Chapter 11 What is International Marketing?. Chapter 11 - Overview 11.1 International Marketing ...

Chapter 11Chapter 11

What is International What is International Marketing?Marketing?

Chapter 11 - OverviewChapter 11 - Overview

11.1 International Marketing 11.1 International Marketing 11.2 Global Marketing11.2 Global Marketing 11.3 International Marketing Mix11.3 International Marketing Mix Trading Partners - SpainTrading Partners - Spain

11.1 International Marketing11.1 International Marketing

Marketing: : All activities involved in planning, pricing, All activities involved in planning, pricing,

distributing and selling product or servicedistributing and selling product or service Marketing Mix - consists of 4 P’s and 2 C’sMarketing Mix - consists of 4 P’s and 2 C’s 4Ps – Product, Price, Place, Promotion4Ps – Product, Price, Place, Promotion 2Cs - Consumer and Competition2Cs - Consumer and Competition Designed to fulfill human wants and needsDesigned to fulfill human wants and needs Going international creates new Going international creates new

challenges for the marketing mixchallenges for the marketing mix

The Marketing Mix (4 P’s)The Marketing Mix (4 P’s)

Promotion Mix

Pricing Mix

Place Mix (Distribution)

Product Mix

Marketing Mix (4 P’s & 2 C’s)Marketing Mix (4 P’s & 2 C’s)

Promotion Mix

Pricing Mix

Competition

Customer

Place Mix (Distribution)

Product Mix

Research

Packaging

Product Development

Pricing

Branding

Sales

Physical Distribution

Inventory Management

Promotion

Storage

Marketing ActivitiesMarketing Activities

Definition of a BrandDefinition of a Brand

Name, term, sign, symbol or design Name, term, sign, symbol or design or a combination intended to identify or a combination intended to identify the goods or servicesthe goods or services

Differentiate from their competitorsDifferentiate from their competitors Branding is abstract – the product’s Branding is abstract – the product’s

‘personality’ or image‘personality’ or image

Target Market Target Market

Target MarketTarget Market: All marketing efforts : All marketing efforts directed at a directed at a specific group of specific group of consumersconsumers that the marketer wants to that the marketer wants to attract (and ultimately sell their product attract (and ultimately sell their product or service to)or service to)

Companies cannot afford to sell to Companies cannot afford to sell to ‘everyone’ and most products are not ‘everyone’ and most products are not applicable to ‘everyone’applicable to ‘everyone’

For some products, the market is For some products, the market is everyone, then it is called the everyone, then it is called the Aggregate MarketAggregate Market

Marketing StrategiesMarketing Strategies

Centralized or Decentralized Centralized or Decentralized

Push or PullPush or Pull

Brand Acquisition or DevelopmentBrand Acquisition or Development

Centralized StrategyCentralized Strategy Production & sale from Production & sale from one central one central

locationlocation - export to other markets - export to other markets ‘‘Think local – act global’Think local – act global’ Several Several marketing divisionsmarketing divisions – focus on – focus on

particular export areasparticular export areas Common marketing themes to make Common marketing themes to make

international marketing campaigninternational marketing campaign Still considers local cultural differencesStill considers local cultural differences Ex: Coca Cola – global brand, consistent Ex: Coca Cola – global brand, consistent

packaging / product features / logo – packaging / product features / logo – 2008 #1 Global Brand 2008 #1 Global Brand – most recognized– most recognized

Advantages of CentralizedAdvantages of Centralized Brand BuildingBrand Building (global brands) (global brands) – create – create

international international brand equitybrand equity – making a brand recognizable throughout the making a brand recognizable throughout the

world world – giving it a positive image giving it a positive image – consistent package, promotion & productconsistent package, promotion & product– Brand IQ Quiz Brand IQ Quiz

SynergySynergy – (1+1=3) – (1+1=3)– extra positive benefits from larger marketing extra positive benefits from larger marketing

group vs. smaller local groups working alonegroup vs. smaller local groups working alone Cost BenefitCost Benefit – – Economy of ScaleEconomy of Scale – avoids – avoids

duplication (R&D, advertising) of efforts – duplication (R&D, advertising) of efforts – centralized expert focus saves time and centralized expert focus saves time and money – lower cost / higher profitsmoney – lower cost / higher profits

Advantages / Disadvantages of CentralizedAdvantages / Disadvantages of Centralized

Best for small businesses – less Best for small businesses – less expensive than decentralizedexpensive than decentralized

Also good for large businesses – e.g. Also good for large businesses – e.g. Coca-Cola, McDonaldsCoca-Cola, McDonalds

Difficult to be only centralized – Difficult to be only centralized – always need a local approach – e.g. always need a local approach – e.g. Coca-Cola and McDonalds sell unique Coca-Cola and McDonalds sell unique local brands in different marketslocal brands in different markets

Companies often use a mix of two Companies often use a mix of two approaches to be more successfulapproaches to be more successful

Centralized OrganizationCentralized Organization

Coca ColaHead Office

Coca-ColaSouth America

Coca-Cola Asia Pacific

(Asia / Australia)

Coca-ColaNorth America

Coca-Cola European Union

Coca-Cola Africa

Decentralized StrategyDecentralized Strategy

Think Global – Act LocalThink Global – Act Local Local facilities – local decisionsLocal facilities – local decisions ‘‘Glocal’ – global firm / local focusGlocal’ – global firm / local focus AdvantagesAdvantages

– Proximity (closeness) to marketsProximity (closeness) to markets Targeting & better access to smaller marketsTargeting & better access to smaller markets Transportation savingsTransportation savings

– Flexibility – spot trends / competition quicklyFlexibility – spot trends / competition quickly– Culturally sensitive – more knowledge of local Culturally sensitive – more knowledge of local

customs and preferencescustoms and preferences

Centralized & Decentralized Centralized & Decentralized Marketing StrategyMarketing Strategy

Some MNC’s are so large that a Some MNC’s are so large that a combined strategy works bestcombined strategy works best– For example For example Coca-ColaCoca-Cola company p.339 company p.339– Uses both centralized and decentralized Uses both centralized and decentralized

strategies – depends on brandstrategies – depends on brand– FlagshipFlagship (main / most famous) Coca- (main / most famous) Coca-

Cola brand is centralizedCola brand is centralized– Other brands (Fanta – Europe, Kuat – Other brands (Fanta – Europe, Kuat –

Brazil) are decentralizedBrazil) are decentralized


Distribution StrategiesDistribution Strategies Focus on the best way to deliver a Focus on the best way to deliver a

product or service to the target marketproduct or service to the target market 3 ways to achieve distribution goals3 ways to achieve distribution goals

1.1. Push StrategyPush Strategy

2.2. Pull StrategyPull Strategy

3.3. Combination of bothCombination of both

Push and Pull StrategyPush and Pull Strategy

Push and Pull StrategiesPush and Pull Strategies

Push StrategyPush Strategy Marketers sell Marketers sell

products through products through channels of channels of distribution, not distribution, not the end user.the end user.

Consumer will see Consumer will see product in-stores product in-stores and want it and want it

Pull StrategyPull Strategy Marketer targets Marketer targets

the consumer the consumer directlydirectly

Convinces Convinces consumer they consumer they need productneed product

Global Branding is Global Branding is very important very important


Push StrategyPush Strategy Push the product or service to the Push the product or service to the

customercustomer Push strategy sells the product to Push strategy sells the product to

retailers, wholesalers or importers and retailers, wholesalers or importers and not directly to the end consumernot directly to the end consumer

Reason: if the product is out there where Reason: if the product is out there where consumers can see it, they will buy it.consumers can see it, they will buy it.


Pull StrategyPull Strategy Pull or attract the consumer to the product or Pull or attract the consumer to the product or

serviceservice This is what most people think of when they This is what most people think of when they

think of marketingthink of marketing Attempts to increase the consumer demand Attempts to increase the consumer demand

directly instead of relying on retailers to sell the directly instead of relying on retailers to sell the product to consumersproduct to consumers

Manufacturers and importers try to convince Manufacturers and importers try to convince consumers that they need the product and consumers that they need the product and should look for the product when they are should look for the product when they are shoppingshopping


Combination of Push and PullCombination of Push and Pull Use combination push and pullUse combination push and pull Pull strategy is difficult to use alone as it Pull strategy is difficult to use alone as it

requires distribution partnersrequires distribution partners Push strategy needs no partners, Push strategy needs no partners,

requires consumer awarenessrequires consumer awareness The push strategy needs to combine with The push strategy needs to combine with

the pull strategy to optimize the pull strategy to optimize effectiveness; however, the push effectiveness; however, the push strategy can stand alonestrategy can stand alone


Brand Acquisition StrategyBrand Acquisition StrategyInt’l company purchases an existing companyInt’l company purchases an existing company

Expensive, controls competition, inherit workforce, Expensive, controls competition, inherit workforce, management & goodwillmanagement & goodwill

Obtain rights to distribute locallyObtain rights to distribute locallyManufacturing and distribution rights: Manufacturing and distribution rights: Pepsi purchase license Pepsi purchase license

to make Brisk Ice Tea in USA from parent company Unilever to make Brisk Ice Tea in USA from parent company Unilever

Exclusive distribution rights: Exclusive distribution rights: Dealers attend trade shows looking Dealers attend trade shows looking for products to exclusively sell in their markets. for products to exclusively sell in their markets.

Brand Development StrategyBrand Development Strategy– Set up a foreign subsidiary to develop a Set up a foreign subsidiary to develop a

product to compete in the local marketproduct to compete in the local market Very expensive, complex, only large scale businesses Very expensive, complex, only large scale businesses

can afford this optioncan afford this option

Global MarketingGlobal Marketing Successful companies deliver Successful companies deliver

products to consumers in different products to consumers in different countries that they will want to buycountries that they will want to buy

To be successful the global marketer To be successful the global marketer considersconsiders– Economic Marketing Factors, Economic Marketing Factors, – Consumer Profiles and Consumer Profiles and – International Marketing ResearchInternational Marketing Research– FranchisingFranchising

Global MarketingGlobal MarketingEconomic Marketing FactorsEconomic Marketing Factors

The country/market must have an economy The country/market must have an economy that provides an income to its peoplethat provides an income to its people

Marketers consider wages and pricesMarketers consider wages and pricesMarket Research helps decide whether they Market Research helps decide whether they

Should sell only basic, essential goodShould sell only basic, essential good Should consider a new marketShould consider a new market Can create a marketing campaign that encourages Can create a marketing campaign that encourages

consumer spend their discretionary income consumer spend their discretionary income

Consumer ProfilesConsumer ProfilesA method of understanding the consumerA method of understanding the consumer

DemographicDemographic – measurable characteristics – measurable characteristicsAgeAgeGenderGenderFamily Lifestyle Family Lifestyle

Purchasing ProfilePurchasing Profile- who purchase, when where - who purchase, when where & how& how

Motivational ProfileMotivational Profile - explain consumer - explain consumer behaviourbehaviour

Thorndyke’s Pleasure/Plain Theory Thorndyke’s Pleasure/Plain Theory Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of NeedsRational/Emotional TheoryRational/Emotional Theory

MASLOW’S HIERARCHY OF NEEDSMASLOW’S HIERARCHY OF NEEDS arranged in a pyramid shapearranged in a pyramid shape the most basic need is at the the most basic need is at the

bottombottom once fulfilled , the next-higher level once fulfilled , the next-higher level

becomes more importantbecomes more important

CONSUMER MOTIVATIONCONSUMER MOTIVATION

The first four levels are The first four levels are deficiencydeficiency needs: needs:

1.1.PhysiologicalPhysiological: hunger, thirst, shelter, : hunger, thirst, shelter, warmthwarmth

2.2.Safety/SecuritySafety/Security:: freedom from danger, freedom from danger, adequate financial supportadequate financial support

3.3.Relationships /Relationships / AffiliationAffiliation:: belonging to belonging to teams and clubs; having friends, love teams and clubs; having friends, love relationships, family tiesrelationships, family ties

4.4.EsteemEsteem: celebrating personal achievement; : celebrating personal achievement; being successful and admired by othersbeing successful and admired by others


The fifth level is a The fifth level is a growthgrowth need: need:

5.5. Self-ActualizationSelf-Actualization:: motivated by a motivated by a desire to know, understand and explore desire to know, understand and explore Aesthetic:Aesthetic: motivated by a desire for motivated by a desire for symmetry, order and beautysymmetry, order and beauty

motivated by a desire to find self-motivated by a desire to find self-fulfillment and realize personal potentialfulfillment and realize personal potential

TranscendenceTranscendence: motivated by a desire to : motivated by a desire to help others find self-fulfillment and realize help others find self-fulfillment and realize their potentialtheir potential


THORNDIKE’S – Pleasure / Pain TheoryTHORNDIKE’S – Pleasure / Pain Theory Consumers are motivated to buy products that produce Consumers are motivated to buy products that produce

positive events (pleasure) and to avoid products that positive events (pleasure) and to avoid products that produce negative effects (pain)produce negative effects (pain)

Food, movies, entertainment = Food, movies, entertainment = pleasurepleasure Medicine, insurance, safety items = Medicine, insurance, safety items = avoid painavoid pain Pain Pain - complex, irritating, not acceptable- complex, irritating, not acceptable PleasurePleasure - product meets expectations - product meets expectations Most decisions have Most decisions have both positive & negative both positive & negative

eventsevents – e.g. – e.g. buying holiday gifts at the mallbuying holiday gifts at the mall– pleasure from giving gifts, product works well pleasure from giving gifts, product works well – crowded store, lineups & parking problems = paincrowded store, lineups & parking problems = pain

Mall has extended hours, parking attendants, service Mall has extended hours, parking attendants, service staff, self-check out = reduce painstaff, self-check out = reduce pain


Rational Emotional TheoryRational Emotional Theory

Rational Rational = practical, logical, thinking= practical, logical, thinking EmotionalEmotional = not logical, impulsive, = not logical, impulsive,

reactive, pleasure focus, sentimentalreactive, pleasure focus, sentimental Needs – rational – food, water, Needs – rational – food, water,

shelter, survival itemsshelter, survival items Wants – emotional – luxury or Wants – emotional – luxury or

optional goods – e.g. large screen TVoptional goods – e.g. large screen TV

Rational / EmotionalRational / Emotional

Companies use both rational and Companies use both rational and emotional appeals.emotional appeals.

E.g. Volvo cars – high qualityE.g. Volvo cars – high quality– Known for reliability – low maintenance Known for reliability – low maintenance

costs = rational appealcosts = rational appeal– Known for safety – children will be safe Known for safety – children will be safe

in an accident – ‘side impact protection’in an accident – ‘side impact protection’

emotional appeal – child in a car seat emotional appeal – child in a car seat shown in T.V. ad – appeals to emotionsshown in T.V. ad – appeals to emotions

Global MarketingGlobal MarketingInternational Marketing ResearchInternational Marketing Research

Before the marketer begins to organize the marketing Before the marketer begins to organize the marketing mix, they should ensure the data is validmix, they should ensure the data is valid

– Marketing Research is the collection, analyzing, and Marketing Research is the collection, analyzing, and interpreting of data to make marketing decisions. interpreting of data to make marketing decisions.

– Secondary Data – collected by othersSecondary Data – collected by others Internet Sources, Periodicals and Publications, Credible Internet Sources, Periodicals and Publications, Credible

Organizations found in the countryOrganizations found in the country

– Primary Data – collected directly from the Primary Data – collected directly from the marketplacemarketplace

Surveys, tests marketing, interviews, data mining & focus Surveys, tests marketing, interviews, data mining & focus groups, local marketing research firmsgroups, local marketing research firms

International Marketing MixInternational Marketing Mix

The introduction of a new product to The introduction of a new product to market is called a market is called a product launch product launch wherewhere all marketing mix factors are all marketing mix factors are coordinated for the marketing coordinated for the marketing campaigncampaign


ProductProduct– Meets needs/wants of consumersMeets needs/wants of consumers– Few competitorsFew competitors– Product featuresProduct features

Differentiation-what sets product apartDifferentiation-what sets product apartMarketing Opportunity Analysis – gaps in the Marketing Opportunity Analysis – gaps in the

international marketplaceinternational marketplaceBranding – brand recognition and brand equityBranding – brand recognition and brand equityPackaging and Labelling – protection, silent Packaging and Labelling – protection, silent

salesperson, meet country rules and salesperson, meet country rules and regulationsregulations


Place (Distribution)Place (Distribution) Industrial Sales RepresentativesIndustrial Sales Representatives

– Personal, very knowledgeable, power to make decisions Personal, very knowledgeable, power to make decisions – Trade missions help develop contactsTrade missions help develop contacts

Retail MarketingRetail Marketing– Department Stores to open air marketsDepartment Stores to open air markets

Specialty ChannelsSpecialty Channels– E-CommerceE-Commerce– Vending MachinesVending Machines– CataloguesCatalogues– TV SalesTV Sales– TelemarketingTelemarketing


PricePrice– Competitive for the marketCompetitive for the market– Encourage sales, cover costs and make Encourage sales, cover costs and make

a profita profit– Economies of scale – more made and Economies of scale – more made and

sold the less expensive products sold the less expensive products becomebecome


PromotionPromotion– Creating an effective sales messageCreating an effective sales message– Selecting an advertising medium that Selecting an advertising medium that

will target the audiencewill target the audience– Foreign advertising requires foreign Foreign advertising requires foreign

expertiseexpertise– Ensure that promotional activities are Ensure that promotional activities are

managed correctlymanaged correctly

International Marketing PlanInternational Marketing Plan

Before marketers attempt to market their Before marketers attempt to market their products outside their own country it is essential products outside their own country it is essential to develop a solid international marketing plan.to develop a solid international marketing plan.

Entering new countries changes the marketing Entering new countries changes the marketing mix and a new international marketing plan is mix and a new international marketing plan is needed.needed.

Complete International Company Profile p.356 Complete International Company Profile p.356 “Cinnaroll Bakeries” answer Q’s 1-2 “Cinnaroll Bakeries” answer Q’s 1-2

Chapter 11 What is International Marketing?. Chapter 11 - Overview 11.1 International Marketing ...

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