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International Marketing (8 Cfu) International Marketing (8 cfu) Osvaldo Adinolfi Stefano Pelle Michele Quintano 17/09/2012 Michele Quintano, 2012 Course objectives • Understand the nature of international marketing strategy and its linkages to corporate strategy vis-à-vis local and national marketing strategy • Develop analytical frameworks in the screening of national markets defining the key factors in the firm’s internationalization process by evaluating the international business environment, stressing particularly the economic and cultural dimensions • Discuss the complexities and paradoxes that are prevalent in so many successful and failing international marketing operations. • Explore the tensions in adopting a global standardized action as opposed to a locally responsive action in international marketing and relate these to the overall corporate strategy of companies • Consider ethical and social responsibility issues, in the development and implementation of an international marketing strategy Michele Quintano, 2012 Course content • Environment analysis • Country evaluation and selection • Segmenting international markets • Marketing research • Marketing in Emerging markets • Managing product and brand in international markets • Managing communication in international markets • Managing distribution in international markets • Pricing in international marketing • Planning, organisation and control of international marketing Michele Quintano, 2012 Teaching methodolgy • The case method will be used to illustrate applications of the strategies analysed and simulate decision-making in international marketing • Marketing faculty will lecture on key aspects of international marketing management • Course participants will be divided into groups of four- five and required to prepare and present the cases • Guest speakers • Case Studies: Mateus, Mango, IKEA, Coca Cola, Louis Vuitton, Unilever • Text book (one among others): Czinkota & Ronkainen, “International Marketing” • Readings Michele Quintano, 2012 Course calendar • Dates • Case studies • SEPTEMBER • Mateus: 18/09 • 17, 18, 24* and 25* • LV in Japan: 08/10 • OCTOBER • IKEA: 16/10 • 1, 2, 8, 9, 15, 16, 22, 23, 29 and 30 • MANGO (mid term): 23/10 • NOVEMBER • Coca Cola in Brazil: • 5, 6, 12, 13, 19, 20, 26 and 27 19/11 • DECEMBER • Unilever: 4/12 • 3 and 4 • Mon 12.30-14.30 • Tue 13.45-15.45 • * + 24 Sept 10.30-12.30 / 25 Sept 11.45-13.45 Michele Quintano, 2012 Grading system • Students attending the course will be evaluated on different criteria • The final grade will be based on the following elements • 10% student active participation • 25% group presentation of case studies and other group activities • 30% course mid term case study • 35% final project (individual) Michele Quintano, 2012 Introduction to International Marketing ü What is International Marketing? ü Reasons for internationalisation ü Strategic development: options ü International Marketing orientations ü Globalisation and standardisation Michele Quintano, 2012 Some definitions…. • International Marketing is the process of planning and conducting transactions across borders to create exchanges that satisfy the objectives of individuals and organisations (Czinkota & Ronkainen, “International Marketing”) • International Marketing Management: The performance of marketing activities in two or more countries (Jeannet & Hennessey, “Global Marketing Strategies”) • International Marketing: Finding out what consumers want around the world and then satisfying these wants better than other competitors, both domestic and international (Terpstra & Sarathy, “International Marketing”) • International Marketing: The performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit (Cateora, “International Marketing”) Michele Quintano, 2012 Is it so easy to manage? Some cliché Police English Cooks French Paradise Lovers Italians Organizers Germans Police French Hell Cooks English Lovers Germans Organizers Italians Michele Quintano, 2012 Mistakes in int’l marketing • Ronnie McDonald in Japan • Two litres Coca-Cola bottles in Spain • Philips electric shavers and coffee machines in Japan • Kellog’s Pop-Tarts in UK • P&G Crest in Mexico using the same US adv • Puma and Nike in Europe • ... Michele Quintano, 2012 4 pitfalls handicap global marketing • Insufficient research • Overstandardisation • Poor follow-up • Rigid implementation (Source: Kamran Kashani, “Beware the Pitfalls of Global Marketing”) Michele Quintano, 2012 What makes int’l marketing different? The key difference is the ‘environment’ • unfamiliar problems, uncertainty, competition, legal restraints, government controls, consumer behaviour, technology, economic climate, • recognising and adapting to the new environment • adapting the controllable elements (the marketing mix) to the uncontrollable elements of the foreign environment Michele Quintano, 2012 What makes int’l marketing different? OPERATIONS IN A MULTI-COUNTRY CONTEXT Different Environments Economic/Financial Political/Legal Social/Cultural Differences in Customer Behavior/Market Segments Differences in Competition Different Marketing Infrastructures Media Distribution Logistics Therefore, is there a NEED to adjust to these differences? Balance global efficiency with local responsiveness Michele Quintano, 2012 Reasons for internationalisation • Opportunistic development • Following customers abroad • Pursuing geographic diversification • Cost reductions: economies of scale and experience curves • Better pay-off on R&D investment • Incremental profits • Taking advantage of different growth rates of economies • Exploiting product life cycle differences • Defensive reasons • Gain leverage from competitive advantages • Learning from key success factors abroad • Pursuing potential market abroad • Improving the company image Michele Quintano, 2012 The international product life cycle theory Quantity Not all countries A adopt the countries products at the Time same time or Quantity follow the same B t evolution or countries pattern in their Time product life cycle Quantity C t’ countries Time Michele Quintano, 2012 A framework: growth options Markets Old New Old Market penetration Market development Products New Product development Diversification Source: Adapted from Ansoff (1965) Michele Quintano, 2012 A framework: growth options Markets New Domestic Old Market development Internationalization Globalization Products Vertical integration New Diversification Related business Diversification Unrelated business Source: Adapted from Ansoff (1965); Collis and Montgomery, 1997; Strategor, 1995 Diversification Michele Quintano, 2012 International Marketing orientations Export Marketing Multinational Global Marketing Attitude Ethnocentric Polycentric Geocentric The local market Markets are very Markets converge, is the priority. different and require demands are more Perspective Extends or independent and more similar. replicates the marketing programs. The world is seen as marketing Products are adapted a single market. activities • Select • Understand different • Find similarities appropriate local environments • Design strategies Key markets • Find the best fit for that work in all managerial • Find distributors each market countries issues • Delivery issues • Solve coordination • Manage global (documentation, and resource Marketing: “Think shipments, duplication global, act local” logistics) problems “ What is good “When in Rome, “After all, we are Focus for us is also good for do as the Romans all the same” everybody” do” Source: The author Michele Quintano, 2012 Globalisation does not mean standardisation “classics…” • HEINZ ketchup has a less sweet recipe in Belgium and the Netherlands because consumers use ketchup as pasta sauce. • DOMINO’S sells pizzas flavoured with mayonnaise and potato chips in Japan, raindeer-sausages in Iceland and pickled ginger in India. • GREEN GIANT adapts its advertising of canned sweet corn to the consumer habits related to the product: as a hot side dish (EEUU), as a salad ingredient (France), as a sandwich and pizza topping (United Kingdom), as an after-school treat for children (Japan) or as an ice-cream topping (Korea). • PEPSICO CHEETOS are cheeseless in China. The company picked a butter flavour (called American cream), an Asianized barbecue flavour (called Japanese steak) and a seafood flavour. Other flavours tested were Peking duck, fried egg and even dog. • LENOVO has 20 different keyboards in Europe for its personal computers. • UNILEVER sells one of its softener products with the same positioning, product image and advertising campaign but under different brand names (Mimosín, Snuggle, Cajoline, Kusheleich, Yumos, Coccolino, Fofo) and in different sizes and packagings. Michele Quintano, 2012 Driving forces Barriers for international trade to international trade • Market homogeneity • Market heterogeneity • Need to reduce costs • National controls • Spread of technology and reduction of lead time for • Corporate culture R&D investment payback • Brand history • Development of • Corporate communication and management myopia transport systems • Progressive reduction of protectionism Michele Quintano, 2012 Factors limiting standardisation • Market characteristics: physical environment, stage of economic and industrial development, cultural factors, language • Industry conditions: stage of product life cycle in each market, competition • Marketing institutions: distribution systems, advertising media and agencies •
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