International Marketing PDF

International marketing Glocalization: global and local consideration Part 1 : analysis 3 levels : - micro : the company - meso : The industry : suppliers, competitions - macro : business environment 1.A / Demographic factor 8.2...

International marketing Glocalization: global and local consideration Part 1 : analysis 3 levels : - micro : the company - meso : The industry : suppliers, competitions - macro : business environment 1.A / Demographic factor 8.2 billions : 2024 : India China USA 9.8 billions 2050 98% of growth will be in emerging market Youth market : 42% of global population (under 25) Sub segment : Millenial Mom : 9 million → digital influenceurs Sub segment : Panks : professional Aunts No kids Sub segment : Silver generation Education level influence : buying behavior / communication / Workforce Family structure influence : Buying behavior /Decision process / consumer choices Health influence : Buying behavior / Decision process / Consumer preferences Multicultural : buying behavior / communication / Workforce Consumer preferences 1.B / Economic factor : 196 countries Traditional low-income economies: no trade or export – minimal waste – vulnerable Transitional resource exporting economies: corruption – social inequality – opportunities Developing economies: technological progress – improved standard of living – ecological damage Developed industrial economies: high import and export – high productivity – automation. Richest country in the world : Luxembourg (EU, transport route, taxes), Singapore (education, major hub, eco friendly), Ireland (education, foreign investment, EU), Qatar, Switzerland (low taxes, political stability), Norway (education, health care) BRICS by Jim O’Neill : 2001 : Brazil – Russia – India – China : economic financial cooperation – political influence but geopolitical tension MINT : 2014 : Mexico – Indonesia – Nigeria – Turkey : geostrategic position 1975 G8 / G7 : Canada – Germany – France – Italy – Japan – UK – US (-Russia) 2014 1.C / Socio cultural factor Culture and cultural differences is influencing by - Management - All company levels - The product mix (product, price, place, promotion) - Ethics - Consumer behavior and purchase decisions Culture = beliefs (opinion) + value (behavior) + customs (tradition) Australian : it’s your shout = your turn to buy drink 1.D / Technology Impact on everything - Production : processes, 3D printing. - Energy : Quatar look forward - Transport : connected car - Health : 3D printed / operation - Communication : big data - Data : AI : 1956 internet of things (Alexa sounder)/ blockchain 1.E / Ecological factor - SDGs - Seven deadly sins of greenwashing: - Vagueness “natural” - Trade-off “using organic cotton but don’t care about supply chain - No proof - Irrelevance - Fibbing: misleading statement - Lesser of two evils: products as environmentally friendly compared to an even more negative alternative - worshiping false labels 1.F/ Political factor 3 factors : Local domestic laws / internationals laws / domestics laws in the home country Lobbying : trying to influence legislation Politics can play several roles. - Stimulating role o Forms of cooperation (World Trade Organization) o Taxes, credit o Information - Obstructing role o Financial: Extra cost for car who come from China for example o Non-Financial: quota o Nanny state index : which country deal with other concerning tabaco, etc. - Replacement role (government taking over business) o For alcohol for example, government has a store to sell alcohol PART 2 Strategy development FOR SME Why abroad ? - Reactive opportunities, possibility to lower your cost, currency movement. - Proactive stimuli : attractive profit/growth opportunities – possession of unique products - Managerial elements: presence of export-minded manager Barriers - Work capital / knowledge / lack of managerial time Different strategies for SME Exporting : Lower financial risk and investment NICHE MARKETING : promoting and selling a product or service to a specialized segment of a market (price, demographic, market) Domestically delivered - Local economic importance / Destination marketing E-commerce - Like amazon / zalando Participation in the international supply chain of an MNE (multinational enterprise) : Piggybacking: In foreign markets in which a SME(the rider), deals with a larger company (the carrier) which already operates in a foreign marketing FOR MNE 1) Global strategies Global strategy = a detailed plan for how a business or product can be successful in all parts of the world. 2) 3) Strategic approaches Standardization and adaptation ➔ Economies of scale effect: cost advantages reaped by companies when production becomes efficient. ➔ Benefits ➔ Standardization = Strategy / objectives / image and adaptation = sales force / distribution / pricing 4) International business strategies ➔ Global strategy : high global integration – low local responsiveness (no distinction between country). Pzyzer for example. Economics of scale ➔ Multidomestic strategy : low global integration – high local responsiveness (adaptation to local is necessary) Nestle ➔ Transnational strategy : high global integration – high local responsiveness : maximize local responsiveness + benefits from global integration. McDonald  ➔ International Strategy : Low global integration –Low local responsiveness : Production in home country –exported all over the world 5) Emerging market Electric 6) International marketing management McKinsey 7s Framework: strategy / structure / systems / style / skills / staff / shared values 7) Market selection 8) International development Born global: Tesla, growing as a company Born local: Very small Family networking: ethnic Chinese : 1% of the Philippines control 40% of the economy Leading innovation hub : Silicon Valley / Singapore / Shanghai Start-up : Beijing / Melbourne / Lisbon How ? (Entry strategies) - What level of CONTROL do we require ? - What level of RISK are we willing to take ? - What COST can we afford to bear ? Indirect exporting : trying to increase profits quickly. Helped by intermediary. Simplest method lowest cost but less control and less opportunity 5 methods: - agents (independent, work on commission). Tupperware - distributors (buy and stock products, they take the risk). Chanel perfume - Brockers (independent private company). Alliance express. - Trading companies. Food products - Piggybacking: follow a bigger company Direct exporting : Make things yourself Less resource but direct investment for marketing Direct investment : - Product & services avoiding problems. - Logistics : cost of transporting and warehousing - Market : Local manufacturer - Foreign manufacturing strategies with direct investment o Most expensive (time resources) o Assembly : Assemble components o M&A : merge and Acquisition (Amazon, Microsoft) o Mergers Strategies alliances : Airbus - Contractual cooperation - No separate legal entity Opposite of Joint venture = shared ownership (create sperate company) New entity Licensing : get the right to use the copyright / and so on. How ? develop a clear policy and plan. Simpson Franchise : Gave them the right to use branding and product. Success for international growth. MACDO. PROCESS - Horizontal integration / expansion : companies that also sell the same goods and/or services abroad - Vertical expansion or integration: going upstream or downstream in the business column - Diversification: activities not directly related to the core business Part 2: Development of the Strategy: PRODUCT 1) Components of the international product offer 3 key questions: - Benefits for the customer : performance - image - The attributes of the product : Quality – packaging – design - Support service : installation – after sales – delivery – guaranty  2) Factor for adaptation Cultural factors Usage Legal: EU requirement Product liability: tobacco 3) Factors for standardization Homogeneous More identifiable consumer segments Economy of scale 4) Product strategy (exam question) a. Keep existing product i. No adjustment ii. Globalization b. Adjust existing product i. How ? product features, packaging ii. Why ? Cultural / usage / Legal / Product liability c. New features for existing products (expanding) i. Expand the scope : threads on Instagram ii. New customers or segments. Mondelez / coca cola d. New product i. Non-melting chocolate for hot country e. Elimination i. Heinz for example 5) Components a. Products characteristics i. Legal requirement: surimi erased from Europe. Kinder adjusting product packaging because of US rule ii. Market requirements: Sizing for clothing ; ingredients (oz , kg, etc) ; temperature (Celsius, Fahrenheit) iii. Consumer requirements : b. Packaging i. Role : protection / logistics / attract attention ii. Material : Trend ecology iii. Color : Black : expensive product  c. Brand – name – logo i. Piracy: fake brand; reverse engineering : product → take it into small pieces → new product. Counterfeiting: same name, lower quality d. Warranty i. Make sure someone takes care of goods. e. Home country i. Toblerone: not make it in Swiss so need to remove the mountain f. Labelling PART 3 : Implementation COMMUNICATION 1) Role of International communication 2) Challenges for International communications a. Inconsistency b. Different styles : brand image c. Lack of coordination of messages d. Differences in fields of perception (lack of knowledge of customer) e. Piracy – counterfeiting f. Pressure groups : Greenpeace or National Rifle Association (USA) g. Parallel importing: grey import : import without the permission of the owner h. Social proof i. From expert ii. From peers (friends) iii. From celebrities iv. From users v. Wisdom of crowds 3) Standardization: adaptation a. Standardization, why? When? i. Consistency ii. Visual, well know personality. iii. Difficult when: humor used. b. Adaptation i. IKEA: different culture = different catalogue 4) Integration a. Ryanair = react on Tik Tok  5) Tools a. Tools Advertising i. Video ii. Audio iii. Digital iv. OOH : Out Of Home v. Cinema : video from space to earth. British airways (airport, train station, etc Globalization : same from strategy to execution Adaptation : Kellog’s with low sugar for UK Localization: Strategy is global idea and execution is local Co-branding: ADVANTAGE : bigger target group INCONV : confusing Product placement: Ray ban in top gun = high increase ray ban. Product displacement: Mick-rosoft from Simpson Sponsoring : directly talk to your target group Public relation : Exhibitions PRICING 1) Intro a. Tactical level : Discount, seasonal reduction b. Strategic level : long term horizon c. International factor i. Price with the most visible impact in the bottom line d. Yield pricing : dynamic pricing, how many people are watching ? 2) Factors affecting international pricing a. Competitor’s pricing b. 7 C of international pricing i. COST : 1. Product : development, production, storage 2. International element : insurance, tax 3. Location of your production facility is important : Skills (India = IT) 4. Offshoring : cost reduction, tax benefit. Reshoring : returning the production back to the company’s country  ii. COMPETITION iii. CONSUMERS : 1. Different perception of your product iv. CURRENCY 1. Exchange rate fluctuation 2. v. CHANNELS 1. Longer channel = more people = increase distribution complexity vi. COMPLIANCE 1. Control by government vii. CULTURE 3) Pricing method a. COST-PLUS PRICING = mark up. i. Raw material + production + distribution + mark up ii. Shrinkflation : decrease weight, replace ingredient b. PERCEIVED VALUE PRICING i. Michelin star for example c. COMPETITIVE DRIVEN PRICING i. Analyze competitor’s price d. TARGET PRICING i. Related to ROI 4) Pricing strategies a. Price Skimming i. High price for new product ii. Ensure profit in the short term iii. When ? high R&D cost iv. Positive : Short term profit v. Negative: Less long term vision vi. From high to low price (iPhone) b. Penetration pricing strategy i. Low price to enter in the market. ii. High volume iii. Reduce units cost. c. Pre-emptive strategy i. Dumping  ii. So cheap that nobody wants to follow. 5) Problems of pricing in 4 main areas a. Control i. Parallel import / grey markets 1. Increase of grey marketing 2. Reason : price differences – availability – stock b. Currency i. Local currency seller / buyer c. Payment i. Risk of not being paid d. Admin i. Commission to image LOGISTIC Challenges in managing an international distribution strategy Selecting foreign market intermediaries Physical distribution management 1) Introduction 2) Distribution management a. Extra cost due to : distance – variable – market complexity b. 7 ways of transports i. Ship : lowest cost but slow : 24 000 twenty foot equivalent unit (Best : China) : ii. Air : Fast but more expensive (insurance and packing) : Best one (Dammam : Soudia Arabia) iii. Road : Flexible but depend on the traffic : iv. Rail : Bulky goods but not flexible : v. Pipeline : (oil, gas) Frequent but Very slow vi. Cloud : 3) Higher complexity a. Incoterms: mostly used : EXW, FOB, CIF, DDP 4) Show me the money. a. Payment methods i. Cash: in advance or after delivery ii. Bank guarantee: security deposit. iii. Letter of credit: promise by a bank (most expensive one) iv. Cheque: v. Consignment: troc sport in Annecy but if robe you lose everything