Marketing in SME’s and MNE’s. A Case Study: the Celtic Tiger Economy Prof. Gavin K. L. Davis – BBS MBS MMII

Ireland in Europe Previously called the “Basket Case of Europe” Previously called the “Basket Case of Europe” Unemployment rates 16% (Avg 8%) Unemployment rates 16% (Avg 8%) Ireland Population just 1% of EU Ireland Population just 1% of EU GDP 1.45% of EU 15 (Gross Domestic product) GDP 1.45% of EU 15 (Gross Domestic product) Trade mainly with the UK Trade mainly with the UK Joined the EU in 1973 Joined the EU in 1973 Prof. Gavin K. L. Davis – BBS MBS MMII

Reasons for the Boom Many economists credit Ireland’s low Corporation tax as the reason Many economists credit Ireland’s low Corporation tax as the reason Transfer payments (4% GNP) Transfer payments (4% GNP) Membership of EU opened up markets Membership of EU opened up markets The EU aid was used to increase investment in education and infrastructure The EU aid was used to increase investment in education and infrastructure Ireland became attractive for foreign investors (FDI) Ireland became attractive for foreign investors (FDI) Prof. Gavin K. L. Davis – BBS MBS MMII

Reasons for the Boom Prof. Gavin K. L. Davis – BBS MBS MMII

Transfer Pricing Prof. Gavin K. L. Davis – BBS MBS MMII

International Marketing Changing Marketplace Changing Marketplace International marketing occurs when firms conduct transactions across borders International marketing occurs when firms conduct transactions across borders Improves Marketing Share and Profits Improves Marketing Share and Profits Domestic Marketing Strategies cannot be used internationally Domestic Marketing Strategies cannot be used internationally Strategies should fit the unique characteristics of each international market Strategies should fit the unique characteristics of each international market Prof. Gavin K. L. Davis – BBS MBS MMII

Investigate: Trade system regulations and restrictions Trade system regulations and restrictions Marketing objectives and policies before going overseas Marketing objectives and policies before going overseas Mode of entry Mode of entry Exporting/Joint ventures Exporting/Joint ventures Licensing - firms allow other businesses to use the manufacturing process, trademark, patent, trade secret, or other items of value for a fee or royalty Licensing - firms allow other businesses to use the manufacturing process, trademark, patent, trade secret, or other items of value for a fee or royalty Entering a new Market Prof. Gavin K. L. Davis – BBS MBS MMII

BCG Growth-Share Matrix Boston Consultancy Group developed this matrix to help firms entering new markets Used for Companies large enough to be organised into Strategic Business Units (SBU) Used for Companies large enough to be organised into Strategic Business Units (SBU) Displays the market growth rate vs market share Displays the market growth rate vs market share Market Share = Firm’s Sales / Total Market Sales Market Share = Firm’s Sales / Total Market Sales This method helps businesses allocate resources to different SBU’s This method helps businesses allocate resources to different SBU’s Prof. Gavin K. L. Davis – BBS MBS MMII

BCG Growth-Share Matrix Cash Cow: a business unit that has a large market in a mature, slow growing industry. Requires little investment & generates cash for other SBU’s Cash Cow: a business unit that has a large market in a mature, slow growing industry. Requires little investment & generates cash for other SBU’s Star: a business unit that has a large market share in a fast growing industry, requires investment. May become a cash cow in the future Star: a business unit that has a large market share in a fast growing industry, requires investment. May become a cash cow in the future Prof. Gavin K. L. Davis – BBS MBS MMII

BCG Growth-Share Matrix Question Mark: Business unit that has a small market share in a high growth market. They require resources to grow in the market but success is unknown Question Mark: Business unit that has a small market share in a high growth market. They require resources to grow in the market but success is unknown Dog: Small market share in a mature industry. May need a lot of cash but ties up capital. Unless it has some strategic purpose, a dog should be liquidated Dog: Small market share in a mature industry. May need a lot of cash but ties up capital. Unless it has some strategic purpose, a dog should be liquidated Prof. Gavin K. L. Davis – BBS MBS MMII

BCG Growth-Share Matrix Prof. Gavin K. L. Davis – BBS MBS MMII

BCG of Prof. Gavin K. L. Davis – BBS MBS MMII Playstation 3 Columbia Pictures MP3 Playstation 2

P.E.S.T.E.L. Framework Political: Worldwide, European and Government directives Political: Worldwide, European and Government directives Economic: Funding mechanisms and streams, internal funding models, budgetary restrictions, income generation targets Economic: Funding mechanisms and streams, internal funding models, budgetary restrictions, income generation targets Social: General lifestyle changes, changes in populations, distributions and demographics Social: General lifestyle changes, changes in populations, distributions and demographics Prof. Gavin K. L. Davis – BBS MBS MMII

P.E.S.T.E.L. Framework Technological: Major current and emerging technologies, research or administration Technological: Major current and emerging technologies, research or administration Environmental: Local, national and international environmental impacts, outcomes of political and social factors Environmental: Local, national and international environmental impacts, outcomes of political and social factors Legal: European and national proposed and passed legislation Legal: European and national proposed and passed legislation Prof. Gavin K. L. Davis – BBS MBS MMII

Internal Assessment of the Organisation Strengths A distinctive competence A distinctive competence Location advantages Location advantages Technology Technology Economies of Scale Economies of Scale Cost Advantages Cost Advantages Proven Management Proven Management Financial Resources Financial ResourcesWeaknesses No Strategic Direction No Strategic Direction Weak Image Weak Image No R&D No R&D Lack of Mgt Lack of Mgt Poor record Poor record Competitive Disadvantage Competitive Disadvantage Competitive pressure Competitive pressure Prof. Gavin K. L. Davis – BBS MBS MMII

External Assessment of the Organisation Opportunities Additional customers Additional customers Entering a new market Entering a new market Diversifying business Diversifying business Weaknesses of others Weaknesses of others Expanding ranges of products and/or services offered Expanding ranges of products and/or services offeredThreats Entry of competitors Entry of competitors Growing Substitutes Growing Substitutes Government Policy Government Policy Vulnerability to Economic pressures Vulnerability to Economic pressures Power of customers Power of customers Power of suppliers Power of suppliers Demographics Demographics Prof. Gavin K. L. Davis – BBS MBS MMII

SWOT Analysis of Strengths ………………. ………………. Opportunities Weaknesses ………………… ………………… Threats Prof. Gavin K. L. Davis – BBS MBS MMII

Branding Brand is the visual, emotional, rational, and cultural image that you associate with a company or a product Brand is the visual, emotional, rational, and cultural image that you associate with a company or a product Makes your product selection easier Makes your product selection easier The fond memories of childhood and refreshment that people have when they drink Coke is often more important than a little bit better cola taste The fond memories of childhood and refreshment that people have when they drink Coke is often more important than a little bit better cola taste When you think of……………. When you think of……………. Prof. Gavin K. L. Davis – BBS MBS MMII

Branding Michael Jordan, “Just do it” Michael Jordan, “Just do it” Reliable, sporty, compfortable Reliable, sporty, compfortable Unreliable, bad quality, unsafe Unreliable, bad quality, unsafe Unhealthy/healthy, “I’m lovin’ it!” Unhealthy/healthy, “I’m lovin’ it!” Prof. Gavin K. L. Davis – BBS MBS MMII

Developing a Brand Start with your target market Start with your target market Age, Sex, Spending habits, price elasticity Age, Sex, Spending habits, price elasticity Communicate your Unique Selling Proposition (USP) Communicate your Unique Selling Proposition (USP) Look at your competitors Look at your competitors Are your customers labour intensive? Are your customers labour intensive? What emotional benifits do they expect? What emotional benifits do they expect? What stage is the market at? What stage is the market at? Prof. Gavin K. L. Davis – BBS MBS MMII

New Product Life-Cycle Prof. Gavin K. L. Davis – BBS MBS MMII

BEST Global Brands 2006 Prof. Gavin K. L. Davis – BBS MBS MMII

THANK YOU FOR YOUR ATTENTION, ANY QUESTIONS PLEASE ASK Prof. Gavin K. L. Davis – BBS MBS MMII