Welcome to MKTG 7506 International Marketing Management

Dr Ravi Pappu Office: Room 416 Colin Clark Building Phone: 3346 8089 Email: r.pappu@business.uq.edu.au Consultation: Monday 3-4 PM; Room 416 Colin Clark

Welcome
Welcome to MKTG 7506 International Marketing Management Agenda Course overview
Assessment Delivery (Seminars, Case study presentation)

Seminar 1: The Scope and Challenge of International Marketing

Course requirements (1)

Prerequisites: it is expected that students have done an introduction to marketing course, or have a good understanding of marketing principles. Text-book: Cateora and Graham (2007) International Marketing, 13th edn. (C&G)

Course requirements (2)

Required readings: Textbook chapters associated with lecture topics Selected journal articles All case study backgrounds Attendance: Students are strongly encouraged to attend the lectures on a regular basis.

Blackboard usage
Blackboard is where you will find Lecture notes Case study analysis criteria Important announcements Electronic submission of assignments via TURNIT-IN

Seminar program
S1: The Scope & Challenges of International Marketing (Ch 1) S2: Environmental analysis - I (Ch 2 & 10) S3: Environmental analysis - II (Ch 4 & 5) S4: Environmental analysis - III (Ch 6 & 7) S5: International Marketing Research (Ch 8) Easter break S6: International Market Entry (Ch 10) S7: Products and Brand Management (Ch 12 & 13) S8: Marketing Communications (Ch 16 & 17) S9: International Pricing (Ch 18) S10: Integrated Distribution (Ch 14 & 15) S11: Planning and Strategic Alliances (Ch 10) Course review
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Case Analysis
In class, students present ONE of the following case studies in groups of 4 to 5.
Case study 1: EuroDisney Case study 2: Fair & Lovely (cosmetics) Case study 3: Coke & Pepsi Case study 4: Starbucks Case study 5: Emerging markets Case study 7: easyCar.com Case study 8: McDonalds Case study 9: Nestle Check blackboard carefully for case study topics, questions, instructions and analysis guidelines.
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Assessment structure
International Marketing Commentary individual (20%) 3 PM Friday 7 May (hard copy at FRC +electronic submission TURN-IT-IN) International Market Analysis group (40%) Group of 4-5 students (Formation by Week 2) See blackboard for guidelines 3 PM Friday 28 May (hard copy at FRC +electronic submission TURN-IT-IN) Final examination individual (40%) Short answers, Lectures 1 -11 One case study.

The Scope and Challenge of International Marketing

C & G (2007) Chapter 1

Learning objectives
Understanding the differences between international marketing and domestic marketing. Understanding some of the main obstacles to adaptation (Ethnocentrism & Self-Reference Criterion). Discuss various stages of international marketing involvement. Understanding a firms strategic orientation towards international marketing. Discuss some important concepts underlying international marketing.
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Some International Marketing Blunders

Where the Bloody Hell Are You? XXXX in the US Fords Pinto in Brazil Nestl's baby food in Africa General Motors No-Va in Puerto Rico Laundry detergent in Middle-East

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1. How international marketing differs from domestic marketing?

Whats marketing? Customer needs and the role of the marketing mix value creation Marketing in more than one country Marketing skills and techniques will be same Difference will be the environment within which marketing plans are implemented. Psychic distance Unfamiliar problems variety of strategies needed

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International Marketing - Definition

International Marketing is the process of planning & undertaking transactions across national borders to create exchanges that satisfy the objectives of individuals and organizations . (Czinkota and Ronkainen, 2002 p. 4) International Marketing is the performance of business activities designed to plan, price, promote, and direct the flow of a companys goods and services to consumers or users in more than one nation for a profit. (Cateora and Graham, 1999, p.6)
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Layers of Different Environments in International Marketing

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Controllables and Uncontrollables

Controllables Marketing mix Uncontrollables (domestic environment) (a) Political/legal forces (b) Competitive structure (c) Economic climate Uncontrollables (foreign environment) (a) Political/legal (b) Cultural (c) Level of technology (d) Competitive forces (e) geography & infrastructure

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2. Obstacles to Adaptation
The key to successful international marketing is adaptation to the environmental differences from one market to another. Primary obstacles to success in international marketing:
SRC Associated ethnocentrism
SRC is an unconscious reference to ones own cultural values, experiences, and knowledge as a basis for decisions. Ethnocentrism is the notion that ones own culture or company knows best how to do things.
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The Self-Reference Criterion

Dangers of the SRC: Failing to recognize the need to take action Discounting the cultural differences that exist among countries Reacting to a situation in a way offensive to your hosts

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The Self-Reference Criterion and Ethnocentrism

Ethnocentrism and the SRC can influence an evaluation of the appropriateness of a domestically designed marketing mix for a foreign market.

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3. Stages of international marketing involvement

Evolutionary perspective of global marketing (a) Domestic marketing (b) Export marketing (c) International marketing (d) Multinational marketing (e) Global marketing

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Stages of International Marketing Involvement

No direct foreign marketing: a company at this stage does not actively cultivate customers outside national boundaries. Infrequent foreign marketing: temporary surplus caused by variations in product demand may result in infrequent marketing overseas. Regular foreign marketing: at this stage firms permanently produce goods which are sold on a continuing basis in foreign markets. International marketing: at this stage, firms are fully committed and involved in international marketing activities. Specifically, firms sell products that are a result of planned production for markets in various countries. Global marketing: at this stage, firms treat the world, including their home market, as one market.

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4. From International to Global; marketing (EPRG framework)

Ethnocentric Home country superior Polycentric Each host country is unique Regiocentric Similarities and differences in world regions Geocentric World view similarities and differences in home and host countries

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Strategic Orientation
Domestic market extension orientation: Firms with a domestic market extension orientation view their international operation as secondary to and an extension of their domestic production. Multidomestic market orientation: Firms that have a multidomestic market orientation market on a country-to-country basis, with separate marketing strategies for each country. Global market orientation: Firms that have global market orientation are referred to as global firms. Their marketing activities are global, and their market coverage is the world.
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Global Marketing
Motivating Factors Strong overseas market potential Saturation of domestic markets Strategic reasons

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Globalisation
The process by which firms operate on a global basis, organising their structure, capabilities, resources and people in such a way as to address the world as one market. Global Firm: A firm that, by operating in more than one country, gains R&D, production, marketing and financial advantages that are not available to purely domestic competitors.

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Global Firm: An Example

BHP Billiton 38000 employees in around 25 countries. Headquarters in Melbourne, corporate centres in South Africa and USA. Market capitalisation was US$122.5 billion (August 2006). industry leader/near industry leader positions in major commodity businesses (e.g., aluminium, coal, copper, ferro-alloys, iron ore and Titanium minerals).

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Key Drivers of Globalisation

Global consumers Technological advancements Role of government Worldwide dedication to trade Deregulation of financial markets Transnational Corporations (TNCs) Meloan (1998)
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Australian export growth

Where will Australias export growth come from over the next 10 years? ABS statistics BRW article Destination: Asia (2003) Vol 25 No 6 Asia 53% of total exports up from 17% a decade ago 57% in 2010 predicted Three of top four destinations are from Asia Eg: Japan, South Korea, China Middle East - fast growing USA fast growth expected Still only 4% Australian firms are exporting

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Trade In Goods And Services Australia's top 5 export markets 2007-08

Goods Services Total % share Rank

Japan China USA Korea UK

34,936 26,927 10,604 14,250 8,309

2,498 4,433 5,871 1,887 4,723

37,434 31,360 16,475 16,137 13,032

16.1 13.5 7.1 7.0 5.6

1 2 3 4 5

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From Lucky country to Clever country

Traditionally, agricultural, mineral and energy products exporter recent resource boom Traditionally imported sophisticated manufactures - In recent years - less sophisticated manufactures that can be produced more cheaply in other countries A growing percentage in services Eg: tourism, international education, computer software, and other advanced activities

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5. Concepts underlying International Marketing

Comparative Advantage is based on the notion that a country should focus on what it does best, rather than trying to produce everything...

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Concepts underlying International Marketing

Product Life Cycle Extension Products proceed through stages of life (a) Introduction (b) Growth (c) Maturity (d) Decline Relates to a phase in a particular market Extend life cycle by exporting to an immature overseas market.

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Concepts underlying International Marketing

Relationships and Networks An added determinant in entering a international market Reductions in perceived risk through network linkages by ensuring compatibility in aspirations Role of strategic alliances

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Country Notebook
Over the first six weeks develop a Country Notebook Draw on lecture material, chapters and other recommended readings Develop the criteria under which you assess the cultural, economic and market factors needed to review the targeted country for the major project Guidelines Cateora & Graham (2007)

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