International Marketing [PDF]

International Marketing

Dr. Steffen Jahn Chair of Marketing, with a Focus on Consumer Behaviour

International Marketing International Marketing

International marketing … is the process of focusing the resources and objectives of a company on international marketing opportunities. (Keegan 2014, p. 49)

… is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. (Ghauri & Cateora 2014, p. 8)

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But be alert, it’s not as easy as one may think! – Walmart failed in Germany and lost a billion dollars.

– The Coca-Cola name in China was first read as “Ke-kou-ke-la,” meaning “female horse stuffed with wax.”

 you will learn to master international marketing challenges 

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Course Information •

2 lectures per week (Wednesday & Friday)

•

3 in-class assignments – I:

13.11./18.11.

– II:

25.11./27.11.

– III: 09.12.

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90-minute exam: 18.12.2015 from 10am to 12am

•

your participation before and during class is crucial to make this course a success

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Learning Objectives •

After successful completion of the course, you will understand: – the foundations of international marketing – the diverse environments of global markets

•

After successful completion of the course, you will be able to: – assess global marketing opportunities – develop international marketing strategies

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Recommended Readings •

Cateora, P.R., Gilly, M.C. & Graham, J. (2013): International Marketing, 16th Edition. New York, NY: McGraw-Hill.

•

Ghauri, P.N. & Cateora, P.R. (2014): International Marketing, 4th Edition. New York, NY: McGraw-Hill (UK).

•

Keegan, W.J. (2014): Global Marketing Management, 8th Edition. Essex, UK: Pearson.

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Academic journals with a focus on international marketing: – – – –

Journal of International Business Studies (JIBS) Journal of International Marketing (JIM) Journal of Marketing (JM) International Marketing Review (IMR)

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Access to Materials •

Download using Stud.IP (www.studip.uni-goettingen.de)

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Password:

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Content Outline •

Introduction to international and strategic marketing

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Country image and country-of-origin effect

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Social and cultural environments

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Political, legal, and regulatory environments

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Assessing global marketing opportunities

•

International marketing strategy (country selection, entry modes, international marketing mix)

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Contents 1. Introduction to International and Strategic Marketing 1.1 Introduction 1.2 Strategic Marketing 1.3 International Trade Developments

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Contents 1. Introduction to International and Strategic Marketing 1.1 Introduction 1.2 Strategic Marketing 1.3 International Trade Developments

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Introduction Many companies go abroad

Why do they do this?

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Introduction •

Reasons for entering new markets: – – – – – –

potential demand in foreign countries saturated home market customers expect global presence reducing dependency on one market foreign competitors could enter home market scale effects in production and marketing

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Introduction Reasons: Potential Demand – Is the market saturated by competition? – Alternately, is there potential demand for a new product?

KFC enters China – Increasing wages  rising expendable income – Up-market lifestyle changes in food consumption (“internationalquality“ food) – First fast-food restaurant in China (1st mover advantage) – Followed by sister brand Pizza Hut – KFC introduced entrepreneurial concept of franchising to China – McDonald‘s entered China 3 years later gaining only 1/3 of Yum! Brand‘s (KFC, Pizza Hut, Taco Bell…) market presence International Marketing

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Introduction Reasons: Saturated home market – Challenges in Home Market – Growth Opportunity – Saturation

International Paper Company enters Asian Market – Milk carton success jeopardized by plastic milk jug – Decreasing domestic volume -> Operating below design efficiency levels – Offshore expansion to preserve economies of scale – Growing demand for modern paper packaging in Asian markets

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Introduction Reasons: Presence needed – Service, regular technical support, or warranty offerings must be delivered at a cost consistent with the size and profitability of the market.

Yellowtail enters the US – – – – – –

Grew faster than expected Unable to meet demand Needed cash, capital equipment, operating funds Utilized partnership with US distributers Secured bank credit lines Allowed for continued growth

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Introduction Reasons: Market Access – – – –

Geographic proximity Product supply and channel of distribution access Import restrictions and tariffs Legal and regulatory restrictions

Target enters Canada – American invasion of retailers (Target, Chico‘s) – Large potential market – Geographic & cultural proximity facilitate distribution and marketing

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Introduction •

Risks involved when entering new markets: – – – – – –

limited understanding of foreign customer preferences limited understanding of business customs in foreign country unexpected costs, unknown regulations lack of managers with international experience economic, legal and political instability consumer resistance

 it is important to understand international consumers  it is important to plan international marketing activities  some basic understanding of strategic marketing is of help

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Contents 1. Introduction to International and Strategic Marketing 1.1 Introduction 1.2 Strategic Marketing 1.3 International Trade Developments

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Strategic Marketing (Overview) Marketing … is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (American Marketing Association 2013)

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Strategic Marketing (Overview) Marketing Strategy … refers to an organization’s integrated pattern of decisions that specify its crucial choices concerning marketing activities to perform and the manner of performance of these activities, and the allocation of marketing resources among markets, market segments and marketing activities toward the creation, communication and/or delivery of a product that offers value to customers in exchanges with the organization and thereby enables the organization to achieve specific objectives. (Varadarajan 2010, p. 130)

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Strategic Marketing (Overview) •

Marketing strategy process – Segmentation – Targeting – Positioning

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The 4P’s of Marketing

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Strategic Marketing: Segmentation •

Instead of treating all customers the same, distinguishing groups of customers

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These groups are called segments – Segments include customers that are similar to each other (homogeneous) – Customers from different segments have different preferences (heterogeneous)

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Strategic Marketing: Targeting •

Once segments have been identified, the most attractive ones can be selected (target marketing)

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Criteria for targeting Is the segment large enough that it presents a profitable opportunity? What is the growth potential? Is there strong competition in this market? Can potential competitors easily enter the market threatening market share and profitability? – Does the company have the resources necessary to feasibly target this market? – – – –

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Strategic Marketing: Positioning •

Positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products – Companies can develop products that are as cheap as possible (value) – Companies can develop products that have as many benefits as possible (premium)

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It is almost impossible to produce the highest-quality product and sell it for the lowest price  Decision about which option (price vs. quality) and degree (e.g., extremely cheap, quite cheap, neither cheap nor expensive, etc.) is necessary

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“Ideal” positioning depends on the target segment and the competitiveness of the market

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Strategic Marketing: The Four P‘s The pillars of marketing management are

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Product: quality, assortment, new product development, branding

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Price: sales price, discount strategies, credit terms

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Promotion: marketing communications, sales force

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Place: distribution channels, location, supply chain management

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Strategic Marketing: Further Reading •

Kotler, P. & Armstrong, G. (2014): Principles of Marketing (15th and earlier editions) – Chapter 2

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Contents 1. Introduction to International and Strategic Marketing 1.1 Introduction 1.2 Strategic Marketing 1.3 International Trade Developments

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International Trade Developments •

Countries are as economically interdependent as never before

•

Today the opportunities for international trade are greatest

•

International cooperation between regions is increasing

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International Trade Developments

Source: WTO International Trade Statistics 2013, http://www.wto.org/english/res_e/statis_e/its2013_e/its13_world_maps_merchandise_e.pdf

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International Trade Developments

Source: WTO International Trade Statistics 2013, http://www.wto.org/english/res_e/statis_e/its2013_e/its13_world_maps_serv_e.pdf

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International Trade Developments

Source: WTO International Trade Statistics 2013, http://www.wto.org/english/res_e/statis_e/its2013_e/its13_highlights1_e.pdf

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International Trade Developments

Source: WTO World Trade Report 2013, http://www.wto.org/english/res_e/booksp_e/world_trade_report13_e.pdf

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International Trade Developments •

There is a shift in countries that are involved in international trade

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BRIC countries (Brazil, Russia, India and China) are gaining significance

 Economic activity will shift from West to East •

At the same time, countries such as the US, Germany, Japan and France still are among the leading merchandise traders

 TTIP, for example, as an attempt to remain relevant

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International Trade Developments

Source: WTO International Trade Statistics 2013, http://www.wto.org/english/res_e/statis_e/its2013_e/its13_highlights1_e.pdf

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International Trade Developments •

The largest industries are: – – – – – – – –

manufactures machinery and transportation eqipment fuels and mining products agricultural products food chemicals travel transport

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International Trade Developments

Source: WTO World Trade Report 2013, http://www.wto.org/english/res_e/booksp_e/world_trade_report13_e.pdf

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International Trade Developments •

The major exporters vary by industry type

•

Across industries, the major exporters are: – – – – –

EU 27 USA China Japan Canada

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International Trade Developments

Source: WTO International Trade Statistics 2013, http://www.wto.org/english/res_e/statis_e/its2013_e/its13_highlights2_e.pdf

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International Trade Developments

Source: WTO International Trade Statistics 2013, http://www.wto.org/english/res_e/statis_e/its2013_e/its13_highlights2_e.pdf

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International Trade Developments

Source: WTO International Trade Statistics 2013, http://www.wto.org/english/res_e/statis_e/its2013_e/its13_highlights2_e.pdf

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International Trade Developments

Source: WTO International Trade Statistics 2013, http://www.wto.org/english/res_e/statis_e/its2013_e/its13_highlights2_e.pdf

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International Trade Developments GERMANY Product Exports:

•

– Cars – Car Parts – Medication

Exports

Imports

25

25

20

20

15

15

10

8,8

10

8,1 6,4

6,2

8,9

8,6 7,2

5,2

5

5,5

5,2

USA

Italy

5

0

0 France

USA

China

UK

Italy

Netherlands

China

France

Source: www. http://atlas.media.mit.edu/profile/country/deu/

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International Trade Developments UNITED KINGDOM Product Exports:

•

– Cars – Refined Petroleum – Crude Petroleum

Exports

Imports

25

25

20

20

15

15 12

13

11

10

7,6

8,7

10 6,9

7,5

7

5,5 5

5,7

5

0

0 USA

Germany

Netherlands

France

Belgium

Germany

China

Netherlands

USA

France

Source: www. http://atlas.media.mit.edu/profile/country/gbr/

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International Trade Developments AUSTRIA Product Exports:

•

– Medication – Car Parts – Cars

Exports 30

Imports 40

28

37

35

25

30 20

25

15

20 15

10

7,2

6,2

5,3

5

10

6,2

3,9 5

0

4,7

4,6

4

China

France

Switzerland

0 Germany

Italy

USA

Switzerland

France

Germany

Italy

Source: www. http://atlas.media.mit.edu/profile/country/aut/

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International Trade Developments UKRAINE Product Exports:

•

– Semi-Finished Iron Products – Seed Oils – Maize

Exports 25

Imports

24

35

31 30 20 25 15

20 15

10 6,5

3,8

5

9

10

5,2

3,5

0

8,2

6,4

5

5 0

Russia

Egypt

Turkey

Italy

Kazachstan

Russia

China

Germany

Belarus

Poland

Source: www. http://atlas.media.mit.edu/profile/country/ukr/

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International Trade Developments IRAN Product Exports:

•

– Crude Petroleum – Petroleum Gas – Refined Petroleum

Exports

Imports

40

25 35

21

35

19

20

30 25

15 12

19

20 15

12

10 11

6,2

10 4,1

5 0

5

5

0 China

India

South Korea

Japan

Italy

China

Turkey

South Korea

Germany

India

Source: www. http://atlas.media.mit.edu/profile/country/irn/

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International Trade Developments CHINA Product Exports:

•

– Computers – Audio Equipment – Telephones

Exports

Imports 25

25

20

19

20

15

15 11 10

10 10

8,3

9,3

8,1

8 6

4,4

5

3,7

5

0

0 USA

Hongkong

Japan

Germany

South Korea

Japan

South Korea

Asia (other)

USA

Germany

Source: www. http://atlas.media.mit.edu/profile/country/vhn/

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International Trade Developments JAPAN Product Exports:

•

– Cars – Car Parts – Integrated Circuits

Exports

Imports

25

25 22

20

19

20

18

15

15

10

10

7,8 5,4

5

4,7

0

8,5 6,2

6

Australia

Saudi Arabia

5

4,9

0 China

USA

South Korea

Thailand

Asia (other)

China

USA

South Korea

Source: www. http://atlas.media.mit.edu/profile/country/jpn/

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International Trade Developments USA Product Exports:

•

– Cars – Refined Petroleum – Aircrafts

Exports

Imports

25

25 22

20

15

20

14

15

13 11 9,3

10

9,8

10 5,5

5

4,9

0

7,8 6

5

0 Canada

Mexico

China

Japan

Germany

China

Mexico

Canada

Japan

Germany

Source: www. http://atlas.media.mit.edu/profile/country/usa/

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International Trade Developments MEXICO Product Exports:

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– Crude Petroleum – Cars – Computers

Exports 70

Imports

70

50

47

60 40 50 30

40 30

20

17

20 10 10

5,4

2,1

2

1,8

Spain

China

Colombia

0

4,9

4,2

3,9

Japan

Germany

South Korea

0 USA

Canada

USA

China

Source: www. http://atlas.media.mit.edu/profile/country/mex/

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International Trade Developments BRAZIL Product Exports:

•

– Iron Ore – Crude Petroleum – Soy Beans

Exports

Imports

25

25

20

20 17 15

15

15

14

11 10

10

7,4

7,2 5,4

3,9

5

0

6,6 4,6

5

0 China

USA

Argentina

Netherlands

Germany

China

USA

Argentina

Germany

South Korea

Source: www. http://atlas.media.mit.edu/profile/country/bra/

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International Trade Developments MOZAMBIQUE Product Exports:

•

– Raw Aluminium – Aluminium Bars – Refined Petroleum

Exports

Imports

25

25

25

21 20

20 15

15

15

13 9,3

10

8,7

10 5,7

5

6,2

5,8

5,3

UAE

USA

Bahrain

5

0

0 South Africa

Netherlands

China

Belgium

Italy

South Africa

China

Source: www. http://atlas.media.mit.edu/profile/country/moz/

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International Trade Developments AUSTRALIA Product Exports:

•

– Iron Ore – Coal Bricetts – Petroleum Gas

Exports 30

Imports

29

25

25

20 20

18

20 15 12

15 10

8,2

8,4

10

5,3

3,6

5 0

5,6

5

Singapur

Germany

5

0 China

Japan

South Korea

India

USA

China

USA

Japan

Source: www. http://atlas.media.mit.edu/profile/country/aus/

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International Trade Developments •

Trade barriers: – Tariffs – Non-tariff barriers

•

Non-tariff barriers: – – – – –

quotas voluntary export restraints boycott monetary barriers standards

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International Trade Developments •

Easing trade restrictions: – GATT – WTO – IMF

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