CHAPTER 1

International expansion helps firm: Keep pace with competition Reach a larger market (e.g. US with 25% of worldwide products/services) Reap higher profits Prolong the lifecycle of their products Also an option for small and medium sized companies

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Domestic Marketing
Low or no international commitment
Focus on domestic consumers and home country environment Domestic focus

Export Marketing
Limited international commitment
Involves direct or indirect export

Multinational Marketing
Substantial international commitment
Focus on different international countries

Global Marketing
Extensive international commitment
Focus on regions market segments rather than countries Regiocentric Geocentric
3

Ethnocentric

Polycentric

Raising commitment/ involvement to international market

Guided by domestic market extension concept Domestic strategies, techniques, and personnel are perceived as superior. International markets are secondary, regarded primarily as outlets for surplus domestic production. International marketing plans are developed in-house by the international division. E.g. Disney resort in France: Disneyland Resort Paris had to adapt it to local preferences: European fairy tales, food, and dress code for staff.

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Guided by the multidomestic marketing

concept

Focuses on the importance and uniqueness of each international market Firms establish independent businesses in each target country. Fully decentralized, minimal coordination with headquarters Marketing strategies are specific to each country. Outcomes:
No economies of scale Duplicated functions Higher final product costs
5

Guided by the global marketing concept World regions that share economic, political, and/or cultural traits are perceived as distinct markets. (e.g. EU, NAFTA*) Divisions are organized based on location. Regional offices coordinate marketing activities.

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*North American free trade agreement

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Business Environment Drivers

Competition Regional Economic and Political Integration Technology Improvements in Transportation and Telecommunication Economic Growth Transition to Market Economy

Firm specific Drivers Product Life Cycle High New Product Development Costs Standardization Economies of Scale Cheap Labor Experience Transfers

Converging Consumer Needs

within the company Finances Psychological: unknown environment Self-Reference Criterion

outside Government Barriers Barriers imposed by International Competition

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based upon the relationship between its structure, evolution, organizational, product and attitudinal characteristics of international expansion

Indicators that show the level of internationalization of a particular firm ~

There are a number of strategies through which a company can plan its entry into an international market ~ licensing, exporting, sales subsidiary, production subsidiary, joint venture. SMEs and large businesses differ in terms of international operations

Major Dimesions of International marketing:~ Exporting Importing Management of international operations Three basic decisions with international marketing management:~ Whether to serve international markets Which markets to serve How to serve these markets ( 4 Ps)

International marketing management involves the management of marketing not only to but also in foreign countries ~ what entry mode

the company plans to choose

Market driven marketing approach creating a market rather than controlling it. Product / technology driven less concern
among competitors about consumers or market share than product performance

Systematic Process Large Scale Operations Dominance of Multinational Corporations Customer Focus Trade barriers Trading Blocs Documentation

In export markets, exporters have to face three-faced competition, i.e., competition from the three angles from the other suppliers of the exporters country, from the local producers of importing country and from the exporters of competing nations.

1)

Identifying and measuring oppurtunity:Preliminary screening Estimating market potentials Estimating sales Segmenting the market

a) b) c) d)

2) Developing an export marketing strategy: a) Setting export objectives b) Planning the marketing mix( 4 Ps)

3) Marketing Export Strategy operational: a) Sales forecast b) Sales budget c) Sales quotas d) Production schedules e) Inventory control f) Labour requirements g) Promotional, financial and profit budgets

The role of documentation assumes added importance to prevent misunderstanding and costly litigation
There are new parameters that the exporter will need to take into consideration, such as import duties as well as legal restrictions, different modes of transport, international trade documentation, foreign currencies, and different and additional marketing channels

There is generally more extensive use made of the fax and e-mail than the telephone and when these are used, different time zones and different languages have to be considered Operating in foreign markets exposes the exporter to far wider and more intense competition than would be the case in the domestic market Exchange rates, and in some cases exchange control regulations, are applicable

Goods are subject to customs control and the payment of import duty (where applicable)

A number of technical and administrative regulations may apply to exports - legal requirements in certain foreign markets in respect of the technical specifications of a product, that call for changes to be made before the product may be imported

based upon the relationship between its structure, evolution, organizational, product and attitudinal characteristics of international expansion

Indicators that show the level of internationalization of a particular firm ~

There are a number of strategies through which a company can plan its entry into an international market ~ licensing, exporting, sales subsidiary, production subsidiary, joint venture. SMEs and large businesses differ in terms of international operations

Three basic decisions with international marketing management:~ Whether to serve international markets Which markets to serve How to serve these markets ( 4 Ps)

Market driven marketing approach creating a market rather than controlling it. Product / technology driven less concern
among competitors about consumers or market share than product performance

Marketing may need to be concerned with managing rather than just stimulating demand: environmental, legal, supply, and

other concerns. Exhibit 1.5

States of demand: negative, none, latent, falling, irregular, full, overfull (excess demand for oil during the oil crisis), unwholesome (vice products).

international markets, and lowered costs of doing business. Development and marketing of software to support e-business has become a major international industry. New products have resulted from major advances in communications technology, medical research and medicines, and traditional products and manufacturing processes. Improvements in shipping equipment and the applications of information technology in scheduling and control have reduced costs.

E-business software allows companies to handle key functions in a coherent on-line system: supply chain and distribution chain management; ordering, billing, and inventory management; analyses of sales and trends; etc. Specific software is available to support Customer Relations Management (CRM) programs.

Online marketplaces
The virtual company Business-government alliances

Obstacles may be real or only perceived, but perceptions guide actions. Barriers affecting many companies, particularly smaller ones, include: higher operational

efforts required for foreign market, lack of information, lack of knowledge and skills, trade barriers, risk, and others

All aspects of domestic and international business operations have been impacted by the Internet, the World Wide Web and Ebusiness. Internet provides greatly increased speed and lowered costs in communications. World Wide Web, operating over the Internet, is an easily used system for providing constantly available displays of information

international markets, and lowered costs of doing business. Development and marketing of software to support e-business has become a major international industry. New products have resulted from major advances in communications technology, medical research and medicines, and traditional products and manufacturing processes. Improvements in shipping equipment and the applications of information technology in scheduling and control have reduced costs.

E-business software allows companies to handle key functions in a coherent on-line system: supply chain and distribution chain management; ordering, billing, and inventory management; analyses of sales and trends; etc. Specific software is available to support Customer Relations Management (CRM) programs.

Online marketplaces
The virtual company Business-government alliances

EXPORTING SERVICES OF KNOWLEDGE INDUSTRY WORKERS Greatly increased capabilities and lowered cost in communications have enabled crossborder export of information services Companies in lower-wage nations employ well educated people in providing services ranging from call centers and back office support to advanced technical support, software development, and design services.