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Welcome to MKTG 7506

International Marketing Management

Dr Ravi Pappu

Office: Room 416 Colin Clark Building

Phone: 3346 8089

Email: r.pappu@business.uq.edu.au

Consultation: Monday 3-4 PM; Room 416 Colin Clark

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Welcome

Welcome to MKTG 7506 International MarketingManagement

Agenda

Course overview

Assessment

Delivery (Seminars, Case study presentation)

Seminar 1: The Scope and Challenge ofInternational Marketing

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Course requirements (1)

Prerequisites: it is expected that students have donean introduction to marketing course, or have a goodunderstanding of marketing principles.

Text-book: Cateora and Graham (2007)International Marketing, 13th edn. (C&G)

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Case Analysis

In class, students present ONE of the followingcase studies in groups of 4 to 5.

Case study 1: EuroDisney

Case study 2: Fair & Lovely (cosmetics)

Case study 3: Coke & Pepsi

Case study 4: Starbucks

Case study 5: Emerging markets

Case study 7: easyCar.com

Case study 8: McDonalds

Case study 9: Nestle

Check blackboard carefully for case study topics,questions, instructions and analysis guidelines.

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Assessment structure

International Marketing Commentary individual (20%)

3 PM Friday 7 May (hard copy at FRC+electronic submission TURN-IT-IN)

International Market Analysis group (40%)

Group of 4-5 students (Formation by Week 2)

See blackboard for guidelines

3 PM Friday 28 May (hard copy at FRC+electronic submission TURN-IT-IN)

Final examination individual (40%)

Short answers, Lectures 1 -11

One case study.

The Scope and Challenge ofInternational Marketing

C & G (2007) Chapter 1

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Learning objectives

Understanding the differences betweeninternational marketing and domestic marketing.

Understanding some of the main obstacles toadaptation (Ethnocentrism & Self-ReferenceCriterion).

Discuss various stages of international marketinginvolvement.

Understanding a firms strategic orientationtowards international marketing.

Discuss some important concepts underlyinginternational marketing.

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Some International Marketing Blunders

Where the Bloody Hell Are You?

XXXX in the US

Fords Pinto in Brazil

Nestl's baby food in Africa

General Motors No-Va in Puerto Rico

Laundry detergent in Middle-East

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1. How international marketing differs fromdomestic marketing?

Whats marketing? Customer needs and the roleof the marketing mix value creation

Marketing in more than one country

Marketing skills and techniques will be sameDifference will be the environment within whichmarketing plans are implemented.

Psychic distance

Unfamiliar problems variety of strategiesneeded

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International Marketing- Definition

International Marketing is the process of planning &

undertaking transactions across national borders tocreate exchanges that satisfy the objectives ofindividuals and organizations . (Czinkota andRonkainen, 2002 p. 4)

International Marketing is the performance of businessactivities designed to plan, price, promote, and directthe flow of a companys goods and services toconsumers or users in more than one nation for aprofit. (Cateora and Graham, 1999, p.6)

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Layers of Different Environmentsin International Marketing

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Controllables and Uncontrollables

Controllables Marketing mix

Uncontrollables (domestic environment)

(a) Political/legal forces

(b) Competitive structure

(c) Economic climate

Uncontrollables (foreign environment)

(a) Political/legal (b) Cultural (c) Level oftechnology (d) Competitive forces (e) geography& infrastructure

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2. Obstacles to Adaptation

The key to successful international marketing isadaptation to the environmental differences from onemarket to another.

Primary obstacles to success in international marketing:

SRC

Associated ethnocentrism

SRC is an unconscious reference to

ones own cultural values,

experiences, and knowledge as a

basis for decisions.

Ethnocentrism is the notion that

ones own culture or company knows

best how to do things.

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The Self-Reference Criterion

Dangers of the SRC:

Failing to recognize the need to take action

Discounting the cultural differences that existamong countries

Reacting to a situation in a way offensive to yourhosts

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The Self-Reference Criterion and Ethnocentrism

Ethnocentrism and the SRC can influence anevaluation of the appropriateness of a domesticallydesigned marketing mix for a foreign market.

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3. Stages of internationalmarketing involvement

Evolutionary perspective of global marketing

(a) Domestic marketing

(b) Export marketing

(c) International marketing

(d) Multinational marketing

(e) Global marketing

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Stages of International Marketing Involvement

No direct foreign marketing: a company at this stagedoes not actively cultivate customers outside nationalboundaries.

Infrequent foreign marketing: temporary surplus causedby variations in product demand may result in infrequentmarketing overseas.

Regular foreign marketing: at this stage firmspermanently produce goods which are sold on acontinuing basis in foreign markets.

International marketing: at this stage, firms are fullycommitted and involved in international marketingactivities. Specifically, firms sell products that are aresult of planned production for markets in variouscountries.

Global marketing: at this stage, firms treat the world,including their home market, as one market.

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4. From International to Global; marketing(EPRG framework)

Ethnocentric Home country superior

Polycentric Each host country is unique

Regiocentric Similarities and differences in world

regionsGeocentric World view similarities anddifferences in home and host countries

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Strategic Orientation

Domestic market extension orientation:

Firms with a domestic market extension orientationview their international operation as secondary to and

an extension of their domestic production.Multidomestic market orientation:

Firms that have a multidomestic market orientationmarket on a country-to-country basis, with separatemarketing strategies for each country.

Global market orientation:

Firms that have global market orientation are referredto as global firms. Their marketing activities areglobal, and their market coverage is the world.

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Motivating Factors

Strong overseas market potential

Saturation of domestic markets

Strategic reasons

Global Marketing

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The process by which firms operate on a globalbasis, organising their structure, capabilities,resources and people in such a way as toaddress the world as one market.

Global Firm: A firm that, by operating in morethan one country, gains R&D, production,marketing and financial advantages that are notavailable to purely domestic competitors.

Globalisation

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Global Firm: An Example

BHP Billiton

38000 employees in around 25 countries.

Headquarters in Melbourne, corporate centresin South Africa and USA.

Market capitalisation was US$122.5 billion(August 2006).

industry leader/near industry leader positionsin major commodity businesses

(e.g., aluminium, coal, copper, ferro-alloys,iron ore and Titanium minerals).

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Key Drivers of Globalisation

Global consumers

Technological advancements

Role of government

Worldwide dedication to trade

Deregulation of financial markets

Transnational Corporations (TNCs)

Meloan (1998)

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Australian export growth

Where will Australias export growth come from over thenext 10 years? ABS statistics BRW article Destination:Asia (2003) Vol 25 No 6

Asia 53% of total exports up from 17% a decade ago 57% in 2010 predicted

Three of top four destinations are from Asia Eg: Japan,South Korea, China

Middle East - fast growing

USA fast growth expected

Still only 4% Australian firms are exporting

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Trade In Goods And ServicesAustralia's top 5 export markets 2007-08

Goods Services Total % share RankJapan 34,936 2,498 37,434 16.1 1

China 26,927 4,433 31,360 13.5 2

USA 10,604 5,871 16,475 7.1 3

Korea 14,250 1,887 16,137 7.0 4

UK 8,309 4,723 13,032 5.6 5

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From Lucky country to Clever country

Traditionally, agricultural, mineral and energyproducts exporter recent resource boom

Traditionally imported sophisticatedmanufactures - In recent years - lesssophisticated manufactures that can be producedmore cheaply in other countries

A growing percentage in services Eg: tourism,international education, computer software, andother advanced activities

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5. Concepts underlying InternationalMarketing

Comparative Advantage

is based on the notion that a country shouldfocus on what it does best, rather than tryingto produce everything...

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Product Life Cycle Extension

Products proceed through stages of life(a) Introduction (b) Growth (c) Maturity (d) DeclineRelates to a phase in a particular marketExtend life cycle by exporting to an immature overseasmarket.

Concepts underlying InternationalMarketing

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Relationships and Networks

An added determinant in entering a internationalmarketReductions in perceived risk

through network linkagesby ensuring compatibility in aspirations

Role of strategic alliances

Concepts underlying InternationalMarketing

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Country Notebook

Over the first six weeks develop a CountryNotebookDraw on lecture material, chapters and other

recommended readingsDevelop the criteria under which you assess thecultural, economic and market factors needed toreview the targeted country for the major projectGuidelines Cateora & Graham (2007)