international marketing definitions, scope and issues
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International marketing
Definitions, scope and issues
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DEFINITIONS
‘the objective is, as in domestic markets, to understand the customer and market needs and strive to meet them with the capabilities the organization has at its disposal’.
‘adapt familiar techniques to unfamiliar circumstances.’
Fifield and Lewis ‘International Marketing Strategy’ 1995
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Kotabe and Helsen – orientation framework
Type of marketing Domestic
marketing Export marketing International
marketing Multinational
marketing Global marketing
Orientation Ethnocentric Ethnocentric Polycentric
Regiocentric
Geocentric
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Keegan and Schlegelmilch - business classification
Domestic – export focus International – Multi domestic
strategy Global/Transnational – globally
integrated strategy
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Economic background
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The world economy - Glossary
Gross Domestic Product (GDP)=A country’s total output of goods and
services Balance of (merchandise) trade= exports-
imports World output=sum of all countries’ GDPs World trade=total exports + imports Disposable income=total income-essential
purchases
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The world economy - Glossary
Foreign Direct Investment (FDI)=Foreign manufacturing/operations
located in a host country Portfolio investment=short term foreign
investment in equities, commodities, currencies etc
These are a key source of financial flows between countries
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WORLD TRADE *(exports + imports) and world output, 1990-2000
World trade growing at <6%p.a. 12% in 2000
World output growing at <2% p.a. 4% in 2006
* Merchandise
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Exports and imports of goods % GDP (2000)
Region/country
Exports Imports
N. America 17%(27) 23%(20)
W.Europe 40%(32) 40%(40)
Japan 8%(.4) 6%(1)
Asia 27%(14) 23%(14)
Latin America
6%(12) 6%(11)
( )=1948
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Share of global exports and imports of services (2000) – top 5 exporters
Region/country
Exports Imports
North America
19% 14%
U.K. 7% 6%
France 6% 4%
Germany 6% 9%
Japan 5% 8%
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Disposable income threshold
$10,000 (£6.5k) :virtually no disposable income
$20,000 (£11k): considerable purchasing power
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Trade Blocs
‘Regional economic arrangements’ (from free trade to economic union)
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Big Emerging Markets (BEMs)
Chinese Economic Area (CEA)China and HK, Taiwan
Association of Southeast Asian Nations (ASEAN) Indonesia, Brunei, Malaysia, Singapore,
Thailand, the Philippines, Vietnam Customs union: low internal tariffs and
common external tariff
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Other BEMs
India, S. Korea, Mexico, Brazil, Argentina, S. Africa, Poland, Turkey.
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‘Regional economic arrangements’ (from free trade to economic union)
North American Free Trade Area (NAFTA)
US, Canada and Mexico
Low internal tariffs, with local content laws
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Mercado Cooperativo Sur (MERCOSUR):Brazil, Argentina, Uruguay, Paraguay Free trade area
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European Union (EU) Germany, France, Italy, UK, Spain, Greece, Portugal, Belgium, Netherlands, Austria, Sweden, Denmark, Finland, Ireland, Luxemburg,
New members from 1 May 2004Cyprus, Czech Rep., Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia. Towards monetary union
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TODAY’S ECONOMIC DRIVERS
Technology which impacts on: Communications:
Foreign travel Global advertising Web-based trading
Costs of production Customisation Access to information Logistics
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TODAY’S ECONOMIC DRIVERS
De-regularization and privatisation:
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The Global Village - Cultural convergence
Evidenced by:
Emergence of global market segments eg young, urban professional:
Nike trainers (US, made in China) Toshiba laptops (Japanese) Nokia mobiles (Finnish) AOL ISP (US) BMW car (German)
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The Global Village (cont.)
This has led to: Growth in product standardization (see
Levitt 1983) Growth in ‘global’ brands Mergers, acquisitions and strategic
alliances: Swatch and Mercedes (electric car) Ford and Jaguar cars AOL and Time Warner
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THE KEY QUESTIONS
Do we go international/global? Where do we operate? How do we enter and operate? What do we offer? Should it be adapted? What are the implications for the
marketing mix?
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An analytical frameworkInformation areas
Issues Decisions
Consumers Segment profiles: size and relevance
Fit? Profitable? Suitable?
Company S&W, objectives Competence? Entry strategy? Standardise?
Country Socio/econ, logistics, stability
Entry strategy? Standardise? Risk?
Culture Beliefs, behaviour, symbols
Standardise or adapt?
Currency Stability Pricing, profits
Competition Who (S&W), 5 Forces? Competitive strategy (Porter, Hamel and Prahalad)
Other?