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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
Marketing StrategiesMarketing Strategies
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
Marketing StrategiesMarketing Strategies
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.
Marketing StrategiesMarketing Strategies
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
Marketing StrategiesMarketing Strategies
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
Marketing StrategiesMarketing Strategies
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
CONSUMER MOTIVATIONCONSUMER MOTIVATION
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
CONSUMER MOTIVATIONCONSUMER MOTIVATION
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
CONSUMER MOTIVATIONCONSUMER MOTIVATION
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
International Marketing MixInternational Marketing Mix
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
International Marketing MixInternational Marketing Mix
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
International Marketing MixInternational Marketing Mix
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
International Marketing MixInternational Marketing Mix
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