Professional Documents
Culture Documents
By Sunil Pathak
International Marketing
International Marketing is the performance of business activities that direct the flow of a company's goods and services to consumers or users in more than one nation for a profit.
International Marketing is the making of goods, Services and Information across Political boundaries. It Includes Planning Promoting Distributing Pricing
Global Marketing
Marketing Practices vary fro country to country Each Person is unique and Each Country is Unique Customers,Competitors,channels of Distribution and available media are different. Global Localization
Why go International?
Market Saturation Emergence of New Markets Globalization of Markets Economics of Scale Safety net during business downturns Save labor costs More Profit
Entry Strategies
How Many Markets to Enter Water Fall Approach Sprinkler Approach Deciding Which Market to Enter Developed versus Developing Markets Regional Free Trade Zones
Indirect export
The market-entry technique that offers the lowest level of risk and the least market control is indirect export, in which products are carried abroad by others. The firm is not engaging in international marketing and no special activity is carried on within the firm; the sale is handled like domestic sales.
Direct export
International sales representatives local representatives Independent local distributors
Creating a fully owned commercial subsidiary to have a greater control over foreign operations. (In most cases, the commercial subsidiary will be a joint venture created with a local firm to gain access to local relationships.)
Foreign manufacturing
Transportation costs may be too high for heavy or bulky products Custom rates or quotas on imports can render products non-competitive Government preferences for local products can prevent entry in the foreign market
Conti
Licensing-A variety of Contractual agreements are encompassed in licensing, whereby an MNC marketer makes available intangible assets such as Patents, Trade marks and Company name to foreign companies in return for royalties or other forms of payment.
Joint Venture
Foreign investors join with local investors to create a joint venture company in which they share ownership and control. In India Tata AIG Birla Sun life HDFCSLIC A joint venture may be necessary or desirable for economic or political reasons.
Wholly-Owned subsidiary
MNCs may also establish themselves in overseas markets by direct investment in manufacturing or assembly subsidiary. Because of the volatility of worldwide economic, social and political conditions, these wholly-owned subsidiaries are the most risky form of overseas involvement.
Political risks
Risk of non- renewal of import and exports licenses Risks due to war Risk of the imposition of an import ban after the delivery of the goods Surrendering of political sovereignty Changes in the policies of the government
Others Risks
Cultural differences e.g., some cultures consider the payment of an incentive to help trading is absolutely lawful Lack of knowledge of overseas markets Language barriers Inclination to corrupt business associates Legal protection for breach of contract or nonpayment is low Natural risk due to the various kinds natural catastrophes, which cannot be controlled
1)The European MNCs followed the Multinational strategies Focuses primarily on one of the different means national differences to achieve most of its strategic objectives. Focus is on revenue side, by differentiating their products & services in response to customer needs, industry characteristics & Govt. regulations. Subsidiaries depend on local-for-local innovations, a process to identify local needs and use its own resources to respond to those needs
Conti..
Good for high local responsiveness & where cost-reduction pressures are low. Products are consumable items where taste and flavor are culture related. The weakness in this strategy is that due to the stand-alone philosophy there is little cross-fertilization of learning and innovation.
Conti..
Reebok came to India in 1995, it forged alliances with health clubs and fitness centres to create brand awareness. When the retail market matured. Reebok changed focus. Says Subhinder Sing Prem, MD, Reebok India, On the retail front, we went about opening up new markets beginning with metros and large cities, we swiftly moved into tier II and III towns. To further establish its brand, Reebok signed up Indian cricketers, while Nike continued showing its international advertisements in Indian media. Today, Reebok has a exclusive retail presence through 400 plus outlets, second only to Bata, while Nike lags behind.
Conti..
When Hyundai, with a name prone to mispronunciation and virtually no global heritage, entered India in 1998, it signed up Shah Rukh Khan to educate the consumers about the brand. Behind the scenes, the company resorted to extensive market studies and technical camps before coming up with its first offering, Santro, a hatchback with tall boy design. And it had chosen its market well, starting with the small car. To date, Hyundai has stayed true to its strategy and played by the conventional Indian market rules tailored to suit its specific targets
Conti..
Levis chose to play it safe by using the multibrand outlet route, but Lee chose to go it alone and set up exclusive showrooms.
Conti
Impact1.Money Flow 2.Income to Government 3.Job Opportunity to youngsters 4.Recognisation from the world community.
Michael Porter
Michael Porter's famous Five Forces of Competitive Position model provides a simple perspective for assessing and analyzing the competitive strength and position of a corporation or business organization.
Conti..
Porter's five forces Existing competitive rivalry between suppliers Threat of new market entrants Bargaining power of buyers Power of suppliers Threat of substitute products (including technology change)
Porters Model
Module 2
Conti..
Several best practices in product development evolved through the 1980s and 1990s. By 2000, it had become widely accepted that highly effective product development included co-location of cross-functional teams to facilitate close collaboration among engineering, marketing, manufacturing and supply-chain functions.
Global Product Companies are building their Global Product Development capabilities today for any of four reasons: 1) Lower Cost Many companies strive to reduce PD operating costs by redistributing activities to take advantage of labor arbitrage or to access more affordable capabilities. There is a huge pool of engineering talent in low-cost regions such as China, the Czech Republic, India and Vietnam and in medium-cost nations including South Korea, Hungary, Poland and Taiwan.
We consider "low-cost to be 10% to 20% of the equivalent engineers salary in the United States, and medium-cost to be 20% to 50% of U.S. wage rates.
Conti..
2) Improved Process Many engineering managers can recall the key lesson learned from both the 1980s emphasis on design for manufacturing (DFM) and the 1990s emphasis on time to market (TTM).
3)Global Growth Locating some Product Development activities in selected international locations can give companies access to critical information about markets in those regions. By using local engineers, companies make direct connections with potential new markets.
Conti..
4)Technology Access Companies are using Global Product Development to develop integrated Product Development processes that include engineers in regions where critical new technology has been developed and where technical experts reside. This move from cost to growth and innovation has been a major shift in stated Global Product Development objectives over the past two to three years.
Competitive Situation
Product Strategies
What Is a Product ?
Product: A bundle of attributes The Total Product
Tangible attributes: materials, size, weight, design, packaging, performance, comfort Intangibles: brand image, styling, other benefits (installation, delivery, credit, warranty, after-sale service, return policy)
Product Uniqueness
Type of Product
Firms International Experience Product Adaptation - Upon Entry - After Entry Product Adaptation - Upon Entry Promotion Adaptation - After Entry - Positioning Promotion Adaptation - Packaging/Labeling Positioning - Promotional Approachh Packaging/Labeling
Entry Scope
Source: S.T. Cavusgil, Shaoming Zou, and G.M. Naidu. Product and Promotion Adaptation in Export Venturs: An Empirical Investigation, Journal of International Business Studies 24, no 3, (1993,485.
25 20 15 10 5 0
After Before
Shapes
Fragrances
Packages
Targeting Positioning
Brands
Global brand Tiered branding Cobranding Brand extensions
Brand Positioning
Perceived fit between a particular product offering and the needs of target market Positioning is defined relative to:
competitive offerings consumer needs
Positioning Strategy
Attribute or Benefit Quality and Price Use or User
Benefits of Standardization
The main criteria for international standardization are: Improvement in universal technical communication and mutual understanding; Facilitation of international exchange of goods and services; Removal of technical barriers to trade; Transfer of technology.
Benefits of Standardization
Product standardization
Although there is increasing demand for local variety as economic growth takes place and as anti-globalization sentiment spreads, global products and brands are usually standardized in some ways. Global product examples Gillette razor blades Sony television sets Benetton sweaters Regional products and brands are unique to a particular trading region Hondas European car model Concerto P& Gs Ariel and Vizir in Europe
Enhanced Customer Preference (no surprises) Global Customers (mobility) Global Segments (convergence) Time to Market
Centralized R & D
Global Brands
GLOBAL BRANDS ARE BRANDS ASSOCIATED WITH GLOBAL PRODUCTS WHICH ARE WELL KNOWN IN ALL MAJOR MARKETS OF THE WORLD. Ex's: SONY, MERCEDES-BENZ, MICROSOFT, COCA-COLA. THE TYPICAL MULTINATIONAL FIRM HAS A PORTFOLIO OF BRANDS, SOME OF WHICH ARE GLOBAL, SOME ARE REGIONAL, AND SOME LOCAL ONLY.
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