IntMarketing-L6 - Global Marketing Manag...

Important housekeeping: : 

Important housekeeping: Remember, next Thursday 26 April: Mid-Semester test, 40 multiple choice, 60 minutes, 10% assessment, 6:15pm-7:15pm EXACTLY, = text chs 1, 2, 4, 5, 6, 7 & 9 (read the case studies for useful background but focus your study on the text material) + at 7:30pm, we’ll talk thru advice, issues regarding the Group Assignment for 14 May. Thereafter: L7 = 3 May, Products & Services L8 = 10 May, International Marketing Channels Submit Group Assignment, midnight 14 May by email, 20% assessment L9 = 17 May, Exporting & Logistics L10 = 24 May, Pricing for international markets L11 = 31 May, Integrated marketing communications & Advertising

Slide 2: 

Global Marketing Management Planning & Organization Today, Cateora ch11

Global Perspective…Global Gateways : 

Global Perspective…Global Gateways Confronted with increasing global competition for expanding markets, multinational companies are changing their marketing strategies and altering their organizational structure. A recent study of North American and European corporations indicated that nearly 75% of the companies are revamping their business processes as relate to structure & planning capability. This has been continual since the late 1990s. The flexibility of a similar company may enable it to reflect the demands of global markets and redefine its programs more quickly than larger multinationals. Many SMEs with this capability are “born global”.

Global Marketing Management : 

Global Marketing Management The recent trend back toward localization is caused by the new efficiencies of customization made possible by the internet and increasingly flexible manufacturing processes. From the marketing perspective customization is always best. The best companies are avoiding the trap of focusing on country as the primary segmentation variable. They are considering this variable within regional (trade bloc) differences & similarities.

The Key Benefits of Global Marketing : 

The Key Benefits of Global Marketing When large market segments can be identified, economies of scale in production and marketing can be important competitive advantages for global companies. Transfer of experience and know-how across countries through improved coordination and integration of marketing activities. The Head of Nissan is French. The Head of Sony is English. Diversity of markets served carries with it additional financial benefits such as stability/spread of revenue. Global companies experienced less trauma during the Asia Finance crisis late 1990s.

Planning for Global Markets : 

Planning for Global Markets Planning facilitates rapid growth of the international function, changing markets, increasing competition, and the turbulent challenges of different national markets. Planning relates to the formulation of goals and methods of accomplishing them, so it is both a process and a philosophy. Corporate planning Strategic planning Tactical planning. Successful planning is evaluating company objectives, including management’s commitment and philosophical orientation to international business.

Planning for Global Markets (cont’d) : 

Planning for Global Markets (cont’d) Company objectives and resources Each new market should involve a complete evaluation, including existing commitments relative to the parent company’s objectives and resources. International commitment in terms of: Dollars to be invested; Personnel for managing the international organization; Determination to stay in the market long enough to realize a return on investment.

The Planning Process : 

The Planning Process Phase 1: Preliminary Analysis and Screening – Matching Company and Country Needs. Phase 2: Adapting the Marketing Mix to Target Markets. Phase 3: Developing the Marketing Plan. Phase 4: Implementation and Control.

The International Planning Process : 

The International Planning Process Insert Exhibit 11.1

Alternative Market-Entry Strategies(Impt to Assignment & **see Cullen Multinational Management) : 

Alternative Market-Entry Strategies(Impt to Assignment & **see Cullen Multinational Management) An entry strategy into the international market should reflect on analysis of market characteristics such as: Potential sales; Strategic importance; Strengths of local resources; Cultural differences; Country restrictions. A company has four different modes of foreign market entry from which to select: Exporting; Contractual agreements; Strategic alliances; Direct foreign investments (FDI).

Alternative Market-Entry Strategies : 

Alternative Market-Entry Strategies Insert Exhibit 11.2

Exporting : 

Exporting Direct exporting - the company sells to a customer in another country. Indirect exporting – the company sells to a buyer (importer or distribution) in the home country, who in turn exports the product. The Internet Initially, Internet marketing focused on domestic sales, however, a surprisingly large number of companies started receiving orders from customers in other countries, resulting in the concept of international Internet marketing (IIM). Eg. Amazon. Direct sales Particularly for high technology and big ticket industrial products.

Contractual Agreement : 

Contractual Agreement Contractual agreements are long-term, non-equity association between a company and another in a foreign market. Licensing A means of establishing a foothold in foreign markets without large capital outlays. A favourite strategy for small and medium-sized companies. Legitimate means of capitalizing on intellectual property in a foreign market.

Contractual Agreement (continued) : 

Contractual Agreement (continued) Franchising Franchisor provides a standard package of products, systems, and management services, and the franchise provides market knowledge, capital, and personal involvement in management. Franchising is expected to be the fastest-growing market-entry strategy for the next decade. Two types of franchise agreements: Master franchise – gives the franchisee the rights to a specific area with the authority to sell or establish subfranchises. Licensing.

Strategic International Alliances : 

Strategic International Alliances A strategic international alliance (SIA) is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective. SIAs are sought as a way to shore up weaknesses and increase competitive strengths. Firms enter SIAs for several reasons: Opportunities for rapid expansion into new markets Access to new technology More efficient production and innovation Reduced marketing costs Access to additional sources of products and capital.

Strategic International Alliances (cont.) : 

Strategic International Alliances (cont.) International Joint Ventures A joint venture is a partnership of two or more participating companies that have joined forces to create a separate legal entity. Four Characteristics define joint ventures: JVs are established, separate, legal entities; The acknowledged intent by the partners to share in the management of the JV; They are partnerships between legally incorporated entities such as companies, chartered organizations, or governments, and not between individuals; Equity positions are held by each of the partners.

Strategic International Alliances (cont.) : 

Strategic International Alliances (cont.) Consortia Consortia are similar to joint ventures and could be classified as such except for two unique characteristics: They typically involve a large number of participants; They frequently operate in a country or market in which none of the participants is currently active. Consortia are developed to pool financial and managerial resources and to lessen risks.

Building Strategic Alliances : 

Building Strategic Alliances Insert Exhibit 11.3

Direct Foreign Investment (FDI) : 

Direct Foreign Investment (FDI) Sometimes, especially where operational and market control is the ultimate strategic intent, an FDI is the right, best answer earlier rather than later.

Organizing for Global Competition : 

Organizing for Global Competition In organizing for Global Competition, companies are usually structured around one of three alternatives: Global product divisions responsible for product sales throughout the world; Geographical divisions responsible for all products and functions within a given geographical area; or A matrix organization consisting of either of these arrangements with centralized sales and marketing run by a centralized functional staff, or a combination of area operations and global product management. Locus of decision Considerations of where decisions will be made, by whom, and by which method constitute a major element of organizational strategy.

Organizing for Global Competition (cont.) : 

Organizing for Global Competition (cont.) Centralized versus decentralized organizations An infinite number of organizational patterns for the headquarters activities of multinational firms exist, but most fit into one of three categories: Centralized Regionalized Decentralized. No single traditional organizational plan is adequate for today’s global enterprise seeking to combine the economies of scale of a global company with the flexibility and marketing knowledge of a local company. = The Global v. Local Dilemma.

To Summarize… : 

To Summarize… To keep abreast of the competition and maintain a viable position for increasingly competitive markets, a global perspective is necessary. Cost containment, customer satisfaction, and a greater number of players mean that every opportunity to refine international business practices must be examined in light of company goals. Collaborative relationships, strategic international alliances, strategic planning, and alternative market-entry strategies are important avenues to global marketing that must be implemented in the planning and organization of global marketing management.