International Marketing


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International Marketing

  1. 1. International Marketing R. Ravi Nair
  2. 2. Part 1
  4. 4. Global Perspective
  5. 5. External Perspective Anticipated barrier reduction – regulatory and non-regulatory WTO/Standards /Quotas/Documentation <ul><ul><li>Growing integration </li></ul></ul><ul><ul><li>of </li></ul></ul><ul><ul><li>economies/ societies </li></ul></ul><ul><li>ASEAN,NAFTA,EU, </li></ul>Free Market Play External Environment Results in potential for Wealth Creation
  6. 6. Internal Perspective Use of Technology & Hubs <ul><ul><li>First Mover </li></ul></ul><ul><ul><li>Advantage </li></ul></ul>Market Saturation Internal Environment Impetus to seek avenues / potential for Wealth Creation
  7. 7. Emerging Market Scenarios <ul><li>Drivers </li></ul><ul><li>Restrainers </li></ul><ul><li>Emerging Trends </li></ul>
  8. 8. Drivers <ul><li>Disposable incomes increasing </li></ul><ul><li>Demographics </li></ul><ul><li>Gen X & Y making their presence across the globe </li></ul><ul><li>Accessability – TV, Internet </li></ul><ul><li>Convergence – western lifestyle aspirations </li></ul><ul><li>More education/ western education </li></ul><ul><li>Emergence of middle/ rich class </li></ul><ul><li>Competition in market-niche </li></ul><ul><li>Global strategy/action. </li></ul><ul><li>Open vs Closed trade </li></ul>
  9. 9. Restrainers…. <ul><li>Culture </li></ul><ul><li>National controls </li></ul><ul><li>Nationalism </li></ul><ul><li>Trade blocks </li></ul><ul><li>Open vs Closed Economy </li></ul>
  10. 10. Emerging Trends…. <ul><li>Emergence of : </li></ul><ul><li>technologies/ industries </li></ul><ul><li>new markets </li></ul><ul><li>new competitors </li></ul><ul><li>goodwill </li></ul><ul><li>importers turning exporters </li></ul>
  11. 11. Leveraging expertise…. Company Strategy, Structure, and Rivalry Demand Conditions Related and Supporting Industries Factor Conditions Government Source: Michael Porter, The Competitive Advantage of Nations Chance
  12. 12. Value Equation…. V = B P Where : <ul><li>V = Value </li></ul><ul><li>B = Perceived Benefits - Perceived Costs* </li></ul><ul><li>P = Price </li></ul>* For example, switching costs The Value Equation Value for Customer Maximising benefits for Company through value addition to the customer….
  13. 13. Effective Global Manager Knowledge Skills Set Attitude Interlinkages - Personnel One’s own culture Social Norms Commn. styles Background Information Business Practices Adaptability Building Relations Commun. Analysis of Information Teamwork Listening Leadership Emotional Intelligence Personal Motivation Humility Cultural Sensitivity Risk Taker
  14. 14. Interlinkages - Legal… <ul><li>Legal Framework – laws impacting on the transaction : </li></ul><ul><li>Domestic laws (e.g. export laws, foreign corrupt practices etc) and </li></ul><ul><li>International laws (international agreements, bilateral and multilateral agreements, arbitration etc.) </li></ul>
  15. 15. Interlinkages………financial
  16. 16. Financial….
  17. 17. Contractual <ul><li>Typical issues in contracts </li></ul><ul><li>Incomplete clauses </li></ul><ul><li>Misunderstanding </li></ul><ul><li>Improper translation </li></ul><ul><li>Differences in interpretation </li></ul><ul><li>Failure to provide an arbitration clause </li></ul><ul><li>Using inappropriate forms </li></ul><ul><li>Change orders/ variation clauses </li></ul>
  18. 18. Part 2
  19. 19. Can we go global?? <ul><li>Yes, if … </li></ul><ul><li>Long term global commitment-purpose, vision </li></ul><ul><li>Global market/ marketing information/ systems in place </li></ul><ul><li>Critical mass of skill, resources, contacts, lines of finance </li></ul><ul><li>Marketing culture-value </li></ul><ul><li>Handle change management, chaos and innovation-for profitability </li></ul><ul><li>Flexibility, responsiveness, ability to move quickly </li></ul>
  20. 20. Achieving Globality….
  21. 21. Strategic Focus <ul><li>Do we compete? </li></ul><ul><li>PLC </li></ul><ul><li>Overall size decreases or increases </li></ul><ul><li>Increased share of existing market ??? </li></ul><ul><li>Enlarged customer size </li></ul><ul><li>Grab share from competitors </li></ul><ul><li>Selection of markets </li></ul>
  22. 22. Segmentation <ul><li>Segmentation basis </li></ul><ul><li>Market size – rate of growth </li></ul><ul><li>Geography </li></ul><ul><li>Economic and political integration </li></ul><ul><li>Language/ culture </li></ul><ul><li>Competitive Position/ opportunity/ challenge </li></ul>The organisation should be able to manage its market to be SUCCESSFUL
  23. 23. Segmentation Issues <ul><li>Where to go… </li></ul><ul><li>Right time to adapt glocalisation strategy!!! </li></ul><ul><li>Identification of new global segments </li></ul><ul><li>Geographic scope </li></ul><ul><li>Size and number of segments </li></ul><ul><li>Global standard versus nationally adapted products? </li></ul>
  24. 24. Competition Analysis
  25. 25. Differential advantage <ul><li>Superior position </li></ul><ul><li>Superior skills </li></ul><ul><li>Superior resources </li></ul><ul><li>Whatever the source of differential advantage, it must offer real value to the customer in that it meets his/her needs in a distinctive way, and is in some way better than the competition. It is the meeting point of the three C's of customer, competition and company resources. </li></ul>Wage costs Quality Scale Speed Time Variety ???? 1960 1970 1980 1990 2000
  26. 26. Marketing Mix
  27. 27. Product Dimension Adaptation Creation <ul><li>Primary functions </li></ul><ul><li>Secondary functions </li></ul><ul><li>Quality characteristics </li></ul><ul><li>Operation/ maintenance </li></ul><ul><li>Image (for global corporation) </li></ul><ul><li>Compatibility </li></ul><ul><li>Complements and substitutes </li></ul>Extension
  28. 28. Pricing <ul><li>Objectives </li></ul><ul><li>Quick profits </li></ul><ul><li>Market share </li></ul><ul><li>Middleman support </li></ul><ul><li>Image </li></ul><ul><li>What Else?? </li></ul><ul><li>Types of Pricing </li></ul><ul><li>Cost plus </li></ul><ul><li>Market pricing </li></ul><ul><li>Competitors </li></ul><ul><li>Price skimming </li></ul><ul><li>Market penetration </li></ul><ul><li>Psychological pricing </li></ul><ul><li>Differential pricing </li></ul><ul><li>‘ Package’ pricing </li></ul>
  29. 29. Promotions Cultural Lens – Difference in International and National promotions Investing in the Enablers of Growth Product Price/ Cost Place Promotion Processes People/ Climate “ Sales over night” “ Brand over time” ... Keeping the engine running ... Tactical ... Share of the market ... While changing the fan belt ... Putting the pitch before the product (Strategic) ... Share of mind ... Making the latent blatant Positioning
  30. 30. Distribution Basics <ul><li>On-time, In-place is a vision of global distribution </li></ul><ul><li>Distribution is a process </li></ul><ul><li>Channels are the pathways </li></ul><ul><li>Logistics is the integrated management of distribution </li></ul>
  31. 31. Retailing Market Entry Strategy Framework D Organic A Chain Acquisition C Franchise D Joint Venture Culturally Close Culturally Distant Difficult to Enter Easy to Enter
  32. 32. Market Entry Strategy <ul><li>Exporting </li></ul><ul><li>Licencing </li></ul><ul><li>Contract manufacturing </li></ul><ul><li>Management contracting </li></ul><ul><li>Joint ventures </li></ul><ul><li>Subsidiaries </li></ul><ul><li>Company acquisition </li></ul>
  33. 33. Typical Organization Structures <ul><li>Centralization </li></ul><ul><li>> Complexity </li></ul><ul><li>Building in > flexibility </li></ul><ul><li>Super national marketing structures </li></ul>Typical textbook structure Asia Division US Division Europe Division
  34. 34. The 7 S Framework <ul><li>Strategy itself - supported by </li></ul><ul><li>Skills - what distinctive core tasks is the company good at performing? </li></ul><ul><li>Shared values - what is the culture of the company? What behaviour or achievements are rewarded? </li></ul><ul><li>Style - what is the management style? </li></ul><ul><li>Staff - what are the people like? What is their educational or business background? What is likely to motivate them? How is their morale? </li></ul><ul><li>Systems - what formal systems are in place that may help (or hinder) implementation? </li></ul><ul><li>Structure - what structures are in place that may help (or hinder) implementation? Is there a flat management structure? </li></ul>
  35. 35. Evolution of a Global Enterprise <ul><li>Stage 1: Global market assessment </li></ul><ul><li>Stage 2: Target market strategy, strategy partnership and marketing investment </li></ul><ul><li>Stage 3 : Marketing investment, exporting, licensing </li></ul><ul><li>Stage 4: Investment in foreign manufacturing and R&D </li></ul><ul><li>Stage 5: Integrated global enterprise; serve global markets with global resources </li></ul>Performance
  36. 36. <ul><li>REVIEW …. </li></ul><ul><li>RESTRATEGISE… </li></ul><ul><li> REIMPLEMENT…….. </li></ul><ul><li>Organizations should continuously evaluate, be sensitized and focus on international business by Extension, Adaptation and Creation </li></ul>The RRR Concept
  37. 37. The RRR concept….a Continuous Process Assess products and foreign markets: choose products and target markets Setting objectives and goals Choosing the entry mode: export, contractual agreements, licensing, joint ventures, strategic partnership or investment Designing the marketing plan: product price, promotion, place and probe 1 2 3 4 Target market Control system: monitor operations, revise or fine tune entry strategy, and penetrate the market Entry operations
  38. 38. Key Imperatives…. <ul><li>Once the organization evolves to a global level, one can call the company a truly global company because by them, they would ask where in the world do we: </li></ul><ul><li>Locate manufacturing </li></ul><ul><li>Sell products </li></ul><ul><li>Hire skilled managers </li></ul><ul><li>Raise Capital </li></ul><ul><li>Procure our inputs </li></ul><ul><li>Conduct R&D for product development </li></ul><ul><li>Locate customer service, data entry and other labor intensive activities </li></ul>
  39. 39. Key Success Factors <ul><li>Continuous commitment to the global market </li></ul><ul><li>Cultural Quotient </li></ul><ul><li>K.I.S.S </li></ul><ul><li>Economies of scale </li></ul><ul><li>Adaptability, flexibility and extension </li></ul><ul><li>Legitimizing diversity </li></ul><ul><li>Integrating coordinating independence </li></ul><ul><li>Innovate new competitive but workable strategies </li></ul><ul><li>CAGE </li></ul><ul><li>Branding – Glocalisation </li></ul>
  40. 40. Takeaways <ul><li>Think Globally – Act Locally </li></ul><ul><li>Collaborative Competition </li></ul><ul><li>Barriers to Entry for new entrants </li></ul><ul><li>Know product </li></ul><ul><li>Know market – the battlefield </li></ul><ul><li>Know Competition (the enemy) and yourself </li></ul><ul><li>Mega-marketing (Power & Politics) </li></ul>
  41. 41. Thank You