MARKETING ACROSS BORDERS

Professor Dr Demetris VrontisDean, School of Business

President, EuroMed Research Business InstituteEditor, EuroMed Journal of Business

Chartered Marketer and Chartered Business Consultant Email: vrontis.d@unic.ac.cy

Professor Dr Ivana FirstAssistant ProfessorUniversity of Rijeka

Email: ifirst@efri.hr

…when marketing activities take place in more than one country.

The foundation for a successful international marketing program is a sound understanding of the marketing discipline.

INTERNATIONAL MARKETING

Marketing = Promotion?Marketing = Advertising?Promotion = Advertising?

Marketing = Communications?Marketing = Selling?

Marketing = ??? what ???

SO, WHAT IS MARKETING?

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

(The American Marketing Association)

WHAT IS MARKETING?

MARKETING PROCESS

Needs - states of felt deprivation including physical needs for food, social needs for belonging and

individual needs for self-expression.

Wants - form that a human need takes as shaped by culture and individual personality.

MORE SIMPLY: MARKETING IS ALL ABOUT SATISFYING

NEEDS AND WANTS

I want a Coca-Cola!

I am thirsty!

Do customers have the same wants?Do they perceive things the same

way?

Is that culturally determined?

WHICH WOMAN DO YOU WANT TO GET

TO KNOW?

Bjerke and Polegato (2006): different cultures do not interpret beauty and health symbols equally

Mittelstaedt, and Hopkins (2003) discovered that social needs are the strongest motivator, followed by esteem needs, physiological needs (although somewhat modified to the working environment conditions), safety needs and self-actualisation needs.

Maslow

Although marketing is universal, marketing practice

varies from country to country.

Each country is unique/different. This is true for

customer needs and wants, competitive structure,

channels of distribution, available media, technological

advancement, political system, cultural and economical

factors.

THEREFORE

ProductGood or Service

ProductGood or Service

PriceAssignment of Value

PriceAssignment of Value

PlaceAvailability of Product / Distribution

PlaceAvailability of Product / Distribution

PromotionActivities to Inform Consumers

PromotionActivities to Inform Consumers

A firm blends a set of controllable tactical marketing tools (marketing mix = 4P+) to produce the response it wants in the target market

MARKETING MIX

channels of distributionchannels of distributionavailable mediaavailable mediacompetitive structurecompetitive structure

technological advancementtechnological advancement

needs and wantsneeds and wants

economical factorseconomical factors political system political system cultural factorscultural factors

PRODUCT

PROMOTION

1. Annoyed/irrittated - why do they bother me? I paid enough for the ticket. They can do it themselves

2. No feelings – it is normal

3. Proud and responsible – I contribute to mother earth

PRODUCT

• Are wind turbins good? • Do you think they produce some kind of polution? • Is it a funny argument for you?

• Why could SMART never be a US car?

• Have you ever heard of visual polution?

PRICE

• Price itself – how high is it? – not cultural

• Price expression (measurements USD per gallon/per liter) -cultural

• Discount expressions • original price – 10 EUR, discount 10%, • original price – 10 EUR, discount 1 EUR

• Space for negotiation

PRICE

• What is charged?

• Aperol – experience or product?

• Best business model? a)Fax machine is gifted but you pay provision

on each copy made (0,002 EUR/copy) – 500 000 copies expectd a year

b)Fax machine is gifted but regular maintainance is charged (1000 EUR/year) – life expectancy 5 years

c) Fax is sold for money (5000 EUR), maintaining is free of charge for the first 5 years

DISTRIBUTION

• Where to buy fruit and vegetable? Open market or supermarkets?

• What about fish?

• Do people buy bread as a part of weekly shopping or daily?

• What about reverse distribution?

PROMOTION

ADAPTATION, STANDARDISATION OR ADAPTSTANDATION?

Reasons Pulling Towards

Adaptation

1. Market development2. Economic differences3. Culture4. Customer perception5. Competition6. Technological7. Sociological8. Differences in physical conditions9. Legal / political environment10. Level of customer similarity11.Marketing infrastructure

Reasons Pulling Towards

Standardisation

1. Economies of scale in production, research and development and promotion2. Global uniformity and image3. Consistency with the mobile consumer4. Easier planning and control5. Stock costs reduction6. Synergetic and transferable experience

Product1. Product or service variety, design, features2. Quality3. Brand name4. Packaging, styling5. Size and colour varieties6. Performance7. Image8. Pre-sales service9. Delivery, installation10.After-sales service, warranties

Price1. Price levels, list price, price changes2. Discount allowance, payment period, credit terms

Promotion1. Advertising2. Sales promotion3. Personal selling4. Direct marketing5. Public relations

Place1. Distribution channels, distributors value, place of shops, logistics

People

Physical evidence

Process management

Factors Affecting the Importance of Reasons and Elements1. Industrial sector2. Business to business, business to consumer3. Product/Service category4. Places and continents5. Entry method6. Delegated authority to foreign subsidiaries7. Relationship with different foreign subsidiaries8. World-wide turnover9. World-wide number of employees. Vrontis, 2003

Questionnaire survey on marketing directors of500 companies across all industrial sectors

Vrontis, D. (2003), “Integrating Adaptation and Standardisation in International Marketing, The AdaptStand Modelling Process”, Journal of Marketing Management, Vol.19, No. 3-4, pp.

283-305 (ISSN: 0267-257X-Westburn Publishers).

1 2 3 4 5 6 7

Product

Process management

Physical evidence

People

Place

Promotion

Price

3,13

3,85

3,88

3,90

4,39

4,64

5,25

Comparison of means

Tactical Behaviour 1 Standardised 4 Neutral 7 Adapted

RESEARCH METHODOLOGY

   

Percentage1 Culture 93

2 Market development 87

3 Competition 84

4 Legal environment 82

5 Economic differences 78

6 Sociological 74

7 Differences in customer perceptions 71

8 Technological 60

9 Political environment 53

10 Level of customer similarity 49

11 Marketing infrastructure 44

12 Differences in physical conditions 

39

ADAPTATION REASONS

Reasons in order of importance

  Reasons in order of importance Percentage (%)

1 Global uniformity and image 81

2 Economies of scale in production, R.&D. and promotion

75

3 Synergetic and transferable experience and efficiency

74

4 Consistency with the mobile consumer 52

5 Easier planning and control 48

6 Stock costs reduction 43

STANDARDISATION REASONS

Neither total adaptation nor complete standardisation represents business responses.

It is suggested that companies make choices which relate to key determinants in each circumstance. Multinational

companies’ tactical and strategic behaviour is integrated as a result of several reasons ‘pulling’ it towards the one or

the other side of the continuum. The AdaptStand Process is the process of integrating

Adaptation and Standardisation in international marketing tactics. This decision could only be made after an in-depth

consideration of reasons pulling and factors affecting marketing behaviour.

ADAPTSTANDATION