International marketing summary
Lecture 1: introduction
- 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.
- There are 2 groups of decisions that need to be made:
o Strategic aspects: defining the target market and defining the value proposition
and positioning.
o Tactical aspects: product, service, brand, pricing and incentives,
communications, and distribution.
Marketing strategy: 5C’s of the target market
As a company, you need to figure out the category that you are operating in. Then divide this
into segments and understand what the different needs in the market are choose between
the segments and optimize the value proposition for one of them.
- We need to define the market using the 5 C’s:
- Customers: needs, values and profile (characteristics) of customers.
o Needs/values = what customers need from the product, for example, whether it
needs to be delivered fast, good-value-for-money, etc.
o Profile = facts about the population, numbers, income levels, lifestyle, etc.
- Collaborators: all companies that are needed to establish the brand in the market. For
example, ingredient suppliers and delivery partners.
o Outsourcing delivery could save costs and time, and it is done by companies
that have the knowledge and expertise.
- Company: this includes everything that is important for the company and that makes
the company stand out from others (key competences). A company can do
experimentation to become better in specific things.
- Competitors: This includes the competitors, indirect competitors, and substitutes. For
example, for Dodo pizza it can be local pizza stores and other big pizza restaurants
that also offer delivery.
- Context: the infrastructure at the higher level.
o Sociocultural
Social and demographic trends
Value systems, religion, language
Lifestyles, attitudes, beliefs
For example, women joining the workforce, attitudes towards
globalization
o Technological
New techniques, skills, methods, processes for creating and delivering
market offerings
For example, internet infrastructure, smart-phone penetration
o Regulatory
Taxes, import tariffs embargoes
Product specification
Pricing and communication regulations
IP laws: data protection laws
For example, regulations on food safety, work safety, embargoes on
ingredients
o Economic
, Economic growth
Money supply
Inflation
Interest rates
o Physical
Natural resources
Climate
Geographic location
Topography
Health trends
For example, weather conditions, traffic infrastructure, resource
availability, population density
Marketing strategy: value
- As a company, you need to create value for all these 3 categories.
- Value proposition: value the company aims to create in the target market, defined by
customer, collaborator, and company value.
Customer value
- Why should consumers spend their money on our product and not our other products
or that of competitors?
o For example, prices, flexibility of service, quality, delivery service you
need to differentiate from competitors.
Collaborator value: distribution partner
- Why should franchises choose us, and not our competition or open independent store?
o For example, expertise in the data driven market, cost savings for waste,
openness about profits
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.
o For example, Dodo pizza had to leave China because of a weak company
value. The aggregator market was already established (everything was in 1
place using an app). They opened a more conventual pizza store and started to
offer pasta dishes, but then the business was going to be too different from the
core competences left China.
,International marketing
- Same activities as marketing are performed in more than one nation.
- This presents unfamiliar problems and introduces varying levels of uncertainty.
Adaptation vs. universalism: are consumers and markets that different?
- Global corporation
o Operates in multiple countries with constancy (al low relative cost) as if the
entire world (or major regions of it) were a single entity.
o Sells the same things in the same way everywhere.
o Standardization: lower prices and greater learning opportunities as they know
everything about one thing.
- Multinational corporation
o Operates in multiple countries
o Adjusts its products and practices in each – at high relative costs.
o Adaptation to local tastes: higher prices and less learning as they know
something about many things.
- Cultural universals: value and segment convergence
o There is a lot that cultures have in common:
o Preference for lower prices, advertising elasticity (when advertising goes up,
demand goes up)
o Preference for modernity and reliability
o Cosmopolitanism as a defining characteristic of all sectors
o With food there are more cultural differences than with durables for example.
Levitt: the globalization of markets
- “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.”
- Ford did a huge standardization.
Interbrand: global brand measures
- To measure how global the brand is, we could calculate the percentage of revenue
coming from outside of the brand’s home region
- Significant presence in Asia, Europe and North America as well as broad geographic
coverage in emerging markets
- Public profile and awareness across the major economies of the world
- Global brand does not necessarily mean that it should be standardized
o Japanese really like customization
- Islamic banking: technically you are not paying interest but in reality, you are. This is
a big trend in countries with a lot of bilateral populations.
o Islamic banks make a profit through equity participation, which requires a
borrower to give the bank a share in their profits rather than paying interest.
Some conventional banks have windows or sections that provide designated
Islamic banking services to their customers.
Cultural universals: etic vs. emic
As companies tailor things to consumers, what do consumers have in common?
- Etic: constructs that apply equally well to other cultures
o Not equally important, yet equally applicable across countries
, o Survey-based studies with cross-sectional comparisons
o For example, Hofstede’s cultural dimensions and humour, beauty?
Fairness: if something is really important among apes/babies, it is
something we are born with. For marketing this means that adhering to
fairness norms is important for payment and prices.
Implications for marketing: overall, all customers are unhappy when
prices are increased.
- Emic: constructs that apply to a given culture
o Not applicable across cultures
o Determined through perceptions of culture members
o For example, Guanxi (China: social network of mutually beneficial business
relations), Hygge (Denmark), non-discrimination (specific to the modern
culture which shows the importance of culture across time).
Universal vs. country-specific behaviours
Do people assess quality the same across different cultures?
- Brand, physical features, price, retailer reputation
- Dawar and Parker (1994): are there culture-invariant consumer behaviours?
o Empirical test in 38 countries
o Technology products
o Matched-sample approach (young, mobile, affluent, educated)
o Cultural clusters
o Measure: in general, how likely are you to personally use brand names
(physical appearance/prices/retailer reputation) as a sign of quality for
purchasing electronic products?
o Only thing that varied was the culture.
Existence of specific behaviours: do people rely on the same traits or
not? universal
Relative order of importance of behaviours across cultures universal
Absolute level of behaviour across cultures: if something is important
in some culture, will it also be important in another? ?
o
o there are certain behaviours in quality assessment that are similar.
o Problems with the study is that they use self-reported behaviour, sample size is
small, and they group countries in a somewhat counter-intuitive way (Japan
and Greece are grouped together) affects the average.
Main take-away
