Foundation Mod 1

8/6/2019 Foundation Mod 1

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International

Marketing

By

Prof Srikanth Venkataswamy

Global Perspective


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Global Marketing: An overview

Module-1


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What Is International marketing?International marketing is the process of

focusing the resources and objectives of acompany on International opportunities.

Marketing is a set of concepts, tools,theories, practices & procedures andexperience.

Together these elements constitutes a

teachable and learnable body of knowledge.

Introduction to Global Marketing


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International Marketing (contd)

International Marketing consists of finding

and satisfying global customer needs better

than competition, both domestic and

internationaland of coordinating marketing activities

within the constraints of global environment

The task of responding to uncontrollable factors in the

firms environment.


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Marketing In the new Millennium-

Challenges and Issues

1. Seamless Global society2. Basis For competitive advantage

3. Business at the speed of thought

4. Virtual Enterprises

5. Customer: Co-producer of products and

services.

6. Customer: A warehouse of information

7. The Death of business and consumermarketing


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Challenges and Issues, Contd

8. The role Of Distribution Channels

9. The Poor as Market Segment

10.Environment Protection11.Diversity and Convergence Coexist


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Marketing In the new Millennium-Challenges and Issues

1. Seamless Global societyThe physical Distance, information and Knowledge,has now become redundant.

Emergence Of global Society and universal values.

Universal value relates to concept of time.Which isan indicator of opportunity.

By this More and more customers are willing toaccept global products and services.

Further, emergences of these values has altered

concept of space,time and Location.


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2. Basis For competitive advantage

Technological changes has lead to significant shiftsin Competitive leadership.

The present Day environment, Knowledge

management has become crucial armour for

competitive survival.


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A = Your point of differentiation. Some questions to

consider:

How sustainable is this?

Is this really as large as wed like it to be?

How can we make it larger and more sustainable?

B = Points of parity. Some questions to consider:

What do we want to do with these?C = Competitors points of differentiation. Some

questions to consider:

Is this area growing?

How difficult would it be for us to move these to B or A?

D = Opportunity. Some questions to consider:

How do we go after this so we move it into A and not B?How do we prevent our competitors from moving it to B

or C?

Why is this space so large and A so small?

The only way to do this analysis in a useful way is to get

the information from your target market. Dont


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3.Business at the speed of thought

The marketing Challenges Lies In enablingCustomers To overcome their resistance to change.

The Product Life Cycles will Be far shorter.

Interactive technologies will eliminate several roles

in marketing of products and services.

Products will be further standardized and hence theopportunities to differentiate will nolonger exists.


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4. Virtual EnterprisesIn this era of Digital Darwinism and virtualreality, size and location of an enterprisewill have a very little or no role to play.A Virtual Enterprise (VE) is a temporary alliance ofenterprises that come together to share skills orcore competencies and resources in order to betterrespond to business opportunities, and whosecooperation is supported by computer networks.

It is a manifestation of collaborative networksThe enterprise is more of an action, ratherthan an institution.


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6.Customer: A warehouse of information

In this internet and speed age, the customers has

access to huge bank of information from various

national and global sources.

Hence the era of standardization is today replaced

by mass customization.


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7.The Death of business and consumer

marketing

The differentiation between business and

consumer marketing, urban & rural

marketing and domestic & global marketing

will get more blurred.The physical difference between the

product & services will cease to exist.


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8.The role Of Distribution Channels

The conventional dealer and distributors will no

longer Viable.

Service and customized will be the order of the day.

Global SCM will emerge and converge.


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9.The Poor as Market Segment

Globalization has widened the gap between

the rich and the poor.

Poor people world wide are now a large

segment which get not be ignored.

This segment offers more attractiveopportunity than the rich segment.


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Globalization Of The Economy

Depends on: The role of human migration,

International trade,

Movement ofcapital, and Integration of financial markets
http://en.wikipedia.org/wiki/Migrationhttp://en.wikipedia.org/wiki/Tradehttp://en.wikipedia.org/wiki/Capitalhttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Capitalhttp://en.wikipedia.org/wiki/Tradehttp://en.wikipedia.org/wiki/Migration


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Globalization: Globalisation of the world economy has

been especially pronounced after WorldWar II and the Great Depression of the1930s in the USA.

The rise in the volume of trade betweenthe developed and the developingcountries,

Increase in cross-border transactions, rise

in immigration and Transfer of technology are some of the

key issues of globalisation


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Pe

rcent a

ge

of

Ado

pters

Time of AdoptionEarly Late

In

novat o

rs

Early

Adopters

Early Majority

2.5%

13.5%

34% 34%

16%

Laggards

Late Majority


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Levis Eco Jeans Promotes

Sustainability


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Bio Fuels

Biodiesel

Bioethanol
http://www.foss.dk/Solutions/BusinessAreas/Biofuel/Biodiesel.aspxhttp://www.foss.dk/Solutions/BusinessAreas/Biofuel/BioEthanol.aspxhttp://www.foss.dk/Solutions/BusinessAreas/Biofuel/BioEthanol.aspxhttp://www.foss.dk/Solutions/BusinessAreas/Biofuel/Biodiesel.aspx


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11.Diversity and Convergence CoexistMarkets are diverse. The diversity is not just Based

on Demographic & geographical location of the

customers, but also on their response in changesepically to technological changes for which

converges of needs is also a fact.

It is not only product related but will based on the

organization's culture, systems and hence quality.

Ex- long term vision ,Financial soundness, top-end

technological development, Investment ,Innovation

and new product & market development.


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Marketing Management Concepts or

Philosophies

There are Five Marketing Managementconcepts:

1. Production Orientation Concept

2. Product Orientation Concept3. Sales Orientation Concept

4. Market Orientation Concept

5. Societal Orientation Concept


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Market Management Concepts or

Philosophies

1.Production Orientation Concept

The philosophies that consumers will favorproducts that are available and that are

available and highly affordable and that

management should therefore focus on

improving production and distributionefficiency.

Ex Ambassador car, BAJAJ scooters


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Oldest concept in management

According to this, consumers wouldprefer those products that are widely

available and cheap

Product management done by lowcosts and mass distribution

Eg. Lenovo and Haier in China tookadvantage of cheap Chinese labour andbecame market leaders


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Marketing Management Concepts or

Philosophies

2.Product Orientation Concept

The Idea that consumers will favor products thatoffer the most quality, performance and innovate

features and that the organization to devote its

energy to make continues product improvements.

Ex- Microsoft products


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Product Orientation

Consumers go for products with superiorquality and innovative features

Product management done by increased

focus on product development and constantimprovisation eg. Nokia 3310 to 7710

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Sales Orientation

Consumers and businesses, if left alone, wontbuy enough of the organizations products

Aggressive push is required for promoting a

product eg. LICSergio Zyman, Cokes former VP of

marketing said, The purpose of marketing isto sell more stuff to more people more often

for more money in order to make more profit

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The MarketingOrientationEmphasizes on customer centered sense and

respond philosophy rather than productcentered make and sell philosophy

Reactive market orientation eg. iPodProactive market orientation eg. Sattelite

navigation systems

Total market orientation Mix of both

proactive and reactive.

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SocietalOrientationIt questions the marketing concept

Eg. Do Fast food chains, create national

obesity epidemic?

Society

Societal

Consumers mrktng Company

concept

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The Marketing Concept

Concept has chanced dramatically Past ThreeDecades

1950s To 1970s: Focus on products

The Focus was On Internal Standards and

values of the company without the customerfocus.

The objective was to persuade the potential

customer to buy the product in exchange tomoney.


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The Marketing Concept

1960s To 1980s: Focus on customer orientation

Development of marketing mix: product, price, place,promotion (4Ps)

Product

Enhancements easily matched

Price Without accompanying cost reduction is a losing tactic

Promotion and advertising

Without accompanying price, product or service advantagedoes not provide long-term success


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The Marketing Concept (2)

1990s: Product Enhancements easily matched

Price Without accompanying cost reduction is a losing tactic

Promotion and advertising Without accompanying price, product or service advantage

does not provide long-term success

Focus on customer in the context of the broader externalenvironment

Competition, government policy & regulation

Focus on stakeholder value employees, customers, shareholders, society


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The Marketing Concept (3)

Today:

Two key tasks of marketing

Focus on customer & his/her environment

Create value for consumers & stakeholder Shift towards

Focus on managing strategic partnerships

Positioning of firm in value chain to optimize value creation

Profit as a measure of success, not an end initself


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Three-dimensional structure Of international Marketing

Source: Text Edited by Stadtler & Kilger

Product Dimension

Time Dimension

Geographic Dimension


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Research &

Development

Product

Design

Process

Development

Goods

Services

After-Sale

Raw

Materials

Labor

Technology

Infrastructure

Country A

Country C

Country B

Country D

The Global Supply Chain: Intra-Firm Coordination.


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Potential opportunities

exploited by Dell Cost opportunities

Reduce facility costs

Geographical centralization andreduced inventories: Most effectivefor low volume, hard to forecastbooks, least effective for highvolume best sellers


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NatureThree major developments in global markets andThree major developments in global markets and

technologies which have brought customer totechnologies which have brought customer to

the forefrontthe forefront::

1.1. The information revolutionThe information revolution

2.2. Customer demands in areas ofCustomer demands in areas ofproduct and service cost, quality,product and service cost, quality,

delivery, technology, and cycle timedelivery, technology, and cycle time

brought about by increased globalbrought about by increased globalcompetitioncompetition

3.3.The emergence of new forms ofThe emergence of new forms of

inter-organizational relationshipsinter-organizational relationships


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Distributor Storage with

Carrier Delivery Dell inventory

Factories

Customers

Product Flow

Information Flow

Warehouse Storage by

Distributor/Retailer

D li ith P d t V i t


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Dealing with Product Variety:

Mass Customization

Mass

Customization

Mass

Customization

High

HighLow

Low

Long

Short

LeadT

ime

Cost

Customiz

ation


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U d di h


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Understanding the

CustomerCustomer demand from different

segments may vary along severalattributes

Lot size Response time

Service level

Product variety

Price

Innovation

Implied

Demand

Uncertainty


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Scope

A global Marketing can realize such advantagesonly if the management of the chainsgeographically dispersed activities areeffectively coordinated and are flexible enoughto adjust the value-adding activities throughoutthe world in response to the changes in thecompetitive environment.

Thus COORDINATION & FLEXIBILITY are

the key concepts in implementing aglobal Marketing Strategy


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Need Based Economy


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Challenges faced by the Manufacturing Sector


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A Production-Distribution System

raw materials

inventory

finished goods

inventory

work inprocess

inventory

FACTORY A

FACTORY B

(raw matl

delivery:

road, rail,sea, air

or

pipeline) (customer serviceby wholesale and

retail outlets)

small industries

rapid tech.

innovation increasing global

comptn

globalisation

of markets

Just-in-time

inventory

pressures on

pricing

pressures on

time-to-mktshorter pdt. life

cycles

stress on quality

Demanding

delivery sched.

rapid response

time-to-marketIndividual cust

omized prodn.

g y g


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Foreign Policys Global Top 20


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Challenges faced due to the

Globalization of the marketplace:

Increased competition

Rising consumer expectation

Growth of product variety, and

The convergence of consumer tastes in

disparate geographical regions

Leading to a highly integrated corporatestructure known as Global Supply

Chain.

Globalization Of The marketplace:


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Product & Services Classification

Classified As :

1. Consumer Products

2. Industrial Products


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Marketing Mix

Product

Place (Distribution)

Promotion Price


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Advertising

Direct Marketing

Personal selling

Sales promotion

PromotionMixPublicity RelationshipMarketing

Domestic VS International Marketing


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Domestic VS International Marketing

Domestic Marketing Global Marketing

1. One nation, same language andculture.

2. Transport cost is one of themajor expenses.

3. One currency

4. Market is relativelyhomogeneous.

5. Political environments andfactors are the same.

6. No problem of exchange controland tariffs

1. Many nations, Many languagesand cultures

2. Transport cost influences tosome extent.

3. Different currencies in different

countries.4. Markets are diverse and highly

heterogeneous.

5. Different political environmentsand factors in different countriesand are vital.

6. There are problem of exchangecontrols and tariffs.

Domestic VS International Marketing (contd )


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Domestic VS International Marketing (contd.)


7. Data Collection relatively easy,accurate and at less cost.

8. Relative freedom from Govt.Interferences.

9. Individual company has littleeffect on environment.

10. Relatively stable businessEnvironment.

11. Chauvinism helps.

12. Uniform Financial climate

7. Data Collection a formidabletask, requiring significantly higherbudgets and personnelallocation.

8. Govt. influences business

decisions.9. Gravitational distortion by Large

companies.

10. Multiple environments, many ofwhich are highly unstable.

11. Chauvinism hinders.12. Variety of financial climates ,

procedures. to wildly inflationary.

Domestic VS International Marketing (contd )


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Domestic VS International Marketing (contd.)


13. No major Legal & taxationissues

14. No major constrains inadvertisements & promotions(messages, language, costs,medium etc..)

15. Marketing costs: is minimal,Traveling, communication,Presentations

16. Business rules of the gamemature and understood

13. Legal & taxation issues notrelatively Smooth.

14. Advertisements & promotionshave to be carefully handled.(messages,language,costs,medium etc..)

15. Marketing costs: is a Variable,

16. Rulesdiverse,varied,changeableandunclear sometimes.


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Benefits of Competitiveness


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Decreasedbudget deficit

Increased competitiveness

in world market

Improved domestic

performance

High productivity of resources

START HERE

What thecustomerwants in products

and services

Capital

Technology Human

resources

Reduction

trade deficit

Increased

standard of

living

Stronger

national

security

More and better

jobs


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Challenges

WHAT MAKES INTERNATIONAL MARKETING

WHAT MAKES INTERNATIONAL MARKETING


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OPERATIONS IN A MULTI-COUNTRY CONTEXT

q Different Environments

Economic/FinancialPolitical/Legal

Social/Cultural

q Differences in Customer Behavior/MarketSegments

q Differences in Competition

q Different Marketing Infrastructures

Media

Distribution

Logistics

NEED TO:

q Adjust to These Differences

OPERATIONS IN A MULTI-COUNTRY CONTEXT

q Different Environments

Economic/Financial

Political/Legal

Social/Cultural

q Differences in Customer Behavior/MarketSegments

q Differences in Competition

q Different Marketing Infrastructures

Media

Distribution

Logistics

NEED TO:

q Adjust to These Differences

S O G

CHALLENGING?CHALLENGING?

The Three Principles of


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The Three Principles of

Marketing

CUSTOMER VALUE

DIFFERENTIATION FOCUS

K P i i l /El t f


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Key Principles/Elements of

Marketing

1. Customer Value Goal: create customer value that is greater

than the value created by competitors

Strategy: Expand or improve product and/ or service

benefits

Reduce the price

Combine these two elements

Elements of Marketing


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Elements of Marketing

Value Equation

V = Value

B = Perceived Benefits Perceived Costs

P = Price

V = B / P

Meeting Customer ReqCustomer Product Support


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Value =Quality

CycleCost

ServiceX

X

Meeting Customer Req FITNESS FOR USE

PROCESS INTEGRITY)

ELIMINATION OF WASTE

CONTINUOUS IMPROVEMENT

Product service FLEXIBILITY TO MEET

CUSTOMER DEMANDS

FLEXIBILITY TO MEETMARKET CHANGE

DESIGN & ENGG

CONVERSION

QUALITY ASSURANCE

DISTRIBUTION

ADMINISTRATION

MATERIALS

TIME-TO-MARKET

TIME-TO-MARKET(CONCEPT-TO- DELIVERY, ORDER

ENTRY TO DELIVERY)

RESPONSE TO MARKET FORCES, LEAD

TIME

(DESIGN, CONVERSION, ENGINEERING

AND DELIVERY)



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Marketing

2. Differentiation or CompetativeAdvantage

Goal: create competitive advantage through

differentiation Advantage can exist in any element of a

companys offer

One way to penetrate a new national market

is to offer a superior product at a lowerprice.

Competitive Advantage Through Price,Innovative Leadership & Quality



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Marketing

3. Focus Goal: Focus On concentration of attention &

resources On Customers

Requirement to create customer value at acompetitive advantage

A viable way for small & medium sized companiesto achieve dominant position in world market

A clear focus on customer needs & wants

Management Orientation and


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Management Orientation and

Global Marketing Different Management Orientations

in the Global Arena EPRGFramework

Regiocentric

Ethnocentric

Geocentric

Polycentric


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Stages


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Managerial Orientation

Ethnocentricity Orientation to home

country

Polycentricity Orientation to host country

Regiocentricity Orientation to a region

Geocentricity Orientation to the whole

world.

Management Orientation &


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Global Marketing

Ethnocentric Orientation:

Characteristic of domestic &international companies

Opportunities outside the homemarket are pursued by extendingvarious elements of the marketing

mix



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Global Marketing

Polycentric Orientation Characteristic of multinational

companies

Marketing mix is adapted byautonomous country managers

M t O i t ti &


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Global Marketing

Regiocentric or GeocentricOrientation:

Characteristic of global & transnationalcompanies

Marketing opportunities are pursued byboth extension & adaptation strategies

in global markets


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ForcesAffecting Global

Integration

Driving Forces


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Driving Forces1. Market Needs

2. Technology3. Cost

4. Quality

5. Communications and Transportation6. Leverage

Systems Experience

Scale Resources Utilizations Global Strategy


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Restraining Forces

1. Market Difference

2. Product Image and History

3. Management Myopia

4. Organizational Culture

5. National

Controls/Barriers to Entry


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Global Marketing An InsightAdditional Reading


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The International Marketing Task


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Political/legal

forces

Economic

forces

Competitivestructure

CompetitiveForces

Level ofTechnology

Price Product

Promotion Channels of

distribution

Geographyand

Infrastructure

Foreign environment(uncontrollable)

Structure ofdistribution

Economic climate

Culturalforces

Political/legal

forces

Domestic environment(uncontrollable)

Marketing

(controllable)

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountry market B

Environmentaluncontrollablescountry market C

ll

g

The international marketer

must deal with two levels ofuncontrollable uncertainty


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Political/legal

forces

Economic

forces

CompetitiveForces

Level ofTechnology

Price Product

PromotionChannels of

distribution

Geographyand

Infrastructure



Economic climate

Culturalforces

Political/legal

forces





Price

Promotion Channels of

Distribution


Product

Marketing controllable

g



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Political/legal

forces

Economic

forces


CompetitiveForces

Level ofTechnology

Price Product


distribution

Geographyand

Infrastructure



Economic climate

Culturalforces

Political/legal

forces

Marketing

(controllable)




Competitive

structure

Economicclimate

Political/legal

forces

Domestic uncontrollables

g



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CompetitiveForces

Level ofTechnology

Price Product


distribution

Geographyand

Infrastructure



Economic climate

Culturalforces

Political/legal

forces


Marketing

(controllable)




Structure of

distribution

Level of

Technology

Competitive

forces

Economicforces

Political/legalforces

Cultural forces

Geography and

Infrastructure

Foreign uncontrollable

g


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The process (stages) ofInternationalization

St


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Stages

1.Domestic

2.Export

3.International4.Multinational

5.Global/Transnational

St


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Stages

ALTERNATIVE STRATEGIESALTERNATIVE STRATEGIES


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International

High

Global

Co-ord

inationIntegra

tion

Low

Low HighN i l diff i i R i

Multi-National

Global Trans-National

Foundation Mod 1

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