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Presented By Robert Cascio, Doctoral Candidate Department of Marketing College of Business, UCF June 2011 Seminar for Study Abroad Program University of Jan Slide 2 DAY 1 (2.5 hours): Part I: Culture Attitudes, Beliefs, Color, Communication, Context, Values; introduce Hofstedes Topology Class Exercise Part II: Diffusion | Segment, Target, and Position Adopter types, adoption process, adoption factors, etc. Video Part III: Market Entry Steps and Options Entry Method Licensing, Joint Venture, Direct Investment In-Class Case Overview of Case for Monday and Homework. Slide 3 DAY 2 (2.5 hours): Case Study Quiz Case Study Presentations 1.Position yourself as the International Market Development team 2.Prepare a 7 to 10-minute boardroom-style presentation to convince the CEO and top executives that your strategy is the best alternative to take. Review rubric. Discuss peer evaluation. 3.Discussion of strategies Game Theory Discussion Recent Customer Service Research Findings between the North America and Europe. Slide 4 Slide 5 Cultureways of living, built up by a group of human beings, that are transmitted from one generation to another Culture has both conscious and unconscious values, ideas, attitudes, and symbols Culture is acted out in social institutions Culture is both physical (clothing and tools) and non-physical (religion, attitudes, beliefs, and values) Slide 6 Family Education Religion Government Business These institutions function to reinforce cultural norms. Slide 7 Culture is the collective programming of the mind that distinguishes the members of one category of people from those of another. -Geert Hofstede A nation, an ethic group, a gender group, an organization, or a family may be considered as a category. Slide 8 Attitudelearned tendency to respond in a consistent way to a given object or entity Beliefan organized pattern of knowledge that an individual holds to be true about the world Valueenduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct. Slide 9 Redassociated with blood, wine-making, activity, heat, and vibrancy in many countries but is poorly received in some African countries. Whiteidentified with purity and cleanliness in the West, with death in parts of Asia. Graymeans inexpensive in Japan and China, but high quality and expensive in the U.S. Slide 10 Red signifies good luck and celebration in China Yellow indicates a merchant in India In England and the U.S., Something Blue on a brides garter symbolizes fidelity Slide 11 Speaking English around the Globe There are more people who speak English as a foreign language than native speakers 85% of European teens study English Sony, Nokia, Matsushita require managers to speak English Nonverbal Communication Westerners tend to be verbal; Asians value nonverbal communication In Japan, bowing has many nuances In the Mideast, Westerners should not show the soles of shoes or pass documents with the left hand Slide 12 High Context Information resides in context Emphasis on background, basic values, societal status Less emphasis on legal paperwork Focus on personal reputation Saudi Arabia, Japan Low Context Messages are explicit and specific Words carry all information Reliance on legal paperwork Focus on non-personal documentation of credibility Switzerland, U.S., Germany Slide 13 Power Distance Individualism/Collectivism Masculinity Uncertainty Avoidance Long-term Orientation Slide 14 Group rules: 1 marketing major in each group 1 finance major in each group 1 laptop owner in each group Assignment 10 minutes to prepare 3 minutes each to present Group 1: Explain 2 different entry methods Group 2: VIA Ready Brew, Breakfast value meal; keep focus international please Group 3: Starbucks vs. McDonalds; globally, who is better positioned Slide 15 Slide 16 The mental stages through which an individual passes from the time of his or her first knowledge of an innovation to the time of product adoption or purchase Awareness Interest Evaluation Trial Adoption Slide 17 Innovation is something new; five factors that affect the rate at which innovations are adopted include: Relative advantage Compatibility Complexity Divisibility Communicability Slide 18 Slide 19 1. Slalom Waterski 2. Wakeboard 3. Wakeskate 4. Kiteboard 5. Handglide 6. Paraglide 7. Volcanoboard (ashboarding) Slide 20 Represents an effort to identify and categorize groups of customers and countries according to common characteristics Slide 21 The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond Focus on the segments that can be reached most effectively, efficiently, and profitably Slide 22 Positioning is required to differentiate the product or brand in the minds of the target market. Slide 23 Defined as the process of identifying specific segmentswhether they be country groups or individual consumer groupsof potential customers with homogeneous attributes who are likely to exhibit similar responses to a companys marketing mix. Slide 24 Demographics Psychographics Behavioral characteristics Benefits sought Skiing became a sport in Norway where it was invented 4,000 years ago. Slide 25 Income is a valuable segmentation variable 2/3s of worlds GNP is generated in the Triad but only 12% of the worlds population is in the Triad Do not read into the numbers Some services are free in developing nations so there is more purchasing power For products with low enough price, population is a more important variable Slide 26 Slide 27 Slide 28 Benefit segmentation focuses on the value equation Value=Benefits/Price Based on understanding the problem a product solves, the benefit it offers, or the issue it addresses Slide 29 Standardized global marketing Mass marketing on a global scale Undifferentiated target marketing Standardized marketing mix Minimal product adaptation Intensive distribution Lower production costs Lower communication costs Slide 30 Concentrated global marketing Niche marketing Single segment of global market Look for global depth rather than national breadth Ex.: Chanel, Body Shop Differentiated global marketing Multi-segment targeting Two or more distinct markets Wider market coverage Ex.: P&G markets Old Spice and Hugo Boss for Men Slide 31 Locating a brand in consumers minds over and against competitors in terms of attributes and benefits that the brand does and does not offer Attribute or Benefit Quality and Price Use or User Competition Slide 32 Local consumer culture positioning Identifies with local cultural meanings Consumed by local people Locally produced for local people Used frequently for food, personal, and household nondurables Ex.: Budweiser is identified with small-town America Clydesdale = Which Beer? Slide 33 Slide 34 Trade barriers are falling around the world Companies need to have a strategy to enter world markets Starbucks has used direct ownership, licensing, and franchising for shops and products In 2008, Starbucks had 12,000 cafes in 35 countries and sales of $10.8 billion. Its goal is to reach 40,000 units worldwide. Slide 35 Slide 36 It depends on: Vision Attitude toward risk Available investment capital How much control is desired Slide 37 A contractual agreement whereby one company (the licensor) makes an asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations Slide 38 Partial or full ownership of operations outside of home country Foreign Direct Investment Forms Joint ventures Minority or majority equity stakes Outright acquisition IKEA, with affordable furniture and housewares, spent $2 billion in Russia. Slide 39 Top Target Countries for U.S. Investment 1. United Kingdom 2. Canada 3. The Netherlands 2000 cumulative total by U.S. companies = $1.2 trillion Top Foreign Countries Investing in the U.S. 1. United Kingdom 2. Japan 3. The Netherlands 2000 investment by foreign companies in U.S. = $1.2 trillion Slide 40 Entry strategy for a single target country in which the partners share ownership of a newly-created business entity Builds upon each partners strengths Examples: Budweiser and Kirin (Japan), GM and Toyota, GM and Russian government, Ericssons cell phones and Sony, Ford and Mazda, Chrysler and BMW Slide 41 Advantages Allows for risk sharing financial and political Provides opportunity to learn new environment Provides opportunity to achieve synergy by combining strengths of partners May be the only way to enter market given barriers to entry Disadvantages Requires more investment than a licensing agreement Must share rewards as well as risks Requires strong coordination Potential for conflict among partners Partner may become a competitor Slide 42 Start-up of new operations Greenfield operations or Greenfield investment Merger with an existing enterprise Acquisition of an existing enterprise Examples: Volkswagen, 70% stake in Skoda Motors, Czech Republic (equity), Honda, $550 million auto assembly plant in Indiana (new operations) Slide 43 Gladwell, M. (2000). The Tipping Point. New York: Little, Brown, and Company. Hofstede, G. (2001). Culture's Consequences. Thousand Oaks, CA: Sage. Keegan, W. J. (2011). Global Marketing (Vol. 6th Edition). Boston: Prentice Hall. This is the required text for the Global Marketing elective course at UCF. Rogers, E. M. (1986). The Diffusion of Innovations (3rd ed.). New York: The Free Press. Slide 44 Copyright Information All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright 2011 Pearson Education, Inc. Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall