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INTERNATIONAL MARKETING

2016-2017

Instructor: Valentina Pitardi

Globalization

“Global Village”, people who are physically

separated by time and space are interconnected

by electronic media” Mc Luhan

Globalization and Global Market

Globalization - a process of

interaction and integration

among people, companies,

and governments of many

nations, is driven by

international trade and

investment and has resulted in

what some call a global

economy.

European Union

NAFTA(North America Free Trade Agreement)

Mercosur (Sur America)

Trade liberalization

Vs

Competition!

Global Marketing and Global Market

Global Markets

“regional and world markets

are converging, allowing for

standardized marketing

strategy”

Differences in consumer motivation

and preferences still matters!

≠Global Marketing

“integration and control of

marketing activities on a

global basis”

The CAGE Distance Framework

Cultural

language,

ethnicities, religion,

values, norms

Administrative

laws, political risk,

government structure

Economic

Differences in

national income,

costs of doing

business, prices,

availability of human

and natural

resources

Geographic

country size,

infrastructure,

climate,

remoteness from

neighboring

countriesImplementing a global

strategy depends on the

distance (or closeness)

between regions and

countries

Global Marketing

Global Marketing: what are we talking about?

Global Marketing

How to win the Chinese Movie Market: Kung Fu Panda

By the end of this decade, China could surpass the United States to

become the biggest movie market in the world.

And come 2030, China's film market could be twice as big as the US-

market,

China movie market: "It's like a gold mine and everyone is looking for

the entrance"

Censorship and Restrictions: annual cap of 20 imported films Blackout periods during peak movie-going times, in order to promote

Chinese films.

Ethnocentrism main problem with making films for the Chinese

market

Global Marketing

2016

The first major US-China co-

production for an animated

movie

Two movies - one in English, and

one in Mandarin.

Made as a local production and

thus evades China's blackout on

Hollywood movies

How to win the Chinese Movie Market: Kung Fu Panda

2008

First Chinese Main Character

Chinese Ancient Culture

Bad guy from North Korea

“DreamWorks's take on

China's ancient culture fell

as flat as its 2-D portrayal”

2011

Going in depth in the

Chinese culture, designer

and production go to

Chengdu

“We absorbed its colors, its

misty atmosphere, and its

magic.”

Kung Fu Panda 1 Kung Fu Panda 2 Kung Fu Panda 3

Global Market vs Domestic Market

Greater separation

of geographical

and psychological

distances

Greater diversity

and dynamism than

domestic, internal

markets

Greater uncertainty

in markets and

environments.

HOW to PENETRATE and HOW to COMPETE

Global markets are characterized by:

Global Marketing vs National Marketing

Operating in a multi-country context with

Different Environments

Differences in Competition Different Marketing Infrastructures

So, a company needs to:

search for similarities and adjust to these differences

What is the company’s take on this? (EPRG framework)

Distance and Differences perceptions

Cultural distance

may be defined

as some

measure of the

extent to which

cultures are

similar or different.

Measured on a

country level and cannot be

controlled by

management

Psychic distance

exists in the mind

of the individual

The perceptual

distance between

the home country

culture and the

host country

culture

Measured on the

individual, rather

than the country,

level

Searching for similarities and adjust the differences!

EPRG Framework

Ethnocentric

a focus on the

home marketProduct development

determined by needs of home country

Polycentric

approach global

markets with discrete

strategies Local product development

based on local needs

Geocentric

the world is one

marketGlobal product with local

variations

Regiocentric

strategies target

entire regions (i.e.

NAFTA)Standardized within

region but not acrossregions4 approaches/orientations

by which a firm is

managed in foreign

markets

Affect the firm’s value chain management!

Value Chain

The sequence of activities required to make a product or

provide a service

(Porter)

Primary activities Inbound logistics

Operations

Marketing and sales

Service

Support activities Infrastructure

Human resource

Management

Technology Procurement

Value Chain: configuration and coordination

Configuration,

refers to where and how

activities will be located,

concentrated in one country or

dispersed throughout

many countries

Coordination

refers to the governance

of the activities, how

they are linked together

throughout a chain

which is dispersed geographically among

many countries

Global Marketing Strategies

Economies of scale in

production and marketing

Lowering costs (R&D)

Standardization VS Localization/Adaptation

Different tastes and

customer preferences and

performance requirements

and standards across

countries

Completely standardized Marketing Mix doesn’t exist!

Standardized Marketing Strategies

Product Positioning

Nokia or Ford

Brand Name

Coca Cola, Heineken

Advertising

Mc Donald’s

Distribution

IKEA

(Multi)

Trans-national

Companies

Global

Companies

Business Configuration

ConcentratedDecentralized

Lev

el o

f c

oo

rdin

atio

n

Low

Hig

h

Global

Strategies

Multi-local

Strategies

Polycentric

Companies

Ethnocentric

Companies

GLocal Strategies

Global Marketing Strategies

Global Marketing: The process

Should the Company go International or Not?

Country Analysis (legal, economic,

technological, demographic, social, cultural

systems)

Environmental analysis (competition,

quantitative analysis of demand – e.g. market

potential – qualitative analysis of demand –

consumer behavior and expected

value/cultural specificities)

Choice and management of countries portfolio

(resource allocation for acquisition-brand

loyalty-customer equity development)

International market segmentation (macro and

micro level – targeting)

Entry strategy and mode of entry and go-to-

market (export-agreements-IDE)

Positioning and differentiation

PESTEL: Analysis of the Macro Environment

Political government stability, government structure,

internal politics, international relations, terrorist activity

and political risk

Economic economic growth indicators, exchange rates,

trade policy, taxation, consumpion,

employment/unemployment, inflation

Social demographics, lifestyle, education, living standard

(healtcare and welfare), immigration/emigration

Technological technological infrastructure,

development, high tech growth

Enviromental regulations, global warming, pollution,

green marketing

Legal legal system, business legislation, consumer

protection, intellectual property issues.

Culture: what is?

A shared meaning system, or the collective programming of the mind that distinguishes the

members of one group or people from another.

National Character

Values

Time Orientation

Space Orientation

Perception

Religion

Language

Non verbal communication

Behavior

Social groupings and

relationships

Culture: what is?

Language and cognitionLanguage is translatable

Abstraction in speech and thought

Antonyms, synonyms

Figurative speech, metaphors

Symbolism, symbolic speech

SocietyFamily or household

Kin groupsPeer groups not based on

family

Moral sentiments

Distinguishing right and wrong, good and bad

Myth, ritual and aestheticsBeliefs about death

Beliefs about fortune and misfortune

Proverbs, sayings

Music, rhythm, dance

Play

TechnologyControl of fire

Tools, tool makingWeapons

Containers

Culture: what is?

Powerful force that shapes consumer behavior Ignoring cultural differences between countries has

been the cause of business failures

Sub-culture: what is?

Often transcend

national borders and

cultures

Corporate cultures

are essentially

subcultures

that exist within the

business world

Develop around a

shared characteristic

that is different from

the predominant

national culture

Culture and Communication

Spoken or verbal communication is often believed to be the

dominant form of communication yet it is estimated that

between 50 and 90 percent of communication is non-verbal

Low context

cultures:

Words are

explicit(Us, Germany, nordic)

High context

cultures:

Meaning of what

is said is hidden in

the way it is said(France, Latin

America, Japan)

Time and Space

Time- relation

Monochronic

Doing one thing ata time (organized and more

time-oriented)

Polychronic

Doing a number of

things at the same

time(less organized and

time-oriented)

Space- relation

Personal space

and body contact(high-contact vs low-contact cultures)

Size matter

status signaling

How to «measure» culture

1. Individualism vs Collectivism

Concept of the self and others

2. Masculinity vs femininity

Role, interaction with and for others

3. Power Distance

Equality in interpersonal interactions

4. Uncertainty Avoidance

Tendency to avoid risk or not

5. Long-term v. Short-term orientation

Social obligations

Hofstede’s 5 Dimensions of National Culture

How to «measure» culture

4 dimensions:

Openness to change

Self transcendence

Conservatism

Self enhancement

One advantage of the Schwartz Value Survey is that it can

measure individual value differences.

Researchers have utilized Schwartz to study consumer

behavior, particularly for segmentation and advertising.

The Schwartz Value Survey

How to «measure» culture

The GLOBE modelGlobal Leadership and Organizational Behavior Effectiveness

Premise:

Attributes defining a specified culture are predictive of

leadership styles and organizational practices

Clusters countries on the basis of shared similarities among

social and psychological variables such as attitudes, values

and work goals

Legal and Political Issue

sales agencies

distributorship agreements

customs and international trade regulation

export incentives and controls

arbitration

intellectual property rights

international technology transfer

Corruption level

Terrorism Risk

Global marketers must understand the legal systems in which they operate and the political Issue

NEXT WEEK

Read Disney case to class discussion

Using Hostfede’s framework, compare your home

country with France (Italy for foreign students)

Find example and case of marketing failure based on cultural issue