Académique Documents
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Industrial Marketing
Industrial Marketing
• Also called: Business-to-Business
(B2B) and Organizational Marketing.
2
The Marketing Concept
3
Marketing Concept
• Three major components:
– All company activities should begin
with, and be based on, the
recognition of a fundamental customer
need.
– A customer orientation should be
integrated throughout the functional
areas of the firm: production,
engineering, finance, R&D.
– Customer satisfaction is viewed as
the means to long-term profitability
goals.
4
B2B Defined
High
Follower Interact
Customer
Focus
Isolate Shaper
Low
12
Market Orientation
• Acquire intelligence from the
external environment.
• Disseminate that intelligence
throughout the organization.
• Respond to the intelligence:
take action.
(Kohli and Jaworski 1990, Journal of
Marketing)
13
Marketing Mission Statement
14
Marketing Activities
• Identify customer needs
• Research customer behavior
• Divide market into manageable
segments
• Develop new products/services
• Establish/negotiate prices
• Deliver, install, service products
• Ensure adequate and timely supply of
products at correct place
• Allocate resources across product
lines
• Communicate with customers
• Evaluate/control marketing programs
15
Marketing Mix
• Limited number of variables under
Marketing’s control to create
position that is attractive to
the target market segment.
• Four Ps
– Product
– Price
– Promotion
– Place (Distribution)
16
External Environment
• Characterized by:
– Degree of Stability
– Complexity
– Diversity
– Hostility
17
External Environment
• Six Environments
– Technological
– Economic
– Social/Cultural (Customer)
– Political/Legal
– Natural/Climatic
– Competitive
18
So what’s different
about B2B?
• Marketing Concept
• Marketing Mix
• Market Segmentation
• Product Life Cycle
19
So what’s different about B2B?
• The technical characteristics of
the product are important.
• These products directly affect the
operations and economic health of
the customer.
• The customer is an organization
rather than an individual
consumer, or family.
20
Five Major Differences
Between B2B and B2C
• Products/Services being
marketed
• Nature of demand
• How the customer buys
• Communication process
• Economic/Financial factors
21
Products/Services
• More complex
• Functional vs. Symbolic Attributes
• Large unit dollar value/Large
quantities
• Custom/Tailored
• Various Stages from raw material to
finished goods.
• Foundation, Entering, Facilitating
Goods
22
Raw Material Extraction
Material Processing
Manufacturing
Parts/Subassembly
Facilitators
Assembly
Distribution
Wholesale/Retail Trade
Final Consumers
23
Firms in Production Chain
Nature of Demand
• Derived – needed to produce
other goods and services.
Precision steel tubes for
various products to be used in
automobiles.
• Joint/Shared – pump set needs
engine /motor
24
Influences on a B2B purchasing chain
Sourcing strategies - advantages
and disadvantages (1 of 2)
Source: Adapted from Hahn (1986) and Ramsey and Wilson (1990). Reprinted by permission of MCB University Press Ltd.
Models of organisational
buying decision making
DEALERS /
DISTRIBUTORS
COMMERCIAL OEMs;
ENTERPRISE
End user
Public
GOVERNMENT sector
BUSINESS
projects
BUYERS
INSTITUTIONAL Public
private
COOPERATIVE Manufacturig
SOCIETIES units
Non
manufacturi
ng units
What do they buy?
30
Decision problems in B2B purchasing
decision making process (1 of 2)
Decision problems in B2B purchasing
decision making process (2 of 2)
Roles in the buying process
Source: Adapted from Johanson (1982), copyright 1982 © John Wiley & Sons Limited. Reporoduced with permission.
Mass production model of
buyer-seller contact in B2B markets
Source: Adapted from Johanson (1982), copyright 1982 © John Wiley & Sons Limited. Reproduced with permission.
Buying centres - comparison between
consumer and B2B markets (1 of 2)
Buying centres - comparison between
consumer and B2B markets (2 of 2)
INDUSTRIALBUYER BEHVIOR M ODEL
INFO.SOURCE
- Salesperson
- Exhibitions & trade shows
- Trade journals
- W OM Activ
- DIRECT M AIL 38
7 R’s of MARKETING MIX.
39
How Customer Buys
• Group Process
• Formal
• Lengthy
• Loyal
• Decisions based on risk and
opportunity
40
Communication
41
Economic/Financial Factors
• Competition oligopolistic
• Power/Dependency relationships
• Reciprocity: Doing business
with companies that do business
with them.
• Economic variables: interest
rates, inflation, business
cycle
42
Marketing Environment Audit
• Macro environment
• A. Demographic :What major demographic
developments and trends pose opportunities or
threats to this company?
• What actions has the company taken in response to
these developments and trends?
• B. Economic What major developments in income,
prices, savings, and credit will affect the
company? What actions has the company been taking
in response to these developments and trends?
• C. Environmental: What is the outlook for the
cost and availability of natural resources and
energy needed by the company?
• What concerns have been expressed about the
company's role in pollution and conservation, And
what steps has the company taken?
• D. Technological What major changes are
occurring in product and process technology? What
is the company's position in these
technologies? What major generic substitutes
might replace this product?
• E. Political What changes in laws and
regulations might affect marketing strategy and
tactics? What is happening in the areas of
pollution control, equal employment opportunity,
product safety, advertising, price control, and
so forth, that affects marketing strategy?
• F. Cultural What is the public's attitude
toward business and toward the company's
products? What changes in customer lifestyles and
values might affect the company?
44
• Task Environment
• A. Markets What is happening to market size,
growth, geographical distribution, and profits?
What are the major market segments?
• B. Customers What are the customers' needs and
buying processes? How do customers and
prospects rate the company and its
competitors on reputation, product quality,
service, sales force, and price? How do
different customer segments make their buying
decisions?
• C. Competitors Who are the major
competitors? What are their objectives,
strategies, strengths, weaknesses, sizes, and
market shares? What trends will affect
future competition and substitutes for the
company's products?
• D. Distribution and Dealers What are the main
trade channels for bringing products to customers?
What are the efficiency levels and growth
potentials of the different trade channels?
• E. Suppliers What is the outlook for the
availability of key resources used in production?
What trends are occurring among suppliers?
• F. Facilitators and Marketing Firms What is
the cost and availability outlook for
transportation services, warehousing facilities,
and financial resources? How effective are the
company's advertising agencies and marketing
research firms?
• G. Publics Which publics represent particular
opportunities or problems for the company? What
steps has the
• company taken to deal effectively with
each public?
46
Marketing audit : Measurement of performance
• A. Business Mission
• Is the business mission clearly stated
in market-oriented terms? Is it
feasible?
• B. Marketing Objectives and Goals
• Are the corporate and marketing
objectives stated in the form of clear
goals to guide marketing planning and
performance measurement?
• Are the marketing objectives
appropriate, given the company's
competitive position, resources, and
opportunities?
• C. Strategy
• Is management able to articulate a clear marketing
strategy for achieving its marketing objectives? Is
the strategy convincing? Is the strategy
appropriate to the stage of the product life cycle,
competitors' strategies, and the state of the
economy?
• Is the company using the best basis for market
segmentation? Does it have sound criteria for
rating the segments and choosing the best ones? Has
it developed accurate profiles of each target
segment?
• Has the company developed a sound positioning and
marketing mix for each target segment? Are
marketing resources allocated optimally to the
major elements of the marketing mix -- i.e.,
product quality, service, sales force, advertising,
promotion, and distribution?
• Are enough resources or too many resources budgeted
to accomplish the marketing objectives?
• Marketing-Organization Audit
• A. Formal Structure
• Does the marketing officer have adequate authority
over, and responsibility for, Structure company
activities that affect the customer's satisfaction?
• Are the marketing activities optimally structured
along functional, product, end- user, and territorial
lines?
• B. Functional Efficiency
• Are there good communication and working relations
between marketing and Efficiency sales?
• Is the product management system working effectively?
Are product managers able to plan profits or only
sales volume?
• Are there any groups in marketing that need more
training, motivation, supervision, or evaluation?
• C. Interface Efficiency
• Are there any problems between marketing and
manufacturing, R&D, purchasing, Efficiency finance,
accounting, and legal that need attention.
• Marketing-Systems Audit
• A. Marketing Information System
• Is the marketing intelligence system producing accurate, sufficient, and
timely information about marketplace developments with respect to
customers, prospects, distributors and dealers, competitors, suppliers,
and various publics?
• Are company decision makers asking for enough marketing research, and
are they using the results?
• Is the company employing the best methods for market and sales
forecasting?
• B. Marketing Planning System
• Is the marketing planning system well conceived and effective?
• Is sales forecasting and market potential measurement soundly carried
out?
• Are sales quotas set on a proper basis?
• C. Marketing Control System
• Are the control procedures adequate to ensure that the annual-plan
objectives are being achieved?
• Does management periodically analyze the profitability of products,
markets, territories, and channels of distribution?
• Are marketing costs periodically examined?
• D. New-Product Development System
• Is the company well organized to gather, generate, and screen new-
product ideas?
• Does the company do adequate concept research and business analysis
before investing in new ideas?
• Does the company carry out adequate product and market testing before
launching new products?
• Marketing-Productivity Audit
• A. Profitability Analysis
• What is the profitability of the company's
different products, markets, territories
and channels of distribution?
• Should the company enter, expand,
contract, or withdraw from any business
segments and what would be the short- and
long-run profit consequences?
• B. Cost Effectiveness Analysis
• Do any marketing activities seem to have
excessive costs? Can cost-reducing steps
be taken?
• Marketing-Function Audits
• A. Products
• What are the product-line objectives? Are
these objectives sound? Is the current
product line meeting the objectives?
• Should the product line be stretched or
contracted upward, downward, or both ways?
• Which products should be phased out? Which
products should be added?
• What is the buyers' knowledge and attitudes
toward the company's and competitors'
product quality, features, styling, brand
names, etc.? What areas of product strategy
need improvement?
• Price
• What are the pricing objectives, policies,
strategies, and procedures? To what extent are
prices set on cost, demand, and competitive
criteria?
• Do the customers see the company's prices as
being in line with the value of its offer?
• What does management know about the price
elasticity of demand experience curve effects,
and competitors' prices and pricing policies?
• To what extent are price policies compatible
with the needs of distributors and dealers,
suppliers, and government regulation?
• Distribution
• What are the distribution objectives and
strategies?
• Is there adequate market coverage and
service?
• How effective are the following channel
members distributors, dealers, manufacturers
representatives, brokers, agents, etc.?
• Should the company consider changing its
distribution channels?
• Advertising, Sales Promotion, and Publicity
• What are the organization's advertising
objectives? Are they sound?
• Is the right amount being spent on advertising?
How is the budget determined?
• Are the ad themes and copy effective? What do
customers and the public think and Publicity
about the advertising?
• Are the advertising media well chosen?
• Is the internal advertising staff adequate?
• Is the sales-promotion budget adequate? Is
there effective and sufficient use of sales-
promotion tools such as samples, coupons,
displays, sales contests?
• Is the publicity budget adequate? Is the public
relations staff competent and creative?
• Sales-force
• What are the organization's salesforce objectives?
• Is the salesforce large enough to accomplish the
company's objectives?
• Is the salesforce organized along the proper
principles of specialization (territory, market,
product)? Are there enough (or too many) sales
managers to guide the field sales representatives?
• Does the sales-compensation level and structure
provide adequate incentive and reward?
• Does the salesforce show high morale, ability, and
effort?
• Are the procedures adequate for setting quotas and
evaluating performances?
• How does the company's salesforce compare to
competitors salesforce?
• Different Problems: The “How” through Action
Plans
• Huge Problem:
• Performance objectives aren’t broken down to
the action plans required to execute.
• What happens: We’re out of alignment.
• We don’t have the available resources
• We don’t have the funding
• Timelines of different departments collide
• Our stakeholders aren’t on board or coordinated
• The Biggest Obstacle: Alignment
• What to Check out for Alignment
• Do employees throughout the organization know the
mission?
• Are the processes clearly enough articulated?
• Is everyone walking and talking in alignment?
• Do we have clearly defined values and does everybody
really demonstrate them?
• What is the gap between what we (the Leadership Team)
want and what we want them (the organization) to do?
(World-class companies keep raising the bar and
creating a gap.)
• What are you doing now and what could you do if you
got it right - if every individual were nailing it?
• More to check out for Alignment
• Why can’t you execute? Because you’re not aligned.
• Is the strategy/business planning internally
credible?
• Is it credible lower down to people charged with
execution?
• What are the dislocations? (People, timing,
resources, technology, funding)
• Is there is alignment in communication and in the
messages going up and down?
• Is there is execution alignment - a gap between
what we’re trying to achieve ad what we’re actually
achieving (both relative to plan and in terms of
potential)?
• So what’s different in this Approach to
Measuring
• Clarity of Measures
• Alignment – with the mission, the plan,
the stakeholders, available resources
• Drilling down from objectives to criteria
and action plans – are the plans in
alignment with the objectives, the
resources, the time lines, customer and
stakeholder needs
Continuous Learning
Tasks
Inputs Outputs
Behaviors, Deliverables,
Competencies, Performance
Technical Skills Objectives
8
Strategic Planning
Model
What is Strategic
Planning?
• Process to establish priorities on what you will
accomplish in the future
• Forces you to make choices on what you will do
and what you will not do
• Pulls the entire organization together around a
single game plan for execution
• Broad outline on where resources will get allocated
Why do Strategic
Planning?
• If you fail to plan, then you plan to fail – be
proactive about the future
• Strategic planning improves performance
• Counter excessive inward and short-term thinking
• Solve major issues at a macro level
• Communicate to everyone what is most important
Fundamental Questions
to Ask
• Where are we now? (Assessment)
• Where do we need to be? (Gap / Future End
State)
• How will we close the gap (Strategic Plan)
• How will we monitor our progress
A Good Strategic Plan
should . . .
• Address critical performance issues
• Create the right balance between what the
organization is capable of doing vs. what the
organization would like to do
• Cover a sufficient time period to close the
performance gap
• Visionary – convey a desired future end state
• Flexible – allow and accommodate change
• Guide decision making at lower levels –
operational, tactical, individual
Strategic Planning Model
A B C D E
Where we are Where we want to be How we will do it How are we doing
1. Operating Environment
• Products and Services – Suppliers, Delivery
Channels, Contracts, Arrangements, . . .
• Organizational Culture – Barriers, Leadership,
Communication, Cohesiveness . . . .
• Workforce Productivity – Skill levels, diversity,
contractor’s, aging workforce, . . .
• Infrastructure – Systems, technology, facilities, . .
• Regulatory – Product / Service Regulation, ISO
Quality Standards, Safety, Environmental, . . .
Organizational ProfileB aseline
2. Business Relationships
• Organizational Structure – Business Units,
Functions, Board, Management Layers, . . .
• Customer Relationships – Requirements,
Satisfaction, Loyalty, Expectations, . . .
• Value Chain – Relationship between everyone in
the value chain . . . .
• Partner Relationships – Alliances, long-term
suppliers, customer partnerships, . . .
Organizational Profile
B aseline
3. Key Performance
Categories
• Customer
• Products and Services
• Financial
• Human Capital
• Operational
• External (Regulatory Compliance, Social
Responsibility, . . . )
Baseline
Gap Analysis
Baseline / Org Challenges /
Profile SWOT
Gap
Gap == Basis
Basis for
for
Long-Term
Long-Term
Strategic
Strategic Plan
Plan
Compone
nts
Major Components of the
C ompone
Strategic Plan / Down to nts
Action
Strategic Plan
Action Plans
Mission Why we exist
Evaluate Progress
Values
• Every organization should be guided by a set of
values and beliefs
• Provides an underlying framework for making
decisions – part of the organization’s culture
• Values are often rooted in ethical themes, such as
honesty, trust, integrity, respect, fairness, . . . .
• Values should be applicable across the entire
organization
• Values may be appropriate for certain best
management practices – best in terms of quality,
exceptional customer service, etc.
Examples of C ompone
Guiding Principles and nts
We
Values
Weobey
obeythe
thelaw
lawand
anddo
donot
notcompromise
compromisemoral
moralor
orethical
ethicalprinciples
principles––ever!
ever!
We
Weexpect
expecttotobe
bemeasured
measuredbybywhat
whatwe
wedo,
do,as
aswell
wellas
aswhat
whatwewesay.
say.
We
Wetreat
treateveryone
everyonewith
withrespect
respectand
andappreciate
appreciateindividual
individualdifferences.
differences.
We
We carefully consider the impact of business decisions on ourpeople
carefully consider the impact of business decisions on our peopleand
andwe
we
recognize exceptional contributions.
recognize exceptional contributions.
We
Weare
arestrategically
strategicallyentrepreneurial
entrepreneurialininthe
thepursuit
pursuitofofexcellence,
excellence,encouraging
encouragingoriginal
originalthought
thought
and its application, and willing to take risks based on sound business judgment.
and its application, and willing to take risks based on sound business judgment.
We
Wearearecommitted
committedtotoforging
forgingpublic
publicand
andprivate
privatepartnerships
partnershipsthat
thatcombine
combinediverse
diversestrengths,
strengths,
skills and resources.
skills and resources.
Compone
Goals nts
Reorganize
Reorganizethe
theentire
entireorganization
organizationfor
forbetter
betterresponsiveness
responsivenesstotocustomers
customers
We
Wewill
willpartner
partnerwith
withother
otherbusinesses,
businesses,industry
industryleaders,
leaders,and
andgovernment
government agencies
agenciesininorder
ordertoto
better
bettermeet
meetthe
theneeds
needsofofstakeholders
stakeholdersacross
acrossthe
theentire
entirevalue
valuestream.
stream.
Manage
Manageourourresources
resourceswith
withfiscal
fiscalresponsibility
responsibilityand
andefficiency
efficiencythrough
throughaasingle
singlecomprehensive
comprehensive
process
processthat
thatisisaligned
alignedtotoour
ourstrategic
strategicplan.
plan.
Improve
Improvethe
thequality
qualityand
andaccuracy
accuracyofofservice
servicesupport
supportinformation
informationprovided
providedtotoour
ourinternal
internal
customers.
customers.
Establish
Establishaameans
meansby
bywhich
whichour
ourdecision
decisionmaking
makingprocess
processisismarket
marketand
andcustomer
customerfocus.
focus.
Maintain
Maintainand
andenhance
enhancethe
thephysical
physicalconditions
conditionsofofour
ourpublic
publicfacilities.
facilities.
Compone
Objectives nts
GOALS OBJECTIVES
Develop
Developaacustomer
customerintelligence
intelligencedatabase
databasesystem
systemtotocapture
captureand
andanalyze
analyzepatterns
patternsininpurchasing
purchasing
behavior across our product line.
behavior across our product line.
Launch
Launchatatleast
leastthree
threevalue
valuestream
streampilot
pilotprojects
projectstotokick-off
kick-offour
ourtransformation
transformationtotoaaleaner
leaner
organization.
organization.
Centralize
Centralizethe
theprocurement
procurementprocess
processfor
forimprovements
improvementsininenterprise-wide
enterprise-widepurchasing
purchasingpower.
power.
Consolidate
Consolidatepayable
payableprocessing
processingthrough
throughaaP-Card
P-CardSystem
Systemover
overthe
thenext
nexttwo
twoyears.
years.
Monitor
Monitorandandaddress
addressemployee
employeemorale
moraleissues
issuesthrough
throughan
anannual
annualemployee
employeesatisfaction
satisfactionsurvey
survey
across all business functions.
across all business functions.
Down to
Specifics
Down to
What are Action Plans? Specifics
• The Action Plan identifies the specific steps that will be taken to achieve the initiatives and strategic objectives – where the rubber meets the road
• Each Initiative has a supporting Action Plan(s) attached to it
• Action Plans are geared toward operations, procedures, and processes
• They describe who does what, when it will be completed, and how the organization knows when steps are completed
• Like Initiatives, Action Plans require the monitoring of progress on Objectives, for which measures are needed
Objectives
Initiatives
Action Plans
Characteristics of D own to
Specifics
Action Plans
• Assign responsibility for the successful completion of the Action Plan. Who
is responsible? What are the roles and responsibilities?
• Detail all required steps to achieve the Initiative that the Action Plan is
supporting. Where will the actions be taken?
• Establish a time frame for the completion each steps. When will we need to
take these actions?
• Establish the resources required to complete the steps. How much will it
take to execute these actions?
• Define the specific actions (steps) that must be taken to implement the
initiative. Determine the deliverables (in measurable terms) that should
result from completion of individual steps. Identify in-process measures to
ensure the processes used to carry out the action are working as intended.
Define the expected results and milestones of the action plan.
• Provide a brief status report on each step,
step whether completed or not. What
communication process will we follow? How well are we doing in executing our
action plan?
• Based on the above criteria, you should be able to clearly define your
action plan. If you have several action plans, you may have to prioritize.
Down to
Action Plan Execution Specifics
Up Specifics
in terms of Measurements
• Measure your milestones – short-term outcomes at
the Action Item level.
• Measure the outcomes of your objectives.
• Try to keep your measures one per objective.
• May want to include lead and lag measures to
depict cause-effect relationships if you are
uncertain about driving (leading) the desired
outcome.
• Establish measures using a template to capture
critical data elements
Down to
Measurement Template Specifics
(Insert (Insert division (Insert department Risk Frame area (Insert objective (Insert (Insert reporting
organization name) name) objective supports owner) measurement contact info)
name) owner)
Objective Description – description of objective purpose, in sufficient detail for personnel not References – source
familiar with the objective to understand its intent. Objective descriptions are typically two or documentation for objective and
three paragraphs long. This will appear in the pop-up window when you mouse over the objective description
objective in the Balanced Scorecard System.
Comments – additional information about the objective not covered in above blocks, such as recommendations for further
revision, additional organizations objective impacts, recommendations for coordination / alignment with other objectives, etc.
Measure Name - The name Measure Description – description of the measure, Measure Formula – Data Source - The
exactly as you want it to include its intent, data source, and organization formula used to source of the data –
appear in the Balanced responsible for providing measure data. This will calculate measure manual, data
Scorecard, including the appear in the pop-up window when you mouse over value (if any) spreadsheet, or
measure number (i.e. Percent the measure in the Balanced Scorecard. database name and
Employees Satisfied, etc.) contact familiar with
the data
Measure Weight - the relative weight of the measure based on the impact it has on Measure Reporter – Person responsible
the overall objective. The total weights for all measures for an objective must add to for providing measure data. Include the
100 name, organization and email.
Target Maximum – Maximum expected value for the measure. Effective Date – Frequency – How often Units – Units
Date the target first target data will be reported of measure
becomes effective
Measures
Integrity – Complete; useful; inclusive of
several types of measure; designed to
measure the most important activities of
the organization
Reliable: Consistent
Accurate - Correct
Timely – Available when needed: designed to
use and report data in a usable timeframe
Confidential and Secure: Free from
inappropriate release or attack
Examples of Measurements Down to
Lead Indicators Specifics
Lag Indicators
• Overall customer satisfaction rating =>
how well you are doing looking back
• Business Units met budgeted service
hour targets => after the fact
reporting of service delivery volume
• Number of category C safety accidents
at construction sites => historical
report of what has already taken place
Down to
Targets Specifics
Average Time to Process New 65 days Year 60 days Year 55 days Year
Employee Setups in DB 2007 2008 2009
Utilization Rate for Rental 90% for 92% for Year 95% for Year
Housing Units Year 2007 2008 2009
Toxic Sites meeting in-service 55% for Year 70% for Year 95% for Year
compliance 2007 2008 2009
Personnel Fully Trained in 65% by 2rd 75% by 3th 90% by 4th
Safety and Emergency Quarter Quarter Quarter
Open Positions Filled after 30 75 positions 100 positions 135 positions
day promotion period Sept 2007 Jan 2008 July 2008
OBJECTIVE
Improve Employee
Satisfaction
MEASURE / TARGET
Measure 90%
Employee
Percent Satisfaction
Values
Issue Western Value Eastern Value
Distinctiveness of Want to be distinctive Not valued; emphasis on
people tie to group
Perceived control Significant; values determine Modest—societal values
choices are already established
Emphasis Success and achievement; Best outcome for relevant
relationships may get in the way group (e.g., family, work
group)
Self-esteem Strive to feel good; assurances Tied to belonging with
wanted group
Relationships Equality or superior position Clearly defined;
hierarchical
Rules Same rules apply to all Depend on context and
relationship
Some implications
• Thanking people—for things they
are clearly supposed to do?
• Why the need for a choice
between 40 different brands of
cereal?
Socialization
• Western textbook: “See Dick
run. See Dick play. See Dick
run and play.”
• Chinese: “Big brother takes
care of little brother. Big
brother loves little brother.
Little brother loves big
brother.”
Perception of People
• Western: People have characteristics
independent of the situation
– Fundamental attribution error: People
attribute their own behavior to the
circumstances but that of others to
innate characteristics.
• Eastern: Person is connected;
behavior is the result of specific
roles played at the time
INTERNATIONAL BUSINESS – WHY ?
•Highly competitive business environment – competition
from multi-nationals.
•Business firms should increase their top lines and reduce
costs to retain their bottom lines.
•One of the options, which some feel is a must, is to
internationalize the business operations.
•Business firms should therefore develop proper strategies
to globalize operations.
INTERNATIONAL MARKETING – WHY?
Choice of International
Mode of Entry
Internalization Collaboration
Contractual Agreements
Greenfield Investments -Licensing
- Franchising
- Syndication
- Turnkey Projects
Acquisitions
Equity Joint Ventures
- Minority
- Equal
- Majority
Entry Mode Selection
• Risk Tradeoffs
• Return
• Control
• Investment
Market Entry Strategies
Indirect Exporting
• Exporting via intermediaries
in domestic market
– Via domestic clients
– Export houses/ trading companies
– Piggybacking
– Co-operative export venture
– Clients buying offices in home
market
Direct Exporting
Country
United State
Source: World Bank (http://www.worldbank.org/data/databytopic/GNIPC.pdf)
The Hamburger Standard (from
the Economist)