Samenvatting international PDF

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SAMENVATTING: INTERNATIONAL MARKETING 5 Decisions: 1. Whether to internationalize 2. What markets to enter 3. Market entry strategies 4. Designing the international marketing plan 5. Implanting and coordinating the international marketing plan

H1: Global Marketing International business ERPG framework:  Ethnocentric: o Home country is superior o Decision-making: centralized o Product: copy-past of @home (Lotus)  Polycentric o Each country is unique o Decision making: highly decentralized o Product & marketing: country-by-country (cars)  Regiocentric o The world consist of regions (Europe, Asia, Middle East,…) o Segmentation bases economic, cultural, political… similarities (Coca Cola)  Geocentric o The world is one common market o No preference for either home or host country o Global product concepts (Google, Apple) EXAM: look for a good example of each of these 4 views on international business + explain why you (dis)agree with this company’s strategy Globalization vs. Localization Case McDonalds  Success depends on adapting product to the local standards/wishes o Japan:  McDonalds was first fast food restaurant on the market  early mover advantage  Special burgers and recipes o India: Vegetarians, no meat o Germany, France: beer o Latin Amarica: banana pies Globalization = global integration = recognizing the similarities between international markets and integrating them into overall global strategy. Localization = market responsiveness = responding to each market’s needs and wants

Glocalization = Globalization + localization (think globally, act locally)  Use strengths from home & host country  Local flexibility + benefits of global integration  Dynamic interdependence between HQ & subsidiaries

The global marketing concept Global Marketing = Finding and satisfying global customer needs  better than the competition & coordinating marketing activities across the globe 1. Finding the customer needs:  International market research  Analyzing market segments  Understanding similarities & differences in customer groups across countries 2. Satisfying global customers  By adapting products, services and other elements of the marketing mix 3. Being better than the competition  Better value  Lower prices  Higher quality  Superior distribution  Better advertising  Superior brand image  … 4. Coordinating marketing activities across the globe  Centralization vs. delegation  Standardization vs differentiation

H2: Internal analysis Should we internationalize Advantages of international expansion  new & potentially more profitable markets  increase the firm’s competitiveness  access to new product ideas, manufacturing innovations and latest technology  More people you meet the more advantages and opportunities you get Depends on 2 crucial dimensions:  Industry globalism (external factor) = international competitive structure within an industry o Global industries (global network you need to provide your customers with products) = markets are interdependent o Local industries (you don’t need an extra supplier bv.kapper)= markets exist independently  Preparedness for internationalization (internal factor) = the firm’s ability to carry out strategies in the international market place o personal characteristics (e.g. language) o international experience o financial means

Start of internationalization Motives: general conditions  profit & growth (bad idea when it is your only motive), BV. Tomorrowland  unique product/ technology BV. Solar cookers  foreign market information (if you know something your competitors don’t know yet)  overproduction: Producing because they have a certain demand  managerial enthusiasm = desire & enthusiasm of the management towards global activities  economies of scale (if you safe money one you produce more)  tax benefits bv. TESLA owners get money back in England  Small or saturated domestic market: Go to another country and start the buzz again  Seasonal producs. Triggers: changes in environment  perceptive management: right mindset  a specific event (new employee, new CEO, new invention)

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foreign demand competing firms going international trade associations & other outside experts (export agents, governments, banks give opportunities) Barriers & risks (reasons not to)  Lack off: o Financial means o Connections o Information (about the foreign market) o Product capacity o (Knowledge of) distribution channels o enthusiastic management  competition  political risks  financial risks  language and cultural differences  complexity of transport & shipping  distance to the new market

H3: External analysis Market selection International market selection (IMS) = what markets to enter SME (Small and Medium-sized enterprises) vs large enterprises  SME: o Often triggered to expand by government, chamber of commerce can indicate opportunities o The younger the SME, the faster they travel further  More guts, are ‘pulled’ into the international stage o IMS of SME is based on:  Low physical distance (zelfde instelling)  Low cultural distance  Low geographical distance (niet te ver van eigen land) Result neighbouring countries

A model for international selection Determinants for the selection of foreign markets  Company characteristics

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Environmental characteristics

Case: Zara  Distribution strategy: Fast fashion= constantly changing collection  Communication: Not traditional advertising: in-store advertising= point of sale  Conditions: -market resembles the Spanish market - Min. level of economic development - low entry barriers  Expansion strategy in the market: oil stain= dominate in one place > build experience >flagshipstore > expand to the rest of the country  Entry strategy: -Own stores: low risk countries, high growth potential, expensive, most EU countries -Joint ventures: Large and important markets, entry barriers BV. China -Franshising: Small and high-risk countries Bv. Middle east  Branding strategy: initially a ethnocentric strategy but to many differences so geocentric strategy Step 1: Selection of relevant segmentation criteria Segmentation criteria:  Measurable: can you M the purchasing power?  Accessible: Can you reach the target group?  Profitable: Is your target group enough to make money.  Feasible: Haalbaarheid? General characteristics:  Geographic select target countries based on: o Proximity o Consumer needs o Other similarities  Language o Translation of advertising, brands,…

o Language is linked to a way of thinking o Non-verbal language (symbols, signs, codes)  Political factors  Demography (Analyze population characteristics)  Economy o Economic development o specific consumption patterns (high income, low income)  Industrial structure (Small shops vs hypermarket)  Technology  Social organization o Structure of the family o Social class  Religion  Education o Economic potential of young people: skills and knowledge o Degree of literacy Specific Characteristics:  Cultural characteristics o Determines consumer behavior  Lifestyle o Activities, interests, opinions (AIO’s) o Consumption habits & practices  Personality (general temper, bargaining)  Attitudes and tastes (status symbols) Step 2: Development of appropriate segments Step 3: Screening of segments (narrow down number of candidates)  Preliminary screening o Check the state of the market  look for the highest market potential  Export restraints  GNP per catipa  Cars owned  Government spending  Political risk  risk indexes:  BERI: Business Environmental Risk Index o Index that assesses the general quality of a country’s business climate o Based on different economic, political & financial factors o Scale from 1 to 4  Ease of doing business index (world bank) o Ranks 189 countries (1 is easiest to do business with)  Fine gained screening o Include the firm competitive power  look for the highest sales potential  MACS model: Compares Market Attractiveness/Competitive Strength  Compare market/county attractiveness (MA) with competitive strengths (CS)

 Look for the highest sales potential

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Segmentation per country: could lead to stereotyping Transnational approach: cluster analysis o Find clusters/segments that have similar patterns.  Demand/order  Consumer behavior

Step 4: Microsegmentation  Primary market is now identified  Develop subsegments within the selected county based on: o Demographic factors o Lifestyle o Motivation of consumers o Geography o …… Market analysis of the target market Messo environment = the industry Micro environment = the market Demographic factors  Size/ concentration of the population  Age/life expectancy  Income level/occupation  Marital status  Ethnic groups/religion Economic factors  Economic development o Based on:  National income  GDP per capita: gross domestic product: goods and services within the country  GNP: gross national product: products and services by a country, also export

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o Developing/ less developed countries  Low GDP  Limited production capacity  Bad infrastructure  Change in offer/demand = risky o Newly industrialized countries (NICs)  rapid economic growth  ongoing industrialization  aiming at export  biggest threat: production cannot keep up with demand  BRICS: Brazil, Rusia, India, China, South Afrika o Advanced industrialized countries  Strong GDP => more services  Good infrastructure  Services sector full bloom o The humand develmont index (UN) - Very high, high, medium, low  GNP per capita  Degree of industrialization: Expected growth rates: Bull/ bear market Unemployment rate

Exchange rates o Preferably stable and predictable rates  accuracy of financial planning o Weak currency:  Exports become cheaper  More appealing on world markets  Winning market share  Imports become more expensive  Not good for consumers o Strong currency  Exports become more expensive  Less appealing  Losing market share  Imports become cheaper o Devaluation: the intentional lowing of the value of a currency by nation’s government  give export a boost, reduces consumers’ buying power (opposite= revaluation) o The law of one price  Two identical products should have the same price no matter what country they are sold in o Purchasing power: Big Mac Index  To measure purchasing power parity  Gives an idea of over- or undervaluation of the currency

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 To predict future currency fluctuations  Overrated: you could expect a drop  Underrated: It could rise Trade policy o Import-export ratio: import>export= deficit  surplus o Trade barriers/ import restrictions  Laws that discriminate foreign companies (bv. Sugar taks)  To protect domestic producers  To generate revenue => niet altijd goed: kunnen niet vergelijken met de rest van de wereld, daarom duurder, ook voor export  Types of trade barriers  Tariff barriers: direct taxes & charges on imports  Per unit or % of value  High vs low tariffs  Direct impact on prices  Clear & predictable  Non-tariff barriers:  Quota’s  Import quotas (Japanese motorbikes in the us)  Export quotas (oil)  Embargos  To accomplish political goals  Zero quotum  Triple threat: grouping up against a country  Administrative delays  ‘subtle’ barriers: dikke bureaucratie  Local content laws  force foreign companies to use domestic services, products or labor o Market regulation  Measures to prevent foreign companies to compete with domestic companies  License requirements o Price regulation  Essential products (food, fuel) o Tax regulation (road taxes) Regional economic integration

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Free trade area

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o Free trade area: Europe, NAFTA (America) o Customs union: Belgium + the Netherlands (free trade area+ common policy for non-members) o Common market: euro (custom union+ free movements of production factors) o Economic union: euro (common market + agreeing on political terms) Socio-cultural factors  Culture: o the collective mental programming of people in an environment by the same education, life experience=(hofstede) o the glue that holds groups together o stereotyping: often incorrect  from our own ‘frame of reference’  Classification of cultures o High and low context cultures (Hall)  Low context  Use of written and spoken language to transfer a message  WYSIWYG (What you see is what you get)  Recipients are expected to decode the message correctly  High context  Surrounding factors to understand and interpret a message  Who sent the message? Social setting?

o Cultural dimensions (Hofstede)

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Power distance index  Luxury alcoholic drinks  Parents & children as equal  Outer appearance Individualism vs collectivism  Number of bars/cafés  Private gardens  cosmetics Masculinity vs Feminity  Relationship between man/women  Alcohol  Sigarettes  Soft drinks Uncertainty avoidance Index  Cleaning products  Insurance  Bottled water Long term orientation vs short term orientation

Levels of culture o Tangible aspects: the visible daily behavior (can change fast) o Underlying values & assumptions: values & social morals, basic cultural assumptions (Remain consistent for centuries) Elements to be researched o Visuals elements of culture  Language = mirror of a culture (verbal language, body language)  Manners & customs (beer in England schuim)  Food preferences  Lifestyle & aesthetics (= attitude towards beauty and good taste)  Beauty standards  Symbolism (colors, numbers, animals) o Values & social morals  Social institutions (business, political, family or social class)

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Values and attitudes = what’s right/ appropriate, important, desirable (status= core value)  Ethics: Bribery; what (not) to manufacture; what wages are appropriate; working hours& conditions o Basic cultural assumptions  National identity  Ethnic culture  Religion: Can provide similarities or some countries haven’t got a separation between state and church. Technological factors (when producing in Belgium=> export important)  Infrastructure & transport  Telecom & internet  Financial services Environmental factors  Geography  Climate  Geographic location  Important cities Political/ legal factors  Type of government  Pressure groups(labor unions)  Boycotts  Legalization: Code law vs common law

Market Attractiveness

Macro level: national competitiveness Successful international industries  often geographically concentrated Industry cluster = geographic concentration of interconnected businesses, suppliers, associated institutions. (they help each other grow) Porter’s Diamond: Why is one country more competitive than another  Factor conditions o Human resources/staff skills o Natural resources o Knowledge resources/know-how o Capital resources: money availability o infrastructure  Demand conditions o Large home demand (=quantity) o Sophistication of buyers (=quality)  Relations and supporting industries: leren schoenen en leren zetels.  Firm strategy and competition: Business culture within a nation. o The way in which companies are organized and managed = important for success (gender equality, transparent,…) o Domestic competition (competition within own nation) creates pressure to  Launch new products  Improve quality  Reduce costs  Invest in new, more advanced technologies  Government o Government choice of policies can influence each of the four determinants  Chance o Random events (radical innovations, unexpected oil rises, revolutions, wars) The factors within the diamond are all interconnected, their relative importance may shift Also look at the diamond of the trading’s partner country

Meso Level: competitiveness in an industry Porter’s Five forces The state of competition within an industry depends upon 5 basic competitive forces. Together they determine the ultimate profit potential in an industry, used to assess the balance of power in an industry. 1. Intensity of rivalry: high when=>  Many competitors of equal size  Slow market growth (same size, same opportunities)  Products not very differentiated 2. Bargaining power of suppliers (supp. In charge)  Higher power when: o Supply is dominated by few companies o Their products are unique (differentiated) 3. Bargaining power of buyers/customers  Higher power when: o Buyers are concentrated/purchase in large volumes o Products are standardized (undifferentiated) o There are many suppliers 4. Threat of substitute products/services  = products that perform the same or similar function as your product (of gewoon dezelfde behoeftes bevredigen)  Many substitutes  competing on price 5. Threat of new entrants  Can increase the degree of competition  Threat is higher when entry barriers are low (low product differentiation, low capital requirements for production) Micro level: competitive on customer level 2 fundamental sources of competitive advantage:  Perceived value advantage: when a firm’s products have the highest perceived value in the market o Blue ocean strategy/ value innovation  Red oceans:  Frequently accesses market spaces where o Products are well defined o Competitors are known o Competition is based on price, quality or service  Blue oceans:  An environment where: o Products are not yet well defined o Competitors are not structured o Market is relatively unknown

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Relative cost advantage: when the cumulative cost of performing all activites in the value chain is lower than competitors’ costs

H4: Market Approach Segmenting – targeting – positioning Microsegmentation: determine the different customer groups (segments) in your target market (can you find the same segments as in your home country) Target market strategies: select the market(s)/segment(s) you want to approach based on  Market attractiveness o Size o Growth o Profitability o Low risk  Company o Objectives and resources Product/market – matrix  Single segment concentration o When:  Strong market position  Great knowledge about segment-specific needs  Specified reputation o Pros:  Cost-efficient  In case you become market leader: high RIO o Cons:  High risk  Selective specialization o Spreading the risk  Market specialization o Covering different needs

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your

target

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different products Product specialization o 1 product for

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different markets Full market coverage o different products for different markets

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Product positioning Attain a specific position in the mind of the consumer:  What benefits do you have compared to the competition?  What’s your competitive advantage?  What’s your USP? competitor analysis is crucial! Consumers differ from country to country Select the right features to distinguish yourself:  Price  Quality  Specific benefits Country-of-origin effects: made in … (bv.cars,wine,shoes)  Can be good or bad  Country of origin > brand name  can have an influence on brand equity Perceptual mapping:  To find gaps in the market  To apply a me-too-strategy  To decide whether you need to reposition Market entry strategies How to bring products, technology & human capital into the foreign market, it’s a matter of property/ownership & flexibility Different degrees of control, risk & flexibility:

Export modes  Indirect export: - No direct contact between company and foreign partners - Exporting manufacturer uses independent organizations - Sale= like domestic sale => products are carried abroad by others => good: When limited expansion objectives; minimal recourses; want to enter a foreign market gradually  Direct export: - Sells directly to importer who is located in foreign market=direct contact - Product is sold to agents & distributors (no carriers, we export ourselves with help of agents)  Cooperative export= export marketing group...