W1L Introduction

INTRODUCTION

TO

INTERNATIONAL MARKETING

Lecture 1

Welcome to International Marketing

Iain McDonald ([email protected])

Course Outline:-

- structure of course

- allocation of marks

- lectures

- tutorials

3

What is International Marketing?

International marketing is the process of

planning and undertaking transactions

across national boundaries that involve

exchange

- e.g. Education, Food, Medicine, Cars, Oil,

Clothes, Money, Tourism .

Why Is International Marketing Important ?

The opportunity that it gives to:-

(1) Countries:

(a) economic advantage

- what is China really good at ?

- what is Oz really good at ?

- opportunity for trade ?

(b) economic multiplier

- local communities China / Oz

- new jobs

- income impacts



(2) Firms additional growth from new markets,

additional profits .

- Microsoft

- McDonalds

- Apple

- Coca Cola



(3) People - opportunity

- new jobs, growth existing jobs

- income,

- security,

- lifestyle

e.g. Chinas economic development last 20yrs



(4) Trade Relations:

- via formal / informal contacts

- government to government trade agreements

(makes rules for trading easier / cheaper)

- business to business contracts

e.g. Oz free trade agreements with Japan, China, Korea .


The opportunity that it gives for:-

(5) Cultural exchange:

- better understanding of who we / you are .

- closer political, commercial, personal relationships

- tourism, sport, education exchanges

- all above help security ...

e.g. worlds new engagement with Myanmar but not with

North Korea

How Does International Marketing Work ?

1.Firms (and sometimes Governments) identify through

market research a need .

2. Can it be made to work ?

3. Will it be profitable ?

4. Negotiate to make it happen

5. Manage, monitor and ADAPT the plan

e.g. - McDonalds in Japan, Germany

- Google in France, China

So How Does International Marketing Work ?

1. Firms research similar / adapted customer needs

(medicine, education, food, clothing, cars)

2. In countries where it is safe to do business Australia / Syria

3. They then research the best way to set up their business

(on their own or (say) via a franchise, distributor, others ???)

4. They evaluate the expertise / experience they will need got it ?

5. Then they execute the plan and adapt it for changing circumstances

(Nikes contract manufacturing and child labor issues)

Who Benefits from International Marketing ?

Almost everyone .

(1) Firms:-

Zara (Spain) / H&M (Sweden) set up in Oz = jobs here

(Clothing designed / made / transport = jobs wherever)

BHP (Oz) exports iron ore to China = jobs there

(Steel made = products made in China and exported = jobs wherever)

McDonalds (anywhere) = local jobs + supplier contracts


(2) Countries:-

Vietnam economic development over the last 20years

Myanmar from political isolation to gradual opening of economy and Asias new source of cheap labor

Zambia a new foreign capital hub in Africa, economy is booming

North Korea chose isolation 50 yrs ago and still is one of the most backward and poorest countries in the world


(3) Individuals and Families:-

China / India number of millionaires, rising middle class, many firms now re-locating OUT OF CHINA as wages rise. Rise of budget

airlines.

Poland, Latvia, Lithuania, Estonia since joining the EU economies have more than x2 in size

Botswana, Angola stable government with specific economic planning has seen average incomes x4 last 10yrs

How Big Is International Marketing ?

There are 193 members of the United Nations

There are 3 other states that are not members ???

So there are 196 trading states in total

World Trade 2013 ($tn)

Merchandise Trade 18.2

(the most commonly used term)

Others

Commercial Services 4.2

Transport 0.9

Travel 1.1

Others 2.2

26.6

Who Are The Big Guys in IM?

Merchandise Trade 2013 ($tn)

Exports Imports

1.China 1899 1.USA 2265

2.USA 1481 2.China 1743

3.Germany 1474 3.Germany 1254

4.Japan 823 4.Japan 854

5.Holland 660 5.France 715

6.France 597 6.UK 636

7.Korea 555 7.Holland 597

8.Italy 523 8.Italy 557

9.Russia 522 9.Korea 524

10.Belgium 476 10.Canada 452

(21. Australia 271) (19.Australia 244)

What About By Region?

Merchandise Trade (Exports) 2013 ($bn)

($bn) (% Total) (Yr /Yr % change)

North America 2,483 14 16

South America 749 4 27

Europe 6,601 37 17

Russia / CIS 522 3 34

Africa 597 3 17

Middle East 1,228 8 37

Asia 5,534 31 18

What Challenges for International Firms ?

(The Market Schematic Model)

External Possible Customers Marketing Process

Environment Target Customers Who to sell to ?

Political With what ?

Legal Who to Buy From ? Where ?

Economic When ?

Social How ?

Technical

Cultural The Market Place

Outcomes

Profitable Growth

Their Offers Vs Yours Quality Customers

Repeat Business

Competitors You



External

Environment

Political What are the external environment challenges

Legal in each of these areas ?

Economic

Social What will they mean for the firms

Cultural business model ?

Technical

What changes may need to be made ?

e.g. doing business in USA, Vietnam?



Possible Customers

Target Customers

Can we segment the international market(s) in the same way ?

Are the target customers the same ?

e.g. - customers for cars in France and Somalia ?

- types of cars for France and Somalia ?

- types and quantities of food for customers in France and Somalia?

- use of bottled water in France and Somalia ?



The Market Place

Is the market place the same ?

If there are differences what might this mean for our

business operations ?

e.g. - the market place for clothes in Japan and India ?

- building houses in Russia and Uganda ?



The Market Place

Their Offers Vs Yours

Competitors You

Are the competitors the same ?

What do their different operations mean for your competitive advantage ?

e.g. - are your competitors in China the same as in Germany?

- do they operate in the same way ?



Marketing Process

Who to sell to ?

With what ?

Where ?

When ?

How ?

What do all these changes mean

for your marketing plans ?

- getting information Outcomes

- evaluating it Profitable Growth

- making decisions Quality Customers

Repeat Business

Is International Business Easy To do ?

Countries . ???

Companies .. ???

International Firms Specific Challenges

Coca Cola the most known brand on the planet but new profitable growth ?

McDonalds - the almost perfect international firm why ?

Nokia we were the biggest and best, but now ?

Emirates - deep pockets help and Government backing

Nike - the challenges of sweat shop labour

BHP - what does $40bn buy you in Canada nothing !

Kodak they just didnt get digital and re now bust

International Firms Specific Challenges

Wal Mart expand into Africa great opportunity ? - but not if the local Governments dont want you

Huawei the biggest white goods company in the world and now want to

expand into US but too close to the Chinese military, so .. ?

Shell the worlds largest LNG project in 2001, taken away by the Russian Government

Apple what next .. cars ????

Case Study - Ethakota (India)

- 10 hrs train from Hyderabad, then 2 hrs car

- Village hall has 47 people . and PCs

- PCs connect via radio link to internet

- Used to book car servicing / check expense a/cs / arrange job

interviews for applicants all remotely

- Set up by gramIT an NGO

(70% Indian pop in villages)

- Income is now 4 times higher than from farming

- They get to stay in village, social cohesion

- And, brought some villagers back from other jobs outside village

Case Study Abalone Farm

Northern Tasmania

- 660 concrete tanks

- 3m abalone

- Produce 40 tonnes p.a.

(50% export (Japan)

New logistics technology:-

- Vacuum pack in shell, in brine

(Freeze at (-) 18C)

- Special airfreight packaging / overnight

to Tokyo

Target:

Restaurant market in Japan (very high prices)

and International Marketing

can create some surprising marketing circumstances

Georgia Chopsticks (USA) now exports 44 million sets / day to China.

(marked Made in USA)

Shortage of the right kind of wood (sweet gum) in China, but theres an

abundance of it in Georgia.

The factory opened in 2007 in a

recession hit town with 12% unemployment.

Now employs 200 people and

works 3 shifts / day, 7 days



Vancouver (Canada) has banned the use of doorknobs

in all buildings

because of the ageing population,

who find it much easier to use

door handles



After the Costa Concordia ran aground on the Italian island of Giglio,

tourists were replaced by salvage workers in hard hats, life vests and dirty

overalls. Hundreds of workers had to be catered for in the hotels, cafes

and restaurants.

The influence of all these foreign workers has internationalised the locals,

changing what they eat and drink. Restaurants have added foreign dishes

and special beers and liquors just for them.

Important Learning and Revision Points

1. Why IM is important what are the key factors for firms to

consider ?

2. What does a typical IM project evaluation involve / how

does it work ?

3. Components (drawing) of the market schematic model ?

4. Examples of the benefits of IM for countries, firms, people ?

Tutorial Next Week

Case Study 1 P&G in Vietnam

W1L Introduction

Documents

Transcript of W1L Introduction