MARK 302

International Marketing

Professor Kim Fam

Founding Director of Marketing in Asia
Group (MAG)
www.magscholar.com
kim.fam@vuw.ac.nz
Room RH 1106

Course Structure

Lectures
Class Participation
Invited Speaker/s
Tutorials

At the end of the course,

students should be familiar with:
1. Concepts and theories relating to international
marketing.
2. Globalization in the year of dotcom.
3. Players in global economy.
4. Asian marketing environment.
5. Marketing practices and techniques of doing
business across international boundaries.

Assessment
Class Participation

10%

Tutorial Participation

10%

>9 participations = 10%

8 participations = 8%
7 participations = 7%
6 participations = 6%
5 participations = 5%
1-4 participations = 2%

Individual Assignment 20%

Group Project report

20%

Final Exam-individual

40%

0%
5 tutes = 1
%
4 tutes = 6
%
3 tutes = 4
%
2 tutes = 2
%
1 tute = 1

Expectations (of students)

Undergraduate background
Disciplinary
(management/marketing/etc.)
General subjects

Inquisitive:
The best student is the one who asks
why? .and then seeks the answer!

Preparation:
Pre-reading
Thoughtful consideration

Willing to share

Expectations (of students)

Lectures (my job):
Introduction & Summary
Set the general framework

Student Work (your job):

Prepare before attending a
lecture
Attend tutorials
Complete assignment on time

Some
rules:
1) If you dont understand, ask - or I
assume you DO know!!
2) If you want to know more, ask
-otherwise, we discuss what I want to
discuss!!
3) If you dont agree, say so!! Opinions are
valuable commodities - and I am not
always right!!
4) Treat each other with respect and
civility, for we are all on a journey of
discovery - but, you dont have to

Marketing

PLACE

Promotion
Product

Pricing

Marketing

PLACE

PROMOTION

Product

Pricing

International
Markets

International
Markets

Marketing

PLACE

PROMOTION

Product

Pricing

International Markets

What do you need to know

before going international?
Marketing

PLACE

PROMOTION

Product

Pricing

International Markets

Environment & Target Market

Marketing

PLACE

PROMOTION

Product

Pricing

International Markets

Environment
- Technology, Financial, Social, Culture,
Political, Legal

Marketing

PLACE

PROMOTION

Product

Pricing

International Markets

Target Market
- Demographics , Geography, Market
Structure

Marketing

PLACE

PROMOTION

Product

Pricing

Domestic versus Foreign Environment

International Markets
Environment
- Technology, Financial,
Social, Culture, Political,
Legal

Marketing
Strategy

Target Market
- Demographics ,
Geography, Market
Structure

Marketing

PLACE

PROMOTION

Product

Pricing

What is international marketing?

The process of planning and conducting
transactions across national borders to create
exchanges that satisfy the objectives of
individuals and organisations
A tool to improve domestic and global position
Subject to constantly changing macroenvironmental factors

The international marketplace

A powerful force drives the world towards a
converging commonality, and that force is
technology (Levitt 1983)
Globalisation is creating a borderless
economy
Production becomes more efficient

Why go international?
Comparative Advantage

(country level)

Countries should focus on what they do well rather

than trying to produce everything. Fletcher &
Brown, 4th Edition

Why go international?
Competitive Advantage

(firm level)

When a company succeeds in creating more value

for customers than its competitors, that company is
said to enjoy competitive advantage.

Product Life-cycle Extension

Different economies at different stages will provide new
growth markets for mature products.

Why go international?
Internalization
Firms relinquish control of their overseas operation. Usually
activities such as pricing, promotion and distribution are
relegated to overseas agents.
Think of the problems that may be reduced by internalization!

Managing relationships with overseas government

Control over purchases and sales
Consistency in the volume and content of promotional activities
Control over retail outlets, etc

Why go international?
Relationships and Networks
As there are risks involved in going overseas, most firms
would be cautious in dealing with these perceived risks.
Establishing relationship would take time, money and
lots of networking efforts. CHOPSTICKS MARKETING
Longevity comes with experience.
For NZ firms wanting to trade with China, they can first
get in touch with NZTE, MFAT, MED, etc.

The international marketplace

Strong drive towards uniformity and
homogeneity
iPod: designed in America, assembled in
China, and parts are sourced from South
Korea, Taiwan, Japan and Singapore
The factory floor spans the world

The international marketplace

Location is important to internationally
orientated firms
Australia's tyranny of distance:
diminished by technological advances in
transportation and communications
The locus of world power shifts (e.g. the rapid
economic growth in Asia, see Fig 1.4 next
slide)

The international marketplace

Timing is an important issue
Economic growth varies by country and period
Growth tends to slow down as an economy
matures

International marketing questions

Should I obtain my supplies domestically or

from abroad?
What marketing adjustments are or will be
necessary?
What threats from global competition should I
expect?
How can I work with these threats to turn them
into opportunities?
What are my strategic global alternatives?

The importance of world trade

Trading blocs have emerged (e.g. NAFTA,
ASEAN; ASEAN +3; Asian Infrastructure
Investment Bank led by China AIIB $100b).
Encourages trade
Firms go global or risk losing domestic markets
to overseas competitors
Impacts domestic policy making

Global linkages
Countries, institutions and individuals are all
linked
Great pressure to quickly gather, manipulate,
analyse and disseminate information
Asian Economic Crisis
Global Financial Crisis

Global linkages:
The 2008 financial crisis

Global linkages
World trade opens up entirely new business
horizons
Technological innovation effects all business
activities
Firms can operate in a market space rather
than a marketplace

Global linkages
Economic interdependence is not stable
for example, the decline of the United
Kingdoms relative importance to Australia
& NZ
Pace of change is accelerating
The role countries play is changing

Domestic policy repercussions

Low interest rates that result in an outflow of
funds are unsustainable
Many domestic issues have become
international concerns
In 2006 the WTO core subject was subsidies

Domestic policy repercussions

Protectionist measures:
benefits some i.e. Australian and New
Zealand agriculture
harms others i.e. Indian agriculture
Policies have international repercussions
Politicians take into account the domestic
effects of international commitments

Domestic policy repercussions

Currency flows:
independent of trade
set exchange rates (values of currencies
relative to each other)
outnumber trade flows 100:1
Exchange rates determine the level of trade

Domestic policy repercussions

Policy makers seek to restrict global trade to
regain power and influence events with:
tariffs
quotas
other import regulations
The usefulness of these measures are often
restrained by international agreements (i.e.
WTO)

Challenges in international
marketing
Anticipating the actions of global competitors
Continual development of strategy requires:
technological innovation
process improvements
creativity

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Challenges in international
marketing

Enhancing market position

Awareness of global developments
Adaptation to market conditions
Social effects of globalisation are often
questioned (e.g. G8 protests)

Challenges in international
marketing

Climate change
Changing consumer attitudes
G20 Summit
Heightened ethical concern
The popularisation of green promotion

Opportunities in international
marketing
Between 19992008 world trade nearly
trebled (US$5.7 trillionUS$16.1 trillion)
For many countries exports exceed GDP
(see Fig. 1.5)
Emerging economies (i.e. China and India)
New technologies

Opportunities in international
marketing

Opportunities in international
marketing

Firms can reach more customers

Market saturation can be avoided
Multinational agreements combine strengths
Firms engaged in international marketing
outperform their domestic counterparts

Opportunities in international
marketing

Lowers the risk of insolvency

Higher wages
Consumers have more variety
Firms can learn from their competitors
Global employee recruitment

Opportunities in international
marketing
SMEs are born global
Isolation is impossible
Exploiting international opportunities
requires careful exploration
http://www.odt.co.nz
/news/business/283668/dunedin
-firm-global-reach-says-dream-big

If you dont know

Geography, you are
History.