GLOBAL MARKETINGPRESENTATION

Presented By,

•Harshit Katwala•Niharika Dubey•Sangeeta Thavamani•Khyati Haria•Dhwani Shah•Puja Rai•Ankita Tripathi

Agenda• Introduction• Deciding whether to go abroad• Deciding which markets to enter• Deciding how to enter the markets• Deciding on the Marketing Program

▫Product▫Communications▫Price▫Distribution Channels▫Country-of-Origin Effects

• Deciding on the Marketing Organizations• Summary & Conclusion

INTRO - Harshit

•Harshit’s part to be appended tomorrow•Please be there at 9 am sharp

Deciding Whether to go Abroad:

Why go Abroad ?

•Companies go international for a variety of reasons :-▫Growth▫Larger customer base▫Diversification▫To counterattack global competitors

Internationalization Process

1. No regular export activities2. Export via independent representatives3. Establishment of one or more sales

subsidiaries4. Establishment of production facilities

abroad

SUBWAY

•While much of its network is based in North America, the chain's focus has shifted to its international operations.

Strategies…

•Expanding internationally▫First entered into world market in 1984 in

the Middle East nation of Bahrain.

▫Their approach at that time was :‘ If you like Subway , you think it’s a good

thing and you think it would work in your country, then we’ll teach you the concept and how it works and you go and make it work in your country. ‘

Subway in China• China is the largest

franchise market in the world.

• The demand for fast food increases with economy, more disposable income.

• Chinese people don’t like to eat with hands so Subway introduced a subway Salad bread bowl

Subway in India

• SUBWAY has come a long way in India since it opened its first restaurant in New Delhi in 2001.

• Young Indians have made it one of their favorite places to hang out in.

• Subway has developed a unique menu to appeal to the Indian taste.

Deciding which markets to enter:

Internationalization Strategies

•Waterfall Approach – more time to plan, less risk involved

•Sprinkler Approach – first mover advantage, high competitive intensity, more risks

•Examples:•Waterfall Approach – Dilmah Tea – Sri

Lanka

•Sprinkler Approach – Microsoft Products

Developed Vs Developing Markets

Developed Vs Developing nations in the world

Developed & Prosperous parts of developing na-tionsDeveloping nations

Factors favourable to tap developing markets•Unmet needs of emerging markets•Huge potential markets for food, clothing,

shelter, appliances, consumer electronics•Market leaders rely on developing

markets for growth•Unilever, Colgate -> 40% of their business

in developing markets

Successful taps into Developing markets•Grameen-Phone: Hiring village women as

agents to lease phone time to villagers

•Colgate-Palmolive: Video vans that showed benefits of toothbrushing

Risks at tapping developing markets

•Vast economic and cultural differences•Marketing infrastructure may barely exist•Local competition being surprisingly still

Trading Agreements between countries•SAFTA – South Asian Free Trade Area•Formed in 2006•Includes Bangladesh, Bhutan, India,

Maldives, Nepal, Pakistan & Sri Lanka•Reducing tariffs and non-tariff barriers on

imports•Expanding investment and Production

activities•Improving foreign exchange earnings

More Examples

•The European Union•NAFTA – North American Free Trade

Agreement•MERCUSOR – Latin America•APEC – Asia-Pacific Economic Forum•ASEAN – Association of Southeast Asian

Nations

Evaluating Potential Markets•Prefer to sell to neighbouring countries –

Canada & Mexico•Prefer countries similar in language, laws

and culture•A company prefers country,

That ranks high on market attractivenessLow in market riskIn which it possesses competitive advantage

•Eg: Bechtel – detailed strategic market analysis

Deciding how to enter the markets:

HOW TO ENTER THE MARKET

•Exporting•Joint Venture•Licensing•Direct Investment•Indirect And Direct Exports

Entry Strategies

Exporting --Historically Most Popular 1. Types a. Direct - firm handles all tasks to sell

within host country b. Indirect - firm delegates the tasks to

an intermediary

Cont’d 2. Advantagesa. Minimizes political riskb. Useful when market

potential is hard to assess

c. Offers channel flexibility

d. Prepares firm for greater involvement

e. Offers ease in market withdrawal

3. Disadvantagesa. Exchange rate

fluctuations and governmental intervention can affect earnings

b. Lack of market presence can affect response time

c. Loss of marketing control can affect corporate image

JOINT VENTURE

•A joint venture is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and then they share in the revenues, expenses, and control of the enterprise

REASON FOR JV’s

•JV provides a lower risk option of entering into a new country. Example- Motorola entered India in JV with blue star company, a brand with repute and vast distribution network.

• It also provides an opportunity for both the partners to leverage their core strengths and increase the profits.

• It also provides a learning opportunity for both the partners.

LICENSING

•Licensor issues a license to use its trademark and manufacturing secrets for a fee or royalty.

•Good way to start in foreign operations and open the door to low risk manufacturing relationships.

•Coca Cola is an excellent example of licensing. In Zimbabwe, United Bottlers have the license to make Coke.

Cont’d

•A company can enter a foreign market through franchising also, a complete form of licensing.

•The most common example of franchising are Subway, Mc Donlads, KFC, PizzaHut.

DIRECT INVESTMENT

•Direct ownership of foreign based assembly or manufacturing.

•The foreign company can buy part of full interest in local company or built its own facilities.

•The firm secures cost economies in the form of cheap labour and raw material.

•Its strengthens its image as it creates jobs in host country.

•Example: General Motors

Deciding on the market program:

PRODUCT1) STRAIGHT EXTENSION – INTRODUCING PRODUCT IN FOREIGN

MARKETS WITHOUT ANY CHANGE

2) PRODUCT ADAPTATION – ALETRING THE PRODUCT TO MEET LOCAL CONDITION .

3) PRODUCT INVENTION – CREATING SOMETHING NEW

COMMUNICATION

10-34

ProductSame DifferentCommunication

Different

SameStrategy 1:

Dual Extension

Strategy 2:Product ExtensionCommunication

Adaptation

Strategy 4:Dual Adaptation

Strategy 3:Product Adaptation

CommunicationExtension

MC DONADLS

PRICE1) SET A UNIFORM PRICE EVERYWHERE .

2) SET A MARKET BASED PRICE IN EACH COUNTRY .

3) SET A COST BASED PRICE IN EACH COUNTRY .

DISTRIBUTION CHANNEL

•Plays a vital role in the reaching of the product

•Channel varies from country to country

•Japan has the most complicated channel

•When Multi Nationals enter a country they prefer to work with local distributors but often face problems

Cont’d

•HUL’s distribution network comprises 6.3 million retail outlets reaching entire urban population and 250 million rural population

•Pepsi co and its affiliates operates in more than 140 countries and generates revenue in excess of $ 40 billion

COUNTRY-OF-ORIGIN EFFECTS

•BUILDING COUNTRY IMAGE

CONSUMER PERCEPTION OF COUNTRY OF ORIGIN

Deciding on the marketing organization:

• Companies manage international marketing activities in 3 ways:

1. Export department- Simply shipping out the goods.

EG:•Cotton textile industries which deal into

export of cotton garments.

2. International division- Created by companies engaged in several international markets & ventures. The operating units can be geographical organizations, world product groups or international subsidies.

EG:• IBM has its international subsidies in China,

Austria, Italy, Norway, Holand, Poland, France, Germany, Romania & Belgium.

3. Global Organization- Global operating units directly report to executive committee & not head of international division.

EG:•COCA COLA adopts a glocal strategy

where it standardizes certain global elements & localises others.

Summary:

Conclusion: