Transcript Principles of Marketing - Learning Management System

Principles of
Marketing
Lecture-41
Summary
of
Lecture-40
Creating Competitive
Advantage
Competitor Analysis
Steps

Identifying Competitors

Assessing Competitors

Selecting Competitors to
Attack or Avoid
Competitive
Strategies
Competitive
Positions

Market Leader

Market Challenger

Market Follower

Market Nicher
Global
Marketplace
Today’s Topics
Global Marketing
Reasons for
Global Marketing

Growth
–Access to new markets
–Access to resources

Survival
–Against competitors with
lower costs (due to increased
access to resources)

Global competitors attacking the
domestic market,

Foreign markets might offer higher
profit opportunities,

Domestic markets might be shrinking,

Need an enlarged customer base to
achieve economies of scale,

Reduce dependency on any one
market,

Customers might be expanding abroad.
Getting involved in
international
marketing: A five step
process
DO WE GET
INVOLVED IN
INTERNATINAL
MARKETING?
IF YES,
WHICH
MARKETS?
IMPACT ON
DOMESTICBASED
MARKETING?
HOW MUCH
COMMITMENT
IN EACH
MARKET?
HOW SHOULD
WE
REORGANIZE
OUR
OPERATIONS?
Global
Marketplace
Global competition is intensifying and few
industries are now safe from foreign
competition.
To compete, many companies are
continuously improving their products,
expanding into foreign markets and
becoming Global Firms.
Global firms face several major problems:
– Variable exchange rates,
– Unstable governments,
– Protectionist tariffs and trade barriers,
– Corruption.
Global Vision
 Recognizing
and reacting to
international marketing
opportunities;
 Being
aware of threats from
foreign competitors in all
markets;
 Effectively
using international
marketing mix opportunities
Decisions in
International/Global
Marketing
Looking at the global marketing
environment
Deciding whether to go
international
Deciding which markets to
enter
Deciding how to enter the
market
Deciding on the global
marketing program
Deciding on the global
marketing organization
Looking at the
Global Marketing
Environment
The International Trade System
The World Trade Organization and GATT
Regional Free Trade Zones
The International Trade System
– Tariffs, quotas, embargos, exchange
controls, nontariff trade barriers
– World Trade Organization and GATT
– Regional free trade zones
• European Union
• North American Free Trade
Agreement
• Other free trade areas
Just a reminder….
Infrastructure
A nation’s basic conditions in
transportation networks,
communication systems, ad
energy facilities.
Exchange Rate
The price of one nation’s
currency in terms of another
country’s currency.
Tariff
A tax levied on imported
goods.
Import Quota
An administrative trade
restriction that limits the number
of units of a certain good that
can enter a country for resale.
Embargo
An administrative trade
restriction that imposes a
complete ban on imports
of a specified product.
Dumping
The controversial trade practice
of selling a product in a foreign
market at a lower price than it
commands in the producer’s
domestic market.
General Agreement
on Tariffs and Trade
(GATT)
An international trade accord
that has helped to reduce
worldwide tariffs.
World Trade Organization
(WTO)
A 125-member organization that
succeeds GATT in overseeing trade
agreements, mediating disputes, and
reducing trade barriers, unlike GATT
provisions, WTO decisions are
binding.
North American Free-Trade
Agreement (NAFTA)
An accord to remove trade
barriers among Canada,
Mexico, and the United
States.
Looking at the
Global Marketing
Environment
Economic
Environmental
Factors
Subsistence
Economies
Industrial
Economies
Country’s
Industrial
Structure
Industrializing
Economies
Income Distribution
Raw Material
Exporting
Economies
Political-Legal
Environmental Factors
Attitudes
Toward
International
Buying
Government
Bureaucracy
Monetary
Regulations
Political
Stability
Cultural
Environmental
Factors
How Customers
Think About and
Use Products
Cultural Traditions,
Preferences, and
Behaviors
Business
Norms and
Behavior
Deciding
Which Markets
to Enter
• Consistent with objectives and
culture of firm
• Demographic Characteristics
• Economic Factors
• Sociocultural factors
• Technological factors
Define Organization’s Marketing Objectives
and Policies
What Volume of Foreign Sales is Desired?
How Many Countries Should the Firm Go Into?
What Types of Countries Should be Entered?
Rank by Market Size & Growth, Cost of Doing
Business, Competitive Advantage, & Risk Level.
Deciding How
to Enter the
Market
Amount of Commitment, Risk, Control,
and Profit Potential
Greater
Lesser
Direct Investment
Joint Venturing
Exporting
• 1st level: Exporting
• 2nd level: Joint Venturing
– Franchising
– Licensing
– Contract manufacturing
– Joint ownership
• 3rd level: Direct Investment
Deciding on the
Global Marketing
Program
Five International Product and
Promotion Strategies
Promotion
Product
Don’t
Change
Promotion
Adapt
Promotion
Don’t Change
Product
Adapt
Product
Straight
Extension
Product
Adaptation
Communication
Adaptation
Dual
Adaptation
Product Invention
Develop New Product

Straight product expansion
• Marketing the product with no
changes

Product adaptation
• Altering the product to meet local
conditions or
the wants of the foreign market

Product invention
• Creating new products or services
for foreign markets
Global Pricing
Strategies
Companies face many problems
• Price escalation
• Pricing to foreign
subsidiaries
• Recent economic and
technological forces
• The Internet
Possibilities in setting
prices include:
– Charge a uniform price all around
the world.
– Charge what consumers in each
country could pay.
– Use a standard markup of its
costs everywhere.
Whole-Channel Concept
for Distribution
Seller
Seller’s Headquarters
Channels Between Nations
Channels Within Nations
Final User or Buyer
Global Promotion
Strategies
Standardized global
communication
• Advertising themes are
standardized from country to
country with slight
modifications
Communication adaptation
• Advertising messages are fully
adapted to local markets
Managing
International
Marketing Activities
Step 1: Organize export
department
Step 2: Create an
international division
Step 3: Become a global
organization
Think Globally
Act Locally
Enough for
today. . .
Summary
Global Marketing
Global
Marketplace
Looking at the global marketing
environment
Deciding whether to go
international
Deciding which markets to
enter
Deciding how to enter the
market
Deciding on the global
marketing program
Deciding on the global
marketing organization
Think Globally
Act Locally
Next….
e-Marketing
Principles of
Marketing
Lecture-41