Swinburne University of Technology

1. Swinburne University of Technology

2. International Marketing Presented by John Collins

3. 0 Assessment Details • Opportunity identification presentation • Syndicate presentations (2) • Written report 3000 words (+ or - 10%)

4. 0 Assessment Details • Opportunity identification presentation • Students are required to present a one- two minute presentation to the class, identifying an international marketing opportunity –A 1-page report should accompany your presentation. • Following the presentation, students are required to form syndicates of 4 students • –Value of this assessment is 10%

5. 0 Assessment Details • Syndicate presentations (2) • Students are required to form syndicates of 4 students • Groups will be required two present twice, the first will be 10 minutes duration and critiqued by a paired syndicate panel. • Groups must select one of the innovations presented for a product or service for marketing internationally, targeting a consumer market. • Your syndicate’s chosen business venture or product idea must be a consumer-oriented service or a consumer targeted product that demonstrates a significant service orientation.

6. 0 Assessment Details • Written report 3000 words (+ or - 10%) • A brief Market analysis; include some consideration of all relevant specific market factors and a brief discussion on the relevance and impact of any environmental factors. (Recommended 2-3 pages maximum) • Market entry options • Means of distribution, • The product strategy (including a service strategy summary) • Promotional strategy with the market, • Recommended Pricing strategy, • An appendix to the report must detail all syndicate meetings and identify individual roles and responsibilities

7. Definition of International Marketing “International marketing is the process of planning & undertaking transactions across national boundaries that involve exchange”

8. 0 The New International Marketing Environment • Global communications • Information is power • Online shopping • Major changes in the international trading scene • ie bilateral trade agreements • Firms focus on the interests of stakeholders

9. 0 Major changes • A wide range of regional trade initiatives have been finalised: • The Australia - India Trade and Economic Framework was signed on 6 March 2006. • The Australia - Indonesia Trade and Investment Framework was signed on 29 September 2005 • The Thailand - Australia Free Trade Agreement came into effect on 1 January 2005 • The Australia - United States Free Trade Agreement came into effect on 1 January 2005 • The Singapore - Australia Free Trade Agreement entered into force in July 2003 • The Australia - Japan Trade and Economic Framework was signed on 17 July 2003 • The Australia - China Trade and Economic Framework was signed on 24 October 2003

10. 0 Stakeholders of the International Firm

11. International Marketing Australian trade should join the Mexican wave The Age , September 25, 2006 Export opportunities abound in Latin America's second largest economy, writes Tim Harcourt. WHEN Australia signed a free trade agreement with the US, many commentators focused on the long-term benefits it would bring to the economy over the next decade or so. But what about the "other United States" — the United States of Mexico? After all, it is more than a decade since Mexico signed its own pact with the US and Canada through the North American Free Trade Agreement. And how about Australia itself? What gains could Australia expect from closer commercial relations with Latin America's second-largest economy?

12. Australian style Marketing

13. Rip Curl International Marketing

14. Rip Curl International Marketing France Hawaii Indonesia Brazil

15. Driving Forces in International Marketing • Market needs • Technology • Cost ( Economies of Scale) • Communications ( rapid transfer of knowledge)

16. Restraining Forces in International Marketing • Differences between National markets • Political systems • Legal requirements • Cultural norms • Economic development • Technological environment

17. Restraining Forces in International Marketing (Cont.) • Controls over entry and access to markets • Actual or perceived risk 9 • Commercial • Cross-cultural • Country • Financial

18. Approaches to International Marketing • From domestic to transnational “involvement or commitment “ • Domestic orientation - export to overseas agent • Move to international marketing - commit resources to overseas market • Take multinational stance - adapt for the market • Move to global marketing - provide competitive global offering

19. Approaches to International Marketing (Cont.) • From indirect exporting to FDI “nature of involvement” • Use Australian agent • Export to overseas intermediary • Set up a sales office overseas • Arrange for an overseas firm to manufacture under license • FDI in overseas market to avoid import restrictions, for example

20. Approaches to International Marketing (Cont.) • From export to holistic focus “outward & inward linkages” • Import through Australian agent • Import direct • Establish overseas buying office • Manufacture the foreign product in Australia under license • Overseas firm sets up factory in Australia

21. Concepts Underlying International Marketing • Comparative advantage focus on what country does best • Product lifecycle extension – extend to overseas market • Internalisation control v resources • Relationships & networks ie agents alliances etc

22. International Trade Cycle

23. The Wheel of International Marketing

24. The Wheel of International Marketing (Cont.) • Marketing mix variables • Product, price, place, promotion • Interactions between firm and foreign environment • Political/legal, economic, financial, social/cultural, technology, geography/infrastructure, etc. • Modifications required to interact in foreign environment • Product, price, place, promotion

25. Australia and the Global Marketing Environment • Major export activity • Major import activity • Trade in services • Australia-Asian trade

26. Australia’s Merchandise Exports by Destination, 2003-4

27. Australia’s Imports by Sector, 2003-4

28. International Marketing • Session 2 • Opportunity Identification process • Market Selection & Analysis Presented by John Collins

29. 0 Opportunity Selection process • Opportunity identification presentation • Students are required to present a one- two minute presentation to the class, identifying an international marketing opportunity – A 1-page report should accompany your presentation. • Following the presentation, students are required to form syndicates of 3 students • –Value of this assessment is 10%

30. 0 Opportunity Selection process Part A Selection process for projects • Students are required to rank each of the ideas presented for a team project • 3.2.1 ranking process ( 3 is the most preferred project) • Teams of 3 will be created based on the top 4 scoring projects after combining the total 3.2.1. points

31. 0 Opportunity Selection process Part B Selection process for teams • The original project presenter will be the first person selected in each winning team • The next two people selected in each team will be selected on the basis of their preferred project (3 point ranking) • In the event where more than 2 people apply – The project leader will select the additional 2 members • If, in the pool of unallocated students , 1 or 2 remain , those people will be allocated to their preferred 3 member group first (coin toss for first selection). This will result in 1 or 2 groups being 4 member groups

32. Market analysis • This is essentially a definition and specific analysis of the market in which your product/service will be competing. • Market Definition -Important to identify the geographic boundaries, a demographic description and other relevant bases of identifying customers, also include the market size and market characteristics. • Infrastructure. -Description of the Market infrastructure as it affects the industry and market you are analysing for entry. • Political and legal factors- Impact on your decision making for market entry and ongoing marketing strategy. Include a brief P.R.A. • Social and cultural factors.- Any Key customer and industry factors that will require consideration for strategic decision making • International economic factors.- Currency issues, tariffs, taxation etc • Specific market factors -This is an important section. In particular the competitive structure of the market needs to be described here. This could include details on market share, industry characteristics such as rivalry amongst existing firms, threat of new entrants and trends. A brief SWOT ANALYSIS including Any known barriers to entry and KEY SUCCESS FACTORS

33. 0 Environmental Analysis of International Markets Catering for the cultural and social environment http://www.youtube.com/watch?v=i4j9TVX6B34

34. 0 Introduction • Culture encompasses a number of broad dimensions. Culture is: • Prescriptive • Learned • Dynamic • Subjective • Shared • The impact of culture on international marketing: • Conditions needs and wants of potential buyers • Impacts on the way messages are received and interpreted • Pervades all elements of the marketing mix

35. Culture: Elements & Differences • To understand customers you need to understand their cultural heritage, which has developed over time • Need to study the elements of culture • Material culture -technology and economics • Social institutions - concerned with the way people relate to each other • Relations with the universe - religion, superstition, and impact on value systems • Aesthetics - activities and art forms • Language - differ in the way they convey meanings

36. Culture as a Collective Fingerprint • A mark of identity not superiority • It is dynamic in nature • There exists resistance to change • Elements of culture impact differently on different aspects of the marketing program.

37. Levels at which Culture Operates • National - values in which institutions are based • Industrial - values and norms of industry • Organisational - general business patterns of firms

38. Understanding Cultural Differences • Maslow’s Hierarchy of Needs - how consumers respond to cultural stimuli • Self-reference Criterion - develop awareness • High and low context cultures - verbal versus non-verbal cues • Psychic Distance - factors that differentiate the foreign market from the home market

39. Key Cultural Differences • Time - assumptions about time vary across cultures • Space - can be both physical and abstract • Language - precision versus ambiguity • Familiarity - friendship patterns • Consumption patterns - material possessions and dress • Business customs - bribery

40. Culture and Communication • Verbal communication • Who communicates the message and to whom • What message is communicated • How the message is communicated • Where the message is communicated • When the message is communicated • Why the message is communicated

41. Culture and Communication (Cont.) • Non-verbal communication • Body stress signals • Lower body signals • Body posture signals • Random gestures • Facial expressions

42. Cross-cultural Comparisons • 4. Masculine & Feminine • Relationship between gender & work roles • Masculine cultures: strong minded, individualistic, assertive • Feminine cultures: modest, relational, concerned with quality of life

43. 0 Environmental Analysis of International Markets Avoiding the pitfalls of the international political and legal environment

44. 0 The Role of Government • Types of national governments • Parliamentary governments • Industrialised nations - parliamentary democracies • Citizens interact via voting • Absolutist governments • Policy without considering citizens opinions • Other governments • Some fall in between • Parliamentary elections with emphasis on family/the party

45. 0 The Role of Government • Participator • Commercial activities undertaken by government • State owned enterprises; statutory marketing, authorities; the pace of privatisation • Facilitator • Governments may provide concessions/assistance • Tax holidays, subsidies, etc. • Regulator • Government planning activities • Can influence funding, taxes, imposition of conditions, mandatory standards and controls on exports and imports

46. 0 Political Stability & Risk • Political stability - change should be gradual and non-violent • Degree of social unrest • Frequency of changes in the regime • Extent to which the country is divided culturally • Religious division • Linguistic diversity

47. 0 Sources of Political Instability • Political conflict • Some conflict displays higher risks than others • Political intervention

48. 0 Nature of Political Risk • General instability risk • Revolutions, invasions • Ownership risk • Property, lives of expatriates • Operating risk • Interference in ongoing operations • Transfer risk • Restrictions on repatriation of profits, capital, dividends

49. 0 Assessing Political Risk • Country’s track record • Visit the country - ‘grand tour’ • Consult an ‘old hand’ • Political Risk Indexes • Appraising the firm’s exposure to political risk: • Product related factors - political target? • External factors - government relations • Company factors - general reputation, contributions to the foreign market, degree of localisation

50. 0 Managing the Overseas Political Environment • Localisation of operations • Greater localisation can assist • Political risk insurance • Export Finance Insurance Corporation (EFIC) • Premium will vary • Globalisation • Location • Transfer pricing • Standardisation of marketing mix factors