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International marketing (Reading 20 & 21), image - Coggle Diagram
International marketing
(Reading 20 & 21)
The global marketplace (Types)
Multinational company (MNC)
Global firm (advantages / improved reputation)
production
marketing
financial
R&D
Transnational company (TNC)
The macro-environment
(STEEPLE considerations)
Technological
- level of technology matters - this will determine capabilities for technology-enables goods
Economic
- development/distribution/employment level/exchange rate & stability/transport & communication infrastructure
Socio-cultural
- similar to domestic markets/close geographically/understand language, history & religion & social conventions
Political & legal
- stability/regulations can affect their attractiveness
Trading systems
- tariffs & duties/quotas of goods/currency exchange/restrictions/requirements on foreign countries
Ethical
- the risk of issues (e.g. child labour, poor working conditions, pollution & safety conditions)
Globalisation versus customisation
Globalisation (standardisation)
same ingredients/brand name/marketing communications
across boarder - goods/services & social/cultural trends
Customisation (adaptation)
marketing mix - adapt offerings to local market/s
different characteristics
adapt marketing communications
distribution networks may differ
main segments to consider:
middle-market segment
(aim) - mid-level income - seeking value & good enough performance versus price ratio
low-end segment
- basic products at a meagre price (encourages innovation)
premium segment
- high purchasing power - high-end products with advanced features
Triggers for international expansion
Low-growth domestic markets
domestic recession
Customer driven
expectations from customers to have a global presence
Small domestic markets
survival - domestic markets scope is to small
Competitive forces
provoked to compete internationally to follow competitors
Cost factors
take advantage of lower labour, energy & raw materials overseas or benefit from economies of scale
Portfolio balance
variety of markets allows flexibility between unfavourable & favourable markets
Saturated domestic markets
limited opportunities in the domestic market
Modes of entry
Global strategic partnerships
- two/more partners from a different region (share marketing/resources/combine ideas)
Licensing
- selling rights to use technology/patent/trademark/know-how for an agreed period in exchange for royalty payments
Strategic alliances
- similar to joint venture (difference the partners may have been competitors at one point in time)
Franchising
- use product/brand name abroad (expand using local resources/knowledge supplied by franchisees - more control than licensing)
Joint ventures
- two/more partnerships (costs/risks/profits shared) - equity/contractual joint venture status
Contract manufacturing
- contract in a foreign country to produce locally (save on investment/transportation/tariff costs - expense of reduced control)
Direct exporting
- provide offering to market (transportation/documentation/marketing mix/website - may be expensive/contract issues)
Management contracting
- export of management services not products (domestic supplier know-how & foreign entity provides capital)
Indirect exporting
- agent selling goods on behalf of the producer (less investment & risk)
Direct investment
- greater level of investment & control also entails many risks (autonomy to adapt to local markets)
The micro-environment
Market attractiveness
costs of serving the market (distribution & control/labour & marketing)
profit potential
competition
market access (suppliers/distributors/customers that can inhibit)
size & growth rate (predicting future demand)
Organisation's capabilities
resources (to compete in the market)
product adaption (product can be adapted to the needs of the market - local preferences or regulations)
skills (has or can buy in)
competitive advantage
