IMCEE

8/6/2019 IMCEE

1/253

International Marketing

In

The Changing Economics Environment

8/6/2019 IMCEE

2/253


Global Marketing

Marketing carried out by companies overseas oracross national borderlines

It includes:

market identification

Targeting

entry mode selection

marketing mix

and strategic decisions to compete in internationalmarkets

8/6/2019 IMCEE

3/253


It is the multinational process of planning and

executing the conception, pricing, promotion

and distribution of ideas, goods, and services

to create exchanges that satisfy individual and

organizational objectives

AMA (American Marketing Association)

It is the application of marketing principles to

more than one country

8/6/2019 IMCEE

4/253


Many American and European authors see

international marketing as:

a simple extension of exporting adapting the marketing mix 4P's, taking into

account differences in consumers and

segmentsGlobal marketing takes a more standardised

approach to world markets

8/6/2019 IMCEE

5/253

Global Marketing

The process of conceptualizing and thenconveying a final product or service worldwidewith the hopes of reaching the international

marketing community. Proper global marketing has the ability to

catapult a company to the next level, if they

do it correctly Different strategies are implemented based on

the region the company is marketing to.

8/6/2019 IMCEE

6/253

Global Vs International Marketing

In global marketing, marketers look at the

globe as ONE MARKET

They offer only a single line of product with avery minimal adaption of the local market.

Examples of it are McDonalds, Microsoft,

IBM, Ford and so on.

Products are standardized wherever you go., it

is homogenized.

8/6/2019 IMCEE

7/253


Unlike International Marketing they offer their

product across national boundaries that

specifically meet the preferences of the local

market.

Products are produced based upon the

culture, customs and sets of value of the

specific country.

8/6/2019 IMCEE

8/253

Stages of Global Marketing

International Marketing is a stage in

the evolution of Global Marketing.

8/6/2019 IMCEE

9/253

Stage 1: Domestic Marketing

Companies manufacturing products and

selling those within the country itself.

So, no international phenomenon at all

8/6/2019 IMCEE

10/253

Stage 2: Export Marketing

Company starts exporting products to anothercountries also.

It is the very basic stage of global marketing.

Approach of marketer in this stage is said tobe ethnocentric because although he isselling goods to foreign countries, product

development is totally based upon the taste oflocal customer.

So, focus is still on domestic market

8/6/2019 IMCEE

11/253

Stage 3: International Marketing

Now, company starts selling products to

various countries and the approach is

Polycentric i.e. making different products for

different countries.

8/6/2019 IMCEE

12/253

Stage 4: Multinational Marketing

The number of countries in which the company is doingbusiness gets bigger than that in earlier stage.

So, instead of producing different goods for differentcountries, company tries to identify different regions for

which it can deliver same product. So, same product for countries lying in one region but

different from product offered in countries of anotherregion. e.g. a company may decide to offer same product toIndia, Sri lanka and Pakistan if it thinks the taste of people

of these countries is same but at the same time offeringdifferent product for American countries.

This approach is called Regiocentric approach.

8/6/2019 IMCEE

13/253

Stage 5: Global Marketing

This is the final stage of evolution.

In this stage company really operates in a very

large number of countries and for the purposeof achieving cost efficiencies it analyses the

requirement and taste of customers of all the

countries and come out with a single product

which can satisfy the needs of all.

This approach is called Geocentric approach.

8/6/2019 IMCEE

14/253


A truly global company instead of offering

different products to different countries (as in

International Marketing), develops and offers

a single product to the world.

8/6/2019 IMCEE

15/253

Impact of Globalization

on International Marketing

8/6/2019 IMCEE

16/253

5 Areas Effected

There are five main areas affected by

globalization:

globalization of and by the economy globalization of and by

information/communication technology

globalization of and by politics

globalization of and by business

and globalization of and by education

8/6/2019 IMCEE

17/253

Globalization of and by the economy

The General Agreement on Tariffs and Trade (GATT)simulates free trade between countries by encouraging thereduction of tariff and non-tariff barriers

This allows firms to more easily trade and move around the

world Increased mobility is the increasingly large scope of money

and capital markets and looser regulations on foreign directinvestment

Multinationals now have more freedom and are more

dominant in the international business environment thenever before.

Adam Smiths theory of the invisible hand is now a globalreality.

8/6/2019 IMCEE

18/253

Globalization of and by information

technology

The convergence of information and

communication

technologies has resulted in:

a lower cost for information, furthering

globalization.

miniaturization and products have become

smaller, weighing less, as a result transportationcosts have dropped dramatically and global

sourcing has become common practice.

8/6/2019 IMCEE

19/253

Globalization of and by

communication technology

Furthering global standardization, English is

becoming the world language.

Notwithstanding this, there remain importantlanguage barriers. For example, Chinese and

Japanese users prefer software that is in their

log language.

8/6/2019 IMCEE

20/253

8/6/2019 IMCEE

21/253

8/6/2019 IMCEE

22/253

Globalization of and by business

The globalization of markets reflects the

growing interdependency among the

economics of the world and the multinational

nature of sourcing, manufacturing, trading,

and investment activities.

It also reflects the increasing frequency of

cross -border transactions and financing andthe heightened level of competition.

8/6/2019 IMCEE

23/253

Globalization of and by education

In addition to implying a different nature to economictransactions and a diverse set of players, globalization ofmarkets causes the individual firm to operate within a morecomplex political, legal -regulatory, and cultural context.

To operate successfully in less familiar environments,managers must develop an understanding of thegovernment sector, regulatory framework, and culturalidiosyncrasies of the markets where they wish to dobusiness.

Not only will management need to develop knowledge ofcountry specific factors, but must also understand theinterplay among these factors.

8/6/2019 IMCEE

24/253

Globalization of and by education

Management needs local knowledge but alsoglobal knowledge of business, law, politics, andsocieties.

Managers study the best practices of leadingcompanies and then try to implement them intheir own organizations.

Often managers must further their formal

education in order to keep up with andunderstand the new trends that are emergingwith international business and globalization.

8/6/2019 IMCEE

25/253

Global Marketing

Advantages and Disadvantages

8/6/2019 IMCEE

26/253

Advantages

The advantages of global market we can introduce our product byusing advertising

Economies of scale in production and distribution

Lower marketing costs

Power and scope

Consistency in brand image

Ability to leverage good ideas quickly and efficiently

Uniformity of marketing practices

Helps to establish relationships outside of the "political arena"

Helps to encourage ancillary industries to be set up to cater for theneeds of the global player

Benefits of eMarketing over traditional marketing

8/6/2019 IMCEE

27/253

Disadvantages

Differences in consumer needs, wants, and usage patterns forproducts

Differences in consumer response to marketing mix elements

Differences in brand and product development and the competitiveenvironment

Differences in the legal environment, some of which may conflictwith those of the home market

Differences in the institutions available, some of which may call forthe creation of entirely new ones (e.g. infrastructure)

Differences in administrative procedures

Differences in product placement. Differences in the administrative procedures and product

placement can occur

8/6/2019 IMCEE

28/253

Localization Vs Globalization

8/6/2019 IMCEE

29/253

Localization

Localization is a process which reverses the

trend of globalization by discriminating in

favour of the local.

It ensures that all goods and services that can

reasonably be provided locally should be.

8/6/2019 IMCEE

30/253

Corporate Globalization

This is the ever-increasing integration of

national economies into the global economy

through trade and investment rules and

privatization, aided by technological advances.

8/6/2019 IMCEE

31/253

Why Global?

The greatest comparative advantage is the

cost advantage in labour and even in fixed

costs at home.

Perhaps the most important reason is

ambition

8/6/2019 IMCEE

32/253

10 Tips for going global

MAKE IT YOUR COMPANY STRATEGY

IDENTIFY THE DESTINATION

DO THE RESEARCH

VISIT THE MARKET

WRITE A BUSINESS PLAN

FORM STRONG ALLIANCES

CONSULT THE EXPERTS

BE CULTURALLY SENSITIVE

CONSIDER THE LOGISTICSLocal regulations, currency fluctuations,tax implications, immigration issues for transferring staff and others

BE PATIENT

8/6/2019 IMCEE

33/253

International Trade

An Overview

8/6/2019 IMCEE

34/253

Overview

One of the most important phenomena in post-war

economic history has been the enormous expansion

of world trade.

Indian trade grew poorly from 1950 to 1980 ascompared with the world.

From 1980 onwards, Indian exports have been rising

at one and a half times the pace of growth in world

exports.

In 1993, India ranked 33rd in top exporting countries

and 32nd in top importing countries

8/6/2019 IMCEE

35/253

Indian Economy

An Overview

8/6/2019 IMCEE

36/253

Overview

India, an emerging economy, has witnessed

unprecedented levels of economic expansion,

along with countries like China, Russia, Mexico

and Brazil.

India, being a cost effective and labor

intensive economy, has benefited immensely

from outsourcing of work from developedcountries, and a strong manufacturing and

export oriented industrial framework.

8/6/2019 IMCEE

37/253

Overview

With the economic pace picking up, global

commodity prices have staged a comeback

from their lows and global trade has also seen

healthy growth over the last two years.

8/6/2019 IMCEE

38/253

Economic Prospects for 2010

8/6/2019 IMCEE

39/253

Prospects

The global economy seems to be recovering

after the recent economic shock.

The Indian economy, however, was hit in thelatter part of the global recession and the real

economic growth witnessed a sharp fall,

followed by lower exports, lower capital

outflow and corporate restructuring.

8/6/2019 IMCEE

40/253

8/6/2019 IMCEE

41/253

Global Economy

8/6/2019 IMCEE

42/253

8/6/2019 IMCEE

43/253

Global Economy

A global economy is characterized as a world

economy with an unified market for all goods

produced across the world.

It gives domestic producers an opportunity toexpand and raise capacity according to global

demands

Likewise, it also provides an opportunity to domestic

consumers to choose from a vast array of imported

goods. A global economy aims to rationalize prices of

all products globally.

8/6/2019 IMCEE

44/253

Basis for Trade

8/6/2019 IMCEE

45/253

Basis for Trade

It means that if you can fish better then you

pick coconuts, you should fish, and trade your

fish for coconuts.

8/6/2019 IMCEE

46/253

The Economics Basis for Trade

8/6/2019 IMCEE

47/253

Why do nations trade?

Trade allows nations to consume beyond their

maximum domestic production possibility

curve

There is an uneven distribution of natural,

human and capital resources among nations.

Therefore different countries have

comparative advantages (NOT absolute) ondifferent products.

8/6/2019 IMCEE

48/253


Efficient production of various goods requires

different technologies and combinations of

resources.

Thus it may be more efficient if countries

specialize.

8/6/2019 IMCEE

49/253


Products are differentiated as to quality and

non-price attributes (eg. French wine as

opposed to Californian wine).

People may prefer imported goods rather than

domestic manufactured goods.

8/6/2019 IMCEE

50/253


Regardless of labor, land, or capital intensity in

a nation, any nation may have a niche in

trading certain products based on the unique

qualities of those products.

Thus, by allowing specialization to occur

through trade, in which countries produce

goods according to their resource availability,each trading country can acquire more goods

and services.

8/6/2019 IMCEE

51/253


The distributions, technology, and product

distinctiveness can change. As changes occur,

the relative efficiency with which a nation can

produce specific goods will also change.

8/6/2019 IMCEE

52/253

Basis for Trade

Two principles

8/6/2019 IMCEE

53/253

Principles

The basis of trade between two nations is built

upon two principles:

Absolute advantage Comparative advantage

8/6/2019 IMCEE

54/253

Absolute Advantage

Among other things and technicians we need a carpenter and

a mason to build a house.

One can find a mason who also has some carpentry skills or a

carpenter who knows a bit about masonry

When comparing the two it is obvious that the mason has an

absolute advantage in doing masonry while the carpenter has

an absolute advantage, when compared to the mason, in

taking care of the carpentry.

Thus it will benefit both of them if the mason specializes inmasonry work while the carpenter sticks to carpentry.

8/6/2019 IMCEE

55/253

Absolute Advantage

Similarly Iran and Pakistan produce oil (petroleum) and

cotton.

Yet we all know Iran is one of the world's largest producers of

oil while Pakistan is known for growing high quality cotton.

Rather than both nations try producing both cotton and oil, it

will benefit Iran to specialize in oil production, in which it has

absolute advantage while Pakistan utilizes its absolute

advantage in growing cotton.

It will benefit both countries if Iran exchanges its oil forPakistan's cotton.

8/6/2019 IMCEE

56/253

Comparative Advantage

Now suppose the mason that we mentioned

above has also better skills in carpentry than

the carpenter.

However, his skills as a mason far exceed his

skills as a carpenter. Moreover, his hourly

wages as a mason may be higher than his

wages as a carpenter. Thus, between the two skills he has a

comparative advantage in masonry.

8/6/2019 IMCEE

57/253

Comparative Advantage

Just for example if suppose America is able to

produce better quality oil and wheat at a lower cost

than Canada, then why it may still be to its benefit to

import oil from Canada and export wheat? Because within a given time and cost America can

produce much more wheat than oil. Thus it has a

comparative advantage in producing cotton.

Therefore, it will benefit America to import oil inexchange for its surplus cotton.

8/6/2019 IMCEE

58/253

Absolute advantage in trade

8/6/2019 IMCEE

59/253

Absolute advantage in trade

Whenever a nation can produce a particular product

(good or service) at a lower cost than another nation,

it has then an absolute advantage in producing that

particular product as compared to another nation. Absolute advantage compares the cost of producing

the same product by two different nations.

Absolute advantage is the ability of a nation to

produce a specific product with fewer resources, per

unit of output, than other nations

8/6/2019 IMCEE

60/253

Comparative advantage in trade

8/6/2019 IMCEE

61/253

Comparative advantage in trade

Whenever a nation can produce a product (good or

service) at a lower cost than another product, it has

then a comparative advantage in producing that

particular product as compared to another product. Comparative advantage compares the cost of

producing two different products by the same

nation.

Comparative advantage is the ability of a nation to

produce a specific product at a lower opportunity

cost than other nations

8/6/2019 IMCEE

62/253

Economic Integration

8/6/2019 IMCEE

63/253

Economic Integration

It is the elimination of tariff and non-tariff

barriers to the flow of goods, services, and

factors-of-production between a group of

nations, or different parts of the same nation

Economic integration is a process where

barriers to trade are reduced or eliminated to

facilitate trade between regions or nations This causes the volume of trade to increase

8/6/2019 IMCEE

64/253

8/6/2019 IMCEE

65/253

Benefits of Economic Integration

8/6/2019 IMCEE

66/253

8/6/2019 IMCEE

67/253

Opportunities for employment

The various options available in economic

integration help to liberalize and encourage

trade which results in market expansion due

to which high amount of capital is invested ina countrys economy.

This creates higher opportunities for

employment of people from all over theworld.

8/6/2019 IMCEE

68/253

8/6/2019 IMCEE

69/253

Disadvantages of Economic

Integration

8/6/2019 IMCEE

70/253

Disadvantages

Creation Of Trading Blocs

Trade Diversion

National

Sovereignty

8/6/2019 IMCEE

71/253

Creation Of Trading Blocs

It can also increase trade barriers against non-

member countries

8/6/2019 IMCEE

72/253

Trade Diversion

Because of trade barriers, trade is diverted

from a non-member country to a member

country despite the inefficiency in cost.

For example, a country has to stop trading

with a low cost manufacture in a non-member

country and trade with a manufacturer in a

member country which has a higher cost.

8/6/2019 IMCEE

73/253

National Sovereignty

Requires member countries to give up some

degree of control over key policies like trade,

monetary and fiscal policies.

The higher the level of integration, the greater

the degree of controls that needs to be given

up particularly in the case of a political union

economic integration which requires nationsto give up a high degree of sovereignty.

8/6/2019 IMCEE

74/253

Sovereignty of Nations

In the context of International law, a sovereign

state is:

Independent and free from all external control

Enjoys full legal equality with other states

Governs its own territory

Selects its own political, economic and social systems

And has the power to enter into agreements withother nations

8/6/2019 IMCEE

75/253


Sovereignty refers to both:

the powers exercised by state in relation to other

countries

And the supreme power exercised over its ownmembers

8/6/2019 IMCEE

76/253


A state sets requirement for

Citizenship

Defines geographical boundaries

Controls trade And the movement if people and goods across its borders

It is with the extension of national laws beyond a

countrys border that much of the conflict in

international business arisesThis is especially true when another country consider its own

sovereignty to be compromised

8/6/2019 IMCEE

77/253


Nations can and do abridge specific aspects of

their sovereign rights in order to coexist with

other nations.

Following represents the examples of nations

voluntarily agreeing to give up some of their

sovereign rights in order to participate with

members nations for a common, mutuallybeneficial goal:

The European Union

8/6/2019 IMCEE

78/253


The European Union

North America Free Trade Agreement (NAFTA)

North Atlantic Treaty Organization (NATO)

World Trade Organization (WTO)

Foreign investments can also be perceived as s

threat to sovereignty

8/6/2019 IMCEE

79/253

WTO

WTO by some is considered by some as the

biggest threat to national sovereignty.

Adherence to the WTO inevitably means loss

of some degree of national sovereignty

because the members nations have pledged to

abide by national covenants and arbitration

procedures that can override national lawsand have far-reaching ramification for citizens

8/6/2019 IMCEE

80/253

Covenant - an agreement, usually formal,

between two or more persons to do or not do

something specified.

Arbitration - the application of judicial

methods to the settlement of international

disputes.

8/6/2019 IMCEE

81/253

National Security

8/6/2019 IMCEE

82/253

National Security

the requirement to maintain the survival of

the nation-state through the use of economic,

military and political power and the exercise of

diplomacy."

8/6/2019 IMCEE

83/253

National Security

National security is the requirement to

maintain the survival of the nation-state

through the use of:

economic

military & political power

and the exercise of diplomacy

The concept developed mostly in the UnitedStates of America after World War II.

8/6/2019 IMCEE

84/253

National Security

Security threats involve not only conventional

foes such as nation-states but also non-state

actors such as terrorist organizations, narcotic

cartels and multi-national organizations

Some authorities including natural disasters

and events causing severe environmental

damage in this category

8/6/2019 IMCEE

85/253

National Security

Measures taken to ensure national security

include:

using diplomacy to rally allies and isolate threats

marshalling economic power to facilitate or compelcooperation

maintaining effective armed forces

implementing civil defense and emergencypreparedness measures (including anti-terrorism

legislation)

8/6/2019 IMCEE

86/253

National Security

Measures taken to ensure national security

include:

ensuring the resilience and redundancy of critical

infrastructure using intelligence services to detect and defeat or

avoid threats and espionage, and to protect classified

information

using counterintelligence services or secret police to

protect the nation from internal threats

8/6/2019 IMCEE

87/253

Elements of NS

Military Security

Political Security

Economic Security

Environmental Security

Security of Energy and Natural Resources

National security and rights & freedoms

8/6/2019 IMCEE

88/253

Technical Aspects of NS

This ranges from information protection related to

state secrets to weaponry for militaries to

negotiations strategies with other nation states.

The national security aparatus depends largely oncombinations ofmanagement practices, technical

capabilities, the projection of images both internally

and externally, and the capacity to gain enough of

the will of the people to gather taxes and spendthem on useful efforts.

8/6/2019 IMCEE

89/253

8/6/2019 IMCEE

90/253

Global Market

The activity of buying or selling goods and

services in all the countries of the world, or

the value of the goods and services sold

8/6/2019 IMCEE

91/253

Marketing Research

MR is traditionally defined as the systematic

gathering, recording and analyzing of data to

provide information useful in marketing

decision making

The research process and methods are

basically the same whether applied in any

country

8/6/2019 IMCEE

92/253

Marketing Research

International marketing research involves two

additional complications:

1. Information must be communicated across

cultural boundaries

2. The environments within which the research

tools are applied are often different in

foreign markets

8/6/2019 IMCEE

93/253

Domestic and Foreign Market Research

Difference:

The basic difference is the broader scope

needed for foreign research, necessitated by

higher level of uncertainity

8/6/2019 IMCEE

94/253

Marketing Research

Research can be divided into three types based on

information needed:

1. General information about the country, area, and/or market

2. Information necessary to forecast future marketing

requirements by anticipating social, economic, consumer

and industry trends within specific markets or countries

3. Specific market information used to market product,

promotion, distribution, and price decision, and to develop

marketing plans.

8/6/2019 IMCEE

95/253

Marketing Research

Following information is for sound assessment

of a foreign market:

Economic growth of economy, inflation, business cycle trends, profitability

analysis for the divisions products: specific industry economic studies.

Cultural, sociological and political climate

Overview of market conditions

Summary of the technological environment

Competitive situation competitors sales revenue, methods of marketsegmentation, products, and apparent strategies on an international scope

8/6/2019 IMCEE

96/253

Research Process

Define the research problem and establish research objectives

Determine the sources of information to fulfill the research

objectives

Consider the costs and benefits of the research efforts

Gather the relevant data from secondary or primary source,

or both

Analyze, interpret and summarize the results

Effectively communicate the results to decision makers

8/6/2019 IMCEE

97/253

Primary Market Research

Information that comes directly from the

source--that is, potential customers

When conducting primary market research,

you can gather two basic types of information:

exploratory

or specific

8/6/2019 IMCEE

98/253

Primary Market Research

Exploratory research is open-ended. It helps

you define a specific problem, and usually

involves detailed, unstructured interviews in

which lengthy answers are solicited from asmall group of respondents.

Specific research, on the other hand, is precise

in scope and is used to solve a problem thatexploratory research has identified. Interviews

are structured and formal in approach.

8/6/2019 IMCEE

99/253

Secondary Market Research

Market research that's already compiled and

organized for you.

Examples of secondary information include reports

and studies by government agencies, tradeassociations or other businesses within your

industry.

Secondary sources include the following:

Public sources

Commercial sources

Educational institutions

8/6/2019 IMCEE

100/253

Quantitative Research

Usually a large number of respondents are

asked to reply either verbally or in writing to

structured questions using a specific response

format (such as yes/no) or to select aresponse from a set of choices

Qs are designed to obtain specific responses

regarding aspects of the respondentsbehavior, intentions, attitudes, motives, and

demographic characteristics

8/6/2019 IMCEE

101/253

Qualitative Research

QR provides the marketer with responses that

can be presented with precise estimations

The structures responses received in a survey

can be summarized in a percentages, averages

or other statistics

8/6/2019 IMCEE

102/253

Research on the Internet

A growing opportunity

h h

8/6/2019 IMCEE

103/253

Research on the Internet

There are 8 different uses for the Internet in the

international research:

1. Online surveys and buyer panels incentives for participation

2. Online focus group

3. Web visitor tracking4. Advertisement measurement

5. Customer identification system many companies are installing registrationprocedures that allow them to track

6. E-mail marketing list customers can be asked to sign-up on email lists to receive futuredirect marketing mails

7. Observational research chat rooms, blogs and personal websites can besystematically monitored to assess consumers opinions about product and services

8. Embedded research

8/6/2019 IMCEE

104/253

Cultures are just different, not

right or wrong or better or worse

8/6/2019 IMCEE

105/253

We must not make value judgments as to whether

cultural behaviour is good or bad, better or worse

There is no cultural right or wrong, just difference

People around the world feel as strongly about theirculture as we about ours.

Every country thinks its culture is the best

And for every foreign peculiarity that amuses us,

there is an Indian peculiarity that amuses others

8/6/2019 IMCEE

106/253

NAFTA

North American Free Trade Agreement

NAFTA

8/6/2019 IMCEE

107/253

NAFTA

It is a comprehensive trade agreement that

addresses, and in most cases improves, all aspects of

doing business within North America

The elimination of trade and investment barriersamong Canada, Mexico and the US creates one of

the largest and richest markets in the world

It has improved the other long-standing conflicts

such as legal and illegal immigrations

NAFTA

8/6/2019 IMCEE

108/253

NAFTA

NAFTA has paved the way for Wal-Mart to

move in Mexico and Mexican supermarket

giant Gigante to move into the US

Other cross-border services are also thriving,including entertainment and health care

8/6/2019 IMCEE

109/253

NAFTA

Key Provisions

8/6/2019 IMCEE

110/253

8/6/2019 IMCEE

111/253

CAFTA

Central America Free Trade

Agreement

CAFTA

8/6/2019 IMCEE

112/253

CAFTA

It is a free trade agreement between the

United States and the Central American

countries of Costa Rica, El Salvador,

Guatemala, Honduras, and Nicaragua, andwas called CAFTA.

In 2004, the Dominican Republic joined the

negotiations, and the agreement wasrenamed DR-CAFTA.

ASEAN

8/6/2019 IMCEE

113/253

ASEAN

Indonesia

Malaysia

Singapore

Thailand

Philippines

Brunei

Vietnam

Myanmar

Laos

Cambodia

The Association of Southeast Asian Nations

ASEAN

8/6/2019 IMCEE

114/253

ASEAN

It is a geo-political and economic organization

of 10 countries located in Southeast Asia,

which was formed on 8 August 1967

If ASEAN were a single country, it would rankas the 9th largest economy in the world and

the 3rd largest in Asia in terms of nominal

GDP

ASEAN

8/6/2019 IMCEE

115/253

ASEAN

Its aims include:

the acceleration of economic growth, social

progress, cultural development among its

members,

the protection of the peace and stability of the

region,

and to provide opportunities for membercountries to discuss differences peacefully.

South Asia Region

8/6/2019 IMCEE

116/253

South Asia Region

India

Afghanistan

Bangladesh

Bhutan

Maldives

Nepal

Pakistan

Sri Lanks

8/6/2019 IMCEE

117/253

SAARC

South Asian Association for Regional Co-operation

SAARC

8/6/2019 IMCEE

118/253

SAARC

Non-Least Developed Countries (NLDCSs)

India

Pakistan

Sri Lanka

Least Developed Countries (LDCSs)

Bangladesh

Bhutan Maldives

Nepal

8/6/2019 IMCEE

119/253

SAPTA

The SAARC Preferential Trading Agreement

SAPTA

8/6/2019 IMCEE

120/253

SAPTA

It was signed by the seven countries during

the Seventh SAARC summit held in Dhaka in

April, 1993

It provides a framework for exchange of tariffconcessions and also for liberalization inpara-

tariffand non-tariffconcessions with a view to

promoting trade and economic cooperationamong the SAARC member countries

Tariffs are taxes on imported goods

8/6/2019 IMCEE

121/253

European Union

Member states of the EU

8/6/2019 IMCEE

122/253

Member states of the EU

Austria

Belgium

Bulgaria

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Malta

Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

United Kingdom

8/6/2019 IMCEE

123/253

Non Tariff

8/6/2019 IMCEE

124/253

Non-Tariff

Non-tariff barriers to trade (NTB's) are trade barriers

that restrict imports but are not in the usual form of

a tariff

It is a covert restriction to imported goods.

Governments may not wish to be seen to restrict

trade but can do so by introducing regulations, such

as product labeling laws, which make it more difficult

and more expensive for overseas producers tooperate in the market.

8/6/2019 IMCEE

125/253

Barriers to entering global

markets for consumers Services

Barriers

8/6/2019 IMCEE

126/253

Barriers

Most of the services automobile rentals, airline

services, entertainment, hotels and tourism to name

a few are inseparable and require production and

consumption to occur almost simultaneously

Thus exporting is not a viable entry method for

them. The vast majority of services (some 85 percent)

enter foreign markets by licensing, franchising or

direct investment.

Barriers

8/6/2019 IMCEE

127/253

Barriers

Four kinds of barriers face consumer services

marketers in this growing sector of the global

marketplace:

Protectionism

Restrictions on Trans-border Data Flows

Protection ofIntellectualProperty

Cultural Barriers and adaptations

Protectionism

8/6/2019 IMCEE

128/253

Protectionism

The European Union is making modest progress

toward establishing a single market for services

However, exactly how foreign services providers will

be treated as unification proceeds is not clear A directive regarding trans-frontier television

broadcasting created a quota for European

programs, requiring EU member states to ensure that

at least 50 per cent of entertainment air tome isdevoted to European works. The European Union

argues that this set aside for domestic programming

is necessary to preserve Europes cultural identity

Restrictions on Trans-border Data Flows

8/6/2019 IMCEE

129/253

Restrictions on Trans border Data Flows

The European Commission is concerned that data on

individuals (such as income spending preferences

debt repayment histories, medical conditions and

employment data) are being collected manipulated

and transferred between companies with little regard

to the privacy of the affected individuals

A proposed directive by the Commission would

require the consent of the individual before data arecollected or processed.

8/6/2019 IMCEE

130/253

Protection of Intellectual Property

8/6/2019 IMCEE

131/253


The Trade Related Intellectual Property Rights (TRIPs)

part of the GATT agreement obligates all members to

provide strong protection for copyright and related,

patents trademarks; trade secrets industrial designs,

geographic indications and layout designs for

integrate circuits.

The TRIPs agreements are helpful, but the key issues

are that enforcement is very difficult without the fullcooperation of host countries.


8/6/2019 IMCEE

132/253


The situation in China has been particularly bad because that

country has not been active in combating piracy of intellectual

property. The annual cost of pirated software, CDs books and

moves in China alone is estimated to be more than $1 billion.

Worldwide industry estimates are that US companies lose $60 billion annually on piracy of all types of intellectual

property.

In Thailand for example illegal copies of movies are available

within 10 days of their release in the UnitedS

tates. In Russiapirated movies are sometimes available before their (legal) US

debut!

8/6/2019 IMCEE

133/253


8/6/2019 IMCEE

134/253


The company has learned to encourage

managers in Poland to probe employee

problem and to assign troubled workers to the

kitchen rather than to the food counter. Japanese internet purchasers often prefer to

pay in cash and in person rather than trust the

internet transaction or pay high credit cardfees.


8/6/2019 IMCEE

135/253


Students in Japan listen to lectures, take notes

and ask questions only after class. Spaniards

are used to large undergraduate classes

(hundreds rather than dozens), they tend totalk to their friends even when the instructor

is talking


8/6/2019 IMCEE

136/253


Healthcare systems and doctor patient interactions reflect

cultural differences.

Americans ask questions and get second opinions. Innovative

healthcare services are developed on the basis of extensive

marketing research. In Japan the social hierarchy is reflected heavily in the

patients deference to their doctors.

While Japanese patient compliance is excellent and longevity

is the best in the world, the healthcare system there isrelatively unresponsive to the expressed concerns of

consumers.


8/6/2019 IMCEE

137/253


Japanese also tend to take a few long vacations 7 to

10 days is the norm. Thus vacation packages

designed for them are packed with activities.

Phoenix, Las Vegas and San Diego or Rome, Geneva,

Paris and London in 10 days make sense to them.

The Four Seasons hotel chain provides special

pillows, kimonos, slippers and teas for Japanese

guests. Virgin Atlantic Airways and other long haul

carriers now have interactive screens available for

each passenger allowing viewing of Japanese (or

American, French etc) movies and TV.


8/6/2019 IMCEE

138/253


Managing a global services workforce is certainly no

simple task. Just ask the folks at UPS.

Some of the surprises UPS ran into included

indignation in France when drivers were told theycouldnt have wine with lunch, protests in Britain

when drivers dogs were banned from delivery trucks,

dismay in Spain when it was found that the brown

UPS trucks resembled the local hearses, and shock inGermany when brown shirts were required for the

first time since 1945.a vehicle for conveying a dead person to the place of burial

brown shirts of the German Nazis


8/6/2019 IMCEE

139/253


And while tips of 10 to 15 per cent are an

important part of services workers incentives

in the United States, this is not the case in

Germany where tips are rounded to thenearest deutsche mark. Thus closer

management of service personnel is required

in those countries to maintain high levels of

customer satisfaction

8/6/2019 IMCEE

140/253

Planning for Global Market

What is Planning

8/6/2019 IMCEE

141/253

What is Planning

Planning is a systemized way of relating to the

future

It is an attempt to manage the effects of

external, uncontrollable factors on the firmsstrengths, weaknesses, objectives, and goals

to attain a desired end

In other words, planning is the job of makingthings happen that might not otherwise occur

8/6/2019 IMCEE

142/253

Planning for Domestic Vs

International MarketAny difference?

Planning for Domestic Vs International Market

8/6/2019 IMCEE

143/253

g

Principles of planning are the same

But the intricacies of the operating

environment of the multinational company, its

organizational structure, and task ofcontrolling a multi-country operation creates

differences


8/6/2019 IMCEE

144/253

g

Planning allows for rapid growth of the

international function, changing markets,

increasing competition, and the turbulent

challenges of different national markets Planning relates to formulation ofgoals and

methods of accomplishing them.

So it is both a process and philosophy


8/6/2019 IMCEE

145/253

g

Structurally, planning may be viewed as

corporate, strategic or tactical

International corporate planning is essentially

long term, incorporating generalized goals forthe enterprise as a whole

trategic planning is conducted at the highest

levels of management and deals withproducts, capital, and research, and long and

short term goals of the company


8/6/2019 IMCEE

146/253

g

Tactical planning or market planning, pertains

to specific actions and to the allocation of

resources used to implement strategic

planning goals in specific markets. Tactical plans are made at the local level and

address marketing and advertising questions

8/6/2019 IMCEE

147/253

Market Entry - Strategies

8/6/2019 IMCEE

148/253

y g

When a company plans to go global, it must

chose an entry strategy

This decision should reflect:

market characteristics:

Potentials Sales

Strategic importance

Strengths of local resources

Cultural differences

and country restrictions


8/6/2019 IMCEE

149/253

y g

Company capabilities and characteristics

Including the degree of near-market knowledge

Marketing involvement

And commitment that management is prepared tomake


8/6/2019 IMCEE

150/253

y g

The approach to foreign marketing can range

from minimal investment with frequent and

indirect exporting to large investments of

capital and management in an effort tocapture and maintain a permanent, specific

share of world markets

Depending on the firms objectives andmarket characteristics, either approach can be

profitable

8/6/2019 IMCEE

151/253

8/6/2019 IMCEE

152/253

Modes of market entry

Modes of market entry

8/6/2019 IMCEE

153/253

y

1. Exporting

2. Contractual Agreement

3. Strategic Alliances

4. Direct Foreign Investments

Exporting Internet

8/6/2019 IMCEE

154/253

Contractual Agreement

Strategic Alliances

Ownership

Greater

control and

greater risk

Exporter

Importer

Distributor

Direct Sales

Licensing & Franchising

Strategic Alliances

Joint ventures and consortia

Direct Foreign Investment

8/6/2019 IMCEE

155/253

Exporting

Exporting

8/6/2019 IMCEE

156/253

Direct Exporting

The company sells to a

customer in another

country

This is the most common

approach

First step towards

international marketing

since the minimal risk offinancial loss

Indirect Exporting

The company sells to a

buyer (importer or a

distributor) in the home

country who in turn exportsthe product

Customers like Wal-Mart,

wholesale supply houses,

trading companies & othersthat buy to supply

customers abroad

Exporting

8/6/2019 IMCEE

157/253

Early motive of exporting is to:

skim the cream from the market

Or gain business to absorb overhead

Early enquiry maybe opportunistic and come in theform of an enquiry from a foreign customer or

initiatives from an importer in the foreign market

Exporting is also a common approach for mature

international companies with strong marketingcapabilities

It is increasingly becoming an important

8/6/2019 IMCEE

158/253

foreign market entry method

Internet

Initially internet marketing focused ondomestic sales

8/6/2019 IMCEE

159/253

Dell Computer Corporation expanded its strategy ofselling computers over the internet to foreign sites as

well

Dell began selling computers via internet to Malaysia,

Australia, Hong Kong, New Zealand, Singapore,

Taiwan, and other countries through:

virtual stores or internet

The same selling module has been launched inEurope

8/6/2019 IMCEE

160/253



8/6/2019 IMCEE

161/253

These are long-term, non-equity associationbetween a company and another in a foreign

market.

It generally involve the transfer of technology,processes, trademarks, or human skills.

In short, they serve as a means of transfer of

knowledge rather than equity


8/6/2019 IMCEE

162/253

Licensing

Franchising

8/6/2019 IMCEE

163/253

8/6/2019 IMCEE

164/253

Licensing

8/6/2019 IMCEE

165/253

Advantages of licensing are most apparent,

when:

When capital is scarce

Import restrictions forbid other means of

entry

A country is sensitive to foreign ownership

Patents and trademarks must be protected

against cancellation for nonuse

Licensing

8/6/2019 IMCEE

166/253

Risks of licensing are:

Choosing wrong partner

Quality and other production problem

Payment problems

Contract enforcement

Loss of marketing control

Licensing

8/6/2019 IMCEE

167/253

Licensing may be least profitable way ofentering market

But the risks and headaches are less than

direct investments It is a legitimate means of capitalizing on

intellectual property in a foreign market

Such agreements also benefit the economiesof the target countries

Franchising

8/6/2019 IMCEE

168/253

It is a rapidly growing form of Licensing

Franchiser provides:

Standard package of products, systems and

management services

Franchisee provides:

Market knowledge

Capital Personal involvement in management

Franchising

8/6/2019 IMCEE

169/253

Franchises include: Soft drinks

Motels

Retailing

Fast foods

Car rentals

Automotive services

Recreational services

Variety of business services from print shops to sign shops

8/6/2019 IMCEE

170/253

Asia Pacific Rim

8/6/2019 IMCEE

171/253

The Pacific Rim refers to places around theedge of the Pacific Ocean

Asia Pacific Rim

8/6/2019 IMCEE

172/253

Australia Brunei

Cambodia

Canada

Chile

China

Colombia

Costa Rica

Ecuador

El Salvador

Fiji

Guatemala

Honduras

Hong Kong Indonesia

Japan

Malaysia

Marshall Islands

Mexico Federated States of Micronesia

Nauru

New Zealand

Nicaragua

North Korea

Palau

Panama

Papua New Guinea

Peru

Philippines

Russia

Samoa

Singapore Solomon Islands

South Korea

Taiwan

Thailand

Timor-Leste Tonga

Tuvalu

United States

Vanuatu

Vietnam

8/6/2019 IMCEE

173/253

Franchising

8/6/2019 IMCEE

174/253

Franchising is an attractive form of corporateorganisation for companies wishing to expand

quickly with low capital investment

Foreign laws and regulations are friendlytowards franchising because it tends to foster

local ownership, operations and employment

Franchising

8/6/2019 IMCEE

175/253

Two types:

1. Master franchise

2. Licensing

Either of which can have a countrys government

as one partner

Master Franchise

8/6/2019 IMCEE

176/253

Master Franchise is the most inclusiveagreement

It gives the franchisee the rights to a specific

area (many are for an entire country), with theauthority to sell or establish sub franchises

The McDonalds franchise in Moscow is a

master agreement owned by a Canadian firmand its partner, the Moscow City Council

Department of Food Services

Licensing

8/6/2019 IMCEE

177/253

Licensing a local franchisee the right to use aproduct, good, service, trademark, patent, or

other asset for a fee

Coca-Cola Company licenses local bottlers inan area or region to manufacture and market

Coca-Cola using syrup sold by Coca-Cola

8/6/2019 IMCEE

178/253

Strategic International Alliances


8/6/2019 IMCEE

179/253

SIA is a business relationship established bytwo or more companies to cooperate out of

mutual need and to share riskin achieving a

common objective Its importance is in the competitive strategy in

global marketing

It is sought as a way to shore up weaknessesand increase competitive strength


8/6/2019 IMCEE

180/253

Firms enter into SIA for: Opportunities for rapid expansion into new

markets

Access to new technology More efficient production and innovation

Reduced marketing costs

Strategic competitive moves

Access to additional sources of products and

capital

8/6/2019 IMCEE

181/253

International Joint Ventures

8/6/2019 IMCEE

182/253

It serves as a means of lessening political andeconomic risks by the amount of the partners

contribution to the venture

IJVs provide a way to enter markets that poselegal and cultural barriers that is less risky

than acquisition of an existing company


8/6/2019 IMCEE

183/253

A JV is differentiated from other types ofSIAor collaborative relationships

It is a partnership of the two or more

participating companies that have joinedforces to create a separate legal entity

JV are different than minority holdings by an

MNC in a local firm


8/6/2019 IMCEE

184/253

Four characteristics define JVs: JVs are established, separate, legal entities

They acknowledge intent by the partners to share

in the management of the JV They are partnership between legally incorporated

entities such as companies, chartered

organizations, or governments, and not between

individuals, and Equity positions are held by each partners

Consortia

8/6/2019 IMCEE

185/253

Consortia are similar to joint ventures andcould be classifies as such except for two

unique characteristics:

1. They typically involve a large number ofparticipants

2. They frequently operate in a country or

market in which none of the participants iscurrently active

Consortia

8/6/2019 IMCEE

186/253

They are developed to pool financial andmanagerial resources and to lessen risks

Often huge construction projects are built

under a consortium arrangement in whichmajor contractors with different specialties

form a separate company

One firm usually acts as the lead firm or thenewly formed corporation may exist

independently of its originator

8/6/2019 IMCEE

187/253

8/6/2019 IMCEE

188/253


8/6/2019 IMCEE

189/253

8/6/2019 IMCEE

190/253


8/6/2019 IMCEE

191/253

Several factors have influenced the structure andperformance of DI:

Timing

First movers have advantages but are more risky

The growing complexity and contingencies of contracts

Transaction cost structures

Technology transfers

Degree of product differentiations

The previous experiences and cultural diversity of acquired

firms

Advertising and reputation barriers


8/6/2019 IMCEE

192/253

As legal restrictions continue to ease withWTO and other international agreements,

more and more large firms are choosing to

enter market via direct investment

8/6/2019 IMCEE

193/253


8/6/2019 IMCEE

194/253

Yahoo! Recently paid $1 billion for a 40percent stake in Chinese competitor Alibaba

Nestle is building a new milk factory in

Thailand to serve the ASEAN Free Trade Area

8/6/2019 IMCEE

195/253

Quality

8/6/2019 IMCEE

196/253

Global competition has shortened the product lifecycle

It has shifted the focus mainly on quality, competitive

price and innovative products

More competition, more choices has put more

power in the hands of the consumer.

The power in the marketplace is shifting from a

sellers to a customers market Quality, as a competitive tool is not new to the

business world. But it is the deciding factor in the

world market

Quality

8/6/2019 IMCEE

197/253

It can be defined on two dimensions:

1. Market-perceived quality

2. Performance quality

Both are important concepts

But consumer perception of a quality product

often has to with market-perceived quality

than performance quality

Example in Airlines

8/6/2019 IMCEE

198/253

1. Performance quality An airlines has achieved quality conformance

with a safe flight and landing

2. Market-perceived quality Consumer expects performance conformance

quality to be more than safe flight and landing

cost, timely service, frequency of flights,

comfortable seating, performance of flightpersonnel from check-in to baggage claim, etc.

Maintaining Quality

8/6/2019 IMCEE

199/253

Maintaining performance quality is critical

But a product that leaves a factory frequently

its performance quality is damaged, as it

passes through the distribution chain This is a special problem for which production

is distant than the market

Packaging

8/6/2019 IMCEE

200/253

A product may have to change in number ofways ranging from simple packages to total

redesign of the physical core product

Electrolux offers cold-wash-only washingmachines in Asian countries where electric

power is expensive or scarce

Packaging

8/6/2019 IMCEE

201/253

Product adaptation is often dictated by:

Legal

Economic

Political

Technological

& climatic requirement of the local

marketplace

Packaging

8/6/2019 IMCEE

202/253

In India when Govt. strongly opposed foreigninvestment Pepsi-Cola changed its name to Lehar-

Pepsi to gain as much local support

When the political climate turned favourable, the

name returned to Pepsi-Cola

Cheetos, a PepsiCos Frito-Lay, is packaged in 15-

gram boxes in China so it can be priced at 1 yuan (12

cents). At this proce, even children with little spending

money can afford Cheetos

Green Marketing

8/6/2019 IMCEE

203/253

It is a term used to identify concern with theenvironmental consequences of a variety of

marketing activities

Two critical issues that affect productdevelopment are the:

control of the packaging component of solid waste

Consumer demand for environmentally friendly

products

Green Marketing

8/6/2019 IMCEE

204/253

The European Commission has issuedguidelines for ecolabeling that became

operational in 1992

Under the directive, a product is evaluated onall significant environment effects throughout

its life cycle, from manufacturing to disposal

Green Marketing

8/6/2019 IMCEE

205/253

The EU law requires that packaging materialthrough all levels of distribution, from the

manufacturer to the consumer, be recycled or

reused Each level of distribution chain is responsible

for returning all packaging, packing, and other

waste materials up the chain

Green Marketing

8/6/2019 IMCEE

206/253

P&G in Germany introduced Lenor, a fabric softenerin a super-concentrated form

And it sold it in a plastic refill pouch that reduced

packaging by 85%

This move increased brand sales by 12%

It also set a positive tone with the government

regulators and activists

The success of Lenor was replicated in US where P&Gfaced similar environmental pressure

Product & Culture

8/6/2019 IMCEE

207/253

Cultural influences are interwoven with theperceived value and importance of market

place on a product

A product is more than a physical item It is a bundle of satisfaction (or utilities) that

the buyer receives

Product & Culture

8/6/2019 IMCEE

208/253

Only recently have Japanese consumers havetaken an interest in dishwashers they simply

didnt have room in the kitchen due to

compact designs by Mitsubishi and others Financial companies have found it difficult to

enter Muslim countries because they believe

it promotes gambling

Product & Culture

8/6/2019 IMCEE

209/253

When instant cake mixes were introduced inJapan there was no enthusiastic response

Reason:

Japanese reserve cakes for special occasions They prefer cakes to be beautifully wrapped and

purchased in pastry shops

Many Japanese home do not have ovens

8/6/2019 IMCEE

210/253

Innovative Products & Adaptations

8/6/2019 IMCEE

211/253


8/6/2019 IMCEE

212/253

In evaluating the newness of a product, theinternational marketer must be aware that

many products successful in the United States

having reached the maturity or even declinestage in their life cycles, may be perceived as

new in another country or culture and thus

must be treated as innovations


8/6/2019 IMCEE

213/253

Products new to a social system are innovations andknowledge about the diffusion (i.e. the process by

which innovation spreads) of innovation is helpful in

developing a successful product strategy.

Sonys marketing strategies for the US introduction ofits PlayStation 2 were well informed by its wild

successes achieved six months earlier during the

products introduction in Japan

Conversely mid 1990s dips in Japanese sales of Apple

computers were preceded by dips in Apples home

US market.


8/6/2019 IMCEE

214/253

A critical factor in the newness of a product isits effect on established patterns of

consumption and behavior

8/6/2019 IMCEE

215/253


8/6/2019 IMCEE

216/253

The sponge cake mix represented familiar tastes andhabits that could be translated into a convenience

item and did not infringe on the emotional aspects of

preparing a fancy product for special occasions.

Consequently after a short period of time, thesecond companys product gained 30 to 35 per cent

of the British cake mix market.

Once the idea of a mix for sponge cake was

acceptable the introduction of other flavors became

easier.


8/6/2019 IMCEE

217/253

The goal of a foreign marketer is to gainproduct acceptance by the largest number of

consumers in the market in the shortest span

of time New products are not always readily accepted

by a culture; indeed they often meet

resistance

8/6/2019 IMCEE

218/253

Diffusion of Innovation

Diffusion of Innovation

8/6/2019 IMCEE

219/253

The more innovative a product is perceived tobe, the more difficult is to gain acceptance

8/6/2019 IMCEE

220/253

Analyzing Product Components

for Adaptation

8/6/2019 IMCEE

221/253

Product Component Model

8/6/2019 IMCEE

222/253

Core Component

8/6/2019 IMCEE

223/253

It consists of physical product, which contains: Its essential technology

Its designs

Its functional features Here, product variations can be added or

deleted as per local differences

Major adjustments may be costly and requireadditional capital investment

Packaging Component

8/6/2019 IMCEE

224/253

It includes : (See Fig) Apple computer found this out the hard way

when it first entered Japanese market

Some of its computers were return unusedafter customers found the wrapping on the

instruction manual damaged

Support Service Component

8/6/2019 IMCEE

225/253

It includes : (See Fig) Many otherwise successful marketing

programs have failed due to little attention

given to product component Repair and maintenance are specially difficult

problems in developing countries

8/6/2019 IMCEE

226/253

Global Brands

Global Brands

8/6/2019 IMCEE

227/253

It is defined as the worldwide use of a name,term, sign, symbol (visual and/or auditory),

design, or combination thereof intended to

identify goods or services of one seller and to

differentiate them from those of competitors

Global Brands

8/6/2019 IMCEE

228/253

It is the most valuable resource a company has Brand image is at the very core of business

identity and strategy

Brand name encompasses: the years of advertising, Good will, Quality

evaluation, Product experience

And other beneficial attributes the market

associates with the product

Global Brands

8/6/2019 IMCEE

229/253

Even perceived globalness appears to lead toincrease in sales

Internet and other technologies accelerate the

process of globalisation of brands

A global brand gives company a uniform worldwide

image that enhances cost savings & efficiency

But not all companies believe that single global

approach is the best

Global Brands

8/6/2019 IMCEE

230/253

Companies such as Apple, Kellogg, Coca-Cola,Caterpillar and Levis use the same brand

worldwide

Multinationals like Nestle, Mars, P&G andGillette have some brands that are promoted

worldwide and others that are country specific

8/6/2019 IMCEE

231/253

Channel of Distribution Structure

Channel of Distribution

8/6/2019 IMCEE

232/253

All consumer and industrial products gothrough a distribution process

It includes:

Physical handling and distribution of goods Passage of ownership (title)

Buying and selling negotiations between

producers & middlemen and middlemen and

customers


8/6/2019 IMCEE

233/253

The structure of a distribution channel isdetermined by the marketing functions that

specific organizations perform.

Some channel members perform singlefunctions - carriers transport products, and

public warehouses store them.

Others, such as third party logistics providers

and wholesalers, perform multiple functions.


8/6/2019 IMCEE

234/253

Channel structure affects:1. Control over the performance of functions,

2. The speed of delivery and communication,

and3. The cost of operations


8/6/2019 IMCEE

235/253

A direct manufacturer-to-user channel usually givesmanagement greater control over the performance

of marketing functions, distribution costs normally

are higher, making it necessary for the firm to have

substantial sales volume or market concentration With indirect channels, the external institutions or

agencies (e.g. carriers, warehouses, wholesalers,

retailers) assume much of the cost burden and risk,

so the manufacturer receives less revenue per unit

8/6/2019 IMCEE

236/253

Integrated Marketing Communications

Sales Promotions in International Markets

S

8/6/2019 IMCEE

237/253

SP are marketing activities that simulatesconsumer purchases and improves retailer or

middlemen effectiveness and cooperation

In-store demo, samples, coupons, gifts,contests, sponsorships, sweepstakes, POPs are

types of sales promotions

Sweepstakes

8/6/2019 IMCEE

238/253

It is marketing promotions to generate enthusiasmand provide incentive to customers

A consumers needs to submit free entries into

drawings of chance (and not skill) that are tied to

product or service awareness

The featured prizes are given away by sponsoring

companies.

Prizes can vary in value from less than one dollar tomore than one million U.S. dollars and can be in the

form of cash, cars, homes, electronics, etc.

International PR

d l h h d

8/6/2019 IMCEE

239/253

It is creating good relationship with press andother media to generate positive messages for

customers, general public and government

regulators

It also manages unfavorable rumors, stories

and events

8/6/2019 IMCEE

240/253

International Advertising


i i i l d i i

8/6/2019 IMCEE

241/253

Creating an international advertisingcampaign with the cultural uniqueness of

market is the challenge which an international

or global marketer faces


7 t hi h th b i f k d

8/6/2019 IMCEE

242/253

7 steps which are the basic framework andconcept of international marketing:

1. Perform marketing research

2. Specify the goals of communication

3. Develop the most effective message(s) for the marketsegments selected

4. Select effective media

5. Compose and secure a budget

6. Execute the campaign7. Evaluate the campaign relative to the goals specified

8/6/2019 IMCEE

243/253

Advertising Strategy & Goals


G l f d ti i th l

8/6/2019 IMCEE

244/253

Goals of advertising across the goal varysubstantially. E.g.

Chinese manufacturers are establishing new brands

as their economy expands

Unilever is introducing a new product-line extension

for Dove shampoo in East Asian markets

Russias Aeroflot is trying to upgrade its quality

image


All th k ti bl i

8/6/2019 IMCEE

245/253

All these marketing problem require: Careful marketing research

Thoughtful & creative advertising campaigns in

country, regional and global markets, respectively

Due to increased competition and increasing

sophistication of foreign consumers, it has led

to more sophisticated advertising strategies


MNC f bl lik

8/6/2019 IMCEE

246/253

MNCs faces problems like: Increased costs

Problems of coordinating advertising programs in

multiple countries

Desire for a broader company or brand image

Hence, MNCs seek greater control and efficiency

without sacrificing local responsiveness


I th t f ff ti d i

8/6/2019 IMCEE

247/253

In the quest for more effective and responsivepromotion programs, MNCs have

Policies covering centralised or decentralised

authority Use of single or multiple foreign or domestic

agencies

Appropriation and allocation procedures Copy, media and research are being examined


M d lti ti l i

8/6/2019 IMCEE

248/253

More and more multinational companies canbe seen to be managing the balance between

standardization of advertising themes and

customization

8/6/2019 IMCEE

249/253

Legal Constraints

Legal Constraints

Law that control advertising vary from country to country

8/6/2019 IMCEE

250/253

Law that control advertising vary from country to country In Germany it is illegal to use any comparative terminology,

you can be sued by a competitor if you do

Belgium and Luxembourg have banned comparative

advertising. Whereas it is authorized in UK, Ireland, Spain and

Portugal

It allows implicit comparison without naming the competitor

but bans explicit comparisons between named products

Legal Constraints

In Asia an advertisement showing chimps

8/6/2019 IMCEE

251/253

In Asia, an advertisement showing chimpschoosing Pepsi over Coke was banned

The phrase the leading cola was accepted

only in Philippines

8/6/2019 IMCEE

252/253

Legal Constraints

Advertising of pharmaceuticals is restricted in

8/6/2019 IMCEE

253/253

Advertising of pharmaceuticals is restricted inmany countries

China is relaxing some regulations while

strengthening others. For example, Onlyrecently government has begun to require

concrete proof of ad claims

IMCEE

Documents