Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Introductory Session on International Marketing


Published on

My usual first session on International Marketing

Published in: Business, News & Politics

Introductory Session on International Marketing

  1. 1. I woke up this morning and fixed myself a cup of coffee made by a Swiss company taking milk from a Korean fridge. I watched the news briefly on a British channel on a Japanese TV set. I shaved with an American shaving gel and splashed on an after shave made in France , distributed by an American company under the license of another Swiss company. I also shampooed my hair  using a shampoo made in Thailand . I then checked for messages on my phone (made in China for a Canadian company). Before leaving for here, I quickly paid my satellite TV subscription (of partly Australian origin) with a credit card of a Dutch bank on an American laptop. I drove to work in a car made in Korea listening to music from a Jamaican . Welcome to Global Marketing
  2. 2. Two centuries of sweeping changes <ul><li>In the 1800s , all products used were manufactured within a few miles </li></ul><ul><li>Great Britain actively involved in international trade in the mid 19 th century </li></ul><ul><li>Since,WWII rapid expansion into global markets </li></ul><ul><li>Why Global? Realize their commercial potential </li></ul><ul><li>Why Global? Survival….. </li></ul>
  3. 3. Global Marketing <ul><li>Is it different from “regular” marketing? </li></ul><ul><li>Marketing : Series of Activities leading to an exchange </li></ul><ul><li>Organization’s efforts to satisfy customer wants and needs with products and services with competitive value </li></ul><ul><li>Marketing Mix: Marketer’s primary tools </li></ul><ul><li>Marketing is an universal discipline </li></ul>
  4. 4. Global Marketing <ul><li>Focus on Global markets and opportunities </li></ul><ul><li>Scope of activities is different </li></ul><ul><li>Universal marketing guidelines should be combined with specific concepts,considerations and strategies to ensure success </li></ul>
  5. 5. Marketing…An Universal Discipline <ul><li>Marketing: Focusing on resources and objectives of an organization on environemental opportunities and threats </li></ul><ul><li>Set of concepts,tools, theories,practices and procedures, and experiences </li></ul><ul><li>Teachable and Learnable body of knowledge </li></ul><ul><li>Marketing practice varies from country to country </li></ul>
  6. 6. The Marketing Concept <ul><li>Shift of focus from the product to the consumer in the 60s </li></ul><ul><li>The strategic Concept of Marketing evolved in the 1990s </li></ul><ul><li>Knowing the customer in a context </li></ul><ul><li>From profits to stakeholders benefits </li></ul><ul><li>From profit maximization to managing strategic relationships </li></ul><ul><li>Positioning the firm in the value chain </li></ul>
  7. 7. The Infosys Sustainability Report 2008 <ul><li>Communication channels with key stakeholders </li></ul><ul><li>Customers: Customer Satisfaction Surveys </li></ul><ul><li>Annual Customer Leadership Meets </li></ul><ul><li>Employees: Employee Satisfacion Surveys </li></ul><ul><li> Inclusivity Survey </li></ul><ul><li>Infosys Women Inclusivity Councils </li></ul><ul><li>CEO-Employee Column </li></ul><ul><li>Local Communities: Site Visits </li></ul><ul><li>Interactions with NGOs </li></ul><ul><li>Investors: Annual meets </li></ul><ul><li>Suppliers: Vendor Surveys </li></ul><ul><li>Government: Membership in key Government bodies </li></ul><ul><li>Education: Global Internship Programs/Fellowships </li></ul>
  8. 8. Boundaryless Marketing Marketing Customer Needs and Wants R & D Engineering Mfg CV
  9. 9. Three Principles of Marketing <ul><li>Customer Value </li></ul><ul><li>Competitive or Differential Advantage </li></ul><ul><li>Focus </li></ul>
  10. 10. Customer Value <ul><li>Value(V)= B(Benefits)/P(Price) </li></ul><ul><li>Task is to create better customer value than competitors </li></ul><ul><li>Cos with cost advatage: Price competitive weapon </li></ul><ul><li>Knowledge of Customer+ Innovation & Creativiity can lead to offerings of superior customer value </li></ul>
  11. 11. SAP empowers midisized cos deliver superior CV <ul><li>SAP Business All-in-One Solution adds new CRM functionality </li></ul><ul><li>Delivers key CRM capabilties to marketing sales and services with ability to analyze results </li></ul><ul><li>Enables companies to generate more sales leads,close more deals and provide better service and support </li></ul>
  12. 12. Competitive or Differential Advantage <ul><li>CA: Total offer that is is more attractive to customers vis-à-vis competitors </li></ul><ul><li>Could come from any element of the offer </li></ul><ul><li>Product </li></ul><ul><li>Price </li></ul><ul><li>Promotion </li></ul><ul><li>Distribution </li></ul>
  13. 13. Design…a competitive advantage <ul><li>Unicorn Industrial Sewing Machines Company in China </li></ul><ul><li>Makes Sewing Machines for Consumers and Industrial Users </li></ul>
  14. 14. Design…..a competitive advantage <ul><li>Industrial sewing machines can have over 1000 precision parts and assemblies </li></ul><ul><li>Uses Autodesk Invention software to make product desgn more efficient and reduce design cycle time and potential errors </li></ul><ul><li>Makes it possible even for new engineers to design in a third of the time </li></ul>
  15. 15. Focus <ul><li>Required to succeed in the task of creating Customer Value at a competitive advantage </li></ul><ul><li>Concentrating resources or efforts on consumer needs and wants </li></ul><ul><li>How to deliver a product that will meet those needs and wants </li></ul>
  16. 16. Global Marketing: What it is and what it is not? <ul><li>Markets and customers are different from country to country </li></ul><ul><li>Marketing practices must vary </li></ul><ul><li>Experiences not directly applicable from country to country </li></ul><ul><li>Kellogg Breakfast cereals </li></ul>
  17. 17. The Global Marketing Controversy <ul><li>Prof. Theodore Levitt in HBR 1983 “Globalization of Markets” </li></ul><ul><li>“ Homogenous Global Village” </li></ul><ul><li>High Quality, world products </li></ul><ul><li>Market around world using standardized advetising,pricing and distribution </li></ul><ul><li>Major failures </li></ul>
  18. 18. Coca Cola….A major global Marketing Success <ul><li>Success not based on standardization of marketing mix elements </li></ul><ul><li>Global Localization </li></ul><ul><li>Think Global, Act Local </li></ul><ul><li>Combination of standard(actual product itself) and nonstandard( distribution or packaging) </li></ul>
  19. 19. Group Danone……A truly Global company <ul><li>Revenues of Euro 15.22 Billion in 2008 </li></ul><ul><li>World’s No. 1 in Fresh Dairy Products </li></ul><ul><li>World’s No. 2 in Bottled Water </li></ul><ul><li>World’s No. 2 in Biscuits </li></ul>
  20. 20. Group Danone <ul><li>Presence in 120 countries </li></ul><ul><li>40% Revenues from outside Europe </li></ul><ul><li>Key to Danone’s success: extensive knowledge of local market </li></ul><ul><li>Focus: Innovation and local market autonomy </li></ul><ul><li>Group’s Identity “Worldwide business with local presence” </li></ul>
  21. 21. Group Danone <ul><li>Priority: Develop a strong brand that reflect consumer needs in that market as closely as possible </li></ul><ul><li>Danone: seen as French in France </li></ul><ul><li>Spanish in Spain </li></ul><ul><li>Mexican in Mexico </li></ul><ul><li>Dannon in America </li></ul><ul><li>In Argentina, fresh dairy brand Le Serenissiree 65% market share </li></ul>
  22. 22. Group Danone <ul><li>Most new product ideas come from specific needs in a country </li></ul><ul><li>Usually tested in the country </li></ul><ul><li>Drinking yoghurt Actimel first tested in Belgium </li></ul><ul><li>Juice brand Dano first tested in France </li></ul><ul><li>If product works,local office takes and adapts it </li></ul><ul><li>Role of HQ: For each pdt, the pureness of the concept </li></ul>
  23. 23. Group Danone <ul><li>Local office: can adapt to individual markets,encouraged to </li></ul><ul><li>Some change advertising,some change name </li></ul><ul><li>Some opt for sweeter tasting yoghurt,some will have simpler packagings </li></ul>
  24. 24. Global Marketing <ul><li>No imposition of a standardised approach </li></ul><ul><li>Does not mean entering every market in the world </li></ul><ul><li>Means widening business horizons to encompass the world when scanning for opportunities and threats </li></ul><ul><li>Decision to enter markets will depend on several factors like resources,managerial mind-set and nature of opportunities and threats </li></ul>
  25. 25. Nokia-A Global marketing success <ul><li>World’s largest handset manufacturer </li></ul><ul><li>In 2005, Nokia was loosing market share and share price was dipping </li></ul><ul><li>Missed the “mobile-as-fashion statement” trend </li></ul><ul><li>Slow to take advantage of this trend in developed world </li></ul><ul><li>Concentrated on building business in developing world(India,China,Indonesia) </li></ul><ul><li>Different requirement:Basic,reliable hardware </li></ul>
  26. 26. Nokia-A Global Marketing Success <ul><li>Global Market share jumped to 40% in 2007 </li></ul><ul><li>China market share: 35% </li></ul><ul><li>Trusted,but not trendy in the USA </li></ul><ul><li>US Cellphone market difficult to grow </li></ul><ul><li>Driven by cell-service carriers,like Verizon,AT & T </li></ul><ul><li>Phones sold at subsidized rates,works only with their service </li></ul>
  27. 27. Nokia-A Global Marketing success <ul><li>Europe: Nokia leader </li></ul><ul><li>USA leaders: Samsung, Motorola and Palm </li></ul><ul><li>USA: consumers driven by emerging technology </li></ul><ul><li>No right products </li></ul><ul><li>Corrected by launch of two new products: E Series and N Series </li></ul><ul><li>E Series: corporate E-mail users </li></ul><ul><li>N Series: Multimedia capabilties </li></ul>
  28. 28. Nokia <ul><li>E 90: closer to laptop </li></ul><ul><li>Some models: Big and Untrendy in USA but seen as strength in some markets </li></ul><ul><li>Old,Flat brick phones:Out of fashion in USA,status symbol in Jakarta </li></ul><ul><li>Trend laggard,but enormous level of trust from consumers in Asia and Europe </li></ul><ul><li>Wide View of the World </li></ul>
  29. 29. LVMH Moet Hennessey Louis Vouitton-A Global Marketing Success <ul><li>World’s largest luxury products manufacturer </li></ul>
  30. 30. LVMH… <ul><li>Enduring status symbol around the world </li></ul><ul><li>Major threats: Counterfeiting </li></ul><ul><li>Brand Dilution </li></ul><ul><li>Growth Markets: China and India </li></ul><ul><li>China: set up in 92 </li></ul><ul><li>Todat,LVMH China’s leading luxury brand </li></ul><ul><li>4 stores: Nanjing,Beijing,Tiajin and Shenyang </li></ul><ul><li>3 Stores in India: 2 in Delhi and 1 in Mumbai </li></ul>
  31. 31. LVMH in Japan <ul><li>Japanese customer: great eye for detail </li></ul><ul><li>Powerful appeal of French quality and savoir faire </li></ul><ul><li>Respect tradition yet future facing </li></ul><ul><li>54 Stores in Japan </li></ul><ul><li>Store Architecture integral part of brand identity </li></ul><ul><li>Instore experience as important as the product </li></ul>
  32. 32. LVMH in Japan-the Omotendo Building in Tokyo
  33. 33. LVMH in Japan…the Omotendo Building
  34. 34. The Importance of Global Markets <ul><li>Largest Market in the world: USA: 25% </li></ul><ul><li>Second largest Market: Japan: 15% </li></ul><ul><li>Largest European Market: Germany: 8% </li></ul><ul><li>Rise of the global corporation </li></ul><ul><li>Inefficient companies will disappear </li></ul>
  35. 35. The World’s largest companies 22,345 205,514 China Sinopec 9. Netherlands ING Group 8. 20,102 259,171 France Total SA 6. 35,235 367,053 UK BP 4. 51,340 453,500 Netherlands Royal Dutch Shell 1. -4,560 203,260 Japan Toyota Motors 10. -16,998 230,764 USA Conoco Philips 7. 23,931 263,159 USA Chevron 5. 13,400 405,607 USA Wal-Mart 3. 45,220 442,851 USA Exxon-Mobil 2. Profit($ mill) Revenues($ mill) Country Company Rank
  36. 36. Management Orientations <ul><li>Co’s responses depends on management’s assumption or beliefs </li></ul><ul><li>Ethnocentric </li></ul><ul><li>Polycentric </li></ul><ul><li>Regiocentric </li></ul><ul><li>Geocentric </li></ul>
  37. 37. Ethnocentric Orientation <ul><li>Home country is superior </li></ul><ul><li>Sees similarities in foreign countries </li></ul><ul><li>Assumption is: successful products in home countries can be sold anywhere without adaptation </li></ul><ul><li>Foreign operations viewed as secondary or subordinate </li></ul><ul><li>Assumption is HQ knowledge and capabilties applicable anywhere </li></ul><ul><li>For mfg cos, foreign markets means of disposal of surplus </li></ul>
  38. 38. Ethnocentric Orientation <ul><li>No systematic marketing research outside home country </li></ul><ul><li>No major modification in product </li></ul><ul><li>Differerences in consumer needs ignored </li></ul><ul><li>Ethnocentrism big internal threat </li></ul>
  39. 39. Polycentric Orientation <ul><li>Belief that each country is unique </li></ul><ul><li>Each subsidiary develops its unique business and marketing strategies </li></ul><ul><li>Called a Multinational Company </li></ul>
  40. 40. GE in Korea <ul><li>GE Capital,financing arm </li></ul><ul><li>Started with fully owned subsidiary in Korea </li></ul><ul><li>For six years,tried to market auto,personal loans and leasing of office equipments </li></ul><ul><li>Negligible market share </li></ul><ul><li>Folded ops of its two subsidiaries in 2004 into two subsidiaries of Hyundai Motors-Hyundai Capital(car financing arm) and Hyundai Card(credit card arm) </li></ul>
  41. 41. GE in Korea <ul><li>Since 2004, invested $ 3 billion in these two subsidiaries </li></ul><ul><li>Owns 43% of the shares </li></ul><ul><li>GE’s biggest minority investments in the world </li></ul><ul><li>Now, among GE’s most profitable investments </li></ul><ul><li>Model for GE’s marketing and branding strategies worldwide </li></ul><ul><li>Before Hyundai, GE strongly preferrred management control in JVs </li></ul>
  42. 42. GE in Korea <ul><li>GE success in Korea led to similar decisions……25.4% of Bank of Ayudha in Thailand </li></ul><ul><li>Hyundai had 75% of the Korean auto market </li></ul><ul><li>Korean operations provide 5.1% of GE’s worldwide profits of the consumer fianncing business </li></ul><ul><li>GE: moving from ethnocentricity to polycentricity </li></ul>
  43. 43. Regiocentric Orientation <ul><li>Regions as Unique </li></ul><ul><li>Intergrated Regional Strategy </li></ul><ul><li>US company focusing on the NAFTA countries </li></ul><ul><li>European company focusing on EU or Europe </li></ul>
  44. 44. Geocentric Orientation <ul><li>Entire world as potential market </li></ul><ul><li>Integrated world marketing strategy </li></ul><ul><li>“ Worldview”: similarities and differences in markets and countries </li></ul><ul><li>Global strategy fully responsive to local needs and wants </li></ul>
  45. 45. Ford and the World car <ul><li>Modelled after the BMW world car the 3 Series Sports Sedan </li></ul>
  46. 46. Ford and the World Car <ul><li>Ford planning the “world car” </li></ul><ul><li>Simple premise “ Building one product for multiple markets” </li></ul><ul><li>Basic belief: To make money on smalll cars, development and other costs to be spread over one huge global market </li></ul><ul><li>First test: the subcompact Fiesta </li></ul><ul><li>Fiesta selling well in Europe and Asia, to debut in the USA early 2010 </li></ul>
  47. 47. Ford and the World Car <ul><li>Risky strategy, failures earlier </li></ul><ul><li>Potential for huge profits </li></ul><ul><li>Regional divisions disagreement </li></ul><ul><li>CEO has organized the company around the world car </li></ul><ul><li>Global version of other models planned </li></ul>
  48. 48. Ford and the World Car <ul><li>Potential savings: upto $ 700 million per model </li></ul><ul><li>Plus factor: European and US tastes seem to be converging </li></ul><ul><li>Midsize sedans earlier much smaller in EU than USA,now almost comparable </li></ul><ul><li>Tastes to a degree is globalizing </li></ul>
  49. 49. The Inspiration…the BMW 3 Series Sports Sedan <ul><li>Virtually the same in every market </li></ul><ul><li>Secret of success” Show consumers what the next big thing is,not relect what they know now” </li></ul><ul><li>Ubiquity engenders trust while design creates inspiration </li></ul>
  50. 50. The Research <ul><li>Ford researched small car buyers…owners of VW in EU,Honda in USA and Toyota in China </li></ul><ul><li>Consumer: Aged 20-30 </li></ul><ul><li>Limited funds </li></ul><ul><li>Big apetite for fashion and design </li></ul><ul><li>Imaginary Global archetype customer: Isabella </li></ul><ul><li>Recent college graduate living near Milan </li></ul><ul><li>Creative,thinking about pursuing journalism </li></ul>
  51. 51. Isabella….. <ul><li>Modest earner,likes city living </li></ul><ul><li>Fashionable,very much in social media </li></ul><ul><li>Customer Clinics conducted all around the world </li></ul><ul><li>Isabell’s personality traits,aspirations and sensibilties and what she wants resonated around the world </li></ul><ul><li>What worked for BMW, will it work for Ford??????? </li></ul>
  52. 52. Factors driving Global Integration and Marketing <ul><li>Technology </li></ul><ul><li>Truly stateless </li></ul><ul><li>No cultural boundaries </li></ul><ul><li>Soon available everywhere in the world </li></ul>
  53. 53. Regional Economic Agreements <ul><li>NAFTA(North Atlantic Free Trade Agreement) </li></ul><ul><li>WTO (World Trade Organization) </li></ul><ul><li>EU (European Union) </li></ul>
  54. 54. Market Needs and Wants <ul><li>Cultural universals and differences </li></ul><ul><li>Common elements in human nature: Basis for creating global markets </li></ul><ul><li>Converging consumer needs and wants </li></ul><ul><li>Top global brands built on fulfilling universal needs…..basic appeal are global </li></ul>
  55. 55. The Top Global Brands
  56. 56. Transportation and Communication Improvements <ul><li>Time and cost barriers with distance has fallen dramatically </li></ul><ul><li>Physical distribution costs and time has reduced </li></ul>
  57. 57. Product Development Costs <ul><li>New products: Major investments and long periods of development time </li></ul><ul><li>Pfizer R&D Budget: $ 7 Billion Annually </li></ul>
  58. 58. Product Development costs <ul><li>High Product Development costs must be recovered in global marketplace </li></ul><ul><li>No single national market likely to be large enough </li></ul>
  59. 59. Quality <ul><li>Global Marketing Strategies generates greater revenue,greater margins and larger investments in product design and quality </li></ul><ul><li>Global companies “raise the bar” </li></ul><ul><li>Uniformity drives down research,engg,design and production cost </li></ul>
  60. 60. World Economic Trends <ul><li>Economic Growth resulted in market opportunities </li></ul><ul><li>India: Fertile Ground for long-term sustainable growth </li></ul><ul><li>India: A “guaranteed- to-happen” success story: Between ’92-93 to 2005-2006, average growth rate: 6.2% </li></ul><ul><li>India : Young People,virgin market: 400 Million people below 21 and 20 Million new babies every year </li></ul>
  61. 61. World Economic Trends <ul><li>Reduced resistance to entry of foreign firms </li></ul><ul><li>Worldwide movement towards deregulation and privatization </li></ul>
  62. 62. Leverages....Experience transfer <ul><li>Can leverage its experience in any market in the world: </li></ul><ul><li>Management Practices </li></ul><ul><li>Strategies </li></ul><ul><li>Products </li></ul><ul><li>Advertising Appeals </li></ul><ul><li>Sales Ideas </li></ul><ul><li>Promotional Ideas </li></ul>
  63. 63. Leverages…..Scale Economies <ul><li>Advantage of greater manufacturing volumes to obtain economies of scale </li></ul><ul><li>Finished products can be produced by combining components manufactured by scale-sufficient plants in different countries </li></ul>
  64. 64. Scale Economies <ul><li>Buying….Levers “Global procurement Officer” </li></ul><ul><li>Manufacturing </li></ul><ul><li>Marketing </li></ul><ul><li>Research & Development </li></ul><ul><li>Logistics </li></ul>
  65. 65. Resource Utilization <ul><li>Ability to scan the world to identify and raw materials that will enable it to compete efficiently in world markets </li></ul><ul><li>Indiabulls real Estate raised $ 533 million from FIIs(Fidelity,HSBC,TPG and Moor Capital) in May 2009 </li></ul>
  66. 66. Global Strategy <ul><li>Greatest single advantage </li></ul><ul><li>Based on info system that scans the whole world to identify opportunities,trends,threats and resources </li></ul><ul><li>Once opportunities are identified,leverages its skills and focuses its resources to create superior customer value and achieve competitive advantage </li></ul><ul><li>Design to create winning effort on a global scale </li></ul>
  67. 67. The Global/Transnational Corporation <ul><li>Any Business Enterprise that pursues global business objectives by linking world resources to world market opportunities </li></ul><ul><li>Within the international financial framework </li></ul><ul><li>Under the umbrella of global peace </li></ul><ul><li>Advantage of expanding communication technologies </li></ul><ul><li>Serve needs and wants on global scale </li></ul>
  68. 68. Restraining Forces <ul><li>Management Myopia and Organizational Culture </li></ul><ul><li>Essential to combine global vision and perspective with local market initiative and input </li></ul>
  69. 69. National Controls and Barriers <ul><li>Protectionist forces </li></ul><ul><li>Control over market acess and entry </li></ul><ul><li>Control over advertising </li></ul><ul><li>Nontariff Barriers </li></ul><ul><li>Only solution: Become “insiders” in every country </li></ul>