lecture 1 - introduction to int marketing
DESCRIPTION
global MKTTRANSCRIPT
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Introduction toGlobal Marketing
Outline
• Marketing (Domestic) Vs. International Marketing (Global)
• Why Do Firms Go Global?
• Management Orientations
• Driving and Restraining Forces
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What is Marketing?
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What is Marketing?
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Marketing is to
C, C, D,V,T,P
Philip Kotler
What is Marketing?
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…Create, Communicate and Deliver value to
a Target market at a Profit.
Philip Kotler
What is Marketing?
Marketing Seeks to: Discover Needs and Wants of Customers
Satisfy Them
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What Is Marketing Management?
The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
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What is Marketing?
Marketing is not:
SELLINGADs
(1) Needs, Wants, Demands
(2) Products
(3) Value, Satisfaction
(4) Exchange
(5) Markets & target market
Core Marketing Concepts
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NEEDS
• States of deprivation
• Physical needs
• Social needs
• Individual needs
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Core Marketing Concepts
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Core Marketing Concepts
Forms taken by human needs as they are shaped by culture and individual personality
Unlimited wants, limited resources
WANTS
American Indian
Vietnamese
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Core Marketing Concepts
DEMANDSWANTS
An ability to pay
When backed by power, wants become DEMANDS.
Core Marketing Concepts
DEMANDS
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A target market consists of one or more specific groups of potential consumers toward which an organization directs its marketing program.
TARGET MARKET
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Core Marketing Concepts
Question
What is International Marketing?
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International Marketing Defined
“Defined as the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nations for a profit.” (Cateora, Gilly & Graham 2009)
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International Marketing Defined
Set of different factors: political systems, legal frameworks, cultural norms, economic circumstances etc.
Uncontrollable Elements
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Uncontrollable Elements
Google in China
Coca-Cola in India
Examples: Political & legal constraints
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Uncontrollable Elements
Example: Cultural norms
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Uncontrollable Elements
Example: language
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Please share more!
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Political/legalforces
Economicforces
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2
Environmentaluncontrollablecountry market A
Environmentaluncontrollablecountrymarket B
Environmentaluncontrollablecountrymarket C
Competitivestructure Competitive
Forces
Level of Technology
Price Product
Promotion Channels of distribution
Geography and
Infrastructure
Foreign environment(uncontrollable)
Structure ofdistribution
Economic climate
Cultural forces
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7Political/
legalforces
Domestic environment(uncontrollable)
(controllable)
International Marketing Task
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Keys to Global Success
Value Creation
Competitive Advantage Focus
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Value Creation
•Value = Benefits/Price
2 methods of value creation?
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Competitive Advantage
• Success over competition in industry at value creation• Achieved by integrating and leveraging operations on a worldwide scale
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Focus
Concentration and attention on core business and competence
“We are food and beverages. We are not running bicycle shops”. Even in food we are not in all fields. There are certain areas we do not touch…..We have no soft drinks because I have said we will either buy Coca-Cola or we leave it alone. This is focus.
Helmut Maucher (Nestle)
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Examples of Global Marketers
• Coca-Cola• Philip Morris• Daimler-Chrysler• McDonald’s• Toyota• Ford• Unilever• Gillette• IBM
USAUSAGermanyUSAJapanUSAUK/ NetherlandsUSAUSA
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Question
Why Do Firms Go Global?
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Why Do Firms Go Global?
Saturation of the home market Converging market needs and wants Transportation and communication improvements Utilizing global resources Huge potential is from outside
• USA : 75% market potential is outside• Japan : 85%...• Germany : 94%...
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Driving Forces
• Product development costs
E.g.: New drug (14 yrs. & 400 mil)• Quality• World economic trends
- Emerging Asia - BRICS
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• Leverage• Economies of scales• Resource utilization• Experience transfer
Restraining Forces
• Management myopia
• Organizational culture
• National controls (Eg.: N.T.Bs)• Opposition to globalization (Globalphobia)
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Question!
Why have some countries opposed globalization?
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Management Orientations
1• Ethnocentric Orientation
2• Polycentric Orientation
3• Regiocentric Orientation
4• Geocentric Orientation
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Ethnocentric Orientation
• Mainly focus on home country market • View foreign market as a dumping ground• Little or no marketing research• Limited modifications
E.g.: American cars (1960s & 70s)
Standardization or extension
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Polycentric Orientation
• View each foreign market as unique• Consider manufacturing locally
Localized or adaptation
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Regiocentric Orientation
•Develop an integrated regional strategy E.g.: NAFTA, Western Europe, Asean…•Realize the benefit of economies of scale•Standardize product(s) within a region
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Geocentric Orientation
• View the entire world as a single market• Have the ability to “think global & act local”
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Management Orientations
Ethnocentric
Polycentric
Geocentric
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Management Orientations
• Ethnocentrism: Domestic/ International
• Polycentrism : Multinational
• Geocentrism : Transnational / Global
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Management Orientations
What distinguishes Global/Transnational & International/Multinational companies?
Mind-set
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Degree of Trans-nationality
- Sales
- Assets
- Employees
Company Global revenues($Bil)
Percent Revenue from outside the
U.S
Intel 37.6 85.4
Coca-Cola 31.9 77.0
Citi Group 52.8 74.8
Hewlett-Packard 118.4 68.2
General Electric 182.5 53.7
Boeing 60.0 65.0
Ford Motor 146.3 51.9
Apple 36.4 46.0
(Source: Cateora, Gilly & Graham 2009)
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Standardization Vs. Adaptation
Standardization (Global)– Developing standardized products marketed worldwide with a standardized marketing mix– Essence of mass marketing
Adaptation (Local)– Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction– Essence of segmentation
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Standardization Vs. Adaptation
- India: Maharaja Mac (made by mutton/lamb)
- German : McCroissants (selling with beers)
- Philippines: McSpaghetti noodles
- Latin America: Banana-fruit pies
- New Zealand: Kiwiburger chicken
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Standardization Vs. Adaptation
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Standardization Vs. Adaptation
English Coca-Cola
Arab كوكاكول
Korean 코카콜라 Marathi को�को�-को�ला�
Japanese コカ・コーラCantonese 可口可樂 Mandarin 可口可乐 Russian Кока-Кола
Greek Κόκα κόλα
Vietnamese Cô Ca Cô La
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Standardization Vs. Adaptation
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Standardization Vs. Adaptation
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Standardization Vs. Adaptation
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Questions
- Standardization # Adaptation. Examples?
- “ Think global & Act local”. What does it mean?
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Summary
Global marketing is the process of focusing resources on global marketing opportunities
Key success: to create customer value & competitive advantage by maintaining focus
Three classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric
Global marketing importance is shaped by a variety of driving & restraining forces
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