0. Introduction
0.1. What is international marketing
- "At its simplest level, international marketing involves making one or more marketing mix
decisions across national boundaries.
- At its most complex level, it involves establishing manufacturing facilities overseas and
coordinating marketing strategies across the globe.” Doole and Lowe (2001)
0.2. The application of marketing principles to more than one country
- Find international customer needs and satisfy them better than the competition
- Important questions:
o Is it realistic?
o Do you have what it takes to make this succesful?
o Are you doing it for the right reasons?
o Do you know what you’re getting into in terms of competition?
0.3. 5 decisions: guide for this course
- Whether to internationalize
- What markets to enter
- Market entry strategies
- Designing commercial plan
- Implementing and coordinating
1. Global marketing
1.1. Views on doing international business
1.1.1. Globalization vs. internationalization
- Globalization
o The change in the world economy to a more interdependent system between
countries and regions (p.e. if China has a crisis, the whole world has a crisis)
o The trend of firms buying, developing, producing & selling products/services in most
countries and regions of the world.
o Global economic integration of many formerly (smaller parts) national economies
into one global economy.
- Internationalization
o The activity of firms on an international scale and the resulting impact of their activities
o International, means between or among nations.
o International can be limited to a region or a few countries
o A response to Globalization: contra against first movement
o Company that goes international but keep focus on different nations
1.1.2. How does company management look at internationalization
- Goal: Find and satisfy global customer needs
- Will have to coordinate marketing activities
- If you go international, the view of the company management decides if we go international
or not. It all depends on their vision, thinking…
- Different Management Orientations: “EPRG framework”
1-1
, INTERNATIONAL MARKETING
EPRG Framework: different management views/ orientations
- Ethnocentric companies (ethno = nation, people)
o Home country is ‘superior’
Their first country where they sell the most
o Needs of domestic market are most relevant
o Highly centralized decision-making (HQ power)
Head office has all the power
o Product is a copy-paste of home
o Organization & technology same as in home country
o Benefits
Cheaper: no cost & efforts needed for adaptation don’t need to change the
marketing from the product
High degree of control
One-way communication
o Downsides
No full exploitation of opportunities worldwide
Inefficient: decision makers need to travel a lot
No opportunity to learn from other cultures
Customization, your superior speaks a foreign language that you don’t
understand (chaos), they would miss out on some specific customer’s needs
o E.g. Japanese companies (Nissan, Parasonic, Sony) have a strong and big home market
Japanese consumers are the ideal buyer for them
o E.g. Nissan forgot that the winters in the states are harsher then in Japan cars broke
down and needed to go back to repair it high costs
o E.g. Harley Davidson
Is by most definitions an ethnocentric company
Understandably with respect to its positioning
• an ‘all-American’ brand
• holding a multinational appeal
they use a commercial for the whole world
- Polycentric companies (poly = a lot, multiple)
o ‘Each country is unique’
o Decision-making: Host country orientation, highly decentralized
o Products & marketing: country-by-country: different conditions for production and
marketing in different locations
o Marketing strategy: Localization & Adaptation
o Companies’ basic objective: ‘Public acceptance within the host country’
o Benefits
Better understanding of local needs more successful in your target market
Better exploitation of local market potential
Easier targetting with local teams
Maximize profits in each location with specific targets
o Downsides
No economies of Scale: increasing once output to decrease your cost with
30%, if you can double your output, your cost will decrease to export (to
produce more) so your production cost will be lower
High cost of local responsive marketing mix
Lack of coordination & control
No knowledge transfer between locations e.g. Market Research
o E.g. Rexona
Unilever’s deodorant REXONA has more than 39 # packages and even # brand
names
1-2
, INTERNATIONAL MARKETING
o E.g. McDonalds
McDonald’s strategy to serve non-beef burgers to its Indian customers can be
defined as a polycentric orientation
Each subsidiary has its own price and promotion policy
Note: Where possible Mc Donald’s will try to standardize (reduce cost), but
always keep an eye on the local market needs
Try to act global as possible, but with food they implement cultural foods to
be more local
- Regiocentric companies
o The world consists of regions
o These regions will be based on similarities, e.g. BENELUX market, EU, Nafta
o Strategies formulated based on the entire region rather than individual countries.
o Reasons:
Saves cost
Some sensitivity towards local: Asian approach is different than those of
European, but not that you need to focus on Japanse, Chinese, Indian
approaches …
Transitional step towards polycentric
o E.g. Coca cola
Regional based, considering big regions as main market
Have region sales offices, p.e. Signapore for asian market to contact them
- Geocentric companies
o ‘the world is one common market’
o Develop global product concepts without adaptions to the product but depends on
the industry.
o HQ & subsidiaries collaborate
o Not possible in FMCG, while easier in technology sector (iPhone, Google, Boeing)
more locally declined
1.2. Globalization vs. localization
- Globalization
o = global integration
o Recognizing the similarities between international markets and integrating them into
the overall global strategy
o Why using this
Removal of trade barriers
Relationship management
Standardized technology
Worldwide markets
Cultural homogenisation: some countries recognized something about your
country, same as home, e.g. Five Guys burgers
Worldwide communication
Global cost drivers
- Localization
o = market responsiveness
o Responding to each market’s needs and wants
o Why using this
Cultural differences
Regionalism/ protectionism
Deglobalization trend
1-3
, INTERNATIONAL MARKETING
- E.g. Henkel: Persil Black/ abaya
o Persil Abaya: 2007 in Saudi Arabia
Abaya: black overgarment worn by Arab women
Market need: Abaya needs to remain black product futures and USP
o Persil Black: 2011 in Western Europe
Via Abaya, detected a need for a detergent for black clothing in Western markets
When the black fashion wave goes the West they jumped on it lifestyle of
independent woman who is succesfuly who has a nice partner more the
emotions around
o Polycentric company: difference between every different country
- Glocalization
o Globalization + localization
o Think global, act local
o Combination: global concept but globalize it for different markets
o E.g. McDonalds: different food specialities depended on the country
o “The value chain function should be carried out where there is the highest competence
and the greatest cost-effectiveness and this is not necessarily at head office.” (Bellin
and Pham, 2007)
1-4
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller vdh1. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.96. You're not tied to anything after your purchase.