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Chapter 11

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Chapter 11

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  1. Chapter 11 What is International Marketing?

  2. Chapter 11 - Overview • 11.1 International Marketing • 11.2 Global Marketing • 11.3 International Marketing Mix • Trading Partners - Spain

  3. 11.1 International Marketing Marketing: • All activities involved in planning, pricing, distributing and selling product or service • Marketing Mix - consists of 4 P’s and 2 C’s • 4Ps – Product, Price, Place, Promotion • 2Cs - Consumer and Competition • Designed to fulfill human wants and needs • Going international creates new challenges for the marketing mix

  4. The Marketing Mix (4 P’s)

  5. Marketing Mix (4 P’s & 2 C’s)

  6. Marketing Activities

  7. Definition of a Brand • Name, term, sign, symbol or design or a combination intended to identify the goods or services • Differentiate from their competitors • Branding is abstract – the product’s ‘personality’ or image

  8. Target Market • Target Market: All marketing efforts directed at a specific group of consumers that the marketer wants to attract (and ultimately sell their product or service to) • Companies cannot afford to sell to ‘everyone’ and most products are not applicable to ‘everyone’ • For some products, the market is everyone, then it is called the Aggregate Market

  9. Marketing Strategies • Centralized or Decentralized • Push or Pull • Brand Acquisition or Development

  10. Centralized Strategy • Production & sale from one central location - export to other markets • ‘Think local – act global’ • Several marketing divisions – focus on particular export areas • Common marketing themes to make international marketing campaign • Still considers local cultural differences • Ex: Coca Cola – global brand, consistent packaging / product features / logo – 2008 #1 Global Brand – most recognized

  11. Advantages of Centralized • Brand Building (global brands) – create international brand equity • making a brand recognizable throughout the world • giving it a positive image • consistent package, promotion & product • Brand IQ Quiz • Synergy – (1+1=3) • extra positive benefits from larger marketing group vs. smaller local groups working alone • Cost Benefit – Economy of Scale – avoids duplication (R&D, advertising) of efforts – centralized expert focus saves time and money – lower cost / higher profits

  12. Advantages / Disadvantages of Centralized • Best for small businesses – less expensive than decentralized • Also good for large businesses – e.g. Coca-Cola, McDonalds • Difficult to be only centralized – always need a local approach – e.g. Coca-Cola and McDonalds sell unique local brands in different markets • Companies often use a mix of two approaches to be more successful

  13. Centralized Organization

  14. Decentralized Strategy • Think Global – Act Local • Local facilities – local decisions • ‘Glocal’ – global firm / local focus • Advantages • Proximity (closeness) to markets • Targeting & better access to smaller markets • Transportation savings • Flexibility – spot trends / competition quickly • Culturally sensitive – more knowledge of local customs and preferences

  15. Centralized & Decentralized Marketing Strategy • Some MNC’s are so large that a combined strategy works best • For example Coca-Cola company p.339 • Uses both centralized and decentralized strategies – depends on brand • Flagship (main / most famous) Coca-Cola brand is centralized • Other brands (Fanta – Europe, Kuat – Brazil) are decentralized

  16. Marketing Strategies Distribution Strategies • Focus on the best way to deliver a product or service to the target market • 3 ways to achieve distribution goals • Push Strategy • Pull Strategy • Combination of both Push and Pull Strategy

  17. Push Strategy Marketers sell products through channels of distribution, not the end user. Consumer will see product in-stores and want it Push and Pull Strategies Pull Strategy • Marketer targets the consumer directly • Convinces consumer they need product • Global Branding is very important

  18. Marketing Strategies Push Strategy • Push the product or service to the customer • Push strategy sells the product to retailers, wholesalers or importers and not directly to the end consumer • Reason: if the product is out there where consumers can see it, they will buy it.

  19. Marketing Strategies Pull Strategy • Pull or attract the consumer to the product or service • This is what most people think of when they think of marketing • Attempts to increase the consumer demand directly instead of relying on retailers to sell the product to consumers • Manufacturers and importers try to convince consumers that they need the product and should look for the product when they are shopping

  20. Marketing Strategies Combination of Push and Pull • Use combination push and pull • Pull strategy is difficult to use alone as it requires distribution partners • Push strategy needs no partners, requires consumer awareness • The push strategy needs to combine with the pull strategy to optimize effectiveness; however, the push strategy can stand alone

  21. Marketing Strategies Brand Acquisition Strategy Int’l company purchases an existing company Expensive, controls competition, inherit workforce, management & goodwill Obtain rights to distribute locally Manufacturing and distribution rights: Pepsi purchase license to make Brisk Ice Tea in USA from parent company Unilever Exclusive distribution rights: Dealers attend trade shows looking for products to exclusively sell in their markets. • Brand Development Strategy • Set up a foreign subsidiary to develop a product to compete in the local market • Very expensive, complex, only large scale businesses can afford this option

  22. Global Marketing • Successful companies deliver products to consumers in different countries that they will want to buy • To be successful the global marketer considers • Economic Marketing Factors, • Consumer Profiles and • International Marketing Research • Franchising

  23. Global Marketing Economic Marketing Factors • The country/market must have an economy that provides an income to its people • Marketers consider wages and prices • Market Research helps decide whether they • Should sell only basic, essential good • Should consider a new market • Can create a marketing campaign that encourages consumer spend their discretionary income

  24. Consumer Profiles A method of understanding the consumer • Demographic – measurable characteristics • Age • Gender • Family Lifestyle • Purchasing Profile- who purchase, when where & how • Motivational Profile - explain consumer behaviour • Thorndyke’s Pleasure/Plain Theory • Maslow’s Hierarchy of Needs • Rational/Emotional Theory

  25. CONSUMER MOTIVATION MASLOW’S HIERARCHY OF NEEDS • arranged in a pyramid shape • the most basic need is at the bottom • once fulfilled , the next-higher level becomes more important

  26. CONSUMER MOTIVATION The first four levels are deficiency needs: 1. Physiological: hunger, thirst, shelter, warmth 2. Safety/Security: freedom from danger, adequate financial support 3. Relationships /Affiliation: belonging to teams and clubs; having friends, love relationships, family ties 4. Esteem: celebrating personal achievement; being successful and admired by others

  27. CONSUMER MOTIVATION The fifth level is a growth need: 5. Self-Actualization: motivated by a desire to know, understand and explore Aesthetic: motivated by a desire for symmetry, order and beauty • motivated by a desire to find self-fulfillment and realize personal potential • Transcendence: motivated by a desire to help others find self-fulfillment and realize their potential

  28. CONSUMER MOTIVATION THORNDIKE’S – Pleasure / Pain Theory • Consumers are motivated to buy products that produce positive events (pleasure) and to avoid products that produce negative effects (pain) • Food, movies, entertainment = pleasure • Medicine, insurance, safety items = avoid pain • Pain - complex, irritating, not acceptable • Pleasure - product meets expectations • Most decisions have both positive & negative events – e.g. buying holiday gifts at the mall • pleasure from giving gifts, product works well • crowded store, lineups & parking problems = pain • Mall has extended hours, parking attendants, service staff, self-check out = reduce pain

  29. Rational Emotional Theory • Rational = practical, logical, thinking • Emotional = not logical, impulsive, reactive, pleasure focus, sentimental • Needs – rational – food, water, shelter, survival items • Wants – emotional – luxury or optional goods – e.g. large screen TV

  30. Rational / Emotional • Companies use both rational and emotional appeals. • E.g. Volvo cars – high quality • Known for reliability – low maintenance costs = rational appeal • Known for safety – children will be safe in an accident – ‘side impact protection’ emotional appeal – child in a car seat shown in T.V. ad – appeals to emotions

  31. Global Marketing International Marketing Research Before the marketer begins to organize the marketing mix, they should ensure the data is valid • Marketing Research is the collection, analyzing, and interpreting of data to make marketing decisions. • Secondary Data – collected by others • Internet Sources, Periodicals and Publications, Credible Organizations found in the country • Primary Data – collected directly from the marketplace • Surveys, tests marketing, interviews, data mining & focus groups, local marketing research firms

  32. International Marketing Mix • The introduction of a new product to market is called a product launch where all marketing mix factors are coordinated for the marketing campaign

  33. International Marketing Mix • Product • Meets needs/wants of consumers • Few competitors • Product features • Differentiation-what sets product apart • Marketing Opportunity Analysis – gaps in the international marketplace • Branding – brand recognition and brand equity • Packaging and Labelling – protection, silent salesperson, meet country rules and regulations

  34. International Marketing Mix Place (Distribution) • Industrial Sales Representatives • Personal, very knowledgeable, power to make decisions • Trade missions help develop contacts • Retail Marketing • Department Stores to open air markets • Specialty Channels • E-Commerce • Vending Machines • Catalogues • TV Sales • Telemarketing

  35. International Marketing Mix • Price • Competitive for the market • Encourage sales, cover costs and make a profit • Economies of scale – more made and sold the less expensive products become

  36. International Marketing Mix • Promotion • Creating an effective sales message • Selecting an advertising medium that will target the audience • Foreign advertising requires foreign expertise • Ensure that promotional activities are managed correctly

  37. International Marketing Plan • Before marketers attempt to market their products outside their own country it is essential to develop a solid international marketing plan. • Entering new countries changes the marketing mix and a new international marketing plan is needed. • Complete International Company Profile p.356 “Cinnaroll Bakeries” answer Q’s 1-2