export is a company export

directly to customers that interested to
their product or service.
BUT,
 Indirect Export means selling to an
intermediary
 FORMULA
1

GEOGRAPHICAL
DISTRIBUTION

AUSTRALIA, ASIA, EUROPE, NORTH ANS

SORTH AMERICA

AUDIENCES / CUSTOMERS
Global Web Strategy

Electronic communication via the

internet.
To attract new / existing customers
outside their home countries.
To built global brand awareness.
Licensing

 Licensor agree to permit licensee to use the

manufacturing, processing, trademark and some
other skill.

+
Joint Venture

INVESTORS COMPANY
FOREIGN OWNERSHIP
LOCAL
+ CONTROL

+ =
Direct investment

 Foreign company making a physical

investment into in another country.
 eg. building a factory or an office in local
country.
Deciding on the marketing program
Cultural Dimension

 Individualism vs collectivism
 Individualism : ties between individuals are loose, everyone is expected to
look after himself or herself and his or her immediate family only
 Collectivism: people from birth onwards are integrated into strong cohesive
in groups.
 High vs low power distance
 less powerful members expect and accept that power is distributed
unequally.
 Masculine vs feminine
 Masculinity: social gender roles are dearly distinct
 Femininity: women more think towards their responsibility (family).
 Weak vs strong avoidance
 members of a culture fell threatened by uncertain situations
 Product & Communication Strategy
Product

c Develop
Do not change Adapt
o new product
product product
m
m
u
Do not change Straight Product
n
communications Extensions Adaptation
i
c Product
a Invention
t
Adapt Communication Dual
i
communication Adaptation Adaptation
o
n
Setting Price
 Set a uniform price everywhere
 Price same for all country

 Set a market-based price in each country

 the price needs the company to differentiate
their market in each country with different price

 Set a cost based on price in each country

 set the price based on the total cost of the fixed
and variable cost in producing the product.
 Country of origin effect

• Country of origin effect perception is the

mental association and belief cause by a
country.

• to promote and sell their product and service

Building the country image

 idea – Tun Mahathir Mohamad (1999)

- can gain advantages even during
economic recession

 instrument to promote Malaysia to the whole

world
- show the world without paying single sen
Con’t
 opportunity for Malaysia to showcase our
ability to organize world class sporting events
- after organized 16th Commonwealth Games in
September 1998

 investing in F1 not only concern about

technology develop for motor racing engine
- apply for country’s automotive engine
Deciding the marketing organization
 Export department
-expanded to include various marketing services
 International division
-activities by geographic organization, operating
units, and the international subsidiaries.
 Global organization
-the formula 1 racing is high performance engine
automobile over the world included 18 country
-it also can reach audience through the world within
website global strategies and others media
SPONSORSHIP
 F1 circuits
EUROPE

KOREA

AUSTRALIA

BAHRAIN

MONACO
THANK YOU