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Strategy Introduction 1
Romero R. Linden 1
What is Marketing
2
What is marketing?
Satisfying customers at a profit
Customer
Profits
needs
3
Elements of Marketing
Control Planning
Implementation
4
The Overall Marketing System
Intermediaries
Economic Technological
Environment Environment
at g
M lan
rm ti n
n
ar n
io
P
fo e
ke ing
In a rk
tin
M
Products
g
Suppliers Place C Price Publics
ta &
M
em a g
pl nis tin
a Promotion
n
e n t io n
C rke
t io
Im rga rke
on t i
tro ng
O Ma
l
Political Socio-cultural
Environment Competitors
Environment
5
3 Principles of Marketing
1. Create customer value that is greater
than the value created by competitors
6
The Marketing Mix
4 Ps
Additional 3 Ps
People
Processes
Physical Evidence
7
Segmentation Targeting Positioning
8
18 Guiding Principles of marketing
Principle of the company- strategic direction has a marketing orientation
Principle of community all members of the organization work as a team to
satisfy customers
CONTD.
9
18 Guiding Principles of marketing contd.
CONTD.
10
18 Guiding Principles of marketing contd.
11
Exercise
3 Groups
Pick a local marketing organisation that is
involved in international business and
identify if and how the 18 guiding
principles are applied..
12
What is international
marketing?
A process of planning and executing the
conception, pricing, promotion and
distribution of ideas, goods and services
to create exchanges across boundaries
that satisfy individual and organizational
objectives.
13
Basic Differences-International Vs.
Local Marketing
Sovereign political entities
These differences
Different legal systems
necessitate
the
Different monetary firm to adopt
systems
14
Moving from local to foreign
markets
Motivation is created by
15
Internal
Managerial aspirations
International orientation
Differential advantages
Organizational characteristics & Commitment
External
Unsolicited orders
Change agents
16
Driving Forces
Technology advances
Economic Agreements
Market needs and wants
Pressure to cut costs
Pressure to improve quality
Improvements in communication
Transportation technology
Global economic growth
Leverage
17
Restraining Forces
Organisational Culture
National Controls and Barriers
18
How international marketing differs from
domestic marketing
19
Barriers of international
operations
Long distance
High risks and uncertainties
Customs formalities
Trade barriers
Three faced competition
Payment difficulties
Documentation formalities
Language barriers
20
Implications for managers
If the consumer needs were the same all over, a firm
could simply sell the same product worldwide.
Foreign Environment
(Uncontrollables)
(Controllables)
Geography Environmental
Economic Level of
& Climate Technology Uncontrollables
Infrastructure Country Market C
Structure of
Distribution
21
Market 1 Market 2
Market 3
22
Product Price
CUSTOMISE Country Country
1 2
Place Promotion
Standardise
23
How organisations view the world
EPRG Framework
Polycentric
Ethnocentric
Regiocentric Geocentric
26
Ethnocentric:
Polycentric:
Each country is seen unique
Multinational companies; subsidiaries develop own
unique business and marketing structures
27
Regiocentric / Geocentric
28
Stages in the evolution of a
company going international
Domestic
29
Companies Engaged in Foreign
Trade
30
31
32
33
34
35
Each term is distinct and has a specific meaning which define the
scope and degree of interaction with their operations outside of their
home country.
International companies are importers and exporters, they have no investment outside of their home
country. They make their product or service only in their home country. (Walmart, Harley)
Multinational companies have investment in other countries, but do not have coordinated product
offerings in each country. More focused on adapting their products and service to each individual local
market. Highly centralised decision making and control (Unilever, GSK)
Global companies have invested and are present in many countries. They market their products through
the use of the same coordinated image/brand in all markets. Generally one corporate office that is
responsible for global strategy. Emphasis on volume, cost management and efficiency (Coca Cola,
Microsoft)
Transnational companies are much more complex organizations. They have invested in foreign
operations, have a central corporate facility but give decision-making, R&D and marketing powers to each
individual foreign market.(Nokia, Toyota)
36
Exercise
HSBC is a truly International Organisation True or
False? Justify
37
40
41
The International
Marketing Environment
Romero R. Linden 42
Political / Legal
Economic
Socio-cultural
Technological
43
44
The Political and Legal
Environment
Romero R. Linden 45
Political system- type of government (socialistic,
capitalistic, democratic)
Philosophy of the government is reflected in its
policies.
46
Quality of the host governments economic
management
Change in government policy
Host countrys attitude towards foreign investment
Host countrys relationship with the rest of the world
Host countrys relationship with the home countrys
govt.
Attitude towards assignment of foreign personnel.
Extent of anti private sector influence
Fairness and honesty of administrative procedures
Closeness between govt. and people
47
Implications for managers
49
The Economic
Environment
Romero R. Linden 50
Economic Systems
Based on dominant method of resource allocation
52
Income and Purchasing Power Parity
For most products, income is the single most valuable
economic variable
53
Degrees of Economic Cooperation
Free Trade area
Group of countries agreed to abolish all internal barriers to trade
among themselves.
Customs Union
Eliminate internal barriers to trade and impose common external
barriers.
Common Market
Eliminate internal barriers to trade and impose common external
barriers and allow free flow of capital and labour.
Economic Union
Extensive political unity
54
Economic cooperation
Stage of Abolition of Common Removal of Harmonising
Integration Tariffs and Tariffs Quota Restrictions of Economic,
Quotas Systems on Factor Social and
Movement Regulatory
Policies
Free Trade YES NO NO NO
Areas
Common YES YES NO NO
Unions
Common YES YES YES NO
Markets
Economic YES YES YES YES
Union
55
56
The Socio-Cultural
Environment
Romero R. Linden 58
Learned behavioural traits shared by
members of a society.
Reflected in
language
aesthetics
education
religion
attitudes and values
social organization
59
Culture
Culture is transmitted from one generation to
another. Its established
-family
-educational institutions
-religious institutions
-governmental organizations
-business institutions 60
Marketing Mix Adaptation
In India, McDonalds serves chicken, fish, and vegetable burgers, and the
Maharaja Mactwo all-mutton patties, special sauce, lettuce, cheese,
pickles, onions, on a sesame-seed bun.
61
The Nestle Way
Nestl
Nestl sells
sells more
more than
than 8,500
8,500 products
products produced
produced in
in 489
489
factories
factories in
in 193
193 countries
countries
Nestl
Nestl is
is the
the worlds
worlds biggest
biggest marketer
marketer of
of infant
infant formula,
formula,
powdered
powdered milk,
milk, instant
instant coffee,
coffee, chocolate,
chocolate, soups,
soups, and
and mineral
mineral
water
water
62
U.S. Globalization
Many U.S.
companies
have made
the world
their market.
63
Colgate Goes to China
67
Type of technology in use
Level of technological development
Speed with which new technologies are
adapted and diffused
Type of technology appropriate
Technology policy
68
70
International Marketing
Research
Romero R. Linden 71
What is research?
72
Bridging Knowledge the Gap
GAPS
Research
73
What is the need?
Learn what you can hope to accomplish
Learn what is not to be done
Its a process
country identification
preliminary screening
in- depth screening
final selection
direct experience
75
Which markets to enter
Preliminary screening of potential markets
Estimate industry sales potential in each market
Estimate company sales potential in each market
76
Entry evaluation process
Country identification
Preliminary screening
Final selection
Direct
experience
77
Country identification
Undertake a general overview of potential new markets
Desk analysis (selection of about 200 highly potential
markets)
Include or discard markets after sufficient reasoning
Which foreign markets warrant detailed investigation.
Preliminary screening
Serious look at remaining countries
Assign scores, weights, ranks based on macro factors
(economics, currency stability, exchange rates, level of
domestic consumption)
Decide on a shorter list of countries
Which markets have a high potential
78
In-depth screening
The countries left are those that are feasible for
entry
79
Final selection
Final scoring, ranking and weighting based
on focused criteria.
Competitor behaviour in the selected
markets is done at this stage
Direct experience
Marketing manager and representative should
travel to the selected destination to get first hand
information
80
Possible categorization of global
customers in screening
Type 1 Fast-paced, competitive economies
Efficient product and service delivery, excellent quality assurance and an in
depth marketing plan are critical to success. If you are not fluent in the
language, you can work through a local partner to handle linguistic and
cultural differences
82
Clustering markets on a regional
basis
Western Europe
Prosperous economies
Objectives of EU member countries to harmonize national laws
Language differences need to be catered in packaging and
advertising
83
Clustering markets on a regional basis
(Contd.)
North America
High per capita income
High receptivity to innovations and new ideas
Arms length relationships between govt. and business
Asia-Pacific
Diversity of cultures
Latin America
Shift from protectionism towards market mechanism
84
Clustering markets on a regional basis
(Contd.)
Middle east
No single societal type.
Connection is a key word in conducting business
Africa
Much opportunity for creativity in developing unique products
that fit the needs of the people
85
How is this market specific
information obtained
86
Formal marketing research
87
Primary research process
Identify the problem
Develop a research plan
Collect data
Analyze
Present findings
88
Who provides information
Central Intelligence Agency World Factbook -
https://www.cia.gov/library/publications/the-world-factbook/
89
Reluctance to use research
Lack of sensitivity to differences in consumer
tastes and preferences
90
Differences between domestic and
international research
New parameters
-Duties, foreign currencies, modes of transportation,
documentation
-methods of entry
New environments
91
Segmentation, Targeting and
positioning intl. mkts.
92
Selecting a Target Market Strategy
Standardized Global Marketing Eg: Coke
Analogous to mass marketing in a single country
Same marketing mix for broad market
93
95
Competitive Analysis and
Strategy
Romero R. Linden 96
Major International Marketing Decisions
97
98
These forces of competition exert substantial pressure on
profitability of companies.
1. Threat of New Entrants
New entrants into an industry in a nation bring
Increase in manufacturing capacity
Desire to snatch market share
Suitable strategy to satisfy customer needs.
g) Other Advantages
Favourable location, govt. subsidies, access to cheaper raw
material etc.
h) Competitor Response
Expected vigorous and unpleasant response from existing
Players discourage new entrants.
101
2. Threat of Substitute Products
Availability of substitute products limits price that market
leader can charge.
102
4. Bargaining Power of Suppliers
Raw material and other suppliers enjoy bargaining power
when demand exceeds supply
when number of suppliers are limited
when product supplied is specialized in nature.
104
105
Generic Strategies for Creating
Competitive Advantages
Michael Porter developed this model of creating competitive advantages
to beat competitors adopting following approaches
Cost Focus The firm may exploit its lower cost of manufacture to
offer cut-throat price competition to win over a narrow market segment.
These generic strategies produce sustained result when are backed
by trade barriers.
e.g. Hindustan Levers strategy and success till 1990s.
107
Theory of National Competitive
Advantage Michael Porter
108
Porters diamond
Success occurs where these attributes exist.
More/greater the attribute, the higher chance of success
The diamond is mutually reinforcing
109
Factor endowments
110
Basic factor endowments
112
Advanced factor endowments
communications
skilled labor
research
Technology
education
113
Demand conditions
Demand:
creates capabilities
creates sophisticated
and demanding
consumers
114
Related and supporting industries
115
Firm Strategy, Structure and Rivalry
116
Determinants of Competitive
Advantage in nations
Chance
Company Strategy,
Structure,
and Rivalry
Two external
factors that Factor Demand
influence the Conditions Conditions
four
determinants.
Related
and Supporting
Industries
Government
117
Porters Theory-predictions
118
Implications for business
Location implications:
Disperse production activities to countries where they
can be performed most efficiently
First-mover implications:
Invest substantial financial resources in building a
first-mover, or early-mover advantage
Policy implications:
Promoting free trade is in the best interests of the
home-country, not always in the best interests of the
firm, even though, many firms promote open markets
119
Porters Diamond
Competitive
Competitive Advantage
Advantage for Countries
World Market
To seek lower production
factor costs
of Scope
Decision criteria for choosing a
suitable entry strategy
Political risk
Growth potential
Market access
Factor costs and conditions
Shipping considerations
Country infrastructure
Foreign exchange rate for countrys currency
Product market profile
124
Basic Entry Decisions
134
Cavusgil & Nevins model of the incremental internationalization process of a firm
International Market Entry
Strategies
136
Approaches to entry
Exporting- Organisation makes a commitment to market overseas
on its own behalf
International agents and intermediaries
FDI
100% Exports
0wnership
142
Risk and control attributes of entry strategies
143
Advantages and Disadvantages of Different Modes of Entry
Advantages and Disadvantages of Different Modes of Entry
(Continued)
146
Segmentation, Targeting & Positioning
for
Competitive Advantage
148
Marketing Strategy
Select bases for segmentation and identify appropriate market
segments.
Evaluate and appraise the market segments resulting from the
first step.
Select an overall market targeting strategy and specific target
segments.
Tailor a distinct position in selected markets
Develop marketing mixes that serves the desired positioning
strategy in the marketplace
Audit marketing environments and efforts
149
Segmentation Targeting Positioning
150
Importance of Segmentation and Targeting
151
The STP Process
Identify Total Market
Effective Segmentation
Positioning Strategy
Marketing Mix
153
154
Criteria for
successful segmentation
155
Segmenting Business Markets
156
Advantage of Targeting Efforts
158
Positioning
Positioning - Definition
159
160
Positioning Strategy
161
Presumptions of Positioning
162
Select Positioning Strategy
Effective positioning
What consumers currently think about the
product, especially in relation to competing
products
What the marketer wants consumers to
think about the product
Which positioning strategy will elevate the
consumers current product image to the
desired product image.
163
Select Positioning Strategy
Position Mapping
164
Perceptual Mapping
165
Select Positioning Strategy
The positioning strategy must determine where a
company wants to go
And how to get there by positioning the product
according to any of the following ways:
Price/Quality
Product Attributes
Product User
Product Usage
Product Class
Competition
Symbol
166
167
The Marketing Mix
Place
Product
(Distribution)
Marketing
Mix
Promotion Price
Romero R. Linden
Objective 4
168
169
Marketing Mix
The final steps are to develop and match a
marketing mix to the needs of the target
market
This must support the chosen positional
strategy in the selected target markets
Therefore determine the 4Ps or 7Ps of
its marketing mix as a tool to achieve the
desired position
170
Recognize 4Ps and the 7Ps
Product customer value
Price cost
Place convenience
Promotion communication
People consideration
Processes co-ordination
Physical evidence confirmation
171
Marketing Strategy and the
Marketing Mix
Product
173
Global Product Planning Strategic Alternatives
Strategy 2 Strategy 4
Product Extension / Product Adaptation /
Different Communication Adaptation Communication Adaptation
Eg: Levis Jeans / (Dual Adaptation)
Motorbikes Eg: Greeting Cards
Communication
Strategy 1
Product Extension / Strategy 3
Same Communication Extension Product Adaptation /
(Dual Extension) Communication Extension
Eg: Sensodine Toothpaste / Eg: Electrical Products
Gillette Razors
Same Different
Product
174
Suitability of a strategy
Product - Function or need served by the
product
Price
176
Pricing
Production
Delivery costs
Competition
Market demand
Currency exchange rates
Market research and credit checks
Receivables/risk insurance
Business travel
International postage, cable and telephone rates
Commissions, training charges and other costs involving
foreign representatives.
Product or service modification and special packaging
177
Pricing Strategies
Static pricing- charging the same price to all customers
Full cost-based pricing- covering both fixed and variable costs of the
export sale
Documentation
Inspection
Certification
Document preparation
Cargo insurance 179
Freight forwarders views 179
Marketing Strategy and the
Marketing Mix
Place
(Distribution)
181181
Intensity of Distribution
Channels of Distribution
183
Marketing Strategy and the
Marketing Mix
Integrated Marketing Communication (IMC)
System of management and integration of
marketing communication elements
Advertising, publicity, sales promotion,
personal selling, sponsorship marketing,
and point-of-purchase communications
Promotion
184
Alternative Promotional strategies
Advertising- select the media that has a wide circulation
within your target audience
Promotional materials - redesign if necessary the
marketing materials and packaging to remove elements
that are inappropriate in the target market
Direct mail - Directly contact the potential buyers
BTL Media - Outdoor advertising
Personal visits
PR
Trade shows / Exhibitions
Internet
185 185
Determinants of the promotional
strategy
Nature and level of competition
Variety of media in the target market
Level of economic development
Availability of local resources to assist with
the campaign
Local laws
Objectives
186
186
Digital Marketing
Digital Marketing Overview
Defition
One way to make sure you are found on the web is with an optimized
digital marketing strategy. Most digital marketing strategies and
campaigns have 5 objectives:
Key components
192
193
Contents of a marketing plan
Executive summary
Product or service analysis
Market analysis
Competitive analysis
Goals
Marketing strategy
Implementation
Evaluation
Summary
194
194