Group 8 Global Market
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Transcript of Group 8 Global Market
TAPPING INTO GLOBAL MARKETS
Group 8Nugraha Ngesti Wibowo
SuhartantoVina Octaryna
Major Decisions in International Marketing
Deciding whether
to go abroad
Deciding which markets to enter
Deciding how to enter the market
Deciding on the marketing program
Deciding on the marketing organization
Deciding Whether to Go Abroad
Better profit opportunities
Needs a larger customer
Reduce dependence on one market
Counterattack global competitors
Customers are going abroad
Four Stages of The Internationalization Process
No regular export activities
Export via independent agents
Establish sales subsidiaries
Establish production facilities abroad
Deciding Which Markets to EnterThe waterfall approach
Gradually entering countries in sequence.
Mode entry : sequential ( Hi-touch, food )
It allows firms to carefully plan expansion and is less likely to strain human and financial resources
The sprinkler approach
Entering many countries simultaneously
Mode entry :simultan ( Hi-tech, electronic )
It better when first-mover advantage is crucial and a high degree of competitive intensity prevails
Choose the countries based on…
Product & Geography
Political Climate
Income & Population
Key Emerging Markets
Brazil
Russia
India
ChinaIndonesia
South Africa
Regional Free Trade Zones
MERCOSUL
ASEAN
NAFTA
APEC
European Union
Desired Country Characteristics for Market Entry
Rank high on market
attractiveness
Rank low in market risk
Possess a competitive advantage
Deciding How to Enter the Market
Five Modes of Entry into Foreign Markets
Indirect Exporting
Domestic-based export merchantsBuy the manufacturer’s products and then sell them abroad
Domestic-based export agentsIncluding trading companies, seek, and negotiate foreign purchase for a commission.
Two advantages:
Less investment & less risk
Direct Exporting Methods
• Domestic-based export departmentA purely service function may evolve into a self-contained export department operating as its own profit center.
• Overseas sales branch or subsidiaryThe sales branch handles sales and distribution and perhaps warehousing and promotion as well.
• Traveling export sales representativesHome-based sales representatives travel abroad to find business.
• Foreign-based distributors or agentsThese third parties can hold limited or exclusive rights to represent the company in that country.
Licensing
The licessor issues a license to a foreign company to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty
Joint Ventures
Foreign investors joined local invetors with share ownership and control
Direct Investment
The foreign company can buy part or full interest in a local company or build its own manufacturing or service facilities
Globally Standardized Marketing Pros & Cons
Advantages DisadvantagesEconomies of scale Differences in consumer needs,
wants, usage patternsLower marketing costs Differences in consumer response
to marketing mixPower and scope Differences in brand development
processBrand Consistency Differences in environmentLeverage ideas quickly and efficientlyUniformity of marketing practices
Cultural Dimensions
Individualism vs. collectivism High vs. low power distance Masculine vs. feminine Weak vs. strong uncertainty
avoidance
What Marketing Aspects Might Be Adapted for International
Marketing? Product features Labeling Colors Materials Sales promotion Advertising media
Brand name Packaging Advertising execution Prices Advertising themes
The Ten Commandments of Global Branding
Understand the global branding landscape
Avoid shortcuts in brand building Establish a marketing
infrastructure Embrace integrated marketing
communications Establish brand partnerships
The Ten Commandments of Global Branding (cont.)
Balance standardization and customization
Balance global and local control Establish operable guidelines Implement a global brand-equity
measurement system Leverage brand elements
Five International Product and
Communication Strategies
Levels of Product Adaptation
Production of regional product versions
Production of country versions Production of city versions Production of retailer versions
Price Choices
Set a uniform price everywhere Set a market-based price in each
country Set a cost-based price in each
country
What is a Gray Market?
A gray market consists of branded products diverted from normal or authorized distributions channels in the country of product origin or cross international borders; dealers in lower priced countries sell products in higher priced countries
Whole-Channel Concept for International Marketing Seller International headquarters Channels between nations Channels within nations Final buyers
Country of Origin Effects
Building Country Images Consumer Perception of Country
of Origin
The Marketing Organization
Export Departments
International Divisions
Global Organization
INDOMIE
1971Indofood established
as PT. Panganjaya Intikusuma
1972Indomie first appeared as the first instant noodles in
Indonesia
1990 Establish a joint venture
with Seven-Up Netherlands BV (51:49), an affiliate company of
PepsiCo Inc. to enter the snack food industry (the joint venture has been transferred to ICBP in
2010 as part of the restructuring of the
Group CBP)
1994Renamed become PT
Indofood Sukses Makmur Tbk
1995Acquired Bogasari
1997 Acquired 80% stake in
group companies engaged in plantations,
agribusiness and distribution.
2004Acquired 60% stake in the carton packaging
company.
2005Formed a joint venture
with Nestlé SA for marketing culinary
products.
2006 Acquired 55.0% stake in
shipping company, Pacsari Pte. Ltd.
("Pacsari").Acquired several
companies plantation in West Kalimantan.
HISTORY
1982Fried noodlea were first made, Fried noodles now sold in more than 50 countries worldwide.
2011Indofood produces about 11 billion packs of instant noodles for the domestic and export markets.
Indomie is ranked number 1 and 2 in Ramen Rater Top Ten Instant Noodles.Indonesian distinctive flavor can be so universally accepted.
ABOUT INDOMIE
INDOMIE PENETRATION IN NIGERIA
Target Market Selection
Nigeria is a country that has the highest score in the per capita income aspects, population, competition, and political risk compared to other countries in Africa that Indomie decided to make Nigeria as an export destination and joint ventures with companies Dufil.
NIGERIA
The official name of the country: the Federal Republic of Nigeria (Federal Republic of Nigeria), composed of 36 states and one Federal Capital Teritory (FCT)
Total area: 923 768 km2
Layout & Conditions Geo .:4˚ LS, LU and between 3˚ 14˚ - 15˚ BT.North: desertMiddle: grasslands with rocksSouth generally swamp
Border Country:U: Rep. Niger S: Gulf of Guinea / Atlantic OceanQ: Rep. Cameroon and Rep. Chad B: Rep. Benin
Climate: Tropical (rainy season and dry season)
Social and Cultural
Consists of 250 ethnic:North ethnic- Hausa / Fulani 29%- Kanuri 4%Ethnic the south / west- Yoruba 21%,ethnic east- Igbo 18%- Ijaw 10%- Ibibio 3.5%- Tiv 2.5%.
Education
Basic Education (Primary Education) 6 years.
Secondary Education (Junior Secondary School and Senior Secondary School), 6 years old.
Academy / Polytechnic and the University of 4 years.
Assisted by the World Bank, UNESCO, UNICEF, USAID / DFID, ADB, the Government of Japan and JICA.
Health
• Rank-2 of people living with HIV / AIDS worldwide, (± 2.6 million people)
• Outbreaks of disease Cholera, Meningitis, Yellow Fever, Malaria, diarrhea, typhoid and Avian Flu (H5N1)
Security
Low security level prone to conflict, especially the northern and eastern regions.
Economy
Analisis Nigeria Food Industry SWOTStrength
• With a rapidly increasing population, Nigeria has the dynamic potential consumers
• The increasing purchasing power of the middle class will increase the food industry
• Nigeria produces a number of local primary agricultural crops and the fourth largest in the world cocoa farmers.
Weakness
• Per capita food consumption is still very low.
• Regulation of Nigeria is very weak.• Low level of security.
Opportunities
Per capita food consumption is expected to grow very strongly over the coming years.
Investments into the food industry can strengthen internal trading system, in addition to the wider range of consumer goods can reap wider consumer.
The high level of consumer nigeria citizens who have high incomes.
Threat
Competition from regional countries with a better business environment, such as Ghana, Nigeria can look lost on foreign direct investment.
SWOT
Choosing The Mode of Entry
Market size and growth:2013 consumption of instant
noodles for 350K-400K tons / yr Indomie: 200K tons / yr market
share of 70%
Internal Resources, Assets, and Capabilities : 90% materials product take from Nigeria
EXPORTING
In 1988
JOINT VENTURE
Bisnis Unit of TolaramSector • Digital services• Distribution• Energy • FMCG• Infrastructure• Paper• Real estate• Textile
• Geography• Estonia• Ghana• Indonesia• Nigeria• Singapore
Dufil Prima Foods PLC (www.dufil.com)
o Is the result of cooperation entities Tolaram Group and the Salim Group, which exclusively manufactures and markets INDOMIE, under a PT Indofood.
o Indomie instant noodles become a market leader in West Africao There are 3 locations manufacture of Indomie in Kaduna, Ota and Port
Harcourto Also produce flour, seasoning, packaging and palm oil to meet the instant
noodle production kebuthano Dufil business venturing pasta and cooking oil with brand Power Pasta &
Power Oil
2012 The third plant with most advanced automatic machinesin Kaduna
1995 The first factory in Ota Ogun State
The first noodle factory Nigeria
and the largest in Africa
1988
2001 second plant Choba, Port
Harcourt, Rivers State
Currently controls + 70% market share
Growth per year 40%
2012 awarded'Most Trusted
Brand'in Nigeria