BSB119 L W 9

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Queensland University of Technology
Management and Human Resources

BSB119 – GLOBAL BUSINESS LECTURE 9: INTERNATIONAL MARKETING What is marketing?  Marketing means different things to different people, and the term has often been used to describe: selling and advertising, dealing with customers, promotional activities, distribution strategies, achieving profits, etc o It encompasses all of the above Importance of international marketing  Many firms today operate within international environments of opportunities and threats  Firms need to consider issues like:- o Domestic and international differences  Levi case study  McDonalds – cater the product to different markets o How to segment international markets o How to configure the international marketing mix o Whether to develop new products or adapt existing products for the new market(s) What is international marketing?  Process by which the firm: o Identifies needs and wants of customers in different international markets o Provides products, services and ideas competitively to satisfy needs and wants of different customer groups o Communicates information about the products and services, delivering them internationally using one or a combination of foreign market entry modes  The international marketer needs to adjust and/or adapt to uncontrollable elements such as:- o Political/legal forces o Economic forces o Competitive forces o Level of technology These factors are typical when doing international business o Structure of distribution and largely, have been covered throughout the semester o Geography and infrastructure o Cultural forces Globalisation of markets and brands  Theodore Levitt famously argued about the “globalisation of world markets” o According to Levitt (1983), world markets are becoming increasingly similar, making it unnecessary to localise the marketing mix  An international marketing strategy views the world’s consumers as having similar tastes and preferences. o In today’s global economy, we see the convergence of tastes and preferences the world is becoming a borderless global village and cultural differences are no longer as important. o Modern communications technology and rising income levels are promoting a common culture worldwide everywhere in the world, our behaviour and practices are becoming more and more similar.  The current consensus is that although the world is moving towards global markets, the continuing persistence of cultural and economic differences among nations would act as a major brake on any trend towards global consumer tastes and preferences o Ignoring consumer preferences can lead to failure  In addition, trade barriers and differences in product and technical standards also constrain a firm's ability to sell a standardized product to a global market o This results in unit cost reductions and economies of scale o Are these savings passed onto the consumer? o Levi’s – the process was not working Managing the marketing mix – product strategy  Marketing mix = choice about product attributes, distribution strategies, communication strategies and pricing strategies that a firm offers its target markets o Typically varies by country or region due to culture, economy, distribution  Market segmentation: identifying consumers whose purchasing behaviour differs from others o Can be done in a variety of ways including culture, geography, demography and psychological factors  Alternatives (Standardised vs. Adapted Product):- 1. Sell the product internationally as it is 2. Modify the product for different countries or regions 3. Design new products for foreign markets 4. Incorporate all differences into one product and introduce it globally Factors encouraging standardisation Factors encouraging adoption  Economies of scale in production  Differing use conditions  Economies in product R&D  Government and regulatory influences  Economies in marketing  Differing consumer behavior patterns  Economic integration  Local competition  Global competitions  True to the marketing concept Managing the marketing mix – place (distribution) strategy  Way in which product is delivered in consumers o This may impact mode of entry to country Differences between Countries – 4 main factors  Retail Concentration (concentrated or fragmented?) o Concentrated - a few retailers supply most of the market (eg. Australia and USA)  Eg. Lots of suburban shopping centers  Woolworths and Coles o Fragmented – many retailers but none has a major share of the market (eg. Japan)  Impacted by population density  Typically in less developed countries  Channel Length (long or short?) o Refers to the number of intermediaries between the producer and the consumer  Long – more intermediaries (typical in a fragmented system)  More expensive method  Short – Less intermediaries  Where retail system is concentrated this method makes sense  Internet has impacted on this method  Channel Exclusivity o Exclusive distribution channel is one that is difficult for outsiders to access  Retailers prefer established products rather than the uncertainty of unknown products  Japanese market is difficult to break into with a new product  Some have been successful eg Procter and Gamble  Channel Quality o The expertise, competencies and skills of established retailers in a nation, and their ability to sell and support the products of international businesses. o The quality of retailers is good in most developed countries, but is variable at best in emerging markets and less developed countries o May impact market entry Managing the marketing mix – promotion (communication) strategy Barriers
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