International Marketing Chapter 7

The International Strategic Plan
Creates a link between company resources and its international goals and objectives. Levels: Corporate, Division, Business Unit and Product Level.
Strategic plan allocates resources and establishes objectives for the whole enterprise worldwide.Has long-term focus.
Involves the highest levels of management. Involves international target market selection.
Ex. – Pepsi, which countries and how
Strategic plan allocates resources to each business unit based on division goals and objectives.
Portfolio analysis is used to decide which brands to harvest, invest in, or divest.
Has longer-term focus.
Ex. – Pepsi, which brands in which countries
Business Unit
Planning involves decisions on which consumer segments to target in each country and how to target them.
Ex. – Pepsi, which target market per brand
Product Level
A marketing plan is developed at brand level.Has shorter-term focus.Involves the marketing department.Ex. – Pepsi, mktg mix per brand
Heavy use of celebrity spokesperson
Strategies for the target market
Product mix. Distribution. Promotion mix – Palm Pilot, early life cycle.Pricing – VCR, maturity/decline life cycle
Manage the international marketing effort
Organize. Implement Control
International Target Marketing
process of identifying and focusing on those international market segments that the company can serve most effectively and designing products, services, and marketing programs with these segments in mind.
International Target Marketing is used by other companies to
Identify consumer segments with similar traits.Select segments company can serve efficiently. Athletes, triathletes
Develop products tailored to each segment. involves offering products to the target market, and communicating, through the marketing mix, product traits and benefits that differentiate it in the consumer’s mind .
International Segmentation
The process of identifying countries and/or consumers that are similar with regard to key traits, such as product-related needs and wants, that would respond to a product and related marketing mix.MUST BE performed at country level AND at consumer level.
International Segmentation Requirements
Measurability,Substantiality,Stability over timeAccessibility Actionability ,Differential Response
The ability to estimate the size of the market.
Important questions: Are population statistics and economic development data reliable?Are consumers accessible for data collection? Are they willing respondents?
The extent to which the international market is large enough to warrant investment.Important questions: What is the segment’s growth potential?What is the projected per capita income in the following ten years?Are population statistics and economic development data reliable?
The extent to which international consumer preferences are stable over time.What is the likelihood that the segment will change as a result of a rapidly changing environment?
How often should we re-evaluate our market segment?
On-line or cross border purchases?
The ability to communicate with the international target market. (India-languages, China tech access)Important questions: Are population statistics and economic development data reliable? Are consumers willing respondents for marketing research studies? Is it possible to effectively communicate with the target consumers. Example: Coca cola
The extent to which the international target market is responsive to the marketing strategies used.Important question: Will consumers buy the company’s product?Ex. Consumer dishwashing liquid vs paste.Fill sink or run water
Differential Response
The extent to which international market segments respond differently to marketing strategies.Important questions: Can we distinguish segments from each other? Do consumers have different preferences in this international market? If not, why segment?
Mirco Segmentation
Market potential indicators.Political, legal and financial environment.Marketing support infrastructure.RELATIVE Strength of brand or company franchise. Degree of market fit to company
Market Potential
Gross domestic product (GDP) per capita.Industrial and agricultural sector statistics.Market size and potential.Consumer buying power.Investment figures (FDI, other trade statistics).
Political, legal and financial environment of country
Ethnic conflict.History of war engagement.
Antiforeigner sentiment.Recent nationalization activities.Legal ambiguity.Trade barriers.Exchange rate controls.
Market Supporting Infrastructure
Availability and reliability of distribution and logistics providers.
Availability of competent partners for strategic alliances.
Quality of telecommunication and transportation infrastructure. (cell towers)Availability of other service providers:
Marketing research firms. Financial firms.
Management consulting firms.
Strength of brand or company franchise relative to competing products and companies
where a brand name is already established with local consumers offers high potential to the company.
Degree of market fit with company policies, goals, and resources. (may not be worth resources)
Statistics that describe the population: Age Occupation
Education Income Ethnicity Race Nationality Life-cycle stage
Social class
Psychographic segmentation
Involves clustering consumers based on different behavioral and psychological dimensions.
Hofstede dimensions
Power-distance Masculinity-femininityUncertainty avoidance
Global Segments
Global teenagers – jeans, music, Ipod Global elite – Mercedes, Rolex, etc
Benefits of International Segmentations
understanding the motivation behind consumer purchases, in order to be able to send the appropriate message to the relevant market segments. Example: cooking oil markets segmented on benefits: olive oil targeted to consumers who seek health benefits.Bicycle: Europe transportation, Asia carry eqmt,
US/others – youth fun, exercise, racing, recreation
Geographic Segmentations
Can be performed at the macrosegmentation level, as well as within the country, identifying different consumer segments within a geographic region.
Example: Avon segments its market geographically.
Belgium: 3 languages: Flemish, French, German
Nigeria: 400 languages
Usage and usage status segmentation
groups consumers based on the usage rate for the product (usage segmentation), or based on the familiarity of the consumer with the product (user status segmentation).
Nonusers,Occasional users.Medium users, heavy users
User Status
User of competitors’ products Ex-users Potential usersFirst-time users. Regular users
Assigning an importance score to country screening criteria
Aggregating a selection of criteria, with each criterion having an importance weight. The criteria are: market potential political and financial stability the availability of the appropriate marketing infrastructurethe degree of brand and company franchise in the local marketthe degree of market fit with company goals, policies, and resources.
Calculating the country attractiveness score
The importance score is multiplied by performance. The attractiveness score is the total score for each country calculated by adding the resulting scores.
Differentiated (decisions)
Companies identify or create market segments that want different benefits from a product and target them with different brands using the appropriate marketing strategies.
Example: Procter & Gamble’s brands – Dreft, Tide, Ariel are targeted at different segments who want different types of performance from their laundry detergent.
Cold, whiter, colors, cleaner, smell, softer, stains
Select only one market segment and target it with a single brand.
Example: Mont Blanc pens aimed at consumers who want a high-performing pen with status cachet.
Note: Niching (targeting a niche market) is an example of a concentrated strategy.
Product is aimed at the market using a single strategy regardless of number of countries targeted, and regardless of the locations where it is marketed and the number of market segments.Example: powder milk, beans
Coke: but different formulas and containersHeineken: US vs Holland
Steps Involved in positioning
Identify competitors Determine how they are perceived by consumers.Determine positioning in consumer’s minds Analyze customers. Select positioning.Monitor position
Attribute/benefit positioning
Uses product attributes and benefits to position it in the consumers’ mind relative to competitors’ products and services. (Detergent)
Price/quality positioning
Products are positioned as either offering the best value for the money (especially useful when marketing in developing countries) or as being the best product that money can buy, stressing its high price and quality. (Mercedes, Mont Blanc)
Use or applications positioning
Positioning a product as having a precise application, thus differentiating it in the consumers’ minds from similar products with a more general use. (Bicycles)
Product user positioning
Focuses on the product user, rather than on the product, thus associating the product with a certain segment of the market. (Mont Blanc)
Product class positioning
Differentiating the company as a leader in a particular product category. Company defines the product. (Disney magic, not entertainment)
Competitor positioning
Comparing the firm’s brand with that of competitors. (Airbus 4 engines vs. Boeing 2)