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Summary - International Marketing (328253-M-6)
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Summary of the course International Marketing (328253-M-6) including lecture slides and notes.
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International Marketing SMVHC 1
Overview key concepts in international marketing
Agenda
• Marketing basic blocks
• Adaptation vs. universalism: discussion background
• Are there cultural universals?
Marketing: Basic Blocks
Marketing: performance of business activities designed to plan, price, promote and
direct the flow of a company’s goods and services to consumers or users for a profit.
First, you have to define your target market.
Marketing strategy: 5 C’s of the target market
Example: Dodo Pizza is a Russian pizza delivery franchise, with a HQ in Syktyvkar
and Moscow. Over 700 pizza stores in Russia and 15 other countries. 90% of orders
for delivery coming through the app or own website.
• Customers: needs and profile = who are your
customers and what do they want, in terms of time/
money/ taste/ quality/ sustainability etc.?
- Need: UK customers want a quality pizza while Russians
‘need’ good-value-for-money.
- Profile: UK customers are value-conscious while Russians are
price sensitive.
• Collaborators: what other parties do you work with?
(e.g., suppliers/ farmers, deliver companies, payment
system)
• Competitors: who are they?
- Domino’s pizza, New York pizza.
• Company: what are the things that the company needs to operate their
business and do well? Their capabilities and information system.
- E.g., employees, change in products.
- R&D and experiments: monitor repurchase rates/ sales volume etc if you
give free garlic bread to one group versus the other.
• Context
Context Analysis
• Sociocultural: what are people’s preferences and habits?
▪ Social and demographic trends
, ▪ Value systems, religion, language
▪ Lifestyles, attitudes, beliefs.
▪ Dodo Pizza: what societal trends are contributing to growth of food delivery services
and pizza delivery in particular? Women joining workforce resulting in lower share of
meals being home cooked, attitudes towards delivery/ take-away and higher
openness to trying food from other countries.
• Technological: new techniques, skills, methods, processes for creating and
delivering market offerings.
▪ Dodo Pizza: what technological factors are critical in modern food delivery markets?
This generation have more phones and use it more, internet infrastructure.
• Regulatory
▪ Taxes, import tariffs, embargoes.
▪ Product specification
▪ Pricing and communication regulations
▪ IP laws
▪ Dodo Pizza: what regulatory factors are critical in modern food delivery markets?
Safety and wages of employees, food safety rules, privacy of employees and
customers (data sharing).
• Economic
▪ Economic growth
▪ Money supply
▪ Inflation
▪ Interest rates
▪ Dodo: how expensive to start, building costs, incomes, borrow system.
• Physical
▪ Natural resources
▪ Climate
▪ Geographic location
▪ Topography
▪ Health trends
▪ Dodo: not too much traffic, bevolkingsdichtheid, weather/ climate hot versus cold.
Marketing strategy: value
When you have a clear image of the 5 C’s you then try to understand what the
optimal value proposition is, that is the value that the company aims
to create in the target market, defined by:
• Customer value: why should consumers spend their money
on our product and not out other product or that of
competitors?
• Collaborator value: why should franchises choose us, and not
our competition or open independent store?
• Company value: why should we spend money and man-hours
on this product and not on another product in the company’s
portfolio?
For there to be an optimal value proposition, value must be created for the company,
for the collaborators and for the customers. When you understand whether there is
an optional value proposition or not, you can have a ‘go’ or ‘no go’ decision for the
product or service.
International Marketing = Marketing?
,When the same activities are performed in more than one nation, you are presented
with unfamiliar problems & varying levels of uncertainty.
• But are markets and consumers that different?
Adaptation vs. Universalism: background
Global versus multinational
Levitt claimed that there are two types of corporations: global and multinational.
Global corporation
• Operates in multiple countries.
• With constancy – at low relative cost – as if the entire world (or major regions
of it) were a single entity.
• Sells the same things in the same way everywhere.
• Standardization
▪ Lower prices
▪ Greater learning opportunities → knowing everything about one thing.
Multinational corporation
• Operates in multiple countries.
• Adjusts its products and practices in each – at high relative costs.
• Adaptation to local tastes.
▪ Higher prices → due to more market research, ordering from multiple suppliers
= less bargaining power, running multiple campaigns, less scope economies.
▪ Less learning → knowing something about many things.
Cultural universals: value and segment convergence
Some values and preferences are universal:
• Preference for lower prices, advertising elasticity
• Preference for modernity and reliability
• Cosmopolitanism as a defining characteristic of all sectors.
There is a large argument in favor of the global corporation because it produces
cheaper products, with better price and people aren’t that different.
Levitt: The Globalization of Markets (1983)
• “Only global companies will achieve long-term success by concentrating on
what everyone wants rather than worrying about the details of what
everyone thinks they might like.”
• Henry fort said something similar: “… in 1909 I announced, without any
previous warning, that in the future we were going to build only one model,
that the model was going to “Model T” and that the chassis would be exactly
the same for all cars, and I remarked: “any customer can have a car painted
any color that he wants as long as it is black”.
Interbrand: Global Brand Measures
• % of revenue coming from outside of the brand’s home region.
• Significant presence in Asia, Europe, and North America as well as broad
geographic coverage in emerging markets.
• Public profile and awareness across the major economies of the world.
, Global ≠ Standardized
• Toyota: vehicle names, technical details, and colors of the model vary from
country to country. Not all models are available in your country.
• McDonalds: customized sandwiches across countries.
• LV: product and price customization in Japan.
• JP Morgan: Islamic banking.
So, yes, markets and consumers are that different!
Cultural Universals: Etic versus Emic
Etic: constructs that can be applied equally well across different cultures as everyone
understand it.
• Survey-based studies with cross-sectional comparisons.
• Not equally important, yet equally applicable across cultures.
• E.g., Hofstede’s cultural dimensions, World Values Survey
• E.g., humor, beauty
Emic: constructs that apply to a given culture.
• Not applicable across cultures.
• Something that people from a certain culture will understand, but people from
other cultures won’t.
• Determined through perceptions of culture member.
• E.g., Guanxi in China or Hygge in Denmark.
• E.g., non-discrimination, as that was not very famous many years ago,
Fairness Norms
• Aap krijgt stenen of komkommer terwijl de andere aap framboos krijgt, niet fair.
• Medicijn/ pil gaat ineens van €13 naar €750.
• Uber is duurder op oudjaarsavond.
Universal versus Country-specific behaviors
• Consumer behaviors/ attitudes that are similar across cultures?
• E.g., how do we assess quality?
▪ Brand
▪ Physical features
▪ Price
▪ Retailer reputation
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