THE CONCEPT OF INTERNATIONAL MARKETING MANAGEMENT VS GLOBALIZATION 12/9/2018

Globalization The shift towards a more integrated and interdependent world economy. Two components: .The globalization of markets. .The globalization of production. 12/9/2018

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Forces Affecting Global Integration Restraining Forces Driving Forces Culture Technology Market Differences Culture Costs Market Needs National Controls Cost Free Markets Nationalism Economic Integration War Peace Management Myopia Management Vision Organisation History Strategic Intent Domestic Focus Global Strategy & Action 12/9/2018

Being Globally Aware  To be Globally Aware is to be:  Objective  Tolerant of Cultural Differences  Knowledgeable of:  Cultures  History  World Market Potentials  Global Economic, Social and Political Trends 12/9/2018

Stages of International Marketing Involvement 1. No Direct Foreign Marketing 2. Infrequent Foreign Marketing 3. Regular Foreign Marketing 4. International Marketing 5. Global Marketing 12/9/2018

Trends in Global Business Countries are striving to integrate Businesses: EU EAC SADC COMESA NAFTA Etc This suggests a need for global thinking 12/9/2018

New and Future (Possible) Multinational Market Groups or Trading Blocks of the 21st Century  European Union  European Economic Area (EC and EFTA)  North American Free Trade Area  Southern Cone-Mercosur  Asean Free Trade Area (AFTA)  Commonwealth of Independent States (CIS)  Central European Free Trade Area (CEFTA) 12/9/2018

INTERNATIONAL MARKETING? So……. WHAT IS INTERNATIONAL MARKETING? 12/9/2018

INTERNATIONAL MARKETING “Marketing carried on across national boundaries” Vern Tepstra 12/9/2018

International Marketing: The 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 profit. Philip R. Cateora John L. Graham 12/9/2018

The International Marketing Task 7 Foreign environment (uncontrollable) 1 Political/legal forces Economic forces Domestic environment (uncontrollable) 2 7 Competitive structure Political/ legal forces (controllable) Competitive Forces Cultural forces Price Product Environmental uncontrollables country market A 3 Channels of distribution Promotion Environmental uncontrollables country market B 6 Level of Technology Geography and Infrastructure Economic climate Environmental uncontrollables country market C 4 5 Structure of distribution 12/9/2018

International Marketing Concepts Concept EPRG Scheme Domestic Market Extension Ethnocentric Multi-Domestic Market Polycentric Global Marketing Regionocentric/ Geocentric 12/9/2018

A Comparison of Assumptions About Global and International Companies Application Global Companies International Companies Products are in different stages of the product life cycle in each nation. Product Life Cycle Global product life cycles. All consumers want the most advanced products Adjustments to products initially designed for domestic markets. Design International performance criteria considered during design stage. Products are adapted to global wants and needs. Restrained concern for product suitability. Products adaptation is necessary in markets characterized by national differences. Adaptation Market Segmentation Segments reflects group similarities. Group similar segments together. Segments reflect differences Customized products for each segments. Fewer standardized markets. Expansion of segments into worldwide proportions Many customized markets. Acceptance of regional/ national differences. 12/9/2018

A Comparison of Assumptions About Global and International Companies Application Global Companies International Companies Domestic / national competitive relationships Competition Ability to compete in national markets is affected by a firm’s global position Standardization limited by requirements to adapt products to national tastes.. Production Globally standardized production. Adaptations are handled through modular designs. The Consumer Global convergence of consumer wants and needs. Preferences reflect national differences. Products differentiated on the basis of design, features,functions, style and image. Product Emphasis on value-enhancing distinction. Consumers willing to pay more for a customized product Price Consumers prefer a globally standardized good if it carries a lower price 12/9/2018

A Comparison of Assumptions About Global and International Companies Application Global Companies International Companies National product image, sensitive to national needs. Promotion Global product image, sensitive to national differences and global needs. Place Global standardization of distribution. National distribution channels. 12/9/2018

Self Reference Criteria (SRC): Represents viewing rest of the world from the perspective of home market. 12/9/2018

Cross Cultural Analysis to Isolate the SRC Influences Step 1: Define the business problem or goal in home- country cultural traits, habits, or norms. Step 2: Define the business problem or goal in foreign-country cultural traits, habits, or norms. Make no value judgements. Step 3: Isolate the SRC Influence in the problem and examine it carefully to see how it complicates the problem. Step 4: Redefine the problem without the SRC influence and solve for the optimum business goal situation.* 12/9/2018

Framework of International Marketing Commitment to Exports Analyse Internal Factors Products Resources External Factors Market Environment Competition Decide Target Market Entry Method Marketing Strategy Set 12/9/2018

Target Implement Organise Allocate Resources Department Budget Subsidiary Joint Venture Allocate Resources Budget Arrange Resources Export Review Modify Set New Targets 12/9/2018

Finally ‘Companies which will not accommodate the concepts of internationalization are destined to fail. The question is not whether they will fail or not but just when they are going to fail’ Elisante ole Gabriel, 2005 12/9/2018