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International Marketing (Class-13)

Arun Bhattacharyya
Faculty Member
JIM, Noida
A model for selecting foreign markets….
Source: Global Trade Magazine, May
1980
Macro level Research Macro level Research
(Gen. Mkt. Potential) (Gen. Mkt. Potential)
Economic Statistics Growth trends of similar pdts
Political Environment Preliminary Cultural acceptance of such pdts
Filter 1 Availability of market data
Filter 2
Social Structure opportunities
Geographic Features Market Size
Stage of development
Taxes and duties

Possible opportunities
Rejected
Mkts Macro level Research
(Specific factors affecting pdt.)
Existing & potential competition
Target Markets Ease & cost of Entry
Reliability of info
Filter 3
Corporate factors Sales projections & Profit Potential
Filter 4 influencing implementation Probable product acceptance
“Feel”
Market priority listing
Probable opportunities
International Research- Some insights..
* Understanding and Interpreting Data…
- Whirlpool’s market research in European microwave
market, 1993
• 1/3
rd
of European house hold owned microwave oven
• Consumers wanted to buy a micro oven that worked like a
conventional oven
• Whirlpool introduced the Crisp, that incorporated a broiler coil for
top browning & a unique dish that sizzled the underside of food
• Crisp became Europe’s best-selling micro oven.

• -The
PepsiCo's market
youth market wasresearch
ready forin Europe,
a new 1996 didn’t contain
cola which
sugar
• Also, the youth market, especially males, was adverse to diet soda
• Launched Pepsi Max not as a diet soda but as a trendy, cool, sugar-
free cola
• TV campaign showed Pepsi Max drinkers, “Living life to the Max,”
performing death-defying stunts.
International Research- Some insights (contd.)..
* Understanding and Interpreting Data…
- An US firm producing cake mixes on trying to enter
England, 1999
• Based on research conducted in US, introduced a new cake mix in
England

• Designed a mix that required homemakers to add an egg, which was


a hit in the US market.

• Failed, because Britishers did not like fancy American cakes

• They preferred tough & spongy cakes that could accompany


afternoon tea.

• The ploy of adding an egg to the mix did not eliminate basic
differences in tastes or style
International Research- Some insights (contd.)..
* Collecting Primary Data…
- Siar Research International on a survey of shaving habits in Central
Asia, 1993
• Found that 50% of Kazakhstan men shave everyday
• Most Azerbaijan men shave once a week.

- Translation of questionnaires
• English (an alphabet-based language) into Japanese (character-
based language) made the questionnaire longer & respondents
prefer short ones
• In Nigeria “fast food” means “microwave food”.
• “ji xuan ji” is “computers” to Chinese speakers in China and Taiwan
and “calculators” to Chinese speakers in Singapore
• For a camera manufacturer “I get a good shot every time I use it” in
English became “I get a good gunshot every time” in Spanish
• Even within a city, difference in social class can result in different
idioms.
International Research- Some insights (contd.)..
* Collecting Primary Data…
- Participation and response in primary research
• Respondents in Netherlands or Germany are reluctant to divulge
information about personal financial habits
• In Japan, consumers mostly will not respond to telephonic
interviews (5% by telephone, 30% in business offices, 20% by mail,
19% in surveyor’s office, 14% in focus groups & rest in other ways.)
• In Mexico people prefer interview on the street rather than home,
especially about personal income, because respondents believe that
researchers are tax authorities in disguise.
• In many cultures a man considers it inappropriate to discuss his
shaving habits with anyone, especially with a female interviewer.
• Even within a city, difference in social class can result in different
idioms.
• Innovative approach to do survey: A Denver, Colorado firm ran a
questionnaire in Moscow’s Pravda newspaper asking for replies to
be sent to the company. Got 350,000 replies!
International Research- Some insights (contd.)..
* Collecting Primary Data…
- Focus Groups
• In certain Central Asian countries, men & women should not be
present in the same focus group
• In Japan it may be difficult to get participants to criticize a potential
product due to courtesy bias
• Participants in Thailand, Malaysia and Indonesia show up late or not
at all- for the focus group. You have to plan for extras.
• A focus group in Brazil consisting of 8 women can take an hour
longer than that in US due to time taken by the participants to know
one another
• In most developing countries, young participants may not contardict
older ones.
International Research- Some insights (contd.)..
* Collecting Primary Data…
- Observation
• Videotaping by P & G of one household in Thailand revealed a
mother engaged in multiple tasks, from watching television to
cooking a meal, while feeding her baby.
• P & G used that data to inspire product and package design to get
competitive edge over rivals
• Toyota sent a group of its engineers and designers to southern
California to observe how women get into and operate their cars.
• Found women with long fingernails having trouble opening the door
and operate various knobs on the dashboard. Some redesigning was
done to take care of this problem
• One researcher spent two months observing birthing practices in
American and Japanese hospitals to gain insights into export of
health care services
• Nissan Motors sent a researcher to live with an American family by
renting a room in their house for 6 weeks, to observe how they used
their cars
International Research- Some insights (contd.)..
* Collecting Primary Data…
- Studying the competition
• Kodak learned through competitive intelligence that Fuji was
planning a new camera for the US market in 1999. Kodak launched a
competing model one day before the Fuji launch
• Chaparral Steel, a US steel maker, sends its managers and
engineers to visit competitors, customers and supplier’s factories to
study trends and skills. Also visits university research departments
to spot new competencies
• Visit to trade fairs where competitors exhibit their product. At one
such fair in Texas, Caterpillar engineers were seen measuring
Koamatsu equipment. Some firms have stopped joining trade fairs.
So how to Plan for Global Markets
* Phase-I: Preliminary Analysis and
Screening:
* Matching company and country/market needs (stand-alone attractiveness
of the market; global strategic importance and possible synergies)
* Should we go for Emerging Markets?
* Company: philosophy & objectives, management styles & skills, resource
constraints
* Home country constraints: P, L, E, others (regional constraints)
* Host-country constraints: PESTLIED, Competition, Structure of
distribution

International * Long term planning, incorporating


generalised goals for the enterprise as a
Corporate whole
* Choice between immediate profit & poor long-
Planning run outlook and long-term profitability

International * At the top management levels & consists of


Strategic long & short-term goals of the enterprise
* Deals with products, capital, research
Planning
Planning for Global Markets (contd.)
* Phase-II: Adapting the Marketing Mix to
*Target Markets
Identifiable market segments that allow common marketing
mix (Product, Price, Promotion, Distribution) tactics across
countries
• Product (brand name, features, packaging, service,
warranty, style),
• Price (credit, discounts),
• Promotion (advertisement, personal selling, media,
message),
• Distribution (logistics, channels)

* Cultural/environmental adaptations necessary for adaptation of


the marketing mix

* Will adaptation costs allow profitable market entry?


Planning for Global Markets (contd.)
* Phase-III: Developing the
Market Plan
* Can the company marketing objectives/goals be met

Situational
Objectives & goals Strategy & tactics
analysis

Selecting entry
Action program Budgets
mode

* What is to be done, by whom, how and when

* Made normally at the local level and address


International marketing & advertising/promotion
Tactical questions
* Pertains to specific actions & to allocation of
(market) resources to implement strategic planning
Planning goals in specific markets
Planning for Global Markets (contd.)
* Phase-IV: Implementation and
control
Assign
Objectives Standards
responsibility

Correction for Performance


errors measures
Thank you for
Participating