Welcome to the class

Today’s Lecture
Chapter 1 Global marketing
 Marketing Management
• The text book • The Reference book
MARKETING MARKETING concept
MANGAGEMENT and cases written by
written by Philip M. J. Etzel, B. J.
Kotler Walker, W. J. Stanton
 Global/International Marketing
We would not be surprised to hear
about a German Business man
wearing an Italian suit meeting an
English friend at a Japanese
restaurant who later return home
to drink Swiss coffee and watch
American TV...
1-What were the reasons Alexander started his
invasions?

2-Why British came to India in the 17th century?

Reasons for going International
1-Access to products otherwise unavailable
Access to products which are not available
in the domestic market.
For example: Fuel Oil

2-Comparative Advantage
Competitive human/natural resources
In some countries there might have been economical
(cheap) labour or resources which are not available in
the home country
For Example: Chinese labour, Indian Labour or African
gold/diamonds
Attraction of International marketing.

i. To seek revenue growth opportunities

a) To earn more money due to difference in cost of production or
seeking new markets

ii. To compete against global competitors

a) In order to compete against the rivals

iii. To support global customers

a) In order to supply your products to your customers abroad

iv. To access global knowledge

i. To understands the like/and dislikes of people in other countries

v. To achieve efficiency in value chain

i. To get more efficient that is to access cheaper/economical labour
or economical resources
An example of
Afghanistan’s
Carpets...
Uniqueness of Afghan Carpets:
 Globally known as one of Afghanistan’s most
viable and visible products.
Large supply of skilled labour in parts of the
country where carpet weaving has been
traditionally important.
 Hand-made process makes Afghan carpets one-
of-a-kind and souvenir (gift)
Analysing the exportation
Demand:
Due to the uniqueness of Afghanistan’s Carpet there is a
high demand in foreign markets

Saturation (local demands are fulfilled):

The local market is saturated therefore the makers needs
expansion

Customer Expectation:
Global Afghans: Afghans are scattered around the world
and could make a good market for exportation, being
Global customers
 Global Strategy
Definition:
Global strategy consist of a dispersed location
(another country) of each or some part of a
value-chain (production process) that are
performed
OR
An efficient approach that involve a company
launching production on global basis
 Regional Strategy
Instead of having similarities among human
beings, there are some differences which changes
from people to people and culture to culture.
Therefore the local culture needs understanding.

Definition:
The global organisation which changes their
global strategy due to difference in local customs,
climate or taste is called regional strategy
 Two points to remember before going Global

1- Understanding business environment in the

HOST (foreign) country.
Local tastes, like & Dislikes, culture, religion etc

2- Making necessary changes in the marketing

strategy necessary for the HOST country.
In order to make attachment in the foreign culture we
need to make some changes in our own strategy
Sociocultural
Culture:
It is the collective programming of mind that
distinguish between group of people
It includes:
1- Norms-What to do and what not to do
2- Values-What is right what is wrong
3- Beliefs-What is true what is false
4- Symbols- Artefact

•Some famous conflict raised due to cartoon issues

•Nike and the infamous shoe design
SOCIOCULTURAL FACTORS:
Family:
International Marketing requires understanding of the family
system.
There are two kinds of family system presently i.e.
Individual:
The family system in which individuals are free to act.
For Example: Most European and modern cultures are individualist.
Collective
The system in which people live in collective form as families.
For Example: Most Asian cultures are collectivist.
It is likely to see that the buying behaviour is influenced by
the family system a consumer is living in. It is believed that
in the individual societies the buying decision is in the
hand of individual himself while in the collectivist society
the buying decision is within hand of the family elders.
Traditions & Behaviour:
Differences among cultures such as eating behaviour,
personal space, physical contact, the degree of formality in
social and business interaction, giving gifts and gesture would
gives us the preparation of mind and help anticipation.

Education:
Education define the literacy rate of a country’s
population. It play an important role in terms of Advertising,
Branding and Labels.
More education mean more appealing use of words and
languages and less education means more pictures in the
advertisements and promotions.
 Economic condition
It is important to examine the economic condition in foreign market
Infrastructure:
Communication: Communication play an important role in transferring of
information such as telephony, media, internet etc
Transportation: In order to move around the borders of the country the
organisation needs to confirm the existence of transportation such as Rail, Road, Air,
Water
Energy: The availability of Fuel, Gas, Electricity etc would give a company
easy access to energy resources so as make new products and services.
Economic Development:
Distribution of Income: It would determine the buying power of the people.
Equal distribution of wealth mean good economic conditions while unequal
distribution means the opposite
Rate of growth of buying power: An economically stable country would
have a reasonable rate of growth in buying power and therefore a good opportunity
for a marketer and vice versa.
Language Differences:
Language may cause sometimes ambiguity
(confusing) especially when making translation
of the marketing brands
For Example the Nani Chocolate and currys
in India..
Competitor
Local brand may have been strongly bonded
due to nationalism.
People may not encourage foreign
products due to strong attachment with the
products produced in the local country.
• Such as Arabian Zam Zam Cola
• Indian Tata
 Deciding Whether to go Global
• Operating domestically is easier and safer, otherwise a
company needs to learn foreign laws and languages, dealing
fluctuation in foreign currencies, face political and legal
problems.
• Before going global a company shall answer the following
questions:
– Can company understand behaviours of consumer in foreign country?
– Can a company offer competitive products/services?
– Can a company adopt other country business culture?
– Do the company have international experience?
– Has the company calculated the impact of other country political and
legal environment on businesses?
 Deciding which market to enter
• The possible global markets shall be decided
on the following bases:
– Market size i.e. the size of population and the
growth factor in relation to the products being
launched
– The cost of doing business in the international
markets
– The competitive advantage
– The risk of investement
 Deciding how to enter
International Market
• Marketing of products on international basis.
• International marketing is carried out in the
following means:
– Exporting
– Joint Venture
– Licensing
– Joint Ownership
– Direct Investment
 Exportation
• When goods are produced in the home
country but exported to a foreign market
with some modifications
– Afghanistan dealt $50 million dollars exports
in 2007
– Exports have gone up by 13%
– Handcrafts, fresh and dry fruit, minerals,
leather products, cotton and precious
stones
 Joint Venturing
• When a company in home country joins a
company in foreign country to produce
product and services is called joint venture
– Afghan Wireless Communications Company
(AWCC), a joint venture between Telephone
Systems International, Inc. in New York and the
Ministry of Communications of the Afghan
government
– New York-based JWT has signed a joint venture
with Kabul-based advertiser Altai Communication.
 Licensing
– A method in which a company provide licence to a
foreign company for manufacturing/service while
the licence offer Royalty (fee) and home company
share manufacturing process, trade mark, patents
and trade secrets
• Patent: Government licence to an individual or body giving a right or title for a set period
• Trademarks or marks are words, symbols, designs, combinations of letters or numbers, or other
devices that identify and distinguish products and services in the marketplace. When trademarks
are presented to the public via advertising, marketing, trade shows, or other means, they
become one of a company's most valuable assets—potential customers identify a company by its
trademark .
– Mobile Networks
– Cable Operators
 Direct Investment
• Entering a foreign market developing foreign
based assembly or manufacturing facilities
• Chinese companies ZTE and Huawei partnered with the
Afghan government to implement Afghanistan's digital
telephone switches, providing 200,000 subscriber lines.
• China Metallurgical Group Corporation won a $3 billion
bid to develop the Aynak copper deposits; the mine is
the largest foreign direct investment in Afghanistan.