THE MORE YOU CARE THE STRONGER YOU CAN

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THE MORE YOU CARE, THE STRONGER YOU CAN BE.

THE MORE YOU CARE, THE STRONGER YOU CAN BE.

BUDAPESTI GAZDASÁGI FŐISKOLA INTERNATIONAL MARKETING LECTURE- 11 In English 11 th May 2012 –

BUDAPESTI GAZDASÁGI FŐISKOLA INTERNATIONAL MARKETING LECTURE- 11 In English 11 th May 2012 – FRIDAY 0940 hr – 1110 hr (E. F. 7 -9) Miklós (Nicholas) SOÓS 0630 265 9638 miklosoos@hotmail. com somi

LECTURE DATES - TIMES - LOCATION RE: Miklós (Nicholas) SOÓS 1. FEB. 17. 0940

LECTURE DATES - TIMES - LOCATION RE: Miklós (Nicholas) SOÓS 1. FEB. 17. 0940 -1110 [E. F. 13 -15] 2. FEB. 24. 0940 -1110 [E. F. 13 -15] 3. MARCH 2. 0940 -1110 [E. F. 13 -15] 4. MARCH 9. 0940 -1110 [E. F. 13 -15] MARCH 16. VACATION MARCH 23. VACATION 5. MARCH 30. 0940 -1110 [E. F. 13 -15] – re. feb. 10 6. APR. 6. 0940 -1110 [E. F. 13 -15] (guest lect? ) 7. APR. 13. 0940 -1110 [E. F. 13 -15] 8. APR. 20. 0940 -1110 [E. F. 13 -15] 9. APR. 27. 0940 -1110 [E. F. 13 -15] 10. MAY 4. 0940 -1110 [E. F. 13 -15] 11. MAY 11. 0940 -1110 [E. F. 13 -15] somi

CLASS ATTENDANCE Lect. 1 Lect. 2 Lect. 3 Lect. 4 Lect. 5 Lect. 6

CLASS ATTENDANCE Lect. 1 Lect. 2 Lect. 3 Lect. 4 Lect. 5 Lect. 6 Lect. 7 Lect. 8 Lect. 9 Lect. 10 Average 16 22 30 30 35 34 34 24 19 30 27 24 33 45 45 52 51 51 36 28 45 41 somi

Please ensure that you personally sign the attendance sheet every time you attend a

Please ensure that you personally sign the attendance sheet every time you attend a lecture. somi

The visual contents of lectures will be available internally on the following site: K:

The visual contents of lectures will be available internally on the following site: K: HallgatokANGOLSoós tanár úr (available internally only) somi

SOURCES, REFERENCES – SUGGESTED READINGS The course is NOT based on any specific textbook.

SOURCES, REFERENCES – SUGGESTED READINGS The course is NOT based on any specific textbook. The following are recommended. International Marketing, Cateora, P. & Graham, J. (2005) 12 th edition, Mc. Graw-Hill Global Marketing, Hollensen, S. (2004) 3 rd edition, Prentice Hall International Marketing Strategy, Doole, I. & Lowe, R (2004) 4 th edition Thomson International Marketing and Export Management, Albaum G, Prentice Hall London Principles of Marketing, Kotler P et. Al, 2 nd European edition, Prentice Hall E. 2003 Principles of Marketing, Jobber D, Mc. Graw-Hill Principles of Marketing, Brassington F, Financial Times Prentice Hall, 2000 Marketing on the Internet: Principles of online marketing, Strauss J & Raymond F, Prentice Hall, 1999 Internet sites: www. pmcinc. org/ www. tradeport. org www. FAS. USDA. gov somi

ASSESSMENT METHOD End of year written examination 60% Two (2) ‘mini’ exams of 20

ASSESSMENT METHOD End of year written examination 60% Two (2) ‘mini’ exams of 20 min. duration during unannounced lectures 40% somi

BGF. INTERNATIONAL MARKETING – MINI TESTS AVERAGE ASSESSMENTS Markscale % No. <45 39 46

BGF. INTERNATIONAL MARKETING – MINI TESTS AVERAGE ASSESSMENTS Markscale % No. <45 39 46 -50 5 51 -55 3 56 -60 2 61 -65 6 66 -70 5 71 -75 2 76 -80 2 81 -85 1 86 -90 1 91 -95 1 96 -100 0 Total no. of students: Class average : 65% Lowest score 0% Highest score: 95% 67 somi

MINI TESTS AVERAGE - RESULTS somi

MINI TESTS AVERAGE - RESULTS somi

MINI TEST 1 & 2 - RESULTS somi

MINI TEST 1 & 2 - RESULTS somi

FINAL 90 MINUTES EXAMINATION TIMES AND LOCATIONS. 1. FRIDAY MAY 18 TH. 0940 E.

FINAL 90 MINUTES EXAMINATION TIMES AND LOCATIONS. 1. FRIDAY MAY 18 TH. 0940 E. F. 13 -15 2. FRIDAY MAY 25 TH. 1000 E. F. 7 -9 3. FRIDAY JUNE 1 ST. 1030 E. ll. 10 Please remember you need to register for the examinations on NEPTUN.

Where we finished last week. somi

Where we finished last week. somi

INTERNATIONAL PRICE STRATEGY FRAMEWORK Firm-level factors • Strategic objectives • M. share, profit, costs

INTERNATIONAL PRICE STRATEGY FRAMEWORK Firm-level factors • Strategic objectives • M. share, profit, costs • 4 Ps………… • Inventory level Product-specific factors • Life cycle • Substitutes • Quality, service, delivery Market-specific factors • Consumers • Government intervention • Distribution channel • Barriers to trade Foreign price setting • price relation to product line • redesign & price implication • transfer price setting • inflation adjustment • pricing for multinational clients • client-specific pricing Environmental factors • Competition • Exchange rate • Inflation rate somi

FACTORS INFUENCING THE SETTING OF INTERNATIONAL PRICES Supplier marketing strategy • Portfolio mix •

FACTORS INFUENCING THE SETTING OF INTERNATIONAL PRICES Supplier marketing strategy • Portfolio mix • Prodt positioning within co. & mrkt • Communication support – advertising & promotions. • Product branding • Consumers’ added value perceptions • Sales volume & market share goal • Maturity stage of market – product life cycle factors Distributor’s Trade buyers’ considerations • Cost of goods delivered to distributor’s warehouse, duty paid • User/consumer demand • Supplier credit • Trade margin requirements • Net profit requirements • Product suitability to fit distributor’s market position & range policies • Supplier reliability & reputation • Local availability or delivery lead time • Suitability to satisfy user needs • Product quality • Payment terms & credit • Price competitiveness • Product’s value v competitor • Product/brand loyalty Competitive activity • Competitor pricing policies • Competitor market share & penetration • Distribution • Product positioning • Comparable features & benefits (points of product differentiation) • Supply capacity – ability to supply to meet market demand Market environment • Exchange rate • Income levels • Income distribtn • Employment • Interest rate • Inflation • Local distribution costs • Demographics • Security of access to market • Government policies & attitudes • Price control • Risk factors in supplying the market somi

PRICING POLICIES Penetration pricing – if objective is high volume sales and low production

PRICING POLICIES Penetration pricing – if objective is high volume sales and low production cost. Pricing product at its long-term equilibrium price from the start even though it may loose at early stages. Rapid expansion and may deter competitors. Marginal pricing – product price below full cost but above variable cost in selected markets. E. g ‘happy hours’ in bars; ‘early birds’ in disc. Stores. Market-based pricing – price at a level what someone is willing to pay. Loss leading – offering products / services at below cost – attracting initial customers. Skimming – charging high price for a short time – relatively unusual, used where product life-cyle is short e. g. high-technology products Somi

PRICE ELASTICITY OF DEMAND (PED) Price elasticity of demand (PED) describes the way in

PRICE ELASTICITY OF DEMAND (PED) Price elasticity of demand (PED) describes the way in which the demand for a product responds to a change in its price. Price elastic – if small change in price leads to a large change in demand the product is said to be price elastic. (e. g. refrigerators, cars, computers) • Price inelastic – if the demand for a product shows little response to changes in price, the product is said to be price inelastic. (e. g. bread, medicine) • Somi

CALCULATING THE PED (PRICE ELASTICITY OF DEMAND) Percentage change in demand PED = Percentage

CALCULATING THE PED (PRICE ELASTICITY OF DEMAND) Percentage change in demand PED = Percentage change in price 1. Calculate percentage change in price. If price changed from 320 to 280 - %-age change = - 12. 5% 2. Calculate percentage change in demand. If original volume sold was 80 units and new sales volume is 100 units %-age change = 25% 25 3. Calculate PED = - 12. 5 = - 2. 0 Somi

ADAPT OR STANDARDISE ? is the question Should a firm modify and adapt products

ADAPT OR STANDARDISE ? is the question Should a firm modify and adapt products when offering them on a foreign markets OR offer a standardised product to all markets? A frequently debated issue in International Marketing. STANDARDASATION is offering a common product on a national, regional or on a worldwide basis ADAPTATION involves making appropriate changes in a product to match the requirements of customers in a specific market. somi

IMPORTANT FACTORS RELATING TO STANDARDISATION & ADAPTATION? • • economies of scale R&D cost

IMPORTANT FACTORS RELATING TO STANDARDISATION & ADAPTATION? • • economies of scale R&D cost reduction lower stock level standard technology consumer mobility homogeneous markets global communication channels higher level of education somi

FACTORS THAT ENCOURAGE STANDARDASATION • high cost of adaptation • nature of the product

FACTORS THAT ENCOURAGE STANDARDASATION • high cost of adaptation • nature of the product • economies of scale (manufactr) ADAPTATION • variation in consumer preferences • different conditions of use • variation in ability to afford… • economies in R & D • government influence • economies in marketing • legal requirements • economic integration between countries • different tastes & behaviour • competition • lack of adequate support system • physical environment somi

THE ESSENTIAL ASPECT TO REMEMBER ABOUT ADAPTATION-STANDARDASATION If we are faced with the decision

THE ESSENTIAL ASPECT TO REMEMBER ABOUT ADAPTATION-STANDARDASATION If we are faced with the decision between being fully standardized or fully adapted, how do we decide ……? The Marketing Mix (4 Ps+ 3 Ps) is the tool for determining the degree of standardization possible, according to the degree of international variation. 22 -40 somi

GREEN MARKETING Green marketing is the marketing of products that are presumed to be

GREEN MARKETING Green marketing is the marketing of products that are presumed to be environmentally safe. Activities include: v product modification v changes to the production process v packaging changes v modifying advertising somi

GREEN MARKETING 1. Origin: 1970 To increase people’s awareness about importance of environmental preservation

GREEN MARKETING 1. Origin: 1970 To increase people’s awareness about importance of environmental preservation (ecological disasters) Consumers are becoming environmentally conscious as they buy, consume Some companies are managing to develop and market green products somi

GREEN MARKETING 2. PURCHASING BEHAVIOUR OF A TYPICAL GREEN CONSUMER Looks for products packaged

GREEN MARKETING 2. PURCHASING BEHAVIOUR OF A TYPICAL GREEN CONSUMER Looks for products packaged in recyclable materials Does not buy products that are excessively packaged Is attracted to products perceived as environmentally friendly Looks for products made from recycled or reusable materials Chooses products that do not contain toxic materials Avoids buying anything packaged in foam somi

GREEN MARKETING 3. GREEN SEGMENTS Green Leaders Green followers Middle of the spectrum Grousers

GREEN MARKETING 3. GREEN SEGMENTS Green Leaders Green followers Middle of the spectrum Grousers Non environmentalists 26 -40 somi

GREEN MARKETING 4. GREEN COMPANY ATTITUDES – input, output, design, manufacture, delivery must be

GREEN MARKETING 4. GREEN COMPANY ATTITUDES – input, output, design, manufacture, delivery must be considered – typology • • ignore the green pass as green genuine green pro-green somi

GREEN MARKETING 5. 4 Rs of long-term corporate commitment Rethinking Refusal Reuse Recycle of

GREEN MARKETING 5. 4 Rs of long-term corporate commitment Rethinking Refusal Reuse Recycle of consumption to conserve natural resources to buy products that misuse scarce resources products and packaging somi

GREEN MARKETING 6. GREEN MIX – Position: reprofile to reflect new consumer values –

GREEN MARKETING 6. GREEN MIX – Position: reprofile to reflect new consumer values – Product: design new products – Packaging: minimal, reuse – Price: long-term competitive – Place: proximity to recycling centers – Promotion: education and information somi

Let us now have an overview of the more important aspects of International Marketing.

Let us now have an overview of the more important aspects of International Marketing. 30 -40

INTERNATIONAL MARKETING Why are we concerned with culture? The marketing significance of culture is

INTERNATIONAL MARKETING Why are we concerned with culture? The marketing significance of culture is that it affects buyer behaviour So…. What is culture ? ? “Ways of living, built up by a group of human beings” 31 -40 A set of standards and beliefs shared by a group of people, which helps an individual decide what is ‘right’, what can be ok, how to feel, what to do and how to go about it…. . “The way we do things around here” The sum of conscious and unconscious values, ideas, attitudes and symbols that shape human behaviour and that are transmitted from one generation to the next…. “The collective programming of the mind that somi

Social/cultural Legal ECONOMIC Language, religion, values, social organisation, material culture Local domestic laws International

Social/cultural Legal ECONOMIC Language, religion, values, social organisation, material culture Local domestic laws International law Home domestic laws Developed economy Emerging economy Less developed econ Currency movements S L E Ecology rainfall, temperature, seasons P Political Operational restrictions Discriminatory restrictions Physical actions Environmental influences on international marketing T Technological Satelite communctn Internet WWW The electronic superhighway DOOLE & LOWE somi

MAJOR WAYS IN WHICH COMPANIES FIRST 1 Export ENTER INTERNATIONAL MARKETS 2 Licensing 5

MAJOR WAYS IN WHICH COMPANIES FIRST 1 Export ENTER INTERNATIONAL MARKETS 2 Licensing 5 joint venture 4 manufacturing 3 Establish sales offices 33 -40 somi

MARKET ENTRY 1 EXPORTING TO FOREIGN MARKETS Indirect export: • domestic based export merchant

MARKET ENTRY 1 EXPORTING TO FOREIGN MARKETS Indirect export: • domestic based export merchant sells abroad Direct export: • domestic based export department, • foreign based distributors, or agents • overseas sales branch or subsidiary Exporting seems the simplest way of entering a foreign market. In reality an export order initiates a series of problems not typically faced before. For example: • application for export license from government • payment arrangement – how will sales be paid for • currency • banking arrangements • shipment and associated paper-work These and other complications might give the sales manager second thought despite the possible benefits. However the benefit of going international this way is that risk can be controlled. One person could handle it and would have little effect on organizational structure. 34 -40 somi

THE FEATURES COMMONLY ASSOCIATED WITH THE TOP GLOBAL BRANDS Quelch Strong in home market

THE FEATURES COMMONLY ASSOCIATED WITH THE TOP GLOBAL BRANDS Quelch Strong in home market Geographical/balance in sales Corporate name 7 Product category focus Consumers value the country-of-origin Addresses similar consumer needs Consistent positioning 35 -40 somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Market Factors

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Market Factors Target Country Environ mental Factors Target Country Production Factors Home Country Factors Foreign Market Entry Mode Decision Company Resource/ Commitment Factors Company Product Factors Internal Factors 36 -40 somi

International marketing research primary data collection pitfalls…. Beware of: • • 37 -40 Degree

International marketing research primary data collection pitfalls…. Beware of: • • 37 -40 Degree of literacy Quality of mail and phone service Available travel facilities Cultural norm Mailing list (adequacy and reliability) Internet availability Sampling frames (availability and reliability) Somi

EQUIVALENCES Construct equivalence – concerned with whether both researcher and the subject of the

EQUIVALENCES Construct equivalence – concerned with whether both researcher and the subject of the research view a particular phenomenon or concept in the same way. E. g. beauty, youth, wealth. . • functional equivalence – e. g. Asian shopping (servants) v europe • conceptual equivalence – e. g. meaning of ‘reliability’ • temporal equivalence – e. g. gift-giving seasons • market structure equivalence – e. g. compare Vietnam & Australia Measurement equivalence – methods used by the researcher to collect and categorise information. Ensure to measure the same phenomenon between different overseas markets – it is necessary to ensure gradation translation and scale equivalence. Sample equivalence – due to social, cultural, economic and political differences there are unique problems in international marketing which are not found in domestic marketing 38 -40 Somi

I WISH EACH AND EVERY ONE OF YOU HAPPINESS AND SUCCESS IN YOUR PRIVATE

I WISH EACH AND EVERY ONE OF YOU HAPPINESS AND SUCCESS IN YOUR PRIVATE AND PROFESSIONAL LIFE DON’T FORGET THERE IS ALWAYS A BETTER WAY! FIND IT! somi

INDECISION IS THE THIEF OF OPPORTUNITY

INDECISION IS THE THIEF OF OPPORTUNITY