Basic aspects of international marketing


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Basic aspects of international marketing

  1. 1. Basic aspects of International MarketingThere are three basic aspects of International marketing are as follows:-  The new product development process  Demand management  Sales marketing process (1) The new product development process can be defined as follows:-This process characterizes itself as integration between Marketing, R&D/Engineering andManufacturing. Besides, several operating levels are active within the new productdevelopment process.The steps shown in figure will be explained below:Product idea generationThe first step in the process means the creation of a large number of product ideas. Newproduct ideas can come from many sources: customers, scientists, competitors, company(sales) people or channel members, etc. However in order to eliminate unpromising productideas in the NPD process as early as possible, and to ensure that the development efforts fitinto a firms product strategy, the process must be closely tied to the strategic (marketing)planning .Idea screeningAs the purpose of idea generation is to create a large number of ideas, the purpose of thesucceeding stages is to reduce the number of ideas to an attractive practical few. The firstidea-pruning stage is screening. During the idea screening stage, the ideas are analyzedagainst a set of predetermined criteria, to determine which ideas are pertinent and appropriatefor the company. The product ideas have to match with company objectives, (product line)strategies and resources. Therefore, a variety of tools and techniques have been provided, toassist in screening new product ideas, including rating scale and checklist models of productsuccess/failure discriminators.
  2. 2. Business analysis and forecastingBefore the screened idea will further be developed into a prototype, first production cost,profitability and demand have to be forecasted, for example, by using the followingtechniques: PERT(=Program Evaluation Review Technique) or CPA(=Critical PathAnalysis). With these techniques there can be given an answer to the following questions:"Can we make it?", "Should we make it?" and "Can we sell it?”Product development and testingWhen the answers to the above questions are positive, the approved idea can be furtherdeveloped into a prototype and finally in a physical product. Then will be tested if theproduct is safe and efficient.Market testingAfter the company is satisfied with the products functional performance, the product is readyto be dressed up with a preliminary marketing program and to be tested. The purpose ofmarket testing is to learn what the products impact is in a competitive environment and howcustomers and dealers react to handling, using and purchasing the actual product. This willprovide much more accurate details on market acceptance and thus, sales and profit.Market research and commercializationThe final stage of the new product development process is commercialization. At thecommercialization stage the marketing manager must ensure he has the answers to thefollowing questions: when the product will be launched, to whom, where and how. (2) Demand management processTo get funding for PRODUCT-enabled projects, its necessary to navigate the PRODUCTdemand management process to prove that you are investing wisely in PRODUCT.Unfortunately, the process can be as bad as its name. Bad, but necessary, given theunquenchable thirst for PRODUCT services and the fact that, according to my survey (still inprocess), Over 50% of business and PRODUCT leaders agree that business leaders make half-baked requests and are clueless about enterprise impact Nearly 60% of business leaders admit that they want it all — right now — regardless of ROI Almost 35% admit of business leaders admit to getting enamored with PRODUCT fadsAs PRODUCT becomes embedded within every aspect of the business, theres an infinitenumber of great ways to apply technology and a lot of business leaders find themselvescompeting for the same resources. "Demand management" is a governance process to allocatelimited PRODUCT resources to benefit the enterprise as a whole. When fully implemented,demand management provides business leaders the information and capabilities to understand
  3. 3. PRODUCT costs, evaluate potential investments and convert PRODUCT-enabledinvestments into business results. Demand management consists of six components: Strategic planning provides the prioritization context for all investments, including what PRODUCT-enabled capabilities are required, how much can be spent on PRODUCT, what return is expected, and how PRODUCT will be managed to promote and protect enterprise interests while encouraging business unit innovation Portfolio management translates strategy in to how much should be spent on each of the three types of PRODUCT-enabled investments (e.g., strategic, enhancement, and keeping the lights on) and, on an ongoing basis, is used to guide decisions and facilitate cross- organization project review Decision rights are allocated to ensure responsible PRODUCT decision making consistent with the principle that business leaders should have the authority to decide "what" PRODUCT is needed while PRODUCT leaders should have the authority to decide "how" PRODUCT is delivered Financial planning determines the actual amount of funding available for PRODUCT- enabled investments and allocates the funding in budgets consistent with the strategic plan, portfolio targets and decision rights Prioritization and funding decisions occur on an ongoing basis across and down the organization in line with decision rights and criteria established during strategic planning, portfolio management, and financial planning Value management reinforces accountability for realization of tangible business value by reviewing projections, ascertaining commitments, monitoring results. The fact that only 5- 10% of companies hold their business leaders accountable for business value from PRODUCT-enabled investments is a huge opportunity for you. If you are willing to promise to deliver measurable results, you will go to the front of the line
  4. 4. Yes, the demand management process can be onerous, unless you know how to play thegame. When proposing investments: Align with enterprise strategies and clearly define the desired outcomes Deliver value with your proposed initiative early and often to justify both one-time and ongoing costs and resources Show how your project will enhance cross-enterprise collaboration and integrate critical processes, information and technology Assign the best and brightest employees Demonstrate how your proposals will leverage existing technology, improve systems performance, reduce "keeping the lights on" costs, and mitigate risks (3) Sales marketing process:The Sales marketing planning and control process is often defined asThe process of defining the action steps, priorities and schedules by which the marketingstrategy will be implemented and making sure that the company is achieving the objectivesthat are stated in the marketing plan within the determined budget.The following steps and activities can be distinguished:- Figure: The Sales Marketing Planning and Control processThe assumption is made that the output of this process, called the marketing plan bymarketing people, covers a time period of one year. The input of the annual marketing plan isthe strategic marketing plan, which is the output of the preceding process. When it concernsan international company, it means that the marketing planning and control process will be
  5. 5. done on Product Group-level. As consequence of this, a more standardized Pan European orworldwide marketing plan becomes feasible, leading to many advantages in efficiency andeffectiveness.The steps shown in the figure above will be explained below:Research of marketing mix and controlLike the strategic marketing planning process, this process also begins with research andanalysis of the marketing and consumer environment. Besides, research for the marketingmix is necessary, which is focused on sensitivity analysis to various elements of themarketing mix, analysis for reseller satisfaction, market response, goal achievement, etc.Financial forecastingBefore the annual objective can be determined, the financial situation has to be forecasted.On the revenue side it shows forecasted sales volume and average realized price, on theexpense side it shows the forecasted cost of production, physical distribution and marketing.The difference is the expected profit.Objectives settingThe annual objectives can be stated for the one year strategy (for example, increase marketshare by x% or improve brand awareness by y% in that year) as well as for specificstatements concerning marketing activities. An example of a specific statement is: decreasecost of sales force as a percentage of sales, improve advertising awareness or improvingcompany image. These statements have to be quantified and a time horizon has to be set.Marketing strategy and action programWhen the objectives have been set, the marketing managers have to refine the strategicmarketing plan to the annual marketing plan. Specific marketing tactics have to be developedbesides the action programs. The action programs contain the marching orders in response tothe question "How will we get there?", and the actual steps by which strategies will beimplemented to reach the established objectives.ControlThe last step of the marketing planning and control process is control, which forms a distinctprocess itself. The control of the annual marketing plan will be handled by the managementof the PMC.To implement the marketing strategy, marketing management has to decide what level ofmarketing expenditures is necessary to achieve the marketing objectives. The total budget hasto be allocated among the several marketing activities and tools in the marketing mix duringthe implementation of activities; the company has to review the process of marketing andsales activities regularly throughout the year. These reviews provide an opportunity to listento weak signals and to redirect any parts of the planned action program that are off target