Transcript No Slide Title

THE CONCEPT
OF
INTERNATIONAL MARKETING
MANAGEMENT VS
GLOBALIZATION
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Globalization
• The shift towards a more integrated and
interdependent world economy.
• Two components:
.The globalization of markets.
.The globalization of production.
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Forces Affecting Global Integration
Driving Forces
Technology
Culture
Market Needs
Cost
Restraining Forces
Culture
Market Differences
Costs
National Controls
Free Markets
Economic Integration
Peace
Management Vision
Nationalism
War
Management Myopia
Strategic Intent
Domestic Focus
Global Strategy
& Action
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Organisation History
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Being Globally Aware
 To be Globally Aware is to be:
Objective
 Tolerant of Cultural Differences

 Knowledgeable of:




Cultures
History
World Market Potentials
Global Economic, Social and Political
Trends
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Stages of International Marketing
Involvement
1. No Direct Foreign Marketing
2. Infrequent Foreign Marketing
3. Regular Foreign Marketing
4. International Marketing
5. Global Marketing
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Trends in Global Business
Countries are striving to integrate Businesses:
EU
EAC
SADC
COMESA
NAFTA
Etc
This suggests a need for global thinking
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New and Future (Possible) Multinational Market
Groups or Trading Blocks of the 21st Century

European Union

European Economic Area (EC and EFTA)

North American Free Trade Area

Southern Cone-Mercosur

Asean Free Trade Area (AFTA)

Commonwealth of Independent States (CIS)

Central European Free Trade Area (CEFTA)
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So…….
WHAT IS
INTERNATIONAL MARKETING?
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INTERNATIONAL MARKETING
“Marketing carried on across national
boundaries”
- Vern Tepstra
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International Marketing:
The performance of business activities
designed to plan, price, promote and direct
the flow of a company’s goods and services
to consumers or users in more than one
nation for profit.
Philip R. Cateora
John L. Graham
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The International Marketing Task
Foreign environment
(uncontrollable)
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Political/legal
forces
Domestic environment
(uncontrollable)
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Cultural
forces
Political/
legal
forces
(controllable)
Price
Promotion
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Geography
and
Infrastructure
2
Competitive
structure Competitive
Forces
Product
Channels of
distribution
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Structure of
distribution
3
Level of
Technology
Economic climate
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Economic
forces
Environmental
uncontrollables
country market A
Environmental
uncontrollables
country
market B
Environmental
uncontrollables
country
market C
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International Marketing Concepts
Concept
EPRG Scheme
Domestic Market Extension
Ethnocentric
Multi-Domestic Market
Polycentric
Global Marketing
Regionocentric/
Geocentric
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A Comparison of Assumptions About Global and
International Companies
Application
Global Companies
International Companies
Design
International performance
criteria considered during
design stage.
Products are in different
stages of the product
life cycle in each nation.
Adjustments to products
initially designed for
domestic markets.
Adaptation
Products are adapted to
global wants and needs.
Restrained concern for
product suitability.
Products adaptation is
necessary in markets
characterized by national
differences.
Market
Segmentation
Segments reflects group
similarities. Group similar
segments together.
Segments reflect differences
Customized products for
each segments.
Fewer standardized markets.
Expansion of segments into
worldwide proportions
Many customized markets.
Acceptance of regional/
national differences.
Product Life Cycle
Global product life cycles.
All consumers want the
most advanced products
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A Comparison of Assumptions About Global and
International Companies
Application
Global Companies
International Companies
Competition
Ability to compete in national
markets is affected by a firm’s
global position
Domestic / national competitive
relationships
Production
Globally standardized production.
Adaptations are handled through
modular designs.
Standardization limited by
requirements to adapt
products to national tastes..
The Consumer
Product
Global convergence of
consumer wants and
needs.
Emphasis on value-enhancing
distinction.
Price
Consumers prefer a globally
standardized good if it carries a
lower price
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Preferences reflect national
differences.
Products differentiated on the
basis of design, features,functions,
style and image.
Consumers willing to pay more for a
customized product
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A Comparison of Assumptions About Global and
International Companies
Application
Global Companies
International Companies
Promotion
Global product image,
sensitive to national
differences and global needs.
National product image, sensitive
to national needs.
Place
Global standardization of
distribution.
National distribution
channels.
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• Self Reference Criteria (SRC):
Represents viewing rest of the
world from the perspective of home
market.
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Cross Cultural Analysis to Isolate
the SRC Influences
Step 1: Define the business problem or goal in homecountry cultural traits, habits, or norms.
Step 2: Define the business problem or goal in
foreign-country cultural traits, habits, or
norms. Make no value judgements.
Step 3: Isolate the SRC Influence in the problem and
examine it carefully to see how it complicates
the problem.
Step 4: Redefine the problem without the SRC
influence and solve for the optimum business
goal situation.*
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Framework of International Marketing
Commitment to Exports
Analyse
Internal Factors
• Products
• Resources
External Factors
• Market Environment
• Competition
Decide
Target Market
Entry Method
Marketing Strategy
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Set
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Target
Implement
Organise
Department
Subsidiary
Joint Venture
Allocate Resources
Budget
Arrange Resources
Export
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Review
Modify
Set New Targets
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Finally
‘Companies which will not accommodate
the concepts of internationalization are
destined to fail. The question is not whether
they will fail or not but just when they are
going to fail’
Elisante ole Gabriel, 2005
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