International marketing

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.

Most recent definition of marketing: an activity, involves different stakeholders: not

only customers but also clients, partners, governments (lobbying)

3 challenges in international marketing: unfamiliar problems, uncertainty, complexity

Case Starbucks

Started locally, then expanded in the global market. Techniques used in home market

may not work in the global market.

1) 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 grow at that rate

They can control product, price, distribution

They cannot control: growth, context, competition, regulations, culture —> challenge

2) What is the Starbucks brand? Selling a commodity. It has succeeded in

differentiation and decommoditizing: transform a commodity into a distinctive brand.

Coffe + 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

3) Risk: 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

4) selling an experience

5) achieved growth (objective 20%) by new markets, new products, expansion.

Scope and Challenge of International Marketing

(2)

International marketing provides value to customers. Ex: 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 Nestlè

1) 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 and can lead to death.

2) It should have used an appropriate informational campaign and not marketed the

product where it is almost impossible to find clean water. Or make clearer the

correct useBoycotts can reduce sales by a small percentage, but they usually cut

sales that generate a large portion of profits over the breakeven point!Try to work

with international organization to better manage the relationships with customers.

Manage the media is part of marketing: try to manage what the press says about

you.

3) For developing countries they could pre-prepare the mixture. So they solve 2

problems: unpolluted water and right concentration. But it’s very costly and people

could also have the temptation to dilute with water. Tighten direct selling

techniques, stress nutritional training (combats misuse, feedback), control

distributer promotional activities (prohibit the use of your brand in a certain way),

curtail mass media advertising, improve labelling and directions for use, develop

promotional material to help low-literacy users (for example use more images).

4) Ethical behaviorNot illegal does not always mean correctcost of maintaining ethical

standards can be high: growing and attractive marketIn developing countries HIV is

a problem: lack of infrastructures and resources. It van represent an opportunity:

create a market to avoid spread of HIV. But it can also become indicator of being ill.

A company has multiple reputations depending on the stakeholder. It has beneficial

consequences (halo effect)

Nestle took an NGO to court: damage to the image

Lecture 3

Domestic marketing: oriented to local customers

Export marketing: only in certain circumstances, like spare capacity or perception of

demand in that market. The main market remains the domestic one. The structure is

similar (not exports)

International marketing: focus on multidomestic marketing. Change in structure that

can satisfy more demand. Needed due to a change in strategy. Can adjust the product

to the market.

Multinational marketing: exports are critical, may be listed on stock exchange,

aggressive strategy

Global marketing: treats the world as the unique market. Main profits arise from

overseas markets

For a small company there are not many benefits from becoming global.

Historical development: Protectionism was a major factor of depression during crisis

Coke and Pepsi case

Global brands. At first, Coke tried a standardized approach. The market is attractive

because it’s very large in terms of volume. There is resentment against foreign brands:

Indian independence based on the idea of becoming self sufficient. On the other hand

India needed foreign investments so opened the market and favored investments.

Coke was the first to enter and then come out of the market. Pepsi came then, faced

some disadvantages.

1) Political decision of liberalization. The majority shareholding does not have to be

Indian anymore, (but they were prohibited to use own brands). Unusual because

you can lose control. Coke tried to enter again the market, they were blocked entry.

They bought a local distributor by paying a considerable price. Political factors

played a significant effect. Adaptation of techniques to local markets: glocalization.

2) Timing of entry : benefits of first-mover advantage: the product is associated with

the brand, access to distribution network, can avoid competitor entry.Smaller

bottles to be more affordable.

4) tailoring offer and advertising to customers: change marketing to meet different

needs

6)

Lecture 4: History, Geography and culture in IM

Marketing is the study of an exchange between buyer and seller: offer-money

2 types of buyers: companies, individuals. The tools needed are different: marketing

research, consumer behavior, organizational buying behavior.

The problem with marketing research is time

The task of marketing is selecting the resources that I can address to the customers in

order to obtain a desired outcome. (4Ps are the resources) resources—>Black box—

>outcomes

I don’t have control over some resources and the black box (how you think) ! External

variables, culture, attitudes, perception

Cultural norms and advertising

Marketing focused on main cities, rural communities are not addressed currently. The

major challenge is distribution and low income. Smaller packages to be more

affordable, typical of developing countries. Fair & lovely has the first mover advantage.

It is an attractive market. Main competitor is Fairever, very similar. Key element in

getting sales in India is whether advertisement is acceptable or not. The problem is

that advertising was based on cultural bias!

1) Yes, it is ethical. It is unethical to advertise properties that are not present in the

product, false claims. There are a lot of products in the market that claim to do

something they don’t do, mildly effective. There’s nothing wrong in selling a

product that meets a particular need. It’s not fair to use ad that demean people

with dark skin

2) Yes, it is, because you are offering a value proposition for a particular need related

to the culture. The threshold is not offending people, not doing an emotional harm.

The basis is finding triggers

3) Yes, it is demeaning and not respectful to women, because it shows women in a

subdued/dominated position, it encourages an inappropriate view of women.

4) It is a good starting point but has to change the ad. They created a foundation, (PR

strategy). Not sufficient, but the company is working not to put down women.

5) Personal selling, but it’s costly. We could use PR to counter negative press.

6) .

7) Used Bollywood stars for marketing campaign, new segment. Argument not

weakened, still valid that you should not demean.

8) There is acceptance in rural areas, high level of credibility by personal selling. Good

public relations are important.

Difficulties of dealing with large markets in developing countries, but you have to

adapt to the circumstances in a meaningful way. There is a profitability potential.

Lecture 7: Developing a Global Marketing Strategy

It is possible to target two homogeneous segments in two different markets

with the same marketing strategy. (Coca-cola)

The highest level of marketing: one-to-one marketing, tailor made to individual

customers.

A global marketing strategy can help improving your product. If you are able to

adapt to the needs of more demanding customers, you can ensure a high

quality.

Resources (limited) and external environment have to interact to develop

strategic thinking and the new organization that aims to achieve new

objectives. Global marketing adds a level of complexity to the problem of

integration.

PESTEL analysis: Political, Economic, Social, Technological, Environmental,

Legal

If your are in a market whose sales are predictable, you can use some

forecasting techniques. You could