International Marketing        463-441 (3-0-3)       Introduction
Murray Hunter    murrayhunter58@gmail.com     murray@unimap.edu.my             Telephone:       6019 5233801 (Malaysia)   ...
What We are Going to Cover in this unit            •The Global Environment & International                        Marketin...
3 Assignments 80%  Presentations 10%Class Participation 10%
ability to research theSmall Research Thesis                       dynamics                                        of the ...
A Case Study                    20%about a product/market in an international setting The case study will be presented as ...
the selection of a product and targetinternational market to undertake a study upon   submission of both a report and form...
Books/References  Cateora, P., R., and Graham, J.,    International marketing, 13thEdition, McGraw-Hill, New York, 2007.
What is a Product?
Anything that can offered to a  market that will satisfy a want or               need. It includes physical objectives, se...
TheThe Level of   BrandingCompetition    Paradigm                      The                  Channel of                  Di...
What is a Market?The set of all actual and potential buyers of a  product or service
Market Segment    A group of consumers whorespond in a similar way to a given      set of marketing efforts
Arranging is market positioning? a     What for a product to occupyclear distinctive and desirable placerelative to compet...
Examples of Market Positioning                                             1. Line extensions2. Different Pack Sizes      ...
Same Product – Different                         PositioningDifferent Market
Low End Strategies                                                • Match Medium End                                      ...
How Different People Look at          Markets
Small holder Farmers• Production orientated    • Little (if any) planning• Passive Marketers                         • Dou...
Production Approach
Usually  OEMProduction
Sales Approach
Marketing Approach
The Marketing MixProduct                 Customer Solution                           Customer Cost  PricePosition         ...
Product Life Cycle• Getting shorter             • Changing tastes  • 33% sales from            • Changing Technologyproduc...
First Part of the ProductDevelopment Process                            Developing Product                               S...
Cont.                      Further Formulation                          Development                      Manufacturing Sys...
Entrepreneurial approach
The Creativity                          IdeaSummarisedEntrepreneurial                  Turn into OpportunityProcess    Inn...
Ideas        Opportunities        Solutions          Realisation            Performance                                   ...
Technology Approach
Tissue Culture
SME Approach
The Outcomes                                                     (potential targets)                           Key interna...
Profile of business in terms of performance:PerformanceBase            • Market trends: current product mix, market mix, c...
Environmental Analysis: Threats and Opportunities  Market: product position and prospects      Competition: Traditional, n...
Sources of Competitive Advantage     (The reason for any product development in a company)          Importance of price to...
Many Factors Change Markets and Give rise to Opportunities                   Social                   Social and cultural ...
Areas of Firm Innovation
Technology/Market Positioning              Hotel Coffee Shop            Coffee Bean   HighStyle                Kedai Kopi ...
Product Life Cycle• Getting shorter             • Changing tastes  • 33% sales from            • Changing Technologyproduc...
Potential                 Product Lifecycle                     IP Value &Profitability                                   ...
Figure 6.7. The Product Life Cycle Has Shortened Dramatically Over the Last 50YearsPharmaceuticals Food Items    Tools    ...
Product EvolutionPre 1900’s                         Laundry BlueUp to Late 1940’s        Solid Soaps &                    ...
Can we predict the future?
Present                    timeThe Past                       A Radical change in                                   techno...
Innovation & Invention
Products more than 5 years old   usually don’t make major contributions to a company’s            revenue          •Techno...
Vanilla Breakthrough?                            EvolutionNew Flavour – New Product
Evolution Verses Revolution       Changing Technology       (slow to Change)       Changing Lifestyles       Cheap Clothes...
Examples of Innovation
Examples of Innovation
Examples of Innovation
Cationic Breakthrough?
To soap or not to soap?
InventionLess than 2% of filed patents are ever commercialisedDoes a new invention have consumer benefits or create anycom...
New Knowledge Innovation is the         most riskyBetter to focus on other sources of innovation: ie, applications of exis...
Table 6.1. Drucker’s Sources of Innovation       Source                                   Explanation                     ...
Types of InnovationType                Description                    ExamplesInvention   Totally new product             ...
1930s1960s1950s1800s1980s1970s  2006 1990s
“Too much focus onprocess, on a static agenda, while it may get a lot done  initially, will tend to drivecore competencies...
Practice/Process Trade-offInnovation                      Optimal Innovation Area                                         ...
Definition: International Marketing involves  Establishing and CoordinatingMarketing Activities Across National           ...
Lecture 1      The Global Environment& International Marketing Concepts
1. Historical Market Evolution      2. Drivers to International Marketing    3. Our place in the international Market4. Th...
Domestic Market                                              Competitors                      Tastes           Trends     ...
Source: http://en.wikipedia.org/wiki/Image:PeriplusMap.jpg
http://www.history.upenn.edu/coursepages/hist086/material/frank_map8a.jpg
History of the Development of the Malay Archipelago
• Portuguese                                        • The Dutch                                                      • Bri...
Colonial and Post Colonial Companies
• Companies here to benefitfrom comparative advantage• Companies  here to exploitthe local market
http://www.irows.ucr.edu/cd/courses/122/b10toch17_files/image092.jpg
Tech & Travel Capitalism                                                            Financial Capitalism                  ...
Globalism Vs. Localism
Thai     Hong Malay          Fashion    KongFashion                    Fashion
Breakfast in the World  OrWhere is this?    Thailand           Australia
Cuisines with most potential for growth North America                  Europe            South America              Asia/P...
Geography                                                   (Climate, Topography, Flora, Fauna, Microbiology)             ...
Culture   Theories in action                          Stories, myths, heroes, artifacts, informal                         ...
Interpersonal InteractionsNetworking                                       Team/Individual                                ...
FMCG Market Fragmentation/Concentration Comparison Between Malaysia, Thailand, Hong Kong                            and Au...
Malaysian Retail                            ManufacturerMarketChannels & Structure                                        ...
Australian RetailMarket Channels and    ManufacturerStructure                                        Sales Broker         ...
Fulfillment: (dreams)                   Actualisation                    (The Artist)                                     ...
http://www.brandingstrategyinsider.com/all_of_derricks_posts/index.html
Geert Hofstede studied 88,000 employees of one MNC over sixty-seven countries to develop a framework for understanding cul...
• Power-distance relationships:  the extent to which people accept that  power is distributed to individuals and     insti...
•Uncertainty avoidance:                               the extent to which people feel                              threate...
Masculinity:         the nature of dominant values  in the organisation such as assertiveness                and directnes...
Trompenaars and Hampden-Turner postulate that culture is an extremely complex phenomenon which cannot be easily rationalis...
Individualism verses Communitarianism   Individualists are orientated towards the self      and family, while communitaria...
Specific verses Diffuse Specificists tend to separate relationships between business and personal lives, where diffusists ...
Sequential verses SynchronicSequential view time as separate periods and are orientated with the present, while synchronic...
Country                        Cultural      Dimensions - Ranking for Selected Countries               Power           Ind...
Malaysia: Cultural Dimension Ranking By Race                               Overseas Chinese      Malays        IndiansPowe...
How are pick ups advertised in Thailand?        http://www.uwsp.edu/geo/courses/geog100/CarCult-Ideol.htm
What affect does culture have on consumer tastes and preferences? What affect does culture have on necessary product form ...
A Market Typology                                                                    Developed                            ...
Still many market gaps      Poor Innovation                       Large customers developing                       bringin...
Strategic Decisions Related To Stage of Development                                                              StagesStr...
Solely Focused on       Company covers partial ofDomestic Market         complete domestic market.                        ...
Company                 The company saves on freight and tariffs throughmanufactures            manufacturing the product ...
Marketing Company                                           Manufacture & MarketManufacture & Market                      ...
The Drivers of International Marketing
Geographic, Climatic & Resource Factors
Production Layouts                        Logistics                               R&D                Economies of scales a...
New markets                 New Products              Growing Affluence
Networking
Different types of      Networks  Support Networks Resource NetworksRegulatory NetworksDevelopment Networks       Two elem...
Business is close up and       personal
Different levels of business require different types of       relationships
The Way of Doing Business     -Merchandising
Ways of doing business and education changing
Almost universally, Large organisations will bully small organisations in        Malaysia
Guanxi
Different Origins,backgrounds, personalities,  interests, approaches
Education            Generation Gap
Market Fragmentation
Centralisation
So What are the Barriers to      Networking?
• Social Background                           • Latent Peer Group• Ethnic Background• Education Background• Domicile (Rura...
Identify theStakeholders
Logistics
Growing Intellectual Property
Figure 9.1. Worldwide Patent Filings                                               Non-Resident Filed Applications        ...
Figure 9.2. Twenty Largest Patent Filing Countries 2004                 Poland                    Italy             Argent...
Figure 9.3. Number of Resient Patent Filings per Million Population 2004            M exic o         5                Indi...
Figure 9.4. International Patents Filed by Residents in Asia-Pacific                             Region 2006         Vietn...
Figure 9.5. Resident Patent Filings per USD 1.0 Million R&D                       Expenditure                         0.08...
Figure 9.6. Major Categories of International Patent Applications 2006                                 Consumer Goods &   ...
Electrical devices &                                              12%                               Audio-Visual          ...
Figure 9.8. Integration between a Firm’s Core Mission and Intellectual Property                         1. Recognition    ...
Figure 9.9. The General Tools of Intellectual Property in Business Strategy                                       Influenc...
Figure 9.10. IP/market scenarios with competitive advantage in slow and             fast technology emerging industriesRel...
Innovation is needed to convert any factor  into a source of competitive advantage
New Technologies
New Business Models
EntrepreneurshipOpportunity Discovery
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
International Marketing Lecture 1
Upcoming SlideShare
Loading in...5
×

International Marketing Lecture 1

1,338

Published on

International marketing Lecture 1

Published in: Education, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,338
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
65
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

International Marketing Lecture 1

  1. 1. International Marketing 463-441 (3-0-3) Introduction
  2. 2. Murray Hunter murrayhunter58@gmail.com murray@unimap.edu.my Telephone: 6019 5233801 (Malaysia) 0843 3134105 (Local)Available Weekends (Most) &Mondays before & after lectures
  3. 3. What We are Going to Cover in this unit •The Global Environment & International Marketing Concepts •International Marketing from the ASEAN region perspective • The basic tools of marketing redefined in the international context •Identifying International Market opportunities and undertaking market research •Formulation of market entry strategies •International new Product Development •Company readiness for international markets •International Supply chain approach •Negotiation and international regulation •Trends in International Marketing
  4. 4. 3 Assignments 80% Presentations 10%Class Participation 10%
  5. 5. ability to research theSmall Research Thesis dynamics of the topic and argue their case 8-12K words should be commenced during the first week of class 40%
  6. 6. A Case Study 20%about a product/market in an international setting The case study will be presented as a written report and presentation An allocation of marks will be reserved for student’s defence of their conclusions
  7. 7. the selection of a product and targetinternational market to undertake a study upon submission of both a report and formal presentation the construction of a general business model and strategy to successfully enter the product in the target market This assignment will involve using all the tools and skills learnt during the course This will also be a group assignment. 30%
  8. 8. Books/References Cateora, P., R., and Graham, J., International marketing, 13thEdition, McGraw-Hill, New York, 2007.
  9. 9. What is a Product?
  10. 10. Anything that can offered to a market that will satisfy a want or need. It includes physical objectives, services,events, persons, places, organisations, and ideas.
  11. 11. TheThe Level of BrandingCompetition Paradigm The Channel of Distribution
  12. 12. What is a Market?The set of all actual and potential buyers of a product or service
  13. 13. Market Segment A group of consumers whorespond in a similar way to a given set of marketing efforts
  14. 14. Arranging is market positioning? a What for a product to occupyclear distinctive and desirable placerelative to competing products in theminds of target consumers
  15. 15. Examples of Market Positioning 1. Line extensions2. Different Pack Sizes 3. Different Price/consumer categories
  16. 16. Same Product – Different PositioningDifferent Market
  17. 17. Low End Strategies • Match Medium End Quality or lower Medium End • Compete on Price (?) Low End • Incentives to retailers In this case: Medium end was once the high end, then company redefined the market by adding an extra premium product. Medium End Strategies Normally medium end product have very limited strategies • Benchmark Quality other than price to utilise. • Price Reference Australia: very few medium•end products, Malaysia many Strong General Media High End Strategies • High QualityHigh End • Premium Price • Targeted Niche • Specialised Media Campaign
  18. 18. How Different People Look at Markets
  19. 19. Small holder Farmers• Production orientated • Little (if any) planning• Passive Marketers • Doubtful sustainability• Follow Pricing mechanism
  20. 20. Production Approach
  21. 21. Usually OEMProduction
  22. 22. Sales Approach
  23. 23. Marketing Approach
  24. 24. The Marketing MixProduct Customer Solution Customer Cost PricePosition ConveniencePromotion Communication
  25. 25. Product Life Cycle• Getting shorter • Changing tastes • 33% sales from • Changing Technologyproducts less than 5 years old • Product Evolution
  26. 26. First Part of the ProductDevelopment Process Developing Product Specifications Market & Product Concept & Prototype Planning Generation Product Packaging Design Registration Further Formulation Development Continued
  27. 27. Cont. Further Formulation Development Manufacturing System Design Final Packaging & Optional Today Formulation Review Test Marketing/ Pilot ProductionPost Launch ProductModifications Marketing Review Refining of Product Before Major Launch Major Launch
  28. 28. Entrepreneurial approach
  29. 29. The Creativity IdeaSummarisedEntrepreneurial Turn into OpportunityProcess Innovation Final Commitment NPD Start-Up Strategy Growth Sales Sustainability
  30. 30. Ideas Opportunities Solutions Realisation Performance Management Capability Spots Evaluates Selects TargetsCreativity Innovation Strategic Thinking Differentiation Competitive Capabilities Governing Competitive Advantage Scope Costs: to customers Knowledge: Industry/market/technical/p Competencies rocess Entrepreneurial, Opportunity Relationships: Identification, Network, Conceptual, Customers/suppliers/distri Organisational, Strategic, Commitment, butors/relative power Resources Structure: Ability
  31. 31. Technology Approach
  32. 32. Tissue Culture
  33. 33. SME Approach
  34. 34. The Outcomes (potential targets) Key internal The process of Key external influences on the product/market influences on theSize and depth of change development development development Time process process The base potential for development Where the business is currently performing Gibb & Scott 1988
  35. 35. Profile of business in terms of performance:PerformanceBase • Market trends: current product mix, market mix, competition • Production trends: Utilisation, efficiency, quality •Financial and Management: net worth, liquidity, gearing, trendsKey internalinfluences on Administrative, marketing, production and Managerialthe resources and capabilities.developmentprocessKey external Competition, market restrictionsinfluences onthe developmentprocess All influence the type of product and market development that will take place
  36. 36. Environmental Analysis: Threats and Opportunities Market: product position and prospects Competition: Traditional, new firms, new industries, profits Technology: Changes and developments The Economy: Growth, inflation, Law Operating Needs Personal Business Strategies Operating & Tactics ProductsObjectives Objectives Budgets Manpower Finance Feedback loops Business Analysis: Strengths and WeaknessesProduct: 4 Ps or 4 customer wants Profit/Cash flow: its sources and usesPeople: Management and Skills Facilities: age, technology and utilisation Burns & Dewhurst 1993
  37. 37. Sources of Competitive Advantage (The reason for any product development in a company) Importance of price to customers, distributors, the extend ofCosts: demand elasticityKnowledge: Stage of industry lifecycle, common industry knowledge verses your own specialised knowledge Links with customers, suppliers, distributors, relativeRelationships: power Appropriate organisational structures, Ability to respondStructure: to market, leadership.
  38. 38. Many Factors Change Markets and Give rise to Opportunities Social Social and cultural trends and drivers. Reviving historical trends Product Opportunity Gap Economic State of the economy Technology Shift in focus on where State of the art and to spend money emerging Level of disposable technology income Re-evaluating existing technology Cagan, J. and Vogel, C., M., (2002),
  39. 39. Areas of Firm Innovation
  40. 40. Technology/Market Positioning Hotel Coffee Shop Coffee Bean HighStyle Kedai Kopi Fast Food Low Low High Technology
  41. 41. Product Life Cycle• Getting shorter • Changing tastes • 33% sales from • Changing Technologyproducts less than 5 years old • Product Evolution
  42. 42. Potential Product Lifecycle IP Value &Profitability Novelty IP Va lue Competitive Concept Risk Taking Risk Taking it of Pr Pioneers Early Early Late Late followers Majority Followers Time Majority
  43. 43. Figure 6.7. The Product Life Cycle Has Shortened Dramatically Over the Last 50YearsPharmaceuticals Food Items Tools Fifty Years Ago Toys Today Cosmetics 0 10 20 30 Length of Life Cycle (Years)
  44. 44. Product EvolutionPre 1900’s Laundry BlueUp to Late 1940’s Solid Soaps & Powders Laundry Detergent Bars1950’s until present Laundry Detergents Powders Laundry Detergents with Liquids Special Detergents Additives Concentrated1980’s until present Laundry Powders Laundry Detergent Tablets
  45. 45. Can we predict the future?
  46. 46. Present timeThe Past A Radical change in technology Will radically This changes the change the parallel of the a timeline into market gradually new industryWe know the past The effect of competitor and present Without any changes our innovation will bring timeline will remain product evolution relatively unaltered
  47. 47. Innovation & Invention
  48. 48. Products more than 5 years old usually don’t make major contributions to a company’s revenue •Technology •Consumer style change
  49. 49. Vanilla Breakthrough? EvolutionNew Flavour – New Product
  50. 50. Evolution Verses Revolution Changing Technology (slow to Change) Changing Lifestyles Cheap Clothes Available (substitute) Had to Reinvent the Company due to Slow Product Development
  51. 51. Examples of Innovation
  52. 52. Examples of Innovation
  53. 53. Examples of Innovation
  54. 54. Cationic Breakthrough?
  55. 55. To soap or not to soap?
  56. 56. InventionLess than 2% of filed patents are ever commercialisedDoes a new invention have consumer benefits or create anycompetitive advantage?Can consumers accept the new invention?
  57. 57. New Knowledge Innovation is the most riskyBetter to focus on other sources of innovation: ie, applications of existing ideas and technologies as new knowledge technology development is extremely long term. Bright ideas are the riskiest source of innovation and rarely succeed. Receptability is always the problem (look at patents files but never commercialised)
  58. 58. Table 6.1. Drucker’s Sources of Innovation Source Explanation Examples The unexpected Success of a revolutionary product or the application of •Apple computer success, failure or technology from one industry to another, sudden or •Rapid decline of Proton’s marketexternal occurrence unnoticed demographic changes caused by wars, share insurgencies, migration, etc. An incongruity A change that is already occurring or can be made to •Sugar free products and sugarbetween reality as occur within an industry. It may be visible to those replacements due to concern for health it actually is and inside the industry, often overlooked or taken for •Increasing demand for travel andwhat it ought to be granted. holidays due to increasing incomes and leisure time Inadequacy of an An improvement in process that makes consumers •Caffeine free productsexisting technology more satisfied based on an improvement or change in •Microwave ovensor business process technology. •Mobile phonesChanges in industry New ways and means of undertaking business based •Health care industryor market structure on identified opportunities or gradual shifting of the •Education industry – private education nature of the industry.Perceptual changes Changes in peoples awareness founded on new •Leisure and exercise industry aerobics knowledge and/or values or growing affluence leading & gyms to new fashions and tastes Demographic Gradual shift of demographics in population by age, •Establishment of more retirement changes income groups or ethnic groups, etc homes New knowledge New knowledge or application of existing theoretical •Video and VCD industry knowledge into an existing industry that can create •Robotics new products not previously in existence •Biotechnology
  59. 59. Types of InnovationType Description ExamplesInvention Totally new product Wright Bros – plane Edison – light bulb Bell – telephoneExtension New use or different application Kroc – McDonald’s of an already existing product Bushnell – Atari Wilson – Holiday InnDuplication Creative replication of an Wal Mart – Dept Stores existing concept Pizza Hut – Pizza restaurantSynthesis Combination of existing Smith - Fedex concepts and factors Merryil Lynch – Home equity into new use Financing
  60. 60. 1930s1960s1950s1800s1980s1970s 2006 1990s
  61. 61. “Too much focus onprocess, on a static agenda, while it may get a lot done initially, will tend to drivecore competencies towards core rigidity.”
  62. 62. Practice/Process Trade-offInnovation Optimal Innovation Area Organisation Ideas becomes rigid Little gets done Practice Process
  63. 63. Definition: International Marketing involves Establishing and CoordinatingMarketing Activities Across National Boundaries - Requires a global “mindset”
  64. 64. Lecture 1 The Global Environment& International Marketing Concepts
  65. 65. 1. Historical Market Evolution 2. Drivers to International Marketing 3. Our place in the international Market4. The evolution of the international Marketing Company5. The Influence of Technology and Competition on International Marketing
  66. 66. Domestic Market Competitors Tastes Trends Feed forward Promotion Competencies BrandingChannels Chemical Raw Materials Relative Style Logistics Competitive Packaging Advantage Sourcing Finance Company Fit Manufacturing Processes RegulationFeedback Material Technology Availability International Markets
  67. 67. Source: http://en.wikipedia.org/wiki/Image:PeriplusMap.jpg
  68. 68. http://www.history.upenn.edu/coursepages/hist086/material/frank_map8a.jpg
  69. 69. History of the Development of the Malay Archipelago
  70. 70. • Portuguese • The Dutch • British• The British East India Company
  71. 71. Colonial and Post Colonial Companies
  72. 72. • Companies here to benefitfrom comparative advantage• Companies here to exploitthe local market
  73. 73. http://www.irows.ucr.edu/cd/courses/122/b10toch17_files/image092.jpg
  74. 74. Tech & Travel Capitalism Financial Capitalism Industrial Capitalism Merchant CapitalismTribal Societies
  75. 75. Globalism Vs. Localism
  76. 76. Thai Hong Malay Fashion KongFashion Fashion
  77. 77. Breakfast in the World OrWhere is this? Thailand Australia
  78. 78. Cuisines with most potential for growth North America Europe South America Asia/Pacific USA Mediterranean Fusion style Fusion style influence Asian Influence Thai, Indonesian, Thai/Chinese Indian influence Vietnamese influences Sesame, wasabi, Western/Chinese ginger, noodle and Middle East influence Contemporary Indonesian/Thai Asian cabbage cuisine American/Mediterranean Slow Food Indian Influence Mediterranean Italian influence Fruit, spice andtoasted nuts, chutney, Exotic combinations French quince pear, roasted coriander, pistaschio,almond & walnutBlue and goat cheese Mexico Tarmarind, squash flowers, huitlacoche (corn mushroom),portobello mushroom, duck meat
  79. 79. Geography (Climate, Topography, Flora, Fauna, Microbiology) Adapted from Cateora & Graham P. 99 HistoryAdaptation Technology and Political Economy Social Institutions Socialisation (Family, Religion, School, Media, Government, Corporations) Application Imitation Elements of Culture Peers (Values, rituals, symbols, beliefs, though processes Consequences Consumption decisions Market and behaviours Management Styles Structure
  80. 80. Culture Theories in action Stories, myths, heroes, artifacts, informal behaviours verses EspousedNorms and Productivity & Values effectiveness Organisationalgroup behaviour learning (single or double looped Leadership Beliefs Assumptions
  81. 81. Interpersonal InteractionsNetworking Team/Individual Orientation Sincerity Warmth Personality Character Culture Judgment Hunter, Baharuddin (OUM) & Rozhan (UIA): Alpha Model of Innovation
  82. 82. FMCG Market Fragmentation/Concentration Comparison Between Malaysia, Thailand, Hong Kong and Australia Outlet Type Malaysia Thailand Hong Kong AustraliaHyper & 20% 68% 91% 85%Supermarkets(Chain Owned)Independent 20% 2% 2% 10%Hyper &SupermarketsWholesale 57% 10% 2% 3%Trade – Sundry& convenienceStoresOther 3% 20% 5% 2% Convenience Chains
  83. 83. Malaysian Retail ManufacturerMarketChannels & Structure National Distributors Wholesalers Super- Sundry Convenience Chinese Hypermarkets markets Stores Stores Medical Halls Consumers
  84. 84. Australian RetailMarket Channels and ManufacturerStructure Sales Broker Major Retailers Retail Outlets
  85. 85. Fulfillment: (dreams) Actualisation (The Artist) Study after retirement Self-fulfillment Fresh vegetables (Organic) BooksFine Dining & Processed Foods Aromatherapy products Luxury cars Esteem Nutraceuticals & herbs Travel & Vacations (The Executive) Achievement, Fine Fragrances prestige,fulfillmentCar Air Fresheners Responsibility: (hope) Fashion Clothes (e.g. Social (Worker) Jeans) Chewing Gum Family, relationships, workgroups Community: (acceptance) Most Water Household Safety (The Farmer) Purifiers Cleaning Home, Security and stability Necessities: based on what is good (existence) Products FreshSoap Vegetables Physiological (The Hunter) Rice Basic Biological Needs – Food, water, air Staples: based on survival (fear)
  86. 86. http://www.brandingstrategyinsider.com/all_of_derricks_posts/index.html
  87. 87. Geert Hofstede studied 88,000 employees of one MNC over sixty-seven countries to develop a framework for understanding cultural differences and defined cultural differences along five dimensions[ii]; • Individual verses collective orientation: the extent to which people have an individual orientation, concerned primarily for themselves and families, verses to the extent that an individual identifies with a group and feels their interests are best served in a group context, which they will give loyalty, [ii] Hofstede, G., (1991), Cultures and Organisations: Software of the Mind, Berkshire, McGraw-Hill.
  88. 88. • Power-distance relationships: the extent to which people accept that power is distributed to individuals and institutions unequally, thus in high power-distance relationships there is more respect for authority, where one would not be expected to go over their boss, than in low power-distance cultureswhere people would be sensitive to peopleshowing authority and seek help from those they believe they could get it from[i],[i] Hofstede, G., (1980), Culture’s consequences: International differences in work-related values, Beverly Hills, Sage.
  89. 89. •Uncertainty avoidance: the extent to which people feel threatened and stressful towards ambiguity and the importance attached to rules and procedures, i.e., workers characterised high on uncertainty avoidance like in Malaysia would tend to value security over self actualisation[i],[i] Hofstede, G., (1980), ‘Motivation, Leadership and Organization: Do American Theories Apply Abroad?’, Organizational Dynamics, Summer, pp. 42-63.
  90. 90. Masculinity: the nature of dominant values in the organisation such as assertiveness and directness, View of time: refers to the different time frames used by people and organisations,which influences values about certain actions relating to procedures and decision making, status and rewards, etc.
  91. 91. Trompenaars and Hampden-Turner postulate that culture is an extremely complex phenomenon which cannot be easily rationalised. Even within a single country acultural trait can differ significantly within an ethnically homogeneous population.Trompenaars and Hampden-Turner surveyed 15,000 managers in 28 countries toexplore the differences in cultures and hypothesised there are seven areas where diametrically opposed paradoxes occur[i]; Universalism verses Particularism Universalists (US, Canadians, Australians and Swiss) tend to follow sets of rules, seek clarity, and follow logically and systematically, therefore assuming there is one correct way of doing things. In contrast particularists (South Koreans, Chinese and Malaysians) are pragmatic, flexible, make exceptions according to situations and thus act more in ambiguity, therefore focus on the peculiar nature of the situation. [i] Trompenaars, F. and Hampden-Turner, C., (1993), Riding the Waves of Culture, London, Nicholas Brealey.
  92. 92. Individualism verses Communitarianism Individualists are orientated towards the self and family, while communitarialists are orientated towards a group. Neutral verses Affective Neutralists are orientated towards not expressing opinions and emotions openly, while affectivistsare orientated towards giving opinions and showing emotion in public.
  93. 93. Specific verses Diffuse Specificists tend to separate relationships between business and personal lives, where diffusists tend to blend relationships together. Achievement verses AscriptionAchievement is orientated towards what one does,whereas ascription is orientated towards who we are.
  94. 94. Sequential verses SynchronicSequential view time as separate periods and are orientated with the present, while synchronic isorientated to blending in past, present and future together in ones outlook. Internal verses External Control Internal views dominance over nature, while external views are subservient to nature.
  95. 95. Country Cultural Dimensions - Ranking for Selected Countries Power Individualism Masculinity Uncertainty Long-term Distance Avoidance OrientationUSA L H H L LGermany L H H M MJapan M M H H HNetherlands L H M M MHong Kong H L H L HIndonesia H L M L LMalaysia* H M M M MThailand M L L M* Estimated national average L = low M = medium H = high
  96. 96. Malaysia: Cultural Dimension Ranking By Race Overseas Chinese Malays IndiansPower distance H H LIndividualism L M HMasculinity H M MUncertainty Avoidance L H MLong-term Orientation H L HSource: Estimates H=High M=Medium L=low Sayed Mushtaq Hussain, CULTURAL CONSTRAINTS IN LEADING MALAYSIAN SMEs TO GLOBAL MARKETS, 2ND NATIONAL CONFERENCE ON ENTREPRENEURSHIP AND SMALL BUSINESS VISTANA HOTEL, PENANG, DECEMBER 9-10, 2006
  97. 97. How are pick ups advertised in Thailand? http://www.uwsp.edu/geo/courses/geog100/CarCult-Ideol.htm
  98. 98. What affect does culture have on consumer tastes and preferences? What affect does culture have on necessary product form to be successful?What affect does culture have on forms of distribution, promotion, pricing, etc? How will culture affect the ways of doing business?
  99. 99. A Market Typology Developed Market• Local production followinginternational trends•Cooperation with internationalfirms•Large customers developingalthough market still Developingfragmented Market•Beginning of marketsegmentation •Open market to the world •Own production with exports •Markets adequately • Most Items Imported covered with products Underdeveloped •Fragmented with few large •Full market segmentation customers Market •Heavy use of intermediaries •No market segments Hunter (1993)
  100. 100. Still many market gaps Poor Innovation Large customers developing bringing more market concentration Local firms exporting to the world Developed Category management still in infancy MarketBeginning to relyon imports again:Colgate, Unilever ThailandAspect of market Still undevelopedglobalisation Global trends do not necessary follow logistic systems Developing Underdeveloped Market Market Market segmentation still weak; along ethnicity lines only
  101. 101. Strategic Decisions Related To Stage of Development StagesStrategic Decisions Entry Growth Consolidation Ambition •Identify opportunities •Gain market share •Achieve long-term goal •Initiate Investments •Expand aggressively •Make Country/region a •Develop Partnerships •Reach critical mass major contributor in the •Start operations •Reach economies of scale corporate portfolio •Reach break-even point •Produce positive returns Positioning •Test/Product/Service •Operate out of key •Integrate with global concept countries network •Trial and Error •Combine global •Search for •Start presence in platform standardization and local products/services countries adaptation optimisation •Initiate presence in key countries Capabilities •Invest in strategic and •Invest in building assets •Rationalization and marketing intelligence •Acquisitions, JV and specialization of operations •Look for acquisitions Greenfield operations •Regional logistics •Negotiate JVs •Invest in distribution, •Regional facilities •Invest in building contacts branding and human resources Organization •Operate out of platform •Local autonomy of •Mosaic of operations countries (i.e., Singapore, countries subsidiaries •Global/regional integration Hong Kong) •Regional HQ as with some local autonomy •Rep offices in key contributor and resource •Regional HQ as countries provider coordinator
  102. 102. Solely Focused on Company covers partial ofDomestic Market complete domestic market. No or very few export sales.Company exports Company exports to customers with existingon an ad-hoc basis products. Tends to be passive marketerto customers overseas responding to customer inquiriesCompany exports A successful product line in theexisting products domestic market is exported toand lines to a single third countries or a number ofor multiple exportmarkets countries (with or without some modification)Company exports A successful product (range) is exported allits product range around the world to customersglobally
  103. 103. Company The company saves on freight and tariffs throughmanufactures manufacturing the product in other markets, eitherproducts in other directly, under contract, license, etc.markets fordistribution inthose marketsCompany sets upsales & Marketingoperationsregionally, globallyfor sales, service tocustomersCompanymanufacturersproducts in othermarkets for exportto third markets inregionalmanufacturingoperations
  104. 104. Marketing Company Manufacture & MarketManufacture & Market Manufacture & Market Marketing Company Marketing Company Manufacture & Market
  105. 105. The Drivers of International Marketing
  106. 106. Geographic, Climatic & Resource Factors
  107. 107. Production Layouts Logistics R&D Economies of scales are not enough: have to be coupled with innovation,customer service and correct strategies to maintain competitive advantage. Competitive advantage is also a fluctuating state Economies of Scale
  108. 108. New markets New Products Growing Affluence
  109. 109. Networking
  110. 110. Different types of Networks Support Networks Resource NetworksRegulatory NetworksDevelopment Networks Two elements: Sales Networks Technical Know How Peer Networks Technical Know Who
  111. 111. Business is close up and personal
  112. 112. Different levels of business require different types of relationships
  113. 113. The Way of Doing Business -Merchandising
  114. 114. Ways of doing business and education changing
  115. 115. Almost universally, Large organisations will bully small organisations in Malaysia
  116. 116. Guanxi
  117. 117. Different Origins,backgrounds, personalities, interests, approaches
  118. 118. Education Generation Gap
  119. 119. Market Fragmentation
  120. 120. Centralisation
  121. 121. So What are the Barriers to Networking?
  122. 122. • Social Background • Latent Peer Group• Ethnic Background• Education Background• Domicile (Rural/Urban)• Personality• Cultural Transgression (Ability)• External Perception of You • Ability to Communicate
  123. 123. Identify theStakeholders
  124. 124. Logistics
  125. 125. Growing Intellectual Property
  126. 126. Figure 9.1. Worldwide Patent Filings Non-Resident Filed Applications 1600000 Resident Filed Applications 1400000 1200000Patent Applications Filed 1000000 800000 600000 400000 200000 0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: WIPO Statistics
  127. 127. Figure 9.2. Twenty Largest Patent Filing Countries 2004 Poland Italy Argentina Singapore Hong Kong (SAR) Norw ay Mexico France India Brazil United Kingdom Russian Federation Australia Canada Germany European Patent Office China Korea, Rep. USA Japan 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 Number of Patent Filings Resident Patent File ApplicationsSource: WIPO Statistics Non-Resident Patent File Applications
  128. 128. Figure 9.3. Number of Resient Patent Filings per Million Population 2004 M exic o 5 India 7 Turkey 7 Thailand 11 B razil 21 A rgentina 28 B eligium 50 C hina 51 C zec h R epublic 61 P o land 62 S pain 67 Hungary 75 Ukraine 86 B elarus 108 Italy 111 C anada 125 Netherlands 134 S ingapo re 147 Wo rld A verage 148 World Average R us s ian 160 S witzerland 217 Is rael 227 F ranc e 236 A us tria 275 S weden 308 UK 320 No rway 335 D enmark 347 F inland 385 New Z ealand 402 A us tralia 479 G ermany 587 US A 645 Ko rea, R ep. 2189 2884 J apan 0 500 1000 1500 2000 2500 3000 Number of Resident Patent Filings/Million Population 2004Source: WIPO Statistics
  129. 129. Figure 9.4. International Patents Filed by Residents in Asia-Pacific Region 2006 Vietnam 9 12 Thailand Singapore 402 15 Philippines New Zealand 316 54 Malaysia 5935 Republic Korea 4 Dem. Rep Korea 26906 Japan India 627 6 Indonesia 3910 China 1Brunei Darussalam 2139 Australia 0 5000 10000 15000 20000 25000 30000 Number of International Patents Filed by Residents Source: WIPO Statistices
  130. 130. Figure 9.5. Resident Patent Filings per USD 1.0 Million R&D Expenditure 0.08 Belgium 0.14 Turkey 0.21 Mexico 0.23 Israel 0.23 Canada 0.23 India 0.26 Netherlands 0.27 Spain 0.28 Czech Republic 0.29 Sw eden 0.29 Sw itzerland 0.3 Brazil 0.37 Italy 0.41 France 0.41 Finland 0.43 Austria 0.46 Denm ark 0.51 Thailand 0.54 Hungary 0.56 Norw ay 0.61 Argentina 0.62 UK 0.71 USA 0.78 China 0.81 World Average 0.92 Germ any 0.99 Poland 1.13 Australia 1.18 Singapore 1.46 Russian 1.5 Ukraine 1.67 New Zealand 3.15 Belarus 3.49 Japan 4.6 Korea, Rep. 0 1 2 3 4 5 Number of Resident Patent Filings per USD 1 Million R&D ExpenditureSource: WIPO Statistics
  131. 131. Figure 9.6. Major Categories of International Patent Applications 2006 Consumer Goods & Civil Engineering, Building, Mining Other Transport Equipment 2% 1% Electrical devices & 3% 5% electrical engineering Mechanical Components 6% 3% Machine Tools, Engines, Audio-Visual Thermal Process 4% 5% TelecommunicationsMaterials Processing, 8% Textiles & Paper 3% Information Technology 8% Industrial Processes, Handling & Printing Semiconductors 7% 3%Agriculture and Food Processing Optics 2% 2%Pharmaceuticals & Cosmetics Analysis & Medical Biotechnology Organic, 8% Technology 4% Material & Surface Macromolecular & 13% Technology Chemical Engineering Polymer Chemistry Source: WIPO Statistics 5% 2% 7%
  132. 132. Electrical devices & 12% Audio-Visual 9%Telecommunications 15% Information 22% Semiconductors 28% Optics 16% Analysis & Medical 8% Organic, 11% Chemical 11% -5% Material & Surface 17% Biotechnology Pharmaceuticals & 21%Agriculture and Food 8% Industrial 13% Materials 13% Machine Tools, 12% Figure 9.7. Main Areas of Patent Filing Growth 2006 Mechanical 13% Transport 8% Consumer Goods & 13% Civil Engineering, 11% 0% 5% -5% 10% 15% 20% 25% 30% Percentage Growth (%)Source: WIPO Statistics
  133. 133. Figure 9.8. Integration between a Firm’s Core Mission and Intellectual Property 1. Recognition 2. Desirability To develop public recognition and carry over To enable companies to delivery good products certain desired values to consumers with superior performance to competitors, new features, extended product life, etc, so that Trademarks and certain Copyright products are competitive and desirable. Information Patents, Registered Designs and Proprietary Knowledge 3. Form 4. Emotional Connection To develop recognisable literary and visual To maximise financial returns for production forms that add value and assist in creating an undertaken by the company, add to product inherent desirability to the form of differentiation and develop an emotional communication between company and connection with consumers. consumer. Copyrights and Trademarks Brands and Trademarks [i] Stamm, O., A., (1993), ‘Intellectual Property Rights and Competitive Strategy: A Multinational Pharmaceutical Firm’, in
  134. 134. Figure 9.9. The General Tools of Intellectual Property in Business Strategy Influence of New Product Development Technology - Invention (new to the world) - New to company product Competitors - New Style, variant or benefits Patent, Registered Design, Proprietary Influence of Knowledge (secrecy and Product non-disclosure Lifecycle agreements) Process Development (manufacturing) Patent, Proprietary Knowledge (secrecy and non-disclosure The Market agreements) The General Business Market Strategy Place Strategy Market parameters (mix) Values Channels Expectations Knowledge Emotions Image & Story (target) Knowledge, Creativity, Recognition Branding, Trademarks, Potential Copyright Emotional Connections
  135. 135. Figure 9.10. IP/market scenarios with competitive advantage in slow and fast technology emerging industriesRelative Competitive Advant a. Slow Emerging Technology Market Air Fresheners Branding Primary Used IP Protection age Registered Designs Liquid Air Fresheners Patents Car Air fresheners Failure to advance IP and convert into new products results in competition in a price sensitive market where Gel Air Fresheners brands don’t attract consumer recognition 1960s 1970s 1990s TimeRelative Competitive Advant b. Fast Emerging Technology Market Electronic Media Storage Primary Used IP Protection ge Patents a Pen Drives Compact Rapid decline of media Disks use after introduction of new media until product ceases to be used anymore, Companies must cease operations or switch Floppy Disks to new technology 1960s 1970s 1990s Time
  136. 136. Innovation is needed to convert any factor into a source of competitive advantage
  137. 137. New Technologies
  138. 138. New Business Models
  139. 139. EntrepreneurshipOpportunity Discovery
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×