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8/6/2019 Foundation Mod 1
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International
Marketing
By
Prof Srikanth Venkataswamy
Global Perspective
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Global Marketing: An overview
Module-1
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What Is International marketing?International marketing is the process of
focusing the resources and objectives of acompany on International opportunities.
Marketing is a set of concepts, tools,theories, practices & procedures andexperience.
Together these elements constitutes a
teachable and learnable body of knowledge.
Introduction to Global Marketing
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International Marketing (contd)
International Marketing consists of finding
and satisfying global customer needs better
than competition, both domestic and
internationaland of coordinating marketing activities
within the constraints of global environment
The task of responding to uncontrollable factors in the
firms environment.
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Marketing In the new Millennium-
Challenges and Issues
1. Seamless Global society2. Basis For competitive advantage
3. Business at the speed of thought
4. Virtual Enterprises
5. Customer: Co-producer of products and
services.
6. Customer: A warehouse of information
7. The Death of business and consumermarketing
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Marketing In the new Millennium-
Challenges and Issues, Contd
8. The role Of Distribution Channels
9. The Poor as Market Segment
10.Environment Protection11.Diversity and Convergence Coexist
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Marketing In the new Millennium-Challenges and Issues
1. Seamless Global societyThe physical Distance, information and Knowledge,has now become redundant.
Emergence Of global Society and universal values.
Universal value relates to concept of time.Which isan indicator of opportunity.
By this More and more customers are willing toaccept global products and services.
Further, emergences of these values has altered
concept of space,time and Location.
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Marketing In the new Millennium-
Challenges and Issues
2. Basis For competitive advantage
Technological changes has lead to significant shiftsin Competitive leadership.
The present Day environment, Knowledge
management has become crucial armour for
competitive survival.
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A = Your point of differentiation. Some questions to
consider:
How sustainable is this?
Is this really as large as wed like it to be?
How can we make it larger and more sustainable?
B = Points of parity. Some questions to consider:
What do we want to do with these?C = Competitors points of differentiation. Some
questions to consider:
Is this area growing?
How difficult would it be for us to move these to B or A?
D = Opportunity. Some questions to consider:
How do we go after this so we move it into A and not B?How do we prevent our competitors from moving it to B
or C?
Why is this space so large and A so small?
The only way to do this analysis in a useful way is to get
the information from your target market. Dont
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Marketing In the new Millennium-
Challenges and Issues
3.Business at the speed of thought
The marketing Challenges Lies In enablingCustomers To overcome their resistance to change.
The Product Life Cycles will Be far shorter.
Interactive technologies will eliminate several roles
in marketing of products and services.
Products will be further standardized and hence theopportunities to differentiate will nolonger exists.
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Marketing In the new Millennium-
Challenges and Issues
4. Virtual EnterprisesIn this era of Digital Darwinism and virtualreality, size and location of an enterprisewill have a very little or no role to play.A Virtual Enterprise (VE) is a temporary alliance ofenterprises that come together to share skills orcore competencies and resources in order to betterrespond to business opportunities, and whosecooperation is supported by computer networks.
It is a manifestation of collaborative networksThe enterprise is more of an action, ratherthan an institution.
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Marketing In the new Millennium-
Challenges and Issues
6.Customer: A warehouse of information
In this internet and speed age, the customers has
access to huge bank of information from various
national and global sources.
Hence the era of standardization is today replaced
by mass customization.
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Marketing In the new Millennium-
Challenges and Issues
7.The Death of business and consumer
marketing
The differentiation between business and
consumer marketing, urban & rural
marketing and domestic & global marketing
will get more blurred.The physical difference between the
product & services will cease to exist.
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Marketing In the new Millennium-
Challenges and Issues
8.The role Of Distribution Channels
The conventional dealer and distributors will no
longer Viable.
Service and customized will be the order of the day.
Global SCM will emerge and converge.
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Marketing In the new Millennium-
Challenges and Issues
9.The Poor as Market Segment
Globalization has widened the gap between
the rich and the poor.
Poor people world wide are now a large
segment which get not be ignored.
This segment offers more attractiveopportunity than the rich segment.
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Globalization Of The Economy
Depends on: The role of human migration,
International trade,
Movement ofcapital, and Integration of financial markets
http://en.wikipedia.org/wiki/Migrationhttp://en.wikipedia.org/wiki/Tradehttp://en.wikipedia.org/wiki/Capitalhttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Capitalhttp://en.wikipedia.org/wiki/Tradehttp://en.wikipedia.org/wiki/Migration8/6/2019 Foundation Mod 1
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Globalization: Globalisation of the world economy has
been especially pronounced after WorldWar II and the Great Depression of the1930s in the USA.
The rise in the volume of trade betweenthe developed and the developingcountries,
Increase in cross-border transactions, rise
in immigration and Transfer of technology are some of the
key issues of globalisation
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Pe
rcent a
ge
of
Ado
pters
Time of AdoptionEarly Late
In
novat o
rs
Early
Adopters
Early Majority
2.5%
13.5%
34% 34%
16%
Laggards
Late Majority
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Levis Eco Jeans Promotes
Sustainability
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Bio Fuels
Biodiesel
Bioethanol
http://www.foss.dk/Solutions/BusinessAreas/Biofuel/Biodiesel.aspxhttp://www.foss.dk/Solutions/BusinessAreas/Biofuel/BioEthanol.aspxhttp://www.foss.dk/Solutions/BusinessAreas/Biofuel/BioEthanol.aspxhttp://www.foss.dk/Solutions/BusinessAreas/Biofuel/Biodiesel.aspx8/6/2019 Foundation Mod 1
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Marketing In the new Millennium-
Challenges and Issues
11.Diversity and Convergence CoexistMarkets are diverse. The diversity is not just Based
on Demographic & geographical location of the
customers, but also on their response in changesepically to technological changes for which
converges of needs is also a fact.
It is not only product related but will based on the
organization's culture, systems and hence quality.
Ex- long term vision ,Financial soundness, top-end
technological development, Investment ,Innovation
and new product & market development.
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Marketing Management Concepts or
Philosophies
There are Five Marketing Managementconcepts:
1. Production Orientation Concept
2. Product Orientation Concept3. Sales Orientation Concept
4. Market Orientation Concept
5. Societal Orientation Concept
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Market Management Concepts or
Philosophies
1.Production Orientation Concept
The philosophies that consumers will favorproducts that are available and that are
available and highly affordable and that
management should therefore focus on
improving production and distributionefficiency.
Ex Ambassador car, BAJAJ scooters
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Oldest concept in management
According to this, consumers wouldprefer those products that are widely
available and cheap
Product management done by lowcosts and mass distribution
Eg. Lenovo and Haier in China tookadvantage of cheap Chinese labour andbecame market leaders
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Marketing Management Concepts or
Philosophies
2.Product Orientation Concept
The Idea that consumers will favor products thatoffer the most quality, performance and innovate
features and that the organization to devote its
energy to make continues product improvements.
Ex- Microsoft products
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Product Orientation
Consumers go for products with superiorquality and innovative features
Product management done by increased
focus on product development and constantimprovisation eg. Nokia 3310 to 7710
30
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Sales Orientation
Consumers and businesses, if left alone, wontbuy enough of the organizations products
Aggressive push is required for promoting a
product eg. LICSergio Zyman, Cokes former VP of
marketing said, The purpose of marketing isto sell more stuff to more people more often
for more money in order to make more profit
31
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The MarketingOrientationEmphasizes on customer centered sense and
respond philosophy rather than productcentered make and sell philosophy
Reactive market orientation eg. iPodProactive market orientation eg. Sattelite
navigation systems
Total market orientation Mix of both
proactive and reactive.
32
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SocietalOrientationIt questions the marketing concept
Eg. Do Fast food chains, create national
obesity epidemic?
Society
Societal
Consumers mrktng Company
concept
33
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The Marketing Concept
Concept has chanced dramatically Past ThreeDecades
1950s To 1970s: Focus on products
The Focus was On Internal Standards and
values of the company without the customerfocus.
The objective was to persuade the potential
customer to buy the product in exchange tomoney.
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The Marketing Concept
1960s To 1980s: Focus on customer orientation
Development of marketing mix: product, price, place,promotion (4Ps)
Product
Enhancements easily matched
Price Without accompanying cost reduction is a losing tactic
Promotion and advertising
Without accompanying price, product or service advantagedoes not provide long-term success
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The Marketing Concept (2)
1990s: Product Enhancements easily matched
Price Without accompanying cost reduction is a losing tactic
Promotion and advertising Without accompanying price, product or service advantage
does not provide long-term success
Focus on customer in the context of the broader externalenvironment
Competition, government policy & regulation
Focus on stakeholder value employees, customers, shareholders, society
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The Marketing Concept (3)
Today:
Two key tasks of marketing
Focus on customer & his/her environment
Create value for consumers & stakeholder Shift towards
Focus on managing strategic partnerships
Positioning of firm in value chain to optimize value creation
Profit as a measure of success, not an end initself
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Three-dimensional structure Of international Marketing
Source: Text Edited by Stadtler & Kilger
Product Dimension
Time Dimension
Geographic Dimension
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Research &
Development
Product
Design
Process
Development
Goods
Services
After-Sale
Raw
Materials
Labor
Technology
Infrastructure
Country A
Country C
Country B
Country D
The Global Supply Chain: Intra-Firm Coordination.
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Potential opportunities
exploited by Dell Cost opportunities
Reduce facility costs
Geographical centralization andreduced inventories: Most effectivefor low volume, hard to forecastbooks, least effective for highvolume best sellers
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NatureThree major developments in global markets andThree major developments in global markets and
technologies which have brought customer totechnologies which have brought customer to
the forefrontthe forefront::
1.1. The information revolutionThe information revolution
2.2. Customer demands in areas ofCustomer demands in areas ofproduct and service cost, quality,product and service cost, quality,
delivery, technology, and cycle timedelivery, technology, and cycle time
brought about by increased globalbrought about by increased globalcompetitioncompetition
3.3.The emergence of new forms ofThe emergence of new forms of
inter-organizational relationshipsinter-organizational relationships
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Distributor Storage with
Carrier Delivery Dell inventory
Factories
Customers
Product Flow
Information Flow
Warehouse Storage by
Distributor/Retailer
D li ith P d t V i t
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Dealing with Product Variety:
Mass Customization
Mass
Customization
Mass
Customization
High
HighLow
Low
Long
Short
LeadT
ime
Cost
Customiz
ation
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U d di h
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Understanding the
CustomerCustomer demand from different
segments may vary along severalattributes
Lot size Response time
Service level
Product variety
Price
Innovation
Implied
Demand
Uncertainty
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Scope
A global Marketing can realize such advantagesonly if the management of the chainsgeographically dispersed activities areeffectively coordinated and are flexible enoughto adjust the value-adding activities throughoutthe world in response to the changes in thecompetitive environment.
Thus COORDINATION & FLEXIBILITY are
the key concepts in implementing aglobal Marketing Strategy
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Need Based Economy
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Challenges faced by the Manufacturing Sector
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A Production-Distribution System
raw materials
inventory
finished goods
inventory
work inprocess
inventory
FACTORY A
FACTORY B
(raw matl
delivery:
road, rail,sea, air
or
pipeline) (customer serviceby wholesale and
retail outlets)
small industries
rapid tech.
innovation increasing global
comptn
globalisation
of markets
Just-in-time
inventory
pressures on
pricing
pressures on
time-to-mktshorter pdt. life
cycles
stress on quality
Demanding
delivery sched.
rapid response
time-to-marketIndividual cust
omized prodn.
g y g
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Foreign Policys Global Top 20
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Challenges faced due to the
Globalization of the marketplace:
Increased competition
Rising consumer expectation
Growth of product variety, and
The convergence of consumer tastes in
disparate geographical regions
Leading to a highly integrated corporatestructure known as Global Supply
Chain.
Globalization Of The marketplace:
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Product & Services Classification
Classified As :
1. Consumer Products
2. Industrial Products
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Marketing Mix
Product
Place (Distribution)
Promotion Price
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Advertising
Direct Marketing
Personal selling
Sales promotion
PromotionMixPublicity RelationshipMarketing
Domestic VS International Marketing
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Domestic VS International Marketing
Domestic Marketing Global Marketing
1. One nation, same language andculture.
2. Transport cost is one of themajor expenses.
3. One currency
4. Market is relativelyhomogeneous.
5. Political environments andfactors are the same.
6. No problem of exchange controland tariffs
1. Many nations, Many languagesand cultures
2. Transport cost influences tosome extent.
3. Different currencies in different
countries.4. Markets are diverse and highly
heterogeneous.
5. Different political environmentsand factors in different countriesand are vital.
6. There are problem of exchangecontrols and tariffs.
Domestic VS International Marketing (contd )
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Domestic VS International Marketing (contd.)
Domestic Marketing Global Marketing
7. Data Collection relatively easy,accurate and at less cost.
8. Relative freedom from Govt.Interferences.
9. Individual company has littleeffect on environment.
10. Relatively stable businessEnvironment.
11. Chauvinism helps.
12. Uniform Financial climate
7. Data Collection a formidabletask, requiring significantly higherbudgets and personnelallocation.
8. Govt. influences business
decisions.9. Gravitational distortion by Large
companies.
10. Multiple environments, many ofwhich are highly unstable.
11. Chauvinism hinders.12. Variety of financial climates ,
procedures. to wildly inflationary.
Domestic VS International Marketing (contd )
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Domestic VS International Marketing (contd.)
Domestic Marketing Global Marketing
13. No major Legal & taxationissues
14. No major constrains inadvertisements & promotions(messages, language, costs,medium etc..)
15. Marketing costs: is minimal,Traveling, communication,Presentations
16. Business rules of the gamemature and understood
13. Legal & taxation issues notrelatively Smooth.
14. Advertisements & promotionshave to be carefully handled.(messages,language,costs,medium etc..)
15. Marketing costs: is a Variable,
16. Rulesdiverse,varied,changeableandunclear sometimes.
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Benefits of Competitiveness
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Decreasedbudget deficit
Increased competitiveness
in world market
Improved domestic
performance
High productivity of resources
START HERE
What thecustomerwants in products
and services
Capital
Technology Human
resources
Reduction
trade deficit
Increased
standard of
living
Stronger
national
security
More and better
jobs
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Challenges
WHAT MAKES INTERNATIONAL MARKETING
WHAT MAKES INTERNATIONAL MARKETING
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OPERATIONS IN A MULTI-COUNTRY CONTEXT
q Different Environments
Economic/FinancialPolitical/Legal
Social/Cultural
q Differences in Customer Behavior/MarketSegments
q Differences in Competition
q Different Marketing Infrastructures
Media
Distribution
Logistics
NEED TO:
q Adjust to These Differences
OPERATIONS IN A MULTI-COUNTRY CONTEXT
q Different Environments
Economic/Financial
Political/Legal
Social/Cultural
q Differences in Customer Behavior/MarketSegments
q Differences in Competition
q Different Marketing Infrastructures
Media
Distribution
Logistics
NEED TO:
q Adjust to These Differences
S O G
CHALLENGING?CHALLENGING?
The Three Principles of
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The Three Principles of
Marketing
CUSTOMER VALUE
DIFFERENTIATION FOCUS
K P i i l /El t f
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Key Principles/Elements of
Marketing
1. Customer Value Goal: create customer value that is greater
than the value created by competitors
Strategy: Expand or improve product and/ or service
benefits
Reduce the price
Combine these two elements
Elements of Marketing
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Elements of Marketing
Value Equation
V = Value
B = Perceived Benefits Perceived Costs
P = Price
V = B / P
Meeting Customer ReqCustomer Product Support
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Value =Quality
CycleCost
ServiceX
X
Meeting Customer Req FITNESS FOR USE
PROCESS INTEGRITY)
ELIMINATION OF WASTE
CONTINUOUS IMPROVEMENT
Product service FLEXIBILITY TO MEET
CUSTOMER DEMANDS
FLEXIBILITY TO MEETMARKET CHANGE
DESIGN & ENGG
CONVERSION
QUALITY ASSURANCE
DISTRIBUTION
ADMINISTRATION
MATERIALS
TIME-TO-MARKET
TIME-TO-MARKET(CONCEPT-TO- DELIVERY, ORDER
ENTRY TO DELIVERY)
RESPONSE TO MARKET FORCES, LEAD
TIME
(DESIGN, CONVERSION, ENGINEERING
AND DELIVERY)
Key Principles/Elements of
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Key Principles/Elements of
Marketing
2. Differentiation or CompetativeAdvantage
Goal: create competitive advantage through
differentiation Advantage can exist in any element of a
companys offer
One way to penetrate a new national market
is to offer a superior product at a lowerprice.
Competitive Advantage Through Price,Innovative Leadership & Quality
Key Principles/Elements of
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Key Principles/Elements of
Marketing
3. Focus Goal: Focus On concentration of attention &
resources On Customers
Requirement to create customer value at acompetitive advantage
A viable way for small & medium sized companiesto achieve dominant position in world market
A clear focus on customer needs & wants
Management Orientation and
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Management Orientation and
Global Marketing Different Management Orientations
in the Global Arena EPRGFramework
Regiocentric
Ethnocentric
Geocentric
Polycentric
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Stages
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Managerial Orientation
Ethnocentricity Orientation to home
country
Polycentricity Orientation to host country
Regiocentricity Orientation to a region
Geocentricity Orientation to the whole
world.
Management Orientation &
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Management Orientation &
Global Marketing
Ethnocentric Orientation:
Characteristic of domestic &international companies
Opportunities outside the homemarket are pursued by extendingvarious elements of the marketing
mix
Management Orientation &
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Management Orientation &
Global Marketing
Polycentric Orientation Characteristic of multinational
companies
Marketing mix is adapted byautonomous country managers
M t O i t ti &
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Management Orientation &
Global Marketing
Regiocentric or GeocentricOrientation:
Characteristic of global & transnationalcompanies
Marketing opportunities are pursued byboth extension & adaptation strategies
in global markets
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ForcesAffecting Global
Integration
Driving Forces
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Driving Forces1. Market Needs
2. Technology3. Cost
4. Quality
5. Communications and Transportation6. Leverage
Systems Experience
Scale Resources Utilizations Global Strategy
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Restraining Forces
1. Market Difference
2. Product Image and History
3. Management Myopia
4. Organizational Culture
5. National
Controls/Barriers to Entry
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Global Marketing An InsightAdditional Reading
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The International Marketing Task
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Political/legal
forces
Economic
forces
Competitivestructure
CompetitiveForces
Level ofTechnology
Price Product
Promotion Channels of
distribution
Geographyand
Infrastructure
Foreign environment(uncontrollable)
Structure ofdistribution
Economic climate
Culturalforces
Political/legal
forces
Domestic environment(uncontrollable)
Marketing
(controllable)
Environmentaluncontrollablescountry market A
Environmentaluncontrollablescountry market B
Environmentaluncontrollablescountry market C
ll
g
The international marketer
must deal with two levels ofuncontrollable uncertainty
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The International Marketing Task
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Political/legal
forces
Economic
forces
CompetitiveForces
Level ofTechnology
Price Product
PromotionChannels of
distribution
Geographyand
Infrastructure
Foreign environment(uncontrollable)
Structure ofdistribution
Economic climate
Culturalforces
Political/legal
forces
Domestic environment(uncontrollable)
Environmentaluncontrollablescountry market A
Environmentaluncontrollablescountry market B
Environmentaluncontrollablescountry market C
Price
Promotion Channels of
Distribution
Competitivestructure
Product
Marketing controllable
g
The International Marketing Task
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Political/legal
forces
Economic
forces
Competitivestructure
CompetitiveForces
Level ofTechnology
Price Product
PromotionChannels of
distribution
Geographyand
Infrastructure
Foreign environment(uncontrollable)
Structure ofdistribution
Economic climate
Culturalforces
Political/legal
forces
Marketing
(controllable)
Environmentaluncontrollablescountry market A
Environmentaluncontrollablescountry market B
Environmentaluncontrollablescountry market C
Competitive
structure
Economicclimate
Political/legal
forces
Domestic uncontrollables
g
The International Marketing Task
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Competitivestructure
CompetitiveForces
Level ofTechnology
Price Product
PromotionChannels of
distribution
Geographyand
Infrastructure
Foreign environment(uncontrollable)
Structure ofdistribution
Economic climate
Culturalforces
Political/legal
forces
Domestic environment(uncontrollable)
Marketing
(controllable)
Environmentaluncontrollablescountry market A
Environmentaluncontrollablescountry market B
Environmentaluncontrollablescountry market C
Structure of
distribution
Level of
Technology
Competitive
forces
Economicforces
Political/legalforces
Cultural forces
Geography and
Infrastructure
Foreign uncontrollable
g
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The process (stages) ofInternationalization
St
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Stages
1.Domestic
2.Export
3.International4.Multinational
5.Global/Transnational
St
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Stages
ALTERNATIVE STRATEGIESALTERNATIVE STRATEGIES
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International
High
Global
Co-ord
inationIntegra
tion
Low
Low HighN i l diff i i R i
Multi-National
Global Trans-National