The document discusses international marketing and the process of developing a global marketing plan, including deciding whether to internationalize and which markets to enter, and selecting an entry strategy. It also compares the global marketing styles of SMEs and large enterprises.
The document discusses international marketing and the process of developing a global marketing plan, including deciding whether to internationalize and which markets to enter, and selecting an entry strategy. It also compares the global marketing styles of SMEs and large enterprises.
The document discusses international marketing and the process of developing a global marketing plan, including deciding whether to internationalize and which markets to enter, and selecting an entry strategy. It also compares the global marketing styles of SMEs and large enterprises.
The document discusses international marketing and the process of developing a global marketing plan, including deciding whether to internationalize and which markets to enter, and selecting an entry strategy. It also compares the global marketing styles of SMEs and large enterprises.
Lecturer: Dr. Raphael Odoom LECTURE 1 Introduction to global and international marketing
2 Globalization • Reflects the trend of firms buying, developing, producing and selling products and services in most countries and regions of the world. • Internationalization may be concerned with conducting business in many countries of the world, but often limited to a particular region (e.g. Europe). • Global marketing is defined as the firm’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition. The process of developing the global marketing plan
• Make the decision whether to internationalize or not.
• Decide which markets to enter. • Select a market entry strategy. • Design the global marketing programme. • Implement and coordinate the global marketing programme. Comparison Of The Global Marketing And Management Style Of SMEs And LSEs
• Global Marketing and management styles of SMEs and LSEs may differ in terms of a. Resources b. Formation of strategy and decision making process. c. Organization d. Risk-taking e. Flexibility f. Use of information sources Should a company go global or ‘stay home’? • . Reasons for going global • Saturation of the target market • Strong domestic market share • Globalization of customers • New customers in emerging markets • Globalization of competitors • Reduced trade barriers • Advances in technology • Enhanced customer responsiveness Development of the ‘global marketing’ concept • The nature of the firm’s response to global market opportunities depends greatly on the management’s assumptions or beliefs, both conscious and unconscious, about doing business around the world. • This world view of a firm’s business activities can be described according to the EPRG framework. The four orientations of which are summarized as follows: Development of the ‘global marketing’ concept (CTD) •Ethnocentric •Polycentric (multidomestic) •Regiocentric •Geocentric (global) Forces For Global Coordination/Integration • Removal of trade barriers (deregulation) • Global accounts/customers • Relationship management/network organization • Standardized worldwide technology • Worldwide markets • Global village • Worldwide communication • Global cost drivers Forces for ‘market responsiveness’ • Cultural differences • Regionalism/protectionism • De -globalization trend Internationalizing the value chain • All internationally oriented firms must consider an eventual internationalization of the value chain’s functions. The firm must decide whether the responsibility for the single value chain function is to be moved to the export markets or is best handled centrally from head office. • Principally, the value chain function should be carried out where there is the highest competence (and the most cost-eff ectiveness), and this is not necessarily at head office. INTERNATIONALIZING: INITIATING THE PROCESS
• Proactive Reasons a. Profit goals b. Managerial urge c. Technology competence/Unique Product d. Foreign market opportunities e. Economies of scale f. Tax benefits Reactive motives • Competitive pressures • Domestic market: small and saturated • Overproduction/excess capacity • Unsolicited foreign orders • Extend sales of seasonal products • Proximity to international customers/psychological distance Triggers of export initiation (change agents) • Internal triggers ØPerceptive management/personal networks ØSpecific internal event ØImporting as inward internationalization External Triggers • Market demand • Network partners • Competing firms • Outside experts Barriers hindering internationalization initiation
• insufficient finances; • insufficient knowledge; • lack of foreign market connections; • lack of export commitment; • lack of capital to finance expansion into foreign markets; • lack of productive capacity to dedicate to foreign markets; • lack of foreign channels of distribution; • management emphasis on developing domestic markets; • cost escalation due to high export manufacturing, distribution and financing expenditures Barriers hindering the further process of internationalization
• General market risks
Ø comparative market distance; Ø competition from other firms in foreign markets; Ø differences in product usage in foreign markets; Ø language and cultural differences; Ø difficulties in finding the right distributor in the foreign market; Ø differences in product specifications in foreign markets; Ø complexity of shipping services to overseas buyers. Commercial risks
• exchange rate fluctuations when contracts are made in a foreign
currency; • failure of export customers to pay due to contract dispute, bankruptcy, refusal to accept • the product or fraud; • delays and/or damage in the export shipment and distribution process; • difficulties in obtaining export financing. Political risks • foreign government restrictions; • national export policy; • foreign exchange controls imposed by host governments that limit the opportunities for • foreign customers to make payment; • lack of governmental assistance in overcoming export barriers; • lack of tax incentives for companies that export; • high value of the domestic currency relative to those in export markets; • high foreign tariffs on imported products;
