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International marketing

International marketing. Definitions, scope and issues. DEFINITIONS. ‘the objective is, as in domestic markets, to understand the customer and market needs and strive to meet them with the capabilities the organization has at its disposal’.

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International marketing

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  1. International marketing Definitions, scope and issues

  2. DEFINITIONS • ‘the objective is, as in domestic markets, to understand the customer and market needs and strive to meet them with the capabilities the organization has at its disposal’. • ‘adapt familiar techniques to unfamiliar circumstances.’ Fifield and Lewis ‘International Marketing Strategy’ 1995

  3. Type of marketing Domestic marketing Export marketing International marketing Multinational marketing Global marketing Orientation Ethnocentric Ethnocentric Polycentric Regiocentric Geocentric Kotabe and Helsen – orientation framework

  4. Keegan and Schlegelmilch - business classification • Domestic – export focus • International – Multi domestic strategy • Global/Transnational – globally integrated strategy

  5. Economic background

  6. The world economy - Glossary • Gross Domestic Product (GDP) =A country’s total output of goods and services • Balance of (merchandise) trade= exports-imports • World output=sum of all countries’ GDPs • World trade=total exports + imports • Disposable income=total income-essential purchases

  7. The world economy - Glossary • Foreign Direct Investment (FDI) =Foreign manufacturing/operations located in a host country • Portfolio investment=short term foreign investment in equities, commodities, currencies etc These are a key source of financial flows between countries

  8. WORLD TRADE *(exports + imports) and world output, 1990-2000 • World trade growing at <6%p.a. • 12% in 2000 • World output growing at <2% p.a. • 4% in 2006 * Merchandise

  9. Exports and imports of goods % GDP (2000) ( )=1948

  10. Share of global exports and imports of services (2000) – top 5 exporters

  11. Disposable income threshold • $10,000 (£6.5k) :virtually no disposable income • $20,000 (£11k): considerable purchasing power

  12. Trade Blocs ‘Regional economic arrangements’ (from free trade to economic union)

  13. Big Emerging Markets (BEMs) Chinese Economic Area (CEA) China and HK, Taiwan Association of Southeast Asian Nations (ASEAN) • Indonesia, Brunei, Malaysia, Singapore, Thailand, the Philippines, Vietnam • Customs union: low internal tariffs and common external tariff

  14. Other BEMs India, S. Korea, Mexico, Brazil, Argentina, S. Africa, Poland, Turkey.

  15. ‘Regional economic arrangements’ (from free trade to economic union) North American Free Trade Area (NAFTA) US, Canada and Mexico • Low internal tariffs, with local content laws

  16. Mercado Cooperativo Sur (MERCOSUR):Brazil, Argentina, Uruguay, Paraguay • Free trade area

  17. European Union (EU) Germany, France, Italy, UK, Spain, Greece, Portugal, Belgium, Netherlands, Austria, Sweden, Denmark, Finland, Ireland, Luxemburg, New members from 1 May 2004 Cyprus, Czech Rep., Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia. • Towards monetary union

  18. TODAY’S ECONOMIC DRIVERS • Technology which impacts on: • Communications: • Foreign travel • Global advertising • Web-based trading • Costs of production • Customisation • Access to information • Logistics

  19. TODAY’S ECONOMIC DRIVERS • De-regularization and privatisation:

  20. The Global Village - Cultural convergence • Evidenced by: • Emergence of global market segments eg young, urban professional: • Nike trainers (US, made in China) • Toshiba laptops (Japanese) • Nokia mobiles (Finnish) • AOL ISP (US) • BMW car (German)

  21. The Global Village (cont.) • This has led to: • Growth in product standardization (see Levitt 1983) • Growth in ‘global’ brands • Mergers, acquisitions and strategic alliances: • Swatch and Mercedes (electric car) • Ford and Jaguar cars • AOL and Time Warner

  22. THE KEY QUESTIONS • Do we go international/global? • Where do we operate? • How do we enter and operate? • What do we offer? • Should it be adapted? • What are the implications for the marketing mix?

  23. An analytical framework

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