Marketing and communication in International business www.east-invest.eu
me Model year: 1977 Study : BSc in Economics, University of Tirane MSc in International Business, University of Vienna ongoing PhD Management and Organization, Vienna Founder of the association Kulturenreich Vienna (2012) Founder and owner of Köstinger Consulting Vienna, Austria Over 15 years of international experience in consulting and industry, among others as collaborator of well known Austrian and German companies. Over 10 years working and living internationally. Rich experience in project management with various donors, specialized in EuropeAid projects Certified EU Project Manager–ManagEUr Certified Trainer for adult education WIFI Austria Accredited export consultant- WKO Austria for the following countries Albania, Italy, Kosovo, Macedonia, Montenegro Lecturer at different universities and training institutes in Austria Lecturer at WIFI international and WIFI Austria SME consultant and trainer for different CEE Countries firstname.lastname@example.org
If I am selling to you I will speak English, but if you are selling to me dannmüssenSie Deutsch sprechen! Willy Brandt 4th Chancellor of West Germany 1969 to 1974
relevance • everybody can buy and read a marketing book – theory …………. • 3 hours is a very very short time to teach a SME global marketing • BUT enough to give you one skill to take with (….or three skills) • smth you will need on your export journey www.east-invest.eu
take away skills • SWOT • SMARTER Objectives • Marketing-mix • A lot of questions and exercises to make you think www.east-invest.eu
whytointernationalise - SME ? • increase sales and profits • develop economies of scale in manufacturing, marketing or distribution • faster growth • reduced local marked dependence • orders from overseas • decide to internationalize when national market has reached maturity • follow their clients who have moved abroad • seek lower cost resources like skilled labour or low cost labour and low cost land • the practice of doing business abroad makes them achieve innovative ideas about products, services and business systems improving thus efficiency and effectiveness • benefits for domestic economy
where are you on the export journey? • THINKING about exporting • Thinking about R&D, operations, people, export finance, marketing and sales, strategy, markets • PREPARING to export • Preparing your R&D, operations, people, export finance, marketing and sales, strategy, markets • GROWING your exports • growing your R&D, operations, recruitment strategies, export finance, marketing and sales, strategy, markets
purpose of a export/int. marketing plan • The international marketing plan is based on a firm´s mission -purpose of the business- and vision-where we want to go- • Developing an international marketing plan is the systematic process involving the assessment of market opportunities combined with the internal resources, the determination of marketing objectives, and the plan for implementation of the international marketing mix. • The plan describes all the marketing activities that the firm should perform during a specific time(1-3 years)
export/ international marketing plan • like a map to a traveller: • where we are • where we want to go • the distance and time to cover • the obstacles on the route • what is required to get there • how to get there • ex-post - how far we have travelled
export /international marketing plan-EMP Export plan/ export marketing plan/ export marketing concept /international marketing plan • Similar to a business plan -focus in SWOT in the global arena • Sometimes extension of a business plan • Business plan –focus on overall picture of the future of the company • Export plan- focus on international markets; used for the development on an international scale • Both give company more credibility with investors
structure of a international marketing plan • Initialy- simplified export concept plan • an informal proposal of what you want to achieve and how you will make those goals a reality • Latter stage -more formal export plan • will probably be required by your bank, financial institution • possible business partner to understand what you are trying to do and how their assistance will help achieve that vision
INTRODUCTION (overview of the firm, main products, target country, main target markets, and primary entry strategy) • SITUATION ANALYSIS • Company Analysis; Organization’s Assets and Skills • Market Analysis (Business Environment analysis; Size and Extent of Demand; Product Category Stage of Product Life Cycle; Structure of the Industry; Competitor Analysis (in country of investment)) • SWOT ANALYSIS • Internal Company S&W ;External Market O&T; Implications of SWOT Analysis • OBJECTIVES should follow from SWOT • International Objectives ;Market Objectives • RECOMMENDED MARKETING STRATEGY • Target Markets Identification and Segmentation Strategy ;Market Positioning; Market Entry Strategy • MARKETING MIX STRATEGIES AND TACTICS • Product/Service Strategy ;Place Strategy; Price Strategy Structure; Promotion Strategy; Partner strategy • PLANNING BUDGET • Planning Assumptions; Forecast Sales (and Market Share) and Costs (Capital, Operating, Marketing, etc.);Forecast Profitability (or Break Even Analysis) ;Sensitivity Analysis (incorporating contingency issues) • IMPLEMENTATION AND CONTROL • Formal Project Plan for Implementation of Recommendations :Monitoring of Action Plan; Formal Contingency Plans • BIBLIOGRAPHY/REFERENCES
where are the competences of the firm and how should they be utilized internationally?
SWOT for internationalization Internal- Strengths( strengths and core competences) & Weakness ( to be improved) External – Opportunities ( how big is the pie?) & Threats ( can we compete in the EU?)
match transform transform To find the right match between internal and external analysis i.e where in the global market can we use our special competencies
Internal AnalysisStrengths& Weaknessfrom inside your company Product / service / market Competitive product / USP Competitiveness Market Segment Market shareReasons to buy Financial Reputation in your field of expertise Competitiveness of the firm Development of profit / loss Cash flow / liquidity, own capital Structure of the company and of the management Management competence Core competences Company targets Business processes Innovative degree, R&D Human resources Nr of staff and international experience Education , qualification, languages, reputation Flexibility, mobility Free capacities
External AnalysisOpportunities and Threats from outside Target market Political (corruption, conditions, budget, patents) Economic (BIP, exchange, customs, tax, inflation) Socio-cultural (distance, language, time, climate) Market size Risk Country Rating ,Credit risk Financial crisis Branch ,Staff Competition Competitors in market segment Distribution channels of the competitor Own production Comparison
pause for thought HowdoesyourcompanySWOT ( toexport in the EU) looks like?
marketingobjectives in targetmarket These objectives should cover the following: • What product/service market am I actually in? • Where is my current market? • Who are my existing customers? • Who are my current competitors? • What advantages do my products have over the competition? • Which are my target countries? • How will I distribute my products there? • What will my customers’ needs and expectations be?
the Country country, or countries, with the highest potential, lowest risk and relative ease of entry • similar to the home market ? • speak the same language as the home market? (as English is the language for business, a country where English is freely spoken could be the first target market ) • similar culture or business practices ? • geographically close which will cut down on the logistics costs ? • a banking system that is easy to use ? • similar rules, regulations and laws as the home country?
the Customer prospective customers and how to meet their needs: • individuals or organisations? • where are they located? • what is their income/turnover? • how old are they? male or Female? young or old? • their life styles? • purchasing patterns? • cultural issues of each country have to be considered
the Contact impossible for a SME trying to sell their product in a foreign country without any help of contacts within the target market • Exporting through a distributor • Exporting through an agent • Through a retailer • Have the product manufactured under license • Setting up a joint venture with a local company • green field site and manufacturing locally, but with total control from the home country • selling directly to the customer via the internet
marketingobjectives in targetmarket--SMARTER • They should lead to sales- Otherwise set differing marketing objectives Specific Measurable Achievable Realistic Timetable Evaluate Re-evaluate
SMARTER goals explains what are you going to do when and how your are going to do it! Often, objectives will be defined in terms of quantity (volume of units) or value (euros) of goods sold over a given time period ( short-term 1 - 3 years; long-term 4 - 5 years and longer)
market objectives • define for a particular overseas market • which market segment(s) should the firm focus its limited resources • SME usually cannot satisfy the needs and requirements of each segment equally well • From an examination of these different needs, it will become apparent which products and services within the company’s portfolio will be the most attractive to these market segments
should not containwords such as: • by • try • should • would • shortly • by the end of the year
Bad written objective - not SMARTER : I would like to sell agricultural products in Austria and/or to buy Austrian products: don’t understand: • what? • when? • how?
SMARTER • Setting your export objectives and finalizing the remaining components of your export plan may serve as a reality check: • Do you have the resources and competences necessary to accomplish the objectives? i.e Increase the number of exports partners of salvia to the German speaking area from now (t0) 1 to 4 in (t3) Increase of exports volumes of salvia to Austria from now (t0) 45ton to 85ton in ( t3) three years Are these realistic?
pause for thought Write your SMARTERgoal
relevant marketscreeningcriteria b2c markets Demographic: age , income, occupation Psychographic: lifestyle, preferences Geographic: countries, regions Behavioural: heavy, medium, light users b2b markets Demographic: size of firm, type of industry Economic: buying power of customers Geographic: region (WE, EE, far east, north America, country or area in country) Customer type: end customer, middlemen, OEMs Original equipment manufacturer
market screening and market selection Total market Segmentation/ screening Selection of target market/ country Positioning in target market/ country relative to competitors
The international market Segmentation/ Screening Process – an example of theproactive / systematicapproach Svend Hollensen 2011
transnational clustering of the WE market Svend Hollensen 2011
competitoranalysis • you will discover your company´s competitive advantage- (the reason customers do business with you) • by observing the actions of your competitors you might learn more about your market For example does a successful competitor offer reduced prices in a specific market? If so, what might this tell you about the markets spending habits? • avoid the costly mistake of selecting a target market without adequate demand for your offer (red ocean) market is saturated with capable competitors • redirect your efforts toward something that will generate more profit with the existing resources ( blue ocean)
the Competition who you will be competing against in the different markets • How many competitors are there in each market? • Who are your major competitors in each market? • How big each competitor is? - What is their advantages and disadvantages over your business? - How do you intend to compete with their advantages? • How do you compare with competition re: - Price – Distribution - Reputation and image - Quality • Which customers could switch to you? • Who are your main competitors’ main customers? • Which customers do you want to gain? • Analyse public information on your competitors on – Websites - Press releases - Brochures and literature – Exhibitions - Industry reports • Monitor competition promotional activities i.e. – Advertising - Price promotions - New product launches - Recruiting drives - Opening of new shops or dealerships or appointment of new agents
Blue Ocean Strategy creating new markets avoid the competition create new demand levered to the direct relationship between benefits and costs red ocean vs blue ocean Red Ocean Strategy • competition in the existing market • beat the competition • use the existing demand • direct relationship between benefits and costs
blue Ocean • Cirque du Soleil (opera, ballet, circus without animals) • Nintendo • Nespresso • Geox • ….
development of themarketing mix You game plan to achieve your marketing objectives internationally • The heart of the marketing plan • Should create a competitive advantage • Should match customer needs and company resources • It should include: 4Ps( 5Ps) forproductsproduct, price, promotion, place, partners 7Ps for services product, price, promotion, place, people, process, physical evidence
product -decision A product or service offered or performed by a company, capable of satisfying customer needs • what good or services to be offered • new product development ( technology and taste change) • also brand names, guarantees, packaging and accompanying services
USP- Unique Selling Proposition The unique selling proposition (USP) or unique selling point, or unique selling product is the proposition you make to the customer to buy your product, for a specific benefit that is unique!
Nicotinell” For the gradual smoking cessation in nicotine dependence” • Head & Shoulders: "You get rid of dandruff“ • Domino's Pizza: "You get fresh, hot pizza delivered to your door in 30 minutes or less—or it's free.“ • Fly pegasus : "We are the low-fare airline“ • AUA „Connecting East and West (coverage) withquality, in time andwith time management“ • TOMS shoes „We give a new pair of shoes to a child in need for every pair you purchase”
what is your USP ? de luxe model