21

Tapping Into
Global Markets

Marketing Management
A South Asian Perspective, 13th ed
 Chapter Questions
• What factors should a company review before
deciding to go abroad?
• How can companies evaluate and select specific
foreign markets to enter?
• What are the major ways of entering a foreign
market?
• To what extent must the company adapt its products
and marketing program to each foreign country?
• How should the company manage and organize its
international activities?

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-2

 Nokia Nseries Sold Globally

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-3

 What is a Global Firm?

A global firm is one that operates in

more than one country and captures
R&D, production, logistical, marketing,
and financial advantages in its costs
and reputation that are not available to
purely domestic competitors.

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-4

 Major Decisions in
International Marketing
Deciding whether to go

Deciding which markets to enter

Deciding how to enter

Deciding on the
marketing program
Deciding on the
marketing organization
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-5
 Four Stages of Internationalization

No regular export activities

Export via independent agents

Establish sales subsidiaries

Establish production
facilities abroad

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-6

 Fiat Markets Palio in
Latin American Markets

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-7

 Top Global Firms Based
in Developing Markets
• America Movil • Huawei
• Cemex Technologies
• China Mobile • Infosys
• CNOOC Technologies
• • Koc Holding
Embraer
• • Lenovo Group
Gazprom
• • MMC Norilsk Nickel
Haier
• • Mahindra &
Hisense
Mahindra

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-8

 Regional Free Trade Zones

• European Union
• NAFTA
• MERCOSUL
• APEC
• ASEAN
• SAFTA

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-9

 Key Developing Markets

Brazil
Russia
India
China

South Africa

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-10

 Desired Country
Characteristics for Market Entry

• Rank high on market

attractiveness
• Rank low in market
risk
• Possess a competitive
advantage

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-11

 Figure 21.2 Five Modes of Entry into
Foreign Markets

Indirect Direct Joint Direct

Licensing
exporting exporting ventures investment

Commitment, Risk, Control, Profit Potential

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-12

 Direct Exporting Methods

• Domestic-based export department

• Overseas sales branch or subsidiary
• Traveling export sales representatives
• Foreign-based distributors or agents

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-13

 The Reva Electric Car Company
has actively pursued
opportunities in export markets.

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-14

 Table 21.2 Global Marketing
Advantages Disadvantages
• Economies of scale • Differences in
• Lower marketing costs consumer needs,
• Power and scope wants, usage patterns
• Consistency in brand • Differences in
image consumer response to
• Ability to leverage marketing mix
• Uniformity of marketing • Differences in brand
practices development process
• Differences in
environment

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-15

 Red Bull Has 70% of Worldwide
Energy Drink Market

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-16

 What Marketing Aspects Might Be
Adapted for International Marketing?
• Product features • Brand name
• Labeling • Packaging
• Colors • Advertising
• Materials execution
• Sales promotion • Prices
• Advertising media • Advertising themes

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-17

 Cultural Dimensions

Individualism
High vs. Low
vs.
Power Distance
Collectivism

Masculine Weak vs. Strong

vs. Uncertainty
Feminine Avoidance

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-18

 Commandments of
Global Branding
• Understand similarities and differences in the
global branding landscape
• Do not take shortcuts in brand building
• Establish a marketing infrastructure
• Embrace integrated marketing
communications
• Establish brand partnerships

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-19

 Commandments of
Global Branding (cont.)
• Balance standardization and customization
• Balance global and local control
• Establish operable guidelines
• Implement a global brand-equity
measurement system
• Leverage brand elements

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-20

 Figure 21.3 International Product and
Communication Strategies

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-21

 Levels of Product Adaptation

• Production of regional product versions

• Production of country versions
• Production of city versions
• Production of retailer versions

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-22

 Haagen Dazs Developed a
Dulce de Leche Ice Cream
for Its Argentina Market

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-23

 Communications

• Communications adaptation
• Dual adaptation

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-24

 Price Choices
• Set a uniform price
everywhere
• Set a market-based
price in each country
• Set a cost-based price
in each country

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-25

 What is a Gray Market?

A gray market consists of branded

products diverted from normal or
authorized distributions channels in the
country of product origin or cross
international borders; dealers in lower
priced countries sell products in higher
priced countries.

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-26

 Figure 21.4 Whole-Channel Concept
for International Marketing

Seller

International headquarters

Channels between nations

Channels within nations

Final buyers

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-27

 Country of Origin Effects

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-28

 Global Organization Strategies

World
World as
as Single
Single Market
Market

Multinational
Multinational

“Glocal”
“Glocal”

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-29

 Marketing Debate

 Is the world coming closer together?

Take a position:
1. People are becoming more and more
similar.
or
2. The differences between people of
different cultures far outweigh their
similarities.

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-30

 Marketing Discussion

 Think of some of your favorite brands.

 Do you know where they come from?
 Where and how they are made or
provided?
 Would knowing affect your perceptions
of quality or satisfaction?

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 21-31