International Marketing :

Dr Vincent Wee Eng Kim CIM

1
The Global Marketing Environment
Introduction to Global
Marketing :

The Global Trade The Global Economic

Environment Environment

Social and Cultural

Political And Legal
Environments : Mktg Mix

2
 Approaching Global Markets

Importing, Exporting, and

Global Market Research
Sourcing

Segmentation, Targeting, and Global Market-Entry

Positioning Strategies: Licensing,
Investment,
and Strategic Alliances

3
 The Global Marketing Mix

Brand and Product Decisions Global Marketing Channels

in Global Marketing and Physical Distribution

Global Marketing
Pricing Decisions Communications Decisions

4
 Strategy and Leadership

Strategic Elements of
Leadership, Organization
Competitive Advantage

5
 One assignment
(2 Component Parts One and Two)
One individual assignment of
3,000 words maximum
(two parts - 1,500 maximum words
each component)

6
• As an International Marketing Consultant, you have been
approached by a client organisation requesting your advice before
they enter an international market.
• You have met with this client and briefly discussed the differences
they might face in this international market, but you have assured
them that the Marketing Management principles they are practising
domestically will basically be the same, but will need to BE
ADAPTED IN THE INTERNATIONAL MARKET.
• Following this brief meeting, the client has asked you to prepare a
report detailing and illustrating the approaches you recommend
that they should undertake in the international market, in the
following areas of International Marketing Management:

7
 TASK 1
Critically evaluate
HOW AND WHY THEY SHOULD EMPLOY
A STRATEGIC PLANNING APPROACH
to their

MARKETING CAMPAIGNS
in the international market.

8
 TASK 2
Critically examine how and why they should strategically
plan and undertake
MARKET RESEARCH
in the international market.

9
 Points to address:
In terms of `how`, it is necessary to conduct

A CRITICAL EVALUATION
OF THE INTERNATIONAL STRATEGIC
PLANNING APPROACH:

10
Relevant international The strategic planning In terms of `why`, it is
STRATEGIC principles you identify necessary for you to
PLANNING MODELS demonstrate the potential
should be evaluated and BENEFITS OF employing
should be used to illustrated in the context a strategic approach in
illustrate this planning of the agreed the context of
process and be used international
as the basis of your CLIENT ORGANISATION. MARKETING PLANNING.
critical evaluation.
You need to critical The potential
evaluate the strategic REASONS FOR
PLANNING APPROACH ADOPTING a strategic
IN COMPARISON TO planning approach
ALTERNATIVE and the
planning approaches. RECOMMENDATIONS

11
 GUIDELINE
Report To:
Report From :
International Marketing Management Report for Company XYZ

Company Background
1.0. Strategic Planning Approach To Their Marketing Campaigns In The
International Market.
Deciding to Go Global
Which market to enter
Mode of Entry:
Import/Export/ Sourcing/
Licensing – franchiser, contract manufacturing, management contract.
Joint venture
Direct Investment

12
 GUIDELINE
1.0. Strategic Planning Approach To Their Marketing Campaigns In The
International Market.
I. In what ways can global brands and global Marketing campaigns benefit a
company?
II. How does the “standardized versus localized” debate apply to Marketing?
III. What is the difference between an Marketing appeal and creative execution?
IV. Can you identify ads that use emotional appeals? Rational appeals? What is the
communication task of each ad? To inform? To persuade? To remind? To
entertain?
V. How do the media options available to advertisers vary for the specific country?
VI. What can advertisers do to cope with media limitations in certain countries?
VII. What are some of the ways PR practices vary in different parts of the world?

13
 GUIDELINE
2.0 Strategic Planning Approach To Their Market Research In
The International Market.
Importance Market Research
Market Segment
Hofstede Cultural Dimension
Marketing Mix : 4Ps/7Ps
Trend 1…

Conclusion

14
TASK 1
Dr Vincent Wee Eng Kim CIM

15
 Strategic Planning Approach
Asking Why Should I Adopt A Formalised &
Structured Approach?

16
 similar to why I should plan .

“CRUMPET”
17
C - co - ordination of activities & goal congruence .
R - responsibility for actions can be assigned
U - utilisation of resources will be Maximised
M - Motivation towards target
P - planning & allocation of resources is facilitated
E - evaluation benchmark against which progress can be
compared .
T - telling communication
18
 Strategic Planning Models
RATIONAL APPROACH :
Analysis
Choice
Implementation

19
Incrementalism – small Emergent - not really
scale extensions do approach more of an
post behaviour observation (no real formal
(incremental ) plan go with flow

20
Negative of formal approach
→ Time
→ Cost
→ Too dynamic on external environment

21
 DON’T HAVE TO DEAL WITH
UNSTABLE CURRENCIES,
NOT ALL COMPANIES NEED TO FACE POLITICAL AND LEGAL
VENTURE INTO INTERNATIONAL UNCERTAINTIES, OR
MARKETS TO SURVIVE.
REDESIGN THEIR PRODUCTS TO
SUIT DIFFERENT CUSTOMER
EXPECTATIONS
DECIDING WHETHER
TO GO GLOBAL

OPERATING DOMESTICALLY IS MANAGERS DON’T NEED TO

EASIER AND SAFER. LEARN ANOTHER COUNTRY’S
LANGUAGE AND LAWS.
22
 Company should try to NEEDS TO DECIDE ON THE
TYPES OF COUNTRIES TO
define its international ENTER.
MARKETING OBJECTIVES
AND POLICIES.

It should decide what DECIDING WHICH

VOLUME OF FOREIGN
SALES it wants. MARKETS TO ENTER
A country’s attractiveness
The company also needs to depends on the PRODUCT,
choose in GEOGRAPHICAL FACTORS,
HOW MANY COUNTRIES IT INCOME AND POPULATION,
WANTS TO MARKET. POLITICAL CLIMATE, AND OTHER
CONSIDERATIONS 23
24
• Regional economic agreements,
• Converging market needs and wants, Restraining forces include
• Technology advances, Management myopia
All represent (management simply
• Pressure to cut costs,
important driving ignores opportunities to pursue
• Pressure to improve quality, global marketing)
• Improvements in communication and
forces; for • Organizational culture,
transportation technology, GLOBALIZATION • National controls, and
• Opposition to globalization.
• Global economic growth, and
opportunities for leverage
.

25
 Global Marketing Campaign Decisions
In what ways can global Can you identify ads that use emotional
brands and global appeals? Rational appeals? What is the
Marketing campaigns communication task of each ad? To inform? To
benefit a company? persuade? To remind? To entertain?

How does the How do the media options

“standardized versus available to advertisers
localized” debate apply to vary for the specific
Marketing? country?

What is the difference What can advertisers do to

between an Marketing cope with media
appeal and creative limitations in certain
execution? countries?
26
 Global Marketing Communications : Sales
Promotion, Personal Selling, and
Special Forms of Marketing Communication

1. Briefly review how the main tools of sales promotion (e.g.,

sampling and couponing) can be used in global markets. What
issues and problems can arise in different country markets?
2. What potential environmental challenges must be taken into
account by a company that uses personal selling as a
promotional tool outside the home country?
3. Why are infomercials, sponsorship, and product placement
growing in importance for global marketers?

27
 Marketing communications campaign —the
promotion P of the marketing mix — includes
advertising, public relations, sales promotion,
and personal selling.

28
When a company embraces integrated marketing
communications (IMC), it recognizes that the
various elements of a company’s communication
strategy must be carefully coordinated.

29
 ADVERTISING
is a sponsored,
paid message that is communicated
through nonpersonal channels.

30
 GLOBAL ADVERTISING
consists of the same advertising appeals,
messages, artwork, and copy in
campaigns around the world.

31
 The effort required to create a global
marketing campaign forces a company to
determine whether or not a global market
exists for its product or brand.

32
 The trade-off between

STANDARDIZED AND ADAPTED

marketing is often accomplished by means of pattern advertising,
which can be used to create localized global marketing.

33
 THE STARTING POINT
in ad. development is the creative
strategy, a statement of what the

MESSAGE WILL SAY.

34
THE PEOPLE WHO CREATE ADS OFTEN SEEK A

“BIG IDEA”…
THAT CAN SERVE AS THE BASIS FOR…

35
 …FOR
MEMORABLE,
EFFECTIVE MESSAGES.

36
The advertising appeal is the
communication approach—
rational or emotional — that
BEST RELATES TO
BUYER MOTIVES.
37
 RATIONAL APPEALS
SPEAK TO THE MIND;
EMOTIONAL APPEALS
SPEAK TO THE HEART.
38
THE SELLING PROPOSITION
IS THE PROMISE THAT CAPTURES THE
REASON FOR BUYING THE PRODUCT.

39
THE CREATIVE EXECUTION
IS THE WAY AN APPEAL OR
PROPOSITION IS PRESENTED.

40
 ART DIRECTION AND COPY
MUST BE CREATED WITH
CULTURAL CONSIDERATIONS
IN MIND.
41
 PERCEPTIONS
of humor, male–female
relationships, and sexual imagery
vary in different parts of the world.
42
 MEDIA AVAILABILITY
VARIES CONSIDERABLY FROM
COUNTRY TO COUNTRY.

43
When selecting media, marketers
are sometimes as constrained by
LAWS AND REGULATIONS
as by literacy rates.
44
Singapore – Chewing gum, but people who
annoy others around them with music can
faced fines up to SG2,000. For “obscene
songs” the penalty is 3 months jail.

45
Lithuania – having a habit of staring at your
smartphone while walking or crossing road
will cost you RM56

46
 Trinidad and Tobago – having a military
inspired clothes, either you buy, wears is
forbidden.

47
Nigeria– don’t even think about bringing a soft
drink, ball pen and soap into Nigeria. It’s one
of the several everyday items on the customs
office’s long list of banned objects.

48
 Germany – parking or stopping on German
highway can mean fines – and an empty tank,
is not recognise as break down.

49
 CULTURE AND THE MARKETING MIX : Pricing
PRICE ESCALATION may results from differences in selling strategies
or market conditions. Eg. Higher costs in another country – the
addition cost due to costs of
1. PRODUCT MODIFICATIONS,
2. SHIPPING AND INSURANCE,
3. IMPORT TARIFFS AND TAXES,
4. EXCHANGE RATE FLUCTUATIONS AND
5. PHYSICAL DISTRIBUTION.

UNILEVER developed small single use shampoo eg. Sunsilk, DOVE, for
affordable and consumer friendly prices.
50
 To OVERCOME PRICE ESCALATION ,
when selling to less affluent consumers in
developing countries, companies
MAKE SIMPLER OR SMALLER
versions of their products that can be sold at
a lower price.
51
 Kimberly Clark
RAISED Kleenex PRICES by –
REDUCING THE NUMBER OF SHEETS of
toilet paper or facial tissues in each
package.
52
 DUMPING
is when a firm SELLS a product in a foreign country BELOW
ITS DOMESTIC PRICE or
BELOW THE ACTUAL COST.
1. This is done to BUILD A COMPANY’S SHARE of the
market by pricing at a competitive level.
2. Another reason is the PRODUCT IS A SURPLUS where
it CANNOT BE SOLD in the domestic market and
therefore is a burden for the company.
53
 GRAY MARKET
GRAY MARKET – when companies price their product
very high in some countries but competitively in
others, they faced with gray market problem.
Also called PARALLEL IMPORTING , is a situation
where
PRODUCTS ARE SOLD THROUGH UNAUTHORIZED
CHANNELS OF DISTRIBUTION.
54
 This happen when :
1. individual buy products in a lower priced country from
manufacturer’s authorized retailer,
2. shipped them to higher price countries and then sell
them below the manufacturer’s suggested retail price
through unauthorized retailers.
3. This include products like Chanel perfume, Seiko
watches and Mercedes Benz cars.
This is legal in Singapore but illegal in European Union.

55
Adopter Categories
• Adopter categories are
classifications of
individuals within a
market on the basis of the
categories’
innovativeness. Hundreds
of studies of the diffusion
of innovation demonstrate
that, at least in the West,
adoption is a social
phenomenon that is
characterized by a normal
distribution curve,

56
• Takada and Jain
surmised that ASIA
WOULD SHOW FASTER
RATES OF DIFFUSION
than the United States

57
TASK 2
Dr Vincent Wee Eng Kim CIM

58
I. Primary → Expensive . Time Consuming
II. Secondary – Cheaper Not Always Possible
III. Big Data Analytics (Marketing Information System)

59
I. Approaches Market driven perspective :
II. Competitive Advantage Michael Porter - dealing with 5 forces
III. Dealing with Value Chain Resource

60
 Critique :
However, the Porters model is NOT GENERALIZABLE and is NOT
ACCURATE TOWARD CURRENT EMERGING MARKET seniors and
characteristics, the Porters model can only be considered to
brainstorm and initiate a thinking process to demonstrate the
subjective situation and attractiveness of industry. The Porters model
is NOT AIMED TO OUTLINE AN OPTIMAL SITUATION OF INDUSTRY
WITHIN A CERTAIN GEOGRAPHIC LOCATION.

61
 Critique :
Concluding the statement, the researcher believes that this model is
outdated and new attributes should be added to this model to ensure
its generalizability, some factors which could be added to this model
are: The influence of government because government and/or
regulatory bodies are the key player in businesses now days e.g. no
matter how many suppliers are in market or …

62
I. Resources Based view –
II. Firm is bundle of resources & success is the result
of best usage of available resources

III.Alternative new Approach - Blue ocean

63
I. Analysis –
II. Internal - value chain
III. External - PESTEL & 5 Forces
IV. Key stakeholders - Mendelow's matrix
 Choice Generation Of Options –
Porters Generic Strategy
Which Direction? - Ansoff 'S Matrix

65
International Marketing :
Market Research
Dr Vincent Wee Eng Kim CIM

66
 Tools of MIS
Intranet - Allows companies like Amazon.com and Dell to operate as
real time enterprises
Electronic Data Interchange (EDI) - Allows business units to:
– Submit orders
– Issue invoices
– Conduct business electronically
Efficient Consumer Response System (ECR)- An effort for retailers and
vendors to work closely on stock replenishment
CRM- two-way communication between company and customer

67
 INFORMATION is one of the most basic ingredients of a
successful marketing strategy. A company’s
MANAGEMENT INFORMATION SYSTEM (MIS)
and INTRANET
provide
DECISION MAKERS
with a continuous flow of information.

68
THE GLOBAL MARKETER MUST SCAN THE
WORLD FOR INFORMATION ABOUT
OPPORTUNITIES AND THREATS AND MAKE
INFORMATION AVAILABLE VIA A
MANAGEMENT INFORMATION SYSTEM.

69
 WITH MARKET RESEARCH WE WILL BE
ABLE TO IDENTIFY
LATENT MARKET - an INCIPIENT MARKET - a market
undiscovered market segment in that will emerge if a particular
which demand for a product economic, demographic,
would materialize if an political, or sociocultural trend
appropriate product were
offered. continues

Eg. In the tests, consumers reacted Eg. 1994 Ferrari opened its first
negatively to the taste, the logo, and the
brand name for Red Bull. “When we first showroom in Beijing. Demand for
started, we said there is no existing luxury cars had grown at a faster
market for Red Bull, but Red Bull will
create it.” very successful today. rate than anticipated.
70
 ETHNOGRAPHIC RESEARCH- a
specialist observational approach
trained observers seek to discover
behavioral and emotional reactions
as consumers.

Eg. Samsung uses this research to find

out how customers use their phone.
71
 “We Get All Our Ideas
From The Market.
The Market Is The Driver”.
Samsung
72
 Steven Jobs famously said that …
APPLE DOES NOT
DO MARKET RESEARCH.
It turns out that not the case.
Their research ONLY REVEALED to small
SELECTED GROUP OF APPLE
EXECUTIVE.
73
Small deck cards and
hold 1,000 songs. Apple design USABILITY

Recipe for
blockbuster
74
Pizza Hut claims to have the
largest fast food customer
database in the world.

75
Case study : Samsung and Apple
When Apple CEO, Tim Cook was on stage unveiling the new
iPhone 5, Samsung marketing and ad agency watch as the
event unfold.
Samsung strategists carefully monitored each new feature as
it was presented, and also look at online consumer comments
on blogs and social media real time.
By the time Tim Cook finished, they already draft the

STRATEGY.
76
Case study : Unilever Intelligence
Unilever conducts
COMPETITIVE INTELLIGENCE TRAINING,
teaching employees how to collect info and protect
them.
“ At one conference, the
EMPLOYEES WERE SET UP
when an actor infiltrate the group. The idea was to
see who spoke to him, how much they told him…” 77
 MANY COMPANIES HAVE DISCOVERED THAT IT
TAKES MORE THAN THE
ACCEPTED DIFFERENTIATION
LOW COST
BASICS OF
HIGH QUALITY,

TO EXCEL IN TODAY’S COMPETITIVE MARKET. IT

ALSO TAKES …

SPEED AND FLEXIBILITY.

78
THE TRADITIONAL SEQUENTIAL OR “RELAY RACE”
APPROACH TO PRODUCT DEVELOPMENT…

New-product development strategy

 Instead, a
HOLISTIC OR “RUGBY”
APPROACH —
where a team tries to go the distance as a unit,
passing the ball back and forth—
may better serve today’s competitive
requirements.
80
International Marketing :
Segmenting, targeting &
Positioning
Dr Vincent Wee Eng Kim CIM

82
• Through global market segmentation, a company can identify and
group customers or countries according to common needs and
wants.
• Demographic segmentation can be based on country income and
population, age, ethnicity, or other variables.
• Psychographic segmentation groups people according to attitudes,
interests, opinions, and lifestyles.
• Behavior segmentation utilizes user status and usage rate as
segmentation variables.
• Benefit segmentation is based on the benefits buyers seek.

83
 METROSEXUAL
marketing buzz describes man who is SENSITIVE, EDUCATED and
URBAN DWELLER who is in touch with his FEMININE SIDE.
They may own MANY SHOES, SUNGLASSES,
WATCHES AND MAN-PURSE.
They see a hairstylist instead of barber, they can’t imagine a day without
hairstyling products. US jeweler Tiffany expanded into men jewelry including
silver pendent, rings, bracelets. 84
 Women in their 40s are becoming hot market for what
they calls “REWARD CARS” – sexy vehicles.
As their kids grow and leave house, its “REWARD TIME”.
Mercedes, BMW and Audi
targeting to this group of market
88
 “TIMING OF MARKET ENTRY”
SHOULD BE TAKEN INTO ACCOUNT WHETHER A
FIRST-MOVER ADVANTAGE
IS LIKELY TO BE GAINED.

89
 AFTER EVALUATING THE
IDENTIFIED SEGMENTS,
MARKETERS MUST DECIDE ON AN APPROPRIATE
TARGETING STRATEGY.

90
 BY ANALYSING CUSTOMER RELATIONSHIP MANAGEMENT (CRM), WE CAN
IDENTIFY CUSTOMERS WHO IS

UNPROFITABLE.

91
 SOME BUSINESSES

“FIRED”
THEIR WEAKEST CUSTOMERS.
American Express, for example, invited a group of high
risk credit card holders to pay off their balance and close
their accounts in return for a payment of $300/-

92
93
Global Marketing Channels and Physical
Distribution

94
• Strategic/consultative
selling model, which
has gained wide
acceptance in the
United States

95
 ETHNOCENTRIC
ORIENTATION
A person who assumes that
HOME COUNTRY IS SUPERIOR
to the rest of the world.
This leads to a STANDARDIZED
or extension approach to marketing

Example :
• U.S. automakers suffered from this ethnocentrism in the 1960s and 1970s as96 a
result of their neglect of imminent competition from Japanese automakers with
more fuel-efficient cars
 POLYCENTRIC
Leads to a LOCALIZED or ADAPTATION APPROACH that
assumes that products must be adapted in response to
different market conditions

Example :
• Unilever, Rexona deodorant brand had 30 different package designs97and
48 different formulations. Marketing was also executed on a local basis.
 Haier discover that many customers in Tupperware seek help from external
rural areas used their washing machines design company for new product ideas
to also wash vegetables, Haier redesigned eg. Tupperware GOFLEX series that can
the draining mechanism to ensure it can collapsed, stored and stacked easily.
also wash vegetables without breaking
down. 98
 REGIOCENTRIC
ORIENTATION
MANAGEMENT’S GOAL IS TO DEVELOP
AN INTEGRATED REGIONAL STRATEGY

Example :
• BMW, German company invested in a manufacturing plant in South Carolina,99U.S
in order to be more adaptive to changing customer needs in this important
market, and to take advantage of rather inexpensive resources as a result of the
dollar depreciation against the euro.
 GEOCENTRIC ORIENTATION/
TRANSNATIONALITY
VIEWS THE ENTIRE WORLD AS A POTENTIAL MARKET AND
STRIVES TO DEVELOP INTEGRATED GLOBAL STRATEGIES.

Harley-Davidson serves world

markets from the United States
exclusively.
100
FIRM THAT STAY AT HOME TO PLAY IT
SAFE MIGHT NOT ONLY LOSE THEIR
CHANCES TO ENTER OTHER MARKETS
BUT ALSO RISK LOSING THEIR HOME
MARKETS.

101
 Trends 1 : Decline in economic protectionism
PROTECTIONISM is the practice of
shielding one or more industries within
a country’s economy from foreign
competition through the use of tariffs
or quotas.

102
 LIMITS THE PROTECTS A NATION’S DISCOURAGE ECONOMIC
OUTSOURCING OF POLITICAL SECURITY DEPENDENCY ON OTHER COUNTRIES &
JOBS and encourages the development of
domestic industries

103
 Protectionism

Tariffs : Increase Price Quotas : Limit Supply

Decrease World Trade

104
Trends 2 : Rise in economic integration
• A number of countries with similar economic goals have formed
transnational groups or signed trade agreements for the purpose of
promoting free trade among members and enhancing their
individual economies.

European Union
North American Free Trade Agreement
Asian Free trade Agreement
105
Trends 3 : New reality Global competition among
Global companies for global customers
• Today the world trade is driven by Global competition among Global
companies for global customers.
• Global competition :
• Coca Cola Vs Pepsi from US to the world
• P&G Pampers vs Kimberly –Clark’s Huggies

106
Nike shoes – leather from Korea, putting all the
component from China, Japan and Indoesia by a
Taiwanese factory.
Is Nike still an American product?

107
WHOEVER UNDERSTAND
THE PEOPLE THE BEST

WINS
It is THE COMPETITION THAT WE
DON’T KNOW ABOUT, THAT TAKE
OVER OUR BUSINESS.
It is the NEW PLAYERS that kill them.
THE GOAL IN BUSINESS IS NOT
TO WIN EVERY BATTLE.
THE GOAL IN BUSINESS IS TO
OUTLAST YOUR
COMPETITION.
 IF THERE IS
NO COMPETITION IN YOUR
INDUSTRY,
ITS MEANS SOMETHING WRONG AND THAT
BUSINESS DOES
NOT HAVE A FUTURE.
 GLOBAL MARKETING IS NOT TO FIND THE
RIGHT CUSTOMERS FOR YOUR PRODUCT
BUT TO FIND THE
RIGHT PRODUCT
FOR YOUR CUSTOMER
112
 IT IS NOT THE STRONGEST WHO WILL
SURVIVE NOR THE MOST INTELLIGENT ,
BUT THOSE …. WHO ARE ABLE TO ADAPT
TO THE EVER EVOLVING GLOBAL
LANDSCAPE.
 THANK YOU
MAY YOU ALL BE
HAPPY, HEALTHY AND WEALTHY.

114
OPTIONAL SLIDES
115
Importing, Exporting, and
Sourcing
Dr Vincent Wee Eng Kim CIM

116
 A company’s
FIRST BUSINESS DEALINGS
outside the home country often take the
form of
EXPORTING OR IMPORTING.
117
Companies should recognize the difference
between
EXPORT MARKETING and EXPORT SELLING.
Exporting using the product Exporting WITHOUT TAILORING
being MODIFYING it as needed to the product, the price, or the
meet the preferences of promotional material to suit
international target markets. individual country requirements.

118
Marketing Campaign : Promotion Via Trade Show

By attending
TRADE SHOWS and participating in
TRADE MISSIONS,
company personnel can LEARN a great
deal about NEW MARKETS.

119
 SUPPORT EXPORTS

Governments use a variety of programs to

SUPPORT EXPORTS, including :
1) TAX INCENTIVES
2) SUBSIDIES
3) EXPORT ASSISTANCE
120
 GOVERNMENTS ESTABLISH
FREE TRADE ZONES AND
SPECIAL ECONOMIC ZONES
TO ENCOURAGE INVESTMENT.

121
 SPECIAL TYPES OF DUTIES -

ANTIDUMPING DUTIES
imposed on products whose prices
government officials deem too low.

122
Global Market-Entry Strategies:
Licensing, Investment,
and Strategic Alliances
Dr Vincent Wee Eng Kim CIM

124
 Marketing Campaign : Different Type

MARKET ENTRY
1) Licensing – franchiser, contract
manufacturing, management contract.
2) Joint venture
3) Direct Investment
 THE TYPE OF MARKET-ENTRY
STRATEGIES - Will determine
1.INCREASING LEVELS OF INVESTMENT
2.COMMITMENT
3.RISK.

126
LICENSING can generate revenue flow with
little new investment; it can be a good
choice for a company that
1.POSSESSES ADVANCED TECHNOLOGY
2.A STRONG BRAND IMAGE OR
3.VALUABLE INTELLECTUAL PROPERTY.

127
A major disadvantage, though, of
greenfield operations is that they
require enormous investments of
TIME AND CAPITAL.

128
Cooperative alliances known as
STRATEGIC ALLIANCES,
represent an important market-
entry strategy in the twenty-first
century.
129
 Licensing
A SIMPLE WAY to enter international market,
Enter an agreement with a licensee in the foreign market. Offers the RIGHT TO

TRADEMARK, PATENT,
TRADE SECRET
(MANUFACTURING PROCESS)
IN RETURN FOR A ROYALTY OR FEE.
130
 LITTLE RISK
GAIN PRODUCTION EXPERTISE
AND WELL KNOWN PRODUCT
WITHOUT
STARTING FROM SCRATCH.
131
 Licensing
ADVANTAGES DISADVANTAGES
1) licensing enables companies to 1) Less control over operations
AVOID tariffs, quotas, or similar 2) If licensee is successful and
export barriers when contract end can be
2) licensees are granted are free to competitor. To avoid licensee
adapt the licensed goods to local need to continuous to be
tastes. innovative.

Disney and Coca-Cola also make extensive use of licensing.

132
 JOINT VENTURE : Advantages
SHARING OF RISK JOINT VENTURES ALLOW
PARTNERS TO ACHIEVE
COMPANY CAN USE THE JOINT SYNERGY BY
VENTURE EXPERIENCE TO LEARN COMBINING DIFFERENT
ABOUT A NEW MARKET VALUE CHAIN
ENVIRONMENT. FINANCIAL, STRENGTHS.
MANAGERIAL RESOURCES TO
ENTER A FOREIGN MARKET ALONE.

134
 JOINT VENTURE : Advantages
ONE COMPANY MIGHT HAVE
1. IN-DEPTH KNOWLEDGE OF A LOCAL MARKET
2. AN EXTENSIVE DISTRIBUTION SYSTEM
3. ACCESS TO LOW-COST LABOR OR RAW
MATERIALS.

135
 JOINT VENTURE : Advantages
SUCH A COMPANY MIGHT LINK UP WITH A FOREIGN PARTNER POSSESSING

WELL-KNOWN BRANDS OR
CUTTING-EDGE TECHNOLOGY,
MANUFACTURING KNOW-HOW, OR
ADVANCED PROCESS APPLICATIONS.
A COMPANY THAT LACKS SUFFICIENT CAPITAL RESOURCES MIGHT SEEK
PARTNERS TO JOINTLY FINANCE A PROJECT. 136
 BEFORE THE JV :
However, all of the Jeeps
sold in China have been
imported from the United
States and subject to steep
import tariffs, driving Jeep
prices to sky-high levels

JOINT OWNERSHIP Jeep was one of the UNDER JOINT VENTURE -

Fiat, formed a 50/50 FIRST WESTERN AUTO AVOIDING TARIFFS,
joint venture with BRANDS REDUCING PRODUCTION
Chinese state-run
sold in China, and the COSTS, AND ALLOWING
Guangzhou Automobile COMPETITIVE JEEP PRICES
brand is well recognized
Group (GAC) to produce
Jeep vehicles in China.
and POPULAR there. in the world’s largest
automotive market

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DIRECT INVESTMENT

“OUR FUNDAMENTAL
PHILOSOPHY IS TO PRODUCE
WHERE WE SELL,”
says a Honda executive.

139
 FOREIGN INVOLVEMENT IS THE
DIRECT OWNERSHIP OF FOREIGN BASED
ASSEMBLY OR MANUFACTURING FACILITIES.

FOREIGN COMPANY CAN

BUY PART OR FULL INTEREST
IN LOCAL COMPANY.
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 DIRECT INVESTMENT : ADVANTAGES
The firm may have
1) LOWER COSTS IN THE 3) IMPROVE ITS IMAGE IN THE HOST
FORM OF CHEAPER LABOR COUNTRY BECAUSE IT CREATES JOBS.
OR RAW MATERIALS
FINALLY, THE FIRM KEEPS FULL CONTROL OVER
2) FOREIGN GOVERNMENT THE INVESTMENT AND THEREFORE CAN
INVESTMENT INCENTIVES DEVELOP MANUFACTURING AND MARKETING
POLICIES THAT SERVE ITS LONG-TERM
INTERNATIONAL OBJECTIVES.

141
Case study : L’Oreal and Revlon exit China
• The largest market for cosmetics is North America (1st), Japan (2nd )
and China (3rd).
• L'Oréal face competition from local players. Weak understanding of
Chinese consumer tastes.
• L'Oréal mistake : Cosmetics did not use traditional Chinese
practice – medicinal and herbal.
• Revlon mistake 1 : selling at high end stores and mid tier retailers
(local supermarket and community stores). To consumer selling at
mid tier suggested that the brand is not of high quality.
• Revlon mistake 2 : standardize product no adaption.

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 TO SUCCEED IN GLOBAL MARKETS,
FIRMS CAN
NO LONGER RELY EXCLUSIVELY
ON THE TECHNOLOGICAL SUPERIORITY
OR CORE COMPETENCE
THAT BROUGHT THEM PAST SUCCESS
144
In the twenty-first century, firms must look toward new strategies that will enhance
environmental responsiveness. In particular, they must pursue “entrepreneurial
globalization” by

DEVELOPING FLEXIBLE ORGANIZATIONAL

CAPABILITIES,
INNOVATING CONTINUOUSLY, AND
REVISING GLOBAL STRATEGIES.
 THE PARTNER THAT PROVES TO BE THE
FASTEST LEARNER CAN ULTIMATELY
DOMINATE THE RELATIONSHIP.
Samsung (All the designers work side by side on open floors. As noted in a
company profile, “the walls between business units are literally
nonexistent.”) and Sony
1. COUNTRY AND MARKET
CONCENTRATION A market expansion 2. COUNTRY CONCENTRATION
strategy that involves targeting a AND MARKET DIVERSIFICATION A
limited number of customer segments market expansion strategy in which
in a few countries. a company serves many markets
in a few countries.

3. COUNTRY DIVERSIFICATION
AND MARKET CONCENTRATION A 4. COUNTRY AND MARKET
market expansion strategy whereby DIVERSIFICATION The
a company seeks out the world corporate market expansion
market for a product. strategy of a global,
multibusiness company.
147
“YOU HAVE TO BE LOCAL AND AS STRONG AS
THE BEST LOCALS, BUT BACKED BY AN
INTERNATIONAL IMAGE AND STRATEGY.”

L'Oréal CEO

148
• The sensitivity of products can be represented on a two-
dimensional scale,

The vertical axis the

degree for product
adaptation needed
eg. Food is adaption

The horizontal axis shows environmental sensitivity, eg. Intel has sold
more than 100 million microprocessors because a chip is a chip
anywhere around the world
149
150
151
1. The participants remain
INDEPENDENT subsequent to
the formation of the alliance.
2. The participants share the
BENEFITS OF THE ALLIANCE
as well as control over the
performance of assigned tasks.
3. The participants make
ongoing CONTRIBUTIONS IN
TECHNOLOGY, PRODUCTS, and
other key strategic areas.

152