International Marketing

Ana Colovic

Université Paris-Dauphine
 Session 1
I. The nature of international marketing
1. Introduction to international marketing
2. Reasons for marketing abroad
3. Exporting

II. Strategic thinking in international

marketing
1. Competitive advantage
2. The competitive environment
3. Competition between nations
4. The value chain
 Session 1
III. International marketing strategy
1. The five-stage model
2. International marketing planning
3. ‘What if’ analysis
4. Control and coordination
 I. The nature of international
marketing
1. Introduction to international marketing

« International marketing consists in identifying and

satisfying consumer needs abroad; better than the
national and international competitors, under the
constraints of the internationalization stage of the
firm and the global environment. » (Nathalie Prime)
 Key elements of the international
marketing mix
Product Price Place Promotion
-Product -choice of pricing -International -Advertising,
adaptation strategy distribution public relations
packaging and -Competitor -Control of and sales
labeling analysis agents promotion
translation of -Discount -Export -Direct marketing
technical structures documentation -Control of
literature -Credit -cargo salespeople
-Quality management insurance -Translation of
management -Delivery terms -Joint-ventures sales literature
-Licensing and -costing and and subsidiaries -Exhibiting
contract budgeting -Marketing
manufacturing research
 Differences between domestic and
international marketing
Domestic International
Research data is available in a Research data is generally in foreign
single language and is usually languages and may be extremely
easily accessed difficult to obtain and interpret
Business is transacted in a single Many currencies are involved, with
currency wide exchange rate fluctuations
Head office employees will Head office employees might only
normally possess detailed possess and outline knowledge of the
knowledge of the home market characteristic foreign markets
Promotional messages need to Numerous cultural differences must
consider just a single national be taken into account
culture
Market segmentation occurs within Market segments might be defined
a single country across the same type of consumer in
many different countries.
 Differences between domestic and
international marketing (continued)
Domestic International
Communication and control are International communication and
immediate and direct control might be difficult
Business laws and regulations are Foreign laws and regulations might
clearly understood not be clear
Business is conducted in a single Multilingual communication is
language requires
Business risks can usually identified Environments may be so unstable
and assessed that it is extremely difficult to identify
and assess risks
Planning and organizational control The complexity of international trade
systems can be simple and direct often necessitates the adoption of
complex and sophisticated planning,
organization and control systems
 Differences between domestic and
international marketing (continued)
Domestic International
Functional specialization within a International marketing managers require a
marketing department is possible wide range og marketing skills
Distribution and credit control are Distribution and credit control may be
straightforward extremely complex
Selling and delivery Documentation is often diverse and
documentation is routine and complicated due to meeting different
easy to understand border regulations
Distribution channels are easy to Distribution is often carried out by
monitor and control intermediaries, so is much harder to
monitor
Competitors’ behavior is easily Competitors’ behavior is harder to observe,
predicted therefore less predictable
New product development can be New product development must take
geared to the needs of the home account of all the markets the product is
 International marketing and
exporting
International marketing is more than exporting,
because it involves:

• Marketing products that have been

manufactured or assembled in the target country
• Establishing a permanents presence in the
foreign country
• Licensing and franchising
• Sourcing components from foreign states.
International and multinational
marketing

International marketing means

marketing across national frontiers.

Multinational marketing means the

integrated coordination of the firm’s
marketing activities throughout the
world.
2. Reasons for marketing abroad
 Economies of scale and scope
 Existence of lucrative markets in foreign
countries
 Saturated markets in the home country
 High R&D costs
 International opportunities
 Less competition
 New trade agreements
…
 3. Exporting
Exporting means the sale in a foreign
market of an item produced, stored or
processed in the supplying firm’s home
country.
Two kinds of exporting: passive and
active
 3. Exporting (continued)
Sources of foreign demand (passive exporting):
• Non-availability of appropriate products from
domestic producers
• Price differentials between imported and locally
supplied items;
• Exotic images attaching to foreign products;
• Inefficiency of local distribution systems, political
disruptions, industrial action, or other factors that
prevent local firms from supplying goods.
 Exporting (continued)
Reasons for active exporting:
• The product has reached the end of its
life cycle at home
• Less competition
• Easy access to major customers
• Export increases turnover.
 Example: Manchester United
MUFC has more fans abroad than at
home
Merchandising: clothing, shoes, sports
equipment
Manchester United Magazine,
Manchester United on Video
TV Channel - MUTV
…
 II. Strategic considerations in
international marketing
Strategy means choosing a general direction for
the firm, together with organizational designs,
policies, systems and a style of management
best suited for beating the competition in the
field.

Tactics concern practical methods for

implementing strategic decisions.
 1. Competitive advantage
The elements of competitive advantage are the
critical offer, the significant operating factors
and the firm’s strategic resources.

Critical offer features

Strategic resources  Competitive advantage
Significant operating factors
 Porter’s model of competitive
advantage

 Cost leadership
 Differentiation
 Specialization
 2. The competitive environment
Factors:

 Ease of entry by competitors into the market

 The bargaining power of customers
 The bargaining power of suppliers
 Availability of substitutes
 Level of existing competitive pressure
 The Porter Model
The Porter Model

Availability of substitutes Bargaining power of

Customers and suppliers

Competitive situation

Profitability
Market power
Nature of competitive advantage

Ease of entry Extent of inter-firm

competition
Competition between nations
F i r m St ra t eg y ,

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The national diamond (Porter, 1990)

 4. The value chain
Primary activities:
 Inbound logistics
 Operations - the conversion of inputs
into products
 Outbound logistics - which concern
distribution
 Marketing and sales
 Service activities
 III. International marketing
strategy
1. The five stage model

Stage 1: Decision to internationalize


Stage 2: Analysis of international marketing environment

Stage 3: Entering international markets

Stage 4: International marketing programme

Stage 5: Implementing the international marketing programme
 2. International marketing
planning

Planning means looking into the future

and deciding today what to do in the
future given predicted or intended
circumstances.
 ‘What if’ analysis
Management asks the question ‘what will
we need to do if it happens?’ and
makes sure that the firm is adequately
prepared for the environmental change.

‘What if’ analysis recognizes complexities,

discontinuities and uncertainties of the
real world.
 4.Control and coordination
Control:

 Establishing standards and targets

 Monitoring activities and comparing
actual with target performance
 Implementing measures to remedy
differences
 4. Coordination and control

Coordination means the unification of

effort, i.e. ensuring that everyone within
the enterprise is working towards a
common goal. Effective coordination
requires efficient control.
 Mechanistic systems of control
 Standardization of administrative
procedures
 Feedback systems (reports)
 Face-to-face meetings
 Appointment of a full-time liaison
manager
 Cultural systems of control
 Clear corporate vision and mission;
 Free-following communication between
the workforce and management
 Good internal PR and internal marketing
 Good induction procedures for new staff
to adopt the corporate culture at an
early stage