Summary International Marketing
Lecture 1: 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 for a profit.
Strategic aspects;
- Defining the target market
- Defining the value proposition & positioning
Tactical aspects;
- Product / Service / Brand
- Pricing & Incentives
- Communications
- Distributions
The Five C’s of the Target Market
1. Context
2. Company: what are the things that the company needs to operate their business
and do well? Their capabilities and information system (R&D/employees etc.)
3. Customers → needs & profile: who are your customers and what do they want?
4. Collaborators: what other parties do you work with (suppliers/deliver companies)
5. Competitors: who are they
Different target markets require adjustments of the 5 C’s
→ E.g. pizza delivery in Russia is more price-sensitive & low trust in delivery vs. a more
value-conscious market & higher interest in international cuisine in England
Context Analysis → 5 factors
1. Socio-cultural
• Social & demographic trends
• Value systems: religion & language
• Lifestyles, attitudes, beliefs
→ e.g. more woman working, changed attitudes towards delivery and global
cuisines resulting in an increase in deliveries and changing demands
2. Technological: New techniques, skills, methods, processes for creating and
delivering market offerings
→ e.g. smart-phone changing customer side ordering (customers use
application), changes in internet infrastructure (supplier-side)
3. Regulatory
• Taxes, import tariffs, embargoes
• Product specifications & requirements
• Pricing & Communication regulations
• IP laws
→ e.g. food safety regulations, work safety regulations, ingredient embargoes
and data sharing and protection regulations.
4. Economic: Economic growth, money supply, inflation, interest rates
5. Physical: Natural resources, climate, geographic location, health trends
,Value proposition: the value the company aims to create in the target market. Defined by
1. Customer value: why should consumers spend their money on our
product rather than or other products or products of others?
2. Collaborator value: why should franchisee choose us, and not our
competition or open independent stores?
3. Company value: why should we spend money and hours of
employees on this product rather than another?
An optimal value proposition is a clear and compelling statement that
communicates the unique benefits and value that a product, service, or company offers
to its target audience. It is designed to resonate with and attract potential customers.
International Marketing → presents the company with unfamiliar problems and varying
levels of uncertainty due to performing activities in more than one nation.
According to Levitt there are two types:
Global corporation: operates in multiple countries
- Consistent operations at low relative cost as if the entire world is a single entity
- Sells the same things in the same way everywhere
→ standardization: lower prices & greater learning opportunities (specializing in 1 thing)
Multinational corporation: operates in multiple countries
- Adjusts its products and practices in each → relative high costs
→ adaptation: higher prices & less learning (knowing something about many things)
Cultural Universals: some values and preferences are universal:
- Preference for lower prices, advertising elasticity
- Preference for modernity and reliability
- Cosmopolitanism (= concept that emphasizes the idea of a global community
and a sense of belonging to humanity as a whole) as a defining characteristic of
all sectors
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 (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.” Levitt's theory has had a significant impact on how businesses
approach global expansion. Strengths:
- Emphasis on standardization of products and marketing strategies leading to
cost-savings through economies of scale and streamlining operations
- Market expansion: encourages to tap into larger global markets, adapting
products to meet universal customer needs can help expand customer base
- Global brand building: a consistent global image can help in building strong and
recognizable brand
Weaknesses:
- Cultural differences: theory downplays importance of cultural and local market
differences
- Global competition: fierce competition from both local and international rivals
can downplay advantages of standardization
, - Rapid changes: markets and technology rapidly evolve, companies that are too
rigid in their global strategies may miss out on opportunities for innovation or
adaption
- Ethical concerns: focus on profit and standardization can lead to ethical
concerns such as exploitation or environmental degradation in pursuit of cost-
savings.
However this is not always the case: Global ≠ Standardized:
- Toyata: vehicle names, technical details, equipment specs, colors may vary from
country to country. There are differences for a nearly identical product on the
global market.
- Mc Donalds: different burgers across the world
- LV: product & price customization in Japan
Etic: constructs that can be applied equally well across different cultures as everyone
understand it.
- Survey-based studies with cross-sectional comparisons.
- Not equally important, yet equally applicable across cultures.
➔ E.g., Hofstede’s cultural dimensions, World Values Survey
➔ E.g., humor, beauty
Emic: constructs that apply to a given culture. Not applicable across cultures.
- Something that people from a certain culture will understand, but people from
other cultures won’t.
- Determined through perceptions of culture member.
➔ E.g., Guanxi in China or Hygge in Denmark.
➔ E.g., non-discrimination, as that was not very famous many years ago,
Dawar & Parker (1994): RQ: Are there culture-invariant (
cultuuronafhankelijke) consumer behaviours? Measure:
- In general how likely are you to personally 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?
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.
- Existence of specific behaviors = universal, everybody
uses these signals.
- Relative order of importance across cultures =
universal, same order in quality indicators.
- Absolute level of behavior across cultures = not clear.
Therefore, we can say that markets and consumers are not that different.
