International Marketing & Operations

Further Explanation on the topic of International Marketing & Operations

International Marketing

What is meant by marketing ? Is it the same as sales? Definition of marketing according to American Marketing Association (AMA, 2004): Marketing is an organizational function & a set of processes for creating, communicating & delivering value to customers & for managing customer r/ships in ways that benefit the organization & its stakeholders. Thus, marketing is:
a process & function

It is also
a philosophy an attitude an orientation

International Marketing
It has multi-stakeholder application: Customers Suppliers Distributors Internally (Employees) Owners / investors Local community Government Unions, etc. Actually, there are several definitions of marketing & some of them are: Any interpersonal & inter-organizational r/ship involving an exchange is marketing ( William J . Stanton)
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International Marketing
The essence of Marketing is a transaction human needs & wants Marketers What is being marketed Target market Marketing is a social process by which individuals & groups obtain what they need & want through creating & exchanging products & value with others (Philip Kotler) This definition includes the following core concepts: Needs, wants & demands Products & services Value, satisfaction & quality Exchange, transaction & r/ships Markets & marketers
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an exchange

intended to satisfy

Accordingly, there are three elements in the marketing process:

International Marketing
Marketing can not be considered as a separate function; it is the whole business, seen from the point of view of its final results, that is profit, through customer satisfaction (Peter Drucker)

A Simple Marketing System

Communication

Industry

Market

Information/Feedback
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Marketing & Sales Concepts Contrasted

Starting Point Focus Means Ends

Factory

Existing Products

Selling & Promoting

Profits through Volume

The Selling Concept

Market

Customer Needs

Integrated Marketing

Profits through Satisfaction

The Marketing Concept

Source: Philip Kotler & Gary Armstrong, Principles of Marketing, 1999
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Definitions of International Marketing & operations

International marketing

The multinational process of planning & executing the conception, pricing, promotion & distribution of ideas, goods & services, and to create exchanges that satisfy individual & organizational objectives. (Onkvisit & Shaw)

The performance of business activities designed to plan, price, promote & direct

the flow of a company s goods & services to customers or users in more than one nation for a profit (Cateora & Graham, 2002)
What is the main difference b/n domestic & international marketing? Marketing activities take place in more than one country This might seem apparently minor difference but accounts for the complexity &

diversity found in international marketing operations

Definitions of International Marketing & operations

Thus, the answer lies not with different concepts of marketing but with the

environment within which marketing plans must be implemented

The uniqueness of foreign marketing comes from: the range of unfamiliar problems encountered in foreign markets the variety of strategies necessary to cope with different levels of uncertainty Several uncontrollable elements (legal restraints, unpredictable consumers,

etc.
All these do affect the profitable outcome of sound marketing plans Therefore, the marketer must adapt to those uncontrollable factors in a manner

consistent with a successful outcome

Definitions of International Marketing & operations

What is interesting is the challenge of moulding the controllable elements of marketing decisions (product, price, promotion & distribution) within the framework of the uncontrollable elements of the marketplace (competition, politics, laws, consumer behaviour, level of technology, etc.) in such a way that marketing objectives are achieved (Cateora & Graham, 200 2 ) The challenge of international marketing is to develop strategic plans that are competitive in the intensifying global markets F or growing number of companies, being international is no longer a luxury but a necessity for economic survival

International Marketing
Of all the trends affecting global business the most dynamic are: The rapid growth of the WTO & regional free trade areas The trend toward the acceptance of the free market system among developing countries The burgeoning impact of the Internet & other global media on the dissolution of national boundaries These & other issues affecting the world economy, trade, markets & competition should be the focus Successful marketing is difficult & challenging & international marketing even more so
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International Marketing
Complexity theory: Argues that the world is complex and importantly that it is often not possible to understand complex systems by looking at their individual parts. The standard approach of breaking things up into individual pieces, solving those & then summing the solutions of the independent parts together simply doesn't work for complex systems. Are you skeptical or not?
Complexity theory: See for example Dolan et al, Understanding and managing chaos in organisations, International Journal of Management, Vol. 20, No. 1, March 2003
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Definitions of International Marketing & operations

Operations
Operations is concerned with the design & the operation of systems for

manufacture, transport, supply or service (Thomson, 2002)

Operations management (OM) is defined as the design, operation, and

improvement of the systems that create & deliver the firm s primary products & services
Specifically, the emphasis of OM is in the transformation process A transformation process is defined as a user of resources to transform inputs into

some desired outputs

Examples of transformations: Physical manufacturing
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Definitions of International Marketing & operations

Locational transportation Exchange retailing Storage warehousing Informational telecommunications, etc. OM must focus on core services that customers want Core services are basic things that customers want from products they purchase The importance of operations management Synergies must exist with other functional areas of the organization Operations account for 6 0 - 8 0% of the direct expenses that burden a firms profit

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Core Services Performance Objectives

Quality

Flexibility

Operations Management

Speed

Price (or cost Reduction)

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Operations Strategy
Strategy Process Example

Customer Needs

More Product

Corporate Strategy

Increase Organization Size

Operations Strategy

Increase Production Capacity

Decisions on Processes and Infrastructure

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Build New Factory

International Marketing & Operations: Two Key Issues

Customise or Adapt? Standardisation is the central managerial issue in international marketing if marketing itself is defined in terms of formulating & implementing policies regarding the four (or more) Ps of product, price, promotion & place [distribution] . Source: Boddewyn, JJ & Grosse, R , American Marketing in the European Union , European Journal of Marketing, 19 9 5, Vol. 2

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International Marketing & Operations: Two Key Issues

Operations as the key factor for success? Successful companies... tend to be those that have recognised that competitive advantage comes from their strategic position and, second, from their operating efficiency. Clearly a combination of the two is better still . Source: Christopher, M, Reaching the customer: Strategies for marketing and customer service , Journal of Marketing Management, Summer , 8 6 , Vol. 2 Issue 1

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International Marketing & Operations

A Question for you to Consider A UK * manufacturer of soft drinks (fruit juices, etc) is expanding into international markets You are advising the company about the market in your own country W hat are the most important factors in the market place and the business environment which the company should consider? * Or a US company if you live in the UK.

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