introduction IM

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CHAPTER 1.MARKETING AND
INTERNATIONAL MARKETING
1. INTRODUCTION
2. THE NATURE OF INTERNATIONAL
MARKETING
3. EXPORT MARKETING PLANNING
4. GOALS OF INDIVIDUAL BUSINESS
UNITS
1. INTRODUCTION
• Internationalization and global marketer
Global Marketing Integration
International Marketing
• Total world trade volume in goods and
services is around $8 trillion.
• The world’s five exporting countries are
the United States ($700 billion), Germany
($560 billion), Japan ($390 billion), France
($320 billion), and Britain ($260 billion),
collectively accounting for 42 percent of
global trade.
International Marketing - Intro
• The Triad Regions (North America, Western Europe, and
Japan) of the world collectively produce more than 80%
of world GDP.
• In the next ten to twenty years, Emerging Markets – the
Chinese Economic Area (CEA: including China, Hong
Kong, region, and Taiwan), India, South Korea, Mexico,
Brazil, Argentina, South Africa, Poland, Turkey, and the
Association of Southeast Asian Nations (ASEAN:
including Indonesia, Brunei, Malaysia, Singapore,
Thailand, and the Philippines, and Vietnam) will provide
many opportunities in global business.
2.THE NATURE OF INTERNATIONAL
MARKETING
• What is international marketing?
Export marketing
Foreign marketing
Multinational marketing
Global marketing
• International marketing
Export marketing
The international marketing dimension involves marketing
across national borders. This is different from domestic
marketing because the mere fact of crossing the border
confronts with new economic, political, and legal
constraints, such as floating exchange rates, boycotts,
and international law. These constraints will usually force
modification of the firm’s marketing program as it
crosses national boundaries.
Foreign marketing
The foreign marketing dimension involves marketing within
foreign countries, as a U.S firm markets in Belgium or
Brazil. Such marketing is unlike domestic marketing
because that firm faces different kinds of competition,
consumer behavior, distribution channels, and
promotional possibilities in Belgium or Brazil from what it
is familiar with at home. The tasks is further complicated
because each country has an individual idiosyncratic
marketing environment.
Multinational marketing
The multinational marketing dimension emphasizes the
coordination and integration of the firm’s marketing in
many diverse foreign environments. The unique nature
of each foreign market fragments the international
marketing effort and brings diseconomies of scale. The
international marketer must plan and control carefully to
maximize the integration and synergy in the global
marketing program while minimizing the costs of
adapting to each foreign market.
International Marketing Defined
International marketing: the performance
of business activities that direct the flow of
a company’s goods and services to
consumers or users in more than one
nation for a profit.
The International
Marketing Task
Foreign environment
(uncontrollable)
1
Political/legal
forces
Economic
forces
Domestic environment
(uncontrollable)
2
7
Cultural
forces
Political/
legal
forces
(controllable)
Price
Competitive Competitive
Forces
structure
Product
3
6
Promotion
Geography
and
Infrastructure
Country market A
environment
(uncontrollable)
Channels of
distribution
Level of
Technology
Economic climate
5
Country market C
environment
(uncontrollable)
Country market B
environment
(uncontrollable)
4
Structure of
distribution
Irwin/McGraw-Hill
Copyright©2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Evolution of Marketing
• Domestic Marketing - ethnocentric
• Export Marketing- ethnocentric
• International Marketing - polycentric or
multidomestic
• Multinational Marketing- regiocentric
• Global Marketing - geocentric
Domestic
export
marketing
international
marketing
multinational
global
The main steps in the marketing
management process
R – STP – MM – I – C
R= research
STP= Segmentation, Targeting, Positioning
MM= Marketing-mix
I= Implementation
C=control
MARKETING-MIX
4 Ps
4Cs
1.Product
Customer value
2. Price
Cost to the customer
3. Place
Convenience
4. Promotion
Communication
------------------------------------------------------------5. Probe
Customer, consumer
6. Phacilitate (Facilitate)
Consumption
services
7. Plan
Curve
8. People
Count
The activities in international marketing
include:
1. Detailed analysis of current markets and
potential markets;
2. Planning and development of products
that the consumers want, clearly defined
in suitable package;
3. Distribution of products through channels
which provide the services or
conveniences demanded by purchases;
The activities in international marketing
include:
4. Promotion of products to inform and
educate consumers about products or
services;
5. Setting of prices which reflect both a
reasonable value (or utility ) of product to
consumers; and
6. Technical and non-technical services
given to the consumers-both before and
after a sale is made.
3.EXPORT MARKETING PLANNING
3.1. Identifying and measuring market
opportunity
3.2. Developing an export marketing
strategy
3.3. Making export strategy operational
3.1. Identifying and measuring market
opportunity
a)
b)
c)
d)
Preliminary screening
Estimating market potentials
Estimating sales potentials
Segmenting the market
3.2. Developing an export marketing
strategy
a) Setting export objectives
b) Planning the marketing mix
Product, price, channels, promotion.
3.3. Making export strategy operational
a)
b)
c)
d)
e)
f)
g)
h)
i)
Sales forecasts
Sales budget
Sales quotas
Production schedules
Inventory control
Labor requirements
Promotional budgets
Financial budget
Profit budget
The Process
Stages in the Marketing Process
Analysis:
• Collect data from sources- primary and secondary, internal and external,
formal and informal. Screen data for opportunities to employ company
resources for competitive advantage.
Planning:
• Develop a marketing plan which includes a situation analysis, goals and
objectives, long-term strategies and short-term tactics, cost and profit
estimates, and anticipated changes in organizational structure.
Implementation:
• Take actions to put the plan into action. Adjust implementation activities
to account for environmental changes in market conditions.
Control:
• Use annual planning (sales to forecast), profitability, and efficiency
controls to monitor the plan’s successes and failures.
4. GOALS OF INDIVIDUAL BUSINESS
UNITS
4.1 basis goals
Profit or nonprofit( volume of sales, market share, serving customer…).
4.2 specific reasons
• Managerial urge
• Unique product/technology competence
• Risk diversification
• Foreign market opportunities
• Change agents
• Economics of scale
• Foreign marketing advantages
• Extend sales of seasonal product
• Excess capacity of resources
GOALS OF INDIVIDUAL BUSINESS UNITS
4.2 specific reasons
• Unsolicited foreign orders
• Small domestic market
• Stagnant or declining home market
• Resources
• Multinational, global, world companies
• Other goals
CHAPTER 2.
THE INTERNATIONAL ENVIRONMENT
1. ECONOMIC AND FINANCIAL
FACTORS
2. SOCIO-CULTURAL ENVIRONMENT
3. POLITICAL/LEGAL ENVIRONMENT
4. COMPETITION
ECONOMIC AND FINANCIAL FACTORS
1. Population, Income (Per capita income, GNP)
2. Convertibility or possibility of effective utilization of
resources; financial stability.
3. Banking facilities available and nature of credit facilities
offered, short medium and long-term (conditions, terms,
interest rates. etc.)
a) Domestic
b) foreign
c) Governmental or other lending institutions and
facilities.
ECONOMIC AND FINANCIAL FACTORS
4. Availability of local and accounting
services.
5. Currency, exchange rates and controls
6. Capital repatriation and remittance of
profits, licensing and other payments.
7. Availabilities of insurance
8. Situation of the Balance of Payments
9. Communications and transports
10. Urbanization
ECONOMIC AND FINANCIAL FACTORS
11. Market prospect
+ Estimated size, trends, and potential of
market in the country
+ Export markets and estimated size
+ Sources of market information
+ System of distribution of good
12. Product and product modification
2.SOCIO-CULTURAL ENVIRONMENT
1. The elements of culture
Language
Nonverbal language
Religion
Values and attitudes
Manners and customs
Material elements
Aesthetics
Education
Social institutions
Family
2.SOCIO-CULTURAL ENVIRONMENT
2. Adapting to cultural differences
Some companies have made special
efforts to adapt their products or services
to various cultural environments.
Cultural factors
+ Never touch the head of a Thai or pass and object over it. The head
is considered sacred in Thailand
+ Avoid using triangular shapes in Hong Kong, Korea, and Taiwan.
+ The number 7 is considered bad luck in Kenya and good luck in the
Czech republic and Magical connotation in Benin, Africa.
+ The number 10 is bad luck in Korea
+ The number 4 means death in China
+ Red represents death in many African countries.
+ Red is a positive color in Denmark
Cultural factors
+ In Canada information on products is often provided in
English and French.
+ Swiss chocolate manufactures know that US customers
believe Swiss chocolate product are of high quality
(value), so that companies emphasize their Swiss origin
and thus generate high sales. (attitude)
In short, by being aware of the value and attitudes of the
people in the culture, a business firm effectively position
its product.
Cultural factors
Education influences many aspects of
culture. Education also helps to provide
infrastructure needed for developing
managerial talent.
For example, educationally advanced
countries like England, France… are more
likely to be markets for computers and
other high –tech equipment than poor
countries.
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