Presentation on theme: "International marketing or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an."— Presentation transcript:
International marketing or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm. It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets.marketing
"international marketing 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." In contrast to the definition of marketing only the word multinational has been added. In simple words international marketing is the application of marketing principles to across national boundaries.
4 P’s of International Marketing To organize your business and sell internationally, your company needs to understand the Four P’s of international marketing
1. Product As a product is sold outside of Canada it most likely needs to be modified or adjusted in some sense. These modifications are made to adapt to the foreign culture, language laws, and occur primarily in the following areas: a) Package weights: metric to imperial in the USA b) Package colours: colours have different meanings in different countries e.g. yellow in Canada is cowerdice and in Japan yellow is considered a brave colour
c) Legal requirements: every country has laws that reflect the packaging of a product. Sometimes environmental fees of a package can cost more than the package itself. E.g. Denmark charges 25 cents for every Canadian package wrapped in PVC (polyvinyl chloride). d) Labelling requirements: marketers must investigate labelling requirements in their target foreign markets. Food labelling requirements are especially tricky as each country has different rules. E.g. California expects Global Warming labels on all of its vehicles.
e) Language requirements: Obviously the information on the package should be translated into the language of the target country. E.g. The EU requires atleast 5 different language translations on its packages. f) Ingredients: Many countries have strong taboos, both religious and cultural, that prohibit the use of certain products, particularly food items. E.g. if a chip manufacturer were to sell in India to Hindu’s, it would have to make sure that the chips were not deep fried in beef fat.
g) Style: What the people of one country find fashionable, people of another country might find embarrassing or offensive. E.g. Paris, New York, Rome and London expect the latest cutting edge fashions, while people in other cities create their own street fashion. A business needs to be conscious of its colour choices.
2. Place Doing business across Canada is relatively easy considering that you can get away with producing your product in one centralized place in Canada and ship it all across the country. However, doing business globally and if your company becomes too big, you may have to manufacture in more places than one (decentralized strategy) E.g. Kraves Candy runs a centralized strategy approach where all of their clodhoppers are manufactured in Winnipeg, Manitoba and distributed all across North America from Winnipeg. It is becoming challenging now that the candy is being distributed across North America
E-Commerce The internet has changed the way international marketing is performed. Now, a business that is close to a transportation hub can be an international business. E.g. Amazon is a book distributor that has a head office in Seattle, Washington and 80 distributor locations in the U.S. and worldwide You can stay in your respective city and do business anywhere in the world. This market-entry strategy is also known as e-distribution. It can be more effective than opening a retail strore.
Amazon and E-bay are the largest e-distribution type businesses. This way the smallest stores can compete with the largest stores in the market. The level of competition depends on the quality of the website, the payment processing options, the variety of goods offered online and the shipping options. Most larger companies offer free shipping and Paypal where smaller companies do not. E-commerce and E-distribution can turn any local retail operation into a global one; all that is required is a website.
Sales Agents Using a sales agent is one way to combine a centralized strategy with a decentralized strategy, meaning, you have a home base, and sales agents travelling around the world to sell your products. Sales agents are usually paid based on a percentage of sales basis (commission) If a business plans to manufacture in Canada, then sales agents would be an effective way to enter any foreign market. Sales agents bring products to life through product knowledge
Trade Shows A collection of manufacturers and distributors of similar products who rent space, set up display booths, and sell their products to registered buyers who are seeking products to sell in their retail businesses. Usually the latest and greatest trends are found. Provide buyers with a large number of product sources under one roof and can save them hundreds of hours and thousands of dollars in buying trips. For sellers, the trade show is often their major sales event.
Branch Plants Building and staffing a branch plant is the most expensive market entry strategy. Can also be the most effective way of entering a new market E.g. If you build a branch plant in a European country, you could gain access to the entire EU. Shipping costs are lower. Import regulations and tariffs are no longer an issue. Product modifications are easier since you are surrounded by the culture of the market. Supply can meet demand as you increase the number of production facilities instead of just being centralized.
Licensing Agreements Allowing other companies in other markets to produce your products (patent or trademark) for a fee (royalty) to your company. This is a way to enter foreign markets without the stress of marketing since a foreign company is taking care of selling your product for you in their own market. 3 ways to license your products to foreign markets would be through: manufacturing agreements, distribution agreements and franchise agreements.
Acquisitions The most effective way for a company to deal with its’ competition in a foreign market or even domestically is to buy them out. Either close them down completely, or take over their resources and marketing connections to expand its market. E.g. Microsoft and Apple are companies that continuously by out their competition both domestically and internationally in order to continue to grow their markets.
3. Price Usually, the domestic price of a product is certainly lower than the price of the same product abroad. This is a major marketing challenge because the company needs to find out whether the consumers of the foreign market can afford the product Most companies find that if they use a centralized marketing strategy, the price of their goods increases to the point where they are not competitive. These increases come from several areas:
Labour costs Labour costs in Canada are among the highest in the world. What costs in Canada, cost 10 times less in Mexico and 25 times less in India and 30 times less in China
Shipping costs Shipping across Canada is costly since Canada is so big Shipping globally is even more costly These freight charges must be calculated into the cost of the goods in order to establish a price
Duties and Tariffs Most countries charge taxes on goods imported into their country in order to keep their domestic goods competitive.
Legal costs Modifications that must be made to conform to product codes and the standards of the foreign market can often be very expensive, requiring translators, new packaging, legal fees, inspections costs, and other charges that increase the cost of the product.
Anyone trying to market a product in a foreign country must consider whether the price of the product in the foreign market is competitive. This is why major companies like the decentralized market entry strategies, because they can save a lot of costs like: on tariffs, cheaper labour, lower shipping costs, and conforming to local rules and regulations, thereby eliminating the extra costs associated with product modifications.
4. Promotion There are three ways to promote and advertise products if you are planning to sell internationally:
Using existing ads Tim Horton’s Roll up the Rim to Win campaign is money saved because the strategy does not change much from year to year. Also, the campaign is no different in the U.S. since the culture is similar.
Translating ads eC6TFBY53HI&NR=1 Create a generic commercial for your product and then translate or dub the advertisement into the language of your target market.
Creating new ads Depending on what the culture is like, your business may have to create a new ad in each country that it enters or for each product that it sells. E.g.