International marketing - Introduction

Overview of course 1. Competing in International Markets Company – Pros and Cons Industry – Competitive Advantage Market – Consumer behavior How to enter new Markets

Overview of course 2. Market Assessment and Development International market research – Differences between domestic and international market research. Market segmentation and product positioning.

Overview of course 3. Managing International Marketing Programs International branding and advertising Product Adaptation – 4ps International supply chain

Definitions Global – Most of the world, presence on almost all continents. International – More than 1 country. Domestic – Only home country.

Definitions International trade – Importing or exporting goods International Business – A company has international operations and production and becomes a Multinational Enterprise (MNE)

Opening Side Definition International marketing - 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.

Discussion How is the international marketing task different to domestic marketing?

The International Marketing Task Exhibit 1.3

International Marketing Involvement - Stages Opening Side International Marketing Involvement - Stages No Direct international Marketing Infrequent international Marketing Global Marketing Regular international Marketing International Marketing

No Direct international Marketing – Reactive Opening Side No Direct international Marketing – Reactive Products “indirectly” reach international markets Trading companies International customers who contact firm Domestic distributors Internet orders

Infrequent international Marketing – Reactive Opening Side Infrequent international Marketing – Reactive Caused by temporary surpluses so sales to international markets are made as goods become available Firm does not want to maintain continuous market representation

Regular international Marketing – Proactive Opening Side Regular international Marketing – Proactive Dedicated production capacity for international markets Strategy: Firm employs domestic or international intermediaries Uses its own sales force or sales subsidiaries

Regular international Marketing – Proactive Products are adapted for international markets as domestic demand grows Firms depend on profits from international markets

International Marketing – Proactive Opening Side International Marketing – Proactive Fully committed and involved in international markets and international activities Production takes place on international land. E.g. Fedders - After lower U.S. sales they designed new types of air conditioner units for the Chinese market

Global Marketing – Proactive Opening Side Global Marketing – Proactive A global view on all aspects of the marketing mix Marketing mix - product, price, placement, and promotion (the 4 Ps) Market segmentation is now defined by income levels, usage patterns, or other factors that span the globe

Definitions Features – How the product looks physically e.g. The chair is black and 1metre high. Benefits – What the product helps us with. E.g. The chair allows us to sit comfortably.

Definitions Standardized - more or less similar features and benefits of the product or service. Customized – A product made or adapted specifically for one person, group or country

Definitions Economies of scale - A cost advantage. The more of a good produced, the lower the per-unit fixed cost (e.g. the cost of building a factory) because these costs are shared over a larger number of goods

Definitions Product – Something which a person or company makes which I can touch. E.g. A pencil Service – Something which a person or company provides which I cannot touch. E.g. A night’s stay in a hotel.

Discussion What kind of standardized products or services can be sold all over the world? What features and benefits do these products or services have?

Discussion What technologies have helped to share similar ideas across the world? Do you think consumers tastes are becoming more similar or more different?

International Business has grown since WW2 Opening Side International Business has grown since WW2 Growth of the World Trade Organization. Growth of free trade agreements E.g. NAFTA, the EU, Korea-US FTA. The free market system has conquered – 3 billion new consumers E.g. China, India The growing impact of the Internet and TV.

Economies of Simplicity Theodore Levitt – 1983 Companies should grow by selling standardized products all over the world “Gone are accustomed differences in national and regional preferences.” This idea lasted for a decade but consumers had trouble relating to homogeneous products.

Opening Side Deciding on strategy Depending on the product and market, firms may pursue a global market strategy for one product but a local strategy for another product. E.g. P&G diapers- Global, detergents - Local.

Glocal “Glocal” strategy  - A hybrid strategy combining both global and local aspects of business.

Video Discussion What is the advantage of a global strategy? What is the advantage of a local strategy? Why does the lady from Pepsi like a Glocal strategy?