International marketing
Lecture 1 – international marketing: overview key concepts
Marketing: basic blocks
Marketing: performance of business activities
designed to plan, price, promote, and direct the
flow of a company’s goods and services to
consumers or users for a profit.
First, you have to define your target market.
Marketing strategy: 5C’s of the target market
> Customers: who are your customers and what do they want?
> Collaborators: what other parties do you work with? E.g., Suppliers
> Competitors: who are your competitors?
> Company: what are the things that the company needs to operate
their business and do well? e.g., employees, products
> Context:
• Sociocultural: what are people’s preferences and habits?
• Technological
• Regulatory
• Economic
• Physical: e.g., roads, climate, traffic
Marketing strategy: Value
When you have a clear image of the 5C’s you then try to understand what the
optimal value proposition is. Value proposition is the value that the company
aims to create in the target market. Defined by:
> Customer value: Why should consumers spend their money on our
product and not our other product or that of competitors?
> Collaborator value: Why should franchisees choose us, and not our
competition or open independent store?
> Company value: Why should we spend money and man-hours of our
engineers, management team, salesforce, etc. on this product and not
another one in the company’s portfolio?
For there to be an optimal value proposition, value has to be created for the company, for the collaborators and for the
customers. When you understand whether there is an optional value proposition or not, you can have a “go” or “no go”
decision for the product or service.
When the same activities are performed in more than one nation, you are presented with unfamiliar problems with
varying levels of uncertainty
GLOBAL vs. MULTINATIONAL
Levitt, T. Claimed that there are two types of corporations – global corporations and the multinational corporation.
GLOBAL CORPORATION
A global corporation…
> Operates in multiple countries...
> with constancy—at low relative cost—as if the entire world (or major regions of it) were a single entity
> Sells the same things in the same way everywhere.
> Standardization
• Lower prices
• Greater learning opportunities (knowing everything about one thing)
,MULTINATIONAL CORPORATION
A multinational corporation…
> Operates in multiple countries
> Adjusts its products and practices in each—at high relative costs.
> Adaptation to local tastes
> Higher prices:
• there are a variety of reasons for this - more market research, ordering from multiple suppliers = less
bargaining power, running multiple campaigns, less economies of scope.
• Less learning (knowing something about many things)
CULTURAL UNIVERSALS: VALUE AND SEGMENT CONVERGENCE
Some values and preferences are universal:
> Preference for lower prices, advertising elasticity
> Preference for modernity and reliability
> Cosmopolitanism as a defining characteristic of all sectors
à there is a large argument in favor of the global corporation because it produces cheaper products, with better price
and people aren’t that different.
Levitt: The Globalization of Markets (1983)
> “Only global companies will achieve long-term success by concentrating on what everyone wants rather than
worrying about the details of what everyone thinks they might like.”
> Henry fort said something similar: “...in 1909 I announced one morning, without any previous warning, that in
the future we were going to build only one model, that the model was going to “Model T,” and that the chassis
would be exactly the same for all cars, and I remarked: “Any customer can have a car painted any colour that he
wants so long as it is black.”
Global ≠ Standardized
Global does not mean that is has to be standardized.
> Toyota: “Vehicle names, technical details, equipment specs and colors of the model presented here may vary from
country to country. Not all models are available in your country.”
> McDonalds: Customized sandwiches across countries
> LV: Product and price customization in Japan
Cultural Universals: Etic vs. Emic
Constructs that apply equally well to other cultures
• Etic constructs: constructs that can be applied equally well across different cultures. Notions that might
not be equally important across different cultures, but people from different cultures will all
understand what it is, therefore they are equally applicable across cultures
• Survey-based studies with cross-sectional comparisons
• E.g., Humor, beauty?
Constructs that only apply to a given culture
• Emic constructs: something that people from a certain culture will understand, but people from other
cultures won’t.
• Not applicable across cultures
• Determined through perceptions of culture member
Dawarand Parker (1994)
Research Question: Are there culture-invariant consumer behaviors ?
> Empirical test in 38 countries (Latin, Germanic, Anglo, Nordic, other)
> n = 640
> Technology products
> Matched-sample approach (young, mobile, affluent, educated)
People were asked how they assess quality -> the study tried to measure the following: In general, how likely are you to
use brand names [physical appearance/prices/retailer reputation] as a sign of quality for purchasing electronics
products?
, There were 3 broad questions that were of interest for the researchers:
1. Do these specific behaviors exist?
2. Is the relative order of importance of behaviors similar across cultures?
3. What’s the absolute level of behavior across cultures?
As you can see consumers from different cultures seem to assess
quality very similarly. There are some small differences, but the
pattern seems to be consistent across the board. This study used a
survey and the sample only included IBA students so it might not
represent the general population very well. The grouping of the
countries is also a bit questionable.
Universal vs. Country-specific Behaviors
Existence of specific behaviors is UNIVERSAL
> Relative order of importance of behaviors across cultures
> Absolute level of behavior across cultures
Tutorial 1
Objectives
> Explain the Market elements using the 5 C’s
> Define the key elements of a market
> Review the value proposition of existing companies and argue whether it is optimal, given their target market
characteristics.
Need/value: needs that are directly related to the service (what need to people try to fulfil) <-> consumer characteristics:
what are the characteristics of the consumers (do not have to be in relation to the product).
à With the Value proposition you shouldn’t just look at the customers, but also at the collaborators.
Lecture 2 – segmentation and targeting
What Is Targeting?
Targeting: process of identifying customers for whom the company will optimize its offering.
> One for all-strategy
> One for-each strategy
Targeting and segmentation, falls somewhere in the middle of these extremes.
Is One-for-Each Always a Good Idea?
What are the possible sources of additional costs for the company?
> You can’t standardize the production of the goods
> It’s harder to buy in bulk à bargaining power with the suppliers decreases
> More costly to target customers with different needs à marketing cost will increase
> Management might become more complicated
That’s why most companies will take the middle way and use segmentation.
What Is Segmentation?
Segmentation: grouping of customers with similar needs by focusing on those differences that are relevant for targeting
and ignoring those differences that are irrelevant.
Segmentation and Targeting: How To
Strategic Tactical
> Strategic segmentation: grouping > Tactical segmentation: grouping customers
customers based on the value the company based on their demographics and behavior.
can create and capture. > Tactical targeting: laying out the channels
> Strategic targeting: selecting one or more to be used to communicate and deliver the
segments to serve by tailoring the offering offering to strategically viable customers
to customer needs.
