Transcript Chapter 6
Chapter 11 What is International Marketing? Chapter 11 - Overview 11.1 International Marketing 11.2 Global Marketing 11.3 International Marketing Mix Trading Partners - Spain 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 The Marketing Mix (4 P’s) Promotion Mix Product Mix Pricing Mix Place Mix (Distribution) Marketing Mix (4 P’s & 2 C’s) Promotion Mix Product Mix Pricing Mix Place Mix (Distribution) Competition Customer Storage Promotion Research Inventory Management Packaging Marketing Activities Physical Distribution Product Development Sales Pricing Branding 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 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 Marketing Strategies Centralized or Decentralized Push or Pull Brand Acquisition or Development 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 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 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 Centralized Organization Coca Cola Head Office Coca-Cola South America Coca-Cola Asia Pacific (Asia / Australia) Coca-Cola North America Coca-Cola European Union Coca-Cola Africa 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 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) CocaCola brand is centralized – Other brands (Fanta – Europe, Kuat – Brazil) are decentralized Marketing Strategies 1. 2. 3. 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 Push and Pull Strategies Push Strategy Marketers sell products through channels of distribution, not the end user. Consumer will see product in-stores and want it Pull Strategy Marketer targets the consumer directly Convinces consumer they need product Global Branding is very important 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. 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 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 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 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 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 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 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 M A SL OW ’ S H I ER A R CH Y OF N EED S Self-actualization Needs The need to fulfill ourselves Esteem Needs The need to be respected by others Social Needs The need to feel that we are accepted by others. Safety Needs The need to be protected from physical danger Physical Needs The basic needs for survival Abraham Maslow suggested a theory of human motivation, where humans Are motivated to satisfy their needs according to the hierarchy. People are Motivated to satisfy their basic physical and safety needs first, them move Towards the higher levels. Maslow’s theory has been useful to marketers And advertisers. 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 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 selffulfillment and realize personal potential Transcendence: motivated by a desire to help others find self-fulfillment and realize their potential 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 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 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 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 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 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 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 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 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 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