global environment

GlobalEnvironment

International Marketing 70-480, Session 3Lloyd Corder, Ph.D.

Models

Corder’s Questions

1. How can we asses, define and think about marketing challenges?

2. What are popular marketing models and how do they work?

3. ModelsInternational Marketing 70-480Lloyd Corder, Ph.D.

A-B-C-D Paradigm


Standardization Issues


Marketing Audits

• Techniques• Senior management interviews• Employee interviews• Customer and marketplace input• Review of marketing and communication tools

Helps determine “where an organization is in terms of its marketing practices, goals and achievements.


Basic Marketing Models

• Models• 5 W’s• 4 P’s• 4 C’s• 5 Forces• SWOT• Product Life

Cycle• 2 X 2 Maps

• Why Use Them?• Simplify marketing problems• Provide framework and a common

language• Helps showcase that price is an

element of the marketing mix—not a stand alone phenomenon

• All marketing has a cost and should have a benefit we can use to influence price


The 5 W’s

MarketingSituation


Who?(Target audience, segment,

niche)

Why?(Build image, generate leads)

What?(Product, service, package)

When?(Level of urgency, life cycle)

Where?(Channel, positioning)

RevenueExpenses

What are the product’s key features / benefits?

Why should someone buy this product?

How is the product distributed?

How many steps does it take to get from the producer to the end user?

What marketing, public relations or advertising is used to sell the product?

Which one(s) are working and how well?

How is the product priced?

How are its competitors priced?

Product Place (Distribution) Promotion Price

The 4 P’s

Unique packaging“Superior cleaning

power”Affinity marketing —

“cool people drink XX”


Retail storeWarehouse store,

Sam’s ClubMail orderInternet/electronic

distribution

Newspaper versus TV versus radio ads

Retail placement — aisle-end displays

New media?

Value pricing/ “Every Day Low Price”

Premium pricingPrice discrimination

Price versus Product


Prod

uct Q

ualit

y

Price

High Medium Low

High Premium Penetration Super bargain

Medium Overpricing Average quality Bargain

Low Hit-and-run Shoddy goods

Cheap goods

Costs Customers Competitors Channels

Break down the company’s cost structure (fixed, variable)

Estimate the competitor’s cost structure

Understand trends in cost structures

Segment the company’s customer base (new/existing; loyal/switchers)

Examine company profitability by segment

How much do they purchase? At what price?

Identify major competitors (traditional, unexpected substitutes)

What are the competitor’s strengths and weaknesses (profits, costs)?

Investigate market share

Identify relative channel leverage (sources of advantage / sustainability)

Impact of channel strategies on market positioning

4 C’s


Number / size of suppliers

Switching costs / product differentiation

Availability of substitutesPossibility of forward

integration

5 Forces


Supplier Power

Economies of scaleCapital costsCost advantage of existing competitorsBarriers to exitPatents

Barriers to Entry

Significance of the purchase relative to cost structure

Switching costsPurchase volumeThreat of backward

integration

Buyer Power

Relative price / value of the substitute compared to industry’s product

Cost of switching to substituteBuyers’ propensity to switch

Substitutes

Number and size of competitors

Industry growth rateProduct differentiation

factorsIndustry margins / pricing

Market Rivalry

Source: Michael Porter

Strategy and the Internet Harvard Business Review

Club Med Locations


Club Med 5 Forces Model


Entry Mode Pros and Cons


More Barriers


SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats


Strengths

Weaknesses

Opportunities

Threats

Internal External

Life Cycle

• Assumptions• Products have a limited life; can’t be

sold as the same product forever• Each product progresses through four

stages (introduction, growth, maturity and decline)

• Pricing should be adapted to capitalize on where the product is within its life cycle


Entry Issues


Life Cycle Stages

Source: Basic Marketing, E. Jerome McCarthy

Start up

Make money Fight off competitors

Sell on price, exit

Cycles are getting

shorter and shorter

Where marketers wimp out


2 X 2 Diagrams• Take two attributes and plot them against each other (with

each axis going from low to high)• Name the four resulting boxes• Examples

• Boston Consulting Group Growth-Share Matrix• Importance-Performance Plots• Channel/Market Growth Chart• Covey Priority System


Boston Consulting Group Growth-Share Matrix

Cash Cow Dogs

Question Marks

Stars


High Growth

Low Growth

High

Mar

ket S

hare

Low M

arket Share

Importance/Performance Plots


Concentrate Here

Low Priority

Keep Up the Good Work

Possible Overkill

Extremely Important

Slightly Important

Fair

perf

orm

ance

Excellent Performance

Channel/Market Growth Map


Introductory

(Hobbyist Store)

Growing

(Specialty Retailer)

Declining

(Mail Order)

Mature

(Mass Merchandisers)

Value Added By The Channel

Slightly Important

Mar

ket G

row

th R

ate

Excellent Performance

Low High

High

Low

Covey Priority System


AC

BX

Important

Not Important

Urg

ent

Not U

rgent

Corder’s Conclusions

• Marketing models help clarify and simplify marketing situations• There are literally hundreds of marketing models• Adapting existing models or creating your own to assess

marketing challenges can be a powerful and persuasive consulting tool



http://www.corcom-inc.com/

global environment

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phenomenonall marketing

marketing practices

marketing challenges

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popular marketing models

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