International Marketing: Principles, scope, & Challenges

Scope:
In Hong Kong, a German businessperson is driving a Lexus; hes wearing Bruno Magli shoes, Irish cashmere socks, Calvin Klein underwear, an Armani suit, with a Gucci belt. He has a Mont Blanc pen, in his Italian shirt. Hes going to meet an American investor at a KFC restaurant, for a Coke. After lunch, they stop for a Baskins-Robbins (actually a foreign firm) ice cream sundae. --- OK, thats a stretch. When he gets home, sitting on an ottoman, he has an Absolut vodka nightcap, while listening to American country western music. Challenges Huge Foreign indebtedness Unstable governments Foreign-exchange problems Foreign entry and government bureaucracy Tariffs and other trade barriers Corruption E-commerce---doesnt offer complete solutions Technological pirating High cost of product and communication adaptations

International Marketing Marketing has become more complex.

 Increases in new products, product extensions, high cost of distribution and shelf space. Expansion of retailer control and power, changing media habits, overload of information, and array of communication choices. Ultimate goal of programs Timing goals International Integration Forces Driving Forces Technology Culture Market Needs Costs Free Markets Economic Integration Peace Strategic Intent Management Vision, Strategy and Action Restraining Forces Culture Market Differences Costs National Controls Nationalism

 Peace vs. War/ Stability Management Myopia Organization History Domestic Focus Challenges Markets can present higher profit opportunities than present markets. Markets can offer size but not profits. Company needs a larger customer base for economies of scale. Present customers are needing service and products as they go international. Companies need new set of guidelines, values and insight Marketing is a Strategic Business Concept Marketing is too important to be left to the Marketing Department. (David Packard) Formulated, integrated, long-term Hold to the responsibilities of customers, employees, investors Advantages, especially if the companies emphasize selection, availability, quality, reliability and lower prices. Economies of scale. Lower marketing and advertising costs in planning and control. Lower advertising production costs. Exploiting your best ideas on a worldwide basis. Deciding How to Enter a Market Indirect Export-Thru export and thru others. Direct Export-Handle own exports.

 Licensing-License a foreign company to use trademark, manufacturing process, trade secret, or other item for a fee or royalty. Joint Ventures- Join with local investors Direct Investment- Direct ownership. Joint Ventures-- Join with local investors to create venture. Coca-Cola and Nestle joined forces in ready to drink coffee and tea. P&G with rival, Fater, in Italy and Great Britain. Whirlpool formed venture with Dutch electronic group Philips on white-goods business to leapfrog into European market. Direct Investment--Ultimate form is direct ownership of foreign-based assembly or manufacturing facilities. Can buy part or full interest in a local company. Principle of Research Understand the consumer-behavior perspectives. Be sure you are asking right questions. Use appropriate research techniques and controls. Present clear, comprehensive and actionable results. We study people using geographics, demographics, psychographics, lifestyles, and behaviors. Bodily adornment, cooking, courtship, food taboos, gift giving, language, marriage, status, sex, and superstitions, in all societies, although each society attaches different values and traditions. The world, countries, regions, and subcultures. Different grouBootstrappers. Defining principles: Achievement, Individualism, optimism, determination, power. Try hard to please parents. Determined to

succeed. Positive values. One in four in US; 14% overall. Nigeria, Mexico, US, India, Chile, Puerto Rico, Peru and Venezuela. Upholders. Family, tradition, respect for individuals. Dreamy. Quiet. Good teens. Follow their parents. Dont like risks. Use proven products. Vietnam, Indonesia, Taiwan, China, Italy, Peru, India, 16% ps of people share subcultures---values, customs, and traditions. Geomarketing uses these differences in foods, terminology, subculture identities. Example: International youth are notorious for challenging norms and defying labels. A study of 27K teenagers in 44 countries. Insights and motivations. Six different segments. But remember that even in a specific country the teenagers are not homogeneous. Six segments in a Teen World values research study. Thrills and Chills. Driving principles---fun, excitement, irreverence and friends. Expect everything in life. Make it a goal to get as much and as many good times. Popular kids in schools. Brand loyal. Mostly in Germany, England, Greece, South Africa, Netherlands, US, Belgium and Canada. 18% Resigned: Fun, Friends and Low expectations. Little discretionary income. Cynical. Denmark, Sweden, Korea, Norway, Germany, Belgium, Argentina, Canada and Turkey 14% World Savers. Defining principles: Fun, Humanism, and friends. Models of what gives hope to next generation. Good kids, who care. Technologically advanced. Motivated by new and exciting. Attracted by honest and sincere messages. Sophisticated, sense of humor. Hungary, Philippines, Venezuela, Brazil, Spain, Argentina, Russia, France, Poland. 12% Quiet Achievers. Success, quiet, anti-indi-vidualism, social optimism. Have determination and restraint. Study hard. Do well in school. Limit outside activities. Thailand, China, Hong Kong, Korea, Russia, Peru. 15%

Principle of Integrated Marketing: Marketing is everyones business. Marketing Community Examples: Coca-Cola, Merrill Lynch, Xerox, American Express, British Airways, Gillette. When all of the departments work together to serve the customers interests. Works on two different levels: All of the various marketing functions work together: sales force, sales promotion, advertising, PR, Product development, Marketing research Plus all of the departments work together. They must Think Customer. International Standardization or Adaptation Toyota built the Corolla on a world platform. Ford with its Focus. McDonalds uses chili sauce (salsa) on its hamburgers in Mexico. Coca-Cola is can be sweeter, or less carbonated. Adaptation elements: Product features, brand name, labeling, packaging, colors, materials, prices, sales promotion, advertising themes, media, execution. Marketing programs do work best when they are tailored to each target group. An endless process or principle: Customer attraction Customer satisfaction Customer retention. CEO is also the Chief Marketing Officer. Principle of Competition: Value War Create long-tern customer value.

 Continuously and consistently crated customer value. Look at total customer benefits vs. customer expenses Ultimate goal of project Relationship to other projects High-level timing goals Principle of Customer Satisfaction and Retention Look at overall satisfaction and customer loyalty Easier to retain a customer than to gain or win a new one. Consistently improve customer value to win the marketing war. Principle of Integration: Learn about the needs and wants. There are no average customers. Concentrate on the individual differences while looking at segmentation, targeting and positioning. More on Integration: Plan for and review differences in culture, markets, economic development, consumer differing needs, usage patterns, media availability and legal restrictions. Principle of Anticipation and Being Proactive. Not Reactive. Are you ready for change? Being adaptive to the marketplace. Macroenvironment Changes. The high income growth country has shifted from Japan to US. Low to medium has been concentrated in Southeast Asia and southern Asia with China as a unique, high-growth, large country in the region and the world. Also look at Singapore, Taiwan and South Korea. Principle of the Growth of Internet and Information Technology.

Principles of: Marketing Planning Marketing Mix 7Ps Controls.

The old trade model is just old. It stated that as a product matures, production would shift to low-wage countries. Today, must look at transportation costs, availability of skilled labor, market responsiveness, market access and innovation in product design and manufacturing. Especially of products with less than 15% of labor in total cost. Principle of Branding: The umbrella. Determines price and value. Be more than a commodity. A brand is a name, term, sign, symbol, or design or a combination of them to identify the goods and services of a seller and to differentiate them from the competitors. Identifies seller or maker. We see a huge increase in the International brands for autos, food, clothing, electronics and more. Increasing number of cross-border marketing alliances. Principle of Service: Service before, during and after sale. Create long-term value and connect with customer. Both products and services. Its creating more value. Principle of Process:

 Commands the company to be the captain of its supply-chain. It should manage from raw materials to finish goods. Enhance value-creating activities. Look at Strategic Alliances/Partners . Can be suppliers, customers and even parts of competitors. Benchmarking, reengineering, outsourcing, mergers, and acquisitions are examples. Brand, service and process are three value-creating principles and drivers to win customers and deliver market share. Principles of STP: Segmentation, Targeting and Positioning Process of segmenting. Look at demographics, geographics, psychographics and behavior variables. Look for market opportunities. Principle of Differentiation: Dont be different just to be different. Design and plan for meaningful differences versus the competitors. Design truly different and unique products for customers. Principle of Marketing Mix: Integrate 4Ps and 7Ps. Offer, Logistics and Competition. The whole marketing concept. Principle of Selling: Integrate Company, Customers and Relationships/Partnerships. Create long-term relationships with customers. More than personal selling.

 Features and benefits of the product. AIDA: Awareness-Interest-Desire-Action. Manage communication. Principle of Balance: After focusing on the elements of marketing---segmentation, targeting, positioning (STP), differentiation, marketing mix, selling, branding, service and process, you need to balance the strategies, tactics and implementation. Share of Heart and Mind. Share of Voice. Dynamic environment. Timing. High-level timing goals Principle of Positioning: The act of designing the product or service (companys offering and image) to occupy a distinctive place in the target markets mind. Ultimate goal of product. Differentiation Relationship to other products. Principle of Future: Manage todays products by managing a profit and by servicing customers of today and tomorrow. Develop tomorrows products. Look at Marketing Myopia. Principle of International Experience Counts for companies Counts in the job market for employees. Marketing Audits.

 Marketing is not a destination, or a goal. Its a process. A moving target. Wrap-up on International Marketing Principles Companies cannot stay domestic and expect to maintain their markets. Companies need to define their International policies and objectives. Companies need to decide on how much to adapt marketing mix. Market entry and market control costs can be high. Product and communication adaptation costs can be high. Dominant foreign firms can establish high barriers of entry. Which types of markets and countries? Ultimate goal of project Relationship to other projects High-level timing goals Attractiveness influenced by the product, geography, income, population, political climate and more factors. Review Forces: ---Driving and Restraining