Fourth Year First Semester: Mkt 4143 International Marketing

MKT 4143 International Marketing Fourth Year First Semester

Unit 01. Internationalization • Exporting and Importing marketing and International Marketing • Environmental Market scanning “SLEPT” • Improving exports, trading operations • Strategic considerations of direct and indirect involvement

Chapter 01

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Exporting and Importing marketing and International Marketing Exporting and Importing marketing and International Marketing

International Marketing - Definition • The definition of International Marketing is different from the general definition of Marketing only in that goods and services are marketed across political boundaries.

(Albaum)

• International Marketing is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for profit. (Cateora) MKT 4134 International Marketing

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Development of Global Marketing Domestic marketing Export marketing International marketing Multinational marketing Multinational corporation (MNC) Multinational strategy

Pan-regional marketing

Domestic Marketing • • • •

One set of Competitors One Economy One set of market pressures One set of Customers

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Domestic Market • Manipulate a series of variables – Controllable by business • Price • Advertising • Distribution • Product – Uncontrollable by business • Economic structure • Competitors • Cultural • Legal MKT 4134 International Marketing

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Export Marketing • Where the company markets its goods or services across national or political boundaries • Usually a reactive situation • Emphasis on product modification, if required. • Most traditional and least complicated form of international marketing. MKT 4134 International Marketing

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International Marketing • Entire marketing strategy will need to be adapted. • Understanding of different environments becomes essential. • Several markets • Differing controllable variables across markets • Differing uncontrollable variables across markets

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International Marketing • Giving – Differing infrastructures – Differing advertising/promotions – Differing complexity of market

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International Marketing • Multinational marketing – Where similar activities apply to more than one country – Some limited control on the market place variables – Markets may be independent profit centres – Marketing strategy can be tailored to local market, individual strategy per location, can have many and varied strategies MKT 4134 International Marketing

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Export marketing Vs international marketing Issues Export marketing Intl marketing Time horizons Short run Long run Target markets Dominant objectives Entry mode Resource commitment

No systematic selection Immediate sales

Build permanent market position Build permanent market position Systematic choice

No systematic choice Only enough to What is necessary get immediate to gain permanent sales market position 12 MKT 4134 International Marketing

Source: Root. F.R. Entry Strategies for International Markets.(1994)

Why is international marketing different • • • • • • •

Culture Markets Data Politics Governments Competitors Economies

Diverse, Multi-cultured Widespread, Fragmented,different Difficult to get, expensive Varying stability and attitudes Attitudes towards foreign trade Varying levels Varying levels & Systems

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What makes international marketing different • Finance

Varying systems & regulatory bodies

• Currencies • Businesses • Control

Varying & Fluctuating Cross Cultural Influences Remote & Difficult

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Why Firms Seek Global Markets React to inquiry from abroad Seek more sales and profits Respond to a domestic competitive shock Follow major customers abroad Leverage economies of scale and scope MKT 4134 International Marketing

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How companies ‘go international’ • Product maturity: the product life cycle stage at home may be one of maturity, whereas there may be a new embryonic market abroad enabling the product to start a new life cycle from introduction where quantities available are low but the price commanded is high. • Competition: competition may be less intense abroad than at home. Coffee Market in Russia MKT 4134 International Marketing 16

How companies ‘go international’….. • Excess capacity utilization • Geographical diversification: geographical diversification may be preferable to product line diversification. It is commonsense for a company to stick to producing what it is good at.

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How companies ‘go international’….. • Potential of a population and purchasing power: markets may be local, regional, international or even global. Generally, the more specialized the end-use application of any product or process, the larger the geographical market that needs then to be found.

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Porter’s prescription for competitiveness • Creates the climate for upgrading advantage • Sell to the most demanding customers • Find the right locations at the centre of the greatest concentration of forces making for competitiveness • Do no overdo globalization • Get involved in factor creation, including training consider a base move • Competition and alliances assure growth and manage competition, but do not overdo it • Role of the leaders is important. MKT 4134 International Marketing

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Psychological commitment and resource allocation Expectations of management, as a result of the impact of exports on growth. Level of commitment Differential advantages to the firm Managerial aspirations often related to security MKT 4134 International Marketing

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International marketing and the Internet • A business can operate literally anywhere, far distant even from the majority of its customers, provided all important parts of customers services are fulfilled. • Customers learn about products and services on the Internet through the home pages which companies create and through word of mouth. • The developed nations of the world have had temporary advantage only. Initially, the Internet was only available in English but most of the World’s major languages can now be accommodated and it is now possible to compose a message in one language and transmit it via theMKT Internet so that what arrives will21 be 4134 International Marketing translated into the language of the recipient.

International Marketing Advantages • Economies of scale • Lower marketing costs • Power and scope • Consistency in brand image • Ability to leverage • Uniformity of marketing practices

Disadvantages • Differences in consumer needs, wants, usage patterns • Differences in consumer response to marketing mix • Differences in brand development process • Differences in environment

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Nescafe Markets in Russia

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Any questions ?

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