International Marketing

VTHN
Email: [email protected]
 Chapter 1: An Overview
CONTENT

1. An overview of IM
2. The differences between domes9c marke9ng & IM
3. The Orienta9on of IM
4. IM process
1.1 The concept of IM

International marketing focuses on the need to create, communicate

and deliver value internationally (Czinkota and Ronkainen, 2012).

International marketing is the performance of business activities that

direct the flow of a company’s goods and services to consumers or
users in more than one nation for a profit (Philip R. Cateora, 2021).
 Concepts
“Foreign and domestic marketing are the same in that the
purpose is to create and manage profitable exchange
relationships between an organisation and its markets.

This is done by satisfying the needs and wants of a particular

market more efficiently than competitors.

Essentially the same marketing principles, concepts and

techniques are used internationally as are at home”

(Toyne & Walters, 1989)

 1.2 Reasons for entering
international markets
Domestic market International market Other
- small, fragmented, - large market size - suppliers follow their
saturated - market expansion customers interna<onally
- slow growth - investment opportunities - extending PLC
- competitive pressure - benefits of
- excess capacity internationalization
- compete successfully - search for resources
- policies to promote foreign
 IM
task
 IM
task
e.g most Western governments imposed restrictions on trade
with Iraq to protest against it accruing weapons of mass
destruction (although no such weapons were found when the
USA and its allies invaded the country).

e.g Western governments decided to encourage trade with Libya

as a reward for not pursuing weapons of mass destruction.

In both cases, opportunities were created for international

companies
 Marketing Decision Factors

Controllable elements Uncontrollable elements

- Marke?ng mix - Domestic environment
- Firm characteris?cs (Political/legal forces, Economic
climate, Competitive structure)
- Research
- Foreign environment
(7 factors)
 The Self-Reference Criterion &
Ethnocentrism
● The SRC is an unconscious reference to
one’s own cultural values, experiences, and
knowledge as a basis for decisions.

● Closely connected is ethnocentrism, that

is, the notion that people in one’s own
company, culture, or country know best
how to do things.
 Analytical Framework to avoid
errors in business decisions
● Define the business problem or goal in home-country cultural
traits, habits, or norms.
● Define the business problem or goal in foreign-country cultural
traits, habits, or norms through consultation with natives of the
target country. Make no value judgments.
● Isolate the SRC influence in the problem and examine it carefully to
see how it complicates the problem.
● Redefine the problem without the SRC influence and solve for the
optimum business goal situation.
 Stages of IM Involvement
No Direct Infrequent Regular
International Global
Foreign Foreign Foreign
Marketing Marketing
Marke7ng Marketing Marketing

Do not Temporary Firm has - Fully - Treat the world

actively surpluses permanent committed to as on market
cultivate caused by productive IM activities - market
customers variations in capacity - Seek markets segments are
outside production devoted to the all over the defined by
national levels or production of world and sell income levels,
boundaries demand goods and products for usage patterns, or
overseas services to be markets in other factors that
marketed in various frequently span
foreign markets countries countries and
 2. The differences between
domestic marketing & IM
Basis for comparison Domes<c marke<ng International marketing
Business operation In a single country More than one country

Nature of customers Almost same Variation in customer tastes and preferences.

Area served Small Large

Government interference Less Comparatively high

Risk factor Low Very high

Capital requirement Less Huge

Use of technology Limited Sharing and use of latest technology.

Research Required but not to a very Deep research of the market is required because
high level. of less knowledge about the foreign markets.
 2. The differences between
domestic marketing & IM
The goal of a business is to make a profit by promoting, pricing and distributing
products for which there is a market.

The uniqueness of foreign marketing comes from the range of unfamiliar problems
and the variety of strategies necessary to cope with the different levels of
uncertainty encountered in foreign markets.

e.g Even the impact of global incidents such as COVID-19 is different in different
markets.
 Comparison of Single-Country Marketing
Strategy & Global Marketing Strategy
Single-Country Marketing strategy Global Marketing Strategy

Target market strategy Global market participation

MM development MM development
- Product - Product (adaption or standardization)
- Price - Price (adaption or standardization)
- Place - Place (adaption or standardization)
- Promotion - Promotion (adaption or standardization)
Concentration of marketing activities
Coordination of marketing activities
Integration of competitive moves
 3. The Orientation of IM
(Keegan & Green 2007, adapted from Permlutter 1969)
1 2 3 4

Ethnocentric Polycentric Regiocentric Geocentric

orientation orientation orientation orientation
- do not adapt - equal importance - economic, - to target “global
their products to to every country’s cultural or political consumers” who
the needs and domestic market similarities among have similar tastes
wants of other - believe in regions - to borrow from
countries where uniqueness of every country what
they have every market is best
operations
 3. The Orientation of IM
Domestic market extension orientation
- domestic business is its priority and foreign sales are seen as a profitable extension of
domestic operations.
- where demand is similar to the home market and its domestic product will be acceptable.

Multi-domestic market orientation

- country-by-country basis, with separate marketing strategies for each country (almost
independent programme for each country)
- subsidiaries operate independently, have separate marketing mixes, products are adapted for
each market with minimal coordination with other country markets
 3. The Orientation of IM
Global marketing orientation
- marketing activity is global and its market coverage is the world
- to standardise as much of the company effort as is practical on a worldwide basis
- the world as a whole is viewed as the market and the firm develops a global marketing
strategy, although pricing, advertising or distribution channels may differ in different
markets (e.g. a standardised product but country-specific advertising)
- E.g. Ipad, PlayStation
 38% of European SMEs are
now 'internationally active' i.e.
exporting products to at least
one other country according to
recent research

Binks (2015)
 4. IM process Implement &
evaluate MM

Product/service
Market & planning and
potential market development Develop
analysis Select target marketing mix
markets & entry
modes
1. From a marketing perspective consider the evidence for and
against the idea that we are moving towards a global world.

2. Bring current international stories relating to organisations,

countries or people

3. What do you think have been the consequences of the COVID-19

pandemic?”
 CHAPTER 2

INTERNATIONAL
ENVIRONMENT
VTHN
[email protected]
CONTENTS

01 The impact of international

environmental factors

02 Global trends

03 Environmental Analysis
Model
“For now, the world seems to be characterized by relatively strong
growth in the United States, disappointing but improving growth in
Europe and Japan, slowing growth in China and weakness in many
other emerging markets—the one big exception being India, where
growth is actually quite impressive” (Deloitte, 2016)
 1.1 Overview

Need to understand
Pace of change increasing global trends & trends
within individual
Lack of familiarity with markets
international environment
Objective & experiential
Lack of knowledge about knowledge
foreign markets creates
uncertainty Constant scanning of
markets
 1.2 Global environment

- Russia - Ukraine (02/2022)

- Connected Africa
- Geo-political realignment
- US-China trade war
- Depopulation waves
- Xi-Putin relationship
- Power of global brands
- Growing transparency
- Cyber-insecurity
- Economic power shift – emerging markets
- Changing consumer demographics & expectations
 1.3 Political forces
CHÍNH TRỊ

The role of the government

1. those that promote (i.e., encourage or facilitate) IM marketing
transactions; chính sách thúc đẩy
2. those that impede such transactions; cản trở, vd 1988 mianma cấm xuất khẩu
gạo để bảo vệ thị trường trong nước
3. those that compete with or replace IM transactions by private
business firms.
cạnh tranh:
Trung quốc vs Mỹ
Government controls

Export controls License requirements Tariffs

kiểm soát xuất khẩu giấy phép thuế nhập/xuất khẩu
- restrict the shipment of - requiring licenses that be - protective tariffs are high
defense products, protect obtained before goods may b/c it is designed to protect
the domestic economy from be exported/ imported to domestic industry
a drain of scarce materials, & regulate the nature of - revenue tariffs are low
enhance national security external trading relationships
b/c it is designed to
- forms of protectionism or generate maximum
trade barriers revenue for the
government
Government controls
Protection logic and illogic

• protection of an infant industry

• protection of the home market
• need to keep money at home
• encouragement of capital accumulation
• maintenance of the standard of living and real wages
• conservation of natural resources
• industrialisation of a low-wage nation
• maintenance of employment and reduction of unemployment
• national defence
• increase in business size
• retaliation and bargaining
Government controls

Monetary barriers

these place monetary restrictions on trade, e.g. availability of foreign exchange

for imports.

Market barriers

barriers to trade imposed in an attempt to promote domestic industry.

Government controls chính phủ kiểm soát thuế

Tariffs is a tax imposed by a government on goods entering at its borders.

increase
• inflationary pressures
• special-interest privileges
• government control and political considerations in economic matters the
number of tariffs (they beget other tariffs)
weaken
• balance-of-payments positions
• supply-and-demand patterns
• international understanding (they can start trade wars)
restrict
• manufacturers’ supply sources
• choices available to consumers
• competition.
Government controls

Quotas hạn ngạch Extra taxes Exchange controls

thuế giá trị gia tăng kiểm soát ngoại tệ
- absolute quotas limit - type of value-added tax, - limit the amount of
absolutely the amount that but does not affect domestic foreign currency that an
can be imported (extreme case producers. importer pay for goods
is the zero quota/embargo) - restrict imports and thus purchased and an exporter
- tariff quotas permit affect an exporter. receive & hold for goods
importation of limited sold to a foreign country.
quantities at low rates of
duty (excess subject to a
substantially higher rate)
- voluntary quotas to protect
domestic companies
Promotional activities
những hoạt động khuyến khích của chính phủ

Government export promotion programs, and programs for IM activities in general,

are designed to deal with the following major barriers:
1. lack of motivation , as IM is viewed as more time-consuming, costly, risky, and
less profitable than domestic business;

2. lack of adequate information ;

3. operational/resource-based limitations.
State trading
- government engagement in commercial operations, directly
or through agencies under its control, either in place of or in
addition to private traders.

Action Against Government

- Civil War
- Terrorism
- Pressure Groups
- Strikes
 1.4 Economic forces
Key Economic Variables
Các đặc điểm dân số, thị trường phụ thuộc vào dân số
- Population characteristics: total population and location of the population within the country
(for example, degree of urbanization)
thu nhập
- Income distribution: determine purchasing power, ownership of consumer durable goods
- GNI per capita - Natural Resources cơ sở hạ tầng
thu nhập quốc dân

- Growth rate - Taxation

- Inflation “Chinese consumers and
- Infrastructure: communications, energy, & transportation facilities. companies save too
much, while the West
saves too little”
Roach, cited on BBC, 2012
 Market development
WORLD BANK CLASSIFICATION Source - World Development Indicators 2018. World Bank
1. low-income economies (GNI per capita <US$955)
(Burundi, Tanzania, Rwanda, Chad)

2. lower middle-income economies (GNI per capita US$996 - US$3,895) (India, Egypt,
Nigeria, Vietnam)

3. upper middle-income economies (GNI per capita US$3,896 - US$12,055)

(Botswana, Bulgaria, Mexico, Romania, Thailand)

4. high-income economies (GNI per capita >US$ 12,055) (Argentina, Croatia, Panama, Bahrain,
France, Israel, Japan)

Developed countries Australia, New Zealand, Denmark, UK, US, Japan

Developing countries Malaysia, Costa Rica, Egypt, Uruguay
 Emerging markets
• Nations undergoing rapid economic growth and industrialization
• Significant secondary sector
• Rising affluence and education
• Emerging middle class
• Developing infrastructure
• Slowing EM economies
• BRICs with annual GDPs > US$1 trillion (Brazil, Russia, India, China, South
Africa(2010)), CIVETs (Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa)

• E7 (China, Russia, India, Brazil, Turkey, Mexico, Indonesia)

• BEMs (China (PRC), India, Indonesia, South Korea, Brazil, Mexico, Argentina, South Africa, Poland,
and Turkey)
“India is a bright spot among emerging markets”
(Moody’s, 2016)
 Some areas of change
- Asia are expanding trade, investment, and technology links by themselves, rather
than depending on Europe/ US in the past

- China is now the world’s largest exporter

- China and India are new ‘giants’ of the world

- The US, the EU, Hong Kong, Japan and South Korea are the five top major markets

- Latin America (Argentina, Chile, Mexico, Colombia, and Peru) – are growing rapidly and
economic conditions have improved significantly.
- Middle East and North African (MENA) region has lagged behind in economic
growth and globalization.
 Infrastructure

Transport (Road and rail networks)

Commercial (Banks, Distribution channels)
Communication (Technology, Media availability)
 2.1 Population trends
#1 World population reach 8.1 bn. by 2025
#2 Aging populations
#3 Emerging global middle class
#4 Urban v rural divide
#5 Multi-cultural societies
#6 Rising life-expectancy
#7 Migration
#8 Talent gap

“Sixty per cent of the global population lives in Asia (4.4 bill)”
(United Nations, 2016)
 2.2 Tech trends
# grow to 5.3 bn. Internet uses by 2023
# Take-up of tech products varies across countries
# Asia-Pacific region most growth in new internet users
# 2.5 bill smartphone users in 2019 (Statista, 2019)
# Use of social media
# Worldwide retail E-commerce sales will reach $2.8 trill. (Shopify, 2018)
“Facebook had 2.27 billion monthly active users”
(Facebook, 2018)

APPS Instagram YouTube Twitter

900 bn. hours > 1 bn. people use

using apps (USA YouTube, local versions
Today, 2017) in 88 countries (YouTube,
2016)
Instagram 800 317 million active
mill users, 50 Twitter users
mill active (Statista, 2016)
“The online FMCG market is set to grow by
17% between now and 2022” (Forrester, 2018)
3. Environmental Analysis Model
 3.1 SWOT analysis

Helpful Harmful

Internal Strengths Weaknesses

External Opportunities Threats

 3.2 PEST analysis
Political Technological

Economic Legal

Social Environemtal
PEST analysis vs SWOT analysis

Strengths Political

Weaknesses Economic

Opportunities Social

Threats Technological
 International institutions
● WTO

● ASEAN

● AFTA

● APEC

● IMF
 Summary
• General lack of familiarity with markets
• Every market different – don’t make assumptions
• A wide range of factors to take into consideration
• Fast changing global marketplace
• Importance of continuous monitoring of international markets to identify
changes
• Very difficult to eliminate risk, but can manage it
 ?
What are today’s current issues potentially affecting international
marketing and what impact are they likely to have?
 Useful Websites

journalofworldbusiness.com unctad.org
wto.org Internetworldstats.com
worldbank.org globaltrends.com
oecd.org Mckinsey.com
 CHAPTER 3
INTERNATIONAL MARKET SELECTION

VTHN
[email protected]
01 Segmentation process 04 Market selection process,
procedure, and strategy

Regional, trans-na8onal
02 and global segments 05 Evalua8ng overall foreign
market por=olios

03 Global market segmentation

1. MARKET SEGMENTATION
đồng chủng

The process of classifying customers into homogeneous groups

with similar demand and/or preferences need: nhu cầu 5 bậc
demand: khả năng chi trả cho want
(Bruning et al ., 2009, p. 1500) want: nhu cầu có đặc thù

A process whereby unique customer groups can be identified in

country-based/ individual consumer-based groups (Bruning et al .,
2009, p. 1500).
1 MARKET SEGMENTATION
- Interna(onally oriented firms largely depend on resource based
advantages, high quality products (tradi(on, chance, or produc(on
philosophy), and long-term personal rela(onships and commitment in
developing their niche strategies
cần xác định các tính
- can generate specializa(on. measurability
accessibility
profitability
- involves costs, risks, and possible weaknesses actionability

- analysis of market behavior: channels, customer segments, or use

occasions as well as the geographic dimension
2 SEGMENTATION SCENARIOS
Country segments

Regional segments
- Similarity across regional level

Transnational segments
- Segments based on similar needs across a group of countries

- Country clusters

Global Segments
- Segments transcending national boundaries with common needs
3 GLOBAL SEGMENTS
! “Homogeneous entities categorized by psychographic and behavioural similarities”
(Doole, Lowe & Kenyon, 2018)

! “.. defined based upon market variables other than national boundaries (Hassan, 2011)
! Share core values, attitudes and aspirations
! Recognition that world markets consist of similarities and differences as
distinguishing characteristics
! Segmentation across markets rather than within - consumers, not countries
! Problem if geographically spread
GLOBAL MARKET SEGMENTATION

“The process of identifying specific segments, whether they be country

groups or individual consumer groups, of potential customers with
homogeneous attributes who are likely to exhibit similar responses to a
company’s marketing mix”
(Hassan & Katsanis, 1991)
GLOBAL SEGMENTS

Teenagers Technology geeks

Affluent consumers Interna/onal Similarity of needs

business travelers depends on product
categories e.g. high-tech
consumer durables, travel-
related products
GLOBAL SEGMENTS

“Global consumers are “China remains an engine

willing to put their money of growth for luxury goods
where their heart is when as the country’s middle
it comes to goods and class con<nues to grow in
services from companies size and purchasing
committed to social power”
responsibility”
(Nielsen, 2014) (Bain & Co, 2016)
“GLOBAL ELITE” SEGMENT
“Affluent consumers who are well travelled and have the money to
spend on pres6gious products with an image of exclusivity”

• Increased wealth
CHARACTERISTICS • Well travelled
• Prestige products universally
• High quality products
GLOBAL TEEN SEGMENT
“Teenagers sharing memorable experiences which are reflected in their consumption
behavior. Young consumers whose cultural norms have not become ingrained and who
can share universal needs, wants and fantasies”

- Internet
- Social media
- Interna0onal educa0on
- Frequent travel
CHARACTERISTICS
- Apprecia0on of future trends, fashion and music
- Self- conscious about way they look
- Role models influence choices
- Music important communica0ons tool
GLOBAL TEEN SEGMENT
• As cultures converge, teenagers around the world become more similar
• They use well-known global brands like iPhone, Facebook, Nike, YouTube,
Tiktok, Coca Cola …
• They wear the same clothes and want to look and feel right…
GLOBAL KIDS

Are children around Watch TV/Netflix, play International success of TV

the world becoming computer games, programmes like
more similar? download films, go to Teletubbies, Harry Potter
McDonalds/ KFC books and films, Nintendo
games, Disney
PSYCHOGRAPHIC SEGMENTATION
to group prospective, current or previous customers by their shared
personality traits, beliefs, values, attitudes, interests, and lifestyles
and other factors”

Porsche Example
● Top Guns (27%) an ambi3ous & driven individual who cares about power & control
● Eli3sts (24%) individual from old money (blue blood), car is just a car
● Proud Patrons (23%) reward for hard work
● Bon Vivants (17%) thrill seekers and jet seJers, excitement & adventure
● Fantasists (9%) form of escape, does not care about impressing others
(Keegan & Green, 2015)
 VALS SEGMENTATION
(Values – A4tudes – Lifestyles)
HIGH RESOURCES LOW RESOURCES

Innovators thích trải nghiệm

Believers theo truyền thống, bảo thủ

Thinkers hay cân nhắc, cần nhiều t.tin

Strivers thích nghe ý kiến để đưa quyết định
Achievers
Makers ưu tiên về thuộc tính chức năng phù
hợp với nhu cầu
Experiencers trẻ, thích thể hiện bản thân
Survivors lựa chọn an toàn, đủ khả năng chi
tiêu
GLOBAL, LOCAL & FOREIGN

Global Consumer Culture Local Consumer Culture Foreign Consumer Culture

Posi<oning (GCCP) Posi<oning (LCCP) Positioning (FCCP)

Brand symbolic of global Brand global, but Build brand mystique

consumer culture portrayed as an intrinsic around specific foreign
part of local culture culture, usually with
positive connotations
định hướng theo quốc gia cụ thể
vd: đồng hồ thuỵ sĩ
“The fact that pizza-loving consumers are found in many countries does
not mean they are eating the exact same thing.” (Keegan & Green, 2008)

“Globalization will probably never reduce the complex human system to

a state of homogeneity” (Rugimbana & Nwankwo, 2003)
TRENDS INFLUENCING GLOBAL CONSUMPTION

- Spread of global consumer culture

- Global flow of dis8nc8ve, cultural resources
- Increases in GNP per capita
- Rise in life expectancy
- Increase in educa8on & literacy levels
- Growth in urbaniza8on in developing countries
- Advances in transporta8on and communica8ons
- World travel
- Global acceptance of certain consumer products (beverages,
fast food, fashion, cars, electronics)
GLOBAL CONSUMPTION TRENDS IN 2022
4.1 MARKET SELECTION PROCESS
tuỳ vào mục tiêu của doanh nghiệp mà lựa chọn chủ động/bị động

Reactive approaches Proactive approaches

passive, informal, unsystematic, ac:ve in ini:a:ng market
responding to situation, used by small selec:on, formal process
and medium-sized exporters, short
term profit motive
influencing factors
- Psychic distance – feeling of uncertainty about foreign
markets, perceived difficulty of finding informa:on
- Cultural distance – the perceived differences between the
manager’s own and the des:na:on culture
- Geographic distance – proximity.
4.2 MARKET SELECTION PROCEDURES
mở rộng dựa trên các thị trường mà có nét tương đồng sàng lọc có hệ thống đến khi tìm đc thị trường tối ưu nhất

Expansive methods Contractible methods

home market starting point, based on optimal market selection, starts with
similarities and experience, use of large number, systematic screening
market clusters selection leading to elimination
4.2 MARKET SELECTION PROCEDURES
3 stages of ContracDble methods
đánh giá sơ bộ
1. Preliminary screening criteria for examining countries are iden3fied
(feasible countries)

2. Determines country characteris3cs in evalua3ng marke3ng opportuni3es and

how each should be weighted (opera3ng risks, market poten3al, costs, and
poten3al local and foreign compe33on)

3. Ranking of markets on the basis of scores derived

Potential markets screening Social-economic segmentation
Demand patterns
Step 1: Geographic segmentation Quantitative indicators
Qualitative indicators
Supply patterns
Competition
General market indicators
Product-specific market indicators
→ Distribution
⤑ Media
Prohibitive product

⤑
→
characteristics
Prohibitive market characteristics
Estimation of market potentials→⇢ Estimation of sales potentials
Markets
Segments

⤑
→
EsAmaAon of profitability
→ Ranking of markets/ segments
Strategic planning Final market selecAon
⤑
Potential markets screening
Step 2: Customer segmenta1on

On the demand side behavior, lifestyle, attitudes, buying patterns, and decision-
making must be included for both consumer and industrial markets

On the supply side - competitors nationalities, capacities, activities

- distribution channels characteristics availability,
capacities, and activities performed
- media situation availability, costs, circulation, and
priorities.

Step 1 + 2 → estimate market share, estimate profitability

4.2 MARKET SELECTION PROCEDURES
Market spreading lan toả Market concentraAon
tập trung

● Alloca'ng resources over large ● Channelling resources into small

number of markets number of markets
● Fast growth rate at early stages ● Devo'ng high levels of marke'ng
of expansion effort & resources to each market
● Focus on reducing risk ● Slow and gradual expansion to
● Can create entry barriers to other countries or segments
compe'tors ● More intensive development can
create higher market shares and
strong compe''ve posi'on
tập trung tốn nhiều chi phí/ tài nguyên hơn do yêu cầu tính
đặc thù cho thị trường tập trung
 INFLUENCING FACTORS đọc thêm

Market spreading Market concentration

Company factors
High management risk-consciousness Low management risk-consciousness
Objective of growth through market development Objec<ve of growth through market penetra<on
Little market knowledge Ability to pick ‘best’ markets

Product factors

Limited specialist uses General uses

Low volume High volume
Nonrepeat Repeat-purchase product
Early or late in product life cycle Middle of product life cycle
Standard product saleable in many markets Product requires adaptation to different markets
 Market spreading Market concentration
Market factors
Small markets – specialized segments Large markets – high volume segments
Unstable markets Stable markets
Many similar markets Limited number of comparable markets
New or declining markets Mature markets
Low growth rate in each market High growth rate in each market
Large markets are very competitive Large markets are not excessively compeBBve
Established competitors have large share of key markets Key markets are divided among many compeBtors
Low source loyalty High source loyalty

Marke1ng factors
Low communicaBon costs for addiBonal markets High communication costs
Low order handling costs for addiBonal markets High order handling costs
Low physical distribuBon costs for addiBonal markets High physical distribution costs
Standardized communicaBon in many markets Communication requires adaptation to
different markets
5. EVALUATING OVERALL FOREIGN MARKET PORTFOLIOS

Market/Country attractiveness Competitive strength

• Market size (total and segments) • Market share (achievable)

• Market growth (total and segments) • Marke?ng ability and capacity
• Competitive conditions • Product and posi?oning fit
• Market uncontrollables (cultural, legal • Quality of distribu?on services
and political environments) • Patents
• Price levels • Flexibility
• Profitability
CompeGGve strength strength of a
product/company as compared to
compe3tors.
Invest: The market is very a.rac0ve (size & its poten0al for
growth), suitable for entry and major investment.

Divest/ license: The company will have problems or need

to make heavy investments to gain some market share.
(be.er to do through ‘licensing’ - least demanding of
resources).
Joint Venture: Market attractive but difficult, require huge
investments/resources to gain considerable/acceptable
market share

Export: The market is not attractive due to its size or segment growth, not to make
heavy investments & to sell the product through exports.

Selective strategy: fierce competition & difficult to maintain a stable market share,
could invest if product/positioning fit with the market or have a powerful brand.
 ?
Give examples of global market segments and companies that
are marketing on that basis. Can small and medium-sized
enterprises market successfully to such segments? Explain.
 CHAPTER 4
MARKET ENTRY
STRATEGIES
VTHN
[email protected]
 1. Entry as a channel decision
2. Importance of the entry decision
CONTENTS 3. Entry strategies
4. Factors influencing choice of entry mode
5. Selecting the entry mode
 INTRODUCTION
• Key strategic issue
• First stage of channel decision entry mode: quyết định gia nhập
• Channels between nations marketing plan: kế hoạch phát triển tại trị trg

• Initial or continuing entry

• Determines degree of control over mix

“An international market entry mode is an institutional arrangement

necessary for the entry of the company’s products, technology, and
human and financial capital into a foreign country/market.”
(Albaum, Duerr & Strandskov, International marketing and Export Management, 2011)
 1 CHANNEL STRUCTURE
A company’s interna0onal marke0ng channel is the path in the structure of
distribu0on through which the products of the company reach the final consumer or
user (marke0ng channels in foreign countries)

The structure of distribu0on for reaching any foreign market includes: intermediary
marke0ng agencies or ins0tu0ons
 2 IMPORTANCE OF THE ENTRY DECISION

- Critical decision
- Influences final price
- Inappropriate entry mode = failure
- Creates barrier to entry for competitors
- Help minimise risk
 2 THE WHOLE CHANNEL CONCEPT kênh phân phối

đi từ trụ sở chính

1. the headquarters’ organization developed by the manufacturer to implement its

international marketing operations

2. the methods used or channels through which the products are sent to foreign
markets – the channels between nations qua các kênh giữa các quốc gia
3. the means by which these products reach the target, final user or consumer in the
foreign markets, assuming that the importers are not the final users or consumers –
the channels within nations các kênh phân phối trong quốc gia
 3.1 THE ELEMENTS OF ENTRY STRATEGY

● the objectives and goals in the target market;

● needed policies and resource allocations;

● the choice of entry modes to penetrate the market;

● the control system to monitor performance in the market;

● a time schedule.
3.2 ALTERNATIVE MARKET ENTRY MODES

các liên minh chiến

lược
3.2 ALTERNATIVE MARKET ENTRY MODES
Channel between na<ons

Export Contractual Wholly - owned

trung gian subsidiaries
Indirect Export (via agents, Licensing/Franchising
trading co.) Acquisition
Foreign contract
Cooperative Export manufacturing Organic Growth
(Piggybacking) hợp tác với đối tác
- đối tác bán hàng giúp mình nhưng

trực tiếp
mặt hàng của đối tác và mình k
cạnh tranh nhau
Joint venture
Direct Export (Overseas
distributor/agent, overseas
sales subsidiary/staff)vd các trung gian xuất khẩu
EMC (export management company)
EB (export broker) - môi giới
EM (expoer merchant) - lái buôn - mua của nhãn hàng và đổi tên để bán lại vào thị trg đó
ECH (commission House)
Foreign buyers - mua lại bán giá cao hơn
 EXPORT
• Lowest level of commitment
• Different expor4ng op4ons
• Manufacture in one country, sold in another
• O>en first mode of entry used
• Many mul4na4onals s4ll export

Piggybacking “when a company sells its products abroad using another

company’s distribution facilities”
A model of antecedents and drivers of export
marketing strategy
Indirect & Direct export consumer goods

What is the difference between direct

and indirect channels of distribution?
Direct & Indirect exporting
EXPORT
3.2 ALTERNATIVE MARKET ENTRY MODES
Licensing Franchising
uỷ quyền, cấp phép
● Arrangement where licensor allows ● Different types e.g. business format
licensee to use patent rights, (retailers), manufacturer–wholesaler
trademarks, copyrights or know-how on (Coca Cola)
products or processes vd: an phước & piere cardin ● Franchisee fee + royalties
các hãng collab

● Payment as licensing fee and/or ● Supply components or products

royalties
● Independent franchisee
● Greater role than contract manufacturer

● May supply components

3.2 ALTERNATIVE MARKET ENTRY MODES
Contract manufacturing
hợp đồng sản xuất

● Manufacturing by proxy

● Firm’s product manufactured in the foreign market by another producer

● Only covers manufacturing not marke=ng

● May supply components/parts/raw materials

● Examples – pharmaceu=cals, electronics, cigareCes, clothing

3.2 ALTERNATIVE MARKET ENTRY MODES
3.2 ALTERNATIVE MARKET ENTRY MODES
Joint Venture liên doanh

• Two or more companies forming a separate company in which all partners have
equity and management voice
• Variable equity share
• Not all partners provide finance, could be factory, labour etc.
• Many governments insist on JVs for entry into market
• Examples:

“Regional joint ventures have proven to be an effective way to combine Nokia's global
technology leadership with strong local partners to accomplish faster and higher
market penetration in new and emerging markets” Nokia
3.2 ALTERNATIVE MARKET ENTRY MODES

“I learned a lot, I hope they learned a lot too, about how important it is for a local
partner to take the lead in the marke9ng area.”
President, True (TelecomAsia mobile brand following split with Orange)
3.2 ALTERNATIVE MARKET ENTRY MODES
Wholly - Owned Subsidiaries
Acquisition mua lại

• Acquisition of a going concern

• Part-share or 100%
• May be regulated e.g. Competition Commission
• High cost option
• Examples:

“DHL acquired too much and was unable to digest the business cultures properly.”
(International Freight Weekly, 2007)
3.2 ALTERNATIVE MARKET ENTRY MODES
Wholly - Owned Subsidiaries
Organic Growth tăng trưởng tự thân

Build company without help of partner 100% ownership, high cost tốn kém nhất
High level of commitment Level of experience important
Maybe equity regulations Examples Hyundai, Tesco
3.2 ALTERNATIVE MARKET ENTRY MODES

“We asked ourselves should

we keep the emphasis on
organic growth or take the
risk of doing a large
acquisi9on with all the
problems and challenges
of integra9on”
Carrefour, Chief Execu/ve Officer,
Jose Luis Duran, Retail
Bulle/n 2006
3.2 ALTERNATIVE MARKET ENTRY MODES
Other An emerging type of alliance is the outsourcing of service work
e.g India, China, and the Philippines

India is being used by US companies for creating call centers.

India offers better-educated (college educated) workers than its US counterparts

(high-school educated).

China is rising fast as a services and manufacturing outsourcing hub.

In 2004, China’s role was largely focused on providing back-office support for
financial service, telecom, software, and retailing companies in neighboring Asian
countries (Einhorn and Kripalani, 2003).
3.2 ALTERNATIVE MARKET ENTRY MODES

Some alternative channels

within a nation
Model of a global retailer’s entry mode choice
 4 FACTORS INFLUENCING CHOICE OF ENTRY MODE

INTERNAL EXTERNAL
● Market objec=ves Speed of entry, level ● Market size and potential Existing
of control, involvement and future
● Experience & exper=se More ● Market access Barriers to entry,
experience, less risk (NB percep:on of
legal barriers, availability of partner
risk)

● Resources Financial and human ● Level of risk Political, economic

and cultural
● Product
● Cost of entry
● Payback

● Learning
4 FACTORS INFLUENCING CHOICE OF ENTRY MODE
 5. SELECTING THE ENTRY MODE

Naïve rule Pragmatic rule Strategy rule

thực dụng
Same entry mode for all Workable mode of entry for All alternatives
markets each market systematically compared &
Ignores heterogeneity of Change when not feasible / evaluated (Root, 1994)
markets profitable
quy tắc chiến lược:
phân tích tất cả để lựa chọn phương án tối
entry mode giống nhau cho mọi quốc thay đổi khi gặp bất lợi, ưu nhất
gia bất khả thi (có thể theo yếu điểm: tốn kém chi phí
bỏ qua tính khác nhau của mỗi thị trg thời kì)
yếu điểm: nếu thị trg dễ thì DN k có
tính cạnh tranh
Establishment chain model stepwise internationalisation to foreign markets
SUMMARY • Important, but complex decision
• Each mode has its own advantages
• Decision will depend on company and market
conditions
• Choice is a net result of conflicting forces
• Complex process with numerous trade-offs
• There is no ideal mode of entry
• Mode of entry can be changed when experience
acquired or market conditions change
Select an industrially developed country (perhaps Japan or a
European country) and a relatively less developed country
(perhaps a Latin American or African country). Contrast the
relative importance of the factors that should be taken into
consideration by a foreign-based manufacturer of a low-unit
priced packaged good selling in both markets, when
?
determining policy on selecting appropriate channels of
distribution in those markets. In which case is the managerial
decision easier to make? Discuss.
 CHAPTER 5
PRODUCT DECISION

VU THN
[email protected]
 Content

1. Product policy
2. Standardization vs adaptation
3. Packaging
4. Brand image
 Introduction
• Options across product mix
• Global v local branding a major decision

• Rationalisation in MNEs – reducing number of brands

• Global brands - transcend countries and culture to create strong

relationships with consumers in multiple countries.

• Rise of emerging market brands

• Complex decision-making
 1. Product policy
1.1 product planning and development
1.2 product strategy.

Should the company keep a commitment to its existing product mix as the
products reach maturity?

How strongly should the firm follow a strategy of new product

acquisition/innovation?

What are the organizational requirements for following each of the above
approaches?
 1.1 Product planning and development
Product Component Model

1. The physical product core;

2. The product package;
3. Support services.
trade name: tên thương hiệu (có pháp lý)

thành phần sản phẩm

dạng túi dạng gói chứng chỉ chất lượng

tỉnh ngủ,... chất kiệu, thân thiện môi trg

A product (or service) is “the sum of all the physical

and psychological satisfactions that the buyer (or
user) receives as a result of the purchase and/or use
of a product”.
 1.2 Product planning and development

Forms of product development:

1. new product development or addition;

2. changes in existing products;
3. finding new uses for existing products;
4. product elimination.
 1.2 Product planning and development

1.2.1 New product

• export domestic products (is easy to implement, at least initially, and may represent a
relatively low-cost approach) (mới ở thị trường nc ngoài)

• acquire a firm (has products for which there are potential or existing overseas
markets) thâu tóm công ty khác

• copying products (developed successfully by others) bắt chước sản phẩm đang thành công

• internal product development (an evolutionary process consisting of a number of

stages) phát triện sản phẩm hiện tại
 Internal development of new products

• location of R&D facilities of

firms;
• the process of screening new
product ideas;
• the diffusion of new product
khuếch tán

innovations;
• quality management.

New product decision process

1.2.1.1 Location of R&D

Home market firms Host market firms Worldwide market firms

Important criteria 1. Proximity to operations 1. Proximity to markets 1. Availability of pockets of skills

for considering an 2. Availability of universities 2. Concept of overseas in particular technical areas
overseas R&D có nhiều skilled worker
operations as full-scale 2. Access to foreign scientific and
location business entities technical communities
3. Availability of adequate
infrastructure and universities

Important criteria 1. Products sold in the 1. Increasing costs of 1. Economics of centralized R&D
for not considering developing countries are not doing R&D overseas 2. Difficulties in assembling R&D
overseas R&D sophisticated 2. Economics of teams
locations 2. Lack of qualified scientists centralized R&D
and engineers
3. Economics of centralized R&D

Important criteria for considering overseas R&D locations

“Fashion is more and more global. It doesn’t belong anymore to the French. Or even to
the Italians. I’m a global person: I spend two months in Como [in the Italian Alps], one
month in Milan, two months in Miami. I just don’t think any longer in terms of nationality.
Calvin Klein is American, [but he] makes things in Italy. The French houses all have
English designers now, and women are going global”
1.2.1.2 Screening ideas

Conjunctive model uses all evaluative criteria. The product, in order to proceed for further
consideration, must meet or exceed a minimum value for each of the criteria used.

Disjunctive model based on accepting a product that exceeds specified levels on one or a few key
criteria, regardless of its score on the others.

Lexicographic model based on ranking the evaluation criteria in terms of their perceived importance.
New product ideas are compared criterion by criterion until there is a superior idea. This may occur after
the first criterion or after many criteria.

Linear compensatory model assigns differential importance weights to each criterion and then
determines a summated evaluation score for each product. Further analysis is conducted either on all
products exceeding a minimum score or the one product scoring highest. This is perhaps the most widely
used approach.
1.2.1.3 Innovation and diffusion of products

đổi mới trung tâm cho toàn cầu

The center-for-global The local-for-local The local-for-global The global-for-global

innovation process innovation process innovation process innovation process

The parent company/ - created and - emerge as local-for- - created by pooling

a central facility (the implemented by a local innovations, are the resources and
corporate R&D national subsidiary subsequently found to capabilities of many
laboratory) – creates entirely at the local be applicable in different
a new product for level multiple locations, and organizational units to
worldwide use - all tasks are all are diffused to other an emerging global
sản phẩm mới cho toàn cầu
carried out within the organizational units opportunity.
nhiều thị trường cùng ptrien 1 sp cho
toàn cầu
subsidiary within the multinational
1 thị trg có sản phẩm phù hợp với nhiều thị trg
mỗi thị trường sẽ có sản phẩm phù hợp
corporation
1.2.1.2 Quality management

9000
● the customer’s quality requirements;
● applicable regulatory requirements,
● minimize harmful effects on the
while aiming to
environment caused by its activities,
● enhance customer satisfaction;
● achieve continual improvement of its
● continual improvement of its
performance in pursuit of these
environmental performance.
objectives.
1.2.2 Changes in existing products
thay đổi sản phẩm hiện có (cho phù hợp với thị trường mới)

Extend PLC by making modifications (standardization or adaptation)

1.2.3 Finding new uses for existing products tìm công dụng mới cho từng sản phẩm

● Is there a related application (e.g., an insecticide for ants may be used for bees in Latin
America)?
● A product sold to women may be sold to men and vice versa (such as deodorants).
● Can the product be used differently when used with another product (e.g., an after-shave lotion
used as a pre-shave lotion with an electric razor)?
● Consumer products may have an industrial market and vice versa (such as garden tractors).
● Does the nature of attributes and/or ingredients suggest new uses (e.g., the light weight and
strength of balsa wood)?
1.2.4 Product elimination loại bỏ sản phẩm

- deleting ‘old’ or weak products

(disproportionately greater or lesser
percentage of sales and profits)
- when to withdraw it from foreign
markets and, further, when to
eliminate it from the company’s
product line.
- the set of strategies for the
synchronization of old product deletion
with entry of a new product is known
as product phasing
The phasing continuity matrix
1.3 Product portfolio
giai đoạn phát triển giai đoạn mở đầu

giai đoạn suy thoái

giai đoạn trưởng thành
-> lựa chọn thích nghi hay chuẩn hoá

BCG portfolio matrix

2. Standardization vs adaptation
*nếu trong kiểm tra thì phải trả lời chuẩn hoá/thích nghi cho cả 4P
không trả lời k rõ ràng

Reasons for standardization or adaptation (research produced)

 Example
Product Adaptation

Sony TV Voltage, broadcast standard

McDonald’s Menu, décor of restaurant
Levi jeans Size mix, fabric, cut
Coca-Cola Brand name (China), package
KFC Menu

Market requirements and product characteristics

 3. Packaging

V – Visibility : the package must be easily distinguished from the visual competition.
I – Information : the package must quickly communicate the nature of its contents.
E – Emotional impact : the design must create favorable impressions in the mind of
the consumer.
W – Workability : the package must function as protection and must also be efficient
in home use.
3.1 The benefits of standardization in
packaging
01 Reduction of dimensions to a few standard sizes facilitates the machine packing of
merchandise

02 Standardized package sizes reduce inventory investment in packaging materials, and facilitate
mass production of the fewer types of packages and shipping boxes

03 Standardization permits full utilization of storage space at the factory and all levels of
distribution

04 Uniform package dimensions permit a balanced format for display and for self-service
selling

05 Standardized sizes simplify, expedite, and cut the cost of handling and shipping.
4. Brand image

“A brand is anything that identifies a seller’s goods or services and

distinguishes them from others”

“A trademark is a brand, or part of a brand, which is protected (in that

others may not use it) by law”

A brand indicates:
- the origin of the product
- the assurance of quality;
- warranty
4. Brand equity
4.1 Country of Origin Effect
Country-of-origin effect (COE ) can be defined as any influence that the country of
manufacture, assembly, or design has on a consumer’s positive or negative perception
of a product.

• Country of design and manufacture play a role

• Brand name can convey origin perceptions
• May communicate positive or negative perception of product based on cultural
stereotypes
• Can provide a cue when unfamiliar with brand
• Some countries associated with specific products

French Perfume/ Swiss Watches/ German cars/ Italian shoes/ French fashion/ etc.
4.2 Branding decisions
• selecting a good brand
• determining how many brands should be in the company’s product line.

Private label?
Factors bearing brands decisions
Single market, multiple brands?
• customer needs
Multiple markets & local brands?
• distribution and promotion methods to be used
• competitive market structure
• economies of scale in production and distribution
• legal constraints
• operational structures.
4.3 Local Branding
CULTURAL BARRIERS

- name has unfortunate meaning in linguistic or cultural context

- Pronunciation difficult e.g. Kellogg’s Frosted Flakes and Cocoa
Krispies difficult to say in Brazil’

ASPECTS

- In LDC’s domestic products may be viewed as inferior

- In developed countries domestic products have positive perception
- May enable international brands to compete successfully with cheaper local brands
- Problems of anti-western or anti-American feeling?
4.4 Global Branding
- Long term international brand (mostly US?) exploiting a universal heritage e.g.
McDonalds
- New products developed with a global consumer in mind
- World-wide recognition
- Consistent identity with consumers across world
- 1/3 revenue from foreign markets (Interbrand, 2015)
- Global nature and international concept (Business Week)
4.4 Global Branding TOP GLOBAL BRANDS 2021
4.4 Global Branding DRIVING FORCES

Economic developments
Media
- Universally available mass media
- Satellite offers limitless channel capacity for non-culture specific
programmes and advertisements
Internet
- Previously localised cultures receive images representing beliefs
and attitudes from all over the world
- Social Media
4.4 Global Branding
ADVANTAGES

• Economies of scale – development

“Most global brands have been invented by
Western companies for Western consumers. costs over large volumes
Emerging-market consumers are very • Higher level of visibility – easier to
different.” (Silvester, 2011)
build brand awareness
• Capitalise on media overlap
• Prestige factor
• NB Brand equity might vary from
country to country
4.5 Critical Issues

These values can be embodied in products or corporations or individuals

Brands must hold same values in whichever markets they are available

Consumers must feel that they are not dealing with an unapproachable big brother

“Consumers may feel more empathy toward a name they know,

rather than a faceless, sterile global brand.”
(Marketing, 2009)
 SUMMARY

- A wide range of product decisions - Can be applied to all or part of the

to be made product mix e.g. global brand and
- Standardisation vs adaptation a adapted product
major issue in product decisions - Relatively few, but growing number
- Continuum rather than 2 extremes of truly global brands
 ?
For export packaging and branding considerations, discuss
how language may be significant, particularly to the
multimarket exporters.
 CHAPTER 6
INTERNATIONAL PRICING

VU THN
[email protected]
 CONTENTS
01 Fundamental export pricing objectives and strategies

02 Determinants of an export price

03 Relation of export to domestic price policies

04 Exchange rate changes & currency issues

05 The price quotation

06 Transfer pricing & Countertrade

 “Luxury goods makers need to balance
image and desirability with affordability
and their own strategic goals.”
—Government of Canada, 2017
 INTRODUCTION
• Operate in multiple pricing environments
• Complex task, numerous markets
• Not determined is isolation
• Affects ability to be profitable
• A marketing tool
• Other related issues such as terms of sale, counter-trade, dumping,
transfer pricing etc.
• Digital impact
• Transparency
“As digital eroded geographic borders, we consumers
• Dynamic pricing have become more used to seeing the way products are
priced elsewhere.”
(Smith, 2018)
 TRENDS
• Increased transparency on a global basis
• Multinationals as ‘corporate citizens’
• Pricing pressure from retailers
• Consumers ability to shop around
• Increasing level of value pricing
• Focus on transfer pricing (inter-company)
• Brexit effect? Russia-Ukraine War?
1.2 FUNDAMENTAL EXPORT PRICING OBJECTIVES & STRATEGIES

Skimming the market

• getting the highest possible price out of a product’s
distinctiveness
• a high price is set until the small market at that price is
exhausted.
• the price may then be lowered to tap a second successive
market or income level
1.2 FUNDAMENTAL EXPORT PRICING OBJECTIVES & STRATEGIES

Penetration pricing
- establishing a price sufficiently low to rapidly create a mass
market
- emphasis is placed on value rather than cost in setting the
price
1.2 FUNDAMENTAL EXPORT PRICING OBJECTIVES & STRATEGIES

Sliding down the demand curve

- a variation of the skimming strategy

- company reduces prices faster and further than it would be
forced to do in view of potential competition
1.2 FUNDAMENTAL EXPORT PRICING OBJECTIVES & STRATEGIES

Extinction pricing (Ðịnh giá hủy diệt)

- to eliminate existing competitors from international markets

- it may be adopted by large, low-cost producers as a conscious
means of driving weaker, marginal producers out of the
industry
1.2 FUNDAMENTAL EXPORT PRICING OBJECTIVES & STRATEGIES

Preemptive pricing (Định giá ngăn chặn)

- setting prices so low as to discourage competition

- price will be close to total unit costs

Preemptive and extinction pricing strategies are both

closely associated with ‘dumping’ in international markets.
 2. DETERMINANTS OF AN EXPORT PRICE
• costs
• market conditions and customer behavior (demand/ value)
• competition
• legal and political issues
• general company policies (financial matters, production, organization
structure); and on marketing activities (products planning and
development, the product mix, marketing channels, sales promotion,
advertising, & selling)
 2.1 COSTS
• In the short run: direct costs (labor, raw materials, & shipping)
• In the long run: full costs for all products
• Price lining offering different products or services at various price
points to meet different customers’ need.
• Dynamic pricing charge vary from one market to another, depending
on the market conditions, differences in costs, and variations in the
way consumers value the offering.
 2.1 COSTS
• Bundling – packaging a product with other goods and services – can
make it difficult for buyers to see through the costs of any single item
within the bundle
• The basic categories of cost incurred to serve domestic and export
customers are the same, for example labor, raw materials,
component parts, selling, shipping, overheads.
 2.2 MARKET CONDITIONS (DEMAND)

• The utility/ value, placed on the product by purchasers sets the price
ceiling
• establish the value of a product in an export market = establish a
demand schedule for the product
• estimate a demand schedule, the market can be stratified, which
involves estimating the number of customers who will buy at several
levels of price
2.2 MARKET CONDITIONS (DEMAND)

Factors affecting price sensitivity

Cost figures of a consumer product
 2.3 PRICING METHODS
COST-PLUS PRICING (MARKUP PRICING)

•Price = COGS + COGS x a%

•Advantages:
• Easy and fast calculation
• Costs arising during sales are included in the profit percentage
•Disadvantages:
• Inflexible, unsuitable for products whose prices change according to the
change in the supply and demand of the market
•Apply for products that are slow to change prices or must be sold within a day
after production
 2.3 PRICING METHODS
BREAK-EVEN ANALYSIS AND TARGET PROFIT PRICING
Target price = units cost + target profit/ expected consumption quantity
Break-even volume formula:

"#
BEV= $ % &#
BEV: break-even volume
FC: fixed cost
P: price
VC: variables cost
 2.3 PRICING METHODS
BREAK-EVEN ANALYSIS AND TARGET PROFIT PRICING
 2.3 PRICING METHODS
PERCEPTION-BASED PRICING

•Price = COGS + buyer’s perception

•If the customer is interested in the product, the seller may charge a high price
•If the customer isn’t interested in the product, the seller should charge the original
price
•High quality products are expensive
 2.3 PRICING METHODS
COMPETITION-BASED PRICING

• Competition-based pricing involves setting prices based on competitors’

strategies, costs, prices, and market offerings.
• Fast Moving Consumer Goods (FMCG) often apply this pricing methods, for
example, bottled water
 2.4 COMPETITION

- price above, at the same level as, or below competition?

- Barriers to provide ‘shelter’ from competition include having a
product distinctiveness , a brand prominence with high brand equity ,
and a well-established channel of distribution both between
countries and within a country that can provide greater dealer
strength
 2.5 LEGAL/POLITICAL INFLUENCE
- Legal and political factors act primarily to restrict the freedom of a
company to set prices strictly on the basis of economic
considerations.
- antidumping legislation
- handle rebates, discounts, allowances, and even price escalation or
guarantee against price decline clauses in contracts
- tariff levels
- government intervenes in currency markets
 3.1 EXPORT PRICES LOWER THAN DOMESTIC
• the manufacturer’s product is probably less well known in foreign
markets than domestic ➝ to secure market acceptance and initial
purchase
• the lure of increased sales volume in order to assist in absorbing
manufacturing and overhead costs
• domestic customers are nationalistic and will pay a higher price for a
domestic product
⥤ may be considered to be dumping
 3.2 EXPORT PRICES HIGHER THAN DOMESTIC
• initial cost of equipping an organization to enter the export field
• the complexities of procedure, difficulties in language, differing
commercial customs, and varying legal needs and tastes of customers
in export markets
• extra investment and added expense in preparation of special
documents and forms in packing, preparation, and alteration of the
products
• added risk in doing business abroad due to unsettled economic and
3.3 EXPORT PRICES ON A PAR WITH DOMESTIC PRICES
• fix export prices
• antidumping regulations
• easily alter when the manufacturer gains experience and acquires a
more comprehensive knowledge of export markets
• easy to implement but may not be suitable if the domestic price is low
because of unusual circumstances, such as intense competition
 3.4 DIFFERENTIAL PRICING
1) Differential elasticities of demand
• a profit incentive for the exporter to set a higher price in one
market than another
• high price elasticity suggests low prices
• price inelasticity suggests high prices
2) Effective separation of market
• transportation costs/ reexporting costs are higher than the price
differential
• products sold in a low-price market may find their way into a high-
“Luxury brands that shy away from sensitive price adjustments
for fear of diluting their brand image took a leap of faith by
implementing price alignment strategies across key markets.”
(Euromonitor, 2016)
“ …beyond following a pricing strategy
tailored to the characteristics of each
market, Inditex is attentive to what
consumers are willing to pay based on
their income.”
 4.1 CHANGES IN EXCHANGE RATES

• often change significantly in the short run, and more greatly in the
long run
• exchange controls to maintain the rate (require exporters to turn all
foreign currencies into the national bank, and all importers to
purchase foreign exchange from that bank)
 4.2 CURRENCY ISSUES

• exporter may specify what currency should be used in a particular

transaction
• importer may require its own currency
• or third party’ currency
 5. THE PRICE QUOTATION
1) Ex (point of origin) the seller’s 3) Free alongside (FAS) the seller must
responsibility & costs end at this point provide for delivery of the goods free
in his home country alongside, but not on board, the
2) Free on board (FOB) a transportation transportation carrier (usually an
carrier at some named point. The ocean vessel) at the port of shipment
seller’s responsibility & cost end in and export
most cases when the goods are loaded time and cost of loading are not
on the appropriate carrier and a clean included
bill of lading has been issued.
 5. THE PRICE QUOTATION
4) Cost and freight (C&F) delivery costs 6) Ex dock one step beyond CIF and
are extended beyond the country of requires the seller to be responsible
export, the seller’s responsible for for the cost of the goods and all
providing and paying for transportation other costs necessary to place the
to the overseas port of discharge goods on the dock at the named
5) Cost, insurance, and freight (CIF). overseas port, with the appropriate
This trade term is identical to C&F import duty paid.
except that the seller must also
provide the necessary insurance.
 5.1 SELECTION OF TRADE TERMS
• Whether shipment will be made on domestic or foreign carriers.
• Availability of insurance coverage.
• Availability of information on costs. Exporter’s need for cash (reason
against C&F and CFR/CPT).
• Needs of importers to have quotes from several suppliers that can be
readily compared (reason for CIF and CIP).
• Currency convertibility problems.
• Requirements of the government of the importing nation.
 6.1 TRANSFER PRICING
(or “intra-corporate pricing”)
xảy ra trong nội bộ: công ty mẹ con, liên doanh

“The transfer of intangible

property may have a material
“The price at which “Shifting profits across effect on domestic taxes. While
goods are transferred borders: ‘Transfer
estimating trademark royalty
between parent and pricing’ is the biggest tax rates for intercompany transfer
subsidiaries or avoidance.” (The pricing is fraught with difficulty,
between subsidiary Guardian, 2009) it can be helpful to adopt a
companies.” systematic approach”
(World Trademark Review, 2017)
6.1.1 STAKEHOLDERS IN TRANSFER PRICING

LOCAL
PARENT COUNTRY
MANAGER
COMPANY

TRANSFER HOST
PRICING GOVERNMENT

DOMESTIC JV PARTNER
GOVERNMENT

“The Italian authorities have been the latest to introduce transfer pricing regulations.”
(Mazars, 2011)
 6.2 COUNTERTRADE

• Reciprocal trading
• Umbrella term covering a variety of exchanges of goods for
goods/cash
• Forced sourcing, often used by developing countries
• Price setting and financing tied together
• Internet as a venue for countertrade activities
 6.2.1 FORMS OF COUNTERTRADE
hàng hoá đổi hàng hoá
● Barter – goods for goods
cam kết bên bán sẽ mua lại gì đó của bên mua
● Counter-purchase – reciprocal buying
over period of time, majority of
The Malaysian government purchased
purchase price paid in cash 20 diesel electric locomotives from
thu hồi cái gì đó bù chi phí
General Electric against the supply of
● Offset – at government level about 200,000 metric tons of palm oil
over a period of 30 months. (Citeman)
● Buyback – buying output of capital
equipment exported
thường liên quan đến bên thứ 3 - có thể là ngân hàng

● Switch-trading – involving 3rd party

6.2.2 WHY IMPORTERS USE COUNTERTRADE

They lack foreign exchange

They want multinational partners to sell their goods

overseas

Technology or know-how transfer

Hope to increase domestic employment and therefore

economic development
 6.2.3 BENEFITS TO EXPORTER

• Access to otherwise restricted • Gain a competitive edge

market e.g. blocked funds for • Build good customer
trade debt relationship
• Combats devaluation in foreign • Access to raw materials
currency

“Counter-trade is a creative
marketing tool.”
(West, 2000)
 SUMMARY

• Complex pricing decisions in international markets

• Often controlled at local level
• Pricing more difficult to standardise
• Transfer pricing important for multi-national/global companies, but
increasing regulation
• Countertrade may be an issue when dealing with developing
countries
 ?
Explain why export prices should or should not be established using the
same methods and according to the same criteria as prices set in the
domestic market.
CHAPTER 7

DISTRIBUTION
DECISIONS

VTHN
[email protected]
CONTENTS

DISTRIBUTION CHANNELS:
01 HANDLING THE 03 OBJECTIVES, TERMINOLOGY,
EXPORT ORDER
AND STRUCTURE

02 PHYSICAL 04 GLOBAL RETAILING

DISTRIBUTION
 INTRODUCTION

● Access a key decision

● Can we use the same distribution channels as home markets?
● Distribution density; channel length; channel alignment; distribution
logistics
● Distribution channels tend to be longer, but ……
● Wholesale and retail related to economic development
● Direct channels provide better control, flexibility and feedback
● Disintermediation
 1. THE EXPORT PROCEDURE
tìm thông tin xuất khẩu

thanh toán cho bank của importer

gửi tiền cho exporter

gửi tiền cho bank của exporter

sản xuất
thanh toán nốt chi
phí/chi phí phát sinh nếu có

thủ tục
1.1 ORDER RECEIVED DIRECTLY FROM PROSPECTIVE
IMPORTER

• Order contains the essential facts concerning the

desired merchandise & shippment
• Exporter send confirmation of receipt
Exporter prepare Proforma Invoice (type & amount of
tương tự sale contract

•
merchandise, unit costs & extensions, expected weights & measures,
terms of sales and payment, etc.)
1.2 ORDER RECEIVED FROM BRANCH OR
REPRESENTATIVE OVERSEAS

• Use a combination order form and sales contract

• Exporter accept the order, then complete & sign the
form (both the seller & buyer)
đơn đặt hàng giữa người bán và người mua (không bao gồm trung gian)

• Indent order is between final purchaser & overseas-

based branch office/ distributor of export
1.3 EXPORT LICENSES

• Individual countries have their own export laws,

• Control the export of products for reasons (national
security, foreign policy, short supply, preservation of cultural property,
assisting of industries using domestic products, renvenue purpose)
1.4 FINANCING/ PAYMENT & OTHER
TERMS OF SALE

• Getting the merchandise from the exporter’s plant to the port

• Getting the merchandise through outbound Customs
• Getting the merchandise abroad ship (or other mode of
transport)
• Paying for the freight
• Paying for insurance
2 PHYSICAL DISTRIBUTION

• The passage of goods across national boundaries, with

attendant legal requirements

• Shipment by ocean-going vessels or international airlines,

with attendants security needs and specific documentary
requirements

• The time and distance required to complete the

transaction, with attendant needs for ensuring payment
2 PHYSICAL DISTRIBUTION

A positive effect on a company’s sale volume through the

service provided

• The speed with which a product can be provided to a

customer
• The reliability with which the average speed of service is
achieved
• The degree of immediate availability of the product
• The arrival of the product in good condition
2.1 NATURE OF THE SHIPMENT

• The minimum size of the unit pack

• The quantities
• The type of method of packaging
• The identification marking
2.2 TRANSPORTATION

• The external movement of the product

• Select the mode(s) of transportation
• Provide adequate insurance coverage
(marine or air insurance)
2.3 WAREHOUSING

• Assembling, breaking bulk shipments into smaller

size
• Prepare products for reshipments

• Determine
ü The number and type of warehousing facilities

ü Spatial arrangement
2.4 MATERIALS HANDLING

Provision must be made for

the internal movement of
products within plants and 2.5 CARRY INVENTORY
warehouse

Cost elements in managing

inventory (storage, interest
on capital tied up, taxes, lost
sales, materials handling,
etc.)
2.6 ORDER PROCESSING & DOCUMENTATION

• Complexity number of documents & correspondents

• Culture language, currency, law
• Change changes in requirements
• Cost costs of preparation
• Error consequential costs of error and costs or correction
 3 DISTRIBUTION CHANNELS: OBJECTIVES,
TERMINOLOGY, AND STRUCTURE
MÔ TẢ 4 TIỆN ÍCH DƯỚI TRONG CHƯƠNG PHÂN PHỐI

Marketing channels exist to In B2C marketing consumer

create utility for customers channels are designed to put
4 lợi ích cho khách hàng products in the hands of people
• Place utility for their own use
• Time utility có ngay vào lúc KH cần
In B2B marketing industrial
• Form utility channels to deliver products
(inputs) to manufacturers/ other
• Information utility
organizations
 3 DISTRIBUTION CHANNELS: OBJECTIVES,
TERMINOLOGY, AND STRUCTURE

Distributor is a wholesale intermediary that

typically carries product lines/brands on a
selective basis

Agent is an intermediary who negotiates

exchange transactions between two or more
parties but does not take title to the goods being
purchased or sold
 Six channel
structure
alternatives for
consumer
products
 Six channel
structure
alternatives for
industrial/
business
products
 3.1 ESTABLISHING CHANNELS AND WORKING WITH
CHANNEL INTERMEDIARIES

● Select distributors – don’t let them select you!

● Look for distributors capable of developing markets, rather than those with a few
good customer contacts.
● Treat local distributors as long-term partners, not temporary market-entry
vehicles.
● Support market entry by committing money, managers, and proven marketing
ideas.
● From the start, maintain control over marketing strategy.
● Make sure distributors provide you with detailed market and financial
performance data.
● Build links among national distributors at the earliest opportunity.
 4.1 TYPES OF RETAIL OPERATIONS
bên trong shopping mall
bán giả rẻ

Department Specialty Convenience Discount

Supermarkets
stores retailers stores retailers

several narrowly focused departmentalize same products the emphasis on

departments and offer a , single-story as low prices
under one roof, relatively narrow retail supermarkets,
each representing merchandise mix establishments but the
a distinct aimed at a that offer a merchandise
merchandise line particular target variety of food mix is limited to
and staffed with a market and nonfood high-turnover
limited number of convenience and
salespeople impulse
products
 4.1 TYPES OF RETAIL OPERATIONS
tương tự hypermarket nhưng
to hơn supermarket, rộng không bán đồ tươi sống

Hard
Hypermarkets Superstores Shopping malls Outlet stores
discounters

limited hybrid retailing the label many in group of stores in dispose of excess
assortment of format combining the retailing one place, leisure inventory, out-of-
goods— typically the discounter, industry use when destination date merchandise,
1,000 to 3,000 supermarket, and talking about or factory seconds
different items— warehouse club stores such as
at rock-bottom approaches under Toys ‘R’ Us, Home
prices a single roof Depot, and IKEA
(200,000 to
300,000 square ft)
 4.2 GLOBAL TRENDS

● Increased internationalisation of retailing and logistics

● Further spread of discounting
● Digital retailing on global scale
● Growth of mobile shopping
● Online sales accelerating in developing markets
● 3rd party marketplace
● Customers seeking experiences & products reflecting
personal brand on social media (Deloitte, 2017)
● Amazon disrupting the marketplace
● E-Marketplace e.g. Alibaba
“Customers want authentic, sharable experiences to further their personal
brand”

“Retailization of the world - the maker movement, the sharing economy”

“E-commerce continues to be a major growth engine for the retail

industry”

—Deloitte (2017)
 4.3 ISSUES IN THE CYBERMARKETPLACE

• Digital divide • Manufacturers competing

• Growing online shopping, but varied with resellers
across world • Channel conflict
• Diverse credit card culture • Importance of logistics
support
• Disintermediation process
• Currency issues
• Cannabalising existing distribution • Fraud issues
channels? • Communication issues
• Black Friday/Cyber Monday • Drone delivery?
 4.4 GREY MARKETS/ PARALLEL IMPORTING

“A grey market generally consists of those

unauthorised distributors and dealers
that circumvent channel arrangements by
buying a company’s products in low-price “Parallel importation is an
unauthorized import into a
markets and selling them in high-price
country of non-counterfeit goods
markets at lower prices than those imported without the express
permission of the intellectual
offered by authorised channel members”
property owner.
(Hollensen, 2004) (The Balance, 2017)
 EXAMPLE

“If you’re selling Nike trainers on your Amazon page and you haven’t gotten
permission from Nike — the owner of the Nike trademark — and you ship a pair
of shoes to someone in another country, you’re selling a parallel import.”
(RepricerExpress, 2017)

“Parallel importers buy patented drugs in low-price country and import them
into high-price country to offer at lower prices than local price set by patentee”
UNCTAD
4.4.1 AMAZON’S VIEWPOINT

• 2 different options in place

ü obey the trademark owner’s decision to either be able to import their product
or not
ü do your own thing if the trademark owner’s rights have been exhausted

• Requirement to research each brand and manufacturer to check rules are

about selling & importing a specific item
• Advice to seek legal counsel
 ● High value market

● Most trades high-priced branded goods -

4.4.2 ASPECTS jewellery, cameras, tablets, pharmaceuticals,
watches
● Diverse products and brands involved e.g.

Rolex, Nescafe, Nike, Burberry, Apple

● Not copies or counterfeits

● Genuine trade-marked items, imported legally

● Legally a ‘grey’ issue as legislation varies across

countries
 ● Without consent of brand owner
4.4.3 PROBLEM? ● Impact on brand equity and value

● Established distributors lose motivation as

margins eroded
● Grey marketer interested in quick sale and

short-term profits
● Manufacturer could lose markets over time –

impact performance
● Could destroy customer goodwill
 SUMMARY

• More direct the channel, the higher the level of control

• The distribution environment varies greatly across countries
• Good channel relationships are important
• Need to consider future development of the distribution
structure
• Parallel importing becoming a major issue for global brands
 ?
What special distribution challenges exist in Japan? What is the
best way for a non Japanese company to deal with these
challenges?
THANK YOU
CHAPTER 8
PROMOTION &
MARKETING
COMMUNICATION

VU THN
[email protected]
Table of Contents
01 Export marketing promotion
and communication decisions

02 Alternative techniques of
promotion

03 Standardization or adaptation?

04 Ethics
INTRODUCTION

• Communication greatly affected by culture so international promotion more

complex
• Social, political and economic contexts influence promotional activities
• Same promotional mix elements used, but may have different importance in
different countries
• Sophisticated communication tools might not be appropriate in some markets
• Brands as story tellers (brand narrative)
• Growing importance of digital and social media across markets
• Rise of Brand Journalism
• Storytelling
1 EXPORT MARKETING PROMOTION
& COMMUNICATION DECISIONS

những câu hỏi phải trả lời trong Promotion

The promotion decisions
● What messages?
● What communications media?
● How much effort or money to spend?
Personal selling bán trực tiếp

to communicate primarily face-to-face with prospective customers

Advertising quảng cão

a nonpersonal presentation of sales messages through various ‘mass’

media, paid for by the advertiser

Sales promotion
sales activities, which supplement & strengthen personal selling & advertising

Publicity thông qua truyền thông Earned

news about a company or its products that is reported by some media, and is not
paid for by the company
1.1 A CONCLUDING One world, one voice?
COMMENT
1. Requirements for effective comms are
fixed and don’t vary from country to
country
2. Does the use of digital media make
standardization easier
3. Communication process the same BUT
phương tiện sai, KH không tới người nhận
- Message may not get through
- May reach target, but not understood
- May not compel target to take action
- Effectiveness impaired by noise
noise: là những cái của đối
(Keegan & Green, 2013) thủ
2.1 PERSONAL SELLING
Information
The actual Customer gathering and
selling activity relations communicating

The communication of The salesperson must at The salesperson is often

product information to all times be concerned able to provide
customers, and with maintaining & information that might
obtaining orders. improving company’s be useful in planning
position with customers advertising and trade
and the general public. promotion programs.
2.2 SALES PROMOTION

• Can global brands run standardised campaigns?

• Tends to be used locally [tactically] by companies in order to

achieve short term objectives.

• May also be used to support advertising campaigns (which may

have longer-term objectives)
2.2 SALES PROMOTION

Nonprice promotion Price promotion

Free samples Price reduction
Buy 1 get 1
Coupon
Premiumsquà tặng kèm
Mail-in refund
Contests
Sweepstakes
2.2 SALES PROMOTION

Consumer sales promotions are designed to make consumers aware

of a new product, to stimulate nonusers to sample an existing
product, or to increase overall consumer demand.

Trade sales promotions are designed to increase product availability

in distribution channels
2.2 SALES PROMOTION

• Often the responsibility of local or regional management

• Will the offer work from a cultural perspective?

• Are retailers willing and capable of supporting promotion

• Laws differ – regulations very fragmented

• Regulation of competitions, free gifts, coupons

2.2 SALES PROMOTION

Pringles festival promotion Berry White gives a donation from every

increases EMEA sales bottle sold to Global Angels charity
2.3 FOREIGN CATALOGS
• Create interest and attract readership.

• Mirror the personality of the manufacturer or exporter.

• Carry the reputation of the manufacturer or exporter into world

markets.

• Make buying easy.

• Create the desire for ownership.

• Supply all the facts that a salesperson would present in person.

2.4 SAMPLES
• Direct sampling (mail, express or
courier)

• Residential agents

• Branch office managers

• Traveling sales people

⥤ need to look at national regulations

2.5 HOUSE ORGAN AND COMPANY-PUBLISHED
MAGAZINES ấn phẩm nội bộ

• Publications provide company, distributor, or agent personnel with

knowledge of the success of other distributors or agents.

• A vehicle for promotional ideas, company news, the results of contests,

employee commendation, important device to stimulate enthusiasm
and effective sales performance abroad.
2.6 FILMS, SLIDES, AND
PERSONAL COMPUTERS

• Motion picture, video tape, DVD

• Advantages: buyers are often willing

to take the time to watch, not to
spend the same amount of time
listening to a conventional sales talk.
2.7 TRADE FAIRS AND EXHIBITIONS

2 types:
(1) the broad, general-type, well-established annual affairs
(2) the specialized type, for products in specialized groups or
industries
Some elements of the process at a trade fair
(1) gathering names; (2) demonstrations;
(3) prizes; (4) client promotions.
2.8 INTERNATIONAL PR
“strategic communication process that builds mutually beneficial relationships
between organizations and their publics.”

• Increasing need for organisations operating globally to use PR to manage

reputation

• $14 bn. Industry revenue in 2018 (Statista, 2018)

• Top 7 players $5.7 bn.

• More stakeholders than domestic environment, groups vary across countries

• Culture has great influence on PR

• Foreign firms have to face nationalism

• “Corporate diplomacy”
2.8.1 PR TRENDS
Fake News Frenzy Escalates
• Recognize the pressure that journalists are under.
• Be specific in terms of quotes, citing all sources, and being hyper-vigilant when it comes
to figures and statistics.
Storytelling and Relationship Building Become Priorities
• Expand your net, reaching a diverse set of partners who can help scale your stories.
PR Professionals Will Play a Broader, Deeper Role
• Create content across multiple channels to expand and deepen your reach.
• Use the power of storytelling throughout your organization to personalize your content.
• Deepen your communications with visual, video, and voice content tailored to your
audience.
2.8.2 TARGET GROUPS FOR INTERNATIONAL PR

REGIONAL GOVERNMENTS
GROUPINGS
GENERAL
SUPPLIERS
PUBLIC

CUSTOMERS FINANCIAL
MARKETS
EMPLOYEES
SHAREHOLDERS
2.8.3 GLOBAL PR TOOLS
Global PR

Corporate Corporate
Website philosophy philanthropy

Social Media Spokesperson Conferences

“When people want to criticise

Corporate Media something, they will attach that criticism
Advertising Relations to the biggest company they can find.”
(Knight, n.d.)

Government
Sponsorship Relations
 “We are a PR agency, but that doesn’t
mean we just do media relations. PR is
now a much wider discipline than that. It
includes many different channels of
communication and many different
influencers through which we can tell
your story”
(Berkeley Communications, 2018)
 UNILEVER GLOBAL PR
• Brands include Dove, Lipton, Magnum, Persil and Vaseline
• PR spend approx. $35 mill
• 2009 decision to centralise
• “to ensure consistency of pricing, work and quality of ideas”
• Global media agency review 2015
• Unify global spreads business

“dramatic changes” to the media landscape and how it is transforming the way
people connect with our brands” (Di Como, n.d.)
2.8.4 INTERNAL
COMMUNICATIONS
● Internal communications

● Employee engagement

● Use of storytelling and narrative

● Channels – corporate TV, magazines,

posters, emails, social media, blogs,
intranet, face-to-face ……
(Lipiainen, Karjaluoto & Nevalainen, 2014)
“Internal communication is among the fastest growing
specializations in public relations and communication
management”
(Tkalac Vercic, Vercic & Sriramesh, 2012)
2.9 GLOBAL ADVERTISING

Advertising may be defined as any sponsored,

paid message that is communicated in a
nonpersonal way.

Global advertising may be defined as

messages whose art, copy, headlines,
photographs, taglines, and other elements
have been developed expressly for their
worldwide suitability.
2.9.1 ADVERTISING STRATEGY OPTIONS

Fully standardised

• Product/brand sold across borders

• No adaptation, unified images
• Little or no copy, but background music
• One language
• Is digital leading to a higher level of standardised
adverts?
2.9.1 ADVERTISING STRATEGY OPTIONS

Some Modifications: Voice-over e.g Gillette, Nivea, Snickers

• Visuals are central to advert

• Original language or voice-over
• Beware of lip-sync

Partial Adaptation: Different Values e.g P&G - Dreft, Fairy, Ace

• 1 basic form (comparison, testimonial, drama)

adapted to local markets
• Different adverts with cultural values reflected
2.9.1 ADVERTISING STRATEGY OPTIONS

Partial Adaptation: Different Executions e.g McDonald’s, L’Oreal

• 1 basic idea/theme with different local executions

• Recognisable elements in all adverts
• Different executions developed in different countries and
adopted by others of similar culture
2.9.1 ADVERTISING STRATEGY OPTIONS

Adaptation: Multi-Local e.g Nestlé, VW, Guiness, McDonalds

• Mental images cannot be standardised

• Features local cultural values
• Building relationships with consumers
• Major objective is to build trust
• Company name often used in endorsement
2.10 MEDIA

Print
• Magazine and newspapers ads 22.5%in 2014 (Zenithioptimdia 2015)
• Continued decline in 2015
• Balance between national and regional titles
• Readership levels vary
• Magazine reach varies
• Readership patterns may vary
• Increasing internationalisation of printed media
2.10 MEDIA

Radio
• Radio 6.8% of total in 2014 (Zenith Optimedia 2015)
• Commercial stations - national, regional or local?
• Unavailable for advertising in some countries e.g. Norway
• Useful for specific markets where literacy and income is low (e.g. Brazil)
or with geographical diversity (e.g. Australia)
• Unlikely to support advertisements in a non-local language
2.11 ONLINE
• a forum for exchange of common interests;
• a sense of place with codes of behavior; a meeting place for specialists;

• the development of stimulating dialogues leading to relationships based on

trust;

• encouragement for active participation by more than an exclusive few.

• Rise and rise of social media

• High internet usage growth rates in China and UK

• Cadbury integrates email, online, mobile and interactive TV activity on a

global scale to allow it to link and analyse its performance across all digital
channels in key international territories
2.12 SOCIAL MEDIA
2.13 OTHER MEDIA
Cinema Outdoor Sites Mega-events
Increasing
Attendance levels Sites may be
advertising around
vary e.g. low in restricted by
world events e.g.
Italy planning legislation
World Cup, Olympic
e.g. UK high, Spain Games, Grand Prix,
Effectiveness at
low Super Bowl
reaching target
market depends on Impact is variable Advertising as
films show and depends on activation of
travel flow sponsorship
2.14 REGULATIONS IN ADVERTISING
Product:
Type: Alcohol, Tobacco,
Claims: Use of superlatives
Knocking of competitors
Target Audience:
Protection: Children, Young People
Violation of Culture: Muslim Countries
Standards: Offensive images
Media:
Prohibition: Commercial advertising banned
Scheduling: Time/space available for advertising.
Blocking regulations
INTERNATIONAL PR
DIFFERENCES
• Data-driven Deutschland “The best brands are human,
• Engaging España they’re open about their flaws,
• Cheeky Aussies they recognise them and they
• Funny French: critical, but embrace them. The best crisis
enjoy a good joke management isn’t a robotic
• Informal Americans press release, it’s a human”.
(Healey, 2013)

“Many of those subtle differences in communication

depend on national or even regional culture, despite
globalization” (Janssen, 2013)
2.15 SPONSORSHIP
• Growing importance on a global scale

• Brand engagement

• Global value $60.2 bill+ in 2016 (IEG,2015)

• Value varies across regions

• Sport is a particular target to global audiences for mega-events

• High cost of activation

“76% of people believe brands should “provide funding and/or be actively involved in the
sponsorship of sport and entertainment”.
 “Being an Olympic sponsor is a disadvantage”
(former Coca-Cola UK marketing boss)
“the original sponsorship model “no longer functions”
Football Sponsorship
ASPECTS
• Arts, Sport, Entertainment, TV ........
• Active engagement on the part of sponsors/partners – not just funding
• Trend towards increased brand engagement against the background of
digital revolution
• Celebrity endorsement
• Relevance of sponsorship property to customers
3 STANDARDIZATION VS ADAPTION

• International market convergence leading to homgenisation?

• Or more diverse and complex cultural mixing?
• High cost of localised advertising
• Intercultural communication – ability to communicate a
meaningful message to heterogeneous local markets
representing various cultural settings

Should we use a specific advertising message and media strategy from region to region
or country to country because of environmental requirements ?
3 STANDARDIZATION VS ADAPTION

• Standardized print campaigns: industrial / high-tech consumer products

(Apple’s iPhone and iPad)
• Standardized print campaigns with a strong visual appeal often travel well.
E.g Chivas Regal (“This is the Chivas Life”). Picture-based instructions can be
used throughout the world without translation.
• TV commercials that use voice-overs instead of actors or celebrity
endorsers speaking dialogue can use standardized visuals with translated
copy for the voice-over. Examples: Gillette (“The best a man can get”); GE
(“Imagination at work”); UPS (“We Logistics”).
4.1 ETHICS AND INTERNATIONAL MARKETING
• Green marketing: green movement, eco-labelling

UK plastic carrier bag sales fall by more than 95 per cent following introduction of 5p charge
4.1 ETHICS AND INTERNATIONAL MARKETING
● Green movement: political/consumer movement favoring environmentally

friendly approaches.

● Eco-labelling: a label or logo to show that a company is socially responsible.

4.1 ETHICS AND INTERNATIONAL MARKETING

compact fluorescent light incandescent bulb

(CFL) bulb: $15 $0.75

The product had difficulty climbing out of its deep green niche. They
relaunched the product as ‘Marathon’, underscoring its new ‘super long life’
positioning and promise of saving $26 in energy costs over its five-year lifetime
-> sales climbed 12% in an otherwise flat market
4.1 ETHICS AND INTERNATIONAL MARKETING
The point of return: recycling options offered by some major companies

Company Shipping/recycling fees In-store drop-off

Apple Free with shipping form Batteries and iPods accepted at Apple
stores

HP Free shipping via FedEx for HP and Compaq Stationery stores accept many HP and
non-HP consumer products, except TVs
products with pre-printed voucher

Dell Free shipping or pick-up of Dell products, The Dell Reconnect partnership with
and free pick-up of non-Dell items with Goodwill accepts any brand of
purchase of a Dell product electronics except mobile phones

Amazon Free shipping for Kindles via UPS with pre- Not available
printed voucher
4.2 Ethical issues in international marketing activities
Marketing activity (Un)Ethical issues

Positioning Positioning a low-quality product as a high-quality product

Product positioned to perform a function that it cannot actually do, e.g. cholesterol-
reducing food, anti-ageing cosmetics
Blackmailing customers that if they do not use the product they will be harmed/
disadvantaged in some way
Product Product that can cause harm to customers/users, e.g. children’s toys

Products that pose a safety risk for users, e.g. electric goods, automobiles

Products that can cause health problems, e.g. side-effects of medicines

When customers are not fully informed about product content, e.g. in food items
containing nuts, GM ingredients or high sugar/salt levels

Use of environmentally unfriendly packaging

4.2 Ethical issues in international marketing activities
Price Price cartels, where two or more competitors fix a price that is higher than competitive pricing
Charging discriminatory prices without any extra value provided
Transfer pricing; over- or under-pricing internal invoices for taxation purposes
Charging high monopolistic prices, e.g. medicines for epidemic diseases, such as AIDS in
Africa
Paying bribery/illegal payments or giving gifts to acquire sales
Promotion Claiming inaccurate product benefits through advertising

Not informing the customer fully through different means of communication

Using inappropriate language in advertising

Using discriminatory or degrading slogans

Advertising directed towards younger children

Paying illegal kickbacks to promote a product

4.2 Ethical issues in international marketing activities
Place Discriminatory distribution, e.g. forcing wholesalers and retailers to discriminate among
customers (to whom the product can be sold)

Demanding unfair benefits, kickbacks and/or advances from retailers or suppliers

Not taking responsibility for after-sales service, e.g. in electronic goods

SUMMARY

• Growing globalisation of advertising, but still need for adaptation in many

cases
• Growing importance of global PR in line with spread of global brands
• Increasing amount of promotional spend on sponsorship, particularly for
global consumer brands
• Sales promotion remains very locally oriented
• Personal selling still important in a B2B context
 ?
Explain how culture can influence the effectiveness of comparative
advertising. Is there a stronger influence on ‘attack ads’? Discuss.

Choose a country representing a western culture and one

representing an eastern culture. Would the same type of
comparative advertising work in each? Why or why not?
● Why would a consumer buy a product where they did not know whether they liked the flavor?
● Why would the brand associate with the letters WTF, given this can also have a negative
connotation?
● Why would the brand run this sales promotion, rather than just introducing the new flavor
straight to the marketplace?