INTERNATIONAL MARKETING SECTION 1A INTRODUCTION AND OBJECTIVES ALAN L

INTERNATIONAL MARKETING SECTION 1A INTRODUCTION AND OBJECTIVES ALAN L
INTERNATIONAL MARKETING SECTION 1A INTRODUCTION AND OBJECTIVES ALAN L. WHITEBREAD

WHY DO DOES THE GOVERNMENT HELP AMERICAN BUSINESS?
To help the American economy, investors, and workers by assisting American business through counseling and advocacy around the world. To help business in another country increase the variety of products and services for your B2B and consumer markets; create jobs at many levels of your economy; improve industries in your host country and make them more competitive world-wide; and potentially increase your country’s exports!

WHY DO WE SEE THE TREMENDOUS INCREASE IN WORLD TRADE?
Governments are recognizing that Trade and investment help bring prosperity by Increasing standards of living; Providing access to products, services, and more choice for businesses and consumers; and International firms tend to 1-pay higher wages and 2-be more employee friendly and socially responsible.

Governments are also recognizing that Trade helps bring peace [just look at Europe since WW II] Role of the WTO – Improving intellectual property [IP] protection and reducing and/or eliminating trade barriers World Bank and Regional Banks – assisting countries in need IMF – assisting with currency stabilization Product standards [like ISO] are spreading around the globe.

Governments are responding to this thinking by Encouraging more trade and slowly reducing or eliminating market barriers; Increasing participation in bilateral and multilateral trade agreements; Opening markets to foreign investment; and, Allowing greater competition in domestic markets while encouraging local firms to export.

TRENDS AFFECTING WORLD TRADE
The growth of regional economic agreements [EU, NAFTA, ASEAN, and many more] have boosted trade. The world is shrinking rapidly with the improvement of communications. Strategic alliances are the new wave of international business growth.

TRENDS AFFECTING WORLD TRADE
There has been a major change in multinational thought recognizing that we can not be efficient at everything so we need to concentrate on core competencies and build strategic alliances. Foreign Direct Investment [FDI] continues at or near all-time highs. FDI increases jobs and cash flows in that firm and its domestic suppliers. Joint ventures increase jobs and cash flows in that firm and its domestic suppliers. Acquisitions provide capital for expansion, jobs, and improve cash flow. Affiliate investment provides capital for expansion, jobs, and improve cash flow. Strategic alliances provide the opportunity to gain access to other opportunities.

BARRIERS TO FREE TRADE National controls to protect industries for many reasons [there will be much more later in the course]. Local business interests that believe they need help, or assistance, or protection because they are not a significant player in that item. Capital markets are becoming more internationally interconnected making it easier to legally raise and move money. Nations that do not actively participate are at an extreme disadvantage.

BARRIERS TO FREE TRADE Fear of EXPORTING IMPORTS
It is too risky for the firm. More competition means more risk. The firm is unprepared. Firm is not ready for foreign competition. The firm believes it is too small to succeed. Large companies are more efficient. Happy at home – lack the desire to be a global firm. Happy at home – do not mess things up with more competition.

BUILD RELATIONSHIPS BY
Improving the strategic position of the firm. Expand and/or find markets to decrease dependence on a few concentrated markets Reduce costs of – 1-manufacturing, 2-product development, 3-customer service Gain access to resources – 1-natural, 2-human, 3-technological, 4-financial Become more competitive in a national or regional market Reduce and manage overall risk Growing corporate interdependence – multinationals are pulling their suppliers along

INTERNATIONAL MARKETING SECTION 1B BUSINESS TOOLS AND THE WORLD MARKETPLACE ALAN L. WHITEBREAD

WELCOME All information in the lectures is presented with what we refer to as the stoplight approach. This will help you understand the amount of risk that may be associated with a concept or approach that you should point out to your clients. If the box is in bright green, it is a common thing to do with the necessary due diligence. [Low risk] If the box is in bright yellow, you should take some extra care/analysis before pursuing. [Moderate risk] When appropriate, if the box or text is in bright red or has “[WARNING]”, it indicates a high risk item and you need to either take great precaution before proceeding or doing anything different. Examples of concepts, ideas, or theories are in light tan italics OR start with EX-. Things for you to do or questions you may want to ask about a business are in light blue.

OPTIONAL RESOURCE The U.S. Department of Commerce’s
A Basic Guide to Exporting, 10TH Edition, 2008, ISBN from .

GENERAL RESOURCES IMF Data CIA World Factbook
CIA World Factbook Numerous other sources for specific topics will be found in the slides.

GETTING STARTED - PART 1 OVERVIEW
THE WORLD MARKETPLACE Examine its history, frames of reference, and some economic items THE IMPACT OF CULTURE ON INTERNATIONAL BUSINESS What is it? How does it affect us? FIRST STEPS OF INTERNATIONAL BUSINESS Your readiness, keys to success, dangers

PART 1 OVERVIEW - continued
ECONOMIC GEOGRAPHY How do you evaluate different countries? STRATEGY, PLANNING, AND PROGRAM BASICS Basics, initial exporting items INTERNATIONAL MARKET RESEARCH Overview Politics, controls, and legal problems [danger] LETS GET STARTED.

INTERNATIONAL TRADE AND THE FIRM
Marketing Legal Technologies Human resources Capital Management INTERNATIONAL TRADE Supply Chain Management Trade Finance Environment Competition Stakeholders Government

ETHICS & CORE VALUES Morals and ethics may be different between cultures. MORALS The differences between right and wrong. ETHICS The values of human conduct. Whether an action is right or wrong, and the good or bad of motives, means, and ends.

ETHICS & CORE VALUES ETHICS
Personal ethics should exceed legal requirements. If you have to ask about its legality, you are likely in ethical trouble. What is the intent of an action? In U.S. criminal and U.S. business law, there are more severe punishments for the “intent to harm”. What are the U.S. government’s ethics?

ETHICS & CORE VALUES CORE VALUES
Values and beliefs: you can not live a dual life. Peter Drucker, one of the great management philosophers of our time, said “It is extremely important to do the right thing”. It is equally important to also do all the right things when advising U.S. business in your host country.

DESIGNING THE BUSINESS PORTFOLIO
THE VISION STATEMENT broadly defines what the entity should be like in years. This statement needs to become part of the entity’s culture to be most effective.

DESIGNING THE BUSINESS PORTFOLIO
THE MISSION STATEMENT provides a path to achieve the vision through clear objectives. It will contain many of the nine following elements. Customers; products/services; markets; technologies; concern for survival/growth; philosophy; self-concept; public image; employees U.S. Department of State Mission Statement Create a more secure, democratic, and prosperous world for the benefit of the American people and the international community.

DOMESTIC VS. INTERNATIONAL DIFFERENCES: PLANNING
Single language [most nations] Multilingual, multinational, multicultural Homogeneous market [segments] Very diverse markets [segments] Market research is fairly straight-forward Data collection and analysis present many difficulties Well understood legal and regulatory environments Multiple environments with different degrees of stability Well-understood business environment Well-understood financial environment Wide-ranging from stable to slow to inflationary Can you think of another one?

U.S. BUSINESS STRATEGIC PLANNING
Set goals / objectives / examine alternatives Develop plans Implement plans as soon as there is enough substance to have a fairly high probability of success. Always have contingency plans in place.

U.S. BUSINESS STRATEGIC PLANNING
What are we now? What capabilities do we want to develop? What businesses should we be in? How do we get there? Thought processes The American educational approach Thinking in different ways Assess different strategy options. What are the rewards of success? The myopia problem

TYPICAL U.S. BUSINESS PLANNING TOOLS
Marketing myopia Core competencies Key success factors SBUs and SWOT analysis BCG and GE models Scenario planning Development projects Ansoff’s Product / Market Expansion Grid Competitive advantage of the firm Marketing mix Gap analysis

“MARKETING MYOPIA” THEODORE LEVITT ARTICLE Harvard Business Review reprint, July-August, 2004
Myopia: defining your business too narrowly Railroads Corner grocery [1930] vs. supermarket Color TV [Motorola, GTE, GE] Lead with price conundrum You can always get sales! Great marketing organizations rarely have financial problems!

BUSINESS DEFINITIONS & EXTENSIONS Fill in different types of businesses that fit the market oriented definition. Then do the same for your business[es]. COMPANY PRODUCT ORIENTED MARKET BUSINESS EXTENSIONS DISNEY Theme parks Fantasies & entertainment Name the businesses they are in and could get into with this definition. WAL-MART Discount stores Value to middle class What is your answer? HOME DEPOT Tools & home improvement Advice & solutions

STRATEGIC DIRECTION OF THE FIRM (“THE CORE COMPETENCE OF THE CORPORATION” ARTICLE)
CORE COMPETENCY The foundations [usually technologies] upon which you build your business over a very long time. You need to compare your core competencies with those of your competitors. THREE CORE COMPETENCY TESTS SUSTAINABLE – Very long term [5+ years] AND COMPETITIVE – Obvious customer benefits ADVANTAGE – Access to additional markets or market segments

KEY SUCCESS FACTORS NOT CORE COMPETENCIES
YOU MUST DO BETTER ALL THE TIME TO KEEP UP WITH YOUR COMPETITORS. Take a few moments now and apply the core competency tests to the following and see why they fail one or more of the tests. Customer services Design

THE STRATEGIC BUSINESS UNIT (SBU)
A UNIT OF THE FIRM THAT HAS DIFFERENT OBJECTIVES AND CAN BE PLANNED SEPARATELY FROM OTHERS. For instance, some of General Electric’s business units include GE Commercial Finance -- GE Industrial GE Consumer Finance -- GE Infrastructure GE Healthcare -- NBC Universal

THE STRATEGIC BUSINESS UNIT (SBU)
SBU ISSUES RESOURCE COMPETITION PEOPLE MONEY DEVELOPMENT RESOURCES FAIR PERFORMANCE MEASURES How do you reward very different SBUs? WHAT IS THE ACCEPTABLE DEGREE OF AUTONOMY FOR EACH SBU?

North America Europe Asia Export Business Consumer Government
SBU Trucks Cars Tanks MARKETS / SEGMENTS TECHNOLOGIES [fuel cells] / PRODUCTS/ SERVICES A P L I C T O N S Delivery Transportation War North America Europe Asia Export Business Consumer Government

SWOT ANALYSIS Complete the analyses for your firm and your major competitors.
STRENGTHS OPPORTUNITIES LEVERAGE WEAKNESSES [constraints] THREATS [vulnerabilities] PROBLEMS

BOSTON CONSULTING GROUP: GROWTH – SHARE MATRIX
HIGH Relative Market Share LOW Market Growth Rate STARS Invest heavily QUESTION MARKS Decide quickly CASH COWS Milk for cash DOGS Divest or discontinue

GE STRATEGIC BUSINESS PLANNING MATRIX
Market Attractiveness Market size, growth rate, potential Competition Profitability Government regulation What else? Business Strength Market share Customer & market knowledge Cost efficiency Technology What else?

GE STRATEGIC BUSINESS-PLANNING MATRIX*
BUSINESS STRENGTH Market share, Customer & market knowledge, Cost efficiency, Technology, … STRONG MEDIUM WEAK SBU A is going in the right direction. SBU B is losing ground. MARKET ATTRACTIVENESS Market size, growth rate, potential, … LOW MEDIUM HIGH SBU C is improving. SBU D is bad and getting worse. Invest and Grow Selective Growth Divest or Discontinue

SCENARIO PLANNING Thoroughly understand the key strategic forces that impact each scenario. Take an issue that is of concern to you and describe alternative futures by Creating alternative paths from the future scenario back to today. Creating alternative paths from today to the future scenario. Analyzing all the paths and select the best approach—possibly using parts of many paths.

FIVE TYPES OF DEVELOPMENT PROJECTS
LARGE HARDEST P R O C E S H A N G MORE PRODUCT CHANGE LESS R&D ADVANCED DEVELOPMENT PROJECTS: GENETIC ENGINEERING NEW CORE PRODUCT NEXT GENERATION PRODUCT ADDITION TO PRODUCT FAMILY DERIVATIVES AND EXTENSIONS ALLIANCES PARTNERSHIPS PROJECTS NEW CORE PROCESS BREAKTHROUGH PROJECT: NEW FAMILY OF DRUGS R&D JOINT VENTURE NEXT GENERATION PROCESS SINGLE DEPARTMENT UPGRADE PLATFORM PROJECT: APPLE iMAC: TRANSLUCENT PLASTIC COLORATION TECHNOLOGY INCREMENTAL CHANGE DERIVATIVE PROJECT: SIMPLE SIZE CHANGE EASIEST SMALL For more information see Creating Project Plans to Focus Product Development, Harvard Business Review, Vol. 70, No. 2, p.74.

ANSOFF’S PRODUCT / MARKET EXPANSION GRID
EXISTING PRODUCTS NEW PRODUCTS EXISTING MARKETS 1. Market penetration and / or saturation 2. Product development [internal or external] NEW MARKETS 3. Market development [channels of distribution] 4. Diversification [usually by acquisition] These show ways to grow your business generally go from easiest [#1] to hardest [#4].

COMPETITIVE ADVANTAGE OF THE FIRM: PORTER’S THREE GENERIC STRATEGIES
Customer Perceived Uniqueness Low Cost Position INDUSTRY WIDE DIFFERENTIATION STRATEGY Focus on perceived value. OVERALL COST LEADERSHIP Hard to maintain long term. MARKET SEGMENT ONLY NICHE STRATEGY Understanding and focus. No direct battles with major competitors. C O M P E T I V S

MARKETING MIX [The 4 P’s]
PRODUCT -Variety -Design -Features -Branding -Packaging PLACE -Channels -Coverage -Transportation -Logistics PROMOTION -Advertising -Public Relations -Sales promotion -Trade Shows PRICE » VALUE -List price -Discounts -Allowances -Terms and conditions of sale

FIRST MOVER: ADVANTAGES AND DISADVANTAGES
POTENTIAL ADVANTAGE POTENTIAL DISADVANTAGE Increased brand recognition Channel members need training Leadership image Customers need to be educated Increase distribution Market segmentation must be very good Longer market experience Cannot maintain first mover advantage

ATTACKING COMPETITORS: GAPS—THE THREE DIMENSIONS
CHANNELS OF DISTRIBUTION [Gap 1 – small gap in one dimension] Gap 1 Gap 3 TECHNOLOGIES PRODUCTS SERVICES APPLICATIONS [Gap 3 – small gap in all three dimensions] Gap 2 Gap 2 MARKETS / SEGMENTS [Gap 2 – major gap in all three dimensions with two market segments]

PRODUCT LINE PLANNING* APPLICATION SUMMARY OF GAP ANALYSIS
PLACE PROMO-TION PRICE COMPETI-TION Features Expand channels Stimulate light users How to compete Brands Intensify coverage Attract non-users Penetrate / Substitute Market segments Use more each time Model number Services added To maximize your return, You always pursue price gaps last.

SECTION 1A & B: REVIEW You should now have knowledge of
International trade and the firm Strategic planning tools Core competency, key success factor, SBU Business portfolio, mission, and vision SWOT, BCG, GE planning tools Exploring scenarios Types of development projects Product / market expansion or approach The Marketing Mix and gap analysis

INTERNATIONAL MARKETING SECTION 2 THE IMPACT OF CULTURE ON INTERNATIONAL BUSINESS ALAN L. WHITEBREAD

U.S. CULTURE: GENERAL THINGS THAT ARE LIKELY DIFFERENT ABOUT AMERICANS. Americans admire individualism and self-reliance. Americans are tolerant of different viewpoints and openly discuss them. “Live and let live” is a good motto. Americans take pride in work achievements; e.g. my son the doctor, or my daughter the lawyer. Change is embraced and is a key part of their success. They are competitive [aggressive] – winning [being first] is very important.

U.S. CULTURE: FAMILY THINGS THAT ARE LIKELY DIFFERENT ABOUT AMERICANS.
Meals and specific foods rarely have the significance they do in other cultures. Meals are mostly informal social events. Social contacts and relationships tend to be more work related, as opposed to neighborhood, community, or religious. The family is important but not to the extent you see it in other cultures.

U.S. CULTURE: MOBILITY THINGS THAT ARE LIKELY DIFFERENT ABOUT AMERICANS. Getting ahead is usually done via changing jobs. Americans frequently change jobs and move whatever distance is necessary – even across the country. Social mobility is most often tied to professional or business accomplishments [money] and only rarely to family social standing.

U.S. CULTURE: OTHER THINGS THAT ARE LIKELY DIFFERENT ABOUT AMERICANS.
Most Americans pay their taxes – an example of following the “rule of law”. Americans are very litigious – they have uncommon confidence in their judicial system to render impartial decisions in civil and business disputes. They tend to expect the same outside the U.S. Americans love to shop – tangible objects serve as mementos of travel and unique experiences.

U.S. BUSINESS CULTURE Smiles are common even between strangers anytime there is direct eye contact and frequently include a “Hi”. Greeting – business or strangers: use a firm handshake [3 or 4 seconds] and maintain good eye contact during the greeting. The eye contact shows character, confidence, interest, and sincerity. Introductions include your title only if appropriate for the situation. Friends may briefly embrace – much more common in smaller cities.

U.S. BUSINESS CULTURE Business cards are usually exchanged informally and without any special presentation style during introductions, or early in a meeting, or at a significant point in a meeting, or rarely when leaving. Business meetings are usually informal. Americans start discussing business very early in the meeting. Differences of opinion are common even during a meeting. Rank in a meeting is generally unimportant – expect anyone to speak at any time.

U.S. BUSINESS LAWS ILLEGAL BUSINESS PRACTICES – COMPETITION
Horizontal agreements among competitors can raise antitrust suspicions of potentially restricting competition. Any agreement to restrict output is illegal. Boycott agreements among competitors not to deal with another person or business violates the law if it is used to force another party to pay higher prices, and to prevent a firm from entering a market or to disadvantage a competitor also are illegal. Agreements among competitors to divide sales territories or allocate customers are probably illegal. Cartels are illegal.

U.S. BUSINESS LAWS ILLEGAL BUSINESS PRACTICES – COMPETITION
A professional code of ethics may be unlawful if it unreasonably restricts the ways professionals may compete. [advertising by some professions] Certain kinds of agreements between buyers and sellers, such as a retailer who buys from a manufacturer, may be illegal if they restrict competition or show favoritism in any way. Manufacturer-imposed limitations on how or where a dealer may sell a product, e.g., service obligations or territorial limitations, are generally legal. Tie-in sales where the sale of one product is based solely on the condition that a customer purchase a second product, which the customer may not want or can not buy elsewhere at a lower price, are illegal if they harm competition. Americans have very high regard for “the rule of law”. They will not respond well to suggestions that they break or evade it, even if “everyone else” does.

U.S. BUSINESS PRACTICES CONTRACTS
Americans expect business partners to respect the spirit of the contract, even more so than the letter. [It defines the relationship – it is not treated as a starting point.] Some business is done informally with just a verbal agreement. Most business is done with purchase orders which are an intent to purchase with usually a lot of legal paragraphs attached but are usually non-binding. Contracts are frequently used, and are always used for large deals. Contracts tend to be quite lengthy and are heavily in legal jargon although there is a trend to simplified verbiage.

SENSITIZING AMERICANS TO ANOTHER CULTURE
Americans are generally quite friendly but forceful in business relationships. They generally have less knowledge of foreign cultures than foreigners expect of them as citizens of such a prominent country. Do not expect them to have much more than a basic knowledge of another culture or history. If they misstep in another culture it is from ignorance. Deliberate insults by Americans are rare and obvious. Americans are not generally fluent in other languages, although this is changing among the young. There is no commonly accepted “proper” use of eating utensils. Americans’ posture tends to be relaxed. It does not generally mean they are disinterested, however. They generally say exactly what they mean – do not look for hidden meanings or saving face. Interrupting another person is common.

SECTION 2: REVIEW You should now have knowledge of
American culture in general with some insights into family, mobility, and other aspects; American business culture, business laws, and common business practices; and, Sensitizing Americans to your culture.

INTERNATIONAL MARKETING SECTION 3A FIRST STEPS IN INTERNATIONAL BUSINESS - 1 ALAN L. WHITEBREAD

UNDERSTANDING GLOBAL BUSINESS
It is more different than you can imagine.

ORGANIZATIONAL GOALS The key is to find a structure which allows the organization to profitably respond to market differences and market dynamics. A market difference is something that is not the same as in another market [e.g. color preference]. A market dynamic is something that drives the market [e.g. interest rates]. Make a list of examples of market differences and market dynamics.

ORGANIZATIONAL GOALS TRADE-OFF the value of centralization comes from
knowledge planning co-ordination, implementation, and control the value of decentralization comes from maximizing response flexibility for a local situation minimizing reaction time customizing the approach as required

ORGANIZATIONAL STRUCTURE
Organizational structure is a function of the situation. Multinationals generally use a simple, flat organization structure with few levels of management. Empowerment Speed of decision-making

GLOBAL ORGANIZATION STRUCTURES
INTERNATIONAL GEOGRAPHIC / AREA PRODUCT FUNCTIONAL MARKET / CUSTOMER COMPLEX [large firms]

INTERNATIONAL STRUCTURE
List three advantages to this structure below. List three disadvantages to this structure below.

GEOGRAPHIC STRUCTURE Advantages of this structure include
simple low cost of sales and administration direct customer interaction Disadvantages to this structure include no specialization controlling how the sales force spends its time selling all the products

PRODUCT STRUCTURE Advantages of this structure include
driven by product purchases specialized sales force knowledge for specialized products helps forecasting and production scheduling Disadvantages to this structure include duplication of sales effort selling two very different product groups higher administrative costs problem with accounts wanting to buy both product groups

FUNCTIONAL STRUCTURE List three advantages to this structure below.

MARKET / CUSTOMER STRUCTURE
Advantages of this structure include driven by type of customer and is close to the customer sales management controls field sales and how they spend their time improved feedback throughout the organization Disadvantages to this structure include higher selling and administrative costs multiple sales forces compete for product management’s time account assignment to the appropriate sales organization is critical to the success of this approach

COMPLEX STRUCTURE Advantages of this structure include
driven by type of customer and is close to the customer multiple levels of sales skills based on the customer type very difficult for competitive analysis Issues of this structure include classification and reclassification of accounts price strategies consistent program implementation Disadvantages of this structure include requires a lot of coordination Information is widely spread over the organization and hard to consolidate very heavy work load on marketing communications

INTERNATIONAL STRUCTURE
This is a typical U.S. marketing structure for a large organization. At this size it could look like an international structure at the higher level. This provides you detail of some of the organizational issues larger firms face every day. For instance, where should customer services report – marketing or sales?

WHO EXPORTS? Only $1.28 trillion [8.8%] of the U.S. GDP [$14.6 trillion] was exported in 2010 U.S. is 2nd largest exporter - $16 million ahead of Germany. China is the largest at $1.58 trillion. ~ 10% of U.S. companies export Approximately 2,000 firms account for 70% of U.S. exports Exports account for a significant amount of profits

THE VALUE OF EXPORTING Higher revenues, average unit price [AUP], and profits Increased volume Potentially lower average unit cost [AUC] Potential tax advantages for Americans May extend product life cycles

WHY DON’T MORE FIRMS EXPORT?
They are preoccupied with domestic issues / content with domestic business. International misconceptions Fear of the unknown Horror stories because of lack of knowledge. I lost money. I did not get quick results. It costs too much. …

INTERNATIONAL ORGANIZATION: REQUIRED COMPETENCIES
Knowledge of economic geography, markets, segments, and customers Knowledge of industry and competitive forces Knowledge of your country and region This is a key value that you provide your American clients

INTERNATIONAL CORPORATE CULTURE
An multi-national corporation [MNC] knows changing its culture is an important part of improving its global competitiveness. MNC Managers accept and embrace the mission, thus forming a corporate culture. Changing the culture of an organization can be a long and difficult process.

EXPORTER’S CHECKLIST: THE FIRM
Why does the firm want to pursue exports? Is senior management committed to a multi-year effort to succeed in international business? Including travel, trade shows, samples, different collateral, IP protection, …, ? What are management’s expectations for the export effort? Are they reasonable [size and time]?

EXPORTER’S CHECKLIST WHY DOES THE FIRM WANT TO PURSUE EXPORT MARKETS?
COMMON ANSWERS We are getting a lot of inquiries. BAD ANSWERS We need more volume to offset domestic sales. The big-game hunting owner thinks there is opportunity in Africa. GOOD ANSWERS Your ideas would include …

EXPORTER’S CHECKLIST: INTERNATIONAL EXPERIENCE
In which countries are you conducting business? How many inquiries have been received from each country in the last n months? Which product [lines] are requested most often? How many domestic customers are buying the product for sale or shipment overseas?

EXPORTER’S CHECKLIST: INTERNATIONAL EXPERIENCE
Do you understand competition in the countries you are selling to or from where you are receiving inquiries? Do you know how to compete in those countries? Use the marketing mix as a quick guide Product Place Promotion Price

EXPORTER’S CHECKLIST: MANAGEMENT AND PERSONNEL
What international expertise is needed to service current and projected customers? What in-house international expertise exists? Make a list of your international expertise.

EXPORTER’S CHECKLIST: PRODUCTS AND SERVICES
Is the product adaptable? Does the product ship complete or as components? Can it ship as components? Does the product require any technical support, training, sales training, or after-sale service?

EXPORTER’S CHECKLIST: PRODUCTS AND SERVICES
Can your products / services be strongly differentiated? Do you require a special U.S. license to export? Do you or your client require any special import licenses, permits, registrations, or documentation? Will your product comply with the required country and international standards, packaging, and labeling? Where can an American company get this information for a specific country?

SECTION 3A: REVIEW You should now have knowledge of Global business
Organizational goals and structures International, geographic, product, functional, market/customer, complex The value of exporting International business Competencies Culture The Exporter’s Checklist

INTERNATIONAL MARKETING SECTION 3B FIRST STEPS IN INTERNATIONAL BUSINESS - 2 ALAN L. WHITEBREAD

KEYS TO SUCCESS: KNOWLEDGE
Language, customs, lifestyles, culture, … Control with limited flexibility Meeting standards and regulations Competence in international trade

KEYS TO SUCCESS: COMMITMENTS AND GOALS
The long-term commitment of senior management A realistic set of goals A logical and defendable marketing plan Always protect all your intellectual property

KEYS TO SUCCESS: BUSINESS RELATIONSHIPS
Be patient—it takes time to establish yourself, develop trust, and build relationships. Be very careful selecting international resellers and / or representatives.

KEYS TO SUCCESS: MARKETING AND SALES
FOCUS - do not chase every opportunity. Build programs that provide resellers with the support tools to do a great job. Communicate with your customers in the language of their preference – frequently! Seek expert advise and assistance—especially in the specialized fields of contract law, IP, packaging and labeling, documentation, and language.

KEYS TO SUCCESS: INTERNATIONAL NEGOTIATIONS
Secular-rational values [modern, rational, non-religious] Eastern Europe Western Europe Self-expression values Survival values South America U.S. Australia Canada Africa Middle East The longer the arrow, the greater the difference in values. Traditional values [religion, prior behavior]

KEYS TO SUCCESS: PRINCIPLES OF NEGOTIATIONS
Conflicts of interests are likely. Why is this true? All parties are seeking resolution. Why is this likely to be true? Seek an acceptable solution for all. Do not seek the best solution for one. Why may this be the best approach?

KEYS TO SUCCESS: NEGOTIATION PERSPECTIVES
Detail the situation by likely scenarios. Develop and rank alternative outcomes. Determine the rules of the game. What process[es] do we want to use? What type[s] of interaction do we want? What tactic[s] will be employed? How will power be used?

KEYS TO SUCCESS: NEGOTIATION TYPES
Heavy-handed - threatening Collaborative – working together Sharing – pro-rated to synergistic like JVs Accommodating - appeasement Competitive – zero sum game

COMPETITIVE NEGOTIATION
Competitive negotiation is composed of three major areas. Characteristics involve how the negotiation is to proceed. Tactics are the tools you use to accomplish you goals. Expressions are ways of forcefully stating your desires. CHARACTERISTICS [Control is key; what type of behavior is to be used; how to force concessions, …] TACTICS [Bluffs; promises; rewards; threats, …] EXPRESSIONS [Using words to deliver strong messages, …]

COMPETITIVE NEGOTIATION
That is not the response we need. You will have to do better if we are to continue doing business with you. There does not appear to be a quick solution to this issue, so accept our offer this time and we will accept yours the next time. This is a large amount of business that will help drive your costs down. We should see more of that reflected in our price. How do you effectively respond to each of these?

IMPACT OF CULTURE ON NEGOTIATION
GOAL CONTRACT OR RELATIONSHIP Attitudes Win / Lose Win / Win Personal Style Informal Formal Communications Direct Indirect Time sensitivity High Low Emotionalism High Low Agreement form Specific General Agreement Building Bottom Up Top down Team Organization One Leader Group consensus Risk taking High Low

WHY ARE THESE STATEMENTS NOT TRUE FOR AN AMERICAN BUSINESS?
We can sell our products to anyone we want, anywhere in the world. We know our customers and how to contact them. That is all that the law requires. We only sell our products domestically so export laws do not apply.

We sell to many countries around the world so we are exempt from U.S. export control laws. Once our buyer pays us we do not have to be concerned about what they do with the product.

3PL’s do our international shipping so they [not us] are responsible for any violations. We do not make anything dangerous so the Export Administration Regulations [EAR] do not apply.

We keep the necessary important records for our business. The government does not care about minor details. We do not pay bribes to foreign officials so FCPA does not apply; but we provide almost any entertainment they want when they are here.

SPECIAL NOTICE! As an American business or citizen, you have a legally required obligation under federal law to know your customer, and in some cases who your customer sells it to, plus how the product will be used!

EXPORT ASSISTANCE US DEPARTMENT OF COMMERCE
US Foreign and Commercial Service Product / Service / Industry Specialists Country Desk Officers Collect data regarding regulations, tariffs, business practices, economic and political developments, market size and growth and trade data Country Service Posts / Commercial Service Offices These are locations of U.S. DOC offices around the world that can provide business assistance.

US Foreign and Commercial Service Bureau of Industry and Security Formerly called the Bureau of Export Administration [BXA] Mission: Advance U.S. national security, foreign policy, and economic objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership. See National Institute of Standards and Technology [NIST] Manufacturing Extension Program See National Oceanographic and Atmospheric Administration [NOAA]

International Trade Administration Mission: to create prosperity by strengthening the competitiveness of U.S. industry, promoting trade and investment, and ensuring fair trade and compliance with trade laws and agreements. See SBA’s SBDC International Trade Centers [ITC] and U.S. Export Assistance Centers [USEAC] A resource listing may be found at

EXPORT ASSISTANCE World Trade Centers [WTC] State government agencies
bring businesses and government agencies together to increase foreign trade. It is an information hub for market research, WTCA OnLine matchmaker, trade shows & exhibit space, business services, trade education, group trade missions, and WTC clubs. See State government agencies Local trade associations

EXPORT ASSISTANCE US DEPARTMENT OF AGRICULTURE
Agriculture commodity & marketing programs Dairy Grain & Feed Tobacco, Cotton, & Seed Forest Products

EXPORT ASSISTANCE [7 of 17]
US DEPARTMENT OF COMMERCE US DEPARTMENT OF AGRICULTURE US DEPARTMENT OF STATE US DEPARTMENT OF THE TREASURY US AID OVERSEAS PRIVATE INVESTMENT CORPORATION [OPIC] EXIMBANK

EXPORT ADMINISTRATION REGULATIONS [EAR]
The EAR is the complete set of rules and regulations that control what can be exported, to whom, and what documents are required for compliance. For more information see

U.S DEPARTMENT OF COMMERCE -Bureau of Industry and Security [BIS] controls EAR including “dual-use” items. -The Census Bureau controls the balance of the export process, i.e. SED’s, etc. -U.S. Patent and Trademark Office U.S. TREASURY DEPARTMENT -Office of Foreign Assets Control [OFAC] oversees embargo and sanction lists – OFAC regulations.

U.S. STATE DEPARTMENT -Directorate of Defense Trade Controls [DDTC] controls defense articles, defense services, and related technical data including most space related agencies [ITAR] OTHER U.S. GOVERNMENT AUTHORITIES -U.S. DEPARTMENT OF HOMELAND SECURITY. -Customs and Border Protection [CBP] -U.S. DEPARTMENT OF ENERGY -NUCLEAR REGULATORY COMMISSION

BUREAU OF INDUSTRY AND SECURITY Export Administration Regulations [EAR] – Part 734
Items subject to the EAR include all Items moving into or through the U.S., and U.S. origin items, parts, and components, and In quantities exceeding de minimis levels, and Certain items produced outside the U.S. using U.S. origin technology. Items excluded from the EAR are exclusively controlled by other U.S. departments or agencies. The complete export regulations administration database may be found at

BUREAU OF INDUSTRY AND SECURITY Dual-Use Product
A dual-use product is any item that may have both commercial and military or commercial and proliferation applications. Purely commercial items without an obvious military use are also subject to the EAR due to potential alternative uses. F Ammonium nitrate fertilizer

BUREAU OF INDUSTRY AND SECURITY Export Administration Regulations [EAR]
KNOWING VIOLATIONS Corporation - A fine of up to the greater of $50,000 or five times the value of the exports for each violation. Individual - A fine of up to the greater of $50,000 or five times the value of the exports or imprisonment for up to five years, or both, for each violation.

WILLFUL VIOLATIONS Corporation - A fine of up to the greater of $1,000,000 or five times the value of the exports for each violation. Individual - A fine of up to $250,000 or imprisonment for up to ten years, or both, for each violation.

ADMINISTRATIVE SANCTIONS Denial of export privileges [Denied Persons List] See for more details The exclusion from practice; and / or The imposition of a fine of up to $12,000 for each violation, except that the fine for violations involving items controlled for national security reasons is up to $120,000 for each violation.

EXPORT COMMODITY CONTROL LIST
Approximately 15 pages of items Defense articles & services / national security Dangerous drugs and narcotics Endangered plants and wildlife Chemicals Radioactive materials Explosives Access the list at

BUREAU OF INDUSTRY AND SECURITY Office of Antiboycott Compliance
U.S. companies receive requests to engage in activities that further or support the boycott of Israel or blacklisted companies. Compliance with such requests may be prohibited by the Export Administration Regulations [EAR] and may be reportable to the Department of Commerce. See for more details

BUREAU OF INDUSTRY AND SECURITY Red Flag Indicators - 1
The customer or its address is similar to one of the parties found on the US DOC’s Denied Person’s List [DPL]. The product's capabilities do not fit the buyer's line of business. Routine installation, training, or maintenance services are declined by the customer. Level of product sophistication far greater than usual in the intended country.

BUREAU OF INDUSTRY AND SECURITY Red Flag Indicators - 2
A freight forwarding firm is listed as the product's final destination. When questioned, the buyer is evasive and especially unclear about whether the purchased product is for domestic use, for export, or for re-export. Cash only transactions. See for examples.

BUREAU OF INDUSTRY AND SECURITY Entities List
The Export Administration Regulations [EAR] provide that the Bureau of Industry and Security may inform exporters, individually or through amendment to the EAR, that a license is required for exports or reexports to certain entities. This is known as the Entities List. These end users have been determined to present an unacceptable risk of diversion to developing weapons of mass destruction or the missiles used to deliver those weapons.

BUREAU OF INDUSTRY AND SECURITY Unverified List
The Unverified List includes names and countries of foreign persons who in the past were parties to a transaction with respect to which BIS could not conduct a pre-license check (“PLC”) or a post-shipment verification (“PSV”) for reasons outside of the U.S. Government’s control. Any transaction to which a listed person is a party will be deemed by BIS to raise a “red flag” with respect to such transaction within the meaning of the guidance set forth in Supplement No. 3 to 15 C.F.R. Part 732. The “red flag” applies to the person on the Unverified List regardless of where the person is located in the country included on the list.

OFFICE OF FOREIGN ASSETS CONTROL [OFAC] Specifically Designated Nationals and Blocked Persons
7TH APRIL CARD BOARD FACTORY, Tajoura, Libya [LIBYA] ‘ABD AL-RAHMAN, Humam ‘abd al-Khaliq (a.k.a. ABD-AL-GHAFUR, Humam abd-al-Khaliq; a.k.a. ABD AL-GHAFUR, Humam Abd al-Khaliq; a.k.a. GHAFUR, Humam Abdel Khaleq Abdel; a.k.a. RASHID, Humam ‘abd al-Khaliq); DOB 1945; POB ar-Ramadi, Iraq; Minister of Higher Education and Research; Passport No. M /104 (Iraq) issued 12 Sep 1993; nationality Iraqi (individual) [IRAQ][IRAQ2] From list on January 29, 2004

OFFICE OF FOREIGN ASSETS CONTROL [OFAC] Sanctions Program and Country Summaries
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®. Balkans Overview of Sanctions Guidelines and Information Burma (Myanmar) Overview of Sanctions Guidelines and Information Cuba Overview of Sanctions

U. S. DEPARTMENT OF STATE List of Debarred Parties
Persons or entities with which no American person or entity can conduct business.

U.S. GOVERNMENT ENFORCEMENT LISTS
Be sure to review the “Enforcement Lists” in detail in the READINGS section. You may want to keep some of these available to give to your American clients as you deem appropriate.

THE SALES CYCLE [center] AND PROSPECT FUNNEL
MARKETING DEPARTMENT LEADS VS. COLD CALLS PROSPECT EFFECTIVENESS APPROACH & QUALIFY NEEDS & VALUE PRESENT QUALIFIED ! FAB DEMONSTRATE HANDLE OBJECTIONS REAL, FALSE, STALLS HOT PROSPECT CUSTOMER TRIAL & ACTUAL CLOSE CLOSE COGNITIVE DISSONANCE FOLLOW-UP CONTINUING CUSTOMER Copyright A. Whitebread,

HANDLING INQUIRIES Understand where you are in the sales cycle. When
should I acknowledge correspondence? should I provide information? should I refer the inquiry to a reseller? should I check credit and other references? should I provide a quote including terms? should I send a sales person?

SECTION 3B: REVIEW You should now have knowledge of Keys to success
Knowledge, commitment, relationships, focus, negotiations: types, characteristics, tactics, and expressions Misconceptions about what an American firm can and can not legally do in international business. Export assistance U.S. Departments of Commerce, State, Treasury and Agriculture, World Trade Centers Bureau of Industry & Security, EAR, dual-use, anti-boycott, red flag indicators, lists to check Handling inquiries Comparative business culture: Americans and You

INTERNATIONAL MARKETING SECTION 1A INTRODUCTION AND OBJECTIVES ALAN L

Similar presentations

Presentation on theme: "INTERNATIONAL MARKETING SECTION 1A INTRODUCTION AND OBJECTIVES ALAN L"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

INTERNATIONAL MARKETING SECTION 1A INTRODUCTION AND OBJECTIVES ALAN L

Similar presentations

Presentation on theme: "INTERNATIONAL MARKETING SECTION 1A INTRODUCTION AND OBJECTIVES ALAN L"— Presentation transcript:

Similar presentations

About project

Feedback