INTERNATIONAL MARKETING

2 categories of occupations in international marketing

• Strategic occupations (ppl working on market analysis)

• Operational occupations (ppl working on marketing plan)

3 skills required in international marketing

• Be able to listen to local teams/customers

• Have an analytical mind regarding competitors => if there are too many competitors, it won’t work.

• Be able to anticipate sociological evolutions

4 specificities of the international marketing director

• Formulates main outlines of international marketing policies and ensures they are respected.

• Supports the salesforce on the international market and measures the results (reporting, sales conference).

• Bringing his knowledge of the target market.

• Knows the local market characteristics (cultural, economic and political specificities) in order to include them in marketing tools.

= supervises the product’s managers, surveys & promotion.

=sense of diplomacy, communication, analysis, deductive skills, deals w/ figures and stats, fluent in EN, good knowledge of history, cultures and traditions.

3 specificities of the market researcher

• Analyses the market’s evolution and the environment of the company => adapt the products/services to the customer’s needs

• Readjusts the marketing plan, collects info (statistics, sociological & customer surveys...)

• Formulate recommendations thanks to the data collected.

= autonomous, stats, software, communication, cultural and linguistic knowledge.

3 specificities of the product manager

• Responsible for the product adaptation according to evolution and opportunities of the global market.

• Contributes to the dev of a product + communication abroad.

• Can decide to remove a product from a market.

• Objective : ensure the best profitability of the specific product.

• Challenge : adapt these products to the international markets and to the target customers segment.

• Creates a global marketing plan w/ actions suitable for each potential target country/segment.

• Knows the product’s characteristics with the data collected by the market researcher.

= creative, listen to the sales agents, analyses their info, fluent in EN, able to coordinate, sense of responsibilities.

Definition of international marketing

“Process of building lasting relationships through planning, executing and controlling the conception, pricing, promotion and distribution of ideas, goods, and services to create mutual exchange that satisfies individual and organizational needs and objectives.” – Steve Carter.

= marketing state of mind : satisfy needs and make profits.

Evolution of international marketing

Ancient : trade routes (silk road btwn East and West, exchange of goods and idea).

Exploration and colonialism : new markets, raw materials acquisition and extraction.

Industrial Rev and Mass Production : standardized products, mass production. Global expansion beyond domestic markets to expand their customer base.

Post WW2 and globalization :

• economic recovery thnaks to international trade.

• Global integration (GATT and WTO).

• Debate btwn standardizing products for global markets or adapting them to local preferences.

• Technological advancements in transportation, communication, info, tech.

Digital Age :

• E-commerce : global audience thanks to the internet.

• SocMed : connecting w/ customers worldwide.

• Data analytics : ability to analyze data has transformed how markers understand and target customers.

4 stages of globalization

① Exporting stage : selling goods produced in home country to foreign markets.

② International marketing stage : beginning of a more sophisticated approach to international marketing, which considers factors such as cultural diff, consumer behavior, competitive dynamics.

③ Multinational marketing stage : rise of multinational corpo, operated in several countries.

④ Global marketing stage

6 key trends shaping modern international marketing

֎ Globalization/regionalization : increasing interconnectedness of economies and cultures

֎ Cultural sensitivity : understanding and respecting cultural differences is crucial

֎ Sustainability : consumers and businesses are increasingly concerned about environmental impact.

֎ Digital transformation : embracing digital technologies to reach and engage customers.

֎ Market segmentation : identifying specific target markets within a global context.

֎ Global competition : intense rivalry among businesses operating on a global scale.

4 reasons for internationalization

Environmental influence : getting easier in the EU to sell products to other European countries => less taxes, helps to go abroad.

Business factors : seasonal products, improve image, product life cycle => depending on when you launch your product, there are different tendencies => analyze reactions during growth => maturity => decline. Better to launch products abroad during the maturity phase.

Industrial factors : improve price competitiveness, produce in higher quality, lower unit cost & take advantage of the experience.

Human factors : different skills, international expertise => find the best people abroad.

6 consequences to take into account when internationalizing

֎ The commercial policy needs to be reconsidered.

֎ Search for new resources and skills : need specific skills in people.

֎ Organizational changes : export department, subsidiary directly in the target country to be closer to your customers.

֎ New possible financial risk : return investment hard to make, lots of money spent.

֎ Legal framework possibly different

֎ Business culture challenges : how business is done in a specific country.

5 key reasons for failures of internationalization

֎ Cultural misunderstandings : failing to adapt to local customs, preferences and behaviors.

֎ Competitive landscape : strong local competitors => underestimating their capabilities.

֎ Economic factors : fluctuating exchange rates, economic downturns, high inflation can impact profitability.

֎ Regulatory challenges : navigating complex legal and regulatory environments.

֎ Supply chain issues : difficulty in establishing efficient distribution networks.

Stages of international development

Irregular opening : when going to sell for one or more markets abroad => small and irregular sales abroad.

Regular business : export sales account for around a quarter to a third of the company’s turnover.

Internationalization : the company becomes a multinational, ex : it has at least 2 establishments abroad w/ its own legal personality

Advantages of a multinational :

• Cost advantages (the company benefits from comparative costs btwn countries : labor, taxes, ect…)

• Greater competitive capacity : international brand image

Globalization : ultimate stage in international openness => the local market no longer represents more than a tiny fraction of its business activities. The globalized multinational is structured into regional geographic sub-groups => excels in one or more businesses and aims for leadership in each.

How can a company asserts its presence abroad ?

• Exportation : direct & indirect exportation

• International locations : sales offices & industrial facilities

• Know-how transfer : franchising & licensing

Direct exportation

The company has its own export department which handles most export-related activities.

• Definition : you sell products or services directly to foreign customers.

• Advantages : higher profit margins, and independence from third parties.

• Best for : beginners serving neighboring countries w/ similar language and culture.

Also e-business : sell products or services online to customers in foreign markets.

• Advantages : low barriers to entry, global reach.

• Best for : companies w/ products or services that can be easily sold online.

4 types of indirect exportation

• Salaried sales representative : physical contact for complex products, can be adapted to the needs of each customers to ensure long-time sales. Employed by your company, not independent => research market information (benchmarking), make inspection visits, take part in trade fairs and so on.

• Sales agent : independent and bound to the company by an agency contract, exclusive or multi brand. The agent acts on behalf of the exporter in a given territory. The agent is paid by a commission on sales and is free to set up his own organization. The exporter remains legally the seller and is responsible for fulfilling orders and making deliveries.

• Shared exports : exporting enable small companies to become involved in exporting.

• Piggy-back : a large company already established in a foreign market allows a SME (Small and Medium-sized Entreprise) to benefit temporarily from its structure and xp.

Indirect exportation

Intermediaries (agents, distributors) to sell your products in foreign markets.

• Advantages : lower risk, access to local expertise.

• Best for : companies entering new markets w/ limited resources or experience.

Benefits :

• Reduce costs : sharing shipping costs + other expenses.

• Market access : Piggybacking can provide access to new markets that might be difficult or expensive to reach independently.

• Sharing risks with a larger partner => reduce potential challenges and losses.

• Leveraging resources of larger partners.

4 types of sales offices

• The sales subsidiaries : legally independent company owned by a parent company based in another country. Operates under local laws and is responsible for selling and distributing the parent company's products or services in the foreign market. However, strategic decisions are taken by the mother company, which can thus determine and control its commercial policy.

• Representative office : non-commercial office established to coordinate marketing or research activities. Cannot engage in revenue-generating activities like sales or contracts. Does not have any legal personality of its own.

• The branch : an extension of the parent company, not a separate legal entity. Operates in a foreign country but is legally and financially tied to the parent company. Profits may be taxed both locally and in the home country.

• The importer : trader based in foreign country => buys to resell in his own name => assumes the commercial risk (poor sales or non-payment). In return, he is free to set his own prices, choose his customers, distribution channels and communications.

2 types of industrial facilities

• Industrial subsidiaries : justified by need of finding new sources of raw materials + desire to move closer to specific markets, to rationalize logistics, reducing production costs or the opportunity to bypass some protectionists barriers. Ex : Airstar produces in France and Florida to be closer to American markets + "made in America" label and avoid exchange rates (+ logistics costs) => distributes in the UK, Brazil and California.

• Joint ventures : strategic partnership where two or more companies (from different countries) collaborate to create a new business entity for a specific purpose, project or market. Each contributes resources (capital, technology, expertise, …) and shares ownership, profits and risks. Ex : Michelin joined forces w/ Indian company Apollo Tyres in the truck tire sector.

Benefits of joint ventures

• Shared resources : capital, technology, … => reduce costs and improve efficiency.

• Access to new markets that companies may not be able to enter on their own => grow their sales and reach new customers.

• Local knowledge : better understanding of the needs and preferences of local consumers.

• Reduced risk : sharing the risk with their partner.

Challenges associated with joint ventures => important for companies to carefully select their joint venture partner and to develop a clear agreement that outlines the rights and responsibilities of each partner.

Franchising (rights, duties, advantages & disadvantages)

RIGHTS	DUTIES
o   Independence o   Know-how transfer o   Business practices	o   Entrance fee o   Royalty on sales o   Respect for image o   Often limited to a geographical territory and subject to exclusive supply conditions

 

Advantages of franchising	Disadvantages of franchising
o   Reduced risk o   Brand recognition o   Systemized business model o   Access to capital o   Support from the franchisor	o   High upfront costs o   Limited control o   Bureaucracy o   Dependency on the franchisor o   Low profit margins

Licensing

The company grants the right to use a patent in return for a loyalty. Licensing can be a successful strategy for companies that have strong brands and products.

!!!! Important to carefully select licensees and to develop clear licensing agreements, to monitor licensees to ensure that they are using the brand and products in a way that is consistent with the company's image.

Ex : Licensing allows Starbucks to expand its reach without having to invest in its own infrastructure or operations. Starbucks licenses its brand to Nestlé, which sells Starbucks-branded coffee and tea products in grocery stores and other retail outlets. + licenses to sell Starbucks-branded merchandise

= several benefits for Starbucks => allows Starbucks to expand its reach without having to invest heavily in infrastructure and operations + can help Starbucks to generate new revenue streams + help to raise brand awareness and loyalty.

Differences between licensing and franchising

Franchising is a more comprehensive business model. Franchisors provide franchisees with more support and guidance, including training, marketing, and technical assistance. Licensees typically have more flexibility in how they operate their businesses, but they also have less support from the licensor.

Company’s resources and performances (Internal indicators to take into account when exporting)

• Performances : sales indicators (quantitative, evolution)

• Resources : financial, material, human

The 4 Ps (Internal indicators to take into account when exporting)

• Product : What are you selling ? => physical product itself, its features, benefits, branding, packaging, and any associated services. Problem-solving, uniqueness and quality.

• Price : How much do you charge ? => a price that covers your costs, generates profit, and is attractive to customers.

Exs : skimming price strategy (higher than your competitors), competitive-based & penetration strategy (lower than your competitors).

• Place : How do you distribute your product ? => the channels you use to reach your target market (physical stores, online sales, and distribution networks).

Direct distribution (directly to customers w/ online store, retail outlet) OR indirect distribution (intermediaries like wholesalers or retailers).

• Promotion : How do you communicate with your target market ? => using various marketing tools to create awareness, generate interest, and encourage purchases.

Exs : Advertising (TV, radio, print, or online), Public relations : Building pos relationships w/ media and public), Sales promotions (discounts, coupons) & Direct marketing (perso comm with customers (emailing)).

External indicators

• Country brief

• Macroenvironnement

• Microenvironment

Country brief

The population : nb inhabitants, demographic growth, ethnic groups, religions, languages, educ, life expectancy

Government : type, national day, legal system…

Economic : currency, rate of unemployment, inflation, import/export, GDP

Geographic : location, surface area, natural resources, climate

Transport and custom s: airports, roads, highway, harbour, customs formalities…

Macroenvironment

PESTEL : Politics, Economy, Social, Tech, Environement, Legal

- Observation of regulations, political situation, the laws in the target country.

- Identify the rules we must adhere (procedures,standardization, etc.).

- Consumer preferences trends.

Microenvironement (3 tools)

Sector analysis :

• Market analysis : evolution, situation, trends…

• Offer analysis : the competitors => who are they ? their advantages ? Who are the suppliers ?

• Demand analysis : customers and their behavior, sector potential

• Distribution channels : what kind of channels are used ? Is there any way to reach the target market ?

SWOT analysis : complete analysis of the company’s situation :

• Internal : assessment of the company’s strengths and weaknesses

• External : assessment of external opportunities and threats

Porter’s 5 forces : a model that analyses five competitive forces that shape every industry and helps determine an industry’s weaknesses and strengths.

• Intensity of rivalry => direct competitors. Ex : coffee => substitute products (not the same product, but in the same market => satisfy the same needs) => energy drinks => high threat because easy to substitute.

• Bargaining power of suppliers => is it high or low ?

• Strength of new entrance : high or low ? => can shift the balance of the market

• Bargaining power of customers : lots of competition => customers have the choice. Ex : Apple => hard to switch, loyal customers, different engineering.