Gmm the Final Slide

7/29/2019 Gmm the Final Slide

1/256

Amity Business School

1


MBA 2011, 4th Semester

Global Marketing Management

Amanpreet Kang


2/256


2

Module I: Management of

Global Market Mix. (GMM)

Shobhit Mathur

[email protected]+91 98101 00348
mailto:[email protected]:[email protected]


3/256


3

Agenda

Module I: Management of Global Market

Mix. (GMM)

What is GMM, Business Customs inGlobal Marketing, Required Adaptation,Methods of doing Business, Global MarketMix. Strategy, Improved Products &

Program Effectiveness.


4/256


4

What is GMM?

Global Marketing mix is the set of

marketing tools that the firm uses to

pursue its marketing objectives in the

Global market

Product

Price

Place (Distribution)

Promotion


5/256


5

Business Customs in Global

Marketing


6/256


6

Types of Customs

3 Types of Customs 1. Cultural Imperatives

Business customs and expectations that MUST be met inorder to conduct successful business transactions in other

countries/cultures 2. Cultural Electives

Business customs and expectations that are OPTIONAL, inwhich business executives may participate/conform in, but isnot required.

May help to establish rapport and respect when participationoccurs

Majority of customs fall into this category


7/256


7

Types of Customs

3. Cultural Exclusives

Customs that are reserved exclusively for thelocals, where foreign participation is EXCLUDED

Example: Foreign business people criticizing localpoliticians, business practices where it is acceptable forthe local to do so


8/256


8

Terpstra and Sarathy Cultural

Framework 8 categories Language - Low/high context Religion,

Values and Attitudes, - Europeans Family first,Americans more competitive, individualistic

Education,

Social Organizations, - caste/class systems, role ofwomen

Technology and Material Culture,

Law and Politics and - UK laws mkt based, precedence& legislation based, Iran - Islamic

Aesthetics. - Traficante" an Italian mineral water found agreat reception in Spain's underworld. In Spanish it

translates as "drug dealer


9/256


9

ADAPTATION VS.

STANDARDIZATION

Elements of the marketing mix could be

Standardized across all markets

Adapted to appeal to particular market segments

Standardization

Essentially the same approach to the 4 Ps in

every target market

Adaptation Marketing mix is tailored to country or to market

segment within a country


10/256


10

Global Product Hybrid I Mktg Strategy

ebaY.incustomised for Indian audience

Coca Cola Light

Ideal Global Mktg Strategy

DELLreplicated its direct selling

practices globally

Nike

National Product Ideal National Mktg Strategy

Haldirams - caters to Indians in India &

abroad

Nirma - caters to rural & low income

segments in India

Hybrid II Mktg Strategy

McDonalds - Retailing formula & mktg

activities are same around the World, &product is suited to local markets

Product Strategy

Segmentation Strategy

National Market Segment Global Market Segment
http://www.google.com/imgres?imgurl=http://www.zeuzerindia.com/images/client_logo/haldiram.jpg&imgrefurl=http://www.zeuzerindia.com/clients.html&h=114&w=150&sz=35&tbnid=wb_r4vIxjSdUSM:&tbnh=73&tbnw=96&prev=/images%3Fq%3Dhaldirams%2Blogo&zoom=1&%20


11/256


12

FACTORS IN PRODUCT

ADAPTATION

Internal company considerations

Human and financial resource constraints

Costs of developing and producing distinctproducts

Customer considerations

Customer preferences (example: GMOs)

Economic situation of customers (example:farm machinery)

The total size of the market


12/256


13

FACTORS IN PRODUCT

ADAPTATION (continued)

Competitive considerations

Degree of competition in target market

Exploiting gaps in competitors product lines

Legal and regulatory considerations Sanitary standards

Tariff and nontariff barriers (example: milkcomponents)

Bottom line: is adaptation profitable, and how longwill it take for it to become profitable?


13/256


15

EXAMPLE OF PRODUCT

ADAPTATION

Kit-Kat roughly $1 billion in salesworldwide

In Russia, its slightly smaller and the chocolate

is coarser In Japan, its strawberry flavored

Each of these product variations is the result of

thorough market research on local tastes.There is no global consumer for the food-and-beverage business. This is a deep belief wehave, Brabeck says. (Peter Brabeck is the Chairmanand CEO of Nestle)


14/256


16

PACKAGING AND LABELING

Protection of the product Climate control

Transportation and handling Packaging usually needs to be more durable for export

Shelf life

Size of the package Pillsbury uses packages with 6-to-8 servings in

developing countries, while 2-serving packages are

most popular in North America 2-liter bottles of Coke were too large for the

compartments in most refrigerators in Spain


15/256


17

PACKAGING AND LABELING

(continued)

Legal Constraints

Packaging recycling requirements

Consumer information requirements (food labels)

Multilingual labeling requirements Canada (French and English)

Belgium (French and Flemish)

Finland (Finnish and Swedish)

Promotion of the product

Brand image

Distinguish product from the competition


16/256


18

PRICE

Pricing situations

Export pricing

Foreign market pricing (production abroad)

Pricing strategies

Cost-based strategies

Demand-based strategies

Eclectic strategies based on short- and long-term company goals


17/256


19

COST-BASED STRATEGIES:

EXPORTING

Standard worldwide pricing

Price is based on average fixed, variable,and export-related production costs

Dual pricing

Export price is based on marginal costsrather than average costs

Constitutes dumping (an example of costdumping)


18/256


20

COST-BASED STRATEGIES:

PRODUCING ABROAD

Standard within-market pricing

Price in each market in based on averagefixed and variable production costs in that

market

With either exporting or producing abroad,cost-based strategies may be out of

alignment with market conditions


19/256


21

DEMAND-BASED PRICING

STRATEGIES

Price discrimination Charge different prices in different markets

Can do with exporting or producing abroad

A type of dumping when applied to exports(price dumping)

How does it work? Lower prices in market segments with more price-elastic demands, higher prices in segments withless price-elastic demands

If price differences are too large, run into


20/256


22

ECLECTIC STRATEGIES

BASED ON

Short- and long-term company goals

Profitability

Market share

Production costs

Demand-side considerations



21/256


23

PLACE

Distribution choices are the least flexiblechoices in the marketing mix

International challenges

Lack of familiarity with distribution channels

Use of intermediaries means relinquishingcontrol


22/256


24

PROMOTION

Promotion mix includes

Advertising

Personal selling

Publicity Sales promotions

Mix will depend on

Target audience

Company objectives

Product or service being marketed

Resources available

INTERNATIONA


23/256


25

INTERNATIONAL

ADVERTISING

Media strategy

Which media reach your target market? May be muchdifferent from India

Media regulations vary by country Promotional message

Why would the target consumer buy the product?Emphasize those attributes

How is the product positioned? Ads should beconsistent with positioning

Rational versus emotional appeals

Be very sensitive to cultural considerations

INTERNATIONAL


24/256


26

INTERNATIONAL

ADVERTISING (continued)

Ad literacy of target audience Is audience used to connecting ad images and ad

messages?

Annual per capita spending on advertising variestremendously by country and region:

United States: $153

Canada: $64

Europe: $43 Latin America: $5

Asia and Pacific: $4

Middle East: $2

Africa: 80

Statistics: ad spending per capitaby top 100 marketers in 2006

Sources:Advertising Age andPopulation Reference Bureau

ADDITIONAL PROMOTION


25/256


27


TOOLS

Personal sellingoften used

In early stages of international expansion

For high-cost products

For industrial goods

Publicity/Public Relations

To earn public understanding and acceptance

Anticipate or counter criticisms Portray as good citizens of host country


26/256


28

SALES PROMOTIONS

Covers all promotions except for advertising, personalselling, and publicity

Includes:

Coupons Free samples

Consumer education

Product demonstrations

Point-of-purchase materials Discounts

Direct mail

Prizes and giveaways


27/256


28/256


30

IN-CLASS EXERCISE

In groups of 3-5 people, come up with an Indianfood product that, as far as you know, isnt currently

sold in the UK

Outline a plan for how you would market thatproduct in the UK

Report your findings to the class


29/256


31

Methods of Doing Business

Methods of doing business can vary not onlyacross culture, but within cultures.

Methods of doing business can vary in:

Levels of Authority Management Objectives

Communication Emphasis

Formality and Tempo

Negotiations

Gender Attitudes


30/256


32

Levels of Authority

There are three general authority patternswhich describes who makes the decisionin an organization:

Top-level management

Decentralized

Committee or group


31/256


33

Levels of Authority Question

What level of authority does the personyou are interacting with have in makingdecisions?

What is the best way to get to the decisionmaker?


32/256


34

Management Objectives

Understanding the managers objectives can be

an important tool when doing internationalmarketing.

Management objectives can be broadlyclassified in the following areas:

Personal Goals

Security and Mobility

Personal Life

Social Acceptance

Power


33/256


35

Management ObjectiveQuestions

What is the management objectives of theperson I am dealing with?

How do these objectives affect the decision

he could potentially make?

How can I tailor my product around themanagers objectives?


34/256


36

Communication Emphasis

Communications should be kept formalboth in written and spoken form.

Communication may go far beyond words.

Depending on the society you are doingbusiness with, how you say something is asimportant as what you say.


35/256


37

Low Versus High ContextLanguage

A low context language is one that isheavily dependent on explicit verbalexpression what is said is what is meant

Swiss, German, Scandinavian A high context language is one that relies

heavily on the context or nonverbalcommunications what is said may not bemeant Japanese, Arabian, Latin American


36/256


38

Communication Questions

When doing business in a foreign country,how important is the context of thelanguage when conversing?

What constitutes a confirmation or denialin the language you are doing businessin?


37/256


38/256


40

Formality Questions

What is the proper greetings for theperson you are doing business with?

When and where is it appropriate to talkbusiness?

What is appropriate side discussion?

What is the formal business dress?

Eg US East Coast vs the West


39/256


41

Tempo and Time

Tempo is related to how you deal with timeand the use of it.

How cultures handle time can be viewed inthe following:

Polychronic Time (P-Time)

Monochronic Time (M-Time)


40/256


41/256


42/256


43/256


45

Negotiation Questions toConsider

Does the culture you are dealing with liketo bargain?

Does the culture your dealing with getinsulted if you try to negotiate to much?

What aspect of fairness comes intonegotiations?


44/256


45/256


46/256


47/256


48/256


50

Social Responsibility Questions

Is it legal?

Is it right?

How will the public and vestedstakeholders view your actions?


49/256


51

Business Customs and theInternet

Language on a website is one of the mostimportant considerations.

Since your website can be anywhere in

the world, special consideration should betaken as to the colors and symbols youuse on the website.

Care should be taken when designing awebsite to make sure it is intuitive to theclient.


50/256


51/256


52/256


53/256


54/256


55/256


57

Learnings from Switch 1000launch

All-around campaign integration

Revaluation of launch vehicles andmethods

Localised content available at the time ofor shortly after US launch

Keeping momentum going post launch


56/256

ADAPTATION VS


57/256


59

ADAPTATION VS.

STANDARDIZATION

Elements of the marketing mix could be

Standardized across all markets

Adapted to appeal to particular market segments

Standardization Essentially the same approach to the 4 Ps in

every target market

Adaptation Marketing mix is tailored to country or to market

segment within a country


58/256


59/256


60/256


61/256


62/256


63/256


64/256


68

PRICE

Pricing situations

Export pricing

Foreign market pricing (production abroad)

Pricing strategies

Cost-based strategies

Demand-based strategies

Eclectic strategies based on short- and long-term company goals


65/256


66/256

DEMAND-BASED PRICING


67/256


71

DEMAND BASED PRICING

STRATEGIES

Price discrimination Charge different prices in different markets

Can do with exporting or producing abroad

A type of dumping when applied to exports(price dumping)

How does it work? Lower prices in market segments with more price-

elastic demands, higher prices in segments withless price-elastic demands

If price differences are too large, run intotransshipment (smuggling) problems

ECLECTIC STRATEGIES


68/256


72

ECLECTIC STRATEGIES

BASED ON

Short- and long-term company goals

Profitability

Market share

Production costs

Demand-side considerations



69/256


70/256


74

PROMOTION

Promotion mix includes

Advertising

Personal selling

Publicity Sales promotions

Mix will depend on

Target audience

Company objectives Product or service being marketed

Resources available


71/256


72/256



73/256


77

TOOLS

Personal sellingoften used In early stages of international expansion

For high-cost products

For industrial goods Publicity/Public Relations

To earn public understanding and acceptance

Anticipate or counter criticisms Portray as good citizens of host country


74/256


75/256


79

Product Piracy


76/256


80

Product Piracy

Downside for the Manufacturer Any aspect of the product is vulnerable

Brand name, logo, design, packaging

Impact is twofold Monetary losses; eg China where $16B worth

counterfeit goods sold each year; P&Gestimates 15% sales are fake,leading to

annual loss of $ 150M Damage to the brand name poor quality,

service

Sometimes the fake products are also

Product piracy preventive


77/256


81

Product piracy preventivesteps

Lobbying With the Govt to toughen legislation &

enforcement of existing laws in the foreign

country Legal action

Prosecuting counterfeiters China has setup

special courts to stamp out IPR piracy Customs

Seek their assistance in seizure of counterfeitgoods

Product piracy preventive


78/256


82

Product piracy preventivesteps..contd

Product Policy options Putting holograms on products to distinguish

fakes

Distribution Microsoft got Chinas 4 largest PC makers to

bundle XP into their computers

CommunicationsAdvertising, PR campaigns to educate

customers, warn counterfeiters


79/256

Country of origin(COO)


80/256


84

Country of origin(COO)stereotypes contd

Demographics matter Elderly, less educated, politically conservative

Culture

Individualistic societies like US will be moreobjective, while Collective like Japan will bemore inclined towards a domestic product

Some consumers use COO as a cue whenunfamiliar with product brand name

Coping with COO


81/256


85

Coping with COO

Product policy Select a brand name that disguises COO

2 of the most successful apparel retailers in Hongkong haveItalian sounding names - Giordano & Bossini

Pricing - Low pricing will attract customers

Distribution Use big local names eg Hungarian and Chilean wines are

successful in UK - they are sold by Tesco

Communication 2 fold strategy

Improve the Country image

Improve the brand image The above may also be used to overcome Made in India hurdle


82/256


86

Module III: Product

Management (GMM)Shobhit Mathur

[email protected]+91 98101 00348

Agenda


83/256


87

Agenda

Module III: Product Management(GMM)

Placement Management

Movement across frontiers,

Import oriented distribution,

Global Retail Distribution,

Foreign Market Channels of Distribution,

Use of Free Ports,Time Management & distribution,

Key India issues in import distribution.

Definition of Global logistics


84/256


88

Definition of Global logistics

It is defined as the design andmanagement of a system that directs andcontrols the flow of materials into, through,

and out of the firm across nationalboundaries to achieve its corporateobjectives at a minimum total cost.


85/256

A it B i S h l

Movement across frontiers factors


86/256


90

Movement across frontiers factorsthat determine the optimal mode of

transportation Value-to-volume ratio

Perishability of the product

Quality deterioration over time or product lifecycle

Cost of transportation

To be viewed along with both above factors

A it B i S h l

Movement across frontiers different


87/256


91

Movement across frontiers differentmodes of transport and their optimal

use Ocean Shipping for transport of heavy, bulky, ornonperishable products eg crude oil, automobiles, andsteel

Liner Service scheduled passage on establishedroutes

Bulk shipping contractual service for pre-specifiedperiods of time

Irregular runs

Container ships help cut cost due to standardised

containers that help loading/unloading, and intermodalxport

Some cartels do exist so to cut its costs Honda uses itsown ships to ferry cars to North America & brings back

us Soya

A it B i S h l



88/256


92


use Air Freight seen rapid growth over last40 yrs

Volume of goods still < 2%, value >20%

High value goods esp with high V to V ratio egsemiconductor chips, LCD screens ,diamondsetc

Flowers & perishable agricultural produce Super sized export planes hv facilitated

courier groth service eg Fedex, DHL, UPS

Amit B siness School



89/256


93


use Intermodal transportation Combination of more than 1 means of

xportation

Eg upto the domestic port by road / air then ocean Cost, time to mkt (esp retail) drive the

decision


Global Retail Distribution


90/256


94

Global Retail Distribution

The face of distribution that consumersinteract with is the Retail Store

Retailers have grown into the largest cos

ie Walmart buys as much as JP mkt fmP&G

Retailing involves very locallyentrenchedactivities local holidays (sabse sastadin), festivals, seasonal promotion egwinter wear, as well as meeting localcompetition on a daily basis


91/256


Retailing differences across the


92/256


96

Retailing differences across theworld

Density - Developed Countries have less outletsthan emerging mkts smaller & more frequentpurchases due to low incomes

Japan difference tight regulations, fresh foodingredients, perishable items (fish), local duetraffic congestion

Germany limited hours

China low price matters most, one-stopshopping, many visits


93/256


94/256


Foreign markets channel of


95/256


99

Foreign markets channel ofdistribution

Licensing Co (licensor), offers some proprietory assets

to a foreign company (licensee) in exchange

for royalty Fee eg Tokyo Disneyland ownedand operated by Oriental Land companyunder license fm Disney

Pros profitable, not demanding on resources,

Cons recovering fees fm Licensee, lessprofitable than export, patent protection


96/256


97/256


Foreign markets channel of


98/256


102

Foreign markets channel ofdistribution

Joint Ventures The Co agrees to share equity and other resources

with other partners to establish a new entity in atarget country three types Majority >50%, 50-50,

Minority


99/256



100/256


105

Session V: Brand

Management (GMM)Shobhit Mathur

[email protected]

+91 98101 00348


Agenda


101/256


106

Agenda

Brand Management Branding for the world,

Global or Local Brands,

National Brands,

Private Brands,

Brand Name change over strategies,

Umbrella Branding,

Protecting Brand Names,

Global Brands in India


102/256


A Brand can convey upto 6


103/256

y

108

a d ca co ey up o 6levels of meanings

Attributes : Amul youthful image, wholesome Benefits : healthy, hygienic

Values : most successful Indian co-operative,

benefits many, well run, diversified food portfolio Culture :The taste of India original Indian

product, made in India

Personality : witty youngster

User : Indian homes, local food joints / Dhabas


Deep & shallow brands


104/256

y

109

p

Deep brand when the audience canvisulaise all six dimensions eg Mercedes

Shallow brand Audi is less deep esp on

attributes of Benefits, Personality & Userprofile


105/256


Branding for the


106/256

y

111

gWorldstrategy consideration

What aspect of brand policy is global, whathas local flexibility

In India Coca-Colas large brand is Thums Up

as they didnt want to lose thesweet cola mkt What brands will become Global mega,

which should be kept Local


107/256


108/256


Global branding issues


109/256

114

g

Branding_URLetc.ppt
http://localhost/var/www/apps/conversion/tmp/scratch_8/Branding_URLetc.ppthttp://localhost/var/www/apps/conversion/tmp/scratch_8/Branding_URLetc.ppt


110/256


4 types of Branding


111/256

116

yp g

Solo Branding Each brand stands on it ownwith a brand manager running it Eg Unilever Lux, Knorr, Surf , P&G Ariel, Pantene

Hallmark branding co tags one main brand

no sub brands eg HSBC, banking sector Umbrella (Family) branding us corporate

brand a an authority symbol eg Sony Playsation,Apple iPhone

Extension branding start with one productand extend to other categories, as far aspossible eg Ralph Lauren's Polo brandsuccessfully extended from clothing to home

furnishin s such as beddin and towels


Factors shaping global brand
http://en.wikipedia.org/wiki/Ralph_Laurenhttp://en.wikipedia.org/wiki/Polo_Ralph_Laurenhttp://en.wikipedia.org/wiki/Polo_Ralph_Laurenhttp://en.wikipedia.org/wiki/Ralph_Lauren


112/256

117

p g gstructure / brand portfolio

drivers Firm based drivers Centralised firms more likely to have a global brand Organic or in-organic growth strategy

Product diversity Nokia can be fully global as fewer

products than Unilever Product Market drivers

How homogeneous are the segments, are they local,regional, global?

Products with strong local preference Thums Up Market dynamics what distribution channels

are available in a country


113/256


114/256


Local branding


115/256

120

g

Often justified by Cultural barriers Brand names like Healthy Choice, Weight

Watchers etc. may not be relevant in non-Englishspeaking countries

Patriotism and Buy local attitudes Heineken people identify with their local brewery;

unlike soaps, and electronics

Danone of France grew in China by acquiring localfood companies & continue selling under local names,80% of Danones sales came from these local brand

names


Private brands/Private label


116/256

121

branding/Store branding Started by Shoppers Stop with their

STOP brand

Initially the private label was only targeted

towards the non branded product rangewhich included wheat flour, masalas andpapads.

Now the private label brands have grown

out of proportion by entering into hightechnology electronic gadgets like mobilesby Univercell,


Brand name change over


117/256

122

strategies Local to Global

brand Fade-in/fade-out Global brand name is tied with the existing

brand, after a period local name is dropped

Paris EuroDisney -> Euro Disneyland ->Disneyland

Co-branding to combine brands

When Whirpool acquired Philips whitegoodsdiv, kept the name Whirlpool & Philips,afterwards Philips dropped


Brand name change over


118/256

123

strategies Local to Global

brand Transparent forewarningAlerts the Customer to the brand name

change eg Hongkong Bank of Canada /

Australia -> HSBC Summary axing

Simply drop the brand name overnight andreplace with a Global one


Protecting Brand names


119/256

124

Legal registration most common way Paris Convention for the protection of

Intellectual Property is supported by 100

Countries European Union SMA (Single Market Act)

Differences exist

Developed Countries view IP as right for

Innovativeness

Developing Countries regard IP as a public good


120/256


121/256


122/256


Agenda


123/256

128

Brand Management Branding for the world,

Global or Local Brands,

National Brands,

Private Brands, Brand Name change over strategies,

Umbrella Branding,

Protecting Brand Names,

Global Brands in India


124/256


125/256


Other Cultural barriers in Advertising


126/256

131

Religion In Saudi Arabia only veiled womencan be shown, except from the back

Political sensitivitiesCadburys Kashmir gaffe

too good to share Work with local translators / ad agencies

Ad campaigns should be in tune with theCultural value systems of target audience -

Individualism, Collectivism, Feminism,Masculinism


Setting the Global Advertising Budget


127/256

132

Percentage of Sales method Pros simple; Cons the objective of advertising is to impact

sales a case of Dog wagging the tail

Competitive Parity

Use competitors advertising budget as benchmark

Cons new entrants need to spend more Objective and Task method

Most popular, used by almost two thirds of the cos

Necessitates a solid understanding of relationship betweenadvertising spending and stated goalmkt share, brand recall

Field experiments are used to achieve this Resource Allocation method Bottom Up each country

Microsoft, FedEx Top Down Bausch & Lomb, AT&T


128/256


Creative strategy


129/256

134

Pros of standardisation Consistent Image

Matters esp to the globe trotting Consumers

Global Consumer Segments

the young and the rich have very similar tastes globally Ray-Ban has a pan Asia campaign

Creative talent Creative talent in ad agencies is in short supply

Cross-fertilisation Marketers encourage their affiliates to adopt or atleast

consider adopting ideas that are successful in other markets When P&G introduced Pantene in Latin America it used and ad

that was produced for Taiwan


Creative strategy


130/256

135

Barriers to standardisation Cultural Differences

Advertising Regulations

While Ray-Ban had a pan Asia ad, in Malaysia adsfeaturing Caucasians are not allowed, shot withlocals

Market maturity

Products relatively new to the market neededucation

Not-Invented-Here (NIH) Syndrome

ThumsUp vs Coke in early days ?


Approaches to create


131/256

136

multinational Ads Laissez Faire each Country follows its own course,no centralised decision making

Pepsi ads with Indian cricketers, Coke with actors

Export Advertising the same positioning theme usedWW

BMW, ultimate driving machine

Prototype standardisation

Guidelines given to subsidiaries for execution ofstrategy Mercedes Tag Heuer, Wrigleys

Regional Approach Nokia strategic decisions madeby a central forum; execution local

Pattern Standardisation HQ spells guidelines forpositioning theme and brand identity all its global

advertising showed distorted object clear thru Smirnoff


Media Planning / Media


132/256

137

decisions Media Infrastructure

Abundant In Western Countries new mediachannels emerge continuously; not so inothers, Regulations Germany TV

advertising allowed only during limitedtimeframes of the day

Japan scarce supply of ad space earlyplanning

Media Limitations Creative options Intel used bike reflectors

in Shanghai and Beijing Intel inside, Radio

Taxis etc


Media landscape major trends


133/256

138

Growing commercialisation and deregulation of massmedia

Shift from radio and print to TV and Internet

television Shopping Network Teleshop

Rise of global and regional media MTV and ESPN, regional websites eg Yahoo India

Growing spread of interactive Marketing

Xbox with an interactive ad

Growing popularity of text messaging Most popular in Asia - mobile phone penetration ishighest

Improved monitoring of broadcast spots

Improved TV viewership measurements by using people




134/256

139

Culture - Malaysia banned a Toyota adwith Brad Pitt humiliation against Asianswhy do we need to use Western faces inour Ads?, Are our own people nothandsome?

Advertising of Vice Products andPharmaceuticals rules on advertising of

liquor and tobacco getting more severe Comparative advertisingChina doesnt

allow product comparisons, Use of best;US is OK




135/256

140

Content of Advertising messages Regulated by local regulators

Ads may be taken off air if they are offensive,indecent

Advertising targeting children highlyregulated

Banned in parts of Canada

In Finland, children cannot speak the productname


Coping with AdvertisingR l ti


136/256

141

Regulations Keep track of regulations & pending

legislations

Screen the campaign early on

Lobbying activities Challenge regulations in court

Adapt marketing mix strategies eg

Kingfisher Water, Soda


Advertising agency - selection


137/256

142

Market coverage in the entire Geography Quality of coverage Japan an agency with media

buying skills is preferred over one with better creativeskills

Expertise with developing central international campaign Creative reputation

Scope & quality of support services eg Mkt Research

Desirable image (global Vs local)

Size of the agency imp for media buying

Conflicting accounts does it work for competitorsneed for confidentiality agreements


138/256



139/256

144

Session VI: Cross Cultural

BusinessBehaviour

(GMM)Shobhit Mathur

[email protected]

+91 98101 00348


Culture and its implication inGl b l M k ti
mailto:[email protected]:[email protected]:[email protected]


140/256

146

Global Marketing Culture& Mktg Feb 02.ppt

Amity Business SchoolCross Cultural Negotiations
http://localhost/var/www/apps/conversion/tmp/scratch_8/Culture&%20Mktg%20Feb%2002.ppthttp://localhost/var/www/apps/conversion/tmp/scratch_8/Culture&%20Mktg%20Feb%2002.ppt


141/256

147

4 Stages of Negotiation Process non-task soundings

task-related information exchange

persuasion concessions and agreements


Non-task soundings


142/256

148

Includes all aspects that are used toestablish rapport among parties involved

Weather talk, commute for the meeting, any

recent sporting event, arrival into the Country Japanese spend much more time building rapport

than Amercicans


Task-related info exchange


143/256

149

Proposal, timelines, etc. Japanese prefer to spend much more time on

first 2 stages so that little effort is needed forthe persuasion stage


Persuasion


144/256

150

Give and take the deal For Americans, this is the most important

stage


Concessions and agreement


145/256

151

To achieve consensus / handshake Eg agreeing to a price discount for better

payment terms to achieve closure

Americans prefer to make concessions during thecourse of the negotiation while as Japanese preferto defer this to the end


4. Adapting to Cultures


146/256

152

Global marketers need to becomesensitive to cultural biases that influencetheir thinking, behavior, and decisionmaking.

Self-reference criterion (SRC): Refers tothe peoples unconscious tendency toresort to their own cultural experience and

value systems to interpret a givenbusiness situation.

Ethnocentrism refers to the feeling ofones own cultural superiority.


4 step SRC correctionmechanism


147/256

153

mechanism Define the business problem or goal in

terms ofyour own cultural traits

Define the business problem or goal in

terms ofhost cultures cultural traits Isolate the SRC influence

Redefine the business problem or goal,

this time w/o the SRC influence


Ethnocentrism


148/256

154

More risky than SRC Mattel introduced Barbie in Japan called

Moba Barbie Looked akin to what they thought Japanese

desired Never got more than 5-6 percent mkt share!

After 8 years re-introduced with more westernlooks, also displayed Japanese girls playing with

Barbie in TV ads

Mattel mistakenly tried to cater to Japanesedesires


5. Culture and the Marketing Mix


149/256

155

Culture is a key pillar of the marketplace. Product Policy: Certain products are more culture-

bound than other products. Food, beverages, andclothing products tend to be very culture-bound.

GM introduced Buick in China with better rear seats;Americans put children in rear, Chinese bosses

Pricing: Pricing policies are driven by four Cs:

Customers

Company (costs, objectives, strategy)

Competition Collaborators (e.g., distributors)

Magic Prices ending with 9 (Rs 19.99) to show goodvalue in emerging markets


5. Culture and the Marketing Mix(contd.)


150/256

156

(contd.)

Distribution: Cultural variables may also dictatedistribution strategies.

Avon in China had to change its direct-selling model to smallcounters in departmental stores, kiosks high context culture

Promotion: Promotion is the most visible marketingmix. Culture will typically have a major influence on afirms communication strategy. Local cultural taboos

and norms also influence advertising styles. High context cultures (Japan, Italy, Spain) subtle messaging

Low context cultures (Germany, Scandinavia) more use offactual data, reasoning, etc.

Amity Business School6. Organizational Cultures


151/256

157

Organizational Culture: Most companies arecharacterized by their organizational (corporate)culture.

A model of organizational culture types includes

the following four cultures Clan culture

Adhocracy culture

Hierarchy culture

Market culture

Most firms have elements of several types ofCultures


Clan Culture


152/256

158

Cohesiveness, teamwork, sense of family Leadership style father figure, mentor

Bonding Loyalty

Strategic emphasis development ofhuman resources

Japanese cos

Tata Group


Adhocracy culture


153/256

159

Entrepreneurship, creativity Leadership style Entrepreneur,

innovator, risk taker

Bonding Entrepreneurship, flexibility, risk Strategic emphasis innovation

Germany, US

Bharti Group Telecom as well as foraysinto Retail, Food Products, Insurance


Hierarchy culture


154/256

160

Order, rules & regulations Leadership style coordinator,

administrator

Bonding rules, policies,and procedures Strategic emphasis stability,

predictability, operational excellence

France, Japan Most Indian PSUs SBI, LIC, ONGC


Market Culture


155/256

161

Competitiveness, goal achievement Leadership style decisive, goal-oriented

Bonding Goal orientation, production,

competition Strategic emphasis - competitive

advantage, market superiority

UK, US, Japan

RIL, Future Group


7. Global Account Management (GAM)


156/256

162

The coordination of the management ofcustomer accounts across national boundariesare referred to as global account management(GAM).

Global Accounts Requirements: May require a single point of contact

May demand coordination of resources forserving customers

May push for uniform prices and terms oftrade

May have standardized products andservice


7. Global Account Management (GAM)(contd.)


157/256

163

( )

May require a high degree of consistency inservice quality and performance

May support in countries where thecompany has no presence


7. Global Account Management (GAM)


158/256

164

Managing Global Account Relationships: Clarify the role of the global account

management team.

Make incentive structure realistic.

Pick the right global account managers.

Create a strong support network.

Make sure that the customer relationshipoperates at more than one level.

Amity Business School8. Global Customer Relationship

Management (CRM)


159/256

165

g ( )

The process of managing interaction betweenthe company and its customers is calledcustomer relationship management (CRM):

Helps in customer retention

Helps in richer communication and interactivemarketing

Helps in tailored services

Helps to maintain a closer contact with thecustomers


Enterprise Systems


160/256

166

ManufacturerWholesaler

Retailer

Distribute Sell

Supply

Demand

Consumer

ConsumeProduce

$ $$

Purchase

Enterprise Resources Planning

Supply Chain Management

Customer RelationshipManagement

Customer RelationshipManagement


Single view of the customer?


161/256

167

ERP Back Office

Internet

Support

Customer

Management

Sales

Marketing

CardCard

ReportReport

Report

Spreadsheet

Spreadsheet

Document

Document

Document

Document

Document

Document

Spreadsheet

Spreadsheet

email

email

email

Spreadsheet

Spreadsheet


CRM applicationsSales Service


162/256

168

DataKnowledge

BaseWarehouse

CRM SystemMarketing(analysis,promotions

actuals)

(synchronised,field information)

(orders,complaints)

Management

(decision support,performance)

Partner(promotions,

funds, portals)

Consumer(web, clubs)

Other systems, email, telephone

Web


8. Global Customer RelationshipManagement (CRM) (contd.)


163/256

169

g ( ) ( )

Benefits of CRM: A better understanding of customers

expectations and behavior

Ability to measure the customers value to the

company

Lower customer acquisition and retentioncosts

Ability to interact and communicate withcustomers in countries where access totraditional channels is limited


8. Global Customer RelationshipManagement (CRM) (contd.)


164/256

170

g ( ) ( )

Guidelines for Successful CRM Implementation: Make the program business-driven rather

than IT-driven

Monitor and keep track of data protection andprivacy laws in those countries where CRMsystems are being used or are in the planningstage

A good data is the main pre-requisite. Rewards being sent out to customers are

relevant, targeted, and personal.



165/256

171

Session X : Pricing

(GMM)

Shobhit Mathur

[email protected]

+91 98101 00348


Chapter Overview


166/256

173

1. Drivers of Foreign Market Pricing

2. Managing Price Escalation3. Pricing in Inflationary Environments

4. Global Pricing and Currency Movements

5. Transfer Pricing

6. Global Pricing and AntidumpingRegulation

7. Price Coordination

8 Countertrade


Introduction


167/256

174

Global pricing is one of the most critical andcomplex issues in international marketing.

Price is the only marketing mix instrument thatcreates revenues. All other elements entail

costs.

A companys global pricing policy may make or

break its overseas expansion efforts.

Multinationals also face the challenges of how tocoordinate their pricing across differentcountries.

Amity Business School1. Drivers ofForeign Market


168/256

175

Foreign Market

Pricing


1. Drivers of Foreign MarketPricing


169/256

176

Pricing


Driversthe 4 Cs


170/256

177

Company costs, goals Customers price sensitivity, segments

Competition nature, intensity

Channels distribution channels

Amity Business School1. Drivers of Foreign Market Pricing


171/256

178

Main drivers affecting global pricing: Company Goals

Satisfactory ROI

Market Share Specified Product Goal

New Balance shoes, sold in France aspremium, twice the US price

Altruistic goals Merck sells its AIDS drug at85% discount in Asia


Company Costs


172/256

179

Fixed & Variable costs variable costs thatchange with volume, fixed costs overheadsthat do not change with volume

Cost-Plus Pricing

Adds international cost plus markup todomestic mfg cost

Dynamic Incremental Pricing Price arrived at after removing fixed costs

FC has to be borne anyhow export or not- Mfg costshv to be managed

HLL spends a large sum on R&D to lower mfg costs

McDonalds only imports potatoes, has setup a largeR&D to improve Indian potatoes

Could lead to dumping / grey mkt


Company costs


173/256

180

Kelloggs on the other hand entered Indiawith costly packaging and expensiveadvertising result Champion cornflakes

piggybacked on their Mktg efforts andconquered the cereal mkt with one fifth thecost of mfg


2. Drivers of Foreign Market Pricing


174/256

181

Customer Demand It is a function of buying power, habits and substitutes

Customers; willingness to pay sets a ceilingwhile

Starbucks is viewed as premium in US, it faces formidablerivals in Europe and Asia who charge much lower

Buying power is a key consideration Eg Shampoo sachets in rural India80% of sales

Niche player Haagen Dazs charges a premium priceworldwide

Country specific products Have a portfolio of products that caters to every income tier

HLL

Sell Older versions Mercedes sells older models in India


Competition


175/256

182

Cross-Border Price Differentials Caused by differences in competitive situations acrosscountries

Fewer competitors in a country

Global vs local players

Private vs govt players (enjoying subsidies, cheaper loans)

Counterfeits / piracy also forces firms to cut prices

China has a huge smuggled car polulation from Japan andKorea

Bottomiline Companies will be price leaders in some

countries and price takers in othersHeinzs policy is to cutprices in markets where its not the market leader

Nonprice Competition Competition in advertising, channel coverageCoke vs Pepsi


Distribution Channels


176/256

183

Variations in Trade Margins and Length of Channels Eg France & UK have huge retailers who buy in bulk henceare able to nego large discounts

Rest of Europe, smalll retailers have formed cross-border co-ops to negotiate better with manugacturers

Issues of Every Day Low Prices (EDLP) Mfr offers consistently lower prices to retailers / consumers Distributors have a problem with this

In UK PCs are 50% more expensive than US andGermany where there is an option of channel choicesdirect marketers, supermarkets, large speciality chains like

BestBuy in US Parallel Imports (Gray Market)

Moevement of goods from low price countries to high pricecountries

To curtail, firms consider lowering cross-border price disparities


Government Policies


177/256

184

Even after launch of the Euro, car prices vary by50% across European countriesreason.. Sales tax, value added taxes, tariffs, price controls

Taxes have a direct impact on prices

Indirect impact huge government deficits mayraise the cost of capital, hence high interestrates, Volatility, high inflation, etc.

Government interference

Chinese government sets minimum prices in 21industriesviolators slapped with hefty fines

Amity Business School2. Managing Price Escalation


178/256

185

Several options exist to lower the export price: 1. Rearrange the distribution channel To byepass the notorious Japanese distribution infra, many

US companies resorted to direct Mktgcatalog sales,telesales

2. Eliminate costly features (or make themoptional)

make the products no-frills

3. Downsize the product

Ariel reduced the package size fm 200 to 150 g inEgypt

4. Assemble or manufacture the product inforeign markets

Japanese cars in the US


Managing Price Escalation..contd


179/256

186

Premium positioning strategy Lego has positioned its toys as educational

in Indiaeg Lego Learning toys, Construction

toys


Pricing in Inflationary Environments


180/256

187

In January 1990 a Big Mac meal in Russiacosted 6 rubles, 3 years later the samemeal costed 1100 rubles!!!

Amity Business School3. Pricing in Inflationary Environments


181/256

188

Alternative ways to safeguard against inflationmay include:

1. Modify components, ingredients, parts and/orpackaging materials.

2. Source materials from low-cost suppliers.

3. Shorten credit terms.

4. Include escalator clauses in long-term contracts.5. Quote prices in a stable currency. US$ or Euro

6. Pursue rapid inventory turnovers.

7. Draw lessons from other countries Otis andMacDonald used their Managers in Latin America to

Amity Business School3. Pricing in Inflationary Environments


182/256

189

Companies faced with price controls can considerseveral alternatives:

1. Adapt the product line

2. Shift target segments or markets.

3. Launch new products or variants of existingproducts - In Zimbabwe bakers added

raisins to dough to call it raisin bread toescape price control on bread

4. Negotiate with the government.

5. Predict incidence of price controls.


5. Transfer Pricing


183/256

194

Sales transactions between related entities of the samecompanies are called transfer prices.

Determinants of Transfer Prices:1. Market conditions in the foreign country2. Competition in the foreign country

3. Reasonable profit for foreign affiliate

4. U.S. federal income taxes

5. Economic conditions in the foreign country

6. Import restrictions

7. Customs duties

8. Price controls

9. Taxation in the foreign country

10 Exchange controls


5. Transfer Pricing


184/256

195

Criteria for making transfer pricing decisions:

Tax regimes Cos would like to boost their profits in low tax countries

Could lead to audit issues in high tax countries

Local market conditions

To gain mkt share, Cos may initially underprice intercompanyshipments

Market imperfections High import duties may prompt Cos to lower transfer prices

Joint venture partner Need to protect interest of local JV partners

Morale of local country managers Esp when employee performance is linked to sales, esp an

issue in high tax countries

Amity Business SchoolSetting Transfer Prices


185/256

196

Market-based transfer pricing:

Arms length pricesAs if the transfer had occurred between unrelated Cos

Yardstickmarket price

Nonmarket-based pricing:

Cost-based pricing Simple mark-up to the cost of goods

Issue : consensus on fair profit splits and allocation ofcorporate overhead

Many instances when tax authorities do not accept it


Transfer pricing


186/256

197

Negotiated pricing Country affiliates negotiate a transfer price

A recent study shows that compliance with

financial reporting norms, fiscal and customrules, and anti-dumping regulations promptcompanies to use market-basedtransferpricing.

Amity Business School5. Transfer Pricing


187/256

198

Government-imposed market constraints(e.g., import restrictions, price controls,

exchange controls) favor nonmarket-basedtransfer pricing.

Most firms use a mixture of market-based

and non-market pricing procedures. Minimizing the Risk of Transfer Pricing Tax

Audits:

Basic Arms Length Standard (BALS)


5. Transfer Pricing


188/256

199

To minimize the risk of tax audits, decisions shouldcenter around the following five questions (seeExhibit 13-6):

1. Do comparable/uncontrollable transactionsexist?2. Where is the most value added? Parent?Subsidiary?3. Are combined profits of parent and subsidiary

shared in proportion to contributions?4. Does the transfer price meet the benchmark setby the tax authorities?5. Does the tax MNC have the information to

justify the transfer prices used?

Amity Business School6. Global Pricing and Antidumping

Regulation


189/256

201

Dumping occurs when imports are sold atan unfair price.

Govts may impose counterveiling duties orfines to protect local mfrs

Voluntary Export Restraint (VER)


To minimize risk exposure to antidumpingactions, exporters might pursue any of the

following marketing strategies:


190/256

202

following marketing strategies:

Tradiing-up Move from low value to high value products, Japanese carmfrs

Service enhancement

add support services to core products to differentiate

Distribution and communication Strategic alliances with local Distributors




191/256

203

The following considerations will be necessarywhen developing a global pricing strategy:

1. Nature of customers

2. Amount of product differentiation

3. Nature of channels4. Nature of competition

5. Market integration

6. Internal organization7. Government regulation




192/256

204

Global-Pricing ContractsGPCs (see Exhibit 13-7):

Purchasers often demand GPCs from theirsuppliers.

GPCs can also benefit suppliers.

A GPC can offer the opening toward nurturinga lasting customer relationship.

Small suppliers can use GPCs as adifferentiation tool to get access to newaccounts.




193/256

205




194/256

206

Aligning Pan-Regional Prices A Pricing Corridor (to find the middle ground by

upping prices in low-price countries and cuttingthem in high-price countries) works as follows:

Step 1. Determine optimal price for eachcountry.

Step 2. Find out whether parallel imports

(gray markets) are likely to occur at theseprices.

Step 3. Set a pricing corridor.




195/256

207

Implementing Price Coordination: Globalmarketers can choose from four alternatives topromote price coordination within theirorganizations:

1. Economic measures2. Centralization

3. Formalization

4. Informal coordination


Countertrade


196/256

209

Unconventional trade-financingtransactions that involve some form ofnon-cash compensation

Accounts for 10-15 % of worlds trade


8. Countertrade


197/256

210

Motives behind Countertrade: Gain access to new or difficult markets

Overcome exchange rate controls or lack ofhard currency

Overcome low country credit worthiness

Increase sales volume

Generate long-term customer goodwill

Amity Business School8. Countertrade

F f C t t d


198/256

211

Forms of Countertrade:

Simple barter China & Morocco traded $260 M worth of pesticides vs

phosphates

Clearing agreement

2 Govts enter into agmt to import a specified value of goodsfrom one another

Indoenesia and Iran paper, rubber for Iranian oil

Switch trading Clearing house with a third party which uses the surplus

credits to buy goods from the deficit country Buyback (compensation)

Seller provides the equipment and is ready to receive partpayment thru sales of goods produced from the equipment


Countertrade


199/256

212

Counterpurchase Similar to buyback

Offset

Seller agrees to offset the purchase price by

sourcing from the importers country MIG Corporations deal with HAL


8. Countertrade


200/256

213

Shortcomings of Countertrade:

No in-house use for goods offered by

customers

Timely and costly negotiations

Uncertainty and lack of information on future

prices Transaction costs


8. Countertrade


201/256

215

Words of advice regarding countertrade:

1. Always evaluate the pros and cons of countertrade

against other options.2. Minimize the ratio of compensation goods to cash.

3. Strive for goods that can be used in-house.

4. Assess the relative merits of relying on middlemen

versus an in-house staff.5. Check whether the goods are subject to any

restrictions.

6. Assess the quality of goods.



202/256

217

Session XI : Global Market

Research

Shobhit Mathur

[email protected]

+91 98101 00348



203/256

218

Global Marketing Research

Amity Business SchoolOverview


204/256

219

1. Research Problem Formulation2. Secondary Global Marketing Research

3. Primary Global Marketing Research

4. Market Size Assessment5. New Market Information Technologies

6. Managing Global Marketing Research

Amity Business SchoolIntroduction


205/256

220

Given the complexity of the global marketplace,solid marketing research is critical for a host ofglobal marketing decisions

Walmarts Jewellery counters in Argentina stocked

precious stones, while Argentine women prefer gold &silver!

Hardware dept had tools at 110 Volts, standard is 220Volts!!

Most of the cultural blunders in global marketingstem from inadequate marketing research.


Six steps in conducting globalmarket research:


206/256

221

1. Define the research problem(s)

2. Develop a research design

3. Determine information needs4. Collect the Data (secondary and

primary)

5. Analyze the data and interpret theresults

6. Report and present the findings of the

Amity Business SchoolMajor challenges faced by globalmarketing researchers:


207/256

222

1. Complexity of research design due toenvironmental differences

2. Lack and inaccuracy of secondary data

3. Time and cost requirements to collectprimary data

4. Coordination of multicountry research efforts

5. Difficulty in establishing comparability acrossmulti-country studies

Amity Business School1. Research Problem Formulation


208/256

223

Any research starts off with a precise definitionof the research problem(s). What does the motorist in a country demand of his

car?

In an international context, the marketingresearch problem formulation is hindered by theself-reference criterion (SRC). Local subsidiaries should be consulted to minimise

this

A major difficulty in formulating the researchproblem is unfamiliarity with the foreignenvironment.

Omnibus surveys are regularly conducted by


1. Research Problem Formulation(contd.)


209/256

224

Once the research issues have been stated,management needs to determine the informationneeds.

Amity Business School2. Secondary Global MarketingResearch


210/256

225

Secondary Data: Data/information which isalready available.

Primary Data: When the information is notuseful, or simply does not exist.

Selected Secondary Data Sources: Lexis/Nexis,FINDEX, National Trade Data Bank, U.S.Department of Commerce, Japan External TradeOrganization (JETRO), OECD, IMF, TheEconomist Intelligence Unit (E.I.U.), ACNielsenCo, Taylor Nelsen Sofres, etc.



211/256

226


2. Secondary Global MarketingResearch (contd.)

Problems with Secondary Data Research:


212/256

227

Problems with Secondary Data Research:

Accuracy of Data

Age of data

Reliability over Time

Comparability of Data

Triangulate

Functional or Conceptual Equivalence In US bicycles are used for sport; while in China &

Netherlands used for transport

Lumping of Data Arising from the tendency of official data sources to often group

statistics on certain variables in very broad categories


3. Primary Global Marketing Research


213/256

228

Focus Groups Hiring well trained moderators is critical to

international MR

Survey Methods for Cross-Cultural MarketingResearch:

Questionnaire Design

Conceptual and Functional EquivalenceAcross cultures

Translation and Scalar Equivalence Careless translations can lead to

embarrassment

Amity Business SchoolSampling: A sampling planconsists of:


214/256

229

Sampling unit

Who should be surveyed

Sample size Sampling procedure

Heterogeneous cultures like India demandlarger sample sizes than Korea

Inapproachability of women in Muslimcountries


Contact Method


215/256

230

Mail Telephone

Person-to-person interviews (shopping mallintercepts)

Online Survey Methods

E-mail surveys

Random Web site surveys

Panel Web site surveys


Some methods prevail in somecultures; some in others


216/256

231

Germans more resistant to telephoneinterviewing than other Europeans

Daytime telephone calls dont work in Saudi

Arabia as women cannot talk to strangers

Brazil has issues with lost mail

Some countries do not have adequatetelephones

Chinese managers reluctant to discuss issuesover phone, face to face ok


Online survey research


217/256

232

3 types E-mail surveys

Self-administered questionnaire sent out

Website surveys

Visitors to a site are asked to fill out questionnaire

Panel website surveys

Rely on a panel of respondents


Pros and cons of Internet as atool for Global MR


218/256

233

Pros Large samples possible in short time

Global access

Lower costs, scale independentAnonymity

Easier data analysis : can be directly loadedinto statistical tools and databases

Overall short response time


Pros and cons of Internet as atool for Global MR


219/256

234

Cons Poor IT infrastructure in many countries

Sample representative ness

Speed of access Low response rates

Multiple responses (from same respondent)

Amity Business School3. Primary Global Marketing Research(contd.)

Collecting the Information


220/256

235

Collecting the Information

Issues of nonresponse Due to reluctance to talk with strangers

Courtesy bias Esp in Asia and Mid east, respondent feels obliged to

give answers that please the interviewer Social desirability bias

Subject attempts to reflect a certain social status inresponse

Redundancy (asking the same question in different

ways) Issues of ethnographic research

Field Researchers embed themselves in target society

Intel does this in India, China & Chile

Amity Business School4. Market Size Assessment


221/256

236

Method of Analogy Longitudinal method of analogy

Trade Audit

Chain Ratio Method

Cross-Sectional Regression Analysis


Analysis by Inference


222/256

237

Market assessment by inference usesavailable facts about related products or

other foreign markets as a basis for inferring

the necessary information for the market

under study Related products

Related markets size

Related environmental factors Analysis of demand patterns


Method of Analogy


223/256

238

The assumption is that there is an analogy between therelationship of a factor and demand for a particular productor commodity in two countries

Let XA = demand for product X in country A

YA = factor that correlates with demand for product X incountry A, data from country A

XB = demand for product X in country B

YB

= factor that correlates with demand for product X in countryA, data from country B

If we assume that :

XA/YA = XB/YB

and if XA, YA, and YB are known, we can solve for XB asfollows:


Longitudinal Method of Analogy


224/256

239

Displacing time is a useful method of market analysis when data

are available for two markets at different levels of development

The assumption is that an analogy between markets exists in

different time periods

Let

XA1 = demand for product X in country A during time period 1

YA1 = factor associated with demand for product X in country

A during time period 1

XB2 = demand for product X in country B during time period 2

YB2 = factor or factors correlating with demand for product X in

country A and data from country B for time period 2

If we assume that :

XA1/YA1 = XB2/YB2

and if XA, YA, and YB are known, we can solve for XB as follows:


4. Market Size Assessment (contd.)


225/256

240

When using market size estimates, keep thefollowing rules in mind:

Use several different methods.

Dont be misled by numbers.

Dont be misled by fancy methods.

Do a sensitivity analysis by asking what-ifquestions.

Look for interval estimates with a lower andupper limit rather than for point estimates.

Amity Business School5. New Market InformationTechnologies

Major developments/innovations:


226/256

241

Major developments/innovations:

Point of sale (POS) store scanner data

Consumer panel data

Single source data

Shift from mass to micro marketing Continuous monitoring of brand sales/market

share movements

Scanning data are used by manufacturers tosupport marketing decisions.

Amity Business School5. New Market InformationTechnologies (contd.)


227/256

242

Scanning data are used to providemerchandising support to retailers.

Amity Business School6. Managing Global MarketingResearch


228/256

243

Selecting a Research Agency: Thefollowing considerations should be takeninto account while choosing agency:

Level of expertise

Qualifications Track record

Credibility and experience

Client record


Coordination of Multi-Country Research:Emic versus Etic dilemma

The emic school focuses on the peculiarities


229/256

244

pof each country.

The etic approach emphasizes universalbehavioral and attitudinal traits.

In cross-cultural market research, the need forcomparability favors the etic paradigm with anemphasis on the cross-border similarities andparallels.

Several approaches may be used to balancethese conflicting demands.



230/256

245

Thank You



231/256

246

International Marketing Research

Managing Marketing Information to gain

Customer Insights


Introduction

Importance of customer information ???


232/256

247

Not just customers but also competitors and stakeholders. Why and how is information gathered?

Some cases Case of Pizza Hut

CAT - Cab comfort in India

CAT reliability vs. efficiency of the machines

Lays and baseball matches (analytics)

Apples iPod

Touring the store with the customer (Major retail chains inthe world grocery as well as departmental stores)


Introduction

Customer needs and buying motives not obvious difficult for


233/256

248

customers to articulate Givaudan

Customer insights Understanding of customers and the marketplacederived from marketing information that become the basis for creating

customer value and relationships. Harley Davidson

Customer Insights teams at IMRB

Marketing information systemassess information needs, develop the

needed information and help in decision making (generate andvalidate actionable customer and market insights) Caterpillar, Infosys (Knowledge Management Portals on intranet of

organisations)



American Marketing Association defines marketing research as systematic


234/256

249

gathering, recording and analyzing of data about problems relating to themarketing of goods and services.

Some issues related to International Marketing Research:

Culture

Information to be communicated across cultural boundaries Case of Human Rights and perceptions of people Case of equal rights of employees irrespective of gender, Japan, France,

Germany, India

Environment in which research tools are applied are different

Varies from country to country Use of Kiosk in case of CAT Use of internet to gather data Use of technology in market research



Lack of knowledge


235/256

250

First time exporters Closed country environments

Socialist countries earlier; Arab World more recently

Unfamiliarity with foreign markets

Small exporters, only 27% use research and tools Country reports by reputed institutions are helpful (Occasional papers

and industry reports by ECGC, Exim Bank, EPCs in India)

Complex

Across cultures, context may be different Use of 5 point scale (Poor, Fair, Good, Very Good and Excellent)

cultural context

Models often used, not adapted as per country



Unpredictable consumer demands


236/256

251

Givaduan (fragrances) Colors (apparels, garments)

Changing beliefs, values

Indian breakfast

South East Asia and Food Habits

China Tea vs. Coffee Family Size

Attention to children DINKS

DISKS

Little princes and princesses of China

Socio-technographic profile of people (Psychographics)

In terms of expenditures countries that spend a lot on research are -US, UK, Japan, Germany


Breadth and scope of International Marketing Research



237/256

252

Three types:

General information about country, area and market

Information for future marketing requirements by anticipatingsocial, economic, consumer and industry trends

Specific market information to make product, promotion,distribution and price decisions

Economic

Cultural, sociological and political climate

Overview of market conditions

Technological environment

Competitive situation

PEST, PESTLE, PESTEL


Process



238/256

253

Marketing problem vs. Research problem Research objectives Cost and benefits of the research effort Data sources

Secondary data Availability of data Reliability of data Comparability of data Validating secondary data

Who collected the data?

For what purpose was the data collected? How was the data collected? Is data internally consistent and logical w.r.t. known sources

of data or market factors?




239/256

254

Process Data sources

Secondary data Different data collection methods

Classification differences Unit of measurement

Definitional differences

Case of normative databases

Understanding of scales by the consumers Sensitivity


Primary data



240/256

255

Gathering data Personal, Mail surveys, Telephonic, E-Mail, Survey Panels Agencies that are engaged in collecting data

Internal sources Case of Pizza Hut (Yum Brands) Tesco

Caf Coffee Day External agencies

Cross tab Online survey panels (Speak Asia Online) Experience sur

Gmm the Final Slide

Documents

Transcript of Gmm the Final Slide