International Marketing Strategies

Session 1

A Businessman Travelled to Orissa

While on the business trip he visited some tourist places

He purchased some handicraft items

Back in US those items got a place in his living room

Friends who visited appreciated the craft and asked him to get some

pieces for them when he was next visiting India

Since he was a Businessman…he saw an opportunity there…

He could make a business plan from a standpoint of a dealer in US who wanted to import and distribute

the art goods.

He could make a business plan from a standpoint of

the craftsmen who wanted to export their art to US

What should the plan include?

Determination of Potential Demand

Marketing Channels to IncludeMethods of Promotion

Export Import ProceduresPhysical DistributionEconomic Feasibility

About the Course

• This course investigates various marketing strategies in a global environment.

• It is an applied case oriented course with an emphasis on logic, critical analysis and the application of alternative theories

• The course builds on prior experiences of the professionals in marketing, sociology and economic principles

About the Course

• The course will provide students with an awareness and understanding of a wide range of strategies, and a comprehension of the ways in which these strategies can be used in international marketing

• Emphasis will be on the use of research methods and case analysis in support of international marketing and management decisions.

Text Book

• Global Marketing with a Special Indian Focus by SvendHollensen & Madhumita Banerjee, Pearson Education.

Reference Material

• Articles and Research papers from various academic

Journals.

• Will be uploaded on Campus360

Evaluation Details : QUIZ (30%)

• There will be three quiz-of 15 marks each. Best two quiz will be considered for grading.

• Quiz 1- After Session 4 [Questions will be from Chapter 1, 5,6,7,8 of the text book][2nd August,2015]

• Quiz 2- After Session 6 [Questions will be from chapter 9,10,11,,12 of the text book][23rdAugust,2015]

• Quiz 3- After Session 8 [ Questions will be from chapter 14, 15, 16,17 of the text book][30th August, 2015]

Evaluation Details : Assignment(30%)

• The assignment is a comprehensive exercise to be done in groups. The detail of the assignment is as follows:

• The class is divided into a number of small teams.

• Each team has to select either an Indian Company that wants to expand its market.

• Companies selected should be listed in some exchange, so that one can access data about the Company.

• The company may or may not have any foreign business right now.

• Imagine your team has been appointed to advise the company how to go about their global business and help them prepare a “marketing plan” for this foreign operation.

• Companies selected should be from across a wide spectrum of industries- preferably only ONE company from each industry group selected.

• Certain amount of team work and understanding will be required from the participants to sort out the company selection issue.

Evaluation Details : Assignment(30%)

• The first part is written project report to be submitted by each team-length not more than 25 pages in a word file. With 1.5 spacing. Font size preferably 11 or 12.

• The marketing plan should cover all the essential aspects of an International marketing plan.

• The teams can start their project work from day 1 as it is never too early for preparing a world class report!

Evaluation Details : End Term(40%)

• The mode of examination would be open book

• Application based questions will be asked

• Small caselets/situations

INFORMATION SOURCES

• All relevant information will be shared on Campus360!

• Please check portal regularly

MARKETING• “Marketing is an organizational function

and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the

organization and its stakeholders.”

• AMA 2004

MARKETING SIMPLIFIED

INTERNATIONAL MARKETING

• BASIC STARTING POINT:– Int. marketing as part of marketing – Taking place across national borders– Main difference PLACE

• UPGRADED DEFINITION:– Main difference not in PLACE but the WAY HOW marketing processes are

implemented, managed and carried out

• IT’S EVERYWHERE:– Purely national/regional companies face several aspects of international marketing,

without being actively present abroad!

• Increased international interdependence

• Exports as one engine of growth

• Innovation and entrepreneurship as engines of economic growth

Why is international marketing gaining importance?

INTERNATIONAL MARKETING FOCUS

• Understanding & managing diversity!

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Examples of Pitfalls

Apocryphal stories of marketing blunders

19

Coke gets it wrong

• The name Coca-Cola in China was first rendered as Ke-kou-ke-la. Unfortunately, the Coke company did not discover until after thousands of signs had been printed that the phrase means “bite the wax tadpole” or “female horse stuffed with wax” depending on the dialect.

20

Coke gets it right?

• Coke then researched 40,000 Chinese characters and found a close phonetic equivalent “ko-kou-ko-le”, which can be loosely translated as “happiness in the mouth”.

• (competition in 1930s)

21

Pepsi and KFC

• In Taiwan, the translation of the Pepsi slogan “Come alive with the Pepsi Generation” came out as “Pepsi will bring your ancestors back from the dead.”

• Also in Chinese, the Kentucky Fried Chicken slogan “finger-lickin’ good” came out as “eat your fingers off.”

22

What is different about IM?

• Examples of linguistic problems

• How many languages in the world?

• Country<>language• USA - growth of Spanish

• 1/4 population Hispanic in 20 years

• language >>>culture

• translation relatively easy - culture more complex

INTERNATIONALMARKETING

CULTURE

ECONOMICS

POLITICAL/LEGAL/

HISTORICAL

ENTRYSTRATEGY

MARKETINGMIX

PRODUCT

BELIEFS

EXPECTATIONS

BEHAVIORATTRIBUTIONS

PRICEPROMOTION

DISTRIBUTION

INVESTMENT PARTNERSHIPS

MAIN DIFFERENCES: DOMESTIC vs.INTERNATIONAL MARKETING• Geography

• Culture

• Markets- widespread & fragmented

• Information

• Politics

• Governments

• Law

• Technology

MORE DIFFERENCES…• Economies- varying levels of development

• Finance – different systems and regulatory bodies

• Currency

• Business – diverse rules and cultural influences

• Control – increased difficulty controlling and coordinating across markets

Driving and Restraining Forces Affecting Global Integration

Driving Forces Restraining Forces

TechnologyCulture

Market NeedsCost

Free MarketsEconomic Integration

PeaceManagement VisionStrategic Intent

Global Strategic Action

CultureMarket DifferencesCostsNational ControlsNationalismWarManagement MyopiaOrganization HistoryDomestic Focus

DYNAMIC CHANGES IN WORLD MARKETS & POLITICS

• The rise of newly emerging markets– B.R.I.C countries

– Ex-Eastern Europe and the former Soviet Union

– EU Expansion (new members)

• Regional economic integration– EU, NAFTA and others

• Decreased trade barriers: liberalization & integration

MORE CHANGES AND INFLUENCES• The Globalization question (pros/cons)

– The WTO

• Technology – the Internet & communication industry

• Increased importance of Small and Medium-Sized Enterprises (SMEs) in international business: born globals!

ARE ALL FIRMS READY TO GO INTERNATIONAL?

• The firms readiness for internationalization: how experienced we are?

–Immature–Adolescent–Mature

• Industry Differences: –Local/Global–Growing/Decreasing–Constantly changing

Nine Strategic Windows

WE NEED PROPER PEOPLE!• Business Skills: marketing, management, finance, etc.

• Language skills

• Cultural Knowledge

• Adaptability to new situations, lifestyles and ideas

• Proper attitude

WE NEED PROPER ORGANIZATIONAL CLIMATE• Proactive/Reactive

• Risk taking (BUT SMART)

• People who like their firm being INTERNATIONAL and take that RISK and RESPONSIBILITY!

Internationalization: Orientation

Share Your Views...

Why should a firm enterinternational markets?

Reasons for Entering International Markets

Why should a firm enterinternational markets

Profitability Achieving Economies of

scale

Risk spread

Access toimported

inputsUniqueness of productor service

Marketing Opportunities

due to life cycle

Spreading R&D cost

Growth

Vodafone World Foot Print

Airtel World Footprint

Rank Company Name Subscribers

1 China Mobile 522 Mln

2 Vodafone Group 333 Mln

3 Telefonica 202 Mln

4 AmericaMovil 201 Mln

5 Telenor Group 172 Mln

6 Deutsche Telecom 151 Mln

7 China Unicom 148 Mln

8 TeliaSonera 148 Mln

9 France Telecom 133 Mln

10 Bharti Airtel 125 Mln

11 MTN Group 116 Mln

12 Mobile Telesystems 102 Mln

13 Reliance Communications 100 Mln

14 Orascom Telecom 93 Mln

15 AT&T 85 Mln

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After the acquisition of Zain’s 42 Million subscribers in 15 African countries now

coming under Bharti’s Umbrella – The Total Subscriber base of Bharti Airtel

goes to 167 million Subscribers, which puts it firmly in 5th position

Factors Explaining Internationalization

Company-specific advantages Management

Interest

Changes driving internationalization

Domestic Push

Openness

Large Size Niches

Location

Openness

Small Size

International Pull

Firm Factors

Global Factors

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Globalization

• Is defined as a process of economic integration of the entire world through the removal of barriers to free trade and capital mobility as well as through the diffusion of knowledge and information.

Globalization Index

• Economic Integration- trade, foreign direct investment, and investment income

• Personal Integration- telephone, travel, remittances, and personal transfers

• Technology integration-Internet users, Internet hosts, and secure Internet Services

• Political Integration- international organizations, UN peacekeeping, treaties and government transfers.

Globalization of Markets

• Companies must learn to operate as if the world were one large market-ignoring superficial regional and national differences

- Theodore Levitt.

International Marketing Process

• Identify the needs and wants of customers in International Markets.

• Taking Marketing MIX decisions keeping in mind the diverse environment.

• Penetrating into international markets using various modes of entry.

• Taking decisions in view of dynamic international marketing environment.

Management Orientation: EPRG Framework

Ethnocentric

Home country is superior & the needs of the home country are most relevant.

Polycentric

Polycentric- each country is unique and therefore each country should be targeted in a different way

Regiocentric

the world consists of regions. The firm tries to standardize its marketing program within regions but not across them.

Geocentric

the world is getting smaller and smaller. The firm may offer global product concepts with local adaptation (Glocal) or the firm may offer standardized products

mridula@iift.ac.inFor Feedback, Questions and Discussions contact: