Swinburne University of Technology
International Marketing
Presented by John Collins
Assessment Details
> Opportunity identification presentation
> Syndicate presentations (2)
> Written report 3000 words (+ or - 10%)
Assessment Details
>
Opportunity identification presentation
–
Students are required to present a one- two minute presentation
to the class, identifying an international marketing opportunity –A
1-page report should accompany your presentation.
–
Following the presentation, students are required to form
syndicates of 4 students
–
–Value of this assessment is 10%
Assessment Details
>
Syndicate presentations (2)
–
Students are required to form syndicates of 4 students
–
Groups will be required two present twice, the first will be 10 minutes duration
and critiqued by a paired syndicate panel.
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Groups must select one of the innovations presented for a product or service for
marketing internationally, targeting a consumer market.
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Your syndicate’s chosen business venture or product idea must be a consumeroriented service or a consumer targeted product that demonstrates a significant
service orientation.
Assessment Details
>
Written report 3000 words (+ or - 10%)
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A brief Market analysis; include some consideration of all relevant specific market
factors and a brief discussion on the relevance and impact of any environmental
factors. (Recommended 2-3 pages maximum)
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Market entry options
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Means of distribution,
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The product strategy (including a service strategy summary)
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Promotional strategy with the market,
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Recommended Pricing strategy,
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An appendix to the report must detail all syndicate meetings and identify individual roles
and responsibilities
Definition of International Marketing
“International marketing is the process of planning &
undertaking transactions across national boundaries that
involve exchange”
The New International Marketing Environment
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Global communications
– Information is power
– Online shopping
>
Major changes in the international trading scene
–
>
ie bilateral trade agreements
Firms focus on the interests of stakeholders
>
Major changes
A wide range of regional trade initiatives have been finalised:
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The Australia - India Trade and Economic Framework was signed on 6 March
2006.
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The Australia - Indonesia Trade and Investment Framework was signed on
29 September 2005
–
The Thailand - Australia Free Trade Agreement came into effect on 1
January 2005
–
The Australia - United States Free Trade Agreement came into effect on 1
January 2005
–
The Singapore - Australia Free Trade Agreement entered into force in July
2003
–
The Australia - Japan Trade and Economic Framework was signed on 17
July 2003
–
The Australia - China Trade and Economic Framework was signed on 24
October 2003
Stakeholders of the International Firm
International Marketing
Australian trade should join the Mexican wave
The Age , September 25, 2006
Export opportunities abound in Latin America's second largest economy, writes Tim
Harcourt.
WHEN Australia signed a free trade agreement with the US, many commentators
focused on the long-term benefits it would bring to the economy over the next
decade or so. But what about the "other United States" — the United States of
Mexico? After all, it is more than a decade since Mexico signed its own pact with
the US and Canada through the North American Free Trade Agreement. And how
about Australia itself? What gains could Australia expect from closer commercial
relations with Latin America's second-largest economy?
Australian style Marketing
Rip Curl International Marketing
Rip Curl International Marketing
France
Hawaii
Indonesia
Brazil
Driving Forces in International Marketing
> Market needs
> Technology
> Cost ( Economies of Scale)
> Communications ( rapid transfer of knowledge)
Restraining Forces in International Marketing
1.
Differences between National markets
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Political systems
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Legal requirements
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Cultural norms
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Economic development
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Technological environment
Restraining Forces in International Marketing (Cont.)
2. Controls over entry and access to markets
3. Actual or perceived risk 9
– Commercial
– Cross-cultural
– Country
– Financial
Approaches to International Marketing
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From domestic to transnational “involvement or commitment “
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Domestic orientation - export to overseas agent
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Move to international marketing - commit resources to overseas market
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Take multinational stance - adapt for the market
–
Move to global marketing - provide competitive global offering
Approaches to International Marketing (Cont.)
>
From indirect exporting to FDI “nature of involvement”
– Use Australian agent
– Export to overseas intermediary
– Set up a sales office overseas
– Arrange for an overseas firm to manufacture under license
– FDI in overseas market to avoid import restrictions, for example
Approaches to International Marketing (Cont.)
>
From export to holistic focus “outward & inward linkages”
– Import through Australian agent
– Import direct
– Establish overseas buying office
– Manufacture the foreign product in Australia under license
– Overseas firm sets up factory in Australia
Concepts Underlying International Marketing
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Comparative advantage focus on what country does best
>
Product lifecycle extension – extend to overseas market
>
Internalisation control v resources
>
Relationships & networks ie agents
alliances etc
International Trade Cycle
The Wheel of International Marketing
The Wheel of International Marketing (Cont.)
> Marketing mix variables
– Product, price, place, promotion
> Interactions between firm and foreign environment
– Political/legal, economic, financial, social/cultural, technology,
geography/infrastructure, etc.
> Modifications required to interact in foreign environment
– Product, price, place, promotion
Australia and the Global Marketing Environment
> Major export activity
> Major import activity
> Trade in services
> Australia-Asian trade
Australia’s Merchandise Exports by Destination, 2003-4
Australia’s Imports by Sector, 2003-4
International Marketing
Session 2
1. Opportunity Identification process
2. Market Selection & Analysis
Presented by John Collins
Opportunity Selection process
> Opportunity identification presentation
– Students are required to present a one- two minute presentation
to the class, identifying an international marketing opportunity –
A 1-page report should accompany your presentation.
– Following the presentation, students are required to form
syndicates of 3 students
– –Value of this assessment is 10%
Opportunity Selection process
Part A
Selection process for projects
1. Students are required to rank each of the ideas presented for a
team project
2. 3.2.1 ranking process ( 3 is the most preferred project)
3. Teams of 3 will be created based on the top 4 scoring projects
after combining the total 3.2.1. points
Opportunity Selection process
Part B
Selection process for teams
1. The original project presenter will be the first person selected in each
winning team
2. The next two people selected in each team will be selected on the basis
of their preferred project (3 point ranking)
3. In the event where more than 2 people apply – The project leader will
select the additional 2 members
4. If, in the pool of unallocated students , 1 or 2 remain , those people will
be allocated to their preferred 3 member group first (coin toss for first
selection). This will result in 1 or 2 groups being 4 member groups
Market analysis
>
This is essentially a definition and specific analysis of the market in which your product/service
will be competing.
>
Market Definition -Important to identify the geographic boundaries, a demographic description
and other relevant bases of identifying customers, also include the market size and market
characteristics.
>
Infrastructure. -Description of the Market infrastructure as it affects the industry and market you
are analysing for entry.
>
Political and legal factors- Impact on your decision making for market entry and ongoing
marketing strategy. Include a brief P.R.A.
>
Social and cultural factors.- Any Key customer and industry factors that will require
consideration for strategic decision making
>
International economic factors.- Currency issues, tariffs, taxation etc
>
Specific market factors -This is an important section. In particular the competitive structure of
the market needs to be described here. This could include details on market share, industry
characteristics such as rivalry amongst existing firms, threat of new entrants and trends. A brief
SWOT ANALYSIS including Any known barriers to entry and KEY SUCCESS FACTORS
Environmental Analysis of International Markets
Catering for the cultural and social environment
http://www.youtube.com/watch?v=i4j9TVX6B34
Introduction
>
Culture encompasses a number of broad dimensions. Culture is:
– Prescriptive
– Learned
– Dynamic
– Subjective
– Shared
>
The impact of culture on international marketing:
– Conditions needs and wants of potential buyers
– Impacts on the way messages are received and interpreted
– Pervades all elements of the marketing mix
Culture: Elements & Differences
> To understand customers you need to understand their cultural
heritage, which has developed over time
> Need to study the elements of culture
– Material culture - technology and economics
– Social institutions - concerned with the way people relate to each
other
– Relations with the universe - religion, superstition, and impact on
value systems
– Aesthetics - activities and art forms
– Language - differ in the way they convey meanings
Culture as a Collective Fingerprint
> A mark of identity not superiority
> It is dynamic in nature
> There exists resistance to change
> Elements of culture impact differently on different aspects of the marketing program.
Levels at which Culture Operates
>
National - values in which institutions are based
>
Industrial - values and norms of industry
>
Organisational - general business patterns of firms
Understanding Cultural Differences
> Maslow’s Hierarchy of Needs - how consumers respond to cultural stimuli
> Self-reference Criterion - develop awareness
> High and low context cultures - verbal versus non-verbal cues
> Psychic Distance - factors that differentiate the foreign market from the home
market
Key Cultural Differences
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Time - assumptions about time vary across cultures
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Space - can be both physical and abstract
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Language - precision versus ambiguity
>
Familiarity - friendship patterns
>
Consumption patterns - material possessions and dress
>
Business customs - bribery
Culture and Communication
> Verbal communication
– Who communicates the message and to whom
– What message is communicated
– How the message is communicated
– Where the message is communicated
– When the message is communicated
– Why the message is communicated
Culture and Communication (Cont.)
>
Non-verbal communication
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Body stress signals
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Lower body signals
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Body posture signals
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Random gestures
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Facial expressions
Cross-cultural Comparisons
> 4. Masculine & Feminine
– Relationship between gender & work roles
– Masculine cultures: strong minded, individualistic, assertive
– Feminine cultures: modest, relational, concerned with quality of life
Environmental Analysis of International Markets
Avoiding the pitfalls of the international political and legal environment
The Role of Government
> Types of national governments
– Parliamentary governments
• Industrialised nations - parliamentary democracies
• Citizens interact via voting
– Absolutist governments
• Policy without considering citizens opinions
– Other governments
• Some fall in between
• Parliamentary elections with emphasis on family/the party
The Role of Government
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Participator
– Commercial activities undertaken by government
• State owned enterprises; statutory marketing, authorities; the pace of
privatisation
>
Facilitator
– Governments may provide concessions/assistance
• Tax holidays, subsidies, etc.
>
Regulator
– Government planning activities
• Can influence funding, taxes, imposition of conditions, mandatory standards
and controls on exports and imports
Political Stability & Risk
>
Political stability - change should be gradual and non-violent
– Degree of social unrest
– Frequency of changes in the regime
– Extent to which the country is divided culturally
– Religious division
– Linguistic diversity
Sources of Political Instability
> Political conflict
– Some conflict displays higher risks than others
> Political intervention
Nature of Political Risk
> General instability risk
– Revolutions, invasions
> Ownership risk
– Property, lives of expatriates
> Operating risk
– Interference in ongoing operations
> Transfer risk
– Restrictions on repatriation of profits, capital, dividends
Assessing Political Risk
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Country’s track record
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Visit the country - ‘grand tour’
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Consult an ‘old hand’
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Political Risk Indexes
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Appraising the firm’s exposure to political risk:
– Product related factors - political target?
– External factors - government relations
– Company factors - general reputation, contributions to the foreign market,
degree of localisation
Managing the Overseas Political Environment
>
Localisation of operations
– Greater localisation can assist
>
Political risk insurance
– Export Finance Insurance Corporation (EFIC)
– Premium will vary
>
Globalisation
– Location
– Transfer pricing
– Standardisation of marketing mix factors
Managing the Overseas Political Environment (Cont.)
>
Marketing implications
– Carefully examine the political climate
– Study the history of the governments intervention in foreign business activities
– Analyse the foreign government for its:
• Stability
• Competence in economic management
• Frequency in changes in policy toward foreign investment
• Nature of the relationship between the government and the people.
The Legal Environment
>
Introduction
– International trade usually involves two or more legal systems.
– Hence the legal complexities are greater for international trade
than they are with domestic trade.
Differing Legal Systems
>
Common Law
– Based on traditions past practices, legal precedents, interpretations via court decision
>
Code Law
– Separate codes - civil, commercial, & criminal
– All inclusive system of written rules/codes; courts adopt precedence to fit the case
>
Islamic Law
– Interpretation of the Koran; encompasses religious duties/obligations
International Law (Cont.)
>
International law is reflected in the determinations of multilateral bodies
– World Trade Organisation
– United Nations Commission on Int. Trade Law
– Multilateral & regional agreements
Foreign Law & Developing the Marketing Mix Overseas
>
Laws governing each element of the marketing mix may vary between countries
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Product
•
–
Price
•
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Price control mechanisms; dumping; tariffs, profit margins
Distribution
•
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Laws to protect consumers
Regulations covering physical distribution of goods/carriers; nature of channels;
intermediaries/ resellers
Promotion
•
Trade descriptions; prohibition of advertising; use of words/expressions
The Impact of Law on International Operations
> Three additional areas in which the firm faces
problems due to the application of different laws:
– Environment
– Human resources
– Intellectual property protection
International Market Selection & Entry
>
>
Two critical questions
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Which market?
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How to enter?
Complexity surrounds the choices
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Trade blocs
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Tariff barriers
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Strategic alliances
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Information technology
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Global markets
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The firm’s goal?
Issues for Market Selection
>
Profits/losses achieved in the foreign market may also affect the
firms domestic market
>
Treat market selection as a part of the firms overall strategy
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Linked to its resource position, core competence, and
competitive position
>
Structure of the industry: domestic/global?; strategies of competitors
>
Overseas markets may be integrated and may facilitate
simultaneous entry into other markets
Alternative Approaches to Market Selection
>
Approaches to market selection - implications for SMEs vis-à-vis large firms
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Incremental entry vs simultaneous entries
•
Incremental entry - less resources, risks; provides for learning experiences;
may preclude economies of scale
•
Simultaneous entries - resource intensive; higher operating risk; acquire
overseas experience rapidly; facilitate economies of scale
Alternative Approaches to Market Selection (Cont.)
> Approaches to market selection - implications for SMEs vis-à-vis large firms (cont.)
– Concentrated approach vs diversified approach
• Concentrated approach - resources concentrated in limited number of markets;
reduced costs, operating risks; economies of scale
• Diversified strategy - spreads risks exposure; broadens market knowledge;
strategic flexibility; resources spread thinly?
Modes for Entering Foreign Markets
>
>
>
Indirect export
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Home agent
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Cooperative exporting
Direct exporting
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Greater resources/control
–
Foreign agent
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End-user
Establish sales office in foreign market
Modes for Entering Foreign Markets (Cont.)
>
Licensing
•
>
>
Franchising
Manufacturing-based entry
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Joint Venture
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Acquisition
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Greenfield operation
Relationship-based entry
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Contract manufacturing
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Strategic alliance
Evaluation of Entry Modes
> Choice of entry mode involves trade-offs
– On the one hand - between degree of control
– On the other hand - between commitment of resources
– Relates to the depth of involvement in the foreign market - from FDI to
export
Presentations – Suggested Content
>
Introduction
>
Market analysis
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>
Market entry
–
>
Identify the existing industry distribution systems and any variation planned for your proposed
structure
Communications with the market
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>
The product strategy should discuss any adaptation requirements to meet the specific needs of
the intended target audience. This may include packaging, branding, and modifications to size,
colour, ingredients, and warranty or service factors
Means of distribution
–
>
Clear recommendation for the most appropriate market entry structure,
The product strategy
–
>
a definition and specific analysis of the market in which your product/service will be competing.
strategies for effectively communicating the brand image of your product/service to the intended
target audience
Pricing policy
–
Brief summary of pricing strategy
Critique of Draft presentations
> This feedback to be provided in good faith as a genuine effort to assist your
group in finding ways to improve your presentation. It is intended all
comments be positive and constructive and that no comments should be
construed as a personal criticism.
> Teams can choose to integrate any ideas into their final presentation
> Please give your appraisal to the team leader at the completion of the
presentation and the appraised team should attach copies of their critique
as an appendix to their report.
Presentation criteria
 Did the Speakers present clearly
and project sufficiently to the
audience?
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Overall, was the presentation
persuasive and dynamic?
Any suggestions for
improvement?
Did you feel a connection was
established with the audience?
Were the speakers engaging
and interesting?
Any suggestions for
improvement?
How did the group dynamic
work?
Any suggestions to improve the
use of individual to create a
greater synergy?
Was the PowerPoint
presentation (or overhead)
visually appealing, well
structured and informative?
Any suggestions for
improvement?
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Were there any information
gaps in the “story”?
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Did the content focus on the
critical issues
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Any other comments?
Comments