Transcript Chapter Concepts

International Business
Oded Shenkar and Yadong Luo
Chapter 16
Global Marketing and
Supply Chain
Chapter 16: Global Marketing and Supply Chain
Do You Know?
• How to determine market potential of a
foreign country?
• What adaptations are necessary for a
product to sell in another country?
• That there can be domestic
manufacturing influence, translating to
product demand?
• That channel decisions are very
important in international marketing?
Chapter 16: Global Marketing and Supply Chain
Marketing Domino’s Internationally
• Domino’s opened its first foreign store
(Winnipeg) in 1983. Japan was in 1984;
United Kingdom was in 1985, Mexico was in
1989. It hit Taiwan in 1987, and Hong Kong in
1984.
• Per store sales volume in Asia is more than
twice the United States. Their secret: product
adaptation (corn and squid on pizza??),
pricing determination, national promotion and
advertising, and customized transportation
(the scooter in Asia).
Chapter 16: Global Marketing and Supply Chain
The International Marketing Challenge
• International markets offer vast
opportunities for firms with a product or
service in high demand.
• Newness, cultural adaptation,
attractiveness, and appropriate
marketing strategies can help
tremendously.
Chapter 16: Global Marketing and Supply Chain
Assessing Market Potential
• To assess market potential, firms seek
to identify the aggregate demand for a
product and estimate the costs
associated with product introduction and
distribution.
• Population growth provides a coarse
estimate of future market potential. So
do consumption patterns.
Chapter 16: Global Marketing and Supply Chain
Assessing Market Potential
Chapter 16: Global Marketing and Supply Chain
Globalization and Localization in
International Markets
• Striking a balance between globalization and
localization is a key challenge.
• Generally, the more closely defines the
market segment, the less important are
national stereotypes (Germans and ecology,
Italians on performance).
• Across national markets, there is a trend
toward greater similarity on product
specifications, price, and packaging. On the
other hand, cultural and national differences
exist and require flexibility in communication
with customers.
Chapter 16: Global Marketing and Supply Chain
Globalization Forces
• Global Brands (Kellogg’s, McDonalds,
Budweiser, Coke) are products that
enjoy worldwide recognition and are
relatively unaltered in terms of brand
and appearance when sold abroad.
Chapter 16: Global Marketing and Supply Chain
Globalization Forces
Exhibit 16-6: International decision making: more
vs. less successful companies
Chapter 16: Global Marketing and Supply Chain
Globalization Forces
Exhibit 16-7: Shared vision about global marketing
activities between country managers and global
marketing groups
Chapter 16: Global Marketing and Supply Chain
Globalization Forces
Exhibit 16-8: Use of globally uniform marketing practices
Chapter 16: Global Marketing and Supply Chain
Globalization Forces
Exhibit 16-9: Strength of (selected) individual
globalization drivers
Chapter 16: Global Marketing and Supply Chain
Globalization Forces
Chapter 16: Global Marketing and Supply Chain
Localization Forces
• Localization forces represent pressures
towards adjustment in product
marketing or distribution to make it more
appealing or to meet requirements
particular to a foreign market.
Chapter 16: Global Marketing and Supply Chain
Product Adaptation
• Faced with a foreign market with
different characteristics, a firm may
choose not to offer a product or a
service in that market, to offer the same
product it offers in other markets, or to
adapt it to regional or country
requirements.
• The Benefit/Cost approach and the
User/Needs approach help determine
whether adaptation is necessary.
Chapter 16: Global Marketing and Supply Chain
Product Adaptation
• McDonald’s Product Adjustments: The
Veggie Mac (Switzerland), Chicken Rice
(Singapore), no pork (Saudi), McMacos
and McFiesta (Paraguay), McKroket
(Netherlands), Teriyaki McBurger
(Japan), Curry Pie (Hong Kong),
McRoyal (Germany), McCafe
(Argentina), McCafe (Australia),
McPalta (Chile). Hey, you deserve a
break today!!
Chapter 16: Global Marketing and Supply Chain
Country-of-Origin Effect
• This is the influence of the country of
manufacturing image on the buying
decision.
• The effect consists of innovativeness;
design; and workmanship.
• There is strong evidence that country of
origin influences buyer’s decisions.
Chapter 16: Global Marketing and Supply Chain
Branding
Branding is the process of creating and
supporting positive perceptions associated
with a product or service. Branding is
especially complex in the international
market. Some issues:
• Selecting the right name
• Understand the local market
• Fine tune the size, price, value construct
• Quality/reliability at competitive price
• Holistic marketing using multiple channels
…/…
Chapter 16: Global Marketing and Supply Chain
Branding
• Turning trademarks into “trustmarks”
• Establishing leadership brands, and
changing social habits
• Selecting allies and partners
Chapter 16: Global Marketing and Supply Chain
Channel Decisions
• Export Intermediary choice is very
important
• Direct Marketing is a potential channel
• Niche marketing is also very viable
Chapter 16: Global Marketing and Supply Chain
Promotion
• It is important to choose the right mix
marketing communications like
advertising and direct marketing.
Chapter 16: Global Marketing and Supply Chain
Marketing Alliances
• Marketing Alliances are frequently very
important because they serve as
partners in the marketing
communications effort.
Chapter 16: Global Marketing and Supply Chain