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8/3/2019 Int Re National Marketing
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BY
Prof.J.Varaprasad Reddy
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Introduction
What is GlobalMarketing?
How is it differentfrom regularmarketing?
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Stages of International Marketing
Involvement
1. No Direct Foreign Marketing2. Infrequent Foreign Marketing
- export operations3. Regular Foreign Marketing
- export operations, direct investmentsales operations, directinvestment production operations
4. International Marketing- fully committed and involved in
imternational marketing throughproduction and serviceoperations
5. Global Marketing- companies treat the world as one
market
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Introduction Marketing
Process of planning andexecuting the
conception pricing,promotion anddistribution of ideas,goods and services tocreate exchanges that
satisfy individual andorganization goals
Global Marketing Focuses resources on
global marketopportunities andthreats; the maindifference is the scopeof activities becauseglobal marketing
occurs in marketsoutside theorganizations homecountry
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The International Marketing Task
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Political/legalforces
Economicforces
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2
Environmentaluncontrollablescountry market A
Environmentaluncontrollablescountry
market B
Environmentaluncontrollablescountrymarket C
Competitivestructure Competitive
Forces
Level ofTechnology
Price Product
PromotionChannels of
distribution
Geographyand
Infrastructure
Foreign environment(uncontrollable)
Structure ofdistribution
Economic climate
Cultural
forces
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45
6
7Political/
legal
forces
Domestic environment(uncontrollable)
(controllable)
Copyright2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Domestic environment
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Domestic political decisions affecting marketing activities to
foreign markets (e.g. Libya, Iraq, South Africa, China)Domestic economic climate (e.g. strength of domesticeconomy = possibilities to invest abroad, value of currency(weakness of US$))
Competition in home country
International environment
Cultural, political and economic climates can changedramatically (e.g. China and Russia)
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Reasons for Global Marketing
Growth Access to new markets and access to resources
Survival
Against competitors with lower costs (due to increased
access to resources) e.g. India and China Or push and pull factors
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Overview of Marketing One of the functional areas of a business that isdistinct from finance and operations
Primary tools in marketing are product, price,
place, and promotion Marketing is an activity that comprises the firms
value chain
Current trend is to involve marketers in all value-
related decisions called boundaryless marketing
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Boundaryless Marketing
Goal is to eliminatecommunicationbarriers betweenmarketing and otherbusiness functionalareas
Properlyimplemented it
ensures that a marketorientationpermeates all valuecreating activities
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Goal of Marketing Surpass the competition at the task of creating
perceived value for customers
The Guide line is the value equation
Value = Benefits/Price (Money, Time, Effort, Etc.)
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Value Chain and Boundaryless Marketing
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Competitive AdvantageSuccess over competition in industry atvalue creation
Achieved by integrating and leveragingoperations on a worldwide scale
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Globalization Globalization is the inexorable integration of
markets, nation-states, and technologies to a
degree never witnessed before - in a way that isenabling individuals, corporations, and nation-states to reach around the world farther, faster,deeper and cheaper than ever before, and in a waythat is enabling the world to reach intoindividuals, corporations, and nation-statesfarther, faster, deeper, and cheaper than everbefore.
Thomas Friedman
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Global Industries An industry is global to the extent that a companys
industry position in one country is interdependent with itsindustry position in another country
Indicators of globalization:
Ratio of cross-border trade to total worldwideproduction
Ratio of cross-border investment to total capital
investment
Proportion of industry revenue generated by companiesthat compete in key world regions
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Competitive Advantage, Globalization and
Global Industries Focus
Concentration and attention on core business andcompetence
Nestle is focused: We are food and beverages. We are notrunning bicycle shops. Even in food we are not in allfields. There are certain areas we do not touch..We haveno soft drinks because I have said we will either buyCoca-Cola or we leave it alone. This is focus.
Helmut Maucher
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Global Marketing: What it is and What it
isnt Strategy development comes down to two main issues
similar to single country marketing
Target market
Marketing Mix
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Global Marketing: What it is and What it
isnt
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Global Marketing: What it is and What it
isnt Global marketing does not mean doing business in all
of the 200-plus country markets
Global marketing does mean widening businesshorizons to encompass the world in scanning foropportunity and threat
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Standardization versus Adaptation Globalization (Standardization)
Developing standardized products marketed worldwidewith a standardized marketing mix
Essence of mass marketing
Global localization (Adaptation)
Mixing standardization and customization in a way that
minimizes costs while maximizing satisfaction Essence of segmentation
Think globally, act locally
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Standardization versus Adaptation
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The Importance of Global Marketing For US-based companies, 75% of sales potential is
outside the US. About 90% of Coca-Colas operating income is
generated outside the US. For Japanese companies, 85% of potential is outside
Japan.
For German and EU companies, 94% of potential is
outside Germany.
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Environmental adaptation
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To adapt marketing programs to foreign markets certain
amount of adaptation is needed (take uncontrollableelements into consideration)
In broad sense the uncontrollable elements constitute theculture the difficulty is in the recognition of the culturalimpact
The problem in adapting to foreign markets is self-referencecriterion (SRC) and an associated ethnocentrism
SRC is an unconscious reference to ones own culturalvalues, experiences and knowledge as a basis for decisions
ethnocentrism: ones own culture knows best how to dothings
To avoid this misconception remember that it makes sensefor the other person to do things in his/her own way, if youdont remember this you might fail in recognizing culturaldifferences and the importance of those differences
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Management Orientations
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Ethnocentric:
Home country is
Superior, sees
Similarities in foreign
Countries
Regiocentric:
Sees similarities anddifferences in a world
Region; is ethnocentric or
polycentric in its view of
the rest of the world
Geocentric:
World view, sees
Similarities and
Differences in home
And host countries
Polycentric:
Each host country Is
Unique, sees differences
In foreign countries
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Strategic orientation to
international markets
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Domestic Market
Extension (Ethnocentric)
Multi-Domestic Market (Polycentric)
Global Marketing (Regio/Geocentric)
Concept EPRG Schema
Copyright2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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It is expected that differences in the complexity andsophistication of companys operations depend on
which orientation guides its operationsAmong the approaches describing the orientations from
casual exporting to global marketing is EPRG schema- in this schema the firms are classified as
ethnocentric, polycentric, regiocentric or geocentric
depending on the international commitment of thefirm
- in this schema it is also assumed that the degree ofinternationalization to which management iscommitted or willing to move affects the specific
international strategies and decision rules of thefirm
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Domestic market extension orientation
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It views its international operations as secondary and as anextension of its domestic operations
The primary motive is to market excess domesticproduction
Minimal, if any, efforts are made to adapt the marketing mixto foreign markets
In EPRG schema these companies are classified asethnocentric
Multidomestic market orientation
A company guided by this orientation has a strong sensethat country markets are vastly different and that marketsuccess requires an almost independent program foreach country => development of country basedmarketing strategies
Control is usually decentralizedIn EPRG schema these companies are classifies as
polycentric
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Global marketing orientation
A company guided by global marketing orientation is referred toas a global company: its marketing activity is global and itsmarket coverage is the world
It develops a standardized marketing mix applicable acrossnational boundaries
In EPRG schema these companies are regiocentric orgeocentric
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Forces Affecting Global Integration and
Global Marketing Driving Forces
Regional economicagreements
Market needs and wants
Technology
Transportation andcommunicationimprovements
Product development costs Quality
World economic trends
Leverage
Restraining Forces Management myopia
Organizational culture
National controls
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Forces Affecting Global Integration and
Global Marketing
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GlobalIntegration
and
Global
Marketing
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