Beruflich Dokumente
Kultur Dokumente
Manila
School of Business Education
An Executive Summary
International Marketing
S.Y 2018-2019
Submitted by:
14-1-95953
Submitted to:
Faculty-In-Charge
[i]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
INTRODUCTION
The Global Marketing Mix
[ii]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
CHAPTER 11
PRODUCT MANAGEMENT AND GLOBAL BRANDING
The product development process begins with idea generation. Ideas may come
from within the company—from the research and development staff, sales personnel, or
almost anyone who becomes involved in the company’s efforts. Intermediaries may
suggest ideas because they are closer to the changing, and often different, needs of
international customers. In franchising operations, franchisees are a source of many
new products. For example, the McFlurry, McDonald’s ice-cream dessert, was the
brainchild of a Canadian operator. 9 Competitors are a major outside source of ideas. A
competitive idea from abroad
may be modified and improved to suit another market’s characteristics.
[iii]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
The final stages of the product development process will involve testing the
product in terms of both its performance and its projected market
acceptance.Depending on the product, testing procedures range from reliability tests in
the pilot plant to minilaunches, from which the product’s performance in world markets
will be estimated. Any testing will prolong fullscale commercialization and increase the
possibility of competitive reaction. Further, the cost of test marketing is substantial—on
the average, $1 to $1.5 million per market.
The specific approach chosen and variables included will vary by company, according
to corporate objectives and characteristics as well as the nature of the product market.
A product portfolio approach based on growth rates and market share positions allows
the analysis of business entities, product lines, or individual products. Exhibit 14.2
represents the product-market portfolio of Company A, which markets the same product
line in several countries. The company is a leader in most of the markets in which it has
[iv]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
operations, as indicated by its relative market shares. It has two cash cows (United
States and Canada), four stars (Germany, Great Britain, France, and Spain), and one
“problem child” (Brazil). In the mature U.S. market, Company A has its largest volume
but only a small market share advantage compared with competition. Company A’s
dominance is more pronounced in Canada and in the EU countries.
The goal of many marketers currently is to create consistency and impact, both
of which are easier to manage with a single worldwide identity.58 Global brands are a
key way of reaching this goal. Global brands are those that reach the world’s mega-
markets and are perceived as the same brand by consumers and internal
constituents.59 While some of the global brands are completely standardized, some
elements of the product may be adapted to local conditions. These adjustments include
brand names (e.g., Tide, Whisper, and Clairol in North America are Ariel, Allways, and
Wella in Europe), positioning (e.g., Ford Fiesta as a small car in Germany but a family
vehicle in Portugal), or product versions sold under the same brand name (e.g., 9-13
different types of coffee sold under the Nescafe name in Northern Europe alone)
[v]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
CHAPTER 12
GLOBAL MARKETING OF SERVICE
Stand-Alone Services
Services do not always come in unison with goods. Increasingly, they compete against
goods and become an alternative offering. For example, rather than buy an in-house
computer, the business executive can contract computing work to a local or Foreign
Service firm.
[vi]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
Since the industrial revolution, the United States has seen itself as a primary
international competitor in the area of production of goods. In the past few decades,
however, the U.S. economy has increasingly become a service economy, as Exhibit
15.3 shows. The service sector now produces 80.5 percent of the U.S. GDP and 66.7
percent of the GDP throughout the world.5 The service sector accounts for most of the
growth in total nonfarm employment. Only a limited segment of the total range of
services is sold internationally. Federal,
state, and local government employees, for example, sell few of their services to
foreigners. U.S. laundromats only occasionally service foreign tourists, yet many service
industries that do market abroad often have at their disposal large organizations,
specialized technology, or advanced professional expertise. Strength in these
characteristics has enabled the United States to become the world’s largest exporter of
services. Total U.S. service exports grew from $6 billion in 1958 to $373 billion in
2005.6 The contribution of services to the
U.S. balance of payments is highlighted in Exhibit 15.4. It shows that the U.S. services
trade balance is producing a substantial surplus and makes up for a part of the huge
deficits in merchandise trade.
The rapid rise in international services marketing has been the result of major
shifts in the business environment and innovations in technology. One primary change
in the past decade has been the reduction of governmental regulation of services. This
deregulation is clearly seen within the United States. In the mid-1970s, a philosophical
decision was made to reduce government interference in the marketplace,
The data collected on service trade are quite poor. Service transactions are often
“invisible” statistically as well as physically. The fact that governments have precise data
on the number of trucks exported, down to the last bolt, but little information on
reinsuranceflows, reflects past governmental inattention to services.
Typical obstacles to services trade can be categorized into two major types:
barriers to entry and problems in performing services. Governments often justify
barriers to entry by referring to national security and economic security. For example,
the impact of banking on domestic economic activity is given as a reason why banking
should be carried out only by nationals or indeed be operated entirely under
government control.
[vii]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
Electronic commerce has opened up new horizons for global services reach and
has drastically reduced the meaning of distance. For example, when geographic
obstacles make the establishment of retail outlets cumbersome and expensive, firms
can approach their customers via the World Wide Web. Government regulations that
might be prohibitive to a transfer of goods may not have any effect on the international
marketing of services.
For many firms, participation in the Internet will offer the most attractive starting
point in marketing services internationally. Setting up a Web site will allow visitors from
any place on the globe to come see the offering. Of course, the most important problem
will be communicating the existence of the site and enticing visitors to come. For that,
very traditional advertising and communication approaches often need to be used.
[viii]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
CHAPTER 13
ADVERTISING, PROMOTION AND SALES
Elements of Communication
The word communication has its root in the Latin word Communicare, which means to
share. Communication is a two way process in which there is an exchange and
progression of ideas towards a mutually accepted direction or goal. For this process to
materialize, it is essential that the basic elements of communication be identified .these
elements are:
3. Message: Message is the encoded idea transmitted by the sender. The formulation
of the message is very important, for an incorrect patterning can make the receiver lose
interest. The sender has to carefully decide on the order in which he would like to
present his ideas. The ordering should be based on the requirements of the listener so
that its significance is immediately grasped. The minute the receiver finds his goals
codified in the message, he sits up, listens and responds.
[ix]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
Process of Communication
The sender encodes the message and sends it through a channel. The
channel is the language used – words, actions, signs, objects, or a combination
of these. The receiver receives the message, decodes it, and acts on it. If the
message received is the same as the message sent, there will be a response; if
not, there has been a breakdown of communication. This may happen because
of noise. The transmission of the receiver’s response to the sender is called
feedback. If you are sending a message to somebody, your communication cycle
is complete only when you get a response from the recipient of your message.
Otherwise you need to resend the message. Communication takes place in a
well-defined set up called the communication environment. Messages
themselves are transferred through a medium, the channel. Language is the tool
we use through these channels to exchange information.
In brief, the essentials of effective communication are:
Role of Source
[x]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
Media
After choosing the message, the advertiser’s next task is to choose media to
carry it. The steps, here, as following: Deciding on Reach, Frequency and Impact:
Media Selection involves findings the most cost-effective media to deliver the desired
number of exposures to the target audience. The effect of exposures on audience
awareness depends upon the exposures’ reach, frequency and impact.
Marketing Mix is the set of marketing tools that the firm uses to pursue its
marketing objectives in the target market. McCarthy classified these tools into four
broad groups that he called the four P-s of marketing: Product, Price, Place and
Promotion. From a buyer’s point of view, each marketing tool is designed to deliver a
customer benefit. Robert Lauterborn suggested that the sellers’ four P-s correspond to
the customers’ four C-s.
Advertising Functions
[xi]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
CHAPTER 14
PRICING STRATEGIES AND TACTICS
Three philosophies of transfer pricing have emerged over time: (1) cost-based
(direct cost or cost-plus), (2) market-based (discounted “dealer” price derived from end
market prices), and (3) arm’s-length price, or the price that unrelated parties would
have reached on the same transaction. The rationale for transferring at cost is that it
increases the profits of affiliates, and their profitability will eventually benefit the entire
corporation. In most cases, cost-plus is used, requiring every affiliate to be a profit
center. Deriving transfer prices from the market is the most marketing-oriented method
because it takes local conditions into account. Arm’s-length pricing is favored by many
constituents, such as governments, to ensure proper intracompany pricing. However,
the method becomes difficult when sales to outside parties do not occur in a product
category. Additionally, it is often difficult to convince external authorities that true
negotiation occurs between two entities controlled by the same parent. In a study of 32
U.S. based multinational corporations operating in Latin America, a total of 57 percent
stated that they use a strategy of arm’s-length pricing for their shipments, while the
others used negotiated prices, costplus, or some other method.
Transfer pricing policies face two general types of challenges. The first is internal
to the multinational corporation and concerns the motivation of those affected by the
pricing policies of the corporation. The second, an external one, deals with relations
between the corporation and tax authorities in both the home country and the host
countries.
Performance Measurement
[xii]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
Taxation
Transfer prices will by definition involve the tax and regulatory jurisdictions of the
countries in which the company does business, as is pointed out in The International
Marketplace 17.1. Sales and transfers of tangible properties and transfers of intangibles
such as patent rights and manufacturing know-how are subject to close review and to
determinations about the adequacy of compensation received. This quite often puts the
multinational corporation in a difficult position. U.S. authorities may think the transfer
price is too low, whereas it may be perceived as too high by the foreign entity,
especially if a less-developed country is involved. Section 482 of the Internal Revenue
Code gives the Commissioner of the IRS vast authority to reallocate income between
controlled foreign operations and U.S. parents and
between U.S. operations of foreign corporations.
Costs
Costs are frequently used as a basis for price determination largely because they
are easily measured and provide a floor under which prices cannot go in the long term.
These include procurement, manufacturing, logistics, and marketing costs, as well as
overhead. Quality at an affordable price drives most procurement systems. The decision
to turn to offshore suppliers may often be influenced by their lower prices, which enable
the marketer to remain competitive.
[xiii]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
Demand will set a price ceiling in a given market. Despite the difficulties in
obtaining data on foreign markets and forecasting potential demand, the global
marketer must make judgments concerning the quantities that can be sold at different
prices in each foreign market. The global marketer must understand the price elasticity
of consumer demand to determine appropriate price levels, especially if cost
structures change. A status-conscious market that insists on products with established
reputations will be inelastic, allowing for far more pricing freedom than a market where
price-consciousness drives demand. Many U.S. and European companies have
regarded Japan as a place to sell premium products at premium prices. With the
increased information and travel that globalization has brought about, status-
consciousness is being replaced by a more practical consumerist sensibility: top quality
at competitive prices
Competition helps set the price within the parameters of cost and demand.
Depending on the marketer’s objectives and competitive position, it may choose to
compete directly on price or elect for nonprice measures. If a pricing response is
sought, the marketer can offer bundled prices (e.g., value deals on a combination of
products) or loyalty programs to insulate the firm from a price war. Price cuts can also
be executed selectively rather than across the board. New products can be introduced
to counter price challenges. For example, when Japanese Kao introduced a low-priced
diskette to compete against 3M, rather than drop its prices 3M introduced a new brand,
Highland, that effectively flanked Kao’s competitive incursion. Simply dropping the price
on the 3M brand could have badly diluted its image. On the nonprice front, the company
can opt to fight back on quality by adding and promoting value-adding features.
Both the Mexican and Thai cases of currency devaluation led to regional effects
inwhich international investors saw Mexico and Thailand as only the first domino in a
long series of failures to come. For example, the historically stable Korean won fell from
Won 900/US$ to Won 1,100/US$ in one month. The reasons for the crises were largely
in three areas allowing comparison: corporate socialism, corporate governance, and
banking stability and management. In 1997, business liabilities exceeded the capacities
of government to bail businesses out, and practices such as lifetime employment were
no longer sustainable. Many firms in the Far East were often controlled by families or
groups related to the governing party of the country. The interests of stockholders and
creditors were secondary in an atmosphere of cronyism.
[xiv]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
CHAPTER 15
GLOBAL DISTRIBUTION AND LOGISTICS
The integration of these three concepts has resulted in the new paradigm
of supply chain management, which encompasses the planning and
management of all activities involved in sourcing and procurement, conversion,
and logistics. It also includes coordination and collaboration with channel
partners, which can be suppliers, intermediaries, third party service providers,
and customers. In essence, supply chain management integrates supply and
demand management within and across companies.
[xv]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
Transportation Infrastructure
In industrialized nations, firms can count on an established transportation
network. Internationally, however, major infrastructural variations may be
encountered. Some countries may have excellent inbound and
outbound.transportation systems but weak transportation links within the country
as shown in The International Marketplace 16.2.
Availability of Modes
Ocean Shipping
Air Shipping
[xvi]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
The international marketer must make the appropriate selection from the
available modes of transportation. This decision, of course, will be heavily
influenced by the needs of the firm and its customers. The manager must
consider the performance of each mode on four dimensions: transit time,
predictability, cost, and noneconomic factors.
Transit Time
The period between departure and arrival of the carrier varies significantly
between ocean freight and airfreight. The 45-day transit time of an ocean shipment can
be reduced to 12 hours if the firm chooses airfreight. The length of transit time will have
a major impact on the overall operations of the firm. A short transit time may reduce or
even eliminate the need for an overseas depot. Also, inventories can be significantly
reduced if they are replenished frequently. As a result, capital can be freed up and used
to finance other corporate opportunities. Transit time can also play a major role in
emergency situations. If the shipper is about to miss an important delivery date because
of production delays, a shipment normally made by ocean freight can be made by air.
Predictability
Providers of both ocean and airfreight service wrestle with the issue of reliability.
Both modes are subject to the vagaries of nature, which may impose delays. Yet
because reliability is a relative measure, the delay of one day for airfreight tends to be
seen as much more severe and “unreliable” than the same delay for ocean freight. But
delays tend to be shorter in absolute time for air shipments. As a result, arrival time via
air is more predictable.
Cost
[xvii]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
CHAPTER 16
SOCIAL NETWORKS AND COMMUNICATION
Campaign Objectives
The Budget
The promotional budget links established objectives with media, message, and
control decisions. Ideally, the budget would be set as a response to the objectives to be
met, but resource constraints often preclude this approach. Many marketers use an
objective task method, as a survey of 484 advertising managers for consumer goods in
fifteen countries indicates (see Exhibit 18.2); however, realities may force compromises
between ideal choices and resources available.13 As a matter of fact, available funds
may dictate the basis from which the objective task method can start. Furthermore,
advertising budgets should
be set on a market-by-market basis because of competitive differences across markets.
When it comes to global image campaigns, for example, headquarters should provide
country organizations extra funds for their implementation.
[xviii]
EMILIO AGUINALDO COLLEGE
Manila
School of Business Education
Media Strategy
Target audience characteristics, campaign objectives, and the budget form the
basis for the choice between media vehicles and the development of a media schedule
Media Availability
Media spending, which totaled $385 billion in 2004 (with $403 billion expected for
2005, and $427 billion for 2006), varies dramatically around the world, as seen in
Exhibit 18.3. In absolute terms, the United States spends more money on advertising
than most of the other major advertising nations combined. Other major spenders are
Japan, the United Kingdom, Germany, Canada, and France. The mature U.S. market
anticipates continued growth in the future, but European integration and the
development of the Pacific Rim’s consumer markets are likely to fuel major growth.
Product Influences
Global Media
Media vehicles that have target audiences on at least three continents and for
which the media buying takes place through a centralized office are considered to be
global media. Global media have traditionally been publications that, in addition to the
worldwide edition, have provided advertisers the option of using regional editions. For
example, Time Europe covers the Middle East, Africa, and, since 2003, Latin America.
An Asian edition (Time Asia)
is based in Hong Kong and a Canadian edition (Time Canada) is based in Toronto. The
South Pacific edition, covering Australia, New Zealand, and the Pacific Islands, is based
in Sydney.
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