Chapter 11 What is Marketing?. Chapter 11 - Overview 11.1 International Marketing 11.2 Global Marketing 11.3 International Marketing Mix Trading

Chapter 11Chapter 11

What is Marketing?What is Marketing?

Chapter 11 - OverviewChapter 11 - Overview

11.1 International Marketing 11.1 International Marketing 11.2 Global Marketing11.2 Global Marketing 11.3 International Marketing Mix11.3 International Marketing Mix Trading Partners - SpainTrading Partners - Spain

11.1 International Marketing11.1 International Marketing

Marketing: : All activities involved in planning, All activities involved in planning,

pricing, distributing and selling of a pricing, distributing and selling of a product or serviceproduct or service

4Ps – Product, Price, Place, Promotion4Ps – Product, Price, Place, Promotion Designed to fulfill human wants and Designed to fulfill human wants and

needsneeds

Marketing StrategiesMarketing Strategies

Centralized or Decentralized Centralized or Decentralized

Push or PullPush or Pull

Brand Acquisition or DevelopmentBrand Acquisition or Development

Centralized Marketing StrategyCentralized Marketing Strategy

Production and sale from one central Production and sale from one central location - exports to other marketslocation - exports to other markets

Several marketing divisions – focus Several marketing divisions – focus on particular export areason particular export areas

Common marketing themesCommon marketing themes Still considers cultural differencesStill considers cultural differences Ex: Coca Cola – global brand, Ex: Coca Cola – global brand,

consistent packaging / productconsistent packaging / product

Advantages of CentralizedAdvantages of Centralized Brand BuildingBrand Building – create international – create international

brand equity – worldwide recognitionbrand equity – worldwide recognition SynergySynergy – extra positive benefits – extra positive benefits

from larger marketing group vs. from larger marketing group vs. smaller local groups working alonesmaller local groups working alone

Cost BenefitsCost Benefits – – Economy of ScaleEconomy of Scale – – avoids duplication (R&D, advertising) avoids duplication (R&D, advertising) of efforts – centralized expert focus of efforts – centralized expert focus saves time and moneysaves time and money

Centralized OrganizationCentralized Organization

Coca ColaHead Office

South America Asia Pacific North America European Union

Decentralized StrategyDecentralized Strategy

Think Global – Act LocalThink Global – Act Local Local facilities – local decisionsLocal facilities – local decisions ‘‘Glocal’ – global firm / local focusGlocal’ – global firm / local focus AdvantagesAdvantages

– Proximity (closeness) to marketsProximity (closeness) to markets– Flexibility – spot trends quicklyFlexibility – spot trends quickly– Culturally sensitive – more knowledge of Culturally sensitive – more knowledge of

local customs and preferenceslocal customs and preferences


Distribution StrategiesDistribution Strategies Focus on the best way to deliver a Focus on the best way to deliver a

product or service to the target marketproduct or service to the target market 3 ways to achieve distribution goals3 ways to achieve distribution goals

1.1. Push StrategyPush Strategy

2.2. Pull StrategyPull Strategy

3.3. Combination of Combination of

Push and Pull StrategyPush and Pull Strategy

International OrganizationInternational Organization

Marketing and distribution centers Marketing and distribution centers are set up in foreign marketsare set up in foreign markets

Buying habits and customer values Buying habits and customer values are taken into account when are taken into account when responding to differencesresponding to differences

Example: AutomakersExample: Automakers Honda CanadaHonda Canada Honda USAHonda USA

Brand OrganizationBrand Organization

A company may have different A company may have different brands which are sold to diverse brands which are sold to diverse marketsmarkets

Used greatly by companies with a Used greatly by companies with a large variety of productslarge variety of products

Example: Cadbury & Procter and Example: Cadbury & Procter and Gamble p.13Gamble p.13

Brand OrganizationBrand Organization

Company C

Chocolate & Candy Bars

Beverages Ice Cream Cereal

Distribution OrganizationDistribution Organization

Under this structure, marketing Under this structure, marketing activities are organized around the activities are organized around the ways the product or service will be ways the product or service will be delivered to the customer delivered to the customer

Example: A soft drink companyExample: A soft drink company

Distribution OrganizationDistribution Organization

Company D

Restaurants Hotels Retail Stores Vending Machines

Research

Packaging

Product Development

Pricing

Branding

Sales

Physical Distribution

Inventory Management

Promotion

Storage

Marketing ActivitiesMarketing Activities

Marketing ActivitiesMarketing Activities

Nonprofit organizations do not seek profit organizations do not seek profit as primary motive but raise funds for a as primary motive but raise funds for a specific goal.specific goal.

Ex: Canadian Breast Cancer FoundationEx: Canadian Breast Cancer Foundation

Not-for-profit Not-for-profit organizations, such as housing or child care cooperatives also do not seek profit. Extra funds are used to improve services offered to members

Consumer and Competitive Consumer and Competitive MarketsMarkets

Markets are composed of 2 parts:Markets are composed of 2 parts:1.1. Consumer MarketsConsumer Markets2.2. Competitive MarketsCompetitive Markets Consumer MarketsConsumer Markets: All consumers : All consumers

who are or may become interested who are or may become interested in the product or service and whom in the product or service and whom have the means to purchase ithave the means to purchase it

Includes current and future Includes current and future potential consumerspotential consumers


2.2. Competitive MarketCompetitive Market: Comprises of : Comprises of all of the products or services all of the products or services (within a specific category) that (within a specific category) that competes for the consumers moneycompetes for the consumers money

Ex: Toyota Corolla, Honda Civic, Ex: Toyota Corolla, Honda Civic, Hyundai Elantra, Chevy ColbaltHyundai Elantra, Chevy Colbalt

Consumer and Competitive Consumer and Competitive Markets Markets

Target MarketTarget Market: All marketing efforts : All marketing efforts directed at a specific group of directed at a specific group of consumers that the marketer wants consumers that the marketer wants to attract (and ultimately sell their to attract (and ultimately sell their product or service to)product or service to)

If the market is everybody, then it is If the market is everybody, then it is called the called the Aggregate MarketAggregate Market


Differentiated MarketsDifferentiated Markets: These : These markets are characterized in a markets are characterized in a specific way such as age, income, specific way such as age, income, gender, personal values and/or gender, personal values and/or geographical locationgeographical location

The Marketing Mix (4 P’s)The Marketing Mix (4 P’s)

Promotion Mix

Pricing Mix

Place Mix (Distribution)

Product Mix

The marketing mix is usually divided The marketing mix is usually divided into 4 categories known as the 4 P’s: into 4 categories known as the 4 P’s: Product, Price, Promotion and Place Product, Price, Promotion and Place (distribution)(distribution)

Some marketers include 2 C’s: Some marketers include 2 C’s: Customer and CompetitionCustomer and Competition

The effectiveness of the mix of these The effectiveness of the mix of these activities can make or break a activities can make or break a marketing campaignmarketing campaign

The Marketing MixThe Marketing Mix

The Marketing Mix (4 P’s & 2 C’s)The Marketing Mix (4 P’s & 2 C’s)

Promotion Mix

Pricing Mix

Competition

Customer

Place Mix (Distribution)

Product Mix


Components of the Marketing PlanComponents of the Marketing Plan1.1. Marketing goalsMarketing goals2.2. Identification of the target marketIdentification of the target market3.3. Identification of competitorsIdentification of competitors4.4. Research sectionResearch section5.5. Positioning of the product in the marketplacePositioning of the product in the marketplace6.6. Pricing strategyPricing strategy7.7. Channels of distribution Channels of distribution 8.8. Promotional strategy/AdvertisingPromotional strategy/Advertising9.9. Sales forecast (based on new marketing plan)Sales forecast (based on new marketing plan)10.10. Process of monitoring plans successProcess of monitoring plans success


Definition of a BrandDefinition of a Brand

A name, term, sign, symbol or design A name, term, sign, symbol or design or a combination of any of these or a combination of any of these intended to identify the goods or intended to identify the goods or services of a seller/sellers and to services of a seller/sellers and to differentiate them from their differentiate them from their competitors.competitors.


2 Types of Marketing Strategies2 Types of Marketing Strategies

1.1. Brand StrategiesBrand Strategies

2.2. Distribution StrategiesDistribution Strategies


1.1. Brand StrategiesBrand Strategies Primary goal is to communicate value of the Primary goal is to communicate value of the

good/service to the customergood/service to the customer Brand strategies develop and communicate the Brand strategies develop and communicate the

benefits associated with the brandbenefits associated with the brand Brand strategies minimize costs and encourage Brand strategies minimize costs and encourage

the customer to set up a positive value equationthe customer to set up a positive value equation Brand strategy attempts to POSITION the Brand strategy attempts to POSITION the

product or service (which means marketers try product or service (which means marketers try to create a value equation for the product in the to create a value equation for the product in the consumers mind)consumers mind)


How do we define value?How do we define value? Value is the difference between the perceived Value is the difference between the perceived

cost of the product and the perceived cost of the product and the perceived satisfaction derived from the productsatisfaction derived from the product

Costs are monetary but can expressed in terms Costs are monetary but can expressed in terms of time spent looking for the product, energy of time spent looking for the product, energy spent setting it up, personal costs (prestige, spent setting it up, personal costs (prestige, status, reputation, etc)status, reputation, etc)

To establish the value equation, the brand uses To establish the value equation, the brand uses packaging, brand names, slogans, and packaging, brand names, slogans, and trademarks to develop a positive and and trademarks to develop a positive and and identifiable image for each product or serviceidentifiable image for each product or service


Value EquationValue Equation: fig. 1.21 (next slide) : fig. 1.21 (next slide)

Trip to Barbados exampleTrip to Barbados example

Adds together all of the benefits of a Adds together all of the benefits of a product (both real and imagined) and product (both real and imagined) and subtracts the costs in obtaining the subtracts the costs in obtaining the productproduct


Distribution StrategiesDistribution Strategies Focus on the best way to deliver a Focus on the best way to deliver a

product or service to the target marketproduct or service to the target market 3 ways to achieve distribution goals3 ways to achieve distribution goals

1.1. Push StrategyPush Strategy

2.2. Pull StrategyPull Strategy

3.3. Combination of Combination of

Push and Pull StrategyPush and Pull Strategy


1.1. Push StrategyPush Strategy Push the product or service to the Push the product or service to the

customercustomer Push strategy sells the product to Push strategy sells the product to

retailers, wholesalers or importers and retailers, wholesalers or importers and not directly to the end consumernot directly to the end consumer

Reason: if the product is out there where Reason: if the product is out there where consumers can see it, they will buy it.consumers can see it, they will buy it.


2.2. Pull StrategyPull Strategy Pull or attract the consumer to the product or Pull or attract the consumer to the product or

serviceservice This is what most people think of when they This is what most people think of when they

think of marketingthink of marketing Attempts to increase the consumer demand Attempts to increase the consumer demand

directly instead of relying on retailers to sell the directly instead of relying on retailers to sell the product to consumersproduct to consumers

Manufacturers and importers try to convince Manufacturers and importers try to convince consumers that they need the product and consumers that they need the product and should look for the product when they are should look for the product when they are shoppingshopping


3.3. Combination of Push and PullCombination of Push and Pull Use combination push and pullUse combination push and pull Pull strategy is difficult to use alone as it Pull strategy is difficult to use alone as it

requires distribution partnersrequires distribution partners Push strategy needs no partners, Push strategy needs no partners,

requires consumer awarenessrequires consumer awareness The push strategy needs to combine with The push strategy needs to combine with

the pull strategy to optimize the pull strategy to optimize effectiveness; however, the push effectiveness; however, the push strategy can stand alonestrategy can stand alone

Documents

Chapter 11 What is Marketing?. Chapter 11 - Overview 11.1 International Marketing 11.2 Global Marketing 11.3 International Marketing Mix Trading