International Marketing Concepts
advertisement
International Marketing Session objectives Global Marketing Mix Planning, Organizing & NPD Global marketing game International marketing task Global vs. International Perspective Benefits of global orientation New product development for global markets International planning and organizing Product component model Dr. Paurav Shukla 3 Top 10 US players in the global game International Marketing Task Model Foreign environment (uncontrollable) Political/legal forces Cultural forces Domestic environment (uncontrollable) Political/ legal forces (controllable) Price Promotion Geography and Infrastructure 4 International Marketing Concepts EPRG Schema Domestic Market Extension (Ethnocentric) Multi-Domestic Market (Polycentric) Global Marketing (Regio/Geocentric) Environmental uncontrollables country market A Product Channels of distribution Economic climate 7 Level of Technology Environmental uncontrollables country market B Environmental uncontrollables country market C Source: Adopted from Cateora and Graham, International marketing, 11th Ed., 2002, p.9 5 Benefits of Global Orientation Economies of Scale in Production & Marketing Transfer of Experience and Know-How across Countries Uniform Global Image Control and Coordination of Operations 6 Dr. Paurav Shukla Competitive structure Competitive Forces Structure of distribution Sources: Adapted from Brian Zajac, “Global Giants,” Forbes, July 24, 2000 and Wal-Mart Stores Annual Report 2003 Concept Economic forces 7 International Marketing Secondary Data in Global Markets International Planning Process Data from sources that already exist - they have not Information derived from each phase, market research, and evaluation of program performance been gathered for the specific research project Therefore: Minimal effort and cost Possible problems Phase 1 Preliminary analysis and screening: Matching company/country needs accuracy availability timeliness costs and comparability of data Environmental uncontrollables, company character, and screening criteria Phase 2 Adapting the marketing mix to target markets Phase 3 Developing the marketing plan Phase 4 Implementation and control Matching mix requirements Marketing plan development Implementation, evaluation, and control 8 Ties that Bind: Japanese Keiretsu and Toyota International Planning Process Phase 1 Phase 2 Company Character z z z z z z z Philosophy Objectives Resources Management style Organization Financial limitations Management and marketing skills z Products z Other Home Country Constraints z z z z Political Legal Economic Other Host Country(s) Constraints z z z z z z z Phase 3 Product z z z z z z z Phase 4 z Situation analysis z Objectives and goals z Strategy and tactics z Budgets z Action programs Adaptation Brand name Features Packaging Service Warranty Style Price z Credit z Discounts z Objectives z Standards z Assign responsibility z Measure performance z Correct for error Promotion z z z z z 9 Advertising Personal selling Media Message Sales promotion Economic Distribution Political/legal z Logistics Competitive z Channels Level of technology Culture Structures of distribution Geography Toyota has a typical keiretsu family with financial ties to its most important suppliers. Some of those companies, with the percentage of each that Toyota owns: Lighting Rubber Disc Brakes Transmissions, clutches, brakes Clocks Electronics Seat belts, switches Steel Upholstery material Door sashes, molding Painting Mufflers Koito Mfg. Toyoda Gosel Akebona Aisin Seiki Jeco Nippondenso Tokai Rika Aichi Steel Works Kyowa Leather Shiroki Trinity Futaba Industrial 19.0 % 41.4 13.9 22.0 34.0 23.6 28.2 21.0 33.5 13.2 30.2 13.2 SOURCE: Adapted from “Japan: All in the Family,” Newsweek, June 10, 1991, p 38. 10 Ford’s Keiretsu Ford’s Keiretsu Financial Services VEHICLE ASSEMBLY Company Country Mazda Kia Motors Aston Martin Lagonda Autolatina Iveco Ford Truck Japan Korea Britain Brazil-Argentina Britain Percent Equity Through seven wholly owned units, Ford extends consumer and commercial credit. It issues car loans, mortgages, and credit cards, does industrial leases and finances dealer purchases of cars. 25% 10% 75% 49% 48% Marketing Owns 49 percent of Hertz. Hertz and other car rentals are among Ford’s largest customers. PARTS PRODUCTION Company Country Cummins U.S. Excel Industries U.S. Decoma International Canada Component Research and Development Percent Equity Engines Windows Body Parts, Wheels Ford belongs to eight consortiums that do research into environmental issues, better engineering techniques, materials, electric car batteries, and the Chrysler and General Motors “precompetitive research” on batteries and materials. 10% 40 49 SOURCE: Adapted from “Learning from Japan,” Business Week, January 27, 1992, p. 55. SOURCE: Adapted from “Learning from Japan,” Business Week, January 27, 1992, p. 55. 12 Dr. Paurav Shukla 11 13 International Marketing Benetton Europe’s TV alliance It has achieved its retail distribution through an unusual arrangement with ‘agents’, first in Italy and other European countries, and now in emerging economies. According to one of the company’s marketing executives, the term ‘franchising’ in describing Benetton is a misnomer. Agents of the company are assigned vast territories, largely through verbal agreements, in which they try to develop Benetton retail outlets. They find smaller investors and store operators exhibiting a ‘Benetton mentality’ to form individual partnerships. An individual agent might supervise and hold an interest in a number of stores. In 1982, Benetton conducted business with 35 agents. Store owners are neither required to pay Benetton a fee nor a royalty for using its name. They are required to carry only Benetton merchandise, maintain a minimum sales level (equivalent to orders for about 3500 garments per year), adhere to suggested mark-ups of about 80 percent above cost and pay for their orders within 90 days. Source: ARC chart, The European, 10-16 August, 1998, p. 10. 14 Product Development Process United States and Japan Product Component Model SUPPORT SERVICES COMPONENT PACKAGING COMPONENT Repair and maintenance Trademark CORE COMPONENT Product platform Installation Brand name Deliveries Price UNITED STATES JAPAN Market Research Market Research Product Characteristics Product Characteristics Design Planned selling price less desired profit Engineering Quality TARGET COST Warranty Supplier Pricing Design features Functional features Instructions 15 Package Design Styling Other related services If cost too high return to design phase Legal 16 Would They Sell in the UK? ¾ Alu-Fanny: French Foil wrap ¾ Atum Bom: Portuguese tuna ¾ Crapsy Fruit: French cereal ¾ Kack: Danish sweets ¾ Kum Onit: German pencil sharpeners ¾ Mukk: Italian yogurt ¾ ¾ Plopp: Scandinavian chocolate Pocari Sweat: Japanese sport drink ¾ Poo: Argentine curry powder ¾ Pschitt: French lemonade 18 Dr. Paurav Shukla Engineering Supplier Price Cost Spare parts Legal Legal Target costs for each component forces marketers, designers, and engineers from all departments and suppliers to negotiate tradeoffs Manufacturing Manufacturing Periodic cost reduction Continuous Cost Reduction SOURCE: Adapted from Ford S.Worthy, “Japan’s Smart Secret Weapon,” Fortune, August 12, 1991, p.73. 17
