International Marketing

Dr. Elmos Konis

The ‘natural’ way to growth and internationalisation

A ‘pie’ is made

New product

The ‘natural’ way to growth and internationalisation

You enter this market

CompetitorYour share

One way to Growth: You get a bigger share of this

market

CompetitorYour share

Another way to grow:The market as a WHOLE grows

CompetitorYour share

A third way for company growth: New products

Another new ‘pie’ is made

A fourth way to company growth

Another way to grow: Internationalisation

Competitor 1Your shareCompetitor 2

The three ways to view markets. Which is best for SME’s?

• Aggregation

• Segmentation

Segments

genderincomefamily life cycleage

The three ways to view markets

• Customisation

• And a fourth, mass customisation

Which type of market should SME’s choose?

• B2B (you need a specific audience to notice you)

• Retail (you also need a specific audience to notice you!)

What should SME’s do to go international? (The basic principles of marketing still hold

true! Slide 12)• Is there a need for the product abroad?• Is there a niche?• Do we know the TM well? (stay focused!)• Who are the competitors? How powerful are they? Can there

be an advantage? (e.g. personal relations)• Would local collaborations be a better bet? Do we have a

network? Relationship marketing!• What are the difficulties (legal, political, cultural,

technological)• If you can’t beat them join them. Large companies cooperate

with SME’s• Do you have an established brand? If not, find another way.

E.g…

7

The International Marketing Mix

Political/legalforces

Economicforces

1

2

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountrymarket B

Environmentaluncontrollablescountrymarket C

Competitivestructure Competitive

Forces

Level of Technology

Price Product

Promotion Channels of distribution

Geography and

Infrastructure

Foreign environment(uncontrollable)

Structure ofdistribution

Economic climate

Cultural forces

3

45

6

7Political/

legalforces

Domestic environment(uncontrollable)

(controllable)

Consider the perception of your country in the host country

Seek information and help!

Get help!

• E.g. 09/11/2011 - ‘Small Business, Big World — a new partnership to help SMEs seize global opportunities’

The European Commission’s new strategy aimed at helping SME’s to expand their business outside the European Union:

• Strengthening and mapping the existing supply of support services• Creating a single virtual gateway to information for SMEs• Making support schemes at EU level more consistent• Promoting clusters and networks for SME internationalisation• Rationalising new activities in priority markets• Leveraging existing EU external policies

How does a small firm ‘fight its war’?

• Attack• Defend• Guerilla

The great ‘leveller’

• The internet! (Thanks Sir Tim Berners Lee for the WWW!)

Today you can be ‘born global’ and succeed even if you are small

How come?• Access to and affordability of

technology• The information highway• ‘Availability’ of innovation• Ease of travel• Ease of communication,

building contacts

Today you can be ‘born global’ and succeed even if you are small

How come? • Ease of entry in some industries

• Help from various sources• Fewer barriers to trade• Migration of talent• Today, people do more

research before buying

Inherent strengths of SME’s

• Flexibility and adaptability• Speed of response in developing markets• Niche marketing and ‘unique’ differentiation• Lower overheads• Today, the ‘quirky’ exotic image sells

Deciding Whether to Go Global

• Reasons to consider going global:– Foreign attacks on domestic markets– Foreign markets with higher profit opportunities– Stagnant or shrinking domestic markets– Need larger customer base to achieve economies

of scale– Reduce dependency on single market– Follow customers who are expanding or moving

A quick look at Cyprus

So, what just happened to Cyprus?

It’s a Free Market

We can Learn from the big boys: e.g. Demonstrate that you can think

globally! (And you understand different values)

BUT, Avoid the big mistakes of big companies!

Honda "Fitta" is a slang rather vulgar word used in Sweden, Finland, Denmark and Norway to designate the vxxxxa. Later, the Honda "Fitta" was renamed "Honda Jazz"

In most Spanish-speaking countries, we associate "Pajero" with "pajear" which is the vulgar version of "mxxxxxxxxe". It was renamed "Mitsubishi Montero"

In Portuguese-speaking countries, "Pinto" means "pxxxs“.

It speaks for itself!

‘Fly in leather’: "Vuela en cuero," which means simply "Fly naked"

Kekoukela" which means in some dialects "Mare stuffed with wax" or even "Toad stuffed with wax" . Characters changed to Kokoukole" or "Kekoukele"

which means "Happiness in the mouth"

The traditional "Finger lickin 'good“, in Chinese, the slogan became: "We will cut your fingers" or "Eat your fingers"

Puff in English slang is ‘gay’

Hhm…

No comment

So, there is room for SME’s too!

Convergence or divergence?

The importance of language

SLEPT

Industrial Structure• Shapes a country’s product and service needs,

income levels, and employment levels.

Subsistence Economies

Raw Material Exporting Economies

Industrializing Economies

Industrial Economies

Political-Legal Environment

Attitudes Toward International Buying

Government Bureaucracy

Political Stability

Monetary Regulations

Cultural Environment

• Sellers must examine the ways consumers in different countries think about and use products before planning a marketing program.

• Business norms vary from country to country.• Companies that understand cultural nuances

can use them to advantage when positioning products internationally.

Cultural Differences

When Nike learned that this stylized “Air” logo resembled “Allah” in Arabic script, it apologized and pulled the shoes from distribution.

Looking at the Global Marketing Environment

The International Trade System:Restrictions—tariffs, quotas, embargos, exchange controls, and non-tariff trade barriers.

The World Trade Organization:Helps Trade—reduces tariffs and other international trade barriers.

Regional Free Trade Zones:Groups of nations organized to work toward common goals in the regulation of international trade.

Summary of Major International Marketing Decisions

Finally, the Importance of language