Ch1 Global Marketing

8/9/2019 Ch1 Global Marketing

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Welcome to the class

Todays Lecture

Chapter 1 Global marketing


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Marketing Management

The text book

MARKETING

MANGAGEMENT

written by Philip

Kotler

The Reference book

MARKETING concept

and cases written byM. J.Etzel, B. J.

Walker, W. J. Stanton


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Global/International Marketing

We would not be surprised to hear

about a German Business man

wearing an Italian suit meeting an

English friend at a Japanese

restaurant who later return home

to drink Swiss coffee and watchAmerican TV...


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1-What were the reasonsA

lexander started hisinvasions?

2-Why British came to India in the 17th century?


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Reasons for going International

1-Access to products otherwise unavailableAccess to products which are not available

in the domestic market.

For example: Fuel Oil

2-Comparative Advantage

Competitive human/natural resources

In some countries there might have been economical(cheap) labour or resources which are not available inthe home country

For Example: Chinese labour, Indian Labour or Africangold/diamonds


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Attraction of International

marketing.

i. To seek revenue growth opportunitiesa) To earn more money due to difference in cost of production or

seeking new markets

ii. To compete against global competitorsa) In order to compete against the rivals

iii. To support global customersa) In order to supply your products to your customers abroad

iv.

To access global knowledgei. To understands the like/and dislikes of people in other countries

v. To achieve efficiency in value chaini. To get more efficient that is to access cheaper/economical labour

or economical resources


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An example ofAfghanistans

Carpets...

Uniqueness ofAfghan Carpets:

Globally known as one ofAfghanistans mostviable and visible products.

Large supply of skilled labour in parts of thecountry where carpet weaving has beentraditionally important.

Hand-made process makes Afghan carpets one-of-a-kind and souvenir (gift)


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Analysing the exportation

Demand:

Due to the uniqueness ofAfghanistans Carpet there is a

high demand in foreign markets

Saturation (local demands are fulfilled):The local market is saturated therefore the makers needs

expansion

Customer Expectation:

Global Afghans: Afghans are scattered around the worldand could make a good market for exportation, beingGlobal customers


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G

lobal StrategyDefinition:

Global strategy consist of a dispersed location

(another country) of each or some part of avalue-chain (production process) that are

performed

OR

An efficient approach that involve a company

launching production on global basis


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Regional Strategy

Instead of having similarities among humanbeings, there are some differences which changesfrom people to people and culture to culture.

Therefore the local culture needs understanding.

Definition:

The global organisation which changes their

global strategy due to difference in local customs,climate or taste is called regional strategy


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Two points to remember before going Global

1- Understanding business environment in the

HOST (foreign) country.Local tastes, like & Dislikes, culture, religion etc

2- Making necessary changes in the marketing

strategy necessary for the HOST country.In order to make attachment in the foreign culture we

need to make some changes in our own strategy


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Sociocultural

Culture:

It is the collective programming of mind thatdistinguish between group of people

It includes:1- Norms-What to do and what not to do2- Values-What is right what is wrong

3- Beliefs-What is true what is false

4- Symbols- Artefact

Some famous conflict raised due to cartoon issues

Nike and the infamous shoe design


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SOCIOCULTURAL FACTORS:

Family:

InternationalMarketing requires understanding of the family

system.

There are two kinds of family system presently i.e.

Individual:

The family system in which individuals are free to act.For Example: Most European and modern cultures are individualist.

CollectiveThe system in which people live in collective form as families.

For Example: Most Asian cultures are collectivist.

It is likely to see that the buying behaviour is influenced bythe family system a consumer is living in. It is believed thatin the individual societies the buying decision is in thehand of individual himself while in the collectivist societythe buying decision is within hand of the family elders.


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Traditions & Behaviour:

Differences among cultures such as eating behaviour,

personal space, physical contact, the degree of formality in

social and business interaction, giving gifts and gesture would

gives us the preparation of mind and help anticipation.

Education:

Education define the literacy rate of a countrys

population. It play an important role in terms ofAdvertising,

Branding and Labels.

More education mean more appealing use of words andlanguages and less education means more pictures in the

advertisements and promotions.


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Economic conditionIt isimportant to examine the economic conditionin foreignmarket

Infrastructure:

Communication: Communication play an important role in transferring of

information such as telephony, media, internet etc

Transportation: In order to move around the borders of the country the

organisation needs to confirm the existence of transportation such as Rail, Road, Air,Water

Energy: The availability ofFuel, Gas, Electricity etc would give a company

easy access to energy resources so as make new products and services.

EconomicDevelopment:

Distribution ofIncome: It would determine the buying power of the people.

Equal distribution of wealth mean good economic conditions while unequaldistribution means the opposite

Rate ofgrowth ofbuyingpower: An economically stable country would

have a reasonable rate of growth in buying power and therefore a good opportunity

for a marketer and vice versa.


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Language

Differences

:

Language may cause sometimes ambiguity

(confusing) especially when making translation

of the marketing brands

For Example the Nani Chocolate and currys

in India..


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Competitor

Local brand may have been strongly bonded

due to nationalism.

People may not encourage foreign

products due to strong attachment with the

products produced in the local country.

Such as Arabian Zam Zam Cola

Indian Tata


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Deciding Whether to go Global

Operating domestically is easier and safer, otherwise a

company needs to learn foreign laws and languages, dealing

fluctuation in foreign currencies, face political and legal

problems.

Before going global a company shall answer the following

questions:

Can company understand behaviours of consumer in foreign country?

Can a company offer competitive products/services?

Can a company adopt other country business culture? Do the company have international experience?

Has the company calculated the impact of other country political and

legal environment on businesses?


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Deciding which market to enter

The possible global markets shall be decided

on the following bases:

Market size i.e. the size of population and the

growth factor in relation to the products being

launched

The cost of doing business in the international

markets The competitive advantage

The risk of investement


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Deciding how to enter

International Market Marketing of products on international basis.

International marketing is carried out in the

following means: Exporting

Joint Venture

Licensing

Joint Ownership

Direct Investment


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Exportation When goods are produced in the home

country but exported to a foreign market

with some modifications

Afghanistan dealt $50 million dollars exportsin 2007

Exports have gone up by 13%

Handcrafts, fresh and dry fruit, minerals,

leather products, cotton and precious

stones


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Joint Venturing

When a company in home country joins a

company in foreign country to produce

product and services is called joint venture

Afghan Wireless Communications Company

(AWCC), a joint venture between Telephone

Systems International, Inc. in New York and the

Ministry of Communications of the Afghan

government

New York-based JWT has signed a joint venture

with Kabul-based advertiser Altai Communication.


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Licensing

A method in which a company provide licence to a

foreign company for manufacturing/service while

the licence offer Royalty (fee) and home company

share manufacturing process, trade mark, patentsand trade secrets

Patent: Government licence to an individual or body giving a right or title for a set period Trademarks or marks are words, symbols, designs, combinations of letters or numbers, or

other devices that identify and distinguish products and services in the marketplace . When

trademarks are presented to the public via advertising, marketing, trade shows, or other means,

they become one of a company's most valuable assetspotential customers identify a company

by its trademark.

Mobile Networks

Cable Operators


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Direct Investment

Entering a foreign market developing foreign

based assembly or manufacturing facilities Chinese companies ZTE and Huawei partnered with the

Afghan government to implement Afghanistan's digital

telephone switches, providing 200,000 subscriber lines.

China Metallurgical Group Corporation won a $3 billion

bid to develop the Aynak copper deposits; the mine is

the largest foreign direct investment inA

fghanistan.

Documents

Ch1 Global Marketing