Lecture 2

What is marketing? 
 Marketing is about identifying needs and creating value 

Market
 Group of people/organizations with two characteristics:
o Willing to buy 
o and are able to buy 

Marketing 
 What is it about? key components:
o identifying needs → innovate → develop solutions 
o by doing the above, the company achieves to create value → through adjusting the
marketing mix (4Ps)
 How can we identify needs? 
o Market research 
 Quantitative market research: measurements are more subjective,
descriptive (?) 
study anything related to the solution → more about exploring, suggesting
the most relevant factors 
 Interviews 
 Focus groups → groups of people with specific knowledge and have
an open discussion with them and focus on broad range of
questions relevant for the solution you are trying to give; 
 Observation → for example in the supermarkets to know how
consumers behave, observation can be both
 Qualitative market research: measurement is more objective (but it’s also
subjective), predictive, precise, allows us to generalize because we have a
representative sample (this sample can be small or large but it has to be
representative. Alert! BIAS) 
We narrow down to analyze only the most relevant factors → go more in
depth, this is more conclusive 
 Surveys  
 Representative sample: when everyone in your market have equal
chances to be included into the research 
o Everything is subjective → therefore culture matters → you will have to adapt your
research method depending on the country/environment 

Value → competitive value 

 Key components/dimensions of value:
o we have a objective part (e.g., cars’ components)
o we also have a subjective part 
o perceived quality (subjective) vs performance quality (objective)
o value as a function of the benefits → happiness and satisfaction
o and also as function of price 
 we have a monetary price
 and the non-monetary part → price can be a signal of quality, exclusiveness,
it also includes complexity, risk (i.e., free trials, endowment effect also
affects → when you own a product, you seem like to like it better)
o Brand image → consistency 
 Lecture 3
Marketing 

 2 key dimensions → it’s about needs and value 

Value 
 Values have to be competitive → so values that we develop have to be better than the
solutions that we create 
o 2 main dimensions of value: benefits and price 
 2 types of price: monetary and non-monetary 
 best way to lower price → lower the non-monetary price 
o i.e., complexity, risk (from the perspective of the customer)
… 
 How can we lower risk? → free trials (endowment
effect → we tend to increase value when we own
them) 
 key component of benefits: quality 
 2 types of quality: perceived quality and performance quality →
those are highly correlated 
o Examples of performance quality: color 

Needs 
 How to identify them? through market research 
o 2 types of market research → using data
 quantitative research: go deeper to a specific topic 
 qualitative research: refers to a wide range of topics → it’s more about
exploration 
o All types of research uses data → 2 types of data:
 Primary research: you create your own data 
 Secondary research: i.e., from other firms, government 
Key difference between both types of data → secondary data is much cheaper, but
you might not have the full information about the process so there can be errors or
data might not be directly applicable to your research. Whereas for the primary
research, it’s much more expensive (i.e., language, target groups, etc.)

Heterogeneous market
 Consumers have different preferences
 How to capture the heterogeneity of the market? → Through segmentation 
o Segmentation is not about thinking about customers who share similar
characteristics 
 This lead to brands to have a specific position → brand image 
o Key component → being consistent in your communications 

International Marketing
 It’s about the scope of activities → from domestic market to international market 
o Even if you go international, you want to maintain your brand image 
 Why to go global/international? 
o Opportunities 
o Economics of scale 
 o Competition 
o Risk diversification 
o Also to survive → other companies might enter into the domestic market 
Bottom line → we are seeking growth 

 Growth strategies:
o 2 main dimensions: product and market 

 In our case, our growth strategy is market development 

What happens when you go global? 

 We can standardize processes in different markets/companies 

vs
 We have to customize and adapt to the country you are operating

Standardize = Globalization Customize = Localization

Lower complexity (lowers coordination Cultural differences

costs)

Consistency  Legal requirements

Economies of scale Economic differences (different purchasing

powers)

Learning effect 
  Fully globalize or fully localize? → not necessary to go to the extreme
o Somewhere in the middle: GLOCAL
“Think Global Act Local”

Lecture 4

Why do firms go global? 

 2 Key factors:
o Seeking for growth 
o To survive 

Should we standardize or should we customize? (Globalization vs localization)

 Remove of trade barriers 

Globalization 
 Is causing cultural convergence and it’s creating of global market 
 What is globalization?
o Integration of national economies into a global economy → there are inter-
dependencies 
 But countries are not fully integrated 
 Global suppliers, global customers, 
 Information revolution → free movement of information
 Economies of scale 
Reason to standardize 

Reasons to customize 
 Cultural differences
 Legal and political requirements 
 Regional protectionism 
 Deglobalization → movement against to globalization 

In the middle we would have GLOCALIZATION → Think global but act local 
 When it comes to the presentation of the solution offered to customers → think about
adapting the country 
 By what do we mean by adaptation? 
o We are talking about the marketing mix
 There are several degrees of glocalization 
 Examples: 
o Amazon in India adapting different payment methods
o Different presentation (packaging) of the same product 
o Food industries have to make many adaptations

Case: NIVEA

 One of the most international companies in its industry 

 Many people don’t know that Nivea is from Germany but think that it’s produced in their
own country → sign that the brand has customized 
 The smell of the cream has not changed at all 
  Blue for rational and blank for purity 
 Brand image:
o Quality → reflected in the packaging → blue for reliability 
o Simplicity → reflected in the packaging → blank for purity  
o Reliability
o The brand has been consistent to the above characteristics → even if the packaging
has changed over time 
o It’s product for a mass → no a luxury brand 
 Celebrities have endorsed the brand
o usually the image of the celebrity is talking for your brand but it’s also a risky
decision because of the celebrity might change 
 Consistency and brand heritage 
 They started the internationalization process quite early 
 Elements that they have customized 
o The packaging → size is customized even if the design is remained the same 
 Think colour as a hue, pigmentation → but we don’t have to restrict color to hue because
there might be different tons and other factors that also affect perception of the color/brand
image 
o hue
o brightness → it’s seems to be the most important factor 
o saturation 
 How should we grade the glocalization strategy implemented?
o It seems to be successful because each consumer think that it’s produced in their
country 
 What makes the glocalization strategy successful?
o In the communication/advertisement → they success to have the final consumer
relating with the person who is in the advertisement

Here standardization is important because we want to create a strong brand image → being
consistent 
But they also customize so that customers can relate to the brand (i.e., advertisement, packaging,
etc.)

Lecture 5

Whether to internationalize at all? 

Brands of which internationalization is not a good idea? 

 SME because they have limited resources → so, is internationalization only for large
enterprises? 
 But all SMEs? There are different types of SMEs 
o Some of them can indeed internationalize and go global 
So we should not talk about the size of the company 

 The company should have enough resources:

o financial resources 
 The industry should be global enough 
o Global supplier structure
o Global customers
 o Global competition structure 
Example of industries that are not global enough: specific catalan food, specific tomato, hair-
dresser 

 Stay at home: the company has not enough resources (immature) and the industry is not
global 
 Enter new business: when the industry is not global enough but the company has enough
resources 
o You can make the industry global: at first the industry was local, then you made the
industry global (global customers, global suppliers…)
 Exports: low cost/risk entry strategy, low commitment (you can leave at any time), you gain
knowledge about the host country 
o at this stage, the industry is local but you have some resources → you test
potentials 
 When the industry is global and you have resources → you try to take advantage of it and try
to strengthen your position/brand image 
 Prepare for a buyout → worst case scenario, the industry is global but you don’t have
resources to go global → unable to compete 

Hence, to internationalize is not a great decision for every business at every time 

But, when internationalization is a suitable choice for the company, then, to what extent? 
 Factors to take into account:
o Motives:
 Proactive: 
  Market size → maybe not all countries/markets are equally
attractive 
 profits, growth, economies of scale 
 Reactive: Competition pressure 
o Barriers:
 initiation stage:
 Complexity (operational adaptation; cultural environment;
coordination of the distribution channels; of the pricing strategies →
we want to have a consistent pricing level; and other aspects of the
marketing mix) 
 resources 
 Further process of internationalization:
 Risks → political, commercial, market 

 So, imagine that we have 50 potential markets, to what extent should we extend? 
o Gradually expand, one country at a time 
 Disadvantages: slow process, miss opportunities, maybe competitors have
already established in your next destination
 But it’s less risky for the company 
o Another perspective → go to all 50 countries at the same time
 Benefit more from the economies of scale → profits and growth incentives
 Be the 1st mover 
 Higher commercial, market and political risks 

Lecture 6

International Market Environment (Second block)

 Factors influencing business performances 

o A part of it is controllable → You can decide. Examples:
 You can decide on attributes, adjustments, how you deliver, communication
and distribution channel, prices → Marketing Mix 
 So the role of the company is to design and optimize this marketing mix
o There are also uncontrollable factors that also affects the business performance
(taking into account the dimension of TIME → being able to make good predictions)
  The role of the company would be to understand those factors, analyze
them and cope with them. 
 Those factors are uncontrollable but you can control your activities to adapt
yourself in it 
 Examples: Economic factors, political factors (import restrictions, legal
constraints that limit the scope of my activity, risks of political instabilities),
cultural factors 

Economic factors (uncontrollable)

 GDP (index for average income), inequality (Gini factor), poverty, employment rate,
education → all these factors affects the purchasing power 
o We have to take into account many factors and not only the GDP 
 Currency → inflation rate, exchange rate → is it a weak or strong currency?
o Is there lots of fluctuation in the exchange rate? → this brings uncertainty
 You want to coordinate prices in different countries 
 If prices were very different, you are giving incentives to buy in the
cheaper country and sell in the expensier country, at a lower price
→ creation of the gray market 
o This gray market is not under your control 
o Inflation: if there is inflation, the exchange rate will change as well → Might lose
money, prices don’t coordinate and you might lose money because your production
cost has not changed. Solutions:
 Increase the price accordingly 
 But, do people keep having the same real income? 
 If people’s income is increasing as well, increasing the price would
be reasonable 
o Exchange rate: what happens when the currency is weak? What happens to imports
and exports? 
 Exports becomes easier 
 Imports become way more difficult 
 Devaluation strategy: to encourage producers to move their production into
the country and make imports more difficult

 What are the main economic factors that drive economic growth?  Agriculture,
manufacturing or services? 
o this tells us about the future of the country 
o We are not only interested in the current situation but also predictions about the
future to be well prepared 

Political factors (uncontrollable)

All the political factors can be categorized in three types of risks 
 RISKS 
o risks related to operations 
o transfer → exchange rate, distribution 
o ownership 

 In the home country 

o Export codes
  To make the currency weaker → devalue 
 In the host country market 
o Level of protectionism/interventionism (risk for my OPERATIONS)
 We should consider the attitude of the government in the host country 
 There are some sensitive products like movies, books, etc.
 Political relationship between the home country and the host country 
 Agreements and conflicts (like US and China) 
 Import restrictions 
 Not allowed to import certain goods at certain amounts  
 To protect local producers 
 To decrease competition 
 Export codas 
 To increase competition 
 To have enough goods for the population 
o Local-content laws (OPERATIONS)
 For wine, maybe the package should be produced in the host-country 
o Exchange controls between countries (TRANSFER)
 To regulate the exchange rates and the amount of currency resources 
o Domestication (creeping exprop creation)  (OWNERSHIP, OPERATIONS)
 Domestication → more gradual process, the government start regulating
your business → so your operations will be affected 
o Nationalization (exprop creation) (OWNERSHIP)
 Nationalization → government takes full control on the private property to
use it for the public → forced to do so followed by so 
 In the global environment → bc of interdependencies between countries 

If predictions are difficult, we might choose other entry modes → example: online selling and
exporting 

Lecture 7

Cultural differences

There exist elements of culture that are visible in daily behaviour: clothing, food, lifestyle, time,
body language. But there are also invisible elements of culture: non-verbal elements. If we go
deeper, the cultural elements are value & social moral (less visible): family values, friendship,
gender role; we need to put a lot of effort to explore these elements. However, there are other
elements if we go even deeper, the basic cultural assumptions: national identity, ethics, religion
(deep internalized, affecting people’s behaviour). 
Some elements of culture can be changed, it depends on the level of deepness. The easiest (take less
time) to change are those elements that are visible in daily behaviour.

Characteristics of Culture

Culture is a concept that is shared among the members of the community (people who live and
interact together), it is internalised, and learned by the members of the community. We care about
the culture as marketers as it helps us to understand the internationalisation process (brand name,
product description, consumption habits). 

When we talk about culture on a marketing basis, we tend not to put culture on a universal basis.
SCR (Self-reference criterion) → biased 
 Lecture 8

Cultural orientation

Culture can be divided into two cultural orientations, low-context and high-context cultures. 

Dimension Low context High context

Communication style  Explicit  Implicit 

 Direct  Indirect

Food/eating habits  Necessity  Social event

The concept of Time  Linear  Elastic

 Exact  =Relations
 =Money

Patterns of Family and Friendship  Self-centered   Other-oriented 

Business&Work habits  Deal-oriented  Relationship-oriented

 Egalitarian  Hierarchical

Class example: Someone from France went to Chicago for work → cultural differences as these two
countries may have different cultural orientation. 

Low                        High
Norway         Japan

Due to differences in cultural orientation, the inter-communication in the groups may be inefficient. 

Hofstede's Model

In this model, we have 6 dimensions of culture. These dimensions are not fully independent, there’s
some degree of correlation involved. 
1. Power distance Index (PDI) → score 0-100
a. High PDI: concentrated power, decision-making is concentrated → China
b. Low PDI: distributed power, emphasis on education and independence 
2. Individualism VS collectivism
a. Individualism: more self-concentrated → U.S.
b. Collectivism: identify themselves as a part of the team → Japan
3. Uncertainty avoidance: attitude towards risks 
a. High uncertainty avoidance (more risk-averse) → Spain
b. Low uncertainty avoidance → U.S.
4. Masculinity VS Feminity → It does NOT refer to gender rules in the society 
a. Masculinity: emphasis on competition, success, personal achievement → US
b. Feminity: emphasis on building relationships, quality of life, socialization → Spain
5. Time perspective → degree to which people make decisions that care about the future,
could be related to saving/investment decisions. 
a. High score → Japan
b. Low score → Spain 
6. Indulgence VS Restraint → related to religion
a. Indulgence: behaviour is not restricted, more freedom → Brasil
b. Restraint: behaviour is restricted, a lot of rituals and norms → Saudi Arabia
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