- 1. International Marketing15th editionPhilip R. Cateora, Mary
C. Gilly, and John L. GrahamMcGraw-Hill/Irwin Copyright 2011 by The
McGraw-Hill Companies, Inc. All rights reserved.
2. Introduction Confronted with increasing global competition
forexpanding markets, multinational companies arechanging their
marketing strategies and alteringtheir organizational structures
Comprehensive decisions must be made regardingkey strategic
choices, such as standardization vs.adaptation, concentration vs.
dispersion, andintegration vs. independence The flexibility of a
smaller company may enable it toreflect the demands of global
markets and redefineits programs more quickly than
largermultinationals Roy Philip12-2 3. Overview Global marketing
management Planning for global markets Alternative market-entry
strategies Exporting Contractual agreements Strategic international
alliances Direct foreign investment Organizing for global
competition Locus of decision Centralized vs. decentralized
organizations Roy Philip 12-3 4. Global Perspective:The British
Sell another Treasure Grandiose mergers more often destroy
brandsthan strengthen them, particularly when thosebrands are such
delicate confections as chocolatebars and gooey eggs Kraft (US)
proposed to buy Cadbury (Britain)for$17 billion in September 2009;
Kraft finallybought Cadbury in January 2010 for some $19billion in
cash and stock Studies have shown that three-quarters of
mergersfail to produce any benefits of shareholders andmore than
half actually destroy share value Roy Philip12-4 5. Global
Marketing Management (1 of 2) 1970s standardization versus
adaptation 1980s global integration versus localresponsiveness
1990s global integration versus localresponsivenessRoy Philip12-5
6. Global Marketing Management (2 of 2) The trend back toward
localization Caused by the new efficiencies of customization Made
possible by the Internet Increasingly flexible manufacturing
processes From the marketing perspective customization isalways
best Global markets continue to homogenize anddiversify
simultaneously Best companies will avoid trap of focusing oncountry
as the primary segmentation variableRoy Philip12-6 7. The Nestle
Way Evolution Not Revolution Nestle worlds biggest marketer of
infant formula,powdered milk, instant coffee, chocolate, soups,
andmineral water Nestle strategy Think and plan long term
Decentralize Stick to what you know Adapt to local tastes Long-term
strategy works for Nestle Because the company relies on local
ingredients Markets products that consumers can afford Roy
Philip12-7 8. Benefits of Global Marketing When large market
segments can be identified Economies of scale in production and
marketing Important competitive advantages for global companies
Transfer of experience and know-how Across countries through
improved coordination andintegration of marketing activities
Marketing globally Ensures that marketers have access to the
toughestcustomers Market diversity carries with it additional
financial benefits Firms are able to take advantage of changing
financialcircumstances Roy Philip12-8 9. Planning for GlobalMarkets
(1 of 2) Planning is the job of making things happen that mightnot
otherwise occur Planning allows for: Rapid growth of the
international function Changing markets Increasing competition, and
the Turbulent challenges of different national markets Planning is
both a process and philosophy; it relates tothe formulation of
goals and methods of accomplishingthem Corporate planning,
Strategic planning, and TacticalplanningRoy Philip 12-9 10.
Planning for GlobalMarkets (2 of 2) The keys to successful planning
are as follows: Company objectives and resources International
commitment The planning process Phase 1 Preliminary analysis and
screening Phase 2 Adapting marketing mix to target markets Phase 3
Developing the marketing plan Phase 4 Implementation and control
Roy Philip 12-10 11. CompanyObjectives and Resources Each new
market requires a complete evaluation,including existing
commitments, relative to theparent companys objectives and
resources Defining objectives clarifies the orientation ofthe
domestic and international divisions,permitting consistent policies
Roy Philip12-11 12. International Commitment Commitment in terms of
Dollars to be invested Personnel for managing the international
organization Determination to stay in the market long enough to
realize a return in investments The degree of commitment to an
international marketing cause reflects the extend to a companys
involvementRoy Philip12-12 13. International Planning
ProcessExhibit 12.1Roy Philip 12-13 14. The Planning ProcessPhase I
Preliminary analysis and screening (matchingcompany and country
needs)Adapting marketing mix to target markets (aPhase IImore
detailed examination of the componentsof the marketing
mix)Developing the marketing plan (situationPhase III analysis,
entry mode, and specific actionprogram for the specific
market)Implementation and control (implementing ofPhase IVspecific
plans and anticipation of successfulmarketing) Roy Philip 12-14 15.
Alternative Market-Entry Strategies (1 of 2) An entry strategy into
international market should reflecton analysis Market
characteristics Potential sales Strategic importance Strengths of
local resources Cultural differences Country restrictions Company
capabilities and characteristics Degree of near-market knowledge
Marketing involvement Management commitmentRoy Philip 12-15 16.
Alternative Market-EntryStrategiesExhibit 12.2Roy Philip12-16 17.
Alternative Market-EntryStrategies (2 of 2) Companies most often
begin with modest exportinvolvement A company has four different
modes of foreignmarket entry Exporting Contractual agreements
Strategic international alliances Direct foreign investments Roy
Philip12-17 18. Exporting (1 of 2) Exporting accounts for some 10%
of globalactivity Direct exporting the company sells to acustomer
in another country Indirect exporting the company sells to a
buyer(importer or distribution) in the home country,who in turn
exports the product Roy Philip 12-18 19. Exporting (2 of 2) The
Internet Initially, Internet marketing focused on domestic sales A
surprisingly large number of companies started receiving orders
from customers in other countries, Resulting in the concept of
international Internetmarketing (IIM) Direct sales Particularly for
high technology and big ticket industrial products Roy Philip12-19
20. Contractual Agreement(1 of 2) Contractual agreements Long-term,
Nonequity association between a company andanother in a foreign
market Licensing A means of establishing a foothold in foreign
marketswithout large capital outlays A favorite strategy for small
and medium-sizedcompanies Legitimate means of capitalizing on
intellectualproperty in a foreign marketRoy Philip 12-20 21.
Contractual Agreement(2 of 2) Franchising Franchiser provides a
standard package of products, systems, and management services
Franchise provides market knowledge, capital, and personal
involvement in management Expected to be the fastest-growing
market-entry strategy Two types of franchise agreements Master
franchise Gives the franchisee the rights to a specific area
withthe authority to sell or establish subfranchises Licensing Roy
Philip12-21 22. Strategic InternationalAlliances (1 of 4) A
strategic international alliance (SIA) A business relationship
established by two or more companies to cooperate out of mutual
need To share risk in achieving a common objective SIAs are sought
as a way to shore up weaknesses andincrease competitive strengths
Firms enter SIAs for several reasons Opportunities for rapid
expansion into new markets Access to new technology More efficient
production and innovation Reduced marketing costs Strategic
competitive moves Access to additional sources of products and
capitalRoy Philip12-22 23. Building Strategic AlliancesExhibit 12.3
Roy Philip12-23 24. Strategic InternationalAlliances (2 of 4) Many
companies entering SIAs To be in strategic position to be
competitive To benefit from the expected growth in the single
European market International joint ventures (IJVs) A partnership
of two or more participating companies that have joined forces to
create a separate legal entity Roy Philip 12-24 25. Strategic
InternationalAlliances (3 of 4) Four characteristics define joint
ventures: JVs are established, separate, legal entities The
acknowledged intent by the partners to sharein the managementof the
JV There are partnerships between legallyincorporated entities such
as companies,chartered organizations, or governments, and
notbetween individuals Equity positions are held by each of the
partnersRoy Philip 12-25 26. Strategic International Alliances (4
of 4) Consortia Similar to joint ventures and could be classified
assuch except for two unique characteristics Typically involve a
large number of participants Frequently operate in a country or
market in which none of the participants is currently active
Consortia are developed to pool financial andmanagerial resources
and to lessen risks Roy Philip12-26 27. Direct Foreign Investment
Factors that influence the structure andperformance of direct
investments Timing The growing complexity and contingencies
ofcontracts Transaction cost structures Technology transfer Degree
of product differentiation The previous experiences and cultural
diversity ofacquired firms Advertising and reputation barriersRoy
Philip 12-27 28. Organizing forGlobal Competition Devising a
standard organizational structure is difficult Because
organizations need to reflect a wide range of company- specific
characteristics Companies are usually structured around one of
threealternatives Global product divisions responsible for product
sales throughout world Geographical divisions responsible for all
products and functions within a given geographical area A matrix
organization consisting of either of these arrangements With
centralized sales and marketing run by a centralized functional
staff, or a combination of area operations and global product
management Roy Philip12-28 29. Schematic Marketing Organization
Plan Combining Product, Geographic, and Functional
ApproachesExhibit 12.4 Roy Philip 12-29 30. Locus of decision
Considerations of where decisions will be made,by whom, and by
which method constitute amajor element of organizational strategy
Corporate headquarters International headquarters Regional levels
National levels Local levels Tactical decisions normally should be
made atlowest possible level Roy Philip 12-30 31. Centralized
VersusDecentralized Organizations Most organizational patterns of
multinationalfirms fit into one of three categories Centralized
Regionalized Decentralized No single traditional organizational
plan isadequate for todays global enterprise Seeking to combine the
economies of scale of aglobal company with the flexibility and
marketingknowledge of a local companyRoy Philip 12-31 32. Summary
(1 of 2) To keep abreast of the competition and maintaina viable
position for increasingly competitivemarkets, a global perspective
is necessary Cost containment, customer satisfaction, and agreater
number of players mean that everyopportunity to refine
international businesspractices must be examined in light of
companygoalsRoy Philip 12-32 33. Summary (2 of 2) Important avenues
to global marketing thatmust be implemented in the planning
andorganization of global marketing management Collaborative
relationships Strategic international alliances Strategic planning
Alternative market-entry strategiesRoy Philip12-33
