Topic 4 Marketing International Marketing and E-Commerce

Learning Objectives Evaluate the opportunities and threats posed by entry into international markets Analyse the cultural, legal, political, social and economic issues of entering international markets Analyse the effect of e-commerce on the marketing mix Discuss the costs and benefits of e-commerce to firms and consumers

Definitions International Marketing: marketing a firm’s products in foreign countries Global marketing: refers to selling the same product using the same marketing approach throughout the world – An extension of international marketing E.g. McDonald’s slogan – “I’m Lovin’ It!” Global marketing is different than glocalizing

Why go international? Saturated home markets Potential to increase profits Spreading risks between different markets

Why international marketing is different Political Differences Changes in governments can cause instability Economic & Social Differences Average living standards vary across the globe. The role of women. Legal Differences Some goods are illegal in different countries Cultural Differences Key factor in international marketing but difficult to define and measure Differences in business practices Accounting standards and rules can vary in different countries

Entry Into International Markets – Exporting – firm sells its products directly to overseas buyers – Direct Investment – firm sets up business in foreign country High cost of investment, but can help avoid tariffs and take advantage of local labor High cost of investment, but can help avoid tariffs and take advantage of local labor – E-Commerce – trading via Internet allows firms to sell w/o setting up retail shops – Joint Ventures – 2 or more companies invest in shared business project – Strategic Alliances – companies share in project but do not form a new business – Mergers or Takeovers – companies join or one company buys another – International Franchising \ Licensing – others trade under name in return for a share of the profits E.g. Burger King E.g. Burger King

Opportunities and Threats of International Markets Benefits: Benefits: – Wider customer base – more market share – Economies of scale – increased operations often decreases average production costs – Increase brand recognition – Spread risk – less risk exposure when operating in multiple countries – Extend product life cycle – if product has decline domestically, it can grow overseas Threats: Threats: – Cultural Issues Local preferences – in China, McDonald's sells more chicken. Halloween may not take off in Asia Local preferences – in China, McDonald's sells more chicken. Halloween may not take off in Asia Language – English is language of business, but firms must be aware of cultural standards Language – English is language of business, but firms must be aware of cultural standards Ethics – some things are unethical in select regions Ethics – some things are unethical in select regions – Political, Legal, Demographic, and Economic Issues Read about these issues on page 593-4, and write 3 bullet points on each topic in your notes. Read about these issues on page 593-4, and write 3 bullet points on each topic in your notes.

International Marketing – Alternative Strategies

Global localisation Glocalising

Global localisation Advantages Local needs, tastes and cultures are reflected in the marketing mix hopefully leading to higher sales and profits No attempt to impose foreign brands / products / adverts Products more likely to meet legal requirements Less local opposition Disadvantages Scope for economies of scale is reduced International brand could lose its power and identity Additional costs

Pan global / pan regional marketing Advantages Common identity for the product can be established Cost reduction It recognises that differences between consumers in different countries are reducing E.G. teenagers Disadvantages Still may be necessary to develop products to suit cultural or religious variations Legal restrictions Brand names do not always translate effectively

Introduction – E-Commerce E-commerce: trading of goods and services via the Internet – Could include financial services, government services, retailers Advantages: – Allows businesses to be open 24 hours – Larger customer base – Lower operating costs and overhead – Another channel of distribution Disadvantages: – Set-up costs – hiring specialists – Fraudulent trade – Finance charges from credit card companies – More web pages than people in the world

The smallest things can make your business successful secret-sauce-of-online-success-is-ecommerce- packaging secret-sauce-of-online-success-is-ecommerce- packaging

Business-to-business (B2B) B2B: E-commerce catered for the needs of other businesses Examples: – Corporate banking, Insurance agencies, advertising agencies, etc. Marketing techniques are different to businesses than to consumers

Business-to-customers (B2C) B2C: e-commerce directly catered for the end-user Examples: – Amazon.com – Ebay.com Seach engines (e.g. Google) operate both as B2B and B2C. – E.g. consumers use the engines, but businesses will ‘pay- per-click’ (businesses pay Google for sponsored links and pay based on number of ‘clicks’)

Impact of e-commerce on the marketing mix Product Each consumer can be communicated with individually and personally. Businesses selling over the internet can afford to stock a much wider range of goods. E.G. ASOS Clothing Product Each consumer can be communicated with individually and personally. Businesses selling over the internet can afford to stock a much wider range of goods. E.G. ASOS Clothing Price Markets are more competitive as prices can be compared so easily – price comparison websites. Customers have more control over price setting. Price Markets are more competitive as prices can be compared so easily – price comparison websites. Customers have more control over price setting. Promotion Banners, pop-ups, text messages, web pages, viral marketing – the costs of reaching huge numbers of potential customers have been cut. Promotion Banners, pop-ups, text messages, web pages, viral marketing – the costs of reaching huge numbers of potential customers have been cut. Place Has the day of the high street passed? Place Has the day of the high street passed?