A complete summary of all chapters needed to study for the International Marketing Exam taking place 26th of January 2022.
Chapters included are: 1 (excl 1.7-1.11), 2, 4.3 and 4.5, 6 (excl 6.4-6.6), 7 (excl 7.8), 8, 9, 10, 11, 12, 14, (excl 14.7 and 14.9-14.13), 15, 16 (excl 16.6 and 16.9) and 1...
1.2: the process of developing the global marketing plan
A firm’s global competitiveness is mainly dependent on the end-result of the global
marketing stages: the global marketing plan. The purpose of the marketing plan is to create
sustainable competitive advantages in the global marketplace. Generally, firms go through
some kind of mental process in developing global marketing plans. In small and medium-
sized enterprises (SMEs) this process is normally informal; in larger organizations it is often
more systematized.
Development of an international marketing plan:
1. The decision to internationalize – nine strategic windows model
2. Deciding which markets to enter – segmentation / screening + selection of target
market / country
3. Market entry strategies
4. Designing the global marketing programme
5. Implementing and coordinating the global marketing programme
1.3 comparison of the global marketing and management style of SMES AND LSES
LSEs: large scale enterprise >250 employees
SMEs: small-medium enterprises <250 employees (approximately 99% of all firms)
,Characteristics of LSEs and SMEs:
Formation of strategy/decision-making process
the realized strategy (the observable output of an organization’s activity) is a result of the
mix between the intended (‘planned’) strategy and the emergent (‘not planned’) strategy.
,No companies form a purely deliberate or intended strategy. In practice, all enterprises will
have some elements of both intended and emergent strategy.
In the case of the deliberate (planned) strategy (mainly LSEs), managers try to formulate
their intentions as precisely as possible and then strive to implement these with a minimum
of distortion.
Another approach for the process of strategic management is so-called logical
incrementalism, where continual adjustments in strategy proceed flexibly and
experimentally. If such small movements in strategy prove successful, then further
development of the strategy can take place.
Managers may well see themselves as managing incrementally, but this does not mean that
they succeed in keeping pace with environmental change. Sometimes the incrementally
adjusted strategic changes and the environmental market changes move apart and a
strategic drift arises
Economies of scale and economies of scope
Economies of scale:
Greater volume in production, results in lower cost price per unit
Because of size (bigger market share) and accumulated experience, the LSEs will nor- mally
take advantage of these factors (see Exhibit 1.2 about Nintendo’s Game Boy). SMEs tend to
concentrate on lucrative, small, market segments. Such market segments are often too
insignificant for LSEs to target, but can be substantial and viable in respect of the SME.
However, they will only result in a very limited market share of a given industry.
Economies of scope:
Reusing a resource from one business/country in additional businesses/countries
The challenge in economies of scope at a global level is the responsiveness to the two
conflicting needs: the central coordination of most marketing mix elements and the need for
local autonomy in the actual delivery of the products and services.
LSE’s often serve many different markets/counties on more continents and can transfer
experience from one country to another. Normally, SME’s serve only a very limited number
of international markets outside their home market. Sometimes the SME can make use of
economies of scope when it enters an alliance or a joint venture with a partner who has
what the SME is missing in the international market in question: a complementary product
programme or local market knowledge.
→ Example: Bob’s business makes pizza and uses graphic designers to help market the
goods, if the business expands and starts producing waffles and garlic bread as well, it could
expand the role of the designer to sell these goods too! Spreading the cost of the designer
over more units.
→ example of economies of scale and scope can be found in the world car industry. Most car
companies use similar engines and gearboxes across their entire product range so that the
same engines or gearboxes can be installed in different models of cars. This generates
, enormous potential cost savings for companies such as Ford or Volkswagen. It provides both
economies of scale (decreased cost per unit of output), by producing a larger absolute
volume of engines or gearboxes, and economies of scope (reusing a resource from one
business/country in additional businesses/countries). It is not surprising that the car industry
has experienced a wave of mergers and acquisitions aimed at creating larger global car
companies of sufficient size to benefit from these factors.
1.4 should the company internationalize at all?
Due to globalization and an increasingly interconnected world, many firms attempt to
expand their sales into foreign markets. International expansion provides new and
potentially more profitable markets, helps to increase the firms competitiveness and
facilitates access to new product ideas, manufacturing innovations and latest technology.
However, a firm is unlikely to succeed if they do not prepare in advance carefully!
Industry globalism
The strategic behaviour of firms depend on the international competitive structure within an
industry.
In the case of a high degree of industry globalism there are many interdependencies
between markets, customers and suppliers, and the industry is dominated by a few large,
powerful players (global), whereas the other end (local) represents a multidomestic market
environment, where markets exist independently of one another. Examples of very global
industries are those making smartphones, apps for smartphones, IT (software), films and
aircraft (the two dominant players being Boeing and Airbus). Examples of more local
industries are those that are more culture-bound, such as hairdressing, foods and dairies
(e.g. brown cheese in Norway).
Preparedness for internationalization
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