Lecture 1->

Globalisation
A Global Brand - a brand that uses the same name and logo, is recognized, available, and accepted
in multiple regions of the world, shares the same principles, values, strategic positioning, and
marketing throughout the world, and its management is internationally coordinated, although the
marketing mix can vary.”

Global integration is enhanced by factors such as: falling national boundaries, regional unification,
global standardization of manufacturing techniques; global investment; production strategies; rapid
increase in education; world wide web increased consumer sophistication and purchasing power.

The forces for global integration and market responsiveness:

• Removal of trade barriers

• Global accounts/customers
• Standardized worldwide technology
• Worldwide markets
• Global village
• Worldwide communication
• Global cost drivers

Why do differences between countries still matter? How can we create value by utilising the
differences? Why international markets? • Saturation in domestic markets • Marketing is growing in
certain international markets • Decline in domestic markets • Demand for product / service in
certain markets • Extend a products lifecycle Transferring knowledge and “good practices from one
country to another and use them in other international markets”.

Glocalization
• A product/service that is developed and distributed globally, but is also adjusted to respond
to the user or consumer in a local market.

For example MCD – they have the same internationalisation strategy, same name, same style,
however, in different countries they add some different products in order to satisfy the taste of
specific customers – Italy – Mozzarella bites;

Brand Value
Why do consumer value brands? -> decreasing time, money and cognitive load of making purchase
decisions; reducing customer uncertainty by signalling quality and identifying the source/maker of
the product; providing emotional satisfaction.

You create value at home first -> what should do the brand?
->Brands make decision making easier
->Reduce consumer risks ->So, brands always should deliver QUALITY.
->Emotional benefits: a third important function of a brand is to fulfil emotional needs. Marketers
have long known that consumers can attach emotional meaning to brands.
COMET model
The COMET framework helps executives to map out ways for their companies to create global brand
value. -> the benefits a global brand can deliver to multinational company.

• C = Consumer preference for global brands – easy to find everywhere, famous

• O = Organisational benefits (rapid rollout of new products) -> new product will be shown to
more people
• M = Marketing benefits (superior branding programs; media spillover) – trust when travelling,
huge budget, better ads
• E = Economic benefits (cost reduction in production and procurement)
• T = Transnational innovation (pooling of R&D globally; bottom-up and frugal innovation)

Value Chain
• Consists of primary activities that are directly involved in creating and bringing value to
customers (upstream and downstream activities), and support activities (enable and
improve the primary ones- technology development, HR)

Virtual value chain – extended value chain, where information processing creates value for the
customers too. The difference between both lies within the fact that for the virtual one you get infro
from the customers and help in creating value chain (Netflix). In the virtual value chain, information
is used to create value, not just support.

!-> Upstream activities is research, development and production for example. You have technology
and activities that are involved in creating value for your consumers. And the downstream activities
focus on how you bring those activities back to your target group, so by marketing and sales and
services. But it’s not only about a product but also about brand and image building.!
International Marketing
• Process by which individuals/companies-> identify needs and wants of the customers in the
different international markets; provide products, services and ideas competitively to satisfy
needs and wants of different customer groups, Communicate information about the
products and services; and Deliver the products and services internationally using one or a
combination of foreign entry modes

Globalisation = Refers to firms buying, producing and selling products and services in most countries
of the world;
Internationalisation = Doing business in many countries of the world but often limited to a certain
region (e.g. Europe, China/Asia etc.)
Global marketing = Applies to the major global brands that tend to largely standardise their
marketing mix e.g. Coca Cola, McDonald’s and Nike are usually represented in 100+ countries

LSE -> large scale enterprises – firms with more than 250 employees; evenue over $1 Billion - could
be spread internationally - heavy reliance on advanced technological
SME-> small and medium enterprises -> mostly in EU and international organisations -> fewer than
50 employees (small); fewer than 250 ( medium); $5-$10 million - One country or one city - Little to
no technological utilization → work done manually

Economics of scale - > accumulated volue in production, resulting in lower cost price per unit ->
spreading fixed costs; gives the chance to concentrate global purchasing power over suppliers, which
leads to volume discounts and lower transaction costs; gives global player the chance to build
centres of excellence for the development of specific technologies and products
- Cost advantages reaped by companies when production becomes efficient. Companies can achieve
economies of scale by increasing production and lowering costs. This happens because costs are
spread over a larger number of goods. Costs can be both fixed and variable.

*company saves money due to an increase in its level of production, it saves money of cost per unit
– buying materials more than before -> getting cheaper deal.
A lot of advantages – when focusing on 1 product, you improve its quality. This is more likely to help
you become leader in the industry. Furthermore, you can decrease the price of the products and
decrease the price -> competitive advantage.
disadvantages - > at one moment prices will stop getting lower, so the company may not be able to
continue. Furthermore, it may lead to focus on only one product and no development.

Economics of scope – reusing resource or knowledge from one business/country in additional

businesses/countries. The customers are purchasing the identical products in many countries.
-> Same car engines in different cars.
- the production of one good reduces the cost of producing another related good. Economies of
scope occur when producing a wider variety of goods or services in tandem is more cost effective for
a firm than producing less of a variety, or producing each good independently. When SME´s form an
alliance or create a joint venture with someone abroad who has markets knowledge they can create
→ economies of scope

*company saves money due to diversifying products. Uses a set of resources due to lower cost per
unit (new menu in the restaurant that uses the same ingredients, you don’t buy new ones).
Advantages-> Increased efficiency – same sources are used for more product, this is cost-efficient,
environmentally friendly and time-saving; increasing product variety and improving customer
satisfaction; decreasing business risk since you have more project.
disadvantages – companies may lack enough knowledge to expand their products so much. A
company may weaken its branding due to offering too many products.

Psychological distance – cultural difference, language difference, political systems -> companies
exporting to the countries similar to their home market (neighbouring countries)

Strategic drift-> falling behind trends and losing the competitive advantage

Centralised marketing -> cost effective, easy to control, provides better understanding of the
customer journey // poorly implemented centralisation can burden the business with poor service
and high costs.

LSE
Resources Higher finances: managers
very well educated
Formation of strategy Adaptive decision-making
model in small incremental
steps- each new product =
small innovation; proactive
owner
Organisation Formal/hierarchical;
independent of one person
Risk taking Risk averse; focus on long
term chances
Flexibility Low
Taking advantages of High advantage of those
economies of scale
Use of information Advanced techniques such as
internet, consultancy,
databases
SME
Lack of financial sources, not so
educated managers
Emergent strategy formation:
entrepreneurial decision making
model(each new product – innovation)
owner is involved in decision making -
reactive
Informal: owner has the power and
control
Less risk taking; sometimes more risk
taking
High
Limited advantage of those
Informal information gathering;
inexpensive way such as face to face
communication
Barriers and risks -> insufficient finances; insufficient market knowledge; lack of foreign market
connections; lack of expert commitment; lack of foreign channels for distribution; market,
commercial and political risks

Uppsala Internationalisation Model

 Suggest that a firm’s international expansion is a gradual process dependent on
experimental knowledge and incremental step.

 Assumes that firms proceed along the internationalization path in the form of logical steps
based on gradual acquisition and use of information gathered in foreign market and
operations.

 Slowly steps must be taken to minimalize risks and costs-> no regular export activities;
export via independent representatives; foreign production

Example - > ZARA -> first steps in Spain, then expansion in Spain, then in Portugal ( close); then other
international markets. Oil stain strategy -> dominate strongly in one place, then spread across the
country, and then to other markets.

The Network Model

➢ The internationalization of a company is dependent on the resources controlled by other
companies, located in the target market. A company accesses those external resources by
using its network.

➢ The successful internationalization is a result of interaction activities taken by other

companies that are inside the network in the specific country.
 ➢ Network is the bridge to internationalization.

Born Globals
 A firm that from its ‘birth’ globalizes rapidly without any preceding long-term
internationalization period. Global start-ups, no boundaries, here and now!

 The company possesses unique assets and its focusing on the global market segments at the
same time as home market. Customer-oriented

 Being global is not an option, but an essential.

Global brands and customer proposition

COMET model – benefits; marketing strategy of any global brand needs-> the development of
compelling customer proposition, specifying the target segments and connecting the core features
with the benefits of the brand and a marketing strategy to deliver that proposition to the target
segment.

Types of global brands:

Value Brand Mass Brand Premium Prestige Fun brand

Brand Brand
Examples IKEA; Hiaomi; Samsung; Apple; Ferrari; Zara,
Dacia Toyota; Loreal Jaguar; cosmopolitan,
Emirates Disney
Universal Best possible Desire for Desire for the Social Stimulation,
need value for quality; risk best product; distinction change,
money aversion risk aversion excitement
Value Acceptable High quality; Best quality; Aspirational Lifestyle;
positioning quality; price above emotional selective; enjoyment;
lowest price average benefits; high very high low price
price price
Global target Cash-strapped Middle Class; Affluent Global elite; Global youth
segments customers; Mainstream customers; imitators of
smart Firms firms that global elite
shoppers; low NEED the
risk purchases product to
operate
COMET Perceived Perceived Global Global culture
quality; quality; culture
country of country of
origin origin

International Competitiveness
Development of international competitiveness include:

1. Analysis of national competitiveness ( Porter Diamond) macro level

2. Competition analysis in an industry (Porter’s Five Forces) meso level
3. Value chain analysis – micro level -> competitive triangle and benchmarking
To develop international competitiveness the firm should be able to adjust to customers,
competitors, public authorities, to be able to participate in international competitive arena and to
establish the needed resources, competencies and relations.

Porter’s Diamon(macro level)

Factor conditions – factors of production that include things like skilled labour, education, capital,
climate, and infrastructure. -> MOST IMPORTANT – because country’s economy can create them.

Demand conditions – the market size, rate of growth and sophistication.

Firm strategy, structure, rivalry – competition in the home market drives innovation and quality, a
lot of competition = company tries to compete by offering quality products and services, to develop
innovations.

Related and supporting industries – raw material from fabric suppliers in Italy helps drive the
success of the Milan fashion industry.

Government – can play a powerful role in encouraging the development of industries within their
own borders – roads; airports; financial support; etc.

The characteristics of the ‘home base’ play a central role in explaining the international
competitiveness of the firm – the explaining elements consist of factor conditions, demand
conditions, related and supporting industries, firm strategy – structure and rivalry, government, and
chance. Firm structure, strategy, and rivalry: competition and enough resources will help with
internationalization → model is about evaluating national competitiveness Demand conditions:
conditions that the environment demands from the company Government: by providing subsidies
for example can create economies of scale, policies in home country can help with
internationalization as well Related and supporting industries: relationship between suppliers and
other industries in a country, working together to becoming the best, innovative Factor conditions:
what does a country have in terms of education or other factors within the country, weather can
also be a factor Chance: something that can happen and is out of your control: Corona for example
→ helped the online business sector

Example - > Production of luxury cars in Germany -> A lot of competition, companies are always
striving for the best; demand conditions because of autoban; factor conditions such as educated
engineers, government focus on science; government launches more roads and canals for this.

Porter’s Five Forces ( meso level, competition analysis)

• Model that identifies and analyses 5 competitive forces that shape an industry; helps
determine weaknesses and strengths
Example Air line industry planes ->
1.Power of suppliers – high, because they are dependent on fuel and aircrafts. This is all affected by
the external environment, over which the companies have no control. The price of fuel is also
changing.

2.Power of buyers – high, because customers can easily check other companies prices and make a
comparison. There are no switching costs, but customers prefer to fly with different carriers in order
to get lower cost, there is no high brand loyalty here.

3.Substitute products -
The main need of customers is travelling, but there are many other alternatives – car, train, bus.
Furthermore, there are many new inventions coming up that promise faster and easier travel than
plane. – medium power

4. Rivalry existing competitors

-the industry is super competitive, because there are many companies proposing cheap flights.

5.threat of new entrants

-low to medium, since it takes a lot of investment, licenses, insurance, channels and other
qualifications to start a whole company.

Value Chain Analysis

• Customer Perceived Value – relation between consumers realise from using the product,
service and the costs, direct and indirect, that they incur in finding, acquiring and using it.
The higher this relation, the better is the perceived value for the consumers, and better is
the firm’s competitiveness.
• Competitive advantage : resources; VIRO ( value, rarity, imitability, organisation); core
competences
Sweet spot – the intersection of what your business does well and what the market is willing to pay
for. Three aspects:
1.What people want most – analyse market demand and TA
2.What you do best – Determine brands USP
3.What your competitors struggle at – market and competitor analysis

It is essential for efficient operation, building strategy, strength, etc. Helps for growth. To find it – ask
yourself: Which aspects of your products appeal the most to the customers? Do you have more than
1 target market? What problems do you solve for them? What value do you bring? What makes you
unique? Find customers that like you – ask them what do they like.

Steps:

1. Cultivate core competencies

2. Capitalise your own strengths
3. Match best services and products to market demand
4. Listen to the clients
5. Start seeing the spot

Blue vs Red ocean strategy

Blue Ocean - The unserved market, where competitors are not yet structured and market is
relatively unknown. Here, it is about avoiding head to-head competition. Not structured
competitors, market not very well known, not well-defined products. Example BODY SHOP (BIO
NEW)

Red Ocean - Tough head-to-head competition in mature industries often results in bloody red
oceans of rivals fighting over a shrinking profit pool. Frequently accessed markets; well-defined
products; knowledge on competitors and market
Value-chain analysis the competitive triangle
The strategic/ competitive triangle (3C’s) is a framework used to establish the competitive position
of the company in relation to its customers and competitors. 1price->customer>company-
>competitors

1. Define customer-based strategy – segment the market by access and objectives, identicate
segments you can serve
2. Define company-based strategy- identify key areas and find ways to improve them, focus on
the value chain and optimizing the performance of a product
3. Define competitor-based strategy - sources of differentiation by creating public image,
exploiting advantages; cost advantages
4. Tie- together – strategy tyring all three considerations
5. Strengths and weaknesses

Competitive benchmarking
Useful for catching trends early, tracking of competitors’ actions; KPI tracing; technique for assessing
performance of market compared to main competitors.

• Process benchmarking – about better understating the processes and finding way to
optimize them. How does the competition complete a process? Do it better.
• Strategic Benchmarking – compare business model and approaches to strengthen your
strategy.
• Performance benchmarking – about outcomes; compare anything including social media
performance so you can catch trends and adjust your goals and strategy.

WEEK 3
International Market Selection Process
• Identify the right markets to enter is essential! Two things to consider – the firm and the
environment

The firm – degree of internationalization and overseas experience; Size / amount of resources; Type
of the industry / nature of the business ; Internationalisation goals; Existing networks of
relationships

The environment - International industry structure; Degree of internationalisation; Host country;

Market potential; Competition; Psychological / geographical distance ; Market similarity General
characteristics: geography, l
Market Selection Process

Screening Process
• Essential step in the selection process; preliminary stage - > goal to identify potential
markets quickly and inexpensively. Helps to choose countries; what selection criteria to use;
which model to consider

Preliminary Screening Secondary Screening Micro segmentation

Country responsiveness/ Market Attractiveness Lifestyles
buying power Competitive Strengths Consumer motivations
Knock-out criteria Buyer behaviour
Business environment risk
index BERI( currency, economy
growth, labour cost, credits,
loans, inflation)

Market Expansion Strategy –

How many markets to enter? When you have at least 2 from the screening process; when to enter
and how to? Should you go for waterfall approach, or for shower approach?

Waterfall approach(incremental) – organic way to enter in Uppsala model – enter a single key
market, building up experience in international operations, and then entering other markets.
Waterfall market entry strategy is sequential business expansion to foreign markets. Its main
characteristic is the use of clearly defined entry stages and the sequential use of experience: the
knowledge obtained during one stage is used to enact the next one. In this case, each stage is
represented by a single foreign market. - First, a company enters one foreign market, establishes
itself, promotes the product and builds a client base. When the company feels comfortable in this
market and its position is stable, the business can be expanded into the next market, using the
previously gained knowledge. This reminds of a multi-layered waterfall, where water passes through
each stage before it reaches the destination, hence the name of the market entry strategy

Advantages: maintaining stable position, easy transition since they are similar, small risks,
advantageous in long run
disadvantages – only one market – huge room for failure; potentially loses first-mover advantage
since does not enter many markets

Shower approach – entry into world markets at the same time – both advanced, developing and less
developed countries. Gives the chance achieve economies of scale in production and marketing;
good for products that represent technological advance. Requires finances!
The shower market entry strategy is simultaneous business expansion to several foreign markets. Its
main characteristic is the simultaneous market entry in pursuit of benefits that an early entry
provides. Thus, it is a high-risk, high-reward approach - a successfully executed sprinkler strategy
allows collecting profits from several markets while also being ahead of your competition, but a
failed entry (withdrawal from markets) costs a lot of resources and provides little in terms of
compensation
Advantages: outrunning competition; more time to analyze; income for large number of markets
Disadvantage- big number of markets entered at the same time – large investment; high risk of
entering so many makrets

Growth Strategies
• Diversification – new products are being sold to new market. Risky one, and a small
company will need to plan very carefully every step. Marketing research is essential, because
the company needs to check if the consumers will like the product.
• Market Development/ Expansion – growth strategy that entails selling current products to a
new market. Competition may ne such that there is no room for growth; good for small
companies that are looking for new users.
• Market Penetration – small company uses it when decides to market existing products
within the same market it has been using – way to grow existing products and to grow
market share, the sales. This can be done by lowering of prices
• Product Expansion – expand product line or add new one to increase sales and profits.
Continue selling within the same market; used when technology is changing or the older
products have become outmoded.
• Acquisition – company purchases another company to expand its operations. Small
company can use it to enter new markets and expand the line of product. Can be risky but
less risky than diversification one, because markets and product are already established.
However – investment Is needed, so goals must be established.

Develop Customer Proposition

For … (definition of the global target segment), brand X is (definition of category) which gives the
most (definition of benefits) because of ( reason to believe).
 «For urban, sophisticated, cosmopolitan women, Sand River is premium apparel brand which
provides unparalleled elegance and comfort because of its unique combination of authentic
Alishan cashmere, cutting-edge manufacturing, and Junko Koshino’s innovative designs.

Week 4
Types of entry modes:

• Export modes
• Intermediary modes
• Hierarchical modes
• Subcontractors

The choice of a mode of market entry is essential for internationalisation.

Export modes
• Exporting is the simplest way to enter a foreign market. It is marketing and direct sale of
domestically produced goods in another country. No big investment is required since the
goods are not required to be produced in the target country.
• Low risk but substantial costs(transportation, pay to distributors) and limited control over
the distribution; difficult to customize products and services to local taste and preferences

Entry modes –

• Indirect export – working through independent international marketing intermediaries.

Involves less risk and investment. Most appropriate for firms with limited international
expansion objectives and firms that are using international sales as a mean of disposing of
surplus production
• Direct export - company handles their own export. Investment and risk are greater, but so
is the potential return.
Distributor – independent company that stocks the manufacturer’s product, but also has
substantial freedom to choose its own customers and price
Agent – independent company that sells on to the customers on behalf of the manufacturer,
earns profits from commission paid by the manufacturer
• Cooperative export – a company with established distribution channel for its own products
export the goods of a no-competing foreign manufacturer

SME’S love exporting because financial investment, commitment and risk are minimized

Intermediary modes
Contract Manufacturing
Company contracts with manufacturers in the foreign market to produce its product or provide its
service. Because of high domestic labour costs, many U.S. companies manufacture their products in
countries, where labour costs are lower.

U.S. company contacts local company in a foreign country to manufacture one of its products.
However, it retains control of product design, development, and also put its own label on the
finished product.
Management Contracting - this takes place when the domestic firm supplies management know-
how to a foreign company that supplies the capital. Low risk method of getting into a foreign
market, and it yields income from the beginning.

Licensing
• Simple way of entering international marketing.

For a fee or royalty, the licensee buys the right to use the company’s manufacturing process,
patent, trade secret, or other item of value. A commercial contract whereby the licenser gives
something of value to the licensee in exchange for certain performances and payments.

1. The licensee is typically a local business that will produce and market the goods on a local
basis, licensing enables companies to deal with export barriers.
2. When ok, licenses are granted considerable autonomy and are free to adapt the licensed
goods to local tastes.

!License is limited to granting another business the right to use a trademark or technology but
does not include control over how the business operates! Franchise agreements are broader and
control how a business operates. -> licensing is only for one aspect, franchising for everything!

Franchising
• The exchange of rights between a franchisor and franchisee, such as the right to use a total
business concept including use of trade marks, against some agreed royalty.

= You pay to use the whole business model, but you have to follow all the practices, prices, models,
etc. , and give a percentage of the profits. ( McDonalds; KFC)

Joint Venture
Entry strategy for a single target country in which the partners share ownership of a newly created
business entity. Two companies working together towards something, it doesn’t always have to be
exactly 50/50 and it doesn’t always have to be about money. NO ONE CONTROL ALONE.
 ➔ Starbucks = both companies contributed to experience, money, parts of their value chain,
etc. to in the end benefit both from the efforts

Strategic Alliances
An arrangement between two companies to undertake a mutually beneficial project while each
retains its independence. The agreement is less complex and less binding than a joint venture, in
which two business poll resources to create a separate business entity.

Companies may want those agreements -> facilitating market entry, risk and reward sharing,
technology sharing, conforming government regulations. It can give you improved products, reduced
costs, share of technology.

!Joint venture is new legal entity, basically new smaller company, while the strategic alliance is
contract between two companies!

Strategic alliances – redbull and go pro together!

Hierarchical Modes
Acquisition
-> You acquire a company, you take over entire business, and go into market, high risk but also high
control

Някои неща са изградени от други, например микрософт купува линкедин, снапчат купува
нещо си друго за да можеш да правиш еди кво си

Foreign Direct Investments

-greenfield operations of greenfield investment
-merger with an existing enterprise
-acquisition of an existing enterprise
Hierarchical Modes – if a producer wants greater influence and control over local marketing than
export modes can give – he should consider creating its own companies in the foreign market. This
mode requires financial and human resources. However, it may be hard to integrate!

Marketing communication mix: Advertising, Personal selling, Sales promotions, Public relations,
direct marketing/indirect marketing, packaging → these are all factors that are changeable when
going to another country or market

Global integration options – brand name, product, pricing, marketing communication mix,
distribution

Global advertising - “Carefully integrating and coordinating the company’s many communications
channels to deliver a clear, consistent, and compelling message about the organisation and its
products.”

SUMMARY OF MODES
-> Entry modes are meant for companies that wish to take advantage of foreign market
opportunities. Depending on the features of the host market and the quantity and types of
accessible intermediaries, exporting can be arranged in a variety of ways. Which entry mode will be
used is based upon a series of desired mode characteristics and internal and external factors.

-> Intermediate modes differ from export modes in that they are primarily vehicles for the
transmission of knowledge and skills, but they may also provide possibilities for exporting. They
differ from hierarchical entry modes in that they do not require complete ownership (by the parent
company), rather ownership and control can be shared between the parent company and a local
partner. The (equity) joint venture is an example of this.

-> The hierarchical modes are the last set of entrance modes, in which the business totally owns and
controls the foreign entry method. It's a matter of who has control in the company. How much
influence the parent company has over the subsidiary will be determined by how many and whose
value chain functions may be outsourced to the market. This, too, is dependent on the division of
duty and competence between the main office and the subsidiary, as well as the firm's plans for
worldwide expansion.

Factors influencing entry mode decision (Desired mode characteristics)

• Risk
If decision-makers wish to minimize risk, they will most likely prefer to use export or
intermediary modes, since this would mean low levels of resource commitment.
• Control
The choice of entry mode will determine the degree of control that management will have
over operations in international markets. Modes of entry with limited resource commitment
(such as export modes) can lead to a lack of control over the conditions under which the
product or services is marketed abroad. Therefore, if the firm wishes to have full control
over the international operations they will lean towards hierarchical modes
• Flexibility
If the firm highly values the possibility to make changes in the short run, they will most likely
lean towards entry modes that allow this flexibility, such as export modes.

Internal Factors
• Size of company – resources available
• International Experience – of the manager and employees to international markets in
general. If employees have knowledge the costs will be reduced
• Product/Service – nature of product affects the entry mode selection because product vary
in their characteristics and use

External Factors
• Sociocultural distance between home and host country - When the perceived distance
between the home and host country is significant, firms will favour entry modes that involve
relatively low resource commitments and high flexibility
• Country risk/demand uncertainty - There can be economic (Market risk, method of
involvement risk, investment risks, exchange rate risks...) and political risks. When country
risk is high, firms will favour entry modes that involve relatively low resource commitments
and high flexibility, such as export modes.
• Market size/growth - Country size and market growth can determine the choice of entry
mode. The smaller the country and market and market growth rate, the more likely it is for a
company to favour export modes or licensing agreements.
• Direct and indirect trade barriers - Tariffs or quotas on imported goods and components can
lead to an increase in local production and assembly (hierarchical modes). Product and trade
regulations can lead to a preference for intermediate and hierarchical modes. In conclusion,
trade barriers incentivize the shift towards performing or establishing local functions.
 • Intensity of competition - The greater the intensity of competition in the host market, the
more the firm will favour entry modes (export modes) that involve low resource
commitments. For concrete market research on the intensity of competition.
• Small number of intermediaries available If there are only a few intermediaries available
serving a greater market, there is a chance of them taking advantage of the monopolistic
situation. In that case companies tend to recur to hierarchical modes to reduce the chance
of opportunistic behaviou

Distribution decisions – Since distribution is as important as production, the system of

distribution must be well organised. So the channels must be considered very carefully!

Intensive Distribution: try to exist at as many points in the market. Main company + multiple
wholesalers + very many retailers = reaching the final target market consumers. Tries to be present
at each touchpoint in the market

Selective Distribution: Try not to be present everywhere, just at certain points in the market. Main
Company + two few wholesalers + few retailers = target consumer market

Exclusive Distribution: Work exclusive with partners. This product is not available everywhere and is
very exclusive. Main Company + one wholesaler + one retailer = target consumer market.

You need to consider: customer characteristics; nature of the product; nature of demand and
location; competition; legal regulations/local business practices

1.Nature of product – physical characteristics of a product and impact on the selection they have.
Those are:

1. Perishability – трайност – some products may need shorter channel of distribution, so they
keep good quality.
2. Size and weight of product -heavy products include higher transportation costs – to
minimise short and direct distribution channel is important.
3. Unit value of a product – products with less unit value (clothes, cosmetics) take longer time
reaching the customers than products with high value (jewellery).
 4. Standardisation - Products of standard size and quality usually take longer time by adopting
longer channel of distribution. For example, machine tools and automobile products which
are of standard size reach the consumer through the wholesalers and retailers. Un-
standardised articles take lesser time and pass through shorter channels of distribution.
5. Technical Nature of products - Industrial products which are highly technical in nature are
usually distributed directly to the industrial users and take lesser time and adopt shorter
channel of distribution. Usually sold through wholesalers – longer channels.

2.Nature of market –

1. Consumer of industrial market

2. Number of prospective buyers
3. Size of the order
4. Geographic concentration of the market
5. Buying habits of customers

3.The nature and size of the manufacturing unit

1. Manufacturer Reputation and Financial Stability

2. Ability and experience of the undertaking
3. Desire for control of channel
4. Industrial conventions
5. Services provided by the manufacturers

4.Government Regulations and Policies

5.Competition

Week 5
Brand Archetypes
• They give brands a character that makes them accessible and relatable to audiences who
share those same values.

1.The innocent

• Exhibits happiness, goodness, optimism, safety, romance, youth (Coca-Cola)

• Desire to be free, happy, biggest fear is to do something wrong.
• Their customer prefers straight-talking, optimism, simplicity, trustworthiness
• Best for beauty, skin care, fresh food

2.The Everyman

• Seeks connections and belonging, recognised as supportive, down-to-earth (IKEA, eBay)

• Wants to feel part of something, and worst fear is to be left out from the crowd. Friendly,
empathetic and reliable.
• Customer appreciates quality and dependability, honest image.
• Best for everyday apparel, family car, fast food, home/family

3.The Hero
 • One mission to make the world a better place, the hero is courageous, old, inspirational
(BMW, Nike)
• Promises triumph, biggest fear is failure and weakness. They are brave, and at their worst-
aggressive. Promotes themselves as superior to competition.
• Customer values quality and efficiency, like to think that their choice puts them ahead of
everyone, don’t like cut ads.
• Best for sportswear, equipment, outdoor

4.The Rebel

• Questions authority and breaks the rules; rebellion and revolution (Disel jeans)
• Fear of powerlessness, they are brave and adaptable. Customers value unique and shocking
content,
• All about revolution, how to stand out
• Best for cars, construction, clothing companies and body art

5.The Explorer

• Finds inspiration in travel, risk, new experienced (Red Bull, Jeep)

• Wants to discover the world, the customers like brands that promote freedom, self-
discovery.
• Promotes themselves as the way of experiencing the new and unknown (the north face)
• Best for cars, outdoor equipment; adventure travell

6.The Creator

• Imaginative, inventive, driven to build things of enduring meaning and value (Adobe, Lego)
• Driven by desire to produce exceptional work; worst fear is mediocrity. They are innovative
and expressive.
• Customers like shun advertising, experimental das.
• Best for art, marketing and technology

7.The Ruler

• Creates order from the chaos, organised and responsible (Microsoft, Mercedes-Benz)
• Driven by the desire of power and control,. They value ads that reinforce feeling of power
and stability.
• Promise power, they spread the idea that they are the leader in the field. Masculine image.
• Best for luxury cars, watches, hotels, fashion brands lux

8.The Magician

• Wishes to create something special and make dreams a reality, spiritual, visionary (Disney,
Apple)
• Wants to understand the universe, but fear of negative consequences.
• Customers need to feel that they can grow wiser or influence people by using the products.
• Brands promise knowledge and experience; focus on individual rather than group.
• Best for entertainment, beauty, technology, health

9.The Lover
 • Creates intimate moments, inspires love, passion, romance and commitment (Victoria
Secret, Chanel)
• Lives to experience pleasure in relationships, work and environment, fear of being unloved.
• Customers value aesthetic appearance of goods and services, premium brands.
• Ads focused on the way the customer will feel – no cheap businesses.
• Best for cars, cosmetics, fashion, jewelery

10.The Caregiver, the nurter, the parent

• Protects and cares for the others, compassionate, generous (UNICEFF)

• Driven by the need to care for others – they are generous, strong and compassionate
• They want to be recognised for effort; hate aggressive ads; like emotional ones.
• Offer protection safety and support.
• Best for education, health care, non-profits

11.The Jester

• Brings joy to the world through humour, fun, often likes to make some mischief (MMs, Ben
and Jerry)
• Wants to live in the moment, and enjoy life, the fear boredom.
• Customers don’t like regular ads – they love playful ones that make light of seriousness of
life
• Targeted at young people

12.The Sage

• Committed to helping the world gain deeper insight and wisdom, mentor or advisor (Google,
Philips)
• Promises wisdom in every situation; they are open-minded and believe that knowledge
comes from growth. Looking for new information, like ads that challenge them to think in a
new way
• Use of high level vocabulary and symbolic imagery.
• Best for schools, consultancies, news

Global Marketing New Concepts

• New Retail
• Growth Hacking
• Artificial Intelligence
• Partnership with online retailers (BAT)

New Retail –
Combination of online and offline experiences.

• Digitalization – redefining brand and digitalizing supply chain to improve efficiency. Using
technology to improve the performance of the business; creating new products to make it
better; new competitive advantage because of technology

• Omni channelization – leveraging big data capabilities and internet mindset of modern
companies to enhance omnichannel experience. Two fusions of internet and real-life
shopping experience. Using variety of channels in a customer’s shopping experience –
 mobile app stores, telephone sales, retail, stores, online stores

Five great examples of online&offline marketing: • Augmented reality gets real • Online
ordering with in store pick-up • In store kiosks • Beacons for beer, fruit juice etc. • Integrate
and track all the channels

• Platformization - Integrating data platform by unifying online and offline information

regarding customers, products, and services. Connect groups and get benefits of other that
are participating. Allow platform participants to benefit from the other participants.

• Entertainmentizatoin- Integrating leading icons of fashion, art, and lifestyle into malls; this is
in line with consumer growing preference for experience retail. Integrate fashion, lifestyle
icons, because customers prefer experiential retail.

BAT – Baidu, Alibaba and Tencent – three big tech companies in Chine. Compared to GAFA (Google,
Apple, FB, Amazon).
-the most popular search engine in China – similar to google experience. Offers also products as
maps, cloud, etc.

AI Marketing – using technology to improve customer journey by big data analytics, machine
learning and other processes.

Artificial Intelligence:
- AI guards’ online reputation
- AI connects you to the right audience
- AI improves customer experience
- AI secures customer data

Growth Hacking

This is a subfield of marketing; most growth in small amount of time at minimum costs; focused on
goals, results and profitability, not on process like the conventional marketing.

The funnel of growth hacking is the following -

Combining these you form your growth hacking strategy:

• Acquisition focusses on finding a cost-effective channel to take your product or service to your
target audience. - so how the user finds you
• Activation is all about getting people to try your product - so the user’s first experience with your
product
• Retention then aims to engage with them in order to form long lasting relationships - thus the
means and rates of users returned
• Revenue involves existing customers to invite their peers to use your product. - users tell others
about you
• Referral phase focusses to build a constant revenue stream to make the business sustain. - so the
profit you eventually gain

Growth hacking strategies

• Content marketing - focuses on using content to promote your business
• Product marketing – applied by using your product, you promote your product within or via the
product itself
• Advertising – paid promotion as google ads; bill-boards

Brand Experience
- Conceptualised sensations, emotions, cognitions, behavioural responses evoked by
brandrelated stimuli that are part of a brand’s design and identity, packaging,
communications and environments.

How to boost brand experience?

• Personalisation
• Artificial intelligence
• Internet of things o Data, you track it, do something with it, enhance customer experience o
Example: record data on your electric toothbrush and send it to your dentist
• Sensory branding – involves all five senses – sight, sound, smell, touch, taste. Senses are linked to
memory and can tap right into emotion, this can have direct impact on purchasing decision.

Example sight: Gordon’s Sloe Gin. Used to sell their alcohol in dark bottles. But then they made a
product called sloe gin with a purple colour. They made their bottles transparent to make it look
attractive and sales actually increased.
Example sound: Mercedes. They have a special team in operation to make the sound of the doors,
the sound has to be unique and high quality.
Example smell: Rolls Royce. They experienced a decrease in sales when they switched their materials
from wood to plastic because they lost their unique wooden smell.
Example touch: Lush. They don’t focus on packaging but on the texture of their products. All of their
finances go into that to make it way better. Example taste: Coca-Cola. Relates to unique taste.

Rule of thumb In summary, the general rule of thumb is that the more senses a brand appeals to, the
stronger the message will be perceived. Interestingly, this often translates to higher prices that
customers will be prepared and willingly to pay. The more sense you appeal to, the stronger the
brand connection to the customer will be.

Crowdsourcing – creating experience in the digital world. The latest level of interactivity ->
crowdsourcing is a term meaning the work being done by a crowd of people on the net. The process:
10 ways of One Million Return Participation –

1. People love to follow – create movement

2. People love to fight for a cause – create a cause
3. People love to hate – create an enemy
4. People love to feel important – create a content
5. People love to chat – create a story people can talk about
6. People love to create – co-operation, make them a part of something
7. People love to be amazed – amaze them
8. People love to debate – create an argument
9. People love mysteries – create a rumour
10. People love to compete – create a game

Export Modes
Indirect exporting - when a manufacturer makes use of independent expert organizations that are in
the manufacturer's own country. The advantage of this mode is that only limited investment and
commitment is necessary. Furthermore, market diversification is easily possible. There is no great
risk to this type of export mode, neither with regards to the market nor politically. Moreover, when
it comes to indirect exporting no export experience is needed. The disadvantage of this way of
exporting is that there is no way to control marketing elements, aside from the product itself.
Furthermore, adding a domestic member to the distribution chain may increase expenses, reducing
the producer's profit margin. Indirect exporting might result in a lack of touch with the market (i.e.,
no market knowledge). There is also a lack of product knowledge (based on commercial selling)

Direct exporting - when the manufacturer sells directly to an importer, distributor or agent located
in the foreign target market. Direct exporting offers several advantages, one of which being the
manufacturer's access to local market knowledge and relationships with potential clients.
Furthermore, as compared to indirect exporting, direct exporting has a shorter distribution chain. In
addition, marketing knowledge is necessary, and the manufacturer has greater influence over the
marketing mix, particularly when dealing with agents. Furthermore, local selling assistance and
services are accessible. Direct exporting has the drawback of giving the manufacturer little influence
over market price due to taxes and a lack of distribution control (especially with distributors). In
addition, some investment in sales management is necessary (contact from home base with
distributors or agents). Cultural differences can be a disadvantage when it comes to direct exporting
because they can cause communication issues and information filtering (transaction costs occur).
Direct exports may also result in trade restrictions.

Export marketing groups usually attempt to enter export markets for the first time. When several
manufacturers gather and combine their core competencies, they have the possibility to offer a
broader product concept, which could be more attractive to a buyer. Export marketing / cooperative
export groups have the benefit of allowing various manufacturers to share internalization expenses
and risks. As well as selling the consumer a comprehensive product range or system. Export
marketing/cooperative export groups have the drawback of creating imbalanced connections
(different objectives). Furthermore, the participating businesses may be hesitant to relinquish total
autonomy.

CSR – Corporate Social Responsibility

Integrating CSR into Brand proposition ->
• What is relevant to the global target segment? • What would fit best with the company’s product
category that would increase the credibility? • What would distinguish the company from the
competition? • Is it possible to summarise the value in a single, memorable tag line? • Is it possible
to quantify its social impact. I

Communicating CSR to customers

Awareness • Packaging • Social media • Your own workforce • Attribution - Self-interested and
altruistic

When CSR is well maintained over the years and a bad thing happens to a brand once, goodwill of
the customers is crucial. Companies with good CSR like Rolex, Disney and Google would more easily
recover from a scandal because of their good CSR. CSR is like a long-term insurance policy that the
brand can always rely on when the firm behaves in a questionable way.

The basic psychological principle of cognitive consistency tries to make this concept understandable.
Cognitive consistency can be seen when the overall customer perception of a brand is good. For
example, “I love H&M” is a +, while “I hate child labour” is a -. “H&M hates child labour, too” is
another +. A plus times a minus times a plus equals a plus. When H&M does something
questionable, it creates inconsistency in the mind. The last + changes into a minus, which changes
the end perception to a minus. The customer can respond in three ways:

1. Change opinion about the brand: e.g. I now dislike H&M because they are okay with child labour
2. Change opinion about the mistake: e.g. Child labour is horrible, but apparently it is necessary in
some countries, since they have to make money too somehow.
3. Break the association between the brand and the mistake: e.g. Child labour is awful, but I cannot
imagine that H&M was aware of this

Three distribution strategies

• Intensive distribution: Intensive distribution is used when mass marketing a product to cover as
much of the market as possible. Linked to value, mass and fun brands. Value brands offer good
quality fod low price, everybody can buy of them. Same with fun and mass brands. Therefore, the
market coverage is large, and they target a lot of consumers.
• Selective distribution: Selective distribution is used when you want your brand to be available in
only limited outlets. Linked to premium brands of top quality and high prices, noe everybody can buy
them, selective customers.
• Exclusive distribution: With exclusive distribution, distribution rights are limited, for example to
one distributor within a certain region. High prices, only a few people can buy them, they can be
bought on specific places, not everywhere.

Distribution Channels
Single-channel distribution: when customers’ experience is through only one distribution channel.
• Multichannel distribution: when a producer or retailer’s effort to combine and blend different
distribution channels, ensuring that they will be present when the purchase decision is made.
• Cross-channel distribution: customers see multiple channels and touchpoints as part of the same
corporate brand.
• Omnichannel distribution: customers experience a corporate brand as a total solution provider,
and not channels or touch points within the corporate brand.

External factors (the external factors were explained with examples during the presentation): •
Customer characteristics - • Nature of product • Nature of demand/location • Competition • Legal
regulations/local business practices