Marketing in SME’s and MNE’s. A Case Study: the Celtic Tiger Economy Prof. Gavin K. L. Davis – BBS MBS MMII

Marketing in SME’s Marketing in SME’s and MNE’s. and MNE’s.

A Case Study: the Celtic A Case Study: the Celtic Tiger EconomyTiger Economy

Prof. Gavin K. L. Davis – BBS MBS MMIIProf. Gavin K. L. Davis – BBS MBS MMII

Ireland in EuropeIreland in Europe

Previously called the “Basket Previously called the “Basket Case of Europe”Case of Europe”

Unemployment rates 16% (Avg 8%)Unemployment rates 16% (Avg 8%) Ireland Population just 1% of EUIreland Population just 1% of EU GDP 1.45% of EU 15 (Gross GDP 1.45% of EU 15 (Gross Domestic product)Domestic product)

Trade mainly with the UKTrade mainly with the UK Joined the EU in 1973Joined the EU in 1973


Reasons for the BoomReasons for the Boom

Many economists credit Ireland’s low Many economists credit Ireland’s low Corporation tax as the reasonCorporation tax as the reason

Transfer payments (4% GNP)Transfer payments (4% GNP) Membership of EU opened up marketsMembership of EU opened up markets The EU aid was used to increase The EU aid was used to increase investment in education and investment in education and infrastructureinfrastructure

Ireland became attractive for Ireland became attractive for foreign investors (FDI)foreign investors (FDI)


Reasons for the BoomReasons for the Boom


Transfer PricingTransfer Pricing


International MarketingInternational Marketing

Changing MarketplaceChanging Marketplace International marketing occurs when International marketing occurs when firms conduct transactions across firms conduct transactions across bordersborders

Improves Marketing Share and ProfitsImproves Marketing Share and Profits Domestic Marketing Strategies cannot Domestic Marketing Strategies cannot be used internationally be used internationally

Strategies should fit the unique Strategies should fit the unique characteristics of each characteristics of each international market international market


Investigate:Investigate: Trade system regulations and Trade system regulations and restrictionsrestrictions

Marketing objectives and policies Marketing objectives and policies before going overseasbefore going overseas

Mode of entryMode of entry Exporting/Joint venturesExporting/Joint ventures Licensing - firms allow other Licensing - firms allow other businesses to use the manufacturing businesses to use the manufacturing process, trademark, patent, trade process, trademark, patent, trade secret, or other items of value for a secret, or other items of value for a fee or royaltyfee or royalty

Entering a new MarketEntering a new Market


BCG Growth-Share MatrixBCG Growth-Share MatrixBoston Consultancy Group developed this Boston Consultancy Group developed this matrix to help firms entering new matrix to help firms entering new marketsmarkets

Used for Companies large enough to be Used for Companies large enough to be organised into Strategic Business organised into Strategic Business Units (SBU) Units (SBU)

Displays the market growth rate vs Displays the market growth rate vs market share market share

Market Share = Firm’s Sales / Total Market Share = Firm’s Sales / Total Market SalesMarket Sales

This method helps businesses allocate This method helps businesses allocate resources to different SBU’sresources to different SBU’s


BCG Growth-Share MatrixBCG Growth-Share Matrix

Cash Cow: a business unit that has Cash Cow: a business unit that has a large market in a mature, slow a large market in a mature, slow growing industry. Requires little growing industry. Requires little investment & generates cash for investment & generates cash for other SBU’sother SBU’s

Star: a business unit that has a Star: a business unit that has a large market share in a fast large market share in a fast growing industry, requires growing industry, requires investment. May become a cash cow investment. May become a cash cow in the futurein the future


BCG Growth-Share MatrixBCG Growth-Share Matrix Question Mark: Business unit that Question Mark: Business unit that has a small market share in a high has a small market share in a high growth market. They require growth market. They require resources to grow in the market but resources to grow in the market but success is unknownsuccess is unknown

Dog: Small market share in a mature Dog: Small market share in a mature industry. May need a lot of cash industry. May need a lot of cash but ties up capital. Unless it has but ties up capital. Unless it has some strategic purpose, a dog some strategic purpose, a dog should be liquidatedshould be liquidated


BCG Growth-Share MatrixBCG Growth-Share Matrix


BCG ofBCG of


Playstation 3Columbia Pictures

MP3

Playstation 2

P.E.S.T.E.L. FrameworkP.E.S.T.E.L. Framework

PoliticalPolitical: Worldwide, European : Worldwide, European and Government directivesand Government directives

EconomicEconomic: Funding mechanisms : Funding mechanisms and streams, internal funding and streams, internal funding models, budgetary restrictions, models, budgetary restrictions, income generation targetsincome generation targets

SocialSocial: General lifestyle : General lifestyle changes, changes in changes, changes in populations, distributions and populations, distributions and demographics demographics


P.E.S.T.E.L. FrameworkP.E.S.T.E.L. Framework

TechnologicalTechnological: Major current : Major current and emerging technologies, and emerging technologies, research or administration research or administration

EnvironmentalEnvironmental: Local, national : Local, national and international environmental and international environmental impacts, outcomes of political impacts, outcomes of political and social factors and social factors

LegalLegal: European and national : European and national proposed and passed legislation proposed and passed legislation


Internal Assessment Internal Assessment of the Organisationof the Organisation

StrengthsStrengths A distinctive A distinctive competencecompetence

Location advantagesLocation advantages TechnologyTechnology Economies of ScaleEconomies of Scale Cost AdvantagesCost Advantages Proven ManagementProven Management Financial ResourcesFinancial Resources

WeaknessesWeaknesses No Strategic No Strategic DirectionDirection

Weak ImageWeak Image No R&DNo R&D Lack of MgtLack of Mgt Poor recordPoor record Competitive Competitive DisadvantageDisadvantage

Competitive Competitive pressurepressure


External Assessment External Assessment of the Organisationof the Organisation

OpportunitiesOpportunities Additional Additional customerscustomers

Entering a new Entering a new marketmarket

Diversifying Diversifying businessbusiness

Weaknesses of Weaknesses of othersothers

Expanding ranges of Expanding ranges of products and/or products and/or services offeredservices offered

ThreatsThreats Entry of Entry of competitorscompetitors

Growing SubstitutesGrowing Substitutes Government PolicyGovernment Policy Vulnerability to Vulnerability to Economic pressuresEconomic pressures

Power of customersPower of customers Power of suppliersPower of suppliers DemographicsDemographics


SWOT Analysis ofSWOT Analysis of

StrengthsStrengths ……………………………….. ………………………………..

Opportunities Opportunities ……………………………….. ………………………………..

WeaknessesWeaknesses …………………………………… ……………………………………

ThreatsThreats …………………………………… ……………………………………


BrandingBranding

Brand is the visual, emotional, Brand is the visual, emotional, rational, and cultural image that you rational, and cultural image that you associate with a company or a product associate with a company or a product

Makes your product selection easierMakes your product selection easier The fond memories of childhood and The fond memories of childhood and refreshment that people have when they refreshment that people have when they drink Coke is often more important drink Coke is often more important than a little bit better cola taste than a little bit better cola taste

When you think of…………….When you think of…………….


BrandingBranding

Michael Jordan, “Just do it”Michael Jordan, “Just do it”

Reliable, sporty, compfortableReliable, sporty, compfortable

Unreliable, bad quality, unsafeUnreliable, bad quality, unsafe

Unhealthy/healthy, “I’m lovin’ Unhealthy/healthy, “I’m lovin’ it!”it!”


Developing a BrandDeveloping a Brand

Start with your target marketStart with your target market Age, Sex, Spending habits, price Age, Sex, Spending habits, price elasticityelasticity

Communicate your Unique Selling Communicate your Unique Selling Proposition (USP)Proposition (USP)

Look at your competitorsLook at your competitors Are your customers labour intensive?Are your customers labour intensive? What emotional benifits do they What emotional benifits do they expect?expect?

What stage is the market at?What stage is the market at?Prof. Gavin K. L. Davis – BBS MBS MMIIProf. Gavin K. L. Davis – BBS MBS MMII

New Product Life-CycleNew Product Life-Cycle


BEST Global Brands 2006BEST Global Brands 2006


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Documents

Marketing in SME’s and MNE’s. A Case Study: the Celtic Tiger Economy Prof. Gavin K. L. Davis – BBS MBS MMII