Topic 4

1. Topic 4 Marketing International Marketing and E-Commerce

2. Learning Objectives • Evaluate the opportunities and threats posed by entry into international markets • Analyse the cultural, legal, political, social and economic issues of entering international markets • Analyse the effect of e-commerce on the marketing mix • Discuss the costs and benefits of e-commerce to firms and consumers

3. Definitions • International Marketing: marketing a firm’s products in foreign countries • Global marketing: refers to selling the same product using the same marketing approach throughout the world • An extension of international marketing • E.g. McDonald’s slogan – “I’m Lovin’ It!” • Global marketing is different than glocalizing

4. Why go international? • Saturated home markets • Potential to increase profits • Spreading risks between different markets

5. Why international marketing is different Political Differences Changes in governments can cause instability Economic & Social Differences Average living standards vary across the globe. The role of women. Cultural Differences Key factor in international marketing but difficult to define and measure Legal Differences Some goods are illegal in different countries Differences in business practices Accounting standards and rules can vary in different countries

6. Entry Into International Markets • Exporting – firm sells its products directly to overseas buyers • Direct Investment – firm sets up business in foreign country • High cost of investment, but can help avoid tariffs and take advantage of local labor • E-Commerce – trading via Internet allows firms to sell w/o setting up retail shops • Joint Ventures – 2 or more companies invest in shared business project • Strategic Alliances – companies share in project but do not form a new business • Mergers or Takeovers – companies join or one company buys another • International Franchising \ Licensing – others trade under name in return for a share of the profits • E.g. Burger King

7. Opportunities and Threats of International Markets • Benefits: • Wider customer base – more market share • Economies of scale – increased operations often decreases average production costs • Increase brand recognition • Spread risk – less risk exposure when operating in multiple countries • Extend product life cycle – if product has decline domestically, it can grow overseas • Threats: • Cultural Issues • Local preferences – in China, McDonald's sells more chicken. Halloween may not take off in Asia • Language – English is language of business, but firms must be aware of cultural standards • Ethics – some things are unethical in select regions • Political, Legal, Demographic, and Economic Issues • Read about these issues on page 593-4, and write 3 bullet points on each topic in your notes.

8. International Marketing – Alternative Strategies

9. Global localisation • Glocalising

10. Global localisation Advantages Disadvantages Scope for economies of scale is reduced International brand could lose its power and identity Additional costs • Local needs, tastes and cultures are reflected in the marketing mix hopefully leading to higher sales and profits • No attempt to impose foreign brands / products / adverts • Products more likely to meet legal requirements • Less local opposition

11. Pan global / pan regional marketing Advantages Disadvantages Still may be necessary to develop products to suit cultural or religious variations Legal restrictions Brand names do not always translate effectively • Common identity for the product can be established • Cost reduction • It recognises that differences between consumers in different countries are reducing E.G. teenagers

12. Introduction – E-Commerce • E-commerce: trading of goods and services via the Internet • Could include financial services, government services, retailers • Advantages: • Allows businesses to be open 24 hours • Larger customer base • Lower operating costs and overhead • Another channel of distribution • Disadvantages: • Set-up costs – hiring specialists • Fraudulent trade • Finance charges from credit card companies • More web pages than people in the world

13. The smallest things can make your business successful • http://realbusiness.co.uk/article/19773-the-secret-sauce-of-online-success-is-ecommerce-packaging

14. Business-to-business (B2B) • B2B: E-commerce catered for the needs of other businesses • Examples: • Corporate banking, Insurance agencies, advertising agencies, etc. • Marketing techniques are different to businesses than to consumers

15. Business-to-customers (B2C) • B2C: e-commerce directly catered for the end-user • Examples: • Amazon.com • Ebay.com • Seach engines (e.g. Google) operate both as B2B and B2C. • E.g. consumers use the engines, but businesses will ‘pay-per-click’ (businesses pay Google for sponsored links and pay based on number of ‘clicks’)

16. Impact of e-commerce on the marketing mix Product Each consumer can be communicated with individually and personally. Businesses selling over the internet can afford to stock a much wider range of goods. E.G. ASOS Clothing Price Markets are more competitive as prices can be compared so easily – price comparison websites. Customers have more control over price setting. Promotion Banners, pop-ups, text messages, web pages, viral marketing – the costs of reaching huge numbers of potential customers have been cut. Place Has the day of the high street passed?