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International Marketing Logistics

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  1. International Marketing Logistics IBO-05

  2. International Marketing & Logistics System BLOCK - 1

  3. Session 1 I. The nature of international marketing • Introduction to international marketing • Reasons for marketing abroad • Exporting II. Strategic thinking in international marketing 1. Competitive advantage 2. The competitive environment 3. Competition between nations 4. The value chain | | <document classification>

  4. Session 1 III. International marketing strategy 1. The five-stage model 2. International marketing planning 3. ‘What if’ analysis 4. Control and coordination | | <document classification>

  5. I. The nature of international marketing • Introduction to international marketing « International marketing consists in identifying and satisfying consumer needs abroad; better than the national and international competitors, under the constraints of the internationalization stage of the firm and the global environment. » (Nathalie Prime) | | <document classification>

  6. Key elements of the international marketing mix | | <document classification>

  7. Differences between domestic and international marketing | | <document classification>

  8. Differences between domestic and international marketing (continued) | | <document classification>

  9. Differences between domestic and international marketing (continued) | | <document classification>

  10. International marketing and exporting International marketing is more than exporting, because it involves: • Marketing products that have been manufactured or assembled in the target country • Establishing a permanents presence in the foreign country • Licensing and franchising • Sourcing components from foreign states. | | <document classification>

  11. International and multinational marketing International marketing means marketing across national frontiers. Multinational marketing means the integrated coordination of the firm’s marketing activities throughout the world. | | <document classification>

  12. 2. Reasons for marketing abroad • Economies of scale and scope • Existence of lucrative markets in foreign countries • Saturated markets in the home country • High R&D costs • International opportunities • Less competition • New trade agreements • … | | <document classification>

  13. 3. Exporting Exporting means the sale in a foreign market of an item produced, stored or processed in the supplying firm’s home country. Two kinds of exporting: passive and active | | <document classification>

  14. 3. Exporting (continued) Sources of foreign demand (passive exporting): • Non-availability of appropriate products from domestic producers • Price differentials between imported and locally supplied items; • Exotic images attaching to foreign products; • Inefficiency of local distribution systems, political disruptions, industrial action, or other factors that prevent local firms from supplying goods. | | <document classification>

  15. Exporting (continued) Reasons for active exporting: • The product has reached the end of its life cycle at home • Less competition • Easy access to major customers • Export increases turnover. | | <document classification>

  16. Example: Manchester United MUFC has more fans abroad than at home Merchandising: clothing, shoes, sports equipment Manchester United Magazine, Manchester United on Video TV Channel - MUTV … | | <document classification>

  17. II. Strategic considerations in international marketing Strategy means choosing a general direction for the firm, together with organizational designs, policies, systems and a style of management best suited for beating the competition in the field. Tactics concern practical methods for implementing strategic decisions. | | <document classification>

  18. 1. Competitive advantage The elements of competitive advantage are the critical offer, the significant operating factors and the firm’s strategic resources. Critical offer features Strategic resources  Competitive advantage Significant operating factors | | <document classification>

  19. Porter’s model of competitive advantage • Cost leadership • Differentiation • Specialization | | <document classification>

  20. 2. The competitive environment Factors: • Ease of entry by competitors into the market • The bargaining power of customers • The bargaining power of suppliers • Availability of substitutes • Level of existing competitive pressure | | <document classification>

  21. The Porter Model | | <document classification>

  22. 4. The value chain Primary activities: • Inbound logistics • Operations - the conversion of inputs into products • Outbound logistics - which concern distribution • Marketing and sales • Service activities | | <document classification>

  23. III. International marketing strategy • The five stage model Stage 1: Decision to internationalize  Stage 2: Analysis of international marketing environment  Stage 3: Entering international markets  Stage 4: International marketing programme  Stage 5: Implementing the international marketing programme | | <document classification>

  24. 2. International marketing planning Planning means looking into the future and deciding today what to do in the future given predicted or intended circumstances. | | <document classification>

  25. ‘What if’ analysis Management asks the question ‘what will we need to do if it happens?’ and makes sure that the firm is adequately prepared for the environmental change. ‘What if’ analysis recognizes complexities, discontinuities and uncertainties of the real world. | | <document classification>

  26. 4.Control and coordination Control: • Establishing standards and targets • Monitoring activities and comparing actual with target performance • Implementing measures to remedy differences | | <document classification>

  27. 4. Coordination and control Coordination means the unification of effort, i.e. ensuring that everyone within the enterprise is working towards a common goal. Effective coordination requires efficient control. | | <document classification>

  28. Mechanistic systems of control • Standardization of administrative procedures • Feedback systems (reports) • Face-to-face meetings • Appointment of a full-time liaison manager | | <document classification>

  29. Cultural systems of control • Clear corporate vision and mission; • Free-following communication between the workforce and management • Good internal PR and internal marketing • Good induction procedures for new staff to adopt the corporate culture at an early stage | | <document classification>

  30. Learning Objectives • Describe the major similarities and differences between domestic and global logistics. • Discuss the reasons for the increase in global business activity. • Define a global company. • Explain Porter’s dynamic diamond theory of global competitive advantage. | | <document classification>

  31. Learning Objectives • Describe the critical changes affecting global logistics. • Explain the effect of the changing legal and political environment in Europe, Asia, North America, and South America. • Discuss North American Free Trade Agreement and its effect on logistics. | | <document classification>

  32. Learning Objectives • Explain the major transportation systems available for global logistics. • Distinguish among the global logistics intermediaries, freight forwarders, customs house brokers, non-vessel operating common carriers, and export management companies. | | <document classification>

  33. Learning Objectives • Explain the criteria used to select a port for global shipments. • Discuss warehousing and packaging requirements for global shipments. • Define the role of customs duties and free trade zones. | | <document classification>

  34. Global Business Logistics • Important issues to consider: • To gain a competitive advantage, global sourcing is a given for companies engaging in global marketing strategies. • The longer the supply chain, the more cooperation and coordination is required between production, marketing, purchasing and the logistics management group. | | <document classification>

  35. The Magnitude of Global Logistics Activity • World trade is growing as fast logistics systems have had the effect of shrinking the world, empowering competitive trade. • Foreign trade has grown in tonnage and in value for the United States and other nations. • Lower labor costs from international outsourcing is a critical component of the supply chain. • Focused manufacturing fits well into an international logistics strategy. | | <document classification>

  36. Top U.S. Trading Partners | | <document classification>

  37. Global Markets and Global Corporations • Trade barriers continue to fall, accelerating global business activity. • Global markets result from the general homogenization of global needs and wants. • Local needs suborned to lower-priced, higher-quality products. • Preferences for international products can also be related to attempts to copy other more prosperous cultures. | | <document classification>

  38. Global Competitive Strategy • To effectively serve global markets, firms should consider adopting integrated worldwide strategies. • These firms are more likely to search for global sourcing for materials and components, depots, assembly, distribution centers, and logistics. • Global firms typically design synchronous strategies around technology, marketing, manufacturing, and logistics. | | <document classification>

  39. Customer Service Strategies for Global Markets: Four Characteristics • Marketing becomes standardized yet customized. • Product life cycles shorten, sometimes to less than one year. • Outsourcing and offshore manufacturing are becoming more prevalent. • Marketing and manufacturing activities and strategies tend to converge and be better coordinated in firms operating globally.4 | | <document classification>

  40. Customer Service Strategies for Global Markets • Logistics networks tend to become more expansive and complex. • Thus, lead times and inventory may rise. • Logistics activities must be operated as a system to provide a countervailing force. • Most importantly, the service needs of internationally-dispersed customers must drive the design and implementation of the logistics system. | | <document classification>

  41. Critical Factors and Key Trends: Importance of Competitive Environment • Michael Porter’s study concludes that “a nation’s ability to upgrade its existing advantages to the next level of technology and productivity is the key to international (global) success.” • Porter feels that the US loss of global market share in advanced fields of transportation and technology shows the US slipping recently in international trade. | | <document classification>

  42. Critical Factors and Key Trends: Porter’s Model • Factor conditions • Ability to transform basic factors into competitive advantage • Demand conditions • Market size, buyer sophistication, exposure • Related and supporting industries • Partners in supply chain, manufacturers • Company strategy, structure, and rivalry • Market structure and nature of competition | | <document classification>

  43. Marketing Logistics Process of physical flows of materials and final product from the point of origin to the point of use. It involves activities such as order processing , warehousing, inventory control and transportation. | | <document classification>

  44. Objectives of Logistics to be in compliance with marketing situation • Improve the customer service • Reduce total distribution costs • Generate additional sales create time and space utilities • Stabilize prices of products. | | <document classification>

  45. Strategic Logistic Planning It refers to the identification of business goals in terms of customer service level to be achieved and building up an integrated framework of strategies for each link of the logistics system. | | <document classification>

  46. Approaches for effective logistic management. • The cost trade offs • The total cost concept • The total system concept. | | <document classification>

  47. Warehousing Protected enclosure for storing goods on behalf of the depositors. Elements of warehouse • Space • Equipment • People | | <document classification>

  48. Functions of Warehousing • Stockpiling • Product Mixing • Consolidation • Distribution | | <document classification>

  49. INVENTORY MANAGEMENT • Raw Materials • Stores And Spares • Work in progress • Finished goods | | <document classification>

  50. Selective Inventory Control • A-B-C Classification • Material Requirement Planning • Distribution Requirements Planning | | <document classification>