SESSION 14: MARKETING AND ADVERTIZING :SESSION 14: MARKETING AND ADVERTIZING DEVELOPING A MARKETING PLAN FOR SMALL BUSINESS APRIL 9 - 11, 2007


SESSION OBJECTIVE :SESSION OBJECTIVE Outline concepts in Marketing and Advertising across Borders


Slide 3:2004 Global trade is growing US imported $1.8 trillion Exported $1.1 trillion US company profits from global trade $315 billion


Questions to Ask :Questions to Ask What foreign markets are most attractive Which segments are most feasible, given your current strengths? Are the segments growing? What are the risks? How would you distribute? Do you need to alter your products to satisfy local preferences? How can you communicate effectively with people of different cultures?


What tools can be used? :What tools can be used? All Elements of the Marketing Mix are relevant: 20 years ago market watchers predicted homogenization of products around globe However progress has been slower than predicted (yeah!!!!)


Notable failures in Going Global :Notable failures in Going Global Chevy Nova in Latin America Coca Cola’s 2 liter bottle in Spain didn’t fit average Spanish refrigerator General Foods wasted millions trying to sell packaged cake mixes in Japan – only 3% of Japanese homes owned a stove General Foods withdrew Tang in France after pitching it as a substitute for orange juice at breakfast – very few French people drink orange juice for breakfast


Efficiency versus Market Suitability :Efficiency versus Market Suitability Do you satisfy the needs of the many (production efficiency) or produce for market suitability – similar to approaching market segmentation in your own country


The Global Production Platform :The Global Production Platform Developing a Global Production Platform that allows adaptation to accommodate requirements of different national markets How well do your products lend themselves to a “platform” approach? Would they require major modification or could it be as simple as changing packaging


Promotion :Promotion In most instances, promotional materials require more changes than the other elements of the marketing mix when operating globally as it deals more closely with the psyche of customers which is closely linked to culture, tradition and social expectations It is possible to use a global approach – Coca Cola’s “I’d like to teach the world to sing” ad comprised 500 young people of all races and many nationalities dressed in their respective national costumes, standing hand-in-hand- The theme was peace and harmony and youthful optimism and implicitly associated these themes with drinking Coca Cola:


Place (or Distribution) :Place (or Distribution) Can be the most Challenging issue: Remember Business Planning case study when Gentlemen had to ship his product via Air to meet deadline rather than sea One issue, do you establish your own distribution network in the target country with indigenous personnel? This can require substantial investment and management or use a local trading company


Typical Distribution Options :Typical Distribution Options Simple Complex Trading Company Sales Agent Joint Venture Subsidiary


Price :Price Pricing is complex because of many factors apart from regulations prohibiting “dumping” Companies usually free to charge what they like You can follow whatever pricing strategy you chose: Market will normally determine what prices can be charged Differential pricing can create arbitrage situations: Example UK ceramics co has distributors in US and Mexico selling product at $100 per case; US distributor charges $175 per case to cover higher labor costs Mexican $125. US retailers begin ordering from Mexican distributor to save. US distributor soon loses business, upsetting UK companies distribution plans. In theory nothing wrong with a “gray market” when losers add no value to justify higher prices – economists will argue gray markets create more efficient markets, but in reality producers need stability and order in their distribution networks and will take action to counter gray markets Internet commerce is creating a challenging situation


Controlling Global Marketing Decisions :Controlling Global Marketing Decisions Philip Kotler describes 3 strategies for organizing cross-border efforts: Global – treat the world as a whole – a single market – decision making at head office Multinational – see world as a “portfolio” of national opportunities – decision making at national level Glocal – based on standardized platforms that can be adapted to local requirements – organize around business units rather than head offices or national units


The Locus of Control :The Locus of Control