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MARKETING

MANAGEMENT

CHAPTER 21

TAPPING INTO GLOBAL

MARKET

Guided by DR. S.V KULKARNI

PRESENTED BY:URMEE DOSHI (27)

NAINA HINGHER (32)

SANDEEP KAUR BATH (11)

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What is a Global Firm?

A global firm is one that operates in more

than one country and captures R&D,

production, logistical, marketing, andfinancial advantages in its costs and

reputation that are not available to purely

domestic competitors.

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Major Decisions in

International MarketingDeciding whether to go abroad

Deciding which markets to enter

Deciding how to enter

Deciding on the marketing program

Deciding on the marketing organization

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DECIDINGWHETHER TO GO

ABROAD

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FACTORS DRAWING COMPANIES

INTO INTERNATIONAL ARENAHigher profit opportunities

Economies of scale

Counterattack global competitors in homemarket

Customers abroad require international

service

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RISK INVOLVED

Fail to understand foreign preferences

Fail to understand foreign business culture

Lack mannersChange in commercial laws of foreign

countries

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Four Stages of Internationalization

No regular export activities

Export via independent agents

Establish sales subsidiariesEstablish production facilities abroad

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DECIDINGWHICH MARKETS TO

ENTER

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DEVELOPED V/S DEVELOPING

MARKETSDeveloping market have huge potential

Market leaders rely on developing markets to

fuel their growthUNILEVER & COLGATE generated 40% of

their business in developing markets

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Top Global Firms Based

in Developing Markets America Movil

Cemex

China Mobile CNOOC

Embraer

Gazprom

Haier

Hisense

Huawei Technologies

Infosys Technologies

KocHolding Lenovo Group

MMCNorilskNickel

Mahindra & Mahindra

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Regional Free Trade Zones

European Union

NAFTA

MERCOSUL

APEC

ASEAN

The purpose of these trade zones are not only

to remove trade barriers on member nationsbutalso to impose common external barriers

on non-members. They allow free movement

of labour and capital within the region.

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Key Developing Markets

Brazil

Russia

India

China

South Africa

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Desired Country

Characteristics for Market Entry

Rank high on market attractivenessRank low in market risk

Possess a competitive advantage

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DECIDING HOW TO ENTER THE

MARKET

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Five Modes of Entry

into Foreign Markets Indirect exporting

Direct exporting

Licensing Joint ventures

Direct investment

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INDIRECT EXPORT:There is less investment

There is less risk

Thus , it is the best way to get involved in international market.

DIRECT EXPORT: (ways)Domestic based export

Overseas sales branchTravelling export sales representative

Foreign based agents

LICENSING:

It means to get permission to use a manufacturing process,trademark etc. for a fee or royalty

A company can also enter foreign market through franchising

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JOINT VENTURES:

Ajoint venture (often abbreviated JV) is an entity formedbetween two or more parties to undertake economic activity

together. The parties agree to create a new entity by both

contributing equity, and they then share in the revenues,

expenses, and control of the enterprise.

Eg:- Procter & Gamble, Maruti Suzuki ltd. Etc

DIRECT INVESTMENT:Foreign companies buy a part or full interest in a local

company

Eg:- General Motors invested in Shanghai GM etc.

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DECIDING ON THE MARKETING

PROGRAM

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Global Marketing

Advantages

Economies of scale

Lower marketing costs

Power and scope Consistency in brand

image

Ability to leverage

Uniformity of marketingpractices

Disadvantages

Differences in consumerneeds, wants, usage

patterns Differences in consumer

response to marketing mix

Differences in brand

development process Differences in environment

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WhatMarketing Aspects Might Be

Adapted for InternationalMarketing?

Product features

Labeling Colors

Materials

Sales promotion

Advertising media

Brand name

Packaging Advertising execution

Prices

Advertising themes

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Cultural Dimensions

Individualism vs. collectivism (self worth is rootedmore in social system than individuals achievement)

Masculine vs. feminine (culture dominated byassertive males vs nurturing females)

High vs. low power distance (high power culturestends to be less egalitarian)

Weak vs. strong uncertainty avoidance (itshows how risk tolerant people are)

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Commandments of Global

Branding Understand similarities and differences in the

global branding landscape

Do not take shortcuts in brand building

Establish a marketing infrastructure

Embrace integrated marketing communications

Establish brand partnerships

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Commandments of Global

Branding (cont.) Balance standardization and customization

Balance global and local control

Establish operable guidelines Implement a global brand-equity measurement

system

Leverage brand elements

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Levels of ProductAdaptation

Production of regional product versions

Production of country versions

Production of city versionsProduction of retailer versions

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Communications

Communications adaptation

Dual adaptation

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Price Choices

Set a uniform price everywhere

Set a market-based price in each country

Set a cost-based price in each country

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What is aGray Market?

Agray marketconsistsofbrandedproducts

divertedfromnormalor authorized

distributionschannelsinthecountryofproductoriginorcrossinternational borders;dealersin

lower pricedcountriessell productsinhigher

pricedcountries

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Whole-Channel Concept for

International MarketingSeller

International headquarters

Channels between nationsChannels within nations

Final buyers

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DECIDING ON THE MARKETING

ORGANIZATION

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Global Organization Strategies

Export department (world as a single market)

International division

Global organization

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SUMMARY

Companies cannot simply stay domestic;

they need to internationalize their operations

While deciding a company needs to define itsmarketing policies & objectives

Then decide on the best mode of entry

Decide how to adapt its marketing program

Manage international marketing activity

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