Global Marketing -Class 2

7/30/2019 Global Marketing -Class 2

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International MarketingClass 2

Wednesday April 3rd 2013

NSB


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Global Customers Are consumers around the world becoming more alike?

Market segments : Very rich, Teenagers, Technocrats

Is an average consumer yet different?

Regional markets when segmented can have unique characteristics and each segmentcan be distinct

Carrefour usually serves the high income segment recently opened a unit in

Indonesia where it is catering to the emerging middle class of Jakarta

Less developed countries shortage of goods and services

Difficulties for a marketer: low per capita income, high inflation, high level of taxationand import duties, improper communication/distribution channels, imbalance inincome distribution

Nike produces and sells a small portion of its output in China. Refers to china still as2 billion foot market focus on long term future

Customer Value - V= B/P (Value = Benefits/Price)

Most CRUCIAL Perceived value


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Is information crucial?

To survive in this new globally competitive world, we had to modernize.Information technology is the glue for everything we do James Wogsland, ViceChairman, Caterpillar

Org-Marg the largest marketing research company in India. Client list includeswhos who of global companies like Avon, Coca-Cola, Gillette, Uniliver etc. Mr.Ahuluwalia , the president clearly points out that India is different.

Second most populous nation with the middle class comprising of more than 200million people. Despite affluence, centuries old traditions and customs prevail.

Only 2% of urban dwellers use deodorant and only 1% have ACs and a recent Gallupsurvey revealed that only 1% intended to buy one.

Kellogg's not being able to penetrate the Indian market.

Western marketers find it tough to understand customer behavior.

Post 90s huge source of market information is available on the net


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Purpose of a MIS?

Is to provide managers and other decision makers of an organization withcontinuous information about markets, customer behavior, competitors andoperations.

Any MIS to incorporate a thorough means forgathering/analyzing/interpreting/reporting relevant data and must also cover aspectsrelating to the companys external environment

Colgate Palmolive - standardized its disparate and incompatible e-mail systemacross the globe - ^ employee productivity, ^ employees across 165 nations couldexchange files and data

Information is the key

Scanning modes Surveillance Informal information gathering: Viewing &Monitoring

Samsung entering into Automobiles Vs. general viewing of news, browsing, peoples

inputs Search mode is more of a formal information gathering Research, investigation to

seek specific data

One survey points out that more than 75% data acquired by headquarters executivesin US comes through surveillance


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Sources of Market

Information

Human Sources Inside Market Intelligence teams ; ethical and legal issues when aperson changes jobs ; GM Vs. Volkswagen Mr. Lopez head of purchasing at GMaccepted a job as production chief acquitted by a German court but a source ofembarrassment to Volkswagen

Documentary Sources Published public information and unpublished privateinformation

Internet Sources Information overload on the net, electronic resources have gotdeveloped over the recent years Economist Intelligence Unit maintained by The

Economist, Export to win by Port Authority of NY that helps small businesses learnabout exporting

Direct Perception Toyota redesigned it flagship luxury car, Lexus LS 400, 95 model .Chief designer and a team of 5 people went to US, stayed in luxury hotels and gatheredfirst hand information. Coat hooks were too small in the first generation LS400. Japanesethought it was literally to hang coats while in actuality it was to hang dry cleaning in thecars.

Formal Market Research

MIS as a strategic asset Emergence of transnational enterprises, boundaries b/w the firmand outside world is dissolving, flatter orgn structures, less hierarchy, marketing as adistinct function is diminishing greater a companys information intensity, ability tohandle competition, survive, sustain ^


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Trade Strategies

Governments approach towards economic development bearing in mind theinternational business environment

Two alternative trade strategies

Outward oriented trade strategy

Inward oriented trade strategy

Trade/Industrial policies dont discriminate between production for domesticmarkets and exports, nor between purchase of domestic goods or foreign goods

Bias towards domestic production as against foreign trade andimport substitutionis the key element


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Free Trade Vs. Protection

Free trade free from all kinds of barriers/restrictions or exchange controls Protection government protects domestic industries from foreign competition

Advantages of free trade

Most economic utilization of available resources

Quality producers compelled to improve efficiency

Domestic monopoly is prevented Consumer focus and exploitation is reduced considerably

Objectives of protection

Domestic industries to be protected from fierce global competition

Promote indigenous research and development

Direct foreign trade according to national priorities Conserve foreign exchange resources of the nation

Make the BOP position more favorable

Mobilize revenue to the local government

Advantages & demerits of protection


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Methods of Protection Tariff barriers

Non tariff barriers

Duties or taxes imposed on internationally traded goods when they cross national borders

Methods of protectionism as against tariffs . Export growth of many developing countrieshas got affected because of the increase in NTB, particularly by developed countries

WTO in favor of tariffs than NTBs as it is far more transparent and less regressive

Types of NTBs 2 categories1. Generally used by developing countries to prevent outflow of foreign exchange reserves

very traditional. Ex: import licensing, import quotas, foreign exchange regulations

2. Generally used by developed economies to protect domestic industries that have lostinternational competitiveness. Most important VER (Voluntary export restraint)

Quotas Quantitative restriction

Licensing Quota restrictions administered VER bilateral agreement to restrain the rapid growth of exports for specific goods to

either reduce the trade deficit or protect domestic industries

Administered protection wide range of bureaucratic government actions . Ex: healthstandards, government procurement, customs regulations


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Segmentation The process of subdividing a market into distinct subsets of customers that behave

in the same way or have similar needs

Each subset can be a target market and the strategies to approach the target marketunique

Global segmentation ? (world market)

Theodore Levitts Pluralization of consumption consumers in different countriesseek variety and this innate need leads to new segments showing up in severalnational markets. For ex: Greek salad, hamburger, sushi

Criteria One or more of the below mentioned aspects

Geographic (East Asia) ^ Proximity * need not be similar Japan & Vietnam (Highincome, industrial vs. emerging, less developed)

Demographic Measurable characteristics of population age, gender, income,education, occupation. Trends include working women, aging population, fewerchildren etc

Psychographic grouping people according to their values, lifestyle, attitude. Use ofquestionnaires to obtain data

Behavior consumer behavior is the key

Benefit focus on the numerator in the value equation (V= B/P)

Vertical Vs. Horizontal focus on product category, modality and price points . Eg:Medical imaging X Ray, CT Scan, MRI


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Targeting Is the act of evaluating and comparing the identified groups and selecting one or more

of them as prospect/s with the highest potential Criteria for targeting size, growth potential, potential competition, compatibility &

feasibility

Pepsi Vs. Coke in the Russian Market Pepsi had 100% in the Russian cola market, by96, Cokes share was 50%. Coke had waited for 15 years before it could enter Russia

Global target market strategies

1. Standardized - Coca-cola uses the appeal of youthful fun as its global advertisingmove

2. Concentrated Chanel the cosmetic house targets only upscale /prestige segment.Markets defined narrowly but the focus is on global depth and not national breadth

3. Differentiated variation of concentrated marketing. In the SUV segment, Rover has a

$50,000+ range rover for the high end and a land rover discoverer at under $35,000


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Positioning

Location of the product in the minds of a customer Is unified positioning strategy the key? Chase Manhattan Bank launched a $75 million

global advertising campaign with the theme profit from experience. Theres only onechase, so why confuse our customers?

Can this work across products/services?

Hi-tech positioning concrete product features, frequently purchased. Buyers wish toobtain a specific technical requirement or already have information on the same.

1. Technical products personal computers, stereos, financial services etc. focus should beon providing information and emphasize on features

2. Special interest products - more of leisure, recreation oriented. Customers depict highinvolvement and the target is a group of people who share similar experiences. Ex: Canoncameras, Fuji bicycles, Adidas sports equipments

High-touch positioning focus is on image and not on technicality. Buyers share acommon language of themes such as wealth, comfort, materialism etc.

1. Products that solve a common problem Friends getting together at a caf and spendingtime together

2. Global village products Fragrances, Pizza, Designer wear High quality, high price andhigh visibility. The lower priced ones denote a broad price spectrum. Mercedes, Sony,Marlboro/Levis

3. Products that use universal themes heroism, leisure, materialism etc

Global Marketing -Class 2

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