Lecture+1+24220+International+Marketing%28spring+24%29.pdf

International Marketing - 24220 Session 1 – Lecture 1 Dr. Nigel Bairstow UTS CRICOS 00099F UTS CRICOS 00099F Agenda Subject Outline Review Introduction to International Marketing...

International Marketing - 24220 Session 1 – Lecture 1 Dr. Nigel Bairstow UTS CRICOS 00099F UTS CRICOS 00099F Agenda Subject Outline Review Introduction to International Marketing What is International Marketing Why International Marketing The Changing Scene of International Markets Profile Dr Nigel Bairstow PhD in Marketing​ Master of Arts in Asian Studies​ Lecturer, University of Technology Academic Practitioner Sydney Marketing Professional 3M Australia, Atlas Copco, Alcan Australia, Komatsu Australia 3 Contact Details Dr. Nigel Bairstow Email: [email protected] Appointments/Consultations: By email only  Weekly themes International Marketing Introduction to International Marketing The International Macroeconomic Environment Researching International Markets and Market Entry Cultural Influences in International Marketing SME’s in International Marketing Digital Transformation in International Marketing Product and Promotions in International Marketing Pricing and Distribution in International Marketing Ethics and Sustainability in International Marketing Contemporary Issues in International Marketing 5 Subject Outline Review Subject Description This subject provides students with contemporary theoretical international marketing knowledge and the practical skills required for effective marketing management performance in a global environment. It deals initially with the conceptual and environmental aspects of international marketing. Using this knowledge, issues associated with developing practical marketing strategies appropriate to different world markets are then considered in detail.  Assessments Mini Case Project Final Exam Quiz (30%) Study (5%) (25%) (40%) Group Group Individual Individual Group No Group No 2 Quizzes Short – 4 to 6 – 4 to 6 Quiz 1 – Essays Commence Week 5 Case Study Week 3 Quiz 2 – Week 11  Mini Case Study – 5% Groups will be formed and a mini case will be allocated in Tutorial 2. (Your mini case study group and project group will be the same group.) Your group will be required to prepare and present a 10-minute class presentation plus a 5-minute Q&A in a class discussion format. Use the slide deck format below for your presentation.  Each group will develop a comprehensive international marketing plan for Bondi Wash exporting to a designated international country market of your groups choice. The report will be a word doc. (min 25-30 pages) A format is provided below and a more detailed description of each section will be discussed in class. Executive Summary Introduction Project – 25% Situation Analysis S.W.O.T Analysis Key Issues Market Entry Strategy Marketing Mix Strategy Options Recommendations Appendices DUE: WEEK 12 International Marketing Challenge – Spring 2024 Bondi Wash International Marketing Project Brief Bondi Wash began operations in 2013 and is an Australian company specializing in a range of all-natural, plant- based home and personal care products, including hand washes, body washes, and room sprays. Bondi Wash products are known for their unique blends of native Australian botanicals, offering natural antibacterial properties and delightful fragrances. All Bondi Wash products are non-toxic, biodegradable, and made with natural ingredients, making them environmentally friendly and safe for all skin types. Bondi Wash aims to expand its operations into the international market and seize promising opportunities in countries with a growing demand for natural and eco-friendly products. The objective is to analyse and recommend the most suitable country market for the company's expansion. Country Selection: Student groups can choose a country market to investigate. These may include China, EU Countries, USA, Canada, Japan, South Korea, or the United Kingdom. References: 1.Australian Trade and Investment Commission. (2023). Bondi Wash: An Australian Success Story. Austrade. Retrieved from https://www.austrade.gov.au/en/news-and-analysis/news/bondi-wash-an-australian-success-story 2.Bondi Wash. (n.d.). Our Story. Bondi Wash Official Website. Retrieved from https://www.bondiwash.com.au/pages/our-story 3.IBISWorld. (2024). Natural & Organic Personal Care Market Report. IBISWorld. Retrieved from https://www.ibisworld.com/global/market-research-reports/global-organic-personal-care-market/ Bondi Wash Required Textbook It is not mandatory to purchase the text for this course which is: International Marketing, An Asia Pacific Perspective; Fletcher R, Crawford H, 7th Edition, Pearson 2016 Note: The required reading lists in the course outline are based on the chapters in this text book The e-book and hard copy versions of this text are available at: http://pearson.com.au/9781488611179Links to an external site. Access to the e-book is also available via the UTS library website: https://ebookcentral.proquest.com/lib/uts/detail.action?docID=5220556&pq-origsite=primo You are otherwise expected to read the recommended readings, which will be made available to you via Canvas. Introduction to International Marketing What is International Marketing?  What is International Marketing? “International marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives” (American Marketing Association). “International marketing consists of the activity, institutions, and processes across national borders that create, communicate, deliver, and exchange offerings that have value for stakeholders and society” (Czinkota, 2012) International marketing is 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 a profit (Cateora, Gilly & Graham, 2016). “International marketing is the process of planning and undertaking transactions across national boundaries that involve exchange” (Fletcher and Crawford, 2017).  An Ad break Source: HSBC UK Ad  Global Economy 2022 Global economy is expected to achieve $104 trillion by end of Dec 2022. China challenging United States for economic supremacy. United States has been the largest global economy since 1871. Many of the small economies are located in Oceania Ireland fastest growing economy in EU  EVOLUTION OF TRADE GROWTH 1950 - 2023 World Trade Values, Billion USD World Trade Volume 2021 2021: 347x higher than 1950’s level 2021 2021: 43x bigger than 1950’s level 2021 1950 1950 NOTE: TRADE GROWTH = AVERAGE OF EXPORTS AND IMPORTS Source: World Trade Organisation stats  Global Trade 2023 2023: 57% of World GDP 1960: 24% JAPAN 37% of CHINA JAPAN USA EU 37% of GDP 25% of 93% of China’s US GDP EU GDP GDP iNDIA 45% of GDP India’s GDP GROSS DOMESTIC PRODUCT = Consumption + Investment + Government Spending + AUS 40% OF Net Exports AUS GDP Source: World Bank Databank  Examples of International marketing Contract Services Franchisors Licensors Born Global Manufacturing Tourism Fast-foods Licensed Apparel Software International (McDonalds, KFC) merchandise Automotive companies Education Hotel chains Disney Consumer Electronics Sharing platforms Consultancies (Intercontinental) Warner Media Technology Convenience Store Pharmaceutical Financial Services / Consumer products Banking chains (7-Eleven, Food Mattel Cross-border Business Processing etc) eCommerce Outsourcing Global Themes International Marketing UTS CRICOS 00099F  Waves of Globalization Textiles and Factories Global Digital Goods and Industrial Goods Rules-based Value/Supply Services driven by UK international Chains governance Globalization Globalization Globalization Globalization 1.0 (19th –1914) 2.0(1945-1989) 3.0 (1989-2008) 4.0 (current) Source: World Economic Form, A Brief History of Globalization  Globalization The Pros The Cons 1. Encourages global 1. Winners and Losers. interconnectedness. 2. Ethical issues. 2. Helps a company achieve 3. Gains not evenly distributed. economies of scale. 3. Knowledge sharing and 4. Jobs transferred to low cost economies. technology transfer. 4. Reduction of trade barriers. 5. Large multinationals exploit tax havens. 5. Promotes economic growth  Regional trading systems Move to Multi-Polarity Europe No new global hegemons Co-existence of different rules of trade by regional trade systems South Africa Global supply chain networks adapt to America environmental changes China is not strong enough to displace USA China’s sphere of influence is growing in the Asia region (BRI, South China Sea, AIIB) South / East North Asia America West Asia Digital disruption Creates new efficient business models Operates in a borderless world Adds new dimensions and new opportunities to a business Challenges supply chains Rise of Global e- mobile e-commerce commerce social selling netflix amazon 1997 1995 $5.7 trillion (2022 forecast jd.com 1998 subscription finish) model 1. China - $2.8 trillion (46%) online stores music and video 2. USA - $905 billion paypal 3. UK alibaba 1998 google spotify 1999 2006 4. Japan pay 5. South Korea digital payment Online sales about 20% of total platforms fiverr sales by 2023. 2010 etsy ebay 2005 Pandemic: accelerator of 1995 apple pay ecommerce freelance service marketplaces marketplace airtasker upwork 2012 b2b facebook 2013 2016 b2c c2c Global supply chains Order processing Supplier Transport Storage Materials Management Inventory Management Corporation Distribution Supplier to Management company Storage interface Company to Customers Customer interface  Global supply chains What is made where? 1. Cotton from Kazakhstan 2. Spinning mill in Turkey 3. Weaving in Taiwan 4. Indigo colour from Poland 5. Dyeing in Tunisia 6. Fabric finishing in Bulgaria 7. Buttons and rivets from Italy 8. Lining fabric from Switzerland 9. Sewing in China 10. Pumice from Greece 11. Washing in France 12. Distribution in Europe and USA 13. ”AFTER SALES” shipped to Africa’s used clothing market Global supply chain offshoring headquarters and target market offshore manufacturing factories domestic manufacturing factories CLIMATE CHANGE THE RISKS Climate action failure Extreme weather Biodiversity loss Human environmental damage Natural resource crises Source: World Economic Forum Global Risks Perception Index 2021-22 “Decisions made in the next few years will determine the future of our Earth … The need to change the ways societies interact with and affect the environment becomes more urgent ….” United Nations Environment Program (UNEP) and World Economic Forum Geo Political Risks Relations between nations at the political, economic, military, cultural/ideological level Russia- Ukraine War China and South China Seas China’s US-China Tension influence in (Taiwan) the Pacific POST-PANDEMIC CHANGES IN INTERNATIONAL BUSINESS Consumer behaviour changes Supply chain configurations Risk Mitigation Cost Economic factors Decrease in GDP growth Inflation Interest rates Recession worries Heightened geo-political challenges The Rise of Asia International Marketing UTS CRICOS 00099F  Future is Asia SOURCE: McKinsey ASIA’S FUTURE IS NOW  History of trade in Asia When did ”international trade” start? Xian Ancient Silk Road, 1st c BC Spice Route, 7th – 15th c Rome Age of Exploration 15th -18th c Dutch East India British Colonization West to east trade flows Dutch Indonesia, Malacca France Indochina Spain (to US) Philippines, Guam England: India, Pakistan, Sri Lanka, Burma, ANZ, Malaysia, Singapore, Brunei, Pacific Islands (Papua New Guinea, Fiji, Samoa, Solomon Islands)  Colonization Key Insights Asian view European’s arrival European nations small and as a product of luck more than geographically insignificant had ingenuity. to become Asian powers first. Europe gained most of Asia’s Europe asserted hegemony pre-modern globalization, through militarizing. acquired knowledge weaponry Western powers were not able and navigation. to displace culture religions and Asians see the colonial period linguistic systems as an era of complacency , not Colonialism’s mix of capitalism, inferiority. technology and manpower gave Asia a head start in the modern world. The Asian century ? “If the 19th century featured the Europeanization of the world and the 20th century and the 20th century the Americanization then the 21st century is the time of Asianisation.” Parag Khanna, The Future is Asian The Geography East Asia: China, Japan, Korea, Hongkong, Taiwan South Asia: India, Pakistan, Bangladesh Nepal, Bhutan, Sri Lanka South East Asia: Singapore, Indonesia, Malaysia, Philippines, Thailand, Vietnam, Cambodia, Laos, Myanmar Oceania: Australia, New Zealand and Pacific Islands (Papua New Guinea, Fiji, Vanuatu, etc  The Economic Region Advanced Economies: Japan, Singapore, Australia, New Zealand, Korea, Hongkong, Taiwan China China Emerging Asia: Asia – the world’s Indonesia, Malaysia, Philippines, Thailand, Vietnam, Cambodia, Laos, largest regional Myanmar economy India Frontier Asia: India, Pakistan, Bangladesh Nepal, Bhutan, Sri Lanka  The Growth story Post-War now 1990s - now 4th growth wave: South Asia and Southeast Asia 1970s-80s 3rd growth wave: China 1950s – 80s 2nd growth wave: The Asian Tigers (Singapore, 1st growth wave: Hongkong, South Japan Korea, Taiwan) The Future is Asian, by Dr. Parag Khanna ASIA’s BIG NUMBERS GDP CONSUMPTION By 2040, 50% of global GDP 1 and By 2040, 40% of global highest regional GDP growth at 5.4% consumption1 URBANIZATION DIGITAL ADOPTION 54% of world’s urban 81% of APAC consumers will population 2 shop online this year compared to last year. Global average is 76%3 1 McKinsey: Asia’s future is now 2 UN 2018 Revision of Urbanization 3 Digital Society Index, Oxford Economics and Dentsu Aegis Network  GDP GROWTH Korea: 2.7% Japan: 1.7% China: 3.2% Southeast Asia: 5% India: 6.8% Australia/NZ: 3.6% Europe: 1.9% North America: 1.8% Source: IMF World Economic Outlook Oct 2022  Asia’s diversity Languages (thousands) Religions Ethnicities Government types - from communism to democracy Demographic variations – from young to ageing Per capita income variations from $849pa (Nepal) to $57,700 (Singapore) 1 Rural agricultural-based villages to impressive city skyscrapers 1McKinsey, Asia’s Future is Now ASIA’S CHALLENGES Inequality gap – haves and have nots Potential for financial risk Institutional gaps relating to the rule of law and corruption Environmental sustainability (unhealthy cities, 8 million tones of plastics Human rights issues (Myanmar, China) Managing diversity Attracting skilled talent Key Takeaways International marketing is moving from a unipolar to multipolar regional trade systems. International marketing adapts to changing environment. There are risks associated with International business which need to be understood for each country market. Services trade is the new battle ground. Asia is on the rise and offers opportunity in its diversity. Asia will account for 50% of Global GDP by 2040. The Environment of International International Marketing: PESTEL Analysis