Marketing in SME’s and MNE’s. A Case Study: the Celtic Tiger Economy

1. Marketing in SME’s and MNE’s. A Case Study: the Celtic Tiger Economy Prof. Gavin K. L. Davis – BBS MBS MMII

2. Ireland in Europe • Previously called the “Basket Case of Europe” • Unemployment rates 16% (Avg 8%) • Ireland Population just 1% of EU • GDP 1.45% of EU 15 (Gross Domestic product) • Trade mainly with the UK • Joined the EU in 1973 Prof. Gavin K. L. Davis – BBS MBS MMII

3. Reasons for the Boom • Many economists credit Ireland’s low Corporation tax as the reason • Transfer payments (4% GNP) • Membership of EU opened up markets • The EU aid was used to increase investment in education and infrastructure • Ireland became attractive for foreign investors (FDI) Prof. Gavin K. L. Davis – BBS MBS MMII

4. Reasons for the Boom Prof. Gavin K. L. Davis – BBS MBS MMII

5. Transfer Pricing $65m $87.5m $100m Prof. Gavin K. L. Davis – BBS MBS MMII

6. International Marketing • Changing Marketplace • International marketing occurs when firms conduct transactions across borders • Improves Marketing Share and Profits • Domestic Marketing Strategies cannot be used internationally • Strategies should fit the unique characteristics of each international market Prof. Gavin K. L. Davis – BBS MBS MMII

7. Entering a new Market Investigate: • Trade system regulations and restrictions • Marketing objectives and policies before going overseas • Mode of entry • Exporting/Joint ventures • Licensing - firms allow other businesses to use the manufacturing process, trademark, patent, trade secret, or other items of value for a fee or royalty Prof. Gavin K. L. Davis – BBS MBS MMII

8. BCG Growth-Share Matrix Boston Consultancy Group developed this matrix to help firms entering new markets • Used for Companies large enough to be organised into Strategic Business Units (SBU) • Displays the market growth rate vs market share • Market Share = Firm’s Sales / Total Market Sales • This method helps businesses allocate resources to different SBU’s Prof. Gavin K. L. Davis – BBS MBS MMII

9. BCG Growth-Share Matrix • Cash Cow: a business unit that has a large market in a mature, slow growing industry. Requires little investment & generates cash for other SBU’s • Star: a business unit that has a large market share in a fast growing industry, requires investment. May become a cash cow in the future Prof. Gavin K. L. Davis – BBS MBS MMII

10. BCG Growth-Share Matrix • Question Mark: Business unit that has a small market share in a high growth market. They require resources to grow in the market but success is unknown • Dog: Small market share in a mature industry. May need a lot of cash but ties up capital. Unless it has some strategic purpose, a dog should be liquidated Prof. Gavin K. L. Davis – BBS MBS MMII

11. BCG Growth-Share Matrix Prof. Gavin K. L. Davis – BBS MBS MMII

12. BCG of Playstation 3 Columbia Pictures MP3 Playstation 2 Prof. Gavin K. L. Davis – BBS MBS MMII

13. P.E.S.T.E.L. Framework • Political: Worldwide, European and Government directives • Economic: Funding mechanisms and streams, internal funding models, budgetary restrictions, income generation targets • Social: General lifestyle changes, changes in populations, distributions and demographics Prof. Gavin K. L. Davis – BBS MBS MMII

14. P.E.S.T.E.L. Framework • Technological: Major current and emerging technologies, research or administration • Environmental: Local, national and international environmental impacts, outcomes of political and social factors • Legal: European and national proposed and passed legislation Prof. Gavin K. L. Davis – BBS MBS MMII

15. Strengths A distinctive competence Location advantages Technology Economies of Scale Cost Advantages Proven Management Financial Resources Weaknesses No Strategic Direction Weak Image No R&D Lack of Mgt Poor record Competitive Disadvantage Competitive pressure Internal Assessment of the Organisation Prof. Gavin K. L. Davis – BBS MBS MMII

16. Opportunities Additional customers Entering a new market Diversifying business Weaknesses of others Expanding ranges of products and/or services offered Threats Entry of competitors Growing Substitutes Government Policy Vulnerability to Economic pressures Power of customers Power of suppliers Demographics External Assessment of the Organisation Prof. Gavin K. L. Davis – BBS MBS MMII

17. Strengths ………………. ………………. Opportunities ………………. ………………. Weaknesses ………………… ………………… Threats ………………… ………………… SWOT Analysis of Prof. Gavin K. L. Davis – BBS MBS MMII

18. Branding • Brand is the visual, emotional, rational, and cultural image that you associate with a company or a product • Makes your product selection easier • The fond memories of childhood and refreshment that people have when they drink Coke is often more important than a little bit better cola taste • When you think of……………. Prof. Gavin K. L. Davis – BBS MBS MMII

19. Branding • Michael Jordan, “Just do it” • Reliable, sporty, compfortable • Unreliable, bad quality, unsafe • Unhealthy/healthy, “I’m lovin’ it!” Prof. Gavin K. L. Davis – BBS MBS MMII

20. Developing a Brand • Start with your target market • Age, Sex, Spending habits, price elasticity • Communicate your Unique Selling Proposition (USP) • Look at your competitors • Are your customers labour intensive? • What emotional benifits do they expect? • What stage is the market at? Prof. Gavin K. L. Davis – BBS MBS MMII

21. New Product Life-Cycle Prof. Gavin K. L. Davis – BBS MBS MMII

22. BEST Global Brands 2006 Prof. Gavin K. L. Davis – BBS MBS MMII

23. THANK YOU FOR YOUR ATTENTION, ANY QUESTIONS PLEASE ASK gavinkldavis@hotmail.com Prof. Gavin K. L. Davis – BBS MBS MMII