International Marketing & Sales
1. Business & Marketing Strategies
2
2. Porter´s 5 Forces
4
3. Marketing Orientation
7
4. Trends in Marketing & Sales Management
9
5. The Value Proposition
11
6. Market Segmentation
15
7. International Segmentation
17
8. Segmentation in B2B
21
9. BCG Matrix
23
10. McKinsey Portfolio
23
11. Motives for Internationalization & EPRG Model
25
12. Analysis of customers
26
13. C/D Paradigm – Customer Satisfaction Value
26
14. The 4 P’s of Marketing Globally
27
15. How culture in uences International Marketing
27
16. Persuasion
30
17. Consumer Behavior
32
18. Distribution Partner Concepts
35
19. Indirect Channel
37
20. Direct Channel
40
21. Sales Funnel
41
22. MEDDIC Sales Method
43
23. Ethics & Corporate Responsibility
44
24. International Context of CSR
46
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1. Business & Marketing Strategies
Business Strategy
Business strategy is:
- How a business approaches its goals
- the rm’s long-term working plan for achieving its vision, prioritizing objectives,
competing successfully, and optimizing nancial performance with its business
model
- successful, when they lead to business growth, a strong competitive position, and
strong nancial performance
- providing a framework for making decisions about what you don’t want to be doing as
well as what you do intend to do
Competitive Advantage
- Competitive advantage is an attribute that enables a company to outperform its
competitors
- This can be: better technology, innovative products, better locations, costs, or
outstanding customer service
Sustainable Competitive Advantages
Low Cost provider/ Low pricing:
- Economies of scale and e cient operations can help a company be the lowest cost
provider, keeping competitors out.
- The fact that a large company is a low-cost provider can be a signi cant barrier to
entry. In addition, a consistent low-price policy can build brand loyalty and provide a
major competitive advantage (e.g., Wal-Mart).
Powerful Brands:
- A good brand is invaluable because it causes customers to prefer the brand over
competitors. Being the market leader and having a great corporate reputation can be part
of a powerful brand and a competitive advantage.
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Market or Pricing Power:
- A company that has the ability to increase prices without losing market share is said to
have pricing power.
- Companies that have pricing power are usually taking advantage of high barriers to
entry or have earned the dominant position in their market.
Strategic Assets:
- Patents, trademarks, copy rights, domain names, and long term contracts would be
examples of strategic assets that provide sustainable competitive advantages.
Adapting Product Line:
- A product that never changes is ripe for competition. A product line that can evolve
allows for improved or complementary follow up products that keeps customers coming
back for the “new” and improved version (i.e. Apple iPhone) and possibly some
accessories to go with it.
Barriers to Entry:
- Cost advantages of an existing company over a new company is the most common
barrier to entry. High investment costs (i.e. new factories) and government regulations
are common impediments to companies trying to enter new markets.
- High barriers to entry sometimes create monopolies or near monopolies (i.e. utility
companies).
Product Di erentiation:
- A unique product or service builds customer loyalty and is less likely to lose market
share to a competitor than an advantage based on cost.
Strong Balance Sheet/ Cash:
- Companies with low debt and/or lots of cash have the exibility to make opportune
investments and never have a problem with access to working capital, liquidity, or
solvency.
Outstanding Management/ People:
- There is always the intangible of outstanding management. This is hard to quantify, but
there are winners and losers. Winners seem to make the right decisions at the right
time. Winners somehow motivate and get the most out of their employees, particularly
when facing challenges.
- Management that has been successful for a number of years is a competitive
advantage.
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2. Porter´s 5 Forces
Basics
What Are Porter's Five Forces?
Porter's Five Forces is a model that identi es and analyzes ve competitive forces
that shape every industry and helps determine an industry's weaknesses and
strengths. Five Forces analysis is frequently used to identify an industry's structure to
determine corporate strategy. Porter's model can be applied to any segment of the
economy to understand the level of competition within the industry and enhance a
company's long-term pro tability.
Porter's Five Forces is a business analysis model that helps to explain why various
industries are able to sustain di erent levels of pro tability. The model was published
in Michael E. Porter's book, "Competitive Strategy: Techniques for Analyzing Industries
and Competitors" in 1980.1 The Five Forces model is widely used to analyze the industry
structure of a company as well as its corporate strategy. Porter identi ed ve undeniable
forces that play a part in shaping every market and industry in the world, with some
caveats. The ve forces are frequently used to measure competition intensity,
attractiveness, and pro tability of an industry or market.
Porter's ve forces are:
1. Competition in the industry
2. Potential of new entrants into the industry
3. Power of suppliers
4. Power of customers
5. Threat of substitute products
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1. Competition in the Industry
The rst of the ve forces refers to the number of competitors and their ability to undercut
a company. The larger the number of competitors, along with the number of equivalent
products and services they o er, the lesser the power of a company. Suppliers and
buyers seek out a company's competition if they are able to o er a better deal or lower
prices. Conversely, when competitive rivalry is low, a company has greater power to
charge higher prices and set the terms of deals to achieve higher sales and pro ts.
2. Potential of New Entrants Into an Industry
A company's power is also a ected by the force of new entrants into its market. The less
time and money it costs for a competitor to enter a company's market and be an e ective
competitor, the more an established company's position could be signi cantly weakened.
An industry with strong barriers to entry is ideal for existing companies within that
industry since the company would be able to charge higher prices and negotiate better
terms.
3. Power of Suppliers
The next factor in the ve forces model addresses how easily suppliers can drive up the
cost of inputs. It is a ected by the number of suppliers of key inputs of a good or service,
how unique these inputs are, and how much it would cost a company to switch to
another supplier. The fewer suppliers to an industry, the more a company would depend
on a supplier. As a result, the supplier has more power and can drive up input costs and
push for other advantages in trade. On the other hand, when there are many suppliers or
low switching costs between rival suppliers, a company can keep its input costs lower
and enhance its pro ts.
4. Power of Customers
The ability that customers have to drive prices lower or their level of power is one of the
ve forces. It is a ected by how many buyers or customers a company has, how
signi cant each customer is, and how much it would cost a company to nd new
customers or markets for its output. A smaller and more powerful client base means that
each customer has more power to negotiate for lower prices and better deals. A company
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The Five Forces
that has many, smaller, independent customers will have an easier time charging higher
prices to increase pro tability.
5. Threat of Substitutes
The last of the ve forces focuses on substitutes. Substitute goods or services that can
be used in place of a company's products or services pose a threat. Companies that
produce goods or services for which there are no close substitutes will have more power
to increase prices and lock in favorable terms. When close substitutes are available,
customers will have the option to forgo buying a company's product, and a company's
power can be weakened.
Understanding Porter's Five Forces and how they apply to an industry, can enable a
company to adjust its business strategy to better use its resources to generate higher
earnings for its investors.
KEY TAKEAWAYS
Porter's Five Forces is a framework for analyzing a
company's competitive environment.
The number and power of a company's competitive rivals,
potential new market entrants, suppliers, customers, and
substitute products influence a company's profitability.
Five Forces analysis can be used to guide business
strategy to increase competitive advantage.
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3. Marketing Orientation
Marketing Concept
De nition of Marketing Concept: Identifying consumer needs and then producing the
goods or services that will satisfy them while making a pro t for the organization.
The marketing concept is based on increasing a company’s ability to compete and
achieve maximum pro ts by marketing the ways in which it o ers better value to
customers than its competitors. It’s all about knowing the target market, sensing its
needs, and meeting them most e ectively. Many refer to this as the “customer- rst
approach.”
Most important questions:
- What is the target market?
- What are the needs wants and demands of the target market?
- How best can we deliver a value proposition?
Seller & Buyer Markets
Product focused Market: customers will come
to you, business objective is to sell as much as
you can (to anyone who wants it), market share
increases pro tability and lowers costs.
Customer focused Market: you want customers
to buy the product from you rather than your
competition, you have to meet the customer needs (inside out vs outside in).
Product-Based Strategies: Product-based marketing strategies focus on a company’s
product o ering rather than any particular customer. Companies like Staples and Sears,
for instance, primarily use a mass marketing strategy that assumes large numbers of
customers are looking for speci c products or product categories. The company's
primary goal in the marketing mix is to make it widely known that it carries these products
categories and make it easy for customers to locate and purchase them.
The focus of product-based strategies is the SWOT analysis. Based on this analysis of
the company's competitive strengths and weaknesses and the opportunities and threats
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presented by competitors, a company must either create products so distinctive that
customers can't get them elsewhere, or it must position products with universal demand
more favorably than its competitors do.
Customer-Based Orientation
Customer-Based Strategies: Customer-based strategies begin by identifying the
company's target customers. Market research nds the customers most likely to
purchase the company's existing or planned products, then builds a pro le describing
how to reach and engage those customers. The company's marketing mix, including the
features of the product itself, are tailored toward the customer segments chosen. These
segments may be broad or as narrow as one individual customer. This strategy views
customers as assets that provide returns over time on the marketing investment required
to attract them.
Creating a Customer- Based Strategy:
• Initially, the market of potential customers is divided into various segments based on
criteria that are meaningful to the company's brand.
• Demographics such as income, age, gender and occupation are some of the most
widely used market segmentation qualities.
• The company then chooses
one or more speci c
segments to target and
crafts the "four P's" of the
marketing mix -product,
price, promotion and place
- to position its product
o erings favorably in the
target customers'
perception.
Customer Share: Give the customer what he/she wants time after time after time, not
just one single transaction. Thus, building loyalty and delivering value over time.
=> loyalty, cross-selling, premium pricing
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Alternative Orientations
4. Trends in Marketing & Sales Management
Definition of Marketing and Sales Management:
De nition by AMA (American Marketing Association):
Marketing is an organizational function and set of processes for creating, communicating,
and delivering value to customers and for managing customer relationships in ways that
bene t the organization and ist stakeholders.
De nition by Homberg & Krohmer (2003):
Marketing has an internal and an external facet.
a. From an external point of view, marketing comprises the conception and
implementation of market-related activities of a supplier vis-à-vis demanders or
potential demanders of its products (physical products and/or services). These
market- related activities include the systematic gathering of information about market
conditions as well as the design of the product range, pricing, communication and
sales.
b. Marketing means the creation and prerequisites within the company for the e ective
and e cient execution of these market-related activities. This includes in particular the
management of the entire company according to the guiding principle of market
orientation.
c. Both the external and the internal approaches aim at an optimal design of customer
relationships in the sense of the company's goals."
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10 relevant issues in B2B Marketing
Overview of Trends
• New competitors in sales
- International competition
- Digital business models (online platforms; Amazon)
- combined business models (multi-channel online/ o ine; Hilti)
• Customer demands rise and become more individual
- customers expect high exibility, combined on- & o ine solutions, competent
advise, high service orientation, price transparency, etc.)
• Customers expand their procurement competence
- Purchasers have already gone through 60% of the purchasing process without
contacting a sales representative
- 68% of buyers use all available online and o ine channels to nd out about
suppliers
• Sales cooperation with other departments
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• Higher demands on the data analysis in the sales department
- Analysis of customer needs and requirements (customer potential)
- Analysis of market and competitor data (market potential)
- Entry and evaluation of market and customer data in the CRM system
- Sales and marketing skills to statistically evaluate data
• Digitization in distribution
- Website as information platform
- New interaction models with customers (e.g. website, online newsletter, social
media and apps)
- Integrated IT systems (e.g. ERP, CRM, SCM, PPS, CAD, IT satellite systems)
- Simple procurement processes for customers (e.g. EDI, e-commerce, eprocurement, online platforms, web shop)
- Management of customer relationships via CRM system (e.g. customer data,
market data, transaction data, product and service data)
- New online sales platforms (e.g. Amazon, Wucato, etc.)
5. The Value Proposition
The value proposition:
- A company's value proposition tells a customer the number one reason why a
product or service is best suited for that particular customer.
- A value proposition should be communicated to customers directly, either via the
company's website or other marketing or advertising materials.
- Value propositions can follow di erent formats, as long as they are "on brand“, unique,
and speci c to the company in question.
- A successful value proposition should be persuasive and help turn a prospect into a
paying customer.
Value Creation:
- Customers want to gain a consumer surplus, so they chose brands with value to them.
The total value created is the price paid, and the perceived value of the consumer
surplus.
- Branding is the process of creating a strong, positive perception of a company, its
products or services in the customer’s mind by combining such elements as logo,
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design, mission statement, and a consistent theme throughout all marketing
communications.
- By carefully constructing your brand through stories, relationships, marketing
messages and visual assets, you have the opportunity of shaping your customers’
expectations and creating a unique bond that goes beyond the buying-selling
relationship.
Brand strategy:
- Branding communicates the characteristics, values and attributes that the organization
or product stands for, how it is positioned di erently to competitors, and why a
customer would buy it.
- Unique value Proposition: how one's own brand or product is superior to its
competitors, what makes a brand di erent. (NOT a slogan)
Business Model Canvas - Explanations of the Components
The Business Model Canvas is a strategic management template used for developing
new business models and documenting existing ones. It o ers a visual chart with
elements describing a rm's or product's value proposition, infrastructure, customers,
and nances, assisting businesses to align their activities by illustrating potential tradeo s.
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Potential analysis (company related analysis)
Analysis of the strengths and weaknesses of your own company
- analysis must include all functional areas of the company (production, R&D, nance,
etc.)
- In the procedure, the relevant business criteria must rst been found and then weight
against other criteria (e.g. it should add up to 100)
- The evaluation should be carried out on a scale from 1 = very low to 5 = very high
- The evaluation of criteria für own company and strongest competitors has to be carried
out by an interdisciplinary team in order to receive relative objective results (8-10
participants from marketing, sales, nance, production, R&D, quality, etc.)
- After evaluation of criteria, results should be presented in a strength-weakness-pro le
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Competition Analysis
A competition analysis is a structured comparison of the company with its
competitors
The process steps of the strengths/weaknesses analysis:
1. Establishment/ordering of the success factors relevant for the SBU (according to
importance for competitive advantages (strategy)
2. Evaluation of potential/success factors
a. of the own SBU
b. the main competitor(s)
3. Systematic comparison with the competitor along the relevant success factors
(alternative: best competitor for each factor)
4. Result: Strengths/weaknesses pro le
Problems of the comparison of strengths and weaknesses:
• Gathering information about competitors
• Lack of objectivity in the weighting and evaluation of factors
SWOT Analysis
- SWOT analysis is a strategic planning technique that provides assessment tools.
- Identifying core strengths, weaknesses, opportunities, and threats leads to fact-based
analysis, fresh perspectives, and new ideas.
- SWOT analysis works best when diverse groups or voices within an organization are
free to provide realistic data points rather than prescribed messaging.
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PESTEL Analysis
A PESTEL analysis is a strategic framework commonly used to evaluate the business
environment in which a rm operates. Traditionally, the framework was referred to as a
PEST analysis, which was an acronym for Political, Economic, Social,
and Technological; in more recent history, the framework was extended to
include Environmental and Legal factors as well.
6. Market Segmentation
De nition: Dividing a market into distinct groups of buyers who have di erent needs,
characteristics or behaviors, and who might require separate marketing strategies or
mixes
Market targeting:
Evaluating each market segment’s attractiveness & selecting one or more segments to
serve
Di erentiation:
Di erentiating the market o ering to create superior customer value
Positioning:
For a market o ering to occupy a clear, distinctive and desirable place relative to
competing products in the minds of target consumers
4 Types of Market Segmentation:
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Bene t Segmentation:
Bene t segmentation is the clustering that is done based on the perceived value or
bene ts to the end customer. That is, most products o er one or more value proposition
to intended customers. Customers may value the various value propositions of the
product di erently. As such, companies segment these customers based upon their
preferred value o ering. The company will then seek to more e ectively market the
products value proposition to those speci c customers.
Bene t Segmentation approach:
-
status seekers
Innovators
Brand loyals
Smart shoppers
Pleasure seekers
Brand connectors
Selecting Target Market Segments
Undi erentiated marketing (mass):
- Market-coverage strategy in which a rm decides to ignore market segment di erences
and go after the whole market with one o er
- Example: Undi erentiated campaigns campaigns usually come with a general hook,
such as “High quality. Low price.” or “The only cup of co ee you need.”
Di erentiated Marketing (segmented):
- Market-coverage strategy in which a rm targets several market segments and designs
o ers for each
- Hope for higher sales and stronger position in each market segment
- Since it is more expensive to develop and produce 10 units of 10 di erent products
than 100 units of a single product, companies must weigh increased sales against
increased costs
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Concentrated Marketing:
- When a rm goes after a large share of one or a few segments or niches
- Niching lets smaller companies focus their limited resources on serving niches that may
be unimportant to or overlooked by larger competitors
Micromarketing:
- Tailoring products and marketing programs to the needs and wants of speci c
individuals and local customer segments
- It includes local marketing and individual marketing
Local Marketing:
• Tailoring brands and marketing to the needs and wants of local customer segmentscities, neighborhoods and even speci c stores
Individual Marketing:
• Tailoring products and mkt. programs to needs and preferences of individual customers
7. International Segmentation
Criteria for Segmentation
Criteria of Market and Customer Segmentation
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Criteria for Macro Segmentation:
Criteria for Micro Segmentation:
International Segmentation
De nition: International segmentation is de ned as the identi cation of groups of
consumers with similar needs and wants across cultural units.
Main questions:
- Who has a need or desire for our service/product/o ering (need or desire)?
- Do they have the discretionary budget or money to a ord the product or service in any
of the various forms (or do we have to/wish to adapt our pricing strategy to serve the
target audiences?) (money)?
- Who is the decision- maker or
has the authority to approve
this purchase (authority)? If we
concentrate e orts on these
consumers as a group
- Do they have distinctive needs,
habits, and attitudes to be able
to approach and serve them as
a group or segment
(distinctive)?
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Foreign market selection strategy
Market concentration: Focus on a few select markets. This strategy will help you
consolidate your company’s presence in these markets, with the aim of securing constant
sales growth.
Advantages:
- You will gain in-depth knowledge of each market and can design or adapt your
products to match
- costs are reduced across logistics, management and operations management
Factors favoring concentration:
- international demand is concentrated on a small number of markets with stable
performance
-
the market has several potential customers
your product has a long lifecycle
there is strong competition
your company is small with limited resources
your product needs to be adapted to suit particular market tastes
the market requires large promotional or communication- channel investment
Market diversi cation: Introduce your product to as many markets as possible –
perhaps with small shares in the majority of your markets.
Advantages:
- possibility for rapid sales growth
- you could sell at di erent prices and take advantage of the uctuations in exchange
rates
- Risk diversi cation
Factors favoring diversi cation:
- the global demand for your product or service is spread out across many markets with
irregular behaviour
-
there is a reduced number of potential customers in the market
your product has a long lifecycle
your competitive environment is stable and divided among fewer companies
your company is large with abundant resources
your product or service is standardised in all markets
only limited promotional investment is needed to generate sales
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- identify your main competitors and describe them
- analyze their economic evolution and sales over the last 3 years
- detect their distinguishing factors – including prices, channels, market maturity,
nancial position, development potential and plans and/or expansion strategies
Distribution channels:
- Your choice of distribution channel will determine how your company expands in the
market.
- Track the supply chain of your product, from its origins to its nal customer.
- Develop a clear idea of the intermediate operators and their prices.
- Analyze the existing sales structure in the country and how this could be adapted to
your product or service.
- There are a number of possible distribution channels: international distribution from
your own market, a local distributor in the target market, your own commercial agent,
the internet, a subsidiary or delegated company, the creation of a joint venture with a
local partner
Demand analysis:
- You will need to analyze the current and potential demand of your product in its source
market, as well as its pro le and expected evolution.
- This information should con rm that your pre- selection process was successful and
that your chosen markets are suitable for your product.
- You will learn how best to
design your subsequent
marketing strategy based on
price, presentation, promotion,
distribution and so on.
- We recommend that this initial
analysis is backed-up by
further research in the market
itself or through intermediaries.
This will help you assess
whether your initial analysis
was correct.
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Analysis of the competition:
Cross-market segmentation:
- In this approach—even if these consumers are situated in di erent countries̶—the main
criteria marketers used to collect consumers into segments are consumer needs and
buying behavior.
- For example, the eyewear company Ray-Ban positions themselves as “Timeless style,
authenticity and freedom of expression are the core values of Ray-Ban, a leader in sun
and prescription eyewear for generations”.
- Ray-Ban is now available in 213 countries, but despite the geographic spread, the main
segment the markets by self-image and self- expression groupings, using music
festivals and various sport celebrities to in uence future buyers.
8. Segmentation in B2B
De nition by Engelhardt & Günther (1981):
The division of a given or intended market into submarkets (market segments) with
customer groups that react more homogeneously than the overall market to certain sales
policy activities; the subsequent selection of the market segments to be processed, and
the alignment of the marketing mix to these market segments.
- The strategy of market segmentation results from the recognition that market
participants do not react uniformly, that there are di erent needs and behaviors on the
buyer side and that purchasing power is not uniform.
- Market segmentation means the splitting of the market into clearly de ned areas, into
speci c groups of buyers; each area is a target market, and a marketing mix developed
speci cally for it is used in each area.
- A key characteristic of B2B buying behavior is that several individuals from di erent
backgrounds, with di erent buying motive and di erent levels of decision-making
power, may be involved in the buying decision.
Two-stage approach by Wind and Cardozo:
This combines customer rm characteristics such as size, industry, and product
application with the nature of the decision-making processes of the Business Unit.
- The rst macro- segmentation step is to group rm of similar size, location, and
industry together
- A promotional signage company may, for example, segment their corporate clients into
segments such as packaging, signage and displays, outdoor, vehicles, and trade
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and fashion apparel
- the next stage is to nd clusters within the macro-segments that demonstrate similar
buying behavior (micro- segments) or similar decision procedures by the DMUs
Example:
- Large pharmacies B2B customers have purchasing agents (BUs) that buy on behalf of
ve to ten franchisees
- whereas pharmacists who manage their own small pharmacies act as their own
marketing specialist and purchasing agent for their pharmacies.
- Where the large franchises use expensive point-of- purchase displays and windowdressing to communicate season o ers such as cold remedies
- the smaller pharmacies only use branded items o ered for free by large pharmaceutical
suppliers
Three-dimensions approach (Bonoma and Shapiro):
customer groups (who), customer functions (what), and technologies (how)
Customer groups:
- standard consumer/customer-based segmentation using demographics, geographic
categories (e.g., province, state, nation, postal codes, suburbs)
- nature of the customer (e.g., academic, professional, sales organization, law rm,
government, etc.)
- product usage characteristics (DMU, rst- time client, loyal customer, buying situation)
Customer functions:
- Related to the application or solution sought, e.g., for the travel industry, it might range
from conference attendance, site inspection, convention, movie premiers and PR
events, honeymoon, family holiday, sales award functions
Nested approach: The information contained in each of the levels set out below gets
more di cult to get accurate and thus more costly as you go down the list
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shows OR by industry, e.g., healthcare, construction, beverages, printing, automotive,
9. BCG Matrix
The BCG matrix is a portfolio for the strategic management of companies. Various
products or services of a company are arranged in a matrix with the coordinates relative
market share and market growth,
and standard strategies are
developed from them.
1. Dogs: These are products with
low growth or market share.
2. Question marks or Problem
Child: Products in high growth
markets with low market share.
3. Stars: Products in high growth
markets with high market share.
4. Cash-cows: Products in low
growth markets with high market
share
10. McKinsey Portfolio
The GE matrix helps corporations to evaluate their business portfolios and prioritize
investments among their diversi ed units in a systematic manner. It consists of nine cells
that map the strategic business units of the rm. It builds on two dimensions such as
industry attractiveness and business competitive strength with di erent drivers. For
example:
Drivers of Market Attractiveness:
Drivers of Competitive Strength:
• Market size
• Assets and competencies
• Market growth (share)
• Market share
• Competitive rivalry
• Customer loyalty
• Demand variability
• Cost structure
• Pestel & Porter´s 5 Forces
• Cash ow
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The strategic implications for managers when using this matrix are:
Growth Strategy: If The Business Unit Is Strong And It Competes In An Attractive
Industry.
Hold Strategy: If The Business Unit Is Average And It Competes In An Average Industry.
Harvest Strategy: If The Business Unit Is Weak And It Competes In An Unattractive
Industry.
GE McKinsey Matrix vs BCG Matrix
The GE/McKinsey matrix is divided into a 3×3 grid to provide a more ne-grained view of
the strategic position of a business unit or product than the simple 2×2 BCG matrix.
The BCG matrix uses growth as a measure of market attractiveness and market share as
a measure of business strength or competitiveness.
The GE/McKinsey matrix uses multiple criteria to determine these values. This provides a
more realistic measure than the simplistic measures used by the BCG matrix.
Unlike the BCG Matrix that aims to cross 4 quadrants with the “Market Participation” and
“Market Growth” axes, the GE / McKinsey Matrix evaluates the “Competitive Strength”
and “Market Attractiveness” axes generating the cross of 9 quadrants according to 3
intensities for each axis: Low, Medium or High.
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11. Motives for Internationalization & EPRG Model
Motives for Internationalization
Motives for Internationalization can be:
• Pro t-Oriented (Outsourcing of production, circulation of higher series through foreign
sales (Economies of Scale), absorption of consumer rents, stabilization of sales,
exploitation of tax advantages
• Growth-oriented (Extension of the product life cycle, participation in high growth in
dynamic markets, strategic growth decision)
• Corporate (Maintaining or expanding market position in foreign, markets, insu cient
sales opportunities in the domestic market, domestic market saturation, avoidance of
domestic competition, drawing along with or imitating competitors • Compensation for
loss of market share
• Other (Use of an already existing contact abroad, personal preferences of a responsible
manager, random seizing of an opportunity, moving with customers into foreign
markets, termination of surplus production, proximity to foreign markets
EPRG Model
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12. Analysis of customers
Customer analysis
ABC analysis:
• Category A: The top 20% of your products or customers go into category A. It's the
smallest category, but it can represent the products or customers that provide the most
value to your company without requiring too many resources.
• Category B: Category B often holds the largest percentage of inventory or customers in
the analysis, at around 30%-50%. It contains items and customer groups that are
important to your business but less important than those in category A.
• Category C: The C group refers to items that are only marginally important. Even though
they make up much of your inventory or customer base, they might only account for 5%
or less of your annual consumption value. Close to half of your customer groups or
inventory items go into this category.
Portfolio analysis:
A company’s marketing strategies ‘should encompass an entire portfolio of customers at
di erent relationship levels. This process is called ‘customer portfolio management.’
Customer portfolio analysis enables managers and researchers to capture a customer’s
value contribution to a rm’s portfolio of relationships rather than analyzing a customer’s
value to the rm in isolation.
For example, Coca-Cola's customer portfolio consists of restaurants, grocery stores,
amusement parks and sports arenas.
13. C/D Paradigm – Customer Satisfaction Value
The Con rmation-Discon rmation paradigm (C/D paradigm for short) de nes or explains
customer satisfaction thus:
The customer has a target expectation and compares it with the actual
performance:
If the performance remains below the expectation, the customer is dissatis ed;
If the performance meets the expectation, the customer is satis ed;
if the expectation is exceeded, the customer is delighted.
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14. The 4 P’s of Marketing Globally
The marketing mix, also known as the four P's of marketing, refers to the four key
elements of a marketing strategy: product, price, place and promotion. By paying
attention to the following four components of the marketing mix, a business can maximize
its chances of a product being recognized and bought by customers:
• Product: The item or service being sold must satisfy a consumer's need or desire.
• Price: An item should be sold at the right price for consumer expectations, neither too
low nor too high.
• Promotion: The public needs to be informed about the product and its features to
understand how it lls their needs or desires.
• Place: The location where the product can be purchased is important for optimizing
sales.
Challenges in global context:
A preliminary decision that international marketers have to make is the degree to which
the company should standardize or adapt its marketing mix around the world. So instead
of adopting a standard marketing mix for all markets or devising a separate mix for
each market, the multinational corporation should adapt a marketing mix, working
successfully in a market, to make it suitable to another market.
15. How culture in uences International Marketing
Hofstede Intercultural Dimensions
Hofstede’s Cultural Dimensions Theory, developed by Geert Hofstede, is a framework
used to understand the di erences in culture across countries and to discern the ways
that business is done across di erent cultures. In other words, the framework is used to
distinguish between di erent national cultures, the dimensions of culture, and
assess their impact on a business setting.
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Hofstede’s 6 Cultural Dimensions
Power Distance Index (high versus low):
The degree of inequality that exists between people with and without power in an
organization.
Individualism versus collectivism:
The strength of ties that people have to their community.
Masculinity versus femininity:
Masculinity represents a preference in society for achievement, heroism, assertiveness
and material success. Its opposite, femininity, stands for a preference for relationships,
modesty, caring for the weak and quality of life.
Uncertainty Avoidance Index (strong versus weak):
How well people can cope with anxiety throughout their day-to-day and overall life.
Long- versus short-term orientation:
The time horizon people in a society display. Long-term orientation refers to a more
pragmatic approach to goals, whereas short-term orientation places a high emphasis on
quick results.
Indulgence versus restraint:
The values placed on enjoying life and having fun versus suppressing grati cation and
regulating conduct, i.e. looser versus stricter social norms.
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Fons Trompenaar’s intercultural dimensions
The management consultants Fons Trompenaar´s and Charles Hampden-Turner
published their studies in 1993: They studied the preferences and values of 46,000
managers across 40 countries and found that people across cultures di er in speci c,
often predictable ways. This is because people who are raised in the same culture are
taught similar values and societal norms from a young age, and these values become
ingrained like a cultural footprint on one’s psyche.
Trompenaar´s 7 Cultural Dimensions
Universalism versus particularism:
Placing value on a set of predetermined rules to determine outcomes versus determining
actions based on speci c circumstances at that moment.
Individualism versus communitarianism:
The values placed on personal versus communal achievements.
Speci c versus di use:
How people separate work and personal lives and, consequently, if inter-work
relationships are viewed as vital to work objectives.
Neutral versus emotional:
How people express their emotions.
Achievement versus ascription:
The importance placed on work status.
Sequential time versus synchronous time:
Whether a value is placed on sequential events (working on one project at a time in order
of due date) or if time periods are viewed as overlapping (working on several projects at
once).
Internal direction versus outer direction:
How people relate to their environment (i.e. does the environment control them or do they
control their environment).
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Other
Edward T. Hall “Context”
• Context:A certain amount of information has to be transmitted in communication
situations, so that the receiver also understands the sender’s message.
• High context: Many things are not said directly, much is taken for granted
• Low-context ideas are expected to be outspoken very straightforward, most of the
things require explanation.
Global Leadership and Organizational Behavior E ectiveness (GLOBE)
Cultural Dimensions and Culture Clusters: GLOBE's major premise is that leader
e ectiveness is contextual, that is, it is embedded in the societal and organizational
norms, values, and beliefs of the people being led.
16. Persuasion
De nition: Persuasion is de ned as the act of trying to convince someone of something,
or the means of convincing someone to do something. When someone lists all the
reasons why you should do something, this is an example of persuasion
8 In uence Tactics:
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Intercultural studies show a di erence in persuasion among the di erent cultures around
the world:
Holistic Thinking: The Asian approach to persuasion
• A cultural bridge can help. If you have team members who are bicultural, or have
experience living in di erent cultures
• Patience and exibility developing your ability to recognize other’s reactions accordingly
Holism: Perspective on the human condition that assumes that mind, body, individuals,
society, and the environment interpenetrate, and even de ne one another
Guanxi: Guanxi refers to having personal trust and a strong relationship with someone,
and can involve moral obligations and exchanging favors. ... Guanxi is often translated as
“connections”, “relationships” or “networks”.
Kwan and Hong (2014) state: “In Chinese organizations, it is possible that a ective-based
trust serves as the foundation for cognitive-based trust development; that is, trusting
someone’s abilities follows when guanxi (a ective-based trust) has been developed.”
Aristotle´s Rhetoric
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Kairos:
• the right, critical, or opportune moment
• Kairos is a persuasive technique that takes
advantage using the perfect timing to
encourage people to act or make a decision
Developing Persuasion:
17. Consumer Behavior
4 C´s
Consumer wants and needs:
Consumer wants and needs, also known as customer value, focus on conducting
research, creating customer pro les, seeking feedback and monitoring social media
related to your brand to understand your customer's needs and wants.
Cost to satisfy:
According to Lauterborn, there is more to cost than just its purchase price. This
component includes the time a buyer puts in going to a store or browsing online, learning
how to use the product after its purchase and buying extra items to ensure it works as
intended such as an online subscription or accessories.
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Convenience to buy:
The convenience component includes all aspects of how easy or di cult it is for a
customer to access your product such as store hours, navigation for your online store and
whether customers can easily nd information or an associate to answer their questions.
Communication:
The communication component emphasizes having a dialogue with consumers rather
than relying on advertising that doesn't engage a response. Customers usually feel a
stronger connection with companies that respond to them directly or listen to their
suggestions.
Consumer Behavior
Consumer behavior is the study of individuals, groups, or organizations and all the
activities associated with the purchase, use and disposal of goods and
services. Consumer behavior emerged in the 1940–1950s as a distinct sub-discipline of
marketing, but has become an interdisciplinary social science that blends elements from
psychology, sociology, social anthropology, anthropology, ethnography, marketing and
economics .
Consumer behaviour also investigates on the in uences on the consumer, from social
groups such as family, friends, sports, and reference groups, to society in general .
1. The Economic Model of Consumer Behavior
Consumers follow the principle of maximum utility based on the law of diminishing
marginal utility. The consumer wants to spend the
minimum amount for maximizing his gains:
• Price e ect: Lesser the price of the product, more
will be the quantity purchased.
• Substitution e ect: Lesser the price of the
substitute product, lesser will be the utility of the
original product bought.
• Income e ect: When more income is earned, or
more money is available, more will be the quantity
purchased.
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2. Psychological Model
A.H. Maslow in his hierarchy of needs says the behavior of an individual at a particular
time is determined by his strongest need at that time.
This also shows that needs have a priority. First they satisfy the basic needs and then go
on for secondary needs.
• The purchasing process and behavior is governed by motivational forces.
• Motivation stimulates people into action. Motivation
starts with the need. It is a driving force and also a
mental phenomenon.
• Need arises when one is deprived of something.
• A tension is created in the mind of the individual which
leads him to a goal directed behavior which satis es the
need.
• Once a need is satis ed, a new need arises and the
process is continuous.
3. The Psychoanalytical Model
The Psychoanalytical Model takes into consideration the
fact that consumer behavior is in uenced by both the
conscious and the subconscious mind. The 3 levels of
consciousness discussed by Sigmund Freud (id, ego and
superego) all work to in uence one’s buying decisions
and behaviors.
A hidden symbol in a company’s name or logo may have an e ect on a person’s
subconscious mind and may in uence him to buy that product instead of a similar
product from another company.
4. The Sociological Model
Consumer’s buying pattern is based on her role and in uence in her society. Also
in uenced by the people she associates with and the culture that her society exhibits.
For instance, a manager and an employee may have di erent buying behaviors given their
respective roles in the company they work for, but if they live in the same community or
attend the same church, they may buy products from the same company or brand.
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Consumers will buy goods based on a number of di erent types of behavior. Knowing
these behaviors is key when developing marketing strategies for your business.
5. Input, Process and Output Model or Stimulus-Response Model
The consumer gets the input from the marketing e ort of the rm (4 Ps) and the other
stimuli. This input is processed in the mind (Black Box), which constitutes the
characteristics of the buyer and the process of decision- making.
Once the buyer has decided to buy then, he responds in terms of his choice of product,
brand, dealer, timing and amount.
The post-purchase behavior of being satis ed or dissatis ed is also important, and is
shown in the decision-making process.
18. Distribution Partner Concepts
Distribution Partner Concepts
• Direct distribution is a direct-to-consumer approach where the manufacturer controls all
aspects of distribution.
• Indirect distribution involves third parties, like warehouses, wholesalers, and retailers.
• Direct distribution gives companies more control over the whole process.
• Indirect distribution may allow companies to focus on their core business while
outsourcing distribution to an expert.
• A manufacturer is responsible for di erent costs, depending on which channel it uses.
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Bene ts of Channel Partners:
1. O er products & services from di erent vendors
• Diverse product portfolio
• Cater to customers' speci c business & technology needs.
2. Deliver to clients the latest in products and services.
3. Take Advantage of Additional Expertise and Resources
• Channel partners have access to a vendor’s human and nancial resources
• Technical support, product and market training, marketing assistance, campaign
templates
4. Receive Leads
• Some vendors continue to market their products and services on their own, then pass
the leads they receive onto their channel partners for follow-up
5. Increased Margins
• Depending on the amount of product sold, additional discounts & revenue opportunities
6. Bene t of an Established Name
• Name recognition and reputation of large vendors.
Benefits of Channel Partners
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19. Indirect Channel
International Marketing & Globalization
Major participants in international marketing:
Multinational Corporations (MNCs)
• An organization that ensures the production of goods and services in one or more
countries other than its home country.
• Such organizations have their o ces, help desks or industrial set-up across nations and
usually have a centralized head o ce where they co-ordinate global management.
Exporters
They are the overseas sellers who sell products, and provide services across their home
country by following the necessary jurisdiction.
Importers
• The overseas buyers who buy products and services from exporters by complying with
the jurisdiction.
• An import by one nation is an export from the other nation
Service companies
• A service company generates revenue by trading on services and not on physical
commodities. For example a public accounting company
• Revenue here is generated by preparing returns of income tax, performing audit
services, and by maintaining nancial records.
Agents
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Agent Selection:
Distributor
Distributors:
- Buy and sell goods
- Able to nance their own stockholding of goods
- Able to purchase in larger quantities, thus saving on delivery costs
- Commercially and legally responsible for all business transactions in the market
- Entrepreneurs and accept risks involved in the purchase and reselling of goods
- Local falls in demand
- Currency uctuations
- May provide after-sales service
Licensing
• Company has unique product or process (patented) that overseas company wants to
manufacture
• Good way of entering in more distant markets
• Di cult to export nished goods
• Licensing avoids expropriation
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Licensing considerations
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20. Direct Channel
Direct Selling:
Subsidiary Companies:
Joint Ventures:
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21. Sales Funnel
Customer Journey
De nition (Broschart 2011, Lehning et al. 2015): The Customer Journey is the "journey" of
a user or potential customer from the initial need to problem solving via various
interaction and contact points (Customer touchpoints) with an o er, a sales channel, a
brand or a company
Funnels and Leads
A marketing funnel helps you generate leads
and make more sales. A lead is someone who is
interested in a product or service you o er, but you
do not know what for or why. With leads, you
probably do not have any information other than
maybe the name and email address. This is a
simple lead, but they are also called sales
quali ed leads - an SQL.
A prospect is a potential client who has shown interest in your goods or services.
The typical journey an individual goes on to transition from being a lead to a prospect is
that the lead is nurtured down the sale funnel through a communication back from the
business to entice them to respond further.
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The six sales funnel stages are:
1. Awareness
• Making prospects aware of your company, products, and brand.
• Introductory phase where they are learning who you are, what you do, and how you are
unique.
• This stage corresponds to the prospecting and lead generation stage of your pipeline
stages.
2. Discovery
• Where your prospect’s interest is piqued. They are curious about your company and
products and want to learn more.
• You are sharing valuable educational content related to your prospect’s problem or
need.
• This stage occurs while you are qualifying your prospect, conducting initial meetings,
and de ning their needs.
3. Evaluation
• Your prospect is evaluating you, your company, and your products and services.
• They are also looking at other options to see how you compare to them.
• You have probably sent them an initial quote or proposal.
4. Intent
• Your prospect has made a decision to buy from you, but the deal hasn’t closed yet.
• They plan to buy but want to make sure your quote or proposal encompass everything
they need at a price they are willing to pay.
• Here, you are negotiating terms or nalizing your proposal.
5. Purchase
• At this stage, the deal is closed and your prospect is now your new customer.
• This is the honeymoon phase and presents the best opportunity to ask for referrals.
• The corresponding pipeline stage is closing the deal.
6. Loyalty
• If your product or service is delivered over time, you have an opportunity to identify
other needs that your products can meet and make additional sales.
• If your product is more of a one-time purchase, you can create a strategy to continue
building the relationship with your new customer so they keep you top of mind and buy
from you in the future.
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Brand Persona:
To communicate e ectively, you have to identify the
elements that in uence your target customers and
focus on leveraging them. What do they like? What
motivates and attracts them? What do they like about
your brand?
De ne your brand persona:
A brand persona is the personality of your business in
which you will deliver customer experiences
• It will be strongly in uenced by the insights you
manage to gather about your target customers.
• What tone of voice will suit this audience? What type
of language will have the greatest e ect? What images will attract their attention
CRM
CRM (Customer relationship Management) will enable you to communicate e ectively
with customers and prospects, having essential information at your ngertips when you
need it.
• Sales, marketing and customer service departments will nd themselves in sync as they
will all have access to identical
information.
• It will become the single point of entry for all client related information.
• Salesforce study showed that the use of a CRM system can increase sales by up to
29%, sales forecast accuracy by 42%, and productivity by 34%.
22. MEDDIC Sales Method
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23. Ethics & Corporate Responsibility
Corporate governance
Corporate governance is the system by which companies are directed and controlled.
Boards of directors are responsible for the governance of their companies. The
shareholders’ role in governance is to appoint the directors and the auditors and to satisfy
themselves that an appropriate governance structure is in place.
Globalization
Advantages:
• Allows developing countries to catch up to industrialized nations through increased
manufacturing, diversi cation, economic expansion, and improvements in standards of
living.
• Outsourcing by companies brings jobs and technology to developing countries. Trade
initiatives increase cross-border trading by removing supply-side and trade- related
constraints.
• Globalization has advanced social justice on an international scale, and advocates
report that it has focused attention on human rights worldwide.
Disadvantages:
• One clear result of globalization is that an economic downturn in one country can create
a domino e ect through its trade partners.
• Concentration of wealth and power in the hands of a small corporate elite which can
gobble up smaller competitors around the globe.
• Disappearance of entire industries to new locations abroad, a squeeze on the middle
class.
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Sales & Operations
Aligns di erent teams around a common plan:
• Balances supply and demand
• Identi es discrepancies between planning numbers
• Improves sales forecasts
• Reduces the long-term impact of unexpected events
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24. International Context of CSR
Can a corporation have social responsibilities?
Nobel Prize winner Milton Friedman’s classic article is “The social responsibility of
business is to increase its pro ts” (1970). Friedman vigorously argued against the notion
of social responsibilities for corporations based on three main arguments:
1. Only human beings have a moral responsibility for their actions
2. It is managers’ responsibility to act solely in the interests of shareholders
3. Social issues and problems are the proper province of the state rather than corporate
managers
CSR
De nition of Corporate social responsibility:
the attempt by companies to meet the economic, legal, ethical, and philanthropic
demands of a given society at a particular point in time.
Corporate Social Responsibility is a management concept for corporate social
responsibility, which is based on the principle of sustainability and covers the areas of
economy, ecology and social a airs. The social responsibility to which a company is
subject and the areas in which it is involved depend on the speci cs of the company, the
industry and the markets it operates in.
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CSR Global Context
Di erent types of responsibility:
- Economic responsibility (USA focus on shareholders; France has focus on employee
responsibility, India has tradition of investment in the local community)
- Legal responsibility (State seen in Europe as key enforcer of rules; elsewhere
government seen with more skepticism)
- Ethical responsibility (Wide range of local ethical values & preferences: Expectations
vary)
- Philantrophic responsibility (Europe tends to compel giving via
legal framework (taxes); elsewhere (e.g., USA, India, China), companies are expected to
share their wealth (Bill Gates & Microsoft).
Implementing Ethics Internationally
10 major principles that are recognized by international declarations and agreements that
have been developed by the three main organizations, the UN, the ILO (International
Labor Org.) and the OECD (Organization for Economic Co-operation and Development).
UN Global Compact which covers four main areas:
• Human rights
• Labor standards
• Environment
• Anti-corruption.
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Successful CSR
Aligning organizational culture with Supply Chain
- Industry collaboration (Organizations are demanding more from their suppliers;
Traceability and transparency are key requirements. Companies sharing their big
picture vision with their suppliers, and their role in the long- term strategy, will get more
from their partners.)
- Codes of Conduct and Audits (Sharing information when it comes to supplier audits)
- Certi ed B Corporations (B Lab certi cation or B Corp certi cation - a global
nonpro t organization; new kind of business that balances purpose and pro t; They are
legally required to consider the impact of their decisions on their workers, customers,
suppliers, community, and the environment, as a force for good)
- Collaboration with NGO’s (NGOs can help and guide organizations on environmental
or ethical issues)
- Standards & Certi cations
- Fair Trade
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