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Global Marketing
Global Marketing and R&D <ul><li>Among different countries, why and how: </li></ul><ul><ul><li>It makes sense to vary the ...
<ul><li>“ A powerful force drives the world toward a converging commonality, and that force is technology”  (Prof. Ted Lev...
Globalization of Markets? <ul><li>Levitt’s “Converging commonality” has not happened universally </li></ul><ul><li>Consume...
Market Segmentation <ul><li>The process of identifying groups of consumers whose purchasing behavior is unique in importan...
Market Segmentation Across  National Markets <ul><li>Standardization: companies may   </li></ul><ul><ul><li>Offer same pro...
Marketing Strategy <ul><li>Standardization (Global Integration Pressures) </li></ul><ul><ul><li>Efficiencies through integ...
International Marketing Mix: Product <ul><li>Product: a bundle of attributes </li></ul><ul><ul><li>Hamburger: meat type, t...
<ul><li>Optimal channel  a company chooses to deliver the product </li></ul><ul><li>The most locally responsive element of...
 
International Marketing Mix: Promotion <ul><li>How firm communicates the product attributes / benefits to customers </li><...
International Marketing Mix:  Promotion <ul><li>Push vs pull strategies </li></ul><ul><ul><li>Push strategy:  personal sel...
International Marketing Mix: Price  <ul><li>Price discrimination: demand elasticity </li></ul><ul><li>Strategic pricing </...
 
New Product Development <ul><li>New product development </li></ul><ul><ul><li>High risk / high return </li></ul></ul><ul><...
<ul><li>Integrate R&D, marketing and Production </li></ul><ul><li>Ensure: </li></ul><ul><ul><li>Product development driven...
<ul><li>Use cross-functional, multinationally diverse teams </li></ul><ul><li>Span: initial concept development to market ...
Strategic Analysis <ul><li>Why do organizations decide to enter international business?  Passive  entry: </li></ul><ul><li...
Strategic Analysis <ul><li>Eventually one or more of key distributors become a candidate for acquisition (FDI) </li></ul><...
Strategic Analysis <ul><li>Organization acquires companies that are complimentary to existing businesses </li></ul><ul><li...
Strategic Analysis <ul><li>Issues involved in conducting international business become “significant” </li></ul><ul><li>Dem...
Strategic Analysis <ul><li>Eventually, these demands force the active planning of international business by the organizati...
Strategic Analysis <ul><li>SWOT </li></ul><ul><li>Strength and Weaknesses –  decisions  made and controlled by management ...
Marketing Mix (4 Ps) <ul><li>Product  </li></ul><ul><li>Promotion  </li></ul><ul><li>Pricing </li></ul><ul><li>Place  (Dis...
Marketing Mix (4 Ps) <ul><li>Place  (Distribution) – the most important for international business entry: </li></ul><ul><u...
Marketing Mix (4 Ps) <ul><li>Product – usually controlled by the exporter, initially the least impacted element of the mar...
Marketing Mix (4 Ps) <ul><li>Promotion – success at home leads to interest from potential importers, licensors, joint vent...
Marketing Mix (4 Ps) <ul><li>Pricing : What tasks need to be performed to get the product from place of manufacture to for...
Export Pricing Policy Issues   <ul><li>Channel length: longer channels than domestic markets, may drive up end user prices...
Dumping <ul><li>WTO : Sale of an imported product at ‘less than fair value’ and causes ‘material injury to a domestic indu...
Grey Marketing <ul><li>Grey (or parallel marketing) </li></ul><ul><li>Products are imported outside of the established dis...
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Bec doms ppt @ global marketing

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Bec doms ppt @ global marketing

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Bec doms ppt @ global marketing

  1. 1. Global Marketing
  2. 2. Global Marketing and R&D <ul><li>Among different countries, why and how: </li></ul><ul><ul><li>It makes sense to vary the attributes of products </li></ul></ul><ul><ul><li>Distribution strategy may vary </li></ul></ul><ul><ul><li>Advertising and promotion strategies may vary </li></ul></ul><ul><ul><li>Pricing strategy may vary </li></ul></ul><ul><li>How globalization affects new-product development </li></ul>
  3. 3. <ul><li>“ A powerful force drives the world toward a converging commonality, and that force is technology” (Prof. Ted Levitt, HBS) </li></ul>Levitt, 1983
  4. 4. Globalization of Markets? <ul><li>Levitt’s “Converging commonality” has not happened universally </li></ul><ul><li>Consumer product tastes converged less than industrial product specifications </li></ul><ul><li>Media, communications means have </li></ul><ul><ul><li>made consumers world-wide more aware of their mutual preferences </li></ul></ul><ul><ul><li>have contributed to creation of world brands </li></ul></ul><ul><ul><li>have caused market segments to emerge across some national markets--inter-market segments </li></ul></ul>
  5. 5. Market Segmentation <ul><li>The process of identifying groups of consumers whose purchasing behavior is unique in important ways </li></ul><ul><ul><li>Is based on demography, geography, social-cultural factors, psychological factors </li></ul></ul><ul><ul><li>Allows firms to adjust marketing mix to meet the needs of separate market segments </li></ul></ul><ul><li>Marketing mix variables: product-price-place (distribution)-promotion </li></ul>
  6. 6. Market Segmentation Across National Markets <ul><li>Standardization: companies may </li></ul><ul><ul><li>Offer same products </li></ul></ul><ul><ul><li>Adjust balance of marketing mix to market segments with similar needs across countries </li></ul></ul><ul><li>Adaptation: companies may </li></ul><ul><ul><li>Offer different products </li></ul></ul><ul><ul><li>Adjust balance of marketing mix to market segments with differing needs across countries </li></ul></ul>
  7. 7. Marketing Strategy <ul><li>Standardization (Global Integration Pressures) </li></ul><ul><ul><li>Efficiencies through integrated R&D, production, marketing </li></ul></ul><ul><ul><li>Control implications </li></ul></ul><ul><li>Adaptation (Local Responsiveness Pressures) </li></ul><ul><ul><li>Buyer behavior (cultural, economic influence, brand perception--country of origin idea) </li></ul></ul><ul><ul><li>Laws, regulations </li></ul></ul><ul><ul><li>Local environment needs </li></ul></ul><ul><ul><li>Responsiveness to local condition shifts </li></ul></ul><ul><li>Implications on marketing mix </li></ul>
  8. 8. International Marketing Mix: Product <ul><li>Product: a bundle of attributes </li></ul><ul><ul><li>Hamburger: meat type, taste, texture, size </li></ul></ul><ul><ul><li>Automobile: power, design, quality, performance, comfort, size/capacity </li></ul></ul><ul><li>Attributes need to be adapted to a greater or lesser extent to satisfy </li></ul><ul><ul><li>Consumer preferences/tastes due to culture </li></ul></ul><ul><ul><li>Economic development levels affect consumer behavior </li></ul></ul><ul><ul><li>National product/technical standards state mandated </li></ul></ul>
  9. 9. <ul><li>Optimal channel a company chooses to deliver the product </li></ul><ul><li>The most locally responsive element of marketing mix because distribution channels vary dramatically across countries </li></ul><ul><ul><li>Retail system: concentrated-fragmented </li></ul></ul><ul><ul><li>Channel length: long, short </li></ul></ul><ul><ul><li>Channel exclusivity </li></ul></ul>International Marketing Mix: Place
  10. 11. International Marketing Mix: Promotion <ul><li>How firm communicates the product attributes / benefits to customers </li></ul><ul><li>Barriers to international communication </li></ul><ul><ul><li>Cultural barriers </li></ul></ul><ul><ul><li>Source effects (country of origin effects) </li></ul></ul><ul><ul><li>Noise levels </li></ul></ul><ul><li>Standardized advertising strategy possible; standardized advertising strategy execution more difficult (culture, laws) </li></ul>
  11. 12. International Marketing Mix: Promotion <ul><li>Push vs pull strategies </li></ul><ul><ul><li>Push strategy: personal selling emphasis </li></ul></ul><ul><ul><ul><li>Industrial products; complex new products </li></ul></ul></ul><ul><ul><ul><li>Short distribution channels </li></ul></ul></ul><ul><ul><ul><li>Few print or electronic media </li></ul></ul></ul><ul><ul><li>Pull strategy: mass media advertising emphasis </li></ul></ul><ul><ul><ul><li>Consumer goods </li></ul></ul></ul><ul><ul><ul><li>Long distribution channels </li></ul></ul></ul><ul><ul><ul><li>Marketing message may be carried via print / electronic media </li></ul></ul></ul>
  12. 13. International Marketing Mix: Price <ul><li>Price discrimination: demand elasticity </li></ul><ul><li>Strategic pricing </li></ul><ul><ul><li>Predatory (quick share-of-market focus): </li></ul></ul><ul><ul><ul><li>lower prices to drive competitors out, then raise prices </li></ul></ul></ul><ul><ul><li>Multipoint pricing: </li></ul></ul><ul><ul><ul><li>pricing in one market may have an impact in another market; subsidize low pricing in one market from profits in another </li></ul></ul></ul><ul><ul><li>Experience curve: </li></ul></ul><ul><ul><ul><li>use aggressive pricing to build volume and move firm down experience curve (lower marginal costs) </li></ul></ul></ul><ul><li>Regulatory issues: </li></ul><ul><ul><ul><li>antidumping, monopoly restriction </li></ul></ul></ul>
  13. 15. New Product Development <ul><li>New product development </li></ul><ul><ul><li>High risk / high return </li></ul></ul><ul><ul><li>Technological innovation </li></ul></ul><ul><ul><li>Creative destruction </li></ul></ul><ul><li>Location of R&D </li></ul><ul><ul><li>Disperse R&D to trend/technology leading markets </li></ul></ul><ul><ul><ul><li>High investment on basic and applied research </li></ul></ul></ul><ul><ul><ul><li>Strong underlying demand; affluent consumers </li></ul></ul></ul><ul><ul><ul><li>Intense competition </li></ul></ul></ul>
  14. 16. <ul><li>Integrate R&D, marketing and Production </li></ul><ul><li>Ensure: </li></ul><ul><ul><li>Product development driven by customer needs </li></ul></ul><ul><ul><li>New products can be manufactured efficiently/effectively </li></ul></ul><ul><ul><li>Time to market is minimized </li></ul></ul><ul><li>Plan clearly: goals, milestones, budgets </li></ul>New Product Development
  15. 17. <ul><li>Use cross-functional, multinationally diverse teams </li></ul><ul><li>Span: initial concept development to market introduction </li></ul><ul><li>Team composition critical </li></ul><ul><ul><li>Assign heavyweight project manager </li></ul></ul><ul><ul><ul><li>High status in organization; high power and authority </li></ul></ul></ul><ul><ul><ul><li>Dedicated to fullest possible extent to project </li></ul></ul></ul><ul><ul><li>Team should have representative from each function </li></ul></ul><ul><li>Physical co-location </li></ul><ul><ul><li>When appropriate? </li></ul></ul><ul><ul><li>Build team culture </li></ul></ul><ul><ul><li>Communication and conflict resolution processes </li></ul></ul>New Product Development
  16. 18. Strategic Analysis <ul><li>Why do organizations decide to enter international business? Passive entry: </li></ul><ul><li>Follow customers overseas </li></ul><ul><li>Respond to enquiries from overseas </li></ul><ul><li>Competition is in overseas markets </li></ul><ul><li>Seek profitable growth </li></ul><ul><li>Sell capacity “as is” </li></ul>
  17. 19. Strategic Analysis <ul><li>Eventually one or more of key distributors become a candidate for acquisition (FDI) </li></ul><ul><li>Foreign regional development organizations actively recruit FDI </li></ul><ul><li>Competitive pressures force examination of local assembly or production nearer to key international markets </li></ul><ul><li>Major international customers demand local support </li></ul>
  18. 20. Strategic Analysis <ul><li>Organization acquires companies that are complimentary to existing businesses </li></ul><ul><li>Continued growth requires regional management, development, distribution, technical and customer support </li></ul>
  19. 21. Strategic Analysis <ul><li>Issues involved in conducting international business become “significant” </li></ul><ul><li>Demands for organization’s resources increases: </li></ul><ul><ul><li>Management </li></ul></ul><ul><ul><li>Cash </li></ul></ul><ul><ul><li>Product adaptation or unique development </li></ul></ul><ul><ul><li>Customer support </li></ul></ul>
  20. 22. Strategic Analysis <ul><li>Eventually, these demands force the active planning of international business by the organization – Active strategy </li></ul>
  21. 23. Strategic Analysis <ul><li>SWOT </li></ul><ul><li>Strength and Weaknesses – decisions made and controlled by management </li></ul><ul><li>Opportunities and Threats – business environment – events that are likely to occur </li></ul>
  22. 24. Marketing Mix (4 Ps) <ul><li>Product </li></ul><ul><li>Promotion </li></ul><ul><li>Pricing </li></ul><ul><li>Place (Distribution) – the most important for international business entry </li></ul>
  23. 25. Marketing Mix (4 Ps) <ul><li>Place (Distribution) – the most important for international business entry: </li></ul><ul><ul><li>Incoterms determine where title to goods changes </li></ul></ul><ul><ul><li>Transportation to international freight carrier, freight, insurance, documentation, customs clearance, local transportation, logistic management “in the market”, currency risk </li></ul></ul>
  24. 26. Marketing Mix (4 Ps) <ul><li>Product – usually controlled by the exporter, initially the least impacted element of the marketing mix </li></ul><ul><li>However, “localization” often required: </li></ul><ul><li>approvals and certificates </li></ul><ul><li>packaging & labeling </li></ul><ul><li>measures, etc </li></ul>
  25. 27. Marketing Mix (4 Ps) <ul><li>Promotion – success at home leads to interest from potential importers, licensors, joint venture partners </li></ul><ul><li>Local knowledge essential on initial entries: </li></ul><ul><ul><li>Integrated market communication </li></ul></ul><ul><ul><li>Trade and consumer sales promotion </li></ul></ul><ul><ul><li>Sales management </li></ul></ul><ul><ul><li>Trade shows </li></ul></ul>
  26. 28. Marketing Mix (4 Ps) <ul><li>Pricing : What tasks need to be performed to get the product from place of manufacture to foreign customers? </li></ul><ul><li>The remainder of the marketing mix needs to be determined in order to set prices </li></ul>
  27. 29. Export Pricing Policy Issues <ul><li>Channel length: longer channels than domestic markets, may drive up end user prices   </li></ul><ul><li>  </li></ul><ul><li>     Price influence: distribution partners negotiate for the lowest possible “landed cost” </li></ul><ul><li>  </li></ul><ul><li>     Price-setting authority: How much pricing authority should be given to distributors or to subsidiaries? </li></ul>
  28. 30. Dumping <ul><li>WTO : Sale of an imported product at ‘less than fair value’ and causes ‘material injury to a domestic industry’. </li></ul><ul><li>US : An unfair trade practice that results in injury, destruction, or the prevention of the establishment of an American industry. </li></ul><ul><li>US considers dumping when price is >5% below home market price or, </li></ul><ul><li>Price is below cost of production </li></ul>
  29. 31. Grey Marketing <ul><li>Grey (or parallel marketing) </li></ul><ul><li>Products are imported outside of the established distribution channel – undercutting the authorized channel pricing </li></ul><ul><li>Usually results from high imported prices </li></ul>

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