MKT 305 Midterm 2 (Module 4 International Markets)

Module 4 International Markets

Proactive Motivations To Go Abroad

Profit Advantages

Unique Products

Tech Advantages

Exclusive Information

Economies of Scale

Reactive Motivations To Go Abroad

Competitive Pressure

Overproduction

Declining Domestic Sales

Excess Capacity

Saturated Domestic Markets

Proximity to Customers and Ports

Socio-Cultural Environment (Key International Environmental Forces)

-Includes Languages, Values, and Attitudes

-Marketing Managers need to account for these factors

Change Agents (Key International Environmental Forces)

Try to impress a local consumer the need to adopt a new product

Political/Legal Environment (Key International Environmental Forces)

Plays a Critical Role

World Trade Organization (WTO): The Institution That Administers International Trade/Investment Accords

Selecting An International Market (Steps)

Conduct Preliminary Screening

Determine Total Market Potential

Estimate Sales Potential

Select Optimal Segment Within Target Market

Diversification Strategy (Selecting An International Market)

Expansion to a Large Market

Concentration Strategy (Selecting An International Market)

Focus on a Small Number of Markets

International Market Entry Strategies

Indirect Import/Export (International Market Entry Strategies)

Intermediary Used To Deal With Foreign Customers and Firms

Low Management Commitment

Often Unintended/Unaware

Direct Import/Export (International Market Entry Strategies)

Controls International Activity Better

Can Lead to Growth with Trading Partners

Must Find Customers/Markets

Intermediaries (International Market Entry Strategies)

Importers/Exporters use them often

Export Management Company (EMC) (Salesman)

Trading Company (Offers more Services)

Licensing (International Market Entry Strategies)

Use of intellectual property for compensation

Low Capital Investment and Involvement

Capitalize on R&D

Can Create Competition

Franchising (International Market Entry Strategies)

Grant by Parent Company to do Business Independently

Sell Franchising using Name, Marketing Techniques, and Business Approach

Must Offer High Uniqueness with High Standardization

Foreign Direct Investment (FDI)

Full Ownership is Desirable but Often Impossible

Joint Venture: Collaboration Between 2+ Organizations

Share Assets, Risks, Profits

Partner Brings Local Expertise and Influence

Strategic Alliance (FDI)

Arrangement Between 2+ Companies with the same Common Goal

Flexible to Environmental Conditions

Pooling of Expertise

Contractual Arrangements (FDI)

Cross Marketing

Outsourcing (Replacing Existing Capabilities Abroad)

Contract-Manufacturing (Don’t have Capability, so have Someone Else Manufacture it)

Standardization (Tailoring the International Marketing Mix)

No adjustment one size fits all approach

Globalization (Tailoring the International Marketing Mix)

Regional Strategy (Asia, Latin America)

Multi-Domestic (Tailoring the International Marketing Mix)

Every Country has its Own Mix (More Expensive and Confusing)

Brand is inconsistent

Product Decisions (Tailoring the International Marketing Mix)

Design Considerations

Branding Considerations (Language)

Packaging Considerations (Can or Box?)

Labeling Considerations

Promoting Decisions (Tailoring the International Marketing Mix)

Positioning Considerations (Diet Coke or Coke Light?)

Copy Considerations (Pictures or Words?)

Distribution Decisions {Place} (Tailoring the International Marketing Mix)

Tactical Market By Market (Outlets for Products May Vary)

Developing Global Markets (Often Phased into New Markets with a Basic Product)

Pricing Decisions (Tailoring the International Marketing Mix)

Price Escalation: Tariffs, Product Modification, Taxes, and Operating Cost

Foreign Exchange Rates