International Marketing Management, VTU

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International Marketing Management, VTU

  1. 1. INTERNATIONAL MARKETING MANAGEMENT
  2. 2. Global Marketing Management• Global perspective is far more than understanding of worldwide business and international career opportunities. – enable people to understand the links between their own lives and other part of the world. – Incremental growth of economic, social, political which shape life. – Develop skills, attitudes and values to enable people working together to bring change for good – Work for sustained world where resources are shared. Prof.Raghavendran Venugopal 2
  3. 3. GMM: An Old Debate and a New View• Standardization Vs adaption• Globalization Vs Localization• Internet revolution• Homogeneous Vs Heterogeneous Prof.Raghavendran Venugopal 3
  4. 4. Planning for global market• Considerable factors are – Company objectives and resources – International commitment – Planning process Adapting the Preliminary Marketing MIX Developing Implementation analysis & to Target Marketing Plan and Control Screening markets Phases in Planning Process Prof.Raghavendran Venugopal 4
  5. 5. Alternative Market Entry Strategies• According to Frank Bradley & Micheal Gannon, “any injudicious selection of the entry mode give rise to opportunity costs & in some cases foil subsequent endeavors in international market” Prof.Raghavendran Venugopal 5
  6. 6. Level of commitment1. Domestic purchasing 9. Contract manufacture2. Piggy back operations 10.Licensing3. Export management 11.Strategic alliance companies 12.Joint venture4. Trading companies 13.Assembly operations5. Sales force 14.Company Acquisition6. Distributors & agents 15.Wholly owned7. Franchising subsidiary8. Direct marketing Prof.Raghavendran Venugopal 6
  7. 7. Factors Affecting the selection of entry mode• External factors – Market size – Market growth – Government regulations – Level of competition – Physical infrastructure – Level of risk • Political • Economic • Operational – Production & Shipping Costs – Lower cost of Production Prof.Raghavendran Venugopal 7
  8. 8. • Internal factors – Company Objectives – Availability of company resources – Level of commitment – International experience – Flexibility Prof.Raghavendran Venugopal 8
  9. 9. Steps in Entering Foreign Market• Country Identification• Preliminary Screening• In depth Screening• Final Selection• Direct Experience Prof.Raghavendran Venugopal 9
  10. 10. Foreign Market Entry Strategies• Exporting • Licensing• Joint venture • Strategic alliances• Acquisition • Franchising• Assembly operations • Management• Turnkey operations contracts• Wholly owned • Free Trade Zones subsidiary • Contract Manufacture Prof.Raghavendran Venugopal 10
  11. 11. Exporting• Traditional mode of entering the foreign market – The volume of foreign business is not large enough to justify production in foreign marketing – Cost of production in the foreign market is high. – Company may not have permanent interest in the foreign market and no guarantee of longer markets – Licensing or contract manufacturing is not a better alternative. Prof.Raghavendran Venugopal 11
  12. 12. • Factors to be considered in exporting – Government policies – Marketing factors – Logical considerations – Distribution Issues• Type of Exporting – Indirect Exporting – Direct Exporting Prof.Raghavendran Venugopal 12
  13. 13. Advantages & Disadvantages ofAdvantages Indirect Exporting Free from botheration No need for export firm A boon to new entrants Economy Market information Concentration on productionDisadvantages Ignorant for export trading No scope for product development Availability of middle men Commission No obligation to manufacturer No permanency in business. Prof.Raghavendran Venugopal 13
  14. 14. Direct Exporting• Functions: – Direct supervision, including the development of export policy. – Selling, advertising, sales promotion, training and services. – Credit & terms of payment. – Financing, exchange, invoicing and bill collections Prof.Raghavendran Venugopal 14
  15. 15. Adv & Dis adv• Advantage: – Better knowledge of customer’s demand – Complete control – Better returns on exports, goodwill – Appreciation of market conditions – Permanency – Supply chain management – Dedication of staff• Disadvantage: – Large financial resources – Managerial ability – Increased distribution costs – Risk – Miscellaneous limitations Prof.Raghavendran Venugopal 15
  16. 16. Licensing• Licensing agreements are most common on the use of patents, trademarks, copyrights & unpatented technology.• Advantage: – Offers a small business – Relatively low investment – Low financial risk – Less cost MR – Less investment in R&D – Escapes from product failures Prof.Raghavendran Venugopal 16
  17. 17. Disadvantages• No control over production & marketing• Licensor can be competitor• Chances of misunderstanding between two parties• Quality control may be difficult to achieve. Prof.Raghavendran Venugopal 17
  18. 18. Joint Venture• When company decides to shares its ownership of specially set up new company for manufacturing & marketing to explore opportunity.• It is always based on 2 or more companies can contribute complimentary resources or expertise. Prof.Raghavendran Venugopal 18
  19. 19. Reasons for joint ventures• Cost savings• Expanding customer base• Access to technology• Risk sharing• Entry to emerging Economics & Technical markets.• Global competition. Prof.Raghavendran Venugopal 19
  20. 20. Types of Joint Ventures• Between two firms in one industry.• Between two firms across different industries• Between an Indian firm and foreign company in India.• Between an Indian firm and foreign company in foreign country.• Between an Indian firm and foreign company in a third country. Prof.Raghavendran Venugopal 20
  21. 21. Adv & Dis Adv• Advantage: – Large capital flow. – Joint risk burden – Different skills set are available. – Large projects are feasible and possible. – More direct participation in local markets – Exert greater control over the JV.• Disadvantage: – Potential of conflicts. – Delay in decision making – Life cycle of a JV hindered by many causes of collapse. Prof.Raghavendran Venugopal 21
  22. 22. Strategic Alliances• It is an agreement between two or more individuals or entities stating that the involved parties will act in a certain way to order to achieve a common goal. Strategic alliances usually make sense when the parties involved have complementary strengths.• e.g. ‘code share’ where airlines of a similar type sell each other’s tickets. There is no co-ownership. – Types • technology swaps • R&D exchanges • distribution relationships – Driving forces • insufficient resources • High R&D costs • Concentration of firms in mature markets • Market access Prof.Raghavendran Venugopal 22

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