Int Re National Marketing

8/3/2019 Int Re National Marketing

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BY

Prof.J.Varaprasad Reddy

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Introduction

What is GlobalMarketing?

How is it differentfrom regularmarketing?

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Stages of International Marketing

Involvement

1. No Direct Foreign Marketing2. Infrequent Foreign Marketing

- export operations3. Regular Foreign Marketing

- export operations, direct investmentsales operations, directinvestment production operations

4. International Marketing- fully committed and involved in

imternational marketing throughproduction and serviceoperations

5. Global Marketing- companies treat the world as one

market

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Introduction Marketing

Process of planning andexecuting the

conception pricing,promotion anddistribution of ideas,goods and services tocreate exchanges that

satisfy individual andorganization goals

Global Marketing Focuses resources on

global marketopportunities andthreats; the maindifference is the scopeof activities becauseglobal marketing

occurs in marketsoutside theorganizations homecountry

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The International Marketing Task

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Political/legalforces

Economicforces

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Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountry

market B

Environmentaluncontrollablescountrymarket C

Competitivestructure Competitive

Forces

Level ofTechnology

Price Product

PromotionChannels of

distribution

Geographyand

Infrastructure

Foreign environment(uncontrollable)

Structure ofdistribution

Economic climate

Cultural

forces

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7Political/

legal

forces

Domestic environment(uncontrollable)

(controllable)

Copyright2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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Domestic environment

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Domestic political decisions affecting marketing activities to

foreign markets (e.g. Libya, Iraq, South Africa, China)Domestic economic climate (e.g. strength of domesticeconomy = possibilities to invest abroad, value of currency(weakness of US$))

Competition in home country

International environment

Cultural, political and economic climates can changedramatically (e.g. China and Russia)


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Reasons for Global Marketing

Growth Access to new markets and access to resources

Survival

Against competitors with lower costs (due to increased

access to resources) e.g. India and China Or push and pull factors

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Overview of Marketing One of the functional areas of a business that isdistinct from finance and operations

Primary tools in marketing are product, price,

place, and promotion Marketing is an activity that comprises the firms

value chain

Current trend is to involve marketers in all value-

related decisions called boundaryless marketing

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Boundaryless Marketing

Goal is to eliminatecommunicationbarriers betweenmarketing and otherbusiness functionalareas

Properlyimplemented it

ensures that a marketorientationpermeates all valuecreating activities

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Goal of Marketing Surpass the competition at the task of creating

perceived value for customers

The Guide line is the value equation

Value = Benefits/Price (Money, Time, Effort, Etc.)

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Value Chain and Boundaryless Marketing

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Competitive AdvantageSuccess over competition in industry atvalue creation

Achieved by integrating and leveragingoperations on a worldwide scale

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Globalization Globalization is the inexorable integration of

markets, nation-states, and technologies to a

degree never witnessed before - in a way that isenabling individuals, corporations, and nation-states to reach around the world farther, faster,deeper and cheaper than ever before, and in a waythat is enabling the world to reach intoindividuals, corporations, and nation-statesfarther, faster, deeper, and cheaper than everbefore.

Thomas Friedman

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Global Industries An industry is global to the extent that a companys

industry position in one country is interdependent with itsindustry position in another country

Indicators of globalization:

Ratio of cross-border trade to total worldwideproduction

Ratio of cross-border investment to total capital

investment

Proportion of industry revenue generated by companiesthat compete in key world regions

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Competitive Advantage, Globalization and

Global Industries Focus

Concentration and attention on core business andcompetence

Nestle is focused: We are food and beverages. We are notrunning bicycle shops. Even in food we are not in allfields. There are certain areas we do not touch..We haveno soft drinks because I have said we will either buyCoca-Cola or we leave it alone. This is focus.

Helmut Maucher

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Global Marketing: What it is and What it

isnt Strategy development comes down to two main issues

similar to single country marketing

Target market

Marketing Mix

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isnt

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isnt Global marketing does not mean doing business in all

of the 200-plus country markets

Global marketing does mean widening businesshorizons to encompass the world in scanning foropportunity and threat

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Standardization versus Adaptation Globalization (Standardization)

Developing standardized products marketed worldwidewith a standardized marketing mix

Essence of mass marketing

Global localization (Adaptation)

Mixing standardization and customization in a way that

minimizes costs while maximizing satisfaction Essence of segmentation

Think globally, act locally

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Standardization versus Adaptation

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The Importance of Global Marketing For US-based companies, 75% of sales potential is

outside the US. About 90% of Coca-Colas operating income is

generated outside the US. For Japanese companies, 85% of potential is outside

Japan.

For German and EU companies, 94% of potential is

outside Germany.

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Environmental adaptation

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To adapt marketing programs to foreign markets certain

amount of adaptation is needed (take uncontrollableelements into consideration)

In broad sense the uncontrollable elements constitute theculture the difficulty is in the recognition of the culturalimpact

The problem in adapting to foreign markets is self-referencecriterion (SRC) and an associated ethnocentrism

SRC is an unconscious reference to ones own culturalvalues, experiences and knowledge as a basis for decisions

ethnocentrism: ones own culture knows best how to dothings

To avoid this misconception remember that it makes sensefor the other person to do things in his/her own way, if youdont remember this you might fail in recognizing culturaldifferences and the importance of those differences


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Management Orientations

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Ethnocentric:

Home country is

Superior, sees

Similarities in foreign

Countries

Regiocentric:

Sees similarities anddifferences in a world

Region; is ethnocentric or

polycentric in its view of

the rest of the world

Geocentric:

World view, sees

Similarities and

Differences in home

And host countries

Polycentric:

Each host country Is

Unique, sees differences

In foreign countries


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Strategic orientation to

international markets

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Domestic Market

Extension (Ethnocentric)

Multi-Domestic Market (Polycentric)

Global Marketing (Regio/Geocentric)

Concept EPRG Schema

Copyright2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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It is expected that differences in the complexity andsophistication of companys operations depend on

which orientation guides its operationsAmong the approaches describing the orientations from

casual exporting to global marketing is EPRG schema- in this schema the firms are classified as

ethnocentric, polycentric, regiocentric or geocentric

depending on the international commitment of thefirm

- in this schema it is also assumed that the degree ofinternationalization to which management iscommitted or willing to move affects the specific

international strategies and decision rules of thefirm

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Domestic market extension orientation


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It views its international operations as secondary and as anextension of its domestic operations

The primary motive is to market excess domesticproduction

Minimal, if any, efforts are made to adapt the marketing mixto foreign markets

In EPRG schema these companies are classified asethnocentric

Multidomestic market orientation

A company guided by this orientation has a strong sensethat country markets are vastly different and that marketsuccess requires an almost independent program foreach country => development of country basedmarketing strategies

Control is usually decentralizedIn EPRG schema these companies are classifies as

polycentric


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Global marketing orientation

A company guided by global marketing orientation is referred toas a global company: its marketing activity is global and itsmarket coverage is the world

It develops a standardized marketing mix applicable acrossnational boundaries

In EPRG schema these companies are regiocentric orgeocentric


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Forces Affecting Global Integration and

Global Marketing Driving Forces

Regional economicagreements

Market needs and wants

Technology

Transportation andcommunicationimprovements

Product development costs Quality

World economic trends

Leverage

Restraining Forces Management myopia

Organizational culture

National controls

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Forces Affecting Global Integration and

Global Marketing

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GlobalIntegration

and

Global

Marketing

Int Re National Marketing

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