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 fourfive 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 <ul style="display: flex;"><li style="flex:1">•ꢀ Dates </li><li style="flex:1">•ꢀ Case studies </li></ul><ul style="display: flex;"><li style="flex:1">•ꢀ SEPTEMBER </li><li style="flex:1">•ꢀ Mateus: 18/09 </li></ul>•ꢀ LV in Japan: 08/10 •ꢀ IKEA: 16/10 •ꢀ 17, 18, 24* and 25* •ꢀ OCTOBER •ꢀ 1, 2, 8, 9, 15, 16, 22, 23, 29 and •ꢀ MANGO (mid term): 30 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 üꢀWhat is International Marketing? üꢀReasons for internationalisation üꢀStrategic development: options üꢀInternational Marketing orientations üꢀGlobalisation 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 Cooks Lovers Organizers English French Italians Germans Paradise Hell Police Cooks Lovers Organizers French English Germans 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 adopt the products at the same time or follow the same evolution or Acountries Time Time Quantity t Bcountries pattern in their product life cycle Quantity t’ Ccountries Time Michele Quintano, 2012 A framework: growth options Markets Old New Old Market penetration Market development Products New <ul style="display: flex;"><li style="flex:1">Product development </li><li style="flex:1">Diversification </li></ul>Source:Adapted from Ansoff (1965) Michele Quintano, 2012 A framework: growth options Markets New Domestic Internationalization Globalization Old Market development Products Vertical integration New Diversification Related business Diversification Unrelated business Diversification Source:Adapted from Ansoff (1965); Collis and Montgomery, 1997; Strategor, 1995 Michele Quintano, 2012 International Marketing orientations <ul style="display: flex;"><li style="flex:1">Export Marketing </li><li style="flex:1">Multinational </li><li style="flex:1">Global Marketing </li></ul>Attitude <ul style="display: flex;"><li style="flex:1">Ethnocentric </li><li style="flex:1">Polycentric </li><li style="flex:1">Geocentric </li></ul>The local market is the priority. Markets are very different and require independent Markets converge, demands are more and more similar. Perspective Extends or replicates the marketing marketing programs. The world is seen as Products are adapted a single market. activities <ul style="display: flex;"><li style="flex:1">•ꢀ Select </li><li style="flex:1">•ꢀ Understand different </li></ul>•ꢀ Find similarities <ul style="display: flex;"><li style="flex:1">appropriate </li><li style="flex:1">local environments </li></ul>•ꢀ Design strategies that work in all countries Key managerial issues markets •ꢀ Find distributors •ꢀ Find the best fit for each market •ꢀ Delivery issues (documentation, shipments, •ꢀ Solve coordination and resource duplication •ꢀ Manage global Marketing:“Think global, act local” <ul style="display: flex;"><li style="flex:1">logistics) </li><li style="flex:1">problems </li></ul>“What is good for us is also good for “When in Rome, do as the Romans do” “After all, we are all the same” Source:The author Focus everybody” 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 Barriers to international trade Driving forces for international trade •ꢀ Market homogeneity •ꢀ Need to reduce costs •ꢀ Market heterogeneity •ꢀ National controls •ꢀ Corporate culture •ꢀ Brand history •ꢀ Spread of technology and reduction of lead time for R&D investment payback •ꢀ Development of communication and transport systems •ꢀ Corporate management myopia •ꢀ 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 •ꢀ Legal restrictions: tariffs, standards ꢀ (Adapted from Robert Buzell, “Can you Standardize Multinational Marketing?”) Michele Quintano, 2012 Local vs. global markets: key differences <ul style="display: flex;"><li style="flex:1">Local markets </li><li style="flex:1">Global markets </li></ul>Markets are defined within country borders. Customers and competitors are of local origin. Markets transcend country borders. Customers and/or competitors cross frontiers to buy and sell. Market boundaries Significant differences exist among customers from different countries; segments are defined locally. Significant similarities exist among customers from different countries: segments cut across geographic frontiers. Customers Competition Competition takes place among primarily local firms; even international companies compete on a country-by-country basis. Competitors are few and present in every major market: rivalry takes on regional or global scope. Each local market operates in isolation from the rest: competitive actions in one market have no impact elsewhere. Local markets operate interdependently: competitive actions in one market impact on other markets. Interdependence Strategies are locally based: little advantage exists in coordinating activities among markets. Strategies are regional or global in scope: great advantage exists in coordinating activities within regions or world-wide. Strategies Michele Quintano, 2012 (Source: Kamran Kashani,“Managing Global Marketing”) Globalisation vs. Localisation Globalisation level of the value chain activities Global uniformity for elements of marketing mix Brand name 4.6 3.9 3.3 3.4 3.3 2.7 2.5 2.2 Research 4.7 4.4 3.1 3.2 2.9 2.7 2.9 1.3 1.9 1.8 Developt’ Packaging Purchasing Distribution Raw mater. processing Relative pricing Sub-assembly Selling Final assembly Advertising Marketing Selling Absolute pricing <ul style="display: flex;"><li style="flex:1">Distribution </li><li style="flex:1">Promotion </li></ul>Service (Source: GeorgeYip, “Industry Drivers of Global Strategy and Organization”) Michele Quintano, 2012 Nestlé branding tree Texicana Brigadeiro 7.500 Local Rocky Mackintosh Vittel Contadina Herta brands Solís Stouffer’s Perugina Eskimo Alp Findus Go-cat 140 Regional strategic brands Taster’s choice Coffee-mate Kitkat After Eight Crunch Mighty Dog Polo 45 Worldwide strategic <ul style="display: flex;"><li style="flex:1">Smarties </li><li style="flex:1">Baci </li></ul>brands Cerelac Nestlé Maggi Perrier Buitoni Nescafé Carnation Friskies 10 Worldwide corporate brands (Adapted from Andrew Parsons,“Nestlé:The visions of local managers . A n Interview with Peter Brabeck-Letmathe, CEO elect, Nestlé”) Michele Quintano, 2012

International Marketing (8 Cfu)

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