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Chapter # 8.pptx marketing of Fundamental
- 1. Chapter # 8 Tappinginto Global Markets
- 3. Deciding Whether toGo Abroad Most companies would prefer to remain domestic. Several factors can draw companies into the internationl arena International markets present better profit opportunities. Companies want ot achieve economies of scale. Company wants to reduce dependence on one market. Company decides to counterattack global competitors in their home markets. Customers are going abroad and require internationl service.
- 4. Deciding Whether toGo Abroad Before making a decision to go abroad, the company must also weight several risks: The company might not understand foreign preferences. The company might not understand foreign countries business culture. The company might underestimate foreign regulations, and cost. The company might lack managers with international experience. The foreign country might change its commercial laws, undergo political revolution and expropriate property.
- 5. Deciding Whether toGo Abroad The internationalization process typically has four stages. Stage 1: No regular export activities Stage 2: Export via independent representatives (agent) Stage 3: Establishment of one or more sales subsidiaries Stage 4: Establishment of production facilities abroad
- 6. Deciding Which Marketsto Enter How Many Markets to Enter The company must decide how many countries to enter and how fast to expand. Waterfall Approach: Gradually entering countires in sequence. Sprinkler Approach:Entering many countires simultaneously.(born global) Following factora are also considered Geography, income, population, political climate, competitive consideration.
- 7. Deciding Which Marketsto Enter Evaluating Potential Markets Demographic, economic, sociocultural, natural, technological and political-legal envioronnent. Many companies prefer to sell to neighboring countires. Entering countries that have high market attractiveness and low market risk and in which it possess a competitive advantage.
- 8. Deciding How toEnter the Market Following are the different way's to enter the international markets. Direct and Indirect Export Licensing Joint Ventures Direct Investment Acquisition
- 9. Deciding How toEnter the Market Indirect and Direct Export Indirect export - they work through independent intermediaries. Domestic based export merchants - buy the manufacturer's products and then sell them abroad. Domestic based export agents - trading companies, seek and negotiate foreign purchases for a commission. Advantages: Less investment, less risky
- 10. Deciding How toEnter the Market Indirect and Direct Export Direct export - companies may eventually decide to handle their own exports. Investment and risk are somewhat greater. Direct export has several ways. • Domestic based export department. • Overseas sales branch • Traveling export sale representatives • Foreign based distributors or agents
- 11. Deciding How toEnter the Market Licensing Licensing is a simple way to engage in international marketing. Licensor issue a license to a foreign company to use a manufacturing process, trademark, patent, trade secret or other value for a fee or royalty. Joint Ventures Foreign investors have often joined local investers in a joint venture company in which they share ownership and control. Joint venture may be necessary or desirable for enconomic or political reason.
- 12. Deciding How toEnter the Market Direct Investment The foreign company builds its own manufacturing or service facilities. Acquisition Many companies choose to acquire local brands for their brand portfolio.
- 13. Deciding on theMarketing Program International companies must decide how much to adapt their marketing strategy to local conditions. Standardized marketing program Adapted marketing program
- 14. Deciding on theMarketing Program Global similarities and Differences The vast penetration of the internet, spread of cable and satellite TV, and global linking of telecommunications networks have led to a convergance of lifestyles. Increasingly shared needs and wants have created global markets for more standardized products.
- 15. Deciding on theMarketing Program Global similarities and Differences Consumer behavior may reflect cultural differences that can be pronounced across countires. Hofstede identifies four cultural dimensions that differenciate countries. 1. Individualism versus collectivism 2. High versus low power distance 3. Masculine versus feminine 4. Weak versus strong uncertainty avoidance
- 16. Deciding on theMarketing Program Global Product Strategies Developing global product strategies requires knowing what types of products or services are easily standardized and what are appropriate adaptation strategies. Product Standardization Some products cross borders without adaptation better than others e.g: google, facebook, twitter etc. Food and beverage marketers find it more challenging to standardize, of course, given widely varying tastes and cultural habits.
- 17. Deciding on theMarketing Program Product Adaptation Strategies
- 18. Deciding on theMarketing Program Global Communication Strategies Communication adaptation: changing marketing communication for each local market. Dual adaptation: Adapt both the product and the communications. Global Adaptations: Companies that adapt their communications wrestle with a number of challenges.
- 19. Deciding on theMarketing Program Global Pricing Strategies Price Esclation - Added costs and currency fluctuation risk might require the price to be two to five times as high for the manufacturer to earn the same profit. Following are the choices for setting prices Set a uniform price everywhere Set a market-base price in each country Set a cost based price in each country Transfer Prices Gray Markets
- 20. Deciding on theMarketing Program Global Pricing Strategies Transfer Prices Dumping arms length price Gray Markets Company finds some enterprising distributors buying more than they can sell in their own country and reshipping the goods to another country to take advantage of price differences.
- 21. Deciding on theMarketing Program Global Distribution Strategies
- 22. Deciding on theMarketing Program Global Distribution Strategies International marketing headquarter - export department or international division makes decisions about channels and other marketing activities. Channels between nations - gets the products to the boarders of the foreign nation. Decision include the types of intermediaries, types of transportation, financing and risk management. Channels within foreign nations - gets products from their entry point to final buyers and users.
- 23. Deciding on theMarketing Program Global Distribution Strategies Channel Difference Distribution channels across countries vary considerably. Another difference is the size and characteristics of retail units abroad.
- 24. Deciding on theMarketing Program Country of Origin Effect Country of origin perception are the mental associations and beliefs triggered by the country. Building country Image Governments now recognize that the images of their cities and counties affect more than tourism and have importance in commerce. Consumer perception of Country of Origin Global marketers know that buyers hold distinct attitudes and beliefs about brands or products from different countrties.