Thought for the day:

International marketing 4.7

Target Learning Objective Who?Keywords  Understand the different way of entry into international markets. ALL 4 (AO1)  Global marketing  International marketing  Exporting  Direct Investment  Analyse given situations considering the cultural, legal, political, social and economic issues of entering international markets. MOST 5 (AO2 & 3)  Evaluate the opportunities and threats posed by entry into international markets. SOME 6-7 (A04)

International and Global marketing International Marketing The marketing of a firms products in foreign countries Global marketing An extension of international marketing Selling the same product – using the same marketing approach throughout the world

International Marketing The marketing of a firms products in foreign countries Need to deal with external factors & Constraints (Politics, laws, cultures vary) Need to change market mix to suit local markets CULTURE!

Global Marketing The global marketing approach involves selling the same product with the same marketing strategy the world over. Marketing strategies across boundaries (Marketing suits different cultures)

Global Marketing Mc Donald ’ s aims to create the same brand identity for its products the world over. Individual elements of the marketing mix may be adjusted slightly to suit local conditions but the general thrust of the marketing strategy does not vary from region to region.

Global Marketing Modern communication and travel have created a situation where consumers of all nationalities are developing common habits and wants. Brands such as Levi’s Sony, Mc Donald’s and Coco Cola are available everywhere. The result is a global mass market for standardised consumer products.

Global Marketing Global Marketing is therefore just an example of mass marketing but on a larger scale.

The Benefits of Global Marketing A global approach to marketing will increase the potential size of the target market. If the marketing strategy proves to be successful the rewards are massive in terms of sales volumes and profits. Western businesses such as Volkswagan and Tesco have targeted the undeveloped markets of Eastern Europe for this very reason.

The Benefits of Global Marketing In markets where product differentiation is low survival against international competitors may require cost-reducing economies of scale. Global competition has also created sever pricing pressures. Firms selling a mass market product need to think globally just to survive.

The Benefits of Global Marketing Standardising a marketing strategy can help to cut costs. Selling the same product in the same manner everywhere, advertising and packaging costs need not be duplicated. Mars the confectionery manufacturer renamed their famous Opal Fruit brand Starburst for this very reason.

International and Global marketing Globalisation and the aggressive growth strategies of large multinationals have promoted the increased use of international marketing strategies. Due to the growing presence of foreign competitors, businesses are finding it increasingly important to consider the opportunities and threats of international marketing.

Entry into international markets Internal methods Exporting Direct investment E-Commerce External Methods Joint ventures Strategic alliances Franchising Merges Acquisitions

Benefits of International marketing Capture a wider customer base – untapped market potential Bring across a successful business model (worked in one country might work in another) Economies of scale Increased brand recognition Spread the risks – reduces dependency on sales in the home market. Extended product life cycle Gain more profit

Issues relating to international marketing Language & Cultural barriers – could lead to less efficient Different markets may require significant product modification and cost increase. Ethics Legal issues Political issues (trade barriers: Quotas, tariffs, Embargoes, Administrative barriers, Subsidies) Social & demographic issues Economic issues Further Threats: Competition from local producers (may be strong) product may not be successful in the new market Should have researched and done a SWOT) Exchange rate volatility & capital controls

Tip Check advantages and disadvantages against pg 221 of course companion.

Market mix – international context IB Course companion pg 221 Product - Some countries have very different needs, products can’t be the same format. You complete….. Place – Promotion – Price -

Activity  In a group  Discuss 1.Examine the reasons why do businesses choose to expand overseas. 2.Evaluate potential dangers in doing so.

Exam Question  Individually  Level 4  Peer Assess  Teacher Assess Nov 2006 SL paper Q1 (c) Q2 (b) Level 4 Discussion: ‘Investigate by reasoned argument.’ -”After considering both sides, in my opinion it would be…”