International Marketing/Domestic Marketing/scope/importance/challenges/trade theories/reason for going international/segmentation/targeting/positioning/ entery strategies
Similar a International Marketing/Domestic Marketing/scope/importance/challenges/trade theories/reason for going international/segmentation/targeting/positioning/ entery strategies
Similar a International Marketing/Domestic Marketing/scope/importance/challenges/trade theories/reason for going international/segmentation/targeting/positioning/ entery strategies (20)
International Marketing/Domestic Marketing/scope/importance/challenges/trade theories/reason for going international/segmentation/targeting/positioning/ entery strategies
2. International Marketing
▪ According
to Cateora and Graham,
“international marketing is the
performance of business
activities designed to plan,
price, promote and direct the
flow of a company’s goods and
services to consumers or users
in more than one nation for a
profit.”
3. DOMESTIC MARKEING INTERNATIONAL MARKETING
It is the production, promotion,
distribution, and sale of goods
and services in a local market.
It is the production, promotion,
distribution, and sale of goods
and services in a global market.
It is less risky and easier to
conduct.
It is more risky and more
complex.
It requires lesser financial
resources.
It requires huge financial
resources.
It deals with only a single
market.
It deals with several different
countries and markets.
Domestic Vs International Marketing
4. Domestic Vs International Marketing
DOMESTIC MARKEING INTERNATIONAL MARKETING
It deals only with one set of consumers. It deals with different types of
consumers with different tastes.
In DM, the company can have the same
policies and strategies
It requires different strategies in the
promotion of their products.
It deals only with the laws and
regulations of one country.
Both use all the basic marketing
principles.
It is more challenging and requires more
commitment from the company
because of the uncertainty and
differences in laws and regulations in
the global market.
5. Scope of International Marketing
▪ Imports
▪ Exports
▪ Contractual Agreements (in terms of licensing or co-production or
even of technical assistance)
▪ Joint Venturing ( collaborative association of two brands for a
reasonable period of time)
▪ Contract Manufacturing
▪ Fully Owned Manufacturing
▪ Strategic Alliances(enemy of your enemy can be your friend)
▪ Management Contracts
6. Importance of International Marketing
▪ Expand target market(to increase its market share and
customer base).
▪ To boost brand reputation.
▪ To connect business with the world.
▪ To open door for future opportunities.
▪ Emerging Markets Overseas.
▪ Competitive Advantage of U.S. Companies.
▪ Counteract Slowing Growth.
▪ Entering Markets Before Competitors Do.
▪ Better Utilize Productive Capacity.
▪ Synergies Between Domestic and Overseas Operations.
7. Problems/challenges faced by IM
▪ Tariff Barriers (taxes and duties imposed on
imports).
▪ Administrative Policies.
▪ Considerable Diversities.
▪ Political Instability or Environment.
▪ Place Constraints (Diverse Geography).
▪ Variations in Exchange Rates.
▪ Norms and Ethics Challenges.
▪ Terrorism and Racism.
8. International Theories of Trade
Classical or Country-Based
▪ Mercantilism/Protectionism
▪ Absolute Advantage (AS)
▪ Comparative Advantage
(relative)-David Recardo)
▪ Heckscher-OhlinTheory (Factor
ProportionsTheory) labor-
intensive industries.
▪ Leontief Paradox ( export/import
more capital-intensive good)
Modern or Firm-Based
▪ Country SimilarityTheory-
Steffan Linder (Brand names
and product reputations)
▪ Product Life CycleTheory-
RaymondVernon
▪ Global Strategic Rivalry
Theory-Paul Krugman and
Kelvin Lancaster
▪ Porter’s National
Competitive Advantage
Theory
9. Reasons for going International
▪ Increase sales and profitability.
▪ Enter new markets.
▪ Create jobs.
▪ Offset slow growth in your home market.
▪ Outmaneuver competitors.
▪ Enlarge the customer base.
▪ Create economies of scale in production.
▪ Explore untapped markets with the power of the Internet.
▪ Make use of excess capacity off-season.
▪ Travel to new countries.
11. InternationalTarget Marketing
▪ Identify consumer segments with similar
traits
▪ Select segments company can serve
efficiently
▪ Develop products tailored to each segment
▪ Offer products to the target market:
▪ Communicate traits that differentiate the
product
12. International Segmentation
▪The process of identifying countries and/or
consumers that are similar with regard to key
traits, such as product-related needs and
wants, that would respond well to a product
and related marketing mix.
MUST BE performed at country level AND
at consumer level.
14. International Macro-Segmentation
1. Market potential – indicators:
a) Gross domestic product (GDP) per capita
b) Industrial and agricultural sector statistics
c) Market size and potential
d) Consumer buying power
e) Investment figures (FDI, other trade statistics)
15. International Macro-Segmentation
Continued
2. Political, legal and financial environment of
country
a) Ethnic conflict
b) History of war engagement
c) Anti foreigner sentiment
d) Recent nationalization activities
e) Legal ambiguity
f) Trade barriers
g) Exchange rate controls
16. International Macro-Segmentation
Continued
3. Marketing support infrastructure
a) Availability and reliability of distribution and logistics providers
b) Availability of competent partners for strategic alliances
c) Quality of telecommunication and transportation infrastructure
d) Availability of other service providers:
- Marketing research firms
- Financial firms
- Management consulting firms
4. Strength of brand - brand franchise
5. Degree of market fit with company policies, goals, and resources
17. Micro-Segmentation
Basis of Segmentation
▪ Demographic
Age, Occupation, Education, Income, Ethnicity, Race,
Nationality, Life-cycle stage, Social class, Urbanization etc.
Psychographic: lifestyles,Values, attitudes, Interests, opinions
1. Hofstede Dimensions:
Power-Distance, Masculinity-femininity, Uncertainty
avoidance, individualism-collectivism
2. Global segments: Global teenagers, Global elite
18. Micro-Segmentation
Basis of Segmentation
▪ Benefit Segmentation
▪ Geographic
Usage User Status
Nonusers User of competitors’ products
Occasional users Ex-users
Medium users Potential users
Heavy users First-time users
Regular users
19. Country Screening and Selection
▪ Assign importance score to each country
screening criteria
▪ Evaluate country performance on each of the
screening criteria
▪ Calculate country attractiveness score
20. Target Market Decisions
Differentiated
▪ Identify or create market
segments desiring different product
benefits and target each segment
with a different brand and different
marketing strategies
▪ Example- Procter & Gamble
22. Target Market Decisions
Undifferentiated
▪ Aim the product at the market with a
single strategy regardless of the
number of market segments
▪ Example- powder milk, beans
23. Positioning the Brand
▪ Identify competitors
▪ Determine how they are perceived by
consumers
▪ Determine positioning in consumer’s minds
▪ Analyze customers
▪ Select positioning
▪ Monitor position
24. Positioning the Brand
▪ Attribute/Benefit
▪ Price/Quality
▪ Uses or Application
▪ Product User
▪ Product Class
▪ Competition
27. Which Market(s) to enter
Depends on long-term profit potential
▪ Attractive markets are:
Politically stable
Free market systems
Low inflation rates
Low private sector debt
28. ▪ Unattractive markets are:
Politically unstable
Mixed or command economies
Developing nations with excessive
debt
29. When to enter them?
Consider the timing of entry:
▪ Early entry-enter before other foreign firms
1. First mover advantage
2. Gain cost advantage(over late movers)
3. Create high switching costs
4. Can turn into disadvantages if not well prepared
▪ Late entry-enter after others have established
1. Reduce “Pioneering costs”-Time, effort, Expense to learn
the market
30. When to Enter them?
Decide on Scale of Market Entry
▪ Large Scale
1. Strategic Commitment
2. Long-term impact
▪ Small Scale
1. Learn with less risk
2. “Pilot” market
32. Exporting
▪ An export is a function of
international trade whereby goods
produced in one country are shipped
to another country for future sale or
trade.
33. Advantages of exporting
▪ You could significantly expand your
markets, leaving you less dependent on any
single one.
▪ Greater production can lead to larger
economies of scale and better margins.
▪ Your research and development budget
could work harder as you can change
existing products to suit new markets.
34. Disadvantages of exporting
▪ Unless you're careful, you can lose focus on your home
markets and existing customers.
▪ Your administration costs may rise as you may have to
deal with export regulations when trading outside the
India.
▪ You will be managing more remote relationships,
sometimes thousands of miles away.
▪ In overseas markets, you may lose some of the control
that you are used to at home.
▪ You will need to think of your new market differently to
the home market. They will be different customers with
their own reasons for buying your products
35. Licensing
▪ A business arrangement in which
one company gives another
company permission to manufacture its
product for a specified payment.
▪ There are few faster or more profitable ways to
grow your business than by licensing patents,
trademarks, copyrights, designs, and other
intellectual property to others.
36. Advantages/ Disadvantages of
Licensing
▪ Advantages of expanding internationally using
international licensing include: the ability to reach
new markets that may be closed by trade restrictions
and the ability to expand without too much risk
or capital investment.
▪ Disadvantages include the risk of an incompetent
foreign partner firm and lower income compared to
other modes of international expansion.
37. International joint venture
▪ An international joint venture (IJV) occurs when
two businesses based in two or more countries
form a partnership.
▪ A company that wants to explore international
trade without taking on the full responsibilities of
cross-border business transactions has the option
of forming a joint venture with a foreign partner.
38. Advantages of a IJV
1. New insights and expertise
2. Better resources
3. It is only temporary
4. Both parties share the risks and costs
5. Joint ventures can be flexible
6. There are ways to exit a joint venture
39. Advantages of a IJV
7 You will know what’s yours and will be able to sell it.
8 You are more likely to succeed
9 You will build relationships and networks
10 Your potential will virtually be limitless
11 You get to save money by sharing advertising and
marketing costs
12 It eradicates the risk of discrimination.
40. Disadvantages of IJV
▪ Vague objectives
▪ Flexibility can be restricted
▪ There is no such thing as an equal involvement
▪ Great imbalance
▪ Clash of cultures
▪ Limited outside opportunities
41. Disadvantages of IJV
▪ A lot of research and planning are necessary
▪ It may be hard for you to exit the partnership as there
is a contract involved
▪ You might be tempted to leave the joint venture
▪ Lack of clear communication
▪ Unreliable partners
▪ Unclear and unrealistic objectives
42. Contract manufacturing
▪ Contract manufacturing in
international markets is used in situations
when one company arranges for
another company in a different country
to manufacture its products; this is also
known as international subcontracting
or international outsourcing
44. Strategic Alliances
▪ Cooperative agreement between potential or
actual competitors.
1. Can be formal joint ventures
2. Can also be short-term contractual
agreements
Example- Piggyback marketing
