International marketing

International marketing

Same concepts used in marketing, but with additional issues since we don’t know specificities of foreign markets.

Key elements in marketing

• Sell product

• Identity - brand

• Communication

• Marketing research

• Value

• Channel - Social media, direct

• Strategy: plan to reach an objective

• People

• Process

• Physical evidence

Marketing as exchange: Price, distribution, and product are not developed by marketing. Promotion yes, it is about communication. It is not made by a department but by a set of people diffused in an organization that adopt the marketing philosophy. Buyers can be individuals or businesses, marketing is more oriented to individuals.

The most recent definition of marketing: an activity, involves different stakeholders: not only customers but also clients, partners, governments (lobbying).

Challenges in international marketing

• Unfamiliar problems

• Uncertainty

• Complexity

Case study: Starbucks

Started locally, then expanded in the global market. Techniques used in the home market may not work in the global market.

Controllable elements

• Salary of workers, taste of products, price

• High turnover of employees when wages are low: main problem

• Part of Starbucks product is experience: employees are an important part, they interact with customers — they convey a sense of relationship.

• Stock options and health insurance: to keep employees working there, very demanding job.

Starbucks in US: declining market, 2 years left, then they need to expand in global market to continue to grow at that rate. They can control product, price, distribution. They cannot control: growth, context, competition, regulations, culture — challenge.

Starbucks brand

Selling a commodity. It has succeeded in differentiation and decommoditizing: transform a commodity into a distinctive brand. Coffee + brand + associations with brand + service = experience. Very aggressive strategy, strong saturation of market. Self-financed: good cash flows, reinvest in new stores. High market share.

Risks

• Low overseas profits because of partners. They go with partners to reduce risk, they have knowledge of market and can help adapting to the local conditions.

• Economic decline

• Selling an experience

• Achieved growth (objective 20%) by new markets, new products, expansion.

Scope and challenge of international marketing

International marketing provides value to customers. Example: mobile phones revolutionized the industry, previously international calls were very expensive and national markets were characterized by monopolies.

IM characteristics

• Many countries have opened up their markets, eliminated barriers to trade. Free economy creates value.

• Outsourcing of production to cheaper areas.

• WTO institution that manages barriers, etc.

• Growth of competition, more global.

• Internet: Mass market - mass production - mass media: becoming global production - global market - internet media.

Sustainability

• 80-20 rule: 20% of your customers account for 80% of your turnover.

• Also, 20% of top nations account for 80% of world trade.

• FDI fosters peace because everyone has something to lose if makes war.

• Adaptation requires change: challenge. It comes at a cost. Culture is a key driver of environmental adaptation. You need to look at the issue from an external point of view.

Main philosophy of marketing: ability to look at a problem from the perspective of the customer.

Case study: Nestlé

The responsibility of the company is to inform the customers about the correct use of the product and the consequences of an incorrect use. Also, the company should not distribute free samples in third world countries because the lack of alternatives usually leads to an inappropriate use. The company has not differentiated its marketing strategy to developing countries where clean water is a problem — the circumstances create responsibilities. Mass advertising can reach a large population, you have to adapt your communication techniques to people who are illiterate and poor. Not use writing! Word of mouth is efficient but costly. Not to use false/misleading advertising. The responsibility is higher when the product you are selling can have health consequences.