ENTRANCE TO THE PROBLEMS OF INTERNATIONAL MARKETING

L4

Ing. Jiří Šnajdar 2013 Mgr. Evžen Staněk

Development trends

• deregulation = thanks to globalization is faster, and the freedom to trade freely, cancels trade and political barriers, expansion of marketing activities

• Globalization = saturation of national markets around the world to allocate capital optimally utilize all the resources in the world

• technical progress = information technology affects all communication tools, distribution, trading

• monitoring and the use of market opportunities

Nature of international marketing market offers for target market international marketing means, that we are able to find out merit of consumers in global market dimension, to realise market offer at finding of demands - marketing definition = integrate component of business, must be own to everybody in company (today is preferred integration of marketing into all elements of company) - definition of international marketing = in international ambience gained international marketing global character 

Aspects of formulating marketing strategy: 

• Market dynamics (market is extremely dynamic, shortens the life cycle of products, changing product requirements, changing the quality of life ...)

• Relational marketing

• Innovation and competitive advantages supply (related to the dynamics of the market)

• New forms of distribution and communication (information technology gives them new dimensions and strongly influence all options)

Prime decision in international marketing Decision about entering in to international market •active and passive motivation programmes active = company wants to increase profit, to have savings from extent, knows languages, management is actively looking for opportunities on market

•passive = competition, reduction of domestic sale, market saturation – management passively forces to look for new opportunities, does not search actively for its own advantages and risks + their analysis  

Decision about on which market enter

•definition of international marketing targets and tactics•share of international business on whole sale•rate of distribution and expansion extent•analysis of ambience of foreign markets = screening process•analysis of costs  

Decision about way of enter on foreign market

•indirect export – direct export – licence – mutual business – direct investment•increase of obligations, risks and profitability Decision about marketing programme

•rate of adaptation of marketing mix in conditions of market•standardisation x adaptation   

Decision about marketing organisation

•ways of administration of marketing activities in international ambience relative to intensity of integration into international business

•export department

•international division

•multinational organisation 

Differences of international marketing

•social-cultural difference of markets•language barriers•legislative rules•reach of countries (about 186 countries in the world, very high potential)•preference of domestic producers•relative testifying abilities of information•problems at market research (for example in Islamic countries we cannot stop a woman in the street with questionnaire)•professional lobbing•escalation of costs•different lifestyle

 

CHARACTERISTIC ATTRIBUTE OF CURRENT PERIOD =GLOBALISATION, WHICH AFFECTS ALL SPHERES OF SOCIETY

 

• reaction on saturation of domestic market, capital allocation, use of cheaper sources

• monitoring and use of comparative advantages

• intensely developing interactivity of economical subjects, supported by modern technologies and supporting development of consumption and investments

• power of information changes radically way of peoples communication, changes trade and business

 

 

The natural consequence of development trends and changes are changes in the sphere of marketing and management.

At the beginning of 21st century came Drucker with new principles of management – decisive are customers values.

 

• requirement is to lead people (no manage, but lead) and utilise their merits (couching),

to obtain their merits • important is proper organisation of work to fulfil the

targets• the management is functional when incorporate whole

economic chain in the company • innovation of offer (competitive ambience presses to the

offer of innovated products, with pluses, ecology, …)• strategies based on obtaining of competitive advantages

(low price, psychological aspects – luxury, uniqueness, innovation …)

• competition on global market – new forms of communication and distribution

• multiplying of advertising effect, firm presentation (information technological progress – internet shop)

• increasing of geographical extent and decreasing of geographical limitation (I can communicate with the whole world)

 

Opportunities for firms •spreading out the relative market space

•coming in useful on unapproachable markets through e-business (addressing of customers in world wide scale and reduction of costs)

•opportunities for small and middle size firms – thanks to their flexibility and rationality in costs, fill niche market also internationally

•opportunities for firms BORN GLOBAL (= multinational , born for globalisation), producing, innovative, top technologies, developed aggressive business politics  

Conclusion •proclamation for firms of 21th century = better knowledge and satisfaction of customers needs•firm priority = development of marketing management Possible reactions of business subjects :

•to monitor of influence of globalisation, adapt its strategy and its targets•to come in actively  

Global market dimension stress the importance of marketing as integrate component of enterprise in context with development of information technologies, technological progress is a company in qualitative new situation.  

Trends in the development of marketing  

• Shorten delivery times

I. aspects of formulating marketing strategy

• The dynamics of the market brings increased demands on the range of products and services

• Reduces the market life cycle

• Consumer demands are too dynamic - require more

– relation marketing (new role of suppliers and customers) relation marketing = relational marketing basic function of firm marketing require : •implementation of customer oriented philosophy the highest priority is satisfied customer•obtaining information about customer and communication with him•loyalty (commitment) – mark, style, price•support and expansion of services CRM (Customer Relationship Management)•CVM (Customer Value Management) Satisfied customer brings value to the company.

  

Intercultural marketing of services   

Service is intangible product when its operation is based on material principles.

Immaterial service is reason why customers : •evaluate hard competitive services•suspect risks at service purchase•stress the personal sources of information•as basis for evaluating of service quality use price / value 

Management must react :  •eliminate complexity of provided services

•emphasize material stimuli of services

• aim at visible quality spheres

•follow permanently feedback on service

  

Heterogeneous character of services  •In process of service are together present customers and servants (in difference with product, which is first made, then sold separately)•It is not possible to estimate customer behaviour in advance.•It is not possible to do output controls of “product” quality before delivering to customer.•Services can he only hardly patented. Sometimes we meet with franchising (providing with know how), where the process of services is protected.•Lower possibility of patent protection gives bigger possibilities to competitors.  

  

 

  Consequence of heterogeneous service Customer :

•Must not always get the identical service quality.•Difficult selection in service competition.•Must submit to rules of service, which is public open (hotel)

 

  Consequence of heterogeneous service Management :•Determine quality of norms of employees behaviour.•Mould, motive employees.•Plan carefully process of services. Destruction of services Immaterial character of services leads to that the service cannot be stored and sold later.Empty chair at hairdresser, empty hotel room, empty restaurant is “now and here” lost service.

 

  

 Impossibility to possess service Customer does not possess the service, only uses it. It is connected with it immaterial (and destructibility). He buys the right for rendering of service in advance agreed extent. Service distribution •For products transferred to an intermediary ownership law. (Warehouse buys a product from a manufacturer sells it to retail )•The service provider can not pass title. Therefore are distribution channels as short and direct as possible.

 

  

 SERVICE MARKETING Marketing in general is summary of techniques and skills, by means of which we satisfy needs of customer and we persuade him that only our product, service, fully conforms with his needs.  Marketing mix is : complex of tools, marketing manager uses to form qualities of services, provided to customers. The base is English written principle 4 x PProductPricePlacePromotion

 

  

 Classical “six C” of marketing communication (Kotler model)

Marketing – most simple definition : target and integral system of managing of business activities, oriented to market.1. Customer – determinate quality and price, is in the middle of interest, process and effort.2.Company – firm, human sources, employees, organisation climate, business relations, propagation3.Competitor – surrounding, environment, competition.4.Commitment – integrating into mutual work, loyalty with company5.competence – qualified work on professional level with appropriate competence,6. Consistency – harmony with what was performed. Required and necessary solidarity, solidarity, unity and stabilising.

 

  

 Services in intercultural ambience If character of services is a complicated business strategy on inner market, its international operation requires more and profound information.Before we enter the intercultural bindings, must be realised SWOT analysis. SWOT

S – strengthW – weaknessO – opportunitiesT – threats

 

  

  Intercultural specifics in CZ

•Foreign company offers a service in CZ•Czech company offers service abroad. Mix firm offers service in CZ or abroad (joint-venture)

In all mentioned examples it is necessary to count with cultural specifics of customers more urgently than at purchase of products.

 

  

 •Customer considers service as more private value than purchase of material product.•What is private, that is more specific.•The specificity influence tradition (national, religious, family, business)•In intercultural providing of services can arise unexpected situation, following from ignorance of service provider.•The only one way how to avoid this is intercultural teaching including personal collection of experience.

 

  

 Strategy of intercultural business

Penetration strategyMake global firms, business and distribution chains, hotel and restaurant conglomeration (Hilton, McDonald, etc.) Differentiation strategy Obtaining of competitive advantage thanks to difference from competitors. (Firm Kangaroo sells in the whole world clothing, but typically Australian and hardly imitating, or car company made Cadillac – is in knowledge sign of luxury and wealth).

 

  

 Strategy narrow specialization Typical example is sphere of spa treatment. Thanks to specialisation lowers numbers of competitors and the price for service and exclusivity of service can grow . Leader Strategy

Typical example can be the company Microsoft. Continuous innovation and its dictate on the market in result of fear from Follower Strategy. The firm in stagnation would the competition catch up fast.

 

  

 Follower Strategy (strategy of firms copying big companies)

The main target is to keep (and increase) share on the market by offering similar product, similar quality as the “Leader firm”, but for lower price. Forasmuch as he must not insert so much investment into research, the firms can be successful on market.

 

Samples of intercultural misunderstanding * Americans are proud of their history and do not like to hear hoe short it is. Stress importance of individual freedom of person in this history.* Czechs are disappointed when American visitor does nor enough estimate our history.* In America is obvious national self-esteem and do not understand humorous disparage of own (Czech) nation and accentuating of so called “švejkovství” (clever clownery). Americans in effort of correct negotiation (fear about accusing from sexual harassment) are from Czech view unsociable. They do not let the woman go first in the door, they do not help her with coat.

 

When in Germany comes manager late on meeting, it is considered as personal offence and some degrade. Delay in CZ is normal within 15 minutes and on Balkan and in Arabian world even one hour. •German businessmen are very surprised why the meeting in Czech starts with talking about private or social problems and why is not talked

about business immediately.•Germans can be, except business contact, especially with glass of wine very hearty. But this has no connection with business deal. Helpfulness by glass is not helpfulness general. The Czech is often confused and wondering.•In Scandinavia people do not steal. When you carefully lock your suitcase or hide wallet behind your shirt, you will reap real astonishment.

 

• In contrast, in Naples business partner notifies you that you have your documents stored in your briefcase quite casually and you can lose them.

• In the Arab world will stop shop dealings with pat hand. For honest traders is more than a written contract

• Many forms of subterfuge "within the law" in the Arab world considers ordinary (and honest) practice It is the attitude and actions in Europe and America, commercially and socially intolerable.

 

Mohammedans follow also in business relations “Sharia” laws of Koran. Therefore we cannot expect that they will equipollent talk to our or American manager (she). The woman according to Sharia is inferior being.

Jews do not make business on Saturdays. feast starts on Friday after sunset and finishes on Saturday after sunset.(In complex of luxury hotels in Israel by Red Sea are so called “feast lifts”. They stop automatically without assistance in all floors, because on feast must not an orthodox Jew operate with electrical appliance.) 

 

Mohammedans follow also in business relations “Sharia” laws of Koran. Therefore we cannot expect that they will equipollent talk to our or American manager (she). The woman according to Sharia is inferior being.

Jews do not make business on Saturdays. feast starts on Friday after sunset and finishes on Saturday after sunset.(In complex of luxury hotels in Israel by Red Sea are so called “feast lifts”. They stop automatically without assistance in all floors, because on feast must not an orthodox Jew operate with electrical appliance.) 

 

Misunderstanding in intercultural communication is also in colours interpretation – in so called colour-speech. •European colour of sadness is black, in Asia mostly white, in Brazil violet and in Mexico yellow, in Ivory Coast purple.•Red is connected with happiness in China, but with death in Turkey. •Green is in Europe accepted positively. But it is a national colour in Egypt, it is colour of Islam, therefore products must not be wrapped in green.•In south-eastern Asia is green colour negative (illnesses come from green jungle). 

 

Chinese make long business discussions. During the process they try to enter into something, what is in Europe perceived as personal relationship. In its scope can Chinese operate with emotions. Willingness, guilt, happiness, fear. Chinese seek for minimization of confrontational situations and are skilled negotiators.

Most impulsive in commercial negotiation are businessmen from Southern America, especially from Brazil. It is about some king of folklore. Feeling of success of deal would not come when everything would proceed in quiet atmosphere.