Chapter 11 by yaofenji

VIEWS: 13 PAGES: 62

									International Marketing




       Chapter 11
    11.1 Int’l Marketing Strategies
   Marketing

         The sum of all activities involved in the
          planning, pricing, promotion, distribution
          and sale of goods and services to satisfy
          consumers‟ needs and wants.

         The business decisions a company makes
          regarding these areas are called Marketing
          Strategies

                Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Marketing Strategies

    • Centralized vs. Decentralized


    • Push vs. Pull


    • Brand Acquisition vs. Development

             Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Centralized vs. Decentralized
    • Centralized Marketing Strategies
         No surprise here . . .
         Centralized marketing strategies focus on
          the production and sale of goods from one
          c-e-n-t-r-a-l location
         Businesses which follow this strategy
          produce all of their goods in one country
          and then export them to overseas markets



                Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Centralized Marketing Strategies
     This is the concept found in the catch-
      phrase: “think local, act global”
     Larger centralized companies may have
      several marketing divisions each responsible
      for a separate area of the world
     They may use common marketing themes to
      create their international marketing
      campaigns.



            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Centralized Marketing Strategies
     These sorts of international marketing
      campaign are most effective when used
      within relatively homogeneous regions
      (based on groupings such as: common
      language, culture, or trading area)




            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Centralized Marketing Strategies
     Advantages
       • Brand Building (Global Brands)
            Companies with top global brands invest

             millions of dollars each year in an attempt to
             make the brands recognizable throughout the
             world and give them a positive image.
            Centralized marketing can result in

             consistency in promotion, packaging and
             product features




            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
 2004 Top Brands based on „Impact‟        2004 Top Brands based on „Value‟




               Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Centralized Marketing Strategies
     Advantages
       • Synergy
           Synergy occurs when two agents or forces

            work together to produce an effect that is
            greater than the sum of their individual
            effects.
           Centralized marketing can bring together

            research and development, product
            development, creative advertising, and global
            sales to produce a much more effective
            marketing campaign


            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Centralized Marketing Strategies
     Advantages
       • Cost Benefits
           Centralized approaches often reduce

            duplication of efforts
           This is especially true in areas such as

            research and development, advertising, and
            promotion




            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Decentralized Marketing Strategies
     This is the concept found in the catch-
      phrase: “think global, act local”
     Companies using a decentralized approach
      often use local production facilities,
      distribution centres, advertising agencies,
      market research companies, sales
      representatives, and retailers to target
      specific international markets




            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Decentralized Marketing Strategies
     MNCs that operate on a local basis
      throughout the world are called „global‟
      companies




            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Decentralized Marketing Strategies
     Advantages
       • Proximity to Markets
            Manufacturing locally usually means that you
             can distribute locally as well
            This way, you can reach smaller markets that
             companies using centralized strategies may
             find to expensive to service
            There can also be significant savings in
             transportation and storage costs
            Some of these savings can still be realized if a
             company manufactures at home and
             distributes locally


             Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Decentralized Marketing Strategies
     Advantages
       • Flexibility
            As brands show growth in specific areas,

             decentralized approaches can spot this trend
             early and maximize sales
            Decentralized marketing strategies may also

             be used to:
                         •Match advertising and promotional
                         activities to
                               specific local events
                              •Fight new competition with
                              competitive pricing
                              •Target sales efforts to effectively
                              deal with new
            Chapter 11 – International Marketing
                               competitors
11.1 Int’l Marketing Strategies
• Decentralized Marketing Strategies
     Advantages
       • Cultural Sensitivity
           Local people know local customs

           This allows them to tailor advertising
            messages, package designs, and distribution
            strategies to accommodate the local culture




            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Cultural Sensitivity . . .




          Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Push Strategy
    Manufacturer
                                                           Domestic

                                                        International
      Importer


                     Wholesaler


                                         Retailer


                                                         Consumer


                 Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Push vs. Pull
    • Push Strategy
         Selling products to importers, wholesalers,
          retailers and other members of the
          „Channels of Distribution‟ – but NOT to final
          (end-use) consumers.
         In this approach, it is thought that if
          consumers see the product in the store,
          they will buy
         The store display space is called a “silent
          salesperson” – controlled by the retailer and
          not the manufacturer

                Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Push vs. Pull
    • Push Strategy
         Marketing efforts are directed to the
          members of the channel of distribution in
          order to convince them to carry the product:
           • International Trade Shows
           • Sales Agents
           • Dealer Advertising and Promotion




                Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Pull Strategy
    Manufacturer
                                                           Domestic

                                                        International
      Importer


                     Wholesaler


                                         Retailer


                                                         Consumer


                 Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Push vs. Pull
    • Pull Strategy
         This approach is directly targeted to the
          final consumers
         Advertising and promotion efforts try to
          convince the consumer that they „need‟ the
          product
         These consumers then go to the stores
          looking for the product . . . Retailers will
          then contact suppliers and the product will
          be „pulled‟ through the channel of
          distribution

                Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Push vs. Pull
    • Pull Strategy
         Pull strategies are often more challenging
          that push strategies in the international
          marketplace
         International marketers must build
          consumer demand (in a variety of languages
          and cultures!) for this strategy to work
          effectively
         Benefits can be significant, however, since
          very little sales effort is required once brand
          awareness is established

                Chapter 11 – International Marketing
    11.1 Int’l Marketing Strategies
   Brand Acquisition and Development
    • Brand Acquisition
         An international company purchases an
          existing local company or acquires the
          distribution rights to a local brand
         Companies may do this to avoid/control
          strong local competition for their own
          brands or to take advantage of an existing
          and successful local brand



                Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Brand Acquisition
     Purchasing an existing company may not
      always be feasible, however.
     Fortunately, there are other options – such
      as Contracts for Distribution Rights
     This particular approach has two options
      associated with it:
       • Manufacturing and Distribution Rights
       • Exclusive Distribution Rights




            Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Brand Acquisition
     Manufacturing and Distribution Rights
       • This is when one company licenses to another
         company the rights to make and sell a product in
         a specified area.
       • As a consumer, you know this is taking place
         because you will see the statement:
         “Manufactured Under License”
       • In such cases, the local manufacturer and/or
         distributor only leases the rights from the original
         owner



             Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Brand Acquisition
     Exclusive Distribution Rights
       • This is an effective strategy for smaller companies
         who lack the resources to build large overseas
         factories
       • The original overseas manufacturer grants the
         distribution rights to one particular company for a
         specific period of time
       • This is usually a win-win situation for both parties
         and no fees or commissions need be paid up front




             Chapter 11 – International Marketing
11.1 Int’l Marketing Strategies
• Brand Development
    • This approach is often used with decentralized
      strategies
    • Foreign subsidiaries are used to develop products
      to compete in local markets
    • Brand development tends to be quite expensive
      and is typically only employed by those
      companies which market „branded‟ consumer
      goods.




         Chapter 11 – International Marketing
    11.2 Global Marketing
• One strategy that has proven successful
  in global marketing is franchising
• The success of franchising is likely due
  to the existence of
          a recognized brand
          A positive corporate reputation
• International franchises also benefit
  from belonging to the society and
  culture of the home country


           Chapter 11 – International Marketing
    11.2 Global Marketing
• Some of the factors that help to make
  international franchises successful are
  their knowledge of:

     • The relevant local and national economic factors

     • The demographic factors that influence buying

     • The preferences and customs of consumers




          Chapter 11 – International Marketing
11.2 Global Marketing




   Chapter 11 – International Marketing
11.2 Global Marketing




   Chapter 11 – International Marketing
          11.2 Global Marketing
   Economic Marketing Factors
         Viable markets for international companies
          are ones whose economy provides a stable
          income to its people
         As soon as people reliably have disposable
          income, international companies will start to
          develop strategies to help people with
          spending choices
         The two major economic factors which stand
          out for marketers are wages and prices


                Chapter 11 – International Marketing
    11.2 Global Marketing
   If consumers earn wages, they will have
    money to spend and so they constitute a
    market
   Prices also help to determine the existence
    of markets
     • If the total cost of essential goods is less than
       individual incomes, then disposable income is
       present
     • Disposable income provides discretionary
       buying/purchasing power which creates markets
       for non-essential goods and/or increased choice
       for essential goods


          Chapter 11 – International Marketing
    11.2 Global Marketing
   In these ways, wage and price indicators
    help marketers decide whether:

     • There is even a market for their product

     • There is a market for essential goods only

     • There is a market for non-essential goods as well
       as essential goods




          Chapter 11 – International Marketing
        11.2 Global Marketing
   For example . . .
         • An international marketer of an essential good
           would likely decide:
             To use a push strategy

             To use a highly decentralized approach

         • These strategies would work to lower distribution,
           advertising and manufacturing costs
    • Although . . .
         • Every situation is unique to some degree
             If disposable income is extremely high,

              „essential‟ goods could be marketed as
              „gourmet‟ items

              Chapter 11 – International Marketing
               11.2 Global Marketing
   Manoucher's
    Premium Gift Box
    One look lets you see why
    these are the world's most
    talked-about breads. This
    selection includes a Wooden
    Gift Box - beautifully detailed
    and handcrafted. Includes 1
    (10 oz.) Loaf Basil Bread, 1
    (12 oz.) Loaf Fokachio Bread,
    1 (17 oz.) Loaf Mediterranean
    Sunset Bread, and 1 (11 oz.)
    Loaf Herb & Cheese Bread.
       From: http://www.hickoryfarms.com     Sale Price          $74.95

                          Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
         All marketers need to develop a profile of
          their typical customer. This is no different
          for international marketers. Usually, the
          ideal local customer profile will consist of
          the following:
                 Demographic Profile
                 Motivational Profile
                 Purchasing profile




                  Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Demographic Profile
         Demographics are the statistics and
          characteristics of a population
         Such information can help determine the
          size of the market, the market‟s purchasing
          power, and the population divisions that will
          influence purchasing decisions
         Along with income levels, marketers are
          also interested in a population‟s age,
          gender, family lifestyle, and religious and
          ethnic background

                Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Demographic Profile
         AGE
           • People‟s buying decisions change as they age
           • Tastes, needs, and income levels all change
           • Marketers can discover how many children, how
             many teenagers, and how many mature adults
             live within a city, region, or country
           • While this information may not provide detailed
             insight for each particular country in question, it
             will provide enough information to make informed
             marketing decisions

                 Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Demographic Profile
         AGE
           • For example, marketers do know that:
                Teenagers like to be trendy

                Many mature adults in developed countries
                 make plans for their retirement
                Most school children like to have something to
                 eat after school
           • So, for example, demographic information
             regarding the number of school-aged children will
             help a marketer decide whether a sufficient
             market exists for a proposed snack food

                Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Demographic Profile
         GENDER
           • The idea of “men‟s” products and “women‟s”
             products is generally culturally based
           • Understanding the roles of men and women in a
             given country is important to the success of
             marketing
           • Information such as the number of women in the
             workforce and their relative income levels
             compared to men can be used to make decisions
             about advertising, and product selection

                Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Demographic Profile
         FAMILY LIFESTYLE
           • As people and families go through different stages
             in their lives, the demands on time, income, and
             physical and emotional energies change
           • A 17 yr. old girl in India, a retired couple in
             Australia, a single mother in Canada – all have
             different needs and wants
           • Good marketers consider the products that each
             of these groups needs, provides it, and distributes
             it to where the target group shops

                Chapter 11 – International Marketing
        11.2 Global Marketing
   Consumer Profiles
    • Motivational Profile
         • Motivational profiling is an attempt by marketers
           to understand consumer behaviour and determine
           why consumers buy the things they do
         • Our text discusses 3 prominent theories:
              Thorndyke‟s Pleasure / Pain Theory

              Malsow‟s Hierarchy of Needs

              Rational / Emotional Theory




              Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Motivational Profile
         Thorndyke‟s Pleasure/Pain Theory




                               Edward Lee Thorndyke. 1874-1949




                Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Motivational Profile
         Thorndyke‟s Pleasure/Pain Theory
           • Edward Lee Thorndyke developed his Law of
             Effect which states that stimulus-response
             sequences followed by pleasure tend to be
             'stamped in'; responses followed by pain tend to
             be 'stamped out'. This is Operant Conditioning
           • Behaviour is an attempt to either achieve
             pleasure or avoid pain
           • What causes pleasure or pain in one culture may
             not do so in another

                Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Motivational Profile
         Maslow‟s Hierarchy of Needs




                                ABRAHAM MASLOW. 1908-1970




                Chapter 11 – International Marketing
11.2 Global Marketing

                            Maslow's theory rests on the idea
                            that human motivation consists
                            of a hierarchy of needs. From
                            bottom to top, we move from
                            needs that are evolutionarily old
                            to those that are more recent;
                            from needs developing early in
                            the individual's life to those
                            developing later; and from needs
                            that are primarily biological or
                            physiological to those that are
                            primarily psychological.



   Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Motivational Profile
         Maslow‟s Hierarchy of Needs

           • Maslow believed that we all strive to achieve the
             goal of the self-actualized personality

           • Each level of his hierarchy must be fulfilled before
             an individual moves on to the next level




                 Chapter 11 – International Marketing
           11.2 Global Marketing
   Maslow‟s Hierarchy of Needs
          All of the first four levels he calls deficit needs, or D-
           needs. If you don‟t have enough of something -- i.e. you
           have a deficit -- you feel the need. But if you get all you
           need, you feel nothing at all! In other words, they cease to
           be motivating.

          The last level is a bit different. Maslow has used a variety
           of terms to refer to this level: He has called it growth
           motivation (in contrast to deficit motivation), being
           needs (or B-needs, in contrast to D-needs), and self-
           actualization. Once engaged, these needs continue to be
           felt. In fact, they are likely to become stronger as we
           “feed” them! They involve the continuous desire to fulfill
           potentials, to “be all that you can be.” They are a matter
           of becoming the most complete, the fullest, “you” -- hence
           the term, self-actualization.
                   Chapter 11 – International Marketing
11.2 Global Marketing




   Chapter 11 – International Marketing
          11.2 Global Marketing
   Maslow‟s Hierarchy of Needs

         The big question for marketers after
          all of this is:


                       So What?

         In an attempt to offer an answer to this,
          consider Altoids . . .

                Chapter 11 – International Marketing
           11.2 Global Marketing
Altoids Mints
This is the British mint
packaged in a tin. A variety
of advertising campaigns
were available for the N.A.
market, depending on where
the primary market for the
product was determined to be
according to Maslow.

SAFETY LEVEL
“Fresh Breath, Less Stress”

BELONGING LEVEL
“Offer one to a friend!”
                   Chapter 11 – International Marketing
          11.2 Global Marketing

Altoids Mints
The pricing,
packaging, and quirky
“this-is-not-for-
everyone” advertising
message that was
chosen attracted
consumers at the
ESTEEM LEVEL




                 Chapter 11 – International Marketing
          11.2 Global Marketing
   Consumer Profiles
    • Motivational Profile
         Rational/Emotional Theory
                 On a fundamental level however, marketers
                  must realize that, at the end of the day,
                  consumers ultimately react to products with
                  sentiments like:

                       Do I really need this?

                                and

                       I really what this!

                  Chapter 11 – International Marketing
    11.2 Global Marketing
• Rational/Emotional Theory
    • These questions represent both the rational and
      the emotional side to the purchasing decision.

    • Different cultures dictate what is a rational and
      what is an emotional buying motive with regards
      to different products

    • For example:

                   Cell Phones
       Need? Want? Rational? Emotional?
         Chapter 11 – International Marketing
11.2 Global Marketing
• Companies that sell industrial goods and raw
  materials will likely reject emotional motives
  completely and focus their marketing on the
  rational.
     Their advertising stresses convenience,

      profitability, ease of use, and other product
      features
• Banks, investment companies, and other financial
  institutions – which we would expect to focus on
  rational motives – often focus on emotional
  motives such as confidence, trust, and friendly
  service.



     Chapter 11 – International Marketing
        11.2 Global Marketing
   Consumer Profiles
    • Purchasing Profile
         • To complete the consumer profile for an
           international marketing campaign, marketers
           need to determine:
              Who purchases the product, when, where and
               how
              The type of retail store that should carry their
               product
              The most popular buying season and busiest
               shopping days
              What methods of payment are accepted and
               what methods are used


               Chapter 11 – International Marketing
        11.2 Global Marketing
   International Marketing Research

    • Marketing Research

        • Collects, analyzes, and interprets data used to
          make marketing decisions

        • The data research collects can generally be
          divided into two categories:
             Primary Data

             Secondary Data



             Chapter 11 – International Marketing
       11.2 Global Marketing
   Marketing Research
    • Primary Data
        • This is data collected directly from the
          marketplace
        • It is usually collected be either a specialized
          market research firm or by the company
          themselves
        • Methods of collection involve:
             Surveys

             Test marketing

             Interviews

             Data Mining

             Focus Groups



              Chapter 11 – International Marketing
       11.2 Global Marketing
   Marketing Research
    • Primary Data
        • For the international marketer, this type of data
          collection is often quite difficult
        • If it is deemed necessary to have primary data,
          most companies will use a market research firm
          located in the target market
        • Any company that expects to be a major
          participant in a foreign market will likely need to
          spend money on primary data collection




              Chapter 11 – International Marketing
       11.2 Global Marketing
   Marketing Research
    • Secondary Data
        • Secondary data is much easier to collect because
          someone else has already gone through the
          trouble of actually collecting it!
        • However, the data may not be specific enough for
          a particular company‟s needs
        • It is usually good enough to make general
          marketing decisions based on demographic and
          economic factors




             Chapter 11 – International Marketing
       11.2 Global Marketing
   Marketing Research
    • Secondary Data
        • Sources of Secondary Data include:
            The internet

            Periodicals and other publications

            Country specific organizations

            Government agencies

            Non-government organizations




             Chapter 11 – International Marketing

								
To top