Planning and Organizing for

International markets
 “standardization versus adaptation”
“globalization versus localization”
“global integration versus local responsiveness”

 From the marketing perspective customization is always best.

 But Global markets homogenize and diversify simultaneously.

 Avoid focusing on country as the primary segmentation variable.
 Alternative segmentation variables:
Climate, language group, media habit, income…

2.
 The Nestle Way

 Nestle strategy:
 Think and plan long term
 Decentralize
 Stick to what you know
 Adapt to local tastes

 Long-term strategy works:

 Local ingredients
 Products that consumers can afford.

3.
 Barbie – Different Countries

4.
 The Planning Process

Information derived from each phase, market research,

and evaluation of programme performance

Phase 1
Preliminary Analysis
and Screening
Matching Company and
Country Needs Phase 2
Adapting
the Marketing Mix
to Target Markets Phase 3
Developing the
Marketing Plan
Phase 4
Implementation and
Control

5.
 Alternative Market-Entry Strategies

Internet
Exporter
Exporting
Importer
Distributor
Direct sales

Licensing
Contractual agreements
Franchising

Joint venture
Strategic alliances Consortia

• RISK
Ownership
Direct investment • CONTROL
Channels

6.
 Contractual Agreement

 Long-term, nonequity association

between a company and another in a foreign market.

 Licensing
 To establish a foothold in foreign markets without large capital outlays.
 A favorite strategy for small and medium-sized companies.
 Means of capitalizing on intellectual property in a foreign market.

 Franchising
Expected to be the fastest-growing market-entry strategy.
 Franchiser provides a standard package of products, systems, and
management services,
 Franchisee provides market knowledge, capital, and personal involvement in
management.

Master franchise:
Gives the franchisee the rights to a specific area with the authority to
sell or establish subfranchises
7.
 Strategic International Alliances
 A business relationship established by two or more companies to
cooperate out of mutual need and to share risk in achieving a common
objective American Airlines
British Airways
Cathay Pacific
 A way to increase competitive strengths: Finnair
Iberia
 Opportunities for rapid expansion into new markets LAN Airlines
Qantas
 Access to new technology Japan Airlines
 More efficient production and innovation Royal Jordanian
Malév
 Reduced marketing costs Dragonair
 Strategic competitive moves
 Access to additional sources of products and capital

8.
 Strategic International Alliances

 International Joint Ventures

 A partnership of two or more companies that have joined forces
to create a separate legal entity.
 Four Characteristics:
o Partnerships between legally incorporated entities such as
companies, chartered organizations, or governments, and not
between individuals
o Established, separate, legal entities
o Acknowledged intent by the partners to share in the management
o Equity positions are held by each of the partners

9.
 Strategic International Alliances

 Consortia
 Similar to joint ventures and could be classified as such
except for two unique characteristics:
o They typically involve a large number of participants
o They frequently operate in a country or market in which none of the
participants is currently active.

 Consortia are developed to pool financial and managerial

resources and to lessen risks.

Aerospatiale (F), Dasa Aerospace (G), BAE (UK), Constructiones (Sp)

10.
 Global Perspective

 Tokyo Disneyland: successful

 EuroDisney: disaster

 Goal of any marketing firm should be:

Quality products and services

that meet the needs and wants of consumers
at an affordable price.

11.
 Quality

 Increased customer knowledge (the customer defines quality)

 The cost and quality of a product are among the most
important criteria by which purchases are made
 Quality can be defined on two dimensions:
 Performance quality
 Market-perceived quality

PERCEIVED COSTS
PERCEIVED BENEFITS

PERCEIVED VALUE
12.
 Maintaining Quality

 From a customer perspective, performance quality is a given

 Decision to standardize or adapt a product is crucial

 Adaptation: mandatory requirements

 Product homologation
 Other requirements: Legal, Economic, Political,
Technological, Climate ….

13.
 Products and Culture

 A product is the sum of the physical and psychological

satisfactions it provides the user.
 Primary function
 Psychological attributes

 The need for cultural adaptation

is often necessary, affected by
how the product conforms with:
 Norms
 Values
 Behavior patterns

14.
15.
 Innovative Products and Adaptation

 Determining the degree of newness as

perceived by the intended market

 Established patterns of consumption and

behavior

Foreign marketing goal:

gaining the largest number of consumers in the
market
in the shortest span of time
 Probable rate of acceptance

16.
 Diffusion of Innovations

 Definition:
 An innovation which is communicated through certain
channels over time, among the members of a social system

 Variables affecting the rate of diffusion of an object:

 The degree of perceived newness
 The perceived attributes of the innovation
 The method used to communicate the idea

17.
 Acceptance of an Innovation

1. Relative advantage

2. Compatibility

3. Complexity

4. Trialability

5. Observability

18.
 Analyzing Product Components
for Adaptation
SUPPORT SERVICES
COMPONENT
• Repair &
maintenance
“PACKAGING” • Deliveries
COMPONENT
• Installation • Price
• Trade mark CORE • Warranty
COMPONENT
• Product Platform • Quality
• Instructions • Functional • Spare parts
features
• Brand name • Design features • Package

• Styling

• All other services

19.
 Product - Promotion Strategies

Straight Extension
Product Extension - Promotion Adaptation
Product Adaptation – Promotion Extension:
Dual Adaptation
Developing New Product:

Where product function and need remain same but the condition
of product use differ and the consumers do not possess the
necessary ability to pay

20.
 New Product Launch

Waterfall Approach

Sprinkle Approach

21.
 Brands in International Markets

A global brand is defined as the worldwide use

of a name, term, sign, symbol, design, or
combination thereof intended to identify goods
or services of one seller and to differentiate
them from those of competitors.

The most valuable resource a company has

22.
 Global or National Brands ?

 Global Brands:
 Opportunities:
o The Internet and other technologies accelerate the
pace of the globalization of brands
o Ideally gives the company a uniform worldwide image
 Concerns:
o Balance the risk of losing the benefits of well established
country-specific brands
o Ability to translate

Use global brands where possible and

national brands where necessary
23.
 Single Brand Vs Multiple Brands ?

 Samsonite Corporation
 Samsonite
 American Tourister
 Lacoste
 Timberland

 Hattori Seiko
 Seiko
 Lassale

24.
 Swatch Group, Watches and Jewelry
Collectively, the Swatch Group’s nineteen watch brands address all
segments of the market. Each brand carries its own distinct cachet,
and each positions its products to appeal to different and
complementary audiences
Prestige and Luxury Range: Breguet, Blancpain, Glashütte Original,
Jaquet Droz, Léon Hatot, Omega and Tiffany
High Range: Longines, Rado and Union Glashütte
Middle Range: Tissot, ck watch & jewelry, Certina, Balmain, Mido
and Hamilton
Basic Range: Swatch and Flik Flak

25.
 Country-of-Origin Effect
and Global Brands

Country-of-origin effect (COE):

any influence that the country of manufacture, assembly, or
design has on a consumer’s positive or negative perception of a
product.

 Consumers have stereotypes about specific countries and specific

product categories that they judge “best.”
 Ethnocentrism

 The more technical the product, the less positive is the perception of
one manufactured in a less-developed or newly industrializing country

26.
 Private Brands

 Growing as challengers to manufacturers’ brands

 Private labels:
 Provide the retailer with high margins
 Receive preferential shelf space and in-store promotion
 Are quality products at low prices

 Must be competitively priced and provide real consumer

value

27.