Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
BIBLIOGRAPHY
Czinkota and Ronkainen (2002), International Marketing, Thomson South-Western. De Mooij (2003), Global Marketing and Advertising, Understanding Global Paradoxes, Sage. Keegan and Green (2005), Global Marketing, Prentice Hall. Kotler and Armstrong (2006), Principles of Marketing, Prentice Hall. Prime et Usunier (2004), Marketing international, Dveloppement des marchs et management interculturel, Vuibert. Usunier (2000), Marketing across Cultures, Prentice Hall. Periodicals: MOCI, HBR, JIBS, JM, JMR
Introduction
What is international business?
Wide range of activities involved in conducting business transactions across national boundaries Described as being heterogeneous, universal and sequential Comprehensive approach to operations of both large and small firms engaged in business abroad Concerns all activities of the firm (selling, procurement, outsourcing) About seizing global opportunities (market expansion or diversification) Driving forces (regional economic agreements, converging needs and wants, communication improvements, quality, leverage) and restraining forces (management myopia, corporate culture, national controls, globaphobia)
Introduction
EPRG Model Ethnocentric: everything is centered on the domestic market. Polycentric: several important foreign markets exist. Regiocentric: the market is composed of several large economic regions. Geocentric: the world is one large global market.
Vision Priority
Centralized Domestic
Decentralized Local
Agent, licensing
Joint-ventures
Introduction
What is marketing? Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others. (Kotler)
Marketing process
Create value for customers and build customer relationships Capture value from customers in return
Marketing technology
Global markets
Introduction
What is international marketing?
transactions across national borders to create exchanges that satisfy the objectives of individuals and organizations (Czinkota and Ronkainen) - International marketing focuses its resources on global market opportunities and threats (Keegan and Green) - International marketing is the motor of the internationalization process of the firm (Usunier) - It is a tool used to obtain improvement of the firms position in the global market - Strategy and action, global and local
Introduction
International Marketing Decisions
Deciding whether to go abroad Deciding which markets to enter Deciding how to enter the market Deciding on the marketing program Deciding on the marketing organization
Introduction
What are the similarities and differences between international marketing and domestic marketing?
Similarities: basic concepts, practices and tools are almost identical, key success factors are the same Differences: more strategic, more variables, more complex, cultural differences, legal constraints, information sources, managing distances, entry mode choice
Introduction
International marketing concept
Export marketing Global marketing
Course Outline
Culture and international marketing International marketing research International marketing strategy and programs
What is culture?
Culture is the integrated sum total of learned behavioral traits that are shared by members of a society (Hoebel) Culture is the entirety of societal knowledge, norms and values (Antonides and Van Raaij) Culture is the collective mental programming of the people in an environment. Culture is not a characteristic of individuals; it encompasses a number of people who were conditioned by the same education and life experience (Hofstede)
Culture both affects and describes human behavior, it is essential in international marketing
Fundamentals of culture
Culture is a total pattern of behavior that is consistent and compatible in its components. It is not a collection of random behaviors Culture is a learned behavior. It is not biologically transmitted. It depends on environment, not heredity. Culture is behavior that is shared by a group of people, a society. It is a distinctive way of life.
Manifestations of culture
Symbols Heroes Rituals Values and Norms
Expressions of culture
Symbols
Symbols are words, gestures, pictures, or objects that carry a particular meaning recognized only by those who share a culture. This is the most superficial manifestation of culture. New symbols are easily developed and old ones quickly disappear. Symbols from one cultural group are regularly copied by others.
Heroes
Heroes are people, alive or dead, real or imaginary, who possess characteristics that are highly prized in a society. They serve as role models for behavior. They can become globally known, but their stories often become local.
Rituals
Rituals are the collective activities considered socially essential within a culture. They are carried out for their own sake. They are easily observed, but not always understood.
Values
Values are at the core of culture. Values are stable beliefs regarding desired behavior or end states. They often have a religious, ideological or humanistic background. Goals are derived from values. Values are among the first things children learn, not consciously but implicitly. Core values are resistant to globalization; they vary across cultures and are not likely to change frequently.
Norms
Norms and values are part of the non-material culture. Norms are beliefs regarding how to behave and how not to behave (dos and donts). People differ in the extent to which they accept and comply with norms. They create expectations and criteria regarding the conduct of others.
According to Hoebel
There are 3 types of cultural norms in terms of behavior:
10% of norms are technical: explicit, logical and transferable; written norms of a society (laws, technical manuals, rules, etc) 30% of norms are formal: explicit, moral and transmissible; traditions of a culture; learned through education (manners, courtesy) 60% of norms are informal: implicit, instinctive and imitated; sunken part of the iceberg (facial expressions, body language, cultural perspective on time and space)
Transfer of culture
Two main cultural transfer processes: Socialization: transfer of culture to new generations; older generation to younger generation; education. Acculturation: transfer of culture to adults who have grown up in different cultures, who have been socialized in different cultures; ethnic minorities; multicultural societies.
Agents
LEARNING BY OBSERVATION
ACCULTURATION
Cohort effects
Acceptance of new values and behaviors begins at a young age. These values and behaviors are retained over the years. They are spread in society because young people grow older and the old values gradually disappear with the extinction of the older cohorts. Implies a slow cultural change.
Age effect
Certain values or behaviors are associated with a particular age group. Behaviors are modified as age groups change. Age-bound consumer behavior. Possible reverse socialization.
Democratization
Cultural leveling or spreading Cultural differences across social classes decrease. Results from an increasing level of general welfare, the influence of mass media and the stress on the equality ideal. Mechanisms of democratization: trickle-down, trickle-up, trickle-across.
Exclusivation
Reverse of democratization Occurs less frequently Implies limited social spreading of values, goods and behavior. Cultural change is limited to a certain group (elite, leading edge).
Dimensions of culture
What makes one culture different from another culture? How can we compare cultures or cluster cultures according to behavioral characteristics?
Stereotypes vs. cultural dimensions Different cultures have different stereotypes of other cultures.
Ethnocentrism and SRC
High-context
Less information is contained in the verbal part of the message Much more information resides in the context of communication (background, associations, symbols, basic values of the communicators) Verbal mode is only one part of communication, nonverbal is often seen as having greater importance
Degree of context of cultures: comparison of law (US and France)
Time
Different cultures have different concepts of time. This can explain differences in behavior. Dimensions of time:
Closure: a task must be completed, if not perceived as wasted Long-term vs. short-term thinking Orientation toward past, present or future Linear or circular (tangible or intangible) M-time and P-time Cause and effect Time as symbol (time is money, efficiency, waiting, discretionary time)
A few examples
Factors
Lawyers A persons word Responsibility for error Space Time Negotiations Competitive bidding Examples
High-context
Less important To be trusted
Low-context
Very important Get it in writing
Taken by the highest level Pushed to the lowest level People breathe on each other Polychronic, circular Are lengthy Infrequent People maintain a bubble of private space Monochronic, linear Proceed quickly Common
Further developed with: nature of people, duty, mode of activity, privacy of space, temporal orientation
Five different poles make up the cultural index: - Power distance - Uncertainty avoidance - Individualism - Masculinity - (Long term orientation)
5D Model
PDI 100 LTO 100 100 Work-related values to consumptionrelated values 100 IDV UAI
100 MAS
Individualism (IDV)
Individualistic vs. Collectivistic people looking after themselves and their immediate family only, versus people belonging to in-groups that look after them in exchange for loyalty I-conscious and we-conscious Focuses on the degree the society reinforces individual or collective achievement and interpersonal relationships Distinguishes between societies where the group and being a member is important (collectiveness) and societies where the group is less important (individualism)
Masculinity (MAS)
Masculine vs. Feminine the dominant values in a masculine society are achievement and success; the dominant values in a feminine society are caring for others and quality of life Focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, performance, control and power Shows the importance of status in societies Indicates the degree of gender differentiation and the importance of masculine values (assertiveness, money, material goods, success)
France
Germany Great Britain India Italy Japan Netherlands Spain USA
68
35 35 77 50 54 38 57 40
86
65 35 40 75 92 53 86 46
71
67 89 48 76 46 80 51 91
43
66 66 56 70 95 14 42 62 29 80 44 31 25 61
World average
57
65
43
49
50
American culture
Classical dimensions: M-time culture, linear timepattern, low-context, low PDI, individualistic, high MAS, low UAI, short-term orientation Other dimensions: success, obsession with change (new and better), credit card culture, education for competitiveness, independence, ethnocentrism, strong role differentiation, innovativeness, creativity, private opinions expressed, education teaches students to be critical (ask why not how), man must conquer nature, (De Mooij)
Japanese culture
Classical dimensions: P-time culture, circular time concept, high-context, high PDI, collectivistic, masculine, strong UAI, long-term orientation Other dimensions: pressure to behave like neighbors, shame-based society, avoid jolting social harmony, dependence, private opinions not expressed, status is important (success) but avoid standing out in a crowd, cash culture, thrift and perseverance, strong role differentiation, education (how instead of why), education has an intrinsic value, obsession with cleanliness, harmony with nature (De Mooij)
Intracultural differences
Few cultures are homogeneous in terms of cultural traits and norms Consequence of globalization? Intracultural differences (nationality, religion, race, language or geographic areas) result in the emergence of distinct subcultures Existence of cross-cultural and intracultural differences: opportunities and threats
To summarize on culture
Culture is complex and multi-dimensional, but classification is important in business Cultural distance is essential in international marketing
Culture influences perceptions and drives how we communicate and what we communicate SRC and ethnocentrism can explain the failure of many companies in the international arena Acculturation (adjusting and adapting to a specific culture other than ones own) is one of the keys to success in international operations
Marketing process
Create value for customers and build customer relationships Capture value from customers in return
Marketing technology
Global markets
CONTROL
Research design
The research design formally describes the characteristics of the survey and the procedures used to conduct the study. It is the methodological framework of the research. Contents: Goals Information sources Variables Survey method Sampling method Data analysis Calendar Budget
DESCRIPTIVE
-Documentary -Quantitative
CAUSAL
-Experimentation -Observation
Research methods
Observational research - Audit: inventories, facing, pantry check - Mechanical: scanning, EDI, eye camera Experimental research - Product/concept tests: prototype, comparative or not - Market/store tests: laboratory stores, catalog sales, mobile stores, in-store tests, city tests Ad hoc research - Qualitative research: interviews, focus groups - Quantitative research: surveys, opinion polls
Information Sources
Secondary sources: Existing data. All forms of documentary research. DESK RESEARCH Primary sources: Data collected for a specific situation at companys request. FIELD RESEARCH, AD HOC These sources can be internal or external. The choice will depend on the marketing problem, objectives, resources
Documentary Research
First step to marketing research 4 steps
Define the topic (clear, feasible, pertinent) Identify key words associated to the topic Search for available sources of information Consult, sort and summarize information
Questions to ask
Does the data correspond to the situation? Is there a risk of obtaining biased information? Was the research design technically coherent? Are the findings clear, precise?
Primary
Adapted information Recent, up-to-date Not available to competitors
Disadvantages
Qualitative
Quantitative
OPINIONS
Structured interview
ATTITUDES
MOTIVATIONS / BELIEFS
Unstructured interviews
Conducted in a face-to-face situation Large, ambiguous opening Funnel approach The respondent is free to express his feelings as wishes and for as long as he wishes Non-directive, but reformulation techniques Use in marketing
Present research objectives Reformulation techniques ( mirror effect ) Respondent goes further in-depth
auto-exploration
Projective techniques
Used to avoid psychological obstacles (taboos, reluctance, courtesy bias, subconscious) or to go further in-depth Visual or written stimuli The respondent will overcome hesitations Difficult to analyze, ambiguous Different tests
Word association Sentence completion Story completion Frustration or cartoon test TAT (Thematic Apperception Test) Haire test
Structured interviews
Most directive method in qualitative marketing research A questionnaire is used However, the questionnaire is only composed of open-end questions Questionnaire facilitates the research process as well as analysis Confusion between qualitative and quantitative research It is theoretically incorrect to extrapolate or generalize the findings
Focus groups
Nearly always use the centered approach (interview guide, group discussion is directed by interviewer) About 7 to 10 participants per group The role of the interviewer is very important Interviewer must manage the group in terms of participation, conflict, domination, summaries, etc Organization and logistical aspects
Qualitative sampling
No representative sample, but variety of individuals is important No important profiles should be excluded Sequential procedure (arborescence) is used:
List of criteria explaining differences of behavior Rank criteria from most important to least important List possibilities for each criteria Build arborescence Verify coherency of arborescence
Disadvantages
-Does not explain why or how -Precision tool, not a discovery tool -Self-report data -Broad but shallow data -Long and costly -Difficult in B to B -Participation is unrewarding (direct marketing)
Survey
Most familiar of all market research methodologies Collect information from a portion of the population Procedure in which a fixed set of questions is asked of a sample of respondents On the basis of information collected on the subset, it is possible to infer something about the larger group Inference depends on the sampling method
What is sampling?
70%
70% + e
Sampling is necessary every time the population size is too large to be able to collect information from all elements of the population.
Non-probability
No way of estimating that probability that any population element will be included in the sample Rely on personal judgment somewhere in the process Statistically, precision (sampling error) cannot be evaluated
Simple random sample Cluster sample Area sample Level random sample Stratified random sample
Quota sample Random route sample Judgment sample (onthe-spot sample) Convenience sample
Probability sampling
SRS: each population element has a know and equal chance of being selected; central-limit theorem (when n is large, the sample mean will be normally distributed). Cluster and area: first parent population is divided into mutually exclusive and exhaustive subsets, then a random sample of the subset is selected. LRS: random sampling occurs at several different levels of the population. Stratified: population is divided into strata or subpopulations and random sampling occurs in each stratum (proportionate and disproportionate).
Non-probability sampling
Quotas: attempt to ensure that the sample is representative by selecting sample elements in such a way that the proportion of the sample elements possessing a certain characteristic is approximately the same as the proportion of the elements with the characteristic in the population. Random route: each field worker is given a random route to follow, leading to the selection of people to interview. Judgment: sample elements are handpicked because it is expected that they can serve the research purpose and it is believed that they are representative of the population of interest (purposive samples). Convenience: sometimes called accidental samples because those composing the sample enter by accident (volunteers, radio shows)
Is it too costly?
No
SRS
Stratified sample
Do we know the structure of the population for several variables that explain differences in behavior?
Yes No
Quota sample
Random route
pq e
2
Non-exhaustive sample
Exhaustive sample
Form of response
Open-ended Dichotomous: 2 possible answers Multiple choice: 3 or more possible answers Likert scale: a statement with which the respondent shows the amount of agreement or disagreement (strongly agree strongly disagree) Semantic differential scale: a scale connecting two bipolar words, respondent selects the point that represents his/her opinion (enthusiastic unenthusiastic) Importance scale: rates the importance of some attribute (extremely important extremely unimportant) Rating scale: rates some attribute from poor to excellent Intention-to-buy scale: describes respondents intention to buy a product or service (definitely buy definitely not buy)
Avoid halo effect (change direction in scales to avoid repetition)
Question wording
The phrasing of a question can directly affect the responses. General rules:
Use simple words Avoid technical vocabulary in consumer research Avoid double negations Avoid ambiguous words and questions Avoid leading questions Avoid double-barreled questions
Examples
Question sequence
General rules: Questionnaire should be very logical and easy to respond to. Use simple, interesting opening question. Use the funnel approach (start with broad questions and progressively narrow down in scope). Avoid jumping around from topic to topic. Use transitions. Design branching questions with care. Place difficult or sensitive questions late in the questionnaire. Ask for classification information last.
Question sequence
Knowledge and awareness questions Factual behavior questions Attitude questions Intention questions Classification questions
Questionnaire pretest
Data collection should never begin without an adequate pretest of the instrument. Can be used to assess both individual questions and their sequence. Small sample of 10 to 30 Questionnaire followed by interview to identify problems and misunderstandings Pretest results are not included in the final results of the survey The pretest is the most inexpensive insurance the marketer can buy to ensure the success of the questionnaire and the entire research project
Risk in terms of analysis. Language problems. Depends on the informal network. Excellent.
Variable.
International equivalences
Functional equivalence: do products serve the same function? Conceptual equivalence: do relevant concepts have the same meaning and/or importance? Category equivalence: does the product belong to the same category or domain? Translation equivalence: cross-check, translation-retranslation Metric equivalence: scaling, odd/even, do adjectives have the same strength and distances? Respondent equivalence: who should answer questions? same social role? sampling unit Sampling frame equivalence: how will sample be chosen?
Sources of bias
Bias = distorted results, incorrect or false compared to reality Biased responses are more likely to occur in international marketing research than in domestic research and are harder to avoid Importance of control, pre-test, acculturation Research plans must be adapted to reduce the risk of biased responses
5 sources of bias
Courtesy bias: concerns the social desirability of answers, the respondent hopes to please the interviewer Subject bias: concerns the way a society perceives an issue as being more or less sensitive Cultural-trait bias: a given cultural trait can alter the findings (IDV, MAS) Response style bias: some responses are more or less extreme in some cultures (scaling, ranking), coefficients Non-response bias: non-response style varies according to country, gender, race
Research consumers and market Manage marketing information and customer data
Select customers to serve: segmentation and targeting Decide on a value proposition: differentiation and positioning
CRM and CEM: build strong relationships with chosen customers Partner relationship management: build strong relationships with marketing partners
Create satisfied loyal customers Capture customer lifetime value Increase share of market and share of customer
SBU
SBU
Target segment
Consumer preferences
Firm advantages
Market segmentation
What is it?
Identifying and profiling distinct groups of buyers who might require separate products and/or marketing mixes Clustering consumers in terms of behavior, needs, attitudes, opinions
Why?
Buyers/consumers differ in many ways They do not respond to the same stimuli in the same way So, different offers for different types of buyers
Segment marketing
Large identifiable group within a market Buyers differ in their wants, purchasing power, location, attitudes and habitsbut the company is not willing to customize its offer to each individual customer More appropriate products and services, distribution and communication easier, fewer competitors
Niche marketing
More narrowly defined group, a small market whose needs are not being well served Smaller companies can become more competitive through specialization Better understanding of customers who willingly pay a price premium
Individual marketing
Segments of one, customized marketing, one-to-one marketing More frequent in B to B than in B to C New technologies allow mass customization ; ability to prepare on a mass basis individually designed products and communications to meet each customers requirements
Segmentation variables
Consumer characteristics
Geographic -Nations -States -Regions -Cities Demographic -Age and life-cycle stage - VALS or psychographics -Gender -Income -Generation -Social class
Marketing characteristics
-Consumer responses to benefits sought, use occasions or brands (consumer-response segments) -Hierarchy of attributes in choosing a brand, shifts in consumer priorities (market partitioning) -Marketing mix variables: product, price, placement, promotion (price-quality-type dominant)
In international marketing, broader market segments compared to domestic segments, transnational segments
PDI
UAI
IDV
MAS
Marketing implications
Small
Medium
MediumHigh
High
Preference for high performance products, use successful-achiever them in advertising, desire for novelty, variety and pleasure, fairly risk-averse market. Appeal to consumers status and power position, reduce perceived risk in product purchase and use, emphasize product functionality.
182
Medium
Strong
Varied
LowMedium
37
Small
Low
High
Low
Relatively weak resistance to new products, strong consumer desire for novelty and variety, high consumer regard for environmentally friendly marketers and socially conscious firms.
Westernization :
Countries proximity to the West The duration and the extent of their openness to Western influence and culture
CEE clusters
High Marketization
Cluster 1
Low Westernization
Cluster 3
High Westernization
Cluster 4
Cluster 2
Clusters are likely to have common characteristics and share similar consumer needs and purchasing behavior
Cluster 4: Low-marketization and low-westernization (Albania and Western countries of the former Soviet Union)
Geographic: Less urbanized than cluster 3 Cultural: Slavic languages (Russian is the primary commercial language), Eastern Orthodox and Muslim Economic: formerly fierce dictatorships, slower development
Market targeting
After identifying different markets and market segments, the firm must: Evaluate the various segments Decide how many and which ones to target
Selective specialization
Several segments that are objectively attractive Little or no synergy among segments but each is profitable Diversification of firms risk
Market specialization
Concentrate on serving many needs of a particular customer group Strong reputation with group, channel for all new products Risk of decreased buying power in the group
Market positioning
Market positioning: act of designing the companys offering and image so that they occupy a meaningful and distinctive competitive position in the target customers mind; refers to the consumers perception of a product or brand amongst other brands Objective: attaining a prominent place for companys brand amongst other brands in the minds of consumers Positioning mainly results from marketing communication regarding brands, social communication and personal experience Categorization and positioning within category Product differentiation, international coherency
Market segmentation
Product differentiation
Demand side Heterogeneous markets are divided into homogeneous submarkets (market segmentation)
Supply side Homogeneous products can be differentiated into products tuned to these homogeneous market segments (market positioning)
Differentiation attributes
Product Features Performance Conformance Price Quality Durability Reliability Repairability Style Design Services Ordering ease Delivery Installation Customer training Customer consulting Maintenance Warranty Personnel Channel Image Value proposition Emotional power Symbols Media Atmosphere Events Coverage Competence Expertise Courtesy Performance Credibility Reliability Responsiveness Communication
Marketing mix allows firm to communicate and implement its strategy, formalized in marketing plan
Marketing mix
Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. 4 Ps (McCarthy):
Product Price Promotion
4 Cs (Lauterborn)
-Customer needs and wants -Cost to the customer -Communication
Place
-Convenience
Price Promotion
Place
High
Consumer
Consumption patterns
Pattern of purchase
Is the product purchased by relatively the same consumer income group from one country to the other? Do the same family members motivate the purchase or dictate brand choice in all target countries? Do most consumers expect a product to have the same appearance? Is the purchase rate the same regardless of the country? Are most purchases made at the same kind of retail outlet? Do most consumers spend the same amount of time making the purchase?
Pattern of usage
Do most consumers use the product for the same purpose? Is the product used in different amounts from one area to another? Is the method of preparation the same in all target markets? Is the product used along with other products?
Psychosocial characteristics
Attitudes toward the product
Are the basic psychological, social, and economic factors motivating the purchase and use of the product the same for all target markets? Are the advantages/disadvantages of the product in the minds of consumers basically the same from one country to another? Does the symbolic content of the product differ from one country to another? Is the psychic cost of purchasing and using the product the same?
Cultural criteria
Does society restrict the purchase and/or use of the product to a particular group? Is there a stigma attached to a product? Does the usage of the product interfere with tradition in one or more of the targeted markets? Does the message of the product correspond to core cultural values? How do the different dimensions of culture influence the purchase and use of the product?
Product
A product is anything that can be offered to a market to satisfy a want or need (Kotler)
Physical goods Services Persons Places Organizations Ideas
Common product problems: Developing new products Managing life-cycle strategies Managing product lines Managing brands
Branding
Identifies the company at six different levels: attributes, benefits, values, culture, personality and user Brand awareness, brand acceptability, brand preference, brand loyalty Global branding and international coherency Degree of adaptation in FMCG
Elements of a product
Installation
Augmented product
Tangible product
Packaging Brand name Delivery and credit Quality Features Core benefit or service Styling Aftersale service
Core product
Warranty
Pricing
Select pricing objective Determine demand Estimate costs
Promotion
Identify target audience: research, image analysis Determine communication objectives: awareness, knowledge, liking, preference, conviction, purchase Design message: content, appeals, structure, format, source Select communication channels: personal, non-personal Promotion budget: weight of promotion in marketing mix Promotion mix: allocation between advertising, sales promotion, public relations, sales force and direct marketing Measure results: research
Public Relations
Press kits Speeches Annual reports Sponsorships Publications Community relations Lobbying Company magazine Special events
Sales force
Direct marketing
Catalogs Websites Mailings Telemarketing On-line sales TV shopping
Print and broadcast ads Packaging Motion pictures Brochures Directories Billboards P-P displays Symbols and logos
Sales presentations Sales meetings Incentive programs Samples Fairs and trade shows
Individualism/Collectivism
IDV: low context, direct, explicit (you, we, I), data, facts COL: high context, indirect, symbols, entertainment, groups
Masculinity/Femininity
MAS: winning, success, domination, persuasion, comparative advertising, reverse sexism FEM: less endorsement, caring, less role differentiation
Uncertainty avoidance
High: explanations, testing, technology, design, structure, well-groomed Low: results are important, change, subtle
LTO/STO
STO: sense of urgency, direct style LTO: build trust, nature, entertainment
Persuasion model
Short term shift in attitude, buying intention, and brand preference through providing arguments Lecture form (presenters, demonstrations, testimonials), persuasive and direct US, UK, Germany, Switzerland, Austria
Involvement model
Build relationships between consumers and brands by creating emotional closeness Brand becomes a personality, indirect style FEM, IDV (Netherlands, Scandinavia, France)
Emotions model
Create positive attitude and brand loyalty Builds connections between brands and emotions, emotion often linked with product category Low IDV, low MAS (Spain, Latin America, Africa)
Likability model
Liking the advertisement will lead to liking the brand Indirect, entertaining/story, make friends to build trust and dependence Japan, China
Symbolism model
Turn the brand into a symbol/code, cohesion to subculture Very culture specific (symbols of status, success, self-expression, stability) High PDI, High UAI, Low-Mid IDV (Asia, France, south of Europe)
International channels
Seller
Channels between countries Channels within foreign countries Final buyers
1. Channels between countries: gets the products to the borders of the foreign market; decisions concerning types of intermediaries (agents, trading companies, etc), types of transport, financing and risk management 2. Channels within foreign countries: gets the products from entry point to final buyers and users; decisions concerning types of retailers (franchising, supermarkets, etc), local channels Channels of distribution vary considerably among countries. Distribution, by its nature, is a marketing activity that is performed close to the market.
Channel management
Channel design: types of intermediaries, number of intermediaries (exclusive, selective, intensive), contractual arrangements Managing retailing, wholesaling and market logistics Selecting, motivating and evaluating channel members (cooperation, conflict, competition) Channel dynamics: traditional, VMS, HMS, multi-channel marketing systems Most difficult part of the mix to standardize
External factors
Internal factors
Target market
Exporting
Contractual modes
FDI
Types of exporting
Indirect exporting
Distributor / export merchants Export agent EMC
Direct exporting
Export department Export sales representatives E-business
Cooperative exporting
Export groups Piggyback exporting
Disadvantages
High initial and operating costs High level of risk
FDI options
Make-or-buy decision
Greenfield investment / Ex nihilo Mergers and acquisition
Branch or subsidiary?
Structure Legal status
Indirect modes
Joint venture (16%) Master franchising (34%)
Master franchising
FDI
Direct franchising
Organizational factors
Non-equity
Environmental factors
Organizational factors
FDI
Joint venture
Master franchising
Level 2 Financial situation of partners (direct/indirect) Brand protection Local regulations Cultural differences Tax System Geographic distance Franchisors national culture
Contribution of know-how
AD / Concessionaire EMC Piggy back ITC / distributor Agent Minority shareholding through partial acquisition Majority JV investment (local partner know-how)
Low
Low
Level of ownership
High
B to C vs. B to B channels
Business-to-consumer channels
Designed to put products in the hands of people for their own use Alternatives: direct marketing, franchising, sales force, agents/brokers, internal sales force, wholesalers, retailers
Business-to-business channels
Deliver products to manufacturers that use them as inputs in the production process or in day-to-day operations Alternatives: internal sales force, distributors, wholesalers
M
Agents, brokers
M
MSF
M
MSF
Consumers
Multi-channel strategies
Case of franchising-Internet
Market-specific channels
Case of wine distribution
Global retailing
Global retailing since 1970s, but many variations Differences in the importance and types of retailing channels: shopping malls, department stores, discount stores, wholesale clubs, category killers, outlet centers, hypermarkets Factors affecting the success of hypermarkets: culture, income, market fragmentation, traditional stores, locations, demography Global retailing market entry
Wal-mart case
Organic growth
Easy to enter
Chain acquisition
Difficult to enter
Franchising
Joint-venture
Culturally distant
Coexistence of traditional and virtual marketing channels brick and click Antagonostic or complementary?
Some results
Major -Better communication with franchisees consequences -Reduces distance -Cost-effectiveness, not dissuasive -Promotional tool for services -Recruiting and training franchisees Activities -2005: 80% website, 23% on-line sales -2010: 98% website, 54% on-line sales
Interpretations
Optimistic, franchise-Internet are complementary Opportunities > Risks B to B advantages > B to C advantages Better franchisor-franchisee relationship Service franchising > Distribution franchising Communication strategy > Sales strategy Internal sale of website before external sale Brick to click vs. Click to brick Internet explains evolution of entry modes
Three-tier system
Open States
Winery, Supplier
Distributor / Wholesaler
Tier II
Control States
Tier III
Consumers
Consumers
Independent / specialist
Tends to cater to wine consumers with higher level of knowledge, high level of service, small producers Overall aim is to promote healthy drinking, high level of wine knowledge, access to a wide range of suppliers
Each outlet must be serviced and supplied individually, small volumes Importance of being stocked, if not, excluded from market
Analytical approach to reduce the influence of ones own cultural values (A.C. Samli)