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18 Cards in this Set
- Front
- Back
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Market Development Strategy |
Involves increasing sales by selling existing products in new markets Either gaining new customers domestically or entering new markets internationally |
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International vs. Domestic Marketing |
Many languages/cultures Requires complex research Frequently unstable Problems with Exchange Rates Diverse conventions |
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International Market Development |
Requires strong environmental analysis Makes more search demands on company's planning/control systems Requires extensive repertoire of marketing & business skills (language, law etc.) Presents great diversity of manufacturing decisions (e.g. location of factories) Demands high risk in terms of investments & market entry Creates particular problems for debt collection & payment methods |
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EPRG Approach |
Different philosophies towards internationalisation - has a direct impact on marketing functions within the firm Ethnocentric Approach - guided by a domestic market extension concept - considers domestic strategies/personnel to be superior & more effective than foreign ones Polycentric Approach - guided by multidomestic market concept - assumes each market is unique Regional Approach - guided by global market concept - considering world region as distinct markets that share common traits - allows for region-wide marketing approach Geocentric Approach - perceives the entire world a potential market with homogenised segments that need to be addressed with tailored marketing strategies |
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Lynch's 5 Broad Categories of European Organisations (1994) |
Local scale - operate within national/local boundaries with little opportunity/desire to trade internationally (e.g. local convenience store) National scale - focus mainly on domestic market, but may find opportunities emerging from a more integrated Europe Regional scale - focus on specific regions within Europe as opposed to operating throughout Europe - gain experience of operating abroad on a smaller scale (with less risk) European scale - changes to EU in trade relations/regulations mean many have turned their attentions to marketing throughout Europe - 1 geographic market with a number of segments that transcend national boundaries World scale - strong European base, now operating in many world markets - through either FDI, joint venture or exporting (e.g. H&M) |
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Standardisation vs. Adaptation |
Standardisation: creating one strategy for the global market and standardising the marketing mix elements to achieve consistency with customers and lower costs (e.g. Porsche - operates a global, standardised marketing strategy - one of tightest regimes of control over all marketing and customer touch points) Adaptation: customising your strategy and marketing mix elements to adapt them to each different market (e.g. SAB Miller - adapts business strategies to local market conditions - halves price of cheapest/doubles price of premium products in Africa More likely to standardise on global scale, but adapt to local preferences on local scale - P&G strategy is to make global plans, replan for each region, and then execute locally - need a consistent global brand but must also adapt to local needs (e.g. McDonalds - keeps convenient distribution channels/branding/slogan same but tailors menus to local tastes) |
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Advantages of Standardisation |
Consumer confidence of quality consistency anywhere around world - supports positive consumer perceptions of a product (e.g. Budweiser - established self as a truly global beer brand since 2010 world cup partnership by letting customers adapt to it) Cost reduction through EoS Helps companies focus on a uniformed marketing mix - specifically focusing on one single product leaves enough room for quality improvement (e.g. A Small World - success as a global brand due to its pitching at a very specific demographic) Helps to keep a brand's heritage intact when entering a new market (e.g. Burton Biscuits - CCO warns of changing product to cater for local tastes - can risk destroying the qualities that make the brand desirable) (e.g. Google - compromised brand culture when launching a self-censored search engine in China 2006 - consumer backlash in other markets) |
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Disadvantages of Standardisation |
Sacrifices market share - allows competition to gain market share through tailoring their products to meet the need of a specific market Different markets have different needs/tastes - possible loss of advertising effectiveness or negative reaction by neglecting local needs (e.g. Walmart - faced challenges when entering Germany/Brazil as formula for success in USA (e.g. low prices) did not translate to markets with their own discount chains) |
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When to Standardise vs. Adapt |
Needs: universal vs. local PLC: early (expensive to make lots of different varities) vs. late Content: Tech/IT/comms vs. higher cultural content Ease of adaptation: expensive to retool vs. easy to change Churn: fads - fast vs. slow Product focus: commodity B2B vs. consumer B2C |
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Hofstede's Cultural Dimensions Model |
Describes the effects of a society's culture on the values of its members - and how these values relate to behaviour E.g. masculinity vs. femininity, indulgence vs. restraint Marketers can use to understand the specificity of their market when deciding upon standardisation/adaptation - e.g. if wanting to market cars in a country where high uncertainty avoidance, you should emphasise their safety |
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Globalisation |
The process by which the experience of everyday life is becoming standardised around the world Transfer of goods & services around the world Movement of people around the world Movement of capital - as China becomes more economically powerful we are likely to see more Chinese influences Information - power of information transfer through media etc. and ease of access to an insight into other cultures |
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Why a brand might want to expand |
Limited growth in domestic market EoS Trade liberalisation Technological changes Customer relationships Stakeholder pressure |
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International market selection |
Market size/accessibility Geographical/psychological proximity Competition - level/quality Costs of entry/profit potential Risks/uncertainty |
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Factors to consider when assessing the success of market entry |
Political Economic Social Technological Legal Consumption attitudes |
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Types of market entry methods |
Indirect exporting - sell products to 3rd party who sells on within the foreign market Licensing (grant an organisation in the foreign market a license to produce/use brand name in return for royalty payment), franchising (put together a package of successful ingredients that make successful and franchise package to overseas investors), contracting (contract out production to another organisation to produce on your behalf) Direct exporting - produce products in home market then sell them to customers overseas Joint ventures - two organisations come together to form a company to operate in the host country (shares risk/expertise) Direct investment - purchase a controlling interest in a foreign business (e.g. through construction facilities abroad) |
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Advantages of global marketing campaigns |
EoS (production & distribution) Lower marketing costs Power and scope - psychological effect (consumers believe global brands are more powerful) Consistency in brand image Leverage good practice - find out what works in one place and implement it elsewhere Uniformity of marketing practices |
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The Globalization of Markets - Levitt |
Markets and consumers have become ever increasingly homogenised - companies need to operate as if the world were one large market - ignoring superficial regional/national differences Shrinking world means companies should shift from adaptation to standardisation - providing offerings that are advanced, functional and low-priced for all |
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Marketing Myopia - Levitt |
Many companies are short-sighted in recognising what business they are in and what customers really want - market needs should receive first priority (e.g. Railway lines - thought they were in rail business rather than providers of transportation - failed to branch out into cars/air) Goal isn't to sell things - it is to satisfy customers - need to identify what they want and adapt offering to meet these needs |
