Chapter 1 - The scope and challenge of international marketing. What you should learn from chapter 1: The benefi ts of international markets, the changing face of U.S. business, the scope of the international marketing task, the importance of the self-reference criterion (SRC) in international marketing, the increasing importance of global awareness, the progression of becoming a global marketer.
International Marketi ng 14th Edition P h i l i p R C a t e o r a M a r y C G i l l y John L Graham The Scope and Challenge of International Marketing Chapter McGrawHill/Irwin International Marketing 14/e Copyright © 2009 by The McGrawHill Companies, Inc. All rights reserved Chapter 1: What Should You Learn? • The scope of the international marketing task • The importance of the self-reference criterion (SRC) in international marketing • The progression of becoming a global marketer • The increasing importance of global awareness • States of international marketing involvement Strategic orientation of international marketing Copyrightâ2009byTheMcGrawưHillCompanies,Inc.Allrightsreserved. AdaptedbyHoaPham 1-2 Discussion • What is Marketing? What is International Marketing? • What are the most important and fundamental thing in Marketing? • Why doing business outside the firm’s country? • What are the major advantages and disadvantages of international marketing? • Multinational Company vs Global Company? • Self-Reference Criterion vs Ethnocentrism? • Global Awareness 1-3 1.What is Marketing? – The American Marketing Association: “Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” – Essentially: ► Marketing deals with identifying and meeting human and social needs It is essentially about “meeting needs profitably.” Marketing – basic model Target Customers Capability Product Price Place Promotion Value Company Need Physical Emotional Competition Quality Price Competitors What is Marketing Management? Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value 1- Marketing Management Tasks • Develop market strategies and plans • Capture marketing insights • Connect with customers • Build strong brands • Shape market offerings • Deliver value • Communicate value • Create long-term growth 2.International Marketing • Performance of business activities designed to – – – – Plan Price Promote, and Direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit 1-8 The International Marketing Task Exhibit 1.3 1-9 The International Marketing Task Controllable factors o Corporate resources, structures, and core competencies that can limit or promote strategic choices o 4Ps, channels-of-distribution, research activities to capitalize on anticipated demand 1-10 Summary • The internationalization of American business is proceeding with increasing pace • The globalization of markets and competition necessitates all managers to pay attention to the global environment • International marketing is defined as the performance of business activities across national borders 1-41 Summary • Environmental differences must be taken into account if firms are to market products and services at a profit in other countries – Laws – Customs – Cultures • Self-reference criteria and ethnocentrism limit international marketer’s abilities to understand and adapt to differences prevalent in foreign markets 1-42 Summary • Solutions to SLC and ethnocentrism – Global awareness – Sensitivity • Strategic orientations found among managers of international marketing operations – Domestic market extension orientation – Multidomestic market orientation – Global market orientation 1-43 The Value Chain (Porter) Standardization vs Adaptation debate Standardization Customization Contingency Trends Homogenous market need: information, communication, transportation, technology development Economies to scale, scope, learning curve Different needs in different countries due to culture, language, economic development level, political, legal, customer value and life styles Better satisfy local need Source of differentiation S and C are two extreme of one continuum S and C is very situationspecific issue Company has to position itself in the continuum Marketing aspects Global group of customer: global citizen, global language (English), global market (Triad) Standardization of marketing program is essential to compete in global market (high quality product at a competitive price) Marketing program is largely a local issue and the best course of action for a product ought to differ from market to market depends on internal and external factors: target market, market position, nature of product, environment, and organization factors Globalization Drivers (Total Global S trate gy II, Goe ge Y ip) Market Drivers Cost Drivers Industry Globalizatio n Government Drivers Market Drivers • Homogeneous needs • Global customers • Global Language • Global Culture • Global Currency • Global Channels • Transferable marketing Costs Drivers • Economies of scale and scope • Learning and experience • Sourcing efficiencies • Favorable logistics • Differences in country costs and skills • Product development costs Government Drivers • Favorable trade policy • Compatible technical standards • Common marketing regulations Competitive Drivers • Interdependence of countries • Competitors globalized or might globalize The concept of Inter Linked Economy (ILE) - Kenichi Ohmae • Global business has become more and more important and vital for nations, industries, and firms Nation can no longer close it door and applies protectionism Nations and citizens around the world are more interlinked than ever before, giving greater opportunity to a borderless world • Trends leading to borderless world: global citizen, global language (English), global products, and global competitors The concept of Inter Linked Economy (ILE) - Kenichi Ohmae • ILE – Interlinked economy of the Triad, which consists three major players in global marketplace, i.e US, Europe, and Japan (now expand to be Latin American, Europe, and Asia) Interdependencies of economy create opportunities and basic security • The policy objective for ILE will be ensuring the free flow of information, money, and services, as well as the free migration of people and corporations • ILE has become so powerful and has made the national borders almost invisible (borderless world) Participation in the ILE is the key to prosperity for traditional isolationist nations Discussion Questions • What are the basic goals of marketing? Are these goals relevant to global marketing? • What is meant by “global localization?” Is Coca-Cola a global product? Explain Case Discussion McDonald’s Expand Globally While Adjusting Its Local Recipe • Q1 Identify the key elements in McDonald’s global marketing strategy In particular, how does McDonald’s approach the issue of standardization? • Q2 Do you think government officials in developing countries such as Russia, China and India welcome McDonald’s Do consumers in these countries welcome McDonald’s? Why or why not? • Q3 Is it realistic to expect that McDonald’s – or any wellknown company – can expand globally without occasionally making mistakes or generating controversy? Why antiglobalization protesters around the world frequent target McDonald’s? Homework • Read Chapter Cultural Dynamic • Quiz will be done in the 3rd week ... these factors impact on MNCs’ marketing strategy? 1- 1 1 The International Marketing Task 12 The International Marketing Task 13 The International Marketing Task 14 Case 1- 1 Starbucks – Going Global... directors 1- 2 4 Stages of International Marketing Involvement • No direct foreign marketing • Infrequent foreign marketing • Regular foreign marketing • International marketing • Global marketing 1- 2 5... services to consumers or users in more than one nation for a profit 1- 8 The International Marketing Task Exhibit 1. 3 1- 9 The International Marketing Task Controllable factors o Corporate resources, structures,