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AN INTRODUCTION TO INTERNATIONAL MARKETING

Session 1

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WHAT IS MARKETING?

• Marketing Involves:– Focusing on the needs and wants of

customers– Identifying the best method of satisfying

those needs and wants– Orienting the company towards the

process of providing that satisfaction– Meeting organisational objectives

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WHAT IS INTERNATIONAL MARKETING?

• Different Levels of International Marketing– Export marketing– International marketing– Global marketing

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ENVIRONMENTAL INFLUENCES ONINTERNATIONAL MARKETING

Socio/CulturalLanguageReligion

AestheticsValues and attributesSocial organisation

Material culture

PoliticalOperational restrictions

Discriminatory restrictionsPhysical actions

EnvironmentalInfluences on InternationalMarketing

LegalLocal domestic laws

International lawHome domestic law

TechnologicalSatellite Communications

ISDNInternetWWW

The Electronic Superhighway

EconomicDeveloped economiesEmerging economies

Less developed economiesCurrency movements

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SOCIAL / CULTURAL INFLUENCES

• Coca-Cola:– 2 Litre bottles too big for Spanish fridges– Pronunciation in China – Kooke Koula

• ‘A thirsty mouthful of candle wax’

• Pepsi-Cola:– “Come Alive with Pepsi” in German translated to:

• “Come alive out of the Grave … “

• McDonald’s:– The white face of ‘Ronald McDonald’

• A white face is seen as a death mask in Japan

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SOCIAL INFLUENCES

• Emergence of a global village in which there “..will be a nationless state marked by the convergence of consumer needs that transcends political and cultural boundaries" Omahe; 2005

– 80% world population currently live in developing countries

– By 2025, 85% population will live in emerging markets– 2 out of every 5 people currently live in China and India – In the next 50 years, the African population will treble

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WORLD’S MEGA CITIES

• By 2010, 50% of people will live in urban areas

• By 2015, the top 5 largest cities will be:• Tokyo - Japan 26.4 million• Mumbai - India 26.1 million• Lagos - Nigeria 23.2 million• Dhaka - Bangladesh 21.1 million• San Paulo - Brazil 20.4 million

Source: United Nations

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ENVIRONMENTAL INFLUENCES ONINTERNATIONAL MARKETING

EnvironmentalInfluences on InternationalMarketing

LegalLocal domestic lawsInternational lawHome domestic law

EconomicDeveloped economiesEmerging economiesLess developed economiesCurrency movements

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THE LEGAL ENVIRONMENT

• 3 dimensions in the legal environment:

– local domestic law:• different in every country

– international law:• issues include piracy, treaties, patents etc

– domestic laws in the home country:• export controls, plus duty to abide by national laws in all

activities

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ECONOMIC ENVIRONMENT

• Developed triad Economies– account for 80% of world trade

• Emerging Economies– huge and growing consumer demand– government directed economic reforms– ‘dual economy’

• Less Developed Countries (LDCs)– low GDP, limited manufacturing base– infrastructure weaknesses– heavy reliance on one product/one trading partner

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WORKING TIME REQUIRED TO BUY A BIG MAC

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ENVIRONMENTAL INFLUENCES ONINTERNATIONAL MARKETING

PoliticalOperational restrictionsDiscriminatory restrictionsPhysical actions

EnvironmentalInfluences on InternationalMarketing

TechnologicalSatellite CommunicationsISDNInternetWWWThe Electronic Superhighway

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POLITICAL ENVIRONMENT

• ‘A risk due to a sudden or gradual change in a local political environment that is disadvantageous or counter productive to foreign firms and markets’

• Government actions which may constitute potential risk for the firm:– Operational restrictions

eg. exchange controls or employment policies

– Discriminatory restrictions eg. special taxes and tariffs

– Physical actions eg nationalisation, riots and war

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TECHNOLOGICAL CONSIDERATIONS

• Impact of technological advances:– Ability to gather data on markets– Management control capabilities– Operational practicalities of electronic

communication• Global access to the World Wide Web

– Est. 1.2 billion users in 2007– 17% of global population

• Importance of English language for web users

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GLOBAL COMMUNICATIONS.....

• Globally e-business;– US $10 trillion (nearly all B2B)

• HOWEVER.....– Some countries have been bypassed by

the global electronic highway– Only 10% have direct access to a pc– Only 7% have direct internet access

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DIVERSITY OF STAKHOLDER INTEREST

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THE CHALLENGES OF THE INTERNATIONAL MARKETING ENVIRONMENT #1

• Culture– Often diverse and multicultural

• Markets– Widespread and sometimes fragmented

• Data– Difficult to obtain and sometimes expensive

• Politics– Regimes vary in stability, political risk becomes an

important variable

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THE CHALLENGES OF THE INTERNATIONAL MARKETING ENVIRONMENT #2

• Governments– Can be a strong influence in regulating

importers and foreign business ventures

• Economies– Varying levels of development

• Finance– Many differing finance systems and

regulatory bodies

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THE CHALLENGES OF THE INTERNATIONAL MARKETING ENVIRONMENT #3

• Stakeholders– Commercial, home country and host

country

• Business– Diverse rules, culturally influenced

• Control– Difficult to control and co-ordinate across

markets

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INTERNATIONAL MARKETING STRATEGIESSuccess and Failure

• Failure arises from:– inability to find right market niche– unwilling to adapt products– products not perceived as sufficiently unique– vacillating commitment– assigning the wrong people– picking the wrong partners– inability to manage local stakeholders– mutual distrust/lack of respect between HQ &

management– inability to leverage ideas to all countries

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THE INTERNATIONALMARKETING STRATEGY PROCESS