Professional Documents
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International Marketing
Total world trade volume in goods and services is around $8 trillion. The worlds five exporting countries are the United States ($700 billion), Germany ($560 billion), Japan ($390 billion), France ($320 billion), and Britain ($260 billion), collectively accounting for 42 percent of global trade.
International marketing
Fords made in Mexico with Japanese parts, Honda, Toyota, BMW, and Mercedes Benz open USA plants, and Isuzu of America makes Troopers and Rodeos with GM engines via joint venture. Honda manufacturing cars in USA, TI manufacturing semiconductors in Japan.
Macintoshs PowerBook 100 designed and manufactured by Sony.
Export marketing
The international marketing dimension involves marketing across national borders. This is different from domestic marketing because the mere fact of crossing the border confronts with new economic, political, and legal constraints, such as floating exchange rates, boycotts, and international law. These constraints will usually force modification of the firms marketing program as it crosses national boundaries.
Foreign marketing
The foreign marketing dimension involves marketing within foreign countries, as a U.S firm markets in Belgium or Brazil. Such marketing is unlike domestic marketing because that firm faces different kinds of competition, consumer behavior, distribution channels, and promotional possibilities in Belgium or Brazil from what it is familiar with at home. The tasks is further complicated because each country has an individual idiosyncratic marketing environment.
Multinational marketing
The multinational marketing dimension emphasizes the coordination and integration of the firms marketing in many diverse foreign environments. The unique nature of each foreign market fragments the international marketing effort and brings diseconomies of scale. The international marketer must plan and control carefully to maximize the integration and synergy in the global marketing program while minimizing the costs of adapting to each foreign market.
- International marketing focuses its resources on global market opportunities and threats (Keegan and Green) -
- It is a tool used to obtain improvement of the firms position in the global market
- Strategy and action, global and local
EPRG Model Ethnocentric: everything is centered on the domestic market. Polycentric: several important foreign markets exist. Regiocentric: the market is composed of several large economic regions. Geocentric: the world is one large global market.
International business
International business consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies, and organizations.
International business:
causes
the flow of ideas, services, and capital across the world offers consumers new choices permits the acquisition of a wider variety of products facilitates the mobility of labor, capital, and technology provides challenging employment opportunities reallocates resources, makes preferential choices, and shifts activities to a global level
International trade is the exchange of capital, goods,andservices across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP)
Industrialization,advanced transportation, globalization,multinational corporations, and outsourcing are all having a major impact on the international trade system. Without international trade, nations would be limited to the goods and services produced within their own borders.
Potential Market Assessment - Market Size and Potential - Market Selection Procedure - Key Success Factors
Executive Summary Country Introduction Economic Analysis Market Audit and Competitive Market Analysis Preliminary Marketing Plan Sources of Information Appendixes
I. Geographical Setting II. Relevant history III. Social Institutions IV. Cultural Aspects V. Living Conditions VI. Language (s)
I. Population II. Economic statistics and activity III. Developments in science & technology IV. Channels of distribution (Macro-analysis) V. Media
I. The product
Evaluation of the products USP Major problems of product acceptance Market size and evolution Consumer buying habits Existent competitors products Marketing Mix typically used
I. Marketing Plan
1. Marketing objectives 2. Product adaptations/modifications 3. Promotion mix 4. International distribution 5. Local channels of distribution 6. Price determination 7. Terms of sale 8. Methods of payment
1. Marketing budget 2. Pro forma annual profit & loss statement 1. Financial Resources 2. Human resources 3. Production Capacity
Market information
Market potential Consumer / customer attitudes and behaviour Channels of distribution Communications and media Market sources New products
Competitive information
Competitive business strategy and goals (mission and rationale of the company) Competitive functional strategies and programmes (target markets, marketing mix, etc) Competitive operations (morale, employee transfers, i.e. detail)
Foreign exchange
Balance of payments, interest rates, etc Prescriptive information e.g incentives, controls, regulations. Country monetary and fiscal policy Expectations of bankers, traders, analysts, etc Government policy in relation to its own competitiveness e.g China, USA
Resource information
Human resources Money Raw materials Acquisitions and mergers, joint ventures
General conditions
Economic factors - e.g. growth Social factors e.g. customs, attitudes Political factors e.g investment climate Scientific and technological factors - major developments and trends Management and administrative factors e.g. report procedure
Sources of information
Human sources e.g company executives Documentary sources e.g too much! Perception sources e.g. what we see and hear Information and media
face-to-face conversation telex/fax/e-mail sight, smell, taste
Two: Start with desk research Three: Identify the type of information that is available from overseas sources Four: Know where to look (or find somebody that does) Five: Do not assume that the information that you gain is comparable or complete.
Stage 1 - Country identification Stage 2 - Preliminary screening Stage 3 - In-Depth screening Stage 4 - Final selection
Operational reasons for setting up overseas manufacture Strategic reasons for investing in local operations Methods of overseas production Exporting options Joint Ventures and Strategic Alliances
reduced costs of transportation reduced barriers/ quota handicap e.g. Nissan some governments demand investment with market entry e.g. China Customers sometimes prefer local manufacture e.g. Heinz British? Government contracts prefer firms contributing to the local economy
Improved local market information local manufacture ensures greater commitment to international markets Faster response and Just-in-time delivery
Doole, Phillips and Lowe (1994)
demonstrates strong commitment persuades customers to change suppliers provides better service and more reliability
component suppliers follow customers to compete with local component suppliers labour, raw materials and transport
Save costs
Exporting
Indirect
Direct
Licensing
Companies with strong brand or know-how e.g. Coca-Cola, Disney more of a whole package e.g.Body Shop, KFC bulk items e.g. Nike components
Franchising
Contract manufacture
Joint ventures
Strategic Alliances
Strategic alliances can range from loose networking relationships to very tight contractual relationships such as joint ventures. e.g. code share where airlines of a similar type sell each others tickets. There is no co-ownership. Types
technology swaps R&D exchanges distribution relationships insufficient resources High R&D costs Concentration of firms in mature markets Market access
Driving forces
Orgs can remain separate, but have a tight legal relationship. Reasons for setting up
overcome foreign ownership restrictions increase speed of entry exploit new opportunities, complementary technologies and management skills achieve worldwide presence at lower cost differences in partner aims and objectives equal ownership and different options can slow decision making dominance by one partner can lead to resentment in the other Large time commitment for education, negotiation and agreement with partner
Disadvantages
Mergers
The identity of each of the merging companies is subordinated into the identity of the newly merged organisation, or disappears. Benefits include: