ABM 170IntroductionTo International Marketing

Prepared By:Keno Jay M. Balogbog Instructor III1-*

COURSE DESCRIPTIONThis course will present an overview of the unique aspects of marketing in the inter- national business environment and provide the framework upon which multinational marketing management can be based. Emphasis will be placed on the role of the international marketing manager in the development of marketing strategies for a variety of markets in diverse cultural, political and economic situations. Focus will be on the decision making process in the areas of foreign market analysis, target identification, product planning, promotion and channels of distribution.1-*

Course Objectives Upon successful completion of this course, students will: Understand how the basic principles of marketing are applied in a variety of diverse cultural, political, legal and economic environments 2. Be able to analyze foreign markets to determine their overall export potential 2005 Prentice Hall1-*

3. Understand the benefits that nations derive from unrestrained free trade. 4. Be able to design strategies for global competition .5. Be able to explain the various methods of entering foreign markets, the degree of commitment required and the associated levels of risk . 2005 Prentice Hall1-*

6. Have a basic understanding of the types of documentation required for transaction between firms in different nations.7. Know how international marketers develop pricing strategies for goods sold abroad. 8. Understand the basic principles, objectives, and problems in developing international channels of distribution . 2005 Prentice Hall1-*

9. Understand the concepts of product life cycle and classification of goods and their importance for foreign market acceptance, product adaptation and overall marketing strategy decision making. 10. Be able to identify sources of foreign market information including secondary data from both governments and private industry. 11. Be aware of the various techniques used by modern marketers for segmenting foreign markets in both the consumer and industrial sectors. 1-*

Course Requirements2 Major Exams Cases Group project foreign market analysis QuizzesAlternativeDebateTopic:Pros&Cons (Self point of view) 2005 Prentice Hall1-*

1-*Chapter 1 Introduction to Global Marketing

Case No. 1StarbucksGoing Global Fast

Deadline: Nov. 21, 2014 9:00am 2005 Prentice Hall1-*

1-*IntroductionWhat is Global Marketing?How is it different from regular marketing?

1-*IntroductionMarketingProcess of planning and executing the conception pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organization goals

Global MarketingFocuses resources on global market opportunities and threats; the main difference is the scope of activities because global marketing occurs in markets outside the organizations home country

1-*Reasons for Global MarketingGrowth Access to new markets Access to resourcesSurvivalAgainst competitors with lower costs (due to increased access to resources)

1-*Overview of MarketingOne of the functional areas of a business that is distinct from finance and operationsPrimary tools in marketing are product, price, place, and promotionMarketing is an activity that comprises the firms value chainCurrent trend is to involve marketers in all value-related decisions called boundaryless marketing

*The authors of the text expect that the student has had a principles of marketing class and is familiar with the basic concepts of marketing. In this slide we are providing a rough overview of the discipline of marketing. The value chain will be expanded in the next few slides.

1-*Boundaryless MarketingGoal is to eliminate communication barriers between marketing and other business functional areasProperly implemented it ensures that a market orientation permeates all value creating activities

*This shift in marketing has created organizations that are more customer focused than in past decades. This new focus could do away with a conflict that happens in corporations today which is highlighted in the picture. One department thinks it has a great idea but the marketing department knows it is a bad idea. Because the marketing department was not involved with the decision the company has invested a great deal of resources pursuing an idea that cannot be implemented.

1-*Goal of MarketingSurpass the competition at the task of creating perceived value for customersThe Guide line is the value equation

Value = Benefits/Price (Money, Time, Effort, Etc.)

*Companies use the marketing mix to create value for customers. As a general rule, value, as perceived by the customer, can be increased in two basic ways. Markets can offer customers an improved bundle of benefits or lower prices (or both!). Marketers may strive to improve the product itself, to design new channels of distribution, to create better communications strategies, or a combination of all three. Marketers may also seek to increase value by finding ways to cut costs and prices. Non-monetary costs are also a factor, and marketers may be able to decrease the time and effort that customers must expend to learn about or seek out the product. If a company is able to offer a combination of superior product, distribution, or promotion benefits and lower prices than the competition, it enjoys an extremely advantageous position. The next slide illustrates the value chain.

1-*Value Chain and Boundaryless Marketing

*This slide illustrates how all employees, at all levels, and in all departments have the opportunity to be involved in marketing.

1-*Competitive AdvantageSuccess over competition in industry at value creationAchieved by integrating and leveraging operations on a worldwide scale

1-*GlobalizationGlobalization is the inexorable integration of markets, nation-states, and technologies to a degree never witnessed before - in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations, and nation-states farther, faster, deeper, and cheaper than ever before.Thomas Friedman

1-*Global IndustriesAn industry is global to the extent that a companys industry position in one country is interdependent with its industry position in another countryIndicators of globalization:Ratio of cross-border trade to total worldwide productionRatio of cross-border investment to total capital investmentProportion of industry revenue generated by companies that compete in key world regions

1-*Competitive Advantage, Globalization and Global IndustriesFocusConcentration and attention on core business and competence

Nestle is focused: We are food and beverages. We are not running bicycle shops. Even in food we are not in all fields. There are certain areas we do not touch..We have no soft drinks because I have said we will either buy Coca-Cola or we leave it alone. This is focus.Helmut Maucher

*Achieving competitive advantage in a global industry requires executives and managers to maintain a well-defined strategic focus.

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*Based in Atlanta, Georgia, Southern Company is the largest producer of electricity in the United States. In response to the globalization of the power industry, its Southern Energy subsidiary is actively acquiring power companies in both Asia and Europe.

1-*Global Marketing: What it is and What it isntStrategy development comes down to two main issues similar to single country marketingTarget marketMarketing Mix

*The discipline of marketing is universal. It is natural, however, that marketing practices will vary from country to country, for the simple reason that the countries and peoples of the world are different. These differences mean that a marketing approach that has proven successful in one country will not necessarily succeed in another country. Customer preferences, competitors, channels of distribution, and communication media may differ. An important task in global marketing is learning to recognize the extent to which marketing plans and programs can be extended worldwide, as well as the extent to which they must be adapted.

1-*Global Marketing: What it is and What it isnt

*This slide highlights the differences between marketing in a single-country and global marketing. The table and notes are from the text. Global market participation is the extent to which a company has operations in major world markets. Standardization versus adaptation is the extent to which each marketing mix element can be standardized (i.e., executed the same way) or adapted (i.e., executed in different ways) in various country markets. GMS has three additional dimensions that pertain to marketing management. First, concentration of marketing activities is the extent to which activities related to the marketing mix (e.g., promotional campaigns or pricing decisions) are performed in one or a few country locations. Coordination of marketing activities refers to the extent to whichmarketing activities related to the marketing mix are planned and executed interdependently around the globe. Finally, integration of competitive moves is the extent to which a firms competitive marketing tactics in different parts of the world are interdependent. The GMS should be designed to enhance the firms performance on a worldwide basis.

1-*Global Marketing: What it is and What it isntGlobal marketing does not mean doing business in all of the 200-plus country marketsGlobal marketing does mean widening business horizons to encompass the world in scanning for opportunity and threat

1-*Standardization versus AdaptationGlobalization (Standardization)Developing standardized products marketed worldwide with a standardized marketing mixEssence of mass marketingGlobal localization (Adaptation)Mixing standardization and customization in a way that minimizes costs while maximizing satisfactionEssence of segmentationThink globally, act locally

1-*Standardization versus Adaptation

*Coca-Colas example of global branding.

1-*The Importance of Global MarketingFor US-based companies, 75% of sales potential is outside the US.About 90% of Coca-Colas operating income is generated outside the US.For Japanese companies, 85% of potential is outside Japan.For German and EU companies, 94% of potential is outside Germany.

1-*Management OrientationsEthnocentric:Home country is Superior, seesSimilarities in foreignCountriesRegiocentric:Sees similarities and differences in a worldRegion; is ethnocentric or polycentric in its view of the rest of the worldGeocentric:World view, seesSimilarities andDifferences in homeAnd host countriesPolycentric: Each host country IsUnique, sees differencesIn foreign countries

*Ethnocentrism is sometimes associated with attitudes of national arrogance or assumptions of national superiority.Company personnel with an ethnocentric orientation see only similarities in markets, and assume that products and practices that succeed in the home country will be successful anywhere.

The term polycentric describes managements belief or assumption that each country in which a companydoes business is unique. This assumption lays the groundwork for each subsidiary to develop its own unique business and marketing strategies in order to succeed; the term multinational company is often used to describe such a structure.

In a company with a regiocentric orientation, a region becomes the relevant geographic unit; managements goal is to develop an integrated regional strategy.

A company with a geocentric orientation views the entire world as a potential market and strives to develop integrated world market strategies.

1-*Forces Affecting Global Integration and Global MarketingDriving ForcesRegional economic agreementsMarket needs and wantsTechnologyTransportation and communication improvementsProduct development costsQualityWorld economic trendsLeverage

Restraining ForcesManagement myopiaOrganizational cultureNational controls

*The next slide will show the interplay between the driving and restraining forces. This slide outlines what these forces include.

Regional economic agreements, converging market needs and wants, technology advances, pressure to cut costs, pressure to improve quality, improvements in communication and transportation technology, global economic growth, and opportunities for leverage all represent important driving forces; any industry subject to these forces is a candidate for globalization.

Despite the impact of the driving forces identified previously, several restraining forces may slow a companys efforts to engage in global marketing. In addition to the market differences discussed earlier, important restraining forces include management myopia, organizational culture, national controls, and opposition to globalization. As

1-*Forces Affecting Global Integration and Global Marketing

GlobalIntegration andGlobal Marketing

1-*Overview of BookPart I: Overview of Global MarketingPart II: Environments of Global MarketingPart III: Global StrategyPart IV: Global Considerations of the Marketing MixPart V: Integrating the Dimensions of Global Marketing

1-*Looking Ahead to Chapter 2The Global Economic Environment

*The authors of the text expect that the student has had a principles of marketing class and is familiar with the basic concepts of marketing. In this slide we are providing a rough overview of the discipline of marketing. The value chain will be expanded in the next few slides.*This shift in marketing has created organizations that are more customer focused than in past decades. This new focus could do away with a conflict that happens in corporations today which is highlighted in the picture. One department thinks it has a great idea but the marketing department knows it is a bad idea. Because the marketing department was not involved with the decision the company has invested a great deal of resources pursuing an idea that cannot be implemented.*Companies use the marketing mix to create value for customers. As a general rule, value, as perceived by the customer, can be increased in two basic ways. Markets can offer customers an improved bundle of benefits or lower prices (or both!). Marketers may strive to improve the product itself, to design new channels of distribution, to create better communications strategies, or a combination of all three. Marketers may also seek to increase value by finding ways to cut costs and prices. Non-monetary costs are also a factor, and marketers may be able to decrease the time and effort that customers must expend to learn about or seek out the product. If a company is able to offer a combination of superior product, distribution, or promotion benefits and lower prices than the competition, it enjoys an extremely advantageous position. The next slide illustrates the value chain.

*This slide illustrates how all employees, at all levels, and in all departments have the opportunity to be involved in marketing.*Achieving competitive advantage in a global industry requires executives and managers to maintain a well-defined strategic focus.*Based in Atlanta, Georgia, Southern Company is the largest producer of electricity in the United States. In response to the globalization of the power industry, its Southern Energy subsidiary is actively acquiring power companies in both Asia and Europe.*The discipline of marketing is universal. It is natural, however, that marketing practices will vary from country to country, for the simple reason that the countries and peoples of the world are different. These differences mean that a marketing approach that has proven successful in one country will not necessarily succeed in another country. Customer preferences, competitors, channels of distribution, and communication media may differ. An important task in global marketing is learning to recognize the extent to which marketing plans and programs can be extended worldwide, as well as the extent to which they must be adapted.*This slide highlights the differences between marketing in a single-country and global marketing. The table and notes are from the text. Global market participation is the extent to which a company has operations in major world markets. Standardization versus adaptation is the extent to which each marketing mix element can be standardized (i.e., executed the same way) or adapted (i.e., executed in different ways) in various country markets. GMS has three additional dimensions that pertain to marketing management. First, concentration of marketing activities is the extent to which activities related to the marketing mix (e.g., promotional campaigns or pricing decisions) are performed in one or a few country locations. Coordination of marketing activities refers to the extent to whichmarketing activities related to the marketing mix are planned and executed interdependently around the globe. Finally, integration of competitive moves is the extent to which a firms competitive marketing tactics in different parts of the world are interdependent. The GMS should be designed to enhance the firms performance on a worldwide basis.

*Coca-Colas example of global branding.*Ethnocentrism is sometimes associated with attitudes of national arrogance or assumptions of national superiority.Company personnel with an ethnocentric orientation see only similarities in markets, and assume that products and practices that succeed in the home country will be successful anywhere.

The term polycentric describes managements belief or assumption that each country in which a companydoes business is unique. This assumption lays the groundwork for each subsidiary to develop its own unique business and marketing strategies in order to succeed; the term multinational company is often used to describe such a structure.

In a company with a regiocentric orientation, a region becomes the relevant geographic unit; managements goal is to develop an integrated regional strategy.

A company with a geocentric orientation views the entire world as a potential market and strives to develop integrated world market strategies.*The next slide will show the interplay between the driving and restraining forces. This slide outlines what these forces include.

Regional economic agreements, converging market needs and wants, technology advances, pressure to cut costs, pressure to improve quality, improvements in communication and transportation technology, global economic growth, and opportunities for leverage all represent important driving forces; any industry subject to these forces is a candidate for globalization.

Despite the impact of the driving forces identified previously, several restraining forces may slow a companys efforts to engage in global marketing. In addition to the market differences discussed earlier, important restraining forces include management myopia, organizational culture, national controls, and opposition to globalization. As