international marketing strategies - campus360campus360.iift.ac.in/secured/resource/163/ii/mkt...
TRANSCRIPT
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International Marketing Strategies
Session 3-4
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The International Marketing Task
(Controllable)
Firm Characteristics
Price
ProductPromotion
Research
Channel of Distribution
Domestic Environment(Uncontrollable
Competitive Structure
Economic Climate
Political/Legal Forces
Political/Legal Forces
Cultural Forces
GeographyAnd Infrastructure
Structure of Distribution
Level of Technology
CompetitiveForces
EconomicForces
Foreign Environment(Uncontrollable
AB C
A B C
Environmental uncontrollable elements
Country Markets
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Marketing Decision Factors
• These factors are found within the company environment where the marketer has control over them.
• These factors are:• Price
• Promotion
• Product
• Place (Channels of Distribution)
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The Value Chain
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Simplified Version of the Value Chain
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Centralizing Upstream activities and Decentralizing downstream activities (Global + International Orientation)
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Virtual Value Chain as Supplement to Physical Value Chain
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ANALYSIS LEVELS
• MACRO (COUNTRY) LEVEL:• PEST / PESTL• PORTER’S DIAMOND• SWOT
• MEZZO (INDUSTRY) LEVEL:• PORTER’S 5 FORCES• COMPETITIVE POSITIONING• C-ANALYSIS
• MICRO (COMPANY) LEVEL:• INTERNAL COMPANY ANALYSIS (capabilities, resources, etc)• DUE DILLIGENCE…
3 KEY ISSUES:
1. APPLICABILITY &
RELEVANCE
2. RISK MITIGATION
3. SUPPORT FOR
DECISION-MAKING
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EXAMPLE: PORTER’S DIAMOND
Apply the data so it is relevant to your company and line of business!
What drives
demand?
Decision-making
factors
Elasticity?
Which factors are
key for your
business
venture?
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http://globaledge.msu.edu/tools-and-data/diagnostic-tools/core
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PEST ANALYSIS 1/3
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PEST ANALYSIS 2/3
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PEST ANALYSIS 3/3
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PORTER’S 5 FORCES ( Business Strategy)
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Stages of Researching Foreign Market Potential
Stage One
Preliminary Screening for Attractive Country Markets
(Which foreign Markets warrant detailed Investigation?)
Stage Two
Assessment of Industry Market Potential
(What is the aggregate demand in each of the selected
Markets?)
Stage Three
Company Sales Potential Analysis
(How Attractive is the potential demand for company
Products and services?)
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Using Trade Databases
• Trade Map
• WITS
• World Bank
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Prospects for Diversification
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Political Risk AnalysisFactors Examples
Level 1 General Instability Revolution, external aggression
Level 2 Expropriation Nationalization, contract revocation
Level 3 Operations Import restrictions, local content rules, taxes, export requirements
Level 4 Finance Repatriation restrictions, exchange rates
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Governance Index• http://info.worldbank.org/governance/wgi/index.asp
x#reports
CURRENT PREVIOUS
RATINGS SCORES RATINGS SCORES
Rwanda C 51C 52
Niger D 63D 64
Chad D 67D 67
Ecuador C 60C 60
Mozambique C 54C 54
Somalia E 86E 86
South Africa C 41C 41
Sudan D 78D 78
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Researching the Industry
• India’s export to world
• India’s export to country X
• Country X’s import from world
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Existing and potential trade between India and World in 2014
Product: 8703 Cars (incl. station wagon)
Product Code
Product Label
India's exports to world
Indicative potential trade, USD thousand
Value in 2014, USD thousand
Annual growth in value between
2010-2014, %, p.a.
Share in world
exports, %
'870310Snowmobiles, golf cars and similar vehicles 730 -13 0 730
'870321
Automobiles w reciprocatg piston engine displacg not more than 1000 cc 1199772 -11 6.1 1199772
'870322
Automobiles w reciprocatg piston engine displacg > 1000 cc to 1500 cc 3236803 14 4.3 3236803
'870323
Automobiles w reciprocatg piston engine displacg > 1500 cc to 3000 cc 835521 69 0.3 835521
'870324Automobiles with reciprocating piston engine displacing > 3000 cc 288 -49 0 288
'870331Automobiles with diesel engine displacing not more than 1500 cc 389435 70 1.8 389435
'870332
Automobiles with diesel engine displacing more than 1500 cc to 2500 cc 93024 19 0.1 93024
'870333Automobiles with diesel engine displacing more than 2500 cc 11517 2 0 11517
'870390Automobiles nes including gas turbine powered 1887 -47 0 1887
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Preliminary Screening
• This involves rating the countries on the macro level indicators
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Country Identification
• Candidate countries could be: • Angola
• Mexico
• South Africa
• Nigeria
https://atlas.media.mit.edu/en/
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Environmental Research
• Physical
• Sociocultural
• Economic
• Regulatory
http://www.countryreports.org/
http://geert-hofstede.com/albania.html
http://www.tradingeconomics.com
http://hdr.undp.org/en/countries/profiles/IND
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Market Size= (Local Production-Export)+Imports
In-Depth Screening
• Market Size• http://data.un.org/
Indirect measure: GNP, Population size, growth in GNP and imports of relevant goods
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In Depth Screening
• Market Growth • Growth estimates obtained by getting the market size measures for different
years and computing the growth rate
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In Depth Screening
• Competitive Intensity • Level of competition can be measured by the number of competitors in the
market and relative size distribution of market shares.
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In Depth Screening
• Trade Barriers• Tariffs, taxes, duties and transportation costs can be ascertained from official
government publications.
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Final Selection
• Forecasted revenues and costs are compared to find the country market that best leverages the resources available.
• Importance /Weights are assigned to various variables in the country report
• The weighted sum may be chosen as a criteria to get the final list of two-three countries.
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Forecasting Country Sales
• Sales = Industry Sales X Market Share (Expected)
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Industry Sales (Build up Method)
1.Build-up method- market sales are estimated on the basis of separate estimates from individuals knowledgeable about certain segments of the market.
2.These single estimates of various parts of the market are aggregated (build-up) into an evaluation of total market size.
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Industry Sales: Forecasting Analogy
• The basic premise underlying forecasting by analogy is that the sales in one “lagging” country will show similarities in another “leading” country where product is already marketed.
Sb (2015)=[Sa(2000)/GNPa(2000)]xGNPb(2015)
To account the difference between the countries, the sales figures are usually weighted by a measure such as GNP or population size,
S = Unit sales, subscript a=leading country, subscript b= lagging country and there is a lag of 15 years.
[Sa(2000)/GNPa(2000)]= Unit sales per dollar (or the currency equivalent)
By multiplying the above to lagging country GNP a sales forecast is arrived to
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Judgmental Forecasts
• Jury technique
• Expert pooling
• Panel Consensus
• Delphi Method
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Forecasting Market Size for the firm
• Armstrong's Regression Model:R (Average Sales per potential Buyer)
=f(E, P, B, T, W, C, G)E= Standard of living IndexP= Price of the goodB= Buying unit index (household per adult) T= TemperatureW=RainfallC=Proportion of children in the populationG= Growth of per capita income per year
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Forecasting Market Size for the firm
The second step is to get the size of the potential market using a multicaptive chain
• M=(T)x(L)X(A)X(N)M= Number of potential buyersT=Total populationL= Literacy rate (proportion)A= Proportion of population in the desired age group (e.g., 18-64)N= Proportion of nonagricultural employment
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Forecasting final Size
• S= (R) X (M)
• S= forecasted sales in unit per year in a given country.
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Sources of Secondary Data
• www.stat-usa.gov
• www.ita.doc.gov
• www.ustradeonline.gov
• www.census.gov/foreign-trade.gov
• www.cia.gov/cia/publications/factbook
• www.customs.ustreas.gov
• www.opic.gov