Professional Documents
Culture Documents
Marketing Management
Marketing Management
Content
Content
Importance of IM
International expansion helps firm:
Keep pace with competition
Reach a larger market (e.g. 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
Ethnocentric Orientation
Polycentric Orientation
Regiocentric Orientation
Geocentric Orientation
Competition
Regional Economic and
Political Integration
Technology
Improvements in
Transportation and
Telecommunication
Economic Growth
Transition to Market
Economy
Firm-Specific Drivers
(contd.)
Intro
Sales
Growth
Maturity
Decline
Sales
Profits
Firm-Specific Drivers
(contd)
Firm-Specific Drivers
Standardization, Economies of scale, Cheap
Labor
Price competition during the maturity of the product life
cycle drives firm to new international markets in search
of cheap labor. The firm lowers coststhus pricesdue
to economies of scale and saving from standardization
processes.
Experience Transfers
Experience in one country serves as basis for strategies in
new international markets.
Obstacles to Internationalization
within the company
Finances
Psychological:
unknown
environment
Self-Reference
Criterion
outside
Government
Barriers
Barriers imposed
by International
Competition
Obstacles to Internationalization
Self-Reference Criterion
Obstacles to Internationalization
Government Barriers
Obstacles
Internationalization
to
Cutting prices
Advertising blitzes
Content
Content
World economy
International Trade
Regional Economic and Political integration
Cultural Influence on IM
Categories of countries
Content
World economy
International Trade
Regional Economic and Political integration
Cultural Influence on IM
Group of Eight - G8
USA:
Variations of FTZ
Products are brought into an in-bond area,
manipulated (processed, repackaged, assembled),
and re-exported to country where products
originated.
Content
World economy
International Trade
Regional Economic and Political integration
Cultural Influence on IM
A history of conflict
Bilateral Agreements
Content
World economy
International Trade
Regional Economic and Political integration
Cultural Influence on IM
Culture
Example
The Turkish Client
You are in the middle of negotiations with a potential Turkish
client in Istanbul, over lunch, at the Conrad Hilton Hotel.
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; he declines. Your products are known
for their quality in Turkey and elsewhere in the world, and your
client seems receptive to your price quote.
After lunch, the potential client invites you to his home for coffee;
you decline and state that you need to stay at the hotel to get
some work done and bid him good-bye.
You come back to your home country and find that you cannot
reach your Turkish client. His secretary always claims he is not
in, and he does not return your calls.
Example
The Turkish Client
in Turkey, the dominant religion is Islam, and Islam bans
the consumption of pork and alcohol.
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, at another air-conditioned hotel, a
former palace, having yet another bottle of wine?
Constituents of Culture
Elements of Culture
Language
Religion
Cultural Values
Cultural Norms
Cultural Values
Enculturation
Acculturation
Assimilation
Cultural Norms
Imperative
Minimum
requirement
for a
survival
in a new
country
Exclusive
Adiaphora
Cultural Norms
Imperatives
Exclusives
Business cards:
Wearing a sticker
Asia: presentation
from a political
and receiving with
party
both hands. It has
to stay on the table,
dont write on the
card, dont put it in
the back pants
pocket
In Saudi Arabic
woman are not
allowed to drive or
walk in public
without a man.
Adiaphorous
Eating with
chopsticks in Asia.
Drinking banana
beer in East Africa.
Cultural Variability
Power Distance
U.S.
Low
Germany
Eastern
Europe
Latin
America
China
High
Cultural Variability
Uncertainty Avoidance
U.S.
Low
Germany
Japan
Central/
Eastern Europe
China
High
Cultural Variability
Masculinity/Femininity
China
Sweden
Low
Masculinity
Canada
Argentina
United
Australia States
High
Masculinity
Cultural Variability
Individualism/Collectivism
Thailand
Latin America
China
Low
Individualism
Australia United
States
GB
High
Individualism
Low-Context Cultures
High-Context Cultures:
Message source
The sources standing in society or in the
negotiating group
The sources level of expertise, tone of voice, body
language
Content
Content
Cultural differences
Consumers remain sometimes suspicious of research
Acquisition analyses
Diversification analyses
Market-share analyses
Export research
Brand preferences
Brand attitudes
Brands awareness studies
Purchase behavior studies
Consumer segmentation studies
Secondary Data
Primary Data
Qualitative Research
Examples:
Focus Groups
Depth interviews
Observation
Constraints:
Quantitative Research
Examples:
Constraints:
Respondent factors
Infrastructure factors
Emic instruments
Etic instruments
Constraints:
Instrument reliability
Sales Forecasting
Sales Forecasting
Sales Forecasting
Point of Sale Research
Content
Requirements:
Strategic fit between the companys objectives,
competencies, and resources and the challenges of its
international market or markets.
Link between the companys resources and its
international objectives in a complex, international
environment.
The strategic planning process must be systematic and
continuous
Companys commitment to its international markets.
Corporate
Division
Business Unit
Product Level
Organize
Implement
Control
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, that would respond to a product and related
marketing mix.
International Macro-Segmentation
Country Attractiveness Analysis
Market potentialindicators:
International MacroSegmentation
International MacroSegmentation
International MacroSegmentation
Market attractiveness:
e.g.
Labor costs
Brand management
Working hours
New markets
Machine running times
Taxes
Environmental standards
Administrative barriers
Import barriers
Age
Occupation
Education
Income
Ethnicity
Race
Nationality
Life-cycle stage
Social class
Benefit Segmentation
Example: Cooking oil markets can be
segmented based on benefits soughtolive oil
is targeted to consumers who seek health
benefits.
Geographic Segmentation
Example: Avon segments its market
geographically.
Usage
Nonusers
Occasional users
Medium users
Heavy users
Ideal
consumer
User Status
User of competitors
products
Potential users
First time users
Regular users
Three stages:
Assign importance score to each country screening
criteria.
Evaluate country performance on each of the
screening criteria.
Calculate country attractiveness score.
Purpose
Differentiated
targeting strategy
Concentrated
targeting strategy
Undifferentiated
targeting strategies
Attribute/Benefit Positioning
Price/Quality Positioning
Use or Application Positioning
Product User Positioning
Product class Positioning
Competitor Positioning
Content
Content
Going International:
Evaluating Opportunities
Competition
Regional economic and political integration
Economic growth
Technology
Converging consumer needs
Franchisor:
Gives franchisee right to use brand name,
trademarks and business know-how in return for
royalties.
Franchisee:
Franchising
Advantages:
Joint Venture
Advantages:
Disadvantages:
Branch Offices:
Marketing:
Distribution:
Content
Internationalization as a priority:
International
International
divisions
divisions
The
The matrix
matrix
structure
structure
Organizational
Organizational
designs
designs
Product
Product
Divisions
Divisions
Worldwide
Worldwide
regional
regional
divisions
divisions
Matrix Structure
North
South America,
Asia Pacific
America
Africa, Middle East
Controlling
Marketing Operations
Challenges
Headquarters involvement
Subsidiary Input
Controls
Formal Controls
Establishing performance standards
Measuring performance
Addressing discrepancies
Informal Controls
Frequent contact between home-country headquarters and
regional/local office.
Rotate managers to different assignments.
Hire third-country managers to oversee new or problematic
operations.
Training employees
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)
Active Users
(in millions)
PC Time per
Person per
Month
Sessions/Visits per
Person per Month
Australia
10.8
34 hrs 28 min
63
Brazil
17.9
35 hrs 53 min
31
France
23.0
39 hrs 49 min
44
Germany
32.8
34 hrs
36
Italy
18.2
25 hrs 27 min
30
Japan
36.6
14 hrs 57 min
25
Spain
12.7
28 hrs 45 min
33
United States
61.0
82 hrs 32 min
67
$ Billion
% Growth
2003
425.1
26.00
2004
544.6
28.10
2005
656.4
20.50
% Share
23.50
17.50
11.70
4.60
Jewelry
4.00
Other
38.70
c. Geographic Segmentation
Product Challenges
Promotion Challenges
Distribution