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Teaching International Marketing David A. Griffith Department of Marketing & Supply Chain Management The Eli Broad College of Business Michigan State University.

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Presentation on theme: "Teaching International Marketing David A. Griffith Department of Marketing & Supply Chain Management The Eli Broad College of Business Michigan State University."— Presentation transcript:

1 Teaching International Marketing David A. Griffith Department of Marketing & Supply Chain Management The Eli Broad College of Business Michigan State University

2 Agenda The Basics –Basics of marketing Segmentation, Targeting and Positioning Marketing Mix –Basics of international marketing Teaching Approaches –Presentation: Global vs. Comparative –Observational –Experiential –Application

3 Focus Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

4 Segmentation, Targeting and Positioning

5 The Complete Process Market Segmentation Identify and describe market segments Market Targeting Evaluate segments and decide which to go after Market Positioning Design a product or service to meet a segment’s needs and develop a marketing mix that will create a competitive advantage in the minds of the selected target market

6 Market Segmentation Identifying distinct groups of consumers whose purchasing behavior differs from other in important ways. Marketing mix adjusted to reflect differing purchasing patterns in segments. –Geography –Demographics –Socio-cultural factors –Psychological factors Identifying distinct groups of consumers whose purchasing behavior differs from other in important ways. Marketing mix adjusted to reflect differing purchasing patterns in segments. –Geography –Demographics –Socio-cultural factors –Psychological factors

7 Market Segmentation Two main issues in the differences between countries –The structure of market segments –The existence of segments that transcend national borders Two main issues in the differences between countries –The structure of market segments –The existence of segments that transcend national borders

8 Market Targeting and Positioning Marketers evaluate the attractiveness of each potential segment and decide which of these groups they will try to turn into customers –Mass –Differentiated –Concentrated –Custom Developing a marketing strategy aimed at influencing how a particular market segment perceives a product or service in comparison to the competition –4 common positioning errors Underpositioning: lack of differentiation Overpositioning: too narrow Confused: too many things to too many people Doubtful: consumer just doesn’t believe it Marketers evaluate the attractiveness of each potential segment and decide which of these groups they will try to turn into customers –Mass –Differentiated –Concentrated –Custom Developing a marketing strategy aimed at influencing how a particular market segment perceives a product or service in comparison to the competition –4 common positioning errors Underpositioning: lack of differentiation Overpositioning: too narrow Confused: too many things to too many people Doubtful: consumer just doesn’t believe it

9 Marketing Mix

10 Product Price Place Promotion Consumers Marketing Mix

11 Marketing Mix: Product Marketing Mix: Product

12 Product Attributes A product is a bundle of attributes. If consumer needs were the same all over, a firm could simply sell the same product worldwide. Unfortunately, differences in the three following areas often necessitate adaptations –Cultural differences –Economic differences –Product and technical standards A product is a bundle of attributes. If consumer needs were the same all over, a firm could simply sell the same product worldwide. Unfortunately, differences in the three following areas often necessitate adaptations –Cultural differences –Economic differences –Product and technical standards

13 Cultural Differences Range of dimensions: –Social structure –Language –Religion –Education Most important - the impact of tradition Some tastes and preferences becoming cosmopolitan Range of dimensions: –Social structure –Language –Religion –Education Most important - the impact of tradition Some tastes and preferences becoming cosmopolitan

14 Economic Differences Consumer behavior is influenced by economic development –Consumers in highly developed countries tend to have extra performance attributes in their products –Consumers in less developed countries tend not to demand these extra performance attributes Consumer behavior is influenced by economic development –Consumers in highly developed countries tend to have extra performance attributes in their products –Consumers in less developed countries tend not to demand these extra performance attributes

15 Government standards can prevent the introduction of global products Different technical standards impede global markets, as well –Come from idiosyncratic decisions made long ago Government standards can prevent the introduction of global products Different technical standards impede global markets, as well –Come from idiosyncratic decisions made long ago Product and Technical Standards

16 Marketing Mix: Place Marketing Mix: Place

17 Distribution Strategy Three different distribution systems: –Retail concentration: number of retailers Cost/benefit of each alternative vary from country to country –Channel length: levels of channel members Longer the channel in a country, the higher the price Shorter channel in a country, lower price –Channel exclusivity: access Match to positioning of product in country Three different distribution systems: –Retail concentration: number of retailers Cost/benefit of each alternative vary from country to country –Channel length: levels of channel members Longer the channel in a country, the higher the price Shorter channel in a country, lower price –Channel exclusivity: access Match to positioning of product in country

18 A Typical Distribution System Manufacturer Inside the Country Manufacturer Outside the Country Import Agent Wholesale Distributor Retail Distributor Final Customer

19 Marketing Mix: Price Marketing Mix: Price

20 Pricing Strategy Price discrimination Strategic pricing Regulatory factors Price discrimination Strategic pricing Regulatory factors

21 Pricing Strategy Price discrimination: Different prices, different countries, same product –Charging what the market will bear –Two factors: Must keep national markets separate Different price elasticities Arbitrage: Charging different prices in different countries for same product –Doesn’t always work –Sometimes it does Income level and competitive conditions determine elasticity –Elasticity (price) tends to be be greater in countries with low income levels –Elasticity (demand) tends to be greater in countries where there are many competitors Price discrimination: Different prices, different countries, same product –Charging what the market will bear –Two factors: Must keep national markets separate Different price elasticities Arbitrage: Charging different prices in different countries for same product –Doesn’t always work –Sometimes it does Income level and competitive conditions determine elasticity –Elasticity (price) tends to be be greater in countries with low income levels –Elasticity (demand) tends to be greater in countries where there are many competitors

22 Strategic Pricing Predatory pricing: –Using price as a competitive weapon Multipoint pricing strategy: –When two or more international firms compete against each other in two or more national markets –A firm’s pricing strategy in one market may impact a rival in another market Experience curve pricing: –Firms price low worldwide to build market share. Incurred losses are made up as company moves down experience curve Predatory pricing: –Using price as a competitive weapon Multipoint pricing strategy: –When two or more international firms compete against each other in two or more national markets –A firm’s pricing strategy in one market may impact a rival in another market Experience curve pricing: –Firms price low worldwide to build market share. Incurred losses are made up as company moves down experience curve

23 Regulatory Influences on Prices Antidumping regulations: –Selling a product for a price that is less than the cost of producing it Predatory pricing and experience curve pricing may violate regulations –Antidumping rules place a floor under export prices and limit a firm’s ability to pursue strategic pricing Competition Policy: –Promote competition –Restrict monopoly practices –Can limit the prices a company can charge in a given country Antidumping regulations: –Selling a product for a price that is less than the cost of producing it Predatory pricing and experience curve pricing may violate regulations –Antidumping rules place a floor under export prices and limit a firm’s ability to pursue strategic pricing Competition Policy: –Promote competition –Restrict monopoly practices –Can limit the prices a company can charge in a given country

24 Price discrimination across markets Multi-point pricing Nike Pricing Strategy

25 Marketing Mix: Promotion Marketing Mix: Promotion

26 Communications Strategy Effectiveness of international communications can be impacted by: –Cultural barriers Need to develop cross-cultural literacy Effectiveness of international communications can be impacted by: –Cultural barriers Need to develop cross-cultural literacy

27 Communications Strategy Effectiveness of international communications can be impacted by: –Cultural barriers Need to develop cross-cultural literacy –Source and country of origin effects Receiver of the message evaluates it based upon the status of the sender –Country of origin effects: Emphasize/de-emphasize foreign origin Effectiveness of international communications can be impacted by: –Cultural barriers Need to develop cross-cultural literacy –Source and country of origin effects Receiver of the message evaluates it based upon the status of the sender –Country of origin effects: Emphasize/de-emphasize foreign origin

28 Communications Strategy Effectiveness of international communications can be impacted by: –Cultural barriers. Need to develop cross-cultural literacy –Source and country of origin effects Receiver of the message evaluates it based upon the status of the sender –Country of origin effects: Emphasize/de-emphasize foreign origin –Noise levels Tends to reduce the effectiveness of a message Developed countries - high Less developed countries - low –Push versus Pull: Push emphasizes personal selling Pull depends on mass media advertising Effectiveness of international communications can be impacted by: –Cultural barriers. Need to develop cross-cultural literacy –Source and country of origin effects Receiver of the message evaluates it based upon the status of the sender –Country of origin effects: Emphasize/de-emphasize foreign origin –Noise levels Tends to reduce the effectiveness of a message Developed countries - high Less developed countries - low –Push versus Pull: Push emphasizes personal selling Pull depends on mass media advertising

29 Teaching Approaches –Presentation Global Comparative –Observational Seeing: television shows, movies, etc. Perceiving: literature –Experiential Taste it, See it, Feel it Providing Assistance –Application Cases Live Cases

30 Takeaways Planning –Topical content –Global vs. comparative vs. mixed Engage Students –Make it apply What they eat, buy or wear –Seeing differences –Experiencing differences –Unpredictability of International Marketing Finding the bizarre Finding the humorous


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