BUS615: International Marketing

3a. Explain the key functions of international marketing departments, such as market research, product management, price setting, distribution, marketing communications, and matching products to customers 

• What are the first factors that a company should seek to uncover when beginning to research a foreign market for expansion?
• What are the pros and cons of implementing a straight product extension vs. a product adaptation when entering a foreign market?
• There are a variety of pricing strategies that companies can implement for their goods and services. What objectives do these various strategies enable a company to achieve?
• What are the two functions of the supply chain?
• What are the four generic global strategies of The Value Proposition Globalization Matrix?
• What are the multidimensional perspectives a company should take when determining which global markets to target?
  

When companies are exporting for the first time, they should conduct research about the potential of the markets they are considering. They should look at other markets where similar products are being sold and the competitors who are providing those products. Product requirements and standards should be explored, as well as whether any product modifications are needed. There are sure to be local taxes, shipping costs, and other related expenditures, so this area should be researched, as well. Pricing strategies should be looked at carefully to see what the market can bear, and distribution channels should be explored.
 
A straight product extension is when a company sells their merchandise in a foreign marketplace without making any changes at all. The benefits are that no new investments are needed for research, development, or manufacturing. However, products might not meet local needs, preferences, and tastes, plus the overall cost might be higher than if a product was manufactured locally.
 
Product adaptation is when a company makes changes to better meet local needs and tastes. These changes might be to the product itself, the packaging, language, pricing strategies, and product sizing. However, companies can easily make mistakes when it comes to understanding local needs. Translations might not be accurate, package images might not be appropriate, and product modifications may not fit with local norms and culture.
 
Pricing strategies serve many purposes. They enable companies to earn a profit and maintain a position in the marketplace. Companies are able to earn higher sales levels based on their choice of pricing approach, which, in turn, leads to greater levels of market share. Finally, the price has a direct correlation to the product image. Higher-priced items convey an image of a luxury or high-end brand, while low-price strategies generate images of budget or cost-friendly products.
 
The two functions of the supply chain and product distribution are to meet the needs of the manufacturer and the consumer. The exchange function – the first part of the distribution channel – involves the sale of merchandise to the various members of the distribution channel. The next phase of the process moves the goods through the exchange channel and into the hands of the ultimate user.
 
The distribution process enables companies to earn a profit while also meeting the needs of consumers. An efficient and effective process is an essential part of a business' operations and requires a great deal of time, effort, and planning. This is an important function.
 
The four generic global strategies include a pure aggregation approach. This is also known as a global marketing mix strategy, where the offer and the message communicated are the same. A global offer strategy is when the offer is the same, but the message is adapted to a specific marketplace. A global message strategy is when the offer varies from market to market, but the message is the same. Finally, a global change strategy is when both the offer and the message are customized for each market.
 
When identifying international markets to target, companies should take a look at the differences between the markets they must enter in order to achieve their global goals and markets that are desirable but not essential. Markets that companies should be entering include those that increase sales volume, illustrate market leadership, and where a competitive advantage can be achieved.
 
To review, see:

• Conducting Market Research
• Global Products
• Basics of Pricing
• Global Channels and Supply Chains
• Global Promotions
• Target Market Selection

 

3b. Develop an international marketing plan for a product being sold in a new country market

• What are the different levels at which different decisions are made when beginning the process of creating an international marketing plan?
• What is the purpose of the Executive Summary in the International Marketing Plan?
• What are the benefits of creating a SWOT analysis within an International Marketing Plan?
  

At the corporate level, overall objectives are set for potential markets, followed by the decision to go global. Stakeholders' expectations are also evaluated. Business-level objectives include a situation analysis, which encompasses the different international modes of entry, as well as an in-depth external analysis. The functional level, the last of these analyses, looks at specific activities, including selecting target markets, identifying and implementing marketing strategies, allocating resources, and controlling the process.
 
Writing an executive summary can be challenging. That is why it should be the last part of the document that is written. The executive summary, which should be no more than a page or two, includes all of the relevant information contained in the report, including a brief overview of the market, the industry, and the product or service offered. Other information should include a competitive analysis, marketing strategies, and the target markets being sought. Once this information is completed within the report, it is easy to take the most relevant pieces of information and create the Executive Summary for those who want to gain a basic understanding prior to reading the entire Plan.
 
A SWOT analysis is a very useful tool for evaluating a company, as well as the markets in which the organization operates. By delving into a company's internal strengths and weaknesses, the organization can leverage the areas in which they excel and identify areas in which improvements are needed. This can include strengths, such as having a competitive advantage, brand image, company longevity, and weaknesses including a lack of innovation, a need for expanded marketing efforts, or a shortage of qualified managers.
 
By evaluating opportunities and threats that exist, a company can identify areas of growth, new target markets, trends, or new ways to reach consumers, as well as gain an understanding of the competition in a marketplace, the legal and technological challenges that exist, or cultural factors that could impact organizational success in a foreign market.
 
To review, see Writing an International Marketing Plan and Marketing Plan Basics.

3c. Analyze how the 4Ps and 4Cs of marketing change depending on the context of buyer and country

• What are the primary factors marketers must consider when launching promotions in global markets?
• Why is product placement challenging in global markets?
• How do the 4Ps correlate to the 4Cs?
• What is the primary focus of a marketing strategy?

Marketing in the global environment is more complex than in the company's home market, and organizations must consider a wider variety of factors beyond demographics and lifestyles. When developing promotional strategies, companies should be prepared to make changes and adjustments to respond to these variations so that global success can be achieved. Language is an important element to consider and should be given a great deal of attention, especially as it relates to translations of product names and campaigns. Colors have different meanings in different cultures and should be researched carefully to ensure that consumers are not offended or used in incorrect ways. Values based on cultural or religious beliefs also impact how consumers make their decisions, and companies should be keenly aware of how their messaging might address these factors. Finally, business is conducted in different ways across the globe, and interactions may vary depending on the cultural or political environment that exists.
 
While all elements of the marketing mix (the 4Ps) are important when developing marketing strategies, product placement and how consumers can obtain goods in global markets can be challenging. For example, not all markets have the same access to goods as consumers do in the US. Vending machines may not be available, grocery stores may not carry the same large varieties of merchandise, and bulk purchases may not be possible, as well. Product availability should be evaluated based on position in the marketplace relative to the competition, as well as where competitive products are available. Customizing strategies for product placement in different countries is essential for gaining a competitive advantage on a global scale.
 
The 4Cs expand on the 4Ps of the marketing mix and place a greater emphasis on the customer. The "product" aspect of the 4Ps aligns with "customer solution", where a company will sell only what the customer wants and needs. "Price" relates to "cost" and includes factors such as the time it takes to obtain a good or service, what it might cost a consumer to not buy a product, and other aspects of the total cost of satisfying a need or want. The "communication" element of the 4Cs relates to "promotion" in the 4Ps and encompasses all communication between the company and their customers, including advertising, personal selling, public relations, and other forms of messaging. Finally, "place" as an element of the 4Cs refers to "convenience" and how people are able to obtain goods and services. This also includes the search for a product, details about a product, and where/how a consumer prefers to make their purchase.
 
When developing the appropriate marketing mix for any marketplace, the focus of all activities should be on the customer. Companies should take significant steps to identify the needs of the business as they relate to consumer needs and wants, markets should be segmented appropriately, target markets should be profiled and evaluated carefully, and market research should be conducted to ensure that meaningful opportunities exist. Throughout this process, the needs and wants should always remain with the customer.
 
To review, see Global Marketing Mix and The Marketing Mix.

3d. Distinguish between the customer value chain and customer value proposition canvas and how marketers can use them successfully to target customers in international markets 

• What are the primary activities in the supply chain?
• What are the four components of "best value supply chains"?
• What are the elements of a value proposition, and why is it difficult to create?
• What are the components of an effective value proposition?
  

The first activity in the supply chain involves inbound logistics, which is the acquisition of raw materials. These are the ingredients, materials, and components that make up a product. This is followed by operations centers, where production takes place. Outbound logistics refers to the ways in which goods are moved from the manufacturer to the customer. Service is how a company interacts with the consumer and provides any needed assistance. Technology also plays a significant role in the supply chain process through the use of computer systems, mobile and other electronic devices, and any other technological processes the company may use.
 
Additionally, companies seek to negotiate for the raw materials they need to purchase through the process of procurement. By obtaining quality goods at the best price, companies can pass along savings to their customers to gain a competitive advantage.
 
Increased competition in the global marketplace has created the need for even greater efforts at meeting consumer needs. "Best value supply chains" seek to focus on the overall value that is provided to the customer and include a variety of factors. Through strategic supply chain management, a company can gain a competitive advantage and improve overall company performance. They can accomplish this through the speed of getting a product to market; the quality of supply chain activities; a reduction in costs throughout the process, and the flexibility of the company in meeting changing consumer needs and wants. By balancing these four metrics, a company can provide their customers with the highest levels of overall value.
 
A value proposition should identify the characteristics of the customer and demonstrate the value those customers will receive. This is the "who?" of the value proposition. The "what?" component defines the offering the customer will receive. "Why?" explains how the offering is valuable to a particular customer.
 
While a value proposition is a simple statement, it is challenging to create because it must distill several important elements into a concise message. This message must be easily understood by all stakeholders to enable the company to better focus on the needs of the customer, the goals of the organization, and the various audiences they serve.
 
The most effective value propositions are short and concise. They should be clear about what the company is offering and the value it provides to the consumer. The message should be meaningful and give the consumer motivation to make a purchase. Finally, a value proposition should seek to differentiate the product from the competition and highlight the product's USP (unique selling proposition).
 
To review, see The Value Chain and The Value Proposition.

3e. Discuss how the customer value chain and customer value proposition canvas change depending on the context of the buyer and country 

• What is customer lifetime value, and how can companies develop lasting relationships with their customers?
• What is the benefit of effective customer relationship management?
• What are the factors that influence the consumer decision-making process?
  

The first step in developing customer relationships and identifying customer lifetime value is the meeting and getting acquainted stage. This involves finding the right customers, understanding customer needs, and building awareness of a product or service. The next step is to provide a satisfying customer experience, which includes measuring customer satisfaction, tracking changes in customer needs and wants, and generating goodwill and loyalty. Finally, companies should seek to sustain committed relationships by generating repeat purchases, anticipating changing needs, and deepening existing relationships.
 
This process is quite complex on a global scale since international markets each have their own unique characteristics. Additionally, changing trends, cultural elements, and political and economic environments may be volatile and require quick actions on the part of the marketer.
 
Companies develop strong relationships with their customers through their marketing efforts. This process of creating loyalty through marketing enables a company to reduce their operating costs and increase profitability. Generally, gaining business from existing companies takes less time, effort, and money than generating sales from new customers or taking business away from the competition.
 
The first factor that influences the consumer decision-making process is situational factors. These relate to how involved a consumer is in making the actual purchase based on the choices available. Personal factors, including demographics and lifestyles, also play a role in how consumers make their purchases. Consumer motivation, attitudes, and beliefs are all psychological elements that play a role in the process. Finally, consumers are highly influenced by a variety of social factors, including culture, social class, reference groups, and family members.
 
As stated earlier, these factors vary widely in the global environment, and marketers need to ensure that these elements are taken into consideration when creating marketing campaigns.
 
To review, see The Role of Customers in Marketing.

Unit 3 Vocabulary

This vocabulary list includes the terms that you will need to know to successfully complete the final exam.

• 4Cs
  
• 4Ps
• consumer decision-making process
• distribution process
• exchange function
• executive summary
• global change strategy
• global marketing mix strategy
• global message strategy
• global offer strategy
• inbound logistics
• meeting and getting acquainted
• operations centers
• outbound logistics
• pricing strategies
• procurement
• product adaptation
• satisfying customer experience
• service
• straight product extension
• SWOT analysis
• USP (unique selling proposition)
• value proposition