International Marketing
© 2004 Mark H. Hansen
International Marketing
Why Expand Internationally?
• limited domestic market opportunities
• achieve economies of scale/global volumes
• access factors of production economically
• leverage the competencies of the firm
© 2004 Mark H. Hansen
International Marketing
Successful international marketing depends on:
• the product
• is the product a ‘standard’ product, or
• will the product require customization
• the message
• can the message be the same, or
• must the message be altered
© 2004 Mark H. Hansen
International Marketing
Successful international marketing depends on:
• the foreign culture
• the foreign infrastructure
• the foreign government
• the foreign economic conditions
© 2004 Mark H. Hansen
International Marketing
Standardization vs. Customization
• depends on the product
• depends on needs (tastes and preferences)
• the choice is a continuum, not either/or
• this choice influences international strategy
and mode of entry decisions
© 2004 Mark H. Hansen
International Marketing
International Expansion
Deterrents
Motivations
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market size
stabilize risk
profit potential
unsolicited orders
proximity
excess capacity
scale economies
smoothing cycles
© 2004 Mark H. Hansen
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red tape
trade barriers
transportation
human resources
governments
slow payments
culture barriers
language barriers
International Marketing
The International Expansion Choice
Corporate Level Decision
• Is this a business we should be in?
Business Level Decision
• stakeholder expectations
• situation analysis
• positioning decisions
© 2004 Mark H. Hansen
• mode of entry
International Marketing
The International Expansion Choice
Functional Level Analysis & Decisions
• Do we have the necessary resources to carry
out the decisions taken at the corporate
and business levels?
© 2004 Mark H. Hansen
International Marketing
The International Expansion Choice
Functional Level Analysis & Decisions
• Marketing Mix Decisions
• Product/Promotion
• one product, one message, worldwide
• product extension, promotion adaptation
• product adaptation, promotion extension
• dual adaptation
• product invention
© 2004 Mark H. Hansen
International Marketing
The International Expansion Choice
Functional Level Analysis & Decisions
• Marketing Mix Decisions
• Pricing
• relative to prices in other countries
• what the market will bear
• dumping
© 2004 Mark H. Hansen
International Marketing
The International Expansion Choice
Functional Level Analysis & Decisions
• Marketing Mix Decisions
• Distribution & Logistics
• infrastructure differences (refrigeration)
• control issues
© 2004 Mark H. Hansen
International Marketing
International Expansion Strategies
Global Strategy
• high level of standardization
• highly centralized
Multidomestic Strategy
• high level of customization
• highly decentralized
© 2004 Mark H. Hansen
International Marketing
Modes of Entry
• Exporting
• Licensing
• Joint Ventures
• Direct Investment (Wholly Owned Subsidiary)
© 2004 Mark H. Hansen
International Marketing
Modes of Entry
In general, there is a cost/control tradeoff in choosing
which mode of entry to use.
Cost
Wholly Owned
Subsidiary
High
Acquisition
Joint Venture
Exporting
Franchising
Licensing
Low
High
© 2004 Mark H. Hansen
Control
International Marketing
Cultural Differences
• Language
• Colors
• Customs
• Religious Beliefs
• Values
© 2004 Mark H. Hansen
International Marketing
Government / Political Issues
• Tariffs
• Trading Blocks
• Expropriation
• Commercial Centers
• Monetary Policy
© 2004 Mark H. Hansen