Chapter 2 Marketing strategy across borders

Lecture Overview

Introduction
Strategy as process:
The marketing audit Mission, objectives, strategies and structures Stakeholder value analysis Inter-market segmentation Market selection The marketing plan Implementation.

Learning objectives
Describe the marketing audit process. Examine how mission, objectives, strategies and structures interrelate and their impact on marketing strategy. Explain the importance of responding to all stakeholders in international marketing. Describe how inter-market segments are defined and targeted. Explain how firms evaluate and select target inter-market segments. Analyse how resources and competencies impact on marketing strategies. Discuss how firms decide on adaptation/standardisation. Describe the contents and crafting of an international marketing plan.

Introduction
This chapter focuses on international marketing strategy and introduces a seven-step process for managing it.
Strategies are the plans, means of getting from here to there, patterns of behaviour, and position in relation to product markets or competitors that emerge as a firm acts to achieve its objectives.

The basic premise is that

International marketers are most effective when they engage in a continual process of gathering, sharing and using information about customers, other stakeholders, competitors and their environment in order to understand marketplace dynamics, anticipate current and potential industry participants behaviour and then to craft effective international marketing strategies.

Strategy as process (continued)

International marketers that follow this systematic approach are said to have adopted a:

Market orientation

Market orientation
Market orientation essentially has three main building blocks:
insight (acquiring, sharing and analysing information)

intent (sharing knowledge about stakeholder preferences and agreeing about appropriate strategic response)
interaction (implementing intended strategies, observing stakeholder responses and continually adapting to stakeholder preferences and improving customer experiences).

The strategic marketing wheel

Step 1 The marketing audit

The marketing audit focuses on the firms:
marketing environment competitive environment resources and distinctive competencies and performance

Its purpose is to evaluate performance and identify the current and future realities upon which its strategic planning will be based

The marketing audit (continued)

Marketing audits comprise six main activities:
The marketing environment audit The marketing strategy audit The marketing organisation audit The marketing systems audit The marketing function audit The marketing productivity audit

Step 2 Vision, mission, objectives, strategies and structure

The decision to engage in international marketing has immediate implications for the vision, mission, objectives, strategies and structures of any firm.
Particularly relevant when you have previously only engaged in limited international activities.

Vision Statement
The vision statement outlines aspirations for the future position of the firm the reasons why it intends to achieve that position its enduring purpose (longer-term reason for being) intentions to meet future stakeholders needs.

Mission Statement
The mission statement concerns the present business scope and purpose.
It gives life to the vision by identifying:
current stakeholders (who we serve)
unique capabilities (what we do) competencies and resources (how we do it).

Objectives
Objectives are SMART: strategic measurable achievable realistic and time-bound goals
They translate the mission and vision into more detailed strategies and tactics. They serve as performance targets by which firms evaluate financial and strategic performance.

Strategies
Strategies are the plans developed to achieve objectives.
International marketers need to develop:
Corporate strategies Business strategies Competitive strategies.

Strategies (continued)
Generic strategies include:
Overall cost leadership Differentiation Focus strategies

Alternative typology:
Prospectors Defenders Analysers Reactors

Structure
Can be organised based on infrastructure, geography, customers, technological complexity, value chain relations etc. Organisational culture is intrinsically part of organisational structure. Concept of Ubuntu should be incorporated into structure.

Step 3 Stakeholder value analysis

Developing and implementing successful marketing strategies relies on an empathetic understanding of how consumers derive value from a product.
Strategic cost analysis explores the links the firms cost structures and the perceived value delivered to the market. The strategic profit model (also called the DuPont model after its originators) can provide a very useful basis for such comparisons.

The strategic profit model

Step 4 Intermarket segmentation

International market segmentation is: the process of defining relatively homogeneous groups based on shared preferences that relate to purchase and consumption behaviour. Intramarket segmentation focuses: on segmentation conducted in one country.
Intermarket segmentation focuses: on identifying meaningful segments that can be found in many countries.

Market segmentation, targeting and positioning

Selected bases for segmenting consumer markets

Selected bases for segmenting organisational markets

Segmentation best practice Six criteria:

Identifiable Sustainable Accessible Stable Actionable Responsive.

Step 5 Market selection

An ongoing process of market appraisal and assessment in which international marketers choose the locations in which they will serve their targeted intermarket segments The regulatory and legal influence on operations The likely nature and structure of competition Resources and market participation strategies Assessing risk and rewards Standardisation and adaptation.

Step 5 Market selection (continued)

Six broad categories of evaluative criteria:
The market and its potential The regulatory and legal influence on operations The likely nature and structure of competition Resources and market participation strategies Assessing risk and rewards Standardisation and adaptation.

Standardisation and adaptation

Standardisation strategies:
seek to capture benefits by minimising variations in the marketing mix between countries.

Adaptation strategies:
seek to maximise responsiveness to local variations in preferences by varying the marketing mix.

Step 6 The marketing plan

Executive summary Marketing objectives Situational analysis Marketing environment Competitive environment Summary: SWOT Segmentation, targeting and positioning

The marketing plan (continued)

Country strategies Marketing mix strategies Resources Key success factors and assumptions Scheduling, controls and evaluation.

Step 7 Implementation
Plan is put into practice
Be prepared for constant change Two broad types of controls can be put into place:
Monthly performance reviews Quarterly strategy reviews

Summary
This chapter introduced a framework for crafting effective international marketing strategies. It emphasised that international marketing takes place in a dynamic and complex competitive environment in which success comes to firms that provide sustainable superior solutions to stakeholders, especially customers.