CHAPTER 16

MARKETING


Case: Marks & Spencer


- With 300 stores in the United Kingdom, M& S is that country's largest retailer

- M&S has been successful in appealing to the nationalism of its British clientele by promoting heavily the fact that nearly all the all the clothing it sells originates in the U.K.

- UK market is near saturation, its growth must be overseas.

- The team found substantial differences between French and British consumers


I - INTRODUCTION

Domestic and International Marketing Principles are the same, but managers often:

a) Overlook foreign environmental differences
b) Interpret Foreign Information Incorrectly


II - MARKET SIZE ANALYSIS

Broad Scanning Techniques:

a) Limited detailed Analysis to the most promising possibilities
b) Are good for LDCs in which precise data are less available

A - Total Market Potential: management must first estimate the possible sales of the category of products for all companies and then estimate its own market-share potential

B - Existing Consumption Patterns: The Input-Output Table is a tool used widely in national economic planning to show the resources utilized by different industries for a given output as well as the interdependence of economic sectors

C - Data on Other Countries: sales analysis assumes one country will follow a pattern similar to that of another

D - Time-Series-Data: time-series analysis projects the future by examining past trends.


E - Income Elasticity: as incomes changes product demand may
change by a different percentage

Elastic: greater than 1 means that the product demand is elastic, sales are likely to increase or decrease by a percentage that is greater than the percentage by which income changes

Inelastic: sales are likely to increase or decrease by a percentage that is less then the percentage change in income.

This tool is useful for estimating the expenditures for countries at different income levels.

F - Regression: demand is related to some economic or other indicator.

G - Gap Analysis: how well a company is doing in the market. Gap Analysis: is a method for estimating a company's potential sales by identifying market segments that it is not serving adequately

The difference between total market potential and companie's sales is due to gaps:

1. Usage: less product sold by all competitors than potential
2. Product Line: company lacks some product variations
3. Distribution: company misses geographic or intensity coverage
4. Competitive: competitors sales not explained by product and distribution gaps.


III - PRODUCT POLICY

Production Orientation: price is the most important factor in selling many commodities. (raw materials and agricultural commodities)

Passive Sales occur when:

a) Advertising spills over
b) Foreign buyers seek new products

Sales Orientation: internationally, sales orientation involves trying to sell abroad what the company is able to sell domestically on the assumption that consumers are sufficiently similar globally

The greatest ability to sell the same product in multiple countries occurs when consumer characteristics are similar and when there is a great deal of spillover in product information.

Customer Orientation: takes geographic areas as given

Strategic Marketing Orientation: the most common strategy is product changes as adaptations done by degree.

Reasons for Product Alteration:

a) legal factors (safety or health protection)

b) Cultural factors: MacDonalds

c) Economic Factors

d) Alteration Costs

e) Product-Life-Cycles: may differ by country in:

- Time of introduction
- Shape of Curve


IV - MARKETING IN THE INTERNATIONALIZATION PROCESS

A company may enter a market gradually by limiting geographic coverage.

A - Pricing: is more complex internationally than
domestically because of the following factors.

- Different Degrees of Govermental Intervention
- Greater Diversity of Markets (consumers in some countries simply like certain products more and are willing to pay more for them); skimming strategy, penetration strategy, cost-plus strategy
- Price Escalation for Exports
- Changing Relative Values of Currencies

B - Promotion: the process of presenting messages intended to help sell a product or service

Push-Pull Mix:

a) Push: door-to-door selling
b) Pull: magazines, newspapers

Standardization of Advertising Programs: cost savings, better quality at local level, and rapid entry to different countries.

Translation: different meanings, dubbing.

Legality: what is legal in one place may not be elsewhere. Tobacco advertising.

C - Branding: decisions

- Brand versus no brand
- Manufacturers brand versus private brand
- One brand versus multiple brands
- Worldwide brands versus local brands

Language: one problem is that names carries may carry a different association in another language

Pronunciation

Different Alphabets

Country of Origin Images

Generic and Near-Generic Names

D - Distribution: companies may have to devise ways to help distributors so that they give attention to the companies products.

Distribution reflects different country environments

Choosing Distributors and Channels

Distributors Qualifications: financial strength, good connections, extent of its other business commitments



Chapter 15

return to classnotes