Chapter 6

Chapter 11
What is International
Chapter 11 - Overview
 11.1
International Marketing
 11.2 Global Marketing
 11.3 International Marketing Mix
 Trading Partners - Spain
11.1 International Marketing
 All activities involved in planning, pricing,
distributing and selling product or service
 Marketing Mix - consists of 4 P’s and 2 C’s
 4Ps – Product, Price, Place, Promotion
 2Cs - Consumer and Competition
 Designed to fulfill human wants and needs
 Going international creates new challenges
for the marketing mix
The Marketing Mix (4 P’s)
Promotion Mix
Product Mix
Pricing Mix
Place Mix (Distribution)
Marketing Mix (4 P’s & 2 C’s)
Promotion Mix
Product Mix
Pricing Mix
Place Mix (Distribution)
Inventory Management
Marketing Activities
Physical Distribution
Product Development
Definition of a Brand
 Name,
term, sign, symbol or design
or a combination intended to identify
the goods or services
 Differentiate from their competitors
 Branding is abstract – the product’s
‘personality’ or image
Target Market
 Target
Market: All marketing efforts
directed at a specific group of
consumers that the marketer wants
to attract (and ultimately sell their
product or service to)
 Companies cannot afford to sell to
‘everyone’ and most products are not
applicable to ‘everyone’
 For some products, the market is
everyone, then it is called the
Aggregate Market
Marketing Strategies
Centralized or Decentralized
Push or Pull
Brand Acquisition or Development
Centralized Strategy
Production & sale from one central
location - export to other markets
 ‘Think local – act global’
 Several marketing divisions – focus on
particular export areas
 Common marketing themes to make
international marketing campaign
 Still considers local cultural differences
 Ex: Coca Cola – global brand, consistent
packaging / product features / logo –
2008 #1 Global Brand – most recognized
Advantages of Centralized
Brand Building (global brands) – create
international brand equity
– making a brand recognizable throughout the
– giving it a positive image
– consistent package, promotion & product
– Brand IQ Quiz
Synergy – (1+1=3)
– extra positive benefits from larger marketing
group vs. smaller local groups working alone
Cost Benefit – Economy of Scale – avoids
duplication (R&D, advertising) of efforts –
centralized expert focus saves time and
money – lower cost / higher profits
Advantages / Disadvantages of Centralized
 Best
for small businesses – less
expensive than decentralized
 Also good for large businesses – e.g.
Coca-Cola, McDonalds
 Difficult to be only centralized –
always need a local approach – e.g.
Coca-Cola and McDonalds sell unique
local brands in different markets
 Companies often use a mix of two
approaches to be more successful
Centralized Organization
Coca Cola
Head Office
South America
Asia Pacific
(Asia / Australia)
North America
European Union
Decentralized Strategy
Think Global – Act Local
 Local facilities – local decisions
 ‘Glocal’ – global firm / local focus
 Advantages
– Proximity (closeness) to markets
 Targeting
& better access to smaller markets
 Transportation savings
– Flexibility – spot trends / competition quickly
– Culturally sensitive – more knowledge of local
customs and preferences
Centralized & Decentralized
Marketing Strategy
 Some
MNC’s are so large that a
combined strategy works best
– For example Coca-Cola company p.339
– Uses both centralized and decentralized
strategies – depends on brand
– Flagship (main / most famous) CocaCola brand is centralized
– Other brands (Fanta – Europe, Kuat –
Brazil) are decentralized
Marketing Strategies
Distribution Strategies
Focus on the best way to deliver a
product or service to the target market
3 ways to achieve distribution goals
Push Strategy
Pull Strategy
Combination of both
Push and Pull Strategy
Push and Pull Strategies
Push Strategy
 Marketers sell
products through
channels of
distribution, not
the end user.
 Consumer will see
product in-stores
and want it
Pull Strategy
 Marketer targets
the consumer
 Convinces
consumer they
need product
 Global Branding is
very important
Marketing Strategies
Push Strategy
Push the product or service to the
Push strategy sells the product to
retailers, wholesalers or importers and
not directly to the end consumer
Reason: if the product is out there where
consumers can see it, they will buy it.
Marketing Strategies
Pull Strategy
Pull or attract the consumer to the product or
This is what most people think of when they
think of marketing
Attempts to increase the consumer demand
directly instead of relying on retailers to sell the
product to consumers
Manufacturers and importers try to convince
consumers that they need the product and
should look for the product when they are
Marketing Strategies
Combination of Push and Pull
Use combination push and pull
Pull strategy is difficult to use alone as it
requires distribution partners
Push strategy needs no partners,
requires consumer awareness
The push strategy needs to combine with
the pull strategy to optimize
effectiveness; however, the push
strategy can stand alone
Marketing Strategies
Acquisition Strategy
Int’l company purchases an existing company
Expensive, controls competition, inherit workforce,
management & goodwill
Obtain rights to distribute locally
Manufacturing and distribution rights:
Pepsi purchase license
to make Brisk Ice Tea in USA from parent company Unilever
Exclusive distribution rights:
Dealers attend trade shows looking
for products to exclusively sell in their markets.
Brand Development Strategy
– Set up a foreign subsidiary to develop a
product to compete in the local market
 Very
expensive, complex, only large scale businesses
can afford this option
Global Marketing
 Successful
companies deliver
products to consumers in different
countries that they will want to buy
 To be successful the global marketer
– Economic Marketing Factors,
– Consumer Profiles and
– International Marketing Research
– Franchising
Global Marketing
Economic Marketing Factors
The country/market must have an
economy that provides an income to its
Marketers consider wages and prices
Market Research helps decide whether
 Should
sell only basic, essential good
 Should consider a new market
 Can create a marketing campaign that
encourages consumer spend their
discretionary income
Consumer Profiles
A method of understanding the consumer
Demographic – measurable characteristics
 Age
 Gender
 Family Lifestyle
Purchasing Profile- who purchase, when where
& how
Motivational Profile - explain consumer
 Thorndyke’s Pleasure/Plain Theory
 Maslow’s Hierarchy of Needs
 Rational/Emotional Theory
 arranged in a pyramid shape
 the most basic need is at the
 once fulfilled , the next-higher level
becomes more important
Self-actualization Needs
The need to fulfill ourselves
Esteem Needs
The need to be respected by others
Social Needs
The need to feel that we are accepted by others.
Safety Needs
The need to be protected from physical danger
Physical Needs
The basic needs for survival
Abraham Maslow suggested a theory of human motivation, where humans
Are motivated to satisfy their needs according to the hierarchy. People are
Motivated to satisfy their basic physical and safety needs first, them move
Towards the higher levels. Maslow’s theory has been useful to marketers
And advertisers.
The first four levels are deficiency needs:
Physiological: hunger, thirst, shelter,
Safety/Security: freedom from
danger, adequate financial support
Relationships / Affiliation:
belonging to teams and clubs; having
friends, love relationships, family ties
Esteem: celebrating personal
achievement; being successful and
admired by others
The fifth level is a growth need:
Self-Actualization: motivated by a
desire to know, understand and explore
Aesthetic: motivated by a desire for
symmetry, order and beauty
 motivated by a desire to find selffulfillment and realize personal potential
 Transcendence: motivated by a desire to
help others find self-fulfillment and realize
their potential
THORNDIKE’S – Pleasure / Pain Theory
 Consumers are motivated to buy products that
produce positive events (pleasure) and to avoid
products that produce negative effects (pain)
 Food, movies, entertainment = pleasure
 Medicine, insurance, safety items = avoid pain
 Pain - complex, irritating, not acceptable
 Pleasure - product meets expectations
 Most decisions have both positive & negative
events – e.g. buying holiday gifts at the mall
– pleasure from giving gifts, product works well
– crowded store, lineups & parking problems = pain
Mall has extended hours, parking attendants,
service staff, self-check out = reduce pain
Rational Emotional Theory
 Rational
= practical, logical, thinking
 Emotional = not logical, impulsive,
reactive, pleasure focus, sentimental
 Needs – rational – food, water,
shelter, survival items
 Wants – emotional – luxury or
optional goods – e.g. large screen TV
Rational / Emotional
 Companies
use both rational and
emotional appeals.
 E.g. Volvo cars – high quality
– Known for reliability – low maintenance
costs = rational appeal
– Known for safety – children will be safe
in an accident – ‘side impact protection’
emotional appeal – child in a car seat
shown in T.V. ad – appeals to emotions
Global Marketing
International Marketing Research
 Before the marketer begins to organize the
marketing mix, they should ensure the data is
– Marketing Research is the collection, analyzing,
and interpreting of data to make marketing
– Secondary Data – collected by others
 Internet
Sources, Periodicals and Publications, Credible
Organizations found in the country
– Primary Data – collected directly from the
 Surveys,
tests marketing, interviews, data mining &
focus groups, local marketing research firms
International Marketing Mix
 The
introduction of a new product to
market is called a product launch
where all marketing mix factors are
coordinated for the marketing
International Marketing Mix
– Meets needs/wants of consumers
– Few competitors
– Product features
 Differentiation-what
sets product apart
 Marketing Opportunity Analysis – gaps in
the international marketplace
 Branding – brand recognition and brand
 Packaging and Labelling – protection, silent
salesperson, meet country rules and
International Marketing Mix
Place (Distribution)
Industrial Sales Representatives
– Personal, very knowledgeable, power to make decisions
– Trade missions help develop contacts
Retail Marketing
– Department Stores to open air markets
Specialty Channels
Vending Machines
TV Sales
International Marketing Mix
 Price
– Competitive for the market
– Encourage sales, cover costs and make
a profit
– Economies of scale – more made and
sold the less expensive products
International Marketing Mix
 Promotion
– Creating an effective sales message
– Selecting an advertising medium that
will target the audience
– Foreign advertising requires foreign
– Ensure that promotional activities are
managed correctly
International Marketing Plan
Before marketers attempt to market their
products outside their own country it is essential
to develop a solid international marketing plan.
Entering new countries changes the marketing
mix and a new international marketing plan is
Complete International Company Profile p.356
“Cinnaroll Bakeries” answer Q’s 1-2
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