1. 4.7 International Marketing 4.8 Ecommerce
Chapter 29

2. International Marketing
Selling products in markets other than the original domestic market.
Why sell in international markets?
Saturated home markets
Increase profits through rapid sales growth and low costs in emerging markets
Spread risks between different markets
Poor trading conditions in home markets may make international markets desirable

3. Differences in International Markets
Conducting business internationally may be different:
Political differences
Economic and Social differences
Legal differences
Cultural differences
Business practices differences

4. Political Differences
Problems that occur for “political” reasons
Government structures
Democracy, socialist governments, communism
Political instability
Acts of terrorism, civil violence, drug wars

5. Economic and Social Differences
Problems that occur due to economic or social reasons
Average living standards around the globe range from $160 (Burundi) to $78,559 (Luxembourg) GDP per capita
Tax rates, interest rates
Aging population
Role of women and marriage

6. Legal Differences Problems that occur due to legal reasons
Some goods illegal to sell in some countries (guns, medications)
It may be illegal to advertise (children, tobacco products, birth control)
Product labeling and safety requirements maybe stricter in some countries

7. Cultural Differences
Problems that occur due to cultural reasons and can be difficult to measure
Words have different meaning when translated
The use of male/female models may not acceptable
Colors can have different meaning

8. Business Practices
Problems that occur due to different business practices
Accounting standards may vary
Setting up a company may face different requirements and time frames

9. Entry into International Markets
Exporting
Selling a product directly to a foreign customer
Selling a product to intermediary based in a foreign country
International Franchising
Using a franchise to operate your firm’s activities in a foreign market
Can be owned by many individuals
Can be owned by 1 company operating many locations

10. Entry into International Markets
Joint Ventures
Agreements between at least 2 companies to operate a new business venture
Aera Energy operating in Southern California is a joint venture between ExxonMobil and Royal Dutch Shell combined efforts to locate oil in Southern California.
Japan Nuclear Company is a joint venture between General Electric, Toshiba Corporation, and Hitachi to manufacture nuclear fuel for Japan’s nuclear energy industry.

11. Entry into International Markets
Licensing
Allows another firm in a foreign country to produce its branded or patented products under license usually under strictly controlled terms over quality.
Goods do not have to be exported if produced locally
Food products are fresher
No capital costs of setting up production facilities
NEGATIVES: Quality issues and unethical production methods may reflect badly on the company
Recent example: Apple factories in China reports mandatory overtime, factory explosions, crowded dormitories

12. Entry into International Markets
Direct Investment in Subsidiaries
Company-owned subsidiaries in foreign countries tend to be more successful than merging with locally based companies.
Why:
Culture, organizational structure, and technology differences of locally acquired business can be too different to overcome.
Subsidiaries can:
Be production or retail operations
Management can be decentralized
Local managers make most key decisions
Management can be centralized
Controlled from the head office in the home country
Example: BMW US Manufacturing Company
located in Spartanburg, SC

13. International Marketing Strategies
Globalization is making differences in taste, culture, and fashion less obvious.
If true, companies can take advantage of economies of scale by selling the same product to the entire world.
If not true, there will always be differences at the local level that will prevent the successful global marketing of products.

14. International Marketing Strategies
Pan-global marketing
Adopting a standard product across the globe as if the whole world were a single market. Selling the same goods in the same way everywhere.
Global localization
Adapting the marketing mix, including different products, to meet national and regional tastes and culture. “Thinking global – acting local”

15. International Marketing Strategies
Pan-global Marketing
Successful for 2 categories of products
Upmarket brands with international appeal
Rolex watches, Rolls-Royce cars, Versace Dresses
Mass-Appeal brands
Apple products, Levi’s jeans, Nike shoes

16. International Marketing Strategies
Global localization
Thinking global – acting local
YUM – the world’s largest food organization (KFC and Pizza Hut) use this approach
China: sells products not available in other countries to suit local tastes
Price levels are varied between different countries to reflect differences in income
Advertisements contain local ethnicities

17. Ecommerce
Ecommerce: The buying and selling of goods and services on the Internet.
B2C: Selling of goods and services directly to the final customer through a website.
B2B: Selling/buying of goods and services to/from another business
Advertising by using the company’s own website or creating a banner or pop-ad on another firm’s website to reach target market
Sales leads are generated by encouraging customer t leave information
Collecting market research data by encouraging customers to answer questions

18. Ecommerce Impact Businesses and Consumers have been impacted
Music
Film
Banking
Insurance
Travel and Tourism
These were once typical retail stores. The product delivery system has drastically changed due to the Internet.

19. Ecommerce Impact Product Marketing Mix has been impacted
Consumers can be communicated with individually
Custom services can be easily created (Airline tickets, hotel reservations, rental cars)
Custom products can be easily built (build your own car or computer)
Larger stocking options because market potential is greater

20. Ecommerce Impact Price Marketing Mix has been impacted
Prices can be easily compared
Competitive pricing more likely than cost-plus
Consumers have more control

21. Ecommerce Impact Promotion Marketing Mix has been impacted
Banners, pop-ups, text messages, web pages are all NEW ways to promote products
Promotional opportunities are greater
Cost to reach potential customers is lower

22. ? Ecommerce Impact Place Marketing Mix has been impacted
The Internet is transforming how we buy.
Will there be a need for store-fronts? ?