IMIA

International Marketing in the Internet Age : 

International Marketing in the Internet Age Drs Tim Beal Victoria University of Wellington New Zealand

First, some geography : 

First, some geography

Slide 3: 

New Zealand

Slide 4: 

Wellington

Overview : 

Overview What is the Internet Age? Raise some key points, return at end for discussion Global marketing management

What is the Internet Age? : 

What is the Internet Age? Politics Technology Society

Politics : 

Politics Struggle between globalisation and nation state Ongoing liberalisation of global economy But is nation state dead? No! Invasion of Iraq Trade war between US and global steel producers Korea, EU, Brazil, …New Zealand Fear of trade war after US steel tariffs ruled illegal

Technology in the internet age : 

Technology in the internet age Information and Communications Technology (ICT) You are specialists Show data on connectivity for later discussion Don’t ignore other technologies Eg transportation, storage

Connectivity data : 

Connectivity data

Impact of other technologies : 

Impact of other technologies Transportation and storage Cheaper and faster to move people and goods around the world People 700 million ‘international arrivals’ in 2000 Tourists, immigrants, businesspeople, students Each has huge marketing implications

Society - nationality : 

Society - nationality People are traveling, moving country/citizenship , becoming international aware Old saying ‘When in Rome do as the Romans do’ no longer adequate Most ‘Romans’ are tourists or immigrants Others more globally aware than their parents

Society – ageing : 

Society – ageing People are ageing more slowly and differently Ageing society Age distribution changing – fewer young, more elderly Implications for marketing?

But! : 

But! Ageing ain’t what it used to be Chronological age<> cognitive/perceived age Michel Rod in discussion We will return to these broader issues at end for discussion

Global Marketing Management : 

Global Marketing Management Globalisation and marketing strategy Globalisation and Branding

Globalisation and marketing strategy : 

Globalisation and marketing strategy Levitt Famous article: The Globalisation of Markets Harvard Business Review 1983

Slide 19: 

A powerful force drives the world toward a converging commonality, and that force is technology. It has proletarianised communication, transport, and travel. It has made isolated places and impoverished peoples eager for modernity's allurements. Almost everyone everywhere wants all the things they have heard about, seen, or experienced via the new technologies.

Slide 20: 

The result is a new commercial reality - the emergence of global markets for standardised consumer products on a previously unimagined scale of magni­tude. Corporations geared to this new reality, benefit from enormous economies of scale in production, distribution, marketing, and management. By translating these benefits into reduced world prices, they can decimate competitors that still live in the disabling grip of old assumptions about how the world works.

Slide 21: 

Gone are accustomed differences in national or regional preference. Gone are the days when a company could sell last year's models - or lesser versions of advanced products - in the less-developed world. And gone are the days when prices, margins, and profits abroad were generally higher than at home.

Slide 22: 

The globalisation of markets is at hand. With that, the multinational commercial world nears its end, and so does the multinational corporation.

Levitt’s argument : 

Levitt’s argument Technology is globalising the world economy Almost everyone, everywhere wants global products Prefer low prices to supposed national characteristics example of refrigerators in Europe

Strategy : 

Strategy Companies should move from multi-domestic (multinational) to global strategy Do not adapt to superficial differences but force suitably standardised products globally “Offering everyone simultaneously high-quality, more or less standardised products at optimally low prices”

Multi-domestic strategy : 

Multi-domestic strategy Treating each country market as different Adapting products for these separate markets However, forces of standardisation are strong In fact, most companies do both standardise adapt Think global, act local

Advantages of standardisation : 

Advantages of standardisation Cheaper - economies of scale Gains from experience For many products human needs and wants are basically similar If products are new then they set the standard Many differences are due to historical accident Companies create markets (eg Sony Walkman)

Arguments for M-Domestic(I) : 

Arguments for M-Domestic(I) Industry standards diverse companies have to produce variants for different national standards eg TVs, cars Customer demand local differences customary habits can be hard to change eg degree of sweetness varies between markets eg Japanese demand higher level of packaging (though now backlash) Video project explores that

Arguments for M-Domestic (II) : 

Arguments for M-Domestic (II) Often preference for product perceived to be local eg Toyota’s adverts very ‘kiwi’ However, there is often preference for foreign goods eg French perfumes, wines Global organisations difficult to manage

Global marketing : 

Global marketing Making no distinction between domestic and foreign market opportunities Not developing a product for domestic market and then going offshore Japanese released colour TV in USA before their home market, which was not saturated for B&W sets Seeks to identify global market opportunities

Forces driving globalisation (I) : 

Forces driving globalisation (I) Flow of information We know what films Hollywood produces, what computers are developed in Silicon Valley ‘We’ means people in Bombay, Beijing as well as Wellington or London

Forces driving globalisation (II) : 

Forces driving globalisation (II) Flow of people More and more people are familiar with products in foreign markets eg the Fuji film that you buy at an airport in Paris has to be the same as that sold in a temple in Japan

Forces driving globalisation (III) : 

Forces driving globalisation (III) Technology economies of scale Cheaper transportation makes global-sourcing possible FMS allows economies of scale with marginal variationeg producing variants of car (colour, etc) on same assembly line

Forces driving globalisation (IV) : 

Forces driving globalisation (IV) Cost - huge investment needed for new product development strategic alliances requires global market to provide sufficient demand Japanese example from 1960s Japanese products swept the world radios, TVs, cars, specifically developed for foreign markets

Forces driving globalisation (V) : 

Forces driving globalisation (V) Economic liberalisation GATT, WTO, etc. Strategic positioning unsafe to let competitors free access to markets One reason foreign companies want to get into Japanese market is to deprive Japanese companies of unchallenged springboard Demand or Supply driven? To what extent are MNCs responding to demand or creating demand through their activities?

Transnational strategy : 

Transnational strategy Globalisation demands a transnational strategy transnationals seek- Global scale efficiency and competitiveness Local responsiveness and flexibility cross-market learning ‘Act global, think local’

Some implications : 

Some implications Product and market policies - may be simple, complex, independent, interdependent no set rules Customer segments - may be unique to specific country/market, or may cut across national/cultural boundaries former declining - not many products unique to specific countries most products overlap national, and sometimes cultural boundaries

Market <>country : 

Market <>country Country is often used as shorthand Not the same thing as market Often countries are treated as separate markets for legal and administrative reasons In reality, most modern markets don’t recognise national boundaries

Market <> country : 

Market <> country Many markets are broader than national boundaries thought there may be some local adaptation eg Hallal meat, Spice Girls CDs, laptop computers Many markets are sub-divisions of countries especially large countries such as USA or China

Discussion : 

Discussion Discussion: Impact of technological and social change on market environment ‘People are globalising, and ageing differently’ Chronological age<>cognitive/perceived age Let’s start with impact of change on your personal experience and implications for marketing Technology Society and family