ch1_2
WHAT IS MARKETING?
Marketing Involves:
• Focusing on the needs and wants of customers
• Identifying the best method of satisfying those needs and wants
• Orienting the company towards the process of providing that satisfaction
• Meeting organisational objectives
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WHAT IS INTERNATIONAL
MARKETING?
Different Levels of International Marketing
• Export marketing
• International marketing
• Global marketing management ch1_3
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ch1_4
ENVIRONMENTAL INFLUENCES ON
INTERNATIONAL MARKETING
Socio/Cultural
Language
Religion
Aesthetics
Values and attributes
Social organisation
Material culture
Legal
Local domestic laws
International law
Home domestic law
Environmental
Influences on
International
Marketing
Political
Operational restrictions
Discriminatory restrictions
Physical actions
Economic
Developed economies
Emerging economies
Less developed economies
Currency movements
Technological
Satellite Communications
ISDN
Internet
WWW
The Electronic
Superhighway
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THE CHALLENGES OF THE INTERNATIONAL
MARKETING ENVIRONMENT #1 ch1_12




Culture
 Often diverse and multicultural
Markets
 Widespread and sometimes fragmented
Data
 Difficult to obtain and sometimes expensive
Politics
 Regimes vary in stability, political risk becomes an important variable
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THE CHALLENGES OF THE INTERNATIONAL
MARKETING ENVIRONMENT #2 ch1_13
 Governments
 Can be a strong influence in regulating importers and foreign business ventures
 Competition
 Multinationals can distort competitive structure of markets
 Economies
 Varying levels of development
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THE CHALLENGES OF THE INTERNATIONAL
MARKETING ENVIRONMENT #3 ch1_14
 Finance
 Many differing finance systems and regulatory bodies
 Currency
 Varying and unstable, strong likelihood of transaction risk
 Business
 Diverse rules, culturally influenced
 Control
 Difficult to control and co-ordinate across markets
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ch1_16
Feedback & reassess continually
THE INTERNATIONAL
MARKETING STRATEGY PROCESS
Understand the environmental influences on a firm’s international markets
Chapter
Part One:
Analysis
1,2,3
Segment international markets, identify & analyse opportunities
4.
Develop appropriate international marketing strategies, planning & processes
Part Two:
Strategy
Development
5,6,7
Decide marketing entry strategies 8.
Build added value through effective marketing mix strategies
Part Three:
Implementation
9,10,11,12
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ch2_6
COMPARATIVE ADVANTAGE

 sustained period of investment
 lower labour cost
 proximity to raw materials
 subsidies to help native industries
 building expertise in certain key areas

(Porter, 1990)
 factor conditions
 demand conditions
 related and supporting industries
 firm strategy, structure and rivalry
Source: Porter (1990) The Competitive Advantage of Nations
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ch2_7
Tariff and Non-Tariff Barriers to Trade
Specific country
Market entry barriers
Tariffs
Purpose
Time length
Import restraints
Tariff rates
Production, distribution and consumption
Government participation in trade
Customs and entry procedures
Product requirements
Nontariff barriers
Quotas
Financial control
Other policies and requirements
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ch2_9
MAIN TYPES OF TRADE ASSOCIATIONS
Type
Economic co-operation
Bi-lateral or multi-lateral trade treaty
Sectoral free trade agreement
Trade preference agreement
Free trade area (or agreement)
Customs union
Common market
Economic union
Political
Common external tariff
No
No
No
No
No
Yes
Yes
Yes
Yes
Free movement of capital and people
No
No
No
No
No
Possibly
Yes
Yes
Yes
Example
Canada - EC framework agreement, APEC
The Peru, Chile accord
The multi-fibre agreement
South African Development Cone (SADC)
ASEAN NAFTA Mercosur
Economic Community of West African States
European Single Market
European Monetary Union
Would resemble federal states (e.g. US,
Canada, Germany)
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FORMS OF MARKET AGREEMENT ch2_10
Free trade area
Customs union
Common market
Economic union
Political union
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ch2_11
REGIONAL TRADING AREAS OF THE
WORLD 1998
NAFTA
Canada
Mexico
United States
Australia
Brunei
Canada
Chile
China
Hong Kong
Indonesia
Japan
Malaysia
APEC
Mexico
New Zealand
P.N.G.
Philippines
Singapore
South Korea
Taiwan
Thailand
United States
FTAA
An agreement to create a free-trade area among 34 countries in North and South America
Mercosur
Argentina
Brazil
Paraguay
Uruguay
EU
Austria
Belgium
Britain
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Netherlands
Portugal
Spain
Sweden
ASEAN
Brunei
Indonesia
Malaysia
Philippines
Singapore
Thailand
Vietnam
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ch2_18
DEVELOPING TRADE AREAS





NAFTA: free trade area
 US, Canada, Mexico
Mercosur: customs union
 Brazil, Paraguay, Uruguay and Argentina
APEC: forum of 23 Asia-Pacific nations
ASEAN: free trade area (beginning 2008)
 Thailand, Indonesia, Singapore, Brunei, Malaysia &
Philippines
CEA: economic area
 China, Hong Kong & Taiwan
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ch3_2
CULTURE DEFINED
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ch3_9
A CULTURAL FRAMEWORK
Religion
Language
Values &
Attitudes
Education Aesthetics
Law & Politics Social
Organisations
Technology &
Material Culture
Adapted from Terpstra & Sarathy (1999)
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ch3_13
Assumptions to Be Questioned by
International Marketing Managers
1. That Maslow’s Hierarchy of Needs is consistent across cultures
2. That the buying process in all countries is an individualistic activity
3. That social institutions and local conventions are similar across cultures
4. The consumer buying process is consistent across cultures
- consumer involvement
- perceived risk
- cognitive style
5. Self reference criterion
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INTERRELATIONSHIP BETWEEN CONTEXT
& PRODUCT DIFFUSION ch3_18
High Context/Fast Diffusion High Context/Slow Diffusion
South East Asia
Japan
India
Asia
Low Context/Fast Diffusion Low Context/Slow Diffusion
Scandinavia
USA, Canada
Source: Will, Samli and Jacobs (1991)
UK
Eastern Europe
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ch3_19
LINEAR MODEL OF THE NEGOTIATION
PROCESS
Non-task sounding
Task-related exchange of information
Persuasion
Concession and agreement
Source: Graham (1986)
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ch4_2
3 AREAS OF INTERNATIONAL MARKET
ANALYSIS



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THE FOUR RISK MATRIX ch4_5
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ch4_6
BUSINESS PORTFOLIO MATRIX
Source: Harrell G D and Kiefer R O (1993) Multinational market portfolios in global strategy development,
International Marketing Review, Vol 1- No 1
Country Attractiveness
High Medium Low
High
Company’s
Compatibility
With Each
Country
Medium
Low
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TRANSNATIONAL SEGMENTATION &
METHODS
Demographic: sex, age, income level, social class and educational achievement
Psychographic: lifestyle factors - activities, interests and opinions
Behavioural: patterns of consumption, loyalty to product category and brand ch4_8
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ch4_14
12C FRAMEWORK
Culture/consumer
Behaviour
Country Channels
Concentration Commitment
Choices
12c
Currency
Consumption Communication
Contractual
Obligations
Caveats
Capacity to Pay
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ch4_15
MARKET PROFILE ANALYSIS
Social
Cultural
Legal
Factors
Economic
Factors
Political
Factors
Technological
Factors
Competition
Trading
Practices
Tariff
Barriers
Financial
Source: Majaro (1992)
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ch4_16
SOURCES OF INFORMATION








Business libraries
University libraries
International chambers of commerce
International Market
Intelligence Centre (DTI)
Business Links
Embassies
Banks
Trade associations





Export councils
Overseas distributors
Overseas sales subsidiaries
Foreign brokerage houses
Foreign trade organisations such as
JETRO
 (Japanese Export Trade and Research
Organisation)
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ch4_20
USEFULNESS OF PERSONALLY COLLECTED DATA
IN THE ASIA-PACIFIC REGION
0 1 2 3 4
Not at all A little Substantial A lot Heavily
Customers
Personal contacts
In-house surveys
Businessmen
Governments
Competitors
Trade associations
Newspapers
Political contacts
External surveys
International survey
Magazines
Bankers
Local surveys
Computer databases
Source: Lassere , P (1993)
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ch4_21
ORGANISING THE RESEARCH
STUDY #1



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EVALUATION OF SURVEY METHODS ch4_24
+ = advantage
= disadvantage
Malhotra et al (1997)
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ch5_7
ASPECTS OF THE INTERNATIONAL
MARKETING PLAN
Stakeholder Expectations
Shareholders, customers, host government, employees in each country, pressure groups
Situation Analysis
Evaluation of the environment & individual markets
Resource & Capabilities
Individual SBU strengths & weaknesses analysis
Capability to deal with threats and opportunities
Corporate Aims & Objectives
Financial, market, area, brand & mix objectives
Marketing Strategies
Growth strategies
Standardisation & adaptation
Implementation of the Plan
Individual SBU & marketing mix plans
Regional, global or multidomestic integration
Control & Feedback
Setting standards, measuring performance, correcting deviations
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SOME TYPICAL STAKEHOLDERS OF
MULTINATIONAL ENTERPRISES
Expatriate staff
Shareholders Home country government
Individual politicians and civil servants
Suppliers
Distributors & retailers
The Firm
Host country government
Customers
Local workers and their organisations
Local competitors Pressure groups
Competitor MNEs ch5_8
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ch5_10
ANSOFF GROWTH MATRIX
Old
Old
Penetration
Products
New
Product development
Markets
Market development
Diversification
New
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ch5_12
MARKETING PLAN CHECKLIST #1
 The world economy and environmental trends
 Historical performance (sales, costs, profitability)
 Forecast future performance
 An extrapolation of the past
 Alternative scenarios
 Opportunities and threats
 Company strengths, weaknesses and capabilities compared to competition
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MARKETING PLAN CHECKLIST #2
 Long term aims, objectives and strategies
 One-year marketing objectives and individual
SBU strategies
 Country-by-country forecasts and targets
 Country-by country marketing plans for all activities
 Plan for regional and global integration ch5_13
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MARKETING PLAN CHECKLIST #3




ch5_14
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