Chapter 16: Global Marketing and Supply Chain Chapter 16 Global Marketing and Supply Chain International Business Oded Shenkar and Yadong Luo

Chapter 16: Global Marketing and Supply Chain Do You Know? How to determine market potential of a foreign country? What adaptations are necessary for a product to sell in another country? That there can be domestic manufacturing influence, translating to product demand? That channel decisions are very important in international marketing?

Chapter 16: Global Marketing and Supply Chain Marketing Domino’s Internationally Domino’s opened its first foreign store (Winnipeg) in Japan was in 1984; United Kingdom was in 1985, Mexico was in It hit Taiwan in 1987, and Hong Kong in Per store sales volume in Asia is more than twice the United States. Their secret: product adaptation (corn and squid on pizza??), pricing determination, national promotion and advertising, and customized transportation (the scooter in Asia).

Chapter 16: Global Marketing and Supply Chain The International Marketing Challenge International markets offer vast opportunities for firms with a product or service in high demand. Newness, cultural adaptation, attractiveness, and appropriate marketing strategies can help tremendously.

Chapter 16: Global Marketing and Supply Chain Assessing Market Potential To assess market potential, firms seek to identify the aggregate demand for a product and estimate the costs associated with product introduction and distribution. Population growth provides a coarse estimate of future market potential. So do consumption patterns.

Chapter 16: Global Marketing and Supply Chain Assessing Market Potential

Chapter 16: Global Marketing and Supply Chain Globalization and Localization in International Markets Striking a balance between globalization and localization is a key challenge. Generally, the more closely defines the market segment, the less important are national stereotypes (Germans and ecology, Italians on performance). Across national markets, there is a trend toward greater similarity on product specifications, price, and packaging. On the other hand, cultural and national differences exist and require flexibility in communication with customers.

Chapter 16: Global Marketing and Supply Chain Globalization Forces Global Brands (Kellogg’s, McDonalds, Budweiser, Coke) are products that enjoy worldwide recognition and are relatively unaltered in terms of brand and appearance when sold abroad.

Chapter 16: Global Marketing and Supply Chain Globalization Forces Exhibit 16-6: International decision making: more vs. less successful companies

Chapter 16: Global Marketing and Supply Chain Globalization Forces Exhibit 16-7: Shared vision about global marketing activities between country managers and global marketing groups

Chapter 16: Global Marketing and Supply Chain Globalization Forces Exhibit 16-8: Use of globally uniform marketing practices

Chapter 16: Global Marketing and Supply Chain Globalization Forces Exhibit 16-9: Strength of (selected) individual globalization drivers

Chapter 16: Global Marketing and Supply Chain Globalization Forces

Chapter 16: Global Marketing and Supply Chain Localization Forces Localization forces represent pressures towards adjustment in product marketing or distribution to make it more appealing or to meet requirements particular to a foreign market.

Chapter 16: Global Marketing and Supply Chain Product Adaptation Faced with a foreign market with different characteristics, a firm may choose not to offer a product or a service in that market, to offer the same product it offers in other markets, or to adapt it to regional or country requirements. The Benefit/Cost approach and the User/Needs approach help determine whether adaptation is necessary.

Chapter 16: Global Marketing and Supply Chain Product Adaptation McDonald’s Product Adjustments: The Veggie Mac (Switzerland), Chicken Rice (Singapore), no pork (Saudi), McMacos and McFiesta (Paraguay), McKroket (Netherlands), Teriyaki McBurger (Japan), Curry Pie (Hong Kong), McRoyal (Germany), McCafe (Argentina), McCafe (Australia), McPalta (Chile). Hey, you deserve a break today!!

Chapter 16: Global Marketing and Supply Chain Country-of-Origin Effect This is the influence of the country of manufacturing image on the buying decision. The effect consists of innovativeness; design; and workmanship. There is strong evidence that country of origin influences buyer’s decisions.

Chapter 16: Global Marketing and Supply Chain Branding Branding is the process of creating and supporting positive perceptions associated with a product or service. Branding is especially complex in the international market. Some issues: Selecting the right name Understand the local market Fine tune the size, price, value construct Quality/reliability at competitive price Holistic marketing using multiple channels …/…

Chapter 16: Global Marketing and Supply Chain Branding Turning trademarks into “trustmarks” Establishing leadership brands, and changing social habits Selecting allies and partners

Chapter 16: Global Marketing and Supply Chain Channel Decisions Export Intermediary choice is very important Direct Marketing is a potential channel Niche marketing is also very viable

Chapter 16: Global Marketing and Supply Chain Promotion It is important to choose the right mix marketing communications like advertising and direct marketing.

Chapter 16: Global Marketing and Supply Chain Marketing Alliances Marketing Alliances are frequently very important because they serve as partners in the marketing communications effort.