International Marketing ATM Semester 2 Lecture 10 By

International Marketing ATM Semester 2 Lecture 10 By Sanemkhan Nurillaeva

Agenda • Definition • Good and Bad Examples • Deciding which markets to enter • Market Entry Mode and Risk • 3 Strategic Market Orientation

Definition: International Marketing • “Multinational process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services and to create exchanges that satisfy individual and organizational objectives” (John Shaw, 2008)

Good Example: at&t

Bad Example: KFC • In Chinese, the Kentucky Fried Chicken slogan “finger-lickin’ good” came out as “eat your fingers off. ”

Deciding whether to go international Reasons v. Saturated domestic markets v. Small domestic markets v. Low growth domestic markets v. Customer drivers v. Competitive forces v. Cost factor v. Portfolio balance Barriers v. Insufficient Knowledge v. Lack of Capital v. Market Uncertainty v. Commercial & Political Risks

Deciding which markets to enter Macroenvironmental issues v. Socio-cultural v. Technological v. Economic v. Political/legal Foreign Market selection Microenvironmental issues v Market attractiveness v Company capability profile

Market attractiveness Microenvironmental issues Market size and growth rate Competition Cost of serving the market Profit potential Market access

Company capability profile Microenvironmental issues Skills Resources Product adaptation Competitive advantage

Market Entry Mode and Risk

Deciding how to enter the market Indirect exporting Direct exporting Licensing Joint ventures Commitment, Risk, Control, and Profit Potential Direct investment

Foreign market entry strategies Cooperative ØLicensing ØJoint ventures Direct investment ØNew facilities ØAcquisitions Foreign Market Entry Exporting Indirect Direct Ø Domestic-based export merchants Ø Domestic based export agents Ø Piggybacking Ø Cooperative organisation Ø Foreign-based agents or distributors Ø Domestic-based sales representatives Ø Overseas sales/marketing office or subsidiary

Which strategy should be used? It depends on: • Vision • Attitude toward risk • How much investment capital is available • How much control is desired

3 Strategic Orientation 1. Domestic market extension orientation 2. Multidomestic market orientation 3. Global market orientation

Domestic Market Orientation • International operations viewed as secondary • Prime motive is to market excess domestic production • Firm’s orientation remains basically domestic • Minimal efforts are made to adapt product or marketing mix to foreign markets • Firms with this approach are classified as ethnocentric

Multidomestic Market Orientation • Companies have a strong sense that foreign country markets are vastly different • Market success requires an almost independent program for each country • Separate marketing strategies (mostly polycentric) • Subsidiaries operate independently of one another in establishing marketing objectives and plans • Products are adapted for each market • Control is decentralized

Global Market Orientation • Company guided by global marketing orientation – Marketing activity is global – Market coverage is the world • Firm develops a standardized marketing mix applicable across national boundaries – Markets are still segmented – Each country or region is considered side by side with a variety of other segmentation variables – Fits the regiocentric or geocentric classifications

Global Market Orientation: Example • Mc. Donald’s: • • Process is standardized in every country Logo is same Most of the advertisements are similar Store decoration and layout almost alike • BUT • Wine in France and Beer in Germany • A Filipino Style spicy burger in Manila • Pork burgers in Thailand • P&G pursue a global strategy for disposable diapers, but a multidomestic strategy in Asian markets for detergents. (The strategy differs product to product)

Reading • P. Kotler, K. Keller, 2006, Marketing Management, 12 ed, Prentice Hall • D. Jobber, Principles and Practice of Marketing, 3 ed, 2001, Mc. Graw. Hill • Isobele and Lowe, (2008). International Marketing Strategy [Online]. Available from: https: //www. cengagebrain. co. uk/content/doole 07630_1844807630_02. 01_chap ter 01. pdf • International Marketing Strategy and Theory (2008) by John Shaw