PowerPoint
to accompany
Chapter 1Chapter 1
The rationale for international marketing
The rationale for international marketing
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What is international marketing?
“International marketing is the process of planning and undertaking transactions across national boundaries that involve exchange”
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Why undertake international marketing?
• Reasons for undertaking international marketing can be proactive or reactive, internal or external
• Leads to four possible reason combinations:• Proactive internal• Reactive internal• Proactive external• Reactive external
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Copyright © Pearson Australia (a division of Pearson Australia Group Pty Ltd) –97814425277201/Fletcher/International Marketing/5th edition
Internal rationalesProactive - internal
• Management desire• Unique offering• Utilise excess capacity• Size of domestic
market• Stagnant or declining
domestic market
Reactive - internal• Diversification risk• Reduce problems of
seasonality
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Copyright © Pearson Australia (a division of Pearson Australia Group Pty Ltd) –97814425277201/Fletcher/International Marketing/5th edition
External rationales
Proactive - external
• Opportunities in foreign markets
• Other sources of stimulus e.g. government grants
Reactive - external
• Unsolicited order or approach
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Stakeholders of the international firm
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Universal stakeholder model• Generalised model of stakeholder
orientation used across different economies
• Leads to concept of holistic marketing
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Driving forces in international marketing
• Market needs
• Technology
• Cost
• Government
• Communications
• Monetary framework
• World trading system
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Restraining forces in international marketing
• Political systems
• Legal requirements
• Cultural norms
• Economic development
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Drivers of growth in the international economy
• Management orientations • Ethnocentric orientation: home country
approach should be applied in every country
• Polycentric orientation: each country is different and develops its own unique approach
• Regiocentric orientation: the region is the market and region based strategies are developed
• Geocentric orientation: the world is the market with the flexibility to respond to local needs and wants
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Risks in international marketing
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• From domestic to transnational
• Domestic orientation - export to overseas agent
• Move to international marketing - commit resources to overseas market
• Take multinational stance - adapt for the market
• Move to global marketing - provide competitive global offering
Approaches to international marketing
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• From indirect exporting to FDI
• Use Australian agent
• Export to overseas intermediary
• Set up a sales office overseas
• Arrange for an overseas firm to manufacture under license
• FDI in overseas market to avoid import restrictions
Approaches to international marketing (cont. 1)
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International trade cycle
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Wheel of international marketing
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Australia’s trading environment: Export activity
• 2008 exports worth A$555 billion
• Main export partners: Japan, China, Republic of Korea, India, USA, New Zealand, UK, NZ, Taiwan, Singapore and Thailand
• Main exports: minerals, energy products, growth in knowledge intensive products (biotech, software)
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Australia’s top 10 exports 2009
A$ b
illion
s
Australian Bureau of Statistics, 2010
0
10
20
30
40
50
60
70
80
90
Coal Iron Edu Gold Travel Gas Oil Alum Wheat Beef
2008 A$b 2009 A$b
Copyright © Pearson Australia (a division of Pearson Australia Group Pty Ltd) –97814425277201/Fletcher/International Marketing/5th editionAustralian Bureau of Statistics, 2010
2008A$b
2009 A$b
% change
Coal 46.6 39.2 -16
Iron ore and concentrates 30.1 29.9 -0.7
Education-related personal travel services 15.1 17.7 17.1
Gold 14.7 15.6 6.1
Personal travel (excl education) services 11.7 12.1 4
Natural gas 9.2 7.7 -17.1
Crude petroleum 10.3 7.2 -30.7
Aluminium ores 6.5 4.8 -25.7
Wheat 3.8 4.8 25.4
Beef 5 4.3 -13.2
Australia’s top 10 exports (% change) 2009
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Australia’s trading environment: Import activity
• 2008 imports worth A$279 billion
• Major suppliers: China, USA, Japan, Singapore, Germany, Thailand, UK, and Malaysia
• Main imports – manufactured goods
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Australia’s trading environment: Service sector
• 2008 service exports valued at $107 billion
• Increasing in relative importance
• Main service exports: tourism, international education, computer software
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Australia’s trading environment: Australia-Asia trade
• Historical affinity with for Europe and USA decreasing in importance relative to Asia
• Need to expand and strengthen links with Asian countries