International Marketing

Strategic marketing according to Wensley (1982) has been defined as: "Initiating negotiating and managing acce!table e"change relationshi!s #ith key interest gro$!s or constit$encies in the !$rs$it of s$stainable com!etiti%e ad%antage #ithin s!ecific markets on the basis of long r$n cons$mer channel and other stakeholder franchise"& S& 'arter defines marketing as: "(he !rocess of b$ilding lasting relationshi!s thro$gh !lanning e"ec$ting and controlling the conce!tion !ricing !romotion and distrib$tion of ideas goods and ser%ices to create m$t$al e"change that satisfy indi%id$al and organi)ational needs and ob*ecti%es"& The four stages are as follows: 1& Stage one: domestic in foc$s #ith all acti%ity concentrated in the home market& Whilst many organi)ations can s$r%i%e like this for e"am!le ra# milk marketing solely domestically oriented organi)ations are !robably doomed to long term fail$re& 2& Stage two: home foc$s b$t #ith e"!orts (ethnocentric)& +robably belie%es only in home %al$es b$t creates an e"!ort di%ision& ,s$ally ri!e for the taking by stage fo$r organi)ations& -& Stage three: stage t#o organi)ations #hich reali)e that they m$st ada!t their marketing mi"es to o%erseas o!erations& (he foc$s s#itches to m$ltinational (!olycentric) and ada!tion becomes !aramo$nt& .& Stage four: global organi)ations #hich create %al$e by e"tending !rod$cts and !rogrammes and foc$s on ser%ing emerging global markets (geocentric)& (his in%ol%es recogni)ing that markets aro$nd the #orld consist of similarities and differences and that it is !ossible to de%elo! a global strategy based on similarities to obtain scale economies b$t also recogni)es and res!onds to cost effecti%e differences& Its strategies are a combination of e"tension ada!tation and creation& It is $n!redictable in beha%ior and al#ays alert to o!!ort$nities& /International marketing is the !rocess of foc$sing the reso$rces and ob*ecti%es of an organi)ation on global market o!!ort$nities& /(he #orld economy has globali)ed& /0aster comm$nication trans!ortation and financial forms&

Si" ste!s in international marketing: 2ooking at the international marketing en%ironment 8eciding #hether to go abroad 8eciding #hich markets to enter

8eciding ho# to enter the market

8eciding on the marketing !rogram

8eciding on the marketing organi)ation

S(1+1 2ooking at the international marketing en%ironment /3efore deciding #hether to sell abroad a com!any m$st thoro$ghly $nderstand the international marketing en%ironment& (he international trade system (some trade restrictions) (ariff/ a ta" le%ied by a go%ernment against certain im!orted !rod$cts #hich is designed to raise re%en$e or to !rotect domestic firms& 4$ota/ a limit on the amo$nt of goods that an im!orting co$ntry #ill acce!t in certain !rod$ct categories5 it is designed to conser%e on foreign e"change and to !rotect local ind$stry and em!loyment& 1mbargo/ a ban on the im!ort of a certain !rod$ct& 1"change controls/ limits !laced by a go%ernment on the amo$nt of its foreign e"change #ith other co$ntries and on its e"change rate against other c$rrencies& 6on/tariff trade barriers/ non/monetary barriers to foreign com!any7s bids or !rod$ct standards that go against foreign com!any7s !rod$ct feat$res& 1conomic comm$nity/ a gro$! of nations organi)ed to #ork to#ard common goals in the reg$lation of international trade&

1conomic 1n%ironment /(he international marketer m$st st$dy each co$ntry co$ntry7s economy& (#o economic factors reflect the co$ntry7s attracti%eness as a market: the countrys industrial structure and its income distribution& /0o$r ty!es of the countrys industrial structure:

S$bsistence economies (ma*or sim!le agric$lt$re) 9a#/material/e"!orting economies (e"!orting reso$rces e&g& coffee) Ind$striali)ing economies (man$fact$ring) Ind$strial economies (e"!ort man$fact$red goods and in%est f$nds)

+olitical/2egal 1n%ironment /0o$r factors the com!any needs to consider 1& :ttit$des to#ard international b$ying 2& +olitical stability -& Monetary reg$lations .& ;o%ernment b$rea$cracy '$lt$ral 1n%ironment /1ach co$ntry has its o#n folk#ays norms and taboos& So the seller sho$ld kno# more abo$t the c$lt$re and b$siness !ractices of other co$ntries&

S(1+2 8eciding #hether to go abroad /6ot all com!anies need to %ent$re into foreign markets to s$r%i%e& 0or e"am!le many com!anies are local b$sinesses that need to market #ell only in the local market!lace& <o#e%er com!anies that o!erate in global ind$stries #here their strategic !ositions in s!ecific markets are strongly affected by their o%erall global !ositions m$st thick and act globally& /3efore going abroad the com!any m$st #eigh se%eral risks and ans#er many =$estions abo$t its ability to o!erate globally& S(1+ - 8eciding #hich markets to enter /3efore going abroad the com!any sho$ld try to define its international marketing objectives and policies& i& What %ol$me of foreign sales it #ants ii& <o# many co$ntries it #ants to market in iii& (y!es of co$ntries to enter /:fter listing !ossible international markets the com!any m$st screen and rank each one& S(1+. 8eciding ho# to enter the market />nce a com!any has decided to sell in a foreign co$ntry it m$st determine the best mode of entry& Its choices are e"!orting *oint %ent$ring com!ensation trade and direct in%estment&

1"!orting Indirect 8irect

?oint @ent$ring 2icensing 'ontract man$fact$ring Management contracting ?oint o#nershi!

8irect In%estment :ssembly facilities Man$fact$ring facilities

:mo$nt of commitment ask control and !rofit !otential

1"!orting /1ntering a foreign market by e"!orting !rod$cts and selling them thro$gh international marketing middlemen (indirect e"!orting) or thro$gh the com!any7s o#n de!artment branch or sales re!resentati%es or agents (direct e"!orting)& ?oint @ent$ring 1ntering foreign markets by *oining #ith foreign com!anies to !rod$ce or market a !rod$ct or ser%ice& (here a fo$r methods: 2icensing/ a method of entering a foreign market in #hich the com!any enters into an agreement #ith a licensee in the foreign market offering the right to $se a man$fact$ring !rocess trademark !atent trade secret or other item of %al$e for a fee or royalty& 'ontract Man$fact$ring/ *oint %ent$ring to enter a foreign market by contracting #ith man$fact$rers in the foreign market to !rod$ce the !rod$ct& Management contracting/ a *oint %ent$re in #hich the domestic firm s$!!lies the management kno#/ ho# to a foreign com!any that s$!!lies the ca!ital5 the domestic firm e"!orts management ser%ices rather than !rod$cts& ?oint o#nershi!/ entering a foreign market by *oining #ith foreign in%estors to create a local b$siness in #hich the com!any shares *oint o#nershi! and control& 8irect in%estment /1ntering a foreign market by de%elo!ing foreign/based assembly or man$fact$ring facilities& S(1+A 8eciding on the marketing !rogram /'om!anies that o!erate in one or more foreign markets m$st decide ho# m$ch if at all to ada!t their marketing mi"es to local conditions& /:t one e"treme are com!anies that $se a standardi)ed marketing mi" #orld#ide&

Standardi)ation of the !rod$ct ad%ertising distrib$tion channels and other elements of the marketing mi" !romises the lo#est costs beca$se no ma*or changes ha%e been introd$ced& /:t the other e"treme is an ada!ted marketing mi"& (he !rod$cer ad*$sts the marketing mi" elements to each target market bearing more costs b$t ho!ing for a larger market share and ret$rn& +rod$ct 1& Straight !rod$ct e"tension/ marketing a !rod$ct in the foreign market #itho$t any change& 2& +rod$ct ada!tation/ ada!ting a !rod$ct to meet local conditions or #ants in foreign markets& -& +rod$ct in%ention/ creating ne# !rod$cts or ser%ices for foreign markets& +rice +romotion 8istrib$tion 'hannels

S(1+B 8eciding on the marketing organi)ation 'om!anies manage their international marketing acti%ities in at least three different #ays& Most com!anies first organi)e an export department then create an international division and finally become a global organization&